Why $1B Exits are Dead

Anthropic and OpenAI are adding more revenue per month than Meta, Google, or Microsoft. And I wouldn't be surprised if the combination of those two companies is doing 200,000,000,000 of revenue run rate. Between 2020 and 2024, top 1% exit started at $10,000,000,000. We updated those numbers in February this year $20,000,000,000. We just updated them yesterday. It's now at $32,000,000,000. So we've 10 x'd Yeah. Over the space of kind of twenty four months. When the models get really good and the products that get built around them get really good, you see this take off in usage happening. Are we in an AI bubble? I feel pretty confident saying that we're not in a bubble right now. The one thing that could shift that would be Over the last decade, venture capital adapted to companies becoming larger and staying private longer. But AI may be accelerating that trend dramatically. The Frontier Labs are already adding revenue at a pace comparable to the largest software companies in the world, despite being early in real enterprise adoption. At the same time, the infrastructure supporting this shift, compute, power, data centers, and talent, is increasingly constrained. That combination is forcing investors to rethink some of their core assumptions around scale, defensibility, value capture, and even how venture capital itself works. A sixteen z's David George and VenCap CIO David Clark discuss AI, venture capital, and the next generation of massive technology companies. I can't think of a time in my career where I have changed my mind about things at a faster clip, which is good, but it's also humbling. Right? Two big areas are scale and value capture. So on the scale side, the world kinda changed in November as it relates to our business, and I think sort of productivity in the workforce. The way that we thought about much of the AI work that was happening before that was a sort of, like, nebulous promise in the enterprise, but we probably were contextualizing it around things like the cloud and software companies and productivity enhancement. And then on the consumer side, you could think about AI companies like a consumer business, how many users they have Yeah. And what the price is and how big that can get. And by the way, I think that's gonna be much bigger than people expect too, which we could talk about. But as of November, I think all of our prior shifted around what is actually gonna happen in the enterprise. But just maybe to contextualize what's happened since then, basically, Anthropic and OpenAI are adding more revenue per month than Meta, Google, or Microsoft. They are already at that scale of revenue getting added, and actual diffusion of this technology into the real economy is tiny. It's, like, less than 5%. Yeah. Now within coding and in tech forward companies, yes, it's much more advanced. But as it relates to every other function in the enterprise, full sort of utilization …