Ford, General Motors, Palantir: C-Suite Insights

Every week, Yahoo Finance brings you insightful conversations with leading C-suite executives. This week, we spoke with Christian Vernet, CEO of La Compagnie, about upcoming summer airfare prices. Paul Jacobson, EVP and CFO of General Motors (GM) shared his thoughts on the future of electric vehicles. Joe Park, Chief Digital & Tech Officer at Yum! Brands (YUM), discussed the company's future with artificial intelligence. John Lawler, Vice Chair of Ford (F), talked about the current demand for electric vehicles. Mark Bristow, CEO of Barrick Gold (GOLD), provided insights into the precious metal markets. Finally, Alex Karp, CEO of Palantir (PLTR), spoke about advancements in artificial intelligence.

For more expert insight and the latest market action, click here.

Video transcript

Every week.

Yahoo Finance brings you conversations and valuable insights from leading C suite executives.

We discuss their current challenges and explore future opportunities.

Take a peek at this week's insightful interviews, ts A they're preparing for the busiest summer travel season ever.

And according to Hopper, 87% of their users plan to take a trip this summer with 13 million of those travelers heading to Europe, the Paris Olympics, one of the big draws for travelers this summer.

So what are we seeing in the US to Paris travel this year?

Joining us now with the insight into summer travel trends, we've got Christian Verne, who is the CEO of the company.

Great to have you here with us today.

It's a business class airline operating regularly scheduled transatlantic flights between New York and Europe here.

Break down the trends that you're seeing for us and the demand, especially for business travel to some of the routes that you go to.

So for this year, for the summer, 24 globally, our load fighters seems to be to be very well oriented.

We are going to reach at least 90% load factor for the summer which is a representation of a very good year.

So demand to Europe is very strong in the US and it has been strong since the outset of COVID 22 2022.

Travel revenge was the first exercise where we have seen a massive amount of passengers flying back to Europe 2023 was a bit similar.

And 2024 WE Olympics, which is uh somehow uh of a dynamic factor for for Paris routes in particular, uh we do see very significant demand.

OK.

So with that in mind, I mean, you're primarily focused on that business class experience here.

So as you're thinking about the type of traveler that's flying with LA company, where are you expecting to see these trains trends remain intact over the longer term?

Well, if you talk about the summer time is essentially leisure traveler including in the business class travel that we, we have, we have we are full business class airline.

Um Obviously, the corporate travel is, is a bit different and or at different periods of the time, what do we see?

The tendency is that the trend is that the leisure travel is very strong, it is keeping stronger than it was in 2019.

For instance, the corpo travel is not as significant, as strong as it was PRE COVID for sure.

I believe that it is going to take another two or three years before we get to the pre pandemic factors.

But globally, we see an overhaul, business travel demand very, very, significantly higher than it was before, which is good news for the industry is good news for the economy in general.

And uh well, we do everything we, we, we made to serve that uh that excursion in, into demand.

I mean, look, this looks like a very swanky excursion here.

I'm taking a look at the interiors of the plane itself.

I believe this is the a 321 neos that you're operating.

Yes, it is.

Exactly.

Yes.

All right.

So excellent there.

When we think about the expansion plans, what's that look like for the business?

Well, for the time being, we only have two airplanes flying to from New York to Paris.

Nice and Milan and we are currently these days working at securing a third airplane and more to come after that from 2026 it's a bit remote, I must admit.

But that, that's the, that's the dynamic of the aircraft manufacturing industry, which is a bit difficulty at this time.

But we want to add more capacity because what we offer to the public is very highly demanded and like you have seen on the screen now, we do offer a very specific welcoming environment for passengers and they do like it very much so demand is picking up and our goal is to serve that as best as we can for the use.

You, you mentioned the difficulty of the aircraft manufacturing equation right now.

And I, I wonder from your seat, the pulse of Ceo S as they think about the orders that they're making, either with Airbus or Boeing, given some of those difficulties right now.

Yes.

Well, uh I mentioned the time to get an airplane.

I mean, uh, I remember back in late 17, took me 14 months to get, uh, the first a 321 new airplane.

Today, it is required to me to provide at least two years and more to get an airplane.

And that situation has not evolved in a favorable manner over the last couple of months.

And it is expected that the Boeing and Airbus production level will not be able to capture with the increase in the level of demand that Ayata sees for the years to come.

So we are facing some potential times as far as supply of airplanes is concerned.

Yeah, we actually we're breaking down some of what Aya had just put out in their own trends and expectations for the next few years, just a few weeks back.

I believe that was as you think about the, the way the consumer is looking like they want to spend on travel, what should we expect in terms of price moderation?

Well, price depends a lot on competition and, and the supply of seats in the routes that we serve.

And I must say it is different according to different markets that are to be looked at on the routes we serve.

Competition is very intense.

So the pressure to keep prices down is is is very significant.

And for instance, frankly, from Paris to New York in business class, for instance, the prices that you get in 24 are less than the one you get you got in 23.

