 Hello, everyone. Welcome to season one, episode five of the Cube podcast, the Cube pod. I'm John Furrier with Dave Vellante. This is, you know, our fifth podcast day. We're getting our wheels on the tracks here, trying to get a cadence down soon. We'll be bringing in guests, but this is our weekly podcast. We break down what we're watching every week of the most important stories from our lens, the prism of the enterprise emerging tech and also commentating on some of the major tech trends as the things that we've been covering for 13 years with the cube and Silicon angle is now going mainstream. You're starting to see things like TikTok, the impact of data, sovereignty, hitting Congress with TikTok, a lot of things to discuss, actually the fall off from SVB. And of course, the ongoing awesomeness and mind blowing AI impact of what's happening with all this chat, GPT and every single company is getting funded with AI and AI has continued to blow people's minds. I've never seen anything like it in the history of my life where people are like literally impacted and freaking out about it in one hand, everyone's loving it. So let's get started. Episode five. How you doing? Good, John. How's it going, man? Just finished my breaking analysis. Looking forward to a little cube pod action. What's the breaking analysis this week? What's the topic? It's which companies are most exposed to the banking crisis. I got some new data from ETR. They sent me a pivot table. I've been like squinting through it. I get if we got time, I'd love to share with you who who's most exposed and a positive standpoint and a negative standpoint. Well, we're going to get into that under our third topic with SVB, the fallout to continues, the structural shit happening, all the game changing discussion around VCs, the pile on on VCs are so bunch of stuff on TV about this, but we'll get into it. But the top story, Dave, is TikTok, which we've been talking about at least three of our pods that I can remember, maybe all four previous ones. But TikTok was in front of our lawmakers testimony from the Congress, the CEO, Xiao Chu, who's ex Goldman Sachs guy, taking over bike, bike dances, TikTok, US thing. But he's out there, he got he got battled hard. And, you know, so it's very weird. I mean, you know, I had thought it was going to go off the rails at some point, but it pretty much was out of the gate. What was more compelling was the pre testimony posturing with TikTok. You saw them, you know, pushing a lot of narratives out there around kind of getting ready for the, you know, the China censorship, China control, data hacking, you know, the spyware that they put on all the, all the TikToks, all that speculation, but they had news like, oh, yeah, we're spending 1.5 billion to house all our US data on Oracle's clouds and servers. They asked their top creators to go public and support them. So clearly a ground game of prep on TikTok's part. And I think they're just trying to leverage the fact that it's such a huge popular app. They had one point we're putting out there saying the popularity is so big, we got 150 million active users. And Axios had an article said it's almost too big to kill. Kind of like sounds like the banks, but you know, they're saying it's, it's unkillable. While many in the US are fearful, people who know what's going on are fearful that TikTok and rightly so they should be fearful of spying on America and essentially providing the dumbest app on the planet for our kids and people. And that was the sentiment of most of the questioning. I mean, TikTok is a time waist sink. I mean, it's a waste. I mean, you can, you can literally get sucked into TikTok. And it happens on Instagram too, where you can just flip through reels for next, you know, two hours of dead. It killed, it killed hours. And they have an algorithm that they can tweak it. So once they get the dumb content, they feed it to you all day long. And it's just not productive. That's the argument. Well, I'm pissed off, Janek, and my daughter is like, she does huge following on TikToks. She'll get millions and millions of views. She's like, I love TikTok. I'm like, don't go on TikTok. I mean, you know, the thing here is, John, Congress can't agree on anything unless it's sort of this anti-China who's tougher on China. I am no, I am. Let's beat up TikTok. So that was, you know, front and center. You know, I personally, I'm not sure individuals are really at risk, but I'm more concerned about the aggregate data, because I think China could identify trends. It's, you know, they were spying on that bite dancers, spying on the journalists. So they could look at the big picture and inject unrest into society based on that data. And, you know, back to the, the lawmakers, the guy from North Carolina was named Hudson. He was asking Chu if TikTok uses Wi-Fi. I mean, it's like, really. Remember, Senator Stevens, the internet's a series of tubes, connected tubes. It really shows how dumb the lawmakers are with the one there. The line of questioning, it's almost embarrassing. And anyone watching anyone under the age of 30 has to look at these people and say, who elected these people? And it really is a disgrace. You know, I got to say, you know, we have a lot of lawmakers that have law degrees. We got to start pivoting over to tech degrees. And people actually know what the hell they were talking about. And I see, you know, Amazon getting a lot of pounding on their side. Tech companies are getting, you know, judged to the people who are judging, don't even know, check anything about the companies or the tech. So, you know, I think it's time that, you know, this next generation steps up and runs for office. You know, it's like, it's a kind of Kennedy moment. You know, ask not what you can do, because you can do for you. Join it. Join and be part of it. Because this is, this just jumped out at me. Big time. Again, I joke about the tubes comment from Stevens about the neutrality debate, but it was kind of on display again this week. You know, a real core issue. TikTok is a bad app for our country, because the Chinese are getting data from there and people in the know are knowing it's talking back and it's dumbing down of our people and it's got algorithms that support that. And that's well understood by people in the know. So the answer is simple. It's not a failing app. Like you said, your daughter uses it. She loves it because she's got millions of views. And so that's why she stays there and it gets a lot of traffic. So it's simple. Take the company public, spin it out, put it in the U.S. If it's Oracle or Amazon, who cares? Have someone overlook the code and make sure it's run, not run by the Chinese and they'll get paid. It's a very simple solution. She didn't have an answer. I didn't think for, you know, the bike dance was harvesting data to figure out what, you know, who spy on the journalists that were writing negative stories about them. I mean, that was sort of sketchy. You know, we'll get to whether or not TikTok should be, you know, shut down. I have some thoughts on that. I'm happy to see it get shut down personally. If they want to shut it down, shut it down. But they got to, if TikTok has a move here, they should make the move, sanitize it for the United States, make a shitload of cash, take it public. Everyone's happy. Close that door. If not, then there's going to be a lot of fud and then a lot of, you said, politicizing of this and posturing and making, taking it out of context, like all these politicians do to your early, early rant on the pod today. But I think that's not a rant. It's the fact. And they're going to continue to politicize it. And at some point, you're going to see Facebook, Twitter, Instagram, WhatsApp or new entrant get in there saying, hey, we'll be the new TikTok. But again, how are they going to get the scale? So I'd like to see competition. I actually would not like to see TikTok shut down, but I think they should do what maybe China would do, force the company to be owned by U.S., maybe, like you said, spin it out at least 51 percent to a U.S.