hi everybody today we are in really good company with one of the most successful entrepreneurs and Venture Capital investors over time, Vinod Khosla. Vinod um co-founded Sun Microsystems back in 1982 and Khosla Ventures in 2004, and Khosla Ventures is uh making money in technology whilst also doing good stuff for society, so uh warm welcome Vinod.

great to be here you say that it is only the improbable which is important what do you mean by that most in this goes immediately into my views on expert opinion it's very good at predicting the an extrapolation of the past as opposed to a new kind of vision for the future.

so when you look at forecast and predictions only time they're important if the world changes if the weather changes from today to tomorrow but if you look at expert opinion when Russia invaded Ukraine experts were this will be over in two days.

the same is true of almost all large changes uh then the experts revised their forecast to expolit the Past uh it's entrepreneurs specifically who invent the future they want and create unlikely scenarios uh the studies like Ukraine I site are when uh the Department of energy in the United States forecast the number of electric cars in the US in 2010 they made a 25-year later forecast for 2035 and Elon Musk and Tesla exceeded that forecast in 2016.

so Ur trying to make a different future their Vision happen is what drives change and they're improbable in that sense.

how do you identify these situations where experts are totally wrong I think it's very hard to identify precisely these situations when we invested in open AI in 2018 is when we made the commitment to invest it was hard to say when they would be a breakthrough in AI.

what was predictable was the trend line was an exponential it was very likely we were in the F flat part of the curve of an exponential the early changes uh and then the Breakthrough happened.

so there was a particular paper in 2017 that turned out to be quite important for AI progress and because of that suddenly AI capability took off uh I would call that improbable because nobody else was predicting it but it took Sam Alman and his team at openi to make that a reality.

in fact the paper wasn't written by Google by open AI it was written by Google researchers and then it became important and they scaled it they believed in it they scaled it they made it happen just like Elon Musk believed in electric cars and made Tesla happen.

and and so Lord changes are almost always driven that way there's not a single Automotive player who's developing really state-ofthe-art self-driving cars it's not the Volkswagens of the world it's Google which has no business being in automotive and that's what I mean by improbable.

when Amazon started you were early investor in Amazon it was the same nobody thought they took take on Walmart.

how do you find these situations do you is that people coming to you is it people you know is it things you read how do you get across them well more than there's multiple factors first the opportunity has to be right so you have to uh you know most people especially most experts in in any area when you look at radical change they tell you why it can't be done.

there's a breed of people that are entrepren that say why not if there's a plausible path for why it could be done and ENT is ready to make it happen through persistence um I think uh that's what you look for it's the right personality in the right environment the timing is right for a lar change.

um the rationale makes sense there's a technology breakthrough when mobile f phones came for example Uber was possible um or Airbnb was possible in and then they make that happen.

so take take the examples of cell phones Steve Jobs had a vision which is very much criticized because people said a phone without a button without buttons for dialing you're old enough to remember when Nokia and others Motorola were the two big cell phone players but they didn't imagine this future uh Steve had a different vision and um was really about a device that would not mostly be used for talking but it was a phone it was an adity that was hard to believe so that's another very large improbable.

what have been your best investments I mean you've been invested in quite a few of the names you mentioned here already but what kind of stand out well first we invest as a team but uh mention another improvable because I think it's very important in the nature of these exponentials.

in 1996 we invested in a company called Juniper that said tcpip would be the protocol for the internet there was not a single Telco player AT&T Verizon they had different names them before their mergers and all that that predicted tcpip would be the protocol for the internet and they had other more technical reasons for going with other protocols.

uh we just bet on that uh we got a 2500x investment over about five years I was at kleinet Perkins then we made $7 billion on a $3 million investment uh uh that was very nice.

but it was because we stepped into an area which was both important tcpip turned out to be important as a protocol for communications um and it was very large U and nobody else was betting on it so Nokia L Alcatel Lucent for all the big names that bet on other protocols and we bet as a startup on this and we won I was at K Perkins at that point.

