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Equity
OpenAI's Jalapeño chip is Big Tech's spiciest move away from Nvidia yet
00:36:25
This week, Equity digs into what the custom chip trend means for the industry, AI 'loops,' and a few deals of the week worth watching, including one humanoid robotics company getting ready to test the public markets.
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- [00:00]
A
This week we're talking all about chips, including a spicy one called jalapeno that OpenAI is building with Broadcom in an effort to reduce costs. Then we're going to talk about AI agents getting loopy and one robotics company that is about to test the public markets. Let's go. Hello and welcome Back to Equity, TechCrunch's flagship podcast about the business of startups. Today is Friday, June 26th. I'm Kirsten Korosek, transportation editor here at TechCrunch and joined as always, by our weekend editor, Anthony Ha and Sean o', Cain, who has a different title these days.
- [00:45]
B
Yeah, I'm the czar of TechCrunch now. No, I'm just kidding. No, yeah, but my title has changed to Senior Reporter Special Projects. I won't bore everybody with the details here, but I would love to. To do more collaboration with folks across the newsroom. Big projects, stuff with big impact. So, you know, hit us up with some good tips, send us some stuff on signal. I love documents. What are we not writing about that we should be writing about all that stuff?
- [01:13]
A
Yeah, absolutely. And I should preface that with this does not mean sending us embargoed information about something that you've also sent to other people. We're looking for good stuff. So.
- [01:26]
C
So.
- [01:26]
A
And that way we can talk more about it on the show.
- [01:28]
C
Yeah, that's right. I mean, first of all, congratulations, Sean. We were talking before recording about Sean's new title, but I didn't actually know what it was you were watching. If you were. If you're watching this on video, you saw my live response, but no, that's awesome. I'm very excited to see what Sean comes up with, and hopefully we'll be working together on some fun things. But let's talk about our first big theme for the week, which is chips. And there's, you know, as with a lot of our themes, there's a bunch of. Bunch of related headlines, but I think really kind of what's kicking it off in this discussion and making us talk about it now. OpenAI and the fact that they unveiled their own custom chip, which they're calling Jalapeno. An obvious chip joke there, but who wants to explain what jalapeno is?
- [02:09]
A
So I will preface this by saying I, you know, certainly covering tech, we do write about chips. We write about chips a lot. But am I the primo expert on all things chips? No. However, chips are incredibly important in training models and also on the inference side, and this is a deal that actually was announced last year between OpenAI and Broadcom, but now we're starting to get new details about it. And yes, it is called Jalapeno and its focus is on inference. And I think that the important thing here, and I would like either of you to weigh in on as to whether this, this, if my take is correct, it seems like this is OpenAI's way of maybe not distancing itself from Nvidia because it's so wrapped up with, you know, Nvidia GPUs, but certainly maybe like providing another option for them. Am I reading that correctly?
- [03:04]
B
I think that's right. You know, broadly speaking, I feel like we are in a moment where the proximity that a lot of these companies had to each other last year, to put it kindly, is maybe less than it was. And it makes me wonder, you know, they are all certainly still sort of helping each other in a lot of different ways, many of which involve just sort of passing around the same couple billion dollars. And so I don't want to make it seem like there's some big breakup that's happened, but there is a lot of hedging going on for the companies that are willing to spend the resources on it. Right. I mean, we know, you know, Google has long been sort of working on its own sort of designs for, you know, trying to get custom hardware to help its AI development. We've seen SpaceX, which I'm sure we'll talk about later, talk about working with Tesla or saying it's going to work with Tesla to develop this quote, unquote Terafab, you know, in order to sort of make its own. And I think the benefits are not just, you know, hedging away from a single supplier risk, but it's also about, you know, being able to customize the thing for your needs. You know, when I think about what they're doing here, I think a lot about Apple, you know, how many years ago, really just deciding to break with intel after so many years and designing its own in house silicon. And we've seen so many benefits, you know, associated with that in the years since. I mean, they took what was at the time maybe arguably like sort of many middling products, especially in the computer space, like laptop and sort of desktop, and turned them into things that were like incredibly desirable because how good they were all because they were able to get so much out of that custom silicon. I think the same idea is sort of at play here too, with that added sweetener of, you know, a little bit more distributed risk.
