00:00I want to get straight into it with you. Something you said in the last year, FOMO, was going to drive investors to make some mistakes.
00:07Are you seeing some mistakes being made?
00:08Oh, in the venture capital community, for sure.
00:12I mean, venture firms are just piling in into any AI story they can.
00:19And the valuations for these young companies that we're seeing are astronomical.
00:24Now, on the flip side, we do believe that AI will be transformational.
00:30And we're all in from an enterprise software standpoint.
00:33But the FOMO being in any AI deal as early as you can in the private markets is pretty remarkable.
00:40Why is software immune to the overpricing that you see in the hardware side of the AI story?
00:46Well, now it's kind of like software is extremely out of favor, right?
00:51You see really important software companies being down 30 percent year over year.
00:57The free cash flow multiples have plummeted.
01:01And I think that is a big problem of understanding what a software company does.
01:09AI will disrupt a percentage of software companies.
01:13Less than half is what we think, but it will be disruptive to many of them, especially if your core competency is technical.
01:23AI can disrupt you.
01:24But what the market really, really needs to understand and get away from the generalities is an enterprise software company is about its domain expertise.
01:36Go ahead.
01:36Just real quick here, how much are you looking at the United States as really still being the epicenter for a lot of this creation?
01:42It is.
01:43It is.
01:44Look, we have a very fast-growing European buyout business in software.
01:49We find there are great values, great opportunities for improvement.
01:53But software is a North America business.
01:56It still is.
01:57And that's where we find trillions of dollars of opportunity.
02:00So what do you make of all this Diversify from America stuff that we've heard this week?
02:03Is it even possible?
02:04Can you get the kind of scale, the size deals elsewhere?
02:08It's really difficult.
02:10And, you know, this week I got a chance to catch up with many of our large institutional investor partners, and they're steady in the U.S.
02:19All of them have told me their allocations to U.S. are intact.
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