I've never understood why rational people believe in God.
It just makes no sense. I didn't sour on philanthropy.
I soured on the efficiency with which philanthropy works.
Are you going to go all in for AOC in the president?
I I feel like you're much more of a Don't your fellow venture
capitalists want to murder you over this?
Is Vinod Khosla in 25 years a socialist?
He called technology as religion before AI existed.
Now he thinks it can deliver something no religion ever
could. Material abundance for everyone
on Earth. Today I'm talking to Vinod
Khosla, founder of Khosla Ventures, one of the earliest
VCs to bet on open AII. Couldn't get my head around why.
He seems to. Support tons of liberal programs
but hates AOC and Momdani. We're talking post capitalism,
the Silicon Valley New Deal, and why this billionaire thinks a
little differently from his friends in venture capital.
I'm Eric, author of the newcomer Substack, where I write about
startups and venture capital. Now let's get into it.
I was looking at an old 2014 interview you did where you said
technology is my religion. And I think that dates back.
You know, I think that was a take you started cooking up
maybe in the early 2000s, and now we live in this world of AI.
Obviously, you were the first venture capital investor in AI.
Feels like AI could create a religion of its own.
Yet is technology still your religion?
It is. And you know, I've since I was a
little kid, I've had an opposition to religion because
especially in India, it's about manipulating people to do do
your bidding and really give you revenue.
If I look at the Catholic Church, all the money collects
from all over the developing world.
It's just criminal in it goes into golden accompaniments in
the Vatican. It's a poor use of money.
When you look at technology, it has the ability to benefit
humanity in a way no other technology does.
If I look at where we are today, probably 10% of the global
population has a rich lifestyle. And by rich, I mean rich in
housing, rich in healthcare, rich in entertainment, rich in
transportation, rich in education.
If you get to 100% of the population, being rich and
everything will destroy the planet.
If you do it the way we've done it for the top 10%, ten times
the number of cars, 10 times the number of amount of cement or
steel or energy or everything else, the only solution that
necessary, it's not sufficient. It's, it's necessary but not
sufficient, is to have technology multiplied resources.
And in fact, I've long believed that and said technology can
help. And with the advent of AI, which
was not really a thing when I first said this, it's become so
real to me that the world can be such a different place in the
next 25 years. By 2050, we can have a very
different world. There's so much we're going to
entangle, I think with this one idea, right?
Because there's the piece of it that is improving quality of
life, really the main thing we can sort of deliver to people.
Because I think we're also in this crisis of meaning.
There's the climate element, there's the how technology,
what, what it's like, you know, to be a billionaire 100 years
ago and whether that's better, you'd rather be alive today or,
you know, the Super wealthy of 100 years ago.
So there's so many pieces of it I want to get into, and we will
get into just the first. When you say it like technology
is a religion, you don't believe in God, right?
I don't believe in God. Yeah, we share that.
I, I grew up, my mom's partner was a Unitarian Universalist
minister in Macon, GA So I was very much, you know, the liberal
moms in the South arguing with people about, oh, there's no
God. I literally in public school
have teachers on the board trying to which I love trying to
make arguments for, you know, religion because it was, you
know, so I, I share that sort of, yeah, not not believing in
God, but I think at the same time, there's this crisis of
meaning in the country right now.
Do you think technology in the technology industry can really
like, give them, give the public sort of the meaning they crave
and it's just like improving their quality of life the same
thing as giving them an answer to this question?
So those are very different questions, right?
I I've never understood why rational people believe in God.
It just makes no sense. I believe and admit there's some
infinitesimally small probability God exists, but
there's no proof. In fact all the proof is to the
contrary. But you still have to allow for
a probability that's very very low.
But if you're rational, you believe in the highest
probability things, which is no God exists because there's never
been proof of God. Why do people believe in it?
Because their brains have been programmed from age 3 or 4 to do
this and this. So being religious is being
programmed by an ecosystem. And so my world view is meaning
shouldn't come from being programmed, then you're a slave
to God and open to exploitation by religion as a surrogate for
God. I'd rather say what are you?
What are you programmed to do? And I won't go into the meaning
of life, but. That is sort of what I'm getting
at though, because I get certainly I agree with you, we
shouldn't let me. Explain that a little
differently. What should the brain brain be
programmed to do? In the old world, there was
religion. It was the only way to keep
people under control. In fact, 500 years ago, you
couldn't even get to a remote location, maybe by horseback.
It took five days. You couldn't enforce any laws
and so you had to have the fear of God in people as a law
enforcement mechanism to be good.
Otherwise God would punish you. So maybe it even served a really
useful purpose a long time ago of law enforcement was the
purpose of the fear of God. Today, and if I look at last 50
years, what do we program kids with?
We program kids with if you're 5, go to school, do your
homework, do well, you go to college, you'll get a good job.
So all of it is about income and supporting yourself.
It's not about meaning. I think what changes
dramatically, yeah, is for today's 5 year old child born
today. I had a grandchild born 2 weeks
ago. You.
You had a grandchild. I had a Congratulations.
I have a. Seven month old daughter.
So I'm I'm new to this game not but it's it's an exciting time.
It's amazing. It's very exciting, I.
Mean meaning at the moment is reading a children's book like
if you, if I had to ask directly, like what is meaning
in your life? It is, even though she doesn't
really understand it right now, just having her pay attention
and reading a book with beautiful art and rhyme and
human language. So that is different kind of
meaning whether you're a human being or an animal.
Looking after a young is just instinctive.
Otherwise we wouldn't multiply as a species.
