I have a packed issue this week, starting with the implosion of a once-hot social media startup called IRL. It raised $200 million at over a $1 billion valuation, and now its board is dissolving the company after finding that most of its users were fake. The SEC is investigating. It’s a whole mess. I have ex-CEO Abraham Shafi’s first public comments on the situation since he was ousted by the board.
” He expects an “explosion” of new startups now that the cost of building generative AI experiences with open-source technology is rapidly coming down. Another side effect is that large funding rounds for early-stage, pre-revenue AI startups — like the $1.3 billion round Inflection AI announced just yesterday — may become a thing of the past. “If you go out to build a foundational model company, you need $100 million plus to train models,” explained Farshchi.