The Exchanges

Q You mentioned that OpenAI and ChatGPT being the equivalent of the browser in terms of the consumerization and the access that it provides consumers. You tweeted before, the daylight between what we'll be able to do with AI and what we'll actually do with AI is human resistance. Can I ask, what did you mean by this human resistance, Vinod, and how does it show itself?

A Well, there's two types of things. You know, first, a genuine concern That AI will displace jobs, and what do we do with that? If I'm right, the level of job displacement over 20, 25 years will be large, and we've dealt with that kind of job displacement before, but over multiple generations, for example, in agriculture when it was 50% of all jobs in the US in 1900 and went to four percent by 1970. If the change is happening rapidly, Then job displacement may cause us to have rules and regulations that slow down progress. Another example could be, ah, physicians resisting AI being able to do physician types of tasks. The AMA, um, is a very good organization, but, ah, you know, there is protection built in in certain areas, whether it's in unions or Physicians are, pick your favorite expertise. Media, ah, where artists or music, production music producers may object to some of these. That's what I mean by human resistance, because people are being disrupted. You know, honestly, Technology is very fun to talk about disruption. It's not a lot of fun to be disrupted. And so one has to be very considerate of the people being disrupted and accommodate them if you're going to make better progress. I do think we'll have to pay special attention to the people being disrupted and their needs and desires and wants.

AI assessment note: “That's what I mean by human resistance, because people are being disrupted.”

Q I totally agree with you in terms of kind of that evolution of venture into really the asset class that it often is, excluding the breakthrough ideas. My question then is like, do values fundamentally then matter in startups? And more important, not more importantly, but a subsequent question, do VCs really care about the values in general, given now it's an institutional asset class, unlike any other financial product?

A So this is a hard thing, and Ben Horowitz recently wrote a very good book on the value of values in venture firms and startups. I would say two things matter, and they're different. One is the mission for a company. Many startups have that. Many don't. I'd say fifty-fifty, and I always tell entrepreneurs, be obstinate about your vision, be flexible about your tactics, but that doesn't speak to the values of A company has. Values is focusing on, you care about its impact, whether it's positive or negative, and I think very few investment firms focus on that. We do. We will not make an investment that's negative for society. We might make some neutral ones, and there's real situations where we passed on hundreds of millions of dollars of profit because we didn't want to do the wrong thing because it conflicted with our values. Maybe another day we can go into that, That's fairly rare, but we are very, very proud that we will not make negative things. Even when we are doing cleantech, we are very focused on values. When we did impossible, we were very clear we would pass up on profit and not sell impossible to a food company that might divert its mission. For example, we've chosen not to invest in some areas like gambling or encouraging drinking. That was a recent example that came up. Or debt collection, things like that. We basically don't invest in advertising tools now, which …

AI assessment note: “I think very few investment firms focus on that. We do.”

Q I totally agree with you in terms of kind of that evolution of venture into really the asset class that it often is, excluding the breakthrough ideas. My question then is like, do values fundamentally then matter in startups? And more important, not more importantly, but a subsequent question, do VCs really care about the values in general, given now it's an institutional asset class, unlike any other financial product?

A So this is a hard thing, and Ben Horowitz recently wrote a very good book on the value of values in venture firms and startups. I would say two things matter, and they're different. One is the mission for a company. Many startups have that. Many don't. I'd say fifty-fifty, and I always tell entrepreneurs, be obstinate about your vision, be flexible about your tactics, but that doesn't speak to the values of A company has. Values is focusing on, you care about its impact, whether it's positive or negative, and I think very few investment firms focus on that. We do. We will not make an investment that's negative for society. We might make some neutral ones, and there's real situations where we passed on hundreds of millions of dollars of profit because we didn't want to do the wrong thing because it conflicted with our values. Maybe another day we can go into that, That's fairly rare, but we are very, very proud that we will not make negative things. Even when we are doing cleantech, we are very focused on values. When we did impossible, we were very clear we would pass up on profit and not sell impossible to a food company that might divert its mission. For example, we've chosen not to invest in some areas like gambling or encouraging drinking. That was a recent example that came up. Or debt collection, things like that. We basically don't invest in advertising tools now, which …

AI assessment note: “I think very few investment firms focus on that. We do.”

Q I absolutely love it as a starting point and as a mission. I guess the first question on that is really when it comes to working with those founders and venture assistants, what does this really mean to you, I guess, and how does this differ from other firms, do you think?

