TechCrunch+

Sam Bankman-Fried has been arrested by The Royal Bahamas Police Force following reports that the United States filed criminal charges against the founder and former CEO of cryptocurrency exchange FTX, and is likely to request his extradition.

The Office of the Attorney General of The Bahamas issued a statement today, which was reported by BNO and other news outlets, that it would hold Bankman-Fried in custody until “a formal request for extradition is made.”

In a statement, Bahamian Prime Minister Philip Davis said, “The Bahamas and the United States have a shared interest in holding accountable all individuals associated with FTX who may have betrayed the public trust and broken the law. While the United States is pursuing criminal charges against SBF individually, The Bahamas will continue its own regulatory and criminal investigations into the collapse of FTX, with the continued cooperation of its law enforcement and regulatory partners in the United States and elsewhere.”

The office the United States Attorney for the Southern District of New York Damian Williamsconfirmed the arrest and the fact that it was made “at the request of the U.S. Government, based on a sealed indictment filed by the SDNY.” In a tweet, the office of the SDNY added: “We expect to move to unseal the indictment in the morning and will have more to say at that time.”

The former billionaire was scheduled to testify tomorrow as a witness before the U.S. House of Representatives Committee on Financial Services, TechCrunch’s Jacquelyn Melinek reported earlier today. The committee is investigating the events that led up to FTX’s implosion, which resulted in the crypto exchange filing for bankruptcy last month and Bankman-Fried being forced to step down as chief executive.

As TechCrunch previously reported, Reuters reported last month that Bankman-Fried secretly transferred $10 billion in FTX client funds to affiliated trading firm Alameda Research. Bankman-Fried told the publication that the transfer of the funds was a misreading of the “confusing internal labeling.” He has repeatedly claimed ignorance of any wrongdoing.

Axios reported earlier today that Bankman-Fried “continued to decline to testify in front of the U.S. Senate Banking Committee, and that his lawyers are refusing to accept a subpoena,” according to a new statementfrom Sens. Sherrod Brown and Pat Toomey.

This is a developing story. TechCrunch reporter Amanda Silberling contributed to this piece.

Got a news tip or inside information about a topic we covered? We’d love to hear from you. You can reach me at maryann@techcrunch.com. Or you can drop us a note at tips@techcrunch.com. If you prefer to remain anonymous, click here to contact us, which includes SecureDrop (instructions here) and various encrypted messaging apps.

FTX founder Sam Bankman-Fried has been arrested in The Bahamas by Mary Ann Azevedo originally published on TechCrunch

Hello and welcome back to Max Q! Thanks for everyone who came to TC Sessions: Space in Los Angeles on December 6. I even had the pleasure of meeting a few Max Q readers — fair to say, one of the highlights of the event.

In this issue:

SpaceX debuts defense-focused business line
Slingshot’s new round of funding
News from ispace, Metaspectral and more

SpaceX goes full defense contractor with national security-focused Starshield

The dual-use nature of broadband satellite services came into sharp relief during the Russia-Ukraine war, with Ukranian forces partly relying on SpaceX’s Starlink for their communications. It seems that SpaceX has decided to lean into that, with the launch of Starshield, a new business line that will provide “government entities” with secure comms and other services.

The brand, which may be a subsidiary, is now sitting alongside Dragon, Starlink and Starship on SpaceX’s website, which may reflect its importance. But much about Starshield is still unknown, and the company’s providing scant details so far. We’ll keep our ears to the ground about what the business vertical entails in the coming weeks.

Slingshot Aerospace closes Series A-2 to grow space situational awareness platform

Space is packed with human-made objects, and will likely only get more crowded with the continued growth of the space industry. Spacecraft operators have surprisingly little real-time data about where things actually are in orbit, especially in relation to each other.

EnterSlingshot Aerospace. The company is building a real-time “digital space twin” so that operators can keep their assets safe and secure while in orbit. Investors are certainly paying attention. The company has closed $40.85 million in Series A-2 funding, led by Sway Ventures and with participation from C16 Ventures, ATX Venture Partners, Lockheed Martin Ventures, Valor Equity Partners and Draper Associates. Slingshot also received a venture loan for an undisclosed amount from venture lending firm Horizon Technology Finance.

