E69: Lost Tapes: Elad Gil on the Eve of the AI Boom

"Turpentine VC" | Venture Capital and Investing

This ‘lost episode’ of Turpentine VC with investor Elad Gil was recorded at a unique moment in time (September 2022) — before ChatGPT, Claude and Perplexity launched. Drawing from his experiences at Google, Elad discusses early ML systems, the open source debate, NVIDIA, labor markets, and AI alignment and shares some behind the scenes anecdotes.

—

🙏 Help shape our show by taking our quick listener survey at https://bit.ly/TurpentinePulse

—

SPONSORS:

📑Discover Carta, the innovative end-to-end accounting platform revolutionizing private fund management with streamlined operations and on-demand insights. Experience the new standard at carta.com/investors.

🤲🏼GiveWell spends 50,000 hours every year doing deep-dives into different charitable programs to try to find the ways to do the most good for your dollar. GiveWell has now spent over 17 years researching charitable organizations and only directs funding to a few of the HIGHEST-IMPACT opportunities they’ve found. Visit https://www.givewell.org to find out more or make a donation. (Select PODCAST and enter Econ 102 at checkout to support our show.)

💥 Head to Squad to access global engineering without the headache and at a fraction of the cost: head to https://choosesquad.com/ and mention “Turpentine” to skip the waitlist.

—

LINKS:

Attention Is All You Need: https://proceedings.neurips.cc/paper_files/paper/2017/file/3f5ee243547dee91fbd053c1c4a845aa-Paper.pdf

AI Revolution - Transformers and Large Language Models (LLMs): https://blog.eladgil.com/p/ai-revolution-transformers-and-large

Elad’s website: https://eladgil.com/

High Growth Handbook by Elad Gil: https://growth.eladgil.com/ | https://www.amazon.com/High-Growth-Handbook-Elad-Gil/dp/1732265100

—

FOLLOW:

@eladgil

@eriktorenberg

@TurpentineVC

—

HIGHLIGHTS FROM THE EPISODE:

• This episode was recorded in 2022, before the launch of ChatGPT, Claude, and other major AI applications that are now common. This interview captured a moment in time when industry leaders were anticipating major breakthroughs in AI.
• Elad explained how AI's definition has evolved from basic automation in the 1980s to sophisticated applications, with Google emerging as the first true "AI-first" company at scale through its search and ad targeting systems.
• Three distinct waves of AI development were identified: Google's early systems in the 2000s, machine vision and voice applications in the early 2010s that primarily benefited incumbent companies, and the current wave of Transformers/LLMs creating opportunities for new startups.
• The 2017 "Attention is All You Need" paper proved pivotal, with six of its eight authors going on to start companies, creating what Gil compared to a "Xerox PARC moment" where Google developed breakthrough technology but others, particularly OpenAI, commercialized it.
• Elad outlined three main categories of emerging AI companies: platforms and infrastructure providers like OpenAI, AI-first standalone companies, and tech-enabled incumbents adding AI capabilities.
• Initial predictions about AI's impact on labor markets proved incorrect, with AI currently affecting white-collar, repetitive tasks more than blue-collar jobs, and creative and caring fields experiencing more disruption than anticipated.
• Elad described three ages of humankind: the human-only age, the current human-machine hybrid age, and a future machine-dominant age, while discussing the implications for entertainment, social media, and content creation.
• The semiconductor industry lacks a massive AI-specific chip company, with NVIDIA's continued success attributed to strong founder leadership, superior software tooling, and advanced interconnect capabilities.
• Elad emphasized the importance of open-source models and predicted the AI platform market would likely consolidate into an oligopoly similar to cloud infrastructure, with a few dominant players rather than a single winner.