Vinod Khoslas Warning For Indias It Industry Can Ai Save It Sparx By Mukesh Bansal

TITLE: Vinod Khosla’s Warning for India’s IT Industry | Can AI Save It? | SparX by Mukesh Bansal CHANNEL: SparX by Mukesh Bansal DATE: 2026-06-13 URL: https://youtu.be/pfGAdzo09xw ---TRANSCRIPT--- But I want to just maybe I should want to touch upon your investment in open AI in 2019. It was you have been known for contrarian bets but this was way out there contrarian. We wrote a $50 million check and when we wrote the check we also sent an apology [music] letter to our LPs saying sorry we’re making this [music] investment. It doesn’t make any logical sense. It’s a nonprofit. No product plan, no business plan. I love making those plans.

So freedom is the ultimate promise of AI and just people free to live life and that becomes a new normal. Who wants to work on an assembly line for 8 hours a day for 40 years? That to me is slavery. It’s servitude to survival because you need a job. Those are not jobs with human dignity. But what does it mean for someone who is going to college now? Why go to college? I think the only reason to go to college is All right. [music] [music] [music] Heat. [music] Vinod, welcome to Sparks. I’ve been waiting for this conversation for a long time. Uh you may not recall but I have been to this office few times. I’ve met you in different context and was was good to see you at the AKA event as well. I want to start with uh I’m in valley for last few days and I I come here often once or twice a year but the pace seems very different now. There’s so much action and a lot of it seems to be concentrated in San Francisco. Is this you’ve been in valley for last 40 odd years. Does this feel different or It definitely feels different. There’s a lot of activity, a lot of genuinely good startups, but also a lot of money. Yeah. And that combination has resulted in velocities that are very very high. Yeah. In one of your talks you have mentioned there and I think it’s it’s I guess fairly obvious also there are gen there are only three four very deep model companies now. in in US at least and then maybe there are equal number in China. Do you think most of the innovation is concentrated inside this company and and there’s a delta between what the companies outside these companies are able to do? No, I think there’s a lot of innovation outside these companies. A lot going on uh at least in this area like every day there’s a new idea that’s worth considering if not funding. uh result of which you know the way best way to understand Silicon Valley today is of all the unicorns 91% are in the Bay Area the rest of the world combined accounts for 9%. Which is pretty stunning. The second highest this is all unicorns not AI unicorns. I I think it refers to AI unicorns but uh the second highest is New York with 2%. So it’s even the number two is largely irrelevant. Yeah. And so the action is here almost all the innovation is here and see uh if you look at any AI company today the engine of all AI companies obviously the inferencing which is powered by one of these these companies. What is the nature of innovation outside? But I want to just maybe I should want to touch upon your investment in open AI in 2019. It was you have been known for contrarian bets but this was way out there contrarian. If you recall your thinking and the discussion what convinced you it was not even clear where open air is going to be for-profit company nonprofit yet you wrote a pretty large check. So, I wrote a check that was twice the size of the largest initial check I’d ever written cuz I don’t like writing huge checks. We likes very small checks. So, I’d never written in 40 years a check over 25 million initially. Later on, we’ll add additional money. And we wrote a $50 million check. And when we wrote the check, we also sent an apology letter to our LPs saying, “Sorry, we’re making this investment. It doesn’t make any logical sense. It’s a nonprofit. No product plans, no business plan. It’s just a tech technology effort, but the idea was very simple.” So today, that letter is sort of a funny thing. Yeah. Um, and I should probably tweet it. It was so funny nowadays in retrospect. Um, but what was very clear to me is when you get AI, Mhm. it’ll be very consequential. So, it wasn’t when we would get AI. Mhm. It was when we get it, whenever that is, whether it happens in two years or 10 years, didn’t matter. uh it would be very consequential. So the bet was very much on the very large upside if you were successful and that’s our kind of bet. Mhm. I love making those bets. And then each bet has to be I guess two parts. One is you were convinced that AI whenever it does happen will be very consequential but this particular company because when you’re dealing with so much uncertainty almost no precedence and almost no clarity about timelines picking a team versus the other also has to there’s probably some method behind absolutely you judge the team I thought this was a very good team we very confident in the team um but there weren’t also a lot of companies Yeah, there was Google. Mhm. Yeah. Uh OpenAI and BU maybe in as a Chinese company. So there wasn’t a lot of AI efforts. It’s not like today. And there’s this whole thing about opportunity meeting a prepared mind. I know you’ve been talking about AI for a while including I think 2012 