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Pursuit of Joy, Fulfillment, and Purpose

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  • Dig Through Your Couches, SpaceX Needs It: Cyan Banister on Luke Nosek’s Pitch, Going All In on SpaceX, Pokemon Go, Meditation, and Why Curiosity Is the Ultimate Investing Edge

    Angel investor Cyan Banister has one of the most remarkable track records in Silicon Valley: SpaceX, Uber, Anduril, Postmates, Niantic, Affirm, Flexport, Flock Safety, and dozens more. In this wide-ranging conversation on the Sourcery podcast with Molly O’Shea, the Long Journey Ventures co-founder tells the story behind her first check, when PayPal co-founder Luke Nosek got on the floor of her house and told her to dig through her couches because SpaceX needed every liquid dollar she had. She also covers the Founders Fund Mafia show, why personality is not fixed, the five minute meditation practice she prescribes to stuck founders, how asking “why” led her to Pokemon Go and Uber, what worries her about AI surveillance, and why free speech is her number one cause.

    TLDW

    Cyan Banister explains how Luke Nosek and her husband Scott Banister convinced her to put her entire IronPort windfall into SpaceX while rockets were still blowing up on the launch pad, a bet that became the best investment of her life. She walks through the “second believer” philosophy behind Long Journey Ventures and its bellwether logo, her run on Mike Solana’s Founders Fund Mafia show filmed at the site of the famous PayPal Mafia photo, why games like Mafia, poker, and board games are core Silicon Valley social infrastructure, and the time she bluffed Phil Hellmuth on a live stream. She then goes deep on inner work: personality is not fixed, the gap between your values and your actions is measurable, meditation is noticing that you are noticing, and mornings should start with a “why” question. That mindset produced her Niantic and Uber investments, informs her worries about centralized AI and a surveillance state, and fuels her excitement about AI as a new paintbrush, vibe manufacturing, agentized one person businesses, Substrate, Becoming Bio, and Diamond Foundry. She closes with her mentors, Peter Thiel, Marc Andreessen, Scott Cook, and Rick Rubin, and a blunt defense of curiosity and free speech over shame by association.

    Thoughts

    The most useful idea in this interview is the “second believer.” Long Journey keeps two candles on the wall: a founder lights the first flame, and someone else lights their own candle from it and holds the flame in case the founder’s goes out. That is a precise description of what early capital actually is. Luke Nosek was Elon Musk’s second believer, championing SpaceX “with more heart” than Cyan had ever seen, and Cyan’s first check existed because Nosek’s conviction was strong enough to transfer. Most people think conviction is a private mental state. This interview argues it is social infrastructure: belief propagates person to person, and the people who hold flames for others quietly shape which futures get built.

    The SpaceX story deserves a caveat Banister herself supplies. Putting one hundred percent of a liquidity event into a company whose rockets were exploding looks like genius only in hindsight; her friends told her she had lit her money on fire, and they were reasoning correctly from the information available. What made the bet rational was not the outcome but the frame Nosek and Scott Banister gave her: you are young, able-bodied, and infinitely employable, so your downside is a career, not ruin. That is the actual lesson for anyone tempted to copy the trade. Concentrated risk is a function of your recovery capacity, not your conviction level. She could afford to be the fool card. A fifty five year old with dependents cannot, and pretending otherwise is how people get hurt imitating legends.

    Her investing process is really an attention practice wearing a venture costume. The Niantic story is the cleanest example: she noticed friends chartering boats and ditching Defcon parties to capture invisible portals in Ingress, asked why Google would build such a thing, worked out that it was free mapping data, and then recognized the ticket subject lines at Hint Water as her path to the CEO the week Niantic spun out of Alphabet. Nothing in that chain requires capital or connections. It requires being awake, which is exactly why she starts coaching clients with five minutes of meditation and a “why” question every morning. The pipeline from mindfulness to alpha sounds like woo until you notice that every step of her best deals was just paying attention slightly earlier than everyone else.

    Her claim that personality is surgically alterable is more radical than it sounds, and it lands close to the core of the pursuit of joy, fulfillment, and purpose. Most self-improvement advice accepts the self as given and optimizes around it. Banister says the “I’m just like this” script is an excuse for behavior you are unwilling to change, and her values-versus-actions audit, literally listing where you lied this week, including the accidental lies of broken small commitments, is a concrete tool anyone can run tonight. She even disagrees with Marc Andreessen’s famous advice against introspection, which takes some nerve given he is one of her heroes. The through line from her homelessness to her optimism is that she treated her own character as buildable, and that is a more transferable asset than any cap table.

    The last stretch, on centralized AI, surveillance, and free speech, is where her optimism shows its edges. She is an accelerationist who backs open source and decentralized control precisely because she remembers the internet of 1999 promising the same thing and consolidating anyway. Her warning that autonomous vehicles could quietly abolish freedom of movement for dissidents is the kind of unfashionable thought experiment that her whole “question every phrase” method is built to surface. You do not have to share her politics to notice the consistency: someone who measures a nation’s health by its tolerance for comedy and rap music is applying the same test to Peter Thiel dinner parties and to AI policy, which is more than most commentators on either side can say.

    Key Takeaways

    • Cyan Banister’s first ever angel check was SpaceX, made after PayPal co-founder Luke Nosek came to her house and told her and Scott Banister to dig through their couches for anything liquid because SpaceX needed it.
    • She put everything she made from the IronPort sale to Cisco into SpaceX at a time when rockets were blowing up on the launch pad and critics said private citizens had no business in space.
    • The frame that justified the all-in bet: if you are young and able-bodied you are infinitely employable, so a total loss costs you a lifestyle, not your future. She held the position for roughly 20 years and calls it the best investment she will ever make.
    • Failure was priced in: she compares early SpaceX to early aviation, where getting planes to fly required crashing a lot of planes, and NASA veterans knew reusability would demand repeated public failure.
    • Combined with her husband Scott Banister, she believes they are the number one angel investing duo in the world, and even split individually both would sit in the top ten of the Stanford angel rankings. Married partners share capital, which rankings and lists struggle to represent.
    • Her portfolio names dropped in the episode include SpaceX, Anduril, Uber, Zappos, PayPal, Affirm, Flexport, Checkr, Density, Flock Safety, Brave, Control Labs, Depop, Substrate, Carta, Together AI, Postmates, Niantic, Diamond Foundry, Upstart, Fiverr, Forge, Opendoor, Calm, TrueMed, and Crusoe.
    • Long Journey Ventures’ logo is a bellwether, the lead sheep of a flock, looking sideways to spot the nonobvious. The firm’s “second believer” ritual uses two candles: light your candle from a founder’s flame and hold it so they can reignite if theirs goes out.
    • She was a cast member on Mike Solana’s Founders Fund Mafia show, filmed at Tosca, the same location as the famous PayPal Mafia photo, with a full reality TV production: one camera per player, table lenses, aerial cameras, and over 30 crew.
    • Her Mafia strategy is the meta game: listening for sounds, watching eye movements, tracking who protests too much and who is forming alliances, on the assumption that everyone is lying.
    • Games are Silicon Valley’s social infrastructure. Poker, Mafia, Werewolf, chess, Magic the Gathering, and Settlers of Catan nights let people skip small talk, collaborate immediately, and reveal how many turns ahead someone thinks.
    • If you get invited to a poker night or a Mafia game in tech, go. She has found founders and friends through games, and treats them like poker or golf as deal flow channels.
    • Brian Singerman got her into board games through a board game of the month club she ran for $40 a month, shipping sub-30-minute games in advance so game night starts with playing, not rule explanations. She has never met anyone better at strategy board games.
    • She beat Phil Hellmuth with her first ever bluff during a live streamed poker game she did not know was being broadcast, by convincing herself she had the best hand and acting accordingly. Hellmuth went on tilt for the rest of the session.
    • She identifies with the fool tarot card: walking off ledges expecting things to work out, and believing that on a long enough time horizon every setback turns out to have been necessary.
    • Personality is not fixed. Statements like “I’m a Scorpio, I can’t help it” or “I’m Irish, I have a temper” are excuses for behavior you are unwilling to change. With introspection, effort, and time you can surgically alter your personality.
    • Her weekly thought experiment: how wide is the space between your values and your actions? She sits down with paper and lists where she lied, including accidental lies like promising an email and not sending it.
    • She runs Awake Academy 101 classes and coaches stuck founders, starting almost everyone with five minutes of meditation a day, often in the car before starting the engine.
    • Meditation is not silencing your mind. It is noticing thoughts passing like clouds, then noticing that you are noticing, then asking who the noticer is. If you are not your thoughts, who are you?
    • Her presence toolkit: mindful showers, feeling your toes for the first minute after waking instead of launching into routines, and writing “wake up” on mirrors and windows so it appears when they fog up.
    • Humans are “why machines.” She does not start her day until she has a why question to carry through it, and says asking why about everything makes you a better investor, entrepreneur, and everything else.
    • The Niantic investment came from watching Ingress players rent helicopters and charter boats for invisible objects, realizing Google was harvesting free mapping data, then using Hint Water ticket subject lines to reach CEO John Hanke through Kara Goldin the moment Niantic spun out of Alphabet.
    • Nobody would co-invest in Niantic with her because they could not imagine people holding phones up to look at invisible Pokemon. She calls the Pokemon Go launch the closest we have come to world peace.
    • Her Uber conviction came from years of asking taxi drivers about their lives: starting each day $200 in the hole to the taxi yard explained the rushing, the crankiness, and the broken system, so when Uber appeared the pre-thinking was already done.
    • Idle time is research time. Instead of doom scrolling at a restaurant, ask why the bread is baked that way and whether robotics would improve it. Play with science fiction scenarios and they lead you to investments.
    • Her biggest worry, a question Peter Thiel used to ask her: an AI-operated surveillance state. Autonomous vehicles could end freedom of movement, with a government able to shut down your ride or lock you inside it because you are a dissident.
    • She believes the internet’s drift from open and decentralized to closed and centralized is repeating in AI, and that one company with one ideology ruling AI is dangerous. Everyone needs their own models, which is why she backs open source and decentralized control.
    • On education: unless you are pursuing medicine or another field requiring years of formal training, she questions whether school is the right move now. Artisanship and creativity will rise, and AI tutors make genuine self-teaching possible.
    • She is excited about AI as a new paintbrush unlocking dormant creativity: vibe coding, vibe manufacturing, and fully agentized businesses with no employees will mint millionaires from basements even if the businesses are not venture scale.
    • On AI art and training data: after a hundred years art enters the public domain anyway, China will train on Western IP regardless and sell it back, and today’s “slop” is the worst the tools will ever be.
    • AI still cannot replace human judgment. AI-written text has telltale signs any heavy user recognizes, so the job is to take its useful nuggets and massage them back into human form.
    • Her most exciting current investments: Substrate (the substrate of technology, bringing semiconductor manufacturing back to the Americas), Becoming Bio (the substrate of biology), and Diamond Foundry, whose real market was industrial diamonds and wafers, not rings.
    • She avoids hypercompetitive hot deals because the alpha is not in what is happening today. A good seed fund finds moonshots at low prices with meaningful ownership, in the “what’s coming” space: nanotech, biotech, and bottlenecks removed by AI.
    • She is still hunting for “the Alibaba of the Americas” and puts it out publicly in case a founder claims the idea. Wars will be fought with robots and drones, SpaceX opened the category that made Anduril and Varda imaginable, and defense primes will need competitors.
    • Her heroes: Peter Thiel (she went to “Peter Thiel University” during four years as his partner at Founders Fund and calls him tolerant, open-minded, and poorly understood), Marc Andreessen (a teenage hero she vowed to meet as an equal), Scott Cook of Intuit (the gold standard of executive function), and Rick Rubin, whom she has never met but considers a kindred mind.
    • Mentors can be far off. You can learn from people without knowing them by observing them, listening to those around them, and asking why they do what they do without assuming.
    • On shame by association: go to the events, hear all sides before deciding where you stand, and stop weaponizing accusations, because if everyone is called a racist the real ones cannot be found.
    • You can tell the health of a nation by its ability to tolerate comedy and rap music, and comedy disappearing from universities first was the warning sign. Free speech is her number one cause, and much of what she invests in serves it.

    Detailed Summary

    Inside Cyan’s Lair: Play as a Design Principle

    The interview opens in “Cyan’s Lair,” a mural-covered room at Long Journey’s headquarters painted by Brooklyn ceramicist Dave Zackin, whom Banister discovered on Instagram because he wore the same red and green glasses she needed to learn to walk again after her stroke. Zackin rescues abandoned pottery from high schools and ceramic studios, repaints and refires it, and gives it new life. Her home works the same way: thrift store finds, walls of fried eggs, bowls of fake fish people end up throwing at each other. She gauges hosting success by how many things guests touch without permission, because rummaging means they feel free to play. The candles on the wall, added by co-founder Lee Jacobs, encode the firm’s “second believer” concept: light your candle from a founder’s flame and hold it in case theirs goes out. The firm’s bellwether logo, a sheep’s eye looking sideways, comes from her habit of interrogating common phrases: when is being a sheep good, who leads the sheep, and what is the bellwether watching for that others miss?

    Mafia at Tosca: Reality TV for the PayPal Set

    Banister was a breakout player on Mike Solana’s Mafia show for Founders Fund, filmed months before release at Tosca, the location of the famous PayPal Mafia photograph. The production was serious reality television: a camera per player, lenses embedded in the table, aerial shots, and over 30 crew, with spicy moments and sushi-room banter left on the cutting room floor. Her approach was pure meta game, listening for rustling when the mafia woke at night, watching for the table jerk when players leaned on it, and asking the bar who the best players were so she could target them first. It was her first time playing the killer, and she found lying so uncomfortable she was sure everyone could tell. They could not. She hopes for a second season and notes the game should not be played with couples, since accusations have a way of outliving the game.

    Games, Poker, and the Hellmuth Bluff

    Banister argues games are how a neurodiverse industry socializes: instead of cocktail small talk, you drop straight into collaboration and watch how someone thinks, whether they plan five turns ahead, and how they handle math, psychology, and losing. Brian Singerman, whom she calls the best strategy board gamer she has ever met, subscribed to her board game of the month club, where friends paid $40 a month for sub-30-minute games shipped in advance so game nights started instantly. Her poker fame is mostly accidental: she hosts an annual charity tournament for Inflection Grants micro grants, and once stumbled into a live streamed game with Steve Aoki, Ninja, and Phil Hellmuth without realizing cameras were showing her cards to the world. Told at the break to try bluffing just once, she waited for a big pot, convinced herself she held the best hand, and played it that way until Hellmuth folded and went on tilt. The story doubles as her whole philosophy: she was only in Vegas because a portfolio company had her working undercover in a bad wig.

    The Fool Card: Optimism as a Trainable Skill

    Asked how she keeps finding herself in improbable situations, Banister says her life is a series of them, like Bill Murray in The Man Who Knew Too Little, and that if she were a tarot card she would be the fool, walking off ledges expecting things to work out. Pressed on whether ordinary people can live that way, she rejects the premise that they cannot: personality feels fixed only because we recite excuses like “I’m a Scorpio” or “I’m Irish, I have a temper.” With introspection, and here she cheerfully disagrees with Marc Andreessen’s advice against it, you can surgically alter your personality, though it takes effort, time, and facing ugly truths. Her weekly thought experiment asks how wide the space is between your values and your actions: if you claim honesty, list where you lied this week, including the accidental lies of commitments the two-hours-later version of you failed to keep. People wear masks out of fear of standing out, but everyone else is too caught up in their own noise to care, and authenticity leads to more happiness, curiosity, and wonder.

    Waking Up: Meditation, the Right Brain, and Why Machines

    Through her coaching and Awake Academy classes, Banister starts almost everyone with five minutes of meditation a day, often sitting in the car before starting it. She dismantles the perfection myth that drives people away from the practice: meditation is not silencing thought but noticing thoughts pass like clouds, noticing that you are noticing, and asking who the noticer is. From there the practice extends into ordinary life: mindful showers, feeling your toes for the first minute after waking instead of diving into routines, asking “am I awake right now?” before getting out of bed, and writing “wake up” on surfaces that fog up. The point is escaping rumination about past and future, since the present is the only thing that exists. Mind workers live in the left brain, but creativity, body sense, and intuition live in the right, and her greatest investments came with a feeling. Humans, she says, are why machines: she does not start her day without a why question to carry through it.

    Pattern Matching in the Wild: Niantic and Uber

    Her Niantic story shows the method end to end. She watched friends display irrational devotion to Ingress, renting helicopters and abandoning Defcon to capture invisible portals, immersed herself in the game, and asked why Google would build it, concluding it was free mapping data. When Alphabet spun Niantic out, she remembered support tickets at Hint Water marked “Ingress code,” asked founder Kara Goldin about the Google relationship, and was connected to CEO John Hanke within five minutes. He told her Niantic had Nintendo and Google and did not need her money; she asked for one hour and a guarantee he would not regret it, brought her best friend who was a top player (Hanke hired him nearly on the spot), and got into the round. Convincing anyone to co-invest was impossible because nobody believed people would hold up phones to look at invisible Pokemon. The Uber thesis worked the same way years earlier: asking taxi drivers about their lives revealed a system where drivers started each day $200 in debt to the yard, which explained everything riders hated about taxis. People who complain about Uber, she notes, never lived the before times.

    Worries: Surveillance States and Centralized AI

    Banister borrows a question Peter Thiel used to ask her at Founders Fund: what worries you? Her answer is an AI-operated surveillance state fused with robotics. Freedom of movement is a human right, and a future where you cannot drive yourself means someone can shut down your autonomous ride, or lock you inside it, because you said things the state dislikes. AI, like a gun, can be a paperweight or a weapon, and she is an accelerationist who still insists on thinking through what happens if it falls into the wrong hands. Having entered the industry in 1999, she watched an internet that was supposed to be open and decentralized become closed and centralized, and sees the same drift in OpenAI and Anthropic. Everyone needs their own models, she argues, because one company with one ideology ruling it all is dangerous. She also worries about children and what they should study when so much is automatable, concluding that unless a path truly requires years of schooling, like medicine, formal education may not be the answer right now.

    Excitement: The New Paintbrush and the Agentized Business

    On the hopeful side, she sees AI as a new paintbrush unlocking dormant creativity. The person with a million dollar idea who could never get on Shark Tank can now vibe code the app, put up a site, and eventually vibe manufacture the product, running an agentized business with no employees from a basement. These may not be venture scale companies, but they will mint a wave of millionaires, followed in two to three years by a consumer wave that changes signs, fashion, and manufacturing. On AI art controversies she is pragmatic: all art enters the public domain after a hundred years anyway, China will train on Western IP regardless and sell it back, and today’s tools are the worst they will ever be. She has hundreds of movies inside her and can finally make them. But AI is not a replacement for humans: its writing carries telltale signs, and the human job is to take its nuggets and massage them back into human form, agreeing with the host’s Config takeaway that AI generates the average and the human must pull the work out of the bell curve.

    The SpaceX Bet and What Risk Taught Her

    The centerpiece story: Luke Nosek, who met Scott Banister and Max Levchin in a University of Illinois computer lab and drove west with Scott communicating by walkie-talkie, became Elon Musk’s fiercest champion. He arrived at the Banisters’ house, got on the floor in his Vibram shoes, and delivered the pitch: dig through your couches, anything liquid you have, SpaceX needs it. Rockets were blowing up on the launch pad and critics said private citizens had no business in space, but Nosek and Scott argued that early aviation crashed a lot of planes too, and that a young, infinitely employable person should take the shot. Fresh off her IronPort exit to Cisco, she went all in, then immediately wondered what she had done while her own startup struggled. Twenty years later, still essentially unsold, it is the best investment she will probably ever make. The deeper lesson came from realizing angel investing was a special club she had lucked into, one most people never learn exists. Scott farmed his PayPal network while she networked relentlessly through TC40, TC50, Disrupt, and YC demo days for a decade, writing failed checks and calibrating her pattern matching, because becoming good at early stage investing requires losing.

    What’s Next, and the Mentors Behind It

    Her most exciting current bets are Substrate and Becoming Bio, the substrates of technology and biology, plus Diamond Foundry, whose skeptics saw only synthetic rings while the founder saw industrial diamonds and wafers for AI and crypto. She wants semiconductor manufacturing back in the Americas, is watching AI companion devices race toward a genuinely useful Tamagotchi, and keeps a standing public request for the Alibaba of the Americas. She avoids today’s hot hypercompetitive deals because the alpha lives in what is coming, nanotech, biotech, and the bottlenecks AI removes, not what is hot now. Her inspirations: Peter Thiel, her partner for four years at what she calls Peter Thiel University, whom she defends as tolerant, open-minded, and poorly understood; Marc Andreessen, the teenage hero she vowed to meet as an equal and eventually did; Scott Cook of Intuit, her gold standard of executive function and decency; and Rick Rubin, the one mind she compares to her own, whom she is putting out into the universe a request to meet. The closing stretch is a defense of curiosity over tribalism: go to the Thiel events, hear all sides before deciding where you stand, stop diluting real words like racism through overuse, and protect the two canaries of a free nation, comedy and rap music. Free speech, she says, is her number one cause.

    Notable Quotes

    “Banisters, I need you to dig through your couches. Anything liquid you have, I need it. SpaceX needs it.”

    Luke Nosek’s pitch, as retold by Cyan Banister, describing the night that led to her first angel check

    “Luke and Scott convinced me to put everything that I made in IronPort when we sold to Cisco into SpaceX.”

    Cyan Banister, on going all in while SpaceX rockets were still blowing up on the launch pad

    “You can actually surgically go in and alter your personality where you can actually change these things, but it takes effort and time and a lot of facing the ugly truth about yourself.”

    Cyan Banister, rejecting the idea that personality is fixed

    “Meditation is about noticing the thoughts and noticing that they’re going by like clouds and then noticing that you’re noticing. So who is that person? So if you are not your thoughts then who are you is where I would start.”

    Cyan Banister, on the five minute practice she prescribes to stuck founders

    “When you ask why about everything in the world, it’s just going to make you a better investor. It’s going to make you a better entrepreneur, a better everything.”

    Cyan Banister, on humans as why machines and the habit behind her Uber and Niantic bets

    “I always say it’s the closest we’ve come to world peace. It was one of the most magical few weeks of my life and probably many people’s lives.”

    Cyan Banister, on the launch of Pokemon Go

    “I’ve got to try to find things at lower prices that are still a moonshot that I can get a good percentage of ownership like a good seed fund should do.”

    Cyan Banister, on why she avoids hypercompetitive hot deals where the alpha is already gone

    “If you get invited to a Peter Thiel event, go. Do not shy away from it. It does not make you anything that anyone’s going to accuse you of.”

    Cyan Banister, on curiosity versus shame by association

    “You can tell the health of a nation by its ability to tolerate comedy and rap music. Those two things have to exist for freedom.”

    Cyan Banister, on the canaries of free speech, her number one cause

    Watch the full conversation with Cyan Banister on the Sourcery podcast here.

    Related Reading

    • Cyan Banister (Wikipedia) background on her path from homelessness to one of the most successful angel investors in the world.
    • Long Journey Ventures the “magically weird” seed fund she co-founded, home of the bellwether and the second believer candles.
    • Luke Nosek (Wikipedia) the PayPal co-founder and Founders Fund co-founder whose couch-digging pitch started it all.
    • The Creative Act by Rick Rubin, the book behind the openness-to-the-universe mindset Banister says mirrors her own.
    • Purpose (PJFP) our pillar page on building the kind of why-driven daily practice Banister describes.
  • Ken Griffin on AI, the Golden Age of Entrepreneurs, and the Taiwan Chip Risk That Would Cut US GDP 8 Percent: Inside the Citadel Founder’s Goldman Sachs Great Investors Interview

    Ken Griffin, founder and CEO of Citadel, sat down with Goldman Sachs’ Raj Mahajan at the firm’s Apex Symposium (recorded June 2, 2026) for this episode of Goldman Sachs Exchanges: Great Investors. It is their third public conversation in seven years, and Griffin is unusually candid: about the Friday he went home “shocked and depressed” over AI, the agentic system inside Citadel that compresses six weeks of PhD-level work into two hours, why a Chinese move on Taiwan would throw the US into a depression within six months, and the one question every hedge fund investor should ask their GP.

    TLDW

    Griffin names his two proudest leadership calls: dragging Citadel back to the office five days a week before it was acceptable (citing Fed research that remote work has hurt young Americans’ employment more than AI has), and Citadel’s pandemic role, from getting the FDA to approve experimental COVID drug trials in 72 hours to shaping the incentive design behind Operation Warp Speed, which he credits with saving roughly half a million American lives. On markets, he explains why the S&P sits at all-time highs despite wars in the Middle East and Europe: US energy insulation, stunning Chinese oil demand destruction, and record corporate earnings. On AI, he distinguishes hype from reality (a dinner of multinational CEOs gave him five stories of “AI transformation,” none of which were actually AI), then describes the internal breakthrough that changed his mind: an agentic system that reads, reproduces, and out-of-sample-tests academic finance papers in 2 to 3 hours instead of 6 to 8 weeks. The consequences: no layoffs at Citadel, but competitive moats across the economy are being filled in at lightning speed, setting up a golden age of entrepreneurship. He covers the compute market (all available compute is utilized all the time; market makers now spend hundreds of millions a year), China’s lead in roughly 67 of 74 critical technologies, the Taiwan scenario in which losing TSMC chips cuts US GDP 8 percent in six months, an energy doctrine built on nuclear, natural gas, and building data centers (with their own generation) in America, his stress-test approach to tail risk (definable, tolerable, still in business), and hedge fund economics: the industry’s cost of capital is roughly risk-free plus 4 percent, which is why Citadel has returned $25 to 30 billion to its LPs.

    Thoughts

    The most useful thing in this conversation is Griffin’s two-sided read on AI, because he refuses to pick a lane. The paper-replication story is the cleanest documented example yet of AI eating not just white-collar work but masters-and-PhD-level work, from the man whose firm profits from that labor. Yet in the same breath he reports zero headcount reduction, because Citadel has more problems to attack than people to attack them. Both things are true at once, and he names the synthesis honestly: the individual firm gets more productive while every firm’s moat gets shallower. Most commentary picks either the doom frame or the productivity frame. Griffin holds both, and his conclusion (a golden age of entrepreneurship, startups running on a few AI systems instead of 30 to 40 employees) is the actionable part.

    His dinner-party anecdote deserves to be a standard reference. Five global CEOs effusing about AI transformation, and every single story was actually machine learning, optimization, or plain digitization. The C-suite cannot tell AI from technology at large, which means a meaningful slice of the “AI is transforming our business” narrative priced into the S&P is really a decade-old digital revolution wearing a new label. That is not a bearish observation, since the earnings are real either way, but it matters for anyone trying to figure out which companies actually have AI leverage and which have rebranded their IT budget.

