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- [00:02]
Red Bull Announcer
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- [00:27]
Kirsten Korosek
Hello and welcome Back to Equity, TechCrunch's podcast about the business of startups. Today is Friday, May 15th. I'm Kirsten Korosek, transportation editor here at TechCrunch, and I'm joined as always by our weekend editor, Anthony Ha and senior reporter Sean o'.
- [00:44]
Anthony Ha
Kane.
- [00:44]
Sean O'Kane
Well, I wanted to start with something that happened kind of at the end of last week and I'm curious if you caught this. This was a report that Anthropic put out about issues that they had last year with AI agents blackmailing developers in some testing. And they basically are now blaming that on how the Internet describes AI. And then that there's so many evil portrayals of AI. I'm curious, what did you guys make of that?
- [01:09]
Kirsten Korosek
I thought it was hilarious in like, you know, an ominous way. I don't know. I mean, I guess AI has always been kind of mysterious, right? So the way it's portrayed, because it has been sort of this sci fi throughout our history and now it's real. So, I mean, I don't know, I guess it's plausible.
- [01:27]
Anthony Ha
Listen, this is like that torment Nexus tweet, right? Like, you go and you make the torment nexus. You gotta expect that the torment nexus is gonna come back and bite you a little bit.
- [01:37]
Sean O'Kane
Yeah, I think in Silicon Valley there's always this sort of tension between the future as imagined in science fiction and the future that we're actually building. And then that relationship is particularly kind of tight with AI because AI is essentially, you know, especially things like generative AI. LLMs are essentially just like pattern matching and predictors, right? And so what they're doing is, is as I understand it, you know, simplified is, is they're basically just if, if they're trained on a lot of stories that say this is you behave in this evil way and want to take over the world and want to like, blackmail people to survive. That's essentially how they're going to behave. And that is, yeah, very, very funny. I guess Anthropic has said that in later models, they're not blackmailing anymore. And also one of the things they're Trying to do is to train these models both on sort of like the anthropic constitution so it sort of understands moral principles, and also on stories where AI behaves more benevolently.
- [02:35]
Anthony Ha
The newer models aren't doing it as much or they're lying in wait, letting us get a false sense of security. I mean, like, this is one of the problems with, you know, essentially building the plane as you're flying it. Right. Like, these are clearly we have, we have some real products from some of these companies. I'm not saying that they're only putting a research experiment out in the hands of millions of people, but there is an element of this being a very new technology that has shipped before. You know, the full consequences can be understood. And so, you know, here's one of the consequences that we're coming to find out more about.
- [03:08]
Kirsten Korosek
Yeah, I don't want to swear on the show, although in the past, historically it's been an. An open forum for that. But I think this is, you know, in the blank find out stage. We're in the find out stage of AI right now.
- [03:22]
Anthony Ha
Wonder what you could mean.
- [03:23]
Kirsten Korosek
We have a lot to talk about today on the show. We have three deals from Anduril Mind Robotics, which is a spinoff of Rivian, and then vapi. I believe that's how it's pronounced. Then we're going to dig into the Elon Musk mafia. And the latest updates from the OpenAI trial, which wraps up this week. Let's get on with Anduril. And they've raised what, even more money?
- [03:53]
Anthony Ha
Yeah, spins wheel. How many billions this time? Five, seemingly. You know, no one is leading the charge into we're a defense startup, more than Anduril has over the last decade. You know, they at least set out to do this and are not necessarily pivoting like so many other companies we're seeing now. But this was, yeah, $5 billion Series H getting up there almost halfway through those letters, and their valuation is now, you know, get ticking ever closer to 100 billion. And they're up to $61 billion now. We've talked a lot about defense startups or companies pivoting to defense lately. I'm curious what you guys think. You know, there's been some reporting out there about Anduril's execution maybe lagging behind its fundraising abilities. And also, you know, the company, I think, has been fairly open about, you know, an acquisition strategy to basically get a lot of the products that it has versus developing everything in house. So I'm curious where you guys See this going, I mean the, as far as I know, you know, Anduril has said it, its revenue is still around, you know, the low single digit billions and that maybe doubles next year. And certainly they have support from the administration. But you know, what do you think this means for a company like Anduril?
