OpenAI just made an offer the government can't refuse

OpenAI is making a serious play for the federal government. The company just announced a deal that gives U. S. agencies access to ChatGPT Enterprise for just $1 per year. Yes, really. It’s part of a new “blanket purchase agreement” aimed at getting OpenAI’s tools into federal departments fast and a clear sign the company wants to lock down the public sector before anyone else can. The move is aggressive, strategic, and could shape how generative AI gets deployed across everything from admin work to national security. It also puts serious pressure on rivals like Anthropic, Google, and Amazon to figure out their own government strategy, and fast. Today on TechCrunch’s Equity podcast, Kirsten Korosec is joined by guest hosts Rebecca Bellan and Sean O’Kane to break down what OpenAI’s bold government push means for the broader AI landscape, data privacy and model access in federal settings, and how this all connects to OpenAI’s longer-term roadmap — including what we know so far about GPT-5. Listen to the full episode to hear more about: Tesla’s board re-ups Elon Musk’s $29 billion stock package, and what happens if that $56B pay plan comes back from the dead How Joby Aviation’s acquisition of Blade is an infrastructure play Why Vogue’s AI-generated Guess ad is sparking a backlash in the fashion world Post-acquisition whiplash as Cognition lays off staff just three weeks after buying rival AI startup Windsurf As always, Equity will be back for you next week, so don’t miss it! 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. 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.

• 0:00Anthony Ha?

  This episode of Equity is brought to you by Schneider Electric. Schneider Electric, advancing energy tech.

• 0:17Kirsten Korosec?

  Hello and welcome back to Equity TechCrunch's flagship podcast about the business of startups. Today is Friday, August 8th. I'm Kirsten Korosec, Transportation Editor at TechCrunch. I am joined today with two new co-hosts who are stepping in because Max and Anthony are taking some much-needed vacation this week. And I'm excited because this is basically the transportation team. We've got senior reporters Rebecca Ballon and Sean O'Kane. Thanks you two for joining me today. Rebecca, you know, stepping in a little bit back into transportation, maybe today, a little bit.

• 0:51Rebecca Bellan?

  Yeah, happy to be here, happy to talk about Tesla Anytime, which is our first story that I think we're digging into today. The board of Tesla is bringing back up Elon's compensation package. I'm not sure if people remember this from a few years ago or just over the years. There's been a big uproar over can Elon get a staggering $56 billion pay package? Is he allowed? Will the court stop it? And now there's been another development in this. Sean has the story. Sean wrote this one up. I would love to kick it to you to give our listeners a little bit of a breakdown.

• 1:24Sean O'Kane?

  Yeah, the world's richest man just got richer, huh? How do you like that? Yeah, this was interesting. I mean, we had thought for a while that Tesla was going to try to work on some sort of supplemental or additional or whatever you want to call it, compensation package. Because the one that was approved in 2018, which was at the time worth around $56 billion, was struck down by a judge in Delaware Chancery Court in January 2024. And so Tesla's board and its supporters and Elon have had a lot of back and forth since that decision in January of last year about what to do. And Musk has sort of threatened to walk away from the company. His big argument is that he wants more control. He's in the low teens in percentage of control over the company right now. He wants

• 2:10Sean O'Kane?

  To be at about 25%, he says the reason for that is he's afraid that somebody else might come in and try to control these incredible technologies that Tesla is developing like robotics and artificial intelligence. And so the board was looking for a way to make him happy. The interesting thing to me is that Tesla appealed that chance record decision at the end of last year, beginning of this year, after it was finally confirmed by the judge there. And so the timing of this award, which gives him 29 billion worth of stock, less a few billion because he's going to have to pay the exercise price on those shares. The timing is just really awful, right? I mean, he's getting this award. I think I saw it reported a couple of different places, an award with a monetary value essentially of the entire profit of Tesla's history.

• 2:52Kirsten Korosec?

  Wow.

• 2:53Sean O'Kane?

  At a time when their sales are down, the brand has been hit very hard by Musk's involvement in politics. And.

• 3:01Kirsten Korosec?

