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Speaker 1: From Mahard where Innovation of 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 loved Love.

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Speaker 2: Live from New York.

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Speaker 3: This is Bloomberg Technology coming up a victory for Micron

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Speaker 3: as the company gets it's a weighted six billion dollar

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Speaker 3: grant from the US government.

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Speaker 2: We discuss us, We break down the.

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Speaker 3: Tech earnings with Oracle falling the most in a year

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Speaker 3: after posting lukewarm quarterly revenues, and we sit down with

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Speaker 3: the CEOs of Omnicon and Into Public to dissect the

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Speaker 3: deal creating the world's largest advertising company. But first we

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Speaker 3: check in on these markets. The key points contributor to

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Speaker 3: the upside on the Nasdaq, which does hold in the

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Speaker 3: green is up three point seven percent.

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Speaker 2: It's all about Alphabet.

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Speaker 3: Look, actually, we had that head of Quantum AI on

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Speaker 3: the show yesterday discuss saying the breakthroughs they're making in

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Speaker 3: quantum computing in the Willow chip and this really feeds

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Speaker 3: into a well virtuous cycle as to whether it's about

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Speaker 3: quantum AI and cloud All eyes on Alphabet move on

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Speaker 3: as someone to look at the drags to the downside

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Speaker 3: note of them in the chips name Space, but software

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Speaker 3: also we're looking at cloud and software, with Oracle off

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Speaker 3: by seven percent at one point, down as much as

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Speaker 3: ten percent as look, an eighty percent ramp up in

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Speaker 3: these shares so far this year, therefore, had a high

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Speaker 3: bar for its earnings, and look, the forecast didn't beat expectations.

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Speaker 3: Neither did the nine percent growth in revenue, even though

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Speaker 3: they did delivering cloud Infrastructure'm looking at TSMC, also, a

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Speaker 3: name that's up eighty percent so far this year. We're

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Speaker 3: down one point seven percent, even though they show that

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Speaker 3: November sales are ramping ever high and more than thirty percent.

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Speaker 3: We dig into that in a minute. Micron as well,

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Speaker 3: off by two point two percent. Although finally they get

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Speaker 3: certainty around that six billion dollar grant coming from the

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Speaker 3: Chipsack coming from the US government to be able to

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Speaker 3: expand memory offering and manufacturing here in the United States.

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Speaker 3: It's a relief. Let's talk about it with Peter Elstrom

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Speaker 3: and Peter.

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Speaker 2: I'm in to. This is a relief.

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Speaker 3: It was an overhang on the stock because we're worried

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Speaker 3: that maybe the Trump administration would deny it.

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Speaker 1: Yeah, that's exactly right.

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Speaker 4: This is a program where the Biden administration has tried

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Speaker 4: to rebuild the semiconductor industry in the United States. The

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Speaker 4: Chips Act is one of the landmark programs that the

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Speaker 4: administration had, and they wanted to make sure that they

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Speaker 4: locked down this money because Trump personally had criticized these

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Speaker 4: agreements is so bad and the Republicans that even floated

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Speaker 4: the idea that maybe they try to repeal this even

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Speaker 4: though it was passed with bipartisan support. So the Commerce

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Speaker 4: Department is trying to lock down these agreements now and

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Speaker 4: finalize the details as much as they can before there's

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Speaker 4: this transition in January. So Micron, the really big US

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Speaker 4: maker of memory chips, won this award more than six

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Speaker 4: billion dollars. That's going to help them build out facilities

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Speaker 4: in Idaho and New York to very key states and

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Speaker 4: try to build up their ability to develop more advanced

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Speaker 4: memory chips, including these HBM memory chips that are used

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Speaker 4: with AI from Nvidia to be able to train AI models.

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Speaker 5: Well.

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Speaker 3: The manufacturing king is of course TSMC, and they're just

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Speaker 3: showing how still that focus on AI is a living,

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Speaker 3: breathing thing. Even though we'd have perhaps been worried about

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Speaker 3: the buildout of data bass and more broadly slowing down.

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Speaker 4: That's right, TSMC sits in an unusual market in Taiwan.

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Speaker 4: Companies have to report their monthly sales, so we get

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Speaker 4: little drips and drabs of information throughout the quarter before

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Speaker 4: we get the final results. So these are mostly just

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Speaker 4: revenue that the company puts out there. But what we

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Speaker 4: did see from TSMC is that revenue is up more

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Speaker 4: than thirty percent. As you said, they are a bell

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Speaker 4: weather for AI because they make the most advanced chips

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Speaker 4: in the industry, including the chips that Nvidia uses to

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Speaker 4: be able to sell to the likes of Microsoft and

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Speaker 4: open Ai and Google. So it gives us an early

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Speaker 4: indication of how that demand is holding up. One of

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Speaker 4: the big questions overhanging the whole AI boom at this

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Speaker 4: point is whether companies are going to be able to

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Speaker 4: figure out whether there's a profitable way to deploy these models,

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Speaker 4: whether they can actually makes some money after investing really

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Speaker 4: tens of billions of dollars. At this point, TSMC is

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Speaker 4: getting a lot of that benefit right now. The question

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Speaker 4: is whether it's a long term trend that TSMC and

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Speaker 4: others are going to be able to benefit from or

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Speaker 4: whether there's some tapering that comes up if the profits

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Speaker 4: don't materialize pretty soon, what is the killer application?

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Speaker 3: Putilstrom thanks so much breaking down chip makers. Meanwhile, let's

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Speaker 3: stick with Chinese president using pain saying that China has

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Speaker 3: full confidence in achieving its five percent economic growth target

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Speaker 3: this year. He also told international economic organizations gathered in

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Speaker 3: Beijing that China is willing to maintain and promote the

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Speaker 3: development of relations with the US.

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Speaker 2: Just take a listen.

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Speaker 6: I have repeatedly emphasized that human beings are a community.

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Speaker 1: Of shared future.

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Speaker 6: We should treat each other's developments as an opportunity rather

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Speaker 6: than a challenge. We should see each other as partners

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Speaker 6: rather than rivals. Let's so leadarity, unity, cooperation, mutual benefits

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Speaker 6: and win win progress become the main theme of the times.

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Speaker 3: Locally, Chain and of course Micron and and Vidio have

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Speaker 3: been under pressure with rising tensions, for example, between the

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Speaker 3: US and China and what that means for some US

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Speaker 3: chip makers. Let's dig in to those tensions and indeed

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Speaker 3: edtagomic economic growth more broadly with Janet Munit. It's just

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Speaker 3: head of market analysis at RBC bruin Dolphin and interestingly.

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Speaker 2: You've been.

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Speaker 3: I wouldn't say full out positive, but leaning on some

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Speaker 3: interest in Chinese names and Chinese economic stimulus that seems

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Speaker 3: to be being promised more forcefully.

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Speaker 7: Oh hi, Caroline, thanks for having me so. Primarily, our

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Speaker 7: strongest conviction is US stocks, particularly because of the US exceptionalism.

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Speaker 7: I think this thing is still going to trade into

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Speaker 7: the new year, and the fact that US companies are

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Speaker 7: just so much more profitable, so we still much creit

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Speaker 7: for US stars versus the rest of the world. However,

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Speaker 7: for Chinese stocks, I think, you know, sentiment has been

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Speaker 7: very depressed. I think, you know, investors are still doubtful

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Speaker 7: on the scale of the stimulus and whether it is

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Speaker 7: going to work, so it is not that much of

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Speaker 7: a consensus trade. I think this trade is having still

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Speaker 7: a lot of resistance, and we feel that sentiment has

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Speaker 7: been way too negative and you know, evaluations are very cheap.

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Speaker 7: There is a case to make that there could be

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Speaker 7: more stumulous coming and the fact that economic data is stabilizing,

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Speaker 7: so I think there's a case for investors to diversify

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Speaker 7: a bit into the Chinese stocks as well.

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Speaker 3: Small overweight in Asia extra Pan on the back of that,

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Speaker 3: what of therefore, the daily deluge we get on ramping

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Speaker 3: up China US tensions. Yesterday it was about in video

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Speaker 3: being investigated by Chinese regulators. There's a longgoing narrative around

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Speaker 3: Micron as well. How have you been trying to price

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Speaker 3: that in?

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Speaker 7: Well, I have to say it is very difficult to

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Speaker 7: price it. I do believe that institutional investors have somewhat

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Speaker 7: been more prepared this time, and you can see that

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Speaker 7: in some of the sell off in the trade exposed

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Speaker 7: stock for example European x UK stocks for instance. So

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Speaker 7: I think industrials I've already been making some adjustments and

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Speaker 7: thoughts on the trade tariff issue is very difficult to

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Speaker 7: press in, but I guess some of that is already

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Speaker 7: reflected in market and overall speaking our views that the

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Speaker 7: trade tariff's likely going to be.

