Speaker 1: From the heart of where innovation, money and power collide
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Caroline Hyde and Ed Ludlow.
Speaker 2: Live from New York and San Francisco. This is Bloomberg
Speaker 2: Technology coming up. President Trump says global trade deals and
Speaker 2: tariff rates are coming in weeks as he ends his
Speaker 2: technology tour of the Middle East.
Speaker 3: Plus M and A and focus in the world of
Speaker 3: US cable providers, with Charter agreeing to combined with Cox
Speaker 3: in a deal valued at about thirty four point five
Speaker 3: billion dollars.
Speaker 2: And we're joined by Airbnb CEO Brian Cheski after the
Speaker 2: company unveils an app overhaul, a new services offering, and
Speaker 2: a relaunched experiences product. But first we check in on
Speaker 2: these markets, which are having a stellar We are up
Speaker 2: more than six percent on the NASAQ one hundred over
Speaker 2: the last five trading days. We call in terms of
Speaker 2: that investor enthusiasm on the day, but look, consumer sentiment
Speaker 2: ugly ed the second.
Speaker 4: Worst on record. We've had some really painful readings across the.
Speaker 2: Economy, but maybe inflation not as bad as we expected,
Speaker 2: and it is risk one when it comes to tech.
Speaker 3: We had technology earnings overnight, I go to Applied Materials.
Speaker 3: This is America's biggest chip making or chip equipment maker,
Speaker 3: and you can see the stocks down negatively current period
Speaker 3: week outlook, concern about trade, particularly with China. There's a
Speaker 3: bigger conversation to be had here about the reality of
Speaker 3: what's happening in investment going forward despite all the hype
Speaker 3: with chips. Speaking of hype, We're going to go out
Speaker 3: to the Middle East soon, right, And the big beneficiaries
Speaker 3: of President Trump's visit are on this screen, principally in video.
Speaker 3: Video is up for a fourth straight week, a four
Speaker 3: straight weekly gain, up fifteen percent on the week, and
Speaker 3: I'm sure Amhmrie is going to talk about how Jensen
Speaker 3: was by the President's side every step.
Speaker 5: Of the way.
Speaker 3: Comparing contrast with Apple, it's still up six percent despite
Speaker 3: the negative headlines, but it's rebounding from last week where
Speaker 3: it's sort of declined.
Speaker 2: Character extraordinary amount of market capitalization added what more than
Speaker 2: four hundred billion dollars to in video alone over the
Speaker 2: last five trading days. And that's as President Trump said
Speaker 2: though that he actually will be looking back at tariff
Speaker 2: rates for US trading partners d quote over the next
Speaker 2: two to three weeks, saying his administration actually lacks the
Speaker 2: capacity to negotiate the deals with all of its trading partners.
Speaker 2: Let's just run through the week that was with Trump's
Speaker 2: visit in the Middle East. Bloomberg's amorihood and joins US
Speaker 2: now from Abu Dhabi, and he's taken off.
Speaker 4: He's jetting home.
Speaker 2: But he leaves a lot of tech optimism in his weight,
Speaker 2: but a lot of anxiety when it comes to tariffs
Speaker 2: still to deal with.
Speaker 6: Yeah.
Speaker 7: Absolutely, And the President talked about those tariffs today, talked
Speaker 7: about the fact that there's so many countries that are
Speaker 7: lining up and want to negotiate with the administration, but
Speaker 7: right now they're focused on the main trading partner of
Speaker 7: the European Union in Japan India when it comes to
Speaker 7: these other countries. And the President has said this in
Speaker 7: the past, most recently last week I was with him
Speaker 7: in the Oval office and he talked about this, said,
Speaker 7: they're just going to set the rate for these countries
Speaker 7: and let them know where the new rate is. Remember
Speaker 7: Liberation Day, April second. That's how the administration want to
Speaker 7: frame it. Very high teriff rates for a number of countries,
Speaker 7: they put all that on pause, so potentially in July,
Speaker 7: some of these countries they haven't been able to have
Speaker 7: these bespoke agreements with, they're just going to set a
Speaker 7: new rate. So the President is just supposing a lot
Speaker 7: of issues at once. He's still facing some pushback when
Speaker 7: it comes to countries and investors, when it comes to
Speaker 7: the tariff policy and the fact that trade deals can
Speaker 7: take years, with the fact that he's inking deals across
Speaker 7: the entire Middle East between riod Doha and Abu Dhabi
Speaker 7: and Caroline ed, you're one hundred percent right. Tech was
Speaker 7: really the star of this entire trip, specifically Nvidia and
Speaker 7: Jensen Wang. And when I spoke to him briefly in
Speaker 7: Riatto's during this honorary dinner for the President with the
Speaker 7: Crown Prince Mohammed ben Salman, I asked him about the
Speaker 7: diffusion role. I said, you must be happy they rescinded,
Speaker 7: and he said, rescinded, canceled, and because of that he
Speaker 7: is going to be able to get more of those
Speaker 7: advanced chips into the Middle East. The President name checked
Speaker 7: him and Riyad saying, my friend Jensen Wang is here,
Speaker 7: and then.
Speaker 4: A remarkable photo.
Speaker 7: Really yesterday in Abu Dhabi, as Commerce Secretary Howard Lutnik
Speaker 7: was signing this AI partnership between the United States and
Speaker 7: Abu Dhabi.
Speaker 4: That would mean building.
Speaker 7: The biggest AI data center outside of the United States
Speaker 7: right here in Abu Dhabi.
Speaker 4: Look at that photo.
Speaker 7: He is standing in between President Trump and Sheik Muhammad Benzayad.
Speaker 4: It's Jensen Wang.
Speaker 7: He's been everywhere on this trip and you can kind
Speaker 7: of see why.
Speaker 3: Bloom E exam Marie Horden with everything from the ground
Speaker 3: and a long week on of Middle East tour.
Speaker 5: Thank you very much.
Speaker 3: Let's get more on what markets think about President Trump's
Speaker 3: aideals and what that means for technology Epek. This Shia
Speaker 3: is Swiss quote senior analyst, and I showed that chart
Speaker 3: at the top of the show, right, Nvidia, Amazon, and
Speaker 3: Apple over the course of five days as an investor
Speaker 3: in those names in that sector. What's been the net
Speaker 3: result for you of everything that's happened this week.
