Pod Insights Equity Podcast Dorsey leaves Bluesky, tech giants do more with less, and the next IPO About this episode News that Jack Dorsey is out at Bluesky caused a stir this weekend. After all, Dorsey is a former Twitter co-founder and CEO, so his investment of time into the rival social network carried weight. The decentralized social networking service said that it is looking for a new board member.
But while we had to talk about Dorsey’s latest on Equity today, it was far from the only topic we got to chat about. Past a busy earnings week ahead of us, we also dug into the latest employment news concerning China’s tech giants. Like many large U. S. tech shops, they are shedding staff. Tech shops around the world are showing that they can do more with less.
Sticking to China, the country is set to deliver another IPO, this time in the United States. Momenta could raise up to $300 million in its debut, meaning that its upcoming listing is is going to carry real weight. (More on Momenta here.)
And to close out we took a look at new capital that the U. S. government is putting into digital twins, and why alt-clouds are making real progress but could run into growth speedbumps in time. Equity is back on Wednesday — we’ll chat with you then!
Equity is TechCrunch’s flagship podcast 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.
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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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Transcript 0:10 Speaker 00 Hello and welcome back to Equity, the TechCrunch podcast about the business of startups, where we unpack the numbers and the nuance behind the headlines. This is Alex. Good morning. It is May 6, 2024, and this is our Monday show where we take a look back at the weekend we just had and a quick peek at the week that is in front of us. So on today's podcast, just for you, I have stocks and crypto, big changes at Blue Sky, an IPO to get excited about, more investment in chips in the US, and then the rise of alt clouds for computing work and why I think that particular tech trend really matters. All right, let's go.
0:53 Speaker 00 And let's start with my favorite thing in the entire world. It's the stock market. Shares today are mixed in Asia. They are higher in the EU and set to rise here in the US. Why all the positivity? Well, last Friday, the US labor report was pretty lackluster, and that led to optimism that the Fed will cut rates. I don't know how you want to rate that, but that's what investors are saying. Now, on the earnings front, there are too many names this week to even begin to tell you all of them. So instead, I'm going to give you a couple of highlights for each day. On Monday, Palantir, Hims, Rocket Lab. Tuesday, Arista Networks, Coupon, Datadog, Toast, Twilio, Reddit, Lyft. Then Wednesday
1:36 Speaker 00 is super busy. Uber, Airbnb, Shopify, HubSpot, Robinhood, Instacart, Affirm, the list just goes on. Then Thursday is Roblox, Unity, Dropbox, and JFrog, which I really need to look back into. Oh, and Amplitude. And then oddly enough, we also have a Friday report this week from Digital Ocean. So something for everybody, no matter what part of tech you care about, there's data coming for you.
2:03 Speaker 00 But if the stock market is going to have a busy week this week, crypto had a more relaxed week in our rearview mirror. Prices for the two major tokens didn't move too much. Bitcoin is up 3% in the last seven days and Ethereum is flat over the last week. Some stuff did move, however, Solana bounced back 14% in the last seven days. And something called Toncoin has broken into the top 10 on CoinMarketCap. I don't know what Toncoin is. I've never even heard of it. So I guess we all need to go figure out what the hell that is because suddenly it matters.
2:39 Speaker 00 Moving on to big news that matters. The biggest news this morning that I am chewing on is that Jack is out at Blue Sky. Yes, Blue Sky's most prominent backer has left its board. Blue Sky, if you don't know, is a Twitter alternative made in the wake of its sale to X. It's pretty fun. I've used it quite a lot. But we learned over the weekend that Jack is no longer on its board. Someone asked him that and he responded with a very terse "no", and then did not answer any of the questions asking him to explain that departure. However, in the wake of Dorsey's announcement, Blue Sky did drop a statement saying, and I quote, "We sincerely thank Jack for his help funding and initiating the Blue Sky project.
3:22 Speaker 00 Today, Blue Sky is thriving as an open source social network running on at Proto, the decentralized protocol that we have built." Now, they are looking for a board member to replace Jack, so make sure to raise your hand. But it is a loss because Dorsey, of course, a co-founder over at Twitter and Square, now X and Block respectively, gave it a lot of credibility, but he has also been spending a lot of time on Nostr lately. That's N-O-S-T-R, which self-describes as a "decentralized social network with a chance of working. I appreciate that level of self-awareness." And Nostr, which is an open protocol social network, does compete with Blue Sky. You probably can't have a hand in both pots.
4:05 Speaker 00 Next up, a slowdown in Chinese tech hiring. Now, the South China Morning Post has fascinating data on the current state of tech in China that I read yesterday while trying to navigate a stay in the Baltimore airport long enough to establish squatters' rights. So I decided to bring it to you because I think it really does matter. So the S C M P reports, and I quote, "China's internet giants have slashed jobs in recent years, affecting tens of thousands of people. As of the end of 2023, China's so-called BAT or Baidu, Alibaba and Tencent had 364,477 employees, a drop of nearly 25,000 from a year before." Okay, so a couple of thoughts here.
