Palihapitiya on AI valuations, energy, auditors

Chamath Palihapitiya, CEO of Social Captial | 8090, said AI valuations are unsustainable, enterprises need to start talking to their auditors pronto about AI agents and every company needs to get into the energy business.

Palihapitiya, speaking at IFS Unleashed 2026 in a Q&A with IFS CEO Mark Moffet, riffed on a little bit of everything AI.

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Here's a recap.

Returns and a tale of two AI markets

Palihapitiya said:

"The biggest thing, which is just the elephant in the room, is I don't think that we have seen the investment returns that people have expected for the amount of money that people have spent in AI. In the last two quarters of this year, about $400 billion was put into the AI ecosystem by venture capitalists, and if you look at the breathless growth of the model companies and the associated companies around it, most of them are feeding off that $400 billion."

He added that large enterprises, the ones with real balance sheets, are investing in AI to generate returns.

"It's a tale of two worlds. It's a lot of forward investment, speculatively building unbelievable enterprise value, but we don't know if that's really sustainable. And on the other side, real companies trying to figure out how to do it in a proper, responsible way."

Accountability

Palihapitiya said:

"There's an entire infrastructure of tools that will be necessary. Companies will need it because if a regulator taps you on the shoulder and says, "Why did you make that decision?" you're not going to be able to point to an alphanumeric ID of an agent and blame it. That's going to be insufficient (for an auditor). That's where the rubber will meet the road."

Energy

Palihapitiya said:

"The United States is in a massive energy deficit, massive, and it's only going to compound. Why am I taking on the business risk of AWS and GCP and Azure and everybody else? This is not to say anything bad about them, but I think that the sneaky thing that's going to happen is every single company will probably need to get into the power game.

Everybody's going to have to get into the land power shell game and get your own electricity, and everybody's going to have to solve this.

I actually think every company should probably. probably break the seal and understand the energy shortage and think about buying LPS themselves. I do not think you're going to be able to rely on the clouds."

Your next move

Palihapitiya had a few next moves for CxOs:

"I think the most important thing is to reconstruct the organizational hierarchy of a company. I think the big opportunity is for folks to embrace and really understand how you get the tribal knowledge in people's heads encoded so that it's machine readable.

"Work with your auditors and make sure that you can explain yourself in a world where AI is making decisions. I think that's probably the single most high-value thing that you can do, because I think the risk will compound and it'll go up. In the not too distant future, your CEO will freak out, a board will get a risk report, they will fail an audit, and the shit will hit the fan."

The most overhyped thing in AI right now

Palihapitiya said:

"Revenue. It creates breathtaking valuations, but I don't think that these multiples are sustainable. And you know we've really done ourselves a disservice."

Humanoid robots in manufacturing

Palihapitiya said:

"Probably within the next 10 years. I think that you're going to see highly specialized tasks within the next five, and broadly speaking, probably within the next 10. I think we're missing two key two key turns of one in the models, and then the second in terms of fine motor actuation. And I think once you get the fine motor actuation and the models to be probably like one order of magnitude better on both, you essentially have an automated factory."