AI & Cloud News - End of October 2026

0:08Good morning, good evening, wherever you are, and welcome back to the Enterprise AI Show. This is your host, Aaron. And on today's news show, Brian and Brandon follow the money through a wild month in AI. They start with Cisco handing a 27-year-old engineer unlimited AI tokens to rewrite almost all of its legacy code in two years. And Brian, a longtime Cisco veteran, explains why he has seen this movie before. And after that, they dig into cloud earnings, Microsoft's buyout offer to about 60 ,000 employees, and Anthropics S1, where they split on whether we are watching an exponential curve or a very expensive bet.

0:55And all of that is coming up right after this quick break.

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1:54And we're back. Brandon, how you doing, man? We've started to do every two weeks now or so. I think we're doing AI News of the Month, AI Mid-Month News of the Month. How are you doing, man? It's been a couple of weeks. I'm doing great. A lot of people are excited about Halloween. I think I was excited about Happy Anthropic S1 Day, as all the people that cover cloud computing and the financial analyst and everyone that's ever wanted to have a comment about Anthropic or AI had a chance to read through the S1 and cherry pick whatever piece of data confirmed their previous opinion. So I've really enjoyed it.

2:28I think it's great. Maybe I should dress up as the S1 anthropic filing for my Halloween costume this year. We'll see. We'll see what I actually do. Yeah. Before we get to it, I have a couple of things I want to jump into because we, first thing I want to do on the sort of mea culpa apology, I have not yet seen the Blood Lady movie. You can see anything. I might go see it this afternoon. My one excuse is I have to find some time to go do it. It is a three hour commitment. So you got to find some real time to do it. But I can't go with, I can't take my wife to this because I will have to answer so many questions about why was she crazy?

3:01Why did she lie to everybody? So I got to go find some time for myself. But I know you've seen it. Did you go have your lunch with somebody to talk about it? Because I know you had a lot of questions. Absolutely. Listen, the movie's officially name is You Can See Everything. Maybe we'll put a link in the show notes. And then I did. I watched the movie. And then my family actually went because I went on my own. I was like, this is great. So they went. But they don't probably like to talk about movies. They didn't have as many takes. So I have a specific friend of mine who has many degrees, but one of them degrees he has is a film degree.

3:30And so I texted him. I was like, we're going to lunch. And he's like, okay, we'll go Friday. I was like, have you seen this movie? He said, no, he hadn't seen that. I said, okay, no, we can't go Friday. You have to like, when you've seen this movie, we're going to lunch. And we did it. So he went through all of his theories. I had my theories. It was great. I feel like I really got it out of my system, which was fantastic, which you have to do in most cases after seeing a movie like this. Yeah, I am definitely going to go see it. I got to go find a day in the next few weeks before. Although I would love for it to get onto streaming, but I don't think that's going to happen anytime soon.

3:57Although I'm super curious, your wife, she's going to be the stand-in. I ran into one other person. My son was going, and he knew a little bit about the situation, but he was going with a friend who knew nothing about it, right? And I looked at this person a little bit like, you know nothing? And I kind of explained to Libby, he's like, yeah, maybe I've heard of that. I'm more shocked that there are people that have no idea what Theranos is. they're just like i was sort of like it's one of those situation where i was like maybe this person's an alien but maybe and then this i was like maybe this person's looking at me like i'm an alien that i know so much so does your wife kind of put in this category she has her interest and there's periods there's just things that she's blocked off of you don't even well she doesn't even entertain interest in those i think so i think we're gonna we're gonna get into some the good news is she doesn't listen to this podcast so i can talk about good good example divide she just doesn't she has no idea what's going on the podcast she doesn't care no but i think in her case.

4:49So the real scams of Theranos happened a number of years ago, right? Back. So our kids are now into college. I think this was happening though when she was doing like full-time mom stuff. The kids were in high school. She was pretty consumed with what they were doing. I don't know if she would really know the details of it, partially because she was probably like, ah, that's nerdy stuff that you do and blah, blah, blah, which I don't really do anything having to do with healthcare stuff. Although this was Silicon Valley, so maybe. But no, the bigger thing with her is, and this is a running joke that we have, like she loves to just, she's like everybody will be sitting there watching TV and she's scrolling her phone and she loves to just, whatever the latest murder thing is or serial killer thing is, she'll be like, why do you think that person did that?

5:28Why do you? And I'm always like, honey, because they're crazy. It's just like, there's no, we're not discussing this. It's, they're crazy, that kind of thing. So like, this would be three hours of her being like, all right, I'm bored with this. I don't understand why she keeps lying to everybody. And, but no, we're definitely gonna go watch that. All right, listen, I'll just give it a plug. I don't think she'll be bored, but I think she'll have many questions. And frankly, I knew a lot about this. And I'm like, I left with, I just think, you can't leave this without having a lot of questions. There's just no way.

