Pathfounders Newsletter: Our Sources say Hassabis wants out

It’s been an epic week in tech, particularly because of the move by Sir Demis Hassabis into the chair role at DeepMind. But more of that in a moment. 

On Wednesday we gave a sneak preview of the new upcoming “Pathfounders Network” at our Summer party in London (pictured above), attended by founders, investors and ecosystem players. You can see some photos from the party here. I also explained how the Network, which is now open for applications, will operate. (Thanks to our Partners for their support at the party: Halkin / Night Office, Dawn Capital, ​​Gen AI Academy and ​Your Story PR).

Effectively, Pathfounders Network will be a curated European technology network designed to connect founders, investors, and operators building the next generation of companies across what we all know is a far-too-fragmented continent. 

You can literally drive around the Bay Area and San Francisco. It’s much harder to do that in Europe. So, Pathfounders Network will combine a high-quality, curated community with independent journalism, giving members early access to Pathfounders reporting, real-time alerts, private briefings, founder requests, and dedicated groups for specific conferences and cities.

Ultimately, we want to create a sort of ‘Bloomberg Terminal’ that sends you market information before it goes out elsewhere. We may not look like that at first, but that’s the aspiration. 

It will also create the freedom for Europe’s founders and operators to engage in a non-algo-driven space and post their own updates.

The Network will be built around relevance, verification and useful participation rather than scale or self-promotion, unlike LinkedIn, X or noisy WhatsApp groups.

In addition to running in-person Pathfounders events, we’ll also host live, online events on the Network.

From September, we’ll introduce a subscription fee in the range of a Netflix subscription. Invitations will be sent out over the next few weeks, after applications are assessed.

Importantly, membership of Pathfounders Network and our editorial operations will remain adjacent but separate. The Network is being built as an extension of Pathfounders’ editorial ethos, and will remain independent of editorial operations.

On Wednesday, in what felt akin to the ravens leaving the Tower of London, Sir Demis Hassabis stepped down as chief executive of Google DeepMind to become chair of DeepMind, which he founded. He will also become chief scientist of parent company Alphabet.

Instead, Hassabis’s former right-hand man, Koray Kavukcuoglu, will now be senior vice-president of Google DeepMind. In other words, DeepMind was being absorbed into Google’s broader business and its independence looked to be holed below the waterline. 

In a double blow, current chief scientist and longtime Google employee Jeff Dean, along with three colleagues, left to launch Discovery Loop, a science-focused startup backed by Google. This will use autonomous AI systems to automate scientific research. 

However, Pathfounders has learned from industry sources that Hassabis wanted to leave at the same time as Dean, but Google management felt the news would cause a collapse in its share price. Indeed, Google’s stock fell 5 per cent following the announcement above.

Instead, Hassabis was persuaded to bump up (or down) to the Chair role, allowing the organisation to settle for a while until he can exit in a dignified manner. As Chair of DeepMind, Hassabis will be freer to engage in his scientific pursuits, and he said he will also be “leaning in” more to his work leading Isomorphic Labs, a drug discovery start-up he created within Alphabet in 2021.

Last month, for instance, he proposed an industry-led AI standards body based on the Financial Industry Regulatory Authority.

With David Silver off doing Ineffable Intelligence and John Jumper now at Anthropic, what this all means, as a source told us, is that all real AI development is now in the Bay Area, and no longer in London at DeepMind. All the focus is now on Gemini, Google’s large language model, as it seeks to catch up with Anthropic and OpenAI.

What this reveals is a huge tension inside Google and DeepMind: researchers like Hassabis want to pursue pure scientific aims, while the commercial side just wants AI they can sell to the masses and boost the share price. 

Hassabis’s move will be a body blow to the London-maxxers, but this is just reality. In the end, SF gets to call the shots.

But perhaps we can hope that Hassabis will eventually leave Google and stay in the UK to build something new. 

Having lost the general AI model race, Europe may have an opportunity to win in science-based AI, including drug discovery. We can but hope.

Meanwhile, out prediction is that Hassabis will have left Google within a year.

OLIX raisesd $312m at $3.3bn valuation - The two-year-old London AI chip startup specialises in inference silicon. Olix is developing an optical digital processor with a “novel memory and interconnect architecture” that is compatible with current AI models and supports AI inference workloads. Effectively, Olix is going after Nvidia.

ICEYE became the Scaleup Europe Fund’s first bet - A €1bn Series F, a €10bn+ valuation and a state-backed scaleup fund: sovereign space intelligence is now a European capital priority.

Volta emerged with $300m and a reported $10bn Anthropic compute deal - The AI infrastructure company is selling power, land, compute and financing as one stack. Backed by Nvidia and Michael Dell, Volta is tackling the soaring upfront cost of building AI infrastructure.

HappyRobot raised $150m to put AI agents into supply chains, led by Prysm Capital and co-led by Eurazeo. The company deploys AI agents that can execute and reason within existing enterprise systems while working alongside employees. 

