Key Points:
- Legendary venture capitalist John Doerr calls generative AI the largest technological tsunami in history, arriving in a repeating 13-year cycle.
- Doerr is currently focusing his investment capital on entrepreneurs who use artificial intelligence to tackle healthcare and the climate transition.
- Over the last half-century, venture-backed companies generated 81% of all patents issued to public companies in the United States.
- Doerr credits a human-capital focus for his success, which led him to avoid investing in the cryptocurrency market entirely.
Venture capital legend John Doerr believes the generative artificial intelligence revolution surpasses every previous technological wave. In a recent interview with The Wall Street Journal, the 74-year-old chairman of Kleiner Perkins described the rise of AI as the biggest technology “tsunami” ever recorded, arguing that the public has actually underhyped the technology. Doerr, who built his legendary reputation by backing tech giants like Amazon and Google during their early stages, explained that this current wave will reshape education, employment, and healthcare.
Doerr maps out Silicon Valley’s innovation cycles in precise intervals, noting that major tsunamis hit the tech world roughly every 13 years. His historical timeline starts in 1980 with the rise of personal computers and microchips. Thirteen years later, in 1993, the Internet browser opened up the World Wide Web. By 2007, the dual forces of the iPhone and cloud computing sparked the next wave. Now, generative AI has arrived as the fourth and most powerful tsunami, creating value at an unprecedented pace. Just three years after the public launch of ChatGPT, 50% of Americans already report using generative AI in their daily lives.
Currently, Doerr is leveraging this technological shift to tackle global issues. Through his family office and philanthropic work, he is focusing his capital on finding and funding entrepreneurs who use artificial intelligence to address the climate transition and transform modern healthcare. Rather than chasing pure enterprise software plays, he wants to back founders who use these advanced models to solve real-world physical challenges, such as optimizing renewable energy grids or discovering life-saving drugs.
To identify the next generation of revolutionary founders, Doerr looks for specific personal traits. His primary evaluation metric is remarkably practical: “Would I mind getting into trouble with them?” He emphasizes that building a business is always a struggle, comparing the process to peeling back the lid on a can of worms. The best entrepreneurs, according to Doerr, see the world differently, remain fluent in using technology to reshape reality, excel at recruiting high-performance teams, and successfully sell their vision to customers and partners alike.
Doerr’s investment philosophy remains anchored in human capital. This deep focus on human teams explains why he chose to avoid investing in cryptocurrency entirely. He explained that he did not see human capital playing a significant role in innovation and market development in the crypto sector. While he admits that there is still plenty of time for him to be wrong about the digital asset market, his commitment to backing strong human teams has historically shielded him from speculative bubbles.
Despite his impressive track record of success, Doerr is quick to share his past investment failures and the lessons they taught him. He laughingly recalled a classic piece of advice from his venture partners: “never invest in anything with wheels.” Doerr famously broke this rule by backing Segway, which he had predicted would become the fastest company in history to reach $1 billion in sales. He also suffered losses from investing in an early electric car startup, reinforcing the hard-earned wisdom of his fellow venture capitalists.
Looking back at the evolution of the venture capital industry, Doerr marvels at how much has changed since he first arrived on Sand Hill Road in 1980. Back then, only a handful of venture capitalists operated in Silicon Valley, hatching out deals over breakfast at Buck’s, a local restaurant. Today, backing startups has transformed from a cottage industry into a massive global movement. Doerr believes that venture capital has played a defining role in fostering America’s entrepreneurial spirit and driving economic prosperity.
The macroeconomic data backs up Doerr’s claims. Over the last half-century, venture-backed companies accounted for an astonishing 81% of all patents issued to U.S. public companies by the U.S. Patent and Trademark Office. Furthermore, these startups act as a powerful engine for job creation. In 2022 alone, venture-backed companies supported 5.3 million jobs across the United States. This structural phenomenon has given the American economy a unique competitive advantage on the global stage.
As the generative AI tsunami continues to gain strength, Doerr remains confident that the technology will create massive winners and losers across every sector. While the rapid demand for AI models creates an insatiable global appetite for electricity and computing resources, the long-term societal benefits are immense. By backing mission-driven founders who use AI to solve climate and healthcare crises, Doerr hopes to ensure that this latest technological wave ultimately serves the public good.
