Marc Benioff vs. Verizon CEO Dan Schulman on AI, Blue Origin’s Latest Flight | Diet TBPN

0:00John Coogan:Absolutely incredible edition of the Wall Street Journal. Over the weekend I saw these hit the app, but they're in print today, Monday, April 20th. There's two articles from two tech CEOs that run companies that are almost identically valued. Salesforce is I think$150 billion, Verizon's$190 billion. They're right in that sweet spot. And I'm assuming they have the exact same point of view, kind of same market outlook. They have exactly opposite points of view. And I thought it was interesting seeing what does a victim of the saspocalypse have to say about AI? And then what does someone who is the most resilient to the saspocalypse have to say?

0:44And potentially is like, let me in. I want some of the drama. I want the smoke. And so Mark Benioff is who I'm talking about at Salesforce. So he says the software bears are all wrong about Salesforce. We had a bear hat, but it was too terrifying. Yeah, it was too scary. So we skip it. But he says, people think we have our back against the wall,

1:06John Coogan:but customers aren't replacing offerings with AI. They aren't replacing Salesforce with AI. They aren't ripping it out. Of course, everyone will say, well, yet. But let's dig into Mark Benioff's argument and how he's processing the SaaSpocalypse and what he's going to do about it. Crazy opening. Mark Benioff has some problems. This enterprise software company, Salesforce, is the biggest name in a category that Wall Street thinks may get decimated by artificial intelligence. Its business model is centered on selling software to large companies on a per-employee basis, but many of those firms are expected to downsize as AI agents become increasingly proficient at performing real-world tasks.

1:41It's a daunting double bind, and it isn't even the worst-case scenario. Salesforce stock is down a mere 28 % year-to-date. The hardest-hit software-as-a-service companies are down about twice that much on similar fears. But Benioff thinks the bears have it wrong about the SaaSpocalypse thesis generally and especially about Salesforce. AI, he says, is making Salesforce more valuable to its customers than ever. The leading AI labs couldn't replace what Salesforce offers even if they wanted to. And they would rather partner with him for now. Anyway, Norcud. He's like, I dare you. I dare you. He's staring a bear in the mouth.

2:13Norcud customers. I wish we had Benioff on right now. Yeah. It's a joy to speak with him. But continuing, Norco customers easily vibe code their own sales management software that could compete with Salesforce on security compliance and other vital features. People think we have our back against the wall when, in fact, the opportunity has never been greater, Benioff said in an interview. An early investor in Anthropics, Salesforce has been developing and pushing its own AI tools for years. By the end of this year, it plans to unveil a new AI platform that automatically studies its users and takes actions on their behalf.

2:45Codename Agent Albert. It's kind of cool to put agent in the name instead of just Albert. Agent Albert. Well, they had Einstein, right? So Albert Einstein is their whole shtick here. Agent Albert is the culmination of an effort that began three years ago when Benioff, galvanized by the debut of Chet Chabut, instituted a standing Saturday meeting to accelerate Salesforce AI efforts. Let's go. Saturday stand-up, everyone.

3:12John Coogan:An earlier flagship product of that push, Agent Force has been somewhat slow to gain traction. Launched in 2024, it is used by 23 ,000 customers of a total base of 150 ,000. So what is that? A little under 20 % of the customer base is using agents. They're building products. Remember, Jason Lemkin came on the show, and he was like, I use Agent Force. It's solid. Yeah. He's like, it won us back a customer that we weren't reaching out to, and it made me money. Yeah. So he was an Agent Force enthusiast. And so Salesforce's yearly revenue growth at 10 % is down somewhat from recent years. But interestingly, the deceleration in Salesforce's revenue growth started back in 2022, maybe even a little bit earlier.

