WSJ : Musk’s xAI Has Discussed Deal for Share in Future Tesla Revenue

Musk’s xAI Has Discussed Deal for Share in Future Tesla Revenue
Under a proposed arrangement, the startup would give Tesla access to its AI technology in exchange for a slice of the carmaker’s software revenue

Elon Musk’s AI startup xAI has discussed a deal where it would get some Tesla TSLA -8.45%decrease; red down pointing triangle revenue in exchange for providing the carmaker access to its technology and resources, the latest example of the growing interconnectedness of Musk’s companies.

Under a proposed arrangement as described to investors, Tesla would license xAI’s AI models to help power its driver-assistance software, called Full Self-Driving, and share some of that revenue with the startup, according to people familiar with the matter. xAI would assist in developing other features for Tesla, including a Siri-like voice assistant inside its electric cars and software to power its humanoid robot Optimus, the people said.

The terms of any revenue-sharing agreement between xAI and Tesla would depend in part upon how extensively Tesla relied on xAI’s technology as opposed to its own, the people said. xAI executives have discussed an even revenue split from Tesla’s FSD, one of the people said.

Musk has bet the future of Tesla on robotics and artificial intelligence. FSD costs Tesla drivers $99 a month or a flat fee of $8,000 to use the service, which requires drivers to keep their hands on the wheel. The company is also developing a robotaxi, which is scheduled to be unveiled Oct. 10. It is unclear when it will be made available to the public.

Musk has promised for years that FSD will advance enough to make all Teslas fully autonomous and suggested that success could turn Tesla into a multitrillion-dollar company. Musk also has said Tesla would be worth “basically zero” without full autonomous driving.

Formalizing a partnership with xAI in which Tesla would hand over some of its revenue and future AI development to a separate Musk-controlled company would add to the tech mogul’s practice of sharing assets freely across his business empire.

Musk is already shifting talent and hardware between xAI and Tesla as he plays catch-up in the AI race, raising concerns about potential conflicts of interest. There is particular scrutiny around how Musk shares resources of Tesla, which is publicly traded. Several Tesla shareholders have filed suits claiming that the shift in resources to xAI has hurt the carmaker’s investors. The cases are pending in the Delaware Court of Chancery.

xAI has hired multiple employees from Tesla, including several who have worked directly on the Autopilot team focused on developing self-driving capabilities. Musk also diverted thousands of hard-to-get Nvidia GPUs from Tesla to xAI last year. After that move became public, Musk said that “Tesla had no place to send the Nvidia chips to turn them on, so they would have just sat in a warehouse.”

In pitches to investors, xAI representatives have described the company as a future key technology provider for Tesla’s suite of software products, the people familiar with the possible revenue-sharing agreement said.

In a July post, Musk asked X users if Tesla should invest $5 billion into xAI. Two days later, he posted: “Looks like the public is in favor. Will discuss with Tesla board.”

Musk has historically awarded companies that help his other businesses with their equity. Musk previously said he would give investors in his $44 billion X acquisition a quarter ownership in xAI. Grok, xAI’s chatbot, is integrated into X, and the two companies share some resources.

“Tesla is learning quite a bit from xAI,” Musk said on a July conference call with investors after the company reported earnings. “It’s been actually helpful in advancing Full Self-Driving and in building up the new Tesla data center.” He also said there were opportunities to integrate xAI’s Grok chatbot into Tesla’s software.

In May, xAI raised $6 billion at a $24 billion valuation from investors including Sequoia Capital, Andreessen Horowitz, Valor Equity Partners, and Saudi Prince al-Waleed bin Talal and Kingdom Holding. This month, the company launched a new data center in Tennessee, dubbed Colossus, which Musk said is “ the most powerful AI training system in the world.”

Musk has also said Tesla would spend $10 billion in capital expenditures this year to build out its AI capabilities. “If somebody doesn’t believe Tesla is going to solve autonomy, I think they should not be an investor in the company,” Musk told investors on an April earnings call. It is unclear how the deal with xAI would affect Tesla’s spending.

Tesla has heavily invested in building out its data-center capabilities, including by developing special chips for a supercomputer it calls Dojo, with data centers in Palo Alto, Calif., and Austin, Texas, and plans for one in Buffalo, N.Y. Employees at xAI and Tesla have advised each other on the design and construction of their data centers, people familiar with the matter said.

