The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:37:00 · Harry Stebbings, Daniel Dines
[00:37:00] S1: I don't understand why a company would go public today. If you think about the two drivers of being public, number one is liquidity for shareholders, employees and shareholders. Well, Stripe and many companies are able to have liquid stock in private markets. And two is the ability to have M and A, a tradable asset that you can buy with. I mean, many, many private companies are able to buy with private stock. With Stripe, we're gonna do PayPal with private stock for 60,000,000,000. So that's not a barrier. And the casinoization of public markets, as you said, with current stock markets being sentiment driven, I don't understand why one would. [00:37:35] S0: But Harry, let's don't make a confusion between, you know, some very exceptional companies and the most companies that are out there. Are so many companies that are kind of zombies right now. These 2021 zombies, they would fare better in the public market right now. At least their investors will have a way for exiting their... Employees will have a way to make some money. Nowadays, all of them are sitting on paper money. Okay? But public markets will face them with the reality of what's their real valuation. I will not say there is no value in the... Why why the Anthropic is trying to do IPO in the end. [00:38:16] S1: Well well... But they're a unique company alongside OpenAir, which just has to because they have exhausted all private funding that exists. They are literally hitting the tap out button on the supply of private capital. They're extraordinary companies because they just need too much money.
00:38:16 · Harry Stebbings, Daniel Dines
[00:38:16] S1: Well well... But they're a unique company alongside OpenAir, which just has to because they have exhausted all private funding that exists. They are literally hitting the tap out button on the supply of private capital. They're extraordinary companies because they just need too much money. [00:38:33] S0: Do you believe all the investors in OpenAI and Anthropic will stay in the companies for years to come? [00:38:38] S1: No. I think some will do, [00:38:40] S0: but some Some will do, of course, but I think we will see an Exodus. Honestly, I don't believe that 2,000,000,000,000 or whatever, maybe they will reach 5,000,000,000,000 more, because if I buy a 2,000,000,000,000, I I need to have a path to 5. [00:38:51] S1: But if they went public at 2,000,000,000,000, would you sell? [00:38:54] S0: Anthropic in particular, I wouldn't. Because do you remember on our last podcast, I think you asked me what's the company that I bet on, and I said Anthropic. And Anthropic was worth 60,000,000,000 market cap. Maybe I was stupid I didn't invest. You would have made more money on [00:39:10] S1: that than [00:39:11] S0: the Salesforce or ServiceNow or whatever. Yeah. Yeah. 100%. So I would not sell... And I think it's same with OpenAI, man. I don't have I think OpenAI has catch up quite nicely, and I use interchangeably right now. I just [00:39:25] S1: think we're in a market where the big get bigger and value concentrates more than ever.
00:39:25 · Harry Stebbings, Daniel Dines
[00:39:25] S1: think we're in a market where the big get bigger and value concentrates more than ever. [00:39:30] S0: But the the real question is, Harry, would I buy 2,000,000,000,000? That's my real question. And right now, I'm... I need to see the real numbers to understand if I will go... If I will put money in their IPO. [00:39:42] S1: I'm gonna get in so much trouble for this. I think AI is quite like Bitcoin in just the way that it's very difficult to determine what application is going to win, what wallet's gonna win, what usage is gonna win, and if that is the case, buy the underlying infrastructure that you know is going to be there. And so for me, I agree with you. I don't know if Claude is gonna be better than the next Codex. I don't know if Cursor are gonna come out with something fucking amazing. But I do know that Jensen's gonna be sitting there going, here's another chip, here's another chip, here's another. [00:40:13] S0: Great. Yeah. But I think Jensen is bound by the success of open source. Because if Anthropic and OpenAI, if this is becoming a duopoly, and basically, I I think their TAM is in, like, trillions. It's it's basically the work. They will print their own chips, man. Honestly, it's not such a big deal in the end to print chips. [00:40:33] S1: Of course. I mean, OpenAI doing Jalapeno and Anthropic are doing their
00:40:33 · Harry Stebbings, Daniel Dines
[00:40:33] S1: Of course. I mean, OpenAI doing Jalapeno and Anthropic are doing their [00:40:35] S0: own chips. Exactly. I don't think Janssen will be doing so well if they are the single biggest providers, and the source of truth and light of God will come from only Anthropic and OpenAI. So therefore, the open source should succeed. [00:40:51] S1: I absolutely agree, which is why I think Jensen is doing the open letter, which everyone signed [00:40:55] S0: Absolutely. [00:40:56] S1: Encouraging open source. [00:40:57] S0: And I think it was a great move buying Hugging Face. Hugging Face, yes. Why? Because I think it's... It encourages. It hosts all the open source model. It's putting the money where the money is for his company. Totally. [00:41:11] S1: It does also make a neutral provider not neutral anymore. Bias. Yeah. Obviously, have Neematron, and they have their own models now as well. You could say there's a loss of independence now that it's owned by NVIDIA. [00:41:23] S0: I think Nematron is still a small cog in the picture. I think it's valuable, but I would not call it... It's not the same cheap size as the others. [00:41:34] S1: Do you worry about the round tripping revenue? You know, everyone talks about NVIDIA investing here, buying here, the circular economy that come from Oracle and OpenAI. Do you think that's overblown?
00:41:34 · Harry Stebbings, Daniel Dines
[00:41:34] S1: Do you worry about the round tripping revenue? You know, everyone talks about NVIDIA investing here, buying here, the circular economy that come from Oracle and OpenAI. Do you think that's overblown? [00:41:45] S0: It can be because every every major infrastructure in history has been overbuilt. And I I think it's a simple explanation because I was thinking why every infrastructure is overbuilt. Because you have to to make sure you get, you know, biggest piece of the opportunity. If the opportunity is big, it doesn't it doesn't matter. You build a little bit more than it's necessary. So it's clearly that now everybody... That there is only 100% of the pie, and people are building right now 200 of the pie. There will be losers. [00:42:19] S1: Do you not think that this is the first innovation where we are significantly underbuilt? And, if you look at the constraints now, you're you're right. Actually, in prior technology cycles, we overbuilt supply side and demand side was lagging behind. Now we have energy that's being a massive constraint. We have water. We have data centers. We have regulation and policy. We have a significant hindrance to supply side, and we are underbuilt, not overbuilt, which is why every ounce of compute is taken.
00:42:19 · Harry Stebbings, Daniel Dines
[00:42:19] S1: Do you not think that this is the first innovation where we are significantly underbuilt? And, if you look at the constraints now, you're you're right. Actually, in prior technology cycles, we overbuilt supply side and demand side was lagging behind. Now we have energy that's being a massive constraint. We have water. We have data centers. We have regulation and policy. We have a significant hindrance to supply side, and we are underbuilt, not overbuilt, which is why every ounce of compute is taken. [00:42:47] S0: Yes. But are we underbuilt to the extent of this trillions that comes into the infrastructure? I don't know how to answer this. Everything happens on the premise that AI is gonna replace human work in a really large scale. We need to see the timing of this replacement and transformation. It's a big difference if it's coming in ten years versus next two years. So I don't think it's overbuilt for next decade, but it might be overbuilt for the next three years. And stock markets and capital, you know, can be moreciless.