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Speaker 1: Added for TAT and negotiation tactics.

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Speaker 7: Doubtful that the full extent of the threat is going

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Speaker 7: to be fully implemented, although it is acknowledged.

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Speaker 1: That some of that will be through.

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Speaker 7: So keeping out of that, but it's not necessarily a

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Speaker 7: deturn to the ongoing rally in the US equity market

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Speaker 7: for example.

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Speaker 3: Okay, so the likes of an Nvidia that has got

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Speaker 3: an enormous valuation continue to rally throughout twenty twenty four?

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Speaker 3: Does that continue into twenty twenty five? Come we vindicate

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Speaker 3: these value which is the run up that we've seen

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Speaker 3: in stocks like an eight percent up on Oracle, an

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Speaker 3: eighty percent up on the list of depository notes of TSMC.

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Speaker 7: Yeah, using gold out Nvidia there. I'm not going to

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Speaker 7: make a specific comment, but this is obviously a great stock,

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Speaker 7: huge profit margins, and still very strong guidance of the

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Speaker 7: black Well chip architecture. And I think, I mean, this

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Speaker 7: is a great company. Obviously investors have is dubbed on

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Speaker 7: the high valuation. I think it can the rally can

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Speaker 7: still go on given that you know, investors still like

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Speaker 7: strong quality growth. So I would feel that investors will

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Speaker 7: still be very much leaning on the semiconductor sector and

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Speaker 7: then tech in general, life chap in general. In the US,

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Speaker 7: I also feel that investors are more shifting and rotating

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Speaker 7: into more software related stocks instead of just the semi's hardware.

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Speaker 7: I think that makes sense because that there is likely

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Speaker 7: to be more commercialization potential and realization as aiimals for it,

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Speaker 7: from the infrastructure built out to the influencing and to

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Speaker 7: the applications.

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Speaker 3: Will have names like Palenta. Coming up in the show

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Speaker 3: a little bit later, Januinally, great to.

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Speaker 2: Get your expertise.

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Speaker 3: Head of market analysis at LBC brun Dolphin, thank you.

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Speaker 2: Coming up.

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Speaker 3: C three AIS focused on General to AI. Well, the

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Speaker 3: products there are helping drive revenue, but at what cost?

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Speaker 3: Company CEO Tom Siebel joins us next. Meanwhile, let's just

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Speaker 3: check it back in on alphabet, which we'd said had

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Speaker 3: been rallying almost four percent, having its best day on

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Speaker 3: one point since April twenty twenty four. Here's what Google

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Speaker 3: Quantum AI founder Hartman Navin told us yesterday.

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Speaker 1: FENM computing, It's definitely not that field.

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Speaker 8: There's steady progress, and our new chips if you just

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Speaker 8: released a willow, will form the basis to start doing

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Speaker 8: useful computations that will enable or solve problems that humankind has.

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Speaker 3: Let's get to another set of ownings for you. C

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Speaker 3: three AI raising its full year sales forecast. General to AI,

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Speaker 3: of course helping drive sales, but almost kind of cautioning

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Speaker 3: of the lack of profitability in some areas. Joining us

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Speaker 3: for more. C three AI CEO Tom Cebill, Look, your

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Speaker 3: shares are down a little bit, but boy, they've ramped

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Speaker 3: up sixty percent in less than a month. So a

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Speaker 3: lot of optimism going into these numbers.

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Speaker 2: What drove you to raise the forecast?

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Speaker 9: Well, it was a it was a great quarter. If

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Speaker 9: the year to day it has been great. I think

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Speaker 9: our revenue growth year over your last quarter was twenty

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Speaker 9: nine percent, which is huge. I think most importantly we informed.

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Speaker 9: We formed this massive strategic alliance with Microsoft, the largest

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Speaker 9: software company in the world, and all of Microsoft, as

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Speaker 9: there are salespeople worldwide, will be selling C three AIS

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Speaker 9: enterprise AI software solutions, you know, on their price list,

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Speaker 9: getting ported credit being compensated, and so we C three

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Speaker 9: AI goes from order of one hundred salespeople in September

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Speaker 9: to order perhaps tens of thousands of salespeople in November.

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Speaker 9: So that is a very strong tailwind that builds extraordinary

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Speaker 9: well for C three AI.

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Speaker 3: That is this slight worry about the profitability, saying that

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Speaker 3: basically revenue, you're prioritizing growth rather than profitability.

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Speaker 2: What do you say to that.

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Speaker 9: Time In the short term, we're prioritizing growth. You know,

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Speaker 9: I have this huge enterprise sales engine in the in

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Speaker 9: the form of Microsoft that now we need to enable

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Speaker 9: and for really to not invest in that channel to

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Speaker 9: get thousands of people productive selling and servicing our product

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Speaker 9: and not invest in that is crazy goodness, Caroline. We

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Speaker 9: have three quarters of roughly three quarters of a billion

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Speaker 9: dollars cash in the bank. And what am I going

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Speaker 9: to do with that if not invest in growth, not

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Speaker 9: invest in market share, and not invest if not invest

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Speaker 9: in market leadership. And I assure you the cash flow

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Speaker 9: and profitability follows.

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Speaker 3: Okay, So how profitable, for example, would a deal like

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Speaker 3: Microsoft the extension there be because you're obviously digging in

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Speaker 3: on that partnership. They help distribute your offerings. But how

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Speaker 3: much revenue do you have to give up for that?

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Speaker 5: You do?

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Speaker 9: Actually virtually one hundred percent of the revenue from the

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Speaker 9: C three AI sales a cruise to C three AI.

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Speaker 9: So it's you know, Microsoft gets the benefit of selling

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Speaker 9: their infrastructure and cloud services. C three gets the benefit

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Speaker 9: of selling the C three I applications. But uh, you know,

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Speaker 9: a very small portion.

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Speaker 1: Of the revenue is given up.

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Speaker 9: And this is just a dramatic revenue accelerator. This is

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Speaker 9: the largest software company in the world and they have

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Speaker 9: chosen C three AI as their preferred enterprise AI solutions

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Speaker 9: provider Strategic partnerships just don't get bigger than this.

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Speaker 3: They don't and Sertny Piper and the analysts over there

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Speaker 3: saying this potentially drives material upside. There are though, and

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Speaker 3: I hate to keep going back to some of the

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Speaker 3: flies in the ointment, but Key Bank just worrying about

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Speaker 3: the differentiation here, Tom of your AI offering. How do

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Speaker 3: you make clear your USP versus rivals out there?

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Speaker 9: There is one company on the planet Earth, Carolion, that

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Speaker 9: offers over one hundred turnkey enterprise AI applications for utilities,

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Speaker 9: for oil and gas, for defense, for intelligence, for pharmaceutical

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Speaker 9: Fortalit one company on the planet Earth, Okay that offers

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Speaker 9: these kinds of solutions, and that is our differentiation.

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Speaker 2: And federal strength.

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Speaker 3: You enlisted a lot there within defense and with ultimately

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Speaker 3: you've got a government focus in many ways that has

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Speaker 3: seen a lot of selling it to federal Will that

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Speaker 3: continue any issues about the administration coming on in twenty

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Speaker 3: twenty five under Trump?

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Speaker 9: There are our business in the defense intelligence in federal

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Speaker 9: community has been very strong. I expect that to accelerate

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Speaker 9: in the Trump administration with people like elon getting involved.

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Speaker 9: I think their priorities if we listen to their conferences

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Speaker 9: and we go to, for example, the Reagan Defense Forum

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Speaker 9: that took place last week, there is one topic on

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Speaker 9: the agenda, and that is AI applications, AI applications, AI applications,

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Speaker 9: and then they also talk about cyber But this is

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Speaker 9: clearly going to be a huge priority for making government

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Speaker 9: more efficient okay making, and it is the future of

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Speaker 9: our defense and intelligence community. So this votes extraordinarily well

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Speaker 9: for the commercial software providers like C three AI, and

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Speaker 9: perhaps votes less well for the traditional kind of beltway

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Speaker 9: systems integrators. I think that the tide might be going

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Speaker 9: out for those guys.

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Speaker 3: Tom Siebel ultimistic on CVAI. Of course, the CEO thanks

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Speaker 3: for joining yesterday. Let's stick with earnings and let's just

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Speaker 3: check out what's happening with Oracle, because it has been

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Speaker 3: on a tear of late, up eighty percent in terms

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Speaker 3: of share price this year, and therefore its optimism didn't

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Speaker 3: live up to well. The height was there, but the

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Speaker 3: numbers didn't quite meet that height. We're down seven percent

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Speaker 3: after we saw nine percent increase in revenue. There was

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Speaker 3: strong cloud infrastructure growth though Anna rag Grana breaks it

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Speaker 3: down from Blomberg Intelligence. It just wasn't enough, was it.

