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In a twist that will shock absolutely no one and excite arsonists who love to see money burn, Elon Musk’s latest venture, xAI, has received an occasional $6 billion in funding. Valor, a16z and Sequoia are stacking money on the xAI-shaped roulette table, with Musk spinning the wheel.
Ivan wonders if Musk’s latest blockbuster will finally bring us AI so advanced that it will make our tiny human brains even more obsolete than his other wild projects.
I think it’s completely insane. These investors appear to be flush with cash and fresh off their skepticism. I can only imagine the thought: “Imagine an AI so powerful it makes the HAL 9000 look like a Roomba.” And of course they threw money at it. Because, well… Honestly, I don’t see the logic in that.
What’s especially crazy is the fact that $6 billion is just the latest chapter in Musk’s epic “getting the world to fund my sci-fi fantasy” saga. The more stories about Musk come out, the more you’d think people would be hesitant to invest. But apparently that’s why I’m a newsletter writer and podcast host (we also talked about this on Equity today) and not a VC. I’d think twice before betting on the guy who gave us self-driving cars that couldn’t spot fire trucks and spaceships that sometimes land but sometimes explode in a fiery spectacle.
Today is your last day to save up to $800 on the Disrupt Card. Reserve your early bird ticket by 11:59pm PT tonight!
The most interesting startup stories of the week
Welcome to the wild, wild west of fintech! Remember that bright shining star called Synapse? Yep, supernova. The banking-as-a-service startup was a segment that seemed headed for the stratosphere, and Synapse itself was backed by a16z — but that didn’t help anyone. The business collapsed faster than my New Year’s resolution. With 10 million consumers now left in the lurch and many fintechs scrambling to pick up the pieces, this is a full-blown disaster. It’s like “Game of Thrones” but with more tables and less dragons. If you thought your week was rough, spare a thought for those struggling to access their money or save their jobs because of this mess. Buckle up – it’s going to be a bumpy ride for fintech!
- Drama rides a motorcycle: James Khatiblou, the 37-year-old owner and CEO of Onyx Motorbikes, died just as his company was circling the canal. With unpaid bills, an AWOL COO, angry customers demanding refunds for delayed e-bikes from China, and two former shareholders fighting for control of Onyx’s remaining assets… It’s been one hell of a ride.
- Cutting jobs in the automotive industry land: Lucid Motors is trimming the fat again, laying off 400 employees (6% of its workforce) just in time for the launch of their first SUV. Apparently they need to “optimize resources”. CEO Peter Rawlinson believes reduced staff will help deliver the best SUV in the world… Meanwhile, Fisker has laid off hundreds in a desperate bid to survive. The staff understood this when they were suddenly told to work from home – presumably so no one could hear the collective sighs of despair during the all-hands meeting.
- Collecting cash to save cash: Relay just raised a $32.2 million Series B funding round to help small businesses do more than nervously renew their bank balances. Their secret sauce? Focusing on mom-and-pop shops rather than tech startups – take that, Silicon Valley!
This week’s most interesting collections
Firefly, a cloud asset management startup that aims to simplify your digital chaos with “infrastructure as code,” has raised $23 million in funding. This happened after an unimaginable tragedy – CTO co-founder Joseph “Sefi” Genis was killed by Hamas at a music festival. Despite this, the Firefly team chose to resist the retreat and continued to quadruple its revenue in 2023. So basically, Firefly is now unraveling the complexities of the cloud and sailing through real-world turmoil like absolute champs.
- That’s awesome: Google just pumped a whopping $350 million into Flipkart, becoming the latest VIP to back India’s e-commerce powerhouse, which is now valued at $36 billion.
- You get dinero! You get dinero!: Sending money back home is now much more chatty! Félix Pago, the fintech darling that makes transfers as easy as sending WhatsApp, just raised $15.5 million in funding. Forget about downloading apps or navigating complex interfaces; this startup uses the WhatsApp chatbot.
- A dictionary with a unicorn horn: More funding is flowing into AI-focused startups. DeepL, which makes automated text translation and typing tools that compete with the likes of Google Translate and Grammarly, has raised another $300 million. It is now worth $2 billion.
More must-see TechCrunch stories…
Are you dreaming of IPO bonuses in 2024? Well, wake up and smell the increased interest rates! Despite Reddit, Astera Labs, Ibotta, and Rubrik all managing to push through the IPO door earlier this year, it looks like most startups are still stuck at home in their PJs. Plaid’s CEO said they’re staying private for now, and Figma and Stripe are busy pitching like they’re holding a bake sale instead of preparing for an IPO. Databricks raised $500 million, but isn’t even feeling the public market vibes; maybe next year they will feel more extroverted. And Canva? It may take so long for them to be published that until then we will be drafting newsletters directly from our brain implants. Stay tuned as TechCrunch continues to track which startups take the stock market path or remain hidden behind the curtains of venture capital!
Other major news:
- What is happening in the land of messengers: Meredith Whittaker, president of Signal, has made it this far with the tech industry’s “frat boys” and their “dorm boys.” At VivaTech in Paris, she didn’t hold back her concerns about everything from US companies’ AI power grab to the EU’s misguided attempts at regulation.
- AI in your ears: Welcome to the battle of generative AI gadgets now featuring Iyo’s GenAI Headphones! Humane and Rabbit R1 fell harder than a fish out of water, but Iyo thinks he can succeed where they stumbled. Unlike the outlandish lapel badges and overpriced handhelds of its predecessors, which critics argued should be just apps, Iyo is betting on an already popular form factor: Bluetooth headphones.
- Dude, where’s my wallet?: Is it a bird? is it a plane No, it’s Ledger Stax, finally descending from the crypto heavens 18 months after its spectacular announcement. This new high-end hardware wallet features an E Ink display designed by iPod guru Tony Fadell – yes, they’re bringing back the e-reader vibes for your crypto needs.
- Wait, Foursquare had to lay off 105 employees?: Foursquare just gave 105 employees the boot in an effort to “streamline” operations and put itself on a firmer financial footing. CEO Gary Little, who might as well have hit send and then vanished into thin air, didn’t shed much light on what’s to come.
- Let me sum it up for you: Looks like Apple is back to its old tricks and ready to “Sherlock” another innovative app feature. This time, it’s The Browser Company’s Arc that’s in the spotlight with its elegant AI summarization tools like “browse for me” and “summary collection.” Apple’s “Smart Summaries” in iOS 18 sound suspiciously similar, potentially turning Safari into a one-stop shop for AI-powered summaries of everything from web pages to missed notifications.