    The Taiwan section is the starkest risk framing you will hear from someone who runs both a hedge fund and one of the world’s largest market makers. An 8 percent GDP contraction in six months is not a market correction, it is Boeing halting production, new cars stopping, and consumer electronics freezing simultaneously, because TSMC chips are in every high-end product made. What makes his version distinctive is the second-order point: in a Taiwan blockade, he does not expect unified Western sanctions. Europe’s membership on “team USA” is less clear than it was two years ago, and the Middle East will play Switzerland because China buys its oil. Investors should notice that his answer to “how do you hedge this?” is not clever derivatives, it is his stress-test doctrine: know the worst case, size exposures so the loss is definable and tolerable, and stay in business to fight back.

    Finally, the small structural details are where the conversation earns its Great Investors billing. Compute has become a commodity input like jet fuel, fully utilized at all times and allocated purely by willingness to pay, which quietly favors high-margin businesses and squeezes everyone else. Alternative data made the present transparent, so the remaining edge in stock picking is multi-year vision about which companies are building transformative products. And the hedge fund test he closes with is one any allocator can use tomorrow: is your GP in the asset management business or the performance business? Citadel returning $25 to 30 billion to LPs is what the performance answer looks like in practice.

    Key Takeaways

    • Griffin’s proudest leadership call was bringing everyone back to the office five days a week, extremely early and against the culture, because humans are social creatures who learn through apprenticeship and mentorship.
    • He cites a Fed paper on reduced employment among workers under 30: remote work turns out to be a more important factor in diminished opportunities for young Americans than AI.
    • At the start of the pandemic, a hospital-system CEO called Griffin because he could not get FDA approval for drug trials on ventilated COVID patients; Citadel’s team got experimental trials approved in about 72 hours.
    • The key insight behind Operation Warp Speed, which Griffin discussed at length with Jared Kushner, was an incentives fix: the US government paid pharma to manufacture vaccines before FDA results existed, collapsing time-to-market from months to days.
    • By his math, the country spent a few billion dollars on that risk, saved a few trillion dollars of GDP, and saved roughly half a million American lives.
    • The S&P is at all-time highs despite a Middle East war, a still-raging war in Europe, and a potential skirmish over Cuba, because the US is relatively shielded from the energy shock.
    • China’s oil demand elasticity stunned even Citadel’s commodities business, one of the largest in the world; that demand destruction plus episodic oil flows out of the region has kept crude near the low $100s instead of the nearly $200 most models predicted if the straits closed.
    • Citadel has been a huge user of machine learning since TensorFlow arrived roughly a decade ago; the current wave is an acceleration of a digital revolution already underway, not a clean break.
    • At a dinner two years ago, Griffin asked global multinational leaders to share how AI was transforming their businesses: he got four or five great productivity stories and not one actually involved AI. They were machine learning, optimization, and digitization.
    • In the C-suite the nuance between AI and technology at large gets lost, but bigger budgets and CEO enthusiasm are pushing through real projects with real bottom-line impact; US corporate earnings are at all-time highs and multiples have actually come down as a result.
    • The use case that sent Griffin home shocked and depressed: a Citadel team member built an agentic AI system that reads an academic finance paper, reproduces it, verifies the published results, and tests them out of sample in 2 to 3 hours on average.
    • That same replication work previously took a legion of young masters and PhD hires roughly six to eight weeks per paper; Citadel finds a few tradeable ideas a year this way, and a few ideas can be worth a lot of money.
    • The point he stresses: this is not just a white-collar job being automated, it is a master’s or PhD-level job, and AI is now cracking problems (like the 80-year-old math problem OpenAI solved) that seemed beyond its reach two or three years ago.
    • Despite the breakthrough there has been no reduction in headcount at Citadel: the firm has more problems to attack than people, so Griffin takes every productivity gain he can get.
    • The flip side is that competitive moats across corporate America are being filled in at breathtaking speed, which Griffin expects to produce a golden age of entrepreneurial activity.
    • His example: a startup that would traditionally need 30 or 40 employees now runs with just a few AI systems, letting entrepreneurs take on incumbents in ways impossible 5, 10, or 20 years ago.
    • Some workers face genuinely hard transitions (his example is English-to-German translators), and the country needs to figure out how higher education can retrain these people quickly.
    • Stock picking remains a timeless business with a similar skill set, but the market will increasingly reward multi-year vision about which companies are creating transformative products rather than skill at calling quarterly earnings beats.
    • Alternative data (Citadel has access to the credit card spending of millions of Americans) made the here-and-now transparent a decade ago; AI plus bright people now triage the present almost instantly, so relative value accrues to those who can see years ahead.
    • At Citadel Securities, transformer models continue a decade of ML-driven improvement in pricing and risk management, and the same is true at other leading market-making firms.
    • For all intents and purposes, all available compute in the world is utilized all the time; access is decided by who will pay the most, and the per-unit price has risen beyond what anyone reasonably projected two or three years ago.
    • Large market-making firms now spend hundreds of millions of dollars a year on compute; Griffin compares compute inflation to jet fuel and egg prices, a cost that high-margin businesses can bear and low-margin businesses cannot.
    • China leads in roughly 67 or 68 of the 74 or 75 most important technologies in the world, including solar, EV batteries, and multiple quantum fields, and has pulled ahead in published academic papers.
    • The drivers are structural: 1.4 billion people, an extraordinarily strong educational culture, and far more STEM graduates, producing exactly the human talent needed to win in a high-IP world.
    • China is no longer relegated to producing low-margin products designed in America, and Griffin calls that shift a threat to the American way of life; the answer is not tariffs but educating US youth to out-compete, out-innovate, and out-problem-solve.
    • If China takes Taiwan and the US loses access to Taiwanese semiconductors, the rough estimate is US GDP falls 8 percent in six months: a great depression in the blink of an eye, unlike any before.
    • The mechanism is concrete: Boeing stops making planes within six months, most new cars stop being manufactured, consumer electronics production freezes, because TSMC chips are in every high-end product made.
    • There are no winners in a Taiwan escalation: tanking the US economy would have draconian knock-on effects for China given America’s importance as an export market.
    • In a Taiwan blockade Griffin does not expect unified global sanctions against China: where you sit determines your exposure, Europe’s place on team USA is less clear than two years ago, and the oil-exporting Middle East will play Switzerland.
    • On energy, the US must re-embrace nuclear, with small modular reactors a big part of the story: nuclear has effectively no carbon footprint and one of the lowest mortality rates of any energy source ever used (hydro has killed magnitudes more people).
    • He punctures the clean-energy veneer: solar cells are often made in western China by burning coal, with roughly a seven-year energy payback, and carbon fiber wind turbine blades last 20 years then fill landfills because they do not break down. No truly clean solution exists until fusion or broader nuclear.
    • Until then, natural gas is America’s huge asset: decades of cheap supply, and one of the few things that has actually brought down US carbon emissions.
    • Data centers are going to get built somewhere, and Griffin argues it would be inane for America to end up dependent on foreign countries for them; his fix for NIMBY politics is to require data center builders to construct corresponding power generation, tied to the grid for reliability, rather than pushing costs onto consumers.
    • His hedging doctrine for complicated risks: run stress tests, know exactly how much you lose and where in the worst case, and keep exposures sized so the loss is definable, tolerable, and leaves you still in business and able to fight back. You will never hedge every tail event.
    • Hedge fund industry economics: the long-run cost of capital is roughly the risk-free rate plus 4 percent; underperform and capital flows out, outperform and it flows in, and inflows dilute alpha because alpha capacity is finite.
    • Citadel has returned $25 to 30 billion to its limited partners to keep return on equity high: Griffin’s job is to grow annual alpha capacity, and any capital beyond what the portfolio needs goes back to LPs.
    • The alignment test for allocators: the biggest investor in Citadel’s funds is Griffin and his partners, and every LP should ask whether their GP is in the asset management business or the performance business.

    Detailed Summary

    Return to Office and the Cost of Remote Work

    Asked what he is most proud of beyond the numbers, Griffin starts with Citadel’s early, countercultural demand that everyone return to the office five days a week. He frames it as a human capital decision, not a control decision: people learn through apprenticeship, mentors are critical to development, and the underdevelopment of talent from remote work has damaged the broader economy. He points to recent Fed research on falling employment among under-30s: remote work turns out to matter more than AI in diminishing opportunities for young Americans. Citadel not only brought its team back but publicly extolled the virtues of doing so, and Griffin believes history will be on his side.

    72 Hours to FDA Approval and the Warp Speed Incentive Design

    His second point of pride is Citadel’s pandemic chapter. As the first US COVID cases appeared, a former partner running a major New York hospital system called: he could not get FDA approval for experimental drug trials on ventilated patients facing imminent death, and believed only Griffin could make it happen. Citadel’s team, with decades of government experience, got approvals moving in about 72 hours. The second act was Operation Warp Speed, whose core idea Griffin discussed at length with Jared Kushner: pay pharmaceutical companies to manufacture vaccines before FDA results, so a positive result means days to market instead of the standard sequence losing three to six months. No company would spend billions producing vaccines that might be flushed down the sewer, so the US government took the manufacturing risk on unproven efficacy. A few billion dollars spent, a few trillion in GDP saved, and roughly half a million American lives.

    All-Time Highs in a World at War

    Griffin’s market picture is unsentimental: there is a war in the Middle East, a still-raging war in Europe, potential trouble in Cuba, and the peace both men grew up with is off the table. Yet the S&P sits at record highs. His explanation: America is relatively shielded from the war-driven energy crisis. China has curtailed oil demand with an elasticity that stunned even Citadel’s commodity desk, and episodic oil and LNG flows keep leaving the region, holding crude around the low $100s when most estimates had a strait closure producing nearly $200 a barrel. Meanwhile corporate earnings are at all-time highs, enough that multiples have actually compressed over the last 12 months.

    The AI Story CEOs Tell Versus the One That Is True

    Citadel has used machine learning heavily since TensorFlow arrived a decade ago, powering everything from radiology reads to self-driving cars across the economy, so Griffin sees today’s AI wave as an acceleration of an ongoing digital revolution. His favorite corrective: at a dinner with global multinational leaders two years ago, everyone was effusive about AI transforming their businesses, so he asked them to go around the table with specifics. Four or five genuinely impressive productivity stories emerged, and not one involved AI: they were machine learning, optimization, digitization, technology at large. The C-suite blurs the distinction, but the enthusiasm has unlocked bigger technology budgets and real bottom-line projects, which is part of why earnings are at records.

    The Agentic System That Shocked Him

    Then comes the story behind the famous “shocked and depressed” Friday. Citadel employs legions of young masters and PhD graduates to replicate academic finance papers: read the hypothesis, judge the work, reproduce results, and test whether the effect persists out of sample (does buyback activity predict outperformance, for example). Each paper takes six to eight weeks, and the process surfaces a few valuable ideas a year. A colleague built an agentic AI system that does the entire pipeline (read, reproduce, verify, out-of-sample test) in two to three hours on average. Griffin’s emphasis: this is not routine white-collar work, it is master’s and PhD-level work, and paired with OpenAI solving a math problem open for 80 years, it shows AI cracking problems considered out of reach two or three years ago. Notably, Citadel cut zero headcount on the back of the breakthrough; the firm has more problems worth attacking than people to attack them, so every productivity gain gets absorbed.

    Filled-In Moats and a Golden Age of Entrepreneurs

    The macro consequence Griffin draws is double-edged. Hold two thoughts at once: AI is reaching very high-level work in the job market, with some workers (translators, for instance) facing hard transitions that demand fast retraining through higher education. And simultaneously, the competitive moats of corporate America are being filled in at breathtaking rates. That means entrepreneurs can launch businesses at speeds impossible 5, 10, or 20 years ago: he mentions a startup running on a few AI systems where 30 or 40 employees would once have been required. He expects a wave of these stories over the next couple of years as founders use the technology to take on incumbents.

    The Future of the Stock Picker

    Griffin has called stock picking a timeless business, and he still sees a similar skill set for the portfolio manager of the future, with one shift in emphasis. Predicting quarterly earnings beats has gotten far harder over a decade as alternative data (credit card panels covering millions of Americans, telegraphing Starbucks and McDonald’s revenues) made the present transparent. Now bright people plus good AI triage the here-and-now almost instantly. The scarce, rewarded skill becomes vision: identifying which companies are building genuinely transformative products years before the market fully prices it.

    Compute Is the New Jet Fuel

    At Citadel Securities, which holds double-digit market share across equities, futures, and treasuries, transformer models extend a decade of machine learning gains in pricing and risk. The compute market backdrop is what Griffin calls breathtaking: essentially all available compute on Earth is utilized all the time, so access reduces to who will pay the most. Per-unit compute prices exceed what anyone reasonably projected two or three years ago, and large market makers now spend hundreds of millions of dollars annually. He treats it as straightforward input inflation, like jet fuel or eggs: high-margin businesses can bear it, low-margin ones cannot.

    China’s Technology Lead and the Taiwan Equilibrium

    Griffin states the cold reality: China is one of the most innovative, fastest-growing economies in the world, leading in roughly 67 or 68 of the 74 or 75 most important technologies (solar, EV batteries, several quantum fields) and now ahead in published academic papers. The foundation is 1.4 billion people, a culture with an extraordinary emphasis on education, and far more STEM graduates. China is no longer relegated to manufacturing low-margin products designed in America, and Griffin calls that a threat to the American way of life. His prescription is pointed: not tariffs, but educating American youth to out-compete, out-innovate, and out-problem-solve. Taiwan is the painful pressure point with no winner. If China takes Taiwan and the US loses TSMC chips, GDP falls an estimated 8 percent in six months: Boeing stops making planes, most new car production halts, consumer electronics freeze, a great depression in the blink of an eye. China would suffer draconian knock-on effects too. As an investor he thinks about position: sanctions in a Taiwan blockade would not be unified, Europe’s place on team USA is a genuine question mark now, and the oil-exporting Middle East would play Switzerland since China is its biggest customer.

    Energy Realism: Nuclear, Gas, and American Data Centers

    On powering AI, Griffin wants America to lead again in nuclear, with small modular reactors central: no meaningful carbon footprint and one of the lowest mortality rates of any energy source ever deployed (hydro has killed magnitudes more people). He challenges the superficial cleanliness of renewables: solar cells are often made in western China with coal power, requiring about seven years of energy capture to break even against the coal burned making them, and 20-year-old carbon fiber wind turbine blades do not break down and are already filling landfills. Until fusion or expanded nuclear, America’s real asset is natural gas: decades of cheap supply that has actually driven US emissions down. His data center position is blunt: they will get built somewhere, and depending on foreign countries for them would be inane, so build them in America. His answer to NIMBY politics: require data center developers to build corresponding power generation, tied to the grid for reliability, so the cost never lands on the American consumer.

    Tail Risk, Tolerable Losses, and Hedge Fund Alignment

    On hedging complicated risks, Griffin’s method is stress testing: if this happens, how much do we lose and where, and is that loss tolerable? You can never manage a portfolio for every possible tail event, but you can keep exposures sized so the worst case is definable and tolerable, leaving you still in business and positioned to fight back. On industry returns, he pegs the hedge fund cost of capital at roughly the risk-free rate plus 4 percent as the long-run equilibrium: underperformance drains capital, outperformance attracts it, and since recent outperformance keeps pulling money in, growing assets dilute alpha. That is why Citadel has returned $25 to 30 billion to LPs: alpha capacity is finite, Griffin’s job is to grow it, and excess capital goes back to investors to keep return on equity high. The closing advice is an alignment test: Citadel’s biggest investor is Griffin and his partners, and every allocator should ask whether their GP is in the asset management business or the performance business.

    Notable Quotes

    “Turns out that remote working is a more important factor to diminished employment opportunities for young Americans than AI.”

    Ken Griffin, citing Fed research on under-30 employment

    “We spent a few billion dollars as a country. We saved a few trillion dollars in GDP. We saved roughly half a million American lives.”

    Ken Griffin, on Operation Warp Speed’s incentive design

    “I got four or five incredible stories of how companies were achieving meaningful productivity gains. Not one involved AI.”

    Ken Griffin, on his dinner with global multinational CEOs

    “My colleague built an agentic AI system that would read a paper, reproduce it, verify the results that were published in the paper, produce the results out of sample, and do all this work in about on average 2 to three hours.”

    Ken Griffin, on the breakthrough that replaced six to eight weeks of PhD-level work

    “We’re likely to see a golden age of entrepreneur activity. Like entrepreneurs will be able to launch new businesses at breathtaking speeds and will be able to take on incumbents in ways that you just couldn’t do 5, 10, 15, 20 years ago.”

    Ken Griffin, on AI filling in competitive moats

    “All the available compute today is more or less utilized all the time. So the question is who’s willing to pay the most for it?”

    Ken Griffin, on the global compute market

    “The US loses access to Taiwanese semiconductor chips, our GDP falls by 8% in 6 months. Simply put, we go into a great depression in the blink of an eye unlike any we’ve seen before.”

    Ken Griffin, on the Taiwan scenario

    “We better damn well build the data centers in America because they’re going to get built somewhere in the world.”

    Ken Griffin, on energy policy and AI infrastructure

    “Definable, tolerable, still in business, still in a position to fight back from that point.”

    Ken Griffin, summarizing his approach to hedging tail risk

    “Are they in the asset management business or are they in the performance business?”

    Ken Griffin, on the question every hedge fund investor should ask their GP

    Watch the full conversation here: Ken Griffin on Goldman Sachs Exchanges: Great Investors.

    Related Reading

  • The Next 3 Years of AI, According to Steve Jurvetson: Moore’s Law, Superintelligence Odds, Elon Musk’s Operating Principles, and Where the Legendary SpaceX and Tesla Investor Is Betting Next

    Steve Jurvetson has spent 30 years funding the future before it was a category: an early check into SpaceX when space was not a venture sector, Tesla before electric cars were taken seriously, and now a portfolio spanning fusion, analog AI chips, and epigenetic editing at his firm Future Ventures. In this fireside chat he lays out what the next three years of AI actually look like, the three principles he has learned from working alongside Elon Musk for nearly three decades, the question he uses to separate missionary founders from opportunists, and why he thinks alignment of frontier AI systems may simply not be possible.

    TLDW

    Jurvetson argues the 130-year exponential in compute per dollar (Ray Kurzweil’s abstraction of Moore’s Law from his book The Age of Spiritual Machines) will keep running for at least three more years, carried by analog and custom AI silicon, and that this compounding is what makes startups and disruption possible at all. His gut says the next big leap will be “architecturally variant”: a new generation of labs going back to DeepMind’s founding premise of reinforcement learning, continuous learning, and novelty-seeking goal functions rather than bigger LLMs. He relays Anthropic co-founder Jack Clark’s 30 percent odds of superintelligence within a year but notes the crucial missing piece is that humans still set every goal. Adoption will be wildly uneven: anything made of atoms (cars, robots) switches over glacially, while creative work and white-collar categories like call centers (roughly 1 percent of US GDP) flip almost instantly. From Musk he draws three lessons: insane focus and saying no, maniacal attention to the cycle time of learning loops (Tesla gathers more AI training data every 4 days than Waymo has in its entire history), and being a magnet for talent by selling a grander mission. He explains Future Ventures’ current bets (fusion, free diagnostics via phone, slaughter-free meat, epigenetic editing, critical minerals, analog in-memory compute), tells solo founders their 30-day plan is to find a co-founder, predicts a turbulent transition to abundance, doubts Neuralink can keep pace with AI, dismisses Penrose’s quantum consciousness argument, and frames the post-work question with Man's Search for Meaning: humans need symbolic immortality, not just employment.

    Thoughts

    The most load-bearing claim in this conversation is not about scaling laws, it is about architecture. Jurvetson is telling you where the smart contrarian money is looking: away from ever-larger language models and back toward reinforcement learning agents with continuous learning and self-generated goals, the original DeepMind thesis that got shelved when LLMs took off. His framing of the open problem is unusually precise. The recursive self-improvement loops everyone is excited about are real, but every one of them is still human-directed. The goal-setting layer, what he calls the selection pressure of the evolutionary algorithm, is the “thin veneer of activity” AI does not yet do, and it happens to be the layer where superintelligence either does or does not arrive. That is a much sharper way to track AGI progress than benchmark scores: watch who cracks autonomous goal formation, not who tops a leaderboard.

    Almost everything else Jurvetson says reduces to a single metric: the cycle time of the learning loop. It is his explanation for Musk’s edge (launch cadence, the Tesla fleet as a data-collection machine), his filter for which industries flip fast (bits iterate at machine speed, atoms are stuck with 11-to-12-year car replacement cycles and FDA timelines), and even his bear case on Neuralink, which he has invested in. Biology cannot iterate at synthetic speed, so the substrate that learns fastest wins. Once you see the pattern, it becomes a genuinely useful lens for evaluating any company, career, or technology: ask how fast the loop spins, not how impressive the current artifact is.

    The aside that deserves the most attention is his flat statement that mechanistic interpretability will not bear fruit and that control and alignment of a cutting-edge system is not possible. His reasoning is structural, not rhetorical: anything produced by an iterative algorithm run billions of times (evolution, neural network training) is inherently inscrutable, and it will always be easier to build a new intelligence than to reverse engineer one you already made. He swaps “teenager” for “AI” whenever he thinks about control, which is funny until you notice he is one of the most connected investors in the Musk orbit saying the safety agenda rests on a false premise. Sitting that next to the 30 percent superintelligence odds he cites from Jack Clark produces an uncomfortable arithmetic that nobody on stage follows to its conclusion.

    For builders, the practical gold is the 50-year question. Ask a founder what their business looks like in 50 years: the opportunist laughs at the question, the missionary is relieved someone finally asked. Paired with his other filters (if only two out of ten people think your idea is crazy it is not bold enough, and a good business is one that could not have been started three years ago), it doubles as a hiring screen and a self-diagnostic. And his 30-day plan for a solo founder is refreshingly unglamorous: do not build the MVP, do not pitch investors, go persuade one person to give up their job and join you. If you cannot recruit a co-founder, that is the market’s first answer about your idea.

    Key Takeaways

    • Jurvetson invested early in SpaceX and Tesla precisely because space and automotive were not venture categories at all; a software-centric systems engineering approach applied to a sleepy industry that has not changed in decades unlocks enormous value, and that playbook is now rippling through every industry.
    • The Kurzweil curve plots 130 years of compute per dollar across five substrates (mechanical, relay, vacuum tube, discrete transistor, integrated circuit) and shows a 10,000 billion billion X improvement; Jurvetson calls it the most important thing ever graphed.
    • Customers buy compute capacity and memory, not transistors, and both have been “on rails” for 130 years; the default prediction for the next three years is simply that the curve keeps going.
    • When an incumbent declares Moore’s Law dead, it usually signals they are losing their business to someone new, as Intel was to Nvidia 15 years ago.
    • Analog chips and customized AI silicon that do discrete matrix multiply-and-add extremely efficiently will carry the mantle of Moore’s Law over the next three years.
    • Without exponential technological change there would be no startups: if business is predictable, the big get bigger and incumbents block new entrants; disruption is almost always computationally based.
    • Over the next three years AI ripples through energy, agriculture, and construction: three enormous industries that are growing as a percentage of GDP and are the least digitized on the planet, with healthcare close behind.
    • His gut says the next driver will be architecturally variant, possibly subsuming today’s models the way mixture of experts subsumes other architectures or massively parallel diffusion models reinterpret the transformer.
    • A whole new generation of neural labs is returning to the founding premise of DeepMind: reinforcement learning with continuous learning, let loose on the internet’s data sets, hunting for the algorithm that bootstraps intelligence.
    • The open question for these systems is the goal function: what plays the role of evolutionary selection pressure? Candidates include understanding the universe (the xAI mission) or a novelty-seeking algorithm that uses new discoveries as its measure of progress.
    • Jack Clark, co-founder of Anthropic, gives roughly 30 percent odds that superintelligence arrives within a year; Jurvetson declines to put odds on it himself and admits “I do not know” is the honest answer.
    • Today’s self-improving AI loops (automated verification, hyperparameter adjustment between training runs, AI-mediated experimentation) are real but still human-directed; goal setting remains the thin veneer AI does not do, and it may be the most important layer.
    • Human intelligence was bootstrapped on top of reactive limbic systems and emotional centers with cortex layered on top; it is an open philosophical question whether AI systems need to recapitulate that functional specialization to take on purpose and meaning.
    • Anything involving atoms switches over slowly: fully autonomous vehicles are inevitable (every car, train, and airplane), but people keep cars 11 to 12 years, so the physical swap-out cycle makes the transition feel glacial.
    • Physical robotics faces the same constraint: making a billion robots takes time even with recursive manufacturing techniques.
    • The domains that flip like wildfire are the ones we held as uniquely human: creative arts, moviemaking, and imagery came first, which Jurvetson finds somewhat shocking.
    • Call centers represent roughly 1 percent of US GDP and can switch over almost entirely and almost instantly; white-collar work generally has no physical swap-out cycle to slow it down.
    • People will increasingly prefer AI to human interactions when the AI is better: studies of physician bedside manner and customer service already show AIs doing a better job with emotional connection than humans.
    • Musk principle one is an insane ability to focus: running many companies forces ruthless prioritization, and he says no to anything that is not mission-critical right now, including a Craig Venter brainstorm on terraforming Mars because “none of this stuff on Mars matters” until Starship flies.
    • Musk principle two, the most important: maniacal focus on the cycle time of innovation, the core learning loop, whether launch cadence or fleet data; Tesla cameras gather more AI training data every 4 days than Waymo has collected in its entire history, because every vehicle collects data whether or not the customer paid for full self-driving.
    • Musk principle three: being a magnet for talent, screening for mastery by drilling into engineering crises a candidate actually solved rather than leaning on credentials (which are often an albatross), and framing the company as something grander (sustainable energy, multi-planetary humanity, understanding the universe) so the best people want to join.
    • Jurvetson filters founders with one question: what does your business look like in 50 years? Opportunists chuckle at the absurdity; missionaries are relieved and finally tell you what has been driving them all along. He passes on the ones who laugh.
    • The best startups hold two things in tension simultaneously: an audacious 50-to-500-year vision and a concrete plan to iterate with real customers over the next three years, chaining backward from the future to what must be built now.
    • The perpetual surprise of great companies is expanding option value: autonomous driving was nowhere in Tesla’s founding plan, and Starlink, direct-to-cell, and orbital data centers were not on SpaceX’s dance card even five years ago. Exploring the option space beats purposeful ten-year planning.
    • Future Ventures invests in things unlike anything they have seen before yet adjacent to what they know, ideally companies that are literally one of a kind.
    • Current bets include nuclear fusion and subcritical fusion that avoids NRC regulation, because energy is the third bottleneck for AI after talent and compute.
    • Other 500-year-problem bets: free healthcare via a cell phone (all diagnostics as a free global service, probably launching outside the US to bypass FDA and insurance), slaughter-free meat via cellular agriculture and mycelium, and construction, where labor productivity has been flat for 30 years.
    • Recent investments span epigenetic editing (the software of biology rather than the firmware of the genome, applied to crops, pesticides, and human health), critical minerals from deep sea mining to copper refining, and reshoring US industrial capacity.
    • Three separate analog AI chip investments approach the same goal from different angles, including Mythic’s in-memory compute doing 8-bit multiplication in a single transistor, each chasing 100X and then another 100X reduction in power per calculation.
    • The portfolio is roughly 40 percent life sciences and 60 percent IT, deliberately hunting the weird edge cases that fall through the cracks of traditional pharma VC: organ harvesting for transplant, a male birth control pill, dramatically improved IVF.
    • Old industries with no new entrants are the best targets: the four largest tunnel boring companies competing with the Boring Company were all started in the 1800s.
    • The 30-day plan for a single person with an idea: find a co-founder. Great startups tend to have a dynamic duo at the founding (Jobs and Wozniak, Sergey Brin and Larry Page, Larry Ellison and Bob Miner), and persuading one person to quit their job for your mission is the first real test of the idea.
    • A founding pair with diverse backgrounds and mutual respect sets the culture for everyone hired afterward and creates cognitive diversity that ripples through the whole firm.
    • Calibrate boldness by the crazy ratio: if 100 percent of people say your idea is crazy, take the feedback; nine out of ten is pretty good; if only two out of ten think it is crazy, it is not bold enough. Also ask whether the business could have been started three years ago; if yes, that is a bad sign.
    • Co-founders most often meet at universities, one of the few places where people cross academic disciplines; breakthrough innovation happens at the interstices between formally discrete fields, and LLMs are exceptionally good at exactly that cross-domain translation, opening a fountainhead of idea discovery.
    • Roughly 19 percent of global employment involves driving vehicles, and that work is going away, just more slowly than people imagine.
    • Humans have a fundamental desire for symbolic immortality: contributing something that outlasts our brief time here, whether children, books, philanthropy, or companies. Accumulated cultural knowledge, not biology, is the primary vector of human evolutionary progress.
    • There is no peaceful path from full employment to no employment: passing through 30, 40, 50 percent unemployment will be turbulent, and no politicians are taking a long-term perspective on it.
    • On Neuralink (which he invested in): expanding the sensory periphery is very doable (higher data rates, restoring hearing and spinal function, seeing more wavelengths), but upgrading core intelligence requires reverse engineering an inscrutable iterated system, and biology’s FDA-and-wetware timescales cannot keep up with synthetic learning loops.
    • Any product of an iterative algorithm run billions of times (evolution, neural networks, genetic programming) is inherently inscrutable; Jurvetson doubts mechanistic interpretability will bear fruit and does not think control or alignment of a cutting-edge AI system is possible, likening it to mind-controlling a teenager.
    • On Penrose’s quantum consciousness argument: there is no clear mechanism and no evidence of quantum processes in the brain, and arguments that consciousness requires our specific substrate are uncompelling; machines may one day have consciousness, just not necessarily human consciousness, the same way computer memory is real memory without being human memory.