we also invested in Google when was a couple of flaky PhD students uh in but they had real resolve in the ideas made sense and you didn't know how large it would be how important the improvable would be when they were talking about organizing the world's information it was hard to extrapolate 1996 from two kids talking about that to it will change the world in many many ways so those are all improbables.

characteristics of people with the resolve and determination with persistence with low probability high impact bets and the environment being right for them to find a tow hold and then explain from there those are characteristics we look for from an investment point of view.

so now I'm I'm a flaky PhD student uh I come into your office what kind of things do you ask me I say hey I got a super plan I'm going to change the world we see that all the time and we have to judge how persistent will they be.

if you're talking to them about the investment for a month or two you can usually tell how fast they will learn how F fast they will change and adapt in uncertain scenarios fast learning is more important than experience uh and we can come back to that.

experience seldom helps in these environments in fact experience is a set of biases which causes you to extrapolate the past and not go after a radically different future.

how do you screen for false learning how how can you figure out whether I'm a f learning you can watch somebody and see how well they answer questions uh if you challenge them how they respond are they thinking from first principles uh and saying let me examine this assumption or are they being reactive I know this to be true which is very common in experiened business people.

we've always done it this way we've uh had the world this is always worked I've done this for 30 years those are all bad signs for an entrepreneurial person.

you've done it for 30 years and more so how do you make sure that you that you don't fall into that trap and that's one of the hardest things I do I I I think the hardest thing I do is decide how I stay relevant to Fresh thinking and fresh areas.

you know when I invested in Juniper which was the at protocol for the internet it was very hard to say we could win but there was an idealized vision of why it would be superior to what others much more experts expert opinion was saying would be would happen and examining it from first principles like why won't it happen and people will tell you because ABC and then you say if I can challenge ABC then in fight in fact Happ happen.

so it's this first principles thinking and then being willing to change people's your mind mind rapidly that great Aros always learn rapidly from being in the field I always say LGE changes are not always planable but they are discoverable and series of iterative steps by smart thinking.

let's um utilize some of your smart thinking now and let's try to predict the future which you have done in a in a fantastic Ted talk so you have identify 12 trends for the future and I'd love to dive into each one of them if you don't mind but just uh before that just what these Trends what do they have in what do they have in common what are they about my particular area of expertise and I hate to even call it expertise it's more specul smart speculation or I call them intelligent gats of what might be possible uh is technology driven so technology causes the change which causes a change of in um and then you sort of say with that is there an entrepreneur who can drive that change to happen.

somebody like Nan musk make electric cars possible when General Motors couldn't and they attempted that and spent quite a lot of money before Elan must did on electric cars it's technology driven change and a change in assumptions which make the exporation of the past somewhat invalid if if you could make the New Vision happen.

of course the rest of the world generally doesn't believe this rapid change nobody believes in Airbnb as people would let strangers into their house or that Uber would be a large business or that you could build retailing on the internet e-commerce and not have retail stores like major retailers like Walmart these are all radical assumptions before they happen and that people would be happy to buy.

let's dive into some of these radical predictions you have first one expertise will be free AI is moving so rapidly we are very close to the point where AI is as good as the median person in most areas.

so whether you're looking at an oncologist a primary care doctor a teacher a structural engineer a minerals engineer doing minerals resource Discovery AI is getting good enough to be huge leverage on today's people with expertise in that area.

and I think very very soon in all these areas and all areas of expertise more accurately I should say in most areas of expertise AI will be better than the human and then because it's computation only it can be replicated infinitely.

there's a million doctors in the US couple of hundred thousand Primary Care doctors and then specialists in various areas but if you could have 10 times the amount of expertise it would be near free uh and we could provide a lot more Primary Care without much cost or maybe even substantially lower cost.

that's a good example what are the implications of uh free expertise what will it do to the world I'm starting to think through the implications I think that world will be quite deflationary but deflationary in a good way.

