Vinod Khosla Predicting the Future | Ep. 15

Vinod Khosla 0:00 We're gonna be in a era of abundance that's so large, it's very hard for people to imagine. The simplest way to say it is the need to work will go away. People will work on things because they wanna work on things, not because they need to work on things to pay their mortgage. [upbeat music]

Jack Altman 0:19 All right. I am super excited to be here with Vinod. Thank you so much for doing this with me today. I really am looking forward to this conversation.

Vinod Khosla 0:25 Look

Vinod Khosla 0:26 forward to it.

Jack Altman 0:27 When you first walked in here, uh, before we got started, you were saying, "Wow, you know, the world's crazy," um, and you've invested through many periods of time. Obviously, you know, there have been a lot of ups and downs, but, um, you said the world's particularly crazy now. Can you share why you said that or why you're feeling that way?

Vinod Khosla 0:45 I've been doing venture capital for forty years, so I've gone through every large innovation cycle. Uh, I've never seen a cycle like this. To put a order of magnitude on it, almost every job is being reinvented. Every material thing is being reinvented differently, with AI as a driver. Probably the best way to describe it, if you look fifteen years hence, and that's too far to look, we'd have to look back at least fifty years-

Jack Altman 1:25 Hmm

Vinod Khosla 1:26 ... maybe in the 1960s, to see the delta in change. And so we're going to see this large change in, in sort of such a short time. Uh, it's almost hard to imagine how society adjusts. And if I go even further, almost certainly within the next five years, any economically valuable job humans can do, AI will be able to do eighty percent of it, with a few exceptions like heart surgery or brain surgery. But by and large, eighty percent of, eighty percent of all jobs can be done by an AI. And if that's happening in the next five years, the world is gonna be a very different place. So I see this sort of like invention happening at a frenetic pace that is so large compared to even the dot-com phase when the internet first came, and there was Netscape and TCIP and all that. It's almost hard to imagine. No matter where you look, everything's being reinvented in some fundamental way, using often, uh, the, the, the, the innovations from AI and the capability from AI, uh, but also a few other vectors, like stuff happening in biology, stuff happening in fusion and other areas. Uh, so-

Jack Altman 3:04 Yeah

Vinod Khosla 3:04 ... everything's up for grabs.

Jack Altman 3:05 So, so I guess that's then leading to a frenzied pace of investment, companies being created, you know, new ideas getting tried all at once. Is your overall read based on, you know, on one hand, it's crazy and frenetic, on the other hand, everything you just said about, yeah, about like maybe a billion jobs are gonna be, you know, done by an AI in the next couple years or several years, or something like that. Do you net out to being very optimistic about this moment in time for tech? Or do you think there's gonna be a lot of carnage, or how do, how do you think?

Vinod Khosla 3:38 So my view, the next five years, to, to twenty thirty, will look like productivity improvements. The way economists would say productivity is going up, GDP is going up, or accelerating on GDP, things like that. And then if I look to the fifteen years hence, twenty forty and beyond, we're gonna be in a era of abundance that's so large, it's very hard for people to imagine. The simplest way to say it is the need to work will go away.

Jack Altman 4:14 Yeah.

Vinod Khosla 4:15 Uh, people will work on things because they wanna work on things, not because they need to work on things to pay their mortgage.

Jack Altman 4:22 Is that gonna require us to change anything about, like, the social contract to get there? Like, are we-

Vinod Khosla 4:27 Yes, I'll come back to that.

Jack Altman 4:29 Yeah.

Vinod Khosla 4:29 But what I wanna say is, somewhere starting in twenty thirty, the changes are gonna be so disruptive that it's hard to imagine how it sorts out. And it'll sort out differently by country, by region. Different governments will play different roles in allowing it to happen and not allowing it to happen. And so we'll see this very, very disruptive, almost dystopic type of AI is taking all the jobs kind of thing. But we will have enough productivity, enough goods and services produced, to share broadly.

Jack Altman 5:10 Is what you're saying that basically the changes that are already happen- happening will compound to a point where it'll now just be this big disruption? Or are you saying the tech by the year twenty thirty is then going to be so disruptive that it's gonna create all these changes? In other words, are we already on that trajectory, or you're just saying the tech's gonna get there in a way that will be that disruptive?

Vinod Khosla 5:31 What I'm saying is tech is disruptive in some areas.

Jack Altman 5:35 And it will be everywhere.

Vinod Khosla 5:36 Uh, and it'll be everywhere. But almost no corporation, uh, by twenty forty, these are Fortune five hundred companies I'm talking about, should run the way it's running, even remotely. I should say, most Fortune five hundred.

Jack Altman 5:54 Yeah.

Vinod Khosla 5:55 One of my predictions is the twenty-thirties-... we'll see a faster rate of demise of Fortune five hundred companies than we've ever seen. It's actually pretty high anyway, but we'll see a rate accelerate dramatically. So let me put it diff- differently. If you're a healthcare company, and I speak to a lot of healthcare company boards, you look at AI and say it's an opportunity, and we'll get more administrative efficiency or something like that. But if I said to you, which I've said to a couple of boards, "If all medical expertise is free, you have an unlimited number of primary care doctors, oncologists, gastroenterologists, mental health therapists, um, uh, you, you, you name it, how would you redesign the healthcare system?

Jack Altman 6:48 Be crazy.

Vinod Khosla 6:49 Uh, that transition won't happen from existing companies. Almost somebody new will reinvent this. Now, there's the issue of regulation. The American Medical Association doesn't like the idea.

Jack Altman 7:03 I was gonna say, there'll be a lot of people fighting against this-

Vinod Khosla 7:05 Yeah

Jack Altman 7:06 ... who have a lot of power, who will be good at fighting it for at least some amount of time.

Vinod Khosla 7:09 For some amount of time.

Jack Altman 7:10 Yeah.

Vinod Khosla 7:11 But fortunately, we have a small part of our healthcare system, very small part, uh, where payments are capitated, what's called a capitated system or Medicare Advantage, where you get paid a fixed amount to take care of a patient, roughly.

Jack Altman 7:26 Yeah.

Vinod Khosla 7:27 That world will be so much more effective because they won't care about reducing costs, which AI can do.

Jack Altman 7:36 Mm-hmm.

Vinod Khosla 7:37 Reducing costs for a hospital system is reducing their revenue.

Jack Altman 7:40 Of course.

Vinod Khosla 7:41 For a physician, reducing costs is cutting their c- cost down. Now, I, I think that the general model, I think, for next five years, when I talked about productivity improvements, uh, you will see, uh, almost every professional start to get interns working for you.

Jack Altman 8:04 Mm-hmm.

Vinod Khosla 8:05 So every MD, a practicing physician, will get five fresh MDs as if they are fresh out of Stanford Medical School, that work for him. It'll increase his productivity, maybe provide a higher level of service to their patients, all that. But that then turns into something much more catastrophic over time. So by and large, the next five years, I think we should assume that every-- all professionals start to get interns working for them who can-- who are trained in their profession, whether you're a structural engineer or a salesperson, who work for you. Mm, good, nice interns, behave well. Uh, but at some point, these interns grow up. They will have way more expertise-

Jack Altman 8:56 Yeah

Vinod Khosla 8:56 ... than the physician, and then it's hard to roll this clock back.

Jack Altman 9:00 It's gonna go fast, too.

Vinod Khosla 9:02 It is-- It'll go fast, except in some areas where there's regulatory or other constraint. Take the example of the Screen Actors Guild last year. Anybody who signed up for the Screen Actors Guild thing will go out, out of business, but that change will be slower. Outside that system, people will be producing movies for, uh, a hundred thousand dollars, not a hundred million dollars.

Jack Altman 9:30 Yeah, right.

Vinod Khosla 9:33 The dynamics will be different by sector.

Jack Altman 9:35 If this does play out even directionally, the way you're saying, and now it's twenty forty, what do you think is left for people to be doing? Like, there must be some things le-- Like, are people going to be still all employed or employable via creating their own businesses and pointing AI around, or, you know, we have a lot of two-person billion-dollar companies. Does it go that way, or does it actually just go to, like, a lot of people are just gonna consume a lot of leisure, and that's it?

Vinod Khosla 10:08 I'm, I'm waiting for the first entrepreneur to call me and say, "We can build a billion-dollar revenue company with ten employees." You can definitely do it with a hundred employees.

Jack Altman 10:18 Yeah.

Vinod Khosla 10:19 Uh, we haven't gotten there yet, but we will. That company's already been started.

Jack Altman 10:23 Yeah.

Vinod Khosla 10:24 And somebody will leverage it tenfold again.

Jack Altman 10:26 Yep.

Vinod Khosla 10:27 There's a question of: Will there be jobs that need people? If you have a billion bipedal robots by twen-- in the twenty forty timeframe, could be five years later, could be five years earlier, but let's say that that was one of my dozen predictions I made when I spoke at TED last year. Almost certainly, they're doing more work than human beings do labor today.

Jack Altman 10:55 Yeah.

Vinod Khosla 10:56 And, and-

Jack Altman 10:56 And they'll be smarter-

Vinod Khosla 10:57 And-

Jack Altman 10:57 ... and they won't sleep. They'll never complain.

Vinod Khosla 11:00 And you won't have silly notions like a primary care doctor and oncologist.

Jack Altman 11:05 Right. The same robot-

Vinod Khosla 11:06 It's-

Jack Altman 11:06 ... that, like, cleans your house is also your doctor.

Vinod Khosla 11:08 Yeah.

Jack Altman 11:09 Yeah.

Vinod Khosla 11:09 It's this super intelligence idea. I think people will have lots to do, but it won't be because they need to work for a living. Look, the first thing people forget, most of the jobs in this country or on this planet are not really jobs. There's what I call servitude.

Jack Altman 11:31 Hmm.

Vinod Khosla 11:31 If you're a farm worker working for eight hours a day picking lettuce, and you do that for forty years, or you're an assembly line worker at GM, mount- mounting a tire on a car for eight hours a day for forty years...

Jack Altman 11:47 Yeah.

Vinod Khosla 11:49 I, I, those aren't jobs. They are servitude because you have to survive.

