00:00Akamai CEO and co-founder Tom Leighton joins me now.
00:04This is exciting stuff, and I mean, it feels like a game changer.
00:06How much of a game changer is this $1.8 billion cloud deal?
00:10It is exciting times at Akamai, and of course, it's a very good deal for Akamai,
00:14but I think the importance is it really validates our approach to cloud
00:17and supporting and securing AI.
00:20And by the way, you said it was a leading frontier model.
00:23Any hints as to who that might be, Tom?
00:25No, no, I can't talk about that, but actually we have a very strong pipeline
00:29of a lot of the world's biggest enterprises,
00:31including some with very big cloud needs,
00:34and they're very interested in our distributed approach to compute
00:37and enabling agents.
00:39So what is sort of the pitch for you versus kind of one of the big,
00:43like AWS or whatever cloud providers?
00:45Why go to Akamai instead of one of them?
00:47Yeah, it's a great question.
00:48In fact, hyperscaler companies are all customers of Akamai.
00:52You know, we operate the world's most distributed platform,
00:564,300 locations for our servers, 700 cities, 130 countries.
01:02So we can get our customers' applications close to users,
01:08and if it's close, it's fast, and it can scale.
01:11It's where you want to be doing the security,
01:13and now we can enable the compute there as well.
01:16You said the security.
01:17That's interesting to me because we're seeing in this new age of AI
01:20all of these security threats.
01:22What difference does it make having something closer by?
01:24You want to be close by the threat, the attacks.
01:29Today, the problem is the attackers are using AI
01:33to take over all these defenseless IoT devices,
01:38turn them into bots, and launch massive attacks.
01:41And the only way to stop that is to intercept that traffic
01:44right when it gets onto the Internet.
01:46And that's why we deploy our security services in 700 cities.
01:50So as soon as that bot comes on board, we can filter out that bad traffic.
01:55So one of the things that I've been finding interesting lately
01:57is just how expensive some of running these AI models are,
02:00the huge amount of inference costs.
02:02We learned last week that Uber blew through their entire year's budget
02:06in just about four months' time.
02:08I wonder what the solutions are for that kind of thing,
02:11and if Akamai, for example, presents a solution
02:14to just how expensive it can be for these companies to run AI models.
02:18No, it's a great point, and one of the keys is to run your agent
02:22or your application or workload on the most appropriate compute device.
02:27Maybe it doesn't have to be an expensive GPU.
02:30Maybe it's a CPU.
02:31Maybe it's function as a service and is even cheaper to run.
02:35And so that's what we do with our compute platform
02:37is assign the workload to a resource that financially makes sense,
02:41and so we can be a lower-cost provider.
02:43I wonder how much, because you mentioned that your customers are plenty
02:48along a lot of large enterprises,
02:51if a lot of them or a lot of corporate America is ready for higher costs
02:55coming from AI, because it's a moment where the large language models,
02:59the foundational models, haven't necessarily passed on all of those costs,
03:02and at the same time, you have more companies
03:05that are trying to add on AI capabilities.
03:07I mean, are people prepared for margins to get squeezed?
03:10Well, you want to do that where it makes financial sense.
03:13You know, you don't want to spend more on the model just to use AI.
03:17But we have a lot of examples, for example, at Akamai,
03:20where it does save us money,
03:22that the cost of the AI versus the offsetting cost of what it's doing.
03:27Your business is also really interesting,
03:29because this is kind of like the third act.
03:31If I may say so, you start with content delivery,
03:34then you add on cyber capabilities,
03:36and now you move into this new world of AI infrastructure and cloud.
03:40When you make these pivots,
03:41how much of it is just adding on capabilities
03:44versus saying, okay, when you think of Akamai,
03:46you should think of like an AI cloud company now?
03:48Well, the core, the secret, is the platform,
03:52you know, which we developed 25 years ago.
03:55Being in 4,300 locations, nobody's close.
03:58And that's how we enabled content delivery to work at scale.
04:02It's how we broadcast all the major live sporting events today,
04:05and you can see them online.
04:06It's how we defend the enterprises against these huge attacks that we're seeing now.
04:11It's because we're going to intercept them with a platform.
04:13And now it's how we enable and secure, you know,
04:17the new AI marketplace, the AI economy,
04:19so that applications can run affordably near where the users are,
04:24so you can get great performance.
04:25For things, though, like your, you know, legacy content delivery business,
04:29it does seem like it's lagging behind some peers.
04:30Are there specific plans there to help revive growth?
04:33You know, that's a business, we've been in that business now 25 years.
04:36We're the largest and best at it.
04:38And we're looking forward to this year's stabilization,
04:41maybe a decline in revenue mid-single digits.
04:44But it's very synergistic with our, you know,
04:48pretty good growing security business, market-leading capabilities,
04:51and now cloud, which is really, you know, booming now.
04:54And it all fits together very nicely in a platform
04:56that our customers appreciate having in one package.
05:00One of the interesting sort of macro things that happened today
05:03was we got jobs figures, and they looked really strong,
05:05but in tech companies, the jobs figures are declining.
05:08I wonder with you and the companies that you work with
05:10and have an insight into, if this is a real change for you,
05:14that your need for more employees is lessening
05:16because of tech advancements,
05:17and the companies you work for,
05:19maybe because of the platforms that they're using from you,
05:21are needing less employees.
05:23Is this a real change?
05:24We're more efficient,
05:25but we still have a lot of things we want to do,
05:27so we're growing.
05:29But the AI capabilities help us do more
05:33with the employees that we have.
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