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.
00:25:24 · Sean O’Kane
[00:25:24] S2: Yeah. I mean, I think that one of the most interesting things to me about this deal is it's like... It seems pretty emblematic of something that... A conversation that I kept having at Disrupt last month, in particular with Carl Alomar from m thirteen, who was sort of lamenting both on stage and backstage about how the inflated valuations of basically any company working in AI, whether that's on the software side or here on the hardware side, is just absolutely tilting the playing field when it comes to startup investing and acquisitions and the tension between those two things. And, you know, his position as an investor was basically, like, they're losing a bunch of opportunities to stick with companies that they think should continue to go through sort of the early to mid to late stage funding process because there's just so much of this kind of, like, funny money stock that companies like Marvell can throw around to just say, hey, we don't, you know, we see value in just acquiring this company and we have the ability to do it now on paper, so let's just do it. And so there are all these kinds of distortions happening in the broader space that I feel like we're gonna have probably some kind of reckoning with over the next few years. And I don't know what that's gonna look like, but I I do not think we're done seeing this this kind of stuff happen.
00:26:51 · Anthony Ha, Kirsten Korosec
[00:26:51] S0: Yeah. So this isn't the only acquisition that we wanted to talk about this week. We're We're about to talk about some other deals that I think on a normal week would seem like pretty sizable deals, but they are kind of dwarfed by by the the Marvell deal. But CrowdStrike paid $400,000,000 for a cybersecurity company called Fiddler AI and then 95,000,000 for another company called Dreadnode. It seemed like these, you know, deals kind of got packaged together in an announcement of, you know, CrowdStrike kind of making a big investment to kind of expand on the AI security side of things, which seems very well timed. [00:27:22] S1: Yeah. Cybersecurity is so hot right now. I wonder why.