By James Marlay, Co Founder • Livewire Markets
The race for AI supremacy has started, and tech heavyweights such as Google, Apple, Meta, Microsoft, and Nvidia are jostling for positions. According to Bobby Yazdani, the founder of San Francisco-based VC firm Cota Capital, this is the start of a new technology-driven supercycle.
“Within four blocks of my office, $150 billion has been raised to invest in AI this year,” he says.
Yazdani has successfully invested in multiple technology supercycles, having been an early investor in global tech behemoths such as Google, Dropbox, Uber, and Salesforce.
Bobby was a special guest at Livewire Live 2023, explaining why he believed AI represented the start of a new technology supercycle. The rate of change since that conversation has been breath-taking, and the rise of Nvidia serves as a proxy for the growing interest in the sector.
Image: James Marlay and Bobby YazdaniGenerative AI isn’t reliable (yet)
Bobby was back in Sydney last week, speaking with local wealth management firms and family offices, and I asked him about the big developments in the past year and where he is putting money to work.
Despite the hype and fanfare surrounding generative AI, Yazdani says the technology isn’t reliable. For technology supercycles to take hold, the conditions need to be right on a number of fronts. Mobile phones existed well before the iPhone, but the advent of the App Store was a catalyst for mass adoption. In the case of AI, we are learning how to use the technology, but it isn’t reliable.
Cota Capital focuses its efforts on enterprise technology, and a core theme the firm has identified is energy consumption in data centres. Demand for data centres has accelerated to support the surge in computer processing required by AI. With this processing also comes significant energy consumption and costs, and this is an opportunity.
Next-generation data centres are going to be a very important strategic part of what we do. I’m not interested in real estate or its size; I’m most interested in the technologies and the power and energy consumption in the data centres, Yazdani says.
“We are looking at different types of cooling technologies where you can increase the speed of computers, but you are lowering the temperature.”
In this episode of Views from the Top, Bobby shares his experiences from investing through prior technology supercycles, the big developments he is observing in AI and why he is being patient in deploying capital into AI related investments.
