Good morning, VC enthusiasts. Today, we look at how AI infrastructure is consolidating, the new Spotify pricing, how OpenAI is reshaping its business model, and why control is becoming the next battleground in Silicon Valley. Lets jump in!

In today’s Inside/VC edition:

The Inside: Langfuse joins ClickHouse as ClickHouse announces a $400M Series D at a $15B valuation and acquires one of Germany’s most technically impressive & coolest AI startups, building the open source standard for tracing and evaluating LLM applications in production.

The details:

Why it matters: LLM applications are now production systems, not experiments. The competitive edge is shifting from model access to operational performance. Teams that can observe, evaluate, and iterate reliably will win. By integrating Langfuse directly into ClickHouse, LLM observability becomes part of the core data infrastructure, and that is where long term platform value in AI is being built.

The Inside: OpenAI is introducing ads into ChatGPT. The company, now valued at roughly $500B, is monetizing a user base that generates billions of queries per month while running a cost structure that scales with compute, not subscriptions.

The details:

Why it matters: OpenAI’s revenue run rate is estimated around $12B, while infrastructure and R&D spending still run in the multi billion range annually. Every marginal increase in usage adds GPU and energy cost. Advertising allows OpenAI to monetize hundreds of millions of non paying users and improve gross margin per query. Without this layer, scale worsens economics. With it, OpenAI moves closer to a sustainable platform business.

The Inside: California is considering a one time 5% wealth tax on individuals with net worth above $1B, targeting roughly 200 people and aiming to raise about $100B. The tax would apply retroactively from January 1, 2026 and is currently being pushed onto the November ballot.

Crucially, the calculation is based on voting power, not just economic ownership. Founders with dual class structures are taxed on control, not on realized equity value. Larry Page e.g. owns around 3% of Google, but controls roughly 30% of the votes and would be taxed on that 30%. For founders, this creates large tax bills on influence they hold, not liquidity they have.

The proposal is already triggering defensive moves, including reported $173M property purchases by Page in Miami, and even Governor Newsom is actively opposing the measure.

It is not about higher taxes. It is about making control expensive. And that is why many valley founders are looking at the exit right now.

Spotify increased its US individual plan from $11.99 to $12.99 per month, marking the third price hike in three years. The company first raised prices in 2023 from $9.99 to $10.99, followed by another $1 increase in 2024.

Spotify now has more than 281M paying users globally, with around 25 percent coming from North America. Analysts estimate this hike alone could add roughly $500M in annual revenue.

Runpod has reached a $120M annual revenue run rate just four years after launch, growing from a bootstrapped GPU hosting project into a global AI infrastructure platform. The company raised a $20M seed round in 2024 co led by Dell Technologies Capital and Intel Capital, after first reaching $1M in revenue without outside funding.

Today, Runpod serves around 500,000 developers across 31 regions, with customers including OpenAI, Replit, Perplexity, Cursor, Wix, and Zillow.

Elon Musk is seeking $79B to $134B in damages, arguing OpenAI breached its nonprofit mission and improperly captured value after his $38M seed contribution in 2015.

The claim is based on OpenAI’s current ~$500B valuation and implies a theoretical return of more than 3,500x on Musk’s initial investment. Microsoft, which owns roughly 27% of OpenAI, is also named in the damages calculation.

AI video startup Higgsfield reached a $1.3B valuation after extending its Series A to $130M, reporting 15M users and a $200M annual revenue run rate less than a year after launch.

Berlin based Parloa raised a $350M Series D led by General Catalyst, valuing the company at $3B just eight months after a $120M round at a $1B valuation.

Bill Gates-backed Type One Energy raised $87M and is preparing a $250M Series B at a $900M pre money valuation.

AI security startup depthfirst raised a $40M Series A led by Accel just 15 months after founding.

Blackstone-backed Liftoff Mobile filed for an IPO, with the market expecting a roughly $400M raise, on $519M revenue in 2024 and $1.85B in debt.

See you soon,

Jannis & Felix → the humans behind Inside/VC