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BG2 · 3 min · Jul 10, 2025

Private capital gives AI labs room to spend on talent

Bill Gurley · General partner, Benchmark

Bill Gurley links AI pay packages to private investors' willingness to fund large losses.

In this episode

Full episode
  1. 4:09Dell’s six-day inventory created a lasting cash advantagePro pick 4 min
  2. 46:13AI productivity could justify trillions in annual investment7 min
  3. 57:13AI compute demand grows as models use more tokensPro pick 5 min
  4. 53:39Dell's AI server orders exceeded its prior-year shipments4 min
  5. 36:55Private capital gives AI labs room to spend on talent3 min
  6. 18:59Invest America accounts allow tax-free employer contributions4 min
  7. 27:37Dell distinguishes national debt from a spending problem3 min
  8. 1:12:17Export rules can leave foreign-made substitutes unrestricted3 min
“private companies have an odd advantage against public companies in that their investors are more willing to let them lose a lot of money”
Bill Gurleyat 38:00 · BG2
38:00

Takeaways

  1. Late-stage investors have funded AI labs willing to burn billions.
  2. Private firms can offer liquidity earlier than public-market peers.
  3. Gurley describes Meta's hiring push as an unusually large bet.

About this segment

Bill Gurley links AI pay packages to private investors' willingness to fund large losses. That gives private labs more room to compete for talent than public companies may have.

Bill Gurley, Host

General partner, Benchmark

Backed and sat on the boards of Uber, Zillow, OpenTable and Stitch Fix.

  • Brad Gerstner, Host · Founder & CEO, Altimeter Capital

    Started Altimeter with under $3M in 2008; an early backer of Snowflake.

From “Michael Dell – Invest America Act Becomes Law, AI Talent Wars, Compute Demand, Market Update | BG2”, Jul 10, 2025. Watch the full episode

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

  1. 37:00

    What do you think the downstream implications of this are? Well, I mean, I would back up a little bit. I don't think it started with Meta. I mean, I think it started with the cycle that we've been under in the private funding market. We saw some of this stuff during ZERP, but we've moved to a world. And I talk about this in detail on O'Shaughnessy's podcast, if someone wants to go listen to it from a few weeks back. But we've evolved to a place where when there's a successful company, the late stage private market writ large tries to shovel feed cash into them.

  2. 37:38

    And so we have private companies that have raised not just 100 million, but a billion or more. And we have a handful of private companies, including OpenAI, who are voracious and audacious enough to burn two, three, four, five billion dollars a year. And so you start doing that and you create a situation where private companies, and we saw this a lot during Zerk, but private companies have an odd advantage against public companies in that their investors are more willing to let them lose a lot of money, then the public investment, you know, investors may be willing to. And so they get bold and they get audacious. And, you know, OpenAI, Anthropic, they were all paying people tons of money before Meta did this. They were paying them 10 million a year, you know, maybe smaller than what you were talking about, but they were doing it. And they were providing

  3. 38:40

    liquidity earlier, like two years in, instead of waiting for four. And liquidity is a private company and all of these things, which in some cases may have let these people leave because they didn't have any lock in. So that part may have backfired. But in Zuck, you know, you have someone who's had his back against the wall a couple of times and gotten bold and changed what he was doing and succeeded again. And so he has conviction that he's willing to take a big bet.

  4. 39:11

    I think he's very willing to look at cost as a percentage of his market cap. And if you risk spending against a percentage of his market cap, not everyone's capable of doing that. I think it may be the right math, actually, in terms of how big a bet he wants to make. But yeah, what he has done here in the past three weeks is it is an experiment that's never been tried before, but there's unlimited free agency in business, unlike sports. And he just went and bought the, you know, 27 Yankees, you know, of AI. Yeah. I mean, and I think your point is a great one.

  5. 39:49

    And listen, we're shareholders in Meta, we're shareholders in OpenAI. I wouldn't be a shareholder