WEBVTT - Thoma Bravo to Pay $12.3 Billion for Dayforce, Nasdaq Fall Continues 0:00:02.759 --> 0:00:13.680 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is live 0:00:13.720 --> 0:00:17.560 from coast to coast with Caroline Hide in New York 0:00:17.800 --> 0:00:21.000 and Evvelow in San Francisco. 0:00:22.200 --> 0:00:25.520 This is Bloomberg Tech coming up tech stocks They waiver, 0:00:25.640 --> 0:00:28.159 I mean, the NASA one hundred's worst losing streak in 0:00:28.240 --> 0:00:32.800 five months. Concerns about AI valuations dominate that as we 0:00:32.880 --> 0:00:35.440 speak with Tom of Bravo about its acquisition of hr 0:00:35.520 --> 0:00:36.800 software provided day. 0:00:36.560 --> 0:00:38.400 Force in what is set to become one of the 0:00:38.400 --> 0:00:40.519 investment firm's largest ever deals. 0:00:40.960 --> 0:00:44.680 And Google introduces new consumer gadgets including smartphones, a watch, 0:00:44.680 --> 0:00:48.839 and wireless earbuzz with AI front and center. But first 0:00:49.040 --> 0:00:51.519 we turn our attention to these markets. We have been 0:00:51.560 --> 0:00:54.480 read throughout most of the training day, but certain stocks 0:00:54.480 --> 0:00:56.840 are doing their best to lift us into the green. 0:00:56.880 --> 0:00:58.760 We're off by only a tenth of a percent, but 0:00:58.800 --> 0:01:01.400 still that's three days of an ASA one hundred, the 0:01:01.440 --> 0:01:04.880 longest losing streak. Sains back in April in video doing 0:01:04.920 --> 0:01:06.000 its best to pullus higher. 0:01:06.080 --> 0:01:07.880 So two in fact is Palenteer. 0:01:07.880 --> 0:01:10.520 But check out how much Plenteer has been down over 0:01:10.520 --> 0:01:12.919 the course of what had been a six day losing streak. 0:01:13.080 --> 0:01:16.600 Eroding seven hundred billion dollars worth more than seventy three 0:01:16.680 --> 0:01:19.760 billion dollars worth sorry of its market valuation, and we 0:01:19.840 --> 0:01:24.440 have seen question marks over more broadly the evaluation among 0:01:24.640 --> 0:01:26.360 so many of these AI winners. 0:01:26.760 --> 0:01:28.240 But let's get a take on this. 0:01:28.400 --> 0:01:30.959 What prompted some of the questioning of the valuations and 0:01:30.959 --> 0:01:31.759 whether it will hold. 0:01:31.760 --> 0:01:34.320 Denny Fish is with US portfolio. 0:01:33.880 --> 0:01:37.720 Manager of course, of the Global Technology and Innovation team 0:01:37.760 --> 0:01:39.880 of rich Annis Henderson Investors. It's a firm with one 0:01:39.920 --> 0:01:42.560 and fifty seven billion dollars in assets and management. It 0:01:42.840 --> 0:01:47.240 just launched its own artificial intelligence ETF yesterday. We're looking 0:01:47.280 --> 0:01:50.880 at some of the names Denny in that ETF. Tough 0:01:50.960 --> 0:01:54.400 timing amid the current pressure on some of the companies. 0:01:54.440 --> 0:01:55.880 What do you make of this questioning? 0:01:57.480 --> 0:01:59.840 Yeah, so, you know, importantly, the reason we launched this 0:02:00.040 --> 0:02:03.520 fund is we believe this is the most profound technology 0:02:03.560 --> 0:02:07.240 shift that we will see in our lifetimes. So whatever 0:02:07.280 --> 0:02:09.360 happens over the next couple of months is going to happen. 0:02:09.480 --> 0:02:12.079 But the direction of travel over the next twenty years 0:02:12.680 --> 0:02:15.160 we think is very positive as it relates to AI. 0:02:15.360 --> 0:02:17.560 And if we just you know, reflect back over the 0:02:17.639 --> 0:02:21.920 last twenty five years and the cloud, the social and 0:02:21.960 --> 0:02:25.280 the mobile boom. You know, that was you know, twenty 0:02:25.440 --> 0:02:28.239 plus years of value creation. And you know, we think 0:02:28.320 --> 0:02:30.640 AI has the potential to be even larger than that. 0:02:31.360 --> 0:02:33.120 You know, and with that, you know, and and and 0:02:33.240 --> 0:02:37.000 you know, given you know your question on valuations, it depends, 0:02:37.200 --> 0:02:39.760 you know, I mean, they're clearly pockets of the market 0:02:39.960 --> 0:02:44.480 where things are more speculative and very highly valued. So 0:02:44.680 --> 0:02:47.360 you know, you you talked about Pollunteer for example, you know, 0:02:47.480 --> 0:02:49.239 is a good example of a company that trades it 0:02:49.639 --> 0:02:55.800 a very elevated multiple, great company, great fundamentals, extremely high valuation. 