Marc Andreessen: Deep Vs. Broad Founders, AI in America, & the New Face of a16z

0:00Just close your eyes and just imagine two states of the world, one is which the entire world runs an American open source LLM and the other is right the entire world, including the U .S. runs on all Chinese software and I you know I don't know for me that's you know very straightforward. In this episode of the A16Z podcast we're sharing Mark and Dreson's recent appearance on TVPN recorded live at A16Z's 2025 LP conference in Las Vegas. Mark joins the show for a wide -ranging conversation on everything from the AI boom and open -source models to the evolution of venture capital and the future of American dynamism.

0:36Along the way, he reveals the thinking behind A16Z's new branding, how startups are scaling faster than ever, and what it'll take to build enduring companies in today's market. Let's get into it.

0:52As a reminder, the content here is for informational purposes only. Should not be taken as legal business, tax, or investment advice, or be used to evaluate any investment or security and is not directed at any investors or potential investors in any A16Z fund. Please note that A16Z and its affiliates may also maintain investments in the company's discussed in this podcast. For more details, including a link to our investments, please see a16z .com forward slash disclosures.

1:23Welcome. How are you? Yes. Hey guys, what's happening? Oh, it's happening. I'm going to hit this real quick. We have the sound effect board. Thanks so much for joining us. And thanks for wearing us. Thanks for wearing a suit. Yeah, exactly. Yeah, you look fantastic. Special occasion. Yeah, special occasion. Congratulations on the podcast. I just want to start out by saying, I've been watching is just tremendous. Thank you so much. Well, you know, I have a funny story. We, the moment that I realized that you were maybe paying a little bit of attention to what we were doing and it gave me some conviction that we were on the right track because we did a reply guy of the week to this guy, Baldo.

1:58And it was like this inside joke and I was like, holy shit, Mark just followed Baldo. Very talented guy, but yeah, so it's thank you for following along and it's been awesome talking to your whole team today. Yeah, fantastic. And so let's go through some hot topics. I want to start with we're in the AI era. You obviously lived through the dot com era. There's some comparisons. What have you learned and what how is this time different? Companies are making more money. Valuations are high, but how are you thinking about teaching the next generation what they should learn or what they should ignore from the people that might say this is the dot com boom two point out.

2:37Yeah, so look, I guess I'd say, I think it was Mark Twainy once said, history doesn't repeat, but it rhymes. And so, I think people looking for like a direct compare contrast. Sometimes you see people like drawing charts or the stock market's going to do the same thing or whatever. Like, I don't think that stuff ever quite happens that way, but it does rhyme. And the line that John Doer had in 1995, I remember was the internet is a cream that you rub on investors to get them all excited. So. John Doerstead. That's a way. Yes. Yeah, I have many, many, many, many John, I was like, Keith, Oh yeah, exactly.

3:11Good. But, you know, so, you know, I asked like that now, you know, look, the AI, I'm sorry, the internet went through, you know, went through phases, people actually forget, but there was like, you know, there were like these, even the phases like on the way up from, you know, 95 to 2000, you know, there were these phases of like skepticism and panic, you know, it looked like the whole thing was in a full part in 98. And then, you know, in 2001, you know, after the dot com crash, all the big companies just completely wrote the internet off and they just said, thank God that's over. And then the internet itself just kept growing.

3:41And then by 2005, it was back to back to where it had been before. And the rest was history. And so people are kind of bipolar on these things. They kind of get overly excited. They get overly depressed. I just always thought then, and I think now the substance matters. The substance overwhelmingly matters. and so is the technology great? Like are the products great? Are people using them? And AI is like off to the race so far, it's just unprecedented rate of growth of actual use. Yeah. Right. And you see that in all the numbers. And then look, the business is, I just talked to another conversation yesterday with companies for a race, received money, they're already over 10 million ARR with this incredible, you know.

