Welcome to Directionally Correct

The history of computing has been defined by its architectural shifts, from the internet to cloud infrastructure and mobile platforms. Foundation models now represent the next major platform shift, projected to create trillions of dollars of value while reshaping our economic and social lives.

As a venture capitalist at Menlo Ventures, I’m fortunate to engage with founders, engineers, and researchers at the frontier of this new AI revolution every day. Through this newsletter, I'll share insights from my ongoing conversations and research, offering a look into the latest developments on the ground and (a decade from now looking back, hopefully mostly correct) takes on emerging trends in AI.

Here’s what to expect:

• Data-driven analysis of AI adoption trends and usage patterns

• Technical explorations of emerging architectures, like AI agents

• Deep dives into early-stage markets, such as the modern AI stack

• Investment perspectives, including why Menlo backed leading AI companies like Anthropic, Neon, and Unstructured

About me

I’m Derek Xiao, an investor at Menlo Ventures. I spend most of my time thinking about AI infrastructure and applications, with investments including Anthropic, Neon, and Unstructured.

Before Menlo, I was a consultant at Bain. I started my career as a tech reporter at Forbes. My short-form notes are published via X @derekgxiao