00:00:02
Speaker 1: Bloomberg Audio Studios. Podcasts. Radio. News.
00:00:13
Speaker 2: We have a choice in front of us. AI can either be more like a new renaissance of creativity and discovery, or more like a new industrial revolution of upheaval and disarray. As AI becomes more capable, people must remain at the center of AI decision-making. Alignment is not an abstract research question. It is the work of ensuring that these systems reliably remain under human control, reflect human values, and help people guide the next stages of development.
00:00:41
Speaker 3: OpenAI's Sam Altman speaking at the United Nations yesterday. This morning, President Trump posting that AI will be a big topic of conversation with China and that both countries want to, quote, leave it exactly where it is. Let's bring in an early investor of OpenAI, Vinod Khosla, founder of Khosla Ventures, a veteran in all things.
00:01:00
Speaker 1: Tech and investing.
00:01:01
Speaker 3: Vinod, great to have you in.
00:01:03
Speaker 1: And look, we have so much to discuss.
00:01:05
Speaker 3: Today, but if we could just start with that, because I have to say, you've been really prescient on this. As early as 2023, you were basically saying the U.S. can't slow down because we have this concern with what's happening in China. Your man, Sam Allman, has said he's open to the idea of maybe slowing things down for the name of safety. I wonder what conversations you've had with him and how that is developing at this moment.
00:01:26
Speaker 4: Without going into specific conversations, I might diverge a little.
00:01:30
Speaker 3: Sure.
00:01:30
Speaker 4: I think much more dangerous than AI is AI in the hands of our nation state adversaries. So we should be very clear that's way more dangerous when there's bad intent behind it than if it's on its own.
00:01:49
Speaker 1: So can I jump in on that?
00:01:50
Speaker 5: Because this seems to be where the problem is going to be going to 2030. So we're off on a good start with sort of the model front. But the power problem here, now China put about five times as much power as we did in 2025. They have this 60 gigawatt dam coming in, which is just a massive, impressive project. Are we going to win sort of on the models and maybe even the governance, but lose sort of in the power story eventually?
00:02:12
Speaker 4: Well, permitting and other delays are clearly slowing us down. But I do think it doesn't hurt the rate of model development. It does hurt the rate of deployment of models for inferencing. I'm less concerned about power in the 30s, early 30s and beyond, than I am today. Because the power demand was growing very, very slowly. In fact, slightly less than GDP the last 20 years. And it surprised everybody. It shouldn't have been a surprise. We invested in Commonwealth Fusion in 2018. The same year we invested in OpenAI. That was 2018. But it takes 10 years to develop a technology, and I'm pretty certain fusion will come out very well, and we have new sources. Super-hard geothermal like Mazama will come out very, very quickly. My bet is by 2028 and so. So there are alternatives. We have new investment in a company called Subcritical you'll hear more about soon. So, there are alternatives coming, but power plants take a while to build, and they respond slowly, so there is a short-term problem, and that'll be solved with pricing.
00:03:29
Speaker 3: Does that short-term problem, to Mike's point, though, make us all the more vulnerable for our adversaries to speed up ahead of us if what's growing in the United States, at least for now, is this nimbyism and this pushback to data centers getting constructed?
00:03:42
Speaker 4: Well, this is one of the places I agree with President Trump on, is we need to push ahead for development of AI and power. I think in the end, it will help the country tremendously. But there is a short-term mismatch.
00:03:55
Speaker 1: What do you do about that, Vinod?
00:03:57
Speaker 4: I think some states can take the lead in here and not be subject to as much nimbyism. They have less population density. I do think the data center providers should subsidize rates where they are. So that's very easy to do because they have room in the economics to do that.
00:04:18
Speaker 5: So I'm a big fan of this fourth turning concept. So every 60, 80 years, you get sort of a big pivot in the politics. Now, you have been talking about sort of taxing capital, and that's important with AI taking maybe more jobs, disrupting industry. Maybe there's a transition period where we do create more jobs, but then we have to go through this kind of disruptive period. Now, can you think about sort of how the political argument can be made to the populace that this is an appropriate thing? We just had tax cuts that seemed very popular on one side of the aisle. Then we have maybe more extreme views than the other that won't be adopted by the center.
00:04:51
Speaker 1: There's two entirely different questions.
00:04:54
Speaker 4: One is deployment, and I just talked about many sources of power, Commonwealth, Fusion, Rialto Fusion we are doing, we are doing Mazama for biogeothermal energy, a new distributed source of power coming online we'll hear soon about, I can't talk about yet.
