Tech
VC-backed startups commit more fraud, and researchers think they know why
A new report from the U.K.’s Imperial College and France’s Emlyon Business School has mapped out the ways Silicon Valley’s VC-backed founders commit fraud — and the role investors play.
For the report, published online in June, researchers built a database of tech founders and companies who faced civil and criminal securities fraud prosecutions from the SEC and DOJ between 2000 and 2023.
Some famous cases of tech founders being convicted of fraud over the past few years include Frank’s Charlie Javice, Kalder’s Gökçe Güven, Terraform Labs’ Do Kwon, and GameOn’s Alexander and Valerie Lau Beckman.
All over X, the tech industry’s social network of choice, the topic of fraud and its gentler word “scam” are discussed, as people debate the limits of ambition and success. “Fraud is much more common and normalized in the startup world than we are ready to admit and accept,” Tim Weiss, one of the authors of the report, told TechCrunch.
He pointed to another report from the University of Toronto (UT), also published in June, that looked at 654 fraud cases against U.S. VC-backed startups from 2000 to 2023. It found that fraud is rare overall but that companies with venture funding were more likely to face fraud charges compared to companies that didn’t take venture funding. It found that startups launched during overheated markets with weak oversight and investor due diligence are 19% more likely to later commit fraud.
“The problem here is not just the founders but also those that set and reinforce, at times unreasonable, expectations of high growth,” Weiss said. He added that the current frothy AI startup environment is exactly the kind of conditions that tempt founders into fraud.
Weiss’ paper, co-authored with Emlyon researcher Nevena Radoynovska, discusses what may happen when founders face a gap between how investors want their startups to perform and how they are actually performing. They may turn to “façading,” as the paper calls it, in three increasingly dishonest stages: surface, reinforced, and deep.
Surface façading is when founders lie about how successful the company is or is becoming. It’s common during the early stages of a company when it’s pitching its vision to investors. It’s a level of dishonesty higher than just pitching an aspirational vision or an astronomical total addressable market.
After the surface façade, the founder may move into “reinforced façading,” according to the paper, which involves creating fake evidence to back up the lies told.
The paper gave the example of a mobile testing app that created fake customer contracts and invoices, recorded fake revenue, and used those fake documents to convince VCs to back it at a unicorn valuation.
From there founders may enter “deep façading,” where they extend their lies to areas like making their tech seem more capable than it is, complete with fake demos. This involves entire “parallel realities” built on lies, Weiss said.
But investors aren’t always hapless victims, the researchers found. Beyond the outsized growth expectations that push founders toward fraud in the first place, some investors unwittingly “co-create fraud,” Weiss said, by continuing to back founders—sometimes the very same ones— who’ve previously been accused of fraud, thereby normalizing it to a certain extent.
In fact, the UT report found little evidence that alleged fraud prevents founders from raising funding for new startups, even when those fraud cases received major media attention.
“New investors and the broader VC market do not penalize past misconduct,” the UT report said, which is “also consistent with the Silicon Valley culture that embraces failure regardless of the cause.”
The study also found that startups whose boards were controlled by the founders were twice as likely to commit fraud compared to those with investor-controlled or shared-controlled boards.
Even more interesting, it reported that after VC-backed startups go public, they are more likely to face securities class-action lawsuits within two years compared with private equity-backed companies that go public.
The fact that companies are staying private longer also contributes. Public companies undergo more scrutiny than private ones. “Founders do not have a professional body or association that could govern or enforce rules of entrepreneurial and investor conduct on how to be a good founder and what reasonable growth expectations are,” Weiss said.
Weiss proposes that the SEC routinely investigate and conduct formal audits on startups after they hit a large “investment threshold.” Currently, the SEC typically waits for something like a whistleblower complaint or a lawsuit from investors or former employees to trigger an investigation.
Weiss’ paper also suggests that investors should take more accountability when pushing founders to hit extreme growth metrics.
“Investors should be held liable for corporate governance failures and violating their fiduciary duties,” he said. He wants to see more research into “entrepreneur-investor dynamics” that could help prevent fraud and also “balance the overemphasis on the entrepreneur as the sole perpetrator of wrongdoing.”
Fraud is rarely a solo act, in other words, and until investors are held to account for the pressure they exert, founders will likely keep facing the temptation to fake it until they make it.
This piece was updated.