A There's investing, which most firms do, and they make good, sensible decisions about rates of return and financial projection. Our firm and I am much more focused on how do you build company, not on returns. And if we build a big, successful company, then the returns take care of itself. So returns come second, building something of significance comes first. I think that's absolutely key. The other thing is The attitude with which we approach companies. Our motto, which you may have heard, is bold, early, and impactful. And all those matter. Mostly high technical risk that most others are afraid to take, and really large impact. So impact really matters to us as a firm because of our value system.

AI assessment note: “There's investing, which most firms do... Our firm and I am much more focused”

Q You mentioned that OpenAI and ChatGPT being the equivalent of the browser in terms of the consumerization and the access that it provides consumers. You tweeted before, the daylight between what we'll be able to do with AI and what we'll actually do with AI is human resistance. Can I ask, what did you mean by this human resistance, Vinod, and how does it show itself?

A Well, there's two types of things. You know, first, a genuine concern That AI will displace jobs, and what do we do with that? If I'm right, the level of job displacement over 20, 25 years will be large, and we've dealt with that kind of job displacement before, but over multiple generations, for example, in agriculture when it was 50% of all jobs in the US in 1900 and went to four percent by 1970. If the change is happening rapidly, Then job displacement may cause us to have rules and regulations that slow down progress. Another example could be, ah, physicians resisting AI being able to do physician types of tasks. The AMA, um, is a very good organization, but, ah, you know, there is protection built in in certain areas, whether it's in unions or Physicians are, pick your favorite expertise. Media, ah, where artists or music, production music producers may object to some of these. That's what I mean by human resistance, because people are being disrupted. You know, honestly, Technology is very fun to talk about disruption. It's not a lot of fun to be disrupted. And so one has to be very considerate of the people being disrupted and accommodate them if you're going to make better progress. I do think we'll have to pay special attention to the people being disrupted and their needs and desires and wants.

AI assessment note: “That's what I mean by human resistance, because people are being disrupted.”

Q doing a lot of work Prepping for this, because you said before, forcing non-economic, non-economic solutions is the wrong approach to climate, and solutions will need to be at what I call the chindier price. My bet is on fusion and geothermal. I just wanted to break this down because I didn't understand some of it, if I'm honest, which is, why is forcing non-economic solutions the wrong approach first?

A Well, energy, generally, Is such a large scale problem that there's no way, you know, we will spend the money to scale it. It's great for the first one, two, three percent of the market, whether it's the electricity market with solar and wind, or the hydrogen market, or pick your favorite. I believe subsidies should be declining with scale, so they can be high when it's one percent of the market because the tax on the overall energy cost would be low. But they have to start scaling down, and no subsidy is being designed that way. We are, as it gets to two percent, or four percent, or eight percent, or 15% of our segment, whether it's hydrogen to replace natural gas, and coal, or, ah, solar, or fusion to replace, ah, electro, electricity from coal, it has to scale down. If it's not, It's going to become too expensive. Do you get clean energy and no healthcare spending? Uh, what are you going to trade off? Uh, those are the kinds of practical things at scale that matter. Uh, having said that, look, early subsidies help get technologies developed when they're subscale, but by the time they're five percent of market, they really shouldn't need subsidies at all. Also, practically, if you're a politician in India, you're not gonna tell people they can't have clean water, but their kids will be better off because there will be a less warm climate. It's a very hard political trade-off …

AI assessment note: “You can't defy the laws of economic gravity at scale.”

Q that. You know, you, you've been, A long supporter of, uh, kind of content creation by AI, specifically in music for many years, and you tweeted before, music won't require personal musicians in 15 years, and your favorite artist will be a personal algorithm. Can you take me inside your mind here Vinod, in terms of how you see the future of music with AI at the heart of it?

