WEBVTT - Nvidia Tops $2T and Reddit Files for IPO 0:00:02.560 --> 0:00:10.960 Bloomberg Audio Studios, podcasts, radio news. 0:00:09.000 --> 0:00:14.240 From Mahart where Innovation, money and power Collie in Silicon Valley, Nbon. 0:00:14.640 --> 0:00:19.160 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:32.159 --> 0:00:34.760 And Caroline Heinder Bloomberg's world headquarters in New York. This 0:00:34.880 --> 0:00:37.880 is Bloomberg Technology coming up in Vidio. It tops two 0:00:37.920 --> 0:00:41.120 trillion dollars in market value, becoming the world's fourth most 0:00:41.159 --> 0:00:45.239 valuable company. For coverage, Ahead Plus will break down reddits 0:00:45.280 --> 0:00:48.400 filing to go public, from its AI ambitions to its 0:00:48.440 --> 0:00:50.760 largest shareholders, and Sam Altman. 0:00:50.640 --> 0:00:51.560 Here's Omni present. 0:00:51.800 --> 0:00:55.080 We've got you covered and Calvana shares pop by the 0:00:55.120 --> 0:00:57.720 most of seven months after the used car retailer defied 0:00:57.800 --> 0:01:00.720 challenges of higher interest rates and inflation to actually post 0:01:00.960 --> 0:01:02.840 we kind of solid end to twenty twenty three. 0:01:03.080 --> 0:01:05.520 We sit down with the company's CEO. I mean, while 0:01:05.600 --> 0:01:06.520 not all. 0:01:06.240 --> 0:01:10.400 Earnings are glorious, and Mircado Libre manages to underperformer off 0:01:10.400 --> 0:01:12.960 by thirteen percent, one of the worst performers on the day. 0:01:13.040 --> 0:01:15.640 Not to mention Warner Brothers, which will be digging into 0:01:15.720 --> 0:01:18.280 a little bit later, But first, let's just peel back 0:01:18.560 --> 0:01:20.679 all of these narratives. When it comes to earnings, when 0:01:20.680 --> 0:01:23.000 it comes to the AI boom, and really decide whether 0:01:23.000 --> 0:01:25.240 there's more legs to run on In terms of this market, 0:01:25.280 --> 0:01:27.360 Erica claren Places says, well, that's what folio manager of 0:01:27.360 --> 0:01:30.760 a PGM Jennison Technology Fund her read on tech on 0:01:30.840 --> 0:01:33.200 markets on and video. Of course, I mean, we look 0:01:33.200 --> 0:01:36.039 at the one point nine at seven trillion dollar market capitalization, 0:01:36.080 --> 0:01:38.280 we're clawing our way to the two trillion mark, Erica, 0:01:38.280 --> 0:01:41.720 And I'm interested as to whether you think the hype 0:01:42.000 --> 0:01:45.120 has reality underneath it and ultimately whether we will see 0:01:45.120 --> 0:01:47.520 a leg higher or well we'll see a broadening at 0:01:47.600 --> 0:01:49.880 last in terms of the AI love. 0:01:50.560 --> 0:01:52.640 Well, to answer your question, I think yes to both. 0:01:53.240 --> 0:01:56.040 Jennison has always had a very long term outlook on 0:01:56.640 --> 0:01:59.920 trying to dimension what these opportunities are. We've always been 0:02:00.200 --> 0:02:03.120 very very positive. We were very early in investing in 0:02:03.480 --> 0:02:07.200 Nvidia back in twenty sixteen, and all of our expectations, 0:02:07.320 --> 0:02:10.120 even as ambitious as they were, have been absolutely blown 0:02:10.120 --> 0:02:10.959 out of the water. 0:02:10.760 --> 0:02:14.359 To the upside. I mean, Jensen is an operator. 0:02:14.480 --> 0:02:16.959 He manages to guide and then beat and guide and 0:02:17.000 --> 0:02:21.359 beat each time and still managed to be a global business. 0:02:21.440 --> 0:02:23.639 And I think that's sort of what's been extraordinary that 0:02:23.680 --> 0:02:25.640 this is a company that is finding working with China 0:02:25.680 --> 0:02:29.280 more difficult, largely because of US Chinese geopolitics. How much 0:02:29.320 --> 0:02:30.840 do you have to factor that into some of these 0:02:30.840 --> 0:02:31.919 big tech names. 0:02:32.040 --> 0:02:35.840 Well, certainly the political landscape right now is much more 0:02:35.919 --> 0:02:39.320 challenging for companies as they have restrictions in terms of 0:02:39.360 --> 0:02:41.720 where they can sell what they can sell into China. 