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Speaker 1: From the heart where innovation, money and power Collie in

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Speaker 1: Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde

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Speaker 1: and Ed Ludlow.

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Speaker 2: I'm Caroline Heinder Bloomberg's weltad quarters in New.

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Speaker 3: York, and I'm Ed Ludlow in San Francisco. This is

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Speaker 3: Bloomberg Technology.

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Speaker 2: Coming up. We push our head to Apple's results after

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Speaker 2: the bell.

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Speaker 4: This is investors anxiously await iPhone sales numbers.

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Speaker 5: US.

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Speaker 3: We'll sit down with the CEO of qualcom Is the

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Speaker 3: chip maker, offers an upbeat forecast.

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Speaker 4: And the CFO of door Dash joins us to run

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Speaker 4: through the company's latest results.

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Speaker 2: All that and so much more coming up.

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Speaker 4: There is a wealth of micro data of company news today.

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Speaker 2: That we're going to be digging into.

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Speaker 4: Not to mention New York based Peloton, but I'm looking

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Speaker 4: at what's happening on a broad index today.

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Speaker 5: Ed.

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Speaker 4: We're seeing the nasdak cup seven tenths of a percent

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Speaker 4: post the FED. We're relieved that we're not going to

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Speaker 4: see rate hikes coming, but certainly still no signal over

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Speaker 4: those rate cuts as we still see a resilient US

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Speaker 4: overall jobs picture, which we get the detail of come Friday.

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Speaker 2: Yes there's a calling.

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Speaker 4: Maybe the slowest increase in jobs since November, but still resilient.

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Speaker 4: We're seeing a ten year yield just down one basis point.

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Speaker 4: A little bit of movement into the mode market on

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Speaker 4: the day post fed as we anticipate the jobs data

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Speaker 4: and Bluemberg dollar index actually weaker as we see a

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Speaker 4: little bit of a relief there. We're down by four

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Speaker 4: tenths of a percent. What therefore is bitcoin doing the

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Speaker 4: versus the US dollar. Let's move it on and have

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Speaker 4: a little look that we're up three percent, so a

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Speaker 4: little bit of a risk on kind of a trade today,

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Speaker 4: but still sub that sixty thousand dollars level. But ed,

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Speaker 4: what are you watching on this corporate news front?

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Speaker 3: Let's start with Peloton, an absolutely wild morning session in

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Speaker 3: the market. So far CEO Barry McCarthy is going to

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Speaker 3: step down the board. We'll find a new CEO. Fifteen

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Speaker 3: percent of global headcount going to be cut. The story overall,

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Speaker 3: things are not getting better for Peloton. Look at the

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Speaker 3: chart two day chart to illustrate the point that when

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Speaker 3: the market opened there was a session high of eighteen

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Speaker 3: percent cheering. What is another restructuring and yet we're now

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Speaker 3: down more than ten percent. Having had some time to

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Speaker 3: basically look at what Peloton's saying and on the hardware

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Speaker 3: side of their business, the multi channel sales side of

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Speaker 3: their business, and then subscriptions, things are not going to

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Speaker 3: be as good by the end of the year as

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Speaker 3: perhaps they had hoped, the.

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Speaker 1: Market had hoped.

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Speaker 3: We're gonna get deep on that later in the show

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Speaker 3: were Bloombos Mark German, but that is just a real

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Speaker 3: ride that stocked this morning. The earning story is elsewhere

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Speaker 3: as well. Quill Calm up almost ten percent. The smartphone

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Speaker 3: market seems to be recovering. There's going to be a

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Speaker 3: lot to talk about with CEO Christiano and on later

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Speaker 3: in the program in the context of AI and also

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Speaker 3: what's happening in China and then door Dash. This is

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Speaker 3: a tail as old as not time, but the history

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Speaker 3: of gig economy companies investors looking at ebit dar forecast

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Speaker 3: and wondering what's going on the relationship between at Basic

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Speaker 3: gig platforms and ebit dar is something we've talked about

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Speaker 3: a lot. The concern is like are they investing too much?

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Speaker 3: What's going on the bottom line, It's the US's biggest

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Speaker 3: delivery platform, mid single digit growth team growth in the

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Speaker 3: second quarter. Let's find out what's going on with that one, Caroline.

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Speaker 4: Yeah, because we did actually see strong numbers for fiscal

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Speaker 4: first quarter revenue on the higher side, but it was

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Speaker 4: this worry about the forecast that is setting the shares lower.

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Speaker 4: DoorDash CFO the perfect person to speak to about it,

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Speaker 4: Rabbi in Conda. Thank you very much indeed for joining us,

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Speaker 4: Rabbi and just talk to us about why this restrained

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Speaker 4: outlook for adjusted a bit dark come the second quarter.

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Speaker 2: And why then the ramp in the second half.

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Speaker 6: Good morning, Carolina, thanks for having me this morning. Q

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Speaker 6: one was a very strong quarter for US across the board.

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Speaker 6: If you look at the results, demand on the platform

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Speaker 6: continues to be very strong. All time highs in terms

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Speaker 6: of users, all time high in terms of subscribers, all

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Speaker 6: time high in terms of order frequency. In Q one,

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Speaker 6: we fulfilled more orders than ever before in our history. Honestly,

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Speaker 6: you've been one of the strongest quarters since I've been

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Speaker 6: here for the last six years. When I look at

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Speaker 6: the underlying demand on the platform, it really is very good.

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Speaker 6: We're not seeing weakness on the consumer side, whether it's

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Speaker 6: you know, low income or high income, or the East

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Speaker 6: Coast or the west. Goal, we're team trend across all markets.

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Speaker 6: We operate in thirty countries across all life of business,

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Speaker 6: and at the same time, we posted the lowest netlots

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Speaker 6: in our history, which is being aided by the highest

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Speaker 6: adjuctity bite in our history. Overall, the business continues to

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Speaker 6: do really well, and I'm excited about not just the

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Speaker 6: Q one results, but they're going forward Q two as

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Speaker 6: well as the rest of twenty four.

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Speaker 4: So did you get frustrated when the shares full because

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Speaker 4: the market wanted to see more in terms of profitability

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Speaker 4: for the forecast.

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Speaker 6: Our goal has always been to continue to build the

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Speaker 6: best product possible, and you're seeing that in our results.

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Speaker 1: Users, Like I said, I've been in an all time high.

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Speaker 6: We ended twenty three with over thirty seven million consumers

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Speaker 6: and that number continues to grow considerably since that point.

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Speaker 6: We're not seeing any weakness, whether it's the large, you know,

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Speaker 6: enterprise merchants on the platform or the local merchants on

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Speaker 6: the platform. You're seeing wrong double digits scapes, stores, sales

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Speaker 6: growth across the world. Our grocery business is growing at

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Speaker 6: one hundred percent year on ear for the third straight

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Speaker 6: quarter in a row. Our goal will continue to be

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Speaker 6: to build the best product possible that consider all three

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Speaker 6: sides of the audience, whether it's consumers, merchants or adaptors.

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Speaker 3: Robbie, I'm building the best product possible. It's easier way

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Speaker 3: in on the adjusteday with the forecast. There's some sense

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Speaker 3: that you're investing in specific areas and that might be

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Speaker 3: impacting the bottom line. Right you're investing at the technology layer.

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Speaker 3: What are you doing and what's the goal there?

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Speaker 1: Yeah?

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Speaker 6: In Q one, you know, one of the key things

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Speaker 6: that impacted the overall business is we did absorb some

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Speaker 6: costs in New York as well as Seattle.

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Speaker 1: That cost is.

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Speaker 6: Going to continue to reduce as we go through the

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Speaker 6: rest of the year, as we make the business more efficient,

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Speaker 6: as we consider other opportunities to consider to make.

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Speaker 1: Those costs go down.

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Speaker 6: If you recall our business, the core restaurant's business has

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Speaker 6: actually been profitable for many years now. We're taking the

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Speaker 6: it's from that business and building two new businesses, grocery

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Speaker 6: as well as international, both of which are growing extremely fast.

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Speaker 6: They're growing faster than our restaurant's business. At the same time,

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Speaker 6: the profitability of both of those businesses is going up.

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Speaker 6: If you look at our new verticals business, the third

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Speaker 6: party component of it has been gross profit positive for

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Speaker 6: a few quarters now. Same is the case with international,

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Speaker 6: where many countries the restaurant business is actually contribution margin positive.

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Speaker 6: So overall the restaurant business profitability is improving. Our new

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Speaker 6: vehicles as well as international is also improving in profitability.

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Speaker 3: Just really quick. You mentioned Seattle in New York. There's

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Speaker 3: a kind of idiosyncratic factors in the quarter. Just explain

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Speaker 3: the basics to audience of what happened there. On the

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Speaker 3: policy front, Yeah, on the.

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Speaker 6: Policy, if I look up, our goal is always to

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Speaker 6: work with policymakers and regulators. We do that in over

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Speaker 6: hundreds of cities across thirty different countries to ensure we're

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Speaker 6: protecting the flexibility and accessibility the doctors and couriers across.