Tesla’s sales and profits have taken a tumble amid increasing competition in the electric-vehicle market, with its stock down about 14% this year through Friday.

WSJ : China Is Becoming Much Harder for Western Scholars to Study

China Is Becoming Much Harder for Western Scholars to Study
Some researchers revert to Mao-era techniques as Beijing curtails access; suspicions in Washington threaten to exacerbate knowledge gap

SINGAPORE—While China asserts a more muscular influence on global affairs, Western experts face growing constraints in their efforts to study the emerging superpower.

Scholars researching everything from urban development to religious belief in China say they are running into barriers—many erected by Beijing but some arising at home—that increasingly hamper their work.

A relentless tightening of political controls by Chinese leader Xi Jinping has curtailed access to even routine information and throttled research into topics that were once open. Interactions between people in China and foreigners are subject to intensifying state surveillance, stymying the flow of ideas.

Those obstacles have led some China scholars to change their fields of study, or reprise research techniques developed during the Mao Zedong era, when the country was largely closed off to the rest of the world.

A sharp rise in anti-China sentiment in the U.S. and other Western countries is compounding the difficulties, according to many scholars. Some say they fear being denigrated for their association with China. Money is also getting harder to come by, with new data showing U.S. federal funding for China-focused research falling markedly in recent years.

Some academics worry that a decline in China studies will make it more difficult for the U.S. and other democracies to manage relations with one of the world’s most consequential nations, while Beijing continues building expertise on open societies in the West.

“We just don’t have the expertise on China that China has on us,” said Rory Truex, a politics scholar at Princeton University.

Concerns over data control and researchers’ safety have been sticking points in U.S.-China negotiations over the renewal of a landmark bilateral science and technology agreement that sets terms for academic cooperation. A short-term extension expired late last month, though a senior Biden administration official said the two countries remain in communication on the pact, including “strengthened provisions for transparency, and scientific data reciprocity.”

Allowing the agreement to lapse could make it even harder for U.S.-based scholars to do work in China, as they would no longer be able to count on either government’s commitment to facilitating access.

Conditions for Western scholars of China have deteriorated steadily since Xi took power in 2012, but worsened further during the Covid-19 pandemic. China’s border closures obliterated on-the-ground research by foreign academics, while many Chinese scholars couldn’t go abroad. Chinese universities also controlled cross-border conversations on videoconferencing platforms.

A growing number of foreign academics have returned to China since it reopened its borders in early 2023. But some say they have faced difficulties when entering or leaving the country, being held up for hours by immigration officials who grilled them about their research.

Other researchers say they are hesitant to visit at all because of security risks for them and any Chinese people they speak to. They cited China’s detentions of foreign nationals on alleged national-security grounds in recent years, as well as the disappearances of some Japan-based Chinese academics.

Several scholars who have returned to China report finding a bleaker landscape than before. Social scientists and historians, for instance, found it harder to conduct in-person interviews, archival research and other fieldwork that they traditionally rely on.

Ke Li, an associate professor at the City University of New York’s John Jay College who studies gender and legal issues, said on previous trips she was able to talk directly with local judges and sometimes slip inside courtrooms to observe trials. Now, she said, that has become virtually impossible.

Some Chinese researchers stopped sharing data with foreign counterparts to avoid violating data-security laws, complicating collaboration and peer-review processes for assessing research quality. The uncertainty over broadly worded data-security regulations “has brought anxiety and nervousness,” said a professor at a leading university in Beijing.

After interviewing more than a dozen China scholars in North America about their recent research experiences, the New York-based nonprofit American Council of Learned Societies reported last year that several had completely changed their areas of study because of the barriers they faced.

Emily Baum, a co-author of that report and an associate professor of Chinese history at University of California, Irvine, said she had planned to visit China in 2020 on a Fulbright grant to study how the traditional practice of fortunetelling evolved and remained popular. But she discarded those plans due to China’s Covid border controls, as well as increasing sensitivities around religion.

“I was not entirely confident that I would be able to find many materials anymore,” said Baum, who switched to researching the practice of acupuncture in the U.S.

Academic surveys have become more difficult to run in China. Fewer local survey firms are willing to work with foreign clients due to political sensitivities, said Reza Hasmath, a political scientist at the University of Alberta, who recently received quotes as high as $50,000 from Chinese vendors to run a survey that cost $10,000 or less a decade ago—a surge that could price out some researchers.

