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😰 Situational awareness: Fears of a U.S. recession tanked global markets Monday. 

Accelerate360, the parent of the National Enquirer and other publications, is quietly planting seeds for a loud expansion.

Driving the news: On Friday afternoon, Accelerate360's media arm, a360media, announced plans to merge with local newspaper giant McClatchy — both of which are owned by hedge fund Chatham Asset Management.

McClatchy CEO and chairman Tony Hunter is expected to serve as CEO of the combined company.

The firm plans to divide the new enterprise into three divisions, separating McClatchy's local news efforts from a360media's celebrity titles and accelerate360's media distribution arm, Hunter told McClatchy in an interview that appeared in the Miami Herald, a McClatchy paper.

Chatham acquired McClatchy through a bankruptcy auction in 2020. Before the auction, Chatham was McClatchy's largest investor and creditor.

"The merger of these complementary companies creates a strong financial foundation that will foster further growth," a Chatham spokesperson tells Axios.

Between the lines: a360media recently announced plans to expand Us Weekly's print product and double down on new video offerings. 

Chatham is also a majority owner of the Canadian newspaper chain Postmedia, which agreed to acquire SaltWire — Atlantic Canada's largest newspaper chain — last month.

Catch up quick: a360media has tried and failed numerous times to sell the National Enquirer, following its involvement in the "catch and kill" scandal linked to Donald Trump's hush money payments.

a360 also owns other tabloids, including Star, National Examiner and Globe.

The intrigue: McClatchy executives said its tabloid publications would be excluded from the merger of McClatchy and accelerate360.

David Pecker, the controversial former National Enquirer publisher who consults for the company, will not be associated with the newly created entity.

A McClatchy spokesperson directed Axios to the Miami Herald story about the merger and declined to provide additional comment.

Zoom in: Hunter told McClatchy that back-office layoffs are likely, following the merger between accelerate360 and McClatchy, which houses 30 local U.S. newspapers.

McClatchy noted that a360media content has been available on McClatchy websites via a syndication agreement between the two firms that was established in 2022.

What to watch: Hunter told McClatchy that the merger frees up cash to allow the business to pursue more acquisitions.

Big splash

Groq, a startup whose chips are specialized for running AI models, raised $640 million in Series D funding at a $2.8 billion valuation led by BlackRock. 

Why it matters: As the AI race shows no sign of slowing down, investors and customers are looking to new infrastructure options that could give them an edge. 

Groq claims its chip, dubbed a "language processing unit" (or LPU), is faster and one-tenth of the cost of conventional graphics processing units commonly used in training AI models. 

Its chips are focused on "inference," that is running AI models, which is an increasing use as AI companies make their products available to users and customers. 

Zoom in: The company says it's recently decided to mostly focus — for now, at least — on selling access to its cloud services to AI developers over selling its chips to customers. 

"We found it hard to sell hardware because you couldn't viscerally experience it," Groq founder and CEO Jonathan Ross tells Axios. "Companies that are spending all this money ... they want something they can trust, they can believe in." 

Meanwhile, its cloud service has grown from having a few developers using it to 350,000 now, he adds. 

What's next: The company expects to reach over 100,000 chips deployed by the end of the first quarter next year, and 1.5 million by the end of 2025.  

It also hopes this new funding round helps it reach a scale at which it breaks even on its chips in less than two years, says Ross.   

Neuberger Berman, Type One Ventures, Cisco, KDDI and Samsung Catalyst Fund also participated in the round. 

Go deeper: AI chip startup Groq grabs the spotlight

chips are specialized for running AI models

Groq's $640m raise

a microchip with a money symbol cut out of the middle

Go deeper in our full database in the Axios Pro Deals Tracker.

• Moonshot, a Chinese generative AI startup, reportedly raised over $300m from Tencent, Gaorong Capital and insider Alibaba. Go deeper

• Contextual AI, a Mountain View, Calif., enterprise AI company, raised $80m in Series A funding led by Greycroft, with Bain Capital Ventures, Lightspeed, Lip-Bu Tan, Conviction, Recall Capital, Bezos Expeditions, NVentures, HSBC Ventures and Snowflake Ventures also participating. Go deeper

• Protect AI, a Seattle AI and machine learning security company, raised $60m in Series B funding led by Evolution Equity Partners, with 01 Advisors, StepStone Group, Samsung, Acrew Capital, boldstart ventures, Knollwood Capital, Pelion Ventures and Salesforce Ventures also participating. Go deeper

• LeafAgriculture, an LA farm data management startup, raised $11.3m in funding led by Spero Ventures, with Cultivian, Radicle Growth and SP Ventures also participating. Go deeper

• Hedra, a generative AI startup, raised $10m in seed funding from Index Ventures, Abstract, and A16Z Speedrun. Go deeper

• Cartridge Gaming Company, a developer of onchain games and tools, raised $7.5m in Series A funding led by Bitkraft Ventures. Go deeper

• DSTLRY, an independent comics publisher, raised a $5m seed round led by VC firm 1AM Gaming. Go deeper

• K1 acquired Board Intelligence, a London provider of software and services to corporate boards that had been backed by Susquehanna Growth Equity. Go deeper

• Shift Group, a Brookline, Mass., provider of career development for athletes and veterans, acquired TorchPro, a Manchester, N.H., digital sports media marketing firm. Go deeper

• Caesars Entertainment agreed to sell its World Series of Poker brand to NSUS Group for $500m, half in cash and half via promissory note due in five years. Go deeper

• Bill Simmons has had exploratory conversations about launching a new platform as his contract with Spotify expires in 2025, per New York Post. A Simmons spokesperson said the story is "incorrect and idle speculation". Go deeper

• Thrive Capital, the VC firm led by Joshua Kushner, raised $1b for its ninth early-stage fund and $4b for its third growth fund. Go deeper

Deal flow

• William Burns joined UBS as a managing director of media investment banking. He previously spent over a decade with Cowen. Go deeper

Movin' on up (or out)

🎙️ While "Pod Save America" tries to unite Democrats, its staff rebels (Bloomberg)

"Crooked Media was suddenly flush with cash and status. But instead of rallying the crew, the business' high profile within the Democratic Party fractured the group, just as the global podcasting industry also began undergoing convulsions of its own," Ashley Carman reports. 

😬 Willing to die for MrBeast (and $5 million) (NYT)

"Now, amid allegations about 'Beast Games' as well as recent accusations about inappropriate language used by Mr. [Jimmy] Donaldson and a former collaborator, his reputation, as well as his multimillion-dollar YouTube empire, are on the line," Madison Malone Kircher reports.

Channel surfing

an illustration of a television that says "channel surfing" on the screen being held up by hands on a dark smoky background

@tim_bays: Green Day: The Saviors Tour at Citi Field. Just playing two albums — Dookie and American Idiot — in their entirety. And a bonus that Smashing Pumpkins is one of the openers.

@kerrymflynn: "Queen of Versailles" at Emerson Colonial Theatre. Traveled to Boston over the weekend for this great show featuring Kristin Chenoweth, F. Murray Abraham and a tiny Pomeranian. Happy it's headed to Broadway!

✏️ Thanks to Michael Flaherty for editing and Katie Lewis for copy editing this newsletter.

Thank you for reading Axios Pro Media Deals! Please ask your friends, colleagues and McClatchy readers to sign up.

1 big thing: Big splash

2. The BFD: Groq's $640m raise

3. Deal flow

4. Movin' on up (or out)

5. Channel surfing

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August 05, 2024

1 big thing: Big splash