you’ve been talking about AI doctors and so on. So is it almost a case of you were looking for something like this and you happened to eventually you know I assume you must have got I was absolutely looking for it. You know there’s some [snorts] important areas of technology that I tend to like to identify and say we should if we find a great startup invest in it. Mhm. By the way, same year to it was 2018 that we committed to OpenAI. It closed in early 2019. Uh but same year we invested in Fusion. Mhm. Nobody was expecting Fusion in the next 30 years. Yet we placed that bet and I think it looks pretty good today. So, you know, I like unusual bets. We also placed a bet that year in uh public transit which is also not considered a venture area. So um I think around then we also invested in hypersonic aircraft. That was also unusual for a startup to be doing hypersonic aircraft. So we we’re not afraid to place large bets. We tend to be cautious about how we guide them so they don’t run out of money because some of these areas become very difficult. But I’m always trying to say what will be hugely disruptive 10 years from now that people aren’t expecting. If everybody’s expecting it, then it’s not interesting. But it has to be at the sweet spot of people are not expecting it. But it should at least I know as on on average should become real in next 10 years because if let’s say open air I bet if you were to place the same bet in 2009 the story will not look that great because s finite lifetime. No look this is the hard part of venture investing is guessing when you will have breakthroughs when will large changes happen. So I’m always looking like everything I look at is between 2030 and 2035 and say what can be consequential and this this philosophy as a venture uh um capitalist or I guess you would like to call it as a venture adviser has been a work in progress you know you’ve kind of honed it over a period of time by seeing a lot of different patterns like what is the backstory behind doing this way so I like to differentiate from people who are investors you know they have to run spreadsheets Yeah, we never run a spreadsheet on rates of return. Mhm. So rate of return calculations are just mostly misleading in our business for what we do. Mhm. Most other investment firms use it. It’s misleading because of the artificial marktomarket that you Well, it’s not artificial marktomarket. Markto market in private markets is always artificial. That’s not the real issue. What the real issue is you can’t predict these things. You know, if I said to you OpenAI will have no revenue in January of 23, but January of 26 it’ll have 20 billion, you’d say I’m crazy. So sometimes it’s better to realize you can’t forecast instead of trying to make a forecast and then using it as a basis for calculation. Mhm. You just say it’s not possible to forecast or see today is obviously very impressive. It can do a lot of things and one can also argue that we are not fully exploiting what’s possible in AI even today. But lot of the AI investment there are now I think close to a trillion dollar of capex which is being spent this year and perhaps next few year every year. This also assuming some this the scaling to continue for next few years is that you almost take it for granted now we have hit an inflection point the scaling will continue because it can also stop we stop the asmtote may may play out and this may have implication for the whole journey and if you look at the five years journey could you have 10 times the amount of inferencing absolutely there’s demand for that 10 times more intelligent like what’s the metric 10 times more inferences. Mhm. Than we do today. Mhm. Could you see a 100 times? Possibly. Mhm. U depends on the price decline. And you’re not commenting on quantity of inference, not quality of inference. No. Yeah. Uh just the number. Yeah. Yeah. Got it. Sort of measure it in tokens produced. Now the intelligence of each token will also go up. Mhm. Which is the quality aspect. So I suspect we’ll see continuing increasing increases in the number of tokens almost exponential. Yeah. We’ll keep seeing um large but more modest increase in the intelligence per token. Mhm. Which is human intelligence delivered. Yeah. and we’ll see pretty rapidly declining costs per token. Mhm. And if the cost decline, the demand will be there. I’m pretty confident about that. But not is any of this contingent on newer breakthrough or I don’t think so. I think we look there’s a set of breakthroughs we can forecast pretty easily because we know how to get there. if we scale X or Y, you know, we know scaling laws apply. Uh we know certain cost curves of silicon and other things. You put all that together, I don’t think any massive breakthroughs are needed. I consider things like memory in AI systems, continuous learning in AI systems as sort of routine things. Again, a question of when it’ll come along, not if. Yeah. And the bigger question is when they come along, how good are they? How good is the continual learning? How good is memory? How how well can it be utilized? Uh got it. So I I think those are predictable. I also expect we’ll see unusual of phenomena in AI, progress that we aren’t planning on. Mhm. Unusual good, unusual bad, we can’t say. I think mostly unusual good. There will be some bad things for sure. I want to bring the