Column: L.A.'s Video Game Industry Becomes a Safe Haven in Times of Uncertainty

Xinjie Ma
Xinjie Ma is a co-founder of rct studio, a next-generation interactive entertainment company harnessing the latest in AI to offer immersive VR experiences. She jointly founded rct studio with other former members of the Raven Tech team, which was acquired by Baidu in 2017. While at Baidu, Ma headed marketing for the company’s hardware division. Specifically, she assisted with bringing Baidu’s smart speaker to market and achieving best-seller status. Prior to her role at Raven Tech, she served as a brand designer at Studio Output, a digital-first design agency in London. Ms. Ma holds a Bachelor's degree from the University of Arts London. For her work designing consumer technology user interfaces and marketing, she was recognized among the 2020 Forbes 30 Under 30 for both Asia and China.
Column: L.A.'s Video Game Industry Becomes a Safe Haven in Times of Uncertainty

It's hard to believe that residents across vast areas of the U.S. are about to enter their third month of quarantine as a result of COVID-19. With millions of businesses forced into complete shutdown during these unprecedented times, there have been few, if any, positive outlooks for any industry.

But hidden amongst dispirited stories across hospitality, real estate, retail and many other markets, there are glimmers of hope for industries that this crisis may actually be a catalyst for. Gaming is undoubtedly one of the markets seeing an uplift during the pandemic.


Xinjie Ma is a co-founder of rct studio.

According to Verizon, video game internet traffic is up 75%, while 95% of the country shelters at home. Meanwhile, Activision Blizzard, one of the gaming industry's largest holding companies, has seen its stock go up around 10% so far in 2020, while the S&P 500 has dropped around 15%.

Well over half of Americans are gamers and during this crisis, which is taking as much of a mental toll as a physical one, there is no better medium for escaping our current reality. However, the amount of time on consumers' hands is increasing their desire for experiences that extend beyond the status quo.

A rct studio survey of 1,000 U.S. consumers found that right around 1-in-3 people are bored of the same entertainment options during the quarantine and are searching out new virtual experiences as they shelter at home. In this sense, gaming will likely be the gateway during this crisis to new VR experiences. In doing so, it may finally bring VR mainstream. Here's three reasons why I think that will happen.

Today's Needs Are Immersing Consumers in VR for the First Time

While the percentage of VR gamers continues to only hover in single-digit percentages, the crisis has shifted the use of VR technology from a nice-to-try to a need-to-have. Can't access your favorite gym? No worries, you can access a better workout with your Oculus Quest.

With movie theatres shuttered, theme parks closed and concert halls muted, it turns out VR is one of the few technologies that can keep the entertainment industry relevant in these trying times. Our own research shows that the use of AR and VR is up 49% during the pandemic. Additionally, the latest Steam data shows over one million active VR users in March alone.

Through their headsets, consumers can embark on exhilarating journeys that may not even be possible in post-COVID-19 times. Whether it's taking in the sites at Machu Picchu or diving into the action-packed survival horror game Half-Life, the relief experienced through VR right now from societal anxieties is enormous.

And for developers of VR headsets, supply is buckling under this unprecedented demand. Devices like the Oculus Quest — which retails between $399.99 and $499.99 — have become virtually impossible to buy without paying a huge markup. These prices will likely continue to rise the further the quarantine is extended and consumers' appetite for novel forms of entertainment grows.

If interacting with our physical communities continues to be a challenge as we respond to COVID-19, we shouldn't expect any of these VR gaming needs or demands to dwindle. More than 7 in 10 online gamers in the UK and U.S. have noted they feel part of a gaming community. Never has this community been as critical as consumers seek out some connection amid lockdown and separation.

New virtual landscapes will offer even more opportunities for connection that feels human. Next-generation VR environments are already being built with new ways for players to communicate and collectively alter storylines in real-time while they explore virtual worlds.

Technology is Finally Here to Build Lifelike Environments At Scale

The VR industry has already had numerous false starts. Many of these problems can be singularly traced back to not combining proper hardware with engaging content. Getting one right has proved difficult, succeeding with both has been impossible. Furthermore, the promise of immersive VR experiences is limitless choice and opportunity. A new world to escape within.