there will be some bad side effects that job may be replaced whether it's a sales person being replaced by a AI sales person which is being developed AI replaced by a structural engineer or uh or structural engineer replaced by an AI.

you know if you take the 300 billion or 400 billion we spend on physician salaries in the US and say 90% of it will go away uh that has to be deflationary.

will it make the world a fairer and more equal place you think I'm absolutely certain uh we have an opportunity and I use the word opportunity carefully to make the world fairer more accessible I do believe and I've been arguing that a country like India should offer free Primary Care AI uh just like they offer free payments there's no visa and MasterCard in India with their tax on all transactions uh that is possible.

and free teachers for free AI tutors for every child um we have ai in fact my wife runs a nonprofit that has an AI um that can assess a student in their weak strengths and weaknesses faster than a human can and more accurately and then teach to their weakness that level of Education Precision will come for almost free in fact that's offered for free on the ck12 website um today um and we want to scale it globally uh and it only cost the cost of computing.

you also say that you think labor will be free I do think uh and this is a little harder to project today but uh almost certainly over the next five years we will develop bipi robots that means robots that have two legs and two arms that can do the kind of work humans can.

uh the the hardware for that is quite easy and by the way I believe that industry will be larger than all of the Auto industry in 25 years and nobody's planning for that large a change um but nobody's planning for expertise being free uh a free PhD in every area you want but it's cell biology or Material Science.

but if we get to that which I think very very likely we will in the next five years possibly sooner uh and many people including Elon Musk are promising it sooner as Factory workers that are robots um that are that have the agility of humans the human fingers for assembly work F work uh human strength human form factor fit into the current environments because they designed to be be the form factor of humans.

I think that can be near free and infinitely replicable if you had a billion such robots and we do have a lot of cars so I always compare it to the Auto industry because it's a physical thing uh they could do more work because they can work 24-hour shifts um then all the human labor today whether it's Farm Workers whether it's assembly line workers or other tasks household tasks for example.

what about uh the growth of Compu in power which you also talk about I think that's growing naturally I think it will continue growing I think we are already on that trend line and so Computing as a cost per unit of computing is declining very very rapidly.

what has been very expensive is programming these computers and most people can't program a computer I do think we will get to a world where you can program it with voice in natural language whether you're speaking Hindi or English or Japanese doesn't matter you program these computers in human language and you can use them much more effectively.

so the range of uses could expand dramatically because what I'm talking about is essentially an AI computer programmer and that makes all the hardware that's getting very cheap very quickly in Silicon chips make much more accessible and You' use it almost transparently you know today we don't think of electricity I think Computing will be like a background activity like electricity.

so when Computing is free or you know extremely cheap as electricity and water is now what what will it change for example you know the obvious small things are like B building efficiency in your home watching you knowing who's in the room turning off the lights turning down the things knowing your calendar knowing when to turn the heat up or the heat down all those kind of things but those are my minor.

I think you will be able to program almost any task there's s billion humans each could have 10 agents so imagine 70 billion agents running around the internet doing tasks for computers.

today you have to go call an Uber you might say something as simple as I have a meeting at 10:00 there get me there on time and that means first knowing where that is looking up my calend saying I have to get to San Francisco to to to this particular address checking traffic how long will it take determining when I should leave calling me in Uber to make sure it shows up on time uh all those are tasks that an agent could do for me.

um or it could be be as simple as uh I want a personalized exercise program design one for me who would own this agent I think it's independent companies I saw a company yesterday that's designing physical programs for people individually they started by having physical trainers who are experts in their area design individual programs and you could support 10 or 20 consumers per trainer doing an hour of training a week or something now they're up to 150 people per trainer why because AI starts to do much of the training program design under the supervision of the physical trainer.

and for the next decade we will see a lot of this imagine a software program that's an intern to a senior programmer imagine a physician AI intern that's a pH intern to a to an expert AI doctor and so we will see this supervised release of AI for the next decade maybe five years and then these start to be good enough and more importantly us humans have more confidence in their capability and we let them do more and more so I think it'll be a gradual introduction of these under human supervision.

