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Good hype for fusion, bad buzz for YC

Welcome to Startups Weekly — your weekly recap of everything you can’t miss from the world of startups. Want it in your inbox every Friday? Sign up here.

Hype can be good or bad. This week, we’ve seen startups on both sides of that fence — and being on the good side warranted large funding rounds.

Most interesting startup stories from the week

Artist’s rendering of Proxima Fusion’s nuclear power plant.
Image Credits:Proxima Fusion

As the week comes to a close, it is time to tally the merits and demerits.

Sparkle points: A peer-reviewed journal highlighted plans from German startup Proxima Fusion, lending new credibility to its concept and design for a working fusion power plant that can operate reliably and continuously.

Oops points: Y Combinator deleted its posts about the demo from YC W25 company Optifye.ai after it went viral, and not in a good way. The startup claims to be building “Al performance monitoring for factory workers,” but others called it “sweatshops-as-a-service.”

Breakthrough points: Palo Alto-based startup Inception claims to have developed a diffusion-based large language model (DLM). Diffusion models that already exist are mainly used to create images, video, and audio, while Inception hopes to compete with LLMs.

Most interesting VC and funding news this week

Quantum Machines founders
Image Credits:Ilya Melnikov / Quantum Machines under a license.

This week, several startups secured funding rounds that were notably large for their respective stages, and there are new funds ready to be deployed at the growth stage.

Record round: Israeli startup Quantum Machines secured one of the biggest funding rounds a quantum computing company raised to date with its $170 million Series C led by PSG Equity with participation from Intel Capital, Red Dot Capital Partners, and existing investors.

Full circle: Shop Circle, which makes an app suite for e-commerce, raised a $60 million Series B round that also financed the acquisition of Aiden, an AI-powered “guided-selling” software maker.

Magic arms: Polish startup Nomagic, which makes robotic arms for logistics operations, raised a $44 million Series B led by the VC arm of the European Bank for Reconstruction and Development (EBRD). It plans to use some of the funding to reach customers in North America.

Magic touch: Taktile, a New York-based startup that helps fintechs build automated decision-making workflows, closed a $54 million Series B led by Balderton Capital with participation from Index Ventures, Tiger Global, YC, Prosus Ventures, and Visionaries Club. 

Idea relay: Relay raised a $35 million Series A round led by London-based VC Plural to bring the “asset-free” last-mile parcel delivery model from Asia to Europe, in an approach that also reduces energy consumption and relies on e-bikes.

Loved: Lovable, a fast-growing app-building AI platform coming out of Sweden, secured $15 million in a pre-Series A round led by Creandum. It also said it reached $17 million in annual recurring revenue after scaling to 30,000 paying customers with only $2 million spent.

European growth: Private equity firm Thoma Bravo closed an inaugural $1.9 billion European fund to deepen its presence in the region and take fresh equity stakes in midsized software companies across the continent.

Cambridge growth: Cambridge Innovation Capital (CIC), a British fund that invests exclusively in the ecosystem around the University of Cambridge, launched a $126 million opportunity fund.

Last but not least

Flag of Ukraine in Lviv City
Image Credits:Anna Fedorenko / Getty Images

This week marked the third anniversary of Russia’s invasion of Ukraine. This spurred a wave of Ukrainian dual-use and defense tech startups innovating on and off the battlefield, and TechCrunch rounded up several of them here.

Last week’s newsletter included an error; Augury first achieved unicorn status in 2021.

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Volkswagen’s cheapest EV ever is the first to use Rivian software

Volkswagen’s ultra-cheap EV called the ID EVERY1 — a small four-door hatchback revealed Wednesday — will be the first to roll out with software and architecture from Rivian, according to a source familiar with the new model.

The EV is expected to go into production in 2027 with a starting price of 20,000 euros ($21,500). A second EV called the ID.2all, which will be priced in the 25,000 euro price category, will be available in 2026. Both vehicles are part of the automaker’s new of category electric urban front-wheel drive cars that are being developing under the so-called “Brand Group Core” that makes up the volume brands in the VW Group. And both vehicles are for the European market.