Jack Altman 11:56 And what a great thing if we could give those people their lives back-

Vinod Khosla 11:59 Yeah

Jack Altman 11:59 ... and the time, those hours of their lives back.

Vinod Khosla 12:01 What will people do?... humans will be humans. They'll still compete. We love sports.

Jack Altman 12:06 Mm-hmm.

Vinod Khosla 12:07 We love entertainment. We love, uh, being great at something. Whether you're-- even a mediocre artist loves painting for themselves, not because it can be recognized by a New York auction house, art auction house. Uh, so people will excel in what they do, you know, explorers, skiing, you name it. Um, I love the idea people will have a lot more time to talk, uh, care about their children.

Jack Altman 12:38 Yep.

Vinod Khosla 12:39 Actually not be frustrated because children are a conflict with work requirements or career requirements-

Jack Altman 12:46 Mm-hmm.

Vinod Khosla 12:47 -working a lot more with their elders, parents. Um, so there is going to be a lot to do.

Jack Altman 12:54 What's your confidence level that this is the future?

Vinod Khosla 12:58 High.

Jack Altman 12:59 Eighty percent?

Vinod Khosla 13:00 Higher. I have very high confidence this world happens. Uh, I think greater than fifty percent that it happens by twenty fifty. The timing is hard to predict.

Jack Altman 13:13 Yeah, but, like, you're a hundred percent sure that it happens before, like, twenty two hundred?

Vinod Khosla 13:17 Oh, no question about it. Yeah.

Jack Altman 13:19 So-

Vinod Khosla 13:19 I, I'd be shocked if it didn't happen by twenty sixty, where we live in a world of abundance. Uh, nobody has to prove they can buy a more expensive car than somebody else. Uh, that part, it may still be there. Humans like competing, including [chuckles] ego, but I do think something fundamental will change. A five-year-old kid going to kindergarten today is being told by their parents, "Go to school, study hard, get into a good college, and then you'll get a good job." That won't be the paradigm.

Jack Altman 13:53 So my kid, my oldest kid's five, and then I have two other younger ones. If you're me, like, what are you thinking right now in terms of, like, what's important for, like, m- little kids right now? 'Cause-

Vinod Khosla 14:05 Curiosity. For me, when I'm in a position where I can do anything I want, I could go play golf, which I don't love, or go sailing, or you pick your favorite. I'm mostly driven by curiosity. You know, I wanna learn new things, so anytime I can learn something, I'll take a meeting. Um, and I'm fortunate people will teach me, but in the future, you won't need somebody to be willing to teach you. It'll happen. For me, it's that. For others, it'll be producing the best music they can relative to their own bar.

Jack Altman 14:45 Hmm.

Vinod Khosla 14:45 Not-- And, and clearly, people will still wanna be like Taylor Swift and- Mm-hmm.

Jack Altman 14:51 Will there be, like, the last person... One place my head was going was somebody still has to build the AI, build the robots, program everything. Will we get to the last person who needed to do that at some point, and then that's actually, even that job goes away?

Vinod Khosla 15:07 First, high degree of uncertainty with respect to the configuration of what people are doing. I don't believe it, they'll be working forty hours a week for meaning in their life-

Jack Altman 15:24 Yeah

Vinod Khosla 15:25 ... unless it's something they really wanna do, independent of earning a living. Okay, so that we should be clear, and I just recently gave a talk last month on AI dystopia or utopia.

Jack Altman 15:37 Mm-hmm.

Vinod Khosla 15:38 And I, by the way, cover all the dystopian scenarios in it first-

Jack Altman 15:42 Oh, God

Vinod Khosla 15:43 ... before I get to the utopian scenarios. And so it's on our website, um, and it's on the internet, so you can-- anybody can find it. What's very clear to me is the dystopian views will be a choice society makes. The utopian view is going to happen anyway. The world of abundance, only a matter of when, not if, and within our lifetimes.

Jack Altman 16:11 It's amazing.

Vinod Khosla 16:11 And when I say my lifetime, I at least look at twenty-five years. I'm seventy. [chuckles]

Jack Altman 16:18 Easy.

Vinod Khosla 16:18 Clearly.

Jack Altman 16:19 More.

Jack Altman 16:20 When you're talking about this dystopia, I think what was implied in what you just said was sort of a, a self-inflicted dystopia, where we just, you know, humans d- don't decide to organize correctly to take advantage of this amazing abundance.

Vinod Khosla 16:32 Absolutely.

Jack Altman 16:33 Do you worry at all about, like, the AI doomerism version of dystopia at all, where, like, the AI goes awry? Is that something you think about at all?

Vinod Khosla 16:42 Yeah, so l- let me answer the question in two parts. Certain societies will choose not to do it. We saw it with the Screen Actors Guild. They essentially signed existing traditional studios up to a paradigm that makes them order of magnitude less effective in content generation, because we are building an AI videographer in our portfolio. You specify-- You don't just generate video, you specify what the lighting angle is and what the, how you, um, pan and zoom the camera, and those kinds of things.

Jack Altman 17:20 Mm-hmm.

Vinod Khosla 17:21 So the people who resort to traditional means will not do well. Uh, people who do do movie production, today we can't do a full movie that way, but that's only a matter of time. They're right, only a matter of time.

Jack Altman 17:37 Yeah.

Vinod Khosla 17:37 Hmm. Today, almost all commercials can be done by an AI.

Jack Altman 17:44 Yeah, and the example you gave of, you know, reproducing a one hundred million dollar budget thing with a hundred thousand, of course, that does-- you know, of course, that's gonna go that way.

Vinod Khosla 17:52 And, and we know Coca-Cola got a lot of flak last summer, uh, last Christmas, because they produced some commercials with only with AI.

Jack Altman 18:01 Hmm.

Vinod Khosla 18:01 And people were nitpicking anomalies and stuff. Most people didn't know it was done by an AI, uh, and they did great.... and, uh, uh, I'm glad they did it. Broke the ice.

Jack Altman 18:14 Mm-hmm.

Vinod Khosla 18:15 So there will be a flood of that. So there, there's that version of dystopia, displacement. Disruption's always fun for the disruptor, very, [chuckles]

Jack Altman 18:28 [chuckles]

Vinod Khosla 18:29 not fun for the disrupted.

Jack Altman 18:31 Yep.

Vinod Khosla 18:32 And so one has to keep that in mind. We have to take care of people who are disrupted in this paradigm. The other end is sentient AI that kills us all.

Jack Altman 18:45 Exactly.

Vinod Khosla 18:45 I wouldn't say I don't worry about it. I do worry about it. Uh, but I look at it as a complete basket of risks humanity faces. We've gone through an, uh, uh, era where a pla-- asteroid hit planet Earth, and most life was destroyed. So we know that was a risk, and risks still exist. An asteroid could hit the planet. More likely, a much worse epidemic than a pandemic than COVID.

Jack Altman 19:19 Yeah.

Vinod Khosla 19:20 Uh, you know, COVID only killed seven million people. It's possible it could kill seven hundred million people.

Jack Altman 19:26 Totally.

Vinod Khosla 19:26 Right? Uh, in fact, I would say that's almost, um, likely. Uh, so there's a whole basket of risk. Do I worry about sentient AI killing everybody on the planet? Yes, but more than I worry about President Xi doing nasty things? No.

Jack Altman 19:48 Yep.

Vinod Khosla 19:48 So when it comes to AI, I want us to have, the Western world, to have the best AI so that we are not subject to President Xi or President Putin. Uh, that is by far the greatest risk.

Jack Altman 20:05 That makes total sense.

Vinod Khosla 20:06 And this is what the people who call to slow down AI research miss. Putin isn't slowing down, not that he's very good at it, but Xi and China definitely can do this. You know, it's a world in which the-- and, and you can't argue with that. Uh, they sort of say the end justifies the means.

Jack Altman 20:28 Yeah.

Vinod Khosla 20:29 We in the Western world care more about the means.

Jack Altman 20:32 Marc Andreessen made this point on the podcast, too, which was basically the-- so much of culture and production is going to live in how the AI is, you know, programmed. And if, if it's our doctors and our teachers and our lawyers and everything like that, you really want it to be...

Vinod Khosla 20:49 Well, we've seen it with TikTok.

Jack Altman 20:51 We did.

Vinod Khosla 20:52 Right? If you're on TikTok, you're more likely to be China-inclined, favorably inclined towards China. That's culture. [chuckles] Uh, and President Xi had said in one of his speeches not very long ago, "The next battle will be fought on the internet, and it'll be a battle for people's minds."

Jack Altman 21:15 Hmm.

Vinod Khosla 21:16 He was clearly thinking TikTok. So there is, you know, dystopic AI killing humans and all that, or AI in warfare, you know, weapons-

Jack Altman 21:28 Yeah

Vinod Khosla 21:29 ... and robot soldiers and all that.

Jack Altman 21:31 That seems very important, too.

Vinod Khosla 21:32 Yeah, that's very, very important. But it's even more important that we win the race to have social influence. If I'm giving all the entertainment, uh, to the rest of the world, if I'm giving all the free doctors, if I'm giving all the few tutors, my philosophy, political philosophy prevails. So I do think by twenty forty, the biggest risk we might face that I worry about is China using both g-good AI, cyber AI, warfare AI, but also socially good AI, like free doctors, to everybody on the planet-

Jack Altman 22:14 Mm-hmm

Vinod Khosla 22:15 ... and to embed their political philosophy.

Jack Altman 22:18 Yep.

Vinod Khosla 22:19 Uh, I think that's a real d-- it's probably the single biggest thing I worry about.

Jack Altman 22:25 In some ways, it seems like politics, both sort of the way we think about it normally, but also just sort of broadly socially, is gonna get even more important than it is right now, over time.

Vinod Khosla 22:35 Yeah. Look, we live in a capitalist system, but people forget, capitalism is mostly by permission of democracy-

Jack Altman 22:42 Yes

Vinod Khosla 22:42 ... in our system. If democracy sustains, um, I, I, I think we will adjust easier. Now, China has the advantage of using what I call Tiananmen Square techniques-

Jack Altman 22:59 Hmm

Vinod Khosla 23:01 ... uh, to enforce whatever they want. Um, so it, it's going to be an interesting fifteen years. Um, and, you know, it's going to be interesting but also critically important fifteen years to what philosophy starts to dominate the planet.

