How Marc Andreessen Actually Uses AI

Half a billion people can access the world’s best AI on their phone. So why are most using it to write emails while only some are using it to build empires? In this conversation with Mark Halperin from Next Up, Marc Andreessen reveals why small bakeries are beating Fortune 500 companies at AI adoption, how to turn ChatGPT into your personal board of directors, and why Silicon Valley just reversed five years of geographic dispersion overnight. He also shares the questions that unlock AI's real power—including one of his favorite prompts: "What questions should I be asking?"

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Marc Andreessen?

  This is already probably the most democratic, you know, small D technology of all time in the sense of the very best AI in the world is fully available on the apps that anybody can download. This is just a completely different kind of computer that has these characteristics that are frankly more like a person, which is it's right most of the time, it occasionally gets things wrong, when it gets things wrong, it's able to self critique. And you have to kind of work with it the way that you work with a person. You want to take advantage of the fact that it's creative and then you want to be tolerant to the fact that it's not always correct. AI basically has snapped everything right back into the 20 mile radius around where I sit to just an incredible degree. So I would say like almost 100% of the actually interesting AI companies in the West are happening at sort of ground zero right here in Silicon Valley.

• 0:43Speaker 01

  There's a bakery owner somewhere using the same AI as Google CEO and according to Marc Andreessen, the bakery owner is winning. The man who invented the modern web browser and built multi-billion dollar companies just revealed something remarkable. AI is spreading backwards through society. Individuals first, small businesses second, Fortune 500 companies third, government last. The exact opposite of how computers evolved from mainframes to smartphones. Marc says half a billion people already have the world's most sophisticated AI on their phones. So the question is, why are most using it to write emails while only some are using it to build empires? Today, we're sharing a conversation Marc Andreessen had with Marc Halperin on the show Next Up. They talk about a specific prompts that transform AI into a world-class advisor, why Silicon

• 1:27Speaker 01

  Valley just snapped back into a 20 mile radius after five years of dispersion, and the uncomfortable truth about America's AI race with China. We hope you enjoy.

• 1:41Speaker 02

  All right, next up, Marc Andreessen, innovator, creator, and damn successful businessman. Early on, he invented the mosaic internet browser, co-founded Netscape, and since then, he has been the animating force and investor.

• 1:56Speaker 02

  Behind a lot of very successful companies, including some at the multiple billion dollar level, co-founded his firm Andreessen Horowitz, a general partner there. And they do a lot of a lot of stuff about a lot, a lot of stuff, and he knows a lot about a lot. Mark, welcome.

• 2:14Marc Andreessen?

  Thank you, Mark. It's great to be here.

• 2:15Speaker 02

  Really happy to have you. So much about AI I want to talk to you about. So we're gonna, we're gonna spend a lot of the time on that. First off, it's, I think it's, it's tempting to say right now, and when I think about AI, I think about where are we now and where are we going? It's tempting to say it's between like really smart, highly educated people who are adapting to it, and then people who just don't have the capacity to do that in their jobs easily. But what I'm finding is, at people who do what I do, people who are well-educated, very privileged, there's a have and have-nots there. I'm a baby using it. I'm not using it very sophisticatedly very often, but I am Einstein compared to

• 2:57Speaker 02

  some of my counterparts. And I'm wondering, is that how you see it? And what, what do you think differentiates those who understand how powerful it is even now versus those who seem oblivious to it?

• 3:08Marc Andreessen?

  Yeah, so I think there's kind of a fake story, and then there's a real story. So the fake story is kind of the classic, you know, kind of the classic Marxist story, which is, you know, oh, only the rich people have it, only the fancy people have it, you know, the big tech companies have it, everybody else is kind of gonna be left out in the cold. And that's not actually what's happening. And there's a lot of data on this now that has been, has been released by these companies to justify what I'm about to say. So the real story is, this is already probably the most democratic, you know, small D, technology of all time, in the sense of the very best AI in the world is fully available on the apps that anybody can download. And, you know, take your pick, ChatGPT, Claude, Gemini, Grok, you know, Mistral, any of these, by the way, DeepSeek from China, you download

• 3:51Marc Andreessen?

  any of these apps, you're getting state of the art, like the full, most sophisticated, powerful AI capability in the world. And, you know, the number of people already who downloaded these apps is parts of a half billion, on its way to a billion. And individual people are Out, you know, basically how to appropriate this in their lives. And what you see in the data is there's, you know, maybe what you'd expect, which is there are a slice of people who just use these new systems all the time, like literally all day for everything. Um, and you know, in a lot of cases, they're reporting that they're getting enormous benefits from that. Um, and then there's a lot of people who are experimenting and trying to figure it out. Um, and then there are people who are just, you know, not, you know, for whatever reason, not interested or not engaged.