A rethinking of support for Chinese studies in Washington is compounding the difficulties.

The Trump administration halted funding of Fulbright academic-exchange programs to China, in response to Beijing’s curtailing of civil liberties in Hong Kong. The Justice Department’s defunct China Initiative, which targeted security threats from Beijing and resulted in a series of failed prosecutions of U.S.-based academics, also fueled concerns among scholars.

The number of China-related research projects funded by the U.S. National Science Foundation fell by more than half from the 2012-2017 period to the 2018-2023 period, with the declines most pronounced in social and economic sciences, according to a forthcoming working paper by Princeton’s Truex and his research partner. They also found that NSF grants supporting field research in China fell by nearly 75% over the same time periods.

It wasn’t clear whether the decline was due to a reluctance to support China-focused research, or to scholars choosing not to seek funding for China-related projects out of fear or inconvenience.

Some American universities have set new procedures for reviewing whether their faculty can accept flights, accommodation and speaking fees paid by Chinese hosts when attending conferences, or even barred them outright from receiving such perks, said Andrew Mertha, director of the China Studies Program at the Johns Hopkins University School of Advanced International Studies. “This is partly out of a legitimate fear of losing U.S. government research support.”

For students who plan to go into government service, “spending time in China has a direct negative effect on their ability to receive security clearance,” Mertha said.

The U.S. National Security Council didn’t respond to queries on such China-related scrutiny.

Heightened challenges in China studies are affecting scholarly output. Editors at several Western academic journals say they are seeing more submissions of studies that rely on data-driven quantitative analyses rather than ethnographic research.

The growing reliance on data is generating “research that sometimes isn’t necessarily interesting or important,” as academics work around whatever data sets they can access, said Timothy Hildebrandt, a London School of Economics associate professor and an editor of the China Quarterly, a prestigious U.K.-based academic journal.

Some researchers are looking to the past for workarounds. One approach is studying time periods before Communist rule. Another is dusting off Mao-era research techniques, such as textual analysis of party documents, state-media reports and other material.

“It is an ‘analog’ approach in an ever-digitalized world,” which requires an appreciation of nuance and subtlety honed through “endless immersion in often impossibly monotonous written sources,” said Mertha, the Johns Hopkins professor, who has organized workshops where Mao-era experts shared their methods with younger scholars.

Others are turning to modern technologies. Lauren Restrepo, an anthropologist who studies urban development in authoritarian states, said she likely isn’t able to return to China given the sensitivities around her research, which analyzes how Chinese authorities use urban planning to assert control over ethnic Uyghurs and other Muslim communities in the northwestern region of Xinjiang.

Restrepo, an assistant professor at Bryn Mawr College in Pennsylvania, now relies on “remote sensing”—reviewing sources such as satellite imagery, government documents, news and social media—to conduct research. “It is an act of desperation,” she said. “You just do what’s possible.”

Some scholars say they can still do useful fieldwork in China by stepping around sensitive topics and relying on local relationships, built over years or even decades. But the prognosis is grimmer for junior scholars and doctoral students, who have less experience and funding. A sharp decline in the number of American students in China during the pandemic and the lack of a significant post-Covid rebound have also raised concerns over the long-term pipeline of China expertise.

“We don’t know whether in ten years China will be America’s enemy, competitor, or perhaps even friend,” said Michael Szonyi, a Harvard University historian who traveled to China in August 2023 for an extended research trip after an almost four-year absence. “Do we really think that under any of these scenarios, it is better that we know less about China rather than more?”

NYT : Wall Street Is Worried About Carl Icahn

Wall Street Is Worried About Carl Icahn
The value of the 88-year-old activist investor’s company has fallen by nearly $20 billion. Mr. Icahn said that he was “absolutely not selling.”

Chief executives of public companies have long feared Carl C. Icahn. The 88-year-old investor made a name and billions for himself by questioning the decisions and strategies of corporate leaders and agitating for change at companies like Apple, RJR Nabisco and Netflix.

