Weekly Download #16

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This week, OpenAI and Microsoft announced a "non-binding memorandum of understanding," which roughly translates to "after a year of negotiations, we've agreed to keep negotiating." Meanwhile, everyone from Apple to Amazon is racing to put AI translators in your ears and AR glasses on your face.

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OpenAI and Microsoft dropped a three-sentence press release Thursday announcing their "non-binding memorandum of understanding about the next phase of our partnership." So after a year of negotiations, they've agreed to keep negotiating.

The Core Contradiction:

The Unsustainable Math:

According to The Information's analysis, both companies had urgent reasons for this week's announcement:

The Hedge: Microsoft is already using Anthropic models for some Copilot features because OpenAI's tech "wasn't good enough" for specific use cases.

Bottom Line: OpenAI needs Microsoft's money to pay Microsoft. It's the perfect "ouroboros of Silicon Valley economics," and as The Information notes, "That sounds like a deal you have when you don't really have a deal."

Apple unveiled its thinnest iPhone ever at just 5.6mm: the iPhone Air, replacing the Plus model at $999. The four new models include iPhone 17, 17 Air, 17 Pro, and 17 Pro Max, all featuring A19 chips and iOS 26's "Liquid Glass" UI with fluid transparency and deeper AI integration.

The China Problem: The iPhone Air is so thin it can't fit a physical SIM card, using eSIM-only technology. Result? The launch was postponed in China, where carriers need special government licenses for eSIM devices. Apple's engineering triumph meets regulatory reality.

The new AirPods Pro 3 ($250) are no longer just about sound. They're becoming a health monitoring device with heart rate monitoring and enhanced noise cancellation.

The Translation Reality Check:

When two people wearing AirPods talk, translations flow both ways simultaneously. Apple's demo showed a tourist hearing Spanish translated to English in real-time. It's pretty incredible to watch.

Google's Pixel 10: Has Voice Translate that preserves the speaker's actual voice inflections. Their Jimmy Fallon demo actually sounded like Jimmy Fallon speaking Spanish.

Meta's Ray-Bans: Already doing translation with speakers built into glasses, text transcriptions on your phone. The new generation with embedded display is coming next week at the Connect conference.

Amazon's Double Play: Entering AR with two models:

Amazon's using display tech from Meta-Bounds, a little-known Chinese supplier, favoring off-the-shelf components while Meta pursues custom dual-display realism.

The Translation Reality: We're getting the sci-fi universal translator, but it barely works. Microsoft Research says 98% of human translators' work overlaps with what AI can do.

VC Vinod Khosla believes AI valuations are bonkers but just not in the way critics think. Yes, many startups are overpriced, but a few "megacorn alpha dogs" will generate returns so massive they'll more than offset the carnage.

💾 Databricks' $100B Reality Check: Closed a $1B Series K at a $100B valuation, projecting $4B in annualized revenue on surging AI demand. The round was co-led by Andreessen Horowitz, Insight Partners, MGX, Thrive Capital, and WCM. Plans include expanding AI products, launching an operational database category, and future acquisitions.

🤖 Mistral's Sovereign Dreams: Dutch semiconductor giant ASML invested $1.5B at an $11.7B valuation (up from $6B). The French AI startup generates maybe $40M in revenue but promises to reduce Europe's dependence on US tech. ASML gets the biggest outside stake and a board seat. The total round will be $2B with revenue at a 290x multiple.

👨‍💻 Cognition's Agent Mania: Raised $400M at $10.2B valuation (doubled in months) led by Founders Fund. Their Devin coding agent has Goldman Sachs and Palantir as customers, and they have also acquired Windsurf. The agent can autonomously code for 200 minutes.

🚀 Replit's Rocket Ship: $250M at $3B valuation (3x jump). Revenue exploded from $2.8M to $150M in under a year, a 50x increase that would make any growth hacker weep. Agent 3 can build, test, and debug apps autonomously for up to 200 minutes. Prysm Capital leads with Google's AI Futures Fund and Amex Ventures as strategics.

🔍 Perplexity's Perpetual Raise: Another $200M at $20B valuation (was $18B two months ago). Has raised money every ~60 days for six months straight, totaling over $1B. Using cash for acquisitions after buying Sidekick browser, Carbon, and hiring from Rhymes AI.

🚀 Standard Capital's Series A Revolution: A new VC firm is trying to do for Series A what Y Combinator did for seed rounds. Co-founded by Dalton Caldwell, Paul Buchheit, and Bryan Schreier, they just announced a $425M Fund I with a radical rethinking of Series A to be similar to a YC-style application process.

🎖️ Veritas Capital's Record Haul: Closed $14.4B Fund IX, crushing the $13B target. 35% larger than the previous fund, now managing $54B focused on gov tech, defense, and "mission-critical" sectors serving government and commercial clients.

🖥️ CoreWeave's Compute-for-Equity: The GPU cloud provider is launching a venture fund offering "compute-for-equity" deals - trading server time for startup stakes. Following the Google/Microsoft playbook with OpenAI/Anthropic. Stock up 150% since March IPO, though down by half from June peak.

🏠 Opendoor's Founder Returns: Shopify COO Kaz Nejatian named CEO after Carrie Wheeler's Twitter-roasting exit. Founders Keith Rabois and Eric Wu return to the board with $40M investment. Nejatian previously oversaw "merchant services," generating 70% of Shopify's revenue.

📍 Pinecone's Pivot: CEO Edo Liberty becomes Chief Scientist as the company consults with bankers about potential buyers. Lost Notion as customer ($4-5M annual spend). Ash Ashutosh, former Google exec, takes CEO role.

🤖 xAI's Revolving Door: CFO Mike Liberatore gone after 3 months, joining co-founder Igor Babuschkin and infrastructure head in the exodus. Left around the end of July, reasons unknown. Even a $100B+ valuation can't make people work for Musk.

Here's a roundup of notable recent funding rounds across various sectors:

Please note that we're still working on building our data pipelines to identify pre-seed rounds as they come.

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We've covered OpenAI burning $350B to compete with companies it's simultaneously enriching, while Apple celebrates inventing something Google did in 2017, and VCs throw billions at companies whose revenue wouldn't cover a Bay Area mortgage.

At least the delivery drivers will get AR glasses. That's... something?

Till next time!

P.S. Raised this week, and we missed you? Want to be featured? Have tips or funding questions? Reply or DM us as we’re here to help.

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