Davos consensus last week was that the U.S. had a giant lead in the AI race, with the only real question being if there would be enough general contractors to build all of the needed data centers.

• Ummm ... maybe not.

Driving the news: China's DeepSeek appears to have built AI models that rival OpenAI, while allegedly using much less money, chips, and energy.

• It's an open-source project hatched by a hedge fund, which at least for now seems aimed at developers instead of at enterprises or consumers. But that product focus could expand, particularly given that DeepSeek yesterday topped Apple's App Store.

The big picture: This could be an extinction-level event for venture capital firms that went all-in on foundational model companies. Particularly if those companies haven't yet productized with wide distribution.

• The quantums of capital are just so much more than anything VC has ever before disbursed, based on what might be a suddenly-stale thesis.
• If nanotech and web3 were venture industry grenades, this could be a nuclear bomb.
• Investors I spoke to over the weekend aren't panicking, but they're clearly concerned. Particularly that they could be taken so off-guard. Don't be surprised if some deals in process get paused.

Yes, but: There's still a ton we don't know about DeepSeek, including if it really spent as little money as it claims. And obviously there could be national security impediments for U.S. companies or consumers, given what we've seen with TikTok.

The bottom line: The game has changed.

JBS, a Brazilian meat producer, acquired a 50% stake in one of South America's largest egg producers, Mantiqueira Brasil, at around a $321 million valuation.

Why it's the BFD: This comes amidst a global surge in egg prices due to avian flu outbreaks.

• U.S. egg prices are estimated to climb by another 20.3% this year, per an Agriculture Department report, despite already hitting record highs on an 8.3% surge in December.
• Brazil thus far has avoided any outbreaks.

The bottom line: JBS is seeking to expand beyond its core meat business, and believes it can leverage its existing poultry assets to become an egg giant.

• Tive, a Boston-based provider of shipment monitoring solutions, raised $40m in Series C funding. WiL and Sageview Capital co-led, and were joined by AVP, RRE Ventures, Two Sigma Ventures, Qualcomm Ventures, Fifth Wall, Supply Chain Ventures, and Sorenson Capital. tive.com

🚑 Manas AI, a cancer drug discovery startup, raised $24.6m. Reid Hoffman and General Catalyst co-led, and were joined by Greylock. axios.link/4hzLZEB

🚑 Allara Health, a virtual care provider for women with chronic hormonal conditions, raised $26m in Series B funding. Index Ventures led, and was joined by GV. axios.link/3PXod9r

• Optable, a Montreal-based identity management and data collaboration platform, raised US$20m in Series A funding. Telus Global Ventures led, and was joined by Hearst Ventures, Brightspark Ventures, Desjardins Capital, Deloitte Ventures, and AsterX. optable.co

🚑 Gaia, a London-based fertility prediction and insurance startup, raised $14m in Series B funding led by Valar Ventures, per Axios Pro. axios.link/4hz1OeK

🌎 Sightline, a London-based climate tech analytics platform, raised $5.5m from backers like Molten Ventures. axios.link/3EbU6su

• Mobility Moji, an Irish accessibility analytics startup, raised €4.25m from Gresham House Ventures. axios.link/4jqpaox

• Applied Labs, an AI agents startup, raised $4.2m. Abstract led, and was joined by Point72 Ventures, Outlander, and Tetra. appliedlabs.io

⚡ Gryd Energy, a British solar hardware subscription startup, raised £1m in pre-seed funding from Black Seed VC and Oasthouse Ventures. axios.link/3WCfbTb

• Apollo Global Management completed its $3.6b take-private buyout of Barnes Group, a Bristol, Conn., maker of aerospace components. axios.link/3YdQGNb

• Aptean agreed to buy Atlanta-based supply chain software firm Logility (Nasdaq: LGTY) for around $482m in cash, or $14.30 per share. Aptean backers are TA Associates, Clearlake Capital, Charlesbank Capital Partners, and Insight Partners. axios.link/4gkahBg

• Apax Partners is in advanced talks to buy a stake in accounting firm CohnReznick at around a $2b valuation, per the WSJ. axios.link/4aAg04F

• Blackford Capital acquired Ace Controls, a Houston maker of industrial control panels. acecontrolsllc.com

⚡ Blackstone agreed to buy Potomac Energy Center, a natural gas plant in Loudoun County, Va., for a reported $1b. axios.link/3CymNPF

• Colt, a portfolio company of CapStreet Group, acquired RJ Stacey, a Lake Orion, Mich., provider of leak repair, hot tapping, line stopping, and blast furnace repair. coltgrp.com

🚑 DirectMed Imaging, a Poway, Calif., portfolio company of Frazier Healthcare Partners, acquired X-ray tube maker Richardson Healthcare from Richardson Electronics (Nasdaq: RELL). directmedimaging.com

• ICV Partners agreed to buy Environmental Remedies, a Hayward, Calif., provider of residential asbestos abatement services. environmentalremediesinc.com

• Northlane Capital Partners invested in Plus Delta Partners, a Carlsbad, Calif., provider of fundraising solutions for education and nonprofits. deltapluspartners.com

• Regent is in advanced talks to buy Foundry, publisher of PCWorld and Macworld, from Blackstone portfolio company IDG, per Axios Pro. axios.link/3PXtZYF

Four companies plan to price IPOs on U.S. exchanges this week: Smithfield Foods, Infinity Natural Resources, Beta Bionics, and RedCloud.

