Palo Alto studio connecting Silicon Valley and Wall Street. I'm John Furrier here with Dave Vellante, my co-host.
Hi, everybody. We're here at theCUBE's NYSE Wired studio overlooking the Options Exchange, the famous Buttonwood Podium. CUBE alum, Alex Bouzari is here. He's the CEO of DataDirect Networks, DDN. Alex, great to see you, my friend.
Great to see you, as always. Thanks so much for taking some time.
Always wonderful. I heard you were coming in. I said, 'Oh, I'm going to stay.' Usually, I'd be on my way back, but you always have the best questions and the best insight on the industries.
Thank you, sir. Always a joy.
So I appreciate that. So I went back to our interview at SuperCompute, which seems like eons ago, right? And at the time you said, well, last year, this is 2024, you were powering 500,000 GPUs. By November, you were powering a million GPUs, hyperscalers, neoclouds, enterprises across geographies. You guys have been established for quite some time. Give us the update. What's up with you?
So it's continuously increasing. I think, look, the main theme now, I think Jensen spoke to it, is NVIDIA is now an AI infrastructure company. So it's all about building infrastructure, and it's creating value out of that infrastructure. And I think what DDN does is that's exactly what the data layer does. I think the AI economy has now bifurcated into two universes. One where the GPUs are being utilized and are generating value and are generating profit and business and financial outcomes. And the other one where the GPUs are sitting idle, and the difference is really DDN. We're now powering sovereign initiatives in three continents in the US, in Europe, in Asia Pacific, in the Middle East. We're powering seven out of the 10 largest, biggest AI implementations out there, hundreds and hundreds of enterprise customers, and that's really what's going on. I think the value creation and monetization, making GPUs productive, making GPUs profitable is what it's all about. That's what we're razor-sharp focused on.
And sovereign is not just overseas. It's actually companies here want sovereign infrastructure as well; do they not?
And it's not just sovereign in the context of US, US defense, US government. It's every state needs a sovereign implementation. We're working on some organizations here where it's being deployed at the level of the state. How do we deliver products and services and capabilities to the constituents of a state, and how do we help them leverage AI and create value out of AI? So sovereign is going to be absolutely massive, I think, for the US and globally, and it's something that will continue, I think, for a very long time to come.
You've always made the point, you come back to value. I mean, I like that because that's what it's all about. So let's talk about where the value is. When the AI factory term first came out, it's a very catchy term. Okay, we're manufacturing intelligence in the form of tokens. Okay, but then you start to track, well, how does that turn into value? Obviously in the scientific community with your HPC heritage, there's clear value there for scientific discovery, but now it's starting to seep into businesses. What are you seeing governments and enterprises, where are they getting value out of all this intelligence?
Sure, sure. So the value really comes from monetizing AI, monetizing intelligence. How do you gain insight from AI? And the only way we can get insight from AI is data. You take AI, you apply it on top of data. From that data, you train models, and then you gain insight, and that insight creates value for enterprises, for nations and for consumers. So we're increasingly seeing enterprises benefiting from AI. Salesforce, for instance, has been able to increase the training capabilities by 70%. That means that people say SaaS is dead. SaaS is over. No, SaaS is transforming itself into leveraging the AI tools. But for the ROI to pencil out, you need a data plan. You need a data layer that is making that possible. That is the value that we're providing. 85 out of the Fortune 500 are now using DDN in their data centers in the cloud to derive business outcomes and financial outcomes. Likewise, in sovereign, it is really preserving and enhancing the cultural heritage of a nation, of a state, of a certain geography, as well as providing safety and security. So these are the areas where things are happening. It's really tokens, but tokens in the context of ROI and making sure that the ROI pencils out. That's what DDN delivers. We're the data engine which powers the AI economy. And by doing so, we deliver true value, financial value, business value.
Interesting. You talk about your penetration into the enterprise. It's deeper than I realized. But for years you've had aspirations and designs with your architecture to get into the enterprise. It's almost as though the enterprise wasn't ready for what DDN is capable of. But now it's like there's a huge tailwind for you.
Totally, because I think enterprises are finally coming to the realization that AI is not just an OpEx improvement. It is value creation for the products and services. It's giving them the ability to develop better products, better services that generate more value, and therefore their top line increases, their bottom line increases. So it's really an alignment, I think, between earnings per share in the world of finance where we are today and token monetization. So I think the reason why our adoption in the Fortune 500 is skyrocketing is we're able to align the token economics and the ROI associated with that with the business and financial outcomes that CEOs, CIOs and CFOs are seeking across industries from financial services to life sciences, automotive, manufacturing. We're able to articulate it in a way that they go, uh-huh, I see how this is helping my company, and it's aligning token economics with earnings per share. I think that is really the light bulb.
So let's click in on that. So the coordination activities that AI is able to absorb, I call it paper cuts. It's the mundane tasks that nobody wants to do. It's not the job that you want. Let AI do that. That's clear, and that's driving productivity. It seems we're not at the human judgment level yet. AI is not doing that judgment for humans, so we're safe there for a while. But how about actually developing and monetizing products from that intelligence, that tokens turning into products, are you seeing that at this point?
Absolutely. I mean, look, if you're in the life sciences sector, you're developing a new drug that you're bringing to market to save lives. Well, if you can bring that new drug to market more effectively, faster with a higher likelihood of FDA approval, you're delivering true value to your organization. I think that's an example. Autonomous driving, one of the things that is required for the adoption of autonomous driving is make these autonomous cars safer so that we can deploy them in cities and states all over the world. Well, with AI, you're able to link what is happening at the level of the car, which is the edge, to what is happening in the data center to the cloud. Connecting all that is delivering true financial value. So I think it really all comes to the realization that organizations have invested in AI infrastructure, that is the compute, and NVIDIA is by far the best, the best compute in the world. And now the monetization and the value creation comes through data. You connect compute and data together, you connect NVIDIA and DDN together and the value is instantaneous.
