GPU clusters, venture trends, and the robotics startups we’re most excited about | E1977

Jason and Alex kick off the show (0s)

• Alex and Jason introduce the show and their upcoming lineup of episodes, including interviews, the Liquidity Pod, and AI with Sunny.
• They express gratitude to their sales team for enabling them to continue investing in the show and producing Weekend Startups.
• A venture capital firm is building its own AI GPU cluster.
• Discussion on the costs and services associated with building a GPU cluster.
• Overview of venture capital trends from the second quarter, including surprising data on valuations.
• Jal's favorite thing: remote work arbitrage.
• Transition into a discussion on robots and the Twist 500, with a mention of relevant videos.
• Spotify has invited Weekend Startups to be part of their video podcast beta program.
• Jason expresses his dislike for Spotify's proprietary video format and urges them to respect RSS standards.
• Explanation of the importance of RSS (real simple syndication) in podcasting and its role in ensuring simplicity and accessibility.

Venture capital firms building AI GPU clusters and a16z's project (4m22s)

• 16z, a venture capital firm, has launched the Oxygen project, led by Daniel Gross, to provide startups with access to 10,000 GPUs at a low cost.
• This initiative aims to support startups by allowing them to experiment and iterate on their products without significant upfront costs, potentially revolutionizing the startup landscape.
• The project requires a substantial capital investment, with each GPU costing around $25,000, but the source of funding is unclear.
• GPU clusters can serve marketing and PR purposes, enabling startups to showcase their technology and attract investors.

Tech Domains - Apply for the Jam Session with JCal contest today (10m9s)

• Founders with less than $2 million in funding and an awesome .tech domain name can apply for the Jam Session with JCal contest.
• Winners will get to pitch their startup on the Startups podcast and receive unfiltered feedback from JCal.
• Notable startups that use .tech domains include Rabbit, Aurora, 1x, and Founder Fridays.
• GPU clusters are becoming increasingly popular for machine learning and artificial intelligence applications.
• They offer significant computational power and can handle large amounts of data.
• GPU clusters are being used in a variety of industries, including healthcare, finance, and manufacturing.
• Venture capitalists are increasingly investing in robotics startups.
• Robotics startups are developing new technologies that are making robots more versatile and affordable.
• Some of the most exciting robotics startups include:
  • Boston Dynamics: Developing humanoid robots that can perform complex tasks.
  • Agility Robotics: Developing bipedal robots that can walk and run.
  • ANYbotics: Developing quadrupedal robots that can navigate rough terrain.
  • OpenAI: Developing artificial intelligence software that can control robots.

Where this leads the industry (11m13s)

• Andreessen Horowitz (a16z) has invested heavily in GPU clusters, spending $25-30 million annually on infrastructure, securing lead or big checks in AI deals like Helia, Decagon, MRAW, Valor Labs, and XI. However, concerns about market oversaturation, reduced margins, and competition from open-source software loom.
• Goldman Sachs reports an easing chip shortage, potentially shortening the lifespan of current GPU clusters, while their significant depreciation challenges cost justification over a 10-year horizon.
• YC's investment strategy emphasizes scale, aiming to invest in 100 startups per year, with potential growth to 200. Seed-stage investments offer higher average returns compared to Series A, making them more attractive. YC's model resembles an index fund for seed-stage investments, providing predictability and stability for investors.
• Index investing in seed-stage startups, pioneered by YC, presents a compelling alternative to traditional venture capital funds. YC's strategy of hiring successful founders as partners brings valuable experience and industry knowledge to the firm.
• Robotics startups often provide employees with a small salary and a significant share of the company's profits (carry) as compensation. Initial funding from these salaries supports building the company's HR, GPU clusters, marketing, and PR departments.

Michael Ovitz's influence and venture capitalists' work ethic (20m21s)

• Andreessen Horowitz (a16z) prefers to hire "Young Guns" who are new to the venture capital industry and are passionate about their work, willing to put in extra effort, and not motivated by financial incentives.
• a16z believes that building a strong network, becoming efficient in your work, and setting clear and achievable goals are important for career success.
• The "Bird by Bird" approach of breaking down large projects into smaller steps and focusing on consistent improvements rather than perfectionism can help achieve progress.
• Publishing something for the first time can be difficult but becomes easier with repetition.
• The website cautiousoptimism.sub.com is mentioned.
• The speaker advises against offering things for free and emphasizes the importance of a strong sales team.
• The speaker is excited about GPU clusters.
• GPU clusters are becoming more accessible and affordable.
• This is enabling new applications and research in areas such as artificial intelligence, machine learning, and data science.
• The speaker discusses venture trends in the robotics industry.
• There is a lot of interest in robotics startups.
• Some of the most exciting robotics startups are working on:
  • Autonomous vehicles
  • Delivery robots
  • Collaborative robots
  • Medical robots
  • Space robots

Vanta - Get $1000 off your SOC 2 (30m10s)

• Vanta is a company that helps businesses achieve SOC 2 compliance.
• SOC 2 compliance is important for businesses that store customer data in the cloud.
• Vanta can help businesses get and renew their SOC 2 compliance quickly and easily.
• Vanta can save businesses hundreds of hours of work and up to 85% on compliance costs.
• Vanta also automates up to 90% compliance for GDPR, HIPAA, and more.

