The DOJ is investigating a16z. What does this mean for venture capital?

0:00This episode of Equity is brought to you by Schneider Electric. Schneider Electric, advancing energy tech. The DOJ is investigating Andreessen Horowitz over holding board seats at competing companies. Also this week, we're seeing what's happening to AI companies that aren't named Anthropic, OpenAI, or NVIDIA. And we're keeping an eye on a few deals this week, including the$7.5 billion acquisition of an AI model routing startup that calls itself the Stripe for AI. So stick around.

0:37Hello, and welcome back to Equity, TechCrunch's flagship podcast about the business of startups. Today is Friday, August 21st. 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. I hope you two are great. And I'm wondering if you've seen our news about our startup Battlefield 200 picks. Yeah, I saw the announcement of the 200, which we're going to have 200 companies in the startup Battlefield, 20 of those companies will actually be competing on stage. But this is like a recent thing we've done to kind of increase the participation, you know, just get more startups involved, grow the community, which I think has gone really well.

1:27And I'm really excited to see them at Disrupt in October. I love this day and like this time of year. I've only done Disrupt a few times since I started working here, but it's so much fun. And it's like the complete antidote to those situations that I think we've all been in, like CES, where you go into a room, you know, full of cocktail tables and everybody has their little brochures and stuff. But, you know, half of them have paid to be there. And, you know, what they brought is is mostly dreck. And, you know, it's fine. It happens. But that is not the case here. You know, that we went from thousands of startups who applied this year, an amazing crop with some really fascinating ideas down to 200.

2:07And it's just so much fun to to now get into this sprint goes from 200 to 20 to one in two months from now. So I'm excited. Yeah, a lot of people don't realize this when you go to disrupt at the Moscone Center in San Francisco. You see these 200 startups and some might think that they paid to be there. But this is a very different process. It's an incredibly competitive application process. us. And then from those 200, 20 will get to go on stage, which is another like really exciting moment when we introduce those companies. I do not know who those companies are yet. Just FYI, no one asked me.

2:47I don't know, but I cannot wait to find out. We should give a special shout out to Isabel Johanesson, who is aside from you probably have seen her face and heard her voice on Build Mode, our other podcast. But she is working behind the scenes, leading the effort on startup Battlefield. So thank you, Isabel. Also, if you want to go to Disrupt, and you absolutely should, we have a special deal. You can sign up for a discounted ticket using the code equity. But we should maybe talk about news this week. And there's a big one. Yeah, absolutely. There was this story, I think kind of started with the report and Bloomberg around the firm Andresen Horowitz, which I assume all of our listeners or 99 % of our listeners are very familiar with, is apparently being investigated by the Department of Justice, which I mean, I literally we put in the headline that VCs are baffled by this.

3:46Were you guys similarly baffled? Yeah. Yes. One answer. But, you know, I think that you bring some interesting perspective to this, Sandhiny, because you actually worked at a VC firm, whereas Sean and I have never been inside the confines of, you know, the VC world. We've only reported on it. This is true. So longtime equity listeners will know that I did spend a couple of years working at an early stage VC firm, a much, much smaller firm than Andresen Horowitz, did not, you know, do those kinds of giant later stage investments. So like kind of as different as you can be while still technically being in the same industry.

4:27But it did color my response when I was reading this article, which is essentially about these board seats that Andreessen Horowitz holds and the idea that they're essentially have board seats in some companies that have become competitors. and yeah, I guess the short version is just that like, it was really surprising to me as apparently it was to a number of other VCs because there is apparently, and again, I'm not a lawyer, I was not on the legal team of this VC firm, but there is obviously an understanding and apparently laws around the idea that you should not be on boards of competing startups, but this is not something that is generally enforced very closely.

5:11It's understood that as an ethical matter, founders don't feel great if you're on the board of their biggest competitor. But also, startups evolve. They're not always going to be, and I think that was true in this case, is that you invest in a startup doing one thing, and then say the AI boom happens, and suddenly they're doing something completely different. And so the idea that you would have a year-long DOJ investigation into this, which again, we don't really know what the results are. There's a lot of questions about this, but it just seems very strange. In this case, Ben Horowitz sits on the Databricks board.

