Philip (Partner at Thrive Capital)

1. Key Themes

The Speed Chess Era of AI vs. The Chess Era of Internet

Philip Carter shares a profound insight from Michael Dell, who has lived through both the internet and AI eras: "In some ways [they] feel very similar in magnitude of impact. But whereas the internet era was like playing chess, the AI era is like playing speed chess." [00:07:06]

This acceleration is evident in Cursor's trajectory. When Thrive invested, the company had "a couple tens of thousands of users and low single digits million AR." Today, they're at "many, many hundreds of millions of run rate revenue and many millions of developers using the product" - all within just 18 months. [00:06:30]

Hardware's Hidden Geometric Growth Pattern

Carter challenges conventional wisdom about hardware businesses, revealing that "some of the only companies that actually accelerated growth at scale" are hardware companies like Anduril, SpaceX, and Tesla. These companies "are growing at a faster rate at a multi-billion dollar scale than they were when [they] were small." [00:25:33]

This contrasts sharply with typical software companies that experience deteriorating growth rates over time. The reason: "The bigger you get, the bigger markets you can access, and the more people trust you to take on big problems." [00:25:46]

The Deal/Speed Ratio as Ultimate Enterprise SaaS Metric

In analyzing Wiz's exceptional performance, Carter identifies a crucial but overlooked metric: "The size of the deals you can sell versus the speed at which you can sell deals." Wiz achieved something unprecedented - "closing on these very healthy six figure deals in a matter of weeks or months" while most companies face a trade-off between "small deals and fast cycles" or "big deals and slow cycles." [00:15:38]

2. Contrarian Perspectives

Flying into a War Zone When No One Else Would

When other investors wouldn't travel to Israel during the Gaza war in early 2024, Carter and Josh flew there in 12-24 hours to meet with Wiz. But Carter reframes this: "We don't really do it thinking about other players from the field. You play against yourself, you don't play against others. If our founders were going to be in Israel during what was a trying time, we wanted to be in Israel and show them that that mattered to us too." [00:14:45]

This wasn't about competitive advantage - it was about values alignment.

OpenAI Wasn't Popular in Early Days

Contrary to current perception, Carter reveals that when Thrive invested in OpenAI at a $29 billion valuation in early 2023, "we were one of two firms that gave the company a term sheet. And this was actually more an artifact of investment that required belief than sort of competitive edge." [00:40:38]

The company worked on the project "for seven or eight years before others realized how valuable it was." [00:39:26]

Hardware Barriers Are Actually Advantages

While the venture industry traditionally avoids hardware because it's "definitely harder than software," Carter argues this creates durability: "When you get over the hump of these really, really hard industries and problems, you've actually built something at scale that is very hard to quickly replicate." [00:24:55]

He poses the rhetorical question: "It's really hard to imagine who is possibly going to disrupt SpaceX at this point, knock on wood, or what is going to be someone who could really go out and disrupt Anduril." [00:24:45]

AI as Augmentation, Not Replacement (Empirically)

Counter to widespread layoff fears, Carter provides ground truth: "I'm an investor in a lot of companies that use AI tools. I cannot think, especially on the coding side and engineering side, of a single one that has laid off engineers because of these tools." [00:49:40]

Instead, these tools "allow everyone to be the 10X or the 100X engineer in a really exciting way." [00:49:56]

3. Companies Identified

Cursor

Description: AI-powered integrated development environment (IDE) that acts as an "ultimate AI pair programmer" for developers.

Why Mentioned: Portfolio company that exemplifies compressed AI timelines and exceptional product-market fit. Grew from tens of thousands of users to millions of developers and hundreds of millions in run rate revenue in 18 months.

Quote: "It was definitely one of those magical one way door moments. Like once you walk through a door like that, you can't knock through a door like that. And so myself and my partner Miles spent the next year trying to see how we could ultimately partner with them." [00:10:19] - Philip Carter

Wiz

Description: Cloud security platform that scans cloud environments and identifies vulnerabilities in minutes.

