Why This Isn't the Dot-Com Bubble | Martin Casado on WSJ's BOLD NAMES

**Andreessen Horowitz (a16z)** (0:03)
What if everyone who's calling this a bubble has forgotten what a real bubble actually looks like? The first live video stream on the internet was a coffee pot. In 1991, a Cambridge researcher pointed a camera at the break room pot so he'd know whether there was coffee before walking downstairs. People called it a toy, a gimmick with no serious application. The coffee pot webcam, in no small way, became Netflix. The pattern repeats. Every major technology wave starts with use cases that look trivial, and every time skeptics confuse silliness with insignificance. 30 years later, hundreds of billions of dollars are pouring into AI infrastructure. Consultants estimate the current spending would require AI revenue to grow 40x by 2030 to justify it. the.com comparisons write themselves. But the.com crash wasn't just overvalued stocks. It was a fiberglut financed by WorldCom, a company with $40 billion in debt that was cooking its books, compounded by 9-11. The company's funding today's AI buildout have hundreds of billions of cash on the balance sheet. Comparing valuations isn't the same as predicting systemic collapse. That distinction matters. This conversation examines what separates the speculative correction from an economic crisis, and why this moment may look more like the mobile or cloud booms than.com. Martin Casado is a general partner at a16z, and a few months ago, he joined the Wall Street Journal's Bold Names podcast. We're sharing that discussion here.

**Tim Higgins** (1:27)
It's interesting, you were in San Francisco, in Silicon Valley during the last bubble bursting. What are the signs you're going to be looking for that San Francisco is in a bubble again?

**Martin Casado** (1:39)
I mean, the late night is just so wild. I think people forget, I think it takes maybe 20 years to forget what these things look like. It was the limos, the parties, it was the taxi drivers offering stock tips. I mean, the janitor at one of the startups, my friend worked at, didn't want to get paid in cash, wanted to get paid in equity. It was just total, total chaos. That's not where we are right now. I mean, I think we just forgot what a true bubble looks like.

**Christopher Mims** (2:08)
Today on Bold Names, we have Martin Casado. He is a general partner at venture capital firm Andreessen Horowitz, where he is responsible for their billion dollar infrastructure practice.

**Tim Higgins** (2:21)
And Mims, going into this episode, I think we had one big question for Martin. Are we in a new tech bubble? This time fueled by all of that excitement around AI.

**Christopher Mims** (2:32)
And also fueled by debt, specifically the debt these companies are taking on in order to pay for that AI infrastructure. It's a huge multi-billion dollar bet. It's unclear if it's going to pay off. But for answers, let's hear from Martin. From the Wall Street Journal, I'm Christopher Mims.

**Tim Higgins** (2:51)
And I'm Tim Higgins. This is Bold Names, where you'll hear from the leaders of the bold name companies featured in the Wall Street Journal. Today we ask, will the big bet on artificial intelligence pay off?
Martin, thank you so much for joining us. Hundreds of billions of dollars are pouring into artificial intelligence right now. Help us understand where that's going. What exactly is those dollars flowing? Is it into programs? Is it product development? Is it the picks and shovels? Where are you seeing that money go?

**Martin Casado** (3:32)
Well, certainly there's a mix. The vast majority is going into actual data center capacity. So this is GPUs, this is real estate, this is power, this is HVAC systems to cool them. Then of course, there is the standard software costs of the teams themselves and everything else. But it's really dominated by the infrastructure.

**Christopher Mims** (3:53)
And you, your focus is infrastructure. So, Andreessen Horowitz, which obviously is a tech investment firm, since we go to a broad audience, I want to make sure we specify that.

**Martin Casado** (4:05)
I run the early stage infrastructure fund, yeah.

**Christopher Mims** (4:06)
But you got more than a billion dollars to invest. And when you say infrastructure, what do you mean?

**Martin Casado** (4:13)
Yeah. So, it's specifically computer science infrastructure, and primarily in the software ecosystem. So, we broadly define it as, we invest in the stuff used to build apps. You know, we invest in the stuff used to build the stuff. And so, this is the traditional verticals within infrastructure, our compute network storage databases. But now you have a number of others, like DevTools security, you know, AI models, etc. So, this is computer science, infrastructure, everything from let's say the chips all the way up to the actual apps that a technical person would use, yeah.