  Sean, you need to put your galaxy brain hat on for this one and think about the future. I was now, of course, when this story came out, started looking back at the transcript of the earnings call. And I'm sure at this point, Elon, although he and his brother did recuse themselves of these, you know, board discussions, I'm sure he was in the know. He really kind of sent what to me was probably not a message so much to the board, although it was crafted that way. But really probably to shareholders. And it was just days before this came out, which was really like expressing the concern that you just talked about, which was, I feel like I need to have more control of this company.

• 3:40Kirsten Korosec?

  And really trying to position Tesla, not as an automaker, but as an AI and robotics company, which Sean and I have written about a few times. And I think will continue to be a story. But yeah, you're right. The timing of it is anyone who is not a Tesla stan will look at this with a little bit of a raised eyebrow, I think. And then the other camp, of course, has said, absolutely, he needs this money.

• 4:02Sean O'Kane?

  Yeah, I mean, I think it's important to note that he only gets all this if the 2018 plan is struck down. If that appeal with the Delaware Supreme Court doesn't go Tesla's way. If that does go its way, then this is essentially a wash. And there's one other thing that I thought was really interesting about it, which is basically Musk is agreeing and taking on these shares to stay in a senior leadership role of the company for two years. Interestingly enough, not explicitly just the CEO role, though. So he could slide to some other sort of chief product or whatever he wants to call it, officer role and still walk away.

• 4:37Kirsten Korosec?

  Is he still the Tesla king? What is it?

• 4:39Sean O'Kane?

  The techno king.

• 4:40Rebecca Bellan?

  Techno king of Tesla.

• 4:41Sean O'Kane?

  I don't recall seeing that in the SEC filings recently, but maybe I've been glossing over it because, you know, you have to sort of excuse a lot of noise when you're covering Tesla sometimes.

• 4:51Rebecca Bellan?

  Yeah. One thing I will say about this that's interesting is that a lot of shareholders and certainly the board seems to be like, we need Elon at the helm because AI is the future of Tesla. Right? Well, at the same time, they don't want him to get too distracted with his actual AI company, which is XAI. And it seems like, I don't know, like certain shareholders have sued Elon Musk and Tesla for him starting up a rival AI company while he has an AI company. So I'm curious, I'm going to be watching this space to see how he plans to kind of combine forces. We're already seeing Grok in Tesla vehicles. I'm thinking we're going to see, especially if Elon gets more control over the company, I think we're going to start seeing a lot more overlap between his companies.

• 5:29Kirsten Korosec?

  Well, I know Rebecca, you have a longstanding theory, which I'm not going to air on the podcast about what is going to happen. But we need to move on to the rest of the show today. We have deals of the week from Joby Aviation and its recent acquisition and OpenAI. Then we're going to get into the fashion world's clash with AI and the darker side of tech acquisitions. Let's get started with Joby Aviation's latest buy, which I covered. And it was funny because behind the scenes, we have Slack, we message each other. And when I put this out there, everyone was like, oh, wow. And then immediately started talking about a fun little story that involved the company that's being acquired, which we'll get into. So Joby bought Blade Air Mobility's rideshare business.

• 6:14Kirsten Korosec?

  This is a company that essentially works like an Uber, but is offering helicopter rides. The company's founder and CEO has long positioned this as the first step in something that will eventually be urban electric air taxis of some kind, but was not developing itself, was really looking for a partner and has, over the years, locked up little partnerships here and there. Well, that now is shifted because Joby Aviation, which is working on electric air taxis, has now bought Blade's passenger helicopter business. They also use seaplanes. And this is an interesting business that is very much geared towards what I would call the well-heeled consumer looking to avoid the traffic of New York.

• 6:55Kirsten Korosec?

  Commute directly into the city or the Hamptons and a couple of their spots where they've expanded. And Sean, I'm going to kick it to you first because what was the first thing that you said when I, when I mentioned in Slack, which has nothing to do with the acquisition, by the way, but was kind of like a funny little moment in Blade's history?

• 7:12Sean O'Kane?

  Yeah, a few years ago, this is genuinely one of the stories I'm most jealous of, of the last like half decade. Cause I feel like Blade's one of those things that came out in this sort of mobility craze of five to 10 years ago, got a lot of press. It was the Uber for helicopters. Then I feel like it kind of faded, right? Like, I don't think a lot of people think of Blade these days in the way that they were a few years ago, especially with so much press being thrown at the EV tall companies like Joby that are doing more futuristic things. I think it was in 2021, the CEO was discovered to have basically made up an entire PR person, like a communications lead for the company and had been

• 7:47Kirsten Korosec?