-based entity that controls the board and the company. I would be OK with that, wouldn't you? I mean, I mean, I'm fine with that. I think I think the issue is the privacy side of it. And it's not like we have nail privacy in this country. I mean, you know, you know, it's like the we're not we're not a surveillance state like China. I mean, we have believe in freedom and liberty. And that that means that we don't want to be surveilled. Patriot Act, we kind of are, but, you know, I mean, I say, right? After this, it might be after us. Yeah, I mean, a lot of people in Europe had backlash with with cloud when, when, you know, the whole Snowden thing came out. But but I think, you know, Oracle is pretty, pretty reliable cloud. I mean, they do mission critical work. I mean, if they want to stick their neck out and certify, you know, compliance, I'm all for it. But I agree, it shouldn't be a China owned company. I mean, just no way. Well, I don't I think it's got to be addressed. And I think again, there's two issues to jump out. There's the threat to China, which is real. And then there's the embarrassment of our Congress, who needs to kind of wake up and get into the next generation. I mean, right now we have LLMs and chat bots emerging with AI. So much stuff's out there getting better and they're in the Stone Age is their question. I don't even know how to what tech is to huge. It's a huge embarrassment as far as I'm concerned. I think it's not something you know, even I found out when I was reporting on the Jedi contract when Microsoft was trying to get back in there. And Oracle was smearing Amazon. And when I was doing that investigative report, Dave, I was I invented a lot of law makers off the record. And the general consensus is a young batch of young talent coming up and they're looking at people who like did laws went for the Internet was around. They're still there. And then even some of the lawyers, they don't fully grok the impact of systems and thinking, network effects, data, data sovereignty, competitive advantage. I mean, these are concepts that now are have a technology bent to it. And so when you have a global landscape changing, you know, these are new new generation problems. Now, what do we do about privacy? What about this Chinese company that's kicking ass and like it's in the hands of pretty much every American under the age of 20. So that's an interesting policy question. What do you do? I like to see the competition. I mean, I to your point, there's you know, other companies, whether it's, you know, let's face it, Facebook is the obvious one to do this. And, you know, the smear campaign has been reported. You know, their mantra is not do you know, but hey, if you can't beat him in the market, you got to beat him, you know, somehow either with underhanded tactics or in the courts. And like, you know, like they said, if you're not cheating, you're not trying hard enough. Well, I don't think TikTok was successful in trying to look like the good guys here. So there'll be more of this. It's going to be a continuing top story. I mean, it's a pretty kind of weird environment. You got TikTok, Fiasco, you get the whole Twitter thing going on with Elon Musk. We've been covering the collapse of SVB Bank, which we'll get into. You have a lot of people online who are making a lot of noise about kind of new ways to do business, new ways to do government. So I think we're in this really interesting time and obviously it's recession. The interest rates just got hiked up 25 basis points. Earnings aren't looking good. More tech companies laying off, a century's laying off more stuff. You know, that's a huge issue. And, you know, in comes TikTok. And if you if you're a young if you're a young person, like your daughter, they're going to be like, what are you doing with TikTok? We love this app. So again, too big to kill, maybe too big to regulate. These are new new ground. So, you know, I think it's going to be a huge issue. Huge, huge issue. When they say too big to kill, you mean they just they're just so ubiquitous as like be like killing Bitcoin or because it's not too big to fail. It's not like systemic risk, right? It's just what I don't really get that too big to kill. I mean, I think it's a generational thing. You know, we're talking Brendan, our producer and the team here, but they're all on TikTok. They spend their lives on TikTok and the younger generation is literally 100 percent of behind it. It's not like the government has been doing great over the past, you know, eight years. Like, I don't think there's a lot of sentiment for the younger generation, thinking that we're the most, you know, optimized and most efficient government apparatus in the history of our situation here in the U.S. We mean, the opposite. It's been, you know, it's been a lot of, you know, a lot of fighting and civil unrest. So in comes the government saying, TikTok, we're going to kill it or ban it. Well, they all use it, right? So it's a generational gap. And this is what I've been saying for many years. There's a there's going to be a revolution in our country around the younger generation who are going to look at things like our lawmakers are saying, what a bunch of clowns clown car. Why aren't there smarter people running our government? And these are good questions and they should be asking those questions. Let me ask you a question, John, you know, right after SuperCloud, we did a chat GPT and the premise that I put forth with serve G and you were there was that open AI won't get first mover advantage. You kind of said, I kind of think they will. I've kind of flip flopping on that. So because I think they're gathering a lot of really valuable data and they're kicking ass right now. But but it's early. But do you think this TikTok have a first mover advantage? Because I mean, everybody could do this AI thing. But TikTok came out and they were feeding videos like no other social platform had done before. Do you think they have a sustainable first mover advantage? TikTok? Yeah. Well, I mean, they weren't the first mover. They were just the largest scale mover of the format. But they were the first to do like AI. And yet, yeah, the format. But not so much a format, but the way in which they would serve videos to you was was different versus, you know, hey, this is what your friends shared. It was more, you know, understanding what your interests are and then serve. And then the second thing they did, by the way, was as a creator, they would juice your video. So they would give you like the inject the cocaine injection. Oh, my God, I got this happened to my daughter. Oh, my God, I got like hundreds of thousands of millions of videos. I love TikTok. Yeah. And they would hook you and then they would tease you like the next one maybe wouldn't get as much. They make you work harder. It was like a gaming theory. It was it was brilliant. Yeah, that's called. That's what I mean by first mover. That's called crack. That's called drug drug injection. But that's what I mean by first mover advantage that they were the first to introduce that now everybody's doing that. Right. Well, you know, this came up with Facebook when they got criticized for being kind of like that viral, you know, growth hacking, they called it. That growth hacking was really kind of founded by the Facebook generation. TikTok perfected it and they perfected with mobile and they perfected with the short format. They had great tools for creators to do stupid stuff on their phone and add animation and other elements to their messaging and storytelling. And it got riveting for people and just spread like wildfire. So that one