- [04:59]
C
You know, I was also thinking about, you know, Apple because right before we started recording I was getting some of those notifications about Apple stopping supporting some of the, you know, intel based programs and applications on my computer and being like, so we're still in the midst of that transformation. I think everything, you know, I totally agree that it is partly about just creating that distance and again that sort of this very complicated landscape where everybody works with everybody else but also everybody competes with everybody else. The other thing that OpenAI talked about I think pretty openly is the fact that part of the goal here is lowering costs as well. And the idea that not necessarily these chips will do everything, but particularly on certain kinds of inference, related tasks, certain kinds of coding, related AI, this could potentially lower the costs. Again, I'm also not a chip expert and don't know exactly how it will do that, but it seems like that's also part that underlying all of this is also an ongoing concern about costs and a growing awareness that the coding is going to be sort of one of the big money makers for AI companies.
- [06:06]
A
The lowering cost piece is really important because it isn't just dealing with there's a lot of pieces of chips, another chip joke, I can't help it, that are related to the pricing, including, I want to mention memory chips. So this is unrelated to what Jalapeno is. However, that demand right now is skyrocketing. There is very little supply, There are very few companies that make that. Micron as a US based company is one of those greatly benefiting by the way from this crunch for memory chip and it's driving up prices. So I think anything that companies like OpenAI can do to lower prices at any point of the process in the world, the vast world of chips, I think it's going to be super important. I'm curious to see how they're handling the memory piece because I haven't tracked that as much. But what we are seeing is that the memory chip crunch basically demand outpacing supply is absolutely starting to affect consumers on like a hardware side. For instance, with Apple, Apple just raised its prices because of unavoidable, according to Tim Cook, demand problems and they just haven't been able to absorb those costs as much. And so now it's being passed on to consumers. So I'm curious on the AI lab side of things if we're going to start seeing price increases for consumers who are using ChatGPT.
- [07:34]
C
I mean, I feel like we almost certainly will.
- [07:36]
B
Yeah. I mean the question when we talk about them lowering costs, like clearly There would be value in being able to squeeze out, you know, produce chips that are able to do the things that they want to do and do them cheaper, you know, if that is what they get to. The question is always sort of like, is that something that immediately get, Is that savings that get passed off to consumers? Is that something that, you know, helps the company get closer to profitability? We're talking about a company that's potentially going public later this year, has confidentially filed for an ipo, has, you know, is going to have a lot of shareholders that it's going to want to please. And I, you know, I personally think it's going to have a harder time on the markets, maybe a more volatile time in some ways than we've seen SpaceX have so far. And that's saying something because SpaceX's stock price has been pretty volatile since it went public almost two weeks ago. So, yeah, I mean, that's what I think about the other thing too is they mentioned really lightly in announcing this project or this first, this first version of the chip, the things about sort of lowering costs and making things better. I don't feel like we've gotten a great picture of exactly how much progress they made there. And with chip development, if you're not making that kind of progress with the next version or something custom, you've done something really wrong. So I want to see some numbers, I want to see more information and if we don't get that from them over the next few months, as they actually get ready to start potentially producing this next year, we'll see it in the S1 filing and any other subsequent filings that come out as they go public.
- [09:12]
A
So many S1 filings to keep track of. I should mention that speaking of progress, there is a company that is still absolutely dominating and continuing to make progress, either through acquiring companies, acqui. Hiring companies, or doing their own research and development. And I'm talking about Nvidia. If you remember, a while back, they did this not quote unquote, not Aqua Hire deal of Grok. So they basically pulled leadership out, but Grok kind of still exists and that company just raised $650 million. And I was wondering if that caught your attention. It sort of surprised me that they're not only just still existing, but raising money quite a bit actually, and seem to be doing pretty well.
- [09:55]
B
Yeah, I was going to say not just not not only still exists in some form is maybe the company that is, is now best off of all of these companies that got sort of like, you Know, Aqua hired or hollowed out or whatever over the last couple of years.
