 Hey everyone, welcome to the Cube pod episode 29 at John Furrier with Dave Vellante. I am on the road I'm in North Carolina I'm visiting my daughter got my got the wear and the gear here episode 29 busy week It's we had so much going on. I was in Boston I was in Vegas with you for the sasic floor Which was our first event with them and went real extremely well I'm now here. You're there at a busy Pog was as fast as we can Unbelievable week Dave, I got to tell you we got to talk about that hack to John in Vegas the MGM hack That's hopefully you're gonna talk about that but when we stayed at the Arias We'd love to go there. I have some inside hallway conversations there, too But let me just I mean just this was probably one of the biggest news weeks and busy activity weeks I mean Apple launched an iPhone feels like a month ago, but it was just earlier in the week the arm IPO Was hyped to the Over-the-moon hyped. Okay, but they landed they got they landed their IPO up 24th of the first day Everyone was expecting the IPOs maybe not to work But everyone's now asking our IPOs back arms IPO. We worked a lot of people thought it was overvalued Databricks as a result just got their mega funding series. I Dave moving down the alphabet for that private company You know series a start up now. They're on series I in the alphabet 43 billion dollar valuation They're prepping to go to public with the AI hype and this AI seems to be this next generation platform for the technology industry Instacart filed an IPO. Who was next? Will there be a bull rush? Into the IPO market. That's the big thing some people saying that arms overhypes got rain of its things So some were saying and there's nothing to do with AI meanwhile arms pumping AI into the into the thing Ah Hello facial recognition and an iPhone The Google trial is happening with the Department of Justice That's pretty big spectacle massive in itself the MGM ransomware hack Caesar's got hacked to Dave They paid up big 15 million. They're a antipaid Caesar's was socially engineered On an outsourced IT support vendor again more technical stuff to dig into Larry Ellison has never been to Redmond and Microsoft's campus ever in his history This week for the time again the iPhone's launched unity changes their pricing with a game engine Total change over they want to charge for installs. We track hashing course with their big change over This is where people get head fake Tracking installs is messy. This is a huge implications unity engine is really powerful for developers for the metaverse for spatial VR Apple's headsets for instance vision are all based upon this kind of technology So they're changing the game on structure. It's gonna have a huge implications for developers, especially in in graphics and AI as well Instacart file an IPO auto workers are striking Hollywood people are striking Dave. It's unbelievable week Every week John is unbelievable. I love it. Well, let's get in the top story I mean, I couldn't stop seeing and hearing all the the hype and then CNBC doing victory dances all week What on our rate the market is yeah on arm and up an arm did good. I mean, they did match the numbers, right? They came out at 51 share and closed off and they were up 24 percent. So over 60 billion dollar valuation I thought the action was interesting John because I mean, I've I got the stack you saw it in in my office this week The the F1 which is a foreign registration before they did the S1. I've been plowing through the F1 it's like this thick and It's interesting. I mean arms got like nearly a hundred percent gross margin But the but that's not growing but it's kind of anomalous and so, you know I've been very very positive on arm the whole ecosystem and I think I Think there's real reason to be positive. You know, it's just a little little back history. Remember Softbank bought arm for I don't want high 30s 38 billion something like that They were going to sell it or 30 billion ish low 30s They were going to sell it to Nvidia for I think 43 billion The UK or you and us basically killed that deal That would have been awesome for Nvidia Before the whole Nvidia trillion dollar baby hype And so then now our soft bank is floating 10 percent of arm And it's at like there was around originally a 50 or so billion dollar valuation So, okay, so they're making money in the deal, but it's only 10 percent that they're floating So they've got upside but they've also got downside And then the stock was only up around five percent all day and then right toward the close It jumped up 24 percent and it was up again Yesterday and it's up. You know, it's basically flat today kind of unched But that you know, so now it's got a 66 billion dollar market cap Okay, is that overpriced first of all, I will say this you don't ever buy stocks At the IPO the market's going to tank and all these overhyped stocks You'll have a better chance to buy them whether it's snowflake when data bricks comes out alibaba when it came out Snap facebook all of them they go lower So you're going to have better opportunities to buy you usually get screwed if you buy in the first day But I would say that long term I think the story that nobody's talking about here, john is the impact on intel Everybody's talking about arm and ai and and you know, it can they compete with Nvidia? It's really not it and not ai. It's all bullshit. I mean Nvidia is based on arm Okay, so how is arm not participating in ai apple You know the new iphone's it's it's arm based, you know, you you you look at the progression of the aid ship What do we have a 17 now? They're down a three nanometer at tsmc So of course it's ai ai inferencing at the edge arm is going to dominate that and my point though on intel is Arm is going to come into it is coming into the enterprise so many people like well, it's not really in the enterprise Yes, it is. It's in the form of Nvidia. It's in the form of aws Google is doing arm based stuff microsoft is doing arm based stuff and arm is going to continue to grab More and more share in the enterprise because innovation happens in consumer markets And then it seeps in to the enterprise markets with the better economic value lower power Higher performance when you combine everything lower cost arm is a dominant platform Now whether or not it's going to be a dominant business because if it's business model We can have that conversation, but it is changing the game And destroying intel's monopoly I mean, that's a great statement. That's really, um, that's not even over the top I think it's legit a good analysis there and I