More news from TC and beyond

Blue OriginandDyneticshave each submitted proposals for a NASA Sustaining Lunar Development (SLD) contract. Blue’s team includes Lockheed Martin, Draper, Boeing, Astrobotic and Honeybee Robotics. The winning contractor would develop a lunar lander under the agency’s Artemis program. (Reuters)
Blue Originis still quietly conducting New Glenn component testing at its site at Kennedy Space Center, including fairing testing last week. (NASA Spaceflight)
Chinais already considering an expansion to its just-completed Tiangong space station. (SpaceNews)
Dawn Aerospace, a startup developing a launch system that uses an orbital spaceplane, raised $20 million at a NZ$170 million ($108 million) valuation. (Dawn Aerospace)
dearMoon, a Japanese billionaire’s project to send himself and eight crew members to the moon aboard a SpaceX Starship rocket, now has an all-civilian crew. The crew members include Steve Aoki and Tim Dodd, the host of “Everyday Astronaut.” (Endgadget)
Mangata Networks will open a new space engineering and manufacturing hub in Scotland, supported by a funding package totaling £83.7 million ($102.3 million). (Via Satellite)
Relativity Space’sTerran 1 rocket has rolled out of the hanger and is now vertical on the launch pad ahead of its first orbital flight. (Relativity)
SpaceXlaunched 40 satellites for its ostensible competitor, OneWeb, after the latter company desisted from using Russian Soyuz rockets. (CBS)
SpaceX’s Super Heavy Booster 7 prototype has returned to the factory after being subjected to a number of tests, though the reason why is unclear. (Teslarati)
Virgin Orbitis delaying its mission from Cornwall, England — the first-ever spaceflight launch from that country — for “weeks,” the company said in a statement. (TechCrunch)

Max Q is brought to you by me, Aria Alamalhodaei. If you enjoy reading Max Q, consider forwarding it to a friend.

Max Q: That’s a wrap by Aria Alamalhodaei originally published on TechCrunch

Twitter will remove all legacy blue checkmarks “in a few months,” according to a tweet from CEO Elon Musk.

“The way in which they were given out was corrupt and nonsensical,” tweeted Musk.

Before Musk bought Twitter, checkmarks were used to verify individuals and entities as active, authentic and notable accounts of interest. On Monday, the social media platform relaunched its Twitter Blue subscription plan after a dicey first attempt. The subscription gives anyone willing to shell out $8 per month (or $11 per month on iOS because screw you, App Store) a blue checkmark next to their name, fewer ads on their timeline, boosted posts and other features.

This past week, many blue checkmark holders have been seeing a pop-up when they click on their blue checkmark that reads, “This is a legacy verified account. It may or may not be notable.”

Twitter is still working out the kinks of this controversial revenue stream. The company also just updated its terms to specify that users will be required to verify phone numbers before purchasing Twitter Blue. Users also won’t be able to change their username, display name or profile picture seven days prior to buying the plan.

Twitter has also warned that if already paying subscribers do change any of those identifiers, their blue check might disappear until Twitter can re-verify them. That extra-cautious move seems due to the initial rollout of Twitter Blue, which resulted in rampant, and often hilarious, account impersonations.

Elon says Twitter will remove all legacy verifications ‘in a few months’ by Rebecca Bellan originally published on TechCrunch

To get a roundup of TechCrunch’s biggest and most important stories delivered to your inbox every day at 3 p.m. PDT, subscribe here.

It’s the most wonderful time of the year. Of course, we are referring to that time of year when all the startup chaos continues apace, and we are just hanging on for dear life to see how it all ends, clinging to our cups of hot chocolate, as holiday-appropriate music is wrapping around us like a warm blanket. Ahhh. — Christine and Haje

The TechCrunch Top 3

We’ll have what they’re having: Ron and Alex wrote last week about Coupa’s investors warning that a sale to private equity would not be good for the company. Well, today we learned that Thoma Bravo is acquiring Coupa as the private equity firm continues its M&A rampage. It should make for some interesting investor opinion: Ron reports that the company is being acquired for $81 a share, or $8 billion. Some investors were pushing for $95 a share.
“Cloudy” skies ahead: Microsoft is acquiring a 4% stake in the London Stock Exchange Group as part of a 10-year cloud partnership, Paul writes.
This chair is juuuuust right: Acquiring the right furniture is a battle between finding good-quality items and finding items that are in stock and don’t cost a fortune to obtain. Nigerian startup Taeillo raised $2.5 million in fresh capital to develop its online furniture store, which it says offers lower-priced items at a fraction of the wait time, Tage writes.

