 We're back at Moscone West. The Cube's coverage of RSA 2023. A man who needs no introduction. John Chambers is here, friend of the Cube. Great to see you again. Thanks for coming on. Dave, it's a pleasure. John, to be with you again. Great to see you. So John, a question that John and I ask a lot of executives like yourself. Is security a do-over? Oh, now that's not the way I've had it framed before. So I'm going to buy a little bit of time to distract your audience if I get the answer on it. The answer is yes. I think security of the past isn't going to work. Those were in silos, individual products, very complex, required human intervention. We're not simple to use or install, but you didn't understand the benefits and able to quantify where you put your risk. I think you're going to see security of the future in architectural play, which thinks about it from where are you versus your peers? If you invest money, where should you invest? How does it lower your cyber insurance or work through it? How do you prevent the attacks once they start to occur and shut them down quickly? How do you recover from them, et cetera? And that whole 360 degrees. So I think you're going to see a next generation of security leaders. You and I were teasing earlier, John, about a security kind of boring something of the past. I would argue, no, because you're going to see a whole new generation of leaders within it. Security is set up for an architectural play and nobody's been able to capitalize on it. And the only way you have security is to not require human intervention and for the pieces to talk and communicate together. You know, the integrated system aspect that was interesting, you and I have talked in the past, I know in your previous job as the CEO of Cisco, do a lot of networking. You got networking packets, that's kind of footprints. You can see deep packet inspection, see what the patterns are. Modern applications now on top of containers and Kubernetes are cloud native. You have a lot of scale and speed, new code coming out and AI's at the center of it. Two years ago, you said AI is the next big wave. It's here. So you got new AI, you got network, more solid network functionality and these modern apps. The stack is now trying to be secure. What's your vision on this? Because you got AI driving a lot of change, but the packet still got to move from point A to point B and be secure and there's more of them. Well, John, you've asked about six questions in the group and let me kind of answer the segments we went through. I think security of the future will be as alluded to in architectural play. Security companies today are primarily one product where they get 60, 70, 80% of their revenues and most of their profits. I think you've got to think about security on how the pieces tie together and how they communicate across those. I'm fortunate enough to have nine security startups. We're on an unusually good quarter and as you know startups go up and down. They have a problem every other week but out of the nine in the most recently reported quarter internally or last year if they haven't reported this quarter they're growing between 40 and 300%. Now what that says in an industry that's growing 10 to 12%, that's all security's growing and while it might be slowing a little bit which it probably is because of budget issues, when you hit those elements you're really with the next generation security players who make it simple to use, who use voice recognition as the primary potential single sign on for identity of the future, who take a complex issue like how good is your security strategy for your company that makes the CEO comfortable or the board comfortable and is able to explain it to you in multiple terms what does this really mean to you? Those type of things I think are the ones that interest people the most now. You know when you look at investing in security companies or in startups and you know this better than I do when you look at the market with the exception of Microsoft they've got a big security business, I guess it's hard to tell, they're kind of everywhere but no one company has more than single digit market share, right? Now when you were a CEO of Cisco you had I think 60 plus percent market share, right? So do you think that will change in the future? I think it has to and for mainly positive reasons. One of the things that I was taught earlier on by Jack Welch at GE's, he said John if you don't have at least 20 percent market share especially in what he understood about technology companies you don't have staying power. So to have a lot of players in a security architecture where nobody has even 10 percent you're going to see a consolidation in that and you're probably going to see a number of new generation leaders. I do think it's set up for one or two or three players to lead in this and it could be a startup who just gets bigger and moves into market adjacencies and use the innovation engine to really go or it could be one of the existing security players or CrowdStrike, Palo Alto Networks at Cisco that makes the transition. I'm betting either way I'll be okay. So it could be a company like Rubrics that is just on a tremendous growth range and a very high unicorn approaching double digits capability who decides to go into multiple other areas which I'd love to see people do or it could be one of the startups that suddenly really scales dramatically and begins to piece it together or an