Invest Like the Best with Patrick O'Shaughnessy
Ravi Gupta - AI or Die - [Invest Like the Best, EP.411]
Tue, 18 Feb 2025
My guest today is Ravi Gupta. Ravi is a Partner at Sequoia Capital and a host on Glue Guys, a podcast on the Colossus network that intersects business and sports. I wanted to have him back on Invest Like the Best to discuss his recent most recent blog post titled “AI or Die.” As both an investor and former Instacart operator and CFO, Ravi believes we're entering an era where the constraints that historically limited small teams are dissolving, creating unprecedented opportunities for those willing to embrace change aggressively. We discuss why traditional metrics of corporate success like headcount and process adherence may become liabilities, what it means to be a world-class reactor vs predictor, and how "magic per employee" and organizational agility will emerge as crucial measures of value creation. Please enjoy my conversation with Ravi Gupta. Subscribe to Colossus Review. For the full show notes, transcript, and links to mentioned content, check out the episode page here. ----- This episode is brought to you by Ramp. Ramp’s mission is to help companies manage their spend in a way that reduces expenses and frees up time for teams to work on more valuable projects. Ramp is the fastest-growing FinTech company in history, and it’s backed by more of my favorite past guests (at least 16 of them!) than probably any other company I’m aware of. Go to Ramp.com/invest to sign up for free and get a $250 welcome bonus. – This episode is brought to you by Ridgeline. Ridgeline has built a complete, real-time, modern operating system for investment managers. It handles trading, portfolio management, compliance, customer reporting, and much more through an all-in-one real-time cloud platform. I think this platform will become the standard for investment managers, and if you run an investing firm, I highly recommend you find time to speak with them. Head to ridgelineapps.com to learn more about the platform. – This episode is brought to you by AlphaSense. AlphaSense has completely transformed the research process with cutting-edge AI technology and a vast collection of top-tier, reliable business content. Imagine completing your research five to ten times faster with search that delivers the most relevant results, helping you make high-conviction decisions with confidence. Invest Like the Best listeners can get a free trial now at Alpha-Sense.com/Invest and experience firsthand how AlphaSense and Tegus help you make smarter decisions faster. ----- Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com). Show Notes: (00:00:00) Learn About Ramp, Ridgeline, & Alphasense (00:06:00) Introduction to 'AI or Die' Essay (00:06:29) Initial Reactions to AI Advancements (00:08:24) The Concept of 'AI or Die' (00:10:40) Adapting to Rapid Technological Change (00:12:02) Using AI for Real Work (00:13:58) Evaluating Company Agility and AI Integration (00:18:58) The Cost of Employees in the AI Era (00:25:36) AI's Impact on Business Strategy (00:36:55) Changing Perspectives on AI Models (00:37:50) The Importance of Context in AI (00:39:09) Optimism in the Age of AI (00:40:22) Predictors vs. Reactors (00:42:54) AI Tools in Business Operations (00:46:07) The Future of Small Teams and Efficiency (00:49:01) Investing in the AI Era (00:55:11) The Role of Board Members in AI Adoption (00:57:22) Embracing Change with Humility (00:59:17) The Ghost of Competition (01:05:04) Seizing the AI Opportunity
Chapter 1: What is the main topic of this episode?
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Ridgeline has created a comprehensive cloud platform that handles everything in real time, from trading and portfolio management to compliance and client reporting. It's worth reaching out to Ridgeline to see what the experience can be like with a single platform. Visit RidgelineApps.com to schedule a demo. Hello and welcome, everyone. I'm Patrick O'Shaughnessy, and this is Invest Like the Best.
This show is an open-ended exploration of markets, ideas, stories, and strategies that will help you better invest both your time and your money. If you enjoy these conversations and want to go deeper, check out Colossus Review, our quarterly publication with in-depth profiles of the people shaping business and investing.
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Chapter 2: How is AI transforming business operations?
So Ravi, a couple of days ago, you sent me a draft of this really interesting essay that you wrote called AI or Die, which is such an interesting framing for something that I know you've been thinking a lot about and have been thinking more and more about in a crescendoing way in the last few weeks and months.
Can you just start by describing the process of arriving at this essay and like what precipitated it? And then we'll talk about all of its various implications.
Like everyone, you see these new model advances and they've come out so quickly that you are using the models for whatever you're using them for the day before. And it's hard to think of even what to ask them when the new ones come out. So a couple of things happened.
One, you know, I'm on the board of Sierra, Brett and Clay's company, and they started describing some of the things that were able to be done in 01 Pro that were not able to be done with 4.0. And I was surprised. And I think that the specific example that came up was when Clay was talking about something he was doing with it, I asked him to show me how he was using it.
And when he did that, he asked the model a question, which was, are my instructions clear? Is there anything else I can do to make it to clarify what I'd like to have you do? That interaction was so different than anything I'd ever thought about with a model. I'd never thought to ask it a question.
And the model came back and said, no, actually, in fact, can you please clarify these five or six things? And I was pretty stunned by that interaction. That was point one. Point two was a friend of mine who was at one of the model companies left to go to another one. And I said, hey, what happened?
And he said, the pace of progress has changed so much in the last three months that I had to go to this one. And in our business, take the Matt Kohler quote that you and I both love. Matt is a good friend of ours, both of ours. Our job is not to see the future. It's to see the present very clearly. All of a sudden, it felt like the present was different than what I thought.
And so I just started trying to use it more myself. And I think I'm barely scratching the surface, but I was pretty stunned at what was possible from this. And I'm somebody who like lives in Silicon Valley and works as a venture capitalist. It made me wonder if there was other people who are going to be as stunned as I was.
So maybe talk about what you mean by AI or DAI in its most kind of intense form.
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