The Exchanges

Q All right. Excel is more of a silent partner than some of the flashier names, even on this road or down the block. Um, so I'm really curious from your standpoint, how are you winning these deals against like the flurry of marketing and blah, blah, blah, and hype that's going on in here?

A I mean, I think, first of all, we approach it with humility. Like this is a very humbling job in ecosystem. There are a lot of talented investors out there, and we have a lot of professional respect for our peers. With that said, I think our style has always just been a little bit to stand behind our founders. And really the equation is very simple. If we do good work over time, that will be reflected in results and returns. And if we're good humans and good partners and pleasant to work with and good backers of our founders, They'll say nice things about us over time. So I think that shows up in scenarios where, for example, When we were able to, um, work with Michael Trull in Cursor, you know, we were, like, really humbled to get the opportunity because it was a pretty competitive situation.

AI assessment note: “our style has always just been a little bit to stand behind our founders”

Q cohesive conversation. But what I was really surprised about is that you guys are generalists. So how did you come up with, I mean, you all distinctively have different backgrounds and I'm sure networks and that kind of thing, but like, how do you come up with the theses behind the positions and the different companies that you've invested into? Whether it's Nebius, Cursor, Lovable, all those types of companies.

A I think we, we've always been generalists, but we definitely all have areas of focus and comfort, and then we go really deep in different categories over time. Like Arun has always spent a lot of time around infrastructure and cybersecurity. Matt spends a lot of time about infrastructure, around infrastructure. I've done a lot of application software and, um, in developer tooling, but I think that the way the technology landscape is evolving, I mean, these categories, especially these applied AI categories can just Sort of come out of nowhere and grow so quickly that you have to have some mental plasticity to wrap your head around these new categories as they evolve. So we are generalists, but we definitely have, you know, areas of focus and we're constantly trying to hone new ideas. And, um, the, the same premise applies today as always has at, at Excel in the way that we've just sort of practiced the job. I mean, you really have to show up prepared, especially in today's market where things move faster than ever. Like, you have to have an outside-in viewpoint on which company is going to win before you even get the first meeting, and then you have to really show up and add some value and, um, you know, Convince this entrepreneur that there's a compelling reason to work with you. And, um, so we are generalists, but we try to be micro prepared in certain categories.

AI assessment note: “we definitely all have areas of focus and comfort, and then we go really deep”

Q crashing out maybe is the right term on token usage. I mean, I know I do this for myself because I'm like, take out all the N hyphens. Like I'm doing ridiculously inefficient things over and over again. Have your teams, have your companies at all talked about like their token bills and how they're going to bring them down? Like what are the best, like you can't rate limit.

A Right. It's actually interesting. There is definitely some episodic overconsumption happening out there and that's grabbed a lot of the headlines. I think my view, and probably the house view though, is that the overall trend is dramatically the opposite. Like, we are just scratching the surface of token consumption globally, even though we do need, you know, companies will weed out certain examples of token vaxxing. So we did this survey of developers, and we asked them how many of them had, um, a CFO who was telling them to spend less on Consumption versus more, and we actually found that seven times more companies are being told to, like, let it rip and spin more. So I think the overall trend is towards a lot more consumption, but yeah, I mean, the, the examples of overconsumption out there are a little bit ridiculous, and those will be curtailed. I think the overall trend, though, is a wave to the positive.

AI assessment note: “seven times more companies are being told to, like, let it rip and spin more”

Q How have check sizes changed? I mean, even in Q-one we saw, like, nearly two hundred billion dollars go into, like, maybe two or three companies.

A Yeah. There's definitely been an unmistakable concentration of capital and maybe interest around a handful of late-stage private companies. Um, we're very fortunate to be a part of a lot of those companies. But the rest of the ecosystem is also growing exponentially and really, really excited to us. I think of our ability to reflect our conviction in two ways. The first is just earliness of investment. So ideally we are initiating the investment, writing the first check. The other way is just size of investment. So companies that we really feel like are the definitional companies of this era, you know, we're able to invest four or 506 hundred million dollars at a time, and then we can scale all the way in between.

AI assessment note: “we're able to invest four or 506 hundred million dollars at a time”

Q How has funding actually changed over time? We're in a ridiculously chaotic, a little bit schizophrenic Era where it is like land grab time, logo grab, talent grab. How are you thinking and like, what are you seeing of the different types of funding and how that's changed?

A Yeah. I think one way that we think about it, and this is where, again, we're incredibly lucky to work at a place like Excel that allows us to prosecute what we all agree is this generational technology change, um, holistically across every imaginable dimension. And what do I mean by that? We're prosecuting the AI opportunity across every layer of the technology stack. So literally, from the chips, to the Neo clouds, to the labs, to the applications, down to the systems integrators. We're prosecuting this opportunity across the early stage and across the growth stage. So at the early stage, we've been the early initiating investor in companies like Lovable, Decagon, Scale, Gamma. At the growth stage, we've reflected our conviction in some of the iconic breakout AI companies In terms of some really sizable investments. So just as an example, across companies like Cursor, Anthropic, and Nebius. And then also importantly, because it's a hallmark of how Excel functions, we've prosecuted this AI opportunity globally. So not only from our office here in Silicon Valley, but across our team in London, across our team in Bangalore. So holistically, when we reflect on our work over the last couple of years, I think what we see is A seven billion dollar portfolio of really thoughtful, nuanced investments that we've selected very carefully. We don't believe in a blanket strategy and just s…

AI assessment note: “we're incredibly lucky to work at a place like Excel that allows us to prosecute”

Q just extreme growth for these companies. Uh, so, like, what is your current view on where that lands in the next, like, I don't know, by the end of the year, do you think we're starting to, like, kind of see inklings of, like, actual agent adoption and, like, It's definitely banging around a bit, and it's a little bit messy, but like, how do you see this playing out?

A Can I do something super controversial before we get to this very important topic? Can I brag on Matt for a second because he's not going to brag on himself? Do it. So, what Matt won't say about Nebius is that today it seems fairly obvious that it's a very buzzy company. 16 months ago when Matt led a pipe investment into Nebius, that was not the case. And I think it is like very emblematic of original thinking and how we try to function at Excel. If we're passionate about a category, and especially if we're passionate about a founder, we will find a way to structure the right investment. And so, whether we are making, you know, writing the first check into scale, or doing a growth investment in a company like Cursor, or finding a way to make a public investment in a company like Nebius, I think that just reflects our ability to express conviction in a bunch of different ways. And so, you know, again, I'm bragging on Matt's behalf because he won't do it. It's not sort of who he is, but this was, 16 months ago, a hundred and fifty million dollar investment that I think is up 13 x today, and the world is now awakened to this company and how special it could potentially be. I think Matt gets a lot of credit for having acknowledged that a year and a half ago.

AI assessment note: “Can I do something super controversial before we get to this very important topic?”