Alphabet’s X moonshot factory, under the leadership of Astro Teller, is undergoing a strategic shift by increasingly spinning off its ambitious technology projects as independent companies rather than integrating them into Alphabet’s corporate structure. This change is driven by a dedicated venture fund, Series X Capital, which has raised over $500 million and is managed by Gideon Yu, a former YouTube executive and Facebook CFO. Unlike Alphabet’s other investment arms—GV, CapitalG, and Gradient Ventures—Series X Capital is legally bound to invest exclusively in startups emerging from X, and Alphabet itself holds only a minority stake. Teller emphasized that if Alphabet were the sole investor, the fund would remain within the parent company, undermining the goal of creating truly independent ventures. By remaining a small investor, X ensures that spun-out companies can operate autonomously, free from the constraints of Alphabet’s scale and bureaucracy. This evolution marks a departure from X’s earlier model, where successful projects like Waymo (self-driving cars) and Wing (drone delivery) were absorbed as subsidiaries. Teller noted that over the past decade, X has learned that some moonshots thrive best outside Alphabet’s ecosystem, especially when they require a different culture, speed, or business model. A true moonshot, according to X, must address a massive global problem, propose a transformative solution, and rely on breakthrough technology that offers a “glimmer of hope” for success. Crucially, if an idea sounds reasonable, it’s not a moonshot—ambition and audacity are key. X tests these ideas rigorously, with a focus on quickly identifying flaws. The lab treats every project as a hypothesis, using small investments to learn whether the idea is more or less crazy than initially thought. Teller stressed the importance of intellectual honesty: if a team is emotionally attached to an idea, it’s harder to kill it. To prevent this, X deliberately avoids identifying project originators, even for major successes like Waymo and Wing. This detachment allows for objective evaluation and early termination of unviable ideas. Despite this emotional distance, X employees are highly incentivized to succeed. Those working on spinout projects receive significant equity in the new company—comparable to what founders would get if they launched from scratch—without the financial risk of early-stage startups. Teller frames the trade-off clearly: while the upside may be greater outside X, joining X offers the unique opportunity to “count cards” in innovation with no personal financial risk. Employees are paid like regular Google staff and receive no equity in early-stage ideas, since they’re still just hypotheses, not companies. This structure removes the fear of failure and enables teams to kill their own ideas without jeopardizing their livelihoods. In 2025, X has already spun out Taara (wireless optical communication) and Heritable Agriculture (AI-driven crop breeding), joining earlier successes like Malta (energy storage), Dandelion (geothermal heating), and iyO (AI earbuds). The latest addition, Anori, is an AI platform aimed at streamlining real estate, architecture, and urban development—industries responsible for 25% of global CO₂ emissions and solid waste. Teller highlighted the scale of the problem as a key reason Anori qualifies as a moonshot. Industry observers see this shift as a sign of X’s maturation. By creating independent companies, X not only accelerates innovation but also fosters entrepreneurial culture and accountability. The model could become a blueprint for how large tech firms incubate radical ideas without stifling them. With Series X Capital’s focus and a clear exit strategy, X is no longer just a lab—it’s a launchpad for the next generation of disruptive tech.