‘AI communism’, rogue models, and the why Kimi K3 spooked Wall Street

0:00Anthony Ha: A Chinese AI model spooked Wall Street this week with players from OpenAI shouting about security risk. Meanwhile, one of OpenAI's own unreleased models broke out of a test and hacked a real company. Also this week, EVs seem to be getting killed off left and right in the U.S., even as automakers try to sell Americans on new models. We'll get into why, plus a couple of deals this week, including Travis Kalanick raising$1.7 billion for his new robotics company, with Uber even chipping in. Stick around.

0:39Anthony Ha: Hello and welcome back to Equity TechWrench's flagship podcast about the business of startups. Today is Friday, July 24th. I'm Kirsten Korosek, Transportation Editor here at TechCrunch, and I'm joined, as always, by our weekend editor, Anthony Ha, and Senior Reporter Special Projects, Sean O 'Kane. Welcome, you two. I'm just wondering, as a little check-in, we're mid-summer. How's everyone's summer going on? Anything exciting happening over there?

1:04Sean O'Kane: Well, New York City has had heat waves. We've had some apocalyptic air, which I think a lot of the Northeast has. So I'm just excited that I can go outside today and not wear a mask or get drenched in sweat.

1:17Kirsten Korosec: I live in North Carolina, so it's sweat all the time.

1:21Anthony Ha: Well, speaking of sweating, some AI labs are sweating this Chinese AI model that came out and got a lot of discussion. Anthony, you covered this over the weekend. Tell me what's going on with Kimi.

1:39Sean O'Kane: Right. So Kimi is an open model from Moonshot AI, which is a Chinese company. And I think folks who have followed kind of the discourse around Chinese AI, this will probably be very, very familiar from the launch of DeepSeek, one of their models about a year and a half ago, where basically Chinese model comes out on some benchmarks. It does as well, or at least seems competitive with some of the frontier models. And a certain portion of the tech industry kind of loses their mind. I mean, I think some of this got extra scrutiny because one of the people kind of posting about it was somebody at OpenAI.

2:19Sean O'Kane: But in general, I think there was this, it's this recurring question of can Chinese companies basically beat U.S. companies, at least in some aspects, and do it much more cheaply and in a much more open way.

2:33Kirsten Korosec: There are many elements of this that feel like we're seeing repeats of prior freakouts. I think one of my favorites is everybody is like so ready to and so expecting that something is going to arrive and blow everything else away. And I think my favorite example of that this past week was people realize showing off that, oh my gosh, Kami made in 30 minutes an entire replication of Mac OS. And it's like, yeah, it made a pretty impressive graphical reproduction of kind of what Mac OS looks like, but it didn't. It's not an OS. It's just, and it's like we keep seeing these things happen over and over again where it's like everybody's so jumpy in the tech industry.

3:19Kirsten Korosec: that and i think in particular with some of the the chinese models that come out that there's like this expectation and i think this gets to the sort of core of why people reacted the way they reacted last weekend which also by the way go outside touch grass it's the weekend like everybody in the industry was like trading barbs on on twitter all weekend and we should get into that a little bit more but i this jumpiness is really interesting to me because you know we're now a week out. And I don't think anybody's feeling like the end is nigh like they were a week ago.

3:54Anthony Ha: Yeah. And I think that you're about to get into sort of the core reasons as to why. And we have a really great story by one of our reporters, Tim Fernholz, who kind of tries to unpack the psychosis around this here in the United States. And he points to a number of reasons and kind of concludes, and I don't want to conclude it for him, but I think that there's one that rises more to the top than others. But there's this question of, well, there's concerns that these Chinese open-to-weight models might have an implicit bias towards China. There's another worry about security risks and guardrails.

4:32But there's also a pretty big idea here, which is a protectionism

4:37Anthony Ha: and who is going to, quote unquote, win the race. Is it going to be the U.S. or China? And that seems to be driving, I think, a lot of what the fear is. I don't know, Anthony, if you agree with that summation, but that seems to be what this is, what's behind this.

4:54Sean O'Kane: No, I completely agree that I think the China aspect always adds this certain level of hysteria. And that's not to say that people shouldn't be concerned about how the U.S. stacks up against China, you know, across different industries, which I think we'll get to later as well. But there's this, you know, that it gets so amped up. I mean, the other thing this reminds me of is the discussion around TikTok a few years ago. And again, it wasn't that I thought that the concerns around TikTok were totally made up, but that the level of how panicked people got. And it seems like as soon as you add the word China to any discussion, things just kind of immediately ramp up dramatically.