5:46Partner Martin Casado sits on Fivetran board. And to your point, especially in this AI-driven boom cycle, a lot of companies are changing what they're doing and either to jump into the AI space or to take advantage of specific subcategories within it and a company the size of Andreessen, which makes so many investments and is on a lot of board seats. You can see how this would happen. To me, what was interesting, and Sean, I wonder if you have an opinion on this, is of all the things that the DOJ would focus on in terms of level of importance, why does this one rise to the top? I'm just excited we've got another chance for disruption here.

6:35I mean, we could create a startup that is just going to put an AI on your board and there are no conflicts of interest. And, you know, here we go. Let's do it. No, you're right. I mean, like, it's weird for a number of reasons. And it was, you know, when I first saw the headline, I certainly piqued my interest because I wanted to know what it was that they were looking at, especially given we should back up just a real quick second. You know, Bloomberg reported that this has been going on for nearly a year. So this started under the Trump administration. The people who run Andreessen Horowitz are very friendly with the Trump administration involved in the Trump administration in some ways, sitting on some councils and things like that.

7:15And so, you know, for as much rhetoric as the Trump administration was sort of putting out there when it was still incoming to the second administration about being antitrust forward and, you know, sort of fighting against the big forces of consolidation or whatever that really hasn't borne out. I mean, they settled with Live Nation. They didn't break up Ticketmaster. We could spend all day talking about how like that really was not, it was a pretty hollow promise. And so it's, it's weird in some sense. I mean, listen, the Justice Department should not be, uh, you know, sort of a tool for the president to just direct at enemies or friends or whoever.

7:54Uh, but it's just interesting that this is, uh, a bridge they were willing to cross knowing how close they are with uh with this administration and you know i've reported on some things that andreason horowitz have done that you know made me wonder if that was going to be part of this like you know there two years ago they published a story about how uh you know ben horowitz was sort of like personally making connections between the startups that andreason horowitz backs and like local police department in las vegas and you know things that have maybe more of an anti-competitive flavor to it than this, which, like you've said, is is maybe a bit more by chance because of the way that these companies evolved and wound up competing against each other.

8:41So, yeah, weird for a number of reasons. Certainly doesn't seem like it's something that Andreessen Horowitz feels like such an overreach that we have seen them complaining about it on Twitter like they were during the Biden era where every little policy change, especially related to crypto, generated a day's worth of posting. We haven't really seen that here. And so maybe it's all going to be copacetic in the end. Yeah, it's really reminds me of that whole news cycle back in 2024 when, you know, Andreessen Horowitz very kind of vocally came out in support of the Trump administration, but not not then the administration, but the re-election campaign and how at least by everything that's public facing it, you would think that if this was going to be a big deal, that this could potentially be a fracture between them, but that at least publicly hasn't been the case.

9:35And to Sean's other point about the DOJ, without getting too deeply into the politics of it, I think, again, anyone who's been reading the news knows the DOJ is in the news a lot. There's a lot of turmoil there. There's a lot of questions about sort of how politicized the office has or hasn't become, which again, just makes it very surprising and strange that there There has been this long investigation into an ostensible ally of the Trump administration. And then the last thing I wanted to say for now is also just that length of the investigation is very surprising. And, you know, if it was just about like, well, we don't think you should be on these two board seats.

10:13I mean, there's not that much to investigate. They're the guests. They're not. You should just tell them, don't do that. Or, you know, here's what we need you to do instead. So I think what that suggests, right, is there must be a lot that we don't know. I mean, sometimes I worry that, you know, people assume that there's more to things than meets the eye. And that's not the case. But in this case, it feels like there has to be right. There has to be some other more serious allegation of something going on. Otherwise, what is there to investigate for that long? Well, I think that you can have two truths, meaning you can have a slow, arduous process because of an inefficient DOJ.

10:48and also you can have some sort of like smoking gun or bigger issue and we don't want to get too speculative because and make assumptions but i do think that their reaction and how quiet they've been and perhaps they're listening to their lawyers perhaps that there is something a little bit um bigger here my question is is how does this now affect other vc firms are they taking notice or is this considered a weird outlier and they're just going to proceed as normal and continue to take board seats and not worry too much about potential competition between boards down the line? I mean, I think that's a good question.

