Trump's election throws tech regulation a curveball

A tech regulation shakeup is on the way with President-elect Donald Trump set to take office in January. Trump has made it clear that he plans to dismantle Biden’s AI policies on "day one," aligning himself with those who’ve pushed back against regulation. Today on TechCrunch’s Equity podcast, hosts Kirsten Korosec, Devin Coldewey and Margaux MacColl dove into what Trump’s win could mean for AI policy and innovation moving forward. While AI is always on the mind these days, there was so much more startup and venture news for the Equity crew to get into this week. Listen to the full episode to hear about: OpenAI’s acquisition of Chat.com, the domain previously acquired by HubSpot co-founder and CTO Dharmesh Shah for a whopping $15.5 million. We’re not sure if this signals a brand change for the AI startup, but users’ trips to ChatGPT just got three letters shorter. DeepRoute’s $100 million raise and the startup’s race to get its automated systems out before Tesla FSD is available in China. Biotech startup Archon’s $20 million effort to power up drug development with its ‘antibody cages’. Of course, we couldn’t talk about the news without a biochemistry lesson from Devin where we learned a new scientific term: thingies. Google’s new AI-focused data center and collaboration with the Saudi Public Investment fund. The move had the team thinking more about tech’s climate commitments at large, and who is walking back their pledges in favor of AI. The election bidding boom - from Polymarket to Kalshi and a potential $450 million payout. Equity will be back next week with a special interview between TechCrunch senior editor Julie Bort and Salesforce CEO Marc Benioff, so stay tuned. Equity is TechCrunch’s flagship podcast, produced by Theresa Loconsolo, and posts every 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. 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.

• 0:11Kirsten Korosec?

  Hello and welcome back to Equity Tech Runch's flagship podcast about the business of startups. Today is Friday, November 8th, 2024. I'm Kirsten Korsak and joining me today are my fellow T Sears, Devin Coldewey and Margot McCall. Hey y'all, you know, I wish it was a more exciting week. Like, I wish that there had been things that happened this week that we could report on.

• 0:37Speaker 01

  Things happened, things happened. Oh, did you hear that OpenAI bought chat.com?

• 0:42Kirsten Korosec?

  Oh, wow. So that was the big news of the week.

• 0:45Speaker 01

  Yeah, instead of typing out chat GPT, you can just write chat.com. So it'll save you a couple of seconds, you know, the 40 times a day you open up chat GPT. Yeah, yeah, they they paid a bunch of money, or I think they paid a bunch of stock. The guy who bought it last year of HubSpot CTO Dharmesh Shah, this guy has got enough money that he's just buying up like super premium, top level domains like chat.com. He paid $15 million last year and now has sold it on to OpenAI and was paid, he implied anyway, online in a little like tease post that he had. He was paid for it in OpenAI shares, which may or may not be a good idea. I mean, those are they're hard to get, so why not?

• 1:26Kirsten Korosec?

  Yeah, that's a that's a crazy deal. Well, it sort of reminds me of, I mean, to a lesser degree, the web 1.0 days, right? Like, so when everyone was like making money off of buying up domains like stamp.com and, you know, all that stuff. So I wonder if there'll be, to a much lesser degree, as I just mentioned, sort of a wave of this all around domains around chatbots.

• 1:50Speaker 01

  There'll be some, but I mean, people at this point, it's it's more important to integrate it into your everyday. Like, you won't even know that you're using ChatGPT, you know, because it's built into your whatever app that's using perplexity and perplexity is calling to ChatGPT and you don't even know which version of ChatGPT you're getting. So it'll just be like folded right in, as they say.

• 2:09Kirsten Korosec?

  Hmm. Well, I think we should actually talk about some other deals that happened, not just this one. And there is a company called Deeproot. I'm not sure if either of you have heard of it, but it's a Shenzhen-based company. In my world, I've paid attention to them, but they just raised $100 million. Rebecca Bellan rooted out who they got the money from, which is Great Wall Motor. And that matters because it's basically one of China's largest automakers. And when I say largest, about, you know, a little less than a million vehicles sold in the first 10 months of the year. So.

• 2:42Speaker 01

  How does that compare to like Toyota or something?

• 2:45Kirsten Korosec?

