Latest: Amazon is reportedly in talks to invest $10 billion or more in maker ChatGPT, which already counts giants like Microsoft among its investors. However, the most recent (and loudest) news cycle may have nothing directly to do with funding: Social media lit up with reports that CEO Sam Altman had issued a “code red” to the OpenAI team, saying it was time to double down on improving ChatGPT (the LLM that started it all) or risk falling behind.
FortuneThe tech team recently delved into what’s going on behind the scenes, in an article published this week and led by Jeremy Kahn, Alexei Oreskovic and Lee Clifford. They wrote:
The internal call to arms lays bare the very precarious position this market leader now finds itself in, especially as it takes on industry titans like Google (as well as Microsoft and Meta), with tens of billions of dollars of liquidity on their balance sheets and massive product ecosystems to power their distribution.
For Altman, a longtime tech entrepreneur, the historic showdowns of Silicon Valley’s past, pitting innovators against incumbents in winner-takes-all battles, surely contribute to the sense of urgency: Microsoft’s annihilation of browser pioneer Netscape or the eclipse of BlackBerry’s portable communications gadgets by Apple’s iPhone come to mind. But there is also the example set by Facebook founder Mark Zuckerberg, whose famous “lockdowns” more than a decade ago helped fend off the threat from Google’s nascent — and ultimately doomed — social networking product.
The decisions made by OpenAI and its competitors at this critical juncture in a rapidly evolving market will decide which company will consolidate its grip on what some have called the most transformative technology since electricity, and which will end up as strange footnotes in the final writing of AI history.
Many Term Sheet readers know that I love a good history lesson. (Did you know that venture capital has its roots in the financial structure of whaling companies?) And many people like to say that AI marks a change akin to the industrial revolution. If I’m honest, despite all my skepticism, I believe him.
This means that history is being written right now. A “code red” here or there is progressive, but could make all the difference in the long term. Read the whole story here.
Condition sheet Next… My colleague Lily Mae Lazarus just published this Term Sheet Next profile of Ari Malik, co-founder of Salient AI. He talks candidly about the company’s $25 million ARR and how it has yet to lose a single customer to churn. Read it here.
See you Monday,
Allie Garfinkle
X: @agarfinks
E-mail: alexandra.garfinkle@fortune.com
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Venture Capital Deals
– Kinda Stockholm-based ambiance coding platform, has raised $330 million in Series B funding. CapitalG And Menlo Ventures led the round and were joined by Salesforce Companies, HubSpot Business, Accelerate, Evantique, To createand others.
– Scientific Edisonan AI platform for scientific R&D based in San Francisco, has raised $70 million in seed funding. Triatomic capital, Spark Capitaland an undisclosed major U.S. institutional biotech investor led the round. They were joined by CV Pillar, Suse Ventures, Striker Venture Partners, VC Hawk Tail, Olive VCand others.
– Endra AIa Stockholm-based mechanical, electrical and plumbing engineering platform, has raised $20 million in seed funding. Notional capital led the round and was joined by Northern Lights VC.
– Ember Life Sciencesa Westlake Village, Calif.-based cold chain technology company raised $16.5 million in Series A funding. Capital of the sea court led the round and was joined by Cardinal Health, Carrier companiesand others.
– Phase zeroA Munich, Germany-based startup that builds a communications layer for unmanned defense systems has raised €5.8 million in seed funding. BlueYard Capital led the round.
– Threada New York-based AI service platform for managed service providers, raised $18 million in growth equity. Susquehanna Growth Stocks led the round, and they were joined by Title.
Private equity
– Close partners acquired a minority stake in Monumental Sports and Entertainmenta sports venue and venue management company based in Washington, DC. Financial terms were not disclosed.
