20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
The Twenty Minute VC
4.4 • 637 Ratings
🗓️ 5 August 2024
⏱️ 73 minutes
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Summary
David Cahn is a Partner @ Sequoia Capital, one of the great venture firms of the last 5 decades. Before joining the Sequoia partnership, David led Coatue's venture business as a General Partner and COO where he led investments in Hugging Face, Runway and Supabase. David also joined the boards of Weights & Biases and Replit.
In Today's Episode with David Cahn We Discuss:
1. AI's $600BN Question:
- What is the $600BN question in AI today?
- Is it possible to believe "AI will change the world" and "Capex levels are too high" at the same time?
- Why do the cloud players have to act now? When does the Capex reduce for them?
- How does Meta not having a core cash cow in cloud change the way they can respond?
- Why is all the risk today being borne by the large incumbents? Why is that good for startups?
- How will we see Satya and Zuckerberg change their narrative towards their Capex spend to the public markets?
2. The Data Centre is the Most Important Asset:
- Why does David believe that data centre is the most important asset?
- What does he mean when he says "servers, steel and power" are the pillars of AI?
- What happens when the development of models outpaces the construction of data centres?
- Why does David believe no one will ever train a frontier model on the same data centre twice?
3. The Biggest Opportunities in AI:
- Why does David believe the biggest opportunity right now is in the build-out of data centres?
- What does the supply chain look like for the build-out of data centres? Who are the winners?
- Why does David believe the biggest opportunity in finance is in creating new debt instruments that will allow the largest incumbents in the world to move this data centre spend off balance sheet?
- Why does David believe that AI will drive more energy innovation than any policy has done?
4. The Secrets of Sequoia: Inside the Walls of the Greatest Firm in Venture:
- What does David and Sequoia believe is the one definition of success in venture?
- Who is the best at find companies in Sequoia? Who is the best at picking?
- Why does David believe conviction, not picking is the hardest part in venture?
- How do Sequoia want to shape and mould every investor in the firm?
20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI
Transcript
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| 0:00.0 | No one's ever going to train a frontier model on the same data center twice, because by the time |
| 0:05.3 | you've trained it, the GPUs will be outdated and the data center will be too small. The bigger |
| 0:09.4 | these models get, the more that scaling laws become the dominant thing. And so I think there's |
| 0:13.8 | a really good argument to you made that basically the data center is the most important asset. |
| 0:17.6 | I'll propose my own three things that I think are the three things that matter. |
| 0:21.3 | And I would summarize it as servers, steel, and power. The industrial revolution is just getting |
| 0:26.1 | started. This is 20 VC with me, Harry Stebbings. Now, I have done AI episodes with Sam Altman, |
| 0:31.6 | with Jan Lacoon, with Mistral founder Arthur Mench. But this episode today is the best I have ever done on AI, and I'm so |
| 0:39.1 | thrilled to welcome David Kahn, partner at Sequoia Capital, one of the greatest venture firms |
| 0:43.8 | of the last five decades. Before joining the Sequoia Partnership, David led Koto's venture business |
| 0:48.9 | as general partner and COO, where he led investments in Hugging Face, Runway and Superbase, and David also joined |
| 0:55.6 | the boards of weights and biases and Rapplied. As I said, this is the best episode I've ever |
| 1:00.5 | done on AI. You can watch the full show on YouTube by searching for 20VC. But before we dive in, |
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| 1:17.3 | Chances are the information reported it first. |
| 1:20.1 | The information is the trusted source for that important first look at actionable news |
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| 1:28.7 | proprietary data tools, and a spotlight on industry trends. With a subscription, you will join |
| 1:33.6 | an elite community that includes leaders from the top VC firms, CEOs from Fortune 500 companies, |
| 1:39.5 | and esteemed banking and investment professionals. In addition to must-read journalism in your |
| 1:43.9 | inbox every day, |
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