Pod Insights The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch 20VC: Vinod Khosla on How AI Impacts The Future of Healthcare, Education, Income Equality, Geo-Politics, Music and Climate Change About this episode Vinod Khosla is the Founder of Khosla Ventures, one of the leading venture firms of the last decade with investments in OpenAI, Stripe, DoorDash, Commonwealth Fusion Systems and many more. Prior to founding Khosla, Vinod was a co-founder of Daisy Systems and founding CEO of Sun Microsystems. In Today's Episode with Vinod Khosla We Discuss: 1. The State of AI Today: Does Vinod believe we are in a bubble or is the excitement justified based on technological development? What are the single biggest lessons that Vinod has from prior bubbles? What is different about this time? What is Vinod concerned about with this AI bubble? 2. The Future of Healthcare and Music: How does Vinod evaluate the impact AI will have on the future of healthcare? How does Vinod analyse the impact AI will have on the future of music and content creation? Does Vinod believe that humans will resist these advancements? Who will be the laggards, slow to embrace it and who will be the early adopters? 3. Solving Income Inequality: Does Vinod believe AI does more to harm or to hurt income inequality? What mechanisms can be put in place to ensure that AI does not further concentrate wealth into the hands of the few? Does Vinod believe in universal basic income? What does everyone get wrong with UBI? 4. The Future of Energy, Climate and Politics: Why is forcing non-economic solutions the wrong approach to climate? What is the right approach? Why is Vinod so bullish on fusion and geothermal? How does fusion bankrupt entire industries? How does the advancements in energy and resource creation change global politics? Does Vinod believe Larry Summers was right; "China is a prison, Japan is a nursing home and Europe is a museum"? 5. Vinod Khosla: AMA: What is Vinod's single biggest investing miss? What does Vinod know now that he wishes he had known when he started investing? Why did the Taylor Swift concert have such a profound impact on him? What was Marc Andreesen like when he backed him with Netscape in 1996?
Transcript Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Speaker 00 If I'm right, the level of job displacement over 20, 25 years will be large. AI is a tool for productivity growth. Capitalism does result in more inequality, almost always. AI will only accentuate that. One has to be very considerate of the people being disrupted and accommodate them if you're going to make better progress.
0:23 Harry Stebbings? This is 20 VC with me, Harry Stebbings, and I'm so excited to welcome one of the OGs of Silicon Valley to the hot seat today, Vinod Khosla. Today, we have a discussion on the future, the future of healthcare, education, climate, energy, and how AI impacts it all. For those that do not know, Vinod is the founder of Khosla Ventures, one of the leading venture firms of the last decade, with investments in OpenAI, Stripe, DoorDash, Commonwealth Fusion Systems, and many more. And prior to founding Khosla, Vinod was a co-founder of Daisy Systems and founding CEO of Sun Microsystems. But before we dive into the show today, this episode is brought to you by Tegus, the go-to research destination for bold investing. Tegus curates expert insights, analysis, and financial data to give you powerful perspective for your investment decisions.
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3:14 Speaker 00 You have now arrived at your destination.
3:17 Harry Stebbings? Vinod, I am so excited for this. I've been absolutely loving your Twitter content recently. And so first off, thank you so much for joining me again today.
3:25 Speaker 00 Happy to do it. Always like talking to entrepreneurs.
3:28 Harry Stebbings? That is so kind of you. But I want to start, stay on the kind of topic of the day, which is obviously AI, artificial intelligence. And Kostela, and you have been one of the biggest proponents and conversationalists of this space in the last 10 years, really. And I just wanted to start with the question of, do you believe the recent hype in AI is due to technological breakthroughs and innovation? Or is it the result of hype cycles keeping up with innovation from years ago?
3:55 Speaker 00 A little bit of both. Let me give you a perspective. In 1982 at Sun, we adapted TCP IP and the Internet as our native network. We are the only ones. By 1996, it was clear that exponential growth was going to continue, and we invested in Juniper, which, by the way, was a 2,500x return, a $7 billion return for us on our three or four Four million dollar investment. When the internet really took off and I remember meeting Mark Andreessen to invest in Netscape, the browser company, on a Saturday morning in Mountain View when it was three people. It really took off, but the exponential was clear much earlier.
