🧑🏻💼 Business Talk #1: Daniel Newman
CEO - The Futurum Group
Welcome to Business Talk — 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
𝗜𝗻𝘁𝗿𝗼𝗱𝘂𝗰𝘁𝗶𝗼𝗻
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!
𝗪𝗵𝗮𝘁 𝗶𝘀 𝘆𝗼𝘂𝗿 𝗽𝗲𝗿𝘀𝗽𝗲𝗰𝘁𝗶𝘃𝗲 𝘄𝗵𝗲𝗻 𝘆𝗼𝘂 𝗹𝗼𝗼𝗸 𝗮𝘁 𝘁𝗵𝗲 𝘁𝗲𝗰𝗵 𝘀𝗲𝗰𝘁𝗼𝗿 𝗻𝗼𝘄?
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.
𝗪𝗵𝗮𝘁 𝗮𝗿𝗲 𝘁𝗵𝗲 𝗺𝗼𝘀𝘁 𝘀𝗶𝗴𝗻𝗶𝗳𝗶𝗰𝗮𝗻𝘁 𝘁𝗿𝗲𝗻𝗱𝘀 𝗱𝗿𝗶𝘃𝗶𝗻𝗴 𝗶𝗻𝗻𝗼𝘃𝗮𝘁𝗶𝗼𝗻 𝗶𝗻 𝘁𝗵𝗲 𝘁𝗲𝗰𝗵 𝘀𝗲𝗰𝘁𝗼𝗿 𝘁𝗼𝗱𝗮𝘆? 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.
𝗪𝗵𝗶𝗰𝗵 𝗰𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀 𝗮𝗿𝗲 𝗯𝗲𝘀𝘁 𝗽𝗼𝘀𝗶𝘁𝗶𝗼𝗻𝗲𝗱 𝗳𝗼𝗿 𝘁𝗵𝗲 𝗰𝗼𝗺𝗶𝗻𝗴 𝘆𝗲𝗮𝗿𝘀?
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.
𝗪𝗵𝗶𝗰𝗵 𝗰𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀 𝗱𝗼 𝘆𝗼𝘂 𝘁𝗵𝗶𝗻𝗸 𝘄𝗶𝗹𝗹 𝗳𝗮𝗹𝗹 𝗯𝗲𝗵𝗶𝗻𝗱 𝗼𝗿 𝗹𝗼𝘀𝗲 𝗴𝗿𝗼𝘂𝗻𝗱?
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.
𝗪𝗵𝗶𝗰𝗵 𝗰𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀 𝗵𝗮𝘃𝗲 𝗮 𝗹𝗼𝘁 𝗼𝗳 𝗽𝗼𝘁𝗲𝗻𝘁𝗶𝗮𝗹 𝘁𝗼 𝗱𝗶𝘀𝗿𝘂𝗽𝘁 𝗶𝗻 𝘁𝗵𝗲 𝘁𝗲𝗰𝗵 𝘀𝗲𝗰𝘁𝗼𝗿?
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.
𝗪𝗵𝗮𝘁 𝗮𝗿𝗲 𝘆𝗼𝘂𝗿 𝘁𝗼𝗽 𝟯 𝘁𝗲𝗰𝗵 𝗽𝗶𝗰𝗸𝘀 𝗳𝗼𝗿 𝘁𝗵𝗲 𝗻𝗲𝘅𝘁 𝟯-𝟱 𝘆𝗲𝗮𝗿𝘀?
$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.
𝗠𝘆 𝗳𝗮𝘃𝗼𝗿𝗶𝘁𝗲𝘀
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.
𝗪𝗵𝗲𝗿𝗲 𝗰𝗮𝗻 𝘄𝗲 𝗳𝗶𝗻𝗱 𝗺𝗼𝗿𝗲 𝗶𝗻𝗳𝗼 𝗮𝗯𝗼𝘂𝘁 𝘆𝗼𝘂?
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/daniellouisnewman…
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.