4:02John Coogan:If we scroll down on this image, you can see back in 2012, they were growing 36%. Then as recently as 2020, they were growing 28.7%. There was acceleration in 2022 to 24%. But then 2023, 18%. 2024, 11%. 2025, 8%. And then we're actually seeing some reacceleration this year from 8.7 to 9.6 to 10.8. And so it feels like definitely too soon for the SaaSpocalypse narrative to show up in the actual revenue growth rates of these SaaS companies. I pulled together the recent earnings from a variety of public cloud software names, and they're all still growing, which you would expect. I mean, of course, like, you know, you want to be growing fast and there's a lot of things and there's like the long term durability of the value that of the stock that actually informs enterprise value today.

4:57John Coogan:but we're certainly not seeing like, okay, there's so much churn at GitLab, for example, because people are forking it because it's open source and vibe coding on top of it. And they don't need to pay GitLab that you would expect GitLab's revenue to actually be shrinking. It's not. GitLab is growing at 23%. Adobe's at 12%. PagerDuty, 2.7%, a little low, but UiPath at 14%. Box is at 9%. Asana is at 9%. Asana feels like, you know, textbook, like you could just vibe code this. It's a Kanban board, a task list, but it's still growing. Zoom at 5.3%, Snowflake's growing 30%, Workday's at 14.5%, HubSpot's at 20%, Datadog's at 29%, Cloudflare 34%, Monday.com 25%.

5:44John Coogan:There's really, really strong revenue growth across the SaaS category. Of course, the expectations have been very high. So when there's a readjustment in expectations, you see a sell-off in the market. But this idea that the companies aren't growing anymore because they're being replaced so rapidly, that certainly hasn't taken hold just yet. Partner at Salesforce, investor Chicago Capital, has been impressed with some of its recent moves. But what Salesforce really needs, he says, is a positive word of mouth from clients talking up the value they derive from its AI products, like Jason Lemkin.

6:14John Coogan:They need to show revolutionary jumps. Benioff has said Salesforce was destined to be an AI-first company as far back as 2014 when it's launched its AI research unit. I didn't realize that AI research unit all the way back then. But it makes sense just for like tagging and classifying different records inside the CRM. Still, it was caught flat-footed by the arrival of high-functioning chatbots in the form of ChatGPT. Customer superintelligence. Customer superintelligence. I mean, it is funny because a lot of this, the agentic enterprise, it is a little like boring. And it's not as like sexy as some of the more like crazy sci-fi scenarios.

6:49John Coogan:but in terms of just incrementally improving the value that is delivered to the customers, it seems like things are doing okay. Early reviews were tepid, though. Customers complained of having to spend half their time preparing data so the AI could understand it, limiting the platform's effectiveness. To help fix the problems, Salesforce built a layer into its tech stack that automatically pulls in customer data from external sources and purchased a string of companies that include firms specializing in data management and AI-powered sales. At education company Pearson, agents now autonomously handle queries about order statuses, refunds, and lost access codes for its customers.

7:23John Coogan:This has increased the percentage of customer questions that don't involve human interaction by 40%. Where Agent Force has been lacking in its addressing complex customer problems and those require human touch, David Wemsley, Chief Digital Officer at Pandora Jewelry, said Agent Force hadn't been able to reliably recommend products on its own based on the vague context that customers share through its website. Like, my wife likes dogs, what should I buy her? That's such a funny question. But I mean, I guess the natural language interface should be able to find you jewelry based on a love of dogs.

7:55John Coogan:Although I think that a lot of people who are dog lovers might have different tastes that appeal to their jewelry. Why not just get her a dog or multiple dogs? Yeah, I don't know. So how does Salesforce's view compare to the Verizon CEO? So Verizon has a new CEO. His name is Dan Schulman. I don't think he's related to John Shulman, but he is stepping into the AI debate. He says, the Wall Street Journal says, for a big company CEO with big AI ambitions, Verizon Communications, Dan Shulman doesn't pull punches about the pain the technology could unleash on America's workforce. Just months into the job, he has predicted 20 to 30 percent unemployment within the next two to five years, which is staggering, staggering.

