Basis Points LIVE From Zeta Live: David Steinberg, Dan Ives & More!

0:00 All right. Hello everybody. Welcome back to another episode of Basis Points. We are here live at Zeta Live with the CEO and co-founder of Zeta, Mr. David Steinberg. Thank you for taking the time. >> Oh, it's great to see you guys. You know, I love being with you. >> So, real quick, the event's amazing. 3,000 people. >> It's crazy. >> Could not. Your team is amazing. So, let's just give them their flowers because your team has done such an incredible job that this event is great.

0:27 So, congratulations. >> Thank you, Steve. It's I I'll tell you I'm so proud of the team. A lot of stuff comes together a little later than you'd like, but it's been, you know, just so far today a home run. So, I'm going to start it off with when I see the people that are here, it's not people like admitted. You're talking about CMOs are here. Talking about decision makers that have direct lines to their board of directors and CEOs about why they should make a decision.

0:52 >> Oh, we have a lot of CEOs here, too. >> A lot of CEOs. You got a lot of CFOs here. Just you got seuitees here. This is if you had one message, what would you want them to leave with really capturing your day? >> Let me start by saying that I know there's been talk online, oh why would I want to see somebody carrying a ball or so on and so forth. You bring the athletes, you bring the movie stars, you bring the rockstar entrepreneurs. That brings in the customers.

1:17 >> That brings in the potential customers. In the room today is $200 billion a year in decision makers for marketing and technology today. >> And usually those celebrities and athletes are involved in marketing and decision making. >> Of course. And when you think about it, it's funny. Last year, for every dollar we spent on this platform, we generated booked business of 10 times that amount. >> Right? >> This year, I think we'll do better than that.

1:48 >> Love that. So the reality is the message is why Athena operating system, why AIM, why ultimately other things. How do we continue to drive a higher return on investment for our clients than anybody else bar none? One 6 to 700% on marketing spend goes up dramatically in an AIM environment. It goes up even further when you get to the chip level. 297% confirmed return on marketing spend today. I'm sorry, I apologize. On technology spend, 6 to 700% on marketing, 297% return on technology spend today. That's what I want CEOs to hear, CMOs to hear, and CFOs to hear.

2:36 >> Athena OS, that was one of the major four announcements today. What is the new trajectory that you think this can lead Zeta onwards towards because it's not just about marketing intelligence anymore. It feels like it's much more more broader than just marketing for a company. >> It is. Oh well, we've moved out of marketing, you know, a number of months ago and really added the business use case. That's what drove this, >> right? So when you added the ZBI, what happened was perfect example, we had a client, we're doing a tremendous amount of marketing for them around skirts in the Northeast for women because that's what the demand was. Problem was all the inventory was in the Midwest.

3:14 >> So now all of a sudden you put together a system where inventory can know where the demand is before it's there. Let's take it a step further. You can then use that for manufacturing, >> right? >> What is the demand to what do we need to make? Then you can use it for the best logistics. You can adjust weather. You can adjust everything that's necessary to make the entire system work. Each decision makes the next decision smarter. So when you look at return on investment, our goal is to be the highest return on investment across technology and marketing for our clients. Bard none. And I think that was part of the relationship you guys expanded on today with Palunteer bringing their ontology together with the Zeta ecosystem. Karp was on stage.

4:01 He doesn't go to many conferences. So >> he does not and he is let's let's just stop and say how amazing. >> He was incredible. >> Dr. Karp is an incredible individual >> and just incredible. And to call him a friend. I mean I don't know if you heard I thought my epitap would be his line from the press release that you know it's an honor for Palunteer to work with Zeta. >> Yeah. Right. My new epitap is David Steyberg's really funny in public, but he's much funnier in private. I was like, that's a compliment. He's that was, you know, he's very funny.

4:33 >> Yeah. >> And and I tend to be very funny. So, we have a good time together. So, I got to ask you, we learned a lot of things. We tried getting it out of you last night. You did not break. It's like you were trained by the CIA. You did not break. We tried. But I got to ask with what I saw Palunteer foundry rearchitect and one of the things I told you originally why I became an investor is because of your speech where you redeployed 400 engineers and you said >> to the board of directors which is not an easy thing to do even if you founded the company we made $50 million this year in Ibida and we're going to make zero for the next three years because we have to re-engineer everything for the future.

5:10 >> Yes. I want to know specifically how the chip fits into this whole flywheel and give us really the insights behind this decision. >> And and let's also back up and and say you guys announced that you're working with a company to develop a microchip. >> Yeah, let let me make this very clear just to be clear. We're working on a microchip with a third party manufacturer who's going to put up all of the money to make the chip.

5:33 >> This is not going to affect our free cash flow. I know that's created some confusion in the marketplace. When you look at our business last quarter, we grew topline by 44%. Free of EBIDA by 56%, free cash flow by 73%. Yeah, I think we're going to continue to grow our free cash flow at very, very high percentages. This chip will not affect free cash flow. It will not affect our share buyback and it will not affect our ability to create cash to buy new cool companies. We have a manufacturing partner who's going to make it. We'll have another third-party company to buy the chips from them and host them >> and then we will use those chips on demand exclusively.

6:15 >> So, it's a very differentiated type of relationship. I probably should have been clearer about it online because I think it's created some major confusion in the marketplace. >> No, because the market sees capex, chips, all this stuff. So, it's a fair point. >> People saying, "Oh, they're going they're going to put all their free cash flow into making a chip." That is absolutely not the case. Why make the chip? Today we drive 6 to 700% return on marketing spend, 297% return on technology spend. The chip will speed everything up.

6:48 >> Okay, >> that speed will help us. What's our goal? I've been very clear. I ultimately want to get to 10 times return on marketing spend. How do I get to a,000% return on marketing spend? And how do we get to five to 700% return on technology spend? We do that by getting deeper and deeper into the infrastructure level in a way that doesn't cost us any money. >> Is this going to be part of the sovereign AI ecosystem as well?

7:14 >> 100%. This all sits on top of foundry. It's going to be in partnership with Palunteer. Their FTEEs are helping us all along. Well, Elias told us that you guys have developed a very strong relationship over the past couple months and the outcomesbased methodology that you both have when approaching enterprises. That's what makes this special. >> It's it's it's almost crazy when you look at a guy like Elias, you look at a guy like like Dr. Karp, Alex, and and me and we're just totally aligned. The organizations are totally aligned. Our FTEEs are now going into deployments together. Yeah, that's what he told us, right?

7:52 >> And it's been just unbelievable. >> Can you talk a little bit about the Neotron Nvidia partnership? >> Yeah, listen, we're going to run these inference models on Neatron in partnership with Foundry. I'm sorry, but it's on top of Foundry. It's been a very long day. in partnership with Fireworks AI. And you know, listen, I if in the first nine months of the year, we'll have now announced partnerships with OpenAI, Snowflake, Palunteer, Fireworks, and Nvidia. >> Yep.

8:22 >> So, you know, it it's it's >> we need to do some more. It's been a slow year. >> Slapping. >> Really slacking off now. >> We need a fifth announcement today. Yeah. >> Oh, god. >> Mr. Mr. Steinberg, I have someone else who actually introduced me to your company. >> Mr. Steinberg, Jesus, this is now I really feel old and formal. >> this person introduced me to your company and he has a question. So, I would I would love if he could ask a question right here.

8:48 >> Davis, >> good catch, Davis. That was very all day. >> That was a good catch. >> Okay. So, well, thank you for letting me be here and have the opportunity to even ask a question. my question kind of I want to probe into the Palunteer partnership a little bit. we know that Palunteer opens up many more doors beyond commercial and that's kind of what Zeta focuses on is the commercial sector and I know you have the Zeta economic index which tracks consumer data.

9:19 >> Yes, we do. >> But do you see a pathway into the public sector where yes, for example, Zeta might help the Fed? >> The answer is yes. >> Okay. >> Yeah, we're already working on stuff. >> Love it. I love it. >> No. Did you see my introduction to Karp today? >> I did. >> What did I say in addition to commercial >> country? He he may have said >> I said countries >> in my introduction. I said enterprises and countries.

9:45 >> And you may have hired somebody. >> Well, you guys track we hired. >> You may have hired somebody in the past couple of days that is very influential overseas and may be from a very large company that may know a thing or two about countries. Yeah, we're Listen, I I I see a public sector business for us. We're already building it and I think it's going to be something that's very interesting. >> Love that. I love how you're expanding, expanding fast, doing it with the right people.

10:11 >> It's great. >> It's It's an amazing journey to be on, honestly. >> I'm excited to be on it. We love having you guys with us. How was Benjamin's last night? >> It was awesome. >> I told you best steakhouse in Manhattan. >> No, no, no. See, that's We're going to both there and Peter Lugers. We're going to end the debate. is not I have to agree with Steve Luggers the day before the first time unbiased opinion >> better.

