 Hello everyone. Welcome to the Q-Pod. I'm John Furrier, Dave Vellante. We're breaking down all the stories. Every week we have this podcast. We're on episode six, Dave. A lot of stuff going on. Trump got indicted. Elon Musk creates an astroturf way to kind of get momentum to stop halt on AI development for six months. The internet broke and got crazy. Cryptocurrency, banking, a lot of things going on in the world. It's been amazing hundred days since ChatGPT. AI madness continues. This is our episode six and we couldn't have a better time to do a podcast because breaking down all the action. And there's a ton of action this week, Dave. It's amazing to see. And again, I'm just still blown away. It's just in the past hundred days so much has changed. The innovation pace on the AI madness is just incredible. More things to look at today. But the big story right out of the gate I want to get into with you is this Elon Musk signed an open letter urging AI labs to stop the training of their system of GPT-4. Basically, and I'm but thousands of other signatures from an independent organization, not so independent as it's been reported as an astroturfing firm or Elon Musk. He's invested in it. It's essentially creating fake momentum around something that doesn't even exist. So really interesting. Now Elon Musk was involved with open AI, tried to take over the company and then got booted or left, so to speak. Basically, that's translation for big power play. He's out and this effort was clearly a way for him to get into the mud and cause all kinds of trolling on open AI. And it's the stupidest thing I've ever seen. I got to say, and it was so public. Well, my first reaction was, oh, what's this? A competitor is trying to slow down open AI and Microsoft because it's going to have the opposite effect. It's like, don't look over there and the people say, what? So for the people outside of tech who don't know what chat GPT is, now they're going to be poking around at it. I was talking to Andy Terai who you know, he follows AI pretty closely. I asked him what his take was. He said, what happens after six months? And I thought that was right on. I mean, are other nations going to sign on for this or is it going to be like climate change? It's first of all, it's bullshit. First of all, it's the stupidest thing I've ever seen. So what is six months going to do? All right, number one, number one, number two, you got to get it out there and let the, let the, let things break a little bit, fix it. This is a clearly a generational shift. And also there's competitive advantage for outside the United States. Remember, you got the Chinese and the Russians also trying to weaponize AI as well. So, you know, this whole scare tactic of civilization is going to die. Jobs are going to be risked. Human, humans are going to lose control to the machines. It's actually intoxicating and fun to listen to that nonsense, but it is kind of sci-fi and kind of cool on one hand. But the reality is, is that this is so early on, I mean, misinformation is a legit point. We pointed that out on the pod that that's going to see a lot of misinformation with these tools. But with the misinformation, you're going to have solutions. This is the beginning of what I think is again, the generational shift of new kinds of startups. Problems create opportunities and this kind of massive growth, the online population, okay, of AI users is going to look a lot like the internet online population when the browser hit. You pointed this out on the couple of pods ago that the dot com bubble, this is a key metric. I talked to like at least 10 entrepreneurs this week are doing AI startups, Dave, and they're all pointing to the same thing. And I said, the number one metric is, this market is growing and the KPI is the number of online users. There's a massive surge. This is for everybody. And you're seeing the numbers. So I think the next six months are going to be probably more of a high velocity than ever before. The fact that Elon Musk and the competitors to open AI are trying to slow it down. It's clearly obvious. This is a blatant attempt to slow down the competition. I mean, you're right on. I mean, the use cases are amazing. You're at parties, people never heard of this. You go, what do you do for a living? And you can show them how they could use chat GPT. They're like blown away. They're like, their eyes like light up. I mean, I do agree that if you're going to ask a chat GPT to write code to take over a computer and, you know, create havoc, you obviously want to control that. But you can't stifle innovation. You can't protect the past from the future. Well, we're reporting on Silicon Angle today, raking news, Italy's private regulator, temporary bands, chat GPT and probes open AI claiming the company has no legal basis for mass collection and storage of personal data. So they're banning it out of fear and they're planning the privacy card. Well, we know that essentially open AI is strip mining the web basically. Yeah. And that's happening. So it's really the web. So I mean, so China, I mean, Italy bans it. Again, this is this. People are scared. They don't think they want to kill it. They don't understand. And that's classic early adopter market day where you have people that just are uncomfortable. Well, the possibilities of AI like this, some sort of corner dark corner that's going to turn and kill people, take away jobs, kill civilization, start a Skynet, you know, Terminator kind of vibe going on with folks under the age of 30, probably don't know what Terminator is, but Skynet tickle over the war. But it's funny, John, right? Because, you know, in the early days of tech, the governments would be like, you know, they'd literally be like two decades behind. And then they'd say, oh, wow, we got to look into this. And then, you know, but that timeframe has been compressing. And now it's like, they're right there. But like last week, we talked about it with the congressman asking or the senator asking, does TikTok run on Wi-Fi? It's like, okay, so they're now compressed the timeframe, but the governments, they don't really know what they're doing. And they don't really have good answers. And then it becomes political. And then the whole thing is going to get one angle that's interesting from the privacy. Italy by banning Italy, banning it using the privacy card, I think is kind of just a kind of a false flag in my mind. But the thing that's going to be interesting to me, not just privacy is copyright. Think about what copyright infringement is going to look like with all these tools. How do you source the origination? What's the fraud detection? This week, I had a chance to see Terry Wise who came out of retirement from AWS with another Q alumna, Rick Farnell. They're running a company doing essentially a product that's essentially identifies fraud and or, you know, people reselling in gray markets, they shouldn't be. So, you know, this is going to open up a content and copyright problem. How long do you think, so come back to this proposal, this like ridiculous proposal. How long would it take? Forget the industry, you know, because we know how long industry consortia take. How long would it take the government to figure out how to put guard rails on this and then implement them? And then, okay, I don't