Chamath Palihapitiya, the billionaire who helped ignite the 2020 SPAC boom, said his decision to promote blank-check companies on CNBC was a "huge mistake." The Social Capital founder and 8090 CEO made the admission during a Squawk Box appearance Tuesday as he pivots to running an enterprise AI coding startup backed by a $135 million Series A led by Salesforce Ventures.
Chamath Palihapitiya, the billionaire who helped ignite the 2020 SPAC boom among retail investors, said his decision to promote blank-check companies on CNBC was a "huge mistake." The Social Capital founder and 8090 CEO made the admission during a Squawk Box appearance Tuesday, roughly six years after the SPAC frenzy he helped fuel peaked and collapsed.
"It was a huge mistake for me to come on CNBC and talk about SPACs," Palihapitiya, who also hosts the "All-In" podcast, said.
The SPAC market raised more than $80 billion in 2021 alone, with Palihapitiya personally sponsoring a series of high-profile deals including Virgin Galactic Holdings Inc. and Opendoor Technologies Inc. Most of those stocks have since fallen more than 80 percent from their peaks, and the Securities and Exchange Commission intensified scrutiny of the vehicle after the boom turned to bust. Fewer than 10 SPAC IPOs priced in 2024, compared with more than 600 in 2021, according to SPAC Research data.
Palihapitiya's admission comes as he takes his first full-time operating role in more than a decade, stepping in as chief executive officer of 8090 Labs, an enterprise AI coding startup. The company announced a $135 million Series A round led by Salesforce Ventures two weeks ago, marking a sharp turn from the SPAC era that defined his post-Facebook career.
The SPAC King's pivot mirrors a broader pattern across Silicon Valley. Instagram co-founder Mike Krieger joined Anthropic as chief product officer in 2024, while Monzo co-founder Tom Blomfield took a leave of absence from Y Combinator to join the AI lab's compute team as a member of technical staff. Andrej Karpathy, a founding member of OpenAI, joined Anthropic's pre-training team in May. Opendoor founder Eric Wu launched NavigateAI, an AI copilot for construction workers, with $25 million in seed funding.
For Palihapitiya, the regret carries weight beyond personal reflection. The SPAC structure he championed — which allowed private companies to go public using projected revenue and optimistic growth forecasts — has largely fallen out of favor as institutional investors soured on the vehicle's risk-adjusted returns. The last time the SPAC market saw a comparable collapse was in the early 2000s, when roughly 100 SPACs liquidated after the dot-com bust, though the current downturn is deeper by deal volume.
The question now is whether Palihapitiya's AI bet can match the returns of his SPAC heyday. 8090 Labs enters a crowded enterprise coding market dominated by GitHub Copilot, owned by Microsoft Corp., and Amazon.com Inc.'s CodeWhisperer. The startup's $135 million Series A — one of the largest in the AI coding space this year — suggests investors are betting the SPAC King's next act may outperform his last.
This article is for informational purposes only and does not constitute investment advice.
