Do they just give up or is it a matter of pedaling faster or is there something else they should be doing?

And a great setup question, because you know it's well between those two scenarios.

If you give up, you might as well focus on the company.

You stay stagnant in this world, you're going to be roadkill.

And the changes that your peers will go through, both the small ones and the big ones, will be so fast that after a couple of years, quote, giving up, if you were a Fortune 500 company, you won't even be on that list.

And so that's not an option.

The second is you need to think about it differently in terms of your organization structure.

And then all of a sudden people go, where's the ROI? Is it too early to be asking for some ROI on this investment?

What does that mean?

Well, this is where the process people in the company taught me that process was not a bad word.

If you do process right, and you know this coming out of supply chain, it allows you to move with tremendous speed.

And if you don't have process, you can't respond to the abnormalities that of the market and adjust appropriately on it.

And the ability to anticipate those problems and then adjust is what allows you to differentiate versus anyone else.

We could do an acquisition that I didn't even know the company of, the name of it, when I heard that they were available in the market.

And it was the head of NASDAQ said, John, everybody knows this company is going to get bought.

And so seeing that this was not a technical activity for you, this was not a simple, it's just business kind of decision, it changed how I thought about the company, or at least it affirmed how I thought about the company.

Can you take listeners back to your early days? What early experiences and lessons shaped your worldview and shaped the trajectory of your success?

Well, you've raised both West Virginia indirectly, my parents and family.

And how do you deal with challenges in life? Going in the sequence that you raised it, my parents were both doctors.

And in second and third grade, I was having real trouble reading.

And they would read with me each night thinking that would help.

But all they were doing was reinforcing a process that wasn't working.

And it was before dyslexia was really understood, but they found a teacher that helped work with young people with learning disabilities by the name of Mrs. Anderson.

And that speaks to something that the very best leaders have, which is vision.

I don't think so, but I'm just curious what your thoughts are.

Well, as I said in the session, my high-level thoughts, and then I'll get into the detail, because I was not just a good observer of this.

I was in the middle of the playing field on the Internet.

Right, exactly.

And so to say I understand that firsthand would be a naive statement.

I felt the pain of what happened on it.

I do not think it's a bubble at all.

But I think at the same time, I'm curious what you see, what some of the next cyclical phase of AI may be, you know, based on from your approach and understanding, you know, what are some of the potential markets that you think could emerge from where we are today?

Talk a bit more about what becoming the key fabric entails.

Well, what's become the key fabric is an organization, regardless of its industry or government or non-government organization, saying it will determine our future.

And so at a country level, you are seeing, I referred to the internet, where President Clinton said this would determine the future of our country.

And today, President Trump has said very directly, AI is something we must lead as a country if we're going to have the standard of living, growth, and capabilities that we want to have.

When you begin to look at the commonality of fabrics across this, you begin to see that play out pretty well.

In terms of every industry, high-tech always moves first.

You've seen high-tech move and we talked about productivity.

Talk a bit about how that applies in this environment, given all the context you've already provided.

Where were you in your Cisco journey at that point? I was just about to become

CEO.

I'd been there for three years.

We had at that time said, the internet's going to change the way you work, live, learn, and play.

And people said, John, what do you mean? You build routers and you move around zeros and ones.

And yet I grasped the implications for that and went straight to results.

In technology, I look for the results.

Give me an example.

What was the initial thesis and what were you trying to accomplish through JC2?

Well, I knew when it was the right time for me to leave Cisco.

And every five years at Cisco, I'd sign up for five more.

And then one year when the board asked me, I said, I'm signing up for two to four more years.

And they knew what that meant.

And I was ready for my next chapter.

All of us, when we make transitions, we don't know for sure what's going to really excite us or not.

if they don't listen also, you probably stop it, right?

So, what are the companies that are going to succeed, or how do you characterize those companies without naming names, and what are the characteristics of those companies that fail dramatically?

Okay.

So, the third element I said is there will be a series of startups that play big time in this new arena.

But I said different than before, you're going to have at least one, maybe two of the large incumbents actually make that transition.

So the first thing that would determine whether a large company makes the transition or not is do they see it coming? And then secondly, do they realize they've got to transform their whole company and not be in denial? And then third, they got to put big bucks behind it.

Perhaps the one that's done that the best, Kenny, is Microsoft, but Satya's done.

He cleared his own company.

What is the thesis out there? What is your thesis and your outlook for 2025? And then one thing that I saw in your projection, your full projection, number one in GDP is So could you clarify on

So after such a strong 2024 from an investor standpoint and expectation and investment into AI, what does 2025 bring from your vantage point?

Well, Morgan, it's a pleasure to be with you again, and 11 years of watching you on CNBC, and John, 15 years of working together on it.

When I look at the marketplace, I'm good on market transitions.

This is a movie I've seen before.

You saw it with the internet, which ushered in a decade of the best productivity we've had in my lifetime from 1990 to 2000.

I think what Sam is alluding to, and by the way, I agree with it, this is when you begin to see the results of AI.

I personally think that AI will drive productivity of a well-run company 7% to 10% a year on productivity increases.

How would you know when it really is starting to be quantum's time and when that would be something you're more interested in investing in?