The latest: Amazon reportedly is in talks to invest $10 billion or more in the ChatGPT maker, which already counts giants like Microsoft among its investors. Perhaps the most recent (and loudest) news cycle, however, had nothing directly to do with funding at all—social media lit up with reports that CEO Sam Altman had issued a “code red” to the OpenAI team, saying it was time to double down on improving ChatGPT (the LLM that started it all) or risk falling behind.

Fortune’s tech team recently dove into what’s going on behind the scenes, in a feature published this week and helmed by Jeremy Kahn, Alexei Oreskovic, and Lee Clifford. They wrote: 

The internal call to arms lays bare the very precarious position this market leader is now in, particularly as it confronts industry titans like Google (as well as Microsoft and Meta), with tens of billions of dollars in cash on their balance sheets and massive ecosystems of products to boost their distribution.  

For Altman, a longtime tech entrepreneur, the historic matchups of Silicon Valley’s past, pitting innovators and incumbents in winner-takes-all battles, are surely contributing to the sense of urgency: The annihilation of browser pioneer Netscape by Microsoft or the eclipse of BlackBerry’s handheld communications gadgets by Apple’s iPhone comes to mind. But there’s also the example set by Facebook founder Mark Zuckerberg, whose famous “lockdowns” over a decade ago helped repel the threat of Google’s nascent—and ultimately doomed—social networking product. 

The decisions made by OpenAI and its competitors at this critical juncture in a fast-moving market will decide which company cements its hold on what some have called the most transformative technology since electricity, and which will end up as odd footnotes in the final writing of the history of AI. 

Many Term Sheet readers know I love a good history lesson. (Did you know that venture capital has its roots in the financial structure of whaling ventures?) And lots of people like to say that AI marks an Industrial Revolution-esque change. If I’m honest, for all my skepticism, I do believe that. 

So, that means history is being written right now. One “code red” here or there is incremental, but could make all the long-term difference. Read the whole story here. 

Term Sheet Next… My colleague Lily Mae Lazarus just published this Term Sheet Next profile of Ari Malik, cofounder of Salient AI. He talks candidly about the company’s $25 million ARR—and how they’ve yet to lose a customer to churn. Read it here.

See you Monday,

Allie Garfinkle
X: @agarfinks
Email: alexandra.garfinkle@fortune.com
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Venture Deals

– Lovable, a Stockholm-based vibe coding platform, raised $330 million in Series B funding. CapitalG and Menlo Ventures led the round, and were joined by Salesforce Ventures, HubSpot Ventures, Accel, Evantic, Creandum, and others.

– Edison Scientific, a San Francisco-based AI platform for scientific R&D, raised $70 million in seed funding. Triatomic Capital, Spark Capital, and an undisclosed major US institutional biotech investor led the round. They were joined by Pillar VC, Susa Ventures, Striker Venture Partners, Hawktail VC, Olive VC, and others.

– Endra AI, a Stockholm-based mechanical, electrical, and plumbing engineering platform, raised $20 million in seed funding. Notion Capital led the round, and was joined by Norrsken VC.

– Ember LifeSciences, a Westlake Village, Calif.-based cold chain technology company, raised $16.5 million in Series A funding. Sea Court Capital led the round, and was joined by Cardinal Health, Carrier Ventures, and others.

– ZeroPhase, a Munich, Germany-based startup building a communication layer for unmanned defense systems, raised €5.8 million in seed funding. BlueYard Capital led the round.

– Thread, a New York-based AI service desk platform for managed service providers, raised $18 million in growth equity funding. Susquehanna Growth Equity led the round, and they were joined by Headline.

Private Equity

– Arctos Partners acquired a minority stake in Monumental Sports & Entertainment, a Washington, D.C.-based sports and venue management company. Financial terms were not disclosed.

“I was actually getting my MBA, and my last class was product marketing, and they said, ‘You are the product. Take yourself to the market,’” Baich said. “So, I literally came up with a plan to become a CISO, and I executed on it.”

That plan eventually ended up landing Baich his first gig as a CISO at data broker company ChoicePoint. At the time, he said, the idea of a C-suite role for information security was still nascent.

