AI labs are buying data from dead startups to train their models
When Keelan Miskell began winding down his crypto startup this year, he didn’t think its data was worth much: the users were anonymous, the company just a few years old. But he’s since turned the firm’s digital archives into real money. He’s netted roughly $25,000 for his code base and a still-pending amount (likely around…
AI startups are monetizing their digital remnants by selling data to artificial intelligence laboratories as the number of failing businesses surges. Keelan Miskell recently sold his crypto firm's data for about $25,000, turning a seemingly worthless operation into a profitable asset. This new market, facilitated by firms like SimpleClosure, has seen a rise in the sale of code and workspace data, including emails, chats, and documents, to AI labs and mature tech companies constructing their own models.
SimpleClosure's CEO, Dori Yona, notes that 47% of their deals now include such data sales. These transactions, once rare, are becoming commonplace, with over 150 deals handled by SimpleClosure alone, promising to return over $10 million to startups by the end of 2026. Industry rival Sunset also boasts a thriving data resale business.
The value of a company's data can vary greatly, depending on factors such as head count, years in operation, data volume, and the depth of use of the tools. Demand for this data surged last year as AI training labs struggled with limited public and synthetic datasets. Notable data purchases include Google's acquisition of Spirit Airlines' data for $10 million during the carrier's bankruptcy proceedings, and SpaceX potentially buying data from failing startups.
However, this market is not without its concerns. Privacy issues and the legal status of the data, described as 'legally radioactive' by some, are significant concerns. The proceeds from these sales typically go to senior creditors and investors, not the employees. Additionally, there is a lack of transparency regarding who is buying the data and how it will be used. Despite these challenges, tech's new undertakers are ready to appraise the value of what's left.
Written by urgent.news from MIT Technology Review's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
