Odd Lots Josh Wolfe on AI and the Breaking of Silicon Valley's Social Contract
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Sep 8, 2025 
In this engaging conversation, Josh Wolfe, co-founder and managing partner at Lux Capital, dives into the complexities of the current AI boom. He shares insights on the precarious balance of market valuations as companies like Nvidia soar, while some startups face talent exodus. Wolfe discusses the evolving relationship between venture capitalists and founders, emphasizing the importance of aligned incentives. He also examines the risks posed to Silicon Valley's social contract amid the tech transformation, highlighting both opportunities and looming challenges in the industry.
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Big Tech Is Not Out Of The Race
- Google and Apple are underrated contenders in the AI era due to deep product integration and massive user workflows.
- Their ability to bundle AI into email, calendar, and docs gives them a structural advantage over niche model players.
Edge Inference Could Dismantle GPU Dominance
- Edge inference and on-device models could reduce dependence on massive GPU datacenters and reshape hardware winners.
- Memory and flash-focused chips may gain importance versus an endless GPU demand narrative.
Acqui-Hires Are Breaking The VC Social Contract
- Acqui-hires and licensing deals are breaking the traditional VC social contract by letting big tech extract talent and value.
- Expect tighter protective covenants in term sheets as investors react to this extraction risk.