Startups and VC

FTX’s fallen CEO, Sam Bankman-Fried, is scheduled to testify tomorrow as a witness before the U.S. House of Representatives Committee on Financial Services, reports Jacquelyn. The committee is investigating the events that led up to FTX’s implosion, which resulted in the crypto exchange filing for bankruptcy last month.

And we have five more for you:

Jumping Jack Flash, it’s a CO2, CO2, CO2: Sydney-based Pathzero helps investors track their portfolios’ carbon emissions, by Catherine.
Time to wear eye masks, perhaps: Connie talks with economist Paul Kedrosky, wondering if ChatGPT is a “virus that has been released into the wild.”
Where’s the money?: Potentially huge shake-up in university endowments, as proposed legislation would force U.S. higher education endowments to reveal where they invest, reports Dominic-Madori.
Bringing robotics to more small biz: Robco links up with $14 million led by Sequoia to bring modular robotics to industrial SMBs, writes Ingrid.
I am the gasman: Avarni is building a comprehensive dataset to analyze supply chain emissions, reports Catherine.

How to implement a video SEO strategy

For anyone who runs a website, “pivot to video” has become a sour joke.

If your startup is shaping up its video content strategy, a wholesale shift isn’t required: instead, conduct a content audit to identify areas where interactive content can drive growth, such as testimonials, product announcements and webinars.

In a guide for first-timers, SEORadar creator Mark Munroe shares a checklist for preparing a video SEO strategy that boosts traffic and generates leads.

“Getting a sustained jump in web traffic is every SEO strategist’s dream, and video is [a] no-brainer way to do it,” writes Munroe.

Three more from the TC+ team:

You’re definitely doing this wrong: The one slide 99% of founders get wrong when fundraising, by Haje.
Warm up the credit card, it’s shopping season: Private equity could be gearing up to shop for vulnerable tech companies, muses Alex.
Here’s one we baked earlier: Eric Tarczynski contributes a post about the 5 lessons his firm learned from building a venture fund from scratch.

TechCrunch+ is our membership program that helps founders and startup teams get ahead of the pack. You can sign up here. Use code “DC” for a 15% discount on an annual subscription!

Big Tech Inc.

Layoffs seem to have hit the world of gaming. Ingrid reports that Playtika — a publicly traded Israeli technology company whose online gambling and other gaming titles have been played by hundreds of millions of people — laid off 610 workers, or about 15% of its staff. It also shut down three of its gaming titles amid a broader company restructuring.

Meanwhile, we are going to warn you right now, if you are not interested in anything Twitter is doing, skip down to the story listings. For the rest of you, in today’s “All Things Twitter” digest, we have a collection of stories, most related to Twitter Blue. Kyle has your details about Blue for Business and that gold check mark you keep seeing, while Ivan writes that Twitter will use phone number verification for future Blue subscriber purchases. Aisha has you covered on the Community Notes feature, and Rebecca reports on the verification process relaunch and what it means for Apple users.

Here is your refuge from Twitter news:

And the winner is…: HBO/HBO Max and Netflix are tied for the most Golden Globe nominations. Lauren has more.
What is it with the vans?: Electric cars seem to be no problem, but when you get into vans and trucks, that’s where it seems to break down. Kirsten reports that Rivian and Mercedes paused their plan to produce an electric commercial van.
Who had this for their 2022 Bingo card?: If you had Jeff Bezos and GMA host Michael Strahan starring in a show together, you basically win. Lauren writes that the pair are involved in a new Blue Origin kids’ space show.
Well, that was unexpected: Zack writes about Xnspy, which developed some stalkerware that spied on thousands of iPhones and Android devices.
Someone doesn’t want to pay more: Uber has sued the NYC Taxi and Limo Commission to block a rate increase for its drivers, set to begin December 19, Rebecca reports.

Daily Crunch: Thoma Bravo buys Coupa Software for $8B, but will that price satisfy shareholders? by Christine Hall originally published on TechCrunch

Sunday was a landmark day for both commercial and public space ventures, with NASA’s Orion capsule returning to Earth just hours after the launch of a privately funded and built lunar lander by Japanese company ispace.

