OpenAI's first batch of investors, Kosra: Most AI startups are overvalued

On October 25th, it was reported that when artificial intelligence startup OpenAI transformed from a non-profit organization toCap profitAt the time of the company, Silicon Valley venture capitalist Vinod Khosla boldly took the first step. His subsidiary, Kosra Venture Capital, invested $50 million in OpenAI, which is its largest investment in 15 years since its establishment

On October 25th, it was reported that when artificial intelligence startup OpenAI transformed from a non-profit organization toCap profitAt the time of the company, Silicon Valley venture capitalist Vinod Khosla boldly took the first step. His subsidiary, Kosra Venture Capital, invested $50 million in OpenAI, which is its largest investment in 15 years since its establishment.

At least ten years ago, Kosla firmly believed that artificial intelligence is a revolutionary technology. But at the beginning of this year, Kosla saw a large number of investors suddenly wanting to support any artificial intelligence company they could reach.

I think most people will say after returning from Christmas vacation, 'We missed this boat (OpenAI). Now let's board a small boat in time and work hard at rowing,' Kosla said in an interview

But at that moment, Kosla decided to do something that had greatly benefited him throughout his long career: withdraw most of his investments in artificial intelligence and row in the opposite direction.

Kosla explained, "Most artificial intelligence startups have valuations in the hundreds or billions of dollars, and they self correct because there are more winners taking all phenomena than we realize. Investing in popular trends is a bad idea

Kosla, now 68 years old, founded Sun Microsystems in 1982 and played a key role in the early development of AMD and Zhanbo Networks. Before launching his own Kosra venture capital company in 2004, he worked at Kaipeng Huaying for 18 years. According to data compiled by Forbes magazine, Khosla had long bet on Affirm, DoorDash, and Instacart there, which helped his net assets soar to $6.2 billion.

Kosla is one of the few top venture capitalists actively investing in the current market, and he has also experienced other cycles of change that he believes will compete with artificial intelligence, such as social media, mobile devices, and personal computers.

If you go back to the 1980s, you will find thousands of software companies, but only a few big winners. Most people and most companies have lost everything. I think the same thing will happen in the field of artificial intelligence

Khosla stated that he is "making significant fundamental investments in the deep realm" rather than in artificial intelligence.

According to PitchBook, a research firm specializing in private equity and venture capital, although the total transaction volume of startups decreased by 31%, the financing of global artificial intelligence companies increased by 27% year-on-year in the third quarter.

Kosra declined to disclose which artificial intelligence companies he had abandoned, but he did not participate in recent rounds of fundraising by startups such as Anthropic (valued at $30 billion), Character.ai (valued at $5 billion), HuggingFace (valued at $4.5 billion), or Adept (valued at $1 billion).

Khosla cautiously pointed out that he is not avoiding all artificial intelligence startups. Kosra Venture Capital invested in the generative artificial intelligence tool Replit for software development earlier this year, with a financing valuation of $1.16 billion.

And OpenAI itself, it can be said that it benefits from the hype of artificial intelligence no less than any startup. According to Bloomberg, the company is in talks to sell some of its existing shares at a valuation of $86 billion.

Khosla declined to comment on the OpenAI stock sale and also declined to confirm or deny any reports related to valuation. But he did say that taking OpenAI as an example, he believes that when you see the company's growth rate being extremely fast, this hype is reasonable. It is reported that in just a few months, OpenAI's annual revenue has increased from $1 billion to $1.3 billion.

Kosla said, "Fundamentals of investing are different from being a herd of sheep. I am arrogant because I don't like to listen to others