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

Absolutely incredible edition of the Wall Street Journal. Over the weekend, I saw these in 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? And 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 it was too terrifying yeah it was too so so we skip it but uh he says people think we have our back against the wall 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 sass apocalypse and what he's going to do about crazy opening mark benioff has some problems His 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. It'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 saspocalypse 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 them for now anyway nor could yeah he's like i dare you i i dare you he's uh nor could customers i i wish i wish we had benioff on right now yeah It's a joy to speak with him. But continuing, nor could 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 Anthropic, 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. codename agent albert it's kind of cool to put agent in the name instead of just albert agent well they had 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 chad gbt instituted a standing saturday meeting to accelerate salesforce ai efforts saturday stand up everyone 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 little under 20 percent of the customer base is using uh agents they're building remember jason lemkin came on the show and he was like i use agent force it's solid yeah like he's like it won us back a customer that like we weren't reaching out to and it like it made me money yeah so he was an agent force um yeah enthusiast and so uh salesforce's yearly revenue growth at 10 is down somewhat from recent years but interestingly the the deceleration in uh in salesforce's revenue growth started back in 2022 maybe even a little bit earlier if we scroll down on this 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 re-acceleration this year from 8.7 to 9.6 to 10.8. And so it feels like definitely too soon for the sas apocalypse narrative to show up in the actual uh revenue growth rates of these sas companies i pulled together uh the recent earnings from a variety of uh 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 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 you know it's a kanban board a task list but it's still growing zoom at 5.3 percent snowflakes growing 30 percent work days at 14.5 percent hub spots at 20 percent data dogs at 29 percent cloud flare 34 percent uh monday.com 25 percent like there is really really strong revenue growth across the sas 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 positive word of mouth from clients talking up the value they derive from its AI products. Like Jason Lemkin, 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 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 uh still it was caught flat-footed by the arrival of high-functioning chat bots in the form of chat gpt customer super intelligence customer super intelligence i mean this is it is it is funny because uh a lot of this the agentic enterprise it is a little like boring and it's not as like sexy as some of the the more like crazy sci-fi scenarios but in terms of just incrementally improving the value that is delivered to the customers it seems like things are doing okay uh 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 uh to help fix the problems built 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 ai powered sales. At education company Pearson, agents now autonomously handle queries about order statuses, refunds, and lost access codes for its customers. This has increased the percentage of customer questions that don't involve human interaction by 40%. Where AgentForce has been lacking in its addressing complex customer problems and those require human touch, David Wemsley, Chief Digital Officer at Pandora Jewelry, said AgentForce 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 funny question but i mean i guess the natural text natural language interface should be able to find you jewelry based on a love of dogs although i think that a lot of people who are dog lovers might have different tastes that appeal to their jewelry like why not just get her a dog or multiple dogs yeah i don't know uh so how does this how does how does salesforce's view compare to the verizon ceo so so uh verizon has a new ceo his name is dan shulman i don't think he's related to john shulman but he is stepping into the ai debate uh he says for uh 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 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 okay disruption put this into context for me he's uh so uh 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 yeah 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, right? He was saying there's a risk to entry-level white-collar work. And that sounds really bad until you actually dig in and you realize that America only has 5 to 7 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 unemployment rate would sit somewhere between six and nine percent which is not great and it serves and it's obviously deserving of intervention but it's far from the 20 to 30 percent outlined by dan shulman and it's it wouldn't even be even if the dario scenario 50 of early stage white collar work uh unemployment that happens you're still below covid below the great depression uh and i think that there's a whole bunch of uh government interventions that could that could offset that pretty quickly like 20 to 30 percent is truly like the do nothing the government never engages there's never any sort of uh you know incentive to to keep hiring people and there's this like fast takeoff in 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 uh 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. 