11:28Like if this is really something that is such a concern with inside the antitrust division of the DOJ, then maybe this is a way for them to sort of, uh how do I best put it like set the example that then those smaller firms would follow if that's what you know that the goal is right like instead of having to try to go after you know if you perceive this as a sort of antitrust violation going after all these other smaller firms for doing something like this you go after Andreessen Horowitz and you set the example And then, you know, maybe that puts these other people, you know, at in more of a wary, you know, cautious position.

12:10And so I could see that being the case. I think the other thing to think about here too is like this administration and the agencies that sort of, you know, work for it and next to it have really backed off on public company prosecution in very explicit ways. the SEC and the DOJ have both kind of said that like that sort of public company investigations and things like that are just not a priority they would rather go after individuals obviously we're talking about Andreessen Horowitz as a company here um but they you know it just makes me wonder if this is in some ways some sort of side effect of how the priorities have shifted where if you're not going after corporate prosecutions like you know you're backing off on guilty pleas that Boeing has entered.

12:59And again, like settling with Live Nation and really backing off some of those kind of Fortune 500 type companies, maybe one of the side effects is you wind up paying a bit more attention to stuff like this in the meantime. One thing I did want to quickly acknowledge is that I think, despite the fact that I think all of us and many of the VCs that other TechCrunch reporters have spoken to find this to be kind of strange, like it is a real issue in the sense that I've certainly spoken to founders about, you know, hey, like this firm, I don't like the fact that this firm, you know, has a seat on my biggest competitor.

13:32Now it seems like they're kind of picking this competitor and they're still on my board. I don't like that. I think in general, most of those times were not saying, oh, well, then the DOJ should step in in that situation. But it's not like a totally made up issue. It's just strange. The circumstances around this are very strange. Well, that it would elevate to, you know, a year long investigation and some sort of potential action from the DOJ, I think, is the surprising part. Exactly. I do want to shift gears a little bit. And, you know, on this show, we talk a ton about Anthropic and OpenAI and NVIDIA.

14:04You've heard about those companies, right? But there are other AI companies out there. And today I thought it'd be interesting to talk about because we've had so many interesting deals. Like what is happening with these kind of next level down, you know, not necessarily a performance thing. I'm not rating these companies, But in terms of, you know, their valuation size, capacity to to, you know, buy up companies and stuff like that. What are these kind of mid tier companies doing right now? And there's some interesting movements and shuffling around that is happening and some consolidation. Anthony, the deal that comes to mind that sort of got me thinking about this was this open router acquisitions.

14:51So what happened here? 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 So this is Stripe acquiring Open Router, which is kind of the best known of the AI gateway companies.

15:37Essentially the idea that, you know, instead of kind of just using one model, that potentially you can sort of use the right model for your task, the right model for your budget. And this is something that's, I guess, been reported to be in the works for a while now. I mean, the journal, I think, in the Wall Street Journal in July had a story about this. But now over the weekend, Bloomberg reported that the deal was finalized with an acquisition price of more than$7 billion. And the news became official this week. And yeah, there's some broader, like maybe ideas that we can draw from it. And also there's some maybe just kind of eyebrow raising things about this announcement.

16:15I mean, I think the big one was, you know, the founders of Stripe essentially saying, oh, yeah, the price. Yeah. So the price, again, is more than seven billion dollars, which, you know, again, by the sort of stratospheric heights of open AI or Anthropic is nothing, but it's a lot of money. It's also a significant, you know, increase from their valuation earlier this year. I think the founders are going to do very well in this. And then the other thing that was very striking was also just the founders of Stripe saying, well, we're doing this deal because the singularity is approaching. The singularity is already here, right?

16:50Isn't that what they said? Oh, sorry. Misquote. Thank you for that correction. The next round of is this AGI. The singularity is here and it happened a few months ago. Don't you all notice how everything has changed? Yeah. And I have to say that our venture editor, Julie Bort, had a great story that was really more of an analysis and really poked fun at this idea of the singularity and was like, hey, this is actually there's a real business reason for this. And, you know, the sort of the money graphs that she has here is that for Stripe buying sort of the granddaddy of popular AI gateways for developers gives it insight into how coders are using AI.

