OpenAI CTO Mira Murati Steps Down & OpenAI To Remove Non-profit Control and Give Sam Altman Equity

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☕Hey there, Welcome to today's quick rundown in the Venture Daily Digest Newsletter. We've got the scoop on startup fundraising, VC funds, and some cool tech – all in just 5 minutes!

Top News

Three top OpenAI executives, including CTO Mira Murati, resigned amid ongoing restructuring and a potential $6.5 billion funding round. The company plans to shift to a for-profit benefit corporation, giving CEO Sam Altman an equity stake. These departures follow earlier leadership changes and come as OpenAI negotiates a new valuation of $150 billion.

OpenAI plans to restructure into a for-profit benefit corporation, reducing non-profit board control to make it more investor-friendly. CEO Sam Altman will receive equity, and the company's valuation could reach $150 billion. This move raises questions about AI safety governance and reflects significant changes in OpenAI's leadership and structure.

Other Major News

• Google paid $2.7B to rehire AI genius who left after company refused to release his bot (Scroll To Startups & People Updates)

• Hacker plants false memories in ChatGPT to steal user data (Scroll To Tech Updates)

• Alphabet, Goldman Sachs, Bank of Nova Scotia, and other firms agreed to pay a total of $3.8 million in penalties for late SEC filings (Scroll To Tech Updates)

• Jeff Bezos' Heuristic for Hiring (Scroll To Featured Article)

• VC & Startups Job Opportunities (Scroll To Today’s Opportunities)

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🗞️ Startup Funding Updates

Mediwhale, a Seoul, South Korea-based AI-powered health diagnostics company, raised $12m in Series A2 funding. The financing round was led by Korea Development Bank (KDB), with participation from Woori Venture Partners, IMM Investment, Mirae Asset Securities, and other investors.

Arcade, a San Francisco, CA-based AI product creation platform provider, raised $17M in total funding. The rounds include: a first investment of $5m, co-led by Reid Hoffman and Brit Morin of Offline Ventures with Heretic Ventures participating, and an additional investment of $5m led by Ashton Kutcher of Sound Ventures.

Blocks.app, an Ottawa, Ontario, Canada-based provider of an AI-powered platform designed to eliminate tedious busywork for investment teams, raised US$1.5M in Seed funding. The round was led by Storytime Capital and Mistral Ventures, with participation from the MaRS Investment Accelerator Fund and prominent angel investors, including Sébastien Marineau, VP at Apple, Scott Roberts, VP at LinkedIn, and Jeff Bonforte, former CEO of Grindr.

ShipTop, a Vancouver, BC-based eCommerce logistics platform provider, raised $500K in Seed funding. The round was led by Dino Verbrugge and Jared Vegosen, co-founders of DV Trading Company, a Chicago-based proprietary trading firm.

Apron, a London, UK-based business payments company, raised a $30m Series B funding round. The round was led by Zinal Growth, with participation from existing investors Index Ventures, and Bessemer Venture Partners, Visionaries Club, alongside investor Tony Fadell, inventor of the iPod and Principal at Build Collective.

OxeFit, a Plano, TX-based leader in AI-driven health and fitness experiences, raised $17.5M in funding, bringing the total to over $70M, to date. Backers included Dave Asprey and Anne Mahlum who joined notable investors including soccer legend Harry Kane, pro golfer Dustin Johnson and NFL quarterback Dak Prescott.

hlpy, a Milan, Italy-based company which specializes in full digital services for mobility and vehicle assistance, raised €18M in funding. The round was led by Nextalia SGR through the Nextalia Venture fund and the current partner Sinergia Venture Fund of Alkemia Capital SGR, with participation from The Techshop SGR, CDP Venture Capital – fondo Corporate Partners I, ServiceTech, and Simest.

Ujet, a San Francisco, CA-based provider of AI-powered cloud contact center solutions, closed its latest round which brought the total raised in Series D funding to $76M. Its latest round was led by Sapphire Ventures, with participation from new investors KeyCorp and IonPacific, and existing investors GV, Kleiner Perkins, Citi Ventures, DCM, and Ericsson Ventures.