10:33 >> I'm just telling the 86 and Fort Charles are both pretty good too. >> So I have a question about open AI. >> Okay. >> As you know our group tends to speculate a little bit and we tend to dive into things much deeper than most people. And >> one of the things that we have been thinking about collectively is for OpenAI to reach a lot of the projections people are expecting. They have this real estate and if you look at Amazon they built a hundred billion dollar advertising business. Your eyes are lighting up right now out of nowhere over a two two and a half year period.

11:13 in or I think and other people think that in order for OpenAI to hit the revenue projections as expected of them for the amount of capex that they are allocating that they're going to have to utilize their retail space. And when you think about where Anthropic and Chat GBT from Open AI are anthropic is really enterprise level Chat GBT is consumer level. So are you going to be a little unfair? We already are serving ads through there too. So, we're serving ads there today. I think we're I I'll be careful here. Yes, we're serving ads.

11:48 It's a very meaningful and growing partnership and I think it could be very very big. But I think it's unfair to just call open AI retail. >> So, let me phrase that from a coding aspect. Anthropic has majority of coding and chatbt has just huge consumer. >> I think once again they I think they both have a lot of both. I've got to be a little careful. But but to your point, OpenAI has made the decision to go into advertising and traffic has not.

12:16 >> Right. >> So that's a major difference and we've I've said publicly that we are partnering with them and we are actively serving ads into Open AI. It's growing very quickly and I think it's going to be a very interesting partnership. >> And by the way, >> the Seno AI deal is going to be very very important there. >> David, thank you for your time today. Last question for you. What do you think, and you've spoke about this before, but what do you think the marketplace in general misunderstands about Zeta? I mean, this event is amazing. You've got thousands of people.

12:48 I think the the the the event and the company's brand has progressed so much over the past year. What do you still think people don't really understand about the culture of this company? >> I think first people think we're an advertising company, which which we've never really been. We were a marketing technology company. 60% of our revenue is subscription. 40% is utilization. You know what they call utilization this week? Tokens. Yeah. >> Right. I mean, we don't call it that >> with 120% net dollar retention, >> right? I I mean, you you gold standard is 100 net retention. We're we were at 120 last year. You could look at all the different metrics and and and we perform ahead and then we make a mention about chip and then all of a sudden everybody's, "Oh my god, they're going to spend all their cash flow." It it just some of the noise that comes out >> just makes no sense. Now, it creates opportunities.

13:33 >> Y >> because if people don't understand what's really going on, others do. The opportunity is there. >> That is correct. >> But what I would tell you is that we are building the next generation of AIdriven software company. We are going to build a $10 billion a year business at a 30% plus operating margin with the vast majority of that falling to free cash flow. And anybody who's betting against us is in the end going to probably lose.

13:58 But what I'll tell you is different moves on a day-to-day basis, week-by-week basis are not as relevant as how do we build a hundred billion dollar business and that's what we're working for. >> Well, I wouldn't bet against you, especially with what I'm seeing >> except on Luggers. >> Oh, that I'm not even betting. I'm correct on that. >> David Seinberg, thank you so much. >> Thanks, guys. Thanks. >> Thank you so much. >> Hello everybody. Welcome back to Basis Points. We are here live from Zeta Live 2026 in New York City. We are here with someone very special, Mr. Elias Davis of Pounder. Elias, thanks for sitting down and doing this.

14:33 >> Of course. Thanks for having me. Good to see you, buddy. >> And before we get started, Emid is making us wear the headphones and it is weird. Is it not weird? >> Yeah. Yeah. I I I feel very uncomfortable. But but anything for my guy here? >> Everything is amplified in our ears right now. >> Exactly. >> Basis points in the future. We'll have headphones. >> The biggest smile I've ever seen because it makes us uncomfortable. So makes it all better. He's like, "Steve's uncomfortable. We are doing this when we build the studio."

14:58 >> Exactly. Exactly. >> Elias, yes. >> I've known you for a while now. >> Yes. >> You are a rockstar pounder. >> You get things done. Steve and I have been covering Zeta for the better part of about a year now. Around November, December 2025, we got into it few months ago. One of the companies we've been covering for 5 years decides to partner with Zeta. Pounder doesn't really do that many partnerships, especially with companies in marketing intelligence. How did the partnership actually start? Yeah, it's a great question. first of all, thanks for having me. Good to see you guys. You, too.

15:29 >> how do you get all started? I I think I forget exactly who actually got connected or who David connected with originally. but in very typical Palunteerian fashion, thank you for the compliments. Luckily, it's not just me. Everyone at Palanteer is a rockstar. got a note from I forget if it was KK or or Karp or whoever that might be. and and and we were off to the races. I think David had originally got connected to to I forget exactly who, but had a couple cycles.

16:01 >> Yeah. >> Didn't exactly go where everyone intended it to go and then and I'm never going to forget it. I went to his office on Park Avenue. We sat in a room for 45 minutes and we walked out shaking hands sort of kind of with the details of the deal figured out. and then we were off to the races. I think he said on a podcast that we're tied at the hip. So >> yeah, my wife is a little jealous, but >> but it's been great. He's he's an incredible individual as you guys already know. and in very typical Palunteerian fashion, sure we'll talk about what the partnership and its foundation is all about. but ultimately it comes down to the people.

16:39 you've you've covered us, you know us super well. Obviously you know everyone at at our company. everything we do with a third party company, partner, customer, whatever it might be, it really starts with the people. Do we like them? Do we align with the same values, same mission? And every single conversation we had with David 100% aligned with that. And and obviously we saw Dr. Karp and and David on mainstage open the show up this morning.

17:05 they really really like each other and obviously that helps with with making sure the foundation's strong and things are kicked off in the right way. >> It's exciting. It's a seven-year partnership. >> Yep. >> And David Steyberg is known for ripping out and just redoing everything. Prior to 2020, he deployed 400 engineers to rip and replace the system, and now they're on Foundry. So, I can only imagine what this is going to look like. >> Yeah. Look, I I I think the beauty of of the first meeting we ever had was that there was no expectation that was set. And so I think very similar to what you just said, David is the type of human being who thinks from first principles, similar to the way that we do as an organization. and yeah, I mean through that 45minute meeting and I can sort of kind of walked you through some of it. the whole vision of what this partnership would look like was was sort of kind of orchestrated.

17:59 and obviously now for the last few months it's been a lot of hard work. from our team, our Ford deployed engineers, their version of Ford deployed engineers as well. and then obviously me and David running around doing what we do to make sure that this is as successful as as obviously it has been. obviously their stock has been ripping. Thankfully ours has as well. >> it's it's always nice when a company partners with Palunteer and the market genuinely recognizes the value that could be there. You know, >> I mean Palanteer may or may not went past 200 this morning. So >> I saw that. I saw that. Let's talk deeper about the synergies of the partnership. So Zeta is marketing intelligence. Palunteer is much more broader business intelligence at a at a very deep layer. one could argue that in this AI revolution, the the models are important, but the orchestration of the models is really what's important.

18:46 Dr. Corb was talking about this back in 2023. That thesis has started to play out. How do you see marketing intelligence from Zeta and their relationship with many customers in the Fortune 500 working with the integrated stack on Palunteer? Where does the where does the synergy lead to to business outcomes that are differentiated for customers on a marketing and a business side in the general operations that Palunteer works with with the ontology. >> Yeah, absolutely. So, so I I think I think the first question we had to ask ourselves in that meeting that we sat down for 45 minutes was what is this really going to be all about, right? We can we can do a bunch of press, our stock will probably go up, but unless there's strong foundation to the actual use cases and and and the groundwork we have to lay that makes this partnership strong that won't sustain itself long term. Right.

19:36 >> Right. And so I I think the the the question we really had to start asking ourselves is what primitive primitives between on Foundry are core to benefits that we can drive for Zeta customers. I I think if I distill it down to two main areas where the partnership focuses, one is the acceleration of of onboarding. obviously I'm AIT knows this super well but but the the data connectors the billions of dollars of R&D that that we at Palanteer have put into building Foundry and getting it to where it is today is obviously extremely difficult to replicate impossible to replicate some would say and so obviously that is a key part of this right the onboarding process the acceleration of that onboarding process for Zeta customers just accelerates the path to value creation Now touching on what expected value Zeta customers intend to see ultimately the foundational you know value proposition for Zeta is is is leveraging their data and Zeta's proprietary data that they don't sell that that you know hundreds of millions of users opt in for to drive marketing ROI. and so when you distill down the primitives and first principles of what foundry is ultimately it's the acceleration of go to market and or onboarding then go to market with data connectors ingesting all the data creating that ontology so that the zeta customers have a 360 point of view of where their data sits how they can approach different campaigns and then ultimately the the integration of that with the zeta cloud platform is ultimately what drives and accelerates the path to the expected 600 700 % >> ROI. Exactly. So, it's it's almost like if a customer wanted to sell a water bottle that was like a really cool water bottle, they need data from Zeta on who is this type of person maybe that goes to the gym often, maybe that's into these like niche water bottles that would actually buy this, but they also need the supply chain of how to build that water bottle and that a lot of that stuff comes from Palunteer's ontology.

