Reid Hoffman on AI’s new tune, Davos, and the need for CEO courage

0:01People like to have a cause celeb and kind of virtue signaling of I'm really good and that That AI thing is bad. It's the greatest human amplifier for quality of life that's been built in human history. You're saying, go somewhere else. It's like the Bernie Sanders stupid. No data centers here. Build them all in Canada. Have Canada get all the economic benefit. Let's make sure we Americans don't. It's crazy thinking. It's stupid thinking. You have responsibilities. They're commensurate with your power. And so you need to speak up. I myself get regularly called out by the White House. we need to be speaking up and we need to be figuring out how to solve our problems together.

0:49That's Reid Hoffman, of course, founding host of Masters of Scale, co-founder of LinkedIn and Tech Investor. I've had Reid as a guest on the show many times. Rarely has he been this animated with the World Economic Forum in Davos as a backdrop. Reid and I talk about the latest in AI, as well as the leadership challenges and opportunities facing the business community. We talk about music and medical care, how the prospect of a tech bubble is and isn't impacting his own investing right now. And we dip into the roadblocks posed by political headwinds from ICE activities to Denmark. It's been a busy start to 2026, so let's get to it.

1:29I'm Bob Safian, and this is Rapid Response.

1:38I'm Bob Safian. I'm here with Reid Hoffman, co-founder of LinkedIn, partner at Greylock, founding host of Master Scale, co-host of Podcast Possible. Reid, great as always to chat with you. It is always great to see you, Bob. I have to start by thanking you. You sent me a holiday gift of Christmas music, an album of all AI-generated songs. Here it is. Your own creations. What sparked that project? We're actually going to put it up on Spotify because we got such positive responses to it. It was a couple of things. So one is when you look at AI and the kind of super agency of increasing human expression, whether it's text, picture, video, music is another really central thing.

2:24And, you know, me as a startup guy, I was thinking, is there startup opportunities here? Is there something that could be done? And I haven't yet figured any of that out. I've talked to a number of different interesting people. But what I did realize is I could just use the tools to start showing that expression, that expansion of the scope of possibility amongst our imagination. That's now with AI massively extended. And I was like, oh, I could use music, even though I am not a composer of music, I am not a player of music, and I could use it to create something that's human expressive. And I said, oh, that's a good idea.

2:57What should I do with that? Most Christmas music, there's maybe like five Christmas songs I'd want to listen to once or twice the season, and that's it. And most of it, small C's, happy, happy Christmas, best time of the year. And you're like, oh my God, it's mall music, it's Muzak, et cetera, especially as it's massively overplayed. How could I use being affectionate to the holiday, but creating the kind of music that we would want as part of kind of human gesture, you know, days from now, maybe even before this podcast airs, we will have it up on Spotify. We recently had Harvey Mason Jr., the head of the Recording Academy on the show, to talk about the Grammys.

3:36And he was surprisingly open to AI-generated music. Are you hoping for a Grammy in your future? I'm not sure that I would ever, ever even potentially be within, like, you know, the same planet as a Grammy. Harvey, I've had an email exchange with. I actually sent them the record so that they'd get a little exposure to it. But I do think that one of the things that people have to get through is like, look, not like try to retroactively try to hold on to the past. Part of art and everything else is how do we create the future? If you have ideas and imagination, the tool set for creating stuff completely changes.

4:12So, for example, lots of people can code who didn't know how to code before because of coding tools. Do engineers go, oh, down with these evil tools because we should have a monopoly on our own coding? It's like, no. It changes the landscape. If you can't afford a lawyer and you're looking at a lease, you can use the AI tools. All of these things are part of the human world that has opened us to it. And music and creativity is some of it. One of the things I told actually a multi-grammarier winner, I said, look, let me tell you two things. The first thing is going to terrify you. And the second thing I hope will make you insanely optimistic and curious.