- [05:16]
Kirsten Korosek
I live in an area where there's a lot of what I would call legacy defense in Arizona. So Raytheon and other companies, a long history. And so I've, you know, made friends in these areas. And I can tell you that what Andrew's about to find out and probably already does is you can have the best idea and you can get that great defense contract. It moves slow, the government moves slow. And even if you want to move very fast and even in an administration that wants to move fast, they oftentimes can't make up their minds. These things take time and you really have to build out, you know, the logistical like human structure of getting compliance contracts. You know, it's not just developing tech and putting it out in the world. It's very different world defense tech. So I think a lot of startups right now, Andrew being the best example, but a lot of smaller startups right now are finding like, hey, there's this like open wallet. Great, let's go after that. What they're going to find out though is that actually the process is, is pretty convoluted and lengthy. It's a very different world than just putting something out in the private sector.
- [06:30]
Sean O'Kane
I think the other thing I wonder about is, you know, you were talking about execution and I think, I think in the past I've talked a little bit about sort of, you know, companies like Palantir and Anduril that are clearly like incredibly valuable and are seem to be doing well, at least by, by some metrics, but also they're very opaque to the general public. And so I mean, this is definitely a case where, you know, the numbers are very big, but I don't have a great sense of like how widely deployed these things are yet and to what extent is, you know, winning these contracts about, you know, a very serious vetting process of the technology versus, you know, certainly there's been, you know, these profiles of Palmer Lucky, who's one of the founders and, and the sense that certainly within the Trump administration he's kind of seen as one of the main tech guys. He's the guy who's evangelizing for know, bringing autonomy to all these aspects of the military. So to what extent is, are they winning these big Deals because Anduril's tech is incredible and is being tested out. And to what extent is because people sort of buy into the Palmer Lucky vision.
- [07:32]
Kirsten Korosek
I mean, I think a little bit of both and we won't really totally know. But it's interesting you brought up Palantir and we have seen sort of they put their tech into the private sector and also sold to like law enforcement agencies and defense. And so they're a little bit of a different animal. Also, they're not building necessarily autonomous like drones as weapons. And so a weapons company is a very different thing in terms of like who is the timeline for deployment. You know, all these other pieces, obviously Palantir surveillance piece could, could end up being in some of these weaponry, but it's a little bit of a different animal.
- [08:12]
Anthony Ha
I will say too something that struck me because we talk about Palmer Luckey obviously every time we talk about Anduril, and I think for good reason, but Palmer's the founder. There's actually a CEO of Anduril that I think some people might be surprised to learn that it's not Palmer Lucky, it's Brian Schimpf. And he, to my eyes, was far and away out in front of the news organizations this week talking about this raise, more than I've seen in the past. I just, you know, I want to file that away. I think that's interesting. Palmer clearly has other things going on. He certainly is no stranger to fundraising and is quite good at it, apparently, having raised so much for Anduril, raised so much for the bank that he's trying to build, Erebor. But, you know, it's just, I thought it was interesting to see the more sort of like kind of engineering focused CEO talking to Bloomberg News this week versus the the easy book of Palmer Lucky on tv.
- [09:10]
Kirsten Korosek
So, you know who else investors love and simply can't say no to? I think Sean, you know the answer to this question.
- [09:18]
Anthony Ha
RJ Scaringe, maybe you've heard of him. Founder and CEO of Rivian. He. I had to double take when I saw this this week, genuinely, because I saw the Wall Street Journal reporting exclusively that Mind Robotics, which is a sort of spin off of Rivian that we first learned about late last year and is focused on industrial robotics. Industrial AI raised $400 million. And I, I thought, boy, that's. Did somebody like republish a story or something like what's going on? Because they just raised $500 million in March. No new raise new investors and brings their total funding to over $1 billion now for mind Robotics, which, you know, is a lot of money for a company who we haven't seen really anything from. We've heard a lot about what scirange's vision for Mind Robotics is, kind of the thesis and how he thinks about it, but it's all been, you know, very sort of generalized. Speaking about what he wants to do at this startup. And we certainly haven't seen any demos. We haven't even really seen exactly what it is that they're working on. And I'm curious how much investors have seen exactly what he's working on. You know, there's, you know, you like to think that they're probably seeing something, but that's not always the case. Like we learned last year when we first wrote about Slate Auto, we know that people were investing in that company and getting hired to that company without even seeing the vehicle to a certain extent.
