Elizabeth Holmes, founder of Theranos Inc., exits federal court in San Jose, California, on Tuesday, Aug. 31, 2021.
David Paul Morris | Bloomberg | Getty Images
SAN JOSE, CALIF. — A hedge fund manager who put $96 million into Theranos said he thoroughly investigated the company but was still misled by CEO Elizabeth Holmes about its blood-testing technology.
Brian Grossman, chief investment officer at PFM Health Sciences, told jurors in Holmes’ criminal trial on Tuesday that in 2014, as part of his due diligence, he got his own blood drawn from a Theranos machine at a Walgreens pharmacy.
“I had my blood drawn with a venous draw, not a finger stick,” said Grossman, adding that the experience undermined what he’d been told about Theranos.
Grossman said he met with Holmes and her top executive, Ramesh “Sunny” Balwani, at their office in Palo Alto, California, in December 2013. He said Holmes did most of the talking, and that he and his colleagues were told Theranos could run 1,000 blood tests on its proprietary technology.
“Ms. Holmes was actually very clear that they could match any test on a Labcorp and Quest menu of tests,” Grossman said. He told jurors that “was a really big statement about how much they had accomplished, where the technology was at that time.”
Earlier witnesses, including lab associate Erika Cheung, have testified that Theranos devices couldn’t run more than 12 different tests, contradicting the company’s public pronouncements.
Grossman said that in the meeting he was told Theranos was working with the military and that its technology was being used on medivacs in the battlefield.
“What better application for a technology like this than in a military setting under harsh conditions like one would expect in a place like Afghanistan or Iraq?” Grossman said. Theranos indicated that it had “something over $200 million in revenue from the Department of Defense,” he said.
Daniel Edlin, a former Theranos employee, told jurors last month that, to his knowledge, the blood-testing devices were never used in the Middle East.
‘No ambiguity and no confusion’
Grossman said that following his initial meeting with Holmes and Balwani, he sent them an e-mail in January 2014, with the subject: “Due Diligence Questions.”
His questions from PFM fell into seven categories. He wanted more details on issues like the accuracy and speed of the tests compared to those from traditional vendors, the limitations of the technology and whether the Walgreens relationship was exclusive.
“We as a group came up with questions that we wanted to better understand the business,” Grossman said. “We wanted to ask the same questions in as many ways as we could so there was no ambiguity and no confusion as to what the technology was doing.“
PFM then met with Holmes and Balwani a second time. Grossman testified that Holmes left about halfway through the meeting. Theranos executives told him at the time that it could get test results back in under four hours in retail stores and within one hour in hospitals.
Grossman told the jury that Holmes never told him the company was using third-party machines to run the blood tests. About his own experience at Walgreens, Grossman said he was surprised to find out that the blood was drawn from his arm and said his test results took longer than four hours.
“I asked [Balwani] why I didn’t receive a finger stick and why it was a venous draw,” Grossman said. “I also asked him why it took longer than four hours to get my test results back.”
Balwani assured him it was because his doctor ordered an unusual test, Grossman said.
Still, PFM invested $96.1 million in Theranos in February 2014. That investment included $2.2 million from a friends and family fund, which Grossman said had money in it from low-income people.
PFM eventually settled its lawsuit against Theranos after accusing the company of securities fraud.
Holmes has pleaded not guilty to 12 counts of wire fraud and conspiracy to commit wire fraud. As a witness to the prosecution, Grossman’s testimony underpins one of the wire fraud counts.
For 11 weeks, Holmes has sat at the defense table as government witnesses have testified. A key question remaining is whether the defense will present a case after the prosecution rests.
“We don’t even know if there is a defense case and if there is what it might be,” Lance Wade, an attorney for Holmes, said before the jury entered the courtroom. “We’re still in the government’s case.”
Last week Holmes’ defense team provided the government a list of potential witnesses. However, Wade said, “we’re not saying we’re presenting a defense case by giving them a sense of the witnesses.”
Nvidia CEO Jensen Huang in Taipei, Taiwan, on June 2, 2024.
Ann Wang | Reuters
Nvidia’s Blackwell Ultra chips, the company’s next-generation graphics processor for artificial intelligence, have been commercially deployed at CoreWeave, the companies announced on Thursday.
