Ben Horowitz’s cozy relationship with the LVMPD - and why it matters | Equity Podcast

Acquisition of Infowars by The Onion and Elon Musk's Role in Government Efficiency

• The Onion has acquired the bankrupt Infowars, with the purchase price being under a trillion dollars, according to the head of global Tetragon 1m8s.
• Elon Musk has been tapped to co-lead the Department of Government Efficiency, also known as "Doge," alongside Gia, which has raised questions about its purpose and funding 1m22s.
• The department has two co-chairs, which seems counterintuitive to its goal of efficiency, and Musk is selling merchandise related to the department 2m2s.
• The press release does not mention any plans to cut $2 trillion from the budget, as previously discussed 2m9s.
• Elon Musk's role in the department is expected to be limited, as he will be joining thousands of other federal advisory organizations and submitting a report, with his actual power likely being minimal 2m55s.
• Musk's position does not require him to divest from his companies, and he will likely maintain his influence through his relationships with government officials, including President Trump 2m26s.
• The hosts discuss the potential for Musk's involvement with the department to be short-lived, with Trump potentially losing interest in him over time 3m22s.

Clara's Confidential IPO Filing and Internal Drama

• Clara, a buy now pay later startup, has confidentially filed a draft registration statement with the SEC, indicating its preparation for an IPO, with the company valued at around $14.6 billion after previously being valued at $45 billion and then plummeting to $6.5 billion 4m20s.
• The company has been gearing up for the IPO for a year or two, with a dramatic behind-the-scenes story, including a reported attempt by Sequoia (Seoa) to oust Mike Moritz, a well-known OG Sequoia partner, from the board 5m0s.
• The attempt to oust Moritz was reportedly due to a disagreement over the company's direction, with the CEO, Sebastian Siemiatkowski, wanting special shares, which a previous co-founder opposed 5m24s.
• Sequoia eventually replaced the partner who wanted Moritz to leave the board, and Moritz remained on the board, with Sequoia publicly doubling down on their support for the CEO and the company 5m48s.
• The drama surrounding Clara's IPO may have slowed the process, but it is unclear if this is an isolated incident or if similar drama is affecting other companies preparing for IPOs 6m12s.
• The IPO market, which had momentum at the beginning of 2024, seems to have stalled, with Clara's IPO potentially happening in 2025, along with other companies like Shen 7m20s.

VCNA's Funding and Leadership Change

• VCNO Robotics, a different company, has raised $14.5 million, bringing its total raise to $179 million, in a situation unrelated to Clara's IPO drama 7m42s.
• A company, VCNA, has raised $14.5 million in funding, with Tiger Global as the lead investor, and has a total of $179 million in funding, which seems like a small amount on top of the larger amount already raised 7m56s.
• The company is working on automation in warehouses, using autonomous vehicles, and has commercial customers, with a new CEO, Carl Yanma, who was an early pioneer of the AV world and previously led Motional, a $4 billion joint venture between Hyundai and Aptiv 8m15s.
• Motional has gone through hard times, with Aptiv deciding not to put more money into it, and Hyundai becoming the majority owner by investing another billion dollars, leading to a restructuring and delay of the project 8m44s.
• Carl Yanma stepped down from Motional and is now leading VCNA, which is a pivot from his previous focus on Robo taxis to warehouse automation 9m1s.
• The company's funding and commercialization strategy is questioned, with concerns about the need for additional funding and the potential for burning out or decreasing valuations 9m42s.
• The trend of startups continuously raising money and claiming commercialization, while not actually making a profit, is discussed, with examples like GrubHub selling for a fraction of its original value 10m41s.
• The practice of startups raising extension rounds when they can't secure a new round of funding is also mentioned, which can be a sign of underlying issues with the company's financials or growth prospects 11m25s.

Starfish Space's Satellite Servicing Mission and Funding

• Starfish Space is a satellite servicing spacecraft missions company that creates "space tugs" to extend the life of expensive satellites and perform orbital maintenance, a necessary task with thousands of satellites being launched in the coming years 11m49s.
• The company has demonstrated its capability, secured contracts with the military, NASA, and commercial entities, and raised $29 million to execute on these contracts 13m2s.
• One investor in Starfish Space is Toyota Ventures, which likely participated due to its vast company divisions and potential component usage in the space industry 13m33s.

