• Victor Lazarte, a general partner at Benchmark, said AI is "fully replacing people."
• He said two white-collar professionals should be very nervous: lawyers and recruiters.
• Lazarte also said companies would become "more valuable" and much smaller.

One tech investor isn't buying the corporate spin about AI boosting workers.

"Big companies talk about, like, 'AI isn't replacing people, it's augmenting them,'" said Victor Lazarte, a general partner at Benchmark — the venture capital firm that has backed big names including Uber, Asana, Snap, and WeWork.

"This is bullshit. It's fully replacing people," he added.

Lazarte said on an episode of the "Twenty Minute VC" podcast published Monday that two professions should be especially nervous about AI: lawyers and recruiters.

He said law school students should think about what they could do three years from now that AI could not.

"There's not going to be that many things," he said.

Fresh associates often do law's grunt work, and the legal tech industry is buzzing about how AI could cut down busywork.

Lazarte also said AI models would soon be better than people at interviewing candidates — and far more efficient than companies' messy, manual hiring processes.

Lawyers and recruiters are feeling the pressure

Legal and recruiting fields are already being reshaped by AI.

In March, an employment lawyer told Business Insider's Melia Russell at a legal tech conference that "lawyers are dinosaurs."

"Lawyers need to wake up," said Todd Itami, a lawyer at the large legal defense firm Covington & Burling. Learning to use artificial intelligence is "imperative" for their success, he added.

On the recruitment front, startups are trying to automate the hiring process.

In March, BI reported that OptimHire — a startup using AI to replace job recruiters — had raised $5 million. The company says its AI agent, OptimAI Recruiter, can source candidates, conduct screening calls, and schedule interviews for hiring managers, reducing the time and cost of filling open roles.

BI reported in 2023 that HR and recruitment teams were increasingly using AI tools at multiple stages of the hiring process, from reviewing résumés to short-listing candidates. Tech leaders predicted the tools would make the hiring process faster for HR workers and could even prove valuable to job seekers.

Smaller teams, bigger profits?

While AI may be coming for jobs, Lazarte said it was also going to supercharge companies.

With costs slashed and productivity soaring, he said, companies will become more valuable — and much smaller.

"You're going to have these trillion-dollar companies being done by very small teams," he said. "People that own shares will get richer, founders will get way richer."

But he warned that the rise of ultra-lean, AI-powered businesses could be a double-edged sword.

It could also be a "very destabilizing force," Lazarte said, adding that these AI-powered businesses could unlock massive value for society but also risk deepening inequality.

And Lazarte doesn't think AI's influence will stop at the office.

"Pretty soon we're going to have an app that just tells us what to do all day — and we're going to love it," he said. "We'll be obedient to machines."

• No Western companies have applied to return to Russia, a top Russian official said.
• He signaled tough negotiations for returning Western firms.
• Trump's Moscow talks have spurred speculation about a corporate return to Russia.

No Western companies have applied to return to Russia, a top Russian official said on Thursday — a contrast against recent active speculation about a corporate return to the market.

"No one has officially applied yet, only informally testing the waters so to say," said Dmitry Medvedev, the deputy chairman of Russia's Security Council, according to TASS state news agency.

The Trump administration has been seeking a cease-fire deal with Moscow, spurring discussions about a return of Western businesses to Russia.

Western brands "will be waiting for their management to give a signal," Medvedev said.

Companies that left Russia include fast-food giant McDonald's and coffee chain Starbucks.

Medvedev indicated it wouldn't be easy for the foreign companies — who he said left on their own accord — to return to Russia, as the country's businesses have filled their shoes.

"Our companies have taken many niches by now, well done to them. New expertise, new production sites, and even whole sectors appearing amid sanctions have emerged. They fairly earned their place in the sun, and they are ours, Russian," Medvedev said on Thursday.

Medvedev's comments echo those made by Anton Alikhanov, the Russian industry and trade minister, who said last month that Russia was "not waiting for anyone with open arms" and that there would be "a price to pay for past decisions."

On Tuesday, Russian President Vladimir Putin doubled down on his officials' stance, per TASS.

"To prevent cases when the owners sold their business in Russia at a bargain price essentially left it to its fate, and now they want to buy the asset back for the same peanuts. It shouldn't be like that, that's not the way it works," Putin said. "The market situation has changed, the companies have become stronger, increased their capitalization and are valued differently."

Caution ahead

More than three years into the war in Ukraine, 483 foreign companies have left the Russian market completely, according to the Leave Russia database from the Kyiv School of Economics.

The exit of foreign businesses created winners at home in Russia, some of whom picked up assets at fire sale prices. They would likely need to be compensated to give up their businesses.

"Freely allowing foreign companies back in is going to diminish their profit streams and make life a lot more competitive, so if that is going to happen, Russia wants some kind of compensation for liberalizing its market," said David Szakonyi, a specialist in Russia's political economy at George Washington University, told Business Insider last month.

