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If you’ve been following along with this newsletter, you’ll have noticed that I’ve been a little bit curious about AI — especially generative AI. I’m likely not the first person to make this observation, but AIs are extremely, painfully average. I guess that’s kind of the point of them — train them on all knowledge, and mediocrity will surface.
The trick is to only use AI tools for stuff that you, yourself, aren’t very good at. If you’re an expert artist or writer, it’ll let you down. The truth, though, is that most people aren’t great writers, and so ChatGPT and its brethren are going to be a massive benefit to white-collar workers everywhere. Well, until we collectively discover that a house cleaner has greater job security than an office manager or a secretary, at least.
On that cheerful note, let’s sniff about in the startup bushes and see what tasty morsels we can scare up from the depths of the TechCrunch archive from the past week. . . .
Okay, fine, let’s start with AI
Image Credits: Kirillm (opens in a new window) / Getty Images
I know, this happens every damn week: I start with the intention of writing this newsletter without going up to my eyelashes into the AI morass, and every week, y’all keep reading our AI news as if your livelihood depends on it. Because, well, it’s entirely possible it does, I suppose.
The GPT Store, introduced by OpenAI, enables developers to create custom GPT-based conversational AI models and sell them in a new marketplace. This initiative is designed to expand the accessibility and commercial use of AI, similar to how app stores revolutionized software distribution. Developers can not only build but also monetize their AI creations, opening up a new avenue for innovation and entrepreneurship in the field of artificial intelligence. Of course, that little update — and the platform now natively being able to read PDFs and websites — is a substantial threat to startups that had previously filled this gap in ChatGPT’s offerings, especially those whose business models are based on such features. It’s a reminder that building a business around another company’s API without a sustainable, stand-alone product is, perhaps, not the shrewdest business move.
AI is, of course, not just for startups. During Apple’s Q4 earnings call, the company’s CEO, Tim Cook, emphasized AI as a fundamental technology and highlighted recent AI-driven features like Personal Voice and Live Voicemail in iOS 17. He also confirmed that Apple is continuing to develop generative AI technologies — tellingly, without revealing specifics.
Heinlein would be horrified: Elon Musk announced that Twitter’s Premium Plus subscribers will soon have early access to xAI’s new AI system, Grok, once it exits early beta, positioning the chatbot as a perk for the platform’s $16/month ad-free service tier.
Brother, can you spare a GPU?: AWS introduced Amazon Elastic Compute Cloud (EC2) and Capacity Blocks for ML, a new service that enables customers to rent Nvidia GPUs for a set period, primarily for AI tasks like training or experimenting with machine learning models.
From zero to AI founder in one easy bootstrap: In “How to bootstrap an AI startup” on TC+, Michael Koch advises founders on maintaining control over their startup’s strategy and product by bootstrapping — yes, even in the oft-capital-intensive world of AI startups.
The rocky ocean of venture-backed startups
Image Credits: Darrell Etherington with assets from Getty under license
WeWork, once a high-flying startup valued at $47 billion, has filed for Chapter 11 bankruptcy protection, highlighting a staggering collapse. The company, which has over $18.6 billion of debt, received agreement from about 90% of its lenders to convert $3 billion of debt into equity in an attempt to improve its balance sheet and address its costly leases. On TC+, Alex notes what we kinda knew all along: that the core business just didn’t make sense.
In other venture news . . .
Ex-Twitter CEO raises third venture fund: 01 Advisors, the venture firm founded by former Twitter executives Dick Costolo and Adam Bain, has secured $395 million in capital commitments for its third fund, aimed at investing in Series B–stage startups focused on business software and fintech services.
Happy 10th unicornaversary: Alex reflects on the tenth anniversary of the term “unicorn,” which was initially coined right here on TechCrunch, to describe startups valued at over $1 billion.
You get a chip! You get a chip!: In response to a shortage of AI chips, Microsoft is updating its startup support program to offer selected startups free access to advanced Azure AI supercomputing resources to develop AI models.
Let’s talk Sam Bankman-Fried
Image Credits: Bryce Durbin / TechCrunch
Look, I’m not going to lie, I think most crypto is dumb, and I’ve seen only a handful of startups that use blockchains in a way that makes any sense whatsoever — most of them would have done just fine with a simple database — so I’ve been following Jacquelyn’s coverage of Bankman-Fried’s trial with a not insignificant amount of schadenfreude. It’s human to make mistakes, and startup founders are human, but if you’re defrauding the fuck out of people, you deserve all the comeuppance you can get.
Sam Bankman-Fried was the co-founder and CEO of the cryptocurrency exchange FTX and the trading firm Alameda Research (named specifically to not sound like a crypto company). He has been found guilty on all seven counts of fraud and money laundering.
The charges were related to a scheme involving misappropriating billions of dollars of customer funds deposited with FTX and misleading investors and lenders of both FTX and Alameda Research. After the five-week trial, the jury spent just four hours to reach its verdict.
The collapse of FTX and Alameda Research, which led to the indictment of Bankman-Fried about 11 months ago by the U.S. Department of Justice, was significant, with the executives allegedly stealing over $8 billion in customer funds.
Sentencing will happen next March, but if he gets smacked with the full weight of his actions, he will face a total possible sentence of 115 years in prison.
Jacquelyn did a heroic job covering the trial for TechCrunch, and it’s worth taking an afternoon to read through it all — the details are mind-boggling.
Top reads on TechCrunch this week
The house sometimes wins: Mr. Cooper, a mortgage and loan company, experienced a “cybersecurity incident” that led to an ongoing system outage. The company says it has taken steps to secure data and address the issue.
Can’t think of any downsides of the Hindenburg: The world’s largest aircraft, Pathfinder 1, is an electric airship prototype developed by LTA Research and funded by Sergey Brin. It was unveiled this week, promising a new era in sustainable air travel.
Arrival’s departure: The EV startup Arrival, which aimed to revolutionize electric vehicle production with its micro-factory model, is now facing severe operational challenges, including multiple layoffs, missed production targets, and noncompliance with SEC filing requirements, resulting in a plummet from a $13 billion valuation.