would say that you brought up the issue of the business model This is what people I think I'm just don't understand I want you to get give me your take is you a good read on this Arm and all those things you mentioned amazon in the form of Nvidia great arm. It's not making the chips Okay, per se. Okay. And so arm Is pervasive the other point you made there was the consumer and enterprise Kind of in relationship power dynamic between which market leads and follows The enterprise market is becoming more and more agile and speed Speed oriented like consumer in other words the consumer aspect of leading and then lagging the enterprise Used to be maybe five years Dave back in the go back 20 years during the web, right? Everything was consumer first Now you're seeing with developers such in the front lines um a b To d to c meaning business to developer to consumer the apps themselves In the enterprise a very consumer like we would talk about consumerization of it For over a decade and a half if not two decades The consumerization of it is beyond that now it's consumerization of enterprise so I think the enterprise market and The consumer market relative to technology is converging That's why so many new people are coming into the enterprise of which we had an unfettered access to cover We didn't have a lot of competition in the enterprise so it can angle the cube So you start to see more action It's sexy to be in there. It's cool to be in the enterprise. Why because the consumer Side of that isn't really about business, but the developers. It's a not b to b or b to c It's b to d to c b to d to b to c so business to developer the developers are driving all the chain So so that's a great point and I want to unpack that another podcast with you Let's talk about arm arm relates directly to the developer because the apps being built right now in this new ai era Is a platform shift and every inflection point has a platform that changes the application framework and the infrastructure underlying infrastructure web Changed how software was built the web html mobile form factor app store mobile devices that platform changed apps now ai is that third platform That changes and in a good way how the apps are built So again, this is why everyone's going crazy over ai. It's not so much ai washing. It's the fact that you have to live on the ai platform To be relevant and for the applications the functionality is going to be there. Everyone will have it just like everyone had the web So when the web came out olives, it's over a height No one's going to have food deliverance in their house instant carts going publicly it happened So the web actually happened everything they said would happen happened people trade online They do business online. They date online. They do things online. They're online So everything is online the connectivity happened that applications all moved over You know first web based mobile based now ai the third transformation technology. This is huge That's why I think people don't understand That arm actually is inherently ai because of that now That's that's kind of like my my piece of it the business models where people get confused explain to people how arm why arms important and how they make money because Who makes the chips? It's not like you say intel. Intel has a fab. They make chips Yeah, so arms different explain the nuance and then and how that could hurt the price or change the price on the upside So arm basically is a framework that is that it licenses and its software allows customers to Take off the shelf arm cpu people don't realize they make gpu's They make npu's the neural processing unit and you can take those off the shelf sort of standard design the design framework And then you can design your own chips around it You can you can just take the arms spec as it is or to your point about developers You can program the components. So the example I like to use A couple is but the one of my favorites is tesla Who basically takes the standard but they? Customize the neural processing unit. That's how they got rid of lidar That's how they're able to use very low-cost cameras on their car and cut out, you know Thousands of dollars of cost By programming the neural processing unit. That's their ip so tesla Owns that ip okay, and so arm gets paid For the the license and the the value of arm is when tesla or apple or aws with the anapurna when they design a chip And then they give it to tsmc or samsung to manufacture Those specifications are locked and loaded So the time it takes to get to tape out when you can actually have a chip That's you know good yield is much compressed and arm's latest announcement compressed that even further. So historically In the x86 world, it's you know four or five years to get to a new design arm Took that down to 18 months and now they're taking it down to a year because of the tight specifications that you license from arm So arm is a they're pure licensing company. That's why their gross margins are nearly 100 percent, but then they leave the value add for their ecosystem Okay, and so that in a way negatively affects Arms opportunity because they're leaving so much meat in the bone for the ecosystem But it becomes a dominant business model where arm wafer volumes completely dwarf Those of x86 and as we've talked about before on qpod Volume and semiconductor is everything if you can't double your cumulative volumes You can't lower your cost as fast Though the the company that's on that doubling of all cumulative volume curve, which is the arm ecosystem now Has better fab costs, you know faster chip design. So tsmc benefits Samsung, you know, which is number two benefits and companies like apple and tesla and aws and others Get to market faster and meanwhile intel's fighting an in-front war fabs with tsmc They're getting, you know beat by amd They're getting nailed by nvidia. That's like, you know, the russian's taking a lot of shrapnel That can a lot of a lot of shrapnel. Yeah, and I know a lot of times people Think they could make it sound like i'm rooting against intel. Of course not. I mean, it's good for america Good for intel is good for america, but they're just They're just falling further behind They could be a dinosaur. I mean the arm thing is interesting. I mean, I think you're right on the ai I think that people don't understand that ai is on devices and so if you look at arm, they're everywhere I mean, they're about 75 percent or 70 percent On of all people in the world use arm technology in some sort of device Okay, and you mentioned tesla We actually