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Google’s senior vice president of advertising and commerce Sridhar Ramaswamy

Krisztian Bocsi | Bloomberg | Getty Images

A top former Google executive wants to make searching the blockchain easier with his new startup.

Sridhar Ramaswamy, who led the internet giant’s ad business from 2013 to 2018, has started a new company called nxyz. The venture is officially launching Wednesday after attracting investment from several top investors, he told CNBC exclusively.

Armed with a rolodex of eminent Silicon Valley connections, Ramaswamy secured $40 million in funding in May to establish nxyz as a separate entity to Neeva, a privacy-focused search engine he also owns. The round was led by Paradigm, a prolific crypto and “Web3” dealmaker, while Coinbase, Sequoia and Greylock — where Ramaswamy is a partner — also invested. Ramaswamy will remain as Neeva’s CEO while he also leads nxyz.

Nxyz was conceived earlier this year by a team of engineers at Neeva, a search engine that doesn’t include any ads and blocks online tracking tools. Ramaswamy built Neeva in 2019 after leaving his role as senior vice president of Google’s $150 billion ad business a year earlier, which he says was over disillusionment with its relentless focus on maintaining growth at the expense of users.

In a March blogpost on Neeva’s website, nxyz is described as “an experiment bringing the same user-first ethos of Neeva search to web3.” Web3 loosely refers the idea of a more decentralized version of the internet powered by cryptocurrencies, nonfungible tokens and other technologies. It encourages placing ownership of data in the hands of users instead of Big Tech platforms, which use people’s personal information to target them with ads.

“To me, the big advancement with a blockchain is that it introduces this idea of decentralized computation, where you’re uploading a piece of code to a blockchain and the code is running there,” Ramaswamy said in a CNBC interview. “No one is in charge. It is decentralized storage that is owned by a collective. Plus, they also have utility in the form of a native token currency that has been designed to give incentive for the system.”

Crypto enthusiasts want to remake the internet with 'Web3.' Here's what that means

Nxyz trawls blockchains and associated applications for sought-after data on things like how much someone holds in their crypto wallet, or what NFTs they’re buying. It then streams this data to developers in real-time using tools called APIs. The platform currently supports the Ethereum, Polygon and Binance networks, and Ramaswamy says it’s looking to include more over time.

Unlike Neeva and Google — the “Web2” behemoth Neeva wants to disrupt — nxyz’s Web3 search software isn’t targeted at consumers. Rather, it wants to offer clean blockchain data to large crypto firms, kind of like how Bloomberg sells Wall Street institutions access to financial data and news with its terminals business. Ramaswamy named crypto custody firm BitGo as an early client it has partnered with.

Parsing data from the blockchain is a messy process, he explained. Smart contracts — programs that power crypto applications — can be assigned designated tasks. But once they’re out in the wild, knowing what functions they carry out in practice can be difficult. As an example, bugs in key smart contracts known as blockchain bridges have opened the industry up to mega hacks, with bridges from Binance and Axie Infinity maker Sky Mavis suffering nine-figure breaches. More insight into the performance of those tools could improve security.

“It’s one thing to write smart contracts that can do things. But you need to have a record of, what did they do? And how do I surface that?” Ramaswamy said. “It’s everything from, ‘What does your wallet contain?’ to, ‘If you’ve swapped a USDC token with ethereum, what was the exchange and when did that happen?'”

Nxyz’s launch comes as crypto investors reel from a deep pullback in token prices, with bitcoin, the world’s largest digital currency, down 70% from its all-time high. Among the main factors driving the current so-called “crypto winter” are higher interest rates from the Federal Reserve and an industry-wide liquidity crunch.

That has led to a tougher environment for crypto and blockchain-focused startups seeking to attract capital, with Pitchbook data showing VC investment in such firms dropped 37% to $4.4 billion in the third quarter from $7.6 billion the quarter prior. Of those that have successfully raised, several are seeing their valuations remain flat or fall. Nxyz declined to disclose its valuation. 

