WEBVTT - Meta Cable Expansion Stalled by Iran Conflict 0:00:02.520 --> 0:00:13.560 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive 0:00:13.600 --> 0:00:17.400 from coast to coast with Caroline Hyde in New York 0:00:17.680 --> 0:00:21.680 and Vla Low in San Francisco. 0:00:23.239 --> 0:00:24.880 This is Bloomberg Tech coming up. 0:00:25.000 --> 0:00:28.040 US Defense Secretary Pete Hegsev gives an update on Iran. 0:00:28.280 --> 0:00:30.560 As we near the end of week two of the war. 0:00:31.560 --> 0:00:34.760 You know, the new so called not so Supreme leader 0:00:35.720 --> 0:00:38.640 is wounded and likely disfigure. 0:00:39.920 --> 0:00:40.200 Class. 0:00:40.200 --> 0:00:44.040 Adobe CEO Shantanu and the Ryan will resign amid skepticism 0:00:44.080 --> 0:00:47.080 about the company's ability to thrive in the AI era, 0:00:47.520 --> 0:00:50.440 and the S ANDP is considering changes to rules governing 0:00:50.440 --> 0:00:54.400 how companies join its index, which could fast track SpaceX's 0:00:54.560 --> 0:00:57.600 entry after an IPO. Let's get to markets, and this 0:00:57.680 --> 0:01:01.040 is what the financial markets look like this Friday. It's 0:01:01.040 --> 0:01:03.560 a kind of continuation of the broader theme of the week. 0:01:03.880 --> 0:01:04.800 There is slight. 0:01:04.600 --> 0:01:07.360 Pressure on equities and asat one hundred is modestly lower, 0:01:07.400 --> 0:01:11.880 basically flat. And you see Brent crude, the global benchmark 0:01:11.920 --> 0:01:15.120 for oil above one hundred dollars a barrel. With a 0:01:15.240 --> 0:01:18.240 micro focus of what's happening in the Middle East and 0:01:18.280 --> 0:01:20.679 the Gulf, there has been some other news flow and 0:01:20.720 --> 0:01:23.520 earning considerations around that. When it comes to the tech sector, 0:01:23.520 --> 0:01:25.319 we can get to those later in the hour, but 0:01:25.480 --> 0:01:27.480 right now it is very much the macro and what 0:01:27.600 --> 0:01:30.400 is happening with the war in Iran. President Trump and 0:01:30.520 --> 0:01:33.959 Iran's leadership are both striking a defiant tone as the 0:01:33.959 --> 0:01:36.400 war in Iran is in its second week, with Trump 0:01:36.480 --> 0:01:40.920 vowing new strikes with quote unparalleled firepower. US Defense Secretary 0:01:41.200 --> 0:01:43.919 Pete Hegseff has also weighed in saying Iran's new Supreme 0:01:44.000 --> 0:01:47.680 leader is likely wounded following recent attacks. Here with all 0:01:47.720 --> 0:01:51.320 of the latest is Bloomberg's Washington correspondent Tyler Kendall, what 0:01:51.360 --> 0:01:51.920 do we need to know? 0:01:53.200 --> 0:01:55.200 Yeah, hey, and good morning. While as you mentioned, the 0:01:55.280 --> 0:01:58.680 US is threatening Iran with fresh attacks, the latest suggestion 0:01:58.840 --> 0:02:00.600 that there is going to be no let up in 0:02:00.680 --> 0:02:03.320 this conflict. We heard from President Trump in a post 0:02:03.320 --> 0:02:06.000 on truth Social earlier where he said that the US 0:02:06.040 --> 0:02:09.920 maintains unlimited ammunition and has quote plenty of time. 0:02:10.120 --> 0:02:10.400 Plus. 0:02:10.400 --> 0:02:12.919 We heard from the US Defense Secretary Pete Hegseth and 0:02:12.960 --> 0:02:16.160 a briefing to reporters earlier today where he confirmed the 0:02:16.240 --> 0:02:19.800 US and Israel have hit more than fifteen thousand Iranian 0:02:19.800 --> 0:02:22.840 targets and says that Iran's one way drone usage is 0:02:22.840 --> 0:02:26.240 now down ninety five percent, that. 0:02:26.240 --> 0:02:29.960 The United States is decimating the radical Iranian regimes military 0:02:30.080 --> 0:02:33.799 in a way the world has never seen before. Never 0:02:33.840 --> 0:02:38.880 before has a modern capable military which Iran used to 0:02:38.919 --> 0:02:47.000 have been so quickly destroyed and made combat ineffective, devastated from. 0:02:46.960 --> 0:02:51.239 An operational