The Exchanges

Q What percent of market cap does a deal become a BFD, a big fucking deal, a core strategic, this needs to work?

A Um, look, every deal needs to work. We're not buying companies we give money to spare, or my shareholders think we should, you know, we should rely on waste, and not, I think the hit rate requirement in us is more than a VC. I think in the last eight years, we've bought north of 40 companies, and I want to say 75% have worked, 25% haven't. Our largest deal Was a twenty-eight billion deal, which probably is currently valued at 50, no, it's a fifty billion dollars. That's, that one's got to work. That one's got a career-defining move. If you take a company at twenty-eight billion dollars, when your market cap is 200, and you spend 14% of your market cap, or 16% of market cap, and buy something, it better work. Um, now when you make that work, then you can, if the market gives you credit for making deals work. I said that in my earnings call, and they got all freaked out, and then I'm just saying, you have to make the big ones work. If you don't make the big ones work, then you lose the license to, to run your business.

AI assessment note: “spend 14% of your market cap, or 16% of market cap... it better work”

Q My job is to create a discussion. Um, what is true and what is right? Do you have to have FDs to sell into enterprise?

A So I think what, what is true is we've only been chasing the enterprise dream for AI for the last, what, 12 months? At best. If you think about everything that happens on a weekly basis, we see new things come, which we don't quite fully understand and grasp, right? We were all busy trying to get our arms around LLMs and how they're going to be great for chatbots to talk to our customers as an enterprise. And suddenly agents showed up saying, oh my God, I got to figure out agents. I'm going to start working internally. Agents are going to do a lot of stuff. I'm pretty sure you could still have a agent fest and have everybody tell you what an agent is. You'll still walk out and say, I'm not quite sure. That his agent or her agent is the same as what the last guy said. So because AI is moving so fast, I don't think the products are fully there yet. Like the enterprise products at the application layer don't exist in their entirety because we haven't been tested against the enterprise ask. So FTE is a short form for saying my product's not fully there because it's evolving as the technology evolves. I'm going to send some people across who are going to sit in your office and build my product. While I adapt it to your needs. That's what it is, right? That's what we saw from Palantir. That's what we're seeing from all these companies. So what you're seeing is I'm going to send my pr…

AI assessment note: “FTE is a short form for saying my product's not fully there”

Q My job is to create a discussion. Um, what is true and what is right? Do you have to have FDs to sell into enterprise?

A So I think what, what is true is we've only been chasing the enterprise dream for AI for the last, what, 12 months? At best. If you think about everything that happens on a weekly basis, we see new things come, which we don't quite fully understand and grasp, right? We were all busy trying to get our arms around LLMs and how they're going to be great for chatbots to talk to our customers as an enterprise. And suddenly agents showed up saying, oh my God, I got to figure out agents. I'm going to start working internally. Agents are going to do a lot of stuff. I'm pretty sure you could still have a agent fest and have everybody tell you what an agent is. You'll still walk out and say, I'm not quite sure. That his agent or her agent is the same as what the last guy said. So because AI is moving so fast, I don't think the products are fully there yet. Like the enterprise products at the application layer don't exist in their entirety because we haven't been tested against the enterprise ask. So FTE is a short form for saying my product's not fully there because it's evolving as the technology evolves. I'm going to send some people across who are going to sit in your office and build my product. While I adapt it to your needs. That's what it is, right? That's what we saw from Palantir. That's what we're seeing from all these companies. So what you're seeing is I'm going to send my pr…

AI assessment note: “FTE is a short form for saying my product's not fully there”

Q How do you choose who you ping and who you help? Matan obviously being one of them.