A So we invested in this area also five years ago, and some founders from Australia came to me and said they wanted to Build a top 10 music hit generated entirely by an AI. We're not there yet, but, um, You know, Splash.ai will let me be a rapper. In fact, I was able to sing a rap song at my daughter's wedding because of AI and my terrible singer and a terrible, terrible rapper. I do think, you know, the Taylor Swift's of the world will still be there. I'm not suggesting they will disappear. Uh, artists and phenomena will be there. Their creativity will be dramatically enhanced by AI. It's like getting a much more powerful tool at their beck and call. They can try a hundred X more variants of things they like or don't like or want to guide the experience to. So a Taylor Swift will always be an experience, but the Splash AI is become one of the largest music games on Roblox. Where every 13 year old can also create their own music, and I think at some point, you might want music for your brain, the way your brain works, and the music you like, for a quiet walk, or when you want to get energized before an athletic event. It'll be personalized to you, and can be personalized. It may be an adaption for something Grimes sang, or Something from the old days of Elvis, or it could be something brand new and completely original. I think people are very narrow-minded when it comes to imagin…

AI assessment note: “Their creativity will be dramatically enhanced by AI.”

Q doing a lot of work Prepping for this, because you said before, forcing non-economic, non-economic solutions is the wrong approach to climate, and solutions will need to be at what I call the chindier price. My bet is on fusion and geothermal. I just wanted to break this down because I didn't understand some of it, if I'm honest, which is, why is forcing non-economic solutions the wrong approach first?

A Well, energy, generally, Is such a large scale problem that there's no way, you know, we will spend the money to scale it. It's great for the first one, two, three percent of the market, whether it's the electricity market with solar and wind, or the hydrogen market, or pick your favorite. I believe subsidies should be declining with scale, so they can be high when it's one percent of the market because the tax on the overall energy cost would be low. But they have to start scaling down, and no subsidy is being designed that way. We are, as it gets to two percent, or four percent, or eight percent, or 15% of our segment, whether it's hydrogen to replace natural gas, and coal, or, ah, solar, or fusion to replace, ah, electro, electricity from coal, it has to scale down. If it's not, It's going to become too expensive. Do you get clean energy and no healthcare spending? Uh, what are you going to trade off? Uh, those are the kinds of practical things at scale that matter. Uh, having said that, look, early subsidies help get technologies developed when they're subscale, but by the time they're five percent of market, they really shouldn't need subsidies at all. Also, practically, if you're a politician in India, you're not gonna tell people they can't have clean water, but their kids will be better off because there will be a less warm climate. It's a very hard political trade-off …

AI assessment note: “You can't defy the laws of economic gravity at scale.”

Q How does Fusion, how does geothermal, how does new energy resources and innovations within kind of their extraction, how does that rearrange international relations, do you think?

A Well, if we can reduce our dependence on oil, we can dramatically reduce international tensions and what are called strategic interests. There's so much fighting over strategic resources like energy, the minerals and metals is the other area. Um, we can eliminate that tension. Imagine the following. If you take every coal plant in the country and it's, it's boiler, the coal boiler or the natural gas boiler is replaced every five to 10 years. They deteriorate pretty quickly. If you could replace it with a fusion boiler, you wouldn't have to build 5000 new power plants in the U.S. You just have to build 5000 new boilers, which is less than the number of Liberty ships we built in five years during the Second World War. So that's how you achieve these at scale and completely change industries and our source of power by being clever about it.

AI assessment note: “if we can reduce our dependence on oil, we can dramatically reduce international tensions”

Q I absolutely love it as a starting point and as a mission. I guess the first question on that is really when it comes to working with those founders and venture assistants, what does this really mean to you, I guess, and how does this differ from other firms, do you think?

A There's investing, which most firms do, and they make good, sensible decisions about rates of return and financial projection. Our firm and I am much more focused on how do you build company, not on returns. And if we build a big, successful company, then the returns take care of itself. So returns come second, building something of significance comes first. I think that's absolutely key. The other thing is The attitude with which we approach companies. Our motto, which you may have heard, is bold, early, and impactful. And all those matter. Mostly high technical risk that most others are afraid to take, and really large impact. So impact really matters to us as a firm because of our value system.

AI assessment note: “There's investing, which most firms do... Our firm and I am much more focused”

Q I, I love that. I'm adding that to the reading list. I haven't read it yet. My next one is, on appearance, Vinod, you've achieved all one could want to achieve, both as an operator and as a venture investor. What motivates you today?

