Pushback to the Future

Top News

• The AI executive order pushback begins: Despite the the recently-signed executive order forbidding it, some states are forging ahead with their own plans to regulate AI, in lieu of a federal standard. The EO has split the Republican Party, with some heralding it as a critical measure to ensure national AI competitiveness, and others viewing it as a giveaway to large technology companies.

• Thinking Machines Lab pushes Tinker to GA: After announcing limited access to its Tinker product at the start of October, multi-unicorn AI lab Thinking Machines has moved its first commercial service into general availability. Thinking Machines is perhaps best known for being founded by OpenAI’s former CTO, Mira Murati. However, with Tinker moving to accept more customers, we may hear whispered revenue growth metrics in the near future. Piles of investor capital have wagered that the startup will prove something special, after all.

• Serval is a rocketship: Serval, a startup building AI agents for IT tasks, just secured a $75 million Series B. The new round values Serval at $1 billion, mere months after it raised its Series A. How did the startup manage to raise such a substantial amount so quickly? 500% revenue growth since it last raised three months ago. That’s a simply bonkers pace of revenue expansion, putting the old ‘triple, triple, double, double, double’ method of reaching $100 million worth of ARR in five years to shame.

TWiST 500

TWiST500 startup Kalshi is working to make its “event trading available directly inside Phantom, one of the most widely used crypto wallets,” Forbes reports.

The news comes after Kalshi and arch-rival Polymarket both notched impressive partnerships this year, including:

• CNN tapping Kalshi as its prediction market partner

• The NHL partnering with both Kalshi and Polymarket

• Google Finance working with Kalshi and Polymarket

• Kalshi partnering with CNBC

• Yahoo Finance picking Polymarket as its prediction partner

Media deals, data provider deals, sports deals, and even crypto deals? It’s been an insanely busy year for the prediction market category. Investors have taken note, pushing the value of both Kalshi and Polymarket to the stars in recent months.

Now it’s up to the two companies to fend off incumbents — sports betting services in particular — that are edging into the prediction market game. And to beat each other back from eating too much share, while extracting enough revenue per trade to make the numbers square up.

Something I am super interested in: what impact the intense competition we see today for prediction market market share will have on pricing. Polymarket’s fee structure is very user-friendly, but the company will need to print cash to grow into its price tag, for example.

But let’s not be gloomy; let’s not be rude. Instead, hats off to both companies for going on a legendary partnership run this year. — Alex

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This Week in Startups

E2222: It’s a VC Roundtable, featuring special guests Bryan Kim of a16z and David Clark of Ven Cap. On the docket: Boom Supersonic’s innovative new turbine-based revenue stream, Bill Gurley’s iconic “Miss By a Mile” post about calculating TAM, why it’s so important for founders for remain relentless, the discourse surrounding the “AI Bubble,” and much more.

E2221: It’s a tasty TWiST parfait, with three different founder-focused layers. First, Lon and Alex look back at a 2016 chat between Jason and Zapier mastermind Wade Foster, about running an entirely remote team, raising seed money back in ‘12, and why MS Office was, at the time, their Holy Grail of integrations. PLUS Alex chats with Alembic’s Tomas Puig about the next generation of marketing analytics AND a brand new entry in our Gamma Pitch Deck competition.

E2220: Ads are probably coming to ChatGPT, but not JUST yet. Though a screenshot that appeared to show a Target ad in ChatGPT results spread like wildfire around social media, in fact, that was just one of those “brand integrations” allowing you to shop for Target merch within the popular chatbot. On TWiST, Jason and Alex dig deeper into the inevitable arrival of chatbot ads, and wonder aloud if anyone at OpenAI is really thinking deeply about how this will work, and how to confront backlash from a public that prefers their outputs ad-free.

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