5:35Sean O'Kane: And then in this case, it's sort of also linked to this discussion about open and this idea that AI is so powerful and so dangerous that the only way we can control it is with these proprietary models from these American frontier companies. And I think obviously, most people saying this, there's reasons why they want to say that. David Sachs, who was the AI czar for the Trump administration, now has a different role in the Trump administration, was definitely sort of like shouting about how, metaphorically shouting, on X, about how, you know, I can't believe people are opposing data centers. We're tying ourselves in knots.

6:16Sean O'Kane: There's too much regulation. And so it's a way to sort of argue for, you know, I think the positions that they already kind of had around AI and that, oh my gosh, if China beats us in this, like that's unthinkable. So you have to do what I kind of want to do anyway. Yeah.

6:32Anthony Ha: And I think that the point here is, is that it's protecting a very specific kind of if you were to put across the board bans on Chinese open weight models. And to your point, like I'm not saying that there aren't real concerns here, but let's just play that out. If we were to do that, it would benefit models created by OpenAI, for instance, and it would force enterprises to use those as opposed to using models like Kimi. So you really have to ask the question, like, are we accelerating and ensuring that Americans win the AI race or are we ensuring that certain frontier labs do better than others?

7:12Kirsten Korosec: yeah I mean I think to that point like we should say a lot of this discussion really got kicked off by uh you know the head of strategic futures at openai dean ball who you know sort of was the first one to come out with this like really long post mentioning some of these concerns but also being like you guys tell me like part of me thinks the reaction to this was because people disagreed with what Dean wrote. Part of me also thinks that the reaction was partially driven by the fact that he kind of just said the thing out loud, right? Like he basically said the U.S. should create like regulatory FUD, like fear, uncertainty and doubt and like muck up the ability for these open weight models to compete with the U.S.

7:59Kirsten Korosec: And to me, like I think that you can read in some of the responses from folks like not supposed to say that out loud. like maybe we agree with you sort of at the highest level but like and but that's the way things operate a lot of the times it's just we don't really say it out loud because if you if you're that explicit about it uh you can create some problems in sort of making making those

8:22Sean O'Kane: hurdles durable and i mean i think that it's part of the reason it got so much attention besides i mean it was this sort of long fairly intense response and it's also about but who he is which is that he had a role in the Trump administration shaping AI policy, and then just a few months ago, joined OpenAI in this, I guess, sort of like new role. And so he kind of straddles those worlds of, you know, one of the biggest AI labs, but also probably still has some ties to the Trump administration and actually making this policy. And I mean, there was a lot of different things he talked about. I mean, one thing that I thought was interesting was he said that, But, you know, I don't think you can sort of just dismiss what Kimmy has, you know, what Moonshot has built with Kimmy by just saying it was distilled from American models.

9:11Sean O'Kane: But the other thing he said was like, it really focuses on this open angle and saying that I don't think that the Chinese government, I can't believe the Chinese government is allowing these, you know, open weight, allowing it still to be open when it's so powerful. and clearly this is going to lead to a future of the phrase he uses full AI communism. And so the way we have to avoid this future of full AI communism is what you just said of like, let's just have sort of regulatory FUD. And he said that you don't even need a good excuse. You just need to scare people away from using these models.

9:47Sean O'Kane: And yeah, like you said, there was a lot of just people being like, oh, wow, he just he said that part out loud. Okay.

9:52Anthony Ha: Well, he said that part out loud in a society in which we. There's some debate over it, but tend to be pro free market. So, you know, I mean, it runs counter to sort of that ethos.

10:08Kirsten Korosec: Yeah. What's free? Who is free? You know, their words have meanings and we need to define those words sometimes.

10:15Sean O'Kane: And we should say that he did sort of then inevitably do another post where he kind of backed away from that and said, hey, hey, no, I'm not saying this is what the Trump administration should do. I'm just saying this is probably what they will do. And it's like, well, that's not how you framed it. You wrote it as this is what they should do. But clearly this is not that his position is, first of all, not necessarily OpenAI's official position. And it seems like that's not the position that at least he's willing to admit to publicly anymore.

