When Eric Wollberg and Wesley Berry met in March, Wollberg was chasing the idea of using lucid dreams to explore consciousness and Berry was working with the musician Grimes on translating neural signals into art. Both were fascinated by how brain-imaging tools could help paint a picture of someone’s thought patterns.
The two, ages 29 and 27, respectively, co-founded Prophetic that same month. It’s a tech startup building what the company calls the “world’s first wearable device for stabilizing lucid dreams.” It’s a headband-like device that issues focused ultrasound signals.
Lucid dreams occur when a person sleeping becomes aware they’re dreaming and may be able to control parts of the dream.
The startup has raised a previously unreported $1.1 million funding round with participation from a16z’s Scout Fund, and led by BoxGroup, the VC fund known for being first to invest in fintech company Plaid. To prototype the noninvasive device, dubbed the “Halo,” Prophetic has partnered with Card79 — the same company that designed and built hardware for Elon Musk’s brain-computer interface company, Neuralink.
Prophetic’s hardware bet comes at a time when a handful of artificial intelligence companies are investing in devices or wearables. Humane AI, a company founded in 2017 by former Apple employees, debuted its wearable — the AI Pin — on the runway last week at Paris Fashion Week. And famed iPhone designer Jony Ive and OpenAI’s Sam Altman are also reportedly discussing an AI hardware project.
Wollberg and Berry, Prophetic’s CEO and chief technology officer, respectively, plan to showcase a semi-working prototype either later this month or in early November. But the full test of the prototype, they say, will have to wait until the third or fourth quarter of 2024, after the conclusion of a yearlong study on brain imaging conducted in partnership with the Donders Institute for Brain, Cognition and Behaviour, part of Radboud University in the Netherlands.
The co-founders have the type of lofty dreams typical of a modern-era tech startup, with Wollberg comparing the company to OpenAI. Its mission is to work “collectively towards understanding the nature of consciousness” and its LinkedIn page reads, “Prometheus stole fire from the gods, we will steal dreams from the prophets.”
But a year out from a fully working prototype, with plans to ship devices starting in spring 2025, Prophetic is still a ways away from delivering on its promises.
Lucid dreaming through a headset
Lucid dreaming has fascinated the public and the neuroscience community alike for decades, spawning references across pop culture, from films like “The Matrix” and “Inception,” to a Reddit community (r/LucidDreaming) with more than 500,000 members. Neuroscientific studies on the subject date back to the 1970s, according to research published in the National Library of Medicine, but interest has increased with the expansion of the cognitive neuroscience field.
Wollberg had his first lucid dream at age 12, and though he doesn’t remember exactly what he did, he called it “just about the most profound experience I’ve ever had.” In college, he started lucid dreaming twice a week and realized he wanted to create a way to use the practice to explore consciousness on a deeper level.
Meanwhile, co-founder Berry had a background in neurotech prototyping — specifically, feeding electroencephalogram, or EEG, data into a transformer neural network, an AI model pioneered by Google, to explore what people may be seeing in their minds. That’s the kind of work he had been doing with Grimes.
“Eric came to me and he told me what he was working on, and I didn’t think the technology was there at that time — we can’t induce dreams, let alone lucid ones, so how could this be possible?” Berry told CNBC. “The defining moment for me was when I realized that you’re not inducing the dream state itself — someone is already dreaming normally, which happens for most people multiple times a week. You’re simply activating the prefrontal cortex, and it turns lucid.”
Wollberg and Berry are counting on the results of the Donders Institute’s yearlong study to provide enough training data for their AI to work on the Halo device. The golden-ticket type of brain data they’re looking for via the study is gamma frequencies — the fastest measurable “band” of brain wave frequencies, which occur in states of deep focus and are a hallmark of an active prefrontal cortex, which is believed to be a defining characteristic of lucid dreams.
