I've never understood why rational people believe in God. It just makes no sense. I didn't sour on philanthropy. I soured on the efficiency with which philanthropy works. Are you going to go all in for AOC in the president? I feel like you're much more to the left than you even sort of see yourself. Don't your fellow venture capitalists want to murder you over this? Is Vinod Khosla in 25 years a socialist?
He called technology his religion before AI existed. Now he thinks it can deliver something no religion ever could: material abundance for everyone on Earth. Today I'm talking to Vinod Khosla, founder of Khosla Ventures, one of the earliest VCs to bet on OpenAI. I couldn't get my head around why he seems to support tons of liberal programs but hates AOC and Mamdani. We're talking post-capitalism, the Silicon Valley New Deal, and why this billionaire thinks a little differently from his friends in venture capital. I'm Eric Newcomer, author of the Newcomer Substack, where I write about startups and venture capital. Now, let's get into it.
I was looking at an old 2014 interview you did where you said, 'Technology is my religion.' And I think that dates back, you know, I think that was a take you started cooking up maybe in the early 2000s. And now we live in this world of AI. Obviously, you were the first venture capital investor in AI. It feels like AI could create a religion of its own. Is technology still your religion?
It is. And you know, since I was a little kid, I've had an opposition to religion because especially in India, it's about manipulating people to do your bidding and really give you revenue. If I look at the Catholic Church, all the money it collects from all over the developing world is just criminal and it goes into gold accoutrements in the Vatican. It's a poor use of money. When you look at technology, it has the ability to benefit humanity in a way no other technology does. If I look at where we are today, probably 10% of the global population has a rich lifestyle. And by rich I mean rich in housing, rich in health care, rich in entertainment, rich in transportation, rich in education. If we get to 100% of the population being rich in everything, we'll destroy the planet if we do it the way we've done it for the top 10%. Ten times the number of cars, ten times the amount of cement or steel or energy or everything else. The only solution that's necessary, it's not sufficient, it's necessary but not sufficient, is to have technology multiply resources. And in fact, I've long believed that and said technology can help. And with the advent of AI, which was not really a thing when I first said this, it's become so real to me that the world can be such a different place in the next 25 years. By 2050, we can have a very different world.
There's so much we're going to untangle, I think, with this one idea, right? Because there's the piece of it that is improving quality of life, really the main thing we can sort of deliver to people because I think we're also in this crisis of meaning. There's the climate element. There's how technology, what it's like, you know, to be a billionaire 100 years ago and whether that's better, you'd rather be alive today or, you know, the super wealthy of 100 years ago. So there's so many pieces of it I want to get into and we will get into. Just the first, when you say like technology is a religion, you don't believe in God, right?
Yeah, we share that. I grew up, my mom's partner was a Unitarian Universalist minister in Macon, Georgia. So I was very much, you know, the liberal moms in the south arguing with people about, oh, there's no God. I literally in public school have teachers on the board trying to, which I love, trying to make arguments for, you know, religion because it was, you know, so I share that sort of, you know, not believing in God. But I think at the same time there's this crisis of meaning in the country right now. Do you think technology and the technology industry can really like give the public sort of the meaning they crave? And is just like improving their quality of life the same thing as giving them an answer to this question: What is meaning?
Those are very different questions, right? I've never understood why rational people believe in God. It just makes no sense. I will even admit there's some infinitesimally small probability God exists, but there's no proof. In fact, all the proof is to the contrary. But you still have to allow for a probability that's very, very low. But if you're rational, you believe in the highest probability things, which is no god exists because there's never been proof of god. Why do people believe in it? Because their brains have been programmed from age three or four to do this. And so being religious is being programmed by an ecosystem. And so my worldview is meaning shouldn't come from being programmed. Then you're a slave to God and open to exploitation by religion as a surrogate for God. I'd rather say what are you programmed to do, and I won't go into the meaning of life, but...
Well, that is sort of what I'm getting at though, because I get, certainly I agree with you, we shouldn't...
Let me explain that a little differently. What should the brain be programmed to do? In the old world, there was religion. It was the only way to keep people under control. In fact, 500 years ago, you couldn't even get to a remote location. Maybe by horseback, it took five days. You couldn't enforce any laws. And so, you had to have the fear of God in people as a law enforcement mechanism to be good. Otherwise, God would punish you. So maybe it even served a really useful purpose a long time ago of law enforcement was the purpose of the fear of God. Today, and if I look at the last 50 years, what do we program kids with? We program kids with: if you're five, go to school, do your homework, do well, you go to college, you'll get a good job. So all of it is about income and supporting yourself. It's not about meaning. I think what changes dramatically is for today's five-year-old child born today. I had a grandchild born two weeks ago. When...
