WEBVTT - C3 AI CEO on Growing Cybersecurity Threats

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<v Speaker 1>This is Bloomberg Business Week with Carol Messer and Bloomberg

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<v Speaker 1>Quick Takes. Tim Stinovic from Bloomberg Radio. So our next guest.

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<v Speaker 1>We caught up with him last in May. A lot

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<v Speaker 1>really has happened since then. Great to add back with us.

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<v Speaker 1>Tom Siebel, founder chairman CEO at C three AI, ticker

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<v Speaker 1>of the company's AI, founder of Cebel Systems, which was

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<v Speaker 1>sold to Oracle back in oh six. Tom also author

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<v Speaker 1>of the book Digital Transformation, Survive and Thrive in an

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<v Speaker 1>Era of Mass Extinction. He joins us on the phone

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<v Speaker 1>from California. Hey, Tom, Good to have you back with us.

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<v Speaker 1>How are you hi. Great, nice to hear from you. Well,

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<v Speaker 1>it's nice to have you here and hear your voice. Um,

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<v Speaker 1>I gotta ask you. I want to get into a

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<v Speaker 1>lot of things about what your company is doing. Talk

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<v Speaker 1>to you about AI. But I gotta ask you about

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<v Speaker 1>this headline that just crossed about hackers saying, um that

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<v Speaker 1>they exposed Tesla and some jails in a breach of

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<v Speaker 1>a hundred and fifty thousand security cameras. They said they

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<v Speaker 1>wanted to show prevalence of surveillance. We are definitely living

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<v Speaker 1>in different times. I think the threat associated with US

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<v Speaker 1>cyber threat okay from bad actors in nation states including Russia, China,

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<v Speaker 1>North Korea, Iran is existential. I mean, these people have

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<v Speaker 1>the ability to shut down the United States great power,

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<v Speaker 1>great infrastructure, the financial system, the healthcare system, you know,

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<v Speaker 1>with a cell from from the other side of the planet,

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<v Speaker 1>and they can do it tomorrow. This has been very

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<v Speaker 1>very well documented in books that have been recently published,

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<v Speaker 1>such as The Perfect Weapon and this is how they

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<v Speaker 1>tell me the world ends. Uh, And this is very

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<v Speaker 1>various here stuff that last week the National Security Commission

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<v Speaker 1>for Artificial Intelligence published its report for years in the making,

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<v Speaker 1>then concludes that today the United States government is not

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<v Speaker 1>organized or investing to when the technology come competition against

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<v Speaker 1>the committed competitor, nourish it prepared to defend against AI

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<v Speaker 1>enabled threats and rapidly adopt AI applications for national security purposes.

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<v Speaker 1>That we are exposed. So there are bad actors out there,

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<v Speaker 1>and this is very scary. Well, you know, it just

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<v Speaker 1>reminds me of It's like I've seen this movie before.

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<v Speaker 1>We saw it in the form of the health pandemic.

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<v Speaker 1>Lots of warnings for years, and yet we weren't prepared,

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<v Speaker 1>and I feel like we're setting setting up for something

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<v Speaker 1>like that again. And I have to say, I'm reading

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<v Speaker 1>this story and they say, um, they breached massive trove

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<v Speaker 1>of security camera data collected by a Silicon Valley startup, Ricata.

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<v Speaker 1>They gained access to live feeds of a hundred and

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<v Speaker 1>fifty security cameras inside hospitals, companies, police departments, prisons, and schools,

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<v Speaker 1>able to view video from inside women's health clinics, psychiatric hospitals,

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<v Speaker 1>and the offices of this company of Ricata itself. Um.

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<v Speaker 1>And they were using in some cases, some of these cameras,

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<v Speaker 1>including in hospitals, were using facial recognition and technology to

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<v Speaker 1>identify and categorize people captured on the footage. UM. I

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<v Speaker 1>think about this. You are so in on the AI world.

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<v Speaker 1>You talk about us not being prepared for Listen, there's

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<v Speaker 1>great things to be had by it, but there's also

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<v Speaker 1>a downside. We're not ready for it or not prepared

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<v Speaker 1>for it. When you get into cyber security and infosect,

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<v Speaker 1>this is just very scary stuff. I mean, the Chinese

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<v Speaker 1>went into the Office of Personal Management in Washington, d C.

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<v Speaker 1>And it walked off of like twenty million records of

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<v Speaker 1>everybody it's ever been considered for a security clearance. I

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<v Speaker 1>mean the you know, the Russians, gay, we were in

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<v Speaker 1>there within the last month and no telling. Nobody's him

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<v Speaker 1>in telling the story of how thoroughly they penetrated the

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<v Speaker 1>United States government. I mean, the emperor has no clothes either.

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<v Speaker 1>This is not on the national agenda. And this is existential.

