 Okay, everyone, welcome back to theCUBE Pod. Episode 11, Dave, we got a lot of stuff going on. I'm actually in Vancouver with a great view on Office this week at Open Source Summit, Linux Foundation. So, weekly pod where we go through all the news that we're looking at this week, what we're going on. We've been kind of split up, Dave. I've been on the road. You've been in Boston. A lot of action on SiliconANGLE and theCUBE and all around the internet. A lot of stuff happening. The big news actually dropping today is the new Twitter CEO, Elon Musk. He's going to focus, be the chairman, focus on product. Hired Linda Jacarino from NBC Universal. In other Twitter news, Tucker Coles was trying to get out of his contract and launch a show on Twitter. That was announced. And just a lot of action, Elon tweeted and confirmed the hiring of the CEO. And a lot of other stuff. Miami crypto scene is waning. Crypto in general is waning for AI, obviously. Enterprise news, Mike Lynch got extradited. He's the former CEO of autonomy that HP bought for billions and billions of dollars. Turned to be a scam. Actually put HP in the sideways spin. Caused them to spin out the two companies. And other news, nuclear news. Microsoft will have a nuclear powered cloud Azure signs up as a customer for helium fusion. More AI news. Google had their IO conference which was their developer conference. They're standing tall, peacocking with AI. Showing a bunch of stuff. VCs are traveling to the Middle East to try to get some cash. Lina Kahn's at it again. McKinsey was mentioned in an AI store in New York which is total fabrication. Just so much going on, Dave. The wave of AI is awesome. Great to see you. Hey John, good show this week. The set you were at looked beautiful in Vancouver. Really glad you guys did that show. Awesome editorial. What's the, give us the bumper sticker for up here. I know we get a peek. Can we turn that camera around and take a peek out the window there and see what our view is? We're at the convention center in Vancouver. Weather's been phenomenal. Planes are landing. Cruise ships are going to Alaska. Looks pretty amazing. And just, we're hanging out. And I think, you know, we got to see Alice Williams over there from the new stack. A lot of people here. But this is a small event. It's all the inner circle of the Linux Foundation. KubeCon's the massive event. CloudNativeCon. This is about the future of AI. All the top people are gathering. And they're going to figure out where the Linux Foundation goes. I talked to Jim Zemlin, the CEO. The foundation's growing like crazy. KubeCon's phenomenal. CloudNative's growing like itself. How many people were there? Not only a few thousand. Not many. Again, but they're all players. The most important people were here. And so it was really more of about the best of the best in the Linux Foundation in open source. They have a lot of micro events. That's the key to this event. Not a lot of fanfare and marketing. Not a lot of press. But a lot of inside the ropes, Dave. This is where things get discussed. Like which projects are going to be doubling down on. How to deal with the change in power dynamics and open source. Open source, obviously, as you know, has taken over the computer software industry. It's now open standards. And continues to thunder away at growth. And with AI, we're predicting a massive tornado here that will shake and rattle open source structure. How they organized. The leadership. People equation. We're going to see this tornado of AI. It might topple generations of work. That's a plausible scenario. If the open source community isn't strong enough to get inside the tornado. You know that famous book by Jeffrey Moore. Inside the tornado. That's got to get inside that tornado. Otherwise, if you're not, you get spun out and just thrown around like a car and a house. We saw IBM, which is really, you know, obviously a global system integrator. One of the top ones. I mean, IBM in many ways is a consultancy. But they, I think it was this week. They said, it might have been last week. They said they think they can save 7,300 jobs with AI. Replace or save or basically through attrition. Now, they said AI. They didn't say Watson. I don't know if you noticed that. They said AI. Then they announced WatsonX this week at IBM Think. I mean, that was the worst decision IBM has made in a very, very long time. Calling their AI Watson is a mistake. Watson, as we've been covering, we had a lot of fanfare. They had the chess match and essentially didn't really make it. They overpromised it. It falls under the category of the Osborn effect. That's what Charles Fitzgerald, our friend, Fitsie, calls it. Osborn effect was obviously overhyping a product. The Osborn computer, if you remember back in the day, Dave. So IBM Watson is probably their biggest public failure of overpromising and underdelivering. So 2011. And it's just, why would they do that? WatsonX. 2011, so just people don't know. Actually, it was probably around 2007 that, I think it was 2007. Maybe it was earlier than that. IBM's blue gene or super computer blue gene or whatever they called it. Beat Gary Kasper off a chess. And then in 2011, IBM's super computer beat Ken Jennings at Jeopardy. It was an amazing moment. Basically, Jeopardy won Ken Jennings. It was humbled. Ken Jennings was awesome. By the way, he's a cute alumni, yeah. I know, he was clapping, bowing down. I'm not worthy kind of thing. And at the time, I remember thinking, wow, IBM is going to run the table on this. And then they marketed the hell out of Watson. And then it just became this really complicated thing that drove a lot of services for a while and a lot of failures. And then they got left in the dust. I don't know why they would. You know, I wonder what would happen with Watson if Bob Pitchiano was still in charge there. Yeah, it was so long. Bob Pitchiano's a rock star, but I mean, I don't know why Watson, other than the fact that, you know, Thomas Watson, obviously great, but boy, relating that to AI, that just seems like a marketing fail. Bob Pitchiano was, you know, but the problem with Bob is, you know, he was definitely a technical, you know, leader. But, you know, I think he just didn't play the game well enough. You got to play the game at IBM to get promoted to the top. And Ginny played it very well. He just didn't play her hand well as a CEO. She just took the San Palmosano playbook and repeated it. Well, let's get into IBM, and we get into the enterprise section because there's a lot to talk about that. IBM think that happened. And, you know, we decided not to go this year. We went to, we went up to here up in the Opus of Summit, a lot of action. Again, not really newsy, but a lot of movement. What's going on here at Opus of Summit, we'll change the game. We'll talk about that later. But I want to get into the top-level news because Elon Musk is back on the roster. That is, he named a new CEO. He's been talking about this for a while, put out a tweet yesterday saying, it's a woman, she's going to take over. And, of course, the