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Speaker 1: The globe we're asking for. I just HELFU are.

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Speaker 6: Honestly like extreme examples of that regulation.

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Speaker 1: We've taken some action to.

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Speaker 6: Change the way in which we operate. We're making the

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Speaker 6: business more efficient, and our goal is to continue to

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Speaker 6: work with policymakers in.

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Speaker 4: That regard, Let's just get details on operating profits. You

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Speaker 4: say they'll come in the near future. The market expects

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Speaker 4: the third quarter, are they right to expect that?

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Speaker 6: Look, I mean, our gap net loss is the lowest

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Speaker 6: in our history. What you're seeing in the business is

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Speaker 6: the growth is strong. Profitability across all lines of business

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Speaker 6: is improving. I do expect the trend to continue. And

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Speaker 6: if that trend continues on both the growth as well

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Speaker 6: as the profitability, the overall business is going to be

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Speaker 6: gap positive.

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Speaker 1: It's just a question of time.

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Speaker 6: Our free cap flow has been very strong. If you

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Speaker 6: look at the quarter, we've generated roughly about half a

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Speaker 6: billion dollars of free cash flow. And that's truly our

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Speaker 6: north star in being able to rabas in the business.

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Speaker 3: Robbi real quick, what are the specific consumer habits, the

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Speaker 3: size of the basket that they're doing, Lots of frequency,

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Speaker 3: little spend like little things like that.

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Speaker 6: Sure, what you're seeing in the business today is more

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Speaker 6: consumers ordering from more categories. Historically, people thought of us

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Speaker 6: purely as a restaurant delivery platform. Today are consumers roughly

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Speaker 6: about twenty percent of our consumers are ordering from convenience

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Speaker 6: grocery alcohol. We have increased the basket sizes across Robbi.

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Speaker 3: Rabbisfi, Robbi and a condo.

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Speaker 7: We've got to go.

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Speaker 8: Thank you.

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Speaker 7: Caron.

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Speaker 4: Yeah, if we have some breaking news, let's go to

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Speaker 4: the President Biden delivering remarks right now.

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Speaker 8: The first is the right to free speech and for

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Speaker 8: people to peacefully assemble and make their voices heard. The

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Speaker 8: second is the rule of law. Both must be upheld.

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Speaker 8: We are not an authoritarian nation where we silence people

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Speaker 8: or squash descent American people are heard. In fact, protests

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Speaker 8: is in the best tradition of how Americans respond to

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Speaker 8: consequential issues. But neither are we a lawless country. We

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Speaker 8: are a civil society. An order must prevail. Throughout our history.

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Speaker 8: We've often faced moments like this because we are a big, diverse,

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Speaker 8: free thinking and freedom loving nation, and moments like this

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Speaker 8: there are always those who rush in to score political points.

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Speaker 8: But this isn't a moment for politics. It's a moment

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Speaker 8: for clarity. So let me be clear. Peaceful protest in America.

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Speaker 8: Violent protest is not protected. Peaceful protest is. It's against

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Speaker 8: the law, violence occurs, Destroying property is not a peaceful protest.

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Speaker 1: It's against the law.

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Speaker 8: Vandalism, trespassing, breaking windows, shutting down campuses, forcing the cancelation

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Speaker 8: of classes and graduations. None of this is a peaceful protest.

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Speaker 8: Threatening people, instilling, firing people is not peaceful protest.

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Speaker 1: It's against the law.

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Speaker 8: Descent is essential to democracy, but descent must never lead

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Speaker 8: to disorder or to denying the rights of others, so

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Speaker 8: students can finish the semester and their college education. Look,

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Speaker 8: it's basically a matter of fairness. It's a matter of

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Speaker 8: what's right. There's the right to protest, but not the

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Speaker 8: right to cause chaos. People have the right to get

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Speaker 8: an education, the right to get a degree, the right

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Speaker 8: to walk across the campus safely without fear of being attacked.

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Speaker 8: But let's be clear about this as well. There should

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Speaker 8: be no place in any campus, no place in America

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Speaker 8: for anti semitism or threats of violence against Jewish students.

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Speaker 8: There is no place for hate speech or violence of

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Speaker 8: any kind, whether it's anti Semitism, Islamophobia, or discrimination against

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Speaker 8: Arab Americans or Palestinian Americans. It's simply wrong. There's no

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Speaker 8: place for racism in America. It's all wrong. It's not American.

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Speaker 8: I understand people have strong feelings and deep convictions in America.

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Speaker 8: We respect the right and protect the right for them

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Speaker 8: to express that. But it doesn't mean anything goes. It

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Speaker 8: needs to be done without violence, without destruction, without hate,

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Speaker 8: and within the law. You know, I'll make no mistake

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Speaker 8: as president. I will always defend free speech and I

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Speaker 8: will always be just as strong as standing up for

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Speaker 8: the rule of law. That's my responsibility to you, the

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Speaker 8: American people, and my obligation of the Constitution.

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Speaker 1: Thank you very much.

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Speaker 9: The protest forced you to be consider any of the

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Speaker 9: policies in regard to the region.

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Speaker 1: No, thank you.

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Speaker 7: Do you think the national.

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Speaker 4: President might delivering remarks at the White House regarding protests

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Speaker 4: student protests that's bring in Bluemug's Kaye lines for more

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Speaker 4: and against violence and destruction, but well full peaceful protest.

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Speaker 9: Yeah, the President making it clear that he does stand

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Speaker 9: by Americans' right to free speech and that that should

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Speaker 9: not be interfered with. But yes, Caroline, essentially that it

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Speaker 9: should be done peacefully. The President, and making these remarks

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Speaker 9: in the Roosevelt Room, said descent must never lead to

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Speaker 9: disorder or denial of rights, that the right to protest

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Speaker 9: does not mean the right to cause chaos, going on

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Speaker 9: to say that there is no place for anti Semitism

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Speaker 9: in America. He makes these remarks as he is facing

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Speaker 9: growing pressure to address what we're seeing happening on college

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Speaker 9: campuses across the country, from Columbia University to the West Coast,

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Speaker 9: with what we've seen at UCLA in the wee hours

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Speaker 9: this morning. All of it just speaking to the pressure

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Speaker 9: that he is under as he is trying to stand

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Speaker 9: by Israel as an ally, but there is growing concern

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Speaker 9: about the way Israel is conducting itself in its war

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Speaker 9: against a moss in Gaza. We just heard there the

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Speaker 9: President being asked by a reporter whether or not this

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Speaker 9: has all made him rethink his policy on Israel.

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Speaker 2: He said no.

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Speaker 9: He also said no to the question he was asked

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Speaker 9: about whether the National Guard should be interfering in these

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Speaker 9: instances on the college campuses. He said no to that

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Speaker 9: as well. I would also point out we will be

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Speaker 9: hearing from President Biden on the issue of anti Semitism

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Speaker 9: again next week on Tuesday, May seventh. He is planning

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Speaker 9: to speak at the Capital as part of the National

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Speaker 9: Holocaust Remembrance ceremony that will be happening on that date.

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Speaker 9: We heard from the White House Press Secretary of Karee

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Speaker 9: John Pierre yesterday who said the President will discuss the

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Speaker 9: moral duty to combat the rising scores of anti Semitism

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Speaker 9: and the administration's work on that issue. Of course, we

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Speaker 9: probably got a preview of some of what he will

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Speaker 9: likely say when we just heard him speak today.

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Speaker 3: Bloom bells Ka lines, thank you for the context on that.

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Speaker 3: It's interesting because we've been talking about protests at different

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Speaker 3: university campuses across the country and indeed across the world

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Speaker 3: for several days at least. Now, what was the politics

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Speaker 3: of this with the president, but what was the pressure

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Speaker 3: on the hill and the conversation about whether or not

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Speaker 3: Biden would come out and say anything, and the timing

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Speaker 3: of it.

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Speaker 9: Well, we had heard President Biden speak on this before,

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Speaker 9: saying that he condemns anti Semitism, although he also had

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Speaker 9: suggested that people need to understand what's going on with

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Speaker 9: the Palestinian people. But certainly the domestic political pressure has

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Speaker 9: been growing. We have seen specifically Republican members of Congress

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Speaker 9: really taking hold of this issue. We have seen the

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Speaker 9: House Speaker Mike Johnson, together with other Republican members of

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Speaker 9: the New York delegation actually going to the campus of

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Speaker 9: Columbia University just last week, and just last night, the

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Speaker 9: House passed by a wide bipartisan margin, a bill that

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Speaker 9: would essentially help the definition of anti Semitism be applied

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Speaker 9: differently with the Department of Education. There was some concern

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Speaker 9: that that would become a free speech issue, that it

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Speaker 9: would limit criticism of Israel or the Israeli government, for example,

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Speaker 9: but it still got through with a bipartisan majority. It's

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Speaker 9: unclear whether or not that will move forward in the Senate,

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Speaker 9: but you are definitely seeing through the legislature efforts to

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Speaker 9: combat anti Semitism. A lot of blame being cast on

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Speaker 9: President Biden, whether rightly or not, for what we're seeing

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Speaker 9: on college campuses, and of course he's been dealing with

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Speaker 9: the political ramifications of his wider policy toward Israel consistently

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Speaker 9: throughout this primary season, as we have seen actual Democratic

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Speaker 9: primary voters voting against alternatives, whether it be uncommitted or

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Speaker 9: something to the effect in different states like Michigan and others,

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Speaker 9: to express their discontent with how the president has been

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Speaker 9: handling his Israeli policy.

