Elad Gil and Sarah Guo Discuss the Risks and Rewards of AI Funding: 'In the Short Term, Our Biggest Threat Is Competitors'

Last week, at our inaugural StrictlyVC evening of the year in San Francisco, notable AI investors Elad Gil and Sarah Guo shared insights on AI investing amidst shifting market dynamics. Just two months ago, deals were being fiercely bid up, but now, many startup teams are contemplating sales due to soaring software development costs.

During our discussion, we explored their investment strategies, debated whether valuations have skyrocketed beyond reason, and delved into their collaborative work on a well-regarded AI podcast.

Elad Gil, who has reportedly raised over $2 billion from investors in recent years, is almost single-handedly directing this capital into new ventures. While he chose not to confirm the precise figure, Gil emphasized that he continuously seeks support in various forms. For instance, when a former chief of staff launched a new company, he recruited a couple of highly skilled engineers to navigate the emerging technologies. Among them is Shreyan Jain, a former software engineer at Ramp with dual computer science degrees from MIT. Together, they created an "embedding playground" to test different tools by enabling the interchangeable use of various vector databases in embedding frameworks, as highlighted by Gil.

Additionally, Gil invests his own money into projects, stressing the need for transparency and clear guidelines with investors to preempt potential conflicts of interest. “Having clarity about your actions significantly reduces ambiguity and fosters a positive atmosphere,” he noted.

On a different note, Sarah Guo is adopting a more conventional route with her firm, Conviction, which she describes as a "baby little $100 million fund" compared to Gil's substantial assets. Guo has successfully onboarded two additional investors, a talent partner, and an operations expert. With significant personal investment in her fund, she takes her decisions seriously in the relatively focused portfolio her team is developing. “I’m a significant investor in my own fund,” she stated. “I truly need these companies to succeed over time.”

To learn more about their distinctive approaches to funding—both have invested in companies like Harvey and Mistral—how they safeguard against potential misuse of the AI technologies they support, their perspectives on foundational models like GPT-4, and Gil's amusing take on "French values" (not literally), be sure to catch our full conversation.

Interestingly, Gil pointed out that he has significantly invested over time in the defense tech company Anduril, whose cofounder, Trae Stephens, is scheduled to speak at our upcoming StrictlyVC event in Los Angeles on February 29.

If you’d like to attend this event, more information is available here. Our San Francisco gathering was a sell-out success and loads of fun. We anticipate the Los Angeles event will also reach capacity, so be sure to secure your spot soon!

(Special thanks to Cloudflare for graciously hosting us at their stunning San Francisco headquarters.)