🫧 $2B ChatGPT App, AI Bubble Trouble & Gemini’s IPO Play

Inside/VC Weekly #30 🎉

Aug 18, 2025

Good morning!

This is the 30th Inside/VC Brief! Catch up on the week in just 5 minutes.

Only got 20 secs? Here’s what matters most this week:

Let’s get into it.

Weekly Spotlight:

Sam Altman admits AI is in a bubble (🇺🇸)

OpenAI CEO Sam Altman just said the quiet part out loud: yes, we’re in an AI bubble. In a wide-ranging interview with The Verge, he compared today’s AI hype cycle to the dot-com boom of the ’90s, when internet startups soared on excitement before crashing in 2000.

“When bubbles happen, smart people get overexcited about a kernel of truth,” Altman said. The truth this time? AI really is transformative. But the irrational side is just as real: startups with “three people and an idea” are raising money at sky-high valuations. “That’s not rational behavior. Someone’s gonna get burned there,” he added.

Despite the warning, Altman believes the froth could still be a net positive for the economy. Some investors will lose billions, others will mint them, but the broader infrastructure, talent, and adoption built during the bubble will stick around.

And where does OpenAI fit? Altman made clear he expects the company to survive the burst. Translation: the bubble may pop, but OpenAI wants to be the Google-after-dot-com, not the Pets.com punchline. Read more

Inside/VC Shorts

🚀 Startup Shorts:

ChatGPT’s mobile app hits $2B in revenue (🇺🇸)

Since launching in 2023, ChatGPT’s iOS and Android apps have generated $2 billion in consumer spending, according to Appfigures. That’s ~30x more than rivals like Claude, Copilot, and Grok combined. So far in 2025, the app has already made $1.35B, up 673% YoY, averaging nearly $193M per month.

By comparison, Musk’s Grok has earned just $25.6M this year, or 1.9% of ChatGPT’s haul. Lifetime revenue per install tells the same story: ChatGPT leads at $2.91, versus Claude ($2.55), Grok ($0.75), and Copilot ($0.28). In the U.S., spending per download jumps to a staggering $10.

The app has now been installed 690M times globally, with India (#1) and the U.S. (#2) leading downloads. With 45M monthly installs and 38% of lifetime revenue coming from America, ChatGPT’s mobile dominance leaves competitors gasping for air. Read more

Klarna Q2 revenue jumps 20% to $823M (🇸🇪)

Klarna just posted a strong Q2 with $823M in revenue (+20% YoY) and a GMV of $31.2B (+19%). Active users surged by 26M to 111M, fueled by a booming U.S. business where GMV spiked +37% YoY. Walmart even tapped Klarna as its exclusive “OnePay Later” partner.

Europe also delivered, with the UK up 38% and Southern Europe exploding 74%. Klarna’s expansion into eBay and deeper PSP integrations mean merchants can plug in “Pay Later,” “Pay in Full,” and new Fair Financing options with no extra dev work.

The Klarna Card is becoming a key driver, now accepted at 150M merchants (self-claimed) worldwide. With a U.S. rollout planned for late 2025 (5M already on the waitlist), BNPL is looking more like “Buy Now, Conquer Later.” Read more

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xAI co-founder Igor Babuschkin exits to launch his own VC (🇺🇸)

xAI co-founder Igor Babuschkin just left the Elon Musk–backed AI startup to found Babuschkin Ventures, a new firm aimed at funding AI startups and safety research. He announced his departure on X: “Today was my last day at xAI, the company I co-founded with Elon in 2023.”

The timing isn’t great: xAI’s chatbot Grok has been under fire for scandals ranging from antisemitic comments to AI-generated celebrity nudes. Babuschkin, however, framed the move as a mission shift — to support AI that “pushes humanity forward and solves the universe’s riddles.”