5:56So that part is fun. And I've been, I have been, there must be, I don't know, six or seven podcasts in my feed that now have, they're not dedicated to this movie, but like they're having dedicated episodes and I'm trying to avoid them all. Like I'm trying to avoid all the spoilers. I know there's a lot going on with it. So yeah. So the good news is I got a lot to listen to. I know we're usually legally obligated to talk about college football, and we could talk about the AI bot that your local school, University of Texas, is deploying. But I want to swerve a little bit because there was an article, there was something that came across our desk, actually came across the software-defined talk Slack just moments ago.

6:31This is breaking news. This is hot off the press. And I bring this one up only because everybody has sort of their favorite company that they like to follow, maybe because they work there, maybe because it's just their favorite company. I know a lot of people big into AWS or VMware or whatever. Mine happens to be Cisco because I worked there for a long time, was there during the internet boom. Great article that came out today. And I think we want to talk about this because I don't have any background on this one, but I have a little background on some previous Cisco with this. So basically the headline is, Cisco gives 27-year-old engineer unlimited AI tokens to rewrite 98 % of the company's legacy code in 24 months.

7:06President Pluck's former startup founder telling him, go nuts. All right. So let me provide a little bit of context on this. And I'm going to butcher this person's name. I'm going to give it a try. I'm notorious for butchering this person's name. The employee, Padman Aban Krishamurthy, which I think is pretty close, joined Cisco after it acquired his company, Easy Dubs, which does feel like a name you would see on one of the betting sites, Easy Dubs. They were a translation startup company. I'm assuming he was the CTO or the founder or whatever. And as oftentimes happens when big company acquires little company, it's like, cool, we acquired them.

7:42And then they get chucked into some existing business unit. And they're, I'm not the man anymore. or I'm stuck doing whatever work they have. So he must have walked up to a guy named G2 Patel. G2 Patel is the president and chief product officer at Cisco. He was actually there when I was there. He had come in through some acquisition. Anyways, they must have met at some sort of event. And this guy, this 27-year-old, basically walked up to him and said, hey, man, I'm stuck doing stuff. Basically, I'm bored. He's Peter from the office. He's like, man, I don't really need to come into the office. I'm just vesting and waiting and stuff.

8:14And he said, all this stuff that you guys make is old. It's boring. I could rewrite the whole thing in, this feels like a real life episode of Reddit. He basically went to the president and said, I could rewrite your entire code base just using AI by myself. Actually, he said me and one other guy could rewrite the entire code base. And the president, as you might do at a whatever, just goes, yeah, man, go for it. Except this one decided, no, not only that, not only am I going to tell this guy he can do it, he can have unlimited tokens, which again means basically a blank check, but they felt this was something they wanted to put out into the press, right?

8:48This is not just a dozen of random things. This is from a real news outlet that covers Cisco all the time. Thoughts on this? Thoughts on a major public company essentially saying, yep, we have this all old installed base. I'm willing to give a blank check to one or two people, who knows how many, and I'm going to publicly tell the world that our entire code base could be rewritten in 24 months. So I saw this whole article that you just summarized really very well. And I thought to myself, my question is Cisco hiring. I'm ready to come on board, right? Because I was thinking to myself, it's like, I love the idea here, right?

9:27I think now the implementation, the part I don't like about this, at least the reading of it was like, they play up the big, the fact that he's 27, then he's Gen Z. And as if that is like some magic button and even says, this is going to create some friction, but it's healthy friction. I'm like, listen, I'm going to speak for some percentage of the Cisco employees. They're like, we've been using it too. And we think that there are lots, maybe not everything. They probably think to themselves more around the systems that I know really well at Cisco. I think we could probably rewrite them. There's probably 10 % of the Cisco employees that are there that are like, yeah, exactly.

10:00We should be doing this kind of stuff. So I think, I guess I would just calibrate this a little bit around. I don't know why you would just give it to one person or two people. And because it's fine. And maybe you can still do it. I like the audacity, but I would just say you probably greatly improve your chances if you add more believers to the team, right? And those people have a little bit more, they're excited about doing it, but they have some more knowledge about the systems that are being rebuilt. And it would just go a little bit smoother because even no one person can use, and maybe they will do that.

10:31I don't know how they're doing this. My idea in my head when I saw it would be like, they've got 20 monitors and they've got 50 agent teams running individually. They're each running a hundred agent swarms running. So they have got 50 ,000 agents running or something along those lines. And I'm like, I don't necessarily, like, why not try? Part of me is like, okay, give it a shot. But I'm also like, if I was doing the project and I just said, let's get more people that are excited about doing this, let's fan it out a little bit. And I'm not trying to create a lot of bureaucracy, right? But let's maybe, and also too, like how they get 98%.

