January 31, 2022
Image: Uriel SC/Unsplash
Hello and welcome to Protocol Enterprise! Today: why AWS and Microsoft are building AI hubs in China while warning about China’s AI plans, Citrix gets a call from private equity and the latest funding rounds for enterprise tech startups.
While AI text-processing services can occasionally produce some questionable results, more and more professionals are using them at work. According to Coresight Research, 41% of digital marketing executives surveyed in November 2021 are using natural language processing to produce content like business data reports, personalized emails and in-app messages.
There’s no law against U.S. companies developing AI in China, but the two biggest U.S. cloud companies are expanding their artificial intelligence and cloud-related efforts there despite warnings from their own executives about the AI-related threats posed by China’s government.
AWS is hiring for several AI engineering roles based in China. At the same time, Amazon’s CEO and former AWS chief Andy Jassy recently sat on an influential national commission that argued the U.S. was at risk of losing its technology leadership position to China as AI developments advance there.
Academic AI researchers historically have ignored borders and politics, instead collaborating globally in search of scientific advancement. But geopolitical voices are growing louder in the conversation around AI advancement.
In China, localization is mandatory.
China’s national efforts to develop AI and other emerging technologies were a serious concern at the National Security Commission on AI, a short-lived federal initiative launched in 2020 to review the state of AI and machine learning in the U.S.
China's government has signaled interest in collecting data from private companies, including foreign multinationals.
SaaS is still a hot target for private equity investment, even if the public markets are cooling on enterprise software. Vista Equity Partners and Evergreen Coast Capital, a division of Elliott Investment Management, announced Monday they are buying Citrix Systems for $16.5 billion in an all-cash deal.
PE firms have shown renewed interest in enterprise SaaS companies over the past two years, after sitting on treasure troves of cash without enough buying targets. Taking public tech companies private and then restructuring them is one way for PE firms to squeeze value out of a slowing market.
The Citrix acquisition is a perfect example: Vista plans to consolidate Citrix with TIBCO, an intelligence software business, to sell a combination of analytics, virtualization and cloud computing tools. Together, the combined company will have 400,000 customers, most of which are in the Fortune 500.
Private equity isn’t done with enterprise SaaS yet, and the tech stock dip might prove the perfect time to strike.
The cloud let chief information officers become more strategic and focused on building business value instead of managing IT as a cost center. Then the pandemic thrust CIOs into an even more central role: They became crucial leaders when managing remote work, navigating abrupt changes in business operations and accelerating digital transformation.
So what’s next for CIOs? Join Protocol’s Tom Krazit for a virtual event on Feb. 8 at 10 a.m. PT in discussion with four amazing IT leaders: Rob Carter, CIO, FedEx; Chris Bedi, CIO, ServiceNow; Sheila Jordan, Chief Digital Technology Officer, Honeywell; and Vittorio Cretella, CIO Procter & Gamble. RSVP here.
O9 raised $295 million for its AI-powered supply chain software, valuing the company at $2.7 billion.
Moglix, a B2B industrial marketplace, was valued at $2.6 billion after raising $250 million in a funding round co-led by Tiger Global.
Firebolt raised $100 million for its cloud data warehouse, valuing the startup at $1.4 billion.
SparkCognition’s cyberattack mitigation tech was valued at $1.4 billion after a $123 million funding round.
CaptivateIQ reached a valuation of $1.25 billion after raising $100 million for its sales commission software.
MinIO raised $103 million for its open-source multicloud storage solution, valuing the company at $1 billion.
Darwinbox, an HR platform, raised $72 million at a valuation north of $1 billion.
InstaDeep closed a $100 million funding round to expand its AI decision-making solution.
Cyara raised $350 million for its customer experience testing platform from K1 Investment Management.
Scale AI won a contract to provide testing and machine-learning management services to the Department of Defense that could be worth as much as $249 million.
Docker Desktop users must decide by the end of today if they need to purchase a new subscription license to the software or go in a different direction.
Demand for automotive chips helped NXP Semiconductors beat Wall Street expectations on a 21% jump in revenue.It’s been nearly three years since HPE bought storied high-performance computing company Cray, and plans for the next generation of the Slingshot interconnect are well underway, according to The Next Platform.
Thanks for reading — see you tomorrow!