While today’s leading transformer models that underpin tools like OpenAI’s ChatGPT deal in inputs and outputs of text, Berry is aiming to do something differently with Prophetic. His plan is to use a convolutional neural net to decode brain-imaging data into “tokens,” then feed those into the transformer model in a way it can understand them.
“You can create this closed loop where the model is learning and figuring out what sort of sequences of brain states need to occur, what sort of sequences of neuro-stimulation need to occur, in order to maximize the activation of the prefrontal cortex,” Berry said.
Prophetic’s goal with the prototype is to use focused ultrasounds to stimulate the user’s prefrontal cortexes while dreaming. Research suggests that focused ultrasound stimulation can improve working memory, and Berry compares that, in a way, to the idea of not knowing how you got somewhere while dreaming. It’s part of why he believes there’s a “really, really, really good shot that this works.”
“My conviction strongly comes from how it feels like a quantum leap … when you’re using this focused ultrasound,” Berry said. “It’s quite a bit better than everything else that’s been done.”
TikTok’s grip on the short-form video market is tightening, and the world’s biggest tech platforms are racing to catch up.
Since launching globally in 2016, ByteDance-owned TikTok has amassed over 1.12 billion monthly active users worldwide, according to Backlinko. American users spend an average of 108 minutes per day on the app, according to Apptoptia.
TikTok’s success has reshaped the social media landscape, forcing competitors like Meta and Google to pivot their strategies around short-form video. But so far, experts say that none have matched TikTok’s algorithmic precision.
“It is the center of the internet for young people,” said Jasmine Enberg, vice president and principal analyst at Emarketer. “It’s where they go for entertainment, news, trends, even shopping. TikTok sets the tone for everyone else.”
Platforms like Meta‘s Instagram Reels and Google’s YouTube Shorts have expanded aggressively, launching new features, creator tools and even considering separate apps just to compete. Microsoft-owned LinkedIn, traditionally a professional networking site, is the latest to experiment with TikTok-style feeds. But with TikTok continuing to evolve, adding features like e-commerce integrations and longer videos, the question remains whether rivals can keep up.
“I’m scrolling every single day. I doom scroll all the time,” said TikTok content creator Alyssa McKay.
But there may a dark side to this growth.
As short-form content consumption soars, experts warn about shrinking attention spans and rising mental-health concerns, particularly among younger users. Researchers like Dr. Yann Poncin, associate professor at the Child Study Center at Yale University, point to disrupted sleep patterns and increased anxiety levels tied to endless scrolling habits.
“Infinite scrolling and short-form video are designed to capture your attention in short bursts,” Dr. Poncin said. “In the past, entertainment was about taking you on a journey through a show or story. Now, it’s about locking you in for just a few seconds, just enough to feed you the next thing the algorithm knows you’ll like.”
Despite sky-high engagement, monetizing short videos remains an uphill battle. Unlike long-form YouTube content, where ads can be inserted throughout, short clips offer limited space for advertisers. Creators, too, are feeling the squeeze.
“It’s never been easier to go viral,” said Enberg. “But it’s never been harder to turn that virality into a sustainable business.”
Last year, TikTok generated an estimated $23.6 billion in ad revenues, according to Oberlo, but even with this growth, many creators still make just a few dollars per million views. YouTube Shorts pays roughly four cents per 1,000 views, which is less than its long-form counterpart. Meanwhile, Instagram has leaned into brand partnerships and emerging tools like “Trial Reels,” which allow creators to experiment with content by initially sharing videos only with non-followers, giving them a low-risk way to test new formats or ideas before deciding whether to share with their full audience. But Meta told CNBC that monetizing Reels remains a work in progress.
While lawmakers scrutinize TikTok’s Chinese ownership and explore potential bans, competitors see a window of opportunity. Meta and YouTube are poised to capture up to 50% of reallocated ad dollars if TikTok faces restrictions in the U.S., according to eMarketer.
Watch the video to understand how TikTok’s rise sparked a short form video race.
