Amazon drops data center NDAs, and AI agents want your credit card

0:00Danny Crichton: This episode of Equity is brought to you by Schneider Electric. Schneider Electric, your energy technology partner.

0:05Mary Ann Azevedo: Amazon says it's done with NDAs for data center deals as community backlash continues to grow. Also, startups are getting into the personal AI agent race as one startup says it's selling$3 ,500 computers built for personal AI. And of course, we're keeping our eyes on a couple of deals of the week, including Uber's$2.3 billion move into catering. Stick around.

0:34Mary Ann Azevedo: Hello and welcome back to Equity TechCrunch's podcast about the business of startups. Today is Friday, October 9th. I'm Anthony Ha and I'm joined by TechCrunch's senior reporter, Special Projects, Sean O 'Kane and TechCrunch senior reporter, Rebecca Balan. And Rebecca, you have been on vacation. So first of all, welcome back and I'm sorry. um did you see the news that trump announced a new super intelligence force yeah i mean of course

1:02Alex Wilhelm: that happens while i'm away um but from what i from my catch-up i can tell that it feels like it's kind of a nothing burger right now it's just like plans to make more plans in the future maybe

1:12Danny Crichton: i don't know do i have that right yes that's it feels like an ai agent could solve this

1:18Alex Wilhelm: yeah i mean well it's uh it's interesting so now we're calling it super intelligence right and then did you guys see at the time of this recording, Trump posted on Truth Social that if you're calling it artificial intelligence, not super intelligence, you're you're an enemy.

1:34Mary Ann Azevedo: So although I think Elon said that SpaceX, you know, the XAI division within SpaceX isn't back and become XSI or something like that.

1:45Alex Wilhelm: Yeah, he's changed it to SpaceX.

1:47Mary Ann Azevedo: SpaceX. Yeah, rolls right off the tongue. Yeah, I mean, we talked about this a bit last week, not so much the force, but the term. And I think part of the bigger story here, besides, you know, the super intelligence force, which is unlikely to do a whole lot, is just the fact that the kind of outcry, the backlash towards AI, which I think comes from a lot of different corners, has gotten loud enough that the Trump administration feels like it has to kind of do something. thing. And so it's kind of doing this kind of weird rebranding, pretending, kind of nodding towards safety exercise.

2:28Danny Crichton: Listen, a lot of this is artifice. The super intelligence force is like more shiny titles for people to add to their LinkedIn or whatever. It's like, okay, cool.

2:41Alex Wilhelm: Yeah. It feels like it's like part and parcel of this great rebranding we're seeing about AI because everyone's starting to freak out about it. So they're like, no, no, don't get too scared. Like it's not artificial. It's super intelligence. And here, look at these cute little AI personal agents that are going to help you get money back when they look through your email, which we'll talk about later. But it's interesting. And then I guess also this week at the same time, I don't know if this is how related this is to the super intelligence force, but there was a science summit, right, where they announced$6 billion in initiatives for using AI in science, I guess.

3:16Alex Wilhelm: That's, you know, 2.4 billion in tools and compute credits from companies like NVIDIA, AMD, OpenAI, Anthropic and Google. What do you guys make of that? Yeah, I was just reading the announcement before we started recording and it felt like, first of all, just sort of the very puffed up language of the announcement.

3:33Mary Ann Azevedo: Like this is the greatest investment in science in America's history, which, you know, I think it's fair to say that the Trump administration has not been the greatest friend to science in American history. But I'm sure we're going to continue talking about a lot of these bigger issues with AI. In fact, I mean, this is also going to thread through the rest of the episode. Spoiler. But there's probably going to be more developments just in the next few days. And so just as a last final, final reminder, Disrupt is next week as we record this. We're going to have a live recording of Equity on Tuesday at 9 a.m.

