AI This Week

According to a study by EY Ireland, venture capital investment in generative AI has reached $49.2 billion in the first half of 2025, surpassing the total for all of 2024. The average deal size has tripled to $1.5 billion as investors focus on later-stage companies. The US dominates the market, accounting for 97% of global deal value. Key growth areas include agentic AI and specialized real-world applications. The study also notes a shift towards companies building software on third-party foundation models.

China has accused Nvidia of embedding a backdoor into its H20 chip, stirring tensions between Beijing and the U.S. The Cyberspace Administration of China claims that the chip contains location tracking and remote shutdown capabilities, raising significant national security concerns. These allegations surface just as Nvidia resumes H20 exports to China, following a temporary lift of U.S. restrictions. However, specifics on the backdoor claims remain vague. Nvidia has yet to comment. Meanwhile, China is actively boosting its domestic AI chip production, reducing reliance on foreign manufacturers. U.S. lawmakers are divided over renewed H20 sales, fearing risks to national security. This high-stakes technology conflict highlights the growing scrutiny over export controls and strategic chip supply chains.

Major technology companies are seeing strong returns on their massive artificial intelligence investments. Despite concerns over ballooning capital expenditures, firms like Microsoft, Meta, Amazon, and Alphabet are experiencing increased demand for AI-powered services across cloud computing, digital advertising, and internet search. This has led to revenue growth and positive investor sentiment. AI is becoming a primary growth engine for Big Tech, with companies ramping up spending to meet soaring demand. 

Inbenta has announced significant achievements for the first half of 2025, reporting a 50% year-over-year rise in new customer acquisitions and expanded traction in European markets. The company saw a 21% increase in revenue from existing clients through enhanced platform usage, professional services, and added offerings. Use of its AI-powered solutions surged, with enterprise integrations scaling by 54%, showcasing the platform’s adaptability for demanding environments. Additionally, Inbenta improved profitability while advancing innovation and preparing a major platform update slated for later this year. CEO Melissa Solis highlighted the team’s dedication and the platform’s growing impact on leading enterprises. With its AI applications delivering measurable results, Inbenta positions itself for further growth.

A groundbreaking AI model, Hierarchical Reasoning Model (HRM), developed by Sapient Intelligence, proves smaller can be smarter. With only 27 million parameters, HRM tackles reasoning puzzles that stump massive models like ChatGPT. Unlike traditional Chain-of-Thought methods, which falter with missteps, HRM mimics the brain with two modules: a strategic “planner” and a rapid “worker.” This novel approach enables deep reasoning in a single forward pass. HRM has delivered stunning results. On the ARC-AGI benchmark, it outperformed larger models, and in extreme Sudoku and maze challenges, it excelled where others failed entirely. Its efficiency promises cheaper deployment, faster training, and innovative possibilities for local AI systems.