Ramaswamy said the firm was lucky to raise funding when it did. Talks with investors began in mid-April and concluded by mid-May, around the same time so-called stablecoin terraUSD and its sister token luna started crashing. Asked about souring investor sentiment toward crypto, the entrepreneur said his firm was “well-funded to sit out the crypto winter,” adding it only needs around 20 employees. “I think it’ll be a very different trajectory” to Web3 and crypto companies that have run into financial troubles, he said. “We want to be very mindful of the current climate, build carefully, and make sure that we are also bringing in revenue early on.”

Nxyz’s team is currently split across Mountain View, Austin and New York.

While stock prices of crypto trading platforms like Coinbase have come down quite a bit, the infrastructure that powers “Web3” remains a hot target. Firms like ConsenSys, MoonPay and Ramp have raised sizable amounts of cash this year. “Web3 developers today lack fast, flexible, and reliable infrastructure to support their applications, which holds the industry back from widespread adoption,” said Matt Huang, co-founder and managing partner at Paradigm. “Nxyz has a truly superlative team that has built the best data indexing infrastructure for Web3, and we at Paradigm are thrilled to support them.”

Still, Web3 has been a punching bag for some leaders in Silicon Valley, like Twitter co-founder Jack Dorsey and Tesla CEO Elon Musk. A “general uneasiness” people have when it comes to Web3 is there’s no “common term and definition,” according to John Lee, blockchain lead at e-commerce firm Shopify.

“Every time somebody in the general public has a conversation with somebody in the industry, they get a different definition, they get a different explanation,” Lee said. “It’s confusing to people.”

Meanwhile, the space is rife with scams, including infamous “rug pulls” where fraudsters flee a bogus token project once they’ve pocketed enough cash. Ramaswamy concedes “there have been a lot of scams” in Web3. But he hopes more practical use cases like video games, concert tickets and remittances will eventually catch on.

As for whether Web3 can crack the dominance of digital giants like Google and Meta, Ramaswamy said “the dice is loaded against” upstarts like his. However, staff at Big Tech firms are increasingly quitting to join roles at crypto businesses. That includes Ramaswamy’s eldest son who, according to his father, recently joined a Web3 company.

Asked for a take on his former employer, Ramaswamy said he thinks the company became a victim of its own success. “I think Google is an incredibly successful company,” he said. “But its growth mindset, combined with a monopoly position, produces a bad outcome.”

“Let’s say there was only one toothpaste manufacturer for all of the U.K. They’d be like, yeah £1 is not enough. We’re going to chalk it up to £1.20,” he added. “Google’s sort of like that, where it goes, ‘Everybody uses us for searching, you can keep jacking up the price and it’s fine.’ I don’t think it’s people being evil” — a reference to “Don’t be evil,” Google’s corporate code of conduct — “I think it’s a system that demands growth at all costs.”

Google was not immediately available for comment by the time of publication. The company previously told The Telegraph newspaper that its ads “help business of all sizes grow and connect with new customers.”

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Inside one of the first all-female hacker houses in San Francisco

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Inside one of the first all-female hacker houses in San Francisco

For Molly Cantillon, living in a hacker house wasn’t just a dream, but a necessity.

“I had lived in a few hacker houses before and wanted to replicate that energy,” said Cantillon, 20, co-founder of HackHer House and founder of the startup NOX. “A place where really energetic, hardcore people came together to solve problems. But every house I lived in was mostly male. It was obvious to me that I wanted to do the inverse and build an all-female hacker house that created the same dynamic but with women.”

Cantillon, who has lived in several hacker houses over the years, saw a need for a space dedicated exclusively to women. That’s why she co-founded HackHer House, the first all-female hacker house in the San Francisco Bay Area.

“A hacker house is a shared living space where builders and innovators come together to work on their own projects while collaborating with others,” said Jennifer Li, General Partner at Andreessen Horowitz and sponsor of the HackHer House. “It’s a community that thrives on creativity and resource sharing, making it a cost-effective solution for those in high-rent areas like Silicon Valley, where talented founders and engineers can easily connect and support each other.”

