Hi,

You probably saw last week’s stories in HeatMap and Bloomberg.

Here's my response (on LinkedIn too)

What we actually know:
- It sounds like 2 or more startups got communications from Microsoft that said something like ‘we’re pausing negotiating with you right now’ on deals they were discussing.
- Importantly, the messages didn’t say “we’re pausing our program” from what I can tell.
- Microsoft has not said anything official about any of this.
- Microsoft holds the majority of signed contracts for carbon dioxide removal credits (90%+ of volume, close to $10B of commitments). Including buying 626,000 tons last week from Svante.

This has been interpreted as signaling a larger shift in Microsoft strategy. Now look, it’s possible that these two communications signal a larger move than just closing negotiations with two startups. Maybe an announcement will come in the news three seconds after I send this. But that’s not what we know currently. I want to start with what we actually know before speculating, separating facts from narrative matters in moments like this.

If you find speculation useful:

Here’s how I frame it, which you might find helpful when answering questions from investors, buyers, or your boss.

If Microsoft paused purchases: A pause would mean they pick up again at some point in the not distant future. "How long" matters a lot. For small startups removing carbon dioxide, you would want to be in position when they start buying again, so this is an opportunity to get to work and close the gap. For more mature suppliers, you have other deals you’re pushing on, so this would be a moment to keep focus there and have wins to show Microsoft when they come back. And for folks on the buyer’s side, any details about why the pause would be helpful, but a pause can just be a pause.

If Microsoft were to stop purchases: Then we would salute Microsoft for all the work they did on carbon dioxide removal, and look forward to who will carry the torch next. The impact depends on the “why”. Did they buy enough to hit the goal they originally set out to? Something else? Regardless, it would mean an immediate drop in demand for the industry. It would leave a missing buyer in the middle of the maturity curve, and losing that creates a real hole in how startups grow. If that gap in the ecosystem were a big deal to your funding round in the next 12 months, then figure out how to close it. If it’s further out, keep an eye on it, but you wouldn't need to focus on it right then. From the buyer side, both of those gaps can also be opportunities. Someone would want to become the new number one.

What to do now
Separating facts from hope is important in our work. It’s a fact that Earth is at the highest level of carbon dioxide in humanity’s history. It’s a fact that last year humanity emitted more CO2 than ever. I have very few facts that point to us successfully stabilizing the planet. And yet my hope is for planetary balance. It’s ok to have hope.

Keep an eye out for any clarification from Microsoft. And I look forward to our stable planet and thriving human civilization.