4:09Mary Ann Azevedo: And if you use the code Equity25, you will get a 25 % off a ticket. So that's Equity25. Let's keep talking about AI and the AI backlash and specifically now data centers, which I think have been kind of one of the main focuses of, you know, community resistance to AI. And Amazon put out this blog post at the end of last week, basically. I mean, it was really trying to sort of make the case that data centers are great. And then kind of buried in there was also this announcement that they're no longer going to be using NDAs in the process of their negotiations with local governments. Sean, what did you make of this?

4:51Mary Ann Azevedo: I thought it was interesting.

4:52Danny Crichton: First off, good catching this. It's an interesting thing that it was sort of buried in the blog post and part of a larger story that Amazon's clearly trying to tell. But I think it's really important. I mean, I guess I understand why they weren't putting it in the foreground. But to me, this is at the root of so many of the problems that the tech industry currently faces when it comes to AI broadly, but data centers in particular. There are so many things that could be said about whether or not people should be worried about the effect that data centers have on their property value, on their electricity bills, on their water usage in the area, and whether or not those things are real problems, inflated problems, like et cetera, et cetera.

5:39Danny Crichton: I think so much of that just really goes back to the fact that a lot of these projects are being negotiated essentially in secret. Sometimes they're being negotiated with it, known that it's a data center, but just not knowing who's actually going to use it or occupy it at any point. And to me, like this is, I mean, this is a longstanding issue with the tech industry, right? I always go back to the mid-2010s when Uber was expanding really fast. Uber was one of the companies that really used this tactic a ton when it came to working with local governments. In particular, I remember when I was working at The Verge at the time, we had a freelancer write a story about a city outside of Orlando where Uber was trying to negotiate basically tax subsidies to subsidize rides for people to use public transit.

6:31Danny Crichton: after the Uber trip. And the whole thing was negotiated in secret. And not only that, which was frustrating on its face, but also like there were all these because of the secrecy, you know, you could just see Uber getting really comfortable with asking for a lot of other stuff too, because they figured it would never be known, like literally asking the city not to put Uber's logo on like trash or even on food because like it could be sort of related to being thrown away or like winding up in a toilet. It's just insane stuff. So like there needs to be more of this. I'm glad Amazon's doing this.

7:05Danny Crichton: We'll see if it actually does have any positive effect. But, you know, people are pretty entrenched right now.

7:10Alex Wilhelm: I'm curious about what effect this will have and whether it will lead to communities successfully delaying or killing any infrastructure that the companies need to build, right? Like I think from what I've heard from some people I've spoken to who deal with data centers kind of every day, a lot of these moratoriums that are getting, you know, passed, and there are a significant number of them, including I think there's one recently in San Francisco, right, which is pretty ironic, but they're only for like a year or two years. But these data centers aren't coming online anyway for the next two, three, four, five years, like all the all of the build outs are, are going to be massively delayed for a number of reasons from zoning to funding.

7:51Alex Wilhelm: You know, of course, if the pushback keeps going, then it might have an effect. But I often wonder just how much of an effect this political pushback is having on this?

8:00Mary Ann Azevedo: I mean, you know, yeah, it's certainly worth noting that I think the moratorium I'm most familiar with is the one in New York where you and I live, Rebecca, and I believe that's a one year moratorium and that's on permits for large projects. So obviously that's already there's, you can see that there's some wiggle room within that. And often they're sort of framed as, hey, we need to take, it's not like we think this is bad, let's not do it. It's, we need to take the time to study this, which gives them a lot of room to say later on, actually, we've decided this is great. We love it. But you can tell that the people trying to build these data centers are worried, which is why you have, you know, these kind of unhinged tweets from people like Trump or David Sachs.

8:42Mary Ann Azevedo: Only time will tell in terms of like what, how long and how deep that resistance is. But I do think they are worried. It's also noteworthy that I think Microsoft earlier this year made a similar announcement about not using NDAs. You know, there are all these other criticisms, right? I don't think that getting rid of the NDAs automatically is gonna make the people who opposed these data centers be like, great, let's do it, I'm in. But I think a lot of that kind of, just the beginning of that conversation is like, well, we don't even know what the heck you're doing because you've basically like negotiated all this stuff in secret.

