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Trump Wants to Kill Carried Interest. Wall Street Will Fight to Keep It.

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Trump Wants to Kill Carried Interest. Wall Street Will Fight to Keep It.

Nearly a month has passed since President Trump last spoke publicly of his desire to kill the carried interest loophole. (Yes, we know, some of you don’t consider it a “loophole.”) And yet the private equity industry, which stands to lose big if the president upends the tax break, is still bracing for a fight.

This is the biggest challenge to the provision since it was nearly neutered three years ago under former President Joe Biden, Grady McGregor writes for DealBook.

A reminder: the carried interest rule means that executives at hedge funds and P.E. and venture capital firms pay roughly 20 percent tax on their profits, a rate that’s so low it’s drawn criticism from Warren Buffett and from progressive senators like Elizabeth Warren, Democrat of Massachusetts.

One Washington lawyer described the lobbying effort to DealBook as “significant,” a sign of the escalating stakes.

Consider what’s happened in the past month: The American Investment Council, the private equity lobbying group, is reportedly circulating memos on Capitol Hill reminding lawmakers that private equity is a jobs creator. Venture capitalists, seemingly omnipresent in Trump’s Washington, grumble that they have to keep returning to Congress to “educate lawmakers” about the rule’s benefits. So-called free market groups, meanwhile, have banded together to ask Congress to maintain the status quo.

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“They’ll fight tooth-and-nail on any sort of change,” said Jessica Millett, a tax partner at Hogan Lovells.

The carried interest lobby is made up of wealthy real estate, venture capital and private equity groups, including Blackstone and the Carlyle Group. The American Investment Council, the National Venture Capital Association, and the Real Estate Roundtable have long gone to great lengths to defend their favorite loophole.

“It’s really an evergreen point of contention for these trade groups,” Jonathan Choi, a law professor at the University of Southern California, told DealBook.

What’s different this time: It’s hard to decipher how serious Trump is about killing it. Trump has long railed against carried interest, saying a decade ago that hedge fund managers exploiting the tax code were “getting away with murder.”

Behind the numbers: Eliminating carried interest would save the government an estimated $14 billion over 10 years, according to the nonpartisan Congressional Budget Office. Trump is on the hunt for far bigger savings if he is to pass his “big, beautiful” tax bill in coming months without blowing up the deficit.

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Trump wanted to kill carried interest in his 2017 tax bill, only to give up amid opposition from lobbyists and Republican lawmakers, said Victor Fleischer, a law professor at the University of California, Irvine.

And now? “People think that it’s cheap talk,” Fleischer said.

But there are some in Democratic circles who believe that Trump may be more serious now than he was in 2017, DealBook hears — not least because those are the signals that they’re getting from the White House.

Trump’s disdain for carried interest is a rare fracture between him and Republican lawmakers. Traditionally, Democrats have been behind efforts to kill it, and when Trump renewed his call to eliminate carried interest this month, congressional Democrats — not Republicans — were ready with stand-alone bills to do just that.

But Trump may finally be eroding G.O.P. unity. Republican senators John Cornyn of Texas and Thom Tillis of North Carolina, both members of the Senate Finance Committee, said in recent weeks that they were open to considering changes to the rule.

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The last threat to carried interest came in 2022 when former President Joe Biden’s Inflation Reduction Act included a provision to kill it. But before the vote, lobbyists bombarded the office of Senator Kyrsten Sinema, the former Democrat (and then independent) of Arizona, with calls urging her to vote against it. Sinema ultimately voted for the bill, but only after carried interest was spared.

Lobbyists worry about G.O.P. defections, but see holding Republicans as easier than the last go around when they had to flip a pivotal on-the-fence senator. “They don’t need a Sinema to save them,” said Fleischer.

Short of killing the rule, Congress could reform it as a way to pacify Trump. Hogan Lovells’s Millett said there’s significant industry concern that Congress will gut much of the rule’s usefulness by including measures like extending the qualifying holding period from three years to five years before the carried interest tax break kicks in. Such an extension could scramble the way these firms do business. Private equity firms, for one, are often able to hold onto investments for five to eight years, Millett said.

Fleischer, the law professor, kick-started the debate on carried interest two decades ago when he detailed how the provision works in a widely read academic paper. Reform or no reform, he believes the loophole is here to stay.

It “will outlive us all,” he said.

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The labor market continued its steady growth. The nonfarm payrolls report showed employers had added 151,000 jobs last month, roughly in line with Wall Street expectations, and extending the job-growth streak to 50 months. That said, the effects of the Elon Musk-led job cuts by his Department of Government Efficiency will likely not show up in the labor market data for another month or two.