I also mentioned one other thing I use the word probable um are capable we will have these capabilities but some societies will oppose them when the Looms for textile U making textiles was were introduced people oppos them um most new technology has been opposed.

and whether the incumbents who get short-term harm like a job replaced by a robot let that happen or not uh is going to be a major determinant of the pace whether this takes five years 10 years or 25 years to happen some societies will introduce them faster than others and they will make economic progress faster than others others will focus on we have to preserve jobs which I think will be a losing battle and countries that do that will lose uh the economic race uh because our higher cost structure.

but it'll be an important issue how Society introduces I think policy will be the single biggest determinant of the rate of introduction of these so governments will matter democ atic process will matter long-term views will matter I in fact worry China may have a very different tanaman Square type approach to introducing these Technologies um and other countries may have much more of a democratic process.

where we recently saw the Screen Actors Guild in Hollywood oppose the use of AI generated content that's a good example in instead of saying we will leverage that content we'll be the we'll use it as a creative tool to expand what we can do and expand infinitely entertainment available to people uh they chose to oppose it because it was short-term jobs it's a real concern I I'm pretty empathetic to the people who are disrupted whenever you're trying to disrupt the world.

you say that you think AI will will play a larger role in entertainment and design almost certainly I saw a tweet yesterday two days ago by an artist who said oh I just use AI to finish my music I have so much unfinished music 90% of my music is music I didn't finish now ai can help me finish it and release it.

music for example can become interactive you know take a simple entertainment area like video games they've grown a lot they were tiny fraction 20 years ago compared to Hollywood or film and traditional video um and audio music uh they've become much larger than music as an industry why because it's much more interactive and humans like interactive.

could music become interactive where every person mixes their own music to their preference absolutely so we can be Lites about it and look retrospectively and resist change or expand the repor in fact most music today is produced very differently than it was in the early 90s when we didn't have digital music we didn't have stems we didn't have music to mix uh you know what's happened in music is the same that's happened in software open source contributions that people can mix and match and create new music out of or even build their own Library so every song isn't a fresh song.

it'll be better music it'll be more diverse music cater to a larger range range of users and for particular purpose you know if I'm getting ready to compete in the Olympics and I want to get all energized it'll be different music I want than if on a Sunday morning I just want to relax and meditate I'll have personal music.

and in fact it'll be able to read my brain signals and say uh what what kind of music would calm me down uh I use this every night last night before going to bed I use a device that actually measures my brain activity and says based on this Baseline I'm going to stimulate your brain for 10 minutes it's it's like brushing your teeth I brush my brain too and it stimulates my brain for the theta waves the low frequency waves that result in better sleep and so when I brush my brain this way with electrical measurement and stimulation and for 10 minutes before I go to bed I sleep better.

so music can do the same we'll have personalized music generated for each person and we will still have Kayla Swift and the celebrities of the world then we'll still have even more diverse range of what is classical music people will have a lot more Choice.

what about the tailor making of medicine you talk about the signs of medicine changing as well we are already doing it you know cancer is a large uh problem in the world of course in human health um with very few really effect Ive Solutions we can delay death a little bit.

but if you could tailor design a protein to interfere with that cancer one person's cancer not a drug approved for all seven billion people on the planet which is how we approve drugs and each cancer is different each person's disease and genetics are different uh we will be able to custom design it.

in fact we have a come uh company called N1 bio the idea is the population side for the Target drugs is one person N1 n equal to one so it's starting to happen I think drugs take longer so I expect it'll be 10 15 years before that becomes more of a paradigm but absolutely AI will let us design drugs predictably for one person's cancer.

what about food what will you do to food the food we eat will be the food we eat but can we produce it with a lot less chemicals for example absolutely.

because uh robots can pick bugs off trees instead of bombarding them with pesticides or herbicides um so we are already doing it we are doing strawberries and other things in green houses completely done with robots uh that can control it and precisely control temperature fertilizer for each plant produce much sweeter strawberries.

