Apple's lawsuit couldn't come at a worse time for OpenAI

Apple filed a trade secrets lawsuit against OpenAI last Friday, and it's not messing around. The complaint alleges a pattern of misconduct reaching all the way up to OpenAI's chief hardware officer and claims more than 400 former Apple employees now work at the company. OpenAI's response so far has been carefully hedged, and the timing couldn't be worse with the company reportedly eyeing an IPO as early as later this year. On this episode of TechCrunch's Equity podcast, hosts Kirsten Korosec, Anthony Ha, and Sean O'Kane dig into what the lawsuit could mean for OpenAI's own hardware ambitions and IPO timeline, plus a bigger theme running through the week's news: how much should anyone trust AI companies with their data? Listen to the full episode to hear more about: Why Microsoft CEO Satya Nadella is warning enterprises about handing data over to AI labs, and whether open source is really a way out of the “Trojan horse” data-trust problem How forward-deployed engineers (FDEs) are changing the relationship between AI labs and their enterprise customers Why General Catalyst just handed David Beckham's health drink startup a $1 billion customer value fund The scoop on a new $200M drug-discovery startup from an ex-OpenAI researcher Subscribe to Equity on YouTube, Apple Podcasts, Overcast, Spotify and all the casts. You also can follow Equity on X and Threads, at @EquityPod. Chapters: 00:00 Intro 00:40 Would you want Sam Altman listening to you? 01:53 Apple sues OpenAI over trade secrets 13:24 Satya Nadella's warning: "you're paying twice" with your data 19:03 Open source vs. going deeper with AI labs 24:52 General Catalyst gives David Beckham's health drink startup $1B 30:05 Ex-OpenAI researcher raises $200M for drug discovery startup 32:58 Outro Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  This episode of Equity is brought to you by Schneider Electric. Schneider Electric, your energy technology partner.

• 0:05Kirsten Korosec?

  Apple sued OpenAI and OpenAI is starting to push back. Also this week, Microsoft's Satya Nadella had a surprising warning about AI. And we're keeping our eye on a couple of deals this week, including why General Catalyst just gave David Beckham $1 billion.

• 0:29Kirsten Korosec?

  Hello and welcome back to Equity TechCrunch's flagship podcast about the business of startups. I'm Kirsten Korsak, Transportation Editor here at TechCrunch. And I'm joined, as always, by our Weekend Editor, Anthony Hot, and Senior Reporter plus Special Projects, Sean O'Kane. And I'm wondering, aside from all the sports, which I know you guys aren't watching, what are you working on professionally?

• 0:54Speaker 00

  I just got back from a science fiction convention, so I'm just catching up on everything, especially since we didn't have a news wrap-up episode last week. I feel very behind, but I'm rapidly getting caught up.

• 1:07Speaker 02

  Yeah, I'm trying to figure out what this whole soccer thing is.

• 1:11Kirsten Korosec?

  Yes, for our audience, that is my slight dig with because I keep on trying to bring the World Cup into this, and it is not going to happen. But I do want to ask a question to both of you, which is not sports-related. And Anthony, I'm wondering, do you want Sam Altman to be listening to you? Yes or no?

• 1:32Speaker 00

  No. I mean, depending on what we mean by listening, listening to me in the sense that when I say something he does is bad, he should listen, sure, of course, he should listen to me. But in the sense of eavesdropping or using my data or stealing industry secrets, not that I have access to many, I would say not so much, which I guess this is going to color multiple themes that we're going to be talking about today, one being the high-profile lawsuit that Apple has filed against OpenAI.

• 1:58Kirsten Korosec?

  Yes, there's been a lot of news around OpenAI this week, as always, but a couple of things that got the most attention. One, the company is working on what looks like a mobile screenless device that maybe you could just carry around in your pocket and will be like the next generation of compute and will be listening to you, hence my question. But also, Apple has sued OpenAI, and that is important for a number of reasons besides the fact that this is two giant tech companies, you know, that are potentially going to be in a very interesting trial with each other. So back to my question, Sean, with that context for our audience, how do you feel about Sam Altman listening to you with a little device maybe in your pocket?

