Technology

Cruz Foam makes styrofoam alternative from shrimp shells and food waste

Published

2 years ago

February 8, 2023

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Cruz Foam, and pro surfer Zak Noyle, are fighting plastic pollution.

Cruz Foam

More than 100 cities in the US have put ordinances in place restricting or flatly banning the use of disposable styrofoam, especially by restaurants and for shipping food and other products. In the state of California alone, 97 cities or counties have a partial or full ban on single-use styrofoam, with another one slated to take effect in Los Angeles County this May.

Meanwhile, companies that ship or sell fragile goods, food or medical supplies that need to stay cold during shipping still need materials with the lightweight, insulating qualities and manufacturability of styrofoam.

That’s where startup Cruz Foam comes in. Founded in 2017 by CEO John Felts and CTO Marco Rolandi the startup, which employees about 30 full-time today, has created an alternative to expanded polystyrene, better known by its trade name styrofoam.

Cruz Foam is made from naturally occurring materials including chitin (pronounced like “kite-in”) along with starches and fibers diverted from agricultural waste streams. Chitin is a polymer contained in the shells of shrimp and other crustaceans, as well as insect exoskeletons. It’s biodegradable and generally safe for animals to eat.

By contrast, traditional styrofoam is made using heavy chemicals, degrades slowly, and proves harmful when it crumbles and accumulates in our oceans, adding to micro-plastics pollution.

According to wildlife conservation researchers at Fauna & Flora International, when marine life ingests styrofoam it can “cause a range of problems such as digestive obstructions, a false sense of fullness that can lead to starvation, and reduced fertility.” Besides that, styrofoam products are usually treated with flame retardants and can absorb other pollutants from water around them, increasing the threat to any wildlife that eats or lives amid the discarded styrofoam.

Cruz Foam CEO and cofounder John Felts says that he and CTO Marco Rolandi bonded during their graduate studies in materials science over a love of the ocean, surfing and a wish to enjoy nature without causing any harm to it.

Cruz Foam CTO Marco Rolandi and CEO John Felts

Cruz Foam

They based their startup in Santa Cruz, California — a city known for its gorgeous beaches, boardwalk, surf culture and elephant seals, and used the name of the city for their startup.

For about two years, they focused their efforts in the lab on developing a kind of foam from chitin that could serve as the core of a molded surfboard. Chitin was already known as a promising bioplastic, but it was typically used to create bioplastic films and not so much puffy foams, Felts recalls.

As they tinkered and tested, they realized they could make a broader impact on ocean health if they addressed a larger market than surfboards. They shifted their attention to packaging.

Since then, Cruz Foam has developed a foam pellet from natural materials which can be extruded and shaped into a wide range of packaging materials and containers on the same machinery that’s in place in factories making traditional styrofoam products today.

On Wednesday, Cruz Foam formally introduced its new line of shipping products including:

A foam and paper wrap that can replace bubble wrap or styrofoam peanuts
A foam-padded mailer
Foam coolers that can protect and keep fresh and frozen items cold
Foam products that protect large items like furniture.

All of its new packaging products are “curbside recyclable,” and compostable, said Felts.

Cruz Foam developed a styrofoam alternative that won’t harm marine life or add to plastic pollution in the ocean.

Cruz Foam

The foam dissolves in a tub of water and can be poured over a lawn or garden to safely add some nitrogen back into the soil, Felts said. And it’s safe if your dog, or your fish, eats any of the foam.

To finance its growth so far, Cruz Foam got $2 million in grants from the National Science Foundation to develop materials and manufacturing processes. The startup has also raised just over $25 million in venture funding from climate tech and science-focused investors including At One Ventures, Ashton Kutcher and his climate fund Sound Waves, Helena Group, Regeneration VC and others.

At One founding partner Tom Chi said that his firm wanted to back companies making a difference to ocean health. They looked into “closed loop plastic recycling,” where companies take back the packaging that they make and recycle it, but the unit economics there don’t work because of the high cost of “reverse logistics and post-consumer material processing.”

Cruz Foam’s approach, Chi said, “solves the problem by using earth-compatible materials in the first place, but does so in a way that can be directly cost-competitive with virgin foam production.”

The startup has just kicked off a partnership with North Carolina-based Atlantic Packaging to bring its sustainable foam products to a wide range of grocers and retailers. And Cruz Foam expects to move into its first phase of high-volume production by mid-year 2023, Felts told CNBC.

When it comes to new products, Felts acknowledged there’s a huge amount of demand out there for disposable insulating coffee cups and takeout containers. But the focus for his company this year will remain on e-commerce, shipping and protecting everything from car parts and medical supplies to meal kits.