uh so there's a particular class of Korean strawberries that are almost never grown because they're too expensive to grow because they need detail care we are routinely producing them I do think AI will have less an impact on agriculture but I've just given you some examples we had a company that John Deere B that drove through fields and custom sprayed herbicide on each weed after reading each plant with an IM as through a camera saying this identifying it as the weed and killing it one weed at a time instead of spraying the field with P herbicides and the same applies to pesticides.

that's a good example of how you change agriculture of course you can fertilize individually also each plant because their needs may be different.

will we have a cars in our cities I believe cars were a great addition to humanity most cities are too congested and today only about 200 of the 4,000 cities on the planet that should have public transit have public transit why because it's very expensive on capex very inconvenient for the user and the less the usage the less frequent the schedule to make the economics work and then people don't want to use it.

I do believe self-driving will introduce two person public transit Vehicles sort of personalized public transit going point to point so it never stops where other people have to get off because you're not sharing the vehicle and you avoided the cost of the driver.

so we go from a van to a bus to a double decker bus to light rail to heavy rail because there's a person driving the vehicle and so we go to larger and larger aggregation which results in more stops along the way because there's more people on our train and slower Transit time less convenient schedules.

we are designing a system now in state California in fact in four different cities we have won contracts to build public transit as a startup where the idea is it will be point to point like an Uber and it won't stop anywhere along the way not even traffic lights.

so it will be faster than a chauffeur driven car because it won't be in congestion it won't stop at stop lights it'll go point to point if you get off your restaurant job at 1:00 a.m. it it will be there for you far as a personal vehicle to take you to the stop where you want to go without stopping anywhere else.

um I'm very excited about this I think at some point once we prove this out and I think we'll in the next five years we will have enough systems implemented that every city will go to this kind of an idea and cars in cities will decline of course there'll be cars but my bet is most cars greater than 50% in most cities will be eliminated by 2050 or so.

I have to say I have very good throughput with my electric scooter which I Ed to to work every day but hey but on AG but what about what about fly agregate if everybody was using the scooter the througho per hour or the streets you drive would be lower than if you had a public transit system doing self-driving uh little pods if you might imagine that yeah yeah now I can see that what about flying you think we'll fly a lot faster yeah you know after the Concord we gave up flying faster and this speed of sound was the limit for most aircraft fly other than specialty aircraft for the military and Hypersonic missiles and things like that.

we will get there and I think we're working on that U that probably doesn't have a lot to do with AI but AI will help in Material Science design of materials I think it can be done with very traditional engineering today and it just nobody has taken on that challenge to say we can fly at Mark 5 4,000 mil hour or 6,000 kilometers per hour uh that's that'd be exciting it make the world a shorter place you could go from London to New York for lunch and back.

clean power you are also a strong believer in nuclear fusion um how do you see this Well Fusion hasn't worked because no Ono has worked we've had the itar project and started with the assumption it would take 20 years and 25 years coordinated between a lot of Nations a huge bureaucracy.

what has happened since 2018 and it is interesting in 2018 we decide to invest in open ey and we also decide to invest in Commonwealth fusion and it made Fusion real now there's a dozen startups that are credible startups in Fusion so I'm very optimistic.

in the next 5 years no will doubt that Fusion is a viable technology and then we'll have the 30s and 40s to scale it up and scaling up is much faster My Hope for Fusion is we use current power plants but replace coal boilers and natural gas boilers with Fusion boilers we may need to replace the turbine too but retrofit old plants with Fusion clean power much cheaper much cleaner and of course much more scalable because you're not needing more coal or more natural gas has very little input.

so then energy will be free too basically you're free I hope well energy is interesting already if you have a large solar facility in India you can get a contract for $1.7 per kilowatt cents per kilowatt hour of electricity per unit of electricity that's pretty close frame um you know in many parts of the world they're paying 10 times that today.

