Silicon Valley Bank seizure leaves a massive hole — and a large opportunity — in the world of climate finance
A view of Silicon Valley Bank headquarters in Santa Clara, CA, after the federal government intervened upon the bankâs collapse, on March 13, 2023.
Nikolas Liepins | Anadolu Agency | Getty Images
Silicon Valley Bank was the go-to for startups seeking bankers who understood the startup life and balance sheets. That was especially true for the cohort of startups being built and scaled to address climate change.
After a very stressful weekend for many startup founders and investors, banking regulators hatched a plan to backstop SVB’s deposits, ensuring that depositors won’t lose their money.
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Founded in 1983 specifically to help startups, SVB had a strong and established business in climate, boasting 1,550 climate tech and sustainability clients, according to its website.
“Silicon Valley Bank had a very good reputation in the energy transition space and were willing to put their money where their mouth is, unlike many of their peers,” said Mona Dajani, the head of renewable energy and infrastructure law at Shearman and Sterling.
“Many clean energy companies banked with SVB because they had an established and dedicated clean energy practice and they were perceived to have more experience in the clean energy space than most regional and big bulge bracket peers,” Dajani told CNBC.
But the climate space has grown up since SVB started, and that paves the way for new lenders to serve the market.
“Fundamentally, the companies that are coming out climate right now have real strength. These are foundational companies, and people are going to want to lend to them because it’s good business,” explained Katie Rae, the CEO of The Engine, an accelerator and venture fund focusing on tough tech, including climate startups.
“Just in the last three days, I probably have 50 emails in my inbox from different providers saying, ‘Hey, I know SVB is not in good shape. We also do venture debt.’ So many are going to emerge,” Rae told CNBC in a phone conversation on Tuesday.
Wind turbines operate at a wind farm, a key power source for the Coachella Valley, on February 22, 2023 near Whitewater, California.
Mario Tama | Getty Images
Understanding how startups work
Venture-backed startups are an unusual type of business. In their early stages, they may not have cash flow, revenues, or even customers. Instead, they rely on venture funding, where investors offer cash in exchange for equity, hoping that the startups prove out their technology, find customers, and eventually grow into giants.
Providing banking to those kinds of customers requires special skills and an appetite for risk.
“Nobody understands startups as well as Silicon Valley Bank and how to lend to them,” says Zachary Bogue, a long-time tech investor and cofounder of DCVC.
“I envision a startup’s application getting simplify annihilated by a big bank’s risk committee,” Bogue told CNBC.
That was exactly Bill Clerico‘s experience back in May 2009. When Clerico moved to Silicon Valley with Rich Aberman to grow their fintech company, WePay, they had a Bank of America small business account, but the account didn’t have the services the startup needed.
“Silicon Valley Bank understood that even though we may have only had $10,000 or so in deposits at the time, we had a lot of potential,” Clerico told CNBC.
As it turned out, SVB was right to bet on Clerico. WePay was acquired by JP Morgan Chase in December 2017.
“That early investment in our relationship paid off,” Clerico told CNBC. “Over time our deposit balances grew to hundreds of millions, we borrowed millions from them in venture debt, and we processed billions through their accounts.”
In Jan. 2022, Clerico launched Convective Capital, a $35 million venture capital fund investing in wildfire technolog. He ardently hopes somebody can fill the gap left by SVB.
“Some folks may conflate their balance-sheet-driven meltdown with the failure of this startup-focused business model — but in fact, I think that banking startups continues to be a great business and a role that someone needs to fill,” Clerico told CNBC. (Notably, Clerico is an angel investor in Mercury, a startup working to meet this need.)
“I hope SVB and their business model persists in some form,” Clerico said.
The ‘1,000-pound gorilla’ of venture debt lending
In the climate tech ecosystem, SVB was especially prominent in making loans to companies with venture capital funding, known as “venture debt.” It’s essential for startups who are still not generating enough cash flow to be self-sustainable, especially when they are between funding rounds.