press went crazy. Wall Street Journal broke the story first. Linda Yaccarino with NBCUniversal is going to be the CEO. Elon is going to be the executive chairman and focus on product development. He just tweeted this morning the following tweet. He said, I am excited to welcome Linda Yaccarino as the new CEO of Twitter. Linda will be focused primarily on business operations while I focus on product design and new technology, blah, blah, blah. Bottom line is, Twitter blue was a failure and Twitter blue was his plans to monetize Twitter. Because that was a failure, he then lost all the advertisers, all the advertisers basically were boycotting it and he lost hundreds of millions of dollars. So bringing her back, media, business, that's a good sign. I think it's a good call. Yes, Elon. She can't screw it up worse than he did. Well, he's a product guy, he loves the technology. Get him in the product weeds, go. Get someone to run, keep the hand on the wheel and maybe they can make good business decisions because frankly, Elon was fucking things up. The API was a disaster. The advertising was a disaster. The blue could have been handled much differently. Just, he's just got to get out of the kitchen. On the business side, pretty straightforward. Get the advertisers back. And then, well, you think Tucker Carlson is going to help get advertisers back? I mean, they were leaving in droves from Fox. Isn't that really ultimately why he got fired? And they used the excuse. Well, I heard. It's not like suddenly he made these derogatory statements, right? I mean, it's, they don't know for a while. I heard people say to me privately, I'm off Twitter now that Tucker's there. And the signal, it's a right wing signal. And so there's so much anti-Trump and Trump just had his town hall meeting yesterday and CNN and people went ballistic. They called for CNN boycotting. I saw just rants online about this and Trump's out there doing the same old thing. And he's got, you know, and CNNs was taking a lot of hits. And Anderson Cooper went on TV and said, we got to show this. So, you know, you have this vibe where Twitter could be this right wing. This is what people are painting Twitter to be. Right wing. When I think Elon and folks are just trying to make it free speech. And everyone's saying, hey, that's bullshit. It's just free speech. It's really a right wing place. Come on. People are so weird. I mean, I watched Tucker Carlson. I'll watch it and I'll yell at him like, you're an idiot. But I actually listened to him. I mean, I mean, sometimes he's an idiot. Sometimes he says things that I say. He's a performer, Dave. We'll see how he does. If he brings this Fox News show there, then it's going to be definitely right wing. My point is I would never not go on a platform because he's on it. Now, if it were all, you know, right wing propaganda, yeah, I probably wouldn't pay attention to it, but you know, I think there's a mix of content on Twitter. I mean, it'd be a shame if it becomes, you know, this right wing cesspool. I would like to see some balance in the news. I mean, you can't get balanced news anymore. You got to flip channels and it's just, it's all one-sided. Yeah, well, I think it's not bad personally. Why would you not grab them? He's massive brand recognition. The question is, will he behave differently under full clean sheet of paper, not under the loaded gun to his head at Fox News, which clearly has an agenda to give the people what they want, which is feed the right wing. I mean, it is. You think about it. You think about it, Charles. He might be liberated. But you think about these prominent, you know, folks that have left, you look at Bill O'Reilly, you know, you never hear from him anymore. You know, we'll see if Tucker Carlson can make it. You see this sometimes like in sports radio, like big names get fired even locally. And then, you know, they say, we're going to come back online. And they never do, right? I mean, what about, what's her name? Megan, Megan Kelly. Megan Kelly, yeah. Okay, you know, she's made some big, nobody pays attention to her anymore. I shouldn't say that. She probably has a big following. But, I mean- They all have subscription, little niche, sub-stack-like deals. Right. Not sub-stack-like deals. My point is, my point is that Fox had such a presence that these people, their ascendancy, coincided with as a result of Fox. And now, you just don't hear much from them. Or, you know, you see them groping around. But so, I don't know. I think it's actually a really interesting move. I think it's a smart move by Tucker Carlson, because Twitter is his global platform. And it'd be a shame if people just leave because he's on it. I would like to see a point counterpoint. Bring Anderson Cooper on Twitter as well. Don Lemon. He's available. Don Lemon is the right example of Anderson Cooper. Don Lemon would be the perfect example. Get Lemon and Tucker going at it. You know, Bill Maher. Bring him on. Love to see it. Bring smart people debating. That's right. I agree. I mean, I think- Look, I'm going to let the social experiment. I love Twitter. I've always loved Twitter. So, I'm a loyal Twitter user in a sense, because it's just become happy for me. Me too. A lot of people aren't on Twitter. I mean, I like Elon, what he's doing. I like the balls he has. I like the fact that he's putting it out there. He is weird, but that's who he is. He doesn't hide it, you know? And I thought his Bill Maher interview was pretty phenomenal. And Bill Maher was giving them props. At least you're building stuff. Kind of sub-gesture against Zuckerberg. So, a lot going on. You know, we saw a lot of AI action and there's news here about Miami crypto scene is waning. Wall Street Journal had an article. Dave, I don't know if you saw this. Yeah, I did. Well, so, yeah, because Mayor of Miami, last year was claiming Miami is the crypto capital of the world. Now everybody's like, the conference this year isn't nearly as well attended. You know, it's interesting. I mean, the wild card to me on crypto is the U.S. government. You know, Gary Gensler and the U.S. government trying to kill crypto, which I think is a huge mistake. I mean, I'm still a believer in, people talk about blockchain. Oh, I don't know about crypto, but I believe in the fundamental technology of blockchain. That's what everybody says. I'm like, I'm kind of the opposite. I've got questions about the fundamental technology of blockchain, but I love crypto. I love the gamification of crypto. I love the software innovation and software engineering of crypto. And I think it's a shame that the U.S. government, instead of putting down guardrails and policies is trying to kill crypto. I think that's a huge mistake. If anything, this free money, the inflation situation that we're in now, the 31 trillion dollar of debt, which is actually really, if you look at unfunded liabilities, it's more like 90 trillion, that is a poster child case for crypto and Bitcoin. So I'm still a believer. I just, the wild card is the U.S. government. If the U.S. government really tries to slam