Abdulrahman Alfozan, the OpenAI engineer arrested for alleged spying, has a side gig as a venture capitalist.

Why it matters: This is a new type of AI safety scenario, as the case raises concerns of corporate or state-sponsored espionage.

Driving the news: Alfozan is a 35-year-old Saudi national accused of having installed a surreptitious audio recorder inside an executive conference room. Specifically, it was installed in a USB port on the back of a TV — wrapped in a highly engineered type of material known as toilet paper.

• He was arrested last Friday, at which time OpenAI fired him, and is in federal custody on charges of using a device to intercept oral communications. If convicted, Alfozan could face up to five years in prison.

Zoom in: Alfozan joined OpenAI just over a year ago, before which he was a founding engineer at Nash — whose backers include a16z — and a senior systems engineer at Meta.

• In February 2025 he also became a venture partner at Raed Ventures, a Saudi venture firm that's currently investing out of a $181 million third fund.
• Raed hasn't publicly commented and has removed neither Alfozan's bio nor the press release announcing his appointment from its website.
• There is no DOJ allegation of wrongdoing against Raed.

Zoom out: For such a sophisticated guy, this whole thing feels amateurish.

• For starters, the toilet paper. Second, Alfozan allegedly used an OpenAI chatbot (in his wife's name) to research how to make the device, test it and encrypt its data.
• He also is said to have "left a bag unattended in a different room in an OpenAI building. OpenAI security personnel found and opened Alfozan's bag, inside which they discovered — among other things, including Alfozan's wallet and ID — another recording device."
• James Bond this is not.

The bottom line: We don't yet know what Alfozan wanted to learn, or if he was acting alone. Don't be surprised, though, if this sort of thing gets added to the risk factors in the OpenAI and Anthropic IPO prospectuses.

Source: Giphy

Reese Witherspoon and France's Mediawan agreed to buy back Witherspoon's production firm Hello Sunshine from Blackstone-backed Candle Media.

Why it's the BFD: The Oscar winner sold high and is buying back low.

• Hello Sunshine was valued at $900 million when Candle acquired a control stake in 2021, but Axios has learned that the new deal is for just "a fraction" of that amount (low-to-mid eight figures).

Zoom in: Hello Sunshine productions have included "The Morning Show" and "Big Little Lies," plus Reese's Book Club.

Follow the money: Mediawan recently bought North Road, a production company whose founders — Peter Chernin and Jesse Jacobs — were early Hello Sunshine backers via their investment firm.

The bottom line: "Candle Media raised a lot of money at a time when the streaming wars were driving a boom in entertainment production spend. Eventually, that momentum slowed as streaming giants looked to live sports to grow.

• "The sale reflects Candle's shift away from its original plan to build an integrated media company and eventually sell it or take it public. Instead, the company is focusing on operating — and potentially selling — its individual brands." — Sara Fischer, Axios

• Modal, an SF-based AI infrastructure layer, raised $750m in Series D funding at a $15.75b post-money valuation, per Axios Pro. Accel led, joined by Kleiner Perkins and insiders Menlo Ventures, General Catalyst, Lux Capital, Redpoint Ventures, and Bain Capital Ventures. axios.link/4hGuo0w

• Bedrock Robotics, an SF-based developer of autonomous technology for construction vehicles, is raising $600m in Series C funding at a $3.5b pre-money valuation, per Axios Pro. axios.link/4zxgvrB

• Icon, an Austin, Texas-based robotic construction startup, raised $200m in Series D funding. Baillie Gifford and BlackRock led, joined by Capital Factory, CAZ Investments, Moderne Ventures, Moonshots Capital, Norwest, Overmatch, The Syndicate, and Tiger Global. axios.link/4hTWYdv

• Scanntech, a Brazilian retail intelligence platform, raised $180m in Series F funding. L Catterton led, joined by Partners Group, Bradesco, and SPX. axios.link/47QUqZ5

🚑 Soufflé Therapeutics, a Boston-based developer of RNA therapies, raised $135m in Series B funding. Juvia Group led, joined by TCG Crossover Management, BB Biotech, Fidelity, Balyasny Asset Management, Amgen Ventures, Arch Venture Partners, Bessemer Venture Partners, Breyer Capital, The Invus Group, Janus Henderson, Leaps by Bayer, Polaris Partners, Safar Partners, TAS Partners, Temasek, and Vida Ventures. axios.link/4yMQN2p

• Salience Labs, a U.K. developer of photonic chips for data center connectivity, raised $125m in Series B funding. Bullhound Capital led, joined by AMD Ventures, Intel Capital, SBI Group, Hudson River Trading, British Business Bank and insiders Applied Ventures, Oxford Science Enterprises, Cambridge Innovation Capital, and Silicon Catalyst Ventures. axios.link/4BbGy9q

• Albert, an Oakland, Calif.-based "chemistry-native AI operating system for R&D," raised $55m in Series B funding. TCV led, joined by Delta-v Capital, Socium Ventures, HighSage Ventures, Coral Capital, Legion VC, and insiders Coatue, JPMorgan Growth Equity Partners, Index Ventures, and Applied Ventures. axios.link/4dDdUUw

