The ‘founder mode’ debate rages on, Nvidia denies getting a subpoena, and more AI and tech news this week

Welcome back to LinkedIn News Tech Stack, which brings you news, insights and trends involving the founders, investors and companies on the cutting edge of technology, by Tech Editor Tanya Dua. You can check out our previous editions here.

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A deep dive into one big theme or news story every week.

Ask how key a hands-on founder is to a startup’s success, and you’re bound to get a plethora of responses.

That’s why when computer scientist, investor and Y Combinator founder Paul Graham raised? the question again and proposed that companies adopt the “founder mode” — hands-on leadership versus business school-style, top-down management — it stirred up a fiery debate across the tech and venture capital ecosystem this week.

While Graham left the definition of what he regards as “founder mode” intentionally vague, he argued that founders should delegate less and be more involved. Those agreeing with his approach cited successful adherents including Apple's Steve Jobs, Nvidia's Jensen Huang and OpenAI's Sam Altman in addition to Airbnb’s Brian Chesky, and offered their own takes on what it means to them.

Yash Belavadi, co-founder and CEO at the startup Surge, said that “founder mode” is driven by a founder’s personal connection to their company’s mission.

“From my experience…I've seen how crucial a founder’s involvement can be in shaping a company's culture and driving its success,” he wrote on LinkedIn. “The founder’s direct connection with the team, and their deep understanding of the product and market, can create a unique dynamic that ‘manager mode’ might not capture.”

For Christian Catalini, the co-founder and chief strategy officer at Lightspark, “founder mode” is about fighting information degradation.

“The problem is not with delegation or managers per se, but with how information degrades as it moves through the organization. What may seem like an invitation to micromanage should, in fact, be viewed as an effort to ‘microlearn’ and make better decisions,” he wrote. “What’s truly scarce is good judgment and decision-making based on the best available information. It is what will make or break a startup.”

Some skeptics asserted that the construct wasn’t a new revelation, while others simply dubbed it a Silicon Valley term for micromanagement, sharing examples of founder-led startups that had lost their way. Others pointed out how visionary CEOs have often benefited from management-oriented deputies, as Jobs did with Tim Cook.

“‘Hire great people and get out of the way’ is bad advice…Whoever was giving this advice to startup founders was giving outdated advice, and apparently the founders lacked the skill and experience to understand the advice was flawed,” wrote former product executive John Cutler. “I think the Paul Graham essay sends all kinds of weird, self-serving and revisionist messages. But if you peel away these layers, it is an indictment of copy-pasting models, and believing something has been figured out.”

To fractional chief product officer Kate Minogue, “founder mode” sounds like an excuse for founders not to trust others, and retain a belief that only they know best.

“For each idol founder we can think of that did this successfully, I am sure we can think of a toxic counterpart we wouldn't wish on anyone,” she wrote.

While former Air Force pilot and SpaceX talent professional Matt Gjertsen shared that he ultimately left the grind of a founder-led company like SpaceX for better work-life balance, he emphasized the need for both founder- and manager-led companies.

“If the U.S. had something like Australia's recently passed #RightToDisconnect law, I am not sure SpaceX could succeed…and the world would be worse for it,” he wrote. “There is room in the world for both managers and founders. Don't let anyone tell you which one is better.”

Others shared a similarly nuanced view. Consultant Dan Guenet said that he largely agreed with Graham — but cautioned that the concept of “founder mode” is prone to misinterpretation. Instead, he proposed an approach to delegate more effectively.

“Delegation is key, and your best employees will leave if you micromanage them. But delegation doesn’t mean you should be in the dark about what’s happening in your company,” he wrote. “As a CEO, you should clearly understand the problems your teams are solving, the methods they’re using and how they’re tracking their progress.”

Instacart CEO Fidji Simo, a former top executive at Meta, reflected on the need for all employees to embody “founder mode,” writing in The Information that assuming only founders can bring this level of intensity, vision and attention to details to the table “would be a big missed opportunity.”

“With the right incentives, founder-led tech companies could become breeding grounds for other founder-mode leaders and CEOs,” she wrote on LinkedIn. “I saw this first hand at Meta, where Zuck made bets on entrepreneurial people and rewarded those of us who brought new products and businesses from 0-to-1, more than he valued team size or other ‘manager mode’ proxies for success.”

Former Google executive and now the CEO of Snowflake, Sridhar Ramaswamy, who’s also been a founder himself, shared that “founder mode” to him means a relentless focus on accountability and transparency.