it down, Chinese government tries to slam it down, you know, it might have to go underground, but I still think the innovation curve in crypto will meet AI. And I think it will make a comeback. I mean, right now you see Bitcoin tried to get up through 31,000, couldn't make it, and now it's diving back down. I think it's going to go back down to 20,000. Maybe even below, who knows? But I'm still a believer in the fundamental concept of Bitcoin as a store of value, Ethereum as a place for innovation. You make the point, and you've made it from day one of this pod that people are leaving. The best and brightest engineering minds are leaving crypto going to AI. I have said, I think those two worlds will come together. They haven't as of yet, but we'll see. It's complicated because you have, you know, you're talking generically, you know, about crypto and Bitcoin and blockchain. When in reality, there's a lot of fraud that has developed underbelly. In all growth markets have an underbelly. That's what's killing crypto, in my opinion. Not so much that AI, but AI is shining a new toy. There are some real technical things happening very fast in AI that are intoxicating to the folks that get attracted to crypto from the alpha nerd standpoint. This stuff going on around databases, infrastructure things like vector databases and embeddings, semi-structured data and unstructured data getting indexed. You have a lot of great stuff going on with foundational models around audio and video. You're seeing Coca-Cola was the first brand to do a commercial with AI, which is really cool. All done with stable AI and you got mid-journey kicking ass. So many fascinating things going on that's integrating at a high pace. That's why I call AI the tornado. Now, I think blockchain distributed ledgers and blockchainers is definitely going to be valuable. The answer is energy question. There's an energy question out there, obviously. And by the way, we'll talk about that AI energy issue going on now. We just reported yesterday for the first time. But Bitcoin and Ethereum are cryptos on blockchains. Shitcoins and some of these NFTs out there are nothing other than just crypto tokens, coins. So there's no underlying technology really. I mean, you have an immutability levels, but you know, really, I mean, so I think the stall on cryptos, the combination of AI being great, funding and implosion on the capital markets in crypto and the fraud's got to work its way out of the system. It's like eating a bad meal, right? You got food poisoning. You just got to get it out, right? So rest. Okay, so you mentioned the crypto, the fraud and crypto. So you mean unlike the U.S. banking system, you mean unlike mortgage backed securities. I mean, unlike what happened at SVB when people were selling shares as the ship was sinking. And of course, nobody went to jail from 2008, the big short, nobody, right? But yet. One person. That credit Swiss guy who was the fall, he was like a nobody. And all the big banks who dumped all their crappy mortgage backed securities prior and basically dumped them to their clients so that they could unwind their positions. Yeah, that's not really fraudulent, right? Nobody went to jail for that. So I'm like, it's just the differences that crypto in the early days and probably still was being used to bad things like drugs and human trafficking. It's kind of weak. It's kind of a weak argument, Dave, to say that the banking crisis has to do with fraudulent coin. But let me finish. But let me finish. All I'm saying is that. One is a system that was manipulated, which is true. The other one is just a bad system. No one has no value in shit coins. No, John, I disagree. Well, hold on a second. People buy shit coins, they're idiots, but they shouldn't do that. That's just stupid, like Dogecoin is crap. Well, that's my point. But there's, okay, no, but a lot of the fraud and crypto is people using Bitcoin for human trafficking and drug deals and ransomware. And that's been a lot of the source of the criticism. Well, they use other money for that too. That's just, that's- Exactly, but that's the point you were just saying that. No, that's not the point I'm saying. It's different. Well, hold on, just saying, let me finish. You're saying in the banking situation, that's just manipulating the system. I'm saying it's the same, here. There's a system, the difference is it's not regulated because the government has refused to put down any guardrails or any specific regulations. And then when people, maybe it's more than missed the urinal and what Binance did is they probably broke the law. It looks like they did, I don't know for sure, but allegedly they broke the law. But I'm just saying, and the government should go after, but the government should put down clear guardrails. Just like they should have with social media, but they don't. They just kick the can down the road. So I see it as very similar, even though the differences in crypto's much less mature. It's way earlier days. Frauds everywhere. There's always loopholes. Okay, well. I don't know why you're so anti-crypto. It's like a lot of good- I'm not anti-crypto. I'm just trying to follow your flawed argument because you're not listening to what I was saying, which is forget about the trafficking and how people are using crypto to do bad things. People use other things, a lot of things, many things need legitimate things to do bad things. Money, assets, whatever. But what I'm talking about, there's a fraudulent market in crypto that developed internationally around coins that have nothing to do with underlying technology and dore thing, other than pure fraud, creating a coin, dogecoin or whatever, that means nothing other than to be associated with something. Now, if that becomes a system, that's great. But it's not. So, you know, I like Ethereum and Bitcoin. I think that's a better market. I do think that's got legs and will have staying power and things based on that will, our derivative might work. But to me, that would be like saying that the bad fraud in the crypto side is like saying, hey, Dave, I'm going to start a bank. I'm going to start telling people it's as good as everything else. And it's really not a bank. I'm just going to get money in and take your money and make you think it's a bank. Oh, you mean like Bernie Madoff did? Yeah, that's fraud. So, that's fraud. That's fraud. I mean, they're saying there's fraud everywhere, right? Okay. He went to jail eventually after like 50- So, you're bullish on fraud then? No, I'm not. I'm saying, you know, he went to jail after 50- No, I'm saying there's no difference in the U.S. banking system. It's wrought with fraud. The government is fraudulent. It's all bullshit. People like somehow the news media feeds into it. Yeah, and free markets, free markets. I don't believe anything that the government tells me. I don't believe anything that the lobbyists tell me. And I don't believe anything pharmaceutical, the agriculture industry. I don't believe any of it. I don't. I think it's a lot of mumbo jumbo marketing. I think people got