know, would the industry take longer? Probably just as much time. You're not going to ever build a consensus around this. So, it's, look, it's not an easy answer. But I think, I think education is part of it. I think tools, I think there are tools that can, you know, like you, I think you were telling me one of the pods that you can sniff out, you know, chat GPT signatures. Okay. So, maybe tooling to protect people. But if you're going to have like a kind of build a consensus from industry or government, forget it. What a waste of time that is. Well, the innovation is massive. I'm on Twitter right now, this guy Lance Mark, who was a PhD grad from Stanford, basically wrote an open source thing using Chainlang AI, one of the tools, Chainlang and ASTAC, the two ones. He essentially built via chat GPT for API. I sucked in the top podcasts, Lex Friedman and the all in podcast. I'm talking to about doing our podcast and all of our 15,000 cube interviews. He's got a utility where it answers questions, you know, you know, what does someone think about this? What's the best investment? It's going through the corpus of the podcasts. The multimodal thing is happening day. Audio is becoming Q and A, like Quora almost or chatbot. Audio is becoming data. Video is becoming metadata. I mean, this is really amazing. So, I mean, he got put on open source. So it's all open source. This is again going to be a surge in others. Open source's role in this is going to be interesting to watch. It's going to make social media fake news look like child's play. Yeah. On the other hand, maybe people just kind of won't trust it. And maybe there's a silver lining here, John. I mean, how many times have people texted you something and said, look at this, man! And it's their agenda. And you're like, dude, that is fake. And they're like, oh, sorry. That firm that Rick Farnello and Terry Ryzer running right now, they take it basically a digital protection, digital brand protection company, and they're turning it into a cyber and verification process. There will be a AI approved seal of approval, like a good housekeeping or like good business bureau or this red meat is real, that kind of thing. So, I think you're going to start to see the validators coming in and bots for bots and compilers for compilers, code for code. You're going to see AI as code be that AI first wave coming and everything points to that. You're seeing everyone going crazy over the plugin for ChatGPT. Some are calling it the marketplace, their Apple Store. Well, first of all, it's more like a Chrome extension, in my opinion, not even close to an Apple Store vibe. But ChatGPT is an app. It's a super cloud and a super app, Dave. So wait, so before I go there, so wait, you're saying that there's going to be tooling to help adjudicate this? Oh, you mean the market's going to figure it out, not the government? Wow. What a great idea. I think it was your first rant on our first no girl pod, wasn't it? We were going crazy on the government. Never let the government touch anything. But, you know, there's that too, right? So the whole TikTok thing went down. Other breaking news real quick while we're at the top here, Twitter is open sourcing a portion of its code on GitHub, including its algorithm for recommending tweets for you, which is the new tab, but excluding its ad recommendation engine. Now, this week, Twitter had some source code leaked. And they also changed the terms of the firehose, that is inside baseball, but that's not going well. So maybe our bet that Twitter was going to take over, if TikTok might not work, Elon, we gave you all the advice to be listening. But I think, Dave, it's not going to, if TikTok gets banned, which was another thing this week that happened. We talked about it. I think Amazon would be better off taking it over. They have more e-commerce, affiliate linking. TikTok is growing and the revenues are coming out of TikTok are significant. People are getting massive traffic and the commerce on TikTok with those numbers are creator centric. So I think the angle is not Twitter, it's Amazon taking over the TikTok. Well, not Oracle. What's your reaction? John, I'm going to make you laugh. So I was talking to my daughter last night. You know, she's big on TikTok and it's blah, blah, blah. And she said to me, she got really emotional. She goes, my generation is incessantly reaching out to lawmakers and inundating them with our point of view. We are not going to let this happen. Anyway, I think you were right on. You said, look, just sell it to a U.S.-based company. Biketance might not want to do that. Make them do it. And Amazon, that's interesting. But yeah, some kind of reputable firm. Again, Oracle was thrown around. So why not? Oh, that's so trustworthy. They are. And they got the engineered systems. They definitely got the security. No doubt about it. But the question is, the question is, what happens next? And it's going to be interesting around TikTok. The bill that they put together was basically a surveillance society. And you know, my rant, I'm going to save it for the rant section, but you can't have a free country and freedom and liberty if you're under surveillance all the time. That's not freedom. That's called China. And so if China causes the U.S. to become China, then they've won. So when we lose, so the question is, what does freedom mean? If you have to be surveilled all the time. Now, I think the younger generation doesn't understand the impact of the surveillance and the malware. Yeah, I agree. They don't care. Yeah. And the potential to manipulate the data to cause harm to the United States and society. I mean, we've seen that in social media. So you're right about that. But that's why, you know, but the problem is, John, the government, they just can't make decisions. That was that Senate hearing was just a bunch of grandstanding to say, who's tougher on China? And now there's, now that the Gen X and millennials have spammed Congress, they're, you know, the Democrats are flipping. The Republicans say, hey, this is an opportunity for us to look harder on China. It just becomes so political that nobody cares about like what's good for the country. And I think, you know, you and I, I think came up with the right decision. Make fight dance, sell the majority of the company to a U.S. based, you know, entity and govern it accordingly. Boom, done. Yeah. Well, AI madness continues, Dave. And I think it's going to be one of those things that just, if you look in the past hundred days that said this at the top, it's been pretty brutal. How fast just our interview, I did an interview with the CEO of Huggingface just like a month and a half ago. Right. Okay. And look how fast that market's changing for the better for them. So I think, you know, I'm really excited by the AI movement. I'm not afraid of it at all. I think the ban is nonsense. It's politically motivated, competitively charged, and it's basically it's astroturfing. Got Google's attention. Got school, right? It got classic fake operations that give momentum to a non issue, make it appear like this momentum against it. This is, and everyone's walking back their statements to day and a half later, Dave. Oh, like, oh, shit, they got bamboozled. Maybe I should have assigned that. And then, and then this week you got crypto