When AI becomes the interface for everything, every tool we have, every technology we use is going to be built on these models. And the models are not objective. They have opinions. They have strong opinions on things like history, on culture, on values. And those are very different depending where you are.
Deterrence is no longer just the size of a military. It's the pace of innovation in reacting to cheap software-built tech that adversaries may be using, whether they're a country, criminal, or a terrorist group. And those technologies today are not being built by governments. They're being built by the private sector.
Products and technology travel faster than companies can. So what happens is, for startup companies, usually in the olden days, you didn't care about going international until you had a few hundred million in revenue. Now these companies have to go sooner and sooner internationally.
The number one question we often get when we're visiting different countries is, how do you recreate Silicon Valley locally?
I don't think that's true, by the way. I think that's happy talk.
We are here to talk international today. Lots of things going on at the firm. For a firm that used to historically be all centered in Menlo Park, and we didn't even want to open up a San Francisco office, this is a big change for us. So Ben, why don't you take us through this announcement around our global ambition and how all the pieces between global affairs, international go-to-market, LP relations on the global partnership level kind of fit together.
Yeah. Well, it really kind of starts with America, interestingly. And you know, it's kind of been our belief, our strong belief that, you know, if you drop a person into any country in the world and they don't have the culture and they don't have money and capital resources yet, and they just have an idea of how to make the world a better place, their best shot is in America. And that's just a very, very special thing. And so a big mission of our firm is kind of trying to preserve that special thing that is America. And that means America has to be a leader. It has to be a leader economically. It has to be a leader culturally. It has to be a leader militarily. And to do that we have to be a leader technologically. We have to be a tech leader. And that's kind of really our role in the ecosystem and in the world is to help America be a leader. And then what we realized as we've gotten further along with this mission is that we need to kind of bring in our partners, our allies into that mission. And it kind of started with the work that you're doing, Jen, with just people from around the world wanting to kind of participate in the US technological opportunity. And that kind of meant, you know, we started getting investors from around the world. And as we went out to see those investors and we said, you know, look, how can we be a better partner, we found some interesting things. So one is every country wants to not only kind of economically benefit from the technology, but they'd like to actually directly benefit from the technology. Can you bring it to us? Can we get a chance to use it? And then at a kind of higher level, you know, at the government policy level, people wanted to know, well, how can we be a great country for adopting technology, for innovating like you guys are, and for kind of helping push our country into the future. And you know, as we looked at, okay, how do we kind of step up and step into that opportunity and be a good partner, we realized with our country partners we needed relationships at the government level, at the investor level, at the adoption level, and that's what these three components become. So we've got global affairs, which builds our relationships, led by Ann, which helps us have relationships in the right way with governments ranging from Saudi Arabia to Japan to Mexico. And we've had just great conversations with all of them. Then we have people who invest, you know, sometimes those are the government, sometimes they're various companies in the government, sometimes they're companies who actually handle government money in the form of pensions. And then finally, you know, both the government and the businesses want to adopt the technology, and that's where kind of Ragu's effort comes in, where we have the go-to-market component.
And I'm going to get you involved here. How much of your decision to join a16z was motivated by this mission and also the sense of duty and helping other countries think about the adoption of AI and not wanting to get left behind in AI, like Ben was alluding to very much so?
You know, what I saw happen in the years in the intelligence community and then the White House is technology moved from being a tool of diplomacy, of national power, to the arena of it, where the supply chain for chips was not a technology issue as much as a foundational economic and national security issue. The supply chain for the components that go into drugs. When used by one country to constrain or have impact on another country, it becomes a tool of national power.
A software vulnerability is now not an IT issue.
It can be a source of leverage, particularly if that vulnerability is in key parts of your power systems or your water systems.
So I saw that shift happen from tech being either an IT issue or just a tool to the central arena of both economic growth and national power. And quite frankly, from a deterrence perspective, which is the language we talk about between countries in terms of deterring an invasion of a country, maintaining an international system of stability, you know, deterrence is no longer just the size of a military. I think as we see in the Strait of Hormuz or we saw in the Red Sea, it's the pace of innovation in reacting to cheap software-built tech that adversaries may be using, whether they're a country, criminal, or a terrorist group.
