Hi, I'm Eric Newcomer. And I am Madeline Renbarger.
And this is the newcomer podcast.
Each week, Eric and I discuss the VC deals and the drama that
went down. Let's do it.
Here we go. Welcome back to the podcast.
Lots to cover in AI this week. Big wins, big raises, some
dramatic, not so wonderful exits.
A lot of. Chest thumping.
You know, I feel like everyone wants to make sure they're
getting headlines this week, but yeah, 1, I don't know, happy
failure or failure that exceeds expectations.
We're we're of course talking about humane.
HP agreed to acquire Humane for 116 million.
It's much less than I think the total they raised was a little
over 230 million over their lifespan.
But it's not nothing for a product that had such a
disastrous rollout as Humane did when it first launched.
Expectations are everything here.
You know, they, they had the advantage of having this sort of
Apple Sheen, you know, their former Apple executives key to
some of Apple's product design. They're launching the first AI
pin. So there's a lot of, Oh my God,
this, this could be huge. And then it, you know, clearly
didn't meet the hype. It's a brutal, brutal launch for
them. I do feel like there's some
points I've heard, some chatter, you know, that while it's
definitely not the worst exit that could have happened for
something like this, there's some kind of dark irony of, you
know, some Apple engineers that went off to start their own
thing that will be now leading a new division with an HP to
integrate AI into PCs rather than, you know, building your
own thing. I've seen a number of, you know,
printer jokes and what I mean. It will be interesting to see, I
think, you know, the actual sort of core.
Do you want to talk to your device now that sort of AI has
better voice recognition? We'll see.
I mean, I, I feel like some of the experiments Humane was
running are still sort of open questions.
Also, do you need this sort of non screen holographic
interface? It'll be it'll be really
interesting to see what, if anything, HP integrates into
their own products versus this is just an opportunity to get
some very talented hardware executives into the company.
And also, you know, AI native hardware executives, I think
there's such a premium on AI talent still.
This could just be viewed as a very savvy Aqua hire.
And we'll see what they end up building with this.
I don't think it was, you know, I think it was just maybe a case
of something too early. There's lots of potential around
this and lots of times the first ones are always the first to
fail. But we'll see if, you know, AI
devices without a screen really take off.
This one clearly did not. But right, I see the vision.
This fits into the sort of, I don't know, the Jet Quibi
humane, I, I'd say the three companies, you know, Jet was the
big e-commerce play Mark Laurie, Quibi was Katzenberg and Meg
Whitman going big on short video and and humane, you know, this
AI device that you can sort of wear and talk to.
I mean, I think all of them represent sort of super hypey,
lots of funding where immediately it was sort of like,
do you really need to go big for this to work?
You know, and jet, you know, the, the argument was where
we're going against the Amazons, the world.
So to have this scale, we need to like pour a bunch of money
into it. I mean, it worked out for them.
They sold to Walmart. So that was sort of the test
case. I mean, some people think it was
an extremely what a $3 billion acquire for for Mark Laurie.
But and then Quibi was a disaster.
Quibi. It did I I still think like,
man, they could have done it small.
Like I it's not clear for me on that one why it was.
Just such a huge launch all at once, right?
Right. Right, just like do, I mean,
it's just like, I don't know, we're in the content business
and like we, I wrote a we wrote, you know, I quit my job, but you
know, I wrote some stories soft they could work.
And then when people like the stories, we expanded out.
I don't, I don't quite I understand that they wanted high
production value content, but I, I don't know, I think they could
have done it a little leaner than they did.
I think humane, you know, it's like it's a hardware device.
So on the one hand, you needed to spend money to to get and
clearly they didn't even have enough money to do everything
they want. It felt like there was too much
Polish on like the device, like the actual physical, you know,
in this sort of aptly sense that they had this like beautiful,
like little device. And it felt like honestly, a lot
of the challenge is the sort of voice communication.
It also felt like they wanted this whole sort of interface.
There's a reason that people like software companies as
investments more than hardware companies.
Software companies are leaner and you can iterate.
And you'd think AI is making that more possible.
