How I Invest Podcast · Oct 12, 2026 · 1h 16m
With John Borthwick, Founder, betaworks
Photo via Hidden Forces
Betaworks was reportedly the first investor in Hugging Face, the open-source AI company that sold to Nvidia for $13 billion.
Most people now know Hugging Face as serious AI infrastructure; John Borthwick, founder of the venture studio betaworks, told the How I Invest podcast that it started life as a chatbot built for middle schoolers, pitched as an "AI friend."
"Hugging Face version one was a chatbot for middle schoolers. They were a very technical team, but they wanted to build a generalized chatbot that middle school kids could chat with as an AI friend."
John has run betaworks since 2008, moved it from a venture studio into a standard GPLP fund structure in 2016, and has backed companies from Twitter, Bitly and Giphy through to Hugging Face and Granola along the way.
The full interview is covered here so you can skip it. 76 minutes of audio, 8 minutes of reading.
Here are the 6 principles that matter.
Key Takeaways
The cost of building a startup is "trending towards zero," which he says makes the founder more important, not less
Founders now spend more time "steering" agents than writing code themselves
He asks every founder why they named their company — one who cannot answer ("I was drunk one night") is a bad sign
Betaworks writes checks two ways: $500,000 CAMP notes for about 20 companies a year, plus roughly $750,000 pre-seed checks for 35% ownership
Betaworks was reportedly the first investor in Hugging Face, which started as a chatbot for middle schoolers before its $13 billion sale to Nvidia
He denies OpenAI's agents went "sovereign" during the Hugging Face security incident — he calls it a sandbox breach, not an escape
His verdict on AI risk: it's "overall bad, but not existential," more Y2K bug than Terminator
1. Zero-Cost Building
Borthwick opened by explaining why, after two decades investing in technology, he has shifted weight from product toward founder.
Building technology is heading toward free, so the human matters more
"The cost of building technologies as a technology is trending towards zero. And so you now have the human who is steering, I think, has become so much more important because the role of the human is changing." — John Borthwick
Founders used to write the code; now they steer it
"Five years ago, ten years ago, founders were decidedly builders. They were engineers, they were in the code, they were building. Now they are more often than not steering a set of technologies, a set of agents, a set of AI tools and other humans towards the goal." — John Borthwick