had an exclusive interview on silicon angle dipty of a shani senior vice president And general manager arms automotive line of business He said the ipo will enable arm to take a greater role in ai work clothes, especially in the execution that models That and that require edge support rather than data centers in the cloud They think the edge is going to be huge and that's what that was your point in your analysis So I think that's a big thing and then he had a comment We were ai before ai was cool and that's what everyone says but but it's interesting. I think but it's true It's true The facial recognition uses the gpu the arm gpu and apple That's ai All right, I would call that ai. I mean, it's ai Yeah, well what when asked we put that question to him about nvidia. You brought up nvidia He said this is his quote. He said despite nvidia's leadership in ai. Thanks was our powerful gpu's graphical puzzle genius ai also requires cpu units like arm designs for preprocessing data So that accelerates ai within the gpu necessary Because of the low power again your point about the iphone and these devices the low power devices They they had a stronghold early on and low power devices That's going to be massive that means things like smaller devices will have cameras in them And we'll be able to do shit with computer vision and then you know, you know We'll get to the unity thing but all kinds of things are going on in devices with preprocessing and then Also bolt on hardware acceleration opportunities at the edge. So, you know, everyone talks about data being in the ai piece of the ai Well, you can't move data around dave you move You will compute and workloads to data. So the relationship between edge central core computing architectures arms perfectly positioned to kind of orchestrate That and manage the resource whether it's a gpu or other component So connectivity is the new compute Right, and we're going to talk about this at super computing event We're going to go to engender, which is a show that should is usually a canary in the coal mine for all the big trends So that should be very interesting. Well, I or and I did a chart You know, actually it was a while ago It basically looked at percent of spending on the vertical axis and time was the horizontal axis and he's basically said today This is 2020 that most of the ai is is is modeling that's done in the data center For things like ad tech and pricing and fraud detection and you know supply chains, whatever and and very low was In terms of the the spending Were was things like, you know, Alexa and smartphones and facial recognition and we had that that flipping in terms of percent spending Where still going to be a lot of modeling done in the cloud But the vast majority of the spend By we had the end of the decade and it's probably going to be even to be a more accelerated It's like level three plus autonomous driving traffic optimization AR VR power grid industry 4.0 smart factories intelligent robots All that stuff is going to be Low power low cost High performance and I it's going to be arm based dominant because they're way way ahead of everybody people talk about You know the the all in guys well risk five is there so it's chumot hates anything that he didn't You know make a ton of money on so he'll he'll shit all over it But you know it's been you know to his credit He was first in crypto early in facebook early in specs and made a lot of money But but he said oh arm is worth only 10 million which is nonsense Arm is going to dominate that arm architectures are going to dominate that the future of ai inferencing at the edge And to me the reason I love arm is that ecosystem value Add for the apples and the teslas and the amazons of the world Is enormous and it completely changes the game on the reliance of a single Monopoly which has been intel for all these years You know we'll see what kind of competition in video gets and how they respond to the inferencing at the edge It's nice that I like the all-in reference to chumot Those guys are doing great at all and they had that by the way this week they had their big event They such a great follow and they have the big president's candidates. I'm happy to see jason do well over there But we we're too small for him now to geek but he I'm still friends Oh, I love their shit. I mean I It's better than like to meet the press nonsense, you know He was chumot was wrong about arm though and again chumot is very dogmatic thinker And he's very much will die on hills like he's he's one of those people who likes to he's bold He's a bold and guy he's him He's sometimes a little bit brazen some people say but you know, he was wrong about arm and he wouldn't walk it back And that's why you know, that's just his style. I mean chumot. It's sometimes you know He's better be lucky than good. Well, he did say he he does say he loves Like out of the money long out of the money options. That's not arm, you know, that's that's v veck for President okay, that's how those are the best he likes to make it No, well, he chumot got killed on spax although probably got his money out. No, he made tons of dough on spax john He got out He got well he got out but a lot of people lost so he got hammered by the media on that Yeah, we got hammered by the media, but he made a shitload of money So yeah, but he lost he lost a lot of money for other people. That's not the investment game Yeah, well he pocketed a lot of dough It's like Dave Dave. I made a lot of money, but you know, sorry to fuck you over. Well, that's basically his his attitude. It's like, hey I got in early. I made a lot of money. What do you want from me? That's not a that's not a long game view of being an investor Well, you know, as he says i'm in the arena trying So let's talk about talking about trying the arena. Let's talk about this google doj trial So it's an actual trial challenging google's dominance in search, which I mean they got a case Dave Here's my ranch. Get into my ranch. Go ahead. Okay. They got a 90 80 something percent market share. They got google Gmail there's so much cross-pollination Search is huge revenue for them. It's their only big thing It's like the product that just keeps gift that keeps giving so, you know, I mean, I'm not for the trial But like they got a case, you know, how people can break into the search business Like how does google say they have competition in search? Really? Um, you know, they do. I mean, I've always said search is not as relevant as it used to be But they're they're on all the desktops, right? They remember when google