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Speaker 10: See they did beat on constant currency, So in the

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Speaker 10: reported there were slightly you know, slightly below, but that

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Speaker 10: was effics oriented. But at the same time, you know,

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Speaker 10: I think, as you mentioned, the expectations are really getting

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Speaker 10: high for some of these names, that the beat has

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Speaker 10: to be of a material enough, you know, rage we

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Speaker 10: think the demand is still there. It's a question is

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Speaker 10: whether the second half growth rate is going to be

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Speaker 10: in the high fifties.

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Speaker 1: Or the low fifties.

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Speaker 10: But still that's a pretty impressive number.

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Speaker 1: All said and.

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Speaker 3: Done, That fifty percent is a fifty two percent increasing

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Speaker 3: cloud infrastructure sales that you sort of reference.

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Speaker 2: What about the rest of the business.

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Speaker 3: How is just cloud continuing to perform for them?

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Speaker 2: How is software sales going?

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Speaker 10: Yeah, see, when you look at Oracle, before the Oracle

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Speaker 10: cloud infrastructure really push happened, this company was growing in

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Speaker 10: that four five six percent range. So when you look

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Speaker 10: at their SaaS business, so the cloud applications business that

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Speaker 10: grew about ten percent, which is generally in line with

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Speaker 10: what's happening with salesforce and workday workday slightly better than

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Speaker 10: that but that space has been under pressure over the

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Speaker 10: last twelve months. The real area of growth is cloud

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Speaker 10: infrastructure or because of AI workloads, and that's where bulk

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Speaker 10: of the interest lies at this point.

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Speaker 3: Any mentioned around TikTok because they're a key client.

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Speaker 10: Yeah no, that wasn't really discussed, you know, on the call,

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Speaker 10: But we think if there is an impact next year.

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Speaker 10: First of all, that's not going to be immediate. It's

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Speaker 10: going to take some time. But because of the backlock

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Speaker 10: that they have, they should be able to offset that

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Speaker 10: for with that, you know, maybe a quarter or two

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Speaker 10: of some dent there, but you know, overall, we think

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Speaker 10: the backlog is there for that.

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Speaker 3: And they mentioned new clients Meta in particular and increasing

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Speaker 3: focus on that particular area. Anyone else that we were

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Speaker 3: impressed by that they managed to snag that they're managing

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Speaker 3: to woo in with the fact that it is a

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Speaker 3: key offering now in cloud, whereas we've doubted it previously.

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Speaker 1: Yeah.

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Speaker 10: So one of the things I would say is almost

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Speaker 10: all major clients out there, you know, whether that's Meta

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Speaker 10: or any other vendor, is going to go out and

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Speaker 10: try to tap into all cloud providers. I mean, unless

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Speaker 10: they have some adversisdial relationship just because there is there

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Speaker 10: isn't that much of capacity out there. In Oracle's case,

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Speaker 10: it's actually getting work from Microsoft right now because Microsoft

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Speaker 10: is fulfilling the needs or the workloads that are coming

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Speaker 10: from open Ai and it's subleasing to Oracle to get

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Speaker 10: some of that work done. So there is you know,

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Speaker 10: the entire space is going up. It's not just one

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Speaker 10: or two vendors.

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Speaker 3: Anna Agrana on all things Oracle. We thank you of

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Speaker 3: newberga intelligence time now for talking out tech first up.

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Speaker 3: A door Dash funded study in Pennsylvania found that most

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Speaker 3: of its gig workers preferred to remain independent contractors. This

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Speaker 3: after the company began offering extra payments instead of benefits

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Speaker 3: normally reserved for salaried employees. Class TikTok Shop comes to

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Speaker 3: Europe after the in app shopping feature went live for

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Speaker 3: users in Spain. The roll out reflects TikTok's push to

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Speaker 3: seek out alternative markets in the face of potential US

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Speaker 3: shutout and the shares of food delivery firm and Talabat.

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Speaker 3: It lost ground after a two billion dollar IPO in Dubai,

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Speaker 3: the girl's biggest initial public offering this year. This adds

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Speaker 3: to a slate of recent disappointing debuts of listings in

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Speaker 3: the Middle East.

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Speaker 2: Now, let's just talk geopolitics a little bit more.

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Speaker 3: Now, because despite US and ally sanctions following Russia's invasion

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Speaker 3: of Ukraine, Moscow has continued its ability to procure American tech,

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Speaker 3: including chips from Intel analog Devices Ti Bloomberg reporting that

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Speaker 3: it's discovered that the supply chain path which Russia has

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Speaker 3: been able to secure those components, unknownst to the companies

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Speaker 3: making it has been pretty easy for Morelos Alberta Nadelli joins.

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Speaker 2: US and now it's an extraordinary deep dive.

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Speaker 3: Nolberto, just how easy is it to order these sorts

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Speaker 3: of pieces of equipment from Russia right now?

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Speaker 11: It's relatively simple if you think about the fact that

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Speaker 11: you know, it's been a few years now that the

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Speaker 11: war has been ongoing in Ukraine and the effort that

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Speaker 11: governments have put on to crack down on these practices.

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Speaker 11: There are websites within Russia where companies that are working

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Speaker 11: to produce missiles and other weapons.

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Speaker 1: They can see.

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Speaker 11: The catalogs of companies like Texas Instruments on their own

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Speaker 11: websites or stocks available prices and details like that, and

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Speaker 11: then they're able to place order requests with Russian distributors,

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Speaker 11: and then the goods are ordered by intermediaries, they get

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Speaker 11: sent to third countries, other countries, and from there they

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Speaker 11: get to Russia. So overall, that's pretty simple, given the

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Speaker 11: fact that the war has been going on for years now.

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Speaker 3: Precisely, and the US government has time and time again

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Speaker 3: been warning these sorts of suppliers to crack.

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Speaker 2: Down on this.

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Speaker 3: In fact, Shannon Thompson, the company's assistant general counsel that's

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Speaker 3: or Texas Instruments, said, I want to be very clear,

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Speaker 3: TI strongly opposes the use of our chips in Russian

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Speaker 3: military equipment.

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Speaker 2: How are they able to stop this?

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Speaker 11: Well, that's a very good question from your questions for

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Speaker 11: the companies more than for me. I think companies are

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Speaker 11: trying to stop these practices from happening, and when issues

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Speaker 11: are flagged, they do intervene. There was, however, for example,

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Speaker 11: earlier this year, a Senate report that came out that

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Speaker 11: suggested that companies.

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Speaker 1: Aren't doing enough. So they are.

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Speaker 11: Doing certain practices that would allow them to probably better

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Speaker 11: detect these types of transactions before they actually happen.

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Speaker 1: So lots of the actions.

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Speaker 11: Happen later on in the sales process rather than early

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Speaker 11: on trying to identify bad actors and things like that.

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Speaker 3: I'm Berta Nadelli. Extraordinary peace, Thank you for talking us

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Speaker 3: through it. Welcome back to BLUEBG Technology. I'm Karen Hyde

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Speaker 3: in New York. If we want to welcome our TV

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Speaker 3: and radio audiences worldwide now to bloom Meg Technology. Because

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Speaker 3: Omnicom has announced that they'll be buying into Public Group

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Speaker 3: in a move that will create the world's largest advertising

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Speaker 3: company with an annual revenue more than twenty five billion dollars.

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Speaker 3: Here to discuss in an exclusive interview, John Wren, Omnicon

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Speaker 3: CEO and Philip Klekowski into Public Group CEO.

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Speaker 2: Gentlemen, Welcome, Thank you, erl, Thank you John. I'm sat

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Speaker 2: here on.

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Speaker 3: The Technology Show thinking about the technological disruption that has

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Speaker 3: happened to advertising. Is this response to that, is this

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Speaker 3: to take on alphabet meta and call that more of

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Speaker 3: that global revenue?

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Speaker 1: Well, it is. Technology does play a role in this,

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Speaker 1: and both Philip and I have focused on that in

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Speaker 1: our conversations over the course of the last year. When

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Speaker 1: you cut through quite a bit of what we're discussing

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Speaker 1: if you look at our industry five years ago, ten

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Speaker 1: years ago, the barrier to entry was very low. It

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Speaker 1: was you just had to be a brilliant person right

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Speaker 1: with the great with a great idea. Now, in order

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Speaker 1: to properly service clients in this new era, it's key

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Speaker 1: to have those very very bright, very talented people, but

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Speaker 1: it's incumbent upon us to enable them with the best

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Speaker 1: tech in data that we possibly can for them to

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Speaker 1: garner the insights the information at scale so they can

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Speaker 1: react to the environment as they need. And we've each

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Speaker 1: been on that journey, I guess, as all of our

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Speaker 1: competitors have as well. From an Omnium point of view,

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Speaker 1: we made great strides with the creation of omni and

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Speaker 1: earlier in the year when we acquired Flywheel the commerce

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Speaker 1: stature that we've been able to put together, and that

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Speaker 1: progresses and today we're working even beading all the generative

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Speaker 1: AI possibilities to create tools for our folks. Philip on

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Speaker 1: the other side, can talk to it as well, because

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Speaker 1: he's had a very strong avenge. Sure.

