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Product cycles versus capital cycles in AI investing

A16z's David George rates the current product cycle 9 or 10 out of 10 and the capital cycle around 6.

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1 Source, 6h ago, first seen 6h ago

TLDR

In remarks shared by a16z on October 1, 2026, David George argued that more spending on AI model training can make the models better, unlike the SaaS companies of an earlier tech cycle. He rated the current product cycle 9 or 10 out of 10 and the capital cycle around 6, and said product cycles matter more to venture and growth investing over a decade.

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24K

1 Source, first seen 6h ago

73 likes15 comments43 saves7 reposts
Featured Source

Combined views

24K

1 Source, first seen 6h ago

73 likes15 comments43 saves7 reposts

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Sentiment

Positive——Negative

Summary

Not enough discussion yet.

No sentiment analysis available yet.

1 Source

@a16za16z's David George on product cycles versus capital cycles, and his scorecard for the last 15 years of tech: "AI is unique because if you throw more money at it, it can just scale up and get better. That is different than previous cycles." "If you threw endless amounts of money at ServiceNow or Workday or Salesforce during the SaaS era, they would get all messed up... Whereas if you put $40 billion towards training these models, they get much better." "I think about the world as product cycles and capital cycles... In 2021, we were at like a 1 out of 10. We didn't realize it at the time. That was late SaaS, late cloud, post-mobile phone growth... There was no room for something new." "In 2010 it was like an 8 out of 10. Right now product cycle is like a 9 or 10." "Your ideal would be a 10 on product cycle and a 10 on capital cycle, meaning valuations are really low. They almost never coincide." "Like 2023, early days of when AI started working... capital cycle was like a 7... Right now we're probably at a 6. It's okay, but not great." "But the thing that drives our business over 10 years, whether it's venture or growth, is the product cycles. And that's like a 9 or 10 right now." @DavidGeorge83 w/ @jaltma
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    1 Source

    @a16za16z's David George on product cycles versus capital cycles, and his scorecard for the last 15 years of tech: "AI is unique because if you throw more money at it, it can just scale up and get better. That is different than previous cycles." "If you threw endless amounts of money at ServiceNow or Workday or Salesforce during the SaaS era, they would get all messed up... Whereas if you put $40 billion towards training these models, they get much better." "I think about the world as product cycles and capital cycles... In 2021, we were at like a 1 out of 10. We didn't realize it at the time. That was late SaaS, late cloud, post-mobile phone growth... There was no room for something new." "In 2010 it was like an 8 out of 10. Right now product cycle is like a 9 or 10." "Your ideal would be a 10 on product cycle and a 10 on capital cycle, meaning valuations are really low. They almost never coincide." "Like 2023, early days of when AI started working... capital cycle was like a 7... Right now we're probably at a 6. It's okay, but not great." "But the thing that drives our business over 10 years, whether it's venture or growth, is the product cycles. And that's like a 9 or 10 right now." @DavidGeorge83 w/ @jaltma
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