The X logo appears on a phone, and the xAI logo is displayed on a laptop in Krakow, Poland, on April 1, 2025. (Photo by Klaudia Radecka/NurPhoto via Getty Images)
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Elon Musk‘s xAI Holdings is in discussions with investors to raise about $20 billion, Bloomberg News reported Friday, citing people familiar with the matter.
The funding would value the company at over $120 billion, according to the report.
Musk was looking to assign “proper value” to xAI, sources told CNBC’s David Faber earlier this month. The remarks were made during a call with xAI investors, sources familiar with the matter told Faber. The Tesla CEO at that time didn’t explicitly mention any upcoming funding round, but the sources suggested xAI was preparing for a substantial capital raise in the near future.
The funding amount could be more than $20 billion as the exact figure had not been decided, the Bloomberg report added.
Artificial intelligence startup xAI didn’t immediately respond to a CNBC request for comment outside of U.S. business hours.
The AI firm last month acquired X in an all-stock deal that valued xAI at $80 billion and the social media platform at $33 billion.
“xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent,” Musk said on X, announcing the deal. “This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”
Alphabet CEO Sundar Pichai during the Google I/O developers conference in Mountain View, California, on May 10, 2023.
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Alphabet‘s stock gained 3% Friday after signaling strong growth in its search and advertising businesses amid a competitive artificial intelligence environment and uncertain macro backdrop.
“GOOGL‘s pace of GenAI product roll-out is accelerating with multiple encouraging signals,” wrote Morgan Stanley‘s Brian Nowak. “Macro uncertainty still exists but we remain [overweight] given GOOGL’s still strong relative position and improving pace of GenAI enabled product roll-out.”
The search giant posted earnings of $2.81 per share on $90.23 billion in revenues. That topped the $89.12 billion in sales and $2.01 in EPS expected by LSEG analysts. Revenues grew 12% year-over-year and ahead of the 10% anticipated by Wall Street.
Net income rose 46% to $34.54 billion, or $2.81 per share. That’s up from $23.66 billion, or $1.89 per share, in the year-ago period. Alphabet said the figure included $8 billion in unrealized gains on its nonmarketable equity securities connected to its investment in a private company.
Adjusted earnings, excluding that gain, were $2.27 per share, according to LSEG, and topped analyst expectations.
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Alphabet shares have pulled back about 16% this year as it battles volatility spurred by mounting trade war fears and worries that President Donald Trump‘s tariffs could crush the global economy. That would make it more difficult for Alphabet to potentially acquire infrastructure for data centers powering AI models as it faces off against competitors such as OpenAI and Anthropic to develop largely language models.
During Thursday’s call with investors, Alphabet suggested that it’s too soon to tally the total impact of tariffs. However, Google’s business chief Philipp Schindler said that ending the de minimis trade exemption in May, which created a loophole benefitting many Chinese e-commerce retailers, could create a “slight headwind” for the company’s ads business, specifically in the Asia-Pacific region. The loophole allows shipments under $800 to come into the U.S. duty-free.
Despite this backdrop, Alphabet showed steady growth in its advertising and search business, reporting $66.89 billion in revenues for its advertising unit. That reflected 8.5% growth from the year-ago period. The company reported $8.93 billion in advertising revenue for its YouTube business, shy of an $8.97 billion estimate from StreetAccount.
Alphabet’s “Search and other” unit rose 9.8% to $50.7 billion, up from $46.16 billion last year. The company said that its AI Overviews tool used in its Google search results page has accumulated 1.5 billion monthly users from a billion in October.
Bank of America analyst Justin Post said that Wall Street is underestimating the upside potential and “monetization ramp” from this tool and cloud demand fueled by AI.
“The strong 1Q search performance, along with constructive comments on Gemini [large language model] performance and [AI Overviews] adoption could help alleviate some investor concerns on AI competition,” Post wrote in a note.