Chrome if you want to

Top News

• Perplexity wants to buy Chrome: According to WSJ, the AI startup offered Google $34.5 billion for its Chrome browser division, telling reporters that several “large venture-capital funds” have already agreed to back the transaction. Recall, Google may be forced to sell its browser as a means of addressing antitrust concerns. US District Judge Amit Mehta previously ruled that Google has an illegal monopoly on the online search market, and is currently mulling what to do about it. Meanwhile, Perplexity recently launched its own browser, Comet, which has AI features built in; taking over the Chrome brand would obviously blast these efforts into hyperdrive.

• Musk and xAI threaten to sue Apple: In a viral post to the X app, CEO Elon Musk accused Apple of an “unequivocal antitrust violation,” alleging that the hardware giant has made it “impossible for any AI company besides OpenAI to reach #1 in the App Store.” (xAI’s Grok is hanging back at #5 as of publication time.) Musk suggests xAI will take “immediate legal action” to remedy the situation. OpenAI CEO Sam Altman soon responded, accusing Musk of prioritizing his own posts on the X platform. (The two continued going at it for several hours into this morning.)

• Claude is ready for longer prompts: API customers of Anthropic’s Claude Sonnet 4 model can now enter prompts as long as 75,000 lines of code, or 750,000 words. (For context, TechCrunch notes that that’s more text than contained in J.R.R. Tolkien’s “Lord of the Rings” trilogy.) This expands Claude’s previous cap by roughly five times. Most everyday AI users will never need this much capacity, but whereas OpenAI relies on the general public for the bulk of its revenue, Anthropic’s Claude has become a favorite for enterprises via its API. So they need to prioritize those customers, using Claude for more complex, code-related tasks than medical advice or companionship.

TWiST500

Over just the past few weeks, “Chatbot Psychosis” or “GPT Psychosis” has gone from a quietly discussed phenomenon in some circles of the tech industry to a widely-shared mainstream concern. Every day, we get more articles filled with anecdotes about otherwise-mentally stable individuals who spiraled into something approaching madness after spending time speaking with ChatGPT.

The narrative came to a head this past week with the launch of OpenAI’s latest model, GPT-5. While Sam Altman and Co. touted its new features, faster speed, and increased capacity, many users who had emotionally grown attached to the previous model — GPT-4o — complained that the new release lacked the same personality and spark of humanity. These complaints were particularly voluminous on Reddit, which now hosts a number of sub-communities dedicated entirely to discussing personal relationships with AI chatbots. Ultimately, OpenAI restored access to 4o for subscribers to quell complaints, while Altman publicly mused about emotional LLM attachment on social media.

Though it’s now entered the general American discourse, the potential for being so-called “oneshotted” by spending too much time with AI has not dimmed the public’s enthusiasm for the technology, even a little bit. TWiST 500 startup Character.ai now has more than 20 million users, and told Wired they’re on track to hit $50 million in revenue by the end of this year. In a likely attempt to sidestep the “GPT Psychosis” allegations, the company now defines itself as as an AI “role-play” startup, rather than utilizing the more triggering phrase “AI Companion.”

As well, new data from Appfigures suggests that demand for AI companionship is growing rapidly among global consumers. 128 AI companion apps have been released in 2025 so far, and the market overall is on track to generate $82 million in the first half of the year alone, JUST ON MOBILE DEVICES. AI companion apps have been downloaded more than 220 million times on Apple and Google’s app stores this year. That’s a whole lot of people chatting with bots every day, and if even a tiny percentage of them ultimately develop neuroses or delusions, that’s a lot of mental health treatment we’re going to have to sort out some day soon. – Lon

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This Week in Startups

E2163: Jason, Alex, and Lon are back together and discussing… what else… GPT psychosis! Is it real? What are the biggest warning signs? PLUS, thoughts on Trump’s Chinese export fees on AMD and Nvidia, why Jason was so upset at the NY Times exposé on Mark Zuckerberg’s Palo Alto compound, a new magnet for rare-earth minerals, and much much more.

E2162: Jason and Lon are flying solo on this special TWiST edition! They’re talking about why Apple seems to have lots its innovative edge, and whether or not it’s time for Tim Cook to make for the exit. PLUS the new GPT-5 is here and it’s… kind of not that exciting, Ripple acquired Rail, Bumble’s running out of steam, and much much more.

E2161: On a huge, action packed TWiST, Jason and Alex investigate Luckin Coffee’s (potentially CCP-backed?) takeover of Manhattan, explain why Disney is sunsetting the iconic Hulu streaming app, probe the difference between open-weight and open-source AI models, look ahead at OpenAI’s big GPT-5 announcement, PLUS they welcome Zach Dive of Adam.new to explain why he made a deepfake ad starring JCal. The nerve!

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Angel University is Back!

Jason and Mike Savino are hosting our next virtual Angel University workshop on Tuesday, October 7. Jason will share proven strategies he’s used to invest $100M+ in 300+ startups over the past decade. Whether you’re new to angel investing or looking to sharpen your skills, this is your chance to learn directly from one of the most active angel investors in the world. Register now at angel.university!

TWiST wants to hear from YOU!

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Founder U is coming to the MENA region!

Our 12-week pre-accelerator—designed to help early-stage founders build and grow—kicks off this fall in Saudi Arabia. The first cohort launches in Riyadh on November 3rd, followed by in-person and virtual sessions throughout the program. Founders in MENA: this is your chance to turn your idea into a business and get world-class insights on building a successful startup. Apply today: https://mena.founder.university/

SF Live-Work Space Now Available

Need a flexible living and working environment in San Francisco? This thoughtfully designed loft-style residence at 787 Bryant St., the heart of the vibrant SOMA district and the city’s creative hub, is now available for rent or purchase. Check the listing for more details.

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