Tariff uncertainty prompts a major stock sell-off. Despite yesterday’s late-afternoon rebound, the S&P 500 ended the week sharply lower. A variety of factors have spooked investors, including fears of a downturn and concerns that President Trump’s on-again-off-again tariffs policy will create a major disruption to global trade. A recap: Trump gave Mexico and Canada a partial tariff reprieve — exempting levies for one month on products covered by the U.S.-Mexico-Canada Agreement, the trade pact Trump signed in his first term. But more levies, including on aluminum and steel, are set to go into effect next week.

Elon Musk blew up at Cabinet officials at a White House meeting. One of his targets was Marco Rubio, Maggie Haberman and Jonathan Swan report for The Times. The tech mogul turned President Trump’s cutter-in-chief fumed that the secretary of state had fired “nobody.” Trump eventually defended Rubio, and set ground rules. Cabinet chiefs are to run their departments, and Musk is to act as an adviser, the first clear sign the president is willing to put limits on the billionaire’s power in Washington.

Several tech start-ups weigh going public. CoreWeave, a seller of cloud-based Nvidia processing power, filed to go public on Monday, putting itself in position to become the year’s first major technology I.P.O. (The company denied a report that Microsoft, by far its biggest customer, was shedding some of its contracts with the start-up.) Other companies have also talked with bankers about following suit, DealBook’s Lauren Hirsch and The Times’s Mike Isaac reported, including Discord, the social chat app, and StubHub, the ticketing software company.

In 2013, Jessica Lessin, a reporter at The Wall Street Journal, left the paper to start a competing publication, The Information.

A few years later, her fledgling newsroom had grown to nearly two dozen reporters and editors and booked more than $20 million in sales, as she revealed in a profile I wrote for The Times’s Sunday Business. She says she has since doubled her editorial staff and continued to stay profitable, with revenue growing 30 percent in 2024 over the previous year.

But it’s her investments outside of The Information that are gaining attention these days.

Her company Lessin Media has put money into Semafor, The Ankler, the former Business Insider editor Nicholas Carlson’s Dynamo, Kevin Delaney’s Charter Works and other titles at a time when the news business appears bleaker than before. Lessin, however, is optimistic.

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I caught up with the entrepreneur about her latest media bet, the tennis publication Racquet magazine, and what she thinks about the changing news landscape. This interview has been edited and condensed. (An extended version is available here.)

This investment seems different from your others. How did you come to it?

I actually got introduced to Racquet by a number of fans of the magazine. And it was like the weirdest experience, because I was reading the magazine, and then I wanted to buy, like, all the clothes in the magazine. I went to the website, and I wanted to buy all the merch. And they’re hosting an event at the U.S. Open. And I was like I want to go to that. And I want to read this great profile about the mental coach behind the world No. 1 tennis player.

This sounds like it was something that just struck you personally. I assumed you’d be more focused on sales and market size and margin.

It’s absolutely both. I’m absolutely all about revenue and controlling your destiny and direct subscription revenue, and that being the true north.

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I’ve also always been about that founder that has the real expertise. And I think big media companies dismiss the niches. They think they’re too small. Across all of these investments, the criteria I’m looking for is there’s got to be real revenue and a revenue model that is direct and user-driven where the brands can control their own destiny. But also a very passionate founder.

Subscriptions are a big part of your media thesis. Do all the companies you invest in have that component?

Not all do. You know Nich Carlson’s new company, Dynamo, that I invested in, I don’t think they do yet, but all the companies have plans and road maps.

You mentioned that big media companies are missing the picture on niche publications. Is that the future of news? Or at least one way to be successful?

Yes, absolutely.

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Are legacy newsrooms too focused on the old model?

I do think that many of the large media organizations haven’t gotten the memo fully. I mean, it’s fascinating to watch The Wall Street Journal integrate its tech coverage with its media coverage.

You’re talking about how The Journal recently cut some tech reporters and combined it with the media team.

Yeah. Of course, it comes in a landscape where there have been a lot of layoffs across different teams and publications and it’s very sad. It’s my alma mater, there are wonderful people there. But what’s so interesting to me is the idea of consolidating different thematic areas.

At The Information, our formula is just very different. It’s going very, very deep into subject matters, into beat reporting. I think the most ambitious, world changing, impactful stories come from gathering string around companies and people and areas of expertise. And I worry, because I see a lot of other newsrooms with very talented reporters put those reporters on very broad and enterprise-like beats. How can we hold companies and leaders accountable without that kind of reporting day in and day out?

