Balderton Capital Partner Talks European Tech

SPEAKER_1 (0:02)

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Caroline Hepker (0:07)

Well, let's talk UK start-ups funding AI at the start of Cambridge Tech Week. The UK's Chancellor John Healy says he wants to double the number of unicorns in Britain. The UK is home to three of the world's top ten universities, but despite a notable increase in spin-outs from the Golden Triangle of Cambridge, Oxford and London, experts point to a persistent technical literacy gap and massive mature spin-outs that are increasingly leaving Britain altogether. Joining us now to discuss is Suranga Chandratillake, general partner of Balderton Capital, a venture firm that supports European start-ups in the tech sector. Suranga, good morning. Welcome to Bloomberg Radio. I want to ask you first of all about that big headline story in the AI space that we're reporting on this morning, this question of the big American AI companies slowing down development of the AI technology. What's the make of it?

Suranga Chandratillake (0:57)

Yeah, thank you. First of all, thank you for having me here. But no, absolutely. I mean, it's a huge story and it's really interesting to see obviously those who are, have most really to gain by running as fast as possible in this area are themselves nervous about the progress that's being made.

I think it, you know, it's an interesting conversation to be had. The key in this sort of thing always will be how can you actually compel all the different players with all the different incentives to actually work together? You know, historically, humanity hasn't always done a great job of that, but we have at times. So let's see how that unfolds.

Stephen Carroll (1:29)

Yeah, China's called it fear mongering.

I mean, in terms of embedding the oversight within big US AI firms, I mean, it seems quite interesting. What impact do you think it will have on people in the UK, on Europe, on startup businesses that you work with?

Suranga Chandratillake (1:48)

Yeah, I don't think it will have a huge direct impact on people today, because the reality is that for all the staggering technical gains that AI is making, we haven't seen it completely change the nature of our economy, not even in Silicon Valley, really, let alone the rest of the world. So in a way, it's good to have this kind of set of ground rules set up today before it has too large an impact on how people actually live and work in their normal lives. I think the idea of including embedded advisors who can monitor what the labs are doing is an interesting one. In the end, it's just really hard because at the heart of all this is the fact that we're building machines that will be able to work certainly as effectively as us and of course much, much more rapidly than us and coordinate in groups, which is some of the stuff that we've seen over the last six months or so, which has really panicked people. And without some kind of set of underlying principles or philosophy of behavior, it's difficult to know how they might act in certain scenarios. That's what we've seen go wrong.

It's not that anyone was intent on evil or anything like that, but more just that sometimes you set a certain set of incentives and rules, and they can be interpreted in a way that ends up being negative. And that's a really difficult problem to solve for.

Caroline Hepker (3:04)

But how are you having these questions with companies that you're investing in? Are you asking them about their rules around AI application when you're looking at some of the potentials because of course the landscape is fairly vast?

Suranga Chandratillake (3:17)

Yeah, so this has been a problem we've grappled with for years. So we were one of the earliest investors in the autonomous vehicle company Wayve, which just a week or two ago launched autonomous taxis with Uber across London. And we invested back before 2020 in the company. And even then it was obvious that this was an AI company that could have huge implications because it's AI that drives a one or two ton piece of metal around our streets. So, you know, it's critical to engineer things like safety and ethics and behavior into the heart of these systems. And that's been obvious, I think, for a long time.

But knowing that doesn't make it easy. And it's, you know, yes, it's about technology, but it's also also about culture. It's also about, you know, which entrepreneurs do you back? How do they actually think about the world? How do they think about the benefits that technology can bring? But also potentially some of the risks and challenges.