Khosla Ventures backs effort to build ‘orchards’ of ‘fruit’ with lung-like material to remove CO2 from the air
CEO Charles Cadieu (L) and CTO Matt Lee standing in front of the future home of the Spiritus Orchard facility, located in the Western U.S. (The exact location is not yet public.)
Photo courtesy Spiritus
A successful serial entrepreneur and a seasoned chemical engineer with a decade of experience at one of the nation’s premier national labs have come together to develop and scale a new direct air capture technology that mimics the architecture of a human lung.
The founders of the startup, named Spiritus after the Latin word for “breath,” began work in December 2021, and the company is officially coming out of stealth on Wednesday, with the announcement of an $11 million funding raise led by prominent Silicon Valley venture capital firm Khosla Ventures, with other investors including Page One Ventures.
Spiritus has built a novel approach to direct air carbon capture that relies on a material that absorbs carbon dioxide passively. Critically, Spiritus has developed a particular architecture that mimics the alveoli in the lungs in order to maximize the surface area for carbon dioxide to make contact with the material.
This lung-like material, technically called a “sorbent,” will be shaped in round balls and laid out like artificial fruits in a carbon-capture orchard, CEO Charles Cadieu and CTO Matt Lee told CNBC in a phone interview on Tuesday.
When the lung-like “fruit” have been collected from the carbon “orchard,” they will be put in a container, where low heat will be applied to remove the carbon dioxide. The desorption process will be powered by clean energy to ensure the process is a not adding emissions to the atmosphere. Once the CO2 has been removed from the lung-like fruit, the sorbent can then be returned to the carbon orchard and reused.
The sorbent developed by Spiritus, made to mimick the human lung.
Photo courtesy Spiritus
‘Mother nature’s the true artist’
Lee worked at Los Alamos National Lab from September 2012 to June 2022 on a variety of chemical engineering advanced material projects, including some with national security and defense applications, as well as heat shields and laser fusion fuel target pellets similar to those used at the Lawrence Livermore National Laboratory to achieve a key milestone in nuclear fusion. He is a specialist in colloid science, which is the study of materials where particles of one substance are suspended in another.
Lee hadn’t worked on carbon capture technology applications until Cadieu inspired him to consider the problem. The pair had known each other for about 15 years through a family friend and had enjoyed keeping tabs on each other’s projects.
Previously, Cadieu co-founded Caption Health, a health care startup that uses artificial intelligence to assist in ultrasound scans. Caption Health received funding from the Bill and Melinda Gates Foundation in September 2020 for its capacity to enable non-experts to perform lung ultrasounds and was sold to GE Healthcare in February 2023. Also, Cadieu was a founding team member of IQ Engines, an image recognition software company which Yahoo acquired in 2013.
When Cadieu approached Lee to consider carbon capture, Lee approached the problem with a philosophy he has carried through much of his career: “Mother nature’s the true artist and she’s had a lot more practice than we have had,” Lee told CNBC. The other prong of his philosophy is summarized by a Leonardo da Vinci quote Lee recounted: “Simplicity is the ultimate sophistication.”
That’s why they looked at lungs.
Matt Lee, the chief technical founder, is a chemical engineer with an expertise in colloid science, which is the study of materials where particles of one material are suspended in another.
Photo courtesy Matt Lee
“Lungs are very well rehearsed at doing this — taking a large volume of air and then dispersing it or spreading it out over an extraordinary high amount of interface that the alveoli make with other parts of the body,” Lee told CNBC. That’s important because while carbon dioxide levels in the atmosphere are at record high levels, carbon dioxide is still diluted and makes up a relatively small percentage of the air.
“In order to capture some significant quantities of carbon dioxide on your sorbent, you simply have to expose it to a lot of air — a massive amount — and so finding the structure that can simultaneously give you that highly efficient contact with a large amount of active surface per unit volume enables you to have a process that is viable, feasible, economical,” Lee told CNBC.
That third component — economical — is critical in the direct air carbon capture field, and is part of what drew Khosla Ventures to make its first direct air capture investment in Spiritus.
“We’ve been watching on the sidelines evaluating all the technologies,” Rajesh Swaminathan, partner at Khosla Ventures, told CNBC in a phone conversation on Tuesday. Direct air capture is still a nascent industry and therefore very expensive right now, but Spiritus uses less energy than most of the other competitors in the space, Swaminathan said.
The absorption of carbon dioxide is passive, and the desorption process, where the carbon dioxide is removed from the “fruit” made with the lung-like material, takes a comparatively low amount of energy, Swaminathan said.
This is a model of the Spiritus equipment used to remove carbon dioxide from the sorbent.
Image courtesy Spiritus
“A lot of direct air capture processes, they require either a lot of high heat — and ours requires low heat — or they require a lot of energy, even if low heat, and ours is less than half of what’s been previously achieved by other solutions,” Cadieu told CNBC. “So this is another part of this overall equation that drives down low costs.”
The U.S. Department of Energy has a public initiative called the “Carbon Negative Shot,” which is its name for the push to drive innovation that can capture carbon dioxide, remove it from the atmosphere and store it for less than $100 per metric ton. Spiritus is driving towards this $100 per metric ton goal.
