The Exchanges

Q to tailored projects, Turing helps top companies realize AI that's more capable, more adaptable, and more effective. With Turing, discover how AI can accelerate your business growth. To learn more, Visit Turing.com slash sorcery. Spelt S-O-U-R-C-E-R-Y. That's Turing.com slash sorcery. So given the fact that you've invested into so many companies through different waves, how do you think about investing in competitive companies? I'm sure there's been some crossover across.

A I try to be really cautious about that because, you know, I've started, um, two companies myself and, um, you know, I want to be very respectful of, um, founders and what their goals are and their wishes are and everything else. And so I, I often ask both sides. I say, Hey, this thing has come up. Do you view it as a conflict? Is okay if I proceed, et cetera. And so I usually wait for that. Okay. Um, I think that, uh, there's a number of circumstances where people think something's, I'd say, 90% of the time founders think that they're going to compete and they don't. They tend to grow in very different directions, especially if it's two early stage companies. Um, and then maybe a few percent of the time things actually converge. And sometimes they actually converge on the companies that you don't expect. And so I've seen more conflicts and things that I didn't think would converge than things would. And, um, I'll give you an example. I remember I was an investor in Square and the Stripe founders pinged me and asked if I wanted to invest. And so I pinged one of the key executives at Square and said, Hey, do you think this is a conflict? And he said, absolutely. This is a conflict. You shouldn't do it. These things are going to collide. And so then I texted Jack and I'm like, Hey, is this a conflict? He's like, no, go ahead. And so I went ahead and invested, so I'm glad I did tha…

AI assessment note: “I try to be really cautious about that because... I often ask both sides.”

Q Shifting into one of your other strategies. We covered investing, macro, and everything like that. But I'm really curious how you shift from investing directly into companies to incubating them. There's a couple companies that you started that start with brain. So what's the deal with these brain companies?

A I mean, um, so Ankur came up, Ankur Goyal, who's the, um, CEO and founder of Braintrust, um, came up with Braintrust, which I thought was a great name. Um, and I helped him really early get that up and running and did a lot of early customer calls. And, um, initially we talked about just doing that as like an open source project and all this stuff, and then it kind of converted into a company. So we were just doing it for fun. Um, it's like a kind of a side project. Um, and, uh, then when I helped get this other company up and running called Branko, we were just calling it Branko as a placeholder. Yeah. It wasn't meant to be the longterm name and hopefully Ankur isn't upset, you know, that we have another brain thing in the family, but, um, It was meant to be like kind of funny and quirky and it was an internal placeholder and then we're going to come up with something better and like Apple and like Stripe and a few other companies, we just could never come up with anything better. And the people who are working on it liked it. So it kind of stuck. So it was inadvertent.

AI assessment note: “we were just calling it Branko as a placeholder... it kind of stuck”

Q And then we also have the CEO of Together AI. How do you get all of these people on one cap table?

A Uh, well, I mean, I think a number of people helped, uh, really pull this around together. Eric was very involved. Um, Jared was involved. Uh, Dan, the president of the company, you know, really drove the fundraise day to day. Um, so I, I think it's one of those things where people were just very excited about what we were doing. It was one of those moments where everybody talked to is like, of course this is needed. Of course I've seen use cases. Of course I've seen people ask me about this. So I just think it's one of those things where, um, we thought it was a clear indicator of just like how interesting and exciting what we're doing is. And then as people met, um, Dan and Clemens and the team that I would get texts where they're like, oh my God, these are really impressive people, right? Like I want to, I want to Back whatever these people do. So I think it's also the caliber of the people involved operating the company really matters.

AI assessment note: “a number of people helped, uh, really pull this around together. Eric was very involved.”

Q Can you justify OpenAI's five hundred billion dollar secondary valuation?

A Um, I don't know all the details of their revenue and things like that. I, my sense is that for many of these foundation lab companies, if you just do a revenue multiple and you look at the growth rate, it's actually pretty reasonable. Um, that's true of OpenAI, that's true of Anthropic. I think it's actually surprising. You look at it and you're like, oh my gosh, they have a lot of revenue and it's growing really fast. And obviously you look at margin structure and other things, but it actually seems like it's in the ballpark of a reasonable for many of these things. I don't know, again, uh, specifically OpenAI's latest numbers, so I can't say specifically about them, but in general, as I've looked at these things over time, it's actually been pretty reasonable.

AI assessment note: “if you just do a revenue multiple and you look at the growth rate”

Q get 20 times the standard FDIC coverage through their partner banks, and even high yield from day one. With same day and even same hour liquidity, access your funds anytime. Companies like Scale AI, DoorDash, Service Titan, HIMSS, Anthropic, Flexport, Robinhood, and Plaid trust and use bricks. Start today at brex.com slash sorcery. That's B-R-E-X dot com slash sorcery. How do you make something not so polarizing in today's world?

A Oh, uh, I don't know. I mean, in, uh, yesteryear's world, um, these things were polarizing. So the Eiffel Tower was considered very ugly when it was built, right? It was a giant steelwork, and Eiffel was actually a bridge maker, right? And he had all these divots and pieces of steel, and he's like, I'm gonna make a, A big thing for the World Fair in the late 1800, and it was actually, um, meant to show off French steelmaking, right? It was an ode to technology progress. And, um, apparently a big chunk of the city thought it was ugly and terrible, and they were looking forward to getting torn down. Um, and so I think these things that we now view as beautiful and iconic and inspiring and wonderful at the time were not viewed that way. And one thing that I thought was really cool, I went to see the Eiffel Tower actually recently as sort of a refresher over the summer. And he had his office on one of the top floors, and it was a power move for him to invite people to his office, and they would take the pneumatic lift, I don't know if you've been in it, it's this very quiet elevator that was built a 150 years ago, using modern technology, right, of the day. Um, and so the elevator takes you up there, and you get in, and you go into his little office, and they still have the desk and everything set up, and it was him showing off, like, what he built, which I thought was kind of neat…

AI assessment note: “Oh, uh, I don't know. I mean, in, uh, yesteryear's world”

Q I, I love the American dynamism movement and how that like propelled small tech as the Andreessen media empire calls it to now big tech. So as we think about the government's involvement in these different sectors, they're also putting dollars to work. So how are these deals one getting structured, whether it's MP materials or Intel, and are you at all concerned about them and whatever happens with TikTok?

A Yeah. I don't have like deep thoughts on those things. I haven't spent a lot of time looking at, um, government investment in some of these companies and they very much are companies that I tend not to spend as much time with because they're much later on in life. I mean, Intel was started in the seventies and maybe it was late sixties. I can't remember at this point. Um, and so, um, I, I just haven't thought about this very deeply. Um, I think there's a slightly different question and I think Andreessen Horst, for example, has been very good at promoting this concept of small tech and we need to advocate for that. Um, I do think that one thing the prior administration has done, which this administration is to some extent continuing, is effectively, um, curtailing some of the M&A activity you'd normally see big tech participating in, and I actually think that's negative for the startup ecosystem. I think it's good for companies to be able to exit. I think we're going through a massive sea change right now technologically. A lot of things are being innovated on that, um, won't necessarily sustain on their own, and actually having larger partners will help a lot for them. Uh, I was looking a little bit at the data from the nineties, because I thought it was really interesting to say, okay, we're in this weird moment in time in AI. What did the internet version look like?

AI assessment note: “I don't have like deep thoughts on those things. I haven't spent a lot”