Chapter and Traversal

Top News

The friendly AI SRE: Traversal burst out of stealth this week, announcing itself, its product, and $48 million worth or quietly-raised capital. What’s so exciting that Sequoia and Kleiner Perkins led its two first rounds? Traversal wants to use AI agents to take on tasks that would normally be handled by human site reliability engineers, or SREs. Given that SREs are both critical and expensive, you can see why companies might be willing to pick up an AI solution. At a minimum, computers can observe a lot more data at once than those of us made of flesh and blood. Perhaps we can automate away the busywork and keep humans in the loop for more complicated tasks?
Amazon expects AI job loss: Amazon CEO Andy Jassy’s latest memo underscores the vibe in the tech world about AI progress, and the need for human workers more generally. Jassy writes that while Amazon expects some cuts, and some short-term hiring due to the rise of genAI in the workplace, over time he anticipates that the company will need fewer humans to operate. The hint the CEO is sending to staff — and he’s far from the first to do so — is that you had best get aboard the AI train, lest you are left at the station. Now we’re wondering if AWS wants to swap some SREs for what Traversal is cooking up.
TerraPower scoops $650M: We have a handful of fusion-focused startups on the TWiST500, because if any one of them cracks it, they’ll be ranked among the most valuable companies of all time. But humble old atom-splitting is having a moment, too, as AI power demands soar ever skyward. Enter TerraPower’s new, massive funding round to expand its small, modular nuclear power business. As GeekWire notes, TerraPower is hardly new to raising gigarounds, but all the same, it’s good to see clean power get more juice.

TWiST500

Lon and I have the next set of TWiST500 entrants nearly locked, so expect more on that tomorrow (or Friday at the latest).

Today’s TWiST500 news is more controversial, you might say. Recall that OpenAI is working hard to retool its corporate setup so that it can go public in the future. The latest version of the plan is a public-benefit corporation under the auspices of a wealthy non-profit.

At least, if Sam Altman gets his way. Standing in his path, however, is Microsoft. The tech giant bet huge, and early, on OpenAI. And for a while, Microsoft compute and OpenAI technology really were a match made in heaven. Lately, however, as the two giants have come into increasingly close competition in areas like search and code generation, the relationship has become strained.

So it may not be a shock that OpenAI and Microsoft are struggling to come to terms over what Redmond will get in the new structure that Altman wants to put into place. Arguments over Microsoft’s equity stake and other issues have become so fraught that the FT reports that “Microsoft is prepared to walk away from high-stakes negotiations with OpenAI over the future of its multibillion-dollar alliance.”

No, that wouldn’t wrap up the era of Microsoft-OpenAI, as the two firms have a deal through 2030. But if Microsoft says no thanks to what OpenAI has in mind, the two companies are going to prove frosty roommates for the next half decade. And, presumably, OpenAI won’t do as well without its preferred structural reformation.

What a mess. Most likely, the two firms work it out, and what we’re seeing in the press is little more than two companies trying to publicly whack the other into giving ground. Or not. But I suspect that OpenAI will get most of what it wants, once Microsoft calculates the minimum it’s willing to accept, and then getting just a bit more. — Alex

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This Week in Startups

E2140: On a Wednesday TWiST, Jason and Alex consider Amazon CEO Andy Jassy’s cautionary AI memo to staff, Pano AI’s $44M raise to detect wildfires with drones, OpenAI’s big podcast plans, and Traversal’s emergence from stealth. PLUS Actuality founder Rishabh Gupta stops by to explain how they’re improving the RFP process.

E2139: It’s time for a fresh TWiST! Alex and Jason are investigating Meta taking a 49% stake in Scale AI, and ponder Zuckerberg’s motives behind this mega-deal. Plus tactical advice for founders looking to capitalize when major incumbents stumble, why the US Navy is recruiting defense startups, Jason flirting with AI doomerism, and much much more.

E2138: On a brand new TWiST, Jason and Alex break down Stripe’s bet on crypto wallets, the big return of M&A activity, and the rapid rise or warehouse robots taking over jobs from human workers. Plus Tesla’s FSD tests, Disney’s copyright battle against AI platforms, and lots more good stuff.

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LAUNCH Accelerator

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If you are an early-stage investor and interested in attending, please reach out to bianca@launch.co.

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