And those technologies today are not being built by governments. They're being built by the private sector. Whether that's AI systems, whether that's autonomous systems, whether that's cyber defense systems, they are being built in the private sector. So certainly from a US perspective, ensuring that we have the relationships between government and private sector to leverage that for our own economic growth and as a force for good on the world stage, but also that our allies as well, we build together, we fight together, and to ensure that together we can both have the advantages of that, and to the extent that our tech also represents our values.
It's important that the world run on America and on Western tech. Yeah, actually that's a great point on the values point, because Ben, you've said before, no country also wants to get colonized in cyberspace, right? Particularly because AI is now just getting built in the six-block radius in San Francisco. Say a little bit more about that.
Well, you know, when AI becomes the interface for everything, so every tool we have, every technology we use, every kind of system we have, from your car to your refrigerator to your education system, is going to be built on these models. And the models are not objective. They have opinions, and they have strong opinions on things like history, on culture, on ethics, on values. And by the way, those are very different depending where you are. You know, the history of wars and the history of a country and laws and whether that country was a good actor or a bad actor are all very different depending on where you're getting the information from. And so if you believe that, you know, as I do, that for all our flaws, our fundamental values and ideas about everything from the way our economic system works to the rule of law have resulted in basically the best opportunities for humans in the world, then you want those values to be projected onto the world more so than to be the recipients of some other values, which, you know, maybe were good at a time or maybe, you know, have some merits, but overall don't give people a real opportunity.
Yeah, giving people a chance. That was the premise of the original announcement we did for our fund announcement earlier this year, and the importance of that, and then particularly extending that chance to the allies of America as well. Ragu, I want to get you involved on this as well, because portfolio companies are increasingly going international way sooner. They're multi-country, multi-channel, multi-product way sooner in the life cycle. How much of this is also accelerated by what's happening in AI and just the ability to push out software updates right, just immediately?
Yeah. I mean, the reality is that products and technology travel faster than companies can, right? Because if you've got a great product, everybody learns about it very quickly, instantaneously. You can access it through APIs wherever in the world you are. You can build on top of those things. So what happens is, for startup companies, usually in the olden days, you didn't care about going international until you had a few hundred million dollars in revenue, etc. Now these companies have to go sooner and sooner internationally. So while the products are being discovered internationally sooner, also to Ben's earlier point, it's easier to adapt these products for local markets much more easily thanks to AI, or as AI becomes the interface, to localize and internationalize these products, it's so much easier. But in order to capitalize on the opportunity at scale, things don't change, right? I mean, you still have to be in region. You still have to understand the market structure of the region that you want to operate in. You have to understand partnerships, you have to build relationships. Lots of other countries have very relationship-based economies, not transaction-based economies. So it's this interesting blend where you've got the technology moves really fast, but the way you do business hasn't changed that fast.
Yeah. Actually, so a really great example of what Ragu was talking about. So when we were in Mexico recently, we were meeting with the CEO of Televisa Univision, which is Alfonso Angua, who is a great friend of the firm, one of our global partners. And we were asking about, gee, you know, what are your struggles? And one of his challenges is, you know, he really faces heavy competition from some of the global streamers like Netflix or Disney or so forth, who have this US technology that's very powerful. But he has this unbelievable Spanish-speaking content. But it was hard for him to get to play on a global basis because it's in Spanish. It's a Mexican Spanish accent, which is different than an Argentinian Spanish or Colombian Spanish accent. And you know, he's like, you know, how should we solve this? And we're like, well, we've got this great company, ElevenLabs. They can help you with it. We put them together in a couple of months. He was in, you know, France and Poland and all over the world with this incredible technology that had his actors basically acting exactly as they normally do, with their right kind of intonations, their right laugh, everything, but in different languages. And he recently, based on that success, got a big deal with Netflix. And so here we have something where we can bring our partners who, you know, have a great product that's culturally local but really, really interesting, and make it a global product by, you know, not competing with their allies but partnering with their allies. And I think that's a lot of what the program is about.
