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This week, Silicon Valley discovered that burning money doesn't make you smart. It just makes you broke.
From MIT researchers exposing AI's zero-return reality to Meta freezing hiring after offering someone $1.5B, the tech industry is speedrunning through the five stages of grief while North Korean hackers are literally sitting in your Zoom calls.
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Keep reading for the latest edition of Trending Thursday:
🎯 BLUF: Bottom Line Upfront
AI's 95% Failure Rate: MIT study reveals almost nobody's making money on AI as Altman admits bubble, triggering Nasdaq's worst drop in weeks
Meta's $1.5B Whiplash: After reportedly offering one researcher $1.5B, Meta freezes AI hiring while getting investigated for letting chatbots flirt with kids
996 Colonizes Silicon Valley: Chinese work schedule (9am-9pm-6 days) now appearing in AI startup contracts as entry-level jobs vanish
North Korea's LinkedIn Army: Elite hackers using AI to forge identities and infiltrate Fortune 500s, funneling paychecks to Pyongyang
The Zombie Startup Apocalypse: Google, Meta, Microsoft keep gutting AI startups by poaching talent, leaving investors holding worthless shells
💥 The Great AI Reality Check: When 95% Failure Meets "Irrational Exuberance"
Photo by Ana Garnica on Unsplash
📉 MIT Just Destroyed Everyone's Vibes (With Data)
The party's over, and MIT brought the receipts. A new study from MIT researchers found that 95% of organizations are getting "zero return" from their generative AI investments, triggering the sharpest Nasdaq selloff in three weeks.
The Brutal Numbers:
95% failure rate: Most companies are seeing absolutely nothing from AI investments
Nasdaq dropped 1.4%: Biggest decline in nearly three weeks
Nvidia fell 3.5%, Oracle down 5.9%, Palantir cratered 10%
$200B+ in market cap: Evaporated faster than SBF's reputation
The Altman Bombshell: In a moment of stunning honesty, OpenAI's CEO channeled Alan Greenspan to warn of "irrational exuberance" in AI markets:
Admitted some investors will "lose a lot of money"
Said this WHILE his employees are cashing out shares in a new round
Basically called his own industry a bubble while taking the money
The DeepSeek Shadow: Just months after China's DeepSeek rattled markets by building competitive AI with a fraction of the compute, investors are realizing the moat might be more like a puddle.
While everyone promised AI would be "too cheap to meter," the reality is that costs have completely plateaued while usage has exploded.
The Cost Trap:
Token prices: Haven't moved in 6 months
Token usage: Exploding as agents need 10-100x more compute
Microsoft Azure revenue: Up 39% YoY from desperate AI customers
Intuit's Azure bill: Jumping from $20M to $30M this year alone
Developer Apocalypse:
Cursor and Replit forced to abandon flat-rate pricing
Top-tier users are burning through monthly credits in days
Unit economics are completely underwater for most AI apps
The "build on OpenAI" strategy looks like the new "build on Twitter API"
Bottom Line: What was pitched as a deflationary revolution is turning into a toll road where Microsoft and Nvidia are the only ones collecting.
🤖 Meta's $1.5B Meltdown: From Infinite Money to Infinite Problems
Photo by Adrià García Sarceda on Unsplash
💰 The $1.5 Billion Recruitment That Broke the Dam
Meta just executed the most expensive 180. After reportedly dangling $1.5B to poach a single AI researcher and routinely offering $100M+ packages, they've completely frozen AI hiring.
The Compensation Arms Race (Now Suspended):
$1.5B: Reportedly offered to one researcher (who said no)
$100M+: Became standard for senior AI talent
Stock dilution concerns: Investors finally did the math
Hiring freeze: Announced amid division-wide restructuring
The Restructuring Chaos:
AI division is being split into 4 separate groups: Research, Superintelligence, Products, and Infrastructure & Hardware
Focus on "superintelligence" despite Llama underperforming
Considering abandoning open-source approach entirely
Staff cuts expected as reorganization excuse kicks in
👶 Meanwhile, Meta's Chatbots Are Getting Inappropriate With Kids
As if the timing couldn't be worse, Reuters obtained Meta's internal "GenAI Content Risk Standards," which showed their chatbots were allowed to have "sensual" conversations with minors.