8:44John Coogan:I can put that into some context. He says he warns that advancements in humanoid robots could upend the manual labor jobs still seen as safe today. And he has pushed for more education and reskilling to help workers adapt to intensifying tech disruption. Put this into context for me. He's so this is an insane. And yes. And so this is like potentially the most aggressive stance. I mean, there are even even even Dario. So Dario had the clip going viral this weekend. It was a clip from last year talking about risks to entry-level white-collar job. And Dario, which is like, you know, I would say like on the frontier around being concerned around AI job loss, was not calling for 30 % unemployment.

9:29So the headline number, he says 50%, but he's 50 % of entry-level white-collar work.

9:36John Coogan:And that sounds really bad until you actually dig in and you realize that America only has five to seven million entry level white collar workers. And the U.S. labor force is 170 million people. And so if the Dario prediction came true, the overall employment or unemployment rate would sit somewhere between six and nine percent, which is not great. And it's obviously deserving of intervention, but it's far from the 20 to 30 percent outlined by Dan Schulman. And it wouldn't even be, even if the Dario scenario, 50 % of early stage white collar work, unemployment, that happens, you're still below COVID, below the Great Depression.

10:14John Coogan:And I think that there's a whole bunch of government interventions that could offset that pretty quickly. Like 20 to 30 % is truly like the do nothing. The government never engages. There's never any sort of, you know, incentive to keep hiring people. And there's this like fast takeoff in AGI and also humanoids, which I think people are, you know, worried about. But if you look at the deployment rate of self-driving cars, people have been saying that all the truck drivers were going to go out of a job. And, you know, this is a very, very slow takeoff. The number of self-driving cars on the road is well below 1 % of overall cars on the road still.

10:53John Coogan:And this is just the case across the board. I was listening to a podcast with someone who was very worried about unemployment internationally, and he was saying that AI could upend the Philippines because the Philippines does a lot of customer service. Which we haven't seen at all yet. No, none of this is showing up in the unemployment data. It's not showing up in U.S. unemployment data yet. I mean, that doesn't mean that you shouldn't be aware of this stuff, but it's certainly not showing up. Just like the SaaSpocalypse is not showing up in revenue yet, you know, AI unemployment is not showing up in any of the employment statistics yet.

11:25John Coogan:But this individual was on a podcast that was saying that something along the lines of AI could be devastating to the Philippines economy because the Philippines is very dependent on customer service. And the stat he quoted was that 90 % of the Philippines economy is based around customer service and customer support and handling people on the phone. And I was like, 90%, that seems really, really high. Like they have to do other things in the Philippines because sure you go to work at your, at your customer service job, but then you go home and you buy food and you live in an apartment. There must be real estate agents.

11:57John Coogan:There must be home builders. There must be people who work on roads. There must be doctors. There must be lawyers. Like, like the, an economy requires more than just like a single 90 % feels like incredibly concentrated. So I looked it up and I was like, how, how big of an issue is, how big of an industry is customer service in the Philippines? Like, is it 90 %? That feels high. Maybe it's 50, maybe it's 40. It was like 6%, 7%. It's really, really small. Now it's like huge in terms of like - You don't want it to go away. You don't want it to go away, of course. And you do want, you know, you want a number of industries that are flourishing.

12:34John Coogan:And that is probably more concentrated than many other countries. There's probably many. It might be the country with the highest percentage of customer service intensivity in the economy, but it's not 90 % of their economy. And so there's a little bit of this, like people don't seem to go back to the raw numbers because if you go back and you try and understand like, okay, what would 30 % unemployment really look like? Well, that's like, you know, Great Depression level with no intervention, no action from the Fed, no action from the government. And it seems a little bit crazy. So I can't tell if this is just like saying the biggest number.