But now Mr. Icahn is under intense scrutiny from Wall Street investors, who are rapidly selling his company’s stock. In the past year and a half, shares of Icahn Enterprises, his publicly traded investment company, have dropped more than 75 percent, losing nearly $20 billion of value. After dropping more than 30 percent since mid-August alone, it now trades at $10.53 a share, its lowest level in more than two decades.

Mr. Icahn owns roughly 86 percent of the shares, so he has personally lost about $17 billion.

“There’s a confidence game and he’s lost the confidence of investors,” said Don Bilson, who focuses on activist investing as the head of event-driven research at Gordon Haskett Research Advisors.

Some Wall Street investors are now worried that the stock’s continuing fall could threaten the health of the entire company and that it could be forced to sell companies it holds. Icahn Enterprises holds a mix of public stocks, real estate and other investments, according to interviews with Mr. Bilson and several other market watchers.

Investors have been questioning whether Mr. Icahn himself has been selling his stock. He has taken out personal loans using his stock as collateral. Banks that offer these loans typically have strict requirements related to the value of a company. A sharp drop in a stock price could force a lender to sell shares.


In an interview this week, Mr. Icahn said that he was “absolutely not selling.” He also said there had not been any so-called margin calls on personal loans backed by his stock. Margin calls occur when a lender forces a borrower to sell stock to settle a loan. “I don’t foresee margin calls,” he said.

Shares in Mr. Icahn’s company started tumbling in May 2023 when Hindenburg Research, the short-selling firm run by Nate Anderson, published a report questioning Icahn Enterprises’ financials. Among other things, Hindenburg accused Icahn Enterprises of having a “Ponzi-like economic structure” and paying a dividend it couldn’t afford. (It has since cut its dividend.) He also questioned Mr. Icahn’s use of personal loans backed by the stock.

Mr. Anderson said in an interview this week that he expected Icahn Enterprises’ stock would still fall further. He continues to hold a short position, betting against the stock. He said Mr. Icahn’s extensive use of personal loans is still dangerous to the company’s future. “He’s got too much debt and needs cash. He’s really cornered himself,” he said. “There’s no safe exit.”

In April 2023, Icahn Enterprises stock traded around $50 to $55 a share.

But investors became increasingly skeptical of Mr. Icahn after the Hindenburg report was released, as evidenced by the sharp sell-off. The move out of the stock intensified after the firm cut its dividend in August that year.

The pressure mounted even further since last month, when the Securities and Exchange Commission charged Mr. Icahn with failing to disclose that he had personally pledged his own stock as collateral for margin loans worth billions of dollars. The settlement called for Mr. Icahn to pay $2 million in fines.

The stock has since continued to drop. Some investors said they are worried that Icahn may be forced to cut its quarterly dividend again.

Even with its rapid fall in share price, Icahn Enterprises still trades at a premium to its so-called net asset value, the value of a public company’s stakes, real estate and private company holdings, minus debt and liabilities. Many publicly traded investment firms trade at a discount to net asset value because of a presumption that certain stakes would lose value if the manager were forced to sell.

At Icahn Enterprises, Mr. Icahn holds the largest stake in certain public companies, and some have fared poorly. Shares of CVR Energy, a Texas-based oil refiner, for example, are down more than 30 percent in the past year, and Icahn Enterprises owns roughly 65 percent of the stock, one of Mr. Icahn’s largest holdings.

In the interview this week, Mr. Icahn said that Mr. Anderson’s statements on him and his firm are “what we consider to be compete and total lies and extremely misleading.”

>>> Barron’s Weekend Summary

Cover:
-The US nuclear power industry is experiencing a revival, with the government investing billions in the industry, tech luminaries like Bill Gates and OpenAI's Sam Altman backing new companies, and public support increasing. Constellation's stock price has risen 70% in the past year, indicating a rebound in the industry. Other publicly traded nuclear players, such as Canadian mining and nuclear-tech company Cameco, could also benefit as demand for uranium rises. The 94 nuclear reactors in the US generate 18.6% of the country's electricity, enough to power 72M homes. However, nuclear's share of total electricity generation has been declining for years, with a dozen reactors shutting down between 2012 and 2021. The Biden administration has announced a goal to triple the nation's nuclear capacity by 2050. The main reason for nuclear power's resurgence is the growing demand for electricity, particularly in areas like electric vehicles, artificial intelligence, and new factories

Interview:
-Chuck Royce, the founder of Royce Investment Partners, will become a senior advisor at the aforementioned firm end of September. Royce, a renowned small-cap investor, began hunting for small companies almost a decade before Russell Investments created its small-cap index. His $2B fund, now known as Royce Small-Cap, returned an average of 9% a year over the past decade, beating over three-quarters of its peers. However, the past decade has been rough for value managers and small-cap investors, as investors flocked to megacap technology stocks and paid little attention to other investments. The Russell 2000 slightly outperformed the S&P 500 over the period. Royce's recent conversation with Barron's highlighted changes in small-cap investing over his 50-plus years, the possibility of a market rotation, and the importance of management in a stock pick.