11:03I don't know what, how suddenly are they this, like, Like why not 100? Why not 95? But my point is just like when inside Cisco or any large company, there's lots of different systems, right? Right, right. And I think having more expertise, even if you're just the quote unquote orchestrator of the agent, just to make sure you know one person's going to know all that. And so I don't know. I don't know. Open invitation to this person. Come on the show. Open invitation to them. Come on the show. Tell us what you're doing and maybe correct me. Tell me how you are interacting with the other groups or if you're not, because maybe they are doing that.

11:34Yeah. So two things. One, open invitation to either this individual, Mr. 27-year-old, or Mr. Patel, Mr. G2 Patel, if you want to come on as well, or both of you, happy to do it. We can sit down and do that. The reason I brought this one up, the reason this one got me, because again, this whole year, there was a period of time when every Silicon Valley person was like, dude, I am token maxing. Look, we've been through some of this stuff. We've all read the Reddit thread where some guy says, hey, I could rewrite Twitter in a weekend. This is not, there's really no bravado in this whole thing. This guy's got nothing to lose.

12:04But what was interesting to me, and the reason I brought it up is like, hey, everybody's got their favorite company. So when I interviewed with Cisco back in 1996, so early part of 96, so that's been 30 years now, one of the things the guy who was the general manager of the group I was interviewing with said, hey, when you just brought this up randomly, I don't know why he brought it up. But he said, and again, this was when Cisco primarily had two products. They had routers running an operating system called iOS, which kids, there was something called iOS before the phones. And then they had a new version called iOS X something, right?

12:37And he was telling me, he said, we have a dedicated group of people. We have some of our best and brightest who are completely rewriting that code from scratch, from the kernel all the way through it, because, and again, this was 1996. The internet wasn't that big. We've outgrown that architecture, right? So they've been trying to do this rewriting thing. And again, this was back when they had one product. To put it in context, I was at Cisco for 14 years. I know we acquired at least 125 companies. So that's at least 125 different OSs that came into the company. And then what happened around 97 or 98, they acquired this company, little tiny.

13:15So Cisco was in the networking space. They made a product called routers. They bought an adjacent product space called switches, which people understand now. They're just Ethernet things. And they acquired a company and that group did tremendously well to the point where they became the biggest group within Cisco. They became the biggest revenue group within Cisco. And the founding group of that team actually picked up a nickname based on the founder's initials. It was called MPLS. It was Mario, Prem, Luca, and Sony. And they became the most powerful group within the company. And you go, okay, that's cool.

13:47That's a great story of, hey, an acquisition for$100 million turned into a$50 billion business. Good job. Way to go. What those guys did, at some point, they got bored with being the biggest business. And they said, we're going to go off and work on our new ideas. And we're going to go find some VC funding. And the Cisco CEO said, whoa, whoa, don't leave. You guys are awesome. Don't leave. I'm going to give you basically special privileges, the equivalent of, you might say, unlimited AI tokens. He basically said, I will give you a blank check. Please go off and create your thing. I will be the VC of last resort.

14:22And so they went and did this. And then they built a decent business because that next idea wasn't as good as the first idea. But then, of course, they got bored. They didn't like the idea of doing dev and test. They didn't like doing regressions. They didn't like maintaining stuff with P1 calls from customers in the middle of the night. And so they went into this cycle of we are just going to, every couple of years, leave the company, threaten the company that we're going to leave and go get outside VC funding. And in essence, that MPLS group just became the, we get to only work on cool stuff.

14:52We are going to fix the company. And for whatever reason, Cisco's CEO was like, I can't quit you. I am so addicted to you. I can't quit you. And I'm like, hey, Mr. Patel, Mr. G2 Patel, now president and chief product officer, you may want to do a little bit of Cisco history that this has been done before. And your quote where you say, oh, I just, what's, I actually try, I actually try to create tension in the teams because you want to have enough friction on the ideas. You don't want to have friction with people and personalities. You know what happens when some people get to only work on the cool stuff and you're probably giving them a bunch of money without any real obligations, without any accountability, and everybody else has to work on the stuff that makes money and has deadlines and stuff, Mr.

15:32Patel, you have friction with people and personalities. I wish all these folks the best of luck. Well, I like it. And I think what you're saying - It's fun to watch history repeat itself. I like it. I do like it. I love that whole take there. But, and I think what you're highlighting and just to say it a more simple way is like, probably a lot of the software can be written, but any large organization is very difficult and it's a group of people and it may not actually, actually rewriting the software may not be the hardest part of that. Right. And that's what most, this is the thing most of us learn over and over again.

