♪ emily: he is known for shunning convention, taking massive risks , and investing in black swans, companies with a near complete chance of failure. if they succeed, the world will be changed forever. vinod khosla grew up in india. his parents agreed he could explore his curiosities with no limits. he began by founding sun microsystems. he helps entrepreneurs take the

same risks he has no fear of taking. joining me today on "bloomberg studio 1.0" vinod khosla. thank you so much for being here. it is great to have you. vinod: great to be here. emily: you are known for being an investor who challenges conventional wisdom, you exploded. how early do that start? vinod: if you are successful lot,, and lock counts a the ability to do things others may not have the freedom to do. i used it to my advantage early. i was always interested in radical change, big ideas. i got the opportunity to do that. emily: you were raised in delhi, india. what might we have found you doing? vinod: i did not find anyone

around me invested in business or technology. i grew up in an army household. i read about an immigrant coming to this country to start a company. i was 15. the technology, which was intel, sounded very cool. i fell in love with that idea stayed with that idea since. i wanted to start a company and realized how hard it is to start a company in most parts of the world. emily: you now say technology is your religion. were you raised religious? vinod: my parents were normal religious people. early on i realized that priests in india were a scam. i was probably 12. i decided that if the purpose of religion was to do the most societal good, technology was the most powerful tool to do it, so i adapted science and technology almost as a religion

early in life. emily: you are best known for cofounding sun microsystems. you founded a number of companies before that. vinod: we started another company about three months before we started sun. i love this story for the following reason. no one remembers your failure. even though the probability of success was not large, failure does not matter. once you fail, it gives you the ability to succeed. if you are not willing to take risks, if you are not willing to fail, you will not do anything interesting. most interesting things are new, and new things involve risk. risk involves failure. and before data dump, i started a company called daisy systems. that was quite successful in

1986. it went public. that made more money than i ever needed in my life. i wanted the freedom. i looked at careers, what else should i do. i joined one of my lead investors to mentor. emily: how does the venture industry back then compared today? vinod: there are many venture capitalists. many bad ones. a few good ones. they should understand that. i get in trouble for saying that. there are many more options. that is great for entrepreneurs. emily: you have multiple degrees. an engineering degree, biomedical engineering at carnegie mellon, an mba at stanford. you wrote a post about majoring in liberal arts as a mistake for students.

it caused some controversy, which i know you're not shy about. "the real purpose of human existence is fundamentally tied lth."e regulation of wea vinod: that is a nonsensical response. liberal arts has come about doing less work. about 80% of students who actually do it for the wrong reason. if liberal arts goals are the goal, then liberal arts as taught today and taken today is the wrong for it on. emily: what should they study? vinod: logic and philosophy should be an absolute part of any liberal arts curriculum. otherwise you do not learn how to think. but with sticks, economics. learning about how computers work. we live in the computer age. why collect a second language when the most important language

is computing? not that many people ever need to code. peopletique is all from who fail to understand what i was saying, which was exactly the point i was making. the comments like the one you mentioned reinforce the notion that they did not get a good education. emily: should kids go to college? peter thiel is paying them not to. vinod: i disagree with him. i think college and high school is very important. dore will be people who will well without an education or no matter what subject they take. besides those people, i think college gives you the grounding to be able to do things that adapt over time. emily: what do you think since coastal ventures apart from other top-tier ventures?

emily: you went on to found your own fund. what do you think sets khosla ventures apart from other top-tier ventures? vinod: we tend to be much broader. we will do impossible foods. we will do rocketry like rocket lab. we will do hard science. we do very unusual things. robotics, semiconductors, even nuclear projects. emily: you believe that most

vc's hurco companies, not help them. what do you mean by that? vinod: applying traditional business flow metrics to start ups is the wrong thing. and people focus on irr's rates of return, they actually hurt the company. i don't believe just because you are an investor, you have earned the right to advise an entrepreneur by being a board member. you should have started a company, knowing how hard it is, how difficult the trade-offs are. it is painful being an entrepreneur. life is not easy. unless you have and the -- and , you do not empathy have the right to advise and on her. in 30 years, i have never voted against an entrepreneur. they do not need for critical

politeness -- hypocritical politeness from board members. to same board members want talk as if they know enough to they don't. emily: you don't go to board meetings if you can help it. vinod: i cannot stand to listen to other vc's talk about things they don't know about. emily: what is your advice? vinod: don't take advice because it is from the board. maximumhe board to the extent you can. people whoe input of have real experience as input to your thinking. emily: this is interesting because we have talked about the lack of women in the venture capital industry. what do you think it takes to be a successful vc? do you need a stem degree?

do you need to have been a founder, a ceo? vinod: you don't need to have a stem degree, but it helps. it makes it easier. probably, and this is not even essential or even the most important requirement, having been an entrepreneur. emily: is that why it is so hard to find women to fill these roles? vinod: there are fewer women, so i think as women play more of an entrepreneurial role, and that is increasing. we have many entrepreneurs who are women, even a deeply technical areas, when they get enough experience, they will be great partners. you need the floor at the bottom to increase. we need to encourage more women to be entrepreneurs. emily: you mention a broad range of investments. food, ai, health,

energy. companies with an unusually high failure rate. every four years you say you go deep into an area you know nothing about. what has worked? what has not? vinod: all of them have worked in the sense that i really enjoy learning a new area. it will be five years before i know whether i am right or wrong. independent if they are successful or not, i will have learned a lot. the two most important things that can happen in technology that would really change humanity for the better is artificial intelligence and nuclear power, unlimited energy. i cannot think of any two things that would impact humanity more than those. emily: you tweeted recently that if ai happens, we will have abundant gdp to take care of anyone, but abundant disparity. only people who want to work will work. paint the picture for us. peopleif ai does what

