Qualtrics Unveils Cutting-Edge AI Tool: $500M Allocated for AI Advancements

0:00What can 160 years of experience teach you about the future? When it comes to protecting what matters, Pacific Life provides life insurance, retirement income, and employee benefits for people and businesses building a more confident tomorrow. Strategies rooted in strength and backed by experience. Ask a financial professional how Pacific Life can help you today. Pacific Life Insurance Company, Omaha, Nebraska, and in New York. Pacific Life and Annuity, Phoenix, Arizona. Breaking AI news today, Qualtrics says they plan on spending$500 million over the next few years on AI. So today on the podcast, we're going to be breaking down what exactly they're planning on spending that money on, why they're making such a big commitment, and what this means for the AI space in general.

0:48So this morning, Qualtrics, who is essentially the cloud-based customer experience management company, they said that they are planning on plowing this whopping$500 million into artificial intelligence over the next five years. So in unison with the announcement, they also, you know, dropped the curtains, as it were, on their latest brainchild, which is XMOS2. It's definitely a mouthful for as far as a product goes. I don't know who's in charge of branding over there. I probably would have picked a more pronounceable name. Even Google Bard, which personally I think Bard is a terrible name, but even Google Bard has a better name than this.

1:30In any case, this comes with really decked out with AI capabilities that are primed for enterprise experience management, which is right in their field. So Qualtrics's CEO is Zig Serafin, and he said, for the very first time, we're bringing the power of generative AI to every part of our platform. In their official press statement, he also said that this is, quote, the most important innovation in experience management since we launched the category in 2017. So as juicy as this sounds, Qualtrics' investment plan really is breaking down to around$125 million a year over four years. Sorry, not a five-year period.

2:14This is a four-year period. So what they plan on spending that on exactly is still a bit of a mystery. Now, this comes on the back of a number of other firms that have made claims or made announcements that they're going to be spending heavily on AI. You have SAP, who is investing in AI and has plans to invest heavily in AI. You have Accenture, who has made announcements they're investing heavily in AI. You have Salesforce, who has made some massive AI funds. And all of these companies are making$100 million, in some case, billion dollar funds of what they're planning on spending over the next number of years.

2:51Now, the reason that these companies are making these announcements, number one, of course, is it's just good PR. Number two, it's to stay relevant. Number three, I mean, when it comes to a lot of these consulting firms, they have to do this in order to kind of signal to the companies they're consulting for that they're taking this seriously. They're going to be a big player in this space. They're going to be able to help them take the next step in the AI revolution. which really is the next step in computing. But beyond this, something I think is interesting, you know, of course, these big headline numbers like 500 million or$1 billion, of course, these things sound really massive.

3:27At the end of the day, though, I think what is interesting to note is the fact that, you know, a lot of these companies are saying they're gonna be spending that much on AI or they're gonna be investing that much into AI, when at the end of the day, I really believe that software, computing, business, SaaS, It's all moving in a direction where almost all companies will be integrating AI. So honestly, it's like a lot of that capital that they're allocating to quote unquote AI is really, in my opinion, just getting allocated to software and new tech, new, you know, GPUs or, you know, maybe they're going to be training their own AI models.

4:02But a lot of this stuff, you know, cloud computing, all that kind of thing. So like if they're spending, you know,$20 million on cloud computing and they have an AI element to what they're using for their platform, they can call that$20 million an AI investment. And so I think it is important. I'm not necessarily saying that's what's happening with Qualtrics right here, but I am saying it is important to kind of like keep in perspective the fact that when these companies say they're making like a billion dollar investment into AI, it very well could be money they would be spending anyways, right, on employees or on software.

4:37But now all employees have to know AI and all employees and all software has to have AI integrated. So now it's an AI investment. So, you know, just keeping that on the top of my on the top of the of the docket. In any case, I think the specifics of how Qualtrics is planning on spending their five hundred million dollars is going to be cut across different company divisions. And it's going to be targeted towards particular projects that are still up in the air. So we're still, you know, in the air waiting for more information on Qualtrics on what exactly they're spending it on. But, you know, based off of what I was saying earlier, you can essentially assume it's going to be spent on training their staff, employees on AI techniques.

5:18They obviously have this new AI product that they're bringing to market. So training that, integrating that, marketing that, right? the marketing dollar spent on this new AI project and this new AI tool, which is inevitably going to be all of their marketing dollars because they're going to use all of their marketing to mention this AI tool, I'm assuming. And so at that point, that all gets included. So it's almost like when you pivot to launch an AI product and you say we're going to spend 500 million on AI, it's like, well, that's just your capital expenditures anyways, but whatever. Okay. So I think that being said, if this financial gamble, as it were, comes to fruition, Qualtrics will join the league of tech behemoths who are really showering cash into this rapidly growing generative AI sector.