0:02:42.160 --> 0:02:45.680 China had risen to about twenty percent of in Nvidia's 0:02:45.720 --> 0:02:48.640 data center revenue. That contracted down to five percent in 0:02:48.680 --> 0:02:51.560 the most recent quarter. But what we're seeing is for 0:02:51.600 --> 0:02:54.919 companies like in Vidia, they've been very nimble, very innovative 0:02:55.120 --> 0:02:57.560 in terms of coming out with products that comply with 0:02:57.600 --> 0:03:00.239 all the export laws. Those will start to ship later 0:03:00.320 --> 0:03:02.959 this year. We believe at Jennison that there's a lot 0:03:02.960 --> 0:03:06.200 of pent up demand from those Chinese customers that will 0:03:06.240 --> 0:03:09.080 contribute to the company's overall performance in the second half. 0:03:09.639 --> 0:03:10.880 Let's broaden out from Nvidia. 0:03:10.960 --> 0:03:14.440 Therefore, is there room market share ability and capability for 0:03:14.520 --> 0:03:16.240 the likes of MD and some of the other rivals 0:03:16.280 --> 0:03:16.680 in the space. 0:03:16.720 --> 0:03:18.400 Should we look to other chip makers? 0:03:19.240 --> 0:03:21.600 Our view is yes, at Jennison, we see that in 0:03:21.680 --> 0:03:25.120 Nvidia in its own process of innovation has opened up 0:03:25.160 --> 0:03:28.360 the doors of opportunity for many other companies, from compute 0:03:28.400 --> 0:03:32.440 companies as you mentioned, like Advanced micro Devices and Broadcom 0:03:32.560 --> 0:03:36.520 which we own in size, to storage companies, to networking companies, 0:03:36.720 --> 0:03:38.840 and of course to software companies that are able to 0:03:38.960 --> 0:03:41.280 harness this incredible compute. 0:03:40.840 --> 0:03:43.000 Power to deliver software. 0:03:42.600 --> 0:03:45.880 That enables tremendous games and productivity and innovation. 0:03:46.960 --> 0:03:49.640 When just going back to Nvidia for a moment, is 0:03:49.720 --> 0:03:53.240 there anything that makes you give pause a two trillion 0:03:53.280 --> 0:03:57.440 dollar market valuation an issue of China or indeed of 0:03:57.520 --> 0:03:59.960 just like running out of road of exuberance, or really 0:04:00.120 --> 0:04:03.440 you have to go back to well forward pe ratios 0:04:03.440 --> 0:04:05.840 that still make the company look really rather attractive and 0:04:05.920 --> 0:04:06.880 not that expensive. 0:04:07.520 --> 0:04:10.440 Well, what we try to do at Jennison is really 0:04:10.520 --> 0:04:13.040 take a longer term view. We've actually written some white 0:04:13.040 --> 0:04:15.680 papers that are on our website about this. But looking 0:04:15.720 --> 0:04:19.960 out over the entire TAM of the installed base of infrastructure, 0:04:20.240 --> 0:04:23.640 we see that as a one trillion dollar opportunity today. 0:04:24.040 --> 0:04:26.640 But the very innovation that Nvidia and others are bringing 0:04:26.680 --> 0:04:30.160 to the table is expanding that TAM and will really 0:04:30.200 --> 0:04:33.880 only maybe ten to fifteen percent penetrated at this point, 0:04:34.040 --> 0:04:37.919 so we see years of opportunity ahead for further penetration 0:04:38.000 --> 0:04:41.160 of those markets, further updating to this brand new way 0:04:41.480 --> 0:04:44.120 of compute, which is known as parallel processism. 0:04:44.560 --> 0:04:47.080 Where else is the slack then, because there is. 0:04:47.160 --> 0:04:50.080 If you talk to the VC community, yes they're looking 0:04:50.120 --> 0:04:52.640 at the underlying compute and the large language models, but 0:04:52.640 --> 0:04:54.560 they're also looking at the applications and the. 0:04:54.480 --> 0:04:55.559 App layer to AI. 0:04:55.960 --> 0:04:58.560 But where are you looking from an industry perspective where 0:04:58.640 --> 0:05:02.960 ultificient intelligence can bring real opportunities for productivity. 