So what will my grandchild, when they're 5, be programmed that
hopefully to be human, to care about the things that today
people don't have time for. Looking after their kids,
looking after their grandparents, parents, the
relationships that matter. I think that should be meaning
striving to be whatever you want to be good at.
And this could be pretty random. I want to be awesome at surfing.
I want to be awesome at singing. I want to be awesome at
painting. I want to be awesome.
Are you? Are you?
Post capitalist now because you're you're saying that the
story recently was do all the right things, climb the ladder,
get a great job. Now you're saying go surfing,
spend time with your family? Like is this?
Post I'm saying for the first time kids born now we'll be able
to exercise freedom. Look at most of the jobs in this
country today. They're not jobs.
They're not meaningful jobs, even though people call them
meaningful. If you're a farm worker in
Salinas in 100° heat picking lettuce 8 hours a day for 30 or
40 years and then don't have retirement income.
So you depend on your kids. That's not jobs.
If you're if you're assembly line worker at General Motors
mounting a tire on a car for 8 hours a day for 30 or 40 years
or till your back gives out, that's not job.
That's servitude to survival. I think that's what it is.
So do you think the American social contract, like if you're,
I'm going to spend time with my kids and surf, should America
provide you healthcare and and the basic standard of living?
Or do you need to still find, even if it's just 10 hours a
week, something that the economy says is meaningful?
Well, first, in 25 years we can have great abundance so people
don't have to strive for a living.
They don't have to do everything so they can pay their mortgage
or support their kids or feed their kids.
And it's sad when you have to do that, but it's necessity today,
an economic necessity that will go away.
I think all goods will become abundant almost every level.
You'll have so much abundance. Distribution won't be an issue.
People will still be people. People love competing.
So today it's I have a bigger house because I have a better
job and I can do more. I think it'll be competing in
the Olympics, It'll be competing in X Games or.
You're saying that's where we'll get meaning or that's where
we'll get money? That's where we really get
meaning, because competing is a human trait, right?
We will. Still need money to allocate
like 0 sum resources like houses.
Yes, there are few and housing is the one area that is the
hardest to see how it's dramatically impacted.
I could see the cost of housing going down by 20 or 30% and we
we can go down that alley later. It's it's hard because it's so
much physical goods. But will we have shortage of
copper or lithium? No.
So is Vinod Kosland, 25 years a socialist?
I believe we will have so much abundance and depends on how you
define socialism or capitalism. Socialism is not everybody
shares equally. My personal view is everybody
gets a best level of guaranteed lifestyle provided by the
government and that's the socialist part.
But then they can do more whether they choose to pursue
more income or their passion and happens to generate income.
I I don't think Beyoncé got into singing for making more money.
She got in because she has a passion for for singing, but it
also happens to generate money. So I do think people will
follow. For the first time, kids born
today will be free to follow their passion and be more human
then they've been allowed to be in the face of economic
pressures. I think that's the big
liberation. AI will free humans to be humans
and do what they come naturally, spend time with their kids,
spend time to their parents, spend times on their passion I.
Think there are a lot of people watching this that are going to
say why not cash in now like we have a technological abundance
today, you know, we could produce the food that we need.
Why not sort of create the utopia today?
Why is it always sort of, you know, a couple decades from?
Now today, there's a distribution problem.
OK, because goods aren't cheap, you know, there's no question in
in a few years, even now, you could provide free primary care
to every citizen in this country, in fact, every citizen
of the planet, All billion and a half people in India could get
free primary carefree. This is like a bridge.
Open evidence you're you're saying use.
AI Yeah, I'm, I'm saying AI doctors, not AI tools, tools are
for humans to use. I think we are past that.
Free AI tutors for every child. And I'm doing such a project in
India to make free AI tutors for every child.
It's a non profit effort. Free AI doctors for every
person. And it's not only just the
primary care doctor, because the same AI is also a great
endocrinologist or a great gastroenterologist, AI
oncologist, Everybody gets that and it's almost free.
It's cheap enough where one person can do it for a country
like India. And I hope we can do that,
though I'm also doing an AI agronomist for the small
farmers. So those things should all be
free. Entertainment should be near
free. The cost of production is going
down dramatically. People talk about AI slop, but
it's on the learning curve of improving at such a fast pace.
Soon we will have AI that's tuned to each person that they
love based on their watching history and maybe their rating
history. So entertainment, legal
services, so people can access their legal rights, education,
healthcare, those can all be free.
Anything that relies on expertise will cost a dollar an
hour. I mean, a key insight here is
the things that don't require asking another person to do work
for you, where where something can be autonomously provided is
something that can be a benefit versus, you know, sometimes the
socialist case goes wrong when they're sort of insisting upon
other people acting on their behalf and taking their time
for. Themselves and relying on the
efficiency of people doing things because people have other
motivations. AI will be just as efficient in
government as outside. You know, it's something people
haven't got. Efficiency comes from humans or
inefficiency come in in government comes from humans and
bureaucracy and all that. All that can be automated way.
So my view, we entered this world of abundance.
And back to your original question, where will people
follow meaning because they will be programmed from age 5 to be
express their desires and be themselves, whether it's their
relationship with their parents or it's a relationship with
their passion for sports or art or something else.
I think that's it's a very liberating kind of it's.
Very structured. It's very you're, you're sort of
trusting the average person to create their like self story.
I feel like a challenge of the Trump world is that people want
these leaders that, you know, you know, fascism is appealing
because it's like the strongman leader who you can project all
these views onto. Like who do you think like
should be our societies like heroes today?
Who are our heroes today, right? I would say used to be, you
know, I like to say used to be only the basketball stars,
right, The sports stars. And then when entrepreneurship
really became a thing in the late 90s and it was existed long
before then, but people got to recognize a Larry Page or a Mark
Zuckerberg and they became heroes.
