💰 Google Backs AI Startups with New Fund

Welcome, AI enthusiasts

Google introduced its AI Futures Fund — a new initiative designed to empower AI startups with more than just capital. Selected ventures will gain direct access to Google’s AI models like Gemini, personalized support from Google’s top minds in research, engineering, and marketing, plus premium cloud resources to scale faster. The future of AI is being built and Google is helping lay the foundation. Let’s dive in! 

In today’s insights:

• Google Backs AI Startups with New Fund

• AI Reasoning Models Near Performance Limit, Analysis Finds

• Chegg Cuts Workforce Amid AI Rise

Read time: 5 minutes

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GOOGLE
💰 Google Backs AI Startups with New Fund

Evolving AI: Google's AI Futures Fund boosts startups with funding, models, and cloud resources.

Key Points:

• Google launches AI Futures Fund, investing directly in promising AI startups.

• Startups gain early access to Google's advanced AI models, including Gemini.

• Selected companies receive support from Google experts and cloud credits.

Details:

Google has unveiled the AI Futures Fund, dedicated to fueling AI startups by offering financial investment, direct access to Google's advanced AI models like Gemini, and personalized assistance from Google researchers, engineers, and marketing specialists. Participants also receive Google Cloud credits, enhancing their development capabilities. This initiative expands Google's commitment to leading AI innovation, joining recent major investments in generative AI companies such as Anthropic.

Read Google’s official announcement here —>

Why It Matters:

By offering startups early access to its models, Google isn’t waiting for the next big thing to appear. It’s placing itself at the center of it. The AI Futures Fund lets Google shape how new tools are built, which APIs get used, and whose infrastructure those products will depend on. In return, startups get a huge head start — access to Gemini, cloud compute, and direct input from Google teams. The result: a new generation of AI companies that are fast, well-funded, and built on Google’s terms.

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EPOCH AI
🤔 AI Reasoning Models Near Performance Limit, Analysis Finds

Evolving AI: Progress in AI reasoning models may soon hit limits.

Key Points:

• Reasoning AI models like OpenAI’s o3 have significantly improved benchmarks for math and programming.

• Epoch AI reports that performance gains from these models could start slowing within a year.

• Reinforcement learning, the main method behind these models, faces practical and financial limits.

Details:

Epoch AI's analysis highlights that AI reasoning models, which have boosted problem-solving capabilities, may soon face diminishing returns. Reinforcement learning has accelerated performance, but there is an upper limit to how much computing power can sustainably improve these models. Increasing costs and inherent technical hurdles might curb future advancements by 2026, signaling caution for the AI industry.

Why It Matters:

Reinforcement learning has helped models like o3 get much better at step-by-step reasoning. But we may be near the limit of what this approach can do. As each gain gets more expensive and harder to achieve, progress could slow down. If that happens, AI won’t stop improving, but we’ll need a new breakthrough. Something beyond just scaling. This moment might mark the end of one era… and the start of whatever comes next.

CHEGG
🔻 Chegg Cuts Workforce Amid AI Rise

Evolving AI: Chegg slashes jobs as students shift to AI tools.

Key Points:

• Chegg laying off 248 employees (22% of workforce).

• Closure of U.S. and Canada offices by year-end.

• Revenue down 30% with 31% subscriber decline.

Details:

Chegg is significantly reducing its workforce and closing offices in the U.S. and Canada, driven by declining traffic as students favor AI-powered alternatives such as ChatGPT. Revenue has dropped sharply, along with subscriber numbers, prompting Chegg to cut marketing and product development expenses. The layoffs and restructuring aim to save over $100 million annually by 2026.

Why It Matters:

Chegg didn’t just lose subscribers, but it lost relevance. Students are skipping traditional tools and turning straight to AI for answers. This isn't a slow shift. It's a sudden collapse of a business model that couldn’t adapt fast enough. The bigger story here isn’t about one company. It’s about how quickly AI is replacing old systems in education.

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