0:05:02.279 --> 0:05:05.560 Basic Well, you know, there are, of course the obvious 0:05:05.560 --> 0:05:08.360 places that people talk about, the big hyperscalers being able 0:05:08.400 --> 0:05:12.560 to recommend with much more accuracy and targets companies like 0:05:12.600 --> 0:05:17.719 Amazon Google using these tools to improve their recommenders. However, 0:05:18.320 --> 0:05:21.159 one of the I guess two big new opportunities that 0:05:21.200 --> 0:05:24.520 have emerged in the market unexpectedly in twenty twenty three 0:05:24.520 --> 0:05:27.240 and are accelerating into twenty twenty four. One would be 0:05:27.279 --> 0:05:31.240 the healthcare industry, where companies are using this technology for 0:05:31.480 --> 0:05:34.960 much faster drug development times. And then also we've seen 0:05:35.040 --> 0:05:39.480 an extraordinary interest in sovereigns country's coming in saying we 0:05:39.560 --> 0:05:43.440 want our own version of Chatchibt and our own native language. 0:05:43.560 --> 0:05:45.839 They have their own sets of concerns with regards to 0:05:45.920 --> 0:05:49.160 oversight that they can then control, and they are looking 0:05:49.240 --> 0:05:52.560 for US counterparts to enable them to bring these technologies 0:05:52.600 --> 0:05:53.159 to the market. 0:05:53.839 --> 0:05:56.560 How about the cyber iml of all of this, because 0:05:56.600 --> 0:05:59.680 it felt like that was a real tailwind for syvestalks 0:05:59.680 --> 0:06:01.440 as well. And then you get the awnings of Palo 0:06:01.480 --> 0:06:03.680 outs on networks and everyone's worried and then not going 0:06:03.720 --> 0:06:05.760 to factor in as quickly as people at anticipate. Is 0:06:05.839 --> 0:06:08.320 are there any parts of the technology space that you 0:06:08.400 --> 0:06:11.839 think is overdone? All the valuation's on attractive right now? 0:06:12.320 --> 0:06:15.160 Well, you know, what we're seeing at Jennison is a 0:06:15.360 --> 0:06:19.480 real tale of haves and have not those companies that 0:06:19.560 --> 0:06:23.120 are bringing technologies to the table that are truly disrupting 0:06:23.120 --> 0:06:25.919 the industries that they are in, and those companies that 0:06:26.120 --> 0:06:30.120 may be facing challenges over the longer period, particularly with 0:06:30.160 --> 0:06:34.240 regards to pricing. People talk about, for example, as you mentioned, cybersecurity, 0:06:34.520 --> 0:06:37.520 there's so many different flavors of where cybersecurity exists, whether 0:06:37.520 --> 0:06:39.760 it's in the end market, in your phone or your computer, 0:06:40.080 --> 0:06:44.120 whether it's in your enterprise or even whether it's within 0:06:44.200 --> 0:06:46.880 the internet. So one really has to be very careful 0:06:47.160 --> 0:06:50.279 in looking at the various players where they exist, whether 0:06:50.360 --> 0:06:52.760 or not they have pricing power, and the sustainability of 0:06:52.760 --> 0:06:54.760 that pricing power over a longer period of time. 0:06:56.120 --> 0:07:00.680 Is your focus about the US paying the output FORMERHA 0:07:00.680 --> 0:07:03.960 when it comes. There's been a lot of ongoing narrativists 0:07:04.000 --> 0:07:05.960 whether China is ahead with AI or US, and it 0:07:06.000 --> 0:07:08.040 feels as in the US still is. But where is 0:07:08.080 --> 0:07:10.360 the global opportunity because as we reference at the top 0:07:10.400 --> 0:07:12.440 of the show, European stocks are a record high. On 0:07:12.440 --> 0:07:14.320 the back of this, Japanese docks managed to go on 0:07:14.320 --> 0:07:16.160 the record high, and all of US are factoring in 0:07:16.240 --> 0:07:17.160 AI because of that. 0:07:18.000 --> 0:07:20.640 I think that the answer to this question is that 0:07:21.000 --> 0:07:24.640 the predominance of the opportunities that we see are in 0:07:24.640 --> 0:07:29.559 the United States. However, there are incredible opportunities overseas as well. 0:07:29.920 --> 0:07:34.200 For example, ASM Lithography has a dominating position in the 0:07:34.240 --> 0:07:37.280 area of lithography. This is an essential you cannot get 0:07:37.320 --> 0:07:40.160 around it in using this tool to make the next 0:07:40.200 --> 0:07:44.120 generation of semiconductors as well as the older generation of semiconductors. 