TheChek News Flow

Ride-hail giant Uber and Chinese autonomous vehicle technology company WeRide have launched a commercial robotaxi service in Abu Dhabi. The launch marks Uber’s first international autonomous vehicle offering.

Uber has been snatching up partnerships with autonomous vehicle companies across sectors, including ride-hail, delivery, and trucking. Other partners include Wayve, Serve Robotics, Aurora Innovation, Waabi, and others.

Still, investors are wary that incumbents like Uber won’t be able to compete with the companies building the technology, like Waymo and potentially Tesla. On Thursday, Uber’s stock dropped nearly 10% after Waymo announced plans to launch a robotaxi service in Miami – this despite the fact that a true autonomous vehicle-flavored disruption to the ride-hail industry will take years, and that Uber may be one of the apps where riders end up connecting to those robotaxis.

Uber’s launch with WeRide, which went public on the Nasdaq in late October, will be small-scale, according to an Uber spokesperson. Neither Uber nor WeRide shared how many vehicles would hit Abu Dhabi’s streets initially. The first rollout will take place between Saadiyat Island, Yas Island, and along routes to and from Zayed International Airport, with plans to expand in the future.

A human safety operator will be present in each vehicle to start, with a fully driverless commercial launch planned for later in 2025.

Uber and WeRide will work with local Tawasul Transport to handle fleet operations.

This is going to become tedious. Shares of Uber and Lyft dropped 10% today on word that Alphabet’s Waymo, our favorite self-driving taxi service, is opening for business in Miami. Just a few weeks ago, the ride-hailing firms’ stocks rose about 10% as investors decided Tesla’s self-driving–car event the day before had been a dud—implying that it posed less of a threat to Uber and Lyft.

Seriously, folks? Every time there’s any new data point on self-driving cars, Uber and Lyft shares bounce up or down 10%? Does that make any sense? We’re in the early innings of what’s sure to be a yearslong shift to self-driving cars. Waymo, for instance, doesn’t plan to offer commercial service in Miami until 2026. It’s a little early to be making day-by-day judgments on what one tiny bit of news means for Uber and Lyft.

What makes today’s sell-off particularly silly is that both ride-hailing firms are positioning themselves to participate in self-driving cars. Uber, for instance, is partnering with Waymo (and other self-driving–car firms) in several markets. Since last year, Uber customers in Phoenix have been able to get a Waymo when they order a car on the Uber app, and a similar arrangement will unroll next year in Austin, Texas, as well as Atlanta. (Uber Eats customers can also order meals via Waymos in Phoenix.)

In Austin and Atlanta, moreover, Uber will manage Waymo’s fleet, doing the humdrum work of keeping the cars clean and dealing with repairs, as well as arranging the charging of the electric vehicles. When Waymo launches in Miami, that job will be handled by Moove, a company Uber partly owns. You can see the possibility that Uber might one day extend its partnership with Waymo to Miami. It’s not surprising, then, that Uber CEO Dara Khosrowshahi, talking about the company’s Waymo partnership on its last earnings call, said, “We’re pretty optimistic where we sit.”

It makes sense for Uber and Waymo to collaborate, given how well penetrated Uber is in the ride-hailing business and how advanced Waymo’s technology is. In other words, what’s good for Waymo can be good for Uber. Of course, things could change over time, as we wrote here. But investors might want to have a less knee-jerk reaction to the daily news.

The Budget Delivery Wars

Temu is winning over low- and middle-income shoppers in the U.S. by offering ultracheap prices that don’t require people to visit a bargain bin in a bricks-and-mortar store. That’s rankled Amazon, but it’s done much more damage to budget-focused traditional retailers like Dollar General and Dollar Tree. Shares of both companies have fallen more than 40% this year, due in part to Temu making inroads with penny-pinchers.

Dollar General is striking back. On Thursday, CEO Todd Vasos told analysts the retailer was testing same-day delivery out of 75 of its stores for customers who order through its website and app, with plans to eventually expand the service to thousands of locations. That comes in addition to a deal Dollar General has had since 2021 to offer deliveries through DoorDash.

You can see the logic for doubling down on deliveries: Temu has shown that even the most budget-conscious shoppers like having stuff delivered, and it makes sense for a dollar store to try to grab a piece of that pie. Even better for Dollar General, Temu hasn’t yet figured out how to offer same-day delivery, since it still ships many of its packages from China on airplanes.

But it’s hard to see the economics making sense for Dollar General. Paying people to go into physical stores to grab items off shelves and drive them to shoppers’ homes is woefully inefficient compared to dispatching deliveries en masse from warehouses.

