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Tag: Marc Andreessen

  • AI Money Is Coming to a Midterm Near You

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    Photo: Matt Rourke/AP Photo

    During the past two election cycles, the giants of cryptocurrency emerged as some of the biggest money players. Sam Bankman-Fried’s PAC spent $70 million on donations in 2022, and Fairshake, a super-PAC formed to support pro-crypto politicians, spent a whopping $245 million in 2024. In just a few years, their bipartisan donations helped reshape the Senate, with cash going to support swing-state Democrats like Ruben Gallego, who pledged to play ball with industry-friendly legislation, while stymieing the election of swing-state Democratic crypto skeptics like Sherrod Brown.

    For the 2026 midterms, it looks like the artificial-intelligence companies are the new players with startling amounts of cash to spend. Bloomberg reports that Marc Andreessen and Ben Horowitz (of the eponymous AI-leaning venture-capital firm) and OpenAI co-founder Greg Brockman are among the leading donors to a super-PAC called Leading the Future, which looks to spend $125 million this cycle. Also in the mix is Public First, a PAC that received a $20 million pledge from Anthropic PBC, the OpenAI rival behind the AI assistant Claude.

    Leading the Future is already spending on primary races to boost Democratic and Republican candidates who are friendly to the AI and tech sectors, with appropriately named cutout PACs for both parties. (Take a guess which party is getting funding from American Mission and which is benefiting from Think Big.) In Texas, Leading the Future is supporting pro-AI Republican Chris Gober in the congressional race for the Tenth District outside of Austin, while in New York, it has spent $1.1 million dinging the AI-skeptic state assemblyman Alex Bores, who is running in the crowded primary to replace Jerry Nadler. A spokesperson for Leading the Future told Bloomberg that the PAC is “committed to supporting policymakers who want a smart national regulatory framework for AI.” If the crypto model is any indication, that most likely means industry-friendly regulation written or co-sponsored by lawmakers from both parties who received bags of campaign cash from crypto donors.

    Like the crypto-ad blitz of 2024, it may be hard to tell which ads are paid for by the AI PACs. For example, the Gober spots cite his record as a “MAGA warrior” but say nothing about the fact that one of his platforms is to ensure “America’s AI dominance.” The ads condemning Bores, who has proposed consumer-friendly AI regulation, mostly refer to his record working with the defense contractor Palantir. If only AI executives were voting, this might be a good association; Palantir was co-founded by Peter Thiel and is a close partner of the industry titan NVIDIA. But in New York’s progressive 12th District, where Bores is running, the contractor’s connections to Palantir (and by association, ICE) could weigh him down.

    While PACs, by their very nature, try to conceal where the money is coming from, there might be another reason why Leading the Future is running ads that obscure a focus on AI: The industry’s obscene energy demand is increasing the cost of electricity in many regions throughout the country. Maybe a cost-of-living election isn’t the best time for a politician to admit that they’re running on AI donations.

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    Matt Stieb

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  • What’s Next for AI? Andreessen Horowitz Founders Share Their Thoughts

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    Stocks of companies tied to artificial intelligence have been hitting stratospheric levels for over a year now, thrilling investors, but also causing concerns about a potential AI bubble. As startups close breathtaking funding rounds, like the $40 billion OpenAI collected in March of this year, fears of an AI bubble are growing – and some say a burst could be even bigger than the dotcom bubble of the late 1990s.

    The bubble theory is hotly debated. Some within the industry say they agree the investment landscape is bloated, including OpenAI co-founded Sam Altman. Other experts, like Goldman Sachs, however, say we’re not in one (yet) – and Fed Chair Jerome Powell has been skeptical of the bubble calls. As that debate rages, investors continue to fund AI startups.

    Few investors are in as deep as Marc Andreessen and Ben Horowitz. Their venture firm, Andreessen Horowitz (commonly called a16z) has sunk billions into the AI space. In April, it was reported the company was in early talks to raise a massive $20 billion AI-focused fund. The two investors recently came together at a16z’s Runtime conferences to talk about where AI can go beyond chatbots.

    Neither was willing to make any specific predictions about AI’s forthcoming capabilities, saying it’s too early to even imagine that. Andreessen likened AI to the personal computer in 1975, noting there was no way at that time to imagine what PCs would be capable of today. However, he expects similar levels of advancement – from a stronger starting point.

