Wednesday, July 10, 2024

Welcome to TechCrunch AM! This morning, we’ve got EU probes into porn websites, Hebbia’s big raise and even bigger valuation, and Uber’s dilemma in California. We’re also looking at Microsoft leaving its observer seat on OpenAI’s board, the similarities between today’s AI hype and yesteryear’s dot-com bubble, how to turn CO2 into protein, why deep tech startups with technical CEOs raise more money and more. Let’s go!

TechCrunch Top 3

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OpenAI is done being observed: Months after Microsoft gained an observer seat on OpenAI’s board, the company is leaving the position of its non-voting seat. OpenAI said that after this change, it won’t have any more observers on the board. That puts to rest the speculation that Apple would gain such a seat. Not to worry, though. Microsoft still obviously has its hands in OpenAI dealings — the company owns 49% of the nonprofit after investing $13 billion. Read more

There’s big money in tech that helps you sift through boring materials: TC had the scoop a couple weeks ago that Hebbia, a startup that uses generative AI to search large documents and respond to questions, raised a big round. Now we have more details. The Series B closed at $130 million at a roughly $700 million valuation led by Andreessen Horowitz, with participation from Index Ventures, Google Ventures and Peter Thiel. With all the hype in AI, such a large round isn’t surprising at all. I do wonder, though, what kind of revenue will Hebbia need to pull to reach sustainability? Read more

EU legislation comes for porn: Adult content website XNXX has become the fourth porn site to be named a very large online platform (VLOP) by the EU and come under fire for failing to adopt measures to protect online users. Specifically, the bloc wants XNXX to provide more robust age-verification tools than a little pop-up that says, “Are you over 18? Yes? Okay, here ya go!” Read more

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Morning must-reads

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What’s it gonna take to get ride-hail drivers fingerprinted? Uber thought it blocked efforts to require its drivers to get fingerprint background checks in 2016. But by launching Uber for Teens in California, it inadvertently resurfaced the issue. Now there’s a debate going between Uber and HopSkipDrive, a ride-share service for kids, about whether a ruling that requires transport companies serving unaccompanied minors to fingerprint drivers should apply to Uber. Read more

Why AI companies should want regulation now: On this week’s episode of Found, we talked to Helen Toner, the former board member at OpenAI who caused a stir when she revealed that the board first heard about ChatGPT’s launch on Twitter. Toner says AI companies are at risk of their tech being treated like crypto and social media down the line if they wait for regulation to come on a whim. Toner argues OpenAI should be working with regulators for more favorable legislation today. Read more

Turning CO2 into protein? NovoNutrients is working on a way to do just that using microbes. The startup has raised $18 million in a Series A round led by Woodside Energy and CM Ventures, TC has exclusively learned. NovoNutrients’ path to market is not by building and operating commercial-scale plants, but rather by selling microbes and licenses to build, operate and maintain the facilities. A hub-and-spoke sort of model, if you will. Read more

Farewell prompt engineer jobs. We hardly knew ye: Looks like Anthropic is gearing up to automate the briefly hot job of prompt engineering, at least partially. The AI startup released new features to help developers create more useful applications on Claude, including an ability to generate, test and evaluate prompts using prompt engineering techniques to create better inputs and improve Claude’s answers. Read more

Index Ventures is on a tear: Index (one of Hebbia’s backers) has announced $2.3 billion in new funds to finance the next generation of tech startups globally. Some $800 million will go to venture investment and the remaining $1.5 billion are set aside for growth- and late-stage companies. While this fund is slightly smaller than previous ones, Index said the raise is appropriate for the current market, which has the potential to use AI to generate a wave of new startups. Read more

VCs like deep tech startups with technical CEOs: A new study has found that, in Europe at least, deep tech startups with CEOs who actually understand the science are more likely to raise larger funds. That’s particularly true if they add some business skills to their toolset, which is getting easier to do with the strong pipeline of university spinouts cropping up. Read more

Around the web 🌐

Russian disinformation campaigns, boosted by AI: Here we go again. The DOJ said it disrupted a Russian propaganda campaign backed by the Kremlin that was using AI to boost its spread of online disinformation, according to the AP. The scheme started in 2022 after a senior editor at the Russia state-controlled broadcaster RT helped develop the tech for a social media bot farm. As if Russia’s interference with the 2016 election via algorithmic manipulation wasn’t bad enough, now we have AI as a tool to magnify the chaos. Read more

AI has created a “fake it till you make it” bubble: James Ferguson of macroeconomic research firm MacroStrategy Partnership says the hype over AI has created a concentrated market bubble that’s akin to the dot-com era, reports Yahoo Finance. The veteran says AI is still largely unproven, and hallucinations might become more of a problem than AI companies let on. So, will this lead to a bubble burst, or is this just a standard hype cycle playing out? Because I thought “fake it till you make it” is just the Second Law of Silicon Valley? Read more

Google is over buying cheap carbon offsets: And it has thus stopped claiming that its operations are carbon neutral, reports Bloomberg. Are there even enough carbon offsets on the market to make up for the amount of energy Google is sucking up to power its AI? Not likely. Google now says it has a goal of getting to carbon neutrality by 2030, and it will use a more robust carbon-removal ecosystem to avoid or reduce emissions. Read more

Before you go 🌀

Not all heroes wear capes: Hurricane Beryl left almost 2 million utility customers in Houston without power, and hundreds of thousands may stay in the dark as Texas readies itself for a heat wave. The local utility company, CenterPoint Energy, offered no app to help residents track the power outages, so people got creative. They found that fast-food chain Whataburger’s app shows which stores were open and closed, which correlated with power outages. Genius! Read more