0:02:56.160 --> 0:02:58.400 And then you know, you can come back to names 0:02:58.480 --> 0:03:01.880 like Taiwan Semi Canductor, or you know, the trades at 0:03:01.880 --> 0:03:06.200 a team's earnings multiple, or you know Nvidia that's still 0:03:06.240 --> 0:03:08.960 trades that are reasonable multiple given its earnings growth rate 0:03:09.040 --> 0:03:12.399 with really powerful secular trends, and you can get more 0:03:12.400 --> 0:03:15.600 comfortable in areas like that, and so you know, our 0:03:15.639 --> 0:03:18.280 whole goal also, you know, just to put a finer 0:03:18.320 --> 0:03:20.720 point on this is you know, AI is going to 0:03:20.720 --> 0:03:24.280 affect the entire economy. So the purpose of our fund 0:03:24.560 --> 0:03:26.200 is it's going to be heavy with tech as you 0:03:26.240 --> 0:03:28.959 can see in terms of the top holdings, but also 0:03:29.160 --> 0:03:34.160 you'll find you know, names and financial services, consumer, healthcare, 0:03:34.400 --> 0:03:37.200 industrial and other areas of the economy as well. 0:03:37.400 --> 0:03:40.000 It's about where you think AI is going to enable 0:03:40.080 --> 0:03:42.480 enhancelled benefits. So I'm interested by the fact that you 0:03:42.560 --> 0:03:45.160 got eaten in their Blackstone with thinking real estate, with 0:03:45.240 --> 0:03:48.880 thinking power. How much has that not been priced into 0:03:48.880 --> 0:03:50.680 these sorts of companies yet, Denny. 0:03:51.640 --> 0:03:53.960 Well, I think if we're looking you know, at the 0:03:54.000 --> 0:03:57.440 next five to ten years, you can make a case 0:03:57.560 --> 0:04:00.160 for you know, the companies that you know, we've populated 0:04:00.160 --> 0:04:03.760 in the portfolio right out of the gate. And I mean, 0:04:04.040 --> 0:04:07.320 you know, you you mentioned power. You know, it's probably 0:04:07.320 --> 0:04:10.680 the single biggest constraint to deploying data centers right now 0:04:11.000 --> 0:04:13.600 at the scale that we need and the density that 0:04:13.640 --> 0:04:16.680 we need is getting you know, power available. And then 0:04:16.720 --> 0:04:19.080 once you can get the power available, then you have 0:04:19.160 --> 0:04:22.080 to cool the data centers. And there's an entire ecosystem 0:04:22.120 --> 0:04:27.440 around that that specializes in, you know, in those dynamics, 0:04:27.440 --> 0:04:29.520 and you know, clearly we want to participate in that, 0:04:29.600 --> 0:04:30.760 you know, over the longer term. 0:04:31.000 --> 0:04:33.680 What's really interesting is about the application of AI. So yes, 0:04:33.680 --> 0:04:35.559 it's about the infrastructure that goes in and the power 0:04:35.560 --> 0:04:37.400 that we talk about the real estate, but then it's 0:04:37.400 --> 0:04:39.880 actually what it does for businesses. You talk about financials, 0:04:39.960 --> 0:04:42.160 talk about healthcare. What do you make of this MIT 0:04:42.360 --> 0:04:44.800 research report that everyone seems to be worrying about the 0:04:44.800 --> 0:04:46.880 fact that ninety five percent of all pilots fail. 0:04:48.640 --> 0:04:51.880 Well, we're in that phase right now. And you know, 0:04:53.080 --> 0:04:55.320 you know, I was in the valley during the dawn 0:04:55.400 --> 0:04:58.039 of the commercial Internet, and there were a lot of 0:04:58.040 --> 0:05:00.640 failures at that point in time too. And you know, 0:05:00.720 --> 0:05:02.839 during that period, you know, we had a boom, we 0:05:02.880 --> 0:05:06.040 had a bust, and you know, and then it actually 0:05:06.279 --> 0:05:09.000 created some of the most powerful companies on the planet 0:05:09.040 --> 0:05:13.240 today and you know, laid the foundation for you know, 0:05:13.360 --> 0:05:15.880 these these multi year trends. And so I think kind 0:05:15.880 --> 0:05:17.920 of depends what you're doing. You know, there are clear 0:05:18.040 --> 0:05:21.240 applications out there. Clearly people are getting you know, value 0:05:21.240 --> 0:05:25.040 out of things like chat, GPT, deep research co pilots 0:05:25.080 --> 0:05:27.440 being widely deployed, and then you have a lot of 0:05:27.480 --> 0:05:30.479 experimental stuff that's going on in companies and it's the 0:05:30.560 --> 0:05:33.000 nature of the beast that you know, you're generally gonna 0:05:33.360 --> 0:05:35.120 you know, fail a little bit out of the gate, 0:05:35.560 --> 0:05:39.520 and you learn from that the technology gets better, people 0:05:39.600 --> 0:05:42.360 get sharper in terms of deploying the technology and figuring 0:05:42.360 --> 0:05:44.960 out how to use it, how to change their behaviors. 0:05:45.480 --> 0:05:47.800 And then you look back and you know, three or 0:05:47.839 --> 0:05:49.719 five years and you're like, wow, I kind of you know, 0:05:49.760 --> 0:05:51.760 misforced for the trees, Denny, what. 0:05:51.760 --> 0:05:53.920 Was interesting you referenced the dot com era. 0:05:54.839 --> 0:05:59.200 Just recently Intel was back at a profit in terms 0:05:59.200 --> 0:06:01.000 of its price versus future profit. 0:06:01.040 --> 0:06:04.440 It's valuation was akin to the dot com era. It 0:06:04.480 --> 0:06:05.119 was so high. 0:06:05.160 --> 0:06:07.479 What do you make of soft putting in money? I 0:06:07.480 --> 0:06:10.440 know that's in the latest fund and also the government. 0:06:11.360 --> 0:06:13.960 Yeah, so you know, Intel is an interesting one on 0:06:14.000 --> 0:06:16.880 the valuation. The reason the multiple so high is because 0:06:16.960 --> 0:06:20.279 earnings have absolutely collapsed. And so you know that that 0:06:20.360 --> 0:06:22.760 pe equation, when the ego is a lot lower, the 0:06:22.760 --> 0:06:26.039 pe goes up a lot. So not necessarily because the 0:06:26.080 --> 0:06:30.720 market's been enthusiastic about Intel, but rather you know the 0:06:30.760 --> 0:06:33.560 financial performance of the company. And then you know, I 0:06:33.640 --> 0:06:35.920 just think, you know, you know, SoftBank confessing in Intel. 0:06:36.160 --> 0:06:39.040 It's it's a little bit curious, you know, potentially or 0:06:39.160 --> 0:06:42.880 or particularly given that you know they have their ownership 0:06:42.920 --> 0:06:46.719 in arm uh. You know, they're participating in Stargate. 0:06:47.279 --> 0:06:47.400 UH. 0:06:47.560 --> 0:06:51.479 They bought amp here. So it's it almost feels like 0:06:51.560 --> 0:06:54.440 a little bit of a hedge just because we're going 0:06:54.520 --> 0:06:58.720 to be undersupplied with semiconductor content for years. It feels 0:06:58.800 --> 0:07:02.719 like and you know, that and power are very significant constraints. 0:07:03.360 --> 0:07:05.000 And I think if you just kind of look at 0:07:05.040 --> 0:07:07.400 the behaviors we've seen so far and some of the 0:07:07.400 --> 0:07:10.320 assets of soft banks selling down kind of feels like 0:07:10.360 --> 0:07:13.120 they're selling down some of their traditional holdings that they've 0:07:13.120 --> 0:07:15.600 had and things like you know, T Mobile for example, 0:07:15.640 --> 0:07:18.720 and they're redeploying that into AI infrastructure and then the 0:07:18.840 --> 0:07:21.880 US government. You know, I just don't know, because I mean, 0:07:22.240 --> 0:07:25.520 there's a reason a Taiwan semi conductor has done as 0:07:25.520 --> 0:07:28.480 well as they've done. They've just they've had leadership now 0:07:28.520 --> 0:07:33.160 for a decade. Their competencies are just you know, much 0:07:33.200 --> 0:07:36.080 more pronounced than Intel. Intel has been in a hole 0:07:36.120 --> 0:07:39.160 for a long time. You know, Pat Gelsinger gave it 0:07:39.200 --> 0:07:42.080 a shot for you know, almost five years. We have 0:07:42.120 --> 0:07:44.520 a lot of respect for lip Bhutan. We invested with 0:07:44.640 --> 0:07:49.560 him at Cadence Design for years. Exceptional leader but you know, 0:07:49.920 --> 0:07:52.600 Intel's not going to get fixed overnight, and there's nothing 0:07:52.640 --> 0:07:58.360 the government can do to change the disparity between Intel's 0:07:58.400 --> 0:08:02.040 process technology in Taiwan Semiconductor. 