A I want to have fun, so I turned 65 today, and I have a plan for next I wrote it up about two years ago in a document on Medium called Reinventing Societal Infrastructure with Technology. There was a video I gave at our CEO Summit called Awesome, What All of You Are Doing. It's a hundred companies doing very, very cool and highly impactful technology in our portfolio and companies that most venture firms would be afraid to invest in. So I didn't include successes like Square or Stripe or Nutanix. In that I only covered the companies other venture firms would be afraid to invest in. It's an awesome list. I couldn't even reduce it below a hundred. That's what's really cool about it. It's from rocket lab to impossible foods to microbots doing surgery to three D printing houses to doing free primary care through AI, all kinds of cool stuff in a wide range of technology. Uh, personally, if I can have an impact, it's the most valuable thing Most rewarding thing I can do, and I'm always curious to learn about new technologies. I'm a techie nerd at heart.

AI assessment note: “personally, if I can have an impact, it's the most valuable thing”

Q Can I ask you on fusion? What, what is at the core of the bullishness and how does fusion bankrupt entire industries and destroy massive companies like you've said before?

A There was one breakthrough that enabled fusion to happen, which was high temperature superconductors. It wasn't possible to build a fusion reactor with a 20 Tesla magnet. Which is what Commonwealth fusion is doing. With that magnet, the size of the reactor scales to one over Tesla to the power of four. So if you quadruple the power of the magnet, which one can do with high temperature superconductors, the reactor itself becomes one to 50th the size. So 250 times smaller. Because of that, Ah, you can now both be economic, but also experiment much more rapidly, build them much more rapidly. Commonwealth Fusion was able to build a 20 Tesla magnet for Fusion and demonstrate it in three years, three and a half years. It has taken the large ITAR project with smaller magnets, 25, 30 years to get to the same place, so 10 X faster. I believe demonstrating positive energy by 25, maybe 26, will be also 10 X faster. Not only has that happened, there's a dozen other credible projects in fusion, um, that have been started, mostly because Commonwealth instigated this change towards fusion, and I have this theory, you need instigators, and it's got, uh, sparked up a field that was slow and not attracting the best talent to attracting the best talent now, and there's probably a dozen startups, and that's what makes me optimistic. At least one or two or three will be successful in this.

AI assessment note: “There was one breakthrough that enabled fusion to happen, which was high temperature superconductors.”

Q I want to approach this from a very first principles interviewer style and ask very basic questions. So I hope that's okay. What should we be doing, do you think, for those that will be disrupted? As you said, it's fun for us at the forefront of innovation. If you're being disrupted, less so. What should we be doing and how should it be handled?

A So let's start with the math. Let's say the next 50 years of GDP growth without AI and some of the newer technologies would be two percent a year. Per capita income may go from 70 or 75 Uh, wherever it is today, or 65, I forget the exact number, to about a 175,000. If we change GDP growth to four percent, that per capita income would increase to four and 75,000 or so. My point is, we will have adequate resources Advocate, uh, abundance to share much more broadly. I wrote, uh, a blog in 2016, um, in Fortune magazine that said, AI will cause, and this was Six years, uh, seven years ago. AI will cause great abundance, great GDP growth, great productivity growth, everything economists measure, and increasing income disparity. It was the first time in 2016 I wrote about needing some sort of universal basic income, uh, which means redistribution of income in a much better way than we have today. The reason I gave you my calculations of the effect of changing GDP growth from two percent to four percent over 50 years is we will have enough to share. So my suggestion would be some large percentage of per capita income growth or GDP growth be reserved in a social security pool for universal basic income or something like that. There's many ways to redistribute, some more acceptable than others, but I think happiness in our society will be a function of equality, not just GDP growth, and …

AI assessment note: “reserved in a social security pool for universal basic income”

Q What do you think are the barriers that we need to overcome For AI to have the impact we all want it to have on healthcare?

A Well, in healthcare and other areas, uh, AI is doing some things really well, other things not so well, and I think that's where development needs to be rapid. For example, in healthcare specifically, guardrails is a very, very important issue. Safety is a very important issue. So, a lot more Attention has to be paid to those factors. Explainability is a huge issue. Those things will need to be developed by somebody applying AI broadly to, say, primary care or oncology or pick your favorite area, cardiology. But all of those, uh, I'm pretty convinced will happen in the next five years. Uh, and we'll see The capability developed to provide very, very low cost, much more frequent and accessible care, and accessible both, accessible 24 seven, and accessible at a very cheap price to every, um, human being on the planet, I think.

AI assessment note: “guardrails is a very, very important issue. Safety is a very important issue.”

