Open Source: Raleigh’s biggest bank is in the spotlight. But will startups follow?

I’m Brian Gordon, tech reporter for The News & Observer, and this is Open Source, a weekly rundown of business, labor and technology in North Carolina.

First Citizens Bank actually did it. After a week of rumors, Raleigh’s traditional, family-owned, hitherto boring bank acquired all of Silicon Valley Bank’s deposits and loans from the federal government in a deal announced late Sunday night.

Initial reactions from national outlets, local business leaders and Wall Street were glowing.

First Citizens’ stock price has soared 60% this week, leaving CEO Frank Holding Jr. and his four sisters — who together own around a fifth of the bank’s shares — even wealthier.

As the seller, the government had lacked leverage (the FDIC didn’t want to run a bank), and First Citizens seemed to have secured a pretty sweet deal:

• It bought SVB’s $72 billion loan portfolio at a $16.5 billion discount.

• The government agreed to share in losses or gains from those loans, shielding First Citizens from worst outcomes.

• The FDIC loaned First Citizens $35 billion at an agreeable 3.5%-fixed rate to cover the deal.

• First Citizens is paying the government in company stock, worth up to $500 million.

Despite its conservative label, First Citizens has a track record of scooping up failed banks. It’s made 20 FDIC-assisted bank purchases since 2009. It might still be North Carolina’s fourth largest bank, but it’s breaking into the 20 biggest banks nationally.

And its latest move could reshape the Triangle.

Silicon Valley Bank catered to early-stage tech startups, and Raleigh-Durham is an obvious tech hot spot. The morning after the deal, Holding told investors his bank was committed to growing in Research Triangle Park “by combining First Citizens’ traditional relationship banking, creativity and ability with the strengths, relationships and expertise of legacy SVB.”

But will SVB’s former customers trust a new lender, one with a completely different reputation?

I got a small peak into that answer this week at the 2023 Venture Connect conference in Research Triangle Park, hosted by the North Carolina nonprofit Council for Entrepreneurial Development. The two-day event brought together investors and startup founders who arrived in hopes of striking a deal (or at least making a few connections).

On the first day, a Charlotte-based investor told me First Citizens was “the furthest thing” from Silicon Valley Bank. He added First Citizens wasn’t among “the first 10 banks” he would’ve recommended to founders.

Maybe a new reputation will abruptly form. Or maybe First Citizens knows how to benefit from the deal even if it never becomes a haven for emerging tech firms. But the investor’s comments highlighted just how wide the gap is that First Citizens would have to close to be seen as a go-to place for startups.

Others at Venture Connect felt similarly.

“I’m not sure they know how to work with an SVB, which is culturally and temperamentally different than what they’re used to,” the head of a Raleigh-based tech firm told me. “It will take a few years for the bank to remake itself to be a tech-focused bank in my opinion.”

Biden comes to town

President Joe Biden had visited Wolfspeed before.

Well technically, Vice President Biden had visited Wolfspeed, then called Cree, on a 2010 tour of the Durham tech company’s RTP campus. Back then, Cree primarily made LEDs and light bulbs. Today, it’s pivoted exclusively toward the manufacturing of a unique kind of semiconductor chips.

“Hell of a lot more than light bulbs now,” Biden said during his speech at the facility Tuesday.

The president was in town to highlight his administration’s economic agenda, including the passage of the CHIPS Act, which Wolfspeed hopes to benefit from. But Biden opened his remarks with a plea for reinstating the assault weapons ban. It was the day after a shooter killed three children and three adults at a Nashville school.

As a local reporter, I got to tour Wolfspeed’s facilities with the president. It sounds a bit cooler than it was — the whole thing was a production, very staged — but being in the same room as a president is a very neat part of the job that I don’t take for granted.

Plus, I scored a box of M&Ms from Air Force One:

Hey Hillsborough! Google Fiber is coming

Google Fiber is extending to Hillsborough. Earlier this month, the Orange County town announced Google will build a fiber-optic network “in and around” the community to offer residents gigabit internet. Installation is expected to start in April, and that means more construction — something Hillsborough Mayor Jenn Weaver acknowledged.

“Hillsborough residents and businesses have been asking for more options for internet service for a long time,” she said in a statement. “It will also take a lot of patience from all of us as we work through the disruptions of the installation, but I think it will be well worth it when we get to the other side.”

Google Fiber says it’s expanding elsewhere in the Triangle too (though it’s taken its time.) You can see if the internet provider is available at your address here.

Short Stuff: ChatGPT at UNC

• Bob Ingram died late last week at the age of 80. A former pharmaceutical executive, Ingram steered the Triangle’s life science industry as head of Glaxo and later as an investor. He also had a famous Porsche collection.

• Tech job fair alert. The North Carolina Technology Association is hosting a virtual job expo on April 12. So far, 15 employers have signed up to recruit for hundreds of roles.

• A UNC instructor explicitly banned ChatGPT on a recent assignment. My friend, who’s studying at the Gillings School of Global Public Health, passed it along. It’s the first explicit ban on the popular AI language platform I’ve seen in academia. The instructor put it in bold, so they must feel it’s important.

The threat of plagiarism is real, but I’m curious if other professors are more accepting of ChatGPT, trying to incorporate it into assignments/lessons.

National Tech Happenings

TikTok ban talk is ramping up. Florida Sen. Marco Rubio’s office posted a Q&A titled “When will TikTok be banned?” Not if.

Artificial intelligence could replace up to 300 million jobs, Goldman Sachs found. I hope newsletter writer isn’t one.

Elon Musk says only paid Twitter Blue Subscribers will get certain site privileges, like appearing in “For You” timelines. Even dictionaries are razzing Twitter now:

Thanks for reading!

This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work.