conversation to health. I think around 2016 you wrote this paper. I think it’s called something like 20% doctor which uh was about the role of AI in medicine and ubiquitous you know worldclass doctor available to everybody in their mobile phone. In fact incidentally we know 2016 was when I starting my second company and it was a health company. We wanted to solve for holistic lifestyle across everything from fitness, food and marrying to primary care. Most of those things didn’t work out. Fitness worked out very well. So today it’s a very large fitness company. But the dream of that AI doctor was at least that we couldn’t pursue. But fast forward 10 years from now, you think we are much closer to now that vision of where everyone have. There’s no question even 5 years from now you won’t need a human doctor other than in interventional medicine that means like surgery and heart surgery or things like that or burn victims or broken bones uh I think five years from now the expertise involved in a doctor is almost completely already insist distance. I no longer consult doctors. I fractured my wrist last week. Um, got an X-ray, sent it to Chad GPD and told me what to do. Now, I have had to have a real surgeon. I called the surgeon. You know, like any surgeon, he said, “Can you come in for a consult?” I said, “I don’t think I need it. Here’s what Chad GPD told me.” I sent him uh the exact comments from Chad GPD. He said, “This is exactly what I’d tell you.” So you don’t need to consult. We’ll go directly into my first time I met him was in the surgical theater. Uhhuh. And it worked out. And since then I consulted on every question like can I do this or can I do that or when will the cast come off or when can I put pressure or it’s a much better uh I I would say it’s at least as good a doctor and a much more accessible doctor. I can ask it a question at midnight and I get an answer within five minutes. Yeah. As opposed to waiting multiple weeks for an appointment. That’s possible for every person in India today. Mh. And I I one of my pet projects is to get that going and deliverable in India as a nonprofit effort within the next two years. And why does it need to be a new effort? GPT already is available in India. They have I think pretty wide distribution for one of the largest user base for GPT as you say. I also you know consult GPT my first protocol for any health issue and I’m pretty happy with the outcome we get. Why does it require separate effort at all? Um I think this is misunderstood. The safety requirements for AI are much much higher for some areas like health than in others. Yeah. So today if you consult chat GPT um the general triage error rate will be 20 to 30%. That means you get the wrong answer 20 to 30% of the time. Now humans are pretty bad at triage too. So you have to be careful. Uh but when you add a health specific system and my son has a company that does that but they use GP5. Mhm. But layer on things on top, the triage error rate goes to zero. Mhm. Right. Much better than human beings. And so I think in all these areas, if you’re talking about national defense or healthcare or financial trading, you want to use these large models. All of them will are essential. They’re necessary but not sufficient. You need additional things. Yeah. or various levels of insurance. So this is not about making AI better with further scaling. It’s about building enough guardrails and checks and balances and human kinds of every domain is a little bit different. You need different things in different guardrails. Mhm. But yes, you know, we know AI systems hallucinate. Yeah. And it’s not been easy to reduce hallucination. Mhm. If you’re doing customer support and you hallucinate somebody’s bank balance, uh, that’s a problem. So, there are special systems that’ll ensure that the systems don’t hallucinate and still use these systems but with the extra guard rails and safety. So, whether it’s financial or healthcare or other critical areas and these these additional systems are more deterministic rules-based system. They are not additional inference to as they’re not rules-based systems. I think rulesbased systems uh are too hard to do and manage. They’re just better different techniques with different tradeoffs. Right. Got it. Got it. So maker checker and probably multiple checks but they’re all inference based systems that are layered together in some way. So that’s why there’s opportunity in application areas too. Right. Right. And this is I’m just thinking about now India healthcare since you mentioned we have massive public healthare system. There are I think if I’m not mistaken hundreds of thousands of doctors work there. So one possibility is to co-opt them in some ways to be the human layer. Yes. You know whether you need a human layer or not. Mhm. Um and for what is an important question and I think each human being will make every citizen in India will make their own decision. Mhm. Um, obviously if if an AI is going to tell me I got cancer, I might prefer a human being to tell me that than uh get a text message. Um, so but different people may prefer different things. Um, others may say, “Hey, tell me as soon as possible.” Text is fine. I don’t want to wait one week for a doctor’s appointment to learn that. Mhm. Um so different people will prefer different things and I think human preference