And Temu has a knack for squeezing savings out of every part of the supply chain, including last-mile deliveries, as we’ve reported. To avoid losing money on deliveries, Dollar General will likely have to pass costs on to consumers through fees, which would wipe out its budget appeal.

Ooredoo secured an agreement with Nvidia to deploy the latest-generation graphics processing units in its 26 data centers across Qatar, Kuwait, Oman, Tunisia and the Maldives

Qatari telecom group Ooredoo is on a hunt to acquire data centers because it can’t build them fast enough to house Nvidia’s NVDA -0.05%decrease; red down pointing triangle latest-generation of artificial-intelligence chips, its chief executive said.

Ooredoo, majority-owned by the Qatari sovereign wealth fund, in June secured an agreement with Nvidia to deploy the AI chip maker’s latest-generation graphics processing units in its 26 data centers across Qatar, Kuwait, Oman, Tunisia and the Maldives.

The deal gives Nvidia access to markets stretching from North Africa to South Asia. For Ooredoo, the agreement means it can deploy Nvidia chips to cash in on robust demand for accelerated computing infrastructure needed to support generative AI.

But the company now faces a shortage of data centers to house those chips and is betting on acquisitions to help it address surging demand for processing power in the countries where it operates.

“As demand grows, we can’t build data centers fast enough,” Ooredoo’s Chief Executive Aziz Aluthman Fakhroo said in an interview.

“When you look at the latest-generation chips, you can’t just plug them in traditional data centers,” he said. “They need specifically designed data centers with liquid cooling, and this will take 18 months to build out.”

Ooredoo in September secured about $550 million in financing from banks to expand its data-center capacity in the Middle East and North Africa. Gulf countries are heavily investing in AI, looking to become key players in an industry where they can leverage lower energy costs to operate data centers.

But Fakhroo cautioned that building the latest generation of AI data centers at scale can be costly. “You’re usually looking at $10 million to $12 million of investment per megawatt,” he said.

The chief executive said Ooredoo would mostly seek to ramp up its data-center capacity through acquisitions in its existing markets, ruling out expansion in Europe. The decision underscores efforts from the company to diversify its portfolio beyond core telecom services as it jockeys for position as an AI and infrastructure player, Fakhroo said.

“We believe telecom services will continue, but one way to de-risking the business is in investing in the infrastructure stack,” he said.

Ooredoo hopes to capitalize on growing demand from the government and companies in oil and gas, banking, transportation and logistics that require high-performance computing and AI applications. The region currently has limited data centers designed for the high-power density and advanced cooling systems needed to house the latest-generation AI chips.

Fakhroo said the company is aiming to sell the first graphics processing units as a service in Qatar by the first quarter of next year. “We’re looking to very quickly dispatch these chips to Kuwait and Oman after Qatar in the months to come,” he added.

Nishit Lakhotia, analyst at SICO Bank, said Ooredoo could be the most aggressive telecom player with its data-center plans in the region. “You’ve not seen any other company in the industry within the region as black and white with this strategy,” he said.

While its AI data center expansion is drawing most attention from investors, Ooredoo is also seeking to streamline the business, weighing the option to carve out its fiber unit. “We carved out the towers business, then data centers, mobile financial services and in the future potentially fiber,” Fakhroo said.

However, the company said it wasn’t planning to sell its tower business, in which it retains a 49% stake. “We believe there’s lots of value in the tower business,” he said.

Gapping down
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Gapping up
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Start-up discusses removing provision to protect powerful technology from being misused for commercial purposes

OpenAI is in discussions to ditch a provision that shuts Microsoft out of its most advanced models when the start-up achieves “artificial general intelligence”, as it seeks to unlock billions of dollars of future investment.

Under current terms, when OpenAI creates AGI — defined as a “highly autonomous system that outperforms humans at most economically valuable work” — Microsoft’s access to such a technology would be void. The OpenAI board would determine when AGI is achieved.

The start-up is considering removing the stipulation from its corporate structure, enabling the Big Tech group to continue investing in and accessing all OpenAI technology after AGI is achieved, according to multiple people with knowledge of the discussions. A final decision has not been made and options are being discussed by the board, they added.

The clause was included to protect the potentially powerful technology from being misused for commercial purposes, giving ownership of the technology to its non-profit board. According to OpenAI’s website: “AGI is explicitly carved out of all commercial and IP licensing agreements.”

But the provision potentially limits the value of its partnership for Microsoft, which has pumped more than $13bn into OpenAI, and could disincentivise the Big Tech group from further investment.

