Jason Illian, managing director of Koch Disruptive Technologies, is one of the speakers who will be appearing at VentureBeat’s upcoming Blueprint conference in York, Pennsylvania on March 26-28. At the event, speakers including Illian will discuss how both private companies and Heartland cities can prepare to capitalize on advancements in automation and AI.
Koch Disruptive Technologies is a subsidiary of the 70-year-old Koch Industries. Though Koch Industries is most well known for its oil and gas and manufacturing subsidiaries, KDT isn’t looking to invest exclusively in those industries. Since the fund started operating in November, KDT has invested in two companies: medical device company Insightec, which develops MRI-guided ultrasounds for surgery, and Mesosphere, which develops a hybrid cloud platform that helps companies automate operations for container, data engineering, and machine learning tools.
Ahead of the event, VentureBeat spoke with Illian about what KDT is looking for its investments, and what potential he sees in the fields of AI and robotics in particular. This interview has been slightly edited for clarity and length.
VentureBeat: Tell me what you’ve been up to since KDT began operating in November.
Illian: Among other things, we’ve been focused on building our origination network and meeting great entrepreneurs. We want to work with principled entrepreneurs and remove barriers that might stifle the success of promising technologies. Beyond just being a capital provider, we also stress our desire to create mutual benefit. With over 100,000 employees and $100 billion in revenue, we have a large ecosystem of companies and capabilities that can help an entrepreneur scale their business faster.
VB: What exactly is your investing thesis?
Illian: As a mid-to-late stage venture group, we look to invest in highly disruptive, demonstrated technologies built by principled entrepreneurs. In other words, we want to invest in people, business models, and technologies that will have a significant impact on society in the long term. Because we are a private company and not structured like a typical LP fund, we have the flexibility to think long-term, explore unique investment models, avoid concentration limits, and truly work alongside great management teams to create mutual benefit. While it is still early in our life cycle, I’d anticipate that roughly 70 percent of our investments will be situational and opportunistic versus targeting specific investment themes.
VB: Within the fields of robotics and artificial intelligence, are there any types of applications that you’re particularly interested in?
Illian: As a major manufacturer, robotics and AI are both fields that hold a lot of promise for Koch, and we’re interested in opportunities to create mutual benefit with entrepreneurs in both fields. By that, I mean we are looking for situations where a technology can add valuable capabilities that drive Koch Industries forward, and where Koch is uniquely suited to be a beneficial partner beyond just a capital provider. That might come in the form of various Koch companies as potential customers, or possibly as partners to experiment and refine technologies. Koch can either be an investor or a commercial partner or both, just depends on the situation.
VB: When it comes to B2B applications of AI, there’s the alarmist view AI will eliminate certain occupations and put those people out of work. Then there’s the optimist view that people will be able to have more meaningful careers because some of their most mindless tasks will be performed by a bot. Where does your view about how AI will affect employment fall on this spectrum?
Illian: We’re 100 percent in the second column. We’ve seen this over and over throughout history. Technology advances and leads us to a period of great productivity gains, but also great fear of the unknown. And over and over again, the new tools free us up to work on higher value, more rewarding tasks that can only be done with human ingenuity. Robotics, and eventually AI, hold that same promise of accomplishing the things machines are better suited for and freeing up people to do the more creative things that fall in our wheelhouse.
We’re seeing this play out already within our own companies. Within our finance capability, we’ve been able to train and empower employees to develop software bots to automate parts of their own jobs, freeing them from mundane data entry work that a bot is better suited for. We are also seeing this in our legal capabilities. If we can leverage technologies to free our people to work on more creative and productive endeavors, we certainly want to do so.
VB: Within the U.S., are there any cities in particular that you think are promising spots for AI and robotics activity (besides Silicon Valley)?
Illian: When we talk about robotics and AI, I think most people would certainly consider Boston on the list with places like Boston Dynamics and MIT. Thanks to its long legacy in the automotive space, Detroit is also establishing itself as a player in industrial automation. Pittsburgh is home to Carnegie Mellon’s Robotics Institute and also Uber’s robotics lab focused on self-driving cars, and Philadelphia is starting to show up on the map. And of course, I don’t think you can ignore Chicago or Los Angeles.
Updated on 9/17 with a date change: VentureBeat’s Blueprint conference will now be held March 26-28.