1/ A few select excerpts from Lux Q2 letter to LPs…
“The best hedge against running out of cash—is raising it”
2/
-“Question your teaspoon”
-“While many talk of discouraging ‘conflicts of interest’
few appreciate and encourage ‘interest in conflicts’
-The Binary (dichotomous, stark contrasts)
-The Blur (dialectic, smooth continnum)
3/ “We don’t mistake for genius what is partly attributable to central banks buying …driving rates low…and raising asset prices”
“Means may move (upward) but a reversion to the mean (downward) may move away people’s means….
4/ “Eventually the proverbial bath water will turn from TAINTED to TOXIC
& babies may not just be thrown out with the bathwater––but forcibly hurled”
The effect will eventually be the cause of low returns
We know that eventually “eventually” will arrive—but not when “when” will
5/ Lux is increasingly backing entrepreneurs hailing from—or building—overseas…
London, Dublinm Berlin…
The sun hits first and the day starts ahead in Europe—as do many trends from hairstlyes (via soccer stars) to regulatory watchdog decrees (from GDPR to new AI regs)…
6/ Decentralizing + Recentralizing
-Mechanical fans moved off our computers and en masse into server farms
indentured servitude of machines of loving grace
on China v US
-Dependence demands concessions + compromises
-Independence supplies indifference + comprises self-reliance
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-Over 50% of small VCs will involuntarily exit as ~5 VCs are planning to voluntarily exit (IPO)
-Lux team has invested over half a billion dollars across 82 companies (new + existing) in the past few months…
2/
-Zuck’s “ Poachapalooza 2025”
-L&A (License + Acquihire) is the new M&A
-the AI capex surge (5% of GDP) ~ fiber-optic + router binge of 2000 tech boom (5.2%) and short step below sheet-rock bonanza of 2005 housing bubble (6.7%).
-Open source vs Closed…
3/great irony in frenzy for ARTIFICIAL intelligence––what’s acquired isnt hardware but HUMAN intelligence
-frontier of agentic Al not defined by model size-but what we can verify
-99% reliable agent degrades to 60.5% after 50 sequential decision tasks––each error cascading like cracks in glass
NVDA = 19% of that––and 42% of NVDA revenue comes from just 5 Big Tech co's buying GPUs:
Meta, Amazon, Microsoft, Google, Tesla
2/At recent lunch with LP who put Lux in business I talked about shift from consensus cloud inference (GPUs + datacenters + power) to on-device inference (memory + batteries)...
3/ This valued LP talked about CAPEX:
Meta, AMZN, MSFT, GOOG TLSA spending $560B by EOY 2025
-@anduriltech founder Palmer Luckey on @60Minutes
“The Future of Warfare”
-@eGenesisBio on @CNN with Sanjay Gupta
“Animal Pharm”
-new Lux Q1 2025 Quarterly Letter
2/ This is one of my favorite letters we’ve ever written
The theme is PARTNERSHIPS
-between man and machine
-between present and future selves, decision, companies
-between us and our founders of Lux companies
-between Lux partners ourselves
3/ word processor > spellcheck >grammar‑check > LLM “style‑check” if paragraph was birthed by human mind or statistical echo. We detect plagiarism but also something subtler—call it prompterism, prose coaxed from silicon’s
latent space rather than summoned from lived experience.
2/ The 🇨🇳CCP “2035 Science & Technology Vision” states unapologetically “original innovation is the sharpest blade.” coupling that declaration w/ vast subsidies, talent visas + procurement guarantees which have helped them take lead in 37 of 44 critical and emerging technologies!
3/ Upending American science seemed an impossible order.
Regularly copied and always envied, but never rivaled.
Constructed by visionaries like Vannevar Bush in the ashes of WWII + propelled by brilliant legislation like Bayh-Dole Act––we did the impossible: an open scientific enterprise that could simultaneously probe into the furthest frontiers while translating the most original insights uncovered into the most prosperous companies in the world.