• 2:43Speaker 02

  I'm good. And maybe that's predictable, but I'm good. Like, yeah, no thanks. I mean, like, yeah, we'll get into it, I'm sure, but this is allegedly the first product that OpenAI has been working on in its hardware division with Johnny Ive and company. They've been really coy ever since that weird video they put out last year of them sitting, you know, at that coffee shop or bar in San Francisco and sort of talking very vaguely about hardware and legacy devices, meaning laptops and phones. And if this is the direction they're headed in, you know, all power to people who want to have somebody like that sort of always listening to them. This is not going to be for me.

• 3:25Speaker 00

  Well, and I think part of what we have to remember about those kinds of devices is also that if you, depending on how mobile it is, right, is that it's not just listening to you, it's listening to the people around you. And so, you know, I might be fine with it, I'm not fine with it, but let's say I was. But then if I, if we met up in person, it disrupted, then suddenly it might be listening to all of us. And I feel like there's all kinds of, you know, social norms that are going to have to be renegotiated if these things become widespread. And I think we should make fun of and criticize people who record other people without consent.

• 3:55Kirsten Korosec?

  Well, I bring up the device that has been speculated about for a really long time, actually, and we'll see what it really ends up being once it's officially introduced. But it's important in the context of this lawsuit that Apple filed last Friday was, you know, the biggest news of the week, certainly. And this is a trade secret lawsuit, and it has some pretty wild allegations. And we should very much emphasize these are allegations that have been filed in a complaint by Apple. But really, what it is accusing OpenAI of is a pattern of misconduct at the highest levels, specifically directed towards OpenAI employees who used to work at Apple.

• 4:38Kirsten Korosec?

  And in fact, they've named the Chief Hardware Officer Tang Tan in this lawsuit. And this is all important because Apple is accusing OpenAI of essentially stealing their trade secrets, but in the context that this could be then used for a competing hardware product. Maybe we don't get into like whether this lawsuit has merits because we haven't gone through full discovery, but what are your initial impressions of the lawsuit aside from the fact that, wow, this is going to be entertaining?

• 5:07Speaker 02

  I mean, yeah, you nailed that. Two things. One, this is, you know, a pretty big risk potentially to whatever it is OpenAI is working on. I mean, even setting aside whether or not the court grants any kind of like injunctive relief or any kind of restraining order over what OpenAI is doing, it just naturally can lead to that sort of situation where it's going to cause some delays in what OpenAI is working on, which I'm sure was probably part of the reasoning behind Apple doing this. They don't do this stuff willy-nilly. They usually come when they feel like they have a case for this stuff. The other is that we think that OpenAI is, I mean, we know that they filed confidentially for an IPO.

• 5:50Speaker 02

  We think it might happen as early as the end of this year or early next year, if you believe Sam Altman's sort of cautious language around the IPO. And this just raises a whole bunch of questions around that because, you know, on the one hand, we think their business right now is probably overwhelmingly the software. They're not really factoring in any hardware business into that picture at the moment, but like, they're about to go to the markets and they're going to be pitching bankers and investors on where they think their addressable market should be. And if they have a big amount of that pegged to a potential hardware division and hardware products, this could be a huge risk to that and changes a lot of the calculus of sort of how the IPO gets processed. So that's where my head's at.

• 6:31Speaker 00

  Yeah, I mean, one of the things that also jumped out to me in terms of what Apple is claiming, which I don't think OpenAI has really commented on, I mean, they've sort of broadly sort of denied, you know, the allegations. But one that I assume that Apple must have pretty solid, like, numbers on is they just said that, I think, like, more than 400 Apple employees now work at OpenAI, which, you know, granted, both of them are very large companies with, you know, many thousands or tens of thousands of employees. So like, as a percentage, it's not necessarily huge, but that, that seems like a lot of people in a pretty serious talent drain. And the other thing I'm wondering is, related to Sean's point, you know, with the context

• 7:10Speaker 00

  of the potential IPO, is how much damage did OpenAI ultimately take from like a marketing and brand perspective from the trial it already went through? That, you know, that it seemed to, you know, basically win, but like, there was a lot of kind of not terrible, but kind of embarrassing, like, kind of dirty laundry that came out in like the testimony. And to what extent are they just like, we do not want to go through that again? Or did they sort of take the lesson of, hey, we like, we went through it and we survived and we'll be okay if we have to do another trial with Apple?

• 7:43Kirsten Korosec?