4:37 Speaker 00 The reason I bring this up is I wrote my first blog on AI. Do we need doctors and do we need teachers? Encapsulating the idea that expertise could be free in 2011, 2012. It was pretty controversial then, but it was a similar moment to when we adapted the internet and T C P I P in the eighties at Sun. And then when Chat G P T came out, it became like the browser moment for the internet. And it's now obvious to people the extreme capability that we've developed here and will continue to develop and is progressing at a rate where even I can't keep up. But anytime there's a rich area for development, bubbles form.
5:22 Speaker 00 And I worry a little bit that that will happen here. There's obviously real technological progress, real expansion of the opportunity set for real building businesses, but also a lot of hype that follows sort of a rich area to mine, sort of the gold rush phenomena. What I'm fundamentally optimistic about is when you look at bubbles in the eighteen hundreds, eighteen thirties, there was a bubble in England when you got the right to build a railroad between two towns. You could issue scripts almost immediately. The bubble did burst, but more railroad was built after the bubble burst than before. My point is the progress of AI applications in utility for society
6:07 Speaker 00 will go on a steady pace based on technical capability and entrepreneurial interest in it, not what Wall Street or investors think about it. So I think investors are important because they fund these developments. But investors cause bubbles. The reality is the underlying technology and its applications.
6:27 Harry Stebbings? You mentioned there OpenAI and ChatGPT being the equivalent of the browser in terms of the consumerization and the access that it provides consumers. You tweeted before, the daylight between what we'll be able to do with AI and what we'll actually do with AI is human resistance. What did you mean by this human resistance, Vinod, and how does it show itself?
6:48 Speaker 00 Well, there's two types of things. You know, first a genuine concern that AI will displace jobs and what do we do with that? If I'm right, the level of job displacement over 20, 25 years will be large. And we've dealt with that kind of job displacement before, but over multiple generations, for example, in agriculture, when it was 50% of all jobs in the US in 1900 and went to 4% by 1970. If the change is happening rapidly, then job displacement may cause us to have rules and regulations that slow down progress, slow down the adoption of these technologies.
7:27 Speaker 00 Another example could be physicians resisting AI being able to do physician types of tasks. The AMA is a very good organization, but there is protection built in in certain areas, whether it's in unions or physicians or pick your favorite expertise, media where artists or music producers may object to some of these. That's what I mean by human resistance because people are being disrupted. You know, honestly, technology is very fun to talk about disruption. It's not a lot of fun to be disrupted and so one has to be very considerate of the people being disrupted
8:09 Speaker 00 and accommodate them if you're going to make better progress. So I do think we'll have to pay special attention to the people being disrupted and their needs and desires and wants.
8:20 Harry Stebbings? I want to approach this from a very first principles interviewer style and ask very basic questions, so I hope that's okay. What should we be doing, do you think, for those that will be disrupted? As you said, it's fun for us at the forefront of innovation. If you're being disrupted, less so. What should we be doing and how should it be handled?
8:37 Speaker 00 So let's start with the math. Let's say the next 50 years of GDP growth without AI and some of these newer technologies would be 2% a year. Per capita income may go from 70 or 75, wherever it is today, or 65, I forget the exact number, to about 175,000. If we change GDP growth to 4%, that per capita income would increase to 475,000 or so. So my point is, we will have adequate resources, adequate abundance to share much more broadly. I wrote a blog in 2016 in Fortune magazine that said AI will cause, and this was seven years ago,
9:22 Speaker 00 AI will cause great abundance, great GDP growth, great productivity growth, everything economists measure, and increasing income disparity. It was the first time in 2016 I wrote about needing some sort of universal basic income, which means redistribution of income in a much better way than we have today. The reason I gave you my calculations of the effect of changing GDP growth from 2% to 4% over 50 years is we will have enough to share. So my suggestion would be some large percentage of per capita income growth or GDP growth be reserved in a social security pool for our universal basic income or something like that. There's many ways to redistribute,
10:06 Speaker 00 some more acceptable than others, but happiness in our society will be a function of equality, not just GDP growth. And I think we'll have to consider that. And AI will make that abundance possible. I'm optimistic it can be done. Bill Gates has talked about a robot tax. There are multiple ways to approach this, but I think reducing the rate of increase and putting the excess into a pool for like a social fund would be the right approach. Because increments are much easier to share than somebody saying, let's increase taxes on everybody. I'm fine with tax increases personally. We can afford to have better tax system, more equitable tax system,
10:50 Speaker 00 but there are maybe better ways to do this and increase sharing of the benefits of these technologies through other mechanisms.