4:23And there's a lot of those. Like they're all over the place. And so the things that are working, the products are fantastic. You know, the users are getting tremendous value out of them. And as you know, the base technology is moving really fast. So I feel really good about it. Yeah, I mean, it can move faster because we have the internet. Like these apps can get to hundreds of millions of daily active users because there's hundreds of millions of people, there's billions of people on the internet. Very interesting. Not to linger on the .com stuff too much, but I'd love to know a little bit of a history lesson around the way the browser wars played out.

4:56And is there anything you can learn from that that applies to the open source versus closed source AI debate. You've been very opinionated on that. I'd love to know, kind of, is there any previous errors of tech that you're mapping to when you think about open source AI? Yeah, so, you know, well, look, a lot of the browser words, you know, there was kind of a big company, kind of big company thing. And, you know, I think that's repeating itself. And, you know, I think one of the ways to think about what's happening right now is open AI is kind of growing up to become Google and Google is kind of, you know, reinventing itself to be open AI.

5:26And so, you know, there's like a similar thing there. And then you look Microsoft and Apple and Google control the operating systems for end user devices and they all have AI strategies and Amazon as well. So a lot of those issues are going to come back up. Two of these big companies are actually on federal frow right now in big FTC cases in Washington, DC, actually in the same courtroom. And so many of those issues will repeat or will be intense. The open source thing in tech has always been the wild card. I think it's always been an incredibly positive wild card. I've always been an enthusiastic supporter of it.

5:59My original work was all open source. The real thing that Apple open source is in operating systems, basically Unix One and then specifically Linux One for everything on the backend. I remember in the 1990s, there was a furious operating system where there were these companies that were making huge amounts of money on server operating systems, companies like Sun and many others. Then Linux just like to monetize that entire thing. I think it's plausible. We'll see, but it's plausible that open source say I may just be the standard. Whether that derives out of Deep Sikker Lama or any of the other new things that are coming out, we'll see.

6:35But I think that's entirely feasible. I think that would be, obviously, there are companies that would have to adjust to that if it happens. But the other side is, if the world had AI for free, I think that would be a pretty magical result also. Yeah, totally. I mean, shifting to the geopolitics of all this, is it important not just that there's an open source champion, but that there's an American open source champion or a Western open source LLM. Yeah, I believe so. And I believe so for two reasons. One is just actually cultural reasons, which is just, you know, the way, you know, open weights is great, but like the open weights like they're baked, right?

7:10Like the training is in the weights and you can't really do that. And so, and so are you being trained by, you know, a company or an organization or a set of people with American or Western values? Are you being trained by company with Chinese values? And look, there's issues on both sides. The American train models have their issues. They have their weirdness. But the Chinese train models, look, they score really well. They literally in the Chinese benchmarks, they literally have line items for like Marxism. And deep sea is like 100 out of 100 on Marxism. And so it's here for deep sea. Really knocked out of a part of a good deadline.

7:45Congratulations. Yeah, exactly. It's fantastic. right? So it's like, all right. So these are going to be, you know, this is going to be the technology that's going to intermediate your the legal system, right? The courts, the education system, the medical system, like, you know, you know, you want your kids, you know, if you guys have kids like, what do you want your kids to, you know, your kids are going to be learning from these things their whole lives. And, you know, did they have, you know, do they fundamentally have Western values, or do they have, you know, sort of, you know, CCP values.

8:10is I think it's really critical. And then the other thing just, I would say just close your eyes and just imagine two states of the world, one is which, the entire world runs an American open source, LLM, and the other is where the entire world, including the US runs on all Chinese software. And I, you know, I don't know, for me, that's a very straightforward, it's a very important topic and a very straightforward answer. Yeah, I mean, in the American dynamism context, is it kind of mission accomplished there or are there new territories that you're looking to expand and into with the broader American dynamism thesis, we talked to DU about energy and whatnot, but what is exciting about you outside of artificial intelligence on the national interest investing side?

