E14: Major challenger to OpenAI, xAI, closing on $6B in funding
May 6, 2024
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Joshua Berkowitz, Donald Stalter, and Jason Calacanis discuss Elon Musk's $6B funding for xAI, Sequoia's $6B AI round, PitchBook's report on Emerging Managers, SVB's venture portfolio, impact of investor attitude on founders, lightning round of last 3 investments, and more.
X AI secured $6B in funding as a major rival to OpenAI, highlighting the capital-intensive AI landscape.
Emerging managers in venture capital outperform established ones, emphasizing diversification and evolving fund trends.
Investor alignment and commitment in venture capital is lacking compared to private equity, potentially leading to misaligned interests.
Deep dives
Transition of Nick Teams from the Past to the Present
The podcast episode delves into the speaker's nostalgic reflection on past Nick teams, highlighting moments during the Carmelo era and the 90s with players like Patrick Ewing, Littrell Sprewell, and Alan Houston. The speaker expresses admiration for the current Nick team, emphasizing their heart, grit, and lack of top draft picks, particularly drawing attention to their victory over MVP Philadelphia and joking about owning Philadelphia.
Exciting Development in the AI Space with Elon Musk's X AI
The discussion shifts to Elon Musk's AI competitor, X AI, raising a significant round of funding, sparking insights into the commoditization of AI technology. The podcast participants analyze the competitive landscape, emphasizing the importance of unique data sets and the capital-intensive nature of the AI industry. The conversation also delves into the significance of licensing data sets and the evolving dynamics between open source and proprietary models.
Investing Strategies in Venture Capital with Emerging Managers
The podcast delves into investing strategies in venture capital, focusing on the performance of emerging managers versus established ones. Insights reveal the outperformance of emerging managers in the initial fund vintages. The discussion highlights the importance of diversification and deal flow for LPs, emphasizing the impact of GP commitment and the evolving trends in fund sizes. The conversation underscores the value of process-driven approaches and the vitality of maintaining passion for the investment landscape.
The Importance of Personal Net Worth Commitment in Investing
Investors discuss the significance of personal net worth commitment in investment decisions. In private equity, it is common for general partners to invest substantial amounts of their personal money in the funds to align interests. In contrast, venture capital lacks this alignment, with investors often only committing their management fees, leading to potential conflicts of interest and misaligned incentives.
The Evolution of AI in Data Processing and Business Solutions
Discussions revolve around the advancements in AI for data processing and business applications. Innovative AI technologies like Jenny AI offer tools for easier writing processes, similar to Grammarly for academia. Additionally, AI platforms like Home Score are introduced, providing data-driven insights for potential home investments, akin to Carfax for houses. The integration of AI in various sectors promises enhanced efficiency and decision-making processes.
David Weisburd hosts Joshua Berkowitz, Donald Stalter and Jason Calacanis to discuss Elon Musk raising $6B for his new AI startup (4:44), PitchBook's report on Emerging Managers (16:04), SVB’s venture portfolio situation (40:16), and much more!
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Timestamps:
(0:00) David Weisburd intros Joshua Berkowitz, Donald Stalter and Jason Calacanis
(4:44) xAI raises $6B
(11:49) Sequoia leading a $6B round for AI
(16:04) PitchBook's report on Emerging Managers
(27:02) The impact of the surge of venture capital in 2021 and its implications for the ecosystem
(34:16) The impact of a positive investor attitude on founders
(40:16) The Silicon Valley Bank (SVB) venture portfolio situation