9:18Mary Ann Azevedo: So it does seem like a good first step to winning people over.

9:23Danny Crichton: I mean, this is the larger problem here is just a communication problem, right? This is a problem I think that goes across the entire tech industry. But it's especially acute now because it's the, you know, we're living in the era of going direct and you don't need to talk to the media. The media is dead, et cetera. And I'm not like trying to beat that that horse because like we're in the media and think we're still relevant. But I think we've seen through a lot of the controversy and backlash to AI and data centers that the industry just does a really poor job explaining itself and that they are obviously and constantly frustrated with the fact that most people can't envision a world in which this stuff is useful for them.

10:07Danny Crichton: And that's in part because a lot of times the ability is not there and in part because they're just not explaining it well. I wrote a story last week for us about how it's been a year since we've really heard Tesla beating its own drum about building towards what it originally was, quote, sustainable abundance and is now amazing abundance as its mission statement. And it's just wild to me that we're a year into that and the company still doesn't have a very good definition of it, especially considering that like they released this whole sort of, you know, multi page PDF laying it out when they announced this.

10:43Danny Crichton: And even Tesla's biggest fans criticized Elon Musk and Tesla for how unspecific it was because it was I mean, it read like LLM nonsense. And they just they still don't care to go through and explain this to people about like where this. And, you know, and I think that's crazy to me because we are starting to see capabilities here like open AI, you know, kind of like one shotting like 500 math problems this week in different ways. Like there are things that these models are capable of now that you could probably try to draw a line to people. But, you know, I think the the fact that the abilities weren't there, that the communication wasn't there and that initially a lot of this stuff was really shoved down our throats, co-pilot.

11:29Danny Crichton: You know, it's just there's they've got to really kind of talk themselves out of it.

11:34Mary Ann Azevedo: Yeah, I mean, one of the things that this whole thing has kind of made me think about is just the narrative and this sense that for a while, it really felt like it was just, like you said, kind of being pushed down our throats as this idea of this is inevitable, this being sort of, you know, this kind of AI driven future and get on board, or you're just going to be left behind. And I think because, you know, obviously that future is still kind of barreling ahead in a lot of ways. But in a few key ways, there have been these obstacles. I think what I've really liked about that is that this sense of no, like you actually have to make the case for it.

12:06Mary Ann Azevedo: You can't just say this is the future. Shut up. Although I think that's actually what, you know, again, the Trump administration and other folks are trying to do is just be like China, China, China, China, China. Don't argue with me. Yeah. And then specifically about the yeah, the Tesla and abundance thing. Sean, yeah, I really liked your story. Although what was shocking to me is not so much that they haven't come up with a definition of abundance, but that that was a promise that they were making in the first place. That is wild and I think speaks to how strange our relationship to Tesla and particularly the people who are invested and kind of like ride or die for Elon, that it's not about like, is this company going to sell a lot of cars?

12:44Mary Ann Azevedo: It's really about sort of like this vision for remaking society, or at least that's kind of what they're being sold.

12:51Alex Wilhelm: Yeah, it's always been the vision.

12:54Danny Crichton: Yeah, it's like we're going to kill money.

12:55Alex Wilhelm: Yeah, it's always been that. Whenever I talk to people who back Elon no matter what, and I'm like, but the numbers. And they're like, no, no, no, you don't understand. It's his vision for the future. And I'm like, right, yeah, cool, cool, cool, cool, cool, cool. The future is now, right? I mean, there's all these companies now promising for, you know, to give us. they've been talking about personal assistance and how AI is going to help you with your everyday tasks for a while. And now some of that's starting to come to fruition. And you're, rather than the broad pushback people have been giving to LLMs for, you know, AI slop writing and stuff, people are like, oh, wait, it can find me money in my inbox.

