January 8, 2025

Models square up

Hi there,

Anthropic is eyeing a $2B raise at a $60B valuation per WSJ (link in Industry Standard below). 

That would make it the #5 most valuable US startup, behind other AI companies like OpenAI ($157B valuation) and Databricks ($62B).

The LLM developer landscape is quickly dividing into the haves and have nots in terms of funding, valuations, and revenue.

Within the private markets, OpenAI, Anthropic, and xAI have run away with the investment dollars to LLM developers. This has resulted in smaller developers trying different strategies:

• Collapse into big tech: Adept, Inflection, and Character.AI have all essentially been “acqui-hired” by big tech companies.
• Paywall frontier models: Some open-source AI developers like Mistral are selling access to premium models to drive revenue while keeping basic versions free.
• Focus on smaller models: Developers like Aleph Alpha and AI21 Labs shifted in 2024 from competing on general-purpose LLMs to building lighter-weight, optimized models and related AI tools. 

We dive into the future of the foundation model landscape, with a focus on the closed-source vs. open-source divide, in this just-published report. 

Meeting the political zeitgeist

Zuck appointing Dana White to the Meta board is a 4D chess move.

Combined with his comments yesterday on censorship and free speech, this is a guy playing the game of business very well given the impending Trump presidency. 

#foundermode 

More tech drama in yesterday’s newsletter. 

Note: If you disagree with some element of what is written above, you are right.

Source: Meta 

Spoonful of AI

90% of drugs fail in clinical trials — but AI could change the game for pharma companies.

AI is boosting the efficiency of preclinical drug development, leading to a greater likelihood of success in later stages (e.g., clinical trials).

Within preclinical AI, formulation and tablet development is gaining steam, securing nearly half of the top 10 deals (and the majority of funding) since 2023. 

These companies are targeting a major industry pain point: optimizing delivery systems for complex biologics and poorly soluble drugs.

How else is AI transforming preclinical drug development? Learn more in this brief.

Early birds

AI agents and copilots are reshaping how work gets done in industrial settings, handling everything from routine tasks to complex operations.

Early-stage startups are leading the charge, capturing 3 out of 4 deals to the space.

From manufacturing to defense, check out the burgeoning industrial AI agent and copilot landscape in this market map.

CBI customers can unlock the full map here.

Industry Standard

The Wall Street Journal. Berber Jin (@berber_jin1) reports on Anthropic’s potential $60B valuation, citing CB Insights data. 

Fast Company. Chris Stokel-Walker (@stokel) covers key tech trends for 2025, referencing CB Insights research.

Bloomberg. Emily Mason (@emilymason00) examines the mixed regulatory landscape for fintechs, using CB Insights research. 

I love you.

Anand

@asanwal 

Co-Founder & Exec Chair

P.S. After learning what happened in venture in 2024, find out what’s coming in 2025. Join our analysts tomorrow for a live briefing.

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