Billionaire investor Chamath Palihapitiya suggests VCs could be replaced by 'an automated system' as the world adapts to AI

• Billionaire investor Chamath Palihapitiya discussed how AI could impact VCs.
• Palihapitiya said there was a "reasonable case to make" that the job could cease to exist.

Billionaire investor and former Facebook exec Chamath Palihapitiya thinks AI will radically change the job of the venture capitalist.

In a Friday episode of the "All-In Podcast," hosted by Palihapitiya, Jason Calacanis, David Sacks, and David Friedberg, the investor said there was a "reasonable case to make" that the VC job could even cease to exist.

He said that changes to the industry sparked by AI could lead to VCs being replaced by "an automated system of capital against objectives."

Palihapitiya, who is the CEO of Silicon Valley VC firm Social Capital, said AI productivity gains could lead to millions of startups made up of teams of one or two people, causing investors to make a higher proportion of smaller bets.

"There's a lot of sort of financial engineering that kind of goes away, in that world," he said. "I think the job of the venture capitalist changes really profoundly."

Representatives for Palihapitiya did not immediately respond to Insider's request for comment, made outside normal working hours.

The rapid advancements in generative AI have sparked fears of job losses across industries, including in the financial sector.

While AI is posed to improve worker productivity and take on some tedious tasks, there are also concerns the tech could eliminate or reduce some junior roles.

Insider previously reported that Deutsche Bank was testing tools that could dramatically reduce the timeframe of some junior bankers' tasks, sparking fears that fewer analysts would be hired, making Wall Street harder to break into.