But for some reason, Humane decided we need to build a
custom device just for AI. And I mean, maybe they think
they just didn't get enough money to prove it, but yeah,
they didn't prove it. I mean, it doesn't seem like a
lot of these AI hardware devices have much utility beyond what
you could already do on a smartphone or a different device
that you already have, which then you should.
Just be a magical exactly yes the.
Rabbit R Pin that was, you know, I'm a humane competitor.
And again, it fell into the same problem of what's the use case
for this if I have a phone like it?
It seems to be that this whole category, while exciting and I
appreciate the need to, I appreciate the desire to be
removed to some extent from screens and be able to move more
fully throughout the world and interact with technology.
But like with any wearable that we've seen outside of, you know,
things that enhance your screens like Airpods or Apple Watch, you
know, it doesn't seem like these are.
Those are the two devices exactly like Apple Watch or
Airpods. These are devices we already
have that in some ways are meant to get us off our screens.
And I mean, the problem is they're they're locked down and
sort of controlled by Apple. But you would think somebody
would come up with a strategy that, yeah, on on the watch or
on our Airpods that gets us away from screens and allows us to
interact with AI. Unfortunately, what Apple is
still in the world of Siri, which is what the worst voice
voice platform around. I mean, we haven't even talked.
Sorry, I just well, we haven't even talked about, you know,
Amazon, which dumped tons of money into like any Lexus into
everybody's house. I have someone in one in a box
somewhere. And I mean, I'm, I'm curious
what you think about this. I'm not.
And you know, we're friends of my some of my best friends run a
voice company and they're big voice bulls.
Godspeed. But I don't know, I, I feel like
I'm the class I write professionally, so I, my bias is
clear, you know, I guess I'm on a podcast, but I consume mostly
writing. I think writing is a very
efficient way to get information and I don't really see myself
wanting to go from typing to a computer to talking to one
necessarily. I don't know, do you feel
differently? Well, I do see there being some
utility in voice, maybe more as a listening vehicle to get off
of your phone and interact with more directly in that sense.
For either an assistant, if it, again, the key is always if it
works seamlessly, then yeah, I could find that to some degree
useful. If I'm, you know, trying to
complete some task that normally would require a screen, but I
could just do it with my voice in my home in sort of the
fantasy of what an Alexa or Siri could do as an agent.
That would be awesome. I would absolutely appreciate
that because I could, you know, focus when I'm on my screen, I
could focus on work and when I think of something, I could
instantly complete that task. And that would definitely be
helpful. However.
Give us you need to what? What type of task are you
imagining? Here like ordering groceries if
I've like I'm looking in the fridge and I could.
Just say walking around. No seamless hands free.
Oh, I need to write that down. Hey, put this in my notes app.
But all of this is things that are again, really Apple has the
advantage here. If they were to release
something like this, that would work because it would just
integrate into my existing devices that I already manage.
So I think that's something that's tough for a start up to
break into as well in this. Space I, I guess I agree with
you that voice in the sort of like ambient moments wandering
around if it could just capture the like 5 seconds of
inspiration so you don't have to open up your phone, find the
right app. You know, that's sort of where
the opportunity, and I guess to bring it back to Maine is sort
of the argument for the device that's just sort of on you.
Whereas it feels like your iPhone is still in the world of
you'd have to pull up the specific app to record it.
And it's not an Apple in particular seems to have set up
this privacy situation where they're not just going to say
all of a sudden Apple's the phone.
That iPhone, we ambiently record you all the time so that you can
just shout out into the world, you know, but maybe maybe
Android or somebody will, you know, get in that game.
But even then, it doesn't feel like you need a secondary device
for that. It feels like that's something
that could just be captured with your existing technology.
So hardware, it's a tough game. There's a lot of incumbents.
They do things well. What is on on voice?
I mean, you know, one of the buzziest Silicon Valley
companies right now. Do you know what I'm going to
say? Granola, which has become
somewhat controversial within the newcomer.
Within the newcomer. I'm sort of a skull, a granola
scold or I just, I just hate the idea that it's recording me
without anybody, without anybody having to tell me.
