Top News
Microsoft apes the labs: The hottest gig in Silicon Valley today (apart from AI researcher) is the forward-deployed engineer. A sort of embedded sales engineer, FDEs are expected to parachute into enterprises and help them become fully AI-pilled. OpenAI is investing in the effort. Anthropic, too. And now Microsoft is joining the fun, with a $2.5 program called ‘Microsoft Frontier Company.’ Where will the value accrue in the AI race? At a minimum, in the pockets of our FDE legions.
Cloudflare takes on Google: Irked that some search engines are trying indexing to AI accessibility, Cloudflare will allow (and prompt) websites that use its services to automatically block agents and AI training runs by default. Search indexing will be allowed by default, naturally. Whether Cloudflare has enough market clout to force major search engines to change their tune on this matter remains to be seen, but you have to love an iconoclastic tech company taking on hyperscalers directly.
Z.ai goes to the (coding) mattresses: Claude Code has proved a gusher for Anthropic; Codex is performing well for OpenAI. Now Z.ai, the makers of the popular GLM family of open-ish models, is getting in on the fun. For between $18 and $160 per month, you can use Z.ai’s AI models and its new Zcode harness instead of an American offering. The prices aren’t too different from what we see from domestic AI labs in raw dollar terms; let’s see how the market reacts. As Z.ai is public, we’ll get the numbers in due time!
TWiST 500
First, TWiST is off tomorrow due to the holiday. We hope that if you celebrate, you have a lovely time with your family. (Our Wednesday venture capital roundtable was a blast to record, hope you enjoyed listening as much as we did making it for you!)
And speaking about patriotic action, how do you rate OpenAI’s plan to offer up to 5% of its equity to the government? The American AI lab has been pressing to move from a privately owned company to a public-private partnership, pitching the idea of a sovereign wealth fund repository to collect AI equity for collective ownership.
5% of $1,000 billion is $50 billion, by the by. That’s more than four dozen billion, just from OpenAI alone under the scheme. Small pieces of pie, this pitch is not.
I hate this idea. But as OpenAI would not unilaterally dilute, I doubt it will come to pass, because how are you going to get Alphabet to join the 5% fun? Or Microsoft? Or any other cloud giant that trains its own models? But the saga does paint an interesting picture of how the two most valuable TWIST500 companies are faring in today’s market: Uncertainly, and well.
That AI labs are growing quickly is not new. That the government has both its hands in their model release schedules is. From that perspective, the OpenAI idea of — in my view — effectively bribing the government into not harming its business operations — why slow the growth of a company that you are a part owner of? — makes some sense. But isn’t it sad that we’ve reached this point? Apparently, it’s now conventional wisdom that the only way to beat state capitalism is with state capitalism. Or perhaps socialism with American characteristics?
Happy Fourth of July, everyone. — Alex
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This Week in Startups
E2307: Forget the triple-triple-double-double-double; the new bar for startups hoping to raise venture capital has reached the stratosphere, though our venture panel is worried that startups are focusing too much on today’s problems that may not become companies tomorrow. During a lively VC roundtable, Cowboy’s Aileen Lee, Floodgate’s Mike Maples, and Lerer Hippeau’s Ben Lerer joined Alex to dig into exiting pre-AI startups, rising valuations, token spend, why they are keeping their funds small, and whether the government just tripped OpenAI and Anthropic!
E2306: It’s the debut of our new Summer 2026 series “TWiST All Stars.” We’re inviting back some of Jason’s favorite guests from throughout the long history of the pod, and we’re kicking things off with one of his “Besties,” investor and 8090 co-founder/CEO Chamath Palihapitiya. He’s talking about the groundbreaking development platform, which is helping enterprises save money and protect their data by building out their own internal software. Plus he shares with Jason his origin story, why he started the Learn With Me and Drink With Me communities, his advice for young people graduating college in the age of AI, and more.
E2305: Jason calls in from Hawaii for a new Friday TWiST, joined by co-host Lon and SKN Systems CEO Lyall Davenport. He’s designed a new kind of sensor tape that gathers aerodynamic data from cars in motion, at an incredible rate of 420M data points per hour. Find out how he hopes this tech can replace the old-fashioned wind tunnel simulators employed by racing companies like F1, along with future applications in defense, transportation, and beyond. Plus Jason’s thoughts on the government blocking OpenAI’s new models, why Apple’s Vision Pro chief defected, the growing data center backlash, and more.
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