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Speaker 12: I mean, I think to John's point, technology is playing

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Speaker 12: so much more important a role in our sector, and

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Speaker 12: that's because for our clients, the consumers they need to

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Speaker 12: reach expect a high degree of personalization and the messaging

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Speaker 12: they get, and a high degree of engagement in the

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Speaker 12: experiences we deliver. So to John's point, he brought Flywheel

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Speaker 12: into the family. It's a company that has this quite

442
00:24:02,480 --> 00:24:06,520
Speaker 12: distinctive ability to understand everything that's happening in the digital

443
00:24:06,600 --> 00:24:10,960
Speaker 12: retail ecosystem down to the individual transaction level. And then

444
00:24:11,000 --> 00:24:15,800
Speaker 12: for US, Axiom, as John said, is likely the largest

445
00:24:15,840 --> 00:24:17,280
Speaker 12: consumer database.

446
00:24:16,880 --> 00:24:18,160
Speaker 1: Outside of the walled gardens.

447
00:24:18,600 --> 00:24:20,560
Speaker 12: So if you put those two together, and if we

448
00:24:20,600 --> 00:24:24,880
Speaker 12: co invest in General of AI, we're very very strongly positioned,

449
00:24:24,920 --> 00:24:29,520
Speaker 12: we believe to help our clients navigate this tech enabled world.

450
00:24:29,680 --> 00:24:31,080
Speaker 2: How does it strip out costs?

451
00:24:31,119 --> 00:24:34,200
Speaker 3: You clearly identified opportunities for seven hundred and fifty million

452
00:24:34,240 --> 00:24:37,280
Speaker 3: dollars in annual cost savings, But the talent when it

453
00:24:37,280 --> 00:24:39,879
Speaker 3: comes to General to AI's expenses is how do you

454
00:24:39,920 --> 00:24:40,959
Speaker 3: strip out those costs?

455
00:24:41,440 --> 00:24:44,560
Speaker 12: Well, I think John's been really clear and I think

456
00:24:44,880 --> 00:24:48,560
Speaker 12: we are fully in agreement a year in that it's

457
00:24:48,640 --> 00:24:51,840
Speaker 12: about enabling the folks who interact with the clients, so

458
00:24:51,920 --> 00:24:53,200
Speaker 12: those brilliant people.

459
00:24:52,920 --> 00:24:56,040
Speaker 1: Giving them more tools. There are ways in.

460
00:24:56,040 --> 00:25:00,040
Speaker 12: Which We're not going to invest more than once. We

461
00:25:00,080 --> 00:25:03,440
Speaker 12: are going to look at infrastructure that is perhaps legacy

462
00:25:03,440 --> 00:25:07,200
Speaker 12: infrastructure in businesses like ours, So there is a meaningful

463
00:25:07,240 --> 00:25:10,760
Speaker 12: opportunity there to put the money against the future.

464
00:25:11,160 --> 00:25:14,960
Speaker 3: John, some of the concern maybe being priced in at

465
00:25:14,960 --> 00:25:18,440
Speaker 3: the moment because as combined market capitalizations, they're now lower

466
00:25:18,480 --> 00:25:19,600
Speaker 3: than they were on Friday.

467
00:25:19,800 --> 00:25:21,879
Speaker 2: People trying to digest how this deal works.

468
00:25:22,119 --> 00:25:27,320
Speaker 3: City Bernstein's saying the potential for revenue disynergy, rival agencies,

469
00:25:27,320 --> 00:25:28,440
Speaker 3: stealing accounts, talent.

470
00:25:28,560 --> 00:25:30,520
Speaker 2: How do you make sure that people stay on board

471
00:25:30,520 --> 00:25:30,720
Speaker 2: with you?

472
00:25:31,000 --> 00:25:36,360
Speaker 1: Sure, We've always always been the place for the best

473
00:25:36,359 --> 00:25:43,920
Speaker 1: talented people to come to. Naturally, there's churn in everybody's

474
00:25:43,960 --> 00:25:48,320
Speaker 1: business every year, fortunately or unfortunately. I've been through this

475
00:25:48,400 --> 00:25:51,080
Speaker 1: movie once before, but did it badly and didn't complete

476
00:25:51,119 --> 00:25:53,600
Speaker 1: it ten years ago. This one is a bit more

477
00:25:53,640 --> 00:25:54,840
Speaker 1: thought a lot more thoughtful.

478
00:25:55,880 --> 00:25:58,520
Speaker 3: You're referring to the public steal back at twenty fourteen.

479
00:26:00,359 --> 00:26:04,359
Speaker 1: Clients who listen to us and see the capabilities that

480
00:26:04,400 --> 00:26:08,120
Speaker 1: we've developed between us already, the power of what we're

481
00:26:08,160 --> 00:26:12,159
Speaker 1: going to be able to continually bring to the marketplace,

482
00:26:13,240 --> 00:26:17,439
Speaker 1: the changes and the focus and the single point of

483
00:26:17,600 --> 00:26:20,199
Speaker 1: entry and investment that we're going to make to enable

484
00:26:20,840 --> 00:26:26,440
Speaker 1: that talent to succeed. I'm not nearly as concerned as

485
00:26:26,440 --> 00:26:29,240
Speaker 1: the nay sayers are looking for somebody to knock on

486
00:26:29,320 --> 00:26:32,119
Speaker 1: the deal that we may be challenged by the odd

487
00:26:32,119 --> 00:26:35,439
Speaker 1: clients or two. I suspect not, because I think the

488
00:26:35,440 --> 00:26:38,159
Speaker 1: offerings that we have and the response to those clients

489
00:26:38,720 --> 00:26:41,040
Speaker 1: is at the core of what we've been discussing for

490
00:26:41,080 --> 00:26:44,720
Speaker 1: the last year, and that's been first and foremost. So

491
00:26:44,800 --> 00:26:46,399
Speaker 1: we've been focused on what is this going to mean

492
00:26:46,440 --> 00:26:48,520
Speaker 1: for our clients, What is this going to mean for

493
00:26:48,560 --> 00:26:50,600
Speaker 1: our talent? What is it going to mean for us

494
00:26:50,640 --> 00:26:55,720
Speaker 1: attracting talent going forward and enabling those people and most

495
00:26:55,840 --> 00:26:58,679
Speaker 1: very talented people want to work with and for the

496
00:26:58,760 --> 00:27:02,399
Speaker 1: very best and brightest and have available to them the

497
00:27:02,440 --> 00:27:04,440
Speaker 1: most state of the art tools, and that's what we'll

498
00:27:04,480 --> 00:27:08,240
Speaker 1: be provided. And progress is every day. I mean, I

499
00:27:08,240 --> 00:27:13,159
Speaker 1: haven't even focused in on what the advances that are

500
00:27:13,400 --> 00:27:15,480
Speaker 1: very familiar with sorrow about what was going on this

501
00:27:15,560 --> 00:27:20,520
Speaker 1: morning open and that has a positive impact used as

502
00:27:20,560 --> 00:27:25,320
Speaker 1: a tool made available to our knowledge workers and so

503
00:27:26,040 --> 00:27:29,960
Speaker 1: others will try. Someone will succeed, but we'll wind up

504
00:27:29,960 --> 00:27:31,240
Speaker 1: at the end of the day, with the very best

505
00:27:31,280 --> 00:27:33,520
Speaker 1: talent in the industry. I think, as we always have.

506
00:27:33,760 --> 00:27:36,480
Speaker 3: And Phillip, that talent wants to be enabled with the

507
00:27:36,560 --> 00:27:39,920
Speaker 3: latest and greatest tools. John was though, talking about how

508
00:27:39,920 --> 00:27:42,080
Speaker 3: the barriers for entry were very low and now they've

509
00:27:42,080 --> 00:27:45,040
Speaker 3: got higher, but general to AI makes the barrier to

510
00:27:45,200 --> 00:27:48,800
Speaker 3: entry for new upstarts incredibly low, do you not believe.

511
00:27:48,840 --> 00:27:51,720
Speaker 12: I'm not sure that I would agree with them, because ultimately,

512
00:27:51,800 --> 00:27:54,880
Speaker 12: what you have to have is connectivity to a very

513
00:27:55,000 --> 00:27:57,919
Speaker 12: very broad range of capabilities. And so I think that

514
00:27:58,440 --> 00:28:00,880
Speaker 12: if you're thinking about it in a very reductive sense

515
00:28:00,880 --> 00:28:04,199
Speaker 12: and you're saying, well, anybody can create a piece of content, sure,

516
00:28:04,680 --> 00:28:07,520
Speaker 12: but the reality is that unless that content is connected

517
00:28:07,520 --> 00:28:10,679
Speaker 12: to a very sophisticated platform with a great deal of

518
00:28:10,720 --> 00:28:14,960
Speaker 12: technology and a lot of data, then fundamentally it's not

519
00:28:15,000 --> 00:28:19,280
Speaker 12: really very useful to the clients who need accountability, need outcomes,

520
00:28:19,440 --> 00:28:21,240
Speaker 12: and are very sophisticated themselves.