“It adds a little bit to the capital that they’ve raised, extends their runway a little bit and gives them more time to make progress on their business,” Rae told CNBC. Venture debt can add between three to six months to the runway companies already have, Rae said.
“There are other places that do venture debt, but Silicon Valley Bank was the 1,000-pound gorilla in the room,” said Ami Kassar, the CEO of the business lending consultant Multifunding.
“The concern now is that even in instances where deposits are made whole, the credit facilities for companies with SVB are likely no longer available, and this is a sector where those are critical,” said Dajani.
That said, making loans to venture-backed companies is a riskier endeavor than traditional banking, Kassar told CNBC.
“I always wondered how they managed to have the regulators allow them to have such a heavy concentration of venture debt,” Kassar said.
Solar panels are set up in the solar farm at the University of California, Merced, in Merced, California, August 17, 2022.
Nathan Frandino | Reuters
Climate is good business
SVB was an early supporter of climate technology, helping a lot of these companies get off the ground. But as the sector has matured, participants believe other financiers will be more willing to lend to these companies.
“Silicon Valley Bank’s early support and commitment to supporting climate tech startups certainly helped catalyze the enormous migration of capital that you’re now seeing deployed into the sector,” Adam Braun, a founder of the climate startup Climate Club, told CNBC.
For instance, SVB provided financing to 60% of community solar projects, says Kiran Bhatraju, the CEO of Arcadia, a climate technology company that, among many services, helps people connect to community solar projects.
In this, the bank “was a climate bank pioneer,” said Steph Speirs, co-founder and CEO of Solstice Power Technologies, which has built a technology to help connect people to community solar projects.
“But renewables have come a long way in the last decade and there’s now a much wider universe of potential financiers looking to get on board,” Speirs said.
That’s what Braun expects to see, too.
“I believe we’ll see many more institutions build dedicated climate practices and funds to support startups emerging in this space,” Braun told CNBC. “While SVB may have been a first mover, I don’t think the events of last week will diminish the desire to finance and support the emerging companies that are leading the rapidly growing climate tech sector forward.”
First Republic and JP Morgan are “increasingly making this category a priority,” Chauncy Hamilton, a partner at the venture capital firm XYZ, told CNBC. “More and more banks are paying attention to climate,” Hamilton said.
Mark Casady, a founder of the venture capital firm Vestigo Ventures, agrees.
“Climate solutions are too powerful a force to be stopped by the failure of a bank. The need is critical and time is not on our side to find solutions. Since this is a fundamental need, it will get more backing rather than less,” Casady told CNBC.
That transition will take time, however. And for companies working to combat global warming, time is the ultimate enemy.
“I do expect big banks to ultimately step up and provide the financing the industry needs to move forward — these projects are just too attractive and the promise of climate tech is too great. But it will take some time, and delays can be costly in the fight against climate change,” Bhatraju told CNBC.
“With all the new investment in climate tech and the opportunities ahead afforded by the IRA [Inflation Reduction Act], there is a ton of momentum. We don’t want to lose that,” Bhatranju said.
Formula One F1 – United States Grand Prix – Circuit of the Americas, Austin, Texas, U.S. – October 23, 2022 Tim Cook waves the chequered flag to the race winner Red Bull’s Max Verstappen
Mike Segar | Reuters
Apple had two major launches last month. They couldn’t have been more different.
First, Apple revealed some of the artificial intelligence advancements it had been working on in the past year when it released developer versions of its operating systems to muted applause at its annual developer’s conference, WWDC. Then, at the end of the month, Apple hit the red carpet as its first true blockbuster movie, “F1,” debuted to over $155 million — and glowing reviews — in its first weekend.
While “F1” was a victory lap for Apple, highlighting the strength of its long-term outlook, the growth of its services business and its ability to tap into culture, Wall Street’s reaction to the company’s AI announcements at WWDC suggest there’s some trouble underneath the hood.
“F1” showed Apple at its best — in particular, its ability to invest in new, long-term projects. When Apple TV+ launched in 2019, it had only a handful of original shows and one movie, a film festival darling called “Hala” that didn’t even share its box office revenue.
