The Exchanges

Q Did you see the same thing happen with storage? I remember in the early days with Box and Dropbox and YouTube, you all had This major innovation with storage, and how did that play out?

A Let me give you a fun stat. We give our customers unlimited storage. We have 82% gross margin. So, so the, the, what, what happened was the price of the underlying storage has gone down by hundreds of times since we started the company. And then our, all our value is in the software layer on top of the storage. So we've benefited by this incredible, just, you know, ruthless competition between Western digital Seagate, other players that are just trying to pack more, more, more, you know, basically more, more, uh, storage density into these drives. And every couple of years they have a new break Through we're now, you know, upcoming, we're up, we're heading toward maybe a, a 50 terabyte hard drive. When we started the company, they were kind of 80, uh, 80 gigabytes.

AI assessment note: “what happened was the price of the underlying storage has gone down by hundreds”

Q then we're presenting that In Slack to our team. So this is coming fast and furious, and we spend, I don't know, probably 15 minutes on each of those incoming applications to start doing the math on that. Try about 5000 hours of work. Aaron, what are you seeing on the street? What are you doing at box in terms of agents landing right now in Q two of 2025?

A Uh, yeah, I mean, I think, I think Saks represented it well, which is, which is, you know, you have to now think about AI as, as effectively being able to do anything on a, on a computer or another piece of software as, as a human can do. And the little distraction that, that I think happened two years ago after the ChatGPT moment was we sort of thought about that as, oh, we're just gonna, you know, do like typing information retrieval. And that's a new paradigm for user interfaces, let's say. So you just like talk to your software and you like search Zillow via chat. That was sort of a little bit of a distraction that that's super helpful, like when you want basic information, look up or whatnot. The big breakthrough is starting to think through these things as, as full, you know, effectively, uh, uh, you know, agentic systems that, that operate on any amount of data, any amount of tools for as long as you want to complete any tasks that you want. And this is sort of the big year where agents are starting to, you know, enter the vocabulary of enterprises of IT people, Of, you know, larger and certainly smaller organizations. Um, and, and it kind of requires you to have a little bit of a, of a reset moment on how you think about AI, which is, which is, it's not just now a kind of a co-pilot that you talk back and forth with. It's actually something running behind the scenes. Th…

AI assessment note: “this is sort of the big year where agents are starting to, you know, enter the vocabulary”

Q think that, um, these guys are going to be successful in. Tearing down all of this infrastructure inside the United States? Do you look forward to it? Do you think it's has a chance? What do you. Um, so, uh, are we talking, maybe, maybe more pointedly, like, is it hard for you to do business in the United States in ways where you wish that it would be easier?

A Uh, we're, we're really lucky. I mean, in the land of bits, it's, uh, it's about as, as simple as it gets. Um, I think where, where we clearly have a crisis is, uh, energy, transportation, EVs, anything autonomous. You know, you can, you know, list 20 things that, that run into just unending regulation. You have the state regulation, you have the federal regulation, um, you know, it's just endless loops that people go into. Um, do you, ah, so, so like no matter what, we need to go and solve that. Actually, I felt like Kamala was one of the first sort of Democrat presidents that had that as a message. It was like not the most expansive part of the message because there's like 50 things you have to get out in three months. But she talked about red tape, she talked about we have to beat China, we have to move faster, all that. You know, in, in the, in the Trump outcome scenario, you have obviously Elon as this sort of superpower that can go and drive a lot of that way faster. I'd hope it's kind of applied somewhat surgically versus a total hammer because, um, uh, I just think there's, there's, you know, like, I, I think having some degree of thoughtfulness of where can we go and, you know, create these fast lanes for innovation and for acceleration, I think is a good thing. Um, uh, but, uh, but yeah, like getting drugs approved faster, building more, building more houses. It's ins…

AI assessment note: “in the land of bits, it's, uh, it's about as, as simple as it gets”

Q And then we're gonna unpack. Yeah, we're gonna unpack that. Aaron, your thoughts on the first hundred days? Obviously, you are a Democrat, and, uh, you were pretty vocal, not in support of Trump, so what's your take on the first hundred days? Any, any bright spots for you? Things you, you know, support?

A Actually, uh, Sax's world I'd say has, has been a bright spot. So especially, I mean, I think we have a very clear message on AI and, uh, and that, that is, that's been, I think a huge net positive is, um, you know, if you look at the, the past, you know, few months, uh, out of all the, the AI push from the administration, it's unmistakably, you know, pro open source, you know, pro, you know, bring as much AI innovation, you know, to the U S obviously the, the tariffs, you know, add a little bit of a headwind to that. I have some very strong asks, you know, around high skilled immigration, because I think that, you know, AI talent is going to be super critical to, to actually win the AI war. So, so I'd say that, that directionally has, has had some positive momentum. You know, from my perspective, this is kind of playing out, uh, almost exactly how I thought it would six months ago. And then three months ago, I, I think there was some signs that maybe, maybe, you know, it wouldn't play out this way, um, just based on some of the Some of the, you know, kind of early groups that were coming to the White House, the, the, the, the, the sort of deep business, you know, kind of centricity of the White House, you know, I think it was day one or two that Stargate was announced, you know, at the White House, we're going to go build massive infrastructure. I think the case I'd like to ma…

AI assessment note: “Sax's world I'd say has, has been a bright spot.”

Q It's all partisan, none of its first principles, right?