madness. So AI continue, we're going to pound this all, all year, I think we're going to be digging into AI. But, you know, you also brought up on the first podcast that bullish on crypto, you know, I am too, but, you know, I feel like the whole coin, shit coin business, but, but, and the fraud, but the finance CEO got sued on compliance. And then in China, all the China banks went to Hong Kong and are offering a safe harbor for crypto companies. And now today, people are having a hard time converting their crypto. So what's your take on this? Because this also is China setting up in Hong Kong. What's the international banking system look like? What's the role of the United States? It's clearly the United States is clamping down on all crypto activity to get rein it in, rein in the chaos, as we say. What's your take on this? You saw, and you saw, just to add to the news, the Nvidia CTO basically said that crypto has nothing useful to, to add, it's nothing useful to society, right? And they shifted, right? What's his name? Michael Kagan. Michael Kagan, right. And they shifted their supply toward AI at the expense of crypto. And okay, so he says adds nothing useful to society. It will need that a lot of financial products that are simply designed to make more money for New Yorkers with homes in the Hamptons, like crappy baskets of mortgage-backed securities. In Miami now too, they're calling the West Palm Beach in New York City of the South. The Kagan guy though, Jay, this is interesting. And I remember you and I had a conversation on theCUBE, said VMworld, I think five years ago or something, maybe 2018, 2017. We asked Pat Gelsinger at that time, the CEO of VMware, what he thought about crypto. And he was right out of the gate. I thought I think it's bullshit because the sustainability angle. Remember that interview? Yeah, yeah, yeah. So this is what this guy's coming from. He's saying the crypto mining is problematic. Now, I think it's just like fashion. The wind's blowing against crypto. AI is the hot thing. Obviously AI and GPUs are go great together. So Nvidia wins on either wave. I know. But you know, come on. There's arguments on the other side, like the whole move to proof of stake. There's a lot of things that consume energy. So I don't think we can... I think it's a bullshit statement. What are you? I think it's bullshit that he said that. I think it's... I was... I totally disagree with him. I'm like, first of all, the banking crisis to me, the most recent banking crisis is a case for Bitcoin. I mean, hello. Yeah, exactly. Now, you mentioned the Binance thing. I don't think that looks so good for Binance, to be honest with you. So I'll tell you my personal story. So I've had a Binance account for a long, long time. And then what happened is when the US cracked down, Binance customers were told, you got to move all your crypto out of Binance into US Binance because you're not going to be able to access your crypto anymore. And I never did it. I just left it in there. And when I would travel overseas, I would check it out. And then I said, oh, I can just use a VPN. So I went in on a VPN. Well, so they got the CEO, I think, of the company saying, oh, hey, we have this big Chicago options trader or whatever, whoever it was. And they're a big account and saying, hey, just make sure they use a VPN. So they've got that on email. So really bad. And then the other thing is, so I went in the other day, VPN no longer works. They get a message up, they sniff out, they figure out it's not that hard to figure out you're still in the US, even though you're on a VPN, they're like, oh, no, you're in the US. So they did, but it does not look good for those guys. And you know what, gay, if they're breaking the law, they should be slapped. I mean, I'm all for that. I just, you know, I'm down on the government meddling. But if people are breaking, if companies are breaking the law, I mean, what does that even mean? I mean, this is an international issue. When you see these big trends, there's always a rock on the river that causes the water to stop. Someone puts a blocker up. But the force is going to move around of all this. In my opinion, you can't hold back the AI wave. You can't hold back the crypto blockchain wave. That's critical infrastructure, Dave. We've been riffing on this for years. And yeah, there's a little bit of a, you know, shit layer of shit coins up there or whatever. That's got a little bit bubbly and, you know, shit happens when it's like that. So raining in the chaos is what's happening right now. Let the chaos rain, rain in the chaos. So I think, and I think you believe this, the infrastructure aspect of blockchain token economics is completely legit. Absolutely. Opportunity from an infrastructure standpoint. The key will be applications, what is on there. So what we've been seeing with super cloud and super apps and abstraction layers, you're starting to see a different kind of paradigm on blockchain. And that's going to be really where the opportunity is. And what sucks about the crypto winter that's going on is it was so fraudulent that this could put a year damper on it. And that's why I said in the first pod, our inaugural podcast that the alpha engineers are moving to AI. And it's clearly the case, as I pointed out on Twitter, you got PhDs from Stanford universities, Cal, I wear my Cal shirt for the data disguise and the story you wrote that was flying all around the internet. You got kids at Berkeley, all computer science programs getting their attention on this. So that's bad for crypto. So however, the big money people, the long game folks are in crypto still. So I don't think it's going to go away. It's just going to be kind of quiet for a little bit, but the smart money and the long players are all in on crypto still. It's just that the, I worry, I worry about the entrepreneurial energy. I really do. So I'm watching that here and it seems to be. I worry about it too, John. I mean, because you and I know we've met a lot of people who were mission driven doing some really interesting work, you know, taking a lot of risk and who knows rolling the dice, a lot of stuff. Forget putting aside the fraudulent stuff. That's not what I'm talking about. I'm talking about genuine innovation, trying to solve things like DeFi, trying to solve security using crypto and blockchain. And those are all good things. And I'm still a believer. I still believe in the fundamental premise that in the early days, if you want to do invest in Linux, you couldn't. And crypto gives you a way to do that. And that was an awesome funding mechanism. And yeah, it got a lot of fraud, but I still, again, I come back to the banking crisis. It basically to me was a commercial for Bitcoin, you know, gold and Bitcoin. And add a case and a case for what we know it is, it's just intermediates the middle man. So I mean, you couldn't paint a better poster child for innovation with blockchain and what just happened with the banking crisis. In fact, even though I'm kind of seeing the developer engineering alphas go to AI, I got a text this week or the DM on on Instagram from a very senior but yet young and his prime, but not super old entrepreneur ex executive, a big company, one of the big five everyone knows who's super smart. And he's all into crypto in terms of the