to be much more circumspect with what they hear in the news. The news is so not credible these days. Okay. I mean, I'm vaccinated to the hilt, okay? But even it's just the term vaccine. You trust vaccination? Oh my God. Come on. I'm saying I'm vaccinated to the hilt. I got it as soon as I could. I don't. I don't trust, I'm not getting vaccinated anymore. I got my vaccines. I'm fine. Is it even a vaccine or is it a therapeutic? Let me ask you. Does it stop you from getting the disease? I got the mandatory COVID shots that I needed to go travel, all right? And since the last one two years ago, I haven't gotten any more, okay? And I'm fine, right? So if there's more evidence out there that says there needs to be one, I'll look at it. And the other one is saying I'm going to do it. I wasn't anti-vax. I just don't think I don't trust the chemistry involved in drugs. That's not organic. If you get it, if you get a flu vaccine, I won't even touch it. If you get a flu vaccine, okay? And I know the flu vaccine, there are different strains and it doesn't always, it's not always effective against the strain that's not designed to protect you on. But if you get a flu vaccine and that strain attacks you, you don't get the flu because it's a vaccine. You're left likely to get the flu. It's not a vaccine. No, the flu vaccine's a vaccine. If you get the measles vaccine and you come, When they get the flu vaccine. It's because it's a different strain of the flu. If you get a measles vaccine, and I'm not a doctor, so I'm just kind of spitballing here. But if you get the measles vaccine, which we all did when we were kids, and you come in contact with somebody with the measles, you don't get it. You don't get the disease. But COVID, if you got the COVID vaccine, you could still get COVID. I got COVID, I got the vaccine, I still got COVID. You got the vaccine, you still got COVID because it's not a vaccine, it's a therapeutic. And there are plenty of therapeutics that were effective against coronavirus, but pharmaceutical industry wouldn't have made a lot of money if the government let them do that. All right, well let's do an enterprise news section then we'll come back to the big story of AI because I think it deserves a conversation. Let's move off of the crypto, government, conspiracy theories, different, you know. I'm not a conspiracy theorist, I just don't believe any of it. I think that's all lies. Okay, we'll come back to that in the rant section. I think I definitely can- I think George, I think George Carlin was right. Anything they say, just question. We'll believe people with no credibility though. It's the same thing, so it's paranoid. Anyway, enterprise news. So there's some old school news that our audience, our friends might know in the enterprise. Mike Lynch, the founder and CEO of Autonomy, a company that HP bought. I don't even know the amount, they bought 20 something billions of dollars. Eight billion, eight billion. Eight billion, it was a big purchase for HP before HP split up into two companies. We were on the ground, we were front row seats for this. Mike Lynch is in the UK, he was heralded as the UK, Steve Jobs, he's a genius. He got convicted here, extraditing him to the United States to face fraud charges. Okay, Reuters is reporting this. This is just interesting because finally he's coming back and he's going to get it up for trial. It's something he thought never could happen. He took down HP basically. In all their turmoil, this is what made them split up. It'd be interesting to see what happens. That'll be a reliving of those 2014 years around that time when HP was going through that identity crisis. Who are they? Are they enterprise? Are they consumer? They ended up splitting the company. Meg Whitman was the CEO at the time. It'd be very interesting to see that. No, no, no, no, it was, Leo Apatecker did the deal. Leo Apatecker. Yeah, but Meg had inherited Autonomy. Yeah, yeah, he inherited it, but Leo Apatecker did the deal. So after he tanked SAP, and then basically got fired and left with like a huge severance package, he then went on to tank HP and left with a huge severance package. Like in a matter of few short years, he walked away with tens of millions of dollars and basically tried to ruin two companies. It was like unbelievable. He didn't try, he did. He succeeded. So that's interesting, we're going to follow that. You see, the other thing that's happening is that Microsoft did a deal as a customer signed up for Healian Fusions, a company that's doing nuclear power and to power their data centers. So Fitsi over Platform Economics talks about this being the Microsoft's nuclear powered cloud. Dave, that's a capex opportunity of epic proportions, nuclear powered cloud. Where are you on, where are you on nukes? You know, I grew up in the 70s. I grew up in the 70s and I remember my thermodynamics professor in Union College. He kind of drilled into our heads how bad nuclear is. I know it's made huge strides and it's like so much more efficient, but his whole thing was, you know, the nuclear waste, you got to store this stuff and it lasts for thousands and thousands and thousands of years and so he was always drilling into our head how bad it was and that really kind of biased me against nukes. Maybe space. I know there are a lot of people that are for it. Store it in space. Pollute space. Yeah. Okay, there you go. The phantom zone. That was a good point. But it's interesting to see nuclear power coming in. I mean, power is a big part of data centers, Microsoft Azure, just kind of a snappy headline. So Microsoft's doing very strong work in the cloud and I'm catching up to AWS and so AWS has some challenges in their growth. They're in a phase of growth that they've never seen before. They've only seen hyper growth. So as the enterprise market matures a little bit on cloud, the repatriation conversation which we've had, which we think's BS, I know you had a story, I had a big video. Well, wait, do you see the update? So you see, I wrote last week, I don't know if you saw what I wrote last week, desperately seeking repatriation. Did you see that article I wrote in the post? They're breaking us. So at the end of the article, so Charles Fitzgerald has what's called the repatriation index. And what he does is he takes the growth rates of digital realty and equinex and divides them by the growth rate of AWS. And that's how he defines the repatriation index. Well, I said, I suspect it, I ran out of time because we were doing the Q pod. I said, it looks to me like the repatriation index, which has been in decline for three years, is going to break a trend and actually show a big uptick, or a little uptick. A small uptick. Small uptick. A slight uptick, not a big uptick. Absolutely, but it was going to break the trend. So Fitzgerald today just dropped an update of the cloud repatriation index. Hey guys, so snarky, it's beautiful. He said, ride the wave. And he had, I don't know, you Waterski, he had this lake with like a perfectly flat, like glass. It was May 8th, that wasn't today, that was this