Why Mentioned: Portfolio company demonstrating best-in-class deal size to implementation speed ratio. Google announced acquisition for "the largest sum a startup has ever been acquired for." [00:08:31]

Quote: "50% of Wiz's users at the time were software developers, not security people. Very different than how security is traditionally done." [00:12:25] - Philip Carter

OpenAI

Description: Leading AI research lab and company building artificial general intelligence, creator of ChatGPT and GPT models.

Why Mentioned: Thrive's most significant AI investment, led multiple rounds from $29B to $500B valuation. Demonstrates concentrated betting strategy and long-term partnership approach.

Quote: "Every single major paradigm in large models at this macro level that has been very successful to my knowledge has come from OpenAI or at least been originated at OpenAI." [00:46:53] - Philip Carter

Nudge

Description: Non-invasive ultrasound-based neurotech company treating neurological illnesses like depression, pain management, and addiction through brain stimulation.

Why Mentioned: Portfolio company representing the future of "engineering the human brain" with founders who are "life's work founders."

Quote: "Imagine if we could treat really, really tough illnesses like depression addiction by you wearing a set of headsets on your temples and that actually doing meaningful amounts to cure [them] versus struggling with an illness over a prolonged period of time." [00:31:40] - Philip Carter

Physical Intelligence

Description: Robotics company working on bringing AI-powered intelligence to physical world applications.

Why Mentioned: Portfolio company representing the "renaissance of problems that don't just have to be solved with bits. They can also be solved with atoms." [00:56:12]

Mesh Optical

Description: Data center interconnect company founded by ex-SpaceX Starlink photonics team members using lasers to move data between points in data centers.

Why Mentioned: Portfolio company (seed round led early 2025) representing Thrive's semiconductor/hardware infrastructure thesis.

Quote: "Travis and Cameron, who actually [I] knew back from college and then went to work on the Starlink photonics team. So the team that uses lasers in space to pass data from one satellite to another to give us internet. And they are bringing that innovation to the interconnect space in data centers." [00:05:18] - Philip Carter

Anduril

Description: Defense technology company building autonomous systems and software for military applications.

Why Mentioned: Example of hardware company that achieved geometric growth and "won a program of record... within two years, fastest timelines since the Korean War." [00:26:07]

Quote: "Now Anduril is being tapped for many of the great technology programs that the US military is thinking about across all domains, from air to space to Navy, etc." [00:26:19] - Philip Carter

4. People Identified

Josh Kushner

Description: Founder of Thrive Capital, Carter's partner and mentor.

Why Mentioned: Exemplifies boldness in technology investing, from considering semiconductor reshoring to leading concentrated bets on generational companies.

Quote: "Josh had this really great idea of everyone at Thrive should go to a city outside of the core event. So not New York, not San Francisco and explore for a couple of weeks." [00:11:26] - Philip Carter

Carter also notes: "One thing or philosophy at Thrive that Josh taught me is that the people who win deals are the people who want to win deals the most." [00:00:00]

Michael Dell

Description: CEO of Dell Technologies, technology industry veteran who experienced both internet and AI eras.

Why Mentioned: Provided the defining analogy comparing internet era to AI era, highlighting the acceleration of timelines.

Quote: "His line to me was in some ways [they] feel very similar in magnitude of impact. But whereas the internet era was like playing chess, the AI era is like playing speed chess." [00:07:06] - Philip Carter

Michael (Cursor co-founder)

Description: Co-founder of Cursor, first met Carter while working on a different idea for mechanical engineers.

Why Mentioned: Exemplifies founder quality that Thrive seeks - demonstrated "electric energy" even when pivoting ideas.

Quote: "I think with great founders, there's this almost electric energy you can sense in the first meeting." [00:09:49] - Philip Carter

Assaf Rappaport (Wiz CEO)

Description: Co-founder and CEO of Wiz, previously built and sold cloud security business to Microsoft.

Why Mentioned: Described as "wildly humble, but charismatic and brilliant founder" leading one of the fastest-growing enterprise software companies ever.

Quote: "It was immediately clear this was not your mom's security company. Very, very different." [00:12:04] - Philip Carter

Jeremy (Nudge co-founder)

Description: Co-founder of Nudge, former engineering leader at Neuralink.