17:33But it also at the same time gains a lever on AI demand itself. And so there's real power there when you have a payments plus token expense management and a model router. That, I think, is a little bit better reason for Stripe to pay$7.5 billion. By the way, their valuation back in May was a fraction of that. So just to put the size of the idea in perspective here. But I think that is really the reason why Stripe bought OpenRouter, not because the singularity is here. Not to throw shade on whether or not the Collison brothers do believe that the singularity is here. Maybe they do. But I would say also zooming out a bit in terms of some of these other deals that I think we're going to talk about as well is my takeaway is to some extent just that like the AI market is behaving like any kind of tech and startup market that we're now kind of starting to move a little bit beyond the kind of initial exuberance.

18:36And you're starting to have just kind of the natural maturation of like for the bigger companies, like, oh, crap, like, how do we act? Like, are we making, you know, what's our business model? Are we profitable, et cetera? And then for the smaller companies, there's some like natural consolidation. Some of them are going to shut down. Some of them are going to get acquired. And so, I mean, the numbers involved, you know, the dollar values involved are maybe larger than what we see with past cycles, but it feels kind of familiar in that way. Yeah, I'd also want to mention that, you know, outside of Anthropic, NVIDIA and OpenAI, which again, you know, we talk a lot about, there seems to be this trend of like a lot of companies developing their own AI gateways.

19:15So Databricks, Rippling launched one focused on employee AI spend and ROI. Ramp just launched one. So there's the consolidation piece that we're seeing with like an open router. But we're also seeing this like trend of AI gateways that are also happening in these what I would call like mid tier AI companies. I think the way I like to think about it is you have these, you know, the largest AI companies like, you know, Anthropoc and OpenAI plowing all this space, you know, and really just creating. of you know now i'm mixing my metaphors a vacuum and uh and so there's just naturally going to be a sort of scramble amongst this kind of like mid-tier uh size-wise and valuation-wise of companies that are maybe deciding to acquire something else to grow and get you know sort of similarly big or maybe they're going to pivot completely like we saw grok do earlier this year not Elon Musk's Grok, but Grok with a Q, where they went from wanting to develop, you know, inference chips, but then having one of these kind of weird aqua hire situations where they lost a lot of their talent and decided to pivot to being a neocloud.

20:33There's just this kind of churn that's happening right now where, you know, there's still clearly a lot of money flowing into this ecosystem. And so that gives some flexibility to some of these companies, even if they're doing it sort of under duress in some situations to try and figure out what are we best at what is there a need for and frankly i think the you know how much how deeply some of these technologies have you know become attached to the enterprise world i think that took a lot of people by surprise and i think we're seeing just kind of you know sort of more ripples coming from that of okay well if this is really going to take off in the business world and change you know x y and z about how fortune 500s or or whoever does that does work and how their employees do work then you know there's just naturally going to be a lot of uh you know sort of pivoting in the meantime as as people realize oh shoot if that's the case we we don't have whatever this piece is that's missing and so we should go and try and do that instead yeah and speaking of the churn i think one of the other headlines that we wanted to mention was also this company relay which was also an AI automation startup.

21:43And that one's actually shutting down and the team is joining the Google Chrome team. So in a sense, you sort of get in these three, like a pretty broad spectrum of like the different kinds of outcomes you can see. You get the shutdown, acquihire, you get the funding to keep open, keep going after pivot or kind of a more traditional acquisition. And I think, you know, you're also talking about this idea of, again, with like Grok, Grok with a Q, I guess everyone will just visualize that in their head for this discussion, finding this new business model. And I think part of, this also maybe goes back to that, the AI router discussion or AI gateway discussion of, I think, for these mid-tier companies or smaller is where is the sort of long-term value going to be?

22:28Where are the moats going to be? What is just going to become commoditized? And I don't think we also have clear answers on that yet. And maybe it's fine, right? If you're like a startup that does not have the ambition to become the next open AI. Like if you want to just, you know, sell like NeoCloud infrastructure and, you know, not necessarily reach the ubiquity of some of these bigger companies, but you're going to make a lot of money for a couple of years. Like maybe that's good enough. To use another terrible metaphor, I've been thinking about this because Sean, Sean mentioned churn. And it just reminds me of sort of like churn or like choppy seas.

