00:00Probably the question I get for you most commonly is about the lockup, what will happen.
00:04You know, I think a lot of the venture firms would say, well, we will redistribute to our LPs the
00:09stock and we expect lots of them to hold.
00:12But that would seem to make the retail holders important in what was like a very complex lockup.
00:18It wasn't straightforward.
00:19Yeah, look, I think this is a great step forward generally in how lockups are run.
00:23And I expect for IPOs going forward, this is probably going to be the way it's run.
00:28So Cerebris did something similar where you have the lockups come off gradually over time.
00:33And I think this is good.
00:34This is healthy.
00:35It allows, you know, the public market investors to be able to buy stock over time as opposed to, you
00:41know, at cliff events.
00:42For us, we're very long term thinkers.
00:44You know, we're happy shareholders of SpaceX.
00:47You know, we think very much about the long term.
00:50You know, obviously, what makes us so excited about the business is all of the things that can go right
00:56for SpaceX,
00:57all the optionality that you have.
00:58And so the way that we look at it is you start with a launch business.
01:02And in order to be successful as a space business, you have to reliably be able to get things to
01:06space.
01:07And so SpaceX has the infrastructure in an incredible way to be able to build applications on top.
01:14Obviously, Starlink is the first one.
01:16We expect that with Starship and V3, they've achieved some de-risking in terms of what they can bring up
01:23to space.
01:24Eventually, they'll have rapid reusability with multiple launches per day on Starship.
01:29But it's a feat of physics magnificence that they can take something that's the size of larger than a football
01:37field,
01:38send it up to space, grab it with chopsticks, and then reuse it again.
01:42They'll rapidly be able to do that.
01:44And that's going to enable all the applications that they want to build on top.
01:46It also now has a name, Starmind.
01:49Yes, exactly.
01:50As of last night and Elon Musk engaging with others on X, there are many out there that believe that
01:58the timeline that was presented in the prospectus for Orbital Data Center,
02:02SpaceX said as early as 2028, actually, we could see some pull forward on that, again, linked to the tracking
02:08of Starship.
02:10Where do you sit in what's realistic near term?
02:13Yeah, look, I think the biggest hurdle to cross is just rapid reusability of Starship.
02:19And I think, you know, there's a consistent theme with Elon's companies and certainly in SpaceX, which is physics has
02:26been de-risked.
02:27And so now it becomes an execution question.
02:29And so as you think about timelines, we feel like it is inevitable that they can achieve these milestones.
02:35It's just a question of how quickly and at what cost.
02:37And so if you have Starship that can rapidly, you know, reliably get things up and back to space,
02:43we think that's the major unlock for bringing compute to space.
02:47I know earlier you were talking about the $850 billion of CapEx for AI data centers on, you know, terrestrial
02:55grounds.
02:56Right now it's getting harder and harder to get data centers live on the ground here.
03:02I think it's a matter of time before we have it in space.
03:06I actually think I like to reframe it a little bit.
03:09I don't talk about it as orbital data centers.
03:11I talk about them as sort of airplane-sized GPU racks in space.
03:16So think of it as, you know, something like 72 GPUs up in space with big wings that are solar
03:23arrays that are kind of the size of a 737.
03:26And then you can have many, many of those in space.
03:28They've demonstrated that they can do this.
03:30They have 10,000 LEO satellites.
03:31So we feel like it's a matter of time and execution before they can do that.
03:36The physics has been de-risked, you know, to the point about how it's getting harder and harder to do
03:41this, you know, on the ground.
03:43I think at a minimum, orbital data centers will be incremental capacity that you can have in space on top
03:50of what we have on Earth.
03:52And I think there's a case that in the fullness of time, the economics actually get better than on the
03:57ground.
03:58David, the firm, Andreessen Horowitz, has been involved with Musk companies in different ways for about six years, in different
04:05ways being XXAI, the different financial transactions that took place.
04:09For you, how much was this IPO a referendum, essentially, on Musk himself?
04:17Or how central to the fate of this company do you see Elon being?
04:21Yeah, look, Elon is the centerpiece of all of those investment theses that we had in backing his companies.
04:28You know, he's been remarkably strategic in how he's put the companies together.
04:33And, you know, he has done very well by shareholders.
04:36He's taken care of shareholders.
04:37He takes a lot of pride in that.
04:39And we appreciate that as his partner.
04:41I think as it relates to, you know, the go forward, he's been very smart.
04:45He and Brett Johnson and the team at SpaceX have been very, very smart about capital allocation.
04:50Right.
04:50You know, when they have done acquisitions, they have been remarkably strategic in terms of putting things together first, you
04:56know, and putting X with XAI, which is very logical.