So that is good for the consumer, but that's good in general from competition, competition is putting prices down and quality high.

Yet there is a limit to that because obviously the escalation that we get from resources, airplanes, fuel services, airport services and others are putting pressure on the profitability of the airline.

So at one point time, we may have some small hikes into the prices.

But globally, we are all working hard to improve our efficiencies and make sure that we can offer the same level of service even better at the same price or even better price in the future.

Christian Vernet who is the CEO of the company.

Thank you so much for your time today.

Turning now to the auto industry General Motors approving a new $6 billion share repurchase program.

Today, the company CFO Paul Jacobson attributing the move to strong revenue growth margins and cash flow.

Joining us live from Deutsche Bank's Global auto industry conference in New York City.

We have the man himself, General Motors Chief Financial Officer Paul Jacobson alongside Yahoo Finance's pros subman and hey, pros take it away.

Hey, thanks.

Brad.

Yeah, here with the man Paul Jacobson, GM CFO.

If you just announced Brad, talking about that new $6 billion share repurchase plan and this is on top of the $10 billion.

You guys did a sr at the end of last year.

So what sort of kind of, what's the, what's the story here between GM and now it's a lot of cash return shareholders?

Yeah.

Well, thanks for the time.

Uh Today, we're excited to be here at the conference and uh share the share, the big news, which is we're continuing to lean into our capital allocation policy and as the business has continued to perform and we've seen stable pricing, we've seen disciplined incentives uh from our team and we've seen a vehicle portfoli that is customers just love and all that spells a lot of success.

So we're able to invest in the business.

We're able to maintain a strong balance sheet and we're able to return cash to shareholders.

So we've completed that private prior buyback authorization that we have done and pleased to announce that the board has just authorized another $6 billion in share repurchases that will commence beginning in the second half of 2024.

Yeah, and, and you guys also boosted the dividend at the end of last year.

Uh So, you know, a lot of big news from a capital sort of return point point of view.

I think investors here at this Deutsche bank conference.

Happy to see that.

But some of the business too, what sort of evolution they're going on right now as we, as 2024 kind of the halfway point here.

Uh, EV sales ramping up ice still is still strong.

What's going on with the mix there?

Exactly.

So, you know, we've seen, um, we've actually seen EV growth moderate a little bit this year for the industry, but MV, growth is outpacing everybody.

We're picking up significant share.

We sold over 9500 evs in North America last month.

Um So seeing really strong gains in the lyric in the blazer, really excited about the game changing Equinox, which will be the lowest price 300 mile range uh vehicle on the market in the EV space.

And that's just starting to now get momentum as we see going forward.

So we're starting to execute really, really well ev space and seeing that ramp up and the ice portfolio with the new Traverse, the new Equinox, those vehicles, not only our customers really flocking to them, but they're also more profitable than the, the older models that they've replaced as well.

So the business is really performing well.

You know, you talk about cars, the the tracks, a cheap car that you guys can build affordably.

What about that Equinox?

EV, that's going to be a mainstream ev you guys are trying to target a, a profit metric at the end of this year.

Is that still in play for evs?

Yeah.

So what we said is, um you know, we expect to produce 200 to 300,000 evs this year and we can be variable profit positive.

So this means that we can, we can sell it for more than the cost of the materials and start to offset all of our fixed costs.

We believe that we can be in that position in our whole EV fleet by the end of this year and guarding uh gating the way to become uh profitable on an E bit basis in 2025 and beyond.

What about P haves and hybrids?

I know, you know, the Corvette E Rays out there.

We, we were talking about that earlier.

It's a great car, amazing performance.

But are we going to see that technology trickle down to the, the more entry level cars, when are we going to see those es come out?

So we have, we've talked about adding a plug in hybrid or a P have beginning in 2027.

Um We see this as a pretty valuable tool for us to help bridge compliance against EV adoption.

So for those customers who down the road aren't yet comfortable with evs, a plug in hybrid is a great option to sort of get that additional range extension plus, still have the backup of, of an ice engine um for road trips, et cetera.

So we think that this can be a really good tool to help some of those skeptics bridge into EVs for the long term.

But when you look at our portfolio of battery electric vehicles, it's, it's really is compelling what we're able to offer in terms of style, range and capability and the kind of capability to sort of augment that with P habs and hybrids down the line.

Uh Look big picture at the business.

We're at the conference here, We're gonna be talking to some investors short shortly about that.

Um What are some of the kind of key highlights you want to note for 2024 and beyond and sort of like the, you know, your adjusted EBIT on a more uh targets, things like that.

Yeah.

So, you know, we came out um at the beginning of the year and talked about 12 to $14 billion of EBIT and we were able to raise that guidance uh at the end of the first quarter based on the out performance and the business is continuing to perform very, very consistently for us.

So we've always taken a very sort of um stable view uh in terms of what we're trying to do with incentives with inventory levels.

