Monday, May 5, 2025

Welcome to TechCrunch AM! This morning, we're looking at the concerning hack of a chat log archiving app; why AI chatbots need to stop milking engagement; and why SpaceX's launch site is now a city. We've also got fresh funds for fintech; the burgeoning AI talent from LatAm; a funeral for Skype; Anysphere's huge raise; Tether's AI play; Brazilian "kidfluencers"; chatbot deities, and more. Let's go! – Rebecca

TechCrunch Top 3

Image Credits: Bryce Durbin/TechCrunch

1. Hack Attack: TeleMessage, which provides modified versions of encrypted messaging apps like Signal, Telegram and WhatsApp, has reportedly been hacked. That's especially scary given the news last week that (now) former U.S. National Security Adviser Mike Waltz was using TeleMessage, likely to archive messages from Signal. Read More

2. Slop factory: Instagram co-founder Kevin Systrom says AI chatbots are 'juicing engagement' by pestering users with follow-up questions, instead of just giving them useful insights. It's the same playbook that social media companies have used in the past, and Systrom argues it'll hurt AI companies in the long run. Read More

3. The Network State: Elon Musk's SpaceX is getting its own company town after residents around the company's launch site in Southern Texas voted to incorporate as a city. It'll be named Starbase, and most of its residents are SpaceX employees. Read More

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Morning Must-Reads

Image Credits: MoneyFellows

🇪🇬 Cracking the model: Cairo-based MoneyFellows has managed to do what few other fintechs have: lend significant amounts with almost no debt or balance sheet exposure. Off the back of a $13 million pre-Series C round, the startup is shifting from steady growth to regional expansion. Read More

👀 Eyes on LatAm: U.S. tech companies are increasingly hiring Latin American developers to support post-work training on LLMs, and Brazilian startup Revelo is taking advantage of this trend by supporting a talent network. The company says it's seen a surge in demand for expert coders from clients like Oracle, Dell, and Intuit. Read More

🪦 RIP Skype: Skype made video-calling mainstream, and after 23 years of connecting people around the world, the Microsoft-owned service is shutting down. Skype users can migrate all their contacts and chat data to Microsoft Teams, or they can transition to another service. Here's a list of alternatives

💸 C.R.E.A.M: Cursor-maker Anysphere has reportedly raised $900 million at a $9 billion valuation. The fresh round of funding was led by returning investor Thrive Capital, with a16z and Accel also doubling down on their previous investments in the startup. Read More

😣 Welcome to the AI job crisis: Duolingo said last week it would replace contractors with AI and become an "AI-first" company, which some are taking as a sign of the onset of the AI jobs crisis. Another signal? The unusually high unemployment rate for recent college grads, the sort of entry-level white collar jobs that AI is perfect for replacing. Read More

Around the Web

🔮 Crypto doubles down on AI: Tether has entered the AI chat, reports CoinDesk. The stablecoin has launched Tether AI, a "fully open-source AI runtime […] to enable USDT and Bitcoin payments" between a peer-to-peer network of billions of AI agents. Read More

🙌 First there was social media, now people have AI chatbots to distort their perceptions of reality. A Rolling Stone article explores the phenomenon of self-styled prophets who claim they have "awakened" chatbots and accessed the secrets of the universe through ChatGPT. Their families are concerned, to say the least. Read More

🤳 Obrigado: Brazilian "kidfluencers" are on the rise, fueled by a desire to help their families pay bills and chase stardom. The problem — besides the obvious mental health repercussions — is that many of these kids are selling "get-rich" schemes, and platforms like TikTok might be monetizing young creators who don't yet have the right to work, per Rest of World. Read More