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The $22 Billion Paradox: Finding Developers vs. Replacing Them

Mercor, Poolside, Harvey, and much more!

November 07, 2025

AI Startup Mercor Turns Its 22-Year-Old Founders into Billionaires

Deep Dive

The $11B Question: Is AI Finding Developers or Replacing Them?

Two massive bets this week reveal the paradox at the heart of the AI revolution.

Mercor's Human Expert Revolution: $10B for Finding the Right People

When your biggest competitor gets "torpedoed overnight," you win by default.

The Big Picture

Mercor raised $350 million at a $10 billion valuation—quintupling from $2 billion just eight months ago. Led by Felicis Ventures with Benchmark, General Catalyst, and Robinhood Ventures, it represents one of the fastest valuation jumps in startup history.

The Perfect Pivot

Mercor provides companies with specialized domain experts—scientists, doctors, lawyers—to perform AI model training. The company's fortunes rose after Meta's $14 billion Scale AI investment created conflicts of interest, causing OpenAI and Google DeepMind to cut ties with their primary data vendor. Translation: When your biggest competitor becomes unavailable, everyone needs a new partner. Fast.

The Scale Story

Mercor now has 30,000+ experts earning an average of $85 per hour, with the company paying out over $1.5 million daily—over $500 million flowing through the platform annually. The company told investors it's on track to hit $500 million in ARR faster than Cursor.

The Takeaway

Founded in 2023 by three 22-year-old Thiel Fellows, Mercor went from dorm room to $10 billion in two years. The lesson: AI isn't replacing human expertise—it's making the right human expertise exponentially more valuable.

Poolside's $1B Nvidia Bet: When Chips Meet Code

If Mercor is about finding humans to train AI, Poolside is about building AI to replace them.

The Big Picture

Nvidia is investing up to $1 billion in Poolside as part of a $2 billion round valuing the AI coding startup at $12 billion—quadrupling its $3 billion valuation. Founded by Jason Warner (former GitHub CTO) and Eiso Kant, Poolside builds AI assistants that help engineers generate code, debug projects, and automate development tasks.

The Infrastructure Play

Poolside is building a 2-gigawatt AI campus in West Texas with over 40,000 Nvidia GPUs launching December 2025. This isn't just software—it's vertical integration at infrastructure scale.

Nvidia's Strategic Calculus

For Nvidia, the investment ensures that developer tools are optimized for Nvidia chips, creating a self-reinforcing ecosystem. By backing Poolside, Nvidia embeds GPU technology deeper into the AI software stack while ensuring long-term hardware demand.

The Takeaway

Poolside's raise marks one of the largest private rounds in 2025, signaling investors are still pouring billions into AI-assisted coding despite questions about whether companies can deliver on $12 billion valuations.

The Paradox

This week gave us two opposing visions:

  • Mercor ($10B): AI needs more human experts, not fewer

  • Poolside ($12B): AI will automate the experts away

Both raised massive rounds. Both hit double-digit billion-dollar valuations. Both are betting on AI's future—from opposite directions.

The truth? They're probably both right. AI will automate repetitive tasks while making specialized human expertise more valuable and scarce. The companies that understand this paradox are the ones raising billion-dollar rounds.

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The Market Pulse

1) AI Infrastructure and Enterprise Automation Command $1.5+ Billion Weekly Deployment

Capital deployment reached remarkable intensity this week, with over $1.5 billion flowing into AI infrastructure, legal tech, brain-computer interfaces, and enterprise platforms. Metropolis's $500 million Series D headlines a week where investors doubled down on physical-world AI applications while legal tech continued its extraordinary run. The pattern is unmistakable: capital flows to proven platforms solving trillion-dollar problems with immediate enterprise adoption.

2) Physical-World AI Reaches Infrastructure Scale

Metropolis secured a $500 million Series D at a $5 billion valuation (part of a $1.6 billion total financing package including debt), led by LionTree with participation from BDT & MSD Partners. The Los Angeles-based startup's computer vision platform transforms parking and real-world transactions into frictionless experiences, processing payments automatically without human intervention. Following its $1.5 billion acquisition of SP+, Metropolis now employs over 23,000 people and is expanding beyond parking into retail and hospitality—proving that AI's most valuable applications may be in optimizing everyday physical transactions.

3) AI Training Economy Explodes

Mercor raised $350 million at a $10 billion valuation—a fivefold increase in eight months—led by Felicis with participation from Benchmark, General Catalyst, and Robinhood Ventures. The company connects over 30,000 specialized experts (scientists, doctors, lawyers) with AI labs for model training, paying out $1.5 million daily at $85+ per hour. With approaching $450 million in annualized revenue and $6 million in H1 2025 profit, Mercor exemplifies the "reinforcement learning economy" where human experts train AI systems to replace human work—a paradox driving one of 2025's fastest-growing sectors.