“When I look back on it was very interesting about what the role and the expectations in the boardroom and the C-suite was for CISO,” Baich said. “The challenges primarily were around helping the organization culturally understand: What does a CISO do and what value does it bring to the organization?”

In the beginning. Baich, who has now worn the CISO hat five times, sat down with IT Brew to discuss his career journey, recalling the first time he realized his interest in computers.

“We started doing computer programming in the Pascal language, and I thought just how interesting it was to create a Boolean logic if-then type of thing which could then cause you to take certain actions,” Baich said.

That fascination stuck with Baich even as he attended the Naval Academy and later completed military service: “I focused in areas like surface warfare and then cryptology, information warfare, and space.”

Critical point. The similarities between the military and Baich’s CISO role at ChoicePoint and later, American Insurance Group and Wells Fargo, were striking.

“Luckily for me, cybersecurity is as close to being in the military as you can get from most jobs, because you’re constantly trying to defend against adversaries that are trying to obviously, either do harm or form some type of mischievous activity.”

When reflecting on his experience at several top companies in the critical infrastructures sector, Baich said regulations have their value, but believes it can slow down organizations.

“Oftentimes, it can cause you to have to focus in areas that may not be the most important, but you need to make sure you meet those regulatory requirements,” Baich said. He was up for the challenge, joining the CIA in 2022 as CISO and director of the office of cybersecurity.

Jennifer Ewbank, founder of Andaman Strategic Advisors and a former deputy director of CIA for digital innovation, told IT Brew that Baich was her pick for the role, given his “ability to translate complex matters into simple,clear priorities” and his “desire to serve his country.” She added that Baich came into the organization with the goal of understanding its needs and made a large impact, despite his short stint there.

“He came in sincerely wanting to study and understand and meet everyone and appreciate the unique skills that they had and the strengths that they brought to the mission,” Ewbank said. “That approach, I thought, was very effective.”

AT&T…&Rich! After a year at the CIA, Baich joined AT&T as CISO and SVP in 2023, with the goal of helping the company modernize.

“Technology has not been [standing] still. Everything from satellites to quantum to AI, all those emerging technologies,” Baich said. “As a result of that, we need to have an appropriate workforce to be able to defend against all those.”

Part of that included building AI literacy among AT&T employees. Baich estimates that, in the past year, his team spent more than 16,000 hours completing AI training and labs. Employees are also creating short videos of AI use cases that are circulated within the organization for learning purposes.

“It’s not just about learning about AI, because it’s like going to school. Just because you learn about biology does not mean you’re going to operate on somebody,” Baich said. “We want to give that foundation for either new employees or older employees, to get everyone comfortable, to understand how AI works.”

The company has also spent time boosting its security down its customer stack. The company disclosed a breach in March 2024 containing a data set from 2019 that impacted 7.6 million current account holders, along with another incident in July 2024 involving customer data from a third-party cloud platform. Earlier this year, it disclosed a strategic agreement with Palo Alto Networks to deliver “secure connectivity solutions” to aid businesses and their security needs. Meanwhile, the company’s threat protection offering, AT&T Dynamic Defense, that “filters out bad traffic” has been hard at work. The company estimates it blocks 30 billion threats per month.

Baich also spends time bolstering the company’s collective defense against threats by collaborating with others in the industry. The company established an information-sharing agreement that allows it to share information with CISOs and operators in 7 countries.

“We’re only as strong as the weakest link amongst us all,” Baich said. “We all want to learn from each other.”

This report was originally published by IT Brew.

While America’s labor market may not be collapsing, Moody’s Analytics has highlighted that it is inching steadily closer towards a key recession indicator, with analysts now placing the probability of an economic contraction at around 40%.

According to the Bureau of Labor Statistics (BLS), the unemployment rate for November edged up to 4.6%, continuing the creep higher that analysts have been nervously monitoring throughout the year. The BLS noted a meagre 64,000 roles were created last month, showing little net change from April this year.

While 4.6% is not a dire figure—around 4% is seen as a reasonable rate of unemployment in a relatively stable economy—it is markedly higher than last November, when it was 4.2%. But it’s not necessarily the rate of unemployment that is making economists nervous. Rather, it’s the broader trend of decline and what this demonstrates about the trajectory of the economy.