Do Revenue and Margins Still Matter in AI?

The a16z Show

a16z

Science, Innovation, Business, Entrepreneurship, Culture, Disruption, Software Eating The World, Technology

4.4 • 1.1K Ratings

🗓️ 18 December 2025

⏱️ 63 minutes

🔗️ Recording | iTunes | RSS

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Summary

In this episode, we’re sharing a conversation with David George, General Partner at a16z on the firm’s growth investing team. David has been involved in backing many of the defining companies of this era and is now investing behind a new wave of AI startups. This discussion goes deep into how the a16z growth practice operates: how the team hires and develops a “Yankees-level” culture, how investment decisions get made without traditional committees, and how they build long-term relationships with founders years before investing. A major focus is AI. David talks through how the team is investing across the stack and why he believes this period could create some of the largest companies ever built. He also walks through the models that guide his thinking: why markets often misprice consistent growth, what makes “pull” businesses so durable, why many important markets become winner-take-all, and what he’s learned from studying exceptional founders — especially the “technical terminators” he’s drawn to.

Transcript

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0:00.0	Our best performing fund in the history of the firm is actually a $1 billion fund.
0:05.3	If you overweight the fear of future theoretical competition, you can always talk yourself out of making an investment.
0:12.3	The number one way to measure a company is ultimately return on invested capital.
0:18.2	On the gross margin point today, I'll say this.
0:21.8	We give a little bit more of a pass than we used to.
0:24.4	At what point does the entry price do you think for Open AI become not a good use of dollars?
0:30.2	What I just don't understand that I would love to is flow.
0:33.4	Can you help me understand flow?
0:35.4	Because I think the world kind of scratched their head.
0:38.3	Why did it make sense to you when it didn't make sense to anyone else?
0:43.0	What happens when the usual rules of growth investing stop working and new ones take their place?
0:48.1	In this episode, David George joins Harry Stebbings from one of the most unfiltered conversations
0:52.5	he's had publicly about how he
0:54.3	evaluates companies, prices risk, and makes decisions in a market reshaped by AI.
0:59.4	They get into why fear of theoretical competition can kill great investments, how to think about
1:04.1	entry price when the best companies move faster than ever, and what David has learned from
1:08.1	back in category-defining winners. They also cover some of the spicier topics.
1:12.6	When does it make sense to pay up for an early stage AI company,
1:16.0	while certain errors of omission still sting,
1:18.4	the real logic behind flow,
1:20.2	and how to spot strength of strengths in a founder before the rest of the market sees it?
1:24.7	We're re-sharing this 20 BC episode because it's one of the clearest windows
	...

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