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Speaker 2: Talking of Israeli policy.

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Speaker 4: Breaking news that Turkey has indeed halted all trade with Israel.

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Speaker 4: That's both exports and imports to and from Israel as

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Speaker 4: of Thursday. That's according to two Turkish officials familiar with

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Speaker 4: the matter. Katie Lines bringing us the latest from what

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Speaker 4: the president has been saying. Meanwhile, now we want to

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Speaker 4: return our attention toward is in an investor's focus right now.

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Speaker 2: We are still a mid earning season.

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Speaker 4: Today is Apple reporting quarterly results after the market closes

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Speaker 4: later today, giving investors kind of a better sense of

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Speaker 4: how the iPhone maker is weathering at sales slump. We've also, though,

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Speaker 4: got to be talking about what on earth is happening

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Speaker 4: over at Peloton. It's its shares slump too. Bloomberg's Mark

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Speaker 4: Gum and for more on what to expect, let's just

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Speaker 4: kick off with Apple because it is the huge company

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Speaker 4: that many focus on.

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Speaker 2: What are we lining up for?

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Speaker 10: Yeah, Apple earnings? The expectation for the fifth time in

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Speaker 10: six quarters, Apple is going to report an annual decline.

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Speaker 10: Revenue is expected by Wall Street to come in at

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Speaker 10: about ninety billion in change, which would be about a

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Speaker 10: five billion dollar dip on year over year. The other

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Speaker 10: thing that's not so hot here. All of Apple's product categories,

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Speaker 10: so hardware categories, from the iPhone to the iPad, the Mac, wearables, AirPods,

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Speaker 10: those are expected to decline on an annual basis, with

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Speaker 10: the only bright spot potentially being actually some pretty significant

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Speaker 10: growth in the services business. Also another decline in Greater China,

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Speaker 10: right on the heels of reports from Counterpoint in IDC

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Speaker 10: and others that iPhone sales in China dipped by about

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Speaker 10: a fifth despite the smartphone market going up in general.

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Speaker 10: So overall ninety billion in revenue. That's a big number.

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Speaker 10: That's amazing for most companies, but for Apple, Wall Street

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Speaker 10: probably would have liked a little bit more.

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Speaker 3: Mark Hardware and Services is a pretty wild story when

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Speaker 3: it comes to Peloton Bluembo technology team. Let's show the

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Speaker 3: two day chart and just go back over what happened.

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Speaker 3: Opened up as high as eighteen percent, is now down

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Speaker 3: more than ten percent in the session. The CEO is

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Speaker 3: going after two years, another headcount reduction, and I think

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Speaker 3: no sign really that Peloton's got a strategy to get

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Speaker 3: itself out of trouble. Give me the details.

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Speaker 10: I don't think people realize how close Peloton is to bankruptcy. Right,

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Speaker 10: they'll be lucky to remain on the stock market much longer.

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Speaker 10: If you ask me, I'm shocked that Barry McCarthy stuck

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Speaker 10: around so long. There is nothing he didn't try. There

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Speaker 10: is nothing he didn't do. He's laid off several thousand people,

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Speaker 10: He's moved from a hardware focus to a content and

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Speaker 10: subscription focus, restructured the company multiple times, hired new executives

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Speaker 10: to write the ship, outsourced pretty much everything you could outsource,

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Speaker 10: from installation to shipping to manufacturing. And here we are

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Speaker 10: missing Wall Street expectations, missing internal forecasts. People still not

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Speaker 10: buying as many bikes and rows and different Peloton appliances

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Speaker 10: as you would expect, the premium app falling flat on

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Speaker 10: its face. Yes, people like their marketing chief continuing to

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Speaker 10: leave Pelotons in its worshape as it's ever been. And

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Speaker 10: they have no CEO running the company.

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Speaker 3: Just looking at the Bloomberg terminal, and just to give

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Speaker 3: some specifics, the stock is at a record low. They

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Speaker 3: ended the quarter with about seven hundred million dollars seven

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Speaker 3: hundred and thirty seven million dollars of cash, and they

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Speaker 3: did say that because of the headcut count reduction, they'll

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Speaker 3: say about two hundred million dollars a year and cash

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Speaker 3: flow positivity is possible by the fourth quarter. But as

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Speaker 3: you outline, Mark, the situation of Peloton, which is a

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Speaker 3: company way off its pandemic era high, is pretty bleak.

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Speaker 3: Bloombo's Mark German. Stay tuned for his reporting on a

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Speaker 3: Apple as well after the belt. Now coming up, chip

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Speaker 3: maker Quial com up with earnings in a strong forecast.

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Speaker 3: There's a lot to talk about with CEO Christiano Ramon

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Speaker 3: about the AI smartphone and the AIPC. That conversation is

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Speaker 3: coming up. This is Bloomberg Technology.

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Speaker 2: Time now for talking tech.

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Speaker 4: First up, video game publisher Take too Interactive and plans

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Speaker 4: to shut down two subsidiaries as part of a mass

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Speaker 4: layoff across its divisions over in London and Seattle.

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Speaker 2: That's according to documents review by Bloomberg Now.

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Speaker 4: Last month, Take two said it would lay off five

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Speaker 4: percent of its staff.

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Speaker 2: That's around six hundred workers. Meanwhile, let's take a look

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Speaker 2: at Starlink, as it's still operating.

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Speaker 4: In multiple unauthorized regions even after the company issued warnings

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Speaker 4: last month that its satellite internet will be shut down by.

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Speaker 2: May first in those areas.

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Speaker 4: These notices come after a March investigation by bloombag News,

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Speaker 4: which first revealed the extent which Musk's satellites are being

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Speaker 4: used in countries where it is illegal to operate, including

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Speaker 4: in territories ruled by repressive regimes. And regulators moved to

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Speaker 4: bar a Huawei lab from approving telecom gear.

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Speaker 2: For use in the United States.

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Speaker 4: Now it's a proposed similar moves now against other providers

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Speaker 4: deemed a national security threat, including several Chinese companies. The

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Speaker 4: SEC says this will ensure that these non government labs

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Speaker 4: aren't quote influenced by untrustworthy actors.

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Speaker 2: And we've got more Hunhuawei.

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Speaker 3: This is another big Bloomberg story. Chinese seller communication as

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Speaker 3: giant Huawei is secretly funding cutting edge research at American universities,

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Speaker 3: including Harvard, through an independent Washington based foundation. Here with

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Speaker 3: the scoop is Bloomberg's k O'Keeffe in Kate. At the

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Speaker 3: heart of this reporting, like all good Bloomberg reporting, is

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Speaker 3: you following the money. What did following the money tell you?

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Speaker 2: Right?

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Speaker 11: Well, what we saw is that over the past few years,

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Speaker 11: Huawei has funded hundreds of researchers and spent millions of

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Speaker 11: dollars and it was all really without their knowledge. They

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Speaker 11: thought they were being funded by a foundation based in Washington,

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Speaker 11: DC that is called the Optica.

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Speaker 4: Foundation competition administered by Optica and in fact Grant's I

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Speaker 4: think you say, there are eleven opportunities on the Optica

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Speaker 4: Foundation website to have early career prizes and fellowships, but

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Speaker 4: all but the Huawei funded competition are basically clear about

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Speaker 4: which backers are providing the money. What did ultimately the

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Speaker 4: Optica Foundation save for its quietness on Huawei's money.

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Speaker 11: Right exactly, So the other ten opportunities are made clear

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Speaker 11: that they were funded by an individual or a company

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Speaker 11: or some combination. The Huawei funded prize appeared to all

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Speaker 11: the people that I spoke with to be funded by

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Speaker 11: the foundation's general funds, and the response from Optica's CEO

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Speaker 11: was that, look.

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Speaker 7: You know, there's a lot of donors who.

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Speaker 11: Want to remain anonymous, including US donors, and you know, effectively,

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Speaker 11: you know, there's no issue with it.

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Speaker 3: There is examples in other jurisdictions of Huawei being a

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Speaker 3: bit more public having initiatives to make inbros in those markets,

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Speaker 3: I think, particularly in Europe, Kate, explain what you learned there.

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Speaker 7: Yeah, that's right.

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Speaker 11: I mean, as we as we reported in countries like France,

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Speaker 11: in Germany, Huawei is openly funding, you know, research centers.

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Speaker 7: In the US, it's a really different story.