• Ferrari Group, an Italian provider of logistics for luxury products, said it will launch an Amsterdam IPO. axios.link/40KAZOV

🚑 Maze Therapeutics, a South SF-based human genetics biotech, set IPO terms to 7.8m shares at $15-$17. It would have a $715m fully diluted market value, were it to price in the middle, and plans to list on the Nasdaq (MAZE). Maze reports $168m in license revenue for the year ending Sept. 30, 2024, and raised nearly $600m from Third Rock Ventures (20.1% pre-IPO stake), Arch Venture Partners (11.8%), Matrix Capital Management (7.1%), GV (6.9%), Foresite Capital (6.7%), Frazier Life Sciences, Deep Track Capital, Janus Henderson Investors, and Logos Capital. axios.link/4haGnRj

🚑 Metsera, a New York-based developer of medicines for obesity and metabolic diseases, set IPO terms to 17.2m shares at $15-$17. It would have a $1.8b fully diluted market value, were it to price in the middle, and plans to list on the Nasdaq (MSTR).

• The pre-revenue company has raised $565m from Arch Venture Partners (28.1% pre-IPO stake), Population Health Partners (14.6%), Fidelity (8.1%), GV, (5.7%), Newpath Partners (5.6%), Mubadala (5.2%), SoftBank (5.5%), Wellington, Venrock, Janus Henderson, T. Rowe Price, Viking Global Investors, Deep Track Capital, RA Capital Management, Alpha Wave Ventures, and SymBiosis. axios.link/4jv2qng

⚡ One Power, a Findlay, Ohio-based industrial power company, filed for a $100m IPO. It previously planned to go public via SPAC but terminated the deal last July. Backers include Ecofin Investments. axios.link/3CkZV6n

• Soulpower Acquisition, a SPAC targeting insurance services and retirement savings companies, filed for a $200m IPO. axios.link/40QdPa5

⚡ Atlas Energy Solutions (NYESE: AESI) agreed to buy Permian Basin-focused Moser Energy Systems for $220m in cash and stock from Hilltop Opportunity Partners and WestFront Capital Group. axios.link/40uVgGR

🚑 CVC Capital Partners agreed to sell a 60% stake in Greek hospital chain Hellenic Healthcare Group to Abu Dhabi's PureHealth at a $2.3b valuation. CVC will retain a 35% position. axios.link/4ghUbZ1

⚡ Diversified Energy (NYSE: DEC) agreed to buy Permian Basin-focused Maverick Natural Resources for $1.28b from EIG. axios.link/4jzBeDI

☕ AlShaya Group of Kuwait has paused efforts to sell a stake in its MENA Starbucks franchise, which includes around 2,000 stores. axios.link/4gdPe3k

• Ancora Holdings plans to launch a proxy battle to force U.S. Steel (NYSE: X) to drop its merger with Nippon Steel (Tokyo: 5401) and oust its CEO, per the WSJ. axios.link/3Wz8b9E

• Emerson Electric (NYSE: EMR) agreed to buy the 43% stake it doesn't already hold in AspenTech (Nasdaq: AZPN) for $7.2b in cash, or $265 per share. axios.link/4gaswJq

• International Paper (NYSE: IP) received EU approval to buy British paper and packaging firm DS Smith (LSE: SMDS) for around £5.7b. axios.link/4h6uLi4

• QXO (Nasdaq: QXO) is going hostile on its rebuffed $11b takeover offer for Beacon Roofing Supply (Nasdaq: BECN). axios.link/3CyfwPS

• SGS (Swiss: SSGN) ended merger talks with Bureau Veritas (Paris: BVI). axios.link/40ryXSu

• UltraTech Cement of India is in talks to buy the Indian unit of German cement-maker Heidelberg, per Moneycontrol. axios.link/40Az0v8

• WH Smith (LSE: SMWH) hired Greenhill to explore a sale of its high street business, which includes around 500 stores. axios.link/4hrQKQn

• Francisco Partners raised $3.3b for its third opportunistic credit fund. franciscopartners.com

🚑 Brenton Fargnoli is joining Lightspeed Venture Partners as a partner and co-lead of the firm's health practice, Axios has learned. He's a doctor who was an early employee at Flatiron Health before joining AlleyCorp to launch its health-care team.

• Fargnoli tells me that the move will let him invest in larger companies with more geographic breadth, while continuing to focus on both value-based clinical care models and AI tools that "delight physicians."
• He first appeared in this newsletter (technically its predecessor) in 2011, when he was part of a Wharton team that won the VCIC Finals.

• David Farkas joined Macquarie Capital as a managing director focused on aerospace, defense and government services advisory. He previously led M&A and biz dev at GE Aerospace. axios.link/42qgHeU

🚑 Fabrice Chouraqui, a former CEO-partner at Flagship Pioneering, joined Amsterdam-listed Pharming Group as CEO. axios.link/42tnnsA

• Kevin Willsey is retiring as JPMorgan's global chair of investment banking and capital markets.

• The bank also named Nitin Maheshwari and Ravi Shankar as co-heads of India investment banking, per Bloomberg.