U.S. companies are increasingly routing AI workloads to cheaper Chinese models from DeepSeek, Z.ai, and Alibaba as OpenAI and Anthropic costs rise, with Chinese models now accounting for more than 30% of U.S. company token usage on OpenRouter in recent weeks. CNBC has more here.

In related news, Chinese officials have held meetings with Alibaba, ByteDance, Z.ai, and other top tech companies about potentially restricting overseas access to China’s most advanced AI models, as Beijing moves to treat homegrown AI as a national-security asset. Reuters has more here.

Meta says California, Colorado, Kentucky, and New Jersey are seeking $1.4 trillion in penalties — roughly its entire market cap — in an August youth-safety trial over claims that Facebook and Instagram were designed to addict young users and mislead the public about their safety. Reuters has more here.

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On Monday, Decagon CEO Jesse Zhang published a provocative new theory, posted under the title “Everyone is wrong about open source AI in the enterprise.” The post grapples with one of the most interesting contradictions of today’s AI economy: More mature AI deployments are switching to lighter models, he says, even at his own company. But the overall spend on expensive state-of-the-art models has barely budged.

It’s a new way to think about the relationship between frontier and open source models. In Zhang’s telling, they aren’t competitors, and open source models’ success isn’t coming at the expense of frontier labs. Instead, they’re two phases of the same life cycle, with expensive frontier models being used to prove out use cases that can be passed along to cheaper open source alternatives as they mature.

As more mature use cases switch to lighter models, new use cases keep arising — and the overall spend on frontier models barely goes down.

Zhang doesn’t give much data to support the point, but the data isn’t hard to find. Vercel’s AI gateway dashboard shows that, in just the past week, DeepSeek has surged into the lead for token volumes, now processing just over a third of the tokens passing through the company’s infrastructure. Z.ai — the lab behind the popular GLM-5.2 model — jumped into a respectable fourth place over the same period. 

But if you scroll down to overall token spend, you’ll see Anthropic still accounts for more than half of the overall AI spend on the platform. Given that much of the recent change comes from Anthropic’s own rising prices, the share has dropped slightly over the past month, but not significantly.

OpenRouter tells a similar story, capturing a much larger (but slightly less enterprise-y) segment of the market. DeepSeek V4 Flash is the main winner on overall usage, processing 5.3 trillion tokens weekly. The most popular frontier model, Opus 4.8, handles just over 2 trillion. OpenRouter doesn’t rank models by total spend, but it registers the average token cost for Opus 4.8 as roughly 23x higher than V4 Flash ($1.37 per million tokens, compared to just 6 cents), which would mean Opus was still probably capturing the lion’s share of spending.

BIZAY, a 13-year-old company based in Torres Vedras, Portugal, that provides customized marketing products through an online catalog that helps small businesses produce promotional materials at lower cost, raised a $55 million Series D round led by previous investor Indico Capital Partners, with Lince Capital, Cedrus Capital, and BPF also digging in. EU-Startups has more here.

EDX Markets, a three-year-old startup based in Hoboken, NJ, that operates an institutional crypto marketplace designed to separate trading from custody and settlement through a central clearinghouse, raised a $76 million Series C round led by SBI Holdings. CoinDesk has more here.

Norm AI, a three-year-old New York startup that deploys legal AI agents that help institutional legal teams handle regulated work and supervise other AI agents in high-stakes environments, raised a $120 million Series C round at a $1.2 billion post-money valuation. The deal was led by Khosla Ventures, with Blackstone, Bain Capital Ventures, Craft Ventures, Coatue, Vanguard, New York Life, and TIAA also pitching in. The company has raised a total of $260+ million. More here.

Oratomic, a startup founded this year based in Pasadena, CA, that develops quantum computing technology aimed at running Shor’s algorithm for practical large-scale computation, raised a $300 million Series A round led by Khosla Ventures, with Bezos Expeditions, Index Ventures, General Catalyst, Lowercarbon Capital, Bain Capital, Formation, and Nebular also stepping up. Traders Union News has more here.

