🚀 Letter from Silicon Valley
Technology hasn't felt this exciting since the mid 1990s (maybe longer.)
I’ve just come back from Silicon Valley, where I’ve been in the last week.
I have been going to the Bay Area for more than 25 years. I reckon I’ve clocked between 65 and 70 trips there, with thousands of conversations, around $20m of investments, and some good friends made.
In that quarter of a century, I’ve built an understanding of the Valley ecosystem: how it depends on key technology platforms to give it momentum, from semiconductors to PCs and then the Internet and beyond. I’ve personally witnessed the leap from Internet to social, mobile, and cloud. I’ve also understood the importance of a network of players: from academia to investors, to large firms and small, and of course, the founders themselves. It is a heterogeneity that gives the Valley the qualities of the crowded bazaar, fertile with the exchange of ideas.
Twenty-five years are long enough to make some friends and build relationships. So over the course of the week, I connected with some old and new friends. They included Vinod Khosla, one of the most successful venture capitalists in history; LinkedIn co-founder Reid Hoffman (who is, like Vinod, a backer of OpenAI), Dario Amodei from Anthropic, the AI firm, and Niall Ferguson. I also had several conversations with other technologists (who had built software I guarantee you have used), economists (one Nobel Laureate amongst them), genome builders, climate founders, and others.
I reckon that I had around 25 hours of conversations that week in the 27th anniversary of visiting the Bay Area. I’ve distilled them down to four key takeaways which I'll share in this letter.
Let’s go!
AI is a new platform
AI was on people’s minds. But discussions didn't have that gold rush fever of the dot-com bubble in the turn of the century, or the social bubble as Facebook and Twitter started to mature a decade ago. Nor was the odour of the Web3 hype that powered Miami’s supersized growth a couple of years ago. Like blockchain, the metaverse may one day yield useful applications, just not now.
Instead, I felt conversations that were a bit closer to the ones I heard in 1996 when the Internet was proving it could be a new computing platform. Back then, discussions were about infrastructure, hardware, and platforms. I was more likely to talk to someone with a new type of network platform, a new device, or enabling software. Real technology.
There was a sense that AI meant you could build all sorts of real, new, useful things now.
Everyone and their grandmother has used ChatGPT. And developers are flocking to build real applications on the underlying technologies. It’s LLMs that are fueling this moment to a large extent, but there is more than just LLMs driving AI.
There's a confidence there that has been missing for years. As mobile penetration peaked, phones became jammed with apps, and ennui enveloped social networks, Silicon Valley hunted for the next big thing. Many thought it might be blockchain. Mark Zuckerberg thought it would be metaverse.
We know now it will be AI. And Silicon Valley is never more vibrant than when there is a new platform.
My takeaway: This new platform will lead to a Cambrian outpouring of new services and products.