Despite Apple TV+ being written off as a costly side-project, Apple stuck with its plan over the years, expanding its staff and operation in Culver City, California. That allowed the company to build up Hollywood connections, especially for TV shows, and build an entertainment track record. Now, an Apple Original can lead the box office on a summer weekend, the prime season for blockbuster films.
The success of “F1” also highlights Apple’s significant marketing machine and ability to get big-name talent to appear with its leadership. Apple pulled out all the stops to market the movie, including using its Wallet app to send a push notification with a discount for tickets to the film. To promote “F1,” Cook appeared with movie star Brad Pitt at an Apple store in New York and posted a video with actual F1 racer Lewis Hamilton, who was one of the film’s producers.
(L-R) Brad Pitt, Lewis Hamilton, Tim Cook, and Damson Idris attend the World Premiere of “F1: The Movie” in Times Square on June 16, 2025 in New York City.
Jamie Mccarthy | Getty Images Entertainment | Getty Images
Although Apple services chief Eddy Cue said in a recent interview that Apple needs the its film business to be profitable to “continue to do great things,” “F1” isn’t just about the bottom line for the company.
Apple’s Hollywood productions are perhaps the most prominent face of the company’s services business, a profit engine that has been an investor favorite since the iPhone maker started highlighting the division in 2016.
Films will only ever be a small fraction of the services unit, which also includes payments, iCloud subscriptions, magazine bundles, Apple Music, game bundles, warranties, fees related to digital payments and ad sales. Plus, even the biggest box office smashes would be small on Apple’s scale — the company does over $1 billion in sales on average every day.
But movies are the only services component that can get celebrities like Pitt or George Clooney to appear next to an Apple logo — and the success of “F1” means that Apple could do more big popcorn films in the future.
“Nothing breeds success or inspires future investment like a current success,” said Comscore senior media analyst Paul Dergarabedian.
But if “F1” is a sign that Apple’s services business is in full throttle, the company’s AI struggles are a “check engine” light that won’t turn off.
Replacing Siri’s engine
At WWDC last month, Wall Street was eager to hear about the company’s plans for Apple Intelligence, its suite of AI features that it first revealed in 2024. Apple Intelligence, which is a key tenet of the company’s hardware products, had a rollout marred by delays and underwhelming features.
Apple spent most of WWDC going over smaller machine learning features, but did not reveal what investors and consumers increasingly want: A sophisticated Siri that can converse fluidly and get stuff done, like making a restaurant reservation. In the age of OpenAI’s ChatGPT, Anthropic’s Claude and Google’s Gemini, the expectation of AI assistants among consumers is growing beyond “Siri, how’s the weather?”
The company had previewed a significantly improved Siri in the summer of 2024, but earlier this year, those features were delayed to sometime in 2026. At WWDC, Apple didn’t offer any updates about the improved Siri beyond that the company was “continuing its work to deliver” the features in the “coming year.” Some observers reduced their expectations for Apple’s AI after the conference.
“Current expectations for Apple Intelligence to kickstart a super upgrade cycle are too high, in our view,” wrote Jefferies analysts this week.
Siri should be an example of how Apple’s ability to improve products and projects over the long-term makes it tough to compete with.
It beat nearly every other voice assistant to market when it first debuted on iPhones in 2011. Fourteen years later, Siri remains essentially the same one-off, rigid, question-and-answer system that struggles with open-ended questions and dates, even after the invention in recent years of sophisticated voice bots based on generative AI technology that can hold a conversation.
Apple’s strongest rivals, including Android parent Google, have done way more to integrate sophisticated AI assistants into their devices than Apple has. And Google doesn’t have the same reflex against collecting data and cloud processing as privacy-obsessed Apple.
Some analysts have said they believe Apple has a few years before the company’s lack of competitive AI features will start to show up in device sales, given the company’s large installed base and high customer loyalty. But Apple can’t get lapped before it re-enters the race, and its former design guru Jony Ive is now working on new hardware with OpenAI, ramping up the pressure in Cupertino.
