🌟 Headlines in Startupland 🌟 

Bracing for the Burst?

On August 5, the Magnificent Seven tech giants lost an eye-watering $1 trillion in market cap on Wall Street. 

Wait, what happened?

A mixture of occurrences led to a massive selloff that sent Wall Street into a tailspin and the S&P 500 down a concerning 3%. It turns out that the companies that drove the market in the past couple of months funneling money into AI were the ones that suffered the most from this drop. Nvidia fell 6.4%, Apple 4.8% and Amazon 4.1%.

The next day the S&P recovered, but for this brief moment, it was no longer just the AI skeptics who wondered if the AI bubble was about to burst.

Well, is it?

For the moment, no. But the staggering amount of innovation, investment and hype around the revolutionary sector has formed a bubble around it. AI startups are still raising massive amounts:

• Glean is expected to close a $250 million funding round, valuing it at $4.5 billion

• ProRata.ai cinched a $25 million Series A round 

• Webcam-turned-AI company Opal has OpenAI leading its $60 million funding round

• AI weapons startup Anduril amassed a $1.5 billion funding round

Though many startups are cropping up and are becoming increasingly valuable, a wide application of AI has yet to be seen. Some worry that AI hasn’t found a product-market fit yet. Much of the the appeal of AI seems to be on its applications in the future rather than in the current moment. This has led to fears that the AI bubble is expanding too rapidly and expensively for people and the markets to handle, at least right now.

It’s a frustrating answer to a concerning theory. But, as with most innovations, we’ll just have to wait and see.

⚡️ Community Poll ⚡️

Last week, 57% of the TechDay Express community voted generative AI startups should partner with publishers.

Even More Headlines

☀️ Climate investment is up 32% in H1 2024 compared to H1 2023.

🕵️‍♂️ A UK watchdog is investigating Amazon’s $4B investment in Anthropic.

⚖️ Medialab bought failing startups like Kik and Genius; now they’re suing.

📈 A list of companies that probably won’t IPO this year

📚 Dive A Bit Deeper 📚

The importance of law firms for robotics startups

Law firms are an underutilized resource at many startups, especially ones that develop products that fall under the AI umbrella. Robotics startups are no different.

Seeking the guidance of law firms as founders build their startups will set them up for success in the future. Here are the top 3 reasons why robotics startups should bring on law firms:

1. Lawyers have the expertise to help startups understand potential legal challenges that may arise before they occur. No startup wants to think about a potential lawsuit or dispute, but it’s better to prepare for a hypothetical than panic if it does happen.

2. Building on that, startups that establish a working relationship with a law firm or legal team early on may have better chances navigating their company journey. A lawyer who helps a robotics startup file a patent or register copyright at the early stages has a better understanding of that startup’s goals.

3. Just like software engineers and programmers have specialties, so do lawyers. Robotics & Automation News suggests that robotics startups seek out the expertise of lawyers who specialize in areas relevant to the robotics industry, such as intellectual property, consumer protection, and employment contracts. As ethical questions about AI and its uses abound, hiring a lawyer with a background in such legal questions is crucial.

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Deep Dives Galore

💸 FOR SOME, ALL THAT GLITTERS IN VC ISN’T GOLD — Tons of cash, low interest rates and a bullish market could flip anyone in finance into a venture capitalist. The VC career move was a hot ticket for grads in 2021 and 2022, but in 2024 the move isn’t looking so good for many of them.

🤝 ARE M&As GONE FOR GOOD? — Federal antitrust investigations in the U.S. and abroad have dissuaded Big Tech from acquiring startups, at least in the traditional sense. M&As are no longer the bread and butter of Big Tech companies looking to expand. It’s all about “talent heists” now.

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