Top News | AI rules rise: Meta has informed the EU that it won’t sign the European Union’s code of practice for general-purpose artificial intelligence, the WSJ reports. Why not? Meta argues that the code of practice is legally uncertain, and goes “far beyond” what the EU’s AI act formally requires. While AI regulation in Europe proves controversial, we Yanks are not too far behind. The American executive branch is gearing up to release is own set of policies and rules. Axios reports that they could include the US government only sourcing AI models from ‘neutral’ providers, which then raises the question: neutral according to whom. Don’t do fraud: But if you do, and you get caught, turning yourself in is probably the right thing to do. So at least Christine Hunsicker, founder of fashion startup CaaStle, got that part right. She’s been charged with “wire fraud, securities fraud, money laundering, aggravated identity theft, and lying to financial institutions,” TechCrunch reports, in an impressive set of transgressions. Founders mostly move mountains, but in every cycle, some wild behavior spills out into the open. And it’s mostly boring stuff, not what Deel (allegedly) brought to the table recently viz Rippling. This is one such case. xAI eyes MENA compute: As OpenAI taps Google and Amazon mulls investing more into the AWS-using Anthropic, xAI is also hunting up new compute capacity in the Middle East. Semafor reports that the Musk-backed AI company could lock down extra data center capacity in Saudi Arabia or the UAE. Both countries are working on AI infra, through HUMAIN and G42, respectively. Indeed, with its ample for solar power, the MENA region could become a compute hub in the coming years. Diversifying economies in the region would certainly welcome more demand for their reforged economic model.
| TWiST500 | It’s been an incredibly busy week for the TWIST500. But there’s still a little bit more to discuss before we all head off into the weekend. | Cursor is perhaps the hottest startup in the world today. There are larger private venture-backed companies, like Stripe and Databricks. And the AI foundation model companies are titans in their own right. But the most exciting startup? That’s probably Cursor, which has scaled to $500 million worth of annual recurring revenue at a torrid pace. | And it’s not slowing down! TechCrunch reports that Cursor is buying Koala, an AI-infused CRM provider that raised a $15 million Series A earlier this year. Now, some of Koala’s “top engineers” will join Cursor to “build out a dedicated enterprise-readiness team,” TechCrunch writes. | Notably the company’s core product is not making the leap, nor will the remainder of the Koala team. This looks like another AI talent transaction that strip-mines a startup, leaving either a carcass behind or an asset on life support. | Of course, trading shares in Koala for shares in Cursor might work out for backers of the former, so long as the effective ‘price’ of the deal included an equity component. In today’s AI game, you are either growing so fast you are rewriting the startup handbook, or you are roadkill. Koala introduced a new version of its product in April. Precisely what happened there will become clearer after the companies formally disclose the transaction, we presume. | For now, that’s a wrap. More from the TWiST500 on Monday! — Alex | A message from AWS | AWS Activate helps startups bring their ideas to life. As you build and scale your business, Activate Credits* grow with you to support your changing needs. Apply to AWS Activate today and receive up to $100,000 in credits. Visit aws.amazon.com/startups/credits | *All AWS Activate Credits are in USD and subject to the AWS Promotional Credit Terms & Conditions. | This Week in Startups | E2152: Jason’s in Silicon Valley this week with Launch Accelerator’s Cohort 34, and he and Alex are going deep on VC Geoff Lewis’ perplexing social media activity, the ENORMOUS seed rounds going to relatively early-stage AI startups, and they’re crunching the numbers on just how long it takes before data centers turn profitable. Plus, WHO will be the next CEO of X, the Everything App? Polymarket’s sharps want to know… | E2151: On a brand-new TWiST, Jason and Alex are considering Windsurf’s abandoned OpenAI deal and the meaning of the term “blitzhiring.” Then Jason’s making some BOLD predictions about AI’s future impact on the job market, a look at Tesla’s NSFW new Austin robotaxi coverage map, a fond remembrance for the SnapStream live TV archiving service, and MUCH more. | E2150: On TWiST Friday, Jason and Alex consider just how xAI’s Grok 4 leapfrogged OpenAI, Google and others to become the top-ranked AI model (of the moment, at least). Plus why some AI startups are still raising their prices, even as the cost of running LLMs drops considerably. We’ve also got Ben Seidl of Autolane in the our studio in ATX to talk autonomous commerce and the future of the urban curbside. Check it out! | TWiST Partner Offers | Vanta: Compliance and security shouldn't be a deal-breaker for startups to win new business. Vanta makes it easy for companies to get a SOC 2 report fast. Get $1,000 off for a limited time at http://www.vanta.com/twist. Northwest Registered Agent: Starting your business should be simple. With Northwest Registered Agent, you can form your entire business identity in just 10 clicks and 10 minutes. From LLCs to trademarks, domains to custom websites, they’ve got you covered. Get more privacy, more options, and more done—visit https://www.northwestregisteredagent.com/twist today! Bolt: Don’t be left behind. Build apps quickly without knowing how to code with Bolt.new. Try it free at Bolt.new/twist.
| Founder U is coming to the MENA region! | Our 12-week pre-accelerator—designed to help early-stage founders build and grow—kicks off this fall in Saudi Arabia. The first cohort launches in Riyadh on November 3rd, followed by in-person and virtual sessions throughout the program. Founders in MENA: this is your chance to turn your idea into a business and get world-class insights on building a successful startup. Apply today: https://mena.founder.university/ | LAUNCH Accelerator | Our current Accelerator batch is graduating! Watch 11 strong startups pitch to Jason and our investor-judges. We are livestreaming the event on Monday, July 28th at 12:30 PM PT. Register here. | 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. | The TWiST500 newsletter is the new, updated, and improved TWiST Ticker. |
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