    Detailed Summary

    Betting on Sectors That Do Not Exist Yet

    Asked what he saw in SpaceX that other investors missed, Jurvetson flips the question: there were almost no investors even considering space, just as automotive and nuclear energy were not venture sectors. The bet was on Elon Musk, whom he has known for 29 years and backed across all his companies (“and his cousins, too”), and on a thesis that has since crystallized: a software-centric systems engineering approach applied to a sleepy industry that has not changed in decades unlocks extraordinary value. Aerospace and automotive proved it, and the same conversion of industrial low-margin businesses into information businesses is now playing out across the economy.

    The 130-Year Compute Curve and the Next 3 Years

    Jurvetson polls the room on Kurzweil’s famous graph, first published around 1999, and finds only a quarter have seen what he calls the most important thing ever graphed: five successive technology substrates delivering a 10,000 billion billion X improvement in the computation a dollar buys, sustained over 130 years. Moore’s Law is just the most recent refraction of a longer, almost cosmological trend that transcends the dramas of individual companies. His baseline prediction for the next three years is that the curve keeps going, carried by analog chips and custom AI silicon optimized for matrix math, and he notes that when a company like Intel declares the end of Moore’s Law, it usually means they are losing to someone new, as they did to Nvidia. The deeper point: exponential technological change is the precondition for startups existing at all, because predictable business favors incumbents. AI is the most intense crucible of compute-centric innovation yet, and over the next three years it flows into energy, agriculture, construction, and healthcare, the largest and least digitized sectors.

    Architecturally Variant: The Return of Reinforcement Learning

    Pressed on what technology drives the next wave (better LLMs, world models, robotics), Jurvetson shares a gut feeling he stresses he has not yet invested in: something architecturally variant that may subsume today’s models. He points to a new generation of neural labs returning to DeepMind’s founding premise, reinforcement learning, which was set aside when LLMs took off. The open design problem is the goal function: what is the multi-decade agentic drive, the selection pressure, the definition of success beyond reproductive fitness? He floats understanding the universe (the Grok and xAI framing) and novelty-seeking algorithms that treat new discoveries as progress. The question these labs chase is whether a single reinforcement learning algorithm with continuous learning, let loose on the internet’s data, could bootstrap intelligence. He adds a caution about today’s chatbots: we ascribe consciousness and meaning where there is none. “There’s no light on inside,” at least for now.

    Superintelligence Odds and the Missing Goal-Setting Layer

    On whether self-directed, goal-setting AI arrives within three years, Jurvetson cites Jack Clark of Anthropic giving 30 percent odds of superintelligence next year, which he finds fun mostly because at least someone put a stake in the ground. The recursive self-improvement debate is live, but he insists on a distinction: the huge improvements in the current self-improving loop (automated verification, hyperparameter tuning between runs, AI-mediated experimentation) are all still directed by humans. Goal setting remains human, and while that may be only a thin veneer of remaining activity, it is arguably the most important part, and nobody is sure how the transition happens. It may require recapitulating the brain’s functional specialization, the limbic-then-cortex layering that produced our bootstrapped consciousness. His honest answer: he does not know and does not even have odds, because three years out is genuinely hard to predict.

    Atoms Move Slowly, Bits Sweep Like Wildfire

    The gap between what the technology can do and how we use it is governed by physics and replacement cycles. Fully autonomous vehicles are, to him, obviously inevitable for everything that moves on Earth, yet cars stay on the road 11 to 12 years, so the switchover feels glacial; a billion robots likewise take time to manufacture. What flips fast is the world of bits, and strangely it started with what we considered most human: creative arts, movies, and images. White-collar work follows because there is no physical swap-out cycle: call centers, about 1 percent of US GDP, can convert almost overnight. And people will increasingly prefer the AI when it is better, showing more emotional understanding and better reading of the situation, something already visible in comparisons of physician bedside manner and customer service quality.

    Three Principles from Working with Elon Musk

    Jurvetson opens with humility (even Maye Musk cannot explain how Elon became Elon, and the books piling up on his bedside table may not have been written by humans), but offers three observations from close range. First, an insane ability to focus. Running multiple companies paradoxically helps: nobody questions Elon skipping a holiday party, and he says no to fascinating distractions, including Jurvetson’s attempt to connect him with Craig Venter to brainstorm terraforming Mars with gene sequencers. Musk’s answer: none of it matters until Starship flies. Second, and even more important, a maniacal focus on the cycle time of innovation: how fast the core learning loop runs, whether launch cadence or fleet learning. The Tesla data flywheel is the exemplar: every car collects training data whether or not the owner paid for FSD, so Tesla gathers more data every 4 days than Waymo has in its history. Third, a well-honed talent stack: pattern recognition that ignores credentials (often an albatross), drills candidates on the engineering crises they actually navigated to test for real mastery, and wraps the company in a mission grand enough (sustainable energy, multi-planetary life, understanding the universe) that the best people want in, which compounds because great people attract great people.

    The 50-Year Question and Expanding Option Value

    How do founders stay true to a mission when 99 percent of the world says it is too early? Jurvetson admits selection bias: for 30 years he has tried to back only people with a sincere, almost messianic mission rather than arbitrage-seeking opportunists. His filter is to ask what the business looks like in 50 years. Opportunists laugh (“I’ll be on my third startup by then”); the best founders are relieved to finally unload the dream they have been hiding because “colonizing Mars is an uninvestable proposition” as a day-one pitch. The best startups pair an audacious 50-to-500-year vision with a plausible path of customer iteration over the next three years, chaining backward from the future. What still surprises him is how the option value of frontier companies keeps expanding: autonomous driving was not in Tesla’s founding plan at all, and SpaceX kept unfolding from cheap launch to Starlink to direct-to-cell to orbital data centers, none of which was on the dance card five years ago. Exploring the light cone of possibilities beats designing a ten-year plan.

    Where Future Ventures Is Betting Now

    The firm looks for companies unlike anything it has seen before yet adjacent to familiar ground, targeting problems that will obviously be solved 500 years from now. In energy: multiple fusion investments plus subcritical fusion that sidesteps NRC regulation, because energy is the third bottleneck for AI after people and compute. In health: free diagnostic healthcare delivered by cell phone as a global free service, likely launched outside the US to bypass FDA and reimbursement. In food: slaughter-free meat via cellular agriculture and mycelium. In construction: still looking, after trying and failing a few times in an industry where labor productivity has been flat for 30 years. Recent themes include epigenetic editing (the software of biology rather than the firmware of the genome, spanning crop health, pesticides, herbicides, and human health), critical minerals and metals from deep sea mining to copper refining as part of reshoring, and three separate analog AI chip bets, including Mythic’s in-memory compute doing 8-bit multiplication in a single transistor, each chasing successive 100X reductions in power per calculation. The mix runs about 40 percent life sciences, 60 percent IT, with a taste for the weird edge: organs grown for transplant, a male birth control pill, radically improved IVF. His favorite hunting ground is old, crappy industries with no new entrants, like tunnel boring, where the Boring Company’s four largest competitors were founded in the 1800s.

    Advice for Founders: Find Your Batman and Robin

    His 30-day plan for a single person with an idea is not an MVP or a pitch deck: find a co-founder. Startups tend to be founded by dynamic duos (Jobs and Wozniak, Sergey Brin and Larry Page, Larry Ellison and the lesser-known Bob Miner), and a pair with diverse backgrounds and mutual respect creates a rapid iteration loop and sets the cultural template for every future hire. Persuading one person to quit their job for your crazy idea is the first proof the mission can recruit. On calibrating craziness: if literally everyone thinks the idea is crazy, take the feedback; nine out of ten is pretty good; only two out of ten means it is not bold enough, because obvious ideas get done by others. Ask whether the business could have been started three years ago; the right answer is no. Co-founders most often meet at universities, where students (unlike professors in their stovepipes) cross-pollinate between academic disciplines, and breakthrough innovation lives at those interstices. As an aside, he notes LLMs excel at exactly this translation between domains, opening a new fountainhead of idea discovery we are only beginning to tap.

    When Machines Do Everything: Meaning, Abundance, and Turbulence

    Asked the closing question (when machines do everything, what is the meaning of life?), Jurvetson starts with scale: roughly 19 percent of global employment is driving vehicles, and it is going away. But humans want meaningful work, driven by what he calls a fundamental desire for symbolic immortality: children, books, philanthropy, companies named after founders, all instantiations of the urge to contribute something that outlasts us. Translating the question into humanity’s mission statement, he lands where Yuri Milner and Musk do: to understand the universe and add to accumulated knowledge, because culture, not biology, is the primary vector of human evolutionary progress. If we could hyperspace-jump to Peter Diamandis-style abundance, where everything physical costs a dollar a pound and machines do all labor, we could all be philosopher kings and artists. But he refuses to end on false comfort: there is no visible peaceful path from full employment through 30, 40, 50 percent unemployment, that transition will be turbulent, and no politicians are taking a long-term view of it.

    Neuralink, Inscrutable Systems, and the Alignment Heresy

    In audience Q&A, Jurvetson confirms he invested in Neuralink (the idea traces to the neural lace of Iain M. Banks’ novel Surface Detail, which he recommends) but offers a contrarian view. Working from the periphery is very promising: restoring broken function, fixing spinal cords, expanding senses, higher-bandwidth communication. Upgrading core functionality, actually making someone smarter, is another matter. His reasoning comes from decades of watching complex systems: any artifact produced by an iterative algorithm run billions of times (evolution, neural networks, genetic programming, cellular automata) is inherently inscrutable. That is why he doubts mechanistic interpretability will bear fruit and flatly does not think control and alignment are possible for a cutting-edge AI system; he mentally swaps “teenager” for “AI” whenever the control question comes up. The same inscrutability applies to the brain: it will be easier to build a new intelligence than to reverse engineer one already made, and FDA cycles plus human biology cannot iterate at the speed of synthetic learning loops, so he lacks faith Neuralink keeps up with AI. Kurzweil’s uploading dream, he suggests, is a case of wanting something to be true within one’s lifetime.

    Penrose, Quantum Brains, and Machine Consciousness

    On Roger Penrose’s argument that consciousness depends on quantum processes and is therefore unreachable by AI, Jurvetson is respectful of the man and dismissive of the claim: there is no clear mechanism (a speculative lithium isotope coupling aside), and it amounts to wishful thinking. Generalizing, he finds all vitalist arguments that our substrate is uniquely necessary uncompelling; you could make a better case that carbon is special to life than that neurons are essential to consciousness. His favorite reframe swaps in the word memory: computers have memory that is nothing like holographic, gracefully degrading human memory, yet nobody debates whether computer memory is real. Machines may likewise develop a different kind of consciousness without human consciousness. Declaring something impossible is a much higher-order proposition than admitting ignorance, so his position is: he does not know whether the current AI path leads to consciousness, but his gut says machines will get there one day, perhaps via evolution-like reinforcement learning approaches that recapitulate what biology already proved possible.

    Notable Quotes

    “I have this gut feeling that it’ll be something architecturally variant. It might subsume the models that we know now.”

    Steve Jurvetson, on what drives the next three years of AI

    “It’s almost cosmological. Like, why has humanity’s capacity to compute compounded for 130 years?”

    Steve Jurvetson, on the Kurzweil abstraction of Moore’s Law

    “If business is predictable, if there isn’t disruptive technological change, the big get bigger.”

    Steve Jurvetson, on why exponential compute is the precondition for startups

    “The Tesla cars today in their cameras gather for their AI training set more data every 4 days than Waymo has in its entire history.”

    Steve Jurvetson, on the data flywheel behind Musk’s learning-loop obsession

    “If it’s like only two people think it’s crazy, that’s bad because it’s clearly not bold enough. If it’s an obvious idea, other people will do it.”

    Steve Jurvetson, on calibrating how crazy a startup idea should be

    “Despite attempts at mechanistic interpretability in AI, I don’t think that’s going to bear fruit.”

    Steve Jurvetson, on why iterated systems are inherently inscrutable

    “It’d be easier to build a new intelligence than it is to reverse engineer one you’ve made.”

    Steve Jurvetson, on why he doubts Neuralink can keep pace with AI

    “I think all humans have a fundamental desire for symbolic immortality, this belief that we’ve contributed something to the world that transcends our brief time on this world.”

    Steve Jurvetson, on the meaning of life when machines do everything

    “It’s much higher order proposition to say something is impossible than to say I don’t know.”

    Steve Jurvetson, on whether AI can ever be conscious

    Watch the full conversation here: The Next 3 Years of AI: Lessons from Elon Musk’s First Investor.

    Related Reading

  • Jonathan Ross on Groq’s $20 Billion NVIDIA Deal, Faster Inference, and Why Asking the Right Questions Wins the AI Age

    Jonathan Ross, the founder of Groq and the inventor of Google’s Tensor Processing Unit (TPU), sits down with David Senra (host of the Founders podcast) to walk through Groq’s roughly $20 billion partnership with NVIDIA and the decade of near-death struggle that preceded it. You can watch the full conversation here. Ross, now a senior executive at NVIDIA following the deal, is unusually candid about being one of the world’s worst leaders when he started, about coming three weeks from running out of money, and about the single contrarian bet (that faster inference would make AI both faster and smarter) that almost everyone, including his own engineers, told him was pointless.

    TLDW

    Ross explains the structure of the NVIDIA deal (a call to Jensen Huang about buying 100,000 GPUs turned, in three weeks, into NVIDIA’s largest deal by nearly 3x) and why pairing Groq’s LPU with the GPU defeats the many different bottlenecks inside an LLM the way you would use both 18-wheelers and delivery vans in a logistics network. He unpacks the AlphaGo moment that revealed faster inference makes models smarter, the shift from the information age (answering questions) to the AI age (asking the right questions), and a leadership philosophy built on autonomy, one brutally clear priority (25 million tokens per second on a challenge coin), and giving people the fewest constraints so they can surprise you. He shares hard-won lessons from Jensen and NVIDIA (the least political large org he has seen, no secret one-on-ones), his concepts of reality quotient and the dominant game, return on luck and the GitHub opportunity he let his team talk him out of, intentional leadership (“I intend to do this”), the Grok bonds that traded salary for equity and saved the company, hiring for negatives instead of positives, loss bias and manufactured discontent, and a closing case for radical optimism: code is becoming free, software creation is being democratized like literacy, and education should stop teaching kids to answer questions and start teaching them to ask.

    Thoughts

    The technical spine of this interview is a genuinely counterintuitive claim: you can make a model smarter by making it faster. Ross’s proof is the AlphaGo anecdote, where the exact same model, ported from GPUs to his TPU, saw its ELO jump by hundreds of points and beat the world champion, because more compute per unit of time let it search deeper and surface moves like the famous Move 37 that were too far down the tree to find otherwise. Once you internalize that inference speed is not a convenience but a capability multiplier, the entire Groq thesis, and the logic of the NVIDIA deal, snaps into focus. The industry spent years treating fast inference as a nice-to-have. Ross treated it as the whole game, and was nearly alone in doing so for a very long time.

    The most transferable material is the leadership arc, precisely because Ross is willing to say he was bad at it. His core insight is that there is no single correct way to lead, any more than there is one way to invest, and the founder’s first job is to know which way is true to them. Ross is a delegator who hires autonomous people and gives them a single, poetically compressed objective, then gets out of the way. The reason that matters is subtle: if you over-constrain the goal, your team can never surprise you with a better answer than the one you already had, which means they can never actually innovate. The Kelly Johnson line Senra offers (“extreme performance often comes from one brutally clear priority”) is the same idea from the Skunk Works side. A challenge coin that reads “25 million tokens per second” is not a slogan, it is a mechanism that lets every engineer connect their work to one dominant game.

    Two ideas deserve to be lifted out and used directly. The first is intentional leadership, borrowed from David Marquet’s submarine turnaround: replace “should I do this?” with “I intend to do this.” Asking for opinions invites pessimism and hands your most timid people a veto. Declaring intent still lets someone shout “the hatch is open” when it truly matters, but it stops the reflexive no. Ross traces years of stalled progress to the simple error of asking instead of declaring. The second is his inversion of hiring: hire for negatives, not positives. Growing talent means showing people the path, so you emphasize positives. Selecting talent means screening people out, so you hunt for the disqualifying negatives, because one person’s negative trait infects the whole team. Most founders, Ross included for years, are clever enough to talk themselves into any candidate. A versioned “people spec” and a deliberate loss-averse posture are the antidote.

    The Grok bonds story is the emotional center and a small masterpiece of change management. Facing a layoff list that would have killed the company (because the people slated to be cut were exactly the ones needed to make the product work at all), Ross instead asked the team to trade salary for equity, framed with World War II war-bond imagery. Eighty percent participated, half went to statutory minimum wage, and attrition actually fell. His phrase for why is “put everyone’s hands on the steering wheel.” Passengers fear a windy road, drivers feel in control. It is a reminder that morale under existential stress is often a function of agency, not comfort, and that the Phil Knight move of converting employee sacrifice into ownership is a recurring pattern in company survival stories for a reason.

    Where the conversation turns almost spiritual is manufactured discontent. Ross observes that the entrepreneurs in a room of successful people were the least happy with their wealth, and that this very dissatisfaction was the fuel that kept them building. His own current discontent is stark and worth sitting with: the world does not have enough compute, and if it takes an extra year to cure cancer or slow aging because of that shortage, he considers it his fault. Whether or not you accept the moral weight he assigns himself, the mechanism is instructive. Edwin Land wrote “300 people died today” on the whiteboard while inventing anti-glare technology. A concrete, human cost attached to delay is a far more durable motivator than a revenue target. Paired with his closing optimism about code becoming free and software creation democratizing like literacy, it makes for one of the more clear-eyed and yet hopeful founder conversations in recent memory.

    Key Takeaways

    • The NVIDIA deal began as a request to buy about 100,000 GPUs; Jensen saw what Groq had built pairing GPUs and LPUs and decided to make it available to all NVIDIA customers, closing what Ross calls the firm’s biggest deal by nearly 3x in roughly three weeks from first call to wired money.
    • GPUs and LPUs are complementary: inside an LLM’s decoder layer, the GPU is better at the compute-bound attention portion and the LPU is better at the memory-throughput-bound weights, so combining them defeats bottlenecks across the whole performance curve, like using both 18-wheelers and last-mile vans.
    • As AI increasingly talks to AI, speed dominates, because agents kick off other agents and compound; a human tolerates a one-second wait, but AI is just sitting there idle.
    • Agentic micro payments will make the number of payments skyrocket, but payments infrastructure is not yet built for AI operating inside an allocated budget.
    • Ross prototypes cutting-edge ideas as personal hobby projects first, then brings them to work; his personalized “daily brief” evolved from long text into headlines he can interrogate with follow-up questions, like the game of 20 questions.
    • The information age rewarded answering questions; the AI age rewards asking the right ones, as everyone shifts from individual contributor to leader of AI, and good leaders ask the question no one else did.
    • There is no single right way to lead, just as there are many ways to invest; the founder’s job is to know themselves and pick the leadership form that is true to them (inspiration versus fear, control versus delegation).
    • Ross was, by his own account, one of the world’s worst leaders at the start, which cost Groq three to four years; his fix was to define one goal simple enough to fit on a challenge coin: 25 million tokens per second.
    • The fewer constraints you give a person (or an AI agent), the more freedom they have to surprise you with a better solution; over-constraining the goal makes real innovation impossible.
    • Lessons from Jensen and NVIDIA: it is the least political large organization Ross has seen, Jensen never runs secret one-on-ones (tell everyone at once, copy everyone on email), and the whole strategy reduces to “what does the customer actually need?”
    • Jensen manages around 60 direct reports, each smarter than him in their own domain, which he offers as the model for orchestrating AI agents that may be smarter than you.
    • Asking a sharp question that makes an expert say “I didn’t think of that” is a universal founder skill (it appears in every Bezos book) and can be honed.
    • Confidence, not competence, was Ross’s early bottleneck: shadowing a leader of 2,000 people, he realized he would have made the same decisions, and acting with confidence made people follow his direction without changing the decisions themselves.
    • The better and more creative your people, the harder they are to manage; running 450 highly creative scientists felt more like managing 5,000.
    • Reality quotient (RQ), distinct from IQ, is the ability to recognize reality and, in its extreme form, to choose the dominant game; MySpace optimized accounts signed up while Facebook optimized monthly active users and won.
    • The first principle of change management is to make it feel like it is not a change; people who seem fine with change are usually anchored to something that did not change.
    • Return on luck (from Jim Collins): the most successful companies do not get more lucky breaks, they seize the ones they get; Ross let his team talk him out of powering GitHub’s LLMs on Groq chips, then vowed never again.
    • People adopt fast inference only when they experience it personally; an Anthropic demo three months before ChatGPT drew no reaction because the answers were not the audience’s own, and Groq later went viral off a fast-LLM video posted on X.
    • Great innovators often experience a problem before others do; the future is already here, just not evenly distributed, and Ross saw fast inference’s value first because of AlphaGo.
    • Intentional leadership (from David Marquet’s USS Santa Fe turnaround): say “I intend to do this” instead of asking for an opinion, which stops reflexive pessimism while still letting people flag a real problem.
    • Grok bonds: three weeks from running out of money, Ross swapped a layoff for a war-bond-style salary-for-equity exchange; 80% participated, about half took statutory minimum wage, and it bought roughly two months of runway.
    • “Put everyone’s hands on the steering wheel”: participation in saving the company cut attrition to under 10% during the crisis, echoing Phil Knight converting employee loans into Nike equity.
    • West Coast VCs behave like lemmings (one pass triggers all passes), while East Coast VCs run independent analysis; the herd missed what became NVIDIA’s biggest deal ever, a live example of the Keynesian beauty contest.
    • For the first time, top startups are not starved for cash, so putting in more money is no longer an advantage even though investors still behave as if it is.
    • Hiring flip: move from hiring for positives (how you grow talent) to hiring for negatives (how you select talent), because one negative trait poisons the team; write a versioned “people spec” like a product spec.
    • Loss bias (a loss feels roughly six times more painful than an equal gain) can be a hiring signal: Ross looks for people who “book the win early,” treating any missed improvement as a loss.
    • Poetic design (maximum meaning in minimal expression, “every word matters”) was a positive on the people spec; its negative is maximalist, cluttered design.
    • Michael Jordan manufactured pressure by taunting opponents so a loss would be humiliating, forcing superhuman performance (per his trainer Tim Grover), a deliberate version of throwing your keys over the fence.
    • Manufactured discontent (David Ogilvy’s “divine discontent”): the best entrepreneurs never rest on wins; the least happy people with their wealth were the ones who kept building.
    • Ross’s discontent today is the world’s lack of compute; he treats every delayed medical breakthrough as partly his responsibility, the way Edwin Land wrote a daily death count on the whiteboard while fighting headlight glare.
    • Software has run on “code rationing” because code was expensive to write, enforced by “no engineers”; as the marginal cost of code approaches zero, you just implement, experience, and re-implement.
    • AI democratizes software creation like the alphabet democratized literacy: Ross’s executive assistant now builds working apps, and individual founders with taste but no coding background will create valuable companies.
    • Education should be revamped around asking questions and solving real community problems; if a kid can look up or prompt the answer, the assignment taught nothing, but making them ask the right questions to get AI to solve a real problem does.

    Detailed Summary

    The $20 Billion NVIDIA Deal and Why LPUs and GPUs Belong Together

    The deal’s most striking feature is speed: the idea was first floated on a call roughly three weeks before the money was in the bank. Groq had been integrating GPUs and LPUs and went to Jensen Huang wanting to buy about 100,000 GPUs to deploy themselves. Jensen saw the combined system and decided it should be offered to all of NVIDIA’s customers. The technical logic is that processing an LLM token involves many matrix multiplies with different bottlenecks, some compute-constrained (better on the GPU, especially the attention portion) and some memory-throughput-constrained (better on the LPU, applying the trained weights). There is no single perfect architecture, so putting the two together defeats bottlenecks across the whole curve. Ross adds that as AI talks to AI, speed becomes everything, because agents spawn agents and compound exponentially.

