Anthropic, OpenAI listings a reality check for AI: Rocketship’s Venky Harinarayan

The public listings of Anthropic and OpenAI will be a reality check for the AI ecosystem, according to Venky Harinarayan, founding managing partner of Rocketship.vc and an investor in SpaceX, which recently listed at an unprecedented valuation of $1.7 trillion.

The markets are currently judging winners and losers in AI early, impacting certain sectors such as IT, and even countries, Harinarayan told ET in an interview.

“Unfortunately, whether we like it or not, markets are very shortsighted,” he said. “The market is quickly identifying who the AI winners and AI losers are. So, it is a very big challenge. But keep in mind that these things are cyclical.”


Over the last few months, the IT and software sectors have seen their stock prices fall due to the impact of AI. In the case of India, the country is seeing record-high outflows from foreign investors, who pulled out Rs 49,340 crore just in June from the Indian equity market.

Headquartered in San Francisco, Rocketship.vc is a data-driven investment firm that has backed Indian companies such as Agnikul, Moglix, Apna, and US-based Splitwise and Wasabi.

“SpaceX is a huge experiment, and we need to see how it all plays out,” said Harinarayan, who invested in the Elon Musk-founded spacetech enterprise in 2019. “For a $2-trillion valuation, one would expect that it took 10-15 years in public markets for the shareholders to have rotated over time to achieve equilibrium (which is not the case with the company).”

After a blockbuster listing on June 12 at an initial valuation of $1.7 trillion, SpaceX’s stock price skyrocketed over 67%, taking the market capitalisation to $2.8 trillion. That number had halved to $1.4 trillion as of August 3, following a decline.

Investing in AI is also challenging, with frontier labs decimating startups as they launch new features and products.

“The way we think about the portfolio is we take up to 30 bets. The thing to ask yourself is not what can go wrong, but what can go right,” he said. This could be momentum, customers, business metrics, and a willingness to take enough bets, he said.

Harinarayan noted that while people tend to always be in risk-reduction mode, the VC game is about extreme outcomes, far from a normal world. “You are optimising for one extreme outcome and are willing to accept 90% failure,” he said.

Talking about India, Harinarayan said that while there is a lot of opportunity, there is not enough volume given where the world is at this point, with the US and China leading the AI race.

“I’m starting to see the activity pick up, but you are just not seeing the same level that you’re seeing in Silicon Valley, or even the equivalent amount that you’d expect in India,” he said.

Rocketship.vc has not made a lot of investments in the AI space in India, but it has been investing actively in the AI space in Silicon Valley in the last six months.

Harinarayan said it is less about not finding enough companies in the market to invest in. “We have a global purview, and we have to look at where the relative opportunity is in terms of valuations,” he added.