David Clark

If I was looking at the loss ratio for the last couple of years in the AI space, I mean, it's not zero, but it's probably single figures, percentages.

And that's not sustainable.

So how do you kind of think around where we are kind of in that cycle today?

Because at some stage, the laws of gravity will reassert themselves.

Yeah, yeah.

So it's funny, one of my colleagues was at a conference yesterday that was run by the UK Venture Capital Association.

And they surveyed the audience saying,

What do you think about AI valuations today?

Too high, about right, too low.

80% said too high, about 6% said too low.

And as I kind of think of the AI universe, it feels like that's probably about the right balance because I think 80% of companies probably are overvalued today because we know most of the companies aren't going to work historically.

Yeah.

And there's probably going to be a small subset of those companies that are massively undervalued because they're the ones that are going to emerge as the leaders and we'll see multiples of where they are, where they're being valued today.

And I think from an LP perspective, I really would struggle to be in your shoes today because having to pick those individual companies, I know you can kind of put a portfolio together, but...

One of the advantages, I think, from being in the LP seat is that we can have a really broad and diversified portfolio of the potential outliers in that AI space.

And we know historically that that basket will increase in value over time, even as the majority of those companies might fall away.

Yeah, yeah.

We also get lots of questions around, are we in an AI bubble?

And one of the things that it feels that feels different today is that, you know, typically bubbles are characterized by excess supply destroying the economy.

Today, we're in a situation where there's scarcity.