  Oh my God.

• 7:48Sean O'Kane?

  acting under that pseudonym, which of course is incredible one, Simon McLaren. And contacting the press, I think at one point he was even blogging. I think there was even like a Twitter account for it.

• 7:58Kirsten Korosec?

  Oh my God.

• 7:59Sean O'Kane?

  It was real. It was one of those things where you read the story and funny enough, it took me until I revisited it this past week to realize that one of our colleagues, Dom, actually helped on that story when she was working at Business Insider and broke it in 2021. And it was just one of those things that was like the most odd. Cause like, what was the, what did he gain from this? Like it just such an odd.

• 8:18Kirsten Korosec?

  Didn't want to hire someone?

• 8:19Rebecca Bellan?

  Yeah.

• 8:20Kirsten Korosec?

  But wanted to look like he could hire someone, right? Like wanted to.

• 8:22Sean O'Kane?

  I mean, I guess Agentic AI wasn't ready yet, right?

• 8:25Kirsten Korosec?

  Exactly. Yeah.

• 8:26Rebecca Bellan?

  Right. Well, now we're going to see a lot more of this, I think, going forward.

• 8:29Kirsten Korosec?

  Yeah, we will. You mentioned something important, which was that I think from the public's view, or maybe media's view, there just wasn't a lot of buzzy coverage around Blade recently, but they have grown the business. They completed about 50,000 passenger rides in 2024. So not a small thing. I think the important thing here is that the founder and CEO is going to remain operating this. It's going to be essentially like a unit of Joby. And this is going to be really for Joby, an infrastructure play. They have established routes. They have established spots to take off and land, I believe at JFK and Newark Airport and multiple Manhattan helipads. So they're really buying

• 9:10Kirsten Korosec?

  that infrastructure. That is going to be the big piece. The other thing to mention is that Blade's medical transportation business is remaining its own thing, although Joby has left the door open. And if you look at the terms of the deal that were publicly disclosed as a potential partner. So you could see some future business model there, but they are not buying that piece of the business.

• 9:32Rebecca Bellan?

  Hmm. I think this is a really smart move from Joby, but I'm curious, Kirsten, since you've covered it, if you know, like, other companies have deals with Blade and Blade's Rideshare. Like, I'm pretty sure that Beta Technologies has one as well. So you're saying that that business will continue to operate? Does that mean that those companies will become customers of Joby? Or is Joby going to cut them out?

• 9:52Kirsten Korosec?

  Well, on the medical transport side, I could see Blade just continuing the partnerships. A lot of the coverage that we had with Blade looking at partnerships on the urban electric air taxi side, some of those were under what I would call like memorandum of understanding kind of category, not necessarily locked and loaded. And so I would assume that those would probably fade away. But, you know, Joby still has to to launch this electric air taxi business. So for right now, I think that Blade will probably operate as it has been. And then we'll see in maybe a year or two, once Joby really starts, first of all, getting that type one certification, which you've written a lot about, and see where it goes from here.

• 10:34Kirsten Korosec?

  But I would assume that any partnership that was around the urban electric air taxi with other companies, that that's just not going to exist, or in a very different form. I don't see why Joby would continue to do that. We have to move on, though, because there is another deal that I really want to get into, OpenAI. And I love our headline that we had, OpenAI is practically giving ChatGPT to the government for free. Rebecca, you had this story. What exactly do you mean by that?

• 11:01Rebecca Bellan?

  Well, I'm glad you asked, Kirsten. Just a little context first. A couple of days ago, it got announced that OpenAI, Anthropic and Google are all now approved vendors with the GSA to sell their AI wares to civilian federal agencies. The next day, OpenAI was like, yeah, we are doing that. And we came to a deal with the GSA that says we can sell ChatGPT Enterprise for the low, low price of a dollar a year per agency. So that is pretty clearly seems like it's designed to undercut the competition. I've reached out to Anthropic, I've reached out to Google, have not had a response yet as of the time of this recording as to like, how are you going to up the ante? Are you going to up the ante? So yeah, I thought it was a really interesting move from them.

• 11:45Kirsten Korosec?