The EVERY1 will be the first to ship with Rivian’s vehicle architecture and software as part of a $5.8 billion joint venture struck last year between the German automaker and U.S. EV maker. The ID.2all is based on the E3 1.1 architecture and software developed by VW’s software unit Cariad.

VW didn’t name Rivian in its reveal Wednesday, although there were numerous nods to next-generation software. Kai Grünitz, member of the Volkswagen Brand Board of Management responsible for Technical Development, noted it would be the first model in the entire VW Group to use a “fundamentally new, particularly powerful software architecture.”

“This means the future entry-level Volkswagen can be equipped with new functions throughout its entire life cycle,” he said. “Even after purchase of a new car, the small Volkswagen can still be individually adapted to customer needs.”

Sources who didn’t want to be named because they were not authorized to speak publicly, confirmed to TechCrunch that Rivian’s software will be in the ID EVERY1 EV. TechCrunch has reached out to Rivian and VW and will update the article if the companies respond.

The new joint venture provides Rivian with a needed influx of cash and the opportunity to diversify its business. Meanwhile, VW Group gains a next-generation electrical architecture and software for EVs that will help it better compete. Both companies have said that the joint venture, called Rivian and Volkswagen Group Technologies, will reduce development costs and help scale new technologies more quickly.

The joint venture is a 50-50 partnership with co-CEOs. Rivian’s head of software, Wassym Bensaid, and Volkswagen Group’s chief technical engineer, Carsten Helbing, will lead the joint venture. The team will be based initially in Palo Alto, California. Three other sites are in development in North America and Europe, the companies have previously said.

image credits: VW

“The ID. EVERY1 represents the last piece of the puzzle on our way to the widest model selection in the volume segment,” Thomas Schäfer, CEO of the Volkswagen Passenger Cars brand and Head of the Brand Group Core, said in a statement. “We will then offer every customer the right car with the right drive system–including affordable all-electric entry-level mobility. Our goal is to be the world’s technologically leading high-volume manufacturer by 2030. And as a brand for everyone–just as you would expect from Volkswagen.”

The Volkswagen ID EVERY1 is just a concept for now — and with only a few details attached to the unveiling. The concept vehicle reaches a top speed of 130 km/h (80 miles per hour) and is powered by a newly developed electric drive motor with 70 kW, according to Volkswagen. The German automaker said the range on the EVERY1 will be at least 250 kilometers (150 miles). The vehicle is small but larger than VW’s former UP! vehicle. The company said it will have enough space for four people and a luggage compartment volume of 305 liters.

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The hottest AI models, what they do, and how to use them

AI models are being cranked out at a dizzying pace, by everyone from Big Tech companies like Google to startups like OpenAI and Anthropic. Keeping track of the latest ones can be overwhelming. 

Adding to the confusion is that AI models are often promoted based on industry benchmarks. But these technical metrics often reveal little about how real people and companies actually use them. 

To cut through the noise, TechCrunch has compiled an overview of the most advanced AI models released since 2024, with details on how to use them and what they’re best for. We’ll keep this list updated with the latest launches, too.

There are literally over a million AI models out there: Hugging Face, for example, hosts over 1.4 million. So this list might miss some models that perform better, in one way or another. 

AI models released in 2025

Cohere’s Aya Vision

Cohere released a multimodal model called Aya Vision that it claims is best in class at doing things like captioning images and answering questions about photos. It also excels in languages other than English, unlike other models, Cohere claims. It is available for free on WhatsApp.

OpenAI’s GPT 4.5 ‘Orion’

OpenAI calls Orion their largest model to date, touting its strong “world knowledge” and “emotional intelligence.” However, it underperforms on certain benchmarks compared to newer reasoning models. Orion is available to subscribers of OpenAI’s $200 a month plan.