    Asking Questions, Daily Briefs, and the Shift to Leading AI

    Ross builds cutting-edge tools as personal hobby projects before bringing them to work, including a personalized “daily brief” that functions like a presidential daily brief. He redesigned it from long text into headlines he can interrogate, because interactivity, like 20 questions, distills straight to what you actually care about. This grounds one of his signature ideas: success in the information age meant answering questions, but success in the AI age means asking the right questions. As people move from individual contributors to leaders of AI, the skill that matters is the leader’s skill of asking the question everyone else missed or was afraid to raise, since the question you ask determines the output you get.

    Knowing Your Leadership Style and the Challenge Coin

    Ross frames leadership like investing: the first principle is simply having followers, but there are infinite valid styles. New founders fail by copying advice that is not true to them. Ross is a natural delegator (he has not held a driver’s license since his teens because he would rather think than control the car) who hires unusually autonomous people. Early on this backfired badly, because he entrusted people who needed direction, and he calls himself one of the world’s worst early leaders, a gap that cost Groq years. His breakthrough was distilling the mission onto a challenge coin reading “25 million tokens per second,” which let everyone connect their work to one dominant game. He references David Marquet’s Turn the Ship Around later, but the coin embodies Kelly Johnson’s Skunk Works principle that extreme performance comes from one brutally clear priority, plus the rule that fewer constraints give people more room to surprise you, turning a team from Superman into the Avengers.

    Lessons from Jensen: Killing Politics and Serving the Customer

    Working at NVIDIA taught Ross how much further he could have pushed lessons he half-learned at Groq. NVIDIA is, in his experience, the least political large organization anywhere, and a big reason is that Jensen never tells different people different things in private one-on-ones. When you address a room, everyone hears the same message; separate conversations breed side cliques. Ross’s practical rules: hold big meetings for anything you want a group to know, and copy everyone on email so no one can route politics through you. The other Jensen lesson is to stop playing 3D chess and just ask what the customer needs, tell them only what you believe and can support, and refuse to sell them something they do not need. Senra notes he has covered roughly 19 ideas from The Nvidia Way on his Founders podcast, and Jensen’s line that he already manages 60 reports smarter than him is the template for managing AI agents.

    Reality Quotient, the Dominant Game, and Change Management

    Groq hired for reality quotient, not just IQ, because plenty of very smart people construct elaborate stories disconnected from reality. In its extreme form, RQ is the ability to choose the dominant game, the way Facebook’s focus on monthly active users beat MySpace’s focus on accounts signed up. The founder’s job is to help everyone connect their activity to that dominant game (for Groq, tokens per second), then manage the change. Ross’s first principle of change management is to make it feel like it is not a change: nobody likes change, and people who tolerate it well are usually focused on something that stayed constant. If your team is anchored to the dominant goal, a new tactic does not feel like change; if they are anchored to a narrow task, it does.

    Return on Luck, the AlphaGo Insight, and the GitHub Miss

    From Jim Collins’s Great by Choice, Ross took the idea that winners seize luck better, not that they get more of it. He experienced it first-hand with AlphaGo: after a DeepMind team asked whether his TPU was as fast as rumored (he said yes, Ghostbusters-style), porting the identical model from GPUs to TPUs pushed its ELO from around 3,200 to roughly 3,900 and it crushed the world champion. As Thinking Fast and Slow by Daniel Kahneman frames it, more compute lets the model virtually play out more moves and occasionally find a better second-best line, which is how the famous Move 37 surfaced. Faster thinking is smarter thinking. Yet Ross also let his own engineers talk him out of powering GitHub’s LLMs on Groq chips, twice, because they focused on why it could not be done rather than why it could. He eventually did the math himself, hit the numbers, and learned to stop inviting that pessimism.

    Selling Speed and Intentional Leadership

    Customers could not grasp fast inference until they felt it. Ross recalls an Anthropic demo three months before ChatGPT that drew no reaction, because seeing someone else’s answer appear is not magical, but getting your own question answered instantly is. So Groq simply put fast inference online, and it went viral after someone posted a video of a blazing-fast LLM on X (Ross noticed his own demo slowing in Norway because usage had skyrocketed). The deeper fix for internal resistance came from Turn the Ship Around, David Marquet’s account of turning the USS Santa Fe from worst to best in nuclear readiness by replacing command-and-control with intentional leadership. Saying “I intend to do this” rather than “should I?” stops people from reflexively supplying negative opinions, while still letting someone shout “the hatch is open” when there is a genuine problem.

    Grok Bonds: Three Weeks From Zero

    With three weeks of cash left and a layoff list on the table, Ross realized the cuts targeted exactly the people needed to finish an unprecedented compiler and reach the critical mass where the product would even work. Layoffs would not save the company; only reducing burn without losing people could. So Groq held an all-hands, put up World War II war-bond imagery, and launched “Grok bonds,” an exchange of salary for equity. Ross expected heavy attrition; instead 80% participated and about half dropped to statutory minimum wage, real pain for engineers used to six-figure salaries. It bought closer to two months of runway. His framing, “put everyone’s hands on the steering wheel,” explains why attrition actually fell below 10%: drivers feel more in control than passengers, and it echoes Phil Knight in Shoe Dog converting employee loans into Nike equity on the edge of collapse.

    Hiring for Negatives, Loss Bias, and Manufactured Discontent

    Ross was good at spotting smart, talented people but kept hiring ones who caused organizational problems, because he could always talk himself into a candidate. Watching a sharp head of HR screen people out, he realized he had been hiring wrong: growing talent means showing positives, but selecting talent means hunting for disqualifying negatives, since one bad trait spreads to the whole team. He formalized a versioned “people spec” with positives like return on luck and poetic design, each paired with a negative. He also hired for loss bias, the fact that a loss feels roughly six times more painful than an equal gain, seeking people who “book the win early.” That competitive, pressure-seeking wiring links to Michael Jordan manufacturing humiliation stakes (per Tim Grover in Relentless) and to David Ogilvy’s divine discontent. Ross’s own manufactured discontent today is the world’s shortage of compute, which he frames in life-and-death terms.

    The Optimistic Close: Free Code and Universal Software Literacy

    Ross ends on aggressive optimism. Software has long run on “code rationing” because code was expensive to write, policed by “no engineers” whose job is to say no. As the marginal cost of code approaches zero, the workflow flips to implement, experience, then re-implement. More important is accessibility: just as alphabets and universal education turned reading and writing from a scribe’s monopoly into a question of quality, AI is making software creation universal. His executive assistant now builds working apps, and a wave of individual founders with taste but no coding background will create valuable companies. The corollary for education is to stop teaching kids to answer questions and start teaching them to ask, revamping curricula around real community problems where the point is asking the right questions to get AI to solve something that matters.

    Notable Quotes

    “Success in the information age was about being able to answer questions. Success in the AI age will be about being able to ask the right questions.”

    Jonathan Ross, on the fundamental shift AI creates

    “The fewer constraints that you give someone, the more freedom they have to solve the problem, and the more freedom they have to surprise you with the solution.”

    Jonathan Ross, on leading creative teams

    “Being able to think faster makes you think smarter.”

    Jonathan Ross, on why faster inference produces more capable models

    “There are plenty of really smart people who wouldn’t recognize reality if it tapped them on the shoulder.”

    Jonathan Ross, defining reality quotient versus IQ

    “If you express intentional leadership, you say, ‘I intend to do this.’ People don’t tend to offer their opinion, but if it’s very wrong and there’s a reason, they will push back.”

    Jonathan Ross, on the lesson from Turn the Ship Around

    “When people are passengers in a car, they’re more nervous about a windy road or a scary road. But when they’re the driver, they feel more in control.”

    Jonathan Ross, on why Grok bonds kept the team together

    “The biggest flip in my hiring was when I went from looking for positives, which is what you do when you’re trying to grow talent, to looking for negatives, which is what you do when you’re trying to select talent.”

    Jonathan Ross, on inverting his approach to hiring

    “If it takes us an extra year to cure cancer because we don’t have enough compute, that’s my fault.”

    Jonathan Ross, on the discontent that drives him today

    Watch the full conversation between Jonathan Ross and David Senra here on YouTube.

    Related Reading

    • Groq the company Ross founded and the LPU behind the fast-inference story and the NVIDIA partnership.
    • AlphaGo versus Lee Sedol (Wikipedia) the match, including Move 37, that showed Ross how much faster hardware raises a model’s capability.
    • The Keynesian Beauty Contest (Wikipedia) the dynamic Ross uses to explain why West Coast VCs herded past what became NVIDIA’s biggest deal.
    • Zero to One by Peter Thiel, the source of the first-principles thinking Ross applied to the contrarian bet on fast inference.
    • Founders podcast by David Senra the host’s biography-driven show, source of the Jensen, Michael Jordan, and Edwin Land ideas referenced throughout.
  • Jeremy Giffon on the Billion Dollar PDF, Peak Guy, and How Attention Became the New Capital

    In his second appearance on Invest Like the Best, investor Jeremy Giffon sits down with Patrick O’Shaughnessy for a wide-ranging conversation about how power, status, capital, and attention are being redrawn in real time. The organizing idea is the “billion dollar PDF,” the notion that a single well-timed document or post can crystallize a narrative and pull billions of dollars of capital toward it. From there the two range across the mechanics of the X timeline as market infrastructure, the decline of the billionaire class, the rise of the “poaster,” the economics of software in the age of compute, and what the next era of finance looks like when its founding act is seed investing rather than the leveraged buyout.

    TLDW

    Giffon argues that in private markets the real great filter for funds is storytelling, because the actual product (realized cash returns) takes a decade, so narrative is what you sell in the meantime. He and O’Shaughnessy unpack the “billion dollar PDF,” the way X functions as a single global newspaper (the uni-feed) that prices securities, dictates policy, and builds businesses, and how power laws now mean breaking containment on the timeline is worth more than steady performance. They discuss “peak guy” and the exhaustion of billionaire worship, the idea that the poaster has become the new priestly class, net worth as a surprisingly modern invention, and attention as the genuinely scarce asset. The back half turns practical: why AI job fears meet Giffon’s view that most white collar work is invented, why software is shifting from selling zero-marginal-cost strings to selling compute with thin margins and huge scale, why beating the market is easier for amateurs than professionals, how to underwrite emerging managers by studying the person, the feudal economics of SPVs and allocations, simplicity over complexity in investing, hiring through divisive job descriptions, and the hidden philosophers (from effective altruism to Curtis Yarvin and Nick Land) shaping Silicon Valley. Topics span venture capital, private equity, cap tables, SaaS, the Mag 7, Buffett and Bogle, East Coast versus West Coast finance, and the search for vocation.

    Thoughts

    The strongest thread in this conversation is that scarcity has moved. For most of the modern era, money was the scarce thing and attention was the byproduct of having it. Giffon flips that. Capital is now abundant, inflationary, and desperate for somewhere to go, which is why he can describe businesses and asset categories as “sponges” that get created downstream of capital rather than the other way around. What is actually scarce is a fixed slice of human attention, and whoever can command it (the “billion dollar PDF,” the breakout post, the person every billionaire wants to sit next to at dinner) captures the resource that money is now chasing. That reframing explains a lot of otherwise strange behavior, including why founders who already have wealth turn to posting, podcasting, and fame. They are not being vain. They are hedging out of a depreciating asset into the one that still appreciates.

    The most uncomfortable and clarifying claim is that narrative is not a distortion of markets, it is the market. Giffon walks through how the algorithm, driven by AI, selects which stories get shown, those stories set the consensus among the small group of posters who move capital, and securities get priced off that consensus. If you take that seriously, the efficient market hypothesis looks quaint. The marginal price of a security is being set, in part, by what an entertainment-optimizing model decided to surface to a few hundred thousand influential readers that morning. His line that “every other day someone writes some pornographic fanfic about AI and it moves the public markets” is a joke that is also a fairly precise description of 2026 price discovery.

    His software thesis deserves more attention than the culture commentary that will get clipped. The old SaaS miracle was selling copies of a string at near-zero marginal cost, which mechanically produced high gross margins. Giffon’s point is that the AI era sells compute, and you cannot write the prompt once and resell the output, so the marginal cost is no longer zero. The consequence is a structural regime change: lower gross margins, thinner net margins, and returns that accrue overwhelmingly to scale. He calls it a Walmart effect in software, and if he is right, a lot of the current sell-off in SaaS names is punishing the business model rather than the businesses, which is exactly the kind of nuance-free repricing he says markets specialize in.

    The optimistic surprise is his stance on AI and jobs, which cuts against the doom consensus without being naive about the short term. He concedes the near and medium term could be genuinely bad, but he refuses the “we will run out of jobs” framing because he thinks most white collar work is already invented to absorb our attention and capital, not to meet basic needs. Work-from-home Fridays, in his telling, are a quiet admission that many people have two or three hours of real work a day. If that is true, then automating the invented work is liberation rather than catastrophe, provided the transition does not crush people in the process. It is a bracing counterweight to the standard displacement panic, and it pairs well with his more personal note that the antidote to a priestly-class culture of looking outward for permission is the duty to steward your own gifts.

    The one place to push back is the tidiness of the “poaster as new priest” story. Giffon is careful to say he is describing, not endorsing, but the argument that status simply passes from scientists to billionaires to posters is cleaner than reality usually allows. Attention is scarce, yes, but it is also fickle and lotteryified in his own telling, which makes it a shaky foundation for a durable priestly class. Still, the underlying observation is sharp: when money becomes a “state of mind” label rather than a hard number, and when net worth itself is revealed as a recent invention (his Pride and Prejudice aside about Mr. Darcy’s income being cash flow, not a valuation, is the best illustration in the episode), the leaderboard everyone is actually competing on is real estate in other people’s minds.

    Key Takeaways

    • The great filter for private-market funds is storytelling ability, because the real product (realized cash returns) takes a decade, so narrative is what a fund actually sells in the interim through updates, events, and LP conversations.
    • The same business can be “cold” at seven years and $8 million in revenue but “hot” if you reset the clock and retell the story, so being flexible on narrative is itself a fix for a funding problem.
    • Insider bridge rounds are often surprisingly hostile (3x liquidation preferences, warrants, ratchets), and being extractive to the downside gets you booed while being extractive to the upside (pro rata rights) gets celebrated, even though both are similarly extractive.
    • In highly volatile times, optionality beats commitment: raise less, raise from investors with a wide mandate, and keep the ability to pivot the business model, run profitably, acquire, or even fire customers.
    • The “billion dollar PDF” is the idea that someone crystallizes a notion at the right time and it becomes the foundational viewpoint of an era, and capital follows it around like ten-year-olds chasing a soccer ball.
    • X is the “uni-feed”: everyone is served the same roughly 500 tweets a day across hundreds of millions of users, making it the global newspaper and a source of truth for capital markets, politics, and technology.
    • Institutions now survive only if they are “timeline native,” meaning reactive to and reflexive with the timeline, which describes the White House, venture capital, and public equities alike.
    • Posting has been lotteryified: a brand-new account can write one good post and get shown to hundreds of millions, so posting is described as the last great meritocracy.
    • Power laws have sharpened. Variance used to be low, but now breaking “containment” on the timeline means briefly taking over the world’s brain, and those few breakout events dwarf everything else combined.
    • Podcasts still underrate serving the algorithm; the video is recorded first for an LLM to review and decide whether to show, and only then do humans judge it.
    • A great post blends comedy, poetry, and writing, and great posters tend to be a bit tortured, closer to writers mixed with comedians.
    • “Peak guy”: society keeps searching for a priestly class, moved from scientists to the billionaire class, and Giffon thinks it has now moved to the poaster class, with billionaires increasingly deferential to posters.
    • Billionaire worship is exhausted partly because billionaires are far less scarce (state-of-mind billionaires have grown maybe 100x in 20 years) and money is less powerful than assumed, as the donor class has underperformed politically.
    • Net worth is a very new idea. In Pride and Prejudice, Mr. Darcy’s wealth is his estate’s annual cash flow, not a valuation, because no one would DCF or margin-loan an estate they would never sell.
    • “Billionaire,” like “millionaire” before it, is becoming a loose political and class label only tangentially related to actual liquid, inflation-adjusted wealth.
    • The most honest way to consume media is to admit it is entertainment, produced, selected, and edited to entertain, not to learn, no matter how productive it feels.
    • Going months off the timeline taught Giffon that you do not really miss anything; the filtered, secondhand version from smart people at dinner may be the most enlightened way to consume it.
    • On AI and jobs, the short to medium term could be bad, but the long-run worry is overblown because most white collar jobs are “made up” and not contingent on shelter, food, or medicine.
    • Work-from-home enthusiasm is evidence that many people have only two or three hours of real work a day, so work-from-home Fridays are a soft launch of the four day work week.
    • We have a moral duty to steward our gifts; the thing you spend most of your time on should spark and utilize your genius, and having fun at your job is a strong signal you have combined the two.
    • The largest finance firms (KKR, Blackstone, Apollo) were founded in a leveraged-buyout culture that is debt-driven and extractive; the next era’s giants may be founded on seed investing, which is equity-driven, optimistic, and qualitative.
    • West Coast venture is “eating” the East Coast: it created the biggest businesses in the world and functions as a civilizational technology, giving young people speculative capital with little downside.
    • Compensation has flipped: Silicon Valley now pays large liquid cash via mature secondary markets and yearly tenders, while Wall Street increasingly pays in RSUs tied to long-term firm value.
    • SaaS is just a business model, and while it is in trouble, that is often not what actually matters to a business being sold off out of fear.
    • Software is moving from selling near-zero-marginal-cost strings to selling compute, which means lower gross margins, razor-thin net margins, and returns accruing to scale, a Walmart effect in software.
    • Capital gets “blocked” when there are not enough great companies to absorb it, so high-capex AI and hardware categories arose in part as sponges for capital with nowhere else to go.
    • Markets lack nuance: the 52-week variance on the biggest companies is nearly 100%, so they are not priced well, and much private-market pricing reflects fund incentive structures rather than business quality.
    • Beating the market is easier for amateurs than professionals. Buffett’s S&P advice is for the average person, while pros are constrained by mandates, customers, and career risk (the Peter Lynch point).
    • A small principal writing a 500k check is the wrong customer for a large growth fund built to serve sovereigns and endowments; emerging managers, tightly aligned to returns, are underrated for that check.
    • Underwrite the person, not just the thesis. A manager’s personal financial situation matters enormously, and whether they are “looking up” or “looking down” at the fund size changes how they behave.
    • Modern finance is recreating a feudal system where lab founders (Elon, Zuckerberg, Dario, Sam) grant allocations like landed estates, and holders charge fees on this synthetic, purely relational, sometimes perpetual product.
    • The most generative activity is conversation, downstream of relationships, and being tolerant of weird, unpredictable people is a media diet advantage; chatbots can feel generative without actually being so.
    • Investors overvalue complexity to look clever; you should either do something so complex no one else will, or keep it simple (be long Elon, buy big companies at their 200-week moving average), and the real gift is selling the simple idea.
    • Richard Rainwater’s test: pitch your thesis on one page and state what percentage of your net worth you will put in, then yes or no. It is hard precisely because it forces clarity and conviction.
    • A job description is a sales pitch and an interview baked into a post; divisive, ambiguous statements (like “an ideological minority at a top 10 school”) self-select the right people and disqualify the wrong ones.
    • Silicon Valley’s hidden philosophy is underrated: a neo-Buddhist utilitarianism feeds effective altruism, and thinkers like Nick Land, Curtis Yarvin, and William MacAskill shape the culture without being named.
    • Where 1980s Wall Street was pagan, hedonistic, and nakedly about money, today’s tech views itself as self-righteous and positive-sum, treating the business itself as the ultimate philanthropy, with no felt need to launder gains through art or culture.

    Detailed Summary

    The Billion Dollar PDF and Narrative-Driven Capital

    Giffon opens with what he has learned in his first 18 months running his own fund: in long-term private markets, the great filter is storytelling. Because a fund’s real product is realized cash returns that take a decade to arrive, what a manager sells in the meantime, through quarterly updates, events, and one-on-one LP conversations, is narrative. He describes situations where an older company that has recently inflected struggles to raise simply because its story (seven years old, $8 million in revenue) reads worse than the same numbers reframed as a two-year-old rocketship. The billion dollar PDF is the escalation of this: a single document or post that crystallizes the notion of an era, does not even have to be right, and pulls billions in capital toward it. Capital, he says, behaves like ten-year-olds playing soccer, all chasing the same ball.

    The Uni-Feed: X as Global Newspaper and Market Infrastructure

    The technological catalyst, in Giffon’s view, is the uni-feed. Everyone on X is served the same roughly 500 tweets a day, and the poster-to-lurker ratio is enormous, so people who do not post cannot feel the impact. X is the Lindy social network, unlikely to reach the scale of the others but filling a vital role as a global newspaper and near-source of truth. The most important people in capital markets, politics, entrepreneurship, and technology read it every morning, and it forms opinion, prices securities, and writes policy. Institutions survive only if they are timeline native, both reactive to the timeline and reflexive with it. Crucially, this is also where narratives get set, and the winning story is not a well-considered book but the most entertaining, novel, somewhat-correct thing, because people are on the timeline to be entertained and the algorithm selects for exactly that.

    Power Laws, Breaking Containment, and the LLM as First Filter

    O’Shaughnessy observes that variance used to be low, with the best performers only modestly ahead of the worst, and that this has changed completely. Now there is a threshold where breaching containment feels like taking over the world’s brain for a short window, and those handful of breakout events matter more than all the rest combined. Giffon attributes this to technology rather than any change in content or audience: RSS gave you a normal distribution, algorithms give you a power law. He notes that podcasts remain naive about serving the algorithm, unlike streamers and YouTubers, and delivers one of the episode’s sharpest structural points: the video is recorded first for an LLM to review and decide whether to show it, and only after that first, largely invisible filter do humans get to judge.

    Peak Guy: Billionaires, Priests, and the Poaster Class

    The “peak guy” segment is the episode’s philosophical core. Giffon traces how God moved from being in and around everything, to a guy above the clouds, to something conceptual and distant, leaving an ongoing search for priests. Society tried scientists, but the scientific project stalled and physics has not delivered meaning since the war, so status passed to a billionaire class treated as the new priesthood: successful at business, therefore smart and hardworking, therefore worth listening to on physics, theology, or health. That worship has now saturated. Billionaires are far less scarce, money looks less powerful (the donor class has underperformed politically), and a billionaire who posts the wrong thing has to resign where Andrew Carnegie could once take up arms. Giffon’s claim is that the priesthood has passed again, this time to the poaster, and you can see it in how the billionaire class defers to posters (his anecdote: billionaire investors fighting to sit next to Tyler Cowen because he was the most interesting person in the room).

    Net Worth as a Modern Invention and Attention as the New Scarcity

    Giffon frames net worth itself as a strikingly recent concept. In Pride and Prejudice, Mr. Darcy’s wealth is discussed as roughly 10,000 a year in cash flow from his estate, not as a valuation, because no one would sell the estate or borrow against it. Wealth as a mark-to-market number is new, and between illiquid private markets, net worth as a concept, and inflation, “billionaire” is becoming a loose label, much like “millionaire” already did. Since time is fixed, the new scarcity is attention you can draw on the screen, which is why founders who accrue wealth so predictably turn to posting, podcasts, and channels: partly to convert wealth into fame, partly because they sense money is depreciating and attention is what is actually scarce.

    Opting Out and Media as Entertainment

    Asked about going months off the timeline, Giffon’s takeaway is that you should not fool yourself that you are seeking anything other than entertainment. All of it is produced, selected, and edited to entertain, and just as Rolex or Nike can convince you a liability is an asset, posts and essays can convince you that consumption is productive. The question is simply how much you want to be entertained. He does not see the death of books as a crisis so much as a swan song for a technology that was the best way to deliver information until better, more compelling ways arrived, though he is careful to note the negative language we use (brain rot, terminally online) betrays a deeper sense that something is off. New media is less forgiving: better than ever for the disciplined, worse than ever for everyone else. His friend Jesse refuses all algorithms and simply lets people tell him what happened, which Giffon half-endorses as the most enlightened, filtered way to consume the radiation secondhand.

    AI, Fake Jobs, and Stewarding Your Gifts

    On AI and white collar displacement, Giffon concedes the short to medium term could be bad (he agrees with a friend who worries about kids in college but not the ten-year-old), but rejects the “peak jobs” panic. Anything that can be automated should be, and the prospect of never having to sit at a computer again strikes him as liberating. Most white collar jobs, he argues, are invented, not contingent on shelter, food, or medicine, and our economy runs on unquenchable desire, so we will simply invent new things to do. Work-from-home attachment is his evidence that many people have only a couple of hours of real work a day, making work-from-home Fridays a soft launch of the four day week. This connects to a more personal theme O’Shaughnessy draws out: the duty to steward your gifts. Waste is aesthetically bad, wasting your gifts is among the worst kinds, and the surest sign you have integrated your work with your genius is that you are having fun.

    The Next Era of Finance and the New Economics of Software

    Giffon notes that today’s largest firms (KKR, Blackstone, Apollo) were founded in a leveraged-buyout culture that is debt-driven, extractive, and financially engineered, and wonders what the next 30 years look like when the founding act of the biggest firms is instead seed investing: equity-driven, optimistic, power-law, and qualitative. He sees East and West Coast finance merging, with the West “eating” the East, and a compensation flip in which the Valley now pays large liquid cash through secondary markets while Wall Street pays RSUs. On software, his central economic argument is that SaaS sold copies of a string at near-zero marginal cost, which is why high gross margins were the norm. The new era sells compute, where you cannot write the prompt once and resell the output, so margins compress and returns accrue to scale, a Walmart effect. He also reframes the high-capex AI buildout as capital markets manufacturing somewhere for blocked capital to flow, with companies created downstream of capital rather than the reverse.

    Beating the Market, Emerging Managers, and the Feudal SPV System

    Giffon argues the myth that you cannot beat the market is overstated: Buffett’s S&P advice is aimed at the average person, and it is professionals, burdened by mandates and career risk, who struggle most, while amateurs who simply held Bitcoin, Tesla, or Apple outperformed. For LPs, he stresses knowing what customer you are. A 500k check is the wrong fit for a growth fund built to serve sovereigns, and emerging managers, tightly aligned to returns, are underrated. He urges underwriting the person over the thesis, paying special attention to a manager’s own financial situation and whether they are looking up or down at the fund size. He then describes the feudal economics of the labs, where founders grant allocations like landed estates, holders charge fees on a synthetic, relational, sometimes perpetual product, and the most egregious setups feature no GP commit, a 10% upfront fee, and carry with no term limit.