And uh the, the team's been uh really strong at executing that and the vehicles customers love them.

And that's, that's where it all starts.

If you don't build products that customers want, then the big business becomes much, much more challenging to run.

But, um, our design team, our engineering team has, uh, has created a portfolio of vehicles that customers just, uh, just adore.

Well, yeah, the customers, the US customers in particular, you know, we hear a lot about they're doing well, they're not doing well.

Prices are high.

What's sort of your 500 ft or 30,000 ft view of the, of the US customer for GM, how are they, how are they, what are they telling you guys?

Um Our, our customers have, have responded really well and they've maintained that strength.

Um You know, many times when you're looking at full size trucks, full size suvs, we're still seeing people adopt premiums levels uh and that, that business has been strong.

Um But you look at the resiliency of our portfolio all the way down to the Chevy tracks that you mentioned.

I mean, this is an incredible vehicle that starts at $20,000.

So, um that's, I think one of the keys to GM success is that portfolio that has something for everybody across all of the different price points that they might be looking for.

Moving on.

A I could soon make fast food even faster young brands, putting automation tools to work at KFC, Pizza Hut and Taco Bell locations across the country and it's making an impact in the company's most recent quarter.

Digital sales hit a record accounting for more than 50% of total sales for the first time in Yum's history with us.

Now to discuss all things.

Automation is Joe.

He is Young Brand's chief, Digital and Technology Officer, Joe.

It is good to see you and you know, Joe, it's a perfect time to have you on the show because we've got A I on the brain.

Joe, of course, Apple, today you had Tim Cook.

He's talking about Apple's new A I strategy and vision and A I features how Joe let's start there kind of high level.

How are you integrating Joe A I across your businesses?

Walk us through it.

Yeah, first Josh, good afternoon.

Thanks for having me, excited to be on.

So at ya, we're in greening technology into all parts of our business.

You know, we wanna make sure that we have easy experiences for our customers, our team members while driving profitable growth for Y and our franchisees.

You know, to your question, you know, for us as we think about um we're building and buying technologies that make things easy in terms of experiences, easy operations and easy insights and A I is the perfect technology to do that.

Um For us, one of our favorite examples of seeing A I at work is in our Pizza Hut business.

We have this platform called Dragon Tail.

It's a proprietary piece of technology that really helps our team members make pizza.

Uh You can think about from the preparing stage to the baking stage, to uh delivery to a customer.

He was trying to figure out how to make this job really easy for a team member so that customers get hot and fresh pizza all the time.

And so the there Joe, you're talking about how you're kind of implementing it for, for maybe managers and employees.

Are you also experimenting with it when it comes to the the consumer?

Yeah.

You know, for us, we believe in the power of digital to build a deeper relationships with their customers end to end.

And that customer journey is so important.

When you think about one example with Driver, let's take the example of Taco Bell.

Customers really want to make sure that they have timely acknowledgment at the drive through.

They wanna make sure that they're understood when they're ordering and there's friendliness.

So one technology we get really excited about is voice A I, we've piloted in five stores at Taco Bell and we, we've seen the results, we know that team members enjoy the technology.

Uh It feels like they're getting another team member added to just handle the drive through.

And we know that customers when they're asked about it, they see parity when it comes to the friendliness, the timeliness and being able to be understood by A I and sometimes Joe, you know, you, you find yourself kind of experimenting with new technology, you can get yourself and you know, you can feel some blowback.

I think that Wendy's and dynamic pricing.

I'm interested, Joe.

Joe, how you kind of manage that and maybe just get your thoughts on, on dynamic pricing in, in general Joe uh uh across yam and our brands, we don't do any dynamic pricing.

What we do do is have intelligent pricing where we do use technologies like A I to come up with the best prices we can offer uh to our customers.

Yam and our brands are known for the great value we bring in the delicious food.

And so when it comes to things like pricing, we're confident that as we partner with our franchisees, we can protect the unit economics while continuing to give them the value they uh they've come to expect them of.

And, and one question, Joe, you know, whenever we talk about integrating all this technology A I automation, you know, the the natural question is what is gonna mean Joe uh for the men and women working at, at these fast food chains, what will it mean, Joe, is this technology gonna displace those folks?

So firstly, at you, we're in the people, business team members are at the core of our success.

And for a big part of our responsibility is figuring out how to make sure that we can invest our time and energy and giving them easier experiences.

We talk about easy operations and making such our team members, our restaurant general managers can run their restaurants as simply as possible.

Uh I think that this can help them with order accuracy, which doesn't take away jobs, it can help them with the speed of service.

It could certainly help with friendliness.

One of our favorite examples is with kiosks.

Uh take a look at our KFC business where back in 2022 a quarter of our restaurants had self service kiosks.

Uh today, uh over 50% of our 20,000 KFC restaurants have self-service kiosks and why we love this.

It's win, win for our team members.