• 4:28Marc Andreessen?

  But I would say it's incredible out of the gate, how distributed the, the, this technology already is. Um, and then I could just say like, I don't have, you know, with all my resources and with all my connections, I don't have access to a better AI, than the one that you just downloaded off the app store. Um, and so I, I think this is actually like just incredible story of the most advanced technology in the world being available to everybody right out of the gate.

• 4:48Speaker 02

  You gotta get people to use it to take advantage of it, right? So I've got a friend who's drafted a book and took it to his agent and the agent said, it's a hundred and forty thousand words. You gotta cut it down to seventy thousand. And I said, if you try to do that by hand, even if you hire someone, it's going to take you months. I can do it in an hour. And I can say to AI, don't change the style, don't change the tone, don't cut anything that, you know, ruins the story. And he said, that's immoral. The publisher will be mad that, that I did it that way. It's not right. Uh, how should I answer that person?

• 5:25Marc Andreessen?

  Yeah. So, uh, it, it, the exact same arguments, you know, emerged, you know, years ago with the introduction of computers, right? Um, I, I actually just, I've been, I've been watching a lot of, uh, you know, old science fiction movies with my kid and, and you know, there's this famous science fiction movie Tron from that community too. You know, that had the first computer, kind of the first real computer graphics movies, and it was disqualified for an Oscar for special effects because it used computers. Uh, right. And so there, there's this kind of long tradition of like, whatever the new tool is, it's sort of illegitimate and there must be something wrong with it. Um, in this particular case, I mean, there's no doubt there are people who feel the way that your friend feels. That issue was actually litigated, uh, in the last Hollywood strikes, um, in the, in the, in, in, I'm sorry, you know, the movie, on the film and TV side of the, of the creative profession.

• 6:04Speaker 02

  Yeah.

• 6:05Marc Andreessen?

  The, the last round of strikes actually, it's actually funny. They started as streaming strikes and then AI, then it became AI strikes. But the sentiment with the studios, actually with the unions, um, was that, uh, the following, which is if you're a writer and you use AI, that's totally fine. Um, what was not allowed is for the studio to basically use the AI and then claim it was a writer. Uh, but, but basically with, with the, what the unions and studios in Hollywood decided was it's another tool. It's like the word processor. It's like the personal computer. It's. It's like, you know, it's like using a printer instead of writing out a manuscript by hand. And so, so I think there are people who feel like your friend does, but I think the world is already adapting very fast to using it. And frankly, one of those reasons you probably pointed out to your friend is like, I don't even know that anybody could tell anymore.

• 6:48Marc Andreessen?

  Right? And so, you know, if you're going to have a moral prohibition on something that people can just do and nobody knows about, like, is that really going to work? And so I think those, those certain self-imposed barriers are probably going to collapse quite quickly.

• 6:59Speaker 02

  I hope so. Fortune put out a list of the top American companies using AI. Alphabet, Visa, JP Morgan Chase, top three. We talked about just now on an individual level. If you were the CEO of a company or advising a CEO, how important is it to be on that list? In other words, how important is it to get to your company to adapt, whether it's for internal or consumer facing? How important is it right now?

• 7:28Marc Andreessen?

  Yeah. So this, this goes back to actually where we started, which is, and in fairness, the old model of adapting actually computers when computers came out, the old model was the, the largest institutions get technology first and then everybody else gets it later. And so, you know, the way the computer rolled out was the government actually got mainframe computers first, starting 1940s, and then big companies got computers, mainframes in the 1950s, 1960s. Small companies started to get computers, mini, we're called mini computers at the time, the 1970s. And then, and then, you know, we as individuals only got, you know, PCs in the 1980s. And so it took 40 years for basically technology to cascade down from the largest organizations in the world to small businesses and to the individual. This technology, AI, is going the opposite, you know, which is like, like

• 8:12Marc Andreessen?