  Uh, well.

• 2:46Speaker 01

  Put you on the stop. Let's have those figures.

• 2:47Kirsten Korosec?

  Yeah, yeah. So, yeah, thank you. Uh, no, Toyota sells millions of vehicles every year globally. And I don't have the exact figure at my fingertips, but the other thing to remember is that there's a lot of different automakers in China. So this is a slice, but a slice worth noting.

• 3:05Speaker 01

  I got you, yeah.

• 3:06Kirsten Korosec?

  And the whole reason why this matters is because they are working on automated driving systems. They were working on what is called Level 4, which is sort of what Waymo's system is, right? So it's a driverless system. The expectation of having to take the wheel is nil, but maybe it's confined in a certain geographic zone or maybe weather conditions, which is how the Waymo is. They pivoted a little bit, which a lot of companies have done, to more of the advanced driver assistance systems, more of the Tesla FSD. And this is why all of this matters, because this is now a race for Deeproot to get those automated systems out before Tesla FSD is available in China, which it is going to

• 3:49Kirsten Korosec?

  be. So this was a deal that I wanted to mention, just because I'm very interested in what's happening in the Chinese EV market and also automated driving market. And it's just got a lot more interesting because this big thing that happened this week. The chat.com thing? Election. Oh, oh.

• 4:09Kirsten Korosec?

  My goal is to make it at least three minutes through the show without saying election day. But impending tariffs, also the race in automated driving technology and Tesla being able to break into the Chinese market in terms of automated driving systems as a US-based company is important. So this is why I'm paying attention to Deeproot.

• 4:28Speaker 02

  Can I ask how much of Elon's cozying up to Trump do you attribute to the fact that he wants to influence Trump's like policy towards China and towards particularly EVs in China?

• 4:40Kirsten Korosec?

  Well, it's hard to predict that, but as someone who covered Elon forever, there is a really interesting little history lesson, which is I'll have to look up the year, but Elon, or specifically Tesla, was the very first US or any Western company to be able to build a factory in China without a traditional technology sharing joint venture. It was historic in that Elon was able to get concessions that seemed unattainable. And so as a result, a lot of folks have always paid attention to Elon's power and also what he has agreed to, on the other hand, with with Chinese government officials. So he is absolutely active in that country and has been for for years, ever since they built their factory there.

• 5:25Kirsten Korosec?

  So I think he's going to have a lot of influence, but I don't like to make predictions with Elon because he can be predictably unpredictable and often can go a little bit sideways when just when you think he's going to go a certain way. We are going to talk about Elon later in the show. Oh, we are. I plan to mention him later in this one particular moment. So save all your pithy commentary until then. I have to save all of it? Okay. All of it, all of it. Just tuck it away and we'll get to it in about 20 minutes. All right. Margo, your deal is interesting. It's actually fascinating and I'm going to let you kick it off because I know you're really interested in all the activity happening in Saudi Arabia. And in this case, Google is involved.

• 6:09Speaker 02

  I do. I've done a lot of reporting on all the tech stuff happening in Saudi. Basically, Google announced they're opening up an AI hub in conjunction or in partnership with the PIF, which is Saudi's major sovereign wealth fund. This is like a huge win for Saudi. If anyone follows the region at all, they know that Saudi and the UAE have been in a pretty intense competition for, I believe, like the past, like decade of really trying to become international, global economic hubs. The UAE has been a lot better at sanitizing their image and getting people to Dubai, honestly. They've been a lot more effective at it, and they even kind of seized the AI moment, I think, a little sooner. They released Falcon, which is their open source LLM.

• 6:50Speaker 02

  They even have like a Ministry of AI that they've had for, I believe, a few years now. So for Saudi to win this and for Saudi to get this big partnership with Google, the details are still a little vague on like what exactly it is. They said that they're going to be making Arab language AI models and Saudi-specific AI applications. But regardless, I assume this means that Saudi Arabia is going to have a lot more access to AI resources and a lot more access to Google resources and talent, which is, they want to get businesses to set up shop in Saudi. And having a big partnership with Google in Saudi is a great way to do that.