- [10:43]
Sean O'Kane
Yeah. Reading about this deal kind of made me reflect on just sort of the difference about like both reporting on deals like this, reading about deals like this versus, you know, consumer Internet companies and how back when most of the deals were consumer Internet companies, at least in you saw dollar amounts like this, it was actually like products you could go out and try, you could get a sense of whether they were like popular or not. And in some ways, like this is really exciting because it's actually tackling things that problems that maybe seem more real or more impactful, but there is still that kind of black box quality of like, man, I have no, basically like this sounds cool. I hope they can build it.
- [11:20]
Kirsten Korosek
Yeah, yeah. But I'm never going to be able to try it. Well, in the case of also it's a, it's a micro mobility company and, and Sean has done a lot of reporting about that. In the case of Mind Robotics. Yeah, it's like industrial automation. I, I spent some time in, in talk to RJ about this actually back in March at a Rivian event at South By. But I talked to him a lot about this and you know, his whole premise, which is kind of interesting, it's like we're thinking about humanoid RO robots all wrong. We're making them look like super look and act like super strong humans. We don't need like a humanoid robot to do a backflip. Like no factory worker can do that anyway. So that's kind of the premise. But we haven't really seen anything. We've gotten hints of things, but haven't really seen anything yet.
- [12:06]
Anthony Ha
Yeah, we should say too. You know, previously Mind Robotics was sort of seeded with Funding from Eclipse this round brought in Kleiner Perkins. So it's not like RJ's out there wooing sort of just anybody who's throwing money at robotics. He's going after some pretty blue chip Silicon Valley firms and raising some serious money for them. The other thing that really stuck out to me was one of the venture arms of Volkswagen threw in in this round, which is interesting to me for a number of reasons. One, does that portend a sort of potential customer for what it is that they're working on, automating different processes inside factories. I can see there being a lot of interest from Volkswagen on that. The other thing is there's been, you know, if you pay attention to the German trade magazines, which I do a lot, doing so much automotive coverage.
- [12:58]
Kirsten Korosek
Nerd.
- [12:59]
Anthony Ha
There's, there's been, Listen, I can't read it, but like I can read it through Google Translate. But he, there's been a lot of reporting there over the last year or so. Call it about potential tension inside the joint venture that Rivian has with Volkswagen, where they're sort of collaborating on software and electrical architecture to basically modernize and make better Volkswagen's new cars coming out. And if you're only reading that stuff, you could kind of start to believe that maybe there's been some fracturing or something like that. But not only seeing Volkswagen continue to put more money into Rivian and into the joint venture, but also see them go out to this level of, you know, backing Something else that RJ's doing, I think is, you know, you could take that as a sign that they, the relationship is not sort of like teetering off a cliff like some might make you believe.
- [13:53]
Kirsten Korosek
Volkswagen. I'm glad you brought them up because your story, which you covered this week about the Mind Robotics raise sort of inspired me to, you know, actually kind of talk about this, you know, internally and then now write a story about just how much money RJ and, you know, the people around him have been able to raise. And I calculated about $12 billion, the bulk of which, and this is not counting Rivian's ipo, to be clear, this is all like strategic institutional investors like, you know, T. Rowe price and then VCs like Eclipse for three startups. And the bulk of that funding, like literally 11 and a half billion of it happened from 2018 to now. So we're talking like seven years, three startups, nearly $12 billion. And that's not even counting Volkswagen, which has also made a pretty big bet. I mean, it's, it's A direct investment, but it's, it's a joint venture. So there's a little bit of, you know, hey, we're giving you this money, but we're expecting something in return and that's going to be $5.8 billion. So the mind Robotics piece is interesting if Volkswagen is thinking about maybe using that industrial automation particularly because that's kind of the area where Volkswagen is known to have, you know, have the expertise, whereas Rivian has the software expertise. So if they're tapping that startup for automation, when you would think they'd be the experts, I think that's notable. But we'll see. I mean we don't, we don't really know. We're kind of speculating.
