Delphi Ventures partners José Macedo and Pondering Durian (PD) unpack the launch of Delphi Intelligence, their new free AI research hub. They dive into the AI landscape, from the race to form the next "Mag 7" to the geopolitical chess match between the US and China.
The Genesis of Delphi Intelligence
- "It seems like there is a gap in the market between very technical papers on the one hand and then kind of quick TLDR update newsletter types on the other... Delphi can fill [that gap] by marrying the two."
- "The way we always do things at Delphi when we get nerd-sniped, you go down the rabbit hole, you do research that helps you get conviction, and then we can deploy capital against that. That's the goal here."
Delphi Intelligence aims to replicate the firm’s successful crypto research playbook for the AI era. It will provide free, "alpha-packed" deep dives that bridge the gap between technical papers and surface-level newsletters. The mission is to build conviction through rigorous research, surfacing investment opportunities and making sense of a rapidly evolving field, from robotics to frontier models.
Reshuffling the "Mag 7"
- "Mark Andreessen said... software is eating the world, and now AI is going to eat traditional software. You're going to have entirely new apps and flows... it's going to look entirely different in 5 years."
The speakers debate whether AI will reinforce the dominance of incumbents or crown new kings. While giants like Google and Meta have immense cash and distribution, they also face the classic innovator's dilemma. Google, for instance, must risk its $200B search business to become truly AI-first. The consensus is that AI will expand the market so much that the conversation shifts from the "Mag 7" to a "Mag 25," with new players like OpenAI and robotics companies joining the multi-trillion-dollar club.
The US vs. China AI Race
- "I would still give the US the upper hand just because they have so much compute and China is pretty constrained by their chips... but the compute that they have they are using quite efficiently and they do have a lot of talent."
The US and China are taking divergent paths. The US leads through sheer compute power and massive capital investment, though its efforts are fragmented and closed-source. China, despite chip constraints, leverages a coordinated, state-driven approach, diffusing AI capabilities throughout its economy and championing open-source models to compound learning. This has created a "crazy state of affairs" where the best open-source models are coming from China, challenging Western assumptions.
Key Takeaways:
- The AI revolution is creating opportunities across the entire capital stack, from public tech giants to early-stage ventures. The core investment thesis should focus on whether a company benefits from the relentless improvement of AI models.
- Invest in AI's Tailwinds: The essential question for any AI investment is: "Does this business get better as foundation models improve?" Companies fighting against the current of AI's scaling laws are on the wrong side of a powerful trade.
- The "Mag 7" Will Expand, Not Just Turn Over: AI is not a zero-sum game for incumbents. The total addressable market is set to 10x as AI drives labor costs toward zero, creating room for a "Mag 25" and turning today's $500B companies into tomorrow's $5T behemoths.
- Private Market Alpha Exists, But Edge is Paramount: The private AI market cap is a mere ~$700B, signaling massive growth potential. However, like in crypto, investors must be paranoid about their "edge," as the best deals require deep ecosystem access to avoid negative selection.
For further insights and detailed discussions, watch the full podcast: Link
This episode unpacks the launch of Delphi Intelligence, revealing how a crypto-native research firm is applying its first-principles thinking to the AI landscape, from the battle for the next "Mag 7" to the geopolitical chess match in robotics.
Introducing Delphi Intelligence: Bridging the Gap in AI Research
- The initiative aims to complement Delphi's expansion into AI and robotics investing, starting with research to build conviction and surface unique opportunities.
- Pondering Durian states, "It does seem like there's a gap that an institution like Delphi can fill by basically marrying the two and going deep in a bunch of different areas."
- Strategic Insight: The launch signals a conviction that the AI space needs the same kind of in-depth, institutional-grade research that matured the crypto market, creating an opportunity for investors to gain a structured understanding of a complex field.
From Crypto Rabbit Holes to AI Conviction
- Speaker Analysis: José's perspective highlights the intellectual framework Delphi applies: using deep research to build conviction before deploying capital, a strategy now being ported from crypto to AI.