• 7:26Speaker 01

  I do wonder what those, like you said, like the UAE has become the sort of de facto center for this kind of thing. And it's like, well, if Google was going over there, I would guess it would be like 80/20 UAE to Saudi Arabia. But they went to Saudi. So you have to wonder, like, what did they offer? What could they offer other than just a bunch of money? You know, Google's got money. What could they offer that would actually differentiate from the UAE offer?

• 7:52Speaker 02

  I don't know, honestly, because, yeah, it's a tough partnership to make. I'm sure the PIF is, at a minimum, obviously, offering a lot of money. As for like what else they can offer, I'm very interested to see more reporting on it because, yeah, I don't think we should gloss over that Saudi Arabia is a bit of a tough partner to be aligned with.

• 8:11Speaker 01

  It's tough.

• 8:11Kirsten Korosec?

  There was also another tough thing, which is that Google has made some climate commitments. And they have said, not only have they said that they're going to, you know, cut back their emissions, right, but they've also said they would stop developing algorithms for oil and gas production. And this seems to be the opposite of that, not and not just because they're going to setting up shop in an oil-rich nation, but also that Saudi Arabia and Aramco, the state-run oil producer, the largest, one of the largest in the world, is already using AI for its oil and gas production. So there's also a little tough spot there as well.

• 8:51Speaker 01

  I'll tell you, it's not tough for Google because those, all these voluntary commitments are, they're going to drop like a hot rock. Every company that's like, oh, we're dedicating like this many resources, we commit to, you know, net zero by 2030. Like, that's just a load of BS. Like, there's going to be no regulatory pressure on them to keep those promises. They were just pledges. A pledge is a voluntary thing. They're like, oh, we're going to be net zero by 2030. And then you look at their actual reports and they're like, ooh.

• 9:18Kirsten Korosec?

  Well, well, I would say, you know, the original climate goals that came about from a lot of these tech companies were in part very much driven by some certainty at the time around impending regulations. And we've seen how that's played out globally, like specifically in the EU. And many, many years ago, I covered oil and gas and the energy markets. And, you know, what every oil and gas producer would tell me is like, hey, it's not that, you know, they were, you know, big time lobbying against, you know, any kind of climate change or emissions policies. But what they would say is, we just want certainty, right? Well, there, the certainty has changed. The certainty now is, it is very likely that certain emission goals on a regulatory

• 10:03Kirsten Korosec?

  stance, at least on the federal level, could change. It will probably still exist in places like California. But tech companies don't have really the same incentive anymore. The incentive now is, and the interest is in AI and innovation. And so that will be the driving force and the rationalization that will be used for, you know, maybe punting on these pledges.

• 10:30Speaker 01

  Oh, yeah.

• 10:30Kirsten Korosec?

  Yeah. That's, that's a good thing for any reporter to keep an eye on. I'd be curious if there's a reporter out there that's like lining up all their pledges and their AI commitments and seeing what they're reporting from.

• 10:40Speaker 01

  We tried to get some, some stuff from Amazon about their climate pledge and try to actually compare it to some of the stuff Amazon does, but they're, they're frustratingly nonspecific about lots of aspects of it and they just won't, you know, it's there, all these companies are private, like they don't have to provide any information. We're like, well, what about, what about this side of your business? Doesn't that seem to, you know, counter the good you do with this part of the business? And they're like, well, who knows? Bye. That's, that's the end of the conversation. It's the same with Google and everybody else. Yeah. It's just, uh, these are just priorities of convenience.

• 11:13Kirsten Korosec?

  So there is a good news AI story that I'd like you to talk about if we could pivot.

• 11:18Speaker 01

  Oh yeah. Well, this is more on the biotech side. I don't know if you guys remember, but recently they did the Nobel prizes, some of them anyway, and the Nobel Prize in Chemistry went to Baker Lab, which is a UW, University of Washington lab in their like protein development center. I can't remember the name of the lab, but they do really, I've talked with this guy, David Baker before, and in fact, he works on my, my wife's floor in that building, but he's a very, very smart, very, very advanced in the AI world. And they put out like protein generation work called like Rosetta fold and all this other stuff. Really cool stuff of using AI and computational biology to generate molecules that are useful in various ways. It's primarily been sort of for very, you know, more, more theoretical purposes. There's not as