Q I want to approach this from a very first principles interviewer style and ask very basic questions. So I hope that's okay. What should we be doing, do you think, for those that will be disrupted? As you said, it's fun for us at the forefront of innovation. If you're being disrupted, less so. What should we be doing and how should it be handled?

A So let's start with the math. Let's say the next 50 years of GDP growth without AI and some of the newer technologies would be two percent a year. Per capita income may go from 70 or 75 Uh, wherever it is today, or 65, I forget the exact number, to about a 175,000. If we change GDP growth to four percent, that per capita income would increase to four and 75,000 or so. My point is, we will have adequate resources Advocate, uh, abundance to share much more broadly. I wrote, uh, a blog in 2016, um, in Fortune magazine that said, AI will cause, and this was Six years, uh, seven years ago. AI will cause great abundance, great GDP growth, great productivity growth, everything economists measure, and increasing income disparity. It was the first time in 2016 I wrote about needing some sort of universal basic income, uh, which means redistribution of income in a much better way than we have today. The reason I gave you my calculations of the effect of changing GDP growth from two percent to four percent over 50 years is we will have enough to share. So my suggestion would be some large percentage of per capita income growth or GDP growth be reserved in a social security pool for universal basic income or something like that. There's many ways to redistribute, some more acceptable than others, but I think happiness in our society will be a function of equality, not just GDP growth, and …

AI assessment note: “reserved in a social security pool for universal basic income or something like that”

Q Do you believe then that AI will be a competitor or a complement to the doctor? And do you believe doctors see it in the same way?

A You know, I wrote about it, uh, Oh, probably eight years ago, I wrote this paper, 20% doctor included. It's about a hundred page document, and I wrote about the human element of care being provided by doctors, and the detailed expertise being provided by an AI. You can't expect your oncologist to be caring, talking about your cancer, and have read the 5000 most recent articles, ah, on your cancer. They can't keep that knowledge in their head, so that's the kind of partnership that'll be possible. You know, you don't want a computer, a computer telling you you have cancer. Yeah, you want a caring human being. I jokingly said to the dean of the Howard Medical School about five or six years ago, they ought to take, change their selection criteria for more empathy More mirror neurons and less IQ only, which is what it takes to get into Harvard Medical School. I said, take the model of the UCLA film school and look at caring humans as criteria number one for admission to the MD program.

AI assessment note: “so that's the kind of partnership that'll be possible.”

Q Vinod, we've spoken about healthcare. You've written, we'll talk about education, but you've written extensively about both many years ago, ahead of time, seeing things before anyone else did. To what extent do you think about market timing when investing? Because, yeah, I think it's, um, Marc Andreessen's quote, there's no such thing as a bad time, a bad idea, only a bad time. Do you think about market timing?

A Um, you know, you think a little bit about it, but I mostly feel I'm not smart enough to predict it. In retrospect, you always feel dumb about some things and really smart about others. You know, we invested in OpenAI and we invested in Conwell Fusion about the same time. And I'm really happy about both. But, you know, both felt like longer term bets than they've turned out to be. And progress has been more rapid, both in AI and in fusion. Very different areas than I would have expected. Suddenly I feel smarter, maybe even overconfident about my predictions. Um, you know, today I sit here and say, for example, The amount of compute power AI systems need, ah, the expense of training. Could one have analog computing, and we are working on that, uh, dramatically change that equation by a hundred X, both cost and power. And I think that's entirely not only possible, but likely. Venn's a little bit harder to predict, though we are chipping, taping out chips this year.

AI assessment note: “you think a little bit about it, but I mostly feel I'm not smart”

Q And then I want to finish, Vinod, on a super interesting one, which is your most recent publicly announced investment. And why did you say yes and get so excited?

A We like really large breakthroughs. Just as an aside, one of the things I love is three people I've invested in have won Nobel Prizes after we invested, not before. So really big ideas get really exciting to me. For a specific investment, OpenAI is going after a big, hairy, audacious goal of building an AGI. That, to me, is worth pursuing as an investment, but also for society. It may eliminate the need to work for society, Lots of issues there, but it could be really, really exciting if it works, and I don't know what the probability of success is. Again, even if it's only 10% and there's a 90% chance of something less, that's fine with me. So that's very exciting.

AI assessment note: “OpenAI is going after a big, hairy, audacious goal of building an AGI.”

Q Can I ask you on fusion? What, what is at the core of the bullishness and how does fusion bankrupt entire industries and destroy massive companies like you've said before?