level. We know that insuring safe passage through 0:02:51.280 --> 0:02:54.040 the Strait of Hermus remains a top priority, as Secretary 0:02:54.080 --> 0:02:57.120 Hegseth went on to say, quote, We've been dealing with it. 0:02:57.200 --> 0:02:59.800 Bloomberg News is now reporting that several back channels have 0:02:59.800 --> 0:03:03.640 been opened between US allies and Iran about reopening the 0:03:03.680 --> 0:03:06.840 straight Those sources caution that they are not optimistic that 0:03:06.880 --> 0:03:10.520 the efforts are going to yield results. Earlier today, a 0:03:10.560 --> 0:03:14.239 Turkish government official did confirm that a Turkish flagged vessel 0:03:14.320 --> 0:03:17.040 did make its way through the critical waterway, the latest 0:03:17.080 --> 0:03:21.160 example about negotiating for safe passage, but ed as there 0:03:21.200 --> 0:03:24.440 is mounting political pressure on President Trump when it comes 0:03:24.520 --> 0:03:27.000 to higher energy prices. We did see the US and 0:03:27.080 --> 0:03:32.000 move yesterday move to wave certain sanctions related to Russian oil. 0:03:32.240 --> 0:03:35.840 We saw a second temporary waiver issued for those cargoes 0:03:35.880 --> 0:03:38.920 that are already at c ED at this point. Are 0:03:39.000 --> 0:03:42.240 data analyzed by Bloomberg estimates that this could impact nearly 0:03:42.280 --> 0:03:45.920 three hundred and ten thousand refined products bluebooks. 0:03:45.960 --> 0:03:47.080 Tyler Kendall, thank you. 0:03:47.120 --> 0:03:50.240 With the war in Iran continuing to Royal Region, Meta 0:03:50.360 --> 0:03:53.920 has announced its pausing part of its major internet expansion 0:03:53.920 --> 0:03:58.400 efforts in Africa, specifically work on a key underwater cable 0:03:58.480 --> 0:04:01.280 system that would have run through parts of the Middle East, 0:04:01.320 --> 0:04:04.640 including Oman, the UAE, and Saudi Arabia. Here with the 0:04:04.680 --> 0:04:09.120 details is Bloomberg's tech editor Olivia Solon. We're showing that 0:04:09.200 --> 0:04:13.680 the kind of map the network, Olivia, of the cables 0:04:14.080 --> 0:04:18.160 zoomed in on the Gulf region explain the actions the 0:04:18.200 --> 0:04:20.440 metas taking and the details that we need to know. 0:04:22.320 --> 0:04:25.080 Right well, because of the war in Iran and the 0:04:25.120 --> 0:04:28.840 missiles that have been coming across the Persian Gulf, Meta 0:04:29.480 --> 0:04:31.600 well has been kind of forced to take the decision 0:04:31.640 --> 0:04:35.600 to stop building part of this enormous cable system that's 0:04:35.640 --> 0:04:36.440 been building for. 0:04:36.400 --> 0:04:37.800 A while called to Africa. 0:04:38.240 --> 0:04:40.560 They've actually built the bigger part of it around the 0:04:40.600 --> 0:04:44.240 continent of Africa, but last year they were forced to 0:04:44.800 --> 0:04:48.159 sort of delay work on a section running through the 0:04:48.200 --> 0:04:51.960 Red Sea because there were whothy missile attacks on ships there. 0:04:52.520 --> 0:04:53.560 And when they. 0:04:53.360 --> 0:04:55.440 Did that, they said, it's okay, We've still got this 0:04:55.520 --> 0:04:58.680 other section going through the Persian Gulf, and that's the 0:04:58.720 --> 0:05:02.160 part that we're talking about now. Well, now, because of 0:05:02.279 --> 0:05:06.320 the missile attacks there, the boats that install cables have 0:05:06.440 --> 0:05:09.359 issued of what's called a force measure notice saying they 0:05:09.400 --> 0:05:14.000 can no longer continue to meet their contractual obligations due 0:05:14.040 --> 0:05:17.679 to obviously the massive safety concerns, And so that means 0:05:17.720 --> 0:05:21.679 this part of this very important new high capacity fiber 0:05:21.720 --> 0:05:23.800 optic cable is on hold. 0:05:25.960 --> 0:05:28.680 The bigger picture for Meta, what is it that they 0:05:28.720 --> 0:05:32.400 were trying to achieve in Africa in the region more 0:05:32.440 --> 0:05:38.240 broadly in laying down basically what is updated infrastructure. 