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Khosla Ventures partner Ethan Choi was among the first Silicon Valley investors to speak out against the shooting of Alex Pretti by CBP in Minneapolis, staking out a much different position than Khosla partner Keith Rabois. 

Axios Pro spoke with Choi about his decision, as part of a wide-ranging conversation that touched on various aspects of AI investing (Khosla is a major investor in OpenAI). What follows was edited for clarity and length:

Axios Pro: Why did you post on X about Alex Pretti, and what's been the response?

Choi: "For me, this was not a political thing. This, for me, was a moral thing. To see a U.S. citizen without due process executed by five agents in the face of everything that was going on — I felt a big responsibility to say something.

It's important that people know that Keith doesn't represent all of us at Khosla Ventures.

The truth is, these VC firms are a collection of individuals. We're not a big corporation like Microsoft or Apple — we're entitled to our own opinions, and the strength of these venture capital firms is oftentimes that we view things very differently and sometimes completely diametrically opposed. You know, if you take Vinod [Khosla] and Keith, for instance, you can see that their political views are very different."

There's been a proliferation of AI lab companies with major talent, but no revenue getting multibillion valuations. What does that mean for VCs?

"The onus on as as firms to be able to do the technical diligence [on these founders] has increased. 

In the Saas-era, you could be a metrics-based investor. Today, to be doing some of these investments, you certainly either need in-house expertise to evaluate — or hopefully have a network you can lean on.

VC firms are also now competing with AI companies for talent?

"Yes — I think early-stage was always this way. But even now at growth stages, as I'm looking to hire, it's no longer: 'Have they done investment banking or private equity?' It's almost completely shifted to: 'Do they have technical aptitude? Or can they learn very quickly?'

Here at Khosla, we have a guy named Sven Strohband — he's a Ph.D in machine learning from Stanford, and he worked on the first DARPA autonomous vehicle project. Obviously, Vinod is extremely technical."

Do teams sometimes not have technical abilities they're pitching?

"I think that's very possible. Now the software development cycle is three to 10 times faster. So the way I think about it is, can this founding team navigate 30 years of changes as compressed in 10 years? 

Of these companies getting funded, many will unfortunately go out of business faster."

"For sure. The baseline revenue scale that bankers are accepting today is around $500 million in revenue. Some companies are already at IPO scale in their first year of business. 

Before AI, I actually tried to avoid investments in the $5 billion to $20 billion range, because getting to the $100 billion valuation is rare.

In the AI era, we believe the outcome can be different — that AI will eat some of the software market and also find efficiencies in the labor markets. If you believe the foundational models are going to be trillion dollar companies, then application companies like Abridge in health care or Glean in enterprise, or Clickhouse will get to hundreds of billions of dollars of outcome."

What else should we be watching on a global stage? 

"Major tech companies have sent people to South Korea to SK Hynix's headquarters to everyday go and beg for High Bandwidth Memory.

South Korea a critical country now — I would say they are going to be the most important in the AI supply chain after Taiwan and the U.S."

Khosla's Ethan Choi on Alex Pretti and why AI failures will come faster

And why South Korea is the next rising AI superpower

Photo illustration of Ethan Choi next to an image of a horizon of pixels approaching the reader.

Photo illustration: Axios Visuals. Photo: Courtesy of Khosla Ventures

Khosla Ventures partner Ethan Choi was among the first Silicon Valley investors to <a class="gtmContentClick" data-vars-link-text="speak out" data-vars-click-url="https://x.com/EthanChoi7/status/2015524019085451353" data-vars-content-id="f6edf53a-cf7c-4d50-b8f4-28e000ca7ac8" data-vars-headline="Khosla&#x27;s Ethan Choi on Alex Pretti and why AI failures will come faster" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://x.com/EthanChoi7/status/2015524019085451353" target="_blank">speak out</a> against the shooting of Alex Pretti by CBP in Minneapolis, staking out a much different position than Khosla partner <a class="gtmContentClick" data-vars-link-text="Keith Rabois" data-vars-click-url="https://x.com/rabois/status/2016159371223355427?s=20" data-vars-content-id="f6edf53a-cf7c-4d50-b8f4-28e000ca7ac8" data-vars-headline="Khosla&#x27;s Ethan Choi on Alex Pretti and why AI failures will come faster" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://x.com/rabois/status/2016159371223355427?s=20" target="_blank">Keith Rabois</a>. Axios Pro spoke with Choi about his decision, as part of a wide-ranging conversation that touched on various aspects of AI investing (Khosla is a major investor in OpenAI). What follows was edited for clarity and length:

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Khosla's Ethan Choi on Alex Pretti and why AI failures will come faster

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