Speaker · Updated
Rory O'Driscoll: latest market views
Scale Venture Partners
Summary
Rory O'Driscoll is a partner and co-founder at Scale Venture Partners who has invested in enterprise software and AI companies such as Box, DocuSign, BILL and Omniture, and is a weekly commentator on venture and tech.
Chorus has 26 views from Rory O'Driscoll across 2 episodes on 20VC since October 22, 2026. Their latest calls: bullish on Anthropic, Instinct, NVIDIA and OpenAI.
Where they stand
Their latest bullish or bearish call on each company.
What they talk about most
The latest views
Newest first. Every quote is checked against the episode's transcript.
AnthropicBullish
Anthropic's S-1 was top-tier across margins, cash, customer concentration and compute efficiency; skeptics now carry the burden of proof.
He says the S-1 was great in almost every dimension: margins and operating income were better than expected, operating income held up after stock-based comp, customer concentration was good, compute efficiency was strong, and the cash balance sheet was striking. He says the questions are few and the haters have to 'go pound sand', since the burden of proof is on the naysayers.
“In other words, the [S-1] was great in almost every dimension... It was great, better than expected on margins, op income, even op income after stock based comp. It was great on customer concentration.”at 4:34
20VC: 20VC: Anthropic Files S1 Ahead of $2TRN IPO | Instinct's Rumoured $30 Billion Fundraise | Microsoft Laysoff 27,000 While Meta Taps Equity Markets for $95 Billion Capex Spending Spree ·
AnthropicBullish
Anthropic's short model lifecycle is an advantage for a leader able to fund constant new model builds.
The S-1 shows 80% of revenue comes from models less than six months old and that roughly 70-80% of compute cost goes to training, not inference. Once trained, models are very profitable to serve, but each one has a short shelf life, so the company must keep building. He argues this is scary only if you miss once, and that it's an advantage because very few players can write a $10B+ compute check, with Anthropic spending about $8B year to date and planning $16B next year.
“80% of the revenue comes from models that are less than six months old... 70%, 80% of the compute costs are for training, not for inference.”at 7:28
20VC: 20VC: Anthropic Files S1 Ahead of $2TRN IPO | Instinct's Rumoured $30 Billion Fundraise | Microsoft Laysoff 27,000 While Meta Taps Equity Markets for $95 Billion Capex Spending Spree ·
AI infrastructure & data centers
AI capex is increasingly funded by equity issuance from companies with cheap capital, and the trend will continue.
He says the funding shift is from debt to equity: Anthropic is about to issue around $100B of stock, Meta issued $70B and Google about $80B earlier this year, and SpaceX has done an IPO. He argues these companies have cheap cost of capital and are willing to accept dilution to fund compute. He concludes that this is a macro trend that will keep happening, so the spend will be there.
“we're equitizing the issue... Anthropic is about to issue plus or minus a $100,000,000,000 of stock. Meta issued $70,000,000,000 of stock. Earlier this year, Google issued about $80,000,000,000 of stock... This trend is not stopping.”at 10:40
20VC: 20VC: Anthropic Files S1 Ahead of $2TRN IPO | Instinct's Rumoured $30 Billion Fundraise | Microsoft Laysoff 27,000 While Meta Taps Equity Markets for $95 Billion Capex Spending Spree ·
AI infrastructure & data centers
AI capex depreciation will hit hyperscaler earnings in 2027, forcing headcount cuts to protect operating income.
In 2026, the chipmakers are booking gains while the companies buying the capex are not yet booking the depreciation. As they look to 2027, depreciation will start hitting Microsoft, Google, Meta and similar companies. To keep operating income up, these companies will have to push hard on headcount. He calls this the moment the AI bill comes due, and says it may feed the anti-AI backlash.
“as you start to look to '27, that depreciation is going to start hitting in Microsoft and Google and Meta and places like that. And to keep the operating income up, you're going to be really pushing on headcount.”at 18:16
20VC: 20VC: Anthropic Files S1 Ahead of $2TRN IPO | Instinct's Rumoured $30 Billion Fundraise | Microsoft Laysoff 27,000 While Meta Taps Equity Markets for $95 Billion Capex Spending Spree ·
Chip stocks have been rising since the Anthropic S-1 and memory chips are strong, though CoreWeave weighed earlier.
Chips had fallen about two weeks earlier on CoreWeave concerns, but since the Anthropic S-1 came out, chip stocks have bounced because the consensus is that the filing looks good. He points to DRAM being sharply higher and Korea's SK Hynix up 10%. He says the semiconductor capex business has had a good back half.
