Etched Doubled Its Valuation in a Month. Here's What That Tells Us

LaurenHey, welcome back to Tech Insider Weekly. Glad you're here.

DerekAnd I'm just glad the coffee kicked in before we hit record.

LaurenSame. Okay, so get this. The AI funding numbers this week are wild. Etched's valuation jumped again, and we're going to ask whether some of these marks are backed by real revenue.

DerekPlus, Phoebe Gates is out there trying to build her own startup without leaning on the family name. That's a story with layers.

LaurenOh, for sure. Switching gears here, Stripe and Anthropic both went shopping this week.

DerekBig checks, infrastructure, distribution. We'll look at what they're actually buying and why.

LaurenThen there's robotics. Derek, you've been geeking out about this one.

DerekGuilty. Sebastian Thrun's got a new venture, and SoftBank just wrote a check to a construction robotics company. We're asking why investors are suddenly comfortable with hardware again.

LaurenAnd we'll close on something heavier, the lawsuit accusing Selena Gomez's team of faking Wondermind's success and what that says about founders who oversell.

DerekYeah, that one's rough.

LaurenLots to get through. Derek, where do you want to start?

DerekLet's start with the chips. Everyone's chasing that valuation this week.

LaurenTwenty-one billion dollars for a company that sold chips to basically nobody a year ago.

DerekEtched. Yeah, I saw that too.

LaurenWow.

DerekSeven hundred million raised, and a month ago, they were sitting at half that valuation.

LaurenHalf, as in ten and a half billion became twenty-one in four weeks. What actually happened there?

DerekSiliconANGLE and TechCrunch both flagged the same trigger. Jane Street installed Etched's first shipped AI cluster and loved it enough to lead the round.

LaurenOne customer, one deployment, and the price tag doubles?

DerekOne customer that bets billions a day and just bet on your silicon working under load. That's not nothing.

LaurenSure, but walk me through what an inference chip even does, because I keep hearing it and nodding along like I get it.

DerekFair. A GPU is built to do a little of everything, training models, rendering graphics, running your niece's crypto miner.

LaurenRude, but go on.

DerekAn inference chip only does one job. Take a model that's already trained and spit out answers fast and cheap at scale. Strip out everything else, and you get more speed per dollar per watt.

LaurenSo it's a race car built for one track.

DerekExactly. And right now, every company running a chatbot at scale needs that track paved.

LaurenOkay, that I buy. What I don't buy as easily, Temporal is reportedly in talks at twelve billion, according to Bloomberg, and Velaura just turned a hundred and ten million Series A into a billion dollar mark. What revenue is actually behind those numbers?

DerekThat's the part nobody's publishing. Velaura's pitch per QZ is its Titan core chip platform, two to four times the performance per watt on AI workloads.

LaurenTwo to four times, sure, on paper. Show me the deployed customers, not the pitch deck.

DerekThat's the gap right now. Hardware promises versus hardware shipped, and investors are pricing the promise.

LaurenWhich is exactly how you get a billion dollar mark off a hundred and ten million raise. It's a bet on math that hasn't run yet.

DerekAnd Temporal hasn't even confirmed the number. Bloomberg's reporting talks, not a signed term sheet.

LaurenRight. In talks is doing a lot of work in that sentence.

DerekIt always is. Switching gears here, there's a version of this story with a face on it, Phoebe Gates.

LaurenOh, Phia, the shopping app. It always is. Switching gears here, there's a version of this story with a face on it, Phoebe Gates. Oh, Phia. The f-

DerekFortune's Sydney Lake profiled her this week.

LaurenRight.

DerekPhia's sitting at a hundred and eighty-five million dollar valuation, and Gates told her she wants it to stand with, quote, "No ties to my privilege or my last name."

LaurenThat's a tough ask when your last name is Gates. An impossible ask, honestly. Every term sheet she signs, somebody in that room is thinking about her dad.

DerekDoes the money care where it came from, though? Valuation's valuation.

LaurenThe money doesn't care. The story does. And Lake's piece also mentions Phia's been accused of cookie stuffing, so there's already scrutiny a less famous founder might not get.

DerekOr might get worse, and nobody writes about it.