- [15:31]
Sean O'Kane
So we have one more deal to get to which unlike Anduril and Mind Robotics, is one that I think is new to equity. So I'm excited to talk about this startup called Vapi. I mean it's not scrappy, it's just raised like a pretty, pretty big round. But who wants to explain the deal with Vapi?
- [15:45]
Kirsten Korosek
I'll just jump in really quickly. They raised $50 million series B, they're now valued at 500 million. And then I kind of am excited about this story because of it's sort of like a feel good startup story. I'll leave it at that.
- [16:01]
Anthony Ha
I'll give them this, you know, just at the outset adorable press image that they sent for us to use in the story that Jugmeet wrote for us. You know, the sort of two co founders standing on the, on the bridge in San Francisco with, with phones and you know, as a photographer myself and a former photo editor, I always appreciate it, especially these days when you have so many early stage startups that are just throwing like AI slope images in their press packets. So good on them for that. I like this story because these guys sort of identified they had been working on essentially kind of like an AI therapy product which we've seen where that can go as people have increasingly used voice agents and chatbots and they realize that they might be better off pivoting to something, you know, more opportunistic at the time, which was getting more into, you know, these becoming a voice vendor. And the big thing that really, you know, seems to have popped for them was winning this contract to handle customer support for Ring under Amazon. And as Jagmeet wrote in the story beat, they beat out 40 plus other potential vendors to take the whole thing which, you know, seems, seems like a pretty sturdy line of business there. So you know, it's a nice example of a company, you know, a young company being nimble and seeing it pay off pretty quickly.
- [17:26]
Sean O'Kane
Right. And if I remember correctly, I think they, they won that contract kind of before the holiday season. So I mean this was like a pretty serious stress test of, of their systems, I would imagine. I think, you know, zooming out a bit. I mean obviously. So this is in the kind of customer, automating customer service space, which is one of those things that it seems like in general when we sort of debate what can be automated by AI, what cannot. Customer service is often kind of one of the first examples. And I think there's a lot of, you know, pragmatic business reasons for that. And also as a person who calls customer service sometimes it's not something I'm crazy about. The, you know, like I think a lot of people have been on the phone and been like I just want to talk to a real human being. Although that can also be frustrating for other reasons. But you know, given that that's probably the way that things are going, certainly you want that experience to be as good as possible and to be able to fall back on humans when, when it makes sense. So I'm, I'm hopeful that, you know, the fact that Amazon did this and seems happy with them, maybe this is a system that, that does it in a way that's not going to make us all completely frustrated.
- [18:30]
Kirsten Korosek
So we've talked a lot over the years about like the frustration of using AI customer service and I'm just wondering, I think it's gotten better and I. But I'm still waiting for. Yeah, I know you're nodding your head like back and forth but I've had a couple of recent experiences where it hasn't resulted in me yelling at the phone and just being like operator, operator. So I guess that's progress. So I don't know, I don't have a ring so I can't test out the customer support, but maybe one of you two can and then report back at how their product is doing. Because now I should say they started by doing the holiday search, but now they're a hundred percent of handling a hundred percent of the customer support.
- [19:15]
Anthony Ha
Yeah, I hope that you know, and I am optimistic like Anthony to a certain extent of, you know, the pre existing systems that are like, you know, really poor, crude automation were never going to be real solutions and something like this has a better shot at it. And hopefully over time, you know, as they are able to train on more calls, they'll just be able to sort of brute force their way through it. I will say my one of my only real interactions with one of these kind of like newer era AI voice agents was trying to resolve an issue with like insurance on my house, you know, a particular kind of insurance and trying to talk to the underwriter and the company that I called the AI voice agent hooked me into another call with another party that I needed to talk to and was just absolutely not listening to the thing that was being said from that person and not understanding it all and getting details wrong just to the point that I just had to hang up and start the whole process over again and I finally got a human. So we'll hopefully get there, but I haven't had evidence of it otherwise.