It frees them up from the front counter so they can focus on more things across the restaurants to give a better customer experience and for our customers, they can customize their hearts out on these self-service kiosks and get what they want and love Joe KFC Taco Bell.

I'm getting hungry just thinking about it.

Thank you for joining the show today.

Appreciate it, sir.

Thank you, Josh Ford reporting sales growth of over 11% in the month of May driven by a nearly 65% boost in hybrid sales from a year ago.

But with overall electric vehicle sales raising concerns about a possible slowdown.

What does this mean for the auto giants moving forward?

Yahoo Finance's pro Superman is standing by live in living color at Deutsche Bank's Global Auto Industry conference with Ford Vice chair, John Lawler for more.

Hey, Ross.

Hey, thanks, Brad.

Yeah, we are here at the Deutsche Bank Global Autos Conference and John Lawler.

New Ford Vice chair here.

Congratulations on the new role.

So I know you're gonna be presenting soon here.

Give us some updates on what you're gonna be talking about here.

What are some of the new projections potentially for Ford right now?

Going into 2024?

Well, we had a good start to the year with Q one and we'll be talking about where we're headed with the business.

You know, Ford Plus strategy is really about focusing in our customers and their needs.

And you start to see that really come through in the segmentation we did in that Ford Pro customers are distinct from Ford Blue customers, which are distinct from our electric vehicle customers and how we're progressing our strategies in each of those spaces, how we're providing them value choice and we're moving the business forward.

You know, you guys had May sales recently very strong month, both not just ice, traditional ice vehicle but also hybrid.

And let's talk about hybrids.

Did you guys envision that, you know, a year ago, we were talking to you guys at the delivering four plus uh uh conference.

EB is a big push.

Look at hybrid sales.

How do you explain that?

Yeah.

So when you think about hybrids with Ford, we've been in hybrids for over 20 years.

We're number three in the US in hybrids right now.

Now our hybrid sales grew 40%.

They're gonna grow 40% this year.

You can't just turn that on with a switch.

So all the narrative and hype had been around EVs, but we never walked away from hybrids.

We always had those in their cycle plan.

They were always funded.

And you're seeing that now is the demands increased.

We have the capacity to provide uh for consumers and you're seeing that take place.

So we're really pleased about our, our, our choice that we have for customers across gas hybrid, as well as electric vehicles.

I think the Maverick in particular has been the sort of a focal point here with the co uh uh uh compact sort of a pick up, but then also being provided with hybrid power, which I think was interesting when it came out pivoting to evs now.

So we're also seeing, you know, we've, we've seen the EV sort of demand story kind of slow down a bit, but ev sales into the Ford quite strong still.

What's your kind of take on that?

And how do you kind of bridge the gap to when those vehicles are profitable?

Right.

So the way we think about evs, it's not a matter of if it's when and how fast.

And so we did see a slowdown relative to what people expected, but I think there was a false signal coming out of COVID is how quick the demand was gonna grow.

And that was because the early adopters, they were really excited about having the choice of vehicles, electric vehicles, then we get to the early majority, they're not willing to put up with some of the other issues that you might have with an around range, et cetera, like those types of things.

So, choice is important and it's coming through where you have hybrids, where you have plug in hybrids, other technologies are coming along as well that I think will help that transition.

So I think you're going to see the growth continue.

It's going to be a little bit slower than what we've seen in the past.

Now.

Of course, for us getting to profitability is key with our segmentation.

You can see exactly how we're performing in the EV space.

And we have plans to improve that primarily with our second generation of vehicles where we'll see step function changes in cost and performance of the vehicles.

And that's where we think we'll really start to gain traction from a business standpoint for our electric vehicles.

So really profit may come in those second gen software defined type of evs.

Exactly.

So the second gen vehicles, not only will the software capability of those be so they'll be connected digital devices, but as well as the cost structure of those vehicles is going to improve dramatically through battery technologies efficiency of design, etcetera.

Because our first generation vehicles to get the market quick, we converted gas vehicles into electric vehicles.

These are ground up platforms designed specifically to be evs.

So you know, you mentioned.

Um pivot back to sort of the guidance here.

You're talking about how 2024 is looking, shaping up strong sales so far, you can still see that 10 to $12 billion adjusted ebita kind of guidance that that target there.

So when we came on a first quarter, we had guided uh that we would be at the high end of that range.

And so, you know, that's where our guidance sits right now.

Yeah.

Um I want to talk about your new role as vice chair.

You know, I know you CFO grinding those numbers, but now it's more about sort of the strategic part of the business and how you kind of leverage relations.

I know you used to work in Europe and Asia and you're gonna kind of go back to those roots, right?

What's the new rule gonna entail?

How do you kind of make ford more efficient from that point of view?

Right.

So it's, it's really around strategic initiatives.

The level of change in this industry is unprecedented right now.

You have the propulsion changes, you know, moving from gas to electrification and electric is going to take many forms as we're starting to see, develop you also then have the digital technologies in the platform.

