00:18:17 · Kirsten Korosec
[00:18:17] S1: Yeah. I I like your point about the sort of sobering moment. It doesn't have to be doomy to just not be, like, full hype, completely, you know, blowing through budgets. Everyone use all the tokens all the time. Everyone build, build, build. And I do think that that we're gonna see an adjustment. This is a pretty big adjustment for these two companies to be sure, and and I think it's notable that they both have launched their own AI products. But even here in Boston when I was at the founder summit, I was talking to folks who are, like, founders and people running businesses who are using AI tools, and and they all kind of were saying the same thing, which is they're excited about it. But now they're sort of level setting. There isn't this big push for everyone to use tokens all the time, and it's more about the smarter use of AI tools and what really works. And there was this very, experimental, very quick phase in which we just saw this extreme buildup. And I think now a lot of companies, Canva and others, are kind of taking stock and seeing what can we really accomplish, and do we really need all these people to accomplish that? What I'm curious to see is is if other companies follow through the end of the year, this is a period of time, particularly either right now or usually right after the holidays when we see big cuts happen and those adjustments to that 2027 budget. That is to me what we watch for in the future and to really get a sense of whether these are just a couple of one offs or a larger trend.
00:19:48 · Anthony Ha
[00:19:48] S0: One other thing to mention as far as Canva goes is... And and this is not to contradict anything that that Sean said because I do believe that probably there's some, you know, just broader, you know, correction in terms of of hiring that that these companies are making. It is also that Canva did say that its revenue growth slowed this year, and then it's kinda the first time that that's happened. You know, I I don't know to what extent that is specifically driven by AI. And we should say both of these companies have, you know, AI products as well, but you can imagine that in theory, you know, you could use a more general purpose chatbot instead of... Or or just AI tool instead of kind of something that's that's purpose built for either websites or art. So I I I don't know for sure how much of that we should say is specifically due to the rise of these competing tools, but I wouldn't be surprised if that played a significant role.
00:20:37 · Sean O’Kane
[00:20:37] S2: You can contradict me. I'm on my way out. I think there is an element of it. I don't wanna downplay the fact that, like, the the more popular AI tools made by OpenAI or Anthropic and others are competing here in some way. I think that that's clearly happening, and I think that's clearly going to be a pressure on companies like this moving forward. I... There are two things that I wanna say kind of about that, though. One is that there there is, I think, an element, and I think this will be a really interesting thing. I'm eager to watch you guys cover this as as it continues to to go in this direction. There's gonna be an element of like, okay. If Claude can do x y z, what do I need, you know, Squarespace for? I think the answer to that question is gonna be, like, there are people who work at Squarespace. There are, like, things that they're offering. You know, they're packaging a product for you. And with Claude or with with ChatGPT, like, you're always sort of operating on this, like... Yes. You can you can make custom stuff for yourself, and and and it's all great, and it's, like, getting more capable. But there's no, like, person to go to with concerns or questions or guidance or... You know? And, like, you can get some of that from the chatbot, but you can't get all of it from it. And so, like, these companies are just gonna have to figure out how to make themselves... You know, how to make a product that covers all those bases and how to make a service, which is really kind of also what they're doing that is there for you when you have questions or you need need things for, you know, what it is that you're building. And, you know, on that point, like, one of the things that the sort of the Canva CEO said in her note that went out to all the employees is that they're gonna try to reduce, quote, sub specialization, which means the employees might be asked to be doing more with less, probably leaning on AI tools like the ones made by Anthropic and OpenAI. And we're seeing that kind of across enterprise businesses everywhere and across the corporate world, And there is certainly an element of, you know, there of how much can you push that. It's certainly... There... I can totally see where there's value in using those tools to be able to do more than you were able to do before, especially in coding.
00:22:55 · Sean O’Kane, Kirsten Korosec
But now that we're talking in more, like, softer skills, you know, in the corporate world, but there's gonna be burnout from that. There's gonna be limits to that when it comes to the humans who are using the tools. And so, like, what kind of balance are they able to strike? How much are they going to be able to sort of, like, put on the shoulders of these employees before they break is a really interesting question for the next few years. [00:23:22] S1: And it's an interesting point in terms of, like, comp... What what it means for companies like Squarespace, and you can see a future in which some companies will double down on, like, human facing customer contact in order to stand out unlike others, and I'll be very interested to see how that plays out. But I really wanna talk about an incredible tech deal that the number raised both of my eyebrows, and I'm talking about the custom chip designer, Marvell. They signed a deal to acquire Lumentum in an all stock deal, and it is, drum roll please, a $115,000,000,000. That's a lot of money. Thoughts?
00:23:22 · Kirsten Korosec, Anthony Ha
[00:23:22] S1: And it's an interesting point in terms of, like, comp... What what it means for companies like Squarespace, and you can see a future in which some companies will double down on, like, human facing customer contact in order to stand out unlike others, and I'll be very interested to see how that plays out. But I really wanna talk about an incredible tech deal that the number raised both of my eyebrows, and I'm talking about the custom chip designer, Marvell. They signed a deal to acquire Lumentum in an all stock deal, and it is, drum roll please, a $115,000,000,000. That's a lot of money. Thoughts? [00:24:03] S0: I mean, I had the same thought, which is just that, yeah, that is a a lot of money. And I guess... I mean, it's... To me, my reaction to it maybe speaks to this kind of transitional moment that we seem to be in right now where, like... Don't I know, maybe a year ago, this would have seemed, like, kind of normal that just, like, there's so many... The giant rounds being raised, like, m and a. I mean, I think maybe at any time, this would have seemed like a very large deal, but it feels like things have also kind of gotten quieter, particularly for deals of this scale that... I mean, obviously, there's some degree of consolidation as as people are kind of figuring things out and and realizing that that maybe, you know, not all these AI companies are gonna be successful. But to see Marvell spending this much money, albeit not in cash form, but still, like, that is a major major commitment and and just impressive just for the size of the number.
00:24:03 · Anthony Ha, Kirsten Korosec
[00:24:03] S0: I mean, I had the same thought, which is just that, yeah, that is a a lot of money. And I guess... I mean, it's... To me, my reaction to it maybe speaks to this kind of transitional moment that we seem to be in right now where, like... Don't I know, maybe a year ago, this would have seemed, like, kind of normal that just, like, there's so many... The giant rounds being raised, like, m and a. I mean, I think maybe at any time, this would have seemed like a very large deal, but it feels like things have also kind of gotten quieter, particularly for deals of this scale that... I mean, obviously, there's some degree of consolidation as as people are kind of figuring things out and and realizing that that maybe, you know, not all these AI companies are gonna be successful. But to see Marvell spending this much money, albeit not in cash form, but still, like, that is a major major commitment and and just impressive just for the size of the number. [00:24:54] S1: Yeah. I wanna put it into perspective here. So this is one of the biggest acquisitions in tech history. Even though it is an all stock deal, we'll count it as such. No asterisk. Microsoft bought Activision Blizzard for 68,700,000,000 just four years ago in 2022. Dell bought EMC for 67,000,000,000 in 2016. That was a pretty big number back in 2016, by the way. That's, like, quite a long time ago. But it gives you a sense of the scale of what this size deal is.