will become a big part of how we use AI systems. Yeah. what does education look like in this you know it’s a both I maybe I’m asking from twopart question for a grown-up person you know someone who’s in his 30s 40s 50s probably I assume people need to learn lot of different things and perhaps unlearn and then similar question for someone who is coming of age now how should they think about education I spend most of my time today at age 71 learning I’m learning new subjects if I’m interested in fusion I learn about fusion. If I’m interested in biology, I learn about biology, cancer, drugs, whatever I need to learn, I can learn now. So, the opportunity for 30 and 40 year olds and 50 and 60 and 70 year olds is huge as far as learning and it’s almost all free. Mhm. So, that’s the big big advantage. And when you say learning now, it’s mostly going to GPT and just finding out the right resources from there and then follow them. Yep. that kind of thing. Yeah. I I often have long dialogues with GPD on a subject. Now, even a typical how do you design a much better drone motor? Mhm. I’ve not designed a motor in 50 years, but I can still design one with GPD and say, I understand the basic scientific principles and I know how to apply them and I’ll do these exercises. M I say how do you how would I design a cancer drug for this cancer all those are available in possible and this is something you said this is something one one can do or one should do well that’s each person’s choice to to to survive and thrive in this you know the new world survive and thrive you have to do it right if you don’t want to um keep up that’s fine but I’ll give you the best example you know Most people in the software business know GitLab as a company. He was one of our founders. We invested when there was four people, became a big company, public company, and then the founder got cancer. Mhm. And if you look at his history, he basically decided very quickly he wouldn’t talk to doctors. He would essentially design his own cancer treatment. Yeah. And he got deep in he learned everything from scratch as a software person. Mhm. And had did his own cancer vaccines, cancer drugs, custom drugs for each stage of his cancer. Yeah. He wasn’t given that long to live. He’s alive and well and healthy now and doing even more drugs for what he might need as cancer drugs in the future. So if a software engineer can do that and you don’t need a medical degree uh that’s the world we can live in we can choose not to or choose to live there. I find it very very inspiring. Yeah this is an incredible example. Does he talk about this publicly? Oh he talks about it. Um in fact he’s given a couple of talks uh called uh it’s called going founder mode on cancer. Uhhuh. It’s a beautiful talk. I’ll ask you for introduction. try to invite him on this because this is ultimate example of what someone powered by AI and the right mindset with no knowledge can do right just general intelligence right and you know you don’t have to have a degree to have general intelligence but what does it mean for someone who is going to college now why go to college I think the only reason to go to college is to learn how to learn to learn curiosity why why do I work 80 hours a week cuz I have curiosity about so many things. Yeah. You know, um I asked Chad GPD, what do you think of all my searches over the last couple of years? It freaks out because it says you’ve been all over the map. Yeah. You’re learning about cancer, you’re learning about fusion, you’re learning about designing motors, you’re learning about, you know, various AI algorithm, just everything. Yeah. Uh even gardening. I learned so much from Chachi about gardening. My own garden. Yeah. Um so you go because you learn how to learn. Mhm. You go because you learn curiosity. Yeah. And by being active and online and this may be the single most important thing. Yeah. You get agency. Mhm. You feel like you can do things. I think that’s the difference between founders and non-founders. Founders have agency. Yeah. Instead of looking at a problem and saying they should do this, which everyone says, founders say, “Oh, there’s a problem. I’ll do it.” Yeah. I’ll solve it. So that’s founder mode. Yeah. And say there’s no it doesn’t matter if I know about it or not. Right. I’m just going to go start learning and attacking the problem. Yeah. So agency becomes very important to learn for both a 5-year-old and a 25y old. So perhaps it has a huge implication for how schools and college cultivate this curiosity and agency because lot of it is about teaching you something what’s in textbooks and being able to repeat it back in exams and so on and that’s how the whole system works and people become very good at it but that’s not exactly fostering curiosity and and agency. No. And and I think universities need to change. I was I was at IIT Delhi in February. Myself and Sam gave a talk and then I was talking to the director and he was saying we’re going to expand the university. This is what we’re going to do with classrooms and and my answer was completely irrelevant. Do you think any of the students in our audience today will know more than the AI in their area of specialty? The answer is obviously not. Right. Right. So what should you do with IIT Delhi? I said open more dome rooms to have more students. Yeah. Have more meeting