OpenAI’s Internal IPO Rift, SpaceX’s Uphill Starlink Mobile Battle, Silicon Valley’s Storytelling Boom

0:13Welcome, everyone, to The Information's TI-TV. My name is Akash Pasricha. It is Monday, April 6th. First up, today on the show, The Information has exclusive reporting about certain misalignments among OpenAI's senior-most executives. will bring on Anissa Gardizi, who co-wrote that story alongside our executive editor, Amir Afradi. We'll then pivot to SpaceX. The information has exclusive reporting on its Starlink deal with T-Mobile. I'll be joined by our Elon Musk reporter, Theo Waite, and we will wrap the show with a conversation about the next generation of tech talent with Rex Woodbury from Daybreak.

0:49It's going to be a fun show, so let's get right on into it. Sam Altman and Sarah Fryer, the CEO and CFO of OpenAI may not be on the same page about the company's IPO priorities. That is according to an exclusive story from my colleagues, Anissa Gardizi and Amir Afradi. I want to bring on Anissa to tell us more about what we know. Anissa, welcome back to the show. It's great to have you here. What do we know about Sam Altman and Sarah Fryer? Do they get along or what?

1:17Akash Pasricha:So as far as we can tell, there is a growing tension between the two executives. So right now, they might not be getting along as much as they had in the past. This rift is pretty important, though, because what we're starting to hear is that what the CFO, Sarah Fryer, is saying behind closed doors is that she kind of disagrees with some of Sam Altman's grand ambitions. And she's, of course, the CFO. So that is not the kind of misalignment you want to have at your company. So that's what our story was about. And I'm sure we'll dig into all the details. Okay, so grand ambitions. Which grand ambitions are we talking about here?

1:55The story seemed to focus on IPO plans and then the cloud deal. Let's start with the IPO.

2:01Akash Pasricha:Exactly. So as we reported, Sarah Fryer has told people privately that she disagrees with Sam's ambition to IPO as soon as the fourth quarter of this year. And part of that concern on her part is that she doesn't think the company is going to be ready from an organizational standpoint to go public. as soon as Sam has told people he wants to. And she's worried that all of these cloud deals that OpenAI has signed up for bring a lot of risks and all of that will come to light, of course, if the company is public. So that is what she is telling people privately and it conflicts with what, and she's telling people that that conflicts with what Sam Altman wants.

2:43You know, this is kind of a funny question that, you know, I guess reporters aren't supposed to give us the answer, but I'm going to ask this anyway. I mean, how do we know this? How do we know that this rift exists? What evidence do we have that they're not getting along here?

2:58Akash Pasricha:Yeah, so for this story, we're talking to people in the inner circle of the action here is maybe the best I can say. But there have been some examples of this manifesting, and we're hearing about it from people who are close to her and from people who are in meetings with her and Sam Altman. And so our story highlights a few examples of Sarah being excluded from meetings and key conversations around the company's finances. One of those conversations was with a major open AI investor. And we learned that Sarah's exclusion from the conversation was actually seen as a little bit awkward. You know, she's the CFO.

3:40Akash Pasricha:It seems like she's not, she should be here, but she's not here. So we have a few examples like that in our story. But it's a good question. So this is kind of interesting because you have the CFO whose job it is to figure out how to take a company public and who is the leading person in that plan. She's actually being excluded from certain conversations there. And, you know, that's sort of like, OK, I mean, strange, maybe. But let's put that aside. What about the cloud deals? I mean, what do we know there? So OpenAI has signed up to spend an enormous amount of money in the next couple of years on cloud and chip deals.

4:25Akash Pasricha:More than$600 billion, which is more than any company has ever spent on its own compute capacity before. And these deals span cloud deals with companies like Oracle, Amazon, and Microsoft, Google Cloud, CoreWeave. OpenAI has also signed large deals with Broadcom and AMD. And when you add up all of these contracts, you get to a pretty large number. And what we reported was that Sarah Fryer has told people that she's unsure if OpenAI needs all of this capacity that it is signing up for. And she was unsure if they were going to need it. Now, all signs point to OpenAI being capacity constrained, and that's what's constraining revenue.

