AI: The New Industrial Revolution

Compiled by Peilin

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The winds of change are blowing through Silicon Valley.

In recent years, the most popular terms in the AI startup world have been 'large models,' 'Scaling Law,' and the 'debate between open-source and closed-source.' Capital has chased parameter scales, training costs, and technological leadership, with founders competing to see who could launch the next 'ChatGPT moment' faster.

But now, a grander narrative is beginning to reclaim the center stage in Silicon Valley.

Ben Horowitz, co-founder of a16z, a top-tier venture capital (VC) firm in Silicon Valley, stated in a recent public dialogue that AI is no longer just a technological business but has deeply integrated into the complex interplay of industry, capital, and public policy.

Whoever wins in AI will dominate technology and the economy for decades to come.

This is why a16z recently raised over $15 billion in a single fundraising round. On the surface, this is one of the largest VC fundraisings in Silicon Valley history; but in Ben Horowitz's words, it is more akin to a long-term preparation centered around the U.S. technological ecosystem.

Amid these changes, the startup ecosystem in Silicon Valley is also undergoing a profound shift.

The 'silent founders' of the past, who focused solely on coding and kept a low profile with their products, are gradually losing the patience of capital markets. They are being replaced by a new breed of entrepreneurs who are better storytellers, more adept at media engagement, and bolder in participating in public discourse.

In the AI era, technology is no longer just about technology. It has become a super-competition involving capital, media, government, and national strategies.

AI: The New Industrial Revolution

Ben Horowitz's core argument boils down to one sentence: The AI revolution is, in essence, a new industrial revolution.

In his view, the reason the United States still holds global economic and cultural influence today is not primarily due to its financial system or the U.S. dollar alone but because the United States won the industrial revolution.

Now, AI is becoming the new variable that will determine the next round of success or failure.

As a result, a16z no longer defines itself merely as a venture capital firm but has begun to play a more complex role: it is both a capital platform and a policy coordinator and government relations intermediary.

Ben Horowitz mentioned in the dialogue that what entrepreneurs lack the most has never been just money but power.

This so-called power includes the ability to access government departments, drive regulatory changes, enter key industrial chains, and persuade large corporations to actually purchase their products.

This is also the core logic behind a16z's aggressive expansion in recent years.

The traditional VC model focused on betting on a few star companies. In the old era, very few tech companies could truly achieve annual revenues in the hundreds of millions of dollars, so there was no need for excessively large fund sizes.

But AI has changed everything.

Ben Horowitz believes that today, almost all potentially successful new companies are, in essence, becoming tech companies. Software is devouring the world, and AI is further devouring software itself.

As a result, investment opportunities have begun to expand exponentially.

This means that the traditional VC model—small, elite, partnership-based, and slow in decision-making—is increasingly struggling to keep pace with the new competitive rhythm. In the future, the VC industry will become increasingly polarized: either super-platforms like a16z that cover all technological fields or highly specialized small funds, with mid-tier firms finding it increasingly difficult to survive.

Thus, today's a16z increasingly resembles less a traditional investment institution and more a vast technological alliance: it connects entrepreneurs, manufacturing, allied nations, and an increasingly complex global supply chain.

And AI is at the heart of this alliance.

In the AI Era, Silicon Valley Can No Longer Avoid Government Relations

The most noteworthy part of this dialogue is Ben Horowitz's assessment of the Anthropic controversy.

Ben Horowitz mentioned that the previous controversy surrounding Anthropic's cooperation with the U.S. government appeared to be an ethical issue on the surface, but in his view, it was essentially a reluctance within the company to continue pursuing the partnership.

His logic is straightforward.

If an AI company is genuinely concerned about AI misuse, then, theoretically, the U.S. government should be one of the strictest and most scrutinized partners globally. After all, any violations would promptly draw intervention from the media, Congress, and regulatory agencies.

Therefore, in Ben Horowitz's view, many so-called 'ethical controversies' actually conceal Silicon Valley's long-standing complex emotions toward the government system.

This sentiment was not particularly evident during the earlier internet era.

Back then, most tech companies primarily served consumer markets. But AI is different. AI naturally infiltrates critical infrastructure such as national security, public services, healthcare systems, and transportation systems.

This shift is also a microcosm of the restructuring of power dynamics across Silicon Valley.

Over the past few decades, tech companies have resembled independent kingdoms, emphasizing freedom, openness, and anti-establishment values. But with the advent of the AI era, the U.S. government is reengaging with Silicon Valley with unprecedented intensity.

Within Silicon Valley, there is also a growing acceptance of a reality: many of the most lucrative, important, and strategically valuable AI orders in the future will come from the government sector, particularly in areas like robotics, infrastructure, and public services.

This is why a16z has been consistently promoting its 'American Dynamism' initiative in recent years. Essentially, it is rebundling U.S. startups, manufacturing, and public administration.

Silicon Valley Entrepreneurs Are Becoming 'Super Influencers'

But when it comes to reflecting Silicon Valley's transformation, media narratives may be even more telling than technology or politics.

Ben Horowitz mentioned a fascinating shift in the dialogue: in the era of traditional media, the most important thing for entrepreneurs was to 'avoid making mistakes'; but in today's new media landscape, the most important thing is to 'be interesting.'

Because the rules of dissemination have fundamentally changed.

In the traditional media era, channels were limited, and a single misstep by a founder could be amplified repeatedly by the media and remain on record indefinitely. Thus, the core of public relations back then was defensive.

But today, dissemination channels have become infinite.

Podcasts, X, YouTube, livestreams, short videos, and self-media platforms—everyone is vying for attention. As a result, 'being interesting' itself has become a core competitive advantage for founders.

Without attention, there is no market narrative; without a market narrative, there is no capital premium.

This is why more and more top AI founders are becoming, in a sense, 'super influencers.'

Whether it's Alex Karp, founder of Palantir; Sam Altman, founder of OpenAI; or Elon Musk, they increasingly resemble content creators rather than just entrepreneurs.

Ben Horowitz even cited Alex Karp directly as an example.

He said Karp's strength lies not just in technology but in the fact that 'you never know what he'll say next.' This ability to consistently generate attention itself constitutes a competitive barrier.

Thus, a new reality has emerged: in the AI era, capital no longer rewards only the 'strongest engineers' but increasingly rewards the 'best storytellers.'

Those 'silent founders' who only focus on product development, avoid public expression, and are unskilled at generating media momentum are gradually being marginalized.

Because today's competition among large models is no longer purely a technological race. It is also a competition for financing capabilities, media influence, and public sentiment.

And behind this shift lies an even deeper anxiety.

Ben Horowitz concluded by stating that his greatest concern is not that AI will become too powerful but that the American public is too pessimistic about AI.

He noted that societies in China and Japan are significantly more optimistic about AI than in the United States.

American public opinion today is overly focused on risks, job displacement, and threats, neglecting the enormous positive value AI could bring: reducing traffic fatalities, curing cancer, and eradicating poverty.

In a way, this may be the true core of the entire dialogue. Today, Silicon Valley is discussing not just 'who can build a stronger model' but rather: who can define the narrative power in the AI era.

Article Source: Ben Horowitz on American Dynamism and the Future of AI | The a16z Show

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