DCVC DTOR 2024: Introduction

Our argument goes something like this: we are not ​“techno-optimist” maximalists, but we do have hope. We see the possibility of a future — perhaps by the late twenty-first or early twenty-second century— when people will be living in unprece­dented prosperity and equality. The citizens of this future world will enjoy greatly extended lifespans and healthspans. Water, food, and energy will be plentiful. And all this will be accom­plished in harmony with a planetary climate that can ensure the long-term survival of our own species and all the others. 

This isn’t a utopian vision; it’s the humane and hopeful alternative to apocalypse. But to support this prosperous and abundant future world, we’ll need many new tech­nolo­gies. We love deep tech — and our investments range across diverse disciplines — because we understand the scope of the challenges and the rewards that will come from solving them.

After all, many of the tech­nolo­gies we’ll need to decarbonize the power grid, implement CO2-neutral industrial processes, make agriculture more sustainable, counter disease, and bring the benefits of AI and new compu­ta­tional approaches to everyone now exist in a nascent state. It will take decades to perfect and scale them until they’re commonplace. 

To build at the required pace for a sustained period, we will need consistent economic growth and a reliable surplus of people, talent, money, and resources. (Venture capital both flows from that surplus and replenishes it — which is why we see no trade-off between investing for profit and investing for the greater good.) The reality, however, is that we’re beset right now by a range of existential threats including climate change, noncom­mu­ni­cable and emerging infectious diseases, the malicious application of artificial intel­li­gence, and shortages of clean water and other critical resources. Unaddressed, these threats will devour any surplus, divide global polities, and make the prosperous future we envision feel like a faded dream.

Each of these big existential threats must be met by a coordinated counteroffensive.

1. We must decarbonize the global economy to stop adding to, and eventually lower, the concen­tra­tion of greenhouse gases in the atmosphere. In part, that means finding drop-in, carbon-neutral replace­ments for nearly all fuels and materials currently derived from fossil hydro­car­bons — where ​“drop-in” means delivering an identical product with the same or better performance, safety, and price, so that industry voluntarily adopts the better product. We think the key to changing the behavior of incumbent companies is to disrupt the system from inside the system — that is, to fix capitalism’s externality problems with more capitalism, in a way that delivers its benefits to more people, increasing its returns in the process.
2. Meanwhile, we’re cognizant that a devastating amount of warming is already baked into the future climate, which means we must adapt our infra­struc­ture and physical surround­ings to be more resilient to the coming changes in weather and sea level rise.
3. We must prepare for the demographic imbalances spreading across indus­tri­al­ized countries, which will sap industries of the young workers needed to power economies and fund social support systems.
4. We must keep the electrical grid stable and growing — which will mean, in part, using energy-efficient hardware and market arbitrage to limit the electricity needs of the information technology sector.
5. We must ease scarcities of clean water and healthy food.
6. We must find affordable, equitable ways to prevent and treat the noncom­mu­ni­cable diseases that will increas­ingly afflict an aging world population: cancer, metabolic disease, cardio­vas­cular disease, and neurodegeneration.
7. We must prevent further pandemics like Covid-19.
8. We must ensure that artificial intel­li­gence is deployed in ways that enhance, rather than diminish, our freedom.
9. We must prevent bad actors — whether individuals, orga­ni­za­tions, or nation-states — from exploiting global uncertainty through acts of stochastic terrorism or asymmetric warfare.
10. We must accomplish all of this on a smaller, more efficient physical footprint to allow the existence and regen­er­a­tion of nature, which provides us with assets beyond calculation.

And we must do all of this at once, since these threats are all inter­con­nected and are likely to aggravate one another in a wicked tangle of negative feedback loops.

Most of these problems are so big that solving them will require coordinated responses across governments and private sectors. But we believe that venture capital can play a vital catalytic role, sparking chain reactions of ultimately societal-scale innovation and change, by commer­cial­izing ideas that show that the impossible can be solved both scalably and equitably. The tech­nolo­gies that most urgently require and merit deep-tech venture capital investments are those that will interrupt the scary negative feedback loops, boost the positive ones, and reduce the mismatch between our current capa­bil­i­ties and the existential problems we must eventually solve. Such tech­nolo­gies buy us more time to build an equitable, free, green, abundant economy.

To give two quick examples: We support advances in the chemistry to produce CO2-negative Portland cement because they will allow us to build desperately needed infra­struc­ture without adding to the climate crisis (see Opportunity 3.2). And we invest in error suppression software for quantum computing because we think the world will need quantum computers to keep scaling up the data-heavy foundation models that power the new wave of artificial intel­li­gence without draining electrical grids (see Opportunity 1.4).

Along the way, we gird ourselves against the temptation to invest in buzzy, cynical, parasitic ideas whose short-term payoffs often come at the expense of long-term survival. We think of these ideas as shiny objects. Because they contaminate the all-important ecosystem of investment and innovation, they add up to yet another existential threat.

Addressing climate change and similar challenges will require exquisite technical means, control of complex supply chains, chess-master concen­tra­tion, rational policy support and regulatory change, and a massive shift in capital allocation — but none of these things are possible amidst fear, rage, or scarcity. Our investments range broadly, but they couple, resonate, and reinforce one another because they’re all meant to make our economy more bountiful and resilient. And we believe investors can get paid abundantly for doing all this, producing returns that can be put to use in the next round of a virtuous cycle.

Progress in each of the opportunity areas described in this report will help to counter existential threats, stabilize unsteady markets, and lay the groundwork for long-term prosperity. Founders and investors who aren’t afraid to get their hands dirty doing the risky, prolonged, difficult work of deep-tech innovation should join us. The reward is dispro­por­tionate societal and economic value.