A There was one breakthrough that enabled fusion to happen, which was high temperature superconductors. It wasn't possible to build a fusion reactor with a 20 Tesla magnet. Which is what Commonwealth fusion is doing. With that magnet, the size of the reactor scales to one over Tesla to the power of four. So if you quadruple the power of the magnet, which one can do with high temperature superconductors, the reactor itself becomes one to 50th the size. So 250 times smaller. Because of that, Ah, you can now both be economic, but also experiment much more rapidly, build them much more rapidly. Commonwealth Fusion was able to build a 20 Tesla magnet for Fusion and demonstrate it in three years, three and a half years. It has taken the large ITAR project with smaller magnets, 25, 30 years to get to the same place, so 10 X faster. I believe demonstrating positive energy by 25, maybe 26, will be also 10 X faster. Not only has that happened, there's a dozen other credible projects in fusion, um, that have been started, mostly because Commonwealth instigated this change towards fusion, and I have this theory, you need instigators, and it's got, uh, sparked up a field that was slow and not attracting the best talent to attracting the best talent now, and there's probably a dozen startups, and that's what makes me optimistic. At least one or two or three will be successful in this.

AI assessment note: “There was one breakthrough that enabled fusion to happen, which was high temperature superconductors.”

Q Tell me, how do you see the future of transport?

A You know, so I have my favorite project. I believe, as an optimist, we can replace more scars in more cities in the next 25 years. As ridiculous as that sounds, I will only suggest the internet sounded ridiculous in its scope and style impact in 1996. I think email sounded ridiculous in 1990. PCs in every home sounded ridiculous in 1985. Computer in your hand. The iPhone sounded ridiculous in 19, in 2006. So we've gone through these moments. Chat, uh, GPT found it, uh, sounded ridiculous five years ago. So I do believe we can replace most cars in most cities. We have a little startup called Glidewise, which uses self-driving the wrong way. I think the Waymo approach and the cruise approach is nice. It adds functionality. It's not transformative of cities. Self-driving, ah, cars used in public transit will make public transit cheaper and faster and point to point. And on demand. That's what we're building at Glidewise. We bid on three projects so far. None of them projects we were invited into. These were public transit bids, including the one connecting the San Jose airport to the new Google campus to the Apple campus. We bid, logged in a bill over the transform, uh, uh, uh, over the transom and won it outright to build a public transit system. People would say, that's crazy. Uh, for startups to do, but we won three bids now, uh, in a row. We haven't lost one yet. I'm sure we w…

AI assessment note: “we can replace most cars in most cities... Self-driving, ah, cars used in public transit”

Q What do you think are the barriers that we need to overcome For AI to have the impact we all want it to have on healthcare?

A Well, in healthcare and other areas, uh, AI is doing some things really well, other things not so well, and I think that's where development needs to be rapid. For example, in healthcare specifically, guardrails is a very, very important issue. Safety is a very important issue. So, a lot more Attention has to be paid to those factors. Explainability is a huge issue. Those things will need to be developed by somebody applying AI broadly to, say, primary care or oncology or pick your favorite area, cardiology. But all of those, uh, I'm pretty convinced will happen in the next five years. Uh, and we'll see The capability developed to provide very, very low cost, much more frequent and accessible care, and accessible both, accessible 24 seven, and accessible at a very cheap price to every, um, human being on the planet, I think.

AI assessment note: “guardrails is a very, very important issue. Safety is a very important issue.”

Q Why are you so bullish on India moving forward? And will India develop into attack giant, do you think, in the next five to 10 years?

A What What I love about India is the demographic is young, with a huge focus on learning and education. Now, India has pretty significant problems, I think. Leaving a population like the Muslim population behind in India would be a huge disaster and could completely change the optimistic projection I have for India if, if you leave a part of the population behind, and that becomes A source of violence, rioting, things we've seen. But generally, a well-educated population and a coarse set of technologists, um, and English as a language, common language, Western values, democracy as a value, all those make India pretty good candidate. As does, uh, you know, Brazil's, uh, similar in many ways. Um, so India is not the only country with that kind of advantage.

AI assessment note: “What I love about India is the demographic is young, with a huge focus”

Q the show not too long ago, and he said specifically with regards to kind of energy and its impact on, you know, international relations, that China is a prison, Japan is a nursing home, and Europe is a museum. Can I ask, do you agree with that statement, and how do you think about that with regards to the discussion we just had on how energy changes international power flows?