    AI, he said, is already approaching levels of human creativity – and while Andreessen would love to see humans continue to have superiority in that area, he thinks it’s unlikely. Tools like OpenAI’s Sora 2 video, for instance, are already capable of creating realistic scenes, animations, and special effects – and the introduction of AI Actress Tilly Norwood has caused an outcry and prompted debate in Hollywood. 

    “I wanna like hold out hope that there is still something special about human creativity,” he said. “And I certainly believe that, and I very much want to believe that. But, I don’t know. When I use these things, I’m like, Wow, they seem to be awfully smart and awfully creative. So I’m pretty convinced that they’re gonna clear the bar.”

    Horowitz agreed, saying that while AI might not currently create at the same level as human artists, whether painters or hip-hop performers, that’s largely due to how little it has learned so far. It’s just a matter of time before it has an equal or superior level of talent. And some artists are already looking to use AI to collaborate, he said.

    “With the current state of the technology, kind of the pre-training doesn’t have quite the right data to get to what you really wanna see, but, you know, it’s pretty good,” he said. “Hip hop guys are interested because it’s almost like a replay of what they did—they took other music and built new music out of it. AI is a fantastic creative tool. It way opens up the palette.”

    While AI can devour as many data sets as programmers throw at it, that doesn’t give the technology situational awareness. It is, in essence, book smarts vs. street smarts. But the robotics field is expanding quickly. Elon Musk and Tesla are working on humanoid robots and Robotics company 1X has already started to take preorders for a $20,000 humanoid robot that will ‘live’ and work around your home.

    Once that technology and AI are blended, Andreessen said, AI will see a significant jump in actionable intelligence.

    “When we put AI in physical objects that move around the world, you’re gonna be able to get closer to having that integrated intellectual, physical experience,” he said. “Robots that are gonna be able to gather a lot more real-world data. And so, maybe you can start to actually think about synthesizing a more advanced model of cognition.”

    While there are plenty of experts who warn the AI market could be in a bubble right now, including OpenAI CEO and co-founder Sam Altman, Horowitz dismisses the idea, saying bubbles occur when supply outstrips demand – and that’s not the case with AI.

    “We don’t have a demand problem right now,” he said. “The idea that we’re going to have a demand problem five years from now, to me, seems quite absurd. Could there be weird bottlenecks that appear, like we don’t have enough cooling or something like that? Maybe. But, right now, if you look at demand and supply and what’s going on and multiples against growth, it doesn’t look like a bubble at all to me.”

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    Chris Morris

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  • Andreessen Horowitz Founders Notice A.I. Models Are Hitting a Ceiling

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    The investment firm was founded by Ben Horowitz and Marc Andreessen in 2009. Photos by Phillip Faraone/Getty Images for WIRED and Paul Chinn/The San Francisco Chronicle via Getty Images

    Despite continuing to bet big on A.I. startups and chip programs, the founders of the venture capital firm Andreessen Horowitz say they’ve noticed a drop off in A.I. model capability improvements in recent years. Two years ago, OpenAI’s GPT-3.5 model was “way ahead of everybody else’s,” said Marc Andreessen, who co-founded Andreessen Horowitz alongside Ben Horowitz in 2009, on a podcast released yesterday (Nov. 5). “Sitting here today, there’s six that are on par with that. They’re sort of hitting the same ceiling on capabilities,” he added.

    That’s not to say the investment firm doesn’t have faith in the new technology. One of the most aggressive investors in the A.I. space, Andreessen Horowitz earlier this year earmarked $2.25 billion in funding for A.I.-focused applications and infrastructure and has led investments in notable companies including Mistral AI, a French startup founded by former DeepMind and Meta (META) researchers, and Air Space Intelligence, an aerospace company using A.I. to enhance air travel.

    Despite their embrace of the new technology, Andreessen and Horowitz concede there are growth limitations. In the case of OpenAI’s models, the difference in capability growth between its GPT-2.0, GPT-3 and GPT-3.5 models compared to the difference between GPT-3.5 and GPT-4 show that “we’ve really slowed down in terms of the amount of improvement,” said Horowitz.

    One of the primary challenges for A.I. developers has been a global shortage of graphics processing units (GPUs), the chips that power A.I. models. OpenAI CEO Sam Altman last week cited needs to allocate compute as causing the company to “face a lot of limitations and hard decisions” about what projects they focus on. Nvidia, the leading GPU maker, has previously described the shortage as making clients “tense” and “emotional.”

