AI Paranoia Meets China Paranoia Head-On

Lon Harris
Lon Harris is a contributor to dot.LA. His work has also appeared on ScreenJunkies, RottenTomatoes and Inside Streaming.
AI Paranoia Meets China Paranoia Head-On
Evan Xie

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According to a new report from The Information, a number of American investors have indirectly financed Chinese AI startups, some of which have set the goal of becoming China’s answer to OpenAI. The piece by journalist Juro Osawa lists Chinese VC firms Sequoia Capital China, Matrix Partners China, Qiming Venture Partners, and Hillhouse Capital Management among the companies putting serious funds into local AI startups.


The investments have gone to a variety of Chinese companies. Sequoia China recently put funds into a new venture from noted Beijing AI researcher and scholar Yang Zhilin, a veteran of Google’s AI labs and Meta Platforms. The focus of his new venture remains unknown. Matrix and Qiming, meanwhile, put funds into the Beijing-backed startup Frontis, which has its own variation on a ChatGPT-type product. That company is now valued in the hundreds of millions of US dollars. Hillhouse has backed MiniMax, another Chinese startup with a ChatGPT-style chatbot in the works. That company has raised more than $100 million to date at a valuation above $1 billion, ranking it among China’s first AI unicorns.

As a lot of American AI projects – including OpenAI’s ChatGPT – remain unavailable to Chinese consumers, it’s still a wide-open market for this new generation of apps. Still, Chinese AI projects must work around the country’s strict media and censorship laws. Compared to an American venture, a Chinese take on something like ChatGPT is limited both in terms of the content on which it can be trained and the results it’s permitted to return. (In other words, internet content that’s censored in China won’t be fed into the chatbot to begin with, and it’s barred from making statements or outputs that violate Chinese laws.)

A ChatGPT rival from Chinese search giant Baidu, called Enhanced Representation through Knowledge Integration or “Ernie” for short, fizzled upon its launch in mid-March. A presentation that was marketed as live but had actually been pre-recorded was deemed a flop by the New York Times and helped cement the idea internationally that China will be unable to respond to the success of ChatGPT, at least in the short-term, due to its strict internet censorship rules. Another Chinese chatbot, ChatYuan, has been suspended by authorities after challenging the Chinese Communist Party’s official stance on Russia’s war in Ukraine.

Chinese tech companies taking investments from Americans in US dollars is certainly nothing new. Nonetheless, the mounting fears about out-of-control rapidly progressing AI apps have already reached a relatively fevered pitch in the US. Sci-fi-influenced fears about intelligent machines running amock colliding with socio-political paranoia about the rise of China as a global superpower could create a perfect storm of panic. With American politicians already mulling over a TikTok ban, it’s easy to see how Americans funding Chinese AI research could soon develop into a controversy of its own.

The potential controversy goes beyond national security concerns as well. There’s also potential for US companies and individuals to fund Chinese apps that are used by the government in ethically or legally questionable ways. MiniMax founder Yan Junjie, for example, previously worked for another Chinese AI startup called SenseTime. In 2021, the US Treasury Dept. added SenseTime to its ongoing list of Chinese firms in which Americans are not allowed to invest, alleging that the company’s facial recognition software had been used by the Chinese government to oppress the country’s Uyghur Muslim minority.

Pushback against the idea of US investment in Chinese AI started as soon as The Information piece dropped. Entrepreneur Keith Rabois tweeted plainly that these deals “[need] to be illegal” while noted software engineer Grady Booch referred to the investments as a result of “rapacious capitalism, untethered from any ethical foundation.” Sequoia partner Shaun Maguire, for his part, tweeted that the article was misleading, as it refers to Sequoia China, not the company’s US arm. A number of commenters argued that this was splitting hairs, as the two firms and their LPs share vital resources and information between them, and American investors put money into companies through Sequoia China. Sequoia China raised a record $8.5 billion in 2022, much of it from American institutional investors.

Regardless of the specific nature of the separation between its international divisions, Sequoia must have seen this potential controversy coming. Sequoia China is led by one of the country’s best-known venture capitalists, Neil Shen, who’s also a board member in TikTok owner ByteDance and has long-standing ties to the ruling Communist Party. Back in February, The Wall Street Journal reported that Sequoia Capital was consulting US national security experts about Sequoia China’s investments, hoping to avoid potential future restrictions by the Biden administration. These concerns reflect not only AI investments but other collaborations on high-level tech projects, such as the manufacture of advanced superconductors. - Lon Harris

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Wonder Dynamics: Redefining the Animation Landscape
Wonder Animation

🔦 Spotlight

Happy Friday, LA!