So lots of people started thinking they could be they
could be an entrepreneur. I think the next big turn first
most of corporate America should be 4 times more efficient, which
means to get the same amount of goods and services, maybe 1/4 to
110th the number of people for enterprise in the what happens
to the rest of the people? They can be micro entrepreneurs.
How many people want to work at IBM's 4 levels down at a desk?
Or would they rather be their own boss?
I think micro entrepreneurship becomes trivially easy because
AI does your accounting for. You like I'm a hero, I'm a sole
or now I have a small team from small business owners and.
All the whole creator phenomena is because it became easy to be
a creator if you had some talent.
And so we've seen millions and millions of creators created
almost overnight in the last couple of years that projected
forward many, many times. If you're a great Baker and make
the greatest bread, it's very hard to be in business.
You have to get an accountant, you have to get a lawyer, you
have to incorporate, you have to know marketing, you have to know
sales. You got to know all these
things. If AI does all those functions
and there's start-ups that say will will the creator in the box
where you're the creator, everything else is taken care of
you. That will happen for every micro
entrepreneur, whether you have a passion or skill at carving wood
or baking or entertaining, it doesn't matter.
I would guess by 2035, ten years from now, that's a very short
time, we will have 1/4 the number of corporate employees,
maybe less and we will have 50 million micro entrepreneurs
doing their thing, being their own boss and some people won't
want to there's. Actually a lot of work, you
know, being a micro entrepreneur, you know, today
it's easier to be an employee, you know, you make more money.
It's obviously amazing to be able to run a business and you
can sign a big deal and make more money.
But it is a lot of work. Back to the meaning of life.
I don't think people are afraid of work.
They're afraid of work, working for a boss who doesn't
appreciate them. And most people in the country
would say that's true. Most people in the world would
say that's true. I think what matters is when
people have agency, and that agency is being a micro
entrepreneur, doing your thing, You're the boss, you're
responsible. People love taking
responsibility. I think that's where meaning
comes from, from more people and their life will be more
meaningful than working in a cubicle or an assembly line.
Or on a farm you've. You've, you know, looking back
into the 2414 article, I need to, it's like the business is a
publication in India. I can't remember exactly the
name, but you, you were early to be sort of soured on
philanthropy. I think the tech industry sort
of has grown more sceptical, though now you're talking about
some philanthropic efforts. I did sour on philanthropy.
I soured on the efficiency with which philanthropy works.
There's a big difference. I think there's great pleasure
in giving. There is, but if it's really
inefficient, then it doesn't appeal to people like me.
There's plenty of people who don't care about efficiency and
say you. Just don't want a bunch of
bureaucrats taking the money along the way to whatever.
Consultants and people writing reports and.
Right, because then you're effectively when you're creating
the misery you're trying to get rid of, it's.
Fully leads compliant. It's not lead certified.
Why? Because there was 5 consultants
who wanted to have a take at certifying it on this or that.
I hate that bureaucracy. So I'm not leads qualified.
I don't care. I'm happy to know how I built
the building and how sustainable it is, how climate efficient it
is. That's all I care about.
So I think people have have motivation more internal than
external, and they will do what they have a passion for and they
have much more agency. I think agency is the key to
human meaning. You have agency to do what you
want and the freedom to pursue it because your basic needs are
taken care of instead of today's jobs, which are for more than
50% of the jobs in this country, service you to survival.
Everybody can't wait to retire. Yeah, I, I just, I feel like the
first of all, people always shift sort of the minimum that
they want to meet all. That will happen.
But you know, I just do think goods.
Will be infinitely flexible. The services you need will all
be free and infinitely flexible, other than token costs and power
costs for tokens. Yeah, I do think the challenge
is it's all, it seems like it's always we're almost there.
You know, it's like, I mean, looking back, I think you said
in that 24 interview that I'm really latching onto, you said
in 15 years everybody would be able to get the quality of care
you could get at Stanford, yes, which you still have time, but
do you think that's going to come true?
Absolutely 2040, I had projected 2040 OK and I think it'll be way
before. I think this is 2029 but.
I I wrote a long paper on healthcare called 20% Doctor
included in 2016, which is when I published it and I projected
2040 and my part was. Somebody was like, oh, give
yourself a little bit more wiggle room.
You had a good advice. No, I.
Assumed 3 eight-year cycles. In fact I called it V1V2V3 all
the way to V8. If there were three-year
innovation cycles and it'd be 24 years or roughly 2040.
There's not great precision in any of this.
In fact, all of what I projected happening much faster.
I won't say who somebody from the healthcare establishment
won. The better known names had been
critiquing me for the last 10 years for this projection came
to me last year and said he was wrong.
He's a public health policy person.
He was absolutely wrong. I was wrong, but I was right.
But I was wrong in projecting it take much longer.
So I think he would say today and we're doing a joint
publications, so I won't so publication in a medical journal
together saying AI will do doctoring better than doctors
is. We're already seeing some.
We've seen lots of examples of that.
And my sense is doctors are embracing.
I mean, they're overworked, you know, they want to get the right
answers. They want to help people.
Are in a different business than they thought they would be when
they were in medical school. Most doctors got into medicine
because they enjoy taking care of people, right?
Today, they're slaves to billing.
You are at the hospital, you're billing, meeting billing codes,
not what's the best patient care.
And what empathy. Empathy isn't the characteristic
that's optimized in medicine today and most doctors got into
it because of empathy for people who needed help.