521
00:28:22,280 --> 00:28:25,440
Speaker 3: We are, of course, speaking with Philip Krakowski of Interpublic

522
00:28:25,440 --> 00:28:28,880
Speaker 3: Group and John Wren of Omnikrom and John going back

523
00:28:28,920 --> 00:28:31,119
Speaker 3: to ultimately this pie that at the moment is being

524
00:28:31,200 --> 00:28:34,680
Speaker 3: redistributed among new players. It's not just meta and alphabet

525
00:28:35,080 --> 00:28:38,240
Speaker 3: I mean byte dancers in their taking space Amazon as well.

526
00:28:38,320 --> 00:28:41,720
Speaker 3: Do you think ultimately the agencies that four that become

527
00:28:41,840 --> 00:28:45,120
Speaker 3: three will own as much as the one trillion of

528
00:28:45,160 --> 00:28:47,280
Speaker 3: the market that it does it today or will that

529
00:28:47,320 --> 00:28:49,600
Speaker 3: continue to erode?

530
00:28:49,920 --> 00:28:53,080
Speaker 1: Well, many of these players have been competitives of ours

531
00:28:53,120 --> 00:28:55,840
Speaker 1: now for quite a while. I mean, so it's not new.

532
00:28:57,560 --> 00:28:59,840
Speaker 1: Some of the tools, some of the capabilities that are

533
00:28:59,800 --> 00:29:05,640
Speaker 1: being created today, on one hand, would be very welcome

534
00:29:05,680 --> 00:29:10,800
Speaker 1: and usable by smaller marketers, but larger marketers I refer

535
00:29:10,920 --> 00:29:15,040
Speaker 1: to Felipa's talented mentioning a minute ago, are going to

536
00:29:15,080 --> 00:29:17,400
Speaker 1: have to be a bit. You have to bring brand

537
00:29:17,440 --> 00:29:20,440
Speaker 1: safety into considerations as you do this. You have to

538
00:29:20,480 --> 00:29:23,480
Speaker 1: bring in considerations do you have the right to use

539
00:29:23,520 --> 00:29:27,080
Speaker 1: your image and your voice my next commercial, even though

540
00:29:27,160 --> 00:29:29,560
Speaker 1: it might be a perfect setting for what I'm trying

541
00:29:29,560 --> 00:29:33,000
Speaker 1: to accomplish. So there are a lot of considerations. Europe

542
00:29:33,120 --> 00:29:35,080
Speaker 1: is different than the US, Chinese is going to be

543
00:29:35,080 --> 00:29:39,280
Speaker 1: different than everybody else, So that competitive set has always

544
00:29:39,760 --> 00:29:43,480
Speaker 1: been out there. We with the resources that we have

545
00:29:43,920 --> 00:29:47,760
Speaker 1: defending ourselves in this environment have been very successful and

546
00:29:47,760 --> 00:29:50,320
Speaker 1: we will continue to be successful, will be more successful

547
00:29:50,360 --> 00:29:53,040
Speaker 1: now this will be more focused and we will have

548
00:29:54,120 --> 00:29:57,280
Speaker 1: more resources to respond to things that change.

549
00:29:57,560 --> 00:30:00,239
Speaker 3: Things that change are like a new administration Phllip And

550
00:30:00,280 --> 00:30:02,600
Speaker 3: everyone's been saying, what about the regulatory outlook? I mean,

551
00:30:02,640 --> 00:30:05,680
Speaker 3: if you are it's global jurisdictions here, how confident are

552
00:30:05,720 --> 00:30:07,080
Speaker 3: you that this deal actually gets through?

553
00:30:07,440 --> 00:30:07,600
Speaker 1: Well?

554
00:30:07,640 --> 00:30:10,720
Speaker 12: To John's point, it's been a long time in the making.

555
00:30:10,800 --> 00:30:14,440
Speaker 12: We've been very deliberate, So you can assume that you know,

556
00:30:14,600 --> 00:30:17,200
Speaker 12: we took advice as we were heading into this because

557
00:30:17,200 --> 00:30:18,760
Speaker 12: to your point, we're going to be looking at a

558
00:30:18,800 --> 00:30:23,080
Speaker 12: dozen or more jurisdictions in which this will need to

559
00:30:23,440 --> 00:30:26,840
Speaker 12: clear that hurdle, and we have a high degree of

560
00:30:26,880 --> 00:30:29,280
Speaker 12: confidence that that's something that we can achieve.

561
00:30:29,560 --> 00:30:32,120
Speaker 3: Do you have a high degree of confidence judged in

562
00:30:32,160 --> 00:30:35,360
Speaker 3: your client in the macro perspective that they currently have.

563
00:30:35,600 --> 00:30:37,920
Speaker 3: How willing are people to commit to big campaigns in

564
00:30:37,960 --> 00:30:41,480
Speaker 3: this macro environment as we do have so much geopolitical uncertainty.

565
00:30:41,560 --> 00:30:46,080
Speaker 1: Sure, clients still wake up in the morning. They're running

566
00:30:46,080 --> 00:30:48,280
Speaker 1: their businesses, and they're running their factories and have to

567
00:30:48,280 --> 00:30:53,840
Speaker 1: sell their products. Maybe the nature of what they're advertising

568
00:30:53,960 --> 00:30:56,800
Speaker 1: or the channel in which they're trying to reach their

569
00:30:56,920 --> 00:31:00,640
Speaker 1: customer change, but that's what we're best at and the

570
00:31:00,720 --> 00:31:04,840
Speaker 1: velocity of that change, and people will do different things

571
00:31:04,880 --> 00:31:07,880
Speaker 1: to respond to the market approach differently. I think the

572
00:31:08,000 --> 00:31:11,120
Speaker 1: change the administration is probably a positive thing. I suspect

573
00:31:11,160 --> 00:31:14,080
Speaker 1: the new administration is going to be more business friendly

574
00:31:14,560 --> 00:31:21,440
Speaker 1: than anyone's complained about the existing administration. So I'm not

575
00:31:21,840 --> 00:31:24,480
Speaker 1: anticipating and we've been well advised, but we have to

576
00:31:24,520 --> 00:31:27,800
Speaker 1: go through the process. But there are a lot of

577
00:31:27,800 --> 00:31:30,920
Speaker 1: competitors out there, so that won't be an issue in

578
00:31:30,960 --> 00:31:35,960
Speaker 1: the final days. Now, the whole focus is on the

579
00:31:36,000 --> 00:31:40,600
Speaker 1: flexibility and the agility. Even though people who want to

580
00:31:40,680 --> 00:31:43,480
Speaker 1: tend to look at size and look at the negative

581
00:31:43,480 --> 00:31:47,840
Speaker 1: aspects of size, we see sizes empowering because it will

582
00:31:47,880 --> 00:31:52,040
Speaker 1: give us more resource. And what's key is to keep

583
00:31:52,040 --> 00:31:58,040
Speaker 1: the agility and lead creativity to the talented people that

584
00:31:58,240 --> 00:32:01,479
Speaker 1: we both have in our employee and responsible for us

585
00:32:01,480 --> 00:32:04,680
Speaker 1: both being here today, but enabling them with the best tools,

586
00:32:05,040 --> 00:32:08,400
Speaker 1: cutting edge so they can go into the largest advertisers

587
00:32:08,400 --> 00:32:11,720
Speaker 1: in the world and with great confidence tell them that

588
00:32:12,800 --> 00:32:17,080
Speaker 1: it's always changing. Nothing yesterday doesn't exist anymore. It's what's tomorrow.

589
00:32:17,440 --> 00:32:19,560
Speaker 1: But where the place to come.

590
00:32:19,440 --> 00:32:23,280
Speaker 3: To Thanks for coming to us today, John Man of Omnicom.

591
00:32:23,560 --> 00:32:27,480
Speaker 3: I thank Philip Berkowski of Into Public Group. We appreciate it. Meanwhile,

592
00:32:28,000 --> 00:32:30,880
Speaker 3: of course today Blue Meg Television is having live coverage

593
00:32:30,880 --> 00:32:33,479
Speaker 3: of an inaugural women Money and Power event. It's convening

594
00:32:33,520 --> 00:32:37,200
Speaker 3: influential women voice says in finance to discuss.

595
00:32:36,920 --> 00:32:37,800
Speaker 2: The future of business.

