Deal of the Week
Nscale is buying Berkeley-founded Anyscale. Mainly, I assume, to add a few more letters to its name 😃.
Alliteration aside (and I’m not sure there is a word for one company acquiring another with such a similar name) this is a serious transaction. The deal values Anyscale at $1.65 billion.
Anyscale was co-founded by Berkeley professor Ion Stocia, whom we previously profiled, alongside CEO Robert Nishihara, a Berkeley PhD. The TL;DR: Stoica is the professor with the golden touch. Although there seems to be a few of these at Berkeley!
So, why is Nscale forking out $1.65 billion?
First, what do these companies actually do? Nscale is a neocloud that rents out GPUs to run AI workloads (check out last week’s deep dive on AI inference companies) while Anyscale is the company behind Ray, the popular open-source software used to run distributed AI workloads across large numbers of machines.
The strategic logic is that we are rapidly moving into the value-added era for neoclouds. Simply renting out GPUs is unlikely to be enough. Neoclouds increasingly want to own more of the software layer, build deeper customer relationships and capture more of the economics around running AI workloads.
At the same time, inference companies are moving in the opposite direction. Berkeley-founded Fireworks AI, for example, plans to use a large portion of its recent funding to buy GPUs and expand its own infrastructure.
The lines between neoclouds and inference providers are therefore blurring fast. Both sides are moving into each other’s territory, and the likely end state is a smaller number of vertically integrated AI infrastructure platforms controlling everything from the GPUs to the software running on top of them.
Congrats to all!
Financial leverage is both a wonderful thing (when results go in your favor) and a brutal lesson in risk management (when they don’t)
Firstly, on a macro level—a while ago, I mentioned how the Korean stock market was on a tear, which at one point took over the UK in terms of market cap. This was mainly due to a run-up in AI stocks. This caused a lot of excitement among retail investors, who took on a lot of leverage to buy more stocks (the government even passed a law to allow single-stock leveraged ETFs in May. They have since apologized for this). The stocks then had a big drop-off, and a lot of margin calls happened. So many happened that some reports say as many a 3-4% of the population may have been margin called, leading to some pretty unhappy outcomes.
And on a more US-centric and micro level, we had the Situational Awareness blow-up. Leopold Aschenbrenner, who started his career at FTX and then OpenAI, was eventually fired (or left OpenAI—recollections may vary 🙂), but published a great piece around the future roadmap of AI and managed to raise a $250M hedge fund on the back of this around two years ago. It is rumoured to have expanded to $45B (the speed of this growth is unheard of in the hedge fund world), and much of what he predicted played out. He had a couple of thousand percent return last year and was up 400%+ YTD in 2026 by July.
This is an unverified account of what happened.
Pretty crazy ride—once Leopold was liquidated, the stocks he was big in quickly jumped 30%+ as word had been going around that he was in trouble. The wolves were circling!
What do I think about this? Two conflicting things.
A 25-year-old building one of the biggest hedge funds in the world is pretty incredible, especially in such a short. If you are the sum of the experiences you live through, that would have been some early ride! Also, the fact that he blew up does not mean he was wrong on AI progress; it just means he was maybe a little aggressive in betting on it happening faster. (that line was said like the AI bull that I am 😆 )
On the less charitable side, if you are running a $45B hedge fund, a core competency should be risk management, which seems to have been lacking here.
Although he did get married this weekend to the Chief of Staff to the founder of Anthropic - so congrats to that. Lets hope love prevails!
If you like this kind of thing, a great read is When Genius Failed, another lesson in risk management. At a high level, the story is about an all-star team (think Nobel Prize winners) at a hedge fund that initially went really well, but essentially took on a ton of leverage and blew up. There is a lot more to it than that, but hopefully that whets the appetite!
If you want to read about one of the best risk managers ever Jim Simons (and a Berkeley alum) - give the The Man Who Solved the Markets a read.
Summary by the #️⃣ & 💰:
4 Berkeley-founded companies funded
$578M of capital raised from the 27th July to 2nd August
💡 Got any ideas or feedback on how to improve this weekly digest? Just hit reply.
Acquisitions
🐻 Robert Nishihara, Co-Founder & CEO. PhD EECS Article
🧬 Firefly Bio. $1B Acquisition 🇺🇸 Precision cancer therapeutics platform. 💰 Johnson & Johnson, Versant Ventures, MPM BioImpact
🐻 Carolyn Bertozzi, Co-Founder & Strategic Advisor. PhD Chemistry Article
Closed Rounds
🔥 Antora Energy. $550M Series C 🇺🇸 Carbon-based industrial thermal batteries. 💰 Eclipse, G2 Venture Partners, Breakthrough Energy Ventures
🐻 Justin Briggs, Co-Founder & COO. BS Physics Article
🛡️ Escape. $18M Series A 🇫🇷 AI-powered offensive security platform. 💰 Balderton Capital, Uncorrelated Ventures, IRIS
🐻 Tristan Kalos, Co-Founder & CEO. Postgraduate Studies Article
🧠 Adjuvia Therapeutics. $8M Seed 🇺🇸 Brain-penetrant mitochondrial disease therapies. 💰 MBC BioLabs, Portfolia
🐻 Laura Hix Glickman, Co-Founder & CEO. BS Cell Biology Article
🧭 Wayy. $1.6M Seed 🇺🇸 AI sales automation for solopreneurs. 💰 Undisclosed
🐻 Leo Popov, Co-Founder & CEO. Haas MBA
Date Built By Berkeley Started | Companies Funded | Total Raised ($M) |
7/8/24 | 818 | 232,947 |
Our goal is to document the startup ecosystem of Berkeley-founded companies. Please share this newsletter with any Cal Bears in your network so we can crowdsource information about all investment rounds and job opportunities.
Did we miss a company or want to announce a round? Add it here, and we will post it next week.
Do you have a job you want to post from a Berkeley Company? Add here.
Is there someone in the Berkeley ecosystem that you would want us to do a profile on? A founder, funder, or general startup person? Add here.
Built By Berkeley is not affiliated with UC Berkeley, but maybe we will be one day if we get enough subscribers….
Built By Berkeley, where we announce all the funding rounds by Berkeley-founded companies. This is a community effort, so please let us know if we missed a company here. 🐻
