• Interview
  • Maria Bartiromo interviews Tom Siebel: “Companies that miss this digital transformation are gone”

Transcript:
Speaker 1:
But you've gotta operate your business regardless of what's happening in Washington. And you say you're an innovator, that's what I'm going to do. So you're using artificial intelligence, AI, to see growth. Tell us about the company.

Tom Siebel:
What is Washington DC is basically irrelevant to us. We live at the intersection of artificial intelligence and this new phenomenon called Internet of Things, which kind of changes everything about the way business leaders like Darius Adamczyk at Honeywell Or Francesco Starace at Enel or United Healthcare run their business. I think that in companies today there's this phenomenon called digital transformation and there are companies who are driving that, like Amazon, and companies who are embracing that, like Honeywell, United Healthcare, Caterpillar tractor, John Deere, and others. And then there are companies, maybe 30% of the Fortune 500 companies, who likely will not exist in 10 years if they don't make this transformation.

Speaker 1:
So what's the transformation? Tell us how it works.

Tom Siebel:
Well, let's look. I mean, we have ... I think Amazon has roughly 1/4 of the sales of Walmart and a greater market cap. We have Tesla with 1/20 the sales of General Motors and a greater market cap. If Amazon decides to go into the pharmaceutical business, Walmart, CVS and pharmaceutical distributors are out of business overnight. So this censoring of value change changes everything about the way we deal with customers, everything about the way we manufacture products, everything about the way we run our businesses, and companies that miss this transformation are gone.

Speaker 3:
Are they awake to it? Are they awake to the fact, these leaders of more traditional companies? Because in the world of retail, for example, you had the leaders of say, Macy's, all of these kind of traditional stores and chains back on their heels. They've been struggling to catch up since '99, for Pete's sake. And it seems like there are a lot of leaders across all industries that could be making the same mistake.

Tom Siebel:
There definitely are leaders out there. You look at Isabel Kocher at Engie. Look at 3M. I mean, there are companies that are ... Jamie Diamond ... who are just driving this in a huge way and there are companies who will be left behind. We are seeing these retail outlets close their doors every day. I think companies like Walmart are in jeopardy. They're changing very rapidly.

Speaker 3:
You think Walmart's in jeopardy?

Tom Siebel:
In the long run? Unless they transform themselves.

Speaker 1:
Transform themselves using AI?

Tom Siebel:
Using AI. Using digital technology to reach their customers, to serve their customers and to service their customers.

Speaker 3:
In the words of Steve Jobs, tell me what I want before I know I want it.

Tom Siebel:
They do good. You know, but these guys at Walmart.

Speaker 3:
Amazon does a great job at it.

Speaker 1:
Amazon is using AI right now with its Echo.

Tom Siebel:
They're killing it.

Speaker 1:
Yeah.

Tom Siebel:
Those people at Amazon.

Speaker 4:
Let's think about the actual ... No one's going to shed too many tears about corporate America going through their ups and downs. What is the impact of AI in the future that you envision on actual working Americans? I think the big fear of AI is that Amazon has been able to displace lots of workers in Macy's, in some of the other retail competitors, and obviously their workforce doesn't nearly expand to the same extent that they displace workers. What do you see as the future of the job creation in a world of AI?

Tom Siebel:
I think that's a very important issue. And this relates to basically all of what has happened in information technology in the last 50 years. Okay, from supply chain optimization, computer-aided manufacturing, robotics, all of these have been basically increasing productivity but we have been replacing jobs. And I think this is a very troubling issue in the future of jobs. It needs to be addressed. While AI will increase safety, increase reliability, it will provide higher-quality services, we'll have all sorts of new business models that were never envisioned before. Think about Uber. No cars, no drivers, and look what they're doing to the transportation business. But the fact of the matter is, this is going to have an adverse impact. A lot of jobs that exist today will not exist in 10 years and we need to think about that. This is an important issue.

Speaker 4:
Yep. And it kind of worries me that when I hear Silicon Valley leadership like Zuckerberg, their attitude seems to be, "Well, let's have guaranteed income from the government," as opposed to think about what the new job creation engines might be. In other words, it seems to be they want to give people a palliative bread and circuses kind of approach instead of actually thinking about what are the jobs that could be coming out of this revolution.

Tom Siebel:
I think we need to look at K-12 education more than we need to look at guaranteed income for all Americans.

Speaker 1:
So how does AI change K-12 education?

Tom Siebel:
Well, I think AI actually changes everything. It changes the way that we deliver products, the way that we deliver services, the way we deliver education, the way we educate people through distance learning and what have you. I think as it relates to the job market, we really need to look at K-12 education to make sure that our population is trained for the next economy.

Speaker 1:
Well that's the thing, the skill sets. The gap and skill sets. We're not training our people.

Tom Siebel:
Skill sets that need to be there.

Speaker 4:
Do you see anything in the current administration that might be helping on that front?

Tom Siebel:
I see very little going on in Washington DC that's going to help.

Speaker 5:
What about tax reform?

Tom Siebel:
I think of tax reform ... What's the likelihood of ... Were talking about the Trump agenda. The Trump agenda seems to be baked into the market. I don't know what you think the likelihood of the Trump agenda happening is in the next three years, [crosstalk 00:05:44] but I'm not certain it looks very promising.

Tom Siebel:
I don't pay a lot of attention to what's going on in Washington DC. I wish we would get tax reform. I wish we would get healthcare reform.

Speaker 1:
Yeah.

Speaker 5:
But you're not optimistic.

Tom Siebel:
It looks like mostly what we see is dysfunction in the Congress, dysfunction in the White House, and I think we are all on our own. So my job is to create jobs. My job is to innovate, and my job is to not worry about it and this is what we're doing.

Speaker 1:
If you had to name one or two sectors that you think are the growth areas for AI in the next 5 to 10 years, what is it? Is it healthcare?

Tom Siebel:
Healthcare is probably the biggest. United Healthcare ... These guys are massively leading the application of cloud computing, big data, IoT and AI to revolutionize healthcare. I mean, these people are developing literally 1000 AI-based predictive analytics applications. They can look at their insured population, which is 125 million, and predict say, the next seven years with very high levels of precision, who's going to come down with ... Name the disease ... Say, diabetes. So they can deal with these people clinically over the next seven years rather than in the operating room within seven years. Well, the social impact of that is huge, aside from the economic impact. But then, name the disease and these people are driving innovation and healthcare out of Minneapolis like nobody has ever seen.

Speaker 1:
And your company is helping to innovate in that.

Tom Siebel:
We are very much involved in all of this around the world, in Italy, in Europe, and Asia, in North America, in Canada. We're with the leading CEOs of the world who are driving innovation. We're we at the table with them.

Speaker 1:
How would you characterize the economy right now, Tom?

Tom Siebel:
I think that ... Well, the market or the economy?

Speaker 1:
Economy.

Tom Siebel:
Information technology companies, my segment of the economy, is growing. My customers are investing. My customers are hiring. So it looks pretty positive.

Speaker 4:
How different is that environment? It's really important to hear you say that your customers are investing again. They're hiring again. How long ago did you start seeing that shift in business investment?

Tom Siebel:
Oh, I think we probably saw it coming into 2010, 11, 12. I mean, this is when it started to accelerate. But today, we are seeing massive investments, investments in people, investments om training, investments in AI, investments in IoT.

Speaker 4:
It's a big acceleration recently.

Speaker 1:
Well, that sounds good. Tom, good to see you.

Tom Siebel:
Thank you.

Speaker 1:
Thank you so much. Tom Siebel, Chairman and CEO of C3 IoT.