shift, not from a money making standpoint on trading crypto, because there's a lot of people did that for a year, you know, they've been trading crypto. This is a legitimate entrepreneur who's sees opportunity recognition in crypto as a structural change. That's accept that's a tell sign, Dave. There's going to be more long game here. So, you know, I don't know. I just don't know if it's going to be a year or two. I said two in my first on our first podcast. Yeah, I mean, that's a I had predicted this. I said, look, this thing's going to top out. I can't tell you exactly when, but it's probably going to be within the next six months or enough it did. And then I will say this, it's going to go sideways. And I think it could go sideways for two or three years. But my prediction is that, you know, I think Bitcoin's going to go to 100 grand. I can't tell you when others have predicted. I think Kathy would say it's going to go to a million. I didn't make that prediction, but I think it's going to go up and then it's going to, you know, come down and it's going to be pretty volatile for quite some time until it does get more regulated. But I think those government guidelines will be a good thing for the crypto business. I don't think that would necessarily be a bad thing. But, you know, I think the premise still stands that that the government just prints money like crazy. Satoshi, whoever he or she was, Satoshi said, I'm going to create something that we just can't do quantitative easing. Well, we know Satoshi is female, right? Right. Well, that's what your t-shirt says. So, and that was, you know, genius and brilliant start of the movement. And look, you know, the other tell, you look at that, I love the debt clock. I love it. And I hate it. It makes me cry. But crypto as a percentage of crypto divided by the M2 money supply is now, I want to say 19. The ratio was like 19 percent. It was 2,300 back in 2013. And so that gap is closing. And so crypto is becoming a, you know, it's still small, but it's becoming a bigger and more important piece of the overall economy. Here, I'll look that up when you respond. Yeah, I think we're going to, I mean, I think there's a cyber war going on, as you know, into that whole theory. We've got to move that red line down. 17. So here's the ratio. It was the crypto, the dollar-to-crypto ratio, meaning the valuation of crypto divided by the M2 money supply was other way around, rather, was 9,489 to 1 in 2013. It's now 17 to 1. Okay. So that says crypto, you know, continues to, that's something that is worth watching. And I think there's, it's legitimate. There's not just, I mean, a Warren Buffett, you know, says no, and Charlie Munger and so many naysayers. But, you know, that's just because they're smart and rich doesn't mean they're right. Well, today is a day where people are freaking out in the U.S. because of the Donald Trump indictment. Half the country celebrating the other campus revolting. Oh boy. So that's news and that has to be addressed, Dave. I mean, I just think that, you know, if people go down this civil war route, which I predicted years ago, by the way, decade ago, I think people got to chill out. I mean, the Republicans going too far here. And they just got to say, look at Trump, don't even, just don't even throw your hat in the ring. Just step aside. Republican parties, they're stuck. And the Democrats, you know, they got Biden, he's a puppet. And so, you know, you got, you get a lot of different kind of views. It's a terrible party makeup on both sides. So it's going to be interesting. This is a pivotal election because you want to see new leadership come out of this, not same old, same old. So, you know, I hate to see that Trump's coming back into, to throw his ring in the hat in the ring. I think it helps him. I do. I think it helps him, John. I don't like it. I don't, I mean, in fact, you know what I think about Trump? I mean, many of his policies I agree with, I don't agree with the man and I can't get by January 6th. I'm sorry. You know, the peaceful transfer of power. You try to stop it. So you're out. You're dead to me in that environment. But I think this is bad because I think it emboldens him. First of all, people who are against Trump, then this is not going to change anything. People who are for Trump, this is just going to deepen their affinity to him. No, no good comes out of it. I just, it's so, it's so bad. What's the outcome? So let's, what is the outcome that's good out of this? I don't get it. There's a lot of headlines. Lindsey Graham suggests Trump punch a cop on the way to Tuesday's arraignment. Now that's really smart, right? That's the shit that's going down. People are blowing their like pretty much crying over the Fox News. Jim Jordan's freaking out. All the Trumpies are all like, you know, this is their bet and they're gonna die on this hill. You know, and so it's just, he's, he should be a footnote. He should have been a footnote and he never should have threw his demon to the hat and ring. You know, the Republican parties are blowing the middle. They have the middle opportunity to take the moderate and to right and they go the other way. They go to the fringe. It's just terrible. I just think it's so bad for the country and people, people don't chill out and let the air out of the balloon slowly. It's going to pop and it's going to be a tinderbox. So I just don't think it's healthy, Dave. And this is just, by the way, that situation. The stuff we've been talking about, the cyber warfare, the geopolitical landscape, the current banking system. I mean, it's hell on a hand basket right now. So like, it's, it's, it's a lot going on. So like I said, this is going to support my thesis that a revolution is coming and the younger generation should step up like your daughter who's saying, Hey, you know what, you know, we're, we're, we're against this old thinking. So how about both parties come up with better candidates or maybe there's an independent candidate that could come out, right? I mean, yeah, you know, I mean, President Biden is, this guy's getting up there, right? I mean, he's kind of old. I think he's vulnerable. You know, he's very high probability. He could be a one-term president. So I don't know. Maybe that's why Trump figures, okay, hey, I can win even if I have a criminal record. I could still, evidently, you could still be president with a criminal record, but you can't be president if you weren't born here. Charlie Senate's kid who was awesome is, you know, he's American is Apple Pie, but he was actually born in the UK. And he's, he wants to be a politician, but he can't be, he can't be president. So he wants to run for Senate so he could change the law and become president. Hey, they changed MLB baseball this week. They got a clock and they got bigger bases. I mean, changes. Oh my God. Have you seen that? It really hasn't changed anything, has it? I think, I think they should just have put, put baseball on a time clock. Three, three hours in the game ends. Seven run rule, seven run rule. Yeah, something like that. Just end it. Yankees, Yankees, Redstocks games are four hours, no easy, you know. More. That's four and a half or five. Yeah. I mean, I think, you know, every other sport said, hey, let's juice offense. It'll be awesome, but they have a clock. Baseball