The two missions — the conclusion of NASA’s Artemis I and ispace’s Mission 1 — are some of the clearest signs yet that the moon will likely become a permanent site for scientific missions and commercial activity.

ispace lander makes its way to the lunar surface

Ispace launched Mission 1 aboard a SpaceX Falcon 9 rocket from Cape Canaveral Space Force Station in Florida on early Sunday morning. If successful, the mission will be the first to put a fully privately funded and built lander on the lunar surface.

The startup, which is based in Tokyo, has been working on technology for the moon for over a decade. The company operated as Team Hakuto in the Google Lunar X Prize, a competition to spur the development of commercial lunar landers. After that competition concluded with no winner, ispace continued developing its technology. It relaunched the Hakuto name for the lunar lander which launched Sunday, dubbed “Hakuto-R” — both in homage to its origin story and an acknowledgement that the project is a “reboot” of the original project.

It was a long road to launch, ispace CEO Takeshi Hakamada told TechCrunch during a panel at TC Sessions: Space last week.

“Twelve years is a long time to survive,” he said. “We’ve had a lot of ups and downs.”

The ups include a notable amount of funding: The company has raised more than $235 million in a series of rounds, the latest of which closed last August. Hakamada acknowledged the importance of financing for technology-driven companies.

“In the space industry, many people think that technology is very important. It’s not wrong,” he said. However, the more important is money. To start something, we need money, we need to hire people, we need to procure something. Thinking about the financing is the first thing to do, even as a technology company.”

The company has laid out 10 mission milestones for Mission 1, the mission that launched on Sunday aboard a SpaceX Falcon 9 rocket. Ispace has completed milestone 1 and 2 (completing launch preparations and launch itself); the company will check off the final milestone once the Hakuto-R lander establishes steady power and communications on the lunar surface. The lander, which is carrying multiple government and commercial payloads for customers, including Canada and the United Arab Emirates, is expected to land on the moon in April. Ispace is aiming to launch its second mission in 2024.

Artemis I concludes with Orion’s return

Hours after ispace launched the lander, NASA’s Orion spacecraft splashed down in the Pacific Ocean, marking a spectacular end to the agency’s Artemis I mission. Artemis I, which kicked off with the launch of the Space Launch System mega-rocket in November, was the first in a series of planned missions aimed at returning humans to the moon by the end of this decade. The chief purpose of Artemis I was to test the Orion spacecraft before it carries crew. NASA Administrator Bill Nelson told reporters shortly after splashdown that the mission was “extraordinarily successful.”

“It is the beginning of the new beginning, and that is to explore the heavens.”

The capsule traveled 1.4 million miles in its 25-day mission around the moon and back. While the agency is still reviewing data on Orion’s performance, especially the performance of its heat shields, NASA Orion program manager Howard Hu said during the media briefing that the agency was happy with what they’ve reviewed so far.

Artemis II, which will take place no sooner than 2024, will be crewed, though the four-person team will not land on the moon. That honor will go to the Artemis III crewmembers. NASA awarded SpaceX a $2.9 billion contract to build the Starship landing system for that mission, which is scheduled to launch before the decade is out.

NASA’s Orion capsule returns to Earth as ispace’s lunar lander takes flight by Aria Alamalhodaei originally published on TechCrunch

Snyk hasn’t been afraid to take money over the years, scoring an ever larger investment haul with each passing round, and with each one has come a correspondingly large valuation increase. This time, that particular streak ended, but Snyk snagged another $196.5 million investment with its valuation down about 12% to $7.4 billiion since its previous round in September 2021.

That previous round was $585 million with $300 million in primary funding and the remaining $230 million in secondary funding to pay off early investors and employees, anxious to see some return on their equity. The primary money came on an $8.5 billion valuation, $1.1 billion higher than today’s round.

It’s worth noting, however, that even with that down round, the previous round was up $3.8 billion over the March round. You can see the company’s ascent up until this round in the chart below:

Snyk CEO Peter McKay says getting the right terms was more essential than increasing the valuation, especially in the current market. “So, it was more important that we get the right terms than that I absolutely have to get to $8.6 billion. If the market is saying you’re at 7.4, then we’re at 7.4,” he said.

