Welcome to Business Talk โ where we interview successful business leaders to uncover their perspectives on trends shaping their industries.
In this edition, we have the pleasure of interviewing:
Name: Daniel Newman @danielnewmanUV
Age: 42
Company: The Futurum Group
Role: CEO
Residence/Country: Austin (TX) - United States
๐๐ป๐๐ฟ๐ผ๐ฑ๐๐ฐ๐๐ถ๐ผ๐ป
As the CEO of the Futurum Group, I lead an outstanding team of analysts that focus on providing research, market intelligence, advisory, and GTM strategy for over 400 of the world's most prolific tech companies including 14 of the 20 largest tech companies in the world. Our firm covers technology from semiconductors to SaaS as well as tech policy, sustainability, and governance.
I love chips and infrastructure and love how AI is changing the world right before our eyes at a pace that we have never seen before.
I wrote 7 books about digital transformation and technology including Human/Machine in 2019. It was ahead of its time by a couple of years. But the world grew into it!
๐ช๐ต๐ฎ๐ ๐ถ๐ ๐๐ผ๐๐ฟ ๐ฝ๐ฒ๐ฟ๐๐ฝ๐ฒ๐ฐ๐๐ถ๐๐ฒ ๐๐ต๐ฒ๐ป ๐๐ผ๐ ๐น๐ผ๐ผ๐ธ ๐ฎ๐ ๐๐ต๐ฒ ๐๐ฒ๐ฐ๐ต ๐๐ฒ๐ฐ๐๐ผ๐ฟ ๐ป๐ผ๐?
We have entered a technological revolution that is being driven by the rapid proliferation of AI. We are in the earliest innings of how AI will change our lives. FSD and LLMs are only doing the most rudimentary things and will advance right before our eyes to revolutionize every business, every job, every transaction and interaction and so much more.
The way we learn, work, play, and engage with the world will look significantly different than it does today. This of course will be built on the immense investment that is going on to build out AI Data Centers on a global scale, which has brought a wave of excitement to the market and stabilized what has been an invisible recession. AI and deflationary tech has brought earnings even when real job growth and GDP has been nominal against inflation.
The multiples in the market often seem to high, but the good companies grow into their outsized earnings expectations. Some companies like NVIDIA $NVDA feel like their forward earnings will be an easy hit and others have felt like they have fallen from the stars, like Tesla $TSLA, which is in a tenuous spot between being an auto company and a global innovator building AI, FSD, and Robotaxis. I believe in Tesla $TSLA, but it is an example of where exuberance can quickly turn to bearishness.
Overall the market is frothy, but the good companies like Microsoft $MSFT, Google $GOOGL, Amazon $AMZN, ServiceNow $NOW, and others have continued to deliver growth even against tough macro environments. Apple $AAPL is one to watch because it feels like it has lost its mojo, but it would be foolish to rule it out.
๐ช๐ต๐ฎ๐ ๐ฎ๐ฟ๐ฒ ๐๐ต๐ฒ ๐บ๐ผ๐๐ ๐๐ถ๐ด๐ป๐ถ๐ณ๐ถ๐ฐ๐ฎ๐ป๐ ๐๐ฟ๐ฒ๐ป๐ฑ๐ ๐ฑ๐ฟ๐ถ๐๐ถ๐ป๐ด ๐ถ๐ป๐ป๐ผ๐๐ฎ๐๐ถ๐ผ๐ป ๐ถ๐ป ๐๐ต๐ฒ ๐๐ฒ๐ฐ๐ต ๐๐ฒ๐ฐ๐๐ผ๐ฟ ๐๐ผ๐ฑ๐ฎ๐? I've said a lot about AI and so has everyone else. It is the mega trend and it is driving almost everything. But for sport, I'll pick a couple of other things that are really important.
Cybersecurity will be massively important because of AI and how it will create more vulnerabilities across applications and infrastructure.
Policy is going to be another huge component of innovation. In the U.S. the companies always lead and policy follows, but around the world AI is causing proactive policy and regulation and this will stifle innovation in parts of the world and likely leave the U.S. and China to be the superpowers of both innovation and the long term economy. We have to regulate a technology as impactful as AI, but we also have to allow innovation to flourish and drive competition.
The tech sector is the obvious one, but in some ways every company is now a tech company. Beyond tech I'm excited about the prospects of Life Sciences. We have seen the power of Ozempic and Monjouro, with the help of AI it will continue to proliferate pharmaceuticals.
Also, longevity will be in focus and we will be dealing with longer life expectancy but at the same time dealing with resource constraints. Innovation will be critical for sustaining life as we know it.
Personally, I'm really excited about the future of transportation. Beyond FSD, the next wave of aerospace and aviation as well as safer and more productive transportation.
๐ช๐ต๐ถ๐ฐ๐ต ๐ฐ๐ผ๐บ๐ฝ๐ฎ๐ป๐ถ๐ฒ๐ ๐ฎ๐ฟ๐ฒ ๐ฏ๐ฒ๐๐ ๐ฝ๐ผ๐๐ถ๐๐ถ๐ผ๐ป๐ฒ๐ฑ ๐ณ๐ผ๐ฟ ๐๐ต๐ฒ ๐ฐ๐ผ๐บ๐ถ๐ป๐ด ๐๐ฒ๐ฎ๐ฟ๐?