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Speaker 11: Because several years ago the US government moved on multiple

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Speaker 11: fronts to restrict restrict Huawei. One of the major restrictions

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Speaker 11: that have been in place are at sport controls, and

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Speaker 11: that blocks people and individual people and companies from sharing

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Speaker 11: tech with Huawei.

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Speaker 7: But what's interesting about this.

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Speaker 11: Competition is it actually kind of falls through the cracks

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Speaker 11: of all these different regulations because it deals with academic research,

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00:23:16,000 --> 00:23:18,560
Speaker 11: which is for the most part meant to be published,

440
00:23:18,640 --> 00:23:21,320
Speaker 11: and therefore it is not subject to the current export

441
00:23:21,359 --> 00:23:23,080
Speaker 11: controls that we have in place in the US.

442
00:23:23,520 --> 00:23:26,800
Speaker 4: Nevertheless, and as a great quote in your piece says,

443
00:23:27,200 --> 00:23:31,000
Speaker 4: it's a bad look for prestigious research foundation to be

444
00:23:31,040 --> 00:23:35,880
Speaker 4: anonymously accepting money from a Chinese company. So really, ultimately

445
00:23:35,920 --> 00:23:38,600
Speaker 4: this is about sort of the feel of it rather

446
00:23:38,640 --> 00:23:40,160
Speaker 4: than actually the letter of the law.

447
00:23:42,160 --> 00:23:45,600
Speaker 11: Well, right, there's nothing illegal about this as far as

448
00:23:45,960 --> 00:23:49,800
Speaker 11: I could tell in my reporting. It does, though, put

449
00:23:49,840 --> 00:23:53,159
Speaker 11: the universities who actually accept the money on behalf of

450
00:23:53,240 --> 00:23:57,199
Speaker 11: these researchers, as well as the researchers themselves in an

451
00:23:57,240 --> 00:24:00,439
Speaker 11: uncomfortable position because a lot of the university these have

452
00:24:01,400 --> 00:24:04,360
Speaker 11: decided independently that you know, they don't want to work

453
00:24:04,359 --> 00:24:07,000
Speaker 11: with well anymore. Some of them have made public statements

454
00:24:07,040 --> 00:24:10,120
Speaker 11: about that, and so they're in this weird spot now

455
00:24:10,160 --> 00:24:13,480
Speaker 11: where some of their researchers have gotten money already but

456
00:24:13,920 --> 00:24:16,399
Speaker 11: you know, to do good work, to do science, but

457
00:24:16,520 --> 00:24:18,879
Speaker 11: they didn't know who was ultimately funding it, and you know,

458
00:24:18,960 --> 00:24:22,679
Speaker 11: maybe something different would have happened had they known the

459
00:24:22,680 --> 00:24:23,600
Speaker 11: true source of funding.

460
00:24:24,200 --> 00:24:28,320
Speaker 4: Kate o'keith, first, great big deep dive for us here

461
00:24:28,359 --> 00:24:28,920
Speaker 4: at Bridemerg.

462
00:24:29,000 --> 00:24:31,560
Speaker 2: We so appreciate you joining the show. Thank you very much.

463
00:24:31,600 --> 00:24:38,240
Speaker 3: Indeed, welcome to our Bloomberg television and radio audiences worldwide.

464
00:24:38,320 --> 00:24:42,359
Speaker 3: Quowdcom stock significantly higher around ten percent the story. Things

465
00:24:42,359 --> 00:24:45,439
Speaker 3: look like they're improving in the smartphone market globally, and

466
00:24:45,480 --> 00:24:48,480
Speaker 3: within that there's a lot of nuance. There is specific

467
00:24:48,520 --> 00:24:51,520
Speaker 3: action in China and there's strength also for the chips

468
00:24:51,520 --> 00:24:54,439
Speaker 3: that go into cars in the automotive sector. Delighted to

469
00:24:54,480 --> 00:24:57,919
Speaker 3: say that Quidcom CEO Christiana and one joins us. Now,

470
00:24:58,280 --> 00:25:01,000
Speaker 3: good morning to you, Christiano, and let's start with China.

471
00:25:01,359 --> 00:25:04,400
Speaker 3: What you guys said is that sales to Chinese handset

472
00:25:04,440 --> 00:25:08,679
Speaker 3: makers serves forty percent in the first half. But I

473
00:25:08,680 --> 00:25:11,680
Speaker 3: wonder what the story behind that is in the end market,

474
00:25:11,840 --> 00:25:16,120
Speaker 3: what's happening, particularly with Android based platforms for the Chinese consumer.

475
00:25:17,359 --> 00:25:19,439
Speaker 12: Very good good morning to you as well. It's a

476
00:25:19,480 --> 00:25:23,720
Speaker 12: great morning I think today. But look the story on

477
00:25:23,800 --> 00:25:27,520
Speaker 12: hints's in China. It's pretty simple. We've seen the market

478
00:25:27,680 --> 00:25:30,560
Speaker 12: had stabilized. We had said about that a couple quarters ago,

479
00:25:31,160 --> 00:25:36,560
Speaker 12: and users aren't buying better phones. It's really for us

480
00:25:36,640 --> 00:25:39,840
Speaker 12: a story of flagship and high tiers within the Android,

481
00:25:40,359 --> 00:25:43,320
Speaker 12: especially a lot of those flagships that are launching with Genai.

482
00:25:44,000 --> 00:25:47,840
Speaker 12: I think we see the very beginning of Genai coming

483
00:25:47,920 --> 00:25:52,560
Speaker 12: to devices and that actually drove you know, a lot

484
00:25:52,560 --> 00:25:55,760
Speaker 12: of the growth. And it's forty percent not only in

485
00:25:55,880 --> 00:25:59,639
Speaker 12: this quarter, but actually expected to have the same in

486
00:25:59,720 --> 00:26:02,200
Speaker 12: the next. As we as we look at the guide,

487
00:26:02,320 --> 00:26:05,040
Speaker 12: he has been a good story as the smartphone markets

488
00:26:05,040 --> 00:26:08,480
Speaker 12: stabilize it and Android flagship has stayed resilient.

489
00:26:09,680 --> 00:26:12,280
Speaker 3: Christiana, As you know and our audience knows, we will

490
00:26:12,320 --> 00:26:14,880
Speaker 3: talk about on device when it comes to generative AI.

491
00:26:15,280 --> 00:26:18,080
Speaker 3: Let's just linger a moment longer on China. It looks

492
00:26:18,119 --> 00:26:21,160
Speaker 3: like some of the domestic players that Android base are

493
00:26:21,200 --> 00:26:24,600
Speaker 3: gaining market share against Apple and the iPhone. You see

494
00:26:24,600 --> 00:26:26,480
Speaker 3: that in the I d C data, you see it

495
00:26:26,480 --> 00:26:29,960
Speaker 3: in the counterpoint research data. If that is the case,

496
00:26:30,560 --> 00:26:33,399
Speaker 3: where the domestic players are gaining that market share, what

497
00:26:33,480 --> 00:26:34,600
Speaker 3: does it mean for Qualcom.

498
00:26:36,080 --> 00:26:40,760
Speaker 12: Look the way you should think about our position in

499
00:26:40,840 --> 00:26:44,560
Speaker 12: China in the hinter market, we have been very focused

500
00:26:45,040 --> 00:26:48,400
Speaker 12: on the premium in height tier word Snapdragon. So when

501
00:26:49,000 --> 00:26:52,679
Speaker 12: when an Android OEM from our customers show me up

502
00:26:52,800 --> 00:26:57,520
Speaker 12: a one plus Honor Vivo when they're selling a flagship device,

503
00:26:57,800 --> 00:26:59,520
Speaker 12: we have a lot of content. Not only we have

504
00:26:59,600 --> 00:27:01,720
Speaker 12: the more content, but we have a lot of the

505
00:27:01,760 --> 00:27:05,840
Speaker 12: application processor, the AI engine. So that has been a

506
00:27:05,960 --> 00:27:09,680
Speaker 12: positive development and that's what is being driving the content

507
00:27:09,760 --> 00:27:13,000
Speaker 12: increase and the ASP increased, especially when the mix changes

508
00:27:13,040 --> 00:27:16,159
Speaker 12: to a premium device. The fact that the Android flagship

509
00:27:16,240 --> 00:27:21,520
Speaker 12: in China with the Chinese OEMs had been stable, proven

510
00:27:21,560 --> 00:27:25,400
Speaker 12: to be resilient in see positive momento at the mixed

511
00:27:25,440 --> 00:27:29,040
Speaker 12: get richer Chinese users are buying a better phone. That's

512
00:27:29,080 --> 00:27:31,840
Speaker 12: a good story for Qualcom and it's reflected into numbers.

513
00:27:32,359 --> 00:27:36,080
Speaker 4: Is there any anxiety from a political perspective, Christiano, You've

514
00:27:36,080 --> 00:27:38,200
Speaker 4: obviously weathered the fact that you're.

515
00:27:38,000 --> 00:27:40,280
Speaker 2: Only in Huawei four G phones.

