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∆ Tech in the News

Atlantic AI - The U.S. and the U.K. agreed a world-first bilateral agreement to pool AI talent and knowledge and test the risks of advanced AI models.

No-pilot - The US House of Reps will block congressional staffers from using Microsoft Copilot due to a risk of data leakage to non-approved cloud services.

Stargate - Microsoft and OpenAI are spending $100B on a supercomputer to meet the AI computing demands of their tools. Microsoft also just broke ground on a Wisconsin data center and a smaller $10B supercomputer.

Data Wars - Amazon plans to invest almost $150B over 15 years to expand its data centers worldwide to meet the demands of AI applications.

Grok 2.0 - Elon Musk posted that Grok 2 is in training and will “exceed current AI on all metrics“. Grok 1.5 is now live with improved reasoning and a 128k token context.

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The Hottest Thing in Tech this Week

AI Startup DoNotPay Pays Dividend to Investors

AI-powered robo-lawyer startup DoNotPay just announced it paid out $1M in its first profit dividend to investors and employees in January, following the path forged by Gumroad in 2023. This is an exciting new paradigm for pre-IPO tech startups, as dividends could emerge as a new path for employee and investor rewards and a much-needed startup liquidity source amid the private market liquidity crunch. This approach could free up investor liquidity for reallocation, thus increasing overall startup capital. It is also potentially a better alternative for investors, employees, and startups alike than share buybacks.

All DoNotPay shareholders got a cut in proportion to the size of their equity stake, ranging from thousands of dollars to seven figures. It was possible thanks to a small team of only 7, and “a record year” leaving it with more than the $24M capital raised to date from VCs like a16z, Greylock, and Founders Fund.

Founder and CEO Joshua Browder wrote on LinkedIn that the company sees “a new paradigm of startups emerging:

• First, A.I. means that you don’t have to hire lots of people to build a large outcome.

• Second, employees and investors value liquidity more than ever. Even in the public markets, Meta paid its first ever dividend.”

Gumroad’s Crowdfunded Success Story.

DoNotPay were inspired by Gumroad founder Sahil Lavingia who pioneered the approach with his company and went on to launch Flexile which powers the DoNotPay dividend payment system. Equity crowdfunded e-commerce success story, Gumroad, first paid a $1M trial dividend to its 7,378 investors globally in June 2023. In January 2024, it took the approach even further with scheduled regular dividend payouts regardless of revenue status.

As Sam Altman famously said a billion dollar company can now be built by one person. Dividends could offer such lean startups a new way to reward loyal supporters, hold off on IPOs longer, and even create better market conditions.

Reply Yes or No if you are in favor of investor dividends: [email protected]

Deals We’re Watching

Founders to Watch and Opportunities to Catch

Open Deals:

Looking to invest? Let us know if you want a warm intro —> [email protected]

1. Cargo Air Transport Innovation - Building autonomous electric aircraft offering 30x more cargo space and reducing costs by half. Trucking pilot 2024. Direct 3PL integration with ongoing validation with UPS, Walmart, DHL. Backed by clean-tech accelerators. (Seed)

2. AI Employee Fleet - NYC - based business software to generate a fleet of job-specific AI employees for task execution and data interaction, backed by Tribe. (Seed+)

3. AI/ML for Healthcare Admin Billing - Los Angeles - Simplify health documentation with translatable billing and QA for faster Dx coding. Post revenue. 20 Major healthcare clients in pipeline. Serial entrepreneur/founder of medical group. (Seed)

4. Urban Drone Delivery - Leader in urban BVLOS drone operations. Over 20,000 flights in dense cities. Licensed in US, Mexico, and other nations. $55k/month MRR – leased drone fleets. Strong contract pipeline. (Series A)

5. Enterprise Workflow Solution - UK - Productivity software to drive compliance and streamline operations with mobile and wearable integrations. Longterm contracts with top-tier clients like Bayer, Petrofac, and Goodyear. (Seed+)

Raising for your startup? Send us your Open Round —> [email protected]

Closed Deals:

Energy Storage - New York’s Lightshift Energy raised $100M from Greenbacker Capital to grow its energy storage projects across North America.

Furnished Rentals - NY Apartment rental startup Blueground raised a $45M Series D and a debt facility from Barclays, Morgan Stanley, DB, and HSBC.

Data Compliance - Palo Alto startup Skyflow raised a $30M Series B led by Khosla Ventures. Its platform helps companies manage sensitive customer information in compliance with data protection laws.

Military Data AI - San Fran startup TurbineOne, raised a $15M Series A to use AI to process raw military intelligence data without coding or cloud computing.

Companies to Watch:

Transcarent - A San Fran employee healthcare platform startup by Livongo founder Glen Tullman is raising $125M at $2.1B. It reported $50M revenue despite $80M in losses in 2023 and has 300+ employer/healthplan contracts.

Cognition Labs - The creator of AI engineer “Devin”, is seeking funding at a $2B valuation led by Founders Fund, 6x up from its $350M pmv when it raised $21M in March. Cognition recently turned down offers valuing it at $1B.

Shein - The $60B China-founded, Singapore-based fast-fashion giant doubled its annual profit from $700M in 2022 to over $2B and Revenue growth grew by 40%+ in 2023. Shein awaits approval on a U.S. or UK IPO.

The Funding Buzz

Matter Venture Partners - A VC fund by former Kleiner Perkins investors and backed by Kleiner and TSMC closed a $300M debut fund to back "hard tech".

Super{set} - A San Fran startup studio focused on the engineering of AI closed on $90M contributions for its second fund.

1kx - The VC focused on consumer crypto applications, raised a $75M fund backed by a16z's Marc Andreessen & Chris Dixon and Galaxy Digital.

A16z Games Speedrun Accelerator - Applications open for the 3rd class of a $75M accelerator aiming to invest $750k in selected pre-seed gaming startups.

Trending Tools and Buzzy Tech

Tools

Microsoft - Unbundling Office and Teams tools globally.

Meta/Ray-Ban - Adding multimodal AI features: Q&A + identifying objects. 

LinkedIn Video -  Testing a TikTok-like short-form video feed.

Tech

AI Gun Detection - New York to test AI firearm scans at subway turnstiles.

‘Artificial Sun’ - Korean Fusion reactor reaches 7x the Sun’s core temp.

Brain-Computer Interface - Program enables video game play with thoughts.

That’s a wrap! As a Tech Buzz Member, we are giving you the opportunity to have a first look at our deck before we go live with the round. Click the link here to view the deck if you have not done so already.