Can an AI chatbot act as your therapist? 93 million bucks says the answer is yes.

That’s how much money Andreessen Horowitz, Radical Ventures, Forerunner Ventures, and other firms have poured into Slingshot AI, a mental health startup from Casper co-founder Neil Parikh and AI researcher Daniel Cahn. The company just released its first AI chatbot tool, dubbed Ash, after 18 months of development with 50,000 beta users.

Parikh told Tech Brew that Slingshot was born from a desire to help ease a shortage of mental health providers. He hopes Ash might eventually expand access to certain mental health support to those with issues like depression, anxiety, or social isolation, freeing human therapists to focus on patients with the most serious needs.

No-man: But how can a technology that’s reportedly causing some users to lose their grip on reality also provide mental health assistance? One key, according to Parikh, is to equip the AI with the ability to push back on its users.

Popular LLMs have a well-known sycophancy problem; their built-in yes-man nature might inadvertently egg people down paths of delusion or paranoia. Parikh said Slingshot’s team has taken pains to ensure that Ash will challenge its users when the situation calls for it.

Keep reading here.—PK

When it comes to AI, Big Tech has to spend money to make money (eventually…fingers crossed).

Companies like Microsoft, Google, and Meta have gotten that first part down, pouring tens of billions of dollars into new data centers and other AI infrastructure. Microsoft and Google saw those bets start to pay off nicely in the most recent quarter, with major growth in their respective cloud businesses. Meta also claimed its strong ad sales were fueled by AI efficiencies.

Investors cheered strong results from Meta and Microsoft this week with more than $500 billion in stock market gains, according to Reuters’ tally.

Unmet demand: Microsoft’s Azure cloud business pulled in $75 billion in the past year, notching 34% YoY growth. Along with strong overall earnings and revenue beats, the results fueled the tech giant’s ascendance as the second-ever $4 trillion company this week, behind Nvidia. This was the first time Microsoft broke out revenue for Azure specifically, beyond the “cloud services” bucket.

Keep reading here.—PK

Since nobody is exactly holding their breath for a big AI safety push in Congress these days, observers agree that the path to AI regulation in the US runs through the states. That path looked perilously close to being blocked in early July, until the Senate overwhelmingly voted down a federal budget bill moratorium that would have blocked state and local AI rules for a decade.

With that proposed ban dead—for now—experts say a surge of state-level laws may be on the way. That’s in spite of some vague threats against enforcing such regulations in Trump’s AI Action Plan. The focus of state legislation has so far ranged from targeted rules around pressing use cases like deepfakes and AI in healthcare or hiring, to comprehensive bills that cover high-risk AI models.

All-encompassing: Hope Anderson, a partner in White & Case’s data, privacy, and cybersecurity practice, compared the push to state-level efforts to legislate digital privacy in lieu of congressional action. AI-focused legislation touches on a wider range of areas, however, which is already leading to more variety in emerging state laws, she said.

Keep reading here.—PK

Usually, we write about the business of tech. Here, we highlight the *tech* of tech.

Crack a book: The Tech Brew team was on the move this week, but make no mistake: This whole production happened from the ground. We’d never stake the delivery of this newsletter on airplane wi-fi. The Atlantic asks why getting online from the air is still so spotty, and why the “service has been stuck in a limbo of mediocrity for two decades.”

Speaking of books: We spend most of our day on screens, so we tend to prefer paper books over e-readers for a change of pace when we read for pleasure. Wired has notes on the best reading lights for snugging up with a new novel.