Curing disease is one of AI's most tantalizing use cases, fetching billions of VC dollars, but thus far it's generated more excitement than evidence.

• That's the thrust of a peer-reviewed paper published in Nature Reviews Drug Discovery, which calls the clinical impact of AI "disappointingly limited."

The big picture: The researchers find that while AI has gotten good at identifying drug candidates, it hasn't done much to prove those predictions will survive the complexity of human biology.

• Instead, AI-derived drugs still run into the same Phase II bottleneck as conventional drugs: Proving efficacy in large, diverse patient populations, where failure rates are high and costs are astronomical.

Zoom in: This mostly boils down to cellular data sets, an unsexy thing to devote resources to when you could instead be swinging for blockbuster treatments. In some cases, the data isn't robust enough. In most cases, it's just too messy.

• "We don't know how to clean this stuff up and categorize it for real ML/AI, and honestly, we don't even know if it can be," writes biotech journalist Derek Lowe when discussing the research paper.

State of play: Venture capitalists have invested more than $40 billion into AI biopharma this decade, per PitchBook, but there are precious few medicines that have moved beyond Phase II.

• Yes, drug development is a lengthy process. But, as the researchers note, "many AI proponents have claimed these timelines will be meaningfully shortened."

Yes, but: This isn't to say there are no current late-stage applications.

• The most notable may be a new Phase III trial by Moderna and Merck, which is using AI to choose tumor targets in cancer patients — and then treating them with an existing medicine.
• But, again, this is more about decision-making for specific individuals than it is wholesale drug development.

What they're saying: I reached out to some top biotech VCs to get their thoughts. Two notable replies:

• Robert Nelsen, Arch Venture Partners: "We need more data for models of biology. We need regulatory reform to move faster. And when we have the cellular data and more population data, and eventually quantum computing, it will fundamentally disrupt the industry."
• Bijan Salehizadeh, NaviMed Capital: "The biggest costs are in the D of R&D, where Phase 2 and Phase 3 costs are massive and inflated by CROs and baked-in inefficiencies and regulation ... I'm afraid the AI applications in development will be surface level, focused on low-hanging fruit like biostats and data lock once a trial is enrolled and medical writing for FDA submissions. But not the big stuff of how to enroll a phase 2 or phase 3 program at hundreds to thousands of global sites and do all the nitty gritty of study startup, site negotiation, enrollment, and data monitoring."

The bottom line: AI advocates have pushed back hard on the past week's safety debate, arguing that slowing the frontier would delay life-saving medicines. Rhetoric, however, is no substitute for results.

Starbucks (Nasdaq: SBUX) is weighing a majority stake sale in its Japan business, which could be valued at around $3 billion, per Reuters.

Why it's the BFD: This highlights how the ubiquitous coffee chain seeks to eliminate distractions while trying to revitalize its core U.S. business.

• It also could spark a major bidding war in Japan, where private equity has become very active.

Catch up quick: Starbucks sold a majority of its Chinese unit to Boyu Capital earlier this year at a $4 billion valuation.

• The Japan business was valued at around $1.5 billion when Starbucks bought full control from its JV partner in 2014.
• Starbucks stock is up 15% in 2026, but remains down nearly 15% over the past five years.

The bottom line: "[CEO] Brian Niccol's efforts to lure customers back through store upgrades and heavier marketing have helped stabilize demand but have also increased costs and pressured margins. Its comparable store sales in the international segment grew 5.7% in the third quarter, with the ​company crediting Japan as a key driver." — Reuters

• OpenAI reportedly is in early talks to raise new funding at a $1.2 trillion valuation. axios.link/4y3S2tI

• Euclyd, a Dutch chipmaker, raised over €200m in Series A funding from Samsung Electronics, Somerset Capital Partners and Scaleup Europe Fund. axios.link/4gYwXcw

• Factory, an SF-based AI coding startup, raised $200m at a $5b valuation from Blackstone, Khosla Ventures, Sequoia Capital, Insight Partners, Evantic Capital, Sound Ventures, NEA, Mantis VC, and Clearlake. axios.link/3VcW1W4

• Wonder, the food retailer and tech platform, raised $125m in Series D funding from DoorDash. It previously raised $650m for the round at a $9b pre-money valuation. Wonder also agreed to sell its Grubhub Dining Campus to DoorDash for $300m. axios.link/470wuC3

• Caddi, a Chicago- and Tokyo-based manufacturing automation firm, raised $114m in Series D funding at a $1.2b valuation from Moore Strategic Ventures, Coreline Ventures, HR Tech Fund, Woven Capital and insiders Atomico, Globis Capital Partners and JPS Growth Investment. axios.link/4hagD8G