0:07:44.600 --> 0:07:48.320 This company is an incredibly innovative company, which is reflected 0:07:48.320 --> 0:07:52.080 in its margin profile, grows profit margins, operating margins, free 0:07:52.080 --> 0:07:56.440 cash flow margins, and so we do find opportunities overseas 0:07:56.560 --> 0:07:59.880 as well, but the majority of the innovation that we're 0:08:00.320 --> 0:08:02.320 and is in the United States today. 0:08:02.880 --> 0:08:05.160 It's just been fantastic having your voice, your expertise on 0:08:05.200 --> 0:08:07.160 the show. Thank You, you will come back, have a 0:08:07.160 --> 0:08:10.200 wonderful weekend. Erika Klaarr, she's portfolio manager for the p 0:08:10.320 --> 0:08:13.640 Jim Jennison Technology Fund, really taking us through all the 0:08:13.640 --> 0:08:14.520 big hitters. 0:08:14.200 --> 0:08:14.520 Of the week. 0:08:14.560 --> 0:08:17.720 Mean while coming up WI another big hitter which eventually 0:08:17.800 --> 0:08:21.000 might become public. Reddit it's filing for its IPO. All 0:08:21.120 --> 0:08:24.280 the details on this company that's long been waiting to 0:08:24.320 --> 0:08:26.240 get into the public markets. Meanwhile, let's go to those 0:08:26.240 --> 0:08:28.400 public markets check in on what's happening with Walmart. 0:08:28.480 --> 0:08:32.160 Up sixtens of percent. We're basically seeing flat. 0:08:31.840 --> 0:08:34.000 Though on the company that it's looking to be acquiring 0:08:34.520 --> 0:08:37.000 a ten spot ninety nine Viseo holdings. 0:08:37.040 --> 0:08:38.360 Of course, Walmart's. 0:08:37.920 --> 0:08:41.240 Acquisition of Video is a warning bell, according to Massachusetts 0:08:41.280 --> 0:08:42.520 Democrat Elizabeth Warren. 0:08:42.840 --> 0:08:44.200 She's putting this in a post on. 0:08:44.160 --> 0:08:47.280 Social media platform x In fact, regulators should scrutinize this 0:08:47.400 --> 0:08:50.040 merger and they will potentially be looking as to whether 0:08:50.040 --> 0:08:52.880 it will extend Walmart's dominance, especially threatened competition. 0:08:52.960 --> 0:08:53.360 She says. 0:08:53.480 --> 0:08:55.920 Remember Walmart also gained on some strong results earlier in 0:08:56.000 --> 0:08:56.280 the week. 0:08:56.559 --> 0:09:10.960 This is Roommate Technology. 0:09:12.040 --> 0:09:15.200 Let's talk about potential IPOs San Francisco, BA social media 0:09:15.200 --> 0:09:18.400 company read it and has publicly filed for that IPO. 0:09:18.559 --> 0:09:19.960 Long waited, and. 0:09:19.960 --> 0:09:21.160 Of course it's going to be a big test for 0:09:21.240 --> 0:09:24.280 VC backtech IPOs for the year. Here to break down 0:09:24.320 --> 0:09:26.240 what we now know from the S one filing for 0:09:26.320 --> 0:09:29.000 New Meg's Katie Rufe, who you've been tracking this closely, 0:09:29.040 --> 0:09:32.600 waiting with baited breath, and we have ultimately got to 0:09:32.600 --> 0:09:34.800 group to the fact that this company is not yet profitable. 0:09:36.440 --> 0:09:39.400 That's true, that's right. They reported they have over eight 0:09:39.520 --> 0:09:42.800 hundred million in annual revenue, but they are not profitable. 0:09:42.960 --> 0:09:46.840 They lost less than one hundred million last year. Their 0:09:46.920 --> 0:09:51.800 losses are shrinking and their revenue is growing, but not profitable. 0:09:52.040 --> 0:09:56.000 They are hoping that this new AI partnership is going 0:09:56.080 --> 0:10:01.000 to be what excites Wall Street, the partnership with Google, 0:10:01.240 --> 0:10:04.439 and they're thinking that this is the time to announce that, 0:10:04.679 --> 0:10:06.880 you know, the Google partnership that's going to scrape some 0:10:06.920 --> 0:10:10.200 of their data from Reddit will excite. 