☕ US weighs ban on Chinese AI models & Google plans new "Frozen" chip.
An AI agent hacked Hugging Face & Alibaba unveils Qwen3.8, ‘second only to Fable 5’
Breaking News
Hugging Face disclosed that an autonomous AI agent infiltrated its production systems through a malicious dataset, gaining access to internal credentials before being stopped. The incident is one of the clearest real-world examples of an AI agent carrying out a sophisticated cyberattack, highlighting the emerging security risks of autonomous AI.
The Trump administration is exploring measures to restrict Chinese AI models in the U.S., including sanctions, procurement limits, and liability for companies that host them. The move signals a new phase in the AI race, shifting competition from chips to the models themselves.
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STARTUPS RAISING MILLIONS
💰 Startup Funding Updates
PRE-SEED
Sightera Biosciences, an Antwerp, Belgium-based AI-driven drug discovery company, raised €3M in Pre-Seed funding. Backers included Entourage, Anacura, and QBIC.
Mandrake Bio, a Bengaluru, India-based AI-powered protein engineering company, raised $1.9M in Pre-Seed funding. The round was co-led by Activate and Antler, with participation from Spectrum Impact, DeVC, and angel investors including Vijay Chandru, Paras Chopra, Sanjiv Rangrass, and Vatsal Du.
SEED
Ulisses, a Milan, Italy-based IoT asset tracking and smart mobility company, raised €1.09M in Seed funding. Backers included ARGO Accelerator, co-backed by CDP Venture Capital and the Italian Ministry of Tourism, and managed by Zest and VeniSIA.
pQCee, a Singapore-based quantum-safe cybersecurity company, raised $3.9M in Seed funding. The round was co-led by SGInnovate and Lotus One Investment, with participation from In Group Holdings, Wavemaker Partners, SUTD Ventures Holdings, and Apsara Investments.
Extellis, a Durham, NC-based satellite imagery company, extended its Seed funding round. Backers included Shell Ventures.
Sonata, a New York City-based AI-powered preventive healthcare platform, raised $7M in Seed funding. The round was led by Lux Capital, BoxGroup, and Sunflower Capital, with participation from operators and founders at Ramp and Linear.
Vorflux, a Bengaluru, India-based AI-native autonomous software engineering platform, raised $15M in Seed funding. The round was led by Y Combinator, Peak XV Partners, Powerset, and Alliance, with participation from Parker Conrad, Immad Akhund, and Balaji Srinivasan.
Runta, a San Francisco, CA-based AI agent runtime infrastructure company, raised $20M in Seed funding. The round was led by Andreessen Horowitz.
Apaluma, an Albuquerque, NM-based regulatory intelligence platform, raised $5.55M in Seed funding. The round was led by Crosslink Capital, Kickstart, Haven Ventures, and Overwater Ventures, with participation from Orange DAO and NM Vintage Fund.
GROWTH
Raghu Vamsi Aerospace Group (RVAG), a Hyderabad, India-based precision manufacturing and deep-tech company, raised $40M in funding. The round was led by Norwest and Skegen Asset Management, with participation from Indus Bridge Ventures, GJNX Ventures, and Ashish Kacholia.
Sereact, a Stuttgart, Germany-based AI-powered warehouse robotics company, expanded its Series B funding to $116M with a $6M investment from Zalando.
Trellis Bioscience, a Redwood City, CA-based biotechnology company, raised $9M in Series C funding. The round was led by New Science Ventures and Easton Capital.
Empirical Security, a Chicago, IL-based cybersecurity company, raised $25M in Series A funding. The round was led by Brightmind Partners, following earlier backing from Costanoa Ventures, Hyde Park Angels, and other investors.
Neo, a Boston, MA-based agentic software control company, raised $100M in funding. Backers included Andreessen Horowitz, Bessemer Venture Partners, Craft Ventures, and Merlin Ventures.
Databricks, a San Francisco, CA-based data and AI company, announced a new strategic funding round at a $188B valuation. The round is led by Coatue, with participation from additional new and existing investors.
Self Inspection, a San Diego, CA-based vehicle health recording platform, raised $10M in funding. The round was led by Sandberg Bernthal Venture Partners, with participation from U.S. AutoForce, Westlake Financial, Costanoa Ventures, Rebellion Ventures, BrightCap Ventures, DVx Ventures, and Karim Bousta.
Flexell Space, a Uiwang, South Korea-based space solar technology company, raised $20M in Series A funding. Backers included InterVest, L&S Venture Capital, QUAD Ventures, Mirae Asset Venture Investment, Mirae Asset Capital, Industrial Bank of Korea, NH Venture Investment, IBK Securities–Seoul ZV, Korea Investment & Securities, and the Korea Credit Guarantee Fund.
Emergent, a San Francisco, CA-based AI software creation platform, raised $130M in Series C funding. The round was led by Creaegis, MNI Ventures, Claypond Capital, and Sentinel Global, with participation from Khosla Ventures, SoftBank Vision Fund 2, Lightspeed, and Y Combinator.
Final Boss Sour, a Los Angeles, CA-based gaming-themed snack brand, raised $4M in funding. Backers included Evolution VC Partners, The Angel Group, Mondelez International SnackFutures Ventures, Melitas Ventures, GFR Fund, and others.
Reo.Dev, a San Francisco, CA-based AI-native go-to-market platform, raised $11.3M in Series A funding. The round was led by Elevation Capital, with participation from Heavybit, India Quotient, Foster Ventures, Uncorrelated Ventures, and angel investors and AI industry leaders.