Speaker 8: Well, the big technology companies have had a very difficult
Speaker 8: quarter with the Chinese AI competition coming up, and the
Speaker 8: trade at tensions and the deals, the Middle East visit
Speaker 8: and these deals are coming right at the best imaginable
Speaker 8: time so far this year. First of all, we have
Speaker 8: been seeing companies delaying their AI investment plans due to
Speaker 8: tariff uncertainties, and there are a lot of questioning regarding
Speaker 8: how much of these investments could still materialize given the
Speaker 8: gloomy economic outlook. And the deals just come at the
Speaker 8: very best time and from the well the richest countries.
Speaker 6: In the world.
Speaker 8: So there is a reason in media john to fifteen
Speaker 8: percent since Donald Trump's Middle East visit. We think that
Speaker 8: the NVIDIA deals with the Saudi and Qatar and abudeb
Speaker 8: is just going to fill in the gap at a
Speaker 8: very very critical time for the chip industry. There is
Speaker 8: one thing, though, we start hearing that at the White
Speaker 8: House some politicians, some members are not fully comfortable with
Speaker 8: the idea of selling chips to the Middle East due
Speaker 8: to the national security reasons. But that's a story to
Speaker 8: be followed for now. Though the optimism has strong legs.
Speaker 5: I want to go there.
Speaker 3: Am Marie talked about the sort of significance of the
Speaker 3: images we showed, which was Jensen Wong standing between the
Speaker 3: President of the United States and his UAE counterparts. But
Speaker 3: actually there are deep concerns that the rescinding of the
Speaker 3: diffusion rule, those are those pictures now? Good job to
Speaker 3: the team in New York does not at all answer
Speaker 3: the question about China. We don't know anything about rules
Speaker 3: for China. Has the market yet to price that in?
Speaker 6: Well?
Speaker 8: I think that most of the Chinese trade war has
Speaker 8: already been posced in and investors have somehow came to
Speaker 8: the conclusion that okay, China will well gently get out
Speaker 8: of this picture and has a slower exposure to well
Speaker 8: to the Western world and vice versa. So there is
Speaker 8: now the thinking emerging that because China is willing to
Speaker 8: gain its independence and it looks like it could get
Speaker 8: there with their own means, that's going to be the
Speaker 8: future for the Chinese companies. There is this thinking that
Speaker 8: China is willing to gain its independence and if they
Speaker 8: do so, actually that's going to be a positive for
Speaker 8: Nvidia because the trade tensions will not necessarily will hit
Speaker 8: them as hard as they have been hit over the past.
Speaker 4: Couple of months.
Speaker 8: This being said, while China's still remains a big chunk
Speaker 8: of the Nvidia's revenue, So before we get there, we
Speaker 8: still have some bomb Heerio to go.
Speaker 2: If it broadened it out because in video, yes crushes
Speaker 2: it on the week up fifteen more than four hundred
Speaker 2: billion dollars in market cap added, it's again a three
Speaker 2: trillion dollar company. Are the legs left to run with?
Speaker 2: In videos? Up to the right and indeed tech more broadly, Well.
Speaker 8: I think that Nvidia still has earnings to be announced,
Speaker 8: and we expect that the earnings are going to be
Speaker 8: strong enough to keep the optimism going. We shouldn't forget
Speaker 8: that Nvidia had a very difficult quarter and we saw
Speaker 8: a very significant fall in a strape price and also
Speaker 8: in its validation.
Speaker 7: And right now with the.
Speaker 8: Arrival of the good news and big lions that actually
Speaker 8: counter with the idea and the worries that the big
Speaker 8: technology clients could be finding their ways out of Nvidia
Speaker 8: is obviously a very positive view, and we think that
Speaker 8: Nvidia does have potential to extend and to well extend
Speaker 8: is rarely on the Middle East deals. If obviously the
Speaker 8: Middle Ist deals materialized and there is not a problem
Speaker 8: barrier in the future.
Speaker 4: Yeah, it's so definitely.
Speaker 8: Yes, it has been a right positive for Nvidia thing.
Speaker 2: I mean, it's been an outright positive for many a
Speaker 2: tech stock this week looking Alphabet more than nine percent
Speaker 2: over the last five trading days.
Speaker 4: That's despite the ongoing worries that this is a company
Speaker 4: that might be forced to break apart.
Speaker 2: Meta also investigation with its monopolistic as has been deemed
Speaker 2: by the FTC monipolistic position. What do you think are
Speaker 2: some of the risks that investors perhaps aren't tuning into
Speaker 2: right now.
Speaker 8: Well, one of the other risks that we see because
Speaker 8: we are in Europe, is that if.
Speaker 4: The trade negotiations don't go well with the.
Speaker 8: European Union, the European regulators will be going after companies
Speaker 8: like Google and Facebook, big technology companies. They have been
Speaker 8: very clear warning the United States about that. So I
Speaker 8: think that one of the trade risks is on these
Speaker 8: companies that have been spared so far because they are
Speaker 8: offering digital services, and it was mostly the companies with
Speaker 8: complex international supply chains like Nvidia, like Google, Apple that
Speaker 8: have been very very hardly hit. We think that there
Speaker 8: are still risks there that have maybe not been fully
Speaker 8: priced in.
Speaker 4: Obviously, the risks.
Speaker 8: Are two sided, because there is always a chance that
Speaker 8: the European Union and the US striker deal. But if
Speaker 8: that's not a decase I think that Microsoft, Girl and
Speaker 8: Facebook are also going to come under pressure.
Speaker 3: Eupe Cosko Deshkaya of Swiss Coat. Great to have you
Speaker 3: back on the show. Thank you.
Speaker 5: Another news story I've been writing about this.
Speaker 3: Morning, Tesla is adding a long time Chipotle executive to
Speaker 3: its board. Jack Harton, will join as a director a
Speaker 3: member of the board's audit committee as of June one,
Speaker 3: Tesla said in a filing. This comes as the Carmakers
Speaker 3: grappling with forny questions over Elon Musk's compensation and its
Speaker 3: strategic direction.
Speaker 2: Charter Communications, well, let's agree to combine with privately held
Speaker 2: Cox Communications in a deal that would unite the two
Speaker 2: of the biggest US cable providers.
Speaker 4: The transaction will.
