Elad Gil, Silicon Valley’s Most Influential Solo Investor, Foresees Challenging Times for Startups

In a recent discussion, Gil indicated that many valuations could change over the next 18 months or so. “Really tough times are coming,” he says. According to him, a large number of startups will need to raise funds before the end of the year, as many of them raised money in 2021 for a three-to-four-year period. He also believes there is a huge backlog of companies that should have closed their doors years ago but have persisted.

Advice for Struggling Entrepreneurs

When asked what entrepreneurs should do if the situation worsens, Gil said that people need to make tough decisions, such as cutting staff and changing direction, selling the company, or shutting down and returning the money. He also emphasized the importance of not focusing solely on growth, but ensuring product-market fit and a solid customer base before raising funds and hiring.

Elad Gil’s Investments and Interest in AI

Gil did not disclose how much money he has recently raised or how many companies are in his portfolio. However, he mentioned that he has invested in startups currently raising significant funds, such as Character.AI, backed by Andreessen Horowitz, Perplexity.AI, backed by NEA, and Harvey, backed by Sequoia Capital. He also shared how he uses AI to advance his own work and expressed interest in AI generative models, such as GPT-2 and GPT-3.

The Role of Proprietary and Open Source Models in AI

Gil believes there will be a world where a few large proprietary and closed models coexist with open source models. He compares this to the cloud market, where Azure, AWS, and Google Cloud are the three main players. In his view, proprietary models are currently a generation or two ahead of open source models, but he considers open source models to also play a significant role in the industry.