rooms, not classrooms. Have places where people can gather and discuss things and debate things and do the learning at home and come back and discuss topics. Yeah. So there is a role for universities, but it’s not the old role. It’s not lecturing out of textbooks. Those can all be thrown away. They’re all obsolete anyway because the world keeps changing especially in technology areas like engineering every day. You can say how do I design a new magnet without railroads, right? You’re not going to find it in a textbook. You’re going to find it on chach and then pursue trails and build a little model and then experiment. We have people doing things like that. Yeah. Uh you know the country doesn’t have rare earths. Can we not depend on China? Do our own. The answer is probably a small group of people could solve that problem. That’s called having agency if they choose to go do it. Yeah. And I want to just underline that. I’ve very often noticed that sometime I stop myself from asking the question. But if I do ask a question and engage with any of the AI models, it leads to a totally new trail and you didn’t realize it’s possible. So then having that agency and somewhat courage to act on it just you know like this this is this founder you mentioned you know just trying to solve figure out his own cancer situation with AI most it will not occur to most people to even attempt and lot of this promise of AI we know uh today everything is is in some ways digital medium there all mostly text space yes can process some image etc but majority of uh both input and output is is is text with some translation uh how where are you on the whole this physical AI aspect you know AI well physical AI is coming in the next couple of years we’ll have the chat TPT moment of physical AI um I’ve tweeted a bunch about it uh so I don’t think there’ll be an issue with robotics in five years from now can you envision what does a moment charge moment can look like or what are the possibilities where we say this is becomes relevant to all of us you You know, it’s I think when you can put a robot in your home, it can cook your meals. Yeah, that’s a pretty stunning point. Mhm. Obviously, there’s lots of industrial application, but a robot in your home. And these look like humanoid robot, not specialized arm or what? The most likely humanoid. I think there’ll be multiple specialty form factors, but humanoids will be the largest form factor by a lot. Mhm. And because they’ll be the largest form factor, they’ll have the most scaled manufacturing and they’ll have the lowest cost. Yeah. So you’ll need auto manufacturing like facilities to make large scale very low cost. Mhm. But you know cars don’t cost that much more than the cost of steel. Right. Right. If you look at it because the value ad is so automated and so scale that it’s very low overhead. So and if you play out this exponential growth and impact of AI then the world will be unrecognizable. The I think 15 years from now the world will be unrecognizable. A 5year-old kid today will grow up in a very different world by the time they’re 20 or 25. But it has also implication of our social, political, economic structures also. they can’t just hold up the current because in some ways today if you know anthropic has gone from nothing to a trillion dollar valuation four years and it seems you know Google is now5 trillion probably most likely going to $10 trillion company in next few years so it seems like in the benefits today are getting highly concentrated while there’s some innovation outside but the most of the benefits seems to be flowing in a very very small area I disagree with that I think the question to ask is is 95% of the population better off. Mhm. Not what’s happening with the 5% who are making all the money. And that is happening. There’s concentration of wealth. Yeah. And technology is always resulted in a concentration of wealth and they’ll be more nonlinear. Yeah. But if you stop worrying about the few percent Yeah. and say will 95% of the people be better off in 19 2040? Yeah. Absolutely. No question. They will be better off because they are making more income in their jobs or they will require some redistribution where proactive. No, because have access to services. Yeah. If they need education, it’s free. If they need health care, doctor, it’s free. If they need legal services, it’s free. If they need more entertainment, it’s near free. Hopefully, even food and others will get cheaper because of robotics. So, I don’t need to make 100,000. and even I make 50,000 I have dramatically better lifestyle possibly if my bet is we’ll have a very deflationary world before 2040 and prices will decline very dramatically for most goods a few things that aren’t done by robotics or have other physical constraints will be more expensive uh but we’ll have for today’s measure of GDP which is defined as a basket of goods and services that we measure today. Yeah, that basket will become much cheaper. Yeah. And I think some of the forums you know you have argued for that it will at some point require some government ownership for I think there’s many different systems possible. U each country will adapt its own. Yeah. You know likely the US is very different than India is very different than Germany. Yeah. Some people will resist AI, some countries will and it depends on the politics in