You had a grandchild born. Congratulations. I have a seven-month-old daughter. So I'm new to this game now. But it's altering. It's amazing to me. I mean, meaning at the moment is reading a children's book. Like, if I had to ask directly, like, 'What is meaning in your life?' it is, even though she doesn't really understand it right now, just having her pay attention and reading a book with beautiful art and rhyme and human language.
Look, so that is a different kind of meaning whether you're a human being or an animal. Looking after our young is just instinctive. Otherwise, we wouldn't multiply as a species. So, what will my grandchild when they're five be programmed with? Hopefully, to be human, to care about the things that today people don't have time for. Looking after their kids, looking after their grandparents, parents, the relationships that matter. I think that should be meaning, striving to be whatever you want to be good at. And this could be pretty random. I want to be awesome at surfing. I want to be awesome at singing. I want to be awesome at painting. I want to be awesome...
Are you post-capitalist now? Because you're saying that the story recently was do all the right things, climb the ladder, get a great job. Now you're saying go surfing, spend time with your family. Like, is this...
I'm saying for the first time kids born now will be able to exercise freedom. Look at most of the jobs in this country today. They're not jobs. They're not meaningful jobs even though people call them meaningful. If you're a farm worker in Salinas in 100-degree heat picking lettuce eight hours a day for 30 or 40 years and then don't have retirement income, so you're dependent on your kids. That's not jobs. If you're an assembly line worker at General Motors, mounting a tire on a car for eight hours a day for 30 or 40 years or till your back gives out, that's not a job. That's servitude to survival. I think that's what it is.
So, do you think the American social contract, like if you're going to spend time with my kids and surf, should America provide you health care and the basic standard of living? Or do you need to still find, even if it's just 10 hours a week, something that the economy says is meaningful?
Well, first, in 25 years, we can have great abundance. So people don't have to strive for a living. They don't have to do everything so they can pay their mortgage or support their kids or feed their kids. And it's sad when you have to do that but it's necessity today, an economic necessity that will go away. I think all goods will become abundant almost every level. You'll have so much abundance. Distribution won't be an issue. People will still be people. People love competing. So today it's I have a bigger house because I have a better job and I can do more. I think it'll be competing in the Olympics. It'll be competing in X Games. Or...
You're saying that's where we'll get meaning or that's where we'll get money?
That's where we will get meaning.
Okay. Because competing is a human trait, right? We'll still need money to allocate like zero-sum resources like houses.
Yes, there are few, and housing is the one area that is the hardest to see how it's dramatically impacted. I could see the cost of housing going down by 20 or 30%. And we can go down that alley later. It's hard because it's so much physical goods. But will we have shortage of copper or lithium? No.
So is Vinod Khosla in 25 years a socialist?
I believe we will have so much abundance and depends on how you define socialism or capitalism. Socialism is not everybody shares equally. My personal view is everybody gets a base level of guaranteed lifestyle provided by the government and that's the socialist part but then they can do more whether they choose to pursue more income or their passion and happens to generate income. I don't think Beyonce got into singing for making more money. She got in because she has a passion for singing but it also happens to generate money. So I do think people will follow, for the first time kids born today will be free to follow their passion and be more human than they've been allowed to be in the face of economic pressures. I think that's the big liberation. AI will free humans to be humans and do what they come naturally: spend time with their kids, spend time with their parents, spend time on their passion.
I think there are a lot of people watching this that are going to say, 'Why not cash in now?' Like, we have a technological abundance today. You know, we could produce the food that we need. Why not sort of create the utopia today? Why is it always sort of, you know, a couple decades from now?
Today, there's a distribution problem. Okay? Because goods aren't cheap. You know there's no question in a few years even now you could provide free primary care to every citizen in this country, in fact every citizen of the planet, all billion and a half people in India could get free primary care, free...
This is like a bridge open, you're saying use AI tools...
Yeah, I'm saying AI doctors, not AI tools. Tools are for humans to use. I think we are past that. Free AI tutors for every child, and I'm doing such a project in India to make free AI tutors for every child. It's a nonprofit effort. Free AI doctors for every person...
And it's not only just the primary care doctor because the same AI is also a great endocrinologist or a great gastroenterologist...
AI oncologist. Everybody gets that and it's almost free. It's cheap enough where one person can do it for a country like India. And I hope we can do that. I'm also doing an AI agronomist for the small farmers. So those things should all be free. Entertainment should be near free. The cost of production is going down dramatically. People talk about AI slop, but it's on the learning curve of improving at such a fast pace. Soon we will have AI that's tuned to each person that they love based on their watching history and maybe their rating history. So entertainment, legal services, so people can access their legal rights, education, healthcare, those can all be free. Anything that relies on expertise will cost a dollar an hour.
