Kushner warns AI euphoria could break VC discipline

Joshua Kushner, founder of the New York-based investment firm Thrive Capital, has a message for his West Coast rivals: slow down. In Thrive's first-ever investor letter, obtained by Bloomberg, Kushner warns that the AI boom is testing the industry's judgment, even as his own firm reaps enormous rewards from the technology.

“It is difficult to overstate the magnitude of the opportunity,” Kushner wrote about AI, but he quickly added a caution: “It would also be a grave error in our minds to let excitement weaken our investment discipline. … Within Silicon Valley in particular, the industry can become fixated on hyperincremental technological turns rather than where the technology ultimately leads.”

A contrarian bet on concentration

Kushner’s critique goes to the heart of how venture capital typically operates. The dominant Silicon Valley model, popularized by Marc Andreessen, treats VC as a hunt for “outliers”—firms make many bets, expect most to fail, and rely on a few massive winners to generate outsized returns. This approach, Kushner argues, often leads to chasing hype and abandoning companies that don't immediately look like the next OpenAI.

Thrive, by contrast, concentrates its resources. Bloomberg estimates that about 90% of its capital goes into the top 15 investments in each fund. Kushner frames this as a matter of independent thinking: “We are independent because markets move between fear and enthusiasm, and neither is a substitute for judgment.”

Questioning disruption dogma

Kushner also takes aim at the Silicon Valley belief that VCs exist to disrupt incumbents from the outside. He argues that AI’s impact will be different: “Unlike many of our peers, our conviction was not only that these industries would be disrupted from the outside in but also that many would be transformed from the inside out.”

This thesis has guided Thrive’s strategy, which includes taking large positions in companies it believes in, rather than spreading small amounts across many startups. It’s a philosophy that has paid off handsomely, according to the letter.

OpenAI ties deepen

Thrive’s most prominent relationship is with OpenAI. The firm is a major investor in the AI lab, but in December 2025, the roles partially reversed when OpenAI took an ownership stake in Thrive Holdings, a spinout that acquires companies and works with OpenAI to retrofit them with AI capabilities. As part of that deal, OpenAI dedicated employees to work with Thrive’s portfolio companies.

Thrive Holdings has acquired more than 70 businesses and employs a team of 35 engineers. Kushner says the firm’s accounting platform uses AI agents to produce tax returns 30% faster with 98% accuracy, and its IT services firm has agents independently solving half of its help desk tickets.

Returns that speak

The strategy appears to be working. Thrive’s $516 million 2022 early-stage fund, which placed early bets on OpenAI, Anduril, and SpaceX, was worth more than $3.7 billion as of the end of June, according to Bloomberg. The firm has increased its stakes in these companies over its 15-year history, and also holds a sizable position in Cursor, which recently closed its sale to SpaceX.

Other notable investments include Wiz, Ramp, and Stripe, as well as a seed investment in Essential AI, a lab founded by Ashish Vaswani, the former Google Brain researcher who led the team behind the influential “Transformers” paper.

• $60 billion in assets under management
• 41% gross internal rate of return (IRR) across all funds
• 33% net IRR
• Over $1 billion in liquidity returned to investors in the last 12 months

A tale of two strategies

Kushner’s letter also implicitly contrasts Thrive’s performance with that of its rivals. Andreessen Horowitz, for example, returned $25 billion to its investors between 2009 and 2025, according to leaked returns reported by Eric Newcomer. Both approaches have proven lucrative, but Kushner argues that Thrive’s focus is more sustainable.

Critics might note that Thrive’s concentration strategy is easier for a firm led by the son of a billionaire real estate family, who has access to deals that smaller, emerging funds cannot match. Still, Kushner’s warning about overheated AI investing carries weight.

Why it matters

The broader implications of Kushner’s letter extend beyond Thrive’s own portfolio. His comments suggest that even as AI drives unprecedented valuations, some investors are worried about the sustainability of the current euphoria. If a firm that has benefited enormously from AI warns against letting excitement cloud judgment, it could signal that the market is due for a reality check.

For startups and founders, this could mean a more selective funding environment, where only the strongest companies attract capital. For VCs, it underscores the importance of distinguishing between genuine innovation and mere hype. As Kushner put it: “Not every fast-growing business is exceptional. And not every exceptional company is a great investment at every price. Our responsibility is to maintain those distinctions.”