Venture capital can be susceptible to hype cycles. It was obvious in Web3’s funding boom last year and the artificial intelligence hype cycle of late 2010. Now, AI has returned to the zeitgeist but venture capitalist Sarah Guo is confident the hype is here to stay—so much so that she’s staking her new VC fund on that bet.

Guo made Tuesday’s announcement that Conviction Partners had successfully closed Conviction Partners’ first fund, worth $101,000,000. After spending nine years at Greylock, where she rose through the ranks to become the Silicon Valley firm’s second female general partner, Guo left the firm in June. Conviction will enable her to invest with AI startups in check sizes of between $1 million and $10 million. Guo is starting out as a solo investor, but plans to build a team around her that’s tailored to AI’s research-heavy nature.

One example is her hiring of a visiting scholar as an AI researcher. Additionally, Conviction plans to continue recruiting academics for new models development and collaboration with startup investors. “We’re not going to assume the traditional knowledge of what a venture firm thinks belongs in house and out of house,”She shared her tale ForbesInterview. Interview. “doesn’t make sense.”

Guo was the daughter of Chinese immigrants. Both her parents, who were entrepreneurs in tech and both worked at Bell Labs. She became immersed in technology as a teenager, building a website for her parents’ company. She graduated from Penn and worked two years as an investment banker at Goldman Sachs, Casa Systems (a startup in broadband networks) and Goldman Sachs, as a tech investor banker. Greylock was the one who brought her aboard in 2013. She credits Greylock for giving her access to investment opportunities in sectors such as crypto and health tech.

Her most lasting memory was of AI. According to her, she thought about quitting Greylock and opening a new business with Andrew Ng. Andrew Ng was cofounder of Google Brain in 2016 which also happened to be the year she was elected to the board. Forbes’ 30 Under 30 list for Venture Capital). Despite this, AI had a VC hype phase just like Web3. It ended after the revenue and technology were too slow. “A couple of very smart investors asked me over dinner in 2018, in the trough of disillusionment [about AI], what I’d gotten wrong about bots and natural language,”She spoke. “I abashedly admitted that the underlying technology wasn’t quite there.”

Guo believes that the recent breakthroughs in technology made by Hugging Face or Stability AI show that science is progressing at an accelerated pace. Guo thinks AI will be the basis technology of the future, and not the blockchain-based Web3. Guo claims she left Greylock because of her convictions and wanted to invest in the same type of technology. “classic startup story of wanting to do something that’s really different—often, that’s much easier to do starting from scratch.”

Guo claimed that she raised her fund in only 10 weeks. Guo stated that the fund includes both institutional investors, such as university endowments. However Guo could not identify names. It also features around 50 founders or executives who are believers in AI. Because she can access higher quality companies for lower prices, it is a blessing that her fund was raised during the downturn. “It would be really problematic to be starting a venture fund at the peak of the bull market,”She stated. “Capital was insanely abundant and that affected the actual quality of investing and the quality of decision making.”

Conviction Partners plans to invest in 20 startups utilising AI. “You have to design a company differently to do that: the talent you hire is different and the challenges to solve in the product are different,”Guo declared. Guo stated that these businesses will have to invest more in computing resources than software companies like Amazon Web Services.

“There are plenty of smart investors I respect that say, ‘it’s a hammer looking for a nail’ or ‘no machine learning company I’ve ever invested in has made money,’”Guo stated. “But they’re wrong this time. Lots of things don’t work until they do.”