Thrive’s Joshua Kushner chides Silicon Valley VCs over AI euphoria

In Thrive Capital's first investor letter, founder Joshua Kushner critiques his Silicon Valley counterparts on their AI enthusiasm. Kushner argues against letting excitement undermine investment discipline and warns against Silicon Valley's fixation on minor technological improvements. Thrive Capital, a New York-based firm, takes a different approach by making large bets on the companies they back.

Kushner emphasizes that Thrive is a company of independent thinkers, stating that markets move between fear and enthusiasm, neither of which should replace judgment. This approach contrasts with the "outlier" philosophy of Silicon Valley venture capital, where the goal is to take many bets, accepting losses on most of them as the few big hits will cover them.

Kushner believes that a VCs could be opportunistic across stages, sectors, and geographies while maintaining concentration in a small number of ideas. He dismisses the notion that VCs only disrupt incumbents, arguing that many industries will be transformed from the inside out by AI. Kushner's strategy is evident in Thrive's relationship with OpenAI, with the VC firm being a major investor and also receiving an ownership stake in the AI lab.

Thrive has invested in over 70 businesses and has a team of 35 engineers. The company's accounting platform is 30% faster with 98% accuracy, and its IT services firm has agents independently solving half of its help desk tickets. Despite these successes, Thrive's strategy benefits from investing in some of the industry's top-performing startups, such as OpenAI, Anduril, and SpaceX.

As of June, Thrive's $516 million 2022 fund had a value of more than $3.7 billion. With $60 billion in assets under management, Thrive has achieved impressive returns, with a gross IRR across all funds of 41% and a net IRR of 33%.