Pulse News

**Why is Google’s Owner Developing AI Outside of Google?; DeepSeek Gets Microsoft’s Attention**

By Stephanie Palazzolo

Mar 10, 2025, 7:00am PDT

Larry Page. Photo via Getty

ServiceNow is buying AI startup Moveworks for $2.85 billion, the enterprise software firm announced first thing this morning, an effort by ServiceNow to get a jump on agent-powered services. We included Moveworks in our Generative AI Takeover List, which you can see here. And now on to the rest of the column...

We've written a lot about how investors have warmed to AI applications businesses, in part because of how much faster those companies' revenues have grown compared to other types of apps that launched in the past decade. Many of these AI app businesses focus on specific verticals, like law or healthcare. One industry that's gotten attention recently is manufacturing—specifically, attention from Larry Page, a Google cofounder whose new AI manufacturing startup was scooped by Jessica last week. Page's company, Dynatomics, aims to use large language models to design objects that could then be manufactured. Perhaps it's a kind of Autodesk for the AI age.

Vertical-specific AI is attractive for a variety of reasons. AI models must be customized with special data—for a lawyer, examples of editing legal contracts would be ideal, or for a doctor, medical test results—that can be hard to get. And many of these vertical-specific firms are often niche enough that large model developers like OpenAI and Anthropic aren't as tempted to go after them. That's led to an explosion of these sorts of startups. VCs I spoke with in San Francisco last month told me they've been inundated with pitches for AI software targeting seemingly every industry, from compliance to financial services.

Page's choice to pursue an AI design startup is especially interesting, though. He's created startups outside of Google before, but they've tended to be more moonshot projects that are too risky even for Alphabet, like flying vehicle producer Kittyhawk. (Chris Anderson, the former chief technology officer of Kittyhawk, is running Dynatomics.) AI for design, though, seems quite within Google's purview, especially since it and other AI developers have been increasingly moving into applications.

We'll be curious to learn if there's more going on behind the scenes, like an agreement for Dynatomics to use Google Cloud or Google's Gemini AI models, given Page's ties. (He controls Google together with fellow cofounder Sergey Brin, who is working deep in the bowels of the Gemini group right now.) Still, Google employees could be wondering why Google's biggest shareholder chose to pursue AI software elsewhere especially when Google itself is still searching for a killer application of the technology.

**DeepSeek Has Microsoft's Attention**

Meta Platforms isn't the only big U.S. tech company that's trying out AI models from the Chinese startup DeepSeek. As it turns out, Microsoft has also been testing out ways to use DeepSeek's models in its Copilot chatbot, with an eye on swapping out OpenAI's models, I reported on Friday. Microsoft has several good reasons to experiment with DeepSeek—for one, DeepSeek's models perform nearly as well as OpenAI's on several tasks while being far cheaper to run, which could help Microsoft improve its margins by bringing down the cost of compute needed to run its AI apps. Microsoft also wants to be more self-sufficient after years of relying primarily on OpenAI for its AI models. (Microsoft also has been testing models from Meta and XAI).

Embracing DeepSeek would fit with CEO Satya Nadella's grand vision for AI: models will only get cheaper to run, and companies selling AI applications will win based on the merits of their applications, not the underlying AI. Nadella said in a recent interview that "the open-source alternative" to companies like OpenAI means companies like OpenAI won't become monopolies. Because DeepSeek's models are open source, companies are free to download them and run them—as well as tweak them—without becoming a paying customer of the Chinese startup. There's a good chance that's already happening at large companies running AI apps, and we wouldn't be surprised if more companies followed Microsoft's suit.

**Deals and Debuts**

See The Information's Generative AI Database for an exclusive list of private companies and their investors.

Most Popular

- Exclusive: Larry Page Has a New AI Startup

- AI Agenda: OpenAI Plots Charging $20,000 a Month For PhD-Level Agents

- Exclusive: CoreWeave in Talks to Buy AI Startup Weights & Biases For Around $1.7 Billion

- AI Agenda: The Math Behind a $10 Billion Valuation For Cursor

Anysphere, the maker of coding assistant Cursor, is talking with investors about a round that would value it at $10 billion. The startup is generating more than $150 million in annualized revenue. ServiceNow announced that it is buying Moveworks, which develops enterprise-focused automation and AI tools, for $2.85 billion in a mix of cash and stock. Shield AI, which builds drones and other AI-powered military systems, raised $240 million in Series F funding at a $5.3 billion valuation from L3Harris, Hanwha Aerospace, Andreessen Horowitz, U.S. Innovative Technology and Washington Harbour. Reflection AI, which is making AI-powered coding agents, raised $130 million in funding from Lightspeed Venture Partners, Sequoia Capital and CRV. Nirvana, an AI startup focused on insurance for truckers, raised $80 million in Series C funding at a $830 million post-investment valuation led by General Catalyst, with participation from Lightspeed Venture Partners and Valor Equity Partners. Axelera AI, which makes chips to run AI models, will receive up to $66.7 million in funding from the EU. Grain, which makes AI software for hedging against changes in foreign exchange rates, raised over $50 million in funding led by Bain Capital Ventures. Freed, which is making an AI scribe to assist doctors, raised $30 million in a Series A funding round led by Sequoia Capital. Firsthand, which is making AI software to help brands reach consumers, raised $26 million in Series A funding led by Radical Ventures. Ataraxis AI, which uses AI for cancer diagnosis, raised $20.4 million in a Series A funding round led by AIX Ventures. Zocks, which develops an AI meeting assistant for financial advisors, raised $13.8 million in Series A funding led by Motive Ventures, with participation from Lightspeed Venture Partners, Expanse Venture Partners, Entrée Capital and 14Peaks. Alceberg, a New York City-based AI governance startup, raised $10 million in seed funding from SYN Ventures and Sprout & Oak. Faireez, which develops AI-powered software for hotel-style housekeeping for rentals, raised $7.5 million in seed funding led by Aristagora VC. Outmarket AI, which develops AI software for the insurance industry, raised $4.7 million in seed funding led by Fika Ventures, with participation from TTV and Dash Fund. Intangible, which makes AI-powered tools for creating 3D content, raised $4 million in funding from a16z Speedrun, Crosslink Capital, Karman Ventures and angel investors. Dubformer, which is developing AI technology for dubbing videos, raised $3.6 million in seed funding led by Almaz Capital.

The U.S. is considering banning DeepSeek from government devices, the Wall Street Journal reported. XAI acquired a 1 million-square-foot property in Southwest Memphis to expand its AI data center footprint. Meta will add new voice features to Llama 4, which is expected to be released in the coming weeks, the Financial Times reported. Google released an experimental embedding model for text, Gemini Embedding, to its Gemini developer API.

Thank you for reading the AI Agenda Newsletter! I'd love your feedback, ideas and tips: stephanie@theinformation.com. If you think someone else might enjoy this newsletter, please pass it forward or they can sign up here.

Stephanie Palazzolo is a reporter at The Information covering artificial intelligence. She previously worked at Business Insider covering AI and at Morgan Stanley as an investment banker. Based in New York, she can be reached at stephanie@theinformation.com or on Twitter at @steph_palazzolo.