A Well, My current pattern, as I told you, is this market is moving so fast that based on what you read, that open clock comes out, suddenly there's this thing that people are going to have agents. There was a moment if you heard, if you saw, there was agentic browsers, remember? We don't hear about them much, but there was a moment when everybody was going to have an agentic browser. Your browser was going to be your computer, and that's going to be sort of do all the agentic tasks. When I hear about these things, I'm trying to assess Which one's going to work? If it works, how does it impact my product portfolio? What do I need to build in anticipation of this technology becoming mainstream? And that window from the idea to execution is shortening in the AI world, as you can see, right? Like the way these companies are coming out and getting formed in 12 months and 24 months and getting a hundred million ARR is probably the fastest ever, which means if that's what my enterprise customers are using, I have to figure out how to secure that stuff. Well, my team doesn't fully understand all this stuff, so I'm busy listening to podcasts, listening to people, watching people tweet, watching people on LinkedIn, saying this is an interesting technology helping the founder. So my first step is to ping somebody who's doing something interesting, which I don't fully comprehend. They seem …

AI assessment note: “ping somebody who's doing something interesting, which I don't fully comprehend”

Q Did you know that you were going to be successful? Some entrepreneurs have an innate feeling that they would be. Did you have that?

A You know, if you talk to my wife, she'll tell you that the one thing I don't seem to lack is self-confidence. So I'm not sure when she's being funny about it or when she's being sort of supportive about it. But you know, I put my heart and soul into whatever I do. And I tell people that if there is an element of doubt in your head, That you're not going to get something done. You're just increasing the probability of it not getting done. So you have to attack or address everything. There's some degree of conviction and, uh, it kind of goes with life, right? You know, I take on everything with a degree of conviction. Otherwise, you know, why would I take a job like Palo Alto six years ago, right? You know, why would I set myself in a situation where I did not have any conviction that I was going to do well? Now you have conviction, you walk in and you give it your heart and soul every day.

AI assessment note: “the one thing I don't seem to lack is self-confidence”

Q My next one to you is, Any moment, any board meeting, what was the biggest, oh, shit, in a board meeting?

A I got a very interesting insight from one of my board members. Um, you know, we're prolific buyers of companies because I'm constantly paranoid that we have built it. Somebody else is going to build it. So we better go acquire it and find the team to go get it done. And, uh, there's one particular acquisition. It took a lot of effort to get the founders to the table, get them to agree, grind through diligence, figure out whether it's going to work or not. It was a substantive amount of money, relatively speaking, hundreds of millions of dollars, close to almost a billion dollars, and I called one of my board members, and I said, hey, what do you think about this? He said, you're calling me. You don't call me all the time about all the acquisitions you do, so this must, this one must be Different. I said, no, it's not different. I'm just thinking hard about it. It's taken a lot of effort. He says, go for a long work. Ignore all the effort you put in. He said, because sometimes what happens is you confuse effort with wanting to get the outcome. Because I spent a lot of time and effort trying to get it. Then you feel like when you get it, you better take it because you put all the effort in. And he says, you haven't spent a dollar yet. You just put in three months of effort. But remember, once you put the dollar, Then it becomes yours. It's your job to make it successful. So you s…

AI assessment note: “I got a very interesting insight from one of my board members.”

Q In terms of wanting more technical resources, tokens, I would put in the more technical resources camp. How do you think about effective token allocation today? You're seeing very different camps from your Metas and Ubers and Microsofts who put in budgets to your free for all be creative. How do you approach it?

A Look, I know this whole world of token maxing has kind of gone topsy turvy with the whole conversation around how many tokens people are using. The challenge right now is, 90% of the enterprise employees are not AI savvy. They're not. They have to learn. I can't send them to university. There's no course you can take at any school anywhere. They have to be able to learn of their own. I think we're back to a Darwinian moment where everybody has to figure out who's really good. Now you've seen people like Brian Armstrong and Jack Dorsey go out and say, I'm going to decimate my organization. I'm going to start building from scratch. And they've gone to some version of 30, 40% less people because they figured out there is no redemption. I can't train these people. I'm going to just find the people who are going to come in and help me do this stuff. That's one model. The other model is sort of gradual. We've been hiring people only through hackathons now, right? And we see natural attrition of two percent, give or take a month, and we just replace them with people who actually are AI savvy people who are from hackathons. Give me 12 months, I'll have, I'll have sort of transformed 20, 25% of my team. Give me three years, I'll have, hopefully, enough AI-savvy people working at Palo Alto. So there are two different ways to get there. I think part of what you're seeing in the token maxi…

AI assessment note: “if you get into this whack-a-mole moment saying... stop people spending too many tokens, it actually will hurt”

Q She's amazing. What advice do you have for me on lessons on how to be a great dad, but also not lose an inch on work? I'm not willing to sacrifice much on the work side.