So I'm going to be focusing on which technologies we're going to move into alliances.

And as you said, partnerships are going to be key because one of the issues with this industry has been capital efficiency in a way you work through more capital efficient structures is through partnerships and sharing some of the capital footprint.

So we're going to focus on that.

And then of course, you know, I've worked all over the world.

I spent six years in China.

I've worked in Europe, I've worked in Japan and I think I can add a lot of value working with governments uh and, and their leaders on the policies and how Ford can help and how Ford is going to interface in those markets around the world.

Just real quick on China is Ford still kind of focused on that.

Is it more of a AJ D type situation?

Well, we've always had joint ventures in China.

We have two joint ventures in China, one more commercial vehicles, one for passenger vehicles.

Um Yeah, the they're really important partners for us.

I love our strategy in China.

It's capital light.

Uh We're profitable in China.

We're exporting from China.

We're growing from that market base.

So we have a lot of possibilities in China and I'm excited about the future there, John, thank you so much.

I appreciate your time, China 2024.

All that stuff going on right now, bulls run is taking braces to record highs this year right now.

It's up just about 12% year to date.

Just outpacing the S and P five hundred's climb.

Now, the surge that we have seen is in part.

Thanks to emerging market, central banks, scooping up gold at record rates.

So where do we go from here?

We want to bring in our next guest for one that we Mark Bristow.

He is Barre Gold, CEO.

Mark.

I it's great to see you here.

So bear Gold.

If our viewers are not familiar with gold and copper producer, I'm curious just your reaction to this run up that we've seen in gold prices and in copper prices as well, where you think that trade is headed from here?

Uh Very interesting run up Yana because uh it's been um the gold price that's moved, the, the equities have lagged.

And also we've seen uh sell down on the ETF so interesting and I think it's to your point, people searching for some protection in, in this very mixed up world and, and your point about the central banks buying is important.

And of course, we know that China has been buying although China did uh share with us that they hadn't bought the last month.

So that's good for Gold Mark Bryan here.

Good to, good to see you again.

It's, it's been a while.

Look, I was just trying to go to Costco to pick up a steak.

I got trampled somebody looking for a Costco gold bar.

I mean, these are just amazing times but given demand as something as simple as a gold bar from Costco.

What are you doing in terms of production?

How is this run up in gold prices to be beyond $23 2300 dollars an ounce.

How has this changed your operations this year?

And how does it change your outlook for the back half of this year?

So, so Ryan, you know, mining is a long term game.

It's capital intensive.

You got to allocate capital over the long term.

We did this big deal with uh um Rand Gold back in 2019, we've been consolidating, it's all about delivery.

Um And we've expanding our copper uh production and overall looking to grow our production by 30% by the end of the decade.

So, and bring our cost down and that's the game in mining.

And so higher gold prices are always helpful.

They don't always stay up there, they go down and they go up.

Um But I think what we're seeing is uh people worried about the global economy and to your, some of your previous um speakers, we've seen uh the economies driven by a select few companies and, and people are worried about that and, and as you know, Ryan, the, the world is not as stable as it was just a decade ago.

Uh Now you mentioned Mark, it is a mixed up world and you also mentioned copper.

Now, copper is often seen as a leading indicator for the global economy.

What are you seeing in terms of copper demand in the US?

And can you contrast that with what you're seeing in China.

I think people are realizing that the copper market is going to be squeezed the supply side.

And so there's AAA response to that and we've seen a couple of big producers um close down in the last year and that's also worried people.

And I think more so now copper is all about industrialization in a cleaner fashion and that's what's driving copper.

I think it's gonna have a bumpy ride for the next 18 months to 2.5 years.

And, but definitely uh there's a big squeeze on the supply side of copper and on the on the demand side, uh we have to keep developing and the commitment to transition to a cleaner uh global energy industry is very real and that drives copper mark.

So then as a result, do you think there'll be even more consolidation within the sector as a result?

You know, it's, it's a question everyone wants because you people work an instant time.

But uh consolidation doesn't improve the production profile.

This uh the industry needs a lot more, many more copper mines and uh and that requires the miners to get out there and find new operations and that's what's driving Barrack's growth.

Uh Today is the fact that we're bringing in new production by 2028 mark.

We're asking all CEO S this and I'll, I'll put this one to you.

Has the Biden administration been friendly to your operations or or have they added more, I guess, regulatory constraint uh to your business and your industry?

No, I think that they've made it a lot more challenging and I, you know, the United States is a big supplier, I mean, a big consumer of all metals.

And in fact, Barack is one of the largest miners in the United States and it's difficult today.

You know, we have to work with more than 20 different departments within the federal government just to get our job done every day mark.

When it comes to what exactly this means for your business.

You talk about how big of a catalyst this is going to be for your industry just in terms of the timeline of being able to scale your business, how long that takes and what exactly that ultimately looks like when we talk about the supply versus demand picture, what do you see as some of those longer term implications?

