Gurley says hyper-competition with every AI coding player having $400M can reduce venture returns despite market enthusiasm.
“Having crazy money in the market is not necessarily consistent with creating positive return for your venture capital portfolio.”
Gurley says Adept-style acqui-hires with license deals cannot generate venture returns after raising $415 million.
“if you're a venture capitalist and every one of your deals turned into one of these weird human acqui hires with a licensed deal back, you're not going to generate a return for your portfolio.”
Gurley notes Adept raised $415M and argues such acqui-hire structures cannot generate portfolio returns for VCs.
“I mean, we need to be realistic. Like if you're a venture capitalist and every one of your deals turned into one of these weird human acqui hires with a licensed deal back, you're not going to generate a return for your portfolio. Like, it's best case, you're this company had raised $415,000,000”
Gurley reports NVIDIA promised to buy any unsold CoreWeave capacity, calling this commitment unusual and debt-enabling.
“That is very unusual. That's not the same as making an investment. That could easily help CoreWeave with their debtors and and getting more debt financing.”
Gurley warns investors cannot assess real CoreWeave demand since NVIDIA's backstop obscures slowdown signals.
“And if you just said to me, what would you look for to see if we've, you know, kind of reached a point where things are slowing a little bit?”
Gurley says the current AI bubble is unlike anything he has seen in his career including previous tech waves.
“Yes. And in a way, I've, I mean, I've seen a lot of waves and a lot of bubbles, and this is like nothing I've ever seen. Yeah. Like when Amazon was losing a billion”
Gurley says venture funding is now completely preemptive with investors forcing money on companies.
“So the the the the days when the company would run out of money or get close to running out and decide, oh, we're gonna go raise now is over. Like, the the it's preemptive.”