A This is the hardest problem in the world. I think there's, what, 20, thirty billion people who have been born since the beginning of civilization, yet there is no AI that can train us on what we need to specifically do to create the outcome we'd like to create. It's way too many variables, right? All kinds of people in the world, and I'm sure their parents, some of the parents are amazing, some of the parents are not as amazing. So I think part of it is you can do your best from your perspective, and I think kids absorb a lot By watching you, your work ethic, they watch your values to see how you interact with them, because my daughter probably has a better sense of who I am as a person than anything I could tell her, because she spends time around me. She sees me interacting in every sort of micro situation, what makes me impatient, what makes me patient, what makes me do certain things. At the end of the day, your child believes that he had the best intention for them. I think that goes a long way.

AI assessment note: “kids absorb a lot By watching you, your work ethic, they watch your values”

Q In terms of wanting more technical resources, tokens, I would put in the more technical resources camp. How do you think about effective token allocation today? You're seeing very different camps from your Metas and Ubers and Microsofts who put in budgets to your free for all be creative. How do you approach it?

A Look, I know this whole world of token maxing has kind of gone topsy turvy with the whole conversation around how many tokens people are using. The challenge right now is, 90% of the enterprise employees are not AI savvy. They're not. They have to learn. I can't send them to university. There's no course you can take at any school anywhere. They have to be able to learn of their own. I think we're back to a Darwinian moment where everybody has to figure out who's really good. Now you've seen people like Brian Armstrong and Jack Dorsey go out and say, I'm going to decimate my organization. I'm going to start building from scratch. And they've gone to some version of 30, 40% less people because they figured out there is no redemption. I can't train these people. I'm going to just find the people who are going to come in and help me do this stuff. That's one model. The other model is sort of gradual. We've been hiring people only through hackathons now, right? And we see natural attrition of two percent, give or take a month, and we just replace them with people who actually are AI savvy people who are from hackathons. Give me 12 months, I'll have, I'll have sort of transformed 20, 25% of my team. Give me three years, I'll have, hopefully, enough AI-savvy people working at Palo Alto. So there are two different ways to get there. I think part of what you're seeing in the token maxi…

AI assessment note: “if you get into this whack-a-mole moment... it actually will hurt the best AI-savvy”

Q A lot of SaaS providers are feeling obsolete today. Their share price is telling them they're obsolete. Do you think that the majority of SaaS vendors have been oversold, or do you think that is an accurate reflection of where markets are moving?

A I think what the market is telling us is that the system of work, or the systems of record, will see a reimagination of workflows, as you and I talked. So going from Software that doesn't have an opinion to software that has an opinion and expresses an opinion and also does a lot of work for the human, so the human doesn't have to do repetitive tasks. I don't think those AI applications have been created. I think the SAS versions exist. We all use them. I think at some point in time, we'll see AI applications that do a lot of the task and work for a guess reimagined. I do think a lot of SAS has built a lot of analytical capabilities to sit on top of Of the systems of work and system record. I think it's a lot easier to abstract that data into some large data lake and have LLMs analyze that data for you and give you the answers. I think the analytic world is getting reshaped already where you can see people like Snowflake or Glean or Databricks. All these people boast enterprise data lakes where you can bring the data and run LLMs against it and get you much more synthesized analytics and outcomes than you ever had before. I think the third question which we started off with is, like, people are not sure how many people are going to work in these enterprises in the future. So if you take the, the confusion of how many seats are going to survive in the SaaS world, take the confus…

AI assessment note: “I don't know if the right valuation is.”