  I said, that the most sophisticated capabilities are available on the consumer app today. And then what we're finding is consumers are adapting the fastest, just individuals in their lives. Then small businesses are then adopting right after that because, you know, a small business typically is just, you know, a person who's, you know, making decisions for their own business, very, very easy to do new things. Big companies are then following small companies. And so, you know, the companies on that list, some, you know, obviously some of them are doing interesting things, but in general, big companies right now are pretty tied up in knots internally. Kind of in all their processes and in all their legacy systems and all their, you know, organization and training and but their unions and like all the other issues they have to deal with, you know, they're actually relatively slow to adopt compared to individuals and small businesses. And then, and then government is the late adopter, right? And so government,

• 8:56Marc Andreessen?

  of course, are already trying to figure out, you know, kind of how to adapt this to algae, but they're not adopting it very fast because they can't because of all their rules and systems and bureaucracy. And so there's been a real inversion of how technology moves through our society that's really become, you know, AI is becoming a case study for. And so the answer to your question is, I think big company CEOs and, you know, many of them are doing this, but I think they don't really have to force the issue on this inside their, their companies, because the, you know, these big companies are just such now giant bureaucracies with so many rules that like by default, they'll smother new ideas. And so it's a real act of leadership to, you know, to get on a list like that and be able to, you know, actually say kind of with pride, like we're on the leading edge.

• 9:35Speaker 02

  So if your friend owned a bakery and he said, Mark, I want you to come in and help me figure out how to use AI. Well, how could a someone owns a single storefront bakery use it now?

• 9:45Marc Andreessen?

  Yeah, I mean, so there's, I mean, there's, you know, there's dozens of ways, you know, it obviously depends on what your business goals are.

• 9:51Speaker 02

  They're baker dozens of ways.

• 9:54Marc Andreessen?

  They are, exactly. And so, yeah, I mean, look, first thing you can do is just say, look, you know, review, you know, do a performance review for me, like just feed in, you know, here's my, here's my staffing schedule, you know, what, what do you think of it? Give me a critique of it. You know, here's the last, you know, 100 emails we've got from customers, one of the, one of the, one of the patterns of that, you know, here's the copy for the ad that we're going to place in the local newspaper, you know, put up on Facebook or whatever, like, you know, what, you know, what do you think of this? You know, let it, let it do it, let it do a performance assessment. A lot of people find it very effective for personal coaching. And so, you know, the owner might use it that way or might, you know, ask the employees to use it that way. And then I think where the power really kicks in is, say, you're, you're a, you know, you're a small business owner, you got one bakery, now you want to have two bakeries.

• 10:34Marc Andreessen?

  Right? And you want to have a brand and then maybe if that works, you're going to have five and then 50 and then 500 and then you're going to have, you know, packaged products going to supermarkets and so forth. And then there you basically turn the AI into a thought partner, right? And you basically say, okay, what, you know, what are the best ways to expand from a single, uh, you know, uh, outlet to, to, you know, to multiple and to turn, you know, turn this into a larger business. And, you know, the AI, you know, it's been, you know, because it's been trained on, you know, some large percentage of, of the total amount of human knowledge, like it has within it all the information on how, you know, Ray Kroc turned McDonald's from, you know, a single restaurant in McDonald's and how all these other, you know, entrepreneurs before actually did this. And so it can, you know, explain with you and help you, you know, figure out how to do this for your own business. Um, and then, you know, the thing that you get into as you use it is basically, it's just like, wow, it's like having the world's best coach, mentor, therapist, right? Advisor,

• 11:18Marc Andreessen?

  uh, you know, board member, um, but it's like infinitely patient. And so it's like, it's happy to have the conversation. It's happy to have the conversation 50 times. It's happy if you admit your insecurities and it'll coach you through them, you know, it's happy if you run wild speculations that don't make any sense. Uh, it's happy to do all that at four in the morning. Um, and so the, the, the people who are using it a lot are finding it's, you know, it, it actually turns out to be very supportive, uh, in their, in their real life.

• 11:42Speaker 02

  Could you say, here's the recipe for our bestselling cinnamon rolls. How could I make it better?

• 11:46Marc Andreessen?