Tech Trader:
-Since the launch of ChatGPT in November 2022, Nvidia's stock has soared over six times, despite multiple short declines. The company has accounted for eight of the top 10 largest one-day market cap declines on record. As a high-growth semiconductor stock, massive market value moves are inevitable. Nvidia has also been responsible for five of the top 10 one-day market value gains, including the largest increase ever, a gain of $327B on July 31. Among the largest US companies, Nvidia stands out, with its 122% revenue growth rate in its latest quarter. Despite the drop, Nvidia remains the best-performing stock in the S&P 500 this year, up 107%, while Vistra, the No. 2 performer, is up 91%.

The Trader:
-The S&P 500 index closed the first three trading days of the month in the red, with concerns about the economy, semiconductors, and the looming presidential election affecting the market. Job openings reached 7.7M in July, a level that missed the 8.1M economists had forecast and marked a 3½-year low. Friday's jobs report did little to reassure investors, with the unemployment rate falling to 4.2% but the 140,000 increase in payrolls coming in below expectations. The mixed signals are likely to raise more questions than they answer regarding the health of the US labor market. Tech and semiconductors have turned into a source of consternation following Nvidia's post-earnings weakness and Broadcom's earnings, which delivered a better-than-expected fiscal third quarter but fell short of consensus estimates.
-Casey's General Stores reported fiscal first-quarter earnings of $4.83 a share, a 6% increase from the year-earlier period, reaching $4.1B. Analysts expected earnings of $4.50 a share on revenue of $4.15B. Same-store fuel gallons increased by 0.7%, while inside same-store sales climbed by 2.3%. However, Casey's will not provide an update for its full fiscal-year forecast until it completes the acquisition of Fikes Wholesale, which includes nearly 200 convenience stores. The company previously projected earnings before interest, taxes, depreciation, and amortization to grow by at least 8% and inside same-store sales growth of 3% to 5%. Casey's is at the center of a changing retail landscape that benefits big-chain convenience-store owners, as smaller operators are selling their locations to big players that can boost margins with fresh foods, loyalty programs, and other initiatives. Benchmark analyst John Lawrence has a Buy rating on Casey's shares, suggesting they should trade to $410, up 7.7% from Thursday's close.

Features:aal
-Starbucks' new CEO, Brian Niccol, is expected to bring significant experience to the company, as the former head of Chipotle Mexican Grill has a stellar resume in the restaurant industry. During his six years at Chipotle, Niccol led the company to success with strong store growth and unit economics, resulting in a stock surge of nearly 800%. Starbucks, facing weaker sales in recent quarters, is also facing operational, branding, and product development challenges. Starbucks has expressed confidence in Niccol, with analysts raising their target price for the stock after his appointment. TD Cowen analyst Andrew Charles has a target price of $110, while Lauren Silberman from Deutsche Bank has a $118 price target.
-Investors are enjoying the excitement of adding stocks to the S&P 500, with Palantir Technologies, Dell Technologies, and Erie Indemnity being added to the index. Palantir will replace American Airlines, Dell will replace Etsy, and Erie will replace Bio-Rad Laboratories in the S&P 500 before trading starts on September 23. The added stocks have seen a 7.8% gain in after-hours trading, while Dell has risen 6.2%. Erie, an insurer based in Erie, Pennsylvania, has advanced 3.1%. However, being removed from the index has an opposite impact, with American Airlines down just 0.7% in after-hours trading. The Research Affiliates Deletions ETF (NIXT) is set to begin trading on September 10 and includes companies that get dropped from large-cap indexes for five years. The sugar rush of the pop when a stock gets added is a favorite among investors.