I mean a key insight here is that things that don't require asking another person to do work for you, where something can be autonomously provided, is something that can be a benefit versus, you know, sometimes the socialist case goes wrong when they're sort of insisting upon other people acting on their behalf and taking their time for themselves and relying on the efficiency of people doing things because people have other motivations.
AI will be just as efficient in government as outside. You know, it's something people haven't... efficiency comes from humans, or inefficiency in government comes from humans and bureaucracy and all that. All that can be automated away. So my view, we enter this world of abundance, and back to your original question, where will people follow meaning? Because they will be programmed from age five to express their desires and be themselves, whether it's their relationship with their parents or it's a relationship with their passion for sports or art or something else. I think that's a very liberating kind of idea.
It's very structured. It's very, you're sort of trusting the average person to create their like self-story. I feel like a challenge of the Trump world is that people want these leaders that, you know, fascism is appealing because it's like this strong man leader who you can project all these views onto. Like who do you think like should be our society's like heroes today?
Who are our heroes today? Right. I would say, used to be, you know, I like to say used to be only the basketball stars, right, the sports stars. And then when entrepreneurship really became a thing in the late 90s, and it existed long before then but people got to recognize a Larry Page or a Mark Zuckerberg and they became heroes, so lots of people started thinking they could be an entrepreneur. I think the next big turn, first, most of corporate America should be four times more efficient, which means to get the same amount of goods and services maybe one-fourth or one-tenth the number of people per enterprise. What happens to the rest of the people? They can be micro-entrepreneurs. How many people want to work at IBM four levels down at a desk, or would they rather be their own boss? I think micro-entrepreneurship becomes trivially easy because AI does your accounting for you.
Like I'm the hero. I'm a solo or now small business owner and...
Yeah, all the whole creator phenomena is because it became easy to be a creator if you had some talent, right? And so we've seen millions and millions of creators created almost overnight in the last couple of years. Projected forward many, many times. If you're a great baker and make the greatest bread, it's very hard to be in business. You have to get an accountant, you have to get a lawyer, you have to incorporate, you have to know marketing, you have to know sales, you got to know all these things. If AI does all those functions and there's startups that say we'll build a creator in a box where you're the creator, everything else is taken care of you. That will happen for every micro-entrepreneur whether you have a passion or skill at carving wood or baking or entertaining. It doesn't matter. I would guess by 2035, 10 years from now, that's a very short time, we will have one-fourth the number of corporate employees, maybe less, and we will have 50 million micro-entrepreneurs doing their thing, being their own boss. And some people won't want to...
It's actually a lot of work, you know, being a micro-entrepreneur, you know...
It's easier to be an employee, you know, you make more money. It's obviously amazing to be able to run a business and you can sign a big deal and make more money. But a lot of work...
Back to the meaning of life.
I don't think people are afraid of work. They're afraid of work working for a boss who doesn't appreciate them. Right? And most people in the country would say that's true. Most people in the world would say that's true. I think what matters is when people have agency, and that agency is being a micro-entrepreneur doing your thing. You're the boss. You're responsible. People love taking responsibility. I think that's where meaning comes from. More people and their life will be more meaningful than working in a cubicle or in an assembly line or on a farm.
You've, you know, looking back at it, the 2014 article, I need to, it's like the business, is it a publication in India? I can't remember exactly the name, but you were early to be sort of soured on philanthropy. I think the tech industry sort of has grown more skeptical though. Now you're talking about some philanthropic efforts...
I didn't sour on philanthropy. I soured on the efficiency with which philanthropy works. There's a big difference. I think there's great pleasure in giving. There is. But if it's really inefficient, then it doesn't appeal to people like me. There's plenty of people who don't care about efficiency and say...
You just don't want a bunch of bureaucrats taking the money along the way to whatever...
Consultants and people writing reports and...
Right, because then you're effectively creating the misery you're trying to get rid of.
It's fully LEED compliant. It's not LEED certified. Why? Because there was five consultants who wanted to have a take at certifying it on this or that. I hate that bureaucracy. So I'm not LEED qualified. I don't care. I'm happy to know how I built the building and how sustainable it is, how climate efficient it is. That's all I care about. So I think people have motivation more internal than external. And they will do what they have a passion for and they have much more agency. I think agency is the key to human meaning. You have agency to do what you want and the freedom to pursue it because your basic needs are taken care of instead of today's jobs which are, for more than 50% of the jobs in this country, servitude to survival. Everybody can't wait to retire.