Speaker 2: Value Cox at about thirty four and a half billion,
Speaker 2: including debts, according to a statement Friday that actually confirmed
Speaker 2: earlier Bloomberg News reports.
Speaker 4: Who that reporting, Michelle Davis was and she joins us.
Speaker 2: Now, Michelle's interesting that this is a fiercely competitive space.
Speaker 4: Does it just have to end in consolidation?
Speaker 9: That's basically what the Cox family is saying. I mean,
Speaker 9: they have been owners of cable assets for seventy years,
Speaker 9: and the fact that they're now saying okay, it's time
Speaker 9: to combine means that that's how fierce it is. And
Speaker 9: you know what's going on is cable companies have been
Speaker 9: making their revenue from Internet, but everyone has Broadway ad
Speaker 9: Internet these days. And at the same time, the phone
Speaker 9: companies are getting into it and people are cutting the cord,
Speaker 9: and so the idea is this is what they have
Speaker 9: to do to survive.
Speaker 2: John Malone is the billionaire that's sort of behind some
Speaker 2: of these deals. In fact, maybe he signaled this earlier
Speaker 2: than the deal came about.
Speaker 5: Right.
Speaker 2: He had an invested Day saying, look, I want.
Speaker 4: To combine Charter with someone else. I need to be
Speaker 4: able to make a deal here.
Speaker 9: Yeah, this is one of those perennial deals that John
Speaker 9: Malone has wanted to do for more than ten years,
Speaker 9: and it took time for it to get there. But
Speaker 9: in December November, during the Liberty Media Investor Day, he said,
Speaker 9: it's so competitive. The tech companies are allowed to just
Speaker 9: roam the earth without limits, and why should cable companies
Speaker 9: just be restricted to one part of the country. They
Speaker 9: should be allowed. Charter, he said, should be allowed to
Speaker 9: merge with Cox, Comcast or T Mobile, and I guess
Speaker 9: they chose Cox.
Speaker 2: And what's interesting is that meanwhile, the T Mobiles, the
Speaker 2: AT and t's of horizons are busy trying to do
Speaker 2: wireless offerings and they're almost offering their.
Speaker 4: Services to tom cable providers.
Speaker 2: Is this therefore going to get through regulatory scrutiny because
Speaker 2: it's just so fiercely competitive.
Speaker 4: So it's going to be.
Speaker 9: The big litmus test of the Trump administration to see
Speaker 9: how it's received. The companies clearly believe that they have
Speaker 9: a shot at getting it through the way the cable
Speaker 9: industry is structured in the US means there's not any
Speaker 9: overlap in terms of geographies that these companies play. And
Speaker 9: I think part of why they're focusing on this competitive
Speaker 9: element is because their argument is we need to do
Speaker 9: this to survive.
Speaker 2: It's been great talking to Michelle Davis. We appreciate it. Meanwhile, Ed,
Speaker 2: you're looking another key story.
Speaker 5: Yeah.
Speaker 3: Turning to Coinbase, the crypto platform disclosed it had suffered
Speaker 3: from a hack that leaked sensitive customer data going as
Speaker 3: far back as January, the revelation coming just three days
Speaker 3: after Coinbase was added to the S and P five
Speaker 3: hundred bluing Bosse Margie Murphy's here, let's go to the
Speaker 3: basics and details of the hack. What were hackers able
Speaker 3: to obtain, how did they do it, and what was
Speaker 3: the kind of net effect for coinbase and coinbased customers.
Speaker 10: Right, so, back in January, the threat actor realized that
Speaker 10: they could get access to some of Coinbase's contractors in
Speaker 10: their customer support assistance teams, and essentially the threat actor
Speaker 10: was bribing individual employees or contractors and saying I'll give
Speaker 10: you cash if you give me the information on coinbased customers,
Speaker 10: and that has been They have been giving a drip
Speaker 10: feed through since January up until around this week when
Speaker 10: Coinbase say it received an anonymous email saying, I'm the
Speaker 10: person who's been bribing your customer support assistance. I have
Speaker 10: this pool of information on some of the most valuable
Speaker 10: customers you own. Give me twenty dollars at twenty dollars,
Speaker 10: give me twenty million dollars.
Speaker 4: And I will delete that information.
Speaker 10: And this week Coinbase will yesterday disclosed that that had
Speaker 10: been going on and that they refuse to pay the
Speaker 10: ransom and they wanted to come public with it instead.
Speaker 3: That's right, if you're just tuning in, I mean Coinbase
Speaker 3: shares are pretty buoyant, and Friday session they had fallen
Speaker 3: by seven percent or so in Thursday session. The simple
Speaker 3: question is what happens next?
Speaker 10: Right, So Coinbase is estimated that this is probably going
Speaker 10: to cost them around four hundred million, And what they're
Speaker 10: saying to customers is, look, they hacker didn't access your
Speaker 10: account through us, but they got a lot of information
Speaker 10: that they could very easily socially engineer you. So they've
Speaker 10: been sending out emails to people they believe have been affected,
Speaker 10: and they are saying, if you do suffer a loss
Speaker 10: as a result of this data being leaked, we will
Speaker 10: compensate you.
Speaker 3: Marg I'm sorry to interrupt you in your career covering
Speaker 3: cybersecurity and.
Speaker 5: Hacks like this.
Speaker 3: Where does this rank in sort of corporate worlds?
Speaker 5: It's pretty bad.
Speaker 10: It's the way that the hackers can use this information
Speaker 10: to target wealthy people. They are able to see the
Speaker 10: balances in their coin based accounts, and they now have
Speaker 10: very very detailed information on these individuals that they can
Speaker 10: go and socially engineer them, not just to get into
Speaker 10: their coin based accounts, but into other financial accounts that
Speaker 10: they might own, and by social engineering. I mean calling
Speaker 10: up and saying I'm a bank support assystem and when
Speaker 10: the person questions, well, you know, how can you prove that?
Speaker 10: Give me some information about my account, and they can say, well,
Speaker 10: I have names, emails, balance, you know your last transactions.
Speaker 10: It's all very convincing information. So I think in terms
Speaker 10: of they may not have got an inter coin basis
Speaker 10: systems per se and broken into their networks, but the
Speaker 10: mushrooming effect this will have on people's personal data and
Speaker 10: the potential impacts that could have on people in individuals
Speaker 10: losing their money.
Speaker 5: Is a pretty big.
