Precursor Charles Hudson Be cautious, but don’t be too cautious. The venture capitalist attended an AI conference last month and has yet to make any new AI investments amid the current hype cycle.
He is one of many investors who have seen an inflection point in the sector so far, bringing in large amounts of capital, new founders and sometimes speedy, FOMO-driven deals. Historically, Hudson didn’t mind being absent. “When it comes to cryptocurrencies, for example, we were fine with almost zero,” he said. “I don’t think it’s okay for AI to answer zero. The question is where and how.”
“ChatGPT for X” companies are certainly interesting, but Hudson said he isn’t interested right now because they are just “wrapper” companies piecing together various existing companies. “I’d like to say, I may regret it, but my imagination didn’t give me the answer.” When asked how long it would take to build the tool, the entrepreneur said he answered “two weeks.”
Hudson’s interest in cryptocurrencies reflects what’s going on inside every generalist company right now. Are VCs backing net new startups, or letting existing portfolios guide AI through seemingly magical pivots or shared love and testing of low-flying? What about his AI companies in this space?
For example, Jason Lemkin said he has yet to invest in a pure AI startup. “I don’t know if I’m in a hurry, but I could be wrong,” he said. Most of the investor portfolio companies are adding AI components to their businesses. Second, Sapphire’s girlfriend, Cathy Gao, invests in late-stage startups and spends her time making investment decisions. In her recent conversation, she described an “arms race” between big companies launching large-scale products and startups integrating AI to differentiate themselves.