21:43 So, do you think that's a that's a clear example of how like you need the marketing intelligence on who's going to buy it? you need the logistical operational intelligence of like where we're going to source the water bottle parts from. And putting that together is where you get a much better return for customers and quite frankly a much better return for for the for for the for the company that's trying to optimize revenue and decrease costs.

22:04 >> 100%. And actually I I unfortunately can't disclose the name of the customer, but I think this is like part two of what this partnership stands for. we're we're working together to go to mutual customers and Palanteer commercial customers to actually provide this offering to them. I'll give you a perfect example and I think you touched on this a little but if if we we pound on the commercial side started a lot of the use cases in global supply chain right and so if you think of a very very very large publicly traded consumerf facing product goods business obviously you can >> leverage Zeta's proprietary data and the customer's data to drive increase in ROI and user acquisition yes but ultimately you can't actually deliver that product to that end consumer after you acquire them unless you have visibility and unlock all the bottlenecks in that global supply chain which obviously is powered by us on our end which is why you know everyone's like you know go to market do we really do that ultimately everything happens at Palunteer because it makes sense for our customer if we can help drive incremental value to the bottom line to our customer in this case both on the marketing user acquisition side as well as the the supply chain it ultimately allows the acceleration of delivery of the product to the end consumer which obviously drives you know incremental unit economics for our business as well as Zeta's.

23:23 >> So what can a new customer expect? Palunteer revolutionized the RFP process. It revolutionized actually doing an implementation from what could take 6 12 18 months to several weeks. When you combine the Palunteer supply chain and Zeta marketing and how implementation now is Zeta service 51 out of the top fortune 100s. Yep. >> For those 49, what would the message be to them that aren't using it yet? >> Absolutely. So, I think I think I'm not 100% if Zeta sort of kind of took this from us or sort of kind of did it themselves. either way is fine.

24:01 But the idea here is like the actual go to market process is very similar to ours now, right? You do a small pilot boot camp, agent camp, whatever the thing might be within a quarter. How do you do two things in parallel? convince a customer to try it and have the technology slash the actual integration piece align with the process of onboarding go to market value creation. How do you do everything within a quarter? Obviously we're public obviously they're public obviously their customers many of their customers are public everyone wants to value you know that super well. Yep.

24:37 >> we're just helping make that happen. And so if you're a prospective customer for Zeta, I think that we have to think about it is do I spend a lot of money on marketing? Am I optimizing that spend am I utilizing all the data that I have to accelerate the economics and catalyze the economics for my core business. Let's try it out. And and it's not similar to the way we say this. It's not like let's try pilot 6 to 12 months.

25:08 throw hundreds of millions of dollars. >> It's an old way of selling software. It's done, right? >> It's done. It's done. And and I think I I I didn't catch all of the news and announcements that Zeta reported at opening this morning, but I think there's a lot of forward-looking perspective of new markets at Zeta in partnership with us are looking to break into to recitalize the market of what this new vision for software looks like which we're obviously very very excited to support them on.

25:40 >> Yeah. And it's, you know, Palanteer fundamentally changed the go to market approach for software. Fundamentally changed what it means for a company to be able to grow in particular, forget the topline growth of 90%, but the operating margins like you just don't get software companies that are this efficient. And I think the exciting thing for me and Steve when they partnered with Zeta was like, okay, Zeta's hitting the inflection point of operating leverage. If they had a pound partnership that could probably supercharge what it means, you know, rule of 180, but like to get those types of numbers, you really need the type of characteristics that you're talking about. Dr. Karp doesn't really go to these events and speak live on stages.

26:13 It's it's some He's a very busy man. He has a lot of things going on. He's running a half a trillion dollar company. So, it's obviously hard to get his time, but he came to this one. >> Yep. >> What is so special between Dr. Karp's relationship with David Steinberg that actually compelled him to to come to this event? >> look, I I I think I think it's not an artificial relationship. It's not transactional. I think ultimately I hate to say this but in corporate America people do business and sometimes most of the time it's transactional. You know Dr. Cart better than most people. he does things he enjoys. He does things with people he likes to spend time with.

26:51 the relationship is genuine. he was asked to do it >> and he was excited to participate and obviously you know we all saw it this morning. >> Very cool. >> It's absolutely incredible. Last question for you guys. Thank you so much for taking the time to do this. You you do a lot of stuff at Palunteer. when a partnership like when a partnership like this comes into place, what is your role? Like are you managing relationships? Are you like trying to understand the financials of it? How are you as a rockstar at this company working with other rock stars to make a rockstar deal happen?

27:25 >> I mean look, I I I think I think it comes down to the origin of every Palunteerian, right? like all of our jobs are to create value for our own respective organization and the customers that we work with, our partners that we work with. And so whether it's, you know, being on a bunch of podcasts and fireside chats with David, working on the go to market piece, to make sure that this partnership is successful and that obviously everyone is is extracting value from from the hard work that our teams are are working on overnight or around the clock. working very very closely with our with our four deployed engineers that are on site in Zeta's office collaborating on a lot of the hard work to actually make all of this possible. A lot of what we discussed this morning but it it it comes down to the same thing.

28:15 David and I I'll sort of kind of loop it back to where we started. he's an incredible individual. I look up to him a lot. I've spent a lot of time with him. I've added a lot of value to him. He's done the same to me. And that's what makes a lot of what this partnership is about very special for us as well as I think for them. >> Yeah. And that's how business should happen. You should like working with the people that you're working with.

28:36 >> Life is short. >> Life is short. >> Thank you for having me guys. >> Thank you. Thank you very much. >> Boom. >> Oh wow. Everything sounds better now. >> Oh >> It actually wasn't that bad. >> Thank god that's still rolling for you saying that. >> Oh my god. It actually sounds a little better now. Yeah. Can I get a clip of just when Ahmed said that at the end? >> Hello everybody. Welcome back to another episode of Basis Points. We are here live from Zeta Live with the one and only the man, the myth. I think we got to say he's a legend on Wall Street.

29:11 Ladies and gentlemen, Dan Ies. >> Dan Ies. Great to see you. >> How's it going, buddy? >> Hey. >> So, Dan, we met back in 2023 because you were the first Wall Street analyst. Is Isn't that crazy? the first guy >> and look at everybody jumped on the bandwagon now. >> The first guy on a institution that is responsible for tens of trillions of dollars to say, "Hey, I think Palunteer at $15 looks kind of compelling." you know, honestly, this year I think you were one of the first couple people to say Zeta is kind of interesting and you did an interview with Steinberg and said maybe this company is something that people should look at. what has it been like over the past seven months in terms of the progress you've seen from the company? Yeah, I mean, you know, and obviously as an as an advisor for for David and Zeta, look, I mean, my view is this in this AI revolution, there's going to be so many companies and I'd say obviously Palunteer being the first of them, but it's really about like the second, third, fourth derivatives that are happening across AI. And I think like if you look at like with Zeta, I think obviously the Palunteer announcement, which is so important.

30:21 Yep. >> And so many others where I think I think it's a good example of in the SAS apocalypse whether it's Zeta or so many the these other service now Salesforce service now Sal in it Adobe like software companies definitely have structural issues but you cannot just label like if you look like what Zeta does from a marketing perspective and how integral they are from an AI you know strategy customers they're not everyone that's here they're not going to zeta because they think that they're going away to some extent.

30:56 It just speaks them to spend more and more money, right, >> in terms of with with the Zeta platform as they embrace AI. >> So, let's talk about that what you just said. You know better than anybody. My biggest thesis for Palanteer was net dollar retention when nobody was talking about it and we had that conversation on basis points and I think the net dollar retention at that point was 146%. Maybe I'm wrong. Maybe it was 138. I don't remember exactly what quarter it was.