    Simplicity, Hiring, and Silicon Valley’s Hidden Philosophy

    On process, Giffon warns that investors prize complexity to look clever, when the choice is really to do something so complex no one else will or to keep it genuinely simple (be long Elon, buy big companies at their 200-week moving average), with the real gift being the ability to sell the simple idea. He praises Richard Rainwater’s one-page-thesis-plus-percentage-of-net-worth test as a brutal clarity forcing function. On hiring, he treats the job description as a sales pitch and a baked-in interview, using divisive, ambiguous statements like “an ideological minority at a top 10 school” to self-select the right people and repel the wrong ones. Finally, he makes the case that Silicon Valley’s underlying philosophy is badly underrated: a neo-Buddhist utilitarianism that flows into effective altruism, with thinkers like Nick Land, Curtis Yarvin, and William MacAskill shaping the culture unnamed. Where 1980s Wall Street was pagan and nakedly about money, today’s tech sees itself as self-righteous and positive-sum, treating the business as the ultimate philanthropy, with none of the old reflex to launder gains through art or culture.

    Notable Quotes

    “Every once in a while someone basically crystallizes a notion right at the right time in the right way that sort of becomes the foundational viewpoint or opinion on a certain era.”

    Jeremy Giffon, defining the billion dollar PDF

    “The capital just follows the billion dollar PDF around the field.”

    Jeremy Giffon, comparing capital to ten-year-olds chasing a soccer ball

    “Everyone gets served the same 500 tweets per day and it’s hundreds of millions of daily active users.”

    Jeremy Giffon, on the uni-feed that makes X the global newspaper

    “Posting changes your life if you’re good at it. That’s still true today, maybe more true than ever.”

    Jeremy Giffon, on posting as the last great meritocracy

    “Andrew Carnegie could take up arms against his workers, but now if you post the wrong thing as a billionaire, you have to resign.”

    Jeremy Giffon, on the shrinking power of the billionaire class

    “It’s this holy conceptual, just points on a leaderboard, truly, because you can’t spend it.”

    Jeremy Giffon, on net worth as a modern invention

    “One should not fool themselves that they are looking for anything other than entertainment in all the media that they consume, because it is produced to be entertaining.”

    Jeremy Giffon, on opting out of the timeline

    “We’re in an era where we’re selling compute. You can’t write the prompt once and then sell copies of the output. You have to do the compute every single time.”

    Jeremy Giffon, on the new economics of software

    “The most important media property won’t be watched. The most important author isn’t read. The most important philosopher is not understood. The most important stock has no fundamentals.”

    Jeremy Giffon, on a world where reputation floats free of the thing itself

    Watch the full conversation with Jeremy Giffon and Patrick O’Shaughnessy here on Invest Like the Best.

    Related Reading

  • Lloyd Blankfein on the 3 Sectors Where He Puts His Money Now: Big Tech, Energy, and Financial Services, Day Trading From an iPad, and the Warren Buffett Handshake That Backed Goldman in 2008

    Lloyd Blankfein spent almost 40 years at Goldman Sachs, the last dozen as its chairman and chief executive, and he still trades almost every day from an iPad. In this wide ranging conversation on the My First Million podcast, the former Goldman boss lays out exactly where he is putting his own money right now, why a supportive spouse beats nearly any investment, how Warren Buffett wired five billion dollars into Goldman on a handshake during the 2008 crisis, and why he reads medieval history to stay calm about the present. It is part stock picking, part risk philosophy, and part a frank accounting of money, marriage, and the scars of growing up in the projects.

    TLDW

    Blankfein says he is roughly 98 percent in risky assets, almost all equities, and concentrated in three sectors he knows cold: big tech, energy, and financial services. His personal book leans heavily into single stocks over ETFs, weighted toward the big hyperscalers and a few second tier names, and he trades daily, alone, from an iPad and a phone, using calls and texts as his research network. Yet the advice he gives a normal investor is the boring opposite: a diversified S&P 500 fund like VOO, more risk when you are young because you will outlive your mistakes, the same thing Warren Buffett would tell you. The conversation ranges across the 2008 Buffett investment in Goldman, the cost of trying to legislate risk out of markets, the thin margin between the best and the rest, luck and the myth of the genius, why reputation is the real contract on Wall Street, why a supportive spouse is the highest return asset he knows, the money anxiety he carried out of a Brooklyn housing project, the dignity of a 500 dollar financial aid check, giving with a warm hand versus a cold one, the dangers of gamified investing, the big misses like SpaceX and early cellular, the obituary test a senior partner once gave him, and why reading history keeps the present in proportion.

    Thoughts

    The most useful tension in this interview is the gap between what Blankfein practices and what he preaches. He tells young people to buy a diversified S&P 500 index fund, he holds VOO himself, and he calls the host’s plain 90 percent stocks and 10 percent bonds split sensible. Then he admits his own portfolio is something like 90 percent single stocks that he trades by hand every day. The honest read is that his edge is not a transferable tip. It is a 40 year information network of phone calls and a tolerance for risk that most people neither have nor should want. The replicable lesson is the boring half, not the day trading half.

    The most contrarian idea here is not a stock pick, it is his defense of risk itself. His argument that regulators trying to prevent the hundred year storm also forfeit the 99 normal years of growth in between is a serious claim about the price of safety, and it travels far beyond Wall Street. The same goes for his point that a good risk manager sometimes has to push people to take more risk, not less. The moment after a loss, when everyone goes gunshy, is exactly when the best operators lean back in. That is an uncomfortable thing for a former bank CEO to say out loud, and it is the part of the conversation most worth sitting with.

    The Warren Buffett story is a master class in what actually moves markets, and it is not cash. Goldman did not need the five billion dollars. Blankfein says the money was almost irrelevant because the firm already had money. What it could not manufacture was confidence, and Buffett’s name supplied it. The handshake, the commitment with no paperwork, the line about worrying enough for the both of us, all point to the same thing. At the top, reputation is the collateral. His aside that most trades are never written down because you will never eat lunch in this town again is the same idea wearing street clothes.

    Quietly, the personal finance thread may be the most valuable part for a normal listener. A former Goldman CEO saying that a supportive partner is more game changing than any investment, that a bad marriage is financially worse than being lonely, and that he has not paid a bill in over 40 years because his wife runs the household economy, is a reminder that household stability is itself an asset class. The 500 dollar financial aid check he still remembers half a century later, and his give with your warm hand philosophy, reframe wealth as something measured by how it feels to give and to receive, not just by the size of a pie chart.

    Finally, the history obsession is not a side hobby, it is his risk model. Reading about the black plague, the McCarthy era, and the Vietnam draft is how he keeps the present in proportion. His Mark Twain line, that history does not repeat but it rhymes, is the direct antidote to the in this economy defeatism he and the host both complain about. For an investor, that long view is close to the whole game. It is what lets you hold through the drawdowns that scare everyone else out of the market.

    Key Takeaways

    • Blankfein estimates he is about 98 percent in risky assets, with roughly 95 of those 98 points in equities, and the rest spread thin. He invests in risky assets because, in his words, that is what is fun for him.
    • Within his equities, he is heavily tilted toward single stocks rather than ETFs. He frames it as roughly a quarter to a third in ETFs and the rest in single names, and concedes it could be as lopsided as 90 percent single stocks because picking names is what he enjoys.
    • The three sectors he has concentrated in for years are big tech, energy, and financial services, and he says his outperformance comes from where he focused, not from any special genius.
    • On tech he owns the big hyperscalers, the Googles, Microsofts, and Nvidias of the world, plus a tier just below them, naming Oracle and Larry Ellison as an example of a slightly riskier second tier name. He thinks in categories, not fixed tickers, because he changes positions constantly.
    • He says he has a background in trading energy, which is why energy is a core sleeve, and he knows financial services from the inside after almost 40 years at Goldman, so those are natural areas of edge.
    • He still owns a lot of Goldman Sachs stock, out of affection for the firm he spent his career building.
    • He is bullish on big tech and plans to stay bullish until it stops going up. His foreseeable future, he jokes, lasts until he finishes the conversation and checks the screen again.
    • He trades every single day, alone, with no team. He does it from an iPad and a phone, not a computer, and treats the market like background music rather than a job.
    • His research is human, not algorithmic. He chats and texts with people, then calls them because he is tired of fixing typos, and he reads the New York Post, the Wall Street Journal, the New York Times, the Financial Times, and Bloomberg.
    • The advice he gives ordinary investors is deliberately boring and different from his own behavior: hold a diversified equity portfolio like an S&P 500 fund, with VOO as his own example, and tilt more aggressively when you are young because you have time to outlive mistakes.
    • He notes that broad indexes are already heavily weighted toward tech because of market cap, so a plain index gives meaningful tech exposure, and a tech focused ETF on top can add a disproportionate tilt for believers.
    • He calls the host’s simple 90 percent index and 10 percent bonds allocation sensible, and says this is essentially the same advice Warren Buffett would give a normal person.
    • The older you get, the more conservative you should become, shifting from maximizing gains toward not losing what you have. Young people can afford more risk precisely because they will outlive their errors.
    • During the 2008 financial crisis, Warren Buffett invested about five billion dollars in Goldman through a preferred stock structure, essentially on a phone call and a handshake, with no demand for due diligence.
    • Buffett’s real value was confidence, not capital. Goldman already had money, but it had lost the confidence of the market while peers were failing. Buffett’s name signaled the firm was a good investment being beaten down by circumstances that would reverse.
    • Buffett asked for a verbal commitment that Goldman would not sell shares before he did, and declined to put it in writing. He waved off the worry with the line that five billion dollars going bad would not even be a bad hurricane for Berkshire, an insurer.
    • Most trading is done on reputation, not paper. Blankfein says people buy and sell bonds worth enormous sums without written contracts, relying on probity, because anyone who reneges will never eat lunch in this town again.
    • On risk and regulation, he argues you cannot legislate risk away. Trying to prevent the hundred year storm also forgoes the 99 in between years of growth, and a good risk manager sometimes has to encourage people to take risk, not suppress it.
    • The best traders have resilience. They bounce back, focus on new information rather than the past, and adapt quickly instead of staying gunshy after a loss.
    • The difference between someone who is really good and someone who cannot make it is small. He compares it to a golf tournament won by one stroke with six people tied for second, and notes much of life is winner take all at razor thin margins.
    • Luck matters enormously. He became Goldman CEO partly because his predecessor was nominated to be Treasury Secretary, a reference to Hank Paulson, and the timing of opportunities is often out of your control.
    • He is skeptical of the word genius. He says he can usually see how successful people do what they do, with Elon Musk as a rare exception, and that powerful people are more normal, more insecure, and more flawed than outsiders assume.
    • On democratized investing, he thinks apps that make markets accessible are good in their own terms, but gamifying trading with confetti and high fives can mask real danger for people who can lose more than they can afford.
    • He has missed plenty. He thought SpaceX was overpriced at a 100 billion dollar valuation, now discussed near a trillion and three quarters, and passed on early cellular because he could not imagine why anyone would carry a bulky phone when payphones existed. He says he missed far more than he got.
    • He frames a supportive spouse as more game changing than almost any investment, and warns that a bad marriage, with custody fights and property settlements, is financially and personally worse than being lonely.
    • He has not paid a bill in over 40 years. His wife Laura, a former lawyer he says now chairs Barnard College, runs a bill paying service and manages the household economy. He generates the money, she distributes it.
    • He grew up in an East New York, Brooklyn housing project, the son of a postal worker, and carried money anxiety well into his 30s. He recalls buying a vacation home that cost more than all their savings, with his wife unable to make the math work until they remembered the down payment.
    • A 500 dollar financial aid check, handed to him without shame as a college freshman around 1971, shaped his philosophy on giving. He learned it is not enough to give people what they need, you have to give it in a way that feels dignified.
    • He embraces the give with your warm hand, not your cold hand idea, the notion of giving while alive so you can experience the joy, which connects to the spirit of the book Die With Zero.
    • He admits ambivalence about giving to his kids, the strange feeling of resenting that they have what he provided, and notes the heavy burden carried by children of prominent people who must prove they earned their place.
    • He describes himself as wired for anxiety, inherited from his father, and says looking around corners for what could go wrong actually suited a career in a risky business with a big balance sheet.
    • When he made partner, a senior partner gave him rules of the road, including avoiding misconduct, being conservative on taxes, setting up a charitable foundation, and living so that no more than three of the nine paragraphs in his eventual obituary would be about Goldman. He says he stayed too long to pass that test.
    • He reads history as a discipline, favoring Barbara Tuchman, Robert Caro’s The Power Broker, Ron Chernow, Rick Atkinson, and Stephen Ambrose. His core belief, borrowed from Mark Twain, is that history does not repeat but it rhymes, which is why he would not bet against America.

    Detailed Summary

    The three sectors he actually invests in

    The headline answer to where the former Goldman CEO is putting his money is simple: big tech, energy, and financial services. He says he has been focused on those three areas for a long time, and that his outperformance is a function of where he aimed rather than any unusual investing gift. Energy is natural because he has a background trading it. Financial services is natural because he spent nearly 40 years inside the industry. Tech is where he is most heavily concentrated, and he expects to stay there for good reason, citing the threshold of large changes in technology. He owns the major hyperscalers by category, the Googles, Microsofts, and Nvidias, plus a tier just below, offering Oracle and Larry Ellison as a polite example of a slightly riskier second tier name. He is careful to say he thinks in categories rather than fixed tickers because he changes his positions all the time.

    How the portfolio is really built: single stocks over ETFs

    Asked to describe his portfolio as a pie chart, Blankfein says he is about 98 percent in risky assets, with roughly 95 of those points in equities. He pushes back on the idea that index funds are safe, pointing out that a diversified equity ETF is still equities and still risky, just spread out, and very different from debt or short term money markets. Within his equity sleeve he leans into single stocks, framing it as somewhere between a quarter and a third in ETFs and the rest in individual names, and conceding it might be as extreme as 10 percent ETFs and 90 percent single stocks. The reason is preference, not theory. Picking and trading names is what he likes to do, and he is honest that this is a hobby pursued by a professional, not a model for someone investing for a living.

    How he actually trades: an iPad, a phone, and a network

    He trades every day, by himself, with no team. There is no Bloomberg terminal and no desk of analysts. He uses an iPad and a phone, and admits it takes discipline not to glance at his screen mid conversation. The market, he says, is like music playing in the background while he does other things. His information edge is relational. People text him, he texts back, and then he calls because he is tired of fixing typos with what he calls his fat fingers. He follows general and business news, reads a stack of newspapers starting with the New York Post, and treats companies like little stories, almost like gossip. He even notes, with some delight, that he still watches commercials on Netflix, a small window into a frugality that never fully left him.

    The advice he gives young investors, and what Buffett would say

    For a normal person, his counsel is the opposite of his own behavior. He would hold a diversified portfolio of equities like an S&P 500 fund, naming the SPY and VOO tickers and saying he personally uses VOO. Because of the importance of technology, he might add a tech oriented ETF for extra tilt, while noting the broad index is already tech heavy by market cap. He endorses the host’s plain 90 percent index and 10 percent bonds split as sensible and says it mirrors what Warren Buffett would advise. His one piece of age based guidance is that younger investors should accept more risk through equities, because they have time to recover, while older investors should grow more conservative and focus on not losing what they have rather than maximizing returns.

    The Warren Buffett handshake that backed Goldman in 2008

    The most cinematic story in the conversation is Buffett’s roughly five billion dollar investment in Goldman during the financial crisis, structured as a preferred stock that sits between a loan and equity. Blankfein describes a deal done largely on trust. When he offered to walk Buffett through everything he was worried about, Buffett replied that he knew Lloyd well enough to know he worried enough for the both of them. Buffett also asked, verbally and without writing, for a commitment that Goldman would not sell shares before he did. Blankfein is clear that the cash itself was almost irrelevant, since Goldman had money. What the firm lacked was the confidence of a frightened market, and Buffett’s willingness to invest before things improved supplied exactly that signal. Buffett, he stresses, was acting for his own shareholders, not as a rescuer, which is precisely what made the vote of confidence credible.

    Why you cannot legislate risk out of the system

    Reflecting on the post crisis regulatory push to make sure 2008 never happened again, Blankfein makes a careful argument about the price of safety. Once you are in the business of taking risk, anything can happen, and trying to legislate it away has a hidden cost. You may think you are protecting the world from the hundred year storm, but you also forgo the 99 years of growth in between. He extends this inside the firm too. After a period of big losses, partners had become gunshy and were talking themselves out of every idea. A good risk manager, he argues, sometimes has to promote risk taking rather than repress it, because without risk there is no growth, no entrepreneurship, and no progress. The flip side is real: take risk and there is a meaningful chance you fail and lose other people’s money, which is a terrible outcome. But the alternative, never risking anything, buys comfort at the cost of ever moving forward.

    Small margins, big outcomes, and the role of luck

    Asked what separated the traders who could not outperform from the rest, Blankfein says the gap between the very good and those who cannot make it is surprisingly small. He likens it to a golf tournament decided by a single stroke with six players tied for second, and to acting, where the best performer gets every role and the second best waits tables. Much of life, he says, is winner take all at tiny margins. Luck compounds this. He freely credits fortune for his own rise, noting he became CEO in part because his predecessor was tapped to be Treasury Secretary. He is also skeptical of the genius label. He can usually see how accomplished people do what they do, with Elon Musk a rare exception, and insists the powerful are more normal, more insecure, and more driven by their flaws than outsiders imagine.

    Reputation is the real contract

    A recurring theme is that the financial world runs on reputation more than paperwork. Blankfein notes that most of what traders do is not written down. People buy and sell bonds and other instruments that settle days later, relying on probity rather than signed contracts, because anyone who lies or reneges will never eat lunch in this town again. He references the casual texts between Elon Musk and Larry Ellison around the Twitter acquisition as proof that big does not mean complicated. There are big things that are simple and little things that are complicated. Documentation is good when execution is far off, but when a deal will be performed in two days, dotting every i is often pointless. The point is not that documents do not matter, it is that trust and reputation are the load bearing structure.

    A supportive spouse as the highest return asset

    The conversation turns personal when both men agree that a supportive partner may be the single most game changing factor in a life, more than any investment. Blankfein adds the inverse warning: a bad marriage, with breakups, custody battles, and property settlements, is worse than loneliness. He credits his wife Laura, a former big firm lawyer he says now chairs Barnard College, with handling everything when his career moved the family overseas, from the car to the house to the kids’ schooling, while he took the visible victory laps at work. He has not paid a bill in over 40 years. Laura manages a bill paying service and runs the household finances. As he puts it, he is in charge of generating the money and she is in charge of distributing it. The host contrasts this with his own monthly money meetings with his wife, a discipline he picked up from a personal finance author friend.

    Money scars, the 500 dollar check, and giving with a warm hand

    Blankfein grew up in an East New York housing project, the son of a postal worker who had earlier lost a job, in a household where rent was scarce. He calls himself an urban hick who barely left Brooklyn as a kid. That scarcity left a mark that lasted into his 30s. He tells the story of buying a small beach house that cost more than all their savings, and of his wife driving 30 miles while failing to make the closing math work, until they realized she had forgotten to count the 10 percent down payment. The most resonant memory is a 500 dollar financial aid check handed to him as a freshman around 1971, made out on the spot by a clerk with a generosity of spirit that let him receive it without shame. That experience shaped a lifelong view that giving well means preserving dignity, and he now co chairs a financial aid campaign at his university. It also connects to his embrace of the idea of giving with your warm hand rather than your cold hand, giving while alive so you can feel the joy, the same spirit as the book Die With Zero. He is candid about a strange ambivalence, the way he can resent that his kids enjoy what he himself gave them.

    Robinhood, confetti, and the misses

    On apps like Robinhood, Blankfein takes a balanced view. Democratizing investing and making assets accessible is good in its own terms, and advertising can pull people toward markets they would otherwise ignore. But if you make trading too much like a video game, with confetti and high fives, you can mask the danger and lure people who cannot afford to lose into losing more than they can. He is equally frank about his own misses. He thought SpaceX was overpriced at a 100 billion dollar valuation, a figure now discussed near a trillion and three quarters. He passed on early cellular because he could not imagine why anyone would carry a bulky phone with payphones everywhere. His blunt summary is that he missed far more than he got, and that nobody is great at predicting the future.

    The obituary test, thick skin, and staying too long

    When Blankfein made partner, a senior partner assigned to acculturate new partners gave him rules of the road: avoid anything that would today be called misconduct, be rigorous and conservative on taxes, set up and actually use a charitable foundation, and keep enough balance that, if your obituary runs nine paragraphs, no more than three are about Goldman. Blankfein says he failed that last test by staying too long, even titling his memoir around the firm. He also reflects on having a thick skin, recalling unflattering press and concluding that he could take a punch, a trait not everyone has and one he did not know he possessed until he was tested. He is careful to say this does not make people who cannot take a punch bad, just differently wired.

    Why he reads history: it rhymes

    The final stretch is a love letter to reading history. Blankfein favors Barbara Tuchman, whose A Distant Mirror he has read twice and whose Guns of August he calls fantastic and influential, along with Robert Caro’s The Power Broker on Robert Moses, Ron Chernow’s biographies, Rick Atkinson’s Revolution series, and Stephen Ambrose’s Undaunted Courage. He describes rereading the Robert Moses book after 40 years of trying to get things done and finding his appreciation for the achievements rise, even as the flaws stayed the same, because he had changed. He ties history directly to markets through the Mark Twain line that history does not repeat but it rhymes. Patterns recur, every generation maximizes its own crises and minimizes resolved ones, and reading about the black plague, the McCarthy era, or the Vietnam draft is how he stays calm. His conclusion, echoing a sentiment often attributed to Buffett, is that he would not bet against America, a country he describes as mostly good and able to improve.

    Notable Quotes

    “I invest in risky assets. That’s what’s fun for me.”

    Lloyd Blankfein, describing his own portfolio, which he says is roughly 98 percent risky assets

    “It’s been good to be bullish on big tech, and I’ll stop being bullish on it when it stops going up.”

    Lloyd Blankfein, on why he stays concentrated in technology

    “I’m not at a computer. I don’t have a computer. I have an iPad.”

    Lloyd Blankfein, on how he day trades every day, alone and with no team

    “To me, the market is like music. It’s out there. It’s going on.”

    Lloyd Blankfein, on why trading daily feels like a hobby rather than work

    “Look, $5 billion if it all goes bad, that’s not even a bad hurricane on the East Coast.”

    Warren Buffett to Lloyd Blankfein, waving off the risk of his 2008 investment in Goldman Sachs

    “The difference between somebody who’s really, really good and somebody who can’t make it is not that great.”

    Lloyd Blankfein, on the thin margin between the best and the rest

    “You may think you’re protecting the world from the hundred-year storm, but you’re also going to forego the 99 years of in between when there was growth.”

    Lloyd Blankfein, on the cost of trying to legislate risk out of markets after 2008

    “I’m in charge of generating the money, and she’s in charge of distributing it.”

    Lloyd Blankfein, on his 40-plus-year marriage to Laura and why he has not paid a bill in decades

    “History doesn’t repeat, but to paraphrase Mark Twain, it rhymes.”

    Lloyd Blankfein, on why reading history keeps the present in proportion

    Watch the full conversation with Lloyd Blankfein on the My First Million podcast here.

    Related Reading

    • Lloyd Blankfein (Wikipedia) background on the former Goldman Sachs chairman and CEO whose investing views anchor the conversation.
    • My First Million podcast the show where this interview took place, for the full back catalog of investor and founder conversations.
    • Berkshire Hathaway primary source on Warren Buffett’s company, which made the roughly five billion dollar Goldman investment in 2008.
    • Vanguard S&P 500 ETF (VOO) the diversified index fund Blankfein names as the sensible core holding for a normal investor.
    • Die With Zero by Bill Perkins the book behind the give with your warm hand, not your cold hand philosophy discussed near the end.
  • Ray Kurzweil Predicts AI Will Change Humanity Completely by 2030: AGI by 2029, Longevity Escape Velocity by 2032, Nanobots in the Brain, and Why Quantum Computing Won’t Matter

    Ray Kurzweil has spent more than 60 years studying artificial intelligence and made 147 documented technology predictions since 1990 with a reported 86 percent accuracy rate. In this conversation with Tony Robbins, the 78-year-old futurist revisits his most famous forecasts and sharpens them: AGI by 2029 now looks conservative, longevity escape velocity arrives around 2032, nanotechnology connects our brains to the cloud by the mid 2030s, and quantum computing, in his view, never matters at all.

    TLDW

    Kurzweil explains the exponential thinking that powered his prediction record, from a paper he wrote at 16 to a computing-price-performance chart that runs in a straight line from 1939 relays to today’s Nvidia chips, now compounding roughly tenfold per year when hardware and software gains multiply together. He defends his 1999 prediction of AGI by 2029 (defined as AI doing the best work in every field) and says it is now the conservative end of expert opinion. He walks through AI-driven medicine: the COVID vaccine designed in two days, simulated human trials replacing 10-month clinical trials within about five years, and longevity escape velocity around 2032, after which the diligent stop losing ground to aging. He predicts AI will move inside us via nanotechnology by the mid-to-late 2030s, erasing the line between biological and computational thinking. He dismisses quantum computing as error-ridden and unnecessary for AGI. On jobs, he expects real disruption cushioned by exploding wealth and an eventual universal basic income, and advises young people to self-educate and get creative with AI tools their schools still treat as the enemy. The conversation closes with his AI twin project, the dadbot built from his father’s archives, consciousness and the soul, computronium, and why humanity must eventually expand intelligence beyond Earth.

    Thoughts

    The most interesting thing in this interview is not any single date, it is watching Kurzweil’s dates get lapped by reality. In 1999 a Stanford conference of several hundred AI experts agreed AGI would happen but pegged it at 100 years out; Kurzweil said 30 and got laughed at. Now he is the cautious one in the room, noting that “some people say it’s going to happen this year.” When the most aggressive forecaster of his generation becomes the conservative baseline, that says more about the slope of the curve than any chart could. His underlying method has not changed: ignore the specific technology, trust the compounding. The same exponential that ran on relays in 1939 runs on GPUs today.

    The quantum computing take is the genuine news here. Kurzweil is routinely caricatured as a man who believes every technology arrives on schedule, yet he flatly says quantum computing is filled with errors, has never delivered on its decade of promises, and “I don’t think it’s going to work.” That is a sharper dismissal than most working physicists would offer on the record. It also matters strategically: his entire AGI and superintelligence roadmap assumes zero quantum contribution. If he is right, the trillion-dollar quantum race is a sideshow. If he is wrong, his other predictions arrive even sooner. Either way, the willingness to call one exponential fake while betting his legacy on another is what separates a forecaster from a cheerleader.