- [20:18]
Kirsten Korosek
How happy were you when that was happening? I would have liked to have seen
- [20:21]
Anthony Ha
that it was a morning for sure.
- [20:24]
Sean O'Kane
Yeah. It really feels like we're at the moment where a lot of the pundits saying this makes sense. We're about to see how much it actually practically makes sense.
- [20:34]
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- [21:04]
Sean O'Kane
But we do have some I think pretty meaty themes to talk about. The first is someone we've it starts with somebody that we've talked with about a lot on this show, Elon Musk. But it's not just about Elon. It's also about kind of this network of founders who've kind of emerged from his different companies. Kirsten, do you want to kind of walk us through that?
- [21:23]
Kirsten Korosek
You know Elon Musk is part one of a few people is part of sometimes referred to as like the PayPal mafia. And you know a lot of those folks have gone on to create their own companies. Elon Musk of course was did not found Tesla but came in is now labeled as a co founder. He did found SpaceX and a bunch of other companies like Neuralink and the Boring company and things like that. And in many of those top executives or top engineers, some people who actually rose to the ranks and got pretty, pretty high up there have gone off and created their own companies now. So we have like sort of the next layer ripple Effect, I guess, of the Elon Musk ecosystem, or universe. We actually talked about one of them or we wrote about one of them this week by our climate tech reporter, Tim Deschamp. And this is about Drew Baglino. And for any Tesla folks out there, follow, follow company or shareholders. He was really considered like a rising star at Tesla, was at the company for like 18 years. And Elon was has never been someone to put his execs front and center, but he would occasionally put Drew front and center and Drew left at like, kind of a critical time. All these layoffs, this is about two years ago. And in that time he's now started two companies. So Heron Power is one. And then Tim got the scoop. He kind of hunted down the. This next very secretive startup around heat pumps called Sati Thermal Machines, which is a sort of scientific nod to a inventor. And so here we have like a second one. We don't know if they've raised any money. The assumption is that they have.
- [23:06]
Anthony Ha
Yeah. I mean, this is interesting because for a couple of reasons. One, you know, I sort of distinctly remember Drew Baglino talking a lot about heat pumps when he was working at Tesla. So this is kind of not surprising that he's still going down this road. Tesla, you know, this is like a very, you know, kind of like a deeper technical thing that the company never really got a lot of credit for. But it started using heat pumps, I think in particular on the Model Y in the early days. And that change to, to the just sort of like architecture of how, you know, the vehicle itself would move air throughout, you know, all the places that it needed to go just gave itself a huge boost of efficiency and is one of the reasons that those cars, you know, have been sort of some of the leaders on range in the electric vehicle world. And so, you know, to see him jump back into this is kind of not surprising. But yeah, you know, you mentioned all these other things we have really seen, you know, for a long time in the early to mid-2010s, we started to see a lot of companies get that kind of shine of like, former Tesla people. I think SpaceX more than any of them, though, was the one where if you were Bennett SpaceX and you had stepped out to start something of your own, having that shine of like former SpaceX engineer, former SpaceX VP, former SpaceX whatever, it was like a real shortcut to attention, to funding and sort of credibility. I think maybe in some ways even more so than Tesla, if only because SpaceX is arguably a more hardcore engineering company. It's not really all at all consumer facing. It's a more focused organization than Tesla, which is, you know, up to like over 120,000 employees worldwide now. And so, you know, it's interesting to see, you know, the Tesla folks, like even this week I wrote about redwood materials, which was created by J.B. straubel, the former CTO and co founder of Tesla that company just hired. Deepakuhujo is the former CFO of Tesla, longtime cfo. You know, I talked to him a little bit about what he expects to do at Redwood, coming into that role there. But it's these SpaceX folks and especially with the IPO looming, you know, we're now mere weeks potentially away from that of one of the, probably the greater wealth creation events we've seen in this country ever. It has me really curious what, what that's going to look like now because there was already this engine of founders and engineers and technical people coming out of SpaceX well before the IPO and now they're all going to have, you know, they won't need to panhandle as much if they want to get their own ideas off the ground, if that's really what they want to do.