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 true. just like the saspocalypse is not showing up in revenue yet uh you know ai unemployment is not showing up in any of the employment statistics yet but uh this individual was on a podcast it was saying that uh 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 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. 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 And I was like, how, how big of an issue is, how big of a, of a, of a, 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. And that is probably more concentrated than many other countries. It's probably many. It might be, 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, no action from the fed, no action from the government. And it seems a little bit, a little bit crazy. So I can't tell if this is just like saying the biggest number. There's a little bit of that going on here where if you want to grab headlines and you go out and you say, okay, 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 of public backlash. It's a very difficult time, and everyone knows this. 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 dollar career transition retraining fund for the age of ai he's like began laying off we are gonna 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 he's 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 COVID and beyond, and a $20 million career transition and retraining fund is great. It's a good start. That is good. This is a good thing. But he says, 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 demur 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 Wang 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. 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 U.S. 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. 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, 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. They should be very candid with them and paint a big picture. Schulman'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 yeah so verizon has 90,000 employees and they laid off uh 13,000 so maybe like a little over 10 percent uh riff verizon's a weird one because the stock is basically completely flat over the last it's actually up 15 percent year to date and uh it is an incredibly stable stock and it's also just like should not be a victim of the saspocalypse because they own spectrum allocation cell towers they own cell towers exactly and that's just where they 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 cell gets really good and 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 like 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 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 like 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 uh it 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. Trust 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 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. In tech, we're starting to, every company is adopting this technology. at a rapid rate yeah but everyone's like hey this you know basically like jobs aren't tasks right this sort of narrative is building like we need to figure out how to we've built a bunch of very useful tools yeah and they are going to have powerful effects in our economy yeah but uh we have to kind of change the narrative around this because like a fear-based approach is not working and and meanwhile he's like AI is coming for your job everyone knows it write your obituary so not so not helpful and and and they're not even doing AI related job cuts, no I love I just don't understand, I don't understand this whole press cycle, I love I love I love that he just comes in just immediately starts blackpilling, it's so wild to just get this job and immediately start blackpilling so do you think this is a setup for for a much like deeper layoff than they've done historically, I don't know, I mean it's possible but I like I think that they would need to do some serious like AI tooling and implementation 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, uh but for a lot of, but for a lot of the folks at Verizon, I imagine that they're that they're working on bigger projects than just uh you know just throwing throwing tons and tons of people at a single problem at the same time who knows, maybe maybe it's 50, maybe half the company is uh 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 i like that sentence that's good blue origin rocket stumbles on first commercial mission uh AST SpaceMobile who we've talked about a few times here jeff bezos's rocket company said the satellite from AST's was deployed into an incorrect orbit and so uh a little bit of a setback for them uh 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, a feat only Blue Origin and Elon Musk's SpaceX have ever achieved with orbital rockets. But the mission later suffered a mishap. A satellite the rocket was carrying into orbit for AST SpaceMobile, a company building cellular broadband networking 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. The payload was placed into an off-nominal orbit. AST said the satellite's altitude was too low to sustain operations and that it will be taken out of orbit. The cost is expected to be covered under its insurance policy. The stumble comes as Blue Origin works to ramp up flights with New Glenns. Yeah, I saw some of the AST retail army saying, like, don't worry, keep holding. Keep holding. it's covered under insurance very unfortunate but it seems like it's somewhat rebounded a little bit somewhat to be expected right as blue origin like figures out their commercial business yeah it traded down like 16 overnight