10:45Anthony Ha: Well, and I should say that while he walked it back, there is evidence that the Trump administration is considering it. So, you know, words have power. So maybe think before you rant. I think it's interesting that this is in the broader context of other things that were happening. One of the concerns that was floated with Kimmy is security concerns. And at the same time, completely unrelated, but just coincidentally, you know, Hugging Face confirmed that a breach affected internal data sets and credentials. And it seems as if actually OpenAI was inadvertently behind this breach when one of its models jumped outside of the test it was being conducted in, which I think is really interesting and a little concerning, I think.

11:35Anthony Ha: not just for hugging face but for the broader implications for ai models especially because

11:40Kirsten Korosec: we're on what open ai code red version 7 or something now right like this is supposed to be an eminently focused company that isn't distracted by side quests and yet this still happened our colleague lorenzo wrote a really good explainer about how this actually happened too and it really was just sort of like human error like big surprise but it wasn't something that was like wholly and unanticipated and, you know, some sort of emergent behavior, you know, due to the way that these models are being developed, who is just like, how did you miss this kind of thing, which is unfortunate. But, you know, here we are.

12:17Sean O'Kane: It was funny, like reading just about, you know, that it was supposed to be just this kind of benchmark test and it wasn't even, I think, supposed to be connected to the Internet. And then it was able to kind of get around that. And I think it does sort of underline that, again, not that these aren't real concerns. I think the question of how these frontier models, what they're going to mean for cybersecurity is a huge and pressing concern, but that I would argue that the China aspect is not necessarily the biggest part of it. It's just, you know, more broadly, what is that future going to look like?

12:53Sean O'Kane: How confident are we that these models are going to do what we want them to do? And of course, who is the we in that situation? But that there's, you know, there's often this sense of like, well, if we're going to sort of just panic about Chinese companies, maybe we should look in the mirror a little bit first.

13:08Anthony Ha: I think that the bigger, more important question, which you get to, is that who is the real or what is the real risk here? And, you know, there can be multiple risks happening at the same time. And, you know, what's coming out of China is certainly one to pay attention to. This is not to say to ignore it. But to your point of like looking in the mirror, I think that there is a risk if you just center all of your attention on one potential risk that you are completely ignoring something that could actually, you know, create a lot of chaos and insecurity in models that we're using.

13:45Kirsten Korosec: I think the biggest thing that we know is a challenge for these models is really it's that control and knowing their boundaries and setting those boundaries really clearly and also making sure that you can sort of disable them if need be. And, you know, at the most base level, I understand the concern with that when it comes to China, because there's just so little visibility, despite the fact that I think it was in Tim's piece. he gets into how pervasive these models are, how relied on they are by academics in the U.S., how much, you know, students in the U.S. are relying on them to learn about this stuff.

14:23Kirsten Korosec: Even with all of that, there's just still such a sort of natural state of invisibility when it comes to the internal workings of these companies and also their connection or the availability of a connection for the Communist Party to access this stuff if it desires. And so, like, I understand that base concern. You know, personally, I would say I wish we had an administration that had a more coherent way of communicating how it understands those concerns. But that's just not the world we live in right now.

14:53Sean O'Kane: Right. And I think that I mean, part of the reason why there is this concern is that there are a number of companies that are building on top of these open Chinese models. You know, a few months ago, I wrote about Cursor and they sort of had to awkwardly admit that their model was built on top of a previous version of Kimi. And I've certainly heard from people basically claiming that this is a lot more common than is sort of let on because you don't necessarily have to admit it. And again, I don't necessarily think that's a cause for panic, but it is worth asking these questions of like, okay, what if a huge slice of the startup AI sector is suddenly built on top of these Chinese models?

15:35Sean O'Kane: How do we feel about that? How confident are we that they're going to do what we want? And that doesn't mean that we have to do this kind of intense protectionism and banning, but just that I think that it's worth understanding those models and what, you know, yeah, just those exact concerns that we were talking about with security as well.