13:32Alex Wilhelm: It can book my flights for me. Oh, wait, okay. Let me see about that. So I don't know how good any of it is yet. I'm testing out a few. I don't know about what you guys think about it, though.

13:41Mary Ann Azevedo: What moves our world forward? Energy. History has been shaped by it, revolutions won with it, and progress dependent on it. For 190 years, Schneider Electric has been a leading force in this story, creating the technologies that harness energy and transform the competitive landscape. And today, in the dawning era of energy and industrial intelligence, Schneider is helping customers build more efficient, resilient, and sustainable operations across every sector, from data centers to homes, from buildings to industry. Schneider Electric, your energy technology partner. Discover more at se.com. Yeah, I mean, last week, actually, Sean was, I can't remember if it was last week or the week before Sean was telling us about that Muse did actually find some money for him.

14:28Mary Ann Azevedo: But he wasn't as grateful as I would have thought. He was like, that's cool, but like, what have you done for me lately? Wait, but how much money?

14:34Alex Wilhelm: I didn't hear it. Yeah, let's really get into it.

14:38Danny Crichton: It found me a good chunk of change in some unclaimed property in Texas that, you know, it was one of those things that's, you know, I should be, I should have thought to look at that myself. And it did that for me. And that was fantastic. But that's like a one time thing that, you know, I don't have the ability to do that again. Right. Like, it's just, it's sort of, and, you know, I think now we're talking about agents. Like this is the first real sort of stake in the ground that I think we've seen this industry place as far as trying to correct what I was just talking about and communicate to people what might be useful about this technology that goes beyond it being better Google or like psychosis inducer.

15:29Danny Crichton: And I still think they're struggling with it. Right. Like, I don't know about you guys. Like, I understand why so many people in Silicon Valley think that agent stuff is like, is it for people who are not using it at an enterprise level. But for most people, I feel like, you know, from my view, they'll have this a similar experience to me of like, oh, I can tick off a couple of these things that it's suggesting to me right out the gate. that's helpful. But like, will there be enough of a business around the more passive uses of something like Muse where, you know, it's not commercial and it's really more about like finding information for you or something like that?

16:09Danny Crichton: I don't know.

16:10Mary Ann Azevedo: Well, I also think that could be a good segue into our second big theme, which is, of course, is AI related because it's 2026. But it's basically that there's also, you know, a number of different startups trying to take advantage of this as well, kind of figure out where the opportunities are that haven't been claimed by the open AIs and the anthropics. And we can kind of talk about whichever one of these recent companies interest you, but maybe we could start with Ghost, which is a startup that got written up on TechCrunch. And from what I saw, at least, the story really seemed to blow up for us.

16:44Mary Ann Azevedo: It really seemed to strike a chord. And this is a startup that is building a 3 ,499 computer for personal AI.

16:52Alex Wilhelm: Yeah. So it's$3 ,500 for a computer. This is core. And the entire point is to run its AI agenda for you. So it's got an NVIDIA GPU in there. It's AI models already installed. I think they have their own software browser file system and it can run continuously without needing the cloud. So yeah, I think, you know, how is this different from a MacBook mini? I don't know. I was like, is this just an external hard drive with a little bit of extra? You still need a phone plus the app to like make this thing work. And then I imagine one day they'll, they'll be like, well, you can't have two devices.

17:25Alex Wilhelm: Let's just put it all on one. And then you've just what, recreated like the phone and the computer. I just, yeah, it's interesting.

17:30Danny Crichton: I mean, it's a, I think people like it because it's hardware and people like hardware and dedicated hardware. We saw. Hardware is so hard. It is hard, but like people like the ideas that go into it. It's, you know, an interesting design. It looks like a, you know, kind of a PS5 meets like the monolith. From 2001, A Space Odyssey. But again, we run into a similar problem here where one of the people that's working on this said that, this is an example given in our story, it's supposed to, maybe it will proactively send you a notification that you might be getting sick because it sees your resting heart rate is elevated, sees from computer history that you are up late working on a project, and has seasonal context that it is flu season in San Francisco.