The problem with the first few generations of VR has been the restraints caused by the sloppy intersection of hardware and software. In a VR environment not too long ago, I walked into a wooden cabin during a summer afternoon in Austria. On the surface, the situation existed. However, if you stared at anything in the cabin for more than 10 seconds, you would start to feel its loss of reality. Not so different than slowly shaking out of a dream. Everything in the room, even the room itself, was modeled in such an inadequate way. The only way to accept the experience as reality was to believe that our world is now only seen in 960X1080.

Fortunately, we're at a point where artificial intelligence advancements can address these issues. Deep and reinforcement learning can lessen the budgets and lengthy timeframes needed for developing vast virtual environments, while also solving limitations of pre-mapped narrative paths that existed in first-generation VR. We can even render these environments in real-time without needing to rewrite any code. Just a few lines of text will do.

While gaming and VR companies have utilized AI in the past to improve gaming, we're just getting to a point where we can train machine learning models to make a sequence of decisions that result in narrative-driven AI. Imagine a not-too-distant VR world where there is no need to script every alternative for each scene in advance. Once the main storylines, character descriptions, motivations, and parameters are mapped, AI can create a seemingly endless number of experiences. And unlike the gaming environments today, every non-player character is powered by its own AI model. VR players can essentially enter into their own Westworld.

Microsoft has been gaining ground with Hololens and AR for the business world. upload.wikimedia.org


FAANG Shows An Increasing Appetite for VR & AR

As they do in almost all aspects of the technology sector, Facebook, Amazon, Apple, Netflix and Google have veto power when it comes to allowing VR to go mainstream given their chokehold on distribution. For much of the past decade, Apple and Google have been resistant to adopting usages of this technology.

Meanwhile Facebook and Microsoft, if we add the sixth biggest player in technology into the mix, have shown the most interest in becoming leaders in the fledgling market. Facebook, of course, is through its efforts with Oculus. Microsoft, on the other hand, has made the most ground with Hololens and AR for the business world.

However, the two perceived leaders in big tech are beginning to see company in VR and that is likely to increase as the crisis spotlights consumer desire for VR experiences. In April, amidst the growing pandemic, Apple has been rumored to be finalizing a deal to acquire NextVR, a virtual-reality video-streaming service for around $100M. Prior to that, details leaked in March, of a controller for an AR/VR headset that Apple may have in the works.

Netflix, the global leader in streaming content into the homes of Americans, has also started to pick up its interest in VR. Its app on the Oculus store, which allows Netflix users to watch certain content in VR. Likewise, Amazon has made VR content available for its Prime Video users with apps available for Oculus and Samsung's Gear VR.

So while Facebook has been carrying the baton for VR over the last few years it has begun to wake up the rest of the major players to virtual possibilities. While the current market downturn may force some of these companies to refocus on core businesses for the short-term, there's little doubt that these leaders also see the opportunity for VR in the new normal that awaits us on the other side of the crisis. If they all jump in the water, the VR floodgates will open.

Xinjie Ma is a co-founder of rct studio, a next-generation interactive entertainment company harnessing the latest in AI to offer immersive VR experiences. She jointly founded rct studio with other former members of the Raven Tech team, which was acquired by Baidu in 2017.

A $26M Push Into Power in LA

🔦 Spotlight

Hello, Los Angeles.

Coachella Weekend 2 is here, which usually means LA is either heading back to the desert or happily staying put this time around. Back in the city, the focus this week is less about music infrastructure and more about something far more critical, power.

That’s where this week’s news comes in.

Critical Loop, a Los Angeles-based energy startup, raised a $26 million Series A to tackle one of the least talked about bottlenecks in tech right now, grid interconnection. In simple terms, it’s the process of getting power to where it’s needed, and increasingly, that process is too slow to keep up.