Jack Altman 23:18 I want to spend most of our time continuing to talk about the future, but I have one historical event I want to ask you about. The tee-up to this question is going to sound like, you know, just an opportunity to, you know, talk about being a great investor. But I specifically want to ask you about your OpenAI investment, and, um, the angle I want to ask you about it from is to try to figure out what, if anything, we can learn from how you did that, um, and how you decided to do it. I know that you were sort of like the first, you know, venture investor to, to do it, and you did it in real size, in something that probably at the time, a lot of people didn't want to do, maybe thought it was a science project. There was a lot of lack of clarity on the whole thing. Um, I think that, like, you know, now it's, you know, it is what it is, but at the time, it was probably an extremely hard bet to make. And so what I was hoping was to try to, as much as possible, play back the tape inside your brain to see what we can learn.

Vinod Khosla 24:12 ... so it was a very large investment, more than twice the largest invest- initial investment I'd made in forty years of venture capital.

Jack Altman 24:22 Wow!

Vinod Khosla 24:22 So it was a conviction bet. Uh, but I want to go back to, uh, a different era and talk about this idea of people like to be in herds. When the herd mentality was crypto and a couple of other areas. And by the way, I've ne- never called myself an investor, uh, in forty years, always say I'm a venture assistant, helping entrepreneurs. [chuckles]

Jack Altman 24:50 That's better.

Vinod Khosla 24:50 Uh, it's a much better mental model for me. Uh, not-- the investing is a side effect, so I can keep doing it. I'll give you another example that relates to this. While people follow herd instinct, I like to think about what are the fundamentals and can they happen? Fundamentals don't always happen, but they can. And in nineteen ninety-six, I invested, uh, I started a company, uh, called Juniper. We worked on a business plan in my office for six months with the founder, Pradeep Sindhu. Why? Because the world was saying the internet would be a protocol called ATM, Asynchronous Transfer Mode. So every major company had given up on TCP/IP for the public internet and were only going to use ATM because the telcos were specifying ATM.

Jack Altman 25:49 Hmm.

Vinod Khosla 25:49 I talked to the senior management of almost every telco, and every single one said to me they wouldn't use TCP/IP. I talked to the CTO of Cisco, who said they have no plans to ever do TCP/IP above, uh, one hundred and fifty-five megabits, which is my home service.

Jack Altman 26:11 Hmm.

Vinod Khosla 26:12 Today, uh, it's far below my home service for a public router. But I looked at the data. TCP/IP usage had been climbing, and I said: "This will scale, and every expert is wrong in the field." And we should come back to that-

Jack Altman 26:31 Yeah.

Vinod Khosla 26:31 - if you remember, uh-

Jack Altman 26:32 Yeah

Vinod Khosla 26:32 ... this notion of experts.

Jack Altman 26:34 Hmm.

Vinod Khosla 26:35 A- and the data said TCP/IP was an exponential, and we were the knee of the-- near the knee of the curve. Uh, so fast-forward to today, and by the way, I'd invested in TCP/IP, and it was a core part of what Sun did in nineteen eighty-two, and this was fourteen years later. You see the exponential in TCP/IP as a communications medium, and, and we bet heavily.

Jack Altman 27:01 Mm-hmm.

Vinod Khosla 27:01 By the way, we made seven billion dollars on a three million dollar investment, when almost no venture investment ever made even a billion.

Jack Altman 27:11 That's crazy.

Vinod Khosla 27:12 Yeah, I-

Jack Altman 27:13 Sounds good.

Vinod Khosla 27:13 Twenty-five hundred extra money.

Jack Altman 27:15 Yeah, I'd like one of those.

Vinod Khosla 27:16 Uh, [chuckles]

Jack Altman 27:17 Yeah.

Vinod Khosla 27:17 Yeah. You only need one, but- [chuckles]

Jack Altman 27:19 Yeah.

Vinod Khosla 27:19 Hopefully, OpenAI for us will do better, to go back to your question.

Jack Altman 27:23 Yeah.

Vinod Khosla 27:23 But fast-forward, in the year two thousand, I gave an interview, which is in the New York Times, so it's on the record, that said: "AI will have us redefine what it means to be human."

Jack Altman 27:34 Mm-hmm.

Vinod Khosla 27:35 Which is this utopia thing we were just talking about. Will people need jobs? Um, that was twenty-- year two thousand or two thousand and one. Two thousand and twelve, I wrote two blogs. One was called "Do We Need Doctors?" Under the premise, AI will do all the doctoring expertise that we need.

Jack Altman 27:57 This is twenty twelve?

Vinod Khosla 27:58 Twenty twelve. It's in TechCrunch; you can look up. And the second was called, "Do We Need Teachers?" Idea that all tutoring will be done by an AI, too. So those were twenty twelve.

Jack Altman 28:09 What gave you confidence at that point that that was c- gonna happen? Because this was before the breakthroughs with transform--

Vinod Khosla 28:16 Yeah.

Jack Altman 28:16 Way before all that stuff.

Vinod Khosla 28:17 So, uh, and, and this is where I, I was getting to. What I looked at was the best talent was going into AI. You went to MIT or Stanford or Caltech or wherever, people wanted to work on AI. Toronto, of course, um, a pretty important place in this history. Um, best talent was going. In twenty sixteen, I gave a talk at the National Bureau of Economic Research. I should probably release those slides. My first slide was the top twenty, uh, occupations in the US by a number of people, and I said, "I can't see which ones of these can't be displaced."

Jack Altman 28:59 Hmm.

Vinod Khosla 29:00 Now, this was to a bunch of economists. That was twenty sixteen. I was convinced, but in that talk, I had human performance and current AI performance, and most people were making fun of AI because you're telling-- uh, ask an eighty-three-year-old man if they were pregnant. It made silly mistakes. I looked at the rate of progress and the rate of talent influx. Those two things convinced me the moment for AI was soon. Uh, this was twenty sixteen. Um, so by twenty eighteen, when Elon backed off, uh, funding OpenAI, he'd committed a lot of money that he didn't meet his commitments for. And when Sam called me, I looked at that and said: "We have the right team." Uh, I was very worried about China.

Jack Altman 29:57 Mm-hmm.

Vinod Khosla 29:57 I thought there was only two other teams. One was inside Google-

Jack Altman 30:01 Mm-hmm

Vinod Khosla 30:01 ... which was moving very slowly, and another in Baidu, which was stealing Google's people by setting up an office down the hill-

Jack Altman 30:07 Yeah

Vinod Khosla 30:08 ... and stealing their expertise. I'm very hawkish on China. Um, and OpenAI needed to exist as a separate vector of AI progress.... and it had the right team, with Sam running it, when Sam called me, it was almost a no-brainer.

Jack Altman 30:24 'Cause you were such a prepared mind for this by that time?

Vinod Khosla 30:28 Yeah. Yeah. I was convinced the impact would, would be large.

Jack Altman 30:34 Mm-hmm.

Vinod Khosla 30:34 Now, I had no idea when there would be breakthroughs. Obviously, I couldn't predict transformer models, even though the paper was out, was gonna be that large an impact. In fact, transformers wasn't what OpenAI was working on, so I wasn't, "This, this technique works." It was more like talent and the rate of progress, and I actually thought it'd be multiple techniques. I remember talking to Sam as, "I have a Lego block model. The more different types of Lego blocks you do, the more the combinatorial possibilities explode." I think it was following the data and not the herd.

Jack Altman 31:16 So was there a couple-year period where you were basically very primed, that you were just waiting for the right team at some point? Like, it seems like between twenty sixteen and twenty eighteen, you probably believed this pitch from just, you just needed the right team.

Vinod Khosla 31:31 Well, I, I was convinced of the following: AI would have a huge impact because the rate of progress I was seeing on these benchmarks against human performance, even though they were way down there in almost silly performance, but the rate of change was high, and the rate of talent in flux was high.

Jack Altman 31:51 Mm-hmm.

Vinod Khosla 31:51 Elon backing off funding OpenAI was [chuckles] fortunate. I, I can't say I engineered it.

Jack Altman 31:58 Yeah.

Vinod Khosla 31:58 I wish I had.

Jack Altman 31:59 Yeah.

Vinod Khosla 32:00 Um, but it is following the data and not the herd instinct.

Jack Altman 32:04 Yeah.

Vinod Khosla 32:05 And frankly, twenty eighteen, when we made the decision, it closed in early twenty nineteen, uh, everybody thought AI was not a real thing.

Jack Altman 32:16 People thought it was a science project at the time.

Vinod Khosla 32:17 It was a science project. OpenAI was not using transformer models. It was just my belief, you put the right resources, and they'll figure it out. I told my partner, "I've no idea whether it happens in three years-

Jack Altman 32:32 Mm-hmm

Vinod Khosla 32:32 ... or ten years, but the IRR would work out." "It was too important to not try," was the phrase I used.

Jack Altman 32:40 Yeah.

Vinod Khosla 32:41 Some things are too important to not try, and I often try those. At the same time, we invest in fusion at Commonwealth Fusion. Again, started it from practically star-- scratch, uh, because Bob was a senior fellow at the MIT Fusion Lab. This idea that some things in society are too important to not try, and I'd rather try and fail than fail to try, and most people, most of the time, just fail to try. And so this combination of factors and knowing AI would have a large impact once we got it, uh, was what got me convinced.

Jack Altman 33:20 Okay,

Jack Altman 33:21 so that's the perfect setup into now looking to the future. That construction got you to a big bet in AI. What are the other areas right now that you feel maybe like, you know, the same way you felt in twenty fifteen about AI? What do you feel that way about now? You mentioned fusion, but, like, what are a few of the areas that you feel this way about the future now?

Vinod Khosla 33:43 Well, first, related to AI, robotics will take a little longer, but I think we'll have the ChatGPT moment in the next two to three years.

Jack Altman 33:53 What could that look like?

Vinod Khosla 33:54 A robot that doesn't need to be programmed. It learns. It isn't programmed to do tasks.

Jack Altman 34:00 And it, and it's a generalized, you know, maybe physical robot in our-

Vinod Khosla 34:03 Yeah

Jack Altman 34:04 ... in our spaces.