596
00:32:38,040 --> 00:32:39,640
Speaker 3: Look, they've got to talk AI, they've got to talk

597
00:32:39,640 --> 00:32:41,120
Speaker 3: fintech in global finance.

598
00:32:41,160 --> 00:32:43,400
Speaker 2: Just take a listen to what the panel is happening underway.

599
00:32:44,440 --> 00:32:45,040
Speaker 2: Then when you.

600
00:32:45,040 --> 00:32:50,640
Speaker 13: Come to a data dwiffen selection of customers, and this

601
00:32:50,760 --> 00:32:53,000
Speaker 13: is something that is no border, we love for it

602
00:32:53,120 --> 00:32:56,760
Speaker 13: for all the insights that we can provide information about

603
00:32:56,800 --> 00:33:00,520
Speaker 13: the market that you know buyers and sell it from

604
00:33:00,560 --> 00:33:03,320
Speaker 13: different regions in the country, can be can can benefit

605
00:33:03,400 --> 00:33:03,640
Speaker 13: from it.

606
00:33:03,640 --> 00:33:04,440
Speaker 2: All of you have talked.

607
00:33:04,320 --> 00:33:06,840
Speaker 5: About this idea of kind of assessing risks and as

608
00:33:06,880 --> 00:33:09,080
Speaker 5: we were walking on stage, I heard, you know, folks

609
00:33:09,120 --> 00:33:11,720
Speaker 5: from deep Miving, we worry about everything the existential crisis

610
00:33:11,720 --> 00:33:15,160
Speaker 5: of AI. Whose values are encoded in these things, whether

611
00:33:15,200 --> 00:33:17,479
Speaker 5: it's like misinformation at scale or whatever that might be.

612
00:33:18,120 --> 00:33:18,600
Speaker 1: What are the.

613
00:33:18,720 --> 00:33:21,160
Speaker 5: Risks of the scenarios that you all are describing, What

614
00:33:21,200 --> 00:33:23,480
Speaker 5: are the risks of having your AI look at a

615
00:33:23,520 --> 00:33:25,000
Speaker 5: contract and be like, seems good.

616
00:33:28,240 --> 00:33:34,280
Speaker 14: What there are great risk but can something what And

617
00:33:34,320 --> 00:33:36,080
Speaker 14: it's kind of not not that me say. They've been

618
00:33:36,080 --> 00:33:39,240
Speaker 14: discussed a lot about, right I think for me think

619
00:33:39,560 --> 00:33:40,680
Speaker 14: I keep thinking system.

620
00:33:40,680 --> 00:33:42,720
Speaker 2: There is an effect which apparently.

621
00:33:42,320 --> 00:33:47,360
Speaker 14: Now is uncontroversial, which is in fears from now twenty

622
00:33:47,480 --> 00:33:52,719
Speaker 14: fifty AI will be the most intelligent being on on

623
00:33:52,720 --> 00:33:56,440
Speaker 14: on the planet. It's no doubt mosk of at nights yeah, yeah,

624
00:33:56,600 --> 00:33:59,920
Speaker 14: but by a factor of there's not even ten. Right,

625
00:34:00,280 --> 00:34:03,000
Speaker 14: So when you think about that, this is the first

626
00:34:03,040 --> 00:34:05,640
Speaker 14: time in ISS that's ever happened. All of a sudden

627
00:34:05,720 --> 00:34:08,480
Speaker 14: can be very scary, right, So in the risk associdity

628
00:34:08,600 --> 00:34:10,920
Speaker 14: there are a lot because all of a sudden we

629
00:34:10,920 --> 00:34:13,239
Speaker 14: can lose control all of a sudden in the in

630
00:34:13,320 --> 00:34:16,520
Speaker 14: the short term even we can delegate too much and

631
00:34:16,600 --> 00:34:19,040
Speaker 14: know and lose a sense of reality.

632
00:34:19,080 --> 00:34:20,080
Speaker 2: What's real? What's real?

633
00:34:20,120 --> 00:34:21,920
Speaker 14: And the contra is the contral done well or not?

634
00:34:22,239 --> 00:34:24,840
Speaker 14: But if you project in the in the long term,

635
00:34:25,239 --> 00:34:26,920
Speaker 14: it could be even bigger risks in that, right, So

636
00:34:27,120 --> 00:34:30,319
Speaker 14: it's about losing control. And so how do we put

637
00:34:30,400 --> 00:34:34,000
Speaker 14: some boundaries, How can we still make sure, we're control,

638
00:34:34,040 --> 00:34:35,400
Speaker 14: we're in charge, and I think.

639
00:34:36,680 --> 00:34:38,440
Speaker 2: I don't think there's a solution yet.

640
00:34:39,360 --> 00:34:41,200
Speaker 14: But there are probably two ways and needs to be

641
00:34:41,200 --> 00:34:44,120
Speaker 14: explored in parallel. So one is the usual way of

642
00:34:44,640 --> 00:34:48,279
Speaker 14: controls and boundaries. So now for example, which is you know,

643
00:34:48,360 --> 00:34:52,080
Speaker 14: quality ssurance, limitation of the level of delegation. For example,

644
00:34:52,120 --> 00:34:54,920
Speaker 14: if we now use AI for a contract, cause somebody

645
00:34:54,960 --> 00:34:56,279
Speaker 14: should review it, and of course it.

646
00:34:56,280 --> 00:34:59,520
Speaker 5: Should uman be a human should review A human should review.

647
00:34:59,320 --> 00:35:01,000
Speaker 14: It right in the short and maybe we get to

648
00:35:01,000 --> 00:35:03,760
Speaker 14: a point where we'll have another reviewing it. It's already happening,

649
00:35:03,800 --> 00:35:06,720
Speaker 14: you know, on applications, but that needs to happen.

650
00:35:06,880 --> 00:35:08,279
Speaker 2: And the other side is.

651
00:35:09,680 --> 00:35:12,960
Speaker 14: And we'll be more and more is heataches because as

652
00:35:12,960 --> 00:35:15,680
Speaker 14: sort of boy, you know, as the model gets very advanced,

653
00:35:15,680 --> 00:35:18,080
Speaker 14: you need to ingrain the rules so behavior in the

654
00:35:18,120 --> 00:35:20,239
Speaker 14: model itself. And that's why I think there's a lot

655
00:35:20,280 --> 00:35:23,439
Speaker 14: of not all the discussion, but starting now about how

656
00:35:23,480 --> 00:35:24,360
Speaker 14: can you make it happen?

657
00:35:24,440 --> 00:35:27,640
Speaker 2: Right, I think that's the main risk.

658
00:35:27,840 --> 00:35:32,719
Speaker 14: How do you maintain control without leveraging the power AI?

659
00:35:32,920 --> 00:35:35,600
Speaker 14: And it will fascinating in the next few years to

660
00:35:35,680 --> 00:35:37,520
Speaker 14: see what kind of solutions come in place.

661
00:35:37,640 --> 00:35:40,960
Speaker 5: I'm putting in terms of the deployment of you know,

662
00:35:41,400 --> 00:35:45,560
Speaker 5: digital solutions, in terms of people using their phones.

663
00:35:45,200 --> 00:35:47,640
Speaker 1: For all these things. One of the.

664
00:35:47,280 --> 00:35:50,120
Speaker 5: Realities I'm thinking about the Apple context. You know, to

665
00:35:50,360 --> 00:35:52,800
Speaker 5: use AI on an iPhone, you have to have the

666
00:35:52,920 --> 00:35:56,400
Speaker 5: very latest, most expensive version of what is already a

667
00:35:56,520 --> 00:35:59,000
Speaker 5: very expensive smartphone. All of you kind of operating in

668
00:35:59,000 --> 00:36:01,480
Speaker 5: context where not all of your customers might have the

669
00:36:01,560 --> 00:36:05,480
Speaker 5: very latest, most expensive versions of things. How are you including,

670
00:36:05,960 --> 00:36:08,080
Speaker 5: you know, the hundreds of millions of people who don't

671
00:36:08,080 --> 00:36:10,320
Speaker 5: have access to spend twelve hundred dollars on a device

672
00:36:10,719 --> 00:36:12,919
Speaker 5: to take advantage of some of the technology that we're

673
00:36:12,960 --> 00:36:13,600
Speaker 5: talking about.