And I want to tie what Ben just said back to the values point, because people often ask us, you know, Chinese open source models, how do you compare and contrast? So in that case, they didn't have to worry that when the content was dubbed into different languages, that if the speaker said something sensitive about Tiananmen Square or sensitive regarding the Chinese government, that using an American model, that content would be translated and changed along the way, right? They knew it would be true to what was said. And that's what we mean when we talk about American values of not censoring, not injecting political will into how these models operate in the way that one would contrast. Now, open source is something we deeply value, because at the end of the day, there's all different kinds of models and all different kinds of price points, clearly. But that's really a good example of what we mean when we say American and Western values reflected in the models that we deploy around our infrastructure.
For sure, the telenovelas are spicy enough. I don't know how much the introduction of Tiananmen Square needs to be introduced necessarily in the storyline, but you never know, the border crossings, etc.
Good point. They keep their audience well enough.
Exactly. Exactly. But this actually is a core part. You know, when Paddy McCormack wrote the article about us earlier this year, he called us a power broker, and power being part of an offering that we enable our founders to tap into. And for a lot of companies, you know, starting a Mexico office, for example, is probably not one, two, three, maybe even top ten on their list. But if they have a deal that we're able to walk in and effectively enable them a shot at winning way earlier in the life cycle, they might prioritize that. So maybe if you want to riff on that, Ragu, Ben, on particularly how that's changed for founders, they think about international when they have the benefit of being able to go right to the buyers in a much more adept way than kind of figuring out a market from scratch.
Yeah. I mean, a lot of markets are very top-heavy, right? So you take any mature business and you say, how much of your revenue comes from even companies like, I mean, countries like the UK, a significant chunk is going to come from the very, very top companies in the UK, right? So the reality is, whichever country you look at, it's five or ten companies that matter. And of course, the government is a big influencer and buyer. So the example that you gave in Mexico is great, right? I mean, there are a few global companies in Mexico, like the one that Ben talked about. And so the only way you could, it is not worthwhile setting up an office and serving all of the countries, right? But if you could get into the top five companies in Mexico, that probably is worth a lot more than setting up a full operation in some other country. So it is the top-heavy nature and the relationship-heavy nature that helps our portfolio of companies.
Right. And the thing, there's a couple of other aspects that are important. One is, like, you're right that Mexico probably isn't a top ten thing that most companies go into first. And by the way, that's a terrible shame because Mexico is our neighbor. And from a, you know, when we think about it from a national security standpoint, how powerful would it be to have a Western Hemisphere supply chain ecosystem that was really, really well connected? So I think it's kind of bad for the country that it is number ten. Secondly, you know, to open a country as a company is a very large expense. You have to set up an entity, you have to hire a team, you have to localize the product. And you know, that's going to be, you know, depending on the country, depending on how committed you are to it, it could be like easily five or ten million just to get to your first deal. And so that is going to delay in your life cycle when you can go international. But what if, you know, what if before you ever put up an entity or ever kind of got started in that country, you had an opportunity, a big opportunity, a five million dollar opportunity, a ten million dollar opportunity that makes that investment much easier to do earlier. And so we can really enable both our companies and our allies by kind of paving the way for that kind of thing. A great example is like nobody's going to Saudi Arabia first. However, like Saudi Arabia is booming, and there are great opportunities there, and they really need our help in developing the country. They're modernizing, which is incredibly important to the security of the world, that, you know, Saudi Arabia is going from this kind of tribal, different kind of society, I would just say, to kind of a modern, you know, like highly civilized, you know, player in the modern world and full ally of the United States. Like that transition is really important that it succeeds. So we're able to take a company like Flo, Adam Neumann's company, bring them to Saudi Arabia, introduce them to the right people in the government, introduce them to the right people in business, introduce them to the right investors. You know, it's the optimal place to live if you're an expat, you know, kind of moving to Riyadh, help develop the economy. And it's something that just, it's not really possible without an effort like this.
