Last week in Los Angeles, TechCrunch’s StrictlyVC evening featured two of the most candid AI investors. Carter Reum is the co-founder of M13, which is an early-stage organization possessing $2.5 billion in assets. M13 has invested in 703 unicorns as either a seed or Series A investor, according to Reum. Chang Xu is a partner at Basis Set Ventures, a venture capital firm established in 2017 that concentrates on AI investments and is currently managing its fourth fund with nearly $1 billion in assets. During an engaging presentation in a bright room in El Segundo, they discussed the challenges of pricing deals in an unprecedentedly fast market, identifying companies that can resist the dominance of hyperscalers, and the potential impact of the SpaceX IPO on L.A. The following conversation has been modified for better understanding. Chang Xu: There exists a bubble and also does not exist a bubble. This isn’t a bubble because we haven’t witnessed such a growth pattern in the past. In just six months, ChatGPT experiences a remarkable increase in revenue, jumping from one to $40 billion, which is a staggering level of growth on such a large scale. Open Art, one of our portfolio companies, achieved a significant growth in revenue; it increased from $1 million to $10 million within the first year, and then from $10 million to $70 million during the second year. Throughout this period, the company maintained a positive cash flow with a small team of just 20 people. The benchmark for excellent growth has undergone a complete transformation.