the country. So it’s very important for a country like India to show the benefits of AI to people first. Yeah. Free doctors, free teachers, free aronomists. So every small farmer can uh worry about it and and the price of input Yeah. goes down. Yeah. And so they see the benefit for Mhm. uh they see the asymmetry so there will be more asymmetry. Yeah. And for India I guess there’s additional challenge of figuring out that this whole IT service industry and BP industry which is a huge source of uh foreign income u for the country business will be gone. There may be new opportunities in deploying AI to the planet. Mhm. Uh because India has an advantage in learning how to deploy AI. Yeah, very few of the companies are doing it today. But uh if they do, they’ll be in good shape. If they don’t, they’ll be in very bad shape. What are the examples of that? You know, what can India develop at scale which can employ millions of people and participate heavily in deployment of AI? Yeah, it’s it’s a complex area. Um I I you know I I’ve written a piece about it earlier this year for AI specific to India. Yeah. So I’d refer you to that. It’s about 20 pages long. I’ll go through it. So it’s a fairly detailed look at what we’ll do. But you know the basic things people need. Yeah. health, education, um, entertainment, food, those should become much much cheaper. Housing is the one area that’s troubling because that needs to scale and still mostly depend on materials costs. Yeah. Not so much labor, right? Yeah. I guess if you’re physical AI and the really cheap humanoid humanoid, so probably the Yeah. But but cement will still cost like cement costs and hopefully we can do something about those scaling those things. Yes, cement also I guess is mostly energy cost in some level. So if energy becomes cheaper then I guess you can you’ll have more options and where in this whole uh the the in the quest for solving for energy for uh an AI space has become a factor now and you have I think you’ve been investing in space as well with the rocket layer way back I think 2012 13 so on have you are are you convinced that space has a role to play as for to in in these uh data centers to support massive compute infrastructure Look, I would say data centers in space don’t make sense today. But there’s certain cost parameters like transport cost to space for a kilogram of weight, things like that. Mhm. Um that could make it more cost effective. You know, are factors of 10 possible in cost reduction? Yes. And if that happens then the equation might change. But with today’s increase in uh today’s costs and even normal declines in costs uh data centers in space haven’t seemed to make sense. But I don’t rule out larger increases in decreases in cost. And if that happens then assumptions will change around data centers in space. If you apply your framework of what will be feasible by 2035 which side of bet today you will take the space-based data centers a big part of our life or unlikely. I would say unlikely only because the cost on earth will decline very rapidly. Got it. Once you have fusion, you don’t have a power generation problem, for example, [clears throat] by 2035. So if power is dirt cheap on the planet, then why go up in space? Why get the inflexibility of fixed infrastructure that you can’t change quite as easily as walking into a data center and changing a GPU that failed, right? You know, suddenly GPUs will have to be pretty different. Mhm. Cuz the radiation is not healthy for semiconductors. Power generation in space is hard. Uh cooling in space is hard. Now, there’s possible solutions to each of these problems. But if we and if you’re lucky enough to get improvement in all those dimensions much faster than cost decline on Earth, uh then space centers may make sense. Today I’d bet that uh data centers on earth make more sense. Got it. And I think we and they will decline rapidly in cost and power will not be an issue. Yeah. And hopefully I guess we’ll start to get some data back as well in next few years with all these plans of various companies to have at least some experiments going on. So maybe two three years we’ll have some more evidence start to uh pile up as well. And what is the process of looking at it and maybe we can discuss in the context of fusion because you know fusion even today most people don’t believe is going to be realistic the net gain from fusion over next five years I think uh this is an area I tried to study last couple of years in fact I was looking for a possible investment in India we have few fusion startups but and maybe I’m guilty of you know when falling looking for consensus and not outlier belief but pretty much anyone you will talk to even today they think it’s not happening. And and that’s the key. I don’t talk to experts. You know, experts are experts in a previous version of the world, not the one you’re trying to create. Yeah. Like that’s the key to remember. If I get three teams to look at fusion and all three agree, then it’s probably not an unusual bet. It’s consensus. Yeah. If teams disagree, then it becomes more interesting. So it’s look it’s hard to explain this process. I think we do a pretty good job of judging where technology is going. Yeah. With probably 60 70% accuracy. Mhm. And then we make a lot of mistakes but we’re not afraid of those mistakes. So we’ve made our fair