existing incumbent who reinvents themselves. Now the problem with existing incumbents it's hard to reinvent. You've got to get the next market transition right that's when you gain share. So the business model on security is now going to be enabled by AI and it's going to be enabled around simplicity ease of use, how you purchase your stuff and security has to be built in from the very beginning it can't be an afterthought. You overlay security on an electrical grid all you do is put mandates on it. It has to be designed for the beginning and how you do it. Same thing with networking with a company called Now which Pankaj Patel is leading. It's designed to ease of use. It reduces dramatically your operational costs and it was designed for simplicity from the very beginning with zero trust built into the very beginning. So until you get that in supply chain until you get it in the electrical grid until you get it in the networks you really don't have security of today. So there's going to be a new player here. I'd love to be a part of that. I'd love for him to buy my company so I'd rather buy one of my companies to be that mover. John you're investing a lot as you mentioned earlier which is great. You've seen the market moves. We're in a market now that there are many people saying look it's a shift. It's not like a market where you buy some company some white space, product roadmap fill that in, buy it, integrate it in. This is a market where there's opportunity for revolutionaries to take big positions. New companies start-ups coming in and as my friend Jim Anderson of VC or old school VC said some of the start-ups are ideas that no one gets or sees. It looks different. Is there something that you see out there that might be different? Because there's not a follow the herd mentality I guess AI that got that going on hype right now but in these big movement when these big market step functions where there's a change of the guard there's always that company that no one gets could be a little company, two guys out of Stanford build a box to connect networks together could be Airbnb type. What is this company? What is that in your mind? It's new. A series of questions on it. First I'll start with a way out there approach. You all remember I said voice would be free and it destroyed the, my service provider customers were pretty upset with me saying that and enjoying their revenues and their profits but it was obvious it would be because it was such a small load on the internet that companies would give it away to get the data and get the video side. One that's unknown that I think is going to change dramatically and it's counterintuitive because of the deep fakes going on especially with artificial intelligence is the voice. You're going to be able to imitate Dave or John I won't be able to tell it's not you. However, if you really look at voice it is broken up in a single second to 8,000 samples and in five seconds, 40,000 samples can't be spooked. And so all of a sudden you're going to be able to see company like a pin drop be able to say in voice it may be the single ID sign on and wouldn't it be so nice starting your car or logging into a call center or the ability to get on an airplane where you're able to just say a couple of sentences and they get it. And before you say what John that does work because of the AI capability and deep fakes it's the reverse. You'll be able to say very quickly this was Dave you'll be able to say no it was not and it was another human or you'll be able to say no this was engine machine driven and the machines actually get a signature that you're able to associate with it. So that's a way out there type of move. The second thing is that you're going to have a player like a small company like a safe that starts out of India and is growing at about 200% per year just on ranking architecture for how secure are you? Where do you put your investments, et cetera? And then they have the courage to cyber insurance tied to that which gets the 360 going. Small company, a couple hundred million in evaluation just did a major finance run for if you can imagine 52 billion million dollars and they had seven term sheets. Clearly that's something nobody's seen in the market. Or you could have a now that rethinks networking with security and they'll be doing a fundraise very, very shortly and I think that will go extremely well as well. Maybe a way out player you think of a Rubik's as a a storage system and backup well they're now a security system and the best form of defense against ransom where there is. They're kind of pivoted. They pivoted, they reinvented themselves. So those are the type of things but I think it's most likely to be players that were on people's radar screens two years ago. You're nice and give me credit for AI saying two years ago it was going to cross the chasm. I said it six years ago a little bit early but to me AI is going to be bigger than the cloud and bigger than the internet combined and I bet six years ago on AI companies a ASAP or a Unifor or a Spark Cognition or a Sprinkler. And so I think those are the exciting moves today that will create the next generation of real business. You started investing in AI six years ago? Six years ago. I made five major investments. So what did you see at the time and what's different now? Well what I saw at the time was that I felt it would be the next cloud and the next internet both of which I did a pretty good job