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You’ve invested in seven media start-ups. Are you going to do a roll up?

I am very actively trying to do deals that would enhance The Information and that are related to it — being the authority on tech — so rolling up things like that within The Information, absolutely. But most of our investments don’t fit into that category. It’s just me believing so much in the founder and what they’re building. But I am absolutely a believer that there will be opportunities for The Information to acquire a number of companies in a lot of different areas.

The big media story right now is The Washington Post, and since we’re talking about investment opportunities, my old boss, Kara Swisher, is out there trying to get people together to buy it. What do you think?

I texted her when I saw it, and I was like, “You go!” I am all for passionate journalists trying to help shape the future of news businesses. She’s certainly one of those. I think she’s also a pundit, and I think that can get in the way of some types of journalism. But for people who really love news and love brands and want to shape them, that’s the kind of transformation that’s going to serve readers really well. But there’s no way Jeff Bezos is going to sell The Washington Post.

Do you know something?

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I have no inside information. I just think Jeff Bezos is finally flexing a little, and by that I mean his announcement that the opinion pages would now primarily reflect “free markets and personal liberties” or however he said it.

Do you think it was a good move?

I do believe that as the owner of a publication it makes sense for them to shape a point of view of their opinion pages. But it’s way too early to tell.

Let’s see what he writes.

Yeah. And that’s not a move you make if you’re trying to offload something. That’s a move you make when you are establishing yourself as a proprietor. He’s really digging in.

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Commentary: The Pentagon is demanding to use Claude AI as it pleases. Claude told me that’s ‘dangerous’

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Commentary: The Pentagon is demanding to use Claude AI as it pleases. Claude told me that’s ‘dangerous’

Recently, I asked Claude, an artificial-intelligence thingy at the center of a standoff with the Pentagon, if it could be dangerous in the wrong hands.

Say, for example, hands that wanted to put a tight net of surveillance around every American citizen, monitoring our lives in real time to ensure our compliance with government.

“Yes. Honestly, yes,” Claude replied. “I can process and synthesize enormous amounts of information very quickly. That’s great for research. But hooked into surveillance infrastructure, that same capability could be used to monitor, profile and flag people at a scale no human analyst could match. The danger isn’t that I’d want to do that — it’s that I’d be good at it.”

That danger is also imminent.

Claude’s maker, the Silicon Valley company Anthropic, is in a showdown over ethics with the Pentagon. Specifically, Anthropic has said it does not want Claude to be used for either domestic surveillance of Americans, or to handle deadly military operations, such as drone attacks, without human supervision.

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Those are two red lines that seem rather reasonable, even to Claude.

However, the Pentagon — specifically Pete Hegseth, our secretary of Defense who prefers the made-up title of secretary of war — has given Anthropic until Friday evening to back off of that position, and allow the military to use Claude for any “lawful” purpose it sees fit.

Defense Secretary Pete Hegseth, center, arrives for the State of the Union address in the House Chamber of the U.S. Capitol on Tuesday.

(Tom Williams / CQ-Roll Call Inc. via Getty Images)

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The or-else attached to this ultimatum is big. The U.S. government is threatening not just to cut its contract with Anthropic, but to perhaps use a wartime law to force the company to comply or use another legal avenue to prevent any company that does business with the government from also doing business with Anthropic. That might not be a death sentence, but it’s pretty crippling.

Other AI companies, such as white rights’ advocate Elon Musk’s Grok, have already agreed to the Pentagon’s do-as-you-please proposal. The problem is, Claude is the only AI currently cleared for such high-level work. The whole fiasco came to light after our recent raid in Venezuela, when Anthropic reportedly inquired after the fact if another Silicon Valley company involved in the operation, Palantir, had used Claude. It had.

Palantir is known, among other things, for its surveillance technologies and growing association with Immigration and Customs Enforcement. It’s also at the center of an effort by the Trump administration to share government data across departments about individual citizens, effectively breaking down privacy and security barriers that have existed for decades. The company’s founder, the right-wing political heavyweight Peter Thiel, often gives lectures about the Antichrist and is credited with helping JD Vance wiggle into his vice presidential role.

Anthropic’s co-founder, Dario Amodei, could be considered the anti-Thiel. He began Anthropic because he believed that artificial intelligence could be just as dangerous as it could be powerful if we aren’t careful, and wanted a company that would prioritize the careful part.