back in the day killed the whole toolbar game You know, we had a business my brother joe and I Had a business around that and he ended up running it and he had great They should reach the toolbars back in the day you download a toolbar to help you navigate and type words in and before google Really was a good search engine and direct navigation They killed all those toolbars. You know why they didn't want anyone installing on their browser So even though they let chrome extensions exist google controls all the the redirects For internet traffic. So they they lock that down. So that's monopoly move. That's a monopoly move, Dave I mean, I mean, okay Okay, having Okay So let's talk about this. So having a monopoly in and of itself Is not illegal. Do you agree? I don't know even that what that means like the very fact I don't even know what i'm agreeing if you okay, if you if you've achieved a legal scholar Okay, but but I'm not either but if but it's not against the law To have a monopoly. It's against the law to use monopolistic power in a way That is anti competitive. So for example, if you're bundling Or if you're giving away shit for free in order to keep it to kill a competitor That's illegal. And so what the doj is arguing is that by paying 30 billion dollars a year Which I think 20 billion of that goes to apple and other Of companies that that to have google search embedded as the default That that is an illegal move So I would say Okay, here's what I would love to see happen john. I'd love to see google say, okay We won't spend 30 billion dollars anymore. We'll just drop that to our bottom line Okay, and you know what would happen if they weren't the default browser They they they'd probably in 80 percent of the cases be returned To the default browser So they probably wouldn't they probably maybe would lose 10 billion But they dropped 30 billion to the bottom line. I bet you would be a 20 billion dollar gain for them You know, I'm sure they've done the math where that's not the case But but I bet you I bet you it doesn't hurt them I bet you they make more money if the doj wins this case. I think it's bullshit my opinion Okay Well, I mean, I've always liked to watch the spectacle of it again It's lost in in in the hype this week again. It was really overshadowed by arm It's really overshadowed by all the other news. So it's really amazing week You know, um, like the big story that we were living was the mgm ransomware attack attack So we had an event we had an event in vegas and and our guys were there lining up MGM the entire casino was was taken over shut down on by ransom ransomware some of those held hostage and and I heard that they were going through the slots machines And that almost got there. So essentially the hacker group an english-speaking hacker group took over Through social engineering the entire computer system of mgm. MGM is not one property. It's like a lot of properties It's the aria. It's the cosmo. It's the mgm grand It's a bunch of those hotels. They're all kind of networked in through that consolidation of the corporate that they have So it's massive we were staying at the aria monday night tuesday night and I got it just in time. So they had gotten their systems up mgm didn't pay seizures got hit They just paid So this is the case where mgm said we're not going to pay the ransom Can you imagine NFL kicked off on sunday how much they lost in the sports book how much gambling they lost brutal Did they even have then people were waiting in line to get in and checking it went in manually The elevators weren't working. I mean Dave it was like a doomsday scenario. I mean q imagine I mean this this goes goes to show you I mean we're doing this del this del resilience security thing Road to rigid data resilience which is about data back on recovery all that good stuff that del has This is exactly what we've been talking about in the cube. There's so many scenes In the in the system now for hackers and with the human element Remember we talk about human plus ai is better than ai. Well, guess what the hackers are more effective You did a survey on this weeks ago The I think this is just the beginning of an armageddon of hacks Ransomware is legit. It's happening everywhere and this is just a high protocol casino They're supposed to be bulletproof. Dave. Yeah, it's unbelievable. I know you think that have the best security, right? This should be the top story In my opinion Not all the the fanboys going gushing over the new ipo marker that that's not even open that people want to put Candace open. Oh, it's open go. So you mentioned Actually, I just want to say uh just to close out on the you know, is this mean ipos are back? No, it doesn't It this was not a super hyped situation I mean being up 24 on opening day is not that great, especially when it was so tepid early in the day So I think people are still very very cautious But but on the you've mentioned the navigating the road to cyber resiliency. I interviewed keith bradley Who it was the the head of it at? Nature's fresh about the anatomy of their hack and it was a classic case And you know, he he was able to recover But it was scary and then he realized wow, I got to get my shit together I got a I got a I got to figure out my end-to-end Cyber strategy, you know resilience strategy I need to protect my backup because they're going to go after that So I don't know I haven't dug in and heard what mgm did but I want to describe the situation You got there before I did I got stuck in the tarmac in boston And I was you guys were texting me saying mgm got hacked. So when you check what time did you check in? 637 and what was that like? Was there a big long line? Did it take forever to check in there was no There wasn't a long line They had gotten it was the day before was impacted the two days before actually impacted They got the they got the reservation systems up to the hotel But they couldn't do credit card transactions Right and they still couldn't do it for days later and today I was just seeing it's still not up. Did they escort you to your room? Nope So the day before you got there people were telling me the guys who were got into sass explorer early They had to be escorted to the room because what was happening Is guests were coming in with their key card and the room wasn't somebody else's room So the systems were so fucked up. They couldn't you know, you know map to the new rooms They didn't know which rooms were actually empty. So what they started to do is they would escort the guests to the room To make sure that the room was