Speaker 1: From Mahart.
Speaker 2: We're Innovation of Money and Power Collie in Silicon Valley, NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 3: I'm Caroline Heind at Bloomberg's world headquarters in New York.
Speaker 4: Ed Ludlow here in San Francisco. This is Bloomberg Technology.
Speaker 3: Coming up this hour the AI hypercycle.
Speaker 5: It's helping TSMC, the company reporting better than expected sales
Speaker 5: on that boom in artificial intelligence applications demand. But can
Speaker 5: it support the second half? We break down the numbers, plus.
Speaker 4: The fate of microsoft sixty nine billion dollar takeover of
Speaker 4: Activision Blizzard. It's in the hands of a judge, but
Speaker 4: it was merger arbitrage specialist glued to the core in
Speaker 4: San Francisco, some even paying line sitters to snag a
Speaker 4: seat at high stakes hearing.
Speaker 5: We have the story and Meta's newest social app, Threads
Speaker 5: topping one hundred million users.
Speaker 3: Less than five days.
Speaker 5: Can this hype cycle hold for first TSMC, Let's bring
Speaker 5: in our in house expert and another than bloom Legs,
Speaker 5: Ian King, another brit to add to the mix today.
Speaker 5: And Ian is it because we've seen the stock already
Speaker 5: outperform so much that we're seeing a little bit of
Speaker 5: weakness or is it more that we're worried about the
Speaker 5: second half.
Speaker 1: I mean it's a mixture of both there.
Speaker 6: I mean, the way to look at this performances really well,
Speaker 6: it's not as bad as people thought it might be.
Speaker 1: I mean that there are no runaway.
Speaker 6: Expectations of things getting better here. It's just like, well,
Speaker 6: they kind of did better in a way that we
Speaker 6: may have expected, and things really for the majority of
Speaker 6: their business, which is really the smartphone industry, just still
Speaker 6: doesn't look that good.
Speaker 4: If we simplify the story, TSNC is a contract manufacturer.
Speaker 4: It makes chips for others who design them. The story
Speaker 4: smartphone PC bad it basically.
Speaker 1: Yeah, no, that's absolutely it.
Speaker 6: I mean forty percent of around forty percent of their
Speaker 6: sales are from the smartphone industry, and that's going an
Speaker 6: industry that's going to be down roughly ten percent this year,
Speaker 6: so not not brilliant at all, and that obviously has
Speaker 6: wider implications. On the other side, high performance computing, which
Speaker 6: is PCs, but also the data center.
Speaker 1: And as we've seen, if you've.
Speaker 6: Got people like in video giving you orders, giving you
Speaker 6: orders for very expensive chips and that's a good place
Speaker 6: to be.
Speaker 5: Yeah, it is, and for many the warriors and constraints
Speaker 5: have been on the supply side.
Speaker 3: How much is that t SMC is concerned right now?
Speaker 1: Not so much anymore.
Speaker 6: I mean, I think everybody would like to see, you know,
Speaker 6: a lot more volume. What we're seeing in terms of
Speaker 6: this better than expected performance is really a value story,
Speaker 6: right you know, you're looking at a smartphone chip which
Speaker 6: is thirty forty, you know, thirty four dollars ago compared
Speaker 6: to some of Invideo's chips which are in the thousands. Obviously,
Speaker 6: if you're selling chips that cost the thousands, then your
Speaker 6: margins are really good and that helps your revenue where
Speaker 6: really you want those factories full as well, and that's
Speaker 6: going to get you, you know, your gross margins.
Speaker 4: We've been talking a lot about an AI hype cycle,
Speaker 4: but in Caroline this is interesting. Behind the scenes, Ian
Speaker 4: has been teaching me things which sometimes goes well, sometimes
Speaker 4: does in h one hundred a one hundred. These are
Speaker 4: high power gpups, very specific use case to the training
Speaker 4: and inference side of large language models. You still need
Speaker 4: the memory chips.
Speaker 1: Correct.
Speaker 4: Why explain why being on the same board GPU, CPU
Speaker 4: DRAM is important.
Speaker 6: It's all about data sets, right. The bigger the data set,
Speaker 6: the more parameters, the more information, the better your calculations are,
Speaker 6: the better you can train it, and the better your
Speaker 6: influences down the line. What do you need to handle
Speaker 6: those larger data sets? Better storage and bigger lumps of
Speaker 6: memory that sit next to those processes. So in theory, Micron, SAMs, Heinix,
Speaker 6: all of those other companies should be benefiting from this. Unfortunately,
Speaker 6: smartphones PC's not great.
Speaker 4: Bloombo c and King mister Chip we call him, thank
Speaker 4: you very much. Now, coming up, what the fate of
Speaker 4: the Microsoft Activision deal in the video game space has
Speaker 4: in store for that industry at large. We're going to
Speaker 4: discuss all that with Convoy Ventures Josh Chapman, a VC
Speaker 4: whose singular focus is the video games industry. Speaking of
Speaker 4: take a look at shares of both Microsoft and Activision.