Vinod Khosla 34:04 Well, the world is organized around the humanoid form factor.

Jack Altman 34:07 Mm-hmm.

Vinod Khosla 34:08 And so it's probably a humanoid. Humanoid is the only common enough form factor to get to high enough manufacturing volumes to get the cost down. Almost everybody in the twenty-thirties will have a humanoid robot at home. Probably start with something narrow, like do your cooking for you. It can chop vegetables, cook food, clean dishes, but stays within the kitchen environment. And, you know, your-- if you have a Prius, it costs three, four hundred dollars a month. The robot will cost three, four hundred thou..., uh, three, four hundred dollars a month. It won't matter in, you know, for anybody making more than a certain amount of money, they already have somebody helping, and so this is help.

Jack Altman 34:53 Yeah.

Vinod Khosla 34:54 I think that's how it'll start in the home, but factories, farms, uh, farm workers, is a massive area that's mostly unaddressed.

Jack Altman 35:05 What part of the humanoid intelligent robot are we most limited on right now? Like, is it about the robotics? Is it, like, the intelligence? Is it-

Vinod Khosla 35:12 It's the intelligence. Clearly, we've seen out of China many, many hardware form factors. They're pretty damn amazing. If you see them boxing or running a race or... It's pretty cool, but they're not learning robots. You change the environment, and they don't do as well.

Jack Altman 35:34 Yeah.

Vinod Khosla 35:35 I think this intelligence that learns and adapts, uh, and doesn't need to be programmed to do a task... You know, if you walk a human in here and say, "Clean up," they'll know what to do. Uh, a robot needs to do that.

Jack Altman 35:51 Why is this not gonna be like Apple? Like, and I know that, like, you know, I'm not saying I think it is, but, like, why do you think that we don't already have the sort of prototypes of this out from the biggest, most well-equipped hardware companies in the world?

Vinod Khosla 36:05 So I've been doing innovation for forty years, and innovation only. I can't think of very many large examples that were large innovation-... came from somebody who was large or in the business.

Jack Altman 36:24 Yeah. Can you, can we go through some of them?

Vinod Khosla 36:26 Yeah. Uh, retailing, you know, when we invested in Amazon, I was at Kleiner in '96. Uh, n- nobody thought you could compete with Walmart. You'd think Walmart would innovate.

Jack Altman 36:39 Yeah.

Vinod Khosla 36:40 Look at media. Was it NBC or CBS, or was it little things like Netflix and Twitter and YouTube and Facebook? And nobody even knew they were in the media business.

Jack Altman 36:53 Mm-hmm.

Vinod Khosla 36:54 Uber, did that come from Hertz or Avis car rental or taxi companies? No. Airbnb, did it come from Hilton or Hyatt?

Jack Altman 37:05 Yep.

Vinod Khosla 37:05 They have more rooms than Hilton and Hyatt now. Uh, SpaceX or Rocket Lab instead of Boeing and Lockheed, you'd expect to be able to do space launches?

Jack Altman 37:16 Yeah, yeah.

Vinod Khosla 37:17 Uh, m- you know, my own history, I got enamored with the fact that when, when I was at Kleiner, th- they talked about Genentech, started by an associate at Kleiner when nobody believed biotechnology was a field. No pharma company was doing it-

Jack Altman 37:34 Yeah

Vinod Khosla 37:35 ... all the biotech.

Jack Altman 37:36 Yeah.

Vinod Khosla 37:36 We saw the cloud. We saw self-driving electric cars. Yeah, everybody had given up-

Jack Altman 37:42 Right

Vinod Khosla 37:42 ... on it.

Jack Altman 37:43 How about cloud, actually? 'Cause that was Amazon, so you could-

Vinod Khosla 37:46 Yeah

Jack Altman 37:46 ... kind of give them... Yeah.

Vinod Khosla 37:47 Uh, cloud is interesting. I think f- uh, I should say founder-driven companies-

Jack Altman 37:53 Mm

Vinod Khosla 37:54 ... have permission to try try crazy things, and-

Jack Altman 37:57 Like s- like, uh, Apple, when Steve was there with the iPhone.

Vinod Khosla 37:59 Yeah, with Steve. When Steve was there, they tried the iPhone.

Jack Altman 38:02 Yeah.

Vinod Khosla 38:03 And if you go back to the press in two thousand and seven, everybody said, "A phone at six hundred or seven hundred dollars?"

Jack Altman 38:10 Mm-hmm.

Vinod Khosla 38:10 "That has no keyboard to dial?"

Jack Altman 38:12 Right.

Vinod Khosla 38:13 Like, what a silly idea!

Jack Altman 38:14 Yeah.

Vinod Khosla 38:15 Right? So it's founder-led companies that innovate. They're way more clear. Self-driving would be fifteen years away if Larry and Sergey hadn't said, "We're going to do self-driving at Google."

Jack Altman 38:28 Yep.

Vinod Khosla 38:29 Or Elon had said, "Well, I'll do electric vehicles."

Jack Altman 38:32 Yeah.

Vinod Khosla 38:32 Right? So-

Jack Altman 38:33 So basically, Tesla should be much more likely on humanoids than Apple, for example.

Vinod Khosla 38:38 It is founder driven, and Elon is paying attention to it, so they're definitely a good candidate, but so are a number of other companies that I have-

Jack Altman 38:47 Definitely

Vinod Khosla 38:48 ... a lot of faith in the startup ecosystem of founders with very creative ideas.

Jack Altman 38:54 Yeah. So-

Vinod Khosla 38:55 And that's an area worth delving into in a separate podcast-

Jack Altman 38:58 Yeah

Vinod Khosla 38:58 ... on how-- But, but that's an example of large innovation. So no matter where I look, so the cloud definitely-

Jack Altman 39:08 Yeah

Vinod Khosla 39:08 ... happened. You know, when we, when I was starting Sun, everybody said there's these DEC VAX computers and IBM mainframes, and why don't you build a graphics terminal for them? I said, "No, I'd rather just replace those companies." Neither of those companies, uh, are in the computer business anymore. And frankly, it took five years to get DEC out of the computer business into mostly a customer support business after we started-

Jack Altman 39:36 Yeah

Vinod Khosla 39:36 ... which was pretty stunning to me as a twenty-some-year-old kid.

Jack Altman 39:40 Totally.

Vinod Khosla 39:41 So repeating that pattern, right? There's zero chance a company like Siemens or GE could do fusion.

Jack Altman 39:52 Right.

Vinod Khosla 39:52 Zero

Vinod Khosla 39:53 chance.

Jack Altman 39:54 What's the mechanic for what-- I, of course, agree, but what, what's the mechanic that's stopping them? Is it risk? Is it talent?

Vinod Khosla 39:59 Here's the f- uh, first thing I would say. In these forty years, in all the examples I've just cited for you, and I could give you more, none of them were done by somebody who knew the area.

Jack Altman 40:11 Mm-hmm.

Vinod Khosla 40:12 Experts are terrible at predicting the future. They extrapolate the past. Entrepreneurs invent the future they want. Uh, it's a bastardization of an Alan Kay quote, but, you know, so you imagine the world, and you try and make it happen. And you're not biased by... What is experience? Experience is a set of biases that prevent you from making mistakes, and that's what experts do, and that's why very rarely do experts innovate in their area.

Jack Altman 40:50 Yeah.

Vinod Khosla 40:50 Look, even the Covid vaccine came from two startups.

Jack Altman 40:53 Right.

Vinod Khosla 40:53 Moderna and, mm, the BioNtech. You'd think the pharma was well-equipped to mobilize. Not a chance. So, uh, you know, it's, it's, it's, uh, it's why the US has done so well. People have permission to try. And if you try and fail, it's-- you don't ruin your career. In a big company, you'll ruin your career-

Jack Altman 41:19 Right

Vinod Khosla 41:19 ... to your question, right? You s- you can't afford to fail.

Jack Altman 41:24 Yeah.

Vinod Khosla 41:24 So you start with, "I can't fail," which means you can't take a large risk. My view is very simple: Most people reduce risk to increase the probability of success.

Jack Altman 41:36 Mm-hmm.

Vinod Khosla 41:37 I do the pos- opposite. Start with, "I want high consequences of success. I don't care about the probability of failure."

Jack Altman 41:43 I think that is, like, one of the best things about tech as an ecosystem is, and, you know, I think not everybody thinks quite like what you're saying, but in general, in tech, you can fail, and it's okay.

Vinod Khosla 41:53 Yeah.

Jack Altman 41:54 And I think even in other ind-- you know, I worked in finance in New York for a hot minute, and even there, it's just, like, it's just not how it works.

Vinod Khosla 42:00 Jack Dorsey's great, uh, on paper, but when we invested in Square in twenty ten, the following was the situation: He'd just been fired from Twitter. Twitter was a tiny company. He'd just been fired, and he had, like, four start-- failed startups, uh, his history on Wikipedia. Like, he had four failed startups. So, uh, you know?

Jack Altman 42:25 Yeah.

Vinod Khosla 42:25 Traditional wisdom would say, "Don't back him."

Jack Altman 42:29 Was your mindset around risk always just increase the consequence of success, or did that evolve over time?

Vinod Khosla 42:35 It was very much that from... You know, my first startup was-... go on, take on the computer business. Everybody big is dumb.

Jack Altman 42:43 Mm-hmm.

Vinod Khosla 42:44 Uh, which is a little bit of an arrogant viewpoint, but if we hadn't had that kind of hubris, we probably wouldn't have attempted what we attempted. So I think hubris is an important ingredient of great entrepreneurship.

Jack Altman 43:02 Yes.

Vinod Khosla 43:03 We'll build an AGI, right? Like, that's hubris. It's arrogance. Only I can do it. Uh, so the- these are entrepreneurial characteristics that are very important, but also thinking from first principles, which is why experts do poorly in their areas, because they have too many biases of what works and what doesn't, or how to do things. While somebody new in the area reinvents the area, they figure it out from first principles in the new environment, and that's an essential characteristic. So, you know, one thing is I always get asked is: "What do you look for in entrepreneurs?" You know, I seldom look for deep expertise in their area. I do look for people who are thinking from first principles and learning rapidly. Even in YC batch, if I'm talking to a YC partner about some startup, the question that's most important to me is: how much have they changed their plan over the last three months?