• 12:03Speaker 01

  many go to market opportunities, but they just spun out a company called Archon. They got $20 million from Madrona and a couple other venture firms. They're basically making a thing that's like, uh, you know, the like antibody therapy and other sorts of like medications. There's an element of chance to these things because molecules, there's billions of them. When you like do a, do medication, there's billions of them. They're very, very small. There's a good chance they'll just be skimming around in your body and not touching the things they need to touch. It's like, it's that simple. It's just very chaotic in the sort of soup, cellular soup. And so what these things do is they take a bunch of the antibodies and they kind of stick them on a big old ball. It's like, instead of having a bunch of free floating

• 12:46Speaker 01

  antibodies or like drug molecules, it's like they stick them to a beach ball and the beach ball bounces around and is way more likely to interact with the drug targets, you know, whatever receptor.

• 12:57Kirsten Korosec?

  What's the beach ball made out of? Like it's, it's infrastructure, but I'm trying to like, think of what that is made of.

• 13:04Speaker 01

  It's a protein. It's made of amino acids like most things. It's, you know, amino acids are what make up proteins. The proteins make up all the like stuff that our body does. And so they've made the sort of like the beach ball, which is sort of like a big dodecahedron or whatever. And it grabs, they call them antibody cages. They kind of grab one end of the antibody and stick it's inside the beach ball and the other end sticks out the business end. And then it rolls around and is just way more likely to interact with the drug targets. So it like, at least that's the, that's the theory and they're working with, with pharmaceutical companies to do it. But they need AI to generate the sequence, the amino acid sequence that produces the exact structure that they need to grab this particular antibody or whatever.

• 13:48Speaker 01

  It's so, it's, it's a really interesting application of generative AI in pharmaceuticals and biotech. And they got some money and hopefully they'll do some, some good work.

• 13:59Kirsten Korosec?

  I've certainly heard or seen us cover GenAI being used in drug discovery. I've written stories about how GenAI has been used at very early stages to help in battery development, specifically around electrolyzers with this startup called Ionix. Do you see more and more of these examples specifically in biotech than you did, say, a year ago? Or have these always kind of been happening for the last, let's say, handful of years? And now they're just getting more attention?

• 14:29Speaker 01

  A little bit of both. I think that what happened was that early on, the promise was obvious as far as using AI to generate and bet protein and structures and predict structure. When we had stuff like Alpha Fold and Rosetta Fold coming out, these were revolutionary for the microbiology and molecular biology domains. So it was obvious that they would have applications. And so companies began to sort of put them to their most obvious uses and they raised tremendous amount of money, hundreds of millions of dollars for some companies that I can't remember the names of. Some of them got bought, some of them are still extant, but they were more general. They were like, we use this to predict potential drug candidates. Then what the drug companies found out was like, oh my God, now we have a million drug candidates and no way to test them.

• 15:15Speaker 01

  And so there's people who are like, oh, well, we'll use AI to create. A more specific thing for the testing enzymes that you need for that. And then, oh, well, we need to automate the lab thing, but it needs to watch the proteins very closely. So AI has been sort of creeping along the stack in biotech and finding more specific things. And this one is much more specific than most.

• 15:38Kirsten Korosec?

  And what's the timeline for a startup like this? I imagine long.

• 15:42Speaker 01

  It's actually, I don't think it is too long because they're not trying to, it's not like they're saying, oh, this is going right in your pill. You know, we'll put a bunch of these beach balls in your pill, but it's for also testing. It's much more on the, in the lab side where they're saying, we don't have to do this experiment 500 times in 500 different little thingies to be sure that we're seeing the right result because of the element of chance. They can eliminate that chance considerably and presumably they could do it right now. But I mean, I would say within a year, that'd be my guess, within a year, they would be selling this as a service to testing labs of various kinds.

• 16:20Kirsten Korosec?

  Okay. Well, first of all, I just want to flag a couple of things. One thingies is a very specific scientific term.

• 16:28Speaker 01

  It's actually an acronym. Yes. T H I N G E E S.

• 16:32Kirsten Korosec?

  Also Toyota produced 10.3 million vehicles last year.

• 16:37Speaker 01

  Okay.