11:00 Harry Stebbings? Do you think AI does more to harm or to help income inequality?
11:04 Speaker 00 Well, AI is a tool for productivity growth. Capitalism does result in more inequality, almost always. Everybody's better off, but the income inequality increases. That tends to be what history has shown us. AI will only accentuate that. And so sharing the benefits of AI in a different way will be important. I think it's not by constraining AI or not using AI to benefit society. It's by taking the product of these technologies and sharing it more equally. The increased abundance should be more equally shared.
11:42 Harry Stebbings? I'm fascinated. Again, I said I loved your tweets. I really have loved them. One of them said, the choice is, do you let AI do the jobs or not? Some will and some will be laggards. When you think back on that, who do you think will embrace it? And who do you think will be the laggards?
11:59 Speaker 00 Well, I worry that the Western political system and capitalism is by permission of democracy. So the Western political system will pay more importance to the short term, which is things like job displacement. While in China, you might get Tiananmen Square-type tactics to adapt it and will economically as a country as opposed to each person being fairly treated. That's my worry.
12:27 Harry Stebbings? I totally understand that as a concern. I think the hardest thing is political incentives, which is every politician is incentivized to remain in power. And actually, encouraging job displacement will not help them in the next election. It might help the company economically in 20 years, but the incentive mechanism of politics doesn't align to the GDP and per capita growth over the long period.
12:50 Speaker 00 Absolutely true. And if the change is slower, it'll be easier to accept than if it's super rapid. I'll give you an example. I'm pretty convinced instead of Displacing physicians. We could quadruple the number of interactions between a physician and patients. In fact, it's already too. In Australia, there's many more interactions with your primary care physician every year for the typical patient than we do in the US. So you could increase the level of service, increase the level of attention with AI taking excess of that. There's projected to be, under current course and speed, a shortage of primary care physicians in this country.
13:31 Speaker 00 I think we can have an excess even when we increase the number of interactions by 5X because AI can take 80% of that increased load. And that's a good example of how one can work cooperatively to improve the level of service in healthcare and primary care while not disrupting physicians.
13:51 Harry Stebbings? Do you believe then that AI will be a competitor or a complement to the doctor? And do you believe doctors see it in the same way?
13:59 Speaker 00 I wrote about it probably eight years ago. I wrote this paper, 20% doctor included. It's about a hundred page document. And I wrote about the human element of care being provided by doctors and the detailed expertise being provided by an AI. You can't expect your oncologist to be caring, talking about your cancer and have read the 5,000 most recent articles on your cancer. They can't keep that knowledge in their head. So that's the kind of partnership that'll be possible. You know, you don't want a computer telling you you have cancer. You want a caring human being. I jokingly said to the dean of the Harvard Medical School about five or six years ago,
14:43 Speaker 00 they ought to change their selection criteria for more empathy, more mirror neurons and less IQ only, which is what it takes to get into Harvard Medical School. I said, take the model of the UCLA Film School. Look at caring humans as criteria number one for admission to the MD program.
15:02 Harry Stebbings? What other ways do you think AI will most significantly change healthcare and medicine in the next 10 years?
15:09 Speaker 00 Well, for example, we can custom design proteins for particular purposes. I'm pretty excited that for a large number of genetic defects, and there's probably six thousand or so diseases that are single mutation genetic diseases, we will be able to design with AI's help custom solutions. Because we've essentially solved the protein folding problem. We can fully characterize the design and behavior of DNA, RNA, proteins. That's all really, really exciting. So that'd be a huge impact on the pharmaceutical side, not the expertise side of healthcare. Almost every area, whether in healthcare or in media, will be exciting.