31:21 Yeah, it was >> it was somewhere right in that area. And you look at what Zeta is doing and you look at the 20 beating and raise quarters. You look at all the underlying metrics and you look at that net dollar retention at 120% right now. It still gives me Palanteer vibes from several years ago because it just looks like it's going to expand, especially with what they announced today. How are you looking at this? >> I think look for Zeta it's about install base. you're gonna have new co but it's like the opportunity for them is really and look and David they've laid out everything you know here at the conference and obviously a lot of the announcements it's just further monetization of the platform because look the reality is take all the customers that are here and so many other user conferences they're trying to figure out they have an edict from the board you have to embrace AI okay so like they spent whether it's like getting in line for GPUs data centers Whether it's on Palunteer, whether it's the hyperscalers, when it comes to strategically with customers, marketing budgets, analytics, who do you go you can't go to a hyperscaler for that to some extent. I think it's it just speaks to why like if you could say like a lot of their partnerships with some of the biggest tech brands in the world, that's not coincidental. I think it just shows they recognize the opportunity, but it all speaks to customers needing to spend on AI use cases. The use cases are going to be the key to everything we see playing out.

33:01 >> When it comes to the pounder partnership, pounder is like broad-based intelligence via the ontology. Zeta is like very hyperfocused in marketing. Where do you see the synergies there over the coming years on that partnership? I view it as like the engine is really Palanteer, right? But Palanteer that's not that's not who they're going to be. They need to partner whether it's Zeta on the marketing side, whether it might be other companies in the financials, others on government, you know, depending on on the different >> use different use case and projects.

33:34 Look, I think it's really Palanteer recognizing like sovereign AI to me is the key because customers have to have control of their own data. And if you look let's say let's say a Zeta customer. They're not they're not they're not just going to put that out to like a frontier model. Yeah. >> That needs to be within their ecosystem. And I think the monetization to go at it with Palunteer, look, I think that's like sort of the magical onetwo punch that we've seen play out.

34:04 >> And when you have that onetwo punch, we saw a gap come over not too long ago. Do you think this is the start of major brands recognizing that there may be a better way to do things than what they were previously doing? and part two of that the Athena OS. Do you think that that's the driver to get more brands like Gap who have a huge customer install base over to Zeta? >> I think Athena is sort of the Trojan horse like that's sort of the lynch pin to the whole strategy when you gap or other retail because I see it as someone that just follows like AI you know like around the US and globally.

34:42 So many of these customers have gone at it themselves. they felt like they could build something in ter right >> then all of a sudden you realize like I'm trying to build a coffee shop >> then amid sitting there in Starbucks with this cappuccino okay why would I build something here and I think that's what you're recognizing in terms of what the opportunity is what they've actually built in terms of the stack what what are your current thoughts about the Frontier Labs right now and the models I mean they're super important to the AI trade because they are a lot of the demand for the capex but at the same time you got this sovereignty open source stuff that's kind of competing with them. Like how do you resolve everything that's going on right now?

35:20 >> Look, listen, 5% of companies in the world have gone down the AI path. And I think as you start to see it all >> Oh, wait. So AI is not fake. >> Look, I know. No, but but it is so true. It's like I think I think part of what's happened even a lot of the bears that have called 10 of the last two downturns they're trying to figure out in terms of like oh these use case real what happens if companies actually don't build out data centers the themes accelerated >> but to your point the frontier models my view is like frontier models over time models will commoditize >> open AI and anthropic are the first ones that understand Well, they got to go after the enterprise.

36:05 >> So, I'm just not of view where it's like with it open source or things that you know whether it's Jensen or others, even Deep Seek in terms of what we see in China, >> the cheaper models get, the better it is for the AI theme, but you're going to have 3 to four trillion being spent over the coming years. companies that have financial institutions that have been so far down the AI path. They can maybe slow down some tokenization spending with the model players, but where are they going to spend it? They'll spend it with software companies, use cases, sovereign AI, Palunteer, others. I think that's ultimately where it's going. I think we're still in the second, third, fourth derivative of the AI trade playing out.

36:49 >> So, I'm glad you brought that up because I have a bit of a disagreement. I don't even think we left for dinner yet. So, you and I you and I both were we were talking about what we were in last. I'm like, I know what I've redone my thesis. I don't even think we've left for dinner. I don't even think we're at happy hour. >> But, but I but I I like the thesis because just take a step back. My view is consumer AI hasn't started.

37:13 >> Has not started. >> Apple we and just starting in meta just starting in physical AI start not even start. But that's why it's like we're in year three of what's going to be a 10 to 12 year build out of the AI revolution. I >> agree. >> And I think as that plays out, look, chip, we'll be in Korea next week, but it's like chip equilibrium at this pace doesn't happen till early 2029. >> What I've been saying to people is you have to look at the cloud buildout because there are companies and you made a great point with less than 5% of companies have gone down the AI rabbit hole. When you look at the onrem to off-prem off-ramp, >> it took 15 20 years and companies are still going through a cloud migration, the idea that AI is just going to somehow stop in a year or two is crazy.

38:04 And I think Dan's 100% correct that companies like Zeta, Zeta in particular with what they did today with Athena OS graduating from just the marketing to a full OS operating system that gives you everything predictable is going to be the next iteration. But also, this is not you can't even walk because of the crowds here. People aren't just here for the cappuccino and the fruit. Although the food is really good, >> they're here because in those companies, whatever the vertical is, >> they need to come up with their use case and how they're going to go out.

38:41 >> Yep. >> It just comes down to that. >> Yep. It really reminds me of AIP. >> It's It had It's so similar if Not th this last AIP. Well, I'm going back if you go back like two years. >> Two years. Yeah, it was like it was a couple hundred people and like you could see those early use cases with a couple clients and now it's become a lot bigger. Pounder's brand has grown. I mean, if there's a world in which Zeta keeps executing at the level that they're executing at and they start hitting those inflection numbers on free cash flow like you talk about so much with Palunteer, it can get exciting. Oh, think about how many people here are decision makers at their companies or direct links to the board.

39:19 >> Well, the thing I think that is so important in terms like who ultimately is >> like who's the crowd here? The crowd is not us. The crowd is CMOS. It's CMOS across the board or other sea level. >> Yeah. Because you think about all the breakout sessions they're having now. This is directed at CMOS and what we can do for you. But if you're a CMO, you can't just come out here like, "Yeah, conference was good. We're going to continue." You need to have answers how you're going to build out your AI strategy for your because guess what? If you're in advertising and you slow down and I'm your competitor, I excel.

39:56 >> Yep. >> No, it's like And I just think we we're getting to that point to where it is. >> Yeah. companies cannot stand still anymore because their competitors are not standing still and every board is asking those questions about how do we get a bigger piece of the pie >> but this is a barometer for the broader as we all three of us talk about the broader AI trade where demand's going where spending second third remember for every dollar spent on a video chip there's an 8 to10 multiplier across >> you know across the rest of tech and that's why like the bears when they're in hybrid ation mood. They can see AI in the spreadsheets.

40:36 >> Oh, they they just they get to the point where they don't understand that capex being spent can take two two and a half years to turn into revenue from the RPO that turns into cash from operations that becomes free cash flow. They're worried about negative free cash flow for a year or two, but investing is a long-term game. As a shareholder of the large companies, I want them deploying capex because it fortifies their moat and they are dictating where tech goes.

41:04 >> Vegas strip build out 1955. That's where we are. There's one strip. >> I love that. >> And guess what? If you don't build on the strip, >> somebody else going else you'll be in Reno. And the point is like that's >> And who the hell goes to Reno? And Reno actually is I will side Reno actually has like really good food under the radar and that's obviously where Tess and a lot of other tech companies are.

41:25 But the point is is that there's one Vegas strip one sphere. >> You just initiated your top five picks for 2027. Apple, Palenteer, Nvidia, Tesla, Crowd Strike. What do those names have that are standing out to you right now? I mean to me it's like when I think about the AI revolution and I think it all starts with the one chip in the world fueling the AI revolution led by the godfather Jensen you know in terms of what they're and I think the investors continue to underestimate earnings power for Nvidia y Microsoft it's their backyard on the enterprise New York City cab drivers bearish in the stock six months ago but if you see it continue to play out that stock could have a six or a seven in front of it I believe over next year then you look at Crowd Strike Pow obviously were another big huge fan of but surface error is expanding cyber security I think budgets could ultimately double over the next few years and of course look Palunteer I just think Palunteer is now going into the next phase of its growth frontier and it comes to everything that's happened on the enterprise >> companies where they are I think incremental spending if a company was spending 5% of their budget related to pounder and now it could be 10 to 15% and Apple, they're they're a toll collector on the AI highway, >> right? Tesla, you think robotics is on the way?