4:48The first thing is I can create a knockoff of your music and song today in fairly simple prompting and go, here it goes, and here it is. And you go, shit, that's kind of my voice, and that's my kind of song, and I'm known for that. And you go, right. What makes the AI tool interesting is there is an award-winning global architect in Japan. The way this architect creates his initial thing, when someone says, hey, I want to hire you for a building. please come give me some ideas. Literally, we'll go into ChatGPT and, you know, actually I think Dolly and Midjourney and I think probably is using Nano Banana now and say, create me 20 things in my style, right?

5:33With different kind of prompts. And then it goes, okay, three, seven, and 15 are really good. Let's iterate those some, let's pack you up, let's bring them, right? And that's kind of like, it's the my style. It's actually massively helpful. And the same thing is true for music. So when I was talking, it's like, look, You can now create stuff in your style and you can create hours of interesting music in minutes, right? And then you can go, well, okay, this song's not so good. Hey, actually this bit, seconds 32 through 57 are really good. We're going to pull that out and we use that as an anchor for the next genius thing that we're doing.

6:11And that's part of the creativity that this increases. And so, you know, part of Super Agency, the book, as you know, is I'm trying to not just tell, but show. I'm going to do another minimum six records this year and maybe a lot more because it's given me all kinds of different ideas about what kinds of things could create the light and sharing and community within the human experience. And, you know, that's a great use of music. You know, I started with the music because I wanted to hear your spirit and have some good news to start. Because the early part of 2026, like, has been quite a hit.

6:52I mean, between vaccines in Venezuela and Minneapolis and Greenland. Like, how are you feeling these days? Well, it's roughly, can we hold our shit together to get the amazing thing that's coming with AI? because obviously the political world's going to hell in a handbasket. All these kind of really terrible, terrible things happening. But like AI's capabilities for human empowerment, I mean, imagine the world has changed, that your smartphone is essentially a good doctor. It doesn't have to be perfect. It doesn't have to be anything else. But it's there always. Like if you're not doing a second opinion today whenever you have a major medical issue, first opinion if you have access to doctors, it's still the right thing to do.

7:34But if you're not doing a second opinion, you're making a huge mistake. that's like amazingly good. The World Economic Forum is going on in Davos right now. And along with the geopolitical issues, AI has been a central topic, but it feels like the conversation has been around things like AI security and the impact on jobs and economies. Like, is the state of the conversation there kind of what you expected? Well, it's what I expected, but it's also one of the reasons why I do, you know, books like Super Agency, podcasts like Masters of Scale, Impossible, and other things in order to try to say, look, you can't avoid the bad futures by just trying to avoid the bad futures.

8:20You have to steer towards the good futures. It doesn't mean you ignore bad. It doesn't mean you ignore cyber risk or you ignore issues of digital sovereignty or you ignore issues of geopolitical power imbalance, but you try to say, hey, how do we get to a really good future? I constantly talk to people who are like, well, I'd really just like us to pause. Like until we sort out this particular problem, we should all pause. And you think 8 billion people are going to pause? So it's like, no, no, we're going in that direction. And it's a question of like, you know, you're kind of going with the rapids.

8:49And it's a question of how you row your boat, where you're going to, what you're trying to do. And it is shapeable. You just kind of have to take agency in doing it. So the Davos conversation, I think 80 % of it is a nonproductive conversation or even a counterproductive conversation. We're squandering this huge opportunity to say, hey, AI is American intelligence. And this is just like the American world order. This is something we want to build collaboratively and to be helpful to all of every society that we're not enemies with. Enemies is not necessarily Denmark is what you're saying. You will.

9:27Yeah. Denmark should be at the top of the friends list. I mean, you know, you and I have have talked about some of these issues now for so long that I I sometimes forget. Like you have been at the center of so many key AI developments. Your co-founder and early board member at OpenAI played a role in bringing Microsoft and OpenAI together. You helped launch Inflection AI and Manus AI and your investments and your books and your podcasts. And all of it is like helping to usher this new era into being. And you've sort of, you've taken on that role. How conscious was that choice? And like, why? And do you feel the weight of it?