- [10:10]
C
Yeah, I think there was this feeling and this was, you know, a bigger trend kind of, I guess in like 23, 24, this kind of reverse Aqua hire trend or there were, you know, all kinds of different like names people came up for it. But, but basically the idea that you would essentially take a lot of the, the most prominent leaders, I think in, in the case of Grok and again this is Grok with a Q that I think the CEO, the president, I think some other executives left. And then there's this sort licensing deal that Nvidia or the sort of acquirer, not acquirer, will sign with the startup. But it always feels a little bit like the startup is being left for dead and that you're sort of like what, you know, what's going to happen now? How is there actually like a, you know, a seriously good outcome possible here when you know, the biggest names in the company are gone? And it actually seems like. Or maybe that was certainly my assumption. Maybe not everyone thought that. Although I think in some cases you can hear read about the panic at some of these companies after this has happened. But in the case of Grok and then I think in our store we also mention, you know, scale AI as companies that, you know, not necessarily that they're completely, at least in the case of scale like back to where they were or out of the woods, but that there has been life after the reverse acquisition and growth and a trajectory where they can continue to succeed.
- [11:30]
A
And to the point of how they've done this though, and back to my point earlier of like suggesting Nvidia still is very much dominant here is that I think in part of their success is because they have pivoted a bit and now they're shifting their focus towards operating an AI cloud platform rather than competing primarily as a chip company. So that is one way to, you know, keep, not only keep the lights on but, you know, manage to get a $650 million raise.
- [11:59]
B
Listen, Neo clouds are the new oil and everybody who wants to make money is pivoting to a NEO cloud. I'm proud to announce that TechCrunch is now neocloud give us all our money. But no, I mean there's like, this is like the thing you do like. It seems like there are so many players that are COMPUTE constrained. So anybody who has a shot at being able to lease out that compute is taking it. We saw, you know, whether that's, whether that's Grok, a company that was like semi hollowed out by Nvidia or Allbirds which went into bankruptcy and emerged from it as a new Neo cloud provider instead of selling shoes, which Tim Fernholz did an interview with the new CEO of that new effort that I would definitely recommend people go read is that is interesting or whether you're SpaceX, you know where your idea was I'm going to build an AI platform that's going to have an addressable market the size of US gdp but before we get there we'll just rent out our compute. And we saw this continues to happen with Space X where you know, it's not as big as the deals that they've struck with Google or Anthropic, but they just signed another deal, its first post IPO deal to rent out compute to another smaller player. And so you know they're continuing down that road. They're certainly looking to build out that revenue. And you know, I can see this being a business for Grok in the near term. The question with all of these is how durable is it?
- [13:18]
C
Yeah, I mean I think if we're talking about SpaceX and their AI business and data center business. We also talked about these comments that Masayoshi San, the CEO of SoftBank made recently where he basically said I didn't basically said, he did say what is the point of data centers in space? Which I think is a question we've asked on this show and I think, I mean it speaks to again how that there is just this sort of sense in the industry of being sort of really, really compute constrained that they need to build as many data centers as possible, that there's all kinds of reasons why that is proving to be challenging here on Earth. So maybe space is the answer. But you know, I think Son like makes some pretty fair points about just like well all this stuff we're talking about even if it all works and the costs of that are going to be very, very serious to make it work. This is not happening for years and years and years. So this is not a solution to any immediate problem as far as you know, the current need for data centers goes.
- [14:24]
A
And I just want to point out that SoftBank has a long history of making wild bets. And so I think it says something when San comes up and said and it really asks I think the question that a lot of people have asked. I mean there's a lot of VCs and founders have been swept up into the idea of orbital data centers and it seems like suddenly everyone's on board when just a Couple of years ago. I think if someone had mentioned that it would, it'd kind of get slapped down a little bit. So I do think it's an important part of the process that someone who has a pretty high profile is asking that question. But it is very ironic to me that he is the one asking it because if you look at his pitch deck, you know, he's. They, they've thrown a lot of money at some pretty, you know, some bold ideas we work.
