Alphabet’s X moonshot factory is changing its approach to launching ambitious technology projects. It is increasingly spinning them out as independent companies rather than keeping them within the Alphabet corporate structure. This shift was revealed by X’s leader, Astro Teller, at TechCrunch Disrupt 2025.
The new strategy relies on a dedicated venture fund that exists solely to invest in these X spinouts. In this fund, Alphabet is only a minority investor. Teller explained that if Alphabet was the sole investor, the fund would be inside the company, defeating the purpose of creating external independence. This fund is called Series X Capital, which has raised over five hundred million dollars and is run by Gideon Yu, a former YouTube executive and Facebook CFO.
Unlike Alphabet’s other investment arms such as GV, CapitalG, and Gradient Ventures, Series X Capital is legally required to invest only in companies that originate from X. This marks a significant evolution for the lab. In the past, successful projects like Waymo and Wing became stand-alone subsidiaries of Alphabet. Teller stated that over the past decade, X has learned that while some projects benefit from Alphabet’s scale, others can move faster and do not gain an advantage from being part of the larger company.
He said that landing a project just outside of Alphabet, where X can maintain a close relationship and strategic benefits without direct control, is a sensible approach. Teller emphasized that this spinout strategy is only possible because of X’s culture of intellectual honesty, which includes actively celebrating the termination of promising ideas.
X defines a moonshot as an endeavor that solves a huge global problem, proposes a product or service that could eliminate that problem, and uses breakthrough technology that offers a glimmer of hope for a solution. Teller noted that if a proposed moonshot sounds reasonable, the company is not interested because it would not truly be a moonshot by definition.
Ideas that meet these criteria are tested ruthlessly. X looks for reasons to kill them early. Teller explained that for a small amount of money, they can learn if an idea is more or less feasible than initially thought. If it is more crazy, the team celebrates the learning and moves on.
This process requires employees to detach themselves from their ideas. Teller said he often does not even know who started major projects like Waymo or Wing. He believes that if a lead inventor feels too much ownership, it prevents the necessary intellectual honesty to kill a project. In practice, X tackles the hardest parts of a project first, actively seeking reasons to shut it down. This results in a two percent success rate, which Teller views as a feature of the system, not a failure.
The spinout structure also addresses a practical financial problem. Previously, X had to find outside venture investors willing to take a majority stake in a business to spin it out. Now, with a fund that deeply understands X, the process is systematized while maintaining close ties. When projects do spin out, employees involved get a significant equity stake in the new company, comparable to what they might have received if they had started the company in a garage, but without having taken any personal financial risk.
The pitch to potential X employees is clear about this trade-off. Teller stated that while the potential financial upside might be bigger outside of X, working at X allows innovators to take calculated risks with no fear and no personal financial danger. Employees are paid standard salaries with no equity in early-stage projects, which removes the pressure to continue failing ideas and makes it easier to discard them.
In 2025, X has spun out at least two companies: Taara, which develops wireless optical communication technology, and Heritable Agriculture, a biotech firm using machine learning to accelerate crop breeding. Previous spinouts include Malta for renewable energy storage, Dandelion for geothermal heating, and iyO for AI-powered earbuds.
Just before the Disrupt event, X announced its newest moonshot company, Anori. It is an AI platform designed to help real estate developers, architects, construction industries, and cities manage the complexities of new building projects. When asked why this is a moonshot, Teller pointed to the immense scale of the problem and opportunity. He noted that the built environment generates about twenty-five percent of the world’s solid waste and carbon dioxide output, is a fundamental human need, and constitutes a large portion of global GDP.