Speaker 1: Bloomberg Audio Studios, podcasts, radio news, from.
Speaker 2: The heart where innovations, money and power, Collie in Silicon
Speaker 2: Valley and beyond.
Speaker 3: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 4: I'm Caroline Heidet Bloomberg's World headquarters in New York, and
Speaker 4: I met.
Speaker 5: Lover in San Francisco. Happy Friday. This is Bloomberg Technology Long.
Speaker 6: Week coming up.
Speaker 4: We'll discuss the regulatory overhang for Apple, I mean the
Speaker 4: Justice Department's sweeping lawsuit against the iPhone maker.
Speaker 6: Full analysis ahead, Plus we'll.
Speaker 5: Get to read on the IPO ecosystem after a Steri
Speaker 5: Labs and Reddit went public this week with strong debuts.
Speaker 6: And talking of the big week.
Speaker 4: Bitcoin actually set for one of his worst weeks of
Speaker 4: the year, as ETF demand that slows.
Speaker 6: We'll discuss that and so much more throughout this hour.
Speaker 5: Of Apple doj antitrust lawsuit against them and on Thursday
Speaker 5: session it had a real material impact on the stock.
Speaker 5: You can see actually we're sort of recovering up four
Speaker 5: ten to percent in the session, but I still think
Speaker 5: it was notable that finally there was a headline about
Speaker 5: antitrust relating to Apple, and there was a clear stock
Speaker 5: reaction in that session Thursday. What happens next is the
Speaker 5: big question from all. Let's bring in Bloomberg's Mark German,
Speaker 5: chief correspondent covering Apple. What's changed in the last twenty
Speaker 5: four hours since we last spoke. Do we have any
Speaker 5: signals from how Apple's going to respond to this suit?
Speaker 3: Yeah? I think reading through the lawsuit reveals a lot.
Speaker 3: It reveals that the Department of Justice had been working
Speaker 3: on the case for so long that I would say
Speaker 3: about sixty to seventy percent of their major points are
Speaker 3: things that have already been resolved. Apple doesn't believe, of course,
Speaker 3: they would say this that the case holds much water.
Speaker 3: They don't believe that they're a monopoly. They seem to
Speaker 3: find it perplexing that the government is trying to position
Speaker 3: them a monopoly, whereas they believe they only have about
Speaker 3: twenty percent global smartphone market share. I think that Apple
Speaker 3: is prepared for a fight here. I doubt they're going
Speaker 3: to settle. They've settled in some cases, but I don't
Speaker 3: think that Tim Cook has shown a willingness to settle.
Speaker 3: I think Apple believes and based on my read of
Speaker 3: the lawsuit, I'm not seeing much harm towards consumers. I'm
Speaker 3: seeing a lot of harm towards developers. I'm seeing harm
Speaker 3: towards partners and some rivals. But again, here are their
Speaker 3: top five issues the Department of Justice. A lack of
Speaker 3: cloud gaming support, allowed of message interoperability, a lack of
Speaker 3: super apps, which are things like we Chat, a lack
Speaker 3: of support for third party smart watches to the same
Speaker 3: degree as the Apple Watch, and a lack of support
Speaker 3: for Apple Pay the NFC chip on third party applications.
Speaker 3: I think of those five items, at least three, I
Speaker 3: would say even three and a half of those items
Speaker 3: have already been resolved. I expect the messages situation and
Speaker 3: the NFC situations to be resolved as well. But taking
Speaker 3: a step back here, you know, despite that, I don't
Speaker 3: think the DJ is making great arguments given the resolutions
Speaker 3: already in place. You have to be honest here. A
Speaker 3: lot of these resolutions are in place because Apple has
Speaker 3: been afraid of this impending DOJ lawsuit for several years,
Speaker 3: and they knew these were where they would be attacked,
Speaker 3: and so they knew they had to fix them. It
Speaker 3: just for some reason, Apple implementing the fixes didn't stop
Speaker 3: the DOJ from moving forward anyways, This is.
Speaker 6: A global company.
Speaker 4: Tim Cook in China at the moment seemingly all smiles
Speaker 4: and some conversations happening with Baydoo around potential generative AI.
Speaker 4: Of course, as many would say, as expected, that was
Speaker 4: all street journal reporting, Mark. But what seems to be
Speaker 4: at stake here is a philosophical difference. Philosophy driving Apple
Speaker 4: and the way in which wants its own ecosystem to work,
Speaker 4: and a.
Speaker 6: Philosophy that seems to be changing.
Speaker 4: Tach among regulators in the US and Europe is still
Speaker 4: looking at Apple as a whole, not just individual places that
Speaker 4: they act monopolistically.
Speaker 3: Yeah, a few things. Well, of course Tim Cook is
Speaker 3: going to be all smiles in China. He really has
Speaker 3: no other option. China is a very important market and
Speaker 3: Tim Cook is a poker player. He's not going to
Speaker 3: show his true feelings about this DOJ lawsuit, certainly not
Speaker 3: in front of the press and in a public setting
Speaker 3: as China is. You know, Apple stock took a big
Speaker 3: hit yesterday. I could think of ten better reasons for
Speaker 3: you to sell your Apple stock than what's in this
Speaker 3: DOJ lawsuit. Apple will certainly have to implement changes. I
Speaker 3: would imagine that what you've saw in the European Union
Speaker 3: regarding the digital market, sac changes, appside loading, opening up
Speaker 3: the NFC chip, You're going to see a lot of
Speaker 3: those changes over the next years occur in the US.