I think that's true of the majority of doctors, not 100%
and some percentage have still mostly work on empathy for and a
sense of service so. Look, just a direct question, do
you support single payer healthcare today?
Today, absolutely it'd be a fraction of the cost if we had
single payer healthcare and rapidly declining costs if we
did that. I think we're people are wrong
is to assume that single payer will be too expensive.
The cost of healthcare in this country, the $4 trillion could
easily cut, you know, and it's a, it's, it's on a pretty strong
inflationary cycle that'll become rapidly deflationary if
we had single payer. Why can't you get?
You know, the sort of right, you know, can, can you get Keith
Roboy on on board with that one or like what's the resistance
among sort of your, your fellows in the tech?
Industry, there's a general assumption because there's no
proof that single payer will become inefficient and fraud and
all those things. The thing is, if a doctor costs
a dollar a month for every American, imagine it costs a
couple of $100 million a month to give free doctoring to every
American. And that means primary care.
It means gaps in care, it means chronic disease management, it
costs means mental health for a dollar an hour.
How much downstream cost would you reduce today?
All the incentive. All the incentive.
Why is every hospital system start with Stanford or UC buying
small medical clinics? Not because they want to run
them well, they want to feed off their cardiac patients, right?
Are you going to go all in for AOC in the president?
I I feel like you're much more of a less than you even sort of
see yourself. You're to support single payer.
You want what you said you want capital gains taxes, income tax,
which would be dramatic. Here's here's the problem with
AOC. She has this model of the well
off against the not so well off that is not.
You want to be. You just don't want to be
villainized. If you weren't villainized,
you'd be OK with it. No, I think what I'm for is what
technology enables in this country.
In the next 10 years, basic services become so cheap we
don't need to meet around. I was in the board of a Telecom
US West quest when I argue that it was costing them more to send
the paper bill to people's homes than to provide the telecom
service and stop charging. By the minute 90s almost
everything was built. Every phone call was built by
the minute and today every medical visit is built by the
visit. That should go away.
I don't understand how does this connect to the AOC point.
To the if things are cheap, then you can give them.
I still do think AOC doesn't care about economics and there's
plenty tax people. That's just the wrong approach.
I think what's the right and and and you know, AOC and Bernie
Sanders all said, let's not let people lay off jobs like those
are all the wrong things in the intermediate thing the.
Pro union lock in jobs, not like a dynamic economy.
That's a really bad way to run an economy.
It'll sink the economy before we get to abundance.
If we free up the economy, and I'll come back to this point and
protect people against their biggest fear, which is AI will
cause my job to be lost, We protect those people, then we
can have a very efficient economy.
All of corporate America getting much more efficient.
The revenue per employee, every CEOI meet.
I say within five years you could quadruple your revenue per
employee and every CEO should be striving for that.
And it's very possible. Let's let's do.
It I I just really think like. I still wondering all over the.
Place no, no, I love it. No, no, I'm I'm supporting what
you're saying. I'm saying we need a Silicon
Valley new deal. It's like you get single payer
healthcare. We reform the tax code.
We say, oh, there's a minimum quality of life every American
can have. But in exchange, we're not going
to be super pro union. We're not going to sort of jerk
around companies and it's going to be about sort of minimum
government standards instead of sort of distorting capitalism
and stopping companies from being able to be dynamic.
We shouldn't. Distort capitalism, but we
should recognize capitalism is by permission of democracy.
You know, we really get a mumdani elected.
My biggest fear is we get a mumdani elected, AOC runs for
president and there's this anti AI backlash for fear of jobs
that elects AOC. You know, look, Trump got
elected because people were fed up with the nonsense of
everything became ADEI issue. DI went to extremes that it
shouldn't have gone to. I can't use certain words.
I I I can't even. Nothing Americans say more than
being told what they can and can't say.
Yeah, that that kind of nonsense went so far all because of the
extreme left. And there's different
constituencies even in the left. Ma'am, Donnie, you know, I live
in New York City. He has taken a very pragmatic
approach that to succeed in governing from the left, you
actually have to deliver results.
You know, he brags about the potholes.
He talks about public safety. I really do.
I didn't talk about where he's going to get revenue.
He wants new taxes. I mean, I'm sure you would sign
on to your capital gains one he's trying to do get a terror
taxes. There's rational reasons and
irrational reasons to do this. OK, for the next 15 years, so
let's say to 2040 before we get to abundance in 2050, we want a
fair economy. What is AI doing?
It's disadvantaging capital, boosting the returns on capital.
That's why you get so much more investment going in.
It's suppressing the results for Labour.
So Labour is 16 trillion of the USGDP.
That will keep declining. And I think we could, if we let
systems be efficient and let every corporation do what they
want to do without people embarrassing them against
layoffs, we'd have it. Labour be, say, 5 trillion of
the US economy in real terms. That much decline in labour is a
big, big deal, right? OK, but you agree.
And guess what? Who gets the benefit?
Capital, right. And what do we do in our tax
system? We favor capital over labor.
Why are ordinary income taxes much, much higher than capital
gains? Because we we've got all these
tax breaks, every tax break, and there's ten of them I could
point to, is worth thirty, $40 billion to the US.
Country. My, my point is the things
you're saying right now are things that bring you closer to
AOC Mamdani. And my point is that I.
Believe the thing that. Turns you off most about them is
that they villainize the billionaire class, but actually
you have a lot of policy agreement.
No, there's not policy agreement.
I'm not saying slow down layoffs like Bernie Sanders.
Is right you're saying smaller companies Yeah has been very
anti AI I feel like. AOC I'm done.
It's a little bit efficient. Right.
I'm not talking about Bernie specifically because I agree.