18:14Danny Crichton: It's like, do we need a$3 ,500 box to tell us that? Like some people I think do like some people are looking for that thing that like lets them externalize what they're thinking sort of subconsciously. And I not to say there are other uses of this that won't be useful. But, you know, to me, it's sort of like we're still we're still so early in the like app only phase of agents and having it on your phone. and we haven't really found a bunch of traction with people, you know, outside of this sort of Silicon Valley set. I mean, this is clearly targeted at them. And I know that there are a bunch of people like this is running a bunch of open models like Quinn.

18:55Danny Crichton: And like, I know that there are people like have been scrambling to put together their own setups in their apartments or houses that resemble something like this without the polish. So I'm sure that they will find a market for this among the, you know, the sort of industry folks.

19:11Mary Ann Azevedo: Yeah, my take was that this is definitely not mass market product. Like normal people are not going to spend$3 ,500 for an AI computer that at least from, you know, it seemed like on our coverage, we were trying to ask them some questions just about like specs and things. And we're not getting a lot of detailed answers. It was just sort of like, look, AI computer. You know, I think there is an audience for that. I mean, and, you know, most of them live in Silicon Valley and spend a lot of time on X and are very excited about this. I, you know, presumably, you know, you raise, I forget exactly, I think it was like$11 million.

19:47Mary Ann Azevedo: Not a huge round, but like at that point, you have to at some point think that there's going to be a bigger market than, you know, hardcore AI evangelists in Silicon Valley.

19:58Alex Wilhelm: Well, you know, it's not, I think that one thing that we're seeing, because there's a few other startups that we'll mention that are playing in this personal AI assistant space. And one like common thread throughout them all, for the most part, is what I see is, you know, being able to run something locally on your own device and also having this like privacy focused thing, right? Because it's like these apps, these agents will not work unless they have like all of your access, right? Like, you know, I don't know if either of you have ever been an assistant. I was an assistant or an executive assistant.

20:30Alex Wilhelm: I had documents of, you know, what my, you know, boss liked, what her constant like to-go orders were, like where she liked to sit on a flight. I knew like so like honestly, this was all in handover that I passed over to someone else. I was the agent and I had her, you know, SkyMiles and her credit card. I had newer kids freaking social security net. Right. Like I had all of it. Right. And so I think that this is, you know, if you're going to give that to an agent, then you're going to need some kind of assurances of privacy. And it's difficult because it's like, on the one hand, do you really want to give all of that to Meta?

21:08Alex Wilhelm: Right. Do you really want to do that to give it to Muse? Do you want to give all that data to Muse? On the other hand, do you want it to go to a company that has the infrastructure set up to protect your data versus a one-year-old, one-month-old startup that's using like a shared cloud, right? So it's interesting. I mean, some others like Tab, they just emerged from Stealth at$300 million valuation. They haven't disclosed their funding info, but they're also kind of focused on that. And one of the excellent, this was written by Dom, one of our reporters, excellent kicker quote, I thought, capability is table stakes, trust is the product, which I thought was pretty cool.

21:46Mary Ann Azevedo: Yeah. And it did seem like trust was a big theme in a lot of these startups now. There's Underdog, which is also supposed to be kind of emphasizing privacy because it runs entirely locally, which I'm sort of curious, like what that actually looks like, how powerful a computer you have, how powerful the model can actually be if it's just running entirely locally.

22:07Alex Wilhelm: Maybe they'll team them up with Core.

