OpenAI raises $40B, xAI buys X for $33B

21WHAT’S INSIDE

• Tech In The News: "Liberation Day", Credit fears, Tariffs, Apple v Starlink

• Companies to watch: OpenAI, Earth AI, Extropic, Softmax, Temporal

• Feature: OpenAI raises $40B, xAI buys X for $33B

• Buzzy Tools: Latest Buzzy tech, AI and financial tools

• Deep Tech: The latest in deep tech, biotech, futurism and more

• Space Tech: Latest news in the space race and aerospace tech

• Crypto: Blockchain and crypto policy and startups or protocols to watch

TECH IN THE NEWS

Markets on Edge — Global stock markets faced volatility ahead of "Liberation Day". The S&P 500 rose 0.6% despite losses. Goldman Sachs warns of a 35% recession risk.

Credit Anxiety Peaks — The US credit fear gauge hits its highest since August after-PCE data rose 2.5% YoY, signaling increased market anxiety over inflation and ongoing economic conditions.

Tariffs Tighten — President Trump pushes for more aggressive tariffs with a proposed universal duty to reshape the U.S. economy and enhance reciprocal trade measures.

Satellite Showdown — Apple clashes with SpaceX over satellite expansion to eliminate cellphone dead spots. Apple aims to boost satellite investments, facing opposition from SpaceX in a crucial connectivity battle.

Beijing Bank Boost — China's top four state-owned banks aim to raise $72 billion through government-backed share sales to enhance lending capacity and support the struggling property sector.

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COMPANIES TO WATCH

OpenAI — The foundational AI company closed a $40B round led by SoftBank, at $300B (nearly double its previous valuation).

Earth AI — The US/Aus AI-driven mineral exploration company identified six promising new prospects for tungsten, cobalt, and gold. Drilling starts by May 2025.

Extropic — California startup targets Nvidia's AI chip market dominance with a radical new “Thermodynamic” chip building methods 4x more efficient than current methods.

Softmax — A stealth startup by Twitch founder Emmett Shear taking a uniquely “biological” approach to AI emerged with backing from a16z and Lionheart Ventures.

Temporal — The Seattle-based microservices platform raised $146M to boost agentic AI capabilities, at $1.72B post-money. The funds will enhance R&D and sales, supporting its substantial revenue growth despite a recent slowdown.

Isomorphic Labs — Specializes in A.I.-driven drug discovery and just aised $600M from Thrive Capital to solve diseases with A.I. breakthroughs like AlphaFold.

See our full list of the companies to watch for last week here

THE HOTTEST THING IN TECH
OpenAI raises $40B, xAI buys X for $33B

OpenAI, Elon Musk’s xAI, and Google are escalating their billion-dollar investments into a battle for AI dominance, even as global markets falter under Trump's tariff threats and mounting credit concerns. OpenAI just raised $40B at an unprecedented $300B valuation—making it the largest private equity investment on record. Not to be outdone, Elon's xAI just acquired X (formerly Twitter) in an all-stock transaction valued at $33B. Meanwhile, the internet is melting down over OpenAI's new image generator, Kling's video tools, and the enhanced potential for deepfakes.

The New AI Arms Race

OpenAI continues its explosive trajectory, announcing the raise and that it is adding a staggering one million users per hour. It also announced a major shift toward releasing an open-source AI model, a critical strategic pivot responding to intense pressure from rivals like Meta and China's DeepSeek. The model would allow developers to run it on their own hardware, departing from OpenAI’s cloud-based subscription approach that has driven its revenue. This shift poses questions about how OpenAI plans to maintain its competitive advantage against xAI, and Google.

Elon Musk’s xAI acquiring X is a significant step towards creating an "everything app" ecosystem with X’s data. Integrating AI-driven analytics, payments, and identity verification into one unified platform offers tremendous commercial potential for fintech and venture capital, as well as other areas including blockchain.

Google, meanwhile, launched Gemini 2.5 Pro to free users. Its enhancements, integrated deeply within Google's expansive Cloud and Workspace environments, present immediate enterprise implications. Companies can expect powerful new tools for data analytics, market forecasting, and productivity improvements.

Tariffs and Global Economic Uncertainty

The AI industry's rapid ascent occurs despite significant global turbulence and uncertainty. Markets worldwide stumbled dramatically in anticipation of President Trump’s April 2 "Liberation Day," marked by reciprocal tariffs against virtually all trading partners. Trump has expressed openness to negotiations, yet investors fear prolonged uncertainty could exacerbate inflationary pressures, disrupt supply chains, and hinder global growth. Goldman Sachs is now predicting a 35% chance of recession with others putting it much higher.