0:05:38.760 --> 0:05:41.520 Right, they want to bring a huge amount more connectivity 0:05:41.720 --> 0:05:44.520 to the Middle East and Africa, and I think they will. 0:05:44.560 --> 0:05:47.800 You know, they've already succeeded that partially, but this huge 0:05:47.839 --> 0:05:50.320 section both in the Red Sea and now in the 0:05:50.320 --> 0:05:54.520 Persian Gulf means that this additional capacity that was going 0:05:54.560 --> 0:05:57.560 to really help sort of fuel the data center build 0:05:57.600 --> 0:06:00.839 out that's happening in the region is not to be available, 0:06:01.240 --> 0:06:03.359 at least in the short term. 0:06:03.800 --> 0:06:07.440 Bloomberg's Olivia Solon thank you another meta headline. The company 0:06:07.920 --> 0:06:10.719 is reportedly delaying the role out of its latest AI 0:06:10.880 --> 0:06:15.560 model after internal testing showed it underperformed compared with rival systems. 0:06:15.600 --> 0:06:18.159 That's according to a report by The New York Times. 0:06:18.400 --> 0:06:21.120 This is how equity markets reacting to that meta under 0:06:21.200 --> 0:06:24.560 pressure down almost three percent. Then, you know, looking at 0:06:24.560 --> 0:06:27.880 the trading, particularly in the pre market, alphabet Pairent of 0:06:27.880 --> 0:06:30.320 Google is up percentage point now but had been up 0:06:30.360 --> 0:06:33.480 a little bit more markedly. For more on what this 0:06:33.560 --> 0:06:36.240 kind of indicates about the competitive landscape and what it 0:06:36.279 --> 0:06:40.680 means for investors, Ioka, Yoshioka, portfolio consulting director a wealth 0:06:40.760 --> 0:06:44.280 enhancement group and you know interesting case study, right, Meta 0:06:44.640 --> 0:06:47.919 in alphabet both names that you hold that you look at, 0:06:49.040 --> 0:06:54.040 there are let's say three or four berths for big 0:06:54.200 --> 0:06:57.480 frontier model labs or the big tech companies working on 0:06:58.240 --> 0:07:01.680 next generation models. And when you get a piece of 0:07:01.680 --> 0:07:04.080 news like this, you see meta move to the downside, 0:07:04.240 --> 0:07:05.920 alphabet moved to the upside. 0:07:06.040 --> 0:07:07.200 What do you interpret from that? 0:07:08.040 --> 0:07:08.600 Sure ed? 0:07:08.720 --> 0:07:11.400 So you know, when we think about both of these stocks. 0:07:11.480 --> 0:07:13.280 You know, we try to look at things in the 0:07:13.320 --> 0:07:15.520 context of the long term versus some of these short 0:07:15.600 --> 0:07:18.200 term moves that we're seeing in markets. You know, we 0:07:18.600 --> 0:07:21.520 do see these dislocations from time to time, but over 0:07:21.560 --> 0:07:24.280 the long term, we know that the growth rates for 0:07:24.360 --> 0:07:27.880 both of the stocks are very high and they're you know, 0:07:28.040 --> 0:07:31.720 they've got high quality balance sheets supporting the growth that 0:07:31.760 --> 0:07:34.160 they're trying to accomplish. 0:07:34.640 --> 0:07:38.920 Right now, we're trying to digest still ongoing data, largely 0:07:38.920 --> 0:07:41.720 rearing relating to earnings, and I think just before the 0:07:41.760 --> 0:07:45.280 earning season hit, you had many people in the markets 0:07:45.280 --> 0:07:47.880 come out and say, this is this is what we 0:07:48.000 --> 0:07:53.320 will will judge momentum by simply earnings performance in aggregate 0:07:53.320 --> 0:07:55.840 at this point when it comes to particularly the hyperscalers, 0:07:55.840 --> 0:07:58.520 but our focus on AI. What was it that you 0:07:58.680 --> 0:08:00.400 learned from the earnings season? 