0:08:01.880 --> 0:08:05.160 Danny Fish of Janis Henderson Investors, fascinating to have you 0:08:05.200 --> 0:08:07.560 on and thanks for talking us through the new ETF. 0:08:07.640 --> 0:08:11.200 What name isn't in that ATF is Apple Many Field. 0:08:11.200 --> 0:08:13.240 Perhaps it's lagging you on AI. Some other news coming 0:08:13.360 --> 0:08:15.960 to us from Apple as Apple TV plus price is 0:08:16.000 --> 0:08:18.880 going to be on the rise thirty percent to thirteen 0:08:18.920 --> 0:08:21.840 dollars a month starting August the twenty first. Apple is 0:08:21.840 --> 0:08:26.800 saying it's annual price, more broadly for streaming services is unchanged. 0:08:27.080 --> 0:08:28.000 It's commenting on. 0:08:27.920 --> 0:08:30.280 The streaming price hike in an email statement, we're off 0:08:30.280 --> 0:08:31.200 by four tens percent. 0:08:31.840 --> 0:08:33.479 Coming up, we're going to be talking. 0:08:33.320 --> 0:08:36.640 To Toma Bravo managing partner there hold in Spain is 0:08:36.679 --> 0:08:38.959 the private equity giant agrees to. 0:08:38.920 --> 0:08:42.560 Buy HR software firm day Force. This is Blomberg Tech, 0:08:56.400 --> 0:08:57.080 Toma Bravo. 0:08:57.240 --> 0:09:00.000 It's just announced that it's agreed to purchase HR software 0:09:00.240 --> 0:09:02.720 day Force, paying seventy dollars a share in cash. Following 0:09:02.800 --> 0:09:05.280 day Force a twel point three billion dollars. Leased to 0:09:05.280 --> 0:09:07.800 say that blueberg Brief and kid Danny Berga joins us 0:09:07.960 --> 0:09:09.040 for a key conversation on the. 0:09:09.040 --> 0:09:12.079 Mattap Carolin, thank you so much, and yes, let's underscore 0:09:12.200 --> 0:09:15.400 how large this deal is. At twelve point three billion dollars, 0:09:15.600 --> 0:09:18.640 it is the largest deal ever for Toma Bravo and 0:09:18.720 --> 0:09:20.959 certainly one of the biggest this year for this market. 0:09:21.000 --> 0:09:23.600 I am pleased to say that joining Caroline and Us 0:09:23.640 --> 0:09:26.640 now is Toma Bravo managing partner hold in Space Holden. 0:09:26.760 --> 0:09:28.360 Thank you so much, and. 0:09:28.559 --> 0:09:31.280 Your biggest deal ever at a time when your rivals 0:09:31.600 --> 0:09:34.720 have kind of been languishing trying to even get deals done, 0:09:34.720 --> 0:09:36.720 and when they do it's kind of in the single 0:09:36.760 --> 0:09:40.200 digit billions. So why the size of deal and why 0:09:40.240 --> 0:09:40.920 this one now? 0:09:42.480 --> 0:09:44.319 Yeah, well, thank you so much, first of all, Danny 0:09:44.360 --> 0:09:47.240 for having me. It's a very exciting day, a very 0:09:47.240 --> 0:09:52.160 exciting transaction for Toma Bravo. And look, we don't think 0:09:52.200 --> 0:09:54.280 so much about, you know, the size of the deal. 0:09:54.320 --> 0:09:56.800 We think a lot more about the fundamentals and what 0:09:56.840 --> 0:09:58.800 we can do with the company. This company day for 0:09:58.960 --> 0:10:01.520 us is an incredibly special company. We have followed it. 0:10:02.120 --> 0:10:05.360 I met the founder who's still the CEO of the 0:10:05.400 --> 0:10:09.760 company before he even merged his company into Sarridian in 0:10:09.800 --> 0:10:13.720 twenty twelve. And so we've tracked this company for a 0:10:13.840 --> 0:10:16.520 very long time. It's a very unique company in a 0:10:16.600 --> 0:10:20.600 very important space. It's got product leadership