5:07Akash Pasricha:Sarah Fryer herself has also talked about this. But privately, she said, okay, well, we've signed up a lot of deals. Do we know whether we're going to need it? Now, all of the OpenAI Cloud deals, as we've learned, have different out clauses where the company might not have to sign up for the sum total of what it signed up for in the beginning. And it's sort of signaling to the market what it wants so that other companies can prepare. But it seems like these deals cumulatively are something that gives her a little bit of pause. Anissa, did you learn anything about Sarah Fryer's background that might sort of give us any explanation for why she is taking a little bit of a softer hand maybe to these ambitions?

5:50I mean, CFOs are traditionally the people to say, hey, maybe that's not the best idea. Maybe we don't have the budget for that or, you know, they're sort of the last line of approval you need to get. But, I mean, tell us a little bit about her background, where she came from.

6:07Akash Pasricha:Yeah, so I don't think there's anything about Sarah Fryner that makes her particularly risk-averse, per se. I mean, obviously, she's a CFO, but I think Sam Altman is like on the – he's like the most extreme kind of CEO in terms of what he wants to spend. So I don't think that her disagreement with Sam makes her a risk-averse person, per se. What she did before OpenAI, she helped take Block Public with Jack Dorsey in 2015, later was brought in to Nextdoor, and then left that company. And Sam hired her in mid-2024 to work at OpenAI. They hadn't worked together before. But we don't get the sense that Sarah is, you know, against spending or doing creative deals.

6:52Akash Pasricha:It's just she's working with the kind of CEO who wants to spend more than has ever been spent before on cloud computing. Because publicly they've been pretty much in lockstep together, right? Exactly. We even have a detail in our story about a dinner that Sarah and Sam hosted recently at Sam's house for investors where they were presenting a united front about the company. Sarah is constantly doing public interviews on behalf of OpenAI and talking about the company's finances and how she commends Sam and Greg for their forward-looking outlook on this kind of thing. So, yes, publicly, it wouldn't be known that there are these tensions behind the scenes.

7:33Okay, so last question for you. Now, help us square this rift, I guess, that is privately brewing between Sam Altman and Sarah Fryer. Help us square that with the reality that the company just raised$122 billion. It was more than we thought it was going to be at multiple different intervals in the fundraising process. I mean, they have all this money. Conceivably, that means they could push the IPO out. But, I mean, did one affect the other at all? Yeah.

8:04Akash Pasricha:One thing that we note in our story is that despite this tension between Sam and Sarah, they just raised the largest round that's been raised. And so obviously they were able to accomplish that feat. And Sarah drove a lot of that work. She's also been the one driving their compute deals and signing off on these things. So it is curious that she's at the company privately expressing concern, but also publicly being the face of this$122 billion deal and helping structure some of the cloud deals. So you can be sure that we will continue looking into this and hopefully report more examples of the behind the scenes action in the weeks to come.

8:50Great. Right. Well, Anissa, I want to thank you for coming on. That is Anissa Gardese, our cloud and compute reporter here at The Information. The Information has exclusive reporting about SpaceX's Starlink deal with T-Mobile. Here to discuss the story is Theo Waite, our Elon Musk reporter. Theo, welcome back to the show. It's great to have you here. Good to be back. So what did you find about T-Mobile's deal with Starlink?

9:14Theo Wayt:so t-mobile was the first big partner for starlink mobile that spacex announced way back in 2022 and at the time and since then there have been very little financial details about the deal disclosed at all um so what i'm reporting that's new is that the deal originally consisted of a upfront payment from t-mobile to starlink in the tens of millions of dollars and then the total value of deal which um you know expanded as spacex actually launched the service is around 100 million dollars um which both for spacex and for t-mobile is a is a pretty tiny number um which is you know noteworthy because uh this is like a very high deal but it is actually not super large right so So that is, I'm just doing the math here.