week. And then he said, and then he said, and he said, surf's up, ride the wave. Which of course he's saying, okay, slight little uptick. But it's still, I think a trend. It is a slope, it's broken the trend. And I have to say, a lot of people like Keith Townsend is kind of doing a victory lap on this. Like, see, I told you. And it's still to me not a secular trend, but I think it is a somewhat of an indication that we're reaching an equilibrium and a balance. David Nicholson talks about this all the time. And Matt Baker chimed in on my LinkedIn post saying, look, all markets reach at some point, some kind of equilibrium. And I think maybe we're not there yet, but we're starting to trend that way. Well, I like how he calls people repatriates. Because we love the New England Patriots. That's our football team. You know, I'm in California, still like the Patriots. The repatriates. He is so good. He is so good. The repatriates are, is a thing. But before he's had, this is my favorite line. But before we all clear our calendars for a blowout, quote, repatriation is a thing celebration. It's worth doing a little deeper. Hardly a tidal wave. And again, his index is very limited though to some marked bellwethers that he call, I call them, but they're his bellwethers for the trend. Yeah, and I had a big rant on this. And I think, I think repatriation is absolutely bullshit because, you know, again, my feeling is, what does repatriation means? The guy from 37 Signals, he's got a very narrow use case where he's basically trying to broadly, categorically associate his use case with the fact that cloud doesn't work for the enterprise. And that therefore repatriated back to the data center. Okay. For his use case, 37 Signals, hay.com, whatever the hell he's doing, that works for him. Get some data centers. In fact, we were riffing here in the cube at open source that if you're using the large language models and you've got GPUs or you want to order some Dell servers would throw some GPUs in there, stack them in the data center, get them on-prem, use the GPUs rather than going to Amazon. That's a better use case. So there are now use cases for on-premises, data center usage of hardware. If you know you can get ROI out of it and pay back in months. And with GPUs and large language models, it's proven that it's better to have it on-premises if you're using the hardware. Because you already know you're going to use it because you can forecast out the usage. That's like buying servers when you know you're going to use them. It's when you get over provisioning and you'll need the elasticity. So again, a use case like 37 Signals is not everyone. So I don't think repatriation is actually happening at scale and a major trend. I think what's happening is people are right-sizing their infrastructure to balance the hybrid and set up edge computing. Meaning they have to have that cloud operation layer public on-premise edge. And that's what's happening as well as cost reduction and FinOps, which is cost tuning, making sure of optimization. So all those things in play, I think account for the uptick. Not repatriation, which means cloud isn't working. The idea that cloud isn't working is complete BS. I couldn't agree more with that last statement, but let me chime in on this because I've done a lot of research on it and thinking about it. And again, it all started with the Andreessen Horowitz, Sarah Wong, and Martín Casado post, the trillion dollar paradox basically saying that the cost of goods sold for SaaS companies is going to become so onerous as the cloud cost as a percentage of the COGS is going to become so onerous that you're going to have to repatriate or the cloud vendors are going to have to give up margin. And so they use Dropbox as an example. And I pointed out in one of my breaking analysis that if you talk to Gleb Budman, who's the CEO of Backblazer, you talk to David Friend, who's the CEO of Wasabi, both of them do file storage. You cannot make money running a third party business on top of S3 because you can't make margin, you can't scale. The Sarah Wong document, Martín Casado document is correct in that regard. So Dropbox is a bad example because in any big business built on top of S3 that you're basically reselling file storage is a bad example. Okay, 37 signals, I agree is also a bad example because they are in the top 1% of elite developers on the planet. Okay, so they have the skills, they have the expertise now. And the use case by the way. And the use case with Hay as you pointed out and with probably Basecamp. And my guess is they are still sort of hybrid to your other point. However, having said all that, I do think it's time to question some of the assumptions, particularly Andy Jassy's statement that 90% of workloads are going to remain on-prem. I don't believe that's true. I don't believe it's 90%- Well, he never said 90% staying on-prem. No, he said 90% of workloads today are on-prem. So Cloud has huge upside opportunity. That number's been at 90% for the last three years. I don't believe it's 90%. I believe it's much, much lower than that. Now, having said all that, I think the other thing is the world is unquestionably hybrid. Only 14% of organizations surveyed in the last ETR drill down, only 14% were 100% all in on the cloud. And when asked what do you think that's going to be in three years, it was 14%. So the world is hybrid. There's no question about that. The right question that Laurie McViddy asked in her post is which workloads and what percent of the workloads are going to stay on-prem versus move into the cloud? And I think an increasingly large portion is moving to the cloud. And so that begs the question, okay, whether the future of cloud companies, particularly Amazon, and I think the future is not so much lifting and shifting IT. I think it's new use cases like satellites, like Edge, all these really new, like robotics, all these really new innovative use cases that they're driving. And of course, generative AI. Don't forget new startups that are coming on board that are cloud native out of the gate. So the percentage will increase as new business comes in on the cloud. So I think that 14% probably represents a lot of the cloud native born in the cloud. And that's going to be interesting to see as that number increases. But yeah, I think. That's a good point. That's a good point. I mean, I think the enterprise is going to be in the cloud, idiot not to be in the cloud. There's so many advantages, right? So security, but the on-prem's not going away. We've said this for years. I mean, we got pretty much a dead horse as far as I'm concerned. We beat this thing. This is like, they're not initially, we are not repatriates. We are not repatriates. We are patriots. We don't trust anybody. We are too bad. Our patriots are not looking so good. All right, so that's the enterprise news. Obviously IBM think that Watson, we were riffing on that. And this will segue us into the AI. I think IBM's think was a disappointment for me because I wanted to see more leadership with Red Hat doing so well for