AI founders jump into VC & Notion’s CEO doubts screen AI

It’s Tuesday!

After Jeff Bezos halted The Washington Post’s planned endorsement of Kamala Harris, over 200,000 digital subscribers have canceled their memberships, marking a significant backlash against the decision just weeks before Election Day.

This week’s top updates…

💸 OpenAI say 75% of revenue comes from consumers. Currently, ChatGPT has 250 million weekly active users, up 25% from August.

👗 The RealReal CEO exits after less than 2 years. The company's new CEO, Rati Sahi Levesque, is an ally of founder Julie Wainwright.

💬 Meta's new AI search engine aims to lessen its dependence on Google and Microsoft by enabling Meta AI to provide real-time answers on current events directly within its apps.

🚗 Waymo, the self-driving car company, raised $5.6 billion in a Series C round led by its parent company Alphabet.

📁 Meta signed its first licensing agreement with a news company, allowing its Meta AI chatbot to pull information from Reuters.

🖼️ Sotheby’s will open an auction on October 31 for its first painting by a robot, a portrait of Alan Turing.

AI founders are launching VC funds – here’s why it’s working

What’s happening: It’s a tough market for new venture capitalists, but one group isn’t struggling much: AI founders-turned-VCs. A crop of former AI startup founders and execs are leveraging their tech know-how and deep networks to launch funds aimed at early-stage AI investments.

Who’s in the game: Former Pilot executives Jeff Arnold and Paul Jun recently left their roles at the AI accounting startup to start Depth Capital Ventures, with $70M in the pipeline and backing from Bain Capital Ventures. Meanwhile, ex-OpenAI engineer Keith Adams and former Stripe AI lead Pamela Vagata secured $125M for Pebblebed, their new VC firm focused on AI.

Why it matters: Founders who know AI inside and out have a leg up, drawing in investors who see value in their connections and tech savvy. “People who are actively running companies have this natural deal flow,” says Hustle Fund’s Elizabeth Yin, underscoring why founder-led VCs are landing funding faster than most.

New VC norms: It’s becoming normal for founders to juggle their own startups and a venture fund on the side. This shift is backed by big-name examples like Sam Altman and Elon Musk, making dual roles look more feasible. Funds like Octane AI’s Theory Forge, led by co-founders Ben Parr and Matt Schlicht, target $25M, with Parr and Schlicht still running Octane AI full-time.

The bottom line: For investors, founder-led funds mean direct access to high-quality deals and insider knowledge. With AI transforming nearly every industry, AI veterans are uniquely positioned to invest in what they know best.

Notion CEO doubts AI's screen-control agents

Why it matters: As tech giants like OpenAI and Google bet on AI that navigates screens and apps automatically, the need for well-designed apps may drop—after all, AI doesn’t need a pretty interface.

The pushback: Notion’s CEO Ivan Zhao isn’t convinced. He argues screen-control AI, which uses cursors to perform tasks, faces slowdowns from logins and diverse app interfaces. Notion’s AI, built to streamline data within its own platform, skips these inefficiencies.

The big picture: While AI-driven screen agents are improving, companies like Notion, Salesforce, and ServiceNow are watching closely, as these advancements could eventually reduce the need for traditional software tools. For now, they have time to plan their next move.

FOUNDER NOTES

Insights: Global M&A Report - Q3 2024 (PitchBook)