Ben Horowitz and David Solomon: The Sweetest Macro Spot in 40 Years

Goldman Sachs was the largest wholesale funder in the world 10 years ago, which is a position the firm did not want to hold because wholesale funding is unstable compared to retail deposits.

“We were the largest wholesale funder in the world 10 years ago. There are a lot of things you want to be the largest in the world. Wholesale fund not one of them.”

Goldman Sachs' balance sheet has grown from being unimaginable 10 years ago to $1.9 trillion currently, but JP Morgan's $4.5 trillion balance sheet means Goldman must reach at least $3.5 trillion to maintain competitive scale.

“10 years ago um it would be in unfathomable that Goldman Sachs could have a $ 1.9 trillion balance sheet but at the moment JP Morgan has a$4.5 trillion dollar balance sheet. when JP Morgan's six, we're gonna have to be at least three and a half,”

M&A and capital raising (IPOs) are driven by confidence, and regulatory environment is a critical determinant of confidence in strategic M&A.

“M&A and capital raising IPOs are driven by confidence and so if you have a tough regulatory environment that is something that affects confidence from an M&A perspective”

The Genius Act and Stable Coin Bill have passed and are now law; they represent successful crypto policy outcomes achieved by Andreessen Horowitz's policy work.

“the first thing was the uh Genius Act and the Stable Coin Bill, which passed and is now law and we're very proud of that.”

Goldman Sachs recognized that post-IPO it could not operate as a small private partnership and must grow with top-down strategic direction to make 1+1+1+1 equal more than the math adds up to.

“We've started to recognize that that we're not a small private partnership and you can't be a public company and not grow and have some form of top down strategic direction. Yeah. That really gets the whole thing making, you know, the 1 plus 1 plus 1 plus one equal, you know, more than what the math adds up to.”

Copyright law should allow building statistical models over copyrighted work (without reproducing it) so AI systems can become smarter; China will gain AI advantage if the US restricts model training on complete data.

“there's an issue of how copyrights are treated. Um, and can you build a statistical model over copyritten work, not reproduce the copywritten work, but just build a model about it so that the kind of software becomes smarter. Um, we think that's very important because China absolutely doesn't respect copyrights even. They don't respect just copying it. uh let alone building a statistical model and we're going to have kind of a weaker uh AI if we can't train on all the data, can't train on the complete data.”

Last year, the four largest companies contributed only 1% to GDP growth despite spending $400 billion of capital, indicating a capital investment super-cycle that will drive significant future economic activity.

“Last year, the four largest companies contributed 1% to GDP growth with their 400 billion of spending.”

The market is pulling forward expectations of AI productivity gains—the market expects delivery of AI benefits over the next 1-4 years that may not materialize on that timeline.

“the productivity gains from AI investment and putting it into the enterprise and having the enterprise pick it up. The market is pulling forward a lot of what they expect to be delivered over the next 1, two, three, four years.”

AI investment in enterprise will be limited by ability to deploy models and applications effectively, not by data or GPU availability, in the near-term.

“we're at the very very beginning in the enterprise um you know like changing people and processes and so forth in a in a big existing company is no matter what the technology is is complicated”

The Biden administration banned crypto not through legal or legislative process but through 'sheer will and abuse of power,' using techniques like debanking against companies in the industry.

“it got completely banned by the last administration, but not through a legal process, not through a legislative process, but just through like sheer will and you know, we'd say abuse of power of the of the government, including techniques like debanking.”

Actual ownership of enterprise responsibility (as CEO) is fundamentally different from advisory roles; owning the accountability for outcomes creates different perspective and pressure than advising others.

“I was a banker and I advised CEOs for a lot of my career, but actually owning the responsibility. That's one of my big takeaways the last eight years is very different than um than giving advice.”

Software development historically followed the 'mythical man-month' principle: nine women cannot have a baby in one month; you cannot accelerate product development by adding more engineers due to communication overhead and fundamental complexity limits.

“we've never seen that before. And uh and then the kind of correlary to that in AI is that um leads aren't what they once were. So for my whole life in technology and for the whole history of software, there was this thing called the mythical man month. And the way the mythical man month, you know, nine women cannot have a baby in a month. Uh, and so you can't just if you're Google, you can't just put a thousand software engineers on a product and wipe out a startup”

Financial leverage in the economy provides resilience and versatility that helps offset consumer stress from high prices, keeping the economy growing despite headwinds.