10:09Well, I definitely feel the weight of it. And, you know, part of the thing that I think is a mistake about how some people think about this is we are better as a society when it's – when you have a – call it a very broad conception of self-interest. It's like the way that I think of things is I think humanity, society, and then me. And it doesn't mean me not present, right? It means me as part of industry, part of society, part of humanity. And some of it is obviously to your own benefit too. And then when it's aligned, this is part of what makes the genius of capitalism, what makes certain societies so much more productive because they go, hey, let's align the areas where there is a me that also goes to a very broad us.

10:54And so when I approach kind of AI and technology, I think of it in that level. Like, for example, I would trade off my own economic interests in a heartbeat against society and humanity. And that's the journey we're on with AI. Like it's the greatest human amplifier for quality of life that's been built in human history. It's like the same reason why we have cars and not horses and buggies. Hey, I make my living, you know, kind of grooming horses. It's like, well, you know, horses' role in society has changed. It's no longer primary transport. You have to go through the changes. Well, I would like the change to happen after my generation.

11:29It's like, well, that's never the way it works. Those folks who adopt these technologies and shape them to how you live good human lives is part of how you enable the next generation and the next generation. I obviously deploy commercially when it makes sense because commercial models are part of what gets you to scale. But what matters first? Humanity. What matters second? It's societies. What matters third is functional industries, which matter for economic and all this. And as part of that, it gets down to matters for me. your optimism, what you call reasoned optimism about AI. There is also at the same time, this constant talk about an AI bubble, valuations and hype about some use cases.

12:13Is an AI bubble or some bubbly parts of AI sort of inevitable? I mean, in any tech cycle, there's overinvestment and some big bets that don't pay off. Or is bubble like a word that's too loaded and you would describe it a different way. Good use of the term bubble is when you think the economic frenzy has got to a point that when it breaks, it will take the economic system down with it. It's horrific suffering across the, frankly, the globe. So a bubble is a substantive risk of that. It is not, hey, valuations are higher this month than they should be, and they'll be corrected in four months or 12 months.

12:57So the question is, bubble is this kind of catastrophic unwind, whereas it might be in various ways we have speculative investment. Like, for example, you say, hey, if you're managing a pension fund, should you be buying the stock market at the top of the stock market? Because the answer is probably not, even though, by the way, buying the stock market over 10, 20 years is exactly what you should be doing. So there's some timing issues. I have passed on a number of investments because of valuations because I've gone, look, the risk-reward on that valuation is not right. I'm still making other investments.

13:30Some people go, well, the AI revolution, you should buy at any price. Once a lot of people start thinking buy at any price, you know that you're at risk of a bubble. Whereas when people are going, oh, no, this one's a good bet. That one's not a good bet. And some of these will be wrong. And by the way, some of them, like say we built data centers two or three years earlier in the full capacity of what we needed. By the way, nothing suggests that. There's huge demand for training. There's huge demand for product development. And there's huge demand for inference, right? The expectation is the data centers that we're going to be multi-years of, can we have 5x the number of data centers?

14:07Can we have 10x the number? And by the way, you know, there's this U.S. political thing. Oh, is this data center bad for communities? Look, I would allow any community to build data centers they want. It's like having industry. It's like it's useful to have local power plants. They say, hey, you've got to be careful about individual citizens. Electricity prices going up. Yeah, sure. You need to add as much power as you're going to use or more on a green, effective basis. Great, right? Because then you get generally more power on the grid. And having compute available, this is precisely what's going on in Davos.

14:39Oh, my God, it looks like the two countries that are taking the lead at having a lot of computer available are the U.S. and China. We all need to be included, too. And yet you've got idiots like Senator Sanders in this country who are like, oh, no, no, we'd rather have horses and carts. Please don't have data centers here. Reid's passion about AI is so compelling. And he's an equal opportunity critic of what he sees as drags on U.S. competitiveness, whether it's coming from the Trump White House or from Bernie Sanders. So where does Reid see the most risk and the most opportunity in technology right now?

