VCs are spending a lot of money on AI startups, especially those run by big names in tech. So SandboxAQ is reaching out again, despite having raised a whopping $500 million in early 2023.
The company, which was spun off from Google’s parent company Alphabet, is said to be seeking to raise another investment that could value it at $5 billion, according to sources. The last $500 million round, completed in February 2023, had backers such as Breyer Capital, the T. Rowe Price fund and Marc Benioff, Reuters reported at the time. PitchBook estimated the valuation after that round at $4 billion.
SandboxAQ started as Alphabet’s Moonshot AI quantum computing unit, led by Jack Hidary, also known as a longtime X Prize board member. It was spun off from Alphabet as an independent startup in March 2022, with Hidary serving as CEO. Eric Schmidt, billionaire and former CEO of Google, became chairman of the startup.
Its mission is a veritable alphabet soup of buzzwords, working at the intersection of quantum computing and AI. However, Hidary said on a recent episode of the Peter H. Diamandis podcast that he is not building a quantum computer, although his software products may one day work with quantum computers. Instead, we are building software based on quantum physics that can model molecules and predict their behavior. Google is still working on the quantum computing part, but Hidary says SandboxAQ already has several quantum computing partnerships in place.
The startup has a large and somewhat diverse product offering across life sciences, materials science, navigation, cryptography, and cybersecurity.
It does not work with AI of the generative AI ChatGPT chatbot variety. Instead of predicting language, we are using large-scale modeling AI techniques for equations. Or, as Hidary explains, “Instead of a world of large-scale language models, we are now in a world of LQMs, large-scale quantitative models. LQM is about starting with equations and generating data. … “This is the most efficient way to generate data and the most accurate way to generate data.”
To that end, we already have an impressive list of development deals. For example, we are 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. And, among other projects, it is collaborating with several U.S. hospitals on an AI-based “cardiac magnetic examination system,” a new type of medical device for imaging the heart.
So this AI is swinging for bigger fences than writing term papers or making deepfake videos.
Interestingly, there are some indicators that SandboxAQ could be one of the AI companies that VCs will want to support. Throughout the year, many investors have formed special purpose vehicles (SPVs) for company shares. As we previously reported, these SPVs have become a hot financing tool as many investors are eager to acquire high-profile AI startups.
SandboxAQ did not immediately respond to our request for comment.