• 16:38Kirsten Korosec?

  And the joint venture with Tesla and China to build a factory in Shanghai was 2018. Okay, we're ready for a break. We've got all that in. When we come back, we're going to talk about that other thing that happened this week. Specifically what happens now around AI regulation, how Elon, remember I mentioned, save those pithy comments, may or may not benefit from that. And then we're also going to talk about polymarket, which I know Margot is super interested and excited to talk about as well after the break.

• 17:15Kirsten Korosec?

  The first theme, I think, that we will be a theme for a long time, certainly over here at TechCrunch and any media outlet, is what happens now? Election Day, we have President-elect Donald Trump, who will be taking office in January, and there's just a ton of speculation around what will happen. And, you know, I want to stick to not just asking a bunch of questions, because that is what everyone's doing, but to home in on a couple of areas where we have a lot of expertise, specifically AI regulation. And Kyle wrote a great story about what Trump's victory could mean for AI regulation.

• 17:54Kirsten Korosec?

  And Devin, I'm wondering if you could sort of talk about the general framework of it. I mean, just to set the stage, the Biden administration created an AI executive order. And that is risky, because if a new administration comes in, they can eliminate that executive order, which appears to be what is going to happen. But aside from that, what happens next? And what is your theory of what is going to happen next?

• 18:20Speaker 01

  Well, I think that the new administration is going to be highly deregulatory. And Trump has said he's going to cancel Biden's AI executive order on the first day. He's said he's going to do about 5,000 things on the first day. So I don't know, even if he stayed up all day and all night, I don't think he could do all these things. But in the first few weeks, certainly, I expect that we'll see the EO that created largely a lot of study and definitions of AI. It's not like it was really restricting anything. And, you know, a lot of the industry was saying, oh, your requirement that we report our training methods or whatever is onerous and will destroy innovation. Of course, it didn't. We saw enormous innovation and growth over the last few years.

• 19:01Speaker 01

  But it really was not like heavy regulation in any sense of the word. It was a lot of, again, like pledges to take part in this, which will probably disappear as soon as the new administration comes in.

• 19:14Kirsten Korosec?

  Right, these are pledges, right?

• 19:15Speaker 01

  Yeah, they were pledges. I mean, we noted at the time, they were like, oh, the AI like ethics pledge or whatever. They're like, oh, we pledge to do this. And we were like, okay, is there any legally binding or like punishment? And they're like, No, no. So I think that they'll just drop those pledges. And I think that the requirements of the Biden executive order, which are not that huge, will just not be done anymore. There's, you know, reporting to the NIST and stuff like that. There is a new organization called the AI Safety Institute, which is within the National Institute of Standards Technology, which is supposedly was going to be the center for all this kind of interesting reporting and definitions and stuff like that. But I suspect it will be

• 19:58Speaker 01

  wound down in some way. Probably won't just be like scuttled, but it'll be minimized and probably it'll just become a department within NIST. And then I think that there's going to be very few regulations on AI. I think it'll, they will focus on bio weapon risk. And, uh, and so I think it'll be very, very light executive orders to basically a little bit of security theater is my feeling is how it will be.

• 20:24Speaker 02

  Margo, I mean, I just pinged a bunch of founders in the last like day or so. And even if they're like personally sad, they are professionally very happy. They think that there's going to be, yeah, like Devon said, a lot less regulation. They were gearing up for the Kamala administration that was going to have more regulation and they're happy right now. They seem really thrilled.

• 20:45Speaker 01

  While all the CEOs are tweeting about the, how happy they are to work with the new administration. It's like they have to do what's best for their business and less regulation is good for business.

• 20:54Speaker 02

  At like a VC firm in San Francisco for disrupt, I was hanging out with some VCs and one of them kind of confessed that he like voted for Kamala as if it was a secret. And the other VC was like, I'm so proud of you for voting with your heart, not your wallet.

• 21:06Speaker 01

  Wow.

• 21:07Kirsten Korosec?