516
00:27:40,320 --> 00:27:43,800
Speaker 4: Now you're actually seeing basically ultimately revenue pull away by

517
00:27:43,800 --> 00:27:47,080
Speaker 4: the end of this year for Huawei. But the geopolitical

518
00:27:47,119 --> 00:27:49,840
Speaker 4: context is clear. How difficult is it to you to

519
00:27:49,840 --> 00:27:51,000
Speaker 4: be so dependent on China.

520
00:27:52,320 --> 00:27:55,280
Speaker 12: Look, the first thing I want to say is our

521
00:27:55,320 --> 00:27:58,160
Speaker 12: business is not just China, and I think what happened

522
00:27:58,480 --> 00:28:01,880
Speaker 12: with the smartphone this is a phenomenon globally. I think

523
00:28:01,880 --> 00:28:04,439
Speaker 12: you even saw Samsung when they talk about it the

524
00:28:04,480 --> 00:28:06,960
Speaker 12: earnings called they have a commentary about the device AI

525
00:28:07,080 --> 00:28:08,600
Speaker 12: opportunity for flagships.

526
00:28:09,000 --> 00:28:09,560
Speaker 1: It is real.

527
00:28:10,040 --> 00:28:12,520
Speaker 12: So the second part is the way we think about

528
00:28:12,560 --> 00:28:16,879
Speaker 12: everything is if you have a leadership position in technology,

529
00:28:16,880 --> 00:28:18,679
Speaker 12: you're going to have a big business in China. It's

530
00:28:18,720 --> 00:28:20,879
Speaker 12: just a function of the size of the market. And

531
00:28:20,920 --> 00:28:23,200
Speaker 12: I think that's been true not only for Qualcom, for

532
00:28:23,200 --> 00:28:26,840
Speaker 12: a lot of other companies that have leadership product position.

533
00:28:27,359 --> 00:28:28,600
Speaker 1: And to this.

534
00:28:28,760 --> 00:28:32,480
Speaker 12: Point, I think we have been seeing our business in

535
00:28:32,600 --> 00:28:35,760
Speaker 12: China can continue to be a stable business. We have

536
00:28:35,880 --> 00:28:38,320
Speaker 12: not been restricted by like everybody else in the industry,

537
00:28:38,320 --> 00:28:40,600
Speaker 12: you have to monitor the situation. I think this is

538
00:28:41,080 --> 00:28:44,280
Speaker 12: how we have to navigate in the semiconductor industry. But

539
00:28:44,320 --> 00:28:46,160
Speaker 12: we're happy with the results we have right now.

540
00:28:46,400 --> 00:28:48,960
Speaker 4: Let's go therefore to the technology that is winning out,

541
00:28:49,080 --> 00:28:51,800
Speaker 4: and you talk about AI on device, how are people

542
00:28:51,880 --> 00:28:54,400
Speaker 4: using it? You've got snaptrack at eight series Gen three

543
00:28:54,520 --> 00:28:57,640
Speaker 4: mobile platform that's really meant to be supporting generative AI

544
00:28:57,760 --> 00:29:01,840
Speaker 4: at the moment, basically with a personal assystement assistant potentially,

545
00:29:01,880 --> 00:29:05,400
Speaker 4: But how is that a reality for any or many?

546
00:29:06,480 --> 00:29:08,480
Speaker 12: Look, I love talking about this and I wish I

547
00:29:08,560 --> 00:29:10,280
Speaker 12: had a lot of time, so I'm going to try

548
00:29:10,320 --> 00:29:13,600
Speaker 12: to summarize it in just a few minutes.

549
00:29:13,880 --> 00:29:15,200
Speaker 1: The first thing that is happening.

550
00:29:15,240 --> 00:29:17,800
Speaker 12: You need to think about AI running on the cloud

551
00:29:17,840 --> 00:29:21,000
Speaker 12: and the device as a new way of doing computing.

552
00:29:21,560 --> 00:29:24,320
Speaker 12: And we're just at the very beginning of the use cases.

553
00:29:24,360 --> 00:29:28,120
Speaker 12: So right now we can see, for example, multiple tens

554
00:29:28,160 --> 00:29:30,960
Speaker 12: of use cases, and I expect that within six months

555
00:29:30,960 --> 00:29:34,160
Speaker 12: from now will be hundreds, if not more. What are

556
00:29:34,200 --> 00:29:37,719
Speaker 12: people doing with it? You see some use cases of

557
00:29:37,720 --> 00:29:40,000
Speaker 12: life translate. You can watch a video, you can add

558
00:29:40,280 --> 00:29:43,120
Speaker 12: a subtitle in any language, you want. You can do

559
00:29:43,160 --> 00:29:46,480
Speaker 12: a lot of real time photo editing. You can change

560
00:29:46,920 --> 00:29:49,880
Speaker 12: a lot of the images with the way you like it.

561
00:29:49,960 --> 00:29:53,400
Speaker 12: You can create new images, you can summarize documents. But

562
00:29:53,480 --> 00:29:57,680
Speaker 12: the most important thing is the other thing that it's

563
00:29:57,720 --> 00:29:59,560
Speaker 12: going to bring the phones. I'm going to give you

564
00:29:59,560 --> 00:30:03,240
Speaker 12: a point to an example. More and more you do

565
00:30:03,360 --> 00:30:05,720
Speaker 12: more things on the phone today, but there are things

566
00:30:05,880 --> 00:30:07,520
Speaker 12: that you're going to think about it. You know what,

567
00:30:07,600 --> 00:30:10,760
Speaker 12: I have to respond to this very long email. I'd

568
00:30:10,840 --> 00:30:13,160
Speaker 12: rather wait until I get to my laptop. When you

569
00:30:13,160 --> 00:30:16,120
Speaker 12: think about a Microsoft Copilot in the phone, for example,

570
00:30:16,440 --> 00:30:19,440
Speaker 12: you're going to see a lot more use of those devices.

571
00:30:19,480 --> 00:30:22,600
Speaker 12: We're going to see much much more productivity. So we're

572
00:30:22,720 --> 00:30:26,000
Speaker 12: the beginning of something great. It's going to take some time.

573
00:30:26,280 --> 00:30:28,480
Speaker 12: Use cases are developing. You should think about this. What

574
00:30:28,600 --> 00:30:31,280
Speaker 12: happened with the smartphone. In the beginning, there's just a

575
00:30:31,320 --> 00:30:34,680
Speaker 12: few apps in the app store, but then all of

576
00:30:34,760 --> 00:30:38,000
Speaker 12: a sudden, the apps started to define the user experience.

577
00:30:38,160 --> 00:30:40,920
Speaker 12: That's how we feel about AI were the beginning. It's

578
00:30:40,920 --> 00:30:42,480
Speaker 12: going to take a little bit of time, but the

579
00:30:42,560 --> 00:30:43,320
Speaker 12: signs are great.

580
00:30:44,960 --> 00:30:48,080
Speaker 3: For a Bloomberg television and radio audiences worldwide, we're speaking

581
00:30:48,080 --> 00:30:51,320
Speaker 3: to the culowdcom CEO, Christiano Amon, and I think you

582
00:30:51,360 --> 00:30:54,160
Speaker 3: summed it up well. Christiana. We're in the very early

583
00:30:54,240 --> 00:30:57,960
Speaker 3: stages of the world where we're running ten billion parameter

584
00:30:58,080 --> 00:31:01,800
Speaker 3: models locally on device on the small inside. But we're

585
00:31:01,840 --> 00:31:03,600
Speaker 3: already talking about the AIPC.

586
00:31:04,440 --> 00:31:04,640
Speaker 1: Right.

587
00:31:04,800 --> 00:31:08,200
Speaker 3: You guys have your latest generation which will come to

588
00:31:08,280 --> 00:31:13,400
Speaker 3: market Snapdragon ten Elite and plus, and it's very impressive

589
00:31:13,440 --> 00:31:17,000
Speaker 3: combination of CPU, GPU, NPU. Give me a minute, we'll

590
00:31:17,000 --> 00:31:19,440
Speaker 3: talk about MPU. But I still think a lot of

591
00:31:19,480 --> 00:31:22,080
Speaker 3: people struggle to say, what am I going to do

592
00:31:22,160 --> 00:31:25,320
Speaker 3: sitting in a cafe running allion dollar a ten billion

593
00:31:25,360 --> 00:31:29,000
Speaker 3: parameter model while I have a cappuccino, Like, what's the

594
00:31:29,040 --> 00:31:29,840
Speaker 3: actual real.

595
00:31:29,680 --> 00:31:30,440
Speaker 13: World use case?

596
00:31:31,560 --> 00:31:35,720
Speaker 12: Okay, you know, we could not be more excited about

597
00:31:35,760 --> 00:31:40,480
Speaker 12: what's happening in PC. I really think PC is reborn

598
00:31:40,840 --> 00:31:44,040
Speaker 12: with the Snapdragon ex Elite, and it's not only because

599
00:31:44,040 --> 00:31:47,320
Speaker 12: of the performance, but because actually AI. By the way,

600
00:31:47,360 --> 00:31:50,800
Speaker 12: we can run twenty billion parameter on the ax Elite.

