• D.C.
  • BXL
  • Lagos
  • Dubai
  • Beijing
  • SG
rotating globe
  • D.C.
  • BXL
  • Lagos
Semafor Logo
  • Dubai
  • Beijing
  • SG

In today’s edition, a look at how hope is emerging in the tech sector that SVB may survive in some f͏‌  ͏‌  ͏‌  ͏‌  ͏‌  ͏‌ 
cloudy San Francisco
cloudy Taipei
cloudy Beijing
rotating globe
March 17, 2023


Sign up for our free newsletters
Reed Albergotti
Reed Albergotti

Hi, and welcome to Semafor Tech, a twice-weekly newsletter from Louise Matsakis and me that gives an inside look at the struggle for the future of the tech industry. I can’t believe Monday was only five days ago. With the collapse of Silicon Valley Bank last week, a rescue by the U.S. government, and the near collapse of First Republic, there hasn’t been this much uncertainty in the tech industry since 2008.

It’s also been a week of hot takes from just about every corner of the political spectrum. I decided to go a different direction. I asked people what SVB meant to them and I heard some stories that I think illustrate why this bank held a tight grip on the industry for 40 years. And it’s also why people hope it can make a comeback.

Amid the turmoil, there were a myriad of major announcements from artificial intelligence companies, the two biggest of which were OpenAI’s unveiling of its most advanced, publicly released large language model, GPT-4, and Microsoft’s integration of the technology into Office 365. More on that below.

Are you enjoying Semafor Tech? Help us spread the word!

Move Fast/Break Things

➚ MOVE FAST: Getting hooked up. JPMorgan, Citigroup, and nine other U.S. banks set up First Republic with a $30 billion rescue. Investors were still unhappy that the struggling lender suspended its dividend, but the lifeline could bolster confidence in the banking system, which is also good for the tech sector.

➘ BREAK THINGS: Getting broken up. Chinese tech giant ByteDance is again facing the possibility that it will have to sell its best known asset, TikTok, because of U.S. national security concerns. But Beijing has been critical of similar past efforts and it’s unclear whether any deal will happen.

Semafor Stat

The amount Peter Thiel said he had in Silicon Valley Bank when it was taken over by the Federal Deposit Insurance Corp. He was blamed by some venture capitalists for spreading panic about the lender that led to deposit withdrawals before it collapsed.

Reed Albergotti

Silicon Valley Bank is dead, long live SVB?


Reuters/Brittany Hosea-Small

Since the collapse of Silicon Valley Bank a week ago, hope is starting to emerge in the tech industry that some version of it may survive, even under new ownership.

On LinkedIn, employees at SVB posted optimistic attestations that the bank is still operating, more or less the same way it was before, under its new structure. The rosy outlook that it may live on could be unrealistic given the bank’s reputational hit but it shows how much the lender became ingrained in the industry.

The Federal Deposit Insurance Corp. took over the bank last week and is in the process of trying to sell it. Initially, the agency asked SVB staff to stay on for 45 days, receiving 1.5 times their salary, to help continue operations as the lender is sold.

Now employees are hoping that the new entity, Silicon Valley Bridge Bank, could eventually survive as a reincarnated version of the original bank, with many of the same people continuing their relationships with venture capitalists and entrepreneurs.

“VCs are beginning to recognize this value and conversations are shifting to focus on preservation of an ecosystem and how we can realistically come together as a community to make that happen,” wrote Jennifer Morton, a vice president at the bank.

Adam Millsom, a marketing manager at the firm wrote: “There are 7k+ folks like myself, whose equity/retention has been wiped out, that are still working their asses off. The tech ecosystem is better with our Team of bankers at SVB intact and that’s what we are trying to do right now. If you agree, we do need your help. This is not an obit, this is a call to action:”

Responses to the posts include some supportive messages from clients. “An innovation ecosystem without SVBB is unimaginable,” wrote Ram Reddy, CEO of a market research firm in San Jose.

Adam Struck, founder and managing director of Struck Capital, said Friday that he had opened new accounts at other institutions after SVB collapsed, but that he has decided to keep funds at Silicon Valley Bridge Bank. “We feel safe right now and want SVBB to find its footing,” he said.

On Thursday, financial tech startup Brex announced it was moving $200 million of its own corporate funds from big banks to an SVB bridge bank, which was created by the Federal Deposit Insurance Corp. to continue operations as regulators oversee its sale.

“Silicon Valley Bank understands the unique needs and nuances of the startup community and has played an important role in driving innovation for the last 40 years,” said Brex co-founder and co-CEO Henrique Dubugras in a statement. “With the unlimited FDIC insurance backstop and the criticality of the Bank to the technology ecosystem, we believe it’s safe and wise to deposit part of our funds to SVB as part of a diversification strategy.”

