00:00 Speaker A
C3 AI shares surging after topping fourth quarter expectations with revenue up 26% from a year prior. The AI software company also renewing and expanding its joint venture with energy technology company Baker Hughes to continue to develop AI solutions for the oil, gas, and chemical industries. Joining us now, Tom Siebel, C3 AI’s founder and CEO. Tom, great to speak with you. Thank you so much for joining us. I want to start on that partnership because this is something that I have been asking you about for years because investors wanted to know if that partnership was going to continue. What went into those conversations and how did you get that deal done?
00:48 Tom Siebel
We’ve had an important strategic alliance in place with Baker Hughes since 2018. We’ve extended it, I think four times until now. So, I mean it’s been extended, extended, extended, extended. And now we’ve extended it for another three years, both in term and scope. So, I mean, it was a natural thing to do. I mean it’s a great partnership. We’ve closed, I think over half a billion dollars in revenue together. Uh we’ve expanded into, you know, Shell, Exon Mobile, LyondellBasell, Flint Hills Resources, Eni, Petronas, Qatar Gas. So it’s hugely successful. And I think that the speculation that somehow this wasn’t going to be extended was candidly kind of silly.
02:08 Speaker B
Tom, good to hear that you’re doing better and glad to hear that you’re back out there traveling, and sounds like you’ve got an action packed schedule both speaking with some of the leaders in Washington DC as well as just trying to get a sense of the the the pulse of the businesses that you work with closely. Outside of Baker Hughes, what are you hearing from some of the decision makers for big deals in the perhaps scrutiny for spends that they’re facing right now within their corporations?
02:54 Tom Siebel
Uh federal government businesses is huge. Uh as they embrace uh commercial off the shelf solutions for uh enterprise AI and what be it FDA, be it health and human services, defense Intel, I mean, we just announced this morning another expansion of our Air Force relationship. I think it’s almost now approaching a half a billion dollars in business just for that contract. State and local government businesses is huge. Um manufacturing, supply chain, banking, life sciences, enterprise AI is a very rapidly growing market. And this is being reflected in the increasing growth rates for C3 AI. Two years ago, it grew 6%, last year it grew 16%. This year, uh top line growth was 25%. That would make it, I think, one of the five fastest growing companies in the in the in the public software universe.
04:21 Speaker A
Well, Tom, the stock is still down about 15% year to date, but I I wonder if we can talk a little bit about some of the headwinds that are facing broader AI giants right now, especially when it comes to export curbs, which obviously came up on Nvidia’s earnings call. What are you seeing in terms of how any export controls might be impacting demand in the sector?
04:50 Tom Siebel
Well, first of all, you know, our situation is a little bit different than Nvidia because we have done business in China ever. And we’ve made it a strict rule not to do business in China. We don’t do business in Russia. So we just kind of don’t do business in bad places. So export controls have had, you know, to date, you know, no impact on our business.
05:24 Speaker A
I understand that, Tom, but I’m I’m curious about, I mean, Jensen Wong said it himself, it’s leaving $50 billion dollars on the table. Do you see a world where we start to see the AI market in China heating up and then companies like yours can’t take advantage of that potential revenue stream because of export controls?
05:48 Tom Siebel
Um, no, we have we made a decision independent of the United States government to not do business in China. We made that business we made that decision in 2014. Um, we knew this story would not end well. And so we feel very comfortable not providing our technology to the People’s Republic of China. And so, making the decision not to do business in China, but we know that the administration has also talked about tariffing cloud computing and even IT services, which is something that it sounds like would impact some of the applications that you are able to power through other partners around the world. What are you hearing from the elected officials in your talks with them and and how are you also going to bat for C3 AI that investors should know about so that you’re not seeing any type of tariff on your own applications or services?
07:35 Tom Siebel
Well, I’m in Washington DC today as you know, uh talking with the United States government in many aspects. But there’s been no discussion uh that we’ve encountered that it will affect our ability uh to provide our technology to our customers, be it in the Middle East, uh be it in Europe, or uh South America. So we’ve seen no discussion that affects our ability to sell. I think it does affect chip manufacturers. It does affect Nvidia. It does affect others, but I’ve heard nothing that will have any effect on us.
08:34 Speaker B
Would love to be a fly on the wall in some of those meetings, Tom. Thanks for taking the time here today.
08:42 Tom Siebel
Thank you.