Speaker 3: But I don't think that's going to do much to
Speaker 3: change the fundamental situation with Apple. They're making a lot
Speaker 3: of money from the app store. They need to figure
Speaker 3: out a way to bring a next big hardware category
Speaker 3: to market. Everyone thought that was the car. That's probably
Speaker 3: what could have added fifty to one hundred billion or
Speaker 3: more to Apple's bottom line on an annual basis. That's
Speaker 3: what I could have doubled Apple's market cap to several
Speaker 3: more trillion over time. That's no longer happening, and so
Speaker 3: now I think the biggest issue for Apple is not regulation.
Speaker 3: It's not how the app store is going to be impacted.
Speaker 3: It's how Apple is going to continue to grow its
Speaker 3: hardware business. And don't forget, seventy five percent of Apple
Speaker 3: revenue is still hardware. Fundamentally, they are a hardware company,
Speaker 3: and so they really need to figure out how they
Speaker 3: expand there. But still AI, that's another important component, and
Speaker 3: they need to figure out that situation too.
Speaker 4: Need the next catalyst, Mark German, We thank you for
Speaker 4: really breaking that all down, and we.
Speaker 6: Want to just delve into the overhand from.
Speaker 4: A regulatory perspect to go a little bit more and
Speaker 4: the nuances around it.
Speaker 6: William Cover chitches with.
Speaker 4: Us George Washington Law School, Global Competition Professor of Law
Speaker 4: and Policy work at the CMO of and UK at
Speaker 4: one point, and William to that, and we all know
Speaker 4: that these sorts of legal wranglings are distraction. How much
Speaker 4: impact do you think you will have on a business model.
Speaker 7: I think the distraction comes from the number of people
Speaker 7: inside the company you have to commit to support the litigation.
Speaker 7: We don't know what that number is, but the experience
Speaker 7: in other major cases is that this can be a
Speaker 7: significant drag on the company. You have also the inhibition
Speaker 7: that comes from the pending lawsuits. Companies don't want to
Speaker 7: provide additional ammunition for prosecutors. It means that they're not
Speaker 7: quite as agile, not quite as adroit in developing business programs.
Speaker 7: I realize these are somewhat intangible consequences, but then cumulatively,
Speaker 7: when you take all of the developments we've just been
Speaker 7: talking about, in the United States and abroad. It's an
Speaker 7: avalanche of regulatory oversight that has to sap to some
Speaker 7: extent the creative energy of the company.
Speaker 5: Mister Kovachich, we sometimes talk about in this program regulating
Speaker 5: through the courts, you know, a legal action to get
Speaker 5: a result, that's the bigger picture. Is there an avenue
Speaker 5: where Apple and the DOJ can just work this out
Speaker 5: outside of court?
Speaker 7: I would think there's always the possibility of reaching a solution.
Speaker 7: The solution, though, is going to have to be one
Speaker 7: that persuades the just This Department that the overall aim
Speaker 7: of any specific settlement is not subject to evasion by
Speaker 7: additional adjustments in.
Speaker 3: The business model.
Speaker 7: They'll have to be confident that the solution is one
Speaker 7: that they can monitor and oversee effectively. I think that
Speaker 7: there would be a willingness to discuss settlements. But a
Speaker 7: major message that has come from the age agencies in
Speaker 7: the US in recent years is a great deal of
Speaker 7: skepticism about the efficacy of many settlement arrangements and doubts
Speaker 7: about how readily you can implement them and be effective.
Speaker 5: In your reading of the suit itself, do you think
Speaker 5: the JAY.
Speaker 8: Has a point here?
Speaker 7: They do have a point, and the point is one
Speaker 7: that in a sense involves again a collection of intangible considerations.
Speaker 7: But there's anxiety about the possibility that incumbent firms that
Speaker 7: have a significant market position, will, through a variety of tactics,
Speaker 7: diminish the emergence of alternative technologies and.
Speaker 3: New business models.
Speaker 7: That concern might be very much the feeling that anti
Speaker 7: trust law failed in the last thirty years to deal
Speaker 7: effectively with the emergence of new tech. And I believe
Speaker 7: a state of mind and perspective that has a tight
Speaker 7: grip on the agencies is that they're not going to
Speaker 7: allow the permissiveness of the past to continue. And it
Speaker 7: means that they're going to dig in and look carefully
Speaker 7: at anything that appears to be an effort by an
Speaker 7: incumbent to see that new technologies, new business approaches do
Speaker 7: not emerge.
Speaker 6: This is dj action.
Speaker 4: We've seen FTC have a similar focus. But sometimes this
Speaker 4: is political. In an election year, does this sort of continue.
Speaker 7: I'm going to give you a bit of speculation that
Speaker 7: I could never prove in a rigorous way, but I
Speaker 7: noticed that President Biden's opponent in many instances has been
Speaker 7: skeptical of tech. Now that skepticism has been focused in
Speaker 7: particular on the information services platforms that are involved in
Speaker 7: involved in advertising, involved in social messaging.
Speaker 3: But it was Donald Trump's Justice.
Speaker 7: Department that initiated the Google search monopolization case. It was
Speaker 7: Donald Trump's Federal Trade Commission that began the lawsuit against
Speaker 7: Meta for its acquisition of Instagram. It could entirely be
Speaker 7: possible that, at least for tech, given the way their
Speaker 7: political contributions go, given his concern about the role they've
Speaker 7: played in his own electoral process in the past, that
Speaker 7: he may look at the FTC in the Department of
Speaker 7: Justice and say, keep up the good work.
Speaker 4: It was a Trump as well when this was first
Speaker 4: initiated to Apple back in twenty nineteen, William cover Chich,
Speaker 4: we thank you so much.
