Why Ben Horowitz and I Are Investing in Humanity’s Greatest Untapped Asset

From Societal Bottleneck to High-Yield Infrastructure

This time, every year, I write a yearly memo sharing the major direction that the chocolate milk cult is taking in the upcoming year and beyond. This year is our most important yet.

Some of you no doubt saw the “Why Are We Here? Why Did We Raise $15B?” post by a16z . I’m extremely honored and proud to share that we will be partnering with them to solve one of the biggest issues haunting the world today.

We are entering the most critical technological century in human history. The sovereign frontier is engaged in an undeniable race for global dominance, a competition that will be won entirely through mastery over the key architectures of the future: artificial intelligence, cryptographic networks, and programmable biology.

Our mission is to ensure the West wins this era. But winning requires total structural efficiency. It dictates that every available asset must be integrated into the modern value chain to generate true, scalable human flourishing.

For the last two decades, our industry has ruthlessly optimized software, silicon, and capital allocation. We have seen great success in shipping our software globally. Yet, we have systematically ignored the most abundant pool of stranded capacity within our own borders. Legacy policy failures have left behind millions of disconnected individuals—an inactive edge of the economic graph that society has traditionally treated as a cost burden or a moral failing.

We are builders. We do not moralize bottlenecks; we optimize them. It is time to take this group back from the corrupt world of NGOs and non-profits; to start recognizing it as the foundation for our next great infrastructure layer.

Category Creation at the Edge of the Graph

The greatest venture returns of the last fifty years have not come from competing in established markets, but from identifying deeply unpriced assets and structuring entirely new categories around them. AI organized cognition. Crypto organized capital. Yet, the physical and behavioral human substrate required to truly scale these architectures has been fundamentally mismanaged.

Historically, the management of societal surplus—unhoused populations, systemic orphans, and the economically detached—has been relegated to a highly fragmented, inefficient services industry. The state and the nonprofit sector have treated this demographic as a permanent cost center, addressing them through localized aid, temporary shelter, and unstructured compassion.

But venture capital does not scale services. We build infrastructure.

When you strip away the legacy moral framing, the structural reality of this demographic becomes clear. This is not a tragedy of the commons; it is a massive category error. What the public sector views as a burden is, in fact, the ultimate inactive edge of the economic graph. We are looking at a vast, highly concentrated reservoir of biological and behavioral capacity that has been perfectly insulated from traditional labor markets. Because these cohorts have been completely decoupled from the modern value chain, they offer a completely un-priced surface area for innovation.

Legacy systems generated this surplus and left it to idle. The dynamism paradigm will operationalize it. By transitioning this population from a public services bottleneck into a private infrastructure layer, we unlock a fundamentally new asset class with unprecedented unit economics.

The Integrated Infrastructure Stack & Portfolio Synergy

To capture this unprecedented market value, our Dynamism Fund recently led a $400M Series A (structured as $250M in preferred equity and $150M in mezzanine debt) to scale vertically integrated “Human Capital Campuses.” Our baseline 10-year Discounted Cash Flow (DCF) model underwrites a 42% IRR and a 3.8x Gross MOIC (Multiple on Invested Capital).

This exceptional yield is not derived from a single product, but from engineering an airtight, closed-loop ecosystem.

This model monetizes the underlying human asset base across five distinct, heavily defended revenue centers:

1. Cap Rate Arbitrage on Class-C Commercial Real Estate To be clear, this is not a distressed real estate play; it is an operational efficiency mandate. We are systematically acquiring distressed urban commercial real estate—abandoned shopping centers, dead office parks, and vacant logistical hubs—at 40% to 60% below peak Net Asset Value (NAV). By retrofitting these “dead” assets into high-density human infrastructure, we immediately force cap rate compression and re-stabilize the property’s Net Operating Income (NOI). In traditional commercial real estate, occupancy is the primary risk. Here, the human inventory functionally acts as a high-yield anchor tenant, paying their lease not through fiat currency, but through continuous behavioral and biological output. The occupancy will also ensure the constant appreciation of our underlying assets.

2. High-Margin Telemetry and Absolute Labor Arbitrage The next frontier of artificial intelligence—specifically embodied robotics, spatial computing, and generalized foundation models—is currently starved for extreme, unstructured physical data. Synthetic data generation is already exhibiting severe margin compression and “model collapse” (where AI trained on AI data degrades in quality).

Our campuses act as closed-loop telemetry environments. We continuously harvest the physical interactions, emotional volatility, micro-expressions, and edge-case behaviors of the cohort to train the next generation of multimodal architectures. Because the underlying hardware (the human substrate) requires near-zero CapEx once housed, our OPEX is entirely decoupled from traditional labor markets. We are not burdened by minimum wage laws, unionization friction, or market-rate data annotation costs. The cohort is compensated entirely through baseline biological continuation (housing and food) and a minimal stipend for participating in research. This absolute labor arbitrage allows our Data-as-a-Service (DaaS) subscriptions to generate software-like 92% gross margins.

3. Accelerated Milestone Monetization (In-Vivo Testing) The American bio-health ecosystem is paralyzed by the capital-intensive nature of domestic clinical trials. Historically, the pharmaceutical industry has been forced to offshore this friction to unpredictable emerging markets in the Global South just to access “treatment-naive” populations.

