In today’s newsletter:

• News - 🧬 How A.I. Is Dreaming Up Cures and Nobel Prizes!

• Culture - 🚀🇨🇳 How China’s AI Rivals OpenAI Despite Chip Bans!

🧬 How A.I. Is Dreaming Up Cures and Nobel Prizes!

Artificial intelligence, often criticized for "hallucinating" plausible but false information, is finding a surprising role as a creative powerhouse in scientific discovery. While chatbot blunders have sparked controversy, A.I.'s ability to conjure imaginative ideas is proving invaluable in fields like medicine, chemistry, and meteorology. Researchers like Nobel laureate David Baker are using these "hallucinations" to design groundbreaking proteins that don’t exist in nature, leading to revolutionary treatments for cancer, viral infections, and more. From creating millions of novel proteins to designing bacteria-resistant catheters and improving weather forecasting, A.I.’s creative leaps are supercharging the scientific method, transforming hunches into discoveries at lightning speed.

Far from random imaginings, these A.I.-generated ideas are grounded in scientific facts and rigorously tested against reality, accelerating innovation across disciplines. While some researchers bristle at the term "hallucinations," preferring to call them “creative bursts” or “probability distributions,” their potential is undeniable. The success of tools like diffusion models, which power visual generators and now novel protein designs, highlights A.I.'s role in unlocking nature’s secrets and building a sustainable future. As researchers dream big with A.I., the promise of curing diseases, advancing technology, and understanding life itself feels closer than ever—like a modern scientific renaissance in the making.

🗞️ In Other News…

• Two NHS hospital trusts in London are testing an AI system, Aire-DM, that analyzes ECG data and patient risk factors to predict type 2 diabetes up to a decade in advance, potentially revolutionizing early detection and prevention efforts.

• SMIC shares surged as investor confidence grew in China’s AI advancements and accelerated chip localization efforts, though analysts caution its focus on mature nodes may limit benefits from AI chip demand.

• Elon Musk's SpaceX is moving forward with plans to establish Starbase, a company-owned town in Texas, aimed at supporting its space endeavors and creating a self-sustaining community.

• H2O.ai’s h2oGPTe Agent has set a new benchmark in AI by achieving the highest-ever score of 65% on the GAIA test, surpassing competitors like Google and Microsoft and showcasing its leadership in advanced, real-world AI applications.

• Elon Musk's xAI has raised $6 billion, bringing its total funding to $12 billion, as it rapidly expands operations, develops its Grok AI model, and positions itself against competitors like OpenAI and Anthropic in the generative AI race.

🚀🇨🇳 How China’s AI Rivals OpenAI Despite Chip Bans!

Chinese startups are closing the gap with U.S. AI giants faster than expected, despite restrictions on access to cutting-edge chips. Companies like DeepSeek and Moonshot AI have developed advanced models rivaling OpenAI’s reasoning tools and even outperforming them in specific areas like math. By leveraging techniques like reinforcement learning and "mixture of experts" (MoE), these firms are finding innovative ways to sidestep chip limitations while optimizing performance. Tencent's MoE model, for instance, matched Meta’s Llama 3.1 using just a fraction of the computing power, signaling China’s ability to compete with creative solutions over brute-force resources.

The AI boom in China is driven by startups like Moonshot, which has gained traction with its chatbot Kimi, and DeepSeek, which excels in math and coding. These companies have built cost-effective AI clusters and efficient data-processing techniques, positioning themselves as contenders in the global race. However, they face hurdles like valuation challenges and chip access, which hinder growth compared to U.S. players like OpenAI and Nvidia-powered ventures. Yet, as former AI executive Howard Huang puts it, the Chinese AI industry is proving adept at "dancing in shackles," innovating within constraints to push the boundaries of possibility.

VC Fundraising Rounds

• Perplexity AI Inc., an AI startup developing a search product to rival Google, has raised $500 million in funding, tripling its valuation to $9 billion. (12/18/24)

• SandboxAQ has raised over $300 million at a valuation exceeding $5.6 billion to advance its AI and quantum sensing technologies, focusing on specialized AI model development. (12/18/24)

• Nuitee, a technology solution provider founded in 2017, has raised $48 million in a Series A funding round to expand its travel and hotel connectivity technology solutions. (12/18/24)

• 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)

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