“We’re in this massive paradigm shift,” says Vince Hankes, the venture capitalist leading Thrive Capital’s investment in OpenAI. “And when that happens, historically, there have been new companies created that are worth a lot of money.”

Thrive Capital wasn’t an early investor in the generative AI standout—it didn’t buy in until 2023—but it’s made some of the biggest bets on the startup. It reportedly led a private share deal in early 2024 that enabled OpenAI employees to sell shares at an $86 billion valuation, then led a funding round in October that valued the startup at $157 billion.

Hankes and Thrive’s founder Josh Kushner (brother of President-elect Donald Trump’s son-in-law Jared Kushner) had known Sam Altman for years before investing. But it was actually their interest in other companies that brought them to OpenAI. “We actually were looking at other startups using this AI technology and it turned out to be GPT-3 under the hood,” Hankes says. “And that spurred us to go spend time with OpenAI, which back then was much more of an enigma, I think, to the average investor.”

For AI companies like OpenAI, success is a game of scale:  Building large frontier models requires massive amounts of training data and computing power. That kind of scale requires large funding rounds and long runways, with the potential for very big paydays down the line.  As an investor, Thrive is set up for such delayed gratification, according to Hankes, who worked at Tiger Global before becoming a partner at Thrive in 2019.

“[We] don’t do many things, but when we do something, we’re getting excited about an opportunity [and] we really double, triple, quadruple down in terms of our time trying to understand it very deeply,” he adds.

Hankes believes OpenAI is one of a relatively small set of companies (alongside the likes of Meta, Google, and Anthropic) that will have the resources to build the frontier models of the future. But even among that crowd, he believes the startup has some unique competitive advantages. He says OpenAI “captured the zeitgeist of the market” with ChatGPT, which has translated into millions of paying ChatGPT Pro subscribers. That revenue can help offset the costs of inventing and training new frontier models. CFO Sarah Friar recently said OpenAI now makes 75% of its revenue from its 11 million ChatGPT Pro customers.

OpenAI also gets valuable data from its chatbot users’ conversations (provided they opt in), which the company can then use to help train the next generation of its frontier models. This creates a flywheel effect, Hankes says.

“As they do that they get new capabilities and features, which attracts more users,” he says.

This story is part of AI 20, our monthlong series of profiles spotlighting the most interesting technologists, entrepreneurs, corporate leaders, and creative thinkers shaping the world of artificial intelligence.