In today’s newsletter:

• News - 💡 He Made Databricks Worth $62B—By Charging for Free Tech

• Culture - 🎯 How Israel’s AI in Gaza Could Redefine Modern Warfare

💡 He Made Databricks Worth $62B—By Charging for Free Tech

Ali Ghodsi, the mastermind behind Databricks, has transformed the company into one of Silicon Valley’s fastest-growing startups, now valued at a jaw-dropping $62 billion. The Iranian-born CEO, who fled to Sweden as a child, has guided the company through "strategic surgeries" since taking the reins in 2016. By shifting from giving away free software to monetizing an upgraded version, and building an AI bot named R2-D2 to boost productivity, Ghodsi turned Databricks into a data powerhouse that giants like Walgreens and Rivian rely on for AI-driven insights. His ability to blend bold leadership with relentless innovation is the secret sauce fueling the company's growth.

Under Ghodsi’s watch, Databricks hasn’t just survived—it’s thrived, even during tech downturns. He’s kept the company lean without layoffs, charting a course toward profitability with the much-referenced "Conte Curve." Meanwhile, he’s been on a dealmaking streak, snapping up AI startup MosaicML for $1.3 billion and outbidding rivals like Snowflake for Tabular with a $2 billion offer. These moves cement Databricks' position as a leader in the data and AI space, setting the stage for a potential public offering by 2025—or another bold move to keep the company ahead of the pack.

🗞️ In Other News…

• Perplexity, an AI-driven search engine, raised $500 million in its fourth funding round this year, tripling its valuation to $9 billion as it rapidly grows its user base, explores search advertising, and competes in the booming AI market.

• AMD and LuminArx Capital raised $333 million for Vultr, valuing the AI cloud startup at $3.5 billion, as it accelerates GPU acquisitions and strengthens AMD's competition with Nvidia in the booming AI infrastructure market.

• Perplexity has acquired Seattle-based startup Carbon to integrate its retrieval augmented generation (RAG) technology, enabling enterprise AI search capabilities for accessing internal and cloud-based data by early 2025.

• Google’s new guidelines for Gemini contractors, prohibiting them from skipping prompts outside their expertise, have raised concerns about the AI's accuracy on sensitive topics like healthcare.

🎯 How Israel’s AI in Gaza Could Redefine Modern Warfare

AI is reshaping modern warfare, as seen in the Israel Defense Force's use of programs like “The Gospel” and “Lavender” during its Gaza operations, suggesting targets and tracking individuals through AI-powered tools. While the IDF claims these systems merely support human decision-making, critics highlight concerns about “automation bias,” where analysts overly trust AI-generated suggestions, potentially leading to devastating mistakes. With the death toll in Gaza climbing, the use of AI in targeting has sparked debates over accuracy, accountability, and ethical implications in conflict zones.

The broader issue of AI in military operations extends beyond Gaza, with countries like Ukraine leveraging similar technology in its fight against Russia, and the U.S. exploring its own applications. Calls for international norms and regulations are growing, with policymakers like Senator Peter Welch pushing for guardrails to ensure these tools adhere to humanitarian laws and don’t threaten civilians. While achieving global agreements on AI regulation may seem daunting, experts argue it’s possible, citing past treaties on weapons like landmines and cluster munitions as hopeful precedents.

VC Fundraising Rounds

• Databricks is securing an enormous $10 billion in additional funding, a move that will catapult its valuation to $62 billion. (12/17/24)

• Basis, a startup focused on creating AI software for accounting firms, has secured $34 million in early-stage funding. (12/17/24)

• Anatomy Financial, the creator of an AI-powered lockbox that transforms paper mail from healthcare practices into an email-like format for streamlined billing workflows, has raised $19 million in Series A funding. (12/17/24)

• Liquid AI Inc., an MIT spinoff specializing in generative AI models built on a novel architecture distinct from transformer-based systems, has secured $250 million in early-stage funding. (12/13/24)

• Zest AI, a company offering AI-driven credit scoring and underwriting solutions for financial institutions, has secured a $200 million growth investment. (12/13/24)

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