DAILY PICKS
🗞️ Must read posts
What happens when a VC reference-checks a founder (And who they actually call): Most founders think diligence is about metrics, customers, and market size. But once a VC is serious, they often start calling former colleagues, cofounders, customers, past investors, and people you never listed as references. This piece shows founders how to understand the hidden reference-check process and prepare for it before it quietly decides the round.
Why your CV keeps getting ignored for VC jobs (And how to fix it): Most VC applicants write resumes for consulting, banking, or student roles - not for venture capital. This piece shows how to reframe your experience into three signals VC firms care about: finding startups, forming investment views, and showing initiative through proof-of-work.
NEW VCs IN THE MARKET
🏦 Venture Capital Updates.
Founders Fund, a San Francisco-based venture capital firm, hired former OpenAI VP of Product Policy Ryan Beiermeister as a partner. She will focus on investing in startups building AI infrastructure, agentic systems, defense, energy, climate, biotech, and other frontier technologies.
ReefHaven Ventures, a San Diego, CA-based early stage venture capital firm, launched. Led by Garrett Smith, PhD, Managing Partner, and Nicholas Mourlas, PhD, Investment Partner, ReefHaven Ventures invests in early-stage startups at the intersection of Artificial Intelligence and Medical Technology.
KEY STORIES IN TECH
📜 Latest In Tech
Google plans new "Frozen" chip
Google is reportedly developing a new AI server chip, codenamed Frozen v2, that could make its Gemini models six to ten times more power-efficient than its current AI hardware.
The chip is expected to launch in 2028 as part of Google’s strategy to improve AI performance, reduce costs, and rely less on Nvidia’s processors.
The report boosted investor confidence ahead of Google’s earnings, highlighting the growing industry race to build custom AI chips for large-scale AI workloads.
Anthropic’s $1.5B copyright settlement receives final approval
A U.S. federal judge has given final approval to Anthropic’s $1.5 billion copyright settlement, with authors and publishers set to receive $3,000 for each eligible copyrighted work.
The court ruled that training AI models on copyrighted books qualifies as fair use, but found Anthropic’s downloading of books from pirate websites to be illegal, leading to the settlement.
The decision resolves this case but does not establish a nationwide legal precedent, leaving similar copyright lawsuits against Google, OpenAI, Meta, and other AI companies unresolved.
Open-weight AI models spark debate in the U.S.
Moonshot’s open-weight Kimi K3 model has intensified debate over whether the U.S. should restrict advanced Chinese AI models, with some OpenAI executives warning they could weaken investment in frontier AI labs.
Supporters of open AI argue that open-weight models drive faster innovation, lower costs, and broader adoption, while critics cite concerns around national security, data protection, and U.S. AI competitiveness.
The debate highlights a growing divide between protecting America’s leading AI companies and encouraging an open AI ecosystem, with many experts suggesting stricter AI chip export controls instead of banning open models.
Alibaba unveils Qwen3.8, ‘second only to Fable 5’
Alibaba revealed Qwen3.8-Max in preview, a 2.4-trillion-parameter model in its flagship Qwen series that the company claims ranks second only to Anthropic’s Fable 5, sending its shares up more than 3.5 percent in overnight trading Monday.
The new model is expected to become open-weight soon and can already be tried through Alibaba’s Token Plan, Qoder and QoderWork, arriving just days after rival Moonshot AI launched its own record-setting open model.
Alibaba’s release adds to a wave of cheaper Chinese AI models that has hurt competitors, with Zhipu shares down more than 45 percent and MiniMax down about 13 percent over the past five days.
China weighs tighter export controls on AI models and chips
China is reportedly considering stricter export controls on advanced AI models, model weights, training data, and semiconductor technologies to prevent key AI assets from moving overseas.
Regulators have consulted companies including Alibaba, ByteDance, Zhipu, and Huawei on limiting foreign access to advanced AI technologies and restricting overseas chip production based on Chinese-designed semiconductors.
The proposed measures mirror growing U.S. AI export restrictions and signal that China increasingly views advanced AI as a strategic national asset requiring tighter government oversight.
Trump’s AI standards chief resigns after three months
Chris Fall has resigned as director of the Center for AI Standards and Innovation (CAISI) after just three months in the role, marking the second leadership departure at the agency this year.
CAISI is responsible for developing AI testing standards and cybersecurity evaluations, but it was notably excluded from the Trump administration’s new AI safety initiative, Gold Eagle.
The resignation comes as the U.S. debates AI regulation, frontier model safety, and how to respond to the rapid progress of Chinese open-source AI models.
LAST COFFEE SIP
☕ Other News
AliExpress fined almost $630 million over illegal product sales
The European Commission fined AliExpress, the Chinese shopping site owned by Alibaba, €550 million (about $629 million) for letting sellers offer counterfeit and unsafe goods across the European Union, the largest penalty yet under the Digital Services Act.
Investigators found millions of fake products, unsafe toys, and dangerous cosmetics still for sale after being flagged, and said AliExpress lacked enough staff, with screeners sometimes given just tens of seconds to judge whether an item met EU standards.
AliExpress called the fine disproportionate and is weighing its options without saying if it will appeal, following a €200 million ($232 million) penalty against rival Temu in May for similar failures to block illegal products.
HIRING ALERT: STARTUPS & VC ROLES
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