C3 AI's Billionaire CEO on How AI Will Change Our Lives | At Barron's

Summary

In an insightful interview, Tom Siebel, CEO of C3.ai, discusses the evolution of his enterprise AI software company from its inception in 2009. He highlights its role in optimizing complex industries like energy and finance with 90 AI applications. Siebel emphasizes the transformative impact of AI on various sectors and shares his bullish market outlook. He candidly addresses C3.ai's stock performance, the company's strategic focus on market share over short-term profitability, and shares personal anecdotes, including a dramatic encounter with an elephant during a safari.

Takeaways

• 🚀 C3.ai is an enterprise application software company that focuses on AI applications, with a history that dates back to 15 years ago before major cloud providers and GPUs were widely used.
• 💡 The company was founded with the vision that the future would involve elastic cloud computing, big data, the Internet of Things, and predictive analytics, which led to the development of a comprehensive software stack.
• 📈 C3.ai has developed 90 enterprise AI applications addressing various industries such as utilities, energy, oil and gas, defense, and financial services, giving them a significant market advantage.
• 🔭 The company's early focus was on the energy sector, optimizing the power grid's value chain and enabling safer, cleaner, and more reliable energy delivery with lower environmental impact.
• 🌍 An example of C3.ai's application is Shell, which uses the software across its entire value chain, from predictive maintenance to refinery operations, resulting in a significant economic benefit.
• 📊 The stock performance of C3.ai has experienced fluctuations, initially surging post-IPO due to market hype, then cooling off as the company transitioned its pricing model, and now showing signs of growth as the market recognizes the value of enterprise AI.
• 🌟 Tom Siebel, CEO of C3.ai, emphasizes that the AI application software market is a multi-trillion-dollar opportunity, and C3.ai aims to establish a clear market leadership position in enterprise AI.
• 🛠 AI is transforming every aspect of life and business, from communication and job performance to medicine, product design, manufacturing, and knowledge work, as highlighted by Tom Siebel.
• 🤖 Tom Siebel praises Microsoft's use of AI, particularly in its productivity tools, for enhancing user experience without requiring them to have data science expertise.
• 🏆 Siebel discusses the importance of assembling bright teams to help governments and corporations use information technology to improve services and products, which he finds fulfilling.
• 🦣 A personal anecdote shared by Tom Siebel is his encounter with an aggressive elephant during a safari in Tanzania, which resulted in severe injuries and multiple surgeries, demonstrating his resilience.

Q & A

What is the primary function of C3 AI?

C3 AI is an enterprise application software company that provides a software stack enabling companies to design, develop, provision, and operate massive scale enterprise AI applications across various industries.

How did C3 AI start and what was its initial focus?

C3 AI began 15 years ago with a vision for the future involving elastic cloud computing, big data, the Internet of Things, and predictive analytics. Initially, it focused on applying predictive analytics to the power grid value chain, optimizing energy delivery and carbon footprint management.

How many enterprise AI applications has C3 AI developed and what are some examples of their use?

C3 AI has developed 90 enterprise AI applications that address various value chains, including utilities, energy, oil and gas, defense intelligence, consumer packaged goods, and financial services.

What is an example of a company using C3 AI's software and how does it benefit from it?

Shell, a nearly $400 billion business, uses C3 AI across its entire value chain for predictive maintenance, hydrocarbon loss accounting, production optimization, and refinery operations, resulting in $2 billion a year in recurring economic benefits.

How has the perception of enterprise AI changed since November 2022, according to Tom Siebel?

After November 2022, the world recognized the importance of enterprise AI, leading to a hype cycle. Tom Siebel believes this interest is not ephemeral but legitimate, as the market potential is significant.

What was the initial stock performance of C3 AI after going public, and what changes affected its growth rate?

C3 AI's stock opened at $101 after pricing at $42 and quickly rose to around $190. However, after changing the pricing model from subscription-based to consumption-based, the growth rate declined significantly before recovering and accelerating again.

Why does Tom Siebel believe that the current AI application software market is not a flash in the pan?

Tom Siebel sees the AI application software market as a multi-trillion-dollar opportunity, with C3 AI having a significant first-mover advantage, which he believes will lead to the establishment of a clear market leadership position.

How does Tom Siebel view the impact of AI on various aspects of life and business?

Siebel believes AI will change everything, from communication and job performance to medicine, product design, manufacturing, and entertainment. It will enhance and accelerate all aspects of life and work.

What is Tom Siebel's perspective on the influence of companies like Microsoft and Open AI in the AI market?

Siebel appreciates Microsoft's use of AI in its products but does not believe that any single company, including Open AI, will dominate the market. He suggests that the real winners may emerge from lesser-known companies.

What is Tom Siebel's opinion on the current state of Silicon Valley and its relationship with Wall Street?

Siebel sees Silicon Valley as being busy with a hype around AI, where many companies are rebranding with AI stickers. He criticizes analysts for not conducting thorough research and for swinging between trends of prioritizing market share and profitability.

What personal motivation drives Tom Siebel to continue leading C3 AI, and what is his philanthropic focus?

Siebel is driven by the enjoyment of building companies and working with talented professionals on difficult problems. His philanthropy focuses on education, scholarships, research, public health, and homelessness.

Can you summarize Tom Siebel's encounter with an elephant during a safari in Africa?

During a walking safari, Siebel and his guide were charged by an elephant. The guide missed a shot, and the elephant attacked Siebel, severely injuring him. After multiple surgeries and a long recovery, Siebel was able to walk again and continue his active lifestyle.