in a big market, 0:10:20.640 --> 0:10:24.000 and so we've followed this This deal has been in 0:10:24.000 --> 0:10:26.760 the works for a long time with our firm, and 0:10:26.800 --> 0:10:29.079 it has all the characteristics and attributes that we look 0:10:29.120 --> 0:10:31.400 for in to Mobravo in terms of the quality of 0:10:31.440 --> 0:10:34.080 the revenue, in terms of the product leadership that it has, 0:10:34.880 --> 0:10:39.319 in terms of its AI roadmap, great management team, and 0:10:39.400 --> 0:10:41.920 so we're just really excited to be able to have 0:10:41.960 --> 0:10:42.680 this opportunity. 0:10:42.800 --> 0:10:44.680 Weld, And you've been following this company for a while, 0:10:44.720 --> 0:10:46.560 but a lot of folks have had their eyes on 0:10:46.679 --> 0:10:50.440 human capital management companies. Just earlier this year, Paychecks for example, 0:10:50.720 --> 0:10:54.959 acquired pay Core. A lot of public companies getting bought 0:10:55.000 --> 0:10:58.200 up in human capital management. What are you seeing and 0:10:58.240 --> 0:11:01.439 what are your peer seeing that public markets are not well? 0:11:01.480 --> 0:11:04.000 You know, that's an interesting question. You know, we've so 0:11:04.480 --> 0:11:07.800 day Force really fits our profile very well because it's 0:11:08.280 --> 0:11:12.040 because of its revenue quality characteristics. So you know, just 0:11:12.080 --> 0:11:13.760 to go back for the history for a minute, because 0:11:13.800 --> 0:11:17.079 it's important to realize how unique this company is. When 0:11:17.120 --> 0:11:20.760 David also founded this company, he codd an original product 0:11:20.760 --> 0:11:25.080 and his thesis was, you know, core HR systems and 0:11:25.120 --> 0:11:30.120 then payroll systems and workforce management systems were all separate systems, 0:11:30.120 --> 0:11:34.040 separate databases, separate architecture. And David came with a very 0:11:34.040 --> 0:11:38.439 innovative thought is why shouldn't all that exist in one database, 0:11:38.520 --> 0:11:41.080 in one system. It provides a lot more customer value 0:11:41.160 --> 0:11:44.880 one basically end the end unified platform and the employee 0:11:44.920 --> 0:11:47.720 life cycle. So he came in and built a product 0:11:47.720 --> 0:11:52.000 that does all of that, everything from recruiting performance management 0:11:52.040 --> 0:11:55.000 to if I'm an hourly worker, I clock in and 0:11:55.040 --> 0:11:57.480 I know in real time how much money I've earned, 0:11:57.559 --> 0:11:59.320 and if I need to get paid, I get paid immediately. 0:12:00.200 --> 0:12:02.880 They do the tax withholding for you. So it's a 0:12:02.920 --> 0:12:07.040 really unique that value proposition that he built the company 0:12:07.080 --> 0:12:11.040 on is still unique in this big growing market today. 0:12:12.120 --> 0:12:16.360 And so look, we and this company has been probably 0:12:16.400 --> 0:12:19.440 in the seventh or eighth inning of a services to 0:12:19.600 --> 0:12:23.760 software transformation, and so what we're what we're really looking 0:12:23.800 --> 0:12:27.040 to do is just accelerate what they're already doing as 0:12:27.040 --> 0:12:30.120 a public company in a private context. And just to 0:12:30.160 --> 0:12:32.280 answer maybe the last part of your question, this company 0:12:32.320 --> 0:12:35.079 is having a historic year, right So, a couple weeks 0:12:35.120 --> 0:12:38.760 ago they announced their earnings. They forty percent year over 0:12:38.840 --> 0:12:40.880 year bookings growth for the first half of the year. 0:12:41.800 --> 0:12:44.800 Recurring revenue is reaccelerating, which is kind of unusual in 0:12:44.880 --> 0:12:48.520 enterprise software right now, and the market kind of yawned, 0:12:49.080 --> 0:12:52.280 and we think there's a big disconnect and a big 0:12:52.320 --> 0:12:56.560 opportunity to basically continue on the path that the company's on, 0:12:56.640 --> 0:12:58.719 but accelerating it in a private context. 