Recent data also revealed a surge in U.S. credit risk—the highest since mid-2024 as a result of the Fed's latest PCE data which rose 2.5% YoY—amplifying these recession anxieties.

Private equity firms now hold an unprecedented $3.6 trillion of value trapped in nearly 29,000 unsold portfolio companies, indicating liquidity pressures could intensify if economic conditions worsen. This signals an urgent need to reassess risk exposure and prepare for potential market contractions. Someone tell that to Softbank.

The Rising Threat of AI-Generated Fraud

Parallel to AI’s innovation surge, the fear of generative fraud is escalating dramatically following OpenAI releasing its image tool and removing content restrictions. Alongside convincing Studio Ghibli-style images, platforms like OpenAI, and Kling videos can now easily create convincing deepfake images, videos, and documents. Concerns are growing over this technology enabling sophisticated insurance scams, financial fraud, and false real estate claims. This rising threat complicates compliance and verification processes across sectors, particularly finance and VC-backed startups.

Big Tech Solutions

OpenAI founder Sam Altman's World Network startup—a blockchain-based biometric identity solution—represents its approach to addressing this problem it helped to create. Similarly, xAI’s integration plans for X include comprehensive identity verification, crucial for eliminating bot-driven fraud and scams. Google's approach, although less blockchain-centric, emphasizes secure cloud infrastructure and real-time detection of fraudulent activity, presenting a more conventional but scalable alternative. Google has been trialing AI watermarking of images, but this has proven easy for hackers (aided by AI) to circumvent so far.

Summary

As OpenAI, xAI, and Google battle fiercely for AI supremacy, we face global economic uncertainties, and the potential breakdown of the fact-based fabric of the internet. All this points to a need for strategic planning and risk management. It’s easy to get caught up in the hype with billions of dollars flowing into the field, but it’s also wise to take it with a grain of salt. It's also wise for citizens and companies alike to seriously assess their fraud-related risks in this new world, and make a plan for how they are using AI or other methods to minimize it.

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BUZZY TOOLS

Buzzy Tech Tools To Watch & Use

Lenses — Interprets sensor data into insights, enhancing custom decision-making.

PwC — AI OS streamlines enterprise AI workflows for enhanced Agentic AI.

Apple — Launching iOS 19 with health app and AI doctor service, plus M5 iPad Pro.

Intelligent Internet — O-S II-Researcher AI Research Agent beats Perplexity, Grok.

Chime — Offers 3.75% APY for direct deposit users, enhancing the app ahead of IPO.

Amazon Alexa Plus — Early access AI for Echo; lacks some features.

BUZZY TECH

The Latest Deep Technology & Trends To Watch

EHang Autonomous Drones — China approves autonomous Air Taxis to operate.

Airbus ZEROe — New hydrogen aircraft design set for late 2030s launch.

B61-13 Nuclear Warhead — 24x Hiroshima-power variable-yield US warhead.

Berkeley Bumblebee — World's smallest battery-free flying robot for monitoring.

China Offshore Oil Discovery — 110 million tons found in deep offshore water.

CRYPTO WATCH

U.S. Dollar Under Threat — Larry Fink warns of the U.S. dollar's reserve currency status risk due to increasing national debt and competition from digital assets like Bitcoin. Tokenization and blockchain could revolutionize investing.

Musk on Dogecoin — Elon Musk clarified that the U.S. government won't use Dogecoin, causing a 3.2% price drop. He noted the DOGE department's name is unrelated to the memecoin.

Hut 8's New Venture — Hut 8 partners with a Trump-backed firm to establish a new American Bitcoin mining company. The collaboration aims to strengthen US crypto mining capacity amid regulatory changes and increased market competition.

Circle's IPO Ambitions — USDC issuer Circle aims to go public with JP Morgan Chase and Citi's help, planning an IPO filing in April. This follows previous attempts by the second largest stablecoin issuer in 2021 and 2024.

World Liberty Takeover — How the Trump family came to control World Liberty Financial, securing 75% of token sale revenues and raising over $550M.

SPACE_RACE

—SpaceX Starship_FAA concludes Flight 7 explosion caused by vibrations; 11 fixes.

—Blue Origin_New Glenn landing failure traced to engine restart; eye spring launch.

—SpaceX Fram2_First polar orbit crew mission to study mushroom cultivation.

—Isar Aerospace_Spectrum rocket's European debut ends in crash, data gathered.

—Space Force_Developing orbital carriers for rapid space vehicle deployment.

MEMETICS

Elon buys his own company off himself. So Elon.

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