The Valley Digest
Posts
Larry Ellison's Startup Failures

Larry Ellison's Startup Failures

Christopher Webster
February 24, 2025

Startups:

Even Larry Ellison struggles:

Larry Ellison’s leap into farming with his company, Sensei Farms, serves up a classic reminder that just because you’re a genius in software, doesn’t mean you are in another. The Oracle co-founder set out to reinvent agriculture on Hawaii’s Lāna’i Island, which he scooped up for $300 million back in 2012. Eight years and more than $500 million later, the project is still a massive failure. Ellison dreamed of AI-powered greenhouses and robot harvesters feeding the world sustainably. Instead, Sensei has been tripped up by tech hurdles — like Wi-Fi issues and solar panels battered by Lanai’s winds — and rookie mistakes. Think greenhouses designed for Israel’s desert climate, when Lāna’i is typically muggy. The company also mixed mature and baby plants together, a blueprint for a pest paradise. Sensei, co-founded by a medical doctor and led currently by a tech exec who runs Sensei from Boston, has had small wins. Its lettuce and cherry tomatoes now appear at the island’s few local markets and restaurants. But constant delays, leadership shake-ups, and pricey blunders, including cannabis grow houses that needed to be gutted and rebuilt, highlight a tough truth: even bottomless funding is no match for the hard lessons of a specialized industry. Will they be able to make a comback?

Venture:

Khosla looking for another $3.5B:

Khosla Ventures is a well known and highly respected venture firm. They are also known for early investments in OpenAI. They are now raising $3.5 billion across three funds. That target is larger than the firm’s previous 2023 fund of $3 billion. About half of the new capital will be allocated to its ninth core venture fund. The remaining money will be divided between a $1.1 billion growth fund for later-stage startups and a $650 million seed-stage focused fund. The firm, which was founded by Sun Microsystems co-founder Vinod Khosla in 2004, has five managing directors, including Keith Rabois, who rejoined the firm after spending five years as a general partner in Founders Fund. During his first stint in Khosla Ventures, Rabois was an early investor in DoorDash, Affirm, Stripe, and Faire. Khosla Ventures’ initial $50 million check in OpenAI has bought it a 5% stake in the profit-arm of the company, which we know is raising a $40 billion funding round at a $340 billion valuation. What companies are they going to invest in with this new capital?

Big Tech:

Apple committing $500B:

The U.S. government is leaning hard on tech companies to make more commitments to building their businesses in the country, and Big Tech is listening. Apple has laid out its own plans. They will spend $500 billion over the next four years in areas like high-end manufacturing, engineering, and education covering technologies like artificial intelligence and chip making. Big projects will include a new factory in Houston, Texas, to produce servers that support Apple’s in-house AI effort, Apple Intelligence; doubling the value of Apple’s U.S. Advanced Manufacturing Fund to $10 billion; a new academy in Michigan to train people to work in next-generation factories; and more R&D. Who will be the next Big Tech company to commit billions of dollars to bring more business into the country?