The pandemic has juiced e-commerce and shipping demand, Felts said, but many businesses are just now figuring out how to ship items they make or sell directly to homes, rather than to grocers or retailers, and that includes rethinking their packaging end to end.

Technology

Silicon Valley’s early return on Trump investment: Plunging valuations, delayed IPOs

Published

6 hours ago

April 5, 2025

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Silicon Valley's early return on Trump investment: Plunging valuations, delayed IPOs

The Nasdaq MarketSite in New York, June 9, 2023.

Michael Nagle | Bloomberg | Getty Images

Silicon Valley executives and financiers publicly opened their wallets in support of President Donald Trump’s 2024 presidential run. The early returns in 2025 aren’t great, to say the least.

Following Trump’s sweeping tariff plan announced Wednesday, the Nasdaq suffered steep consecutive daily drops to finish 10% lower for the week, the index’s worst performance since the beginning of the Covid pandemic in 2020.

The tech industry’s leading CEO’s rushed to contribute to Trump’s inauguration in January and paraded to Washington, D.C., for the event. Since then, it’s been a slog.

The market can always turn around, but economists and investors aren’t optimistic, and concerns are building of a potential recession. The seven most valuable U.S. tech companies lost a combined $1.8 trillion in market cap in two days.

Apple slid 14% for the week, its biggest drop in more than five years. Tesla, led by top Trump adviser Elon Musk, plunged 9.2% and is now down more than 40% for the year. Musk contributed close to $300 million to help propel Trump back to the White House.

Nvidia, Meta and Amazon all suffered double-digit drops for the week. For Amazon, a ninth straight weekly decline marks its longest such losing streak since 2008.

With Wall Street selling out of risky assets on concern that widespread tariff hikes will punish the U.S. and global economy, the fallout has drifted down to the IPO market. Online lender Klarna and ticketing marketplace StubHub delayed their IPOs due to market turbulence, just weeks after filing with the Securities and Exchange Commission, and fintech company Chime is also reportedly delaying its listing.

CoreWeave, a provider of artificial intelligence infrastructure, last week became the first venture-backed company to raise more than $1 billion in a U.S. IPO since 2021. But the company slashed its offering, and trading has been very volatile in its opening days on the market. The stock plunged 12% on Friday, leaving it 17% above its offer price but below the bottom of its initial range.

“You couldn’t create a worse market and macro environment to go public,” said Phil Haslett, co-founder of EquityZen, a platform for investing in private companies. “Way too much turbulence. All flights are grounded until further notice.”

CoreWeave investor Mark Klein of SuRo Capital previously told CNBC that the company could be the first in an “IPO parade.” Now he’s backtracking.

“It appears that the IPO parade has been temporarily halted,” Klein told CNBC by email on Friday. “The current tariff situation has prompted these companies to pause and assess its impact.”

Tech will see an 'economic armageddon' if these tariffs stay, says Wedbush's Dan Ives

‘Cave rapidly’

During last year’s presidential campaign, prominent venture capitalists like Marc Andreessen backed Trump, expecting that his administration would usher in a boom and eliminate some of the hurdles to startup growth set up by the Biden administration. Andreessen and his partner, Ben Horowitz, said in July that their financial support of the Trump campaign was due to what they called a better “little tech agenda.”

A spokesperson for Andreessen Horowitz declined to comment.

Some techies who supported Trump in the campaign have taken to social media to defend their positions.

Venture capitalist Keith Rabois, a managing director at Khosla Ventures, posted on X on Thursday that “Trump Derangement Syndrome has morphed into Tariff Derangement Syndrome.” He said tariffs aren’t inflationary, are effective at reducing fentanyl imports, and he expects that “most other countries will cave and cave rapidly.”

That was before China’s Finance Ministry said on Friday that it will impose a 34% tariff on all goods imported from the U.S. starting on April 10.

At Sequoia Capital, which is the biggest investor in Klarna, outspoken Trump supporter Shaun Maguire, wrote on X, “The first long-term thinking President of my lifetime,” and said in a separate post that, “The price of stocks says almost nothing about the long term health of an economy.”

However, Allianz Chief Economic Advisor Mohamed El-Erian warned on Friday that Trump’s extensive raft of import tariffs are putting the U.S. economy at risk of recession.

“You’ve had a major repricing of growth prospects, with a recession in the U.S. going up to 50% probability, you’ve seen an increase in inflation expectations, up to 3.5%,” he told CNBC’s Silvia Amaro on the sidelines of the Ambrosetti Forum in Cernobbio, Italy.

Former Microsoft CEOs Bill Gates, left, and Steve Ballmer, center, pose for photos with CEO Satya Nadella during an event celebrating the 50th Anniversary of Microsoft on April 4, 2025 in Redmond, Washington.