Critical Loop is building modular microgrid systems that can be deployed in days instead of years, giving industrial operators, data centers, and other energy-heavy users faster access to power without waiting on traditional grid upgrades. The round was led by Conifer Infrastructure Partners and Hanover, with participation from Better Ventures, Climate Capital, Adapt Nation Capital, and Cyrus Ventures.

The timing here matters. Between AI infrastructure demands, electrification, and a broader push toward domestic energy resilience, power is quickly becoming a gating factor for growth. You can build the data center, the factory, or the next big thing, but none of it works if you can’t turn it on.

That’s what makes companies like Critical Loop worth watching. They’re not building the flashiest part of the stack, but they’re solving for the piece everything else depends on.

And in a city that knows a thing or two about scaling ambition quickly, that might be the most important layer of all.

Below are this week’s fund announcements across LA 👇


🤝 Venture Deals

LA Venture Funds

  • Anthos Capital participated in Wealth.com’s $65M Series B, backing the AI-powered estate and tax planning platform as it scales across financial institutions. The oversubscribed round included new investors like Titanium Ventures and Pruven Capital alongside existing backers, and the company plans to use the funding to expand product development, pursue acquisitions, and grow its enterprise footprint as demand rises for AI-driven wealth management solutions. - learn more
  • Anamika Ventures participated in Sage Haven’s $3M pre-seed round, backing the AI-powered messaging and calling app designed to create a safer communication environment for kids. The round was led by Anamika Ventures alongside Fabric Ventures and a group of early-stage investors, as the company launches a platform focused on preventing cyberbullying through real-time AI moderation and parent oversight tools. - learn more
  • MANTIS Venture Capital participated in Factory’s $150M Series C, backing the AI startup as it builds autonomous software engineering systems for enterprise teams. The round was led by Khosla Ventures and included firms like Sequoia Capital, Blackstone, Insight Partners, and NEA, valuing the company at $1.5 billion. Factory plans to use the funding to invest further in product development and global expansion as demand grows for AI-driven tools that can automate large portions of the software development process. - learn more
  • Rebel Fund participated in Uplane’s $4.5M seed round, backing the AI startup as it looks to replace traditional marketing agencies with a platform that automates ad creation, testing, and budget optimization. The round was led by Play Ventures with participation from Y Combinator, 20VC, and Multimodal Ventures, and the company says its technology can improve return on ad spend by automating performance marketing workflows. - learn more
  • Alexandria Venture Investments and Presight Capital participated in Alloy Therapeutics’ $40M Series E, backing the biotech infrastructure company as it scales its AI-powered platform for drug discovery and development. The round included a mix of new investors like 8VC and JIC Venture Growth Investments alongside returning backers, valuing the company at $1 billion and underscoring continued interest in platforms that combine AI, data, and lab services across the biopharma lifecycle. - learn more
  • Finality Capital Partners participated in HYFIX’s $15M seed round, backing the semiconductor startup as it builds American-made chips designed to power drones and autonomous robots. The round was led by Craft Ventures with participation from Catapult Ventures, Multicoin Capital, and Sky Dayton, and the company is developing an integrated system-on-a-chip to replace fragmented hardware stacks and reduce reliance on foreign components. - learn more
  • Rainfall Ventures participated in Stendr’s $5.4M pre-seed round, backing the Norwegian defense tech startup as it builds an AI-native platform for drone detection and counter-drone operations. The round was co-led by Rainfall alongside ACME Capital and Skyfall, with additional participation from Antler, StartupLab, and other early-stage investors, and the company plans to use the funding to accelerate development of its multi-sensor technology and expand engineering capabilities. - learn more
  • Slauson & Co. participated in Slate Auto’s $650M funding round, backing the EV startup as it works to bring a lower-cost electric pickup truck to market. The round was led by TWG Global and comes as the Bezos-backed company prepares to begin production, targeting a more affordable segment of the EV market with a customizable truck expected to launch later this year. - learn more
  • Navitas Capital co-led Primepoint’s $10M seed round, backing the AI startup as it builds a platform that reads and connects complex construction drawings to streamline project workflows. The round also included investors like Penny Jar Capital, NextView Ventures, GS Futures, and Aglaé Ventures, and the company plans to use the funding to expand its platform and grow adoption among large commercial contractors. - learn more
  • Alexandria Venture Investments participated in Neomorph’s $100M Series B, backing the biotech company as it advances its molecular glue degrader platform targeting previously undruggable diseases. The round was led by Deerfield Management with participation from Regeneron Ventures, Longwood Fund, and Binney Street Capital, and the company plans to use the funding to support ongoing clinical trials and expand its broader drug development pipeline. - learn more

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Hermeus Moves In. Uber Lines Up. LA Wins.

