AI, Data and Blockchain: a VC perspective | Tomasz Tunguz, Founder of Theory Ventures

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May 16, 2024

Tomasz Tunguz, a leading voice in tech investment, discusses Ethereum's potential, data security in a decentralized world, and AI technologies. They delve into blockchain's use case, the intersection of blockchain and AI, and trends in cloud investments.

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INSIGHT

Ethereum as a Database

Tomasz Tunguz sees Ethereum as a database company, highlighting its profitability and potential.
He believes most software companies will eventually use Web3 databases for sensitive data.

INSIGHT

Web3 for Data Security

Tunguz suggests data security and custody are key drivers for Web3 adoption.
He illustrates how a decentralized Salesforce could enhance security using wallets.

INSIGHT

LLM Trends

Smaller language models (LLMs) are sufficient for many business applications.
Tunguz observes rapid commoditization of older models and a potential bifurcation in model sizes.

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In this episode, we sat down with Tomasz Tunguz (https://twitter.com/ttunguz), the founder of Theory Ventures and a leading voice in the tech investment space.

We discussed the transformative potential of Ethereum as a database company, the importance of data security in a decentralized world, and the evolving landscape of AI technologies from foundational models to AI-native applications.

📰 Article "What If LLMs Change the Business Model of the Internet?": https://tomtunguz.com/what-if-llms-change-the-business-model-of-the-internet/

✍️ Tomasz' blog: https://tomtunguz.com

Theory Ventures

Website - https://theory.ventures/

Twitter - https://twitter.com/Theoryvc

Tomasz Tunguz

LinkedIn - https://www.linkedin.com/in/tomasztunguz

Twitter - https://twitter.com/ttunguz

Blog - https://tomtunguz.com/

FIRSTMARK

Website - https://firstmark.com

Twitter - https://twitter.com/FirstMarkCap Matt Turck (Managing Director)

LinkedIn - https://www.linkedin.com/in/turck/

Twitter - https://twitter.com/mattturck LISTEN ON:

YouTube - https://www.youtube.com/@DataDrivenNYC/videos

Apple - https://podcasts.apple.com/us/podcast/the-mad-podcast-with-matt-turck/id1686238724

(00:00) Intro
(02:46) Tomasz has continued to invest in blockchain through the crypto winter. Why?
(06:59) Security and privacy as the main blockchain's use case.
(09:18) Blockchain and AI: how do they work together?
(11:02) Why does Theory Ventures not invest in AI hardware?
(12:28) Why do big companies invest in cloud infrastructure?
(15:35) An investor view on the foundation models.
(18:36) Is Gen AI going to replace traditional AI?
(20:57) Does the Theory Ventures invest in AI tooling companies?
(22:53) Is investing in Cloud companies better than investing in AI-powered applications?
(26:40) Copilot AI vs full-execution AI.
(28:38) A case for specialized LLMs.
(29:54) Gross margins in Gen AI: is it profitable?
(32:34) Modern Data Stack: is it still a thing to invest in?
(37:02) Microsoft Fabric and its impact on the market.
(38:50) Tomasz's thought on Motherduck and DuckDB.
(40:37) Where do BI tools fit in the Modern Data Stack?
(44:32) Why has the democratization of BI never happened?
(45:52) How do acquisitions happen? Can you engineer them?
(49:02) Key ingredients to build data infrastructure business.
(50:40) Tomasz is a founder now! How does it feel?
(53:15) Talking numbers: Theory Ventures' financial model.