  Interesting. We've seen this play out and I've covered in the past many election cycles and oftentimes there is the business versus personal inner turmoil for these companies. But I did want to kind of pivot back to one thing. I know that the FTC, you know, that its NIST is really what we've been talking about. But I'm curious what you think before we move on to talking about how Elon might benefit and also a polymarket. The vice president-elect JD Vance is known as a big fan of Lena Kahn, and Lena Kahn has talked about regulating AI. And do you think that, you know, I don't know if Margot, where you are on the Hill, gives you any insight into this, but do you feel like there's any influence there?

• 21:49Kirsten Korosec?

  And if it could mean, aside from the theater that Devin mentioned, that there actually might be some framework for regulation through the influence of JD Vance per his support of Lena Kahn?

• 22:06Speaker 02

  No, honestly. No. He had another quote where he talked about that he's worried about preemptive overregulation attempts. In July, I spent a day on the Hill with Jacob Helberg, who's kind of in that circle. He's married to Keith Reboi. He works at Palantir. He's, I don't know if he's officially registered as a lobbyist, but he's definitely like a political operative. And every meeting he was having with Congressman that I was sitting on was about not regulating AI. I think JD Vance, we've seen him change his views, and I think that he has really been bolstered by Silicon Valley. I remember seeing like pictures of him with VCs like at RNC, like that is his world. And from the conversations I've had with kind of conservative VCs that have really

• 22:47Speaker 02

  backed Trump, stopping Chinese innovation and not regulating AI are like the two things they really care about.

• 22:53Kirsten Korosec?

  What about the states, though? You know, we've seen what happened in California and how that played out. And that specific bill was ultimately vetoed by Governor Gavin Newsom. But I'm wondering if the federal government will try to set some sort of federal policy and take away the ability of states to make some of that, which, by the way, would seem counterintuitive because it is now potentially a clean sweep GOP at the executive and legislative levels, both House and Senate. But we're starting to see, speaking of political operative Elon Musk at least, tweet about things that seem to go against the sort of states right argument.

• 23:35Speaker 01

  Another, another big flip flop there, but the states will be leading the charge on a lot of regulations like California already did, you know, and SB 1047 did get smoked by industry. But Gavin also did sign like 10 other bills that were actually consequential for AI regulation in California. If you go look, Max did a great story being like, hey, we also had like these four or five bills that week that were being signed. So there will be a lot of tension there and a lot of hypocrisy because they're like, oh, leave it up to the states. And then when a state is like, oh, we'd like to regulate AI, they're like, oh no, not that. So it's going to be a very topic by topic. They're just going to make that line up as they go.

• 24:16Speaker 01

  And it's whether they can actually pull it off in court and whether the Supreme Court will agree on certain legislative, you know, wordings and things like that. But yeah, they've got a full lineup on the government front. So I think they'll be able to pull off a lot.

• 24:29Kirsten Korosec?

  Yeah, it'll be interesting. I mean, you make one, make several good points, but one in particular, which is, I think a lot of this will end up getting litigated and going through the court system because there is certainly a push and pull. While Trump absolutely won on the electoral college vote and popular vote, there is still a big group of folks who oppose his policies. And I can see this being hashed out in the courts for some time. I do have some bad news for you though, which is that we don't have time to get into Elon Musk.

• 25:01Speaker 01

  Oh, well.

• 25:01Kirsten Korosec?

  I know you're upset about it.

• 25:03Speaker 01

  We can, we can save it for next time. Don't worry. I'm sure we'll have plenty of time to talk about that the next 500 episodes.

• 25:09Speaker 02

  Elon can come up in poly market conversation.

• 25:11Kirsten Korosec?

  Yes.

• 25:12Speaker 01

  I want to learn about poly market. So please.

• 25:14Kirsten Korosec?

  I hope it's not lost. Well, we'll, we'll wrap up the show talking about poly market. And I will say Rebecca Bellan did write a great story about how the Trump presidency might benefit Elon and his many companies, specifically SpaceX, X and Tesla. So go definitely check that out. But I'm going to give Margot the mic. Poly market.

• 25:33Speaker 02

  Yes. Poly market is super interesting. It is a predictive betting market that has really blown up in the last year. I remember the first time I encountered Polymarket was at the RNC. They kind of like last minute sponsored a box for really right wing influencers. So like I was in the box, I was chatting with some Polymarket team, like one or two of the team members. And they were great and you know, tech guys and we were talking about startups. And then I remember I turned around and I started kind of interviewing one of the influencers that was in front of a giant Polymarket sign. And I was like, oh, what kind of content do you make? And he was like, I am a proponent of bringing insert slur back.

