Antonio Gracias says he’s longing for ‘proentropic’ startups — those that are built to survive chaos

In the midst of the ongoing artificial intelligence revolution, Antonio Gracias, founder of Valor Equity Partners, introduced a compelling new concept at this year's Upfront Summit in Los Angeles: 'proentropic.' This term describes startups specifically engineered to flourish amid chaos and disruption, which have become increasingly prevalent in today's volatile climate, geopolitical landscape, and technological advancements. The notion of proentropy draws inspiration from physics, where entropy signifies the degree of disorder in a system. According to the second law of thermodynamics, disorder will inevitably increase over time, reflecting the natural progression toward greater unpredictability—much like real life. Gracias first contemplated this idea back in 2013, predicting that a combination of deglobalization and technological evolution would fundamentally alter global power dynamics. He believes the world has been trending towards chaos since the late 20th century, driven by expanding human populations and rapid technological change. Gracias emphasized the importance of identifying businesses that can adeptly anticipate future uncertainties. He cited SpaceX, one of his portfolio companies, as a prime example. These companies are not just reacting to current market conditions; they are strategically designed to adapt to unforeseen changes. "They’ve integrated a probabilistic mindset into their operations, allowing them to thrive even when faced with extreme scenarios," he noted. During the discussion, Gracias also reflected on the firm’s investment philosophy, linking it to the broader economic landscape. He asserted that in this new era, building a better world requires moral courage, particularly at the intersection of climate, energy, and technology. He pointed to Tesla as an example of how innovative products can be developed with minimal computational power when software and hardware are effectively combined. Looking forward, Gracias challenged the prevailing narrative surrounding artificial intelligence, which often paints a bleak picture of job losses and social unrest. He expressed optimism, asserting, "I intend to work diligently over the next five to ten years to counter this narrative." He believes that the rise of low-code and no-code tools will empower more individuals to launch their own businesses, potentially unleashing unprecedented levels of productivity. "The possibilities for innovation are limitless," he concluded, underscoring the choice between a utopian and a dystopian future in our rapidly evolving world.