- [15:17]
B
Yeah, I mean, listen, I, we're going to be saying this for a lot over the next couple years. The idea of putting these things in space is going to be an interesting engineering challenge and certainly an interesting economic challenge. The reason, you know, that, like, Anthony, what you said is definitely right to a certain extent of, like, Elon Musk is a person who hates red tape and you know, who's gonna. There are no NIMBYs in space. And so of course he's gonna try and do that. To me, it comes down to the business. As it stands now for SpaceX, especially its launch business, is just overwhelmingly reliant on Starlink and having this thing to like. The reason that they are so much of the, you know, 80 or 90% of like the sort of launch market globally is not just because they've done all these things that are better than pretty much every other launch provider around the globe. It's also because they have Starlink that is driving up that number. You know, normally they would remove Starlink from the equation. They would be closer to like, I don't know, maybe 20 or 30% of the launch market or 40%, but it certainly wouldn't be 90. And you talk about making a constellation of satellites, satellites that need to be replaced every few years as well to make up a orbital data center, quote, unquote. You're just guaranteeing that much more business for your launch business. And like, I just, I can't stop myself from coming back to that point.
- [16:45]
A
I want to really quickly say that their other big business is renting out their compute, by the way. So back to the chip conversation. We've come full circle.
- [16:54]
C
Yeah, I mean, I think that one of the other themes that may kind of run through some of the conversation in this episode is just this idea of like talking your own book. And, you know, this is not a new phenomenon. Right. Like basically executives at tech companies or any other company like that, what they're predicting for the future is ultimately the future that is going to be advantageous to their business. But I think it's it's something that's just always worth remembering when we're having these conversations about big AI companies. Because it is this moment of incredible uncertainty. And you know, we're all just sort of, yeah, like wondering what does the job market look like in the future? Like what effect is this going to have on the environment? Like what are the skills I need to learn? And you know, all these AI CEOs have thoughts on that, or AI investors, they all have thoughts on that. And then it's not that they're wrong or that they are being deliberately misleading, but in each case, you know, there's an asterisk to these predictions that I mean, obviously, yes, you know, in Musk's case, he's talking about something that would be very good for SpaceX's business. In the SoftBank case also, they are very, very heavily invested in data center projects here on Earth. Sam Altman is kind of the other notable figure who's kind of rolled his eyes a little bit at the orbital data center idea. And you know, again, he and Elon Musk obviously have a long and complicated history together. And so all. Which is to say of course that there's just, there's no objective impartial observers here. It's all these people with like baggage and tremendous amounts of money at stake.
- [18:19]
B
Well, speaking of people talking their own book, we should move on to the next thing that we wanted to talk
- [18:24]
A
about, which is great transition.
- [18:26]
B
Yeah, Loops. We've got our new term du jour to talk about AI. And I know, you know, Russell Brandham, our AI editor wrote about this this week and you know, I'm curious to hear your guys thoughts on this. The reason I say talk in your own book, this, this really comes from Claude Code creator Boris Journey speaking at a conference that Metta did. And you know, we could talk about his comments, but they are certainly you could. One way you can take them is him talking up sort of anthropic zone business. If you want to be cynical like that. I always do.
- [18:59]
A
Yeah, well, I mean we don't have to be cynical, we can just be, you know. Yeah, I think he's talking his own book, but it's relevant. And we do have a new term now. It's really hard to keep pace with all of them and what's in and what's out today. And I think it's worth noting because I had to educate myself on this, is that basically loops are AI agents that are now running endlessly in the background, like on a loop, and prompting other agents and, you know, round and round it goes. And that has all sorts of implications, right? To me, this is interesting because it seems like now loops are the hot new thing to talk about. Not that long ago, like two months ago, token maxing was, you know, the hottest thing, and now it seems folks are focused on this and there are some overlapping and interrelated pieces here. But yeah, I mean, basically they're pushing that, that loops are just as important and a very big step beyond source code to agents. So is this just something that people are focused on right now? And by the end of the summer, you know, loops will be not relevant anymore? I tend to think that they might be because it is an implication of, like AI agents always, always working if
- [20:14]
C
I'm going to make a prediction is that I don't think that they're going to be irrelevant. But I think that the amount of sort of excitement that they can and sort of the leap forward that this represents might end up being a little bit deflating and disappointing. I mean, part of that is because I think back to the kind of hype around agents and we should say that, you know, the cloud, the creator of cloud code, when he was talking about this at Meta's conference, specifically, explicitly, like, kind of framed this as. Is this hype? No, it's not hype. It's the real thing. And I mean, obviously on something you're like, well, know a lot more than I would about whether that's the case. But I think that, you know, I think back to that sort of the hype around agents. And it's not that it turned out to be nothing, of course not like they've, from everything I've understand, like, particularly in programming, they've turned out to be hugely significant. But I also think about how it was framed as like this kind of breathless. Everything is agents now. You don't understand. This is the thing that is going to make AI the sort of truly transformative technology that we've been promised. And I don't think that's happened at least, certainly not universally yet. And I feel like loops feels like the idea of talking about loops feels like kind of the next iteration of that conversation. Plus there's a bunch of reasons why, which we can get to about also maybe reasons to be a little bit skeptical about how widely this can be used.
