TikTok: Still on the clock

Top News

• OK, TikTok can stay…: President Trump announced yet another TikTok reprieve, once again extending the deadline for Chinese owner ByteDance to either divest itself or face a total US ban. This is the third deadline extension the beloved video app has received via White House executive order so far this year. Congress passed a law requiring the company to alter its ownership structure, due to national security concerns, last year and the Supreme Court upheld the legislation in January, but so far, Trump has declined to enforce anything.

• Google is training AI with YouTube: CNBC reports that Google has been using YouTube videos to train its AI models, including Gemini and the Veo 3 text-to-video generator. Google confirmed the report, but suggested it’s only using a small subset of the 20 billion videos on YouTube for training purposes, and that its use is consistent with all pre-standing agreements with independent creators. However, CNBC also spoke with some of these creators, and they largely claimed to have zero knowledge that their work was being used to train AI.

• Is ChatGPT making us… dumber?: Not to go all AI doomerism in today’s issue, but a new study from MIT’s Media Lab is worth at least a glance. Subjects composed SAT-style essays — one group worked alone, one group used Google search, and a third utilized OpenAI’s ChatGPT — and had their brains monitored via EEG. The group using ChatGPT demonstrated consistently lower brain engagement and “underperformed” on neural, linguistic, and behavioral tasks. Worst yet, the ChatGPT users seemed to get “lazier” as the study went on, increasingly depending on AI over the course of the essay writing, until they ultimately resorted to just copy-and-pasting the text. (Separately, OpenAI ALSO warned that its latest models could potentially help bad actors in designing biological weapons. Yikes!)

TWiST500

Scale AI’s time in the TWiST 500 may be coming to an end, now that the company is part-owned by the very public Meta.

BUT one related trend COULD prove massively significant to a number of TWiST 500 companies. Bloomberg reports that Scale AI’s competitors in the data labeling and annotation space may be poised to massively benefit by its absorption into the House of Zuck.

A lot of Scale’s largest clients, including Google and OpenAI, have already signaled their intention to cut ties with the company. That’s potentially hundreds of millions of dollars in fees headed to other companies that provide similar services.

The list includes a lot of startups that aren’t yet on the TWiST 500 but which we’ll be looking at much more closely in the next few weeks. Startups like Snorkel AI out of Redwood City, which recently raised a $100 million Series D at a $1.3 billion valuation to build out its programmatic data development technology. Or Invisible Technologies, which has helped companies like DoorDash, OpenAI, Amazon, Microsoft, and Cohere work through their complex data problems.

We often talk about how some of the most valuable AI companies won’t necessary be building models or applications, but the “picks and shovels” that make their work possible. Refining and upgrading the training data model makers require is a prime example. – Lon

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This Week in Startups

E2140: On a Wednesday TWiST, Jason and Alex consider Amazon CEO Andy Jassy’s cautionary AI memo to staff, Pano AI’s $44M raise to detect wildfires with drones, OpenAI’s big podcast plans, and Traversal’s emergence from stealth. PLUS Actuality founder Rishabh Gupta stops by to explain how they’re improving the RFP process.

E2139: It’s time for a fresh TWiST! Alex and Jason are investigating Meta taking a 49% stake in Scale AI, and ponder Zuckerberg’s motives behind this mega-deal. Plus tactical advice for founders looking to capitalize when major incumbents stumble, why the US Navy is recruiting defense startups, Jason flirting with AI doomerism, and much much more.

E2138: On a brand new TWiST, Jason and Alex break down Stripe’s bet on crypto wallets, the big return of M&A activity, and the rapid rise or warehouse robots taking over jobs from human workers. Plus Tesla’s FSD tests, Disney’s copyright battle against AI platforms, and lots more good stuff.

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LAUNCH Accelerator

We’re hosting an in-person Demo Day for LA34 in SF on July 16 from 9a-12p PT, the latest cohort from Jason Calacanis’ Accelerator.

If you are an early-stage investor and interested in attending, please reach out to [email protected].

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!

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