Jack Altman 44:08 Yeah.

Vinod Khosla 44:08 Rapid evolution, rapid thinking, rapid learning, uh, is

Vinod Khosla 44:14 what matters.

Jack Altman 44:15 So this went into a-

Vinod Khosla 44:16 I'm all over the map. [chuckles]

Jack Altman 44:17 No, it was-- This is... I, I love this, Eddie, but I want to keep getting sort of the other areas you're very excited about. Um, that was robotics, um, which I agree, humongous if, pr- you know, in some ways, that's like, that's like the final, you know, thing to figure out. Um, you mentioned fusion as a big thing.

Vinod Khosla 44:34 Yeah, I'm very bullish about energy.

Jack Altman 44:36 Well, certain many formats of energy.

Vinod Khosla 44:38 So, uh, I, I think there's two large formats. Fusion is one, and there's multiple approa- uh, uh, approaches to fusion, but, uh, I'm also s- very excited about super hot geothermal. Um, so again, this ties to this risk idea, right? In geothermal, completely uneconomic business. You buy power because it's green, not because it's cheap.

Jack Altman 45:08 Mm-hmm.

Vinod Khosla 45:08 And people like cheap stuff.

Jack Altman 45:10 Yep.

Vinod Khosla 45:10 Turns out, e- almost all geothermal in the US is at two hundred degrees or two hundred and fifty degrees max. If you increase the temperature to four hundred and fifty degrees, you get ten times the-- six to ten times the power, depending upon m- conditions, from the same well.

Jack Altman 45:28 That's surprising.

Vinod Khosla 45:29 For two reasons. One is Carnot efficiency goes up, but the heat content also goes up. So the energy content of the steam goes up and the efficiency percentage, so you get a multiplier effect.

Jack Altman 45:41 Oh.

Vinod Khosla 45:41 Um, don't need to get into technical details, but now it's cheaper than natural gas if you can get to four hundred and fifty degrees.

Jack Altman 45:50 Wow.

Vinod Khosla 45:50 Nobody has to worry about super hot geothermal is green. It's, it's just cheap.

Jack Altman 45:56 Wow.

Vinod Khosla 45:56 Right? And so, uh, why don't people attempt it? Because people have decided you can't drill at four hundred and fifty degrees because drill bits collapse.

Jack Altman 46:06 Got it.

Vinod Khosla 46:07 Um, so I sort of approached it differently. I said, "What would it take to drill at four hundred and fifty degrees?" Right? The-- If I can solve that problem, everything else takes care of it. And we know there's four hundred and fifty degrees the most parts of the Earth. It's only a matter of how deep you go.

Jack Altman 46:25 Mm-hmm.

Vinod Khosla 46:27 And so I set off on that problem. I think we are making great progress, so I think it's as powerful as fusion-

Jack Altman 46:34 Wow

Vinod Khosla 46:34 ... in supplying most of Western United States.

Jack Altman 46:37 Yeah.

Vinod Khosla 46:37 Uh, is, uh, you can get that. Uh, our location in Oregon, one location could produce seven gigawatts of power, and I hope this year I can prove we can, mm, do all seven gigawatts competitive with natural gas-

Jack Altman 46:54 Wow

Vinod Khosla 46:55 ... without worrying. It works in the Trump era, where he doesn't care, believe in climate change. It still works, and I love that kind of project. I'm also very bullish Commonwealth Fusion will do well. I don't know enough about Sam's project, uh, in Helion, but I'm glad diverse techniques are being allowed.

Jack Altman 47:14 But both of these are areas where you're like, "The science is gonna work, the impact will be enormous."

Vinod Khosla 47:18 Yep.

Jack Altman 47:19 Yeah.

Vinod Khosla 47:19 It's worth doing.

Jack Altman 47:20 Solar also, is that on your radar?

Vinod Khosla 47:22 We are doing solar. We probably have in the Western world, that China has some great solar technologies. The next generation of solar called perovskite silicon, uh, perovskite-

Jack Altman 47:32 Hmm

Vinod Khosla 47:33 ... uh, solar cells. Um, we're working on that, but there, the impact isn't as large.

Jack Altman 47:39 Yeah. Right.

Vinod Khosla 47:40 Right? We are-- And, and that power is already so economic-

Jack Altman 47:45 Hmm

Vinod Khosla 47:45 ... that there's other uses for that power. So we are doing that. But, but look, I'm relatively optimistic. I see our path clear to getting to z- to zero emission by twenty fifty. Uh, I think most of the technologies do that will be proven in the early twenty thirties.

Jack Altman 48:09 Is there any sort of a countervailing force with the fact that we're gonna be consuming a lot more power via AI?

Vinod Khosla 48:16 People always ask me that. Uh, uh, I think if you get fusion right, I think very early twenty thirties, we'll get our first power plants.

Jack Altman 48:25 And that power curve runs-

Vinod Khosla 48:27 That power curve just catches up.

Jack Altman 48:29 Yeah.

Vinod Khosla 48:30 So there'll be this period between now and twenty thirty-five when these things aren't scalable yet.

Jack Altman 48:35 Yeah.

Vinod Khosla 48:36 But beyond that, I don't think-

Jack Altman 48:37 It should catch up.

Vinod Khosla 48:38 Yeah, we should-- Power will be cheap-

Jack Altman 48:40 Mm-hmm

Vinod Khosla 48:40 ... and plentiful and zero emissions, and zero resources.

Jack Altman 48:45 Hmm.

Vinod Khosla 48:46 And by the way, if you're creative enough-... You can do this in every area. Um, we are producing cement today, we are-- we not only don't say, like environmentalists do, "Let's go shut down, uh, cement plants," every time. There's one in Cupertino that the environmentalists have been trying to shut down.

Jack Altman 49:09 Hmm.

Vinod Khosla 49:10 My approach is very simple: They are emitting carbon dioxide, let's capture the carbon dioxide and turn it into carbonates. We get more cement out of the same amount of limestone mined at a lower cost per ton.

Jack Altman 49:25 Hmm.

Vinod Khosla 49:26 Now, what's there not to like? Do you have to care about climate to make that work? No! And, and we are in production on this now, so I'm, I'm sure cement is solved. Steel is the same way. I'm pretty certain we'll be able to produce steel with zero emissions, or low emissions, uh, initially, uh, at a lower cost or similar cost to today's, um, uh, steel. I'm pretty damn excited. I, I think this is, uh, mostly solved.

Jack Altman 50:03 Hmm.

Vinod Khosla 50:03 Uh, so, you know, climate is a very solvable problem-

Jack Altman 50:07 Yeah.

Vinod Khosla 50:08 -even without AI, and AI will only turbocharge climate.

Jack Altman 50:13 So that's energy, generally speaking, slash-

Vinod Khosla 50:16 Energy, resources-

Jack Altman 50:17 Yep.

Vinod Khosla 50:17 -steel, cement.

Jack Altman 50:18 Yep. Robotics, we got.

Vinod Khosla 50:20 Uh, robotics, we got.

Jack Altman 50:21 What else?

Vinod Khosla 50:22 Uh, well, I'm super excited. Uh, so I was mentioning this talk I did, uh, it's called Plausible Tomorrows, so you can Google that, too. Um, I have a dozen predictions that look really implausible, unless somebody sits down with me, and I walk them through each, and they say, "I see no reason this won't happen."

Jack Altman 50:44 Hmm.

Vinod Khosla 50:45 I think by twenty fifty, we can replace most cars in most cities.

Jack Altman 50:49 Self-driving or just don't have cars?

Vinod Khosla 50:51 Public transit that meets the following requirements: It's always cheaper than cars and cheaper than today's public transit.

Jack Altman 50:59 Hmm.

Vinod Khosla 51:00 Cheaper than today's public transit, without losses for the transit agency. That's always faster than public transit, because it's like Uber, it's hailed, not scheduled. Uh, it's all personal.

Jack Altman 51:16 Yeah.

Vinod Khosla 51:16 It's two- and four-person vehicles, not... And it fits in a bicycle lane.

Jack Altman 51:21 Wow!

Vinod Khosla 51:22 Not only-- By the way, public transit, Fusion, OpenAI, I invested in the same timeframe, roughly.

Jack Altman 51:30 Yeah, yeah.

Vinod Khosla 51:31 Around twenty eighteen.

Jack Altman 51:32 Hmm.

Vinod Khosla 51:32 So I'm very proud of that vintage year.

Jack Altman 51:34 That's a good, that's a good year.

Vinod Khosla 51:36 But people said, "Public transit start-up? You must be totally crazy."

Jack Altman 51:40 Hmm.

Vinod Khosla 51:41 And I said, "Google doing Waymo is the wrong way to do transit."

Jack Altman 51:46 Because the vehicles are too big, or what?

Vinod Khosla 51:48 No. It just increased congestion. Okay?

Jack Altman 51:51 So what should it be?

Vinod Khosla 51:52 So, uh, and I think Waymo will have a great business for delivering people from transit routes to the last mile. There's only one question in a city, uh, when it comes to traffic: Can you increase throughput ten X for the same street width, without redoing the street width? So we designed a public transit system of self-driving vehicles in bicycle lane width. So it's easy to insert in a city, has ten times the capacity of a light rail system or, or a car system, so more capacity than a light rail system in a bicycle lane width, and it's on demand because the cars just, you hail them like an Uber. So turns out, every single project we have bid so far, we bid a, uh, well, we bid a lot. Four have been decided. We won every single one. For a public transit system from a start-up, and the start-up wasn't invited to bid on any of these projects, because nobody knew about us.

Jack Altman 52:59 Yeah.

Vinod Khosla 53:00 Nobody invites a start-up.

Jack Altman 53:02 [chuckles]

Vinod Khosla 53:02 San Jose invited thirty-two bidders to build a s- um, transit system from the airport to the Google campus, and then to the Apple campus in San Jose.

Jack Altman 53:12 Mm-hmm.

Vinod Khosla 53:14 We bid over the transom, because most of these bids are open, and we won it outright. Think about it!

Jack Altman 53:20 But is this-- So what is the-- what's the vehicle?