European Trader:
-The European Union (EU) has introduced the Digital Services Act (DSA) and the AI Act to regulate online platforms. The DSA, which took effect for a dozen large online platforms a year ago, is being investigated by the European Commission for deceptive ads, visibility of political content, illegal content, and addictive design. The AI Act, which was recently introduced, is being scrutinized for its potential negative effects on civic discourse. The EU's plan is to become a global regulator by default, with 450M customers and an annual GDP of around $15T at stake. The DSA does not allow regulators to directly censor social media, and platforms must formalize guidelines and report on how they are moderating systemic risks.

Emerging Markets:
-No update

Commodities:
-OPEC and its allies are halting plans to increase oil production, causing crude prices to rise. This delay is a result of the agreement, which means the market is less concerned about oversupply heading into the fall. OPEC+, which includes OPEC allies like Russia, was set to resume 180,000 bpd in October, with a plan to add 2.2M barrels back into the market over the next year. Brent crude and West Texas Intermediate rose 1.3% and 1.4%, respectively. Analysts expect the oil market to be oversupplied next year due to slowing China's growth and higher production in other countries. OPEC+ has suspended over 5M barrels of production since 2022 to keep prices elevated, but is now facing the challenge of deciding when to bring those barrels back. Citi analyst Anthony Yuen warned that if OPEC+ does not provide reassurance that current output cuts would be extended more indefinitely, the market could lose faith in OPEC+ defending the $70 per barrel level.

Streetwise:
-The federal government is considering reclassifying marijuana as a Schedule 3 drug, a category with moderate to low potential for physical and psychological dependence. Currently, it is listed on Schedule 1 with heroin and other drugs. This has led to a decline in pot stocks, with AdvisorShares Pure US Cannabis losing 80% over three years. Change has consistently fallen short of expectations, with cannabis stock enthusiasm peaking in early 2021 following a Georgia runoff Senate election. Despite hopes for legalization, little progress has been made. State-approved cannabis companies cannot secure ordinary stock listings or operate across state lines, and they must pay taxes. Despite these taxes, special rules for Schedule 1 drug businesses disallow many ordinary business deductions, affecting businesses, especially retailers, with tax rates over 70%. Legalization critics argue that some states have made significant progress, leaving a small number of struggling, permitted shops among thriving, illicit ones.

The Information : Qualcomm Said to Consider Buying Intel’s PC Design Business

Qualcomm Said to Consider Buying Intel’s PC Design Business

Qualcomm has looked at parts of Intel’s chip design business as potential acquisition targets, according to Reuters. The division of Intel that designs chips for PCs was especially attractive, one source told the news agency.

Qualcomm has been mulling over the plans for months, said the report, but fresh signs of strain on Intel’s business may accelerate a sale. Intel last month said it would cut more than 15% of its staff after revenue fell and costs soared in the second quarter. Intel CEO Pat Gelsinger is expected to propose parts of the business for a potential sell-off later this month, Reuters previously reported.

Qualcomm, which develops wireless technologies, competes against Intel in the market for mobile and PC chips. In the past week, the two companies unveiled rival PC chips: Qualcomm announced the Snapdragon X Plus 8-core on Wednesday, a day after Intel debuted its Lunar Lake chips.

Reuters first reported the news.

CrunchBase : The Week’s 10 Biggest Funding Rounds: Safe Superintelligence Leads

The Week’s 10 Biggest Funding Rounds: Safe Superintelligence Leads With Massive $1B Raise

Investors seemed to be still hungover from the long holiday weekend, as big rounds rolled in slow for the week. Only three topped $100 million. However, the week did see a massive $1 billion raise for — what else? — an AI company.

1. Safe Superintelligence, $1B, artificial intelligence: AI research lab Safe Superintelligence raised $1 billion from a litany of big-name investors including Andreessen Horowitz and Sequoia Capital. The round valued the company at $5 billion, per Reuters, which first reported the round. SSI, co-founded by OpenAI‘s former chief scientist Ilya Sutskever, is looking to develop safe artificial intelligence systems — something that has been in the news a lot recently as fears increase of AI tech being harmful to humans and society. A proposed California bill that has proven controversial in the industry is looking to put safety regulations and guardrails on AI — although many companies, including OpenAI, worry it may be too burdensome to many AI firms. The 3-month-old startup will look to add computing power and hire new talent.