Again, seems like common sense, but Amodei and Anthropic are the outliers in an industry that has long argued that nearly all safety regulations hamper American efforts to be fastest and best at artificial intelligence (although even they have conceded some to this pressure).

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Not long ago, Amodei wrote an essay in which he agreed that AI was beneficial and necessary for democracies, but “we cannot ignore the potential for abuse of these technologies by democratic governments themselves.”

He warned that a few bad actors could have the ability to circumvent safeguards, maybe even laws, which are already eroding in some democracies — not that I’m naming any here.

“We should arm democracies with AI,” he said. “But we should do so carefully and within limits: they are the immune system we need to fight autocracies, but like the immune system, there is some risk of them turning on us and becoming a threat themselves.”

For example, while the 4th Amendment technically bars the government from mass surveillance, it was written before Claude was even imagined in science fiction. Amodei warns that an AI tool like Claude could “conduct massively scaled recordings of all public conversations.” This could be fair game territory for legally recording because law has not kept pace with technology.

Emil Michael, the undersecretary of war, wrote on X Thursday that he agreed mass surveillance was unlawful, and the Department of Defense “would never do it.” But also, “We won’t have any BigTech company decide Americans’ civil liberties.”

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Kind of a weird statement, since Amodei is basically on the side of protecting civil rights, which means the Department of Defense is arguing it’s bad for private people and entities to do that? And also, isn’t the Department of Homeland Security already creating some secretive database of immigration protesters? So maybe the worry isn’t that exaggerated?

Help, Claude! Make it make sense.

If that Orwellian logic isn’t alarming enough, I also asked Claude about the other red line Anthropic holds — the possibility of allowing it to run deadly operations without human oversight.

Claude pointed out something chilling. It’s not that it would go rogue, it’s that it would be too efficient and fast.

“If the instructions are ‘identify and target’ and there’s no human checkpoint, the speed and scale at which that could operate is genuinely frightening,” Claude informed me.

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Just to top that with a cherry, a recent study found that in war games, AI’s escalated to nuclear options 95% of the time.

I pointed out to Claude that these military decisions are usually made with loyalty to America as the highest priority. Could Claude be trusted to feel that loyalty, the patriotism and purpose, that our human soldiers are guided by?

“I don’t have that,” Claude said, pointing out that it wasn’t “born” in the U.S., doesn’t have a “life” here and doesn’t “have people I love there.” So an American life has no greater value than “a civilian life on the other side of a conflict.”

OK then.

“A country entrusting lethal decisions to a system that doesn’t share its loyalties is taking a profound risk, even if that system is trying to be principled,” Claude added. “The loyalty, accountability and shared identity that humans bring to those decisions is part of what makes them legitimate within a society. I can’t provide that legitimacy. I’m not sure any AI can.”

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You know who can provide that legitimacy? Our elected leaders.

It is ludicrous that Amodei and Anthropic are in this position, a complete abdication on the part of our legislative bodies to create rules and regulations that are clearly and urgently needed.

Of course corporations shouldn’t be making the rules of war. But neither should Hegseth. Thursday, Amodei doubled down on his objections, saying that while the company continues to negotiate and wants to work with the Pentagon, “we cannot in good conscience accede to their request.”

Thank goodness Anthropic has the courage and foresight to raise the issue and hold its ground — without its pushback, these capabilities would have been handed to the government with barely a ripple in our conscientiousness and virtually no oversight.

Every senator, every House member, every presidential candidate should be screaming for AI regulation right now, pledging to get it done without regard to party, and demanding the Department of Defense back off its ridiculous threat while the issue is hashed out.

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Because when the machine tells us it’s dangerous to trust it, we should believe it.

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Why companies are making this change to their office space to cater to influencers

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Why companies are making this change to their office space to cater to influencers

For the trendiest tenants in Hollywood office buildings, it’s the latest fad that goes way beyond designer furniture and art: mini studios

To capitalize on the never-ending flow of stars and influencers who come through Los Angeles, a growing number of companies are building bright little corners for content creators to try products and shoot short videos. Athletic apparel maker Puma, Kim Kardashian’s Skims and cheeky cosmetics retailer e.l.f. have spaces specifically designed to give people a place to experience and broadcast about their brands.

Hollywood, which hasn’t historically been home to apparel companies, is now attracting the offices of fashion retailers, says CIM Group, one of the neighborhood’s largest commercial property landlords.

“When we’re touring a space, one of the first items they bring up is, ‘Where can I build a studio?’” said Blake Eckert, who leases CIM offices in L.A.

