The Pulse #98: Is there a GenAI startup cooldown or not?
Plenty of signs point to a cooldown happening, but there’s also GenAI mega-funding rounds. Also: Polyfill.js supply-chain attack, the importance of internships, and more.
The Pulse is a series covering insights, patterns, and trends within Big Tech and startups. Notice an interesting event or trend? Send me a message.
Today, we cover:
Industry pulse. Volskwagen partnering with Rivian to get better software, SaaS scaleups struggling to raise, EU unhappy with Apple’s DMA non-compliance, why so few tech IPOs, and more.
GenAI startup cooldown? Plenty of signs point to a cooldown across GenAI startups: many are struggling to generate meaningful revenue, there’s a drop in seed-stage AI VC funding, and also some AI startup fire sales. At the same time, we see massive funding rounds at the likes of Perplexity, Mistral, and Cognition Labs. Can the market be hot for large companies and chilly for smaller startups at the same time?
Popular Javascript library infested with malware. More than 100,000 websites started serving malware after the unpaid maintainer of polyfill.js sold their project, and the new Chinese owner started to inject malware into sites. This is yet another reminder to audit dependencies, and prepare for more attacks in the future.
Proof that well-run internships matter. One of the first interns I hired at Uber seven years ago, is still at the company. It all started with a well-organized internship, where our goal was to achieve returning interns who wanted to come back next year.
1. Industry pulse
Volkswagen to Rivian’s rescue?
Rivian is a popular EV maker in the US, producing the Rivian R1T; the first electric pickup truck. The vehicle is known for its impressive range of around 400 miles / 650km, off-road capability, and innovative features.
But the automaker is in financial trouble, following a successful 2021 IPO. As we covered in April, the company is at risk of running out of money in a few years time:
The company’s current market cap reflects the risk of a potential bankruptcy down the road: in 2021 RIvian was valued at $150B: but a week ago, it was down to $10B.
This week, things changed for the better. Volkswagen announced a joint venture with Rivian, in which the German automaker provides $5B of capital, and in return, Rivian’s software powers Volkswagen cars.
This partnership seems like an ideal solution to both company’s problems. Rivian has great vehicles and software, but needs money. Volkswagen has plenty of cash, but its software is known to be terrible and buggy, to the point that it costs the company customers. I previously test drove a Volkswagen EV, the ID3 model, and its unresponsive software – alongwith reviews stating the same – was enough to not spend more time evaluating it.
This must be what a “win-win” looks like! Congrats to Rivian; and hopefully Volkswagen’s customers also benefit from this venture.