tries to do that. You know, hey, bring back steroids and forget it. The game would be six hours long. I'm serious. They should have a coin toss to see who bats first and then make the game three hours. If it goes three innings or two and a half, four and a half, it's over. Yeah. Go home. Yeah. And that's, that's actually one way to do it. But the other thing about the, the pitching clock that is the, is the pitchers going to get injured. The injuries to pitchers, it's going to be an offensive game because they have to work fast. And so you'd see more injuries and more pitches that'll be hit harder. So I think the numbers are going to go through the roof on the offense with the, that change. The batter should be more strict on the, on getting in the box faster. There's no excuse for, you know, stepping out for like 10 seconds. You're in the box. You should stay in the box unless you have an injury or something. Stay in the box, put one foot out like the old days. That's it. The problem with baseball is the more offense, it's the longer the game. Yeah. And it's just the opposite. It doesn't matter if you have a clock in a hockey or a basketball or football, whatever it is, the game ends when it ends. I do like the rule. I do like the rule of the shift, taking that shift away. That was so sucky. I mean, four outfielders and I agree. It was always so frustrated with big poppy would, you know, rip one to, you know, the, the whole and there's a, there's the guy in right field. There's four players in his vicinity. But that means more offense. You know, I'd like to see, you know, they tightened up the strike zone. I'd like to see a wider strike zone. How about the Bruins? Notice the Bruins jersey in the background here. I got my Bruins hat in the background here. Well, those Bruins, you think they peaked early this year. You didn't have to go all the way. They made a run. I mean, they're good. But, you know, it's the jinks, right? Anybody wins the President's Cup, which had just clinched last night in overtime. They just, they never win the cup. They always play about the first or second round. Yeah. Remember the Patriots were undefeated that year and the Giants, the big catch on the helmet catch, you know, that, that season went up in smoke. So, you know, I always get nervous if you're peeking, if you're not peeking in the playoffs or, or you're the favorite team, unless you're absolutely rolling over everybody. But I think that they made the good trades. I mean, look at 12 losses. I know. Okay. I mean, unbelievable. And then the big surprise, too, on the West was the Kraken. You know, they had a pretty decent season, 41 and 25. They beat the Bruins at the Garden. I know that's Andy Jassy's team. I know. He's a Rangers fan, by the way. So it's, I always text them whenever the Kraken are playing and Bruins, I'm like, are you a Ranger for the Rangers or the Kraken? That's an easy choice when you're an owner. Exactly. Yeah. It's like me. I mean, I mean, I, I love hockey. You're a hockey guy, but it doesn't come down to goal tending whenever goal tender gets hot and the playoffs wins. It's absolutely the case. Goal tender makes the difference. Absolutely. All right, Dave. So we got, we're cranking through. Let's take a break and come back that next segment after the short promotion. From about RSA conference that we were running. Right. We'll be right back. Hello run from April 24th, April 27th, the global cybersecurity community will gather at RSA conference 2023 on the agenda is arming you with the best practices and state of the art solutions 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, key notes, skill building experiences and more. Don't miss the chance to be stronger together. Visit rsaconference.com slash the cube 23 to learn more and register and tell them John and Dave sent you rsaconference.com slash the cube 23. Let's get into the next block. I'll say we hit the hard news, AI madness, Trump indictment, people going crazy. We've talked about the crypto winter and how that we see that happening. Let's talk about our wheelhouse, which is enterprise. We're seeing a ton of enterprise action. You wrote a killer post two weeks ago now about Databricks and their opportunity. They've since launched Dolly, which is a chat GPT. They're all over the AI, just Sir Ali on a panel. I hear Databricks is doing extremely well financially. You think they got some potential headwinds if they don't make the right moves? I thought your piece was phenomenal. Everyone's talking about it, except for Databricks. No one from Databricks called me up at all, but it's been high traffic, high discussion. You hit a nerve there with the Databricks story. I think if you look at Databricks portfolio, they've got people coming after them from all angles. As you well know, Spark changed the whole Hadoop landscape and they bet their business on Spark. Now there's new trends occurring, whether it's semantic layers, whether it's generative models that could threaten them. I feel as though that they've got enough momentum and enough smarts that they can make the right, whether it's M&A or rewriting their platform, et cetera, that they're going to do very well. I know George Gilbert is less sanguine than I am, but I'll tell you this, John, the data from the ETR data, Databricks is really, really strong right now. And then last week, we wrote which tech firms are most exposed to the banking crisis. And I'll tell you, here's my list. Splunk came out as the most exposed from a negative standpoint, Zoom, DocuSign, Dynatrace, SailPoint, Informatica, and Qualis were jumped off the chart. Workday and Databricks from a positive standpoint, it's like what banking crisis? And Databricks in particular, huge momentum inside of financial services. And my thinking is, financial services companies are more sophisticated. Databricks appeals to more sophisticated companies that want to do heavy data science. And so they have an appetite for that. I was just shocked at the momentum they have there. And everything suggested in the field, they've got tremendous momentum. Remember, they were relying on Microsoft for their go-to-market early on. And then Microsoft has kind of shifted to some of their own tooling. And I thought Ovali was brilliant because that's one of the threats to Databricks is their AI tool chain could get disrupted by generative AI. So they're like, hey, we got generative AI, we're going to open source it. That was good move by them. Well, I got to tell you, it was a great story. And what got me focused on was one's a private company, Databricks, one, the other company, Snowflake is public. Snowflake is out in the open. They're at the top of the charts on enterprise value of next 12 months revenue, 14.7X. And then you've got Cloudflare, obviously kicking ass. Datadog service, now MongoDB, CrowdStrike, still in the top 10 doing well. These business models are interesting. So Databricks is private. So we don't know the valuation. We don't know some of their metrics. What's your sense? Because I've been digging at this for over two weeks and around Databricks' numbers, talking to everyone I can, trying to get some inside information. And what I've discovered, again, my synthesis, my dots connecting, is that Databricks is doing extremely well day financially. And what's your, what