00:05:14
Speaker 3: You're allowed to break news on this show if you want to know, just letting you know.
00:05:17
Speaker 1: We'll come back.
00:05:18
Speaker 5: Okay, okay.
00:05:18
Speaker 1: We'll come back.
00:05:20
Speaker 4: And there's lots of other things we can talk about. On the job side is where the real concern with AI is not so much data center, I believe. And I think we need to make sure people are protected. I think there's a fundamental difference. Some of the people think we should protect jobs. I think that's the wrong approach. We should protect the people who are impacted by jobs. That's a very different question. And since a long time, we've been favoring capital over labor. Labor has a high tax rate compared to capital, which gets preferential capital gains treatment. So we are redistributing money upwards. And people always talk about not redistributing money downwards. But in fact, we are doing it the other way. And I think levelizing all tax rates would be a really good idea. There's no difference between capital gains income or ordinary income. That would be beautiful.
00:06:15
Speaker 3: Vinod, when you wrote about this in the information, I believe, in your op-ed, one line stood out to me. You said, capitalism is by permission of democracy, and I prefer that capitalism not be revoked by the socialist tendencies emerging in our society among voters. These two things are happening at the same time, this great anxiety just generally plus AI creating more anxiety. How fearful are you that we could undergo a structural shift that impacts the very project of capitalism itself?
00:06:44
Speaker 1: Well, that's why I wrote my piece.
00:06:46
Speaker 4: I do think it can be impacted, and there is a trend towards socialism among the younger set. That's just well understood in all the surveys. But it can be reversed if we do something about it. It's pretty easy to take $ 400 billion that I talked about in my op-ed per year and be deficit neutral. I think that deficit neutral is key, and the money is key to help people who are displaced and tell them they will be taken care of. I think we will have the ability in the next 10 years to provide a great safety net behind people, and that's how we protect people without saying you can't change jobs or displace jobs.
00:07:26
Speaker 5: So you're speaking this well and you're laying it out factually. Do you see the rest of the venture capital world sort of getting this? Because I think it was a fumble here to not get ahead of this nimbyism that we're seeing in AI and the angst from this massive disruption. We all know but really don't understand how it works and how it will impact us personally. What else is going on sort of with the guys you talked to at your level?
00:07:45
Speaker 4: Well, I do think there's a fumble here. And I do think we didn't lead with the benefits of AI. For one or two dollars a month, we could provide every American with free primary care. We could provide every kid for one or two dollars a month with AI tutors for their children. personalized tutors, all this is trivial and will reduce downstream costs that we see in our society from lack of enough access to primary care, we get higher downstream healthcare costs. So there's lots of things to lead with that benefit people and they see the benefit without being mostly scared about their jobs. So I do think there's a fumble, but there is a way to address it. I suspect Just like President Trump took up the immigration platform last time and played it to the hill, even with sort of pretty ridiculous pitches like, immigrants are eating your pets. We can, and some presidential candidate, I hope, takes up a platform like this, like radically reinventing the basis of taxes.
00:08:54
Speaker 3: Do you see anyone like that, Vinod, out there? I mean, this political environment already is moving at a glacial pace. Do you see any political leaders you think are willing to take up the mantle? I....
00:09:04
Speaker 4: You know, we didn't think anybody would take up the immigration platform in the same way. So I think to be a differentiated candidate, you have to have something unique to offer. And I think what I proposed is a unique thing. I hope somebody takes it up for 2028.
00:09:20
Speaker 3: I wonder if it was a mistake then to this point you're talking about in this missed opportunity to really communicate what AI does. If it was a mistake to have these AI leaders from Dario to Sam to Elon say, okay, maybe there is a safety issue and we need to slow down, was that the wrong message to be sending to the public then?
00:09:38
Speaker 4: I do think that's the wrong message. I do think we have to focus on our competition with China. Whoever wins in AI, and I talked about this for a long, long time, is going to build the economic race and hence the influence race globally. Southeast Asia, Latin America, Africa adapt will be, the political philosophy will be a function of who wins the AI race. And economic power will reside with whoever wins the AI race. That's why it's so important, and that's why I think President Trump has it right.
00:10:16
Speaker 1: So I do hope we get behind this.
00:10:19
Speaker 5: I'll throw you a curveball. You gave me hope with energy. Quantum computing, that's sort of the next unknown. Another concept very hard for the main street to sort of understand. We can say partner with AI, can do all kinds of things.
00:10:31
Speaker 1: I've read the books.
00:10:33
Speaker 5: You see things others don't. You get pitched things others don't. This is super national security stuff. Where are you on quantum computing and should we expect developments there anytime soon?