Proxima Fusion, a six-year-old Munich startup that is developing stellarator-based fusion power plants, raised a $469.8 million round at a $2.7 billion post-money valuation. The deal was co-led by XTX Ventures and East X Ventures, with RWE, Google, KfW Capital, SPRIND, and Burda Principal Investments as well as previous investors Plural, UVC Partners, Balderton, Cherry Ventures, DST Global Partners, Brevan Howard Macro Venture, Lightspeed, DTCF, redalpine, Leitmotif, Elaia, CDP Venture Capital, Bayern Kapital, and the EIC Fund also piling on. The company has raised a total of $743+ million, including $108.6 million in public grants. More here.

Quaise Energy, an eight-year-old Houston startup that develops millimeter-wave drilling systems and geothermal power projects for utility-scale electricity generation from superhot rock, raised a $144 million Series B round led by Prelude Ventures, with JERA and Idemitsu as well as previous investor Safar Partners also taking part. The company has raised a total of $230 million. More here.

Super, a 10-year-old San Francisco company that helps consumers save on travel, entertainment, financial services, and daily purchases through discounts, cash back, cash advances, and credit-building tools, raised a $65 million Series D round at a $1.2 billion post-money valuation. The deal was led by TPG. More here.

Agave, a four-year-old San Francisco startup that automates accounting, invoice processing, expense management, vendor compliance, and financial reporting for construction contractors using their existing systems, raised a $15 million Series A round led by Accel, with Y Combinator also buying in. The company has raised a total of $20+ million. More here.

Bidbus, a five-year-old Los Angeles startup that runs a digital marketplace where dealerships compete to buy consumers’ used cars, raised a $15 million Series A round led by Ibex Investors, with Mucker Capital, FJ Labs, Motley Fool Ventures, Data Point Capital, Walter Ventures, and Yossi Levi also participating. TechCrunch has more here.

Klinic, a five-year-old startup based in Frisco, TX, that provides software and services to help specialty healthcare providers manage patient acquisition, intake, medical records, care coordination, revenue cycle management, prior authorizations, and chart auditing, raised a total of $24 million in combined seed and Series A funding co-led by Proofpoint Capital and I2BF Global Ventures. Behavioral Health Business has more here.

Monogram, a one-year-old startup based in San Mateo, CA, that is developing a general-purpose AI app that generates visual, interactive interfaces instead of text-only chat responses, raised a $40 million seed round co-led by DST Global and Lux Capital, with Conviction, SOMA Capital, Gradient Ventures, e2vc, and Maxitech also opting in. More here.

Sherpa AI, a 14-year-old company based in Bilbao, Spain, that helps enterprises and governments train and run AI models together without exposing sensitive data, raised an $18 million round. Investors included Forgepoint Capital as well as previous investors Mundi Ventures, Ekarpen, Allegra Holdings, and SETT. More here.

Tangos, a one-year-old Tel Aviv startup that uses AI to automate financial crime investigations for financial institutions, government agencies, and intelligence organizations, raised a $20 million seed round led by Red Dot Capital Partners, with Leaders Fund, Clarim, Venture Israel, SignalFire, Clutch Capital, Selah Ventures, and Bright Data also participating. SiliconANGLE has more here.

Adaptive Insurance, a two-year-old Austin startup that provides specialty insurance products that help businesses and homeowners cover climate-related gaps left by traditional policies, raised a $5 million round. Investors included IAG Firemark Ventures, Sunna Ventures, Room & Pillar, and Connecticut Innovations as well as previous investors Congruent Ventures and Seraphim Space. The company has raised a total of $10 million. More here.

Arc Intelligence, a three-year-old Berlin startup that connects companies’ scattered ERP systems into a single finance data model to automate consolidation, margin reporting, and analysis for CFOs, raised a $4.6 million seed round led by 42CAP, with 468 Capital and IBB Ventures also chiming in. Tech Funding News has more here.

Aylight, a one-year-old Zurich startup that develops laser chips that generate multiple wavelengths from one device to reduce laser counts in AI data center optical links, raised a $5.1 million pre-seed round co-led by Elaia and Swisscom Ventures, with Verve Ventures and Plug and Play also chipping in. Tech Funding News has more here.

Keyfactor, a 25-year-old company based in Independence, OH, that helps enterprises manage machine identities, digital certificates, and cryptographic assets across cloud, on-premises, and hybrid systems, raised a $1+ billion round led by Summit Partners, with previous investors Insight Partners and Sixth Street Growth also engaging. More here.