The lender is emphasizing that not only are current deposits safe there, so are new ones, as Semafor reported earlier. That could help preserve SVB’s franchise value to make it more attractive to buyers, who could opt to keep the bank’s name in some form.

“This means SVB is effectively US Gov bank and nowhere is safer right now,” wrote Greg Martin, co-founder and CEO of Ghost Security. “You might be surprised to find out how many top tier VCs and startups are also supporting keeping 50% with SVB.”

Still other firms, like JPMorgan, are looking to capitalize on SVB’s problems and expand its client base in the tech sector. But whether they can play the expansive role that Silicon Valley Bank had in the industry is unclear.


If SVB manages to survive — and that remains a big if — it will likely have a lot to do with the goodwill it has built up over the years. It’s probably also because the people who work there have the never-say-die startup ethos flowing through their veins

You can’t understand the bank without understanding the technology startup ecosystem, where the flow of ideas is more important than the flow of capital. Those who ran the lender figured out decades ago that to become the bank of the tech industry, it had to become part of the flow of ideas.

It became the industry’s party planner. The majority of SVB-sponsored events were not lavish. They were valuable. The bank knew how to put the right people together in the same place at the same time to spark creativity and new relationships.

When those people created companies, they were more likely to choose SVB as their bank. And when they became SVB customers, the lender kept in touch, facilitating helpful introductions and sponsoring company events, continuing the cycle of new ideas and new conversations.

Todd Krueger was a loyal customer at Silicon Valley Bank for a period that spanned 20 years, ever since his former company was saved by the firm. It gave him a loan that gave him crucial runway after an investor’s office was destroyed in the World Trade Center on Sept. 11, 2001.

It’s one of countless stories that show how SVB became such an important part of the tech industry, especially for startups. Krueger, now President and CEO at AOBiome Therapeutics, says the bank has been a resource that goes well beyond financing.

The lender introduced him to important connections in the life sciences industry and the events sponsored by the firm have been invaluable. “You could have started a company just by hanging around one of these events,” he said. “They are a hub of which I am a spoke.”


Many startups grew up with SVB. Venky Harinarayan was fresh out of Stanford in 1996 when he co-founded Junglee, a comparison shopping company. The company had opened a small bank account with SVB because there weren’t any other options for a startup at that time, he said.

The next week, Harinarayan’s co-founder called him into the office and introduced him to Bill Biggerstaff, the co-founder of SVB.

Biggerstaff thanked the pair for opening the account and chatted about Junglee for 45 minutes. Biggerstaff would visit the office three or four times over the next couple of years, Harinarayan said, before Junglee was acquired by Amazon for $250 million.

Harinarayan went on to work closely with Jeff Bezos, building Amazon’s third-party marketplace, which now makes up the biggest source of revenue for the company.

“He was always trying to help us,” Harinarayan said of Biggerstaff. “That was, for me, pretty remarkable. We were really just a nothing startup.”

He now runs a venture capital firm, Rocketship.vc.


Brian Merchant of the LA Times sees the bank not as an aid to startups, but an enabler of a broken system: “If SVB was vulnerable to a rapid run-up in interest rates, it’s because it catered to an industry where showering unproven companies with cash is the norm, with venture capitalists competing among themselves to see who can make it rain the hardest. It’s an inherently haphazard system, one that breeds recklessness right into its foundation.”


  • If there was anything shady going on behind the scenes at SVB, hopefully we’ll learn about it. The U.S. Department of Justice has set its sights on the case, The Wall Street Journal reported, and will be pouring through documents and interviewing witnesses.


On Thursday, Microsoft announced it was integrating artificial intelligence technology into its suite of Office 365 products that dominate the business software industry. The new features allow Office users to bypass the sometimes byzantine menu options and simply type, using natural language, what they want to accomplish.

Jared Spataro, Microsoft’s corporate vice president for modern work and business applications, told Semafor it became clear that the product demonstrations shown off yesterday are just the beginning of what the company is planning in the future. Below is an edited excerpt of our conversation.

— Reed

Q: Is this for the power user or is it for the everyday user of Microsoft products, like my wife?

A: They are so powerful that almost no person on the planet uses all of the capabilities. This is actually meant to turn your wife into a power user over time. There’s way more that she could use in Word, if she understood how to use it, that would be really valuable for her. And that’s what this is going to do, put all of that power at her disposal through natural language.