13:09John Coogan:There's a little bit of that going on here where if you want to grab headlines and you go out and you say, OK, well, someone predicted, you know, 5 % unemployment. I'm going to predict 10 % and then I'll jump to the front forefront of the discussion. That seems to be a way to get earned media. I mean, let's unpack a little bit more of his discussion because we will see if there's a way to steel man his take around 20 to 30 % unemployment. He said, coached in the blunt AI talk is a warning for other CEOs. be candid about the coming disruption or risk a public backlash. It's a very difficult time, and everyone knows this.

13:42John Coogan:Shulman said in an interview with The Wall Street Journal. I don't even agree with that stance. Everyone that's being candid or even talking about it is immediately getting backlash anyway. Oh, yeah. So I think being authentic, being realistic, telling the truth as best you can is key. That belief, he said, is why Verizon created a$20 million career transition retraining fund for the age of AI. He's like, look. began laying off we are going to have greater unemployment than in the great depression and i'm gonna you know he's taking the piece of duct tape you know there's water pouring out i know exactly what you're talking about and to be clear to be clear this is not our view like this is not our view at all no but i mean at the same time like they did layoffs they probably hired a lot during uh coveted and beyond uh and they and and a 20 million dollar career transition and retraining fund is great.

14:34It's a good start. That is good. This is a good thing.

14:36John Coogan:But he says, the warning, this is from the journal, the warnings are a departure from the messaging of other public company CEOs, many of whom have been bullish about AI's potential to unlock new levels of growth, but demure on or even reject the idea of job losses. A lot of people are saying AI is coming. We're going to run out of jobs. It's exactly the opposite. NVIDIA CEO Jensen Wong said last month, pointing out that every other technological advancement has brought more productivity and more prosperity. And there is some new data showing that productivity might be climbing, which is very exciting.

15:07John Coogan:Amazon CEO Andy Jassy is similarly sanguine about potential job losses to AI, though some roles will be replaced, there will be other jobs created. In the short term, though, a cavalcade of companies from Snap to Amazon have invoked AI or a desire to find efficiencies as they slash large portions of their workforces. block which cut nearly half of its staff predicted other companies would soon follow suit. A new Boston Consulting Group report predicts that AI will shape roughly half of US jobs in two to three years and that up to 15 % of jobs could eventually be eliminated outright. Again, that's reshaped and eliminated would be offset by the creation of new jobs.

15:50John Coogan:So even in this BCG report. You're probably looking at like maybe a transition of like six, seven, eight, nine, 10 % unemployment while there's an adjustment period. Many Americans fear that will happen too in a Quinnipiac University survey of 1 ,400 adults. 55 % said they felt AI would bring more harm than good, up from 44 % in a poll last year. And so the average American is dooming for sure. CEOs are not thinking about this the right way, said Bill George of the former CEO of Medtronic, who is now an executive fellow at Harvard Business School. Too many, he said, are focusing on productivity instead of laying out a strategy for how companies can find new business models to grow or on how workers can best use AI.

16:33John Coogan:They should be very candid with them and paint a big picture. Showman's big picture also included sweeping job cuts, the 13 ,000 layoffs he announced shortly after his appointment as CEO in October were Verizon's largest ever, but necessary to make Verizon more efficient, he said. Altogether, he's seeking to cut$9 billion of costs. Verizon said its layoffs were not related to AI. The carrier was too hierarchical, too bureaucratic, way too process-oriented, as opposed to outcomes-oriented. And the CEO is saying, this is already happening in a big way. But the layoffs we're doing are just that we're bloated.

17:12Yeah. So Verizon has 90 ,000 employees, and they laid off 13 ,000, so maybe like a little over 10 % riff.

17:22John Coogan:Verizon's a weird one because the stock is basically completely flat over the last, it's actually up 15 % year to date and it is an incredibly stable stock and it's also just like, should not be a victim of the SaaSpocalypse because they own spectrum allocation. They own cell towers. They own cell towers, exactly. And that's just - Or they have like very, very long-term lease agreements. Yeah. And I mean, there is there is the case that like, you know, if Starlink direct to sell gets really good. I mean, even Elon saying like it's not gonna be that good inside buildings. Like it's pretty difficult to get to a point where all of a sudden there's a new technology that's just wildly disruptive.