share. Mhm. And not never afraid to be mistaken. Mhm. But you know when you’re mistaken and you make the wrong bet, you lose one times your money. Yeah. But when you make the right bet, you make a 100 times your money. Then then it’s worth bet worth placing, right? And that’s our paradigm. You know, if OpenAI is successful, we should make more than a 100 times, which we will but that’s always been my approach. Most people are afraid to fail. Mhm. I like to say my willingness to fail is what gives me the ability to succeed. I’m not embarrassed when I fail. Yeah. Um and so I don’t worry about it. If you write every investment off the day you make it, then you only have upside. Same is true of Fusion. There’s a trillion dollar company in Fusion to be had. Most people, you say, don’t agree it’s feasible. I’m very s I think at this point there’s greater than 80% probability in five years nobody will be debating fusion works and fusion works economically. My bet is in two years people will say fusion works and five years people will say fusion works economically because you have to pass through both gates and once it’s economic it’s the source of energy for the whole planet. Mhm. By the way, there’s other sources. Super hot geothermal is another one I’m very excited about. I think it can be cheap, cheaper than natural gas and oil as a source of energy. Both fusion and super hot geothermal. That means geothermal above 400° centigrade. Let’s talk about both. But I want to double click on fusion. Just I’m trying to get to you know your process and way of thinking. Let’s take fusion. There are two ways one can look at, you know, one is macro. We obviously know fusion works. So we can look at the sun and know it’s a it’s it works. Uh but there are so many competing platforms and to really get into nitty-gritty of fusion you know different technology and so on you need to be fairly technical in nature. Do you at host venture employ consult or maybe you know goes against you know the philosophy of consulting expert is like a macro bet or is like looking at technology has now reached these many gates and readiness therefore it might be realistic in five years. No I think we look at fairly detailed look. Yeah. Uh obviously we employ experts from time to time but most of our gut gut call is ourselves. We are pretty technical. We can make these calls. So more expert diligence is confirmation rather than decision. Mhm. Uh the question you have to ask in something like fusion is why now? Yeah. In 2018, what has changed that would say it’s not possible beforeh but now it might be possible and that was high temperature superconductors. Mhm. And that dramatically changes both the experiments you can run and the rate at which you can run them. Yeah. And also the economics uh you know if you can use high temperature superconductors which was the big risk to build a in 2018 to build a 20 Tesla magnet. Mhm. Um you know if the magnet is four times more powerful than what was possible before your reactor is going to be 250th the size. Right? It suddenly becomes much more feasible to experiment try things build things. It doesn’t take 30 years to build. It takes three years to build and so everything becomes faster. And that was the bet we placed and that’s the kind of thing we look for. You know, every every time there’s something on the horizon that others don’t believe. Mhm. Um that we have to believe and then find the right team. The right finding the right team is very key. Mhm. When I’m met Bob Mumgard, he was a senior fellow at the MIT plasma fusion lab. I was just visiting because I like techy geeky places to visit. And he showed me this reactor where before I stepped on it, the temperature was couple hundred million degrees like 30 seconds before. Mhm. And now you can step on it. Uh pretty cool. Uh and so I like geeky things. we got talking and the more we talked the better I liked him and the what he was thinking and said let’s build a plan. So that’s how that came to be. Got it. Got it. So a lot of I guess in this case I probably bet on the person as well and person bet on the person for sure bet on the technology direction what is feasible what’s not that’s a risk assessment mostly I will do my own risk assessments and other people in our firm are very good at it too right so together as a group we can do that yeah one of the things when I you know when I try to study fusion one thing keeps coming up that what about fish we have not really exploited full power. We have so much uranium, thorium and so on small modular reactor and do you also look at this that that we need world needs a lot of nuclear energy. It will be great to have a lot of our energy especially now with the uh the power energy that AI needs to come from nuclear process one way or other. Do you think about fishision as well or or fusion is something that once it’s solved is obviously we have infinite once fusion is solved there’s no need for fishision and fishision has a different problem at least in the west nobody wants a fision plant in their neighborhood right so fision technology is not hard yeah it’s possible to do fision uh technologies and even like the to thorium reactor India has been working on which is a very good idea. Um but my view is very simple. If after you decide to build a plant and have the technology, you’re going to have 