  Oh, I fully predict the latter, by the way. I think that they'll steamroll ahead. And the reason why I say that is because their comments publicly so far, they have been very careful with language and this, their most, which is a little bit of an understatement, and I'm going to read it, but the recent statement, which the company confirmed to me, they say, while we take these allegations seriously, we're not aware of any evidence that this complaint has merit. That's a very interesting way to phrase that. And it's not a non-denial denial, but it is a bit of a hedge.

• 8:24Kirsten Korosec?

  And my big question to them, which they did not answer, is are you conducting your own internal investigation? I assume that they are. And so the question is, is this just too many lawyers, you know, in the, you know, the kitchen, so to speak? And we got some lawyerly language in there? Or are they unclear, actually, about? What might have happened and they're in the midst of finding that out. I think that how aggressive they are in the courtroom will come down to what they are about to find out or in the midst of finding out right now. And I will say, circling back to the IPO, I think it could have some major implications to when this IPO actually comes about.

• 9:09Kirsten Korosec?

  Because the last thing you want is Apple suing you in the midst of that. I mean, Apple is still a massive company with a, you know, trillion dollar market cap. So I think that OpenAI is going to want to resolve this quickly, if it can, without admitting any wrongdoing. So we'll see what that's like. I mean, I'm kind of wondering if it's going to be a little bit like the Waymo Uber trial back in 2017, which was super entertaining and gave us lines like, laser is the sauce. And that ended up settling after five days. But it was interesting because it was directed towards a employee, Anthony Levandowski, but he wasn't named specifically in the suit.

• 9:54Kirsten Korosec?

  So we'll see if it mirrors that experience.

• 9:58Speaker 00

  One other thing to mention about that statement was that it was a slight, almost like a tweak on the statement they were releasing before. Because initially, they put out one statement that's sort of generic boilerplate saying, hey, we're not interested in stealing anyone's trade secrets. And then they sort of upgraded the statement to say, we're not aware of any evidence to back up Apple's claims. And so it's interesting to sort of imagine what the conversation was where, you know, clearly, I, we have to assume multiple people signed off and said, okay, like, this is not, that was, you know, the old statement. Now we need to like move to the new statement because it reflects some sort of new state of affairs. Even though to most people, I would assume that if you, you know, read the two statements, you're like, oh, they're basically saying the same thing.

• 10:42Speaker 00

  I think the other thing that this reflects is also just, again, kind of an obvious point, but how the relationship between OpenAI and Apple has deteriorated in the last couple of years. That a couple of years ago, like, you know, ChatGPT was supposed to be a big part of the revamped Siri, and that didn't really seem to work out. And now, of course, they're potentially competing on the hardware side. And so these two companies that seem to be kind of frenemies or even allies, now it really seems like they're kind of preparing for all out war.

• 11:10Speaker 02

  Yeah, I want to say sort of my piece on that statement. Before I even get into that, like, I think this is like so many things, like a Rorschach test for how you feel about OpenAI. I think on the one hand, no one has really, there aren't many people who are going to come forward and say, wow, this is a company that communicates really well and clearly. They're, you know, they're run by a person who is regularly accused of being sort of two-faced and not very forthcoming with his employees or with other people around him. And so I think those are things to take into consideration here. If I had to speculate, I read that statement as, you know, knowing how many hands probably got on that ball. The people who are in charge of protecting the company, AKA the lawyers at all,

• 11:54Speaker 02

  leaving room in there for the company to, you know, eventually back away from some of these claims that may wind up pinned a bit more on the employees who are named defendants. You know, you read through this complaint, and I recommend people do if they haven't already. It's, you know, certainly it's coming from one side and one perspective. And you always have to be careful about how, even when things are quoted, which looks damning, how they are quoted, what context is missing from those quotes, et cetera. Take all that into consideration, but it's, you know, it's a very specific lawsuit. I've seen trade secret lawsuits in the past, some even involving Apple, that don't go as far as this one does. This is a heavily detailed complaint. And so it just makes me wonder how that plays out.

• 12:37Speaker 02

  The other thing here too is, I think, just to remember the dynamics. Whether or not OpenAI was directing people to do some of the stuff that's claimed in this lawsuit, whether or not these employees were actually doing these things, the pressures are there. I mean, there are so much pressure working against you as a software services company if you want to be distributed, at least in the United States. And you always have to go through Google and Apple. And with Apple, you're paying a lot of money, up to a third of your revenue that you're making in these transactions on the platform. And so for OpenAI to get to a point where they're, you know, maybe fed up with how much money they're handing over for people signing up for ChatGPT when they're actually paying for it, building your own device and building your own ecosystem is not an easy way, but it's a way around all that.