00:10:41
Speaker 4: So I've looked at every quantum computing effort in this country for the last 10 years, turned down every single one.
00:10:50
Speaker 1: Only this year, I changed my mind.
00:10:53
Speaker 4: And so we made our first quantum computing investment after looking at a dozen of them. And I do think there's a radical breakthrough. Previously, the question was, which is the best quantum computing company? I've always looked at what's a good enough quantum computing company. to solve what's technically called the Shor's algorithm, which is very, very disruptive. I think that happens before 2030, which is very disruptive, and it's an area we can also beat China in. But there's other areas where we can beat China in. We are very dependent on minerals and materials. I think there's huge effort in this country to do that, to reintroduce those industries. We've seen AI really help in refining, in mining, so lots of hope in the minerals and metals. We have Mariana Minerals in that area. I'm very excited about what they can do. They're opening up shutdown copper mines in Utah today. This is climate week. Also other heavy things like cement. We have Fortera there that actually produces cement cheaper than high carbon emission cement. We have Herta that produces steel that's cheaper than high carbon emission steel. So when you don't defy the laws of economic gravity, you don't have to worry about the climate benefits. If the climate technologies are cheaper than their fossil competitors, That's the way to approach it.
00:12:25
Speaker 3: Vinod, we're just about out of time, but I'd remiss if I didn't just ask you quickly about another one of your investments, and I'm sure we'll talk more about it later. But look, you, again, I said you're a multi-decade veteran in this industry. Reports are that you're also in the middle of raising a fund. You've been doing this for a while. Why add NFL to that portfolio? Why buy the Seahawks among all the many things you're already doing?
00:12:47
Speaker 1: First, how often do you get to buy a Super Bowl winning team? Why not? Me, probably never. You, maybe once.
00:12:53
Speaker 4: I have great passion for football. It also is a great hedge to the AI world. I think live events, especially live sports, will not be impacted by AI. It's one of the areas that won't be impacted.
00:13:08
Speaker 1: Ticket prices agree. Vinod, thank you so much for joining us.
00:13:12
Speaker 3: It's been an absolute pleasure to have you. Whenever you're in New York, please stop by. Vinod Khosla, founder of, of course, Khosla Ventures.
Speaker 1: Bloomberg Audio Studios. Podcasts. Radio. News.
00:00:13
Speaker 2: We have a choice in front of us. AI can either be more like a new renaissance of creativity and discovery, or more like a new industrial revolution of upheaval and disarray. As AI becomes more capable, people must remain at the center of AI decision-making. Alignment is not an abstract research question. It is the work of ensuring that these systems reliably remain under human control, reflect human values, and help people guide the next stages of development.
00:00:41
Speaker 3: OpenAI's Sam Altman speaking at the United Nations yesterday. This morning, President Trump posting that AI will be a big topic of conversation with China and that both countries want to, quote, leave it exactly where it is. Let's bring in an early investor of OpenAI, Vinod Khosla, founder of Khosla Ventures, a veteran in all things.
00:01:00
Speaker 1: Tech and investing.
00:01:01
Speaker 3: Vinod, great to have you in.
00:01:03
Speaker 1: And look, we have so much to discuss.
00:01:05
Speaker 3: Today, but if we could just start with that, because I have to say, you've been really prescient on this. As early as 2023, you were basically saying the U.S. can't slow down because we have this concern with what's happening in China. Your man, Sam Allman, has said he's open to the idea of maybe slowing things down for the name of safety. I wonder what conversations you've had with him and how that is developing at this moment.
00:01:26
Speaker 4: Without going into specific conversations, I might diverge a little.
00:01:30
Speaker 3: Sure.
00:01:30
Speaker 4: I think much more dangerous than AI is AI in the hands of our nation state adversaries. So we should be very clear that's way more dangerous when there's bad intent behind it than if it's on its own.
00:01:49
Speaker 1: So can I jump in on that?
00:01:50
Speaker 5: Because this seems to be where the problem is going to be going to 2030. So we're off on a good start with sort of the model front. But the power problem here, now China put about five times as much power as we did in 2025. They have this 60 gigawatt dam coming in, which is just a massive, impressive project. Are we going to win sort of on the models and maybe even the governance, but lose sort of in the power story eventually?