Q What do you think you did so right that other people hadn't done before that enabled your success?

A I don't think it's something we did right. I think, look, we looked at The industry, and yes, I may not have known the cybersecurity industry, but having, you know, had the privilege of investing next to Massa or having, you know, worked at Google for 10 years, one has become a student of business, and you sit there and look and analyze business and say, you know, why is this, why is this industry so unique? Why is it that the largest player has one percent market share? That is, that is not the industry structure of any other industry. You're talking about winner takes all, like, you know, search, winner take all. For the most part, give or take, and there might be one of the people around with a few percentage points of share, but Google took all. You take it YouTube, right? You take a look at Netflix or something like that. You are, you do see in the consumer space, there are a lot of industry sub-sectors or winner takes all. Enterprise also, you'll, you'll see in sub-sectors, there are dominant market shares, which are in the double digits and sometimes the 20, 30, 40% range. You just then say, what is wrong with this industry structure? Why is it one percent? And you look at the, So the, the waves of success in this industry, you know, the, the stars of 10 years ago are no longer the stars of today. So that's kind of very unique in cybersecurity. You sit there and say, you…

AI assessment note: “I don't think it's something we did right. I think, look, we looked at”

Q What do you think you did so right that other people hadn't done before that enabled your success?

A I don't think it's something we did right. I think, look, we looked at The industry, and yes, I may not have known the cybersecurity industry, but having, you know, had the privilege of investing next to Massa or having, you know, worked at Google for 10 years, one has become a student of business, and you sit there and look and analyze business and say, you know, why is this, why is this industry so unique? Why is it that the largest player has one percent market share? That is, that is not the industry structure of any other industry. You're talking about winner takes all, like, you know, search, winner take all. For the most part, give or take, and there might be one of the people around with a few percentage points of share, but Google took all. You take it YouTube, right? You take a look at Netflix or something like that. You are, you do see in the consumer space, there are a lot of industry sub-sectors or winner takes all. Enterprise also, you'll, you'll see in sub-sectors, there are dominant market shares, which are in the double digits and sometimes the 20, 30, 40% range. You just then say, what is wrong with this industry structure? Why is it one percent? And you look at the, So the, the waves of success in this industry, you know, the, the stars of 10 years ago are no longer the stars of today. So that's kind of very unique in cybersecurity. You sit there and say, you…

AI assessment note: “I don't think it's something we did right. I think, look, we looked at The industry”

Q underestimated in a decade long period? I, you know, I, I, yeah, I look at a lot of enterprises today, especially in Europe. Like I think 48% don't know what slack is. 92 don't know what notion is, but like the idea that we are all going to adopt, like the biggest companies will adopt AI overnight, I think is, is naive bluntly. Do you agree or do you disagree?

A Adopting the internet is one thing. Being able to accelerate your business and use that as a competitive advantage is another thing. Every brick and mortar business by now has adopted the internet. But none of them used it to become Amazon. So the question is, is adopting enough? Or can I use it to, you know, change the trajectory of my business? Those are two different questions. I'm sure every company will adopt it at their pace. Can somebody adopt it well enough that it changes the trajectory of their business? Say, oh my God, look at these guys. They levered it, leveraged it and became better, bigger, faster. Everybody's adopted the internet. Everybody's enabled e-commerce. They still have their brick and mortar stores. A bunch of entrepreneurs took that trend and said, you know what? I'm going to change the economics of this business in such a way. I don't need physical stores and I'm going to be able to create shipping warehouses and go ship this to wherever you want. And I can have the everything store that only one company did. So they use the technology technological shift to build an entire new business, which is worth three trillion dollars compared to everybody else who was able to marginally improve their business. That's the question.

AI assessment note: “I'm sure every company will adopt it at their pace.”

Q How do you choose who you ping and who you help? Matan obviously being one of them.

