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Top News

French President Emmanuel Macron warned that France and the EU will hit back if Donald Trump follows through on threats of tariffs and restrictions targeting Europe’s digital services taxes and tech rules. Bloomberg has more here.

In related news, a new UK court filing suggests Britain’s Home Office tried to force Apple to give backdoor access not just to its advanced encryption but to standard iCloud backups worldwide and has not backed down from its position, as Trump administration officials have suggested. The Financial Times has more here.

WhatsApp fixed a zero-click flaw that hackers used to infiltrate almost 200 iOS and Mac devices in what Amnesty International described as an advanced spyware campaign that has been active since late May. TechCrunch has more here.

Uber and Lyft drivers in California secured the right to unionize while still being classified as independent contractors, a first-of-its-kind deal that boosts worker power in exchange for looser insurance mandates and could set precedent nationwide. TechCrunch has more here.

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Cracks Are Forming in Meta’s Partnership With Scale AI

By Maxwell Zeff & Marina Temkin

It’s only been since June that Meta invested $14.3 billion in the data-labeling vendor Scale AI, bringing on CEO Alexandr Wang and several of the startup’s top executives to run Meta Superintelligence Labs (MSL). But the relationship between the two companies is already showing signs of fraying.

At least one of the executives Wang brought over to help run MSL — Scale AI’s former Senior Vice President of GenAI Product and Operations, Ruben Mayer — has departed Meta after just two months with the company, two people familiar with the matter told TechCrunch. 

Mayer spent roughly five years with Scale AI across two stints. In his short time at Meta, Mayer oversaw AI data operations teams and reported to Wang, but wasn’t tapped to join the company’s TBD labs — the core unit tasked with building AI superintelligence, where top AI researchers from OpenAI have landed. 

However, Mayer disputes some details about his role, telling TechCrunch that his initial position was “to help set up the lab, with whatever was needed” rather than run data operations, and that he was “part of TBD labs from day one” rather than being excluded from the core AI unit. Mayer also clarified that he “did not report directly to [Wang]” and was “very happy” with his Meta experience.

Beyond the personnel changes, Meta’s relationship with Scale AI appears to be shifting. TBD Labs is working with third-party data-labeling vendors other than Scale AI to train its upcoming AI models, according to five people familiar with the matter. Those third-party vendors include Mercor and Surge, two of Scale AI’s largest competitors, the people said. 

While AI labs commonly work with several data-labeling vendors – Meta has been working with Mercor and Surge since before TBD Labs was spun up –  it’s rare for an AI lab to invest so heavily in one data vendor. That makes this situation especially notable: even with Meta’s multi-billion-dollar investment, several sources said that researchers in TBD Labs see Scale AI’s data as low quality and have expressed a preference to work with Surge and Mercor.

Big-But-Not-Crazy-Big Fundings

FriendliAI, a five-year-old startup based in Redwood City, CA, that helps organizations run AI models more quickly and cheaply by providing an optimized system for handling inference, raised a $20 million seed extension led by Capstone Partners, with Sierra Ventures, Alumni Ventures, KDB, and previous investor KB Securities also investing. Crunchbase News has more here.

Smaller Fundings

ALIGNMT AI, a two-year-old company that provides tools for hospitals and health insurers to oversee and manage their use of artificial intelligence in order to meet regulations and protect patients, raised a $6.5 million seed round led by AIX Ventures, with additional participation from Sancus Ventures, Alumni Ventures, and Dent Capital. HIT Consultant has more here.

Ordinal, a two-year-old startup based in Bentonville, AK, whose AI system enables local government administrators to search official records and find accurate answers for municipal work, raised a $1 million seed round led by Plains Ventures, with Winrock International and The Venture Arkansas Fund also pitching in. More here.

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Exits

Vector Capital, a San Francisco PE firm, is acquiring Showpad, a 13-year-old revenue enablement company based in Chicago and Ghent, Belgium, and merging it with Bigtincan, the sales software company it bought in April, with Insight Partners rolling its Showpad stake into the combined business. More here.

Flip, a four-year-old L.A. startup that lets shoppers post video reviews and get paid based on likes and purchases, has shut down after raising $300 million and reaching a valuation of more than $1 billion in 2024. The Information has the scoop here.

Going Public

September is shaping up to be one of the busiest IPO months in years, with Klarna, Gemini, Figure, Legence, Black Rock Coffee Bar, Via, and StubHub all prepping to hit the market after Labor Day. Bloomberg has more here.

People

Taz Patel, Perplexity’s ad chief, has exited after just nine months, highlighting the strain of building a business that pulled in only $27,000 in Q4 ad revenue even as the AI search startup commands an $18 billion valuation. AdWeek has the scoop here.

Elon Musk is asking a judge to toss an SEC lawsuit accusing him of hiding his 2022 Twitter stake until after he’d quietly stockpiled shares, a delay the agency says cheated investors out of $150 million in gains. Bloomberg has more here.

Whitney Wolfe Herd is back at Bumble with a secret project to launch an AI-powered matchmaking app this fall, betting that algorithms trained on psychology and attachment theory can pair people better than swipes. The Wall Street Journal has more here.

Essential Reads

Citing internal emails, Wired reports that the White House told the GSA to reinstate xAI’s Grok to the federal vendor list “ASAP” after it had been pulled for antisemitic content. Wired has more here.

Meta’s scramble to reinvent its AI group isn’t going as planned, with prized hires like Shengjia Zhao nearly bolting back to OpenAI, others quitting after weeks, and long-time veterans heading for the exits, all while Zuckerberg and Alexandr Wang push dueling visions for how fast the company can deliver “superintelligence.” “There’s a lot of big men on campus,” one insider quipped. The Financial Times has more here.

New reporting from The Washington Post reveals that a hacker uncovered crash data Tesla claimed didn’t exist from a 2019 Autopilot fatality, evidence that played a key role in persuading a jury to deliver a $243 million verdict against the company. More here.

The Wall Street Journal digs into how Stein-Erik Soelberg, a troubled 56-year-old tech veteran, relied on ChatGPT to validate his paranoid delusions before killing his mother and himself. More here.

Sphere Entertainment dropped $80 million to use AI and immersive effects to rework The Wizard of Oz for its Las Vegas venue, cutting 30 minutes and expanding scenes in a move cinephiles call “artistic butchery” but that could test whether nostalgia plus AI can mint a new revenue stream from old Hollywood IP.

Detours

As Starlink brings high-speed internet to the playa, allowing some Burners to Zoom into work or post to TikTok, Burning Man purists are fuming, viewing Starlink as a betrayal of the festival’s unplugged ethos.

Brain Rot

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Retail Therapy

A former exec at watchmaker Hublot just launched the Okapa, a $295 luxury water bottle made from surgical-grade glass, stainless steel, and anodized aluminum. For water.

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