It's all a question of Scale

Top News

• Scale cuts staff: After a partial sale to Meta (and the loss of its CEO), Scale AI is trimming its remaining staff. Reporting indicates that around 200 people are being shown the door, along with an additional 500 contractors. Recall that Meta bought just under half of the data labeling startup for more than $14 billion, leading to many customers deciding to halt their work with the remainder of the company. For now, Scale is working away at defining its next chapter. One that will, it seems, come with a lowered operational cost basis.

• The AI talent shuffle continues: After just a few weeks at Cursor, two Anthropic researchers are…heading back to Anthropic. We’ve heard of short tenures during the present AI wave, but that has to be some sort of record. Elsewhere, OpenAI has lost more talent to Meta’s superintelligence team, but if these dueling memos have any truth to them, those folks are not exactly heading for a cushy utopia, but instead to a somewhat dysfunctional team that’s working through a necessary retooling.

• Via’s going public: Sure, we’re waiting for Figma to file an S-1/A, but while we gnash our teeth at Zoink, other companies are also prepping for a run at the public markets. Including Via, whose transit-focused software service has filed privately for a listing. TechCrunch reports that the company wanted to list as far back as 2021, and raised $110 million in 2023 at a valuation of $3.5 billion. Sure, Figma will make a larger splash, but Via could ensure that we get at least two unicorn debuts this quarter.

TWiST500

Yesterday, Lon noted just how newsy the TWiST500 has been lately. Today is no exception.

Our friends over at The Information report that investors are considering a $100 billion for Anthropic in its next funding round. Given how quickly the foundation AI model company grew from a $1 billion run rate to a $4 billion revenue pace, $100 billion might sound cheap. But ALSO given that AI model shops tend to burn a LOT of cash, you can understand why we aren’t seeing anyone affix a 100x multiple to Anthropic’s dog tags.

In the mix are the margins. Anthropic’s are getting better, as are OpenAI’s. That might seem like a small point against torrid revenue growth, but what’s better than simply stacking more top line is ensuring that as you scale, while your economics improve at the same time. That, as you know, is what we might call nascent operating leverage.

All this is to say that OpenAI, Anthropic, xAI, Mistral, Cohere and the other model companies on the TWiST500 might not be done raising inside this calendar year. Thus, the venture industry should become even more levered against future AI success.

As an AI bull, that bothers me little, though I am not the person who has to go back to LPs with a sheepish grin if the global AI adoption curve lags current expectations! — Alex

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This Week in Startups

E2151: On a brand-new TWiST, Jason and Alex are considering Windsurf’s abandoned OpenAI deal and the meaning of the term “blitzhiring.” Then Jason’s making some BOLD predictions about AI’s future impact on the job market, a look at Tesla’s NSFW new Austin robotaxi coverage map, a fond remembrance for the SnapStream live TV archiving service, and MUCH more.

E2150: On TWiST Friday, Jason and Alex consider just how xAI’s Grok 4 leapfrogged OpenAI, Google and others to become the top-ranked AI model (of the moment, at least). Plus why some AI startups are still raising their prices, even as the cost of running LLMs drops considerably. We’ve also got Ben Seidl of Autolane in the our studio in ATX to talk autonomous commerce and the future of the urban curbside. Check it out!

E2149: It’s a brand-new TWiST, and Jason and Alex are considering all the news that matters to founders and investors. Today that includes Tesla’s plans to introduce Wifi hotspots within their rides, Nvidia’s historic $4 trillion valuation, Perplexity’s slick new AI powered browser bringing the fight to Google’s Chrome, Waymo’s new “teen” accounts, and lots more. Plus Tim Ranzetta stops by to talk about financial education and his nonprofit, Next Gen Personal Finance.

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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 this fall with in-person and virtual sessions. Founders in MENA: this is your chance to turn your idea into a funded company and get world class insights on building a successful start-up. Apply today: https://www.mena.founder.university/

LAUNCH Accelerator

Our current Accelerator batch is graduating! Watch 11 strong startups pitch to Jason and our investor-judges. We are livestreaming the event on Monday, July 28th at 12:30 PM PT. Register here.

Want to Work for This Week in Startups?

We’re looking to fill two in-person sales positions at our Austin, Texas HQ! First, a high-performing Sales Executive to help us seek out and promote clients, sponsorships, branded content, and more. Plus an experienced Sales Manager to lead, coach, and scale our sales executive team, while setting performance goals. Love the podcast and have B2B sales experience? We want to hear from you!

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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