E537 | This Week in European Tech with Dan, Mads & Lomax

31:55Obviously, it would have been better not to have it. There will be a bill to pay, not just for European business, but also for US consumers. certainly in the short term, it will have some inflationary pressure. We've already seen the July data showing that some of the import intensive categories are leading the price increases. Core goods inflation is up and it would be up even further if it wasn't for some of the auto price changes we've seen where people have been running down inventories as opposed to actually importing with a bigger tariff. So yeah, lots to unpack. And I think we probably are at the end of the day, we probably made this bet ourselves and this is where we are.

32:33Now we can talk about all the things we can now get out of it, but I'm sure you're going to come on to that. Yeah, yeah, yeah. Well, let's start with winners and losers, Lomax. How does this break down in reality? I think there's two ways of looking at it. I mean, you know, as Matt says, so this is the biggest trading block relationship in the world, right? It matters for both blocks, clearly, and the people who live within them. It's quite clear that if we want access to the biggest economy in the world, these are the terms, you know? Like it's sort of, we could choose not to have access to it, or we could choose to have access to it at higher prices with the 30 % tariffs.

33:08This is the deal that's shaken up. I think Europe's, I think Trump's done a good deal here. I think Europe's a bit on the back foot. There's a bit of an irony here that we've all been talking about the European sovereignty angle in the last 12 months. how Europe now needs to invest its own defense, core capabilities, infrastructure. Yet here we are having a gun put to our heads and being made to buy more US defense supplies. And we've seen that when you become reliant on a supplier, you become reliant on the upgrades, you become reliant on everything, and then they could shut your operating system off mid-flight.

33:48So, you know, the whole point literally of the narrative in Europe in the last 12 months has been how do we build sovereignty in our defense supply chains? One of them is owning your own critical infrastructure and technology. And suddenly we're now like it's shocking to me. And I hope it's clear that defense is not just a sideshow here. It's not a two, three, four, five percent of GDP because it underwrites the democratic system in which we live. it's incredibly important because many, many things flow from that. I think we've seen the importance of that in the last few years. So you just take that as an example.

34:24So we talk about European sovereignty. We do a deal where we actually give it away in some respects. I think Trump's played a blinder here. He's procured 600 billion of investment from the EU into his manufacturing capabilities. I mean, yeah, we'll see how that plays out. But we're sitting here complaining every week about the lack of money that goes into our own company. So suddenly someone's got to find 600 billion to go. So actually for startups, don't forget software, of course, is not captured by this. This is goods. So hardware startups will be hit by the tariffs. But I think, you know, in a way, for European startups and scale-ups, one message could just be, particularly if your software heads down and build.

35:08But at the same time, it's like, well, you know, you look at all of this funding, which will now go to the US. I think the US is the winner here. what's the reality i know no one will know but what's our opinions mads chime in as well what's our opinions on what's the reality of what will move to the us what will be invested in the us lomax i don't know if you've got any thoughts on that no i think i mean often these things you know it's about the the pr and the the new statement on the day is is try i mean you know trumps everything you know so it's the most important thing so stuff always gets watered down at the back end.

35:41But still, you sign an agreement with the US promising to make these investments, like, you know, they're going to, especially this administration, they're going to hold you to account for it. I reckon this is a delay tactic. I reckon he's got three more years in tenure. I reckon this is just a delay tactic. Keep him happy. Sure, sure, sure. We're going to do it. Mads, is that real? I think there is something to that. Clearly, the alternative was untenable. The German automotive sector looked at 30 % power, which was the alternative, and said, no way, it's unaffordable. 50 % is not nice, but we can deal with it.

36:15And so, yeah, it's probably a hope that when this current administration passes on and passes the torch to the next, that some of this could be ameliorated a bit. I mean, Lomax, you've seen a bunch of cycles around this, as we all have. What's the context here? Do you know, didn't we come from 10 % tariffs each way before the 30 % threat and then the settle at 15. What's been the EU-US arrangement in the past? I personally think the actual tariff number is not shocking and something we can live with. And I wouldn't get too heated around the 15 % number. I think, yeah, you take it in the historical context.