LaurenWhich might be the real privilege, getting caught publicly instead of just quietly failing.

DerekSo you've got chip makers doubling in a month, hardware bets running ahead of revenue-

LaurenYeah

Derek... and a nine-figure valuation trying to outrun a last name.

LaurenAnd every one of those checks came from a private investor placing a bet on where the value sits in this stack.

DerekChips, models, or the app on top.

LaurenRight. So what happens when it's not venture money making that bet anymore? What happens when it's a corporation with a nine-figure checkbook writing that check instead? Shock.

DerekSpeaking of numbers that don't add up, Stripe just dropped word they're buying OpenRouter for north of seven billion dollars.

LaurenWait, the router thing? The company that just passes your prompt to whichever model you picked?

DerekThat's the one. Anthony Ha reported it for TechCrunch, and Bloomberg confirmed the price tag Sunday.

LaurenFor the folks who don't code, what does a gateway actually do?

DerekFor the non-engineers in the audience, think of it like Uber.

LaurenMm-hmm.

DerekYou open one app, punch in where you're going, and it matches you with whichever driver's closest. OpenRouter does that for AI models. One request, and it matches you with GPT or Claude or Llama, whichever fits the job.

LaurenSo it's the bouncer deciding which model gets the job.

DerekPretty much. And Ha's piece quoted OpenRouter's CEO calling it Stripe for AI. So Stripe just bought a company that named itself after Stripe.

LaurenThat's either flattering or deeply awkward.

DerekBit of both.

LaurenBut why does Stripe need this? They move money. Couldn't their own engineers build a router in six months?

DerekProbably, but owning the routing layer means owning the relationship. Every developer touching ten different models-

LaurenRight

Derek... now touches Stripe's pipes to get there.

LaurenSo it's basically about sitting in the middle of every transaction.

DerekRight. And once you're the toll booth, switching costs do the work for you.

LaurenThat actually tracks with how Stripe built payments in the first place.

DerekAnd it's not the only ten-figure move this week. Anthropic reportedly in talks to buy Descartes, an Israeli startup, for about six billion.

LaurenSix billion for what?

DerekChip efficiency and what's called world model tech. Fortune and Bloomberg both flagged it as Anthropic's biggest deal ever if it closes.

LaurenRight as they're gearing up for an IPO.

DerekThe Jerusalem Post put a number on that too, reportedly targeting something like a two trillion dollar valuation. And per their reporting, the Decart deal would mint new billionaires among the founders.

LaurenWhistle from Tel Aviv to billionaire status in one signature.

DerekWow. If it closes, yeah.

LaurenSo zoom out. Stripe buys a router. Anthropic buys a chip-efficiency shop. Neither one bought a chatbot.

DerekSame story twice in one week. Nobody's shopping for apps right now. They're buying the pipes underneath them.

LaurenWhich says something about where people think the money actually sits.

DerekOwn the layer everyone has to pass through, you get paid no matter who wins the model war.

LaurenMakes the App Store wars look almost quaint.

DerekAnd the same appetite for Infrastructure is spilling into hardware. Actual machines, not just pipes.

LaurenNow we're talking things you can trip over.

DerekLiterally. Wait till you hear what Sebastian Thruns is building.

LaurenOkay, pipes to steel, actual machines now.

DerekSebastian Thruns's back. The Waymo guy just started a new company called Dulo.

LaurenWait, the guy who built self-driving cars from scratch is doing robots again?

DerekYeah. Business Insider's Rya Jetha broke it. Dulo's working on hardware design models, and he's pulled in a team of industry veterans.

LaurenOkay, but what actually makes this different from every other humanoid robot pitch deck I've seen this year?

DerekTrack record. This is the guy who turned computers driving cars from a joke into a business Google bet billions on.

LaurenSure, but timing matters more than pedigree. Robotics capital cycles crushed people for a decade.

DerekWhich is exactly why this next one's wild. SoftBank just put two hundred million dollars into Gravis Robotics.

LaurenThe construction robot company?

DerekAutonomous excavators. Inc.com reported SoftBank's the sole investor, and they're calling it the largest Series A in construction robotics history.

LaurenAnd Gravis wasn't even a US company originally.

