Efforts to ban Chinese AI models in Washington, D.C., are meeting strong resistance in Silicon Valley from entrepreneurs and investors who fear it hands more power to Anthropic and OpenAI.

Why it matters: AI costs are ballooning, and companies don't want to be reliant on just one or two vendors for such critical tech.

What we're watching: There's increasing investor interest in one "prime" solution where the U.S. would have an open-source or open-weight alternative that is as powerful as the Chinese players.

• Closed models from OpenAI and Anthropic have taken the lead in the U.S. partly because of the economics.
• Closed models can make more money by charging for each query, but the pathway to monetization for open models is rockier.

State of play: It's still early days in the U.S. for open models.

• Thinking Machines, led by former OpenAI CTO Mira Murati, dropped its first model (an open-weights one), last week.
• The industry is also closely watching $25 billion Reflection AI, which has yet to release a model. Nvidia, meanwhile, has Nemotron.
• OpenAI also launched open-weight models last year.

What they're saying: "The open frontier is no longer just a Chinese story. It is an American one too," Benchmark's Bill Gurley wrote in a Washington Post op-ed. "Nearly everyone in the AI economy has a reason to prefer an open foundation — everyone, that is, except the big incumbents Anthropic and OpenAI, whose fortunes depend on keeping it closed."

Between the lines: Developments in new AI models are happening faster than ever.

• The conversation today has centered on Kimi K3, but the leading model in three to six months could be a whole different story.
• "The most important things to understand about the new AI race right now is that every metric is changing really fast right now," Artificial Analysis CEO Micah Hill-Smith tells Axios. Costs are going down inside of closed-source AI labs, while services companies are emerging aiming to also bring down bills.

The bottom line: Volatility is a big part of the AI industry right now. We're all just getting used to it.

Carlyle is in talks to hand control of ESG consultancy Anthesis Group to its lender Bridgepoint Group, per Bloomberg.

Why it's the BFD: Companies have been retreating from environmental, social, and governance efforts, and it's trickling into dealmaking.

• The term ESG is even falling off in corporate earnings calls.

Driving the news: Carlyle acquired a majority stake in the London-based company back in 2023 for about $538 million.

What they're saying: "The talks land amid a broader reckoning for environmental, social and governance consulting, which rode a wave of corporate net-zero pledges through the early 2020s but has since run into mounting political backlash." — Silas Brown, Bloomberg

• Anthropic has sued Abnormal AI alleging trademark infringement. At the same time, a judge granted Anthropic final approval for its $1.5b settlement of a class action lawsuit brought by a group of authors. axios.link/4fMmHEV

• Fluidstack, a NYC-based AI cloud platform, raised $830m in Series A funding at a $7.5b valuation in January, led by Situational Awareness. axios.link/4yxL7JO

⚡ Sila, an Alameda, Calif.-based battery technology company, raised $300m led by Atreides Management and Sutter Hill Ventures. 8VC, Bessemer Venture Partners, Matrix Partners, and T. Rowe Price Associates. axios.link/4fLQo95

• Neo, a Boston-based agentic security company, raised $100m in seed and Series A funding. Andreessen Horowitz, Bessemer Venture Partners, Craft Ventures and Merlin Ventures invested. axios.link/4w8Xfzb

• Raghu Vamsi Aerospace Group, an Indian aerospace and defense manufacturing company, raised a $40m round. Norwest and Skegen Asset Management led, joined by Indus Bridge Ventures and GJNX Ventures. axios.link/4wdWu7Z

• Veriqus Group, an Indian wealth tech firm, raised about $40m in funding led by Norwest Venture Partners. axios.link/44Z0HAN

• Neo Group, an Indian wealth and asset management firm, raised about $36.3m in funding led by Peak XV Partners. axios.link/4yy6x9x

• Twenty, an Arlington, Va.-based cyber warfare startup, raised $30m from Khosla Ventures at a $1.2b valuation. axios.link/44EnTUM

