Image Credits:Bryce Durbin\/TechCrunch <\/p>\n
The tie between startups and the U.S. government have strengthened in recent years, a shift buoyed by an interest in using AI, automation, space, robotics, and climate tech for defense. And while that has provided another welcome path to capital, the relationship is getting complicated.<\/p>\n
A growing share of startups have the U.S. government as customers, or are aiming for permits and defense-related contracts. When the government is operational, that connection can provide a needed boost and revenue to startups. But when the government ceases to function, as it did starting October 1, those close ties can stifle or even halt progress for startups.<\/p>\n
This week on\u00a0Equity<\/a>, Anthony Ha, Max Zeff, and I (Kirsten Korosec) talk about how a prolonged U.S. government shutdown poses more risk for startups than in the past \u2014 not to mention put a damper on an active IPO season. The three of us dug into a few other topics too, including the how AI companies are trying to monetize and the U.S. government\u2019s latest push to take ownership stakes in the tech and industrial sectors.<\/p>\n \u201cThis also feels like a reflection of how the startup landscape has changed in say the last decade and especially over the last few years,\u201d Ha said during the Equity podcast, adding the focus was on consumer internet startups for a long time. \u201cObviously there\u2019s a lot more going on in defense tech, a lot more in deep tech where you maybe need various kinds of regulatory approvals,\u201d he continued. \u201cAnd so, it feels like much broader swaths of the startup landscape now depend on the government in various ways, in ways that wasn\u2019t necessarily true 10 years ago.\u201d<\/p>\n But it\u2019s not just startups. The Trump Administration has also continued to extend its reach, and ownership, into the tech industry, too.<\/p>\n The Trump Administration has renegotiated yet another federal loan \u2014 it\u2019s third in recent months followed by one with Intel and rare earth miner MP Materials \u2014 and taken an equity stake as part of the newly hashed out deal.<\/p>\n The U.S. government took a 5% stake in Canadian miner Lithium Americas and another a 5% ownership in a Lithium Americas-GM joint venture to mine lithium in Nevada. The equity stakes will be acquired through no-cost warrants, which are financial instruments that give the government the right to purchase shares at a set price. The new terms came out of a renegotiation with the DOE\u2019s Loan Programs Office\u00a0of a $2.26 billion loan<\/a>\u00a0that was awarded to Lithium Americas under the Biden Administration.<\/p>\n Watch the full episode to hear more about the government\u2019s relationship with startups and tech companies as well as the entertainment industry\u2019s reaction to AI-generated actress Tilly Norwood, and an eye-popping seed round for Periodic Labs.<\/p>\n","protected":false},"excerpt":{"rendered":"Image Credits:Bryce Durbin\/TechCrunch The tie between startups and the U.S. government have strengthened in recent years, a shift…\n","protected":false},"author":2,"featured_media":474949,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5311],"tags":[151474,157745,10734,49,978,659],"class_list":{"0":"post-474948","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-united-states","8":"tag-government-shutdown","9":"tag-internet-startups","10":"tag-u-s-government","11":"tag-united-states","12":"tag-us","13":"tag-usa"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115319337870593630","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/474948","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=474948"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/474948\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/474949"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=474948"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=474948"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=474948"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}