0:08:01.040 --> 0:08:04.520 You know, earning season provided a lot of incremental information 0:08:04.840 --> 0:08:07.960 just regarding the overall buildout of AI and where we 0:08:08.000 --> 0:08:11.360 are and the focus that investors have on that return 0:08:11.440 --> 0:08:14.280 on investment that everybody wants to see, just given how 0:08:14.360 --> 0:08:19.120 much CAPAX is being spent by the overall hyperscalers. But 0:08:19.160 --> 0:08:21.800 you know, we also saw that earnings wasn't everything, you know, 0:08:21.880 --> 0:08:25.520 especially in the software space in which earnings continue to 0:08:25.520 --> 0:08:28.520 go higher and yet the multiples got destroyed. 0:08:29.480 --> 0:08:30.960 So the software space interesting. 0:08:31.120 --> 0:08:34.000 I guess if you look below the index level and 0:08:34.720 --> 0:08:37.559 take a look at January, February, now March, what was 0:08:37.600 --> 0:08:41.600 it you saw in investor behavior and the attitude towards 0:08:41.720 --> 0:08:42.480 the tech sector? 0:08:43.000 --> 0:08:45.280 Sure, so you know, it really depends on some of 0:08:45.280 --> 0:08:47.880 the macro economic data that we've been dealing with, some 0:08:47.920 --> 0:08:51.880 of the geopolitical data. To January and February, we clearly 0:08:51.880 --> 0:08:55.200 saw that sell off in software and it reverse in 0:08:55.320 --> 0:08:59.280 March as a little bit of a flight to quality again, 0:08:59.400 --> 0:09:01.720 seeing a little bit of a balance from something that 0:09:01.920 --> 0:09:05.760 had sold off quite a bit and less cyclical per se. 0:09:05.840 --> 0:09:08.080 And you know, you saw the safety of the mag 0:09:08.160 --> 0:09:11.720 seven as well. During this sort of geopolitical conflict that 0:09:11.760 --> 0:09:12.520 has been going on. 0:09:13.880 --> 0:09:18.080 What's dominating the news cycle is war in Iran. Again, 0:09:18.320 --> 0:09:24.000 you know, from the technology investors' perspective, what is the 0:09:24.040 --> 0:09:26.920 incremental data, the soft data, the macro level data that 0:09:26.960 --> 0:09:30.440 you're tracking to make decisions with the portfolio. 0:09:31.360 --> 0:09:34.280 I think from our standpoint, it's clearly the duration of 0:09:34.320 --> 0:09:36.199 this conflict, which is going to be key. I think 0:09:36.240 --> 0:09:38.680 everybody else has talked about this, and it's the one 0:09:38.720 --> 0:09:43.640 thing that nobody really can forecast. If it's short, it's great. 0:09:43.640 --> 0:09:45.840 If it's a little bit longer, it's a little bit 0:09:45.880 --> 0:09:50.520 more detrimental. There's key raw materials, especially for semiconductors that 0:09:50.600 --> 0:09:54.040 could sort of offset some of the production issues that 0:09:54.120 --> 0:09:56.680 we've seen in the past, and so, you know, really 0:09:56.720 --> 0:09:58.920 supply chain issues. We don't want them to kind of 0:09:58.960 --> 0:10:01.600 come back again, and you know, really hit inflation. And 0:10:01.640 --> 0:10:04.400 so those are some of the key metrics we're looking at. 0:10:04.600 --> 0:10:07.000 But tech specifically, I think can be a little bit 0:10:07.000 --> 0:10:09.760 more isolated, just because of the long term secular growth 0:10:09.840 --> 0:10:12.960 nature of a lot of the companies in the tech sector. 0:10:14.400 --> 0:10:16.160 AI is still the dominant theme for. 0:10:16.120 --> 0:10:19.840 You absolutely, especially when it comes to technology and for 0:10:19.920 --> 0:10:23.360 the overall market, it's just the overall contribution from the 0:10:23.440 --> 0:10:26.240 hyperscalers and capex and what that means for the overall 0:10:26.360 --> 0:10:30.040 US economy and globally as well, and you know, just 0:10:30.640 --> 0:10:33.679 the use cases and the workflow changes for a lot 0:10:33.720 --> 0:10:37.880 of enterprises. I think is the predominant sort of you know, 0:10:37.960 --> 0:10:40.080 issues that we're all trying to figure out over the 0:10:40.080 --> 0:10:40.920 next several years. 0:10:41.679 --> 0:10:45.040 Okay, so next week we either do or we don't 0:10:45.040 --> 0:10:49.160 have a big macro event, which is in Nvidia's GtC conference. 