  Yes. Yeah. A hundred percent. Yeah. You can say, you can say, and by the way, uh, part of the art of AI, right, is, is what questions to ask it. Right? Cause you know, it turns out, you know, it turns, it can answer, you know, many, many different questions. You have to, you have to actually create it at this. Uh, yeah. And so you could say like, here's my current recipe, um, you know, how might I improve it? You could also say, you know, what's the best cinnamon roll recipe in the world? We're backwards from that. And then you could also say, look, I want to make the best one in the world, but I need to do it at a set of price. You know, what, you know, what, you know, what are the ways to cost out optimized?

• 12:16Speaker 02

  All right. So the other

• 12:16Marc Andreessen?

  You can ask. By the way, the other thing you can ask it is you can ask it, what question should I be asking? Right? And so you could plug in, I run a bakery, dot, dot, dot. What question should I be asking? And if you'll, you'll find it, it's actually a thought partner in helping you figure out what questions to ask.

• 12:29Speaker 02

  Right. Brilliant. So the other day I said, I want to know every Republican who voted against any of the articles of impeachment against Bill Clinton. Give me the list of every Republican. And it came back and it listed some Democrats in, in, in mixed in there. And it said they were Democrats. And I said, back, I only want Republicans. And it said, oh, sorry, I inadvertently included Democrats. Now I could understand a human being, a junior researcher doing that, but how could AI make a mistake, have it pointed out to it and say, oh yeah? How, how could that be in the model?

• 13:03Marc Andreessen?

  Yeah, so you know, this gets technical and I'd be delighted to get people into the technical details. I'll try to resist. It's a new kind of computer. And the way to think about it is, computers up until now have been what you might call like hyper literal, right? Where computers up until now, like they do math really fast, but like they do the same thing every single time. They exhibit no creativity whatsoever. And if you expect them to exhibit creativity, like you know, they just can't do it. And then if they make a mistake, it's because the human programmer made a mistake. And that has made computers, you know, super useful for running like, you know, large math exercises, you know, doing a lot of things that that computers do. But of course, computers have never been creative, right? Computers never been able to write you poetry, or work with you on your cinnamon bun recipe. Like, it's just never even been a thing that we can think

• 13:46Marc Andreessen?

  about. So it's never had kind of that human element of creativity to it. This is just a completely different kind of computer that has these characteristics that are frankly more like a person, which is it's right most of the time. It occasionally gets things wrong. When it gets things wrong, it's able to self critique. And you have to kind of work with it the way that you work with a person. And so you have to basically figure out as you use it, like you want to take advantage of the fact that it's creative, and then you want to be tolerant to the fact that it's not always correct, just like you're working with a person. Now, having said that, when it makes easily avoidable mistakes, or it's just like makes boneheaded fact mistakes, you know, we call those hallucinations. The latest systems are much, much, much better at not doing that. They're much more accurate. And in particular, for anybody watching this, if you want to kind of see this in action,

• 14:31Marc Andreessen?

  I'll just give an example. If you if you buy the full version of ChatGPT, there's a model called GPT Pro, GPT-5 Pro, which is the latest one. And then there's something called deep research, which is a switch that you turn on. And if you use GPT-5 Pro with deep research, you ask a question like that, like at this point, I think it's, I wouldn't say it's bulletproof, but like, it's really good at staying fastly grounded. And literally, you can watch it work, and it'll literally go out on the internet, and it'll like, check all the authoritative sources, and it'll, you know, it'll go on congress.gov or whatever, and check the audio records and verify that. And so I think that problem is being ironed out, you know, kind of as we speak.

• 15:04Speaker 02

  Yeah, for people watching, listening, who haven't used it or not used it much, the thing you said about good prompts is so key, and that does differentiate the, you know, the people really getting productive at it from not. And one of the things that you and I have talked about is, it is hilarious. It can write, if you give it the right prompts, it can write stuff that is so funny. And where does that come from? How does it have the capacity to understand? Because humor involves metaphors and sophistication and humanity. How can it do that?

• 15:38Marc Andreessen?

