Joe Coletti
Welcome to Strategic Alternatives, the RBC Capital Markets podcast. In this episode, you’ll hear a roundtable discussion from RBC’s Technology, Internet, Media and Telecom Conference in New York, which brings together perspectives from across the investor lifecycle — venture capital, institutional investing, and private equity — to explore where AI and technology markets are headed. From early-stage innovation to long-term positioning and scaled growth, each lens offers a different view on how today’s tech trends are taking shape.
The conversation is led by Matt Hedberg, Head of Global Technology, Internet, Media and Telecoms Research here at RBC Capital Markets, who speaks with David Golob, Chief Investment Officer at Francisco Partners; Greg Tuorto, Portfolio Manager at Goldman Sachs; and John Borthwick, CEO of Betaworks.
Now, let’s dive into the conversation.
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Matthew Hedberg
Well, thank you all for joining us. We've done this panel now for many, many years. It’s always one of the highlights for me. And so, we've kind of got the full gamut here of investors, and we're going to kind of cut through some of these major topics that are that are on everybody's mind.
Matthew Hedberg
Post covid, software was trading at Sky High multiples. Until very recently, AI stocks were seemingly going to infinity. But now some of these things have been under pressure recently, and we'll talk about where we are in this AI super cycle in a second here. But from your perspective, what are some of the biggest mindshare shifts and how investors are evaluating technology companies. And, Dave, is there a way to think about how that might impact our 2026 thinking?
Dave Golob
What's interesting in the last several months is that there's this sort of narrative that somehow applications are going to get disrupted by AI and infrastructure, people are going to just spend more money on the build-out. And, historically, infrastructure is much more churning, lower retention rates. Engineers like tinkering, and the end user doesn't have to see the change. And it's all about performance, as opposed to being embedded in the workflow. So, I am surprised by that diversion, and it is not consistent with our experience of what's happening in the portfolio.
Matthew Hedberg
Interesting. Anything else? So, we'll get, we get to AI in a second here. But anything else stand out?
Matthew Hedberg
John?
John Borthwick
I'll make an observation, which is, I've been in the early stage technology business for a while now, and I started my first company in ‘95 so I have a ton of muscle memory around the dot com bubble and the dot.com bust, and so I'm constantly just kind of like calibrating against that as an experience. However, I think this is fundamentally different. And the reason why I think it's fundamentally different would be the dot.com bubble, most of the bubble was on the infrastructure side. On the network side, we were laying a network and build out network for fiber, for broadband, in anticipation of broadband. And this time, as fast as we're laying the infrastructure, we're using it, right? So, there's just a completely different sort of forward planning thing. Secondly, I would say is, back then, we were creating and building a network. Today, we're actually upgrading intelligence in every corner of compute that exists. And so, it is very different to a network, and it is far more fundamental. And then lastly, I would say, we have billions of people online, reportedly, Google did about 5 trillion searches last year. It's not disclosed, but somewhere, orders of magnitude of that, and what we're seeing is, I often think about the general AI platforms like open AI as everything machines, and they are trying to basically give us a much more comprehensive version of search. We're seeing that, that behavior actually happen. So, when you when you step back and you see open AI, go from 300 million users this time last year to about seven, 800 now, on one hand, you say, ‘God, that's extraordinary.’ And then on the other hand, when you put us in the prism of everybody upgrading how they use search, it's actually pretty obvious. So. it's different…
Matthew Hedberg
I'll ask where we are in this cycle here. But Greg, you know, you've been investing in tech companies for decades. How do you, as a public facing investor, compare this AI cycle to past cycles that you've been involved with?
Greg Tuorto
And I do think it is fundamentally different. One of the things I've tried to kind of step back and detach a bit more about is the enterprise or the knowledge worker approach to this, because we've gone through the different instrumentation across people, like moving into like, a utilization phase, yeah? Like, if you're not using AI at your job, you're behind. So, when you think about the different things that kind of deliver answers and change the way people's jobs work, is the junior analyst at an investment banking firm, is their job completely obsolete? No, but it's changed a bit. And I think that one of those things in terms of, like, how you think about what the TAM is in each company, and how we kind of created the unit economic model, which started at, like, the deal, and then when it went past the deal, it went to the number of sales people, and then the number of workers in terms of creating head count, we have to change all those, And, like, if you if you're just looking at each deal is 50,000 per and like, you're not going to get any it's just a treadmill. So, so really kind of detaching and looking at these things in terms of like what they can be as opposed to what they once were.
Matthew Hedberg
We appreciate everybody staying around a little bit longer. We do appreciate your time, all three of you guys, thank you for coming and looking forward to next year. Thanks Matt. Thank you. Matt,
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Joe Coletti
Thank you for listening to Strategic Alternatives, the RBC Capital Markets podcast. This episode was recorded on November 19, 2025. Listen and subscribe to Strategic Alternatives on Apple, Spotify, or wherever you get your podcasts. If you'd like to learn more or continue the conversation, please visit rbccm.com/strategicalternatives, or contact your RBC representative. See you all next time.
[DISCLAIMER]
This content is based on information available at the time it was recorded, and is for informational purposes only. It is not an offer to buy or sell or a solicitation, and no recommendations are implied. It is outside the scope of this communication to consider whether it is suitable for you and your financial objectives.