- Actionable Insight: For investors, this underscores the importance of foundational research. Identifying seminal works can be a catalyst for developing a high-conviction, long-term investment thesis in emerging tech.
The Robotics Frontier: Humanoids vs. Specialized Robots
- Key Question: José frames the central research question: "What stuff is a humanoid useful for? And then sort of quantifying like what are the economies of scale you can get on producing a humanoid versus the efficiency gains you can get on specific tasks from specialized robots."
- Strategic Implication: Investors should analyze the robotics sector not as a monolith but through the lens of this fundamental trade-off. The winning strategy may involve a portfolio approach that captures both the scale potential of humanoids and the targeted efficiency of specialized automation.
Will the New "Mag 7" Be the Old "Mag 7"?
- Pondering Durian suggests the framework shouldn't be a "Mag 7" but a "Mag 25," where more companies can achieve multi-trillion-dollar valuations by capturing new, larger markets enabled by AI.
- Technical Term: José introduces the Innovator's Dilemma, a concept describing how successful incumbents often fail to adopt disruptive technologies because it would require cannibalizing their existing, profitable businesses. He points to Google's challenge in replacing its lucrative search business with a lower-margin, AI-native product as a prime example.
Analyzing the Giants: Google's Promise and Apple's Peril
- The group contrasts Google's position with Apple's, which seems to be "fumbling hard" despite owning the ultimate consumer endpoint.
- They speculate that a major acquisition, like Anthropic or even OpenAI, might be the only way for Apple to regain its footing in the AI race.
- Actionable Insight: Investors should scrutinize incumbents not just on their AI model capabilities but on their ability to productize and integrate AI into their existing ecosystems. Google's challenge is execution, while Apple's appears to be a more fundamental strategic lag.
The Ideological Battle: Safety vs. Accelerationism
- Key Insight: José highlights that Anthropic has a significant lead in a key vertical, stating, "I think Anthropic has like the best coding model and it's not that close." This demonstrates that a safety-oriented culture can still produce best-in-class models for specific, high-value domains.
- Pondering Durian frames the debate as a tension between a centralized, authoritarian approach to safety and a more pluralistic, open-source model that empowers broader humanity but also carries risks.
The Geopolitical AI Race: US vs. China
- Tommy points out the irony: "We're getting freedom from China and centralization from the US."
- Strategic Consideration: Investors must look beyond headlines and understand the different strategic postures. China's coordinated, open-source approach could create a powerful, compounding ecosystem, while the US's capital-intensive, competitive model fuels rapid frontier model development.
Finding an Edge: Can Startups Compete with Trillion-Dollar Titans?
- José's Framework: He believes the key is to back startups for whom improving foundation models is a tailwind, not a threat. He is particularly bullish on what are often pejoratively called GPT Wrappers—companies building specialized UX and context engineering for specific verticals, which he believes can become multi-billion dollar businesses.
- Quote: José emphasizes the crypto-native mindset: "You always want to know why you have edge in this trade... And I think in AI it's pretty hard to have edge right now."
The Future of Robotics: Hardware vs. Intelligence
- The Software Moat: The critical factor for long-term value accrual will be the "brain"—the software platform that can learn and adapt. The key will be who can best integrate massive datasets from video, simulations, and real-world robotics.
- Actionable Insight: The robotics market is not just about who can build the cheapest machine. Investors should track companies that are building defensible data and simulation moats, as this is where the primary value will be captured.
The Vision for Delphi Intelligence
- José's Aspiration: He hopes Delphi Intelligence will replicate the success of Delphi's crypto research, which helped readers get ahead of major trends like Axie Infinity and Solana.
- Quote: José states the ultimate goal: "It would be great if it was the same, right? Like you're not just getting smarter, but there's actionable stuff in there that kind of can change people's lives."
Conclusion
This discussion reveals that navigating the AI landscape requires a dual-focus strategy. Investors must balance exposure to dominant incumbents with targeted bets on early-stage innovators carving out defensible niches. The key is identifying where true value is being created, whether in software, data moats, or specialized vertical applications.