• 13:21Speaker 02

  And so this, again, sort of gets in the way of that attempt, whether or not that attempt was ever going to be successful in the first place.

• 13:30Speaker 00

  Well, I wonder if it's time to move on to another topic in the theme of how much do we trust these AI companies? And this is a statement from Satya Nadella, CEO of Microsoft. And again, of course, like a close partner of OpenAI, although certainly some reporting around whether that relationship has seen some tension. But he basically said, hey, actually, you know, be careful what information you are providing to these AI labs. And that essentially, he used this idea that when you pay for, for usage of these AI tools, you're essentially paying twice because you're paying for the token usage and you're also paying by handing your information over to these different labs.

• 14:13Speaker 00

  And I'm curious what you guys made of that, particularly why he chose to emphasize this message.

• 14:19Kirsten Korosec?

  Well, I do kind of find it a little bit ironic that like, Microsoft is issuing warnings about Trojan horses and, you know, basically monopolizing like all information is really the message here. I will say that it's not a unique message. We're hearing warnings from, from others in the VC space, Palantir CEO Alex Karp as well. So I think the surprising piece is that it's coming from Microsoft. Putting aside like a little bit of the irony, I do think that it is a valid and relevant point that he's making, which is, and I think reflective of a change that is about to happen

• 15:01Kirsten Korosec?

  within the AI lab meets, you know, big tech company relationships. A lot of these companies wanted to be first. Microsoft, you know, had an early partnership with OpenAI. So I think that there was a lot of like, everyone jumping in and partnering up and sharing with like unabashed, almost, you know, no limits because they didn't want to be left behind. And now they're pausing to consider those acts. And I think that we're going to see more of that. And I think we're going to see companies like Apple and Microsoft starting to really try to do more of their, their own work in house because of these concerns.

• 15:43Speaker 02

  Yeah, I think the question here is like, is he saying this now because those relationships have deteriorated a little bit? And he would have said it before, had they not been so reliant on each other? Or is he saying it now because there's like a specific reason? And this is him sort of like, you know, wink, wink, letting people know that maybe something is going on and, you know, you need to sort of protect yourself. I don't know the answer to that. I think it's maybe somewhere in the messy middle between those two or a combination of it. But I think that's the question, you know? I don't think anybody who's been using this stuff hasn't thought about this potential problem over the last few years.

• 16:20Kirsten Korosec?

  To me, really quickly, like, the whole Trojan horse analogy is like very, getting very close to what Apple ends up doing, which is filing a lawsuit about trade secret theft. Like, the analogy of Trojan horse isn't a positive one, right? And I mean, it's implying that they're, they're masking their intentions. It's an act of subterfuge. So, I mean, when you read between the lines, actually, it's pretty strong language. And so I do wonder the same thing, if there's, if there is something that has broken within the relationship and if it's preempting some other kind of action that is stronger than a blog post.

• 16:57Speaker 00

  And I mean, it's interesting to think also about what are the, the solutions that Nadella is sort of suggesting here, which are of course, I think, in both cases, somewhat advantageous to Microsoft. They're, you know, self-serving solutions, one being this idea of kind of reciprocity of that if we hand over our data to you, to your models, and your models are sort of then, you're using that data to improve your models, then we should get access to see sort of how that's improving your models and that we can sort of use that in some way ourselves as well. We, in this case, being, you know, like the customers of these AI products. And the other was sort of the idea of this kind of like private learning environment on the cloud. You know, of course, presumably the Microsoft cloud.

• 17:38Speaker 00

  Seems like a reasonable criticism, reasonable solutions, but also no real suggestion of, hey, like, if we're really worried about these kinds of security risks, then maybe we should be careful about like what information we hand over at all. Like that maybe we just shouldn't, that certain kinds of sensitive information you don't want to give to these companies potentially.

