The Pentagon Launched Its Own ChatGPT and Grok, Excluded Anthropic Entirely, and CISA Suspects Iran Hit US Water Systems. Is Washington Choosing AI's Winners Now?
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This week from the AI for Founders podcast on Spotify:
The Guy With 65,000 Shareholders Turning Your Phone Into an AI Data Asset — LINK
Dan Novaes of Mode Mobile raised over $110 million exclusively from retail investors and now acquires consumer apps to convert everyday phone use into AI training data. He argues the Anthropic copyright settlement and Cloudflare's crawler rules just changed who gets paid when AI trains on your data.
Nobody Treats Insomnia Like a Business Problem Except This CEO — LINK
Colin Lawlor of Sleep.ai, formerly SleepScore Labs, has collected roughly one billion hours of sleep data across 250 plus intervention studies. His sharpest point: the data is worthless without an intervention layer on top, which is why Germany's prevention law became Sleep.ai's biggest distribution channel.
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Investor Corner
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Tip of the spear:
Sony and Warner Sue Anthropic Over "Brazen" Music Piracy — LINK
Sony Music Publishing and Warner Chappell accuse Anthropic of torrenting and scraping thousands of copyrighted songs to train Claude, months after a separate authors' suit cost the company $1.5 billion. The copyright bill for training data just kept climbing.
Meta Pays $18 Billion to Get Off Regulators' Backs Over Kids — LINK
The settlement with 29 states forces a default non-algorithmic feed, a two-hour teen time cap, and overnight blackouts, locked in for a decade. Any founder building a teen-facing product just got a preview of the new compliance floor.
The Pentagon Built Its Own ChatGPT and Grok, and Left Anthropic Off the List — LINK
GenAI.mil already has 1.7 million of the Defense Department's 3 million personnel on it, running OpenAI and xAI models after Anthropic insisted on safety guardrails the Pentagon would not accept. Government contracts are turning into a real AI market share battle.
Nvidia Puts $3.5 Billion Into MediaTek to Lock Down the Chip Buildout — LINK
The investment gives MediaTek access to Nvidia's NVLink Fusion ecosystem so custom AI chips still plug into Nvidia's infrastructure. Even the companies designing around Nvidia end up paying Nvidia.
Hackers Say They Stole Millions of Patient Records From McKesson — LINK
ShinyHunters is demanding a $55 million ransom after pulling names, Social Security numbers, diagnoses, and medications from the pharmaceutical distributor's cloud systems. Healthcare's AI ambitions have a security debt problem nobody's pricing in.
SB Energy took OpenAI equity instead of rent to anchor a 10-gigawatt Ohio data center campus, and those warrants have appreciated by nearly $2 billion since January. Infrastructure landlords are becoming AI investors.
a16z Grows Its Growth Fund to $8.5 Billion, Days After a New $1.1 Billion Fund — LINK
The firm has now backed over 100 companies out of this fund alone, spanning enterprise AI, defense tech, robotics, and health tech. Dry powder is not the constraint in this market anymore.
CISA Confirms Hackers Hit Over 100 US Water Systems, Suspects Iran — LINK
The intrusions targeted programmable logic controllers from Rockwell, Schneider, and Siemens across rural systems in Michigan, Minnesota, and beyond, with some shutdown processes disabled. Critical infrastructure is now a live testing ground for opportunistic attackers.
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Framework:
Why the Best Round Might Be No Round
Every founder assumes the fastest path to scale runs through a term sheet. This week's guest raised over $110 million and built a company with 65,000 shareholders without a single traditional VC check, funding the business through retail investors who bought in because they believed in the product, not because a fund needed to deploy capital on a fund's timeline. Here's how to think about capital the same way.
01 — Ask who actually needs the round to happen. A VC round is often driven by the fund's need to deploy, not your company's need for cash. Before you raise, separate the money you need to hit your next milestone from the money someone else needs to justify their job. Those are rarely the same number.
02 — Treat retail and customer capital as a distribution channel. Sixty-five thousand shareholders is not just a cap table, it is sixty-five thousand people who are also potential customers, advocates, and word-of-mouth channels. Money that comes with an audience attached is worth more than money that comes with a board seat attached.
