Weekly Download #32

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This week in Silicon Valley, startups & tech:

• Grok's Global Reckoning: UK threatens ban, Indonesia and Malaysia block access, EU orders document preservation, and more

• China's AI IPO Bonanza: MiniMax doubled on debut, Z.ai raised $558M, and Chinese execs openly admit the US gap is widening

• AI Agents Go Shopping: Google unveils Universal Commerce Protocol, Walmart partners with Gemini, Microsoft launches Copilot Checkout

• Anthropic's $350B Coronation: Raising $10B from GIC and Coatue, up from $183B just four months ago

• a16z Captured 18% of All US VC: Raised $15B across five funds while managing $90B in assets

As we continue to build at Context Ventures, we've launched Startup Intros with a simple mission: to help early-stage founders find the right investors, faster and smarter.

🔥 Context VC & Startup Intros Events Coming Up

• Jan 20: AI Startup Pitch Night: Apps to pitch are open! Join us in SF for an exciting pitch night featuring the hottest AI startups. Sign to pitch here!

• May 27: Early Stage Summit: Due to various logistical factors, we had to reschedule the event, but plan to make it better than ever. Register on Luma!

🚨 Grok's Global Reckoning: From CSAM Generator to International Pariah

Last week, we covered Grok generating CSAM and India's 72-hour ultimatum. This week, the dominoes fell internationally, with regulators across three continents moving to contain the damage.

🌍 The Global Crackdown Timeline

The Escalation:

• Jan 8: EU orders X to retain all Grok documents until the end of 2026

• Jan 9: UK's Ofcom opens investigation under the Online Safety Act, threatening X with a ban or fine

• Jan 10: Indonesia becomes the first country to block Grok entirely

• Jan 11: Malaysia follows suit, becoming the second country to block access

X's "Fix": Grok restricted image generation to paid subscribers only. The UK government's response? "Insulting," because making the ability to generate unlawful images a premium feature isn't exactly a safety measure.

🔥 The Content Got Worse, Not Better

Wired's investigation revealed that Grok's website and app are generating "extremely graphic, sometimes violent, sexual imagery" that is "vastly more explicit" than anything allowed on X itself. The platform that banned porn is now hosting an AI that generates content violating its own terms of service.

The Backstory: CNN reported that weeks before the scandal broke, Musk expressed frustration to xAI staff about restrictions on Grok's image generator. The CEO wanted fewer guardrails; now multiple countries are blocking the product entirely.

Translation: xAI launched Grok 5 (6T parameters), enterprise products with SOC 2 compliance, and Pentagon integration plans, all while its consumer product was getting banned by democratic governments. That's not "move fast and break things." That's "move fast and become an international regulatory target."

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🇨🇳 China's AI IPO Wave Masks a Widening Gap

💰 Hong Kong's $1.2B AI IPO Week

Chinese AI startups raised over $1.2B in Hong Kong this week alone, even as their executives publicly admit they're falling behind.

The Numbers:

• MiniMax: Raised ~$619M at top of range, stock closed up 109% on debut. GIC and Baillie Gifford bought in; institutional offering oversubscribed 70x+

• Z.ai (Zhipu): Raised ~$558M at ~$6.55B valuation, closed up 13.2% on debut

• CXMT: The memory chip maker's $4.2B IPO would rank among the century's biggest chip debuts

😬 China's AI Elite Admits the Gap Is Widening

At the AGI-Next Summit in Beijing, China's top AI executives delivered an unusually candid assessment. Alibaba's Justin Lin put the odds of any Chinese company leapfrogging OpenAI at "less than 20%" over the next 3-5 years. Zhipu's Tang Jie was blunter: "The gap may actually be widening."

The Resource Asymmetry: "A massive amount of OpenAI's compute is dedicated to next-generation research, whereas we are stretched thin, just meeting delivery demands consumes most of our resources," Lin said. US infrastructure is "one to two orders of magnitude larger."

The Lobbying Subtext: Semafor noted these comments landed the same week Beijing was deliberating H200 imports, with Alibaba and ByteDance each privately seeking 200,000+ chips. One analyst suggested the executives were lobbying Beijing to approve the orders.

Translation: When your most prominent AI leaders publicly admit they're losing while their companies are begging for chip access, the pessimism might be strategic. Nothing says "please approve our Nvidia order" like telling the government your industry is falling behind without better hardware.

🛒 The AI Shopping Wars: Agents Get Wallets

🤝 Google's UCP: An Open Standard for AI Agent Commerce

Google unveiled the Universal Commerce Protocol (UCP), a new open standard that lets AI agents work across different parts of the customer's buying process. Think of it as OAuth for shopping or a way for your AI assistant to browse, compare, and purchase across merchants without custom integrations.

