Alphabet’s X, the research lab known for its experimental “moonshot” projects, is restructuring how it brings ambitious technologies to market by increasingly spinning them out as independent companies rather than keeping them within Alphabet’s corporate umbrella. Speaking at TechCrunch Disrupt, X chief Astro Teller explained that the shift is supported by a new venture fund structure designed to accelerate the commercial deployment of high-risk, high-reward innovations.
The fund, Series X Capital, has raised over $500 million and is run by former YouTube executive and Facebook CFO Gideon Yu. Unlike Alphabet’s existing investment arms — GV, CapitalG, and Gradient Ventures — Series X Capital is legally required to invest exclusively in X spinouts. Teller noted that Alphabet is only a minority investor in the fund. “If Alphabet was the sole LP, the fund would be inside of Alphabet,” he said. “Alphabet can be a small LP, but if it’s more than a small LP, we undo the thing that we’re trying to accomplish.”
This model departs from X’s previous approach, in which successful projects such as Waymo and Wing became standalone subsidiaries within Alphabet. Teller said X’s experience over the past decade revealed that while some projects benefit from Alphabet’s resources, others progress faster outside its structure. “Landing it just outside the Alphabet membrane, where we can be very tight with them, get a lot of strategic co-benefit with them, but not necessarily control them, makes sense,” he told the audience.
Teller described the evolution of X’s spinout strategy as the product of the lab’s internal philosophy of “intellectual honesty,” a culture that prizes experimentation and rapid failure. X defines a moonshot as a project that aims to solve a global problem, proposes a product or service capable of addressing it, and leverages breakthrough technology that creates a “glimmer of hope” for success. “If someone is proposing a moonshot and it sounds reasonable, the company isn’t interested, because that, by definition, wouldn’t be a moonshot,” he said.
X’s process involves testing early-stage ideas aggressively and looking for reasons to terminate them quickly. Teller said only about 2% of projects survive this process. “If it’s a little bit more crazy than we thought, cool, high five, let’s put a bullet in its head and move on,” he remarked. He added that detaching people from their ideas is crucial: “If you [as the lead inventor] feel like ‘this is my baby,’ what are the chances I get you to practice real intellectual honesty?”
This method means the lab confronts technical and practical obstacles early, often discarding promising ideas to focus resources on those that can scale. The spinout model, Teller explained, solves a structural challenge that previously required X to find outside investors willing to take majority ownership of a project before it could leave Alphabet. By creating a fund “legally obligated only to invest in things that come from us,” X can maintain close ties to its spinouts while keeping them operationally independent.
Financial incentives for employees are built into the model. When a project spins out, the team behind it receives a significant equity stake “about as much as you would have gotten if you had started from your garage at that stage of funding, but without taking any risk in the meantime,” Teller said. Employees at X, however, receive standard Google compensation with no equity in early-stage projects, which he said eliminates financial pressures that might prevent them from terminating underperforming ideas.
In 2025, X has already spun out two companies: Taara, focused on wireless optical communication, and Heritable Agriculture, which applies machine learning to accelerate crop breeding. Previous spinouts include Malta (renewable energy storage), Dandelion (geothermal heating), and iyO (AI-powered earbuds).
Just before TechCrunch Disrupt, X introduced its newest independent venture, Anori, described as an AI platform for real estate, architecture, and construction industries. Teller said the company aims to tackle inefficiencies in building development — a sector responsible for roughly 25% of the world’s solid waste and 25% of global CO₂ emissions. “It’s literally on the Maslow’s hierarchy of needs — it’s where we live, where we spend most of our time. It’s a big chunk of the world’s GDP output,” he said.
Featured image credits: Kimberly White via Getty Images
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