Q: What went into creating this? Did you have to find people who know every nook and cranny of Office products to train it?

A: Over the last couple of years, we’ve created a language called ODSL. And that’s when we realized, we’ve got something. That language allows us to command all of the features of the apps. There was this moment that happened a couple of months ago where we hooked up the large language model.

The ODSL library, through co-pilot and the large language model itself, figured out what was happening with those commands and started to command the apps in an intelligible way.

Q: Do people worry about all of their data getting ingested into this system?

A: Yeah, that’s the first question you get asked. Are you training the LLMs based on my data? And the answer is no.

Q: You don’t use the data to train, but does it kind of learn your habits?

A: It doesn’t yet. What it does today is a process called grounding. What that means is that it queries your raw data: Calendar items, documents, those types of things. We package that up and send it as part of the prompt to the LLM. So we basically say, as you answer Reed’s question, please refer to the following so that you can answer with more accuracy. That’s how it learns about your work.

Over time, the co-pilot itself will actually start to learn your style. This is how Reed talks, this is how Jared speaks, this is what he likes to do.

Q: Is that because you’re still working on the technology?

A: Absolutely. Over time, co-pilot’s literally gonna become an assisted technology that understands your work, your habits, your tone, etc.

Q: Is Excel more challenging?

A: There is some challenge because you need it to calculate correctly. You don’t want the LLM to be making the calculations. You want Excel through its commands to make the calculations. So there is work in the co-pilot as we hook it up to ensure that there’s a division of labor.

Q: It sounds like you’re almost just scratching the surface here.

A: We’re just getting started, and this is where the co-creation will start with our customers. We’ll be in the trenches with them using this and really seeing what it can do for those business customers.

Q: With natural language commands, you could see the interface becoming simplified, almost like Google apps. Do you think you could start competing for the Google customer?

A: It allows us to not depend on things like a ribbon [the set of toolbars at the top of a Word or Excel file] and a set of commands. Up to this point, the biggest constraint for us has been you have to put a button there for people to be able to use it. The way these apps look and behave, it certainly will change user expectations and the patterns that they use. I’m not yet ready to predict exactly what that will look like.

China Window

Chinese search giant Baidu unveiled its competitor to ChatGPT in Beijing on Thursday, providing the first glimpse of how generative AI could disrupt the world’s largest consumer technology market. While “Ernie Bot” looks a lot like the tools debuted recently by Google and Microsoft, there was one big difference with Baidu’s press conference: The company chose not to do a live demonstration, relying instead on a prerecorded video of Ernie’s capabilities.

There are a few different reasons Baidu may have gone that route. Both Google and Microsoft’s bots provided inaccurate answers during their live demos, a possibility Baidu may have decided it was better to avoid.

But it’s also likely that Ernie wasn’t ready for primetime.The bot was still struggling with basic functions earlier this month and Baidu’s engineers were scrambling to fix it, The Wall Street Journal reported. Baidu CEO Robin Li hasn’t announced a timeline for when the public can start using Ernie Bot.


Baidu's Robin Li
One Good Text

Sean Behr is the CEO of Fountain, a digital platform for hiring hourly workers.


Unsplash/Charles Deluvio

Controversial online porn company MindGeek, owner of PornHub, was acquired by Ethical Capital Partners, a Canadian private equity firm. The ironically named firm will inherit lawsuits accusing PornHub of hosting content that exploits children and other problematic material.


Beta Technologies

Electric plane manufacturer BETA Technologies announced a slew of accomplishments earlier this week, including flying its battery-powered plane close to 400 miles. That may not sound very far for an airplane, but there’s another way of looking at it. It turns out, just like cars, a lot of airplane flights are over short distances.

Big shipment companies like UPS have small planes making near constant trips on shorter routes. BETA, which announced it is seeking U.S. approval for its plane, believes it can reduce costs for those shipping companies with a plane that requires less maintenance and no fuel. And that could make a dent in greenhouse emissions.

BETA is also making a vertical takeoff and landing vehicle, but in a sense, regular planes that require a runway are more exciting because they can make an immediate impact.

How Are We Doing?

Are you enjoying Semafor Tech? The more people read us, the better we’ll get. So please share it with your family, friends and colleagues to get those network effects rolling.

And hey, we can’t inform you on what’s happening in tech from inside your spam folder. Be sure to add reed.albergotti@semafor.com (you can always reach me by replying to these emails) and lmatsakis@semafor.com to your contacts. In Gmail, drag this newsletter over to your ‘Primary’ tab.

Thanks for reading.

Want more Semafor? Explore all our newsletters at semafor.com/newsletters

— Reed and Louise