Sunday, August 25, 2024

AI hype reaches the secondary market

Sunday, August 25, 2024

While it's not news that VCs are excited about AI startups (see, for example, our lists of this year's top AI deals in the U.S. and Europe), Rebecca Szkutak looks at VCs who are so eager to bet on AI that they're buying into each others' special purpose vehicles (SPVs) at high prices — sometimes as high as 30% above the last funding round.

Is this just a natural response to a huge opportunity? Maybe! It's possible that these deals will spread the benefits around to smaller VCs when the winners exit. But it could also be a sign of an AI startup bubble, particularly when you consider that SPV owners generally have less info and influence over a company.

Keep reading to see what else TechCrunch is covering this weekend.

Weekend news and opinion

Image Credits: Mical Jeanlys-White

WealthMore is building "wealth management meets Peloton": Dominic-Madori Davis profiles WealthMore, a startup that aims to normalize investing for regular people. In fact, founder Mical Jeanlys-White said her grandmother (an immigrant from Haiti who served as her family's unofficial money coach) would have been the target customer. Read more

Stephen Wolfram is asking big questions about AI: Stephen Wolfram (known for developing Mathematica and Wolfram Alpha) told Ron Miller he's had "horrifying discussions" with AI companies that haven't seriously considered the implications of their work. To ask the right questions, he suggested turning as much to "traditional philosophy" as "traditional STEM." Read more

Google commits $250M to support journalism in California: Google recently announced that it's joining a deal to support California newsrooms. Kyle Wiggers looks at what the deal might accomplish and which organizations are opposed. Read more

What else we're reading 📖

Bloomberg traces how YouTube and Spotify have overtaken Apple Podcasts as the listening app of choice. A general lack of investment seems like a big issue, as is a lack of support for video. Read more

Meanwhile, Defector discusses how musician Chappell Roan's relationship with fans reflects broader changes in the dynamics of online celebrity. Read more