0:10:10.440 --> 0:10:12.520 And we'll see whether, of course that extends to other 0:10:12.600 --> 0:10:15.520 large language models, most notably open Ai, where we understand 0:10:15.559 --> 0:10:17.680 now that sal Maltman, who is a temporary CEO for 0:10:17.760 --> 0:10:20.520 the company, is of course a big shareholder. But Katie 0:10:20.679 --> 0:10:22.079 remind us who is going. 0:10:21.920 --> 0:10:24.000 To be winning, who is whether or not they win. 0:10:24.120 --> 0:10:26.160 Remember, this is kind of a down round compared to 0:10:26.200 --> 0:10:30.000 its last money in from vcs at a ten billion valuation. 0:10:30.240 --> 0:10:34.920 But are we anticipating some good liquidity events for some 0:10:35.040 --> 0:10:36.720 KEYVC names out there. 0:10:38.000 --> 0:10:40.600 Well, so Bloomberg has reported that they might just be 0:10:40.720 --> 0:10:43.800 valued about five billion when they go public, although it 0:10:43.880 --> 0:10:46.800 remains to be seen because a lot of this just 0:10:46.840 --> 0:10:50.000 gets socided the night before based on how the market 0:10:50.120 --> 0:10:54.559 is trading. They have. You know, it's interesting because they've 0:10:54.559 --> 0:10:56.720 been around since two thousand and five, so some of 0:10:56.760 --> 0:11:01.360 their early shareholders are no longer major in vesters, you know, 0:11:01.480 --> 0:11:04.720 Conde Nasts actually they've been a major shareholder and Reddit 0:11:04.800 --> 0:11:07.840 and so this has been a long time coming for 0:11:07.920 --> 0:11:12.239 their investment. But you look at some of the early names, 0:11:12.280 --> 0:11:17.040 like a founder Alexis o'hanian. He wasn't even on the prospectus. 0:11:17.600 --> 0:11:20.760 He did not make the cuite for a five percent shareholder, 0:11:20.800 --> 0:11:22.880 which is what it's required to see in the filing. 0:11:23.040 --> 0:11:26.400 So you know, at this point, since Reddit's been around 0:11:26.559 --> 0:11:29.000 nineteen years, I would imagine a lot of the original 0:11:29.000 --> 0:11:34.040 shareholders actually sold shares on the secondary markets and got 0:11:34.120 --> 0:11:37.439 some early liquidity before the actual liquidity event. 0:11:37.920 --> 0:11:41.480 Advanced Magazine publishes, as you say, the new house family 0:11:41.520 --> 0:11:44.640 behind Conye Nast, and plenty of other publishing set to 0:11:44.679 --> 0:11:47.040 be a Kia and or in this particular event. 0:11:47.200 --> 0:11:48.000 We thank you, Katie. 0:11:48.000 --> 0:11:50.520 We've just breaking down the intricacies of what's going on. 0:11:50.600 --> 0:11:53.280 Let's get into well that secondary market, how active it is, 0:11:53.280 --> 0:11:55.559 how positive is on Reddit getting to any sort of 0:11:55.600 --> 0:11:58.360 whipne it anywhere near a five billion dollar evaluation. We've 0:11:58.360 --> 0:12:01.600 got Brian Lynch with us of Market inside of Equityzen 0:12:01.679 --> 0:12:04.280 which connects to a holders of private companies with invested 0:12:04.360 --> 0:12:07.960 seeking alternative investments, and just how active has read it 0:12:08.000 --> 0:12:09.800 been in the secondary market. 0:12:10.880 --> 0:12:14.240 Redda has definitely been a popular name in the secondary 0:12:14.240 --> 0:12:17.120 market over the years since Katie said, this is a 0:12:17.240 --> 0:12:20.160 nineteen year old company, So there has been a lot 0:12:20.160 --> 0:12:24.720 of demand foreign liquidity from early shareholders over time. 0:12:25.200 --> 0:12:27.320 You know. We know they did a tender offer in 0:12:27.400 --> 0:12:29.000 twenty twenty one, so I think that. 0:12:29.080 --> 0:12:32.480 Helped alleviate maybe some of that liquidity need. But I 0:12:32.520 --> 0:12:35.280 think there's still a lot of demand for a liquidity 0:12:35.360 --> 0:12:38.199 that will come you know, via the IPO. For what 0:12:38.240 --> 0:12:41.880 we've seen from you know, trades that have been reported 0:12:41.920 --> 0:12:44.120 recently in the secondary market is about a four and 0:12:44.120 --> 0:12:46.880 a half for four point eight billion dollar valuation. So 0:12:47.400 --> 0:12:50.160 the fact that they're eyeing a five billion dollar valuation 0:12:50.480 --> 0:12:53.400 kind of makes sense since companies tend to trade at 0:12:53.440 --> 0:12:56.199 a discount in the private markets where you don't have that. 0:12:56.200 --> 0:12:58.520 Same liquidity that you do in the public markets. 