Employees stand outside of the shuttered Silicon Valley Bank (SVB) headquarters on March 10, 2023 in Santa Clara, California.
Justin Sullivan | Getty Images
The sudden collapse of Silicon Valley Bank has thousands of tech startups wondering what happens now to their millions of dollars in deposits, money market investments and outstanding loans.
Most importantly, they’re trying to figure how to pay their employees.
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“The number one question is, ‘How do you make payroll in the next couple days,'” said Ryan Gilbert, founder of venture firm Launchpad Capital. “No one has the answer.”
SVB, a 40-year-old bank that’s known for handling deposits and loans for thousands of tech startups in Silicon Valley and beyond, fell apart this week and was shut down by regulators in the largest bank failure since the financial crisis. The demise began late Wednesday, when SVB said it was selling $21 billion of securities at a loss and trying to raise money. It turned into an all-out panic by late Thursday, with the stock down 60% and tech executives racing to pull their funds.
While bank failures aren’t entirely uncommon, SVB is a unique beast. It was the 16th biggest bank by assets at the end of 2022, according to the Federal Reserve, with $209 billion in assets and over $175 billion in deposits.
However, unlike a typical brick-and-mortar bank — Chase, Bank of America or Wells Fargo — SVB is designed to serve businesses, with over half its loans to venture funds and private equity firms and 9% to early and growth-stage companies. Clients that turn to SVB for loans also tend to store their deposits with the bank.
The Federal Deposit Insurance Corporation, which became the receiver of SVB, insures $250,000 of deposits per client. Because SVB serves mostly businesses, those limits don’t mean much. As of December, roughly 95% of SVB’s deposits were uninsured, according to filings with the SEC.
The FDIC said in a press release that insured depositors will have access to their money by Monday morning.
But the process is much more convoluted for uninsured depositors. They’ll receive a dividend within a week covering an undetermined amount of their money and a “receivership certificate for the remaining amount of their uninsured funds.”
“As the FDIC sells the assets of Silicon Valley Bank, future dividend payments may be made to uninsured depositors,” the regulator said. Typically, the FDIC would put the assets and liabilities in the hands of another bank, but in this case it created a separate institution, the Deposit Insurance National Bank of Santa Clara (DINB), to take care of insured deposits.
Clients with uninsured funds — anything over $250,000 — don’t know what to do. Gilbert said he’s advising portfolio companies individually, instead of sending out a mass email, because every situation is different. He said the universal concern is meeting payroll for March 15.
Gilbert is also a limited partner in over 50 venture funds. On Thursday, he received several messages from firms regarding capital calls, or the money that investors in the funds send in as transactions take place.
“I got emails saying saying don’t send money to SVB, and if you have let us know,” Gilbert said.
The concerns regarding payroll are more complex than just getting access to frozen funds, because many of those services are handled by third parties that were working with SVB.
Rippling, a back office-focused startup, handles payroll services for many tech companies. On Friday morning, the company sent a note to clients telling them that, because of the SVB news, it was moving “key elements of our payments infrastructure” to JPMorgan Chase.
“You need to inform your bank immediately about an important change to the way Rippling debits your account,” the memo said. “If you do not make this update, your payments, including payroll, will fail.”
Rippling CEO Parker Conrad said in a series of tweets on Friday that some payments are getting delayed amid the FDIC process.
“Our top priority is to get our customers’ employees paid as soon as we possibly can, and we’re working diligently toward that on all available channels, and trying to learn what the FDIC takeover means for today’s payments,” Conrad wrote.
One founder, who asked to remain anonymous, told CNBC that everyone is scrambling. He said he’s spoken with more than 30 other founders, and talked to a finance chief from a billion-dollar startup who has tried to move more than $45 million out of SVB to no avail. Another company with 250 employees told him that SVB has “all our cash.”
A SVB spokesperson pointed CNBC back to the FDIC’s statement when asked for comment.