23:08It's like very unpredictable. A lot of these companies, they can't just tread water, right? You know, here I am with the water metaphor still, but they can't just tread water. They have to make moves, but the seas are a little bit confusing right now. And so they're all trying to carve out these different niches, which is driving consolidation, which is driving these sort of acquihire situations, which is driving these shifts, you know, to neoclouds. And we're seeing these like little mini trends as all of these companies try to carve out these niches against that backdrop, you have Anthropic annualized revenue surging to sixty five billion dollars.

23:42So it's like it's important to compare what is happening at like the mid tier level where there's a lot of action activity and change. And then with the open AIs and the Anthropics of the world, there's like this whole other level that is happening yeah and we should say as an anthropics revenue is going up open ai's losses appear to be deepening uh according to another report from the wall street journal this week which you know there that was in the second quarter seems like things may have adjusted more in their favor so far in the third quarter but you know it it we've talked a lot on this show over the last few months of this idea of you know anthropic kind of building something a bit more purposeful.

24:28And I think we're just continuing to see that company reap the rewards of that approach versus like, you know, Anthony, you just talked about like if one of these smaller companies wants to become an open AI, how do you even define that? Right? Like, okay, I want to be like open AI. I want to make one of the most popular products anybody has ever created when it comes to the world of software, but also we own a podcast and we have, you know, a video generator that we've abandoned and we do X, you know, there's just, we're building data centers, but we're kind of not, you know, there's so much that that company has to kind of keep on the table.

25:05And, you know, I think it, it just seems from the reporting that they're continuing to struggle from that. And, you know, to that point, like we've continued to see some Jacobs there, they've had more executives turn out in the last couple of weeks again. And, and so, you know, they're trying to find that focus it seems um but it that's gotta it just gotta be hard because i i have a quick question for you um sorry to jump in but like as you're describing open ai the way you laid it out it really reminded me of what meta turned out to be oh i think they created one of the most and it like um popular products and yet all this other stuff that they're doing is like so hard to define and they seem to be like have their hands in everything i mean is that a fair comparison i think that's a good way to think about it in like the broadest strokes where yeah they are you know they've they've made some pretty big acquisitions and they've done you know they clearly made one of the most popular products you know that is now continuing to you can only attach so many hundreds of millions of people to a certain product and similar to how we're seeing the kind of the quote unquote blue app with Facebook start to drip users out quarter over quarter over quarter.

26:18So yeah, I think that's the right way to think about it. Right. Although, of course, I mean, meta is much further along in that process and that they've gone through like multiple cycles of, are we still relevant? We are still relevant. We're going to bet on this thing. Oh yeah. But I think, yeah, the other thing I'm kind of wrestling with as I, as I've been reading these stories about open AI and Anthropic is also like that. I think there are some ways in which they do seem to be diverging, that like Anthropic seems to have become that at least right now, Anthropic has been more successful at turning this, you know, in their incredible popularity and usage into, you know, a real business.

26:55But at the same time, I think both of them also face similar challenges of, yes, they're bringing in a lot of money, but costs are also very, very high. and in order to justify the stratospheric, unprecedented valuations that they already have and to meet expectations for these IPOs, that trajectory has to continue, right? They can't just be like, great, we're at like$65 billion run rate. That's fine. The point is that that is 7x, I think, what they were a year ago, and it needs to keep moving on that line or they're in trouble. Well, if they're willing to sacrifice a little bit of the revenue run rate or a little bit of the valuation maybe they should think about spinning some of those businesses off instead of just killing them out right or taking on too many uh and that brings us to our first deal of the week which is also still hate that name also the the micromobility company that was spun out of rivian last year uh but is it a micromobility company well we should get to that but you know it has raised 150 million dollars in its series d so moving quickly here we only got spun out a year ago and some change and we're already on a series d funding round that brings it to about 455 million dollars raised um since then which is a lot for a micromobility company but again maybe maybe there's something more than that so yeah tell me why you why you say that kirsten because when we first talked to the folks behind also uh you know a year and a half or so ago we were we were really only talking about like wheels and seats and pedals and things and and now they're they're using different words which as you know i always like to pay attention to the words Yeah, so I wish I had it right in front of me.