More funding will be needed given the eye-watering costs involved in developing advanced AI models in a race against deep-pocketed rivals such as Google and Amazon.

The San Francisco-based group led by Sam Altman, which was recently valued at $150bn, is currently restructuring to become a public benefit corporation. That move represents a departure from its origins as a not-for-profit research lab. 

As part of the changes, OpenAI is discussing new terms with investors, including its largest shareholder Microsoft, according to multiple people familiar with the conversations.

“When we started, we had no idea we were going to be a product company or that the capital we needed would turn out to be so huge,” Altman told a New York Times conference on Wednesday. “If we knew those things, we would have picked a different structure.”

“We’ve also said that our intention is to treat AGI as a mile marker along the way. We’ve left ourselves some flexibility because we don’t know what will happen,” added Altman, who could receive a direct equity stake in OpenAI for the first time as part of the restructure.

OpenAI began raising outside capital in 2019, receiving a $1bn investment from Microsoft that year. At the time, the company said it intended “to license some of our pre-AGI technologies” to Microsoft to cover the costs of developing cutting-edge AI. 

OpenAI has advised backers to consider their investments “in the spirit of a donation, with the understanding that it may be difficult to know what role money will play in a post-AGI world”.

But its steady move to becoming a for-profit entity has received strong criticism from rivals, including Elon Musk, an early backer and co-founder of OpenAI.

The billionaire Tesla chief, who has since founded a rival start-up xAI, recently filed a lawsuit against OpenAI and Microsoft, accusing Altman of “deceit of Shakespearean proportions” and seeking to void its commercial partnership with Microsoft. 

As part of the proposed restructuring, the ChatGPT-maker will also retain an independent not-for-profit entity, which would have a stake in the new public benefit corporation and potentially a trust, according to people familiar with the discussions. The not-for-profit would have access to research and technology but solely focus on pursuing OpenAI’s mission of benefiting humanity.

OpenAI declined to comment on the specifics of negotiations around the restructuring but Bret Taylor, chair of OpenAI’s board, said the board of directors of the non-profit “is focused on fulfilling our fiduciary obligation by ensuring that the company is well-positioned to continue advancing its mission of ensuring AGI benefits all of humanity”.

He added: “While our work remains ongoing as we continue to consult independent financial and legal advisers, any potential restructuring would ensure the non-profit continues to exist and thrive, and receives full value for its current stake in the OpenAI for-profit with an enhanced ability to pursue its mission.”

Microsoft declined to comment. 

While some things tend to slow as the year winds down, artificial intelligence fundraising apparently isn’t one of them. Last month, xAI and Anthropic raised a combined $9 billion as AI funding remained red-hot. Other sectors, including IT management and robotics, also saw big rounds. Let’s take a look.

1. xAI, $5B, artificial intelligence: Generative AI startup xAI raised $5 billion in a round valuing it at $50 billion, The Wall Street Journal reported. The new round more than doubles its valuation from a $6 billion round the company raised in May. The latest deal includes investment from the Qatar Investment Authority, Valor Equity Partners, Andreessen Horowitz and Sequoia Capital. When Elon Musk-led xAI officially announced its long-awaited fundraise this spring, it became the second-most-valuable generative AI company in the world behind only competitor OpenAI.

2. Anthropic, $4B, artificial intelligence: Amazon has agreed to invest another $4 billion in AI startup Anthropic, another ChatGPT rival with its AI assistant Claude. Last fall, Amazon agreed to invest up to $4 billion in Anthropic — giving the Seattle-based e-commerce and cloud titan a minority stake in the company. The immediate investment was $1.25 billion, with the remaining $2.75 billion in funding coming earlier this year. That deal included Anthropic naming Amazon Web Services its primary cloud provider, as well as using AWS Trainium and Inferentia chips to build, train and deploy its models. This new investment means Amazon will have invested $8 billion into Anthropic, retaining its minority stake in the startup, per an Anthropic blog.

3. Tricentis, $1.3B, DevOps: Tricentis got a $1.3 billion investment from private equity firm GTCR valuing the software testing startup at $4.5 billion. It was unclear from reports if this is new equity or for existing shares, but for now it makes the list. The Austin, Texas-based startup was founded in 2007 in Austria. Insight Partners took majority ownership in 2017. The company has now raised $1.5 billion in total.