Founded by Cantillon, Zoya Garg, Anna Monaco and Anne Brandes, this house was designed to empower women in a tech world traditionally dominated by men. 

“We’re trying to break stereotypes here,” said Garg, 21, a rising senior at Stanford University. “This house isn’t just about living together; it’s about creating a community where women can thrive in tech.”

Located in North Beach, HackHer House was home this summer to seven women, all of whom share the goal of launching successful ventures in tech. 

Venture capital played a key role in making HackHer House possible. With financial backing, the house offered subsidized rent, allowing the women to focus on their projects instead of struggling with the Bay Area’s notoriously high living costs.

“New grad students face daunting living expenses, with campus costs reaching the high hundreds to over a thousand dollars a month,” said Li. “In the Bay Area, finding a comfortable room typically starts at $2,000, and while prices may have eased slightly, they remain significantly higher than the rest of the U.S. This reality forces many, including founders, to share rooms or crash on friends’ couches just to make ends meet.” 

Hacker houses aren’t new to the Bay Area or cities like New York and London. These live-in incubators serve as homes and workspaces, offering a collaborative environment where tech founders and innovators can share ideas and resources. In a city renowned for tech advancements, hacker houses are viewed as critical for driving the next wave of innovation. By providing affordable housing and a vibrant community, these spaces enable entrepreneurs to thrive in an otherwise cutthroat and expensive market.

Watch this video to see how Hacker House is shaping the future of women in tech.

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Elon Musk’s X will be allowed back online in Brazil after paying one more fine

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Elon Musk's X will be allowed back online in Brazil after paying one more fine

The Federal Supreme Court (STF) in Brazil suspends Elon Musk’s social network after it fails to comply with orders from Minister Alexandre de Moraes to block accounts of those being investigated by the Brazilian justice system. 

Cris Faga | Nurphoto | Getty Images

X has to pay one last fine before the social network owned by Elon Musk is allowed back online in Brazil, according to a decision out Friday from the country’s top justice, Alexandre de Moraes.

The platform was suspended nationwide at the end of August, a decision upheld by a panel of judges on Sept. 2. Earlier this month, X filed paperwork informing Brazil’s supreme court that it is now in compliance with orders, which it previously defied.

As Brazil’s G1 Globo reported, X must now pay a new fine of 10 million reals (about $2 million) for two additional days of non-compliance with the court’s orders. X’s legal representative in Brazil, Rachel de Oliveira, is also required to pay a fine of 300,000 reals.

The case dates back to April, when de Moraes, the minister of Brazil’s supreme court, known as Supremo Tribunal Federal (STF), initiated a probe into Musk and X over alleged obstruction of justice.

Musk had vowed to defy the court’s orders to take down certain accounts in Brazil. He called the court’s actions “censorship,” and railed online against de Moraes, describing the judge as a “criminal” and encouraging the U.S. to end foreign aid to Brazil.

In mid-August, Musk closed down X offices in Brazil. That left his company without a legal representative in the country, a federal requirement for all tech platforms to do business there.

By Aug. 28, de Moraes’ court threatened a ban and fines if X didn’t appoint a legal representative within 24 hours, and if it didn’t comply with takedown requests for accounts the court said had engaged in plots to dox or harm federal agents, among other things.

Earlier this month, the STF froze the business assets of Musk companies, including both X and satellite internet business Starlink, operating in Brazil. The STF said in court filings that it viewed Starlink parent SpaceX and X as companies that worked together as related parties.

Musk wrote in a post on X at that time that, “Unless the Brazilian government returns the illegally seized property of and SpaceX, we will seek reciprocal seizure of government assets too.”

On August 29, 2024, in Brazil, the Minister of the Supreme Court, STF Minister Alexandre de Moraes, orders the blocking of the accounts of another company, Starlink, of Elon Musk, to guarantee the payment of fines imposed by the STF due to the lack of representatives of X in Brazil. 