🔦 Spotlight

Hello, Los Angeles.

This week’s transportation news says a lot about where LA is headed and who wants to build here.

Start with Hermeus, which hit a $1 billion valuation after raising $350 million as it works on high-speed aircraft for defense applications. More notably for Los Angeles, the company is moving its headquarters to El Segundo, adding to the region’s growing aerospace and defense cluster. The round was led by Khosla Ventures, with participation from returning backers including Canaan Partners, Founders Fund, RTX Ventures, Bling Capital, and In-Q-Tel, along with new investors including Cox Enterprises, Socium Ventures, Destiny Tech100, Georgia Tech Foundation, 137 Ventures, and GSBackers.

Then there’s Uber, which made two separate autonomous vehicle announcements that both put Los Angeles in the rollout map.

The first is a partnership with Zoox, Amazon’s autonomous vehicle company. Uber said the service is expected to launch in Las Vegas in summer 2026 and then come to Los Angeles by mid-2027, giving riders the option to match with a Zoox robotaxi through the Uber app.

The second is a new deal with MOIA America, which plans to deploy autonomous ID. Buzz vehicles on the Uber platform in Los Angeles by the end of 2026.

Taken together, the message is pretty straightforward: LA is not just watching the future of transportation take shape, it is increasingly being used as the place to test it, scale it, and sell it. Hermeus is bringing its headquarters here as defense aviation regains momentum. Uber is lining up autonomous partners with Los Angeles as a target market. Different companies, different timelines, same conclusion: a meaningful share of the next transportation cycle is being built with LA in mind.

Below are this week’s venture deals, fund announcements, and acquisitions across LA.


🤝 Venture Deals

LA Companies
  • PeakMetrics raised a $6M Series A to scale its AI-powered narrative intelligence platform, which helps organizations track how information spreads online and identify risks from misinformation and coordinated campaigns. The round was led by Moneta Ventures with participation from Techstars, Parameter Ventures, VITALIZE Venture Capital, and Gurtin Ventures, and the company plans to use the funding to enhance its real-time detection capabilities and expand adoption across enterprise and government customers. - learn more
  • Hybron raised a $25M seed round to scale its advanced carbon fiber composite manufacturing technology, which aims to produce high-performance components faster and at lower cost than traditional methods. The round was led by Marque Ventures with participation from a mix of venture firms and strategic investors, and the company plans to use the funding to expand manufacturing capacity, grow its team, and support increasing demand from aerospace and defense programs. - learn more

LA Venture Funds

  • Emmeline Ventures participated in Osteoboost’s $8M funding round, backing the company as it expands access to its FDA-cleared wearable designed to treat low bone density in postmenopausal women. The round was led by Ambit Health Ventures with participation from Disrupt Health Impact Fund and others, and the company plans to use the capital to scale manufacturing, expand clinical research, and grow commercial adoption. - learn more
  • Bonfire Ventures led Juno’s $12M seed round, backing the AI-powered tax preparation platform as it aims to automate up to 90% of the manual work in tax filing for accounting firms. The round included participation from Impression Ventures and Xfund, and the company says its software can significantly reduce preparation time while keeping CPAs in the loop for review and advisory work. - learn more
  • Alexandria Venture Investments participated in Sidewinder Therapeutics’ $137M Series B, which will help fund the company’s push to bring its precision bispecific ADC cancer programs into the clinic. The round was co-led by Frazier Life Sciences and Novartis Venture Fund, and Sidewinder said it expects to advance its lead program into clinical development in 2027. - learn more
  • Slauson & Co. participated in Flora Fertility’s $5M seed round, backing the company as it builds what it describes as an individually owned fertility insurance platform that is not tied to an employer. The round was led by ManchesterStory, and Flora plans to use the funding to scale a model aimed at making fertility coverage more portable and accessible for consumers. - learn more
  • Mucker Capital participated in Fastrflow’s $375K early funding round, backing the startup as it builds a screen-aware AI copilot designed to assist students and professionals directly within their workflows. The company is focused on creating an assistant that can understand what’s on a user’s screen in real time to provide contextual help, positioning itself as a more integrated alternative to traditional standalone AI tools. - learn more

