Ben Horowitz, co-founder of a16z, says AI is rewriting the rules of building a tech company—money couldn't buy success before, but now with data and GPUs you can catch up fast, like Elon Musk did with big models. He thinks AI will widen inequality but is also 'the greatest opportunity equalizer ever' since everyone with a smartphone gets super-intelligence. Key holdings: Cursor (a coding tool that hit $1B revenue way faster than older rivals), NVIDIA (chip maker, same name from gaming to AI), and Coinbase (crypto exchange, a16z invested). He warns US policy mistakes could lose the AI lead.
Ben Horowitz, co-founder of a16z, discussed the future of the United States, the transformation driven by AI, and a16z's responsibilities on the podcast Invest Like the Best. Key takeaways: AI is reshaping the rules of company building and investment, with AI researchers earning annual salaries of u
Ben Horowitz, co-founder of a16z, discussed the future of the United States, the AI transformation, and a16z's responsibilities on the Invest Like the Best podcast. Core takeaways: AI is reshaping how companies are built and how investment rules work; AI researchers can earn annual salaries of up to $100 million, but this exacerbates social inequality. Horowitz believes policy missteps could destroy the U.S., and a16z has a duty to shape the nation's trajectory. He personally funds new technologies for the Las Vegas Police Department and reflects on the influences of Andy Grove, his father, and Nas. The biggest risk: the U.S. faces social challenges brought by AI, and the capital market's shortcoming lies in its failure to adequately address these changes.
Ben Horowitz believes that AI is fundamentally altering the underlying logic of building tech companies—something that has never happened in the past 30 years.
In the past, there was an iron law for software companies: you couldn't buy success with money. Horowitz cited a classic analogy—"one programmer's output equals that of 700 IBM employees in a morning." This meant that if a small team spent three years building a great product, Google couldn't hire 2,000 engineers to catch up. "That was a law of physics," he said.
But now, that has changed. "If you have data and enough GPUs, you can solve almost any problem." Horowitz cited Elon Musk as an example—by leveraging massive capital, excellent data center design, and a handful of smart engineers, he caught up with large model companies in an extremely short time. "That would have been impossible in the past."
The scale of market size is also shifting. Horowitz noted that in the past, you might assume a market was $50 billion; now it could be $5 trillion. But at the same time, the speed at which competitors catch up is unprecedented. "These are concepts we've never dealt with before."
The scarcity of AI researchers is another key change. Horowitz explained why someone would pay an annual salary of $100 million to an AI researcher: "What if there are only 40 such people in the world? Then the math changes." Because large model training has an alchemical nature—it cannot be learned in school, and only a handful of people have actually done it.
Cursor is a typical case of this new law. Horowitz pointed out that Cursor, as an IDE (Integrated Development Environment), surpassed $1 billion in revenue in an extremely short time, whereas the largest previous IDE took 12–15 years to reach the same scale.
Horowitz argues that AI will exacerbate inequality, yet it is simultaneously "the greatest opportunity equalizer ever."
He cites the "Kobe Bryant effect" to explain: in the past, basketball players could only earn money from live audiences, but television broadcasting turned LeBron James into a billionaire. The internet enables global distribution of products, and AI amplifies this further—whoever invents a more valuable product becomes wealthier.
However, Horowitz emphasizes that AI is fully democratized from day one. Most people already own smartphones, and now "superintelligence is in your pocket." Every child can have access to a super-advanced mentor and teacher. "I have never seen a greater opportunity equalizer than AI."
He recalls his father's teaching: "Life is unfair." Any system that attempts to correct unfairness ultimately only transfers power to those running it—Stalin, Ceaușescu, Pol Pot, and Mao Zedong are examples. "What you want is to give everyone a chance. It may not be as big as someone else's, but give me a chance to become something."
Regarding the notion of a "permanent underclass," Horowitz is skeptical. He points out that many in the cryptocurrency space started with very little capital, and because technology grows rapidly, even a small amount of capital can be amplified. He asks rhetorically: "ImageNet was 2012, ChatGPT was 2022. Where is the job destruction? Why are you so certain it will happen next year?"
Horowitz defines a16z’s mission as ensuring that the United States maintains technological leadership in the AI era, just as it did during the Industrial Revolution.
He quotes his mentor Andy Grove: “If you are the industry leader, the industry’s growth depends on you. It is your responsibility to expand the market; no one else will do it.”
Horowitz argues that the U.S. became what it is because it won the Industrial Revolution—thanks to great entrepreneurs like Henry Ford and Thomas Edison. “Technological leadership led to military leadership, economic leadership, and cultural dominance. Without those inventions and companies, we would not be the America we are today.”
Now AI represents a transformation of equal magnitude. “We will either be the leader and provider of this technology, or we will not. If we are not, we will not remain the economic superpower, military superpower, and cultural influence center we are today.”
a16z’s role is to ensure, across three dimensions—policy, capital, and support for builders—that the next generation of great companies comes from the U.S. or its allies.