And you know that's true. As reporters, it's very
important on our jobs to like, let our sources know if we're
recording them or not. So I would prefer to not be
automatically assuming that everyone's recording right.
On the other hand, you know, I sort of want to use it.
So it's one of these like norms where you're resistant, but
you're like, I don't know if the floodgates are going to open.
Maybe I'll just sort of I'll get on board.
You know, you can't you can't stop that level of societal
change. I mean, they claim, you know, my
understanding is, you know, it's not record this, it's very
semantic, but you know, they're they they process it, you know,
well, it's like a zoom recording you.
If you're not actually saving it, but it the computer hears
it, you know it's gone. So if zoom is not recording you,
then similarly this is listening and then it turns it into the
text and then it's gone. That's sort of, I think the
defense, but it is like it's I think it's like a word for word
transcript. So if you want some deniability
on what's said in your conversations going all that
would seem to undermine that. I spent like an hour looking
through like you state laws on how they talk about voice
recording and they're not, you know, they're they're just
varied. You know, it's it's like, and
there's all these sort of stray words that I imagine if you were
fighting about granola, you know, you'd be like, well, sure,
maybe you can say it's not recording, but they're, you
know, they'll say like transmit with granola to me.
In some ways it is argument for text.
So you're having these terrible voice meetings and they're like,
oh, let's make sure you have the text transcript.
And so some of this AI stuff we're constantly teasing out,
you know, is it the voice is inefficient and we need to get a
succinct text record or you know, but I don't, I don't know.
What do you think about that? I think, I mean it feels like
there's a utility for both, but it does seem like everything is
still sort of landing on text, which then would imply the need
for a big screen to manage all of this text for you.
And I think maybe with LLMS, there's a good voice to text
interface is pretty slick at this point as we know from
granola that seems to be a medium where this is working
rather well and there's lots of product innovation in this space
and why, why mess with something that's, you know, working well,
I feel. Like outside of Silicon Valley
there's still a lot of people resisting AI like or I find my
own family members are very reluctant to use AI.
I'm curious, are you seeing that when you're out about among the
the non Silicon Valley inclined? What's your read on there AI
embrace? Among the non-technical masses.
The. Normie masses among the normies.
When I return to the normies, I well, I have AI feel like I'm in
a I'm in a bubble a bit around a lot of my network is still very
in the tech world outside of this job.
But I do think that there is some resistance when I was I was
home last weekend with my family for in Austin, TX, which is a
tech happy city to be fair for the presidents day weekend.
And it seems like there's certainly some skepticism,
especially when just talking with, you know, family friends
coming through for the holiday. People were much more, I guess,
cautious, if not outright skeptical or a little suspicious
of a lot of this in a way that I think we forget about in this
bead. It's made me sort of more
bullish on Google, I'd say in that if people aren't willing to
like really dive in with Chachi BT because they're like just
aren't the messaging around AI is not sort of enticing them to
try it out. They are Googling things and so
Google can just sort of gently say, oh, you're, you have this
sort of question and you sort of slowly learn over time that you
can expand the types of questions you can ask.
It does sort of suggest that if there are these holdouts who are
not willing to like experiment with Chatchi BT that Google can
meet people sort of where they are.
We've also talked about this theme that the, the blank text
box is itself intimidating and that a lot of these AI products
are going to have to be more narrow anyway.
Let's talk about the foundation models, though.
Who? Who had the biggest many
billions on the belief that they will get the world to play with
their text box? Who?
Do you have the biggest news
this week? It was a range, obviously.
Mira Murati, former Open AI CTO. Her startup that has been long
rumored is officially launched. Thinking machines.
What changed? Didn't we?
She just came on the record and gave some friendly interviews
and said, yeah, that thing you'd heard, it's it is happening.
She didn't even say how much money they raised or anything,
right? There's been there's been no
public discussion from Thinking Machines about how much they did
raise Amira. Come on the podcast, you have so
many questions to answer. I, I, I just want, I don't think
I've seen this out there, but you know, she seemingly was
somewhat of a Sam Altman critic, right?
The board oust Sam, puts her in charge of open AI, and then she
rallies to Sam. Sam comes back, and then she
leaves the company. I, I don't know, like, what's I
just feel like that story doesn't make sense.