Avtovaz, the former Russian partner of Renault, said last month that the French carmaker would need to pay about $1.3 billion if it wishes to return after the war.

Despite the lure of the large Russian market, analysts have recently said that businesses are likely to be cautious about a return to the country, even if sanctions are lifted.

Russia's wartime economy is facing multiple issues, including high inflation, currency volatility, and sky-high interest rates. Putin's ironclad reign also presents concerns about the rule of law and safety.

Investors are likely to remain cautious after corporate nationalization and asset seizures in the past few years that redistributed international corporate wealth to the Russian state and oligarchs.

• It's "really hard" to be a public company right now, a senior Baillie Gifford fund manager said.
• They face reporting requirements and shareholders with different interests, Peter Singlehurst said.
• "You can build a better business by staying private for longer," he told the 20VC podcast.

Companies should stay private for longer because they can "build a better business," a senior fund manager has said.

"It's really hard to be a public company. It's really hard," said Peter Singlehurst, head of private companies at British investment management firm Baillie Gifford.

Singlehurst made the comments in an interview with 20VC podcast host Harry Stebbings.

"I think what people realize today is that you can build a better business by staying private for longer," Singlehurst said.

He described the reporting requirements as a burden for publicly listed companies.

"You can have people owning your shares for all sorts of reasons that are misaligned with what you're trying to do as a company," Singlehurst said, adding that everything the company does has to be done "in the cold light of day."

"All your competitors get to know pretty much everything about your business because you have to tell your shareholders pretty much everything about your business," he said.

Baillie Gifford's investment in private companies includes stakes in ByteDance, Epic Games, FlixBus, Stripe, and SpaceX, per its website.

On the podcast, Singlehurst recalled Tim Sweeney, CEO of Epic Games, once telling him that it was much easier to be private. But Sweeney also said going public can be the better option, depending on what your business needs to do, Singlehurst said.

He added that reasons for going public can include the need for liquidity, the desire to acquire other companies, or engaging with regulators.

But he said there had been an "evolution" of "very large, company-facilitated secondary rounds," which could become a source of liquidity for investors in private companies.

Singlehurst didn't cite specific examples, but Tesla's stock has slid in recent weeks amid declining sales and a backlash to CEO Elon Musk's political interventions. The fall has proven a boon to short sellers betting the stock will lose value.

Redfin is being acquired in an all-stock transaction that values the real estate listing platform at $1.75 billion. The acquiring company is Rocket Companies, a Detroit, Michigan-based finance and real estate holding firm that owns various brands, including Rocket Mortgage, Rocket Money (formerly Truebill), and Rocket Loans. The combined entity will essentially pool the two […]

© 2024 TechCrunch. All rights reserved. For personal use only.

• The CEO of Denmark's largest retailer said it will start labeling goods made by European companies.
• A spokesperson told BI that customers had asked for greater clarity, but weren't rejecting US goods.
• However, the move comes amid souring relations over Trump's comments about taking over Greenland.

The CEO of Denmark's largest retailer said that his company will start marking its goods to indicate which ones are made by European companies, in what he described as a response to customer demand.

Anders Hagh, CEO at Salling Group, wrote in a LinkedIn post on Thursday about the move, saying they'd received inquiries from a number of customers who wanted to buy groceries from European brands.

"Our stores will continue to have brands on the shelves from all over the world, and it will always be up to customers to choose," he added.

Hagh shared a sample image showing a black star on a pricing label to show the product's European origin.

The move comes amid strained transatlantic relations and widespread public outrage at President Donald Trump's repeated comments about how the US should take control of Greenland, which is part of Denmark.

Salling Group, which commands about 36% of the Danish market, operates more than 1,700 stores across countries including Denmark, Poland, and Germany, including the Netto supermarket chain, the føtex department store, as well as hypermarket Bilka. They reported a combined revenue of more than $9.8 billion in 2023.

In his post, Hagh made no reference to the tensions with the US but said that the Salling Group had recently received inquiries from customers who wanted to buy goods from European brands.

Christoffer Green Sørensen, a company spokesperson, told Business Insider that the group's customers had "not made inquiries regarding a boycott of the USA," adding: "They have solely requested more explicit information about European ownership."

He added that the change is set to come into its Danish stores "within two to three weeks," with the possibility of rolling it out across German and Polish stores later.

Public sentiment in Denmark has soured since President Donald Trump's Greenland comments.

Mette Heerulff Christiansen, the owner of a delicatessen store, told Danish TV earlier this month that "Trump has only been president for a month, and we have already felt that our customers have an opinion."

She added: "I actually think it's the start of something that could almost become a movement here in Denmark and elsewhere in Europe."

Trump's sharp criticisms of European and NATO policies have also set alarm bells ringing for the status of the transatlantic relationship.