03 — Price your independence, not just your equity. Every round buys the investor a say in your decisions along with a piece of your company. Calculate what a mega-round actually costs you in board control, reporting overhead, and pressure to hit growth numbers that suit someone else's fund cycle, then decide if that price is worth the speed.
04 — Build the boring cash flow first, raise the exciting story second. The founders who raise from a position of strength are the ones who did not need the money when they took it. Get to a version of your business that survives without outside capital, and every future conversation with an investor changes in your favor.
Source: aiforfounders.co/frameworks
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Keep it moving
Z.aiReveals Itself as the Mystery Lab Behind Ox Alpha — LINK
The GLM maker will open-weight Ox Alpha, a reasoning model built for coding and sustained agentic work, after it quietly topped several leaderboards. Cheap, capable Chinese models keep chipping at frontier lab pricing power.
The Financial Stability Board Says AI Cyberattacks Are Now the Top Global Risk — LINK
FSB chair Andrew Bailey told G20 finance ministers that AI has changed the speed, scale, and cost of an attack faster than regulators can respond. Stretched AI valuations made the list too.
OpenAI Quietly Rolls Out Pay-Only-If-It-Works Pricing — LINK
Select enterprise accounts now pay only when a task completes successfully, echoing Intercom, Zendesk, and Salesforce. The risk of failed AI attempts is moving from customer budgets to OpenAI's balance sheet.
Instagram Cracks Down on Undisclosed AI Personas — LINK
The "AI creator" label is now "AI-generated profile," and accounts without proper disclosure get their reach throttled, especially in dating and wellness content. Undisclosed AI personas just got more expensive to run.
A Harvard Law Dropout Raised $6 Million to Build a Harvey for Cops — LINK
Blue Voice already answers a legal question a minute for officers across 225 county agencies in 25 states, built to avoid the 30 percent error rate its founder says generic AI tools produce. Vertical AI for public safety just got funded.
NHS AI Scribes Are Making Serious Errors, and No One's Regulating Them — LINK
Healthwatch England flagged 27 AI scribes across the NHS for miscoding drugs and misrecording diagnoses, none of them classified as regulated medical devices. Patients are the only safeguard catching the mistakes.
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Caterpillar Applies Its Mining Automation Playbook to AI — LINK
The company is putting $100 million over five years into training 118,000 employees on AI and autonomy, backed by record $20.5 billion quarterly revenue. Industrial AI adoption is getting a very well-funded head start.
Vijay Pande Left $4 Billion at a16z to Make Five Bets a Year Instead of Thirty — LINK
His new firm VZVC runs on two partners and AI agents for operations, betting concentration beats volume in AI-driven biotech. Fewer, bigger bets might be the actual venture thesis for this cycle.
Europe Orders a 388 Million Euro AI Supercomputer for Finland — LINK
LUMI-AI will land in Kajaani in 2027 with roughly ten times the AI capacity of the current LUMI system, built on AMD chips and European interconnect tech. Sovereign AI infrastructure is becoming a real budget line, not a talking point.
MIT Finds AI Can Already Pass Nearly Every Undergraduate Assignment — LINK
A campus committee report also documented declining office hours and study group attendance in just three years, while the EU AI Act pushes education monitoring compliance to December 2027. Higher ed's AI reckoning is arriving faster than the regulation meant to manage it.
Runable Raises $21 Million to Take AI Agents From Building Businesses to Growing Them — LINK
The Series A values the company at $65 million after it hit a $2 million annualized revenue run rate within three weeks of launching payments. Over 1.7 million registered users are already using it to build and market small businesses.
Bill Gates Wants a Robot Tax and "Human Reserved" Jobs — LINK
His proposal taxes automation like payroll and would wall off certain roles from AI entirely, an idea he admits faces real sustainability skepticism. It's the most concrete labor policy idea to come from Big Tech's responsible AI camp yet.
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What I’m thinking about:
There is no biological free lunch, and deep sleep is the tab you don't see until decades later — Clip
Thanks for being here.
-Ryan
p.s. I write about Revops, Product, and Founder-led marketing on Linkedin , X , and my blog .