are you reading? So the topic of today's breaking analysis, which we'll publish tomorrow, was I had a hedge fund manager on and she had the premise that, look, she's been buying semis. And semis have been rocking lately, you know, year to date they're up and video is up like 90%. AMDs up. The semiconductor indices are all up. But enterprise software is not. Snowflake's down, you know, significantly. Zscalers down, although some cyber companies like CrowdStrike and Palo Alto are doing pretty well, but there's a real divergence between semiconductors and enterprise software. And so that can't be overlooked. You got to start saying, are semiconductors a leading indicator? Now, as it relates to Snowflake and Databricks, she shared some data from Battery Ventures. You got the cloud. This is calendar year 23 growth. You got the cloud providers collectively growing at 20%. I got them at 21%. So that maps Snowflake. This is calendar year 23. Snowflake 40%, CloudFlare 37, CrowdStrike 34, you know, kind of down the list. The aggregate Mongo 16, the aggregate average of all those kind of cloud companies, enterprise software companies, 28%. So well down from what we thought in the pandemic. So if Snowflake's growing at 40% in the calendar year, I would guess, and there, you know, I would guess that Databricks is growing, you know, significantly faster than that because they're smaller. They're probably half the size of Snowflake. So they are kicking ass. What's the market cap? What's the market cap of Snowflake right now? I want to say 30 billion. Let me see. 30, 40 billion. Let me see here. 50 billion. 50 billion. 50 billion. I mean, Databricks has got upside, even though if they reset their, I think their last five years was 30 something billion. Yeah, it was. And so if this is, say, hypothetically, that they cut that down to, say, 20 billion, picking a number, 25 billion. 20 to 25 billion. If they do any additional financing that's private, they have huge upside if Snowflake's at the proxy. If their numbers are the same as Snowflake, which I think they are in terms of like momentum. You know, as you know, you know, the margin hits are going to be, or the free cash flow is not the real metric. It's enterprise value over the next 12 months is the top metric right now. So that's companies. So here's the question. Databricks has got upside. They just announced Dolly. Let's discuss the angle of AI impact, Dave, to margins. How does the SaaS business model impact these companies? Because, you know, there's going to be companies that Databricks is Snowflake. And the way Ollie's talking publicly, he's got that little smirk. He's got that, you know, smirk where he's like, you know, something we don't. And I think it's machine learning. I think they got a lot of action going on there. That's my guess. Again, no outside information. Just my assumption. If they got AI as a tailwind to help their margins, they could be freaking profitable. How do you see that happening? Well, first of all, I think that people are going to, most companies are going to acquire by AI through their SaaS vendor. That's the most logical way to get it. So I think if you answer your question, those SaaS companies that can take advantage of AI are going to be in a better position. I wrote recently about RPA. Is RPA going to be, you know, consumed by generative AI? And I think the answer is some will, the point tools will. And then, you know, can a UI path actually turn generative AI into a tailwind? You know, their CEO, Daniel Diney, said, hey, we've been working on generative AI and large language models for a long, long time. And they're going to actually simplify the adoption of our products. And that means that our customers are going to be able to drive more productivity. And so it's that, you know, work backwards from the customer. As the customer applies AI and has an ROI on their business, that's going to be, that's going to drag along those companies, those technology companies that are best positioned to provide that. Yeah, I think the SaaS business model is going to continue to thrive. And I think specifically why I like the AI injection is in this capital markets where there's not a lot of IPOs going on and or, you know, big financing, unless you're like Databricks or something like that. The free cash flow is not a big metric because they are funded. But under squeeze like this, where the capital markets are tight, you got to do more with less the classic, you know, make, you know, the memos that go around. Oh yeah, runway. If you can get AI to help generate higher margins and free cash flow, you're basically eliminating those key parts that are costly, right? So I think AI might actually turbocharge the SaaS businesses by margin expansion and free cash flow, which is typically mature out later out in the, in the execution of a startup going public. I mean, they throw losses for as long as they can, but they got plenty of capital. That is, that is a great opportunity. If I'm a CEO of a SaaS company, I'm refactoring with AI immediately. Oh yeah. Oh, and I think the smart ones are. And I do, by the way, I do think free cash flow matters a lot. And I think there are companies that have inherent profitability are turning the knob so that they can show free cash flow. And I would agree with you. I think that SaaS is the way that a lot of companies are going to consume AI. And I do think, I do think there is this- By the way, Snowflake's free cash flow margins 25% most are negative. Yes, right. And remember, their last quarter is, seasonality is very high for free cash flow. So they'll probably end up being, you know, I don't know, I don't know, forget the exact numbers. I have to look it up, but it's, you know, single digit kind of free cash flow, or maybe they, maybe even a little bit higher, but it's not as high as 25%, but last quarter was. I do think that there's, there's a lot to be said for companies that are doing this, that the semantic layer and the next generation of data apps. So we're moving from a world that is, and I, let's talk about this notion that it's very app centric where all the data lives inside of the app. Right now, that's the SaaS. And it's locked inside of that. It was on a call with the CIO yesterday. And she was saying, that's the one big thing that sort of has this concern is that we've got all our data lives inside of the apps and we're, you know, the SaaS apps. So we got to bring it back into our data repository. We have to really care, be careful about our IP, but we're shifting to a world that's data centric, meaning that the data doesn't sit inside of the logic. The logic sits inside of the data. So you have companies like DBT Labs that are API-ifying the metrics inside of a data warehouse. You've got companies like AtScale, Chris Lynch's company, that are, that built out over the last decade, this semantic layer, which is really hard to do. And that's going to be sort of the next big trend in data analytics and then beyond into data apps. Now, I can't really say when that's going to have an impact, but I think it's very clear that what companies want is they want, they want like Uber. They want a digital representation of their business. Drivers, riders, destinations, ETAs, those are all data elements that have coherence and they can talk to each