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In a twist that will shock absolutely no one and pyromaniacs who love to see money burn, Elon Musk’s latest venture, xAI, has secured a fortuitous $6 billion in funding. Valor, a16z and Sequoia stack the money on the xAI-shaped roulette table, while Musk spins the wheel.
Ivan wonders if Musk’s latest attempt to corner the market will finally give us an AI so advanced that our puny human brains will be even more obsolete than they already are thanks to his other wild projects.
I think it’s completely insane. These investors seem flush with cash and fresh with skepticism. I can only imagine the pitch: “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.
What makes this particularly crazy is that the $6 billion bonanza is just the latest chapter in Musk’s epic saga of “how to get the world to fund my science fiction fantasies.” The more stories that come out about Musk, the more you would think people would hesitate before investing. But apparently this is why I’m a newsletter writer and podcast host (we also talked about this today on Equity) and not a VC. I’d think twice before betting on the guy who gave us self-driving cars that fail to spot fire trucks and spacecraft that sometimes land but sometimes explode in a fiery display.
Today is your last day to save up to $800 on your Disrupt pass. Book your Early Bird pass before 11:59 PM PT tonight!
Most interesting startup stories of the week
Welcome to the wild, wild west of fintech! Remember that bright shiny star called Synapse? Yes, it was a supernova. The banking-as-a-service startup was a segment that seemed to be heading into the stratosphere, and Synapse itself was backed by a16z – but that didn’t help matters. The company collapsed faster than my good intentions. Now that ten million consumers have been abandoned and many fintechs are scrambling to pick up the pieces, it is an unmitigated catastrophe. It’s like ‘Game of Thrones’, but with more spreadsheets and fewer dragons. If you thought your week was tough, spare a thought for those who are stuck trying to access their money or save their jobs thanks to this mess. Fasten your seat belt: 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 in trouble. With unpaid bills, an AWOL COO, angry customers demanding refunds for delayed e-bikes from China, and two former shareholders vying for control of Onyx’s remaining assets… this is one hell of a ride.
- Job losses in the automotive sector country: Lucid Motors is once again cutting the fat, laying off 400 employees (6% of its workforce) just in time for the launch of its first SUV. Apparently they need to ‘optimize resources’. CEO Peter Rawlinson believes lower workforces will help deliver the world’s best SUV… Meanwhile, Fisker has laid off hundreds of people in a desperate bid to survive. Employees got the hint 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.
- Raise money to save money: Relay just closed a $32.2 million Series B funding round to help small businesses do more than just nervously refresh their bank balances. Their secret sauce? Focusing on the mom-and-pop shops instead of tech startups – take that, Silicon Valley!
Most interesting fundraising this week
Firefly, the cloud asset management startup focused on simplifying your digital chaos with “infrastructure as code,” has secured $23 million in funding. This comes after an unimaginable tragedy: co-founder CTO Joseph “Sefi” Genis was murdered by Hamas at a music festival. Despite this, the Firefly team chose resilience over retreat and continued to quadruple revenue through 2023. So now Firefly untangles the complexity of the cloud and navigates the turmoil of the real world like absolute champions.
- That is amazingGoogle just poured $350 million into Flipkart, making it the latest VIP to back the Indian e-commerce powerhouse, which now has a valuation of $36 billion.
- You get a dinero! You get a dinero!: 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 secured $15.5 million in funding. Forget downloading apps or navigating complex interfaces; this startup uses WhatsApp’s chatbot.
- A dictionary with a unicorn horn: More money is being poured into startups that focus on AI. DeepL, which builds automated text translation and writing tools that compete with Google Translate and Grammarly, has raised another $300 million. It is now valued at $2 billion.
Other can’t-miss TechCrunch stories…
Dreaming of tech IPO bonanzas in 2024? Wake up and smell the high interest rates! Despite Reddit, Astera Labs, Ibotta and Rubrik managing to bust through the IPO door earlier this year, it seems like most startups are still stuck at home in their pajamas. Plaid’s CEO stated that they are staying private for now, and Figma and Stripe are fielding tender offers as if they were hosting a bake sale instead of preparing for an IPO. Databricks has raised $500 million, but isn’t feeling the public market vibe either; maybe next year they’ll feel outgoing. And Canva? It may take so long for them to become public that by then we will be designing newsletters directly from our brain implants. Stay tuned as TechCrunch continues to track which startups will brave the stock market runway or remain hidden behind their venture capital curtains!
More top stories:
- What’s happening in messenger land: Meredith Whittaker, the president of Signal, has had it so far with the tech industry’s “frat boys” and their “dorm room high jinks.” At VivaTech in Paris, she addressed her concerns about everything from US companies’ AI power grabs to the EU’s misguided attempts at regulation.
- AI in your ears: Welcome to the battle of generative AI gadgets, now with Iyo’s GenAI earbuds! Humane and Rabbit R1 flopped harder than a fish out of water, but Iyo thinks they can succeed where they stumbled. Unlike the bizarre lapel pins and expensive handhelds of its predecessors that critics said should have just been apps, Iyo is betting on an already beloved form factor: Bluetooth earbuds.
- Dude, where’s my wallet?: Is it a bird? Is it an airplane? No, it’s the Ledger Stax, which is finally descending from crypto heaven 18 months after the big 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 vibe for your crypto needs.
- Wait, Foursquare had to lay off 105 employees?: Foursquare just gave a boost to 105 employees in an effort to “streamline” operations and put itself on firmer financial footing. CEO Gary Little, who might as well have pressed send and disappeared into thin air, didn’t shed much light on what would come next.
- Let me summarize that for you: It looks like Apple is back to its old tricks, ready to ‘sherlock’ another innovative app feature. This time it’s The Browser Company’s Arc that’s in the spotlight with its snazzy AI summary tools like “browse for me” and “pinch to summarize.” Apple’s rumored “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.