was the format was great to they had the growth hack of that all time with the algorithm and then just snowball from there, whether they're pumping fake views to make people think that their stars next influencer, you know, that could be going on too. You know, Tyler, my son, he had the big he had the big hit on TikTok. I remember he had song was the one behind the Vippy dance. I think they're real views. I think they're real views. They just promote it. Like, you remember how Justin TV used to promote the cube? Yeah. That's how we got started. Well, I think they're going to have an advantage. Like I said, they're too big to kill, but they could be, you know, managed. And that's why I think they they should just divest from bite dance, the parent company in China and have a US subsidiary that's independent and goes public, has board members, has servers in the US, there's some sovereignty there. And it's just game over. They make they make a lot of money, goes over to the coffers in China and they move on or the other choices to shut it down. Which, as we said, there'd be a revolt against it. It's kind of that would be a serious policy. Now, if the US could prove that lies were killed and that there was a Chinese, you know, kind of cyber war element of this, then they could shut it down immediately. Well, well, but how about like the brand name investors? KKR. You got Softbank in there, Sequoria, General Atlantic. I mean, it's like, wow, it's like a who's who. I mean, where are they on all this? They got to be lobbying hard to make sure that doesn't happen. So of course, what would you do? Yeah, you got you got the hottest app on the planet, the biggest numbers growing, still growing with good technology. The issue is transparency. I mean, they got you got the platform, they got the content providers, they got the traffic. They just got to get focused on the transparency and that's killing them right now. And then the fear mongers kick in and say, you know, it's China watching your every move. And so how much is that true? Probably not a lot of it, but I think there's definitely ties to China and I would I'm suspect of this being kind of a planted malware in our society, you know, and this is the new era of cyber and geopolitical. The world is flat. This is what it looked like. So so our government's got to step up and our people have to step up and either educate them and elect people in there that know what the hell they're talking about, because the people on TV who are spewing nonsense, they're all activists. There's no real, you know, authentic point of view here other than people taking sides against something. So I think it's a generational thing and that's I come back down to that's why I kind of focus on the tubes from Senator Stevens, because this was that moment for everyone from 18 to 30 who didn't see that clip or understand that's going on in the digital world right now. So this is a real force. You know, this is where one area where I think China has and it has a potential advantage in public policy, even though their public policy is onerous, is that you remember when Alibaba was going to spin out the ant and China just the Chinese government just shut it down. They didn't go and get permission from Congress. They didn't really debate. And they just shut it down. And so you to your point, the US is like, well, what do we do? And it all becomes politicized. Oh, no, I'm hardliner on China. No, I'm the harder liner on China without really an understanding of what should be done and how it should be done. That's really not what doesn't seem to me anyway, what the discussion should be. I think you and I could solve this, just like you said, spin it out, make it US based and be done with it and you get all these investors behind it. And that's it. Exactly. You figure out the commerce for this next generation. You got large scale, hyperscale clouds, you got the rise of AI and you're talking about AI and open AI. And when you asked the question to me about scale and first mover, and I said, I think it's a first mover advantage. We debated, you're kind of coming from that side, but still unknown. But I'll tell you this, Dave. I'll tell you this. What's interesting is, is that if you'd look at the premise of our discussion around can open AI and chat, EBT survived. I mean, they are innovating at rapid speeds, so you got to give them serious props on the execution. The thesis that we were putting on the table was, what's the cost to replicate? Is it inimitable? Can it be imitated? How fast? And our discussion was my point of view was scale drives the competitive advantage, the differentiation. Well, today, Databricks announced Dolly, which is a democratize the open model. So, so Databricks just launched a new way to train to give chat GPT like functions to follow. So, you know, Databricks, which you did a critical post on and challenged their future, just released this thing called Dolly, a cheap to build LLM that exhibits a surprising degree of instructions following the capabilities exhibited by chat GPT. Feed it data and you use this open source tool. So there it is. There are you starting to see more copycats coming out. And the question is, will it work? So if you check out Dolly from Databricks, you'll see all the coverage is check out the, let's see what the coverage looks like right now. I'll need this in real time. Of course, SiliconANGLE has it. We've been on top of it. Wall Street Journal. Essentially, everyone wants to be the chat GPT. In fact, the cube is coming out with QBAI, Dave, which is going to be our QGPT. And that's going to be spun out. And so we're going to do the same thing. So it's easy to get into the game. It's hard to master it. So that's my new updated position on chat GPT. I think you're going to see a lot of copycats. It's the question is, who can use the data at scale and who actually has the right data to make the AI work? And then the second thing is, is that can you keep growing it? And I think where people will fail is they won't know how to either provision the infrastructure to get it done and they won't know how to operate it. And they might not they might not use the data well. So I think OpenAI will continue to have an advantage. And then the macro condition will be whether the one large language model rule in the world, if that's the paradigm, they'll win everything. But I don't think that's going to be the case. It's going to be a large language model of the chat GPT and a series of foundational models. There'll be an ecosystem map. And we're already seeing thousands of startups hit the scene. Reuters is posting here today. The the the Sequoias of the world, everyone's pumping in and deals with AI. So as we as predicted here on the pod. Well, I'll say again, AWS turned the data center into an API in chat GPT created, turned the corner on the era of turning technology into human language interface. And we talked about this last week, Microsoft went from like being at the back of the pack from a tech perspective to number one, business model. I mean, like I said before, I kind of want to flip flop on my flip flop on my commentary that OpenAI won't have first mover advantage. I think I think right now it's it's their lead to lose. It's moving so fast in a history of tech generally favors disruptors. And this marriage with Microsoft is interesting. Is OpenAI to Microsoft? What DOS was the IBM? In other words, can OpenAI you know, do a reach around at some point? I don't know. What do you think? Well, it's it's funny. I think I think it's going to be a needle mover and a game changer at the same time for whoever can harness the technology. And one of the things that came up was is that Ken Ken is chat GPT a Google killer or an Amazon killer because if you think about with Microsoft involved with Azure, you know, Howie Shoe who's one of our people