00:02:12
Speaker 4: Well, permitting and other delays are clearly slowing us down. But I do think it doesn't hurt the rate of model development. It does hurt the rate of deployment of models for inferencing. I'm less concerned about power in the 30s, early 30s and beyond, than I am today. Because the power demand was growing very, very slowly. In fact, slightly less than GDP the last 20 years. And it surprised everybody. It shouldn't have been a surprise. We invested in Commonwealth Fusion in 2018. The same year we invested in OpenAI. That was 2018. But it takes 10 years to develop a technology, and I'm pretty certain fusion will come out very well, and we have new sources. Super-hard geothermal like Mazama will come out very, very quickly. My bet is by 2028 and so. So there are alternatives. We have new investment in a company called Subcritical you'll hear more about soon. So, there are alternatives coming, but power plants take a while to build, and they respond slowly, so there is a short-term problem, and that'll be solved with pricing.
00:03:29
Speaker 3: Does that short-term problem, to Mike's point, though, make us all the more vulnerable for our adversaries to speed up ahead of us if what's growing in the United States, at least for now, is this nimbyism and this pushback to data centers getting constructed?
00:03:42
Speaker 4: Well, this is one of the places I agree with President Trump on, is we need to push ahead for development of AI and power. I think in the end, it will help the country tremendously. But there is a short-term mismatch.
00:03:55
Speaker 1: What do you do about that, Vinod?
00:03:57
Speaker 4: I think some states can take the lead in here and not be subject to as much nimbyism. They have less population density. I do think the data center providers should subsidize rates where they are. So that's very easy to do because they have room in the economics to do that.
00:04:18
Speaker 5: So I'm a big fan of this fourth turning concept. So every 60, 80 years, you get sort of a big pivot in the politics. Now, you have been talking about sort of taxing capital, and that's important with AI taking maybe more jobs, disrupting industry. Maybe there's a transition period where we do create more jobs, but then we have to go through this kind of disruptive period. Now, can you think about sort of how the political argument can be made to the populace that this is an appropriate thing? We just had tax cuts that seemed very popular on one side of the aisle. Then we have maybe more extreme views than the other that won't be adopted by the center.
00:04:51
Speaker 1: There's two entirely different questions.
00:04:54
Speaker 4: One is deployment, and I just talked about many sources of power, Commonwealth, Fusion, Rialto Fusion we are doing, we are doing Mazama for biogeothermal energy, a new distributed source of power coming online we'll hear soon about, I can't talk about yet.
00:05:14
Speaker 3: You're allowed to break news on this show if you want to know, just letting you know.
00:05:17
Speaker 1: We'll come back.
00:05:18
Speaker 5: Okay, okay.
00:05:18
Speaker 1: We'll come back.
00:05:20
Speaker 4: And there's lots of other things we can talk about. On the job side is where the real concern with AI is not so much data center, I believe. And I think we need to make sure people are protected. I think there's a fundamental difference. Some of the people think we should protect jobs. I think that's the wrong approach. We should protect the people who are impacted by jobs. That's a very different question. And since a long time, we've been favoring capital over labor. Labor has a high tax rate compared to capital, which gets preferential capital gains treatment. So we are redistributing money upwards. And people always talk about not redistributing money downwards. But in fact, we are doing it the other way. And I think levelizing all tax rates would be a really good idea. There's no difference between capital gains income or ordinary income. That would be beautiful.
00:06:15
Speaker 3: Vinod, when you wrote about this in the information, I believe, in your op-ed, one line stood out to me. You said, capitalism is by permission of democracy, and I prefer that capitalism not be revoked by the socialist tendencies emerging in our society among voters. These two things are happening at the same time, this great anxiety just generally plus AI creating more anxiety. How fearful are you that we could undergo a structural shift that impacts the very project of capitalism itself?
00:06:44
Speaker 1: Well, that's why I wrote my piece.
00:06:46
Speaker 4: I do think it can be impacted, and there is a trend towards socialism among the younger set. That's just well understood in all the surveys. But it can be reversed if we do something about it. It's pretty easy to take $ 400 billion that I talked about in my op-ed per year and be deficit neutral. I think that deficit neutral is key, and the money is key to help people who are displaced and tell them they will be taken care of. I think we will have the ability in the next 10 years to provide a great safety net behind people, and that's how we protect people without saying you can't change jobs or displace jobs.
00:07:26
Speaker 5: So you're speaking this well and you're laying it out factually. Do you see the rest of the venture capital world sort of getting this? Because I think it was a fumble here to not get ahead of this nimbyism that we're seeing in AI and the angst from this massive disruption. We all know but really don't understand how it works and how it will impact us personally. What else is going on sort of with the guys you talked to at your level?