A I think what Larry was probably talking about Was demographics. Um, Europe is an aging demographic. China, China and Japan are rapidly aging. I think if I read right by 2040, which is 15 years, 17 years, years from now, um, the average age in Japan average will be 54 or something like that. The world needs younger people to have a vibrant Society and what is called the dependency ratio, number of people working to support each person not working, whether they're elders or kids. That dependency ratio in Japan, China, most of Europe is heading in the wrong direction. The U.S. has a reasonable demographic. India has a great demographic. You know, the Mideast and Africa have good demographics. But this anti-immigrant sentiment will hurt these, uh, European countries from, uh, really renovating, you know, invigorating their societies. Uh, that's a complex problem.

AI assessment note: “I think what Larry was probably talking about Was demographics.”

Q Can I ask you, you mentioned before a brilliant thing, which is I've never seen innovation come from large institutions, and it's really applicable across Uh, medicine, across education, across music, but do you think in this next wave of innovation due to AI that holds true or does AI actually allow incumbents or the dominant parties to just become stronger?

A I believe innovation will be spread broadly, uh, in different areas. Now, large language models Uh, may or may not be constrained to the large platform companies. Uh, right now it appears that'll be the case. There'll be two or three major providers of large language models. But for example, uh, we have an effort in symbolic logic to see if in three or four years it could change the equation of how you train these systems and the, and the amount of data required and all those kinds of things. We have an effort in developing curriculum for AI instead of curriculum for humans. Almost everything AI is training on is designed for humans, not for machines. So there's a number of large innovations, and it's hard to tell today which ones will play out, work out, um, or be important in three or four years. So when we originally committed to OpenAI, uh, four or five years ago, uh, It was very unclear where the world would lead, and what the capabilities would be, and when they would develop. It was clear to me that there was a reasonably high probability of pretty significant advancement at some point in time. Hard to say whether it would be twenty-twenty-two or twenty-twenty-five, um, but that didn't bother us. The shape of the curve and the exponential really interested us. I think there's other approaches to AI, um, you know, Josh Tenbaum, for example, working a lot on probabilistic …

AI assessment note: “I believe innovation will be spread broadly, uh, in different areas.”

Q the show not too long ago, and he said specifically with regards to kind of energy and its impact on, you know, international relations, that China is a prison, Japan is a nursing home, and Europe is a museum. Can I ask, do you agree with that statement, and how do you think about that with regards to the discussion we just had on how energy changes international power flows?

A I think what Larry was probably talking about Was demographics. Um, Europe is an aging demographic. China, China and Japan are rapidly aging. I think if I read right by 2040, which is 15 years, 17 years, years from now, um, the average age in Japan average will be 54 or something like that. The world needs younger people to have a vibrant Society and what is called the dependency ratio, number of people working to support each person not working, whether they're elders or kids. That dependency ratio in Japan, China, most of Europe is heading in the wrong direction. The U.S. has a reasonable demographic. India has a great demographic. You know, the Mideast and Africa have good demographics. But this anti-immigrant sentiment will hurt these, uh, European countries from, uh, really renovating, you know, invigorating their societies. Uh, that's a complex problem.

AI assessment note: “I think what Larry was probably talking about Was demographics.”

Q Why are you so bullish on India moving forward? And will India develop into attack giant, do you think, in the next five to 10 years?

A What What I love about India is the demographic is young, with a huge focus on learning and education. Now, India has pretty significant problems, I think. Leaving a population like the Muslim population behind in India would be a huge disaster and could completely change the optimistic projection I have for India if, if you leave a part of the population behind, and that becomes A source of violence, rioting, things we've seen. But generally, a well-educated population and a coarse set of technologists, um, and English as a language, common language, Western values, democracy as a value, all those make India pretty good candidate. As does, uh, you know, Brazil's, uh, similar in many ways. Um, so India is not the only country with that kind of advantage.

AI assessment note: “demographic is young, with a huge focus on learning and education.”

Q You've mentioned some of your incredible investments with Khosla before in this show. When you reflect on the ones that you haven't done, which one stands out to you as one you didn't do, but wish you had done?