• 17:59Speaker 00

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• 18:25Speaker 02

  Yeah, I mean, this is the latest example of a trend that feels recent but is timeless as ever, which is, he's probably talking his own company's services here, even though he's not specifically naming it, like, you know, you'll be safer by building your own proprietary environment on Azure and not using, you know, going directly to these labs and interfacing with them directly. You know, I think people should take that into consideration. If I can stand on a soapbox for a moment, too, it is a little bit frustrating to see him make these claims when like, this has been an argument about sort of regular people, customer data, and how it gets used and misused and sort of all of that over the last 15, 20 years, as Silicon Valley tech companies sort of rose to the prominence that they

• 19:10Speaker 02

  enjoy now. And, you know, it's just a little, as someone who looks at things like Citizens United looks at stuff like this, you know, I don't doubt that the corporations may get preferential treatment here as far as like how their data gets protected and their data gets warned against and their data gets thought about first versus the rest of us. It's like, you know, we're back to Sam Altman listening to us and where that information might go.

• 19:36Kirsten Korosec?

  So I'm wondering how either of you see companies dealing with this in real time? Like, it just seems like, is this just everyone goes open source? Or is there some other solution to the Trojan horse problem?

• 19:51Speaker 00

  My sense is that open source is going to be a big component of it. And that, again, this is sort of somebody talking their own book, but Rebecca had a great interview with Clem DeLonge from Hugging Face, where, I mean, obviously, his whole message is kind of around open source AI. And, you know, he was essentially arguing that, yeah, you know, when you get started with AI, you as a business, you'll probably start with one of these big companies like OpenAI, like Anthropic, but at a certain point, because of cost, more than anything else, you start to switch to a more open approach. And so it'll be interesting if, you know, both on cost and privacy reasons, that just adds to the list of reasons why you don't want to just get locked into using, you know,

• 20:35Speaker 00

  ChatGPT or Claude potentially. I could at least see that happening.

• 20:39Speaker 02

  I don't really know where it goes, honestly. I think, like I said, I think people were probably already considering some of this stuff. I think it would be wild if they weren't. Maybe that's just me coming from the perspective of very, very lightly easing my way into using some of these tools and only in ways where I'm playing with, you know, publicly available data versus, you know, dropping source notes or anything into it. Like, I'm coming from a position of like naturally being cautious and skeptical, big freaking surprise if you know me. But I don't know that like going in the open source route is necessarily going to be like a salve or a catchall that like fixes this problem. I think you still have to be worrying about where, you know, what sensitive data is going out.

• 21:22Speaker 02

  This is like, this also goes back to a conversation we've had a lot about around vibe coding, where it's like, there are benefits to distributed software that's built at scale with this stuff in mind. Like, there are companies that have built entire fortunes, selling enterprise software to companies and promising them, whether or not that actually, you know, that promise gets seen out and if there's data leaks or data breaches or whatever, that like you are safe to put your most sensitive stuff in this environment. And so like, maybe this just shifts that conversation in a way that enterprise customers start asking those questions a lot more upfront of these companies. And maybe that actually slows some of this mania down a little bit.

• 22:02Kirsten Korosec?

  Yeah, I mean, there is evidence, and we've actually had some coverage of companies actually inviting labs like deeper into the fold, if you will, via Forward Deployed Engineers. And Rebecca Bellan had a couple of interviews about this, and she did a focus on talking with the leaders of ode with Anthropic. And it is this idea of like, bringing enterprises deeper and deeper collaboration. So, I mean, those are two very different avenues, right? Open source are like, come on in, let's get even closer. And, and it's hard to parse exactly which direction. I mean, it's easy to say, I think it's going to be mixed. And that's a little bit of a cop out, but I do, I do think that, I do think that there

• 22:46Kirsten Korosec?

  is going to be examples where there will be this big push for open source, but we will continue to see some companies, you know, absolutely tying themselves even closer to AI labs.

• 22:58Speaker 02

  The Forward Deploy stuff I find genuinely fascinating. It's like one of my favorite details I've come across in talking to a lot of like AI first startups over the last, call it like, two years, if only because it's like so fun to hear software engineers who maybe previously were working, you know, deep inside Uber in like a statistics division or at one of the social media companies, just be genuinely excited to be like in a car dealership in the service bay, you know, trying to help them figure out what they might want from that startup. And like, that has just been a genuinely exciting thing to see develop because of how much passion some of these folks have really developed for these, you know, what are, could be cast as niche businesses, but like that actual sort of boots on the ground work is

• 23:43Speaker 02

  fascinating to me. But the caution there, you know, sort of as you got at, is the more you're doing some of that stuff, you're also running into like a softer risk when it comes to people who have their hands on data. Like, it's kind of, there's a line here back to OpenAI and Apple where the more people you're putting in between the labs and the enterprise customers, the more vectors you just naturally have for that data to be compromised. And so like, they'll have to think about that as well. And, you know, I don't know where that goes.