alumni is always on on on our show. We should bring him on for a pod to talk about this. Commented on the SuperCloud event we had that he thinks it's more like Amazon Web Services. He thinks that OpenAI and chat GPT will have more of an AWS effect and enabling effect not so much a monolithic application per se, which is interesting observation is contrarian to what was going on at the time. But if you look at the success of chat GPT from a consumer standpoint, clearly off the charts, the numbers are off the charts. It's a browser moment, iPhone moment. That's what people are saying. And we feel the same way. But the back end value that Microsoft's getting out of this is significant. So, you know, it's more that this is more of an infrastructure. And I talked to him this morning on text, I asked him what he thinks about the changes. He saw our article on Silicon Angle in your interview with Cisco J2 at to Patel Patel at Mobile Congress where he was talking about AI. Obviously, just how he used to be a big engineer at Cisco. He commented to me online just now and said, the OS application model is out and in is the LLM chatbot model. So the old days was operating system application. Now the new model is LLM foundation model and chatbot and AI app. And so if you think about that, that completely abstracts away the OS and the concept of software as an application. So, so always you said for a hundred million you get open AI. Remember, he said that at super cloud too. And then, you know, Andy Turai from constellation texted me or email me, I can't remember but he was saying that Stanford researchers replicated chat GPT for like, you know, $630 or something versus I think it was four or five million you know, for chat GPT to train the model. So his point is you can train these models for very inexpensively. Your point is, but you got to have scale. So that's scale is what matters. But this goes back to the original premise of that breaking analysis that we did which is it's not going to be that expensive to create competition. But again, I think Microsoft with the business model, you know, has an advantage. So it's a chat GPT but it's other AI and the other factor in all this is influence, right? So this week Trump was supposed to get arrested and it was a big meme all over the internet. Mid journey, which is an AI application for images. Very popular, very cool. V five is a version five sounds it's spectacular. Images can be doctored now. So in an amazing way that you can show things. So those pictures going on the internet where Trump was actually getting arrested they're all doctored all fake. So I started digging into it and mid journey has censorship problem. So they're omitting words. So for example, I discovered from a source and I'm not sure if this is reported. I know in Reddit they took the threads down off Reddit. Mid journey is an SF company, by the way. The China, certain China words are banned. Chairman Mao is banned on mid journey. You can search Trump, you can search all these guys but you can't search anyone from China, okay? They're banned and then the Reddit threads were deleted. Okay, so censorship on mid journey, okay? President Xi, censor prompts are gone. They're banning the words. The Reddit thread that you can find it on Google search if you type mid journeys, Chinese censorship it still shows up on Reddit. The thread is disabled. So there's a lot of shit going on behind the scenes with this whole TikTok, open AI and what is mid journey good for right now besides having great AI? Manipulation, misinformation. So the Trump thing was funny but people who aren't in the know could think that's real. Well, there's so much at stake. I mean, how many times have you been like texted from somebody on either the left or the right? Just see and you look into it and you're like, okay, this is like bullshit. You bother just fact checking? I mean, this is nonsense. Oh yeah, okay. Let's see, I'm getting a text from Brendan here about mid journey, it's still up there. No, there is a Reddit thread on there. Thanks Brendan, appreciate that. Yeah, I mean, it's interesting with the influence that the question is, is that, was that banned because they were forced they wanna make sure they get good market share in China from a user standpoint or is that banned because it's an influence? That's this whole what is real and what is censored is gonna be a big thing. I think there's gonna be kind of an arbiter coming out of this is gonna be new methods that are gonna be opportunities for entrepreneurs to say, hey, I'm gonna be the seal of content approval. FDA approved food, like this is some cube approved or something where people can say, hey, you know what, let the information flow but there needs to be some sort of vetting. How about they do that for congressional hearings? Like they put somebody who knows what the F they're talking about there and if somebody opens their mouth and asks a dumb question or doesn't understand anything they can just mute their mic or pull them off the stage. Well, I think that's a great point. I mean, the whole brings the point of the structural process of why even have Congress hearings in the first place? You do a virtual event with experts you make it public, you make it completely free you make it completely transparent live stream it you get the data then you bring it into the chambers and then it becomes a much more substantive group conversation why can't people participate? Why can't citizens participate virtually in the hearing? Why can't there be some collective intelligence or some sort of workflow? And there isn't, that's the problem with digital right now hasn't evolved yet to be truly group productivity and that's coming. I believe that's gonna be a huge area that no one sees coming. We'll see that. And you know why it's cause it eats minutes on the political agendas. It makes Congress a stage of parody basically it's like the tonight show it's like the daily show to me. It's like a joke. So I think that's very key but someone will build software that's gonna be kind of asynchronously made for people to participate and contribute to the conversation with substantive value not get buried below the noise. So, you know, I think it's gonna be a real movement for someone who can extract the signal from the noise constantly. And can he put that out there? Of course we do our part best we can but you know, someone with bigger cash billions at play that can build a media system that is inclusive that actually gets the truth. That's to me gonna be the kill and I think that's gonna where the younger generation is gonna come out of this. In fact that a hundred percent of the people behind TikTok is proof that the generations have to evolve. Well, let's get back to your too big to fail too popular to fail, right? I mean, it's just ubiquitous. It's like, you know, the government trying to kill crypto I gotta kill crypto. He just gonna miss out on the innovation but you're not gonna kill crypto. All right, well, let's get into the next block here Dave, let's get into the next discussion. The chat GPT has a rival barred and he saw the open news with Databricks. Honestly, we interviewed any scale which is a company out of Berkeley that provisions LLM infrastructure. The founders, the first time founder, Robert Nishimara, great guy I've interviewed him on theCUBE and you got Ali Goshi, Matai over there all the Databricks guys are all smart. Berkeley's got a ton of people coming out of there. Every school in computer science probably has correct people looking at this. AI is the hottest topic in the planet. And people are weirded out by it. I've never seen people on Facebook and all my social channels commenting in such a diverse, weird way. Some people are super excited. Some people are rabid fans. Some people are very concerned about privacy. Some are freaked