Venture capital is pouring huge amounts of money into AI startups, especially those run by big tech companies, so SandboxAQ is once again on the fence despite raising a whopping $500 million in funding in early 2023. It's out.
The company, which was spun out of Google's parent company Alphabet, is seeking to raise new funding at a valuation of $5 billion, people familiar with the matter told Bloomberg. The last $500 million round, which closed in February 2023, had backers including Breyer Capital, T. Rowe Price Fund and Marc Benioff, Reuters reported at the time. Pitchbook estimated the valuation after this round at $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. The company spun out from Alphabet in March 2022 and became an independent startup, with Hidary appointed CEO. Billionaire and former Google CEO Eric Schmidt has been named chairman of the startup.
Its mission is to work at the intersection of quantum computing and AI, a veritable alphabet soup of buzzwords. But while the company isn't building quantum computers, its software products should someday work with quantum computers, Hidary said on a recent episode of the Peter H. Diamandis podcast. Instead, we are building software that can model molecules and predict their behavior based on quantum physics. While Google is still working on the quantum computing part, Hidary said SandboxAQ already has a number of quantum computing partnerships in place.
The startup has a large and somewhat wild product assortment spanning life sciences, materials science, navigation, cryptography, and cybersecurity.
GenAI ChatGPT chatbot AI does not work. Instead of predicting language, we use large-scale modeling AI techniques around equations. Or, as Hidary explained, “We entered the world of large-scale quantitative models, LQM, rather than a world of large-scale language models. And LQM is an equation for generating data. Start with … This is the most efficient way to generate data, and it is the most accurate way to generate data.”
To that end, the company already has an impressive list of development deals. For example, the company is working with battery company Novonix on ways to extend the life of lithium-ion batteries. It has a contract with the U.S. Air Force to develop a magnetic navigation system that does not rely on GPS. We are also working with a number of U.S. hospitals on projects such as the AI-powered “magnetocardiogram system,” a new type of medical device for imaging heart disease.
In other words, 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 keen to back. Throughout the year, many investors established special purpose vehicles (SPVs) for the company's shares. As we previously reported, such SPVs have become a hot financial tool as so many investors want to acquire a piece of well-known AI startups.
SandboxAQ did not immediately respond to a request for comment.