8:52Yeah, so I mean, look, it made tremendous progress. I'm super proud of that team, and then in this new political environment, the new administration has embraced it, but also a lot of Democrats are actually quite excited about it also, and our event that we hold has lots of people from both parties. So I think there's this unified view now, I think in the American, at least in the political world of like, all right, it's time, you know, it's time for the US to step up on a lot of these things. It's time for the US to build more. It's time for the US to reinvent energy. It's time for nuclear. You know, it's time for, you know, infrastructure, you know, housing, like all these things.

9:23And so, you know, I think there's a lot of momentum. I think we're at the very beginning of it. You know, like one of the ways to think about what we're doing, American dynamism is we're going after all the sectors of GDP that are like really big and not yet basically affected by tech. And so education, healthcare, housing, defense, law, just to pick five. Those are giant, important slices of the economy that largely have not been transformed by technology in the last 50 years. The US Defense Department spends, you're coming up in a trillion dollars, very little of that money is going to technologies and companies that have been invented, frankly, in the last 20 years.

9:58Most military hardware in the Department of Defense, the F -16 is from the 1970s. Right. Like the US plane that does high altitude photography, the high altitude spy plane, it's still to you too. Yeah. Which is, it's just like literally a 70 year old plane. So, like there's just like enormous changes, you know, that really have to happen. And I think everybody kind of in the system knows that, but it's hard to get there. And I think, you know, a big part of that is, you know, these new companies, you know, that we, that we try to support, you know, they need to show up and make their case. But, you know, the entrepreneurs are fantastic.

10:28And then we see more receptivity coming from the system than we ever have. Talk about the position that the firm is in today. In many ways, it feels like you and Ben and the team had somewhat of a crystal ball to see how the private markets were evolving, companies staying private longer, AI being this massive platform shift that's going to upend every industry. And then now the political environment that enables industries to get a second or third life. Did you just get lucky or did you see a lot of this coming? I mean, I think we got a few things right. We got a bunch of stuff wrong. You know, we varied those ideas up behind the shed.

11:10So, you know, we made a bunch of mistakes along the way or changed a bunch of things. But, you know, we got a few big things right. You know, I think the things I think we got right, you know, one is like the venture ecosystem you guys know is just evolved enormously in a very positive way. And the kind of old model of having a sort of a bunch of kind of mid -sized firms that kind of sit on central road and wait for the founders to come in. Like those days are kind of over. You have the rise of the high scale firms like us, but you also have the rise of all these seed and angel investors that are really first money in and then really working closely with founders from the very beginning.

11:42And I think that ecosystem is healthier than ever and doing really well. So that's been a big change. On the adios, I would say we have changed on that, which is I used to complain a lot. Like I used to give these interviews years ago and early 2010s and just complain about like that it was basically becoming impossible for companies to go public and the things that had caused that to happen and what needed to change. And then of course nothing happens. Like there were no reforms. There were no improvements if anything got worse. And so we and others adapted to that by basically putting ourselves in a position to fund companies later in their life cycle at higher, larger amounts of money later at growth stages.

12:23And you know, it's not much more common for companies tenders and he's kind of private, you know, private sales even for their employees. You know, so that's been a big change. You know, but look, I mean, maybe the best directional bat way it was just technology was going to keep becoming important. It's just like in every area of our life, the bat that, you know, in sector X, tech is going to be more important. They're going to be big tech companies built. They're going to really matter. That, I think, is very good bat. I think, frankly, I don't, it's hard for me to ever see that ending. Yeah.

12:51What are you, you know, you guys are with your LPs today tomorrow? What are you hoping they take away from the event? Oh, so this is not a John Dore quote, but I'll give you another quote When we were raising money originally we're going around We're gonna rate we raised our first fund in 2009 and you know the world had you know completely collapsed after the financial crisis and We you know went around and we sort of briefed all the all the all the you know all the VCs we respected to just give them a heads up what we're doing. And one of the GPs took us aside at the end and said, you know, you guys have been dealing with like these, you know, very smart public marketing investors.