Vinod Khosla 53:23 Uh, it's a little pod. Think Disney World.

Jack Altman 53:25 It's like a little narrow car?

Vinod Khosla 53:27 Yeah.

Jack Altman 53:28 Yeah, that makes sense.

Vinod Khosla 53:28 It fits in a bicycle lane.

Jack Altman 53:30 Yep.

Vinod Khosla 53:30 By the way, it can fit above a bicycle lane, too.

Jack Altman 53:33 Yep.

Vinod Khosla 53:34 Um-

Jack Altman 53:34 So you can go twice as many as cars on a street or something like that?

Vinod Khosla 53:37 Yeah. So turns out, it has way more capacity than cars in a street, or even if everybody took buses, this would have more capacity-

Jack Altman 53:46 Mm-hmm

Vinod Khosla 53:46 ... in passengers per hour, given for a given street width.

Jack Altman 53:50 Are they also coordinating with each other, so the cars are closer together? Is that part of it, too?

Vinod Khosla 53:54 Absolutely, you can coordinate.

Jack Altman 53:55 Yeah.

Vinod Khosla 53:56 Yes.

Jack Altman 53:56 Yeah. So you basically said-

Vinod Khosla 53:57 If you build a raised infrastructure, it's so simple, you can do prefab.

Jack Altman 54:02 Yeah.

Vinod Khosla 54:02 You don't have to do the Boston Tunnel dig for twenty years.

Jack Altman 54:06 Right. Wow!

Vinod Khosla 54:07 You just do a prefab, put it in place.

Jack Altman 54:09 Yeah.

Vinod Khosla 54:09 So-

Jack Altman 54:10 That's a good one

Vinod Khosla 54:10 ... it is thinking from first principles-

Jack Altman 54:13 Yeah. Hmm

Vinod Khosla 54:14 -uh, that matters, and it leads to, and being

Vinod Khosla 54:18 ambitious.

Jack Altman 54:19 Okay, and how about medicine? Because that's like twenty percent or more of GDP. That's a huge one.

Vinod Khosla 54:23 Yeah.

Jack Altman 54:23 Obviously, AI is a big part of this, but you spend a lot of time in medicine, separate from AI, with AI-

Vinod Khosla 54:28 So-

Jack Altman 54:28 -about medicine

Vinod Khosla 54:28 ... uh, so, uh, of, which is a big part of our GDP, a quarter of that spend is medical expertise, is phys-- think doctors.

Jack Altman 54:39 Mm-hmm.

Vinod Khosla 54:40 Okay? Uh, almost certainly, that goes to zero. Can go to zero. So what are we doing? We're building AI primary care doctors, AI phys-- uh, mental health therapists, AI physical therapists, AI oncologists, AI, uh, you name it.

Jack Altman 54:56 Actually, maybe just to, like, take-- just to get specific on what you mean about that going to zero. If we have, for every hundred doctors per capita we have today-... in like twenty fifty, do you think we have like zero or ten or th-- like, what, like, what do you think this is?

Vinod Khosla 55:11 I, I don't know the answer, uh-

Jack Altman 55:14 But there are some?

Vinod Khosla 55:15 You will always have some to learn from. Right.

Jack Altman 55:19 For the AI to learn from.

Vinod Khosla 55:20 For the AI to learn from, though the AI can boot itself to be much better.

Jack Altman 55:25 Mm-hmm.

Vinod Khosla 55:26 Um, and I'll give you today's data of a multicenter study at Stanford. They b- took the best academic institutions and judged complex AI diagnosis. Physicians only, and these are academic learning centers with the best physicians, seventy-three percent accuracy, so twenty-seven percent of the patients were getting the wrong diagnosis.

Jack Altman 55:53 That's like a lot. That's like one in-- yeah, that's a lot.

Vinod Khosla 55:56 It's wonderful.

Jack Altman 55:56 Yeah, yeah, anyway, it's just-

Vinod Khosla 55:58 Think about it. And this complex means it was a serious thing.

Jack Altman 56:02 Yeah.

Vinod Khosla 56:02 It wasn't just the flu. AI alone, eighty-eight percent.

Jack Altman 56:05 Accurate.

Vinod Khosla 56:06 Accurate. But then they gave the AI to the doctors. The doctors improved from seventy-three percent to seventy-six percent. The AI got degraded from eighty-eight to seventy-six percent.

Jack Altman 56:17 That's funny.

Vinod Khosla 56:19 And this is a serious multicenter study. I love medicine. What will happen is everybody on the planet, for less than a dollar a month, will get a free primary care-- a free physician, initially called primary care, but they'll be, uh, do everything. My son's company, Curai, is called multi-specialty primary care 'cause the AI knows enough gastroenterology to provide that. N- now, the hard problem is, the American Medical Association won't let the AI write a prescription.

Jack Altman 56:52 Yeah.

Vinod Khosla 56:52 And so we, we have human physicians who approve the diagnosis and the prescription or testing recommendation or whatever.

Jack Altman 57:01 Yeah, I was gonna say, I mean, if the humanoid at home plays out too, then it's probably also doing some amount... I mean, it's not gonna do surgery, but it might be doing some amount of giving you a physical or-

Vinod Khosla 57:12 Yeah

Jack Altman 57:12 ... giving you an injection or whatever else you need.

Vinod Khosla 57:14 Or watch your gait and say, "Hey."

Jack Altman 57:16 Yeah, yeah.

Vinod Khosla 57:17 [chuckles]

Jack Altman 57:17 Something's up.

Vinod Khosla 57:18 Yeah, something's up.

Jack Altman 57:19 Yeah.

Vinod Khosla 57:20 Um-

Jack Altman 57:21 So that's a quarter of medicine. What about the other three quarters?

Vinod Khosla 57:23 Uh, a, a quarter is pharmaceuticals.

Jack Altman 57:28 Mm-hmm.

Vinod Khosla 57:29 That, we are seeing an explosion in AI in drug design.

Jack Altman 57:33 Yes.

Vinod Khosla 57:33 Both sm- small molecule and-

Jack Altman 57:37 Are you pretty bullish on that?

Vinod Khosla 57:38 I'm very bullish on that.

Jack Altman 57:40 Do you think it will, um, speed up the rate of drug discovery slash make it cheaper, or do you think it's more about it will help us discover undiscoverable things?

Vinod Khosla 57:48 Probably a little bit of both. The hard part in that is the regulatory cycle. Uh, we have a separate effort to say, could you trust a test anything against lots of human genetics and lots of human organs? So, uh, we have an effort to do ten thousand tests, and it could be a thousand different genetics, so people, people, and ten organs each, in one week, in one untouched robot. So it just does the test, screens the drug, and looks for effects and growth and all that. Um, maybe something like that would replace human trials. Most likely, at some point soon, it'll reduce the size, uh, uh, and length of these trials. So, uh, I think drug discovery will see not only better molecules, the bigger problem in dis- drug discovery is not to do what's called lead compounds for a disease, uh, for a drug, but to increase the probability of success. The probability, once you have a lead drug candidate, to actual FDA approval, is so low-

Jack Altman 59:02 Mm-hmm

Vinod Khosla 59:03 ... like, out of a hundred, o- uh, less than five will make it.

Jack Altman 59:08 Yeah.

Vinod Khosla 59:08 Right? So it's increasing that probability because you're starting with a better candidate, and you're measuring the progression better. So that's a quarter. I do think, uh, there is diagnostics imaging, and by the way, we have the most coolest self-driving for MRI machines, so you don't need MRI machines. Now, you need m- today, technicians to run MRI machines, but if you have a self-driver, you don't need that. Cardiac MRI is so specialized because the heart is moving, um, that you can't staff centers with cardiac MRI technicians.

Jack Altman 59:47 Mm.

Vinod Khosla 59:48 We turn an hour and fifteen-minute exam into twenty minutes. Single button press. You can even do it remotely.

Jack Altman 59:55 Mm. [chuckles] Yeah.

Vinod Khosla 59:56 Because... So we did the same for ultrasound, uh, self-driving for ultrasound machines. An ultrasound machine might cost twenty-five grand, but a technician to do a cardiac MRI will cost you a hundred and fifty grand. So why care about the machine? It's the person. If you have self-driving, we had this company that GE actually acquired from us. So all I'm saying is diagnostics and imaging is a quarter of the spend. It'll get cheaper.

Jack Altman 1:00:24 I'm shocked it's a quarter of the spend. I didn't realize that.

Vinod Khosla 1:00:27 Testing of all sorts.

Jack Altman 1:00:28 Yeah.

Vinod Khosla 1:00:29 Um, and, and then a quarter is in-hospital care. Uh, these are very rough numbers, but, uh, uh, in-hospital care, uh, and that will improve too.

Jack Altman 1:00:39 So the net of all of this is, like, a multi-trillion dollar retrofit, I guess.

Vinod Khosla 1:00:45 Yes!

Jack Altman 1:00:45 Yeah.

Vinod Khosla 1:00:46 But if expertise is free, and you can give somebody ten times, uh, the amount of care-

Jack Altman 1:00:56 Yeah

Vinod Khosla 1:00:56 ... the average US citizen, uh, gets one primary care visit a year, roughly. In Australia, it's four or five times that. So we are poor-

Jack Altman 1:01:08 Mm-hmm

Vinod Khosla 1:01:08 ... anyway.

Jack Altman 1:01:09 Mm-hmm.

Vinod Khosla 1:01:09 If you provided way more co-... care upfront, you'd reduce disease burden downstream. Fewer people would have heart surgeries, which are super expensive, or emergency room visits, uh, because you took care of them at the beginnings of the detection of their disease.

Jack Altman 1:01:29 Mm-hmm.

Vinod Khosla 1:01:29 So whether you t-- every expensive disease, whether it's cardiac, Alzheimer's, Parkinson's, we are well on our way to discovering them ten years before the symptoms manifest. So I, I've argued, uh, a piece I did called "Twenty Percent Doctor" included in twenty sixteen-

Jack Altman 1:01:48 Mm-hmm.

Vinod Khosla 1:01:49 I said, "Symptom-based medicine will disappear."

Jack Altman 1:01:52 Mm-hmm.