    In response to this demand, Andreessen Horowitz recently established a chip-lending program that provides GPUs to its portfolio companies in exchange for equity. The firm reportedly has been working on building a stockpile chip cluster of 20,000 GPUs, including Nvidia’s. However, chips aren’t the only aspect of compute that is of concern, according to Horowitz, who pointed to the need for more powering and cooling across the data centers housing GPUs. “Once they get chips we’re not going to have enough power, and once we have the power we’re not going to have enough cooling,” he said on yesterday’s podcast.

    But compute needs might not actually be the largest barrier when it comes to improving A.I. model capabilities, according to the venture capital firm. It’s the availability of training data needed to teach A.I. models how to behave that is increasingly becoming a problem. “The big models are trained by scraping the internet and pulling in all human-generated training data, all-human generated text and increasingly video and audio and everything else, and there’s just literally only so much of that,” said Andreessen.

    Between April of 2024 and 2023, 5 percent of all data and 25 percent of data from the highest quality sources was restricted by websites cracking down on the use of their text, images and videos in training A.I., according to a recent study from the Data Provenance Initiative.

    The issue has become so large that major A.I. labs are “hiring thousands of programmers and doctors and lawyers to actually handwrite answers to questions for the purpose of being able to train their A.I.’s—it’s at that level of constraint,” added Andreessen. OpenAI, for example, has a “Human Data Team” that works with A.I. trainers on gathering specialized data to train and evaluate models. And numerous A.I. companies have begun working with startups like Scale AI and Invisible Tech that hire human experts with specialized knowledge across medicine, law and other areas to help fine-tune A.I. model answers.

    Such practices fly in the face of fears relating to A.I.-driven unemployment, according to Andreessen, who noted that the dwindling supply of data has led to an unexpected A.I. hiring boom to help train models. “There’s an irony to this.”

    Andreessen Horowitz Founders Notice A.I. Models Are Hitting a Ceiling

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    Alexandra Tremayne-Pengelly

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  • Venture capitalists are divided on Harris or Trump

    Venture capitalists are divided on Harris or Trump

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    LOS ANGELES (AP) — Being a venture capitalist carries a lot of prestige in Silicon Valley. Those who choose which startups to fund see themselves as fostering the next big waves of technology.

    So when some of the industry’s biggest names endorsed former President Donald Trump and the onetime VC he picked for a running mate, JD Vance, people took notice.

    Then hundreds of other VCs — some high profile, others lesser-known — threw their weight behind Vice President Kamala Harris, drawing battle lines over which presidential candidate will be better for tech innovation and the conditions startups need to thrive. For years, many of Silicon Valley’s political discussions took place behind closed doors. Now, those casual debates have gone public — on podcasts, social media and online manifestos.

    Venture capitalist and Harris backer Stephen DeBerry says some of his best friends support Trump. Though centered in a part of Northern California known for liberal politics, the investors who help finance the tech industry have long been a more politically divided bunch.

    “We ski together. Our families are together. We’re super tight,” said DeBerry, who runs the Bronze Venture Fund. “This is not about not being able to talk to each other. I love these guys — they’re almost all guys. They’re dear friends. We just have a difference of perspective on policy issues.”

    It remains to be seen if the more than 700 venture capitalists who’ve voiced support for a movement called “VCs for Kamala” will match the pledges of Trump’s well-heeled supporters such as Elon Musk and Peter Thiel. But the effort marks “the first time I’ve seen a galvanized group of folks from our industry coming together and coalescing around our shared values,” DeBerry said.

    “There are a lot of practical reasons for VCs to support Trump,” including policies that could drive corporate profits and stock market values and favor wealthy benefactors, said David Cowan, an investor at Bessemer Venture Partners. But Cowan said he is supporting Harris as a VC with a “long-term investment horizon” because a “Trump world reeling from rampant income inequality, raging wars and global warming is not an attractive environment” for funding healthy businesses.

    Several prominent VCs have voiced their support for Trump on Musk’s social platform X. Public records show some of them have donated to a new, pro-Trump super PAC called America PAC, whose donors include powerful tech industry conservatives with ties to SpaceX and Paypal and who run in Musk’s social circle. Also driving support is Trump’s embrace of cryptocurrency and promise to end an enforcement crackdown on the industry.

    Although some Biden policies have alienated parts of the investment sector concerned about tax policy, antitrust scrutiny or overregulation, Harris’ bid for the presidency has reenergized interest from VCs who until recently sat on the sidelines. Some of that excitement is due to existing relationships with Silicon Valley that are borne out of Harris’ career in the San Francisco area and her time as California’s attorney general.