  Well, the interesting thing to me about all of this, the backdrop I should note for a moment is that as we are recording this, there is some new news coming out from OpenAI on their GPT-5. And this is going to be very interesting. I'm sure Max, when he's on the show next week, will talk a lot about it. But really, this is the first unified AI model and combines the reasoning abilities of its O-series of models with the fast responses of its GPT series. This is considered a bit of a step change. We'll see what the benchmarks show. But Rebecca, does this GPT-5, how important is it as part of this deal? Or really, should we be thinking about these as two separate things?

• 12:29Rebecca Bellan?

  I think for now, two separate things. I think there's not enough details, or I don't have the details yet, on how GPT-5 is going to be integrated into the enterprise offering. For the moment, I believe that GPT-5 is going to be offered to like all users, even free users for a while, just so you can try before you buy, I guess. It has agentic capabilities. So, you know, I can imagine a lot of that being integrated into the workflow for government agencies. I mean, that's what we're trying to do, right? We're trying to slash federal spending by automating tasks that don't need doing, et cetera, et cetera.

• 13:00Kirsten Korosec?

  Sean, I have to ask you, I know that you're not deep into covering necessarily OpenAI, but we've done some work together on like Doge's influence on the federal government, and certainly the tech world's influence on the federal government. From your perspective, how do you see this? Aside from an obvious win for OpenAI, what do you see as like a potential implication in terms of just how the federal government works? What this could mean for other tech companies? I'm wondering if you have any hot takes, at least initially.

• 13:30Sean O'Kane?

  I don't know about hot. I mean, I think my mind immediately goes to two things that are kind of related, I guess. One is just, I'm very curious to learn how the different agencies will try to use these things. I mean, that's the thing that's kind of most fascinating to me about large language models and artificial intelligence technology as it stands today in general is not necessarily how capable they are or not. It's what kinds of creative ways are people using them to attack problems that maybe would have taken too long to try to tackle and things like that. And there's certainly no end to those kinds of problems in running a government. And so I'm curious, from the transportation side, like, how would people at the National Highway Traffic Safety Administration use ChatGPT in their daily work?

• 14:15Sean O'Kane?

  I mean, like, maybe there is something very novel about how this could help them. And maybe it could be the kind of dead ends that a lot of people run into with these technologies, where they don't really see much of a use. The second piece of that is my reporter brain going off, which is like, all I want to do is file a bunch of records requests to see what government employees are querying of these large language models, which would help me answer the first question a little bit. So that's kind of how I think about it at this moment right now. I guess the end result of that is like, aside from reporters digging it out, does how this technology get used within the government become part of the way that the government tells stories about how it gets its work done? You know, does it go that far through? I don't know. Those are kind of where my questions lie, I guess.

• 14:58Rebecca Bellan?

  Yeah, I think it's worth noting, though, actually, I mean, Kirsten, you asked how GPT-5 is going to be, and I forgot to mention that there's 60 days included in this deal of unlimited use of advanced models. So I'm going to guess that GPT-5 is one of those. And when we're talking about agentic capabilities, they're useless, AI agents are useless unless you have access to like the database and all of the company information, which is why a lot of governments and also companies in highly regulated fields haven't really used them because they're worried that that data will be put back into the training models, right? You know, I've asked the government, I've asked OpenAI, how are you going to ensure that government data stays safe? I haven't really gotten a clear answer on that. I've asked if they're going to do like on-premises deployments or like private cloud deployments

• 15:41Rebecca Bellan?

  to ensure that anything that's happening, any of the chats that are happening, search the database to find me, I don't know, this person's information or what have you.

• 15:48Kirsten Korosec?

  Well, I think both of you touch on an important theme, really, which is the government hasn't shown the work yet, meaning how it's going to use it, how it's going to protect it, how this data won't necessarily be fed back into training models, and how it's going to potentially make the government run more efficiently, but also accurately and safely. So that is the big question mark and concern I have with all of these deals is that it feels like a lot of deal flow without a lot of details about how it works. And that is a perfect pivot for us because after the break, we are going to talk about one of the effects that AI is having specifically on the fashion world.

• 16:35Anthony Ha?

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• 17:14Rebecca Bellan?