of seeing around the corners and then betting not just saying is what it was at but betting with it and you could see customers the really leading as customers grasp the change here and I saw how AI completely changed the customer experience for companies and their call centers and that would be the first application much like the internet's first application could be as simple as entering orders online and once you see that you begin to connect the dots and the balance and then everything I saw continued to build upon it and so it's classic. I'm gonna go around the corner now in your mind because it's got data, you got AI clear path there see that what's around the corner that you're looking at now that you're connecting the dots on? Well two things first of all I think you articulated very well who the winners are going to be in AI in part. It's about compute, then it's about the data and the companies aren't going to give out their data. It's nice to have a chat GBT out there for the internet but there's no way a given company a space or your security company or enterprise company is going to give access to their data to others. So it's the ability to really think about how do you use the data in an effective way and then how do you do the logarithms, the AI piece of it to really change things. So I think you're going to see a gold rush here. I think some of these companies unfortunately are going to get overvalued again. Our memory is remarkably short isn't it? Like two months. And to suddenly wake up and say well I'm going to bet on the new player who's just starting with a new idea if you didn't bet five and six and seven years ago you're probably not going to be a player here long term. So it's going to be fun to watch how it shakes out. What's just around the corner? If somebody could get A on cybersecurity together uniquely that gets exciting but every company's going to be an AI company. Every company's going to be digital. That means tech's here to stay and the future looks very good. Questions can the U.S. lead in this or not? Well good question. I mean what's your investment philosophy right now in terms of growth capital versus sort of early stage? How do you think about that? Well I'm a little bit over the board more than I'd like to be. I originally would say I'm a B level investor once it gets up to CDE series. It's out of my pocket book. I invest all my funds myself with my four partners together. Today would actually say I'm investing earlier. I like the seeded series A because I can grow them and I've seen the movies and I can pick the mix that I want. I can also pick diversity in the leaders. Three out of the last five companies that I added are headed up by female CEOs which I think we need to do a much better job of as an industry especially the VCs. But my ideal target is a company that has a run rate of about two million that I know I can help them grow to 10 to 50 to 100. And so my goal is really not an investor. I'm more of a strategic coach, a partner, an advisor and again somebody who's kind of there to listen on the tough lines. Obviously you got the pedigree and you're doing great work and you're in trenches. You mentioned competitive to USA. I want to get your thoughts on. Sure. A lot of young people I've been talking to, they're looking at our society and there's a lot of change going on. There's a lot of fears, a lot of recession. What's the future look like? Global economy. What's the best way we can be more competitive as a country on the global stage as intellectual property rights are being viewed that you mentioned? People aren't going to give us our data. That's what I'm saying. What we're saying on theCUBE. That's the new IP. VDAI work with AI but as a country how do we, what's the positive outlook and what are some steps we can take? Let's start with the challenges. There is no entitlement. You have to earn the position and Silicon Valley doesn't have that nor does the US. You have to earn it. We need a higher sense of urgency. However, we control our destiny more than anyone else. And so our destiny on the number of unicorns, what is it, 16, 967? Probably a third aren't going to be unicorns a year from now, maybe half. But the number coming in, we grew last year at about 12%. China only grew three, four percent. India grew 22%. In fact, if you look at what is occurring in India they had more unicorns created than China did. So a change in the guard perhaps and emerging markets is very possible in terms of the direction. So I think it's all about this country being the best startup country, not just in Austin and Boston and Atlanta and Silicon Valley, but in all 50 states. That's what I'm doing in my home state of West Virginia. USA West Virginia startup state. Guess what was the number three startup state in the nation this last year? Really? West Virginia, 90% growth of startups, industry average 27. Guess what state has the lowest unemployment in its history? Evergreen, West Virginia. Really? Sounds like someone's been doing some work there. Joe Manchin for president? Yeah, Joe Manchin's quite a person. Shelley Moore Capitao's very good as well. A lot of good players, but what I'm saying is we took control of the state, changed the education, made it inclusive, got Democrats and Republicans. Shelley Moore Capitao, a Republican. Joe Manchin, a Democrat. The governor Republican. Speaker of the House, President of the Senate. Common vision. And we did things