4) Legal Tech's Unstoppable Momentum

Harvey closed $150 million led by Andreessen Horowitz at an $8 billion valuation, marking its third major round of 2025 and bringing total 2025 funding to approximately $750 million. The legal AI platform now serves leading law firms including A&O Shearman and Ashurst, plus institutional investors like KKR and Bridgewater. With annual recurring revenue exceeding $100 million (doubled since January 2025) and over 350 employees, Harvey demonstrates that vertical AI applications with deep domain expertise command infrastructure-level valuations.

5) Brain-Computer Interfaces Reach Clinical Scale

Synchron raised $200 million in Series D led by Double Point Ventures, with backing from ARCH Venture Partners, Khosla Ventures, Bezos Expeditions, Qatar Investment Authority, and Australia's National Reconstruction Fund. The New York-based company's minimally invasive Stentrode implant—inserted via catheter without open-brain surgery—has enabled ten patients with paralysis to control digital devices by thought. With $345 million total funding, Synchron is racing toward FDA approval and commercial launch, positioning its less-invasive approach ahead of competitors like Neuralink.

6) Enterprise AI Platforms Gain Traction

MoEngage secured $100 million led by Goldman Sachs Alternatives to scale its AI-powered customer engagement platform serving 1,350 enterprise clients and reaching 2 billion users monthly. Reevo emerged with $80 million from Khosla Ventures and Kleiner Perkins to build an AI-native "revenue operating system" unifying marketing, sales, and customer success. These deals underscore continued institutional appetite for horizontal AI platforms that eliminate fragmented software stacks.

📌 TL;DR

  • Capital: $1.5B+ weekly deployment across physical-world AI, legal tech, BCI, and enterprise platforms

  • Strategy: Physical-world applications and vertical AI platforms commanding infrastructure-scale valuations

  • Validation: Legal tech reaching $8B valuations; AI training economy hitting $10B on proven profitability

  • Innovation: BCI and frontier AI research attracting massive institutional backing for transformational breakthroughs

Latest Fundraises from Major Firms (PE, VC, and Institutional Investors)

Venture Capital & Growth

  • CMT Digital, a Chicago-based venture capital firm, raised $136M for its fourth fund focused on companies building the infrastructure and applications for cryptocurrency adoption (Fortune)

  • MVP Ventures, a San Francisco-based venture capital firm, raised $125M for its second fund focused on companies in AI, defense, and frontier tech (Globe Newswire)

  • Portuguese VC Armilar raised $138M for its fourth fund to back disruptive technologies in Iberia and the rest of Europe (Medium)

  • Israeli VC F2 Venture Capital is seeking to raise $100M for its fourth fund to back seed-stage startups (CTech)

Private Equity & Credit

  • Arlington Capital Partners raised $6B for its seventh fund to invest in critical sectors including defense, government services, and healthcare (Business Wire)

  • Ares raised $1.5B for a debut healthcare lending fund focused on specialty healthcare companies (Business Wire)

  • Ares raised $1B continuation fund for its stake in systems integrator Convergint Technologies led by PE firm Leonard Green (MSN)

  • TPG raised $2.1B for a CRE credit fund (Globest)

  • ChrysCapital Management raised $2.2B for its tenth PE fund targeting healthcare and industrials companies (Pitchbook)

  • UK MM PE firm Montagu raised $2.3B for a continuation fund for IoT connectivity firm Wireless Logic co-led by TPG GP Solutions, CVC Secondary Partners, and Partners Group (CVC)

  • Aquillius Investment Partners, a Singaporean real estate investment firm founded by ex-Blackstone and Partners Group execs, raised $1.1B for its second and APAC's largest real estate secondaries fund (IREI)

  • UK PE firm Aspirity raised $1B for its debut fund (TechFundingNews)

  • Patria Investments is set to raise over $500M for its first secondaries fund it launched since acquiring UK asset manager Aberdeen's European PE business (PrivateEquityWire)

  • Energy secondaries investor Melange Capital Partners raised $430M for its debut fund (TheBusinessJournals)

  • Lower MM PE firm Teleo raised $350M for its sophomore fund (Businesswire)

  • Investment firm Cerberus is seeking to raise $3B for its seventh opportunistic real estate fund (Bisnow)

Top Jobs

Venture Capital roles

Investor at Initio Capital (SF)

Associate at BIP Ventures (Atlanta)

Associate at Pathlight Ventures (NYC)

Growth Equity Roles

Associate at Updata Partners (DC)

Analyst at JMI Equity (San Diego or DC)

Investor at Stripes (NYC)

Private Equity (Buyout) Roles

Senior Associate at Graycor (Chicago)

Associate at Ares (Los Angeles)

Associate at Access Holdings (Baltimore)

Senior Associate at StepStone (NYC)

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