42:47 >> I think it's just this is a physical AI play that's right now in a transition from an EV company to what ultimately is going to be Optimus Cyber Cabs Autonomous. >> Are you are you upset Roboaxi hasn't really played out as fast as people want it to or do you think you think it's inevitable that it will happen? >> I think look has it been disappointing the ramp of robo? of course like you know it's like you but is a lot of that because of regulatory it's also they know like if they heard a squirrel on the road they'll have some regulatory you know assessment so I think part of it is that like to me it's a matter like it's a matter of when not if as they build it out and I just continue to believe by the end of next year there's over 80% chance that SpaceX and Tesla merge >> why why do you say that >> SpaceX is building themselves into hyperscaler It's all about data. Musk wants all the AI technology under one hood.

43:43 >> You could talk about circular financing all you want. He's doing it within his own ecosystem. And I just think the data moat that Tesla has >> especially even a lot of the crosspollination that goes on between engineers between Tesla and SpaceX. I view it like I said I think I would be shocked if that doesn't happen you know over the next 12 15 months. I have a question about Nvidia for you. It's actually now my largest individual holding. It's right past Meta and we've had A and I have had this conversation.

44:14 I've had a conversation with so many people. I'd love to get your thought on why it's held down. The only thing that I can come up with and the only real plausible theory is just the market psychology does not want it to become 10% of the S&P. I think also part of it is like there's other shiny objects out there like if you see what's happen like memory stocks even though I can say why is micro trans.

44:38 Times earnings that doesn't make sense. I think it's also like investors there's always that fear like what happens if big tech they have their own ships what happens they get marginalized that look but look look what's happened in terms of earnings this allows earnings blowout you're seeing the stock continue move higher we have $300 price target on >> 106% year-over-year growth and >> the big tech companies that are competing with them they can keep competing but they keep buying Nvidia chips which means their chips just aren't good enough >> look what Elon Elon is now supposedly going to exclusively exclusively to buy chips from >> but it would take if if I go back like when Apple took out Intel and they started building on chip that took years long time six seven year to actually do it easier said than done and I'm not saying at one point there is and I'm still bullish on AMD and obviously the broader trade but Nvidia's third rate chip is two years ahead of Huawei >> right >> and the crazy thing with AMD and I think Lisa Sue is one of the best CEOs what she's done with that company. Not many, maybe five to 10 CEOs could pull off what she's done. So, there's no disrespect there. It's an amazing company. I look at the numbers and I have it burned into my mind over the next two fiscal years where the consensus estimates on EPSes. There's no question AMD consensus is about 201% over the next two years, from the end of this fiscal year through 28. Nvidia's consensus EPS growth is around 130 to 135%. And the multiple on forward earnings for Nvidia is 11.6 times and AMD's is around 28.

46:12 >> Look, that's what I look to me Nvidia streets underestimating numbers 20 25%. Physical AI hasn't even started to kick in. Yeah. >> Which I could argue is going to be the strongest part of the whole growth story. And so take what I'm about to say very grain of salt because it is my assessment with my model that when I look at the growth rates they've done what's realistic on revenue with this fiscal year and the next four fiscal years my assumption is that they do about 1.74 trillion in free cash flow.

46:45 Then we know that they have and think about how crazy it is over a fiveyear period they are potentially going to do 1.74 trillion not billion trillion of free cash flow that may even be conservative to some people. Jensen has said that we have a mandate of 50% cash going back to shareholders. So, I put out a thesis saying that I think over the next four years they can raise the dividend by 20% a year and still be in a position where they buy back $710 billion worth of shares and still have $860 billion or so of free cash flow retained that they can now go make acquisitions, go make investments in other companies and become the Birshaway of technology. I don't see why anybody would discount what they are doing and discount their earnings. It's crazy.

47:32 >> Look, it's just as they continue to prove it out, the stock will reflect and the multi will expand. >> Dan, thank you for your time. Last question for you. What has it been like in your new role at Yorkville and how's it been over the past year? >> It's been awesome. I mean, we've hired probably 25 30 people. You know, we had the IPO of the IVAI, like the the Ives Ultra Fund last week, which is first public company invest in private AI tech stocks. Initiated coverage this week.

48:00 Look, it's exciting. It's about breaking glass. It's about branding ourselves in tech, energy, you know, and and really the build out of the AI revolution. It's and it's just been exciting. It's exciting time in terms of this fourth industrial revolution. It's just been fun just, you know, doing this starting off. >> Is this going to be the flagship fund or you have other big ideas ready? >> You got to get the popcorn out and see what happens.

48:22 >> Love it. Are you >> enjoying it every day as much as you did for the past 20 years? >> Look, I mean, I love my time like at Wedbush. Love my time at FBR. But this it just what I like about it it's building if you had like a wand how would you build your own bank >> and that's kind of what we've been doing you know so it's just like it's been fun and you know and everyone that comes you know that comes from other banks is just great cuz like they're betting on us too because they believe in the vision >> right Dan Ives thanks so much awesome great seeing you >> all right three two one >> it's a chicken parm crew >> it's the chicken parm arm crew >> from his restaurant that he just bought >> at Fiorillo's Cafe at Zeta Live. Baby Davis, >> that was actually the name. I don't own it though.

49:09 >> One day. >> One day. >> One day you'll be open. >> I'm not allowed to. I was I want to buy a pizzeria. I'm not allowed to. >> Dude, it would be so fun if you had a pizza. >> Little I'd be there every day. >> I won't call Little Stevies. >> Little Stevies. Yeah. It sounds like a nice little tally spot, right? >> Works. >> Davis is a good friend of both of ours. He's also the brains behind the operation.

49:28 >> He's also the brains behind. So Davis >> Davis is an OG Pounder >> strings. >> Davis is OG poundter. He I think a year ago introduced me to Zeta and a lot of people to Zeta and now we're here at Zeta Live. >> What has happened over the past year? >> It's incredible. A lot of changes. I mean a lot of new opportunities for me and just meeting people, networking, connecting, going to these amazing events, learning, actually delving into my passion, >> which is investing, stocks, research, >> everything finance.

50:02 >> How did you find Zeta? >> Yeah. >> I got lucky just like I did with Palunteer. I saw the name floating around on X and I decided le let's dive into this because I know they work with ads and marketing and for some weird reason I have this affinity toward ads. I've been screwed over on PayPal so many times and then I'm like, "Oh, they have an ad business. This is great. Didn't work out." And then I took another chance with Zeta, saw what they were doing, saw what they were becoming, and I'm like, "Oh, this reminds me of another company that I love." And so, I just started to do more and more research, put my thoughts out online, and I just fell in love with the the mission of the company. It's really interesting, you know, because when you brought it up, I didn't understand much about advertising or technology, marketing, intelligence companies, but all I cared about was the financials. For the first five months, I probably couldn't really explain what Zeta did, but the financials looked so clean. What did you see in those numbers that kind of reminded you of other companies you've analyzed?

51:02 >> Genuinely, the inflection point that they're they're almost at profitability, not right there. And that's what I like to look at when it comes to companies is are they profitable? Are they not? Are they doing the right things? Are they trailing towards profitability? And they've hit it in the past but lost it. But I think that was an election year. But I just saw the trajectory. I saw what they were doing. I I fell in love with the business and I'm like, "Okay, I'm going to take a shot at this."

51:32 So, you had the chance to interview Dan Ies and David Steyberg last year. >> It wasn't really an interview. I got to go. >> You got to sit down and talk to them and interview them. Let's call it what it is. >> Okay. >> So, what made you really get the conviction about it? >> it was when they released the Athena Athena demo online. I >> That was January this year, right? No, that was in October >> of last year >> of 25.

52:01 >> Okay. >> I saw that >> that's CES. >> Oh, that was January. >> That was January. >> Yeah, that was a little bit before. But I saw how they were basically taking data and making decisions with the data. >> And I'm just like th this is this is Palunteer but for marketing >> for for the consumer. >> And once I made that connection, that's when I that's when I got my conviction. That's when I'm like, this needs to be a big part of my portfolio.

52:29 >> But still, I so I want to double down on that decision because look, picking stocks is really hard. We've all picked stocks that we got super excited on, bullish on, and loaded the boat as they say, and it didn't work out, and we're either bag holding, have to sell for a loss. Like, that could have happened here. >> it didn't based on when you bought. But what made you be like, I need to make this like a staple of my portfolio?

52:50 I mean, you can say that it kind of did have that moment because it was 20, then it went back down into the low teens. It was it was genuinely >> You had to You had to keep conviction during that. What helped your conviction in low teens, especially during the SAS apocalypse? >> It was a little bit of stubbornness. I hate selling at a loss. I I don't want to do that. But again, it was the Athena connection with with Palunteer. I was if you if you find a company where they're taking data and making decisions that help another company, I just that that was my conviction. It's like this company is helping other companies make more revenue, >> more ROAS, return on ad spend.

