Bret Taylor
speaker
184 appearances
1 recordings
1 series
first heard Oct 2024
last heard Oct 2024
Bret Taylor’s voice in public audio — every appearance, attributed to the second.
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It's up to you to figure out the nuances of whom to invest in and why. I'm happy to give my perspective, but I think for what it's worth, for companies that are pursuing artificial general intelligence, it's hard to figure out what's the valuation of a company that creates that. The numbers might be insane, so maybe it's completely rational.
I'm not the one writing those checks, so I also don't look at it dismissively. I look at it and say, there's probably a case to be made. I'm not sure I would write all those checks. I wouldn't say it's entirely rational either, just because I do think
This technology in current form has a ton of value, but particularly as you project forward towards things resembling superintelligence or general intelligence, there is so much value in platforms like that. It's a very unusual investment, but it might not be irrational.
I don't believe that will happen personally. Analogies are dangerous, but I think they might be illustrative in this case. I actually think the AI market commercially will play out like the cloud market did over the past 20 years. So if you look at the cloud market, I would say there's really big, three big categories of cloud software. The first is infrastructure as a service.
So Amazon Web Services, Azure, Google Cloud, services like that. there's toolmakers. So, you know, Snowflake, Databricks, Datadog, you know, basically, what is the software that you need confluent? What is the software that you need when your company is moving to the cloud? And then there's software as a service. So Salesforce, ServiceNow, Adobe, and the extremely long tail of solutions there.
And I would say, you know, we were talking about the public companies in the stock market in that kind of $2 billion to $20 billion range. There's a huge number of really interesting and really valuable software-as-a-service solutions. Why did that play out that way? Certainly I heard, isn't Salesforce just a database in the cloud? I'm like, come on, it's a solution.
It's a solution for sales, service, and marketing teams, and it has a ton of value. And the same reductive backhanded comment can be made of any software-as-a-service application. And I think it's borne by companies, CIOs, CTOs, CEOs, knowing that actually they don't want to be the one building software. They just want a solution that works. Software is like a lawn. It needs to be tended to.
It's not like you write software once and it just works forever. And the total cost of ownership of building and maintaining software is so great that I think almost every company that has chosen to build their own in a area of their business where there is a software as a solution service available has regretted it.
And you've seen this like secular trend towards away from build your own towards software as a service. I think the same will be true of AI. I think there's a bit of a focus right now on both the data centers and the models because the future is so unclear.
It is by far the clearest way to sort of invest in AI right now is to invest at the lowest layer of the stack because you know that whatever happens on top that those layers will sort of collect taxes. of everyone working on AI above it.
But I don't see why companies would want to take this bag of floating point numbers and morph it into a solution themselves, because I believe the same dynamic that played out in the cloud will play out in AI. So at CIRA, which is my company, we make a solution. We're not doing pre-training. We're fine tuning other people's models to build the solution.
And we're helping companies build customer facing agents primarily for customer service. So for companies like Sonos or Sirius XM or Chubbies, there are other companies like Harvey who are making legal agents, companies making coding agents that are essentially building software.
And I think that if you are a head of a legal department or you're the CTO of a company, why would you want to take a model and try to build all the workflows for your engineering team or take a model and say, OK, let's work with our IT department and see how our partners can use this instead of a paralegal. What you want is a push button solution that solves a problem.
And so I think this idea that somehow the way the world wants to buy software will change because these models are really smart doesn't resonate with me. The area actually of AI that I am most excited about Obviously, everyone's excited about AGI. It's why I chose to work with OpenAI. But I'm really excited about applications. I think it's early there.
And I think there's a bunch of companies saying, we're going to actually build a product that solves the problem. It doesn't just help with productivity. It actually solves a problem. And we're going to cater that solution to a department or a buyer that isn't technical. And it's going to be magical. There's a ton of value there. And I believe that's the way most companies want to buy software.
In the early days of technology adoption, you tend to have very low level platform building blocks available and quite a bit of professional services spend because there is no option other than building it yourself. So you tend to get a short term spike in professional services spend along with some low level building blocks.
And my guess is at least some of that revenue you're describing is companies not having an out of the box software as a service solution available. they see these amazing models like GPT-4 available. And if they want to apply them to their business a year and a half ago, two years ago, their only option was essentially to pay one of these firms to do the last mile themselves.
Over time, I do think that that will diminish as solutions become available that have shorter and simpler implementations. I think that's what companies like mine are doing is essentially, you know, reducing the last mile to actually configure the software. However, the reason I think, you know, this is nuanced and you may be right.
And actually, I think it can be a lot of value that professional services firms provide is around change management. So if you imagine you have a contact center in the Philippines managed as a BPO with one of these customers and you're migrating a huge percentage of your cases to AI, it's not just a technology change, right? It is actually a huge change in the operations of your company.
And then similarly, if you imagine these technologies becoming even more advanced, whether it's reskilling your workforce or actually transforming even the way an entire department operates because there's a agent that comes out that actually means you can completely restructure the way a department is run. One thing that software companies have always been
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