BusinessPostCorner.com
No Result
View All Result
Monday, July 14, 2025
  • Home
  • Business
  • Finance
  • Accounting
  • Tax
  • Management
  • Marketing
  • Crypto News
  • Human Resources
BusinessPostCorner.com
  • Home
  • Business
  • Finance
  • Accounting
  • Tax
  • Management
  • Marketing
  • Crypto News
  • Human Resources
No Result
View All Result
BusinessPostCorner.com
No Result
View All Result

AI will disrupt VCs, aid founders: Chamath Palihapitiya

December 24, 2023
in Business
Reading Time: 3 mins read
A A
0
AI will disrupt VCs, aid founders: Chamath Palihapitiya
ShareShareShareShareShare

Artificial intelligence has been inescapable this year. After OpenAI released ChatGPT some 13 months ago, attention turned to how such tools will disrupt careers and industries—and eager venture capitalists poured billions into AI startups that might do the disrupting.

But VCs themselves might get disrupted, according to billionaire investor Chamath Palihapitiya, a former Facebook executive and the CEO of VC firm Social Capital.

“We talk about AI as a big disruptor to the big companies and this and that, but AI may be the biggest disruptor to VC in the end,” Palihapitiya said on the All-In Podcast this week.

A “world where AI proliferates,” he said, is “positive for founders,” who will be able to own more of their companies rather than give away too much equity to VCs.

In the past, he said, a tech startup with $2 million in seed funding might hire seven people and have enough capital to survive for a year and half, after which it hopefully gained enough traction so that investors would pony up $10 million or $15 million in Series A funding. The downside, of course, is that in exchange for capital, VCs want equity in the company.

But AI tools give founders more leverage, Palihapitiya said, mentioning GitHub Copilot, which makes creating and fixing code much easier. Startups can now hire programmers, perhaps in other countries with lower pay rates, to use such tools to get more done faster, he noted.

The upshot is that, today, a tech startup with the same amount of seed funding might have a three- or four-person team and survive on that $2 million for four years rather than a year a half. Founders could then end up owning 80% of their company with the potential to exit for $50 million or $100 million, “and they’ve made more money than in a traditional outcome” he said.

“It’s only a matter of time,” Palihapitiya added, “until they can put two and two together in an Excel spreadsheet to figure out that owning 50% of a $100 million company is greater than owning 18% of some other company when you’re massively diluted, or 8% or whatever.”

Jason Calacanis, an angel investor, responded that now, instead of founders of a particular cohort competing on who can raise the most money at the highest valuation, he’s seen them shifting to, “how do I get to profitability and how do I own as much of my company as possible?” 

Palihapitiya became the face of the SPAC boom-and-bust a few years back due to his involvement with special purpose acquisition companies—shell corporations listed on a stock exchange that acquire a private company, thereby making it public sans the rigors of the IPO process.   

This isn’t the first time he has mulled the role of VCs in an AI-altered world.

It “seems pretty reasonable and logical,” he said last month on the podcast, that AI productivity gains will lead to tens or hundreds of millions of startups made up of only one or two people.

“There’s a lot of sort of financial engineering that kind of goes away in that world,” he said. “I think the job of the venture capitalist changes really profoundly. I think there’s a reasonable case to make that it doesn’t exist.” 

Subscribe to the Eye on AI newsletter to stay abreast of how AI is shaping the future of business. Sign up for free.

Credit: Source link

ShareTweetSendPinShare
Previous Post

High winds likely add to Christmas Eve travel disruption

Next Post

Voters in Chad approve constitution in referendum marred by boycotts

Next Post
Voters in Chad approve constitution in referendum marred by boycotts

Voters in Chad approve constitution in referendum marred by boycotts

Why it’s time to rethink expense report workflows for company-paid credit cards

Why it’s time to rethink expense report workflows for company-paid credit cards

July 11, 2025
Apple’s AI efforts ‘have struck midnight’ and the only way it can stop getting further behind is acquiring Perplexity, analyst Dan Ives says

Apple’s AI efforts ‘have struck midnight’ and the only way it can stop getting further behind is acquiring Perplexity, analyst Dan Ives says

July 9, 2025
Animoca Brands Partners with DayDayCook to Manage 0M Bitcoin Treasury

Animoca Brands Partners with DayDayCook to Manage $100M Bitcoin Treasury

July 13, 2025
EU delays retaliatory tariffs on US goods due to hit Monday

EU delays retaliatory tariffs on US goods due to hit Monday

July 13, 2025
Landmark day for victims as initial findings expected

Landmark day for victims as initial findings expected

July 7, 2025
Airlines angry at planned rise in Heathrow passenger charges

Airlines angry at planned rise in Heathrow passenger charges

July 11, 2025
BusinessPostCorner.com

BusinessPostCorner.com is an online news portal that aims to share the latest news about following topics: Accounting, Tax, Business, Finance, Crypto, Management, Human resources and Marketing. Feel free to get in touch with us!

Recent News

Cardano Price Prediction: ADA Explodes 30% in a Week – ADA to ?

Cardano Price Prediction: ADA Explodes 30% in a Week – ADA to $10?

July 14, 2025
Donald Trump threatens 100% secondary tariffs on Russia

Donald Trump threatens 100% secondary tariffs on Russia

July 14, 2025

Our Newsletter!

Loading
  • Contact Us
  • Privacy Policy
  • Terms of Use
  • DMCA

© 2023 businesspostcorner.com - All Rights Reserved!

No Result
View All Result
  • Home
  • Business
  • Finance
  • Accounting
  • Tax
  • Management
  • Marketing
  • Crypto News
  • Human Resources

© 2023 businesspostcorner.com - All Rights Reserved!