4. LogicMonitor, $800M, IT management: LogicMonitor, which provides IT observability and monitoring, took in $800 million in new equity and debt from an investor consortium that includes PSG Equity, Golub Capital and others. The deal is part of Vista Equity Partners selling a minority stake in the company, which is now valued at about $2.4 billion. The IT infrastructure company said it will use the fresh cash for M&A activities and entering new markets globally. Vista bought LogicMonitor in May 2018 for about $415 million.

5. Insider, $500M, digital marketing: Marketing tech platform Insider raised a $500 million Series E led by General Atlantic to fund its expansion in the U.S. and AI product development. The latest funding comes about 18 months after a round last year that valued it at $1.9 billion. The New York-based company declined to disclose its valuation with the latest round. Insider, which was co-founded in Istanbul in 2012, has now raised $772.1 million from investors, per Crunchbase. The company says it operates in 28 countries around the world and counts big names such as Nike, Samsung, L’Oreal, Unilever, Allianz and Disney among its customers.

6. Physical Intelligence, $400M, robotics: Physical Intelligence, a startup developing brains for a wide array of robots, raised a $400 million round at a $2 billion valuation led by Jeff Bezos, Lux Capital and Thrive Capital, per The New York Times. The San Francisco-based company had raised a $70 million seed round at a valuation of about $400 million back in March. Physical Intelligence is just the latest startup looking to use AI to improve how robots operate and to create foundational software that could be used on a variety of robot models instead of having to create separate operating software for each individual model. Investors — especially Bezos — already have placed big bets at the intersection of robotics and its AI-enhanced foundational software. In February, Sunnyvale, California-based Figure, which is developing AI-enhanced robots that it hopes will be able to perform dangerous jobs and alleviate labor shortages, raised a huge $675 million round at a pre-money valuation of roughly $2 billion. That round included investments from Nvidia, Bezos’ Explore Investments and others. In July, Pittsburgh-based Skild AI — also developing brain models that can be used in a variety of robots and for different tasks — raised a $300 million Series A led by Coatue, Lightspeed Venture Partners, SoftBank Group and Bezos, through his Bezos Expeditions. The funding valued the company at $1.5 billion. Overall, this has been a good year for robotics startups receiving funding.

7. Cyera, $300M, cybersecurity: After raising a $300 million Series C led by Coatue at a $1.4 billion valuation in April, data security startup Cyera last month closed another $300 million windfall at more than twice its previous valuation. The New York-based company announced a $300 million Series D led by Accel and Sapphire Ventures at a $3 billion valuation. While a cybersecurity company, Cyera is certainly riding the AI wave. The startup has an AI-powered data security platform that helps security teams at companies understand what data they have and how it’s used, as well as how to secure it across a complex digital landscape. Of course, the reliance on data has only become stronger as companies drive AI initiatives. Founded in 2021, Cyera has raised $760 million to date, per the company.

8. Wonder, $250M, food delivery: Marc Lore’s food delivery startup Wonder can’t stay off this list. It was here in June 2022 and again this past March. It went big again last month as part of its $650 million acquisition of Grubhub, raising an additional $250 million in capital exclusively from new investors, which were not named. The deal price was a significant drop for Grubhub, which was bought by Just Eat Takeaway for $7.3 billion in 2021. Founded in 2018, Wonder has raised nearly $1.9 billion, per Crunchbase.

9. Metsera, $215M, biotech: It was just in April when the New York-based clinical-stage biopharmaceutical startup emerged from stealth with $290 million in funding led by Arch Venture Partners. The company did it again last month, raising a $215 million Series B led by Venrock Healthcare Capital Partners and Wellington Management. The company is exploring medicines for obesity and metabolic diseases with a collection of oral and injectable incretin, nonincretin and combination therapies.

10. Writer, $200M, artificial intelligence: San Francisco-based Writer locked up a $200 million Series C that values the enterprise-focused generative AI platform at $1.9 billion. The new valuation is a nice uptick from the $500 million the company was valued at after a $100 million round led by Iconiq Growth last year. The new Series C was co-led by Iconiq, Premji Invest and Radical Ventures. Writer’s platform is designed to help businesses use large language models to improve workflows and offers AI solutions that can execute complex enterprise operations across systems and teams. The new cash will be used for the company’s quick-start AI applications and agents for workflows in healthcare, retail and financial services. Writer continues to grow its customer base, which includes names like Accenture, L’Oreal and Uber.

The biggest deal outside the U.S. came from Europe.

Some believe Klarna’s planned IPO in 2025 could set the stage for other fintech startups to go public. But with the tech IPO market still sluggish, one of the candidates hotly tipped to follow suit has instead just announced a fundraise, and its CEO says going public is “not a priority.”