‘Significant contagion risk’
For the FDIC, the immediate goal is to quell fears of systemic risk to the banking system, said Mark Wiliams, who teaches finance at Boston University. Williams is quite familiar with the topic as well as the history of SVB. He used to work as a bank regulator in San Francisco.
Williams said the FDIC has always tried to work swiftly and to make depositors whole, even if when the money is uninsured. And according to SVB’s audited financials, the bank has the cash available — its assets are greater than its liabilities — so there’s no apparent reason why clients shouldn’t be able to retrieve the bulk of their funds, he said.
“Bank regulators understand not moving quickly to make SVB’s uninsured depositors whole would unleash significant contagion risk to the broader banking system,” Williams said.
Treasury Secretary Janet Yellen on Friday met with leaders from the Federal Reserve, the FDIC, and the Office of the Comptroller of the Currency regarding the SVB meltdown. The Treasury Department said in a readout that Yellen “expressed full confidence in banking regulators to take appropriate actions in response and noted that the banking system remains resilient and regulators have effective tools to address this type of event.”
On the ground in Silicon Valley, the process has been far from smooth. Some execs told CNBC that, by sending in their wire transfer early on Thursday, they were able to successfully move their money. Others who took action later in the day are still waiting — in some cases, for millions of dollars — and are uncertain if they’ll be able to meet their near-term obligations.
Regardless of if and how quickly they’re able to get back up and running, companies are going to change how they think about their banking partners, said Matt Brezina, a partner at Ford Street Ventures and investor in startup bank Mercury.
Brezina said that after payroll, the biggest issue his companies face is accessing their debt facilities, particularly for those in financial technology and labor marketplaces.
“Companies are going to end up diversifying their bank accounts much more coming out of this,” Brezina said. “This is causing a lot of pain and headaches for lots of founders right now. And it’s going to hit their employees and customers too.”
SVB’s rapid failure could also serve as a wakeup call to regulators when it comes to dealing with banks that are heavily concentrated in a particular industry, Williams said. He said that SVB has always been overexposed to tech even though it managed to survive the dot-com crash and financial crisis.
In its mid-quarter update, which began the downward spiral on Wednesday, SVB said it was selling securities at a loss and raising capital because startup clients were continuing to burn cash at a rapid clip despite the ongoing slump in fundraising. That meant SVB was struggling to maintain the necessary level of deposits.
Rather than sticking with SVB, startups saw the news as troublesome and decided to rush for the exits, a swarm that gained strength as VCs instructed portfolio companies to get their money out. Williams said SVB’s risk profile was always a concern.
“It’s a concentrated bet on an industry that it’s going to do well,” Williams said. “The liquidity event would not have occurred if they weren’t so concentrated in their deposit base.”
SVB was started in 1983 and, according to its written history, was conceived by co-founders Bill Biggerstaff and Robert Medearis over a poker game. Williams said that story is now more appropriate than ever.
“It started as the result of a poker game,” Williams said. “And that’s kind of how it ended.”
— CNBC’s Lora Kolodny, Ashley Capoot and Rohan Goswami contributed to this report.
SpaceX CEO Elon Musk attends a cabinet meeting held by U.S. President Donald Trump at the White House on March 24, 2025.
Win McNamee | Getty Images
Tesla shares fell almost 6% on Monday, a day ahead of the electric vehicle company’s first-quarter earnings report, as analysts fret over “ongoing brand erosion.”
The stock closed at $227.50 leaving it less than $6 above its low for the year on April 8. The shares are now down 44% for the year after wrapping up their worst quarter since 2022 in March. It’s the 12th time this year the stock has dropped by at least 5% in a single session.
CEO Elon Musk’s many distractions outside of Tesla, especially his role within the Trump administration, are in focus, along with the company’s progress on a long-delayed robotaxi and self-driving technology for its existing cars.
In the online forum that Tesla uses to solicit investor inquiries in advance of its earnings calls, more than 300 questions were submitted pertaining to Tesla’s self-driving systems, around 200 came in about the company’s Optimus humanoid robots in development, and more than 160 questions poured in about Musk individually. One investor asked, “What steps has the board of directors taken to mitigate the brand damage caused by Elon’s political activities?”