- [25:46]
Sean O'Kane
Yeah, it feels like when we talk about that formulation of like the PayPal mafia, and then I think you guys can correct me if I'm wrong, but I feel like people have tried to make that work, the X, you know, something Mafia, you know, for other things, but it's never quite stuck the way the PayPal mafia does. But there's sort of like a few different things that are kind of embedded in that. Sean, you're talking about like, just like money, right, is like when there's a big liquidity event, a bunch of people get rich, then they can start new things, they can invest in new things and suddenly you have like a whole potentially a bunch of other successful companies that kind of came from, you know, this IPO event or whatever. There's also, yeah, there's just sort of the pedigree of, hey, if you put, if you're trying to raise money and you, and you put this at the top of the, you know, your slideshow or whatever, that that's the thing that's going to get you a big check. And then there's also the question of these sort of like networks of connections and you know, people who are maybe philosophically aligned, things like that. But, but certainly, you know, the PayPal mafia, the biggest names like Thiel, David, Sachs, Musk, I mean they're also like politically Aligned. And so I'm curious to what extent it sounds like it's not just that, hey, put space X, you know, on your resume, you can raise money. But it is also like these guys like to work together and maybe they picked up other things from their time at SpaceX or Tesla.
- [27:02]
Kirsten Korosek
Sean can speak to this, but we've both done a ton of reporting around working conditions in Elon Musk companies. So we have a lot of color from that. And it is like being in the trenches. It is like essentially being, you know, let's say not war, because that's a very different thing, but it is like your cohort, these are people you're spending sometimes 80 to 100 hours a week working with. You're spending certainly more time with these people than with your own family. And it's very mission oriented. I think that you're correct in that it's not the same as a PayPal mafia because the people who are part of that all were equally huge personalities, people who went on to have a lot of power and influence. This is more of like a breeding ground for startups and ideas based on the fact that they're working in very mission driven environments. Like save humanity is. SpaceX is right, X is, you know, their whole premise when he took it over was like fighting, you know, for free speech and censorship. Whether or not you believe that that's true, that was the pitch Tesla was when it was first, you know, taken over by Elon Musk. It was about climate change. Big, big, big ideas. And so you get these people together who are really smart working on things and I think it's only natural that they go off eventually and create a startup which also requires really long hours and, you know, building things.
- [28:31]
Anthony Ha
Yeah. I will say if you look at the sweep of companies that Musk has been involved in, I would argue Tesla probably had the cleanest of those missions, the sharpest, you know, for, for a while, at least until the last like two years. Because now they're changing it to something more gauzy and unspecific by, you know, talking about amazing abundance or whatever and not necessarily talking about, you know, distinctly trying to move everybody to a more sustainable energy economy. SpaceX also sort of had one that was maybe secondary to Teslas with this focus on, you know, getting to Mars and establishing a presence on Mars. But that has also changed recently too. And it makes me wonder, you know, that was a pretty whiplash decision. It was a little over a year ago that Musk was calling the moon a distraction and was saying that SpaceX was still focused on Mars and that's the goal, and everything else that comes along the way is in service of that. And as crazy as that sounds, I think a lot of people were still pretty bought in to that vision. I mean, the very few people who even give interviews from inside that company in different forums would still cite that as like their, you know, one of the reasons that they were mission aligned with the work that was being done there. And so, like, with that changing recently and this liquidity event about to happen, it makes me wonder how many people will stick around and who will stick around versus who will sort of take a break and then, and then see what they want to do. And that could create some tension for SpaceX because, like, not only are those talented people that you're probably losing, but also they have big plans. Like, the company itself has been talking this week about wanting to operate multiple spaceports around the world to launch Starship, which we're about to see the first launch possibly next week, of the third version of Starship, which looks genuinely capable in a way that some of the earlier prototypes have, and they need that talent. And if they're going to keep expanding in the way that they are, like, it's one thing if we were, you know, you think about their Starbase site in Texas, they've been building that out for a while and still are. And that's a monumental effort of its own to replicate that around the world and go even bigger. Makes me wonder, you know, how many of these people do they still need, how will they attract new talent, all of this kind of stuff.
