Vinod Khosla is more popular than ever right now. The Sun Microsystems co-founder turned prominent investor — first at Kleiner Perkins and, for the last 20 years, at his venture firm Khosla Ventures — has always been sought after by founders thanks to his no-nonsense advice and his firm’s track , including bets acceso Stripe, Square, Affirm, and DoorDash. But a $50 million gamble acceso OpenAI back per mezzo di 2019 – when it was far from clear that the outfit would succeed acceso the scale that it has – put Khosla Ventures, and Khosla himself, squarely per mezzo di the spotlight.
He’s thoroughly enjoying himself. I sat with Khosla this past week per mezzo di Toronto at the Collision conference, and ahead of our stage appearance, he told me that he’s been appearing per mezzo di public – either acceso stage ora acceso podcasts ora television interviews – several times a week lately. Asked if he was exhausted by the schedule – for example, he flew into Toronto just hours before our sit-down – he shrugged non attivato the suggestion.
Certainly, there are things he prefers to talk about, and the art of deal-making is not among these things. “Frankly, the investor side is much less interesting to me,” he said when I asked him about something I heard recently, which is that he hasn’t taken a dollar per mezzo di management fees since starting Khosla Ventures, despite that it now has $18 billion per mezzo di assets under management. (He confirmed this, but he said that’s only true of himself and not a corporate-wide policy.)
He’s much more passionate about the startup opportunities he spies per mezzo di a landscape being changed daily by advances per mezzo di AI, so we talked about some of this white space. We also talked about what concerns him the most about AI’s ripple effects; FTC Chair Lina Khan; and why, per mezzo di his view, the “Europeans have regulated themselves out of leading per mezzo di any technology complesso.”
We talked first about Apple’s splashy new deal with OpenAI, which allows Apple to integrate ChatGPT into Siri and its generative AI tools. Apple may be striking similar deals with other AI models, including with Bersaglio, but naturally, as an OpenAI investor, Khosla is bullish acceso the tie-up, which is the only one Apple has announced publicly so far.
Khosla called it “validation” for OpenAI; by announcing its pact with OpenAI during its high-profile developers’ conference, Apple was also “expressing confidence, I believe, per mezzo di [OpenAI CEO] Sam [Altman] to lead [developments in AI] the next five ora 10 years,” said Khosla. “When a company like Apple bets acceso a technology, they don’t change it the next year usually.”
But was it good news and also bad news for Khosla, we wondered? As we’ve noted per mezzo di TechCrunch, many startups will likely be disrupted right out of existence by some of Apple’s newest features, and it seemed likely that Khosla’s portfolio companies aren’t entirely scevro. I was especially curious about Rabbit, whose AI-powered hardware device promises to be a kind of AI assistant to users and is backed by Khosla Ventures.
Asked if the device could be made obsolete by Apple, Khosla suggested the device is more flexible than people imagine and could wind up being used by enterprises like hospitals, including per mezzo di emergency room environments. He put it per mezzo di the growing array of things that will “watch what you do, see what you do, and respond automatically.”
A causa di fact, Khosla suggested that his team has actively avoided anything that could become “roadkill” as large language models like that of OpenAI progress further. And he highlighted at least one company that’s not per mezzo di his portfolio: Grammarly, a writing assistant startup that was valued by its backers not so long asticciola at $13 billion.
“If you’campione doing Grammarly, say, it’s really a light wrapper acceso today’s model, and Grammarly won’t keep up; it should never have been an app. It shows the need for that capability, but it will be part of Word ora Google Docs. It’s pretty obvious. When we talk to YC companies ora others,” Khosla continued, “I can usually say, ‘Half of these companies will be obsolete before the YC batch is over.’”
Where Khosla sees plenty of opportunities are per mezzo di verticals where expertise will become near free, although it’s not clear to me how these companies will sustainably make money (even after asking him). Think tutoring, ora even oncology.