actually available And so and now by the time I got there it was late. It was like 1 30 in the morning was a huge line to get in And it was only like two or three people at the check in So, you know because they can't hire people, right? They're these hotels are hurting And so they had to physically write down all your credit card information. I was like, oh, wait a minute You know, what are you doing with that piece of paper? And they're like, oh, we're queuing them up and then the manager's going to type them in manually And then they shred them And I was like, okay I was trying to think of which credit card I give, you know what I mean Like which one do I care the least about getting hacked and then she puts the piece of paper on the desk I was like, can you please turn that piece of paper over? What do you mean? I don't want my credit card hanging out somebody could come by and take a picture So so that was a nightmare. Everything was manual But here was the most the wildest thing so the aria is right across the street from the mgm If you've been to vegas the mgm has got the big lion It's all green and neon When I pulled in The cab to the aria the mgms on the right the arias and left mgm was pitch black No neon signs. It could it was there was a few hotel room lights on it like 1 in the 1 30 in the morning It was the weirdest thing I've ever seen out in vegas Yeah, I mean it was bad. I mean it's It's one of those stories day where it doesn't get a lot of attention, but it means a lot and I think that's You know important. It's a lot more important than the is the ipo mark. We're going to get to it in a minute So it's it's a whole nother ball game But the the other thing I wanted to bring up on but wait, wait, you know what you know what the last thing I want to say there is it didn't affect the sass explore conference at all What sass did I mean it did in the sense that When you were setting up that you couldn't check in so the sass explore said hey come on over here We got cocktails. We got champagne. We got swag. We're giving away. So they they had like a pre-party Hey, greet everybody and just like killed time before people could check in And nobody was complaining. So that's a pretty amazing job by the sass folks Well, did you see that this week speaking of events that sales force had their dream force conference in san francisco And someone was funny someone was saying that, you know, I got the all the AI announcements and Someone said there's mark bennie. I've talked about the future of AI next to a bunch of plastic trees Kind of sums up their AI strategy Um, and it was very pejorative in the comment. They think that the AI washing is an all-time high sales force being sales force That's what that was the next tweet. So yeah, I think sales force had a lot of great announcements But people were calling it like the most epic AI wash because it was so good The announcements were just perfect. Oh my god, they're gonna be great The next level of AI they just nailed the messaging Dream force nailed the messaging and they had a great party. They do a great event in terms of Put on a great program. I saw a new cmo of aws regime skill earn. She was at A concert she had some some footage Dave Matthews band was doing Dave Matthews are doing a little show there very intimate So the dream force does this really big event and they spend a lot of money day They do a huge event. They got a huge customer base. I was the big tower in san francisco And here's the here's the ironic thing Okay, again quasi rant here They're leaving san francisco. They're bringing dream force. They're leaving the city Mark bennioff has a building there. He built there. He's a walk there from the musk only He's personal friends with former mayor Gavin Newsom. Some some say good and blind to take over for biden Okay, who he did his fireside chat with so here you got bennioff By the way, bennioff, I think is the godfather to one is Gavin Newsom's kid or vice versa No, guys, they're close and he's leaving the city I mean that is like to me that is like the biggest tell sign That everything that people are talking about san francisco Is true when the guy who pledged millions for the homeless is taking his flagship conference out of san francisco Where's he going? That's that's massive. You're going to vegas. I think he's going to vegas. That's a cost move I mean san francisco is so expensive. You can walk to the sales force tower from musk only the guy the guy's rich No, I know but i'm just save money. It's amazing, but you can walk to the sales force tower from musk only We've done it. We've had shows there All right, cube has been there in the sales force. That is the most ugly. This is the ugliest look for san francisco It's bad because it's basically saying The son of the city is sales force because they're the modern brand their tech brand They make a lot of money. They have a big tower of the tallest building in the city Close to musk only they do their event every year. They shut down the streets for them to pick up their ball and leave to another city Is bad now if that is not an indictment on the current administration in san francisco Nothing else is other than more people dying and more homeless people lying on the sidewalk shooting up and doing fentanyl because That is so bad that if someone doesn't like wake up gary tan who runs white commoner He's been very proactive on rallying the tech community to get rid of the administrators in the city and the politicians that's guys he's been he's been a baller and Other younger younger than us in their thirties and eight forties They have families like this is ridiculous. They want change. So this movement. I hope continues and benioff should not leave He should stay in san francisco. Yeah, I agree. Let me mark and mark if you're listening Please don't leave the city Be a leader And set the agenda and and use your influence with the former mayor now governor to clean up that shit It's musk only is over three times the price And this 10x the potential for crime and death Who wants to go there? Nobody Nobody wants to go there. It is like it's it's bad. It is bad But now google was in at moscone Databricks was at moscone Snowflake next year is at moscone So people are still, you know supporting the venue and the venue is awesome. It's just the surrounding area is scary You know and the hotels are ridiculous in terms of the cost You got to stay at the if you're late. You got to stay at the shit hotel for $550 a night $600 a night That we were we're rsa's there. We were at rsa. Remember I was