36:57If you go back 100 years, tariffs were way higher and obviously a massive driver of revenue for the US government, for example. So they meant a lot more. No, no, I think 15 % now, I think it's like, that's not the big problem here. It's the other things that I'm worried about. It's not the absolute number. 30%, as Matt said, is a major problem. You know, whether it's 10, 15, and, you know, Trump's, Trump, you know, it's midterms next year in the US. So, you know, Trump is going to be, the tide will be going out for him. And as you said, there's a bit of a delay stalling tactic here. Yeah, but do you know what?

37:31If you look at the registered voter sentiment, even though his, I've forgotten the right term of phrases, but even the sentiment towards Trump is extremely low. The sentiment towards the Democrats is even lower. It's not like they have any. There's no viable alternatives. Yeah. No, it's like nobody likes Trump, but they trust the Republicans more across all of the factors in government more than the Democrats. So I'm not sure how the midterms are going to go. it's a really weird situation that we're in but mads i mean kind of stay stay on the european tip and stay in our world what does this mean for founders is there anything that we should be thinking about doing differently worried relieved would you back to what lomax always lomax always says you know heads down and and build and i think actually 10 15 we can live with if you're pure play software company this shouldn't change too much for you if you are a mixed mode software and hardware, you've got to think about how you procure and what your supply chain looks like.

38:31But even so, if you're in B2B, 15 % on import, it's not 15 % off your revenue, right? It's 15 % off cost. So you can probably work that into your supply chain somehow. If you're a pure play hardware player, if you do consumer hardware, it'll be really difficult. You're going to have to think about moving your manufacturing to the US or at least the assembly and kind of the final parts. Interestingly, we have a chatting to a US hardware founder the other day talking about procurement of um key critical items for their supply chain still much cheaper to get the stuff outside outside of the us a lot cheaper you know this is what this is what i think we're going to end up i think there's going to be lots of head nodding love affairs with trump lots of sycophancy but the reality will be that the rest of the world will be looking at each other to be more insular and to manage their own supply manufacturing energy my personal take is there is a bit of a delay tactic sure yeah smiling at each other's faces watching watching von der Leyen's faces as trump was talking about windmills was was quite hilarious when you watch the leaders sitting when you watch starmer and von der Leyen sitting there next to him they're just like how the how the f do i get out of this meeting without you know like a zelensky style thing yeah and when when trouble banging on on edge when he was going on about sadiq khan and then and then starma's like looking around the room going well he's a friend of mine and he's getting a very bad mayor for london and oh my goodness yeah so i i i think they're playing it perfectly lots of love who was the guy that was in the who's in the oval office who was just like absolutely blowing hot air up up trump's bum it's one of the bigger yeah brilliant i love you you're amazing.

40:21Everything's amazing. He got sick because he was doing it in text as well. Yeah, exactly. Yeah. Anyway, there is a longer term play to this. I mean, I think short term, it's pretty clear how this is going to pan out. Longer term, what's going to happen? And I think, look, we've sort of been able to tell ourselves what in retrospect were some lies historically, right? That it was fine to cut our defense budgets down to sub 2 % because it didn't matter because the Yanks would come to our rescue. Well, now they have. They've just also sent the bill. Okay, so that strategy doesn't work. That's actually, that's quite an important lesson for us.

40:52And I think that will change how we act over the next decade or two. And it will mean that when this is relitigated, renegotiated down the line, we're going to have a different position, a different posture. I think that will have a ripple effect through the technology sector. As you always point out, so much of tech started with defense. And if we have more defense investment in Europe, much more that will be funneled to European companies that'll drive tech, that'll drive innovation and i think that will create more great homegrown companies that we can rely on so i do think it will long term hopefully help to shift the balance of power i certainly think that's a viable scenario yeah i listen i you know i bang on about i know i know i'm a party of one on this but i do i do think defense and resilience and the broader layers of the onion are going to do wonderful things for europe i i absolutely passionately believe that so i'm going to stay with that upside optimistic view, but staying with AI because Mads, this is your AI corner, my love.