them and their AI announcement really fell flat. It was a me too. It didn't have any meat on the bone I felt. And from what I could see, not a strong launch. Watson X, terrible name. They should sunset Watson that has baggage, Osborne effect as we were talking earlier. Watson was the most hyped up and most under-delivered asset I've seen in IBM's history because it never, it was put out there so well as the future, they ran commercials on, during the masters. Great, great commercials. They marketed the hell out of it and maybe their thinking is they want to leverage that, but I don't know. I mean, maybe it's an insider view. I might be completely wrong, but I just didn't like it. I thought it was like very much down. Like it didn't impress me, calling it Watson. And it just felt me too. Now, that being said, IBM has so many smart people in there that they can kind of clean up their focus. I think they could get something to the market like Amazon. I mean, IBM has been doing a lot of research. We covered that at Ansible Fest, the AI piece with Ansible was interesting, IBM research. So if they can get that out of research and to go to market product, I think IBM can pivot fast because AI is changing so fast, they can get back in the game. That's why I don't like the Watson name. I like to go with something new and fresh to align with the generation of developers that are doing it and sounds old hat to me and it wasn't a winner to begin with. So the only thing I could see is they just wanted to ride the awareness of the advertising. So I don't get it. Well, you know a couple of things. So IBM basically, to me, two big things, mainframes and consultancy, consulting. They're a global system integrator and they are world class. I mean, to me, it's Accenture, IBM, I think those two are tops, EUA, EYs in there, PWC obviously, Deloitte, but IBM is a world class system integrator and a lot of their revenues come from that. And then they got mainframes and they are number one in mainframes, a lot of the world's transactions run through IBM, it throws off a lot of other high margin hardware like storage and it definitely throws off a lot of system integration and I think the third leg of the stool is software, they have this collection under that Steve Mills built and then they continued of software companies and they've managed it well. And then IBM does a really good job from a financial engineering standpoint. They do stop buybacks, they do dividends, but I wrote a couple of years ago, I think it was 2019, IBM's innovation agenda will determine its future. And I think IBM struggles to take it, it's R&D, it still struggles to take its R&D and translate that into monetization. And we'll see what it can do with this new Watson. Arvin mentioned at Think that he wants to double, I think it's double the amount of business that they do through partners. And it's like, okay, that's good, that's a good objective. And I think a lot of companies will want to partner with IBM, particularly a lot of the cloud guys, because they want to suck in IBM's on-prem business into their cloud. And so, again, IBM, because they're such a good brand, they have such great relationships and awesome, go-to-market channel and fantastic consulting and services and system integration, they're going to do very well in the marketplace, whether or not they can actually supercharge their growth and maintain a high single-digit growth rate, I think remains to be seen. Now, the thing I haven't talked about is Red Hat. $34 billion was sort of a Hail Mary to save the company, but without Red Hat, IBM, in my view, would be largely irrelevant. Because they were able to bring in Red Hat, it solidifies their hybrid cloud strategy, it gives them open source chops, and it gives them much more significant relevance in the developer community and the IT community in general. And by the way, that is translating here in Open Source Summit. IBM is here, I'm doing my podcast here on the ground, looking at great planes landing in the harbor here, boats, container ships, right, cloud native like here, Open Source, Red Hat is here, IBM is here too. There's a lot of people jazzed up at IBM. I think AI could be their tailwind, and if they don't screw it up, and I think they didn't look good off the tee on this one. They hit it out of bounds, as far as I'm concerned, with Watson. That's a bad name, I agree with you. The name is terrible, I don't like it. But you know, okay, wait a minute, wait a minute. So let's say you're inside IBM, and I'm sure they came up with 1,000 different names and they probably just said at the end of the day, let's just keep smiling at the camera, and let's call it Watson. Maybe we'll have a, hey, Microsoft does it, Microsoft puts out subpar products for years, and then eventually they get it right. Now, Microsoft, by the time they get to Rev3, I think we're out of nowhere. I don't know what Rev3 is. To me, it's an indicator of outside of Red Hat, the execution of IBM is not looking good. They're making a lot of mistakes, just all across the board. Like, ability to execute is one of the key things in the business. Little things matter, like the name, to thinking about it, how to run departments, how to run press relations and analyst relations, how to run things. There's a lot of things that just seems off. It feels like the company has a morale problem and a staff problem. I don't know, it just feels like that, Dave. So again, I think they need a reboot. I think this is an indicator of something as powerful as AI, as game-changing as AI is, as what the experts are saying on the ground, what we're reporting at SiliconANGLE.com. We are in the weeds on this. For IBM, AI is so important because they could have really written this title wave, this tornado, and really made it a slingshot for the brand. And for Arvin, I'm sure he's on it. I would look at this and be like, okay, Rob Thomas shouldn't have missed this, right? So, maybe he did, maybe it was his call. I don't know, either way. They should think. They should just think. The old slogan that used to be on the desk of all IBMers, think, is Watson a good name? And the answer is no. They should have gone with a new name. They didn't think it through. They thought too much. Maybe they thought too much, too, I don't know. Yeah, well, anyway, so AI is the hot. What else would you, you know, names are hard, right? So maybe, I don't know. Well, look at Google, right? So, Bard, is that a great name? But at least it's not, you know, Google, right? So, I think, that's a terrible name. I like Bard. I like Bard. The results are good. And then Google I.O., they stood tall and they essentially are rebooting themselves. They're putting a new image out there. And the Google I.O. image was clearly, we were in the game, too, because Microsoft took the ball with open AI and ran into our touchdown and celebrated, swikin' the ball and there's no one else around. Miss Boat Amazon comes online with their approach. And remember, these guys have chops, right? So, like, IBM's got AI chops. They just got to bring it