13:28He said, you know, you're gonna, the part of the job you're gonna hate the most is working with these LPs, you know, they're just terrible. And he said the key is you need to treat them like mushrooms. You put the, you put them in a cardboard box, you put the lid on the cardboard box, and you put the box out of the bed, and you don't open it for two years. I don't think he's going to tell his dad. They're like, what's the markup today? Yeah. That would have done for somebody else. That was not John. Yeah. And so, you know, look, the view Ben and I always had was the exact opposite of that, which is our investors are our partners.

13:57And look, that's how we want to be treated by the companies we invest in. That's how we always, you know, when we were running public companies, our investors are our partners. You know, they're in it with us together. You know, they're making a big bet on us and trusting us. and then look correspondingly, the promise that we made to them is like, look, we're going to try to deliver excellent returns, but in this business, it's just going to take a long time. And you guys know this, for any company that really succeeds, it takes 10, 20, 30 years to really have it succeed. And along the way, a lot of things happen, everything from negative headlines to lawsuits, disasters, chaos, all kinds of crazy twists and turns changes happen along the way.

14:37And so I just think it's really important for us as a firm. like we really always need to make sure that we're treating our LPs as full partners. And so what we're trying to do is just really open the kimono all the way, show them everything, kind of expose them to everything that we're doing, make sure they really understand it, go as deep as they want to go on the technology and on the companies. And you know, this is like your 15 of this for us and so far that I think they would say that that's gone well. That's great. Last question from me. Just general advice for the next generation of entrepreneurs.

15:04Are you hoping more college, less college, more coding, less coding? like there's a ton of technological change right now. How can the next generation of entrepreneurs set themselves up for success? Yeah, so there's an old Steve Martin line. You wrote this great book on how to be a successful standard of comedian. And it's just short little buck really, well written, and then every, just fire a comedian in the world, open it up. And so Steve Barnes, you know, advice for being a great standard of comedian. And it was, these so good, they can't ignore you. Right? It's like, okay. Thank you, Mr. Barton.

15:34Yeah. You know, I'll get right on that. But that remains the best advice, I think, which is just like quality, like we said, like quality bears out, like quality shows. And so a really excellent thinking coupled with a high degree of energy and courage, team building a great team and then a great product in a real insight into a market with customers, figuring not just design a product, but also design a business. Like that's basically, like my view of that is an entrepreneur always, like that's my job as an entrepreneur. and if I put a lot of time and effort into that, I'm very serious about it, I can hopefully do a good job.

16:10I think time spent improving the quality of the thing, the product and the business is almost always better than time spent trying to networking or publishing a presentation or trying to get positive press coverage or kind of all the external stuff. It's really the quality of the thing. Then again, my hope would be that we as a firm and others like us that we really recognize that and see it when it shows up. I think the other thing would be, like AI is superpowers, right? And like if you as a founder have access to, just to say, Chatchy PT deep research, it's just like, oh my god, like I have a PhD level.

16:51It used to be so hard to get information, right? And then it's been so hard, even still to figure out what to do with it. And so to now have these tools for thinking through everything and increasingly being able to do things like write code. We ought to see a generation of founders here that are just like incredibly capable, relative to what we used to be like. And we're starting to see those, we're starting to see, say, handful of those. That's what I'm still waiting for, like the real conceptual breakthroughs, like I'm still waiting for the company where it's like, it's got 1 ,000 employees, 999 or bots, like I haven't seen that yet.

17:27And somebody's going to really figure out how to use this technology to really not just bring a product to market, but fundamentally change on companies operate. And I think that's probably the next big unlock. How do you think about an individual's edge around their own proprietary knowledge? There'd been talk with Warren Buffett retiring. He read something like 100 ,000 plus earnings transcripts. He had this incredible recall. you're often credited with having this incredible recall and it certainly gives, can give you an edge in thinking through, you know, net new opportunities and decisions.

