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What is it about sleep technology that causes tech investors to dream of immense riches? Eight Sleep, which makes high-tech mattress toppers and is a favorite brand of many tech luminaries, announced Tuesday it had raised $100 million partly to—in all seriousness—“supercharge its AI roadmap”with projects including an “AI Agent for Sleep Optimization.” As AI agents are generally defined as artificial intelligence that undertakes actions on behalf of users, should we assume Eight Sleep’s sleep agent will sleep for you?
Not quite. Eight Sleep says its agent will build on an existing feature, which adjusts its beds based on sleep behavior, by simulating “thousands of digital twins per user, allowing it to predict outcomes through advanced modeling.” That sounds like a lot of fancy marketing words that are hard to take seriously. Still, Eight Sleep has some heavyweight backers—Valor Equity Partners, an existing investor, is putting in more money for this round, along with Founders Fund and others. You have to wonder, though, whether venture capitalists are looking through a skeptical enough lens at companies that claim an AI strategy nowadays. These claims of an AI-powered mattress topper are reminiscent of the flood of internet-enabled toasters we saw a few years ago.
To be sure, Eight Sleep isn’t just jumping on the AI bandwagon. It’s part of a bigger Silicon Valley movement aimed at using tech to improve health—encompassing the effort to combat microplastics, ward off death and prioritize whole, natural foods (more here). The use of tech wearables to track health has the backing of Health Secretary Robert Kennedy Jr., which won’t hurt Eight Sleep’s business. Still, it’s worth remembering that a few mattress-adjacent startups have come to life over the past decade or so, sometimes doing a better job at building a brand name than at creating a sustainable business model. Take Casper, whose executives specialized in adapting Silicon Valley lingo to the humdrum event of catching enough z’s overnight. (A Casper spokesperson told The Information in 2020 it aimed to deliver “better sleep at scale.”) But Casper couldn’t figure out how to make money, and its persistent losses led to a cut-price sale of the company in 2021 (its buyer then ended up selling it a couple of years later).
Is Eight Sleep in that category? After all, it’s a decade old and still raising money. But according to CEO and co-founder Matteo Franceschetti, speaking on The Information’s TITV on Tuesday, the company is profitable and only raised the money because investors offered it. In what might have been a reference to Casper’s history, he noted that “you might have seen other companies struggle” in consumer hardware over the years. But Eight Sleep, he said, has a “very strong balance sheet, with very strong unit economics.” Let’s hope he’s right. We’ll know for sure when it discloses its financial statements ahead of an IPO, which Franceschetti said he plans one day. Until then, let’s hope Eight Sleep investors don’t end up stuck in a nightmare.
A Dig at Elon Musk?
Is Elon Musk rubbing xAI’s star hires the wrong way? Musk has criticized the distinction between AI researchers and engineers as a “false nomenclature,” saying in a July X post that “there are only engineers.” This belief has influenced hiring practices at xAI, where most people building its Grok models are known just as “members of technical staff,” as we noted in this recent story on xAI recruitment.
It appears not everyone agrees with Musk. Igor Babuschkin, a well-known AI researcher and xAI co-founder who left Musk’s company last week, shared an X post on Tuesday simply repeating the word “research” 42 times. His X bio also uses the word, referring to him as “co-founder @xAI, Research & Engineering.”
When Babuschkin announced his departure to focus on his own investment firm, Musk responded amicably, saying, “Thanks for helping build @xAI! We wouldn’t be here without you.” But Babuschkin’s post raises the question of whether that anti-researcher stance may have annoyed him behind the scenes.—Theo Wayt
In Other News
• Databricks, an AI and database provider, said it is raising an undisclosed amount of new funding at a valuation of more than $100 billion, up at least 60% from a financing in December.
• Stock of Intel rallied 7% on Tuesday, even as most other tech stocks slumped, in the wake of news Monday night that SoftBank had signed an agreement to buy $2 billion worth of stock in the company. SoftBank will pay $23 a share, a tad below where Intel stock closed on Monday. But on Tuesday, Intel closed at $25.31.
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