Speaker 6: George Washington Law School, absolutely brilliant to get his take.
Speaker 4: Mean while coming up, Look, we're going to be chatting
Speaker 4: to a head moderator of Reddit forum all street bets.
Speaker 4: You know you know it, well, I's going to be
Speaker 4: joining us find out how reddits ipo, how much the
Speaker 4: effect to the user base there's in Bloomberg Technology.
Speaker 5: The fourth largest IPO of the year, Reddit climbed forty
Speaker 5: eight percent on its first day of trading yesterday, after
Speaker 5: pricing at the top of its marketed range, raising seven
Speaker 5: hundred and forty eight million dollars. Let's bring in Bloombo's
Speaker 5: Katie Ruth, who has lived and breathed reddits ipo this week.
Speaker 5: That's true. I mean for many people, I would say
Speaker 5: this went well.
Speaker 8: This ipo.
Speaker 6: So it did the first day.
Speaker 9: Right now it's trading down, although yes, technically it's still
Speaker 9: above well above the IPO price, it's not really much
Speaker 9: above where it opened yesterday. And so I think there's
Speaker 9: two numbers to watch here. It's the thirty four dollars
Speaker 9: where priced at the top of the range, and that's
Speaker 9: where the insiders, you could say, the institutional investors that
Speaker 9: have banker connections, that's where they bought. And then some
Speaker 9: some of Reddit's top users were able to buy at
Speaker 9: that price. And then there's everybody else which bought it
Speaker 9: that forty seven dollars a share where it opened yesterday,
Speaker 9: and right now it's trading at.
Speaker 8: Forty seven ish.
Speaker 9: So and it was actually dipped below that opening price
Speaker 9: this morning for a little bit, so some people could
Speaker 9: have already lost some money on Reddit. But you know,
Speaker 9: most are making money.
Speaker 4: And certainly long term investors have cashed in here potentially, Katie,
Speaker 4: I'm interested as to what this means for ongoing IPOs,
Speaker 4: what this means more broadly, for money left on the table.
Speaker 6: We want IPOs to do well.
Speaker 4: Bankers certainly do, but the people raising the money don't
Speaker 4: want them to go too well and feel that they
Speaker 4: could have rais Yeah, the money left on.
Speaker 9: The table argument is an interesting one. It sounds like
Speaker 9: what you're referencing is where they could have raised even
Speaker 9: more money and had less of a pop. I think
Speaker 9: it's too early to tell whether Reddit allowed for too
Speaker 9: much of a pop. You know, as I noted, it's
Speaker 9: already trading lower today, and you know, we'll see what
Speaker 9: happens next week. But you know, it depends on what
Speaker 9: they're optimizing for. If they if they're just optimizing for
Speaker 9: raising a little bit more cash, then you want to
Speaker 9: price it high. But you don't want to make a
Speaker 9: bad first impression on the stock market because it could
Speaker 9: be really hard to recover from that. And so that's
Speaker 9: you know, the argument that the bankers will make about
Speaker 9: why they price it to pop. They also want these insiders,
Speaker 9: these large anchor investors to keep buying more shares you know,
Speaker 9: in this IPO and ips to come, and they're not
Speaker 9: going to do that. They're not going to take that
Speaker 9: risk on a new listing on the first day unless
Speaker 9: they feel like they're getting some sort of discount.
Speaker 4: Katie with go get some thank you so much as
Speaker 4: we brace for more IPOs to come in the next
Speaker 4: few weeks, I'm sure, but well, we want to get
Speaker 4: a take.
Speaker 6: On how the users, those redditors are.
Speaker 4: Feeling about the company's IPO. They had a chance to
Speaker 4: buy in, and of course we know the a vocal bunch.
Speaker 4: Nor ours with us as a senior analyst and private
Speaker 4: equity back to healthcare company. There's also been a Reddit
Speaker 4: user for more than ten years, a moderator for the.
Speaker 6: Forum Wall Street Bets for.
Speaker 4: Nine, spending the most recent three years as a head moderator.
Speaker 4: He joins us now to tell us more well basically
Speaker 4: about Reddit's debut. How has Wall Street bets, How has
Speaker 4: your community reacted?
Speaker 6: Have you been positive on it?
Speaker 3: It's really been a mixed bag.
Speaker 10: There's a ton of positivity but also a lot of
Speaker 10: people excited to short byputs. But Paul and all, they're
Speaker 10: just excited for the volatility, and that's absolutely what we're
Speaker 10: seeing here today.
Speaker 5: Nor last week on the show, we reported on the
Speaker 5: post that Reddit made itself saying we're going to do
Speaker 5: an AMA and we will answer the questions in video format,
Speaker 5: selecting the most up to posts. At the time that
Speaker 5: we reported it on this program, the most upvoted post
Speaker 5: is why are you even going public? It's not a
Speaker 5: great vibe right now. Just give me your reaction to that.
Speaker 5: I mean, it's the function of Reddit ironically pushing the
Speaker 5: management to think again.
Speaker 10: Absolutely, yeah, I think this is actually a great time
Speaker 10: for Reddit to IPOs I'm surprised. Certainly there was a
Speaker 10: lot of turmoil over the past year, but if you
Speaker 10: look at what came out of that from a business perspective,
Speaker 10: it's actually been very positive. We saw with the Reddit
Speaker 10: protests that actually people found Reddit completely indispensable. There was
Speaker 10: so much opportunity for a competitor to take reddits place,
Speaker 10: and nothing came out of it. So this just goes
Speaker 10: to show how deeply ingrained Reddit is in the zeitgeist
Speaker 10: and that it's here to stay.
