Early groq backer acknowledges high failure rate in AI investments

Sandhya Venkatachalam, founder and managing partner of Axiom Partners, admits about half of her investments are likely to fail. Axiom, a $52 million fund focused on AI-driven startups in construction and insurance, emphasizes identifying future market categories over chasing existing trends. Venkatachalam, previously at Social Capital and Khosla Ventures, invests in AI applications delivering tangible results for real-world industries, rather than conventional software tools. She leverages active AI practitioners and AI tools to enhance decision-making, acknowledging early-stage risks but believing exceptional returns can offset failures if opportunities are captured before mainstream adoption. Venkatachalam invested in Groq in 2016, driven by growing demand for AI infrastructure, despite initial struggles to grasp inference. She now backs startups solving critical industry problems, often requiring deep system integration. Axi’t strategy involves 35 investments, with about half expected to fail, but potential for standout successes justifies the risk. Her approach reflects a broader VC trend, where early bets on emerging tech are seen as essential for long-term returns.