Business
Venture capital investment is rising in Los Angeles — and not just for AI startups
Early this year, private equity firm Blackstone bet big on the future of artificial intelligence by investing $300 million in a Chatsworth company that’s been around for more than two decades.
The company, DDN, helps businesses store and manage the massive trove of data that powers AI systems — the lifeblood needed for chatbots, self-driving cars and more. DDN’s high-profile customers include chipmaker Nvidia, Elon Musk’s AI startup xAI, Google Cloud and Ford. DDN, short for DataDirect Networks, has roughly 1,000 employees.
“They have a trillion dollars of assets under management, and it’s a company that we thought would really move the needle for us in terms of extending our reach,” said Jyothi Swaroop, DDN’s chief marketing officer.
The investment was among the largest this year in the Greater Los Angeles region, which remains a hot spot for investments in both old and new tech companies poised for growth.
All told, venture capital investors and private equity firms poured $3.1 billion to fund 144 deals in the L.A. area in the first quarter of this year, up 15% from a year ago, according to research firm CB Insights. The area encompasses Los Angeles, Ventura, Orange, Riverside and San Bernardino counties.
While investment levels can fluctuate, funding in the greater L.A. region has steadily increased since 2023, when investment cooled following the collapse of the cryptocurrency exchange FTX.
Along with AI, investors also financed startups and established businesses in healthcare, e-commerce and defense technology, underscoring how investment in the L.A. market has diversified in recent years beyond ad tech businesses and video apps.
“Today it’s going into much more ambitious projects,” Mark Suster, a general partner at Santa Monica-based Upfront Ventures. “It’s going into satellites, alternate energy, national defense, drones, shipbuilding and pharmaceutical drug discovery. So it’s a lot more exciting than it ever has been.”
Los Angeles-area companies that received the most money in the first quarter include Torrance-based defense company Epirus with $250 million; and Thousand Oaks-based Latigo Biotherapeutics, which received $150 million, according to CB Insights. Latigo Biotherapeutics develops non-opioid pain treatments, while Epirus makes technology that helps defend against attacks from drone swarms.
Economic consulting firm Econic Partners raised the most funding with $438 million, according to CB Insights, which relied on a report filed with the U.S. Securities and Exchange Commission. Econic disputed the total, saying it raised nine figures in the first quarter, but the company declined to say how much.
Masha Bucher, founder and general partner at Day One Ventures, said she views El Segundo as the most promising hub for “deep tech” startups tackling complex issues, such as, water scarcity.
Businesses in the L.A. area have access to a highly qualified workforce from aerospace and defense tech companies. The tech hub known as Silicon Beach also is close to the airport, making it easy for entrepreneurs to hop on a plane to raise funding in San Francisco.
“There is a power of community, and it’s definitely like a power spot on the map,” Bucher said. The firm’s investments include various AI startups and an eye-scanning crypto project backed by OpenAI’s Sam Altman in which people verify they’re human.
Investors aren’t interested in only AI, however. Culver City-based Whatnot raised $265 million, one of the biggest deals in the L.A. area this year. The live shopping app allows people to buy and sell items such as clothing and collectibles. Potential customers can ask questions about products in real-time, find deals and bid for products shown in live videos.
Whatnot says it surpassed more than $3 billion in sales in 2024, and the company expects that figure to double this year. The startup, founded in 2019, says it isn’t profitable yet, but the TikTok rival has shown investors it’s growing fast.
“Live and social shopping has the potential to be an absolutely monstrous market,” Whatnot Chief Executive Grant LaFontaine said.
The company has roughly 750 employees across the United States and Europe. The funding will help market Whatnot to attract more users and hire people to improve the shopping experience, he said.
Like other businesses, Whatnot uses AI for customer service and to moderate content on the platform.
“I tend to be sort of a purist, which is that consumers don’t care about AI. They care about problems being solved,” LaFontaine said.
Businesses have been using AI long before the rising popularity of chatbots such as ChatGPT that can generate text, images and code.
But the frenzy surrounding what’s known as generative AI has meant that various industries are confronting how technology will disrupt the way they live and work.
Not surprisingly, investor interest in AI drove much of the nation’s venture capital commitments in the first quarter. San Francisco-based OpenAI secured the largest funding round of $40 billion, placing its valuation at $300 billion, according to CB Insights.
“There’s a ton of opportunity to rewrite the playing field on which people do business in everything from across verticals, across industries,” said Jason Saltzman, head of insights for CB Insights. “Everyone recognizes the promise, and … no one wants to miss out on the promise.”