Bernie is that sort of old school, sort of like union.
But look, we can't constrain people from laying off people.
If you're going to have an efficient economy and compete
with China, like that is our big bugaboo.
We have to compete with China globally, so we don't want to
constrain capitalistic efficiency, OK?
What we want to do is say all taxes, whether you earn it on
capital or income, have the same rate of return and we will cut
more so the tax breaks out. If we just did that, we'd have,
my estimate, $400 billion a year.
Don't your fellow venture capitalists want to murder you
over this? This is like the number one
thing the National Venture Capital Association has to
fight. It's like keep carried.
Funny fact, we should go back to that topic because it's a very
important topic. But I've never been a member of
the NVCA and I've they made multiple attempts to get me to
be a member of the NVCA. And I've said for 20 years, if
you will not advocate for carried interests getting
special treatment, then I'll join the NVCA.
If you're at, if your principal job is to advocate for carried
interests getting special treatment, I'm not joining the
NVCA. I'm not a member.
You're probably the only major firm that's not a member of the
NVCA. I've had that principal for 20
some years. Amazing.
I didn't know. That yeah.
So very few people know that because these principles matter,
right? So going back to this issue, if
we equalize capital gains and and ordinary income because AI
is favoring capital over labour, then we have 400 billion a year
or so to take care of people who are displaced by AI, to allow
people to be displaced, which I think is what capitalist
efficiency is about. You need to take care of them.
And you know, COVID cost us about 250 billion a year when
there was mass unemployment, that was roughly the bill for
annual additional bill for COVID unemployment.
It's something like that. It will happen gradually over
the next 10 years. It's not happening suddenly.
And so between equalizing taxes, I'm saying we have reverse
taxation against, you know. I, I agree, I think many people
listening to this, I think it's a great point and I get.
Why should one get which is being favoured by AI get special
treatment? Look, MLPS are worth 30-40
billion a year. Step up bases in estate, that
planning, and all this worth 30-40 billion a year without
even getting to any inheritance tax issues.
There's all these tricks, a dozen of them, worth 30 to 40
billion a year MLPS. What is MLP?
Master limited partnerships, so oil and gas or housing and like
there's all these things that have been engineered through
political influence to favor people, but has nothing to do
with capitalism. They have nothing to do with
capitalism. They're SPECIAL perks engineered
in because I could afford to make a controversy.
Republicans are never going to fix this issue, right?
Your only hope of fixing this issue is aligning with
Democrats. Do you agree with that?
I think it's an independent who takes a new view I I want.
The United States to set up, you know.
So, by the way, I've never been a Democrat.
I know, I know, I know. I'm an independent.
Free marketer who became more sort of because of environmental
policy that that moved you a little.
Bit I was a Republican most of my life because I thought fiscal
was the most important. Then I added climate to this and
the early Republicans or both the Bushes were pre climate
action. It's a long term risk, just like
Homeland Security is a risk. We should spend a certain amount
on risk insurance, whether it's for climate or Homeland Security
or National Defence. That's my view.
But that's not where the Republicans ended up.
So I became an independent. But back to this issue.
If we could do equalized taxes, get rid of special breaks, we'd
have 400 billion a year. Add to that a token tax
intelligence, which is what AI is, you get to a trillion
dollars a year that you can use to support the people who would
be displaced. So instead of slowing down the
economy and saying stopping displacement, let's let the
economy be efficient, but let's find other ways to take care of
them and encourage things like micro entrepreneurship.
Do you think open AI is going to align with this?
I mean, they put out with Chris Lehane a policy paper.
It was pretty progressive, but then they're also supporting,
they're supporting some, you know, I don't know, anti
Democratic, you know, effort. So I'm sort of confused where
they're actually going to spend their.
Energy I would guess, and hopefully they'll call me.
Sam would support token taxes? I've asked him I suspect Daria
would support token taxes on intelligence because they both
see the impact it can have and good impact, as well as ways to
reduce the negative impact of AI.
He's a subtext of what you're saying for the listener is that
we're going to have a new class divide problem, which is
intelligence is going to be something you can easily buy and
that reinforces the power of capital even more because you
can spend money and get intelligence and that further
advantages people. Without with this, I suspect in
this world a farm worker gets paid the same as an oncologist
because they're both up skilled to the level of the AI.
So it's it's the capital, it's the money holders that are at
the biggest advantage. It's probably by 2050 we have
the greatest opportunity we've ever had to have equality.
What happens to a few percent of the population?
Who? Owned AI.
One of the great human problems is, you know, who gets to live
on Central Park or whatever, You know, I, I don't know if we saw
we just because we have abundance, we do we care more
about abundance or do we care about relative status?
I do think in a world of great economic efficiency and AI based
abundance, we start to pay more attention to equality, which we
have not done under capitalism, and say we'll sacrifice some
minor level of efficiency to get much more equality in society
and society. I suspect we'll be happier.
More equal societies are happy both in the rich people and the
not so rich people. I want to change gears slightly.
I mean, one, and it's sort of already come up, but one of the
things you want to animate, animate the United States right
now is sort of a rivalry with China.
And part of what you're using to justify that is the sense that
America is a great democracy. We should protect democracy.
China, you know, is a totalitarian regime.
You know, I agree. But it feels like the American
democracy is under a threat right now.
Like what is your sense of how you know, Trump is literally
joking? And I know you're anti Trump,
but Trump is literally joking. Joking, you know, that he'll be
president in six to eight years. Still, like what?
What do you? What is your view on how secure
American democracy is today? Look, there's a great book on
this I'm trying to remember by Russ.
I think it's Russ. Feingold was the senator.