Speaker 3: Moodlo's Margie Murphy on a breaking and fast moving story,
Speaker 3: Thank you very much. TikTok is willing to talk about
Speaker 3: it's Brazil operations with the South American country's government, according
Speaker 3: to an official. This follows a visit to China earlier
Speaker 3: this week, when President Lula and the First Lady expressed
Speaker 3: concerns over the potentially harmful the app may have on
Speaker 3: children and women.
Speaker 2: Character let's just turn a rotation to other social media
Speaker 2: players because meta ed share still lower. That's after The
Speaker 2: Wall Street Journal reported that the company will delay the
Speaker 2: release of its AI model, the latest one it's called
Speaker 2: Behemoth for more Bloomberg, Riley Griffin can talk not only
Speaker 2: about the AI models but also what's been happening with
Speaker 2: the FTC.
Speaker 4: But I go first to Behemoth.
Speaker 2: How important is it that then perhaps not able to
Speaker 2: make significant incremental improvements on the overall model.
Speaker 11: So this is Meta's biggest model. It's one that they
Speaker 11: have pointed to as a landmark and said that is
Speaker 11: better than chat gbt's comparable model, Claude's.
Speaker 4: They've topped a.
Speaker 11: Big game about Behemoth. The delays here are interesting. They
Speaker 11: were supposed to release the model on April, according to
Speaker 11: our colleagues at the Wall Street Journal, but it's now
Speaker 11: looking like it'll be delayed to the far And the
Speaker 11: point here that I think we need to take Carolina,
Speaker 11: is that each incremental development is going to become increasingly
Speaker 11: harder to achieve. Some of the big advancements that we
Speaker 11: saw earlier on twenty twenty two, twenty twenty three through
Speaker 11: now it's becoming harder and harder to advance these models
Speaker 11: in ways that are worth the releasable milestone.
Speaker 3: Well, it's a difficult undertaking, right, But did the report
Speaker 3: say specifically why it's delayed or who made the call.
Speaker 11: The report said that internally, senior executives at the company
Speaker 11: are disappointed with the team and the milestones that they're
Speaker 11: reaching so far. It didn't explain exactly why it was
Speaker 11: being delayed, so we're going to have to keep watching
Speaker 11: this story unfold.
Speaker 4: And Meta at this time is not commenting.
Speaker 2: I mean, it is interesting, isn't it that all of
Speaker 2: this comes at a time with Meta that not only
Speaker 2: are they trying to push the envelope and general to AI,
Speaker 2: but they're also under a lot of stress. It would
Speaker 2: see you in the courts trying to say, look, Instagram
Speaker 2: and overall WhatsApp are not monopolistic. There are so many
Speaker 2: others out there competing, But the FDC thinks.
Speaker 4: That they're on to snap no doubt.
Speaker 11: And AI, as you mentioned, here is not just a
Speaker 11: story about the chatbots and the models, but it's about
Speaker 11: how they're integrated into the applications themselves. So the future
Speaker 11: of Instagram, the future of WhatsApp has a lot to
Speaker 11: do with the capabilities here.
Speaker 3: Bloombo's Riley Griffin, thank you very much. A big take.
Speaker 3: Microsoft co pilot AI is gaining traction among its customers,
Speaker 3: but the company's investment and relationship with open Ai could
Speaker 3: complicate things for CEO Setia Nadella. It's the subject of
Speaker 3: today's Big Take bloombosostin Car wrote it and joins us
Speaker 3: now in part this is informed with time you spent
Speaker 3: with missing Nodella. Right, but the Copilot launch wasn't smooth,
Speaker 3: wasn't great. They want to put time into it. They
Speaker 3: have to manage their investment and relationship with open Ai,
Speaker 3: which has a competing set of products and offerings.
Speaker 5: Yeah, that's correct.
Speaker 12: I mean I would just you know, turn to your
Speaker 12: viewers out there and ask have you used Copilot or
Speaker 12: has it more likely that you're using chat Ept if
Speaker 12: not even pay for chatchipt subscription. And that's the big
Speaker 12: challenge for Microsoft right now. You know, open Ai really
Speaker 12: was successful thanks to Microsoft It's thirteen point seventy five
Speaker 12: billion dollar investment over the years in the company, as
Speaker 12: well as all the money it poured into GPUs and
Speaker 12: data centers to help with that back end processing. The
Speaker 12: issue is that that sort of gave open Ai headstart,
Speaker 12: but Microsoft has had to play catch up on its
Speaker 12: own app offerings like Copilot, which is both available in
Speaker 12: the enterprise for customers using Word and Excel, as well
Speaker 12: as a standalone consumer version which you can get on
Speaker 12: Windows Max and your iPhone. And it's just really been
Speaker 12: a challenge for Microsoft to show why it's different because
Speaker 12: a lot of people at the beginning just saw it
Speaker 12: as a knockoff of Chatchipt with a different brand name,
Speaker 12: because it was still tapping into open AIS models underneath.
Speaker 12: And that's what Sachnadela is trying to differentiate now, building
Speaker 12: up Microsoft's own models, trying to differentiate their product through
Speaker 12: integrations with Microsoft software.
Speaker 2: You've got Mustafis Suleiman, who we all know well on
Speaker 2: the consumer side. Can you introduce us to a new
Speaker 2: executive that Feathers might not have heard or so much.
Speaker 4: Asha Shama really leading the.
Speaker 2: Charge here from the company's AI platform perspective.
Speaker 4: What does she bring?
Speaker 12: Yeah, I mean, I think what's so fascinating here. She's
Speaker 12: building up a product called Azure AI Foundry, which is
Speaker 12: their sort of AI marketplace that's available on Microsoft's leading
Speaker 12: cloud platform. And I think, you know, a lot of
Speaker 12: people have this grand misunderstanding about Microsoft that it's really
Speaker 12: wetted to Open AI, when in fact that a model
Speaker 12: marketplace offers about nineteen hundred very varied models, including internal
Speaker 12: Microsoft models as well as external third party ones like Meta,
Speaker 12: which you were just talking about a moment ago. So
Speaker 12: Microsoft is and Sachandela are really hedging their bets on.
Speaker 5: Open Ai.
Speaker 12: So you can rent open Ai models through Azure Ai
Speaker 12: Foundry with something Asha is leading, but you can also
Speaker 12: get access to cohere, Mistral, Meta, as well as more
Speaker 12: recently Deep Seeks models that are adding to the platform.