41:47It is time for AI corner. We've got loads of, I mean, the docket is full and also wonderfully lots of German amazingness. So we've talked about Anthropic. They're looking at a$5 billion fundraise. For context, they only raised 3.5 in March. So this is like another massive quick cycle, but as you've already talked about, not crazy, crazy hype stuff. There's a lot of fundamental growth in that bucket too. Germany is crushing it in so many ways. This week, they're celebrating its largest ever AI exit. I'm going to say this wrong, but Cognigy. Cognigy? Cognigy. We're going to go with that. Plus N8N, the open source workflow automation tool there.

42:26They're looking at a$1.5 billion valuation. So that's great for Germany. Over the pond, OpenAI is still shipping a gazillion features a week, the latest being study mode. But Mads, let's start with Anthropic. $5 billion. That's more than most European countries' entire VC funding. What does this buy them? What are they doing? Oh, as you said, it's not that long ago, they raised the$3.5 billion round. And that was in the context of them hitting that beautiful$1 billion ARR level at the turn of the year. Now, remember, that's the same number Figma's just gone public with. So$1 billion in ARR, that quickly grew to two within a few months, then three, and then four in May.

43:06We suspect they're at the$5 to$6 billion ARR level now. And in the context of that,$170 billion valuation, which is what they're reportedly gone out at, doesn't sound completely crazy. That sort of puts them around the 30X multiple. So it sounds plausible, especially considering that they could be a$10 billion run rate by the end of the year. What are they selling? How can they get there? Why are they so popular? Well, let's put this in this juxtapose with what's come out of China. We've seen Moonshot's KMK2 model. We spoke about that a few weeks ago. Since then, Alibaba launched their new release of Qn3, and they've launched a direct competitor to CloudCode, that incredible tool that Anthropic has built for coding.

43:56Alibaba now has a completely open source alternative that's really, really good. and it's priced at 22 cents per million tokens versus the 15 bucks you pay Anthropic. So that's 168th the price. Yet Anthropic keeps growing. Why? And this is sort of back to what we think is the enterprise reality of the large enterprises looking at this saying, there is so much value in these AI tools. to use them, we have to send our data to somebody else, at least today. And so we can either send that to a US firm located in California, or we can send that to China. Just no way, even if it's cheaper. But of course, the question becomes, well, Alibaba's model is open source.

44:46And once folks figure out how to rig that, it's actually not that hard and set that up locally. Could that start to threaten Anthropics margins? And this is the big game of chicken everybody's playing right now. So far, it doesn't look like it's slowing down, Anthropik or OpenAI, in any meaningful way. But are we going to see an impact at some point? Most people expect so. It would just make absolute logical financial sense if you can own the stack and have the same functionality at that 1 60th of a price point. It just seems bloody obvious. but Lomax tell us about the this kind of great German unknown Cognigy which no one's ever heard of yeah it's a terrible name and actually both German companies that you mentioned NA10 as well is also a terrible name I mean at least they can deliver numbers it seems but um someone needs to have a have a chat to their you know branding branding marketing department need a chat so Cognigy is a bit of a sorry I don't actually I don't know I mean I you know let's just stick with that so firstly it's a great result a billion dollar exit for a european tech company another overnight success story you know years in the making so founded in 2016 in dusseldorf the company has been acquired they raised series a series b series c 170 million dollars you know kind of general kind of standard vc trajectory it's in you know like it's a boring company as in like in a way it's it's working on call centers and support centers and customer support it's not sexy, it doesn't grab headlines.

46:20Maybe that's why it has a boring name. It's sold to a company with an equally kind of bland name, which is Nice, which is a publicly traded software firm. Yeah, headquartered in Israel actually, which is focused on the AI driven CX basically. So customer experience and compliance software. So the takeaway here is great to see a billion dollar exit. We had the$33 billion exit with Wiz earlier in the year. Now we have a slightly European smaller version of that. And this company has built, you know, a solid business. And it's a great exit for the VCs and the founders involved. So good luck to them and the money will be recycled.

47:01Good news story. Yeah, loving it. And a good European news story. Good European news story. It's a good example of the fruits of AI being born in areas that is not, you know, you asked about coding and vibe coding and engineering earlier. This is not, you know, eating away at engineering. it's eating at sort of back office, you know, white collar with a small W and C jobs. So yeah, for sure. Is there more to come? Is Germany now the AI powerhouse? I think it's certainly one of them. I mean, we've seen some really interesting things come out of France with Mistral, lots of great success stories coming out of the UK.