out, don't know what to expect. Some people saying it's causing them anxiety. That's weird. I've never heard that before. Really, I mean more so than social media? Social media kind of snuck up on everybody. I mean social media wasn't like a shock to the system. This AIC is more like a shock to the system than Facebook. Facebook was a slow roll. Well, Facebook was like, wow, this is really cool. Only students can get it. Okay, I'll use my college ID and get in. Email and get in. Wow, this is really cool. Hey, high school reunion coming up. Let's see if we can find people. And all of a sudden, it's like... Well, and they also grew their tech. They had the graph databases. They got the Facebook connect. Amazing tech. Amazing tech. You can upload photos so fast that Facebook, it's just incredible. It's just... Well, Instagram, well, my point actually, the tech wasn't that good. There was a lot of fails in the area. So the growth wasn't there. But Instagram grew like a weed, right? So that was interesting, right? And that wasn't even part of Facebook until they bought it, but Instagram just grew like a weed. So, but that was not a shock to the system because it was photos. Yeah. I think AI is a mind-blowing shock to the brain. Like, holy shit. And there's stories out there like, if you're a lawyer or an accountant doing taxes, if you're a content person, that chat GPT puts you out of business. Hang on, you remember? Oh, go ahead, sorry. Well, that's the conversation. That's going on. That's one level. Then the other one is this is weird. Like, oh my God, like what's it mean to me? And so there's a lot of that happening. So you remember, you choose earlier when SBB was melting down, you were like, this is as bad, if not worse than the dot com. And you remember well, after the dot com, you had just moved out there. I had traveled out there, it was empty. And then it took till 2004, was the Google IPO was like a catalyst for tech coming back. And I don't know if it's going to last as long, but I do think there's an analogy here, a parallel in that AI, it could be that boosting that tailwind. Character AI raised $150 million as a billion dollar valuation. Everybody's AI washing and video is going through the roof. I did some analysis on that, which I think frankly looks overbought to me. But it's because of AI, right? UiPath had a great quarter and one would think, okay, hey, there's a concern that AI is going to affect RPA and automation, but UiPaths turn it into an advantage. They had a good quarter and they're saying, hey, we're all over AI. That I think props up the company. And so I think this AI could get a little bubble-ishous, to use a term that we like to throw around. But I think actually the market right now needs some sustained positivity and AI could be that. The other thing I'll just add is that I do think AI is going to have a productivity impact. I don't know when it's going to show up in the numbers, but AI will be deflationary. In my mind, it could hurt some jobs too, but I think generally tech is deflationary and AI is going to supercharge that. Yeah, I mean, I think a lot in that unpack, but I think your comment about the dot com bubble transition was an interesting point. And I think we're in that now and I would double down on my initial position on this and say, but I think even more, it's a bigger factor. I think it's a combination of the dot com bubble, okay, and the 2008 multiply by a hundred. Okay, in terms of impact. I'll tell you why. When the dot com bubble hit, and there's a lot of conversations, but specifically on my point is, is that it really was the internet turned into the web and the web got bubbled up, as you said, and then burst. During that bursting period, people realized that the online population of people using the internet was growing. So there's still a statistic or KPI called online user. Okay, and the numbers were growing because the connectivity started also increasing speed wise and you had music going online. So you had the generational shift of the web truly yielding the value of the worldwide web. And then you had that bubble period bursting, which caused the nuclear winter as we call it in Silicon Valley. And then that fertilized the next crop of movement. That was the web 2.0. That was different user interfaces, age access to the world. You had social networks emerging, podcasting. I did that venture. You had all kinds of rethinking, blogging emerged. You sort of have this kind of sharing culture. That was the beginning of this democratization and then incomes mobile with the iPhone in 2007. So between 2002 and 2007, you got wireless. I mean, there was a time where you couldn't get 5G or any G. He was simply phones and text messages. And I remember when Wi-Fi came out, we were driving down the freeway doing the first ever Wi-Fi thing on the freeway. We were like blown away and we're looking at packets move on the command prompt. So there was no Wi-Fi back then, right? Even cellular had no speed. That changed everything, okay? And then incomes mobile phone and then you got the mobile revolution. Fast forward today. Yeah, you got some advances. You got crypto, the crypto bros are still out there pushed out, which I'm bullish on still. But this AI thing is gonna be, I think this is where this bubble bursts. So we're gonna be in a recession. It's gonna burst. It's gonna be tons of layoffs. That's the fertilizer, that nuclear winter that's happening now is the fertilizer for that next level. And I think if you look at the success right now, this AI trend is changing the application model as I pointed out from how we choose common iOS to app to LLM to chat bot. That's a paradigm shift. The successful companies that are AI first and or cloud native are accelerating faster. I know are more agile. And I think you're starting to see proof points that those winning hands are the talent, the formation, how they're organized is all changing. That is structural. And I think that's gonna be a major inflection point and everyone's gonna be on either one side of the street or the other, the loser side and the winning side. And the winning side is AI, new coding, new capabilities, cloud native, open source, new applications. So that's what's happening. So all the people who are like pre AI are pretty much dead in charge, I'm concerned. If they don't retrofit their business or refactor, then they're done. And I always like to quote, money ball, Dave. And there's a scene in money ball where Billy Bean is that talking to the Red Sox owner and Brad Pitt and the owner says, the first guys through the wall are bloody. But if every company's not rebuilding their business and their ball team's based on your model, the money ball model, they're gonna be extinct. Couple of years later, the Red Sox win the World Series because they adopted it. So that is kind of what's happening now. People are looking at it going, I gotta refactor my business with AI. If not, they're gonna be dinosaurs. So that is to me like absolutely happening. But so to take your money ball analogy, which is a good one, what the Red Sox did is they applied money ball for the upper tier players. Because what happened with the Oakland A's is it worked great during the regular season, but it failed them in the playoffs because they didn't have a Derek Jeter. And Derek Jeter made like an unbelievable play and then went on and well, Oakland just watched. So Red Sox applied that, but they spent money on it. And what you're saying is really interesting. I would describe it like this from 1996 to 2000, the hype was the potential of Metcalf's law, but you didn't have the scale economies, which is like, which is why pets.com, for instance, failed. They didn't have the scale. They had a billion dollar valuation, but now you got Chewie, very successful. It's got a $14 billion valuation. Basically the same idea. So