53:37 >> Like why why wouldn't a company want to run to Zeta, >> right? They should capture more of the pie effectively >> pretty much. >> So we had some big announcements today. Yes. >> And you've been following this company for longer than anybody that I know. >> What were you most excited about hearing today? >> I mean, I was obviously hearing from Alex Karp and he was himself, so he went on all these tangents which which I loved, but I would you got Athena OS, you had the Nvidia, the microchip OS is probably the one I I understand the most.

54:15 because the microchip I still got to delve into. The other announcements I I have to delve into more, but definitely Athena OS just being the operating system of the marketing world. I think that's probably what I'm most excited for. >> What do you think about the crowd here? >> I haven't really paid too much attention to the crowd. >> He's been his own world. >> He's been in his own zone, baby. >> I get that. I well comparing the crowd.

54:41 I wasn't at Zeta Live last year, but it just it didn't have the same the same energy, the same excitement around it. It's like, okay, it happened. I tried to watch some of the videos on YouTube that they posted, but I just wasn't interested. But this year, it seems like they have all these new partnerships. They have all these new announcements, these new product launches. Like there's actual momentum. >> Yeah. >> Behind this Zeta Live behind them. So, we just had the pleasure of interviewing David and or as Emit would say Mr.

55:12 Steinberg. >> Yes. >> And was I supposed to say David? >> Yes. >> That feels weird, bro. Like, >> he has given you permission for firstname basis. >> I don't know. I felt kind of weird. >> He said that there was over $200 billion >> of decision-making power in the room. >> And something that I had said earlier was when I look at the crowd, I see not people like us. I see people that are in the marketing space, decision makers, CMOs, CEOs, CFOs, people that have direct links to the boards that can get decisions done. Maybe some are current customers, maybe some are potential customers, etc., etc. As a shareholder, I get excited because I see opportunity.

55:53 Of course, I I when he dropped that number, it's just like, okay, there there are very important people here that actually make decisions for the companies that they work for. And like you said, this event isn't for us. >> No, it's not. it it's a great honor to be here and be amongst them, but it it's the fact that there's what almost triple the amount last year that are here and it just shows the influence that Zeta now has that they can bring many more names to their events and it shows that they're expanding and doing the right things and getting these connections that they just didn't have last year.

56:35 >> Davis, you are a retail investor. I think you believe a lot in the power of being a investor that just does your own research and and builds your own conviction. What advice would you have to other retail investors who want to find the next Palunteer or Zeta? >> That it's a hard question because it's so easy just to click on a YouTube video, find a YouTuber, and just copy them. I mean, that's how I started and then I've got burnt many times doing that. I I would say find something that you're you're passionate about, but also find a company that is willing to go against the current norms that's actually wanting to transition and build something new and more effective and that's adaptive to current trends.

57:22 >> I love it. >> Love it. >> Davis, OG Zeta Investor, thank you for being on the show. >> Thank you. >> Thank you, Davis. >> Thank you. >> Hello everybody. Welcome back. We are here at Zeta Live with one of the OG Zeta content creators, contributors, investors. Ladies and gentlemen, we got Sam. >> What's going on, son? I feel like I haven't seen you. >> It's been a while. >> We haven't talked. >> It's been a whole >> 24 hours, I think. Yeah, it's been a long time.

57:50 >> Yeah, we had dinner last night with Sam. Obviously, a great guy. He's been on Basis Point before. You guys love that episode. Hopefully, he'll be on in the future next year if we have a new location. >> Well, we'll talk about that later. We'll get Sam to to stop by and bless us with some market coverage. Sam, what got you interested in Zeta two years ago? >> I mean, essentially, if we think about how AI is today or let's go back. Let's think about how AI was in back in 2023.

58:15 You would see chat GBT. It would be that green screen. Everyone remember that green logo that they used to have and you just ask it, hey, where's the nearest restaurant? It would tell you or it's like, hey, what what it was every it was all the data that you had six months and then prior, right? Right. And they never loaded it with new data. And eventually they started bringing that up in the head on the on the timeline. And now you could get today's news, the last 10 minutes news, and it'll sift through all the data that's out there, right?

58:41 It's all about the data, data, data. And that was a problem in the beginning because it was just too much to index, which is essentially what LLM do. They're indexing it on a three-dimensional spectrum and able to bring it to you quickly. And that's what Athena is essentially. And that's one thing that really attracted me was not the fact that they were doing that, but also because all the information and all the data they had was proprietary, >> right?

59:03 >> That no one else had access to the data they had. >> And that that took me a few months to understand. I think you as well, right? >> And it clicked when we asked David >> when he came on the podcast. Yeah. >> The light bulb in your head went off and you're like, "Okay, >> there's only a couple other companies that have more data than Zeta on a first party marketing basis. That's Meta, Google, Amazon, right? So, it's like, okay, hold on. This is a relatively small, unknown company that has 500 million people's data. The other ad tech plays are organizing infrastructure to serve the ad, whereas Zeta is using data that informs the ad. And that just feels in an AI world a lot more valuable, right?

59:39 >> It's a differentiator from them in TTD or whoever, >> right? Yeah. >> okay. So, you got interested because of that first party data. what has kept you in the story? I mean we can even talk about you know their financial performance. How you are someone who who who really understands how to analyze companies. What have you seen over the past year that's got you excited about their growth? >> Yeah. So I mean you probably already know how Palunteer was, how was where they're inflecting on the profitability, right? So one thing that we need to understand as retail investors and a lot of people do understand is that we have like a much higher risk tolerance where we can invest in companies that are pre that are before they're profitable negative gross margins whatever it might be. and you know we adjust our risk tolerance based on those factors and Zeta was like right on that point where they were literally going to be inflicting profitability and then therefore they're going to start doing it on a TTM basis very soon and we've like you mentioned like I mentioned Palanteer inflecting a profitability and that's when the massive S-curve happened SoFi it's when they went from like that doomsday $6 range they've been stuck in for so long they boom will go up to 30 yeah they're back at 50 bucks today unfortunately >> and Zeta was right on that point. Now, there had to be a catalyst, right? Cuz Wall Street already has their estimates.

60:53 They already know that this company is going to perform. They're going to be profitable. Great. What I think is the story that's today is advertising. Okay. >> Monetization of ads of monetizing your existing user base using ads. Data has data across 500 million plus clients, right? All this myriads of data put together. Are they able to come up with an image of each user that's on there that's using the platform? Of course, removing the PPI, right? So, removing all the private IP and all that information, but they've had a recent partnership with OpenAI. And one has to wonder because we don't have exact details. One has to wonder what is the thesis behind this partnership.

61:37 >> Yeah. >> Now, mind you, for the audience, this is a bit of speculation here because I don't know. I don't I'm not sitting in the boardrooms. I'm not makes I'm not shaking the hands making the deals and everything but I believe that open AI is going to be inflecting on profitability a lot sooner. >> Mhm. >> Through the use of ads. >> We already know Meta, Amazon, Google especially and there's Apple and Reddit and Unity and all these companies and TDD like >> they've they've been able to maintain very high gross margins because of advertising. When you scale out advertising, your costs dramatically get reduced because you're applying the same models.

62:17 You're applying the same methods for the thousands and millions and however many clients out there because all you're doing just copy and pasting, copy pasting, they're applying the same thing and maybe it's >> a high margin scalable business. Yeah, >> high margin. So, if we think about what OpenAI is going to do, they have the consumer database, they have the consumer base and Anthropic has the enterprise. That's pretty much how it works with these two frontier model companies.

62:38 How is Sam Alman going to bring profitability when his company is trading at like 10, 12, 20 times price of sales? Like what is he going to like pull out a rabbit out of a hat tomorrow and be like, "Hey guys, we just signed up double the world's population for our subscriptions and now we're going to be probably like, "No, that's not going to happen." In fact, I would think they doomed unless they were going to go the route of advertising. very highly scalable, high margin business within an already existing user base that they control for the consumer. So you ask ChatGBT, I'm not really feeling that good today. I'm actually feeling kind of sick, but my wife and I are pretty hungry, so like where am I going to eat today that serves my purposes? Yeah, it's going to probably send you to get some f whatever, but guess what? these these local shops that want their ads to be put in front of people, they pay up for that. They pay up for that real estate, that sellside platform, and it gets delivered. And who is going to put all this information together that already has this private information that is available to them with 500 million users plus >> potentially Zeta, right?

63:43 >> That's my thesis with it. And I think that when we see this happen with Samman because this is the only way opening out became relevant today. They have to become profitable an otherwise Anthrop is going to take the it's going to take the trophy. They're going to become profitable way more way before. But the question is this openi have an ace up their sleeve. I think it's Zeta. I think Zeta and Athena OS is the ace up their sleeve. And once Sam Alman comes in there and says guys, you know, we're actually be profitable a lot sooner than we expect. everyone's gonna look is Zeta $100 stock.