The missing piece in the capital markets is another concern for Horowitz. He recalls going public at 18 months old with only $2 million in revenue. Today, companies need $500 million in revenue to go public. This means the private market must take on more responsibility—helping companies transition from $200–300 million in revenue to multi-product, multi-channel, multi-geography operations. “Most venture capital firms don’t provide that.”
On why a16z does not do private equity (PE), Horowitz is unequivocal. He believes AI creates a new PE opportunity—buying existing companies, optimizing them with AI, and adding value. But “this is completely opposite to our culture. We focus on creating new technology companies and believing in entrepreneurs. Price doesn’t even matter. PE focuses on entry price.” He adds: “I don’t want to enter an industry that makes money by optimizing existing things and cutting jobs.”
Horowitz draws a key insight from Bushido: culture is not a set of ideas, but a set of actions.
“If you define culture as ‘integrity,’ ‘doing the right thing,’ ‘we support each other’—that’s just a bunch of nonsense.” Culture must be defined by specific behaviors.
Examples of a16z’s specific behaviors:
Horowitz emphasizes that behavior is the carrier of culture. Ideas are merely goals; behavior is the path to achieving them.
Horowitz personally funded the Las Vegas Police Department to deploy new technology, resulting in a crime rate drop of over 50% and a nearly 75% reduction in police shootings.
His reason for choosing Las Vegas: The city is managed by an elected sheriff, not controlled by the mayor, and thus has never been swept up in the "defund the police" movement. Sheriff Kevin McMahill told him that the homicide clearance rate is 94% (the national average is below 60%, and Chicago's is just over 30%), because the community trusts the police.
The technologies Horowitz funded include: a drone program, Prepared 911, and Flock Safety AI cameras. "If a 911 call comes in or a gunshot is heard, a drone is deployed to the scene within 90 seconds, and the video is streamed live to every nearby officer's phone."
What surprised him most: Technology has reduced violent confrontations. In the past, stops based on mistaken descriptions led to half of all violent encounters. Now, AI cameras can precisely identify vehicles, allowing officers to safely deploy an entire squad. "Police work is inherently dangerous, but intelligence makes it far safer."
A side effect: The restoration of dignity in the policing profession. Las Vegas has the highest proportion of veterans in the country, and now "everyone wants to be a police officer."
| Position | Analyst View | Key Data |
|---|---|---|
| Cursor | Bullish (AI company growth model) | Revenue exceeds $1 billion, growth pace far surpasses previous largest IDE |
| NVIDIA | Neutral (mentioned as analogy) | Spanned multiple eras—gaming, cryptocurrency, AI—company name never changed |
| Coinbase | Bullish (a16z investment case) | Key investment in Fund III, deal facilitated through Nas |
| Databricks | Bullish (a16z investment case) | Key investment in Fund III |
| Slack | Bullish (a16z investment case) | Key investment in Fund I |
| Okta | Bullish (a16z investment case) | Key investment in Fund I |
| Stripe | Bullish (a16z investment case) | Key investment in Fund I |
| GitHub | Bullish (a16z investment case) | Key investment in Fund III |
| Lyft | Bullish (a16z investment case) | Key investment in Fund III |
| Skype | Bullish (a16z investment case) | Key investment in Fund I |
1. AI has changed the physical laws of building a company (Ben Horowitz) — In the past, you couldn't buy success with money; now, if you have data and enough GPUs, you can solve almost any problem. Elon Musk caught up with major AI model companies in an extremely short time by leveraging capital and data center design.
2. An annual salary of $100 million for AI researchers is reasonable (Ben Horowitz) — Because there may be only about 40 people in the world who truly know how to train large models. This skill has an "alchemical" nature and cannot be learned in school.
3. AI is "the greatest equalizer of opportunity in history" (Ben Horowitz) — Everyone with a smartphone can access superintelligence. At the same time, however, it will also amplify inequality, just as television made LeBron James a billionaire.
4. "Culture is not ideas, it's actions" (Ben Horowitz, inspired by Bushido) — Culture must be defined by specific behaviors: a $10 fine for every minute late to a meeting with an entrepreneur, a requirement to explain the reason when declining an investment, and never embarrassing an entrepreneur.
5. Policy mistakes are the biggest risk for the United States (Ben Horowitz) — The Biden administration once signed an executive order prohibiting the sale of GPUs without federal approval. "We are one step away from being excluded from the global chip game."
6. Technical solutions are far superior to policy solutions (Ben Horowitz) — During COVID, the policy of keeping people at home had severe side effects; inventing the vaccine was the real solution. The same applies to climate change — European emission reductions didn't work, but safe nuclear fission will.
7. The Las Vegas Police Department's technology deployment proves: intelligence makes everyone safer (Ben Horowitz) — Crime rates dropped by over 50%, and police shooting incidents fell by nearly 75%. Misidentification causes half of violent confrontations; AI cameras have eliminated this problem.
8. "Life is unfair" is the most important advice a father can give (Ben Horowitz) — Any system that tries to correct unfairness ultimately only transfers power to those who run the system. Stalin, Ceaușescu, Pol Pot, and Mao Zedong are all examples.