15:53Anthony Ha: So I'm going to make a major lane change and we're going to go and talk about cars. Hey, specifically EVs. And there's been an interesting thing that's been happening. And I sort of rounded it up and published this over the weekend. And it was really about like all of the EV models in the U.S. market that have been either discontinued or completely killed off. And it was prompted by Honda saying, hey, we're going to get rid of our prologue, which was this joint project that it had with General Motors. And, you know, this has been happening for a while, but I think it's really interesting because while there are a bunch of models that are being killed off, there are companies like Rivian that are trying to, you know, introduce and sell new models.

16:42Anthony Ha: And so the question that I thought it would be fun to talk about is, you know, why are these two things happening at once? Can they coexist in the same? Why are these models being killed off? And are these new models that are coming out, are they going to be successful?

16:56Sean O'Kane: Well, let me throw in a third question before we get into it, which is also my sense is that we do have to emphasize the U.S. qualifier here, that globally, actually, EVs are generally kind of on the rise, sales are on the rise. And it's really specifically in the U.S. for a variety of reasons, which you touch on in your article, that we're kind of going in a different direction. I mean, I think actually even had another piece. I forget who was by, but a few months ago were basically just it was describing this kind of K-shaped market for EVs where, you know, the rest of the world kind of going up in the US, it's going down.

17:33Sean O'Kane: I mean, is that right? Am I making this up?

17:35Anthony Ha: No, you're right.

17:36Sean O'Kane: So why?

17:37Anthony Ha: Yeah, so why? Well, it's complicated. And I know that Sean has some thoughts on this, too. So I'll defer to him. But I will say the short answer is it's complicated and it is a mix of ending of certain incentives in the U.S. and some regulatory challenges. But there's more to it than that.

17:56Kirsten Korosec: Yeah, I would say the regulations were the killing blow in a lot of ways, but not in the way that I think not in the easiest sense of that explanation. Like, I think a lot of people think, OK, that now all of a sudden these new EVs cost$7 ,500 more effectively. And so therefore it kills them. But I think in the case of a lot of these, and especially the ones that you rounded up, Pearson, coming from the legacy OEMs, this is sort of like the path they were always heading down in some ways. A lot of these vehicles, you know, to really simplify it, are more or less like internal combustion engine vehicles that were kind of like tweaked to fit electric drivetrains.

18:39Kirsten Korosec: And when you do that and you're not developing an EV from the ground up, that is you're just working with a set of constraints that is going to make it so hard for you to make a good vehicle and a profitable vehicle or even a vehicle that can get you closer to profit while you work on a purpose built one. and you know i think the real cynical take is we were seeing kind of a masked you know a better masked new version of compliance cars which we saw like a decade or so ago where you know these companies were making these things just to comply with the regulations in the u.s nobody wanted to buy them because they weren't compelling whatsoever and i don't think that was you know a hundred percent the case here but rj scringe the ceo of ribian has kind of made this point when the tax credit went away that like he was anticipating a bunch of these models were going to disappear because one of the only reasons that the you know these major automakers were willing to carry these vehicles in the marketplace was because they themselves were getting regulatory credits to sell and offset the cost of like manufacturing them and everything so it was like a deeper thing than just the consumer credit and so i think that you know all of those things together meant that we were really kind of holding our breath in a way with some of these models than more so than I think people realized in the moment.

19:58Kirsten Korosec: And I think that those problems just became too much to bear when it comes to, you know, where the market in the U.S. is now. And we should say like the U.S. is a major automotive market. I mean, it moves 16-ish million vehicles per year here, which is just, you know, it's that and then China. And so, you know, I think it's important to separate how EVs are continuing to do well outside the U.S. versus how they are struggling here in the U.S. But it's also important to remember that the U.S. is a really big market. And so to have missed the mark this widely is really, really telling on the strategy for all of these automakers.

20:35Yeah.

20:36Anthony Ha: And just to back up for a moment, when you mentioned the 7500, for those who don't follow the EV market really closely, this is the 7500 federal tax credit, which was killed off last fall and we saw this interesting sort of rollercoaster of sales. So a bunch of people sold, a bunch of automakers sold a lot of vehicles as folks saw this about to expire. And then we saw a pretty big drop off. And companies that sell in the global markets, like Tesla, just had like a record quarter of sales. But that's because they're selling into markets where they're seeing growth are in markets outside of the US.