16:05It's, it turns out the people are the hard part. And so So maybe the challenge, maybe the biggest challenge if we went back to that person that wanted to do this, if you really wanted to do this, you should leave the company and just start a new company and just be like, I'm going to build it up from the ground up as an AI first networking provider, because then you don't have all the people and the process and all of that hangover. Because to your point, this is why most of these projects in broadly, let's call it digital transformation fails. Your point is very valid. The beauty of this is if you were, let's say you were a smaller company.

16:39Let's say you were a reasonably good-sized company, but you still had a lot of market to expand into, right? Let's say you were VMware when VMware hadn't gotten into networking and storage and all the other things. It was just a thing. When they say we're going to redo 98 % of the product, essentially, if you went to Cisco and said, how much more market do you think you could get into with what you have? The current products you have, how much you can get? They'd probably be like, ah, single digits, maybe double digits if we kind of really push this. So what you've done is you've told everybody else and your customers that, hey, I'm going to impose probably a huge upgrade on you.

17:14I'm going to make you completely probably change how you do operations around this stuff. It's not – their stuff is probably written in a lot of C and C++ because it's got to be down at the hardware level. Okay, I'm sure he's going to write this in Rust because everybody just says they're going to rewrite it in Rust. But at the end of the day, you're like, and what is this going to do for us? What is this going to do for our customers? They're still going to get routing updates and access lists. And it's as if they're like, oh, no, it's OK for anybody who's ever gone through a major rewrite. And you want to do this for 98 % of your products?

17:47How about doing this for one of your products that you still think you have massive expandability for? But I guess that doesn't make as good of a headline. It doesn't seem like you're thinking big enough and blah, blah, blah, blah. But yeah. No, this one made me chuckle. I do think, though, like somebody said on the Slack, I want to see those status updates. I want to see those status presentations. and yeah, I hope they come on the show. I would love to have them come on the show. First question is when they come on the show, it would be like, okay, so you're doing this, like, what do you do every day?

18:12What's the one-on-one like? Are you presenting? Because this is what I bet happens. I bet you like, are there red, green, yellow PowerPoint slides that have to be presented on some increment about the status of this project? Because right away you'd be like, it's not going to work. Like you're already missing, you know what I mean? Just the nature of like, you try to run this project is actually preventing this project from succeeding. So that'd be fun. I will listen, I love it. I like the attempt. And I do think what you highlight, and I think we'll probably get into this, the more natural way is people leaving their companies and being like, I'm just going to do it from the ground up.

18:44And then to your point, customers can opt into the new solutions if they feel like they're more compelling. And that's really the way you disrupt it versus like this, to be more cynical, this does just read like good PR for big companies. We hired a young person, gen z ai and in like maybe a year nothing happens but none of us will remember that i guess maybe you'll remember this the rest of us won't yeah no and i'm going to try not to remember it i do i guarantee there is a slide somewhere that mr patel put in front of a bunch of people because he had to go to some somebody in in finance or accounting and said hey go in the blank check checkbook get one of those out send it over to our friend here and they went what and he said we are going to reinvent ourselves before somebody else does there's a slide somewhere that says sasspocalypse we're gonna we're gonna read destruction there's like a copy of that book somewhere like all that's in there all those quotes are in there no i do think if although if we do end up getting these folks on the podcast which again open invitation cisco pr if you'd like to have them on i do think what we do i think we open the show and it's like either you or me either one of us it can be me because i've got some cisco background and i'm gonna get real close to the camera and i'm just gonna get them real close to the camera when we're real quiet and i'm just going to go how's it going i'm just going to pause and i'm going to be like and they're going to tell me and i'm going to go really was it as easy as you thought it was going to be and they're going to just and we're going to do the whole blood lady movie thing for about i like it about a minute and a half until everybody gets uncomfortable now we can talk about how he's rewriting everything ever i love it let's do it come on the show come on the show cisco people there we go that i hope that was okay i know for those of you that wanted football minute that was a little longer we expected.

20:23But yeah, we saw that pop up on the news and I thought we had to discuss it. It was a big two weeks, man. We had a ton of earning announcements. Why don't we go through the cloud earning announcements? Because I think there was at least two interesting things in the cloud earning announcements. AWS announced their numbers. AWS is now up to about$45 billion per quarter, almost$46 billion per quarter. So that puts in about$170 billion. Again, I always come back to being like, can you ever imagine back in 20, 15 years ago, 12 years ago, they would be that big. So they're doing well. Amazon continues to keep cranking.

20:57I think they're actually going to be the biggest spender of a free cashflow next year. But the big news, Azure finally broke out their numbers, right? We were always like, okay, their numbers aren't fully Azure. They include a bunch of other stuff. They are now breaking out the Azure number. I don't know why this quarter they're starting to break it out, but they're breaking it out. They are now a$29 billion per quarter business. We thought they were getting pretty close to AWS. The number's not as big, but the surprising number is Google Cloud is now a little more than almost$25 billion per quarter.

