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Tesla Supercharger stations are seen in a parking lot in Austin, Texas, on Sept. 16, 2024.

Brandon Bell | Getty Images

Tesla is being sued by the family of a driver who died in a 2023 collision, claiming that the company’s “fraudulent misrepresentation” of its Autopilot technology was to blame.

The Tesla driver, Genesis Giovanni Mendoza-Martinez, died in the crash involving a Model S sedan in Walnut Creek, California. His brother, Caleb, who had been a passenger at the time, was seriously injured.

The Mendoza family sued Tesla in October in Contra Costa County, but in recent days Tesla had the case moved from state court to federal court in California’s Northern District. The Independent first reported on the venue change. Plaintiffs generally face a higher burden of proof in federal court for fraud claims.

The incident involved a 2021 Model S, which smashed into a parked fire truck while the driver was using Tesla’s Autopilot, a partially automated driving system.

Mendoza’s attorneys alleged that Tesla and Musk have exaggerated or made false claims about the Autopilot system for years in order to, “generate excitement about the company’s vehicles and thereby improve its financial condition.” They pointed to tweets, company blog posts, and remarks on earnings calls and in press interviews.

In their response, Tesla attorneys said the driver’s “own negligent acts and/or omissions” were to blame for the collision, and that “reliance on any representation made by Tesla, if any, was not a substantial factor” in causing harm to the driver or passenger. They claim Tesla’s cars and systems have a “reasonably safe design,” in compliance with state and federal laws.

Tesla didn’t respond to requests for comment about the case. Brett Schreiber, an attorney representing the Mendoza family, declined to make his clients available for an interview.

There are at least 15 other active cases focused on similar claims involving Tesla incidents where Autopilot or its FSD — Full Self-Driving (Supervised) — had been in use just before a fatal or injurious crash. Three of those have been moved to federal courts. FSD is the premium version of Tesla’s partially automated driving system. While Autopilot comes as a standard option in all new Tesla vehicles, owners pay an up-front premium, or subscribe monthly to use FSD.

Elon Musk unveils the Cybercab at Tesla robotaxi event

The crash at the center of the Mendoza-Martinez lawsuit has also been part of a broader Tesla Autopilot investigation by the National Highway Traffic Safety Administration, initiated in August 2021. During the course of that investigation, Tesla made changes to its systems, including with a myriad of over-the-air software updates.

The agency has opened a second probe, which is ongoing, evaluating whether Tesla’s “recall remedy” to resolve issues with the behavior of Autopilot around stationary first responder vehicles had been effective.

NHTSA has warned Tesla that its social media posts may mislead drivers into thinking its cars are robotaxis. Additionally, the California Department of Motor Vehicles has sued Tesla, alleging its Autopilot and FSD claims amounted to false advertising.

Tesla is currently rolling out a new version of FSD to customers. Over the weekend, Musk instructed his 206.5 million-plus followers on X to “Demonstrate Tesla self-driving to a friend tomorrow,” adding that, “It feels like magic.”

Musk has been promising investors that Tesla’s cars would soon be able to drive autonomously, without a human at the wheel, since about 2014. While the company has shown off a design concept for an autonomous two-seater called the CyberCab, Tesla has yet to produce a robotaxi.

Meanwhile, competitors including WeRide and Pony.ai in China, and Alphabet’s Waymo in the U.S. are already operating commercial robotaxi fleets and services.

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Venture capitalists bet on Sublime, a startup bringing AI to email security

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Venture capitalists bet on Sublime, a startup bringing AI to email security

Across the world, companies rely on Microsoft and Google to administer email accounts for employees. Keeping all those mailboxes secure, however, is a business opportunity.

Proofpoint went public in 2012, and as enterprises migrated to the cloud, many adopted the company’s secure email gateway software as a precautionary measure. But private equity firm Thoma Bravo bought Proofpoint in 2021, and another provider, Mimecast, went private in 2022.

Then generative artificial intelligence took off. The trending technology gave more ammunition to hackers, as well as new tools for security companies that promise to defend clients against attacks.

Now, a new set of companies are gaining traction in a mature market.

Investors valued startup Material Security at $1.1 billion in a 2022 funding round. In August, Abnormal Security, which calls itself “AI-native,” said it was worth $5.1 billion after a funding round involving CrowdStrike and Wellington Management. And on Thursday, Sublime Security, co-founded by U.S. Defense Department cybersecurity veteran Josh Kamdjou, said it had raised a round totaling $60 million.

Kamdjou, who is also Sublime’s CEO, had spent his former career showing companies how he could break into their networks and avoid being stymied by email security products. Then he decided to work on a solution.

“I decided to build something that would stop me as an attacker,” he said.

Business credit card issuer Brex had been using Material with Google inboxes, but after testing out Sublime, Brex switched, the startup’s chief information security officer, Mark Hillick, told CNBC in an interview. There were many problem emails that Material allowed but Sublime did not, Hillick said.

“All they need is one person to click on it, and then they go from there,” he said, referring to hackers. “That’s why false negatives are pretty dangerous.”

Abnormal Security is considerably larger than Material and Sublime, with over $200 million in annualized revenue. It’s quickly gaining market share, according to Peter Firstbrook, vice president and distinguished analyst at industry researcher Gartner.

Some companies use Abnormal Security as an add-on to Mimecast or Proofpoint, he said. For years, businesses have called in Proofpoint to filter messages before sending them along to Microsoft-based inboxes, he said, adding that Proofpoint’s year-over-year revenue growth rate is now in the teens after being in the thirties as recently as 2018.

Brex briefly looked at Abnormal but decided not to implement it, Hillick said.