but it's down uh just six percent today so a little bit of a rebound and we got a fantastic video of the booster landing that we can pull up here yeah tyler you dug into why doesn't ASTS just uh launch on SpaceX well so there are two things I think one thing I thought was interesting is, like, there's this whole press cycle about it, like, oh, it was, like, a failure of a launch or something. But this has, like, happened a number of times before. Like, SpaceX in 2024, there was Falcon 9 that kind of the upper stage, like, failed. And then a few, like, Starlink satellites. Just went into the wrong orbit. Yeah, basically. And then they're too low, and then they just get burned up. Yeah, companies don't typically like to talk about when they send something into space and lose it, basically. But that happens, too. I remember at the beginning of last year, there was a launch for a venture-backed space company, and they basically put a satellite up and almost immediately lost contact with it. So it's not unusual, unfortunate, but they'll be back. In 2016, SpaceX blew up a Facebook rocket. Mark Zuckerberg laments the loss of internet.org satellite. Facebook's CEO said he was deeply disappointed in the explosion of Falcon 9 rocket-carrying satellite intended to provide internet coverage to parts of africa writing on his facebook page zuckerberg said as i'm here in africa i'm deeply disappointed to hear that spacex's launch failure destroyed our satellite that would have provided connectivity to so many entrepreneurs and everyone else across the continent the accidental explosion of the falcon 9 rocket early thursday morning this is back in 2016 referred to as an anomaly by spacex engineer destroyed both the rocket and its cargo the Amos-6 satellite dolly bolly says uh is showing a screenshot from i believe is biz biz by sal of a laundromat which is selling uh it's got 421,000 of EBITDA asking just under three million so getting a better multiple for your laundromat than most than most public SaaS companies out there right now and it was established in 2024 wow they just made this business in a couple years and they're like i would like three million dollars for it now okay a couple more posts uh john fio friend of the show says the sphere is probably the most important piece of architecture in the last hundred years it's a hot take it's what the VR trade was trying to be but manifested in the real world with a real novel experience instead it's what apple and meta were trying to go after but failed because they tried to shove it into a scalable box instead of building for real life a sphere in every major city will be a proprietary technology for a new kind of stadium it will suck in only the best acts and they'll stop playing regular stadiums it's the perfect example of mixing real novel tech with real novel life this is how you capture value over the next cycle and i agree with this i think this is a great take so So, uh, yeah, rewind a year ago, you're like companies are going to announce hundreds and hundreds and hundreds of billions of NVIDIA orders. Meanwhile, we have the sphere, which they built the sphere. It's one concert venue. They built a, they built a really cool concert venue in Vegas. They got a bunch of debt, but it's awesome. Which one do you want to own? And of course on NVIDIA, you were, you were still up a hundred percent over the last 12 months, but if you had bought the Sphere, you were up 442%. Yeah, did very well. I made a whole YouTube video about the Sphere two years ago and was pretty bullish on it. Had dug into the founder and how it got built. And it was just a fascinating, fascinating story. But I think he's right that there will be a Sphere in every major city. There is technically a Sphere-like location in Los Angeles over by SoFi Stadium. it's not technically a full sphere with LEDs on the outside but it has a big screen you can go and watch a football game there and i think it's doing well it's kind of a miss that we've never done anything with the Sphere no last a little white pill here meta announced level up a free four-week training program that takes people with no prior experience and prepares them to work as fiber technicians on data center construction sites across the u.s we built this program with CBRE because the fiber technician field and the broader construction industry is facing a nationwide shortage at a time when data center demand is higher than ever and i'm sure people will come up with reasons why this is bad actually but uh i think this is i think this is great great opportunity and tyler uh uh we didn't get a chance to talk with you about uh with talk with you about this before the show but you're actually going to be going through the program um starting tomorrow we got you a slot and uh so get this actually seems fun i would be interested in doing this They made Data Center Simulator in real life. They made Data Center Simulator in real life. That's amazing. Tyler, do you ever play Elden Ring? No. No? Oh, it's such a good game. More like online games. Elden Ring can be online. Okay, I don't know. You can play with people. They're making a movie about it. The live-action adaptation of Elden Ring, produced by A24 in partnership with Bandai Namco, and filmed for IMAX is slated for release March 3, 2028. Wow, that's a long ways away. production will begin in spring uh but if you haven't played Elden Ring it's a fun time it's really really hard and uh sometimes it just gets like a little bit too much but well folks thank you for tuning in we will be it's been an honor and a privilege leave us five stars on apple podcast and spotify sign up for a newsletter at tvpn.com and flashbang out we'll see you later there we go throwing flashbang we love you goodbye