22:09Mary Ann Azevedo: Yeah, exactly. And then there is Hark, which is also focused on privacy. So that does seem to be a recurring theme. You know, I would say that, you know, certainly, personally, that that idea of either giving an agent access to my hard drive or my credit card. I mean, I'm, you know, and I'm probably a little further behind most of our listeners, but like, I'm not ready to do that yet. I'm not going to do that. and then part of the challenge then is that seems to be where they think a lot of the kind of value is right oh man once you do that like all these amazing things are going to happen once in a while we'll delete a critical file or buy something really expensive that you don't want but it's fine don't worry about it um so uh i yeah i i'm not very confident they're going to get me over

22:53Danny Crichton: the chasm at least yeah i mean i think rebecca brings up the most salient point here like from where we stand with the rollout of this stuff which is everybody's kind of stuck between a rock in a hard place, right? To get more out of these agents in the way that these companies want you to think they're the top capabilities of what they're able to do, you have to give them so much. And you either have to trust a company that has that infrastructure and to some extent, regulatory oversight, but a bad history of letting that data get misused in some way, or a company that only just started existing a few weeks ago.

23:37Danny Crichton: And it's just like that's not a decision that I think most people want to make right now. The other thing is like I know with Underdog in particular, I was their whole thing is not only it being like local and trust based and and keeping it. They're also changing the business model around it. And I think we're seeing elements of this with Muse coming from Meta. But the idea being that like they don't want to use the information about you to target ads about you or anything like that. It's really more about taking small cuts and working, you know, in particular with Stripe, which is, I think, you know, one of the causes is an investor in Underdog to take a cut of transactions that you're going to have this agent do on your behalf through Stripe's sort of processing, which is interesting.

24:24Danny Crichton: and reassuring to some extent that they don't want to use or abuse all that information about you. But then again, if that's your business model, your agent that you're building is going to be inherently incentivized to be pushing me to be buying stuff all the time because you want to be making the money off of those transactions. And I don't know that that's what I want to use agents for. We do not have as much money as coders in Silicon Valley, right? It's just not the like again there's this skew of like what all the incentives are sort of from step one and

25:00Alex Wilhelm: so i good luck and i'm also i'm also like okay good luck trying to make a business model that doesn't include advertising at this stage like this is what if like everyone tries to not do advertising and then they always have to do it because like we're seeing this with open ai because it's so expensive like i'm hearing i'm hearing from people that they're these models i mean it's agentic, right? Like they're running like hundreds of thousands of tokens for like one simple task or like not even a task. And so it's just, it feels like it's going to get really expensive for these companies. I question whether they are a little more than just like, again, wrappers for agents that aren't their own.

25:36Alex Wilhelm: Like, I'm not sure. I don't think any of them are building their own models. I would assume they're not. They're probably just using like anything off the shelf, anything that's open. And so, yeah, I think that things are going to get really expensive for them. And I don't know that just like a little take rate off a Stripe is going to be enough for, you know, getting a reaching any form of profitability. But then I also wanted to mention before we move on from this topic, I think it's interesting. The timing of this all is really ironic, right? It's like just in like, we're still in the weeks, we're still all recovering from the opening eye hugging face, the rogue agents, like the idea that, you know, agents can perform activities that could be catastrophic that you really don't want them to perform.

26:14Alex Wilhelm: And then they're like, but here, like, have an agent take over your personal life. Like, what? Like, that's it seemed like the riskiest time to do that when we don't know that they're aligned. These companies, they're selling these privacy solutions that they simply cannot guarantee because they don't own the models. They don't know what the alignment is. Right. And it just it feels like it feels smart to me. Like the timing actually feels in an evil genius way, kind of smart, because we're once we get to a point of like peak convenience, I think a lot of the people who are scared of AI and saying regulate it, like take it down, stop, are going to say, yeah, it's all right.

26:51Alex Wilhelm: Like it's what's made my life really easy. So I guess that's fine.

26:55Mary Ann Azevedo: Yeah, I guess we'll see. I mean, one other thing to mention on this topic is also that when we talk about trust, it's not just about winning over the trust of consumers or even of enterprises, but, you know, that there are these partners that also need to, quote unquote, work with the agents in some way as well. And so we've had some stories in the last week about, you know, Apple, like limiting how it provides disk access to, you know, AI agents. And then also a number of websites that are now also making it a little bit harder for, or I don't know if they're making it more difficult or just those people are discovering those obstacles more that like, you know, people are trying to have Muse go and buy plane tickets for them.