• Reach Security, an SF-based cybersecurity startup, raised more than $50m in Series B funding. Top Tier Capital led, joined by Ballistic Ventures, In-Q-Tel, and M12. axios.link/47PiGe7

🚑 Allara, an NYC-based women's health startup, raised $39m from Index Ventures, GV, Camino Partners, Foreground, and Family Fund, per Axios Pro. axios.link/47QTfZE

• Duvo, an enterprise OS, raised $32m in Series A funding. Balderton Capital led, joined by insiders Index Ventures, Northzone, and Credo Ventures. axios.link/4zzezPj

• EZ Bombs, a Mexican spice blend maker, raised $25m in Series A funding led by Cavu Consumer Partners, per Axios Pro. axios.link/47emFAR

• Scimplify, a chemicals production platform, raised $25m at a $250m post-money valuation. Hitachi Ventures led, joined by Henkel, Teknor Apex, Accel India, Bertelsmann India Investments, Omnivore, and 3one4 Capital. axios.link/3VAcC6C

🚑 Brellium, an NYC-based patient chart auditing startup, raised $23m in Series B funding, per Axios Pro. Left Lane Capital and First Round Capital led, joined by Digital Health Venture Partners. axios.link/4yrsgPu

• Tamr, a Cambridge, Mass.-based agentic master data management platform, raised $21m led by Volition Capital, per Axios Pro. axios.link/4yIJxo0

• Causa Prima, a German autonomous finance platform for businesses, raised $20m in seed funding. Base10 Partners led, joined by QED Investors, FJ Labs, Creandum, Kfund, and Borusan Ventures. axios.link/4jmf36E

• Zippy, a Beaverton, Ore.-based originator and servicer for manufactured housing finance, raised $20m in Series C funiding from Saluda Grade. axios.link/4Bc3YLY

⚡ Switched Source, a Chicago-based grid automation startup, raised $17m. Cubit Capital led, joined by ABB, Emerald Technology Ventures, Red Cedar Ventures, Southern States, and Southwire. axios.link/4s16IHP

⚡ Mana Battery, a Broomfield, Colo.-based sodium battery startup, raised $10.15m. Voyager Ventures led, joined by USV and Buff Gold Ventures. axios.link/4BaQErc

• Forgepoint, an NYC-based developer of AI agents for manufacturing, raised $9.8m in seed funding led by Primary Venture Partners and a16z, per Axios Pro. axios.link/4jkXOmb

• Evos, a developer of AI agents for small and midsize industrial businesses, raised $9m in pre-seed funding, per Axios Pro. Uncork Capital and Field Ventures led, joined by Crosslink Capital, Utopia Capital Management, and Sandwith Ventures. axios.link/47jt6Te

⚡ NEU Battery Materials, a Singaporean battery material recycling company, raised $7.6m led by Shift4Good and SGInnovate. axios.link/4rZygwZ

• Giraffe Bio, a Buenos Aires, Argentina-based developer of biomolecules to recover critical minerals like copper, raised $6.4m in seed funding. Orion Industrial Ventures led, joined by BHP Ventures and Twynaz. axios.link/4Bk4esi

• Dapta, a Miami-based sales automation platform, raised $6m in seed funding. Chingona Ventures led, joined by Crew Capital, Broom Ventures, Cometa VC, 500 Global, and Fen Ventures. axios.link/4ykaVYy

• Zaria, a Bitcoin loan servicing startup, raised $5.2m, per Axios Pro. Lightspeed led, joined by Refract Ventures and Epoch VC. axios.link/47jsBsk

🚑 Stride, a British preventive health platform, raised £4.6m in seed funding from Arāya Ventures, Morgan Stanley Inclusive & Sustainable Ventures, Better Ventures, and Innovate UK. axios.link/3VI6v01

• Alchera, a U.K.-based transport data and analytics platform, raised £2.7m in seed funding from Maven Capital Partners, Bayes Entrepreneurship Fund, The FSE Group, Cambridge Applied Research, and Innovate UK's Investor Partnerships. axios.link/4hRr4ys

⚡ Ardian and Hy24 agreed to buy Hynamics, a developer of clean hydrogen projects in France and the U.K., from EDF. axios.link/4zurl1n

🌎 Ara Partners acquired a majority stake in Pacific Ag, a Hermiston, Ore.-based crop residue supply and logistics company. axios.link/4dCnyGS

• ATL Partners acquired Precise Metal Products, a Phoenix-based provider of airflow management solutions, from Staple Street Capital. axios.link/4yciDnn

• Atlantic Ridge Capital and Grafine Partners agreed to buy Paragon Films, a maker of stretch and shrink films, from Rhône for around $900m. axios.link/4s8VZv0

• Bain Capital completed its $1.5b investment in Eaton Fiber, an affiliate of Tillman Global Holdings, for expansion of Verizon fiber broadband network deployment. axios.link/3U2aGCP

