Early-stage venture deals keep getting bigger, even once stripping out AI juggernauts. And that raises a multi-billion dollar question:

• If AI is supposed to supercharge productivity, why are startups raising more money? Shouldn't they need less?

By the numbers: Median early-stage round sizes are up year-over-year for most industry sectors, easily outpacing inflation, according to Q1 data compiled by PitchBook and provided to Axios.

• Not just in software, which includes many AI developers, but also in pharma/biotech (+29%), media (41%), IT hardware (71%), health-care systems (30.5%), and energy (79%).
• For PitchBook, "early-stage" means the company must be less than five years old and, if a series is specified, it should be an A or B.

The best explanation for this disconnect may be that AI hype hasn't yet translated into a ton of actionable use cases.

• The top ones so far are coding assistance and customer service automation, both of which can drive down startup costs but aren't necessarily game-changers.
• This is far different than when cloud computing took hold, dramatically cutting startup costs for both equipment and real estate (and, arguably, leading to the NYC tech boom).
• There also are some real-world cost increases, like Bay Area housing, but VC round sizes are climbing at a much faster clip.

The more cynical explanation may be that round size doesn't always match a startup's capital requirements.

• Venture capitalists often have their own calculus, tied to fund dynamics and ownership stake thresholds. Or the desire to use money as a competitive moat, particularly if they view a startup as operating in a winner-take-all market.
• Founders often lament taking more funding than they want, but either don't have better options or let future fundraising fears win out.
• Sometimes both sides are aligned on the gluttony, since larger checks can correspond to larger valuations.

Finally, there's the academic explanation of Jevons paradox, formulated by a British economist 160 years ago, whereby increased efficiency can lead to increased consumption.

• It's mostly been debated around areas like energy and agriculture, but soon may come to AI.

The bottom line: Venture capital talks a ton about the AI revolution, but so far is putting too much money where its mouth is.

Google lost a major antitrust case yesterday, with a federal judge ruling that it illegally dominates both the online advertising and ad-tech markets.

Why it's the BFD: This could lead to forced divestitures and sudden opportunity for runner-up rivals, were Google to also lose its appeal.

• Plus, Google may need to recalibrate some of its AI and cloud investments, which are largely funded by its ad business.

The bottom line: "The court drew a distinction between the markets for advertising exchanges and ad servers, where it found Google has an illegal monopoly, and the general market for display ads online (i.e., the old DoubleClick acquisition), where it found Google does not." — Sara Fischer & Scott Rosenberg, Axios

• Goodfire, an AI interpretability research company, raised $50m. Menlo Ventures led, joined by Lightspeed, B Capital, and Anthrolpic. axios.link/42m988M

• Meadow, a financial services provider for college students, raised $14m in Series A funding. Matrix Partners led, joined by insiders Susa Ventures, Giant Ventures, Treble Capital, and GoGlobal Ventures. axios.link/4jzbFCJ

🚑 Brellium, a startup using AI to audit patient charts, raised $16.7m in Series A funding, per Axios Pro. First Round Capital led, joined by insiders Left Lane Capital and Menlo Ventures. axios.link/43UzY92

• Cy4Data Labs, a San Jose, Calif.-based data protection startup, raised $10m led by Pelion Venture Partners. axios.link/3EgGsoq

• 1Fort, an AI platform for business insurance, raised $7.5m. Bonfire Ventures led, joined by Draper Associates, Village Global, Operator Partners, 8-Bit Capital, Character VC and Company Ventures. axios.link/4lA3qHK

• Spur, a startup that uses AI agents to test websites, raised $4.5m from First Round Capital, Pear VC, Neo, Conviction, Liquid 2 Ventures, and Predictive Venture Partners. axios.link/4ijtzYA

• Theseus, an SF-based developer of drone components that don't rely on GPS, raised $3.3m in seed funding. First Round Capital led, joined by YC and Lux Capital, per TechCrunch. axios.link/4jpRCGz

🚑 RISA Labs, a Palo Alto, Calif.-based oncology AI company, raised $3.5M in seed funding. Flipkart co-founder Binny Bansal led, joined by Oncology Ventures, General Catalyst, z21 Ventures, and ODD BIRD VC and Ashish Gupta. axios.link/42BVnSa

• Quilr, an Austin, Texas-based cybersecurity SaaS focused on "human-related security breaches," raised $3m led by Crew Capital. quilr.ai

• Hammer Missions, a U.K. drone startup focused on mapping for construction, raised £1.6m led by ACF Investors. axios.link/4ilD758

