Gerstner dismisses valuation concerns for Snowflake at 100x forward sales given 100%+ growth in strategic software category.
“No growth investor would listen to that and think that there's anything unusual about a company growing well over a 100% in the most strategic location of all of software.”
Gerstner reports Satya Nadella told him Copilot is Microsoft's fastest growing product ever, beating Windows and Office.
“Satya, the CEO of Microsoft, who I saw last week, said to me that Copilot is the fastest growing product in the history of Microsoft.”
Gerstner says Google's query growth had already slowed to 4% annually before AI, with 10 billion queries daily.
“And so the first thing that we just say is that the basing engagement, even before AI had slowed down a lot, because you're already at 10,000,000,000 queries a day.”
Gerstner says NVIDIA will do 125 billion revenue this year versus prior billion dollar ceiling.
“Give or take you'll do a 125,000,000,000 in revenue this year. You know there was at one point somebody told you the company would never be worth more than a billion.”
Gerstner reports Microsoft expects Azure revenue to accelerate despite already growing 34% on a $66 billion base.
“Microsoft, which is on $66,000,000,000 run rate at Azure, has said they expect q one and q two Azure revenue to accelerate. Think about that, Bill. Azure is growing at 34% on a $66,000,000,000 base,”
Gerstner notes technology grew from 3% of global GDP in 2000 to 15% today, likely to increase further.
“Back in 2000, technology represented about 3% of the global GDP. Today, it represents about 15 of global GDP, right?”
Gerstner reports Snowflake beat consensus with 33% growth versus 27% expected and raised full year guidance.
“33% growth, accelerating growth versus consensus of 27% growth. They took up their full year guide by more than their q one beat.”
Gerstner notes AI company reached trillion-dollar valuation just three years after product launch.
“We're talking about delaying an IPO for a company that launched its product three years ago and is already at a trillion dollars in valuation.”
Gerstner predicts AI companies ending the year over $100B could triple to quintuple revenue next year.
“If these guys end the year over 100,000,000,000, I think that they're on a revenue trajectory that they could three to five x again next year.”
Gerstner says no need to change regulatory approach mid-race as America is winning across AI stack
“@sundeep 🎯🎯🎯 - no need to change regulatory horses mid race - America is winning. Closed, open, chips, ai stack all winning. 🇺🇸🚀”
Gerstner says frontier labs still capture roughly 90% of AI economics despite open source token share gains
“@Jason Agree. Grt competition! Share of tokens increasing at open source models (tho both still early in growth curve & growing rapidly). But share of wallet / AI economics continues to be ~ 90% to closed / frontier labs despite dire forecasts. The question is if / when changes. 🧐💰”
Gerstner counters slowdown narrative, calling OpenAI and Anthropic the fastest growing companies at scale in history
“@IbrahimAjami Really? OpenAI & Anthropic are the fastest growing companies at scale in history. And cooking - arguably extending their research leads & gaining share of wallet / economics. Open source is also thriving which is grt - but not zero sum. 🧐”
Gerstner praises Databricks for stacking S-curves and defining markets over a decade as a shareholder
“@alighodsi Truly legendary. I have watched Ali & team brilliantly stack S curves for a decade. Nobody could touch their execution. Their growth & success was not a single product. They didn’t wait for markets - they took risks & defined markets. We are grateful shareholders. 📈🫡”