Pentagon, Baby, Gone

Top News

• OpenAI tweaks its Department of War deal: In the hours after Anthropic failed to reach an agreement with the US Department of Defense/War on February 28 for the military use of Claude, OpenAI famously swooped in and announced an agreement of their own. Clearly, OpenAI leadership has been receiving some blowback since the announcement. CEO Sam Altman has spent the past 48 hours clarifying and/or walking back parts of the deal, particularly around the same red lines posed by Anthropic: the use of AI for domestic surveillance and autonomous weapons systems. On Monday, Altman posted to X about OpenAI’s plans to amend their DoW agreement’s language, specifically barring “deliberate tracking, surveillance, or monitoring of US persons or nationals,” and assuring users that their tech won’t be used by intelligence agencies, such as the NSA. Altman also apologizes for the rollout of the original deal, which he now concedes appeared “opportunistic and sloppy.”

• Grow Therapy is worth $3B: The mental health startup connects patients with therapists and psychiatrists who accept their insurance plans. Clearly, they’ve found an important niche, and a user base in need of mental health services who were previously being left behind; Grow is already generating more than $1 billion in annual revenue. They’ve just raised a $150 million Series D round, led by existing investors TCV and Goldman Sachs Alternatives, at a $3 billion valuation. They plan to expand by engaging directly with employers and primary care providers, in addition to working with patients.

• Ayar Labs experiments with semiconductor connections: The chip startup works in a field known as “silicon photonics,” which uses fiber-optics to upgrade processing speed and power at data centers. These connectors allow data to move across chips via photon, which is a faster and more energy-efficient option than electrons traveling across conventional copper wiring. CEO (and electrical engineer) Mark Wade calls this “one of the biggest hardware issues that’s causing bottlenecks in AI.” Certainly a way to make data centers between four and 20 times more energy-efficient, as Ayar suggests it can realize, would be a massive advantage in our agentic future. Ayar raised $500 million this week at a $3.8 billion valuation from heavy hitters like Nvidia and AMD.

TWiST 500

Let’s talk about Anysphere, a company you might not have heard of, and their app that you DEFINITELY HAVE: Cursor. The vibe-coding favorite continues growing at an insanely rapid pace, despite intense competition from coding assistant products like Codex and Claude Code, not to mention agentic platforms like OpenClaw. Bloomberg now reports that Cursor’s annualized revenue hit $2 billion, and their run rate has essentially doubled in just three months.

Another positive sign: 60% of this revenue is coming in from corporate customers. That growth’s being powered not just by new sign-ups but enterprises adding more users (or “seats”) to the system. For all the talk about enterprises potentially not getting enough value out of their AI pilots, Cursor has clearly developed a tool that a lot of professional coders want and/or need. Their last valuation, back in November 2025, clocked in at $29.3 billion, ranking them among the most valuable private AI companies in the US.

And speaking of absolutely massive private companies that will maybe not be on the TWiST 500 for much longer… we turn to X. Not the xAI-Grok side, but the social network. They’re apparently testing out a standalone app called “X Chat” (or possibly “xChat”) with around 1,000 beta users. TechCrunch suggests it’s an upgraded version of X DMs, which are now end-to-end encrypted. (Privacy advocates note that X’s current DM system is not as locked down and trust-worthy as encrypted messaging apps like Signal, but it’s unclear whether or not X has made upgrades for the standalone version.)

Regardless, the spinoff represents something of a move away from owner Elon Musk’s original vision of X as the “Everything App.” Clearly the original X won’t be for absolutely everything any more if even instant messaging is moving to its own platform. – Lon

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This Week in Startups

E2257: Jason welcomes OpenClaw Foundation board member (plus founder and investor) Dave Morin to take us inside the organization, and talk about its goals and where OpenClaw should go from here. PLUS diving into the mounting rivalry between OpenAI vs. Anthropic: who does Dave think will win? THEN we’re checking out two more awesome demos from Greg Kara of Runtools and George Yameen of PickleWatch.

E2256: OpenAI raised the largest private funding round in startup history, giving away 15% of the company to Amazon, Nvidia, and SoftBank in exchange for $110 billion. We’re digging into the deal, and why Jason predicts the bendiest J-Curve in history for the LLM industry. PLUS Nick O’Neill checks in from the crypto chaos unfolding in Miami Beach, and THREE more amazing OpenClaw (and related) demos.

E2255: We’ve got Tyler Yust, a 22-year-old developer (and aerospace engineer!) who was one of the very first contributors to the OpenClaw project. Get an inside look at how everyone’s favorite open-source AI agent came to be, from one of the brilliant minds who was there from the very beginning. Plus, Jason and Deedy Das of Menlo Ventures explain why the SaaSpocalypse fears are probably overblown, and we’re checking out two more amazing OpenClaw projects.

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