0:10:49.960 --> 0:10:54.040 You know, it's so difficult to gauge how that moves 0:10:54.080 --> 0:10:56.840 the need or are you genuinely sort of braced for 0:10:56.880 --> 0:11:00.360 it is a big item on the calendar or kind 0:11:00.360 --> 0:11:02.840 of noise really and hype around what's happening. 0:11:03.000 --> 0:11:05.120 You know, it's really going to depend on what kind 0:11:05.120 --> 0:11:07.839 of information sort of comes out there. You know, in 0:11:07.960 --> 0:11:10.560 video stock has been a little bit range bound for 0:11:10.559 --> 0:11:13.520 the last several months, and hopefully, you know, if they 0:11:13.559 --> 0:11:17.480 have some sort of big announcement, perhaps it moves the stock. 0:11:17.559 --> 0:11:19.720 But I think that the bar is high. You know, 0:11:19.760 --> 0:11:22.920 you've seen Earning's growth of over seventy percent, and you 0:11:22.920 --> 0:11:26.560 know the stock is trading at twenty two times. We're 0:11:26.640 --> 0:11:29.360 going to see some updates on Vira and via Rubin 0:11:29.600 --> 0:11:32.240 and even Fineman, and I think when we get some 0:11:32.360 --> 0:11:36.480 of that additional detail, perhaps it will move the stock. 0:11:37.480 --> 0:11:37.680 Right. 0:11:38.000 --> 0:11:41.160 You know, at Nvidia GtC and DC we got that 0:11:41.240 --> 0:11:44.240 surprise half a trillion dollar figure from Jensen one which 0:11:44.280 --> 0:11:46.760 was literally on a slide behind him and a little 0:11:46.760 --> 0:11:49.920 more information than that. Yoko Yoshioka wealth Enhancement grew. Great 0:11:49.960 --> 0:11:52.160 to have you back on the program, Thank you very much. 0:11:52.360 --> 0:11:52.760 Some news. 0:11:52.800 --> 0:11:57.319 Amazon plans to use chips from startups Cerebras alongside its 0:11:57.360 --> 0:11:58.640 own training and processors. 0:11:58.679 --> 0:12:00.400 It's a combination that. 0:12:00.400 --> 0:12:03.800 The companies say we'll be able to better run AI software. 0:12:03.840 --> 0:12:06.760 AWS will begin offering a new service based on the 0:12:06.840 --> 0:12:09.880 arrangement in the second half of twenty twenty six. According 0:12:09.880 --> 0:12:12.800 to a statement, financial terms weren't disclosed, and when that 0:12:12.840 --> 0:12:15.120 headline hit, By the way, there was a little move 0:12:15.240 --> 0:12:17.520 lower in nvideo to session lows, but it kind of 0:12:17.559 --> 0:12:22.040 bounced back after Okay, coming up. Leadership uncertainty at Adobe 0:12:22.320 --> 0:12:25.959 overshadows otherwise pretty steady results. We're going to discuss that next. 0:12:26.200 --> 0:12:43.640 This is blim big tech. Shares of Adobe are really 0:12:43.720 --> 0:12:46.240 under pressure here. We're off session lows down six and 0:12:46.280 --> 0:12:48.640 a half percent. At one point in the session, we're 0:12:48.679 --> 0:12:51.960 on track for our biggest drop in exactly one year 0:12:52.320 --> 0:12:55.680 to the day. On the week, Adobe very close to 0:12:55.720 --> 0:12:59.120 having its worst five day performance since the end of 0:12:59.160 --> 0:13:00.000 twenty twenty four. 0:13:00.240 --> 0:13:00.720 The news. 0:13:01.360 --> 0:13:04.679 The company announced on its earnings call that Shantanu Nuran, 0:13:04.800 --> 0:13:06.800 who served as CEO for. 0:13:06.720 --> 0:13:07.960 Nearly two decades. 0:13:08.440 --> 0:13:11.400 Is stepping down the stock has already been under pressure anyway, 0:13:11.440 --> 0:13:14.120 down over thirty percent on the last year or so. 0:13:14.280 --> 0:13:18.400 Is it faces concerns about its ability to thrive in 0:13:18.440 --> 0:13:21.480 the AI era. Let's get to it. Bloombok's Brodie Ford 0:13:21.800 --> 0:13:23.280 is here with us. I mean, this is not a 0:13:23.320 --> 0:13:27.720 new story with Adobe and whether it is managing well 0:13:27.960 --> 0:13:29.320 transition into the AI era. 0:13:29.679 --> 0:13:31.640 But we'll start with Shantanu. 