other. You can't do that in business today. So essentially a digital twin of your business, people, process, places, things that you can then accelerate and monetize. Yeah. And I think having that data unlocked is critical. The thing that gets my attention on the LLM's large language models and all the foundational models is the applications are coming on. It's very consumer-like. And that's what we saw in the conversation around the plug-in for OpenAI is that the online population of AI users is going to exponentially grow. So think about that for a minute. I mean, look at just the fact that ChatGPT's out there, it gives everyone the awareness that it's for them. So it's a consumer dynamic, what it is. But developers are now just onboarding. So you're seeing a massive Texan shovels business for the Gold Rush that is AI around tooling, data unlocking, as you're pointing out, the semantic layer. You're seeing new tools for multimodal data, different types of data working together. This is like a significant mind shift from classic development. So I think there's a movement going on where you're going to see massive IaaS, pass-like things around how to stand up infrastructure and platforms for managing this AI stuff. So I think that's going to be an opportunity, Dave. And the question is, is that what does that mean for the momentum that was just six months ago or more a year ago, the data mesh layer? So the question is, it's like, okay, what happens? Because we had momentum with the data mesh, you got the edge that you're pointing out, data within data, it makes sense at the edge, you got massive compute, which by the way is allowing all these developers to do all this large language models, AI stuff. So it's like we're coming into a science project of things colliding together at the same time, different data sets, large data sets, small data sets, open source, proprietary, GPU, bolt-on abstraction layer. I mean, it's pretty intense. Yeah. And so we are seeing this massive distributed system build out. We're democratizing data. AI is accelerate that data democratization. What does that mean? It means get the data in the hands of a business person so that he or she doesn't have to wait days, weeks, months, whatever to get data out of the data pipeline. And so this is where the kind of the super cloud, if you will, comes in. And AI is playing a huge role in that. So you need a couple of things there. There's tech, a lot of tech obviously, but two big things are self-serve infrastructure. And you've pointed out data infrastructure is one of the hottest things going right now. And then you have to, if you're going to distribute data, you have to have governance. You have to have automated computational governance. And that's where AI is going to play a huge role in making sure that the person who has access to the data is the right person that if you're going to share data that it's governed and it's secure, that's a very challenging problem when you talk about a mesh. And then the next question is, okay, business model. Open AI has challenged already on this. Actually, we predicted on theCUBE, I forget whether it was our first podcast, we predicted that Google wouldn't launch their thing. If they did, it would be a separate company because of the backlash, which we're already seeing the backlash happen. But that being said, if people go to the AI day, what happens to that data layer? What's the business model? Should they charge for it? If it's a revolution, are you too commercially minded for it? Is it a social revolution? What's the business model scale? Do you test it out first, make it free? I mean, they're charging chat GPT three plus 20 bucks a month, and then you got to be waitlisted for the API on four. So is it free? And if Google offers it for free, you got two ends of the spectrum, right? Look at Snowflake. Look at Snowflake. Snowflake is like, they don't make, they don't apologize for it. You got to come in, you want all these benefits, you want all this value, you got to come into our world, that's, sorry, this is, you got to come into our house. And once you're here, life will get better for you, but you got to come in here. And so, okay, we'll extend and support open source tooling, but they sell value. Databricks kind of at the other end of the spectrum, which is, Hey, we're going to open source it. And, you know, we're going to provide a managed service that allow you to get the most value out of that open source capability. So two different ends of the spectrum, I think they both can succeed. I think Google, if I was Google, I would, and if I was advising Sundar, so anyone listening that works for Google, please pass this up to Sundar. Free. Match, match, open API, blow to blow, feature for feature, free. Because Google's free. I mean, they have, they have the scale. And they can afford it. And that would be the game changer. I think the one thing that could hurt open AI is they're charging. And this is a horizontally scalable use case. I would say put it in the hands of everybody and get the data into your cloud, your app and make it a super app, right? And not be trying to be in the web. Because they remember they strip mined the web. So they, they stole from the web. Oh, stole. They borrow. They're using the web. And now they're charging for it. I don't think that connects with the audience, David. Like, you know, think about that. Open AI borrowed or crawled or whatever word you want to call the web for their large language model. And now they're charging for it. Yeah. Well, it's true, but I pay for it. Do you? I do. Yeah, I like it. I use it every day. I do too. I just did a demo. It takes our really high quality content that we build in some of these video interviews, you know, snippets of them, feed it in, it creates great tweets, storms, creates great questions. It answers a lot of questions. It's just such a scalable, heavy lifting tool for us with content. And we're seeing that with podcasts. I mean, it's going to be a media renaissance. You're going to see, you're going to see a lot of things like break and new things emerge on media. The media cloud will be that we've been doing will be a big deal. And I think going to be new players coming in. It's going to be fun. I use it for our, you know, within our media cloud. When I have a guest on and we're ripping and we're all over the place and I get a transcript, I'm like, oh, I got to curate this transcript. I just feed it at the Jet CPT. I'm going to give you the top five points of this conversation. Boom. And bullets. Bang. I get it back. And then I edited it because sometimes chat CPT doesn't get it right. But I know I was doing the interview and it's just, it cuts my time in half, maybe two thirds. I take your breaking analysis, which by the way, I love and they're big long reads. Really? Yeah. I mean, you should, we could charge, you should charge for that. I mean, and Gartner would charge like a hundred grand per company for that content. I feed it at the chat CPT and it gives me a summary. Yeah. Like modern data platform issues by Dave Vellante. So you're, I mean, it's really going to get in this world of, you know, who's contents, who the strip mining game is coming. And you're going to see a lot of bad actors out there, strip mining content producers who are producing