Cullen Schlievert

VC & Startup Attorney, but not yours. Sharing general learnings along the way. Win and help win!

[Gavin Baker @GavinSBaker]

Wild 24 hours for AI and lots of different proposals have been made.

TLDR; the only *tangible* new fact is that OpenAI and Anthropic are going to have embedded 3rd party evaluators from unknown organizations with Dario floating METR as a possibility. Having 3rd party evaluators is smart as there is no Section 230 style liability shield for model outputs and showing a “duty of care” will be important in future litigation. Several internet companies might have gone bankrupt without Section 230 so limiting liability really matters.

There are minimal investment implications from this single new fact, but I do think that for anyone who wants a “smoother for longer” cycle then most constraints are good: wafers, watts, real rates and spreads. Excessive regulation is a different matter but I don’t think we are anywhere close to this even if the vector changed over the last 24 hours.

To summarize the events:

Dario made the most maximalist proposal of the weekend: embedded 3rd party evaluators, a national regulatory regime for models beyond a certain capability/ingredient threshold, a broad international regulatory pact between democracies, stricter limits on compute/distillation for China and then a different international regulatory regime that encompasses China. Before there is a national regulatory regime, he wants a Sherman act waiver so that Anthropic can safely coordinate with OpenAI and other frontier labs without antitrust fears. TBF, this latest proposal is much less maximalist than some of his prior proposals like “Policy on the AI Exponential,” where he advocated for an FAA for AI. I believe he is sincere in his beliefs. And despite all the protestations, all of this would also probably be good for his business over the long-term.

Sam agreed that embedded 3rd party evaluators were a good idea and stated they would implement them. Again, this is smart as should help limit future liability.

Elon said “Dario is right” and later specified that “Dario is right that there should be some oversight. Peer review of AI by competitors is the right way to start this off.” This would be a MPAA like self-regulatory structure for AI with regular calls between the labs plus a process where each new model is evaluated for safety by competitors for a 1-2 week period before being released. That is *wildly* different from Dario’s proposal and in-line with what David Sacks has been proposing. Elon also stated that nothing was going to slow down open-weight models.

Demis said that Dario’s essay was a “step in the right direction.” Dario also said that he was also open to Demis’ idea of a FINRA like self-regulatory structure as part of his proposal.

David Sacks had a thoughtful post where he said that Dario and Sam should pace unilaterally, called the antitrust waiver a cartel request and denied that METR was truly independent given their ties to Anthropic.

Sriram Krishnan, former White House AI advisor, noted that it would be important to have the 3rd party evaluators come from independent organizations that are not affiliated with any lab, which is basically an indirect statement about the relationship between METR and Anthropic which Sacks was explicit about.

Clem from Hugging Face said they were open to being a neutral 3rd party evaluator, which is interesting especially if Jensen was consulted before that post.

Alexander Wang from Meta noted that alignment would be an increasing focus going forward.

An executive order seems likely after all this and the language in this EO is going to be really important. It is possible to democratize and distribute AI broadly and safely without centralizing it in the hands of a few corporations who might each become more powerful than any single government.

I do not want a few humans in control of intelligence.

I want us all to have our own intelligences that reflect our own values and human variation in all of its richness.

Intelligence distribution over intelligence centralization FTW.

[Fred Grier @fredmgrier]

Gold Tesla Spotted in OB, San Diego

[Collin Rugg @CollinRugg]

16-year-old lifeguard Ryder Williams recounts his heroic rescue in Santa Cruz California, praises his fellow lifeguard for helping with the rescue.

“I wish more people knew about ocean conditions and rip currents.”

“I'd like people to remember that we make thousands of rescues along the California coast and around the world every day, and that this is not an uncommon occurrence. This is our job, this is what we're here to do, and this is the reason we are here.”

Hero.

[Cullen Schlievert @ECVCLawyer]

@mikewystrach Need to be obsessed with the problem and have the persistence to not accept anything but the solution.