Speaker 5: Nor there are many redditors and indeed moderators that have
Speaker 5: big concerns on reddits plan to license user and platform
Speaker 5: data to AI companies to use it to train la lens.
Speaker 5: What's your position on it from.
Speaker 10: A business perspective, It's definitely a risk. We're seeing that
Speaker 10: the FTC is also looking into this, but it is
Speaker 10: a huge opportunity and Reddit owns something that is very
Speaker 10: special for lllms, and that is real time user reactions
Speaker 10: to what's going on in the world around us, and
Speaker 10: that's something that I think no other platform has. So
Speaker 10: it's a great opportunity for Reddit to make money off
Speaker 10: of that and then turn around and invest that money
Speaker 10: in improving the user experience.
Speaker 4: No, I want to ask about the evolution of moderation,
Speaker 4: because money would say in anticipation in the IPO, reditor
Speaker 4: really read it, really got ahead of ensuring that this
Speaker 4: became a safer space to.
Speaker 6: Be able to comment. Does that stand?
Speaker 4: How has anything been lost in the focus of needing
Speaker 4: to clean up the platform.
Speaker 10: We've definitely lost a little bit of the chaos and
Speaker 10: grit that you would have seen on Reddit ten fifteen
Speaker 10: years ago. And although that lose some of its charm,
Speaker 10: I think it's more reflective of the state of the
Speaker 10: Internet rather than Reddit as a platform itself. We're seeing
Speaker 10: all platforms, social media platforms censor in response to government
Speaker 10: regulations and laws that have been placed on hate speech
Speaker 10: and other types of speech.
Speaker 3: So Reddit is actually maintaining.
Speaker 10: Its position as the front page of the Internet and
Speaker 10: simply reflecting what is on the Internet through these policy changes.
Speaker 4: Wall streetbats was what we talked about day in, day
Speaker 4: out in twenty twenty one through twenty twenty two name
Speaker 4: being made around GameStop, the power that reditors had in
Speaker 4: that moment. What do you think the powers of redditors
Speaker 4: around the Reddit stock itself.
Speaker 10: It'll be interesting to see It'll be interesting to see
Speaker 10: you when redditors feel empowered that the actions they take
Speaker 10: on the platform can make a meaningful impact on the
Speaker 10: stock price of Reddit itself. Like with the game Stop debacle,
Speaker 10: we saw over a billion page views in a very
Speaker 10: very short period of time in a month, and we
Speaker 10: saw that continue for several months. So to think that
Speaker 10: redditors now who are might be investors themselves, can have
Speaker 10: a positive impact on the stock will simply deepen their
Speaker 10: relationship with the company and with the platform.
Speaker 5: No, we just have thirty seconds for someone that has
Speaker 5: no idea what Reddit is what's your pitch for them
Speaker 5: to get onto the platform.
Speaker 10: Reddit is a city that is incredibly deep, with countless
Speaker 10: communities to fill every need that you knew or didn't
Speaker 10: know that you are interested in learning more about. If
Speaker 10: you've got an intellectual curiosity that can't be satisfied, Reddit
Speaker 10: is the place for you.
Speaker 5: Head moderator for and Wall Street bets on Reddit, and
Speaker 5: I point out that moderators are volunteers to all intents
Speaker 5: and purposes and are how great to have you on
Speaker 5: the program.
Speaker 4: Time Now tech first Up mayto one's quarterly revenue, it
Speaker 4: climbed better than expected twenty three percent. Now that's a
Speaker 4: sign that the company is actually making some headway in
Speaker 4: its efforts to fend off a challenge from Byte Dances
Speaker 4: Doyen in China's meal delivery arena. Now shares in the
Speaker 4: company are up this year after losing more than half
Speaker 4: of their value in twenty twenty three. Plus Wawei and
Speaker 4: a secretive chip making partner in China, Well, they file
Speaker 4: patterns for a lower tech but potentially effective way to
Speaker 4: make advanced semiconductors.
Speaker 6: And we're talking about self aligned quadruple patterning here or SAQP.
Speaker 4: Basically, it's raising the prospect that China could improve chip
Speaker 4: production techniques despite.
Speaker 6: US efforts to hold its progress.
Speaker 4: And lastly, Tesla, we'll go chick with steck with China
Speaker 4: here because it's reduced production at its plants over there
Speaker 4: amid us some sluggish growth and EV sales and intense
Speaker 4: competition in the.
Speaker 6: World's biggest all code auto market.
Speaker 4: Now the car maker has instructed employees at its Shanghai
Speaker 4: facility to lower production of the Model Y and Model three.
Speaker 4: That's two vehicles that Tesla actually makes over there in
Speaker 4: China by working just five days a week instead of
Speaker 4: usual six and a half half days.
Speaker 6: All of this, according to sources.
Speaker 5: British audience in the UK pay attention. Vodaphone and Three's
Speaker 5: UK combination is facing a deep check by the UK
Speaker 5: Competition Markets Authority, the CMA, the regulator. They issued a
Speaker 5: statement Friday saying they're concerned and they don't buy the
Speaker 5: argument from Vodafone and three that combining the two would
Speaker 5: mean better deals for customers. Vodaphones London listed shares actually
Speaker 5: at one point eight percent with a little to go,
Speaker 5: but it's an interesting story about consolidation in that market.
Speaker 8: This is Bloomberg.
Speaker 6: Welcome back to me new MEOT technology. I'm Caroline Hid
Speaker 6: in New.
Speaker 8: York and I'm Ed Ludlow in San Francisco.