Reflecting on xAI’s early days, he credited Musk with two lessons: dive deep into technical problems and operate with near-manic urgency. Before xAI, Babuschkin worked at DeepMind and OpenAI. Now, he’s betting his next chapter will shape not just AI products, but the AI ecosystem itself. Read more

Sam Altman backs $850M brain implant rival to Neuralink (🇺🇸)

OpenAI CEO Sam Altman is co-founding Merge Labs, a brain-computer interface startup gunning straight at Elon Musk’s Neuralink. The new venture is reportedly raising $250M at an $850M valuation, with most of the cash coming from OpenAI’s own venture arm.

Altman won’t run day-to-day ops but is teaming up with Worldcoin’s Alex Blania to push the project. The move deepens a long-running feud with Musk, who left OpenAI’s board in 2018 and now sues Altman over OpenAI’s shift to a for-profit model.

Neuralink itself raised $650M at a $9B valuation earlier this year, but Merge enters a hot market alongside Precision Neuroscience and Synchron. For Altman, it’s the realization of a concept he blogged back in 2017: “The Merge” — a future where humans and machines literally fuse. Read more

💸 Fundraising Shorts:

Perplexity AI eyes $20B valuation amid Chrome bid (🇺🇸)

AI search startup Perplexity AI is seeking a $20B valuation in its next funding round, just weeks after making a bold $34.5B unsolicited offer to acquire Google Chrome. That’s up from an $18B valuation in July — and a staggering 3,700% surge since early 2024.

With $80M ARR and 22M monthly active users, Perplexity is expanding aggressively. It recently launched its own AI browser, Comet, while rivals like OpenAI and Apollo Global are also circling Chrome as regulators weigh a forced Google divestiture. Read more

Cohere raises $500M at $6.8B valuation (🇨🇦)

Canadian AI startup Cohere has secured $500M from Radical Ventures, Inovia, Nvidia, AMD, Salesforce Ventures and others, boosting its valuation to $6.8B. The round comes as Cohere doubles down on enterprise clients, pitching itself as a more secure alternative to OpenAI and Anthropic.

The company, founded by ex-Google scientists, just hired former Meta AI chief Joelle Pineau as Chief AI Officer and ex-Uber exec Francois Chadwick as CFO. With annual recurring revenue now at $100M and big-name clients like RBC, Fujitsu, Oracle and Dell, Cohere is betting that sovereignty and trust will win over regulated industries. Read more

Winklevoss twins’ Gemini files for IPO (🇺🇸)

Crypto exchange Gemini, founded in 2014 by billionaire twins Cameron and Tyler Winklevoss (best known for their early legal battle with Mark Zuckerberg over Facebook) has filed to list on the Nasdaq under ticker GEMI. The company operates as an exchange, custodian bank, and also issues a USD-backed stablecoin plus a crypto rewards card.

🎬 Movie Tip: Haven’t seen The Social Network (2010)? It’s basically Winklevoss Twins vs. Zuck (the origin story before Gemini).

The filing shows steep losses: Gemini lost $282.5M on $67.9M revenue in H1 2025, already more than all of last year’s losses. It joins a wave of crypto IPOs, following Circle’s $1.2B debut in June and Bullish’s $1.1B raise earlier this month. Read more

🧑‍💻 Career Corner: Hot VC Jobs (Worldwide)

🇩🇪 Alstin Capital - Visiting Analyst (Munich) ➤ Job desc.

🇩🇪 Heliad AG - VC Intern (Frankfurt) ➤ Job desc.

🇬🇧 Alicorn Venture Partners - Analyst Intern (London) ➤ Job desc.

🇬🇧 Jack and Jill - VC Associate (London) ➤ Job desc.

🇩🇪🇬🇧🇦🇹 Speedinvest - VC Associate (London/Munich/Berlin/Vienna) ➤ Job desc.

🇺🇸 Toyota Ventures - VC Associate (Los Altos) ➤ Job desc.

🇺🇸 Reciprocal Ventures - VC Associate (New York) ➤ Job desc.

🇺🇸 Rho - VC Partnership Manager (San Francisco) ➤ Job desc.

🇸🇬 Amand Ventures - Investment Associate (Singapore) ➤ Job desc.

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Cheers 🥂