That is the senator. I'm not sure what you're
talking. About he wrote a book on
democracy in peril or something like that.
I buy his thesis that we are. We are not as safe in democracy
as we'd like to be. Institutions are no longer safe.
We have the era of individual individuals like Trump.
So I don't think we are safe. I don't think Western philosophy
is safe and Western values are safe, and we have to fight for
that. And that's why I think winning
against China is so key. What political philosophy the
world adopts will depend on who wins the economic race, and that
will depend on who wins the AI race entirely.
So that's why it's so critical to win the AI race.
Why? Why it's important we win the
economic race and bring benefits to the rest of the world with
our. You see a distinction between
Western values and Western democratic values.
Are you drawing a distinction? There.
Not really. I mean you can get endless.
Right. Are you still largely like
you're pretty opposed to open source a couple years ago?
Is that still true? I'm not opposed to open source,
so remember I was at Sun when we started the open source
movement. But AI open source.
NFS was the first open source product.
I feel like Son was responsible for making open source happen
and starting with the files, NFS file system and then open source
operating systems and all that. And I was a huge investor in
GitLab and it was four people. It's open source and.
But today, are you comfortable with your portfolio companies
using Kimi and Deep Sea Kimi? I'm not.
OK. So I'm not because I think
China, we are too open to subversion.
And when we open source, and I had this debate with some of the
executives at Facebook when they were open sourcing llama, they
were feeding technology to the Chinese and it has helped them
catch up. Now China's smart population,
they'll catch up anyway. But we shouldn't be helping them
catch up. And we should stay at least a
year's breath ahead of them because I think our fundamental
system is superior and we have the talent.
Now they have the talent too. But many more of the most
brilliant minds on the planet want to move to the US or did
before Trump instead of moving to China.
And so I think that was one of our strongest assets in staying
ahead. And Trump has killed that, to be
honest. It's.
Terrible. I mean getting Chinese
administrators. Ever done to this country long
term is making it less attractive for the best talent
in the world to come to this country and keep us ahead.
And it's insane that Elon is one of his biggest if not biggest
funders and Elon's companies are full of immigrant founders and
is highly dependent and he's an immigrant himself.
There's hardly a successful company in Silicon Valley that
doesn't have immigrant founders and in some key role in the top
management. And it's one of the things that
makes, you know, America great in my view.
I mean, I like if I'm really pressed on, like, you know, I
asked you who the heroes are. I mean, some of the people I
think about are like, you know, Sundar Alphabet and like Satya
Nadella, Microsoft, who have been great stewards of important
companies that it feels like through a terrible culture
shift, you know, are real stewards of institutions that
provide no. Great value, done a great job
and immigrant founders have had immigrants have had a huge role
in the knowledge economy. In fact, immigrant doctors, we
have a huge shortage if you didn't have immigrant doctors.
So no matter where you look, do you?
Try to talk to Elon about you. Talk to him occasionally or not.
Much. Not a whole lot now.
He used to be like, oh, I have this space company or you're,
you're on the outs at this point.
Look, I'm not afraid to call him when it needs to be called.
Look, the nice thing is I can't be fired.
So I don't worry about, I never worried about a career because
it's just done fine for me. I've never create feared about
the things other things fear, which is somehow but.
You don't. I don't imagine you want to be
on his list of Twitter people. He just like spices randomly or
like you've avoided the mass public sort of Republican
animals. Yeah, I'm, I'm, I'm probably
avoided that. But you know, look, I admire
Elan for what he's done. Well, as an entrepreneur, he's
done a great job. We wouldn't have electric cars.
We had we left it to General Motors.
We wouldn't have had space launches, though.
I'd say Rocket Lab or one of our company deserves as much credit
if it wasn't for Elon and we had relied on Boeing or Airbus or
somebody else to do. This is a business question, but
do you think the SpaceX IPO is going to take down the whole
whole mania happening right now? I know it just the expected, you
know multiple on revenue is like ludicrous.
I don't care about Wall Street. I don't care about prices.
I don't. The reason I don't care is
people think that's reality. It's not reality.
When people talk about a bubble, I say a bubble in whatwasthe.com
thing A bubble? Not if you look at real usage of
the Internet. Look at Internet traffic and
tell me where. You know, yeah, they just
overpriced where I was. Going to go whether investors
bounce between fear and greed and that causes change in
valuation, that's not reality. It would kill a bunch of good
companies probably. If you know the bubble popped,
you know it's just brutal it. Just you can do nothing about
investor bouncing between fear and greed, which is what comes
causes bubbles and busts. So I don't worry much about Wall
Street. I don't trade almost ever.
I just do my thing with companies and frankly, I don't.
I've never in 40 years said I'm in the investing business.
I've never called myself. What's fun is helping
entrepreneurs build companies and helping them with mistakes
you've already made. I made more mistakes than
anybody on the planet when it comes to building companies
because I've been doing it for a long time and I hope I can help
entrepreneurs avoid some of those.
That's my job and that's how I define what I do.
And it's a lot of fun. We're we're.
Recording this obviously as Sam Altman and Elon Musk are
fighting in court right now. You you are the earliest venture
investor in open AI. The the read read often was in
the round, but as an individual right or you guys who got the
bigger sure. That's right.
Yeah. What is I there was a viral
tweet that you sort of knocked down about the returns you've
seen on Open AI. Will you say anything about how
well you've done? I think the the the worry is
that it's been just so dilutive that what should have been sort
of an all timer has gotten diluted.
It's a fabulous return. I won't go into specifics, but
it's been a fabulous return by any metric.
Have you sold some along the way or?