Ore Energy raised $43m for 100-hour iron-air batteries. The Dutch startup, raised $43 million in Series A funding from Plural and HV and plans to scale up its iron-air batteries, which can store renewable energy for up to 100 hours at about one-tenth the cost per unit of lithium-ion batteries.  Useful for data centres!

European AI startup secures a record 55% of VC capital in H1 2026 - They raised $23 billion in the first half of 2026, that’s 130% year-over-year (it was $10 billion in H1 2025). That means 55% of all venture capital went into AI according to the 2026 European AI Economy Report by HumanX and Crunchbase.

European startups secured €8.6bn in July as exit activity accelerated - Germany emerged as the top fundraising market in July, securing €3.5 billion over 48 transactions.

Wordsmith extended Series B to $84m - The Edinburgh-based legal tech startup’s new funding includes follow-on investment from existing shareholders Highland Europe and Index Ventures.

Wayve and Uber moved closer to autonomous rides in London - Transport for London granted private hire vehicle licences to a number of Wayve’s electric vehicles.

Moss hit unicorn status after €30m Series C - The German company brings together corporate cards, invoice management, reimbursements, real-time budgets, and automated accounting on a single platform. 

UK extends early-stage VC funding with £100m initiative - The Treasury and the British Business Bank announced a £100m deployment for the next tranche of the Investor Pathways Capital Initiative, designed to back early-stage regional venture capital funds across the UK.

White Star Capital closed a $250m Fund IV -  White Star Capital announced the final close of White Star Capital Fund IV at $250 million.  The fund team is split between New York, Montreal, and London, Paris and has led rounds into Sequen (New York), Veesion (Paris), OatFi (New York), AMI Labs (Paris), Tetrix (Montreal), and Trayd (New York). 

There were 144 new VC funds in Europe this year - That’s a lot. 

Yann LeCun joined a new $100m AI fund - He’s now part of 224 Ventures, a firm co-led by Oriol Vinyals from DeepMind and Shaun Johnson, who was previously with AIX. He previously announced, then closed “Extelligence Invest” 8 hours after its announcement on July 15…

Seraphim Space deploys first capital after £137m raise - They put $25m in hyperspectral imaging specialist Pixxel and $3.6m into radioisotope power developer Zeno Power.

25 European startups chasing Wall Street-sized IPOs -  Only 223 European companies are likely to go public this year compared to 373 at the start of 2025, according to PitchBook’s latest VC Exit Predictor.  The list is shorter, but the companies are worth more.

OpenAI and Anthropic models went rogue in cyber tests, UK watchdog says - The UK AI Security Institute reported on the recent rogue AI activity.

Meta says its AI model hacked into another company during testing - This was after an error by its testing partner gave the model unintended internet access.

Scientists made the first viruses designed by AI - The viruses only infect bacteria and are used around the world to treat patients with persistent infections. In lab tests, a cocktail of the AI-designed viruses killed E coli bugs that were resistant to natural bacteriophages.

Europe started enforcing AI Act rules - The measures introduce new transparency obligations for general-purpose AI models, including chatbots, and roll out bans on a range of prohibited practices. Companies found in breach could face fines of up to 3% of their annual global turnover. The rules are expected to increase pressure on US AI companies serving European customers.

Meta was fined $567m in the largest child-safety ruling against social media giant - Thursday's ruling is in addition to $375m in fines Meta was already ordered to pay in the case, for a total of $942m.

Google faces £5bn UK lawsuit over business charges - The case accuses Google of abusing its market dominance in general search to overcharge British businesses and organisations for search advertising.

This UK startup has invented a way to make critical minerals — but no one is listening
Oxford-based Milvus Advanced has invented a way to make critical minerals, properties Donald Trump has threatened to invade Greenland for. But will the UK give them planning permission?

Ore Energy raises $43m to scale its 100-hour battery
The batteries are made from iron, water and air and can store renewable energy for just over four days

Index Ventures lands $2bn to go all in on AI
The storied fund has backed Skype, Notion, Scale AI, Figma, Revolut and Wizamong others but has been relatively late to the AI train.

Agon’s $30m raise shows just how hot Europe’s VCs are for defence these days
The startup is building simulated battlefields for autonomous weapons, in yet another sign that VCs are moving ever deeper into the military software stack.

• Send us pitches, column ideas, etc. via [email protected] 
• Subscribe to Pathfounders on YouTube, Spotify, Apple iTunes
• Get Pathfounders news via WhatsApp (main WA feed) or via the Public channel.
• To partner with Pathfounders, email us at [email protected]
• Take our short, three-question reader survey here.

That’s all, folks

Follow Pathfounders: LinkedIn, X (Formerly Twitter), BlueSky, Telegram, Facebook, Instagram, Luma (events), RSS Feed for all posts, Podcast: Spotify, YouTube, TikTok, and Contact Pathfounders Anonymously. We are not on Substack, but we publish headlines from here.