Speaker 4: We expect imminently the judge to decide an outcome in
Speaker 4: the FTC hearing or trial for a temporary block on
Speaker 4: that deal. Activision off half a percentage point, a soft
Speaker 4: proxy for the direction of travel where investors see this going.
Speaker 4: But as we've discussed Microsoft down two point six percent,
Speaker 4: really big points drag on the nasat one hundred. This
Speaker 4: is Bloombog Technology. The Microsoft Activision deal is the biggest
Speaker 4: video gaming and tech deal ever, and it's pretty important
Speaker 4: for the arbitrage community too. Portfolio managers, analysts, and specialized
Speaker 4: brokers who bet on whether mergers will go through flew
Speaker 4: in from all over the country to sit in on
Speaker 4: the hearing over Microsoft's takeover deal here in San Francisco.
Speaker 4: Bloomberg's Maltin Nayak is here for more. So you've spent
Speaker 4: days and days in that court room.
Speaker 3: It was a five day hearing, yes.
Speaker 4: Alongside some suited and booted individuals. Who are they and
Speaker 4: why they're there?
Speaker 7: So, you know, I was interested to see some linstitters
Speaker 7: and then I noticed that they made way for folks
Speaker 7: in suits and formal clothes and they really stood out
Speaker 7: in San Francisco. So I was wondering, you know, who
Speaker 7: they were, And it turns out that they were merger
Speaker 7: arbitragers and analysts, you know who were there to just
Speaker 7: see what was going on, and they were taking notes,
Speaker 7: you know, feverishly and keeping a very close eye on,
Speaker 7: you know, all the little grimaces and and sort of
Speaker 7: the body language of the judge.
Speaker 5: New Yorkers be busted and go to herself in your suits.
Speaker 5: Malthe what's interesting is, of course they're trying to discern
Speaker 5: any frowns, any facial movements, basically how this court case
Speaker 5: is going. From your writing, it seems that perhaps not
Speaker 5: to or the FDC's advantage.
Speaker 7: It definitely seems like from the last round of questioning
Speaker 7: by the judge in the last day, she really grilled
Speaker 7: the FTC and asked for a lot of evidence that
Speaker 7: wasn't really produced in court. So it definitely seems like
Speaker 7: right now the companies have the upper hand. But you
Speaker 7: never know with judges, some of them, you know, they
Speaker 7: may ask a lot of questions in court, but they
Speaker 7: won't go very far in terms of taking drastic steps
Speaker 7: like blocking a deal. So we'll have to see how
Speaker 7: it all plays out. But definitely the sentiment now is
Speaker 7: among the ubtraged community even that perhaps the companies right
Speaker 7: now things are looking.
Speaker 3: Good for them.
Speaker 4: So there are some things we need to consider about
Speaker 4: outcomes and scenarios if this goes in Microsoft and acts
Speaker 4: visions favor. There is a deadline on the deal. We've
Speaker 4: got to think about that. The UK has a completely
Speaker 4: separate regulatory process going bring us up to speed on
Speaker 4: what might happen next.
Speaker 7: So we have this July eighteen deadline that's looming and
Speaker 7: the companies have to move quickly to close the deal.
Speaker 7: So everyone is waiting for this ruling to come down
Speaker 7: from the judge. That will sort of be the first
Speaker 7: round in the fight with the FTC, which is trying
Speaker 7: to temporarily block its deal. Block the deal right now.
Speaker 7: So also UK regulators have said that this deal won't
Speaker 7: you know, have said that this deal can't go through.
Speaker 7: So we have Microsoft which is appealed that decision. We'll
Speaker 7: have to see what happens in terms of how they
Speaker 7: plan to close the deal around that. There could be
Speaker 7: a scenario where they just decide to go ahead and
Speaker 7: close the deal, but you know, keep the board the
Speaker 7: entity separate for a while.
Speaker 3: Perhaps they could do.
Speaker 7: That globally or only in the UK. So we'll have
Speaker 7: to see how that works out in terms of how
Speaker 7: you know, they work around the UK decision and sort
Speaker 7: of the appeals process around that.
Speaker 5: July eighteenth clock is ticking. Mauthy Nayak, thank you so
Speaker 5: much for bringing us, well the legal expertise, what's happening
Speaker 5: in the courtroom, let's look at how it affects the ecosystem.
Speaker 5: When please to welcome Josh Chapman, managing partner at Convoy
Speaker 5: It's and Denver based VC firm investing in all things gaming. Josh,
Speaker 5: great to have you back on. And does this affect
Speaker 5: the ecosystem?
Speaker 3: If it doesn't go through, it does affect the ecosystem.
