00:13:14 · Sean O’Kane
So there's hedging going on in the market for sure when it comes to the more AI and data center focused people and... Or companies. And, you know, from there, I think there's just gonna be a lot more for these tech executives to worry about in the near term.
00:13:30 · Kirsten Korosec
[00:13:30] S1: Yeah. I mean, speaking of the near term, I mean, just yesterday, Meta's head of platforms, Dina Powell McCormick, she's at the Wall Street Journal tech conference and and was saying a lot of the points that Anthony was mentioning about it's gonna be harder to get data centers. And she said something that I thought was really interesting, and she said, I can tell you that every hyperscaler is now thinking about, do we need to build outside of The United States? Which I thought was pretty spicy comment, really, because when you think about it, a lot of this push for compute campuses, AI data centers, whatever you wanna call them, is wrapped around the idea of The United States winning the race in AI and how important it is for us to have infrastructure here in The United States. So, you know, back to that transition about talking about space, is that's what... Is that what she's referring to, or is she referring to literally putting these in Canada or in other areas? This really reminds me of another life of mine when I covered energy industries, specifically oil and gas. And what I learned during those times is there was a lot of lobbying and gnashing of teeth about this idea of being regulated. But once the industry was regulated, what they really wanted was certainty in the marketplace. And then they responded, and they adhered to that for the most part. And I say for most part in light quotes. Regulatory certainty actually matters in the marketplace, and so I think that that is what has been missing. It's been a bit of a free for all. And putting local standards and forcing these companies to adhere to those as long as they don't continue to change and and swing the different... A different way within a year or two, I think that they can adjust just fine. And I don't think they need to go outside The United States or in space. That's my prediction. But that's my rant. We'll see how it turns out, and you can call me on it next year if I'm completely wrong. But there's other things that are happening within the industry, and that is seems to be like some workforce corrections happening. And I wanna kick it off by mentioning that Canva is laying off over 1,200 people amid slowing growth. And I'm wondering, is this just the results of what we've been seeing building up to this moment for the last, you know, year, or something else going on?
00:15:45 · Anthony Ha
[00:15:45] S0: I was wondering about that myself in that, you know, on some level, it feels very... Just like of a piece of the fact that, like, every tech company has been laying off, you know, some significant portion of its workforce in the last few years, you know, usually sort of connecting that in some way to AI. And, you know, then there's also sort of debates about sort of, like, AI washing and is this actually also they just had to sort of correct for maybe overhiring during the pandemic. But it it also seems like Canva and and another company that had layoffs recently, Squarespace, and both of them laid off about 20% of their workforce. They do seem connected also in this sort of broader sense of these are tools that made, in one case, of creating, like, you know, images, graphics, art, and in the other case, websites simpler. And so, of course, when you are kind of the the next step in that kind of, you know, democratization, that simplification, what... You know, whatever you wanna call it, there's always a risk that somebody can kind of come up from below and make it even simpler and more accessible. And so it makes sense to me that as much as I don't necessarily think the the AI versions, the vibe coded versions of, say, a personal website are necessarily better, that that would be a very major threat to both of these companies.
00:17:01 · Sean O’Kane
[00:17:01] S2: I know in Canva's case, the cuts were kind of across the board. And so I think to your point about, like, a lot of the larger tech layoffs, I think we are still seeing some of, like, some tail end of what happened sort of mid and post pandemic where, like, all these companies went on hiring sprees coming out of the Zurp era. Like, people just started to get a a little bit more sober about what they actually needed. You know, I think one thing that's interesting to think about too is, like, for a minute there, it really looked like a lot of other companies were, quote, unquote, following Musk's playbook at Twitter as he turned it into x and, like, cut to the bone. And and it was tempting to think that, oh, he's setting an example that a lot of these other companies and and executives are gonna follow of of cutting so hard and and and really just laying off tons and tons of people. I And think there was probably a couple situations where that was true, but I think more broadly, it's this other theme that we've seen of maybe they just overhired to begin with. And, you know, there was always going to be a correction coming. Like, it was surprising to me that Canva had this many people to cut to begin with. Right? Like, that's a that's a lot of employees.
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.