A Well, My current pattern, as I told you, is this market is moving so fast that based on what you read, that open clock comes out, suddenly there's this thing that people are going to have agents. There was a moment if you heard, if you saw, there was agentic browsers, remember? We don't hear about them much, but there was a moment when everybody was going to have an agentic browser. Your browser was going to be your computer, and that's going to be sort of do all the agentic tasks. When I hear about these things, I'm trying to assess Which one's going to work? If it works, how does it impact my product portfolio? What do I need to build in anticipation of this technology becoming mainstream? And that window from the idea to execution is shortening in the AI world, as you can see, right? Like the way these companies are coming out and getting formed in 12 months and 24 months and getting a hundred million ARR is probably the fastest ever, which means if that's what my enterprise customers are using, I have to figure out how to secure that stuff. Well, my team doesn't fully understand all this stuff, so I'm busy listening to podcasts, listening to people, watching people tweet, watching people on LinkedIn, saying this is an interesting technology helping the founder. So my first step is to ping somebody who's doing something interesting, which I don't fully comprehend. They seem …

AI assessment note: “ping somebody who's doing something interesting, which I don't fully comprehend”

Q Do you think we are willing to give up that human control? You see cases like Matters today where I think 1700 people have signed a petition that they are unwilling to let it track their mouse and keystroke behavior. We are seeing resistance to Giving the data.

A Autogamous points. I think two different points. I think mass collection of data to inform AI is a little dangerous because people see the outcome, what that's going to happen, right? And I've heard of companies where people are, you know, using cameras to attract people, folding laundry, and ironing clothes because they want to be able to train physically in the future to do those things. So that part aside, I think on the enterprise side, We can actually run a business much more effectively and efficiently if we decide where we are willing to relinquish control to AI. Perfect example, marketing, right? Anything that is required to train a marketing model is already out in public domain. By definition, marketing is public domain, right? If it didn't market it, it's not a public domain. So I have the best training data in marketing. I don't need to train an AI model with more marketing content. I may need to train it for tone of voice and what my brand is, And I'm pretty sure an AI model, if I throw my marketing collateral into it, will tell me this is not consistent with your brand. If I look at all the things you've been talking about the last 10 years, I think some people have done that. They've actually analyzed earnings scripts of companies and said, the last 20 years, what has company X done? And when does the CEO start getting away from a topic because perhaps it's not g…

AI assessment note: “if we decide where we are willing to relinquish control to AI.”

Q When are you able to call a bad decision, a bad decision? When, when should one read the tea leaves and say enough is enough?

A As I said, a part of our jobs as CEOs is to look around corners, constantly look at data and reassess what's going to happen. I tell the story. I was on a flight to India. I was going to speak at my alma mater about, uh, uh, 35,000 people that were graduating and I landed in Dubai. And I saw all this flutter about ChatGPT, and oh my god, OpenAI has launched this amazing product, which is an AI product, and there was all kinds of rhetoric around it, but I had nothing to do for a few hours, so I tried to figure out how to get access to it, which I was able to, surprisingly, and I started playing with it. And the next three hours, and the next day, I rewrote my entire graduation speech, and I made it all about how AI is going to be a pivotal moment for every one of us. Now, the reason I tell you the story is that I use the flight back to think about how does that impact Palo Alto? And we launched a series of things internally, which were drastically sort of drastic measures, which required us to rethink everything. And you played the movie forward. Is AI going to make sure that everything's going to be different in 10 years or not? For sure. 20? For sure. The question is, what do I need to be doing today that I'm the next Amazon and not the next Costco, which is also a great company, but I'm the next Amazon or I'm the next company that is going to be really successful because we w…

AI assessment note: “a part of our jobs as CEOs is to look around corners, constantly look at data”

Q Um, final one. What are you most excited for? When you look forward, next five to 10 years, what are you most excited for? Is it becoming a grandparent? Maybe. I might have just seen my mother become a grandmother. It's amazing. She's amazing. Is it the health benefits? You know, I'm so excited that AI might be able to solve multiple cirrhosis, which my mother has. That'd be incredible.

