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In a twist that shocks absolutely no one and excites pyromaniacs who love watching money burn, Elon Musk’s latest enterprise, xAI, has raised $6 billion in funding. Valor, a16z and Sequoia place money on an xAI-shaped roulette table and Musk spins the wheel.
Ivan wonders whether Musk’s latest market foray will finally bring us artificial intelligence so advanced that it should make our frail human brains much more obsolete than they already are due to his other crazy projects.
I think it’s completely crazy. These investors seem flush with money and not devoid of skepticism. I can only imagine this proposition: “Imagine an AI so powerful it makes HAL 9000 look like a Roomba.” And in fact they threw money at it. Because well… Honestly, I do not see the logic.
What makes this case especially crazy is that the $6 billion bonanza is the latest chapter in Musk’s epic saga of “how to get the world to finance my sci-fi fantasies.” The more stories that come out about Musk, the more you’d think people would change into hesitant to speculate. But apparently that is why I’m a newsletter author and podcast host (we also talked about this today at Equity) and not a VC. I’d think twice before betting on the guy who gave us autonomous cars that may’t detect fire trucks and spaceships that sometimes land but sometimes also explode into a fiery spectacle.
The most interesting startup stories of the week
Welcome to the Wild West of fintech! Remember that vibrant, shining star called Synapse? Yes, it was a supernova. The banking-as-a-service startup gave the impression to be heading for the stratosphere, and Synapse itself was backed by a16z, but that did not help. The company failed faster than my New Year’s resolutions. Considering that 10 million consumers are left in the lurch and many fintechs are struggling to select up the pieces, we are dealing with a total disaster. It’s like Game of Thrones, but with more spreadsheets and fewer dragons. If you think your week has been rough, spare a thought for those stuck attempting to access their funds or save their job due to this mess. Buckle up – it is going to be a bumpy road ahead for fintech!
- Drama rides a motorcycle: James Khatiblou, the 37-year-old owner and CEO of Onyx Motorbikes, has died as his company finds itself in the mud. Unpaid bills, an absent COO, offended customers demanding refunds for delayed electric bikes from China, and two former shareholders fighting for control of Onyx’s remaining assets… It’s one hell of a ride.
- Reduction of jobs in the automotive industry ground: Lucid Motors is slimming down once again, shedding 400 employees (6% of its workforce) just in time for the launch of its first SUV. Apparently they should “optimize resources”. CEO Peter Rawlinson believes lower employment will help create the world’s best SUV… Meanwhile, Fisker has laid off lots of of staff in a desperate bid to survive. Employees got the hint when they were suddenly told to work from home – presumably to forestall anyone from hearing the collective sighs of despair during an all-staff meeting.
- Collecting money to get monetary savings: Relay just launched a $32.2 million Series B funding round to assist small businesses do greater than just nervously refresh their bank balances. Their secret sauce? Focusing on mom and pop stores relatively than tech startups – take that, Silicon Valley!
The most interesting collections this week
Firefly, a cloud asset management startup that goals to simplify digital chaos using “infrastructure as code,” has raised $23 million in funding. This comes after an unimaginable tragedy – co-founder CTO Joseph “Sefi” Genis was killed by Hamas at a music festival. Despite this, the Firefly team selected resilience over retreat and continued to quadruple its revenue in 2023. In short, Firefly currently solves complex cloud problems and navigates real-world disruption like absolute champions.
- This is going great: Google just infused $350 million into Flipkart, making it the latest VIP backer of the Indian e-commerce powerhouse, which is now valued at $36 billion.
- You get dinner! You get dinner!: Sending money home just got a lot more chatty! Félix Pago, the fintech darling that makes money transfers as easy as sending a WhatsApp, just landed $15.5 million in funding. Forget about downloading apps and navigating complicated interfaces; this startup uses a WhatsApp chatbot.
- Dictionary with unicorn horn: Startups focusing on AI are committing more resources. DeepL, which makes automatic translation and text writing tools that compete with tools like Google Translate and Grammarly, raised an additional $300 million. Its current value is estimated at $2 billion.
Other stories you’ll be able to’t miss on TechCrunch…
Are you dreaming about technological innovations at the IPO in 2024? Well, get up and feel the increased rates of interest! Even though Reddit, Astera Labs, Ibotta, and Rubrik all managed to squeeze through the IPO doors earlier this yr, it looks like most startups are still stuck at home in their pajamas. Plaid’s CEO has stated that it stays private for now, and Figma and Stripe are busy bidding on tenders as if they were having a bake sale relatively than preparing for an IPO. Databricks raised $500 million, but it is not feeling the public market vibe either; possibly next yr they’ll feel more extroverted. And Canva? It may take so long to make them public that by then we can be designing newsletters directly from our brain implants. Stay tuned as TechCrunch will proceed to trace which startups dare to enter the stock market runway or hide behind the curtains of enterprise capital!
More top stories:
- What is happening in the land of messengers: Signal CEO Meredith Whittaker has had enough of problems with tech industry “frat boys” and their “dorm antics.” At VivaTech in Paris, she didn’t hold back on concerns about all the pieces from an AI takeover by US firms to misguided attempts at regulation in the EU.
- Artificial intelligence in your ears: Welcome to the battle of generative AI gadgets, now featuring Iyo’s GenAI in-ear headphones! Humane and Rabbit R1 flopped harder than a fish out of water, but Iyo thinks they’ll make it where they stumbled. Unlike the quirky lapel pins of its predecessors and overpriced handheld devices that critics say ought to be app-only, Iyo is betting on an already beloved form factor: Bluetooth in-ear headphones.
- Dude, where’s my wallet?: Is that a bird? Is that a plane? No, it’s Ledger Stax, finally descending from the crypto skies 18 months after the big announcement. This recent high-end hardware wallet features an E Ink display designed by iPod guru Tony Fadell – yes, it brings back the e-reader feel for your cryptocurrency needs.
- Wait, Foursquare needed to lay off 105 employees?: Foursquare just hired 105 employees in an effort to “streamline” operations and put itself on a more solid financial footing. CEO Gary Little, who might as well have clicked “send” and then disappeared into thin air, didn’t shed much light on what got here next.
- I’ll summarize it for you: It looks like Apple is back to its old tricks and is ready for “Sherlock” with one other modern app feature. This time, The Browser Company is in the crosshairs, offering amazing AI-powered summarization tools like “browse for me” and “pinch to summarize.” Rumors about Apple’s “intelligent summaries” in iOS 18 sound suspiciously similar, and potentially turn Safari into an AI-powered one-stop shop for summaries of all the pieces from web pages to missed notifications.