Macro & Me

Top News

• Macro moves: Today, China and the United States found a way to lower trade tariffs, leading to dramatically smaller trade barriers to the tune of 30% import taxes on Chinese exports to the United States, and 10% the other way around. Still high, but so much lower than the three-figure rates that had been in place that markets rallied. The good news is that stocks are up, potentially boosting the chances that we get back into an IPO cadence — and help VCs turn paper gains into cash returns. The bad news is that, without towering tariffs on China, the American central bank is now less likely to cut rates. So, higher rates and higher stocks? Worth it.

• Say hello to Humain: What happens if you take the word “human” and slam the word “AI” into it? Yes, you get Humain, the new state AI firm, this time from Saudi Arabia. Recall that G42 was born out of Emirati fiat, so to see the Saudi premier announce his own firm is not shocking. Details are a little vague, but expect to see data centers and Arabic-language AI models emerge from the effort. If you were going to build new data centers, you want cheap power to do so. Nuclear is good. Hydroelectric is great. Solar is also more than possible, so long as you have requisite storage. And Saudi Arabia is famous for being, well, hot.

• Copyright heads are rolling: Over the weekend, the current Presidential administration fired Shira Perlmutter, whom the AP calls “the nation’s top copyright official.” Why the move? Copyright boffins in the government had the temerity to argue that while some use of copyright-protected material in AI training is likely legal under fair use rules, not every instance is above-board (Alex notes here). As a number of well-known AI model companies are Trump boosters, it’s unlikely that they enjoyed hearing that training off stolen materials isn’t legally protected. We’re connecting dots here, but given how recently the report in question came out, you can run the odds yourself.

TWiST500

Something that’s nice about having 330+ companies on the TWiST500 today is that there’s always news from the cohort. The bad news is that there’s often a bit more than we can get to in a single newsletter. So, apologies Sakana AI, we don’t have the space today to dig into your latest work on Continuous Thought Machines that use “neuron-level processing and synchronization” to “effectively reintroduce neural timing as a foundational element.”

Instead, Perplexity. Yes, the AI search engine that folks seem to love. Recall that the company crested the $100 million ARR threshold about a month ago. Now? It’s raising another $500 million at a valuation that could stretch to $14 billion.

That’s a neat $5 billion more than the company was valued at last November, when it raised $500 million at a $9 billion valuation.

On one hand, raising at a 140x ARR multiple is bonkers and no one should do it. On the other hand, Perplexity grew more than 6x in the year preceding its year. So, you could argue that the company will quickly grow into its lofty price because it’s simply accreting revenue as quickly as it is.

I asked Jason on the show today why Perplexity would raise another $500 million, and the short answer is that it can, at limited discount, and can thus accelerate its efforts even more; in a land-grab, you don’t want to have short reach. Fair enough. Perplexity also got a nod from Apple the other day, which we presume bolstered its fundraising efforts.

Accel is purportedly leading. Here’s hoping that Perplexity’s we’re going to go public upcoming valuation refresh is paired with another year of 6x growth. — Alex

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This Week in Startups

E2123: On Friday’s TWiST, Jason, Alex and Lon debate why Instacart CEO Fidji Simo left that job to join the team at OpenAI: was it just the money, or a chance to do something more COMPELLING than helping people order groceries? Plus, everyone’s thoughts on the US justice system’s first-ever AI-generated victim statement, Jason urges viewers to read “The Checklist Manifesto,” and a chat with Where2Wheel founder Brittany Peregoff about her off-roading marketplace and the economic promise of agritourism.

E2122: It’s yet another overstuffed TWiST full of the tech news and founder insights you CRAVE. Jason, Alex, and Lon are talking about Zoox’s robotaxi recall (and why it’s not as bad as it sounds!), Coatue’s innovative new take on venture funds, NSO’s mega-fine for making spyware, and terrifying AI prophecies from the future. Plus Evan from FusionAds stops by to talk about automating marketing for your small business AND the Final Four of our Founder Friday tournament is now a FINAL FIVE!

E2121: On a Monday TWiST, Jason, Lon and Alex welcome Magical Toys chief Fateen Anam Raffid to talk about building next-generation AI toys and his company’s mega-growth ahead of the holiday season. PLUS the latest on Cursor’s explosive growth and massive $9B valuation, Uber’s latest autonomous vehicle partnerships, and Jason shares some anecdotes from F1 in Miami.

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