Vinod Khosla 1:01:52 You don't detect disease from symptoms. You detect disease based on what's going on in the body. So, uh, that's medicine.

Jack Altman 1:02:00 Yeah.

Vinod Khosla 1:02:01 I'm pretty excited about it. The level of precision that's possible, I think in the next five years or ten years, biological intervention will approach computer programming in being able to precisely program things, design molecules. So we are starting to-- We have a couple of startups looking to do drugs for one patient at a time. So the whole drug only applies to one patient for one genetic-

Jack Altman 1:02:29 Wow!

Vinod Khosla 1:02:30 -anomaly.

Jack Altman 1:02:31 And that's because that includes, like, the patient's DNA is factored in or something?

Vinod Khosla 1:02:36 Yeah. Uh, their disease, their specific mutation-

Jack Altman 1:02:40 Yeah

Vinod Khosla 1:02:40 ... can be addressed for them.

Jack Altman 1:02:42 Wow.

Vinod Khosla 1:02:42 There's also broader categories, like a single-shot treatment for, uh, uh, um, uh, sickle cell disease, uh, right? Uh, massive problem.

Jack Altman 1:02:54 Yeah.

Vinod Khosla 1:02:55 If you can do a genetic treatment, one shot, I think that'll happen in the next ten years.

Jack Altman 1:03:00 As I'm listening to you talk about all of these different areas, and, like, you think on such a grand societal scale, but you probably also have a bunch of sort of, um, maybe seemingly boring, but, like, good ideas kind of come through Khosla Ventures all the time, too.

Vinod Khosla 1:03:16 Yes.

Jack Altman 1:03:16 Do you still enjoy making those kinds of investments, uh, as well? Is that more where you have, like, a partnership, and there's other people on your team who are more interested in-

Vinod Khosla 1:03:24 Well, one, there are other people in the partnership who enjoy just successful startups.

Jack Altman 1:03:30 Yeah. [chuckles]

Vinod Khosla 1:03:30 I do, too.

Jack Altman 1:03:31 Yeah.

Vinod Khosla 1:03:31 Hey, look, I, I enjoy winning. You know, when I do a GitLab, that's, that's a win. When we do cognition, it's a win. When we do Replit, it's a win. I mean, the growth rates for some of these companies are stunning.

Jack Altman 1:03:45 Shocking, yeah.

Vinod Khosla 1:03:46 So, um, yeah, it's still fun to be disruptive.

Jack Altman 1:03:50 Yeah, it's just, like, sort of a different bucket of enjoyment.

Vinod Khosla 1:03:52 It's a different bucket.

Jack Altman 1:03:54 Yeah.

Vinod Khosla 1:03:54 I would say in the more societally, su- societally impactful technologies, I will go through actually starting the company.

Jack Altman 1:04:05 Mm-hmm.

Vinod Khosla 1:04:05 Like fusion. Bob was a senior fellow, um, at Commonwealth Fusion. Bob was a senior fellow at the MIT Plasma Fusion Lab when I met him, and he had ideas, and, and, and I got him sort of, like, instigated-

Jack Altman 1:04:22 Yeah

Vinod Khosla 1:04:22 ... so to say.

Jack Altman 1:04:23 Yeah.

Vinod Khosla 1:04:24 He's done all the work, and then he instigated the field of fusion.

Jack Altman 1:04:27 Mm-hmm.

Vinod Khosla 1:04:28 So whether he succeeds or not, there's so many different startups now. One will succeed.

Jack Altman 1:04:34 Yeah.

Vinod Khosla 1:04:35 So Commonwealth Fusion or Helion don't have to succeed for fusion to succeed. So I like instigating things. The same thing we did... Yeah, it was very profitable to make twenty-five hundred times your money-

Jack Altman 1:04:48 Yeah

Vinod Khosla 1:04:48 ... and, and having the world be TCP/IP instead of ATM. It's interesting to look back at the press from nineteen ninety-six. Just assumed-

Jack Altman 1:04:59 Yeah

Vinod Khosla 1:05:00 ... uh, it was gonna be, the Internet was gonna be ATM. So I'm actually, uh, you know, I always tell Pradeep, the founder of that-

Jack Altman 1:05:07 Yeah

Vinod Khosla 1:05:07 ... if we hadn't done that, the Internet wouldn't be TCP/IP, which is horrific to think about.

Jack Altman 1:05:14 Mm-hmm.

Vinod Khosla 1:05:14 It'd be in the hands of AT&T [chuckles] engineering the protocols.

Jack Altman 1:05:18 Yeah.

Vinod Khosla 1:05:18 Which they had done. And this is why Lucent went out of business. Practically, they're still around. Alcatel, Newbridge, Nortel, the-- all the telecom players sort of gradually disappeared because they didn't win, place, or show in the race for the Internet. And the same will happen in other areas.

Jack Altman 1:05:40 You, um, you used the word instigating when you could have maybe used a word like incubating. I also heard earlier in the conversation, I think you, you know, you talked about, like, not being an investor, you know. Um, I think also, like, the way that you work with founders, and I've heard you talk about not being founder-friendly, or that there's a different way to think about being founder-friendly. What I'm curious about is, there's a lot of sort of, uh, new ways to describe what VCs do and how they describe themselves and mindsets around it. Do you think that in general, the role that venture investors see themselves playing, do you think we're trending in a direction where it's getting better all the time, or do you think that in any ways the industry has lost its footing on some of these concepts?

Vinod Khosla 1:06:25 Look, there's all kinds of VCs with all kinds of approaches. Some are marketing labels. Founder-friendly is a real disservice to founders. It's like if you said to your kids, w- if you told your five-year-old-

Jack Altman 1:06:44 Do whatever you want

Vinod Khosla 1:06:45 ... "Do whatever you want, I will always say yes."

Jack Altman 1:06:48 Yeah.

Vinod Khosla 1:06:49 That's-

Jack Altman 1:06:50 You wanna-

Vinod Khosla 1:06:50 You pay the price.

Jack Altman 1:06:51 You wanna go swimming without me? Yeah, like, whatever.

Vinod Khosla 1:06:53 Yeah.

Jack Altman 1:06:54 Yeah.

Vinod Khosla 1:06:54 Or eat as much candy, or eat as much Coke. Mm, and by the way, my kids, when they were growing up, at age five, they could eat as much candy and as much Coke as they wanted, as much junk food. Uh, we always had it laying around. They could-- They didn't have to ask us.... but we taught them how to measure themselves on how much Coke, uh, they drink, whether it's good or not. So I would say we taught them control, not gave them yes, no permission.

Jack Altman 1:07:27 Yeah, but the most important thing is that you set those parameters for a kid.

Vinod Khosla 1:07:31 Yeah.

Jack Altman 1:07:31 And, yeah.

Vinod Khosla 1:07:32 Right. And in literally, um, at age twelve, I thought of, they can make ten percent of the important decisions.

Jack Altman 1:07:40 Mm-hmm.

Vinod Khosla 1:07:41 By age eighteen, they have to make ninety.

Jack Altman 1:07:43 Yeah.

Vinod Khosla 1:07:43 And my job is to teach them how to make the leash longer.

Jack Altman 1:07:48 Right.

Vinod Khosla 1:07:49 But the s- same is true of entrepreneurs. Look, a brilliant engineer from DeepMind starts a company. What do they know about finance? What do they know about marketing? What do they know about even hiring or managing? Our job is to teach them, just like I taught my kids. By eighteen, my kids were pretty independent. I didn't worry about what they did in college. All four went to college, uh, five miles from our house at Stanford.

Jack Altman 1:08:19 Yeah.

Vinod Khosla 1:08:19 None of them had this, "I want to get away," because they felt they had enough leash. They had enough permission. They didn't need to, quote-unquote, "get away."

Jack Altman 1:08:28 Can I put up a, like, a steel man argument that, uh, of the other side to hear your reaction to it? Basically, it would be something like the, the sort of the strongest entrepreneurs, which is where all the returns are, don't really need much help or much management, and so better to just invest in the people who didn't need help in the first place.

Vinod Khosla 1:08:46 I disagree. That is very much the founders fund argument.

Jack Altman 1:08:50 Yeah.

Vinod Khosla 1:08:50 They do very well with that. Great founders do well, whether you like it or not-

Jack Altman 1:08:57 Yeah

Vinod Khosla 1:08:57 ... uh, whatever you do. Where I will disagree is they can do even better if they have a debating partner.

Jack Altman 1:09:07 Mm-hmm.

Vinod Khosla 1:09:07 So my view is very simple. I almost never vote at a board, so I don't even go to boards now.

Jack Altman 1:09:15 You won't show up to a board meeting?

Vinod Khosla 1:09:17 I, I don't, uh-

Jack Altman 1:09:18 You just won't get on board

Vinod Khosla 1:09:19 ... get on boards.

Jack Altman 1:09:19 Yeah, I see.

Vinod Khosla 1:09:20 Okay?

Jack Altman 1:09:20 Yeah.

Vinod Khosla 1:09:20 And Square is a great example. I, uh, I got off the board, uh, the, the week before the IPO, and everybody was like: "Hey, this is a sexy IPO. Why are you getting off the board?" I, I don't like the burden of-

Jack Altman 1:09:34 The governance

Vinod Khosla 1:09:35 ... the governance and all that. My responsibility shifted from having Jack do better, uh, to governance for the public markets.

Jack Altman 1:09:46 Mm-hmm.

Vinod Khosla 1:09:47 It's, it's, it's not very fun.

Jack Altman 1:09:49 Mm-hmm.

Vinod Khosla 1:09:49 It sounds glamorous, but it's not. You know, Jack and I would do, uh, regular monthly dinners, and I'd always challenge him and always push him, and he loved that, so he took the time to do these dinners. You, you talk to Max Levchin at Affirm. It's a public company. We long ago distributed stock. I still do quarterly meetings and challenge him for an hour every quarter.

Jack Altman 1:10:13 Mm-hmm.

Vinod Khosla 1:10:14 Right? Even the strongest founders, like Jack and Max, and... need this.

Jack Altman 1:10:21 It's like even a pro sports player has a coach.

Vinod Khosla 1:10:23 Yes. Uh, you, you want people to challenge you and debate you, but not make decisions. I find it silly that boards want to take a vote. I won't even take a vote on the acquisition.