21:28So Google Cloud and Azure Cloud are very close in terms of being number seven or number two. I feel like in any given quarter, GCP could actually leapfrog them, which I think was one of Aaron's predictions maybe seven or eight years ago that they would eventually leapfrog number two. So, you know, it's in the ballpark, but the clouds are doing well, continue to do well, as Cote would always say, oh, they made a lot of money. Good for them. But any surprises in the three cloud announcement numbers that came out this quarter? Not so much surprises, but I will say this. It was one of those things like AWS and that revenue is doing well, but the headline was Amazon misses.

22:03So it's sort of like you're doing well, but again, graded on this specific curve, we're still worried about what you're... Let me say it this way. We're still very worried about all the money you've told us you're going to spend. Yeah, I think it was two things. I think people are like, oh, wow, you're still spending$220 billion a year on this stuff. That's crazy. I think they also missed by like a billion and a half dollars on their ad stuff, which is interesting because they missed on their ad numbers. And the thing with Amazon, what's that? I was going to say Google missed on their advertising numbers.

22:36Yeah, Google missed on their ad numbers as well. and it's the thing that's interesting is amazon has such a captive market for their ads basically like you have to be on the shopping thing but what's yeah what's interesting is meta which we don't typically cover blew their numbers away right so it does between amazon missing and again this is one data point google missing and again one data point it does make you wonder is most of the ad stuff being driven by like mobile which neither google people are if they're shopping maybe they're doing it on their phone, but you're less likely as an Amazon shopper to be looking through the ads as you would on the web.

23:16Same with Google Cloud or Google. If you're doing stuff on the web, you're more likely to see the ads. Facebook is basically, or Meta's basically become entirely web-based, especially around like Instagram and all kinds of stuff like that. It does make you wonder if the mobile sort of the very mobile-centric generation is now the one that's basically driving where the ads are going, which makes sense. We've all got, the rest of us have all gotten older and stuff. But I think, yeah, those are going to be interesting to watch. Maybe not so much from a cloud and AI perspective, but from just a, how much, where are you getting revenue to then go fund the other stuff that you're doing?

23:47Right, and I think that's why I think it's interesting to talk about Amazon and Google together. It's like the parts that we know, AWS and GCP, doing extremely well, but requiring massive investment. Then those businesses are, quote unquote, funded in the large part through advertising, slightly different models. But those businesses are showing, Again, they're both great businesses. It's not like, I always think we should put this in quotes, but any type of, this is what investors worry about. That's the narrative they worry about. It's like, wait a minute, if you spend all this money and your advertising business isn't as good, then where's the money going to come from?

24:19So, and then in the case of Google, it is a little bit even more interesting because there is some talk that the AI search, which you use, even if you don't know it, when you type in a Google search, that is not performing as well on that ad side as it is, which is interesting. So here they are building the business that, if you will, kind of takes away their thing. So I think that's the part that's interesting. It's just like investors, like, let me just say this way. I would say this. We're going into this next year. Billions are being invested. There's just no way around it. And I think it's just a bunch of people you got together and it's like, but what if it doesn't work out?

24:52And it's, yeah, that's definitely a possibility, but it doesn't matter. They're going to be invested. So I just think you just have the stock market and all these companies just worried. And some people believe in and some people don't. And some people like, don't take on so much debt. And other people like, we're going to do it, but it's happening. Whether you've wanted it or not, it's happening. And they're in all of those companies, the whole Mag7 are all basically locked in a game of winner take all. Like they're no longer any belief that, hey, we're going to be cool with two or three of us dividing up the pie or two of us dividing up the pie.

25:22They're all basically, we are all going all in. I think Microsoft was really the only one who wasn't negative free cashflow. And yeah, it's interesting to watch how many of the financial analysts now, all they do is talk about AI because they're basically the ones that are saying like, look, the only bet in the market right now is AI, right? Call it however you want, but the only bet is AI and stuff. Yeah, it's interesting stuff. Do you want to, I think that covers most of our cloud news. I think the other sort of cloud news is less sort of cloud news and it's more having to do with the flip side of this.

25:51We saw the negative side of it, which is we're starting to see Microsoft, I think offered like 27 % of their workforce, which is a lot of people. 60 ,000 people offered early retirement. Offer them early retirement and so forth. Or like buyouts. Yeah. Yeah. Has a lot of people freaked out that like the entire IT market, if that number of people take the buyout, at some point they may go looking for other jobs. They might not be ready for retirement. Like, I don't know if this is like the end of the over hiring that happened because of COVID or if this is a combination of like the end of the over hiring of COVID plus most of this stuff I think is going to have to do with, hey, we can't even afford people anymore because we're spending so much money on buying gpus and building data centers but i think that's i think what's going to be interesting is like how much of that is contained just to the the certain number of tech companies but the trickle of it is other leadership groups whether you're in banking or finance or you're banking or pharmaceuticals or airlines goes oh we should just do that too because that's what's grabbing headlines and look what happened to their stock price and that's not a trend that we love talking about it's a little unique though in the sense like microsoft obviously all these companies making these huge investments my recommendation I don't know, it's probably not what people want to hear.