that people thought couldn't be done. And we moved from 45, 48 in every category to three, number six in GDP growth tied with Oregon. I mean, we're playing at a different level. What's the infrastructure there? I'm sure there's got to be great connectivity. Connectivity and internet access. The infrastructure is actually the peak. We had a common view. It's amazing what you can accomplish when you don't care who gets the credit. And people worked at a common vision and put aside their differences. I think the common infrastructure here is West Virginia's. We're basically very good people. We care about winning together. We try to do the right thing. And we had the courage to dream. We were the chemical center of the world, the coal mining center of the world. And I grew up. We perhaps have a chance to do it again. But it isn't West Virginia. We need to do that at 50 states. It's a formula. That's what I'm doing in France. I'm with Macron as his key global ambassador for high tech. And in India with Modi, he calls me his global ambassador. But I'm really the head of US-India strategic partnership for him. Probably the most strategic relationship in the world to the US at the present time. Where are you on public policy right now? I presume you don't want to pause investment in AI. You're seeing, you know, FTC wants to break up big tech. We saw today, Activision, the UK government is blocking. And I'm sure the US is not far behind. We kind of stopped the NVIDIA arm acquisition. Where do you think we are? It feels like the pendulum's swinging. Are you comfortable with that? Would you like to see a better public-private partnership? Well, I think there has to be a better public-private partnership. Let me be critical of my industry for a moment. During the 90s and the first decade of 2000s, we were a leader in the industry and the internet in a big way. And our peers and competitors were very good. We had no major issues in the European Union or in China, or in the US or others. But we always were able to say, what is the public policy goal that's fair? And how do we work together, as opposed to give them the Heisman move and stiff iron them? The big tech companies, they brought this on themselves. And they didn't work with government for legitimate needs. And you have to have, in my opinion, and that isn't all of them, but several of them did. You have to have a clear economic path, but you also owe an obligation to society. If you don't do both on issues of privacy, fairness, et cetera, you're going to be regulated, and then antitrust will follow. Both the Democrats and Republicans told us this was coming. We didn't listen very well. So I think this is one where I think it's time for a gut check on terms of, is high tech good for America? My group at Cisco, 92% of Americans felt it was good. Today, majority of Americans think it's not good. We have to re-earn the public confidence. If you don't, you're going to see activities that come within it. Now, do your question about AI, and do we need a pause? A lot of smart people said this. I don't know what they were thinking. The horse isn't out of the barn. Every horse in the world is out of the barn and in other countries. Out of my 20 startups, 19 are AI companies today. Pause is not an option. That is so deeply embedded is the future of defense, is the future of these companies, is productivity. You'd crash the system if you even tried to do this and it's not doable. So I think there is one where people have a legitimate concern. And the legitimate concern is we need god rails and we need them quickly. But a pause was a non-starter from the beginning and I don't understand why people that even thought that was a viable option. Yeah, I agree. I think even very few political leaders, well, if you're another country you want to catch up, or if you're an existing incumbent that doesn't have a good strategy in AI perhaps, but this is one, disruption waits for no one. So we better lead and we better get the right god rails up. Do you think it's US one, the rest of the world zero right now? Oh no. I think this is a jump ball. And let's use cybersecurity as an example. Are 80% of the unicorns in cybersecurity in the US? Yes. Do we have a good chance to play this one well? Yes. Will we play it well enough? I don't know. On AI it's much more of a jump ball. There's a lot of technology going on around the world in this area, including deep fakes, road country espionage. Disinformation, disinformation. Yeah, if you look at it, and use China as an example, and I believe in the long run, US and China should learn to work together. And I think that will eventually come back, but in the short run, it's clearly going to be extremely bumpy in terms of the direction. And you have to have intellectual property protection for your comments. You have to have the capability to say if the US is going to lead in defense, we better lead in AI and cybersecurity as we move forward. At the present time, even using the US defense department slash reports that I saw, China leads the US in probably 15 of the 20 most important areas. Two, we can't lose AI and cybersecurity. John, you always bring the energy and the insight. Thank you so much for joining us again on theCUBE. John and I really enjoy our time with you. John, thank you. Thank you, John, appreciate it. All right, keep it right there. We'll be back with theCUBE's coverage, RSA 23 from Moscone. Thank you for watching theCUBE.