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Tech
Samsung expects memory shortage to worsen through 2027 and last until 2028
The ongoing shortage of RAM chips is not only expected to persist into the next year, but will likely intensify in 2027, with tight supply conditions lasting until at least 2028, according to Samsung, which manufactures and supplies roughly a third of the world’s memory chips.
Samsung said in its Q2 earnings call that frontier AI labs, desperate to obtain access to memory infrastructure, have been “sharing their medium- to long-term demand forecasts” directly with the Korean tech giant to secure future supply.
The high demand enables Samsung to prioritize customers willing to sign long-term contracts. This multi-year visibility will allow the company to install equipment and ramp up production without worrying that demand will dry up, helping it avoid the memory industry’s historical boom-and-bust cycles.
Memory shortages driven by the AI boom have also pushed up chip prices in recent months. This has been a double-edged sword for Samsung: While sales at its semiconductor unit hit an all-time high in Q2, profitability in its smartphone and TV divisions shrank, as the higher-priced chips drove up component costs.
Samsung has even started passing some of those increasing component costs on to consumers by increasing the prices of its Galaxy smartphones and tablets. However, as a result, demand for these devices has dropped.
The memory shortage, informally dubbed “the RAMaggedon,” has also forced Apple, Samsung’s archrival, to raise the prices of its MacBooks, Macs, and iPads last month. On its latest earnings call, Apple warned that revenue growth for the upcoming quarter is projected to slow to between 9% and 11% year-over-year, down from its recent 16% quarterly growth rate.
With memory manufacturers shifting production capacity toward AI data centers and away from consumer electronics, consumers are facing a new reality: higher device prices. Nvidia is expected to raise its consumer graphics card prices by 20% to 30%, which may further drive up prices of gaming devices, desktop computers, consoles, laptops, and the like.
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Tech
GM and Ford are talking less and less about EVs
Just a few short years ago, General Motors and Ford were all in on electric vehicles, spending billions of dollars on those efforts. Now the two biggest American automakers are hardly talking about EVs with their investors.
TechCrunch teamed up with Hudson Labs, a New York-based financial research firm, to analyze the last seven years of GM and Ford quarterly earnings calls and found that both companies are talking about EVs at a lower rate than they did before the pandemic.
This shouldn’t shock anyone who’s followed the news over the last two years. Both companies have altered, delayed, or outright abandoned plans for new EV models, prompting layoffs and scaled-back factory plans. And while GM and Ford still sell EVs and have new models in their product pipelines, their collective focus has shifted, and it shows in the data.
Jim Cain, a spokesperson for GM, said that “quality counts more than quantity.”
“We’ve been very clear and consistent in communicating our view that EVs are the end game, the strength of our portfolio today, the loyalty of EV customers to the technology, awards we’ve won, our growing EV market share, and our commitment to continue investing in technologies like LMR (lithium manganese-rich) to improve profitability,” he said in an emailed statement.
But, he added, “we devote time on the calls to discuss growth opportunities like software and services and autonomous technology, and address complex topics of analyst/investor interest like trade and regulatory policy impacts, operating performance, capital allocation, regional performance, headwinds and tailwinds — all while making sure at least half the call is devoted to Q&A.”
Ford spokesperson David Tovar, meanwhile, pointed to the company’s planned launch of its new “Universal Electric Vehicle” platform next year. “[W]e think the first product rolling off the line, a midsize pickup truck, will hit the sweet spot of the EV market for cost, price, and technology,” he said.
For this analysis, TechCrunch excluded the ostensible third of the Detroit Big Three, Stellantis, for a few reasons. The automaker, which emerged in 2021 from the merger of Fiat Chrysler and France’s PSA Group, traditionally lagged behind its U.S. counterparts in EV adoption. Stellantis also, until the first quarter of this year, held comprehensive earnings calls only twice a year, instead of four times annually, like most public companies.
Hudson Labs sourced earnings call transcripts from S&P Market Intelligence dating back to 2019 and used its Co-Analyst — an AI research tool purpose-built for high-precision financial research — to assign topic tags to each sentence. It then counted the frequency of those topics, as well as each topic’s share of the discussion, to produce the charts below.
General Motors
GM bet on mass-market EVs before most other major automakers. It debuted the Bolt EV at the Consumer Electronics Show in January 2016 and put the car on sale by the end of that year — a healthy six months or so ahead of Tesla’s first deliveries of the Model 3.