28:33I'm going to try and multitask and do this at the exact same time. But they used to describe themselves as a micromobility company, a Silicon Valley based micromobility company, and they were creating two products, right? A two-wheeler pedal assist bike for consumers and something more on the commercial side, which was like a quad cargo. They struck a deal with Amazon. This was going to be used for delivery. And now they are calling or describing themselves as an autonomy ready vehicle technology platform builder. So a little bit different than micromobility. And basically, I think that this is where this funding is going based on my conversations with folks over there.

29:23And really what this is also tied to is this deal that they struck earlier this year when they raised their last batch of money or closed on that, which was a deal with DoorDash. And so to me, the question is, when also spun out of Rivian, and this is a question I don't have an answer for, so maybe one of you two will know the answer. is they talked a lot about how also is going to be able to leverage the technology of Rivian. And what I don't understand is why aren't they using Rivian's autonomy stack, which has been in development and instead seem to be maybe developing their own tech, which is prompting the need to raise more capital.

30:07At least that's how it appears. So I'm a little bit puzzled by that, but also is now an autonomous vehicle technology development platform company. This has just been a company that's been, as somebody who doesn't follow this space as closely as either of you do, like a tough company to talk about when we bring it up on equity, both because of the name, the sort of classic who's on first kind of name, but also because it seemed like there were easy ways to try to wrap your head around what they were doing, but they were always like, no, no, no, we're not that. We're not just an e-bike company.

30:37Okay, now we're not just an e-bike and micro-mobility company. We're an autonomy-ready company. And then, you know, I'm going to do the classic journalist thing of answering your question with a question, which is just what I'll, the related question I wonder is to, you know, some, you know, usually when somebody raises funding, especially a big funding round like this, it is a sign of growth and of strength. And so to what extent is this a sign of, hey, like we've maybe pivoted a little bit, or maybe we're just adjusting our messaging, but like we figured things out. And that's why, you know, these investors are giving us hundreds of millions of dollars.

31:09Or is it like, all right, we need hundreds of millions of dollars and let's see if this works. You just gave like Sean the easiest layup to deliver on. So go ahead, Sean. I hope I don't disappoint. I mean, my answer to that is kind of look at what they've been up to, which has been not much, you know, not to be too harsh, but micro mobility is hard. Like selling e-bikes is hard. Making a good one and selling a lot of them is very hard. And, you know, their whole thing was we're going to start with this e-bike that is, you know, different in a lot of ways and also kind of premium and expensive.

31:44And they have been mired in delays. They've had supply chain issues that they haven't been very specific about. and you know now that they are finally starting to send the first few of those out you're seeing just a lot more general sign up sort of blowback um from people who are shopping for or have an eye on e-bikes which is really not surprising because like it's hard to please people who are considering e-bikes it's like a conglomeration of different types of people and it's very hard to please all of them in one way and so you know i am not surprised that they are maybe taking the foot off the pedal of being a micro mobility company a little bit to focus on the autonomy stuff i certainly don't think that means they're going to abandon these products um especially the cargo stuff which seems like it has real business potential but you know if they can find a way to tap into the autonomy stuff and turn that into its own business uh not just for themselves and their own vehicles, but for other companies, then I could see how that seems like a more attractive proposition now.

32:48Yeah, I'm also just curious about, you know, yeah, where this puts Rivian in terms of like, seen like went through this kind of period of just frantically spinning out all of these companies. And luckily, the CEO of Rivian will be coming to disrupt. So we can maybe get some answers to that. In the meantime, we do have a couple of other deals we at least wanted to touch on. One is about Uber and Zipline and basically Uber starting to incorporate more drones into its deliveries. Sean wrote this story, so I'll throw it back to him in a moment. But to me, I want to zoom out just a little bit to look at what's happening with Uber.

33:22So we know that they've made a ton of deals with a lot of different autonomous vehicle companies. sidewalk delivery bots, you know, robotaxi companies, drone companies like Zipline. And there seems to be a little bit of movement happening, which is in the same week or within a span of a couple of weeks of them, you know, striking this deal with Zipline. It seems like going a little bit heavily into that. They're pulling back on at least one sidewalk delivery robot company, and that's Serv Robotics. They completely divested and they've also started using those sidewalk robots a little bit less.