0:12:59.040 --> 0:13:01.640 To be fat, anst hadn't yawned, there's only one cell 0:13:01.720 --> 0:13:04.800 rating and they'd liked the earnings in many ways because, 0:13:04.840 --> 0:13:07.520 as you mentioned, David, who set up this business thirty 0:13:07.600 --> 0:13:10.360 years ago, has been able to take on the new iteration, 0:13:10.480 --> 0:13:14.160 this generative AI. And I'm really interested, therefore, holden as 0:13:14.200 --> 0:13:17.360 to how much generative AI can add value at this moment. 0:13:17.400 --> 0:13:19.920 Is that already baked in, because we're all questioning valuations 0:13:19.960 --> 0:13:22.040 of generative AI related companies right now. 0:13:23.120 --> 0:13:26.959 Yeah, So, generative AI is a huge part of our 0:13:26.960 --> 0:13:29.199 investment thesis here, as it is for most of our 0:13:29.240 --> 0:13:32.319 software companies. But we think, I mean, I'm just taking 0:13:32.320 --> 0:13:36.959 a step back in this human capital management space. Every 0:13:37.000 --> 0:13:40.120 company in the world right now is thinking about how 0:13:40.160 --> 0:13:44.839 to maybe reorganize themselves, how to infuse AI into their organization, 0:13:45.400 --> 0:13:48.720 maybe how to change their organizational structure and hierarchies to 0:13:48.840 --> 0:13:53.560 account for AI. What kind of skills are needed and 0:13:53.600 --> 0:13:55.400 how much do they need to pay for those skills. 0:13:55.760 --> 0:13:58.760 These are all people problems, and so we think this 0:13:58.920 --> 0:14:03.480 space of general human capital management should be is a 0:14:03.520 --> 0:14:07.120 great opportunity for AI. For those companies that have data, 0:14:07.160 --> 0:14:10.120 they know how to protect the data, that have customer relationships, 0:14:10.720 --> 0:14:13.400 and so we think it's a huge opportunity. They have 0:14:13.440 --> 0:14:17.040 a really ambitious AI roadmap. They're already selling some AI 0:14:17.320 --> 0:14:20.200 skews today, but there's a really ambitious roadmap for next 0:14:20.280 --> 0:14:22.920 year to roll this, to roll out a bunch of 0:14:22.960 --> 0:14:25.280 AI agents, and we think we can just help them 0:14:25.320 --> 0:14:30.160 accelerate that path to basically an agentic AI human capital 0:14:30.160 --> 0:14:31.400 management software company. 0:14:31.440 --> 0:14:33.400 Well, then, just on that point, we would love to 0:14:33.440 --> 0:14:36.920 get your views on an MIT related study that seems 0:14:36.960 --> 0:14:40.080 to have gotten this market maybe a little bit worked up. 0:14:40.360 --> 0:14:43.200 The study that ninety five percent of companies who took 0:14:43.240 --> 0:14:46.960 on AI generative AI pilots, ninety five percent of them 0:14:47.040 --> 0:14:50.480 sold zero return on investment. Given your work with these 0:14:50.520 --> 0:14:55.040 types of companies and incorporating genitive AI ninety five percent, 0:14:55.400 --> 0:14:56.640 does that number seem right to you? 0:14:58.120 --> 0:15:01.560 Look, well, I would say we we focus. That's really interesting, 0:15:01.600 --> 0:15:03.360 by the way, because I do think there has been 0:15:03.400 --> 0:15:06.960 an issue with people really trying to measure ROI on 0:15:07.000 --> 0:15:10.000 their projects. Everybody's using it, everybody is using it, everybody 0:15:10.040 --> 0:15:12.960 knows it's the next big thing. But is ROI really 0:15:13.000 --> 0:15:16.040 being you know, measured in it? And are people giving 0:15:16.080 --> 0:15:18.880 customers things that they may not they may not want, 0:15:20.120 --> 0:15:22.680 And so we've taken a very measured approach. We think 0:15:22.680 --> 0:15:25.360 there's a real benefit to these SaaS companies that have 0:15:26.400 --> 0:15:29.680 incumbency and they have data advantages. But I think at 0:15:29.720 --> 0:15:32.400 that enterprise level, I think, look, obviously there's been a 0:15:32.400 --> 0:15:35.280 lot of uh, the easy ones have been the call 