Speaker 2: Austin Khr It's a brilliant read Go get it on
Speaker 2: BusinessWeek along and very deep and thorough one on Microsoft
Speaker 2: as it stands. Welcome back to Blueberg Technology. I'm Caroline
Speaker 2: Head in New York and.
Speaker 5: I met Lodlow in San Francisco.
Speaker 3: So, like in the moment this Friday, when we think
Speaker 3: about at the index level in markets, tech's kind of
Speaker 3: taking a time out with flat on the Nazak one hundred,
Speaker 3: but it has been a strong gain on a weekly basis.
Speaker 3: We're up about six percent on the Nazak one hundred.
Speaker 5: A lot of.
Speaker 3: What's driven that gain over the course of the week
Speaker 3: has been the technology companies that have been beneficiaries of
Speaker 3: President Trump's visit to the Middle East, the AI infrastructure deals.
Speaker 3: You're in videos, your Dell's, your Amazons, for example.
Speaker 5: But the story this Friday is a little.
Speaker 3: Bit economic, Caro, and we'll get to it later in
Speaker 3: the program. A gauge of US consumer sentiment was worrying,
Speaker 3: I think to the markets. But again from a headline perspective,
Speaker 3: there's been a fire hose Monday through Thursday, and I
Speaker 3: kind of feel like in the world of tech, at
Speaker 3: least we're taking a time out.
Speaker 2: We are indeed maybe a whores, but there's no pause
Speaker 2: in terms of deal making right now. And let's just
Speaker 2: go to food delivery company s ED. They have been
Speaker 2: hungry for consolidation, using deals to enter new markets and new.
Speaker 4: Areas of lifestyle.
Speaker 2: Basically this all includes Process which just announced, of course
Speaker 2: relatively recently, to buy just Deep Takeaway for four point
Speaker 2: three billion dollars. There's new strategic partnership between Uber and
Speaker 2: Processes Brazil portfolio company I Food, and not to mention
Speaker 2: the fact that they're getting into travel as well, with
Speaker 2: a completed deal just announced overnight Fabricio Bluisy is with
Speaker 2: US CEO of Process Group.
Speaker 4: You are such a global company, I know You've just.
Speaker 2: Been deemed Brazil's Man of the Year, so your voice
Speaker 2: is a little bit horse.
Speaker 13: Congrats, no caroline for you again.
Speaker 4: Well, congrats also on all this deal making.
Speaker 2: But I'm really interested is to let's just go to
Speaker 2: say the strategic partnership with Uber in Brazil. Why decide
Speaker 2: that's a partnership and that's not m and A to
Speaker 2: add on delivery services and mobility.
Speaker 6: We are super.
Speaker 13: Excited about for the leivers. You know, we just announced
Speaker 13: two months ago the four and a half Beati an
Speaker 13: acquisition of just It's takeaway or waiting for the confirmation
Speaker 13: of this exhibition. But Latin America is very important for
Speaker 13: our strategy. Latin America ecnsistem there, so we have not
Speaker 13: only eyefood but our payment business, but our event business.
Speaker 13: We just close it today. Our travel transaction there it
Speaker 13: was approved today. So we just bought Despegar for close
Speaker 13: to Tribulio Europe. But we don't have our hailing offer
Speaker 13: and what we did was a strategic partnership with Uber,
Speaker 13: so Uber do not have the food delivery. Now Uber
Speaker 13: will have Eyefood inside Uber and we will have right
Speaker 13: Hailey inside Eyefoods. We think we can serve much better
Speaker 13: our customers, not only our customers, but Uber customers. Working together.
Speaker 13: I think that's the future. Offer more to our users.
Speaker 13: It's a partnership and we are very excited about that
Speaker 13: to work closely with Uber.
Speaker 5: Let's talk about the mechanics of the deal. You're a
Speaker 5: deal maker.
Speaker 3: What is the sort of regulatory path been like in
Speaker 3: that country, what's it like doing business in that region,
Speaker 3: and so the basics of our audience. You're going to
Speaker 3: get that deal closed and done right.
Speaker 13: We are very excited that should they A few hours ago,
Speaker 13: we just got our online travel agency deal closes. This
Speaker 13: is Despegar, So we acquired Despegar. It was approved today
Speaker 13: by the regulators. You're very excited about that. The Uber
Speaker 13: deal is not a merge, it's a commercial partnership. We
Speaker 13: are going to offer to our customers access to Uber,
Speaker 13: their customers access to ie Food. So we are not
Speaker 13: waiting for reglatory approval for this deal. We can move fast.
Speaker 13: We can offer better service to our customers. That's the idea.
Speaker 2: And I'll just jump in now because I think what's
Speaker 2: interesting is how you align data sharing with Uber. How
Speaker 2: do you decide what revenue each one takes. What is
Speaker 2: the deal, the intricacies of the deal here that benefits
Speaker 2: both of you because I know you're focused on data,
Speaker 2: because that's the AI win, right.
Speaker 5: Yes, perfect.
Speaker 13: This deal specifically is about offering more services to our customer.
Speaker 13: So we're not sharing revenue. We are going to keep
Speaker 13: the food deliver revenue. We keep the right haling revenue.
Speaker 13: What we do is to offer to all customers in
Speaker 13: Brazil food delivery and rite healing together. That's the focus
Speaker 13: of the deal. But last time I came here to
Speaker 13: talk to you in London, actually talk a lot about
Speaker 13: AI and that's the biggest focus of process. I just
Speaker 13: released a letter this week talking about we are doing
Speaker 13: super well. We are growing a lot. We are more
Speaker 13: than ten percent better than the forecasts I gave. But
Speaker 13: besides that, I'm more excited about how fast we are
Speaker 13: moving in AI. We announced our large Commerce model that
Speaker 13: is a very big AI model that constantly dates all
Speaker 13: transactional information in all processes to train a model to
Speaker 13: serve better our customers. So we are innovating O lots,
Speaker 13: using open aio four and deep secret, all kinds of
Speaker 13: new models to really make a step forward in how
Speaker 13: AI advanced on e commerce, so data is a big
Speaker 13: priority for us. We are investing a lot on that
Speaker 13: and we are just starting to release the good results
Speaker 13: of that.