🚑 Ampersand Capital Partners invested in Lexington Medical, a Bedford, Mass., developer of minimally-invasive surgical stapling solutions. lexington-med.com

• Bow River Capital acquired CloudShare, an Israeli provider of cybersecurity training SaaS. axios.link/44tZUbI

• ECI Software, a portfolio company of Apax Partners and GIC, acquired Davisware, a Woodstock, Ill., provider of ERP software for field services businesses, from Serent Capital. davisware.com

🎵 GoldState Music, a music rights investment platform, raised $500m from Northleaf Capital Partners and Ares Management. goldstate.com

• Gyrus Capital acquired a majority stake in ACBC, an Italian sustainable shoe brand and consultancy. axios.link/4lAsyhD

• Ignite Visibility, a digital marketing agency owned by Mountaingate Capital, acquired Outliant, a web development and digital marketing agency. ignitevisibility.com

• IQ-EQ, a portfolio company of Astorg, agreed to acquire AMAL Group, a provider of corporate trust, agency services, and loan servicing in Australia and New Zealand. iqeq.com

• Mill Point Capital acquired Koozie Group, a Clearwater, Fla., promotion products manufacturer that will be merged with existing Mill Point portfolio company Garyline. kooziegroup.com

• MKD Electric, backed by Hastings Equity Partners, acquired Sea-Tac Electric, a Seattle-based electrical contractor. mkdelectric.com

• Monogram Capital Partners and Halmos Capital Partners acquired a majority equity stake in Vasco, a sports surfacing provider in Ohio and Florida. vascogroup.com

🚑 Patient Square Capital completed its $4.1b take-private buyout of dental and animal health products distributor Patterson Cos. axios.link/3BqQstJ

• Smart Safety, a portfolio company of Carr's Hill, acquired workplace safety companies SCTI (Florida) and Trinity Safety Management (Georgia). smartsafetygulfcoast.com

• Sports Endeavors, backed by Seawall Capital, acquired Soccer Master, a St. Louis-based soccer retail. sportsendeavors.com

• Checkr, a background check provider valued by VCs at $5b, agreed to acquire Truework, an income and employment verification startup, per Axios Pro. Truework had raised around $125m from firms like Sequoia Capital, Activant Capital, Khosla Ventures, G Squared, and TransUnion. axios.link/3Y6kHyh

⚡ Adani Ports of India agreed to buy Abbot Point Port, an Australian deep-water coal export facility, for nearly A$4b. axios.link/3Ro8Ac3

• Forge Global (NYSE: FRGE) agreed to acquire private equity indexing firm Accuidity for around $20m in cash and stock. axios.link/4iouzL1

⚡ Shell (NYSE: SHEL) short-listed Gunvor and Adnoc for its downstream assets in South Africa, per Bloomberg. axios.link/3YD2kky

• Uber (NYSE: UBER) is in talks to buy Turkish food delivery company Trendyol Go, per Bloomberg. axios.link/440hQe2

• Daft Ventures, an SF-based firm formed by Jon Dishotsky (ex-Giant Ventures, Starcity), is raising $30m for its debut fund, per an SEC filing.

• Grossman Ventures, whose managing directors include Tenable vets Healther Konold and Robert Hansen, is raising $50m for its first fund, per an SEC filing.

• J.C. Flowers is raising its sixth financial services-focused PE fund, per an SEC filing.

• Alper Daglioglu joined Brookfield to lead a new investment solutions group that will be chaired by Oaktree's Howard Marks. Daglioglu previously was with Morgan Stanley. axios.link/4lA6RhF

• Patrick McHenry, a former U.S. congressman (R-N.C) and chair of the House Financial Services Committee, joined Lazard as a senior advisor. lazard.com

• Geoff Ralston, former Y Combinator president, launched Safe Artificial Intelligence Fund. axios.link/3GrjH1u

• Shreya Shekhar joined Greylock as a partner. She previously was a founding engineer with Bedrock Security. axios.link/42RKDQQ

SPACs are back, and so is the volatility.

• Stock-trading app Webull began trading this week, more than a year after agreeing to go public via a merger with a SPAC sponsored by South Korean conglomerate SK.
• Shares surged nearly 375% on its first day of trading, but since have fallen below orbit. The current market cap is just over $12 billion, compared to the $7.5 billion deSPAC value and its last VC valuation of $3.6 billion.

By the numbers: SPACs have raised over $4 billion in IPOs so far this year, rushing in to fill the traditional issuer void, while there were six new filings this week that aim to raise more than $1 billion in aggregate.