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<v Speaker 1>If these people to turn off the US power created,

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<v Speaker 1>which they do in a second, right now, I not

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<v Speaker 1>a tend people in the United States die. So this

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<v Speaker 1>makes the whole COVID pandemic look like a common cold,

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<v Speaker 1>you know, compared to I mean, this is very very

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<v Speaker 1>serious stuff. This is existential stuff, and it's not on

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<v Speaker 1>the national agenda. Yeah, it says another video shot inside

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<v Speaker 1>the Tesla warehouse in Shanghai, so as workers on an

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<v Speaker 1>assembly line, Hacker said they obtain access to two two

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<v Speaker 1>cameras and Tesla factories and warehouses. Well, this is your world.

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<v Speaker 1>You're having conversations with people who are tapping into and

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<v Speaker 1>working with you. Guys, you provide you know, enterprise AI

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<v Speaker 1>software UM is anybody kind of aware of how to

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<v Speaker 1>do this in a responsible way. I mean, this is

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<v Speaker 1>your world. We've just got about thirty seconds time, and

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<v Speaker 1>then we'll come back and talk some more. Yeah, I

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<v Speaker 1>would chase. The organizations that are most equipped okay, and

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<v Speaker 1>have the greatest levels of security as it relates to

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<v Speaker 1>AI and cybersecurity are the banks. I mean, these guys

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<v Speaker 1>have have security regiments for their information and systems are

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<v Speaker 1>completely aero gapped, they're tested, they have security protocols that

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<v Speaker 1>are incredibly vigorous while they're dealing with the US banks

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<v Speaker 1>or the European banks. These people have done us a

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<v Speaker 1>perlative job, and the people in the United States government

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<v Speaker 1>could go to school on that. They look like, you know, candidly,

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<v Speaker 1>they look like cub scouts compared to the way that

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<v Speaker 1>banks handling information security. You've been kind enough to indulge

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<v Speaker 1>us as we were breaking down these headlines on this

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<v Speaker 1>major hack. You know, listen, Tom, you've been in the

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<v Speaker 1>technology world for a long time. You've seen it evolved.

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<v Speaker 1>It's gotten much more sophisticated, it's got a lot more invasive,

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<v Speaker 1>it's gotten a lot more useful, and it's such a

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<v Speaker 1>part of everything that we do. AI specifically talk to

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<v Speaker 1>us about kind of what's front and center right now.

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<v Speaker 1>In terms of where it's going, who's using it, where

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<v Speaker 1>it's going to be the most productive. Well, leading corporations

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<v Speaker 1>around the world are using AI and smarting, analytics, precision medicine, aerospace, ACE, manufacturing, telecommunications, banking,

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<v Speaker 1>and they're using AI to deliver better products and services,

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<v Speaker 1>to deliver safer, cleaner, more reliable energy. They're using AI

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<v Speaker 1>to secure data, data assets from cybersecurity attacks. They're using

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<v Speaker 1>AI and defense and intelligence. This is the largest this

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<v Speaker 1>is we look at enterprise AI software. This is a

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<v Speaker 1>third of a trillion dollars market in say so, this

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<v Speaker 1>is the largest growing enterprise application software market in history. Okay,

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<v Speaker 1>and we serve all segments of that industry, from banking

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<v Speaker 1>to tell go to healthcare to government. Listen, So give

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<v Speaker 1>me AI for dummies, because I feel like we throw

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<v Speaker 1>around certainly not you, but we throw around the term

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<v Speaker 1>artificial intelligence a lot, and I think people have a

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<v Speaker 1>grasp of it, but I don't think they understand, especially

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<v Speaker 1>as you go through that list of basically are are

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<v Speaker 1>all to be quite fair, whether it's military, whether it's

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<v Speaker 1>you know, medical, whether it's energy. Um, where the use

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<v Speaker 1>of AI is making things so much better? What is

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<v Speaker 1>the AI for dummies if you had to explain it

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<v Speaker 1>to somebody, great question. Okay, so AI and so many

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<v Speaker 1>to strip away all the all the mystique and all

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<v Speaker 1>the noise. AI is an area that would call predictive

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<v Speaker 1>analytics where we're able, due to kind of advances in

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<v Speaker 1>information technology to solve problems that never been able to

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<v Speaker 1>solve before, where we can predict things before they happen

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<v Speaker 1>very accurately. Heart failure okay, diabetes okay, it's a failure

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<v Speaker 1>of a transformer in New York City. Okay, the failure

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<v Speaker 1>of a jet engine, so we can predict these events,

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<v Speaker 1>or the failure of a critical piece of equipment on

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<v Speaker 1>an offshore or rig, say for Roald dutch Shell, where

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<v Speaker 1>we can predict these events, you know, say days or

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<v Speaker 1>months in advance, and replace the transformer in New York

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<v Speaker 1>City and prevent the electricity outage. Okay, intervene uh clinically

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<v Speaker 1>and prevent the heart failure. Okay, you do some intervention

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<v Speaker 1>on the machine and present the aircraft failure before it fails.