🚑 Thatch, an SF-based health benefits company, raised $108m in Series C funding at a $1b valuation from The General Partnership, Index Ventures, Scale Venture Partners, General Catalyst, and a16z. axios.link/4rxNYQ1

• Delos Data, a Palo Alto, Calif.-based semiconductor and software startup, raised more than $100m from Matrix, Playground, Socratic Partners, Capricorn, Matter Venture Partners, and IAG. axios.link/4Ag29Ni

⚡️ Kanin Energy, a Canadian startup that converts industrial heat into on-site electricity, raised US$60m in Series A funding from S2G Investments and Canada Growth Fund, per Axios Pro. axios.link/3UVoU9h

⚡️ Polaris Electro-Optics, an optical interconnects developer, raised $50m. Walden Catalyst Ventures led, joined by Socratic Partners, Cambium Capital, Knollwood, Hudson River Trading, Koch Disruptive Technologies, M Ventures, Rhapsody Venture Partners, Buff Gold Ventures, and Blue Sky Capital. axios.link/3UXxUur

🚑 ReEmerge, an Edina, Minn.-based cognitive impairment medtech startup, raised $37m in Series A funding. USVP and Santé led, joined by Oxford Science Enterprises, 415 Capital, IAG Capital Partners, the Vertical Group, and Dendrion Ventures. axios.link/4h6xzgf

• Footprint, a builder of AI agents for financial-crime investigations, raised $25m in Series B funding, per Axios Pro. QED Investors led, joined by MUFG, Commerce Ventures, LightBank, Alumni Ventures, Index Ventures, Lerer Hippeau, BoxGroup, Operator Partners, and Animal Capital. axios.link/4xWQnWu

• Fin, an NYC-based financial infrastructure company, emerged from stealth with a $20m seed round. Expa led, joined by Coinbase Ventures, Tenet Fund, and Second Sight Ventures. axios.link/4cOotUi

• Integral, a Berlin-based accounting tech startup, raised €18m in Series A funding. Mosaic Ventures and Reid Hoffman led, joined by insiders Cherry Ventures, General Catalyst, and Puzzle Ventures. axios.link/4yFSa27

🚑 Nix Biosensors, a developer of hydration biosensors, raised $17m in Series A funding from such backers as Shorewind Capital, Great Oaks Venture Capital, Oregon Sports Angels, White Road Investments, Anne Wojcicki, and Len Blavatnik. axios.link/4cQbIbL

• ETFBook, an ETF data and analytics platform, raised $13m led by Expedition Growth Capital, with BlackFin Capital Partners participating. axios.link/4h3VIUQ

• Keewano, an Israeli database startup, raised $12m in seed funding. Hetz Ventures led, joined by a16z speedrun, Remagine Ventures, and DIG Ventures. axios.link/3Vydt7x

• Gaia Dynamics, a Palo Alto, Calif.-based trade compliance platform, raised $7m. Corazon Capital led, joined by Lobby Capital, AI Fund, and Zenda Capital. gaiadynamics.ai

• Creem, an Estonian fintech, raised €5m in seed funding. Inovo VC led, joined by Practica Capital and Antler. creem.io

• Eve Security, an Austin, Texas-based runtime security startup, raised $4.5m. Run Ventures led, joined by Dreamit Ventures, Blu Ventures, and LiveOak Ventures. axios.link/4xroftG

• Opio, a Paris-based financial due diligence startup, raised €4m from investors Frst, Seedcamp, and GFC. axios.link/4huElxR

• Boxd, a Dutch developer of infrastructure for AI coding agents, raised $2m in pre-seed funding led by BlueYard Capital. axios.link/3UZ6J2m

• Adelis Equity Partners agreed to acquire a majority stake in Newground, a Swedish specialty consultancy alliance. axios.link/3UVqZC1

• Brookfield Asset Management agreed to acquire Reliance Worldwide (ASX: RWC), an Atlanta-based plumbing supplies manufacturer, for US$2.9b. axios.link/4AfuBih

• Brookfield also is in talks to recapitalize U.K. holiday parks operator Center Parcs at around a $6b valuation, per Bloomberg. axios.link/4rebEZb

• Centauri, an Abry Partners portfolio company, acquired Benny the Benefits Navigator, an Iowa-based platform for streamlining public benefits applications. axios.link/4gVct5Y

⚡ EQT and Norges Bank Investment Management are prepping a joint bid to buy Acciona Energía (Madrid: ANA), per Expansion. Ardian also is bidding. axios.link/4ixygBL