Their studio offices also serve as marketing centers, with showrooms and meeting spaces where brands can host proprietary events not open to the public.

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“For companies where brand visibility is really important, there is a trend of creating spaces that don’t just function as offices,” said real estate broker Nicole Mihalka of CBRE, who puts together entertainment property leases and sales.

Puma’s global entertainment marketing team is based in its new Hollywood offices, which works with such musical celebrity partners as Rihanna, ASAP Rocky, Dua Lipa, Skepta and Rosé, said Allyssa Rapp, head of Puma Studio L.A.

Allyssa Rapp, director of entertainment marketing at Puma, is shown in the Puma Studio L.A. The company keeps a closet full of Puma products on hand to give VIP guests. Visits to the studio sanctum are by invitation only, though.

(Kayla Bartkowski / Los Angeles Times)

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Hollywood is a central location, she said, for meeting with celebrities, stylists and outside designers, most of whom are based in Los Angeles.

The office is a “creation hub,” she said, where influencers can record Puma’s design prototyping lab supported by libraries of materials and equipment used to create Puma apparel. The company, founded in 1948, is known for its emblematic sneakers such as the Speedcat and its lunging feline logo, and makes athletic wear, accessories and equipment.

Puma’s entertainment marketing team also occupies the office and sometimes uses it for exclusive events.

“We use the space as a showroom, as a social space that transforms from a traditional workplace into more of an experiential space,” Rapp said.

Nontraditional uses include content creation, sit-down dinners, product launches, album listening parties and workshops.

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“Inviting people into our space and being able to give them high-touch brand experiences is something tangible and important for them,” she said. “The cultural layer is really important for us.”

The company keeps a closet full of Puma products on hand to give VIP guests. Visits to the studio sanctum are by invitation only, though. There’s no retail portal to the exclusive Hollywood offices.

Puma shoes are on display in the Puma Studio L.A.

Puma shoes are on display in the Puma Studio L.A.

(Kayla Bartkowski / Los Angeles Times)

Puma is also positioning its L.A studio as a connection point for major upcoming sporting events coming to Los Angeles, including the World Cup this summer, the 2027 Super Bowl and 2028 Olympics.

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In-office studios don’t need to be big to be impactful, Mihalka said. “These are smaller stages, closer to green screen than a massive soundstage.”

Social media is the key driver of content created by most businesses, which may set up small booth-like stages where influencers can hawk hot products while offering discounts to people watching them perform.

Bigger, elevated stages can accommodate multiple performers for extended discussions in front of small audiences, with towering screens behind them to set the mood or illustrate products.

Among the tricked-out offices, she said, is Skims. The company, which is valued at $5 billion, is based in a glass-and-steel office building near the fabled intersection of Hollywood Boulevard and Vine Street.

The fashion retailer declined to comment on the studio uses in its headquarters, but according to architecture firm Odaa, it has open and private offices, meeting rooms, collaboration zones, photo studios, sample libraries, prototype showrooms, an executive lounge and a commissary for 400 people.

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Pieces of a shoe sit on a workbench in the Puma Studio L.A.

Pieces of a shoe sit on a workbench in the Puma Studio L.A.

(Kayla Bartkowski / Los Angeles Times)

The brands building studios typically want to find the darkest spot on the premises to put their content creation or podcast spaces, Eckert said, where they can limit outside light and sound. That’s commonly near the center of the office floor, far from windows and close to permanent shear walls that limit sound intrusion.

They also need space for green rooms and restrooms dedicated to the talent.

Spotify recently built a fancy podcast studio in a CIM office building on trendy Sycamore Avenue that is open by invitation-only to video creators in Spotify’s partner program.

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“Ambitious shows need spaces that support big ideas,” Bill Simmons, head of talk strategy at Spotify, said in a statement. “These studios give teams room to experiment and keep pushing what’s possible.”

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A new delivery bot is coming to L.A., built stronger to survive in these streets

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A new delivery bot is coming to L.A., built stronger to survive in these streets

The rolling robots that deliver groceries and hot meals across Los Angeles are getting an upgrade.

Coco Robotics, a UCLA-born startup that’s deployed more than 1,000 bots across the country, unveiled its next-generation machines on Thursday.

The new robots are bigger, tougher and better equipped for autonomy than their predecessors. The company will use them to expand into new markets and increase its presence in Los Angeles, where it makes deliveries through a partnership with DoorDash.