LA Exits

  • Modern Animal has been acquired by Chewy, giving the pet e-commerce giant a much bigger physical veterinary footprint as it expands deeper into healthcare. The deal brings Chewy an additional 29 clinics, 24/7 virtual care, and a membership-based model, and is expected to grow Chewy Vet Care from 18 to 47 locations nationwide while adding more than $125 million in annualized run-rate revenue. - learn more
  • Honk has been acquired by Frontenac, with the Los Angeles roadside assistance software company simultaneously completing an add-on acquisition of CurbsideSOS as part of the deal. The combination is meant to scale Honk’s platform for roadside assistance, towing, and accident management, with former Grubhub executives including Adam DeWitt, Matt Maloney, and Eric Ferguson joining the company to lead its next phase of growth. - learn more

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Valar Atomics Wants to Power AI, Literally

🔦 Spotlight

Hello, Los Angeles.

This week’s spotlight belongs to a startup chasing one of the biggest and messiest questions in tech right now: where all the power for AI is actually supposed to come from. El Segundo-based Valar Atomics, founded by Isaiah Taylor, is reportedly raising $450 million at a $2 billion valuation to build clusters of small nuclear reactors aimed at powering data centers and other energy-hungry industrial sites.

That is not a subtle ambition. On its website, Valar says it wants to build “hundreds of nuclear reactors” on what it calls gigasites, focusing on grid-independent products including data center power, hydrogen, heavy industrial power, and clean hydrocarbon fuels. Its reactor approach is based on high-temperature gas reactor design principles using TRISO fuel, and the company is explicitly pitching its model as a way to meet the surge in power demand coming from AI.

Valar’s investor roster also helps explain why the company has drawn so much attention. The startup is backed by Palmer Luckey and Palantir CTO Shyam Sankar, and its earlier $130M round in November 2025 was led by Snowpoint Ventures.

What makes the story especially interesting is that this is not just another AI infrastructure company talking about faster chips or more efficient software. It is a bet that the next bottleneck is electricity itself, and that the winning response might look a lot more like hard infrastructure than cloud optimization. In a market full of startups promising to power the future metaphorically, Valar is making a much stranger and bolder claim: it wants to do it literally.

The company is also moving with unusual speed. Valar says it has been selected by the U.S. Department of Energy to achieve criticality on American soil by July 4, 2026 under the administration’s accelerated nuclear program, and related company materials tie its Project NOVA work to the Nuclear Reactor Pilot Program. Whether that timeline proves realistic or not, it tells you something important about the kind of company this wants to be: not a distant science project, but a startup trying to force nuclear power onto AI’s timetable.

And maybe that is the bigger LA angle here. For all the conversation around software, content, and consumer apps, Southern California keeps producing founders who are drawn to the hard stuff: defense, aerospace, energy, logistics, real-world systems with real-world constraints. Valar may still have plenty to prove, but it is hard to accuse this one of thinking small.

Now onto this week’s LA venture deals, fund announcements and acquisitions.