Speaker 8: So right now there's about forty five billion that's sitting
Speaker 8: in cash on the gaming corporates, and then secondarily there's
Speaker 8: about one hundred and seventy five billion that's sitting on
Speaker 8: the balance sheets of tech companies that have gaming divisions,
Speaker 8: such as Meta or Microsoft. So this ruling certainly does
Speaker 8: have quite an impact on what's going to happen next
Speaker 8: around vertical integration and m and A in the gaming industry.
Speaker 5: And of course ed the argument, for example in the
Speaker 5: UK has been about the cloud element is gaming in particular.
Speaker 4: Yeah, And what's so interesting is when I had Bobby
Speaker 4: Kotik on the show a few weeks ago, he said,
Speaker 4: this isn't anything to do with cloud. It's a tiny market.
Speaker 4: We're not there yet. We write time and again Josh
Speaker 4: and all blame bag news stories that this deal will
Speaker 4: reshape the landscape for video games as an industry.
Speaker 8: Does it in part, It doesn't reshape it in the
Speaker 8: sense of sort of upending the entire console market. If anything,
Speaker 8: this is a continuation of very competitive and healthy competitive markets.
Speaker 9: Right.
Speaker 8: I personally, I'm on the side of I don't believe
Speaker 8: that this acquisition is anti competitive, and so from a
Speaker 8: cloud gaming perspective, Microsoft actually is the perfect cloud infrastructure
Speaker 8: platform to build an entirely new market. In addition to
Speaker 8: not only cloud gaming seeing more competition, and you also
Speaker 8: see the rise of more competition in the mobile market
Speaker 8: the Xbox game Pass mobile store that they want to launch.
Speaker 8: So this adds a ton of competition already to the industry,
Speaker 8: and so it certainly, you know, they could actually be
Speaker 8: responsible for creating an entire cloud gaming market.
Speaker 4: When you think about some of the compromises offering Call
Speaker 4: of Duty on other platforms as an example, what kind
Speaker 4: of disruption does that give the industry? Because it changes
Speaker 4: how players have historically accessed those games. There's a lot
Speaker 4: of loyalty, right you're either PlayStation, Xbox, you're a PC gamer,
Speaker 4: does that mess things up a bit?
Speaker 1: I don't think it messes it up.
Speaker 8: If anything, I think it actually keeps the plane field
Speaker 8: across gaming, specifically with Call of Duty, which is really
Speaker 8: the number one topic right now. Right now, Call of
Speaker 8: Duty is played by about a million people on PlayStation,
Speaker 8: So from an economic incentive perspective, Xbox has no economic
Speaker 8: incentive to remove that game from Sony, and so Sony
Speaker 8: wants Call of Dude to succeed, and so does Microsoft
Speaker 8: and definitely obviously the activision Blizzard. So when it comes
Speaker 8: to what's next, I think that you could see the
Speaker 8: rise of cloud gaming being a sort of more affordable
Speaker 8: way for people to gain which would be great for
Speaker 8: people who don't want to buy, you know, and invest
Speaker 8: five hundred to fifteen hundred dollars into an Xbox or
Speaker 8: the latest PlayStation. So I think this is a netwind
Speaker 8: for the consumer. I think over time you're going to
Speaker 8: see increasingly more cross platform games like Fortnite, like Call
Speaker 8: of Duty, and I think that that will continue and
Speaker 8: gaming is going to thrive under the approval of this acquisition.
Speaker 5: Okay, Josh, if it doesn't get approved, how does that
Speaker 5: change your own investment thesis?
Speaker 3: Do you hold back in terms of writing checks At
Speaker 3: the moment.
Speaker 8: We wouldn't hold back, So we focus on seeds series
Speaker 8: of investing, writing one to five million dollar checks primarily
Speaker 8: into technologies, platforms, and infrastructure of the gaming industry. So
Speaker 8: we will continue investing in at early stage, which is
Speaker 8: proveing to be quite vibrant right now. But from an
Speaker 8: m and a landscape for our companies once they get
Speaker 8: to later stages that is actually where this could have
Speaker 8: an impact. Is are vertical integrations and mergers and acquisitions
Speaker 8: going to be approved? And I think, as I mentioned earlier,
Speaker 8: with some of the cash that's out there waiting to
Speaker 8: acquire great companies, they might be more hesitant because of
Speaker 8: regulatory concerns versus pure economic deal making.
Speaker 4: Josh, this is the first opportunity I've had to ask
Speaker 4: you about Apple Vision pro and gaming. What do you
Speaker 4: make of it?
Speaker 8: I think we're a long way off from the vision
Speaker 8: that we saw pitched. I think that it is very cool.
Speaker 8: This is going to be great for very solo experiences.