Speaker 4: Let's talk about this whole new wave of IPO names.
Speaker 4: Read at Asteri Labs debuting this week and just whether
Speaker 4: or not that's going to open up the pipeline. A
Speaker 4: little bit more broadly, eyipa Practice Co had richual Garings
Speaker 4: here to take basically on the feel good factor right now.
Speaker 4: Thus far these companies have come to the market and come.
Speaker 6: Well, does that mean suddenly the.
Speaker 4: Yours the other names that we've been waiting for for
Speaker 4: a long time, I'm gonna be galvanized.
Speaker 6: Do you think it.
Speaker 1: Definitely helps the momentum for what we're expecting in the
Speaker 1: IPO market, the pipeline that.
Speaker 11: We're seeing come through. As you all, we're noting.
Speaker 1: Though, the post IPO performance of these companies that even
Speaker 1: the ones before them, will really help continue setting the
Speaker 1: stage and help influence what will continue coming to market
Speaker 1: over these next several months and throughout the remainder of
Speaker 1: twenty four We've got.
Speaker 11: You know, positive momentum.
Speaker 1: The trends are all going in the right way, but
Speaker 1: not without its challenges. We're in a political you know cycle,
Speaker 1: a political election cycle this year, so you know there's
Speaker 1: going to continue to be elements and dynamics.
Speaker 4: That everyone's going to have to navigate, dynamics being also
Speaker 4: that the market is hungered for hungry for AI names.
Speaker 4: When you're advising these companies, when that are coming to
Speaker 4: you saying I want to navigate the quidity events, I
Speaker 4: want to analyze the market.
Speaker 6: Do you think about.
Speaker 4: Basically where they need to be dining out on AI
Speaker 4: for example, Well.
Speaker 1: A AI is certainly something drawing a lot of focus interests,
Speaker 1: particularly from investors, and when we think about AI, I
Speaker 1: think about it in kind.
Speaker 11: Of a few different buckets. You got the pure play.
Speaker 1: AI companies, those that are developing the technology. There is
Speaker 1: a lot of continued interest in this area, particularly in.
Speaker 11: The private financing space.
Speaker 1: So these companies are generally getting funded and where we
Speaker 1: start seeing a flood of you know, ideos from them
Speaker 1: over the coming months, and ye're meeting at onesie twosies,
Speaker 1: but they're getting the financing they need, they're developing the technology.
Speaker 1: But then I also look at other companies and how
Speaker 1: they're employing AI within their companies and relative.
Speaker 11: To their strategy. We're seeing that play out.
Speaker 1: We're going to continue, not without skepticism from investors, kind
Speaker 1: of proving it to me. And you've got those kind
Speaker 1: of in the broader ecosystem that we're seeing right now
Speaker 1: and how they're contributing to the A to AI in
Speaker 1: that broader ecosystem, and we're going to continue seeing those
Speaker 1: come to market as well.
Speaker 5: Rachel, this is exactly what I was writing about in
Speaker 5: my column in Tech Daily this morning, that Reddit, for example,
Speaker 5: got its AI story right going into the IPO, you know,
Speaker 5: the data licensing business. I think what would be interesting
Speaker 5: to learn from you is what's more important that in
Speaker 5: the S one process and the road show you sell
Speaker 5: your AI story or is it more important that actually,
Speaker 5: now a company like Reddit is listed, they can prove
Speaker 5: they have an AI business, you know, after the fact
Speaker 5: that it's actually real.
Speaker 11: I think both are critical for obvious reasons.
Speaker 1: But where we're seeing, you know, even when you're putting
Speaker 1: that into your S one, going through your road shows,
Speaker 1: investors asking you know, to prove it. So it's that
Speaker 1: more it's not just about writing about the possibility and
Speaker 1: the idea.
Speaker 11: But what have you done even up to this point to.
Speaker 1: Share with investors how you're proving this out, how you
Speaker 1: truly have a strong plan that you're then now executing on.
Speaker 1: And then proof will be in the putting post IPO,
Speaker 1: how you're coming out and continuing to execute.
Speaker 11: And perform to back all of that up.
Speaker 1: And so as we continue to watch the performance of
Speaker 1: these stocks, you know, two months from now, three months
Speaker 1: from now so forth, they've got to continue demonstrating that
Speaker 1: performance and stay good on the promises and commitments they made.
Speaker 5: Rachel, how do you assess this week, this week's IPO window.
Speaker 5: I don't even know if we call it window versus
Speaker 5: what we saw in September.
Speaker 1: You know, this is to me demonstrating, you know, we've
Speaker 1: got investor interest around IPOs. The companies that are coming
Speaker 1: to market right now is what we've expected. They're stilled,
Speaker 1: they're large, they have a name, they have some history,
Speaker 1: you know, performance history behind them as well. So the
Speaker 1: risk profile is one of an appetite that's attracting investors.
Speaker 6: As they continue to.
Speaker 1: Perform, hopefully that starts to open up opportunity for more
Speaker 1: the growth oriented companies to start coming to market and
Speaker 1: really help drive some momentum and valumes over time getting
Speaker 1: inspect to those historical norms.
Speaker 11: But this is it's going to be instead a steady recovery.
Speaker 1: We're not expecting a big, you know, balloon if you will,
Speaker 1: or huge kind of spike. A steady recovery is what
Speaker 1: we've continued to expect throughout twenty twenty four.
Speaker 11: As we continue to see the market rebound.
Speaker 4: I'm chure what's the motivating factor here? Med It wanted
Speaker 4: IPO for years.
Speaker 6: Says twenty twenty one. It was about a liquidity event.
