00:00 Speaker A
AI has become a software wrecking ball, so let’s stick to it. A lot of investors have just decided, “Listen, AI is the death of software.” That’s the story, that’s the story. Like IGV, do you think Microsoft, Salesforce, and Adobe are the victims? Well, is that fair or is that an exaggeration?
00:27 Speaker B
I think the market perception is that AI will change the economics of software. Well, I think there is a risk. Um, but on the other hand, AI also creates a huge demand for software, and when you look at the backend side, that’s not factored in. If you focus on the risk itself, um, I think there are certain areas of the software market. For example, areas where workflow integration is shallow, data moats are very weak, and the benefits of decentralization are non-existent. Business models lean primarily toward seat-based pricing, which can be automated or disrupted by AI-enabled solutions.
01:08 Speaker A
Listen, are there any of these that you say are easier to defend for me?
01:11 Speaker B
Yes, the enabling side of computing. There is a lot of software that realizes AI. Now, when you think about services, you think about things like Salesforce and some data tool solutions and databases. Well, again, data is the fuel that keeps AI running. When you think about scaling AI applications, there’s a long list of backend applications that are actually making that happen, right? That’s why software is being sold indiscriminately everywhere in the market right now. Well, I think you’ll see that really moving AI forward and that’s reflected in our earnings over the next few quarters. The other side of the story is cybersecurity, right? AI increases a lot of cyber risks. Well, I think cyber security has a very good place in the AI era.
02:00 Speaker A
Do you have a particular cyber name that you like?
02:02 Speaker B
We like leaders. Look, Palo Alto, CrowdStrike, Zscaler, all the opportunities. If you think about it, cyber is a point solution. There are many needs that need to be addressed. Therefore, we believe that a diverse approach makes sense. Well, if you think about a cyber security ETF like Bugs, it includes the top 10 companies in the cyber industry that derive more than 50% of their revenue from that space. And I’m going to take a very diverse approach in that dynamic.
02:37 Speaker A
Jared, it’s always great to see you, especially on set. thank you.
02:40 Speaker B
Thanks for hanging out with me, Josh.
