AI Weekly – May 12, 2025
This week’s AI roundup highlights the accelerating disruption caused by large language models and autonomous agents, from surging startup valuations to major layoffs and delayed infrastructure bets.
📌 Summary
1. Perplexity Valued at $14 Billion in New Funding Round
AI search startup Perplexity is closing a fresh funding round that values the company at $14 billion, up more than 50% since November 2024. The company is also working on launching its own browser, Comet, which could directly challenge Chrome and Safari.
Perplexity’s surge reflects a broader shift in user behavior toward AI-first, source-cited search experiences. With OpenAI, Google, and others pushing into web-based LLMs, the battle for information retrieval is heating up fast.
2. Chegg Lays Off 22% Amid AI Disruption in EdTech
EdTech firm Chegg is laying off 248 employees, about 22% of its workforce, after a steep drop in subscribers and revenue. The company attributes this decline to competition from AI tools like ChatGPT, which can answer homework questions for free.
Chegg also filed a lawsuit against Google, alleging that AI summaries reduced traffic to its original content. The company reported a 31% decline in subscribers and a 30% drop in revenue for Q1 2025.
3. Google Launches AI Futures Fund for Startups
Google introduced the AI Futures Fund, an initiative designed to invest in startups building on the latest DeepMind and Google AI tools. Selected companies will receive early access to cutting-edge models, technical support, and venture funding.
The fund reflects Google’s push to strengthen its developer ecosystem while competing with OpenAI’s growing influence in the tooling space.
4. $100 Billion OpenAI–SoftBank ‘Stargate’ Project Delayed
The Stargate initiative, a proposed $100 billion investment in U.S.-based AI data centers by OpenAI, SoftBank, and others, is facing delays due to tariff concerns that could increase construction costs by up to 15%.
The plan includes up to 20 massive AI data centers. However, investor hesitation and economic uncertainty are slowing down execution.
Stay tuned for more updates in the fast-moving world of AI and LLMs.
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