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Why LinkedIn's Hoffman is a 'patient' venture capitalist

LinkedIn co-founder: AI is a great opporutnity

Tech bubble, schmech bubble. One social media CEO said he'll patiently — but cautiously — wait it out.

Reid Hoffman, co-founder of LinkedIn, revisited the idea of a potential tech bubble at an Internet Association meeting Tuesday. Hoffman is focused more on finding "radically bold, new or contrarian" companies than contemplating a brewing technology crash, he told CNBC's "Squawk Alley" Tuesday.

"Build companies that will transform industries and which year it goes out [public] doesn't actually really matter," Hoffman said. "It's actually more of a question of if it's sustaining."

LinkedIn headquarters in Mountain View, Calif.
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As an investor with veteran venture capital firm Greylock Partners, Hoffman said he is patient enough to wait for that 100- or 200-year company to come along and have a lasting impact on society. Hoffman dismissed the idea that a short-term indicator, like lack of IPOs, should guide venture capital investments.

"Most venture investments are made five to 10 years away from liquidity," Hoffman said. "It's misleading to be taking the current IPO market as an indicator for what kind of investments you should be making."

In particular, Hoffman riffed on the so-called gig economy and artificial intelligence as potentially transformative ideas.

"Anything that is essentially a network, either of communications or of coordination or of marketplace transactions ... that can scale to millions to hundreds of millions of people, those are the kind of things that really interest me," Hoffman said. "Because those are part of what transform our economy, and also our society."

Artificial intelligence, like applications that power driverless cars or diagnose diseases, are also worthy of a lot of attention, Hoffman said.

Though Hoffman is focused on finding the next hot company, he did outline some potential challenges for the technology sector.

One is the ballooning group of highly valued start-ups, which have made Hoffman more and more cautious over the course of the year.

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"There are so many companies being valued at a level where it's uncertain whether they will benefit from the network economy as a way of doing business," Hoffman said.

"In a network world, some companies grow at amazing speeds, creating amazing businesses, and those companies in retrospect always look cheap, at whatever price you invested in them," Hoffman said. "And what happens, of course, is that many companies are essentially valued at that level, and that's when you have what you look at as an overinflation."

Hoffman, who travels frequently to growing markets such as China, also said it's important for technology companies to successfully adapt to different cultural standards when it comes to censorship and privacy.

"There's a lot of things that accrue positively from a global network," Hoffman said. "Sharing business information, best practices on how to grow companies, what sort of technology trends to pay attention to, and transforming industries. So we're very optimistic."