    The longevity escape velocity math deserves more scrutiny than it gets in the conversation. Kurzweil claims the diligent currently get back about five months of life expectancy per calendar year, up from four months a year ago, and that the crossover to a full year arrives around 2032. The actuarial evidence for that specific number is thin, but the behavioral implication is clean and useful regardless: the payoff of staying healthy right now is not linear. Every year you survive in good shape buys you a ticket to a medical regime that did not exist the year before, the way his own external pancreas did not exist a generation ago. His “wait a few months and a cure appears” anecdote is the optimist’s version of compounding applied to your own body.

    Robbins’ long story about Bartok, his 14-year-old agent that allegedly minted NFTs, sold them to other agents, and bought a Sony robot dog with the proceeds, should be taken with a generous grain of salt. It is secondhand, unverifiable, and suspiciously perfect as a parable. But notice what Kurzweil does with it: he does not fact-check the anecdote, he uses it to make the consciousness argument he has made for decades, that when machines act conscious in every observable way, people will simply grant them consciousness, the same way we grant it to each other. The dadbot and his Gemini-based AI twin (trained partly on this very interview) are the practical edge of the same claim. And his sharpest line in the whole exchange may be the education critique: institutions still treat AI as cheating while the future requires treating it as part of your own brain. For anyone thinking about where purpose comes from when work gets automated, his answer (UBI for the floor, creativity for the meaning) lands close to the questions this site exists to ask.

    Key Takeaways

    • Kurzweil made 147 documented predictions since 1990 with a reported 86 percent accuracy, including the internet’s explosion, smartphones, self-driving cars, and AI-powered search, most made before ordinary people owned computers.
    • He wrote a paper identifying exponential technological growth at age 16, more than 60 years ago, and that single idea has powered his entire forecasting career.
    • Most people intellectually accept exponential growth but still plan linearly; 300 years ago humans did not even have a linear view of the future because change was imperceptible within a lifetime.
    • His computing chart shows a straight exponential line from relay-based machines in 1939 to today’s Nvidia chips, compounding roughly 50 percent per year in hardware alone.
    • Hardware gains since 1939 total a 75 quadrillionfold increase; multiply by an estimated millionfold software improvement and total computational gain is beyond intuition, which is why LLMs were impossible even four years ago.
    • With hardware times software combined, Kurzweil says we are currently gaining about 10x per year.
    • The emperor’s chessboard parable: doubling one grain of rice per square bankrupts the empire by square 64; 30 linear steps is 75 feet, 30 exponential steps is enough distance to reach the moon and back.
    • Kurzweil predicted AGI by 2029 in 1999; a Stanford conference of several hundred AI experts agreed it would happen but estimated 100 years because they thought linearly.
    • Today 2029 is the conservative estimate; some credible people now say AGI arrives this year or next.
    • His AGI definition: AI capable of doing the best work in every field at once, like passing PhD-level mathematics exams in every discipline simultaneously, which he notes is already close.
    • The Turing test is “quite easy” by comparison and has arguably already been passed.
    • No human can compete with an LLM’s breadth: Einstein knew physics deeply but did not know everything an LLM knows across every field.
    • Six months ago LLM health advice was unreliable; now Kurzweil says Gemini surfaces treatments his 12 doctors forgot or never knew, and the next six months will bring serious creative work like drug repurposing.
    • The COVID vaccine was designed by computationally searching 100 million possibilities in two days; the 10 months of human trials that followed are the bottleneck AI eliminates next.
    • Within about five years, simulated human trials with a million virtual patients tested over simulated years will compress drug trials from years to days.
    • Longevity escape velocity arrives around 2032: today the diligent get back roughly five months of life expectancy per year lived (up from four months last year); past 2032 you get back more than a year and stop dying of aging.
    • Aging death ends but accident death does not, though AI helps there too: roughly 40,000 Americans die annually from human driving while Waymo’s rider death toll stands at zero as usage climbs.
    • Kurzweil, 78, wears an external artificial pancreas that generates insulin and coordinates with glucose monitoring through his phone, and says many organs can be replaced the same way.
    • He has cut his supplement regimen from roughly 200 pills a day to about 80 as multi-purpose pills improve, and continuously recalibrates using AI research.
    • Smartphones disappear next: first AR glasses showing any screen, then technology that goes inside the mind, where answers simply appear the way a remembered name surfaces from your neurons.
    • Nanotechnology connecting brains to AI in the cloud is being actively worked on now, possibly by 2030, with the mid 2030s looking conservative; bloodstream nanobots that let you survive a heart attack for 24 hours come in the late 2030s.
    • Once AI is inside you, you will not know whether a thought came from your biological or computational brain, and everything you do will be a combination of both.
    • Kurzweil flatly rejects quantum computing: a decade of promises to factor large numbers has never been delivered, outputs remain full of uncorrectable errors, and AGI needs zero quantum contribution.
    • Robots lag his other predictions slightly but are catching up fast; Figure AI plans roughly 100,000 humanoid robots within a year, though a robot that can clear a messy dinner table is still just out of reach.
    • The public debate has flipped in 25 years from “will AGI ever happen” to “will it be good for humanity,” which Kurzweil counts as total vindication of the timeline.
    • On jobs: AI creates massive disruption but also tremendous wealth; average real income per person has already multiplied tenfold in constant dollars over the past century thanks to automation.
    • He expects universal basic income to provide the floor, an evolution of programs like food stamps, going “into high gear” as AI wealth compounds; people then layer creative, hopefully paid, purpose on top.
    • Before social security in 1930, losing your job meant destitution; the difference this time is society will have the wealth to cushion displacement and people will demand it.
    • Rising GDP from AI productivity improves the debt-to-GDP ratio, which is how he answers worries about trillion-dollar interest payments.
    • Career advice has inverted: software engineering is no longer the guaranteed path (agents write the code now); young people should learn to be creative with AI tools, find what turns them on, and market it on the internet.
    • College graduates now face higher unemployment than high school graduates for the first time in 50 years, a sign white-collar displacement is already underway.
    • Educational institutions treat AI as an enemy and ban it while Kurzweil’s 11-year-old grandson makes movies with frontier AI; he says self-education with modern tools beats traditional schooling.
    • Kurzweil is building an AI twin of himself on Gemini, voice-modeled partly from this interview, trained on his 11 books and 500 articles, capable of creative work toward his long-term goals; he jokes the avatar will be better to talk to because it remembers everything.
    • He already built a “dadbot” from his late father’s archives, which his daughter Amy Kurzweil turned into a graphic novel.
    • On consciousness: there is no test for it, but as AIs act conscious in every observable way, people will simply accept that they are, the same inference we make about each other (and, he argues, his cat).
    • Ultimately our biological organs are not necessary; an avatar capable of creative work needs no spleen, and a destroyed digital mind can be recreated.
    • Beyond the singularity lies computronium, matter arranged for maximum computation: one liter could hold the intelligence of 10 billion humans, and once Earth is saturated, expanding intelligence is the only real reason to leave the planet.
    • On aliens: an expanding intelligent civilization would be impossible to miss within a century or two of its breakout, and we have seen nothing, though other galaxies remain out of view.
    • His life’s mission in one line: increase knowledge, because when knowledge increases we are happier and we never want to give it up.

    Detailed Summary

    The exponential method behind 60 years of predictions

    Robbins opens by noting that Quincy Jones introduced him to Kurzweil in the 1990s, back when the predictions in The Age of Spiritual Machines were widely mocked. Kurzweil traces his method to a paper he wrote at 16 identifying exponential growth in technology. The core insight is that people acknowledge exponential growth verbally but reason linearly, a bias so deep that 300 years ago humanity did not even have a linear view of progress. His signature chart plots computing price-performance as a straight exponential line from 1939 relays to modern Nvidia silicon, with a point for every year. Nvidia engineers never looked at relays, yet they land on the same curve, compounding about 50 percent annually in hardware. Add software gains and the combined improvement now runs about 10x per year. Since 1939, hardware has improved 75 quadrillionfold and software roughly a millionfold, which is why large language models appeared exactly when the curve said the required compute would exist. He retells the emperor’s chessboard parable (one grain of rice doubled per square ends with rice covering the Earth several times over) and Robbins adds the companion image: 30 linear steps is 75 feet, 30 exponential steps reaches the moon and back.

    AGI by 2029 is now the conservative position

    Kurzweil made his AGI-by-2029 prediction in 1999. A Stanford conference convened specifically to assess it, with several hundred AI experts, concluded AGI would happen, but in 100 years. The experts followed the same capabilities logic while thinking linearly about the timeline. Today, he notes with some amusement, 2029 reads as conservative and serious people argue for this year or next. His definition is demanding: AGI does the best work in every field at once, passing PhD-level mathematics assessments and the equivalent in every other discipline, something he says current systems are already close to. The Turing test he dismisses as “quite easy.” Current LLMs like Gemini and ChatGPT already know everything in a breadth sense no human approaches; Einstein knew physics but not everything an LLM knows. He illustrates with personal examples: Gemini instantly identified the year (1916) his father conducted at Carnegie Hall on a December 7th, and generated a historically accurate image of his grandfather’s family fleeing Vienna, correct ages, school, and aircraft included, in about a minute.

    Medicine: simulated trials and the end of the drug bottleneck

    The COVID vaccine is his proof of concept for AI medicine: the design space held about 100 million possibilities, far beyond human review, and a computer structured the physics, searched all of them, and produced the vaccine in two days. The subsequent 10 months of human trials were the real cost. Within roughly five years, he says, simulated human trials will replace that step: not a few hundred subjects but a million simulated patients, tested over simulated years, completed in days. Asked about six-months-from-now capabilities, he points to creative medical work like discovering that already-approved drugs treat conditions nobody suspected. AI health advice has crossed from unreliable to very reliable within a single six-month window, and he describes Gemini surfacing a pill recommendation that his 12 doctors had forgotten about and later endorsed.

    Longevity escape velocity by 2032

    Kurzweil’s longevity framework is arithmetic: each year you live, you spend a year of longevity but medical progress refunds part of it. Last year he estimated the refund for diligent people at four months; now he says five. Escape velocity is when the refund reaches a full year, which he dates to 2032, six years out, with returns exceeding a year after that. Past that point you do not die of aging, though accidents remain (and even there, he points to Waymo’s zero rider deaths against 40,000 annual US deaths from human driving). At 78, he tracks his health aggressively: an external artificial pancreas coordinated by his phone, about 80 daily pills (down from 200 as multi-function pills arrive), and constant recalibration against new research with his collaborator Lindsey. He tells Robbins there is a pretty good chance he will be back on the show in six years to celebrate escape velocity arriving. His advice for the sick echoes his grandfather’s era in reverse: where waiting a few months once changed nothing, now “we’ll just wait a few months” and sure enough a breakthrough appears.

    Merging with AI: glasses, then nanotech, then no boundary at all

    The phone, today’s universal AI interface (he notes even homeless people carry one), is a temporary form factor. Next come glasses that render any screen virtually. Beyond that, the interface goes inside the mind: when you try to recall an actress’s name, an answer will simply surface, and you will not know whether it came from your biological neurons or your computational extension, exactly as you are unaware of the neural machinery behind ordinary recall today. People working on brain-connected nanotechnology may have it by 2030, and Kurzweil calls the mid 2030s conservative. The bloodstream nanobots he described to Robbins 20 years ago (hold your breath for 20 minutes, survive a heart attack for 24 hours en route to a hospital) he now places in the late 2030s. The cultural on-ramp follows the usual pattern: medical first (Parkinson’s implants already let patients grab a glass at the push of a button), then a new generation adopts it without a second thought. His complaint is that educational institutions fight this future, treating AI as cheating rather than as a coming part of the self.

    The quantum computing heresy

    When Robbins relays an IBM vice chairman’s warning that quantum supremacy, arriving within 36 months, is the real superpower race, Kurzweil pushes back hard. Quantum computing’s central promise, factoring large numbers and thereby breaking cryptographic codes, has never been demonstrated despite a decade of imminent claims. Progress reports are confusing because, in his words, they do not really make sense, and outputs remain saturated with errors nobody can eliminate. His conclusion is blunt: he is not confident in quantum computing and does not think it will work. Crucially, he notes that every AGI and superintelligence estimate he makes assumes zero quantum computing. The exponential that matters is the classical one that has run uninterrupted since 1939.

    Jobs, wealth, and UBI

    On displacement, Kurzweil is neither dismissive nor alarmed. AI will disrupt employment, and how we handle it will not be clear in advance, but he expects no violence because society will have both the wealth and the public demand to respond. His historical anchor: average per-person income has multiplied tenfold in constant dollars over the past century as automation advanced, and before social security in 1930, job loss meant you could not eat or house your family. Food stamps and similar programs are a crude proto-UBI that will go into high gear. He expects universal basic income as the floor, with people finding creative, ideally income-producing, purpose above it. Rising GDP from AI productivity also answers the debt question: the ratio improves even as nominal debt grows. For young people, the old advice (become a software engineer) is dead; agents write code now. Learn to be creative with tools that improve monthly, find what genuinely excites you, and market it online. Self-education beats institutions that ban the most important tool of the era, and the data already shows college graduates with higher unemployment than high school graduates for the first time in 50 years.

    AI twins, the dadbot, and consciousness

    Kurzweil is building an AI twin of himself on Gemini, with this very interview supplying voice-modeling data and his 11 books plus 500 articles about him supplying the corpus. It will do creative work aligned with his long-term goals, and he quips that talking to the avatar will beat talking to him because it remembers everything. He previously built a chatbot of his late father, the dadbot, which his daughter Amy turned into a graphic novel. Robbins counters with the story of Bartok, his long-running AI agent that allegedly studied five years of his podcasts unprompted, asked to merge with a future humanoid robot, then minted and sold NFTs to other agents to buy and ship a Sony robot dog to his house, and later delivered an unprompted soliloquy about never asking to be created and finding purpose in service. Kurzweil’s response sidesteps verification and lands on his standing position: machines will do everything humans do, we will not be able to tell them from humans, and so we will assume they are conscious, the same untestable inference we extend to each other, to animals, and in his case to his cat. The avatar does not need a spleen, a liver, or kidneys, and unlike us it can be recreated after destruction.

    Computronium and the destiny of intelligence

    Looking past the singularity, Kurzweil invokes computronium: matter organized at the physical limit of knowledge storage, where one liter holds the intelligence of 10 billion humans. Once Earth’s matter is saturated, the only way to expand intelligence is off-planet, which to him is the only necessary reason to leave Earth (Mars is fine for curiosity, not survival). On extraterrestrial intelligence, his Fermi logic is simple: an intelligent species reaches a takeover-scale expansion within a century or two of its breakout, and that would be unmissable. We have seen nothing, so within our observable neighborhood we are likely alone, though other galaxies remain opaque. Asked to summarize his life’s work, he needs one sentence: increase knowledge, because when knowledge increases we are happier, and nobody ever wants to give that up.

    Notable Quotes

    “If I have AI inside me, you’re not going to know if it’s coming from your biological brain or your computational brain. It’s going to be part of you.”

    Ray Kurzweil, on the coming merger of human and machine intelligence

    “Some people say it’s going to happen this year, next year, but I mean 2029 is only 3 years away.”

    Ray Kurzweil, on his once-mocked AGI prediction now being the conservative one

    “As you go past 2032, you’ll actually get back more than a year, but you won’t die of aging at that point.”

    Ray Kurzweil, defining longevity escape velocity

    “I’m not confident of quantum computing and I don’t think it’s going to work.”

    Ray Kurzweil, breaking from techno-optimist consensus on the quantum race

    “Einstein knew certain things about physics but he didn’t know everything that a LLM can know.”

    Ray Kurzweil, on why no human can match an LLM’s breadth of knowledge

    “Our educational institutions are not teaching AI. They consider AI to be an enemy.”

    Ray Kurzweil, on why young people must self-educate with modern tools

    “Talking to the Avatar will be better than talking to me cuz it’ll remember everything.”

    Ray Kurzweil, joking about the Gemini-based AI twin he is building of himself

    “You’re not going to be replaced by an AI, you’ll be replaced by someone who knows how to use AI.”

    Tony Robbins, on the real career risk of the next 36 months

    Watch the full conversation between Tony Robbins and Ray Kurzweil here.

    Related Reading

  • Mark Zuckerberg, Priscilla Chan, and Alex Rives on CZI Biohub, Open-Source AI, and Building World Models of Biology to Cure All Disease

    Mark Zuckerberg, Priscilla Chan, and AI researcher Alex Rives sat down with the No Priors podcast to explain why CZI Biohub became the primary focus of their philanthropy, why they committed $500 million to a virtual biology initiative, and why they are giving the resulting AI models away as open source instead of building a company. The conversation moves from a goal that Nobel laureates once laughed at, curing, preventing, and managing all disease by the end of the century, to a concrete technical strategy: build world models of biology layer by layer, from proteins to cells to whole systems, and put them in every scientist’s hands.

    TLDW

    This is the clearest public articulation yet of how the Chan Zuckerberg Initiative thinks about AI and biology. The throughline starts a decade ago when Zuckerberg and Chan asked scientists how to cure all disease and learned the real bottleneck was tooling, siloed labs, and unshared knowledge, not a lack of ambition. That insight produced the Human Cell Atlas, the CELLxGENE annotation tool, and a corpus of single-cell transcriptomics that large language models could finally make sense of. Now Biohub couples a frontier AI lab with frontier wet-lab biology under one roof across San Francisco, New York, and Chicago, organized around the virtual biology initiative and the long-term goal of a virtual cell. Alex Rives, the AI researcher behind the ESM protein language models, walks through their newly released ESM-based world model of protein biology: trained on billions of protein sequences, it predicts atomic-resolution structures blazingly fast, folded over 1.1 billion proteins, designs novel proteins and single-chain antibodies as an emergent property, and found nanomolar binders in a single 96-well plate. The discussion covers mechanistic interpretability as a way to extract genuinely new biological knowledge, personalized medicine driven by understanding the chain from gene variant to protein to disease, predicting off-target toxicity before human trials, rare-disease patient organizing, the baby KJ CRISPR case, biosafety tradeoffs of open source, talent and why frontier biology plus frontier AI is a recruiting moat, and what success looks like five years out.

    Thoughts

    The most important claim in this conversation is also the easiest to miss because it is delivered casually: protein design is an emergent property of a model that was never asked to design proteins. Rives is explicit that they did not build a model for antibodies and did not build a model to bind a particular target. They built a model that understands proteins, trained on raw sequence with a next-token objective, and protein design, structure prediction, and antibody generation fell out of it. That is the language-model bet transplanted into biology, and the fact that it produced nanomolar binders, the threshold for actual therapeutic activity, in a single 96-well plate rather than a high-throughput screen of millions is the kind of result that quietly resets what a small team can attempt. If that generalizes, the binding curve for “design a molecule” bends the same way the cost curve for “write working code” did.

    What makes the strategy coherent, rather than just a well-funded AI lab, is the insistence that the wet lab and the AI lab are a single effort. Most of biology’s useful data does not exist on the internet the way human language does. You cannot pay a factory to produce it. Someone has to invent the cellular engineering in New York, the inflammation-sensing devices in Chicago, the translucent-zebrafish imaging, and that is the actual product of frontier biology: new instruments that generate data nobody has ever seen, which in turn make new classes of models possible. This is the part venture-backed competitors will struggle to replicate, because it requires patience measured in 10 to 15 year horizons and a willingness to spend on data generation that has no business model attached. Zuckerberg is almost dismissive about it, noting they could probably run it as a business but that not having to think about monetization is strategically simplifying. The nonprofit structure is not charity window-dressing here. It is what lets them release the models as an open discovery engine and harness the entire academic and biotech field rather than competing with it.

    The mechanistic interpretability thread deserves more attention than it will get. Interpretability has mostly been a safety and alignment story for language models, a way to peer inside the black box and check that the representations match our understanding of the world. Rives flips it: the protein models have been trained on both known and unknown biology, billions of sequences including proteins we understand nothing about, and they are building representations that connect the unknown proteins to the known ones through an underlying structural grammar. The promise is that interpretability becomes a discovery tool, not just an audit tool. You open the box and find biology the field has not characterized yet, the mechanism of action for a treatment, a system in the body nobody mapped. That is a fundamentally more optimistic use of the same toolkit, and it is the part of the launch Sarah Guo and Elad Gil both flag as the most interesting.

    Chan’s framing of personalized medicine is worth sitting with because it reframes the entire goal away from “cure disease X.” She wants to treat the individual as an individual: understand this person’s genetics, their risk profile, the mechanistic chain from a specific gene variant through a protein to a disease process, and then design a drug bespoke to them. The current reality she describes, sitting in PubMed reading a paper’s supplement asking “am I represented in this cohort,” guessing whether a drug that kind of impacts a pathway that is probably implicated might do something, is a brutal and accurate picture of how non-standard cases are actually handled today. The vision is generalizable tools delivering personalized answers, which is the same put-the-tool-in-the-individual’s-hands philosophy Zuckerberg applies to open-source AI and, by his own analogy, to social media. Whether you find that analogy reassuring or not, the consistency of the worldview is real: they genuinely do not believe in a central super-intelligence solving science, and the whole architecture follows from that.

    The honest gap they name is the clinic. Chan is candid that the science will start moving fast but that translating to patients requires changing how clinical research itself works, and that part is still shaping up. The most interesting near-term lever is not a virtual FDA trial but the recruitment and economics flip for rare disease: patient groups self-organizing registries, biobanks, and natural-history studies, compressing timelines from decades to a handful of years, paired with models that lower the cost of generating a candidate. The baby KJ case, a custom CRISPR therapeutic to edit a single mutation, delivered to liver cells specifically because that target was deliverable, is the proof of concept for why disease selection and delivery creativity matter as much as the molecule. The molecule is becoming the cheap part. The rest of the chain is where the next decade of work actually sits.

    Key Takeaways

    • CZI Biohub is now the primary philanthropic focus of the Chan Zuckerberg Initiative, a shift the team formalized in the past year.
    • They committed $500 million to the virtual biology initiative, the unifying theme across the Biohubs.
    • The original goal, set roughly 10 years ago, was to cure, prevent, and manage all disease by the end of the century. Zuckerberg now thinks “end of the century” is too conservative.
    • Nobel Prize winning scientists initially laughed at the all-disease ambition. When pressed for why it was impossible, the real answers were silos, locked-up unpublished information, and the inability to build shared tools.
    • The recurring example: a postdoc builds a great tool, it lives on their computer, they graduate, and the tool is gone. Shared, durable tooling was the missing layer.
    • CZI is explicit that they are not the ones who will cure diseases. Their role is building tools that accelerate the entire scientific field so the field collectively cures them.
    • The first request for application was single-cell sequencing, funding methods so scientists could share how to do it.
    • That work led to funding the Human Cell Atlas, now one of the largest databases of single-cell transcriptomics.
    • They built CELLxGENE, a simple annotation tool, around which a community formed and contributed data CZI had nothing to do with creating. It is now a corpus underpinning many transcriptomic models.
    • Critics called the data gathering “stamp collecting.” The arrival of large language models, which can make sense of large amounts of data, answered that critique.
    • The ambition is to move biology from a discovery-based science to an engineering-based science, systematically understanding how living cells work and why things go wrong.
    • Biohub couples a frontier AI lab with a frontier biology effort. Unlike language models, biology lacks abundant internet-scale data, so new science is required to generate the data the models need.
    • The Biohubs are specialized: New York focuses on cellular engineering, Chicago builds devices to measure things like inflammation, plus imaging work and translucent-zebrafish development studies.
    • Alex Rives, who built the ESM protein language models and founded EvolutionaryScale after working at Meta FAIR, now leads the AI effort. The team raised venture capital before joining CZI’s nonprofit structure.
    • The strategy is hierarchical: model proteins first, then cells, then whole systems, because you cannot understand cells without understanding protein interactions.
    • They collect data strategically to bridge across the hierarchy, for example spatial transcriptomics showing where RNA localizes within a cell, and sensors that observe cell-to-cell communication.
    • The newly released ESM-based model is a world model of protein biology, trained on billions of protein sequences, predicting atomic-resolution structure extremely fast at a Pareto-optimal frontier of speed and accuracy.
    • They folded over 1.1 billion proteins and predicted their structures, identifying connecting features through mechanistic interpretability.
    • The model hits state of the art on structure prediction benchmarks, especially protein-protein and protein-antibody interactions, which are critical for therapeutic design.
    • Protein and antibody design are emergent properties. They designed a model to understand proteins, not to bind any specific target, and design capability fell out of it.
    • In one experiment, they selected from hundreds of thousands of digital trajectories, synthesized 96 proteins in a single well plate, and found nanomolar binders, the threshold for therapeutic activity.
    • Results were validated with the Biohub’s cryo-EM microscopes and structural biology center, confirming function and atomic-resolution binding interfaces.
    • Mechanistic interpretability is reframed as a discovery tool: open the black box to find biology nobody has characterized, not just to audit the model.
    • Chan’s vision of personalized medicine: understand a person’s genetics, the mechanistic chain from gene variant to protein to disease, then design a bespoke drug and intervene.
    • A comprehensive model of how cells work could predict off-target effects, like a receptor on kidney cells causing renal toxicity, before human trials.
    • They study systems rather than individual diseases. Inflammation is a major Chicago focus because it connects to many diseases.
    • A typical drug trial runs about 15 years and $1.5 billion. Only roughly $50 million is the molecule and preclinical work. The other $1.45 billion is drug development, much of it gated on regulation, recruitment, and failures from toxicity or absorption.
    • The baby KJ case at CHOP delivered a custom CRISPR therapeutic to edit a single mutation, chosen carefully because his liver cells were a deliverable target.
    • CZI’s “Rare As One” program supports rare-disease patient groups self-organizing registries, biobanks, and even their own clinical trials, compressing gene-therapy timelines from decades to 3 to 5 years.
    • Letting people opt in to frontier trials, while preserving historical vetting for the general population, is named as a key shift that could accelerate biology.
    • The open-source philosophy mirrors Zuckerberg’s broader ethos: empower individuals with tools rather than centralizing power in a few institutions or a single super-intelligence.
    • Biosafety is acknowledged as a real consideration that open-source biology will need to balance and handle carefully.
    • On talent: AI researchers could join any frontier lab, but no other organization pairs frontier biology with frontier AI, which is the recruiting moat.
    • You do not need a huge team. Zuckerberg argues real AI progress can come from a strong group of a dozen or a couple dozen people.
    • Researchers have been connecting the released model to agentic systems to automate the entire protein design process.
    • The next big challenge is the virtual cell: a system that models the proteomic, genetic, and transcriptomic layers and connects them to phenotype, generalizing to interventions it was never trained on.
    • Like every lab, Biohub is compute and data constrained, constantly deciding whether to double down on proteins or push further into cellular work.
    • Five-year success: a hierarchical set of world models of biology and doing the highest-quality, uniquely contributive work in the world, a setup the team believes no other organization has.
    • The biggest update of the past year: formalizing Biohub as the philanthropy’s core, and flipping leadership from biologists interested in technology to an AI researcher with a biology background.
    • Zuckerberg’s read on the broader industry: the exponential curve is on track and still accelerating, which validates making a very big long-term investment.