Ton Molina | Nurphoto | Getty Images

As head of the STF, de Moraes has long supported federal regulations to rein in hate speech and misinformation online. His views have garnered pushback from tech companies and far-right officials in the country, along with former President Jair Bolsonaro and his supporters.

Bolsonaro is under investigation, suspected of orchestrating a coup in Brazil after losing the 2022 presidential election to current President Luiz Inacio Lula da Silva.

While Musk has called for retribution against de Moraes and Lula, he has worked with and praised Bolsonaro for years. The former president of Brazil authorized SpaceX to deliver satellite internet services commercially in Brazil in 2022.

Musk bills himself as a free speech defender, but his track record suggests otherwise. Under his management, X removed content critical of ruling parties in Turkey and India at the government’s insistence. X agreed to more than 80% of government take-down requests in 2023 over a comparable period the prior year, according to analysis by the tech news site Rest of World.

X faces increased competition in Brazil from social apps like Meta-owned Threads, and Bluesky, which have attracted users during its suspension.

Starlink also faces competition in Brazil from eSpace, a French-American firm that gained permission this year from the National Telecommunications Agency (Anatel) to deliver satellite internet services in the country.

Lukas Darien, an attorney and law professor at Brazil’s Facex University Center, told CNBC that the STF’s enforcement actions against X are likely to change the way large technology companies will view the court.

“There is no change to the law here,” Darien wrote in a message. “But specifically, big tech companies are now aware that the laws will be applied regardless of the size of a business and the magnitude of its reach in the country.”

Musk and representatives for X didn’t immediately respond to a request for comment on Friday.

Late Thursday, X Global Government Affairs posted the following statement:

“X is committed to protecting free speech within the boundaries of the law and we recognize and respect the sovereignty of the countries in which we operate. We believe that the people of Brazil having access to X is essential for a thriving democracy, and we will continue to defend freedom of expression and due process of law through legal processes.”

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OpenAI sees roughly $5 billion loss this year on $3.7 billion in revenue

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OpenAI sees roughly  billion loss this year on .7 billion in revenue

Sam Altman, CEO of OpenAI, at the Hope Global Forums annual meeting in Atlanta on Dec. 11, 2023.

Dustin Chambers | Bloomberg | Getty Images

OpenAI, the creator of ChatGPT, expects about $5 billion in losses on $3.7 billion in revenue this year, CNBC has confirmed.

The company generated $300 million in revenue last month, up 1,700% since the beginning of last year, and expects to bring in $11.6 billion in sales next year, according to a person close to OpenAI who asked not to be named because the numbers are confidential.

The New York Times was first to report on OpenAI’s financials earlier on Friday after viewing company documents. CNBC hasn’t seen the financials.

OpenAI, which is backed by Microsoft, is currently pursuing a funding round that would value the company at more than $150 billion, people familiar with the matter have told CNBC. Thrive Capital is leading the round and plans to invest $1 billion, with Tiger Global planning to join as well.

OpenAI CFO Sarah Friar told investors in an email Thursday that the funding round is oversubscribed and will close by next week. Her note followed a number of key departures, most notably technology chief Mira Murati, who announced the previous day that she was leaving OpenAI after six and a half years.

Also this week, news surfaced that OpenAI’s board is considering plans to restructure the firm to a for-profit business. The company will retain its nonprofit segment as a separate entity, a person familiar with the matter told CNBC. The structure would be more straightforward for investors and make it easier for OpenAI employees to realize liquidity, the source said.

OpenAI’s services have exploded in popularity since the company launched ChatGPT in late 2022. The company sells subscriptions to various tools and licenses its GPT family of large language models, which are powering much of the generative AI boom. Running those models requires a massive investment in Nvidia’s graphics processing units.

The Times, citing an analysis by a financial professional who reviewed OpenAI’s documents, reported that the roughly $5 billion in loses this year are tied to costs for running its services as well as employee salaries and office rent. The costs don’t include equity-based compensation, “among several large expenses not fully explained in the documents,” the paper said.

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