601
00:31:51,520 --> 00:31:54,880
Speaker 12: This is it's it's evolving very very fast. But the

602
00:31:54,960 --> 00:31:58,600
Speaker 12: use case are really incredible. Think about now there's AI

603
00:31:58,760 --> 00:32:01,960
Speaker 12: running all the time. Everything you're doing on your PC.

604
00:32:02,680 --> 00:32:06,000
Speaker 12: It is running and it's private, it's your data, it's

605
00:32:06,040 --> 00:32:09,280
Speaker 12: your use. The ICE learning about you, stray to understand

606
00:32:09,280 --> 00:32:13,160
Speaker 12: your intent. And we starting to see right now with

607
00:32:13,240 --> 00:32:16,480
Speaker 12: the Microsoft Copilot that you can use the Copilot for everything,

608
00:32:16,680 --> 00:32:19,520
Speaker 12: for PowerPoint, for Excel, for Word or email.

609
00:32:19,600 --> 00:32:20,360
Speaker 1: But it's much more.

610
00:32:20,440 --> 00:32:24,120
Speaker 12: The AI is helping you recall documents that you have

611
00:32:24,360 --> 00:32:27,440
Speaker 12: on that you've seen or you have on your computer.

612
00:32:27,720 --> 00:32:30,120
Speaker 12: It's going to help you do things, going to reminding

613
00:32:30,520 --> 00:32:33,280
Speaker 12: of things that you have to do or even it's

614
00:32:33,320 --> 00:32:36,040
Speaker 12: going to help you with tasks that you need. You

615
00:32:36,080 --> 00:32:37,920
Speaker 12: don't know how to do it, and they will help

616
00:32:37,960 --> 00:32:40,560
Speaker 12: you one step of the way. That's going to change

617
00:32:40,600 --> 00:32:44,320
Speaker 12: how we use our computers. And the interesting thing is

618
00:32:44,840 --> 00:32:47,680
Speaker 12: how do you do this in a way that you

619
00:32:47,720 --> 00:32:49,320
Speaker 12: don't compromise battery life.

620
00:32:49,440 --> 00:32:51,720
Speaker 1: A CPU and a GPU have a job to do.

621
00:32:51,840 --> 00:32:53,600
Speaker 12: And that's why when you buy a PC today, you

622
00:32:53,640 --> 00:32:55,640
Speaker 12: want a fest CPU and a fast GPU, but you

623
00:32:55,880 --> 00:32:58,040
Speaker 12: need a whole new engine that needs to do something

624
00:32:58,040 --> 00:33:00,200
Speaker 12: else and needs to do it all the time and

625
00:33:00,240 --> 00:33:01,800
Speaker 12: not compromise battery life.

626
00:33:02,040 --> 00:33:04,640
Speaker 1: That's the Qualcom story, and what is.

627
00:33:04,600 --> 00:33:07,080
Speaker 2: The market share story of Qualcolm.

628
00:33:07,280 --> 00:33:10,360
Speaker 4: We've been hearing a lot about other competitors getting into

629
00:33:10,360 --> 00:33:11,520
Speaker 4: the AIPC space.

630
00:33:12,760 --> 00:33:15,880
Speaker 12: I think this is the great story for Qualcom because

631
00:33:15,880 --> 00:33:19,480
Speaker 12: we're new, we're just entering the market. I think we're

632
00:33:19,560 --> 00:33:21,760
Speaker 12: going to see a lot of the devices coming up

633
00:33:21,800 --> 00:33:24,920
Speaker 12: in the second half of this year. I encourage everybody

634
00:33:24,960 --> 00:33:27,720
Speaker 12: to watch the Microsoft build and the incredible things they're

635
00:33:27,720 --> 00:33:31,680
Speaker 12: doing with the new Windows, and I think what's going

636
00:33:31,760 --> 00:33:37,000
Speaker 12: to happen is Qualcom is coming in with the leadership product.

637
00:33:37,160 --> 00:33:38,440
Speaker 1: We like the design traction.

638
00:33:39,040 --> 00:33:41,440
Speaker 12: Financially, that's going to be more of a fiscal twenty

639
00:33:41,480 --> 00:33:43,880
Speaker 12: five event because a lot of the laptops are going

640
00:33:43,880 --> 00:33:46,720
Speaker 12: to be in the shelves for the second half and

641
00:33:46,800 --> 00:33:50,760
Speaker 12: back to school. But the product momentum is great. And

642
00:33:50,800 --> 00:33:53,360
Speaker 12: here's how you should think about Qualcom market share in general.

643
00:33:54,160 --> 00:33:57,400
Speaker 12: One thing about the company, and it's been the history

644
00:33:57,440 --> 00:33:59,640
Speaker 12: of the company, everything that we set ourselves to do.

645
00:34:00,000 --> 00:34:01,720
Speaker 1: The track record exactly not bad.

646
00:34:01,920 --> 00:34:04,680
Speaker 12: When we entered the Wi Fi or, we became number one,

647
00:34:04,760 --> 00:34:08,360
Speaker 12: we entered the rfron end, we became number one automotive,

648
00:34:08,400 --> 00:34:10,239
Speaker 12: we said we're going to go into automotive. I think

649
00:34:10,239 --> 00:34:13,239
Speaker 12: our story there is very very good. We're becoming the

650
00:34:13,280 --> 00:34:15,960
Speaker 12: prefer partner of the industry. We said we're going to

651
00:34:16,040 --> 00:34:19,399
Speaker 12: enter the metaphorse we have every single design. Now we're

652
00:34:19,400 --> 00:34:21,600
Speaker 12: saying we're going to enter the PC. And we started

653
00:34:21,640 --> 00:34:24,719
Speaker 12: off the gate with the leadership in the product. So

654
00:34:24,960 --> 00:34:27,799
Speaker 12: you know, as we continue to execute, time is going

655
00:34:27,840 --> 00:34:29,719
Speaker 12: to show that we can gain share and can be

656
00:34:29,760 --> 00:34:33,200
Speaker 12: a significant player. After that, it's going to be industrial

657
00:34:33,760 --> 00:34:36,800
Speaker 12: as we continue to execute on the growth diversification of

658
00:34:36,880 --> 00:34:37,400
Speaker 12: the company.

659
00:34:37,680 --> 00:34:41,480
Speaker 4: Fart intwo call com CEO Cristiano Aman, We thank you

660
00:34:41,760 --> 00:34:43,120
Speaker 4: for bringing the energy today.

661
00:34:43,760 --> 00:34:45,279
Speaker 1: Thank you great talking to both of you.

662
00:34:53,920 --> 00:34:55,319
Speaker 3: All right, let's get some news in the world of

663
00:34:55,360 --> 00:34:58,880
Speaker 3: private markets and venture. Blood testing company carry Us raised

664
00:34:59,040 --> 00:35:01,319
Speaker 3: one hundred million dollars in a new funding round from

665
00:35:01,400 --> 00:35:05,720
Speaker 3: investors led by existing investor Coastal Adventures, alongside five AM

666
00:35:05,840 --> 00:35:09,800
Speaker 3: Ventures and Glide Healthcare. The company declined to give its valuation,

667
00:35:09,960 --> 00:35:11,799
Speaker 3: but says that we use the cash to get its

668
00:35:11,840 --> 00:35:17,480
Speaker 3: technology for detecting hard to identify infections in to more hospitals.

669
00:35:18,080 --> 00:35:20,759
Speaker 3: Let's stick with all things private venture and startups and

670
00:35:20,800 --> 00:35:24,759
Speaker 3: bring in CRV general partner Max Gaza on today's VC

671
00:35:24,880 --> 00:35:29,279
Speaker 3: Spotlight producer Extraordinairy Marguerite Gallery, and he's been crunching the

672
00:35:29,360 --> 00:35:32,400
Speaker 3: numbers on IPO activity. You don't really need to crunch

673
00:35:32,600 --> 00:35:35,799
Speaker 3: the numbers because we've been quite busy of late, and

674
00:35:35,800 --> 00:35:39,440
Speaker 3: we had a pocket in September. Your affirm that invests

675
00:35:39,480 --> 00:35:44,520
Speaker 3: at the seed and Series A stage. What are the

676
00:35:44,600 --> 00:35:48,160
Speaker 3: numbers that you crunch when activity is happening in the market.

677
00:35:48,440 --> 00:35:49,759
Speaker 1: Yeah, well, great to be back.

678
00:35:50,600 --> 00:35:53,040
Speaker 13: Last time I was here in January, we mentioned that

679
00:35:53,080 --> 00:35:55,680
Speaker 13: we counted over one hundred companies that we felt were

680
00:35:55,760 --> 00:35:59,240
Speaker 13: ip already, and I'm glad to report that that number

681
00:35:59,320 --> 00:36:03,200
Speaker 13: is still holding strong. We've seen also some great activity

682
00:36:03,200 --> 00:36:07,280
Speaker 13: in the public markets with Rubric going out first software

683
00:36:07,280 --> 00:36:10,680
Speaker 13: IPO of twenty four. We saw some strength with the

684
00:36:10,719 --> 00:36:15,560
Speaker 13: Sterei Labs, which is an AI infrastructure hardware play arm held.