64:17 >> That's a very good point because when you look at you threw me off into just saying a $100 stock because I mean >> okay we can dissect that and I get it. I get it. But you know when I hear that it makes me perk up is Cheryl but you know what I was going to say is you look at Amazon Amazon has proved out your point because they did not have a advertising business and now you're at 100 billion plus run rate on it if I'm not mistaken and they built it out of nowhere in a very short period of time and when you think about the amount of users now you hit the nail on the head. Anthropic really is enterprisegrade clients that are really heavy users on coding. Chat GBT through open AI is more consumerbased using it as a smart search engine through the LLM asking it questions as you articulated is the perfect real estate where attention already is with eyeballs for them to not just >> upswing different businesses but also potentially if you say that you're not feeling well do you take a multivitamin but may have ask for multivitamin on the sides that has nothing to do with the actual ual chatbot. So I think that is probably where they are going and if they are Zeta fits in the flywheel perfectly because they already have the hook in.

65:33 >> Exactly. >> And I just I agree. Now what I want to ask you is you have a engineering background. >> Yes. >> What did you think of the announcements that we saw today from the keynote? >> I mean first of all your boy Alex Karp was on there. Dr. Alex Karp. I apologize. >> Yeah. Don't disrespect Dr. Co. >> I'm sorry, Alex. Dr. Alex, sorry. >> That was cool though, right? >> Oh, first of all, Mexican Coke don't fail around. You know, he had the Coke over there and I was like, I don't know if maybe this is a low-key advertisement over here, but I'm kind of craving some Coca-Cola.

66:10 >> You know, the first interview he did with CBC in 2021, he had the Coke with him. He always had the Coke with him. >> He likes Coke. >> Yeah. >> He he enjoys the drink. And a lot of people thought they had a I don't even know if Pouncer works with the company, but everyone speculated cuz he used to drink the drink so much. >> Well, I don't know. Maybe it's a little bit coincidence cuz they're serving Diet Coke and Coke and all those Coca-Cola products out here. I don't know. Maybe Dr. Alex Karp has a little No, I'm just kidding. Right. Like he's he's a character. That was the first time I've ever seen him live in person.

66:35 >> And he's the same as the videos, right? It's not that different. Yeah, >> he he doesn't he doesn't show up too often, you know, because he's busy. He's resolving the world's problem on Sovereign AI. like he's a busy guy, right? >> Athena OS. >> Yes. >> What are you thinking from an engineering standpoint about what this actually means for companies? >> I mean, the angle here is, let's be honest, a lot of these companies have their own LLMs or they have their own OS, but the way that they're layering this on top of the already existing platform they have is like those demos that they showed us, it it it kind of blew my mind. Like I was just looking at thing I'm like oh my goodness it >> it looks legit. It looks legit, but the first thing that runs through my head as an engineering background is this is going to require a lot of compute, right? I'm going to be realistic here.

67:24 Okay, I don't know who Zeta's cloud provide is. It's probably multicloud, cloud independent, whatever. It's going to be a lot of money, okay, to do all this. But they're on the software layer. So, they're not building data centers. They're not dispensing hundreds of billions of dollars in capex. They're on the software layer. They're renting out the compute and they can be very strategic with how much compute they need. They can get spot ines and AWS. They can do all the stuff to decrease their cost because they are a software model. And if they're already profitable on this end, when you scale out Athena OS, you're already providing it to an existing base of users. You're not going out there and acquiring new leads and clients. You're you're cross-selling to your existing clients.

68:10 And this is what they did with Athena when it originally came out is that they rolled it out very slowly across their clients. The thing is that they that Dr. Alex Car was mentioning earlier was that he helps his business helps people lower their multiple while their multiple goes up. >> Right. >> Right. And it's that controversy. It's like Palanteer is so expensive. This stock just keeps going up. It's like well because they're a very unique company what it does. I think Zeta is that company that's very unique in what does and it's mostly driven by the fact that all their data is proprietary.

68:43 >> They don't lease out their data to third parties like Ramp does like a lot of these other companies do. It's all inhouse, right? It's not a walled garden because they don't actually sell ads on their own platform, but they provide that opportunity for a lot of people to get data that's not available anywhere else. Like who else? There's companies that could do that, but at this scale, OpenAI could have partnered with anyone in this aspect, >> right?

69:06 >> But they went to David Steinberg. Hey, let's do some business. >> No, same thing with Palunteer. I mean, Palanteer doesn't do marketing intelligence partnerships often. We just interviewed Elias Davis who is kind of in charge of getting that whole set up over the past couple months and you know, the way he's describing why both companies are working together. They're trying to deliver those outcomes for customers that Pounder care so deeply about. >> Yeah. you know, if if you have a Zeta from the marketing side that can really make it special. I mean, maybe $100.

69:34 Isn't that crazy? >> I, you know, I don't want to get ahead of myself, you know. >> No, but outside of the stock price, it's more so just can, you know, we're all in this business as financial influencers, as it says on our badges, of trying to find the next best thing. And part of that is obviously the stock going up, but part of that is is there a reason for the stock going up? Because GameStop and AMC can go up >> and it doesn't matter. And we're not in the business of talking about those companies. All of us I think have an audience have some level of respect and and a community because people are curious about our insights on new and emerging companies and you know given all of us know about Palunteer when that partnership happened with Zeta it was like okay we were already looking at them now we're looking at them deeply this event reminds me of AIPCON I it's a or even Robin Hood summit to an extent who knows where this can go in the future. I'm going to make a prediction.

70:19 And you start going through the numbers and you start thinking about and I asked David last night in front of everybody, does this mean that you guys are going to have to revise your 2028 guidance in the next slide deck? And he just gave us a smile. He didn't confirm or deny. And I'm going to say that looking at the crowd today, and we hit on this with Dan, that it's not us. >> Yeah. This crowd is CMOS. It is chief of staffs. It is people who have direct lines to the CEO of the company they work for and the board of directors. and they're gonna leave today hopefully as amazed or more amazed than I am because they actually are in the business >> and understand what the potential for their business implementing Zeta >> will do for them and over the next several months I happen to think that we can see 51 maybe get to 60 of the Fortune 100 companies and I think that we can see the customer count grow substantially over the next year because these types of things do not happen overnight. These types of things can take months, maybe even a year or so for decisions to be made. Maybe in this environment, it gets a little bit quicker because of the huge ROI heading into midterms, heading into the primaries and a presidential election cycle where if you're going to get the best bang for your buck, you better implement something before summer 27 because that's the super cycle. that's their Super Bowl of ad revenue because that's the cherry on top of everything that happens with sports and pop culture and everything. So I think that Zeta will have to revise the numbers because we have heard David Steinberg say the Palunteer numbers what they expect on revenue on the top line is not added in the guidance because it would have skewed it too much. Y >> and then coming out of this event and looking at I mean there's 3,000 people here and the majority are people that are in the business. It's not employing little boot camps and workshops very Palanteer-esque. I mean a lot of the synergies of the theme of this event today have been like what is the what is the relationship with Palunteer and also are they trying to take the Palunteer playbook which by the way Pal redefined how to sell software.

72:44 >> If Zeta is selling software taking the Paler playbook I think is a pretty good idea. is not a conference for their employees. This is a conference for their current customers and potential customers to get a better understanding of what is possible with data. And that is the most important thing that I'm coming away with from this because the potential is so much over the next couple of years. >> Yeah. I mean, also it certainly helps that software has been doing pretty well in the wrong three.

73:14 >> When we had the SAS apocalypse, what were you thinking about? Because you've worked in software your whole life. So what was your me mentality during that time? >> I mean there's no apocalypse, right? But the stock market draw down is real. You know, I'm not going to discount and buy Adobe from 400 all the way down to 200. You know, I tried to take a stab at it at 330 and it went to 350 and then it drew down again and I cut it with a minor loss. Like you already know me, my swing trading, I have stop losses, parameters that I go by. Same thing happened for Service Now. You know, I bought Service Now at $87 and I set my stop loss as a new low. never hit it.

73:48 Not service now at $135. then I've I have core positions, right? Rubric at I was just showing I was just showing someone the chart of Rubric and it was like he asked me like what's my average in Rubric and data security company, right? And I went back to like a YouTube video that I did on Janu June of June 29, 2024. The company went IPO a month before that. >> Wow. >> There's like this lame YouTube video.