27:34And United is like, we, no, we don't allow that.

27:37Mary Ann Azevedo: That's not something we support. Um, and so I think that probably there's going to be some level of change on that, but, um, I think it's also fair for, you know, the United's of the world be like, Hey, like you don't get just sort of unfettered access to like buy plane tickets on our website. Half of them are going to like, end up being like refunds because people like did not want to do that. And so I think there is going to have to be this earning of trust, this negotiation period.

28:04Alex Wilhelm: I was just going to say Amazon did this. That's it. Amazon did this with like perplexity and stuff. They were like, no, you guys cannot come like use your agents to come and shop on our platform. Everyone's got to use Rufus or now it's Alexa for shopping. But anyway, we do need to move on. Right.

28:19Mary Ann Azevedo: But no, this is a great reminder, of course, that like safety is important. Safety is often sometimes an excuse for other kinds of protective behavior. But let's talk about some other startups. First up, we have Lambda, which I think is one of the NeoCloud startups that we've talked about before. Rebecca, why don't you tell us what's going on with them?

28:39Alex Wilhelm: Yes, this is a NeoCloud computing startup. This is reportedly raising. So the Wall Street Journal had this scoop. This would be a$4 billion, up to$4 billion round at a$14.5 billion pre-money valuation. And this could be their last private round before their 2027 planned IPO. I myself am skeptical that they will make it to that IPO because they were meant to IPO this year. And I think even at the end of 2025. So, you know, this could be one of those like buying time situations. But yeah, it's it's quite the raise.

29:15Danny Crichton: I think especially companies like this, but broadly speaking, you know, we talked about last week or a polling its IPO. But I think we're waiting to see how the anthropic one goes to really know how many of these companies are going to go through with this. And sort of conversely, it seems like OpenAI is about to close a$30 billion funding round. And if there's still that much liquidity in the private markets, then those two things could really incentivize people away from the IPO market next year.

29:49Mary Ann Azevedo: Yeah, I'm also curious about sort of what the appetite will be specifically for neocloud companies, because I think on the one hand, you know, they have like revenue and real revenue in a way that, you know, some of these other AI companies do not. But then, you know, what are the long term prospects for that? That, you know, obviously there's just like intense data center build out. I mean, with some resistance and some slowdown as well. So maybe a little TBD on that. But potentially, you know, they're selling something that's really valuable now, but might not be in a couple of years.

30:18Alex Wilhelm: Gosh, you hit the nail on the head. So I think in the short term, I think these companies are, there's a lot of frothy appetite for them because they have the capacity that everyone needs, right? But, you know, in the long term, it's hard because, so the journal had, you know, reviewed a letter to investors that showed the backlog grew from 15 billion in June to 50 billion in September. That looks like a big deal. But 35 billion of that appears to have just come from one customer, which is Anthropic, which signed a deal with Lambda in late August. So a lot of this is based off of like a lot of the neoclouds have the unhappy problem of having like one or two major customers that they're basing everything on.

30:59Alex Wilhelm: It's not revenue, it's backlog. Like that money's not coming in for a long time. And those are contracts that could be canceled, right? If the demand doesn't show up for whatever reason, right? So yeah, it seems like potentially risky there. And then I just also want to float that Lambda is potentially raising this equity round, but that's on top of something like four separate debt raises in the last few months or something, or the last year. The data center builders are build outs are largely funded by debt. And you're seeing this kind of trend, or I'm noticing this trend among neoclouds as they prepare to go public, where they are raising an equity round that makes them look legit.

31:43Alex Wilhelm: And then they're raising a bunch of debt to help fund the build out. You're seeing this with Nscale, which also recently raised, they raised, I think, like$2 billion earlier this year. And then they've put on another like two or three rounds of debt, including one that TechCruncher put it on last week. So yeah, there's a lot of moving parts here. A lot could go wrong.

