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In a twist that shocks no one and excites pyromaniacs who love to watch money burn, Elon Musk’s newest venture, xAI, has landed a $6 billion seed round of funding. Valor, a16z, and Sequoia pile the money on the xAI-shaped roulette table, with Musk spinning the wheel.
Ivan ponders whether Musk’s latest stab at the market will finally bring us an artificial intelligence so advanced that our puny human brains will be even more outmoded than they already are thanks to his other wild projects.
I think it’s totally awful. These investors appear to be flush with cash and fresh from skepticism. I can only imagine the pitch: “Photograph an AI so powerful it makes HAL 9000 look like a Roomba.” And, naturally, they threw in money. Because, well… Honestly, I can’t see the logic.
What makes this especially crazy is that the $6 billion bonanza is just the latest chapter in Musk’s epic saga of “how to get people to fund my sci-fi fantasies.” The more stories come out about Musk, the more you’d think people would start to hesitate before investing. But apparently, that’s why I’m a newsletter writer and podcast host (we talked about this at Equity today too) and not a VC. I’d think twice before betting on the guy who gave us self-driving cars that don’t spot fire engines and spaceships that sometimes land but sometimes explode in a fiery spectacle.
Today is your last day to save up to $800 on your Disrupt Pass. Reserve your early bird pass by 11:59 p.m. PT tonight!
The most interesting startup stories of the week
Welcome to the Wild Wild West of fintech! Remember that shining star called Synapse? Yes, it was a supernova. The banking-as-a-service startup was one segment that seemed headed for the stratosphere, and Synapse itself is backed by a16z — but that didn’t help matters. The company collapsed faster than my New Year’s resolutions. With 10 million consumers now left in the lurch and many fintechs scrambling to pick up the pieces, it’s a total disaster out there. It’s like “Game of Thrones,” but with more spreadsheets and fewer dragons. If you thought you had a rough week, spare a thought for those stuck trying to access their funds or save their jobs thanks to this chaos. Buckle up – it’s going to be a rough ride for fintech!
- Drama rides a motorcycle: James Hatiblou, the 37-year-old owner and CEO of Onyx Motorbikes, died just as his company circled the drain. 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… This is hell.
- Job cuts in the auto industry Earth: Lucid Motors is trimming the fat once again, 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 a lower headcount will help deliver the world’s best SUV… Meanwhile, Fisker has laid off hundreds in a desperate bid to survive. Workers got the hint when they were suddenly told to work from home – apparently so no one could hear the collective sighs of despair during the plenary.
- Collect cash to save cash: Relay just closed a $32.2 million Series B funding round to help small businesses do more than replenish their bank balances. Their secret sauce? Focusing on mom-and-pop shops rather than tech startups — take that, Silicon Valley!
The most interesting fundraisers this week
Firefly, the cloud asset management startup that aims to simplify your digital chaos with “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. Still, the Firefly team chose resilience over retreat and went on to quadruple their revenue in 2023. So basically, Firefly is now untangling the complexity of the cloud and navigating real-world turbulence like absolute champs.
- That’s wonderful: Google just dropped an occasional $350 million on Flipkart, making it the latest VIP to back the Indian e-commerce powerhouse, which is now valued at $36 billion.
- You get a dinero! You get a dinero!: Sending money back home just got a whole lot chattier! Félix Pago, the fintech darling that makes remittances as easy as sending a WhatsApp, just won $15.5 million in funding. Forget about downloading apps or navigating complex interfaces. this startup uses WhatsApp chatbot.
- A unicorn horn dictionary: More funding is pouring into AI-focused startups. DeepL, which makes automated translation and text writing tools that compete with Google Translate and Grammarly, raised an additional $300 million. It is now valued at $2 billion.
Other Unmissable TechCrunch Stories…
Dreaming of IPO technologies in 2024? So, wake up and smell the rising interest rates! Despite Reddit, Astera Labs, Ibotta, and Rubrik making it through the IPO door earlier this year, it seems 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 bidding like they’re holding a bake sale instead of preparing for an IPO. Databricks raised $500 million, but isn’t feeling the public market mood either. maybe next year they feel more outgoing. And Canva? It might take so long for them to go public that until then we’ll be drawing newsletters straight from our brain implants. Stay tuned as TechCrunch continues to track which startups will hit the IPO runway or remain hidden behind their venture capital curtains!
More top stories:
- What’s going on in messenger land: Meredith Whittaker, the president of Signal, has made it this far with the tech industry’s “frat boys” and their “drom room high jinks.” At VivaTech in Paris, she didn’t hold back in her concerns about everything from AI power grabs by US companies to the EU’s misguided attempts at regulation.
- AI in your ears: Welcome to the battle of AI-engineered gadgets, now featuring Iyo’s GenAI Headphones! Humane and Rabbit R1 fell harder than a fish out of water, but Iyo believes he can succeed where they stumbled. Unlike its predecessors’ weird lapel pins and overpriced handhelds that critics said should have just been apps, Iyo is betting on an already beloved 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 skies 18 months after its big announcement. This new high-tech hardware wallet features an E Ink display designed by iPod guru Tony Fadell — yes, they’re bringing back e-reader vibes for your crypto needs.
- Wait, Foursquare had 105 layoffs?: Foursquare just gave 105 employees the boot in an effort to “streamline” operations and get on a more stable 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 next.
- Let me summarize it for you: 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 smart AI summary tools like “browse for me” and “pinch to summary”. Apple’s rumored “smart summaries” in iOS 18 sound suspiciously similar, potentially turning Safari into a one-stop shop for AI summaries of everything from web pages to missed notifications.