“To be a high growth company, you need to reinvent constantly for the new reality, and complacency is not an option. To achieve this level of dynamism, accountability and transparency are non-negotiable,” he wrote. “Growth depends on investing in people and providing opportunities. We’ve all reached our positions because someone took a chance on us.”

Nvidia’s Huang also seems to have evolved his approach over time. In a fireside chat with Mayfield Fund’s Navin Chaddha at the #TieCon2024 Conference that I attended in May, Huang shared that he had 60 direct reports — but the way he manages them is very different to the way they manage their teams.

“I'm surrounded by amazing people and they're world-class in their field — they're incredibly talented, excellent managers and require very little management. They achieve incredible results themselves,” he said. “But the way the CEO manages, if you will, should be very different from the way that first-level managers manage new college grads. To apply the same principles makes no sense.”

While each company may lean more toward one approach over the other, there’s no need to put founders and executives in camps, Symphonic Fund’s Sydney Paige Thomas told me. Great leaders need a bit of both, she said.

“There are some things that founders are very instinctively accurate about because of how many hours and the labor of love they put into their company. At the same time, there are some things that managers are probably better at than a founder,” she said. “Both can be true.”

Here’s where we bring you up to speed with the latest advancements from the world of AI.

• Nvidia is denying a report that it received Justice Department subpoenas. The "escalation" of a federal antitrust investigation was initially reported by Bloomberg, which cited anonymous sources. But a company representative said in a statement: "We have inquired with the U.S. Department of Justice and have not been subpoenaed." Nvidia's stock edged lower following the report, after shedding $279 billion in market cap on Tuesday, the biggest one-day decline on record for an American company. Still, investigators are asking questions about Nvidia's "hardware bundling practices" and recent acquisition of Run:AI, Reuters reports, also citing anonymous sources. The government has increased oversight as AI has boomed. And ICYMI, Nvidia last week offered a quarterly forecast that missed investors' high expectations.
• OpenAI ’s co-founder and former chief scientist, Ilya Sutskever , has raised $1 billion for his newly created AI startup, Safe Superintelligence. The funding, from venture capital firms including Andreessen Horowitz and Sequoia Capital, values the three-month-old startup at $5 billion, Reuters reported, citing unnamed sources. The new money will be used to acquire computing power as well as hire researchers and engineers. Sutskever, who departed OpenAI in May, co-founded the new startup in June with the goal of developing AI systems that emphasize research and safety.

• Blackstone ’s $16 billion bet on data centers. A group led by private equity giant Blackstone has reached a deal to buy Australian data-center operator AirTrunk, valuing it at $16.1 billion including debt, in one of the year's biggest digital infrastructure tie-ups. Data centers have risen in demand among investors as the AI boom boosts digital infrastructure needs — and raises environmental alarm bells. AirTrunk , which is owned by Macquarie Group and Canada's Public Sector Pension Investment Board, operates data centers in Australia, Singapore, Hong Kong, Japan and Malaysia. The deal marks Blackstone’s largest in the Asia-Pacific region.
• California cracks down on AI replicas. California is taking action on AI use, with Gov. Gavin Newsom poised to sign a new law requiring consent before dead performers' likenesses can be used in AI-created digital replicas. The main actors' union, SAG-AFTRA, has been vocal in supporting the bill, which mirrors the language in the union's agreement with major Hollywood studios after its costly, high-profile strike last year. Another newly passed California bill sets stricter requirements for the use of AI to replicate living performers; beyond Hollywood, the state is also moving to set standards for AI safety testing.
• Banking, tech firms adopt Llama AI. 高盛 , Amazon Web Services (AWS) and 埃森哲 are among big-name firms currently utilizing Meta's artificial intelligence models, according to the social media giant. The announcement comes as investors increasingly voice concerns about how much Meta and other tech companies are spending on AI development and question the financial returns of the technology. Meta's flagship Llama models are "mostly free of charge" to use — which CEO Mark Zuckerberg argues is the best way to stay competitive with paid alternatives like OpenAI.
• Google rolls out AI tech that 'hears' disease. The tech giant has launched a new AI technology called HeAR, which it says is capable of predicting early signs of disease based on sound. The offering is a bioacoustic foundation model trained on 300 million pieces of audio data from around the world that can detect subtle differences in cough patterns. The AI can be loaded onto a smartphone and could become a critical tool in early detection of diseases, such as tuberculosis, in areas where expensive diagnostic hardware isn't available. Google is also researching a model that uses ultrasound for early breast-cancer detection.

