There’s a new key term to be aware of as part of this AI revolution, at least according to Antonio Gracias, the founder of Valor Equity Partners.
While we were discussing this year’s Advance Summit in Los Angelestalked about the term he coined — proentropic — a descriptor for startups designed to thrive on chaos and disruption. Such upheavals include the increasing volatility of climate and geopolitics and, of course, technology.
The term has its roots in physics, where entropy is a measure of the amount of disorder or uncertainty in a system. The second law of thermodynamics is that disorder in a system will increase over time and cannot be stopped. It is natural for a system, similar to real life, to always move towards a state of greater disorder.
Gracias admitted that the term can be confusing and that he started thinking about it in 2013, when he believed that a combination of deglobalization and technological change would “shift all power structures.”
He said the world has been drifting toward chaos since at least the end of the last century as “human populations [have] they got bigger and the technologies have changed.”
“We’re looking at businesses that are very good at anticipating that future state and figuring out where to go,” he said, citing SpaceX’s holding company as an example.
“It’s not just that they’re in a market today [that] they think it works, but [they’ve] they created in their strategy and in their people a way of thinking about the world that is possible” — meaning that everything can change at any time.
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“It really takes into account what can happen in extreme cases and really takes advantage of them,” he added.
Elsewhere in the conversation, he talked about the company’s conviction strategy and again referred to the state of the world’s macro economy. “We’re going through a period now in the economy where if you really want to build a better world, you have to have moral courage.”
He talked about the intersection of climate, energy and hardware, using Tesla as an example. “You can create great things without a lot of computation if you know how to integrate the software and the hardware,” he said. Gracias also talked about what he thinks the future of this moment will be like.
“The prevailing narrative is that AI will be terrible. Job losses, social upheaval,” he listed. “And I think that’s not true. I’m going to work very hard over the next five to 10 years for that not to be true.” Instead, he believes the opportunities are greater than ever.
For example, he believes that as low-code/no-code tools become more efficient, more people will be able to start companies and thus unlock unseen levels of productivity. “Who knows what they’ll build,” he continued.
“We will decide whether we have a utopian future or a dystopian future.”