26:59It's like, I think take the buyout and then take enough money in your buyout to then go get your subscription to Claude or one of the best ones and learn how to become the greatest person at AI. Because I think that's what's funny about this whole thing is it's like all these people, all those companies you just mentioned, like banks and everything, they need help figuring out how to use this. And then see if Microsoft doesn't want to do that, if they just want to, we just want to build infrastructure. Like everybody that leaves Microsoft is going to be capable of going out and helping people with AI that want to do something.

27:28So I think it's, to me, it's grab your bio check, go on vacation first if you can, take some time off, and then go just become, and it's kind of like the Cisco thing. It's go become the people that are like, you know what, I'm just going to start rebuilding the things that all these big companies feel like they either can't rebuild or won't rebuild. And I think a lot of people will be successful. So maybe, and I say that, again, if you have a choice in it, it's obviously a lot better than just being told to leave. Think about it. Yeah, it'll be interesting to see if we have a resurgence of essentially what is old people remember, like the concepts like Kelly services.

27:58Oh, we need a bunch of people to outsourcing, whether it's outsourcing or like local temps or whatever, because not everybody wants to just go out and they may want to go out and build all those like FTE skills or AI skills, but they definitely don't want to go off selling themselves and having to do all the backend stuff of what a consultant is. And so it'll be interesting to see what little pockets of people get together and somebody is essentially selling their time and services. Again, not a new concept. You know what, grab, just look around, okay, who's the salesperson that's leaving and And it's like, let's get 10, 15 people together.

28:28And funny enough, it's like, probably you can sell some services back to Microsoft, which is always the funniest, most ironic way that these things happen. So if you're in a position of strength and you can do it, man, go do it. This is like opportunities now. Yeah. And you highlight the most important thing, which is like the company that fired you is probably the most likely to be like, oh, you already know how we work. Sure, we'll hire you back, but like on some sort of hourly or - Sometimes a consultant, do something. Yeah, try it out. I say, go for it. All right. Maybe we should get to the main event.

28:55Again, there are dozens and dozens of things in the AI and cloud news of the month stuff that you can folks can go dig through. Do you want to give your two cents on the on the two trillion dollar potential S1 IPO from the folks at Anthropic? I just think the S1, like I said, at the open, right, it just comes down to this. I think there's lots of fun charts in there. And there's a chart for everyone. You just going back through it. It's we're seeing revenue growth that no company has ever experienced before. Right. And when you look at the charts, the exponential numbers, people talk about a hockey stick.

29:23I don't even know what goes up faster, right? A rocket jet. So you clearly have that. And simultaneously you have, if you will, the commitments to spend on cloud almost going up equally as fast. So you just have to decide which piece of evidence you would like to cherry pick and make your case. But I do think if nothing else, this is the great, perfect scorecard for us going forward because now we're going to be able to see every quarter. And as many people have made this point already, It's like at the very beginning, an exponential line and a linear line look the same, right? When you draw them at the beginning, it's the same, if you will, a slope.

30:01But only over time does it reveal itself is what's going on. And I don't think anyone really knows what's going to happen. Regardless of who you are, I don't think we know what's going to happen. But we are definitely, as an economy, about to make this huge bet. and Anthropic will really be our guiding light until OpenAI comes out to see whether or not this revenue growth actually continues. And when I say that, that's just a proxy for demand, right? And I know we've talked about it on this show and it's been talked about a zillion times, everyone else, it's like all the circular financing, all that stuff.

30:36It's to me, it does not matter. It doesn't matter at all. It's just all that matters is that the revenue growth and demand and increase this exponential pattern of growing. And if it does, things are going to work out. It's going to be great. And if it doesn't, it's all going to be bad. It doesn't matter if it was circular financing or regular financing or what. It's going to be really bad. So that's like the simplest way to look at it. And then of course, there are millions of finance blogs where they go into like all these weird, you know, finance geek terms about revenue growth and SaaS and retention and net profit.

31:14and it's all that matters man all that really comes down to it is just demands so that's where i come down what do you think you've thought about a lot of this as well yeah no i it's i've i've had it thrown at me and again these days like nobody nobody really just does the like straight down the middle this is what the numbers look like and this is this is what it would like you hear very few just like finance professors or economists just go down through it and be like like i would it's always somebody who's like hey this is a bubble they've got ed zitron on and ed's of course, pitching his book of like, the world's going to end and these guys are all, they're all frauds and blah, blah, blah.

