The a16z Show

David George × Sarah Wang × Alex Immerman × Santiago Rodriguez

AI’s rally is being driven by earnings rather than multiple expansion, with the S&P 500 below 20 times earnings while growing about 15%.Capex is projected to rise from $416 billion in 2025 to about $780 billion in 2026 and exceed $1 trillion annually from 2027; enterprise adoption remains concentrated in pilots, with inference-cost declines and workflow deployment as catalysts.

Jen Kha × David George × Aram Verdiyan

AI is making capital itself compound advantage, pushing venture’s power law beyond prior tech cycles as compute improves products and inference demand remains unlimited.Only 20 of 3,000 US VC firms produced consistent 3x net returns over two decades, supporting concentrated LP portfolios and 5–10%+ late-stage sizing in category-defining companies.Meanwhile, traction is harder to parse and pre-ChatGPT software LBOs face repricing, leaving diffusion, liquidity, and power access as key risks and catalysts.

David George × Gavin Baker

AI demand accelerated through July and August, with usage concentrated among possibly sub-10 million heavy users and no leader identifying a worsening quantitative metric.Nebius suggests nine-to-ten-month paybacks on $50B-per-gigawatt builds, supported by 50-60% customer prepayments; undersupply through ’28 could lift token prices, while shifting capacity to training could cut lab revenue from $480B to $120B.

Ben Horowitz × Martin Casado × Raghu Raghuram × Erik Torenberg

a16z’s new AI infrastructure fund captures a founder migration into hardware, with top-founder hardware pitches rising from roughly 3–5% to “north of 20% or 30%.”Hyperscaler capex, booked-out GPUs and resale premiums support opportunities across chips, power and cooling, while grid shortages, regulation and uncontrolled agent spending remain constraints.

Martin Casado × Sarah Wang × Matt Bornstein

Cursor’s interface-over-model thesis challenged Microsoft’s Copilot despite its VS Code, OpenAI weights, 100 million developers, and enterprise distribution.Rejecting a $25–50M ARR self-serve ceiling, it built enterprise sales reaching over 50% of the Fortune 500, where margins matter; its IDE-to-agent-to-model shift still faces model releases such as Opus 4.5 and an unnamed acquirer’s potential compute-distribution-data fit.

Elena Burger × Angela Strange × Gabriel Vasquez

AI is reversing a16z’s international sourcing flow toward Silicon Valley, where borderless founders can compound differentiated talent, government-backed validation, and enterprise access across countries.With 40% of a16z’s investments in international founders, the test is whether diaspora networks and 3–6 months of Bay Area immersion create durable customer and talent advantages.

David George × David Clark

OpenAI and Anthropic now add more monthly revenue than Meta, Google, or Microsoft despite AI diffusion below 5%, making “in the token path” George’s rule for application winners.Five frontier labs could lower token prices, but Chinese models reportedly offer 80% of frontier capability at 10% of the cost; scarce capacity lasts through early 2029, with algorithmic breakthroughs the key reversal risk.

Jen Kha × David George

AI-native companies grow more than 2.5x faster, with top performers reaching 693% year-over-year growth and $500,000-$1 million of ARR per employee.Engagement and operating evidence includes Navan handling 50% of travel interactions with AI and expanding gross margins 20 percentage points, while enterprise change management remains the key execution risk.

Jen Kha × David George

AI infrastructure is becoming a utility layer: big-tech capex annualizes near $400 billion, model-access costs fell more than 99% in two years, and ChatGPT reached 365 billion searches in two years.Energy is likely the next five-year bottleneck, followed by cooling, while application durability depends on 90% or more retention, easy acquisition, and workflow depth rather than model access alone.

Alex Rampell × Jen Kha × David Haber × Anish Acharya

AI is becoming a full software cycle atop smartphones and cloud infrastructure, with roughly 15% of adults globally using ChatGPT weekly.Greenfield systems and labor automation offer the cleanest openings, while Salient’s 50% collection lift favors revenue creation over savings-only pitches.Durability depends on owning workflows and private outcome data as models commoditize and incumbents monetize installed distribution.