DerekSwiss. EU-Startups' David Cendon had it. A hundred and seventy-two million euro round, about two hundred million dollars, made them their newest unicorn.

LaurenOkay, here's my actual problem. Hardware margins are brutal. You're financing steel, batteries, service trucks. That's not SaaS math.

DerekBut construction sites are a bounded problem. Same job site, same terrain, same task every day. That's not an open road with a school bus running a stop sign.

LaurenFair. Fewer edge cases.

DerekWay fewer. That's the pitch investors avoided for ten years, and now they're buying. Control the variables, and autonomy actually ships.

LaurenIt ships until the excavator hits a gas line nobody mapped.

DerekSure, but that's the insurance company's problem now.

LaurenThe Business Insider piece on this whole wave had a number that stopped me. Physical AI startups raised sixteen point three billion dollars across four hundred and ninety-two deals just in the first quarter.

DerekWait, that's PitchBook data?

LaurenYeah, cited in that same Business Insider piece. Falling hardware costs, labor shortages, pressure to bring manufacturing back. That's the case they make.

DerekSo the bet's not that every robot startup wins.

LaurenIt's that the ones who solve the boring, contained problems, a construction site, a warehouse aisle, actually get paid before the flashy humanoid demos do.

DerekAnd when this cycle breaks something, it won't be a valuation quietly marked down in a spreadsheet. It'll be a customer standing next to a stalled machine.

LaurenVisible failure. Excavator's stuck. Cameras roll. The funding memo gets read out loud in a lawsuit. Speaking of lawsuits. From excavators to heartbreak, this one's personal. Selena Gomez's mental health startup, Wondermind, just got hit with a federal lawsuit.

DerekWait, the one she launched with her mom?

LaurenYeah. Lauren Edmonds at Business Insider reported she launched it in twenty twenty-one with her mother, Mandy Teefey, and business partner Daniella Pierson.

DerekAnd investors are saying what, exactly?

LaurenKevin Dolak at The Hollywood Reporter got the filing.

DerekWow.

LaurenInvestors claim all three faked the company's success and hid the collapse for three years.

DerekWow, three years. That is an impressively sustained coverup.

LaurenI mean, I've fudged a slide deck before. I have never hidden a company's real state from my own board for three years.

DerekLow bar, but you're clearing it.

LaurenWhich brings up the document nobody wants to write when they're in love with their own idea, the breakup agreement. Agnes Applegate wrote about this for Business Insider. Founders drafting the divorce terms before the wedding.

DerekEquity splits, who keeps the domain, what happens if one of you just leaves?

LaurenI didn't have one at my second startup.

DerekMm-hmm.

LaurenWhen my co-founder walked, we spent four months arguing over a trademark instead of shipping product.

DerekOuch, winching. Four months you don't get back.

LaurenCheaper than a lawyer fight. Way cheaper than a lawsuit with your name in the headline.

DerekSo Jimmy Cockerton had a CEOWORLD piece on this. Everyone repeats the ninety percent failure stat.

LaurenWithout asking why. It's rarely the market. It's founders who never wrote down what happens when things go wrong.

DerekSo what's the one thing to actually do?

LaurenAsk your co-founder this week, if one of us wanted out tomorrow, what happens to the equity, the code, the passwords?

DerekIf that conversation ruins your Tuesday...

LaurenYou needed it before your Tuesday, not after your Series A. Okay, before we let you go, Derek, what's sticking with you from today?

DerekHonestly, that Wondermind lawsuit. Founders faking traction to keep investors happy. That's the story under every headline we covered.

LaurenRight? And it's the flip side of Etched doubling its valuation in a month. Some of these numbers are real. Some are aspirational.

DerekAspirational. I like that.

LaurenSo here's the takeaway. Check who's actually shipping before you believe the sticker price.

DerekHmm. Words to live by.

LaurenIf you liked this one, subscribe wherever you're listening and leave us a review. It genuinely helps.

DerekAnd if you've got a founder we should talk to or a story we're missing, send it our way. Tag us, DM us, whatever works.

LaurenNew episodes every Wednesday. Thanks for spending your week with us.

DerekSee you next time.