like, hey, john I'm kind of afraid to walk alone to my hotel which is sort of on the border of the tenderloin You might walk on me back and I kind of convinced you to stay the night Don't drive back to palo alto hang with me But it was like 500 600 bucks a night for to stay there. I've walked for so much crime here. I mean, I'm used to it Well, we got another 20 minutes. We got we got a busy friday. I know you've got to go Some other news larry ellison made his first trip up to Redmond to do a deal with microsoft in his entire career larry ellison One of the captains of the industry still the ceo's company founder Still making making it making waves doing cloud and they're making some some movement in the cloud by the market share numbers, but he blew up there To sit down with with the microsoft and do a deal They're putting oracle hardware and database into azure into azure data centers They're running customers run oracle on azure. So it's oracle on that infrastructure. So Two things one larry finally in his career at the end of his career making a visit to microsoft the evil empire in his mind They think he's the evil empire but not anymore And two is it desperate move? Is it a desperate move by oracle? Is it desperate by microsoft? No, it's a great. It's a great move. It's like vmware. It's just like vmware deal with aws Or is it a what's what's your take? I have my opinion. I'll let you go first So first of all, I'll take larry ellison I mean, it's it's easy to Criticize oracle everybody Loves to do it and pile on But I've said if I've said it once I've said a million times larry ellison has great respect for technology He's maintained relevance through investment in r&d As not only the chairman and the cto of the company. He directs capital toward r&d Both organic and inorganic Doesn't always get it right the first time But sticks with it Attracts great talent Has a very high degree of respect for the latest technology advancements And brings that in To oracle and there's so many examples of that with automation AI What they've done with mysql heatwave, which you know a lot of it is brute force, but it's impressive as hell What they can do what they did with engineered systems and exadata Those are are Directed deliberate hardcore r&d investments that turn r&d into product That oracle sells for billions and billions of dollars that drops a shitload of cash to the bottom line They are an awesome Business now as it relates to the microsoft don't forget the don't forget their sales force is good too. They have a great field fantastic field team Very strong relationships with gsis who you know love to cut big deals uh, as they say they make Great acquisitions even though the serner acquisition has been weighing on earnings The sun acquisition everybody criticized that it enabled them to build exadata and that's what they're putting into microsoft data centers azure data centers When they when they first did the microsoft oracle deal We looked at that flor and i looked at it very closely And we said that's a form of super cloud. You're spanning multiple clouds with an abstraction layer You know they use terraform and some other custom You know code to to simplify that experience for developers But it was essentially a seamless experience across the two clouds and I remember at super cloud super cloud one. I think it was john. I was going at it with in sick ray Who? I said, no, that's an example of a super cloud. He goes. Oh, you lost me at oracle I was he sort of shot back again There's another vc just wants to shit on oracle and then sell his company to them That was sort of funny in sick was hilarious. He's a smart dude That's anyway. It was kind of tongue-in-cheek, but I think I think I think he was basically referring to how Lack of innovation oracle is yeah, but I'm really having they're they're not an innovative company in the sense of They don't invent new things. They're followers. They have fast followers though, but they are fast followers And by the way, by the way, you could say they didn't invent anything, but I would say they invented You know the the modern engineered system They gives everybody else and I guess you could argue they were fast followers. Everybody was doing converged infrastructure Remember with vce you had you had you had uh, uh Cisco ucs you bolted on an emc Symetrics or vmax or whatever they called it you had vm where stuffed inside and they called it a skew What oracle did is they actually built hardware and they built the iphone of engineered systems hardware and software working together In a in a truly engineered system Was that innovative? Was it kind of a fast? Well, it's not like wildly innovative Like, you know open ai But it was a fast follower in that they built a better mousetrap Using the latest and greatest technologies and they and they tied it to a business model That is far superior than anything else out there with very few exceptions so I mean, I just I just had my my very simple view about oracle, but you know Go ahead. I mean my view is on me Well, the simple view is like you said, they're a great business They have the database what they did was in the early days as they took the database Innovated it to compete against IBM in the early days And they went in and used that database and built a business on top of it And so they didn't have to be innovative in their businesses because the database market was very lucrative for oracle And their strategy was simply to be innovative in the sense of making sure they don't miss anything to grow their business And so what they did was would sit back and watch everyone You know get bloody as they invent stuff and you know, what's the world expression? The first one through the walls versus gets the bloodiest and fails That's the way usually it isn't silicon valley And that's why he would always poo poo the bc's because he says I'll let the startups everyone's showing the way But once he sees a market He's smart enough with the team to say that market is important for oracle Okay, he even poo pooed cloud member clouds. That's nothing. It's just data centers He was totally like he basically missed cloud, but he didn't miss all the all the he didn't he missed cloud Okay, really come on. You can't even you can't even say this cloud Okay, okay, so he's got a cloud. He's kicking ass in cloud. How can you say this cloud? Not exactly a fast follower either by the way, but he followed cloud. He got it now It's good for his business. He has to have cloud So are you saying you could have been a hyperscaler? Yes, he could