00:07:45
Speaker 4: Well, I do think there's a fumble here. And I do think we didn't lead with the benefits of AI. For one or two dollars a month, we could provide every American with free primary care. We could provide every kid for one or two dollars a month with AI tutors for their children. personalized tutors, all this is trivial and will reduce downstream costs that we see in our society from lack of enough access to primary care, we get higher downstream healthcare costs. So there's lots of things to lead with that benefit people and they see the benefit without being mostly scared about their jobs. So I do think there's a fumble, but there is a way to address it. I suspect Just like President Trump took up the immigration platform last time and played it to the hill, even with sort of pretty ridiculous pitches like, immigrants are eating your pets. We can, and some presidential candidate, I hope, takes up a platform like this, like radically reinventing the basis of taxes.
00:08:54
Speaker 3: Do you see anyone like that, Vinod, out there? I mean, this political environment already is moving at a glacial pace. Do you see any political leaders you think are willing to take up the mantle? I....
00:09:04
Speaker 4: You know, we didn't think anybody would take up the immigration platform in the same way. So I think to be a differentiated candidate, you have to have something unique to offer. And I think what I proposed is a unique thing. I hope somebody takes it up for 2028.
00:09:20
Speaker 3: I wonder if it was a mistake then to this point you're talking about in this missed opportunity to really communicate what AI does. If it was a mistake to have these AI leaders from Dario to Sam to Elon say, okay, maybe there is a safety issue and we need to slow down, was that the wrong message to be sending to the public then?
00:09:38
Speaker 4: I do think that's the wrong message. I do think we have to focus on our competition with China. Whoever wins in AI, and I talked about this for a long, long time, is going to build the economic race and hence the influence race globally. Southeast Asia, Latin America, Africa adapt will be, the political philosophy will be a function of who wins the AI race. And economic power will reside with whoever wins the AI race. That's why it's so important, and that's why I think President Trump has it right.
00:10:16
Speaker 1: So I do hope we get behind this.
00:10:19
Speaker 5: I'll throw you a curveball. You gave me hope with energy. Quantum computing, that's sort of the next unknown. Another concept very hard for the main street to sort of understand. We can say partner with AI, can do all kinds of things.
00:10:31
Speaker 1: I've read the books.
00:10:33
Speaker 5: You see things others don't. You get pitched things others don't. This is super national security stuff. Where are you on quantum computing and should we expect developments there anytime soon?
00:10:41
Speaker 4: So I've looked at every quantum computing effort in this country for the last 10 years, turned down every single one.
00:10:50
Speaker 1: Only this year, I changed my mind.
00:10:53
Speaker 4: And so we made our first quantum computing investment after looking at a dozen of them. And I do think there's a radical breakthrough. Previously, the question was, which is the best quantum computing company? I've always looked at what's a good enough quantum computing company. to solve what's technically called the Shor's algorithm, which is very, very disruptive. I think that happens before 2030, which is very disruptive, and it's an area we can also beat China in. But there's other areas where we can beat China in. We are very dependent on minerals and materials. I think there's huge effort in this country to do that, to reintroduce those industries. We've seen AI really help in refining, in mining, so lots of hope in the minerals and metals. We have Mariana Minerals in that area. I'm very excited about what they can do. They're opening up shutdown copper mines in Utah today. This is climate week. Also other heavy things like cement. We have Fortera there that actually produces cement cheaper than high carbon emission cement. We have Herta that produces steel that's cheaper than high carbon emission steel. So when you don't defy the laws of economic gravity, you don't have to worry about the climate benefits. If the climate technologies are cheaper than their fossil competitors, That's the way to approach it.
00:12:25
Speaker 3: Vinod, we're just about out of time, but I'd remiss if I didn't just ask you quickly about another one of your investments, and I'm sure we'll talk more about it later. But look, you, again, I said you're a multi-decade veteran in this industry. Reports are that you're also in the middle of raising a fund. You've been doing this for a while. Why add NFL to that portfolio? Why buy the Seahawks among all the many things you're already doing?
00:12:47
Speaker 1: First, how often do you get to buy a Super Bowl winning team? Why not? Me, probably never. You, maybe once.
00:12:53
Speaker 4: I have great passion for football. It also is a great hedge to the AI world. I think live events, especially live sports, will not be impacted by AI. It's one of the areas that won't be impacted.
00:13:08
Speaker 1: Ticket prices agree. Vinod, thank you so much for joining us.
00:13:12
Speaker 3: It's been an absolute pleasure to have you. Whenever you're in New York, please stop by. Vinod Khosla, founder of, of course, Khosla Ventures.