0:12:59.040 --> 0:13:01.240 Who if you can on and it's a tool from 0:13:01.280 --> 0:13:02.840 the activity in the secondary market. 0:13:03.320 --> 0:13:04.760 Is this going to be a retail name? 0:13:05.080 --> 0:13:09.160 Given well ready it became synonymous with means stock investing 0:13:09.160 --> 0:13:11.520 because the wool Street bets is it more likely to 0:13:11.520 --> 0:13:14.760 be bought by retail investment? Will institutional players be interested 0:13:14.800 --> 0:13:17.400 in a company that isn't yet posting profits. 0:13:18.880 --> 0:13:22.480 I think they're really betting on there being retail interest 0:13:22.520 --> 0:13:24.760 in this name or you know, in their s one 0:13:24.800 --> 0:13:26.959 they even say as a risk factor, the fact that 0:13:26.960 --> 0:13:30.040 there is retail interest, or they expect retail interest, is 0:13:30.120 --> 0:13:31.240 going to cause. 0:13:31.040 --> 0:13:32.360 Volatility in the stock. 0:13:32.760 --> 0:13:36.680 The fact that they are issuing shares to seventy five 0:13:36.720 --> 0:13:39.880 thousand power users, or allowing those users to buy into 0:13:39.920 --> 0:13:43.560 the IPO, will also create some volatility. Since there's no 0:13:43.679 --> 0:13:45.839 lock up to those shares, they're going to allow those 0:13:45.840 --> 0:13:47.439 shares to trade freely. 0:13:47.600 --> 0:13:49.800 So I think they're expecting a lot of. 0:13:49.760 --> 0:13:53.599 Retail activity, which isn't likely to increase the volatility of 0:13:53.640 --> 0:13:57.679 the stock, especially in its early days. From an institutional 0:13:57.679 --> 0:14:00.640 investor perspective, I think you're right. You know, we've seen 0:14:00.920 --> 0:14:06.440 over time that institutions are less interested in these unprofitable companies. 0:14:06.480 --> 0:14:09.559 And Reddit is interesting because while they are. 0:14:09.440 --> 0:14:12.839 A nineteen year old business, they really didn't start monetizing 0:14:13.000 --> 0:14:15.040 until twenty so their. 0:14:14.880 --> 0:14:17.760 Monetization engine is relatively. 0:14:17.240 --> 0:14:21.360 Young and unproven, and advertising is ninety eight percent of 0:14:21.360 --> 0:14:25.080 that engine now. And there are opportunities for them on 0:14:25.120 --> 0:14:27.920 the data license in front, as Katie mentioned the Google 0:14:27.920 --> 0:14:30.600 partnership they talked about this week, but a lot of 0:14:30.600 --> 0:14:35.320 that is very forward looking and unproven, so I'm curious 0:14:35.360 --> 0:14:37.160 to see how institutions. 0:14:37.280 --> 0:14:39.160 You take that into account. 0:14:38.800 --> 0:14:41.240 And Steve Hoffman, having been there at its birth in 0:14:41.240 --> 0:14:45.280 two thousand and five, still driving that new iteration of Reddit. 0:14:45.640 --> 0:14:48.760 And where is the risk factor in cozying. 0:14:48.400 --> 0:14:52.480 Up with large language model makers, with the big tech 0:14:52.560 --> 0:14:54.400 firms that want to scrape the data? 0:14:55.480 --> 0:14:56.160 Yeah, I think. 0:14:56.480 --> 0:14:58.440 I mean, we've heard this from the Reddit community that 0:14:58.840 --> 0:15:02.000 there has been some pushback about this and concern, but 0:15:02.040 --> 0:15:06.400 it really is these human conversations that are needed to 0:15:06.440 --> 0:15:10.600 train these models. And Reddit has, you know, billions of 0:15:10.880 --> 0:15:14.360 posts and comments on its platform that are the exact 0:15:14.360 --> 0:15:16.440 types of posts and comments that will help. 0:15:16.280 --> 0:15:17.120 Train those models. 