CoreWeave has received shipments of Dell-built shipments based around Nvidia’s GB300 NVL72 AI systems, Dell said on Thursday. It’s the first cloud provider to install systems based around Blackwell Ultra.
The Blackwell Ultra is Nvidia’s latest chip, expected to ship in volume during the rest of the year. The systems that CoreWeave is installing are liquid-cooled and include 72 Blackwell Ultra GPUs and 36 Nvidia Grace CPUs. The systems are assembled and tested in the U.S., Dell said.
CoreWeave shares rose 6% during trading on Thursday, Dell shares were up about 2% and Nvidia rose less than 2%.
The announcement is a milestone for Nvidia.
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AI developers still clamor for the latest Nvidia chips, which have improvements that make them better for training and deploying models.
Nvidia said Blackwell Ultra can produce 50 times more AI content than its predecessor, Blackwell.
Investors closely watch how Nvidia manages the transition when it announces new AI chips to see if there are production issues or delays. Nvidia CFO Colette Kress said in May that Blackwell Ultra shipments would start in the current quarter.
It’s also a win for CoreWeave, a cloud provider that rents access to Nvidia GPUs to other clouds and AI developers. Although CoreWeave is smaller than the cloud services operated by Amazon, Google, and Microsoft, its ability to offer Nvidia’s latest chips first give it a way to differentiate itself.
CoreWeave historically has a close relationship with Nvidia, which owns a stake in the cloud provider. CoreWeave went public earlier this year, and the stock price has quadrupled since its IPO.
Jeremy Allaire, CEO and co-founder of Circle Internet Group, the issuer of one of the world’s biggest stablecoins, and Circle Internet Group co-founder Sean Neville react as they ring the opening bell, on the day of the company’s IPO, in New York City, U.S., June 5, 2025.
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For over three years, venture capital firms have been waiting for this moment.
Tech IPOs came to a virtual standstill in early 2022 due to soaring inflation and rising interest rates, while big acquisitions were mostly off the table as increased regulatory scrutiny in the U.S. and Europe turned away potential buyers.
Though it’s too soon to say those days are entirely in the past, the first half of 2025 showed signs of momentum, with June in particular producing much-needed returns for Silicon Valley’s startup financiers. In all, there were five tech IPOs last month, accelerating from a monthly average of two since January, according to data from CB Insights.
Highlighting that group was crypto company Circle, which more than doubled in its New York Stock Exchange debut on June 5, and is now up sixfold from its IPO price for a market cap of $42 billion. The stock got a big boost in mid-June after the Senate passed the GENIUS Act, which would establish a federal framework for U.S. dollar-pegged stablecoins.
Venture firms General Catalyst, Breyer Capital and Accel now own a combined $8 billion worth of Circle stock even after selling a fraction of their holdings in the offering. Silicon Valley stalwarts Greylock, Kleiner Perkins and Sequoia Capital are set to soon profit from Figma’s IPO, after the design software vendor filed its public prospectus on Tuesday. Since its $20 billion acquisition agreement with Adobe was scrapped in late 2023, Figma has been one of the most hotly anticipated IPOs in startup land.
It’s “refreshing and something that we’ve been waiting for for a long time,” said Eric Hippeau, managing partner at early-stage venture firm Lerer Hippeau, regarding the exit environment. “I’m not sure that we are confident that this can be a sustained trend yet, but it’s been very encouraging.”
Another positive sign for the industry the past couple months was the performance of artificial infrastructure provider CoreWeave, which went public in late March. The stock was relatively stagnant for its first month on the market but shot up 170% in May and another 47% in June.
For venture firms, long considered the lifeblood of risky tech startups, IPOs are essential in order to generate profits for the university endowments, foundations and pension funds that allocate a portion of their capital to the asset class. Without handsome returns, there’s little incentive for limited partners to put money into future funds.
After a record year in 2021, which saw 155 U.S. venture-backed IPOs raise $60.4 billion, according to data from University of Florida finance professor Jay Ritter, every year since has been relatively dismal. There were 13 such offerings in 2022, followed by 18 in 2023 and 30 last year, collectively raising $13.3 billion, Ritter’s data shows.
The slowdown followed the Federal Reserve’s aggressive rate-hiking campaign in 2022, meant to slow crippling inflation. As the lower-growth environment extended into years two and three, venture firms faced increasing pressure to return cash to investors.
