Brendang hoodie He's 22 years old and runs a company worth billions of dollars. In August of this year, I met the young CEO in a glass conference room overlooking San Francisco Bay. While his colleagues are looking for their first jobs, Foudy is pursuing what he calls a “master plan” to transform the global labor market. His startup Mercor provides an AI-powered recruitment platform. The bot will examine resumes and even conduct interviews. Within the next five years, AI will be able to automate 50% of the tasks that people currently perform, Foody said. “It's going to be very exciting to watch it unfold,” he said. He thinks humans will be far more productive, able to cure cancer and land on Mars.
Mr. Foody doesn't have much of a traditional work history, but he is already an experienced entrepreneur. In middle school, he said, he ran a business that resold Safeway donuts to his classmates at a 400 percent markup. His mother, seeing his success in donut arbitrage, became worried that he might try selling illicit goods (drugs), so she sent him to a Catholic school. There he met Mercor's co-founders. He started a consulting business for online sneaker resellers in high school, and by the time he graduated, he had made hundreds of thousands of dollars in revenue. ChatGPT came out during my sophomore year at Georgetown University, and I immediately skipped school to build Mercor. When we met this summer, Melkor was worth $2 billion.
The AI boom has become synonymous with several giant companies such as OpenAI, Nvidia, and Anthropic. All are led by middle-aged men with long careers in Silicon Valley. But many of the most successful AI startups were founded by people old enough to drink. Unlike OpenAI and Anthropic, Mercor is already profitable. Meanwhile, Cursor, the wildly popular AI coding tool run by 25-year-old Michael Tuell, was recently valued at nearly $30 billion, about the same as United Airlines.
In many ways, Foody, Truell, and others like them represent the archetype of Silicon Valley's young founders over the years. They are very nerdy and greedy and ambitious. (Foudy's bio on X says he is “fascinated by the labor market” and his pronouns are listed as “could/could.”) But this group is reaching adulthood as the tech industry's goals and sense of self-worth reach existential heights. They dream of creating superintelligent bots that can dramatically extend our lifespans and perhaps even automate scientific discoveries themselves.
If they succeed, they could become even more powerful than the tech giants that precede them. From what I've seen from my week in San Francisco, if they fail, they're still going to enjoy the party while it lasts.
The promises The idea of remaking the world (and getting rich while doing so) drew a new wave of dropouts and recent graduates to San Francisco. After the release of ChatGPT, Rayan Krishnan abandoned his plans to pursue a Ph.D. Instead, he launched an AI startup. “It seemed like there were opportunities everywhere,” he told me. One afternoon during a trip to San Francisco, I met Krishnan, 24, CEO of Vals AI, in his converted brewery office in the SoMa neighborhood. Vals, which helps evaluate the performance of AI models on real-world tasks, has raised $5 million. Venture capitalists are “now indexing more companies started by young founders,” he said.
From what I heard during my travels, many tech investors believe that young people who have never spent time in an office are best positioned to build the future of AI. While 30-year-olds are likely already accustomed to the intricacies of workplace bureaucracy, those 10 years younger than them are starting with a blank slate. Foody told me a story about having dinner with Adam D'Angelo when Quora's CEO (and OpenAI board member) was considering investing in Mercor. Mr. D'Angelo asked Mr. Foudy about his work history, and the young founder admitted he had none. goodsaid D'Angelo, then cut the check. Melkor's investors also include Twitter co-founder Jack Dorsey, tech billionaire Peter Thiel and former Treasury Secretary Larry Summers.
To keep track of these ambitious Zuckerbergs, Bay Area venture capital firms are hosting elaborate dinners for young tech workers and hiring undergraduate scouts from elite universities to keep tabs on potential talent. The same week I met Hoodie and Krishnan, I attended a meetup at an all-female hacker house south of San Francisco. The girls, all college students, had spent the summer hosting a series of VC-funded events. At one gathering, a prominent company paid for a hibachi chef to cook dinner in its backyard. On the night I visited the house, the women were talking to three investors. Among the panelists was Liz Wessel, a partner at investment fund First Round Capital. Wessel said two-thirds of her portfolio is made up of “young” founders, a label she gives to founders under the age of 25. According to this calculation, even age 26 counts as old.
Young people in the industry are coming up with new ways to make a profit. Later in the trip, I spoke with Vatsalya Verma, 23, and Jasper Vida, 21, at a Victorian mansion in Lower Pacific Heights that I rented through Airbnb. Crushed empty cans were scattered around the front entrance. The night before, Verma and Vida threw a party for 200 people to celebrate the launch of a “private network” called V11. They described the network to me as an exclusive community of “the smartest friends from around the country.” Verma and Vida believe these friends will build Silicon Valley's next unicorn companies. They partner with early-stage venture funds, who “use our friendship to basically find deals,” Verma said.
Although an Airbnb served as the venue for the afterparty, the main event was held at a venue run by Silicon Valley Bank, which had a poker room set up in a defunct bank vault. If Silicon Valley Bank sounds familiar, that's because it dramatically failed in 2023, sparking the largest single-day run in American history.