“There's pressure, but at the same time, there's enormous financial leverage that keeps the economy going and it makes the economy a little bit more versatile.”

As the leader of an industry, growth of that industry depends on you—you must grow the market because nobody else will do it; this responsibility is fundamental to industry leadership.

“if you're the leader of an industry um then the growth of that industry depends on you. Uh you have to grow the market like nobody else is going to do it. It's not going to like that that is coming on you.”

The most pressing AI policy issue is preventing individual states from creating their own AI laws, as 50 different state laws would make it impossible for new companies to innovate due to compliance complexity.

“the kind of most pressing one right now is um every state wants to have their own set of AI laws which will basically make it impossible for new companies to innovate because you can't comply with 50 different laws from 50 different states.”

Andreessen Horowitz differentiated by building a better product specifically for entrepreneurs—giving founders brand, power, and access—rather than trying to build a track record like established firms.

“The idea we had originally to get to top tier was um to basically have a better product, a better product specifically for entrepreneurs... the venture capital product was great for LPs and um but we thought mediocre for entrepreneurs. So we designed the firm uh to basically really enable a founder to uh basically build his or her own company um and run it uh as CEO”

The Clarity Act (also known as Market Structure) is more important than the Genius/Stable Coin bills because it establishes rules determining which category tokens fall into (Pokemon card, stock certificate, or dollar), addressing the Biden administration's approach of classifying everything as a security.

“The second one which we think is the more important bill is the clarity act which is also known as market structure which um kind of establishes and it's such a necessary thing for this technology because you have these tokens that can represent Pokemon card that can rep represent a stock certificate that can represent a dollar um and there were no rules to say well which one is this token”

Although inflation has declined from 9% to 3%, average Americans perceive cumulative inflation as 25-30% because everything costs that much more, creating a disconnect between official inflation metrics and lived experience.

“You could talk about inflation going from 9 to three, but the bottom line is everything is 25 to 30% more expensive. And that's the way Americans feel it.”

Crypto is an extremely important technology—not just a breakthrough in financial technology but a breakthrough in how society works, addressing questions about property rights on the internet, business architecture, and stakeholder capitalism.

“we thought then and we continue to think crypto is an extremely important technology. Um it's kind of uh you know not not just the kind of most profound breakthrough in kind of financial technology that we've seen but a real breakthrough in um just how society works. So everything from you know how do property rights work on on the internet you know like uh you know how what what is the right architecture for things that where uh creatives um contribute most of the value what's the right business architecture what is stakeholder capitalism really um these are all things that that get solved with crypto”

AI-generated investing will be 'very very interesting' because models work on known facts, but the biggest investment changes come from completely new and unexpected events that can't be incorporated into models based on past data.

“AI gentic investing is going to be very very interesting because you know models work on the facts that are available and one of the things about investing is sometimes the biggest changes and the way you have to think about investing a portfolio comes from things that are completely new and unexpected. It can't be incorporated in a model can't be something from the past.”

When joining a firm that is transitioning from private partnership to public company status, the optimal timing is to join before the IPO date rather than negotiating terms that carry over past the IPO.

“one of the big lessons I have in my life is if you're joining a new firm, it's a private partnership. Don't spend six months negotiating so you carry over past the IPO date. Join join before join before the IPO.”

In 2025, Andreessen Horowitz raised 18.3% of all venture capital raised in the US, moving from top-tier status to the largest venture capital firm.

“this last year 2025 about 18 what is it 18.3% of all venture capital raised in the US was raised by us. So we're we're now like from tier one to the biggest”

Traditional venture capital firm structure (5-6 partners) cannot address a market requiring investment in 150 companies while maintaining investment quality, necessitating organizational innovation in firm design and scaling.

“you can't address you know a market where you have to be in 150 companies with six players so how do you organize how do you scale how do you design the firm so that you can get to the whole opportunity and yet still be like really really good at investing and not have more than five or six people talking about a deal.”

Best time to raise capital in venture is when nobody else has money, as it goes against the natural investor bias to buy high and sell low.

