How Companies Are Actually Spending Money on AI Now

SPEAKER_2 (0:02)

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Joe Weisenthal (0:18)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:23)

And I'm Tracy Alloway.

Joe Weisenthal (0:25)

Tracy, we're recording this January 8th. We ran a good piece in the newsletter this week from Skanda about AI spend as a sort of meaningful macro driver or getting close to where it starts to move the dial.

Tracy Alloway (0:38)

Yeah, that was a really good piece. And I have to say, some of it is slightly worrying. But I think one of the big things that's happening now is, okay, AI has become such a big pillar of the market, right? Like the entire S&P 500 basically.

Joe Weisenthal (0:54)

It's like an AI play.

Tracy Alloway (0:55)

Yeah, it's an AI play. And so at some point, the hype has to be matched by reality, i.e. all that investment has to be matched by some sort of revenue, right? You have to get money out of making this investment.

Joe Weisenthal (1:09)

I think there's three ways things could go. I've been thinking about this. There's three ways this could play out.

One is, companies don't get a lot of productivity gains from these tools. They cut back spending. There's a bunch of other projects get delayed. Market goes down. Another possibility is there's this great productivity breakthrough. Companies are more efficient than ever. Incredible boom. That's great. And then the other possibility is that none of this matters, and they build God at one of these labs. And then everything we know about economics doesn't even make any sense. So to even talk about productivity or the S&P 500 or earnings in that regime is just like, it's like a secondary concern to like the way the world has changed when they achieve AGI.

Tracy Alloway (1:52)

Joe, are you okay?

Joe Weisenthal (1:53)

No, I think those are those are like the three.

Tracy Alloway (1:55)

Yeah, you might as well go big with your scenario analysis. Yeah, but you're right, it could go either way. And obviously, there's a lot of talk and nervousness about a bubble in AI at the moment. So I think it would be a good idea to maybe try to get an understanding of how much companies are actually spending and benefiting from AI.

Joe Weisenthal (2:15)

That's right. And we have the perfect guest, because he has a great view into what companies are spending money on, including AI, and also as the CEO of a company himself in the tech space, but not directly in the AI space, as sort of user of AI tools and maybe could talk about what's being used, what's not being used, where productivity gains are being had. We're going to talk about all of this stuff. We're going to be speaking with Eric Glyman. He is the founder and CEO of Ramp, which is a New York City based company. It's a spending management platform for companies, help them deal with expenses. We might also talk a little bit about expense management platforms, because I have headaches about dealing with expenses.

Tracy Alloway (2:55)

I think a lot of people do.

Joe Weisenthal (2:57)

Yeah, I guess that's why there's a business, a new business to be made. Eric, thank you so much for coming on Odd Lots.

Eric Glyman (3:02)

Joe, Tracy, thanks so much for having me. It's great to be here.

Joe Weisenthal (3:05)

Real quickly, what do you describe a little bit? What's Ramp? What's your story here?

Eric Glyman (3:10)

Well, you can think about Ramp as a financial operations platform. It's a single place where companies can issue cards, make payments of all kinds, and even automate both expense management, which we'll get to, and accounting. But the ethos of the company and why we exist is actually to help companies save time and money. We're the only company in our space that actually reports back to our customers, how much money and time did we save you? Over the past four years, we've saved our customers over $2 billion, 20 million hours, and half of that has actually come in the past year. So we serve 30,000 plus companies from small, medium to publicly traded.

Tracy Alloway (3:45)

Got it. What was the gap in the market that you saw? Because on the one hand, as Joe just laid out, a lot of people hate expenses and they're clunky and very bureaucratic, and they take forever to do. But on the other hand, this is a space that is dominated by some very powerful legacy players. I'm thinking about American Express, for instance, and you're basically going up against them.