Very tiny amount a long time ago, most most of it internal
between our funds. So you know, do you think?
It will be 1 of the all time great investments.
I think so now my all time great investment was Juniper Networks
where we got 2500 times our money on a $3,000,000 investment
in a world where the largest funds were two or $300 million.
Not happening. It was sort of a fabulous
return. Why?
Because we bet on TCPIB being the core of the Internet when
everybody else was betting on another technology called ATM.
Because the telcos were thinking ATM and Cisco was thinking ATM
Cisco CTO told me they would never do a TCPIP router above OC
12, which is less than my home service today.
So we just built Juniper to be TCPIP for the public Internet.
So that's the best, but obviously you'll make far more
money off the volume of open net, but the level of return
won't be the same. I hope it's 2500 X.
It could be. What what do you make of this
idea Like that you know they stole a non profit or obviously
you were investing when it was becoming a non profit.
You know Sam went outside because Elon failed to fulfill
his commitment to fund the company last minute.
There was no real source of funding so Sam had to go looking
and perfectly reasonable for a non profit to have a for profit
subsidiary. Look no, no desk is set up in
many European companies. IKEA is set up that way where a
non profit owns a for profit in has profit for profit
shareholders. It's just not the first time
it's been done. In fact the best companies in
Europe have the structure of a for profit subsidiary with for
profit investors, but the majority is still owned by a non
profit. It depends on the how much money
they've raised, how fast they've expanded.
It's been a pretty fabulous story.
I mean. Like what is the alternative?
Right, I'm sympathetic to the idea.
To build this AI company, you needed the money.
The only way to get money on that scale is from people trying
to make a profit. Therefore, you needed to be a
for profit if you believe in the mission of delivering a.
Formation is a key function of capitalism.
That wasn't possible. Look, Elon is just jealous.
It's nothing but jealousy that. It's amazing how much he's just
like, desperate to be in control.
I mean, you know he. Wanted to be in control, he
wanted to own. There's lots of things I won't
go into. He didn't have the best
intentions. He definitely didn't have non
profit intentions. He doesn't even care about
climate. It worked out well for him at
Tesla. That wasn't his pitch
originally. Should we still worry about
climate? Nobody talks about it anymore.
We absolutely need to worry. Just because Trump had made it
bad bad to talk about climate doesn't mean it's the problem
has gone away. We've just buried our head in
the sand. We are continuing to invest in
climate as now our view is climate technologies have to be
competitive. We have the best steel company
or beat a coal plant based steel plant any day.
I can build a build a beat a coal based cement plant any day.
So these fundamental technologies have to be cost
comparative. You can't defy the laws of
economic gravity. Our climate philosophy is more
about new technologies that are cost competitive with their
fossil competitors. Fusion will be that way.
We did fusion cement steel. Pro energy you need, you need
energy. It's not about sort of being, I
don't know, like monks. So this is another place, you
know, people efficiency legislation, consume less.
That's the wrong way to approach climate.
Make it cleaner and cheaper with sustainable technologies.
That's the right way. That's what fusion will do.
That's what super hot geothermal will do.
We working both those areas, in fact have the dominant companies
in both those areas the most cost effective company.
Same with cement. Our cement is cheaper than
regular cement. Our steel is cheaper.
Now we have to build large plants to get to those cost
points, and capital is hard to get in some of these areas in
the Trump climate area. But most people would agree with
me that that's the way to scale sustainability, not by saying
it's OK to pay twice as much. Are you cheering for Anthropic?
I cheer for all AI including entropic.
What do you make of, you know, I feel like the Trump
administration in places has made me more of a libertarian.
Like, you know, I, I guess during Biden, I would have been
a little bit more comfortable with the Biden administration
regulating in some at least wanting to be alerted to what's
happening with different models. Now the Trump administration.
Nuanced matters here. We can't have private values
determine what our national policies on National Defence
are. We can.
In fact, everybody in government, no matter who they
are, are required to abide by the law.
They don't always, but they're required to abide by the law.
So if a government agency is abiding by the law.
But it's the Trump administration, an
administration that has no history of abiding by the law.
The the version of abiding by the law is what we can get away
with until, you know, they arrest us.
In 20 years, I agree with that. My fundamental problem with the
Trump administration is lack of values.
So why? Saying let's just defer to
democracy is sort of laughable. Democracy includes first number
one. The main branch is supposed to
be Congress, which has done nothing to react to AI.
So to say, defer to democracy. Well, our our main.
Branch Let's look at the principle.
A private company can choose to sell or not sell.
That's always been true. But that's what Anthropic was
saying we want we'll just walk away.
The the issue was that it was a new contract.
My tweet was I admire Dario for his principle.
I happen to believe that particular principle was wrong
in trying to constrain the Defense Department.
I think building a constitution in the claw, teaching AI to have
values, I mean to go back to sort of technology as a
religion, like one of the commendable things they're doing
is being thoughtful and intentional about the technology
they're building. And in a free market society,
they are one company that is allowed to build it in their
way. I think they're doing in a very
admirable way. And I don't think we should
encourage the federal government to bully them into doing what
they. Want I think the federal
government, the Department of Defense or Department of War,
whatever it's called now has 1 objective.
Not set by Congress. So I think the Department of
Defence is still, by the way, God.
Not lose to Putin or be subject to Putin.
If Putin walks into China, she walks into Taiwan.
They need to be able to defend US and and the western world
against that. OK, I think that discussion
shouldn't lie with a private company, but they should have
the ability to not sell their technology to the Defence
Department or Department of War. Well, that's that's effectively
what they're doing. They're saying we're not going
to sell it. Unless you agree to this
contract. That's why I admire Dario for
sticking with his principles. Right.