34:04So I'm wondering, Sean, against, you know, that like sort of broader backdrop of what's happening, how do you interpret the Uber Zipline deal? Well, I think, you know, we've as you've described it, we've just seen like the expedification of Uber happen at full steam over the last like year and a half, which is you know not terribly surprising given that their CEO Darkhaz Rashai used to be the CEO of Expedia and so I you know I think he sees tremendous value and growth potential you know it's hard for frankly right like to for Uber to saturate itself you know as a ride hail provider more than it kind of already has uh in some ways and so this is a way to find growth if you're not going to go out and develop the technologies yourself which you know Uber has had a hand on some of these balls like robotaxi development or even drone delivery and evtol development and has walked away from all of that in favor of this kind of model and so i think you can look at it two ways and and just really quickly one if you're going to build this kind of expedia model you're going to naturally partner up with as many people as possible and that none of those relationships are going to be 100 durable and so you're going to have situations where you walk away from certain businesses or certain segments.

35:19The other thing to think about is like if that is the case, but you are the biggest market maker. Startups that are developing this technology and are looking for growth and looking for markets have to think really carefully about like whether they want to play that game. And there aren't a lot of other options like DoorDash is kind of doing similar stuff here by partnering with people, but they're also developing their own technology. And so, you know, if I'm if I'm the founder of a company that's doing like drones or or sidewalk robots or whatever, you know, I think zipline is big enough that it has, it can ease into this a little bit.

35:53Should say ease in, they're talking about doing a million deliveries per day with Uber by 2029, which is a crazy number. But you know, I think they're a bit more insulated, any smaller than that. And I think you're, you're really in a weird position right now where you're, you're seeing tantalizing opportunity for growth. But also, you know, if Waymo is not going to stick it out with Uber for three years, boy, are we going to be able to hack it? And is it going to be worth it for us? And do we even have that option? Yeah. I mean, I'm curious about also just in the case of this partnership, I think the plan is to do deliveries in the existing zipline markets by the end of this year.

36:30I mean, I don't have a great sense of just like how widespread is zipline right now? Are we going to be seeing a lot of drone deliveries in Uber Eats like fairly quickly? Or is this still like very much kind of an early test. I'll just jump in really quickly and say the ZipLine, you know, has made a ton of progress and they are one of a handful of companies that has a very specific certification that allows them to operate beyond visual sight line. It's an important jargony term that basically allows these drones to operate autonomously without an operator like being able to physically see them.

37:06And that allows them to really expand. And here's the interesting thing about Zipline. They have a pretty diverse business. They're actually pretty heavily into like healthcare. That's their roots is doing that and operating outside the US. So they're in a good position to scale, I think, than some other drone startups out there because they've got a fairly, you know, mature-ish business. I put that in a little bit of quotes. I mean, they're still a newer company. But I think that they're in a position where they can scale pretty easily with Uber Eats. We are almost out of time, but there is one other deal that I think we wanted to at least mention briefly, which is Whisper.

37:48It's kind of the leader of these AI dictation apps, which raised$280 million at a$2 billion valuation. I mean, I know that this is a space that we've been covering a lot at TechCrunch. Did anything jump out to either of you about this deal? I have a question. That's my answer is a question. Have we reached peak dictation app valuations at this point? I mean, it seems like it, right? Yes. And then, I mean, you can tell partly because part of the way they're framing this is like, hey, we're not just about dictation. we're going to start moving into other things, which is a sign that they know they can't really go past two billion if they're just dictation.

38:29Yeah, I mean, this is like it was an impressive hill to get over a few years ago. And I'm not saying that to dismiss what they've accomplished in any way. But it is, you know, it is the thing that gets commoditized once these models and once the technology advances to the point that we've seen it now. And, and also a thing that I think, you know, in general, people aren't expecting or desiring to be like 100 % accurate all the time. Like, you know, you can make it better and better and better, but I feel like you see fewer returns as you try to reduce, you know, jump from 99 % accurate to 100 % accurate.

39:03And so they need to look for other ways to attract new investors and find new customers. Yeah. Well, as I mentioned, we are pretty much out of time. If listeners are interested in this topic, we had Mina from Sandbar on to talk, again, more generally about the space and where the technology and the business are at. In the meantime, of course, Equity will be back next week and you can follow us at EquityPod on X and Threads. Thank you so much for listening.

39:41Thanks so much for listening, and we'll talk to you next time.