E73: 1/31/25

DeepSeek shockwaves, Helion raised $425M to fuel the renewable energy race, MSFT earnings, AI2's open-source challenger LLM, and more

Hey everyone! I’m sure you’re all tired about hearing out DeepSeek by now, but here is an analysis I thought did an A+ job summarizing its implications, shared to me by FUSE founding partner Brendan. Now to the rest…

PNW AI News:

• Everett-based, Sam Altman-backed Helion Energy brought in a wopping $425M Series F fundraise from Lightspeed Venture Partners and SoftBank, as the need for renewable baseload power for datacenters becomes all the more critical

• Microsoft beats Q4 2024 earnings expectations to $69.6B in quarterly revenue (up 12% from Q3), as AI revenue run rate reaches $13B annually

  • CapEx soared to $22.6B in Q4, up from $20B in Q3, as a result of major datacenter investment

• Microsoft added DeepSeek R1 to the third-party AI models available via its Azure AI Foundry and GitHub

  • In response to DeepSeek, Satya Nadella said “As AI becomes more efficient and accessible, we will see exponentially more demand."

  • Fortifying his stance that open source improvements from China are not a threat but in fact benefit everyone

• The Allen Institute for AI (AI2) released a new version of its open source Tülu 3 AI model with 405B parameters, up from 70B parameters of its previous version, rivalling the performance of OpenAI’s GPT 4o and DeepSeek v3

Key AI Product/Research Updates:

• DeepSeek R1 is now live on Perplexity AI with their Pro Search mode, letting users switch between DeepSeek R1 and OpenAI’s o1, complete with full chain-of-thought transparency

• Alibaba’s Qwen team just released Qwen2.5-VL, a new family of open-source vision-language models (VLMs) with a flagship 72B parameter version that can interact with computers and phones, alongside new advanced capabilities in document and video analysis

  • Similar to Seattle-based Moondream

• Viral Chinese AI startup DeepSeek just released Janus-Pro, a new open-source multimodal AI model that outperforms major image generation rivals like DALL-E 3 and StabIe Diffusion

  • Features 1B and 7B parameter versions, trading off cost for precision

• OpenAI has enhanced ChatGPT’s Canvas feature to include HTML and React code rendering, making it more versatile for users

• Meta rolled out their new AI personalization features that let its assistant remember conversations and tap into user data across Facebook, Instagram, and WhatsApp

• OpenAI just launched ChatGPT Gov, a specialized version of its flagship product designed specifically for US agencies, allowing departments to securely take advantage of AI systems in their own private environment

  • Similar to Seattle-based EdgeRunner

• Twitter founder Jack Dorsey’s fintech company Block launched Goose, an open-source AI agent framework that allows developers to build and deploy AI assistants across multiple platforms and systems

Key AI Business/Investment Updates:

• OpenAI is in talks to raise up to $40B at a staggering $340B valuation, potentially more than doubling its worth from late 2024

• China's new "AI Industry Development Action Plan" will provide 1 trillion yuan ($137B) to support the Chinese AI industry over the next five years

  • Surely in direct response to Stargate

• DeepSeek R1's efficiency caused mass hysteria on the NASDAQ, as Nvidia dropped over 18% on Monday ($600B of value) as a result of skepticism in sustained future AI-related CapEx

  • This was followed by an immediate correction Tuesday

  • The sell-off followed a week of bullish momentum driven by Project Stargate's $500B announcement

• Scale AI CEO Alexandr Wang sparked a debate on the efficacy of US export controls on H100 GPUs, suggesting that DeepSeek in fact had access to 50K H100s, rather than only H800s as stated in DeepSeek's research

  • 22% of NVIDIA's revenue is through Singapore… do we really believe all those GPUs are staying in Singapore???

• DeepSeek's app dethroned ChatGPT as the top spot on Apple's App Store, passing 2.6M downloads, further fueling anxiety over US tech dominance

• ElevenLabs announced a $180M Series C funding round at a $3B valuation

PNW AI/ML/CV Fundings:

• Helion Energy (Seattle, WA) raised $425M in Series F funding from SoftBank, Lightspeed Venture Partners, Sam Altman, and others

  • Developer of a patented plasma accelerator technology designed to address the growing need for clean energy – TFTD $1.02B

  • CEO: David Kirtley

    • Not AI, but relevant in the AI datacenter energy wave

• Paxton (SF/Portland, OR) raised $22M in Series A funding led by Unusual Ventures, joined by WVV Capital, Kyber Knight Capital and 25madison

  • AI compliance platform designed to offer tools to expedite and simplify legal research, drafting, and file review – TFTD $28.2M

  • CEO: Tanguy Chau

• Oumi (Seattle, WA) raised $10M in seed funding from Venrock, Obvious, and Ascend

  • Building end-to-end infra layer for companies in healthcare that want to build their own AI model evaluations – TFTD $10M

  • CEO: Manos Koukoumidis