After spending $290 million to help return Trump to the White House, Musk is now leading an initiative to slash tens of thousands of federal jobs, sell off or end leases for federal office buildings, and reduce U.S. government capacity.
Musk’s politics and antics have elicited a massive backlash in Europe and parts of the U.S. This year, the company has been hit with waves of protests, boycotts and some criminal activity that targeted Tesla vehicles and facilities in response to Musk.
Earlier this month, Tesla reported 336,681 vehicle deliveries in the first quarter, a 13% decline from the same period a year earlier.
The company is expected to report revenue of $21.24 billion for the first quarter, according to LSEG, which would mark a slight drop from the same period last year. Analysts expect earnings per share of 40 cents. Investors will be paying particularly close attention to any commentary about Trump’s widespread tariffs and the potential impact on revenue and earnings as the year progresses.
Oppenheimer analysts wrote in a note out Monday that “ongoing brand erosion” for Tesla in the U.S. and Europe is weighing on sales already, but a “bigger issue for the company is potential weakness in China demand and margin impact due to the Trump tariffs.”
They wrote that competition in China, coupled with “nationalistic” consumer trends there, could “drive sales toward domestic brands.” Tesla would then have to export more of its China-made cars, which could lead to “downward pressure on pricing,” the Oppenheimer analysts said.
Caliber, a research firm that tracks how U.S. consumer sentiment is shifting around major brands, found that only 27% of its survey respondents in March would consider purchasing a Tesla, compared to 46% in January 2022.
Wedbush Securities analyst Dan Ives, a longtime Tesla bull, is hoping for a “turnaround vision” from Musk on Tuesday’s earnings call.
“Tesla has now unfortunately become a political symbol globally of the Trump Administration/DOGE,” he wrote, noting that “Tesla’s stock has been crushed since Trump stepped back into the White House.”
Ives estimated 15% to 20% “permanent demand destruction for future Tesla buyers due to the brand damage Musk has created” by working for Trump.
Late last week, Barclays maintained the equivalent of a sell rating and slashed its price target on Tesla to $275 from $325, citing a “confusing set-up” on the first-quarter with “weak fundamentals.” The firm said it could see a positive reaction if Musk is more focused on his automaker, and depending on what the company discloses about an anticipated “FSD event,” referring to Tesla’s Full Self-Driving offering.
Tesla said in announcing its reporting date that, in addition to earnings, it will provide a “live company update,” language the company hasn’t typically used in disclosures.
CEO of Alphabet and Google Sundar Pichai meets Polish Prime Minister at the Chancellery in Warsaw, Poland on March 29, 2022.
Mateusz Wlodarczyk | Nurphoto | Getty Images
As Google heads back to the courtroom Monday, the company is arguing that the U.S. needs the company in its full form to take on chief adversary China and uphold national security in the process.
The remedies trial in Washington, D.C., follows a judge’s ruling in August that Google has held a monopoly in its core market of internet search, the most-significant antitrust ruling in the tech industry since the case against Microsoftmore than 20 years ago.
The Justice Department has called for Google to divest its Chrome browser unit and open its search data to rivals. Google said in a blog post on Monday that such a move is not in the best interest of the country as the global battle for supremacy in artificial intelligence rapidly intensifies. In the first paragraph of the post, Google named China’s DeepSeek as an emerging AI competitor.
The DOJ’s proposal would “hamstring how we develop AI, and have a government-appointed committee regulate the design and development of our products,” Lee-Anne Mulholland, Google’s vice president of regulatory affairs, wrote in the post. “That would hold back American innovation at a critical juncture. We’re in a fiercely competitive global race with China for the next generation of technology leadership, and Google is at the forefront of American companies making scientific and technological breakthroughs.”
Google is one of a number of U.S. tech companies trying to fend off the Trump administration’s antirust pursuits, most of which is held over from the Biden administration. Google lost a separate antitrust case last week, when a federal judge ruled Thursday that Google held illegal monopolies in online advertising markets due to its position between ad buyers and sellers.