Part of it is that even though the company is growing, the market has changed since the last round. “Despite the headwinds that I think everybody sees in the market, we were able to still grow over 100% in new logos and in revenue, so we’re very pleased,” he said.

The company still has most of the money from last year’s round in the bank, but they saw an opportunity to get more cash, which could help them as they try to grow the platform, both organically and via acquisitions.

“What you do with a market like this is you focus on efficiency in your business, you focus on getting to free cash flow faster. You make sure your balance sheet is as strong as it can be. And you be opportunistic,” he said.

He sees that Snyk’s market around developer security remains fragmented, and he sees an opportunity to consolidate the market by buying companies when it makes sense and taking advantage of what he sees as a very large TAM. McKay says that the company has tripled in size since its last round of funding from 400 employees to 1200, but he sees ways for the company to be more efficient for investors in other ways, shooting to get to cash flow break even by 2024 as a prime example.

Most security startups either grow into a platform or they get absorbed by one, and Snyk apparently wants to be a platform player at this point. This cash should help the company as it waits out the stock market for a more friendly IPO environment.

“We really haven’t set any time. We think that there’ll be a wave in the first half of 2023. We’ll watch and see how they do and based on that, maybe we’ll make a decision on what we do…I don’t even want to speculate on a time because who knows when that is? Nobody has that answer,” he said.

Today’s investment was funded by new investors Evolution Equity Partners, G Squared, Irving Investors and Qatar Investment Authority. Existing investors Boldstart Ventures, Sands Capital and Tiger Global also participated. The company has now raised $1.075 billion.

Snyk scores another $196M as valuation drops 12% to $7.4B by Ron Miller originally published on TechCrunch

You don’t need to be a genius to see that we are in a period of great economic uncertainty. For startups, however, a key predictor of future results is the direction of IT spending, something that we can track. When companies are spending money on tech, the reasoning goes, both established and younger companies should benefit. And if they’re not, both should suffer.

The good news is that, for the most part, signs point to an increase in IT spend in 2023, and that’s true whether you talk to CIOs, enterprise companies or analysts. It bodes well for the entire technology industry.

Consider what Broadcom CEO Hock Tan said during last week’s earnings call: “We have been talking to multiple CIOs from among our largest enterprise customers we have out there. We have not seen them talk about a reduction in their IT spending,” he said. While some mentioned flat spending, few were talking about cuts, and that’s an encouraging trend heading into the new year.

That perspective fits with what IDC analyst Rick Villars is seeing. “Spending on core IT infrastructure, business software, professional services to implement and operate the systems – even if the economy stays flat, we expect to see continued healthy growth in the 5% to 6% range in aggregate for those spaces. It would take a more severe economic downturn from what we’re seeing for that to change,” Villars told TechCrunch.

That’s right where Gartner’s prediction comes in as well: an increase of 5.1% in global IT spend in 2023. That’s up from 0.8% growth in 2022, but well down from the 10.2% increase the previous year.

Where are they spending?

All signs point to IT spending rising in 2023 by Ron Miller originally published on TechCrunch

Meta has quietly re-absorbed the resources of its “Connectivity” division, the company confirmed. For nearly 10 years this was the home of the former Facebook’s experimental internet and telecoms efforts, from satellites (exploded) to drones (crashed) to apps (disputed) and other more traditional infrastructure (appreciated and ongoing).

As first noted by Light Reading, Meta Connectivity’s staff and projects, or what remain of them after the imminent cuts, will be divided between its Infrastructure and Central Products divisions. Exactly which resources and people will stay is no doubt a matter of some discussion even now, but the complete reduction of Connectivity suggests the more out-there approaches to providing internet are probably gone for good.

The beginning of this division can probably be traced to attempts about ten years ago to subsidize internet connections in developing countries and regions. The Internet.org and Free Basics efforts would essentially provide Facebook and some bundled services free of charge to places where connectivity was expensive.

This provoked a great deal of controversy at the time, from people incensed that a U.S. company thought it should step in to solve another’s problems, to the notion that the same company would essentially control access and content in violation of net neutrality policies, and to others who saw the ostensibly charitable endeavor as Facebook buying global market share.

In 2015 the company revealed plans for a completely unexpected high-altitude drone named Aquila, which would use lasers to connect people below it. This ambitious effort had a rough couple years, experiencing a rough landing in 2016 and eventually being permanently grounded in 2018.