“since the Anthropic S1 hit, chips have been bouncing up because the consensus is that looks good. One thing that the S1 was good for was chips. So those stocks are actually up.”at 21:08
20VC: 20VC: Anthropic Files S1 Ahead of $2TRN IPO | Instinct's Rumoured $30 Billion Fundraise | Microsoft Laysoff 27,000 While Meta Taps Equity Markets for $95 Billion Capex Spending Spree ·
Meta PlatformsNeutral
Meta's $95B equity raise reflects its first free-cash-flow-negative quarter, not a broader distress signal.
He argues the Meta raise is unrelated to the chip selloff. Meta's core business is one of the best on the planet, generating about $33B of cash flow a quarter. This quarter capex went above free cash flow for the first time, so Meta issued equity to cover it. The move reflects funding needs, not a weak franchise.
“their core business is one of the best business on the planet. It spits out money... This is the first quarter they went negative, so they just did some equity. So that's that, and it's totally unrelated.”at 21:28
20VC: 20VC: Anthropic Files S1 Ahead of $2TRN IPO | Instinct's Rumoured $30 Billion Fundraise | Microsoft Laysoff 27,000 While Meta Taps Equity Markets for $95 Billion Capex Spending Spree ·
AnthropicBullish
If US open-weight alternatives fail to appear, closed labs like Anthropic gain pricing power, which is bullish for Anthropic.
He asks whether a US company like NVIDIA can build a capable open-source model, given that roughly 75% of compute cost goes to training. If no one does, closed-source providers are left alone and their economic leverage rises. He calls the removal of Chinese open-weight models bullish for Anthropic, and says investors should buy more Anthropic in the IPO.
“It would be interesting to see how advanced a model a US company like NVIDIA can build... If someone doesn't do it, then all you have is a closed source providers, and obviously, their economic leverage goes way up.”at 25:43
20VC: 20VC: Anthropic Files S1 Ahead of $2TRN IPO | Instinct's Rumoured $30 Billion Fundraise | Microsoft Laysoff 27,000 While Meta Taps Equity Markets for $95 Billion Capex Spending Spree ·
Open-weight inference demand will survive: even 10% of a huge inference market is still big business.
He added up the inference competitors' revenue, around $5B, and compared it with the roughly $100B already going to the two closed frontier models. He argues that if 10% of spend will accept lower-quality open-source output to save real money, there will be real demand. He says he does not know whether it reaches $30B, but a 10% share of a huge market is still big.
“The inference market is still so big... If 10% of the spend is willing to kind of do... Put up with the brain dead of open source to... save real money, then there's gonna be demand for that.”at 34:08
20VC: 20VC: Anthropic Files S1 Ahead of $2TRN IPO | Instinct's Rumoured $30 Billion Fundraise | Microsoft Laysoff 27,000 While Meta Taps Equity Markets for $95 Billion Capex Spending Spree ·
InstinctBullish
Would unwaveringly invest in Instinct at $30B; uncapped upside as a near-universal messaging replacement.
He points to Spark's early pre-revenue bet, now worth hundreds of times $75 million, as evidence of what outsized private outcomes look like. Unlike a competitive market with about five rivals and capped upside, Instinct could become everyone's app, a replacement for iMessage plus, worth around $200 billion. He says the three-way payoff matters (if it's amazing, good, or fails), and that every big fund should be fighting to put money in Instinct today.
“This is why I would unwaveringly do instinct at 30. If I was coming into the IC, I would unwaveringly do it.”at 39:12
20VC: 20VC: Anthropic Files S1 Ahead of $2TRN IPO | Instinct's Rumoured $30 Billion Fundraise | Microsoft Laysoff 27,000 While Meta Taps Equity Markets for $95 Billion Capex Spending Spree ·
Market shows wild appetite for proven executives with big ideas at high prices and little derisking.
A plethora of this week's deals involve proven executives with big opportunities and hairy technical challenges, such as Arda and Flapping Airplanes. Investors pay fairly high prices for them with relatively little derisking, because the executive is talented and the opportunity is huge if it works. In contrast, late-stage known companies are easier to price, since the outcome depends less on one person.
“There's just clearly a wild appetite for that at fairly high prices with relatively little derisking.”at 44:50
20VC: 20VC: Anthropic Files S1 Ahead of $2TRN IPO | Instinct's Rumoured $30 Billion Fundraise | Microsoft Laysoff 27,000 While Meta Taps Equity Markets for $95 Billion Capex Spending Spree ·
OpenAIBullish
OpenAI's Codex has reached parity with Claude Code; markets are too superficial to see it.