Claude Sonnet 3.7

Anthropic says this is the industry’s first ‘hybrid’ reasoning model, because it can both fire off quick answers and really think things through when needed. It also gives users control over how long the model can think for, per Anthropic. Sonnet 3.7 is available to all Claude users, but heavier users will need a $20 a month Pro plan.

xAI’s Grok 3

Grok 3 is the latest flagship model from Elon Musk-founded startup xAI. It’s claimed to outperform other leading models on math, science, and coding. The model requires X Premium (which is $50 a month.) After one study found Grok 2 leaned left, Musk pledged to shift Grok more “politically neutral” but it’s not yet clear if that’s been achieved.

OpenAI o3-mini

This is OpenAI’s latest reasoning model and is optimized for STEM-related tasks like coding, math, and science. It’s not OpenAI’s most powerful model but because it’s smaller, the company says it’s significantly lower cost. It is available for free but requires a subscription for heavy users.

OpenAI Deep Research

OpenAI’s Deep Research is designed for doing in-depth research on a topic with clear citations. This service is only available with ChatGPT’s $200 per month Pro subscription. OpenAI recommends it for everything from science to shopping research, but beware that hallucinations remain a problem for AI.

Mistral Le Chat

Mistral has launched app versions of Le Chat, a multimodal AI personal assistant. Mistral claims Le Chat responds faster than any other chatbot. It also has a paid version with up-to-date journalism from the AFP. Tests from Le Monde found Le Chat’s performance impressive, although it made more errors than ChatGPT.

OpenAI Operator

OpenAI’s Operator is meant to be a personal intern that can do things independently, like help you buy groceries. It requires a $200 a month ChatGPT Pro subscription. AI agents hold a lot of promise, but they’re still experimental: a Washington Post reviewer says Operator decided on its own to order a dozen eggs for $31, paid with the reviewer’s credit card.

Google Gemini 2.0 Pro Experimental

Google Gemini’s much-awaited flagship model says it excels at coding and understanding general knowledge. It also has a super-long context window of 2 million tokens, helping users who need to quickly process massive chunks of text. The service requires (at minimum) a Google One AI Premium subscription of $19.99 a month.

AI models released in 2024

DeepSeek R1

This Chinese AI model took Silicon Valley by storm. DeepSeek’s R1 performs well on coding and math, while its open source nature means anyone can run it locally. Plus, it’s free. However, R1 integrates Chinese government censorship and faces rising bans for potentially sending user data back to China.

Gemini Deep Research

Deep Research summarizes Google’s search results in a simple and well-cited document. The service is helpful for students and anyone else who needs a quick research summary. However, its quality isn’t nearly as good as an actual peer-reviewed paper. Deep Research requires a $19.99 Google One AI Premium subscription.

Meta Llama 3.3 70B

This is the newest and most advanced version of Meta’s open source Llama AI models. Meta has touted this version as its cheapest and most efficient yet, especially for math, general knowledge, and instruction following. It is free and open source.

OpenAI Sora

Sora is a model that creates realistic videos based on text. While it can generate entire scenes rather than just clips, OpenAI admits that it often generates “unrealistic physics.” It’s currently only available on paid versions of ChatGPT, starting with Plus, which is $20 a month. 

Alibaba Qwen QwQ-32B-Preview

This model is one of the few to rival OpenAI’s o1 on certain industry benchmarks, excelling in math and coding. Ironically for a “reasoning model,” it has “room for improvement in common sense reasoning,” Alibaba says. It also incorporates Chinese government censorship, TechCrunch testing shows. It’s free and open source.

Anthropic’s Computer Use

Claude’s Computer Use is meant to take control of your computer to complete tasks like coding or booking a plane ticket, making it a predecessor of OpenAI’s Operator. Computer use, however, remains in beta. Pricing is via API: $0.80 per million tokens of input and $4 per million tokens of output.

x.AI’s Grok 2 

Elon Musk’s AI company, x.AI, has launched an enhanced version of its flagship Grok 2 chatbot it claims is “three times faster.” Free users are limited to 10 questions every two hours on Grok, while subscribers to X’s Premium and Premium+ plans enjoy higher usage limits. x.AI also launched an image generator, Aurora, that produces highly photorealistic images, including some graphic or violent content.