  Yeah, so this gets to this idea of how it's trained. So basically, what these systems are, is they're basically the accumulation of human knowledge over time, sort of, and by the way, most of the training data is just literally the internet, right? So, one of the reasons that this is happening now and not 20 years ago is because the internet finally got big enough, not just the web, finally got big enough to have like all this information in it, right? And so, if you go out on the internet today, you know, you can find, you know, all kinds of material online that's, you know, it's, you can find like, you know, classic screenplays from, you know, the gold age of cinema 400 years ago. You know, you can find, you know, literally, you know, people joking with each other on social media all day long. You know, you can find, you know, professional comedians doing oral histories of, you know, how they did great comedy. So there's just like, there's

• 16:22Marc Andreessen?

  incredible amounts of information that are online about comedy and about what's funny. And then, all of that information is in the training data. So it's all kind of fed into the AI during the training process. And the AI basically processes it sort of like any other kind of data, and comes out the other end and just basically is like, oh, you know, now that AI is a world-class expert in humor, right? And of course, you know, look, you could be an expert in humor and not actually be funny, right? And they're, you know, they're, I don't know, probably professors of comedy or something like that in colleges who aren't very funny. But, like, it just, it knows so much about what humor is. It knows so much about the pattern of jokes. It knows so much about what makes people laugh. It has so many examples, you know, to be able to learn from. And, you know, the professional comedians will tell you, there are patterns to comedy, right? You know, there are, you

• 17:06Marc Andreessen?

  know, I worked with a professional comedian once or something, and he said, you know, the key to it is specificity, like, you need to get, you need to just like nail the reference. You know, another comedian will say, the key is, you know, timing or pacing, or the callback to the previous joke, or whatever, you know, the punchline, whatever it is. And so it just, it knows all that. And then it's just, you know, it's now so powerful, it's actually, yeah, I, yeah, quite honestly, I find, especially at like 2:00 in the morning, I find these things hysterical.

• 17:29Speaker 02

  Yeah. All right. Just a minute left before we take a break. What's your advice to an individual who's barely used it or hasn't used it? What's your advice to them to sort of how to get started?

• 17:39Marc Andreessen?

  Yeah. So I mean, by far, the best way to do it is just download it and use it. And like I said, you know, there's several, you know, Elon's got Brock, you know, which is now fantastic. By the way, you know, it's actually interesting how these things are getting built into products now. So, you know, the new versions of X, you know, formerly Twitter. Actually, if you go to any post on X, there's a little Brock icon that looks like a little, a little black hole icon on the upper right corner of the post. And if you click on it, it actually calls up the Brock AI to explain the post to you. Right? And so like it literally is like, it can explain to you that, you know, if there's some post on politics or something, you don't understand what's happening. You just, you have lost the thread of the topic. You just like bonk that button and you get in a dialogue with the AI. Little AI window pops up and explains the post and you can ask it for more details.

• 18:22Marc Andreessen?

  And so it's like built into that product. Google's actually built AI now into search. And so now when you do searches, it has this thing called AI mode and you bonk on it. And, you know, in addition to giving the 10 blue links for Google, you now get into an AI dialogue. And so you just start using those products or you just download one of these apps and start using it. And like I said, a really great question is like, okay, how do I use you? Right? Like, or you could say, teach me works really well. You can say, you know, teach me how to use you in the best way. You know, teach, you know, teach, you know, teach me how to use you for my, for my business, you know, for this project. And it'll, you know, these things love to talk and it'll happily sit there and chatter away and take you through it.

• 18:58Speaker 02

  Yeah. Just my, my sort of analog to the way you just said it is ask it for what you want as specifically as possible. Don't hold back, be really specific and it will do what you ask. All right. More with Mark Andreessen. That's next up. Stay tuned.

• 19:15Speaker 02

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• 20:38Speaker 02

  All right, welcome back. We're here with Mark Andreessen still. Mark, are you of the school that says that we're in an exit, the United States is in an existential struggle with China? Do you subscribe to that point of view?

• 20:49Marc Andreessen?

  I was gonna say, I hope that's not true, right? You know, I hope this is not gonna walk all the way to the situation that we ended up in at the Soviet Union, you know. Like, you know, like you, I grew up in an era, I'm sure you understand, see if you remember this, like, you know, I'm growing up thinking there was a significant chance that, like, we're all gonna die, you know, from nuclear war. And so I hope it doesn't get back to that level of intensity. But I do think there are a lot of historical parallels to what happened between the US and the USSR in the 20th century, you know, happening right now. And, you know, you have, you know, two hegemonic superpowers that both have, you know, visions, you know, they both have visions of how society should be structured and how the sort of global political systems should be structured. And, you know, obviously, I think America's is better, you know, but they both have visions.

• 21:34Marc Andreessen?

