Things Vinod Khosla Has Said on Podcasts

“Everybody was surprised by how fast AI grew. Because of that, there was only one option for a GPU, which is NVIDIA. So they can get 80% margins instead of the typical 30% in semiconductors. … My bet is their market share will have to decline and their margins will have to decline.” — Vinod Khosla, Summation with Auren Hoffman

Asked why mega-cap companies keep getting bigger if innovation comes from startups, Khosla says Nvidia's margins are an artifact of having had no alternative, and expects custom chips from AI labs to undercut it as they come online.

Summation with Auren Hoffman · 2026-11-03 Permalink → Listen →

Summation with Auren Hoffman Around 12:42 into the episode

Vinod Khosla

…Big corporations are great at incremental innovation. Intel can go from, or Samsung can, or TSMC can go from a seven nanometer process to five to three to two to one and a half. But radical innovation only has come from startups the last 40 years. Can't think of one example of a large innovation.

Auren Hoffman

If that's happening, and assuming like the rents go to the innovators, why are these mega cap companies just getting bigger and bigger and bigger?

Vinod Khosla

You know, because they are taking advantage of the current opportunity. Everybody was surprised by how fast AI grew. Because of that, there was only one option for a GPU, which is NVIDIA. So they can get 80% margins instead of the typical 30% in semiconductors. Right. But when a chip like jalapeno from OpenAI comes along and I consider OpenAI a startup, it's one-fifth the cost of DPU because it doesn't have the markup. It's also better tuned to the OpenAI model. So that's probably effectively one-tenth the cost of running an open source model on an NVIDIA GPU to run the proprietary model on a jalapeno GPU. So one, and we can come back to it, open…

Auren Hoffman

Now, in some ways, you're an expert. You've been doing this a while. You've seen so many of these movies before. How do you stop yourself from making the mistake that many experts make?

Vinod Khosla

I spend most of my time with entrepreneurs. I spend most of my time being relevant to a 25 or 30 year old. I can sit behind my desk and talk at them, or I can just mostly meet a lot of them and listen. I never speak at financial conferences. I only talk to entrepreneurs. I think I'm in the most…

Auren Hoffman

Yeah. And by the way, I think what you just said is really interesting that you're learning more today than ever. Like it's so much easier today to learn more than ever that if one isn't learning more today, like you have a real problem. Like you don't even want to learn if you're not learning more…

Speaker names come from our own diarization. The position is estimated from where the line sits in the episode.

“I prefer brutal honesty to hypocritical politeness. 99% of the world only does hypocritical politeness. Oh, you're doing great. How does that help you? What's actionable? Hey, you're screwing up in this area. Do something about it. Is actionable.” — Vinod Khosla, Summation with Auren Hoffman

Auren Hoffman compared Vinod Khosla to a tough coach whom players don't always like but who wins. Khosla agrees and says this has been his firm's motto since 2004.

Summation with Auren Hoffman · 2026-11-03 Permalink → Listen →

Summation with Auren Hoffman Around 36:18 into the episode

Vinod Khosla

…help an entrepreneur be as good as they can to create as big a business, as impactful a business as they can create. That's sort of what's really fun for me. Why I'm learning so much at age 71, going on 72. And I'm not slowing down. It's just too much fun, way more fun than playing golf or sailing.

Auren Hoffman

…at least when I hear about when people talk about Vinod Khosla without you there, it's like it's like of this like amazing coach that kind of the players don't always like, but who brings out like the greatness in the players and keeps winning championships. Do you think that's a fair comparison?

Vinod Khosla

Yeah, that is a fair comparison. And if I can help create, look, I don't want to work with entrepreneurs who don't want honest direct feedback. Since we started our firm in 2004, I've had a phrase on there that's the highlight. I prefer brutal honesty to hypocritical politeness. 99% of the world only does Hippocratical politeness. Oh, you're doing great. How does that help you? What's actionable? Hey, you're screwing up in this area. Do something about it. Is actionable. And here's what you should do. I'll give you a story. Around the year 2000, I was on the board of a company. I won't say which one with three prominent venture capitalists of that era on the board. After the dot-com mania, everybody had lots of cash. This company had $50 million in their bank account and going on a path that I didn't think would work. I told them it wouldn't work and what they should do about it, how they should do things different. The other VCs just kept saying, polite things, you're doing great. You know, you have lots of runway. Four years…

Auren Hoffman

So they let you kind of be like the bad guy or something like that. Yeah, I

Vinod Khosla

was the bad guy. I eventually told the entrepreneur, I'm getting off the board. That was my solution. His next startup, he only did with me, not the other VCs. In retrospect, he liked the fact he was getting feedback others weren't giving him.

Auren Hoffman

Yeah.

Speaker names come from our own diarization. The position is estimated from where the line sits in the episode.

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