Why Amazon, Microsoft, and others keep scaling away

Top News

• The global compute hunt continues: Last week’s earnings reports from hyperscalers made it clear that Amazon, Microsoft, and Alphabet intend to continue spending heavily on data center buildouts. But even those investments may not be enough. OpenAI signed a $38 billion deal with Amazon, but Microsoft announced deals with IREN and Lambda, two neoclouds that rent GPUs to other companies. Concern that the major AI players were overspending on infrastructure seems to have had little impact on spending plans thus far.

• Xanadu is going public: Quantum computing startup Xanadu intends to go public via a SPAC combination with Crane Harbor in a deal that assigns the company an enterprise value of $3.1 billion, or an equity valuation of $3.6 billion. The Canadian company uses photons instead of the more common trapped-ion qubits, allowing it to pursue room-temperature quantum computing. You can check out the investor deck here. SPACs tend to be speculative bets, and Xanadu is a good example of this rule.

• Waymo targets three new cities: After telling media that the it intends to offer “one million trips per week” by the end of 2026, Alphabet’s Waymo self-driving concern announced future expansions into Detroit, Las Vegas, and San Diego. Today, Waymo executes at least 250,000 paid trips each week; reaching one million will require a quadrupling of its current pace, only possible via both adding more vehicles and cities to its roster. Elsewhere in self-driving land, Baidu’s Apollo Go announced today that it has also reached the 250,000 weekly self-driving rides milestone.

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General Catalyst helped fund Hippocratic AI, and the bet is paying off. The healthcare-focused AI startup announced a $126 million Series C today, valuing the company at $3.5 billion. Avenir Growth led the round, with CapitalG, Kleiner Perkins, General Catalyst, and a16z chipping in capital for the transaction.

Recall that Hippocratic AI raised $141 million earlier this year in a Series B funding round, which assigned a valuation of around $1.6 billion to the startup. So, what happened in the last few quarters that was good enough for a more than doubling of its worth? The startup didn’t provide hard numbers, but claims that it has “established partnerships with over 50 large health systems, payors, and pharma clients in 6 countries, built over 1000 clinical use cases, and completed over 115 million clinical patient interactions with no safety issues.”

Is that good? Back when it raised its Series B, its reported progress was that it had “signed contracts with 23 health systems, payors, and pharma clients in just 23 weeks [and] launched 16 of those clients.” You can convert the changing language into revenue in your head, but it’s clear that Hippocratic’s product is finding companies that want to use its technology.

Hippocratic AI offers more than 1,000 different “AI healthcare agents” for tasks ranging from the obvious (appointment scheduling) to follow-up check-ins for surgeries like “post-procedure breast biopsy.” Notably, the startup doesn’t offer AI agents that diagnose or prescribe; it’s building tools to help existing providers do more with the humans they have on staff, rather than replacing healthcare providers.

Today on the podcast, we discussed the market traction that AI startups are finding in the legal field. Programming and the law are two early bright spots in the AI game. Healthcare could become a third. — Alex

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This Week in Startups

E2202: Producer Oliver makes an actual appearance on the pod to give us a deep dive Suno AI demo, showing Jason and Alex just how easy it is to compose and produce an original song based purely on text prompts. PLUS we’re checking out Higgsfield AI and their incredible face-swapping technology, debating when OpenAI will finally go public, and offering a STRONG WARNING to anyone relying on OpenAI’s APIs to build their business.

E2201: Grammarly CEO Shishir Mehrotra joins us to explain why his company is swapping names, taking on the mantle of Superhuman, the email helper it recently acquired. It just goes to show that, sometimes, a brand upgrade is still called for, even after you have 40 million active daily users. PLUS find out why Jason is off to Tokyo and everyone’s thoughts on 1x’s tele-operated chore-bot, Neo.

E2200: On our milestone 2,200th episode, Jason and Alex chat with Zach Handshow of SpatialGen about the pressure of giving an Apple keynote and the intense amount of compute required to deliver 16K spatial video to VR headsets. PLUS Raiza Martin of Huxe tells Alex about making AI assistants more personality-driven and less robotic. AND our latest Gamma Pitch from ChessEver, a chess app aiming for serious, elite-level players.

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Founder U and LAUNCH Accelerator in Japan!

Jason’s coming to Tokyo on Nov 14 to launch a partnership with JETRO — bringing Founder University and Angel University to Japan, and connecting Japanese founders and investors with the global ecosystem. This event kicks off a ten-week program that we're starting in January, all culminating in an Immersion Week and Demo Day in SF. Register here: https://luma.com/cm0x90mk

We’re Hiring a Program Manager!

LAUNCH is seeking a program manager to help organize and manage the Japanese versions of Founder University and Angel University. Candidates must be fluent in both English and Japanese, and should plan on splitting their time between Tokyo and our home base in Austin, Texas. If you’re interested in this exciting opportunity, reach out to [email protected]!

SF Live-Work Space Now Available

Need a flexible living and working environment in San Francisco? This thoughtfully designed loft-style residence at 787 Bryant St., the heart of the vibrant SOMA district and the city’s creative hub, is now available for rent or purchase. Check the listing for more details.

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