Speaker 2: And what you call yourself is sort of lifestyle e commerce,
Speaker 2: So sorry, what else do you bolt on? Look, we've
Speaker 2: got the food delivery, you've got the mobility side, you've
Speaker 2: got the travel with this new travel operated that you've been.
Speaker 13: Buying payment, and I think it's good enough for now,
Speaker 13: So let's me deliver lots of results on that. And
Speaker 13: now we'll put some adjacents before. But as you can see,
Speaker 13: food delivery is very important because food delivery is a
Speaker 13: very high frequency business. People buy sometimes five, ten, twenty
Speaker 13: times per week. So on top of food delivery, we
Speaker 13: are putting many other adjacentcies as payments, as travel, as events.
Speaker 13: But why I'm very excited now pros now is much
Speaker 13: more focused in three ecosystems. The first ecosystem of our
Speaker 13: focus is Latin America, so you have all these business,
Speaker 13: all these offers working together in Latin America. Our second
Speaker 13: focus is India and we have also Swiggy that is
Speaker 13: a food deliver business in Ninjia. On top of that, payments,
Speaker 13: pay you and Mashe and Urban Company other companies in India.
Speaker 13: So you're doing the same ecosistent approach in India. In
Speaker 13: our third and I'm very excited about that. Focus is Europe.
Speaker 13: I think Europe needs big tech in Europe. Now, we
Speaker 13: just bought just each Takeaway. As I told you, next
Speaker 13: least time, we have eighteen billion dollars to invest. We
Speaker 13: want to invest a lot in Europe and on top
Speaker 13: of Just Takeaway as soon as our deal is approved,
Speaker 13: so we are waiting for Europe to approve that. We
Speaker 13: are going to be able to invest ten times more
Speaker 13: in AI in Europe.
Speaker 6: That's my big goal.
Speaker 3: So, Fabrizia, you took us around the world there on
Speaker 3: a jet plane. But with the just Eat deal, there's
Speaker 3: a shareholder complaint, right They basically think twenty euros and
Speaker 3: thirty cents is less than half what you should be paying.
Speaker 5: What's the latest on that? Do you see it changing?
Speaker 13: I we have very confident this is a very good
Speaker 13: offer for both sides. We are paying around fifty percent
Speaker 13: a little more fifty five or sixty percent premium in
Speaker 13: the in their previous price, so we have very confident
Speaker 13: this is a great offer. We got very good reception
Speaker 13: for most of the shareholders. Our expectations to close. We
Speaker 13: have a strong expectation to close at the offer, and
Speaker 13: we seek it's an amazing offer to the shareholders.
Speaker 3: What are the regions next? Which country are going to
Speaker 3: surprise us with with your next deal? We just have
Speaker 3: ten seconds.
Speaker 13: Late in America, Inja, in Europe, the biggest tech company
Speaker 13: outside US and China. Let me surprise you get into
Speaker 13: two hundred billion dollars very fast and come here to
Speaker 13: talk to about our next steps.
Speaker 5: Fabt Blue CCO process great. Great to have you back
Speaker 5: on the show.
Speaker 2: We welcome to our radio and TV audiences worldwide. Now
Speaker 2: Airbnb out with a redesigned app that puts a great
Speaker 2: emphasis on services, on one of our kind experiences.
Speaker 4: But this is us.
Speaker 2: Of course, anxiety remains about consumer sentiment, about our desire
Speaker 2: to travel abroad. Right now, let's get through all of
Speaker 2: that with Airbnb's plans. We're John by CEO Brian Chesky,
Speaker 2: Brian welcome and AIRBMB more than a home. You want
Speaker 2: to be sort of an Airbnb for the world and
Speaker 2: for services. Tell us the revenue drivers here. Why is
Speaker 2: more experiences, more services going to lead to a bigger
Speaker 2: business and investable opportunity.
Speaker 14: Well, I mean as big as the VERBMB is, and
Speaker 14: we do around ninety billion dollars a year in bookings.
Speaker 14: There's so much greater opportunity for people to monetize the
Speaker 14: biggest asset in their life.
Speaker 6: And it's not their home, it's their time.
Speaker 14: And so what if all the people's skills, all the
Speaker 14: people's passion, their expertise could be monetized. A huge percent
Speaker 14: of the jobs in the United States around the world are
Speaker 14: becoming essentially services jobs. And there is no Amazon for services.
Speaker 14: You know, people say Amazon's the everything store. It's kind
Speaker 14: of the everything in a cardboard box store. But there's
Speaker 14: this whole other world. It requires trusts, it requires two
Speaker 14: people to have an exchange between one another. I think
Speaker 14: that's where Airbingby's core competency is. What we built is
Speaker 14: an extensible platform that's not limited to homes.
Speaker 2: What's interesting is the chefs, the massages, the other key
Speaker 2: at services that you're offering do have to be vetted?
Speaker 4: Yes, that's when you get the scale.
Speaker 2: How are you going to scale that If you're doing
Speaker 2: this on a person to person basis, how much does
Speaker 2: mL then take over?
Speaker 6: Yeah?
Speaker 14: I mean, I mean a lot of what we do,
Speaker 14: and I think a lot of what everyone in technology
Speaker 14: does is you start things by hand, You learn the rules,
Speaker 14: and you train the technology, and the technology takes over
Speaker 14: either does it or it augments the people.
Speaker 6: And that's exactly what it was like here.
Speaker 14: We start very much by hand, and then we build
Speaker 14: tools to automate the task that people are doing.
Speaker 3: Brian, I started using Airbnb in the UK around twenty
Speaker 3: ten eleven when I went to college, right, and that was.
Speaker 5: Before Uber even launched in the UK.
Speaker 3: And when I think about the development of platforms and
Speaker 3: app technologies like yours, the one point of difference than
Speaker 3: Airbnb has versus an Uber is that you don't yet
Speaker 3: have advertising, whereas you look at Uber's ad growth now
Speaker 3: for them.
Speaker 5: On the investor side, it's a really big thing. How
Speaker 5: do you think about that?
Speaker 6: I think it's a huge opportunity.
Speaker 14: You know, one of the frameworks I really like around
Speaker 14: how to invest is you want to invest in the
Speaker 14: most perishable opportunit unities first, and so we think a
Speaker 14: really perishial opportunity is you know, launching services and experiences.