And then you have the politics side of it.

That sounds like it's complicating that at least to some extent.

Yes, I think that's true.

And that's the challenge for mine is we've be, we've got to embrace our, our real stakeholders and they are our host countries and the communities around our mines and of course the shareholders as well.

And so, um and it takes somewhere between 10 and 20 years to discover and develop a large copper mine and nn not much uh uh less time for a gold mine and that goes for all mines around the world.

And so miners for, for them to really benefit from this increasing demand.

They're gonna have, we are all gonna have to learn to work in more complicated jurisdictions.

And I think that's important overall because sometimes within the United States, we, we sort of really inward looking and uh and for this planet to be a better planet for all uh for future generations, we need to uplift everyone across the globe and not just focus on our sort of provincial uh environment.

I'm Josh Lipton and I am here now with Punier Ceo Alex Carp for this exclusive Yahoo finance interview here at A IP con.

This is the company's customer conference.

Alex, thanks for taking the time to chat.

Very happy to be here.

So today there's gonna be more than 250 of your customers and they're gonna be here, Alex talking about A IP.

This is your flagship A I platform.

Let's start there, Alex for, for many of you who are as familiar, what is a IP, how does it work and how are businesses leveraging it?

Right?

Iii I think what everybody watching this is familiar with is you have a massive he cycle around large language models.

And then when you try to use them in your enterprise, you find out that it's more like self flagellation and it's expensive with no output and what we learned in the context of war fighting primarily but also across the uh 20 years of building uh software infrastructure were.

How do you manage an emergent natural resource called large language model uh models in a way where you actually get value, meaning you can transform your enterprise, you can change the margins, you can turn tech, non technical people into technical people on the battlefield.

You can do things that would have otherwise cost billions of dollars for millions of dollars.

Meaning being very precise in how you allocate troops, being precise in how you target people.

Um There's a fundamental fallacy around large language models.

People could conflate uh actual data of an enterprise which is structured and can be taken apart and understood with a large language model, which is much more like an emergent property.

Something that is can be modeled used, but you need precision and all the value in the market is going to go to chips and what we call ontology, we have this ontology and the ontology allow you to take a large language model and use it, refine it and you then impose it on your enterprise in the logic of your enterprise, in the security model of your enterprise.

And what does that mean for the 7070 people are here presenting talking about why they're using it and how they're using.

You gotta remember we started uh selling this product just over a year ago.

Uh We started with the claim that we knew a lot about the precursors of large language models and large language models.

And the general approach of just buying models is going to be essentially self pleasuring for an enterprise at the cost of the enterprise and no one believed us.

And now you see 70 people saying, hey, we're using this for construction, we're using it for hospitals.

Uh the people who are not speaking, but we're using it on the battlefield.

We're using it to compress margins.

We're using it to build enterprises that we're only able to build in Asia and America.

We're making engineers uh better engineers.

We're making people are not engineers into engineers using or anology and a large language model.

And this works very, very quickly and it is substantially changing the health and vitality of every business here as opposed to the alternative, which is that you buy some large language model, you, you party with it basically.

And the next day you have a hangover and, and then, and so like and again, for, for people just looking at this, what does it mean for Palent here?

It means we are sitting on the only thing that actually creates uh a quantifiable transformational value in an enterprise.

Yes, it is not understood well, because everybody understands the problem incorrectly.

Yes, it is going to transform America and our clients are leaving the way and, and by the way, it's like to actually show things that are not understood.

You have to actually show them the whole purpose of this conference is I can tell you how an ontology works.

It's actually quite simple.

You have the logic of the business, you including the security logic of the business and you have something that it approximates new knowledge in a new form called a large language model.

And it allows you to take the value of the new form, the raw resource of a large language model, largely powered by chips and put it into a precise organization in the logic of the business.

I can tell you that where I can show you 70 businesses say my business is stronger, healthier and much better than any other business in my sector.

And so what is the bottom line for investors listing Alex?

How would you characterize what is commercial demand like right now for a IP, the way I would explain it to my most important investors, which are individual investors.

There's two parts of the market that are creating value.

People will pay for chips and ontology and you understand the chip side now and now you're going to understand and what does that mean for your business?

It means you can actually use this raw resource and process it into something that actually works.

And if you want to see exactly how what the people presenting, you're going to see people in construction, using it to build buildings quicker, cheaper, more accurately, you're going to see people in the hospital industry saying, how could I possibly ever distribute my patients ethically fairly and commercially relevantly.

How could I distribute resources across?

How can I manage my, my company as not abstract units but as a portfolio, these are these things are happening within days.

What I'm interested in the ALS is because you, you can talk a lot of CEO S will say and they'll sit on your finds, they're interested in A I, but actually they're not willing to pull the trigger yet because they have these questions about privacy security ves.

But, but you're saying we're crushing it.

We're closing A I, what I would tell any of them is how are you doing it?

