Thursday, August 1, 2024

Welcome to TechCrunch AM! This morning, we're looking at yet another case of startup fraud, more lobbying from AI companies, and a round of layoffs that caught employees by surprise. We're also looking at AI regulation, Reddit calling out AI companies for scraping data, Indian startups tempering IPO expectations, and more. — Rebecca

TechCrunch Top 3

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1. AI companies are scrambling: This is the election year that could influence future AI regulation, and AI companies are busy lobbying to make sure laws end up in their favor. OpenAI, for example, has already spent $800,000 on lobbying in the first half of this year, compared with $260,000 in all of 2023. Read More

2. The SEC flexes the long arm of the law: After charging the founder of BitClout with fraud, the agency is now coming after the founder and CEO of social media startup, IRL. The regulator says Abraham Shafi made false and misleading statements about the company's growth and used company credit cards to pay for personal expenses. Read More

3. Bungie lets go of 17% of staff: Employees of the game studio that created massive hits like Halo and Destiny say they were caught off guard by the layoffs, which hit 220 staffers. Many apparently found out about the layoffs through social media posts. Not a good look, Bungie. Read More

Morning Must-Reads

Image Credits: DrAfter123 / Getty Images

🔍 The Copyright Office has some thoughts on AI: The U.S. Copyright Office has issued a report on how AI may affect its domain. Its first recommendation? Pass a new law right away to define and combat AI-powered impersonation. "The speed, precision, and scale of AI-created digital replicas calls for prompt federal action," the agency wrote. Read More

🦾 EU's AI Act comes into force: The EU's law to regulate AI comes into force from today, starting the clock on a series of staggered compliance deadlines that will apply to AI companies. While most provisions will be fully applicable by mid-2026, some rules like restrictions of law enforcement using remote biometrics in public places, will apply in six months' time. Read More

🪫 Meta's facing a big problem: Mark Zuckerberg feels Meta will need 10x more computing power to train Llama 4 compared to Llama 3, and it's going to start building up the capacity. Meta's capex in Q2 2024 rose 33% to $8.5 billion YoY, driven by investments in servers, data centers and network infrastructure. AI's a costly business indeed. Read More

📉 Indian startups are tempering their IPO expectations: Two large Indian startups, Ola Electric and FirstCry, are ready to head to the public markets, but their IPO price targets indicate lower valuations than the price tags they enjoyed when private. The more conservative stance reflects a shift in startup valuations, as companies try to cover their butts before subjecting themselves to public scrutiny. Read More

🤝 Are we in M&A Land now? Open-source compliance and security platform FOSSA has acquired developer community platform StackShare, which is used by 1.5 million developers to discuss, track and share the tools they used to build apps. The acquisition started, as many do, with a simple partnership. Read More

🧻 Google plays nice with fledgling startups: Google Cloud is giving Y Combinator startups access to a stockpile of Nvidia GPUs and Google tensor processing units so they can build AI models. Google's obviously cozying up to promising early-stage AI startups, probably so it can devour them when they grow big enough. Read More

Around the Web

🤑 Reddit wants AI companies to pay for content: Reddit CEO Steve Huffman has said that AI operators like Microsoft, Anthropic and Perplexity need to pay up if they want to keep scraping the site's data without permission, according to The Verge. "It's been a real pain in the ass to block these companies." Read More

🎱 Telegram launches Mini App Store: The messaging platform is adding mini apps that live within its app, like games, AI generators and other tools. The new Mini App Store will make it easier to access Telegram's in-app browser, according to 9to5Google. Read More

🛬 Delta complains about CrowdStrike outage: The airline's CEO said CrowdStrike's blunder, which knocked out Microsoft devices around the world, is costing Delta $500 million after it had to cancel more than 5,000 flights. The figure includes not only lost revenue, but also the millions per day the airline had to spend on compensation and hotels for passengers, reports CNBC. Read More

Before You Go

Image Credits: Rafael Henrique/SOPA Images/LightRocket / Getty Images

🗺️ Give the people what they want: Google Maps has announced a ton of new features, but somehow none of them were 'Pause Navigation.' It's a little thing, but how nice would it be to not have to exit the navigation and start it back up after stopping for food or fuel? Anyway, the features Maps did introduce seem to make it more like Waze, which is cool, too. Read More