4:50 Speaker 00 One, those companies don't have as many employees as I thought they did. And also, the drop wasn't as big as it might have been. And the trend is not a surprise because we have seen similar movements here in the U.S. as well. And to make that point, I went ahead and I went back to Alphabet's latest earnings and pulled some numbers for you. So Alphabet had 190,711 employees at the end of the first quarter of 2023. Now, one year later, at the end of Q1 2024, that figure had fallen to 180,895. So a drop of about 10,000.
5:32 Speaker 00 So a very similar kind of decline that we saw in China also echoed here at Google. But the tricky bit, of course, with all of these numbers is that Google, to stick with the example, of course, it's part of Alphabet, drives a lot more jobs in the economy than it employs directly. Ad agencies, consultancies, et cetera, et cetera, et cetera. So of course, the impact of these companies is quite a lot larger than just their employee footprint, but it is notable that all around the world, tech giants really are doing more with less.
6:05 Speaker 00 Next up, an IPO, an upcoming IPO, an upcoming IPO that has filed privately to go public in the US. An IPO that's coming up that has filed privately to go public in the US, and it's a Chinese company working on self-driving? You know, I'm so excited because that is what Bloomberg reports that, quote, "Chinese self-driving firm Beijing Momenta Technology has filed confidentially for an initial public offering in the US." Yes, this deal could raise up to $300 million, which is honestly a pretty tasty offering size. And I think either indicates that self-driving has come so far
6:47 Speaker 00 that it is ready to list more companies that are revenue-driving and worthy, or that self-driving work needs new financial backers to keep the cash flowing. In the case of Momenta, GM is a backer, including investing $300 million into the firm back in 2021. But no matter, whenever Momenta does drop a real filing, we will be all over it because, oh, my gosh, I cannot wait to see the numbers.
7:16 Speaker 00 Putting our money where our mouth is. And by money, I mean the collective wealth of the United States. And by mouth, I mean our domestic chips industry. Yes, I have news about the US and chips, and it is that President Joe Biden's administration is looking to fund efforts that improve semiconductor manufacturing through the use of called digital twins. Now, digital twins are virtual models that are used to test and optimize physical objects and systems. So, for example, in the world of auto manufacturing, those companies are looking to use digital twins of their factories to experiment with new processes without actually disrupting production. So how does this matter for chips? Well, the Biden administration has announced
8:00 Speaker 00 that it will accept applications for what it anticipates to be about $285 million in funding for work that includes research into semiconductor digital twin development. I think this is super cool. The US needs to be more chip-independent versus chip-reliant, and the CHIPS Act, which this is part of, is doing yeoman's work to try to help that. And if digital twins can help us go faster and do better, well, then make me one.
8:28 Speaker 00 And to close out, something that I had missed, Kyle Wiggers writes for TechCrunch that the appetite for alternative clouds has never been bigger. Now, what does that mean? Well, to pick an example, CoreWeave, the GPU infra provider that actually began life as a crypto mining operation, raised $1.1 billion last week. But it's not just CoreWeave. If you look at Lambda Labs, it also offers an array of cloud-hosted GPUs. And in April, it raised $500 million in a special-purpose financing vehicle, and that was just months after closing a $320 million Series C round.
9:08 Speaker 00 Then there is the nonprofit Voltage Park, which last October announced that it will invest $500 million in GPU-backed data centers. And finally, Together AI, a cloud GPU host that also works in the world of generative AI, unsurprisingly, raised $106 million in March. Now, why does this matter? Well, these alternative clouds can be a little bit cheaper than the bigs when it comes to certain compute tasks. The problem here is there are some analysts that worry that these companies' growth could be stymied in time by the major cloud providers. But what I love here is that they appear to have found a wedge into a market owned and dominated
9:52 Speaker 00 by just a handful of the usual suspects. And I think that we need more competition in cloud to keep prices low and innovation high. But how can you start by taking on, I don't know, bare metal compute and storage against Amazon and Microsoft? They have more money, more data centers, better enterprise sales. But you need an angle, a way in. And perhaps this is it. And alt-clouds that do GPU work today can expand in time to do more and really give those tech platforms a run for their cloud money and keep them on their toes.
10:26 Speaker 00 All right. That is all the time we have on this delightful Monday morning, but don't forget to follow Equity where we are EquityPod over on X and Threads. My name is Alex. I am Alex over on X. We also have a sister show called Found, talking about all things founders. I heartily recommend it. We'll talk to you soon. Equity is back on Wednesday. We're back on Friday. I'll see you then. Bye.
10:49 Speaker 00 Equity is hosted by myself, Alex Wilhelm, and TechCrunch Senior Reporter, Mary Ann Azvedo. We are produced by Teresa Locan Solo with editing by Kel. Bryce Durbin is our illustrator and a big thank you to the audience development team and Henry Pickavet, who manages TechCrunch Audio Products. Thank you so much for listening and we'll talk to you next time.
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