Every coding team his firm works with has switched from Claude Code to Codex in the last three to six months, so OpenAI has achieved parity in the product that matters. He says the quality gap has closed significantly from the prior generation, but the markets have not noticed. That is why he argues for putting 20% of the fund into OpenAI, since nothing smaller would be enough.
“I know every coding team that we work with has switched from [Claude] Code to [Codex] in the last three to six months... They've achieved parity... The markets are too are are too superficial to see it.”at 48:06
20VC: 20VC: Anthropic Files S1 Ahead of $2TRN IPO | Instinct's Rumoured $30 Billion Fundraise | Microsoft Laysoff 27,000 While Meta Taps Equity Markets for $95 Billion Capex Spending Spree ·
Market is expensive on trailing P/E but cheap forward; only 40-50 AI and tech stocks are working.
On a ten-year P/E basis the market is at an all-time high. On a forward P/E basis it is actually quite cheap, because trailing earnings have been boosted by one-off gains from privately held investments in public companies. The aggregate market is not hurting, but about 450 stocks are struggling. Only 40 or 50 S&P stocks, mainly tech and AI, are working, and everything else is quietly subpar. He calls it a really weird market.
“On a ten year PE, they're at an all time high... Interestingly, on a forward PE basis, they're actually quite cheap because... earnings have been so amazing in part driven by one off gains from privately held investments in the public companies.”at 53:34
20VC: 20VC: Anthropic Files S1 Ahead of $2TRN IPO | Instinct's Rumoured $30 Billion Fundraise | Microsoft Laysoff 27,000 While Meta Taps Equity Markets for $95 Billion Capex Spending Spree ·
NVIDIABullish
Nvidia looks cheap on a forward P/E basis, so tech valuations are not a bubble.
He says stocks like Nvidia look cheap on a forward P/E basis. He notes the aggregate market's earnings have been inflated by one-off gains from private investments, so trailing multiples look high. Forward estimates give a cleaner view, and on that basis the leading AI names are not expensive. He acknowledges a long cyclical debate but argues the valuation case is favourable.
“On a current PE basis, stocks like Nvidia on a forward PE basis look cheap.”at 53:34
20VC: 20VC: Anthropic Files S1 Ahead of $2TRN IPO | Instinct's Rumoured $30 Billion Fundraise | Microsoft Laysoff 27,000 While Meta Taps Equity Markets for $95 Billion Capex Spending Spree ·
IPO activity is weak as everyone waits for a trillion-dollar listing, so platforms should fund privates now.
Despite a market where only a few dozen tech and AI stocks are working, there have not been many IPOs. Everyone is waiting for a trillion-dollar listing, so the whole world is in suspended animation. He concludes it is a perfect time for big platforms to put large sums into private companies, because demand for capital there is strong and the public exit path is blocked.
“And then despite that, there haven't been a ton of IPOs because everyone's been waiting for this trillion dollar thing, and the whole world is in suspended animation.”at 54:21
20VC: 20VC: Anthropic Files S1 Ahead of $2TRN IPO | Instinct's Rumoured $30 Billion Fundraise | Microsoft Laysoff 27,000 While Meta Taps Equity Markets for $95 Billion Capex Spending Spree ·
Wealth, inequality & billionaires
The billionaire tax will hit income tax as wealthy people leave; billionaires will not accept losing 5%.
Anyone who thinks the billionaire tax has no impact has never tried to take 5% of a billionaire's money. Billionaires react badly, especially given voting-control criteria and the prospect that the legislation can be repeated soon. He says the tax has already driven out enough billionaires that the state will see an ordinary income tax hit, whatever the vote outcome.
“The billionaire tax is up and we'll know in a week or two... people who think there's no impact from that have never met a billionaire when you've tried to take 5% of their money away.”at 55:55
20VC: 20VC: Anthropic Files S1 Ahead of $2TRN IPO | Instinct's Rumoured $30 Billion Fundraise | Microsoft Laysoff 27,000 While Meta Taps Equity Markets for $95 Billion Capex Spending Spree ·
Late-stage investors now capture the value, so early-stage returns are inverted versus growth-stage returns.
Rory argues that in a rational capital world, early-stage venture should earn a higher return multiple than growth investing, or no one would do it. He thinks the last five years are clearly inverted. He cites the combined market cap of SpaceX, Anthropic and OpenAI rising from about $4 trillion to about $5 trillion over three years. He says that created over $4 trillion of value in late-stage businesses, and if the next year brings another run of similar growth, late-stage bets alone are what matter.