Luffy AI, a seven-year-old startup based in Abingdon, UK, that develops adaptive AI controllers that let industrial motors and physical equipment tune themselves and reduce energy use, raised a $10.8 million Series A round led by BGF, with MIG Capital as well as previous investors Bow Capital, Chrysalix, Momenta, and UKI2S also investing. EU-Startups has more here.

M1X Global, a three-year-old New York startup that builds blockchain infrastructure that lets governments issue sovereign financial instruments for institutional markets and public financial services, raised a $5.5 million seed round led by Paradigm, with Breed VC also opting in. The company has raised a total of $8.5 million. Crypto News has more here.

Mowito, a two-year-old Bengaluru startup that develops AI software that lets factory robots learn assembly-line tasks from demonstrations instead of hand-coded instructions, raised a $3 million pre-seed round led by Version One Ventures, with All In Capital, Unisol, and iSeed also anteing up. Inc42 has more here.

Savi Security, a 10-month-old Los Angeles startup that uses AI to detect and block consumer scams delivered through texts, emails, and phone calls, raised a $7 million seed round led by Acrew Capital, with Magnify Ventures, TTCER, and Resolute Ventures also participating. TechCrunch has more here.

TaiSan, a four-year-old startup based in Cambridge, UK, that develops lighter solid-state sodium-ion batteries for e-bikes, scooters, and power tools, raised a $6.3 million seed round co-led by Eos Advisory and Mercia Ventures, with AFI Ventures, EverQuest Capital Partners, Adeline Arts & Science, and Techmind as well as previous investors InnoEnergy, TSP Ventures, Exergon, and Heartfelt also participating. Tech Funding News has more here.

Whering, a six-year-old London startup that helps people digitize their wardrobes and create outfits from clothing they already own for daily dressing and travel packing, raised a $7 million seed round co-led by eBay Ventures and Google AI Futures Fund. The company has raised a total of nearly $14 million. More here.

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Chemistry Ventures, a two-year-old San Francisco venture firm founded by former Bessemer Venture Partners, Index Ventures, and Andreessen Horowitz investors, is raising $500 million for its second fund to back early-stage startups building developer tools, fintech, and infrastructure software. TechCrunch has more here.

Pegasus Tech Ventures is launching a $50 million corporate venture fund with Japan’s Ohayo Dairy Products to back food-tech startups using AI, biotech, functional foods, supply-chain tools, and retail technologies as Japanese food brands look to expand globally. More here.

Figma has acquired the team behind Bud, a YC-backed vibe-coding and AI-agent startup formerly called Orchids, as it pushes beyond design into AI-assisted app building, prototyping, and code generation. TechCrunch has more here.

Standard Nuclear, a two-year-old startup based in Oak Ridge, TN, that produces advanced nuclear fuel for small modular reactors and microreactors, is seeking up to $383 million in its U.S. IPO at a valuation of as much as $3.55 billion. The company has raised a total of $182 million from investors like Decisive Point, Chevron Technology Ventures, StepStone Group, XTX Ventures, and Andreessen Horowitz. Reuters has more here.

U.N. Secretary-General António Guterres called for an international ban on lethal autonomous weapons, calling “killer robots” morally repugnant and reviving a debate that helped fuel Anthropic’s clash with the Pentagon over whether its models could be used for autonomous weapons or domestic surveillance. The Wall Street Journal has more here.

Sun Valley’s annual Allen & Co. retreat is drawing a heavy tech and AI roster this year, with Jeff Bezos, Mark Zuckerberg, Tim Cook, Sundar Pichai, Sam Altman, Bret Taylor, Greg Brockman, Dario Amodei, and Alex Karp expected in Idaho for the famously private dealmaking conference. Forbes has more here.

OpenAI and Anthropic are showering startups with free AI credits and discounts, in some cases worth millions of dollars, as they race to lock young companies into their models and keep cheaper open-weight rivals – including Chinese models – from gaining share. The Wall Street Journal has more here.

Australia’s under-16 social media ban is failing at the first step, with researchers finding that Instagram, Snapchat, TikTok, YouTube, and other platforms did not seek age proof from any of 50 test accounts that claimed to be 16. Reuters has more here.

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