[Michael Dell 🇺🇸 @MichaelDell]

Today, on America’s 250th birthday, Susan and I are celebrating by giving $250 each to the first 25 million qualifying American children who sign up for their @InvestAmerica24 @TrumpAccounts.

This makes every child a shareholder in the greatest prosperity-creating engine the world has ever known — American capitalism. Through this public-private partnership, we’re giving the next generation a real stake in our economy and a path to the American Dream: education, a first home, starting a business, and building lasting wealth.

It unites us all in hope and optimism for every child’s future.

Happy 250th Birthday, America! 🇺🇸

https://t.co/Jd7nb98JDT

[Cullen Schlievert @ECVCLawyer]

Underrated skill: drafting emails that serve as a clean record of workstreams and context. Cheat code.

[Cullen Schlievert @ECVCLawyer]

Not sure if there’s a name for this negotiation tactic.

I think of it as tossing a grenade into the conversation.

When negotiations get circular, strip the issue down to the most basic question possible and ask opposing counsel to explain their position.

Not an argument. Just a simple question.

“Why should this be the outcome?”

When the question is simple enough, the answer requires real justification.

Usually one of two things happens:

1. They realize the position doesn’t hold up
2. You identify the exact point of disagreement

Simple questions are surprisingly powerful in negotiations.

[Cullen Schlievert @ECVCLawyer]

Agreed. Similar to medicine the consumer needs someone to blame, that alone will guarantee survival

[SMB Attorney @SMB_Attorney]

You guys don’t get it yet.

Everyone keeps saying AI is going to replace lawyers.

I don’t think people understand how this actually plays out.

Let’s say you use AI to draft a contract.

The contract misses something important. A year later it costs you two million dollars.

What do you do?

Right now, you sue your lawyer.

In the AI world, you’d sue the AI company.

Two things can happen.

Option 1: The AI company has liability for legal advice.

If that’s the case, every AI company will immediately stop letting consumers use AI for real legal work. The liability risk is massive.

Option 2: The AI company has no liability because of disclaimers.

If that happens, every state bar in the country will say consumers are being exposed to unregulated legal advice and call it the unauthorized practice of law.

And they’ll shut it down that way.

Either path leads to the same outcome.

Consumer AI will be limited to generic “Wikipedia-style” legal information and LegalZoom level document prep.

But the real AI tools?

Those will live inside law firms.

Lawyers will use them to move faster, analyze more data, and run way more matters at once.

The M&A lawyer doing 5 deals at a time will do 50.

Trial lawyers will run far more cases simultaneously.

The idea that AI replaces lawyers probably dies.

The more likely outcome is that AI supercharges the best lawyers and makes the profession even more profitable than ever.

[Cullen Schlievert @ECVCLawyer]

For that reason, even though they are optional in the NVCA forms, they are provisions I often revisit and discuss in venture financings.

Curious how other practitioners approach these provisions and the rationale for including or omitting them.

[Cullen Schlievert @ECVCLawyer]

Two optional provisions in the NVCA Investors’ Rights Agreement are ones I find myself revisiting in many venture financings:

• Underwriting liability limits in a forced registration (Section 2.3)
• Equal treatment on IPO lock-up waivers (Section 2.11)

A quick thread on why.

[Cullen Schlievert @ECVCLawyer]

Most of the time, these provisions never become relevant.

But in the relatively rare scenarios where they do apply, they can meaningfully shape outcomes for investors.

[Cullen Schlievert @ECVCLawyer]

Rule of thumb:

If a right feels like it belongs in:
• The Charter
• The Voting Agreement
• The IRA

It probably shouldn’t live quietly in a side letter.

[Cullen Schlievert @ECVCLawyer]

Side letters don’t dilute economics.
They dilute governance.

And most founders don’t realize it until it’s too late.

Here’s how it happens. 🧵

[Cullen Schlievert @ECVCLawyer]

Why this matters for VCs:

• You may unintentionally create precedent
• Later funds will demand parity
• Governance becomes unstable

Side letters compound.