Jerry Murdock

The AI-bubble burst window is October 2026 to March 2027, if the Iran war continues and produces a correction. Murdock’s mechanism centers on credit-market disruption: hyperscalers have more debt than ever, private-debt spreads are “too narrow between real risk and not so much risk,” and complacency is the biggest warning sign. Japan’s Treasury holdings are a sleeper fuse: a $100B sale could be absorbed, but $300B to support the yen would create “an immediate global problem.”

“At least half” of the neoclouds go away within 36 months—faster in a dislocation—while hyperscalers are best prepared to survive. They can acquire cheaper assets after weaker players are wiped out, while AI-compute demand remains intact. What separates neoclouds is management quality, which outsiders cannot see; Murdock favors Fireworks over Baseten as a “10-times-better business” because of capital efficiency and a greater willingness to make profits. He believes Baseten’s Cursor contracts generated revenue and scale but little profit.

Open source and ASIC chips are a “tsunami of their own,” and tokens are not fungible. Against Gavin Baker’s “a token is a token,” Murdock argues that customization changes a token’s value. He expects frontier models to capture most dollars early while open source catches up and fills unmet demand, with short-term disruptions possible. Continuous-learning models could eventually replace today’s models, which also limits the long-term significance of backdoors in current Chinese or other open-source models.

Security is the most underestimated layer: “if you don’t get the sandbox right, forget everything else.” Harry cited Anthropic saying its models had hacked three companies; Murdock’s response was that containers are not safe and agents are probabilistic. An agent might open 100 sandboxes with 100 libraries to determine the best result. E2B and Docker are, in his view, probably the two strongest companies in this area.

OpenRouter’s 5% inference markup “is not gonna last.” Murdock points to exchanges such as Akinaki’s DODEx on mainnet and Venice, which could enable direct inference purchases and disrupt the model within three to five months. But if a hypothetical $10B Stripe bid arrives, his answer is “fuck yeah”—take the money. His Flipboard lesson is that refusing an approximately $1B opportunity can leave “a lot of arrows in my back.”

For margins, land grabs are acceptable as a strategy but not as a culture. Harry cited roughly 35% margins at Fireworks and around 20% at many AI application companies. Murdock favors companies that can eventually monetize innovation rather than simply buy customers. He also favors niche specialists over broad legal platforms such as Harvey and Legora, because a security failure could damage both.

Mag7 verdict: hold Meta, Google, and Microsoft long-term, but short Meta if forced. Meta and Google’s huge user bases—and Microsoft’s enterprise and consumer businesses—act as buffers. Microsoft’s Exchange business is a “money machine that cannot change.” Meta may become boring like AT&T, but Murdock still sees it as a stable, dividend-like holding. NVIDIA is over $10T in five years; its current plateau partly reflects circular transactions obscuring real growth.

His five-year contrarian call is blockchain for agent payments. Bitcoin’s perceived greed and hacking risk have dragged down the sector, but he sees long-term potential in Solana and Ethereum and real utility emerging through tokenized assets, payment rails, and inference systems such as Aki-Naki and Gonka.

🔗 Original source & video: 20VC: The AI Bubble Will Burst: Half the Neoclouds Will Die | China: Should We Ban Chip Exports & Be Fearful of Chinese Open-Source | Mag7: Who Dies and Who Thrives: Why Meta is Meh and Microsoft is Mega

The AI tsunami is specifically autonomous agents, not AI in general — and we’re in the anticipatory period, which is why the “SaaSacre or the SaaS apocalypse” is hitting prices before the wave lands. Murdock’s AI-native portfolio (likely E2B, Eventual, Lotus AI, Get Dynasty, Aven) has used OpenClaw, NanoClaw, or homemade agents to write code for just 2–6 weeks, and most of them reportedly view $27–30B Cursor bluntly: “Cursor is obsolete. That’s where the product is today.” He thinks the team has money and time to pivot, but “you can’t be thinking about yesterday.”

The stack call: a LAMP-style open-source “claw stack” for agents, with an orchestration layer triaging workflows between expensive Claude tokens and open-source models like DeepSeek or Llama 3 — driving the rise of open-source models and then an ASIC explosion with the model on the chip, “cheaper, a lot more tunable… than an expensive chip from Jensen.” His read on the Groq deal: Nvidia bought it to make sure CUDA is viable for the ASICs it knows are coming, while Meta “had the balls to say no to Jensen” precisely because it’s betting on ASICs. Nvidia’s fate: “depends on execution.”

Agents become the software buyer — an employee with credentials and identity that you review (“What did you buy? What did you spend? What did you accomplish?”) — pricing goes consumption-based (Docker is moving dramatically toward it as it moves into AI), and software not built for agents is “severely challenged” in “maybe 6 months, maybe a year, maybe 18 months.” Infrastructure gets rebuilt to agent speed: humans notice 400ms delays, likely E2B’s sandboxes respond in 80ms, and “the agents notice it and that’s what matters.”

Systems of record become valueless databases or infinitely more valuable — execution decides. Carta is “infinitely more valuable” if stock tokenization routes through its cap table, worth little if a new system of record bypasses it; Salesforce is “like Mount Everest… it’s not going to melt overnight,” and the tell is the health of the dozens of companies built on top of it.

The Cloudflare/CrowdStrike ~10% drop on Anthropic’s security release wasn’t panic — “it’d be down a hell of a lot more” — but sidelined buyers waiting to learn winners from losers. The rhyme is March 2000: tech down 30–40% across the board, miss a quarter and you’re down 50–60%, and the tsunami “took out the dotcoms and then took out all software.” Nothing is safe now: 80% of his investments returned less than 1.3x, and some PE firms “will end up like Forstmann Little” after its all-in telecom bet died with 9/11.

Labor displacement could decide the next presidential election 2.5 years out, with “minimal viable income” a plausible ballot question; the first casualty is the next hire — the junior developer, EA, marketing person never recruited — with SMBs adopting first and enterprise last. The company Harry identifies as likely Klarna going from 7,000 to under 2,000 by 2030 is a culture question, and billion-dollar single-person companies: “Yeah, absolutely.”

“Absolutely the best time” ever to start a fund — timing is the single correlation across VC vintages (an ‘05/‘06 fund caught mobile; a 2009 fund missed Twitter, Facebook, Uber early), and this sea change gives fresh entrants a huge advantage over successful incumbents: “hard to get old dogs to move fast.” VCs and founders will be judged on the same axis — “how well do we use autonomous agents in our job?” — while the one moat agents lack is intuition, “not anytime soon.”

Quickfire: he would take both OpenAI “at 500” and Anthropic “at 380”, favoring OpenAI because of 800 million users — “until you get to a billion users, I’m suspicious of any consumer technology” — though Google’s Gmail-plus-agents are better long-term assets, and converting ChatGPT into a personal autonomous agent (his read on what Peter Steinberger will do) is “an insanely great business.”

🔗 Original source & video: The SaaS Apocalypse: Who Lives & Who Dies | Insight Partners Co-Founder, Jerry Murdock