15:51 Harry Stebbings? Gee, you mentioned before a brilliant thing, which is I've never seen innovation come from large institutions. And it's really applicable across medicine, across education, across music. But do you think in this next wave of innovation due to AI, that holds true? Or does AI actually allow incumbents or the dominant parties to just become stronger?
16:14 Speaker 00 I believe innovation will be spread broadly in different areas. Now, large language models may or may not be constrained to the large platform companies. Right now, it appears that'll be the case. There'll be two or three major providers of large language models. But for example, we have an effort in symbolic logic to see if in three or four years, it could change the equation of how you train these systems and the amount of data required and all those kinds of things. We have an effort at developing curriculum for AI instead of curriculum for humans. Almost everything AI is training on is designed for humans, not for machines. So there's a number of large innovations.
16:55 Speaker 00 And it's hard to tell today which ones will play out or be important in three or four years. So when we originally committed to OpenAI four or five years ago, it was very unclear where the world would lead and what the capabilities would be and when they would develop. It was clear to me that there was a reasonably high probability of pretty significant advance. At some point in time, hard to say whether it would be twenty twenty two or twenty twenty five. But that didn't bother us. The shape of the curve and the exponential really interested us. I think there's other approaches to AI, you know, Josh Tinbaum, for example, working a lot on probabilistic programming.
17:37 Speaker 00 Others working on formal techniques like symbolic logic. Do they add to, replace, complement L L M's? I think all those are possible and within L L M's large innovations are possible. So I would say the future is not predictable, but it is discoverable. And what I'm really optimistic about is the best minds in the world are now working on this problem. That's more a precursor of progress than any single thing like, hey, we suddenly have a new transformer like paper. Or attention is all you need, the famous paper. It's more about the talent working on it that makes me excited.
18:14 Harry Stebbings? What do you think are the barriers that we need to overcome for AI to have the impact we want it to have on healthcare?
18:21 Speaker 00 Well, in healthcare and other areas, AI is doing some things really well, other things not so well. That's where development needs to be rapid. For example, in healthcare specifically, guardrails is a very, very important issue. Safety is a very important issue. A lot more attention has to be paid to those factors. Explainability is a huge issue. Those things will need to be developed by somebody applying AI broadly to, say, primary care or oncology or pick your favorite area. But all of those, I'm pretty convinced will happen in the next five years.
18:59 Speaker 00 And we'll see the capability develop to provide very, very low cost, much more frequent accessible care. And accessible twenty four seven and accessible at a very cheap price to every human being on the planet, I think.
19:13 Harry Stebbings? Dino, we've spoken about healthcare. You've written, we'll talk about education, but you've written extensively about both. Many years ago, ahead of time. To what extent do you think about market timing when investing? Because I think it's Marc Andreessen's quote, there's no such thing as a bad idea, only a bad time. Do you think about market timing?
19:31 Speaker 00 You know, you think a little bit about it, but I mostly feel I'm not smart enough to predict it. In retrospect, you always feel dumb about some things and really smart about others. You know, we invested in OpenAI and we invested in Conwell Fusion about the same time. I'm really happy about both, but both felt like longer term bets than they've turned out to be. And progress has been more rapid, both in AI and in fusion, very different areas than I would have expected. So suddenly I feel smarter, maybe even overconfident about my predictions. Today I sit here and say, for example, the amount of compute power AI systems need, the expense of training.
20:13 Speaker 00 Could one have analog computing, and we are working on that, dramatically change that equation by 100x? Both cost and power. And I think that's entirely not only possible, but likely. Wind's a little bit harder to predict, though we are taping out chips this year.
20:30 Harry Stebbings? I have to ask, you mentioned fusion there and you mentioned Commonwealth. I thought it was fascinating when I thought about kind of the future of energy. And when I was doing a lot of work prepping for this, because you said before, forcing non-economic solutions is the wrong approach to climate. And solutions will need to be at what I call the chindier price. My bet is on fusion and geothermal. I just wanted to break this down because I didn't understand some of it, if I'm honest. Which is, why is forcing non-economic solutions the wrong approach first?