- [30:54]
Kirsten Korosek
Yeah.
- [30:55]
Anthony Ha
You know, I will very briefly caveat that with the idea that Tesla once wanted to have factories all around the world, 20 factories, you know, one on multiple, on every continent. And that idea fell by the wayside too. So, like, we should always keep those things in mind as well.
- [31:09]
Kirsten Korosek
I mean, I think you get to one interesting point, which is this sort of idea of, like, moving from, not getting away from totally from rockets, but, like this new focus on space data centers. And that reminds me of a company called Cowboy Space, which just recently raised like $275 million to build them. This is the latest startup, and I'm so sorry for axing this name, but it's Baju Bhat. I believe we had him on the show last year when it was still Etherflux. So this is a company that is pursuing, and I believe that they're launching with, in partnership with SpaceX. Am I correct on that one?
- [31:50]
Anthony Ha
The way I read it is that Baiju Bad is one of the co founders of Robinhood. He started Aetherflex as an attempt to basically solve the sort of energy crunch on the planet with you know, a pretty out there idea that lines up with SpaceX and what it wants to do of basically beaming energy down from space, solar energy that it was collecting, you know, in orbit. And they've pivoted now to basically wanting to build their own sort of like, you know, quote unquote space data centers. And he said he went to, he talked to Tim Fernholz for the story this week. He went to the launch providers like SpaceX and others that the few others there are and it was just becoming increasingly obvious to him that there is not going to be a lot of capacity. I think a lot of people over the last five or six years have looked at what SpaceX has done with the Falcon 9 being able to launch again and again, look at what its plans for starship were and think, oh my gosh, like the cost of space is coming down, the access to space is going up. We've heard this from a lot of other startups over those years too and like, oh, it's going to be so easy to get stuff into space. It sounds like from his conversations he believes, and I think this is probably true, that's not going to be the case anymore. SpaceX has been ticking up its launch prices over the last couple years. It remains to be seen how much capacity they're going to lend out on Starship versus their own Starlink plans and everything. And so now we have Baiju Bot basically saying we're going to pivot my company into basically a bespoke rocket that is built just to launch my own products into space. Which, you know, I think Tim says in the piece, like it's nuts. Like, like and like rightfully so. So like more luck, you know, more power too and best of luck, but is, you know, it's going to be a long road ahead. And also it's a sign of sort of like how crunched this market really is at the moment with so few providers.
- [33:47]
Sean O'Kane
Mm, yeah. So we have one more thing to get to. Like this is like news that's been kind of going on in the background for the past couple years, weeks. You talked, we talked about it on this show a couple times, which is the Musk OpenAI trial and how that's kind of, I think, bringing a lot of the dirty laundry from OpenAI's past into the light. And you know, that led to this really provocative headline from Tim Fernholtz about who trusts Sam Altman. Does anyone want to take a stab at answering that?
- [34:19]
Kirsten Korosek
Yeah, Anthony, I'm going to throw it right back to you. Do you trust Sam Altman?
- [34:26]
Sean O'Kane
It's an interesting question because, you know,
- [34:28]
Anthony Ha
it feels like it's not a yes.
