Musk’s xAI raises fresh capital while Synapse’s bankruptcy could impact millions

May 28, 2024

Elon Musk's xAI has raised a staggering $6 billion in funding to bolster its position in the AI race against giants like OpenAI. Meanwhile, the bankruptcy of Synapse threatens to disrupt the fintech sphere, potentially affecting millions of users and numerous companies. The episode also uncovers innovative tactics for fighting misinformation, including a new strategy called 'pre-bunking' being tested by Google ahead of the EU elections. Lastly, an insightful review of Terra One's pitch deck sheds light on its growth strategy and potential investor concerns.

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INSIGHT

xAI's Funding and Competition

Elon Musk's xAI raised $6 billion in Series B funding, valuing the company at $18 billion pre-money.
This move positions xAI to compete with OpenAI, Microsoft, and Alphabet in the AI race.

ANECDOTE

Synapse's Collapse and Fintech Interdependence

The banking-as-a-service startup Synapse collapsed and filed for Chapter 7 bankruptcy.
This impacts approximately 10 million customers and 100 fintech companies, including Copper, highlighting the interdependence in the fintech sector.

ADVICE

Pitch Deck Essentials

Focus on the problem's significance and whether people are willing to pay for a solution.
Ensure the solution addresses customer needs and clearly explain the business model in the pitch deck.

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We’re kicking off the short week with news about Elon Musk, and no, it’s not about X or Tesla. Instead, we’re talking about Musk’s other other company, xAI. In a blog post this weekend, xAI announced it raised $6 billion in Series B funding, confirming earlier reports that the AI startup was looking to raise at a pre-money valuation of $18 billion. With Andreessen Horowitz, Sequoia Capital and Valor among its backers, it looks like Musk is taking steps to catch up and compete with the likes of OpenAI, Microsoft and Alphabet.

The ongoing AI race was only the beginning of what we covered on today’s episode of Equity. This morning, Becca Szkutak dove deep into the collapse of Synapse, a banking-as-a-service company whose bankruptcy could impact an estimated 10 million end customers and 100 fintechs, including teen banking-focused Copper. While this is not the only troubling headline in the fintech space, as our co-host Mary Ann Azevedo put it, “it shows just how treacherous things are for the often-interdependent fintech world when one key player hits trouble.”

To wrap up this morning’s news segment, we also discussed a report from The Washington Post that election officials and researchers are considering a new approach to combating misinformation called “pre-bunking.” Companies like Google are testing it out in the lead up to the European Union election, but we remain skeptical about how successful the technique could be.

Haje closed out the show with another Pitch Deck Teardown, this time examining Berlin-based Terra One’s deck. The startup just raised a cool $7.5 million to make sure Germany’s clean energy isn’t going to waste. Listen through to the end to hear how they made it happen!

Equity is TechCrunch’s flagship podcast, produced by Theresa Loconsolo, and posts every Monday, Wednesday and Friday. Subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

You also can follow Equity on X and Threads, at @EquityPod. For the full episode transcript, for those who prefer reading over listening, check out our full archive of episodes over at Simplecast.

Credits: Equity is produced by Theresa Loconsolo with editing by Kell. Bryce Durbin is our Illustrator. We'd also like to thank the audience development team and Henry Pickavet, who manages TechCrunch audio products.

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