OpenAI o1

OpenAI’s o1 family is meant to produce better answers by “thinking” through responses through a hidden reasoning feature. The model excels at coding, math, and safety, OpenAI claims, but has issues deceiving humans, too. Using o1 requires subscribing to ChatGPT Plus, which is $20 a month.

Anthropic’s Claude Sonnet 3.5 

Claude Sonnet 3.5 is a model Anthropic claims as being best in class. It’s become known for its coding capabilities and is considered a tech insider’s chatbot of choice. The model can be accessed for free on Claude although heavy users will need a $20 monthly Pro subscription. While it can understand images, it can’t generate them.

OpenAI GPT 4o-mini

OpenAI has touted GPT 4o-mini as its most affordable and fastest model yet thanks to its small size. It’s meant to enable a broad range of tasks like powering customer service chatbots. The model is available on ChatGPT’s free tier. It’s better suited for high-volume simple tasks compared to more complex ones.

Cohere Command R+

Cohere’s Command R+ model excels at complex Retrieval-Augmented Generation (or RAG) applications for enterprises. That means it can find and cite specific pieces of information really well. (The inventor of RAG actually works at Cohere.) Still, RAG doesn’t fully solve AI’s hallucination problem.

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Not all cancer patients need chemo. Ataraxis AI raised $20M to fix that.

Artificial intelligence is a big trend in cancer care, and it’s mostly focused detecting cancer at the earliest possible stage. That makes a lot of sense, given that cancer is less deadly the earlier it’s detected.

But fewer are asking another fundamental question: if someone does have cancer, is an aggressive treatment like chemotherapy necessary? That’s the problem Ataraxis AI is trying to solve.

The New York-based startup is focused on using AI to accurately predict not only if a patient has cancer, but also what their cancer outcome looks like in 5 to 10 years. If there’s only a small chance of the cancer coming back, chemo can be avoided altogether – saving a lot of money, while avoiding the treatment’s notorious side effects.

Ataraxis AI now plans to launch their first commercial test, for breast cancer, to U.S. oncologists in the coming months, its co-founder Jan Witowski tells TechCrunch. To bolster the launch and expand into other types of cancer, the startup has raised a $20.4 million Series A, it told TechCrunch exclusively.

The round was led by AIX Ventures with participation from Thiel Bio, Founders Fund, Floating Point, Bertelsmann, and existing investors Giant Ventures and Obvious Ventures. Ataraxis emerged from stealth last year with a $4 million seed round.

Ataraxis was co-founded by Witowski and Krzysztof Geras, an assistant professor at NYU’s medical school who focuses on AI.

Ataraxis’ tech is powered by an AI model that extracts information from high-resolution images of cancer cells. The model is trained on hundreds of millions of real images from thousands of patients, Witowski said. A recent study showed Ataraxis’ tech was 30% more accurate than the current standard of care for breast cancer, per Ataraxis.

Long term, Ataraxis has big ambitions. It wants its tests to impact at least half of new cancer cases by 2030. It also views itself as a frontier AI company that builds its own models, touting Meta’s chief AI scientist Yann LeCun as an AI advisor.

“I think at Ataraxis we are trying to build what is essentially an AI frontier lab, but for healthcare applications,” Witowski said. “Because so many of those problems require a very novel technology.”

The AI boom has led to a rush of fundraises for cancer care startups. Valar Labs raised $22 million to help patients figure out their treatment plan in May 2024, for example. There’s also a bevvy of AI-powered drug discovery firms in the cancer space, like Manas AI which raised $24.6 million in January 2025 and was co-founded by Reid Hoffman, the LinkedIn co-founder.

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