10:04So 100 million divided by 16 billion in annual revenue. What is that? That is like 0.6 %?

10:13Theo Wayt:But it's also spread out. So not all of that revenue would have been last year. For the 16 billion number, just for reference, is what we've reported with SpaceX's revenue in 2025. So it's not even that much. That would mean the T-Mobile deal is almost certainly less than 1 % of SpaceX's revenue, which, you know, it's not completely, it's not like a gotcha necessarily, because it's not like either of the companies has said that this is a gigantic, a gigantic deal, but it's two very large names. And it is kind of the way that, at least in the US, like the vast majority of people that have encountered Starlink mobile would have done so through T-Mobile.

10:56Theo Wayt:So it is kind of a, you know, a big, a big name, like big names involved at least. Well, but big name aside, I mean, look, so I think there has been the understanding that this is a small but fast growing, hopefully fast growing business line for the company. So the fact that it's small, I mean, you know, we didn't have the number before you reported it. So that's important to note. But I mean, just explain to us the context here insofar as how SpaceX talks about this business line in terms of the future of its business. I mean, what is its ambition for it, certainly as it looks to go public? Yeah, so SpaceX needs it to be a gigantic business to justify the amount of money they're spending on it.

11:38Theo Wayt:They last year reached the deal with Echo Star, which is a big, you know, telecom and satellite company, to buy almost$20 billion worth of spectrum, which is basically the right to use certain waves and frequencies to transmit signals, basically. They're spending almost$20 billion on that, and that is really only useful for Starlink Mobile or for other cell phone direct-to-cell purposes. on top of that they're spending a bunch of money on a new generation of stormic mobile satellites that they want to start launching on starship next year um and so you know all told there's tens like several tens of billions of dollars that they would be spending on this um and in order to pay that off you know it has to become a huge business at some point otherwise it doesn't really make any sense what about the t-mobile side of this does t-mobile have they said that they plan to spend more or expand this at all?

12:44Theo Wayt:So they will not talk about the financial terms of it at all. And they've actually been pretty quiet. I mean, in 2024, Elon said that the T-Mobile deal would be exclusive for the first year of service, like after it launched. And it launched last summer. So sometime this year, there's going to be a deadline that that exclusivity will end and SpaceX could theoretically do deals at some point in the next year or so with other mobile carriers. But that's a bit complicated because AT &T and Verizon, the other two big players in the US, also have deals with this other company called AST, which aren't exclusive as far as I know.

13:27Theo Wayt:But basically, basically everyone has already kind of picked a company to work with in this space, and it's not very expensive for any of the carriers. So, you know, from, I guess from T-Mobile's perspective, you know, they're gonna, they're gonna maybe continue with SpaceX, or definitely continue with SpaceX, but maybe not stay exclusive. And from their perspective, it might not be worth, you know, paying a ton more money to keep it exclusive. The$100 million contract, How many people does that chalk up to using the service? Do we have any numbers there? So T-Mobile said earlier this year that I believe 16, no, sorry, Starlink Mobile in total, 16 million people have used.

14:11Theo Wayt:And Starlink Mobile in total globally has about 10 million monthly active users, according to SpaceX, but as of March. But T-Mobile has not really put an exact number on it. There are definitely tens of millions of customers that could theoretically use it. But, you know, the big question here is like actually how many people actually use it on a regular basis? Because that's kind of unknown and obviously will be a big factor in how much mobile carriers are willing to pay. And so if we just zoom out here, looking ahead to the IPO, I mean, we know now that empirically it is a small part of the broader SpaceX business.

