Happy Friday. Here’s what we’ve got today…

• A look at the real AI uplift for investment banks

• The deal sheet, plus the UAE’s $1.5 trillion Sheikh

Goldman Sachs Chief Sees AI payday for investment banks, but not how you might expect

By Bob Clair

When investment banking and artificial intelligence are discussed together, the focus is usually on how AI can make banks more efficient. David Solomon, Goldman Sachs CEO, says the bigger opportunity for investment banks may be the wave of financing opportunities the emerging technology will provide.

Solomon shifted to AI just minutes into the Goldman Sachs Group, Inc. Q1 2024 earnings call, saying that the topic has come up in “virtually every client conversation that I have.”

While McKinsey has predicted that AI technologies could “potentially unlock $1 trillion of incremental value for banks” by speeding up human decision-making, Solomon focused on another way banks can reap the benefits of AI — by the increased need for financing that it will present.

“To the extent that this technology develops in line with expectations, there will be significant demand for AI-related infrastructure and, as a result, financing, which will be a tailwind to our business,” Solomon said.

Taking care to still touch on internal applications, he added that Goldman currently has a leading team of engineers dedicated to exploring and applying machine learning and AI applications, but also urged caution.

“Like with any emerging technology, a thoughtful approach and keen eye on risk management will be crucial.”

When asked about what’s hype vs. what’s real, Solomon refused to compare current AI enthusiasm to the Internet explosion in 1999-2001 that resulted in the dotcom bubble, instead focusing on the “unprecedented” opportunity for corporates and governments alike:

“We’re talking about a level of scale that is candidly unprecedented … This is not a quarter-to-quarter thing, this is over the next five to 10 years, and we're very, very focused on it and very engaged. And by the way, it's not just companies, it's governments, obviously, that are making enormous investments in bringing infrastructure into their locale. And so, all of this is something that we're very strategically focused on.”

Indeed, many companies are spending significant amounts of money on AI — Google deepMind CEO Demis Hassabis said during a TED conference in Vancouver on Monday that Google will be investing more than $100 billion “over time” on AI, according to Bloomberg. This comes a month after it was widely reported that Microsoft will spend $100 billion on just a single data center for OpenAI. And last week came the news that Elon Musk’s X.AI Corp. is looking to raise $3 to $4 billion in a deal that would value the company at $18 billion, according to materials sent to investors. 

Looking at public sector spend, the Brookings Institute released a report in March detailing the U.S. federal government’s rapidly accelerating AI investments over recent years. 

This is backed up by President Joe Biden’s proposed fiscal year 2025 federal budget, which includes more than $3 billion dispersed across agencies to develop, test, procure, and integrate transformative AI applications across the federal government. The budget also includes a mandatory allocation to “increase agency funding for AI, both to address major risks and to advance its use for public good.”

While Goldman may not benefit from AI as directly as data center developers, David Solomon’s excitement does appear warranted.

• BHP Group Ltd. (ASX: BHP) proposed a $39 billion all-stock buyout offer for Anglo American Plc (LON: AAL), which Anglo American's board unanimously rejected, deeming it "highly unattractive." Elliott Management has also built a stake in Anglo American.

• Global Tetrahedron, a group of four digital media veterans, including Jeff Lawson, co-founder of Twilio, acquired satirical news site The Onion from Great Hill-backed G/O Media.

• Apollo Global Management agreed to acquire U.S. Silica Holdings Inc., a producer of commercial silica used in the oil and gas industry, for around $1.85 billion.

• KKR is shelving its sale process for Upfield, a maker of margarine and spreads under brands like Flora and Country Crock. The firm was targeting a valuation of around $10 billion and is now considering options, including an IPO or minority stake sale, per Bloomberg.

• GTCR agreed to acquire AssetMark Financial Holdings Inc. (NYSE: AMK), an asset management software platform for financial advisors, for around $2.7 billion.

• KKR has agreed to acquire Nexeye, a European optical retailer, from 3i Group.

• KKR agreed to acquire a portfolio of 19 student housing properties from Blackstone Real Estate Income Trust for around $1.64 billion.

• Nvidia agreed to acquire Run:ai, an Israeli workload management and orchestration software provider, for around $700 million.

• Concord, backed by Apollo Global Management, increased its takeover offer for Hipgnosis Songs Fund, a U.K.-based music royalties firm, to $1.51 billion, topping a $1.5 billion rival bid from Blackstone.

• Apax Partners is exploring a sale of its stake in Healthium Medtech, an Indian medical device maker, with KKR, Novo Nordisk, Hillhouse, Blackstone, EQT, and a consortium of Mankind Pharma and ChrysCapital all said to be interested at a valuation of around $1 billion.

• Falfurrias Capital Partners is exploring a sale of Sauer Brands, a 137-year-old maker of condiments and spices, that could value it at more than $1 billion, per Reuters.

• Century Park Capital Partners acquired Total Access Elevator, a Santa Fe Springs-based provider of commercial elevator maintenance and repair services.

• L Catterton agreed to acquire a majority stake in Kiko Milano, an Italian cosmetics brand, from the Percassi family.

• T-Mobile US has agreed to invest around $950 million for a 50% stake in a joint venture with EQT's Infrastructure VI fund to acquire Lumos, a fiber optic network provider.

• Serent Capital invested in Medical Informatics Engineering, a provider of occupational health IT solutions

• Shoreline Equity Partners acquired an undisclosed stake in Prime Meats, a Georgia-based processor and supplier.

• Cboe Global Markets (Nasdaq: CBOE) agreed to acquire NEO, a Canadian fintech that operates a stock exchange providing a listing venue for corporates and ETFs and a dealer business that develops and manages ETFs, for C$135 million (around US$103 million).

