Breaking Analysis with Dave Vellante

Conventional wisdom says Microsoft Corp. is the big winner in the recent OpenAI saga. We don’t quite see it that way.Both Microsoft and OpenAI are in a worse position today than last Thursday, prior to the firing of OpenAI Chief Executive Sam Altman and the ongoing public drama that ensued. Microsoft and OpenAI had a huge lead in market momentum, artificial intelligence adoption and feature acceleration, and were setting the narrative in AI.Our discussions with customers and industry insiders leads us to conclude that the duo has put its substantial lead at risk. Although Microsoft CEO Satya Nadella is making lemonade from lemons, the window was just cracked open for the competition and it’s more clear than ever that one large language model will not rule them all.

IBM's transition from Watson 1Dotto to Watson 2Dotto, their leading technological foundation in AI, and deep research positioned them as a major player in generative AI. The podcast also explores IBM's ecosystem and partnerships, their changing focus under new leadership, the significance of audio in podcasts, and their roadmap and key challenges.

Power Law Explained Wikipediahttps://en.wikipedia.org/wiki/Power_lawHeavy tailed power laws:Why are Power Law distributions called 'Heavy-tailed'?Explainer video for power laws in statistics:https://www.youtube.com/watch?v=JC71ZazlMR0Power law in economics:https://dash.harvard.edu/bitstream/handle/1/34651705/68262294.pdfWhat is retrieval augmented generation (IBM Research)https://research.ibm.com/blog/retrieval-augmented-generation-RAGLlama2 technical paper from Meta:https://scontent-dfw5-1.xx.fbcdn.net/v/t39.2365-6/10000000_662098952474184_2584067087619170692_n.pdf?_nc_cat=105&ccb=1-7&_nc_sid=3c67a6&_nc_ohc=o6bnSMYXMT8AX8QaArm&_nc_ht=scontent-dfw5-1.xx&oh=00_AfD4K2tm94KqZZ6vm0bmor-zmbJ5z5ENslOx60fJRmMO9A&oe=6548D47F

In 1987, Nobel Prize-winning economist Bob Solow famously observed, “You can see the computer age everywhere but in the productivity statistics.” This proclamation became known as the productivity paradox. Ironically, Solow’s statement preceded the greatest productivity boom since the dawn of the computer age which subsequently came to fruition in the 1990’s. It can be argued that a similar pattern is being seen today where AI is everywhere but generally not showing up in earnings numbers or productivity statistics…yet. In this Breaking Analysis we squint through the latest earnings reports from Microsoft, Alphabet and Amazon to understand what’s happening in cloud, evaluate the impact or lack thereof of AI on cloud earnings momentum and explain how we think about the future impact of generative AI and cloud. 

MIT professor and economist Erik Brynjolfsson said recently that he’d be disappointed if AI didn’t lift the  current anemic 1.2% productivity growth rate to 3% or even 4%. This would be a good thing for business and government as it could potentially help with the labor shortage, drive earnings growth and increase tax revenues, which would ostensibly help address current debt levels. This is one of the promised impacts of AI. While the hype surrounding Gen AI has narrowly propped up certain sectors of the market, like AI startups and the magnificent seven, the macro effects have not been felt thus far as adoption remains largely experimental. In this Breaking Analysis and ahead of Supercloud 4, ETR’s Erik Bradley and Daren Brabham join the program to share the latest trends on AI adoption, how Gen AI is being used, some of the deployment models and the AI leaderboard based on spending momentum and presence in the market. Historical trends in the music industry:https://open.lib.umn.edu/mediaandculture/chapter/6-4-current-popular-trends-in-the-music-industry/#:~:text=The%20Big%20Four%20control%20over,current%20distribution%20of%20market%20share.&text=Four%20major%20music%20labels%20control,the%20U.S.%20recording%20music%20industry.Current trends in the music industry:https://musicandcopyright.wordpress.com/2023/04/25/recorded-music-market-share-gains-for-sme-and-the-indies-publishing-share-growth-for-umpg-and-wcm/IDC sponsored content on AI w/ some market data:https://content.dataiku.com/idc-infobrief-2023

Ryan Blue, co-creator of Apache Iceberg and co-founder & CEO of Tabular, discusses the concept of the sixth data platform and the evolution of modern data platforms. They explore challenges in integrating databases, the impact of open data, and transitioning to a data-centric world.

This podcast explores the effects of higher interest rates on technology spending in enterprises and discusses revised budget expectations for 2023. It analyzes the impact of Fed actions on tech spending and the outlook for IT budgets, highlighting the challenges of AI adoption. The limitations of sharing information during ETR's quiet period and the slow adoption process of Gen AI due to privacy and compliance concerns are also discussed.

theCUBE host Dave Vellante is joined by George Gilbert and Bob Muglia for this weeks Breaking Analysis