Stephen Brashear | Getty Images

Meanwhile, executives at tech’s megacap companies were largely silent this week, and their public relations representatives declined to provide comments about their thinking.

Microsoft CEO Satya Nadella was in the awkward position on Friday of celebrating his company’s 50th anniversary at corporate headquarters in Redmond, Washington. Alongside Microsoft’s prior two CEOs, Bill Gates and Steve Ballmer, Nadella sat down with CNBC’s Andrew Ross Sorkin for a televised interview that was planned well before Trump’s tariff announcement.

When asked about the tariffs at the top of the interview, Nadella effectively dodged the question and avoided expressing his views about whether the new policies will hamper Microsoft’s business.

Ballmer, who was succeeded by Nadella in 2014, acknowledged to Sorkin that “disruption is very hard on people” and that, “as a Microsoft shareholder, this kind of thing is not good.” Ballmer and Gates are two of the 12 wealthiest people in the world thanks to their Microsoft fortunes.

C-suites may not be able to stay quiet for long, especially if the recent turmoil spills into next week.

Lise Buyer, who previously helped guide Google through its IPO and now works as an adviser to companies going public, said there’s no appetite for risk in the market under these conditions. But there is risk that staffers get jittery, and they’ll surely look to their leaders for some reassurance.

“Until markets settle out and we have the opportunity to access valuation levels, public company CEOs should work to calm potentially distressed employees,” Buyer said in an email. “And private company managements should refine plans to get by on dollars already in the treasury.”

— CNBC’s Hayden Field, Jordan Novet, Leslie Picker, Annie Palmer and Samantha Subin contributed to this report.

WATCH: Chime is reportedly delaying its IPO

Technology

Tesla’s June robotaxi deadline looms as political backlash builds over Elon Musk

Published

7 hours ago

April 5, 2025

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Tesla's June robotaxi deadline looms as political backlash builds over Elon Musk

Elon Musk has been promising investors for about a decade that Tesla’s cars are on the verge of turning into robotaxis, capable of driving themselves cross-country, after one big software update.

That hasn’t happened yet.

What Tesla offers is a sophisticated, but only partially automated, driving system that’s marketed in the U.S. as its Full Self-Driving (Supervised) option, though many Tesla fans refer to it as FSD. In China, Tesla recently changed the system’s name to “intelligent assisted driving.”

Full Self-Driving, as it was previously called, relies on cameras and software to enable features like automatic navigation on highways and city streets, or automatic braking and slowing in response to traffic lights and stop signs.

Tesla owner’s manuals warn users that FSD “is a hands-on feature” that requires them to pay attention to the road at all times. “Keep your hands on the steering wheel at all times, be mindful of road conditions and surrounding traffic,” the manuals say.

But many of Tesla’s customers ignore the fine print and use the system hands-free anyway.

Tesla’s partially automated driving systems have been a source of inspiration for its stalwart fans. But they’ve also caused controversy and concern for public safety after reports of injurious and fatal collisions where Tesla’s standard Autopilot or premium FSD systems were known to be in use.

FSD does a lot of things “amazingly well,” said Guy Mangiamele, a professional test driver for automotive consulting firm AMCI Testing, during a recent long drive in Los Angeles. But he added that “the times that it trips up, you could kill somebody or you could hurt yourself.”

The pressure has never been higher on Tesla to elevate the technology and deliver on Musk’s long-delayed promises.

The Tesla CEO is the wealthiest person in the world and was the biggest financial backer of President Donald Trump’s 2024 campaign. Since Trump’s January inauguration, Musk has been leading the administration’s Department of Government Efficiency effort to drastically slash the federal workforce and government spending.

The DOGE team has been connected to more than 280,000 layoff plans for federal workers and contractors impacting 27 agencies over the last two months, according to data tracked by Challenger Gray, the executive outplacement firm.

Musk’s work with DOGE – along with his frequently incendiary political rhetoric and endorsement of Germany’s far-right, anti-immigrant party AfD – has led to a tremendous backlash against Tesla.

Protests, boycotts and even criminal acts of vandalism have targeted the electric vehicle maker in recent months and led many prospective Tesla customers to turn to other brands. Meanwhile, existing Tesla owners have been trading in their EVs at record levels, according to data from Edmunds.

Tesla’s stock dropped 36% through the first three months of 2025, representing its steepest decline since 2022 and third-biggest slide for any quarter since the EV maker went public in June 2010. Tesla also reported 336,681 vehicle deliveries in the first quarter of 2025, a 13% decline from the same period a year ago.

Product unveilings and a “robotaxi launch” expected from Tesla in Austin, Texas, this year could revitalize investors’ sentiment about the company and hopefully lift its share price, Piper Sandler analysts wrote in a note following the worse-than-expected deliveries report.