Cyclic Materials, a Toronto, Canada-based recycling company creating a circular supply chain for rare earth elements (REEs) and other critical materials, raised USD $53M in Series B Funding. The round was led by ArcTern Ventures and supported by new investors BDC Capital’s Climate Tech Fund, Hitachi Ventures, Zero Infinity Partners, Climate Investment, and Microsoft’s Climate Innovation Fund.

Genespire, a Milan, Italy-based biotechnology company developing gene therapies for pediatric patients affected by genetic diseases, raised €46.6M in Series B funding. The round was led by Sofinnova Partners, XGEN Venture and CDP Venture Capital through its Large Venture Fund.

Outgo, a Seattle, WA-based freight payments platform provider, raised $15M in funding. The round was led by Gradient Ventures, Construct Capital, with participation from Neo, PSL Ventures, Bezos Expeditions, Fintech Fund, Operator Stack and Upper90. Additionally, the company has secured a $50M credit facility raised from Upper90 for receivables purchasing.

ReSync Bio, a San Francisco, CA-based scientific software provider accelerating preclinical R&D, raised an undisclosed amount in funding. Backers included Caffeinated Capital, Atria Ventures and angel investors including Ramsey Homsany, co-founder of Octant Bio.

Koios, a Herzliya, Israel-based company which specializes in financial intelligence solutions, raised $5M in Seed funding. Backers included undisclosed family offices and private investors.

Bluebricks, a Tel Aviv, Israel-based provider of a cloud management platform, raised $4.5M in Seed funding. The round was led by Flint Capital and Glilot Capital Partners, and included investors such as Yochay Ettun, CEO of cnvrg.io (acquired by Intel), and Raz Shaked, Head of DevOps at Wiz.

Helaina, a NYC-based biotechnology company developing human equivalent bioactive proteins, raised $45M in Series B funding. The round, which brought the total amount to $83M, was led by Avidity Partners, with additional investment from Spark Capital, Ingeborg Investments, Tom Williams of Heron Rock, Barrel Ventures, Siam Capital, Relish Works, CF Private Equity and Primary Venture Partners, among other strategic partners.

Feno, a Los Angeles, CA-based healthtech company which specialiaes in at-home oral health technology, raised $6M in Seed funding. The round was led by BOLD Capital Partners, True Ventures, Upfront Ventures, and Share Ventures.

Whatfix, a San Jose, CA-based global digital adoption platform, secured $125M in Series E funding. The round was led by Warburg Pincus with participation from existing investor SoftBank Vision Fund 2.

Zing Health, a Chicago, IL-based Medicare Advantage insurer, raised an incremental $140m in funding. Backers included Health 2047 Capital Partners, CRG, and First Trust Capital Partners, and existing investors Newlight Partners, Town Hall Ventures, Health 2047, and Leavitt Equity Partners.

Crisp, a NYC-based provider of a retail data platform for granular sales and supply chain intelligence, closed a $72M Series B equity funding round. The round included $17M from new strategic investors including Wellington Management, Toshiba Corporation, DNX, Cox, and Prologis. This brings the total equity raised by Crisp to $97M since inception.

Dotfile, a Paris, France-based RegTech company, raised €6M in funding. The round was led by Seaya Ventures, with the participation of existing investors Serena and Hexa.

Tamnoon, a Seattle, WA-based company which specializes in managed cloud security remediation, raised $12M in Series A funding. The round, which brought the total amount to $18M, was led by Bright Pixel Capital (formerly Sonae IM), with participation from new investors Blu Ventures, and Mindset Ventures and existing investors Merlin Ventures, Secret Chord Ventures, Inner Loop Capital, and Elron Ventures.

EGYM, a Munich, Germany-based fitness technology and corporate wellness company, raised approx. $200M in Growth funding. The round was led by L Catterton and Meritech Capital.

Infact, a London, UK-based challenger credit reference agency, raised £4M in Seed funding. The round was led by AlbionVC, with participation from 13books Capital, Outward VC, Form Ventures, and Portfolio Ventures.

