Veteran tech investor Ann Winblad on lessons from Buffett: We're all playing the long game

We are now joined by noted tech investor Anne Winblad. She’s the Co founder of Hummer Winblad Venture Partners. Good to see you Anne. Good to see you too. So you know, we were, I guess just remarking the the the morning seemed to go nice and smoothly. Warren seemed to be on his game. What were your impressions? The energy was really high in the room and in an event where you thought it might start out softer. But Warren was on his game for sure. He again was asked about AI and basically said, I’m not really, don’t really know how it works, not an expert, seems like it might have some dangers. Maybe it’s going to foster a new golden age of scamming. I guess he was introduced to an AI version of himself. How are you thinking about it though? And just in terms of the way the investment flows have been so massive, but mostly on the hardware side, at least initially. And how are you you thinking about exploiting it? Well, the investments have been pretty high on the software side as well. I mean we have at least three to four large platform vendors that on their earnings calls with the exception of Apple talked about AI quite substantially and how this wave is really important to their future products and their future customers. So we really are seeing that as part of the digital economy. This conference is this meeting is interesting because it sort of ignores the digital economy with the exception of Apple which is presented to everybody as a consumer brand. That’s why you’re such a unique character and you’ve been coming to this meeting for a very long time. You’re AVC investor, you look at growth stocks, you are interested in what’s happening in the lands of technology and yet you’re here in this value investing bubble. And I just wonder having a a foot in each camp what you take out of this weekend and what you kind of think from the Valley perspective at the same time. Well, I’m originally from the Midwest winner race in Minnesota, so I am a Midwesterner. So at my heart I probably am a value investor. The message to take away here is that we’re all playing the long game and that’s really important to consider Right now in technology, when you get to Silk Value, you get excited about the short game. What do we do today, tomorrow, What’s right in front of me? Warren talked about a couple things where the deal flow he has is enormous and he mostly says no. We’re in the business of saying no as well. Our job is to audition the future. And at the same time, our job is to build products that serve customers. And many of our US customers and global customers are right here at this conference. So it really gives you a feel of the customer to be here as well as this concept. That is more than a concept. It’s really a core strategy that we’re all playing a long game. So your job, you feel like, is to say no most of the time too. I think that’s interesting because a lot of people look at what’s happening in Silicon Valley and they say it’s just buying a bunch of lottery tickets and figuring one of them will hit. You sound like you do things very differently. I I think true venture capitalists really are in the long game. They really are looking for technology change. They can sit on the sidelines and not do deals. They build investors in their funds who really understand that we’re really looking to build substantial companies not to flip companies or sell them but we’re really there to build value and long term value and we’re really part of an industry we’re we’re a focused investor, we are only software, although software is almost a $600 billion industry in the US alone about half the size of our largest industry banking. So it it there’s a lot going on at all times that vary few choices that will turn into large companies. If the, I don’t know, couple dozen companies that were that are represented here as Berkshire subsidiaries, if they were each a public company and most of them could be they would all have an AI strategy or they would be talking about an AI strategy. They’re talking about how they’re going to basically be able to take advantage of it. How are you viewing that in terms of the application? Because when I said before that it’s mostly on the hardware side, you know, Amazon, Microsoft, meta, Google, they are absolutely more software players, but they’re building data centers and they’re acquiring a lot of hardware to do what they want to do. Yeah, this wave of technology, AI is more capital intensive than the cloud, which was more capital intensive than software before it. So it seems that each wave is requiring more integration into hardware and semiconductor technology, NVIDIA being the benefactor first here. But it really is the software that makes it magic and the software and the chips and the software and the data center and the software on these platforms. Back to what these companies are doing and this interesting, the discussion of GEICO just catching up on the analytics wave, it’s going to be very, very challenging for companies that are behind on the previous waves to catch up here ’cause this wave eclipses data analytics. It’s it’s not AI, it’s generative AI. So we really do see fast moving innovation here, which is an opportunity for those who can be extremely agile, have technical skills embedded in their company, really know how to integrate this into value for their company, whether it’s productivity gains or new products will end up ahead of the game. I think we’re going to actually hear what Warren had to say about about AI when he was asked about if I was interested in investing and scamming. It’s going to be the growth industry of all time and it’s enabled in a way I now maybe you know obviously AI has potential for good things too but I don’t know how you based on the one I saw recently I practically would send it to send money to myself over in some crazy country. I do think as someone who doesn’t understand a damn thing about it, that it is, it has enormous potential for good and enormous potential for harm, and I just don’t know how that plays out. So clearly that’s the case. Enormous potential for good and harm. Do you feel as if there’s any kind of consensus gathering about how we might manage the risks here? I think, I think that’s starting to gather it’s it’s really not going to be through regulation because that’s too slow and this is moving way too fast. But I do think we’ll see more industry coherence in this case on this particular wave of technology of how to limit the bad actors, because this is a powerful tool for good, as Warren said, and bad actors have caught on to digital technology some time ago. And the better tools we provide ourselves, the better tools we provide the bad actors. Even even if you can control it and have industry consensus within the United States and and maybe even some of the Western country countries, It’s a different story when you know places like China are are digging into this and maybe they have a different viewpoint of some of those things or some of the bad actors to be able to pick up on that. How do you stay ahead of it? You can’t. So This is why we also invest in security companies. So what happens in the investment strategy here is you see the platforms first. You then see probably a couple application companies emerge like Salesforce did in the cloud. But around it, we build the picks and shovels of security. Those are great investment opportunities for us and we really start getting ahead of it even at the coding level. What’s embedded as companies are coding, these are the first set of companies that are being invested in that help the software that’s being developed not have malicious stuff embedded in it. But that’s the only way to do it is to use innovation to combat innovation and great to see you. Thanks a lot.