The Strategic Connection Between IoT and AI, Plus Measuring Real Innovation

Gina Bartasi of Kindbody, Orlando Bravo of Thoma Bravo

Last week’s tech earnings were action packed, and hold some important lessons for investors navigating the markets from here.

A few days ago I talked to the CEOs of C3 AI and Samsara, which have stock tickers AI and IOT, after their reports. Both stocks had big moves after earnings. The stock move part is interesting in part because these are sort that investors were bidding up to ridiculous valuations when they first came public, and investors have been more recently trashing because the companies aren’t yet profitable. But once you get some distance from the hype and take a close look at what the businesses do, you can make a more sober approach.

C3 especially has been volatile. It spiked at the beginning of the month on the AI rush, then slid down again. Last week it went from $23 to start the week, to $21 just before earnings, to $25 right after, to $28 to end. So, 33% trough to peak.

CEO Tom Siebel joined us on CNBC Overtime after the earnings release and before the call, and I quizzed him about overall demand and the state of consumption trends. We also had him respond to comments from a short seller who accused C3 of shifting its name business model to fit trends (it used to be called C3 IoT), an accusation that I actually find hollow. It suggested that the short seller was either trying to capitalize on other people’s ignorance about how industrial AI works, or betraying his own.

For AI to work, it needs good, diverse data — and that has to come from somewhere. Meanwhile the idea behind IoT (the Internet of things) is that we can collect data closer to the fundamental pieces of the business itself. For example, cameras in a retail store can watch the shelves over time and report data about which items take longer for customers to find. Sensors in a piece of farm equipment can capture changes in temperature or noise that tend to precede a breakdown. That’s the sort of data AI models can use to come up with suggestions for an improved retail display system or predictive maintenance schedule. In other words, IoT feeds AI.

Samsara CEO Sanjit Biswas backed up that view. Samsara’s technology tracks trucks, manufacturing floors, and equipment, providing data that can help customers save money.

Meanwhile I talked to several other companies last week about how AI actually creates and enhances business models. Snowflake CEO Frank Slootman told me it’s not yet clear how large language models will do that for every kind of business. But I started to see some hints.

I spoke with Duolingo CEO Luis von Ahn about his plans to use ChatGPT for a new premium subscription that will teach language through AI-driven conversation. I spoke with Verra Mobility CEO David Roberts about the potential in the data he’s collecting on traffic safety. And Okta CEO Todd McKinnon is working things from the other side — OpenAI became a customer of his, using Okta to handle the logins of the millions of people signing up to try the service.

At the end of the week I also spoke with Thoma Bravo Cofounder Orlando Bravo, who gave perspective on all of these moves. We ran about 9 minutes of it on CNBC, but I’ve got the full 20 streaming on Fortt Knox.

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C3 AI CEO Tom Siebel Joins Overtime on Earnings, Before the Call

Samsara CEO Sanjit Biswas on the Quarter’s Results and Strong Demand

Snowflake CEO Frank Slootman on the Difference Between Bookings and Consumption

Verra Mobility CEO David Roberts on the Quarter’s Results and Continued Travel Strength

Duolingo CEO Luis von Ahn on Customer Loyalty and the AI Strategy

Okta CEO Todd McKinnon on Expanding Identity Technology and Disciplined Growth