🤝 Venture Deals

                  LA Venture Funds

                  • Matter Venture Partners participated in Anvil Robotics’ $5.5M seed round, which it led and which also included Humba Ventures, DNX Ventures, Vivek Sodera, Spacecadet Ventures, and Position Ventures. Anvil said it is building a kind of “Legos for robots” platform for physical AI teams, with open-source custom robots that can ship in one to two days, and has already delivered more than 100 units globally while surpassing seven figures in revenue. - learn more
                  • WndrCo led daydream’s $15M Series A, backing the AI-native SEO agency alongside First Round Capital and Basis Set Ventures. daydream said the round brings total funding to $21M and will be used to accelerate hiring, product development, and go-to-market expansion as it combines SEO agents with human experts to help companies navigate both traditional search and AI search. - learn more
                  • Embark Ventures participated in Via Separations’ $36M funding round, which also brought in new strategic backing from Climate Investment, Aramco Ventures, and Marathon Petroleum Corporation. Via said the capital will help deploy more commercial projects and expand its membrane-based industrial filtration platform into refining and chemicals, building on commercial traction in pulp and paper and a pilot completed at a major Gulf Coast refinery. - learn more
                  • Finality Capital Partners co-led Alien’s $7.1M round alongside Initialized, backing the company’s push to build identity infrastructure for both humans and AI agents. According to the X post announcing the raise, Alien plans to use the funding to develop unique identity systems at a time when proving whether an entity online is human or agentic is becoming increasingly important. - learn more
                  • M13 participated in OpenFX’s $94M Series A, as the company builds API infrastructure for global FX liquidity. OpenFX said it now moves more than $45B a year across borders, settles 98% of transactions in under 60 minutes, and plans to use the funding to expand its institutional-grade, API-first platform for cross-border payments and treasury operations. - learn more
                  • M13 led Jimini Health’s $17M seed round, backing the company alongside Town Hall Ventures, LionBird, Zetta Venture Partners, and OneMind as it builds a clinician-supervised AI platform for behavioral health. Jimini said the funding will help scale Sage into more care settings and deepen partnerships with major behavioral health providers across the U.S., positioning it as a safer alternative to unsupervised consumer AI tools for mental health support. - learn more
                  • MANTIS Venture Capital participated in depthfirst’s $80M Series B, which was led by Meritech Capital and also included Forerunner Ventures, The House Fund, Accel, Box Group, Liquid 2 Ventures, and Alt Capital. The company said the new funding will be used to train additional security models, grow its AI research team, and scale enterprise adoption as it builds an AI-native platform for software security and launches its first in-house security model. - learn more
                  • Freeflow Ventures participated in TippingPoint Biosciences’ $4.5M seed round, joining SOSV, LKS Fund, Sazze Partners, StoryHouse Ventures, Sontag Innovation Fund, BrightEdge, XEIA Venture Partners, West Coast Angel Network, and others. The company said the financing will help de-risk its epigenetic discovery platform as it works to translate chromatin biology into new therapeutics. - learn more

                                    LA Exits

                                    • Warner Music Group agreed to acquire Revelator, a B2B music platform focused on digital distribution, rights management, royalty accounting, and real-time analytics for independent labels, artists, and distributors. WMG said the deal will strengthen its distribution and label services business, expand the tools available through its labels and ADA, and allow Revelator to keep serving its existing customers while scaling through WMG’s global infrastructure. - learn more
                                    • Omni Agent Solutions has been acquired by Fortress Investment Group, which said the deal will provide long-term capital and resources to expand Omni’s tech-forward platform for bankruptcy and restructuring case administration. Omni said the investment will support continued technology development and scale across services such as claims management, noticing, solicitation support, securities services, disbursements, and call center operations, while its executive and operational teams remain in place. - learn more
                                    • Apium Swarm Robotics is being acquired by Red Cat, adding its distributed control technology for autonomous swarming drones and uncrewed surface vessels to Red Cat’s broader defense platform. Red Cat said Apium will continue operating independently while its autonomy stack is integrated across the business to strengthen coordinated multi-agent operations in contested and communications-degraded environments. - learn more
                                    • HOPWTR is being fully acquired by Constellation Brands, which first invested in the non-alcoholic sparkling water brand through its venture arm in 2021. Constellation said the deal strengthens its no- and low-alcohol portfolio as consumer demand in the space grows, while HOPWTR is expected to keep operating as it does today in the near term with CEO Jordan Bass remaining involved. - learn more

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