Well, there's a technical answer which I gave you the precursor of.

But again, do you wanna know how we're doing it or do you wanna enjoy it being done?

Both?

Great.

Well, first, you, but no, actually, first you wanna see it works like the, the, the, the central issue I think, I mean, we have hundreds and hundreds of CEO S and by the way, the thing about the 70 people here presenting is, you know, they're presenting to other people.

I'm not paying them to present.

The reason they're presenting is they're like, wow, I didn't really believe this could work and now it's working really well.

So the most important thing, by the way, for a normal user, someone who's gonna pay is does it work?

Then the second question is how does it work?

Does it scale?

What is the commercial model you really have to establish it works?

I would stand by the thing that it in this case is people think of large language models as the value in of itself.

What they're gonna find is the large language model is much more like a chemistry experiment.

The outgrowth of which is a something that is useful when refined and the refinement of that for your enterprise happens in what we call our ontology, which is where we impose the logic of your business, the large language model in the security and intellectual logic of your business.

And this is transformative and what it means for investors and others is there is value in this market.

People, you can identify where the value is very easily.

Are people paying for it?

Will they pay for it?

And what will there's a prey to optimality to a lot of this stuff and that prey to optimality happens when people say, oh I am actually getting value and that's why people are here.

Let me ask you, you suggest I want to broaden the conversation because you kind of suggested this.

Just give your take on the moment we're in because there's some Alex you've heard who say, listen, this is a historic moment.

Internet Mobile.

And now A I NVIDIA Jensen Wong said the next industrial revolution has begun.

Do you agree with that.

Do you agree with Jensen?

Um I think you're gonna have very divergent for some people, this is a generation and for others who think they're doing very similar things, it's gonna fail.

Who defines the winners?

Who will be the winners?

Well, come talk to our 70 customers, they think they're winning.

And it's like, you know, you look, it's a lot of this goes back to basic ideas of how you build things.

Why you gotta talk to people who are getting value and ask them, how are you getting value?

Why are you getting value?

Are you paying more or less for that value than you think you should?

And that's exactly what you're gonna see today.

You're gonna see people saying I'm getting a lot of value.

It went much quicker than I thought.

I'm, I'm outstripping what I thought I could do.

I'm better, much better than the people.

It happened efficiently and I'm probably, I don't think they'll say this, but I'm paying less than I think I should.

And that's why I'm very happy about it.

When we talk about a I, we got to talk geopolitics.

I'm very curious to get your answer to this question.

Who is in pole position?

Us or China?

Well, we have a very different problem in the US than any other country in the world.

We are in pole position, but we obviously have to move much, much quicker.

Um You see on the battlefield.

And again, without mentioning where these things are used exactly what I'm talking about.

Large language model.

Plus ontology is can be wielded as a very deadly weapon and create enormous efficiencies for especially small armies against large armies.

We have to be myopically focused in this culture of, we are in a pre war situation with our adversaries and we can no longer afford the theologies about what works on the battlefield.

We have to go very deep and look at what's happening on battlefields and do a diagnostic of it.

It's much less critical, but it's the same thing that businesses have to do.

What is working, what is not, not a theological thing of what would I like to believe is working and what works on the battlefield where our central advantage is as the United States of America, the leader of the West and the most important country in the world is technology, venture backed companies and especially software and software driven weapon systems.

And how, how do you get the software to control the hardware so that we can, we can get out of the business of trying to compete with people who are better at hardware and get into the business of producing something they do not produce as well comes down to execution.

The problem we have in the West actually is again, is prey to optimality.

The, the the products that actually scare our enemies are, are just not products that employ mill millions of people.

They, but they still are deadly.

They are software driven hardware systems.

Moving to software driven autonomous hardware systems.

One of the biggest lessons of war and one of the reasons this is so crazy, valuable is the Russians and all of our adversaries have now learned the value of electronic warfare.

By the way.

Again, these things are exactly isomorphic to commercial.

You have enormous new headwinds, the commercial, your competition has developed something that renders your product strategy irrelevant.

You have to rebuild it with a new playbook.

This is exactly what happens on the battlefield.

You cannot use a normal missile or normal tank on the battlefield anymore because the electric warfare, electronic warfare allows you to suppress the GPS signal.

And that means these things have to be controlled uh with software to go around map where the electronic, where the suppression happens.

And then in the final mile at some point, autonomously, completely different ways of doing A I completely different news ways of doing it, all of which are an advantage to America.

If we implement just like in American industry, we have something called a chip industry that is the world's leading in this area.

And or at least the, the, the final product.

And we have something called software ontology, which actually makes all of this crazy valuable.

Do you implement it?

Do you go talk to people are doing it or do you read the powerpoint written by someone who has no skin in the game.

And, and, and the answer to that determines whether America in the West, which I view as a superior way of living because it's fairer, better meritocratic leads to free speech allows for wealth creation.

Does that culture actually dominate and win?

And we by the way, have to get out of the apologizing for our culture thing.