Ben Horowitz's Donations and Influence on the Las Vegas Police Department

• The discussion will shift to a story about Ben Horowitz, a famed investor, and his relationship with the Las Vegas Police Department 14m17s.
• Puerto Rico is being promoted as an innovation hub with a vibrant ecosystem, highly skilled and bilingual talent, and competitive tax incentives for startups and global players 14m30s.
• Ben Horowitz, an investor in Skydio, a US-based drone manufacturer, donated Skydio drones to the Las Vegas Police Department (LVMPD) without going through a normal contract process 15m27s.
• Horowitz also donated Flock Safety equipment, a surveillance camera system from another one of his portfolio companies, to the LVMPD 16m24s.
• In addition to these donations, Horowitz facilitated connections between the LVMPD and at least four other companies in his portfolio 16m33s.
• Horowitz used the Las Vegas Police Foundation, a non-profit organization, to donate money and earmark it for specific technologies or programs, allowing him to influence the LVMPD's adoption of certain technologies 16m51s.
• This strategy, while not illegal, raises concerns about the potential for misuse or waste of taxpayer resources and the circumvention of normal bidding processes 17m21s.
• The practice of donating technology to the police department through a foundation can be seen as problematic, as it allows companies to influence the adoption of their products without going through a competitive bidding process 17m35s.
• The use of this loophole can lead to the adoption of technologies that may not be the best fit for the police department's needs, and can also create conflicts of interest 17m43s.
• The normal bidding process and limitations on police technology adoption are in place to prevent misuse or waste of resources, and to ensure that the technologies used are properly documented and evaluated 18m9s.
• The relationship between private donors and public organizations, such as police departments, can be problematic when donations are made with the expectation of influence or favor in return, as seen in the case of Ben Horowitz's donations to the Las Vegas Metropolitan Police Department (LVMPD) 18m52s.
• This type of relationship can create an uneven playing field for other companies trying to bid for contracts, as the police department may already have received free or donated technology from another company 19m25s.
• The use of donations to acquire controversial or experimental technology, such as surveillance drones or facial recognition software, can circumvent public oversight and budgeting processes 19m34s.
• The Los Angeles Police Department's acquisition of Palantir technology through a donation to the police foundation is cited as an example of this phenomenon 19m41s.
• Similar issues have arisen with the use of Clearview AI's facial recognition technology, which was donated to many police departments without proper oversight or public disclosure 20m3s.
• While donations may initially be free, they can often lead to future contracts and maintenance agreements that benefit the donating company 20m47s.
• The increasing use of technology in law enforcement raises concerns about the potential for private companies to exert influence over public agencies through donations and other means 21m11s.
• The use of donations to acquire technology can create a model for other venture capitalists and private companies to follow, potentially undermining public oversight and accountability 21m42s.
• The fact that many nonprofits are not subject to public records requests can make it difficult to track the flow of donations and influence between private companies and public agencies 22m10s.

Bidding War Over AI-Powered Coding Assistant Startup Cursor

• There is a bidding war over AI-powered coding assistant startups, specifically Cursor, which is a popular coding AI tool used by many developers to find bugs and fill in gaps in their code 22m27s.
• Cursor is one of the few monetizable ways to use current AI technology, and its company, AnySpere, is receiving unsolicited offers from investors like Benchmark, Index Ventures, Andreessen Horowitz, and Thrive 24m12s.
• The offers are likely due to Cursor's success in the coding world, where people are willing to pay for AI assistance to make their jobs less tedious 23m7s.
• The interest in acquiring Cursor may indicate that bigger companies in the space are more interested in consolidation and capturing valuable markets rather than innovation 23m25s.
• The potential acquisition of Cursor by a larger company could lead to its integration into the company's services, a common pattern in the tech industry 23m43s.
• The FTC's potential inability to regulate such acquisitions could lead to more predatory purchases in the future 23m49s.
• AnySpere may choose to sell or remain independent, but it is likely that the company will sell, as the founders may not want to run the company long-term and could use the acquisition to fund other projects 24m36s.
• There may be room for other AI-assisted coders to have exits like Cursor, but it is unlikely that another company would pay a similar amount of money to acquire a rival to Cursor 25m11s.

Upcoming Stories and Projects, and Equity Podcast Information

• Margot is working on a story about Dryden Brown, the founder of Proxis, who flew to Greenland to try to buy the country, and the story is expected to be published over the weekend 25m56s.
• Devin does not have any upcoming projects, but he recently published two interviews with the head of Intuitive Machines and Orin Etsion, who runs a nonprofit that does deep fake detection 26m32s.
• Listeners can find Devin's interviews by searching through his author archive, and they are recommended to check out the posts from the past few days 26m45s.
• The Equity podcast will be back next week, and listeners can find the show under the handle @EquityPod on X and Threads 27m3s.
• The Equity podcast is produced by Teresa Lo, with editing by Kell Bryce, illustration by Durban, and audience development managed by Henry Pick 27m13s.