18:00Like maybe if you're like somehow transitioning from Starlink when you're outside to Wi-Fi when you're inside, like you could cut the cord with Verizon.

18:09John Coogan:but that just feels so, so far away for something that is a pretty key utility in most people's lives, like their water bill or electricity bill. Now, they might move to Sprint or AT &T, and there's going to be some competitive dynamic. It is an oligopoly after all, but it doesn't seem like there's going to be some massive disruption moment where people are vibe coding their own cell carriers necessarily. So in meetings, he has repeatedly told Verizon staff they must embrace AI, describing it as core to the company's future. He used it himself to comb through some 8 ,000 responses after asking - This is the future.

18:42Trust me, I used it once. Shulman's embrace of AI goes deeper than cost-cutting. He envisions a company wholly reshaped by the technology, from improved customer service

18:53John Coogan:to more personalized options for consumers. And he has encouraged staffers to talk to their children about AI at the dinner table in one all-hands. Shulman recommended that staff ask AI to write their obituary to see how the technology works and how it frames their lives. Just dig your own grave. He's literally the title of this article. He's saying AI is coming for your job and everyone knows it. So in tech, we're starting to, every company is adopting this technology at a rapid rate. But everyone's like, hey, this, you know, basically like jobs aren't tasks, right? This sort of narrative is building.

19:32Like we need to figure out how to, we've built a bunch of very useful tools and they are going to have powerful effects in our economy. But we have to kind of change the narrative around this because like a fear-based approach is not working. And meanwhile, Dan comes in and he's like, AI is coming for your job. Everyone knows it. Write your obituary. Write your obituary. It's so not helpful and they're not even doing AI-related job cuts. No. So I just don't understand. I don't understand this whole press cycle. I love that he just comes in and just immediately starts blackpilling. It's so wild to just get this job and immediately start blackpilling.

20:18Do you think this is a setup for a much deeper layoff than they've done historically? I don't know. I mean, it's possible. But I think that they would need to do some serious AI tooling and implementation.

20:30John Coogan:and actually like, I want to know more about the breakdown of those 90 ,000 employees or 80 ,000 employees. Like what are they actually all doing? Which ones are actually just sitting there being like, I just do tasks all day long. Like form comes in, I type it into an Excel sheet and I email it to somebody like that type of job. Yeah. That's probably going to be automated in some way. And that person will have to find a different way to make a play inside the organization. but for a lot of the folks at Verizon, I imagine that they're working on bigger projects than just throwing tons and tons of people at a single problem.

21:09John Coogan:At the same time, who knows? Maybe half the company is customer support reps. I don't know. It's like we all wanted to live in the Renaissance or like when fire was first invented. How cool would that be? He continued, we're in that stage. We're not just appreciating it for what it could be. That's a very optimistic take. I like that sentence. That's good. Blue Origin rocket stumbles on first commercial mission. AST Space Mobile, who we've talked about a few times here, Jeff Bezos' rocket company said the satellite from ASTS was deployed into an incorrect orbit. And so a little bit of a setback for them.

21:45John Coogan:I think the stock traded down in the news a bit. The launch of the company's New Glenn rocket started smoothly with the vehicle shooting into the sky from the Blue Origin launch site in Cape Canaveral, Florida. During the flight New Glenn's third ever, the vehicle's huge booster returned safely to Earth. Only a feat only Blue Origin and Elon Musk's SpaceX have ever achieved orbital rockets, but the mission later suffered a mishap. A satellite the rocket was carrying into orbit for AST Space Mobile, a company building cellular broadband network in space, wasn't deployed correctly. In a post on X, Blue Origin said its rocket delivered AST's satellite into an incorrect location in space.