Speaker 8: But I view this as sort of one of the
Speaker 8: just like the first Oculis that came out. If you
Speaker 8: remember that ed everyone was very excited about it, but
Speaker 8: true adoption didn't happen until five six, eight years later,
Speaker 8: so I think that the augmented reality world is coming
Speaker 8: and will absolutely be here. We actually got excited about
Speaker 8: one of the other announcements they made where they are
Speaker 8: actually launching a gaming operating system to turn their PC
Speaker 8: industry with the Mac into a gaming platform. That actually
Speaker 8: kind of went under the radar but was one of
Speaker 8: the most exciting things you were watching is that they're
Speaker 8: opening up the ability to run high performing games on
Speaker 8: top of Max. That will be much more impactful. I
Speaker 8: think in four or five six years the Vision pro
Speaker 8: will enter certainly a more affordable price entry point for
Speaker 8: the consumer. But like many things, this is about wow
Speaker 8: now and then leader CEMTS Adoption.
Speaker 4: Josh Chapman, managing partner at Convoy also talking all things Activision, Microsoft,
Speaker 4: and we are expecting any day now the judge to
Speaker 4: make a decision in that FTC pause request time for
Speaker 4: talking tech First up and ton Ali Barbara are paying
Speaker 4: the price for Jackmar's clash with the Chinese government. On Friday,
Speaker 4: Beijing announced a nearly one billion dollar fine four ANC Group,
Speaker 4: but it's signaled an end to a regulatory crackdown. Now,
Speaker 4: Jack Mars, Ali Barba and out Group have collectively lost
Speaker 4: eight hundred and fifty billion dollars in value since twenty
Speaker 4: with Ali Barber's market value off by about six hundred
Speaker 4: and twenty billion from its peak, according to data compiled
Speaker 4: by Bloomberg. And Foxcott has determined it will not move
Speaker 4: forward on a semiconductor joint venture with India's the Dana.
Speaker 4: Fox Conn said the company aims at exploring more diverse
Speaker 4: development opportunities and that the company is working to remove
Speaker 4: the fox Conn name from what is now a fully
Speaker 4: owned entity of the Danta. Plus. Amazon's annual Prime Day
Speaker 4: isn't as popular as it used to be in the
Speaker 4: past four years. The stock's actually fallen in the week
Speaker 4: of the two dal day sale as investors' focus has
Speaker 4: shifted to aws It's cloud computing business. One to watch
Speaker 4: Carol it.
Speaker 5: Is and let's stick on how Amazon is clearly a
Speaker 5: company that's been embracing the world of AI like everything,
Speaker 5: but also we'll slowly been trying to embrace healthcare offerings too.
Speaker 3: We want to talk about.
Speaker 5: That insect a little bit more, particularly as we recently
Speaker 5: saw in Connecticut, consumers getting more control over how businesses
Speaker 5: treat information about their health and data, particularly for those
Speaker 5: aged under eighteen. Lawmakers added the new LO for example,
Speaker 5: to the Connecticut Data Privacy Act, which to affect July.
Speaker 5: The first joining us now about insect AI and healthcare
Speaker 5: is an expert in the field.
Speaker 3: When it's Sony.
Speaker 5: SUKEAI founder and CEO, you're really trying to basically give
Speaker 5: advantages to clinicians, in particular AI helping streamline their tasks.
Speaker 5: How much has data and privacy been one that you've had.
Speaker 4: To navigate significant?
Speaker 10: I mean, you know, to be honest, the biggest public
Speaker 10: health crisis in this country that few people talk about
Speaker 10: is the fact that clinicians are burning out. I would
Speaker 10: say eighty eight percent of all clinicians, by some recent
Speaker 10: study don't recommend their own profession to their kids anymore.
Speaker 10: For every hour of clinical work you do, you spend
Speaker 10: two hours doing administrative work.
Speaker 1: So it's super important to.
Speaker 10: Actually figure out how to use AI in healthcare. And
Speaker 10: the first place where you will start is probably an
Speaker 10: automating clinician workflows. If you're going to do that, then
Speaker 10: privacy data, how do you actually retain it and take
Speaker 10: care of it becomes paramount.
Speaker 4: We are learning on blibag technology and we have been
Speaker 4: for a year now that when you're building a large
Speaker 4: language model or foundation model, the quality and volume of
Speaker 4: data is key. So how do you reconcile the need
Speaker 4: for privacy with the need for massive volumes of data
Speaker 4: to develop next generation technology?
Speaker 10: You know, first of all, it's actually important to actually
Speaker 10: talk about what.
Speaker 9: AI really is.
Speaker 1: The truth is here.
Speaker 10: You know, even a dog walking app has AI these days,
Speaker 10: and so it's a little bit of a hype cycle
Speaker 10: that's going on. AI is a very broad term and
Speaker 10: it goes all the way from speech technologies, speech transcription technologies,
Speaker 10: understanding your commands, so intent extractors, large language models is
Speaker 10: just the next generation of language model work that's happened
Speaker 10: in AI. You can actually make a big dent in
Speaker 10: clinical workflows by using all of these in some variety
Speaker 10: of fashions. The truth is that the data in healthcare
Speaker 10: is very discrete and very specific, and so therefore you
Speaker 10: don't need tremendously large bodies of data to be able
Speaker 10: to create that actually works in this way.