  Last weekend, I covered, along with my colleague Dominic, we covered the uproar over Vogue's AI-generated ad. For those of you who don't know, Vogue, fashion bible of the world, had an AI-generated ad advertisement in its print edition. So this is different. It's an ad. I just want to stipulate this is different than Vogue doing editorial with AI. But there was, in fact, an AI-generated model. It was a guest ad in the pages of Vogue. And this just created a lot of uproar because Vogue decides what is OK in fashion and what is not OK, right? Like, fashion did not embrace Kim Kardashian until Vogue put her on the cover. And then it was like, OK, I guess we can dress Kim in whatever high-fashion materials we want. So this is a big deal for several reasons.

• 17:57Rebecca Bellan?

  I mean, it's not the first time we've seen fashion brands do AI-generated fashion models. Levi's partnered with La La Land in 2023, and that actually drew a lot of criticism because it featured diverse AI models, AKA like women of color. And it drew a lot of criticism because in an industry where a lot of models of color actually struggle to get paid work, they're kind of ticking the box by not paying the models. It's an interesting lens to look at the broader issue of AI is taking creative jobs from people. And what does that look like? How does this change workflows? We go into it a little bit in the story about what types of fashion models are really at risk here. But, you know, I just want to pause for questions before I dive in further.

• 18:40Kirsten Korosec?

  Yeah, well, I'll go first. I edited this story. And to me, you're right in that Vogue is the bible. It essentially is the company that decides what is OK and what is not OK. And while it is an advertisement, it should be noted that when you page through a Vogue, and if you haven't done it, you know, you should, oftentimes, the advertisements look like editorial shoots. These are highly stylized, oftentimes couture. And so the line is somewhat blurred a little bit. To me, my question is, who are the winners here? Because on the one hand, clearly... Clearly, companies are, media companies are finding a way to reduce costs.

• 19:22Kirsten Korosec?

  Paying human models and setting them up and changing them in different clothes is expensive. So the models, the human models seem like the losers in this bit. But is it the media companies that are winning? Or is it the companies' tools that they've developed? Are they the ones winning? Like, or is it a little too early to tell?

• 19:39Rebecca Bellan?

  Well, no, it's not too early to tell. I mean, it's clear who the losers are, right? So there's, I just want to flag, there's like two types of models, really. I mean, maybe three. So like e-commerce models, like commercial models, they're the ones who make their bread. This is like the most lucrative, financially stable type of model there is. And they make their bread doing like catalogs and, you know, posing for, when you look on H and M's website and there's all these models there dressed up in the clothes, you can see what they look like on a human, that's what they do. And they also do ads. That is all really easy to replace with AI. It is so much easier because it's not necessarily considered art as much as it is like this is trying to sell a product. And then there's the high fashion models, right? And so that, we're seeing a slower adoption of AI there. This is more artsy, this is like a different path to revenue.

• 20:22Rebecca Bellan?

  So clearly, the models in the e-commerce world are losing. Ad agencies and brands that are trying to speed up the process and not have to like fly a bunch of models to a shoot on a beach and then like pay a whole set staff and then get all the clothes to make them try it on. It takes hours. It's a lot. It is a lot. And the amount of content these companies have to produce today with the social media era and, you know, there's so many different websites. There's so much digital content they need to produce that it's hard for them to keep up and keep costs down. So they're definitely winning. But then there are, yeah, cool startups that are coming out of this, right? I interviewed Art Care and the CEO is French and she talked about them being AI artisans. And they're in the business of fine tuning AI models to make them feel more human.

• 21:06Rebecca Bellan?

  They rely on, among other tools, Flux from Black Forest Labs. And Flux lets them tweak these AI-generated faces to land on something that feels perfectly imperfect, right? Just the right freckle here or what have you.

• 21:19Sean O'Kane?

  I also think that there's an element of this that is related to the health of the media industry in general, like not to go too galaxy brain, but I believe it or not, I worked at InStyle magazine a decade ago and I was on the website side, but it was pretty obvious at the time how much trouble that place and other magazines in general were having filling the pages that they need to fill on the ad side of things. This is an enormously crucial piece of the puzzle to keeping the print editions of even the biggest ones like Vogue alive. And so I would imagine that while this idea may have felt gauche like three or four years ago, whoever's in charge of filling those ad pages in every monthly issue is looking at this as like, well, this is free money. I guess we have

• 22:04Sean O'Kane?

  to kind of come to terms with it at some point because they don't have the options they used to have to fill these pages. So I think there's an element of that here, too. It's just hard to know exactly how much weight that carries right now.