- [34:32]
Sean O'Kane
It feels like something where this is, it's, that's kind of a wild question in some ways at least to discuss in kind of like a journalistic context. But actually that's sort of the core of the trial in a lot of ways and it actually seems to be the core of understanding so much of what's happened at OpenAI, especially this big kind of executive power struggle that I guess they now call the blip that. It just seems like a lot of people who've worked with Altman don't trust him. And he's sort of acknowledged this a little bit because he'll talk about the fact that he recognizes that he's been kind of conflict averse, kind of telling people what they want to hear and he's trying to work on that, which I find, I mean it's, it's like, sounds plausible and like I can understand how that can like lead to misunderstandings in some situations. I'm also a very conflict averse person and I don't, I'd like to think that, you know, if any of this stuff went to trial that people would not be like asking, is Anthony ha. Trustworthy?
- [35:31]
Kirsten Korosek
Still not a yes, I will, I will say that this isn't just that question, while provocative, doesn't just encapsulate what this trial was about. But actually I would, I would actually zoom out even more and say this is a fundamental question. I think a lot of tech journalists, policymakers and I think more and more consumers about all the AI labs, it's really come down to trust because we don't have the kind of insight necessarily. I mean these are all privately held companies. There's a lot behind the veil still. Maybe when they all IPO this year, you know, we, we can get a peek. But it is fundamentally about trust and misuse and do we believe the intent. And you know, what I would throw back is sometimes the intent can be, you know, worthy, noble and still misused. But, but I think it's more about, I think it's more than who trusts Sam Altman, although that was very interesting in, in this trial, but more that bigger question that we can apply to the entire industry.
- [36:32]
Anthony Ha
I'll say it, I don't trust him. But you know, I don't trust most people, so I guess that's just the baseline. And, you know, I will see where this goes. Like, the trial sort of wraps up today. I'm very curious to hear, you know, how the jury decides this all. I think we're kind of where we were at the start of this. This, you know, a big motivator if this was Elon Musk trying to sling mud at a sort of perceived rival and someone who he feels slighted him. And I don't know if, you know, if we know enough yet to say that that was completely accomplished and whether or not he has a shot at winning. But, you know, I think all these people came out of this looking a little bit worse. So.
- [37:11]
Sean O'Kane
Yeah, and just to get specific, since we have been suggesting maybe that we don't trust Sam Altman, or certainly some of us don't, why this is coming up this week is that he was on the stand and he was basically getting grilled about some statements he's made in the past in testimony to the government, basically saying he didn't have any equity in OpenAI. And that is not true because he had a stake through Y Combinator, which he used to run. And he kind of tried to brush that off by saying, well, I assume that everybody understands what it means to be a passive investor in a VC fund. And I think the lawyer somewhat fairly said.
- [37:49]
Anthony Ha
Really?
- [37:49]
Sean O'Kane
You think the, the, you know, the Congress, the congressman who was interviewing you, like, knew that?
- [37:55]
Kirsten Korosek
Yeah, I mean, he was playing with, like, the whole semantics game. What I thought was so interesting about, and there's been some reporting from us and others is this style of how Sam Altman asks answered questions and Elon Musk on the stand. So Elon Musk, who also could, in many, many, many scenarios, in many instances, we can point to the fact that, like, he put something out on Twitter that was a lie or a bit of a fib and on the stand corrected the record. So there's a history of, you know, I would say non truthfulness slash lying, blatant or otherwise in Elon Musk world. But how he treated it was like, incredibly combative and very different than Altman, who really took this, like, I'm working on it, and tried to seem sort of affable and. And I don't know. I don't know if it'll work for him. Right. Because it really comes down to the core facts, and hopefully that's what the jury pays attention to. But I thought that that was really interesting, like that sort of style both being untruthful, but like, how they dealt with it was very different.
- [39:09]
Sean O'Kane
Well, I'm sure we'll have more to talk about as we actually find out what the verdict is and what the consequences will be. But in the meantime, Equity will be back next week, and of course you can follow us at Equity Pod on X and Friends.
- [39:24]
Podcast Producer Teresa Loconsolo
Equity is hosted by TechCrunch senior reporters and produced by Teresa Loconsolo with editing by kel. Subscribe on YouTube or wherever you get your podcasts and find out what's next@techcrunch.com events. Thanks so much for listening and we'll talk to you next time.