Precursor\u2019s Charles Hudson<\/span> wants to be cautious but not too cautious. The venture capitalist was at an AI confab last month, but he has not yet made a new AI investment during the current hype cycle.<\/p>\n

He\u2019s one of many investors who have seen an inflection point take over a sector before, bringing in boatloads of capital, new founders and, at times, speedy and FOMO-driven deals. Historically, Hudson hasn\u2019t minded sitting out. \u201cWith crypto, for example, I was OK being at almost zero,\u201d he said. \u201cI don\u2019t think I\u2019m OK with zero as the answer for AI. The question is where and how.\u201d<\/p>\n

While the \u201cChatGPT for X\u201d companies are certainly interesting, Hudson says that he\u2019s out on them for now because they are just \u201cwrapper\u201d companies stitching together different preexisting companies. \u201cI might regret that, but I think I would just say, my imagination didn\u2019t provide the answer.\u201d He said a founder recently pitched him an exciting product, but when asked how long it would take someone else to build the same tool, the entrepreneur said \u201ctwo weeks.\u201d<\/p>\n

Hudson\u2019s interest in crypto reflects what\u2019s happening inside of every generalist firm right now: Are VCs backing net new startups, or are they letting their existing portfolios lead them to AI, either through seemingly magical pivots or via a shared love and validation for low-flying AI companies in the space?<\/p>\n

For example, Jason Lemkin says he hasn\u2019t yet invested in a pure-play AI startup. \u201cI\u2019m not sure there is a rush, but I could be wrong,\u201d he said. Most of the investor\u2019s portfolio companies are adding an AI component to their businesses. Then there is Sapphire\u2019s Cathy Gao, who invests in late-stage startups, allowing her to take time to make her investment decisions. During a recent conversation, she described the \u201carms race\u201d between big companies launching massive products and startups integrating AI to differentiate.<\/p>\n<\/p><\/div>\n

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