• 22:15Rebecca Bellan?

  Yeah, I think it's good, though, to pay attention to how the models are showing up as well. Like diversity is important, of course, but also the company that was used for this, they were called Seraphine Valora, very odd company. It's hard to find much information on them aside from it's founded by a couple of architecture students, apparently, out of London. And the models, if you look through their Instagram page, just like all look exactly the same and they fulfill like a very one size fits all standard of beauty. And so that's something where Artcare comes in and they're trying to expand what beauty really looks like. So I think just as it was important for humans, I think it will be important for AI-generated models in the future.

• 22:52Kirsten Korosec?

  Yeah, it's worth noting that some of the most successful human models, and I guess we have to preface that now with that qualifier, have actually very unique and unusual looks to them and don't fit what might be considered a widely accepted beauty standard, certainly in the Western world. So.

• 23:11Rebecca Bellan?

  Shout out to Kate Moss's Gap Tooth.

• 23:15Kirsten Korosec?

  Companies that are able to actually achieve that might have more success. I do see a situation in which consumers start to reject it a little bit. So if magazines overextend themselves in terms of AI, just like we have started to already ignore AI slop and the huge amounts of it. This could turn against magazines if they're not careful about how it's used. But we need to move on because there's one more topic that I really want to get into. And it is about one specific story, but really it's a trend. Cognition is reportedly laying off about 30 Windsurf staffers. This is just a few weeks after acquiring the Vibe Coding Company.

• 23:58Kirsten Korosec?

  And sure, this is one story, but this is actually kind of a bigger, broader deal. Rebecca, what struck you when you saw this?

• 24:08Rebecca Bellan?

  I think it was that, I mean, we see this a lot of the times when there's acquisitions, right? There was a lot of assurances that everything would be okay. The Windsurf employees after, you know, our listeners already know this, but for those who don't, Windsurf's CEO and like top researchers were all acquired by Google. And so everyone was like, oh, you've left a husk of a company behind. And, you know, you're supposed to go down with the ship. How dare you? And all of these Windsurf employees were like, wow, we were gonna get acquired by OpenAI. Then we just lost our top people. What is our stock even worth? What is our compensation even worth? What will happen to us? Cognition swoops in, says, well, it's a great team. This is a really good team. You know, also their tech is cool and the product's good, but the team is really nice. And so to then have cognition turn around and say, okay, jokes,

• 24:52Rebecca Bellan?

  we're gonna fire about 30 of you. I don't know in which teams they were, I don't know, something where there's redundancies. But not only we're gonna fire you, we're offering buyouts to the roughly 200 remaining employees. You'll get about nine months' salary if you choose to leave. And if you don't choose to leave, you better buckle up because it's six days in the office, 80-plus hour work weeks, which is really becoming table stakes. CEO Scott Wu was quoted as saying, "We don't believe in work-life balance." So that's really, yeah, that just kind of sucks.

• 25:18Sean O'Kane?

  That's what you want to hear.

• 25:20Rebecca Bellan?

  Yeah. It's funny how fast Silicon Valley switched like from maybe like seven years ago, people on Instagram, so this is my day as a Google employee. First I wake up and then I get a smoothie and then I like relax and then now it's um, yeah, you better, you better sign your first born to us.

• 25:37Kirsten Korosec?

  It's hardcore mode, but something that Elon has talked a lot about and has been rewarded and celebrated for, and I think that a lot of Silicon Valley has gone back to this six days a week in the office. To me, it is just kind of pulling back a little bit. Looks at this broader trend of where we're seeing, first of all, a war over talent, extremely large compensation packages, which we've talked about before, to the founders and CEOs of these startups. And then the remainders of these startups, sometimes being discarded, sometimes being bought up by another company. But really, this to me feels very different from back when I saw

• 26:19Kirsten Korosec?

  this type of deal cycle in, let's say, 27, 2018, a lot of aqua hires, people weren't being let go. And it wasn't like the CEO and founder were being pulled to like a big company like Google, where the rest of the company remained. I don't recall a time like this. I mean, maybe I've forgotten it already, but Sean, Rebecca, do you recall? Like, this seems unusual in a specific moment in time. And I'm kind of curious how long it's gonna last.