Globally, $121 billion of venture capital was raised in the first quarter, with 20% of the deals received by AI companies — the highest amount ever, according to CB Insights. Nationally, $90.5 billion in venture capital was raised last quarter, with the bulk of the money going toward startups in Silicon Valley, which brought in $58.9 billion, the research firm said.
San Francisco has experienced a surge in AI startups expanding or opening up offices, drawn to the city’s swath of talent and the Bay Area’s universities. AI leaders including OpenAI and Anthropic also are based there.
OpenAI said it would use the money raised in the first quarter toward building its tools and investing in talent.
“People understand that this is a transformative technology,” said Chris Lehane, OpenAI’s vice president of global affairs in an interview. “It’s going to permeate virtually every aspect of life.”
Silicon Valley remains the far leader in venture capital AI investments, but other cities such as New York have attracted AI funding. There’s also global competition from countries such as China. As legislators weigh whether to introduce laws that could regulate AI, some tech lobbying groups have raised concerns on how those bills could affect innovation in the state.
Suster said he doesn’t think venture capital dollars will leave California.
“The opportunity set is so great here,” Suster said. “Do we occasionally get backwards-looking bills that try to overregulate how industry works in California? Of course, we do. We find ways to work around them.”
Nike is cutting about 1,400 jobs in its operations division, mostly from its technology department, the company said Thursday.
In a note to employees, Venkatesh Alagirisamy, the chief operating officer of Nike, said that management was nearly done reorganizing the business for its turnaround plan, and that the goal was to operate with “more speed, simplicity and precision.”
“This is not a new direction,” Mr. Alagirisamy told employees. “It is the next phase of the work already underway.”
Nike, the world’s largest sportswear company, is trying to recover after missteps led to a prolonged sales slump, in which the brand leaned into lifestyle products and away from performance shoes and apparel. Elliott Hill, the chief executive, has worked to realign the company around sports and speed up product development to create more breakthrough innovations.
In March, Nike told investors that it expected sales to fall this year, with growth in North America offset by poor performance in Asia, where the brand is struggling to rejuvenate sales in China. Executives said at the time that more volatility brought on by the war in the Middle East and rising oil prices might continue to affect its business.
The reorganization has involved cuts across many parts of the organization, including at its headquarters in Beaverton, Ore. Nike slashed some corporate staff last year and eliminated nearly 800 jobs at distribution centers in January.
“You never want to have to go through any sort of layoffs, but to re-center the company, we’re doing some of that,” Mr. Hill said in an interview earlier this year.
Mr. Alagirisamy told employees that Nike was reshaping its technology team and centering employees at its headquarters and a tech center in Bengaluru, India. The layoffs will affect workers across North America, Europe and Asia.
The cuts will also affect staffing in Nike’s factories for Air, the company’s proprietary cushioning system. Employees who work on the supply chain for raw materials will also experience changes as staff is integrated into footwear and apparel teams.
Nike’s Converse brand, which has struggled for years to revive sales, will move some of its engineering resources closer to the factories they support, the company said.
Mr. Alagirisamy said the moves were necessary to optimize Nike’s supply chain, deploy technology faster and bolster relationships with suppliers.
A bill that would have required insurers to offer coverage to homeowners who take steps to reduce wildfire risk on their property died in the Legislature.
The Senate Insurance Committee on Monday voted down the measure, SB 1076, one of the most ambitious bills spurred by the devastating January 2025 wildfires.
The vote came despite fire victims and others rallying at the state Capitol in support of the measure, authored by state Sen. Sasha Renée Pérez (D-Pasadena), whose district includes the Eaton fire zone.
The Insurance Coverage for Fire-Safe Homes Act originally would have required insurers to offer and renew coverage for any home that meets wildfire-safety standards adopted by the insurance commissioner starting Jan. 1, 2028.
It also threatened insurers with a five-year ban from the sale of home or auto insurance if they did not comply, though it allowed for exceptions.
However, faced with strong opposition from the insurance industry, Pérez had agreed to amend the bill so it would have established community-wide pilot projects across the state to better understand the most effective way to limit property and insurance losses from wildfires.
Insurers would have had to offer four years of coverage to homeowners in successful pilot projects.
Denni Ritter, a vice president of the American Property Casualty Insurance Assn., told the committee that her trade group opposed the bill.
“While we appreciate the intent behind those conversations, those concepts do not remove our opposition, because they retain the same core flaw — substituting underwriting judgment and solvency safeguards with a statutory mandate to accept risk,” she said.
In voting against the bill Sen. Laura Richardson, (D-San Pedro), said: “Last I heard, in the United States, we don’t require any company to do anything. That’s the difference between capitalism and communism, frankly.”
The remarks against the measure prompted committee Chair Sen. Steve Padilla, (D-Chula Vista), to chastise committee members in opposition.