Wonder Dynamics, a Los Angeles-based company founded by Tye Sheridan and Nikola Todorovic, has launched Wonder Animation, a beta feature that is poised to transform the landscape of video production. Acquired by Autodesk in May, Wonder Dynamics is leveraging this innovative tool, which harnesses artificial intelligence to turn standard video footage into captivating 3D animated scenes, making sophisticated animation techniques more accessible to filmmakers of all budgets.

Wonder Animation allows creators to shoot from multiple angles, with the AI reconstructing these shots into a dynamic 3D space. This functionality enables filmmakers to seamlessly blend live-action scenes with interactive virtual environments while preserving original camera movements. Users can customize various aspects, including animations, characters, lighting, and camera tracking data, and the tool integrates smoothly with popular software like Maya, Blender, and Unreal Engine.

What sets Wonder Animation apart is its emphasis on artistic control. Unlike many AI tools that impose rigid outcomes, this feature empowers creators to guide their projects, ensuring that their unique style remains front and center.

As the boundary between video and 3D animation blurs, Wonder Animation invites creators to experiment and innovate in exciting ways. This development marks a significant step forward in digital storytelling, democratizing access to high-quality visual effects and making sophisticated animation achievable for a broader range of filmmakers.

With the global animation market projected to reach approximately $400 billion in 2024 and grow to over $587 billion by 2030—reflecting a compound annual growth rate (CAGR) of about 5%—tools like Wonder Animation are more relevant than ever. This growth underscores the increasing demand for animated content and highlights the necessity of innovative solutions to meet filmmakers’ evolving needs. For those looking to elevate their storytelling, Wonder Animation may just be the key to unlocking new creative horizons. According to Statista, this upward trend in the animation market emphasizes the significant opportunities ahead.


🤝 Venture Deals

LA Companies

  • Evite, an online platform enabling users to design, send, and manage digital invitations and eCards with tools for event organization and guest tracking, has received a strategic growth investment from Francisco Partners to accelerate innovation and expand its product offerings. - learn more
LA Venture Funds
  • F4 Fund participated in a $4.1M Pre-Seed funding round for Further, a platform designed to help first-time homebuyers determine how much home they can afford by providing personalized insights on interest rates and lender requirements, giving users a clear view of their purchasing power. - learn more
  • Alexandria Venture Investments participated in a $10M Seed funding round for CrossBridge Bio, a company focused on developing advanced dual-payload antibody-drug conjugate (ADC) therapies, with the funds supporting preclinical development of its next-generation cancer treatments. - learn more
  • Clocktower Ventures participated in a $5.6M Series A funding round for Morada Uno, a startup in Mexico focused on making apartment rentals easier by providing a platform that connects tenants with landlords and simplifies processes like lease agreements and rent payments. - learn more
  • Skyview Capital participated in a $5M Series A funding round for Web3 chain game A-World, a tower defense battle game set in the metaverse on the BNB Chain, where players build hero towers to defeat waves of monsters. - learn more

      LA Exits

      • Drive Hospitality, a leading provider of personalized parking and hospitality services, including valet, concierge, bell services, parking management, and advanced technology integration, has been acquired by Propark Mobility. - learn more
      • Vebu Labs, located in El Segundo and specializing in custom automation solutions for the food industry—including the innovative 'Autocado' system that automates the peeling, coring, and scooping of avocados to enhance operational efficiency—will be acquired by Serve Robotics. - learn more

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            Big Wins: Dodgers Take the Title ⚾, ChatGPT Levels Up🚀

            🔦 Spotlight

            Happy Friday, LA! It’s been a week of big wins, on and off the field. 🎉

            ⚾️ First up, let’s talk Dodgers. With a thrilling 7-6 comeback victory over the Yankees in Game 5, the Dodgers clinched their eighth World Series title, their first since 2020. The city is buzzing, and fans are ready to celebrate! A parade kicks off this morning at 11 a.m., starting at City Hall and winding down to Flower Street, with a ticketed celebration at Dodger Stadium for those wanting to keep the festivities going.

            Image Source: Dodgers

            💻 Meanwhile, in the tech, OpenAI just rolled out a game-changing update for ChatGPT. Plus and Enterprise users can now access real-time internet search, powered by Microsoft Bing, bringing ChatGPT's responses fully up-to-date. This means users can now ask about the latest news, hotspots, or recent LA startup announcements, and ChatGPT will pull in fresh, relevant answers directly from the web. Previously limited to information up to 2021, ChatGPT’s new browsing capabilities make it a valuable digital assistant for anyone needing real-time insights in fast-paced industries like tech and entertainment.