21:00 Speaker 00 Well, energy is such a large scale problem that there's no way it will be traded off. You know, we will spend the money to scale it. It's great for the first 1%, 2%, 3% of the market, whether it's the electricity market with solar and wind, or the hydrogen market, or pick your favorite. I believe subsidies should be declining with scale. So they can be high when it's 1% of the market because the tax on the overall energy cost would be low. But they have to start scaling down and no subsidy is being designed that way. Where as it gets to 2% or 4% or 8% or 15% of a segment,
21:40 Speaker 00 whether it's hydrogen to replace natural gas and coal or solar or fusion to replace electricity from coal, it has to scale down because if it's not, it's going to become too expensive. You get clean energy and no healthcare spending, what are you going to trade off? Those are the kinds of practical things at scale that matter. Having said that, early subsidies help get technologies developed when they're subscale. But by the time they're 5% of market, they really shouldn't need subsidies at all. Also practically, if you're a politician in India, you're not gonna tell people
22:19 Speaker 00 they can't have clean water, but their kids will be better off because there'll be a less warm climate. It's a very hard political trade-off to make. And coal consumption's been increasing in some of the developing parts of the world. You can't defy the laws of economic gravity at scale. You can do it in small startup sort of situations, but not at scale. For it to be contributing positively to economic development in countries like India or China, it has to be competitive globally with other sources or it won't be adapted. And this leads to a very important point in climate. We don't need incremental solutions.
23:00 Speaker 00 We need large breakthrough technologies will make these new technologies competitive at scale. So we can take small risks and have incremental decline in costs, but that doesn't solve the problem because it won't be broadly adapted. Or we can take larger risks and if successful, really have solution, fusions, that kind of thing. Deep geothermal, 400 or 500 degrees centigrade geothermal would be that. Finding a new geothermal site incrementally doesn't really help. It's not scalable, it needs to be scalable by 100x more than exists today, at least. And so my interest are technologies that scale and are economic
23:41 Speaker 00 and don't defy the law of economic gravity when scaled. And while we are talking about it, these take a long time, so. Sometimes the venture community ignores them, but they are profitable. If I look across our portfolio, some of the investments we made more than 10 years ago, there's a whole number of them. QuantumScape, Wordeji, Lanzertec, Impossible Foods, that are five to 10x multiples, though they took a longer time to get there. So Climate 1.0 was successful if one was patient and picked the right technologies. Things like fusion, new plant proteins, I'm very excited about new fertilizer production techniques, new steel production techniques.
24:24 Speaker 00 We are taking radically different approaches in cement, steel. Those are really, really exciting breakthroughs and there's no question they will be cheaper than its fossil alternative if the technologies work. Already I can say the cement we are producing will be 70% less carbon and our first plants will be operational this year and cheaper than traditional Portland cement. And that's when things start to scale.
24:50 Harry Stebbings? Can I ask you on fusion, what is at the core of the bullishness? And how does fusion bankrupt entire industries and destroy massive companies like you said before?
25:01 Speaker 00 Well, there was one breakthrough that enabled fusion to happen, which was high-temperature superconductors. It wasn't possible to build a fusion reactor with a 20 Tesla magnet, which is what Commonwealth Fusion is doing. With that magnet, the size of the reactor scales to 1 over Tesla to the power of four. So if you quadruple the power of the magnet, which one can do with high-temperature superconductors, the reactor itself becomes one to 50th the size, so 250 times smaller. Because of that, you can now both be economic, but also experiment much more rapidly, build them much more rapidly.
25:42 Speaker 00 Commonwealth Fusion was able to build a 20 Tesla magnet for fusion and demonstrated in three years, three and a half years. It has taken the large ITAR project with smaller magnets 25, 30 years to get to the same place, so 10x faster. I believe demonstrating Positive energy by twenty five, maybe twenty six, will be also ten X faster. Not only has that happened, there's a dozen other credible projects in fusion that have been started, mostly because Commonwealth instigated this change towards fusion. And I have this theory, you need instigators. And it's sparked up a field that was slow and not attracting the best talent
26:25 Speaker 00 to attracting the best talent now. And there's probably a dozen startups, and that's what makes me optimistic. At least one or two or three will be successful in this.
26:36 Harry Stebbings? How does fusion, how does geothermal, how does new energy resources and innovations within kind of their extraction? How does that rearrange international relations, do you think?