0:15:17.120 --> 0:15:20.320 So I think there could be a little backlash from 0:15:20.480 --> 0:15:25.680 users on the platform, but it is a huge monetization opportunity. 0:15:26.320 --> 0:15:29.320 At the sixty million dollar contract they're talking about with Google, 0:15:29.400 --> 0:15:31.680 that only makes up about seven and a half percent 0:15:31.680 --> 0:15:33.840 of their current revenue, But if this is something that 0:15:33.880 --> 0:15:36.480 they can replicate with others, it could become a much 0:15:36.480 --> 0:15:39.640 more sizeable part of their business. But an interesting thing 0:15:39.720 --> 0:15:43.240 that they do note is that these language learning models. 0:15:43.000 --> 0:15:44.640 Could also hinder their business. 0:15:44.720 --> 0:15:48.520 So if people go to chat GBT instead of Reddit 0:15:48.600 --> 0:15:51.960 to ask whatever question they'd ask on Reddit, Reddit may 0:15:52.240 --> 0:15:55.080 lose daily active users and that's really going to hurt 0:15:55.120 --> 0:15:56.520 their ad revenue in the end. 0:15:56.600 --> 0:15:57.840 So it's a double edged sword. 0:15:58.400 --> 0:16:03.600 Well said, I'm interested in that advertising focus. Ultimately, when 0:16:03.640 --> 0:16:06.760 analysts go out there and try to decide whose reddits 0:16:06.800 --> 0:16:10.640 competitors are, are they immediately going to be looking to alphabet, 0:16:10.920 --> 0:16:13.440 to meta to other social media platforms. 0:16:14.640 --> 0:16:18.160 I think those are the obvious, you know, competitors in 0:16:18.160 --> 0:16:21.080 the space, and this market has gotten a lot more 0:16:21.080 --> 0:16:25.160 competitive as ad dollars have been pulled back. What Reddit 0:16:25.280 --> 0:16:29.160 is really trying to sell investors on is the fact 0:16:29.200 --> 0:16:32.920 that they can allow advertisers to reach a much more 0:16:33.080 --> 0:16:37.760 niche target audience. So, you know, you're a sleeping bag manufacturer, 0:16:37.840 --> 0:16:39.640 you want to talk to people who are camping. We 0:16:39.720 --> 0:16:43.239 have a conversation of thousands of people who are specifically 0:16:43.280 --> 0:16:46.640 talking about this and their ability to actually convert people. 0:16:47.000 --> 0:16:50.320 From their own research, they've shown that sixty one percent 0:16:50.320 --> 0:16:52.960 of their users say they're more likely to trust an 0:16:52.960 --> 0:16:54.240 ad that comes from Reddit. 0:16:54.560 --> 0:16:55.840 So if that can. 0:16:55.720 --> 0:16:59.560 Be proven in the clicks and the impressions that these 0:16:59.560 --> 0:17:02.160 ads get, they may have a bit of an edge, 0:17:02.200 --> 0:17:05.399 even though their audience is much smaller than these other platforms, 0:17:05.600 --> 0:17:08.000 but I think we're still early improving now. 0:17:08.880 --> 0:17:11.560 Trying to be proving out the niche factor and whether 0:17:11.560 --> 0:17:13.919 that's a drawer. Brian Lynch really great to catch up 0:17:13.960 --> 0:17:14.119 with you. 0:17:14.200 --> 0:17:14.600 Thank you. 0:17:22.160 --> 0:17:25.600 Time now for talking tech. First up, GM's autonomous driving unit, Cruise, 0:17:26.040 --> 0:17:28.399 is nearing the resumption of its robotaxi testing after the 0:17:28.400 --> 0:17:30.879 grounding of its fleet last year. Now, according to sources, 0:17:30.920 --> 0:17:34.600 Cruises in talks as several metro areas Houston Dallas, for example, 0:17:34.800 --> 0:17:37.520 about test driving on public roads with safety drivers, and 0:17:37.600 --> 0:17:39.960 before the suspension of the operations, company had hundreds of 0:17:39.960 --> 0:17:43.160 cars in San Francisco and smaller numbers across Austin, Houston, 0:17:43.240 --> 0:17:46.520 and Phoenix. Meanwhile, the investment firm that manages part of 0:17:46.560 --> 0:17:50.040 the fortune of Ali Baba chairman Joe Zai Bluepool, It's 0:17:50.040 --> 0:17:53.240 called It's all Over thirty four million Blue Owl shares 0:17:53.359 --> 0:17:55.359 for eighty three percent of its remaining holdings in that 0:17:55.480 --> 0:17:56.800 alternative asset Giant. 