    “We buy risk, right? And we’re trying to buy the right type of risk,” Leslie Feinzaig, founder of “VCs for Kamala” said in an interview. “It’s really hard for these companies that are trying to build products and scale to do so in an unpredictable institutional environment.”

    What to know about the 2024 Election

    The schism in tech has left some firms split in their allegiances. Although venture capitalists Marc Andreessen and Ben Horowitz, founders of the firm that is their namesake, endorsed Trump, one of their firm’s general partners, John O’Farrell, pledged his support for Harris. O’Farrell declined further comment.

    Doug Leone, the former managing partner of Sequoia Capital, endorsed Trump in June, expressing concern on X “about the general direction of our country, the state of our broken immigration system, the ballooning deficit, and the foreign policy missteps, among other issues.” But Leone’s longtime business partner at Sequoia, Michael Moritz, wrote in the Financial Times that tech leaders supporting Trump “are making a big mistake.”

    Shaun Maguire, a partner at Sequoia, posted on X that he donated $300,000 to Trump’s campaign after supporting Hilary Clinton in the 2016 presidential election. Federal Election Commission records show that Maguire donated $500,000 to America PAC in June; Leone donated $1 million.

    “The area where I disagree with Republicans the most is on women’s rights. And I’m sure I’ll disagree with some of Trump’s policies in the future,” Maguire wrote. “But in general I think he was surprisingly prescient.”

    Feinzaig, managing director at venture firm Graham & Walker, said that she launched “VCs for Kamala” because she felt frustrated that “the loudest voices” were starting to “sound like they were speaking for the entire industry.”

    Much of the VC discourse about elections is in response to a July podcast and manifesto in which Andreessen and Horowitz backed Trump and outlined their vision of a “Little Tech Agenda” that they said contrasted with the policies sought by Big Tech.

    They accused the U.S. government of increasing hostility toward startups and the VCs who fund them, citing Biden’s proposed higher taxes on the wealthy and corporations and regulations they said could hobble emerging industries involving blockchain and artificial intelligence.

    Vance, a U.S. senator from Ohio who spent time in San Francisco working at Thiel’s investment firm, voiced a similar perspective about “little tech” more than a month before he was chosen as Trump’s running mate.

    “The donors who were really involved in Silicon Valley in a pro-Trump way, they’re not big tech, right? They’re little tech. They’re starting innovative companies. They don’t want the government to destroy their ability to innovate,” Vance said in an interview on Fox News in June.

    Days earlier, Vance had joined Trump at a San Francisco fundraiser at the home of venture capitalist and former PayPal executive David Sacks, a longtime conservative. Vance said Trump spoke to about 100 attendees that included “some of the leading innovators in AI.”

    DeBerry said he doesn’t disagree with everything Andreesen Horowitz founders espouse, particularly their wariness about powerful companies controlling the agencies that regulate them. But he objects to their “little tech” framing, especially coming from a multibillion-dollar investment firm that he says is hardly the voice of the little guy. For DeBerry, whose firm focuses on social impact, the choice is not between big and little tech but “chaos and stability,” with Harris representing stability.

    Complicating the allegiances is that a tough approach to breaking up the monopoly power of big corporations no longer falls along partisan lines. Vance has spoken favorably of Lina Khan, who Biden picked to lead the Federal Trade Commission and has taken on several tech giants. Meanwhile, some of the most influential VCs backing Harris — such as LinkedIn co-founder Reid Hoffman; and Sun Microsystems co-founder Vinod Khosla, an early investor in ChatGPT-maker OpenAI — have sharply criticized Khan’s approach.

    U.S. Rep. Ro Khanna, a Democrat whose California district encompasses part of Silicon Valley, said Trump supporters are a vocal minority reflecting a “third or less” of the region’s tech community. But while the White House has appealed to tech entrepreneurs with its investments in clean energy, electric vehicles and semiconductors, Khanna said Democrats must do a better job of showing that they understand the appeal of digital assets.

    “I do think that the perceived lack of embrace of Bitcoin and the blockchain has hurt the Democratic Party among the young generation and among young entrepreneurs,” Khanna said.

    Naseem Sayani, a general partner at Emmeline Ventures, said Andreessen and Horowitz’s support of Trump became a lightning rod for those in tech who do not back the Republican nominee. Sayani signed onto “VCs for Kamala,” she said, because she wanted the types of businesses that she helps fund to know that the investor community is not monolithic.

