Sequoia Capital Partner Alfred Lin Says the AI Wave Has Just Begun
Alfred Lin, a partner at Sequoia Capital, stated during a speech at the Stanford AI Club that AI is akin to the internet of the past, but its adoption is still in the early stages, and the wave has just begun.
He mentioned that he dropped out of his PhD program due to the rise of the internet, hoping to be part of it. At that time, he predicted that Amazon would overtake Walmart, but he was wrong, as Walmart significantly expanded instead. However, he was correct in his judgment about the direction of the wave.
Lin pointed out that the slowest part of technology is the humans using it, and the gap between model capabilities and real-world applications is where the opportunity lies. He advised to choose the right path in accordance with the times.
He emphasized that value is increasingly accumulated at the application layer, and entrepreneurs should think about how to shift from selling tools to becoming the service itself. He also reminded that large tech companies are investing heavily in data centers, which can distract from some innovations at the application layer.
Lin previously served as COO and CFO of Zappos, helping the company to be acquired by Amazon for $1.2 billion. After joining Sequoia in 2010, he participated in investments in Airbnb, DoorDash, and was involved in early investments in OpenAI in 2021.
Companies at the application layer and entrepreneurs who can narrow the capability-adoption gap will benefit from capital inflows, while pure model layer or slower traditional enterprises will face pressure. Under event-driven circumstances, funding is shifting from infrastructure to addressing human adoption bottlenecks.
Source: Public Information
ABAB AI Insight
Alfred Lin dropped out of Stanford's statistics PhD program in the 1990s to join LinkExchange, later participating in Tellme Networks and assisting its acquisition by Microsoft. From 2005, he served as COO and CFO of Zappos, driving the company's acquisition by Amazon for approximately $1.2 billion in 2009. He joined Sequoia Capital in 2010, participating in early investments in Airbnb, DoorDash, and served as an advisor in the FTX project.
Under Lin's involvement, Sequoia Capital invested in OpenAI in 2021, subsequently increasing its AI investments while co-stewarding with Pat Grady, including significant investments in Anthropic. They view the gap between the application layer and human adoption as a primary value capture point, with capital shifting from infrastructure to companies that solve organizational and process bottlenecks.
Similar to the internet wave in the 1990s, e-commerce did not completely replace traditional retail but forced companies like Walmart to transform. Currently, AI is in a phase where model capabilities are rapidly improving, but corporate and individual adoption is lagging, with application layer entrepreneurs filling this diffusion gap.
Essentially, this is a technological substitution; model capabilities have outpaced the digestion speed of most organizations. Value is shifting from pure computing power and model layers to applications and services that can redesign processes and reduce human adoption friction. The mechanism is that the speed of adoption becomes a new constraint, rather than model performance itself.
ABAB News · Cognitive Laws
Getting the wave right is more important than getting the details right.
Technology is the fastest, humans are the slowest.
Opportunities lie in the gap between capability and adoption.