Speaker 14: The timing is right. We think advertising is a huge
Speaker 14: opportunity for us. It's an inevitable opportunity for us, but
Speaker 14: we don't think it's the most parishal opportunity, so it
Speaker 14: hasn't been something we've prioritized in our near term roadmap.
Speaker 14: I also think it's really good to first extend our
Speaker 14: platform from homes to services, experiences in beyond, so when
Speaker 14: we build things, we can build them as a horizontal
Speaker 14: platform inevitable.
Speaker 5: That's that's really interesting.
Speaker 3: You've got a lot of credit this week for the
Speaker 3: relaunch of the app and its ability to give you
Speaker 3: some long term growth. I'd just be grateful to hear
Speaker 3: how you think it will drive long term growth. I
Speaker 3: think from the streets perspective that's more about revenue growth
Speaker 3: and profit, but maybe scale of the platform as well.
Speaker 6: I think there's three things.
Speaker 14: Number One, there's a whole bunch of people who don't
Speaker 14: book airbnbs because they don't come with services.
Speaker 6: They go to hotels.
Speaker 14: So what if you get after all the hotel services
Speaker 14: of a hotel and more in airbnb. So that's one
Speaker 14: way we actually could grow is to get a lot
Speaker 14: more customers. The second way we can grow is a
Speaker 14: lot of people use Airbnb, but the only book one
Speaker 14: thing on the reservation home, so we can essentially get
Speaker 14: a greater share of wall on the trip. The third
Speaker 14: and the longest term opportunity is local demand. We think
Speaker 14: a lot of these services and experiences that were initially
Speaker 14: building out for travel consumers are eventually going to be
Speaker 14: things that are going to want a book in your
Speaker 14: own city, and that is an even significantly greater market.
Speaker 6: So there's really these three types of horizons.
Speaker 2: Coast playing with Megandee Stallion, learning volleyball within Olympian in Rio.
Speaker 4: How did you get these one off experiences? I mean,
Speaker 4: is this making some phone calls?
Speaker 6: Yeah?
Speaker 14: I mean like, well, a year ago we launched icons.
Speaker 14: We're shared these extraordinary experiences hosted by the biggest names
Speaker 14: in culture. We had, you know, we have made the
Speaker 14: uphouse float in the sky, and we did all these
Speaker 14: really cool experiences, and then we started thinking to ourselves,
Speaker 14: how do we bring that magic to experiences?
Speaker 6: And we built this.
Speaker 14: Network of really interesting celebrities and global icons. And one
Speaker 14: of the that we found is they a lot of
Speaker 14: them heard about what we're doing. They reached out to us.
Speaker 14: I think a lot of these global celebrities want to
Speaker 14: connect direct with their fans. They don't just want to
Speaker 14: have a parasocial relationship on social media. And I think
Speaker 14: the more we talk about AI, the more we start
Speaker 14: to realize that we are accelerating our life living in
Speaker 14: a digital realm. We're spending more and more time on devices,
Speaker 14: and we want to be the kind of company they're
Speaker 14: getting people off devices into the real world just as
Speaker 14: a balance, and I think that could be a very
Speaker 14: exciting proposition for the future.
Speaker 2: As you can imagine, this show's been talking about AI
Speaker 2: relentlessly for the last three years, but we took a
Speaker 2: pause started talking about taris and the economy relentlessly. You said,
Speaker 2: now is the perfect moment to be launching these services
Speaker 2: and experiences. Why in this environment where you saw consumer
Speaker 2: sentiment today is woefully low.
Speaker 14: I mean, well number one were reported really really good
Speaker 14: growth within travel, So I think people are still traveling,
Speaker 14: and I think when the consumer sentiment is and steady,
Speaker 14: they still want to travel, but they often want to
Speaker 14: find more affordable options.
Speaker 6: Airbeanbe's a great way to do.
Speaker 14: But beyond that, like this is a very long term
Speaker 14: bet that we're making over the next five years, and
Speaker 14: I think this will endure across any kind of economy.
Speaker 6: It's just good to remind people.
Speaker 14: Everybody started during the great recession of two thousand and eight,
Speaker 14: and so I think a lot of the great businesses
Speaker 14: are starting during you know, kind of a weekend economy.
Speaker 3: Brian, you're pivoting to founder mode, right, Yeah, how's that
Speaker 3: going to help Airbnb navigate the world that it's in
Speaker 3: right now?
Speaker 14: I think founder mode basically just means like running a
Speaker 14: large company with the hands on approach, where you're in
Speaker 14: the details, your leaders in the details, and everyone's rowing
Speaker 14: in the same direction like a startup. I think those
Speaker 14: principles are more important now than ever with this new
Speaker 14: technological revolution that's in front of us. You need people
Speaker 14: that are able to basically have their hands on the
Speaker 14: steering wheel and not be you know, in essentially like
Speaker 14: a self driving car, which is you know how more
Speaker 14: professional managers typically run things. So I think this is
Speaker 14: the perfect time to lean into the future, to put
Speaker 14: the pedal of the metal, put your hand on the
Speaker 14: steering wheel, and really drive transformation. And I think a
Speaker 14: lot of the great companies in history have been led
Speaker 14: that way.
Speaker 3: With that in mind, Airbnb, the technology company, what's its
Speaker 3: call competency.
Speaker 6: What are your.
Speaker 3: People really good at that other companies are not.
Speaker 14: I think a few things all probably a few, but
Speaker 14: I'll highlight just two on the right now. The first
Speaker 14: is our application. I think we have one of the
Speaker 14: most beautifully well designed and build apps in the world.
Speaker 14: We're able to show it is incredibly intuitive. I know
Speaker 14: we I believe we were one of the best design
Speaker 14: teams in the world. So we have really great applications,
Speaker 14: and so take AI. There's a lot of development on
Speaker 14: the application, the on the large language model layer, but
Speaker 14: the applications haven't seen a lot of development. If you
Speaker 14: pick up your phone, almost every app looks exactly like
Speaker 14: it did before Generator of AI came on the scene.
Speaker 6: So that's the first thing.
Speaker 14: The second is probably even more important the offline world.
Speaker 6: We're really good at building apps, but I think we're even.
Speaker 14: Better at designing this system of trust between two strangers
Speaker 14: to live together. I mean, nearly four million people a
Speaker 14: day live together in Airbnb and nearly every country in
Speaker 14: the world.
Speaker 6: Think about all the ways.