26:47 Speaker 00 Well, if we can reduce our dependence on oil, we can dramatically reduce international tensions and what are called strategic interests. There's so much fighting over strategic resources like energy. The minerals and metals is the other area. We can eliminate that tension. Imagine the following. If you take every coal plant in the country and its boiler, the coal boiler or a natural gas boiler, is replaced every five to 10 years. If you could replace it with a fusion boiler, you wouldn't have to build 5,000 new power plants in the US. You just have to build 5,000 new boilers, which is less than the number of Liberty ships we built in five years during the Second World War.
27:32 Speaker 00 That's how you achieve these at scale and completely change industries and our source of power by being clever about it.
27:39 Harry Stebbings? I had Larry Summers on the show not too long ago. And he said that China is a prison, Japan is a nursing home, and Europe is a museum. Do you agree with that statement? And how do you think about that with regards to the discussion we just had on how energy changes international power flows?
27:57 Speaker 00 I think what Larry was probably talking about was demographics. Europe is an aging demographic. China and Japan are rapidly aging. Think if I read right, by 2040, which is 15 years, 17 years, years from now, the average age in Japan average will be 54 or something like that. The world needs younger people to have a vibrant society. And what is called the dependency ratio, the number of people working to support each person not working, whether they're elders or kids. That dependency ratio in Japan, China, most of Europe is heading in the wrong direction. The US has a reasonable demographic. India has a great demographic.
28:40 Speaker 00 You know, the Mideast and Africa have good demographics. But this anti-immigrant sentiment will hurt these European countries from really renovating, invigorating their societies. That's a complex problem.
28:56 Harry Stebbings? Why are you so bullish on India moving forward? And will India develop into a tech giant, do you think, in the next five to 10 years?
29:05 Speaker 00 What I love about India is the demographic is young, with a huge focus on learning and education. Now, there's India's pretty significant problems, I think. Leaving a population like the Muslim population behind in India would be a huge disaster and could completely change the optimistic projection I have for India. If if we leave a part of the population behind and that becomes a source of violence, rioting, things we've seen. But generally, a well-educated population and a core set of technologists in English as a language, a common language, Western values, democracy as a value, all those make India a pretty good candidate.
29:50 Speaker 00 Brazil's similar in many ways. So India's not the only country with that advantage.
29:56 Harry Stebbings? Do you think the US and the rest of the world will be increasingly reliant on Indian-born tech talent, given what you just mentioned there in terms of the amount of young people and their talent?
30:07 Speaker 00 The great thing about technology is you need to develop it once and deploy it a hundred times. You know, you go discover an oil well, you run out of it, you can't scale, build a million of those. If you build a bipedal robot, you can build a million of those. Yes, technology talent is going to be important to make the world a better place, but the talent can be anywhere, and I think India will be an important source, or can be an important source with the right policy. Everything's subject to right politics and right policy in the country.
30:40 Harry Stebbings? You mentioned music there and content. I have to ask about that. You know, you've been a long supporter of content creation by AI, specifically in music, for many years. And you tweeted before, "Music won't require personal musicians in 15 years, and your favorite artist will be a personal algorithm." Can you take me inside your mind here, Vinod, in terms of how you see the future of music with AI at the heart of it?
31:03 Speaker 00 So we invested in this area also five years ago, and some founders from Australia came to me and said they wanted to build a top 10 music hit generated entirely by an AI. We're not there yet, but you know, splash.ai will let me be a rapper. In fact, I was able to sing a rap song at my daughter's wedding because of AI and my terrible singer and a terrible rapper. So I do think the Taylor Swifts of the world will still be there. I'm not suggesting they will disappear. Artists and phenomena will be there. Their creativity will be dramatically enhanced by AI. It's like getting a much more powerful tool at their beck and call.
31:45 Speaker 00 They can try 100x more variants of things they like or don't like or wanna guide the experience to. So a Taylor Swift will always be an experience. But Splash AI has become one of the largest music games on Roblox, where every 13-year-old can also create their own music. I think at some point you might want music for your brain, the way your brain works and the music you like, for a quiet walk or when you wanna get energized before an athletic event and be personalized to you and can be personalized. It may be an adaption for something from the old days of Elvis, or it could be something brand new and completely original.