18:02Do you think that edge remains in a world where all human knowledge is accessible in a single query or what's your kind of mental model there? Yeah, so I think it's going to be, I mean, look, I think there's basically like two ways to really have a differentiated edge like in general, right? There's sort of, you know, there's kind of Deeper go broad, go deep has become a more and more specialized expert over time. And look, there are domains in which that really matters, biotech and things like, or by the way, designing AI, working on AI foundation models like that. That stuff really matters, the deeper you are, the better.

18:35So there's certain fields with that really matters. I think for most fields though, now with these new tools, I would probably bet more on basically people who are able to be broad, which is to say, basically, can you know something about a lot of different, kind of aspects of life and how the world works. And then you can use the tool, you can use the AI to go deep whenever you need to. But then your job as the human is to basically then basically across the domains, across the disciplines. And look, you see this, if you talked to any of the great CEOs, you kind of see this, which is like, they were really great tech CEOs, they're great product people and they're great sales people and they're great marketing people and they're great legal thinkers and they're great finance people and they're great with investors and they're great with the press.

19:15Right? And so it's this sort of multidisciplinary kind of approach and being able to cross domains. And I don't know. We'll see how good the A gets at that. Hopefully it gets good at that also. But that in a lot of way, the entrepreneur has always kind of had the burden for somebody who wants to do something serious. Like they have to be like that, at least to some extent. And the best entrepreneurs in the future, I think will probably be quite skilled at six or eight things and then able to kind of cross and combine them. How do you think about the responsibility of the venture industry broadly to try to influence the world, outcomes in the world?

19:53I was sort of laughing less than a month ago. A lot of investors were clearly shifting capital out of the US and just yolowing into the French bonds and things like that. Venture Capitalists obviously didn't do that, right? but at the same time, there was a high -profile story of a venture capital firm investing in a Chinese AI company that we won't mention here. And it got me thinking around, if you're operating a hedge fund, you can go invest wherever you want with a ton of scrutiny. People don't look at that as finding if you move assets into some Chinese market. It doesn't pack full. It's less of a, yeah, it doesn't feel like you're betting against your own team in the same way.

20:36So I'm curious how you think of the generalized kind of responsibility of venture capitalists, even especially as the sort of AUM has scaled. Yeah, so actually bend the the era of progress. Yeah. Yeah, look, the big thing I think I would say is like we always thought and aspired that we were building things that matter and that we're going to have an impact on the world. And for a long time, you know, we were trying to convince people that we were doing that. And they never quite took us seriously. Because it's like, you know, it's like our databases, like, okay, nice guys, I don't even know what those things are.

21:11You know, even personal computers, like I think of my desk, I write letters on it, you know, whatever. Like, just like tech was never like relevant to politics, really. You know, and called it as I'm talking about like, between the modern era, 1950s, call it through like the 2000s. And so, you know, and look, you know, generally speaking, like our press coverage was, you know, generally people were like, wow, a startup site and, you know, when companies succeed, it's great. And then, you know, in the last 10 or 15 years, you know, If questions like yours, I've started to come up and then correspondingly just enormous amounts of criticism attacks, kind of indictments of people with all kinds of points of view on the industry.

21:46I would say in the beginning, that irritated me because I had gotten used to the environment where either nobody cared about us, or people just said nice things about us. What I came to realize is we're the dog that caught the bus. We actually now are building things that matter. right? And so, you know, tech now interfaces direct, you know, when E -Line goes into the car market, like you just, you know, it's the repercussions of that, you know, to your point, like on many countries, they're just gigantic. And there's, you know, a thousand examples like that that we could give, and, you know, yeah, probably being the biggest of all.

22:11And so, you know, look, it worked, like the stuff that we do now, the companies that we fund, they really matter, they really have, you know, really big implications for society and for policy and politics and geopolitics. And so, mainly, I think the responsibility is on us as a firm as well as our companies. Like we need to go explain ourselves. You know, we need to go be present in the policy debates as you know, like we have a huge push now into policy and politics that I never imagined we would have. But by the way, something I got wrong. I never thought we would have that and then it became very clear that we need that, you know, kind of for this reason.