Apple Parts Ways with Its AI Chief

StrictlyVC is in Palo Alto Wednesday night, and we couldn’t be more excited to see some of you. We'll be talking with Pat Gelsinger (who just did that FT lunch, where he opened with a prayer) and Nicholas Kelez from xLight (which announced today that the U.S. government is now a major investor — more on that newsy tie-up below). These conversations — along with a few others — should give you a pretty good sense of what's coming in 2026!

Top News

In a carefully worded announcement today, Apple said John Giannandrea, who has been the company’s AI chief since 2018, is stepping down. He’ll stick around through spring as an adviser. TechCrunch has more here.

India’s move to force all new phones to ship with an undeletable government security app puts Apple in a bind, signaling another clash with regulators as it tries to protect its tightly controlled device policies in a market of more than one billion users. Reuters has more here.

OpenAI is taking an ownership stake in Thrive Holdings, the Thrive Capital-backed roll-up that is buying and modernizing accounting and IT services firms (and is also an investor in OpenAI). The New York Times has more here.

Shopify suffered a major Cyber Monday outage that locked some merchants out of their admin and point-of-sale systems, a costly stumble on a day expected to drive more than $14 billion in U.S. online sales. CNBC has more here.

What Does it Mean When Uncle Sam is One of Your Biggest Shareholders? Chip Startup xLight is About to Find Out

By Connie Loizos

The Trump administration has agreed to inject up to $150 million into xLight, a semiconductor startup developing advanced chip-making technology, marking the third time the U.S. government has taken an equity position in a private startup and further expanding a controversial strategy that has put Washington on the cap tables of American companies.

The Wall Street Journal reported Monday that the Commerce Department will provide the funding to xLight in exchange for an equity stake that will likely make the government the startup’s largest shareholder. The deal uses funding from the 2022 Chips and Science Act and represents the first Chips Act award in President Trump’s second term, though it remains preliminary and subject to change.

Previous government equity investments under the Trump administration include publicly traded companies Intel, MP Materials, Lithium Americas, and Trilogy Metals. Two rare earths startups also secured funding in exchange for equity from the Commerce Department last month.

You can imagine how this is all going over in Silicon Valley, where the libertarian ethos runs deep. At TechCrunch’s signature Disrupt event back in October, Sequoia Capital’s Roelof Botha jokingly offered what might be the understatement of the year when asked about the trend: “[Some] of the most dangerous words in the world are: ‘I’m from the government, and I’m here to help.’”

Other VCs have similarly expressed concerns, if quietly, about what it means when their portfolio companies are suddenly competing against startups backed by the U.S. Treasury, or even when they find themselves sitting across the table from government representatives at board meetings.

The four-year-old, Palo Alto, California, company at the center of this particular experiment is trying to do something genuinely audacious in semiconductor manufacturing. XLight wants to build particle accelerator-powered lasers — machines the size of a football field, mind you — that would create more powerful and precise light sources for making chips.

If it works, it could challenge the near-total dominance of ASML, the Dutch giant that has been publicly traded since 1995 and currently enjoys an absolute monopoly on extreme ultraviolet lithography machines. (Its shares have surged 48.6% this year.

The CEO of xLight is Nicholas Kelez, a quantum computing and government labs veteran who presumably knows his way around a particle accelerator. Helping this venture as executive chairman is Pat Gelsinger, the former Intel CEO who was shown the door late last year after his ambitious manufacturing revival plans failed to materialize.

“I wasn’t done yet,” Gelsinger — a general partner at Playground Global, which led the startup’s $40 million funding round this summer — told the Journal, adding that the effort is “deeply personal” to him.

Indeed, xLight doesn’t just want to compete with ASML but to go much further. While ASML’s machines work at wavelengths around 13.5 nanometers, xLight is targeting 2 nanometers. Gelsinger claims the technology could boost wafer processing efficiency by 30% to 40% while using far less energy.

As it happens, both Kelez and Gelsinger will be holding forth at TechCrunch’s StrictlyVC event on Wednesday night in Palo Alto, where the government’s backing will no doubt come up. (You can still nab a seat here.)