674
00:36:13,680 --> 00:36:17,520
Speaker 15: I think it's very dependent on the community that you're

675
00:36:17,520 --> 00:36:20,960
Speaker 15: operating in and what we found. I think certainly when

676
00:36:20,960 --> 00:36:24,799
Speaker 15: you look at the African continent with products such as Empesa,

677
00:36:25,360 --> 00:36:30,239
Speaker 15: which is a product that provides access to financial services

678
00:36:30,920 --> 00:36:36,359
Speaker 15: to people on the African continent, it works on the

679
00:36:36,400 --> 00:36:39,960
Speaker 15: most basic of mobile phones, and so anybody through the

680
00:36:40,080 --> 00:36:42,640
Speaker 15: use of mobile telephony can be able to you know,

681
00:36:42,680 --> 00:36:46,600
Speaker 15: transfer capital or whatever the case is. And in that case,

682
00:36:46,640 --> 00:36:50,480
Speaker 15: actually it just shows the extent to which FINTACH at

683
00:36:50,480 --> 00:36:54,120
Speaker 15: its most basic level has been able to actually you know,

684
00:36:54,719 --> 00:36:58,600
Speaker 15: hit through many many levels of industry that were actually

685
00:36:58,640 --> 00:37:01,960
Speaker 15: not even there because financial industry has not been very

686
00:37:02,080 --> 00:37:04,399
Speaker 15: robust in many countries on the African continent, and so

687
00:37:04,680 --> 00:37:06,720
Speaker 15: mobile money has ensured.

688
00:37:06,680 --> 00:37:08,080
Speaker 1: That you can leapfrog that.

689
00:37:09,320 --> 00:37:12,480
Speaker 15: But you know, so, so from that perspective, you can

690
00:37:12,600 --> 00:37:16,160
Speaker 15: use the most basic phones for some of the most

691
00:37:16,160 --> 00:37:19,520
Speaker 15: basic products that you can make available because in terms

692
00:37:19,560 --> 00:37:23,919
Speaker 15: of sophistication, the level of sophistication in terms of technology

693
00:37:24,360 --> 00:37:28,240
Speaker 15: is not the same everywhere, certainly where we oppor data access,

694
00:37:28,520 --> 00:37:33,480
Speaker 15: data access absolutely absolutely, so, you know, so we we

695
00:37:33,800 --> 00:37:37,400
Speaker 15: found it to still we're able to use it as

696
00:37:37,440 --> 00:37:42,160
Speaker 15: it's applicable across the African continent. In South Africa where

697
00:37:42,440 --> 00:37:45,400
Speaker 15: mobile telephony is very high and you have access to

698
00:37:46,239 --> 00:37:49,640
Speaker 15: a lot of more sophisticated phones there, you're able to

699
00:37:49,680 --> 00:37:53,319
Speaker 15: make access to a number of products with the use

700
00:37:53,360 --> 00:37:57,239
Speaker 15: of AI to consumers that are using whether it's our

701
00:37:57,280 --> 00:38:01,719
Speaker 15: e commerce platform or they're using any of our platforms,

702
00:38:02,000 --> 00:38:04,480
Speaker 15: our payments platforms are classifieds platforms.

703
00:38:05,480 --> 00:38:07,120
Speaker 2: Yeah, to excess our products.

704
00:38:07,680 --> 00:38:10,680
Speaker 5: Michelle. When you know, you've talked a lot about focusing

705
00:38:10,719 --> 00:38:15,040
Speaker 5: on solving the needs of your SMPS entrepreneurs, what has

706
00:38:15,120 --> 00:38:19,799
Speaker 5: been like the weirdest problem that they have had in

707
00:38:19,880 --> 00:38:22,239
Speaker 5: trying to adapt to all of these many changes that

708
00:38:22,280 --> 00:38:23,560
Speaker 5: seem to be happening at light speed.

709
00:38:23,960 --> 00:38:24,680
Speaker 2: Yeah, definitely.

710
00:38:24,719 --> 00:38:27,440
Speaker 13: When we talk about SMBs, sometimes we're talking about company

711
00:38:27,520 --> 00:38:31,160
Speaker 13: with less than ten people already entrepreneurs.

712
00:38:31,200 --> 00:38:32,120
Speaker 2: They are multitask.

713
00:38:32,520 --> 00:38:34,680
Speaker 13: I think one of the challenge for us is first

714
00:38:34,680 --> 00:38:38,799
Speaker 13: to develop technologies and innovations and AI solutions.

715
00:38:38,960 --> 00:38:40,799
Speaker 2: I mean, this is targeting for what they need.

716
00:38:41,520 --> 00:38:43,680
Speaker 13: And that's why we have been working for over twenty

717
00:38:43,719 --> 00:38:46,400
Speaker 13: five years and we're very happy to have been, you know,

718
00:38:46,440 --> 00:38:47,280
Speaker 13: supporting these.

719
00:38:47,120 --> 00:38:49,000
Speaker 2: Can catch more bluebags, women, money.

720
00:38:48,760 --> 00:38:52,120
Speaker 3: And power evenom right here on Bloomberg Television and for

721
00:38:52,200 --> 00:38:54,440
Speaker 3: now we check in on these markets, says the NASDAK

722
00:38:54,520 --> 00:38:57,640
Speaker 3: tennds into the red. A key contributor to the downside

723
00:38:57,640 --> 00:38:59,440
Speaker 3: in the SMP, for example, has been Oracle of by

724
00:38:59,440 --> 00:39:02,600
Speaker 3: more than seven percent after it's forecast did not live

725
00:39:02,680 --> 00:39:06,160
Speaker 3: up to expectations. And in general we're seeing nine percent

726
00:39:06,200 --> 00:39:09,799
Speaker 3: growth in revenue, not enough to vindicate the eighty percent

727
00:39:09,880 --> 00:39:11,799
Speaker 3: ramp up in the shares we've seen so far this year.

728
00:39:11,880 --> 00:39:14,920
Speaker 3: Move on to other individual movers that we're seeing, notable

729
00:39:14,920 --> 00:39:18,440
Speaker 3: ones to the downside include Mongo dB off by thirteen percent,

730
00:39:18,880 --> 00:39:22,719
Speaker 3: shares declining significantly. Databased software company reporting pretty strong third

731
00:39:22,719 --> 00:39:24,960
Speaker 3: call results, but they also announce the departure of their

732
00:39:24,960 --> 00:39:29,080
Speaker 3: CFO and COO, Michael Gordon. Markets worrying about that despite

733
00:39:29,120 --> 00:39:31,400
Speaker 3: the strong results. I'm looking at at microstrutuy off by

734
00:39:31,400 --> 00:39:33,400
Speaker 3: one and a half percent, Pallenteer up by seven ten

735
00:39:33,520 --> 00:39:35,719
Speaker 3: percent in a down market. This is we understand that

736
00:39:35,760 --> 00:39:38,040
Speaker 3: maybe these names could be the ones next added to

737
00:39:38,080 --> 00:39:40,239
Speaker 3: the Nasdaq one hundred. So we keep a keen eye

738
00:39:40,360 --> 00:39:42,640
Speaker 3: on whose in and out of these benchmarks. But meanwhile,

739
00:39:42,680 --> 00:39:44,680
Speaker 3: coming up, we go to the private markets. V see

740
00:39:44,680 --> 00:39:47,920
Speaker 3: investing trends in cybersecurity sector and nu K Salam.

741
00:39:47,640 --> 00:39:48,319
Speaker 2: Is going to be joining us.

742
00:39:48,320 --> 00:39:59,239
Speaker 3: But in capital ventures this is Bloomberg technology. In the

743
00:39:59,239 --> 00:40:01,640
Speaker 3: first half of this year, Palo Alto Networks forty two

744
00:40:01,719 --> 00:40:04,840
Speaker 3: reported in one the four percent increase in ransomware victims

745
00:40:05,000 --> 00:40:07,319
Speaker 3: compared to the first half of twenty twenty three. Higher

746
00:40:07,400 --> 00:40:10,719
Speaker 3: level of activity observed last year was no fluke. This

747
00:40:10,880 --> 00:40:13,239
Speaker 3: makes cybersecurity a hot sector to invest in if you're

748
00:40:13,239 --> 00:40:14,000
Speaker 3: a venture capitalist.

749
00:40:14,040 --> 00:40:14,680
Speaker 2: We got one of them.

750
00:40:14,960 --> 00:40:18,600
Speaker 3: Enrickie Salem, partner at being Capital Ventures and former CEO Simantec,

751
00:40:19,120 --> 00:40:22,520
Speaker 3: and we're all about this on VC Spotlight continued focus

752
00:40:22,840 --> 00:40:25,920
Speaker 3: on cyber Does ransomware make a keen interest for you?

753
00:40:27,560 --> 00:40:30,480
Speaker 16: Well, obviously it's one of the biggest attack vectors today

754
00:40:30,480 --> 00:40:33,320
Speaker 16: and what we're seeing is no one's immune. You've basically

755
00:40:33,360 --> 00:40:38,719
Speaker 16: got small businesses, hospitals, governments. You saw recently that at

756
00:40:38,760 --> 00:40:42,440
Speaker 16: Starbucks the baristas couldn't access their schedules because of a

757
00:40:42,480 --> 00:40:46,160
Speaker 16: ransomware attack, and you're seeing it pretty prevalent across all industries.