A I mean, for these people, for this group of people, which isn't everybody. That's going to be true of both sides. Like Michelle Obama, Michelle Obama was like, let's get kids healthy. And all of a sudden now it's in vogue to do that. So, so I, I think, I think we're just in an environment where, where any, anything will become partisan. What's interesting is, is that because of the, you know, some of the, the cross party elements of, of, of Trump and now his cabinet is it might pull in more, More of the Democrat party than, than would usually happen. And, and I think because of Elon and the people that are surrounding Trump, you probably have a bit more air cover for the Rocanas of the world to also step up because if it was like Steve Bannon and Trump doing Doge, it would be like, ah, okay, you know, maybe this is not the thing to, to, you know, lend credibility to for, for pure political reasons. If you have, you know, some of the best entrepreneurs that are, that are out there actually like literally in the cabinet driving this, At some point, you know, it is an IQ test if you're, if you're on board or not.

AI assessment note: “I think we're just in an environment where, where any, anything will become partisan.”

Q also picked Sachs, so I think it's undeniable that Peter Thiel is just a great picker, hands down, one of the greatest investors, whether it's in people politics, Uh, or businesses, so I give it to Peter Thiel. Uh, let's do our best new product, best new product of twenty-twenty-four. Aaron, I'm gonna start with you this time. Do you have a best new product that you launched at Box?

A Uh, we, we do, um, but I'll exclude ourselves from this, but the, um, uh, but I, I think that the wave of voice AI, um, I'm most compelled by right now as, as sort of the twenty-twenty-four kind of, you can see the, the semblance of, Actually, you know, a new paradigm for, for mobile. Um, we've kind of had the same thing on mobile for 20 years, and, um, uh, and so the ability to actually, uh, you know, in a high quality way, talk to your phone, have it do something, uh, I think is, uh, you're starting to see signs. The latest version of Gemini, um, is just incredibly, uh, powerful. Perplexity has very good, uh, work here. ChatGPT, advanced voice mode. So I think you're gonna start to see this, uh, shape kind of computing in, in the next couple years.

AI assessment note: “I'll exclude ourselves from this, but the, um, uh, but I, I think”

Q I had cuts Clothing on This Week in Startups last week, and he said there's gonna be, like, if this doesn't get revolve resolved in, like, let's say two to four weeks in his group chats, people are gonna start layoffs, and they, they can't physically restart the supply chain in Vietnam or wherever to make t-shirts. So, Aaron, what's your thought on this as well? Just bringing you in.

A Sure. Well, first of all, I mean, Ryan has supplied me with a high degree of doom scrolling. And, uh, I, it's just like a horror show reading his tweets. First of all, I, like, I would feel better if the messages out of the administration were either more kind of consistent or that there was a logical connection between, do we either want to raise the kind of, you know, tariff revenue stream, or do we want free trade? Like, like those things are, are working against each other because Like depending on who you talk to, they say this is a mechanism to bring down income tax, which obviously then by definition means that they expect the tariffs to sort of persist, um, which is totally different from let's go negotiate deals that just allow for the, you know, free trade to actually increase. Uh, and so are we worried about the reciprocity or are we worried about kind of revenue stream? So that's a whole, whole issue. You also have this issue, which is the messaging from the government. And this is the meta point I'll make in a second is about is about how we could have actually accelerated into the transformation of the economy. But, you know, you have folks like Lutnik, et cetera, you know, going on on TV talking about the end state of our economy, which are actually probably, you know, fine messages, but, but we haven't seen what that vision looks like. You know, so everybody is …

AI assessment note: “I would feel better if the messages out of the administration were either more”

Q your thoughts on this vibe shift, this complete pivot where we've gone from my Lord, everybody's saying, I got to get mine. You got yours. I'm getting mine to name and shame. They're naming and shaming now very specific pieces of pork in these bills, you know, including stadiums for the NFL. And people are like, why is the NFL getting this if they're worth 20, 30, forty billion dollars?

A Two, just quick thoughts. One, Patrick Carlson had a tweet yesterday that basically said this sort of this, the, this big misinformation kind of created by, by people that want to be slow is that you, you, you have to sort of choose two of fast, good, and cheap. And, and I think basically, you know, Elon's companies have sort of always effectively kind of proven the opposite, which is, which is actually, if you just like start to ask the question, like, why does that thing have to cost as much? You know, if you're building a rocket or, or designing a car or developing batteries, like what, why, you know, if you just do ground up, why does it have to cost as much? And so, so what's interesting is, is that, that probably if most people looked at what the government was spending on, they wouldn't even feel like, like, you know, it's not even helping them in like the disaster relief sense of, of, you know, I think like that there are probably actually people that actually do experience the benefits of disaster relief. It's actually just all of the, All of the overhead that we've created to getting anything done in the government that could actually make the government better serve that all of the constituents. I was talking to, you know, sort of a nameless individual in the government the other, uh, the other week where by Congress, they have to hire contractors to do work and the …

AI assessment note: “all of the overhead that we've created to getting anything done in the government”

Q Contraint leads to great art. Aaron, your thoughts?

A No, I mean, I can't add that much more to this. I think it's, there, there's probably a little bit of a, a disconnected times from the, let's say the, the voting public and, and, you know, broad constituents from then those that have sort of seen this in real life. Being inside of a company, having to, you know, do a startup and scaling up and, and just this, um, the, the perverse incentives to build bigger teams, spend more, your project then is more important than more dollars it gets. We have all of these systems in place, which is the stuff that gets attention are the things that you spent more on. So you have all these weird incentives to actually have your thing literally cost more to have, you know, more overhead because you've brought in more contractors into the project that then You know, you're gonna get some, you know, kind of future benefit from in some way. So you, you have a lot that, that is sort of fully broken in this and, um, and there's no, there's, there's, you know, it's hard to imagine any other way to veer off from that path other than something that does shake things up, you know, as, as much as Doge is doing.

AI assessment note: “I can't add that much more to this.”