Meanwhile, they were going even higher than that with an early attempt at a low-Earth orbit satellite connectivity system, which was scheduled for launch in September of 2016. Unfortunately…

Facebook didn’t give up, but it is worth noting that its next venture into satellite internet, a subsidiary called PointView Tech, has filed experimental FCC licensing documents in 2018, 2019, 2020, 2021… but not this year. I reached out to check in but haven’t heard back.

But not everything the Connectivity division did flew in the air. As they probably had reiterated to them every time they talked about drones and lasers, what’s really needed is fiber backhaul and solid traditional wireless infrastructure so that neglected areas can connect just like everyone else in the world does.

To that end Meta has been working with the Telecom Infra Project to build new software, hardware and standards that make telecommunications networks more accessible and maintainable. Legacy industry dominates this space so new entrants have a potentially large opportunity to make a change. Meta and Google, for instance, have invested in undersea cables and fiber that serve both their own purposes and public transport.

That said, now that Connectivity is being broken up for parts, it’s impossible to say which efforts will continue to be pursued, funded, and so on. We’ll keep an eye out when the layoffs and consolidation conclude and see what’s left standing.

Meta unplugs Connectivity division, home of satellite and drone internet experiments by Devin Coldewey originally published on TechCrunch

Benefits and payroll management company Sequoia says hackers accessed sensitive customer information, including their Social Security numbers and COVID-19 test results.

According to Wired, which first broke the news of Sequoia’s breach last week, the incident impacted customers of Sequoia One, a professional employer organization (or PEO) that provides outsourced human resources and payroll services. The service is popular with U.S.-based startups, and says it works with more than 500 venture-backed companies.

Now, in a data breach notice filed with the California attorney general’s office, Sequoia said it became aware that an “unauthorized party may have accessed a cloud storage system that contained personal information” over a two-week period between September 22 and October 6. This breached cloud system stored an array of sensitive personal data, including names, home addresses, dates of birth, gender, marital status, and employment status. It also included Social Security numbers, their salary wage related to benefits, government identity cards, and COVID-19 test results and vaccine cards.

Sequoia added that the review also found no evidence of malware, a data extortion attempt, or any evidence of ongoing unauthorized access to company systems. Because the hacker’s access was “read-only,” the company said no client data had been changed.

Sequoia said it hired Dell Secureworks to conduct a forensic investigation, which found “no evidence that the unauthorized party misused or distributed data.” It’s not clear if Sequoia has the technical means, such as logs, to determine what information was accessed or what data was siphoned, if any.

When asked by TechCrunch, Sequoia declined to say how the customer data became exposed and would not say how many individuals had their personal data compromised.

Read more on security:

Xnspy stalkerware spied on thousands of iPhones and Android devices
CommonSpirit Health says patient data was stolen during ransomware attack
Apple launches end-to-end encryption for iCloud data
Rackspace blames ransomware attack for ongoing Exchange outage

HR platform Sequoia says hackers accessed customer SSNs and COVID-19 data by Carly Page originally published on TechCrunch

Lensa’s AI popularity has had a notable impact on the App Store’s Top Charts. The popular photo and video editing app recently went viral over its new “magic avatars” feature, powered by the open source Stable Diffusion model, allowing users to turn their selfies into styled portraits of themselves as sci-fi, anime, or fantasy characters, among other artistic renderings. Consumer demand for the app, and for AI edits more broadly, has now pushed numerous other “AI” apps into the U.S. App Store’s Top Charts. As of Monday, the top three spots on the U.S. App Store are now all held by AI photo editors, and even more AI art apps are newly ranking in the Top 100.

The No. 1 spot on the U.S. App Store, however, continues to be held by Lensa AI, which has seen 12.6 million global installs in the first 11 days of December, up 600% from the 1.8 million installs it saw during a similar time frame in November (Nov. 20 through Nov. 30), according to new data from app store intelligence firm Sensor Tower. The U.S. accounted for 3.6 million of those new December installs, estimates indicate.

In fact, 8 out of the top 100 apps by downloads on the U.S. App Store were AI art apps during the time Dec. 1 through Dec. 11 time frame, the firm’s analysis found.