47:40And we've seen some great success stories coming out of Germany as well. And I guess it's the thing we sometimes forget, which is Europe is not just like a kind of one central silicon valley thing everything gathered we've got all these different hubs and you know maybe that's part of our strength well let's have some in the uk please no wave's done well i mean you've seen you've seen some companies you know really get off to great 11 labs wave's the only company right yeah wave raised over a billion dollars in one round last year you know there's stuff happening yeah baby so there we go now now we're back to upside so well when you compare the uk to germany then i'm happy you know all day long i can sit here but um it's when you compare it to the us that sometimes i'm i feel myself on the back foot a bit more yeah sure sure although i do i do believe with a lot of this stuff and we had this chat yesterday a lot of this stuff is inertia sure there's the volumes of cash and we you know that's just blatant obviousness but there is a i do believe there is a period of inertia one thing i would say is actually it's funny because of the hugeness of the numbers that we've seen and the last two years in the US or the last 12 months, you know, scale AI, 15 billion, WIS 33 billion, Winsurf 3 billion after about 10 minutes or whatever it was, 2.4.

48:54Like, because, you know, you've seen these numbers go, I mean, again, WIS was 33 billion in what, four or five years, like very short amount of time. The expectation has moved so high that when something like this, like a billion dollar cash exit happens in Europe, you're kind of less excited about it but if we if we were talking about a billion dollar exit you know two or three years ago in europe we would have been like jumping i would have been jumping out the window like you know these are actually there i would have flown i would have flown to the coffee shop below i don't know but like my point is these are not insignificant numbers and you know if you look at i think european venture is on track to raise like a measly 10 billion this year.

49:41And so you need the money to be coming out the other side. I think European venture exits are only kind of 15 to 20 billion a year. So you've got one company just delivering 1 billion, you know? So I think it's great to see. We had Oxford Ionic sell for a billion dollars two, three months ago. Again, we were excited about it, but we weren't that excited about it. I mean, you know, I remember when, you know, DeepMind sold for 450 million, whatever the number was 10 years ago. And everyone was, that was literally for eight years. That's all anyone could ever talk about. The fact that we're getting a bit more immune to these things happening is a good thing.

50:14Although, you know, it doesn't help when the US is pulling out such, you know, the bar moves again, the goalposts move, you know, we get to a billion, now it needs to be 10 billion. Well, this brings me on to my last question for you both, which is, are we just the US's incubator? How do we, we're going to talk about Project Europe in a second, which is, I think, a really interesting, positive topic to talk about. But is that and are we just an incubator for the US? I don't know if we're just feeding Silicon Valley, Mads, if you want to start that one. I think that's down to us. I mean, we've talked about the issues around listing companies.

50:50We've also talked about just today how there was this idea that everything had to be M &A and private markets because public markets weren't paying up. Well, guess what? Figma kind of shows a different story. Then we've been talking about how firms can't IPO in the UK anymore because there's no capital. And we've talked about what needs to happen there. I think some of this is down to us. We need to capture markets reform. We need to reform the way investments are made. We need to make sure the money is there. We need to reboot public markets. And then I see no reason why some of these companies couldn't go down the IPO route instead.

51:21I do hope the market is swinging a little bit back. Let's not forget, private markets is an extremely expensive way to access these companies at the late stage. So when you have a seed or a series A stage startup, that's not going to IPO. That requires the specialists and venture capital of close collaboration with founders as you build the business. But once you get to a billion dollar in revenue or$2 billion in revenue, you don't need growth investors sitting on two and 20 managing your investment. It's a much deeper way to access capital through corporate markets. You just need to design the system so the capital can find its way there to the stock exchange, right?

52:04So you need to make it not too onerous on the companies to IPO and you need to make sure that the capital is actually not disincentivized from trading publicly. It'll be a cheaper way to access the capital. And so I'm convinced that's the way we have to go back. So I think you solve those problems. You'll solve exactly the issue you talk about. I saw some of the chat search results from OpenAI, which kind of pricked my ears up. When you scratch underneath the story of that, there is a toggle in chat GPT that can make your searches public or not. I think people have to be very mindful as to how they use LLMs, but I did see some searches appear.