- [21:35]
B
I think that's a great point because to me, when I hear him talk about this, you know, again, I don't want to keep harping on this, but, like, this makes sense. Anthropic is really focused at enterprise users, in large part at people who are doing programming and using it, you know, specifically for those things. And it seems very good at those tasks. And that is just a world where, I mean, on the one hand, operating and artificial intelligence software in this way makes a lot of sense, especially in the way that he describes it. On the other hand, it still makes me wonder, like, as you play this out, the more agency you're giving over to a system like this, how are you able to make sure that you're on top of things enough, not just in the moment, but like, in general, as far as, like, your knowledge goes to know whether it's doing the right things or not? I think that's a conversation for another day. But I think about all the times that I've tried to throw what I see as complex things that could get me closer to needing a loop to run on something. And it never, in our world, which I think admittedly is probably one of the least inclined people to heavily adopt the use of these tools, it just does not match up the same way. Like, it's just not made in the same way, I think as, you know, or as ready for this way of using this technology. And so, you know, maybe I feel like that's similar for like, most sort of general customers too. Of like, if you're a regular consumer who has the ability to like, you know, in a couple months or whatever it might be to, you know, task an agent or a set of agents to continuously run on a problem. Is there anything complex enough in your life that actually needs that? I don't really see that even the most complex things that exist right now of properly booking a vacation and one of those examples that we always get, those things tend to get resolved actually pretty quickly if you're using the latest from Google, Gemini or even Anthropic or chatgpt, whatever.
- [23:52]
A
So if I'm hearing you correctly, you really see this as like, very limited to specifically enterprise use. You know, I don't think you, me or, you know, the guy down the street is going to be, you know, having a series of AI agents constantly working in the background. But within enterprise, is there a specific group of people that either you think will be really using it and figuring out the best. I think the quality of looping is something that we haven't really discussed. It's sort of, we've alluded to it a little bit. Is that what you're thinking or is it going to be like, broadly applied to, you know, all of enterprise?
- [24:29]
B
I mean, I think the, the Galaxy Brain take here is like kind of what we've been hearing from a lot of folks in Silicon Valley over the last like two years, which is like, can you replace the entire back office of a company and maybe even some of the front office components? And the ability to do that necessitates stuff like this. There have just been many attempts so far at trying to do a sort of single person or no person startup and they kind of really haven't happened yet because even the best agentic technology now breaks the longer it runs and is just brittle in a lot of different ways. And how and when it checks back in with you for evaluation of what's been done is. And then add in the complexity of like, not every provider is giving you everything in one place, like voice, you know, text, like all of the different actual sort of components of what you would need to interact with people as a business. But I think like, there's that, like, if you, if you want to think about things that are outside of programming and even sort of like workplace uses of loops like that seems like the, the place this maybe heads, but we still have never really seen it robust enough to actually do that.