Following Lensa AI, the generic-sounding app AI Art: AI Image Generator had keyword-stuffed its app’s name to rank in second place, promising AI avatars and AI art from text. Dawn – AI Avatars is in the No. 3 position, offering AI avatars that can be changed with a text prompt. (As of the time of writing on Dec. 12, the two apps appear to now have swapped places.)

AI Art has seen around 1.7 million global installs during Dec. 1-11, up 229% from the 71,000 it saw during Nov. 20-30. Meanwhile, Dawn also saw around 1.7 million installs, Sensor Tower said, up from the 28,000 it saw in the late November time frame.

These are shortly followed by Wonder – AI Art Generator at No. 10, which also offers AI avatars and AI art from text prompts.

Although Wonder ranks lower in the U.S., it has seen around 4 million global installs so far in December, up from the prior period of Nov. 20-30, when it saw 469,000 installs.

Not too much farther down the Top Charts, you’ll also find Prequel: Aesthetic AI Editor at slot No. 14. The app has seen 907,000 global installs this month so far, up from the 319,000 seen November 20 through 30.

The Top 50 also includes the newer app Voi – AI Avatar App by Wonder at No. 39. This happens to be from the same developer behind the No. 10 app Wonder but has an awful 1.6-star rating over its price subscription model and broken features, according to angry customer reviews. Launched only on Dec. 7, Voi has already gained 785,000 installs, of which 241,000 were U.S.-based. Clearly benefitting from the trend, the app’s developer actually now has three apps that reference “AI” in their titles, including the lesser-ranked Pixelup – AI Photo Enhancer.

Another AI app, Meitu – Photo Editor & AI Art has moved into No. 47 on the U.S. App Store after gaining 6.4 million installs in December so far, up from the 1.1 million seen during Nov. 20-30.

In addition to highly ranking overall among iPhone apps, the U.S. App Store’s Graphics & Design category is also now filled with AI art apps within its own Top Charts.

Here, Dawn is the No. 1 Top Free app, followed by AI Art and Wonder to round out the top 3. Profile AI: AI Avatar Creator, Inspire – AI Art Generator, and Dream by Wombo – AI Art Tool are ranked 8, 9, and 10, respectively. Lesser known apps pop up as you scroll down the category’s Top 50 as well, filing slots No. 14, 19, 21, 25, 27, 31, 36, 44, and 47 — too many to list. All use the keyword “AI” in their app’s name along and reference activities like “AI art” or “AI avatars.”

And of course, the U.S. Photo & Video category’s Top Charts have several AI apps as well, including No. 1 Lensa, No. 5 Prequel, No. 7 Voi, No. 8 Meitu, and No. 26 FacePlay.

AI app demand is not limited to the App Store, however. Many of the same apps are trending on Google Play, too. When both app stores’ rankings are combined, Lensa AI remains No. 1, AI Art is No. 2, Wonder is No. 8, Meitu is No. 10, Prequel is No. 68, Dawn is No. 72, Dream is No. 77 and FacePlay is No. 90.

Dream gained 782,000 new global installs in December so far, while FacePlay gained 2.8 million, Sensor Tower found.

While it’s common for app makers to congregate around a trend by updating their app’s name and description, or by bidding on keywords in Apple’s App Store Search ads, it’s remarkable just how many “AI” apps have now made it to the Top Charts in the wake of Lensa’s success. This signals something more than a flash-in-the-pan trend, as the general conversation these days is around how much AI has been improving — in other areas, people are marveling at the leap of the AI tech ChatGPT.

That said, we should note that just because an app is marketing itself as AI-powered, it doesn’t necessarily mean it’s using the same Stable Diffusion model Lensa is. Not that consumers seem to care– they seem happy to try almost any app labeling itself AI for the time being, as long as it delivers interesting and creative results.

Of course, there are concerns over this specific AI use case. Already, Stable Diffusion has become controversial for the way its model was trained by using images from artists without their consent. Lensa was also able to be tricked into making NSFW images, TechCrunch found. And today, MIT Technology Review reported that Lensa created topless images and skimpy and sexualized avatars when tried by one female reporter, who happened to be of Asian heritage — suggesting the AI had been influenced by an overabundance of anime and video characters.

It’s clear the tech has a long way to go to be ethical and responsible. But those concerns, for the time being, aren’t dampening consumer interest in this growing category.

AI art apps are cluttering the App Store’s Top Charts following Lensa AI’s success by Sarah Perez originally published on TechCrunch