“the return multiple from early stage investing should be higher than growth, just logically over an extended period of time... I think the last five years are gonna be clearly inverted.”at 12:28
20VC: 20VC: Trillion or Bust: The New VC Game | Coreweave Sell-Off Creates Panic | Town at $1B, Anduril at $90B: Revenue Multiples Out of Control | General Atlantic Eyes IPO & Modal Raises $750M at $15.75B ·
CoreWeaveUncertain
Neoclouds are inherently risky, but CoreWeave should recover if end-user AI demand holds up.
Rory says CoreWeave fell 15-20% last week, and bond prices rose, which implied higher default risk. Neoclouds are always riskier because they underwrite high growth with large capex and lots of debt, so any slowdown in AI growth hits them hard. He argues that if end-user demand is there, CoreWeave will true up, since its main customers are Microsoft and OpenAI. The open question is whether demand can keep growing fast enough to fill rising capex plans, which he ties to the combined growth of OpenAI and Anthropic.
“If the end user demand is there, then everything is going to work out, including CoreWeave.”at 14:44
20VC: 20VC: Trillion or Bust: The New VC Game | Coreweave Sell-Off Creates Panic | Town at $1B, Anduril at $90B: Revenue Multiples Out of Control | General Atlantic Eyes IPO & Modal Raises $750M at $15.75B ·
AnthropicBullish
Anthropic's IPO valuation looks reasonable: 12-13x forward revenue on linearly slowing growth is not crazy.
Rory says Anthropic's growth is clearly slowing from an unsustainably high 10x pace, and it is highly unlikely to 10x again. If revenue adds about $5B per quarter linearly, from $16.8B in Q3 to about $20-21B by Q4 and then $105-110B next year, a valuation of 12-13x forward revenue for the most exciting company in the world does not feel crazy. It does not take much squinting to make that work, so the IPO price looks plausible.
“And now you're saying it's 12, 13 times forward revenues for the most exciting company in the world. It doesn't feel crazy. It doesn't take a lot of squinting to make that work.”at 20:13
20VC: 20VC: Trillion or Bust: The New VC Game | Coreweave Sell-Off Creates Panic | Town at $1B, Anduril at $90B: Revenue Multiples Out of Control | General Atlantic Eyes IPO & Modal Raises $750M at $15.75B ·
Enterprise AI adoption & AI software
AI apps closest to foundation models grow fastest but face constant risk of being overtaken by model labs.
Rory says the standalone AI apps with the highest growth rates have been closest to the foundation models, such as coding, code review and legal. Each use case is marquee and superb for the technology, but every six months brings a terror moment when the labs might move into it. He argues you cannot want infinitely fast growth while being undifferentiated from the foundation models, because the growth exists only since those models unlocked new capabilities. Investors have to accept this risk.
“They're all very close to the foundation models. And every six months, you have the terror moment of Oh my god, they're going to do it.”at 28:45
20VC: 20VC: Trillion or Bust: The New VC Game | Coreweave Sell-Off Creates Panic | Town at $1B, Anduril at $90B: Revenue Multiples Out of Control | General Atlantic Eyes IPO & Modal Raises $750M at $15.75B ·
Enterprise AI adoption & AI software
Coding is the mother lode of LLM value, creating ancillary opportunities in testing, memory and sandboxes.
Rory argues coding is where most LLM value is created. Because the software development life cycle is changing, with far more software being made, the process of deploying it successfully will look different in an agentic world. That creates a range of related opportunities beyond code review, including end-to-end memory management, testing and sandboxes, where he and Harry have an investment. He concedes that some of these opportunities may be too big for the investors on the show.
“I said it last week, I said, again, coding is the mother lode of LLM value, right? It's where it all happens. And therefore, there's going to be a whole bunch of ancillary opportunities around that.”at 31:21
20VC: 20VC: Trillion or Bust: The New VC Game | Coreweave Sell-Off Creates Panic | Town at $1B, Anduril at $90B: Revenue Multiples Out of Control | General Atlantic Eyes IPO & Modal Raises $750M at $15.75B ·
Modal LabsBullish
Modal's growth has accelerated sharply, and inference demand is exploding, supporting its rise.
Rory says Modal was always seen as strong by developers, but ran at roughly $60-100M run rate in the middle to late part of last year. The acceleration to a $1B run rate is stunning, which shows that inference is exploding. Modal is developer friendly and has a range of products. He points to the big market opportunity in inference, where the top providers together are only around $5-6B in run rate revenue, while open-weight models are served across many platforms.