15:17And how is right now a moment for courage from business leaders? We'll talk about that and more after the break. Stay with us.

15:32Before the break, Reid Hoffman explained why he sees AI as the greatest tool to improve human quality of life. Now he talks about what it'll take to make the journey from here to there as investors, business leaders and society. And he details his own personal tactics as an investor. Plus, a rapid fire round on AI talent, what it takes to be an AI first organization and the case for CEO courage. Let's jump back in. When you look at AI startups today versus, say, two years ago, like, is what defines a defensible, attractive AI startup today, has that parameter changed for you, whether it's valuation or whether it's sort of what a moat is?

16:22So moat's more important. Valuation is a risk-reward thing. You can take a big risk when you get to something that's a really good moat. when you are uncertain about moats, then you want to take less risk. The mistake people frequently make is that, like, say, for example, they go, well, coding assistance is going to be really valuable. My first round will be raising at a$10 billion valuation, you know, and I want to raise $2 billion. And you're like, well, OK, there aren't that many companies that are worth more than$10 billion, right? So you're saying that you are on a risk-adjusted basis. You're going to be so high on that list that you're going to get a multiple from where you are now, even though you haven't built any product.

17:06Part of being smart about investing is, and this gets to your moats question, is like, well, what is everyone else doing in coding? And by the way, what is Microsoft doing in coding? What is OpenAI doing in coding? What is Anthropic doing in coding? What is Google doing in coding? And you have to kind of analyze that risk return. Now, sometimes, you know, part of how some growth investors, you know, epic careers are make is they say, well, everyone else think that investing at this thing at$10 billion is nutty. But I know this is going to be, it has actually a pretty good shot at a multi-hundred billion dollar valuation without tons of additional capital.

17:43If you have a reasonably high probability of that, because then you can mean to go, if it's a 1 % probability, you've got a problem. If you've got a 50 % probability, ooh, that's probably a really damn good investment. And I know something that other people don't know. Part of being a good investor, it's not just, do you identify a technology trend? Do you identify good founders? But also valuation is one of the things that makes good investors. Now, part of the reason why we have a lot of people talking about bubble is to go, oh my God, there's these new valuations that we've never seen before ever in the history of technology investments.

18:13And the answer is yes. And by the way, some of those will be absolutely right. Like people who have invested in OpenAI and Anthropic earlier where people are like, oh, that's totally crazy, have made historic returns already today. You can't presume that you pick 100%. That's part of investors having a portfolio. It's like, I go, okay, I try to pick 20 things and I try to make four plus of them epic. And I try to make as many of them money-making as possible. But by the way, probably in my 20, I probably have five to 10 that are like, oops, right? But that's because I'm being bold enough in my investments.

18:52For a public markets investor, and I've tried to explain this sometimes to my kids, like sometimes you can lose money on a good company and make money on a crappy company because of when you get in and when you get out. But when you're talking about for venture investing, it has to be a good company, right? I mean, you can lose good money on a good company, but you're never going to make money on a bad company. Actually, occasionally it does happen because occasionally you're lucky, right? Right. Random company is bought strategically for a ton of money that you're like, oh, good. You take it.

19:30Got it in that one. Yes, it does happen. But the key thing, and this is the thing, is I try to be a long-term builder, not a market timer. When I invest in a company, it's because I think 10 years from now, it'll be industry transforming. It'll be a LinkedIn. It'll be an Airbnb. It'll be an open AI. Those are the kinds of things that I'm essentially trying to do. And so you have to be the kind of compounding value to society and the market in order to do that. And that's what I put all of my thinking into. If you're game, I'd love to do like a rapid fire round with you, give you some AI topics.