- [25:45]
C
And I think part of the context of that, Kirsten, you alluded to earlier, is also how the conversation about AI usage tokens has really evolved so quickly in the last few months that everyone was excited about token maxing at the beginning of this year and now we're way over token maxing. At least a lot of companies I think are where they're like, oh crap, this has gone really out of control. Our costs are out of control now. We need to really, really keep a closer eye on this and get these costs under control. And so obviously again, when we talk about talking, your own book is like that, presumably like agentic AI, presumably using more tokens than just sort of, you know, coding in a chat bot and then loops again, it sort of increases that dramatically. But you know, and I suspect, yeah, that most companies are going to be sort of experimenting with that, probably have already done that to some extent, but they're not going to be able to sort of just let it run wild because again, they need to keep an eye on the, on the bottom line. And I think we're sort of approaching this point where more and more companies are asking like, okay, well what is the value that we're actually getting out of this? Like, yes, like, you know, everyone has told us that this is the future, but like, has this actually increased our productivity? How much like Is this actually saving costs, or is it just actually just another kind of giant cost center that is supposed to save us money at some indefinite point in the future?
- [27:08]
B
I'm going to make a really crass analogy, and I don't want to say that because I want everybody to understand how crass this is. But it just. It just makes me think of, like, you know, the early seasons of the Wire, where you're seeing the. The sort of drug dealers in question who are hyping up new product that is just the same product with a different colored cap on it. You know, like, I don't think that's 100% what's happening here, and I'm not likening this product to drugs, but it's like, you know, there's an element here of that of like, oh, boy, people are really pulling back. The CTO of Uber is saying, like, yikes, all this money we're spending on tokens. Here's just like, kind of a new way, you know, and it's savvy marketing to a large extent of like, we need to reposition this. You know, eventually it has to be more than marketing, and I guess we'll see where that goes.
- [27:56]
A
I love the Wire reference, one of my favorite shows. So that's a nice deep cut. There is some hard tech that I do want to talk about. And speaking of things that come in and out of fashion, talking about SPACs, and they were very much the financial instrument of the moment in 2021. They sort of faded away, but now we're kind of seeing it again. And the latest is Agility Robotics. And I don't know if either of you paid attention to this at all. And Agility Robotics is been around for, like, a pretty long time. I mean, they. They have been around since, I want to say, 2015. They spun out of Oregon State University, and they've been working on this humanoid robot called Digit. Actually, I think Digit even came to TechCrunch and they're now actually have customers and they're seeking more capital and looking to, you know, go public. And here they are with the SPAC. It's valued at about 2.5 billion.
- [28:57]
C
It'd be funny if it was, in
- [28:58]
A
case you weren't sure.
- [29:00]
C
Yeah, yeah.
- [29:01]
A
Not Euros.
- [29:03]
C
I mean, I'm very interested in hearing more about the company itself. I think definitely what caught my eye was the SPAC component, which I think we've talked a little bit about in some of our other recent episodes. This sense that SPACs are coming back. And I think for Me, there is, I mean, again, no surprise, just sort of a feeling of deja vu of I think when SPACs were kind of becoming popular five years ago, there was this sense of, for me, like, oh, this, I mean it seems like kind of like this weird complicated procedure to kind of essentially bypass all the safeguards and kind of regulatory oversight that you have to deal with when you go into the public markets. But then, oh no, there's a lot of really smart people in the VC world explaining how this is kind of the future and then didn't exactly turn out to be the future. And I think, you know, none of, I can't think of, and maybe, maybe I'm wrong, but I can't think of any sort of companies that really went that route and turned out to be kind of a long term sustainable success. And, and so the fact that it's coming around again, there's a, I'm wondering, okay, well maybe this time they've sort of understood, figured out something from the last time about why it's going to work this time or maybe it just is like, well, they really want the liquidity and this is the way they can get it.
- [30:18]
B
In my view, this is one of maybe the more mature companies that has merged with us back. I mean so many of the ones that we saw go public four or five years ago that now no longer exist or you know, are barely alive in some form, didn't even have revenue, let alone, you know, any ion profit. And I, you know, the only thing I'll say is like this sort of common narrative around SPACs is like especially a couple years ago was like it was free money or people would call it kind of a shortcut to markets. But I think what a lot of people overlooked is like the real trade offs were in like the kind of real wonky stuff behind the scenes of like not having the right kind of staff to make sure that you weren't basically lying on your SEC filings to investors or, or being run by people who are too egomaniacal to care about that stuff. And, and sort of got overwhelmed by the freedom with which they could promise things in a SPAC merger versus the traditional IPO process. And that wound up biting them in the end as well. And so, you know, to me this seems like a more reasonable company than a lot of the ones that we've seen before. But you know, time will tell.
