VC investors play a key role in fostering innovation globally, and in recent years, Artificial Intelligence (AI) has emerged as a prominent tool on their agenda. The profound social impact of AI raises questions about responsible development, and this is a topic we explored with Jack Leeney, Managing Partner at 7GC & Co. Jack will be a featured speaker at the upcoming 0100 Conference DACH, participating in the panel discussion titled "Catalyzing Change: Harnessing the Power of AI to Transform VC Investing." Here, we offer a sneak peek into Jack's perspective on these crucial matters.
What is the role of VC firms in investing in AI?
VC firms are making bets around an emerging ecosystem that is developing at a rapid pace; however, what has still been a comparably slow investment environment. Investors need to ensure a duty of care for their LPs when investing in technology with significant societal impact. Investors should also remain disciplined on price and valuation to avoid an accelerated death of promising companies that go to market with too much hype and inflated valuations before they have a real chance to commercialize.
How are VC firms evaluating the social impact of AI as the market opportunities grow and its use massifies?
If you are properly diligencing impact and potential outputs at the model layer, the key is to get as deep as possible on the inputs and training. The models are growing in scale exponentially not logarithmically. Data scientists with robust training will be best positioned to develop not only the most accurate model outputs but also the most contextually in line with societal expectations.
Which are the most attractive industries to invest in AI?
As a private VC investor, the most attractive area within the ecosystem is at the infrastructure layer with developer API use cases. Specialization of model development for parts of the real economy that are incredibly technical or jargon-heavy is interesting as well, but mass appeal will come from the breadth and depth of the most robust LLMs.
As a personal public market investor, the dependence on Nvidia, TSMC, and ASML in this space is oligopolistic. The GPU chipset oligopoly will be the best performing stocks of the next 5 years.
How have you seen the LPs appetite and concerns when it comes to AI?
A mix of enthusiasm for the potential and confusion about the hype dynamic. As we have seen many times, there is a big difference between the signal (core infrastructure software technology) and the noise in this space.
How do you see the appetite of US Tech companies in coming to Europe?
7GC exclusively seeks to help our portfolio companies enter the EU market as the first step to their international footprint. The conversation of expansion to Europe is always a welcome and relevant one for Series B/C companies at the scale to justify it.
Jack will be sharing the stage with Ties Boukema, Data Lead at Dawn Capital; Andre Retterath, partner at Earlybird Venture Capital; Konstantin Vinogradov, GP at Runa Capital; and moderated by Marek Zamecnik, CEO at Vestberry.