A You never know what tomorrow's going to bring you. So it's, the only way I've been able to do everything I do is not to get too hung up on what's going to happen to me in a year from now or five years from now, because it's too far. I think you wake up in the morning, you have an amazing day, and you're, everything's working around you, your kids are happy, your family's happy, you enjoy what you do, you have good friends, and I was at a different place the other day, earlier this weekend, they asked me, like, you're not a nine, nine, six CEO, what do you do? And I said, look, I try to make sure that I can find something to enjoy every day. Because I have enough things to worry about. I could really get myself in the wrong headspace by worrying about a lot of things. I run cybersecurity for crying out loud, you know. I live off the fact that somebody's going to hack somebody at some point in time. My phone rings saying, can you help us? It's like, why didn't you spend the money before? But can I help you? So I can help you. So I think it's a, it's a state of mind thing. Can you get your state of mind to be optimistic, positive, and one of gratitude and happiness every day? If you can, it's going to be great. But guess what? If health benefits come, you know, I can start being Benjamin Button, be amazing. If my kids are continuing to be happy and successful, be amazing. My mothe…

AI assessment note: “let's just focus on tomorrow.”

Q Do you think it is good or bad to have government intervention when you have models as powerful as we have them?

A I think we're going through a discovery process. Um, I think this notion of guardrails has not been built robustly enough. These models seem to be easy to get past. Remember the early days when I used to read about somebody had this conversation with a model and found a way to, you know, albeit the guardrails because it asked questions differently and the model was able to get sort of Jail broken. It became a hobby amongst people, and they had all kinds of conversation with models. It's the same challenge. How do you make sure that you can put enough guardrails around the AI model that you built to make sure it's only used for the purpose that you had? That's the challenge that there is. I think the guardrailing needs to get better. To the extent the government feels the guardrails aren't robust enough, it's trying to tell us that it's a national security issue. I need to go fix the guardrails. Well, I think it's a simple matter of trying to fix or treat the guardrails as a real problem and solve it.

AI assessment note: “I think it's a simple matter of trying to fix or treat the guardrails”

Q Which one do you think it will be? I know I'm the investor, I should know, but I don't.

A No, I think that the challenge is, Right now, the frontier models know this problem, and they're aggressively moving to incorporate memory and context into their models because they understand that's the mode. And the challenge is you have to pay for it twice. If you say, no, I don't want to use your memory in context, the model may not be usable if you use an orchestration layer. The orchestration layer today is not as well funded as these models. The risk is you end up in architecture where the model has a lot of context, And you cannot be model agnostic. You actually be model captive to get maximum efficacy and value for what you want to get done, right? It's not like, it's like you have a choice. You have to go all in on the model, or you can't go all in the model. You can't do with one what you can do with the other, and if you want to do it with the other, you have to redesign your entire application that is deeply embedded with the capabilities of the second one. So in the world of bifurcation and horses or courses, I think open source is a good thing because it allows you to play the cost curve, right? You don't need the smartest model to the smartest thing. So open source is good. Whether it comes from a certain country or not, the question becomes, you know, what, what back doors are you worried about that these open sources model have, models have? What are you worri…

AI assessment note: “The risk is you end up in architecture where the model has a lot of context”

Q Is the way that you get people convinced, has that changed over time?

A Yeah, look, I think we all gonna get our first management job in life. And, uh, it's kind of like I tell people, uh, say when they ask me, well, what is your advice? Look, we all get to where we get to, to a certain point in life by being individually excellent. And whether it's coming first in class or second in class or top of your class, you're really good. It doesn't matter what other people do, what other people think. You prove that you're smarter than people around you. And usually that's why you get your job. And typically when you get your first job, you're given an individual task, whether you're coding or you're doing something else, you're actually given a task. Then you say, great. I know what the rules are. I know what it takes to win. When you get your first management job and you sit there and say, wait a minute, this is a different job. Now your task is not to do a great job yourself. Your task is to get the same level of quality from three people. We're going to work for you. And that's where I think our first challenge comes in as individuals, as you transition from individual to managers is like, how do I get three people to deliver the greatest outcome that they can deliver? And perhaps that outcome is going to be different from me.