you've got Metcalf's law in place. You've got the cloud. You've got all this technology. You've got security, which is sort of a two-edged sword here, so I guess my thinking, John, is that the cycle's going to be accelerated or yeah, the cycle's going to be compressed, but the big wild card to me is the era of free money. We've lived in a decade of basically zero interest rates and quantitative easing, and that's ending, I think. Again, it's the nuclear winter. It's happening. So I mean, this is what we're buckering down for, but in every nuclear winter, okay, there's always a massive slingshot, seesaw, whatever you're going to call it, you call it seesaw. There's going to be a slingshot of exceptional startups, exceptional different stuff coming, building on the existing. So I'm watching. I think it's going to be a good thing. So again, by the way, you mentioned Bob Metcalf. He's a living legend. You've known him for a long time. He just got awarded the Turing Award, highest honor in computer science. He invented Ethernet for the folks who don't know Bob Metcalf is, which is the foundation of all today's computer networks. The competing network protocol was token ring IBM had, which was two megabits per second. Bob invented 10 megabits per second, which became the thesis of everything that we have on the planet today for networking. So. Amazing guy. I remember he used to predict the internet was going to crash and it was his way. It was his call to arms for the industry to get it shipped together. And he actually did, you know, by those prognostications, which didn't come true really. I think he did the industry a lot of good, but to your back to your money ball analogy, you know, the Red Sox it worked, but then everybody sort of copied that. It was kind of an open system. And then you saw some of these, you know, small market teams, you know, Tampa, for instance, were able to win. So I guess my question back to you is, you know, who's going to win this big race? Is it going to be these new disruptors that you're talking about? I mean, history would suggest the history of tech suggests that the dominant players almost always get disrupted. But. Yeah. I mean, you look at Microsoft. I remember when their stock was in their 20s when Balmer was still there. They they have an opportunity to be that apple like thing because Apple member of the Apple turnaround didn't just happen with the iPod and the iPhone. They had already cleaned up the Mac side when jobs took over. So I think, you know, Microsoft could be that next generational player. They're going to win because they have a good early run with Azure and that's a threat to AWS. And we'll see how they respond. I said that before Amazon has an opportunity because they have chops in AI. Will they make the right moves? That's going to be a big watch there. Can Amazon make it? Yeah. The Amazon business, it's a wholly different animal. Is I mean, the cloud business we know well, love the cloud business. I mean, I'm not as optimistic about the retail business because it's never really made that much money of any money. And it's got this disruption scenarios to Amazon's retail business. They have all these warehouses. And I think what if AI makes it really easy to eliminate the need for warehouses where you could ship directly from like Alibaba does, ship directly from there. Well, online retail or physical retail, I mean, because I think physical retail is going to be a boom because I think people are going to want to be face to face. And if you look at the blowback from the pandemic, I think shopping will be online for efficiency, but people will have experience based shopping physically. I think that's going to be. Another disruption scenario for Amazon. But of course they can pivot to physical. They could own all the physical. Well, but Walmart does already. I mean, look at Walmart, right? And so. You put an outpost in every retail outlet with an automatic provisioning system like they have now with cloud. Grab and go. I mean, this is where, this is where Jassy's big challenge is. I mean, let's say this government issues, et cetera. Somebody on Twitter, I was arguing the other day. They're like, ah, Jenny Jassy, horrible CEO. We should go. I saw that. Are you kidding me? Are you out of your mind? I mean, this guy is like the CEO of the decade. Yeah. You know, he inherited this kind of a mess. I mean, Bezos left right at the right time. The question with Jassy is, is definitely he's a great CEO. First of all, that's the fact that anyone would say that they don't know what they're talking about. They were just talking about some earnings that are the layoffs that happened. Look, they got too big. Like everyone else, they laid off another 9,000 people. That sucks. And that's bad. But the thing is, is that I think Amazon's got so much going on. Jassy's challenges. How does he duplicate himself? Cause he's been very hands on. He likes to get in the weeds on everything. If he has to find a management team that's going to operate that large, large company that it is. And it's like, can you imagine being the CEO of Amazon? Okay. There's nothing going on every day that's a fire alarm. Every day. You wake up. There's no day that you're going to get rest. Every day. Government, unions. It's some fire. A barn fire. It's not like a little small little fucking match. It's like huge. We're getting sued by the European Union. Or whatever. Some stuff's happening. Unions are forming all over. It's hard. But, all right. Well, let's get into the next segment. Let's take a break and come back. We've got a word here about our RSA plug. Let's get that in. Let's come back from the break and we'll dig into the bank fallout. Let's talk about the entrepreneurial landscape at Dave and some of the tech trends we're seeing in the enterprise and emerging tech will be right back after the short break. Hello, we're on from April 24th to April 27th. The Global Cybersecurity Community will gather at RSA Conference 2023. On the agenda is arming you with the best practices to keep your organization secure and safe. Experience the countless opportunities to make valuable connections that can open up new doors. Access cybersecurity's biggest innovations and cutting edge ideas during the four days of sessions, keynotes, skill-building experiences and more. Don't miss the chance to be stronger together. Visit rsaconference.com slash theCUBE 23 to learn more and register and tell them John and Dave sent you rsaconference.com slash theCUBE 23. Okay, we're back, Dave. So we just beat the dead horse on TikTok AI which we'll continue to do. It's the hottest area. Edge is hot. I love the edge right now. I think that the supercomputing show, Mobile World Congress that we've been going to point to two tell signs in the next 24 months in the convergence of hardware, silicon, compute, gear and software in the cloud are kind of come together. You know, you see the telco AI, telco's configuring it. It's just, it's so obvious to me, Dave. But to me too. I mean, we've been talking about this for quite some time now. Honestly, David Fleuer is the one who shook me up and turned me on to it quite a number of years ago. AI inferencing at the edge. Most AI today is model-building in the cloud and it's going to flip. Most of it's going to be real-time inferencing at the edge, no humans involved, machines making decisions. You know, you'll send data back to the cloud, but you're going to have millions and millions of data points. And as George Gilbert and I talked about this on a breaking analysis, and it's just going to completely disrupt the existing technology landscape from the, from the entire stack. Semiconductors, you know, edge devices, the whole software stack and then all through the data analytics piece of it, new applications, I mean, it's just, it's going to blow away the economics, the