Jack Selby on AI Euphoria, Geopolitics, and Why Non-Coastal VC Has the Edge

Bloomberg recently interviewed Jack Selby, Managing Partner at AZ-VC. Click below to watch the video or read the key takeaways for founders, operators, and talent in the Arizona tech ecosystem.

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1) “AI is real but the private market euphoria is, too.”

Selby draws a sharp line between the transformative power of AI and what he sees as bubble-era pricing on the coasts. He cites soaring cost forecasts at top AI companies and suggests that if some of these were public, their stocks would have cratered on guidance alone. His core point:

• Great tech ≠ great price. Many late-stage AI rounds look mispriced relative to their true cost structures.
• When the dust settles, there will be winners but also massive capital loss across weaker players.

Analogy: Think dot-com search. Google survived; Lycos/AltaVista didn’t. Today’s AI leaders may endure, but many “story stocks” won’t.

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2) Five years of “cheap ingredients,” then a reckoning

Right now, AI tools make the world feel deflationary for users and builders, “ingredients” priced below true cost. Selby likens this to the “Uber for X” era, when services were underpriced to buy growth.

• Short term: Everyone benefits. More capability, lower apparent costs.
• Medium term: Reality returns. AI inputs must be priced at cost + margin. Expect a repricing over the next few years.

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3) Geopolitics will shape tech outcomes (and valuations)

Selby highlights a tension: the U.S. wants national tech champions that can compete globally, yet regulators also scrutinize big platforms for antitrust. Striking the balance is hard.

• TikTok example: He expects a “land the plane” scenario; politically workable, culturally realistic.
• Implication for investors: Policy risk is investment risk. Expect precedent-setting outcomes that ripple into how cross-border tech is valued and governed.

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4) Picks-and-shovels > pricey pure-play AI

For investors entering overheated categories, Selby favors infrastructure and enablers (the “picks and shovels” that power AI ecosystems) over bidding wars for pure-play AI darlings.

• Rationale: Better entry prices, durable demand, clearer monetization.

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5) Asia: opportunity, but know the terrain

As a U.S. investor, China access is hard; India and Southeast Asia are more approachable but still require time on the ground and local partners. The gating factor he watches: liquidity outcomes (IPOs, large acquisitions).

• More exits → more LP confidence → more capital → better ecosystems.
• He’s long-time bullish on hubs like Singapore and still sees energy in Hong Kong, with the caveat that local expertise wins.

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6) Markets are cyclical—and right now favors early stage

Selby’s cycle view: post-peak (2019–2021) reset is turning up again. That makes now a strong window for early-stage.

• This is when the next PayPal/Google/Palantir gets started.
• But again: be price-disciplined; don’t confuse momentum with value.

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7) Non-coastal advantage: Arizona’s discount and depth

Selby’s Arizona thesis is simple and powerful: great founders don’t only live on the coasts, but coastal pricing still dominates late-stage deals.

• He estimates comparable Silicon Valley rounds can price ~70% higher than similar companies in non-coastal markets.
• AZ-VC’s playbook: invest at a discount, coach companies up, then syndicate with coastal firms when value inflects.

Why it matters for Phoenix: Founders get serious capital and mentorship without coastal burn rates. Talent gets access to scaled opportunities without relocating. The ecosystem compounds.

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8) Company snapshots: Palantir and platform scrutiny

Selby credits Palantir for riding the AI tailwind effectively and evolving beyond early misconceptions. He doesn’t handicap the stock, but he underscores a theme: platform companies that operationalize AI credibly can capture outsized value, despite regulatory noise.

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What this means for Arizona founders and talent

• Build real, price real. Take advantage of today’s “cheap ingredients,” but plan for input costs to normalize. Compete on unit economics and clear value, not hype.
• If you’re not pure-play AI, be indispensable to it. Data infra, security, model ops, domain-specific tooling; these are resilient lanes.
• Use the non-coastal edge. Raise smart in Phoenix; scale with selective coastal participation when it truly accelerates your trajectory.
• Expect policy volatility. Bake geopolitical and regulatory scenarios into roadmaps, especially if your customers or data cross borders.

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The Freeway takeaway

Selby’s lens aligns with what we’re building in Phoenix: people first, work rewired, and a capital stack that rewards real products, real customers, real outcomes. The opportunity isn’t to mimic the coast. It’s to out-execute at better prices with a community that opens doors.

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Keep the momentum going: Tech Talent Summit — Nov 6–7, Downtown Phoenix

If you are a Founder investor or job seeker, this is the spot to be to meet companies that are hiring. We will have 70% startups and 30% corporations. We will have an international Tech Arizona Advocates (Freeway X) session on November 6 and we welcome out-of-state and out-of-country visitors to check out the Phoenix ecosystem first hand. Also be sure to join our sector tracks in AI, software, health tech, and defense tech.

Get tickets →

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