• Granite Creek Capital Partners and Boathouse Capital invested in The District Communications Group, a Washington, D.C.-based government communications firm.

• Hawaiian Electric Industries (NYSE: HE) is weighing the sale of its American Savings Bank FSB subsidiary, per Bloomberg.

• Triple Private Equity acquired a majority stake in SmartSearch, a UK-based provider of digital compliance and AML software.

• E.W. Scripps (Nasdaq: SSP) says it has hired a financial advisor to evaluate inbound interest in acquiring its Bounce TV asset.

Labcorp (NYSE: LH) has agreed to acquire most of the assets of Invitae, a medical genetics company that filed for bankruptcy, for $239 million in cash.

• CVC Capital Partners priced above the top end of the range and rose more than 25 percent on its first day of trading in Amsterdam.

• Rubrik, a Microsoft-backed data security startup, raised $752 million in its IPO, which priced above the top end of the range for a $6.6 billion fully diluted market capitalization.

• Solera, a Vista Equity Partners-backed risk management and asset protection software provider, has selected advisors for its IPO, including Goldman Sachs Group, Morgan Stanley, Bank of America, and Jefferies, per Bloomberg.

Tech, Vertical SaaS, & Misc. Enterprise

• Augment, a developer of AI software engineering tools, raised $227 million at a $977 million post-money valuation. Sutter Hill Ventures led, with participation from Index Ventures, Innovation Endeavors, Lightspeed Venture Partners, and Meritech Capital.

• Cognition Labs, a startup building an agent-based AI coding tool, raised $175 million at a $2 billion valuation. Founders Fund led after co-leading the company’s $21 million Series A at a $350 million post-money valuation in March.

• ThreatLocker, a cybersecurity startup developing zero-trust solutions, raised $115 million in Series D funding led by General Atlantic, with participation from StepStone Group and The D. E. Shaw Group.

• Markt-Pilot, a developer of spare parts pricing software, raised $43 million in Series A funding led by Insight Partners, with participation from Capnamic.

• FlexAI, an AI compute company, raised $30 million in seed funding. Alpha Intelligence Capital, Elaia Partners, and Heartcore Capital co-led.

• HappySignals, an IT experience management and monitoring startup, raised €12 million led by Mandatum Asset Management, with participation from Nauta and Vendep Capital.

• RevenueCat, developer of a mobile subscription management platform, raised $12 million in Series C funding led by Adjacent.

• Anon, a developer of automation software for AI, raised $6.5 million. Union Square Ventures and Abstract Ventures co-led, with participation from Impatient Ventures and ex/ante.

Fintech

• QI Tech, a São Paulo-based financial services infrastructure provider, raised $210 million in Series B funding from General Atlantic and Across Capital.

• Movement Labs, a developer of a layer-2 blockchain platform for Ethereum, raised $38 million in Series A funding led by Polychain Capital, with participation from Hack VC, Placeholder, Archetype, Maven 11, Robot Ventures, Figment Capital, Nomad Capital, Bankless Ventures, OKX Ventures, dao5, and Aptos Labs.

• Vixtra, a Brazilian fintech for international trade, raised $36 million in a combination of seed extension funding and a debt facility provided by Capitânia, Verde, Credit Saison, and Contea.

• Nooks, an AI-powered sales prospecting platform, raised $22 million in Series A funding. Lachy Groom led the round, with participation from Tola Capital and Stifel Venture Banking.

• Dripos, an all-in-one software platform for coffee shops, raised $11 million in Series A funding led by Base10, with participation from Y Combinator.

• Carv, an AI and gaming-focused blockchain data layer, raised $10 million in Series A funding led by Tribe Capital and IOSG Ventures, with participation from ConsenSys, OKX Ventures, and LiquidX.

Healthcare

• Cerevance, a Boston-based biotech targeting Parkinson's, raised $47 million in Series B funding from Agent Capital, Bioluminescence Ventures, and Double Point Ventures.

• TVM Capital Healthcare invested €16 million in neurocare, a Germany-based developer of personalized neurotherapy solutions.

Industrials, Greentech, & Other

• Chemix, a GenAI-driven EV-battery developer, raised $20 million in Series A funding led by Ibex Investors, with participation from Mayfield, Berkeley SkyDeck, Urban Innovation, BNP Paribas, Global Brain, and Porsche.

• Goodcarbon, a carbon offset platform focused on nature restoration projects, raised €5.25 million in new funding led by Ocean 14 Capital, with participation from Silver Strand Capital, Planet A Ventures, 468 Capital, and Greenfield Capital.

• Terra One, a Berlin-based energy storage solutions developer, raised €7 million in seed funding led by PT1, with participation from Neosfer, 468 Capital, Maximilian Tayenthal, Jan Beckers, Scout Funds, and Tapso.

• Bioform Technologies, a developer of wood-pulp-based bioplastics, raised $5 million in seed funding from Suzano Ventures.

• Mercer raised $3.9 billion for its latest broad private markets fund.

• Norwest Venture Partners raised $3 billion for its 17th fund.

• Decarbonization Partners, a BlackRock and Temasek JV, raised $1.4 billion for its debut early-stage fund, per Axios.

• Investcorp is forming a new $1 billion fund backed by China Investment Corporation to invest across China and the Middle East.

• Newton Investment Partners raised $960 million for its debut fund, per Bloomberg.

• Eniac Ventures raised $220 million across a pair of new early-stage funds.

1. How to Get a Meeting With the UAE’s $1.5 Trillion Man.

• Abu Dhabi royal Sheikh Tahnoon controls a massive pile of private and state assets—and his gatekeepers can make or break a deal. — Bloomberg

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