Houston health cos. sweep at competition, startups announce new deals, and more innovation news

short stories

Several Houston startups claimed the top prizes at a recent competition — plus more Houston innovation news you may have missed. Photo courtesy of TNVC

It's been a busy season for the Houston innovation ecosystem, and for this reason, local startup and tech news may have fallen through some of the cracks.

In this roundup of short stories within Houston innovation, a consumer packaged goods startup is now on shelves across Texas, a Texas energy company gets fresh funding from Houston VCs, Texas Medical Center Innovation companies sweep at a recent competition, and more.

Houston health care startups sweep recent competition

Houston-based Starling Medical took home the top prize at a recent competition. Photo courtesy of TNVC

At the 2021 Texas A&M New Ventures Competition, several Houston companies claimed top prizes — essentially sweeping the competition. The top three winners were all member companies of Texas Medical Center Innovation:

  • First Place Finalist: Houston-based Starling Medical – $50,000
  • Second Place Finalist: Houston-based Ictero Medical – $35,000
  • Third Place Finalist: Koda Health – $25,000
Other Houston-area award winners included:
  • Fourth Place Finalist: Microsilicon – $15,000
  • Sixth Place Finalist: CodeWalker – $5,000
  • Elevator Pitch First Place: EmGenysis – $5,000
  • Elevator Pitch Fourth Place: TYBR Health – $1,00
Click here to view more details on the 2021 award results.

Houston CPG company scores Central Market placement

Central Market now carries this Houston startup's baked goods. Photo courtesy of ChipMonk Baking

As of this month, Central Market shoppers in Texas can purchase Houston-based ChipMonk Baking products products. Additionally, the company announced it has added added 1,100 square feet to its existing 2,300 square-foot facility.

Founded by David Downing and Jose Hernandez, ChipMonk Baking, is a local, mail-order bakery that makes cookies, brownie bites, and other snacks using monk fruit and allulose, a low-calorie (0.4 calories per gram) rare sugar that's found naturally in foods such as raisins, dried figs, and kiwi.

The nine open Central Market locations throughout Texas will carry all nine flavors of ChipMonk's Keto Cookie Bites.

"Here in Houston, ChipMonk is the healthy option — there is nothing else like our products being made in a city that's known around the world for food," says Downing in a press release. "When you consider Houston's diversity and international culinary reputation, the lack of local health-food representation and production just doesn't make sense. We love this city and are working to change that."

Houston Methodist doles out $2.5 million in grants

Houston Methodist has contributed a couple million dollars to Houston nonprofits. Courtesy of Methodist Hospital/Facebook

Houston Methodist announced a couple weeks ago that it has awarded nearly $2.5 million in community grant investment to 37 Houston-area nonprofit organizations, according to a news release from the health care organization.

Over 177 Houston nonprofits applied for the Houston Methodist Diversity, Equity & Inclusion Grant Program, a program created last year to address the social determinants of health that lead to health inequities within racial, ethnic and social minorities.

"We continuously strive to build and maintain a diverse, equitable and inclusive environment both within our hospital walls and within our communities," says Arianne Dowdell, vice-president, chief diversity, equity and inclusion officer at Houston Methodist, in the release. "The grant program and all the deserving organizations awarded funds are critical in shaping our community, which Houston Methodist has proudly supported for decades. We look forward to fostering the growth and development of meaningful programs that will benefit underserved and underrepresented groups in Houston."

The program, which includes both DEI Grants and Social Equity Grants, is funded by a $25 million fund established by Houston Methodist to be doled out over five years to support underserved communities.

Innovative energy company receives funding from Houston venture capital

Houston-based Cottonwood Venture Partners and Chevron Technology Ventures have again invested in this Austin-area energy company. Photo courtesy of Getty Images

Two Houston venture capital groups recently went in on Round Rock, Texas-based Infinitum Electric's $40 million series C funding round. Houston-based Cottonwood Technology Fund and Chevron Technology Ventures — both existing investors for the company — doubled down on their support in the new round led by San Francisco-based Energy Innovation Capital.

The fresh funds will allow the company to scale production of its ultra-high-efficiency, lightweight motors and "expand production of the company's IEs Series motors for commercial and industrial applications and complete development of its IEm Series motors for the rapidly growing electric vehicle market," according to the company's news release.

"We're excited to ramp production of our motors after seeing significant demand in the commercial HVAC and industrial markets, as well as the growing interest from electric vehicle suppliers who see the potential a highly efficient, lightweight motor can deliver," says Ben Schuler, founder and CEO of Infinitum Electric, in the news release. "Partnering with Energy Innovation Capital, Rockwell Automation and our existing investors allows us to scale and power machines more efficiently and sustainably."