A Oh, there is so many. I remember in 2007, a journalist asked me about, uh, Twitter and they interviewed me and they sourced their questions on Twitter in 2007, I think. Uh, I think maybe in early 2007 at Davos or something. Um, and I said, huh, interesting, but couldn't see the potential of it. That was duh. My biggest mistake ever was I was at Sun and Cisco routers was software running on Sun machines and Sun's logo or tagline used to be the network is the computer. And I didn't see, and nobody at Sun saw, routers as more, as maybe a huge thing, even though we had adapted networking from day one. By the way, the first computer to have standard networking from day one, um, in fact, in 1982, we had hardware encryption on every computer, uh, because it was networked. Too early matters, I guess. Um, but, Yeah, I've made so many mistakes. I, you know, I like to say I have made more mistakes Then almost anybody I know, but I'd rather try and fail than fail to try, which is what most people have done.

AI assessment note: “I said, huh, interesting, but couldn't see the potential of it.”

Q Can I ask you, you mentioned before a brilliant thing, which is I've never seen innovation come from large institutions, and it's really applicable across Uh, medicine, across education, across music, but do you think in this next wave of innovation due to AI that holds true or does AI actually allow incumbents or the dominant parties to just become stronger?

A I believe innovation will be spread broadly, uh, in different areas. Now, large language models Uh, may or may not be constrained to the large platform companies. Uh, right now it appears that'll be the case. There'll be two or three major providers of large language models. But for example, uh, we have an effort in symbolic logic to see if in three or four years it could change the equation of how you train these systems and the, and the amount of data required and all those kinds of things. We have an effort in developing curriculum for AI instead of curriculum for humans. Almost everything AI is training on is designed for humans, not for machines. So there's a number of large innovations, and it's hard to tell today which ones will play out, work out, um, or be important in three or four years. So when we originally committed to OpenAI, uh, four or five years ago, uh, It was very unclear where the world would lead, and what the capabilities would be, and when they would develop. It was clear to me that there was a reasonably high probability of pretty significant advancement at some point in time. Hard to say whether it would be twenty-twenty-two or twenty-twenty-five, um, but that didn't bother us. The shape of the curve and the exponential really interested us. I think there's other approaches to AI, um, you know, Josh Tenbaum, for example, working a lot on probabilistic …

AI assessment note: “I believe innovation will be spread broadly, uh, in different areas.”

Q Vinod, we've spoken about healthcare. You've written, we'll talk about education, but you've written extensively about both many years ago, ahead of time, seeing things before anyone else did. To what extent do you think about market timing when investing? Because, yeah, I think it's, um, Marc Andreessen's quote, there's no such thing as a bad time, a bad idea, only a bad time. Do you think about market timing?

A Um, you know, you think a little bit about it, but I mostly feel I'm not smart enough to predict it. In retrospect, you always feel dumb about some things and really smart about others. You know, we invested in OpenAI and we invested in Conwell Fusion about the same time. And I'm really happy about both. But, you know, both felt like longer term bets than they've turned out to be. And progress has been more rapid, both in AI and in fusion. Very different areas than I would have expected. Suddenly I feel smarter, maybe even overconfident about my predictions. Um, you know, today I sit here and say, for example, The amount of compute power AI systems need, ah, the expense of training. Could one have analog computing, and we are working on that, uh, dramatically change that equation by a hundred X, both cost and power. And I think that's entirely not only possible, but likely. Venn's a little bit harder to predict, though we are chipping, taping out chips this year.

AI assessment note: “you think a little bit about it, but I mostly feel I'm not smart enough”

Q How does Fusion, how does geothermal, how does new energy resources and innovations within kind of their extraction, how does that rearrange international relations, do you think?

A Well, if we can reduce our dependence on oil, we can dramatically reduce international tensions and what are called strategic interests. There's so much fighting over strategic resources like energy, the minerals and metals is the other area. Um, we can eliminate that tension. Imagine the following. If you take every coal plant in the country and it's, it's boiler, the coal boiler or the natural gas boiler is replaced every five to 10 years. They deteriorate pretty quickly. If you could replace it with a fusion boiler, you wouldn't have to build 5000 new power plants in the U.S. You just have to build 5000 new boilers, which is less than the number of Liberty ships we built in five years during the Second World War. So that's how you achieve these at scale and completely change industries and our source of power by being clever about it.

AI assessment note: “if we can reduce our dependence on oil, we can dramatically reduce international tensions”