Speaker 4: For employees largely, but I'm sure time for investors to
Speaker 4: have some money back.
Speaker 6: What's driving other names?
Speaker 11: Everyone had their facts and circumstances.
Speaker 1: Some's going to be you know, they're going to be
Speaker 1: anchoring around valuations and are they getting to a valuation
Speaker 1: that they're expecting liquidity for employees, for other founders a
Speaker 1: lot of PE right, we're going to start seeing how
Speaker 1: how is PE going to start driving valuume. They've been
Speaker 1: having some companies they've been holding for quite some time.
Speaker 1: They want to start entering back into the M and
Speaker 1: A market. As we see rates coming down, hopefully we'll
Speaker 1: see more M and A activity even more from pe.
Speaker 1: I think that's going to start influencing some exit from
Speaker 1: their stage as well.
Speaker 4: We want to thank you ey IPO Practice cohad Rachel
Speaker 4: goering there on the IPO landscape where we just want
Speaker 4: to stick with well companies going public none all of
Speaker 4: them do IPOs, some of them do SPACs.
Speaker 6: And former President Donald Trump's.
Speaker 4: Media startup is likely to debut as a public company.
Speaker 6: In coming days. Having voted today on whether.
Speaker 4: Blank Check Company Digital World acquisition can proceed with taking
Speaker 4: Trump Media and Technology Group public. It runs, of course
Speaker 4: truth Social the platform, and it's been a long delayed
Speaker 4: deal and seemingly has now approved. And a number of
Speaker 4: insiders from management to sponsors and even former associates who
Speaker 4: soone to stall or block the deal stand to pocket
Speaker 4: millions of dollars and what have you got?
Speaker 5: Okay, Coming up on the program, we're going to dive
Speaker 5: into the world of climate investing AI. What on earth
Speaker 5: happened this week in IPOs, everything and anything that we've
Speaker 5: spoken about this week with Initialized Capital partner Kim Mai Cutler.
Speaker 5: Really looking forward to that conversation. Next, this has Bloom
Speaker 5: their technology. This is the Blackwell GPU or graphics processing
Speaker 5: unit in Vidia's next generation AI accelerator, and it's the
Speaker 5: star of GtC in Vidia's annual developers conference, which has
Speaker 5: been dubbed the Woodstock for AI.
Speaker 8: The B two hundred is more powerful than the H
Speaker 8: one hundred.
Speaker 5: The prior generation AI accelerator that's driven in video to
Speaker 5: be the world's third most valuable company compared to Hopper.
Speaker 5: Blackwell offers two point five times the performance for training
Speaker 5: large language models and five times performance for running the model,
Speaker 5: a process known as inference. In offer Blackwell in different forms,
Speaker 5: including is the GB two hundred super chip, two Blackwell
Speaker 5: GPUs and one Grace CPU in combination. Trays and trays
Speaker 5: of GB two hundred go into liquid called rack scale
Speaker 5: systems like this and ship to server companies and cloud
Speaker 5: providers for their data centers. It's a market that Nvidia's
Speaker 5: CEO says will start at two hundred and fifty billion
Speaker 5: dollars annually and grow from there. The technology is capable
Speaker 5: of processing AI models with one trillion parameters. GtC crowds
Speaker 5: literally circled around the single demo server rak in droves.
Speaker 8: The real thing start shipping in late twenty twenty four, so.
Speaker 5: Among everything else, GtC ended last night, Caro, and you
Speaker 5: know it was all about bow down to Blackwell.
Speaker 8: And the deity.
Speaker 5: Whether you're an AI startup founder or you are ADEL
Speaker 5: or an infrastructure company, bow down to Jensen Wang and
Speaker 5: in that might sound extreme, but trust me, they're on
Speaker 5: the ground.
Speaker 3: It was true.
Speaker 4: And share prices really read benefit as well, not so
Speaker 4: much of Nvidio, but sort of those that he anointed
Speaker 4: the synopsis of this world, you say, Dell as well,
Speaker 4: some of these companies managing to push on higher because
Speaker 4: we are starting to see how they're able to tap
Speaker 4: into this ecosystem that basically is the driving force from
Speaker 4: an infrastructure perspective of everything that we now talk from
Speaker 4: a value perspective in well public.
Speaker 6: And private markets.
Speaker 5: And as we've been saying, the show, get the AI
Speaker 5: story right, because AI was also a big part of
Speaker 5: the story. Yesterday, for Reddits public listing Day, Initialized Capitals
Speaker 5: celebrated the IPO of its portfolio company, which is banking
Speaker 5: on licensing its users data to builders of large language
Speaker 5: models to fuel reddits growth. Let's bringing Initialized Capital partner
Speaker 5: k in my cutler for more.
Speaker 8: In today's VC Spotlight.
Speaker 5: I wrote in my column today Reddit got the AI story, right,
Speaker 5: I just thought it was really interesting that they went
Speaker 5: there with that.
Speaker 8: What did you make of it?
Speaker 12: I mean, I think it's a tremendous day or the
Speaker 12: whole team there for Steve, for Alexis. You know, that
Speaker 12: company in particular has a long history and close ties
Speaker 12: obviously with Sam Altman who runs openings, and so I
Speaker 12: think that relationship over the last decade and more really
Speaker 12: benefited their ability to ride this wave and rend itself
Speaker 12: as an incredible consumer internet property. I mean, I'm a
Speaker 12: user multiple times a day every day. I mean the
Speaker 12: wealth of information that I have in all the different
Speaker 12: like subcommunities, and the way that people talk honestly and
Speaker 12: openly and freely about.
