Observe and Q1 Reports

Top News

• Positive revenue reports! It’s that time of year (well, fiscal quarter, anyway), and Q1 revenue reports from tech companies helped to give the stock market a much-needed boost on Thursday. Amazon saw a 19% increase in online ad revenue, which hit $13.92 billion, while total Q1 sales came in at a massive $115.67 billion, besting Wall Street’s expectations. Meanwhile, Microsoft’s profits rose 18%, thanks to increased spending on cloud computing and AI. Meta shared that 3 billion people are now using WhatsApp every month, making it one of the few apps in history to ever reach that milestone. (Meta’s Facebook is also in the club.) Also reporting strong earnings was Reddit, which bested estimates and boasted to investors that it’s “well-positioned” to weather our uncertain economic climate.

• Mostly! Sadly, Airbnb bucked the trend. They reported “softness” in the travel market, particularly Canadians visiting the US, that has started to negatively impact their business. (Canadian visitors traveling to Mexico is up 27%, though.) Overall Airbnb revenue is up 6% from the same period a year ago, but net income fell to $154 million from $264 million. They’re blaming “broad macro uncertainty,” which does sound like the kind of thing that might cause Americans to take fewer weekend getaways.

• LMArena accusations: We’ve been closely following the saga of Chatbot Arena, which started as an academic project for evaluating large language models head-to-head, before pivoting into a for-profit startup. A new research paper from Stanford, MIT, Ai2 and the AI lab Cohere accuses the platform of preferential treatment, helping a select group of AI companies — but not their rivals — to quietly improve their positions on the leaderboard. The authors suggest that Meta, OpenAI, Google, Amazon, and other “industry leaders” were allowed to privately test several variants of their models, while keeping their initial test scores private. As this service was only offered to certain leading AI companies, the authors suggest it’s an unfair form of “gamification.” LM Arena co-founder Ion Stoica, a professor at UC Berkeley, told TechCrunch the paper was filled with “inaccuracies” and “questionable analysis.” We’ll keep tracking this one, as LM Arena has already become a relatively accepted and standard benchmark for AI model performance.

TWiST500

On Wednesday, TWiST 500 favorites Anthropic published a widely-shared blog post, urging the US government to enact tighter controls to prevent the flow of powerful AI chips into the Chinese market. Specifically, they want to reduce the number of chip exports permitted to so-called “Tier 2” countries, and prevent additional smuggling of the chips by pumping more funding into enforcement and security.

Anthropic’s post put them at odds with chip makers Nvidia. In a strongly worded response to CNBC, Nvidia somewhat passive-aggressively advises American AI companies to “focus on innovation” and “rise to the challenge” of Chinese competition rather than attempting to win the race via additional regulations. They point out that, regardless of US policy, China starts out with “half the world’s AI researchers” and “highly capable AI experts at every layer of the AI stack.”

Another Nvidia statement to TechCrunch mocks some of the specifics of Anthropic’s post, which cautioned of elaborate schemes to evade export controls, such as chips smuggled within fake “baby bumps” or “alongside live lobsters.”

Obviously, preventing China from keeping pace with American AI developers like Anthropic benefits Anthropic. But their blog post makes the case that this is not purely self-interest, but also patriotism. “Maintaining America’s compute advantage through export controls is essential for national security and economic prosperity,” the Claude makers explained.

Nvidia’s also staking out a somewhat predictable position on this one. Restricting exports of their chips cuts into their revenue stream, while free and open trade gives them more potential customers around the world. Huang’s in the midst of a large-scale campaign to convince President Trump to allow him to sell the company’s new H20 chips to the Chinese, despite concerns that they could one day power a rival supercomputer. So, at least at this point, the clash feels a bit less than academic and more personal. – Lon

A message from Fidelity Private Shares℠

Manage your cap table and data room, get faster, more accurate 409A valuation and fully automate your next financing round. Visit ⁠https://fidelityprivateshares.com⁠! Mention our podcast and receive 20% off your first-year paid subscription.

This Week in Startups

E2119: Jason, Alex, and Lon are joined for today’s full episode by crypto insider and “Hash Rate” host (and long-time friend of the pod) Mark Jeffrey. He’s here to walk us through Bittensor and TAO, which some are calling the third “great coin” after Bitcoin and Ethereum. Plus the latest from Meta’s first-ever LlamaCon for developers, Alexis Ohanian’s advice for cold email marketing, AND a chat with LayerNext CEO Buddhika Madduma about the secret to onboarding new customers.

E2118: On an all-new TWiST, Jason, Alex, and Lon are SHOCKED by Meta’s celebrity-voiced chatbots, which were caught flirting with underage users by Wall Street Journal reporters. Then they’re considering Palo Alto Networks’ purchase of Protect AI, debating another exciting match-up in our Founder Friday bracket competition, AND Alex sits down with Formulate founder Osmaan Shah.

E2117: On Friday’s TWiST, Jason, Alex, and Lon checked out Slate Auto’s customizable $25K EV truck, considered whether Discord is circling an IPO, and gauged Uber’s new collaboration with Volkswagen. Plus aggressive moves from Perplexity, another Founder Friday bracket matchup, AND Alex sits down with Tailscale CEO Avery Pennarun to talk internet networking: what it is and why it may just fuel the next huge wave of innovation.

TWiST Partner Offers

• Hubspot for Startups: Smart founders aren't piecing together random tools. Hubspot is the customer platform that thousands of startups use to scale efficiently. Get up to 75% off plus 3 months of Perplexity AI for free. Go to hubspot.com/startups.

• Squarespace: Turn your idea into a new website! Go to https://www.Squarespace.com/TWIST for a free trial. When you’re ready to launch, use offer code TWIST to save 10% off your first purchase of a website or domain.

• Oracle: Oracle Cloud Infrastructure, or OCI, is a single platform for your infrastructure, database, application development, and AI needs. Save up to 50% on your cloud bill at ⁠https://w⁠⁠⁠⁠ww.oracle.com/twist

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.

Founder University

Applications are open for Founder University Cohort 11, a 12-week remote pre-accelerator program tailored towards navigating early-startup practices, building an MVP, and growing traction. Submit your application at Founder University— Cohort 10 will kick off Summer 2025!

LAUNCH Accelerator

Are you a pre-Series A founder with a product in the market? Applications are now open for LAUNCH Accelerator's 35th cohort—starting Summer 2025—where you'll perfect your pitch, grow your business, and connect with top Silicon Valley investors. Apply here and take your startup to the next level!

The TWiST500 newsletter is the new, updated, and improved TWiST Ticker.