VCs are spending gobs of money on AI startups — especially those run by big names in tech — so SandboxAQ is putting its hand out again, even though it raised a whopping $500 million in early 2023.
The spinout from Google parent company Alphabet is reportedly seeking to raise another round that would value it at $5 billion, sources tell Bloomberg. Its last $500 million round, completed in February 2023, had backers like Breyer Capital, T. Rowe Price funds, and Marc Benioff, Reuters reported at the time. PitchBook estimated its valuation after that round to be $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. It was spun out of Alphabet into an independent startup in March 2022, with Hidary as CEO. Billionaire and former Google CEO Eric Schmidt became the startup’s chairman.
Its mission is a veritable alphabet soup of buzzwords: to work at the intersection of quantum computing and AI. But it is not building a quantum computer, although its software products should one day work with them, Hidary said on a recent episode of the Peter H. Diamandis podcast. Instead, it’s building software based on quantum physics that can model molecules and make predictions of their behavior. Google is still working on the quantum computer part, but Hidary says SandboxAQ already has a number of quantum computing partnerships.
The startup has its hands in a large and somewhat wild assortment of products across life science, materials science, navigation, encryption, and cybersecurity.
It is not working with AI of the generative AI ChatGPT chatbot variety. Instead of predicting language, it is using large modeling AI techniques on equations. Or as Hidary explained, “Instead of the world of large language models, we’ve now entered the world of large quantitative models, LQMs. And LQMs are about starting with equations to generate data. …That’s the most efficient way to generate data, and the most accurate way to generate data.”
To that end, it already has a list of impressive developmental contracts. For instance, it is working on how to extend lithium-ion battery life with battery company Novonix; it has a contract with the U.S. Air Force to develop magnetic navigation systems that don’t rely on GPS; and it’s working with a number of U.S. hospitals on an AI-powered “magnetocardiography system,” a new kind of medical device for imaging the heart, among other projects.
So, 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 eager to back. Throughout the year, a number of investors have set up special purpose vehicles (SPVs) for the company’s shares. As we previously reported, such SPVs have become a hot financial tool because so many investors are eager to get a piece of big-name AI startups.
SandboxAQ did not immediately respond to our request for comment.