Meta is currently in court against the Federal Trade Commission, which has alleged that the company monopolizes the social networking market and shouldn’t have been able to acquire Instagram and WhatsApp. Amazon also faces an FTC lawsuit for allegedly maintaining an illegal monopoly. And beyond antitrust, Trump’s FTC on Monday sued Uber, accusing the ride-hailing company of deceptive billing and cancellation practices tied to its subscription service.
It’s the type of enforcement actions the tech industry was hoping to avoid when President Trump took office in January. Google, Meta, Amazon and Uber — and top executives from some — publicly donated to Trump’s inaugural fund, part of a widespread corporate effort to cozy up to the incoming administration.
For Google, the search remedies trial will determine the consequences of the guilty verdict from August. The three-week trial will end on May 9. Judge Amit Mehta is expected to make his ruling in August, at which point Google plans to file an appeal.
“At trial we will show how DOJ’s unprecedented proposals go miles beyond the Court’s decision, and would hurt America’s consumers, economy, and technological leadership,” Mulholland wrote.
Google plans to argue that Chrome provides freedom. The browser helps people access the web, and its open source code is used by other companies. One of the DOJ’s proposals is that Google open its search data, such as search queries, clicks and results to other companies.
That would “introduce not just cybersecurity and even national security risks, but also increase the cost of your devices,” Google said.
A central part of Google”s challenge is to strike a balance between being seen as essential to American innovation, but not so essential that other companies can’t compete, particularly when it comes to AI.
Google will likely tout how it’s fueled AI innovation for years and will point to the “Transformers” research paper, which provided technical architecture used in AI chatbots like OpenAI’s ChatGPT, Perplexity and Anthropic.
The DOJ has said that in search, “Google’s agreements continue to insulate Google’s monopoly.” The department plans to bring testimony from Nick Turley, ChatGPT’s head of product, and Perplexity Chief Business Officer Dmitry Shevelenko.
In a blog post on Monday, Perplexity said that “the remedy isn’t breakup,” but rather that consumers should have more choice. The company said phone makers should be able to offer their customers an assortment of search options “without fearing financial penalties or access restrictions.”
“Consumers deserve the best products, not just the ones that pay the most for placement,” Perplexity wrote. “This is the only remedy that ensures consumer choice can determine the winners.”
Amazon CEO Andy Jassy speaks at a company event in New York on Feb. 26, 2025.
Michael Nagle | Bloomberg | Getty Images
Amazon has delayed some commitments around new data center leases, Wells Fargo analysts said Monday, the latest sign that economic concerns may be affecting tech companies’ spending plans.
A week ago, a Microsoft executive said the software company was slowing down or temporarily holding off on advancing early build-outs. Amazon Web Services and Microsoft are the leading providers of cloud infrastructure, and both have ramped up their capital expenditures in recent quarters to meet the demands of the generative artificial intelligence boom.
“Over the weekend, we heard from several industry sources that AWS has paused a portion of its leasing discussions on the colocation side (particularly international ones),” Wells Fargo analysts wrote in a note. They added that “the positioning is similar to what we’ve heard recently from MSFT,” in that both companies are reeling in some new projects but not canceling signed deals.
Tech stocks have been under pressure across the board his year as President Donald Trump’s proposals for widespread tariffs raised the prospect for dramatically higher costs on imports of equipment while also threatening to slow the economy. Cloud infrastructure providers have been aggressively announcing plans to collectively spend hundreds of billions of dollars securing Nvidia’s graphics processing units, or GPUs, and building new data centers.
That was before the announcement on tariffs earlier this month. Microsoft and Amazon both report quarterly results next week. Their stock prices were down on Monday, bringing Amazon’s decline for the year to 25% and Microsoft’s drop to 15%.
An AWS spokesperson did not immediately provide a comment. Earlier this month, Amazon CEO Andy Jassy told CNBC’s Andrew Ross Sorkin that he did not see the company cutting down on data center construction.