On Tesla’s last earnings call, Musk promised investors that Tesla will finally start its driverless ride-hailing service in Austin in June.

To see whether the company’s FSD technology is anywhere close to a robotaxi-ready release, CNBC spent months riding along with Tesla owners who use Full Self-Driving (Supervised) and speaking with automotive safety experts about their impressions.

Auto-tech enthusiast and Tesla owner Chris Lee, host of the YouTube channel EverydayChris, told CNBC that Tesla’s system “definitely has a ways to go, but the fact that it’s able to go from where it was three years ago to today, is insane.”

Many experts, including Telemetry Vice President of Market Research Sam Abuelsamid, remain skeptical. There’s been “no evidence” that FSD is “anywhere close to being ready to be used in an unsupervised form” by June, said Abuelsamid, whose firms specializes in automotive intelligence.

Tesla FSD will “often work really well, particularly in daytime conditions” but then “randomly, in a scenario where it did fine previously, it will fail,” said Abuelsamid, adding that those scenarios can be unpredictable and dangerous.

Watch the video to learn more about the evolution of Tesla’s Full Self-Driving (Supervised) and whether it will be robotaxi-ready this June.

Technology

Microsoft AI chief Suleyman sees advantage in building models ‘3 or 6 months behind’

Published

20 hours ago

April 5, 2025

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Microsoft AI chief Suleyman sees advantage in building models ‘3 or 6 months behind’

Microsoft owns lots of Nvidia graphics processing units, but it isn’t using them to develop state-of-the-art artificial intelligence models.

There are good reasons for that position, Mustafa Suleyman, the company’s CEO of AI, told CNBC’s Steve Kovach in an interview on Friday. Waiting to build models that are “three or six months behind” offers several advantages, including lower costs and the ability to concentrate on specific use cases, Suleyman said.

It’s “cheaper to give a specific answer once you’ve waited for the first three or six months for the frontier to go first. We call that off-frontier,” he said. “That’s actually our strategy, is to really play a very tight second, given the capital-intensiveness of these models.”

Suleyman made a name for himself as a co-founder of DeepMind, the AI lab that Google bought in 2014, reportedly for $400 million to $650 million. Suleyman arrived at Microsoft last year alongside other employees of the startup Inflection, where he had been CEO.

More than ever, Microsoft counts on relationships with other companies to grow.

It gets AI models from San Francisco startup OpenAI and supplemental computing power from newly public CoreWeave in New Jersey. Microsoft has repeatedly enriched Bing, Windows and other products with OpenAI’s latest systems for writing human-like language and generating images.

Microsoft’s Copilot will gain “memory” to retain key facts about people who repeatedly use the assistant, Suleyman said Friday at an event in Microsoft’s Redmond, Washington, headquarters to commemorate the company’s 50th birthday. That feature came first to OpenAI’s ChatGPT, which has 500 million weekly users.

Through ChatGPT, people can access top-flight large language models such as the o1 reasoning model that takes time before spitting out an answer. OpenAI introduced that capability in September — only weeks later did Microsoft bring a similar capability called Think Deeper to Copilot.

Microsoft occasionally releases open-source small-language models that can run on PCs. They don’t require powerful server GPUs, making them different from OpenAI’s o1.

OpenAI and Microsoft have held a tight relationship shortly after the startup launched its ChatGPT chatbot in late 2022, effectively kicking off the generative AI race. In total, Microsoft has invested $13.75 billion in the startup, but more recently, fissures in the relationship between the two companies have begun to show.

Microsoft added OpenAI to its list of competitors in July 2024, and OpenAI in January announced that it was working with rival cloud provider Oracle on the $500 billion Stargate project. That came after years of OpenAI exclusively relying on Microsoft’s Azure cloud. Despite OpenAI partnering with Oracle, Microsoft in a blog post announced that the startup had “recently made a new, large Azure commitment.”

“Look, it’s absolutely mission-critical that long-term, we are able to do AI self-sufficiently at Microsoft,” Suleyman said. “At the same time, I think about these things over five and 10 year periods. You know, until 2030 at least, we are deeply partnered with OpenAI, who have [had an] enormously successful relationship for us.

Microsoft is focused on building its own AI internally, but the company is not pushing itself to build the most cutting-edge models, Suleyman said.

“We have an incredibly strong AI team, huge amounts of compute, and it’s very important to us that, you know, maybe we don’t develop the absolute frontier, the best model in the world first,” he said. “That’s very, very expensive to do and unnecessary to cause that duplication.”

WATCH: Microsoft Copilot beginning of a seismic shift in AI integration, says Microsoft AI CEO Suleyman