0:13:31.840 --> 0:13:35.600 You and I exchanged emails about well what happens next? 0:13:36.760 --> 0:13:38.800 So tell us you know, there's an effort to find 0:13:38.840 --> 0:13:42.560 a successor. And I guess did we get any insight 0:13:42.600 --> 0:13:48.240 as to why Shantanu's decided to take this decision at all? 0:13:48.400 --> 0:13:48.559 Yeah? 0:13:48.640 --> 0:13:50.720 Well, Shantanu was a legend, right, I mean, he was 0:13:50.720 --> 0:13:52.760 in that seat for eighteen years, and he gets a 0:13:52.840 --> 0:13:56.720 lot of credit for turning Adobe from a company where 0:13:56.720 --> 0:13:59.200 you just buy a photoshop or another product tool in 0:13:59.280 --> 0:14:03.200 time to one of these recurring subscription businesses that is 0:14:03.320 --> 0:14:06.679 just normal, but at the time was quite novel. 0:14:07.240 --> 0:14:08.880 But at the end of the day, I. 0:14:08.800 --> 0:14:11.360 Think he was seen as a CEO of that era 0:14:11.679 --> 0:14:14.240 and the AI era. A lot of these SaaS companies 0:14:14.240 --> 0:14:17.960 are needing to undergo a transition or reinvention, and it 0:14:18.000 --> 0:14:20.920 appears that he or the board or somebody decided that 0:14:21.480 --> 0:14:23.280 he might not have been the right person to lead 0:14:23.320 --> 0:14:24.000 that transition. 0:14:25.280 --> 0:14:29.520 There were some data points in the earnings themselves, you know, 0:14:29.600 --> 0:14:34.920 customer behaviors for example, particularly about images, things like that. 0:14:35.200 --> 0:14:37.800 What did you learn about the AI story for Adobe? 0:14:38.880 --> 0:14:41.960 People that are using AI within Adobe products? But the 0:14:42.000 --> 0:14:45.200 big risk for them is that the cost of content 0:14:45.320 --> 0:14:47.520 creation has gone down a lot. A lot of the 0:14:47.640 --> 0:14:51.880 hit creative programs are not made by Adobe, right. I mean, 0:14:51.960 --> 0:14:55.160 Adobe's valuation for a long time was based on being 0:14:55.280 --> 0:14:57.160 really kind of the only game in town if you 0:14:57.200 --> 0:15:00.320 were a professional, and every day that becomes a little 0:15:00.400 --> 0:15:02.200 less true. And that's what they have to reckon with. 0:15:03.320 --> 0:15:05.480 We said at at the start of the segment, so 0:15:05.520 --> 0:15:07.920 we should probably go back to it that actually earnings 0:15:07.960 --> 0:15:11.640 were okay. You know, if you if you can move 0:15:11.720 --> 0:15:13.800 past the news that the CEO of the last two 0:15:13.880 --> 0:15:17.480 decades is moving on, what did the numbers say about 0:15:17.480 --> 0:15:18.040 the business. 0:15:19.160 --> 0:15:21.800 It's quite similar to a lot of the big sass names, 0:15:21.840 --> 0:15:25.160 whether it be Workday or Salesforce, that they're seeing steady 0:15:25.200 --> 0:15:29.560 growth slight decelerations some uptick of their AI products, but 0:15:29.720 --> 0:15:31.560 at the end of the day, it's just not enough 0:15:31.600 --> 0:15:35.120 to convince investors that AI will be an additive and 0:15:35.200 --> 0:15:39.640 not a competitive force against their business. 0:15:39.640 --> 0:15:42.200 Being Boss Brady Ford all across the software space, thank 0:15:42.240 --> 0:15:45.240 you very much. Another news item, a jury in Los 0:15:45.240 --> 0:15:48.360 Angeles will soon decide the outcome of the high stakes 0:15:48.640 --> 0:15:53.200 social media trial and the claims that sites like Instagram 0:15:53.240 --> 0:15:57.640 and YouTube are dangerously addictive to young people. Final arguments 0:15:57.680 --> 0:16:01.840 just concluded after roughly four weeks testimony from medical experts, 0:16:02.000 --> 0:16:05.600 a whistleblower, and Mark Zuckerberg himself. The jury of seven 0:16:05.640 --> 0:16:09.280 women and five men is set to begin deliberations today. 0:16:09.880 --> 0:16:12.840 Now coming up, Ramp CEO Eric Lyman joins us to 0:16:12.880 --> 0:16:17.720 discuss the company's latest acquisition and an expansion into Europe. 