- AI tech start-ups are overvalued:Vinod Khosla, an early OpenAI backer, warns that AI tech start-ups are overvalued and most will fail to make money.Investors have rushed to invest in AI start-ups, leading to soaring valuations.Khosla compares the hype around AI to last year's frenzy of investment into cryptocurrency start-ups.
- Investments in AI are likely to lose money:Khosla predicts that most venture investments in AI today will lose money.He highlights the phenomenon of the "greater fool theory", where investors hope that others will invest at an even greater valuation.Venture capitalists have invested $21.5bn into AI companies globally this year, compared to $5.1bn in 2022.
- AI has the potential to change the world:Khosla believes that AI will radically change the world and has the potential to take on 80% of the workload in 80% of all human roles within the next two decades.He predicts that AI will create huge economic value.OpenAI, backed by Khosla Ventures, is now seeking a valuation of around $86bn.
- Valuations of rival AI companies have soared:Rival AI companies such as Anthropic, Cohere, and Inflection have seen their valuations soar this year.Anthropic was valued at $5bn, Cohere at $2.1bn, and Inflection reportedly at $4bn.Khosla suggests being selective in later-stage funding rounds to avoid expectations exceeding the underlying value of the business.
- Concerns about AI technology's impact on US presidential election:Khosla raises concerns about powerful AI technology being used to undermine next year's US presidential election.He praises efforts by the Biden administration and Congress to limit US capital and expertise flowing to Chinese companies working on AI.Khosla states that the US should use all available tools to win the AI race with China.
- AI's potential to provide global services:Khosla suggests that AI tools could provide free doctors or AI tutors to children worldwide.He believes this ability to bring services to those in need will determine whether western values or China win.Khosla advocates for importing talented researchers from Russia, attracting capital from the Middle East, and creating an attractive regulatory environment.