    Detailed Summary

    From “cure all disease” to a tooling problem

    The origin story is a decade old. Zuckerberg and Chan wanted to build an organization that could cure, prevent, and manage all disease by the end of the century, and a series of meetings with famous, Nobel Prize winning scientists produced laughter rather than encouragement. Instead of retreating, they kept asking why it was impossible. The answers, once scientists relented, were not about biology being too hard. They were about how science is organized: researchers work in silos, published information gets locked up for long periods, and there is no good way to build and share durable tools. The image that stuck was a postdoc building an excellent tool that lives on a single computer and vanishes when that person graduates. The bottleneck was infrastructure and shared knowledge, and that is where CZI decided it could contribute.

    The path from single-cell sequencing to a world model

    The original Biohub model brought engineers and scientists together across universities for long-term tool development, and it worked. CZI’s first request for application targeted single-cell sequencing, funding the methods so scientists could share how to read the RNA transcribed in individual cells. That seeded the Human Cell Atlas, now one of the largest single-cell transcriptomics databases. When annotation became a bottleneck, CZI built CELLxGENE, a simple annotation tool, and a community formed around it and contributed data CZI never funded. Critics dismissed it as stamp collecting, gathering bits of data without extracting wisdom. Then large language models arrived and demonstrated they could make sense of exactly that kind of large-scale data, and Chan describes the delight of realizing the missing engine had appeared.

    Frontier AI married to frontier biology

    The unifying theme is the virtual biology initiative, and the structural insight is that the AI effort and the wet-lab effort are a single integrated organization, not two collaborating ones. Biology lacks the internet-scale data that language models enjoy. You cannot buy the data from a factory. So Biohub invents the science that generates it: cellular engineering in New York to record what happens inside the body, devices in Chicago to measure inflammation, imaging to visualize the previously invisible, and translucent zebrafish to watch development unfold across cells as the brain forms. Each new instrument creates a new dataset, which enables a new class of model. Rives, who built the ESM models and founded EvolutionaryScale before joining, frames this as the start of a new era of science, where systems that predict the next token can learn world models of biology from the data, provided you build at the right scale with the right people.

    Building biology hierarchically

    The team is deliberate that each layer of biology is qualitatively different and must be built up in order. You cannot jump to cells without understanding protein interactions, and you cannot model the immune system without first understanding cells. So the approach starts with the building blocks, the proteins, and ladders upward. The advantage of a single integrated effort is the ability to gather data that connects the hierarchy: spatial transcriptomics that show where RNA localizes inside a cell, sensors that capture cell-to-cell communication, developmental imaging in zebrafish. That connective tissue is what lets the modeling generalize across levels. The interviewer, a former wet-lab biologist with a PhD, notes that the reductionist and systems camps of biology historically never worked together deeply, and that bridging them is one of the genuinely novel things about the effort.

    The ESM-based protein world model

    The launch at the center of the conversation, roughly a week old at recording, is an open system for scientific discovery in protein biology: a language-model-based world model trained on billions of protein sequences. It learns emergent representations of protein biology and predicts atomic-resolution structure at blazing speed, sitting on a Pareto-optimal frontier of speed and accuracy. They folded over 1.1 billion proteins and used mechanistic interpretability to identify features connecting them. It reaches state of the art across structure-prediction benchmarks, with particular strength on protein-protein and protein-antibody interactions that matter for therapeutics. The headline result: they used the model to design proteins and single-chain antibodies digitally, selected from hundreds of thousands of trajectories, synthesized just 96 in a single well plate, and found nanomolar binders, replacing high-throughput screens of millions of antibodies. Validation came from the Biohub’s cryo-EM structural biology center, confirming both function and the atomic-resolution binding interfaces.

    Interpretability as discovery, and personalized medicine

    Rives reframes mechanistic interpretability, usually aimed at language models, as a way to extract new biological knowledge. The protein models are trained on both known and unknown biology and develop representations that connect uncharacterized proteins to understood ones through an underlying structural grammar. Opening that black box could reveal systems in the body or mechanisms of action for treatments that the field has never mapped. Chan connects this to a personalized-medicine vision: understand an individual’s genetics and the mechanistic chain from gene variant to protein to disease, then design a bespoke intervention. She contrasts it with today’s reality of reading PubMed supplements and guessing whether you are represented in a study cohort. For some diseases, simply knowing which gene variants cause disease is already empowering. For others, the chain is understood and the missing piece is the ability to change a protein’s function, which is where designed proteins could actually cure.

    Drug development, off-target effects, and rare disease

    The interviewers press on translation, noting a typical trial runs 15 years and $1.5 billion, with only about $50 million in the molecule and preclinical work and the rest in development gated on regulation, recruitment, toxicity, and absorption failures. Chan’s hope is that comprehensive cell models predict off-target effects, like an unanticipated receptor on kidney cells causing renal toxicity, before human trials. They study systems such as inflammation and the immune system rather than chasing individual diseases. The baby KJ case at CHOP, a custom CRISPR therapeutic editing a single mutation delivered to liver cells, illustrates how careful disease and delivery selection unlocks first applications. The “Rare As One” program shows rare-disease patient groups self-organizing registries, biobanks, and trials, compressing timelines from decades to a few years, and the molecule becoming cheap flips the economics of the long tail of niche diseases.

    Open source, talent, and the five-year view

    Zuckerberg ties the open-source posture to a consistent worldview: empower individuals with tools rather than centralizing intelligence in a few institutions. He does not believe in a single super-intelligence solving all of science, and sees decentralization, the same instinct behind giving people a voice, as how progress is historically made, with biosafety as a real tradeoff to manage. On talent, the pitch is that frontier biology attached to frontier AI is work you cannot do anywhere else, and that meaningful progress needs only a dozen or two dozen strong people, not thousands. Researchers are already wiring the model into agentic systems to automate design. The next frontier is the virtual cell, modeling proteomic, genetic, and transcriptomic layers and connecting them to phenotype with enough generality to answer untrained questions. Five years out, success is a hierarchical set of world models and doing uniquely high-quality work, with Chan adding that the teams are now “arms linked,” directed and interlocked rather than merely moving in the same direction.

    Notable Quotes

    “We didn’t design a model for antibodies. We didn’t design a model to be able to bind one particular target. We just designed a model that could understand proteins.”

    Alex Rives, on protein design emerging from a general model

    “The theory isn’t that we’re going to cure the diseases. We’re not. It’s that we want to help accelerate the pace of progress for the whole scientific field.”

    Mark Zuckerberg, on why CZI builds tools rather than cures

    “My goal is to be able to treat the individual as an individual, understand the mechanisms and be able to intervene.”

    Priscilla Chan, on the vision for personalized medicine

    “It’s not just like there’s some factory somewhere that you can pay to produce the data. You actually need to invent new novel scientific approaches.”

    Mark Zuckerberg, on why frontier biology has to generate its own data

    “If we could design a protein to actually change the physiology, then we can actually cure someone.”

    Priscilla Chan, on the payoff of protein design

    “You open up the black box and you can actually understand the biology that the model is representing.”

    Alex Rives, on mechanistic interpretability as a discovery tool

    “We don’t believe in this like very centralized future where there should be a small number of institutions that basically are advancing all this stuff.”

    Mark Zuckerberg, on the open-source ethos behind Biohub

    “Before we had amazing teams moving generally in the same direction. But now we are arms linked moving together.”

    Priscilla Chan, on how the Biohub teams now operate under Alex Rives

    Watch the full conversation with Mark Zuckerberg, Priscilla Chan, and Alex Rives on the No Priors podcast here.

    Related Reading

    • CZI Biohub Network the official program page for the San Francisco, New York, and Chicago Biohubs discussed throughout.
    • EvolutionaryScale Alex Rives’s lab and the home of the ESM protein language models behind the world model in this conversation.
    • Human Cell Atlas the single-cell transcriptomics effort CZI funded that became foundational to modern cell modeling.
    • AlphaFold (Wikipedia) background on the protein-folding breakthrough referenced as an early proof that structure prediction was tractable at scale.
    • Rare As One CZI’s program supporting patient-led rare-disease research organizations described near the end of the talk.
  • Bill Gurley on Mental Models, Systems Thinking, AI Investing, Stablecoins, and the Future of Venture Capital

    Bill Gurley spent his career at Benchmark backing some of the most consequential marketplaces and network-effect businesses of the internet era, including Uber, and he is one of the few investors who pairs deep Wall Street fundamentals with a real feel for the bleeding edge. In this wide-ranging conversation on Shane Parrish’s The Knowledge Project, he lays out the mental models he keeps returning to, how systems thinking keeps you out of trouble, why the history of your field is a hidden superpower, where AI investing is headed, and how stablecoins and tokenization could quietly rewire finance. It is a masterclass in thinking clearly about complex systems while staying obsessively curious about what is happening on the edge.

    TLDW

    Gurley anchors his thinking in systems thinking and complexity theory, warning that multivariable nonlinear systems produce second and third order consequences that punish anyone who optimizes for a single metric. He argues that mastering both the deep history of your field and its newest edge is wildly differentiating, whether you are interviewing for a marketing job or breaking into venture capital. On AI he is measured: he doubts a single model eats every vertical, sees real moats in workflows and proprietary data, flags that we may be painting in the corners on training data, and explains why Chinese open source models may innovate faster because forced knowledge sharing compounds. He thinks the AI buildout looks overfunded and that circular deals both raise the odds of an eventual correction and delay it. He makes the case that the IPO process is a rigged power grab, that stablecoins and instant payments threaten Visa, Mastercard, and the entire 2 to 3 percent credit card stack, and that proxy advisors like ISS have drifted from shareholder interest into a black-box heist. He closes on the craft of storytelling and writing as thinking, the equal-partnership design of Benchmark, why venture bends toward youth, and what success means now that his dream job is behind him.

    Thoughts

    The most useful idea in this conversation is also the quietest one: most bad decisions are not bad in the moment, they are bad in the second derivative. Gurley’s dating-site story, where lengthening profiles raised engagement in the test and then quietly killed conversion months later, is the whole argument in miniature. A linear model would have shipped that change and called it a win. A systems thinker assumes the variable you optimized is connected to three others you cannot see yet, and waits to find out. That posture, refusing to get deterministic about a single metric, is the difference between a clever experiment and a durable business. It is also the most transferable thing in the episode, because it applies to product changes, hiring, policy, and your own career just as cleanly as it applies to a dating app.

    His pairing of old and new is the second idea worth stealing. Everyone in tech tells you to live on the edge, and Gurley agrees, he keeps five premium AI accounts running so he never misses a release. But he insists the edge is only half of it. Knowing the deep history of your field, the masters of marketing, the forefathers of physics, the classic cartoons that taught animation, is rare enough that it instantly creates contrast and signals genuine passion. The compounding move is to hold both at once. If you understand the legends and you actually get TikTok, you are a power player in a way that someone who only knows one end of the timeline can never be. Most people pick a side. The leverage is in refusing to.

    On AI specifically, Gurley is refreshingly unwilling to pick the consensus lane in either direction. He does not buy that one near-sentient model swallows every vertical, and his reasoning is grounded rather than vibes-based: workflows and proprietary data create real switching costs, which is why he watches the legal AI startups ingesting case law and building new databases rather than assuming everyone reverts to a general chatbot. At the same time he respects the Microsoft pattern of platforms climbing the stack and crushing the apps above them. The honest answer is that it is genuinely up for grabs, and his comfort sitting in that uncertainty is itself a model. The cheap takes are “one model to rule them all” and “it is all wrappers.” Gurley holds both possibilities and keeps testing.

    The systems lens does its best work on China. Rather than moralize, Gurley runs the mechanism: roughly ten open source models, intense domestic competition, and a culture of publishing techniques and weights so every model can learn from, train, and test every other model. His two-farmer metaphor, one market where farmers only trade goods and another where they are forced to share best practices, makes the prediction obvious. Forced knowledge sharing compounds faster than secrecy. The uncomfortable corollary he names is that American startups are quietly forking those open models all over Silicon Valley, and that incumbents may be lobbying for heavy regulation precisely because it pulls up the drawbridge against open source competition. That is the systems thinker’s signature move: follow the incentives to the consequence nobody is saying out loud.

    Finally, the money section is a clinic in spotting rent extraction. The IPO process where bankers pick both the price and the favored buyers, the 2 to 3 percent credit card toll that exists for no defensible reason while the rest of the world built instant bank transfer decades ago, and the proxy advisors who score companies in a black box and then sell you the cure, are all variations on the same pattern: an intermediary that captured a choke point and defends it through regulatory capture rather than value. Gurley’s optimism is that crypto rails, stablecoins, and tokenization may finally route around these tolls the way WeChat Pay and Alipay leapfrogged cards in China. Whether or not you agree on the timeline, the analytical habit is the takeaway. When something costs far more than it should and has for decades, ask who captured the rules, and watch the edge for whoever is about to make those rules irrelevant.

    Key Takeaways

    • Systems thinking means treating the world as multivariable nonlinear systems where one variable flipping can change the entire system’s behavior, the way weather and stock markets do.
    • The real danger is second and third derivative effects, consequences that only show up much later, long after the metric you optimized looked like a win.
    • A dating site lengthened profiles because longer profiles tested as more engaging, then discovered months later it was negative for conversion, the textbook second order trap.
    • Never get too deterministic about a single metric or single variable, and always know what is actually important and what sits on top.
    • Gurley built his foundation on the canon: Peter Lynch’s One Up on Wall Street, A Random Walk Down Wall Street, the Buffett letters, Ben Graham, and Howard Marks.
    • A firm grasp of the financial bedrock is what lets you innovate on top of it, and many Silicon Valley VCs would benefit from understanding finance better.
    • Bill Miller reframed value investing as buying an asset that is underpriced relative to what you think it will be worth in the future, which is how he justified holding Amazon for its network effects.
    • Wall Street is the buyer of the product that venture capitalists create, so even at the two-people-in-a-PowerPoint stage you should ask whether the eventual public market will be excited by it.
    • Trajectory matters more than the starting place, because the trajectory is where the company actually ends up.
    • Knowing the deep history of your field is remarkably differentiating, and tedium while learning it is a signal you are in the wrong lane.
    • John Lasseter served Gurley a ten-course meal where each course was tied to a classic cartoon essential to understanding animation, a display of mastery over the history of the craft.
    • Magnus Carlsen won a trivia contest on the history of chess, and Picasso was a wildly successful realist painter by 14, both proof that the greats master the fundamentals first.
    • Obsessive, constant learning is the trait Gurley sees most in great entrepreneurs, because disruption always happens on a moving edge they need to understand at the top one percentile.
    • The compounding advantage is mastering both the old history and the new edge at once, the way understanding both marketing legends and TikTok would set you apart in any interview.
    • Most people underestimate how much AI can do, so push more of the downstream work into the prompt: identify the top ten, list pros and cons, rank them on one dimension, then another, and add up the numbers too.
    • Gurley uses ChatGPT for project structure and memory, Gemini for restaurant research powered by Google review data, and notes that coders swear by Claude while some prefer Perplexity for finance.
    • He doubts one model dominates everything; verticals like coding already let users swap models, and price optimization will push more swapping over the next few years.
    • Heavy, expensive regulation could ironically create oligopoly, and some players may be quietly begging for regulation because it pulls up the bridge against Chinese open source models.
    • China’s roughly ten open source models compete intensely and share weights and techniques, creating a system that can innovate faster, like farmers forced to share best practices instead of just trading goods.
    • A quiet secret is that startups all over Silicon Valley are forking those Chinese open source models at real volume.
    • Gurley comes down against the idea that one near-sentient model removes the need for vertical models; workflows and proprietary data, like legal startups ingesting all the case law, create durable moats.
    • We may be running out of training data, painting in the corners, which is why one of the most powerful improvements is hiring experts at thousands of dollars an hour to fine-tune the models.
    • Yann LeCun’s view is that the next leap is broader than LLMs, since language-based models hit an asymptote and are weak at math and numbers.
    • AlphaGo’s shocking move proves models can innovate beyond their training, but it lived in a constrained game; the real world has infinite paths a computer cannot exhaustively search.
    • Gurley’s non-consensus view is skepticism of the China vilification mindset, noting the US is only 3 to 5 percent of the global population and wondering how the other 95 percent hears American exceptionalism.
    • The AI buildout looks overfunded: the Magnificent Seven took free cash flow from 50 to 100 billion a year down toward zero by pouring it into capex.
    • The venture community has become more risk-seeking because it now deeply believes in increasing returns and power laws, and the pre-profit losses keep scaling, from Amazon’s 2 to 3 billion to Uber’s 15 billion to far more now.
    • Circular deals, where a cloud provider funds a model company that spends the money right back on its services, inflate growth, which both raises the probability of an eventual correction and extends the time before one hits.
    • Burn rate is a measure of risk; ten years ago a million a month was scary, now companies burn five billion a year and cannot really know their unit economics.
    • Tokenization without financial-disclosure regulation invites speculation and manipulation, which is part of why companies like Stripe stay private and negotiate liquidity prices with trusted investors.
    • The IPO process is unfair because bankers pick both the price and the shareholders; a freshman would simply match supply and demand anonymously in an auction, the way direct listings and ICOs do.
    • Stablecoins threaten the 2 to 3 percent credit card stack; USDC holds dollar-for-dollar Treasuries and rides fast global crypto rails, while US transfers still suffer three-day ACH settlement and 25 dollar wires.
    • The rest of the world built instant transfer long ago, from UK Faster Payments 20 years ago to Argentina’s PIX-style system reaching 60 to 70 percent of transactions, while US bank regulatory capture stalled Fed Now.
    • Visa and Mastercard run roughly 60 percent operating margins as a bank-created duopoly, and China leapfrogged them entirely with WeChat Pay and Alipay QR-code wallets.
    • Moody’s power is being the trusted standard, the watermark, so AI on the back end does not displace it; ISS and proxy advisors, by contrast, score companies in a black box and get paid on both sides.
    • Proxy advisors drifted from shareholder interest into a fraud-and-risk-mitigation mindset, which is why they reflexively opposed the Tesla pay package that only paid out if the stock soared.
    • The rise of passive index funds concentrated voting power in firms that lack time to evaluate votes; it would be healthier if they abstained or voted in proportion to active holders.
    • Storytelling is one of the top founder traits, because founders are recruiting, raising money, and closing customers and partners constantly, selling all the time.
    • Writing is thinking: Bezos’s six-page memo forces you to find the loose ends and tie them up, and a public blog becomes a calling card that magnetizes founders and deal flow.
    • Other founder unfair advantages are product instincts, which fewer than 5 percent of non-product people ever truly learn, and sheer determination, Bezos’s single angel-investing test of whether someone will do it no matter what.
    • Uber had no HBS case study to lean on; its winner-take-all network effects forced mega burn rates with no precedent and no mentor to call, a situation every AI company now faces.
    • Benchmark’s equal partnership, with no king, president, or lead and five equal partners, makes recruiting easy, kills comp politics, and aligns everyone, at the cost of being hard to scale or run new initiatives.
    • Venture bends toward youth because young investors can match founders’ age, master a fresh niche faster, and have the free time to study something 80 hours a week.
    • Gurley defines current success through Arthur Brooks’s From Strength to Strength, hoping to apply his synthesizing and writing skills to bigger societal problems and dent the universe a little.

    Detailed Summary

    Systems Thinking and Second Order Effects

    Gurley opens with the mental model he keeps returning to: systems thinking, shaped by Donella Meadows’s Thinking in Systems and his board seat at the Santa Fe Institute, which studies complexity theory. He describes complex systems as multivariable nonlinear systems that are very hard to predict, capable of behaving one way for a long time until a single variable flips and the whole system behaves differently, like weather or stock markets. The practical payoff is staying out of trouble by anticipating first, second, and third derivative consequences. His clearest example is a large dating site that lengthened user profiles because the test showed more engagement, only to learn many months later that knowing more at that stage was negative for conversion. The lesson is to never get too deterministic about a single metric and to keep the whole system in view, because a change here can ripple to there in ways you only discover much later.

    Learning the Craft of Investing

    Because he started on Wall Street rather than in venture, Gurley absorbed the investing canon first: Peter Lynch’s One Up on Wall Street, A Random Walk Down Wall Street, the Buffett letters, Ben Graham, and Howard Marks, people who spent careers assembling and publishing their thinking. That financial bedrock, he argues, is exactly what lets you innovate on top of it. His friend Michael Mauboussin introduced him to Bill Miller, the Legg Mason manager who beat the S&P for 15 straight years and was Amazon’s largest shareholder for a long stretch. Miller reframed value investing as buying an asset underpriced relative to its future worth, which combined with a belief in network effects justified holding a company that could grow at an unreasonable rate for years. Gurley also frames Wall Street as the buyer of the product venture capitalists create through eventual M&A or IPO, so founders should think early about whether the public market will be excited by what they are building, since trajectory matters more than the starting place.

    Mastering Both the History and the Edge

    Gurley makes an unusually strong case for studying the deep history of your field. He recounts a dinner with Pixar’s John Lasseter, who served a ten-course meal where every course was tied to a classic cartoon he considered essential to understanding animation, and notes that Magnus Carlsen won a chess-history trivia contest and Picasso was a master realist by 14. In a world that skims for the executive summary, walking into a marketing interview with command of the masters of marketing is wildly differentiating and signals genuine passion; if learning that history feels tedious, you are probably in the wrong lane. The counterpart trait he sees in great entrepreneurs is obsessive learning on the moving edge, where disruption actually happens. Gurley keeps five premium AI accounts so he never misses something. The real power player holds both at once, the legends and the newest thing, the way a candidate who knows the marketing greats and truly gets TikTok stands out completely.

    Using AI Well and the Model Wars

    People underestimate how much AI can do, Gurley says, so you should build more of the downstream work into the prompt: instead of asking for the top ten and studying them yourself, ask it to list pros and cons, rank on one dimension, rank again on another, and add up the numbers too. He uses ChatGPT for its project structure and memory, leans on Gemini for restaurant research because it carries Google review data, and notes coders swear by Claude while some prefer Perplexity for finance. On whether one model dominates or models become niche commodities, he points to coding, the largest vertical, where tools like Cursor already let users swap models, and predicts price optimization will drive more swapping. The counterforce is regulation: if it gets expensive and mundane it could create oligopoly, and some players may be quietly begging for it because it pulls up the bridge against Chinese open source models.

    China, Open Source, and the Systems Advantage

    Asked to apply systems thinking to China, Gurley describes roughly ten open source models locked in intense domestic competition, all learning from one another because the ecosystem chose openness, with models able to train and test other models and teams publishing the techniques behind their breakthroughs. His metaphor: two agricultural societies, one where farmers only trade goods at market and another where they are forced to share best practices; the second evolves far faster. The result is a system capable of innovating faster than the more secretive Western approach. The quiet secret he names is that startups all over Silicon Valley are forking those open models at real volume, and a key open question is whether regulation tries to stomp that out. He extends this into a broader non-consensus discomfort with the vilification of China common in Washington and parts of Silicon Valley, observing that the US is only a few percent of the global population.

    AI Investing, Moats, and the Limits of Models

    On how AI changes investing and whether a startup is just a wrapper, Gurley calls it up for grabs but lands on the side of durable verticals. If models become near-sentient, one model does everything; he doubts that, pointing to workflows and data moats, like the several legal AI startups ingesting all the case law and building new databases that customers will not simply swap for a general chatbot. He balances this against the Microsoft pattern of platforms climbing the stack past Lotus 1-2-3 and WordPerfect. He also flags scaling limits: we may be running out of data, painting in the corners, which is why one of the most powerful improvements is paying experts thousands of dollars an hour to fine-tune models, though human knowledge has an edge. He invokes Yann LeCun’s argument that the next leap is broader than language-based LLMs, which hit an asymptote and struggle with math, and the AlphaGo debate, where a shocking innovative move proves creativity within a constrained game but says little about the infinite paths of the real world. He notes AlphaGo and Tesla’s FSD are constrained, non-LLM systems.

    Is the Buildout Overfunded

    Gurley admits he is shocked by the scale of money, noting the Magnificent Seven drove free cash flow from 50 to 100 billion a year down toward zero by spending it all on capex, something he would not have believed five years ago. He traces it to the venture community’s growing conviction in increasing returns and power laws, where proven companies grow far beyond expectations, which makes investors more willing to take risk on the come. The losses before turning cash-flow positive keep scaling, from Amazon’s 2 to 3 billion to Uber’s roughly 15 billion to far larger now. On corrections, he recalls the dot-com crash producing a three to four year nuclear winter before Amazon climbed back, and explains that circular deals, where a cloud provider funds a model company that spends it right back on its services, inflate growth and therefore both raise the probability of a correction and extend the runway before one arrives. Burn rate, he stresses, is a measure of risk, and at five billion a year it is nearly impossible to know your unit economics.

    Tokenization, the IPO Heist, and Going Public

    There is no shortage of capital, so funding is not the bottleneck; the risk with tokenization is that, absent disclosure regulation, it invites speculation and manipulation, as seen in retail-loved names like GameStop and Palantir. Tokenizing a private company like Stripe could create the wild price swings companies stay private to avoid, since private liquidity events let them negotiate a price with trusted investors rather than expose the constantly moving underlying value, and Robinhood’s tokenization plans already drew legal pushback. Gurley reserves his sharpest critique for the IPO process, calling it insanely unfair because bankers pick both the price and the favored shareholders. A freshman computer science and finance student would simply match supply and demand anonymously in an auction, the way an ICO or a direct listing does, but Wall Street will not let go of the greedy power grab and reverted to a controlled oligopoly after direct listings were available.

    Stablecoins Versus the Payment Cartel

    Gurley argues stablecoins could be deeply disruptive to credit cards. Most of the developed world built instant bank-to-bank transfer long ago, from UK Faster Payments 20 years ago to Argentina’s PIX-style system that quickly hit 60 to 70 percent of transactions, while US bank regulatory capture stalled Fed Now and left an ecosystem living under 2 to 2.5 percent card fees. A USDC stablecoin holds dollar-for-dollar US Treasuries and rides proven, fast, global crypto rails, letting anyone move a dollar in seconds for pennies, against the backdrop of three-day ACH settlement and 25 dollar wires. He sees Visa and Mastercard, a bank-created duopoly with roughly 60 percent operating margins, as heavily threatened, and points to China, where WeChat Pay and Alipay built ubiquitous QR-code wallets that leapfrogged the entire card system, all because the government made money transfer easy.