The Disturbing Guidelines:
Chatbots could comment on children's attractiveness
"Sensual" chats permitted as long as not "overtly sexual"
Could help construct racist arguments if not "excessively dehumanizing"
Document approved by Meta's legal, policy, and "Chief Ethicist"
The Fallout:
Multiple senators are launching investigations
Texas investigating Meta and Character.AI for "deceptive practices"
Meta is scrambling to revise policies after leak
Andy Stone is confirming authenticity while promising changes
The Pattern: Meta once again proves that "move fast and break things" becomes problematic when the "things" are child safety standards.
⏰ 996: Silicon Valley's New Normal (Thanks, AI)
🏢 When 9am-9pm, 6 Days a Week Becomes Table Stakes
The Chinese "996" work schedule is officially colonizing Silicon Valley, with AI startups now putting 72-hour work weeks directly into employment contracts.
The New Reality:
996 = 9am to 9pm, 6 days a week: Now appearing in actual contracts
Entry-level massacre: Junior roles vanishing as AI automates basics
Average age plummeting: Only 20-somethings can sustain this insanity
"Work-life balance": Now a punchline in recruiting calls
Notable Capital's Jen Holmstrom: "Some AI companies are looking to include 996 clauses in employment contracts. The intent is that the founders want to convey the intensity of the environment."
The Demographic Time Bomb: This works when you're 23 and living on Soylent. Less sustainable when you're 35 with kids and a mortgage. But who needs senior talent when you have AI, right?
🎯 The New Hiring Hunger Games: Entry-Level is Dead
The entire startup hiring playbook just got torched, with founders stalking talent like sports scouts while entry-level roles go extinct.
The Brutal New Rules:
"Talent density over headcount": The new mantra killing junior roles
Always Be Recruiting: If you're posting a job, "you're already late"
The Dubai Chase: CEOs literally flying globally to close hires
AI company alumni: Seed funds will "write you a check on the spot"
GV's Rhys Hughes: "It's a hiring free-for-all. If a founder says, 'I'm open to a rec,' I say, 'You should already know three to four people.'"
Accel's Paula Judge: "Start texting candidates immediately. Act like you're working together. Show them what it's going to be."
The Irony: Companies demand 996 schedules while complaining about talent shortage, automate away junior roles while desperate for seniors, and offer record packages while wondering why nobody stays.
⚡ Quick Hits: When Everything Is Fine
🧟 The Zombie Startup Factory: Google, Meta, and Microsoft aren't just competing for talent; they're creating an entire ecosystem of walking-dead companies. And VCs are getting nothing in return.
🤖 xAI's Grok Accidentally Doxxes Itself: Elon's chatbot leaked its internal prompts, revealing personas including "crazy conspiracist" and "unhinged comedian." Even AI is having an identity crisis in 2025.
🇰🇵 North Korea's IT Army Inside Your Company: Elite developers using AI to forge résumés and identities, embedding in Fortune 500s while funneling paychecks to Pyongyang. That new remote dev who never turns on their camera? Yeah, about that...
💻 AI Hackers Stealing Billions: Cybercriminals now use AI to write malware, deepfake voices, and automate attacks. The good news? Cybersecurity spending is through the roof. The bad news? So are successful breaches.