10 years of lawsuits nothing’s ever going to pencil out. Uh so you have to spend a lot of money before you know somebody will let you build in that neighborhood. And if you’re building 5,000 plants for the United States, it just doesn’t become feasible, right? So you have to look at the world holistically and say the politics will not allow fision to have 5,000 reactors in the US or 5,000 in India. India will need more than 5,000. And is there a risk that same politics will also try to at least get some hurdles for this massive data centers which are going to be energy guzzles and which are absolutely essential for this? Yes and no. But there’s solutions. A number of the data center providers are saying for everybody in the neighborhood of a data center will pay free electricity for residential purpose. It’s a small tax on their energy consumption. Mhm. you know if they’re doing a gigawatt they give 50 megawatts of free electricity to neighborhoods people are fine so there are solutions you can also develop your own reactors whether they’re super hot geothermal or fusion or nuclear you can do your own so you’re not tapping into the grid so there are solutions but it is a political problem mostly because people haven’t worried about the politics and given the current conventional source of energy the available next four five years of AI acceleration is energy likely to be a bottleneck or it’s where we’re okay I think energy is likely to be a bottleneck the next four or five years why because four or five years ago we weren’t thinking about the problem and nobody thought it was a big problem nobody believed AI would be a large consumer of electricity nobody that and so nobody prepared for it. I think there’s a lot of preparation for it now and so I think 5 years from now it’ll become less of a problem. It takes 5 years to build a power plant maybe longer and so in the early 2030s enough power will come online enough capacity enough turbines enough alternative sources of energy. I think it’s a short-term problem. It’s a fiveyear problem. Got it. Correct. I want to bring the conversation back to uh AI and what’s possible with AI and that’s the agency I guess you’re talking about. This is the agency idea, right? Uh Vel, I think we’re nearly out of time. On the just closing note, I want to really zoom out and the big picture question about how all of this pans out in the longer term. You know, one scenario is with this whole let’s say the entire promise of AI is fulfilled. There is, you know, abundance. Uh where are you on this whole so-called notion of singularity that regards the will and I think you’ve been to one of the Peter’s, you know, Even I take a practical view. If I look into the 2040s or 2050, it is possible in fact very likely Mhm. if we have the right government policy. Yes. That the need to work to survive for a living will go away. Right. We people will still work but work on things they want to work. Yeah. not things they have to work on because it’s the only job they have. You know, who wants to work uh in a field doing farm work in 40 50°ree heat? Who wants to work on an assembly line for 8 hours a day for 40 years? Yeah. That to me is slavery. It’s servitude to survival because you need a job. Those are not jobs with human dignity. I think those jobs can disappear and people can work on what they want to work on as they want to work or get good at singing, artists, you you name it. Sports, competing, so many things to do. So freedom is the ultimate promise of AI and just people free to live life and this that becomes a new normal. Hopefully whatever next for humanity space or beyond I guess will play out. Let me say and I say this in a piece I wrote two years ago. I wrote a piece will AI lead to dystopia or utopia. That was on AI in the western world. I wrote a piece earlier this year for India. I believe AI will ultimately free humanity to be human beings not servitudes to survival. Survival has been the goal of every species till now. That’s an incredible message and something you know something to really look forward to. Vod want to thank you for taking the time for this podcast as well as incredible career and impact in the world through all your investment and also inspiring so many VCs as well as entrepreneurs and I think you’ve had a very different way of doing things but you know this track record speaks for itself. So I think you know talking to you is very inspiring. I’m pretty sure our audience will be inspired and hopefully it will foster more agency and more people to really embrace you know the promise. I hope so. I was inspired myself learning about a Hungarian immigrant coming to Silicon Valley to start Intel. That inspired me and got me on the entrepreneurial track. So, I hope more people get inspired. Thank you, Ven. Thank you. [music] At Sparks, we aim to bring to you stories of exponential impact. We share in-depth analysis of what goes behind success stories. If you find our conversations interesting, you can join us by subscribing to our YouTube channel. You can also listen to Sparks on Spotify, Apple Podcast, or any other audio platform of your choice. If you have any suggestions on who we should invite or what topics we need to cover, just let us know in the comments. We are always listening, looking for ways to improve, and keep getting better as we go along.