Hayden AI sues its own co-founder

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Hayden AI vs. Chris Carson: Executives at the San Francisco startup — which designs spatial analytics AI tools allowing cities to keep streets safer and fine tune their mass transit systems — have filed suit against their co-founder and former CEO. Carson is accused of taking “numerous fraudulent actions,” from selling stock without authorization, stealing a large quantity of proprietary data, forging the signatures of his board members, and good old-fashioned misappropriation of funds. Carson has already created a rival company, EchoTwinAI, which he claims was in reaction to “retaliation I experienced from Hayden’s board following my departure.” This is not some random spat between former colleagues; Hayden AI is currently valued at around $464 million.
Anthropic to take DoW to court: It’s a big day for legal proceedings here in the newsletter. In a new blog post on Friday, Anthropic CEO Dario Amodei announced that the company will fight the Department of War’s declaration that it’s a supply chain risk, saying “we do not believe this action is legally sound.” Amodei suggests that the regulation DoW is using as a basis for the designation has a “narrow scope” by design, aimed at protecting the government rather than punishing private companies. Amodei also apologized for the internal memo he wrote which was leaked to the press, in which he referred to OpenAI’s Pentagon deal as “safety theater” and suggested that the White House opposes his company because of a lack of donations to President Trump’s personal projects rather than a philosophical disagreement about AI and combat. He writes: “It was a difficult day for the company, and I apologize for the tone of the post.”
Robinhood launches venture fund: The fintech app unveiled its inaugural venture fund, which includes a number of high-profile private tech companies. (The focus is on mature, late-stage companies, less risky opportunities than their early-stage counterparts. The list includes Databricks, Ramp, and Revolut.) As with so many other $HOOD initiatives, the goal is to open up private markets and iconic startups to retail investors. The IPO offered 12.6 million shares, and launched at $25 a share, coming in a bit below market expectations. It’s trading under the symbol RVI.

TWiST 500

It turns out, the guy who got famous for cheating on his exams might not have been entirely truthful when he was rolling out his startup. I know, crazy, right?

Roy Lee made his TWiST debut almost exactly 1 year ago today, when he was still a Columbia student infamous for cheating on his job interviews via a one-way AI window, not visible to proctors on Zoom calls. Roy soon after turned his proprietary system — originally dubbed InterviewCoder — into a consumer product. The result was Cluely, a system designed to allow people to “cheat on everything” — so long as it required a laptop or computer screen.

Back in July, Lee told TechCrunch that the nascent Cluely was already bringing in $7 million in annual recurring revenue, adding “every single person who has a meeting or an interview is testing this out.”

As it turns out… that was not entirely accurate. An X skeptic reposted the headline this week, noting that — at a $20 per month price point — Cluely would have needed over 29,000 paying customers to hit that ARR. That’s a whole lot of conversion for a project that, by most accounts, only occasionally worked the way it was meant to, and a company that seemed to pivot largely around viral marketing campaigns rather than cutting-edge products and features. Lee personally responded, noting that the ARR at the time of the TC post was actually closer to $5.2 million than $7 million. He calls this “the only blatantly dishonest thing I’ve said publicly online,” while maintaining that the company has for sure reached profitability.

Cluely has pivoted from its original concept, and is now a more conventional AI-powered note-taker rather than a surreptitious way to look things up on the fly. Will the product be enough to get the company across the finish line, even without high-profile marketing gimmicks and promises about cheating empowerment? That remains to be seen. – Lon

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This Week in Startups

E2258: Big Wednesday show. We’ve got Erik Voorhees from privacy-forward Venice AI giving us the behind-the-scenes story of becoming OpenClaw’s default model (temporarily). PLUS Logan Allin of Fin Capital shares how he’s using generative AI to place smarter bets on founders. All that and two demos: George Pickett brings us into the OpenClaw Studio and David Kaufman shows us how Siteline helps keep track of agentic activity.

E2257: Jason welcomes OpenClaw Foundation board member (plus founder and investor) Dave Morin to take us inside the organization, and talk about its goals and where OpenClaw should go from here. PLUS diving into the mounting rivalry between OpenAI vs. Anthropic: who does Dave think will win? THEN we’re checking out two more awesome demos from Greg Kara of Runtools and George Yameen of PickleWatch.

E2256: OpenAI raised the largest private funding round in startup history, giving away 15% of the company to Amazon, Nvidia, and SoftBank in exchange for $110 billion. We’re digging into the deal, and why Jason predicts the bendiest J-Curve in history for the LLM industry. PLUS Nick O’Neill checks in from the crypto chaos unfolding in Miami Beach, and THREE more amazing OpenClaw (and related) demos.

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