So, it's no surprise VCs are throwing gobs of money at AI startups — especially those run by big names in tech — so SandboxAQ is out with its hand again, even though the company raised a whopping $500 million in early 2023.

Alphabet, the parent of Google, is said to be raising another round that will take the value of the spinoff to $5 billion, sources said to Bloomberg. The last $500 million round was done in February 2023, whose backers were Breyer Capital, T. Rowe Price funds, and Marc Benioff, according to Reuters, which had covered the funding round when it happened. PitchBook estimated the valuation after that round to be $4 billion.

SandboxAQ was born out of Alphabet's moonshot AI quantum computing unit, headed by Jack Hidary. It is a veteran X Prize board member who leaves the corporate umbrella of Alphabet to form an independent startup from his new headquarters in New York in March 2022. Hidary will be the CEO. Billionaire and former Google CEO Eric Schmidt has joined as chairman.

Its mission is an alphabet soup of buzzwords: working at the intersection of quantum computing and AI. It is not building a quantum computer. Though its software products should one day work with them, Hidary told the host on a recent episode of the Peter H. Diamandis podcast. What it's doing is building software based on quantum physics that can model molecules and make predictions about their behavior. Google is still working on the quantum computer part, but Hidary says SandboxAQ already has a number of quantum computing partnerships.

The startup is playing in an enormous and somewhat chaotic variety of products involving life science, materials science, navigation, encryption, and cybersecurity.

It's not working with AI of the generative AI ChatGPT chatbot variety. Instead of predicting language, it is using large modeling AI techniques on equations. Or, as Hidary explained, "Instead of the world of large language models, we've now entered the world of large quantitative models, LQMs. And LQMs are about starting with equations to generate data. …That's the most efficient way to generate data, and the most accurate way to generate data."

To that end, it already boasts a list of impressive developmental contracts. For instance, it is developing ways to extend the life of lithium-ion batteries with battery company Novonix; it has a contract with the U.S. Air Force to develop magnetic navigation systems that do not rely on GPS; and it's working with a number of U.S. hospitals on an AI-powered "magnetocardiography system," a new kind of medical device for imaging the heart, among other projects.

So, this AI swings at bigger fences than writing term papers or creating deepfake videos.

That said, there are indeed some interesting signs that one day, SandboxAQ may turn into an AI company that VCs will invest serious dosh in. Throughout the year, several investors have stood up special purpose vehicles (SPVs) to buy its shares. As we previously reported, such SPVs have become a hot financial tool because so many investors want to get a piece of big-name AI startups.