32:27 Speaker 00 I think people are very narrow-minded when it comes to imagining how music might be used and enhance people's lives with the help of AI. I think it'll be a powerful tool, both for musicians and individuals, empowering them to do things that they couldn't. If I don't have the voice, doesn't mean I shouldn't be able to play that music.
32:47 Harry Stebbings? How do you think about the challenge of verification? With the ability to create content that can be very similar to others, verification becomes the most important thing, making sure that it is authentic. How do you think about that and media rights in a world where content supply could really be infinite?
33:05 Speaker 00 That's a tricky problem. Funnyly, anticipating this world, my wife runs a nonprofit called C K twelve dot org. It's meant to design free content, open source content for everybody and personal AI tutors for every student. And multiple years ago, we changed our open source license to include a prohibition against derivative works. We looked ahead a few years and said, our content will not allow for derivative work, including derivative algorithms that use the content to train on. So we were forward looking. Now, the law in this area is not clear at all. So in splash dot AI, we've trained the music from scratch.
33:48 Speaker 00 There is no YouTube music or any artist's music used in training our AI and it's completely IP free of any artist. I'm excited about music models that don't rely on any IP from any other source. We authored our own loops and stems, voices and all that. And we will also license voices from artists. If Grimes is willing to license her voice, which she has. Then it'll become a thing our users can use as they personalize their music with her voice.
34:21 Harry Stebbings? Where do you think the real money is being made here? Is it in the aggregator, your Spotify of the world? Is it in the rights holder, your universal? Is it in the company that creates it, the creation tools? Where does value accrue in the future of music?
34:36 Speaker 00 In the end, human beings love originality. Where that originality comes from? A little hard to say. Will AI get more creative than your typical artist? Or will artists be dramatically enhanced to have their creativity be amplified? Hard to say. But I think that's where value will accrue from. I'm not sure aggregation will be as important, but definitely at every part of the stack, from the silicon hardware that runs these things to aggregation and anything in between, there will be value creation.
35:10 Harry Stebbings? If it's okay with you, Vinod, I'd love to move into a quick fire round. So I say a short statement and you give me your immediate thoughts. So what single piece of content? Very hard question, apologies for this. But what piece of content has had the most impact on you?
35:24 Speaker 00 A few years ago, I went to a Taylor Swift concert. The concert was great, but standing there watching the experience and the performance, I could think of five ways in which you could enhance that experience. For example, with the display behind her where she was much larger than life, you could see fully holographic displays. You could see music enhancement in many ways. If I were to pick one thing, I would say on the entertainment side, that had a very large influence on me. You know, in the AI field, it was different. In the AI field, seeing some of the early examples of wow, that's now possible,
36:07 Speaker 00 even if it's not reliable yet, that was pivotal for me and got me convinced AI was at the stage of a Cambrian explosion. I remember vividly going to the MIT Plasma Fusion Lab with Bob Momgat, the founder of Commonwealth Fusion, before Commonwealth Fusion. Fusion existed and he had me stand on a chamber and he said below you was six hundred million degrees a few seconds ago. Those kinds of moments are pivotal and it inspires you to say, how can we make this even more pragmatic, more scalable, more real, more creative?
36:42 Harry Stebbings? You mentioned Marc Andreessen at the beginning with that Saturday morning meeting. We see Marc Andreessen today, a larger than life figure. What was Marc like back in those early, early days when you backed him with Netscape?
36:54 Speaker 00 He was definitely intense. I remember coming out of the meeting, calling John Doerr and saying, just let's just do this. Remember, the internet was this ambiguous thing. And so I remember the intensity, the power of the idea and where it could go. It was one of these triggering moments I call instigations for me. That's what he was like. It didn't take very long to decide we should be backing Marc and Netscape.
37:19 Harry Stebbings? Tell me, how do you see the future of transport?