But then you sort of bought into this idea that if you're
following the law, if as long as they agree to follow the law,
that's sufficient. But you agree with the idea that
they're not a set of people that are can be trusted to follow the
law. That I I agreed.
That's true. I hope it's very temporary.
Hopefully another two years and we are done with this problem of
defying the law and we recur. We go back to democracy.
Like corruption matters, right? I mean, as a business person,
what do you make of sort of just the, I don't know, rewarding, I
mean the crypto? Is huge.
Does anybody know what happened to TikTok?
Senator Cantwell was on the committee that decided to ban
TikTok or not. I talked to her multiple times
to convince her TikTok should be banned.
She was against it and then came around to believing it should be
banned. There's a couple of Democratic
senators who were key to that, but now it's disappeared into
the abyss. Nobody knows who made what and
who owns it, who's in charge. Fascinating.
I haven't even really. You're right.
Nobody knows. There's.
So many things it's hard to keep track of.
That Santa on the committee waiting for the ban had no idea.
She asked me recently, do I know what happened to it?
I have no idea. She has no idea.
I maybe I shouldn't have an idea.
She should. There's no.
Accountability left. Corruption is just rampant.
Are there any politicians that you're optimistic about, whether
it's the California governor primary, Democratic primary
coming up, independent, any, any politician of any stripe that
you're like, oh, I have some optimism about them?
Let me not name names. Oh, come on.
Look, in the California primary, I'm supporting Matt Mahan over
any of the other candidates. I like him.
I had him on this podcast. Nobody watched it.
You need to be a little bit like dynamic.
I mean, I like him. I was set up.
The problem the problem with mainstream media, but it's the.
Public. It's the public like.
Yes, right. Why did Trump get away with
saying immigrant Haitian immigrants are eating your pets?
Not that he believed it, not only not that maybe the people
in Ohio believed it. It just it enforced the idea are
immigrants are bad, which was his campaign pledge.
So he's a great communicator in that sense, even if it sounds
irrational to some of us that why would anybody believe that?
How can a person be president who says that?
I mean, but. Look, I hope we restore a sense
of democracy and law abidedness in in in Washington.
Yeah, I mean, I like, I like Matt Mahan.
I think he's smart. I I think he's a little, he's in
a weird position where he doesn't want to talk about Trump
too much because he needs to somehow get Republicans.
But I feel like that's a hard path to win and it seems seems
unlikely. I mean, the, yeah, California
governor's race. Do you think the billionaire
tax, you've been less worried about that than some, right?
I think it's really bad policy. I critique Rochana over it.
I think he's taken less of a stance in favour of it since,
but it's a really bad idea. We've in essence reduced our tax
collections over 10 years by all this wealth leaving the state
that would have happily paid ordinary income tax as they sold
their stock. Wealth taxes have lots of
problems. I'm not against more taxes, but
wealth taxes have are a bad idea.
Net net reduced tax collection in California.
The last, last question I'll ask you, you know, you're, you're
investing in all these great startups like companies that
people haven't. Heard by the way.
I just want to say I chose to stay in California and I'll stay
in California despite the tax because my lifestyle is more
important than the 5% wealth tax might.
Well, the real issue is sort of the paper.
You know, it's like if if it turns out that control over
Google is like super is valued as.
Well, there's lots of other problems.
Even the goal of tax, tax collection, tax collections over
10 years will go down, not up. Because they're scaring people
away. Because they're scaring people
away and scaring away the people who created the wealth who
should be rewarded for that wealth.
But no. And nobody on the presidential
level that you're willing to say you're.
I think it's too early. Do you think you'll be a big
donor? If there's an independent
candidate for sure, I think right now to win in a Democratic
primary, it's not a position I'm likely to support.
To win in a Republican primary is not a position I'm likely to
support. Start-ups that people should be
paying attention to right now after so many I know.
After, well, there's we're not done with innovation in AI or
even approaches other than large language models.
I think there's lots to do that's innovative, not just
create another competitor to open the Iron Tropic.
I think that business is done, but are there more innovations
to be had? Absolutely.
Huge gains in efficiency. Everybody knows inferencing is
really inefficient. You're using the same GPUs to do
both inferencing and training based.
On Together Fireworks you have a bet or what?
What is your inferencing bet? My bet is so I won't talk about
specific investments. Coming down the.
Yeah, We have plenty of ways to make GP US much more efficient,
have alternatives to GP US, transform models that are
alternatives to GP US. We just announced SO1
announcement was Prism ML that reduced an 8 bit model to a one
bit model so it can run on a phone.
Like that's innovation, like a mathematically equivalent model
that can run on a phone that's fun.
There's other ways to do those things.
So lots of room for innovation around L alams, lots of room for
alternative to LLMS World models has a really, really interesting
area and lots of fun things happening and a lot of diversity
in approaches in in how world models and robotics are being
approached. Big area for innovation the next
five years outside of here. I've talked about some of the
climate areas for the first time in a really long time.
I'm bullish on quantum. I think I won't talk about it
yet. I've looked at a dozen quantum
start-ups over the last 10 years, most multiple times.
I've never had the confidence we'll get to quantum in any
reasonable time frame. I think we have finally have a
shot. Well, Vinod, 'cause we started
talking about religion, you're you know, we by 2040, you need
to help deliver us material abundance get make sure
Americans have the and everyone around the world has quality
healthcare. No, no pressure.
Excited to watch your start up investments and I'm sure we'll
have you back on the show soon. Thanks for coming on.
Thank you. Lots of exciting things to talk
about. I loved it.
All right. Thanks.
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