“I’m a little perturbed, and I’m a little disappointed, because you have someone who is trying to work with industry, who is trying to get facts and data,” he said.
Monday’s vote was the fourth time a bill that would have required insurers to offer coverage to so-called “fire hardened” homes failed in the Legislature since 2020, according to an analysis by insurance committee staff.
Fire hardening includes measures such as cutting back brush, installing fire resistant roofs and closing eaves to resist fire embers.
Pérez’s legislation was thought to have a better chance of passage because it followed the most catastrophic wildfires in U.S. history, which damaged or destroyed more than 18,000 structures and killed 31 people.
The bill was co-sponsored by the Los Angeles advocacy group Consumer Watchdog and Every Fire Survivor’s Network, a community group founded in Altadena after the fires formerly called the Eaton Fire Survivors Network.
But it also had broad support from groups such as the California Apartment Association, the California Nurses Association and California Environmental Voters.
Leading up to the fires, many insurers, citing heightened fire risk, had dropped policyholders in fire-prone neighorhoods. That forced them onto the California FAIR Plan, the state’s insurer of last resort, which offers limited but costly policies.
A Times analysis found that that in the Palisades and Eaton fire zones, the FAIR Plan’s rolls from 2020 to 2024 nearly doubled from 14,272 to 28,440. Mandating coverage has been seen as a way of reducing FAIR Plan enrollment.
“I’m disappointed this bill died in committee. Fire survivors deserved better,” Pérez said in a statement .
Also failing Monday in the committee was SB 982, a bill authored by Sen. Scott Wiener, (D-San Francisco). It would have authorized California’s attorney general to sue fossil fuel companies to recover losses from climate-induced disasters. It was opposed by the oil and gas industry.
Passing the committee were two other Pérez bills. SB 877 requires insurers to provide more transparency in the claims process. SB 878 imposes a penalty on insurers who don’t make claims payments on time.
Another bill, SB 1301, authored by insurance commissioner candidate Sen. Ben Allen, (D-Pacific Palisades), also passed. It protects policyholders from unexplained and abrupt policy non-renewals.
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Politicians in Washington and the reporters who cover them have an often adversarial relationship.
But on the last Saturday in April, they gather for an irreverent celebration of press freedom and the First Amendment at the Washington Hilton Hotel: The White House Correspondents’ Association dinner.
Hosted by the association, an organization that helps ensure access for media outlets covering the presidency, the dinner attracts Hollywood stars; politicians from both parties; and representatives of more than 100 networks, newspapers, magazines and wire services.
While The Times will have two reporters in the ballroom covering the event, the company no longer buys seats at the party, said Richard W. Stevenson, the Washington bureau chief. The decision goes back almost two decades; the last dinner The Times attended as an organization was in 2007.
“We made a judgment back then that the event had become too celebrity-focused and was undercutting our need to demonstrate to readers that we always seek to maintain a proper distance from the people we cover, many of whom attend as guests,” he said.
It’s a decision, he added, that “we have stuck by through both Republican and Democratic administrations, although we support the work of the White House Correspondents’ Association.”
Susan Wessling, The Times’s Standards editor, said the policy is a product of the organization’s desire to maintain editorial independence.
“We don’t want to leave readers with any questions about our independence and credibility by seeming to be overly friendly with people whose words and actions we need to report on,” she said.
The celebrity mentalist Oz Pearlman is headlining the evening, in lieu of the usual comedy set by the likes of Stephen Colbert and Hasan Minhaj, but all eyes will be on President Trump, who will make his first appearance at the dinner as president.
Mr. Trump has boycotted the event since 2011, when he was the butt of punchlines delivered by President Barack Obama and the talk show host Seth Meyers mocking his hair, his reality TV show and his preoccupation with the “birther” movement.
Last month, though, Mr. Trump, who has a contentious relationship with the media, announced his intention to attend this year’s dinner, where he will speak to a room full of the same reporters he often derides as “enemies of the people.”
Times reporters will be there to document the highs, the lows and the reactions in the room. A reporter for the Styles desk has also been assigned to cover the robust roster of after-parties around Washington.
Some off-duty reporters from The Times will also be present at this late-night circuit, though everyone remains cognizant of their roles, said Patrick Healy, The Times’s assistant managing editor for Standards and Trust.
“If they’re reporting, there’s a notebook or recorder out as usual,” he said. “If they’re not, they’re pros who know they’re always identifiable as Times journalists.”
For most of The Times’s reporters and editors, though, the evening will be experienced from home.
“The rest of us will be able to follow the coverage,” Mr. Stevenson said, “without having to don our tuxes or gowns.”
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