758
00:40:45,680 --> 00:40:48,560
Speaker 3: Today, affecting one in ten companies each year according to

759
00:40:48,640 --> 00:40:49,360
Speaker 3: JP Morgan.

760
00:40:49,880 --> 00:40:51,360
Speaker 2: What are the best ways of preventing this?

761
00:40:51,440 --> 00:40:53,800
Speaker 3: How is the technology changing to ensure that we're getting

762
00:40:54,520 --> 00:40:56,440
Speaker 3: one of a kind founders coming to the space.

763
00:40:57,480 --> 00:40:59,880
Speaker 16: Well, so we're always looking to find new solutions to

764
00:41:00,080 --> 00:41:02,560
Speaker 16: how do you prevent an attack from happening? And that's

765
00:41:02,600 --> 00:41:04,560
Speaker 16: the key is first try to prevent it, and what

766
00:41:04,600 --> 00:41:07,640
Speaker 16: that means is try to understand what is the activity

767
00:41:07,680 --> 00:41:10,080
Speaker 16: or behavior that a ransomware attack will do, which is

768
00:41:10,120 --> 00:41:13,480
Speaker 16: ultimately try to encrypt the data on your computer and

769
00:41:13,520 --> 00:41:16,560
Speaker 16: also exfiltrated. But the most important thing now is be

770
00:41:16,719 --> 00:41:19,000
Speaker 16: prepared to recover. How do you make sure that you

771
00:41:19,040 --> 00:41:22,319
Speaker 16: can decrypt it successfully and get all your data back

772
00:41:22,360 --> 00:41:24,879
Speaker 16: without having to pay the ransom, which is what they're

773
00:41:24,920 --> 00:41:26,600
Speaker 16: targeting to try to get you to do.

774
00:41:27,360 --> 00:41:30,080
Speaker 3: Has that been some of the most fruitful areas allocating

775
00:41:30,160 --> 00:41:30,520
Speaker 3: right now?

776
00:41:30,600 --> 00:41:32,480
Speaker 2: There's also just cyber is just so prevalent.

777
00:41:32,520 --> 00:41:35,960
Speaker 3: More generally, we're worrying about supply chain threats as well.

778
00:41:36,000 --> 00:41:38,359
Speaker 3: Where else have you seen opportunities to be putting money

779
00:41:38,360 --> 00:41:38,720
Speaker 3: to work?

780
00:41:39,640 --> 00:41:42,520
Speaker 16: Well, you talked about supply chain security. We saw the

781
00:41:42,600 --> 00:41:46,560
Speaker 16: major attack on solar winds which hit eighteen thousand companies,

782
00:41:46,960 --> 00:41:49,360
Speaker 16: and what we saw then was an executive order for

783
00:41:49,880 --> 00:41:53,520
Speaker 16: President Biden that said every company needs to take supply

784
00:41:53,640 --> 00:41:57,239
Speaker 16: chain security very seriously, and ultimately that gave rise to

785
00:41:57,320 --> 00:42:00,919
Speaker 16: a whole new set of companies, companies like Stacklock, chain Guard,

786
00:42:01,080 --> 00:42:04,440
Speaker 16: and a number of others that are now actively providing

787
00:42:04,480 --> 00:42:06,840
Speaker 16: solutions to businesses to protect their supply chains.

788
00:42:07,480 --> 00:42:09,960
Speaker 3: We find you so interesting because of course you were

789
00:42:10,000 --> 00:42:13,200
Speaker 3: a CEO yourself. You're also appointed to President Barack Obama's

790
00:42:13,200 --> 00:42:16,439
Speaker 3: Management Advisory Board. You understand how politics works at hand

791
00:42:16,440 --> 00:42:18,839
Speaker 3: in hand with leading businesses. How are you advising your

792
00:42:18,840 --> 00:42:21,200
Speaker 3: portfolio companies now? As we start to look towards the

793
00:42:21,239 --> 00:42:22,879
Speaker 3: next administration in twenty twenty five.

794
00:42:23,920 --> 00:42:26,000
Speaker 16: Well, I think it's going to be an interesting opportunity

795
00:42:26,000 --> 00:42:27,839
Speaker 16: for a lot of companies. The biggest trend that we've

796
00:42:27,880 --> 00:42:30,400
Speaker 16: all been talking about is AI, and AI is going

797
00:42:30,440 --> 00:42:33,520
Speaker 16: to completely change how many of our businesses work. The

798
00:42:33,560 --> 00:42:36,560
Speaker 16: attackers we've talked about security, what we're seeing is they

799
00:42:36,560 --> 00:42:39,880
Speaker 16: can be so much more aggressive now on targeted phishing

800
00:42:39,880 --> 00:42:43,360
Speaker 16: attacks that are custom made to really get somebody to react.

801
00:42:43,400 --> 00:42:45,080
Speaker 1: You know, we're seeing deep fakes.

802
00:42:45,120 --> 00:42:47,320
Speaker 16: And so we're telling all our companies how do you

803
00:42:47,360 --> 00:42:50,719
Speaker 16: take advantage of AI? And then the new administration I

804
00:42:50,719 --> 00:42:54,320
Speaker 16: think will give us opportunities to drive potentially consolidation M

805
00:42:54,360 --> 00:42:57,360
Speaker 16: and A. And we're hoping that the IPO market comes

806
00:42:57,360 --> 00:42:58,560
Speaker 16: back in twenty twenty five.

807
00:42:58,960 --> 00:43:01,799
Speaker 3: Riki Salem, have you back when an IPO market starts

808
00:43:01,840 --> 00:43:04,560
Speaker 3: to creak open partner capital ventures?

809
00:43:04,560 --> 00:43:04,960
Speaker 2: We thank you.

810
00:43:05,640 --> 00:43:08,480
Speaker 3: Let's talk about geopolitics a little bit more. Huawei suppliers

811
00:43:08,520 --> 00:43:11,160
Speaker 3: are facing more limitations this as a US lawmakers are

812
00:43:11,200 --> 00:43:14,520
Speaker 3: moving to restrict the Pentagon from doing business with companies

813
00:43:14,600 --> 00:43:17,160
Speaker 3: that sell chips and services to the Chinese company who

814
00:43:17,239 --> 00:43:19,719
Speaker 3: mergs Mike Sheppard joins US for now, for more, this

815
00:43:19,880 --> 00:43:23,000
Speaker 3: continues to be the narrative China US facilities dialing up.

816
00:43:23,120 --> 00:43:25,880
Speaker 3: From a tech perspective, already, it is pretty hard if

817
00:43:25,920 --> 00:43:28,279
Speaker 3: you were supplying to Huawei, but not hard enough clearly.

818
00:43:28,800 --> 00:43:32,200
Speaker 17: Well, apparently not for lawmakers on Capitol Hill who want

819
00:43:32,239 --> 00:43:35,680
Speaker 17: to bar defense contractors from doing any sort of business

820
00:43:36,000 --> 00:43:40,000
Speaker 17: whatsoever with Huawei, which is a national champion in China,

821
00:43:40,040 --> 00:43:43,520
Speaker 17: but here in Washington it's considered an outcast and pariah.

822
00:43:43,719 --> 00:43:46,880
Speaker 17: It's been subject to a growing list of US sanctions

823
00:43:47,160 --> 00:43:51,239
Speaker 17: and export controls that have limited American companies greatly from

824
00:43:51,280 --> 00:43:55,680
Speaker 17: doing business with Huawei already, and now we're seeing more

825
00:43:55,800 --> 00:44:00,120
Speaker 17: restrictions coming their way, this time through the Pentagon. This

826
00:44:00,200 --> 00:44:04,120
Speaker 17: is likely to become law. The provision is attached to

827
00:44:04,239 --> 00:44:08,439
Speaker 17: must pass defense policy legislation that we will see action

828
00:44:08,600 --> 00:44:11,759
Speaker 17: on in coming weeks before lawmakers leave town for the holidays.

829
00:44:12,040 --> 00:44:14,799
Speaker 17: So this is something coming down the piking. Companies will

830
00:44:14,800 --> 00:44:17,360
Speaker 17: have to deal with it within a nine month span

831
00:44:17,440 --> 00:44:20,680
Speaker 17: that is when the provision actually takes effect, and there

832
00:44:20,719 --> 00:44:24,399
Speaker 17: are very rare exemptions granted under the law that would

833
00:44:24,400 --> 00:44:27,680
Speaker 17: allow companies to continue to do business with Huawei and

834
00:44:27,760 --> 00:44:29,360
Speaker 17: the Pentagon at the same time.

835
00:44:30,239 --> 00:44:32,520
Speaker 3: Mike Shepherd breaking it all down in the latest tit

836
00:44:32,600 --> 00:44:34,799
Speaker 3: for tat tech trade tensions China US.

837
00:44:34,880 --> 00:44:35,759
Speaker 2: We appreciate it.