now solar power is not reliable or dispatchable you want to watch the game when the game is on not when the Sun's shining or the wind's blowing so we need to stabilize energy I'm pretty optimistic that Fusion will solve that problem battery storage can help solar and wind scale and I do believe geothermal super hot geothermal is another area we've not done enough working in that will provide very low cost sustainable Renewable Power.

and uh and more uh optimistic predictions resources will be plentiful and carbon will find Solutions you predicted peak oil in the 1960s and what happened is at the right price of oil people W looking for oil and we discovered a lot more oil than we imagined.

we are in minerals like lithium copper Cobalt where we were in 1960 SE in oil we've only looked on the surface in very traditional ways I don't believe we've developed the sensors to go look a kilometer or two under the Earth but those are entirely possible I don't think we've used AI to start looking for minerals.

and so my bet is the next five seven years is about developing the tools to go look and then we will discover more minerals uh once we have the tools to find them much better and there won't be a shortage.

we'll also learn recycling in unusual ways uh and so I'm pretty optimistic that if I look in 20 years the things we think will be short copper lithium high and over of course um one we will learn to use them much much better with AI you can do structural design that's much using much less steel um much less um copper but we will discover more minerals and I don't believe in 20 years we'll be talking about a mineral shortage we will be talking about a mineral glut.

you paint um a very positive uh picture of the world here and you mentioned earlier some of the things which could hold this uh back from happening um which part of the world is going to benefit most from these Trends and where will there be the biggest uh obstacles for achieving these things so the one thing to keep in mind is these things are relatively unpredictable I go back to the improbable I'd say any one location if you ask me about a country uh that it is extremely improbable it'd be that country.

but I always say we don't know which improbable is important but among a thousand improbable some improbable is very probable and so the mistake we made in looking at one thing and saying that's improbable is not realizing there's a thousand possibilities thousand improbables one of which will become the probable thing that changes the world.

so will minerals be discovered in the Himalayas uh possible but I couldn't predict that it could be under the ocean it could be in in the deserts in California uh so.

this is the reason I focus so much on the improbable and creating many more improbables in in haky terms more shots on goal or soccer any any sport if you have more shots on goal one of those improvable shots will score for you and that is the approach we have to take not the approach experts say prove to me the path exists in a particular place or a country.

and this is very important in realizing why most of the innovation has come from Silicon Valley it's an attitude towards making the improbable happen taking the improbable making it possible then probable and then making it happen it's this journey from high uncertainty to high certainty.

you know nobody imagined the world of Google or the media companies you know YouTube Twitter mattera they weren't didn't even know they were in the media business when traditional broadcasters were looking at media but they are the dominant media companies now at least by market cap.

so this is how one has to take think about this world of invention and Innovation and allowing lots of things to fail I like to say I don't mind a 90% chance of failure on a project if there's a 10% % chance I change the world.

and in this world what is your advice to young people look each person's different 20 years from now I'll be telling them pursue your passions I used to say pursue your passions as long as you can make a living at it I'll drop the as long as you can make a living at it.

because I think there'll be enough abundance in society for societies to support uh a minimum level of living for everybody independent of the job people kids at six years old won't be taught to study so they can get a job it'll be study so you can explore your interests or pursue your passions I think it'll be a different kind of world that's my advice to young people.

uh one generation past the generation of young people today these people in the middle will have a hard transition as we lose jobs as Jobs transition um it'll be hard the disruption is hard.

um the rate of change will my bet slow down because of this disruption and how disruptive it can be on people who but abundance if he can change the world from 2% GDP growth to five or 6% there will be enough abundance in 50 years and we can do the math for GDP growth rates at those and per capita income growth rates at those levels.

It's a Wonderful World we can be in the transition will be hard it'll be difficult it'll depend on government policies but in democracy those policies will be determined by uh by voters and I think we will need things like Universal basic income in other things and we will have the resources to afford them.

very hard to imagine today very improbable that we can afford Universal basic income in any society but I think it'll be possible.

wonderful um it's been really really great uh talking to you uh all the best of luck and uh keep up the good work thank you very much it's great to talk to you.