  And, you know, they're both working, you know, to that end. And then they both have international strengths, weaknesses militarily, technologically, economically, culturally, and, you know, there is that kind of geopolitical fight happening. So I saw. I I hope we stay in this kind of, I don't know what you call it, mode of like coopetition, you know, tension without, you know, without military strife, you know, I I hope we stay, you know, in in that mode, but like it's it's a sufficiently fraught situation, um, you know, that we certainly need and and, you know, and by the way, have a national strategy for how to win that and we need to make sure that we do.

• 22:07Speaker 02

  Right. Do they have any one or two advantages over us in terms of AI?

• 22:12Marc Andreessen?

  Yeah, they do. So they have all, oh, so they have two, they have two advantages. And by the way, I should say, we have many advantages. I'm very bullish on the US and I, you know, I think we're we're better positioned. I like, I wouldn't trade places with them, uh, and we could talk about that. But having said that, they do, they do have strengths, and in particular, they they have two two key strengths. Number one is, they do have the advantages of a command economy. Um, and, you know, like, generally speaking, or a hundred percent, like, I'm on the side of, like, you know, free markets and, um, and, you know, decentralization and, you know, having a dynamic economy and we have advantage, you know, we have much, you know, we have much better entrepreneurial ecosystem and so forth. Um, having said that, they do have this advantage where when their government decides if something's a national priority, like, they just do it. And by that, I mean, not only does the government do it, but they just tell the private sector, you do the following, right? And so that's sort of,

• 22:57Marc Andreessen?

  you know, the, they have this, you know, thing the Soviets had where, you know, the entirety of society is able to, you know, go up against, uh, go up against simple missions. Uh, you know, we're we're just a lot more fractious than that. And so, you know, we kind of navigate our way through this in our own way, but not, you know, we we don't have anywhere near that level of organization. So that gives them the ability to execute against specific areas of focus, uh, in, you know, in in arguably a superior way. Um, and then the other, the other, um, advantage that they have is, you know, we, we, we voluntarily, we in the US voluntarily deindustrialized, you know, starting, you know, thirty or forty years ago. Um, and, you know, that industrialization, you know, the the making of physical things, and in particular, the making of machines, you know, has moved substantially to China. Um, and, you know, the way that we think about machines now is that they're basically, you know, they're, they're the hardware version of software, right? They're, they're the embodied version

• 23:41Marc Andreessen?

  of AI. Um, and so, you know, the car is not just steel and glass anymore. It's a, you know, it's a, it's a robot on wheels. Um, you know, the drone isn't just a toy, a toy anymore. It's a, it's a computer, you know, that flies through the air, um, you know, that navigates itself. Um, you know, robots are coming, you know, they're, you know, we're gonna, we're gonna live in a world that's just like completely washed with with with robots in the decades ahead. Um, and China is just like, as a consequence of the last thirty years of policy, China is just like way ahead on everything involved in building physical things. Um, and that, and, you know, then, you know, this administration and others have had visions of how to reach out to that, but, you know, we we have a long way to go.

• 24:16Speaker 02

  As the US tries to become more of a manufacturing country, it would seem to me AI integrated into manufacturing is extremely powerful. Are they are they ahead of us on that? As you said, our biggest companies here are slow adapters of AI. Are there big manufacturers now using AI more than we are?

• 24:35Marc Andreessen?

  Yeah, so I think we so I think at least we could do that faster and better. Like, if we could manufacture in the US the way that we used to 30 or 40 years ago, we could definitely do that faster for, you know, for a variety of reasons, including the fact that we have better software engineers, we, you know, we have a more flexible and dynamic economy. You know, we could do that faster. The big issue is just we have chosen to not be a manufacturing economy. Like, we chose to move that to move that offshore. And, you know, we for a very long time, we were very proud that we moved that offshore for, you know, for a variety of reasons. And so the challenge is not so much that, you know, that we couldn't in theory do exactly what you just described better than they can. It's just like, if you just if you're not manufacturing things, then you can't do that at all. Right? Which which is the situation that we've worked ourselves into. And so,

• 25:18Marc Andreessen?