business models, the speed, the amount of data, the velocity of that data. Everything's going to change. I think it's, it's exactly right. I mean, look at the success of the big companies right now. And in fact, I'm looking at a tweet right now and I want to get your thoughts on it. It's from Brian Halligan from former HubSpot co-founder. Yeah. He compares the top 10 tech companies in the Bay Area, Silicon Valley area to Boston. And the top company's Apple, $2,500 billion value. Number one is HubSpot, $19 billion in value. Yeah, so two trillion versus. So the number 10, the number 10 on the list is Palo Alto Networks for $57 billion and number 10 on Boston is CarGurus, $2 billion. So you got Apple, Google, Meta, Oracle, Cisco, Salesforce, Adobe into its service now, Palo Alto in the top 10. And Boston, you got HubSpot, PTC, Paramount Technologies, Akamai, Toast, DraftKings, Pega, Wayfair, TripAdvisor, Rapid7, CarGurus. Hey, if I got constant contact. They're not in there. I'm kidding. I mean, it's like, this is the East Coast, you know, best of. So someone says, the Bay Area was founded by gold rushers and the Boston was founded by Puritans. So Dave, what's going on over there? Well, you know, John Chambers said at that, when you interviewed John Chambers at his Palo Alto home, he said, look, John Chambers worked, John Chambers, Joe Tucci, they worked at Wang, young people that saw him, even the old people don't remember. Wang, Digital Equipment Corp was the hottest company in the planet. Certainly IBM was the, was everything, but DEC, Wang, Prime, DG, Apollo. I mean, these were the hottest companies going and John Chambers said it to you. He's like, look, there's no guarantee. And the East Coast, 128, sort of thought it had a right of passage. It didn't and Silicon Valley just blew it away. And then, you know, East Coast never really recovered. I mean, it's still competitive, but it really pivoted to sort of biotech. I mean, I think Austin, New York City is, I would put New York City ahead of, you know, Boston in terms of innovation. Austin is growing like crazy. I mean, even Southern California, you could argue is more competitive. I mean, Boston's still there, but said it's... I think it's a risk take. I mean, to me, and I obviously grew up in that area. So I just say to me it's risk taking. I mean, Boston had it going up for a while there, but they got cocky and it's just slower. It's more diversified, less concentrated in tech. I think Cambridge has got a hot area going on there. Obviously, we know the MIT area, Northeastern, you got the schools there. I'm surprised that there's not more action in Boston. I mean, I know that the seaport's growing, but I don't think there's any kind of like real capital markets there that are at risk taking. Has there been a lot of exits where there's a lot of angels there? Non-competes too, John. There's still non-competes in the East Coast. That's gonna be right there. And they're enforced. I think they're gonna go away. I think that's definitely a factor. I mean, look at Facebook was started in Cambridge, Mass, right? What would have happened to Facebook if it didn't move to California? They wouldn't have got funded. Yeah, they wouldn't have hit that escape velocity. Charles Zazewski from Cloudera, former Cloudera, he's got his own company now. He met to Halogen at MIT in 2003, wanted to build his career in Boston. He moves after two years, he moves to San Francisco. I mean, that's basically, it's like, if you're a professional player, you go where the professionals are, right? And that's the Bay Area. But I mean, EMC was an incredibly successful company. You know, it eclipsed the size of digital, which was huge back in the day, but you couldn't spin out companies out of EMC. Remember when Donatelli tried to leave EMC or he did leave EMC, went to HP? What happened? EMC sued him because he had a non-compete. So he couldn't work in storage for a full year. And so his hands were tied. So he moved to California and, you know. I'm gonna post this thread on the show notes and I'll send it to you, Dave. Some people we all know on here. Chris Ye has a comment. I've known Chris for his fellow also guy. He's gonna get your reaction to this. He says, Boston reveres the past. The pilgrims, Harvard, Celtic socks, Paul Revere. The Bay Area only cares about the future. 97% of entrepreneurs here don't even know what Netscape was. Well, that's kind of true, actually. I mean, I hate to have to be in the position of, I mean, look, there's still a great place, you know, New England's great place to live. There's still a very vibrant economy. It's beautiful, you know, despite the weather back and forth. But, and there's, you know, there's good capital markets here. It's just, it's just, you go to Silicon Valley. I've been there a thousand times. You live there. It's just a different vibe. Everybody's, it's like being in LA with everybody's got a screenplay. In Silicon Valley, everybody's got a business plan. And it's just not the way here, you know. Here the mindset is, okay, how do I get a good job making decent bank? You know, how do I make two, 300 grand a year? You know, get a nice house. Have a family. Have a family, move outside of the 128 belt, maybe, or maybe I can afford to move it, whatever. Bank, grow my 401K and, you know, retire reasonably comfortable. Silicon Valley's totally different. It's like, all right, how do we create a rocket ship? How do we take a risk? Let's quit our jobs. Let's start a company. I mean, that's, you know, it's totally everybody, right? Well, it's not everybody, but the thing is it is more risk-taking. But I think you're right about the whole LA Hollywood thing. I always said that, you know, being an entrepreneur and moving out here, I've been that person. And when you don't have a business plan that's getting funded, you're essentially the equivalent of, in Hollywood, if you don't have a film, you're bartending. You're trying to make your next gig. You act. I'm bartending, I'm working parties. You gotta pay the bills. And so Hollywood has that dynamic. I'm an actor, I'm bartending. I'm not yet in the big time. Here in Silicon Valley, the equivalent bartending is called consulting. I got a consulting gig. So when you're not building your consulting, that's like the bartender role. You know, you got to make some cash. You do some consulting until you get that funding. And not a lot of people hit that. A lot of churn to it. A lot of churn in Silicon Valley as well, too. And of course, I didn't mention Seattle. I mean, you got Microsoft, you got Amazon, you know, obviously Starbucks. But I mean, you got to put that right up there. I mean, in the DNA up in the Northwest, I mean, it's kind of interesting that those two companies that are so massive are not Silicon Valley, but people kind of consider them Silicon Valley extended, right, Microsoft? I think, you know, we'll talk about this in another pod. We'll put this for next week, but let's put this on the pod for next week and we'll dig into this. I believe, and we've talked about this day privately, we'll share it publicly. There's going to be hub and spoke model around entrepreneurship. You're starting to see Silicon Valley kind of getting syndicated in the sense of the form that's pre-identified. Good universities, good talent, good economic, good angels and VCs, risk taking, culture, vibe. You'll start to see a hub and spoke. And I think the digital connected points is going to be interesting with virtual hybrid. You're going to start to see points of presence of entrepreneurship hubs connected. So an entrepreneur can be anywhere in the world and still get the benefits of Silicon Valley through their network. So I think you're going to start to see new networks emerge. And I think you're going to start to see a different landscape over the next 10 years, especially as this AI movement