52:43As I was looking at study mode, and Mads, I don't know if you've got any notes on study mode. I know that OpenAI are launching a gazillion products every 10 seconds, but what's happening with study mode? What is it? I think I was most excited about when OpenJetGPT was launched publicly back in 22 was this idea of how we can transform education. Because for eternity, education has been a mark of privilege, right? You go back in time and kind of the registrars said they had their own personal tutors and that was the way they learned. And so today we have universal education, but there's still a sea change between folks that are more privileged and folks that are less privileged in this space.

53:28And I think with Le La Lens, for the first time in history, we genuinely can provide a personalized tutor for every child, every subject. And I think it's so exciting. I think you can liberate humanity in a way that I almost can't think of anything else that could do that to the same extent. And so I think study mode is just a really exciting advance towards that. Now, this is probably not going to be the huge moneymaker for open AI. I mean, education might be sort of a$7 trillion global spend, but they may not be able to monetize it in that way today. But I still think it can be transformational if we implement it correctly in education.

54:08I saw another, I think it was a billion dollar deal. I saw an investor buy or invest in an ed tech business this year. it was a mega ed tech deal and he was effectively trying to work out how to convert all of the material into ai tutors so i'll find out more details on that and we can we can catch up on that another well one of the things that absolutely first of all i think this is fascinating for ed for the category of ed tech as a whole because it's like in a way which for context if people don't know is an extremely unloved unsexy area for venture capitalists it's been it's been very very hard i mean i i give you like i in learning portuguese for example i now use chat gpt i don't pay for duolingo anymore right so that's an interesting you know i run my own exams that i do with with chat gpt as an example so it sort of pays into what we've been seeing which is that for the first time like like open ai what open ai does can really really affect what you're looking at as either a founder in terms of what to build or in terms of an investor what to invest at the early stage because you go, oh, we're going to invest in this vertical, whatever.

55:11So what happens if we're opening AI and move into it in a year's time? Is that going to be a problem? Well, Chatt-GPT is going to come and just wash this thing away. And, you know, that's very, very too much of a simplistic overview there, but it is something to consider. There is also, I mean, maybe this leans into the EdTech piece, but there also Europe has to lean into what it does well. So what works for Europe, Mads? what should we how should we be thinking about ai and how what should we be doing with ai and i know that we talked about this application layer and edtech and that piece but what else how else do you think about this just the obvious really you know we should compete where we can win and it turns out that we can in applications we really can compete and we can win as we've seen with coffee and with some of these other deals that have happened i think europe has got a lot of strengths in regulated industries.

56:04We know there's a lot of compliance in figuring out how to navigate that. Workflow automation, what we saw with N8N is another one. So focus where we can win, of course, which is an obvious thing to say, but I think that is what we should do. Yeah, and as we are now opening, as the application layer has obviously proven, open, running, going, I think this is an exciting time to be alive for founders globally. And obviously Europe is going to be a massive player. We have all the talent doing incredible things, which then very neatly ties into what Harry Stebbings is doing with Project Europe. And I'm a big fan of this project.

56:44I think, OK, it's small numbers. It's batch one. It's only six startups. But this is just such a fabulous thing. And so for Harry and Kitty, he's running the show there. I think this is brilliant. So for context, Harry Stebbings, the podcaster turned VC. announced his first batch of Project Europe investments, that's six teams, and it looks and smells a bit like the Teal Fellowship or Y Combinator and building that in Europe. They're investing 200 ,000 euros into startups focused on hard technical problems. Sound familiar, Mads? Not just another AI rapper. This is the thing that I feel slightly conflicted with, but they're only investing in founders under 25 and then placing in the who's who of European tech to mentor, advise and support like Matty from Eleven Labs, Stefan from Syntheja, Sebastian from Klarna, assuming they have the time.