Jack Altman 1:10:39 Mm-hmm.

Vinod Khosla 1:10:39 Uh, I'll just say I'll, I'll support whatever management wants to do, even if I disagree strongly.

Jack Altman 1:10:46 Mm-hmm.

Vinod Khosla 1:10:46 But I do want to have the opportunity to debate it with the management team.

Jack Altman 1:10:51 Yeah.

Vinod Khosla 1:10:51 So Jagdeep Singh is a founder, one of our robotics companies. I've done six companies with him. There was a company, uh, I'm forgetting the name, called Light something, optical company. Uh, the team wanted to sell. I only asked they give me two hours with the whole team to make a... uh, and I did over the weekend, the presentation I gave to them on why they should not sell. But before the, that presentation, as long as I had the two hours-

Jack Altman 1:11:20 Yeah

Vinod Khosla 1:11:20 ... uh, I signed the papers and said, "You have my vote anyway."

Jack Altman 1:11:24 Yeah.

Vinod Khosla 1:11:24 "You can ch- choose to use it or tear it up."

Jack Altman 1:11:27 I love that, yeah.

Vinod Khosla 1:11:28 So I will always give the final say to, to the management team.

Jack Altman 1:11:33 Yeah.

Vinod Khosla 1:11:34 But I do want to debate it, and I think every strong founder loves feedback that challenges them.

Jack Altman 1:11:42 Yes.

Vinod Khosla 1:11:43 And it's the only thing really valuable to a strong founder.

Jack Altman 1:11:46 Mm-hmm.

Vinod Khosla 1:11:47 Great founders love that. Not-so-great founders are so uncertain of themselves, they don't like that.

Jack Altman 1:11:55 Mm-hmm.

Vinod Khosla 1:11:55 And they are-- I prefer to teach them how to be a great founder.

Jack Altman 1:12:00 Yeah.

Vinod Khosla 1:12:00 But almost every strong founder loves feedback.

Jack Altman 1:12:04 I had, um, I had Keith on this podcast, and what you're describing is a big part of, I think, this, you know, what drew him back to Khosla.

Vinod Khosla 1:12:13 Yeah.

Jack Altman 1:12:13 By the way, on that topic, I'm curious, like, I... I read that as one of the sort of, like, generationally great sort of recruiting or re-recruiting, um, you know, moves that has happened, and, um, I think he's an amazing investor, obviously. Did you know for a while that you wanted that to happen?

Vinod Khosla 1:12:31 We're a different kind of firm, and I said earlier, we are not in-- I've not called myself an investor ever.

Jack Altman 1:12:37 Hmm.

Vinod Khosla 1:12:38 Right? I always say I'm a venture assistant. If you look at our website, since we started the firm in 2004, the first tagline is "venture assistance." By the way, another phrase that has stayed on our website since 2004 is: "I prefer brut- uh, brutal honesty to hypocritical politeness." And when most VCs give polite feedback to an entrepreneur, they're doing a disservice. They're basically saying: "You're doing great."

Jack Altman 1:13:07 Mm-hmm.

Vinod Khosla 1:13:07 "Don't examine anything."

Jack Altman 1:13:08 Mm-hmm.

Vinod Khosla 1:13:09 You know, makes you feel good as an entrepreneur, but doesn't help you build a better company. And the only things that make you feel better are things that change your thinking or challenge your thinking. So it's an important characteristic for founders to keep in mind. What are they looking for? The best help or just people who will go away?

Jack Altman 1:13:28 Yeah.

Vinod Khosla 1:13:29 Um, so it's a style that's different.... we don't think of investments. We've never calculate, uh, never means not in the last ten years I can think of it. I can't think of a single instance where we calculated an IRR.

Jack Altman 1:13:44 Mm-hmm.

Vinod Khosla 1:13:45 Not one.

Jack Altman 1:13:45 Mm-hmm.

Vinod Khosla 1:13:46 An investment firm that never calculates IRRs, because we want to build something significant, and then-

Jack Altman 1:13:53 It will work out.

Vinod Khosla 1:13:53 -the economics will work out. So that's our approach. But we do want to make-- increase the probability of success of the founder, and we want to m- increase the magnitude of the potential success also, by thinking about, should you do X or Y? Founders underestimate that.

Jack Altman 1:14:13 Mm.

Vinod Khosla 1:14:14 So let's say a founder is selling ten percent of a company, um, ten million at, uh, a hundred million post. The founders forget they're keeping ninety percent. And what happens to the price per share of that ninety percent, whether it's-- they give up ten percent or twelve percent, ninety, keep ninety or eighty-eight-

Jack Altman 1:14:37 Yeah

Vinod Khosla 1:14:38 ... trivial compared to the five hundred percent swing you can get by taking one path or a different path. That's where the opportunity for maximization is.

Jack Altman 1:14:50 Mm.

Vinod Khosla 1:14:50 That's where it's not about investing, but getting the best help building a company.

Jack Altman 1:14:54 Yeah.

Vinod Khosla 1:14:55 And that's what I sort of spend all my time doing.

Jack Altman 1:14:58 Yeah.

Vinod Khosla 1:14:59 Just yesterday, I was talking to this founder. It's, it's a very cool company, self-driving for these heavy machines-

Jack Altman 1:15:07 Mm

Vinod Khosla 1:15:07 ... bulldozers and loaders.

Jack Altman 1:15:10 That is cool.

Vinod Khosla 1:15:10 Yeah, right. And we had an interesting session, and I reframed his business from automating big Caterpillar machines to, "I'll just rent you the driver." You have trouble staffing r- drivers. Most of these are in mines and remote places. Equipment, uh, a multimillion-dollar piece of equipment-

Jack Altman 1:15:33 Yeah

Vinod Khosla 1:15:33 ... sits idle because you don't have an operator. I said, "Just do rental by the hour and guarantee you will always have a driver available."

Jack Altman 1:15:42 Mm.

Vinod Khosla 1:15:43 Always have a dr-- This reframing, the ent- entrepreneur was pretty excited about. It's the same thing, but it's not.

Jack Altman 1:15:50 Yeah.

Vinod Khosla 1:15:51 He's, um... It's a much easier sell. It's not saying change your equipment. It's saying: Hey, you can't keep your equipment running all the time because you don't have operators. I'll run it for you. You're paying operators. I'll do it better, faster, more hours. You get more of your equipment. It's a simple framing change, but you could have a similar technology discussion,

Vinod Khosla 1:16:17 too.

Jack Altman 1:16:17 I know you're, you're going to have to go in a minute, so I just want to ask you, uh, there's one-- I mean, there's a million more questions I want to ask, but there's one I really wanted to ask, which is, um, you've been not just, like, doing venture, but you've been doing it, like, really successfully and in a super relevant way for a long time, through a lot of cycles. Before we started, you said, you know, you're turning seventy, or you turned seventy this year. You feel twenty-five. This is kind of like the dream, and do you know what you attribute all of this to, like?

Vinod Khosla 1:16:46 Yeah. Uh, very importantly, I gave a talk at Stanford in twenty fifteen, the Stanford Business School in twenty fifteen. I said, "I'm internally driven. I don't care what others think of me," so it's feels obnoxious sometimes because I'll do my thing-

Jack Altman 1:17:03 Mm-hmm

Vinod Khosla 1:17:03 ... independent of what others think. I'm doing this because it's fun. You know, I get somebody teaching me about con-- mining and constraints in construction or self-driving an MRI machine or a big loader. They're the same thing. Clever ideas like public transit, or can we make fusion happen? So I'm in it because it's fun for me. And most of the people at Khosla love what they're doing and would do the same thing if they didn't get paid. And so we do it for a different reason than making the most money. Because we focus on larger impact, the returns really do well or take care of itself. You know, it, it's sort of like what's motivating you?

Jack Altman 1:17:55 Mm-hmm.

Vinod Khosla 1:17:56 Uh, in fact, this was conversation I had, Sam, when we invest- invested in OpenAI. He knows I care about the impact. Something happened, um, uh, making something happen. Fusion is too important to not try.

Jack Altman 1:18:10 Yeah.

Vinod Khosla 1:18:10 I want the impact of fusion.

Jack Altman 1:18:12 Yeah.

Vinod Khosla 1:18:12 There's nothing I could do in making money that would impact me more, saying-- other than saying, I played this tiny part in getting fusion to start and hopefully happen.

Jack Altman 1:18:23 Yeah.

Vinod Khosla 1:18:24 Even if Commonwealth Fusion doesn't do it, almost all the companies have been enabled, and investing in the field has been enabled because people looked at Commonwealth Fusion.

Jack Altman 1:18:34 Mm-hmm.

Vinod Khosla 1:18:35 So this idea of instigating change is very motivational. It's way more impactful and also fun and way more learning than almost anything else. I say I'm, like, totally-- I have one addiction, which is to learning. I can't learn enough new things, whether it's about biology or an AI algorithm or hypersonic flight. We are doing Mach Five flight, too, and w- we haven't talked about national defense. We are spending a lot of time there.

Jack Altman 1:19:06 Would love to.

Vinod Khosla 1:19:07 But all these areas are just fun.

Jack Altman 1:19:11 Yes.

Vinod Khosla 1:19:12 And, and that's w- why I don't mind. I still work eighty hours a week, and I hope, uh, twenty-five years from now, I'm w- working eighty hours a week, health permitting, touch wood. But that's-- I think it's a very different motivation of why we do things. I tell our LPs, I'm probably the only one foolish enough to tell my LPs, "If I can have more impact and less return, I'll pick more impact every single time."

Jack Altman 1:19:36 Yeah.

Vinod Khosla 1:19:36 As long as they get a minimum return-

Jack Altman 1:19:39 Yeah

Vinod Khosla 1:19:39 ... that they're comfortable with-

Jack Altman 1:19:40 Yeah

Vinod Khosla 1:19:40 ... so they can.

Jack Altman 1:19:41 Well, you seem to be getting both. Um, Vinod, thank you so much. This was amazing, and I am super appreciative of your time and all that you've, uh, done for, for the industry.

Vinod Khosla 1:19:49 Great. Thank you. It's a lot of fun. [upbeat music]