• Natural, an SF-based payments agents company, raised a $30m Series A round led by Forerunner. natural.com

• Runta, an SF-based platform for AI agent development, raised $20m in seed funding led by a16z. axios.link/4wgrcxx

• Hilo Health, a Swiss blood-pressure monitoring company, raised a $19 million Series B extension from Dell Family Office, per Axios Pro. Hilo has raised more than $119 million now. axios.link/3TclCgV

• Infinity, an SF-based inference startup, raised a $15m round at a $100m valuation from Touring Capital and Principal VC. axios.link/4pwRBod

⚡ NxLite, a Canton Township, Mich.-based manufacturer of energy-efficient glass coatings, raised $13.1m in Series A funding. Crabtree Lane Alt led, joined by VoLo Earth Ventures, Earth Foundry, MUUS, New Climate Ventures and ACT Venture Partners. axios.link/4wTocXx

• Uniti, a maker of AI agents for real estate operators, raised $12m in Series A funding, per Axios Pro. Pathlight led, joined by MetaProp, Prudence, Flex Capital and Alate. axios.link/3TvxP0e

• DeltaVision, a Munich-based manufacturer of fluidic systems for launchers, satellites, lunar landers and orbital servicing vehicles, raised €10.2m led by KT Ventures and Valemount Capital. deltavision.space

• Reo.Dev, an SF-based AI-native go-to-market platform, raised $11.3m in Series A funding. Elevation Capital led, joined by Heavybit, India Quotient, Foster Ventures and Uncorrelated Ventures. axios.link/4hileYc

⚡Bluecore Energy, a Port of Long Beach, Calif.-based maker of small modular reactors on barges, raised $10m in pre-seed funding led by Slauson & Co., per Axios Pro. axios.link/4pwCWco

⚡Sofab Inks, a Louisville, Ky.-based specialty materials for perovskite solar, raised $6m in seed funding. Cloudberry Ventures led. sofabinks.com

• Apaluma, a Albuquerque, N.M.-based regulatory records platform, raised $5.6m in seed funding led by Crosslink Capital and Kickstart, Haven Ventures and Overwater Ventures. Orange DAO and NM Vintage Fund joined. axios.link/4wYOJTD

• Photon Queue, a Champaign, Ill.-based quantum memory company, raised $4m in seed funding, led by Playground Global. axios.link/3Rpp7jq

• The Artificial Intelligence Infrastructure Partnership, a consortium including BlackRock's Global Infrastructure Partners and MGX completed their previously announced acquisition of Aligned Data Centers from Macquarie Asset Management and investors for $40b. Investors are considering putting another $5b into the deal. axios.link/3TwBlaJ

• Assisi Pet Care, backed by Wind Point, acquired Forthglade, a U.K.-based pet food and treats company, from IK Partners. axios.link/4yCqBrE

• Bain Capital agreed to acquire SupplyOn, a London-based supply chain collaboration platform. axios.link/4whwgSe

• Brookfield Asset Management and Canada Pension Plan Investment Board agreed to acquire N.Y.-based REIT LXP Industrial Trust LXP for $5.2b in cash. axios.link/4wguhO5

• Brightstar Capital Partners acquired BrightTree Studios, a Warrendale, Pa.-based tech design and consulting firm. axios.link/4fLfSU5

• Examinetics, backed by Coalesce Capital, acquired Progressive Safety, an Olathe, Kan.-based on-site safety provider, and Jurgiel & Associates, a St. Charles, Mo.-based industrial hygiene and safety consulting company. axios.link/4w8NbpW

⚡ Greenbelt Capital Management made a majority investment in Bowe & Gant Electrical Services, a provider of electrical and energy infrastructure services. axios.link/3RJe19e

• Pelican Energy Partners acquired Riggins Company, a Hampton, Va.-based metal fabrication and custom components maker. axios.link/45jKWEl

• Pepper Advantage, backed by J.C. Flowers & Co., acquired Dilosk DAC, an Irish residential mortgage origination and servicing platform. axios.link/4vI1Zeh