21:14Anthony Ha: So I think that we have to understand that. But for the audience members who are biggest supporters of free markets, there is an argument that maybe it was time for the tax credit to go. Maybe not in the way that it did, which was, of course, very chaotic rollout. But if we want compelling products that can exist on their own, should that have gone away? I would say potentially, yes, but then And you have to treat all types of powered vehicles, gas and otherwise equally, which are not right now. So I get that I was offering a controversial question.

21:56Kirsten Korosec: I do think we should point out something, though. Another thing that goes unsaid often in these conversations, which is, you know, I understand the argument that, like, you know, the free market should decide. And the tax credit was sort of, you know, counterbalancing things in a weird way. And also that, you know, in the early versions of it, it was only really giving a discount to rich people and not to people who could afford vehicles because there were no affordable EVs. I get all of that, but we should say there is just also inherent incentives for automakers and their dealer networks in the U.S.

22:30Kirsten Korosec: against selling EVs. EVs tend to require less maintenance. They tend to make dealerships less money over time. Automakers have tried to find ways to make that up with like software services and stuff. But you can imagine the big automakers aren't very good at that stuff. And so they're not making much money once they sell any of the, you know, selling, you know, driver assistance features or software upgrades or whatever it might be. And so I do think like if we want to talk free market, we should talk about the fact that like. A lot of these vehicles probably didn't sell because people didn't want them.

23:02Kirsten Korosec: A lot of them also probably didn't sell because the dealers didn't want to sell them because you were never going to see that customer again in 20 ,000 miles and 60 ,000 miles and 100 ,000 miles. And so like, I just I just want to put that out there.

23:14Anthony Ha: That's why I said I understand that that is like a very narrow question to ask and a controversial one because it is layered. And also it completely ignores the fact that, you know, fossil fuel powered vehicles get a lot of incentives. And so stripping it away from EVs, it's still you can have multiple truths, though. But Anthony, please weigh in.

23:36Sean O'Kane: Well, I think the other thing that's striking to me and it sort of connects these two different themes that we're talking about is the fact that, you know, not literally the same people, although in some cases they're literally the same people, but, you know, you think about like sort of the Trump administration broadly, that there is this kind of general panic at the idea that the U.S. might fall behind on artificial intelligence and a complete indifference or even like happiness with the fact that like the U.S. could fall behind in EVs. And I think, you know, it's worth asking why. But I also wanted to then kind of turn it back to you looking ahead.

24:10Sean O'Kane: But do we think that this is going to, you know, this period right now where all these programs are shutting down, is it going to sort of just be this kind of flip and that, you know, the U.S. is going to kind of then have a kind of similar pattern to the rest of the world? Or is this something that we think is going to continue?

24:26Anthony Ha: I will say we could have an entire show on the very first part of that question. So I'm not going to even go there because we'll be here forever. But I will mention one thing. I do think that there are some interesting and emerging models that are coming out. But I will say that counter to Sean's earlier point about how a lot of these were legacy automakers with almost like compliance cars. I mean, we've also seen Lucid, which did a completely clean sheet approach. Granted, on the luxury and higher priced vehicle struggle, and that's a whole other issue. And then finally, I think we're seeing this subsector of the market of new startups coming out.

25:05Anthony Ha: I can think of at least two in the last month with lower cost EVs that are meant to be sort of more than an electric cargo bike, but not quite that big, heavy SUV. And to me, that's a niche market, but an interesting one. And maybe that's where we're going to see a lot of activity with specifically electrification.

25:27Kirsten Korosec: Yeah, I mean, that could happen. And we also had Slate, which I've written a lot about, as people who read the website know, that is targeting the low end of the market. Although I think it's fair to question how much they really want to target the low end and how much they want people to pay up, which, you know, surprise, surprise, they're a car company. You know, the other thing that I think we haven't really talked about here and I think is relevant to Anthony's question is, again, the China of it all, right? Like China saw this like massive explosion in new EV companies a decade ago that thinned out almost immediately when sort of it hit the fan for a lot of them.

26:05Kirsten Korosec: And then there was this kind of new growth out of that because they were able to accelerate their learnings. They were also able to able to capitalize on a lot of frankly retiring automotive talent in Europe that wanted to work on something new that went to China. and I'm talking automotive designers, engineers, executives, etc. And their automotive market has matured very rapidly. And that's relevant to us here because in contrast to the AI market, we are seeing a fully protectionist regime when it comes to the automotive market. We have absolutely iced out Chinese EVs from coming to the U.S.

