Top News | OpenAI releases GPT-5.6: As expected, OpenAI’s new family of general AI models was released today. The largest, GPT-5.6 Sol, ranks second on the Artificial Analysis ‘intelligence index,’ after Anthropic’s Fable 5 model. GPT-5.6 Terra (the middle child of the new group) ranks right behind Claude Opus 4.8 but ahead of GPT-5.5. Finally, GPT-5.6 Luna (the smallest of the new models) ties with the popular GLM-5.2 model. OpenAI also killed off its agentic browser, unified its desktop experience, and said that its new models are more token-efficient than their predecessors. SpaceX releases Grok 4.5: Not content to sit back and rent out compute, SpaceX’s AI arm and Cursor, which the space launch company is buying, dropped Grok 4.5 yesterday. The new release pushed SpaceX up from the basement in model intelligence rankings close to the top, nearly matching GPT-5.5 on AA’s leaderboard and offering an attractive price-to-intelligence mix. Early usage data implies strong market demand for the new Grok offering. Meta releases Muse Spark 1.1: Meta released a new version of its Muse Spark line of AI models and began offering Muse models via a newly released developer API (still in beta). Meta also put out a new image AI model this week (Muse Image). Muse Spark 1.1 only costs $1.25 per million input tokens and $4.25 per million output tokens. For its ~Opus-level intelligence, that’s cheap, and less than what Grok 4.5 costs. Clearly, after a brief period of stasis, the world's major AI labs are back to fighting one another for AI model dominance and prominence. Great news for startups, who have never had so many strong AI models to choose from, each built and released with an eye towards affordability.
| TWiST 500 | While the major AI labs are busy consuming every column inch and headline in sight, the rest of the TWiST500 is not sitting still. Mercor is a great example. Disclosing that it doubled its gross revenue run rate from $1 billion to $2 billion from the end of 2025 to today, there are few companies in the world growing at a similar pace (or even close). | It’s no major shock, given its recent revenue accretion, that the AI data startup is reportedly considering a new funding round at a $20 billion valuation, double its last price set during its late-2025 Series C. | How is Mercor growing so quickly? Our Wednesday venture capital roundtable dug into why data is back at the forefront of the AI conversation. Summarizing, after consuming the Internet and much of the printed word, AI companies need more fresh, targeted data. That means collecting experts and putting their minds to work on behalf of the companies building synthetic sagacity, precisely what Mercor offers today. | But you have to pay those experts, which means that while Mercor is generating $2 billion in annualized customer spend, most of that money goes right back out the door to its aggregated specialists. But if Mercor can keep 30% of its gross run rate, it’s still operating at a $600 million annualized run rate. Which is a lot, and worth piles to boot. | The broader ‘AI is still hungry for data’ conversation stretches from human minds all the way to internal corporate information and other hard-to-reach data sets; Mercor is serving but a portion of the total AI-driven demand for data, giving it permission to expand inside its vertical over time. (More money won’t hurt!) | Clearly a gusher today, the cynical take on Mercor is that it will eventually complete enough of the human brain→AI model information transfer to cause demand for its services to decline. Perhaps. But with so many major companies vying for the AI crown (see today’s news items), it’s hard to imagine such a slowdown in the near future. Investors agree, hence its possible valuation doubling. Onward, Mercor! — Alex | A message from Squarespace | Turn your idea into a beautiful website! Go to squarespace.com/twist for a free trial. When you’re ready to launch, use offer code TWIST to save 10% off your first purchase of a website or domain. | This Week in Startups | E2309: How many startups matter in tech? Fewer than you think. That’s why venture capitalists are tripping over themselves to get onto their cap tables, no matter the cost. Why? Footwork’s Nikhil Basu Trivedi argues that the Valley has never been more “power-law-pilled” than it is today. Basu Trivedi joined Cendana Capital’s Michael Kim and TWiST’s Alex Wilhelm to go deep on secondary markets, the state of startup M&A, why the SaaSpocalypse may be temporary, and what could trigger a retrenchment of the AI trade. It’s Wednesday, so it’s time for our venture capital roundtable to go deep on how VCs are investing today, and where on the horizon they have their eyes fixed! | E2308: First up, Alex chats with Hanover Park CEO and co-founder Chris Hladczuk about what $100 trillion+ in global assets are being overseen by what he calls “human duct tape.” That is, teams of accountants working in back offices, patching together important data and results from a variety of legacy applications (like QuickBooks and Bill.com) that are essentially holding them hostage. His startup suggests that AI is the answer. PLUS Alex and Lon look back on a classic TWiST chat from March 2020 between Jason and Figma CEO Dylan Field. | E2307: Forget the triple-triple-double-double-double; the new bar for startups hoping to raise venture capital has reached the stratosphere, though our venture panel is worried that startups are focusing too much on today’s problems that may not become companies tomorrow. During a lively VC roundtable, Cowboy’s Aileen Lee, Floodgate’s Mike Maples, and Lerer Hippeau’s Ben Lerer joined Alex to dig into exiting pre-AI startups, rising valuations, token spend, why they are keeping their funds small, and whether the government just tripped OpenAI and Anthropic! | TWiST Partner Offers | Every.io: For all of your incorporation, banking, payroll, benefits, accounting, taxes or other back-office administration needs, visit every.io. Agree.com: Stop chasing invoices and automate your entire contract-to-cash stack. Go to https://agree.com and tell them Jason sent you to get 50% off for life! DigitalOcean: Want to see what building on a true AI-native platform looks like? Head to do.co/twist to start building on DigitalOcean's AI-Native Cloud today — and cut your AI workload costs by up to 50%.
| Subscribe to Us On Your Favorite Podcast Platforms | APPLE PODCASTS | SPOTIFY | SF Live-Work Space Now Available | Need a flexible living and working environment in San Francisco? This thoughtfully designed loft-style residence at 787 Bryant St., the heart of the vibrant SOMA district and the city’s creative hub, is now available for rent or purchase. Check the listing for more details. | The TWiST500 newsletter is the new, updated, and improved TWiST Ticker. | |
|