Like, if the board believes in you, many of many employees,
some of whom are now defecting to your company, believe in you.
Why not just, like be the leader of open AI like I, if you have a
desire to run a company. Yeah.
So you could run it all like. And it really does feel like if
she had stuck with the board, she could have won.
The biggest theory would just be like that she read the employee
base and felt like Sam was going to win.
I mean, the dark theory would be that Sam has some sort of like,
leverage point over her or is a very intimidating figure.
But it doesn't make any sense to me that she rallied all the team
defense, Sam against the board and then leaves and is
undermining our old company by building a competitor.
And she did take around 20 engineers from open AI to come
to thinking machines lap reminiscent of Ilya's company,
you know, safe super intelligence also poached a ton
of engineers. So it seems like the the all the
Co founders have gone off to fund their own thing and, you
know, pull away from what could have just been, you know,
forwarding towards the mission of AGI with the company that has
the most momentum behind it. In a previous episode, I, I
think I went on a rant about this very problem, which is
there's an insane collective action problem where you would
think all the top talent should stay at the same company and
ensure that one of them is super valuable.
But instead every individual actor says, well, maybe I should
have more spiritual control and more equity over the smaller
company that can surely raise a lot of money.
And so then they all sort of like shoot at each other, and
maybe it's going to undermine their collective valuation.
I wonder if it really does come down to just the equity
conversation, not to sound, you know, like, oh, it's about the
funding and not the mission because all of these companies
are very mission driven. A lot of them don't even have
products yet for these new offshoots.
At one point you have to consider that like a good
benefit of leaving is to own your own thing and create your
own thing. We're we're fans of that, you
know, at an independent media company.
So I mean, you are driven to the mission.
To your point, it does seem counterintuitive.
I mean, maybe the mission ultimately would just involve
I'm the one who can do it. You know, at a certain point
when you lose that faith and what's happening, you say I'm
the one that can do it better and that you get the added
benefit of the equity when you do it.
One theme I think we wanted to talk about is AI is making it
easy to build small companies, right?
I think the New York Times, Aaron Griffith, I just had a
piece highlighting that fact. The new Dick measuring in
Silicon Valley is no longer how much money you raise and how
many employees you have, it's how much revenue you can
generate with as few as employees as possible.
I mean I think people mid journeys in the list.
Who else? Oh Cursor for sure is on the top
of the list. And also just the speed in which
they've generated revenue is such an important metric too.
And you can do it with these tiny teams in the age of AI.
Isn't this what the media class has wanted?
Focus on profitability and unit economics?
I mean, now, honestly, I don't know how how ominous was Aaron's
story about this? I mean, there's the implicit
like, oh, AI is really coming for jobs if Silicon Valley is
now like, proudly doing things with as few humans as possible.
To your point there, the first jobs that were seemingly
automated away by AI were software engineers with coding
assistants. This is a use case for this
technology that's becoming very well and anyone can start a
company with a much smaller team because of these tools.
So ironically, a lot of what is the bread and butter of Silicon
Valley is something that is one of the 1st to go in the sort of
automation fears around how much productivity AI can unlock.
Which gives, I don't know, Silicon Valley moral credibility
and high ground. We're willing to kill our own
jobs. We can kill yours too.
You know, I, I mean, I, I am not like a Luddite.
I, I just absolutely do not think we should in any way slow
down technology because of our perceived impact on jobs.
Like we should try to build the best stuff we can as efficiently
as possible. And I think we need to fix that
on the sort of policy side and build a better safety net and
say, oh, maybe someday everybody doesn't have to work.
Obviously that is not the administration we have right
now, which is just like, oh, let's kill every government job
in the world. Like it doesn't make any sense.
But that's another episode. Let's talk about Brock.
I can't believe we've gotten this far in AI Brock.
Brock is honestly there's an argument that everybody else is
trying to make news to over shadow what their new model
release. It's been they're performing
quite well on a lot of benchmarks.
I don't have the latest on the leaderboard.
Well, I saw some debate, you know, that it's so early, but
you know, they have these chatbot arenas, I think.