have been a hyperscaler. He had more than i amazon did amazon He basically poo pooed cloud publicly from the beginning for at least eight years. Okay, so Larry Ellison Even with point where Andy chassis baited him so much on reinvent keynotes that he finally said Let's take our engineered systems and call it cloud. And that's what he did. We were covering his announcements That's not bad for business. He's smart. That's my point. He was late to the cloud hardly a fast follower But other markets he was fast. You're right hyperscaler He saw that as critical for the data center his core market and built that in there So their strategy was simple take their great business and keep growing it and any good business Sometimes doesn't have to be the the innovator poster child Apple likes to be because that's kind of their thing To be the next big thing But even they're slowing down to be fast falls because they don't have to be the innovative ones Even their last launch was not good. So again, this comes back down to how the big winning companies go Even amazon are they going to be the most innovative? They're kind of fast following ai Again, this is what big companies do if that's what they have to do They don't have to be innovative always to the core now. They can be quote innovative and entrepreneurial Let me know that's kind of You know, there's a lot of similarities culture a lot of similarities between aws and oracle By the way, I mean, there's a lot of difference now. There is there are a lot of differences You know oracle was all the wood behind oracle database Whereas amazon's got you know multiple databases, but but there but there are some similarities in terms of lock-in in terms of just aggressive selling add-on add-ons add-ons add-ons, you know make stuff on top of it I mean amazon is kind of like oracle in the sense that now the ai this is why i'm bullish on amazon ai They won't get the fanfare and this is where their risk is this we pointed this out of google next If and our other pod if they don't get that young developer demographic like I pointed out last pod They could miss this window in this new platform. That's like microsoft poo pooing search and mobile, right? Or i'm not having their own phone oracles in cloud I think oracle will continue to have a cloud product and they have an opportunity with ai To move their compute advantage in their engineering systems to be much more front and center Just like del has an opportunity to be a get back in the server game because the old server models on a decline But the ai server models emerging. So what does that look like? So again ai as a new platform offers everybody an opportunity right to If they have the goods to reposition themselves So amazon will come into ai and will do extremely well in my opinion, but they're going to be Faster followers onto what they know will happen Microsoft beat them to the punch on thought leadership and public opinion in height They poo pooed it initially We have ai too and now they're like all in on gen ai. So again, this is what this is all they're going to do Well, the door is open for google too. The door is open to google I would say this about oracle though I mean, I do have a great deal of respect and I you know, I agree with what you're saying It's a great business. It's largely the business model and just business acumen you know oracle used to criticize people for writing Checks not code meaning Guys like ca would go out and buy companies, you know all those competitors around and we're buying companies and in one day You know Charles Phillips wrote a piece He was a wall street analyst about how the software industry applications software is going to consolidate Ellison hired him to actually Be his m&a guy and they built An application powerhouse and then And then this is what I mean by oracle respecting technology They built fusion. It took them like 10 years to do it But their shit is integrated whereas you compare that to ibm web sphere this like Collection of of apps that steve mills bought that never really came together. So oracle You know because it made those r&d investments in a coherent manner Has has continues to win. They just they just win And so we we forgot some news actually this week that I got all of all those good news. What's that? I forgot I forgot to tell you or you we we talked about it. There was a AI government our hearing at congress closed door session Elon musk was there bill gates was there mark suckerberg was there and the The co-founder of hugging phase was there. Yeah, cube alumni. We had a cube alumni satanatella was there All the luminaries and everyone got musk got all the attention because he was there but And they're all like AI could kill us. This is good for our rand section actually So regulation is coming. They're all saying that AI needs to be regulated So musk says AI could kill us all That's what he said in closed door session Oh, you guys so you got a bunch of politicians and a bunch of tech CEOs basically Sort of architecting the future of AI regulation billionaires except for oh sam ultraman was there and so was jensen and so I'm not sure that's the answer but Charles chuck schumer did it Convene the session, but this is the government trying to get involved. I mean, I just find it This is like this is the classic guardrails. I think we just got to just say guardrails I'm going to put guardrails in place and just get the government out of the action for now It's become such a political hot potato. They just got to stay out of the technology This is my rant and for for the day But government stay the heck out of AI and don't let the big companies Ed fake you into thinking it needs to be regulated because the startups will get hurt from this So any regulation of any kind is not good for the industry Keep an eye on it put guardrails in place But get the hell out of the regulation conversation now That being said There is a global aspect to it and that's what what I think needs to be the focus Look at it globally and start thinking about formulation of policy and and potential doctrine around AI Because I think the real AI Congress isn't about regulating it because it's bad for society I think it's a cybersecurity issue. I think the Dots to connect is looking at these ransomware attacks Okay, and other potential cyber warfare Tactics AI will be just as good to help the bad guys be better at being bad So just like it helps humans be good at what they do. So AI Is definitely going to create a lot of productivity, Dave And a lot of that productivity is going to be for