04:59And then, obviously, the fit of XAI and SpaceX together, you know, is undeniable.
05:04So, we expect that he'll continue to be very smart about capital allocation, take care of shareholders, and we appreciate
05:09that.
05:10Where do you stand, David, then, on the transaction that everyone continues to talk about, which is a future where
05:16Tesla merges with SpaceX?
05:17Is it rational to your mind?
05:19I go back to the things that he's done in the past.
05:23And the things that he's done in the past is he's decided to do acquisitions of his companies or mergers
05:29of his companies when there is very strong strategic alignment and it makes business sense.
05:34So, I wouldn't expect it to be any different going forward.
05:36However, there's this broader idea, if you extrapolate out from Elon Musk, that even at the growth stage, late private
05:45companies staying private for longer, late stage growth, that the investment thesis is still around the founder, the person at
05:52the top.
05:52I don't know whether you share that view of others, that even if you are talking in the tens, hundreds
05:58of billions of dollars of value, that value is assignable to an individual or a group of individuals.
06:04Yeah.
06:05Look, I think you can see reflections of this actually in the public markets.
06:08So, I think you can see this in Elon companies, certainly.
06:12I think you could see this, you know, with Apple under Steve Jobs.
06:16I think you could see it with Meta under Mark Zuckerberg.
06:19But certainly in the private markets, you know, this is a centerpiece of our investment theses when we're backing companies
06:26at any stage, at any size.
06:28I recently wrote a piece that basically said late stage venture, which is our asset class, is not about capital
06:36markets.
06:36It's about founders.
06:37Late stage venture is about late stage founders and enabling them to think long term, make big decisions and make
06:44big bets.
06:44And oftentimes they choose to do that in the private markets.
06:47And so, you know, our asset class that we play in, it's about $5 trillion in size.
06:52It's grown 10x over the last 10 years.
06:55It's larger than the Russell 2000.
06:57It's almost 20% as large as the NASDAQ.
06:59So, this has become a real asset class.
07:01And I think there's reasons that we should explore why it has evolved.
07:05Just give the asset class a title.
07:06What would you call it?
07:07Late stage venture.
07:08Late stage privates.
07:09But where the value accrues to the individual.
07:11Yeah, and where the value accrues.
07:13Yeah, and the centerpiece of the investment thesis is around the founder and the big decisions that the founder has
07:18to make.
07:18That's a lot of key man risk to model for.
07:21Yes, that's right.
07:21But I think the more important thing to model for is what can go right.
07:25Okay.
07:25You know, we always ask ourselves, you know, it's hard to imagine what could go right.
07:30And we even see this with mature companies.
07:32If you look back at the time when, you know, the iPhone came out, if you look at the 2009
07:37consensus analyst estimates for what Apple was going to do in 2009 for the next four years.
07:44And then fast forward four years, they actually beat those numbers by 3x.
07:48And that's probably the most covered company in the world.
07:50So, we like to think with a great founder, with a technology trend on its back, what can go right.
07:55And, you know, if you look at this last cycle that we've just gone through pre-AI, you know, this
08:00cycle of mobile phones, social, e-commerce, SaaS, cloud all put together, the big story is that that big trend
08:09added about $25 to $30 trillion of new market cap.
08:13And I happen to think that on this AI wave, on the back of this AI wave, the trend is
08:17going to be even bigger.
08:18You head a growth team that manages $22 billion across five funds.
08:23But if you think about it holistically, you're basically in the top 15 private companies by valuation, which would have
08:31included SpaceX before it went public.
08:34How are you now deploying capital, new capital into new companies, you know, with those existing investments in mind?
08:41Yeah, look, our whole thesis is we want to be involved in the best companies at the earliest stage possible
08:48and then continue to back them every step of the way as they need capital.
08:52And often that has been through late stage rounds in the private market.
08:56Because you have a newer fund, right, which you can deploy capital out of.
09:00Yeah, we do.
09:00Yeah, we have our LSV5, late stage venture fund five, as we call it.
09:05It's our fifth fund.
09:06It's about a $7 billion fund that we're deploying out of currently.
09:10And we see a ton of really interesting opportunities.
09:12So, you know, if you go back to the market that we're seeing and just look at our portfolio at
09:18A16Z and our latest fund, our portfolio dollar weighted is growing over 100% year over year.
09:25If you compare that to the size, similar size companies in the public markets, those companies are growing about 20
09:31% year over year.
09:32So we put a huge premium on very fast growth, great founders, market leadership, and sort of building on the
09:37back of the big trends.
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