74:13 Like it's kind of embarrassing. I'm wearing like a big headset. It's just it's so lame. But I >> You mean like the ones that made us wear for the other interview? >> Oh, that's pretty interesting actually. We actually have those over here, but we kind of don't need them because we're like sitting in front of each other. So, but we'll see. But, >> you know, I mean, finding these companies early and sticking to it regardless of all the >> craziness of the market out there. You did it with Palunteer for a long time, how much crap you took from people. And I I didn't experience Palunteer in that way. but I felt like I experienced Zeta in that way because I know you don't it's in I don't want to talk about the stock price but it meant so much to sit through all that draw down and finally come to fruition because >> you would have people with slander saying all this stuff with the influencers talking about Zeta. It's like oh you guys are just trying to provide ex liquidity and stuff. You know I just hearing the craziest stuff and now now nothing >> nothing >> they're all silent.

75:09 >> Sometimes you got to go through that though. Sometimes it's better >> to ride it through a draw down because it shows you actually believe in the company and you're not just in it for a trade. >> Yeah. And you know what? I don't have too many core positions, but this was one like I literally didn't I I had no worries about it and like look where we are. We're at $33, $32 today. And I still remember you it was just like a few months ago when Palanteer went to $105 before that earnings, you know, and it's like what did you think Alex Karp was going to do over there? You think he was going to miss the top line, miss the bottom line, reduce guidance. No, he's going to kill it. It just depends on where we are in the software cycle, right? Palunteer is the AI for software.

75:47 Nvidia is the AI for hardware. That's just how it goes. And you can't it it's always going to have a premium as long as AI is relevant today. So when I connect that to Zeta, is it part of the theme? Yes. Is the company inflecting a profitability? Are they profitable? Yes. Are they expanding margins? Yes. Are they accelerating growth rate? Yes. Are they expanding the bottom line? Yes. Those are the those those are the check boxes you need to see a stock go up like we've talked about on on your stream last Wednesday.

76:15 >> Yep. >> You have to have bottom line growth acceleration in order to see your stock go up because ultimately Wall Street analysts look at your modeling and they see those numbers and they model them out based on what their projections are. And if they come in and they say, "Yo, you know what? Our projection is actually higher than that." Wall Street says, "Oh, well then your price target is no longer 40 bucks. It's 45. No, wait. Now it's 50. Now it's this cuz all this news comes out. That is essentially what pushes stocks up.

76:41 >> Yep. >> And is the story getting better? >> Yes, it is. They're very relevant today. >> And let's move away from stock price for a moment. Talk about market cap. Yeah. >> This is still a company that's under $10 billion market cap. So people may look at a chart and see, well, this thing's run 90% 100%. Did I miss it? >> And my answer is, what do you care what the share price is? You should care about how it's being valued, where the inflection points are, what the market cap is, and what is a reasonable future valuation if and when they deliver on what the expectations are. And >> that's really all that matters.

77:20 >> That's all that really matters. >> Yeah. >> Yeah. Stock prices take care of themselves, but like all of us are here because we actually believe in the company. Exactly. >> And >> I don't think that they would have invited us here if we didn't actually believe in the company. >> Yeah. and they see like how many shares we have and how long we've held it. I mean, you know, >> Yeah. Like like well I think Seyberg just he's very he's on Twitter. He like sees everyone posting. So, you know, he cares that retail cares. And you know, this has been something I've been talking about for a long time. Like I think if you're a CEO that wants to get more publicity for your company, JP Morgan and Goldman Sachs are not the best way. They have a lot more money than retail. They have a lot more influence than retail on institutional funds. But the people that are actually be advocating for your press releases and your videos and post funny memes about you like internet culture. You've got to embrace that. Karp embraced it.

78:08 >> Vlad embraced it. You know, like the more CEOs that Jensen has started doing tons of podcasts with random people. I mean, it matters. >> Noto is embracing it. >> Yeah. >> So, >> last question for you, Sam. markets in general, like what are you thinking about 2027? >> Honestly, man, I'm seeing oil go back up. I checked this morning. I was I always watch CNBC was getting ready in the morning. So I was seeing it and I'm just like I got to go to Zet event. I can't look at this stuff right now. Like >> it's annoying, right? Because we're so excited about this event and then the macro is so weird. Like >> so bad. Oil is back in the WTI like 91 92 back from the 87 range. Rates are back at decade high multi-deade highs and semiconductors are drawing down and everything. Do you care that much about all that going into 27 or are you just focused on fundamentals, buy good companies, and >> you know, at this point, the market's still near alltime highs. Like, you can't deny that Meta is green today, at least last time I checked. You know, there's a lot of mega caps that are still staying afloat today. And that's usually my warning shot that's out there. When the mega caps are below the 50-day moving average, okay, maybe we have might take cover. And that's what happened before January, right? Apple was drawing down. It was below the 200 day moving average. Amazon's below the 200 day moving average. They were all performing so bad and that was your warning shot, right? And that eventually led to the bottom in the beginning of April, late March. I just don't see that right now. I don't I absolutely don't.

79:29 Yes, I see oil back WTI back above 90 bucks and I see rates all the way at multi-deade highs, but like you look at the indices, people are like, "Oh, let's continue buying Meta. Let's continue buying Nvidia. Nvidia is just two 3% away from its alltime highs." How do how can you predict a disaster coming? >> You can't. Well, let me ask you this. Am I going to have to make a new apology video? Am I going to be proven to be a liar once again? Are we going to hit S&P 8,000 this year or not?

79:57 >> This year? What were we like 300 points away? >> Yeah, pretty much. >> Yeah. Yeah. Because if we are coming into some of those bullish periods of the entire year, of course, we have earning >> eating season. Yeah. Christmas >> eating season. Like >> I mean, >> do we Sam, do we get to 8,000 or not? I think we do because >> Oh, so I'm not going to be a liar maybe. >> Yeah. July was supposed to be the most bullish month in the entire year.

80:23 Such a bad month, right? So that would only make sense that >> unless we're going to have a bare market, which I don't think so, you know, so I don't want to say the B- word. I did say the B- word. >> Unless that's going to be the case, that should mean that mean reversions in play. Semiconductors are running markets at all-time highs. Like all-time highs are not bearish. >> No, >> they're just absolutely not bearish.

80:44 Like what? Yeah. Michael Bur spent so much time trying to call the top when he could have just >> Wait, didn't he say sell in 2023? >> Yeah, he said sell in. And then he he said he was wrong to sell. But then now he's saying sell again, but he's been saying that >> well he just said that the market is in its first stage of denial which is >> or first stage of grief which is denial.

81:01 Yeah. >> And that this will last 6 to9 months before it all collapses. >> I mean we'll see >> collapses. Sure. So >> the amount of cash from operations being generated from these companies and people actually think that this is going to collapse. It just doesn't make sense. Yeah. >> Can you imagine what would happen if all the guidance for free cash flow continued to go negative for a lot of these medap companies which is essentially the reason >> let it I hope it does for the next year or two.

81:26 >> What what if Mark Zuckerberg comes out next quarter probably not this quarter maybe not the quarter but at some quarter near-term in next four quarters and says hey guys we're actually looking at things picking up over we believe free cash flow bottoms. >> as as long as >> as long as that does not come on the heels of we are cutting capex, the market rips higher. >> Well, capex doesn't matter if you're printing more cash than the amount of money.

81:52 >> But that's my point. >> As long as you are not going to say we are reducing the capex spent because that proves the point that capex spent today actually turns into cash from operations tomorrow. >> That's the thing is that they're still going to spend more money in capbacks. It's still going to be the rate of growth won't be as much. >> The rate of growth. Once that decelerates, 2027 accelerates, 2020 accelerates again. 2029 is expected to decelerate.

82:15 >> That's as long as the dollar amount is more, that's all that matters. >> What if they say 2028, we're actually guiding down. We're still going to grow capex. We're guiding down. Fine. >> Oh my goodness. Meta to a,000. >> Yep. >> That's fine. >> Well, all the hypers scale is going to fall low, too, you know. So, >> and it's going to happen because at some point it's inevitable that that conversation happens. And if you look on a forward basis, I don't care. I've been saying this for a while. This is not an expensive market when you have on a forward basis the combination of Nvidia, Meta, Amazon, Microsoft, and Alphabet trading under 20 times earnings.

82:49 >> You can't you literally can't say that's expensive. >> It's it's it's tough to say. It's tough to say, but I'll tell you something. There's a reason why Jensen Wong's out there making partnerships with software companies for AI models. We saw Zeta today. Well, maybe he thinks it's a software monetization layer. I don't know. He's preparing himself. Nvidia is the major winner of this whole thing and he's going to make sure he's well open. They don't just create GPUs. They don't just create serverracks NVL72s or anything like that. They also have the Neatron open source model. A lot of people want some of that cake.

83:18 >> Oh yeah. >> David got himself some of that with the AIM model. So >> Sam, thanks so much. Appreciate it, man. >> Thank you very much, guys. >> Thanks, Sam. Appreciate it.