Silicon Valley investors and founders express shock, describe struggles to get money out of SVB
Nikolas Kokovlis | Nurphoto | Getty Images
Venture capitalists and technology executives are scrambling to make sense and account for the potential repercussions of the sudden implosion of Silicon Valley Bank on Friday.
The Federal Deposit Insurance Corp. said Friday that U.S. federal regulators shut down Silicon Valley Bank, the premiere financial institution for Silicon Valley tech startups for the past 40 years. The collapse of SVB represents the biggest banking failure since the 2008 global economic crises.
Numerous venture investors and technology executives expressed shock to CNBC, some comparing SVB’s current debacle to the Lehman Brothers, which filed for bankruptcy in 2008. Many of the investors and execs requested anonymity discussing matters that might affect their firms and employees.
General sentiment is that SVB did a poor job communicating to clients when it announced earlier this week that it would be raising $500 million from venture firm General Atlantic while also unloading holdings worth roughly $21 billion at a loss of $1.8 billion. One VC said the fact for SVB to announce that it’s raising money while at the same time essentially saying that everything is “fine,” seemed to trigger people’s memories of Lehman Brothers, who they remember acted similarly at the time.
“So unfortunately, they repeated mistakes in history and anyone who lived through that period said, ‘Hey, maybe they’re not fine; we were told that last time,'” the VC said.
SVB attempted to quell any fears that it was financially unsound as late as Thursday evening.
In one email that SVB sent to a customer, a copy of which CNBC obtained, the bank characterized the rumors about its problems as “buzz about SVB in the markets” and attempted to reassure the customer that it “launched a series of strategic actions to strengthen our financial position, enhance profitability and improve financial flexibility now and in the future.”
“It is business as usual at SVB,” the bank said in the email to startups. It added toward the end of the email, “Moreover, we have a 40 year history navigating bear and bull markets and have developed leading risk mitigation capabilities to ensure our long term financial health.”
Another venture capitalist said that a representative from Silicon Valley Bank called their firm on Thursday to assuage their fears, but that the firm’s CFO “didn’t feel that it was reassuring, to say the least.”
However, one tech CEO was sympathetic to the bank’s plight, asking, “What message would ever reassure you that your money is safe when other people are telling you that there’s a fraud happening? There’s no message because it’s not a messaging thing. It’s the prisoner’s dilemma thing is everybody at that moment now has to try and imagine what everybody else is going to do.”
When asked for comment, a representative from SVB referred CNBC back to the FDIC announcement. “The FDIC will share additional information when it is available.”
‘A Twitter-led bank run’
Several venture capitalists quickly told their portfolio companies to move money out of Silicon Valley Bank to other banks, including Merrill Lynch, First Republic, and JP Morgan, so they could pay their employees on time next week.
One AI startup executive noted that the company’s chief financial officer was quick to handle the situation, and it had enough money to pay employees on time. Still, the collapse of SVB left a poor taste in the executive’s mouth, who said that the bank’s collapse feels like “unnecessary hysteria.”
“It makes me disappointed in our ecosystem,” the startup CEO said.
Many venture capitalists echoed the startup CEO’s sentiment that the SVB collapse felt like a self-fulfilling prophecy created by unnecessary panic. Some likened it to a “Twitter-led bank run,” as the tech community took to social media to spread information, and, often, panic. One prominent technology CEO told CNBC that numerous startup founders were using Twitter and Meta’s communication service WhatsApp to send each other rapid-fire updates.
One venture capitalist said it was as if someone screamed “fire in a crowded theater where there is no fire.”
“And then when everyone rushes to the door, they knock over the oil lamp and there is a fire and it burns down the building,” the venture capitalist said. “And then that same person standing outside being like, ‘see I told you so.'”
‘Everyone is scrambling’
As the panic spread and the FDIC stepped in, companies with funds locked up were reporting problems getting cash out and making payroll.
One startup founder told CNBC that “everyone is scrambling.” He said he has talked to more than 30 other founders, and that both big and small companies are being impacted.
The founder added that a CFO from a unicorn startup has tried to move more than $45 million out of SVB to no avail. Another company with 250 employees told the founder that SVB has “all our cash.”
Another founder said her company’s payroll provider moved from SVB to another bank on Thursday, which meant payroll did not run for employees as planned Friday morning. She said she has been over-communicating with employees to alleviate their concerns as much as possible, and she is expecting payroll to hit by the end of the day Friday.
In the case that it doesn’t, the company is planning to wire employees who need immediate spot coverage the funds directly, according to an internal memo viewed by CNBC.
“A lot of people live down to the dollar in terms of budgeting, and they cannot afford 24 hour delay in their payroll,” the founder said.