Yeah. I just, I feel like the first of all, people always shift sort of the minimum that they want to meet all...
But you know, I just do think...
Will be infinitely flexible. The services you need will all be free and infinitely flexible other than token costs and power cost for tokens.
Yeah, I do think the challenge is it's all, it seems like it's always we're almost there. You know, it's like, I mean looking back, you, I think you said in that 24-hour interview that I'm really latching on to, you said in 15 years everybody would be able to get the quality of care you could get at Stanford.
Which you still have time, but do you think that's going to come true?
Absolutely. 2040. I had projected 2040.
And I think it'll be way before 2029. But I wrote a long paper on healthcare called '20% Doctor Included' in 2016, which is when I published it, and I projected 2040. And my thought was, somebody was like, 'Oh, give yourself a little bit more wiggle room if you had a good advisor.' No. I assumed three eight-year cycles. V, in fact, I called it V1, V2, V3 all the way to V8. If there were three-year innovation cycles and it'd be 24 years or roughly 2040, there's not great precision in any of this. In fact, all of what I projected is happening much faster. I won't say who. Somebody from the healthcare establishment, one of the better known names, has been critiquing me for the last 10 years for this projection. Came to me last year and said he was wrong. He's a public health policy person. He was absolutely wrong. I was wrong, but I was right. But I was wrong in projecting it'd take much longer. So I think he would say today, and we're doing a joint publication so I won't...
So publication in a medical journal together saying AI will do doctoring better than doctors is...
We've already seen some...
We've seen lots of examples of that. In my sense is doctors are embracing, I mean they're overworked, you know, they want to get the right answers, they want to help people...
Are in a different business than they thought they would be when they were in medical school.
Most doctors got into medicine because they enjoyed taking care of people. Right? Today they're slaves to billing. You're at a hospital, you're billing me, meeting billing codes, not what's the best patient care and what empathy. Empathy isn't the characteristic that's optimized in medicine today. And most doctors got into it because of empathy for people who needed help. I think that's true of the majority of doctors, not 100%. And some percentage have still mostly work on empathy and a sense of service. So, look...
Just a direct question. Do you support single-payer healthcare today?
Today, absolutely. It'd be a fraction of the cost if we had single-payer healthcare and rapidly declining costs if we did that. I think where people are wrong is to assume that single-payer will be too expensive. The cost of health care in this country, the $4 trillion, could easily cut, you know, and it's on a pretty strong inflationary cycle that'll become rapidly deflationary if we had single-payer.
Why can't you get, you know, the sort of right, you know, can you get Keith Rabois on board with that one or like what's the resistance among sort of your fellows in the tech?
There's a general assumption because there's no proof that single-payer will become inefficient and fraud and all those things. The thing is if a doctor costs a dollar a month for every American, imagine it costs a couple hundred million dollars a month to give free doctoring to every American. And that means primary care. It means gaps in care. It means chronic disease management. It means mental health for a dollar an hour. How much downstream cost would you reduce today? All the incentive, all the incentive. Why is every hospital system, start with Stanford or UC, buying small medical clinics? Not because they want to run them well. They want to feed off their cardiac patients.
Are you going to go all in for AOC in the president? I feel like you're much more to the left than you even sort of see yourself. You support single-payer. You want what you said, you want capital gains taxes, income tax, which would be dramatic.
Here's the problem with AOC. She has this model of the well-off against the not so well-off. That is not...
You want to be, you just don't want to be villainized. If you weren't villainized, you'd be okay with it.
No, I think what I'm for is what technology enables in this country in the next 10 years, basic services become so cheap, we don't need to meter them. I was on the board of a telecom, US West Quest, when I argued that it was costing them more to send the paper bill to people's homes than to provide the telecom service and stop charging by the minute. In the '90s almost everything was built, every phone call was billed by the minute, and today every medical visit is billed by the visit. That should go away.
I don't understand. How does this connect to the AOC point?
To the, if things are cheap then you can give them. I still do think AOC doesn't care about economics and there's plenty of tax people, that's just the wrong approach. I think what's the right, and you know AOC and Bernie Sanders all say let's not let people lay off jobs, like those are all the wrong things in the intermediate thing...
The pro-union, lock in jobs, not let a dynamic economy...
That's a really bad way to run an economy. It'll sink the economy before we get to abundance. If we free up the economy, and I'll come back to this point, and protect people against their biggest fear, which is AI will cause my job to be lost, we protect those people, then we can have a very efficient economy. All of corporate America getting much more efficient. The revenue per employee, every CEO I meet, I say within five years you could quadruple your revenue per employee. And every CEO should be striving for that. And it's very possible.