  I, you know, just, you know, their, you know, their car, just to pick one, their car industry is like moving like incredibly fast at this. You know, we and look, we have to, you know, we have our superstar companies, we have Tesla, you know, in particular, that's world class at this and, you know, still, you know, better than better than the Chinese today. But like, the Chinese are moving really fast. And if you talk to people, we don't have a lot of exposure to Chinese cars in the US because the trade barriers are so high that they really are not cost effective to sell here. But it's like, if you go to the Middle East and talk to just like normal affluent people, you know, they're not driving Chinese cars by choice. You know, not because they can't afford a Mercedes, because the Chinese cars are better. And the Chinese cars are like full self-driving, electric, autonomous, you know, voice AI, like they're state of the art and exactly what you're talking about. And we have just, we have just, you know, we still have car companies,

• 26:02Marc Andreessen?

  but ex Tesla, you know, mainly what they do is they assemble, you know, you know, third-party, you know, parts that are coming from other places. You know, the Chinese are just doing a much more specific advanced level of unified hardware and AI manufacturing. Yeah, by the way, you see it in drones, like, virtually the entire global drone industry and virtually the entirety of the drone industry, you know, in terms of people using drones in the US, virtually 100% of those drones are made in China. And again, that's not because we couldn't make them, it's because we chose a set of policies that drove that that industry offshore.

• 26:30Speaker 02

  We better start making. I want to talk to you about Silicon Valley. As much as it's been covered for the last quarter century, I don't think the coverage is even close to explaining how significant it has been. There are great stories like yours of people who have been so successful, but the influence over our culture, our government, our economy, and the world is just so massive. If someone like you understands engineering, markets, economics, technology, there was a long period where you had to live in Silicon Valley if you wanted to succeed and have the relationships and the interactions. Is that still the case? Is Silicon Valley still a place you have to physically be if you want to excel, someone

• 27:15Speaker 02

  with those skills?

• 27:17Marc Andreessen?

  Yeah, so I should start by saying I'm an import, right? So I'm from out of town. You know, I grew up in the rural Midwest, northern Wisconsin, you know, kind of in the tundra. And so, you know, I didn't grow up here. I didn't get to participate kind of in the heyday of, you know, back when we actually, by the way, it was called Silicon Valley because they originally made chips here, right? You know, speaking of manufacturing, they first locked, locked, and stopped doing that. You know, that's now thoroughly illegal in California. And so, you know, I wasn't here for that. I wasn't here for the personal computer. So I'm an inheritor of, you know, the phenomenon that you're describing that other people built.

• 27:50Speaker 02

  What year did you show up?

• 27:52Marc Andreessen?

  Yeah, so I showed up in 1994. And Silicon Valley is really dated. You know, it sort of dates to the early 50s, you know, with Hewlett Packard in particular, sort of the original company.

• 28:03Speaker 02

  But the 90s is when so much of what we think of now in terms of consumer-facing, social media, internet, right? I mean, that's a pretty big dividing line. So, yeah, you missed the Hewlett Packard days, but you were there for the phase we're in now, right?

• 28:18Marc Andreessen?

  Yeah, but I just bring it up because basically the history of Silicon Valley is it's a sequence of waves, right? And so, and it's a part of what makes it special is, you know, this AI is like wave nine or wave 10 of these like just major, you know, basically microprocessors and smartphones and, you know, kind of cloud and social and mobile, like all these, you know, kind of the PC, you know, kinds of all these waves have hit. So anyway, my point is like when the valley are like, we're the inheritor of a tradition and a system and a model that was built by other people. And then to your question on geographic focus, this is very interesting thing playing out right now. So a couple of things. So one is like, look, like I said, like the technology that's built in Silicon Valley is diffusing nationally and globally into ordinary people's hands like at a far faster rate than in the past. So you don't have

• 29:00Marc Andreessen?

  to be in Silicon Valley to get access to the best technology. Like you can now get that from everywhere. And that's very important because that didn't used to be the case. Having said that, if you want to be at the company or start a company that's going to build the leading edge technology itself from scratch, I would say at this point, like maybe you don't need to be in Silicon Valley proper, but like you better strongly considering if you're not, there's maybe three or four other places in the country you can give it a shot. But primarily the people that want to do that are coming to Silicon Valley. And the important thing in the last five years that happened actually was during COVID, we all thought actually that the Silicon Valley geographic concentration is actually unwinding. And we thought that, you know, virtual work and remote work and, you know, you could be able to start companies everywhere. And you had all these kind of booms happening

• 29:42Marc Andreessen?

  in places like Miami and Austin, other places with lots of high tech entrepreneurs. And, you know, it felt like the whole thing was, you know, really distributing out. AI basically has snapped everything right back into the 20 mile square radius around where I sit to just an incredible degree. So I would say like almost 100% of the actually interesting AI companies in the West are happening at sort of ground zero right here in Silicon Valley. And then, by the way, and this is good news and bad news, by the way, the other place in the world where these things are happening is basically, you know, the Shanghai, Beijing access to China.