Zopa, the U.K. neobank that provides loans, credit cards and savings accounts to some 1.3 million customers, has raised €82 million ($86.8 million based on current exchange rates) in equity funding. The company is not disclosing an exact valuation, but from what we understand it is an upround and values Zopa at well over $1 billion.

For some context, that figure is an increase on Zopa’s last big valuation reveal, when it raised $300 million in 2021. The company is profitable and has been growing its customer base at a rate of around 35% annually. Zopa expects to end the year with 1.4 million customers, £5 billion in deposits, and its profit doubling compared to the year before to £32 million (around $40 million) and revenues to “north of” £300 million ($383 million).

The lead investor in this round is an interesting one: it’s A.P. Moller Holding, a giant in Danish business that owns not just the shipping behemoth Maersk but also Danske Bank, among other assets. Other investors are not being disclosed except to note they are existing backers. Zopa’s previous investors include SoftBank, which led that $300 million round in 2021; as well as Silverstripe, Northzone, and Uprising. (Some of the details of this investment were leaked earlier in the week, although the amount and investors were not accurate.)

But while Zopa’s numbers look strong, especially for the current market where later-stage startups continue to struggle to raise growth rounds — let alone grow — they also speak to how the company has had to take a longer time to get to where it has wanted to go.

In 2021, when Zopa announced a $300 million fundraise that first catapulted it to a $1 billion valuation, CEO Jaidev Janardana described it to TechCrunch as a “pre-IPO round” ahead of an offering at the end of 2022. It also said it expected to be profitable by the end of 2021.

Not only did that IPO never materialize, but it’s largely off the table for the foreseeable. “We will wait for the markets to revive and be more positive,” Janardana said in an interview on Thursday, noting that it has plenty of cash in the bank and just £75 million in debt payable years from now. Meanwhile, Zopa reached its profit milestone — a full year of profit — only in April 2024.

A recent, recurring theme in fintech has been high valuations attached to very fast-growing startups that have subsequently struggled to live up to lofty projections, but Zopa is not your typical fintech startup.

The company has actually been around since 2005, when it started out as a pioneer in the peer-to-peer lending space competing against startups like Prosper, providing a platform to match up investors with borrowers at rates more competitive than traditional banks and returns that were more attractive than other investment opportunities.

By 2020, it started to move out of that business — which had become more tricky over the years due to regulation, reduced returns and a lot of high profile players exiting the space after Covid-19 killed the model. Zopa picked up a banking license that year and started a pivot into savings and non-P2P loan products. (By the end of 2021, Zopa’s P2P lending was shut down completely.)

But bucking the “hypergrowth” mantra of so many fintech companies, in the years since, rather than using that pivot to spin up a lot of new services, it’s largely doubled down on those first products.

Crypto is nowhere in its roadmap for now, for example. “As of now, we still remain arm’s length,” Janardana said in reference to decentralized currencies. “Ultimately, we have a responsibility that we give our customers products that we think are suitable for them, and that they understand. I don’t feel that as of today, that the average of a customer, at least in our mind, passes that bar.”

Nor has it felt the need yet to expand outside the U.K. “The U.K. has a lot of road to run, so we remain focused there,” he said. “International continues to be longer term and opportunistic.”

Plans for 2025 do include Zopa launching its first current account products — checking accounts as they are typically called in the U.S. — and bringing more AI into the company, he said.

Janardana said that Zopa is already using AI, for example developers are leaning on it to help write code. AI will expand to the front office next year, he said. He company is building a generative AI platform to help customers manage their money, and to help them buy more Zopa products in a more personalized way. “We are really looking forward to how our interactions with customers can move beyond the mobile app into something bit more warm, personal, and ‘human,’” he said of the GenAI plans.

Putting GenAI to work in fintech is a holy grail in the space, and some efforts are extremely ambitious. One Zero out of Israel, one of the many startups being founded by Mobileye’s Amnon Shashua, is aiming to build the GenAI equivalent of a private banking specialist — typically the kind of service reserved for high net-worth individuals. Its plans will be eventually to turn that into a service it sells to other banks, and likely others will, too, so Zopa may have options beyond what it choose to build itself.

Building itself has been the other USP for Zopa up to now. Unlike other neobanks that essentially pull together fintech-as-a-service APIs to power their products, Zopa has built its platform itself from the ground up, and that’s allowed it to gradually become the fintech supplier itself, powering financial services for other companies. These have included partnerships with electricity supplier Octopus Energy, and with the retailer John Lewis to offer personal loans directly to its 23 million customers.