About that Nvidia-China deal...

Top News

Nvidia clarifies its China business: On the heels of reporting that Nvidia is investing in R&D in China, the company told the news media that it will not send “graphics processing unit plans” to the nation for adaptation to the local market. The global race to build the fastest AI chips, train the best models, and apply AI as broadly as possible is not merely a business case — it’s also a geopolitical struggle. A struggle with Nvidia stuck in the middle: the chip company wants to do business without losing the favor of its home market’s government… OR earning the ire of China’s own technocratic corps.
Anthropic’s credit line: AI model giant Anthropic has reached a $2 billion revenue run rate, and to pair with the top line milestone, CNBC reports that the company landed a $2.5 billion credit line. A host of banks, including Morgan Stanely, JPMorgan, and Goldman, took part in the deal. With its revenue now comfortably in the ten-figure range, leaning on debt instead of equity capital makes sense for the former startup. After all, it can prove cheaper to lease capital than to sell shares in the long run — provided your valuation keeps going up. And with $2 billion in revenue, it hardly seems likely that Anthropic’s numbers are in any danger of heading south.
VCs double down on AI video: Today on the podcast we played with ElevenLabs’ latest AI audio tool. But AI audio tools are hardly the only non-text medium to enjoy venture favor. TechCrunch reports that after raising $70 million in late 2024, and another $34 million a month ago, Moonvalley — “a Los Angeles-based startup developing AI tools for video creation,” per Kyle Wiggers — has tacked on another $10 million worth of funding. That’s a lot of dosh in just a few quarters!

TWiST500

While it’s newsy that TWiST500 company Windsurf has new AI models in the field, it’s even newsier that its potential future parent company has built something so directly competitive: Codex.

Codex is a new agentic tool from OpenAI that builds off its o3 model, bringing to market what Altman and company call “a cloud-based software engineering agent that can work on many tasks in parallel.” Given that the agreement between OpenAI and Windsurf is expected by the market to be all but a done deal, we’re getting a good look at how the two companies diverge.

Windsurf is building more than just AI. The startup renamed itself after the IDE it launched to better unify human developers, their AI helpers, and traditional SWE workflows. OpenAI, in contrast, is bringing the early version of Codex to select customers inside of ChatGPT.

It’s not impossible to see where OpenAI’s models and Windsurf’s popular developer platform could find common ground.

Today on the podcast, Jason argued that Windsurf should not sell for $3 billion. I’ve written that the company should hold out for at least $5 billion. Jason said $10 billion. Whatever the final figure is, should Windsurf end its independent run, here’s hoping that it doesn’t lose its vision once a part of a far-larger concern. (Who doesn’t love an enemies-to-lovers arc?)

Until that deal is done, the two companies both retain their spots on our list. — Alex

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This Week in Startups

E2126: Podcast giant and Florida transplant Dave Rubin is Jason’s special guest on a politics and media-heavy edition of TWiST. Plus Jason and Alex talk the Chime IPO, Databricks major bet on agentic AI, startups offering Postgres as a service, and more.

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E2124: Jason, Lon, and Alex examine Perplexity’s WILD $14 billion valuation and openly wonder why they need MORE funding. Plus, does Y Combinator REALLY think Google should be broken up, and if so, why don’t they stick to their guns? All that and the guys chat with Streamfog’s Kevin Bondzio about the promise of AR-powered podcast ads.

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