    “We’re not single-profile founders anymore,” she said. “There’s women, there’s people of color, there’s all the intersections. How can they feel comfortable building businesses when the environment they’re in doesn’t actually support their existence in some ways?”

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  • Ashley Madison Is Still Around, a Powerful Chatbot Disappeared, Elon Musk Lays Off More Workers and More

    Ashley Madison Is Still Around, a Powerful Chatbot Disappeared, Elon Musk Lays Off More Workers and More

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    Illustration: Vicky Leta, Photo: Patrick T. Fallon/Bloomberg (Getty Images), Said Fx (Getty Images), Chip Somodevilla (Getty Images), Mario Tama / Staff (Getty Images), Axelle/Bauer-Griffin/FilmMagic (Getty Images), David Paul Morris/Bloomberg (Getty Images), Dimitrios Kambouris for The Met Musuem/Vogue (Getty Images), Bene Riobó via Wikimedia Commons, Screenshot: YouTube / Mint Mobile

    This week saw a blast from the past as we told the tales of numerous fraud victims who were targeted by scammers on the cheating site, Ashley Madison. A new chatbot came and went leaving so many people with questions. And then there’s Elon Musk who went “hardcore” with layoffs he even got rid of those pesky interns that really hit a company’s bottom line with those big salaries given to college students. Here are the top tech stories of the week.

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    Gizmodo Staff

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  • Marc Andreessen: MrBeast Feastables and Logan Paul’s Prime are not ‘gimmicks’ but the ‘future of consumer products’

    Marc Andreessen: MrBeast Feastables and Logan Paul’s Prime are not ‘gimmicks’ but the ‘future of consumer products’

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    You might dismiss as mere gimmicks products from YouTube stars like MrBeast and Logan Paul—think Feastables snacks and Prime energy drinks, respectively. But billionaire venture capitalist Marc Andreessen leans toward another view: that they represent the future of consumer-product relationships.

    The reason that Coca-Cola, Kraft Mac & Cheese, and their ilk exist, he recently argued, is “because of the media of the era in which those brands were created.” 

    Andreessen laid out his reasoning this week on The Ben & Marc Show, a podcast he hosts with Ben Horowitz, a fellow cofounder of the VC firm a16z, aka Andreessen Horowitz. 

    He cited other notable brands led by non-YouTube celebrities, among them George Clooney’s Casamigos Tequila and Kim Kardashian’s Skims shapewear, which she’s turned into a $4 billion business.

    “The historical way of looking at this, I think, would be these are gimmicks,” Andreessen said. “Fans of somebody are going to buy the thing they recommend for a while,” but “most consumer markets are not this.” 

    It’s conglomerates like Unilever, Kraft Foods, and Procter & Gamble that provide the consumer products shoppers generally encounter.

    But a “more aggressive argument that could be made—which is kind of where I am—is maybe the influencer/creator-branded, kind of individually-branded things, this might be the future of consumer products generally,” Andreessen said.

    In the mass media era, he continued, companies built brands primarily via TV commercials, where “you had a single shot get Coca-Cola established, or whatever is was. You had celebrities in those days, but they weren’t front-and-center in this effort because you were just trying to get the basic message of the of the product out, for the most part.” 

    But that led to an “unnatural configuration,” he said, where individual consumers had a relationship with a brand or corporation, rather than with a person. “If that’s all I can have, then okay, fine, but like, really, that’s my emotional affinity? That’s how I’m going to kind of process things?”

    By contrast, he said, his young son loves MrBeast, a role model for him and millions of other kids. One could argue it’s still not a real relationship since it isn’t two-way, but “it’s a relationship with a person,” Andreessen noted.

    “Maybe we’re at the beginning of what is a monster wave,” he said, “and we’ll be sitting here 20 years from now and it will turn out this was basically the great transition, and in the future the brands will actually all be individually led.”

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    Steve Mollman

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  • Elon Musk warns ‘something scared’ OpenAI chief scientist Ilya Sutskever as CEO Sam Altman’s return fails to answer key questions

    Elon Musk warns ‘something scared’ OpenAI chief scientist Ilya Sutskever as CEO Sam Altman’s return fails to answer key questions

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    Elon Musk played a big role in persuading Ilya Sutskever to join OpenAI as chief scientist in 2015. Now the Tesla CEO wants to know what he saw there that scared him so much.