Speaker 14: You need to keep people safe, handle their issues, match
Speaker 14: supply and demand, facilitate money, you know, make sure they're
Speaker 14: having great experiences. There's so much more the offline world
Speaker 14: the Airbnb. When people seebnb, they see an app, and
Speaker 14: the app is just to scratch the service of our community.
Speaker 4: I love that you're talking online and offline.
Speaker 2: Briefly when you're thinking about Karna, having to decide that
Speaker 2: actually all the AI focus has to be unwound a
Speaker 2: little bit. Customer service is not working as they want
Speaker 2: to bring people back. You're bringing AI to customer service.
Speaker 2: How's that going? And how much do you have to
Speaker 2: rely on people's stuff?
Speaker 14: We still have to rely a lot on people. I
Speaker 14: think it's going incredibly well. We launched a customer service
Speaker 14: agent in the United States to all English speaking users,
Speaker 14: where now if you need help, you can reach out
Speaker 14: to an AI customer service agent.
Speaker 6: It's a front line.
Speaker 14: It's been trained on, you know, hundreds of millions of
Speaker 14: customer trips to be able to be twenty four to
Speaker 14: seven and be an escalation point to humans.
Speaker 6: Or be able to answer the question themselves.
Speaker 14: But I think the key lesson here is you don't
Speaker 14: want to rush into a trend. I think that people
Speaker 14: got really really excited AI be invitably thought it's the future.
Speaker 14: It's going to do all these tasks in the future.
Speaker 14: All that's true, but you can't skip steps and people
Speaker 14: want things to work, and so, you know, we didn't
Speaker 14: want it to be an AI lab. We wanted to
Speaker 14: be something people could trust, and so we've been very,
Speaker 14: very careful about focusing on solving real problems responsibly with
Speaker 14: a model that doesn't hallucinate.
Speaker 6: And I think that's what we're.
Speaker 3: Doing at BNBC, you know, and cal co founder Brian Chess,
Speaker 3: it's great to have you back on Bloomberg Technology.
Speaker 5: Thank you, Thank you very much.
Speaker 2: A new weekly podcast from Bloomberg launch just today, covering
Speaker 2: business stories that are relevant to absolutely everybody and as
Speaker 2: that retitled Everyone's Business. The hosts Bloomberg's Max Chafkin Stacey
Speaker 2: Venexsmith join us.
Speaker 4: Now, Max, what's the USP here?
Speaker 2: How are you going to set yourself differently from all
Speaker 2: the other business conversations.
Speaker 15: Well, you know, there's so much going on in the
Speaker 15: economy right now. You know, you tear offf news changing
Speaker 15: every day obviously AI.
Speaker 5: We heard that in the last conversation.
Speaker 15: And all this stuff affects, you know, the markets, it
Speaker 15: affects businesses and the decisions they make, but also affects
Speaker 15: like the real decisions that regular people make, and that's
Speaker 15: the connection we're trying to make. We're trying to bring
Speaker 15: some sort of smart analysis and basically help people figure
Speaker 15: out what to do with their money, figure out what
Speaker 15: decisions to make, and figure out how to make sense
Speaker 15: of the world.
Speaker 3: Stacey, as a journalist covering technology, sometimes the written words
Speaker 3: not alough, and that is no more true than when
Speaker 3: I'm confronted with the transatlantic issue of the banana pudding.
Speaker 3: Please explain the detail to audience how this podcast will
Speaker 3: crack that well.
Speaker 16: Crack might be the key word there. Obviously, inflation has
Speaker 16: been a huge issue of all over the world, in
Speaker 16: the US and of course in the UK as well.
Speaker 16: But eggs, of course are a big concern here in
Speaker 16: the US, the price of eggs, they were down a
Speaker 16: little bit. We got some pretty good inflation news this week.
Speaker 16: But I think a lot goes into a banana pudding.
Speaker 16: In fact, there's labor, there's overhead. If you're a business
Speaker 16: making banana pudding, you are dealing with all of the
Speaker 16: economic forces that are affecting us all every day. And
Speaker 16: so I think that's the kind of thing we're going
Speaker 16: to be looking into through the lens of banana pudding.
Speaker 16: I think you can see the whole economy. I would
Speaker 16: argue a lens.
Speaker 2: A beautiful, delicious lens into the old economy. I mean,
Speaker 2: let's talk sports. Look, New York is on tend to
Speaker 2: Hoox for kating tonight. We're all worried about NJ transport,
Speaker 2: but I'm interested more broadly, Max and like how the
Speaker 2: business of sports is going to fold into this, how
Speaker 2: this becomes entertainment At the same.
Speaker 15: Time, Yes, we had a great conversation for the episode
Speaker 15: that hit today, which you can get anywhere you get
Speaker 15: your podcasts, with Randall Williams, who's a Bloomberg Sports reporter
Speaker 15: BusinessWeek contributor.
Speaker 5: It it's all about.
Speaker 15: The rising valuations of teams and how that's changing how
Speaker 15: teams operate. You know, we're getting a new breed of
Speaker 15: sports owners. The sort of prototypical sports owner who would
Speaker 15: sort of a rich guy who's into the team is
Speaker 15: being replaced by these institutional investors, private equity guys, which,
Speaker 15: of course I think it's exciting if you own a
Speaker 15: sports team and you want to you know, make more money,
Speaker 15: but it's also you know, from the fans point of view,
Speaker 15: it could be kind of troubling because obviously private equity
Speaker 15: has a somewhat checker of reputation when it comes to
Speaker 15: coming into businesses.
Speaker 3: Bloomberg's Max Chefkin and Stacy Vennick Smith their new podcast,
Speaker 3: Everybody's Business is out today.
Speaker 5: Check it out, Caroline.
Speaker 3: That does it for this edition of the television show
Speaker 3: Bloomberg Technology.
Speaker 2: We also have a podcast, so keep your pictures coming
Speaker 2: for the podcast on the TV show. You can find
Speaker 2: out on the terminal as well as online on Apple, Spotify,
Speaker 2: and iHeart and go back over some of our CEO
Speaker 2: conversations today because they're global, they're important, and they discuss
Speaker 2: things like the impact of inflation and I still are
Speaker 2: desire to go traveling and indeed to get our food
Speaker 2: delivered from New York from San Francisco.
Speaker 4: There's that technology