• 24:15Speaker 00

  Yeah, this isn't necessarily a prediction, but it's a hope that I think maybe there's more conversation and awareness just of the trade offs and risks involved in the same way that, you know, with, with the whole like token maxing conversation, there's just like, well, it's all upside, just use as many tokens as you can, it's great. And then it is sort of like, oh, like this costs a lot of money, that I think that hopefully there's more conversation of like, oh, like, are we sure we want to do this with all of our data? And then I think that can also lead to pressure on the part of the big AI companies where to get access to all this enterprise data, we actually have to give like very clear guarantees about how we, and explanations and best practices around how we actually use or don't use the

• 24:59Speaker 00

  data to train our models so people, you know, feel a little bit more comfortable with it.

• 25:03Kirsten Korosec?

  Yeah, totally. You know, it reminds me that while all of these, you know, engineers, as Sean was highlighting, are like, finally, you know, having this moment of working directly with all these other startups and probably working really hard, you know what they need is a health drink. And that is my pivot to our deal.

• 25:24Speaker 00

  Well done.

• 25:25Kirsten Korosec?

  To keep up that strength, I know our producer is really impressed right now. She's actually messaging me. David Beckham has a health drink startup called IM8. And, you know, I saw this story and I was like, oh, interesting. What are we talking about? Like a seed round of like 10 million? Like, oh no, 1 billion. But in an interesting way, which is a general catalyst, customer value fund. And I was wondering if either one of you read this article from one of our, actually one of our editors, or if it caught your eye in any way?

• 26:00Speaker 00

  It absolutely caught my eye. I mean, it was just kind of like the same reaction that you had of like, what? What? What? And I think, I mean, yeah, so the startup itself is interesting, and this deal is interesting because I hadn't heard about the customer value fund before. But it sounds like, you know, it's essentially debt. It's not an equity investment. And a lot of that is going to be spending towards customer acquisition. So I think what that means is that if you have not heard of IM8 before, which I had not, you can probably expect to see a lot more ads online for IM8 in the coming months and years. And I think I was also just curious about the, you know, the company itself. And it just seems like such a kind of throwback in a way to these sort of like celebrity-driven,

• 26:45Speaker 00

  like, you know, direct to consumer companies that were, you know, bigger, I don't know, seven or eight years ago. But as I was sort of looking at, you know, the content around IM8 that exists right now, it did seem like a lot of, it was sort of these sort of like manosphere influencers, not in the sense of having like crazy, toxic viewpoints, but just sort of like fitness-oriented, kind of presenting in a certain way. So I wonder if there is this sort of like audience that's really interested in this kind of like fitness product that maybe I'm just not aware of.

• 27:13Speaker 02

  You know, the, the practice of blitz scaling was really missing, being leveraged to the teeth, you know? Like, let's, like, we saw so many companies rise to prominence in the early 2010s by throwing all their VC money at customer acquisition, but what they were really missing was that all that money was borrowed and, and sort of collateralized by their intellectual property or whatever is the collateral in this loan. God, I can only imagine what they're using to sort of set against this billion dollars.

• 27:43Kirsten Korosec?

  Well, to Anthony's point, I think that we can look forward to our Instagram, you know, Being completely taken over by David Beckham's face, I'm guessing. I will say that the the co-founder of this company, Danny Young, he he actually has a background in in health and he had a company that went public in 2022 called Prinetics, which I haven't really deeply looked into to see how it's doing. To me, what's really interesting is the timing of this. I mean, there is a lot of attention on health, longevity. There's a lot of mixed messages going around with the Maha movement as well, which is, you know, like, what is health? And what?

• 28:26Kirsten Korosec?

  There's so many competing trends and and competing opinions around that and competing data. It just seems like such an incredibly noisy place to be right now. And yet, here we are with another health drink company popping in. So we'll see how successful they are and how inundated we are all about to be with marketing.

