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We’ll see greater investment in improving Internet: VC

America's 'horrible' Internet

Sprint's chairman is right when he says America's Internet service is horrible, but don't despair, venture capitalist John Lilly told CNBC's "Power Lunch" Thursday.

With more people living on their phones, laptops and tablets, "there's a real market. I think people will see greater and greater investment. I think we already have," Greylock Partner's John Lilly said in an interview from the Re/code Code Conference.

Masayoshi Son, CEO of SoftBank and chairman of Sprint, spoke to the audience at the technology website's conference Wednesday and said Americans don't understand how bad its Internet speed is.

"This is the country that invented Internet," Son said. "How can Americans live like this?"

Read MoreAmerica doesn't know how bad its Internet speed is: Sprint's Son

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Lilly, who led his firm's investments in Instagram, Dropbox and Tumblr, said his cell phone service is often faster in the London subway than the Internet service at his house in California.

"We obviously have real improvements that we need to make and real investments we need to make in infrastructure," he said. "It's a big problem. It will take money."

Diversity in Silicon Valley

Lilly also weighed in on diversity in Silicon Valley. On Wednesday, Google released data that showed its workforce is largely white and male. Just 2 percent of its employees are black, 3 percent are Hispanic and 3 percent are women.

Although he said, "we don't have enough women leaders that are visible," he applauded Google for its disclosure.

The Internet search giant said in a statement Wednesday, "Google is not where we want to be when it comes to diversity, and it's hard to address these kinds of challenges if you're not prepared to discuss them openly, and with facts."

Read MoreWhite and male, Google releases diversity data

Technology fields have "historically been more male and more white," Lilly said. "I think that can change over time, and I already see it happening."

However, he added, "It's not changing fast enough but Google's disclosure will help that."

Data security 'ever-escalating war': Lilly

The escalating war with hackers

Silicon Valley knows its vitality depends on security, and people are spending more time working on ways to make the Internet safer, Lilly said.

"It's an ever-escalating war" with hackers, he said.

Read MoreIranian hackers use fake Facebook accounts to spy on US, others

"The truth is, data online is often safer than data in the real world is—you hand your credit card to waiters and staff all the time ... but that doesn't mean it's not a problem and we shouldn't address it more and more."

By CNBC's Michelle Fox. The Associated Press contributed to this report.

Disclosure: NBC News group is a minority stakeholder in Re/code and has a content sharing partnership with it.