Let's do it. I just really think like all over the place.
No, no, I love it. No, no. I'm supporting what you're saying. I'm saying we need a Silicon Valley New Deal. It's like you get single-payer healthcare. We reform the tax code. We say, 'Oh, there's a minimum quality of life every American can have, but in exchange, we're not going to be super pro-union. We're not going to sort of jerk around companies and it's going to be about sort of minimum government standards instead of sort of distorting capitalism and stopping companies from being able to be dynamic.'
We should distort capitalism...
But we should recognize capitalism is by permission of democracy. You know, we will get a Mamdani elected. My biggest fear is we get a Mamdani elected, AOC runs for president, and there's this anti-AI backlash for fear of jobs that elects AOC. You know, look, Trump got elected because people were fed up with the nonsense of everything became a DEI issue. DEI went to extremes that it shouldn't have gone to. I can't use certain words. I can't even...
Nothing Americans hate more than being told what they can and can't say.
Yeah, that kind of nonsense went so far. All because of the extreme left and there's different constituencies even in the left. But Mamdani, you know, I live in New York City, has taken a very pragmatic approach that to succeed in governing from the left, you actually have to deliver results. You know, he brags about the potholes. He talks about public safety. I really do. I...
He doesn't talk about where he's going to get revenue.
He wants new taxes. I mean, I'm sure you would sign on to your capital gains one. He's trying to do taxes.
Hold on. Hold on. There's rational reasons and irrational reasons to do this. Okay. For the next 15 years, so let's say to 2040 before we get to abundance in 2050. We want a fair economy. What is AI doing? It's disadvantaging capital, boosting the returns on capital. That's why you get so much more investment going in. It's suppressing the results for labor. So labor is 16 trillion of the US GDP. That will keep declining. And I think we could, if we let systems be efficient and let every corporation do what they want to do without people embarrassing them against layoffs, we'd have labor be say 5 trillion of the US economy in real terms. That much decline in labor is a big, big deal.
Okay, you agree. And guess what? Who gets the benefit? Capital, right? And what do we do in our tax system? We favor capital over labor. Why are ordinary income taxes much, much higher than capital gains? Because we've cut all these tax breaks. Every tax break, and there's 10 of them I could point to, is worth 30, 40 billion to the US.
My point is the things you're saying right now are things that bring you closer to AOC, Mamdani. And my point is that I believe the thing that turns you off most about them is they villainize the billionaire class, but actually you have a lot of policy agreement.
No, there's not policy agreement. I'm not saying slow down layoffs like Bernie Sanders is, right? You're saying smaller companies has been very anti-AI. I feel like AOC, it's a little bit, I'm not talking about Bernie specifically because I agree Bernie is that sort of old school sort of like union...
But look, we can't constrain people from laying off people if you're going to have an efficient economy and compete with China, like that is our big bugaboo. We have to compete with China globally. So we don't want to constrain capitalistic efficiency. Okay. What we want to do is say all taxes whether you earn it on...
Capital or income have the same rate of return and we will cut more of the tax breaks out. If we just did that, we'd have my estimate $400 billion a year.
Don't your fellow venture capitalists want to murder you over this? This is like the number one thing the National Venture Capital Association has to fight. It's like keep carried.
So I'll tell you a funny fact. We should go back to that topic because it's a very important topic, but I've never been a member of the NVCA. They made multiple attempts to get me to be a member of the NVCA. And I've said for 20 years, if you will not advocate for carried interests getting special treatment, then I'll join the NVCA. If your principal job is to advocate for carried interest getting special treatment, I'm not joining the NVCA. I'm not a member. We're probably the only major firm that's not a member of the NVCA. I've had that principle for 20-some years.
Amazing. I didn't know that.
Yeah. So, very few people know that because these principles matter, right? So going back to this issue, if we equalize capital gains and ordinary income because AI is favoring capital over labor, then we have 400 billion a year or so to take care of people who are displaced by AI, to allow people to be displaced, which I think is what capitalist efficiency is about. You need to take care of them. And you know, COVID cost us about 250 billion a year when there was mass unemployment. That was roughly the bill for annual additional bill for COVID unemployment. It's something like that it will happen gradually over the next 10 years. It's not happening suddenly. And so between equalizing taxes, I'm saying we have reverse taxation against...
I agree. I think many people listening to this, I think it's a great point and I get...
Why should one get which is being favored by AI get special treatment? Look, MLPs are worth 30-40 billion a year. Step-up basis in estate planning and all that's worth 30-40 billion a year. Without even getting to any inheritance tax issues, there's all these tricks, a dozen of them worth 30 to 40 billion a year.