0:16:17.760 --> 0:16:20.280 That conversation is coming up next. This is Bloomberg Tech. 0:16:34.720 --> 0:16:39.040 Fintech startup Ramp is acquiring European payments platform bill Hop. 0:16:39.120 --> 0:16:42.080 The deal will help Ramp expand its footprint, in large 0:16:42.120 --> 0:16:45.800 part because bill hop is licensed in the UK and Sweden. 0:16:46.200 --> 0:16:49.240 To speak with RAMP CEO Eric Lyman and like this 0:16:49.360 --> 0:16:52.040 is interesting, right, I think the best place to start 0:16:52.080 --> 0:16:55.640 is Europe. If you regard UK is Europe and Sweden 0:16:55.640 --> 0:16:58.160 and then Audics. You know, why Europe and why now 0:16:58.200 --> 0:16:59.040 with this Eric. 0:16:59.560 --> 0:17:01.440 And thanks so much for having me on, And it's 0:17:01.480 --> 0:17:03.400 a reason that we're incredibly excited about. 0:17:03.760 --> 0:17:06.480 We're already working with so many of the fastest growing 0:17:06.480 --> 0:17:09.200 companies based in Europe. We think about companies like eleven Labs, 0:17:09.200 --> 0:17:14.120 to great companies started by European founders like Stripe in Versell, 0:17:14.720 --> 0:17:17.080 and I would say Europe is having a moment and 0:17:17.119 --> 0:17:19.000 we want to be there for it and bring so 0:17:19.080 --> 0:17:22.439 much of it be brought to American companies, to the 0:17:22.480 --> 0:17:24.159 companies operating in that region. 0:17:25.000 --> 0:17:25.960 That's an interesting point. 0:17:25.960 --> 0:17:28.359 Like when you posted the news this morning on different 0:17:28.359 --> 0:17:31.680 social platforms, you know, one of the interesting points of 0:17:31.760 --> 0:17:35.240 discussion is what is the competitive landscape like for you 0:17:35.320 --> 0:17:37.920 in Europe and how is it different to in the US? 0:17:38.080 --> 0:17:40.480 Like in America? And correct me if I'm wrong, but 0:17:40.520 --> 0:17:42.480 you go up against kind of the big banks. Is 0:17:42.520 --> 0:17:45.360 that the same in Europe or is it a different 0:17:46.000 --> 0:17:46.680 industry there? 0:17:47.200 --> 0:17:50.000 In many ways, it's very consistent, I would say, whether 0:17:50.000 --> 0:17:52.679 it's the US or even in Europe. Classically, if you 0:17:52.720 --> 0:17:54.440 were a bank you were able to move money, and 0:17:54.480 --> 0:17:58.000 if you weren't, you could sell weird after market software 0:17:58.040 --> 0:18:00.679 to do your expenses or pay your bills or things 0:18:00.720 --> 0:18:03.359 like that. And the result was probably what most people 0:18:03.400 --> 0:18:05.639 still feel of. You know, one hour a month, you 0:18:05.680 --> 0:18:10.080 have the worst hour slowly doing your expenses across different systems. 0:18:10.080 --> 0:18:11.920 And part of what we proved out in the US 0:18:12.000 --> 0:18:12.720 is it doesn't have to. 0:18:12.640 --> 0:18:13.320 Be so hard. 0:18:14.240 --> 0:18:17.240 You know, we've created cards where you tap them and 0:18:17.280 --> 0:18:19.359 your expense report is done for you, your books are 0:18:19.400 --> 0:18:22.639 closed for you. And the result is that companies spend less. 0:18:22.760 --> 0:18:25.240 The average business spends about five percent less, and the 0:18:25.280 --> 0:18:28.600 average business on Ramp grew last year by about sixteen percent, 0:18:28.640 --> 0:18:30.600 which is multiple times the US average. 0:18:30.640 --> 0:18:32.920 And so just as we've brought this to the US, we. 0:18:32.880 --> 0:18:35.879 Want to bring that same innovation and more to the 0:18:35.920 --> 0:18:38.159 great companies being built and operate out of Europe. 0:18:39.800 --> 0:18:42.359 Operate out of Europe. But like Lot's, it's a global world. 0:18:42.480 --> 0:18:44.400 Is a funny thing to say, but you know, many 0:18:44.440 --> 0:18:47.119 of your customs or clients, right they would have a 0:18:47.119 --> 0:18:51.560 footprint operationally in different jurisdictions like the US and Europe. 