Jean Yang, the founder and CEO of monitoring company Akita, attempted to perform a wire transfer to ensure she could make payroll for her seven-person team, then drove to the SVB location on Sand Hill Road in Menlo Park, a street populated by venture-capital offices.
There, she asked a teller for a bank transfer and was told the branch couldn’t do it. So she asked for a cashier’s check for $1 million. After 20 or 25 minutes the bank handed it over.
Others in line were taking out their entire balance. “I regret not taking out our entire balance now,” she said.
On Frida, Yang returned to the Silicon Valley Bank branch 15 minutes before it opened to remove the remaining money. A line of about 40 people had formed. Gossip spread among those waiting. One person showed a tweet on their phone suggesting that bank employees had been instructed not to come to work.
Then an employee came out of the office and offered about 15 copies of an article from the Federal Deposit Insurance Corporation on the agency’s response to the bank’s situation. The line disbanded as people realized the bank’s fate.
Later on Friday one of the startup’s investors called Yang and offered to help Akita make payroll, she said.”My hope is that the government bails out people past $250,000,” she said. “I know people with tens of millions, hundreds of millions with SVB. I think if they only get $250,000, their companies are going to be wiped out.”
“Now, everyone’s waiting to see when the Treasury will step in,” said another venture investor. “Hopefully [California Governor] Gavin Newsom is calling Biden right now and saying, ‘This is systemic in our area, but you can see the ripple effects on other banks and their equities and their bonds.’ If it’s systemic, I think the Treasury will step in like 2007 and ’08 and protect the money market accounts, plus will protect the depositor.”
This person added, “If they don’t step in, then people will presume that money’s lost. That’s going to have huge ramifications on the business environment.”
Visitors attend UGM 2025.
Courtesy of Epic
Space travelers, robots and, of course, artificial intelligence.
They were all on display on Tuesday at Epic Systems‘ annual Users Group Meeting, held at the health software giant’s 1,670-acre campus in Verona, Wisconsin.
Judy Faulkner, Epic’s 82-year-old CEO, dressed for the occasion in a purple wig with neon green shoes and an iridescent vest, reminiscent of the fictional character Buzz Lightyear from the “Toy Story” franchise.
At the science fiction-themed event, Faulkner told the crowd that Epic has roughly 200 different AI features in development that aim to assist patients, clinicians and insurers.
“We are combining the intelligence and curiosity of the human being with the investigative capabilities of gen AI,” Faulkner said, in front of thousands of health-care executives packed into an 11,400-seat underground auditorium.
Epic, one of the largest private technology companies in the country, is best known for its electronic health record, or EHR, software. An EHR is a digital version of a patient’s medical history that’s updated by doctors and nurses, and the technology is integral to the modern U.S. health-care system.
Epic’s software, which competes with Oracle Health (formerly Cerner), is used by 280 million Americans, according to the company. Many patients know of Epic because of its user portal called MyChart.
Last week, Epic announced MyChart Central, which will allow patients to log in to MyChart with just one set of credentials, rather than needing a username and password for each health system they visit. It’s equally helpful for health-care organizations, Faulkner said.
“You’ll spend less time handling patient calls and resetting passwords,” she said in her keynote on Tuesday. “Demographic changes like address need to be added only once.”
A new addition to the MyChart portal is the always-on Emmie assistant, which the company said will be able to answer questions about lab results, propose appointment times and suggest relevant screenings that patients can discuss with their doctor.
During Epic’s three-hour presentation, Faulkner and other executives introduced Emmie as well as other AI assistants the company calls Art and Penny, highlighting new capabilities that are coming in the next year and beyond.
Health-care executives attend UGM 2025.
Courtesy of Epic
The Art assistant is intended for clinicians, and is meant to act as an active AI digital colleague, the company said. Art will be able to anticipate information that a doctor might need, for instance, and can pull up information like blood pressure trends, update a patient’s family history and place orders.
The company also said Art will be able to draft clinical notes, which was one of the most highly anticipated announcements ahead of the conference. AI-powered clinical documentation tools, which are often called AI scribes, can take notes on patient visits in real time as doctors record their encounters, with a patient’s consent.
AI scribes have exploded in popularity as health-care executives search for solutions to help reduce staff burnout and daunting administrative workloads. Some startups in the space, including Abridge and Ambience Healthcare, have raised hundreds of millions of dollars from investors.
Epic said its AI charting tool is being built in collaboration with Microsoft. Epic and Microsoft have been working closely together for roughly two decades, and Microsoft’s DAX Copilot product is already a popular offering within the AI scribing market.
“We’re proud to be collaborating with Epic to explore how we can bring our core Dragon ambient AI technology to Epic’s new AI Charting capability to further improve care delivery,” Joe Petro, corporate vice president of Microsoft Health & Life Sciences said in a statement.