can do, i think it is likely in 40 years that of all the jobs that it is today, more than 50% will be done by machines. it does not matter whether it is a farmworker, a hamburger flipper, a legal researcher, a radiologist, or an oncologist. it is not just low skill work. haveat happens, we will dramatic gdp growth, dramatic productivity growth. all the traditional economic metrics. and because more people are working, more income disparity. i am pretty sure it will happen. emily: what happens to those people who do not have jobs? vinod: the critical question is how do we fairly address the people who are left out of this? it will be most of the people. the good news is we will have

enough gdp to provide basic income to everybody. i know this sounds horrific. we will have the resources. if per capita income is $150,000 or $300,000, some basic income as per capita income climbs above $100,000 will become very important. that will be a social and political issue we have to address. emily: hampton creek is a company some people have been excited about. they are facing serious allegations. when you say it is time for new leadership? ♪

emily: hampton creek is a company that so many people have been excited about. they are facing serious allegations. the sec is involved. the doj is involved. there accused of buying their theproducts off shelves. vinod: there was a bloomberg the employertly, -- and i simply bought some stop. if he thought he was the

product, why did he not -- -- auded why did he not his wife is on the board. she looked at the details. maybe there's other stuff we will discover. crediblet have one allegation. he suggested talking to three other people. i talked to those people. emily: do the allegations bother you? do they concern you? vinod: any company that has employees leave has allegations. 20% of the time they are right. -- of the time they are just if you look at them when they commentous, i will not on specifics, but we are always looking. is the buyback relevant?

$77,000, that is completely irrelevant to our investment position. under a freedom of information touest, the party was trying destroy hampton great because the egg industry hated them. they withdrew the lawsuit when they realized how bad it was. enemies theny company has, including using federal funds in the department of agriculture to target the company whose e-mails were discovered by a reporter in washington that said how can we prevent them from getting distribution. why would a federal agency be trying, people who are being

disrupted and will get hurt. it is a complex story. i cannot go into specifics. emily: how would you describe your faith in the ceo and the company? do you think this will be a winner in your portfolio? can they transform the food chain? hampton creek has already done a lot to change the food chain. chicks when they are born are crushed. it is horrific. he is changing that press this -- practice. he's bringing visibility through it. they are making a difference. even if they are not successful, they will have made success by bringing visibility to this. concerned,he ceo is we normally talk to his team.

does the team support the ceo? when they don't, we have to have a conversation with the ceo. do they make mistakes? absolutely. do we make mistakes? absolutely. it is a constant evaluation. emily: you are passionate about clean technology. you have made a lot of investments. someone say that you have made mistakes by going too far into this field. what have you learned? vinod: clean technology is an important area. climate change is a risk. i view climate change no different than i view homeland security, nuclear proliferation, terrorism. they are all risks society faces. we should ensure against that. how much of our gdp do we spent ensuring against foreign attacks, national defense, homeland security?

we should treat climate change the same way. it is a business decision. we should encourage new competitive technologies and then stopped supporting them when they get to a certain size. it is time to stop supporting wind. maybe even solar subsidies should decline. we have done ok in clean technology. we have six companies that could be worth $1 billion. thenld rather try and fail fail to try. emily: it is clear that you are important about the environment. you have been philanthropic. one story that has been written about you is a lawsuit you are involved in around public access to your beach. vinod: normally i don't like to talk about things under litigation. giving up half your wealth will not impact my lifestyle. it is not a huge impact.

i can spend more of my time working on technology. i will probably have way more impact than from my g iving. the other half of that is having principles. it is amazing to me how many fortune 500 ceo's read the press, read "wall street journal," and respond to it by saying here is what we believe is a company. passionate entrepreneurs, they exceedsassion that far their desire for short-term profit. because of that they make more wealth and profit over the long haul. wealth is just a tool to give you freedom to do what you want to do. many people like donald trump get trapped in this cycle of making more. that is not that interesting.

doing all of the deals. he thinks it is smart to avoid taxes that just blows my mind. i'm religious about my belief system. your question.ct it is about property rights.

>> energy rich, resource rich, health care rich. education rich. technology can be used for good or bad. i can use nuclear technology to make a nuclear bomb or provide great services and save hundreds of millions of lives. correlates to mortality. havenow, every time you technology, we as a society should worry about it. ai, being one. the greater the role technology plays in society, i think more you have to use it to service the people at the bottom. talk about the value of

making mistakes. you ever worry about overusing -- >> everything is a matter of gradation. society, the world depends too much on us. a hundred people, a thousand people, 100,000 people. notoes not mean you should encourage risk. it should encourage its mammoth lose 5% orfail and 10% of your assets, your succeef these 60, you double your market capitalization. i think this is key to innovation because risk is key to innovation. if you discourage failure or don't reward intelligence failure, then you are not

allowing yourself succeed in the long run. emily: thank you so much joining us today. it has been great to have you. vinod: it has been fun to be here. ♪

terre: we asked some of the best minds in the world from business, government, the arts, academia, what are the most urgent problems facing humanity, and how do we solve them? the result is "big problems, big thinkers." what is the number one major problem facing mankind? >> i think is the lack of education. >> politics has been getting