The Dealflow by Founders Capital - Edition 27

Key News and Trends

OpenAI’s $500B Glow-Up: Non-Profit Gets a $100B Cut

OpenAI and Microsoft have sketched out terms for a restructuring that clears the path to an eventual IPO. The deal would grant OpenAI’s non-profit parent a stake worth at least $100B (20–30% ownership) while Microsoft walks away with ~30%, or $170B at today’s $500B valuation. It’s a delicate balancing act: satisfying investors like SoftBank, appeasing regulators, and fending off Elon Musk’s lawsuit, all while proving the company can still honour its original mission. Read more here

OpenAI’s $300B Cloud Tab With Oracle: Trillions Don’t Come Cheap
OpenAI reportedly signed a $300B, five-year computer deal with Oracle, one of the largest cloud contracts in history. Starting 2027, it will cost $60B a year, far outpacing OpenAI’s $10B ARR. The deal deepens their Stargate data centre partnership but raises eyebrows on how OpenAI will foot the bill. Oracle’s stock soared 43%, briefly making Larry Ellison the world’s richest man. OpenAI, meanwhile, is betting its future on infinite GPUs. Read more here

Google’s $3.5B EU Ad-Tech Fine: Pocket Change or Power Play?
The EU slapped Google with a $3.5B fine for abusing dominance in ad-tech, its second-biggest antitrust penalty ever. Brussels says Google must resolve “inherent conflicts of interest,” hinting at possible divestitures. Trump cried foul, calling it discrimination against U.S. firms, while Google vowed to appeal. For the EU, it’s less about the money, barely a rounding error for Alphabet, and more about flexing regulatory muscle just as U.S. authorities push for a breakup too. Read more here

Anthropic’s $1.5B Copyright Peace Deal Meets a Judge With No Chill
Anthropic’s proposed $1.5B settlement with authors over pirated books just hit a wall. Judge William Alsup slammed the deal as “nowhere close to complete,” warning lawyers not to ram it “down the throat of authors.” The court wants a proper claims process, a final list of ~465k works, and tighter rules before approval. For Anthropic, the payout was supposed to buy legal peace, now it risks becoming a protracted mess and a cautionary tale for AI copyright deals. Read more here

Founder’s Take: Betting the House on GPUs - OpenAI’s $300B Gamble vs Oracle’s Sure Thing

OpenAI and Oracle are fascinating. Over the past six or seven months, there’s been a lot of chatter comparing OpenAI to Oracle, could it really sustain the kind of meteoric rise Oracle achieved in the early 2000s, or would it falter under the same pressures of scale and competition? Now the two have signed a $60B-a-year deal, one of the largest cloud agreements in history.

The striking thing here is the mismatch: OpenAI is generating around $10B in ARR, yet it’s locking itself into $60B in annual cloud costs. That’s a huge leap of faith. To me, Oracle looks to have played this perfectly. They’ve positioned themselves as the arms dealer of AI, supplying the infrastructure while avoiding the execution risk of models. The stock pump shows the market’s preference: infrastructure winners are loved, while model builders are effectively betting their futures on infinite GPUs.

This feels like a high-wire act. If OpenAI can scale revenues to match, it becomes a category-defining play. But if not, the imbalance between costs and income could become unsustainable. Meanwhile, Oracle may end up as the biggest winner of the AI boom, proving yet again that the infrastructure layer, not the application layer, is often the best investment.

Top Venture Deals

Cognition AI: $400M Round at $10.2B Valuation (Founders Fund, Lux, 8VC, Elad Gil)

• Cognition AI, the maker of “Devin,” billed as the world’s first AI software engineer, has raised $400M at a $10.2B valuation. ARR jumped from $1M in late 2024 to $73M by June, boosted further by its acquisition of Windsurf. Customers include Goldman Sachs, Palantir, and Dell. The fresh capital will fund model training and enterprise expansion as Cognition positions itself against Big Tech in AI-powered software development. Read more here

CuspAI: $100M Series A (NEA, Temasek, NVentures, Samsung, Hyundai)

• Cambridge-based CuspAI secured $100M to scale its AI “search engine” for materials discovery, just a year after a $30M seed. Founded by ex-Quantinuum and Qualcomm execs, the platform generates and evaluates novel materials up to 10x faster than traditional methods. Industry partners span Hyundai (sustainable energy), Kemira (toxic-free chemicals), and Meta (carbon capture). Funds will support U.S. and Asia expansion. Read more here

Reflection AI: $1B Raise Nearing $5.5B Valuation (Nvidia, Sequoia, Lightspeed, DST Global)

• Reflection AI, a one-year-old coding-focused AI startup founded by ex-Google DeepMind and Gemini researchers, is close to raising $1B at a $4.5-$5.5B valuation. Nvidia’s VC arm is expected to invest $250M, joined by Sequoia, Lightspeed, and Yuri Milner’s DST. The company aims to push toward superintelligence, building autonomous systems that can outperform humans in cognitive tasks. Valuation is up 10x in just six months. Read more here

Upcoming Public Offerings

Klarna

• Swedish fintech Klarna debuted on the NYSE at $40 a share, above its $35-37 range, raising $1.4B and valuing the firm at $15B. Shares opened at $52 before settling near $46. Of 34.3M shares sold, only 5M came from Klarna itself; the rest were secondary sales by investors including Sequoia, Silver Lake, and Anders Holch Povlsen. CEO Sebastian Siemiatkowski retained his full stake, worth over $1B at IPO pricing. Read more here

Infleqtion

• Quantum computing startup Infleqtion will go public via a merger with Michael Klein’s Churchill Capital Corp. X at a $1.8B pre-money valuation. The deal provides $540M in proceeds, including a $125M PIPE from Maverick, Counterpoint Global, and others. Infleqtion will use funds to advance its neutral atom quantum computers and quantum sensors, targeting commercialisation of precision clocks and GPS alternatives. Expected close: late 2025 or early 2026. Read more here

See you in the next edition,
The Founders Capital Team

Founders Capital is the trading name of FC Group Holding Ltd. FC Group Holding Ltd is an Appointed Representative of 8point8 Capital Ltd which is authorised and regulated by the Financial Conduct Authority (reg. no. 936586). 

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