Alphabet’s experimental division, known as X—the organization often described as the company’s ‘moonshot factory’—is undergoing a profound transformation in how it nurtures and ultimately launches its most daring technologies into the marketplace. Rather than keeping these ambitious projects tethered within Alphabet’s vast corporate ecosystem, X has increasingly adopted a strategy of releasing them as self-sufficient companies. This structural shift, revealed by X’s CEO Astro Teller during his appearance at TechCrunch Disrupt, marks a decisive evolution in how the organization translates radical innovation into tangible business outcomes.
At the heart of this new paradigm lies a purpose-built venture fund dedicated exclusively to supporting businesses that originate from X. Importantly, Alphabet participates in this fund only as a minority investor, deliberately avoiding the pitfalls of internal ownership. Teller elaborated that if Alphabet were the sole limited partner, the fund—and any resulting investments—would still remain confined within Alphabet’s legal and operational borders, undermining the very independence X seeks to foster. The solution, therefore, was to design a structure where Alphabet plays a smaller, more strategic role, allowing each spinout to breathe outside the corporate membrane while maintaining close and mutually beneficial alignment.
This specialized fund, known as Series X Capital, has already secured over $500 million in funding and is led by Gideon Yu, a former YouTube executive and Facebook chief financial officer. Initially disclosed by Bloomberg in the previous year, Series X Capital is distinctive not only because of its financial magnitude but also due to its stringent legal mandate: it may invest solely in startups born from X’s research pipeline. Unlike the company’s other investment arms—GV, which focuses on early-stage startups; CapitalG, specializing in growth corporations; and Gradient Ventures, centered on artificial intelligence—Series X Capital stands apart as an extension purposefully crafted to ensure that only X-originated ventures receive its backing.
This approach represents an important maturation for X. Historically, the lab’s most successful projects, such as Waymo, the autonomous driving company, and Wing, the drone-based delivery service, graduated into independent Alphabet subsidiaries. However, over the past decade, X’s leadership has realized that not every moonshot thrives within Alphabet’s structure. Some projects, by their very nature, demand autonomy and a more agile environment that allows them to evolve without the constraints of a large corporate framework. Teller explained this balance metaphorically, noting that positioning these ventures ‘just outside the Alphabet membrane’ permits close strategic collaboration without the overreach of direct control.
Teller emphasized that this model of innovation only functions because of X’s resolute commitment to intellectual honesty—a core cultural tenet that celebrates, rather than resents, the act of terminating promising ideas. Within X, a ‘moonshot’ must meet three strict conditions: it should target a global-scale problem; propose a revolutionary product or service capable of solving it; and rely on some form of groundbreaking technological innovation that offers at least a faint but credible hope of success. If an idea sounds too reasonable or incremental, Teller remarked, then by definition, it fails to qualify as a true moonshot. The lab seeks concepts that appear almost implausible at first, because only those have the potential to create transformative change.
Once an idea meets these lofty standards, it faces an equally rigorous testing process designed not to validate but to challenge it—to expose its weaknesses quickly and conclusively. Teller described X’s methodology as a form of scientific trial, where hypotheses about radical technologies are tested with modest financial investment to determine whether they are slightly less or more ‘crazy’ than initially imagined. If evidence shows that a concept veers too far into impractical territory, the team celebrates its termination rather than mourns its loss, proudly declaring, ‘high five—let’s put a bullet in its head and move on.’ This relentless pruning ensures that only the rarest, most viable ideas survive.
Such intellectual discipline necessitates emotional detachment. Teller intentionally avoids knowing who originated many of X’s most famous projects, including Waymo and Wing, because personal ownership can obscure truth-seeking. When inventors perceive their projects as ‘their babies,’ Teller argued, intellectual honesty becomes elusive. Hence, at X, the process of exploration is detached from personal ego—an approach that enables teams to make clear-eyed decisions about whether to persevere or pivot. Practically, X accelerates this process by tackling the most difficult technical challenges first, deliberately seeking reasons a concept might fail. The consequence of this rigorous filtering is a startling statistic: only about two percent of projects ultimately succeed. Yet Teller framed this not as a shortcoming but as a necessary attribute of a system designed to embrace bold experimentation.
Running such an audacious laboratory is expensive, and the spinout model solves multiple challenges simultaneously. Previously, for an X project to exit Alphabet’s ownership, it had to find external investors willing to acquire a majority stake. Now, with Series X Capital serving as a dedicated and deeply aligned partner, X can streamline this process while retaining close strategic relationships. The new structure institutionalizes a mechanism for scaling innovation beyond Alphabet, ensuring that groundbreaking technologies move forward efficiently without bureaucratic friction.
Although X discourages emotional attachment to ideas, it encourages strong alignment of economic incentives when projects graduate into standalone companies. Teams whose ideas evolve into independent ventures receive a significant share of equity, mirroring the rewards of traditional startup founders but without the personal financial risk. Teller explained at Disrupt that employees whose projects spin out effectively earn a stake ‘as if they had built it from their garage,’ yet with the stability and security of working within Alphabet during its formative stages.
This arrangement is explicit in recruitment as well. Teller’s message to prospective employees emphasizes that while joining X might not yield the extreme financial windfalls of founding an independent startup, it offers the unparalleled opportunity to work at the cutting edge of multiple ambitious technologies, with the freedom to experiment without fear of personal loss. Within X, employees receive compensation comparable to other Google staff members but no equity in early-stage prototypes, which are not yet formal companies. This approach removes the emotional and financial obstacles that frequently prevent founders from abandoning nonviable ideas. As Teller put it, team members can easily decide to discard a failing concept without feeling as though they are jeopardizing their future or their families’ security.
Through this model, X has successfully spun out several ventures, including two notable companies in 2025: Taara, which pioneers wireless optical communication technology, and Heritable Agriculture, a biotech firm using machine learning to accelerate plant breeding. Earlier graduates such as Malta, Dandelion, and iyO continue this lineage, each addressing complex challenges in renewable energy, sustainable housing, and intelligent audio systems, respectively.
Adding to this momentum, on the eve of TechCrunch Disrupt, X introduced its latest moonshot, Anori—a new artificial intelligence platform intended to help real estate developers, architects, construction companies, and urban planners navigate the immense complexity of modern building projects. Teller justified Anori’s classification as a moonshot by emphasizing the colossal scale of the problem it addresses: the built environment accounts for roughly one-quarter of global solid waste and carbon dioxide emissions while representing a substantial portion of global economic activity. Given that housing and infrastructure form the foundation of human life, positioned quite literally near the base of Maslow’s hierarchy of needs, Teller suggested that transforming this sector could not be more consequential.
For audiences eager to explore his full discussion at TechCrunch Disrupt, the complete conversation with Astro Teller can be viewed beginning at the 6:08 mark, where he expands further on X’s philosophy of radical experimentation, disciplined failure, and the art of turning improbable dreams into scalable realities.
Sourse: https://techcrunch.com/2025/11/02/alphabet-is-increasingly-launching-moonshot-projects-as-independent-companies-heres-why/