• Pine Services Group, backed by Evergreen, acquired Datel, a U.K.-based Sage software implementation advisory. axios.link/4pFzAnF

• SuanNutra, a Carbyne Equity Partners portfolio company, agreed to acquire IFF's (NYSE: IFF) botanical extracts, vitamins & minerals and food enhancement portfolio. axios.link/4wNMsKF

• Truelink Capital acquired Lyons Magnus, a Fresno, Calif.-based flavored ingredients and beverages company, from Paine Schwartz for a reported $1b valuation. axios.link/4wdWZPp

• Winterbird Partners invested in Emergent Software, a Microsoft services advisory. axios.link/4pACavd

• Gravitics Holdings, a Miami-based maker of orbital systems, filed to raise up to $125m. It posted $1m in revenue last year, and a net loss of $30.6m. New Dawn Investments and Type One Ventures back the firm. axios.link/4fqswGC

• Karman Space & Defense (NYSE: KRMN) agreed to acquire Walker Precision Engineering, a Scottish aerospace and defense engineering firm backed by BGF, for $94m. axios.link/4wYQlNb

• Vertiv Holdings (NYSE: VRT) acquired Strategic Thermal Labs, a Georgetown, Texas-based liquid cooling technology company backed by Carrier Ventures and Cowtown Angels. axios.link/4yM44IW

⚡Einride plans to acquire Flipturn, a NYC-based EV charging software startup, for $38.4m in stock, per Axios Pro. CRV and Accel backed Flipturn. axios.link/4pCvfSo

⚡Magnolia Oil & Gas (NYSE: MGY) agreed to buy WildFire Energy for about $4.1b. axios.link/4fm1Qs9

• Paramount Skydance's takeover of Warner Bros. Discovery has been paused by a U.S. federal judge. axios.link/4aXRMD2

🚑 Tempus AI (Nasdaq: TEM) agreed to buy Personalis (Nasdaq: PSNL), a Fremont, Calif.-based cancer genomics company, for $1.7b. axios.link/3Tfd1Km

• Reformation, a Vernon, Calif.-based women's clothing brand backed by Permira, is targeting a valuation of up to $1b in its IPO. per its updated S-1. axios.link/4yvKMY5

🚑 Scribe Therapeutics, an Alameda, Calif.-based molecular engineering startup co-founded by Jennifer Doudna, plans to raise up to $108m in an IPO, offering 7.2m shares priced between $13 and $15. It reported a $22m net loss on $51m of collaboration revenue in 2025, and plans to list on the Nasdaq (SCTX). It's raised $121m from a16z, Avoro Ventures, Eli Lilly, OrbiMed, T. Rowe Price, Perceptive Advisors,Wellington Management, RA Capital Management, and Menlo Ventures. axios.link/44BGBwf

• Zhongji Innolight (SHE: 300308), a Chinese optical transceivers company, will file to raise at least $8b in Hong Kong, per Reuters. axios.link/4puy3Rr

• Capitol Meridian Partners raised $1.9b for its second fund. capitolmeridian.com

• Dimension Capital raised $800m for its third fund. axios.link/4gJ3rt0

• Partners ‌Group ⁠closed ​its ​fourth direct infrastructure investment fund with over $15b. axios.link/4wcHmYt

• Brian Michaud was promoted to managing partner at Littlejohn & Co. axios.link/3T27ua6

• DCVC named Luis Bacalao as its chief legal officer. He was previously at Khosla Ventures. axios.link/4pxjZq3

• Hong Pan and Steve Talbot were named partners at Aqualis Partners. axios.link/45faz9o

Kimi K3 maker Moonshoot is reportedly preparing for a Hong Kong IPO in as soon as six months, per Bloomberg. That follows the release of its newest model last week rattling global markets, leading to a selloff in rivals including Z.AI.

• Shares of Z.AI are still above IPO levels, valued at HK$543.4 billion, or $69.3 billion, as of Tuesday morning.