WArrive in Silicon Valley Mint billionaires born around the time Facebook was launched are spectacular. But what was especially exciting to me was the closeness to these young founders. Like Foody, I was a sophomore in college when ChatGPT came out. I went to Stanford, where chatbots sparked a frenzy. My economics professor invited students to his home for a catered dinner with executives from Google and OpenAI. A waiter was on standby and served us champagne.
When I graduated last year and moved east, all of my co-workers seemed to stay in the Bay Area to work in AI. For a long time, I watched some of them become radicalized by the artificial general intelligence (AGI) hype. (“I think I’ll live over 1,000 years,” someone told me recently.) Many people are starting their own companies. At the beginning of the trip, I encountered a friend on the street waiting for his self-driving Waymo to take him to a vegan sushi restaurant. He had just raised millions of dollars for his AI startup and hired an adjunct professor from Stanford University to join his team, he told me.
A friend of mine from my hometown near Seattle also moved to San Francisco to join the AI scene. One helped start an all-female hacker house. Another company launched Friend, which sells AI-powered necklaces for $129. Friend made headlines earlier this year when it plastered over 10,000 posters on New York City subways promoting the virtues of human-AI friendship. (Never leave dirty dishes in the sinkread one of the ads. ) The company's 23-year-old CEO, Avi Schiffman, has been cast as a misanthropic tech founder who epitomizes the ills of Silicon Valley. I know Shiffman as a nerdy kid in high school who ran one of the world's most popular COVID-19 tracking websites. We often met at our local public library to brainstorm startup ideas (for example, OnlyFans for Stock Market Watch List). As time went on, we grew apart. I got my degree. He dropped out of Harvard University and rode his motorcycle along the California coast.
In August, Schiffman invited me to spend a few nights at his home in the Lower Haight. For someone building an AI companionship startup, Schiffman has a surprisingly offline life. Very inconveniently, he didn't have Wi-Fi. Instead, he spent much of his time painting. “This is life after AGI,” he told me. “This is what I call the religion of maximizing life.'' One day, Schiffman and I walked to a nearby park and marveled at a gorgeous San Francisco afternoon. “God carved the bay,” he said. Now the bay is carving God. At least that's what other twenty-somethings in San Francisco think.
On my final night, I ended up attending a sci-fi Barbie themed party at the Tesla showroom in San Francisco. The party was sponsored by a handful of investment firms and startups with names like CodeRabbit and Bubble Computing. “The atmosphere is unapologetically feminine and fun,” the invitation said, warning that anyone wearing a Patagonia vest would be turned away at the door. Although it wasn't an official Tesla event, the company was showing off its latest car technology. I arrived after leaving Patagonia and joined a small group for a quick break in the Cybertruck.
On the showroom floor, a long line snaked toward the bar, where people ordered James D'Amore cocktails. The cocktail is named after the employee who was famously fired in 2017 for writing a memo claiming that women in the company were less likely to hold technical or leadership positions due to inherent biological differences. (The organizers of this party were forcing a 50/50 balance of male and female guests, which left hundreds of men on the waiting list.)
In many ways, the scene was absurd. But Cybertruck rides aside, it didn't feel all that different from the parties I've hosted in my own cramped apartment. Music blared as people awkwardly exchanged small talk and sipped drinks. At the edge, some people were flirting and others were dancing. For a moment, I forgot that I was surrounded by young people who are at the heart of a growing industry that now supports the American economy. Then I spotted a Tesla humanoid robot standing on a pedestal with pink balloons lined up on either side.
IIt's hard to exaggerate How much money is flowing through the city? This summer, Meta offered the 24-year-old a $250 million compensation package. While in San Francisco, I heard rumors of people in their early 20s holed up in bars discussing tax evasion strategies.
The flood of money has created a culture of constant comparison. People do napkin calculations at the dinner table to figure out their friends' net worth based on the latest funding announcements, and worry about being turned down for a job at Anthropic or OpenAI. Those who are most successful become the targets of schadenfreude. Behind closed doors, people are debating whether Melkor will survive or fall. When the AI bubble bursts, which many say it will, it could disappear completely. So far, everything has a Gatsby feel to it.
Whatever happens, the country could be in for a shock. If progress in AI stalls and money dries up, the economy will be in turmoil. Advances in AI and a wave of large-scale automation will lead to economic disruption. Throughout the trip, people kept asking me if I knew the meme “Escape from the Permanent Underclass.” This means that a select few AI companies will soon be able to generate enormous economic output. Everyone else will be automated into oblivion. The only way to escape is to ride the AI boom. In other words, pack your bags and move to San Francisco. This meme is kind of a joke, but it's not. A select few in their 20s in the Bay Area are being paid astronomical amounts of money, while new graduates across the country are struggling to find jobs, perhaps because of AI. Yet, during my trip, people seemed to have a special interest in securing their future. Your only mission is to keep building and get rich.
In October, Melkor completed another funding round, valuing the company at $10 billion. This was 5x the value when I visited this summer. Now, Foody and his 22-year-old co-founder are the world's youngest self-made billionaires. I messaged Foody and asked him what it was like to be a millionaire. “Haha, I don't really think about that,” he argued. To celebrate, the startup rented a nightclub. Foody said more than 1,000 people showed up. they partied until 3am