“The three-year problem, which is within an investment time frame, is that Android is racing ahead,” Needham senior internet analyst Laura Martin said on CNBC this week.
Apple’s services success with projects like “F1” is an example of what the company can do when it sets clear goals in public and then executes them over extended time-frames.
Its AI strategy could use a similar long-term plan, as customers and investors wonder when Apple will fully embrace the technology that has captivated Silicon Valley.
Wall Street’s anxiety over Apple’s AI struggles was evident this week after Bloomberg reported that Apple was considering replacing Siri’s engine with Anthropic or OpenAI’s technology, as opposed to its own foundation models.
The move, if it were to happen, would contradict one of Apple’s most important strategies in the Cook era: Apple wants to own its core technologies, like the touchscreen, processor, modem and maps software, not buy them from suppliers.
Using external technology would be an admission that Apple Foundation Models aren’t good enough yet for what the company wants to do with Siri.
“They’ve fallen farther and farther behind, and they need to supercharge their generative AI efforts” Martin said. “They can’t do that internally.”
Apple might even pay billions for the use of Anthropic’s AI software, according to the Bloomberg report. If Apple were to pay for AI, it would be a reversal from current services deals, like the search deal with Alphabet where the Cupertino company gets paid $20 billion per year to push iPhone traffic to Google Search.
The company didn’t confirm the report and declined comment, but Wall Street welcomed the report and Apple shares rose.
In the world of AI in Silicon Valley, signing bonuses for the kinds of engineers that can develop new models can range up to $100 million, according to OpenAI CEO Sam Altman.
“I can’t see Apple doing that,” Martin said.
Earlier this week, Meta CEO Mark Zuckerberg sent a memo bragging about hiring 11 AI experts from companies such as OpenAI, Anthropic, and Google’s DeepMind. That came after Zuckerberg hired Scale AI CEO Alexandr Wang to lead a new AI division as part of a $14.3 billion deal.
Meta’s not the only company to spend hundreds of millions on AI celebrities to get them in the building. Google spent big to hire away the founders of Character.AI, Microsoft got its AI leader by striking a deal with Inflection and Amazon hired the executive team of Adept to bulk up its AI roster.
Apple, on the other hand, hasn’t announced any big AI hires in recent years. While Cook rubs shoulders with Pitt, the actual race may be passing Apple by.
Tesla CEO Elon Musk speaks alongside U.S. President Donald Trump to reporters in the Oval Office of the White House on May 30, 2025 in Washington, DC.
Kevin Dietsch | Getty Images
Tesla CEO Elon Musk, who bombarded President Donald Trump‘s signature spending bill for weeks, on Friday made his first comments since the legislation passed.
Musk backed a post on X by Sen. Rand Paul, R-Ky., who said the bill’s budget “explodes the deficit” and continues a pattern of “short-term politicking over long-term sustainability.”
The House of Representatives narrowly passed the One Big Beautiful Bill Act on Thursday, sending it to Trump to sign into law.
Paul and Musk have been vocal opponents of Trump’s tax and spending bill, and repeatedly called out the potential for the spending package to increase the national debt.
On Monday, Musk called it the “DEBT SLAVERY bill.”
The independent Congressional Budget Office has said the bill could add $3.4 trillion to the $36.2 trillion of U.S. debt over the next decade. The White House has labeled the agency as “partisan” and continuously refuted the CBO’s estimates.
The bill includes trillions of dollars in tax cuts, increased spending for immigration enforcement and large cuts to funding for Medicaid and other programs.
It also cuts tax credits and support for solar and wind energy and electric vehicles, a particularly sore spot for Musk, who has several companies that benefit from the programs.
“I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY!” Trump wrote in a social media post in early June as the pair traded insults and threats.
Shares of Tesla plummeted as the feud intensified, with the company losing $152 billion in market cap on June 5 and putting the company below $1 trillion in value. The stock has largely rebounded since, but is still below where it was trading before the ruckus with Trump.
Tesla one-month stock chart.
— CNBC’s Kevin Breuninger and Erin Doherty contributed to this article.
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