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<v Speaker 1>That in a nutshell, that's what enterprise AI is all about,

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<v Speaker 1>is predictive antltication that is accurately predicting events before they happen,

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<v Speaker 1>and we're able to do that today with very high

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<v Speaker 1>levels of precision. Well, and when it comes to something

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<v Speaker 1>like healthcare, Listen, we have all been obsessed with our

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<v Speaker 1>health care because our lives depended on it in the

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<v Speaker 1>last year. And understanding we all got I think it

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<v Speaker 1>safe to say, somewhat smarter in understanding how vaccines are

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<v Speaker 1>developed and the complications of you know, a virus and

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<v Speaker 1>and all these things. When it comes to healthcare specifically,

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<v Speaker 1>you talk about AI like we can predict heart failure.

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<v Speaker 1>I mean, is this an area that we have yet

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<v Speaker 1>to explore in a big way when it comes to

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<v Speaker 1>a I yes, I think this is well, this is

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<v Speaker 1>a field where we apply AI to healthcare. This is

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<v Speaker 1>what we call precision medicine. This will be the largest

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<v Speaker 1>commercial application of AI. And for example, we can take

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<v Speaker 1>the genome sequences and the health care records of say

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<v Speaker 1>the population of the United States or any population okay,

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<v Speaker 1>and apply machine learning algorithms to these data and predict

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<v Speaker 1>with very high levels of precision, who is going to

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<v Speaker 1>be diagnosed with what disease? Okay, in the next five years,

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<v Speaker 1>heart disease, lung cancer, whatever it might be. And then

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<v Speaker 1>intervene clinically and avoid the diagnosis. Well this you combine

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<v Speaker 1>that with telemedicine to reach previously unserved UM members of

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<v Speaker 1>the community, and the economic and social benefit of this

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<v Speaker 1>is staggering. Then you have genomes specifical medical protocols where

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<v Speaker 1>where we you know, have tailored medical protocols to the

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<v Speaker 1>individual genome, which are highly much going to be much

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<v Speaker 1>more highly efficacious at a much lower cost. So these

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<v Speaker 1>are examples of a I applied to medicine. This will

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<v Speaker 1>be again the largest application of ai UH in any field.

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<v Speaker 1>It's funny, I feel like you're tying up our show

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<v Speaker 1>so well because earlier we talked with the CEO Pacific Biosciences,

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<v Speaker 1>who UH is involved in that sequencing, the you know,

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<v Speaker 1>genetic sequencing. So it was it's wonderful how you tied up.

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<v Speaker 1>But okay, it sounds so promising. Helped me out here, though,

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<v Speaker 1>Then why isn't the community moving maybe the health care

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<v Speaker 1>community moving more rapidly towards embracing it. And I'm going

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<v Speaker 1>to be fair here, I hope you'll see it that way.

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<v Speaker 1>Your stocks down a lot, like what what is it

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<v Speaker 1>that investors aren't getting about? The subject if it's so promising,

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<v Speaker 1>or about your company that's so promising. Well, our company

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<v Speaker 1>went public last December. Well we priced to stock at

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<v Speaker 1>forty two. I think it's trading at about ninety today.

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<v Speaker 1>It was all due respect, I think the company is

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<v Speaker 1>doing quite well the the But why the pullback? Is

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<v Speaker 1>it just kind of like giving you guys some space

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<v Speaker 1>here or what? I think that you know, I don't

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<v Speaker 1>pretend to understand capital markets, and you know that's not

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<v Speaker 1>my business. We're just building a company and the Eccles

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<v Speaker 1>stock price will take care of itself. But but I

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<v Speaker 1>think that you know, if we look at the leaders

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<v Speaker 1>in healthcare, whether it's c DC, whether it's an I age,

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<v Speaker 1>we look at Cerner United Healthcare, these people are very

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<v Speaker 1>very focused on precision medicine UH and applying AI to

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<v Speaker 1>the medical process to deliver you know, more efficacious, more

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<v Speaker 1>readily available, lower cost medicine and the result will be

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<v Speaker 1>a healthier population that lives longer. And so there are

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<v Speaker 1>many organizations focused on this in a big way, massive

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<v Speaker 1>amounts of research taking place, and a lot of this

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<v Speaker 1>is being led by as it relates to COVID, by

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<v Speaker 1>the c TH what we call the C three A

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<v Speaker 1>Digital Transformation Institute, which an effort that we did with

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<v Speaker 1>micro Soft and and M I T and Berkeley and

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<v Speaker 1>Princeton and Carnegie Mellon and others. We're doing very very

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<v Speaker 1>advanced research into playing I to understand pandemic and coursive

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<v Speaker 1>disease and drug discovery and what have you. So there's

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<v Speaker 1>massive amounts of research going on in this area. Yeah,

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<v Speaker 1>it feels like it's just such a world that just

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<v Speaker 1>continues to open up. Hey, Tom, thank you so much.

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<v Speaker 1>I always appreciated. Tom Siebel is founder, chairman and CEO

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<v Speaker 1>at C three AI. And to be fair, the stock

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<v Speaker 1>did I p O at forty two and as Tom mentioned,

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<v Speaker 1>h it has more than doubled up from that amount.

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<v Speaker 1>So good to get that in there.