to the table and I'll see it. So, you got Google, Microsoft goes first. Google orders a code red. Amazon launches their AI. Now, IBM and everyone else, we got our AI. So, like, and then since the Microsoft announcement, you had meta-leaked their source code, okay, in AI. That goes into open source. Google comes out with Bard. There is an arms race right now and it's legit development. It's legit technology being developed in developers. Small language models. So, there's a huge tsunami of new stuff happening that's massively changing the game. And this is really what Google I.O. is all about. The stuff that they're launching, the accelerated of features, the new databases, the vector database ideas. Interesting and super compelling. Just Google I.O. was phenomenal. And I think all the open source actions now superseding the expectations and giving open source a level up on proprietary models. Well, I will say this about Google. I mean, I really liked the workspace stuff. I think the Google, the Gmail AI was really interesting. I think the Google Pixel stuff where they can edit pictures and things like that is really cool. But I think for the enterprise, I still think it's wide open. I think enterprises need much more rigorous. They need guardrails, they need privacy, they need security, they need all these things and they got to be really, really careful at scale, et cetera, governance. And I wasn't blown away by the GCP stuff, the stuff that TK talked about and the integration and I mean, it was good. But I liked the simplicity of Amazon's Bedrock, their large language model as a service, their code whisperer, that three layer cake that they announced, very simple in my mind, serving developers. Now, Microsoft and Google have similar approaches, but they also have, I was talking to somebody from Amazon the other day and they're like, yeah, we're servicing, it was AWS, we're servicing the enterprise, we're not going after that consumer play and of course I pointed out. Except for Alexa and he's like, oh yeah, but that's Amazon, we're AWS, okay. But so there is that, but I think Amazon web services is really, in our world, driving the bus here and I like that model. I like the model of here you go builders, go compete with the chat GPTs of the world. We're not going to try to compete with them head on. All right, well Dave, AI is hot, my rant section was we wrap up our pod this week and again, I'm broadcasting here, I'm holding my pod here in Vancouver and the open source summit Linux Foundation. My rant's on the AI discussion and the news around replacing jobs. And in particular, my rant is around this New Yorker article put out by Ted Chang, who's a science fiction writer, but he's fiction. And he put out this horrible article. I mean, it's beautifully, I mean, it was so beautifully written, it's exactly your quote. The guy doesn't know jack shit about AI and he makes it sound like he does. That's like a very chat GPT like. Because what he wrote was so garbage, so much garbage in this thing, it was as fiction as it comes. He's basically saying that if AI, will AI become the new McKinsey and accuses the McKinsey consulting firm for being the knife and the chainsaw of capitalism? Okay, he's saying that because they work for a majority of the Fortune 100, that they're essentially the problem in society and that because AI is here, it's going to turn into McKinsey killing jobs and hurting people and labor. It was just so bad. Is there a way for AI to do something other than sharpen the knife blade of capitalism? Okay, he's saying that AI is going to kill capitalism. It's going to create a better capitalistic system and then put people at risk. It's evil. It's just, it was just so bad. And everyone's cheering him on like, well written, he must read. It was just so bad. And he's just, it was fiction. And like chat GPT, he was hallucinating. So complete hallucination article, amazing writer. The rate was written beautifully, but just piece of garbage, just so bad. I mean, I couldn't, I almost, I threw up last night reading this thing. It was just so off. Well written. It sounds like he's, it sounds like he's trying to, beautifully written. From the future. Yes. Right. Danger to humanity. I mean, I get the concern. He's a fiction writer. He's a tool. Okay. I'm done. No, I get the concern, but look, technology is always supplanted humans. Always. And you know, it's first time ever it's done so in cognitive fashion. That's scaring people. Sometimes it scares me, but look at, you can't, you can't fight fashion as Jeremy Burton likes to say. So I think, I think, at least in the near term for the foreseeable future, that AI is going to make us more productive. And I use chat GPT all the time, daily. Well, the whole premise is wages are falling. Luddites, they're Luddites getting killed by AI. I mean, this is just, it's just a false narrative. And he has nothing, it's nothing about AI. So are wages falling? All the, what economy, what economy is he watching? He's just, Wages are falling. He's not, he's not listening to that. All the experts here are saying the same thing. I mean, this is like, it's a tool to augment humans, right? So when you have augmentation to humans, the humans perform better. That's the action. So I think it's an opportunity and he's actually, again, it's fiction. It's the New Yorker, okay? So, but they shouldn't pass it off like it's journalism or any kind of opinion piece. It's just, it's pure fiction. And it just creates that tone of discourse that's just not positive. Again, the hallucinations in this article are off the charts. I think chatGPT probably wrote it. So that's my rant. So John, my rant, look, Lina Khan has a meta fixation and I seem to have a fixation with Lina Khan. I just, every time, every week I seem like I rant on Lina Khan, but so there was a, there was an article in the Wall Street Journal and it was an op-ed. But basically they explained, and I remember this meta landed in the FTC's dock in 2019 when it was founded to share data, millions of users. Remember the Cambridge Analytica thing, we all know that. So meta paid a $5 billion penalty. One of the largest ever imposed by the US agency and they agreed to bolster protections, et cetera, et cetera, et cetera. And it's a, the courts approved a 20 year consent decree. Now Ms. Khan is unilaterally rewriting it to make the terms more punitive, though she lacks the legal authority and a valid reason to do so. Meta voluntarily disclosed, by the way, at the time certain coding bugs that allowed children to chat with friends and said they were going to fix them, they did fix them. Okay, Lina Khan goes on CNBC this week and gets interviewed, you know, same old kind of mumbo jumbo, but it's the revisionist history that makes me rant. Khan offered an example of two historic tech antitrust cases in the last century. Those of IBM and AT&T. In AT&T's case, Khan noted that the government's requirement that the telecom firm open up its patent vault led to decades and decades of innovation. Okay, you remember Bell Labs? Bell Labs was in