Silicon Valley’s AI wunderkind launches Underdog, the most private Instinct/Muse competitor yet; plus, name Ex-Ramp engineers raise $20M for platform Melius

0:01Sigil Wen: This is TechCrunch.

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1:13Sigil Wen: That's Framer.com slash tcstartups. Rules and restrictions may apply. When self-taught coder Sigal Wen was 17, he moved to Silicon Valley and lived in an AI hacker house with famed AI researcher Andre Karpathy. While there, he hacked and coded alongside other people who had become the biggest names in AI, like Perplexity founder Erevin Srinivas and OpenAI researcher Noam Brown. He tested early versions of AI tools that would later become well-known, including a chatbot shared by Anthropic co-founder Ben Mann that would become Claude, an image generator from David Holtz that would become Midjourney, and what would become OpenAI's GPT-3 and the image generator Stable Diffusion.

2:03Sigil Wen: Prominent investor and entrepreneur Naval Ravikant hired him for AirChat, Ravikant's now defunct rival to the Clubhouse social network. For fun, he figured out how to get GPT-2 running on his Apple Watch. It was a magical time, Wynn told TechCrunch. Now a Thiel Fellow, the program from investor Peter Thiel that invites young founders to pursue projects instead of college, Wynn launched an invite-only beta of Underdog on Monday, one of the most private AI assistants Silicon Valley has yet to offer. The model runs wholly on-device, meaning the user's data remains on devices they already own, currently Macs and Windows PCs, with Linux, iPhone, and Android versions coming soon.

2:51Sigil Wen: Underdog is powered by Husky, the inference engine Wynn built to run AI models quickly on a user's own hardware. Wynn says it moves less data between a computer's main chip and its graphics chip than rival on-device engines. Underdog has other security features baked in as well, like encrypting the keys to the email and other accounts that users authorize Underdog to access. Underdog is, however, using much smaller models than today's state-of-the-art ones hosted in data centers. It currently uses a 27 billion parameter reasoning model, fine-tuned from QN 3.827B. Wend argues that this model compares favorably to Claude Opus 4.6 in some benchmarks, or what was considered top performance six months ago.

3:39Sigil Wen: He says that means it can handle the everyday tasks that people want an AI assistant to do, like shopping research or answering math homework questions. He says you don't need to sacrifice your privacy for the capability, because they're just as capable. And he added that small on-device models will continue to grow more capable over time. Perhaps the most interesting thing about Underdog is its early business model. The app will be free at first and never ad-supported. Since the AI runs on users' machines, Underdog does not have the giant overhead of paying a provider for inference. He said, I don't have to charge you a subscription to run this because my costs are so super low.

4:22Sigil Wen: Instead, with Stripe co-founder Patrick Collison as one of his angel investors, he's borrowing a play from the fintech era. Underdog will take a tiny percentage of payment transactions that the AI assistant makes using Stripe's secure payment rails, something like an interchange fee. In that way, the AI assistant never has to mine your data. It is as aligned with you as your bank or credit card providers. This runs contrary to the business motivations of many of the other players in AI assistants, whose privacy policies allow them to collect data on users that they may sell to advertisers or other third parties, or use to train other models.

5:04Sigil Wen: That kind of data collection could be a particularly treacherous trade-off for users of an AI assistant, which may need access to the most intimate details about you in order to be useful, from medical conditions to financial data to data on your kids. As Wynn wrote in what he calls his AI manifesto, why should using AI require surrendering your private information? He told TechCrunch, I honestly want to build Underdog for myself. I'm building a product that I would be proud of for my future children to use. The startup behind Underdog is named Conway Research, and Collison isn't the only big-name investor.

5:45Sigil Wen: Conway is backed by Andreessen Horowitz via partner Chris Dixon, as well as Coastal Adventures, Hummingbird, SV Angel, the Anthology Fund, and a prominent list of angel investors that includes Purcell founder Guillermo Roush, Noam Brown, and Didi Das, among others.

6:06Sigil Wen: Melius, an AI platform for generating ad campaigns, images, and videos, announced on Tuesday that it raised a total of$25 million in funding, including a$20 million Series A led by CRV and a$5 million seed round led by General Catalyst. While the startup claims to have hit more than$1 million in annualized revenue within two months of coming out of stealth in July, co-founder Juwon Kim admits that Melius didn't hit it out of the park initially. When the New York-based company first launched over a year ago, Kim and his co-founders Young Kim and Arnav Ramu set out to build an AI-powered performance marketing tool.

6:48Sigil Wen: The three knew each other from working as engineers at RAMP, the corporate spending and finance software company. More than six months after building the product, the co-founders decided their original idea did not have any legs. Instead of helping marketers manage and optimize ad spend, the team chose to focus on what it saw as a much larger opportunity, building the tools that generate the creative assets and campaigns themselves. Kim said, we scrapped the entire code base. We burned all of it. Milius quickly went to work on an entirely new product. Nearly a year after its initial launch, it revealed a platform that it describes as an agent's lab for creative work.

7:32Sigil Wen: Milius is far from the only startup helping ad agencies, marketers, and brands generate creative assets and campaigns with AI. Competitors include rapidly growing Higgsfield, which was valued at$5.4 billion in August, as well as other small startups, including CREA and Flora AI. Kim is not concerned about the competition. He acknowledged that Higgsfield, a three-year-old company that has hit over$700 million in annualized revenue, is growing like mad. But according to Kim, the size of the market is so large that it can support multiple competitors. He said, there are a lot of players, which is pretty exciting.

8:13Sigil Wen: That means there are customers to be one, and there is demand in this space. As for why former ramp engineers are building an ad generation product, Kim, who describes himself as a social media influencer, says he has been passionate about making short videos since elementary school and once dreamed of becoming a famous YouTuber. He said, I tried my best to make vlogs. My dad was great at using Final Cut Pro, but I wasn't. Those early vlogs never quite took off, but his fascination with making digital media remain. Now with Melius, he's building the tool he always wanted, a platform where anyone, including seasoned creative directors, can turn their ideas into reality using plain language.

8:58Sigil Wen: That's all for now. For the latest in startup tech news, go to TechCrunch.com.

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