SandboxAQ Seeks $5 Billion Valuation in New Funding Round for AI and Quantum Computing Ventures

SandboxAQ Reportedly Seeks $5 Billion Valuation for AI Startup | PYMNTS.com

Artificial intelligence startup SandboxAQ is reportedly plotting a fundraise that would value the company at $5 billion. The company, which spun off from Google parent company Alphabet, is in talks with possible investors about the equity funding round, Bloomberg reported Friday (Oct. 18), citing unnamed sources. SandboxAQ, which develops AI and cybersecurity services, said two years ago that it raised $500 million without revealing a valuation, per the report. The company's technology combines AI and quantum physics, training its AI using large numerical data -- rather than with language, the way chatbots like ChatGPT work. The largest of the company's three business units makes simulation software based on AI and quantum algorithms to make drug discovery faster and develop new chemistries for improved products such as batteries, the report said. PYMNTS explored the company's efforts earlier this year in an interview with Chris Hume, senior director of business operations for SandboxAQ. "The physical world is defined by quantum mechanics," he said. "The more effectively we can understand those interactions and then model those interactions, the more efficiently and effectively you can build predictive models. With the algorithms that we're developing combined with the classical computer hardware that's available today, you can build better predictive models, and that's the exciting part. And that's the opportunity at hand." In other AI news, PYMNTS wrote Friday about research at Apple casting doubt on the mathematical abilities of large language models, which in turn challenges the idea that AI is on the brink of human-like reasoning. "Any real-world application that requires reasoning of the sort that can be definitively verified (or not) is basically impossible for an LLM to get right with any degree of consistency," Selmer Bringsjord, professor at Rensselaer Polytechnic Institute, told PYMNTS, while making a distinction between AI and traditional computing. "What a calculator can do on your smartphone is something an LLM can't do -- because if someone really wanted to make sure that the result of a calculation you called for from your iPhone is correct, it would be possible, ultimately and invariably, for Apple to verify or falsify that result," he said.

Eric Schmidt's SandboxAQ aims for $5B valuation for its AI/quantum Google moonshot | TechCrunch

VCs are spending gobs of money on AI startups - especially those run by big names in tech - so SandboxAQ is putting its hand out again, even though it raised a whopping $500 million in early 2023. The spinout from Google parent company Alphabet is reportedly seeking to raise another round that would value it at $5 billion, sources tell Bloomberg. Its last $500 million round, completed in February, 2023, had backers like Breyer Capital, T. Rowe Price funds, and Marc Benioff, Reuters reported at the time. Pitchbook estimated its valuation after that round to be $4 billion. SandboxAQ began as Alphabet's moonshot AI quantum computing unit led by Jack Hidary, also known as a longtime X Prize board member. It was spun out of Alphabet into an independent startup in March 2022, with Hidary as CEO. Billionaire and former Google CEO Eric Schmidt became the startup's chairman. Its mission is a veritable alphabet soup of buzzwords: to work at the intersection of quantum computing and AI. But it is not building a quantum computer, although its software products should one day work with them, Hidary said on a recent episode of the Peter H. Diamandis podcast. Instead, it's building software based on quantum physics that can model molecules and make predictions of their behavior. Google is still working on the quantum computer part, but Hidary says SandboxAQ already has a number of quantum computing partnerships. The startup has its hands in a large and somewhat wild assortment of products across life science, materials science, navigation, encryption, and cybersecurity. It is not working with AI of the GenAI ChatGPT chatbot variety. Instead of predicting language, it is using large modeling AI techniques on equations. Or as Hidary explained, "Instead of the world of large language models, we've now entered the world of large quantitative models, LQMs. And LQMs are about starting with equations to generate data....That's the most efficient way to generate data, and the most accurate way to generate data." To that end, it already has a list of impressive developmental contracts. For instance, it is working on how to extend lithium-ion battery life with battery company Novonix; it has a contract with the US Air Force to develop a magnetic navigation systems that don't rely on GPS; and it's working with a number of U.S. hospitals on an AI-powered "magnetocardiography system," a new kind of medical device for imaging heart disease, among other projects. So, this AI is swinging for bigger fences than writing term papers or creating deepfake videos. Interestingly, there are some indicators that SandboxAQ could become one of the AI companies that VCs are eager to back. Throughout the year a number of investors have set up special purpose vehicles (SPVs) for the company's shares. As we previously reported, such SPVs have become a hot financial tool because so many investors are eager to get a piece of big-name AI startups. SandboxAQ did not immediately respond to our request for comment.

AI Startup SandboxAQ Seeks Funding at Over $5 Billion Valuation

SandboxAQ, a startup spun off from Alphabet Inc., is seeking to raise new equity funding at a valuation of more than $5 billion, according to people with knowledge of the matter. The company is in discussions with prospective investors, said the people, who asked not to be identified because the talks are confidential. The more than $5 billion valuation figure represents a pre-money basis, meaning it doesn't include the sum that is raised. Terms of the transaction haven't been finalized.