“We got a lot of criticism. um in kind of venture capital like why are you raising money now like what are you stupid um and it turns out that the best time to raise money is when nobody has money I mean like it's it's very obvious in you know when you say it that way but uh”

The FTC's aggressive enforcement approach makes it unclear whether 2025 will see traditional M&A, and companies may instead pursue IP transactions rather than asset acquisitions.

“it's not clear uh the FTC uh kind of position on these things yet and so far yeah especially on big tech even on like small tech they've been very very aggressive um so I think M&A will happen but it may happen more in the form of IP transactions and that kind of thing than as a traditional M&A.”

Some investors consistently outperform over long periods while most underperform, suggesting that investor skill is real and not explained by historical data alone, raising questions about whether AI models (trained on historical data) can replicate exceptional performance.

“one of the things you've got to you've got to wonder why there are handful of people there are a handful of people who have so outperformed as investors over a long period of time but you encounter speaking you know people underperform And so if the models are based on the information that the people are underperforming all have, it's going to be interesting to see whether something different comes out of it.”

M&A driven by strategic activity was suppressed for the last four years—whatever the question was, the answer was 'no'—but now the environment has shifted to 'maybe,' which will drive significant M&A activity.

“from an M&A perspective on strategic M&A for the last four years whatever the question was the answer was no right okay now whatever the question is the answer even if it's very very significant the answer is maybe”

For companies attached to financial or investable assets, the current macroeconomic environment is 'as sweet a spot as I've seen in 40 years of work,' despite Americans feeling stress from inflation and everything being 25-30% more expensive.

“if you're in our kind of businesses, if you're attached to financial assets or investable assets, um this is, you know, I've been doing this for 40 some years. This is as sweet a spot um that that I've seen kind of macro picture.”

Andreessen Horowitz is taking a very aggressive approach to automation—automating things people don't like to do—and has consolidated all firm data into a Databricks data lake to answer any question about the firm or portfolio.

“in our firm as you know uh we are kind of taking very aggressive approach to kind of first automating all the things people do and don't like to do or you know it's not like the funnest part of the job. We've also kind of gotten all of hard data in a data bricks data lake and so we can ask you know basically any question about the firm or the portfolio.”

Andreessen Horowitz received wells notices for its crypto work—something the speaker states he has never seen before in a private company.

“Our company got wells notices um which I've never seen before in a private company.”

The current US macroeconomic environment combines fiscal stimulus, monetary stimulus (rate-cutting cycle), capital investment super-cycle, and deregulation—creating an unusually stimulative 'cocktail' that is very hard to slow the economy down.

“The combination of the significant amount in continued continuing to increase fiscal stimulus, and by the way, the big beautiful bill that started in 26 just adds more to that. It's not that we weren't in a very stimulative place, we just added a whole bunch more. We have fiscal stimulus, we have monetary stimulus because we're in a rate cutting cycle. That doesn't mean I think we're going to see many more rate cuts, but we're probably going to see a couple more. We are in a capital investment super cycle, like something we've never seen. We are in a deregulatory um unwind cycle... All these things it's it's just such a cocktail of stimulus that it's very very hard to slow the economy down.”

A president who 'marks to market to that market every single day' and adjusts quickly when the market moves in the wrong direction is a factor supporting continued market strength.

“One, you've got a president that if you look at the speed bump last April, he marks to market to that market every single day. And the market's going in the wrong direction, he has no problem adjusting very, very quickly.”

Goldman Sachs' 1GS 3.0 program identifies six specific fundamental operating processes for complete reimagination and automation; the capacity freed by efficiency gains will be reinvested in growth areas, creating both cost reduction and growth capacity simultaneously.

“We actually called it 1GS 3.0 a program where we picked six specific processes in the firm and we said we are going to do the work to really completely reimagine them. We have not put out publicly how that changes workforce, how much capacity that creates, but it's super significant.”

Andreessen Horowitz is focusing on policy work for crypto regulation and AI to ensure the country wins technologically and remains competitive with China over the next hundred years.

“when I think about you know what we are as a firm a lot of it is you know it's incumbent on us and a lot of the work that we've done on policy for crypto and um things that we're doing internationally things we're doing on American dynamism is like how do we win not just you know we Andrea Horowitzman but how does the country win technologically how do we uh continue to compete with China how do we uh be relevant in the next hundred years”