The big companies always have it best. I don't see regulators being able to slow the big from getting bigger and even when they do, they tend to find ways around them with creative structures like Microsoft $MSFT did with Inflection AI. Google $GOOGL has the most important data at its fingertips and NVIDIA $NVDA is building the world's AI infrastructure. I'm hopeful for competition for both as it drives more innovation, but those companies are in really good shape even if I can poke holes in both of them.
๐ช๐ต๐ถ๐ฐ๐ต ๐ฐ๐ผ๐บ๐ฝ๐ฎ๐ป๐ถ๐ฒ๐ ๐ฑ๐ผ ๐๐ผ๐ ๐๐ต๐ถ๐ป๐ธ ๐๐ถ๐น๐น ๐ณ๐ฎ๐น๐น ๐ฏ๐ฒ๐ต๐ถ๐ป๐ฑ ๐ผ๐ฟ ๐น๐ผ๐๐ฒ ๐ด๐ฟ๐ผ๐๐ป๐ฑ?
I'm not super optimistic about the traditional automakers. General Motors $GM and Ford $F may be too big to fail, but they have been so outflanked by Tesla $TSLA and Chinese Automakers like BYD $BYDDF. I'm just not sure what is innovative about the old guard of automakers.
Perhaps more controversial is that I think Gen Z is going to cause an unforeseen shakeup in the banking and financial services space. I am long Sofi $SOFI because I think banking will move to all digital. I see Sofi $SOFI as a bridge between where we are and self-custody crypto wallets. But with things like social credit and a cashless society, I just don't know if younger people will still be running to Chase $JPM and Citi $C. At least if they don't really change their value proposition in the near term.
๐ช๐ต๐ถ๐ฐ๐ต ๐ฐ๐ผ๐บ๐ฝ๐ฎ๐ป๐ถ๐ฒ๐ ๐ต๐ฎ๐๐ฒ ๐ฎ ๐น๐ผ๐ ๐ผ๐ณ ๐ฝ๐ผ๐๐ฒ๐ป๐๐ถ๐ฎ๐น ๐๐ผ ๐ฑ๐ถ๐๐ฟ๐๐ฝ๐ ๐ถ๐ป ๐๐ต๐ฒ ๐๐ฒ๐ฐ๐ต ๐๐ฒ๐ฐ๐๐ผ๐ฟ?
I remain really bullish on the prospects for ServiceNow $NOW. I feel like a new software abstraction for the enterprise is going to change the industry in a big way and people don't really see it coming. I've gotten to know Bill McDermott well over the past several years and he has done better than any other CEO in coming out and telling the story of what workflows and automation will look like in the typical enterprise.
Perhaps a surprise name that I have been really positive on has been IBM $IBM. Arvind Krishna has done a remarkable job and the company was first to market with GA enterprise Gen AI platform and its all out bet on cloud and AI has helped the company consistently outperform the market and deliver to its shareholders. I would like to see it grow more quickly, but the company has cut the boat anchors and has gone all in on the right things and I think it will be rewarded for its efforts.
๐ช๐ต๐ฎ๐ ๐ฎ๐ฟ๐ฒ ๐๐ผ๐๐ฟ ๐๐ผ๐ฝ ๐ฏ ๐๐ฒ๐ฐ๐ต ๐ฝ๐ถ๐ฐ๐ธ๐ ๐ณ๐ผ๐ฟ ๐๐ต๐ฒ ๐ป๐ฒ๐
๐ ๐ฏ-๐ฑ ๐๐ฒ๐ฎ๐ฟ๐?
$AVGO - Broadcom - It's all about the network for AI. Ethernet will be the Android of NVIDIA's Infiniband.
$NOW - ServiceNow
$GOOGL - Google - the best data and real AI provenance despite a few AI false starts.
๐ ๐ ๐ณ๐ฎ๐๐ผ๐ฟ๐ถ๐๐ฒ๐
Favorite book: Chip War by Chris Miller @crmiller1
Favorite podcasts: The All-In Podcast by Chamath Palihapitiya, Jason Calacanis, David Sacks & David Friedberg. @theallinpod @chamath
Favorite quote: "Don't worry about failure; you only have to be right once." - Drew Houston @drewhouston
Favorite role model: My Mom, but I'm a huge fan of Buffett @WarrenBuffett, he is brilliant in his simplicity.
๐ช๐ต๐ฒ๐ฟ๐ฒ ๐ฐ๐ฎ๐ป ๐๐ฒ ๐ณ๐ถ๐ป๐ฑ ๐บ๐ผ๐ฟ๐ฒ ๐ถ๐ป๐ณ๐ผ ๐ฎ๐ฏ๐ผ๐๐ ๐๐ผ๐?
I post a lot of video's and insights about the tech sector on my X page: @danielnewmanUV
For more info about me personally check my LinkedIn page: https://linkedin.com/in/daniellouisnewmanโฆ
For more info about The Futurum Group:
https://futurumgroup.com
Disclaimer:
The information and opinions provided in this article are for informational and educational purposes only and should not be considered as investment advice or a recommendation to buy, sell, or hold any financial product, security, or asset. The Future Investors does not provide personalized investment advice and is not a licensed financial advisor. Always do your own research before making any investment decisions and consult with a qualified financial professional before making any investment decisions. Please consult the general disclaimer for more details.