57:40I don't know how that's going to work, but good for them. Now, this is designed to keep European talent in Europe. Again, going back to our are we the incubator for Silicon Valley? Not sure how that's going to work. I think it's freaking cool. I think we absolutely need to celebrate it. But Mads, I wanted to start with what it is and the chosen verticals, which smell and sound very similar to ours. It's not broad like YC. What are the verticals? Does this expose its thesis on European venture? How does it all fit together? I think it absolutely does. So six companies selected, I should say, not consumer, not social, not SaaS.

58:15It's kind of real deep tech, it's security. And he's in defense and robotics with zero industries, which is around autonomous drones. Phylon, which is sort of general purpose robots. You've got some brain computer interfaces over at Cerebionics, which is kind of mind controlled robots. Sounds very sort of sci-fi and exciting. You've got some CyberSec with Hackthron AI and Hiker. And we've seen how there's been some incredible exits this year in cyber, right? We're going to talk about another one today, I believe. So these are cool spaces and then kind of the mobile infrastructure at Cellify. What this tells us is that he is betting on European technical depth.

58:54So it's not just business model innovation. It is deep tech. Four out of the six are really about hot tech requiring serious engineering that's playing to these European strengths and robotics and industrial and defense. And you could to some extent say it's almost totally anti-YC. It's really deep tech over quick flips. This is stuff that could take a decade to build. So I'm excited that this is where they've doubled down. Then we need to see the growth capital, right? It's all very well having an accelerator. And Lomax, we're going to dig into is it or not, because I want to lean on you for that.

59:27But obviously, we then need to stop the brain drain. We then need the growth capital and the follow-on players to lean in. But Lomax, you know this world. What's your initial reaction? No, I think it's a high level, very cool. You're getting high profile people to give their time. I think there's a general catch-22 with accelerators at the beginning, which is that how do you, like, why would the best founders join an accelerator? Like, the whole point, the irony being, it's like the best founders don't need acceleration. You know what I mean? So that's always been, you know, of the, and most accelerators have failed to overcome that, in my view, right?

1:00:06Obviously, Y Combinator. Interesting. Yes, of course. I think that's, you know, I think there's tons of accelerators that don't deliver any value. They attract people. they don't attract the best entrepreneurs and founders because I think, I don't know, I have a very simplistic view on this. Like some of the entrepreneurs we back, they're just like, they're so ambitious, determined, focused and they, why do I need an accelerator? Yeah, now of course, I don't wanna get into that debate. What I'm saying is these things are very, very hard to pull off. Y Combinator have done it very well. And EF in Europe actually, which does focus on deep tech, I think is starting to see the fruits of its work now.

1:00:47I think EF now have a 100 million revenue company in each of its cohort. And you saw the numbers from Clio, which was in one of their first cohorts on Clio AI. Like the EF project is working. But if you look at YC and EF, they built in the shadows a little bit at the beginning and it took time. YC started in 2005, didn't really become a big thing till 2012. EF started in 2011, 2012. and you know only now we're starting to see the big results coming but they have become an american incubator i i i love ef but they have they have they're all delaware companies no no fine fine but i'm not i'm not i'm not like critics and i the point i was making was these things normally take a long time what i think harry's trying to do with project europe is try and short circuit that by you know having his position in the market bringing in these amazing people as mentors and kind of almost like short circuiting or you know creating a shortcut to success i think look the move to hard tech some of these hard tech companies i mean most of them are still software companies to be fair but these deep tech companies is that this stuff takes time you know i've invested in quantum computing hyperspectral like like these things take many many many years so you need to have strong you know strong stomach for this stuff now stebbings clearly has a strong stomach for many, many things and, you know, clearly approaches life in a sort of marathon format, it seems.

1:02:16So he needs to be aware of that, which clearly he is, is that, you know, investing in these kinds of companies requires you to be super patient, requires lots of stuff goes wrong. The go-to market takes a long time and you're often asked to write quite big checks with no commercial validation whatsoever. Yeah. So you still need to get these companies to raise the 20, 30 million Series A when there's still very, very little commercial traction for the really more extreme deep tech companies. So this takes time. I think it's great. I think we'll see how they get on. I mean, one thing they will need to deal with is signaling risk.

