CEO of an AI data company snowflake He told CNBC he won’t let the stock market distract him from his ambitions to become “one of the great technology companies in the world.”
The cloud data storage platform made history when it went public five years ago as the largest software IPO in history. Now, its stock price is rising amid the AI boom.
But as investors flock to AI companies, fears of a bubble have emerged, and markets are keen to separate hype from reality lest they get hit by a firestorm on a pullback.
“You can’t control stock prices,” Sridhar Ramaswamy told Squawk Box Europe on Thursday. Snowflake stock rose 6.5% on Wednesday and is up more than 60% year-to-date.
“My main focus is on value creation. We have to make money one dollar at a time, so we’re focused on the quarter and the year, but more than that, we’re also focused on the value we create with our customers. The stock market will settle down on its own,” he added.
His comments came after Snowflake investor Michael Speiser made a net profit of more than $11 million on a stock sale last week, while senior vice president Vivek Raghu Nathan made a profit of about $2.6 million on a stock sale late last month.
Ramaswamy declined to comment on personal sales numbers, but added: “I’m not selling any stocks. I’m a big believer in the long-term value that Snowflake will create, and sales tend to be very modest.”
Aiming for gradual implementation
Ramaswamy said it was important for companies to keep their eyes on the prize – to make AI useful and thus profitable, and advised customers to do the same.
He emphasized the importance of introducing AI in stages. This is partly because not all projects will work, but also because employees may resist because they fear AI will replace them.
“These are some of the nuances that executives need to understand. Where is technology most applicable? Some people think of AI as a technology that can solve all problems, and I think that’s a mistake. It certainly has promise, but some areas will be much more accepted than others,” Ramaswamy said.
One of the key opportunities today is how quickly AI can accelerate the value derived from data, Ramaswamy said.
“The change in time to value is also pretty significant. Will there be market disruption along the way in terms of stock market trends? That’s true. But I think the value that will be created from this AI revolution will be pretty robust, if you can call it that. We all need to stay focused on that,” he added.
A market bubble and its burst do not necessarily mean the end of a company. meta, Amazon and google Both were born in the dot-com era and are now among the most valuable companies in the world.
But Ashley McNeil of Vista Equity says AI won’t necessarily play out in the same way as the dot-com bubble, especially if investors remain calm. He was bullish on CNBC’s “Closing Bell,” but said it’s important to take a “cautious” approach.
“Is this a bubble that’s going to burst like it was in 1999? Or is it like a balloon that inflates and deflates as it goes through cycles?” McNeil said.
“When you think about the longevity of this technology, and the fact that there will continue to be waves of adoption of this technology, I tend to think that we’re not exploding, but rather expanding and contracting as this technology rises and falls,” she added.