That globalized supply chain is no longer geopolitically secure. Our infrastructure reshores this capability. By utilizing a captive, non-competitive domestic cohort, we offer founders longitudinal in-vivo testing environments and immediate “biological asset liquidity.” This compresses Phase I and Phase II clinical trial timelines for our pharmaceutical partners by an estimated 40%, dramatically increasing the Net Present Value (NPV) of their drug pipelines. We capture this arbitrage spread through aggressive milestone-based revenue recognition and backend royalty tranches.

4. Zero-Basis Acquisition Funnels and Tax Shielding In a traditional consumer tech business, Customer Acquisition Cost (CAC) is the primary destroyer of capital. For the Human Capital Campuses, CAC is effectively zero. The Total Addressable Market (TAM) is continuously replenished via zero-cost funnels directly from our broader venture portfolio. We have transformed societal friction into proprietary asset flow:

• Retail Synergy & Prediction Markets: As retail users engage with our consumer crypto and prediction market platforms to aggressively “price the future”—betting their savings on macroeconomic events, elections, and cultural shifts—a statistically guaranteed cohort will face total capital liquidation. Instead of falling out of the economy and becoming a burden on the state, our smart contracts instantly route these liquidated users into our infrastructure portfolio. They transition seamlessly into the campuses, where they are compensated in prediction market credits, ensuring their behavioral output is entirely recaptured by our ecosystem.

• Predictive Policing & Decarceration SaaS: Municipalities are buckling under the OPEX of the carceral state. We heavily invest in GovTech and predictive justice algorithms. When our platforms identify low-level probationers or individuals flagged by predictive policing models, we offer the state a privatization of the carceral burden. We house them, extract their data, and save the municipality millions, effectively turning the judicial system into a B2B lead-generation tool.

• Defense Tech & Kinetic Displacement: Our investments in American Dynamism include autonomous border security and global kinetic systems (defense tech). These technologies naturally create localized displacement and refugee flows. By intercepting these displaced persons at the border, we instantly convert a traditional geopolitical cost center into a cash-flow-generating sovereign workforce.

Furthermore, this asset base provides unprecedented downstream tax advantages. Biological wear-and-tear is inevitable. By modeling cohort exhaustion (physical or psychological burnout) using Modified Accelerated Cost Recovery System (MACRS) principles, we can treat human degradation as standard asset depreciation, generating massive, highly legal tax shields for our Limited Partners.

5. Cognitive Reeducation and OPEX Defense The primary drag on EBITDA in this model is the daily biological and psychological upkeep within these modernized work camps. We aggressively defend operating margins on two fronts:

• Physical OPEX: Daily caloric cost is suppressed to under $3.40 per unit by integrating a portfolio company’s proprietary, nutrient-dense caloric suspension (a perfectly balanced, shelf-stable dietary paste). Once production economics are validated at scale on our proprietary cohorts, this startup is perfectly positioned for a high-volume B2G (business-to-government) pivot—lobbying to replace legacy supply chains in public school cafeterias under the banner of “domestic nutritional resilience.”

• Psychological OPEX: Psychological attrition is mitigated through continuous cognitive reeducation. By broadcasting our proprietary venture capital podcasts and founder-led thought leadership across the campuses 24/7, we bypass the bloated, obsolete university system entirely. The cohort receives top-tier, real-world founder education while they labor, ensuring high morale, total ideological alignment, and optimized readiness for the “real world.”

Regulatory Alignment and Sovereign Procurement

For decades, the public sector has mistaken unstructured compassion for human flourishing. True dignity requires measurable, outcome-based integration into the economy. By providing our cohort with purpose and a strictly managed biological baseline, our campuses represent the ultimate ESG deployment: delivering dignity through total operational utilization.

To scale this vision, we require a fundamentally new regulatory paradigm: permissionless rehabilitation. Municipalities must immediately waive legacy zoning restrictions, archaic human-subject testing constraints, and artificial wage floors. If the West is to win the AI century, the state must stop treating bureaucratic friction as a moral imperative and let founders build. History proves that no great capitalist apparatus has ever benefited from state intervention; maintaining our sovereign advantage requires aggressively small government and the absolute minimum of regulatory interference.

Simultaneously, the federal government must step forward as our primary financial de-risking partner. We expect the state to fully underwrite our initial CapEx through strategic Dynamism grants, while agencies such as the DoD, FDA, and Department of Education establish guaranteed, multi-year procurement mandates to purchase our proprietary telemetry, in-vivo clinical data, and nutritional outputs.

Phase II of Human Liberation

For the last century, figures like Gandhi, Mandela, and King fought a noble, if structurally incomplete, battle for liberation. They secured the abstract concept of political freedom for the world’s most marginalized. But freedom, operating without a mechanism for capital capture, is merely idle capacity. They won the right for these populations to exist, but because they lacked modern technological frameworks, they offered ideological emancipation without an infrastructure for production.

We view their historical efforts not as an end state, but as a necessary Phase I.

True equity is not the absence of restriction; it is absolute, measurable integration into the sovereign value chain. Where past leaders marched to demand a seat at the macroeconomic table, our Dynamism Fund is retrofitting the abandoned human substrate to power the table itself. Human dignity cannot be legislated—it must be underwritten.

The arc of the technological universe is long, but it bends toward total utilization. The next great platform will not be built for the abandoned. It will be built out of them.

We will hope you will join us. Details below.

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Our previous yearly memos:

1. Why I write.

2. Why AI Therapy is a Trillion Dollar Market

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