Xerox Park. These were like American icons in gems. Bell Labs is now owned by, let me see, Nokia? Right, okay. That's what antitrust led to, and it made the U.S. telecommunications system less competitive for decades. And then, you know, IBM, look, point about IBM, she's right, so I'll give her some credit on this, that the consent decree did, it stopped IBM from writing application software, they had to open up its application programming interfaces to let companies like McCormick and Dodge and Cullinette software, you know, thrive. Okay, fine. Good question, Mark. Okay, but the antitrust that went on for decades with IBM did virtually nothing other than that example, which is an important example, I agree, but it continued on in what ultimately killed IBM and killed IBM, but basically toppled their monopoly, was not the government. It was IBM's failure to understand that it was handing its monopoly to Intel and Microsoft. We know that well, we live that. And so the history of big tech litigation and antitrust by the government has been pretty poor, and I think what's happening now is essentially, Lena Kahn is kind of rewriting the rules on antitrust, not based on whether or not there actually is a law being broken, she claims we're just following the law, but it's the potential for competitiveness to be heard. And her argument is that the government is fostering all this great innovation, and I would say to a certain extent that's true, but it doesn't have to come with an attack on big tech. That's all I'm saying. If they're breaking the law, they should be punished. But if they're not, and there's just the potential for them to break the law because they're big. You know, just because they're big doesn't mean they're evil. You got to keep an eye on them, but I'm not happy with the current tenor of the existing administration and the way they're going after big tech. I think we have to defend it. It's just, in this market, it's just easy targets. That's why I don't like her thoughts. I just don't like her thesis. But to me, it's a philosophy issue, and I think in this market, it's easy to kind of jump on these tech companies because they're easy targets, the sentiment against them. And rightfully so, they have problems. They make some mistakes. But the industry's changing and growing. We're seeing massive amounts of action. We're seeing change that we've never seen before. So there's an opportunity to shape the change, not shackle it, right? So like, you either, you know, it's like Play-Doh. You kind of make it and shape it versus kind of restrict it. So this is going to be an issue around bottoms up, top down and management. Open source, like we're here at Open Source Summit, this is a power dynamic that has been figured out. So I think the power dynamic of Lena Kahn's organization doesn't jive with me. I think you can't be so top down with her approach. I think you've got to have a little bit of, you know, nurture the bottoms up, which is, you know, get in, make some enforcements, maybe make an example out of someone, but don't shackle the system. And again, it's a system, like the banking system. So it's all, it's got to work together, Dave. So I hear your rant there and I get that. I support it. And like the hallucination article on my rant, people just got to just zoom out a little bit before they get into the weeds on their dogma. Right, that to me is a very big thing. But again, at the end of the day, it's going to be a very historic moment. Open source software, cloud scale, societal benefits are going to be the application side of things here. And I think we need leaders and journalists who are going to share the data. You know, one of the hottest apps right now on hacker news and product hunt is called the boring application. It's taking, using AI to strip out all the salacious dogmen, just present facts from articles. It's like a, it's like a, it's a bot that goes through news stories, it takes out all the non-relevant stuff. It's, it summarizes, like, give me the bottom line. Give me what I need to know. People are rejecting this opinion from Leeds. Now we're opining because what's what we do, you know, and we're sharing it, but we're not in a position of power. It's going to affect anything. We're just going to have fun pointing out the obvious and hopefully cause some positive change. But if you're a leader in charge of the FTC or you're a writer and an audience for the New Yorker that has big numbers, what are you doing? Get it right. Be responsible. And- She's implementing her philosophy and her dogma in whatever means that she can. She got to that position sort of through the back door. She's pushed out any detractors. Yeah, I always say the left and the right, the similarities are much greater than the differences. We have to get out of this giving people what they want and serving an agenda, a distinct group only. It's all people and you got to have a balance. Well, Dave, that's what's going to wrap it up here. I got to get back to my show here, day three of the open source summit by the Linux Foundation. They're growing extremely fast. The big story here is ecosystems are emerging within open source, which creates a new power dynamic inside open source. Open source has leveled up to be an industry system, not just an organization for open source. It's become the standard for all software development. And that's why we're seeing AI advance so fast. More projects are coming in. You're going to see open source radically reform around the growth wave of data AI cloud scale. Software development is going to be in all of our lives. It's going to have societal impact, energy is big projects here for that, a lot of action. So I got to get back. I want to thank you for coming on. And 11, we got to start getting some guests in the next 10 episodes. We'll see if we can get some more action going, lift. And we'll see how it goes. Check out. I'm going to go back to my newspapers, John. Dave, I was going to rant on the newspapers, but you know, that's yesterday's news. You know that's not relevant. News is ephemeral, you're right. Hang, whatever floats your boat, that's a dead tree. I like to read online, but each is own. We'll bring that up. I do too. I like to read online too. Let's talk about who reads newspapers now in the next episode, okay? Because that's very much how we differ. I don't read papers anymore. I used to love to read the Sunday paper back in college and before the internet. But we'll hold it there. Go to siliconangle.com, thecube.net. Got a lot of stuff going on with theCUBE. Global expansion, we got our AI product coming out. And of course, more writers coming online at siliconangle.com. More analysts coming on theCUBE, collective, our group we're putting together. So much action happening with theCUBE. Great tailwind day. We're excited to just keep it open, keep it free. And keep plugging away and doing theCUBE. A lot more changes coming, so stay with us. Let us know what you think about the podcast and share with a friend. Thanks for listening and watching. See you next time.