Speaker 4: Caroline, I think we have so many founders on this show,
Speaker 4: so many bench cats, lists and we do talk broadly
Speaker 4: about AI. To be fair, we also find vcs that
Speaker 4: are very specifically focused on where they're putting money thematically
Speaker 4: or in a narrow field.
Speaker 5: So right, think about the applications in the legal field,
Speaker 5: we think about your application in the healthcare field, pun it.
Speaker 5: And to that end, have you been taking a lot
Speaker 5: more calls from people wanting to put money to work
Speaker 5: in your own company? I know you raised funds, it's
Speaker 5: a significant round what back in twenty twenty one, but
Speaker 5: have you been looking at adding on in this particular realm?
Speaker 10: Yeah, I mean the right time, that will actually become
Speaker 10: very important, and you know, as you scale the company
Speaker 10: you have to do that. I think the primary question
Speaker 10: to ask is what problem are you really trying to solve?
Speaker 10: First and foremost, we want to make sure that clinicians
Speaker 10: don't have to really focus on these screens and typing
Speaker 10: and checking boxes when they're actually talking.
Speaker 1: To the patient.
Speaker 10: I mean, imagine a world when you walk in and
Speaker 10: you just ask, you know, Suki, which is kind of
Speaker 10: like a SERI for doctors, what's my day like? And
Speaker 10: it tells you here's the next few patients you're coming in, said,
Speaker 10: give me a summary of the next patient, show me
Speaker 10: the chest text ray, summarize the findings for me, and
Speaker 10: then hey, let's just edit it a little bit and
Speaker 10: push it into the underlying system of record well quickly.
Speaker 4: The idea is that Suki does not replace human doctors,
Speaker 4: but it is an assistant, an aid. Yes, mechanically, how
Speaker 4: does that work?
Speaker 10: Well, I mean, you know, imagine having something that's always
Speaker 10: with you everywhere you go, and when you walk into
Speaker 10: an exam room you ask it to give a summary
Speaker 10: of the patient. When you are talking to the patient,
Speaker 10: what about you ask Suki to pay attention and if
Speaker 10: you'll take the doctor, patient and counter and create a
Speaker 10: clinical note out of it. What if you edit it,
Speaker 10: add some orders and then you say, Suki, just submit
Speaker 10: that to the system of record. That is an assistant
Speaker 10: for the doctor. And I think that is the future
Speaker 10: of where healthcare text is going to be going.
Speaker 4: Suk I founder and CEO PUNIT Sony Caroline. This is
Speaker 4: a topic on the show that we are going to
Speaker 4: continue talking about health in artificial intelligence.
Speaker 5: Welcome back to lu Meg Technology. I'm Karine Hide in
Speaker 5: New York and let's get you a quick update on
Speaker 5: the public markets, right now halfway through the trading day,
Speaker 5: and look a little bit more caution here in the
Speaker 5: United States, particularly in big tech look than NASDAK more
Speaker 5: broadly as a benchmark off by some three tenths and percent.
Speaker 3: We've got well a very healthy jobs data that was
Speaker 3: clear from last week.
Speaker 5: Now we look ahead to what the CPI print inflation data.
Speaker 3: Is going to show US.
Speaker 5: And the Federal reserves speak ahead of them going silent
Speaker 5: before they make the latest rate hike decision as many
Speaker 5: are bracing for. I'm looking at the MASCI or Country
Speaker 5: World Index.
Speaker 3: So interestingly Europe.
Speaker 5: Managed to pick itself up after a few days of
Speaker 5: sell off. The macro data really out there showing that
Speaker 5: Europe could do with a little bit more purchasing power.
Speaker 5: On the least on the day, were seeing that the
Speaker 5: Golden Dragon index in China showing actually there was a
Speaker 5: little bit of a lift in Asia trading Chinese stocks
Speaker 5: on the higher side, at least those traded in the
Speaker 5: tech world here in the United States are one point
Speaker 5: two percent. As we understand, the Chinese government in particular
Speaker 5: is going to be showing some support to its property sector.
Speaker 3: But the all.
Speaker 5: Encompassing meaning is that maybe the Chinese economy gets a
Speaker 5: little bit of a boost. I'm looking at the individual
Speaker 5: movers Microsoft on the downside. Look, the Nazak one hundred
Speaker 5: is under scrutiny because the Magnificent seven on which Microsoft
Speaker 5: is one of them, and indeed so is Amazon. Look,
Speaker 5: it's got two heavier waitings towards them. The outperformance of
Speaker 5: those seven stocks means that maybe we get a rebalancing
Speaker 5: coming July the fourteenth. What does that mean for how
Speaker 5: these stocks are traded in the ETF so QQQ For example,
Speaker 5: we're currently trading.
Speaker 3: Down by Amazon.
