Amid the ongoing revolution in artificial intelligence, Antonio Gracias, the founder of Valor Equity Partners, introduces a new key term: proentropic.
During a discussion at this year’s Upfront Summit in Los Angeles, he explained that the term describes startups designed to succeed amidst chaos and disruption, such as climate volatility, geopolitical shifts, and technological advancements.
Derived from physics, entropy measures disorder or uncertainty in a system. According to the second law of thermodynamics, disorder in a system naturally increases over time, reflecting real life’s tendency toward chaos.
Gracias acknowledged the term’s complexity, noting he began contemplating it in 2013, when he foresaw deglobalization and technological change altering global power structures.
He noted the world’s shift toward chaos since the late 20th century due to growing human populations and evolving technologies.
Gracias cited SpaceX as an example of companies adept at predicting future conditions and identifying pathways forward.
He emphasized that these companies incorporate a probabilistic worldview into their strategy, recognizing that circumstances can change unpredictably.
Such businesses benefit from considering potential edge scenarios, he added.
Gracias also discussed the firm’s strategy of conviction, emphasizing the need for moral courage to improve the world amid current economic conditions.
He highlighted the intersection of climate, energy, and hardware, using Tesla to illustrate the potential for building remarkable products with limited computing resources through software and hardware integration.
Addressing concerns about artificial intelligence, Gracias challenged the prevailing notion that it will lead to negative outcomes, such as job losses and social unrest. Instead, he believes AI presents unprecedented opportunities.
For instance, more effective low-code/no-code tools could enable a wider range of individuals to launch companies, unlocking new levels of productivity.
“Who knows what they will build,” he remarked.
“We will decide whether we have a utopian future or a dystopian future.”