proprietary intellectual property. And the question is, where does it go? The web had a nice contract. It's free content and you can choose to put a gate up. I think it should all be free. That's my rant. Yeah. Interesting. All right. Well, are we in the rant section? We're going to, we got to get the clock ticking. We've got a few minutes left, Dave. So let's get the rants on. So what's your rant for the week? So I got the UK competition authority is moving forward with an in-depth probe of the $61 billion Broadcom VDM weird deal. And, you know, look, the competition authority in the UK that previously done this, and they've, they've allowed things to go through, they gave Broadcom five days to respond. It was like, what, five days? How are you going to respond five days for a $61 billion acquisition? They probably hit them up in the week. I mean, it's just ridiculous. This is an example of more government meddling. And I'm just curious to see if the US is going to pile on like they did with the arm in Nvidia, which they, the US basically provided no support for that deal, which was, to me, just a ridiculously lost opportunity. And I think actually the opposite is happening as a result of the Broadcom announcement that they're going to acquire a VMware. It's creating more competition because it's been a tailwind for Red Hat Nutanix because customers saying, okay, I'm just going to explore some alternatives. Let me go talk to Red Hat, you know, Nutanix said, hey, we got some migration tools. But at the end of the day, that what's going to happen when Broadcom acquires VMware is they're going to take that complicated portfolio, which has been kept alive with M&A and, you know, have forced integration and blah, blah, blah. And they're going to say, okay, we're going to simplify it. And we're going to focus on those things that matter most. We're an engineering company and we're going to put engineering resources on those things. And look, if they raise prices, you know, or not, whatever, if the customer, if the business case for that customer is to move, the customer is going to move. It's Broadcom's job to make sure that the business case of moving is less attractive than the business case is staying. And so, I mean, Broadcom Broadcom is getting bamboozled here by the EU. EU is stepping over there out of their lane. I'll tell you why I don't like it. One is it's the classic thing. You look at anyone, you'll find a crime. That's the way if you stare hard enough at something, you'll have a crime. They have a history. The EU has a history of doing this. In 2001, the EU blocked the GE Honeywell merger. It was a $42 billion merger. You factor in inflation, it's about the same kind of number, kind of scope. They made shit up. They had to do all kinds of gyrations, sell this division, do this all under the guise that it might hurt competition. So that was Jack Wells when he was in his prime and Honeywell, they ended up not doing the deal. So they essentially dragged them through the mud, the clock expired. It's like, ah, this is, you know, I'm not going to do all these things. And they ended up killing the deal. That was the deal killer for that, for that merger. So I see the same movie play taking place here. Broadcom is not going to have a monopoly and board competition because the markets change. Look what's happened in the past 100 days. Right. A monopoly in what? In VMware? VMware already has a monopoly in VMware. And you're going to give that to Broadcom because, okay, they have CA. I mean, actually, I would say Broadcom's acquisition of CA, it was good for CA customers, because finally you had somebody actually making some investments in software. Well, there's a chip hoarding game going on right now. So as you know, my rant is that the supply chain blowback is coming. And what you're seeing and what I'm seeing and hearing and Silicon Valley and around the world is all these people, car companies, the Cisco's of the world, they're bow guarding the chips, Dave. They're like, yeah, they want them. And they're placing orders because they got screwed on the last turn. So that's kind of, that's causing all kinds of forecasting problems on the supply. So I think there's going to be a real issue with the supply chain over circulation of content, a product. That's going to actually not be good. So that's like, again, another issue that the EU is going to not understand that there's going to be plenty of opportunity for someone to step in and compete with Broadcom and VMware. So, and yet you got all kinds of other competition. So EU is nonsense, in my opinion. Go ahead. Sorry. My rant, Dave, is quickly, because we don't have a time left, is the TikTok thing. I still can't stop thinking about TikTok. But you're seeing a downfall with Twitch a little bit right now. People are leaving. The last founder left, Emma Smear, would be hearing that the leadership there from Amazon was, you know, there's rumors going around that it's not that great. Creators are leaving. It's still massive numbers. They have Twitch. They got e-commerce at Amazon. I think Amazon could take over TikTok better than Oracle. So my rant is I'm really nervous around the bill that came out around regulating and cybersecurity, cyber surveillance. And I think that is a huge problem that we need to wake up to. We want to be free and have liberty, like the United States of America wants. You can't have surveillance tape because that's China. So that's my rant. You know, I'm always on that and I was thinking about it. So I'm a hawk when it comes to that stuff. Yeah, I'm well said, John. I'm right there with you. All right, Dave, have a great weekend. And the folks watching, we're going to be at Clickworld April 18th. I'm going to be in Amsterdam in the EU, but I don't get stopped at the border for that comment. That's the guy. He's got a Chinese passport too in there. And then the RSA conference is going to be a bit massive. So we got two big events that I'm excited for, Dave, the cloud native conference in Amsterdam. It's the European version of North America is going to be later in the year. And it's going to be very interesting to see the AI impact to that ecosystem. Cause I'm talking, looking up some, some of the interviews I'm going to be doing there. And the companies involved have an opportunity to use AI. And we're seeing use cases. And then I'll see security use cases is data. So that's another opportunity with AI. So again, I just say I'm so bullish that what we know of today and look at the last 100 days is that's a proxy for any tell sign is that the accelerated pace of change starting 100 days ago is already moving. The wave is here. And we're going to see who's going to ride it. I mean, I'm watching everybody. I'm saying people fumble. So people are AI washing, but some people are digging in. So we're going to have this going to be an ongoing report for us, Dave, AI madness. So we'll keep on that. AI madness in March, March madness. All right, Dave, thanks for your time. I know it's late on the East coast. This is Friday. Always a pleasure, John. Great stuff. Episode six is in the books. Thanks for watching. Let us know what you think. And check us out online. I'm at at Furrier on Twitter. All handles are open on LinkedIn. What's up? Dave Vellante. It's Dave. Thanks for listening.