2. Arsenal Biosciences, $325M, biotech: The big biotech raise of the week went to South San Francisco-based Arsenal Biosciences. The startup, a cell therapy company focused on engineering T-cell therapies for solid tumors, locked up a $325 million Series C from several investors, including new investors Arch Venture Partners and funds and accounts advised by T. Rowe Price Associates. The company’s pipeline includes potential therapies for ovarian, kidney and prostate cancers, as well as other solid tumors. Founded in 2019, the company has raised nearly $631 million, per Crunchbase.

3. eGenesis, $191M, biotech: Cambridge, Massachusetts-based eGenesis, a biotech firm developing human-compatible engineered organs, closed a $191 million Series D led by Lux Capital. In March, eGenesis announced the world’s first successful transplant of a genetically engineered pig kidney to a human. The new cash will be used to advance a pipeline of programs. Founded in 2014, the company has raised $456 million, per Crunchbase.

4. Circle Pharma, $90M, biotech: South San Francisco-based Circle Pharma, a biotech company developing cell-permeable macrocycles for therapies, closed a $90 million Series D — which includes the conversion of a convertible note — led by The Column Group. Founded in 2012, the company has raised nearly $208 million, per Crunchbase.

5. 24M Technologies, $87M, battery: Battery products and manufacturing startup 24M closed an $87 million Series H preferred stock financing led by Nuovo Plus that values the company at $1.3 billion post-money. The Cambridge, Massachusetts-based company develops energy storage products and technology that looks to cut costs and improve performance safety and recyclability. Founded in 2010, 24M has raised more than $500 million, per the company.

6. OrsoBio, $67M, biotech: Menlo Park, California-based company OrsoBio, a biotech firm developing treatments for obesity and obesity-associated disorders, closed a $67 million Series B financing co-led by new investors Ascenta Capital and Woodline Partners. Founded in 2021, the company has raised $129 million, per Crunchbase.

7. Cortex Applications, $60M, productivity tools: San Francisco-based Cortex Applications, an internal portal for software developers, raised a $60 million round led by Scale Venture Partners that values the company at $470 million, per Bloomberg. Founded in 2019, the company has raised nearly $113 million, per Crunchbase.

8. Oyster, $59M, human resources: San Francisco–based Oyster, a human resource platform, closed a $59 million Series D led by Silver Lake Waterman that values the company at $1.2 billion. Founded in 2020, Oyster says it has raised $286 million.

9. Laravel, $57M, developer tools: Arkansas City, Arkansas-based Laravel, a web application framework that is used for web application development, raised a $57 million Series A led by Accel. Founded in 2011, this is the company’s first disclosed round, per Crunchbase.

10. Sonoma BioTherapeutics, $45M, biotech: South San Francisco-based Sonoma BioTherapeutics, a biotech firm developing therapies for autoimmune and inflammatory diseases, received a $45 million milestone payment from Regeneron Pharmaceuticals. Founded in 2020, the company has raised $410 million, per Crunchbase.

Big global deals
The biggest deal outside the U.S. came from Japan and involved AI.

  • Sakana AI locked up a $100 million round led by Khosla Ventures, Lux Capital and New Enterprise Associates. The round also included an investment from Nvidia — which has been intensely active in the AI space investing in startups. Sakana is looking to train low-cost generative AI models with small datasets — a very different approach from OpenAI. The company previously raised a $30 million round in January led by Lux Capital.

FT : How France embraced Telegram’s Pavel Durov — before turning on him

How France embraced Telegram’s Pavel Durov — before turning on him
Accustomed to mixing with the nation’s elite, the tech billionaire says he was surprised to be targeted by its legal system

Telegram chief executive Pavel Durov was accustomed to rubbing shoulders with France’s business and political elite during frequent visits to the country, where he bounced between Parisian palace hotels and the sun-soaked south.

But last month, the 39-year-old received a hostile welcome upon arriving on a private jet at Paris-Le Bourget airport. The Russia-born billionaire, who is now a French-Emirati citizen, was arrested and later placed under formal investigation over alleged complicity in criminal activity on his messaging app, from drug trafficking to the dissemination of child sexual abuse material.

Durov, who goes by the name “Du Rove” on his Telegram channel as well as his French passport, wrote on Thursday he was surprised to be personally targeted for “other people’s illegal use of Telegram”.

