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Greylock Bets $1.5B on the Next AI Wave

Greylock Partners launches a $1.5 billion fund for early-stage AI startups, focusing on models, infrastructure, and applications, while offering a cautious view on new AI model benchmarks.

Editor, StartupHub.ai

Jul 20 at 4:16 PMUpdated Aug 22, 20264 min read

Saam Motamedi speaking on a Bloomberg Tech panel about Greylock's new AI fund. — Bloomberg Technology

Visual TL;DR

Strong Investor ConfidenceDriver

From the articleThe move signals continued strong investor confidence in the artificial intelligence sector, with Greylock aiming to identify and support the next generation of AI leaders.

Greylock Launches FundCore

From the articleVenture capital firm Greylock Partners has announced the launch of its 18th fund, a substantial $1.5 billion dedicated to backing early-stage AI entrepreneurs.

AI Investment StrategyContext

focusing on models, infrastructure, and applications for future growth

From the article 3 mentionsSaam Motamedi, General Partner at Greylock, discussed the firm's strategy, drawing parallels between the current AI boom and the early days of the mobile revolution.

Early Stage FocusContext

backing entrepreneurs in the equivalent of the 2008-2009 mobile era

Next AI WaveEffect

identifying and supporting the next generation of AI leaders

From the article 2 mentionsThe move signals continued strong investor confidence in the artificial intelligence sector, with Greylock aiming to identify and support the next generation of AI leaders.

Cautious BenchmarksContext

offering a cautious view on new AI model benchmarks like Kimi K3

From the article 2 mentionsThe conversation also touched upon the recent release of Moonshot AI's Kimi K3 model, which has garnered attention for its performance on certain benchmarks and its large context window.

Future Defining CompaniesOutcome

From the articleWe're one to two years after the iPhone moment, and I think we're gonna look forward and many of the defining AI companies of this generation have yet to get started." This new fund is designed to capture that potential.

Contents(3)

Venture capital firm Greylock Partners has announced the launch of its 18th fund, a substantial $1.5 billion dedicated to backing early-stage AI entrepreneurs. The move signals continued strong investor confidence in the artificial intelligence sector, with Greylock aiming to identify and support the next generation of AI leaders.

StartupHub data

Companies working on this

Profiles of the companies named in this story, with funding and a one-liner from our database.

$5.0B

AI inference platform for deploying models in production with high performance and availability.

$30.0B

Chinese AI startup developing advanced large language models and AI agents, including the Kimi chatbot, with a focus on AGI research.

$20.0B

AI-powered, fully-automated website optimization for eCommerce stores, handling all the work to increase conversions and sales.

Private / $100B+ est

OpenAI is an AI research and deployment company dedicated to ensuring that artificial general intelligence benefits all of humanity.

Greylock's AI Investment Strategy

Saam Motamedi, General Partner at Greylock, discussed the firm's strategy, drawing parallels between the current AI boom and the early days of the mobile revolution. He stated, "We're in the equivalent 2008 or 2009. We're one to two years after the iPhone moment, and I think we're gonna look forward and many of the defining AI companies of this generation have yet to get started." This new fund is designed to capture that potential.

The full discussion can be found on Bloomberg Technology's YouTube channel.

Inside Greylock's $1.5 Billion AI Playbook - Bloomberg Technology — Inside Greylock's $1.5 Billion AI Playbook, from Bloomberg Technology

Greylock's investment thesis for AI spans three core layers:

Model Layer: Building on their existing investments in foundational model companies like Anthropic and OpenAI, Greylock will continue to back new ventures developing novel approaches or focusing on specific data domains.
Infrastructure Layer: The firm anticipates a significant transformation of the technology stack around AI agents. They see a parallel to the rise of cloud infrastructure and hyperscalers, predicting the creation of new, purpose-built services for AI workloads. Companies like BaseTen (AI inference) and Snorkel (data) are cited as examples in this space.
Applications Layer: With agents now capable of long-running tasks, Greylock expects a proliferation of AI-powered applications. They point to companies like Crest AI (customer service) and Abnormal (cybersecurity) as early examples, and highlight Resolve AI, which builds agentic on-call engineers, as a testament to the practical impact of this technology.

Assessing New AI Models: Kimi K3 and Benchmarks

The conversation also touched upon the recent release of Moonshot AI's Kimi K3 model, which has garnered attention for its performance on certain benchmarks and its large context window. Motamedi expressed a measured perspective on the hype, noting, "Benchmarks are imperfect." He cautioned that real-world performance and trade-offs are crucial for evaluating a model's true capabilities.

Regarding cost, Motamedi challenged the narrative that Kimi K3's pricing would necessarily lead to price erosion for frontier models. He pointed out that Kimi K3 is reportedly more expensive per token than its predecessor and is less token-efficient, meaning it may consume more tokens for a given task. "This conclusion that it's gonna lead to price erosion for the frontier is perhaps a bit premature," he stated.

Motamedi also emphasized the multi-faceted moats of leading AI companies like OpenAI and Anthropic, citing not only their model advancements but also their significant revenues derived from API businesses and first-party products like Cloud Code and Cloud Tag. He suggested that the assumption of a single "best" model winning might be too simplistic, as the overall AI economy is projected to grow exponentially.

The growth in token usage, with OpenAI's API alone increasing from 30 million tokens per day in 2023 to a projected 15 billion by March 2026, highlights the massive expansion of the AI token economy. Motamedi concluded by stressing the importance of recognizing this overall growth, stating, "The only mistake one can make is underestimating the size of this overall wave."

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#Greylock Partners #Artificial Intelligence #Venture Capital #AI Startups #BaseTen #Resolve AI #OpenAI #Anthropic #Machine Learning #AI Infrastructure

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Editor, StartupHub.ai

Daniel Singer is the editor of StartupHub.ai, a technology expert and thought leader on AI and its applications across sectors, from fintech and healthcare to developer tooling and consumer software. He writes and tests the tools covered here thoroughly and regularly, and built StartupHub.ai to give founders, operators and buyers a clearer read on what they are actually being sold.

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