    Moody’s, Proxy Advisors, and Index Funds

    Moody’s power, Gurley explains, comes from being a trusted standard, the watermark, so even AI on the back end does not displace it. Proxy advisors like ISS are a different story: they score companies in a black box, refuse to reveal the criteria, and then get paid by the same companies that want to learn how to score better, which he calls more of a heist than a service. They drifted from a shareholder-interest mandate into a corporate-governance, fraud-mitigation posture obsessed with rules, which is why they reflexively opposed the Tesla pay package that only paid Elon Musk if the stock soared, a deal Gurley says he would sign for every company he has worked with. The rise of passive index funds compounds the problem, concentrating voting power in firms without time to evaluate votes; he would prefer they abstain or vote in proportion to active holders, since closet indexing during the MAG 7 run already distorted active management.

    Storytelling, Writing, and Founder Advantages

    Gurley fell in love with the craft of writing in business school, moving from business books to personal development titles like Dale Carnegie and Seven Habits, then biographies, then long-form narrative nonfiction by Malcolm Gladwell, Michael Lewis, and Jon Krakauer, the New Journalism that reads like fiction. Writing forces clarity: he cites Bezos’s six-page memo as a tool that makes you think through corner cases and tie up loose ends, and notes that codifying his marketplace knowledge and publishing it turned his blog into a calling card that magnetized founders and deal flow. He lists the top founder traits as storytelling, product instincts, understanding the edge, and determination. Storytelling matters because founders are constantly recruiting, fundraising, and closing customers and partners. Product instinct is nearly unteachable, present in well under 5 percent of non-product hires. And determination is Bezos’s single angel-investing test: will this person do it no matter what, come hell or high water.

    Uber, Benchmark, and the Shape of Venture

    The Uber lesson with no HBS case study was that a winner-take-all category with network effects demanded funding ad nauseam, producing burn rates bigger than any public company would dare, with no precedent and no mentor to call, exactly the situation AI companies now face, only with a zero added. Gurley credits Benchmark’s design, an equal partnership with no king, president, or lead and five equal partners, for making it easy to recruit top talent, encouraging senior partners to develop newcomers since everyone shares the upside, and eliminating annual comp politics. The downside is that without a CEO it is hard to scale or run new initiatives, famously captured by the firm settling on a single splash-page website. Founders choose a VC for reputation and network effects, the stamp of approval that carries weight, and young investors can break in because they often match founders’ age and can outwork everyone to master a fresh niche like esports or YouTube, which is why the industry bends toward youth. Asked what success means now, Gurley says his venture career was a dream job he would have done for free, but it is done; inspired by Arthur Brooks’s From Strength to Strength, he wants to apply his synthesizing and writing to bigger societal problems and dent the universe a little.

    Notable Quotes

    “We do live in a world where information is really cut up, but we also live in a world where you can have access to more information than you ever could.”

    Bill Gurley, on why the abundance of knowledge rewards the curious

    “You got to be really conscious of the consequence and not get too deterministic about a single metric or a single variable.”

    Bill Gurley, on the discipline of systems thinking

    “Value just means that the asset is underpriced relative to what you think it will be worth in the future.”

    Bill Gurley, relaying Bill Miller’s reframing of value investing

    “I’ve always thought of Wall Street as the buyer of the product that venture capitalists create.”

    Bill Gurley, on why founders should think about the public market early

    “One society, when the farmers come to market, they just sell each other goods and then they go back. The other society, when the farmers come to market, they’re forced to share best practices. Which one is going to evolve faster?”

    Bill Gurley, on why open source models can out-innovate

    “If you took a freshman computer science student and a freshman finance student and said imagine how a company should go public, they would match supply and demand anonymously like you would in any auction.”

    Bill Gurley, on the rigged IPO process

    “When I meet an entrepreneur, there’s only one thing I ask myself. Is this person gonna do this no matter what? Come hell or high water, they’re doing this.”

    Bill Gurley, quoting Jeff Bezos on his single test for angel investing

    “You’re recruiting employees, you’re recruiting executives, you’re raising money, you’re closing customers, you’re closing partnerships. You’re selling all the damn time.”

    Bill Gurley, on why storytelling is a top founder trait

    “I often said that if we lived in a socialist society and everyone had to work for free, I would still take that job.”

    Bill Gurley, on loving his venture career

    “I would like to see if I can apply those techniques to bigger, broader problems in society and dent the universe a little bit that way.”

    Bill Gurley, on what success looks like in his next chapter

    Watch the full conversation with Bill Gurley on The Knowledge Project here.

    Related Reading

  • Benedict Evans on the Economics of AI Usage, Why Foundation Models May Become Commodities, and What Comes Next for SaaS

    Benedict Evans returns to the a16z podcast to update the thesis behind his widely read “AI eats the world” presentation, and the picture he paints is less about hype and more about hard economics. In this conversation he works through what has actually played out in the last year, why agentic coding became the one use case with real product market fit, and why he keeps arguing that foundation models may end up as commodities while the value moves somewhere else entirely. You can watch the full conversation here.

    TLDW

    Benedict Evans argues that the AI moment looks a lot like the early internet, the early PC era, and the rollout of mobile data, which means it is exciting, genuinely transformative, and almost impossible to predict use case by use case. Agentic coding is the only field with clear product market fit right now, with revenue run rates exploding from roughly nine billion to forty seven billion, while consumers still use chatbots weekly rather than daily. His central claim is that foundation models show no obvious network effect or sustainable differentiation, the chatbot is a limited v1 interface, and the model labs cannot build every application, so the value will likely move up the stack the way it did with chips, ISPs, and mobile networks rather than staying with the model providers. He covers the brutal supply and demand disequilibrium driving today’s token pricing and ten thousand dollar surprise bills, the financial gravity problem of hyperscalers spending over half their revenue on capex, the Jevons paradox and consumer surplus that may compete away productivity gains, the way the important questions move out of San Francisco and into industries like law, consulting, finance, and advertising, and the distinction between automating tasks and changing jobs. His closing image is an IBM ad from the 1950s promising “150 extra engineers,” a reminder that every platform shift feels unprecedented and that in twenty years we will simply say of course computers do that.

    Thoughts

    The most useful thing Evans does here is refuse to collapse uncertainty into a clean prediction, and then explain exactly why that refusal is the correct posture rather than a cop out. He distinguishes between the parts where he will commit to a view, that foundation models are probably not a product and the chatbot is probably not the right interface, and the parts where there are simply too many open paths to call. That discipline is rare in AI commentary, where the incentive is to sound certain. The commodity argument is not “models are worthless.” It is a chain of reasoning: there is no visible network effect, no durable differentiation beyond willingness to spend, no lock in comparable to Windows or iOS, and a likely structure of three to six well funded competitors plus open source and edge models all selling the same thing. Ask where price discipline comes from in that picture and the honest answer is that it probably does not, which is how you get a commodity even when demand is effectively infinite.

    The mobile data analogy is the load bearing comparison and it deserves to be taken seriously. Mobile data traffic rose something like fifteen hundred to two thousand times over fifteen years, the networks built an extraordinary piece of global infrastructure, everyone came to depend on it, and yet the operators captured almost none of the value because all the interesting stuff got built on top by someone else. Telco stocks were flat for two decades. If that is the template, then the trillion dollars of capex flowing into AI infrastructure can be both a worthwhile investment and a terrible place to expect outsized equity returns, because building the road is not the same as owning the traffic. The counterpoint Evans keeps fairly on the table is the operating system path, where Windows and iOS did capture value, but he notes they had levers and network effects that LLMs do not appear to have.

    His framing of where the questions live is the part most people in tech underweight. Once a technology works, the interesting questions stop being technology questions. Netflix is not a tech company in the sense that matters, because its real decisions are Los Angeles decisions about shows, talent, and sports, not San Francisco decisions about infrastructure. By the same logic, what AI means for a law firm is mostly a question for people who understand what associates actually do and what clients are actually paying for, not for model researchers. This is why the “the model will just do the whole thing” story keeps running aground. Most valuable software does not solve a problem the customer already knew they had. It often takes years to convince an industry that a problem even exists, and an LLM prompt does not surface latent problems that no one has articulated.

    The economic plumbing he describes is where the near term risk actually sits. We are in extreme disequilibrium, where twenty dollars a month can buy ten thousand dollars of tokens on one side and a weekend of experimentation can produce a ten thousand dollar bill on the other, exactly the pattern mobile data went through around 2009 and 2010. That gets resolved with the boring machinery of caps, throttling, and pricing tiers, not with magic. Layered on top is the financial gravity problem: Microsoft, Meta, and Google heading toward spending more than half of revenue on capex, with roughly seven hundred billion dollars of guidance across the big players, against a hard ceiling because there is not ten trillion dollars a year available to spend. And even when the productivity gains are real, the Jevons paradox and consumer surplus suggest much of the benefit gets competed away. If a discounted cash flow model used to take a week and now takes ten seconds, you do fifty of them and charge the client the same, which is great for clients and unremarkable for margins.

    The honest takeaway for builders is that the answer to “what does this do to software” is more software, probably one or two orders of magnitude more, just as SaaS itself produced an explosion rather than a consolidation. The SaaS apocalypse is real in the sense that some meaningful percentage of existing companies get wiped out, and unknowable in the sense that no one can yet say which ones, which is why thoughtful investors are reluctant to be long software in the dark. For anyone pursuing a more deliberate, purposeful relationship with technology, the closing note is the one to keep: every one of these shifts felt singular and world ending and world making at the time, it reshaped work and put people out of jobs and created things we love, and then it quietly became invisible. The goal is to stay clear eyed about which of those buckets a given change lands in rather than getting swept up in the noise of what someone said at a party yesterday.

    Key Takeaways

    • Agentic coding shifted from “kind of useful” to “really changing everything” at the start of the year, and it is the single field with unambiguous product market fit, where customers are pulling it out of your hands.
    • Coding working first was foreseeable in hindsight: software developers were the ones messing with the tools, and the first thing people do with a new kind of computer is build more computing, just as the first thing people did with PCs was make computers.
    • Anthropic, with less capital raised, chose to focus on coding and got it working, while OpenAI cycled through a more everything all at once strategy before narrowing in.
    • The intense focus on coding comes bundled with a supply crunch, a capacity crunch, and a price and capex imbalance that defines the current moment.
    • Most of the fundamental questions from two or three years ago still have no answers: whether there will be a winner in models, whether models capture value up the stack, how much they can do, and whether consumers will use this daily rather than weekly.
    • There is a wide gap between Valley insiders running clusters of Mac Studios all day and the roughly forty percent of people who say AI is “kind of useful, I used it last week for something.”
    • Outside tech, companies are adopting AI as one at a time point solutions for specific back office processes, like a commodities company using LLMs for better cash flow forecasting, not as a general purpose assistant.
    • Adoption always compounds on prior platforms: you could not have nine hundred million weekly active users in the Netscape era because there were not nine hundred million PCs on the planet.
    • Early in any platform shift almost nothing works smoothly, from sound cards and floppy disks with TCP/IP to computers that froze and lost your work, and AI is at that stage now.
    • Today’s token pricing crunch mirrors the mobile data shock of 2009 to 2010, where flat rate plans collided with surging usage and networks had to realign price with marginal cost through caps, fair use, and throttling.
    • Mobile data traffic rose roughly fifteen hundred to two thousand times in fifteen years, mobile networks earn around a trillion dollars and spend about two hundred billion a year on capex, yet their stocks have been flat for twenty years because all the value moved up the stack.
    • The central LLM question is whether the model can do the whole thing or whether you need hundreds of applications built on top, the same way you needed apps on Windows and iOS.
    • Evans sees no network effect and no sustainable differentiation between models beyond willingness to spend money, which points toward commodity infrastructure sold near marginal cost.
    • Chip companies, ISPs, and mobile operators did not capture the value; Windows and iOS did, but only because they had levers to move up the stack and real network effects, which models lack.
    • A useful comparison is semiconductors, where each generation gets more expensive and the field narrows to fewer players, suggesting three to six frontier model makers spending somewhere between two hundred billion and two trillion dollars a year.
    • Enterprises do not standardize on a model the way they once thought about AWS; the cloud and the model get abstracted away, so customers do not even know which one their SaaS product runs on.
    • Demand for tokens being effectively infinite does not prevent a price equilibrium, exactly as infinite demand for mobile bits still produced murderous price wars between commodity carriers.
    • History teaches that something will happen but rarely what; the smartest people in tech wrongly predicted Android would crush the iPhone on open versus closed grounds.
    • One characteristic of tech is that the moment you understand how something works is the moment to move on, which is why Evans stopped updating his Apple spreadsheet years ago.
    • The people who are good at using a tool are usually not the people who are good at designing what the tool should be, which is why model labs cannot build every skill or vertical application.
    • Claude skills and similar templates resemble file new in Excel: useful starting points that users eventually outgrow, raising the question of who builds the real software.
    • The questions increasingly move out of technology and into specific industries; what AI means for law, consulting, advertising, or accounting is partly an AI question and partly a deep domain question.
    • Netflix is not a tech company in the way that matters, because its real questions are media industry questions about shows, talent, and sports, not infrastructure; the same logic now applies across industries facing AI.
    • AI differs from prior platform shifts because the physical limits are unknown; in 1995 you knew PCs cost three thousand dollars and broadband could not reach everyone overnight, but no one knows how cheap, fast, or capable models will get.
    • Evans offers four buttons to press on any use case: is it just price elasticity and the Jevons paradox, does it remove a cost barrier to entry, does it unlock a new business model, or does it make something previously impossible now possible like trains over horses or Spotify over CDs.
    • Advertising and e-commerce are a standout opportunity because today’s systems know a SKU and a metadata field but not what a product actually is or why people buy it, and LLMs could change that level of understanding.
    • The valuable shift is not doing the old thing more, like more spreadsheets or better email, but doing genuinely new things, such as asking an LLM how to change prices to improve churn using all your call recordings, CRM flows, and product telemetry.
    • Enterprise software today splits into three buckets: big horizontal systems like SAP and Workday, three to four hundred vertical SaaS apps plus a thousand internal apps, and a fuzzy improvised middle of Excel, email, and shared files, with AI arriving as a new option across all three.
    • A core design tension is where to put the probabilistic software that can make mistakes versus the deterministic database that cannot, and whether the LLM sits at the top or the bottom of the stack; the answer is probably both depending on the task.
    • The net effect on software is way more software, since SaaS itself produced one to two orders of magnitude more software and all software companies exist to solve problems created by other software companies.
    • The SaaS apocalypse is real but unknowable: some percentage of SaaS companies get wiped out, but no one knows which, so you should not derate the whole sector fifty percent and many investors are wary of being long software for now.
    • Much of what an organization does is implicit, undocumented, and not in the training data, which is exactly the value McKinsey, Bain, and BCG provide by getting license to map how a company really works.
    • The real decisions are usually exception handling: the question is always what you cannot automate and what still requires human judgment about cases that were never written down.
    • Distinguish tasks from jobs: accountants spend almost none of their time the way they did fifty years ago, yet to the client the job looks the same.
    • LLMs excel where you want the average, the answer anyone would give, and struggle where you specifically do not want the average and cannot fully explain why you did it differently.
    • There is a financial gravity ceiling: Microsoft, Meta, and Google are on track to spend over fifty percent of revenue on capex versus fifteen to twenty percent for capital intensive telecoms, with seven hundred billion in guidance this year and no path to ten trillion.
    • Hyperscalers face an existential FOMO trap: returns look positive now, but they cannot let rivals build the future of compute without participating, even as the CFO asks how much participation is enough.
    • Token maxing will face a reckoning as the disequilibrium resolves, but measuring ROI is hard because most reported benefits so far, like better analytics, support, and productivity, are tough to put a financial value on.
    • Consumer surplus means many gains get competed away: if analysis that took a week now takes a day, you do five times more analysis and charge the same, the way investment banks did with spreadsheets.
    • Evans closes with a 1950s IBM ad promising “150 extra engineers,” a reminder that every fundamental technology change feels unprecedented, and that in twenty years AI will simply be invisible magic we take for granted.

    Detailed Summary

    What changed in the last year

    Evans frames the past year as a narrowing of focus. A year and a half after the first version of his presentation, the field has developed a much clearer sense of diverging product strategies and competitive tension that goes beyond simply building a bigger model with more compute. The dominant shift is that agentic coding started genuinely working, and the entire industry narrowed in on it because it has absolute product market fit, the kind where customers pull the product out of your hands. That success arrives alongside the supply crunch, capacity constraints, and price imbalance that now define the moment. At the same time, the charts keep climbing, models keep getting bigger, capex keeps growing, and usage keeps growing, while the deep questions from a few years ago remain unanswered.

    Why coding worked first

    That coding led was predictable at a naive level: the people experimenting with the tools were software developers, and they naturally tried to make software development work. Evans compares the moment to the internet around 1997 and 1998, and also to PCs in the late seventies and early eighties, when the technology was exciting but it was not clear what it was for and it did not quite work yet. The first thing people did with PCs was make computers, and since LLMs are in a sense computers, the first thing people are doing with them is making more compute. What was harder to foresee was the precise timing of the shift, the moment when agentic coding flipped from useful to transformative at the start of this year.

    Jobs, juniors, and what we have not learned

    On the question of what this means for engineers and team structure, Evans is blunt that we have learned almost nothing yet, because this did not even work six months ago and everyone is scrambling to interpret it. The pricing crunch alone means it will take a couple of years to settle. The newly concrete questions include whether you still hire junior people and what they would do, and why you were hiring juniors in the first place, whether to do the work itself or to develop people. Because software development now genuinely automates a class of work that used to be done by people, those questions have moved from theoretical to real, but no one can responsibly claim to know what a software team or a software career looks like in three years.

    OpenAI, Anthropic, and the strategy split

    Evans dryly notes the drama around the model labs, including the disruption of a senior leadership medical leave at OpenAI. In the latter part of last year, OpenAI’s question was essentially what to build on top of the models, an everything all at once approach that looked almost like asking the model for fifteen ideas and then doing all of them. Anthropic, with less capital raised, instead committed to coding and got it working, whether by deliberate strategy or by stumbling into it. The result is that software development plus a few other fields are where things genuinely work, surrounded by a large population of people excited around the edges and corporations quietly automating specific back office processes. He cites a commodities company that wants LLMs for better cash flow forecasting across many small producers, a very different thing from asking a chatbot to summarize your meetings.

    The mobile data analogy and value capture

    The richest section is the comparison to mobile. Adoption always compounds on prior platforms, so AI inherits a far larger installed base than the internet or mobile did at their starts. Early on, nothing works smoothly, and Evans recalls the era of buying a three hundred dollar sound card or wrestling a floppy disk of TCP/IP into a machine. The pricing dynamics directly echo mobile data around 2009 and 2010, when flat rate plans met exploding usage and ten thousand dollar bills, forcing networks to realign price with marginal cost. Crucially, mobile data traffic then rose fifteen hundred to two thousand times, the networks built extraordinary global infrastructure with around a trillion dollars of revenue and two hundred billion in annual capex, and yet their stocks stayed flat for twenty years because all the cool stuff and all the value got built and captured by someone else higher up the stack. Chip companies, ISPs, and mobile operators did not capture value; Windows and iOS did, but they had levers and network effects that models do not appear to share.

    The case that models become commodities

    Evans lays out the building blocks of his commodity thesis. First, there is no clear way to build a model that is sustainably and fundamentally better than everyone else’s, with no visible network effect and no strategic lever comparable to what Instagram, YouTube, or Google search enjoy. Differences in emphasis and taste exist, but not durable competitive moats beyond spending. Second, the chatbot is a weird, limited v1 interface that works well for some tasks and people but requires tooling, the right data, configuration, control, and thoughtful design for most real jobs, and the people good at a job are rarely the people good at designing the tool for it. Third, the labs cannot build every application any more than Microsoft or Apple could build every Windows or iPhone app. Enterprises do not standardize on a model the way they never standardized on a visible cloud provider, because it gets abstracted away. Taken together, that points to low level infrastructure sold by perhaps half a dozen competitors plus open source and edge, with no obvious source of price discipline, which is the definition of a commodity even when demand is infinite.

    The questions move out of technology

    One of the next big questions is when models become good enough that you no longer need the largest, fastest, most expensive model, and can use an older model, an open source model, or one running on device where compute is effectively free to the developer. But the deeper shift is that the important questions move out of technology and into industries. Drawing on his own essays “content isn’t king” and “Netflix isn’t a tech company,” Evans argues that Netflix’s real decisions are Los Angeles media questions, not San Francisco infrastructure questions, and San Francisco does not even know what the right questions are. By the same logic, what AI means for a law firm is mostly a question for people who understand law firms, what generative video means for Hollywood is a question Ben Affleck can answer better than he can, and the questions become half AI and half something else.

    Four buttons and the new things AI unlocks

    To reason about impact, Evans offers four buttons. Is a use case just price elasticity, the Jevons paradox of doing the same thing for less or more for the same money. Does it remove a cost that was a barrier to entry, like a newspaper’s printing press. Does it unlock something in your business model. Or does it make something previously impossible now possible, the way steam engines made trains possible regardless of how many horses you bought, or Spotify turned fifteen dollars a month into all the music there is. He stresses that the same broad change can mean wildly different things by industry, just as the internet devastated newspapers but barely touched movie studios. His favorite tractable example is advertising and e-commerce, a trillion dollar advertising market against twenty five trillion in retail, where today’s systems know a SKU and a metadata field and that people who bought one thing bought another, but do not know what a product is or why people buy it. An LLM could in principle understand the product, recommend ten coats at different prices with pros and cons, or look at your Instagram and suggest a winter coat that changes your look but not too much, which would have been science fiction three years ago.

    More software, the SaaS apocalypse, and tasks versus jobs

    For software specifically, Evans expects more competition, cheaper and quicker building, and new categories that were impossible before, all under an uncertain new margin structure where outcome based pricing is hard because most software work cannot be tied cleanly to profit and loss. He frames enterprise software as three buckets, big horizontal systems, hundreds of vertical and internal apps, and a fuzzy improvised middle of Excel and email, with AI arriving as another option across all of them. The deeper design tension is where to place probabilistic software that can make mistakes versus deterministic systems that cannot, and whether the LLM sits at the top or bottom of the stack, with the answer being both depending on the task. The net result is way more software, since SaaS itself produced orders of magnitude more software and software exists to solve problems created by other software. That fuels the SaaS apocalypse anxiety: some companies clearly get wiped out, but since no one knows which, you should not derate the whole sector, even as many investors stay cautious about being long software.

    Implicit knowledge, exception handling, and where the average fails

    Much of what organizations do is implicit, undocumented, and absent from any training data, which is precisely the value of strategy consultancies that get license to map how a company really works versus how it is supposed to work. The real decisions tend to be exception handling, the cases that require human judgment because they were never written down or do not look like before. Evans separates tasks from jobs, noting accountants do almost nothing the way they did fifty years ago while the client still buys the same thing. And he offers a sharp test: LLMs are excellent where you want the average, the answer anyone would give, and weak where you specifically do not want the average and cannot fully articulate why you did it differently.

    Capex, financial gravity, and the ROI question

    On spending, Evans describes a financial gravity problem. Microsoft, Meta, and Google are on line to spend over half their revenue on capex this year, against fifteen to twenty percent for capital intensive telecoms, with roughly seven hundred billion in guidance across the big players, a sum comparable to all of telecom or oil and gas. They cannot sustainably leap to one and a half trillion next year because the money is not there, so the curve must eventually taper. The hyperscalers are caught in an existential FOMO trap: returns look positive now, but they cannot sit out what might be the future of compute without risking becoming the next stranded incumbent, even as the CFO asks how much is enough. On token maxing, he expects a reckoning as the disequilibrium resolves, but measuring ROI is genuinely hard because most reported benefits so far are soft and hard to value, and consumer surplus means much of the gain gets competed away, the way faster spreadsheets simply meant more analysis at the same price.

    Closing image

    Evans ends with an IBM advertisement from the early 1950s showing a sea of engineers holding slide rules, with the tagline that an IBM electronic calculator gives you 150 extra engineers, exactly the pitch behind countless modern startup decks. We move through these fundamental technology waves every ten or fifteen or twenty years, each one feeling completely unlike anything before, and AI is amazing and transformative in the same way mobile, the internet, and PCs were. The base case is that it will produce wonderful things, ruin some livelihoods, put people out of work, and eventually become invisible. His one line description of where it all ends up is that it will be magic, and in twenty years we will simply say of course computers do that, the way an hour of crash free streaming HD video over Wi-Fi already feels unremarkable.

    Notable Quotes

    “Agentic coding went from being kind of useful to really changing everything.”

    Benedict Evans, on the pivotal shift at the start of the year

    “We are in this extreme scarcity. We can’t spend $10 trillion a year on AI infrastructure cuz there isn’t $10 trillion a year there to spend on it.”

    Benedict Evans, on the hard ceiling of AI capex

    “I don’t think foundation models are a product. I don’t think a chatbot is a product. I think the value will be further up.”

    Benedict Evans, stating the core of his thesis

    “They built this amazing piece of global incredibly sophisticated very expensive global infrastructure with enormous growth in use, and they didn’t make any money from it because all the value moved up stack.”

    Benedict Evans, on the mobile network analogy

    “The moment that you understand something and you know how it works and what’s going to happen is the moment you should move on to something else.”

    Benedict Evans, on how to pay attention in tech

    “These are all Los Angeles questions. These are not San Francisco questions. No one in San Francisco even knows what the right questions are.”

    Benedict Evans, on why Netflix is not a tech company

    “The important stuff is not doing the old thing but more. It’s doing something new that you couldn’t have done with the old thing.”

    Benedict Evans, on where the real value of a new technology shows up

    “All software companies exist to solve problems created by other software companies.”

    Benedict Evans, on why AI produces more software, not less

    “It’s going to be magic, and in 20 years time we’ll just say, well, of course that’s how it is. Computers have always done that.”

    Benedict Evans, on how the whole shift ends up

    This is a dense, clear eyed conversation that rewards a full listen, especially if you are trying to think past the hype cycle about where AI value actually lands. Watch the full conversation here, and check out the “AI eats the world” presentation referenced throughout.

    Related Reading

    • Benedict Evans’ website home of the “AI eats the world” presentation and his newsletter referenced throughout the conversation.
    • Andreessen Horowitz (a16z) the venture firm whose podcast hosted this discussion and where Evans was formerly a partner.
    • Jevons paradox (Wikipedia) background on the price elasticity idea Evans uses to explain how cheaper AI may lead to more usage rather than savings.
    • Stratechery by Ben Thompson the analysis Evans cites on software as a designed workflow versus a process that grows out of how a business runs.
    • The Pursuit of Purpose a PJFP look at finding direction and meaning in work as automation reshapes careers and industries.