• 26:45Sean O'Kane?

  It's crazy. I mean, all of this is crazy. Not just the weird acquisitions that aren't acquisitions, wink, wink, wink, but like also the salaries that are being thrown around. It's all insane in so many ways and seems to be connected to, you know, whatever is driving some of these people who run these companies to say stuff like Scott we was saying about not believing in work-life balance. There's a mania to that that I feel like is connected to the macro moves that are happening with these pochings and pseudo acquisitions. And I also feel like I'd be curious to hear your guys' thoughts on this, but we're coming off what was a pretty forceful antitrust administration with Biden, where mergers and acquisitions were scrutinized

• 27:29Sean O'Kane?

  really closely and the Trump Administration was thought to maybe continue that. It was one of the things that there was actually something in common between the two administrations, at least some people thought at the outset. And it's somewhat true, but it's also only true in the sense that the administration seems to be paying close attention to mergers and acquisitions to let ones through that it can benefit from politically in some way or disapprove of other ones. I'm really interested in the idea of like these kinds of moves where it's like we're hollowing out a company, but we're not acquiring it. So you can't really come at us for antitrust issues. They became popular all of a sudden in the auspices of that past administration and like continued to happen because I think people thought that, you know, they could get cracked down on for this stuff.

• 28:13Sean O'Kane?

  And I don't know that that's necessarily still true, but every time I look at stuff like, you know, another one of these happens seems every other month. And that's all I can kind of think about is it felt like it was a dodge. And I don't know that that dodge is necessary anymore. Like, couldn't these people have been spared some of this chaos if Google had just acquired everything?

• 28:30Rebecca Bellan?

  Well, I think they're probably worried about what will happen during, you know, a next administration. I think that they are still trying to avoid the trigger of an antitrust investigation, and it's a low bar, it seems, for triggering an antitrust investigation. On the flip side, we've seen Figma IPO, right? We've talked about this on the show. I talked about it earlier this week with Jay Doss of Sapphire Ventures. And Figma was supposed to be acquired by Adobe in 2023, but European market authority put the kibosh on that. And then look what happened. They were able to grow and expand as a company. And Lina Khan has pointed to this as an instance in which antitrust scrutiny does work because it allowed the company to stay competitive and to IPO at a way higher valuation than it would have gotten in 2023 from Adobe.

• 29:14Rebecca Bellan?

  And then Adobe is putting a ton more money into R and D. So that's increasing competition. I mean, I think that this administration doesn't seem like they're going to try to come after these types of acqui-hire deals, but I think it definitely deserves that kind of scrutiny.

• 29:25Kirsten Korosec?

  It'll be interesting to see how that shapes up. I wouldn't bet on more scrutiny, but it might play out on its own. I mean, one thing I've been thinking about a little bit is the size of the compensation packages are so large. That I wonder what companies can really afford. And they're really just targeting after a couple of companies. It's just they can't simply afford to bring everyone on. It's one thing to acquire in a company, but then you have to give all these people salaries. And if you want to retain all that talent. So it is another workaround, particularly if, you know, sure, the Googles and Metas of the world have a ton of money, almost seems like an infinite pile to throw at people. But there is an end to that, like you can't do that forever. So that is something I've been thinking about a lot as well.

• 30:09Kirsten Korosec?

  And also I wonder about like the IP play, which is if the IP exists within the minds of the founder and the CTO and maybe a couple of other key patent holders, for instance, why would a company acquire everyone else if they have already a very large company that can execute on that IP? I kind of wonder if more companies are going to do this even outside of AI as a way to just access the IP and a couple of key people and just discard the rest. So I would predict, I feel confident in this prediction that we're going to see more of this for sure, but I think actually it might blow out into other sectors outside of AI. And that is all the time we have today, but Equity will be back next week.

• 30:54Kirsten Korosec?

  Thank you, Sean and Rebecca, for joining me. It would have been very lonely if I was here all by myself. Until then, you can find Equity under the handle at EquityPod on X and Threads.

• 31:08Rebecca Bellan?

  Equity is produced by Teresa Locan Solo with editing by Kel. We'd also like to thank TechCrunch's audience development team. Thank you so much for listening and we'll talk to you next time.