EVs really became a focus of GM’s earnings calls as its investment ramped up in 2019 and into 2020. At that point, the company was teasing new made-in-the-U.S. models and talking about transforming Cadillac into an all-electric brand. GM spent an increasing amount of time talking about its EV plans through early 2021, with more than 100 references to electric vehicles on each of its last two earnings calls in 2020. That meant EVs accounted for roughly a third of the overall discussion on those calls.
Aside from a dip in the first quarter of 2021, when companies around the world were dealing with a major chip shortage, GM spent nearly the next four years — notably while President Biden was in office — dedicating around a quarter of each earnings call to discussing EVs. (Another notable dip that came in the first quarter of 2025 was attributable to President Trump’s “Liberation Day” tariffs, which dominated that earnings call.)
After Trump regained office, he slashed environmental regulations that incentivized zero-emissions vehicles, and his party tore up the $7,500 federal tax credit for new EVs. At the same time, GM’s talk of EVs dropped significantly, from 82 mentions on the second-quarter call in 2025, to just 21 on its most recent call covering Q2 2026.
While GM remains the second-largest seller of EVs in the U.S., the company that once made the lofty promise to go all-electric by 2035 is now talking more about how it has “align[ed] our EV capacity and manufacturing footprint with the changes in regulatory policy” — when it talks about EVs at all.
Ford
Ford’s first serious entry into the world of mass-market EVs was the Mustang Mach-E, which debuted in late 2019. As the company got closer to delivering the first models in late 2020, it started talking more and more about electric vehicles on its earnings calls.
Aside from a similar dip in mentions on the Q1 2021 call, which was bogged down by talk of the global semiconductor shortage, Ford — like GM — started spending around a third of each quarterly investor check-in talking about EVs. Those discussions were buoyed by the launch of its second major EV model, the F-150 Lightning, in 2021. And that level of focus largely held through the Biden years, as his administration freed up federal money for charging stations and EV manufacturing credits, while shaping policy around the battery material supply chain.
Ford began talking less about EVs before the 2024 election, though. By the middle of that year, the company was already backing away from some of its largest contemporary EV investments in favor of a skunkworks project that ultimately became the Universal Electric Vehicle platform. Talk of EVs dipped further after Trump took office, with CEO Jim Farley spending more time discussing support for the president’s protectionist trade policy and the company’s near-term focus on its higher-margin gas F-Series trucks.
Still, on Ford’s most recent call, Farley talked up the idea that the company “will become a major scaled competitor as we invest in affordable, versatile EVs.” But for that to happen, investors will have to wait until at least next year.
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Tech
Siri AI could come with a paywall for power users
In his final earnings call as CEO of Apple, Tim Cook said that the company’s long-awaited Siri AI upgrade could come with some paywalled limits. While Cook conceded that these plans are not set in stone, he envisions users being able to buy more compute for Siri AI via its existing iCloud+ subscriptions, which offer extended cloud storage.
“We do believe there will be people that want to use [Siri AI] a lot, and so we will have some kind of upgrade possibilities on iCloud+, where people can buy up the stack on iCloud+, and we’ll see how the pickup for that is,” Cook said on Thursday. “But we could not be more excited about where [Siri AI] is.”
Most other AI providers like Anthropic and OpenAI operate similarly, offering a limited free version to consumers with the option of upgrading to support more usage.
The new-and-improved Siri AI is available in the iOS 27 beta, and is planned to roll out more broadly this fall.
As longtime Senior Vice President of Hardware Engineering John Ternus steps into Tim Cook’s shoes, he will take the helm at a critical time for the company. Apple has fallen behind in its efforts to build an advanced AI assistant, even capitulating to its direct competitor Google by licensing a custom Gemini model to augment Siri. The Siri AI overhaul was so delayed that Apple had to pay $250 million to settle a class action lawsuit over how it marketed the iPhone 16’s AI capabilities.
Apple, like every other hardware manufacturer, is staring down a rocky road for accessing the supplies it needs to meet customer demand. Due to the AI-driven RAM shortage across the industry, it’s more expensive to build hardware, which has led companies like Meta, Samsung, Microsoft, and Sony to raise prices of some devices. Apple raised the price of Macs and iPads last month, but has yet to adjust the price of its existing iPhone models.
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