• Fime, a Gallant Capital Partners portfolio company, acquired Red Alert Labs, a Paris-based cybersecurity certification and compliance automation company. axios.link/4reHXao

• Graham Partners acquired Immix, a Charlotte, N.C.-based provider of software for remote video monitoring and security operations centers, from Norland Capital and CFT Capital Partners. axios.link/4Ahkg5t

• Main Capital Partners acquired a majority stake in Boxwise, a U.K. warehouse management system provider. axios.link/4xXKbOh

• Quorum Cyber, backed by Charlesbank Capital Partners and Livingbridge, agreed to buy Ontinue, a Redwood City, Calif.-based cybersecurity firm focused on the Microsoft ecosystem, from EQT. axios.link/4rfFxIR

🔥 TPG agreed to invest in Tablet Command, a Walnut Creek, Calif.-based provider of incident management and response software for fire departments and emergency response agencies. axios.link/46YTnWv

• Verlinvest agreed to invest in HomeExchange, an NYC-based home-swapping platform. axios.link/4h6Qnfl

• Vortex, a Quad-C Management portfolio company, acquired CLH & Son, an Auburn, Maine, infrastructure contractor. axios.link/4j6rCmc

• Altera, a San Jose, Calif.-based chipmaker backed by Silver Lake and Intel, filed confidentially for an IPO that Reuters previously reported could seek to raise $2b. axios.link/4A9Bnq5

• American Savings Bank, a Honolulu, Hawaii-based lender owned by Hawaiian Electric Industries (NYSE: HE), raised $129m in its IPO. It priced 8.1m shares at $16, versus plans to offer 7.5m shares at $15-$17. It will list on the NYSE (ASBH). axios.link/4iTzmrF

• OceanHawk Acquisition II, a SPAC formed by investment firm OceanHawk, filed for a $150m IPO. axios.link/4ht2QeP

• SPACCircle Acquisition, a SPAC led by John Dicconson (ex-CEO of DoceoTech), filed for a $150m IPO. axios.link/4xzhqGx

• Syngenta, a Swiss seeds and pesticides giant owned by China National Chemical, filed confidentially for a Hong Kong IPO that could raise around $5b, per Bloomberg. axios.link/4ipJkRr

⚡ Ichthys Energy Partners, backed by Post Oak Energy Capital, sold part of its Permian Basin assets to multiple buyers. axios.link/46lyCUT

• Arthur J. Gallagher & Co. (NYSE: AJG) acquired McMillan Insurance & Bonding (dba Innovise Business Consultants), an Englewood, Colo.-based commercial insurance brokerage. axios.link/4dleHJr

• Becklin Holdings acquired Chief Avionics, a Grants Pass, Ore.-based avionics repair services company. axios.link/4diEr9k

🚑 Waystar (Nasdaq: WAY) hired Evercore and Barclays to advise on a potential sale process, per Reuters. axios.link/4gTg7gC

🌎 Blackstone is targeting $8b for a private credit fund focused on renewables and digital infrastructure, per Bloomberg. axios.link/4yARgE5

• Brighteye Ventures held a $72m first close for its third European early-stage fund. axios.link/4xoiGft

• Goldman Sachs Asset Management raised $9.6b for its ninth flagship PE fund, plus $1.6b for an Asia-focused fund and $500m for related co-investment vehicles. axios.link/3VxoDte

• Portage, a fintech-focused VC firm, raised $600m for its fourth fund, per Axios Pro. axios.link/4rgXK8L

🚑 Ed Jones joined RoundTable Healthcare Partners as an operating partner. He previously was president and CEO of HealthTrust Performance Group. axios.link/46lDsS2

• Ibrahim Najafi, former CEO of Froneri, joined Bluegem Capital Partners as chief transformation officer. axios.link/4ixlDH4

• Roberto Nickson, a tech creator, joined Sound Ventures as a senior advisor. axios.link/4xvh2ZA

The Clarity Act, the crypto industry's top policy goal, yesterday failed to advance in a key Senate procedural vote, Axios' Pete Gannon writes.

• Much of the opposition relates to the Trump family's crypto investments, and a lack of ethics rules governing them.

Flashback: Coinbase chief legal officer Ryan ​VanGrack, a vet of both Citadel Securities and the Obama administration, told me in early July:

• "Clarity is on the one-yard line and I've seen nothing to suggest that the bipartisan group of senators working on it won't get it across the finish line. But to borrow a quote from Teddy Roosevelt: Nothing in the world is worth doing unless it means effort, pain, and difficulty."

Look ahead: Clarity isn't dead, but it will have to wait until after the midterms — when the Senate might be even more cantankerous.