0:15:35.360 --> 0:15:38.240 center and product development. Those have been the two biggest 0:15:38.240 --> 0:15:42.960 areas for AI. I'd say cases that have generated really 0:15:43.000 --> 0:15:46.360 positive ROI. But I think there's also a lot of 0:15:46.440 --> 0:15:49.200 sprawl too. There's a lot of tools being sold that 0:15:49.240 --> 0:15:51.360 maybe aren't being totally utilized. You see that in some 0:15:51.400 --> 0:15:55.480 of these earnings announcements. So I think it's just important 0:15:55.520 --> 0:15:58.920 to be careful to ensure that there's connectivity between the 0:15:58.920 --> 0:16:02.680 customer's roadmap and your roadmap. So we think it's really important, 0:16:02.720 --> 0:16:04.960 but we are taking a little bit more measured approach 0:16:05.000 --> 0:16:06.920 because if you sell something a customer that they're not 0:16:07.000 --> 0:16:09.520 using or don't need, that creates problems down the road. 0:16:10.080 --> 0:16:13.000 It's been great having you both join, in particular Danny Berger, 0:16:13.040 --> 0:16:14.600 thank you for helping us bring the conversation, Tom a 0:16:14.600 --> 0:16:18.400 brother managing partner Holden Spain fascinating, particularly on that MIT 0:16:18.600 --> 0:16:21.480 report coming up. The CEO of Data Breaks joins us 0:16:21.480 --> 0:16:24.840 to discuss the company's latest funding round and whapping valuation 0:16:24.880 --> 0:16:25.840 of over one hundred. 0:16:25.560 --> 0:16:42.040 Billion is a breen bag tech Data Bricks. It's raising 0:16:42.080 --> 0:16:43.720 new funding and evaluation. 0:16:43.240 --> 0:16:46.280 That tops one hundred billion dollars the series K investment 0:16:46.560 --> 0:16:48.760 marks get this more than sixty percent increase in the 0:16:48.840 --> 0:16:51.920 data analytics software providers value because it's. 0:16:51.800 --> 0:16:55.800 A last raised money in December. Data Bricks CEO Ali 0:16:55.840 --> 0:16:56.920 Godsi joins us. 0:16:56.960 --> 0:17:00.680 Now, extraordinary growth, but extraordinary growth in apples of ai 0:17:00.720 --> 0:17:04.080 that you're currently building and helping with businesses translate their data. 0:17:04.200 --> 0:17:05.159 How do you accelerate that? 0:17:05.640 --> 0:17:08.119 Yeah, that's why we did this investment round. We were 0:17:08.160 --> 0:17:10.800 looking at the product portfolio and there's two areas we 0:17:10.880 --> 0:17:13.199 really want to invest in, and that's how we did 0:17:13.200 --> 0:17:13.760 the fundraise. 0:17:13.880 --> 0:17:15.240 One islake Base. 0:17:15.440 --> 0:17:18.640 So agents and AI is also going to revolutionize databases. 0:17:18.840 --> 0:17:21.119 I know we're thinking about how it's affecting society, but 0:17:21.200 --> 0:17:24.240 the database market is one hundred and five billion dollars 0:17:24.440 --> 0:17:26.399 TAM and what. 0:17:26.280 --> 0:17:28.840 We saw in the data is that eighty percent of. 0:17:28.760 --> 0:17:31.639 The databases are now being created not by humans but 0:17:31.680 --> 0:17:34.000 by AI agents. So that's why we want to invest 0:17:34.040 --> 0:17:36.800 it in our database product called lake Base. And the 0:17:36.840 --> 0:17:39.359 other side is a product we have called Agent Bricks, 0:17:39.600 --> 0:17:41.959 where we really investing it in how do we actually 0:17:41.960 --> 0:17:46.840 help automate tasks with agents at enterprises with high quality 0:17:46.840 --> 0:17:51.320 and high fidelity without hallucinations. So that's why we're doing this. 0:17:51.359 --> 0:17:53.200 We're investing it in those two areas that we think 0:17:53.240 --> 0:17:54.120 have huge potential. 0:17:54.200 --> 0:17:56.600 I can you kind of translate for audience, how different 0:17:56.640 --> 0:18:00.520 the technology is needed to cater for an AIA rather 0:18:00.560 --> 0:18:01.040 than a human. 0:18:01.480 --> 0:18:04.919 Yeah, so the agents move much much much faster. You know, 0:18:04.960 --> 0:18:08.920 we think we're slower, we take our time. These things 0:18:08.960 --> 0:18:11.280 just go all the time, right, there's no stopping and 0:18:11.320 --> 0:18:12.200 they can do it in perils. 