Q2 venture capital funding trends and strategies for struggling companies (31m2s)

• Venture Capital (VC) funding increased by 16% in Q2 2023 compared to Q1 and by 12% year-over-year, reaching a total of $79 billion invested globally.
• Despite this uptick, funding levels have not yet returned to pre-market collapse levels.
• The success rate for accelerator companies raising money has significantly decreased during the market downturn, with only two out of seven companies securing funding during one class.
• VCs are now dedicating more time to new deals, shifting from 10% to 50% of their time on new investments.
• To make thoughtful investment decisions, VCs are slowing down the pace of new meetings and focusing on the most promising applicants.
• Startups can be categorized into three groups: those with rapidly growing revenue, those that are not tripling revenue year-over-year, and those that are winding down.
• Support should be provided to startups in the second group to help them accelerate growth or achieve profitability.
• Time should be spent with founders of startups that are winding down to assist them through the process and potentially support their future endeavors.
• Second-time founders often achieve success due to their experience and determination.
• GPUs are becoming increasingly important for machine learning and artificial intelligence.
• GPU clusters are becoming more popular as a way to scale up GPU computing power.
• GPU clusters can be used for a variety of tasks, including training machine learning models, rendering 3D graphics, and video editing.
• The venture capital landscape is changing, with more money being invested in early-stage startups.
• Investors are looking for startups that are solving real problems and have a clear path to profitability.
• Robotics startups are becoming increasingly popular with investors, as they have the potential to revolutionize a wide range of industries.
• OpenPhone: A cloud-based phone system that allows businesses to manage all of their communications from a single platform.
• Twist: A collaborative writing platform that makes it easy for teams to work together on documents.
• Cohere: A natural language processing platform that can be used to build a variety of applications, such as chatbots and virtual assistants.
• Stability AI: A machine learning company that is developing new ways to generate images and videos.
• Jasper: An AI-powered writing assistant that can help you write better content faster.

Global AI funding trends and current state of venture capital (38m23s)

• The speaker suggests various strategies to support robotics startups, including introductions to top-tier venture capitalists, focusing on experiments with the highest potential, and organizing retreats for startups facing challenges.
• The speaker highlights the significant increase in global AI funding, driven by large funding rounds and the emergence of GPU clusters that enable the development of AI applications requiring substantial computational power.
• Despite concerns about market challenges, strong valuations indicate a favorable market for startups, especially those with AI enthusiasm, but high early-stage and late-stage valuations may make it difficult for companies without product-market fit to return investor funds.
• The speaker expresses concern about the sustainability of the current venture capital market due to high entry prices and difficulty in returning funds, emphasizing the importance of entry price and warning that many firms may not survive the downturn.
• The speaker criticizes the lack of urgency, complacency, and transparency in the VC industry, while emphasizing the importance of accountability and dedicating extra time and effort to achieve better results.

Teleoperation robots, remote work arbitrage, and ethical considerations (57m39s)

• The Twist 500 is a list of up to 500 private market companies that are considered interesting, innovative, or fun to talk about.
• Remote work arbitrage involves individuals working multiple remote jobs simultaneously, often using techniques to manage their time and avoid detection.
• Remote work arbitrage can be seen as unethical and may lead to legal issues, but it also highlights the entrepreneurial spirit of individuals who are able to successfully manage multiple jobs.
• Remote work arbitrage involves hiring virtual assistants from countries with lower labor costs for tasks that are typically done by operations personnel in the US.
• Startups are becoming more efficient and achieving higher ARR per FTE, with examples like Podcast AI doing more with fewer people.
• Remote work arbitrage is a trend that allows startups to access talent from anywhere in the world.
• The rise of AI assistants like Athena is replacing the need for traditional jack-of-all-trades roles.
• The RTO (return to office) movement requires employees to be physically present in expensive cities like San Francisco to earn high salaries, limiting broader accessibility to those opportunities.

Robotics companies' funding, the future of AI and robotics, and the TWIST500 (1h11m51s)

• Ten robotics startups, including Figure, Bright Machines, Agility Robotics, and Bear Robotics, have collectively raised $2 billion in funding.
• Humanoid robotics startups like Be Robotics, 1X Technologies, Aponic, Minty Robotics, and Oversonic Robotics are emerging with increasingly sophisticated robots featuring improved dexterity, speed, and versatility.
• The integration of AI enhances the capabilities of robots, making them more efficient and versatile, with the potential to revolutionize industries by automating tasks currently performed by humans.
• Humanoid robots are designed with a human form factor to increase their general applicability, as the world is designed for humans, allowing them to perform a wide range of jobs.
• Successful humanoid robots and large language models (LLMs) could significantly change the world by creating versatile home assistants that can understand and execute complex instructions.
• Founder Fridays and Twist 500 are upcoming events focused on showcasing innovative startups in various industries.
• Bianca is launching a multiple times a week newsletter discussing the show and related topics.
• Jason finds Podcast AI, which can generate podcast topics based on keywords, to be the most interesting AI company he has backed this year due to their impressive product development speed.
• Jenny AI assists academics with writing and citation and is used by institutions like Stanford, Penn, and Oxford.
• AI laptops are relatively new and can be used for running video models, but it's more cost-effective to use cloud-based GPU clusters for complex AI tasks, with providers like AWS and Google offering free GPU clusters for research and development purposes.