It's like we are a better way of living and we have to be willing to fight for it on the economic front with growth.

That's why this conference is so important.

We need growth.

What makes America different than our adversaries right now is not just Western system, we have growth.

Where is that growth coming from technology?

What is that technology?

It's compute plus ontology basically.

And that can change the very structure of our culture from manufacturing to weapon systems to how we organize things to our health care distribution can have a completely different way and better way of living.

Let me ask you this, you, you're talking about A I and we're talking about the benefits, the advantage of the use cases.

I am also interested.

I was to get your take on when you think about the risks of this technology.

Let me put one forward.

We have an election coming.

How concerned are you as an American executive but also just an American citizen about the very adversaries we're talking about here deploying a I for nefarious purposes, rampant to sow confusion and division and there's only one way to fight uh uh uh uh a deadly adversary.

What is that with a deadly set of weapons?

So like if you, you know, if you want to fight our adversaries and by the way, my version of fighting is you're so strong, you're so willing to fight, they don't fight you.

So it was like, I recently have gotten in trouble for saying I'm a peace activist.

I am a peace activist.

I'm a peace activist because I want enormous growth in America and I want real deadly weapon system.

You want peace in the world.

You have a lot of growth in America and you have really deadly weapon systems and you tell your adversaries, you know what I just might use them.

I'm not even going to explain why I'll use them.

You start acting up, I will use them.

You don't act up i through strength, peace through strength and a little bit of unpredictability.

You know, we are in a world where our adversaries are founders.

They have the founder playbook, which is I'm gonna, I'm gonna be aggressive and win where I can.

We have a playbook written probably at Harvard and Yale and Stanford Institutions which are now symptomatic with not producing, producing structures where they don't see discrimination when in front of you producing structures that and ideologies that are literally built for the decline of our country.

We need to get out of the business of we're declining.

We're apologizing, we're not going to use force we needed.

And the peace activists are actually us and the pe people who claim to be, he's activists are actually sowing destruction, disorder discrimination.

It's an exact inversion of what they claim to be.

And we, and we, but those of us on our side who are pro growth, pro America, pro our economy transfers and pro having the best systems in the world.

We need to organize, build things and then we also need to have exact understanding of what works, what doesn't and implement it very quickly.

I mentioned the election.

I want to stick with that real quickly.

Does it matter to Palent here who wins Biden or Trump?

Does that impact any potential business you're going to have with the US government?

Look, we've been in, we've dealt, we've been in business for 20 years.

I have not seen an impact on our business, depending who's president.

I am interested.

Listen, we talk about these conflicts around the world right now.

Running hot.

Russia, Ukraine, Israel Hamas has that changed how the dod dod thinks about spending out and what they want to spend on.

Uh The dod is changing rapidly how it's been so.

Well, there's much more of a focus you saw that we won this big maven contract.

Um These things are a natural growth, uh outgrowth of we need to fight better.

We need to fight quicker, we need to fight on the terms where America has superiority.

Of course, we can move quicker.

Of course, the dod wants to move quicker.

Our society wants to move quicker.

I think unfortunately, we are going to end up moving even quicker because our adversaries are likely to continue their nefarious acts which Russia, China, Iran, I mean, all three are working together.

You know, one of the things I, I just, I just II I travel around the world and basically wherever you go, people are like, well, I want you to, I want, I want you to be strong on this one and appease the other people who believe in appeasement.

Whether it's Iran, China, Russia, pick your favorite, the one you're sympathetic with.

They don't understand.

We have adversaries there working together despite what problems you may have.

Some people don't like the war in Ukraine.

Some people don't like Israel.

Some people want an appeasement strategy with China.

It doesn't work, they are working together against us and we have to work together against them.

Last question you mentioned Maven, I wanted to get the dod recently disclosed and this is a five year $480 million contract with Pal.

Just walk.

What is that contract?

What is it, what does it mean for your company?

I never know what we're allowed to say about these very sensitive contracts, but I, I'll tell you what it means for the nation, this country is focused on using A I to have a structural advantage in how we deploy and understand the battlefield, deploy our assets and understand the battlefield.

And pal here plays a crucial role in that, in that arena.

We're gonna continue to play a crucial role in that arena.

And by the way, we're making it possible through our software to allow other software and hardware companies to work off of our platform.

So this is not just a win for Pollinger though it is and I'm very proud of it.

This is a win quite frankly for the tech ecosystem that powers this nation.

How big is that ecosystem now, which has grown a lot since we first started talking, the the the venture capital world has completely flipped.

When we talked the last time by and large, the tech company co community was adversarial to palant here on this issue of supporting our nation.

Now, I think the tech community is the most, most supportive part of our economy in, in, in protecting our nation.

And why did that?

Why did that flip by the way?

Ok. You know, they stopped hating the player or the game, Alex Carp.

I know you are very busy today.

We appreciate your time.

Thank you.

Take care.

Bye.