685
00:36:15,400 --> 00:36:16,480
Speaker 1: Up post lock up.

686
00:36:16,840 --> 00:36:19,080
Speaker 13: These are all data points that would suggest that not

687
00:36:19,120 --> 00:36:21,200
Speaker 13: only is the IPO market strong, but the M and

688
00:36:21,200 --> 00:36:24,200
Speaker 13: A market is thawing as well. So with Hashi Corporate

689
00:36:24,239 --> 00:36:27,400
Speaker 13: IBM and talks of informatic and salesforce, we feel that

690
00:36:27,440 --> 00:36:30,080
Speaker 13: the big thoughts here were very optimistic for twenty four

691
00:36:30,160 --> 00:36:31,320
Speaker 13: and into twenty five.

692
00:36:31,280 --> 00:36:33,000
Speaker 3: And the reason that we want to have you on

693
00:36:33,040 --> 00:36:36,200
Speaker 3: the show, and I guess that you give yourselves a

694
00:36:36,239 --> 00:36:38,200
Speaker 3: little put on the back is that you identify the

695
00:36:38,320 --> 00:36:41,280
Speaker 3: names early that go on to be successful. It seems

696
00:36:41,320 --> 00:36:44,680
Speaker 3: to me though, like even pre seed, but seed in

697
00:36:44,760 --> 00:36:48,360
Speaker 3: Series A is becoming a very competitive space in the

698
00:36:48,360 --> 00:36:49,200
Speaker 3: context of AI.

699
00:36:50,040 --> 00:36:50,680
Speaker 1: Absolutely.

700
00:36:51,400 --> 00:36:53,399
Speaker 13: You know, look, AI is one of those things that

701
00:36:53,560 --> 00:36:54,600
Speaker 13: people are focused on.

702
00:36:54,680 --> 00:36:57,040
Speaker 1: Every VC in the valley is looking at AI.

703
00:36:57,560 --> 00:37:00,560
Speaker 13: We think of it not just as an innovation from

704
00:37:00,560 --> 00:37:03,840
Speaker 13: a technology point of view, there is a technology you know,

705
00:37:03,880 --> 00:37:07,280
Speaker 13: step function and change there, but also from a business

706
00:37:07,280 --> 00:37:09,320
Speaker 13: model point of view. So let me give you an example.

707
00:37:09,760 --> 00:37:12,880
Speaker 13: Most software today is sold via license model. Whether you

708
00:37:13,000 --> 00:37:15,200
Speaker 13: use it or not, you pay for the license and

709
00:37:15,520 --> 00:37:18,080
Speaker 13: you know that's that, or it's a seat based model

710
00:37:18,080 --> 00:37:21,120
Speaker 13: where it's per set. What if that business model changes

711
00:37:21,200 --> 00:37:23,400
Speaker 13: to a per consumption basis, so you pay for the

712
00:37:23,880 --> 00:37:27,280
Speaker 13: for every task that the AI completes. If that holds,

713
00:37:27,320 --> 00:37:29,160
Speaker 13: we're at the dawn of a new era in business

714
00:37:29,239 --> 00:37:32,480
Speaker 13: software because it's a transformational shift and how software will

715
00:37:32,480 --> 00:37:34,920
Speaker 13: be sold and AI is enabling that. So we're not

716
00:37:35,000 --> 00:37:37,759
Speaker 13: just looking at it from a technology point of view,

717
00:37:37,760 --> 00:37:39,920
Speaker 13: but a business model innovation point of view. At the

718
00:37:40,000 --> 00:37:42,120
Speaker 13: earliest stages, it's really hard to see that so we're

719
00:37:42,160 --> 00:37:45,080
Speaker 13: betting on founders that think in those big terms, and

720
00:37:45,280 --> 00:37:47,840
Speaker 13: we've been doing that for fifty three years.

721
00:37:48,840 --> 00:37:49,160
Speaker 2: Max.

722
00:37:49,480 --> 00:37:53,600
Speaker 4: What's therefore the viewpoint when you bet on those founders

723
00:37:54,280 --> 00:37:57,160
Speaker 4: of their exit right now? Because what we're seeing with

724
00:37:57,320 --> 00:38:03,440
Speaker 4: AI startups is they're having these increasingly interesting partnerships with

725
00:38:03,680 --> 00:38:07,719
Speaker 4: big legacy businesses that the likes of dwn Lobe are

726
00:38:07,760 --> 00:38:10,120
Speaker 4: currently saying are actually going to be the winners of

727
00:38:10,160 --> 00:38:13,279
Speaker 4: the artificial intelligence revolution. Do you think it's all about

728
00:38:13,360 --> 00:38:15,879
Speaker 4: M and A when it comes to these AI bets.

729
00:38:16,840 --> 00:38:18,520
Speaker 7: Well, Carolyn, it's a good, great question.

730
00:38:18,880 --> 00:38:21,480
Speaker 13: If you look historically at the VC market, most of

731
00:38:21,520 --> 00:38:24,160
Speaker 13: the exits have happened via m and A. Right, there's

732
00:38:24,280 --> 00:38:26,440
Speaker 13: a few giant winners and the power to laws take

733
00:38:26,520 --> 00:38:29,560
Speaker 13: effect with IPOs, but MNA is really important, which is

734
00:38:29,600 --> 00:38:31,560
Speaker 13: why it's important for us and encouraging for us to

735
00:38:31,600 --> 00:38:35,000
Speaker 13: see this big thaw that's happening. To your other question.

736
00:38:35,200 --> 00:38:38,520
Speaker 13: Right now, everyone's focusing on the Magnificent seven and these

737
00:38:38,520 --> 00:38:40,640
Speaker 13: big companies and the scale that they have because there's

738
00:38:40,640 --> 00:38:44,000
Speaker 13: so few public AI companies, right, we think that there's

739
00:38:44,360 --> 00:38:46,960
Speaker 13: hundreds to come in the in the next decade or so.

740
00:38:47,480 --> 00:38:50,000
Speaker 13: And I think that the shift will focus away from

741
00:38:50,000 --> 00:38:53,840
Speaker 13: those concentrated winners today to some of the startups that

742
00:38:53,880 --> 00:38:56,600
Speaker 13: we're seeing in the market, the private markets that are

743
00:38:56,640 --> 00:38:57,360
Speaker 13: coming behind that.

744
00:38:58,239 --> 00:39:00,759
Speaker 4: Two, of course, keep on raising fund to keep on

745
00:39:00,920 --> 00:39:04,279
Speaker 4: allocating to the founders the very early. You've got to

746
00:39:04,360 --> 00:39:06,120
Speaker 4: have this proof of track record, which you have. And

747
00:39:06,160 --> 00:39:08,280
Speaker 4: I'm just interested as to if you've got any companies

748
00:39:08,320 --> 00:39:10,400
Speaker 4: that you're thinking about to get out the gates, how

749
00:39:10,440 --> 00:39:12,920
Speaker 4: you bracing yourself for your own IPO pipeline.

750
00:39:14,120 --> 00:39:15,000
Speaker 7: It's a great question.

751
00:39:15,480 --> 00:39:18,400
Speaker 13: A few things have to happen for an IPO to occur,

752
00:39:18,920 --> 00:39:21,880
Speaker 13: and they happen often very far in advance. So one

753
00:39:21,920 --> 00:39:26,200
Speaker 13: is often up leveling of leadership teams, right functional roles

754
00:39:26,280 --> 00:39:29,800
Speaker 13: in finance, in marketing and sales and product et cetera.

755
00:39:30,120 --> 00:39:33,880
Speaker 13: So we see that we see cap table fortification with

756
00:39:34,040 --> 00:39:36,600
Speaker 13: the introduction of crossover investors that are both private and

757
00:39:36,680 --> 00:39:38,560
Speaker 13: public investors that come on.

758
00:39:38,640 --> 00:39:41,120
Speaker 3: In Nvidia is big one doing at the moment.

759
00:39:40,880 --> 00:39:41,359
Speaker 1: That's right.

760
00:39:41,440 --> 00:39:43,520
Speaker 13: And you know, the other thing that we see, which

761
00:39:43,560 --> 00:39:45,799
Speaker 13: is probably the strongest leading indicator is the number of

762
00:39:45,800 --> 00:39:49,400
Speaker 13: independent board searches. Through our executive recruiting partners, we've been

763
00:39:49,440 --> 00:39:52,520
Speaker 13: hearing the uptick in that and we feel at firsthand

764
00:39:52,520 --> 00:39:54,279
Speaker 13: as well, and with many searches that are going on

765
00:39:54,400 --> 00:39:57,319
Speaker 13: with our portfolio, a lot of companies are getting ready

766
00:39:57,360 --> 00:39:59,640
Speaker 13: for this and it's happening, and it's you know, behind

767
00:39:59,640 --> 00:40:01,000
Speaker 13: the scenes, but it will happen.