            Image Source: ChatGPT

            🔍 The real-time search feature also includes “Browse with Bing,” allowing ChatGPT to source information from multiple sites for detailed answers to complex questions. Whether you’re exploring the latest venture capital trends in LA or curious about the best local spots, ChatGPT’s new browsing power helps you stay ahead with the latest info. This leap forward in AI functionality makes ChatGPT even more versatile and powerful for everyone, from business owners to everyday users.

            From the Dodgers’ World Series win to OpenAI’s latest ChatGPT update, there’s a lot to celebrate in LA this week. Here’s to champions, innovation, and a city that’s always pushing boundaries. 🌆✨


            🤝 Venture Deals

            LA Companies

            • Final Boss Sour, a Los Angeles-based gaming-themed snack company specializing in healthier sour snacks, has raised a $3M Seed funding round led by Science Inc. to expand its product offerings and operational capabilities. - learn more
            LA Venture Funds
            • Smash Capital led a $50M Series B round for Read AI, a productivity-focused AI company, bringing its total funding to $81M. The company offers a platform that enhances meeting efficiency through features like note-taking, summarization, and transcription. Additionally, Read AI introduced "Read AI for Gmail," a free Chrome extension that integrates information from various applications, reducing the need to switch between apps. The funds will be used to increase the company's headcount in engineering, data science, and business teams. - learn more
            • Distributed Global participated in a $25M funding round for Nillion, a company that provides decentralized privacy solutions designed to secure sensitive data using advanced technologies like secure multi-party computation. - learn more
            • Act One Ventures participated in a $5M Seed funding round for Latii, a construction materials supply chain startup, to enhance its platform that connects contractors with suppliers, aiming to streamline procurement processes and reduce costs in the construction industry. - learn more
            • SmartGateVC participated in a pre-seed funding round for Ritual Dental, a company revolutionizing dental care by integrating advanced technology and microbiome science to provide personalized, preventive treatments. - learn more

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                Billion-Dollar Milestones and Snapchat’s New Features

                🔦 Spotlight

                Happy Friday Los Angeles!

                This week’s spotlight showcases LA’s thriving tech scene, featuring Snapchat’s latest feature updates and two local startups Liquid Death and Altruist, making TechCrunch’s Unicorn List for 2024.

                Image Source: Snap

                Snapchat’s recent fall updates bring fresh features, including a new iPhone camera shortcut for instant snaps, Halloween-inspired AI-powered Lenses, and Bitmoji costumes inspired by Mean Girls and Yellowstone. Bitmoji stickers now reflect trending Gen-Z expressions like “slay” and heart symbols for added flair in chats. Plus, the “Footsteps” feature on Snap Map allows users to track their past adventures privately, adding a nostalgic touch.

                Image Source: Liquid Death

                ICYMI, two LA startups joined the Unicorn Club—achieving valuations over $1 billion. Liquid Death, based in Santa Monica, is a canned water company with edgy branding and a humorous sustainability focus. Known for viral marketing and brand partnerships, it redefines bottled water as a lifestyle brand and environmental statement. In March, Liquid Death closed $67 million in strategic financing, raising its total funding to over $267 million and valuing it at $1.4 billion.

                Image Source: Altruist

                Altruist, a Culver City-based fintech platform, offers financial advisors streamlined tools to better serve their clients. With a user-friendly investment and account management platform, Altruist has gained strong traction in the finance world. In May, it announced a $169 million Series E funding round, bringing its total funding to over $449 million and earning a valuation of $1.5 billion.

                Together, Liquid Death and Altruist exemplify LA’s capacity for innovation across diverse sectors, from lifestyle branding to fintech. Whether reshaping financial tools or redefining sustainable branding, these companies showcase LA’s unique entrepreneurial spirit. Go LA!

                Check out TechCrunch’s 2024 Unicorn List here. And don’t miss Snapchat’s latest features—perfect for adding some fun, connection and maybe a few selfies this weekend!


                🤝 Venture Deals

                LA Companies

                • Freeform, a company bringing AI to metal 3D printing, raised $14M in funding from NVIDIA’s NVentures and AE Ventures to further develop its AI-powered 3D printing technology for industrial-scale production. - learn more
                LA Venture Funds
                • Anthos Capital participated in a $70M Series D round for Carbon Robotics, which develops AI-powered robotics for precision agriculture, and the funding will be used to accelerate the growth of its autonomous weeding technology. - learn more
                • Anthos Capital participated in a $3.5M seed round for Plasma Network, aimed at expanding access to USDT stablecoins on the Bitcoin network, with the investment supporting the network’s growth and efforts to enhance stablecoin accessibility through the Lightning Network. - learn more

                LA Exits


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