20:09Absolutely, yeah. All right. From an investor perspective, are we at a sort of consolidation phase when it comes to AI? Things are sort of coming together, or is it still kind of unbridled innovation? Much closer to unbridled innovation. There's a number of things that people haven't seen yet that it isn't just, oh, a small number of the big frontier models are all the winners. I think there's going to be a bunch of other stuff. You said that you want your doctors to use AI to double-check their work. So are you saying that I should trust AI to know better than my doctor? Well, sometimes it will.

20:46But that's the reason I was very precise. The second opinion with AI is totally cheap. It's easy. And if the second opinion contradicts the first opinion, get a third. Go talk to another doctor. Sometimes your doctor is wrong. By the way, sometimes ChatGPT is wrong too. But that's the reason why we consult multiple opinions, because you go, well, now I've got to two doctors and a frontier model or two. At this point, you should have a pretty good sense of what you need to dig into, if not the answer. And the doctor themselves should be using the models to double check themselves. I actually think it's literally almost malpractice not to be doing that today.

21:26All right. Energy and AI. We talked about this a little bit, this political pressure on tech firms to absorb grid costs and communities pushing back. Do you see the energy economics of AI playing out in a particular way in the year ahead? Well, this is one of the areas where people like to have a cause celeb and kind of virtue signaling of I'm really good. And that AI thing is bad because it's bad on energy. It's bad on climate. It's bad on local electricity costs. And by the way, it doesn't mean that there won't be something there. But like, for example, when people say, oh, AI is already raising electric costs and they give you their data analysis.

22:06It's like, well, you've got a whole bunch of raising electric costs that have nothing to do with AI. There's no data centers there. And you've got some other areas where there's data centers where the electric costs are the same. You haven't actually even yet made the case. Now, I'm not saying it's impossible to happen, but part of the responsibility of building that is we should be building out clean power. Microsoft and Google and so forth are taking huge risks on helping buy stuff from geothermal plants and other kinds of things to prototype green power. It should then be spread through the use in your HVAC system or your washing machine, your microwave.

22:40And by the way, then you begin to apply AI itself. I could easily imagine you can train AI models today to save 20 to 30 percent of a power of your average middle class household with no impact on quality of life. So the demand is not like, stop this AI because it's bad for climate. It's like, hey, make sure you're doing all of these things in your data center development and your power development and your use of AI that makes us net better on electricity and makes us net better on our environment. So AI and regulations. Last time we talked, you used an example of cars not being invented at the same time as seatbelts.

23:18Are we any closer to fastening ourselves in when it comes to AI? Not really. Maybe we're closer on, hey, we should have more protection of children in part because we have bad actors like XAI and Grok that are kind of saying, hey, we don't mind if we create sexualized images of children. So maybe we have to lean in more on those things. But like broadly, for example, if you say, well, what should regulation do? It's like, well, create clear safe harbor for how all tech companies can create medical assistance to be more of assistance to the millions and billions of people. Simple safe harbor might be is, remember, I'm not a doctor.

24:01And remember, you should talk to a doctor if you have access to one. Maybe a part of it is that when I can go see a doctor, I can say, hey, you know, AI of my choice, please give me, like, produce a summary for a doctor about the whole conversation we had about this. Right. And please talk to my doctor to help my doctor, she or he, understand, right, what it is I've been trying to navigate. If you have those things, it's a safe harbor for experimentation, even when it gets it wrong sometimes. Now, should we be figuring out what the benchmark is to say, well, what's the number of errors that's acceptable?

24:37Yes, but we can only begin to understand that once we begin to deploy it and see what the data is. AI and talent. One of the biggest drivers of U.S. tech leadership has been attracting talent from outside the U.S. Immigration policies tightened up, the outside pipeline. has basically been cut off. Are we going to start to see any implications from that this year? Well, I think we already are. A huge amount of the technology advantages the U.S. have has because of Indian and Chinese talent that's come over. Well, now the Indian talent is going to stay there. It's going to go to Canada. It's going to go to Europe.