Venture capitalist Vijay Pande, who recently left Andreessen Horowitz to launch his own AI-plus-biology firm, published an essay arguing that an AI market crash would clear hype and weak players so durable infrastructure and realistic expectations can take hold.
1/ I'm a venture capitalist, and I'm telling you to root for the crash that torches my own asset class. Everyone fears the AI bubble popping.
Here's the argument almost no one will say out loud: the crash is the best thing to happens to this technology.
http://x.com/i/article/2065572998690783232
Pande frames the crash as a standard tech-cycle step that would sober capital allocation and force harder questions about governance and access, even while he continues raising for a new fund focused on the same frontier.
He urges advance preparation of a shared vision for technology’s role in human life and wider distribution of tools like open models and local compute rather than waiting for redistribution after the fact.
Users reacted to VC warnings of a necessary AI market crash, with some expressing enthusiasm for joining the revolution and others dismissing the VCs as exploitative like those in the dot-com boom.
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“The crash is coming, and it's necessary.”
From one of Silicon Valley’s best VCs.
http://x.com/i/article/2065572998690783232
@vijaypande Great related reading: "Boom: Bubbles and the End of Stagnation" by Byrne Hobart and Tobias Huber. The premise is that under the right conditions, bubbles are essential engines for transformative technical progress and escaping economic stagnation.
http://x.com/i/article/2065572998690783232
3/ Bubbles overbuild. Railway mania left Britain a rail network. The dot-com bust left us the fiber, laid by companies that went bankrupt laying it. Fortunes die; the rails stay. Today the rails are compute, data centers, and a generation learning to think with machines.
2/ Carlota Perez mapped it across 250 years. Every technology runs the same course: revolution, bubble, crash, golden age. Canals, railways, cars, computers. The crash isn't a detour around the golden age. It's the road to it.
2/ Carlota Perez mapped it across 250 years. Every technology runs the same course: revolution, bubble, crash, golden age. Canals, railways, cars, computers. The crash isn't a detour around the golden age. It's the road to it.
1/ I'm a venture capitalist, and I'm telling you to root for the crash that torches my own asset class. Everyone fears the AI bubble popping.
Here's the argument almost no one will say out loud: the crash is the best thing to happens to this technology.
@Scobleizer I heard this from the crappiest VCs during the .com boom too. They hated it. They specialized in putting entrepreneurs in a vice and the boom made it impossible to follow that playbook.
It's not that they are right, they are (eventually), it's the reason they hate it.
8/ The crash is coming whether we welcome it or not. The only choice left is whether we meet it with a plan or with empty hands. Pick one piece, a school, an open model, a portrait of a life worth wanting, and start now, while the room is still calm.
@Scobleizer .
7/ Skip the obvious "fix."
Taxing the winners fails when wealth is mobile and code crosses borders overnight.
The durable move is to **spread the means**, not the proceeds: ownership of the productive layer, open models and cheap compute, in many hands.
6/ The crash doesn't choose the future. It grabs whatever answer is already on the shelf.
In 1933 America's shelf held thirty years of progressives, churches, land-grant universities. Build the answer before the crash, or the cheapest one wins by default.
6/ The crash doesn't choose the future. It grabs whatever answer is already on the shelf.
In 1933 America's shelf held thirty years of progressives, churches, land-grant universities. Build the answer before the crash, or the cheapest one wins by default.
@vijaypande I've heard knowledgable folks say that chip evolution will make a big portion of today's capex obsolete. If you agree, does that alter your thesis?
5/ A crash and a depression aren't the same thing. The bubble sets how deep the hole goes. We set how long we stay in it. The same 1929 crash gave America the New Deal and gave Germany Weimar. Same crash. Different rebuild.
4/ Then the crash does three jobs nothing else can: It finishes the build. It humbles arrogant capital. And it forces the rebuild: the questions about who this tech serves that no one touches while the money's easy.
4/ Then the crash does three jobs nothing else can: It finishes the build. It humbles arrogant capital. And it forces the rebuild: the questions about who this tech serves that no one touches while the money's easy.
3/ Bubbles overbuild. Railway mania left Britain a rail network. The dot-com bust left us the fiber, laid by companies that went bankrupt laying it. Fortunes die; the rails stay. Today the rails are compute, data centers, and a generation learning to think with machines.
@Scobleizer hmmm ... good thing we joined revolution ... 😁
@Scobleizer ‘the pattern by which a disruptive new technology forces a society to rebuild its picture of what a human being is for.’
9/ Let it crash.
Just don't be empty-handed when it does.
@geneman10 that would certainly be super cool and tech shocks like that could push back the crash.
but we've seen a shift from investing to speculation that needs to reset.
@Alfred_Lin @vijaypande +Carlota Perez +Bill Janeway to that list
@vijaypande Even the printing press had its bubble, leading to early printers going bankrupt, because the market for printed books and periodicals was too small while paper prices were too high
9/ Let it crash.
Just don't be empty-handed when it does.
