00:00 Speaker A
I’ve been reading the report too, Dan, and we talked about how Anthropic hosted the Enterprise Agent event, we talked about new partnerships, and it looks like software investors are kind of breathing a sigh of relief today. There’s some names in the green, IGV, Software Sector ETF, and of course, as you know, that sector has been destroyed, Dan. What do you think about this?
00:23 Dan
Yeah, “broken” is far from the word I would use. So there’s stakeout, stakeout, stakeout. So let’s go. Well, you know, they’re basically because of speculation that if a human announces Claude Cowork and then announces a plug-in for Claude Cowork, which essentially allows Cowork, which is an AI agent, to perform certain corporate tasks like law or research, well, okay, throw the baby out with the bath water now. You don’t need these software or service companies. I don’t need the service now, I don’t need it. Oh, and of course CRM companies like Salesforce. Oh, that was basically the horror going on. Oh, so last week they were devastated. This week, Anthropic announced that it will be working with several of these companies on rolling out new features, including plugins. Well, they’re going to integrate directly with things like Gmail and Excel. Well, they said they have various deals going on that will feed into these plugins and customization of this feature. So now investors are starting to say, “Oh, well, maybe it’s not the end of the world, maybe we overreacted a little bit.” So, I mean, I talked to some analysts last week and they said, look, this is an overreaction in a way, because these are specialized companies, they provide services to software companies in specific areas, right? So it’s not like these popular AI companies can immediately replicate what they’re doing and provide the same kinds of services. Eventually we’ll incorporate AI into our products, and that seems to be exactly what’s happening right now.
01:46 Speaker A
Yeah, that’s interesting, Dan, I’m curious to know how the CEOs of major technology companies are influencing the concerns of AI disruption in software, which you’ve been talking about and writing about. Nvidia CEO Jensen Wong has expressed the idea that AI will replace software, and it’s logical. Arm’s CEO described the stock price drop as microhysteria. Well, are they right, Dan? So, do you look to the future and say, “AI will eventually become a software enabler,” or do you listen to people like technology CEOs and think that they’re, in part, just speaking their mind?
02:40 Dan
I think they are, they are, it’s six to one half the other half, right? Because that’s what they do. Yes, but I think they’re right in that there’s not necessarily going to be an AI company that can overwhelm every software company out there. So companies like Microsoft, which is an AI provider and is an AI company as well as a software company, took decades to get to the point where they could do that. Well, open AI humans, they’re making rapid progress when it comes to AI, but when it comes to the actual software side, that’s not where they shine. So it doesn’t really make sense to think, “Okay, we have these cool AI models, look at what they can do with search, look at what they can do with chatbots, look at integrations.” Then you naturally think that software is going to go like a dinosaur. That’s not exactly how I think about it, but personally, this is the kind of tool I use within and with these apps. I mean, we had Word and PowerPoint before we had the Internet, and they never went away. They have adapted over time. That means we may not have the old encyclopedias that were installed on Windows 95 or the software that we read because it took us a while to get online. But we still have those features. So I think we’ll continue to see a situation where we have software companies, we have software tools, we add AI to them and we improve them over time. And I think that’s actually a more logical direction than thinking, “Okay, we’re done setting off the fire alarms and evacuating everyone’s software.”
