The Next ChatGPT?

Welcome Shareholders,     

In this daily edition of the Brags Newsletter, we'll cover the latest on two startups looking to capitalize on investor enthusiasm for AI, sustainability startups thriving despite the venture slowdown, and a startup looking to overhaul the steel industry. So sit back, grab a snack, and enjoy!

Before we get started, we have a small announcement to make. VCBrags and Miami Hack Week are hosting a Happy Hour on Feb 1st. To know more and sign up for the event, please fill out the form below. 

Who's Raising?

ChatGPT Challengers Anthropic and Character Step Up to the Plate

• Artificial Intelligence startups Anthropic AI and Character Technologies are looking to raise hundreds of millions of dollars in funding from venture investors, amidst heightened interest in the sector. 

Anthropic is zeroing in on $300 million in a new funding round (at close to a $5 billion valuation), while Character is currently in talks with investors to raise $250 million in new funds (at a $1 billion valuation). The talks come as investor and user interest peaks in generative AI (where AI algorithms can generate text/images/media), with OpenAI recently raising $10 billion from Microsoft and amassing 1 million users in just five days.

Anthropic, which former OpenAI employees founded, has raised over $700 million in funding and has created an AI chatbot similar to that of ChatGPT called Claude, currently in beta through a slack integration. On the other hand, Character AI was founded by two former Google researchers who previously worked on the company's Language Model for Dialogue Applications (LaMDA). The company has created a chatbot based on LaMDA that can generate humanlike responses and participate in contextual conversations. 

Venture Today 👏

Climate Entrepreneurs Weather the Tech Tempest

• Climate and energy transition startups are outperforming the rest of the market as workers and investors flock to take advantage of the boom. 

In 2022, US venture firms invested $20 billion, outpaced 2021's impressive figures of $18 billion, and nearly tripled the $7 billion figure seen in 2020. Since 2021, there have been 135 funds focused on climate investing, with over $94 billion in assets under management. Despite talks of a recession, enthusiasm about climate startups remains at an all-time high.

When the great financial crisis hit the US economy in 2008, most clean energy startups that raised money from investors relied on government subsidies and eventually went out of business. Climate investors and today's startups claim that this time is different, citing several tailwinds. This includes the reduction in the cost of generating clean energy over the last decade, governmental pressure in the US and Europe to measure, report, and curb emissions, and incentives passed on through governmental climate-related spending.  

Startup of the Day

Boston Metal Looks to Make Sustainable Steel a Reality With a $120 Million Funding Boost

• Boston Metal, which focuses on curbing emissions from steelmaking, announced that it had raised $120 million from a new Series C round led by steel giant ArcelorMittal. 

Other investors in the round include Microsoft's climate innovation fund and SiteGround Capital. The funding brings the company's total capital raised to over $200 million since the startup launched from an MIT lab in 2012. Steelmakers around the globe produce 2 billion metric tons for household products and infrastructure components, but most steel produced today is made in coal furnaces that melt iron ore. As a result, making steel generates between seven and nine percent of global greenhouse gas emissions.

To combat this, Boston Metal said that it had developed a process called molten oxide electrolysis, which involved using electric currents to heat iron ore to around 1,600 degrees Celsius. When the process is completed and the resulting material cools, it forms steel blocks. The company said it would use the new funds to expand production of its 'green steel' at its existing pilot facility in Woburn, support site selection and design for its first plant, and build a manufacturing facility for its Brazilian Subsidiary. 

Memes and Other Things

That's called conviction