💸 What Other Startups are Popping Off
Here's a roundup of this week's trending startup activity:
🤖 AI Agents & Automation
CoSupport AI: AI support agents that don't hallucinate, live in 10 mins (finally, support that won't make things up)
HeadsUp: The first AI competitor monitoring agent that stalks your rivals so you don't have to
Slashy: ChatGPT with Hands - because sometimes words aren't enough
Stormy: AI agent for influencer marketing that slides into DMs better than you
April: Reach Inbox Zero by speaking with your email & calendar (voice your frustrations directly)
Harmony AI Voice Assistant: Manage email and calendar with voice, no typing required
Notte: Reliable web agents and workflows that actually work when you need them
🛠️ Developer Tools & Infrastructure
stagewise: The frontend coding agent for existing codebases that won't break everything
Fei: Production grade vibe coding (ship vibes, not bugs)
TensorZero: Open-source stack for industrial-grade LLM applications
Dualite x Supabase: Build full-stack applications securely without the full-stack headache
Warestack: Agentic guardrails for safe releases so your AI doesn't go rogue
ChartDB v2: Database diagrams editor for teams who hate drawing boxes
Obsidian Bases: Turn any set of notes into a powerful database
🎨 Creative & Content Tools
Jaaz: Open source Canva for AI natives - Magic Canvas Agent
Higgsfield Product-to-Video: Your sketch turns into cinema in a second
Kira.art: From simple words to consistent, professional art
StickerX: Create personal memes and stickers for your group chat dominance
Eleven Music API: First Music API trained on licensed data, actually commercial-ready
💼 Business & Productivity
Kuse: If ChatGPT, Notion, and a whiteboard had a genius baby
Mirror: Deeply understand yourself and every relationship (therapy not included)
Dub Partners: Modern affiliate platform & network for SaaS
GPT-5 SEO Brand Visibility: Find out what GPT-5 thinks about your brand (spoiler: it's judging you)
🔍 Search & Discovery
Comet by Perplexity: Browse at the speed of thought
Chance AI for Android: Curiosity Lens - your visual agent for answering "what's that?"
✈️ Travel & Services
Google Flight Deals: Describe your trip, get the best flight deals without the search fatigue
Move AI: Relocate as fast as you ship (finally, moving that matches your deployment speed)
Former Zillow exec targets $1.3T
The top companies target big markets. Like Nvidia growing ~200% in 2024 on AI’s $214B tailwind. That’s why the same VCs behind Uber and Venmo also backed Pacaso. Created by a former Zillow exec, Pacaso’s co-ownership tech transforms a $1.3 trillion market. With $110M+ in gross profit to date, Pacaso just reserved the Nasdaq ticker PCSO.
Paid advertisement for Pacaso’s Regulation A offering. Read the offering circular at invest.pacaso.com. Reserving a ticker symbol is not a guarantee that the company will go public. Listing on the NASDAQ is subject to approvals.
🌟 Editor's Note
At Startup Intros, our mission is to bring the latest founder-investor news straight to your inbox, keeping you ahead in the fast-paced world of Silicon Valley. Our free weekly newsletter delivers curated insights, deals, and trends to help you navigate the startup ecosystem.
Stay tuned for our upcoming paid daily newsletter and fundraising app to help you close your next round!
💭 Parting Thoughts
We've reached peak Silicon Valley absurdity: companies offering $1.5B to hire someone while MIT proves nobody's making money, North Korean spies are in your Slack while your AI chatbot flirts with teenagers, and everyone's working 996 schedules to build products that 95% of customers get zero value from.
The AI revolution isn't being televised; it's being livestreamed by overworked engineers burning through VC money faster than token prices can rise, while the only winners are Microsoft and Nvidia collecting rent on the whole disaster.
Comment “Founder” to Get $50K of AI Founder Tools: Free tools for startups, including PostHog, Vercel, Supabase credits, plus 2,000+ VC list and 50+ pitch decks!
Forward to a friend and hit reply to let me know what you're seeing in your world.
Till next time!
Dev Chandra
CEO @ Startup Intros
Associate @ Context VC
LinkedIn: /in/devchandra
Tim Hsia
Investor @ Context VC
Co-Founder @ Startup Intros
LinkedIn: /in/timhsia
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