- [31:29]
A
Yeah, I was going to say like agility has made steady progress, is moving out of that pilot phase that many of the companies that had, you know, previously been SPACs, never got out of. They have nine customer sites. They have some pretty big companies we just recently wrote about. They are working with Toyota and the manufacturing site in Canada. So this is a real company with a real product and it does need capital. I would also say that they raised about 300 million or no, I'm sorry, they secured more than 300 million in, in multi year orders. So now it's about can they take the capital that they get from this and leverage it and really meet those orders? Because it doesn't matter if you get the orders, you have to actually fulfill the orders to make money. So I think that's gonna be, you know, difficult for them. Um, and this could be a way for them to do that. The last thing I'll leave you with is, is that as you know, when you raise money in a spac, it really depends on the financial terms of how long the investors stick with this and if they pull out money immediately, it can really be very damaging for that company. So we don't really know what those terms are and hopefully they have put in some protections.
- [32:50]
C
Yeah, well, I guess we will see how that turns out. We have one more deal to talk about briefly. This is actually something that's kind of relevant to some of my other interests as well, which is the Indie Movie Studio A24 announced that it is taking an investment from Google DeepMind partly to develop new AI tools for filmmakers, which at least for me I found both surprising and not, not surprising because a 24 has in the last few years taken on some private equity money. I think they're clearly, they're sort of in the, in the movie world, like kind of the cool like indie studio. Like they've had hits, but they're not like Marvel or Star wars sized hits. But because they've taken on all this extra money, you can tell that they need to kind of scale up. You know, Adobe Scott Belsky joined them as a partner last year and so you kind of got the sense that something like this was in the works at the same time. I was certainly very surprised because I think of a 24 as kind of, you know, just think of a cool studio, one that's attuned to the kind of filmmaking community. And I feel like making such a big deal around AI feels very out of tune with, I would imagine, a lot of the filmmakers they work with.
- [33:59]
A
So here's my question for you, Anthony, because you follow this area a lot more closely than I do. Is this Hollywood, you know, cracking the door open or is it busted wide open at this point?
- [34:12]
C
I think that it is cracking. I think it's closer to cracking the door open. I mean, I think it depends on which areas you're talking about. Right? Like, certainly if you go on a place like YouTube or on social media, the amount of AI slot that you're going to see is, is very significant. And I think in terms of movies released in theaters, high profile releases, I think that for the most part, unions and kind of the crews and creative teams have generally tried to keep AI out. Of course, it also depends on what do you mean by AI because obviously there's a tremendous amount of CGI visual effects and things like that. But I think that all of the studios want to experiment with this, but also they're getting a tremendous amount of pushback.
- [34:55]
B
Yeah, I mean, this is a 24 selling high, right? You can only be cool for so long and if you want to stick around for a very long time, you have to abandon that at some point. It is interesting that they're getting pushback because it maybe signals that there is a problem these days among younger people with selling out, which has not been the case over the last 15 or 20 years. I mean, Jimmy World just did a concert in an Arby's restaurant or something, right? Like, so it's just, you know, the concept of selling out is not anything like it was when I think any of us were kids. And so maybe there is a new era of backlash against it. But I think you're right to not necessarily be surprised by this. This is, you know, if a 24 really wants to be around for much longer without just sort of always walking that fine line of like identifying the coolest thing to make. This is an option on the table and they took it.
- [35:48]
C
That's right. The 90s are back, baby. That means you can be criticized for selling out once again. But let us know if you think Equity has sold out. We are at Equity Pod on Threads and X. Of course, Equity will be back next week and thank you so much for listening.
- [36:07]
D
Equity is hosted by TechCrunch senior reporters and produced by Teresa Loconsolo with editing by cal. Subscribe on YouTube or wherever you get your your podcasts and find out what's next@techcrunch.com events. Thanks so much for listening and we'll talk to you next time.