“The interesting thing about Modal is they were always perceived strong by developers... And that level of acceleration is just amazing, right?”at 32:45
20VC: 20VC: Trillion or Bust: The New VC Game | Coreweave Sell-Off Creates Panic | Town at $1B, Anduril at $90B: Revenue Multiples Out of Control | General Atlantic Eyes IPO & Modal Raises $750M at $15.75B ·
Model labs earn about 70% gross margins while inference hosts earn about 30%, shaping where developers spend.
Rory argues that if a team like Replit can buy tokens on Modal at a 30% gross margin rather than from Claude Code at a 70% margin, and the tokens are roughly the same, it will buy on Modal. He sees the inference market as expanding, but the big labs still take more than 95% of the revenue, since OpenAI and Anthropic together exceed $100B while open-weight inference providers are below 5%. He warns that if demand slows, price competition could get tougher, since everyone wants to hold market share.
“Do I want to give money to [Claude] Code and give them a 70% gross margin for this token? Or do I wanna buy it on Modal and give them a 30% gross margin for this token?”at 33:40
20VC: 20VC: Trillion or Bust: The New VC Game | Coreweave Sell-Off Creates Panic | Town at $1B, Anduril at $90B: Revenue Multiples Out of Control | General Atlantic Eyes IPO & Modal Raises $750M at $15.75B ·
AI infrastructure & data centers
Neoclouds will face more competition and may not justify their valuations, though growth covers flaws.
O'Driscoll says neoclouds do the building, buy compute, borrow capital, and then resellers buy from them and sell to developers at a large margin. That invites a lot more competition, which makes him doubt the valuations. He adds that very high growth can cover many problems, so the valuation question depends on how fast revenue grows.
“All the Neo Clouds are saying... We do all the building work. We buy all the compute. We borrow all the capital... you can imagine a lot more competition here, right? ... On the other hand, when you have this kind of growth rate, nothing else matters.”at 34:39
20VC: 20VC: Trillion or Bust: The New VC Game | Coreweave Sell-Off Creates Panic | Town at $1B, Anduril at $90B: Revenue Multiples Out of Control | General Atlantic Eyes IPO & Modal Raises $750M at $15.75B ·
Anduril IndustriesUncertain
Anduril's valuation only works if its growth continues for years; not impossible.
O'Driscoll compares a mature defense contractor with $2B of revenue, worth about $8B at best, with a $2B-revenue firm that has doubled for a couple of years and has a line to the Pentagon. For that second firm, a path of 2, 4, 8, 20 could justify the valuation. He says this is not impossible but leans heavily on the future.
“And the only thing that kind of makes that plausible is the growth rate. ... then maybe you go two, four, eight, 20, and you justify the valuation. So it's not impossible.”at 39:59
20VC: 20VC: Trillion or Bust: The New VC Game | Coreweave Sell-Off Creates Panic | Town at $1B, Anduril at $90B: Revenue Multiples Out of Control | General Atlantic Eyes IPO & Modal Raises $750M at $15.75B ·
Big multiple expansion from current US market levels is unlikely to save valuations.
O'Driscoll argues that the US market already trades at high multiples, so a large re-rating from here is unlikely to rescue overpriced private or public assets. He thinks the risk is that companies priced for a future that may not arrive will see multiples compress. He agrees with Lemkin that repricing is likely as large sums must be moved.
“It's highly unlikely that the US market... you're not gonna get huge multiple expansion from here that saves you, I would guess.”at 40:30
20VC: 20VC: Trillion or Bust: The New VC Game | Coreweave Sell-Off Creates Panic | Town at $1B, Anduril at $90B: Revenue Multiples Out of Control | General Atlantic Eyes IPO & Modal Raises $750M at $15.75B ·
General AtlanticUncertain
Only the very largest firms like General Atlantic can go public, and IPO would change its culture.
O'Driscoll says public investors value management fee income, not carry, and that a firm needs roughly $800M of fee income, plus or minus $1B, to reach a market cap that matters. Listed alternative managers such as KKR, Carlyle, Apollo and TPG trade at 4-5x revenue at best. He concludes that only the very largest firms will do it. He also argues an IPO would make a venture firm more risk averse and turn it into a different, corporate-style business.
“The binding constraint is the fee income... you're probably looking at having to have 800,000,000 in fee income... So the very largest companies will do it, but not many is the answer.”at 49:37
20VC: 20VC: Trillion or Bust: The New VC Game | Coreweave Sell-Off Creates Panic | Town at $1B, Anduril at $90B: Revenue Multiples Out of Control | General Atlantic Eyes IPO & Modal Raises $750M at $15.75B ·
Shows
- 20VC · 2 episodes
Ask your AI what Rory O'Driscoll thinks
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