    Sutskever, whom Musk recently described as a “good human” with a “good heart”—and the “linchpin for OpenAI being successful”—served on the OpenAI board that fired CEO Sam Altman two Fridays ago; indeed, Sutskever informed Altman of his dismissal. Since then, however, the board has been revamped and Altman reinstated, with investors led by Microsoft pushing for the changes.

    Sutskever himself backtracked on Monday, writing on X, “I deeply regret my participation in the board’s actions. I never intended to harm OpenAI.” 

    But Musk and other tech elites—including ones who mocked the board for firing Altman—are still curious about what Sutskever saw. 

    Late on Thursday, venture capitalist Marc Andreessen, who has ridiculed “doomers” who fear AI’s threat to humanity, posted to X, “Seriously though — what did Ilya see?” Musk replied a few hours later, “Yeah! Something scared Ilya enough to want to fire Sam. What was it?”

    That remains a mystery. The board gave only vague reasons for firing Atlman. Not much has been revealed since.

    ‘Such drastic action’

    OpenAI’s mission is to develop artificial general intelligence (AGI) and ensure it “benefits all of humanity.” AGI refers to a system that can match humans when faced with an unfamiliar task. 

    OpenAI’s unusual corporate structure put a nonprofit board higher than the capped-profit company, allowing the board to fire the CEO if, for instance, it felt the commercialization of potentially dangerous AI capabilities was moving at an unsafe speed.

    Early on Thursday, Reuters reported that several OpenAI researchers had warned the board in a letter of a new AI that could threaten humanity. OpenAI, after being contacted by Reuters, then wrote an internal email acknowledging a project called Q* (pronounced Q-Star), which some staffers felt might be a breakthrough in the company’s AGI quest. Q* reportedly can ace basic mathematical tests, suggesting an ability to reason, as opposed ChatGPT’s more predictive behavior.

    Musk has longed warned of the potential dangers to humanity from artificial intelligence, though he also sees its upsides and now offers a ChatGPT rival called Grok through his startup xAI. He cofounded OpenAI in 2015 and helped lure key talent including Sutskever, but he left a few years later on a sour note. He later complained that the onetime nonprofit—which he had hoped would serve as a counterweight to Google’s AI dominance—had instead become a “closed source, maximum-profit company effectively controlled by Microsoft.”

    Last weekend, he weighed in on the OpenAI board’s decision to fire Altman, writing: “Given the risk and power of advanced AI, the public should be informed of why the board felt they had to take such drastic action.” 

    When an X user suggested there might be a “bombshell variable” unknown to the public, Musk replied, “Exactly.”

    Sutskever, after his backtracking on Monday, responded to the return of Altman by writing on Wednesday, “There exists no sentence in any language that conveys how happy I am.”  

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    Steve Mollman

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  • A.I. doomers are a ‘cult’ — here’s the real threat, according to Marc Andreessen

    A.I. doomers are a ‘cult’ — here’s the real threat, according to Marc Andreessen

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    Andreessen Horowitz partner Marc Andreessen

    Justin Sullivan | Getty Images

    Venture capitalist Marc Andreessen is known for saying that “software is eating the world.” When it comes to artificial intelligence, he claims people should stop worrying and build, build, build.

    On Tuesday, Andreessen published a nearly 7,000-word missive on his views on AI, the risks it poses and the regulation he believes it requires. In trying to counteract all the recent talk of “AI doomerism,” he presents what could be seen as an overly idealistic perspective of the implications.

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    Andreessen starts off with an accurate take on AI, or machine learning, calling it “the application of mathematics and software code to teach computers how to understand, synthesize, and generate knowledge in ways similar to how people do it.”

    AI isn’t sentient, he says, despite the fact that its ability to mimic human language can understandably fool some into believing otherwise. It’s trained on human language and finds high-level patterns in that data. 

    “AI doesn’t want, it doesn’t have goals, it doesn’t want to kill you, because it’s not alive,” he wrote. “And AI is a machine – is not going to come alive any more than your toaster will.”

    Andreessen writes that there’s a “wall of fear-mongering and doomerism” in the AI world right now. Without naming names, he’s likely referring to claims from high-profile tech leaders that the technology poses an existential threat to humanity. Last week, Microsoft founder Bill Gates, OpenAI CEO Sam Altman, DeepMind CEO Demis Hassabis and others signed a letter from the Center for AI Safety about “the risk of extinction from AI.”