‘Backlog of liquidity’
In its 2024 yearbook, the National Venture Capital Association said that even with a 34% increase in U.S. VC exit value last year to $98 billion, that number is 87% below the 2021 peak and less than half the average for the four years from 2017 through 2020. It’s a troubling dynamic for the 58,000 venture-backed companies that have raised a total of $947 billion from investors, according to the annual report, which is produced by the NVCA and PitchBook.
“This backlog of liquidity drought risks creating a ‘zombie company’ cohort — businesses generating operational cash flow but lacking credible exit prospects,” the report said.
Other than Circle, the latest crop of IPOs mostly consists of smaller and lesser-known brands. Health-tech companies Hinge Health and Omada Health are valued at about $3.5 billion and $1 billion, respectively. Etoro, an online trading platform, has a market cap of just over $5 billion. Online banking provider Chime Financial has a higher profile due largely to a years-long marketing blitz and is valued at close to $11.5 billion.
Meanwhile, the highest valued private companies like SpaceX, Stripe and Databricks remain on the sidelines, and AI highfliers OpenAI and Anthropic continue to raise massive amounts of cash with no intention of going public anytime soon.
Still, venture capitalists told CNBC that there are plenty of companies with the financial metrics to be public, and that more of them are readying for the process.
“The IPO market is starting to open and the VC world is cautiously optimistic,” said Rick Heitzmann, a partner at venture firm FirstMark in New York. “We are preparing companies for the next wave of public offerings.”
There are other ways to make money in the meantime. Secondary sales, a process that involves selling private shares to new investors, are on the rise, allowing early employees and investors to get some liquidity.
And then there’s what Mark Zuckerberg is doing, as he tries to position his company at the center of AI innovation and development.
Mark Zuckerberg, chief executive officer of Meta Platforms Inc., during the Meta Connect event on Wednesday, Sept. 25, 2024.
Bloomberg | Bloomberg | Getty Images
Last month, Meta announced a $14 billion bet on Scale AI, taking a 49% stake in the AI startup in exchange for poaching founder Alexandr Wang and a small group of his top engineers. The deal effectively bought out half of the stock owned by investors, leaving them with the opportunity to make money on the rest of their holdings, should a future acquisition or IPO take place.
The deal is a big win for Accel, which led Scale AI’s Series A round in 2017, and is poised to earn more than $2.5 billion in the transaction. Index Ventures led the Series B in 2018, and Peter Thiel’s Founders Fund led the Series C the following year at a valuation of over $1 billion.
Investors now hope the Federal Reserve will move toward a rate-cutting campaign, though the central bank hasn’t committed to one. There’s also ongoing optimism that regulators will make going public less burdensome. Last week, Reuters reported, citing sources familiar with the matter, that U.S. stock exchanges and the SEC have discussed loosening regulations to make IPOs more enticing.
Mike Bellin, who heads consulting firm PwC’s U.S. IPO practice, said he anticipates a diversity of IPOs across sectors in the second half of the year. According to data from PwC, pharma and fintech were among the most active sectors for deals through the end of May.
While the recent trend in IPO activity is an encouraging sign for investors, potential roadblocks remain.
Tariffs and geopolitical uncertainty delayed IPO plans from companies including Klarna and StubHub in April. Neither has provided an update on when they plan to debut.
FirstMark’s Heitzmann said the path forward is “not at all clear,” adding that he wants to see a strong quarter of economic stability and growth before confidently saying that the market is wide open.
Additionally, other than CoreWeave and Circle, recent tech IPOs haven’t had big pops. Hinge Health, Chime and eToro have seen relatively modest gains from their offer price, while Omada Health is down.
But virtually any activity beats what VCs were experiencing the last few years. Overall, Hippeau said recent IPO trends are generally encouraging.
“There’s starting to be kind of light at the end of the tunnel,” Hippeau said.
The position was valued at about $160 million as of Wednesday’s close.
Tripadvisor shares have been flat since the start of the year after plummeting more than 30% in 2024. Last year, the travel review and booking company said it created a special committee to explore potential options.
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Starboard Value has gained a reputation for pushing for changes such as new CEOs and cost cuts by acquiring significant shares in companies.