Speaker 5: We look ahead to of course that all important prime
Speaker 5: data Moorrow tomorrow kickoff and Rivia and I do this
Speaker 5: for you, Ed because I know that you've been all
Speaker 5: over this stock after that exclusive conversation last week.
Speaker 3: Now nine straight days potentially a record run.
Speaker 4: Hi, there's a good stock to watch. Thank you.
Speaker 9: Now.
Speaker 4: Global Data Analytics Analytics Software make a quantexa SO to
Speaker 4: invest two hundred and fifty million US dollars into new
Speaker 4: AI research over the next three years. The firm helps
Speaker 4: to uncover hidden risks and opportunities for financial services businesses.
Speaker 4: Joining us now is CONTEXTA CEO Vishal Marrier from London, Vishaw.
Speaker 4: Is this a case of invest in AI or get
Speaker 4: left behind?
Speaker 11: Great question, Edain, thanks for having me on. I think
Speaker 11: there's a couple of points here. So first and foremost,
Speaker 11: AI machine learning has been in the DNA of context
Speaker 11: since we started it in twenty sixteen, on the way
Speaker 11: we unify data, contextualized data and support those insights for
Speaker 11: our clients to make better trusted decision. Machine learning in
Speaker 11: AI has been through the platform.
Speaker 1: End to end.
Speaker 11: The investments we're doing today and what we've announced this
Speaker 11: morning is to catapult further investment in all things AI
Speaker 11: and machine learning to better serve some of the more
Speaker 11: harder applications when it comes down to regulated markets.
Speaker 5: You are based in London, of course, but also here
Speaker 5: in New York, Boston, Toronto, Malaga, you name it. You're
Speaker 5: across Europe in particular, for shout, Where do you allocate
Speaker 5: some of this money this investment? Is it London or
Speaker 5: else where?
Speaker 1: Great question, Caroline.
Speaker 11: So we are hq'ed here in the UK, and as
Speaker 11: you craigly state, we're in twenty plus cities worldwide and
Speaker 11: you mentioned a few, and from the engineering perspective, our
Speaker 11: hard of our engineering is done here in the UK.
Speaker 11: If that's data engineers, data scientists working with the core platform,
Speaker 11: verticalizing those applications in areas like data management, customer or
Speaker 11: Patient three sixty, areas like KYC and AML. Many of
Speaker 11: those applications are built here in the UK, working closely
Speaker 11: with many of our strategic clients. And those clients, as
Speaker 11: you said, are globally so if they're in the US
Speaker 11: with large banks such as Banking New York and Melon,
Speaker 11: or ensure as companies like Alians Group in Germany, these
Speaker 11: are major clients of context, so that we work very
Speaker 11: closely with base here in the UK.
Speaker 5: I mean, ed we sit here as three Brits. But
Speaker 5: it's notable that the UK has had a rich history
Speaker 5: with AI. We know that DeepMind of course really built
Speaker 5: there and it's something that the UK is trying to
Speaker 5: show what particularly with the US.
Speaker 4: Visit, there's a history of research in the UK. But
Speaker 4: also President by on his visit to UK, I'm told
Speaker 4: that the Prime Minister brought up this kind of cooperation
Speaker 4: fishow between the US and UK. What's your assessment of
Speaker 4: that cooperative work in the field of AI.
Speaker 1: So, I think the field of AI.
Speaker 11: It is an ecosystem coming together when it's to do
Speaker 11: with academia, when it's to do with regulation or government,
Speaker 11: but also the enterprise and obviously as tech providers like Quantexa,
Speaker 11: working in a broader ecosystem is critical for the success
Speaker 11: of AI. But one thing I would also add ed
Speaker 11: and Karen to your point of the visit today of
Speaker 11: the AI regulations and AI standards is really important to
Speaker 11: put in play because one thing that's critical here is
Speaker 11: AI is here to stay. I studied AI twenty plus
Speaker 11: years ago. This is not necessarily a new technology. It's
Speaker 11: a technology which is at the forefront today. It's in
Speaker 11: primetime today. But ensuring that is treated carefully in a
Speaker 11: trusted and transparent fashion is really critical. And if that's
Speaker 11: any regulation or any standard or any collaboration between governments
Speaker 11: as a key topic, I think is only important for
Speaker 11: organizations to be doing that.
Speaker 4: But I do go back to the point Caroline made
Speaker 4: about your global footprint. When you listen to President Biden
Speaker 4: and you listen to Prime Minister Sunak, who is more
Speaker 4: convincing in the leadership of driving AI forward, where do
Speaker 4: you want to put your money and find your talent
Speaker 4: The UK or the United States.
Speaker 11: Great, great question ed, And I think from a talent perspective,
Speaker 11: we must always put our customers, our clients, at the
Speaker 11: center to everything we do. When I started Context in
Speaker 11: twenty sixteen, it was with that sole mission to ensure
Speaker 11: that we put our clients, if those are large banks,
Speaker 11: government organizations, insurers, or healthcare organizations, putting them at the
Speaker 11: center to our innovation is critical. So working closely with
Speaker 11: our clients, working closely with academia obviously a critical part
Speaker 11: to any CEO strategy.