the evil people So, you know, that's an area that you know, a lot of people are just going gaga over Oh, this same Altman, you know, and oh, there's Mark Zuckerberg, you know This Elon Musk, let's go the all in summit rah rah. No, there's a lot of bad shit happening and I think the AI Can be played properly with startup innovation And new brands that could emerge to solve the problem. So I'd much rather see the conversation be These are the problems we want to leverage AI to solve Better user experience better government better society better human beings So that's the better education in education systems a mess Okay, but john, where do you land on things like copyright if if chat gpt is sucking copyright in or other AI has taken Other copyrighted materials sort of using that to create other artifacts. I'm not a scholar But I mean copyright's been going on for since the dawn of time So you're saying let it go, you know, you say and let it go let it let it play out Let it play out. Yeah, people are going to be But you know her but you know people can be like bumming out. Oh, yeah Common sense prevails. I don't know the answer again Copyright since the caveman days has been an issue, you know so Okay, so let it figure so I say let it let it go down the road a little bit and then look at it and let the Artists show because one of the things that's coming out of a copyright thing with the writers Hollywood is that the younger the new artists are emerging that aren't even part of Hollywood I mean mr. Beast pulls massive numbers on youtube Okay, so you have people on strike saying we'll save our work. Well, guess what the replacements are coming in so again sports media hollywood media You know hearts should be protected. Okay, but let's but let's not freak out, right? Let's leverage it and and use it. I think it's a hard problem I mean if if AI is being used to scrape various books novels or whatever taking You know kind of not excerpts but ideas and then creating its own I mean, I guess You know in a way, I kind of feel like okay. Well if it can create some kind of new it happens every day in music All right, I'm not I'm not a musician but musicians tell me that basically You know every every song has the same fundamental chords to it so I mean, I guess I guess I you know mostly agree with you. I do think there are some things in terms of bias in terms of, you know, things like You know approving, you know financial, you know mortgages and And loans and lending and things like that that, you know, if AI is doing that you've got to have some kind of regulations That at least enforce the law But I don't know I'd have to think about it more But I but I do know this sticking a bunch of politicians and a bunch of billionaires in the room to figure it all out Probably ain't the right formula that I agree with Well, we're getting some texts here from Sarvita on some some stuff here We're going to wrap up Dave But anything else on your mind before we wrap up and we've got a couple minutes left here I'm I'm going to I'm stoked for falcon next week crowd strikes Big security conference and you're going to be at Mandiant Which is another big security conference. So we're going to be almost bi-coastal Crowd strike is kicking ass. I'm working on a breaking analysis today. They're going to introduce Well, they've introduced Charlotte AI, which is their generative AI Tooling, you know, we've talked to a lot of security companies and many have said, well, we're not sure We're still trying to figure it out. But the leaders are leaning in hard Crowd strike at black hat was demonstrating Charlotte AI Where basically you can have a natural language conversation with, hey, what's going on in the industry today? What are the big threats? Do I have any exposures in my My infrastructure Automate a workflow to remediate that and they'll hand it to you and you can actually push a button and make it happen Or even have the system do it, which I don't think most people are going to do initially So there's they demonstrated that at at black hat, whereas most people were had slideware vaporware They're announcing pricing For charlotte ai next week So i'm really interested to see that because it's going to be one of the early examples of you know, non Open ai microsoft amazon, etc. Announcing pricing and monetizing ai so i'm excited to see that Well, i'm going to be at mandiant in dc. You'll be a crowd strike I'm excited for the second half of the year coming up I think reinvent is going to be a great event for the cube our special covers We're going to do is be three days from our studio. We're going to live stream a program for three days From us being on on site. We won't have the big cube there like we do every year We're going to have only like the editorial cube. We're going to be up in the press area And then we'll do some celebrity appearances around the hall But for the most part all the program will be originating out of silicon angle offices in palo Alto in boston area and we're going to have hosts there moderating our coverage there That's going to be exciting the other thing i'm excited about davis I learned a lot at the sass explore i'm getting to know that company. They're in north carolina Great company and great people They have an opportunity they're uniquely positioned with their And their customer base would save a lot of customers over many many years over 47 years They've been in business the ai is a tale of a new position. Well, i'm going to do some follow-up with these guys here In in north carolina i'm going to come back and visit their sass championship golf tournament And um and and get get more content and get more information and and look at doing more work with those guys so i think This whole revitalization trend is coming and i really talked about it publicly yet Because i'm just getting my thoughts together around it but this idea of how ai can revitalize older things is interesting legacy code like cobalt Mainframe to minis to applications and it's going to be an opportunity It's going to be i think a dark course in the conversation dave and you guys have to see private ai come into the mix Like private cloud robs treasurer talking about that. So again a lot a lot of action Keep it on silicon angle.com for all the coverage. That's where dave drops his breaking analysis And that's where all the action is the cube.net is the catalog all the cube content You'll check out where we are there. This is episode 29 day. We're going to hit 30 Next time see you next time and thanks for listening and watching Hey john