In Thrive Capital’s first-ever investor letter, founder Joshua Kushner argues that the excitement surrounding artificial intelligence (AI) is being allowed to cloud investment judgement within Silicon Valley. He claims his company takes a different approach, focusing on fewer but more significant investments.

‘It would be a grave error to let excitement weaken our investment discipline,’ wrote Kushner in the letter, which was leaked to Bloomberg. ‘Markets move between fear and enthusiasm, and neither is a substitute for judgment.’

Kushner distinguishes Thrive’s strategy — which involves significant capital concentrated on a small number of ideas — from the more widespread ‘outlier’ view held by many Silicon Valley firms, where bets are spread thinly across numerous ventures. This approach often leads to cutting support for promising startups due to their perceived lack of potential.

Despite his criticism, Kushner acknowledges that both his and Andreessen’s approaches yield profits. However, he argues that the current AI investing frenzy is overheated, suggesting a need for more sober investment practices.