0:18:51.840 --> 0:18:54.000 And you know, is this kind of therefore about like 0:18:54.040 --> 0:18:56.680 the multinational client that you're trying to go after. 0:18:57.280 --> 0:18:58.040 It's a bit of both. 0:18:58.080 --> 0:19:01.040 I mean, so for today, let's say you're a multinational 0:19:01.440 --> 0:19:05.800 leader like a Shopify or like a CB. You can 0:19:05.840 --> 0:19:09.359 issue cards today locally and make payments all around the 0:19:09.359 --> 0:19:14.439 world in Europe, in Asia, in Latin America, you name it. 0:19:14.600 --> 0:19:15.639 Ramp is able to do that. 0:19:15.720 --> 0:19:18.879 But part of what this acquisition brings is the capabilities 0:19:19.119 --> 0:19:25.080 to serve European headquartered or based companies without operations in 0:19:25.119 --> 0:19:28.200 the United States, and so they're able to benefit from 0:19:28.200 --> 0:19:32.240 that same global infrastructure. But it really allows us to 0:19:32.280 --> 0:19:33.720 reach a much larger market. 0:19:35.040 --> 0:19:38.359 Talking a little bit about RAMP the company, the startup 0:19:38.800 --> 0:19:41.400 and you running it, you have like the who's who 0:19:41.520 --> 0:19:45.679 list of investors. And what I find interesting is not common, 0:19:45.840 --> 0:19:47.840 not unique to you. You know, it's come up a 0:19:47.920 --> 0:19:49.879 lot recently. You sat on a lot of the money 0:19:49.920 --> 0:19:52.720 that you raised for quite a long time. You've gone 0:19:52.720 --> 0:19:56.679 out and done an acquisition. You know what's that like, 0:19:56.800 --> 0:19:59.560 you know, deciding to spend the funds raised. 0:20:00.119 --> 0:20:03.120 It's look, with everything we do, just as we're trying 0:20:03.119 --> 0:20:05.160 to help our customers get more from every dollar an hour, 0:20:05.240 --> 0:20:09.040 we want to too and I think you're exactly right. 0:20:09.600 --> 0:20:11.840 The business has raised more than two billion dollars of 0:20:11.880 --> 0:20:14.480 equity capital, the vast, vast majority of it is still 0:20:14.480 --> 0:20:17.720 on balance sheet, and RAMP is even generating cash even 0:20:17.800 --> 0:20:20.000 as we're one of the fastest growing companies in the world. 0:20:20.000 --> 0:20:22.280 Now interesting, would you would you give me a number 0:20:22.320 --> 0:20:24.720 on that, you know, any sort of financial metric on 0:20:24.960 --> 0:20:26.320 the health of how it's going. 0:20:26.920 --> 0:20:29.680 You know, I would say this, We've had four straight 0:20:29.720 --> 0:20:34.320 quarters of accelerating growth. The businesses call it doubling every year, 0:20:34.400 --> 0:20:37.760 which is really an outlier. And last year, I believe 0:20:37.800 --> 0:20:40.719 together we shared that last summer we passed more than 0:20:40.720 --> 0:20:44.439 a billion dollars a year in revenue and US dollars, 0:20:44.480 --> 0:20:47.119 and so we've seen that growth rate even accelerate. 0:20:47.640 --> 0:20:49.639 So it's quite unique. 0:20:51.680 --> 0:20:55.240 You run a tight ship and you know you're trying 0:20:55.280 --> 0:20:58.479 to grow RAMP, and I really appreciate you know, sharing 0:20:58.680 --> 0:21:00.280 the dates are on that point. 0:21:00.640 --> 0:21:02.040 The landscape's very interesting. 0:21:02.119 --> 0:21:06.320 Like Brex selling to Capital One as an example, over 0:21:06.359 --> 0:21:08.920 many years on the show, the guys of Brex would 0:21:08.920 --> 0:21:11.000 never have said that that would be the case. How 0:21:11.000 --> 0:21:14.520 do you feel about ramps independence, you know, long term 0:21:14.640 --> 0:21:18.280 and where it fits in a big sea of large 0:21:18.280 --> 0:21:19.520 financial players. 0:21:20.200 --> 0:21:23.160 I think it's a really special thing. If you talk 0:21:23.240 --> 0:21:25.400 to let's say a finance leader of a company, let's 0:21:25.400 --> 0:21:28.199