14:51small part of Starlink's business, small part of the SpaceX business. Help us understand sort of the why this matters of all this. Is it really just that it makes the SpaceX valuation look even richer? Does it say something about, you know, the growth trajectory? I mean, just put this into context for us. I mean, I think it, I think the significance here is that, you know,

15:16Theo Wayt:If you think about like the total addressable market for satellite internet beam to a terminal that only really makes sense in remote areas, like that's what the core Starlink business is. And that is inherently going to be a bit limited because in San Francisco or in Manhattan, Starlink is almost never going to make sense for internet. There's going to be wired internet. And if you then compare that to, you know, there's 6 billion odd people in the world, basically all of them are going to have a smartphone. And if you can sell as many of those people as possible on paying a little bit of money to have emergency backup Starlink mobile service, you know, at their disposal, that that winds up being a much bigger number in theory.

16:03Theo Wayt:But, you know, the significance of the story that we did today is just showing how far away that is from actually happening and showing that this is a pretty nascent business at this point. Great. Well, Theo, I want to thank you for coming on. That is Theo Waite, our Elon Musk reporter here at The Information. Our next guest is the founder and managing partner of Daybreak. Rex Woodbury and his team invest across several categories, including health, productivity, and the environment. He is also the author of the very popular newsletter, Digital Native. Rex, welcome to TITV. It's great to have you here.

16:37Thanks for having me on. Great to chat. So I was on LinkedIn and I saw that you have been posting about this job placement program for former investment bankers and consultants. And I actually am a former consultant. I didn't take a job in tech. I took a job in journalism, obviously, but it's tech adjacent, you could say, doing this show. But tell me about this program here. I mean, how many people have you placed? How many people have been interested? Just talk about it. You know, it's interesting because all of our companies obviously need engineers and engineer recruiting is probably the bread and butter of early stage companies.

17:13But I started hearing from founders that we actually need a lot more business hires too. And you have these high slope people who like you are a former consultant or I'm, you know, in a prior life, I don't talk about it much, but I started my career in investment banking. And a lot of people want to move from banking consulting world into tech, but they don't necessarily know how. And a lot of startups want to hire those people. They're really good general athletes. They're good in biz ops hires. They're good in sales, go to market. I mean, sometimes they can move across a lot of different functions.

17:41And, you know, it's really around finding ambitious, hardworking people who are a high slope. And I basically posted this as saying, you know, you people might be more willing to fill out this Google form than engineers who are incredibly hard to get in front of. And we were right. We got we've done it three times now. And I think the first time we got maybe 400 responses, the second about 800, and this time about 500. And so how many people have gotten jobs? Have you tracked that at all? Probably a dozen or so. Definitely five or six from the last batch in our portfolio. I think we had three biz ops hires and two chiefs of staff come from it.

18:19And, you know, I think those are kind of good general jobs that a banker consultant would be interested in. and they're good landing places in these companies. But it's been productive. Yeah, I mean, a lot of our companies want to hire McKinsey or Goldman or, you know, Bain folks for these kinds of business side roles, especially as they start to hit escape velocity and scale. And I think a lot of people who are two, three, four years out of school are interested in making the leap to startup world. So I want to bring this back to the news here. I mean, the story of the moment right now in big tech, one of the stories is layoffs.

18:54and some of these big tech companies looking to find ways to make their workforce more efficient. I've always had the question, okay, we see these mass layoffs happening. They might continue to happen. Where are all those big tech employees going to go? And I have thought that maybe they will start companies. Maybe there will be more competition for startup jobs. I mean, you've been a VC for a number of years now, so you've seen some of these waves of layoffs come and go. What inevitably happens to the talent from big tech? I mean, I presume they don't just go work at other tech companies. Do they start their own companies or what?

19:32I actually think a lot want to go to early stage startups, especially if they're working outside of an AI function. I think everyone wants to be part of AI, or at least a lot of people filling out this survey. And you can actually see the demand for it in that the survey actually calls for people who are bankers, consultants, private equity, you know, have that skill set. And then you see tons of responses of people who work at Meta, who work at Google, who work at even later stage startups that are probably only five or six years old. And so the fact that they're filling out this Google form that was not even meant for them or addressed to them kind of shows to me that there's just a really strong appetite for people who want to join something at seed stage, series A stage, or kind of get into the AI race however they can.