1:02:53Unlike YC and EF at the beginning, where the companies were kind of building a little bit more in the shadows, these companies are now at the front and center. Yeah, there's a big PR game isn't there so so suddenly every little knock they have or every little setback they have which clearly everyone has a setback then that's going to be in the public limelight and then you end up with this this thing of signaling risk it's like well it is is harry going to do the seed round with his fund because he has a massive that's one of europe's biggest seed funds no so if he doesn't what does that mean etc etc i'm sure he's figured all of that out because in our industry as we talked about before when index comes down to do a seed round you know the biggest question everyone asks is will they do the series a or not as insiders because they have the information the same thing in a small level will apply to this but look smart people working on big problems with smart people around the table i think it can only generally lead to good things but my takeaways is this will take a much longer there's no quick fixes here company building takes time yeah yeah yeah yeah all those all those all those overnight successes as you're mentioning earlier all in the decades they're not they're not measured in years but apart from well apart from if you're anthropic or one of the foundational models perhaps but uh mads can we stop the brain drain there will always be a move of talent going both ways i think probably recently we've seen that perhaps a little bit too much going from europe to the us can we turn it back i think just always it's down to us how ambitious we are how fast we move am i hopeful looking at you know some of the european governments today that we are as ambitious and aggressive as we It should be.

1:04:23Probably not. But that doesn't mean it couldn't change. Things change all the time. I was surprised at how few companies. I thought it was a mega brain drain. And I am going to dig out the numbers, but it's not as crazy a bunch of either people that do subs or HQ in the States. It's like it's sub 10 percent as it stands. So I guess it depends on which ones go, but it's not the it's not the crazy brain drain that everyone perceives it to be. what else would you dig into here before we move on to deal of the week any other aspects that you'd bring to life i think it's exciting i applaud it i wish it all possible success and yeah let's hope let's hope it succeeds i think i think how he's how he's leveraged his his brand and his his market presence i think it's just bloody genius and kitty seems like a really smart cookie so i i can't wait to see them out in the field and i will be sitting on the sidelines cheering along and supporting as and when i can so deal of the week my man kick off so palo alto networks so tell us a little about what's going on there so we talked about wasting acquired by google earlier in the year and this is another behemoth cybersec deal palo alto networks they're acquiring CyberArk for$25 billion.

1:05:43Now, CyberArk was already a public company, so it's not an acquisition from private or from VCs, but it's still just a massive deal. And it does kind of show how much cash there is in CyberSecond, how important an area this is. CyberArk is probably unknown to many people. What does the company actually do? But to some extent, you can say they have the keys to the kingdom. They manage their privileged accounts, so the admin and root accounts that can do anything. And if you have a large enterprise, you've got database admin, passwords, and servers with root access, and accounts that can transfer millions of dollars.

1:06:24And so these aren't your regular employee logins. These are the accounts that can enable you to delete entire systems. And so banks and hospitals and manufacturers, they use them to secure their most critical assets. and why don't you just use the access management tools in your cloud provider? You have them at Google and AWS and Azure, but the reality in enterprise is that they, A, have multiple clouds and they still have a very large proportion of on-prem and legacy systems. And so CyberArk just manages everything from mainframes to Kubernetes, as you can sort of call it, the Switzerland of identity management, if you will.

1:07:03One neutral platform that connects everybody. So that's the reality of why they're worth$25 billion. And we can go into more about Palo Alto's acquisition spree. They've been acquiring a lot of things. This was probably the last sort of major piece of the puzzle for them to complete the stack. We can talk about what's happening with the AI future that may be even more interesting. If you think about a future that becomes more agentic, there'll be more autonomous systems requiring access to other things. Well, who's going to manage? Who can access? What? And so Cyborg could be a key part of the puzzle there.

1:07:38And that's probably another reason why it's got such a nice price tag. Yeah, I think that's bang on. The non-human access, I think, is going to be a mega deal. My deal of the week is Project Q. So another German, I've got a bit of a German love affair this week. Another German startup, they've made the cut. So the German battlefield integration software startup Project Q have raised seven and a half million euros. this week led by Project A. So all power to you, team. I hope you're a massive, raging success for Germany. Loving your work. Gentlemen, what a pleasure and a gift. I'll catch you next week.

1:08:17See you in the next one.

1:08:26I'm sorry.