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Hemant Taneja is a venture capitalist, author, and CEO of General Catalyst, recognized for his insights into how artificial intelligence (AI) is reshaping industries and economies. An MIT graduate with multiple degrees, Taneja was an early investor in companies such as Stripe, Snap (SNAP), Grammarly, and Anduril, with a focus on applied AI, healthcare transformation, and responsible innovation. 

His new book, The Transformation Principles: How to Create Enduring Change (co-authored with Kevin Maney), outlines nine principles for creating sustainable change. Under his leadership, General Catalyst has raised billions while emphasizing ethical AI deployment.

In this recent interview, edited for length and clarity, Taneja discusses how individuals and companies can transform themselves, mentions AI stocks with growth potential, outlines the risks of AI, and explains why it represents both a huge opportunity and a challenge. 

MarketWatch: What’s the central message of your new book, and why is it timely now? 

Taneja: We are entering a technology cycle where AI is going to be a transformative force, and it’s going to transform many industries. There is an opportunity to actually make capitalism work for everybody if we make the right intentional choices.

MarketWatch: What does a company need to do to have a successful transformation? 

Taneja: For an organization to be transformative, it needs to have a culture of curiosity and generosity. They need to transform, but not disrupt. Disruption is the alternative to transformation.

MarketWatch: Should an individual begin transforming themselves today?  

Taneja: You have to. Steve Jobs said that first we have to change ourselves, then we change our industry, and then we change the world. We have to transform ourselves to deliver greater value and then gain the ability to transform the industries that we work in.

MarketWatch: Is AI going to be more transformative than the internet? 

Taneja: It will be bigger. When the internet came, it was all about making things more efficient, but humans were still doing the work, and software was making them more efficient. With AI, you're basically saying it will do the same job as a human for the most part. When ChatGPT first arrived, every CEO in every industry and in every country was thinking about what to do with it. It was the first time a technology hit the zeitgeist across the entire world at the same time (i.e., it became a global cultural phenomenon).

MarketWatch: Many employees fear that AI means job loss. How can leaders introduce it in a way that builds trust and gets people on board?

Taneja: Change is scary for a lot of people which is why trust matters. If AI people came into your company and said to your employees, “We are going to transform your business,” the natural response is that you’re going to kill their jobs. That’s because you didn’t take the time to build trust. Instead, tell them, “We're going to bring in this technology that will make you more effective and help you grow.” They would embrace it. 

MarketWatch: Which companies are getting AI adoption right today? 

Taneja: In my book I talked about companies such as Applied Intuition, Hippocratic AI, Stripe, and Commure.

MarketWatch: Are there any AI companies that you believe have the most long-term potential? 

Taneja: Some of the AI model companies are obviously doing very well. If you look at the consensus, it would be OpenAI and Anthropic. There are also open-source companies, such as Mistral, that are building AI models that are quite interesting. There are also companies that are imagining modern call centers, the evolution of the legal department, how accounting is being done with AI, how marketing and sales are going to be done using AI, and how to empower sales reps. Those types of companies are going to be very, very interesting over the next ten years.

MarketWatch: What do you see as the biggest risks of AI adoption? 

Taneja:  We are going to transition from a culture of solving problems to a culture of asking questions, which will be a big transition. We want to make sure we're not losing our cognitive capabilities, our ability to think, and our ability to solve problems. How do you make sure you're using AI to improve what you're doing, but not using AI to be lazy and not think? There is a trap you can fall into, whereas these technologies get better and better, and you stop thinking. Think about how to get from point A to point B today. People turn on the map program and lose all touch of how things are laid out physically. You don't want that to happen to all concepts in your brain. It is a downside if we become too reliant and give up sharpening our own cognitive skills.

MarketWatch: What are the key steps leaders must take to successfully integrate AI into their organizations?

Taneja: There are four steps leaders must take to make AI work: First, they have to change their data infrastructure and their IT (information technology) department so they can adopt AI. Then they must train them with the data. Next, they have to change their workforce because they now have humans and AI working together. What a lot of CEOs got wrong is they didn’t realize that the only way a profound change will happen in their company is if they demonstrate courage and conviction. They have to encourage their people to take risks and show them how it will make them more successful. Otherwise, people get scared, and they won’t use it. That’s how a lot of organizations get stuck. 

MarketWatch: What is the biggest cautionary lesson leaders should keep in mind as they adopt AI? 

Taneja: There will always be those who use it for societal harm. We have to trust the system to build the right guardrails. Over time, this technology will be properly regulated in terms of who gets access to it and how it gets applied. Like any new technology, it could be bumpy. I have an optimistic view that human beings will find a way to leverage these profound technologies for good in the aggregate, such as what happened with nuclear. 

MarketWatch: With AI reshaping so many industries, how can employees protect their careers and make sure they thrive in an AI-driven workplace?

Taneja: The most concrete and useful advice I can give is to learn how to adopt AI to do your job more effectively. That's really what you should be doing. This means asking the right questions (i.e., prompt engineering) and being more strategic in your own work. It’s a huge opportunity for employees. In our company, we’re encouraging everybody to use AI to do their jobs to a greater degree.

MarketWatch: What guidance would you give recent graduates entering today’s fast-changing job market?

Taneja: To understand that the world is going to change a lot in the next few years. When kids used to graduate ten years ago, they would list all the software they knew how to use on their resume. Now we’re in a world where that software is changing every three months, and you’re constantly having to learn and keep up to be effective at your job. Being a lifelong learner is important. The world is an empty canvas. Let’s have AI shape the world to be what we want it to be. 

MarketWatch: Looking ahead, how do you see AI reshaping society and business in the years to come?

Taneja: AI is a transformative force, and we have an amazing opportunity in front of us to transform society, to transform nations, to transform industries, and to transform our own business with AI with this mindset of abundance, of building companies that are truly focused on purpose and profit. We need to find the ingredients required to be able to build companies that can be agents of such transformations.