• 28:51Speaker 02

  Can I just say one more thing on this? Like, I'm no consumer products expert, but like, just by looking at store shelves and, you know, being a consumer myself, especially drinks, the drinks category, this stuff comes and goes like crazy, right? Like, now it's Celsius, yesterday it was Red Bull. All this stuff kind of like just appears, it has like a one or two year run, and that it's very hard for this stuff to really hang on with any kind of longevity. And, you know, so the cynic in me actually now really is curious, like, what is the collateral, the general catalyst secured against this loan? Because like, is this a play to walk away with something that they can, you know, you know, be happy with if they're not going to get the full return on their billion dollar

• 29:36Speaker 02

  loan? I don't know, but it certainly makes me wonder.

• 29:39Kirsten Korosec?

  The one hope that they might have, talking about things coming and going, is that if it becomes popular within specific communities, so like in the ultra-running community, for instance, which I have some insight into, Tailwinds is like the go-to, but that changes, right? And if like, they basically like, a product will lock it down for two years and it's like what everyone is using, and then suddenly that shifts. And if this company is able to do that with some core groups and it becomes, through word of mouth and otherwise, the go-to product, like, I could see them carving out like a little bit of a piece, but if they are just doing like blitz marketing, I'm not so sure.

• 30:19Speaker 00

  Kirsten, I really like the way you kind of subtly snuck in a brag that you are the most in shape person on the Equity Podcast. I have knowledge of the.

• 30:28Kirsten Korosec?

  Or married to one, or I should say, or married to one. I am not an ultra-runner myself, but I am absolutely married to one. So I get to see all these products come and go in our house.

• 30:38Speaker 00

  Well, let's talk about like a different aspect of sort of health and medicine, which is drug discovery and this startup coming from this OpenAI researcher, Miles Wang, and it is apparently, I think we kind of broke the news, that it's raising $200 million at a $2 billion valuation, although the deal is not final yet.

• 30:56Speaker 02

  Yeah, this was a really good scoop from Marina on our team this week. And I think, you know, there's so much attention on people leaving these big companies these days and seeing what they do. And and so this is another example in a line of them like that. But I think there's also a lot of attention being focused on drug discovery, drug manufacturing. And it certainly is a thing that gets held up as like a prime example of, you know, why AI is valuable at the highest level when people criticize it and say it's not worth anything. And so, you know, I think the more of these companies that are set up around this idea of trying to make these discoveries and find ways to actually prove out some use that

• 31:40Speaker 02

  goes beyond just SaaS, like for enterprise companies, I'm interested to see them try. And he has a long history of doing this stuff at OpenAI already, so it seems like a seems like a competent enough person to go give it a shot.

• 31:53Kirsten Korosec?

  Yeah, and and there, like you mentioned, sort of referred to, this is seen as like an area where LLMs can absolutely be applied. And we've seen a number of startups try discovery as one that that pops to mind. I'm interested in knowing specifically what it's targeting, because here's the one thing that's kind of important to note. When using LLM for like drug discovery or any other kind of research, there's so many narrow slices that you make of that. Usually, it's not like very broad research, but pretty narrowly sliced. So I think of completely out of drug discovery, but in discovery, there is a startup called

• 32:33Kirsten Korosec?

  Aionix that I wrote about a few years ago that was using LLMs to narrowly look at different electrolytes that can be used to help with batteries. So like, that's very specific. And so you can see the opportunity here for dozens of different drug discovery startups using LLMs. So I'm really curious to learn more about, you know, what this company is really doing.

• 33:00Speaker 00

  Yeah, in a lot of ways, it feels like such a classic startup funding announcement in that it's like, sounds cool if they can pull it off. And I mean, I think there are reasons why, you know, I can see why the people would be making a pretty optimistic bet on this one because of the founder's background, but, you know, there's so much more to learn in terms of like what they're actually focusing on and what they're actually building. I assume we'll probably be talking more about them in the future. But we are just about out of time. Thank you for listening, and of course, Equity will be back next week. In the meantime, you can follow us at EquityPod on X and Threads.

• 33:31Speaker 03

  Equity is hosted by TechCrunch senior reporters and produced by Teresa Locan Solo with editing by Cal. Subscribe on YouTube or wherever you get your podcasts and find out what's next at techcrunch.com/events. Thanks so much for listening and we'll talk to you next time.