Joshua Kushner of Thrive Critiques Silicon Valley VCs for Their Enthusiasm over AI

In the first investor letter from Thrive Capital, founder Joshua Kushner reveals unexpected perspectives on his venture capital competitors from the West Coast.

“The potential of AI is immense,” Kushner remarked in the letter that was leaked to Bloomberg. “Yet, it would be a grave error to let enthusiasm compromise our investment rigor. … Especially in Silicon Valley, there’s a tendency to prioritize hyper-incremental tech innovations over the overarching trajectory of technology.”

While his discreet New York firm, similar to its Silicon Valley peers, is heavily investing in AI, Kushner argues that Thrive takes a unique stance. The firm does not utilize a “spray-and-pray” investment strategy. Instead, Thrive typically concentrates its resources on a limited number of companies. According to Bloomberg, around 90% of its capital is directed toward the top 15 investments in each fund.

He believes this strategy establishes Thrive as a firm of independent thinkers. “We are independent because markets fluctuate between fear and enthusiasm, and neither scenario can replace sound judgment.”

This viewpoint contrasts sharply with a foundational belief in Silicon Valley venture capital, famously championed by Marc Andreessen, which claims that the sector relies on “outliers.”

From the “outlier” perspective, a VC firm makes numerous investments, prepared to absorb losses on many—if not the majority—of them. The few notable successes are anticipated to be so lucrative that they will cover and exceed the losses. This mindset keeps VCs constantly on the lookout for the next OpenAI or another major success. It can also lead to, as seen during the lean years after the pandemic, withdrawing support for startups that are not expected to be among the most successful.

In contrast, Kushner asserts, “We believed that an investment firm could be opportunistic across stages, sectors, and geographies while still maintaining a deep focus on a select number of people and ideas.” The objective is to “develop Thrive to concentrate our time, capital, and energy on the individuals and ideas we believe in most strongly.”

He further dismisses the Silicon Valley belief that venture capitalists are meant to disrupt existing industries.

“Unlike many of our peers, we were convinced that these industries would be transformed not only by outside forces but also from within,” he articulated regarding the impact of AI.

Thrive has primarily adhered to this thesis, as demonstrated by its growing partnership with OpenAI. The venture capital firm is a major investor in the AI lab. However, in December 2025, roles shifted when OpenAI acquired a stake in Thrive Holdings, a spinout of the VC firm. Thrive Holdings invests in companies and collaborates with OpenAI to provide AI enhancements. This collaboration includes OpenAI assigning employees to work alongside Thrive’s companies.

Thrive Holdings has purchased over 70 companies and maintains a team of 35 engineers. Kushner emphasizes that its accounting platform uses agents to deliver tax returns 30% faster with 98% accuracy, and its IT services firm has agents handling half of its help desk inquiries autonomously.

Nevertheless, Thrive’s strategy is also grounded in its investments in some of the industry’s most high-performing startups. Its $516 million early-stage fund from 2022 made initial investments in OpenAI, Anduril, and SpaceX, now collectively valued at over $3.7 billion as of the end of June, according to Bloomberg. Over its 15-year history, Thrive has increased its stakes in all these firms (including holding a notable stake in Cursor, which has recently been sold to SpaceX).

Thrive has also invested in prominent companies like Wiz, Ramp, and Stripe, among others. Additionally, it has led seed investments in emerging labs such as Essential AI, founded by former Google Brain researcher Ashish Vaswani, the lead author of the groundbreaking “Transformers” paper that launched today’s AI industry.

In total, Thrive manages $60 billion in assets, as disclosed by Kushner in the letter. He reports impressive profits: a gross internal rate of return (IRR) of 41% across all funds and a net IRR of 33%. Thrive has returned over $1 billion in liquidity to its investors in the past year, he noted.

“There could be an opportunity for billions more in additional liquidity in the forthcoming quarters,” he assures.

While he does not specify which companies are lined up for exits, the SpaceX IPO presents a promising beginning, and OpenAI is preparing for its own public launch.

It is notable that both Kushner’s and Andreessen’s strategies have successfully generated profits. Andreessen Horowitz reported returning $25 billion to its investors from 2009 to 2025, based on the latest leaked returns, as noted by Eric Newcomer.

Thrive’s focus on concentrated capital might not be a feasible model for many smaller, emerging seed funds, whose founders lack the privileged access associated with being the child of a billionaire New York real estate mogul.

That said, Kushner’s overarching assertion that Silicon Valley’s AI investment landscape has become overheated contains elements of truth. As he succinctly states: “Not every rapidly growing business is remarkable. And not every remarkable company is a worthwhile investment at every valuation. Our responsibility is to maintain those critical distinctions.”