AI assessment note: “transition from individual to managers is like, how do I get three people to deliver”

Q I know. I, I love it. What are you most concerned about in the world today? What worries you?

A You know, I try and worry about things I can control. I try not to worry about things I can't control. Um, there's a lot of things to worry about in the world. You know, we can worry about wars. You can worry about pandemics. You can worry about The economy, if you want to, you can worry about elections if you want to, but I think one of the things we all saw in the last five years is the tremendous resilience of humankind. If I told you that we all have to live, you know, under closed doors, have to wear a mask, not be able to fly anywhere, not go to public places, not go to the movie theater, not even go to the grocery store, you sit and say, holy shit, that's going to be horrible. All kinds of bad things gonna happen. People will start doing crazy stuff, and the world is gonna come to an end. And it didn't. You know, like, seven plus billion people around the world somehow adapted on a dime, turned around, did it, we lived an orderly life, the stock market went up. You sit there and say, holy shit, how did that happen? What just happened? And there's all kinds of, you know, disaster theories, there are all kinds of doomsday theories out there, and people said, oh my god, this is the end of the world. You sit there and say, holy shit, none of that happened, we all are happy, we're all alive, everybody's appreciating each other more, you know, some people did all kinds of craz…

AI assessment note: “I try and worry about things I can control. I try not to worry”

Q Is the way that you get people convinced, has that changed over time?

A Yeah, look, I think we all gonna get our first management job in life. And, uh, it's kind of like I tell people, uh, say when they ask me, well, what is your advice? Look, we all get to where we get to, to a certain point in life by being individually excellent. And whether it's coming first in class or second in class or top of your class, you're really good. It doesn't matter what other people do, what other people think. You prove that you're smarter than people around you. And usually that's why you get your job. And typically when you get your first job, you're given an individual task, whether you're coding or you're doing something else, you're actually given a task. Then you say, great. I know what the rules are. I know what it takes to win. When you get your first management job and you sit there and say, wait a minute, this is a different job. Now your task is not to do a great job yourself. Your task is to get the same level of quality from three people. We're going to work for you. And that's where I think our first challenge comes in as individuals, as you transition from individual to managers is like, how do I get three people to deliver the greatest outcome that they can deliver? And perhaps that outcome is going to be different from me.

AI assessment note: “say when they ask me, well, what is your advice?”

Q Do you think it is good or bad to have government intervention when you have models as powerful as we have them?

A I think we're going through a discovery process. Um, I think this notion of guardrails has not been built robustly enough. These models seem to be easy to get past. Remember the early days when I used to read about somebody had this conversation with a model and found a way to, you know, albeit the guardrails because it asked questions differently and the model was able to get sort of Jail broken. It became a hobby amongst people, and they had all kinds of conversation with models. It's the same challenge. How do you make sure that you can put enough guardrails around the AI model that you built to make sure it's only used for the purpose that you had? That's the challenge that there is. I think the guardrailing needs to get better. To the extent the government feels the guardrails aren't robust enough, it's trying to tell us that it's a national security issue. I need to go fix the guardrails. Well, I think it's a simple matter of trying to fix or treat the guardrails as a real problem and solve it.

AI assessment note: “To the extent the government feels the guardrails aren't robust enough”

Q I know. I, I love it. What are you most concerned about in the world today? What worries you?