Houston nanotechnology startup scores distribution deal

Houston-based NanoTech, currently housed in Halliburton Labs, has a new distribution agreement. Photo via halliburtonlabs.com

NanoTech has announced a new distribution agreement with Warrior Ace Hardware, a supplier of specialty products for the commercial and residential building industries. NanoTech uses material science to create NanoShield, a fire-proofing and insulation product.

The new partnership offers a key opportunity for NanoTech, which recently closed a $5 million round of funding.

"Ace Hardware has close to 100 years of distribution and retail experience. We are excited to partner with such a respected brand to get us one step closer to saving a tremendous amount of lives, protecting infrastructure, and reducing energy consumption," says Mike Francis, CEO of NanoTech in a news release.

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Houston lab explores how AI bots can help the elderly

AI for aging

The University of Houston’s Empathetic Lifespan AI & Robotics for Aging (ELARA) Lab is currently conducting research into how AI bots may be able to help the elderly live more social and independent lives through several ongoing initiatives.

The lab officially launched last month as part of the Gerald D. Hines College of Architecture & Design under the leadership of Assistant Professor Chorong Park. Part of the lab’s mission is tackling ongoing problems with aging, such as dealing with disabilities and social isolation. Researchers’ current work is focused on designing a new AI companion bot specifically tailored to the needs of older people.

“We need to take all the needs of older adults seriously,” Park said in a news release. “They won't use the robot if they don't feel at ease or if they feel they are being constantly watched.”

The field testing of new AI bots in this population hopes to overcome several traditional obstacles in technology use among the elderly. A study by Park shows that many older people have a fear of overt surveillance when using advanced AI. There is also ageism to consider. Most new technologies are designed with younger and employed buyers in mind, not retirees who may need help remembering daily tasks or accessing important information.

“The more older adults are excluded from technology development, the worse those technology gaps will become,” Park said. “AI and the majority of technologies are created for younger people, so my research method integrates older adults directly into the design process.”

ELARA recently collaborated with the Mamie George Community Center in Richmond, Texas, to track seniors’ response to desktop AI bots like Emo and Cupboo. Researchers also had participants use air-dry modeling clay to create their ideal robotic companion.

While the eventual AI bot may be able to help the elderly feel less isolated and more supported, there are concerns to consider. A study published in the Asian Journal of Psychology charted the development of delusional thinking in a 72-year-old woman who became convinced the empathic-response bot was in love with her. The rise of “AI psychosis” has the potential to exacerbate mental health problems, particularly in socially isolated people, which a quarter of Americans over the age of 65 are.

ELARA’s research is focused on creating “pet-like” AI models with enhanced trust cues. If it can overcome the dangers of socially isolated people relying on AI for companionship, it could be a big step forward for independent aging.

SpaceX IPO set to be biggest ever and could make Elon Musk a trillionaire

IPO News

SpaceX says it plans to raise up to $75 billion when it goes public this month, setting the stage for the largest-ever stock market debut and putting Elon Musk on course to becoming the world's first trillionaire.

The company, formally known as Space Exploration Technologies Corp., said Wednesday it will sell 555.6 million shares at $135 a piece in an initial public offering. The estimated proceeds would easily top the $26 billion raised by oil giant Saudi Aramco in 2019. The offering would also give SpaceX a market value of $1.77 trillion. Only six companies in the S&P 500 are currently worth more, with Nvidia tops at $5.2 trillion.

Besides the size of the offering and the expected proceeds, SpaceX's amended prospectus updates details about how much control of the company Musk will have. As SpaceX's CEO, chief technical officer and chairman, Musk's voting power will come primarily through his ownership of 5.22 billion Class B shares, which give the holder 10 votes for every share held. According to the filing, Musk would have 82.4% of the voting power in the company.

Forbes currently values Musk's net worth at $826 billion and his stake in SpaceX at $542 billion. The estimated value of his SpaceX holdings was based on an overall value for the company of $1.25 trillion. Based on those numbers, a $1.77 trillion valuation for SpaceX would boost Musk's net worth by $223 billion, making him a trillionaire. However, much of Musk's worth is in stock that he has yet to cash in.

Even as it makes a bid for a blockbuster market debut, SpaceX is currently losing billions of dollars a year. The filing shows that the company lost $2.6 billion from operations last year on $18.7 billion in revenue, and the losses kept piling up at the start of this year, too.

Fantastical plans

Time will tell how SpaceX fares on the market. Musk's plans for the company are as fantastical as the money he hopes raise in the sale.