goes on with virtual companies being more prevalent. You'll see hubs of entrepreneurship. And it's going to be connected. So that backbone, I think it's going to be the cube, the cube global, what we want to do, you'll see us have new cubes everywhere. And that's going to be something we're going to do. I think it started early days. The crypto was a real signal there. And when you and I were on the crypto circuit, we met a lot of people who were like, literally gave up their US citizenship, moved out of the country. They said, we don't need, I don't need a US citizenship, right? And I don't want the US government, coming after my crypto, crypto multi-millionaires that said, I'm out of here. They all moved to Puerto Rico because there's no taxes. But guess what? All of a sudden, oh, Miami's a hotbed. I wonder why it's only a short boat ride from Puerto Rico to Miami. So a lot of people moved to other places in Eastern Europe. And so, you're right. I had an entrepreneur tell me that Miami is a complete over-hyped environment. It's not even close to being what they're billing it to be. I haven't been, I haven't checked it out yet. So I'm gonna hold my judgment, but the scuttlebud is Miami, not happening. Good weather and a lot of wealthy people move there because there's no state taxes. I mean, that's, you know, but... Well, Austin's got no state taxes, but that's booming. All right, Dave, we got a couple of minutes left here. Let's get into some of the rants. And what you're looking at, honestly, we got SBB debacle continuing. You're seeing the tech companies laying off a ton of people, Amazon, 9,000 more. The censure is just announced, 12,000 people are gone. More stars being funded in chat GPT than ever before. Younger, smarter, system-oriented. Landscape's changing. What's your ranch? Or a take on all this? You know, the irony of SBB is that what killed them essentially was the ability to do mobile banking. You could take money out instantly. And they were this close to actually getting a lifeline, but everybody on the East Coast went home. And the West Coast was too slow. And so the mobile banking, you know, the users, the depositors could move money out faster than SBB could bring it in. And so, you know, it all, to me, it all comes back to the Fed. Fed has a really hard job, but they have become the sole arbiter of economic activity. And I guess my rant is because Congress is useless and they can't legislate because they got the far left and the far right. And it's like galactic stupidity and it's bad for the country. They don't put country first. That's all a bunch of BS. And they can't get legislation done. So as a result, the Fed is like the only lever when they can use their, whether it's quantitative easing or now they're raising interest rates and they're tightening or they're injecting liquidity into the system by basically giving at-par loans to these banks that are failing. And the reality is, and you look back, you and I met in 2010 and that was the start of the greatest bull market, you know, boom in my lifetime. And by 2012, the markets, the Fed should have been able to step back and said, okay, markets, you can operate. But the Fed, which is supposed to be an independent entity, they've cowed down to presidents, hedge fund managers, bank CEOs, other big money interests and wealth gap is widening. And that's bad for the working class. It's bad for the economy. And I think it's bad for the country. And the problem is we're now drowning in debt. You know, I mean, the unfunded debt is going to approach 100 trillion this year. And now we've wasted a great opportunity and that's a shame. But I think the answer is staring us in the face. And I think that answer is, we've got to have better fiscal discipline. You're going to raise taxes a little bit, not so much that it kills the economy. And you got to adjust defense spending, you got to figure out Medicare and Social Security, hit the wealthy, they can afford it. And you got to get back to a stable economy where your debt is not 120% of GDP. Yeah, I totally agree. I think we're in trouble. My rant, not so much as on point on the Fed there, but I do agree with you. I think to me this week, my rant is points to the dots connecting around TikTok, our previous conversation about national security, this next generation upon us, our government. And I think my rant is all that you said, and I would add that it just seems like it's broken. The government's broken. And this next generation, technology, transparency, has to put in play. And I think the weaponization of our system through incompetence and just malpractice, you can't have courts doing things on behalf of activists, you can't have spying. If the rules have changed in warfare or geopolitical, they got to be reset. I think we're feeling that right now. So my rant is people should need to wake up, not a conspiracy theory way, but more in a common sense way, like, hey, if everyone's using TikTok in the US and they like it, we'll fix it or kill it. You can't just kill it, right? So that's easy. And then the government, the questioning points out this whole generational shift. So my rant is the generations have to step up and make changes and force change and figure that out. And that's, I think some sort of revolution in our system that helps people live in a free country and have commerce that's profitable for businesses. And everything's connected. The banking thing, that's the whole nother wall game. We'll continue to watch that. And again, my rant is the startups are coming on board, like we predicted. So if the game is changing, the nuclear winter's in place, it's happening. What comes out of this? What's the fertilizer? Every downturn is like fertilizer for the next spring, uprising of startups and innovation. What will change? That's the question. That's my rant. Yeah, John, I mean, great points and perspectives as always, I love these, these cube pods. I mean, it's, you know, we have so much to share. We have such a great community and so many, you know, kind of inbound data points. It's a pleasure to be here. The digital world, Dave. Digital world. That's our pod five. We've got a bunch of events coming up. I'm gonna be going to KubeCon in Amsterdam. I'll be there. You're going to Vegas for an event. We've got RSA coming up. We've got the security show. A lot of things happening. A lot of things going on in our world right now. And I think, again, it's gonna be interesting to see how the tech world survives and will it be a tailwind? The definitely, I'm excited about how video is continuing to boom, is growing. I'm excited to see that people are waking up to organic, transparent conversations, you know, not just paid media. I think media is learning that the game's changed, seeing good startups getting funded from in media that are AI oriented. So yeah, I'm bullish on that. So we'll pick that up at the time. Me too. I think it's gonna, eventually it's gonna be a productivity boom and it's gonna be directly related to automation and AI. I don't know, I can't predict when, but I think it's gonna show up in the numbers certainly within this decade. Well, one thing we'll talk about next week is that the whole world is going super cloud and super apps, Dave. That's happening. And ChatGPT is a super app. Everyone's afraid of it. No question. All right, that's our pod. Thanks for listening. And again, give us feedback on Twitter. We're gonna start bringing guests in from our CUBE alumni network to bring in some color commentary. Try to get some more structure on the topics right now. We're just gonna break down three or four areas and just riff and share what's on our mind. And again, if you have any ideas for guests, let us know. I'm Matt Furrier on Twitter, LinkedIn, WhatsApp. All channels are open. Dave's Dave Vellante. Thanks for listening and reach out to us. Thank you.