• BBH Capital Partners made a minority investment in Goal Solutions, a San Diego-based provider of loan servicing, asset management, and SPV administration. axios.link/3VESJLH

🚑 Fengate acquired a majority stake in CRWF, a clinical research site network in the Tampa Bay market. axios.link/4yi2xZq

🌎 Godspeed Capital acquired GreenVest, a Bowie, Md.-based provider of ecological restoration and resilience solutions. axios.link/4zqYLOl

🚑 Johnson & Johnson (NYSE: JNJ) said it's leaning toward spinning off its orthopedics unit, after having reportedly been in talks to sell it for around $20b to Apollo. axios.link/4hV9WId

🚑 Healthpoint Capital invested in Ospitek, a San Diego-based surgical software company. axios.link/4yfvZzh

• Llama Capital acquired Fabspeed Motorsport, a maker of aftermarket parts for exotic and sports cars. axios.link/3VPgGQo

• Northrim Horizon bought Cressy Door and Fireplace, a Seattle-based installation and repair company. axios.link/4zqPfuD

• ORS Nasco, an industrial maintenance products wholesaler backed by Wynnchurch Capital, is buying Techniweld & PowerWeld and several brands from Sycamore Partners-owned Essendant. axios.link/4hYSORG

• Terminus Capital Partners agreed to acquire Eventus, an Austin, Texas-based provider of trade surveillance and financial risk solutions. Eventus had raised around $60m from firms like Jump Capital, LiveOak Venture Partners, Coinbase Ventures, Chimera Securities, and Cadenza Capital. axios.link/3TUhDWU

• Terminus also acquired PickTrace, a Glendale, Calif.-based workforce management and compliance platform for agriculture. axios.link/4ymY73F

• EuroSPAC Acquisition Corp., a SPAC led by Euroseas CEO Aristides Pittas, filed for a $125m IPO. axios.link/4hJsR9Y

🚑 Frazier Life Sciences Acquisition II, a biotech SPAC, raised $75m in its IPO. axios.link/4hsQIte

🚑 Agilent Technologies (NYSE: A) agreed to acquire Philadelphia pathology software company Proscia for $240m in cash and up to $30m in earnouts. Proscia had raised around $130m from firms like Razor's Edge Ventures, Highline Capital, Flybridge, and Scale Venture Partners. axios.link/4euXiOW

🚑 Blackstone agreed to sell Irvine, Calif.-based dermatology products maker ZO Skin Health to Galderma (SIX: GALD) for $1.5b (including debt). axios.link/4hW5MQb

• Permira is in talks to sell credit platform Octus to London Stock Exchange Group (LSE: LSEG) for around $3.5b. axios.link/4s7rW6W

• PSP Capital agreed to sell StormTrap, a Romeoville, Ill.-based provider of stormwater management systems, to Advanced Drainage Systems (NYSE: WMS). axios.link/4jlq5ci

• Workday (Nasdaq: WDAY) agreed to acquire C1.ai, a Portland, Ore.-based agentic identification startup that had raised $111m from Alumni Ventures, Crowdstrike, Greycroft, Felicis, Glynn Capital, ASDF Ventures, Accel, Active Capital, Fathom Capital, and Fuel Capital. axios.link/3W8PLPD

• Ancora has built a stake in Big Yellow Group (LSE: BYG) and is asking the self-storage company to explore a sale, per Bloomberg. axios.link/4yiNdMg

• AT&T (NYSE: T) agreed to sell its Mexico business to Grupo Televisa and Fintech Holdings for $2b. axios.link/4ztuVsu

• Fairfax Financial (TSX: FFH) of Canada agreed to buy a majority stake in India's IDBI Bank for around US$5.43b. axios.link/4yNXsZV

⚡ Shell (LSE: SHEL) agreed to sell its Nigeria business to Vaaris Energy. axios.link/4yHuTxi

• Sprints, a London-based VC firm, raised €725m for its fifth fund. axios.link/4hTy51D

⚡️ Waterous Energy Fund plans to seek $1b for a single-asset fund focused on Canada's oil patch, per the WSJ. axios.link/4s2fVPU

• Castlelake promoted Luke Jackson and Betsy Sylvester to partners. axios.link/4yjoV4U

⚡️ CIV promoted Josh Zoffer and Mitchell Brady to partners. axios.link/4yIx5Vf

• Nkechi Iregbulem joined Sierra Ventures as head of inception. She previously was with MVP Ventures. axios.link/4s28loF

• Chip Nierlich is joining Debevoise & Plimpton as a partner in its antitrust group. He previously was with the DOJ's antitrust division. axios.link/4hVqgbF

• Reed Smith promoted Christopher Sheaffer to global chair of its private equity group. axios.link/4zw7nn0

Inflation heated up in September, with the Consumer Price Index rising 0.6% for the month and 3.7% year-over-year, increasing the odds of another Fed rate hike in 2026.

• Core CPI, which strips out energy and food prices, was up 0.3% for the month and 2.6% for the year.