JM Jerry Murdock Co-founded Insight Partners in 1995 and has spent decades investing in software and internet companies, including early bets on Twitter, Snapchat, Nest, and Doc...

“…NeoClouds right now, there's a whole bunch of them. I think at least half of them go away within 36 months.”

The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch · Startups & Venture · August 2026

Murdock had just compared the AI buildout to the dot-com fiber boom, where the cable stayed valuable but the companies that laid it went bankrupt. He argues the hyperscalers survive any dislocation and pick up the assets cheaply, and that it is the debt-funded neoclouds who do not. The host immediately asks what separates the neoclouds that die from the ones that do not; Murdock says it comes down to who is running them.

The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch · 2026-08-22 Listen to the episode → More from Jerry Murdock → More Startups & Venture quotes →

Transcript

The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch Around 07:23 into the episode

Jerry Murdock

…they all went bankrupt. So when you're really... heavily dependent on debt and there's a dislocation, the underlying value of the asset declines. It may not decline forever, but it declines pretty sharply in a very short period of time. And that's when you have margin calls. That's the way it goes.

Harry Stebbings

What should they do from here? They should not take out such levels of debt. Like, how do you expect this to be a problem? Well, I mean, look,

Jerry Murdock

…been doing this for a long time. And so they know that they could absorb this. And if it happens, it'll be good for them because everybody else gets wiped out and then assets become cheaper for them to acquire and they're still in good shape. The demand for AI compute is not going to change. That's not going to go away. The issue is the ability to fund it in the short term. Let's take NeoClouds. NeoClouds right now, there's a whole bunch of them. I think at least half of them go away within 36 months. And if there's an economic disruption, a lot of them will go away right away.

Harry Stebbings

Can you help me understand that? I can't pass that over. What will separate the neo clouds that go away and become valueless versus those that retain value and become even more valuable? That

Jerry Murdock

stage of question around which head funds are going to go away and which ones aren't. If you looked at Leopold's returns, you think he's never going to go ahead. And he's probably going to survive this because he still has a good return for the year, but people are going to be a little wary about…

Harry Stebbings

That's purely based on a capital efficiency.

Speaker names from our own diarization · position estimated from where the line sits in the episode

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