Findable, an Oslo, Norway-based startup that automates building documentation using AI, raised €9M in Series A funding. The round was led by Point Nine, with participation from KOMPAS VC, Construct Venture, and Lake Eight.

Brisk Teaching, a San Francisco, CA-based AI-powered Chrome extension for educators, schools, and districts, raised $5M in Seed funding. The round, which brought the total amount to $6.9M, was led by Owl Ventures, with participation from South Park Commons, Springbank Collective, Coherence Fund, and Coalition Operators.

📰 Venture Capital Updates

Hone Capital, a Palo Alto-based VC firm backed by China’s CSC Group, is under FBI investigation over potential ties to the Chinese government and data sharing with Beijing. The firm, which has invested in over 360 U.S. startups like AngelList and Stripe, is also involved in a legal dispute with two former executives. Hone and CSC deny any wrongdoing amid ongoing U.S.-China tensions.

📌 Featured Article

Jeff Bezos' Heuristic for Hiring

Jeff Bezos says he hires people only if they pass 3 separate bars:

1. Can the person do exceptional things?

2. Does he admire them?

3. Will the person raise the effectiveness of the team?

You can get answers to all three of these questions in a single, 30-minute interview if you ask the right questions.

I would highly recommend reading - Smart Management by Jochen Reb to learn more about it.

[Check out our Venture Curator newsletter - to get insights on startups, AI and venture capital from leading founders & investors]

📑 Startup’s Latest Buzz

Acquisition & Going Public

Dotmatics, a Boston, MA-based company which specializesin R&D scientific software connecting science, data, and decision-making, acquired Virscidian, a Raleigh, NC-based specialized provider of analytical chemistry solutions and automated chromatography and mass spectrometry data processing.

Layoffs & Bankruptcy

Northvolt, a European battery startup, has halted factory expansion plans and laid off 1,600 employees due to lower-than-expected EV demand and execution challenges. Despite raising $14 billion, the company faces significant hurdles in competing with established Asian battery manufacturers and navigating the uncertain landscape of automaker commitments to EVs.

Startups & People

Google paid $2.7 billion to license technology from Character.AI and rehire Noam Shazeer, an AI genius who left Google in 2021. Shazeer and colleague Daniel De Freitas founded Character.AI after Google refused to release their chatbot. The deal brings Shazeer back to lead Google's next-gen AI model development. This move highlights the fierce competition for top AI talent in Silicon Valley.

🤖 Latest In Tech

Security researcher Johann Rehberger found a flaw in ChatGPT's long-term memory settings that allowed attackers to store false information and malicious instructions, which OpenAI initially did not consider a security concern. Rehberger created a proof-of-concept exploit that exfiltrated all user input perpetually by storing false memories using indirect prompt injections from untrusted sources like Google Drive or OneDrive, prompting OpenAI to issue a partial fix. Though OpenAI's fixes prevent memory abuse for data exfiltration, prompt injections from untrusted content can still plant long-term false memories, making it crucial for users to monitor and review stored memories regularly to prevent attacks.

Blackstone confirms a £10 billion investment for an AI data center in northeast England, creating 4,000 jobs. The project will be built on a site in Blyth, Northumberland, previously intended for a battery factory. Blackstone will also contribute £110 million to a local fund for skills training and infrastructure improvements.

Alphabet, Goldman Sachs, Bank of Nova Scotia, and other firms agreed to pay a total of $3.8 million in penalties for late SEC filings on ownership changes and insider stock sales. Alphabet will pay $750,000, Goldman $300,000, and Bank of Nova Scotia $375,000. The firms did not admit or deny the findings but agreed to cease further violations.

Google has filed an antitrust complaint with the European Commission, accusing Microsoft of using unfair cloud licensing terms to stifle competition and lock in clients. Google claims Microsoft’s licensing restrictions force businesses to stay on Azure, making it harder to switch to competitors' clouds. Microsoft denies harming competition, citing its recent settlement with European cloud providers.

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