31:47And then of course you'll have the all in podcast or you'll have some Silicon Valley driven thing. That's like, Hey, you guys just don't even understand how big AI is going to be. And it's going to, it's going to be 50 times as big as it is. And, but yeah, like it, it is one of these things where, and again, this is by no means financial advice. And by the way, for 99.99 % of you that don't have a dad who's like works in private equity or something like you're not going to get access to these shares anytime soon until until maybe your S &P 500 has to mandatory buy them because they're not really going out with that many shares.

32:17This is just like SpaceX where it's a small allocation. All that stuff's already been pre-allocated to friends and family of all the bankers and all that sort of stuff. But yeah, it is one of these things where, again, we've talked about this a million times. Everyone talks about, hey, this company is the fastest money printing machine in the world. They've grown faster and everything. And the flip side of that is also they're not profitable. They're not anywhere close to being profitable. And for all the companies that people didn't really understand, like Microsoft or Google or whoever that were the 500X growers, they were all profitable at IPO time.

32:53They were all wildly profitable at IPO time. This one isn't profitable now. It probably isn't going to be profitable for the foreseeable future. And again, it's going to be like, I think the thing I hear from everybody, and again, And this is where you go back to separating the AI demand from is this a good investment or how well will they do in the marketplace is like they are rushing this thing out the door because interest rates are going up. Their growth rates have slowed down between the Q2 and Q3. They just came out and they're like, oh, yeah, they're not as fast as they were last quarter.

33:24They have more demands, more compute commitments that they have that they can't get out of. I thought that was an interesting one somebody was walking through the other day, which is, yes, they've got like three or four hundred billion dollars of commute that they can't get out of, that they can't back out of, that they can't force majeure their way out of these things. And they're like, so you'd have to have growth of like 10x of where they are today. So that hockey stick is going to, it's going to start curving back the other way. So it's going to be interesting. And then, of course, the best part about the whole thing was this is probably the first major IPO in history that has absolutely no regulation, but has an entire section that's, oh, yeah, we could destroy the world or kill you all or be massively damaging to all sorts of things.

34:03People are just like, oh, yeah, yeah, okay. Yeah, yeah, we'll checkbox. It's just a bullet point, too. It's like one of many. All right, so I like where you come from, but I think one of the things I've been thinking a lot about, and I heard this somewhere else, I'm stealing it, but it's just how bad human beings are at exponential growth. And I'll just give, I just want to give like a couple, I'm going to take a couple positive things just to offset it a little bit. It's, we mentioned Amazon at the beginning of the show. And if you go back and read, there's a bunch of the Amazon books. I've read a bunch of them.

34:28But anyway, one of the things they talk about in there is that Andy Jassy's putting together the quote unquote, the first memo, right? The first six pager or whatever. Right. And in his wildest dreams, he's like, maybe one day this could be worth a billion dollar business. Right. And here you have a zealot creating a proposal that's supposed to get people very excited about investing in this thing, right? And the best he could conceive of in his mind was a billion dollars. And you gave the number earlier. You said today it's on the verge of a$180 billion business. And if you watch this week, he's come out and said eventually this can be, he believes it could be a$1 trillion business.

35:10And I don't think Andy Jassy is stupid. I just think he's a human being. And he doesn't think, and it's when you see success, like the mind doesn't really let you think of it that way. And I'll be one I'll think about, nothing to do with cloud computing, but I ran across the stat the other day, or this story was that the Wright brothers think Orville Wright up in your area, right? I think Kitty Hawk, they did the first flight. Great place, by the way, go to Kitty Hawk. One, the hill's not that big. That's the most important thing. But anyway, in his lifetime, he was there for the, obviously he was there doing the first flight, but he said he lived just long enough to see the human, the fastest, if you will, a plane break the sound barrier, right?

35:47So if you had told him that day, not only is this flight going to work, we're going to break the sound barrier in your lifetime. I think people would have thought that's absolutely ridiculous. And so that's just two examples of exponential growth and improvement in areas, right? Computers would be the other one. The first computer, the NVAC, whatever, could do nothing. Now your iPhone is whatever. How much better is the iPhone today than the first computer? And it's like, we don't think it's exponentially better, right? Is it Thomas Watson? I think it's Thomas Watson. The founder of IBM was like, we can't see a market for more than five computers in the world.

36:21So, yeah. And again, I'm just trying to throw the pause. So, if you believe that, and this is where I think the anthropic people, I think this is what they clearly believe, and the AI people that are truly pillars, you're going to see AI get exponentially better. So, like, next year, it's going to not be two times better. It could be twice as good, or four times as good. And then in five years, when we start to compound that exponential growth, right? What's it like if this AI is a hundred times better than it is today? What does the market look like? And I think that's the part, like we just, as human beings, because we're used to linear growth because most things in our life aren't really like that.