Speaker 6: What they think.
Speaker 12: You know, it's just an incredible data source and training set.
Speaker 5: So what I find so interesting, particularly in the context
Speaker 5: of where Initialized will deploy capital, right, the types of
Speaker 5: startups that you'd invest in is redd It's an example
Speaker 5: of where you don't need to be a builder of
Speaker 5: large language models or an infrastructure play to be a
Speaker 5: participant in what's happening in AI. Do you have any
Speaker 5: parallel examples of companies you think will benefit from the
Speaker 5: infrastructure investment that's happening.
Speaker 12: I think for us, you know, we've long done many,
Speaker 12: many different deals that have you know, very specific applications
Speaker 12: to different workflows and different industries. So for example, you know,
Speaker 12: you could think about the healthcare use case. We have
Speaker 12: a company called glass Health that supports medical professionals and diagnoses.
Speaker 12: We have another company called Parta that you know serves
Speaker 12: as an AI copilot for financial compliance. And so there's
Speaker 12: all these different specific industries with specific like legal requirements,
Speaker 12: workflows and ways that people work that will need you know,
Speaker 12: very very honed and refined applications of these foundational.
Speaker 6: Models and kill.
Speaker 4: It's a long way coming for some of these checks
Speaker 4: that you've made into the Glass Health that you mentioned,
Speaker 4: pano arenas, some of these other AI adjacent names that
Speaker 4: you've invested in.
Speaker 6: How are you thinking about exit strategy?
Speaker 1: Though?
Speaker 4: Longer term, what's been so interesting about this week was
Speaker 4: also the Microsoft basically acqua hire of Inflection Stuff assum
Speaker 4: when originally of DeepMind go Mean to be the head
Speaker 4: of consumer AI from Microsoft. It feels as though big
Speaker 4: tech juggernals are partnering in.
Speaker 6: More and more innovative ways to some of the larger
Speaker 6: language model companies. But how cool does that go for
Speaker 6: the entire ecosystem here?
Speaker 12: Yeah, I mean, I think some of the developments that
Speaker 12: we've seen this week are reflection of consolidation in players
Speaker 12: in the foundational market, the foundational model market. So obviously
Speaker 12: they're there are companies that are far at a way
Speaker 12: you know, have tremendous you know, revenue you know, like
Speaker 12: revenue run rates and thinking like Shatgypt and Nanthropic, and
Speaker 12: then companies that aren't quite at that level or don't
Speaker 12: have that same level of revenue growth are having to
Speaker 12: make different decisions about you know, what they need to
Speaker 12: do given the cost of compute and the cost of
Speaker 12: going forward. You know, I think, you know, as a
Speaker 12: seat stage investor, we have companies that we're working with
Speaker 12: for you know, we might be working with them for
Speaker 12: five to ten ten years before we go you know public.
Speaker 12: And you know, if I look at the early you know,
Speaker 12: some of the earlier friends, our previous IPOs like Instacurrent,
Speaker 12: Coybats have also had you know, a very positive momentum
Speaker 12: over the last six six months, two a year. And
Speaker 12: then going forward, we're going to have companies that perhaps
Speaker 12: you and I will be talking about in five, seven
Speaker 12: or ten years.
Speaker 4: What's been interesting this week in the context of AI,
Speaker 4: whether it's US China relations, but there's also a context
Speaker 4: more broadly of where the government plays with this.
Speaker 6: We had or cause, the big announcement from.
Speaker 4: Intel getting more subsidies to be able to be building
Speaker 4: here in the United States, and I know that's something
Speaker 4: that you're thinking a lot about.
Speaker 6: In the context of climate.
Speaker 4: Technology as well, we have money being pushed from the
Speaker 4: EV perspective this week, regulation being pushed from an EV
Speaker 4: perspective to really perhaps enhance electric vehicle manufacturing here in
Speaker 4: the US. Can I when you're thinking about the opportunity
Speaker 4: IRA or another way of investing in climate tech, does
Speaker 4: that stick.
Speaker 8: Absolutely?
Speaker 12: I mean, you know, the government, the IRA has provided
Speaker 12: a number of you know, carrots and sticks, predominantly carrots
Speaker 12: that have tremendously expanded the market for some of our companies. So,
Speaker 12: for example, having more punitive measures around methane emissions is
Speaker 12: a is a real benefit to one of our company's, Orbio,
Speaker 12: which is using satellite imagery to really pinpoint methane leaks
Speaker 12: from specific facilities. You know, the incentives and the IRA
Speaker 12: around you know, revenue or purchase. Government purchases of carbon
Speaker 12: removal are also helping to mature that market. And we
Speaker 12: have another company in southern California from a former SpaceX
Speaker 12: engineer called Clarity that is doing carbon dioxide removal at uh,
Speaker 12: you know, with lower energy intensity and usage and costs.
Speaker 5: I'm sure because right at the top of your blog
Speaker 5: post which I read this morning, you were talking about
Speaker 5: the Chips Act.
Speaker 8: Yeah, at lower down at the early stage. Is there
Speaker 8: any benefit felt by the Chips Act in terms of
Speaker 8: inflation Reduction Act?
Speaker 1: Right?
Speaker 12: Inflation reduction? That's right, I mean, there's there's there's obviously
Speaker 12: benefits from both. But like if we're talking about you know,
Speaker 12: a long term investment in you know, the United States
Speaker 12: ability around manufacturing and deep tech, I think that's you know,
Speaker 12: bringing in a lot of like tax rep you know,
Speaker 12: tax credits and tax incentives around building facilities here in
Speaker 12: this country. So for example, you know, to to really
Speaker 12: get carbon removal to the next stage, we're going to
Speaker 12: have to see facilities all over you know, the United States,
Speaker 12: particularly in you know, in the Southwest where Clarity is
Speaker 12: looking to do its first production facility and its first
Speaker 12: facility as well. And that's going to create a tremendous
Speaker 12: amount of jobs for all kinds of Americans.