Massive Fundings

Black Forest Labs, a two-year-old startup based in Freiburg, Germany, that makes foundation AI models for generating and editing images, raised a $300 million Series B round at a $3.25 billion valuation. The deal was co-led by Salesforce Ventures and AMP,Temasek, Air Street Capital, Bain Capital Ventures, StepStone Group, Visionaries Club, S32 Ventures, Notion Capital, the European Tech Collective, Shutterstock, QuantumLight Capital, Canva, Figma Ventures, Cherry, Adobe Ventures, Deutsche Telekom’s T.Capital, LEA Partners, SV Angel, Lux Capital, Samsung Next, and Headline as well as previous investors Andreessen Horowitz, BroadLight Capital, Creandum, Earlybird VC, General Catalyst, Northzone, and NVIDIA also piling on. The company has raised a total of $450+ million. TechCrunch has more here.

Protego Biopharma, a 15-year-old San Diego company that develops small-molecule drugs to treat amyloid and other protein misfolding diseases, raised a $130 million Series B round co-led by Novartis Venture Fund and Forbion, with Omega Funds, Droia Ventures, YK Bioventures, and Digitalis Ventures as well as previous investors Vida Ventures, MPM BioImpact, Lightspeed Venture Partners, and Scripps Research also contributing. BioPharma Dive has more here.

Quantum Systems, a 10-year-old Munich, Germany company that makes surveillance drones, raised $209.1 million at a $3 billion valuation. The deal was led by Balderton Capital. Tech Funding News has more here.

Big-But-Not-Crazy-Big Fundings

Gravis Robotics, a four-year-old Zürich startup that develops autonomy kits for earthmoving vehicles, raised a $23 million Series A round co-led by IQ Capital and Zacua Ventures, with Pear VC, Imad, Sunna Ventures, Armada Investment, and Holcim also investing. SiliconANGLE has more here.

Nevis, a one-year-old New York startup that provides an AI platform for wealth management, raised a $35 million Series A round co-led by ICONIQ and Ribbit Capital, with previous investor Sequoia Capital also anteing up. The company has raised a total of $40 million. More here.

StirlingX, a two-year-old London startup that provides drone operations and data intelligence, raised an $11 million seed extension led by RCM Private Markets Fund, with GALLOS Technologies and ONE9 also taking part. DroneLife has more here.

Tutor Intelligence, a five-year-old startup based in Watertown, MA, that builds warehouse robots, raised a $34 million Series A round led by Union Square Ventures, with Fundomo and previous investor Neo also participating. The company has raised a total of $42 million. SiliconANGLE has more here.

Smaller Fundings

Arctus Aerospace, a two-year-old Bangalore startup that builds high-altitude autonomous aircraft for earth observation, raised a $2.6 million pre-seed round. Version One Ventures was the deal lead, with South Park Commons, gradCapital, Balaji Srinivasan, and Srinivas Narayan also opting in. StartupRise has more here.

BHub, a four-year-old São Paulo startup that provides AI-supported accounting services for Brazilian entrepreneurs, raised a $10 million round extension. Investors included Next Billion Capital Partners as well as previous investors Valor Capital, Monashees, and Hedosophia. The company has raised a total of $55+ million. More here.

Clipbook, a two-year-old Boston startup that helps companies monitor their media coverage across news, podcasts, and social channels, raised a $3 million seed round co-led by Mark Cuban, Commonweal Ventures, and Carpenter Capital. TechCrunch has more here.

ExploMar, a five-year-old Shanghai startup that develops electric propulsion systems for boats, raised a $10 million Series A round. The round was co-led by unnamed private equity funds and a listed company in China, with previous investor DCM Ventures also joining in. More here.

Minitap, a San Francisco startup founded this year that helps engineering teams build mobile features with AI, raised a $4.1 million seed round co-led by Moxxie Ventures and Mercuri, with EWOR, Tekton Ventures, and Amigos Venture Capital also stepping up. Forbes has more here.

Ranketta, a one-year-old startup based in Brno, Czech Republic, that helps brands understand and improve their presence in AI search and shopping results, raised a $1.3 million pre-seed round led by Lighthouse Ventures, with Gi21 Capital also participating. EU-Startups has more here.

New Funds

Indico Capital Partners, a six-year-old Lisbon VC firm that focuses on enterprise SaaS, AI, deep tech, and Southern European founders, is targeting €125 million for its third fund. More here.

SecondQuarter Ventures, a five-year-old Sydney VC firm that focuses on venture secondaries across Australia and New Zealand, is in the market to raise its third fund. More here.