768
00:40:01,840 --> 00:40:04,560
Speaker 4: Ah, and boy do we brace ourselves for it. CRV

769
00:40:04,719 --> 00:40:07,560
Speaker 4: general partner Maxkazor, thank you so much for spending time

770
00:40:07,560 --> 00:40:10,640
Speaker 4: with us talking all things exits. Meanwhile, coming up, let's

771
00:40:10,680 --> 00:40:13,239
Speaker 4: talk at AB and B revealing a new once in

772
00:40:13,280 --> 00:40:16,160
Speaker 4: a lifetime stay and experience category.

773
00:40:16,600 --> 00:40:19,480
Speaker 2: I bring you all the details. Next, there's some good pictures.

774
00:40:19,800 --> 00:40:24,360
Speaker 2: There's a bluebog technology.

775
00:40:30,840 --> 00:40:34,160
Speaker 3: The world's biggest record label, Universal Music, said it's entered

776
00:40:34,160 --> 00:40:38,000
Speaker 3: a new licensing agreement with TikTok, ending a dispute that

777
00:40:38,080 --> 00:40:40,680
Speaker 3: led to its artist songs being pulled from the social

778
00:40:40,719 --> 00:40:46,520
Speaker 3: media platform Bluemos, Alex Brinka here, Rihanna Drake joining Taylor

779
00:40:46,560 --> 00:40:49,480
Speaker 3: Swift back on the Tiktoks give me the deats.

780
00:40:49,960 --> 00:40:53,680
Speaker 14: They are Since February, basically the music from artists under

781
00:40:53,760 --> 00:40:57,520
Speaker 14: You and g have disappeared from user speeds and from

782
00:40:57,560 --> 00:40:59,960
Speaker 14: the artists themselves because this deal was not e play.

783
00:41:00,239 --> 00:41:03,440
Speaker 14: But basically overnight. There's a new deal in place that

784
00:41:03,480 --> 00:41:07,719
Speaker 14: would give improved payments for UMG songwriters and artists, give

785
00:41:07,760 --> 00:41:11,520
Speaker 14: them access to TikTok shop, the e commerce capabilities, and

786
00:41:11,600 --> 00:41:14,200
Speaker 14: the two companies also say that they will work together

787
00:41:14,440 --> 00:41:18,080
Speaker 14: on promotional campaigns around new songs and records, and that

788
00:41:18,239 --> 00:41:20,720
Speaker 14: there's one more kind of piece to this whole story

789
00:41:20,760 --> 00:41:23,600
Speaker 14: that was a big concern for UMG and a lot

790
00:41:23,600 --> 00:41:26,320
Speaker 14: of kind of protect creators, and that's to do with AI.

791
00:41:26,760 --> 00:41:31,160
Speaker 14: This agreement does say that TikTok will expand its protections

792
00:41:31,239 --> 00:41:34,480
Speaker 14: when it comes to AI, because certainly songwriters are worried

793
00:41:34,480 --> 00:41:39,000
Speaker 14: about not only kind of fake songs being created, fake

794
00:41:39,120 --> 00:41:41,840
Speaker 14: videos and images being created, but also the fact that

795
00:41:41,880 --> 00:41:44,719
Speaker 14: it's been kind of a wackable process on TikTok to

796
00:41:44,719 --> 00:41:47,239
Speaker 14: get those taken down. So exciting move for them, and

797
00:41:47,280 --> 00:41:49,239
Speaker 14: I'm sure that a lot of the users who had

798
00:41:49,360 --> 00:41:52,400
Speaker 14: the sounds kind of disappear overnights and their songs and

799
00:41:52,440 --> 00:41:54,600
Speaker 14: the trends they were doing will be excited to get

800
00:41:54,600 --> 00:41:56,680
Speaker 14: those songs back to less mutes.

801
00:41:57,200 --> 00:42:00,279
Speaker 4: Well thank you from New Meg's Alex BURINCA brilliant get

802
00:42:00,320 --> 00:42:03,719
Speaker 4: all the assessment but also going viral Airbnb announcing is

803
00:42:03,760 --> 00:42:07,960
Speaker 4: the latest category Icons, a new vertical for extraordinary experiences,

804
00:42:08,000 --> 00:42:11,560
Speaker 4: hosted by the greatest names in music, film, television, art, sports,

805
00:42:11,600 --> 00:42:14,399
Speaker 4: and more joining us now at the details blue makes

806
00:42:14,440 --> 00:42:16,360
Speaker 4: Natalie Lung, I mean, is this just a bit of

807
00:42:16,480 --> 00:42:18,600
Speaker 4: good pr or is this actually going to bring in

808
00:42:18,640 --> 00:42:19,640
Speaker 4: real money for Airbnb?

809
00:42:20,040 --> 00:42:22,640
Speaker 5: Right? This is definitely part of their marketing expense. It's

810
00:42:22,719 --> 00:42:26,279
Speaker 5: expensive to build the house from up for example, from

811
00:42:26,320 --> 00:42:29,120
Speaker 5: scratch and placing it in New Mexico and hosting it

812
00:42:29,200 --> 00:42:33,120
Speaker 5: up a fifty of a crane fifty feet off the ground.

813
00:42:33,400 --> 00:42:36,000
Speaker 5: So this is definitely a marketing expense for them, but

814
00:42:36,040 --> 00:42:39,160
Speaker 5: they hope to be able to drive more traffic new users.

815
00:42:39,239 --> 00:42:42,600
Speaker 5: A user account is required to sign up and also

816
00:42:42,640 --> 00:42:44,200
Speaker 5: reach new audiences abroad.

817
00:42:46,960 --> 00:42:49,800
Speaker 3: This was a big thing that played out on social media,

818
00:42:49,920 --> 00:42:52,160
Speaker 3: so they tried to do the thing from the movie up,

819
00:42:52,400 --> 00:42:54,239
Speaker 3: but it was with a crane. And then I saw

820
00:42:54,239 --> 00:42:57,920
Speaker 3: all these founders and people associated with Airbnb, pat Brian

821
00:42:58,000 --> 00:43:00,600
Speaker 3: Chesky on the back. For him, this seems like a

822
00:43:00,600 --> 00:43:03,160
Speaker 3: bit of a personal project, Natalie.

823
00:43:03,400 --> 00:43:07,200
Speaker 5: Right, It is definitely a personal project, something that he

824
00:43:07,320 --> 00:43:11,400
Speaker 5: has done long long before this launch. They put an

825
00:43:11,440 --> 00:43:14,480
Speaker 5: Ikia home up on Airbnb, and of course last year

826
00:43:15,080 --> 00:43:18,600
Speaker 5: there was the Barbie Dreamhouse, which went viral. So this

827
00:43:18,640 --> 00:43:22,040
Speaker 5: is really him taking Airbnb beyond some of the core

828
00:43:22,200 --> 00:43:25,360
Speaker 5: experiences that we all come to know. He wants people

829
00:43:25,400 --> 00:43:28,040
Speaker 5: to be inspired by these homes.

830
00:43:28,760 --> 00:43:31,200
Speaker 4: We'll see he starts wanting to get in on all

831
00:43:31,200 --> 00:43:33,600
Speaker 4: of these one of the kind experiences. Natalie n thanks

832
00:43:33,600 --> 00:43:36,920
Speaker 4: for bringing us a pretty fun story to end, as

833
00:43:36,960 --> 00:43:38,560
Speaker 4: long as you're not afraid of heights or something.

834
00:43:38,600 --> 00:43:40,880
Speaker 2: Meanwhile, that does it for this edition of Bloomberg Technology.

835
00:43:40,920 --> 00:43:45,160
Speaker 3: Yet, what a big show, and I imagine there will

836
00:43:45,160 --> 00:43:47,120
Speaker 3: be another big show in twenty four hours time because

837
00:43:47,160 --> 00:43:50,440
Speaker 3: Apple Reports after the bell recap, all the conversations, so

838
00:43:50,520 --> 00:43:53,720
Speaker 3: many stories, great Bloomberg reporting on the podcast. We're putting

839
00:43:53,719 --> 00:43:56,840
Speaker 3: the pod on Apple's Spotify, iHeart and the Bloomberg platforms.

840
00:43:57,360 --> 00:44:00,000
Speaker 3: And once again, just a big thank you from Karen

841
00:44:00,200 --> 00:44:02,600
Speaker 3: and so many of you reach out saying that you

842
00:44:02,719 --> 00:44:05,560
Speaker 3: listen to the show in podcast form and we'll keep

843
00:44:05,560 --> 00:44:08,960
Speaker 3: bringing you that part every day. Stay tuned. So much

844
00:44:09,000 --> 00:44:11,160
Speaker 3: more to come, but one day left in the week.

845
00:44:11,440 --> 00:44:14,479
Speaker 3: It's almost Friday. Gang from San Francisco and New York City.

846
00:44:14,680 --> 00:44:17,360
Speaker 3: This is Bloomberg technology,