• 30:13Speaker 02

  Right.

• 30:14Marc Andreessen?

  You know, these are the two places. And then you also say a very important thing, which is it's just not happening elsewhere in the world. You know, and there's, you know, there's kind of, you know, high tech clusters in other places. But, you know, if you're a sharp AI person, and, you know, I'll just pick on one one, and like you have already moved to California where you're going to, you know, because they have just, you know, essentially decided to outlaw it. The EU has decided to outlaw it. And so, you know, people are being driven to the US and to California. I think in a way that's even more concentrated than it was when I first got here.

• 30:45Speaker 02

  All right, last question. Name inventions in human history that have more benefited the lives of individuals than the iPhone.

• 30:55Marc Andreessen?

  Oh, well, I mean, you know, if you go far enough back, you know, electric lighting was a big deal, you know, steam power was a big deal, you know, obviously antibiotics are the easy call. I mean, you know, the internet itself, you know, electricity, you know, indoor plumbing, you know, it's hard to question those. And people sometimes say, like, you know, you guys aren't inventing important things. Like, why are you inventing something as important as indoor plumbing? And it's like, well, that was a big one, I can see. But like, you know, we did, we did solve that problem.

• 31:24Speaker 02

  I would, if you said, if you said, give up your iPhone or switch to an outhouse, I would switch to an outhouse.

• 31:32Marc Andreessen?

  I think, you know, I think there's a lot to that. And maybe the serious point underneath that, underneath that, which I

• 31:37Speaker 02

  Oh, I was being serious. I was being serious.

• 31:39Marc Andreessen?

  No. Well, no. So maybe, as you say, the generalization you can make from that is I think people may be systematically underrate the importance of communication. So being able to be connected with other people and then being able to actually, you know, be able to learn things, be able to get access to information, like those two things, there's something in the culture, I was just saying, Silicon Valley culture, there's something where like, those are like, looked down on as less important. And I actually think to your point, like, they're actually incredibly important and they're foundational for everything else that people do. I mean, you know, human connection and human learning is, you know, both of those are at the center of everything that we do. And so, yeah, no, I would, I would, I would make that same trade.

• 32:12Speaker 02

  Here's, here's my, here's my idea for a reality show. You put someone like us in Cleveland for a week without their smartphone, and give them, and give them a series of tasks which they would otherwise conduct with their smartphone. Good luck.

• 32:25Marc Andreessen?

  By the way, I had, I had relatives in the seventies who still had outhouses, right? Like,

• 32:29Speaker 02

  Yeah, it's fine.

• 32:31Marc Andreessen?

  passes, 100%. Oh, well, it's fine. And Iowa, in January, you start to reconsider whether that's fine. In the middle of the night when it's 40 below. But, but like, the past, the past was not that long ago.

• 32:44Speaker 02

  Yeah, no, I know.

• 32:45Marc Andreessen?

  Yeah.

• 32:46Speaker 02

  All right, Mark Andrews, and very grateful to you. I scratched the surface. I had a list of about 15,000 questions that AI went, went down to me to 1,500, but we didn't get to them all. Very grateful to you, though, for making time. And again, so just not many people on the planet who understand this stuff as well as you do. So grateful to you for sharing. And hopefully, we inspired a few people to learn how to use the latest technology. Thank you.

• 33:10Marc Andreessen?

  Good. Fantastic. Thank you, Mark.

• 33:15Speaker 01

  Thanks for listening to the A16Z Podcast. If you enjoyed the episode, let us know by leaving a review at ratethispodcast.com/a16z. We've got more great conversations coming your way. See you next time.

• 33:29Speaker 01

  This information is for educational purposes only and is not a recommendation to buy, hold, or sell any investment or financial product. This podcast has been produced by a third party and may include paid promotional advertisements, other company references, and individuals unaffiliated with A16Z. Such advertisements, companies, and individuals are not endorsed by AH Capital Management, LLC, A16Z, or any of its affiliates. Information is from sources deemed reliable on the date of publication, but A16Z does not guarantee its accuracy.