• 26:13Speaker 02

  And it, it was a slur that I, I don't think he could use if you're going by his identity. And he said the slur over and over. And that was a moment that it really clicked for me that Polymarket was a startup that I think all press is good press and was clearly really willing to like take risks to kind of get out there and they did massive numbers during Tuesday's election, people voting on who was going to win Kamala or Trump. And there's a predicted 450 million in payouts that are expected from that. They are now being like France is looking at banning them because a French guy reportedly made tens of millions on betting on it. And you have lots of libertarian Silicon Valley folks basically touting it as like

• 26:57Speaker 02

  a better source of truth because it's kind of a crowdsourced method of truth. And that's sort of their thesis because it called that Trump was going to win much earlier than mainstream media sources were. And it's a startup that's raised from founders fund and is very embedded in that kind of libertarian scene. And now that I have told you about it, if you didn't already hear about it, you will see it literally all over your Twitter feed. Cause it is what all those guys are talking about right now.

• 27:25Kirsten Korosec?

  I've absolutely seen it. Now, are there competitors? Is there this burgeoning sort of predictive market around there? Or is Polymarket sort of just owning it?

• 27:35Speaker 02

  Yeah, this both Polymarket and their competitor, their main competitor is Kalshi. And both have been around for a while. Kalshi is Sequoia backed, raised a while ago. They've been around for years and they haven't quite picked up steam. They've run into a lot of legal issues. Polymarket, technically US citizens or residents can't bet on Polymarket. I think that's pretty easy to get around. I don't exactly know how, but people definitely are betting on Polymarket. So yeah, they've run into regulatory issues. Technically, they're crypto. You bet with crypto. So I think that's run into issues. And for the most part, I mean, I thought it was interesting that Sequoia had backed Kalshi because they also backed BitClout, which was similar, using crypto to kind of like

• 28:16Speaker 02

  bet on individuals and like their stock would rise and fall based on how many people were betting on them. And it totally just sputtered out. And now the SEC is bringing up charges against the founder. So there are competitors. This has been around for a while. And TBD if this will remain a thing after the election.

• 28:35Kirsten Korosec?

  Interesting.

• 28:36Speaker 01

  I don't see why they would regulate it. I mean, it's just one of those things. It's been, this kind of betting has been around for hundreds of years, right? I mean, people have been doing this forever. And, you know, it was made illegal for good reason, but things have changed. It was probably, you know, the first law is illegalizing. Illegalizing? Is that, anyway?

• 28:52Kirsten Korosec?

  I don't, you're making up words today.

• 28:53Speaker 01

  It's okay to make up words. That's how language is created. So illegalizing.

• 28:57Kirsten Korosec?

  Yes, chicken butt, chicken butt.

• 28:58Speaker 01

  Chicken butt is a real thing. You didn't make that word up. It's chicken bucket. Anyway, you know, like this, this kind of thing has been around for a long time. It was regulated for good reason, but that may have changed. I'm interested to see how it plays out, but my general instinct with both crypto and with betting is that, you know, people make money on the margins and that's the real play. But the house always wins in gambling and it's because the house is taking, you know, 2% of your bet or it's holding your money and investing it on its own in various other ways. I always look for the sort of side hustle in these things. This is not a, an altruistic global bookie. It'll produce all kinds of weird side effects, too.

• 29:36Kirsten Korosec?

  I'm not sure if there is an altruistic bookie, but it'll be interesting to watch and we will be tracking it a little bit because the election is now over. So we'll see, they probably have a lot of momentum and attention right now, but what do they do from here is kind of what I'll be watching and waiting for. And I think that that's all we have time for today. Save your pithy Elon comments for next episode, Devin, and we will see you next week.

• 30:03Speaker 03

  Equity is produced by Teresa Loconsolo with editing by Cal. Bryce Durbin is our illustrator and we'd like to give a big thanks to our audience development team and Henry Pickavet, who manages TechCrunch Audio Products. Thanks so much for listening and we'll talk to you next time.