Speaker 1: Who is running a tech company.
Speaker 11: And we've obviously done incredibly well both here in the
Speaker 11: UK as well as in the US and other countries
Speaker 11: in recruiting some of the best talent. You know, we
Speaker 11: work very closely with a number of universities to ensure
Speaker 11: we're working with some of the hardest working with some
Speaker 11: of the hardest problems with those universities, and looking at
Speaker 11: the talent from that perspective too.
Speaker 5: Vishaw, what's interesting, of course, when you're in the intersection
Speaker 5: of finance and AI and tech, you're going to be
Speaker 5: very used to trying to navigate regulation when it comes
Speaker 5: to financial institutions. What about regulation of AI I mean
Speaker 5: I'm looking at the EU or in Ireland or in
Speaker 5: Amsterdam Brussels, and clearly they're trying to act quickly on
Speaker 5: an AI act.
Speaker 1: Yeah.
Speaker 11: No, absolutely So coming back to my earlier point current, So,
Speaker 11: everything we have done here at CONTEXTA from an AI
Speaker 11: machine learning trans perspective, is fully transparent, fully scalable, and
Speaker 11: most importantly within our platform, we've adopted a wide box
Speaker 11: set of algorithms that are very clear to explain to
Speaker 11: any regulator, to any model risk management department in a
Speaker 11: bank on a how you stitch that data? But more importantly,
Speaker 11: why did you come to an outcome to say this
Speaker 11: person's of interest or this party is not of interest?
Speaker 11: And that is at the common to most of the
Speaker 11: regulations globally, the transparency, the explainability, and the ethical use
Speaker 11: of such data.
Speaker 4: When you're going to make a return on your big
Speaker 4: investment in AI.
Speaker 11: So, just like with many investments, is backed by a
Speaker 11: business case and you know this investment is completely follows
Speaker 11: that path. Now, we obviously just close our Series E
Speaker 11: at the beginning of April, where we raised just over
Speaker 11: one hundred and thirty million at evaluation a one point
Speaker 11: eight billion led by GIC. Now as part of that investment,
Speaker 11: there is an investment case on where we deploy our funds.
Speaker 11: But we will take a long term strategic view on
Speaker 11: this and so am I investors. As I mentioned, AI
Speaker 11: is not just here today and gone tomorrow. AI is
Speaker 11: here and has been here before, and it will stay
Speaker 11: here continually. But it's very important that organizations like Quantexa
Speaker 11: take a much more long term view when it comes
Speaker 11: down to investments and what I'm delighted my clients, my
Speaker 11: partners as well as my investors are all on that
Speaker 11: journey with us to ensure we're making those making that
Speaker 11: impact in the market.
Speaker 5: Michelle Maria, great to have some time with you and
Speaker 5: Texa there based over in London. Meanwhile, coming up, look,
Speaker 5: we're going to be taking the pulse of the crypto
Speaker 5: VC industry.
Speaker 3: Remember when we only used to talk about crypto. Now
Speaker 3: it's all talking about AI.
Speaker 5: Where's the intersection in that pitchfook crypto and it's going
Speaker 5: to be with us of course, I'm at they and
Speaker 5: what are you watching?
Speaker 4: Yeah, yeah, snowflake, I'm looking to shares the snowflake down
Speaker 4: one point six six percent another name kind of at
Speaker 4: the intersection of Cloud Enterprise and AI not a lot
Speaker 4: in the news flow, but I would note that Frank
Speaker 4: sloopmanco and chairman did put a regulatory filing in Friday
Speaker 4: night to exis size options and some insider selling going
Speaker 4: on in that name, So that could be one of
Speaker 4: the factors impacting the stock to the downside. We keep looking.
Speaker 4: This is Bloomberg Technology. Global VC funding into crypto in
Speaker 4: the second quarter of twenty twenty three was the lowest
Speaker 4: amount since twenty twenty. Meanwhile, AI is the green shoe.
Speaker 4: Every single VC here on Bloomberg Technology is talking about
Speaker 4: let's bringing bloomberg'snnah Mila. Who's been going off over the data?
Speaker 4: This is data from pitchbook largely. What does it tell us?
Speaker 12: Yeah, so we've seen a continued steep decline in crypto
Speaker 12: venture funding, especially compared to last year. So it's the
Speaker 12: worst quarter.
Speaker 3: Since twenty twenty.
Speaker 12: We thought maybe it had bottomed out, that you know,
Speaker 12: funding would pop back up.
Speaker 3: That has not happened.
Speaker 12: So, you know, I think vcs are looking for a
Speaker 12: way to reignite interests in the crypto industry, and founders
Speaker 12: are scrambling to get you know funding when they.