0:18:12.240 --> 0:18:14.040 So there's many, many of them doing it. 0:18:14.359 --> 0:18:16.239 So what you need to make sure, For instance, if 0:18:16.240 --> 0:18:18.840 you're providing infrastructure for them, like a database, you have 0:18:18.880 --> 0:18:20.520 to make sure that the cost of that is low 0:18:20.560 --> 0:18:23.520 because they're going to spawn up and try many many things. 0:18:24.080 --> 0:18:26.359 It's almost like you can imagine that you have, you know, 0:18:26.480 --> 0:18:30.159 one hundred interns unleashed, running off trying lots of different things. 0:18:30.520 --> 0:18:32.400 So you'd like to lower the cost of it. 0:18:32.640 --> 0:18:34.400 You want to make it super fast because if they're 0:18:34.400 --> 0:18:36.399 trying to use a database and the database. 0:18:36.040 --> 0:18:38.600 Is slow, now you've slowed down all of the interns. 0:18:39.040 --> 0:18:39.840 So you don't want to do that. 0:18:40.040 --> 0:18:41.480 So those are some of the things you have to 0:18:41.520 --> 0:18:44.240 do differently, move faster, lower the cost, and let them 0:18:44.240 --> 0:18:46.400 experiment more because they're going to try lots of stuff 0:18:46.400 --> 0:18:48.600 and then they're going to pick the best result. That's 0:18:48.600 --> 0:18:52.240 not how humans operate because we're more expensive. We take 0:18:52.240 --> 0:18:55.199 our time, and then we're sort of you know, measure twice, 0:18:55.240 --> 0:18:57.280 cut once kind of approach, which is not the case 0:18:57.280 --> 0:18:57.880 with the agents. 0:18:58.040 --> 0:19:00.960 Let's talk about expensive humans as you've been adding I 0:19:00.960 --> 0:19:03.520 think about fifty percent by the end of this year, right, 0:19:03.520 --> 0:19:07.000 adding three thousand to your headcount. How expensive are those 0:19:07.080 --> 0:19:09.480 humans at the moment? Ali, given the talent wars we. 0:19:09.440 --> 0:19:12.840 See, Yeah, I mean it's it's I thought already that 0:19:12.920 --> 0:19:15.199 things were very expensive a few years ago, and we 0:19:15.280 --> 0:19:16.679 pay top of the top of the market. 0:19:16.720 --> 0:19:19.240 We compete with say Google, Meta and so on. 0:19:19.680 --> 0:19:21.960 But I would say the last twelve months or six 0:19:22.040 --> 0:19:24.200 months even have been insane. I mean, it just keeps 0:19:24.200 --> 0:19:25.560 going higher and higher. 0:19:25.440 --> 0:19:28.159 Two hundred million, Hi, Ali, Like, are you having to 0:19:28.320 --> 0:19:29.080 counteract that? 0:19:29.720 --> 0:19:29.920 Yeah? 0:19:29.960 --> 0:19:33.280 I mean, look, we're seeing insane offers out there. If 0:19:33.280 --> 0:19:36.720 the talent is really that good, we will pay up. However, 0:19:36.760 --> 0:19:38.760 it is also the other side of it, which is 0:19:38.920 --> 0:19:40.840 they're going to work together with their coworkers, and you 0:19:40.880 --> 0:19:43.239 want to have equity and fairness. If you have two 0:19:43.280 --> 0:19:45.840 people that have the same background, that they're equally good 0:19:46.240 --> 0:19:49.640 just because someone started six months ago, you don't want 0:19:49.680 --> 0:19:52.320 to suddenly have them make one tent of the person 0:19:52.320 --> 0:19:54.200 that's sitting right next to them. So if you don't 0:19:54.240 --> 0:19:57.440 keep that equity in mind, then people get unhappy, they. 0:19:57.280 --> 0:19:58.600 Talk, and then they will move around. 0:19:58.800 --> 0:20:00.679 And that's why we' seeing so much char learn in 0:20:00.760 --> 0:20:03.320 the AI market right now. People are switching jobs, you know, 0:20:03.320 --> 0:20:05.400 from this company and then back again and so on. 0:20:05.720 --> 0:20:07.399 So you want to also be a little bit thoughtful 0:20:07.440 --> 0:20:09.360 about it. But yeah, you have to pay up otherwise 0:20:09.400 --> 0:20:11.200