This Week in Startups
00:35:35 · Hon Weng Chong
[00:35:35] S3: Well, we actually do use human neurons now. Alongside mouse neurons, human neurons is the other really big area of research because that's where a lot of the biomedical stuff happens, where we're looking for new drugs, understanding disease models and so forth. We stand at the shoulder of giants and so we use a lot of the techniques that have been developed by the, what you call the synthetic biology, the biological engineering field to grow stem cells obtained from adult cells. So if we went back about ten years ago, in Japan, there was a researcher by the name of Yamakana. Professor Yamakana won the Nobel Prize, I think a few years back for discovery of inducible pluripotent stem cells. And what he discovered was that if you took anybody's cells, your cells, my cells, skin or blood, anything that would have nuclei, and you expose them to four compounds, you can actually reverse the clock back of these cells where they go from a blood cell or a skin cell back into a naive state... Stem cell that can then become... Turn into anything. We utilize that functionality essentially grow human neurons from stem cells. So this way we don't kill any animals, it's continuously renewable as long as you provide the right conditions. And yeah, how we do it now at Cortical Labs because, you know, we we don't really particularly like killing the mice as well, and so we think that it's actually
00:37:09 · Alex Wilhelm, Hon Weng Chong
[00:37:09] S1: easy Absolutely brutal. No. I'm totally in favor of that. I I think there's going to come in time some some questions that appear ethically interesting with what you guys are building, but I'm also of the opinion that they're not actually going to be ethically serious. I think they're going to be mostly good for not making fun of the media in my industry, but, like, great for a headline, but less dicey in practice. So I'm Yep. I... I'm very bullish on the company. Just before I I let you go, how has demand been for the CL one? I know you guys have a form up. I know you guys are working on deliveries. Has demand exceeded expectations? Is it about what you thought? Just where's the business side of things going? [00:37:48] S3: Yeah. Demand has actually far exceeded what we we we had expected. Suffice to say, we are now struggling to try to figure out our logistics and supply chain to balance supply and demand. We've had a lot of signups, particularly for the cortical cloud, I think over 3,000 sign ups. We have no ability to service more than 20 or 30 people on the cloud system. [00:38:21] S1: So you have 100x more demand
00:38:21 · Alex Wilhelm, Hon Weng Chong
[00:38:21] S1: So you have 100x more demand [00:38:23] S3: We have than 100x, yeah. And so they're on the waiting list and so forth. And then, you know, for the hardware, we have had a lot of labs and research groups reach out to us. We are, you know, very excited about this, but now we're looking at the challenge of, oh God, now we actually have to ship this thing and we'd have to ship lots of them. And if they break in the field, we're kind of screwed. So we better make sure they don't break out there. So there's a lot of like, we're doing our best at the moment to finalize the software, finalize the hardware, getting our partners ready. It's also very, very expensive CapEx wise, right? Because we have to, we don't charge our customers until we ship them, but we still have to build the units first. And so trying to figure out where the next source of funding is gonna come from is going to be a bit of a challenge. [00:39:11] S1: Han, why don't I just charge them half upfront and resolve some of your cash flow issues? [00:39:15] S3: Well, we could, but you know, it's... [00:39:18] S1: Do it. [00:39:18] S3: Yeah, we could do that. But you know, I I I think for us, we we wanna make sure that, you know, we we... I don't wanna do a Kickstarter kind of thing. Right? At the start of
00:39:18 · Hon Weng Chong, Alex Wilhelm
[00:39:18] S3: Yeah, we could do that. But you know, I I I think for us, we we wanna make sure that, you know, we we... I don't wanna do a Kickstarter kind of thing. Right? At the start of [00:39:28] S1: the I don't I don't think that's I don't think that's Kickstarter ish, but I I respect where you're at. I guess then the the correct question to close with is this. Sometimes people say that venture capital is a little bit conservative. I think the VCs that bet on cortical were clearly being relatively adventurous, which is good. So as you guys do need more, capital, is the venture capital ecosystem in Australia, Europe, and the West at large? Is it interested in putting more money into the business, or are you guys still a little bit outside of what you might call it venture norms? [00:39:58] S3: Yeah. I think we're outside the venture norms. I don't know what it is, but the venture industry likes to gravitate to thematics. So in this case it's been, what is it? We went from transformer LLMs to agents and something whatever next year brings. It's very hard, I think, unless you fall into specific thematics to track that. So, you know, I think we have some of the best investors in the world backing us because they're just the ones who are willing to take bets, which is essentially what the industry initially started out with. Right? [00:40:34] S1: Blackbird Ventures and Horizons Ventures.
00:40:37 · Hon Weng Chong
[00:40:37] S3: Correct. Yeah. And we've had a new round that was just put together to get us a little bit more fuel to deliver our products by kind of people like 3C AGI, they've just come into the game. And we've had players like in Q Tel as well who had backed us. It's really about, I think trying to figure out who are the Mavericks in the space, who are the ones who have the imagination, right? And the sci fi background. Because at the end of the day, if you have 200, like maybe not 200, maybe like say even 10 foundational model companies, but they're all pretty much... I couldn't really tell you the difference between Claude versus Gemini versus ChachiBT versus, I don't know, what about Quen or Deep Sea? They are mostly the same. And so if they're all mostly the same and I can jump between one another, I don't really see any, you know, significant stickiness or moat to it. So anyway, that's a problem that the VC's do to resolve. But, rather than all jumping in into one space, I think we should try to spread it out. So for us, we're very focused on delivering the product and we welcome anyone who's interested, who's listening to your podcast, who understands the fundamental nature of building hardware first before you can get the software, you know, to to to look into the space. Because the the thing as as we already talked about, the AI space already had that groundwork put in by the gamers. Right? You didn't... We didn't need to invest in the hardware because the gamers just bought it already. So I think that's something that we have to bear in mind with any new compute space. There is always gonna be a hardware component, and we we we shouldn't shy away from having to, invest in... And build into that space.
00:42:18 · Alex Wilhelm, Hon Weng Chong
[00:42:18] S1: Well, I do I do look forward to the eventual future when we have Canva in Sydney, and we have Cortical in Melbourne, and we'll have a good old fashioned competition about who's gonna be the next future leader of Australian technology. Han, thank you so much for coming on. Thank you for answering all of my questions. And, when you do have so much extra production capacity, I'll give you my address to ship my CL one, and you just tell me where to send the check. Okay? [00:42:40] S3: Alright. Thanks, Alex.