Meet the new Claudes... not the same as the old Claudes...

Top News

• A new AI coding champ? TWiST500 giant Anthropic released Claude Sonnet 4.5 today, an upgrade to its well-known mid-sized model lineup. The new model is reportedly quite good at writing code, though Every puts it one step below OpenAI’s GOT-5 Codex for some tasks. Anthropic also upgraded its API, and teased a vibe-coding service. (For those keeping track of AI costs, Claude Sonnet will cost $3 per million input tokens, and $15 per million output tokens.)

• Soon you will shop inside ChatGPT: Not to be outdone, OpenAI released new parental controls for its ChatGPT service, and a new ‘Agentic Commerce Protocol’ that will, along with tech from Stripe and partners like Shopify and Etsy, allow users to buy items directly from ChatGPT. As ChatGPT has 700 million weekly active users, shares of Shopify and Etsy soared after the news dropped (6% and 16%, respectively). How will OpenAI profit from this setup? Users get the feature for free but they’re charging a “small fee on completed purchases.” With OpenAI continuing to invest heavily in compute infrastructure, the company is understandable working to open a variety of new revenue streams. (Hence the rumors about ads coming soon to your ChatGPT outputs.)

• xAI contests speech limits in India: X, the xAI social media service formerly known as Twitter, is fighting with the Indian government over its ‘Sayhog’ portal, which allows government bodies to demand that online content be taken down. X argues that Sayhog allows for “content removal based solely on allegations of ‘illegality,’ without judicial review or due process for the speakers, and threatens platforms with criminal liability for non-compliance.” The company intends to appeal “to defend free expression.”

TWiST 500

Today on This Week in Startups we took a look at Huxe (a ChatGPT Pulse competitor) and Phia, an AI-imbued shopping service. Jason put both onto the radar for possible TWiST500 inclusion.

But in today’s column, I want to focus on Paid.ai, a TWiST500 startup we had on the show a few weeks back. Paid’s gist is that it wants to build pricing tools for AI agents. Yet another “AI for x” startup? Not exactly. Instead, Paid is taking a very thoughtful approach to how AI agents should be priced. This is not a small question, as traditional SaaS-style subscription fees could lead to dramatic underpricing of how much compute a particular agentic task consumes.

As I learned while chatting with Paid.ai founder Manny Medina, the amount of work that an AI agent has to do to complete a task can vary greatly, even if it’s sticking to the same workflow time and time again. For example, a customer support interaction could be solved in a few seconds; or, a customer could potentially send in sheafs of text that much be parsed and responded to. You don’t want to charge the same amount for both, as you’d either dramatically overcharge for the value delivered in one case, and run a massive loss against delivered value in the second.

So what is the value of an AI agent doing a quantum of work? Medina thinks we should consider not just what it costs to deliver, but also what it would take to pay a human to do the same work. Bundle those together, compare the result to the competitive landscape, and you have a good pricing estimate.

Then you have to implement it. And Paid wants to be your partner in all that. Perhaps that’s why the company just raised a massive ‘Seed’ round. — Alex

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This Week in Startups

E2184: AI agent designers Factory raised $50M at a $300M valuation, prompting Jason and Alex to ask… how much capital is TOO MUCH? And are we facing down an AI coding bubble? PLUS a look at the very rapid rise and fall of the Neon app, some big questions about TikTok’s seemingly tiny US valuation, xAI sells Grok to the government for just 42 cents, AND Jason introduces us to a new category of AI Slop… THINKSLOP.

E2183: What is “workslop”? In this TWiST, Jason, Alex, and Lon consider a new study out of Harvard and Stanford that finds many workers are using AI tools, but lazily and ineffectively, ending up creating MORE work for their colleagues. Could this explain the OTHER studies showing a lack of productivity gains from AI adoption? Maybe! Plus YouTube invites back banned creators, Stripe buys back its own shares, and much more.

E2182: We’re Alex-free this Monday, so Jason and Lon work their way through the day’s biggest tech and startup news. First up, did the Trump administration borrow and then super-size Jason’s H-1B visa proposal? It sure sounds like it. PLUS the latest on TikTok USA, the explosion of Scandinavian data centers, a new launch video for AI virtual assistant startup Howie, and much more.

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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 $200M+ in over 500 startups. 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!

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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