Why Mentioned: Represents "life's work founders" - people with singular missionary purpose regardless of financial success.

Quote: "Jeremy and Fred are both convinced that the most important thing they can do with their lives is go and actually build a solution to neurological illnesses." [00:30:42] - Philip Carter

Fred Ehrsam (Nudge co-founder)

Description: Co-founder of Nudge, co-founder of Coinbase, early Neuralink investor.

Why Mentioned: Another "life's work founder" combining successful exits with commitment to solving neurological illness.

Ilya Sutskever

Description: Co-founder and former Chief Scientist of OpenAI, inventor of AlexNet.

Why Mentioned: Exemplifies the star research talent at OpenAI - "literally invented AlexNet back in the day, which kicked off the deep learning revolution." [00:43:06]

Alec Radford

Description: Researcher at OpenAI, one of the most prolific contributors despite not originally studying AI.

Why Mentioned: Demonstrates OpenAI's ability to develop talent internally rather than just hiring proven entities.

Quote: "Alec Radford who has [been] at the company for a very long time famously did not even really study AI when he was a student and was one of the most prolific and impactful researchers of the company." [00:43:21] - Philip Carter

5. Operating Insights

The Concentration-Alignment Loop

Carter reveals Thrive's philosophy: "If you are working with a life's work founder, this is a portfolio of one for them. And we may have a portfolio of few, but we really shouldn't have a portfolio of that many because all the wins should really feel great and all the losses should really hurt." [00:44:49]

This creates authentic alignment rather than just financial strategy. The concentration strategy mirrors founders' own risk profile.

The Strategic Pause: Fleet Fungibility Over Rapid Expansion

When evaluating Wiz, Carter identified a critical but counterintuitive metric: "I actually think often looking at [the] ratio [of deal size to implementation speed] is a really, really powerful metric of basically how many dollars can you turn as a company and how quickly can you change your market." [00:15:38]

This ratio matters more than absolute revenue or growth rate because it indicates true product-market fit and sales efficiency simultaneously.

Young Talent in AI Has Distinct Advantages

OpenAI's approach challenges conventional hiring wisdom. Carter notes that "the people who almost hold the model weights in their brains because they've been brought up thinking about AI natively are really, really good at the creative thinking and experiments and hypothesis testing that is necessary to push the performance of these models." [00:43:40]

The Sora team has a "median age in the low 20s." [00:44:02]

Process Over Outcomes in Performance Evaluation

Drawing from Ray Dalio at Bridgewater, Carter emphasizes: "Focus on the swing, not where the ball goes." The team evaluates "decision processes a lot more than near-term outcomes." [00:53:32]

The test: "No matter what performance looks like for this company in the next one to two years, we're going to be confident that we made the right decision because we looked at the right inputs." [00:54:39]

The Post-Training Paradigm Shift Sequence

Carter outlines the evolution of AI capabilities: "We started with pre-training back in GPT-1, GPT-2, and GPT-3 that took us to GPT-4. Then we started using a lot of post-training techniques for ChatGPT, supervised fine tuning, reinforcement learning with human feedback... and now... reinforcement learning has been the next big paradigm shift." [00:45:45]

Understanding these paradigm shifts and productizing the previous while researching the next represents OpenAI's core competitive advantage.

6. Overlooked Insights

The Developer-as-Security-User Signal

Carter briefly mentions something profound that most missed about Wiz: "50% of Wiz's users at the time were software developers, not security people. Very different than how security is traditionally done." [00:12:25]

This single metric predicted Wiz's platform potential and departure from traditional security tools. It indicated they'd built infrastructure, not just compliance software - a category expansion that led to Google's acquisition offer being the largest ever for a startup.

Science-to-Engineering Phase Transitions

Almost in passing, Carter identifies a massive opportunity: "There's this cool question of at what point... do science problems become engineering problems thanks to the power of AI." [00:57:05]

He cites companies like Isomorphic Labs (drug discovery) and Periodic (materials science) as examples. This represents a fundamental shift in how humanity approaches R&D - moving from observation and hypothesis to engineering and production. The companies that capture this transition early will create entirely new markets.