Prabhu Balasubramanian

We hosted Bret Taylor (Chair of OpenAI and Co‑Founder of Sierra) in San Francisco for a live taping of The Verge’s Decoder with Alex Heath. I had the privilege of co‑moderating a closed‑door roundtable on agentic AI and the future of enterprise software with industry leaders and investors. The discussion was candid on what’s working, what’s stalling AI at scale, and what leaders do next. Key themes: – AI tech is ready; organizations aren’t. Trust, governance, and culture are the real unlocks. – Agentic AI is exploding in internal use. In revenue‑critical customer workflows, leaders are far more cautious. – SaaS pricing models are under real pressure as AI reshapes value; buyers want more control, not surprises. – Auditability, transparency, and human‑in‑the‑loop design are non‑negotiable for agentic trust. – Executives and teams must become AI orchestrators. Upskilling is now a leadership responsibility. The Decoder conversation with Bret and Alex is live here: https://lnkd.in/gNjWuutD Grateful to Bret Taylor, Alex Heath, OpenAI, Sierra, and our AlixPartners team for making it happen.

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What a great example of #airporttech! I like the "...friendly nudge by an officer." Excellent use case of curb management. Thank you Andrew K Kirk and Automotus for your partnership. INRIX #airports #govtech

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Seattle VC panels are not exactly known for being spicy, which is why my AMA with Brooke and Rolanda at AI House last night was so refreshing. We got into the questions founders are too embarrassed to ask out loud. How do VCs actually decide behind closed doors? What counts as traction when you have zero revenue? Is enterprise SaaS dead? Do Seattle founders actually have a shot against the Bay Area? A few takeaways that stood out: ✅ Associates can't get to yes without a partner sponsor — but partners often can't reach deals without associate diligence. Arm them with the facts to fight for you internally. ✅ Expect 50-70 investor conversations before a term sheet. Send your deck a day early but assume nobody read it 😎 ✅ Enterprise SaaS isn't dead, but it's shifting from seat-based to usage and outcome-based pricing. Large orgs still need governed software. ✅ Traction isn't just revenue. How excited are your customers? Would they advocate for you? Paying pilots with automatic, KPI-specific conversion > free trials, every time. ✅ Learning slope > starting background. The strongest founders they've backed adapted fast — not started perfect. Brooke and Rolanda WILL take a second meeting even if you whiff the first one! ✅ Seattle has fantastic enterprise buyers and founders with sales relationships into them. But the equity-vs-cash culture gap is real, and hiring against big tech is still hard. What made it different was how candid Brooke and Rolanda were about what actually happens after your pitch ends, aka the internal deal dynamics most founders never see. Shoutout to the room full of 100+ early-stage founders who went against the Seattle grain and asked hard questions live to the VCs. That energy is what makes AI House work. Huge thanks to Brooke B. (FUSE) and Rolanda Fu (Madrona) for keeping it real! More AMAs like this coming. Tag a founder who we should invite for the next one! #AIHouse (photo credit to Jonathan G. Blanco 🛠)

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We chose a good subject for our march Autotech Council meeting, and after this year's CES, it seems even more obvious. Our meeting on the AI Defined Vehicle will show how it's a natural next step after the Software Defined Vehicle phase that we've been in Tesla launched the Model S in 2012. Now, most carmakers have SDVs. It's time to layer on the AI in user-facing roles, and in invisible functions managing the vehicle.

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What may seem as a whimsical experiment by Anthropic in reality provides some intel into the state of agentic AI: - AI is naive and easily fooled, don't be either - Use multi-agent systems for checks and balances - Don't trust AI with business or monetary decisions yet! Well worth a watch. Wonderful project, Anthropic #ai #agenticai

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My thoughts on the Great Waymo Outage and what it means for human acceptance of AI/technology. Two quick hits. Waymo needs a more graceful failure mode. Just pulling to the roadside might work in a normal power outage but not in, say, a wildfire or in the aftermath of a quake when people need to get out of harm's way. People also need to reconcile that the big, scary outages are easy to fixate on but mask the overall higher levels of safety and reliability we will be seeing from mature (note the word) AI systems. https://lnkd.in/gwnUA_hJ

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Adding to Bob Pearson’s comment, I would also emphasize that the biggest advantage is capital availability and the risk-taking mindset that goes along with it. Silicon Valley VC was being born by people like Arthur Patterson (one of my longest-time backers and mentors), since I was born. Austin, by contrast, was the size of Anchorage, Alaska when I was born. Austin is definitely doing the best it ever has and I’m happy to be here. But the biggest risk-taking and capital-availability advantage remains in SV due to the compounding effect over decades. Also, remember Debra and I lived in SF during the massive boom and bust years, from the beginning of 2000 to mid 2003. There will certainly be an AI application bust, like Mitchell Green, is predicting but overall the trajectory is correct. AI will affect everything and therefore deserves the capital allocation it’s receiving. But most AI applications will not be durable enough to survive the growth of frontier model scope and ambitions, similar to Microsoft Windows back in the day and the many companies it put out of business.

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This week's Waymo revelation hit differently for me. Turns out those "fully autonomous" robotaxis navigating Los Angeles streets? They're being remotely assisted by human operators in the Philippines during complex scenarios. Not occasionally. Regularly!!! It reminded me of Builder.ai's spectacular unraveling in 2021, when journalists discovered their "AI-powered app development platform" was actually dozens of human engineers in India manually writing code. The AI was mostly PowerPoint. And they're far from alone: Facebook's "AI" content moderation in 2018? Thousands of human moderators in developing countries watching traumatic content for $1/hour while the company publicly credited AI. Amazon Go's "Just Walk Out" technology? Required 1,000+ human reviewers in India checking transactions because the computer vision struggled with accuracy. They quietly phased it out last year. Google Duplex's restaurant booking demo in 2018? 25% of calls were actually made by humans. Even today, many "AI assistant" calls have humans in the loop. I'm not anti-AI. As someone who's spent years analyzing technology markets, I'm bullish on where we're heading. But here's what bothers me: the gap between marketing promises and operational reality erodes trust in genuinely transformative technology. When companies oversell AI capabilities: - They set unrealistic expectations for the industry - They exploit low-wage workers in developing countries while claiming automation - They make it harder for honest innovators to get funding - They delay necessary conversations about AI's actual limitations and ethical guardrails The irony? Waymo's technology IS impressive. Acknowledging human oversight doesn't diminish that—it actually makes their safety record more credible. But they waited until investigative journalists forced the conversation. *Here's my ask*: If you're building or investing in AI, be honest about what's AI and what's humans-in-the-loop. There's no shame in hybrid models. There IS shame in calling something autonomous when it manifestly isn't. The real breakthrough won't be perfect AI. It'll be building systems where humans and machines complement each other transparently, ethically, and effectively. What other "AI" companies have surprised you with the reality behind their technology? #AI #ArtificialIntelligence #TechEthics #AutonomousVehicles #Innovation #TechAccountability

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AI and CA Regulation 📣 - As California goes - so do the rest? I'm now working with CA legislators on AI literacy, which is promising! California Governor Gavin Newsom signed into state law on Monday a requirement that AI developers disclose how they plan to mitigate potential catastrophic risks from their cutting-edge AI models. "The new law requires companies with more than $500 million in revenue to assess the risk that their cutting-edge technology could break free of human control or aid the development of bioweapons, and disclose those assessments to the public. It allows for fines of up to $1 million per violation." Jack Clark, co-founder of AI company Anthropic, called the law "a strong framework that balances public safety with continued innovation." AIandYou #airegulation #aisafety #CAai https://lnkd.in/gafzVeTq

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