    We're in the early stage of the A.I. hype cycle, says venture capital fund

    Tech CEOs are motivated to promote such doomsday views because they “stand to make more money if regulatory barriers are erected that form a cartel of government-blessed AI vendors protected from new startup and open source competition,” Andreessen wrote.  

    Many AI researchers and ethicists have also criticized the doomsday narrative. One argument is that too much focus on AI’s growing power and its future threats distracts from real-life harms that some algorithms cause to marginalized communities right now, rather than in an unspecified future.

    But that’s where most of the similarities between Andreessen and the researchers end. Andreessen writes that people in roles like AI safety expert, AI ethicist and AI risk researcher “are paid to be doomers, and their statements should be processed appropriately,” he wrote. In actuality, many leaders in the AI research, ethics and trust and safety community have voiced clear opposition to the doomer agenda and instead focus on mitigating today’s documented risks of the technology.

    Instead of acknowledging any documented real-life risks of AI – its biases can infect facial recognition systems, bail decisions, criminal justice proceedings, mortgage approval algorithms and more – Andreessen claims AI could be “a way to make everything we care about better.” 

    He argues that AI has huge potential for productivity, scientific breakthroughs, creative arts and reducing wartime death rates.

    “Anything that people do with their natural intelligence today can be done much better with AI,” he wrote. “And we will be able to take on new challenges that have been impossible to tackle without AI, from curing all diseases to achieving interstellar travel.” 

    From doomerism to idealism

    Though AI has made significant strides in many areas, such as vaccine development and chatbot services, the technology’s documented harms has led many experts to conclude that, for certain applications, it should never be used.

    Andreessen describes these fears as irrational “moral panic.” He also promotes reverting to the tech industry’s “move fast and break things” approach of yesteryear, writing that both big AI companies and startups “should be allowed to build AI as fast and aggressively as they can” and that the tech “will accelerate very quickly from here – if we let it.” 

    Andreessen, who gained prominence in the 1990s for developing the first popular internet browser, started his venture firm with Ben Horowitz in 2009. Two years later, he wrote an oft-cited blog post titled “Why software is eating the world,” which said that health care and education were due for “fundamental software-based transformation” just as so many industries before them.

    Eating the world is exactly what many people fear when it comes to AI. Beyond just trying to tamp down those concerns, Andreessen says there’s work to be done. He encourages the controversial use of AI itself to protect people against AI bias and harms.

    “Governments working in partnership with the private sector should vigorously engage in each area of potential risk to use AI to maximize society’s defensive capabilities,” he said.  

    In Andreessen’s own idealist future, “every child will have an AI tutor that is infinitely patient, infinitely compassionate, infinitely knowledgeable, infinitely helpful.” He expresses similar visions for AI’s role as a partner and collaborator for every person, scientist, teacher, CEO, government leader and even military commander. 

    Is China the real threat?

    Near the end of his post, Andreessen points out what he calls “the actual risk of not pursuing AI with maximum force and speed.”

    That risk, he says, is China, which is developing AI quickly and with highly concerning authoritarian applications.  According to years of documented cases, the Chinese government leans on surveillance AI, such as using facial recognition and phone GPS data to track and identify protesters. 

    To head off the spread of China’s AI influence, Andreessen writes, “We should drive AI into our economy and society as fast and hard as we possibly can.”

    He then offers a plan for aggressive AI development on behalf of big tech companies and startups and using the “full power of our private sector, our scientific establishment, and our governments.”

    Andreessen writes with a level of certainty about where the world is headed, but he’s not always great at predicting what’s coming.

    His firm launched a $2.2 billion crypto fund in mid-2021, shortly before the industry began to crater. And one of its big bets during the pandemic was on social audio startup Clubhouse, which soared to a $4 billion valuation while people were stuck at home looking for alternative forms of entertainment. In April, Clubhouse said it’s laying off half its staff in order to “reset” the company.

    Throughout Andreessen’s essay, he calls out the ulterior motives that others have when it comes to publicly expressing their views on AI. But he has his own. He wants to make money on the AI revolution, and is investing in startups with that goal in mind.

    “I do not believe they are reckless or villains,” he concluded in his post. “They are heroes, every one. My firm and I are thrilled to back as many of them as we can, and we will stand alongside them and their work 100%.”