0:17:57.040 --> 0:17:58.680 Now, the shares would have been worth about. 0:17:58.440 --> 0:18:01.119 One or sixty million dollars in weighted average price at 0:18:01.119 --> 0:18:04.000 the stock over the last three months. Now, let's turn 0:18:04.040 --> 0:18:06.479 our attention to some other shares that are being hit 0:18:06.560 --> 0:18:08.560 at the moment. Warner Brothers Discovery. We were just looking 0:18:08.600 --> 0:18:11.080 at it before the break media company reporting its fourth 0:18:11.119 --> 0:18:13.600 quarter revenue profits. They fell short of estimates, and we're 0:18:13.600 --> 0:18:15.200 seeing the stock at a record low. 0:18:15.600 --> 0:18:17.080 Chris pal Mary joins us. 0:18:16.960 --> 0:18:20.920 Now on basically like weakness in linear television, weakness and 0:18:20.960 --> 0:18:23.480 the advertising spend. I mean, was there any area that 0:18:23.600 --> 0:18:24.080 was good? 0:18:25.920 --> 0:18:28.600 Yeah, I guess you could say if things weren't that bad. 0:18:28.840 --> 0:18:33.920 In their direct to consumer the streaming business, it was unprofitable, 0:18:33.960 --> 0:18:37.320 but for the full year it was profitable, and the 0:18:37.400 --> 0:18:40.720 losses were much lower in the fourth quarter, and subscribers 0:18:40.720 --> 0:18:42.439 were a little bit better than they hoped, but not 0:18:42.600 --> 0:18:48.280 dramatic growth. Actually lost subscribers in domestically instilled way behind 0:18:48.320 --> 0:18:50.400 Netflix and Disney in that department. 0:18:51.320 --> 0:18:55.320 And all of this just highlights the dia straits that 0:18:55.359 --> 0:18:58.360 basically the entire ecosystem finds itself in. We are understanding 0:18:58.400 --> 0:18:59.600 there's going to be M and A that's going to 0:18:59.600 --> 0:19:02.440 be consolid because a lot of these companies are struggling 0:19:02.440 --> 0:19:03.480 with the same sort of headwinds. 0:19:03.520 --> 0:19:06.600 Ran Yeah, And one of Brothers CEO, David Savo, is 0:19:06.640 --> 0:19:09.120 pretty candid on the call. He said, this really does 0:19:09.200 --> 0:19:12.280 illustrate all the challenges we're facing. I mean TV, traditional 0:19:12.280 --> 0:19:14.840 TV advertising down at double digits. 0:19:14.960 --> 0:19:17.800 And you know, the strikes really hurt them. 0:19:17.880 --> 0:19:21.520 It turns out hoots last year, actors and writers being 0:19:21.640 --> 0:19:25.879 out of not working, and so that studio business was down. 0:19:26.440 --> 0:19:28.880 You know, Warner Brothers had a big push in December, 0:19:29.000 --> 0:19:31.199 releasing three big movies at once. It was kind of 0:19:31.200 --> 0:19:36.359 bold where revenue theatrically we're up, where profits were down, Aquaman. 0:19:36.320 --> 0:19:37.880 Being the biggest disappointment there. 0:19:38.400 --> 0:19:40.719 So there's a lot of they talked about on the call, 0:19:40.840 --> 0:19:44.359 the superhero fatigue sort of. So there's a lot of 0:19:44.680 --> 0:19:46.639 work to be done in these traditional media companies. 0:19:47.040 --> 0:19:49.560 Sure is. And I know you'll be across at Chris Palmary. 0:19:49.600 --> 0:19:59.399 We really appreciate it. Welcome back to being that technology 0:19:59.440 --> 0:20:01.359 im caindin High in New York. Let's focus in on 0:20:01.400 --> 0:20:04.359 a company that eventually will have its market capitalization for 0:20:04.440 --> 0:20:07.000 all to see on the public markets Reddit. Of course, 0:20:07.040 --> 0:20:10.120 company filing publicly for its IPO just yesterday after the Bell. 0:20:10.040 --> 0:20:12.240 One name in the filing stood out. 0:20:12.440 --> 0:20:15.760 He's everywhere Open AI CEO Sam Altman was listed to 0:20:15.760 --> 0:20:18.800 one of the company's major shareholders, joining us now is 0:20:18.840 --> 0:20:21.480 Bloomgg's Ryan Gould, and. 0:20:20.760 --> 0:20:21.880 We shouldn't be surprised. 0:20:21.880 --> 0:20:24.359 He was a for eight whole days the interim CEO 0:20:24.440 --> 0:20:27.720