A You know, I try and worry about things I can control. I try not to worry about things I can't control. Um, there's a lot of things to worry about in the world. You know, we can worry about wars. You can worry about pandemics. You can worry about The economy, if you want to, you can worry about elections if you want to, but I think one of the things we all saw in the last five years is the tremendous resilience of humankind. If I told you that we all have to live, you know, under closed doors, have to wear a mask, not be able to fly anywhere, not go to public places, not go to the movie theater, not even go to the grocery store, you sit and say, holy shit, that's going to be horrible. All kinds of bad things gonna happen. People will start doing crazy stuff, and the world is gonna come to an end. And it didn't. You know, like, seven plus billion people around the world somehow adapted on a dime, turned around, did it, we lived an orderly life, the stock market went up. You sit there and say, holy shit, how did that happen? What just happened? And there's all kinds of, you know, disaster theories, there are all kinds of doomsday theories out there, and people said, oh my god, this is the end of the world. You sit there and say, holy shit, none of that happened, we all are happy, we're all alive, everybody's appreciating each other more, you know, some people did all kinds of craz…

AI assessment note: “I try not to worry about things I can't control.”

Q Where was your conviction most misplaced when you review your career or where did you put it and it was wrongly placed?

A I don't know if a conviction is wrongly placed. I think conviction generally in hindsight, you can always analyze stuff and say, oh my God, you know, you shouldn't have had that conviction. I think you always, uh, take on stuff a with conviction. Two, the belief that everybody else is going to do their part. So to make sure that entire thing's going to work, uh, is usually conviction starts to not result in outcomes that you want when a lot of different people get involved and you have to rely on other people for part of your outcomes that need to happen. And then the question is, can you rally those people in your direction? I think to be fair, situations where I wasn't able to achieve the outcome that I set out It was usually when perhaps I wasn't able to bring everybody along, or perhaps I wasn't able to convince other people who had a stake in the outcome that this was the right direction, this is the right thing to do. So there's learning that for me, and I had to possibly work harder on getting buy-in, or I had to work hard in understanding their perspective. So I think those, those are situations if I were back and say, you know, my God, had I gotten those people along, I'd have gotten to a better outcome, or perhaps replace those people depending on, you know, what the right, uh, strategy should have been.

AI assessment note: “I don't know if a conviction is wrongly placed.”

Q Yeah. Um, but no one told me that. I kind of wish they had done. What, what does no one tell you about having money that they should do?

A I think it's not about money as much as it's about, it's about success. Remember, we all follow Maslow's hierarchy. I came to the United States with two suitcases, 200 dollars, and I was willing to do anything, anything at all within reason as the right side of the law to make sure that I made a life for myself because there was no way to go back. I was going to use a different word, but I'm not going to use it because you go crazy again. There's no going back, right? It was a one-way ticket, which I did not have. I had no recourse, so I was willing to do whatever it took. I took notes. I, you know, became a security guard. I tried to pump gas for a weekend.

AI assessment note: “I think it's not about money as much as it's about, it's about success.”

Q When are you able to call a bad decision, a bad decision? When, when should one read the tea leaves and say enough is enough?

A As I said, a part of our jobs as CEOs is to look around corners, constantly look at data and reassess what's going to happen. I tell the story. I was on a flight to India. I was going to speak at my alma mater about, uh, uh, 35,000 people that were graduating and I landed in Dubai. And I saw all this flutter about ChatGPT, and oh my god, OpenAI has launched this amazing product, which is an AI product, and there was all kinds of rhetoric around it, but I had nothing to do for a few hours, so I tried to figure out how to get access to it, which I was able to, surprisingly, and I started playing with it. And the next three hours, and the next day, I rewrote my entire graduation speech, and I made it all about how AI is going to be a pivotal moment for every one of us. Now, the reason I tell you the story is that I use the flight back to think about how does that impact Palo Alto? And we launched a series of things internally, which were drastically sort of drastic measures, which required us to rethink everything. And you played the movie forward. Is AI going to make sure that everything's going to be different in 10 years or not? For sure. 20? For sure. The question is, what do I need to be doing today that I'm the next Amazon and not the next Costco, which is also a great company, but I'm the next Amazon or I'm the next company that is going to be really successful because we w…

AI assessment note: “I tell the story. I was on a flight to India.”