26:45Kirsten Korosec: despite how affordable they are, you know, and the fact that we're in an affordability crisis across pretty much every consumer good. And that is buying some time for the companies that do want to keep making EVs here, whether they're complete ground up EV companies like Rivian or they're like, you know, the OEMs that are trying to chart a new course forward that isn't as EV heavy as it once was. and even there we're seeing gradations of sort of like how uh you know how they're attacking that like ford is kind of starting clean sheet again and developing a low-cost you know ev truck that's supposed to start around 30 000 that we'll see next year and we'll see how that works uh i would say of the big automakers they're probably the ones still most committed to that idea gm had its earnings call this week and basically didn't talk about evs at all uh they seem completely fine with just selling big trucks and stuff to the U.S.

27:42Kirsten Korosec: market and also becoming a defense truck contractor. And that's just the way they're headed. And and so, like, my big question when it comes to answer Anthony's question is like, it's hard to say where things go unless we know how sturdy that wall against China is. Right. And there's been some reporting about like, you know, there's some really interesting stuff happening in like border towns in Texas, where in Mexico, Chinese EVs are all over the place. And there are people who have the ability because of their work status to buy an EV in Mexico and they kind of cross the border into Texas because they have to work there or vice versa.

28:22Kirsten Korosec: And it's like, you know, there is this leaking happening that, you know, is making it more. And then you add in kind of the influencerness of all of this, like a lot of the automotive influencers in the world all get access to the Chinese things. They go, they travel around the world. They show off how cool the cars are, how affordable they are. So there's like a pressure rising when it comes to, hey, why don't we have that? And an administration that just clearly does not want it here. And automakers like Ford that have championed that protectionist approach. And to me, that seems kind of untenable in the long run.

28:54Kirsten Korosec: I just don't know when that damn breaks.

28:56Sean O'Kane: Well, as Christian did mention, there are some companies that are still trying to make it work here. And that leads us to our first deal that we wanted to talk about, which was SILA Climate. What is SILA Climate?

29:08Anthony Ha: SILA has been around actually for a long time, and they're a battery materials startup. So they are connected to the EV market, but they're also connected to energy storage. And the founder of that company was like the seventh employee of Tesla. So this is someone who is a well-known figure in the industry, you know, and certainly has been able to raise money. But what I think is so interesting is that counter to the decline in EV sales in the U.S. market currently, SILA has been able to raise$300 million in order to increase capacity for one of its battery materials in its new factory in Washington.

29:45Anthony Ha: And, you know, it isn't a one-to-one correlation, you know, but I do think that it's interesting that they were able to raise so much money in this current environment.

29:56Kirsten Korosec: yeah they're interesting to me for two reasons one gene who runs the company is just genuinely one of the more like straightforward people i think i've ever interviewed when it comes to this stuff uh and and has a deep understanding of it and two they were a company that was very ahead of the curve in a lot of ways on not just battery tech and how diverse it can become uh and how many options we can pull from even if you're just talking in the automotive market but also ahead of the curve in a sense of like, you know, sort of redomesticating skills and manufacturing and supply chain and stuff.

30:30Kirsten Korosec: And so they put in a lot of work, like a lot of work. I remember sitting in an office, like a half built office with them a decade ago, where, you know, they were still doing their first fundraising and, and, and they're still here and they're still raising, they're still building and finding new markets, which is just a really fascinating story, especially for someone so, you know, specific and kind of deep in the supply chain and not someone that's as well-known as a Panasonic or whoever.

30:55Sean O'Kane: Yeah, though I was impressed just seeing some of their customers, which, like you said, Panasonic, but also Mercedes, Whoop, some drone and satellite companies. And so presumably a lot of this business is driven by EVs, but also a lot of different things might need batteries.

31:10Anthony Ha: Yeah, I mean, I think that we're seeing a lot of companies do this, right? At the very beginning level, at battery materials, which is Sila, but also even automakers where they're like, okay, we're dealing with a softening EV demand. What do we do? So we're seeing companies pop up with these sort of energy storage, either marketed towards consumers or to the commercial markets. We've seen a number of large companies do that, including Redwood Materials, which is a battery materials company that has gotten into energy storage, or just serving different customers. So in the example to Sila, they're not just, you know, marketing themselves directly to an EV manufacturer, but to drone manufacturers, to your point earlier.