Spiritus will partner with companies specializing in carbon sequestration to take that removed carbon and put it away.
Cadieu says the artificial carbon orchards that Spiritus plans to build are more efficient than biologic trees and so take a smaller land footprint to absorb carbon dioxide than biologic forests. When the carbon captured with artificial trees is stored, it also has the advantage of sequestering carbon permanently. When biologic trees decompose after they die or burn in a fire, carbon they contain is released back into the atmosphere.
“We’re able to remove about 1,000 times more carbon dioxide than a forest can. And so this solution is actually far more efficient than forestry for removing carbon dioxide from the atmosphere per acre,” Cadieu said.
Cheng Xin | Getty Images
Okta on Tuesday topped Wall Street’s third-quarter estimates and issued an upbeat outlook, but shares fell as the company did not provide guidance for fiscal 2027.
Shares of the identity management provider fell more than 3% in after-hours trading on Tuesday.
Here’s how the company did versus LSEG estimates:
- Earnings per share: 82 cents adjusted vs. 76 cents expected
- Revenue: $742 million vs. $730 million expected
Compared to previous third-quarter reports, Okta refrained from offering preliminary guidance for the upcoming fiscal year. Finance chief Brett Tighe cited seasonality in the fourth quarter, and said providing guidance would require “some conservatism.”
Okta released a capability that allows businesses to build AI agents and automate tasks during the third quarter.
CEO Todd McKinnon told CNBC that upside from AI agents haven’t been fully baked into results and could exceed Okta’s core total addressable market over the next five years.
“It’s not in the results yet, but we’re investing, and we’re capitalizing on the opportunity like it will be a big part of the future,” he said in a Tuesday interview.
Revenues increased almost 12% from $665 million in the year-ago period. Net income increased 169% to $43 million, or 24 cents per share, from $16 million, or breakeven, a year ago. Subscription revenues grew 11% to $724 million, ahead of a $715 million estimate.
For the current quarter, the cybersecurity company expects revenues between $748 million and $750 million and adjusted earnings of 84 cents to 85 cents per share. Analysts forecast $738 million in revenues and EPS of 84 cents for the fourth quarter.
Returning performance obligations, or the company’s subscription backlog, rose 17% from a year ago to $4.29 billion and surpassed a $4.17 billion estimate from StreetAccount.
This year has been a blockbuster period for cybersecurity companies, with major acquisition deals from the likes of Palo Alto Networks and Google and a raft of new initial public offerings from the sector.
Okta shares have gained about 4% this year.
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Marvell Technology Group Ltd. headquarters in Santa Clara, California, on Sept. 6, 2024.
David Paul Morris | Bloomberg | Getty Images
Semiconductor company Marvell on Tuesday announced that it will acquire Celestial AI for at least $3.25 billion in cash and stock.
The purchase price could increase to $5.5 billion if Celestial hits revenue milestones, Marvell said.
Marvell shares rose 13% in extended trading Tuesday as the company reported third-quarter earnings that beat expectations and said on the earnings call that it expected data center revenue to rise 25% next year.
The deal is an aggressive move for Marvell to acquire complimentary technology to its semiconductor networking business. The addition of Celestial could enable Marvell to sell more chips and parts to companies that are currently committing to spend hundreds of billions of dollars on infrastructure for AI.
Marvell stock is down 18% so far in 2025 even as semiconductor rivals like Broadcom have seen big valuation increases driven by excitement around artificial intelligence.
Celestial is a startup focused on developing optical interconnect hardware, which it calls a “photonic fabric,” to connect high-performance computers. Celestial was reportedly valued at $2.5 billion in March in a funding round, and Intel CEO Lip-Bu Tan joined the startup’s board in January.
Optical connections are becoming increasingly important because the most advanced AI systems need those parts tie together dozens or hundreds of chips so they can work as one to train and run the biggest large-language models.
Currently, many AI chip connections are done using copper wires, but newer systems are increasingly using optical connections because they can transfer more data faster and enable physically longer cables. Optical connections also cost more.
“This builds on our technology leadership, broadens our addressable market in scale-up connectivity, and accelerates our roadmap to deliver the industry’s most complete connectivity platform for AI and cloud customers,” Marvell CEO Matt Murphy said in a statement.
Marvell said that the first application of Celestial technology would be to connect a system based on “large XPUs,” which are custom AI chips usually made by the companies investing billions in AI infrastructure.
On Tuesday, the company said that it could even integrate Celestial’s optical technology into custom chips, and based on customer traction, the startup’s technology would soon be integrated into custom AI chips and related parts called switches.
Amazon Web Services Vice President Dave Brown said in a statement that Marvell’s acquisition of Celestial will “help further accelerate optical scale-up innovation for next-generation AI deployments.”
The maximum payout for the deal will be triggered if Celestial can record $2 billion in cumulative revenue by the end of fiscal 2029. The deal is expected to close early next year.
In its third-quarter earnings on Tuesday, Marvell earnings of 76 cents per share on $2.08 billion in sales, versus LSEG expectations of 73 cents on $2.07 billion in sales. Marvell said that it expects fourth-quarter revenue to be $2.2 billion, slightly higher than LSEG’s forecast of $2.18 billion.
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