For sure. For sure. Maybe let's talk about geos we're prioritizing because there's a handful. Japan, Korea, the Middle East, Mexico, Canada. Are there themes as we think about different countries that make more sense versus others?
Yeah, this is timely. Ragu and I have been debating this. So I would just say, like, I think, you know, from our standpoint, it's very powerful when they're a strong ally of the US. We've got a relationship with the people in government. We've got a relationship with the people in business. We've got a relationship with the investors. You know, because those things are not separate. They all interact with each other. And if we, you know, have that, then we can really, really accelerate the opportunities for them and for us.
I think what I would just say to that point, building on Ben's point, and then I'll turn it over to Ragu, is what's changed so much, as we talked about a moment ago, is that on the global stage, whether it's in the context of or whether it's in the context of countries pressuring other countries via supply chains, there are parts of the world which we have close allies who are now in increasingly tenuous positions. So if we look at the Indo-Pacific region, China has vastly increased its military, vastly increased the number of nuclear capabilities that it has, uses various, their shipbuilding capability are orders of magnitude more than the United States, and our allies in the region have started responding. Japan has changed its really sacrosanct policy from in the post-World War II period to say it must have a capable military.
It wants to build the military to fight today's wars, not yesterday's wars. It doesn't necessarily have the military-industrial base. Now, that cuts both ways. As we know from the own kind of the halting steps the United States military has been taking, the number of defense reform policies that have been written in the last twenty years, they all say the same thing, right? Fewer small numbers of exquisite platforms, more cheaper, larger numbers of platforms in addition to very exquisite platforms for certain specific use cases. So as Japan thinks about building a capable military in order to deter aggression in the region, it is looking to partner with new firms building autonomous ships, building AI for an integrated battle space, and they want to build with us. They don't want to just buy because they have their own capabilities they want in their own country, their own supply chains to protect. So I think a part of that is thinking about those regions of the world. I talked about one in the Indo-Pacific region that covers Australia as well. Obviously, certainly the Middle East has been an area of American interest for a long time. Israel is an incredible capable ally with capable military and intelligence community. The UAE is as well. Saudi Arabia is modernizing and thinking about AI and infra, how it builds an innovation, entrepreneurial innovation base in order to compete globally. And then certainly when we think about Latin America, when we think about fentanyl coming into the United States, it comes in via Mexico. So public safety, national security, how autonomous ships can help a vast Mexican coastline are not only important to our ally and to the stability of Latin America, it's important to us as well. So I think that's at least the national security lens we bring to some of our partnerships in American dynamism or in the AI infra space.
Yeah. I mean, it's the reason Ben and I have been debating is there are so many sides to this that you got to bring it all together. Firstly, to Ann's point, you got to be a lot, it has to make a lot of sense from America's interest point of view, right? And that is abundantly existing in all these countries. These governments are very AI-forward and they're putting in policies that are very modernization-centric, whether it's in defense or across the economy. Thirdly, they are all top-heavy economies. I mean, you go hit the top companies, you are actually having global influence. For example, all those North Asian countries that you talked about, I think fifteen, twenty percent of the global two thousand are across Japan, Korea, Taiwan. Right. And then lastly, for our startups, it's this, the way business is done in these countries is very different than, let's say, UK or some English-speaking country, right? So the value add that we can provide to these, to our startups and the value add we can provide to these countries is so remarkably higher than in other places. So when you put it all up and score it out, that's why we go into these countries.
Yeah. And some of these countries are also leapfrogging too, where they didn't have to deal with the prior.
Exactly. Like technology, like Saudi, you go through the visa entry and it takes thirty seconds, like way that snap wasn't good. Thirty seconds to go through the visa entry, which is like unbelievable. And you know, here you get stuck behind, unfortunately, a very long line, increasingly for a number of different other reasons. But you know, it's a different kind of approach to how you think about incorporating technology in everyday life, but it's not evenly distributed. So what are ways we can accelerate that in different avenues is also the opportunity that a lot of these countries are seeing as a huge unlock.
