No Priors: Artificial Intelligence | Technology | Startups
00:00:00 · Elad Gil, Sarah Guo
[00:00:00] S0: 70% of France is still nuclear in terms of its power generation. 70%. Where are all the accidents and where are all the kerfuffles and, you know, nothing. Nothing's happened. US is 18%, and we haven't built a reactor in forty years. We had a safety lobby in the seventies basically kill abundant clean energy for us. There are real outcomes where safety has hurt us. And the question is where do we want the spectrum to be on AI for this stuff? And there's many worlds, many scenarios, many outcomes. [00:00:31] S1: Hi, listeners. Welcome back to No Fires. Today is just me and Alad talking about risk management, RSI, how many trillion dollar companies there can really be, and the ills of regulatory capture. For For any new founders out there, it's also time to apply to embed Conviction's low overhead, high signal grant program for 10 exceptional startups building at the frontier. We hold this program twice a year, and it's $250,000 in cash on an uncapped note, well as compute and services from our partners, OpenAI, Anthropic, Base10, and others. Most importantly, it's about the company you keep. Our first handful of cohorts have included companies like Cognition, Chai Discovery, Listen Labs, Physical Intelligence, and Flappy Airplanes, people advancing the frontier and diffusing AI into every corner of the economy. Find the app online at embed.conviction.com. Okay. Let's get started. [00:01:24] S0: Sarah G. How you doing? [00:01:27] S1: A lot. It's good to see you. It's been a while since we just get to hang out with each other.
00:01:27 · Sarah Guo, Elad Gil
[00:01:27] S1: A lot. It's good to see you. It's been a while since we just get to hang out with each other. [00:01:32] S0: I know. It's been too long. What happened? Where you been? [00:01:34] S1: You know, working at companies in DC, trying to take a day off. You? [00:01:39] S0: There's just so much going on right now in AI. There's so much going on. It's nonstop. It's very exciting times. [00:01:44] S1: You're chasing chasing the next trillion dollar company?
00:01:44 · Sarah Guo, Elad Gil
[00:01:44] S1: You're chasing chasing the next trillion dollar company? [00:01:48] S0: Yeah. It's a it's a really interesting point because basically what we had is over the last five years or so, we had three companies roughly go from close to zero to a trillion dollars in market cap. Right? Anthropic basically didn't exist five years ago. OpenAI was still quite early. I think GPT-three just come out, and SpaceX was trading at 80, a 100, something like that. And so suddenly, we had this massive inflection in terms of valuations of these companies. And I think a lot of people now are assuming that there's a bunch of other trillion dollar companies that will be formed in three to five years. And that's unprecedented in human history. Usually, it takes twenty years. SpaceX actually took since the early 2000s, and Google took since the nineties. These are usually fifteen, twenty year arcs. And then we had this weird five year inflection. And so I feel like a lot of people now are looking at different areas that are very exciting, very promising areas, robotics, materials. And everything in everybody's mind is going to be a trillion dollar company. And maybe some of these will over the next decade, but it's unlikely that we'll see that many more in the next three to five years. I mean, there's one I can think of that could maybe get there, but not multiple. So yeah. [00:02:53] S1: What's the one? [00:02:54] S0: How am I gonna say? [00:02:56] S1: A lot. Where am gonna put my money? [00:02:59] S0: I don't know. It's like throwing darts.
00:02:59 · Elad Gil, Sarah Guo
[00:02:59] S0: I don't know. It's like throwing darts. [00:03:02] S1: Yeah. That's why we have the dartboard here. So you think it's actually just like a very good special point in time vintage versus, you know, the ecosystem always gets bigger?
00:03:12 · Elad Gil
[00:03:12] S0: Well, it's more like a punctuated equilibrium. Right? If you look at theories of evolution, one of them is punctuated equilibrium where you have a Cambridge Explosion and you have consolidation and things are kind of steady state for all. Then you have an explosion. And so that's kind of like the history of technology, right, if you think about it. We had a big social wave, but there isn't a dozen new social companies all the time right now. We had a SaaS wave, then they kind of settled down. So we just had a giant AI wave, and there's still more to come. One could argue that Internet had four or five periods to it. I had the Internet of the nineties, I had social of the early to two thousand ten, 2012 ish kind of era. You had SaaS. You had cloud. You had big security companies. You had crypto as a wave, so you had all these waves happening. And sometimes they had two pieces. Right? Bitcoin had a couple different cycles, and other technologies will have that. AI undoubtedly, there'll be some giant breakthrough in model capability, and we'll see another step in some of these startups again. Right? But we see these moments in time where things go from zero to a lot, and then those things become consolidators. And then the question is what comes after that? And so I think we've now seen at least some of the consolidators emerge. And the question is how many more giant companies are coming in the next handful of years? And that's different from saying what happens over the next twenty years. Of course, there's gonna be tons of interesting stuff over twenty years. Over two years, three years, there's still things that will grow a lot. You know, there's still a lot of $100,000,000,000 companies to be built, but multi trillion dollar companies are kind of hard to get to.
00:04:42 · Sarah Guo, Elad Gil
[00:04:42] S1: I wanna talk to the investors you're talking to because I feel like I run more into a failure of imagination of how much bigger or better something can be than the closest proxy market from a previous era. And, like, I I think, like, being able to rethink market size is just still, like, a key underpriced investor skill right now at any stage. Right? If you think about Sure. Take some of the, like, application companies that, you know, we have in common or that other people have invested in. I think there are a lot of investors who have intellectually recognized this idea of AI companies delivering services value. They don't act like they believe it. They look at everything a little bit more linearly. Right? So think of, if you're looking at Harvey or a Bridge or something, then they think about a per seat or per, yeah, per, like, lawyer or per doctor TAM. And they're not actually, you know, asking the question of, like, what does the company look like if they can charge for outcomes? And actually thinking about, like, what's happening in the the coding domain, which is consumption and value, you know, a 100 x from here. [00:05:48] S0: Coating, I think, is like a much, much bigger market than anyone thought. And, you know, I think both of us were saying that a year or two ago. [00:05:53] S1: But now the evidence is out there. You don't have to be a genius to, like, take that to domains.