Optifye AI

How not to launch a Demo + some Defense Tech

Author

Henry Head
February 27, 2025

Happy Thursday. We’ve got some interesting venture news this week—and a mostly unnecessary rant.

Around the Horn

Global Moves: Qatar's Venture Capital Ambitions

Qatar is leveraging its sovereign wealth fund to attract venture capital firms to Doha, aiming to establish itself as a regional hub. The Qatar Investment Authority (QIA) has allocated nearly half of a $1 billion fund of funds to draw more venture capital, supporting its burgeoning startup ecosystem. The move isn’t surprising. Like hosting the World Cup, this initiative is part of Qatar's broader strategy to diversify its economy and show up on the global stage.

Defense Tech Alert: Rune Emerges from Stealth

Rune, a defense technology startup founded by former Anduril employees David Tuttle and Peter Goldsborough, emerged from stealth with $6.2 million in seed funding. That’s a pretty large seed, but the round was led by Andreessen Horowitz, with participation from Point72 Ventures and XYZ Ventures, so they are already backed by big names. Rune is developing TyrOS, software designed to aid the military in managing field logistics more efficiently by autonomously tracking supplies and predicting future needs.

PE has Lowered Expectations

Private equity had high hopes for a booming 2025, fueled by anticipated regulatory relaxations and lower interest rates. However, uncertainty around interest rate cuts has led to a 53% slowdown in U.S. activity compared to the previous year. Inflation and a robust labor market suggest that rates might remain steady or even rise. Conversely, a weaker-than-expected labor market could prompt rate cuts, potentially benefiting private equity. Treasury Secretary Scott Bessent notes that the private sector is in a recession, though his job creation statistics under the current administration have been called into question. Expect similar slow activity across private markets…like venture.

Anthropic Nears Completion of $3.5 Billion Funding Round

AI startup Anthropic is finalizing a $3.5 billion funding round, potentially valuing the company at $61.5 billion. The round may include investments from prominent venture firms such as Lightspeed Venture Partners, General Catalyst, and Bessemer Venture Partners. This significant investment underscores the growing venture capital interest in AI startups. Co-founded by former OpenAI executives, including siblings Dario and Daniela Amodei, Anthropic recently launched an advanced AI model, Claude 3.7 Sonnet, aimed at enhancing response speed and reasoning capabilities.

Field Notes

Are you working, worker 17?

Y Combinator recently shared a launch video for Optifye, a company developing “AI performance monitoring for factory workers.” The post, now deleted, was widely criticized and showcased what many saw as a "bossware" AI system used to reprimand an underperforming worker in a way that felt dystopian. The post spawned about about a million tweets deriding it, some calling it “Sweatshop as a Service”.

I come from a manufacturing family. And I think the demo failed in a few distinct ways. In the most basic sense, the product is just an analytics dash of production. While real-time monitoring might be a slight advancement (?), but tracking pieces, PPH, measuring output per hour and efficiency is already standard practice for setting quotas. The product does not meaningfully improve manufacturing through AI.

That’s not a huge deal, but the big reaction to the post is a function of people’s general anxiety around how AI will integrate into manual work. An anxiety that this demo fails to assuage.

The target here is the factory owner. And the demo assumes with just a bit more monitoring, they could get their workers – who apparently are otherwise unproductive – to squeeze out more pieces.

It completely misses the future vision of fourth-wave manufacturing—and what could be the fifth wave: human-AI collaboration. In this vision, AI isn’t just about tracking workers but actively improving manufacturing by solving bottlenecks, enhancing worker training and onboarding, optimizing layouts, and boosting efficiency. True smart manufacturing integrates humans and AI, rather than relying on extreme monitoring and exploitation.

If manufacturing is going to benefit from AI, its benefits need to extend to workers and not just serve as a digital whip or panopticon.

Job Board

  • Investment Principal, Global VC Fund (San Francisco, In-Office): Link

  • Deep Tech Investment Intern 2025 Summer (MBAs and PhDs): Link

Weekly Wit

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— Jean Giraudoux

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