36:56A plant grows very slowly, it doesn't come out. And so I just think that's the part where if you want to see the other side of it is, yeah, if this is a hundred times better, we're solving problems we're not even conceiving exist, right? Right. We literally can't conceive. And that's where you're going to see this tremendous productivity growth and all these things. So that's just one way to think of it. But yeah, no, and those things are all awesome. The best news of it is if, like I think about this in terms of like the people that are fans of it and so forth. The good news is if it goes out as, let's say a$2 trillion stock, right?

37:29And you're thinking about this like, hey man, I'm just, I'm in this for the Benjamins. I want to make money on it. And you think about like the growth of like Microsoft or Google and people go, if you'd put a dollar into Google or$1 ,000 into it, you'd be worth$50 million or whatever. The good news is most of the growth of this stock probably already has existed, right? It is the foundation of the financial system. It's not going to grow 50x or 100x. That would be 10 times the entire GDP of the world. So that's probably not going to happen. So you got that going for you. It's already put software developers out of business who should be its best friend.

38:00It's putting mathematicians out of business who should also be its best friend. So that's cool. It's going after the people who should be its greatest cheerleaders and so forth. I don't know. I think it's going to be interesting. I think it's really hard for people to separate the difference between being like, is this technology could this technology do really interesting things and then being like will that ever happen in a way that is sustainable for economies for profitability for mankind and so like we've talked about flying cars since the jetsons was on and we were all excited about that sort of stuff and we're like man if there was flying cars we wouldn't have traffic you could go wherever you wanted to you wouldn't be limited by these sort of things and it never happened right still hasn't happened regardless of what you think about elon musk's right i think that's also say like in AI.

38:44But this is where I kind of come back to this whole thing of like, you can hold two things to be incredibly truthful. One is like you, for example, like you let AI run all sorts of stuff in your life and you're super happy with it. Now it still can't, you know, schedule things properly, but that's, that's a 10X, that's a 10X opportunity. But at the same time, like you wouldn't pay$10 ,000, you wouldn't pay$10 ,000 a month for it. I don't think. Not today. I can't afford it. It's as simple as that, right? And also because you haven't come up with a$100 ,000 a month idea yet. That's the reason you wouldn't pay$10 ,000 for it is you don't have a 10x thing on top of it yet, which you might.

39:22You might come up with the next Amazon. And that's the part where I think as much as it's really hard for people to separate like straight lines from lines that go up into the right sort of things, I think we also have a hard time separating this idea of I love my$20 a month subscription. I love my$100 a month subscription. but you can also be like and i have no idea where the the the four trillion dollars in funding has come from nor do i understand how they're actually being profitable in that four trillion dollars which is the foundation of like thing growing into the future to become those 100x things i think that's that that's what the thing's going to be and this is going to be the the perfect jumping off point for let's see what happens right let's see what has to happen in order for this thing And maybe that's the best reason for the Anthropocic IPO is we now have a perfect window.

40:09Yeah, we need a window until we're all going to be able to see what happens. And a year from now, we can be like, local maxima, it's not exponential pain. Or something great is going to happen. And we're going to be like, yeah, we weren't thinking big enough. Right. Yeah, we might have to see Dario Modi run for president of the United States and then declare Anthropocic a national standard for the country. That might be the way for him to get to his number. or it just might be naturally growing that way. Who knows? We'll see what happens. All right, man, we've gone on for a long time. We didn't cover as many topics as I thought we would, but we covered a lot.

40:41It was mostly money, this one. And of course, our friends at Cisco are going to reinvent Cisco, which is going to be cool too. I think at the end of the day, if I wrap up this show, we have two pillars to this show. We have one, which is, will somebody actually completely rewrite a Fortune 500 public company in two years? Nobody else has held themselves out that they're going to do that. Lots of people will talk about the mainframe. So we've got that as a tentpole, and we've got the Anthropic IPO, which is supposed to go out here pretty soon, probably before the end of the year. We've got two really good things to be looking forward to and to measure again.

41:11So any last thoughts, man? We didn't talk about football. You got a chance to get some football stuff in if you want to. No, no football. I think much like the Anthropic IPO, it's like we're mid-season, so we have to wait and see. We'll have to wait and see who rises to the top and who finally implodes. And we'll see. Tune in a couple weeks. We'll give you an update on that, too. That's right. That's right. All right, folks. With that, we're going to wrap it up, and we will talk to you next week. Thanks for listening. Check us out at theenterpriseaishow.com for past shows, newsletters, and all things Enterprise AI.