    WATCH: CNBC’s interview with Altimeter Capital’s Brad Gerstner

    Watch CNBC’s full interview with Altimeter Capital founder Brad Gerstner on A.I. risks

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  • The pandemic drove Clubhouse to a $4 billion valuation that never looked sustainable

    The pandemic drove Clubhouse to a $4 billion valuation that never looked sustainable

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    Social audio platform Clubhouse announced Thursday that it was laying off half its staff in order to “reset” the company. It shouldn’t come as a surprise.

    If there was a posterchild for the tech industry’s irrational exuberance during the Covid pandemic, it was Clubhouse.

    With the physical world closed for business, consumers looked for other ways to congregate and find entertainment. So did celebrities. So did tech executives. So did venture capitalists.

    Back then, capital was still cheap and plentiful. Software was still perceived as “eating the world,” in the famous words of investor Marc Andreessen. It was time for the next great social network. Clubhouse, which allowed people to listen in on discussions about topics including music, technology, fashion, technology and more technology, was on a viral curve. MC Hammer, Oprah Winfrey, and Mark Zuckerberg were there.

    In January 2021, Andreessen’s venture firm, Andreessen Horowitz, led an investment in the company at a reported $1 billion valuation, up from $100 million in mid-2020. Three months later, that number swelled to $4 billion, with Tiger Global and DST Global joining the party. As of mid-April of that year, downloads had reached 14.2 million, according to App Annie (now Data.ai), but growth had flattened before a revenue model was ever put in place.

    By late 2021, the Covid boom was fading. Economies were reopening and the Federal Reserve was signaling that the extended stretch of rock-bottom interest rates would be coming to an end. Tech stocks peaked in November 2021, just as the last of a massive wave of high-valued IPOs hit the market. Share prices of stay-at-home beneficiaries like Zoom and Peloton got crushed.

    The Clubhouse fad evaporated so quickly that Thursday’s blog post, indicating that the company was laying off 50% its staff, seemed as if it should’ve come many months earlier. Davison told Bloomberg in late 2021 that we “grew way, way too fast” earlier in the year.

    In Thursday’s post, Clubhouse said the downsizing was necessary to “reset the company,” which, according to LinkedIn, has just over 200 employees.

    “As the world has opened up post-Covid, it’s become harder for many people to find their friends on Clubhouse and to fit long conversations into their daily lives,” co-founders Paul Davison and Rohan Seth wrote. “To find its role in the world, the product needs to evolve. This requires a period of change.”

    Layoffs have become a central part of the fabric of the tech industry in the past year as companies across software, e-commerce and social media grapple with a sluggish economy. There have been more than 184,000 job cuts in tech this year among more than 600 companies, following almost 165,000 in 2022 at more than 1,000 companies, according to Layoffs.fyi.

    Clubhouse’s situation was more precarious than most. Its valuation was viewed as frothy even in 2021, when the market was red hot. Venture capital, particularly at the late stage, has largely dried up since early last year, and even the most promising high-valued companies like Stripe and Canva have seen their valuations dramatically reduced.

    Outside of the artificial intelligence boom sparked by OpenAI’s ChatGPT, there’s little action in the world of billion-dollar private tech.

    Still, the Clubhouse founders insist they have enough capital to keep going, after reportedly raising hundreds of millions of dollars in 2021.

    “We arrived at this conclusion reluctantly, as we have years of runway remaining and do not feel immediate pressure to reduce costs,” the blog post said. “But we believe that a smaller team will give us focus and speed, and help us launch the next evolution of the product.”

    For departing employees, Clubhouse said it’s paying salaries and covering health care through the end of August, accelerating equity vesting and providing career support.

    Where does the company go from here? The founders addressed that concern as well.

    “For those who are staying, we know this is a difficult time for you as well,” they wrote. “Not only are you saying goodbye to people you’ve built alongside, but many of you will be feeling uncertainty about the future. We want you to know that we’re making this change to ensure that our future is strong.”

    Davison and Seth said they’re working on “Clubhouse 2.0” to be a “better way for all of us to hear our friends’ voices, have more meaningful conversations and feel connected to the people around us.” 

    To succeed, they have defy increasingly long odds. Consumer internet companies win by first attracting huge audiences. Once they’ve reached critical mass, they can monetize their user base through some combination of advertising, subscriptions or virtual goods.

    More often than not, though, viral apps are hot for a moment, and then die off either because the novelty disappears or a larger platform creates a copycat. Either way, when the buzz goes away, the momentum rarely returns.

    WATCH: Facebook is taking on Clubhouse

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