Top News
WSJ: OpenAI IPO coming “very soon”: It’s no secret that the ChatGPT maker is circling a public offering. They’ve had Goldman and Morgan Stanley staffers laying the groundwork for months now. Today, The Wall Street Journal reports that an actual IPO could arrive within weeks or even mere days. (Of course, they caution that plans remain “fluid” and could “still change.”) The company recently dodged a major, high-profile lawsuit from co-founder Elon Musk regarding their switch from non-profit to for-profit status. A 9-person Oakland jury ruled that Musk had not filed his suit prior to the expiration of the statute of limitations. He reportedly plans to appeal this verdict. Also this week, Altman held a fireside chat with Stripe co-founder Patrick Collison at the Stripe Sessions event. He apparently sees OpenAI’s future as an “intelligence meter,” selling compute services to companies that are building on top of the LLM layer.
Exa Labs raises $250M: The AI lab is building what they call the “perfect search engine,” optimized for AI tasks rather than upgraded from an old-fashioned browsing-first product (aka Google). Basically, it’s search results via API, accessible by your agent, with an eye toward not just quality, but latency and customization. Co-founder and CEO William Byrk suggests that the time to change approaches is now; he predicts agents will use search engines more than humans for the first time in 2026. Big name customers include AI giants like Cursor and Lovable. Bloomberg reports that Exa raised $250 million at a $2.2 billion valuation, led by Andreessen Horowitz. That’s triple their value since the last raise, which was just in September.
Stability releases fresh audio models: Model makers Stability AI are best known for their text-to-image Stable Diffusion product, but they’ve been working on a variety of different kinds of diffusion-based engines this whole time. Their latest release, the Stability Audio 3.0 family of models, generates “professional-grade music.” Some of these fresh models, capable of producing 2 minutes or so of consistent tunes, are small enough to operate on a personal computing device. Larger versions running in data centers can generate more than 6 minutes of music from one prompt. (That’s double the length of the previous Stable Audio 2.0 release.) In an effort to dodge some of the legal troubles that have plagued music-generating rivals like Suno and Udio, Stability previously signed deals with Warner Music Group and Universal Music Group, allowing them to train and develop their tools without violating copyright law. They claim the latest releases were trained exclusively on fully licensed data.
TWiST 500
Fintech favorite Mercury CEO and co-founder Immad Akhund was our guest on Wednesday’s big TWiST show, and not to toot our collective horns, but the timing could not have been better.
The company — which is currently transitioning, regulation-wise, from a fintech app to a full-fledged bank — just announced a new $200 million Series D round at a $5.2 billion valuation. That’s a 49% jump from their last round, just 14 short months ago.
Mercury’s been experiencing some notably rapid growth. They count more than 300,000 customers at present, have been profitable for the past four years, and officially hit $650 million in annualized revenue this year. Full approval for banking services — allowing them to offer Zelle transactions, expand their lending programs, and create a their own in-house payment infrastructure — could power even more exponential growth, if all goes well.
Mercury still has work ahead. They need to prove they can satisfy the requirements of the OCC (The Office of the Comptroller of Currency, which is part of the US Treasury Dept). Plus they’ll need to get approval from the FDIC for deposit insurance and approval from the Federal Reserve. We’ll keep you posted on further developments. – Lon
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This Week in Startups
E2290: Multiple 2026 commencement addresses have been interrupted by a chorus of boos when the speakers raised the topic of AI innovation. Why are America’s students SO NEGATIVE about the prospect of working with AI tools, and is it too late to turn things around. Jason and Alex discuss the growing backlash to datacenters, AI apps, and technology more generally among mainstream Americans, why it’s happening, and whether it’s still fixable. PLUS thoughts on how OpenAI and Anthropic gained such massive dominance in terms of actual AI-related revenue, and the growing visibility of Flock Safety’s surveillance network.
E2289: Self-driving just stopped being a science problem and became an engineering challenge instead. That's the through-line of today’s double-header with the CEOs of two of the most important AV companies in the world — Wayve's Alex Kendall and Waabi's Raquel Urtasun. Between them: ~$2B raised in the last six months, Uber as a partner, Nissan and Volvo as OEMs, and a shared bet that end-to-end AI plus world models beats Waymo's city-by-city map-and-pray approach. If you want to understand the state of the self-driving industry beyond recent Waymo announcements, this is the episode for you.
E2288: Anthropic just declared every unauthorized secondary sale of its stock "void" — naming Hiive, Forge, Sydecar, Upmarket, and others in a public hit list. Jason and Alex sit down with Jenny Fielding (Everywhere Ventures), Dave McClure (Practical VC), and Sam Lessin (Slow Ventures) to unpack what the AI lab’s move to limit secondary trades means for SPV operators, brokers, and the founders trying to keep control of their cap tables. Plus: a real story of a founder who returned a $15M Series A six months after closing because Claude was going to eat his startup, SaaS moats, and just what does it mean to be rich?
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