Banned from leaving France, his detention has sparked diplomatic uproar and a global debate over free speech against online safety. But the events also show how Durov had grown comfortable in France and failed to heed law enforcement concerns about Telegram.

“The French authorities had numerous ways to reach me to request assistance. As a French citizen, I was a frequent guest at the French consulate in Dubai,” Durov wrote, adding that he had recently helped French authorities establish a hotline with Telegram to deal with terrorism threats.

Prior to his arrest, Durov enjoyed a warm embrace by the French authorities, particularly after 2017, when a newly elected administration under Emmanuel Macron was keen to promote France as a destination for entrepreneurship and tech investment.

A year later, the French president met Durov at the Élysée Palace, according to a person with knowledge of the situation. In 2021, the country granted him French citizenship under a special emeritus status, adding to his collection of passports that include ones for the United Arab Emirates and Saint Kitts and Nevis.

Official France liked Telegram. Macron has had an active account since 2016 on which he posted as recently as mid-August. Much of his 2017 presidential campaign was run on its channels, according to two people involved. Once in power, Telegram was widely used in his administration, according to the people.

That changed last year when then-prime minister Élisabeth Borne issued a circular requiring members of the government to remove apps such as WhatsApp, Signal and Telegram from their phones in favour of a homegrown alternative over concerns about their security. Even so, the French interior ministry’s main communication channel with journalists remains on Telegram.

Macron has been left to defend the decision to grant Durov French citizenship. “It was taken in the context of a concerted strategy,” Macron said last month, pointing out that the same status was given to entrepreneurs such as Snap’s Evan Spiegel as well as professional athletes and actors.

“It’s a very good thing and I will continue to do it,” the president said, adding he was “absolutely unaware” of the investigation or Durov’s arrival in France.

Telegram, founded in 2013, eventually moved its base to Dubai. But its chief has spent the past decade also forging ties with eminent French figures.

This includes tech and telecoms mogul Xavier Niel, who helped broker introductions for Durov in France, according to two people with knowledge of the relationship. After his arrest, Durov first requested contact with Niel, according to AFP, though there is no indication as to whether the French entrepreneur was reached or responded.

People with knowledge of Durov’s visits to Paris said he would stay at the city’s famous hotels, including the Plaza Athénée, the Ritz and the Hôtel de Crillon. He was a guest at Russian oligarch Roman Abramovich’s palatial villa in Antibes before it was seized by the French government in 2022 following Russia’s full-scale invasion of Ukraine.

As well as mingling in the French start-up and venture capital scenes, he would also attend events with American investors and venture capitalists visiting France.

“I am a big admirer of French culture, art, design, architecture, cuisine, history and language,” Durov wrote on Telegram in 2018. “France is certain to play an even larger role in the world culture and economy in years to come.”

“Aside from the girlfriends and the hotels, where it’s clear he liked to indulge himself . . . he is not a show off,” said a person in France’s tech scene. “He is extremely focused on his company. A real entrepreneur.”

“He likes procreating,” said another person who has had dealings with Durov in Dubai, referring to the billionaire’s boast on Telegram that he had fathered “over 100 biological kids” through sperm donation. “Other than that I think he lives a kosher life.”

Durov has historically been wary of getting close to governments. Having launched VKontakte, Russia’s answer to Facebook, Durov has said he was forced to leave the company and Russia in 2014 after refusing demands from Moscow to share the data of Ukrainian opposition users.

Leaked travel records published by Russian language media and court documents from a separate criminal process in Switzerland indicate he has travelled in and out of his country of origin regularly in the years since.

Durov previously dismissed questions over links to the Kremlin as “conspiracy theories”.

The terms of Durov’s judicial monitoring in France could change. He is “banned from leaving the country [but] in time this obligation could disappear, either ordered by the investigating judge in charge of the case, or the investigating chamber”, said Jérôme Goudard, a criminal lawyer in Paris. “This could be done with regard to his professional situation: he is the CEO of a multinational company, on top of the diplomatic issues.”

“We are prepared to leave markets that aren’t compatible with our principles,” Durov wrote on Thursday. He, however, remains stuck in France.

“All the big tech people know Pavel, but they will all say that they know him very little,” said the person in the French tech scene. “I had the impression he was a person who was very alone.”