Here’s a list of other notable AI developments from this week:

• Salesforce announced that it’s acquiring AI-powered voice agent developer Tenyx to boost its existing autonomous agent capabilities for customer service scenarios. See Salesforce AI CEO Clara Shih’s LinkedIn post here.
• AI climate-tech startup Entalpic has raised €8.5 million ($9.4 million) in seed funding. See co-founder and CEO Mathieu Galtier ’s LinkedIn post here.
• AI startup Paradigm , which uses generative AI to reimagine spreadsheets, has emerged from stealth and raised $2 million in seed funding. See founder and CEO Anna Monaco ’s LinkedIn post here.
• OpenAI competitor Anthropic on Wednesday rolled out Claude Enterprise, its biggest new-product update since the debut of its chatbot of the same name, tailored toward businesses looking to integrate its AI capabilities. See Anthropic president Daniela Amodei ’s LinkedIn post here.
• The Economist has rolled out a new AI-powered news app called Espresso, which will offer short news updates to students worldwide for free, with AI-generated translations of text and video in French, German, Mandarin and Spanish. See senior editor of AI initiatives Ludwig Siegele ’s LinkedIn post here.

Catch up on the tech headlines you may have missed this week and what our members are saying about them on LinkedIn.

• STARLINK agrees to block X in Brazil. Elon Musk's satellite internet provider, Starlink, will comply with a recent Brazilian court order blocking the Musk-owned social media platform X in the country, Starlink announced late Tuesday. The agreement represents an about-face from Starlink's earlier threat to defy the ban, according to Brazil's telecom regulator, Anatel, which threatened the company with sanctions if it failed to comply. The company has also started pulling its non-Brazilian employees from Brazil and advised its other staff not to travel to the country "for business or personal reasons," The Wall Street Journal reports, citing anonymous sources. Meanwhile, barely two years after dozens of high-profile investors helped Elon Musk buy Twitter (now X), the value of their stakes has tanked by as much as 72%, per a Washington Post analysis. Twitter co-founder Jack Dorsey has lost an estimated $720 million; Oracle co-founder Larry Ellison about the same. All told, Musk and his co-investors are down more than $24 billion.
• 英特尔 may be booted from the Dow. Pressure on Intel’s turnaround efforts is intensifying. Once a pioneer in chipmaking technology, Intel has suffered a shift in fortunes in the AI era — as reflected in its stock price, which has tumbled over 50% this year. As the worst performer in the Dow Jones Industrial Average in 2024, the company is likely to be removed from the price-weighted index. Under CEO Pat Gelsinger, Intel is embarking on cost-cutting measures and mulling restructuring options. It has turned to investment bankers from Morgan Stanley and Goldman Sachs for advice as it tries to "navigate the most difficult period in its 56-year history," Bloomberg reported. Last month, the company announced it would be slashing about 15,000 roles. On Tuesday, it unveiled new chips designed for AI-focused computing.
• Canva users lament its price surge. Users of the graphic design software are lamenting steep price hikes as it integrates an array of AI features into its products — in some cases, by 300% or more. In the U.S., for example, some customers of Canva Teams — a business-focused subscription service — are seeing annual prices rise to $500 from $120. Canva says the new prices reflect the “value of our expanded product experience,” but some users are threatening to abandon the software for rival offerings, complaining that it’s no longer “simple and affordable.”
• Meanwhile, Lyft is making big changes as it looks to boost business and better compete with Uber. The ride-share company is cutting about 1% of its nearly 3,000-person workforce and "deprioritizing" its dockless bike and scooter offerings. Last quarter, Lyft reported record scooter and bike rides in major markets such as New York, where it owns the Citi Bike rental service — but that business is seasonal, executives noted, and the machines are costly to maintain. The company missed on earnings last quarter even as it turned a net profit for the first time. The reorganized bike and scooter business, which will focus on docked options, will be named Lyft Urban Solutions. The company expects to incur about $34 million to $46 million in charges relating to the changes.

Here’s keeping tabs on key executives on the move and other big pivots in the tech industry. Please send me personnel moves within emerging tech.

• OpenAI has elevated its former head of public policy and VP of global affairs Anna Makanju to the newly created role of VP of global impact, she shared on LinkedIn. See Makanju’s post here for more details.
• Cybersecurity company HackerOne has appointed F5 chief product officer Kara Sprague as its new CEO. See outgoing CEO Marten Mickos ’s LinkedIn post here.
• Former Salesforce executive and CEO of Salesforce.org Rob Acker is leaving the company to become the CEO of Hubbl Technologies , he shared in a LinkedIn post.
• Freshworks has hired ServiceNow executive Murali Swaminathan as its new CTO. See Swaminathan's LinkedIn post here for more.

As always, thanks for reading. Please share Tech Stack if you like it! And if you have any news tips, find me on InMail.