Apple Alleges OpenAI Stole iPhone Secrets

Friday! [Lights briar pipe.] Have a great weekend. See you in a few days.:)

Top News

Apple has filed suit against OpenAI and two former Apple employees – including OpenAI hardware chief Tang Tan – alleging they stole confidential information to help OpenAI develop consumer devices that could compete with the iPhone. TechCrunch has more here.

European Union regulators have told Meta to make Instagram and Facebook less addictive by removing features such as infinite scroll and autoplaying videos, adding more screen-time breaks, and making recommendation algorithms less engagement-driven or risk fines of up to 6% of global revenue. The New York Times has more here.

Tencent is in talks to become the largest shareholder in Manus as investors work to unwind Meta’s $2 billion acquisition of the AI agent startup after Beijing ordered the deal reversed. The Financial Times has more here.

China successfully launched and recovered the first stage of its Long March 10B rocket using a sea platform with nets, a breakthrough in its effort to build reusable rockets and narrow SpaceX’s lead in satellite launches. The New York Times has more here.

Filing: College App Fizz Accuses VC of Sharing Confidential Startup Information with Rival Sidechat

By Sarah Perez

A years-long lawsuit between the college-focused social app Fizz and rival Sidechat over unfair competition practices has taken an interesting turn. In a new filing, Fizz is accusing investor Jerry Lu, who is with venture capital firm Maveron, of meeting with Fizz under the guise of exploring a potential investment, but then turning around and sharing Fizz’s non-public information with its rival, Sidechat.

The new allegations raise questions about the role venture capitalists play in competitive startup markets, as founders routinely share confidential business information while fundraising, trusting that investors won’t pass it along to competitors. Some VCs continue to request updates from startups they passed on, founders have said.

Both Fizz and Sidechat are in the same business: anonymous online forums and apps where college students can network and gossip. As a result, competition for students’ attention is fierce. However, not all universities see the apps as providing value to their students. The UNC system banned the apps from its campuses across North Carolina, citing the bullying and bad behavior that take place on these anonymous social platforms. On Fizz, for example, students can simply post an individual’s name, inviting peers to opine publicly about the person.

Fizz originally sued Sidechat in 2023, alleging a range of abuses, including attempts to disrupt its launches at various college campuses, spreading false rumors about hackers accessing Fizz’s data, sending false spam reports to Instagram, and paying students to delete Fizz’s app.

The original complaint didn’t name Lu, as his involvement wasn’t known at the time.

Big-But-Not-Crazy-Big Fundings

Hippo Harvest, a seven-year-old startup based in Pescadero, CA, that grows USDA-certified organic leafy greens in robotic greenhouses that monitor, tend, and harvest plants for grocery retailers, raised a $30 million Series C round led by Cox Farms, with Collaborative Fund and the Fresh Investment Club as well as previous investors Congruent Ventures and Hawthorne Food Ventures also anteing up. AI Insider has more here.

Marker, a one-year-old London startup that helps writers use AI to develop ideas, draft, revise, and collaborate on blogs, memos, and longer manuscripts, raised a $13 million seed round led by Index Ventures, with LocalGlobe also chiming in. More here.

Skapion, a one-year-old startup based in Washington, DC, that is building mobile counter-drone systems that detect, engage, and neutralize coordinated drone swarms for military forces and critical infrastructure, raised a $36 million seed round co-led by UP.Partners and Khosla Ventures, with Stratos Ventures as well as previous investors TBD VC, qFund, and Fusion VC also chipping in. Unmanned Airspace has more here.

Smaller Fundings

Aria, a seven-year-old Paris startup that provides embedded invoice financing through B2B marketplaces and ERP systems so suppliers are paid upfront while buyers keep flexible payment terms, raised an $8 million Series A extension led by 115K, with Sienna and Montpensier Arbevel as well as previous investor 13books Capital also participating. PYMNTS has more here.

Kapture CX, a 12-year-old Bengaluru company that automates enterprise customer support and service workflows with industry-specific AI agents built for complex operations, raised a $10 million round led by Bajaj Finserv Ventures, with Cactus Venture Partners and India Alternatives also buying in. More here.

Exits

Mercor has acquired Deeptune, a four-year-old New York startup that builds simulation environments where AI agents can practice enterprise tasks, after Mercor founder Brendan Foody quietly invested in Deeptune’s $43 million Series A just three months ago. Fortune has more here.

Going Public

Fast-fashion retailer Shein has finally won Chinese regulatory approval for a Hong Kong IPO after failed attempts to list in New York and London, clearing a path to a possible September or October debut at a sharply reduced $40 billion to $50 billion valuation (it was valued at $100 billion four years ago). Reuters has more here.

People

OpenAI president Greg Brockman is taking over the company’s product, enterprise, go-to-market, and compute efforts after Fidji Simo stepped down, consolidating power under Sam Altman’s longtime co-founder as OpenAI tries to justify an $852 billion valuation ahead of a prospective IPO. CNBC has more here.

Post-Its

Essential Reads

OpenAI and Google have supplied AI models to Singapore-based subsidiaries of Alibaba, Baidu, and Tencent, exposing a loophole in U.S. efforts to slow China’s AI development because the sales are legal even though the parent companies are blacklisted by the Pentagon. The Financial Times has more here.

Netflix is exploring live channels and bundles with rival streaming services such as Peacock as it tries to reverse signs of declining subscriber engagement and keep viewers watching longer amid growing competition from Disney, HBO Max, YouTube, Tubi, and Roku. The Wall Street Journal has more here.

Testing by Bloomberg – backed up by Capital One Shopping and independent researcher Ben Edelman – has found that Phia, a shopping app co-founded by Phoebe Gates, claimed credit for online sales it didn’t originate by opening background tabs and injecting its own affiliate codes. The company says the issue has been fixed. Bloomberg has more here.

The Atlantic argues that America is becoming “postliterate,” with fewer than half of adults reading a book in 2022, daily pleasure reading falling from 28% of Americans in 2004 to 16% in 2023, and nearly 30% of adults now unable to paraphrase or make inferences from a multipage document. More here.