Speaker 5: Innationalist capital partner, can I cut look great to have
Speaker 5: you here on set in San Francisco.
Speaker 8: Thank you.
Speaker 3: I love playing just there.
Speaker 11: So this is one of the things that we all
Speaker 11: have enabled me to do something that I wasn't able to.
Speaker 12: Really do much the last few years, especially not like this.
Speaker 3: I had to use like a mouth stick and suffer.
Speaker 3: Now it's well, it's all being done with my brain.
Speaker 4: Just part of a live stream with Neuralink's first brain
Speaker 4: implant patient, showing a quadriplegic man who was able to
Speaker 4: play video games and online.
Speaker 6: Chess using just his mind.
Speaker 4: Neuralink, of course, is a brain technology startup founded by
Speaker 4: Elon musk Is. Implant allows a patient to use their.
Speaker 6: Thoughts to control a computer.
Speaker 7: Ed.
Speaker 5: Bitcoin has peeled back more than ten percent from its
Speaker 5: all time high and maybe headed for one of its
Speaker 5: worst weeks of twenty twenty four. This is the appetite
Speaker 5: the spot Bitcoin ETF seems to be slowing down. Big
Speaker 5: Go CEO Mike Belshe joins us, Now that was the intro.
Speaker 5: What do you think is happening right now? With Bitcoin.
Speaker 13: Well, usually I do not like to predict price, but
Speaker 13: I think we're at a very very good time. Of course,
Speaker 13: there's some consolidation, as saying, I guess in the space
Speaker 13: that hey, if you're not ready for my twenty percent drops,
Speaker 13: you're certainly not ready for my six hundred percent increases.
Speaker 2: But overall, what we're seeing some consolidation.
Speaker 13: The ETFs just launched, we've seen tremendous run up in
Speaker 13: a very short period of time. A little bit of
Speaker 13: pullback is happening, but you know, all of the macro
Speaker 13: climate remains extremely bullish for bitcoin, primarily due to what
Speaker 13: people know about the long term just what we care
Speaker 13: about most at bitco, which is look term macro looks
Speaker 13: like we're still going to be very solid with having
Speaker 13: a static supply of bitcoin being something that you can
Speaker 13: count on that doesn't get eroded. And of course, you
Speaker 13: know fiat currencies continuing to do massive changes with debt
Speaker 13: and deficits and no sign of change for that front.
Speaker 3: Bitcoin.
Speaker 4: We've got the Harbing coming up as well, potentially another
Speaker 4: underpinning of price. But who's been getting into these ETFs
Speaker 4: and we've been able.
Speaker 6: To manage flow his mine.
Speaker 2: We have a little bit.
Speaker 13: Actually, so far, I think it's been mostly the smaller
Speaker 13: ticket sizes. So remember, institutions move pretty slowly, pretty glacially. Frankly,
Speaker 13: I think we've seen a wave of retail here over
Speaker 13: the last two and a half months. I think it's
Speaker 13: getting a little bit bigger. But the institutions, you know,
Speaker 13: we've seen some smaller hedge funds come in, Larger hedge
Speaker 13: funds will come in. Pension funds are coming, endowments are
Speaker 13: already here. So now that we have an ETF available,
Speaker 13: which is the distribution channel, which makes it super easy
Speaker 13: for everybody to participate. It takes a little bit of
Speaker 13: time to go through investment committees, but I think that
Speaker 13: we're starting to see that run up happen now all
Speaker 13: through the summer at rhymes.
Speaker 2: So you should say it eightyk by May.
Speaker 8: In the moment the calendar its and the harving, what happens?
Speaker 8: Do you think?
Speaker 3: So?
Speaker 13: The having is an interesting pattern that people look at,
Speaker 13: but I think really the most interesting part is the
Speaker 13: long term meaning of the having. So bitcoin has a
Speaker 13: monetary policy which was set in motion back in two
Speaker 13: thousand and nine, and it has remained completely unchanged since
Speaker 13: that time. It's the longest standing unchanged monetary policy in
Speaker 13: the history of mankind, and this having is a demonstration
Speaker 13: that bitcoin has a solid commitment, unchangeable commitment to that policy,
Speaker 13: which we'll keep going. So with the having the supply
Speaker 13: decreases on a block by block basis, which means that
Speaker 13: we see a lower rate of inflation. Some measure this
Speaker 13: stock to flow and other measurements of how you compare
Speaker 13: that to other assets?
Speaker 7: Right?
Speaker 2: How they but bitcoins in a very good stead is one.
Speaker 13: Of the most static supply assets on the planet, him
Speaker 13: will she It's been great to catch up with you.
Speaker 4: Thank you so much bitco ceo. As we have seen,
Speaker 4: of course, one of the worst weeks for bitcoin this year.
Speaker 4: That does it for this though edition of BlueBag Technology.
Speaker 5: Yet what a week has been. What an ends of
Speaker 5: the week? Check out the podcast. So many of you
Speaker 5: are listening to the podcast. The platforms are Apple, Spotify,
Speaker 5: iHeart and of course we publish to all of our
Speaker 5: own platforms here at Bloomberg from San Francisco and New
Speaker 5: York City.
Speaker 8: This is Bloomberg Technology