Colorful, even frightening in parts, the IPO document strikes a contrast with the typically dry, technical prose in IPO documents, detailing plans to use proceeds from the sale to help put men on the moon again and perhaps even Mars. In one section, it talks of a need to build "a permanent human colony" on the red planet with "at least one million inhabitants" as existential threats loom that could consign man to "the same fate as the dinosaurs."

Musk has almost equally ambitious plans for his other publicly traded company, Tesla. His goal is to transform the maker of electric vehicles into a producer of robotaxis and humanoid robots. Dan Ives of Wedbush Securities wrote in a research note that he expects Tesla and SpaceX to merge next year.

AI plays a key role

Key to the success of both companies — and any merged entity — is artificial intelligence. In its IPO filing, SpaceX says it sees potential revenue from AI of up to $26.5 trillion. But that depends on another lofty Musk ambition — putting data centers in space, which is not technologically possible at the moment.

Transforming his space company into a primarily AI-focused company will be a challenge for Musk, who started xAI in 2023 with 11 other co-founders who have all since left. Some were recruited away by rivals.

Its main AI product, the chatbot Grok, is "less impressive than anything that we see from any other major player in the space, whether that's OpenAI, or Anthropic, or (Google's) Gemini," said IDC analyst Arnal Dayaratna.

Dayaratna said that doesn't mean SpaceX doesn't have potential as a major AI player, thanks in part to its computing partnership with Anthropic and Musk's recent deal that gave SpaceX the rights to buy AI coding tool Cursor for $60 billion later this year. Folding in Cursor's capabilities would give SpaceX access to the coveted business customers now using Anthropic's Claude or OpenAI's ChatGPT.

SpaceX plans to use the net proceeds from the IPO to fund the expansion of infrastructure for its AI and rocket businesses, and to beef up the constellation of satellites that power Starlink Mobile, among other investments.

The company plans to list on the Nasdaq under the symbol "SPCX" and could begin trading as soon as the end of next week.

And SpaceX isn't the only colossal market debut investors are now bracing for. Earlier this week, Anthropic submitted a confidential filing with the U.S. Securities and Exchange Commission to officially start its own IPO clock.

OpenAI has not yet reported filing the initial SEC paperwork, but an IPO from the ChatGPT maker is widely expected.

"This listing represents the first major test for public markets after years of muted IPO activity with SpaceX paving the way for AI giants Anthropic and OpenAI to follow soon after," Ives wrote.

___

Associated Press Technology Writer Matt O'Brien contributed.

New UH survey reveals concerns over AI data center growth in Houston

data findings

A new report out of the University of Houston shows that area residents remain wary of the long-term effects of operating data centers.

The recent survey from the University of Houston’s latest SPACE City Panel, conducted by the Center for Public Policy at the Hobby School of Public Affairs, shows that while 85 percent of Houston-area residents use AI, nearly 63 percent oppose the construction of AI data centers within 1 mile of their homes.

Respondents’ concerns centered around data centers’ high energy demand and the area’s power grid reliability. According to the survey, 32 percent of residents who oppose local data center projects would be more likely to support the centers if they relied on renewable energy over fossil fuels.

“Respondents understand that AI can bring economic and educational benefits, but they are also concerned about the physical infrastructure needed to fuel AI, especially data centers,” Soran Mohtadi, post-doctoral fellow at the Hobby School and a researcher on the report, said in a news release. “This physical infrastructure demands more electricity and water, leading to environmental impacts.”

Experts estimate that 6.5 gigawatts of data center capacity will be added to the Texas grid by 2030. And Houston’s data center capacity is predicted to more than double by 2028.

The Electric Reliability Council of Texas also projects electricity demand could reach 218 gigawatts by 2031, which would be more than double the record peak set in August 2023. Data centers are expected to account for 86 gigawatts of that new demand.

Survey respondents also said they are concerned about the state's future water supply, given the large amounts of water that data centers need to stay cool.

In terms of who’s responsible for that issue, 57.6 percent of respondents said they put the onus on Texas lawmakers, while 31.5 percent say tech companies should be responsible.

Additionally, more than 75 percent of respondents believed that data center developers and technology companies—not residents—should bear the cost of infrastructure upgrades to support data centers.

“Every decision legislators make has implications on residents’ everyday lives and local infrastructure now and in the future,” Maria P. Perez Arguelles, lead researcher on the report and research assistant professor at the Hobby School, added in the news release. “This issue is going to become more important in years to come, so this is just the beginning.”

Read the full report here.

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