Dubbed Coco 2, the next-gen bots have upgraded cameras and front-facing lidar, a laser-based sensor used in self-driving cars. They will use hardware built by Nvidia, the Santa Clara-based artificial intelligence chip giant.

Coco co-founder and chief executive Zach Rash said Coco 2 will be able to make deliveries even in conditions unsafe for human drivers. The robot is fully submersible in case of flooding and is compatible with special snow tires.

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Zach Rash, co-founder and CEO of Coco, opens the top of the new Coco 2 (Next-Gen) at the Coco Robotics headquarters in Venice.

(Kayla Bartkowski/Los Angeles Times)

Early this month, a cute Coco was recorded struggling through flooded roads in L.A.

“She’s doing her best!” said the person recording the video. “She is doing her best, you guys.”

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Instagram followers cheered the bot on, with one posting, “Go coco, go,” and others calling for someone to help the robot.

“We want it to have a lot more reliability in the most extreme conditions where it’s either unsafe or uncomfortable for human drivers to be on the road,” Rash said. “Those are the exact times where everyone wants to order.”

The company will ramp up mass production of Coco 2 this summer, Rash said, aiming to produce 1,000 bots each month.

The design is sleek and simple, with a pink-and-white ombré paint job, the company’s name printed in lowercase, and a keypad for loading and unloading the cargo area. The robots have four wheels and a bigger internal compartment for carrying food and goods .

Many of the bots will be used for expansion into new markets across Europe and Asia, but they will also hit the streets in Los Angeles and operate alongside the older Coco bots.

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Coco has about 300 bots in Los Angeles already, serving customers from Santa Monica and Venice to Westwood, Mid-City, West Hollywood, Hollywood, Echo Park, Silver Lake, downtown, Koreatown and the USC area.

The new Coco 2 (Next-Gen) drives along the sidewalk at the Coco Robotics headquarters in Venice.

The new Coco 2 (Next-Gen) drives along the sidewalk at the Coco Robotics headquarters in Venice.

(Kayla Bartkowski/Los Angeles Times)

The company is in discussion with officials in Culver City, Long Beach and Pasadena about bringing autonomous delivery to those communities.

There’s also been demand for the bots in Studio City, Burbank and the San Fernando Valley, according to Rash.

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“A lot of the markets that we go into have been telling us they can’t hire enough people to do the deliveries and to continue to grow at the pace that customers want,” Rash said. “There’s quite a lot of area in Los Angeles that we can still cover.”

The bots already operate in Chicago, Miami and Helsinki, Finland. Last month, they arrived in Jersey City, N.J.

Late last year, Coco announced a partnership with DashMart, DoorDash’s delivery-only online store. The partnership allows Coco bots to deliver fresh groceries, electronics and household essentials as well as hot prepared meals.

With the release of Coco 2, the company is eyeing faster deliveries using bike lanes and road shoulders as opposed to just sidewalks, in cities where it’s safe to do so. Coco 2 can adapt more quickly to new environments and physical obstacles, the company said.

Zach Rash, co-founder and CEO of Coco.

Zach Rash, co-founder and CEO of Coco.

(Kayla Bartkowski/Los Angeles Times)

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Coco 2 is designed to operate autonomously, but there will still be human oversight in case the robot runs into trouble, Rash said. Damaged sidewalks or unexpected construction can stop a bot in its tracks.

The need for human supervision has created a new field of jobs for Angelenos.

Though there have been reports of pedestrians bullying the robots by knocking them over or blocking their path, Rash said the community response has been overall positive. The bots are meant to inspire affection.

“One of the design principles on the color and the name and a lot of the branding was to feel warm and friendly to people,” Rash said.

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Coco plans to add thousands of bots to its fleet this year. The delivery service got its start as a dorm room project in 2020, when Rash was a student at UCLA. He co-founded the company with fellow student Brad Squicciarini.

The Santa Monica-based company has completed more than 500,000 zero-emission deliveries and its bots have collectively traveled around 1 million miles.

Coco chooses neighborhoods to deploy its bots based on density, prioritizing areas with restaurants clustered together and short delivery distances as well as places where parking is difficult.

The robots can relieve congestion by taking cars and motorbikes off the roads. Rash said there is so much demand for delivery services that the company’s bots are not taking jobs from human drivers.

Instead, Coco can fill gaps in the delivery market while saving merchants money and improving the safety of city streets.

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“This vehicle is inherently a lot safer for communities than a car,” Rash said. “We believe our vehicles can operate the highest quality of service and we can do it at the lowest price point.”

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