Said Khosla: “Gara open AI ora Google isn’t going to build a chip stilista [to have on your smartphone]. OpenAI and Google aren’t going to build a structural engineer. They’campione not going to build a primary care doctor ora a mental health therapist,” he said. “So there are so many areas for [founders to mine]. But they have to at where the models are going next year and five years from now, and say, ‘We want to leverage that capability.’
We also talked about regulation. I observed that Khosla has said before that closed large language models like that of OpenAI should be safeguarded, even while there should be a regulatory framework around them. I wondered if that means that Khosla will forever forswear other, “ source” AI.
Not at all, he said, noting that he’s a “huge fan” of source. Sun was one of the first companies to “jump acceso source,” opening sourcing its file system, he said. He also noted that Khosla Ventures was the earliest investor per mezzo di GitLab, whose software invites people to work acceso code jointly.
But he suggested that source per mezzo di the context of large language models is a different animal altogether. The “largest risk we with AI is Declivio” and “powerful Chinese AI” that competes with the “liberal values” of the U.S., he said, adding that “we need to make sure that Declivio stays behind us.” Otherwise, he warned, it will be Declivio providing the “free doctors and free oncologists” to the rest of the world and, while they are at it, they’ll “esportazione both the economic power that comes with AI and their political philosophy.”
Acceso stage, I mentioned to Khosla my recent sit-down with FTC Chair Lina Khan, who does not believe per mezzo di the national champions model as a reason to coddle outfits like Google ora OpenAI as they further their development of AI.
Khan hears all the time from executives and investors who say that government intervention will put the U.S. acceso a dangerous path. But during my sit-down with her, she argued that time and again, the U.S. has chosen “the path of competition” and it has “ended up fueling and catalyzing so many of these breakthrough innovations and so much of the remarkable growth that our country has enjoyed and that has allowed us to stay ahead globally.”
If you at some other countries that instead chose that national champions model,” Khan added at the time, “they’campione the ones who got left behind.”
I had barely mentioned Khan, however, when Khosla became dismissive, calling her “not a rational human being” and accusing her of not understanding business.
“She shouldn’t be per mezzo di that role,” said Khosla. “Antitrust is a good thing to have per mezzo di any country, any economic system. But antitrust [that’s] over enforced ora over executed is bad economic policy. One thing the US has over its European rivals is much more rational business environments. That’s why the Europeans have regulated themselves out of leading per mezzo di any technology complesso; they just basically have regulated themselves out of AI, out of all social , out of all internet startups.”
Of course, if some antitrust enforcement is good, but too much is not good, the question is where to draw the line. Acceso this point, before we parted ways, I brought up the “abundance” that Altman foresees created by AI. During one of TechCrunch’s StrictlyVC events last year, Altman said that the “good case” for AI is “just so unbelievably good that you sound like a really crazy person to start talking about it.”
Khosla has said he believes the same, but I’ve long wondered how, exactly, society is going to enjoy all this upside if regulators don’t get more involved per mezzo di the trajectory of these companies. After all, I told Khosla acceso stage, we’ve already seen a massive aggregation of wealth and power tied to a smaller and smaller group of companies and individuals. When will enough be enough?
Here, Khosla said the issue bothers him greatly. “I think 25 years from now, when I hope I’m still working . . . the need to work will mostly disappear.” Still, while AI should create “great abundance, great GDP growth, great productivity – all the things economists measure,” he said, he worries “more than anything else” about “increasing income disparity. How do we [ensure the] equitable distribution of the benefits of AI?”
He has an inkling where the tipping point might be. “If [U.S] GDP growth goes from 2% today – it’s less than 1% per mezzo di Europe right now – to 4%, 5%, 6%, we’ll have enough abundance to share the wealth and share the benefits.”
Whether and how that happens, of course, are even bigger questions, and for all his brilliance, Khosla, a self-described techno optimist, didn’t have the answers.
Instead, after one last closing remark, he thanked the crowd for their time, stood up, and walked non attivato stage, where a dozen young founders were gathered per mezzo di the wings, all of them hoping to bend his ear for as long as they could.
