The E-Commerce AI Search Revolution


Nvidia’s 15 minutes - The chip giant was briefly the world’s most valuable company as NVIDIA hit $3.34T, surpassing Microsoft before returning to #2.

Ethereum Cleared? - The SEC has closed its investigation into Ethereum 2.0, finally confirming that ETH is not a security and will face no charges.

Trump Shares - Trump Media says the SEC has cleared the way for the resale of certain shares and warrants that may net it $247M in proceeds.

Claude 3.5 Sonnet - Anthropic’s new ‘best-in-class’ model beats GPT-4o on several key AI benchmarks for reading, coding, math and vision.

xAI Updates - 1. X Payments may debut by the end of 2024 | 2. Dell, Nvidia, and SMC will collaborate to build an AI factory for the xAI supercomputer. | 3. Elon predicts AGI will arrive by 2025 or 2026 at latest.

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An AI E-Commerce Search Engine Revolution

AI search engine for e-commerce startup Daydream just raised a $50 million seed from Forerunner Ventures, Index Ventures, True Ventures, and Google Ventures. This suggests VCs (including Google insiders) see an opportunity in AI’s disruption of the search market, despite a wider funding slowdown in AI VC flow. Why are investors betting on AI search companies and what does it mean for the future of both E-Commerce and search?

The E-Commerce Search Revolution

Daydream was founded by E-commerce veteran and ex-COO of Stitch Fix, Julie Bornstein. It aims to use gen AI, ML, and computer vision to provide personalized shopping results. It and backers included platform will launch in Beta in the U.S. this fall to let shoppers search using natural language and image recognition. It will first focus on fashion with 2K+ top brands on-board including Net-A-Porter, and, Jimmy Choo.

A VC involved in the deal informed us VCs are betting on Daydream because they believe e-commerce backend infrastructure like Shopify will cease to be the de facto important factor in the future of the sector in the age of AI search. Instead, they predict the focus on headless frontend e-commerce search engines will become far more relevant. Investing in the tech rails for this transition (indexing + AI Agents) could yield benefits.

What Will E-Commerce 3.0 Look Like? 

The approach differs to legacy E-commerce players’ use of AI in key ways:

  1. AI native: Instead of retrofitting AI into legacy systems, it uses ground-up AI platforms and deep E-commerce/AI integration

  2. Highly personalized: It offers an intuitive and personalized search experience and conversational prompts to find what buyers want.

  3. Visual AI: Computer vision models allow users to search based on visual attributes to find similar items with custom modifications.

  4. Contextual search: the AI is designed to understand the context of the searcher and the search including location, purpose, season.

Wider Market Moves

Beyond E-commerce its been a busy week in AI search. San Fran/Singapore AI search startup Genspark also raised a $60M seed led by Singapore VC Lanchi Ventures at $260M post-money. GenSpark claims to deliver higher-quality results by embracing a ‘more surgical approach’. This raise appears to be a bet on the founding team’s solid tech & record at Google and Baidu.

Perplexing The Doubters

Meanwhile, Perplexity AI just received a $10M investment from Korea’s largest telco provider, SK Telecom (SKT) to integrate the tool into SKT’s ‘A.’ AI personal assistant to provide interactive queries, search result summaries, related search suggestions, and translation services. However, the company has also faced bad PR and potential legal trouble after Forbes sent a letter to Perplexity this week formally accusing the company of stealing text and images in a "willful infringement" of its copyright rights.

“This tech allows us to leverage language and images together in a way that allows you to express, as a consumer, what it is you need.”

Julie Bornstein, Founder of Daydream

Get our Deep Dive on Perplexity AI & how AI Search is adding value to Enterprises, Professionals, and Investors » Get Premium Deep Dives

Job Candidates

Request an intro to candidates -  [email protected].

  1. Software Engineering Leader, providing AI solutions. Ex-StoneRiver Enterprise Architect, Arthur Andersen Sr Manager. Arizona State CS degree.

  2. MRI Software Engineer, ex-Epicor Product Developer. Built Chatty, BookStore, and JOTE projects. Nitte Meenakshi Institute of Technology BE in CS.

Open Deals

Request an intro to founders - [email protected]

  1. Cannabis/Hemp E-comm - New York - The first AI-Powered end-to-end online platform for the hemp industry - 2,000% growth in 2 years. (Seed+)

  2. AI Agent Employees - New York - Sophisticated workflow automation for businesses, by a previously-exited founder. Building towards fully autonomous organizations. Backed by Tribe & Kenetic, rolling out to extensive waitlist. (Seed)

  3. Outbound B2B Campaign AI Co-Pilot - Lexington, MA - Turn any CRM into an AI optimized sales agent for personalized customer campaigns. Founder previous exit to PE. Notable Angel on board. Top Hubspot App. Post revenue. (Seed)

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Apple - Halts Vision Pro work to focus on $1.5K Vision headset for 2025.

Google - Video-to-audio (V2A) system generates video soundtracks.

SpaceX - Starlink Mini $599 portable satellite fits in a backpack. 


New Models - 1. Meta drops 4 new open-source multimodal AI models. | 2. Apple drops 20 new Core ML models and 4 datasets for on-device Apps.

Toyota - PUNYO 1.0 humanoid AI Robot learns 100+ skills fast.

Bayer - Crop Science division turns to AI to fight herbicide resistance.

Closed Deals:

FSD Trucks - Toronto startup Waabi raised a $200M Series B co-led by Uber and Khosla, with NVIDIA, Volvo, Porsche, Scania and more joining.

Online Psychiatry Services - New York startup Talkiatry raised a $130M Series C in equity and debt led by a16z, with support from Perceptive.

AI Carbon Capture - "Godfather of AI" Geoffrey Hinton and Max Welling back Cambridge, MA. AI carbon capture startup CuspAI as it emerges from stealth with a $30M seed led by Hoxton, with Basis Set and Lightspeed.

Deals to Watch:

Factory - San Fran Autonomous SWE Droids’ startup Factory doubled its client base and performed well on AI coding benchmarks. Sequoia led its $15M Series A at $120M backed by Lux Capital and Mantis VC.

Safe Superintelligence Inc - Ex-OpenAI chief Scientist Ilya Sutskever, YC partner Daniel Gross, & Daniel Levy launch “the world’s first straight-shot SSI lab”, with one goal and one product: a safe superintelligence.

**Past performance is not indicative of future returns, investing involves risk. See disclosures


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