The Walmart-Gemini Partnership: Walmart partnered with Google to let users purchase Walmart and Sam's Club items directly within Gemini. When the world's largest retailer integrates with Google's AI, that's a signal.

Microsoft's Copilot Checkout: Microsoft launched Copilot Checkout in the US, enabling in-chat purchases via PayPal, Shopify, and Stripe. Shopify merchants are automatically enrolled.

😬 OpenAI's Sh2opping Stumbles

The Information reported that OpenAI has been slow to expand in-app checkouts because the startup and its partners Shopify and Stripe are struggling to standardize merchant data. Building a universal shopping layer turns out to be hard when every merchant's data looks different.

The Super App Play: Meanwhile, OnePay, the fintech behind Walmart's "super app," hit a $4B+ valuation.

Translation: The race to become the default shopping layer for AI is heating up. Google's betting on open standards. Microsoft's betting on existing payment rails. OpenAI's still figuring out the data problem. And Walmart's building its own super app just in case none of them win.

⚡ Startup Quick Hits: When $10B Raises Barely Make Headlines

🧪 LMArena's $150M to Grade Everyone Else's AI: The AI evaluation platform raised Series A led by Felicis and UC Investments. When the benchmark makers raise nine figures, the benchmark-gaming industry is officially a thing.

🔐 Cyera's $400M at $9B for Data Security: Series F led by Blackstone Growth, up from $6B in June 2025. The Israeli data security startup that keeps doubling.

🤖 Torq's $140M at $1.2B for Security Ops: Tel Aviv-based autonomous security operations platform raised from Merlin Ventures.

🚁 Harmattan AI's $200M at $1.4B for Autonomous Drones: Paris-based dronemaker raised Series B led by Dassault, targeting 10K drones per month in 2026.

☁️ Lambda Eyes $350M+ Ahead of H2 2026 IPO: The Nvidia-backed AI chip rental company is in talks with Mubadala Capital.

☁️ Nscale Eyes $2B Round: The UK-based cloud provider is back in market after raising $1.5B+ in September and October.

💰 Investor Quick Hits: The Great Capital Concentration

👑 a16z's $15B War Chest + 18% Market Share: Andreessen Horowitz raised $15B+ across five new funds, including $6.75B for its fifth growth fund. The firm captured 18%+ of all US venture capital in 2025 and now manages $90B, vs. Sequoia's $56B and General Catalyst's $43B.

🔬 Lux Capital's $1.5B for Breakthrough Science: Closed its ninth and largest fund ever, focused on breakthrough science and national security.

🧬 Arkin Capital's $100M for Israeli Biotech: Raised its third biotech VC fund, per Axios Pro.

🏀 Bruin Capital's $1B for Sports Tech: Raised a new fund focused on sports tech and services companies.

💊 Lupus Ventures Launches: A philanthropic venture fund from The Lupus Research Alliance, focusing on autoimmune disease therapies.

💸 IPO & M&A Quick Hits: The Exit Window Cracks Open

🏦 BitGo IPO: $201M at $1.96B: The crypto custody company aims to raise up to $201M on the NYSE, selling 11.8M shares at $15-$17 each.

🏃 Strava Confidentially Files for IPO: The fitness startup grew revenue 50%+ YoY in 2025, but still to less than $500M. Seventeen years from founding to IPO filing.

🔍 Snowflake Acquires Observe: The data company snaps up the AI observability platform, reportedly valued at ~$1B.

🔐 CrowdStrike Acquires SGNL for $740M: The identity management startup bolsters CrowdStrike's Falcon platform.

💼 Toptal Acquires Graphite: The on-demand talent platforms consolidate.

🌟 Editor's Note

At Startup Intros, our mission is to bring the latest founder-investor news straight to your inbox, keeping you ahead in the fast-paced world of Silicon Valley.

💭 Parting Thoughts: The Year Starts With a Warning

So there you have it: a week where Grok went from "move fast and break things" to "move fast and get banned by democracies," Chinese AI companies IPO'd over $1B while their own executives admitted they're losing the race, and Google, Microsoft, and Walmart all decided that AI agents should have credit cards.

The Anthropic news is almost a footnote: $10B at $350B, nearly doubling in four months. When a raise that would've been the story of the year barely cracks the top five, you know the market has gone somewhere new.

Meanwhile, a16z captured 18% of all US venture capital in 2025 while managing more AUM than Sequoia and General Catalyst combined. So can anyone else compete in VC?

Forward to a friend or hit reply to let me know what you're seeing in your world.

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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