“I don’t believe in black box as a philosophy,” he said. “It reduces visibility, so I can’t see how Brex is going to be attacked. I can’t see what tactics or techniques are being used. With Sublime, I can do that.”

Hillick said that in his experience, Sublime provides better coverage of new threats. Abnormal’s website says its software “detects hyper-personalized, never before seen attacks with no traditional indicators of compromise.”

Sublime’s Kamdjou said attacks still make it through the defenses of large email providers such as Google and Microsoft, even when companies pay extra for higher tiers of service.

“That’s why we’re seeing so much success, basically,” Kamdjou said. “We’re here to catch everything they don’t.”

Representatives from Abnormal, Material, Microsoft, Mimecast and Proofpoint did not immediately respond to requests for comment.

The challenge facing incumbents such as Mimecast and Proofpoint is less about losing customers and more about missing out on new business from young companies that go with a next-generation tool such as Abnormal, according to Mark Alley, an email security consultant in Alabama. But some companies have switched to Sublime from Mimecast and from Proofpoint, Kamdjou said.

Proofpoint appears to be aware of the challenge, having acquired AI startup Tessian last year. Sumit Dhawan, CEO of Proofpoint, said in October that the company was 12 to 18 months away from going public again. He said he saw interesting potential acquisition targets but that prices remained high.

Sublime lacks a billion-dollar valuation. Unlike many richly valued startups, it has not resorted to splashy marketing, and it’s not big on placing cold calls, either.

Kamdjou said the startup did reach out to Donald Trump’s 2024 presidential campaign but didn’t get anywhere. In August, the campaign said a foreign adversary had obtained documents after breaching its email system.

“We’re very fortunate, because the majority of folks have heard about us just from word of mouth,” Kamdjou said.

They can then get a sense of Sublime’s abilities by uploading emails to a free service called EML Analyzer, which will use AI to predict if messages are likely benign, suspicious or malicious. It can pick up on phrases that often show up in business-email compromise attempts.

The sales-light approach won’t be changing now that Sublime has more capital to work with.

“Our mindset is we’re going to go and spend a bunch of money on R&D still,” co-founder Ian Thiel said.

WATCH: Trump campaign says emails hacked: Here’s what to know

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OpenAI says ChatGPT suffers outage, company working on fix

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OpenAI says ChatGPT suffers outage, company working on fix

OpenAI CEO Sam Altman visits “Making Money With Charles Payne” at Fox Business Network Studios in New York on Dec. 4, 2024.

Mike Coppola | Getty Images

OpenAI said Wednesday it was working to fix an outage after its popular ChatGPT assistant and Sora video generator were left inaccessible.

“We have identified the issue and are working to roll out a fix,” OpenAI said in a post on X.

Earlier this month, OpenAI CEO Sam Altman said the company’s technology was reaching 300 million active users each week. Earlier on Wednesday, Apple released new versions of its software for the iPhone, iPad and Mac that bring integrations with ChatGPT.

ChatGPT has been down for over three hours. An outage in June lasted for over five hours.

OpenAI was valued at $157 billion in a funding round in October that included participation from existing backer Microsoft as well as chipmaker Nvidia. The company’s rapid ascent began with the launch of ChatGPT in late 2022 and has been the biggest story in the tech industry over the last couple years.

On Monday OpenAI said it was releasing Sora to people in the U.S. and most other countries, but on Tuesday, Altman wrote on X that “we significantly underestimated demand for sora; it is going to take awhile to get everyone access.”

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ServiceTitan prices IPO at $71, above expected range, after slow stretch for tech offerings

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ServiceTitan prices IPO at , above expected range, after slow stretch for tech offerings

Vahe Kuzoyan, left, and Ara Mahdessian, the founders of ServiceTitan.

ServiceTitan

ServiceTitan, a provider of cloud software to contractors, priced its IPO at $71 a share on Wednesday, above the expected range.

The company is set to debut on the Nasdaq on Thursday under ticker symbol “TTAN.” ServiceTitan previously raised its price range to between $65 and $67.

ServiceTitan sold 8.8 million shares in the offering, which would amount to a raise of almost $625 million. At the IPO price, ServiceTitan is worth about $6.3 billion.

Technology IPOs have been sparse since late 2021, when inflation and rising interest rates pushed investors out of riskier assets. Cloud software stocks quickly went out of favor after remote work during the pandemic had accelerated their growth.

In March of this year, social network Reddit went public, followed by data management company Rubrik the following month. In September, less than two weeks after the Federal Reserve lowered its benchmark rate for the first time since 2020, chipmaker Cerebras filed for an IPO. However, the company has yet to debut on the market.

ServiceTitan, based in Glendale, California, filed to go public on Nov. 18. The company has said some proceeds would go toward redeeming all outstanding shares of its non-convertible preferred stock. It had issued that stock in 2022 to repay loans to finance the $577 million acquisition of pest control software provider FieldRoutes.

While raising money in 2022, ServiceTitan agreed to “compounding ratchet” terms that encourage the company to quickly go public and prevent unnecessary dilution, according to an analysis from venture firm Meritech Capital.

Bessemer Venture Partners, TPG and Iconiq are among the company’s top shareholders, alongside founders Vahe Kuzoyan and Ara Mahdessian.

Mahdessian’s father had a contracting business, and Kuzoyan’s father dealt in plumbing, according to the Los Angeles Times. The founders said in a pre-recorded IPO roadshow that they saw technology as a way to modernize their family businesses. Their software can help with marketing, sales, scheduling and customer service.

ServiceTitan’s preliminary results for the October quarter show a net loss of about $47 million on $198.5 million in revenue. That suggests approximately 24% year-over-year revenue growth, the highest rate since mid-2023. But the company’s net loss widened from around $40 million in the October quarter last year.

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