00:00 Speaker A
I’m also reading reports, Dan, while we have you about how Anthropic hosted its Enterprise agents event, talked about new partnerships and it sounds like software investors breathing some kind of sigh of relief today. I see some names in the green, the IGV, the software sector ETF, that’s in the green, but of course that, you know, that that sector has been clobbered, Dan. How are you thinking through this?
00:23 Dan
Yeah, clobbered isn’t even close to the term I would use. I mean you have pile drived, pile driven, pile driven. We’ll go with that. Uh, you know, they they’ve been just destroyed because of basically speculation that when uh anthropic announces claude co-work and then plugins for its claude co-work, uh which allow uh co-work which is essentially an AI agent to perform certain enterprise tasks like legal or or or research, things like that that well, okay, you just throw the baby out with the bath water now because we don’t need these these uh software and service companies, we don’t need service now, we don’t need uh CRM companies like Salesforce of course. Uh and so that was basically the the going fear. Uh and so those got just, you know, decimated last week. Now this week, uh Anthropic announces that they’re going to be working with some of these companies when it comes to rolling out their their new features which include plugins, uh they’ll, you know, work directly with things like Gmail or or with Excel. Uh they they said that they have different deals that are going on uh that’ll feed these these plugins and and this capability customizations. And so now we’re starting to see investors say, oh, well, maybe it’s not the end of the world, maybe we, you know, said bit overreacted there for a minute. And you know, I mean, I I spoke to some analysts uh last week who said, look, this this is kind of a a wild just over reaction because these are dedicated companies, these serve uh uh software companies to a specific area, right? And so it it’s not as though these these general AI companies are going to be able to immediately replicate exactly what they do and then provide the same kind of services that they do. They’ll eventually just kind of work the AI into the product and that seems to be exactly what’s happening now.
01:46 Speaker A
Yeah, it’s interesting, Dan, just, you know, on on these AI disruption fears in software, just to see how big tech CEOs are weighing in and you you’ve talked about this and written about this. You have Nvidia CEO Jensen Wong saying the idea that AI replaces software, it’s a logical. Arm CEO described the sell-off as micro hysteria. Um are they right, Dan? I mean, do you look ahead and say yes, AI ultimately will be a it’ll be a software enabler or do you think, you know, when you hear tech CEOs like that, are they in part just talking their book?
02:40 Dan
I think they’re they’re they’re it’s it’s six to one half does the other, right? Because it’s they are doing that. Yes, but I do think that they are accurate in that there’s not necessarily going to be, you know, a an AI company that can come in and just roll over every software company out there, right? I mean, you look at something like a Microsoft which is a AI provider and AI company as well as a software company and it’s taken them decades to get to the level where they’re able to do something like that. Now, you know, Open AI anthropic, they’re they’re advancing rapidly when it comes to AI, but when it comes to the actual software side of things, well, that’s not exactly where they’re playing. And so it doesn’t make sense really to think, okay, we have these cool AI models, look what they’ve been able to do uh with search, uh look what they’ve been able to do with with chatbots, uh the integrations. It it just leads you to think then, well, of course the software is going to go the way the dinosaur. That’s that’s not exactly the way it’s going to be the way I think about it on I you know, personally is that it’s more of a tool that you would use within these apps or or alongside these apps. So, you know, I mean, we had Word and PowerPoint before we were using the internet, uh and they didn’t go away. They adapted over time, you know, I mean, we might not have those old encyclopedia uh, you know, piece of software that were installed on Windows 95 or whatever that you would read because it took forever to get online, but, you know, we still have those capabilities. And so I think it’s going to stay that way where, you know, we have these software companies, we have these software tools and then we’re just adding AI into it to improve them over time. And I think that’s really the more logical direction rather than thinking, you know, all right, well, pull the fire alarm, everybody evacuates software is done.
