Thrive Capital founder warns Silicon Valley against AI investment hype
As billions flow into artificial intelligence, one prominent investor is urging Silicon Valley to pause before treating every fast-growing company as exceptional.
Thrive Capital founder Joshua Kushner warned Silicon Valley venture funds against becoming overly enthusiastic about artificial intelligence investments in his first letter to investors. He emphasized that the technology’s enormous potential does not eliminate the need to carefully evaluate every deal.
It is difficult to overstate the scale of this opportunity. But in our view, it would be a serious mistake to allow enthusiasm to weaken our investment discipline. In Silicon Valley in particular, the industry can become fixated on overly narrow technological changes rather than where the technology is ultimately leading.
Thrive Capital Focuses on Large Investments
New York-based Thrive is also actively investing in AI, but its strategy differs from the model in which a fund makes many small bets in the hope that a few highly successful startups will offset losses from other investments.
About 90% of the capital in each Thrive fund is allocated to its 15 largest investments. Joshua Kushner believes this approach makes it possible to focus on companies with long-term potential rather than chase short-lived technology trends.
AI to Transform Existing Businesses
Thrive is betting not only on startups capable of displacing major market players. The company also expects existing businesses to undergo significant modernization with the help of artificial intelligence tools.
To support this, it created Thrive Holdings, which acquires companies and, together with OpenAI, implements AI-based solutions within them. The entity has already acquired more than 70 businesses and assembled a team of 35 engineers.
According to Joshua Kushner, Thrive Holdings’ accounting platform uses AI agents to prepare tax returns 30% faster while delivering 98% accuracy. At the same time, an IT company within the structure independently handles half of customer support requests.
Thrive’s Assets and Key Investments
Joshua Kushner said that Thrive manages $60 billion in assets. The gross internal rate of return across all funds is 41%, while the net rate is 33%. Over the previous 12 months, the firm returned more than $1 billion in liquidity to investors.
Thrive’s key investments include OpenAI, Anduril, SpaceX, Wiz, Ramp, Stripe, and Cursor.
Not every fast-growing business is exceptional. And not every exceptional company is a great investment at any price. Our duty is to preserve these distinctions.
Joshua Kushner acknowledged that different venture investment models can be profitable. At the same time, he stressed that the excitement surrounding artificial intelligence does not mean every company in the sector is automatically a sound investment. The decisive factor remains the ability to distinguish genuine technological potential from inflated market expectations.
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