Software companies' business models are 'under assault' from AI

Eric, I just had a great chat with Superhuman's CEO about the future of software. I mean, he said he's got a concern still about where it's going, but a little more optimistic as you would expect. Are you as optimistic as someone like that leading a software company on software stocks? I'm not. I'm very bullish about AI, Brian. I'm LFG on AI all day, but I'm not LFG when it comes to the legacy software stocks. I think the moves that we've seen in the last week are real. They are repricing, and anybody who thinks they're lining up to kind of jump back in for a V-shaped recovery in software stocks multiples, you're going to do it without me. I think the jolts data last week, the pullback from hiring, perfectly goes with the decline in the multiple in these software names, and it's basically productivity per employee is shooting up. There's not the same need to hire as we once thought, and that's a game changer for names like Salesforce. Salesforce has basically been a bond for the last almost 30 years. You could just always count on their per seat pricing going up and expansion as far as the eye can see, and that's changed. The terminal value on all these legacy software names have changed. It's going to be the AI names coming up, building from the ground up with the AI tools that are going to attract the new investment dollars. Eric, I don't want to sound like a jerk on this front, but should investors just view the very future of a company like Salesforce, Workday, and ServiceNow, are they in limbo because of what you're seeing coming out of the likes of an enthrapper or an open AI? Yeah. I mean, from my perspective, absolutely, they're in limbo, and there are no touch in terms of investment. The best I think they can hope for is to slow the melting ice cube, and so they will wave hands and they will talk about how they are going to incorporate AI to become more productive themselves as a business, but their whole fundamental reason for existence, it was built in an era pre-AI, and therefore, that business model is under assault from AI. You're just able to be a lot more productive today. For example, I'm growing EMJX, which is going to be my second generation version of a crypto treasury with hedging and a risk intelligence framework. I've got a core group of probably 10, a dozen engineers, and I want to build a billion-dollar business. In the past, it would have been preposterous to imagine building that size business with that size team. You would have had to envision adding hundreds of engineers, hundreds of product people and so forth, and the game has changed. It is actually feasible now, and therefore, that's just one small company. Now, multiply that across the US economy, the global economy, and it's shocking how much more productive we're going to be, and therefore, how much fewer jobs we'll need, how much fewer the legacy software tools and seats we'll need. Ines, while we're trying to figure out where there might be some form of short-term bottom in software stocks, at least we can say Bitcoin has stabilized a bit, for now. For now, it has stabilized a bit. You have CompassPoint that just came out with a note saying that you may be nearing a bottom, but they also are saying that you could see a leg lower. I mean, that's right now what the conundrum is on Wall Street about where Bitcoin is going to go, because you have bullish calls from Bernstein, for example, still saying that 150 by year end. But you do have Wall Street that is saying, look, we did see this leg lower. We saw a big rebound last Friday, but you could see prices going down as far down as into the 50s. And you've got some that are saying that you won't see a bottom until the summertime. So there is some caution out there among some strategists about where prices are going. And Ines, we're going to get a great read when we have Robinhood earnings coming up. We have Coinbase earnings coming up this week. These stocks have been hammered, and they really all had a great run up last year in part because of this belief in crypto. I am, Ines, I'm just unsure how these fourth quarter results are going to look. And then more important, perhaps, than that, how do these companies guide for the first quarter with crypto well off the highs? Yeah. And I think that what Wall Street is seeing is that with Robinhood especially, Robinhood has diversified itself so much beyond crypto that, yes, crypto is part of the Robinhood story for sure. But you are seeing other businesses that are expected to offset the weakness in crypto. So you're looking at their trading volumes that are up, the prediction markets, that's their fastest growing segment. So that's what Wall Street is focusing on. Robinhood's going to be reporting this afternoon. And what I'm going to be watching for is that, is that enough to offset the weakness in crypto? And if you take a look at what the ratings are like, I mean, there's 24 buy ratings on the stock for hold. And so we have seen weakness with the stock recently. But watch out, because there's an expectation that there are other businesses are going to hold up the float here. Eric, you think what we have seen in Bitcoin in the past five days, that's just a dead cat bounce? I think you want to be cautious about jumping into the pool. I mean, I'm building a crypto treasury. And so I think people who have sort of skin in the game often, you know, want to cheerlead and say, oh, that was the bottom, you know, everything's fine now. But of course, you know, remember, it's just was in mid-January that we were thinking like, oh, the worst is over. We're at 98k on Bitcoin. You know, I guess things bottomed in December. And then whoops, you know, like how many people predicted that we'd be at 60k a couple of weeks later. When you look at the positioning in the futures market for Bitcoin, there are still a lot of people adding shorts there and a lot of longs that like didn't get out. And that's sort of a recipe for, you know, potentially another leg lower. Nobody knows. I mean, is the honest answer, Brian. But I think you just usually these kinds of the full capitulation doesn't happen until you see a lot of like longtime bulls selling their positions. And I don't think we've got there yet. Eric, as someone literally in the trenches working on a Bitcoin treasury, why are you doing so? What is motivating you to create this? Well, the kind of volatility we've seen in the last three, four months. You know, I don't think the generation one treasuries have an honest answer of how to deal with that other than say, oh, oh, just wait, wait 15 years and then everything's going to work itself out. I think the market is hungry for a treasury that does have a more sophisticated detection system and hedging system to kind of allow you to be bullish on Bitcoin and Ethereum, but to do so in a less volatile way that doesn't see as steep drawdowns as we've seen in some of the players that are just sort of, you know, sitting back and hoping for the best in the long term. So, you know, it's always a good time to start a company that solves a problem. Google was started in the middle of the dotcom winter. And so hopefully, you know, time will prove out that, you know, this was just the right time to be starting, you know, my Gen 2 treasury, EMJX, merging with SRXH. Good luck on building that out, Eric. Keep us posted here. I appreciate it. And as always, good to see you as well. We will talk to you both soon.