37:22 Speaker 00 I believe as an optimist, we can replace most cars in more cities in the next twenty five years. And ridiculous as that sounds. So I do believe we can replace most cars in most cities. We have a little startup called Glidewise, which uses self-driving the wrong way. I think the Waymo approach and the Cruise approach is nice. It adds functionality. It's not transformative of cities. Self-driving cars used in public transit will make public transit cheaper and faster and point to point and on demand. That's what we're building at Glidewise. We bid on three projects so far. None of them projects we were invited into, these were public transit bids,
38:03 Speaker 00 including the one connecting the San Jose Airport to the new Google campus to the Apple campus. We bid, locked in a bill over the transom and won it outright. To build a public transit system, people say that's crazy for startups to do. But we won three bids now in a row. We haven't lost one yet as a startup in public transit. And remember, these are fifty year revenue streams, very, very long revenue sources if we can get there.
38:34 Speaker 00 Of course, that's always a risk. So I'm very excited about transforming the nature of cities because the one thing fixed in cities is street width. Anything that allows much more throughput, more passengers per hour, per foot or meter of lane width is what's needed because that's the one thing in cities that'll never change. Gradually, we will go from Uber can't pick up and drop off on Market Street to cars can't drive on Market Street, up and down this public transit, or one lane. We designed a public transit system to be bicycle lane width and have more throughput than light rail. I get very, very excited about that kind of an idea.
39:14 Harry Stebbings? You've mentioned some of your incredible investments with Coesler before in this show. When you reflect on the ones that you haven't done, which one stands out to you as one you didn't do but wish you had done?
39:24 Speaker 00 There is so many. I remember in 2007, a journalist asked me about Twitter and they interviewed me and they sourced their questions on Twitter in 2007, I think. And I said, huh, interesting, but couldn't see the potential of it. That was duh. My biggest mistake ever. I was at Sun and Cisco routers were software running on Sun machine. Sun's logo or tagline used to be the network is the computer. I didn't see, and nobody at Sun saw routers as maybe a huge thing, even though we had adapted networking from day one. By the way, the first computer to have standard networking from day one.
40:05 Speaker 00 In fact, in 1982, we had hardware encryption on every computer because it was networked. Do early matters. But I've made so many mistakes. I like to say I have made more mistakes than almost anybody I know, but I'd rather try and fail than fail to try, which is what most people have done.
40:25 Harry Stebbings? I'm probably going to get killed for asking this from your team, but I have to anyway. People chase money, honestly, Vinod, most of the time. You've been incredibly successful. Does money make one happy?
40:36 Speaker 00 All the research is very, very clear. Money helps up to a certain point in society and then is not hugely correlated to happiness. I do think passion for projects makes you happy. Passion for a vision, passion for an area, that makes life meaningful and happy and that's sort of what I strive for.
40:58 Harry Stebbings? Vinod, I've loved this. I can't thank you enough for putting up with my questions. You've been incredible. So, thank you so much for joining me today.
41:05 Speaker 00 Sure. Thanks very much. I very much enjoyed it.
41:10 Harry Stebbings? I mean, what an incredible guest. It was such a joy to do that show. If you want to see the full episode with video, then you can check it out on YouTube by searching for 20VC. That's 20VC. But before we leave you today. This episode is brought to you by Tegus, the go-to research destination for bold investing. Tegus curates expert insights, analysis and financial data to give you powerful perspective for your investment decisions. With lightning-fast access to over 60,000 transcripts across 20,000 companies, you'll discover a wealth of unique insights to fuel your fundamental research, gain perspectives, synthesize information and even model outcomes all on Tegus. As a 20-minute VC listener, try it for free at tegus.com/growth.
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43:38 Speaker 00 As always, I so appreciate all your support, and I cannot wait to bring you an incredible episode on the state of the seed and series A and B market with Jason Lemkin on Wednesday.
Previous 20VC: Why "Hire Great People and Get Out of the Way" is Total BS, Why Your Upbringing Can Make You a Worse Leader & A Bentley, Two Nissan Cubes and Becoming One of Macedonia's Largest Employers; The Story of Slice with Ilir Sela Next 20VC: The Memo: The State of the VC Market: Why Seed Funds Can't Invest in "Hot Startups" Anymore, Why Series A & B is Terrible, Why the IPO Market Will Explode in 2024 & Why VC DD is BS & Every VC Has More Fraud in their Portfolio with Jason Lemkin Page updated September 29, 2026 · transcript and summary are machine-generated