6:05So we have Salesforce Ventures that I mentioned earlier, and that's the venture capital arm of Salesforce. But they actually specifically said they are going to spend$500 million for startups innovating in generative AI. That's interesting because they are going to be acquiring or partnering with those startups, helping fund them. Sapphire Ventures is parking over a billion dollars for enterprise AI startups. Workday recently announced that they're going to be beefing up their VC fund by about$250 million specifically to back AI and machine learning startups. And again, when it says to back AI startups, like it sounds awesome and it is awesome because AI is amazing.

6:42But like a lot of startups today, actually any startup today almost that is raising capital is raising it because they've added an AI element to what they're doing. So just, you know, bear in mind as everything seems like, oh my gosh, there's so much AI hype. Everyone's spending so much money on AI companies. Like people are investing everything in AI companies. Like it's not very hard to turn your, this is going to sound bad. It's not that difficult to turn a startup into a quote unquote AI startup. adding AI elements has never been easier with APIs and access to tools like ChatGPT. And I mean, I'm a prime example of that.

7:20When ChatGPT launched my startup SelfPause, which was largely a positive affirmation mindset coaching kind of startup, we very easily were able to add a whole bunch of new, really powerful, amazing AI tools because of APIs like ChatGPT and some special in-house technology that we were able to put together. And we were able to turn our regular mindset coaching startup into an AI life coach. It's something we dreamed about, planned about, thought about, but it wasn't very viable. It was very financially expensive. And then all of a sudden with the advent of ChatGPT, we're able to very quickly access the API and roll out some really impressive features.

8:01So I bring that up to say, you know, self-pause, my previous startup, wasn't the biggest startup in the world. It didn't have the most insane amounts of venture funding. But even with our small and nimble team, we're able to pull something off very, very quickly that was very powerful. And so I bring that up because when all of these companies are announcing that they're going to be backing AI startups, every startup will be or... Yeah, I think every startup is inevitably going to be an AI startup that is raising money in the next little bit. And so when people make announcements about what they're going to spend on AI, They're just spending it on the regular startup, just the ecosystem change.

8:39We added the AI word in front of everything. Okay, so in any case, AWS, in addition to all of those other companies not too long ago unveiled that it is going to put$100 million into a program for generative AI endeavors. And then you also have Accenture that I mentioned and PwC, they're also making some big plans. They're going to be pumping$3 billion and$1 billion. Accenture's$3 billion, right? That's pretty massive. and a billion dollars for PWC into AI. And then, of course, we have SAP that, you know, I covered on the podcast earlier today, but they just announced that they're backing Anthropoc, Coher, and Alpha Alpha.

9:16So I think forecasts by McKinsey right now suggest that generative AI has the potential to add a staggering$4.4 trillion annually to the global economy. And so that, I think, is actually a very important number. I think that number has a lot more weight than all of these companies saying, we're going to spend$3 billion on AI, We're going to spend a million or a billion on AI. This is different because this is McKinsey saying they believe AI has a potential to tack on an additional$4.4 trillion. So a global economy will grow in addition to what it was going to do otherwise. And I think that's a number that you want to actually calculate.

9:53You know, it's like if if a lot of these companies were being super transparent, they would say we're planning on spending X amount on our expenses and on investments on software and blah, blah, blah. And an additional is, you know, exclusively for AI. But now everything's AI. So whatever. OK, I'll stop by repeating that. In any case, I think not everyone is convinced that this is a gold rush. Some strategists caution that the AI frenzy is eerily reminiscent of the tech bubble in the 90s and may not necessarily translate into a lot of profits for these companies. And I do believe that there definitely is a lot of that hype and a lot of that, there is a lot of that bubble kind of feeling around AI right now.

10:35But I will say there's two things that are fundamentally different. Number one, like I've been talking about before, when people are mentioning how crazy AI is and how everything in AI is exploding. Honestly, a lot of things that were just regular startups just got relabeled as AI. And so I think that the baseline is actually a little bit lower. And then in addition, I think that AI fundamentally shifts a lot of things. We see a lot of real world applications that we did not see before. And AI is doing a lot of really powerful, impressive things. So I think that it is a little bit different in those regards.

11:08And so there is, you know, those things to take into consideration. In any ways, this is a massive area. we're going to be following very closely what other companies are announcing major investments into AI in the future.