32:04Mary Ann Azevedo: Yeah, we'll keep an eye on that. In the meantime, we do have one final deal that I'm excited to say that as far as I know, it does not have an AI angle. And that is Uber getting into catering. Sean, what's going on with that?

32:16Danny Crichton: I can make it AI if you want. I won't. No, please. I actually, yeah, I mean, no, I won't. Uber is acquiring a company called Easy Cater for$2.3 billion in cold, hard cash. Good for the catering business. I'm sure they use some AI because they are not like a caterer. They don't come and put the food on your sort of six foot table. They are like a marketplace kind of matcher for catering companies that do actually make the food and businesses that want to buy it. The idea here is basically Uber is making this acquisition so that it can, I mean, Uber has been trying to grow not just its main business, but Uber Eats and has been doing it.

33:00Danny Crichton: But it's also been doing both of those through a lot of acquisitions and partnerships and investments. And so this is one way to grow Uber Eats into a market that Uber is kind of not really in right now, which is sort of like office catering, event catering. You know, the way that Dara Khazrashaya pitched it in the press release about the acquisition is really about. And I think if you read between the lines here, which is what I'm about to do, I think you have a lot of restaurants around Uber Eats and other services. you know, DoorDash, whatever, that don't necessarily always feel like they're getting the best, you know, sort of end of the stick and getting like kind of pushed around a little bit by the platforms and its incentives and the cuts that it takes and and sort of just how demanding it is to be in the food delivery business when you're already a low margin restaurant.

33:49Danny Crichton: And so this is a way to increase potentially the amount of, you know, it gives these restaurants another avenue for where their food can go. Right. Like you might now be able to provide food for catering setups in a way that that was not previously accessible to you. So, you know, my question here is sort of like whether or not this changes, you know, how much does this change how a restaurant thinks about its business? Does it make it something that is, you know, makes it a more viable business than it traditionally is? because it's usually a really tough business? Or is this really going to just kind of be, you know, a little bit of extra, a little extra coin for the sort of commercial kitchens that are already out there?

34:31Danny Crichton: And I should say real quick, like, it's a cool, it's a cool like exit story. I think like I was looking back, we wrote about this company way back in like 2014. They were founded in 2007 and bootstrapped for like seven years before they even did their first race. So to get to a point where you're doing an all cash$2 billion exit, like 15, 20 years later is a very different story than what we see these days with a lot of the AI startups.

34:55Mary Ann Azevedo: Yeah, that's pretty much what I was going to say as well, is that it kind of, the story just kind of cast me back to like 10 or 15 years ago when there were a lot of different catering startups that were again, sort of like, we're catering, but we're not a catering business. We're like matchmaking, we're a marketplace. And you know, that excitement is not, has not sort of carried over. So it was a very pleasant surprise to me that not only were they still around, not only do they sell, but they sold for like, like you said,$2.3 billion.

35:20Alex Wilhelm: Uber loves buying companies. They love it.

35:23Danny Crichton: I mean, not to go too deep into this, right, but like Dara Kozarsahi used to run Expedia before he came in to run Uber. And I think you think about that and you look at the way that he's oriented Uber's business on all sides of it. I think it just makes a lot of sense that he sees a lot of value in being the place to go for not just what it's known for, but for having a lot of options from other companies and other services. And he's certainly grown the business that way and made it profitable for the first time ever. So, yeah.

35:54Alex Wilhelm: And it's how he gets that stickiness. Right. I wrote about this a few years ago, the animazonification of Uber. Right. Just like feeding into the different platforms until, you know, Uber is Uber is the thing that moves people and goods. Right. Well, I guess that's a fine place to end it. We are just about out of time. Equity will be back next week. Until then, you can find Equity under the handle at EquityPod on XN Threads. Thanks for listening, and we will talk to you next time.