A Danish group titled "Boycott goods from the USA," created in response to what it described as a trade war by Trump, has more than 36,000 members on Facebook.

Meanwhile, an English-language subreddit named r/buyfromEU, set up less than two weeks ago, has 57,000 members and counting.

• President Donald Trump signed an executive order ending DEI programs in the federal government.
• Given the spotlight on DEI, lawyers say private sector companies should asses their own policies.
• It's "almost certain to create a chilling effect on corporate DEI initiatives," one lawyer said.

Corporate America's DEI practices are facing scrutiny like never before.

And thanks to President Donald Trump's executive order ending diversity, equity, and inclusion programs in the federal government, the private sector's DEI efforts have come under heightened legal risk.

Trump's order encourages the private sector to end "illegal DEI discrimination and preferences." As part of that plan, the order tasks each federal agency to "identify up to nine potential civil compliance investigations" of enterprises including publicly traded corporations and large nonprofits.

Given the current spotlight on DEI initiatives and Trump's executive actions targeting them, employment attorneys told Business Insider that companies would be wise to assess their own diversity-related programs with legal counsel to make sure they are ironclad in the face of potential federal investigations or workplace lawsuits.

"The main thing that employers should be doing right now is conducting what we call either a DEI audit or a vulnerability assessment," said Michael Thomas, a California-based attorney specializing in corporate diversity practices at the law firm Jackson Lewis.

Under this type of assessment, companies would work with outside counsel to review their policies and practices related to DEI and equal employment opportunity.

DEI initiatives that focus on the requirements of federal equal employment opportunity laws are most likely to be legally compliant, Thomas said.

Hiring quotas or preferential treatment to certain groups of people were already illegal and now pose a higher legal risk, Thomas said.

"The law hasn't changed," Thomas said, explaining, however, "Your scrutiny has increased, the attention has increased, and you face potential legal, reputational, and brand risk from both your majority, for lack of a better phrase, and also your underrepresented groups."

Jon Solorzano, a partner at the law firm Vinson & Elkins, told BI the legal grounds involving diversity initiatives haven't really changed, "but the risks have."

"DEI initiatives are not, in and of themselves, problematic," said Solorzano, who advises public and private companies on areas related to ESG (environmental, social, and governance) and risk management.

"It's just that there is more scrutiny on the acronym and now the full force of the federal government has squarely taken aim at this concept," Solorzano said of DEI.

Solorzano said that he has already spoken with numerous companies that have inquired about whether their DEI policies are compliant with the law, and what, if anything, they should do to change their practices to minimize their risks of being a target of an investigation.

"This executive order is almost certain to create a chilling effect on corporate DEI initiatives," said Solorzano, who added that he expects to see even more companies roll back their DEI efforts.

Though, companies "need to be careful about clumsily nixing all initiatives," Solorzano said. "Pulling out of initiatives, just because it is politically disfavored at the moment, may not be the right thing for a business over the long term. But careful calibration of the risks and values of pursuing these initiatives remain critical."

Domenique Camacho Moran, a partner at the law firm Farrell Fritz in New York, also called it "critical" that every organization continues to evaluate its DEI-related policies to ensure they are not "in the interest of doing something good, inadvertently crossing the line."

DEI programs, which many companies have adopted in recent years, "often talked about commitment to equal opportunity" and about "educating the workforce," Camacho Moran said. "They rarely included numbers or targets for specific diversity initiatives."

Those programs, however, "were not scrutinized closely by a variety of government agencies, and so some of those programs were outlined and articulated programming and opportunities that emphasized a particular minority group or particular protected class," Camacho Moran said.

Attorneys told BI they now expect, due to the current political climate, employers to face an uptick of lawsuits alleging discrimination and so-called reverse discrimination.

Peter Woo, also an attorney at the firm Jackson Lewis, said it is likely employers will see a rise in internal complaints from employees who are for and against DEI initiatives, which will likely translate to more lawsuits.

"Companies should have a heightened sense of awareness now in terms of how to approach these because of the fact there will be more inquiries, more complaints internally," Woo said.

Thomas said there had been legal challenges to DEI programs since the Supreme Court's 2023 ruling ending affirmative action in college admissions, and expects those challenges to increase post Trump's executive actions taking aim at DEI initiatives.

Ron Zambrano, the employment litigation chairman at the California law firm West Coast Trial Lawyers, told BI he also expects to see a rise in lawsuits related to companies' DEI efforts.

The potential complaints may even cite Trump's executive order targeting DEI initiatives "as a form of legitimacy," Zambrano said.

Those possible lawsuits would succeed only "if they would have succeeded regardless of Trump or Trump's executive order," Zambrano said.

"It does happen. There is reverse discrimination. It absolutely does exist, but it's not as pervasive as just, like, well, the existence of DEI means that only minorities are going to have the advantage," said Zambrano. "That's the implication, right? That's the fear. That's the messaging."