a16z & Accolade: AI's extreme power law — only 20 of 3,000 VC firms kept 3x net returns
a16z · x · 2026-09-12
a16z's Jen Kha and David George talk with Accolade Partners' Aram Verdiyan on AI's extreme power law and where the next trillion dollars gets made.
Key points
- The classic way to kill a startup was overspending on headcount; AI turned spending into a vending machine — dollars buy compute, and compute alone improves the product. Nothing has concentrated returns like this since social networks
- Accolade studied 3,000 US venture firms: only 20 delivered consistent 3x net returns over two decades, all with repeated access to category-defining companies
- Also covered: AI being sold against labor budgets rather than software budgets, and shifting LP geography
Linked article: Catching the (Venture) Bus, on why VCs never discuss errors of commission.
Related event: a16z Talk: AI Returns Follow Extreme Power Law, Adoption Still Early(3 posts)→
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