And but then you don't know if it's apples to apples from from
the Twitter arguments among the AI crew that I saw, it seems
still an open question of whether rock was better on the
same playing field or if it was giving itself some sort of edge.
Part of this is what Grok had some of the most, if not the
most GPU access to train this, which then you don't know if
that's a positive in judging what they've been able to
produce or not, right? It's like it's scary because
they had so many GPUs, but now that it's out it's like it
wasn't so much better. In the era of deep seek, is that
really the flex that it once was?
You can train a model that is. Incrementally better on a much
lower stack. Although of course, you know,
there's some debate around how much of that cost of training
was actually really for the actual training itself.
However, it still seems that it was marginally less.
But still, with Grok, it is impressive.
If they have this massive GPU cluster, maybe less impressive
that the model made a good amount of progress, but more
incremental progress with this amount of power, but it's still
notable that they have this cluster.
It gives them a lot of leverage in this in the space.
And I would not count out Xai and Grok on the talent front,
even if they're not, you know, in the lead with Open AI and
Anthropic at this point in terms of model performance.
And they have access to Twitter and the disinformation miasma
that it is for good and bad. You know, they're going to.
I don't know. I'm Yeah, Elon seems to be going
on the deep end. Just before we got on this, he
was on CPAC. I'm actually in DC right now.
I think they're around here. I'm here for a venture in the
capital. Wonky DC BC conference that
speaking with Kara Fisher anyway.
But Elon was on stage. You seem like under the
influence and like was losing a stream of consciousness.
And at the same time, Grimes is, was she his wife?
No, just his the mother of the mother of some of his children
was tweeting at him that they one of their children is having
a medical emergency and she's been able to contact him.
Like, I don't know. And obviously this week, the
Ukrainian, the abandonment of Ukraine tonally has been
despicable. So I don't know this.
Obviously I'm no Trump and no Elon Trump fan, but just feel
like this could have been the week things jump the shark and
that they will hopefully lose the country.
But yeah, we'll, we'll see. With that wonderful, dark,
calamitous note about the state of our country, let's jump into
a really major funding round that feels more relevant than
ever. Your carrots, No politics.
We're talking about business again.
What's the funding round? Oh, the funding round is
Saronic, which is based out of Austin, TX.
And yes, it is kind of on theme, autonomous boats, so drone boats
for the military. For warfare.
OK, good. So Elon and Trump will be well.
Armed, uh, raked in a good 600 million in Series C funding in a
round led by Elad Gill. Some other participants were
general catalysts had not backed this company yet, but they did
back it for the first time in this round.
And then some existing investors, including a 16Z
caffeinated capital and 8 VC participated in this round,
which really feels like at this point kind of a who's who of who
backs, you know, American dynamism style defense tech from
the mega funds. We have Elad who is an early
investor in Anderl. We have a 16Z investor in
Anderl, 8 VC investor across all of these things, Joe Lonsdale
and then General Catalyst with their global resilience practice
and focus led by Paul Kwan. It's an A list ring of investors
for a massive funding round for autonomous boats.
We support defense tech investing require some sorry I'm
in a dark mood about the American government at the
moment, but previous before today I think I've supported
defense tech investing. But if we're, I don't know if
they're the boats are going to go to war on behalf of Russia,
that will be deeply troubling. Another honorable mention,
funding round and General Catalyst deal together AI which
helps startups fine tune and train models through rented GPU
space raised 305,000,000 at a $3.3 billion valuation.
It was Co led by General Catalyst and Prosperity 7
Ventures, which I believe is out of Saudi Arabia, but then
Salesforce Ventures, NVIDIA, Kleiner Perkins Emergence and
Lux also participated in the round.
So big up round in short. And coding starting up startup
Codium is apparently raising. Anyway, it's boom time.
It's still, I mean AI not we're not getting the same, you know,
foundation model investments that we once did.
But applications and infrastructure clearly are gonna
go strong this year. So and a lot of the tier one BCS
have a lot of appetite for it, have not slowed down.
Cool. Well, I think that's our show.
We'll see you next week. See you next week.