00:00Yeah, you know, I mean, when we look back, actually, the reaction was initially quite positive.
00:05And, you know, there's obviously lots of different ways you can take this messaging.
00:07I think a lot of people took it as a view that, you know, these open AI and Anthropik in
00:13particular,
00:14looking to strengthen the moat they have against, for example, the likes of Meta,
00:18obviously news today that they're taking a new CEO for their enterprise business.
00:23And that, you know, actually, as much as there may be some concerns about the pace at which AI is
00:28developing
00:29and our control over it, that actually this could be a good mechanism for them to kind of protect the
00:34moat they have,
00:35because it would constrain the whole industry in terms of the pace of development.
00:38You know, I think broadly speaking, obviously, there are still concerns about, you know,
00:42the kind of three to five year outlook for AI.
00:45But, you know, certainly in the near term, and again, reflected in what NVIDIA has done today,
00:49the market is pretty confident that there's enough momentum to sustain the next one to two years.
00:55And, you know, enterprises are still at an early stage of deploying AI into their businesses.
00:59And even if you didn't have any further evolution of the frontier models from where they are today,
01:06there's still lots of technology capability there for enterprises to play with and really shift the way their businesses are
01:12run.
01:13So we're approaching the end of the third quarter.
01:16The fourth quarter will begin soon on October 1st.
01:19And that means earnings season is kind of around the corner.
01:21The big tech names report at the end of October.
01:25What are we likely to hear from them when it comes to CapEx?
01:28I mean, are they going to continue to increase CapEx at the rate that they've been increasing in thus far?
01:33Or will all the political discussion over AI and whether we should slow development mean that
01:38some of the hyperscalers will start to see the numbers reflect that slowdown?
01:45Great question.
01:46My sense would be that the market is still anticipating growth in spending next year.
01:55Obviously, nowhere near the pace we've seen this year.
01:58But I think we're still expecting to see it increase in that, yeah, as much as there's been a lot
02:04of fanfare
02:05around slowing the pace of model development, there's still a huge amount of implementation spend to come through.
02:13Probably right now the biggest constraint on the pace of capital spending growth is the supply side,
02:21all the way from the kind of fab units to the chips to the capacity to make the chips,
02:28and then also all the way through to energy and space and how quickly can you actually deploy data centers,
02:34which is where ultimately all of this CapEx ends up.
02:37So that's probably the biggest natural constraint, I'd say, on spending.
02:41Matt, it probably doesn't surprise you, but I am way ahead of both John and Scarlett on AI.
02:46I'm way out there.
02:47I've got the window on my phone that's got the apps.
02:51I've got ChatGPT, I've got Gemini, I've got Claude.
02:54He added Muse.
02:55I added Muse.
02:56But I'm guessing.
02:58I'm not the monetization that these gajillion-dollar CapEx are being spent for.
03:03Talk to us about enterprise integration of AI.
03:06Is that happening?
03:07Because it's not cheap to deploy AI and use AI in an enterprise.
03:12It certainly isn't.
03:13I mean, it's definitely happening across every sector.
03:17And if anything, this year, enterprises are kind of running into some spending constraints or obstacles they probably hadn't anticipated
03:28because they've kind of largely let their engineers run loose with playing around with this stuff.
03:33And then they suddenly realized that the consumption is ahead of the budget they put in there.
03:37And they're now having to scratch their heads and go, okay, do we increase our dollar budgets to continue within
03:42a pace of development?
03:42Or do we have to start to kind of find ways to kind of moderate or change the way our
03:47engineers are using AI tokens to kind of develop things?
03:51And the answer has so far been a bit of a mixture of the two.
03:54But, yeah, the enterprise market is huge.
03:56It's a massive, massive, massive multi-trillion-dollar market when you look at technology as a whole.
04:02And I think it's becoming the new, you know, kind of theater of competition, if you like, between the big
04:09players.
04:09And, you know, this is where Meta's coming in with its enterprise strategy.
04:12And historically, Meta, very much a consumer-focused, ad-funded business and looking to kind of compete with OpenAI and
04:19Anthropic in that space.
04:20I think it's going to be a really interesting space over the next 12 to 24 months to see how
04:25that competition evolves.
04:26But it's kind of really a huge opportunity for all of them.
04:29Yeah, and Meta's doing that, as we mentioned, by tapping MongoDB's president and CEO to lead this new AI platform
04:37for enterprise customers.
04:38Has Meta ever done anything at an enterprise level, targeting enterprise customers?
04:42I mean, is this the first?
04:45I think if it isn't the first, then it's kind of close to a first.
04:49It's, you know, certainly I think their kind of biggest, most significant push into this.
04:53I mean, they've been, you know, working and engaging with corporates indirectly, I'd say, in the AI space so far
05:00because, you know, their models are open source.
05:02And so a lot of companies do use them.
05:05But I guess that's kind of a bit of an arm's length interaction because there's not so much direct involvement.
05:10This is, you know, much more significant, almost like kind of consulting evolution of, you know, I guess kind of
05:17forward deployed engineers.
05:18That's the kind of phrase that we never used to talk about, you know, kind of helping organizations.
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