Epic’s Penny assistant is designed to help with revenue cycle management and other administrative needs, such as generating appeal letters for insurance claims that get denied. It can also help speed up medical coding by serving up suggestions, Faulkner said. Those two features are already live.
“With all the challenges health-care organizations are facing, we need to make sure our clinicians and our organizations are strong and doing well in order to be able to take care of patients,” Faulkner said.
Epic closed out its executive address by teasing new AI capabilities that are coming to Cosmos, which is a deidentified patient dataset clinicians can use to conduct research. Health systems have to opt-in to participate in Cosmos, and the database currently includes information from more than 1,760 hospitals and 300 million patients.
Epic said it’s building a set of proprietary foundation models, called Cosmos AI, based on this data. The company is still evaluating different applications of the models, and launched the Cosmos AI Lab to help researchers and data scientists learn more.
Executives said the models could be used to predict a timeline of a patient’s potential medical events, like whether they’re a readmission risk or could eventually experience a heart attack.
“We’re finding that it continues to improve as it sees more patients,” said Seth Hain, a senior vice president of research and development at Epic. “Having only used 8 billion encounters so far, we’re just getting started.”
The logo of Japanese company SoftBank Group is seen outside the company’s headquarters in Tokyo on January 22, 2025.
Kazuhiro Nogi | Afp | Getty Images
Shares of SoftBank Group plunged as much as 9.17% Wednesday, as technology stocks in Asia declined, tracking losses in U.S. peers overnight.
The Japanese tech-focused investment firm saw shares drop for a second consecutive session, following its announcement of a $2 billion investment in Intel. Intel shares rose 6.97% to close at $25.31 Tuesday stateside.
SoftBank Group shares
Other Japanese tech stocks also declined, with semiconductor giant Advantest falling as much as 6.27%. Meanwhile, shares in Renesas Electronics and Tokyo Electron were last seen trading 2.46% and 0.75% lower, respectively.
Technology companies in South Korea, Taiwan and Hong Kong, also fell after U.S. tech stocks dropped overnight spurred by declines in artificial intelligence darling Nvidia‘s shares.
U.S. Commerce Secretary Howard Lutnick is considering the federal government taking equity stakes in semiconductor companies that get funding under the CHIPS Act for building plants in the U.S, sources familiar with the matter told Reuters. The U.S. CHIPS and Science Act seeks to boost the country’s semiconductor industry, scientific research and innovation.
Shares of Taiwanese chip company TSMC and manufacturer Hon Hai Precision Industry — known globally as Foxconn — declined 1.69% and 2.16%, respectively. TSMC manufactures Nvidia’s high-performance graphics processing units that help power large language models, while Foxconn has a strategic partnership with Nvidia to build “AI factories.”
Meanwhile, South Korean tech stocks mostly fell with shares of chipmaker SK Hynix down 3.33%. Samsung Electronics, however, rose 0.75%.
TSMC, Samsung and SK Hynix are among companies that have received funding under the CHIPS Act.
Over in Hong Kong, the Hang Seng Tech index lost 0.87% in early trade.
The worst performing stocks on the index were Kuaishou Technology which declined 4.8%, JD Health International which dropped 3.31% and Horizon Robotics which lost 2.29%.
Losses were also seen tech majors Alibaba Group, down 1.44%, and Xiaomi Corp which lost 1.34%.
CEO of Palantir Technologies Alex Karp attends the Pennsylvania Energy and Innovation Summit on the campus of Carnegie Mellon University in Pittsburgh, Pennsylvania on July 15, 2025.
Andrew Caballero-reynolds | Afp | Getty Images
Palantir‘s stock slumped more than 9% on Tuesday, falling for a fifth straight day to continue its pullback from all-time highs.
The artificial intelligence software provider’s stock has slid more than 15% over the last five trading sessions, after a stellar earnings report earlier this month propelled shares to all-time highs. The report was Palantir’s first-ever $1 billion revenue quarter.
Tuesday’s dip coincided with a broader market pullback.
Palantir is the most significant gainer to date in the S&P 500 in 2025, up more than 100%.
Shares have more than doubled as the company benefits from ongoing AI enthusiasm, scooping up government contracts with President Donald Trump pushing to overhaul agencies.
Palantir’s ascent has pushed the company into a list of top 10 U.S. tech firms and 20 most valuable U.S. companies, while also making shares incredibly expensive to own. Its forward price-to-earnings ratio, which tracks future earnings relative to share price, has soared past 245 times.
By comparison, technology giants such as Microsoft and Apple carry a P/E of nearly 30 times and rake in significantly greater quarterly revenues. Meta‘s and Alphabet‘s P/E ratios hover in the 20s.
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