31:55Anthony Ha: So I think what you're seeing is the companies that do survive this, they are diversifying their customer base or starting up and spinning out new businesses.

32:07Sean O'Kane: Well, I do want to talk about one more funding round because, you know, 300 million, that's a good amount of money. But we're also going to talk about Travis Kalanick's startup and how it has raised$1.7 billion.

32:20Anthony Ha: Yeah, very exciting stuff. Sean wrote this story, and I'll hand it over to him. But I will say, so this is Adams. Adams recently bought Anthony Lewandowski, Travis Kalanick's old buddy, startup called Pronto. And there's a lot to unpack here. We probably won't get to all of it. but the sheer amount of money Warren's talking about.

32:44Kirsten Korosec: I mean, this is a company we're going to be talking about for a while, right? Like this is especially because we still don't really know what they want to do. I would say they've had two cracks at it. I mean, they quote unquote came out of stealth in March. But really, this company is essentially Cloud Kitchens. It's the ghost kitchen company that Travis has been working on since he was pushed out of Uber almost a decade ago. And, you know, the idea as best as I can realize it from the two kind of really long posts he's made about it so far is that like it is, you know, Cloud Kitchen showed that they can sort of help automate the movement of something as sensitive as even food.

33:25Kirsten Korosec: And so now they want to help automate the movement of other things. And whether that's mining equipment like with Pronto or, you know, they've talked about making a wheelbase of some kind, but not a wheelbase that will be used for robo taxis. you know beyond that you just get into gauzy nonsense frankly and so like uh you know part of me was somewhat surprised that they were able to raise 1.7 billion dollars including from uber but part of me also wasn't because you know there is a part of me that has spent you know some of the last 24 hours wondering how much of andreessen horowitz's money did they pay just to be able to like go on the posting spree they've gone on the last 24 hours of like, Travis is back, baby.

34:10Kirsten Korosec: We're backing him this. Like, it's just, it is genuinely like the only thing happening on Twitter for like 24 hours. And it's like, you know, you could probably calculate the premium of like, we wanted to be the ones to say it.

34:25Sean O'Kane: I did want to just underline two things that you said. One is that Uber is an investor in this round. So that is kind of reconnecting Travis to his old company, which obviously there was a very complicated departure and I think a lot of bad blood. And you would assume that at this point, if they were going to make an investment, that it would have to be like something that they really believed in. Although I don't know. I mean, I know also there's been a lot of, you know, turnover there. And I had the same question, Sean, about just, you know, again, it makes me feel old that, you know, 10 years ago, we talked about Unicorn becoming a sort of elite status for a startup and that if a company reached that level, and of course that was valuation, not even the amount raised, that you could be like, okay, this is a real company.

35:10Sean O'Kane: They've built a real business. And so I better take this seriously. And now, I mean, that could be the case here, but it could definitely, there's a part of me that just wonders, well, is this Travis Kalanick having a name that people want to invest in and an idea that they like, and who knows how it's going to turn out? This isn't necessarily a validation of anything, just a sign that there's a lot of excitement right now.

35:30Anthony Ha: I will say that I say this a lot, that you can have two truths. And I think Travis's name goes a long way. But and I think it's actually even almost a bigger surprise that Uber is investing in something that attached to Anthony Lewandowski because of long history that we will not get into. But, you know, there is a whole trade secrets theft trial and a lot a lot of drama there. I do have a tiny bit of insight into what Adams is doing. And I'm going to actually defend them for a moment, which is shocking, controversial. But I will say that Pronto, which is seems to be like the core piece right now, certainly the most public piece, does have real customers.

36:10Anthony Ha: They do have with big mining companies and they are expanding. And I received an email actually from Anthony that I think was meant for customers. And it sort of explains this. And basically what they say is Adams is investing heavily in, quote, industrial AI and physical automation and that Pronto is core strategic priority for Adams. So there's maybe a little bit more detail. Not much. A little bit more.

36:39Sean O'Kane: Well, you know, another company that I'm sure we're going to be hearing more from in the future. In the meantime, we are absolutely out of time. So Equity will be back next week. Thank you so much for listening. And of course, we are at EquityPod on X and Threads.