20:15So is there enough demand for all of these people who are getting laid off? I mean, we're talking about consulting and investment banks here, but is there enough room? I mean, I think the optimist and I think venture has a job of having to be an optimist is that there are enough startups that are created or it's become easier than ever to start a company that either people will do it themselves or there will be such an explosion of startups looking for early stage talent. Of course, that's probably not the full answer. I think near term, there will probably be some pain and I think that's one of the challenges now of how do we kind of fill this displacement gap of people whose jobs are no longer necessary or all this talk of augmentation or automation I think when a lot of people hear that they hear layoffs and that's part of this backlash to AI you know I think it's up to companies government we need policies to actually retrain people so that they have the right skill sets so I think some people who are really kind of self-motivated can become smart on AI can learn a lot of these skills can make themselves useful in these roles at AI native companies.

21:22But we should also be certainly doing a lot more to reskill people with AI native skills. I want to pivot and talk a little bit about the fund that you have, Daybreak. So, you know, you started the fund a couple of years ago and a couple of months ago, Abhi Chalgarg over at Electric Capital, they raised a big fund. He wrote this great article about how to differentiate yourself in venture. And I mean, he really hit home the point that you need to have a value proposition as a venture fund, as a new venture fund in this day and age. What did you think or what did you hope would be your differentiation advantage as a VC in a sea of VCs when you started this new fund?

22:03Yeah, there are definitely a lot of venture funds out there. I think what we always talk about at Daybreak is how do we actually innovate for the next generation? And obviously that means both investing in AI and using AI ourselves. But I think ironically, we're actually designed a lot to look like the venture firms that existed 10, 15, 20 years ago. So the words we use are artisanal, craftsman-like. We will never be more than three to five partners. It's two of us today. And we're laser focused on first check investing. We're pre-CNC investors. We think the skill set of getting a company off the ground and actually building in the first 24 months, finding product market fit, cracking distribution, hiring the early team, those are very different skill sets than the sort of asset management side of venture that a lot of venture has become.

22:46And so as venture is actually industrialized as an industry, it's almost trended more to look something like private equity. We want to be this kind of back to basics that is laser focused on finding product market fit and helping founders actually build the team and the company in the first couple of years. So we're very much stage specialists. We invest across different categories. We like to say that we're thesis informed of the founder first. It's really just about special people and finding them really early. But then it's really just the nuts and bolts of company building. That's what we do every day.

23:16Now, when you say nuts and bolts of company building, I mean, there's so much to that. If I look at the Rex Woodbury menu of specialties, I mean, you have a newsletter, it's got 70 ,000 subscribers. Are you saying to founders, hey, I will help you concretely with your marketing, with your comms? Is it sales? What is the secret sauce that you say I can do better than any other venture investor? Yeah. I mean, I think we think ourselves as really good at knowing how to build a company in the first couple of years. And I think when you are taking capital, it doesn't seem, it's hard to understand all of the sort of small minutiae of the questions that you might have around getting off the ground and then finding product market fit.

23:59But there are a lot, you know, for an example, last week, one of our healthcare companies was struggling with SOC 2 and security compliance reviews for enterprise. We knew about a very niche vendor that can help unblock them and, you know, keep energy resources focused on product. And I think those kinds of niche insights, and it could be just answering a question on what should I pay this engineer? Or can you jump on the phone and actually close this engineer for me? Or small things around, when should I hire my first salesperson? You know, should we bring on a designer now? How do you think about this?

24:32I mean, we've introduced a lot of companies to incorporation lawyers. I think there's a different expertise for the pre-seed stage of the market than there is for the multi-stage. So for us, it's all those kind of invisible moments. And, you know, a million bucks, two million bucks, like those checks matter a lot to smaller, newer funds like Daybreak. And so our fates are very much tied to our companies. And that means we're picking up the phone at midnight and we're working really closely with founders through the lows and in the trenches. So that's kind of how we pitch it. I mean, I think it's very much that artisanal side of venture that we believe this is a services industry.