Speaker 5: Can okay, Hanna, So where's the legit intersection of AI
Speaker 5: and crypto?
Speaker 12: You know, it's hard to tell because it's so nascent.
Speaker 12: You know, you have people arguing that crypto and blockchain
Speaker 12: can bring more decentralization to AI, which is really dominated
Speaker 12: by a few companies right now. But the companies that
Speaker 12: are building in the intersection of crypto and AI and
Speaker 12: AI are still very nason They're still working on stuff,
Speaker 12: they haven't released anything yet, so it's kind of hard
Speaker 12: to tell whether this will carry through and whether crypto
Speaker 12: and AI can go hand in hand.
Speaker 4: I want to show the data just for the United
Speaker 4: States focused on AI because when we consider global investments
Speaker 4: the US and what we're seeing on our screen now,
Speaker 4: thirty one billion dollars a year today is most of
Speaker 4: global spend.
Speaker 12: Yeah, So with AI, you know people are interested in
Speaker 12: invest thing in it that there are these deals that
Speaker 12: are happening in the space. You know, there was a
Speaker 12: slight declined quarter over quarter, but overall, you know, things
Speaker 12: are happening here in the space.
Speaker 5: How do you talk about how the startups themselves are
Speaker 5: pivoting trying to sort of show that prowess in the
Speaker 5: intersection of AI and crypto. But what about the dedicated
Speaker 5: funds to crypto investing the vcs, how are they allocating
Speaker 5: at the moment because a lot of them have a
Speaker 5: lot of overhang from money lost in previous rounds or thought.
Speaker 12: Yeah, so a lot of these crypto venture funds they
Speaker 12: have mandates that require them to back the space, so
Speaker 12: they're obviously still going to be deploying capital and they're
Speaker 12: looking for ways, you know, to spend their money wisely,
Speaker 12: and some of them are being drawn to this intersection
Speaker 12: of crypto and AI and looking at companies like you know,
Speaker 12: Tools for Humanity, which developed world coin, as well as Jensen,
Speaker 12: which is developing a decentralized marketplace based on blockchain for
Speaker 12: compute power world coin.
Speaker 5: If in doubt back some outmen, it seems to be
Speaker 5: the takeaway, and I thank you very much. Indeed really
Speaker 5: great to have a perspective to build up to what
Speaker 5: is now an integral conversation with Pitchbooks, cryptoanalyst from it Lay,
Speaker 5: who I'm pleased to say is right here in New York.
Speaker 3: And but we were hearing there about.
Speaker 5: What a dial quarter it was for crypto VC and
Speaker 5: for crypto allocations.
Speaker 3: Does any of it look better going into Q three.
Speaker 13: Do you think honestly, we think it will look better.
Speaker 13: Like Hannah just mentioned, a lot of these crypto VC funds,
Speaker 13: they have to deploy capitals into space. Part of the
Speaker 13: slowdown is that the diligence cycles just slow down. So
Speaker 13: you look at in twenty twenty one and twenty twenty two,
Speaker 13: some of those deals were happening in a one week
Speaker 13: or two week time frame.
Speaker 9: And that i e.
Speaker 4: Not much utilis exactly right.
Speaker 13: And so now investors are taking the time meeting the teams,
Speaker 13: meeting the founders, understanding the business model, understand their product,
Speaker 13: product market fit, and then they're going to deploy capital.
Speaker 13: What we're looking at and talking about those crypto venture
Speaker 13: funds last year alone, there's twenty five billion dollars raised
Speaker 13: for crypton EATA funds. That tabital has to be deployed
Speaker 13: over the next two to four years year. So investors
Speaker 13: have some time because they just raised those fresh funds
Speaker 13: in twenty twenty two. But we think that as investors
Speaker 13: start to get comfortable with the different business models, the
Speaker 13: different opportunities in the crypto space, they're going to start
Speaker 13: to deploying more and then our outlook at the beginning
Speaker 13: of the years that we're going to see an uptick
Speaker 13: in the second half of twenty twenty three, and it's
Speaker 13: going to bottom up around sometime in the summer. And
Speaker 13: we're seeing that right now.
Speaker 4: It's so interesting to compare and contrast what's happening right
Speaker 4: now in AI and what happened in crypto. Ashton Kutcher
Speaker 4: was on Bloomberg Technology a few weeks ago saying he
Speaker 4: raised his two hundred and thirty two million dollar fund
Speaker 4: in just five weeks. And we're basically talking about crypto
Speaker 4: so broadly, just like we talk about AI broadly. Are
Speaker 4: there any bright spots, specific areas in the underlying technology
Speaker 4: or marketplaces where there is still activity for crypto.
Speaker 13: Yeah, there are a few areas that investors are still
Speaker 13: really excited about and deploying capital in right now. And
Speaker 13: it's really three categories. Infrastructure, so you look at the
Speaker 13: underlying blockchains and the scaling solutions to make the blockchains
Speaker 13: faster and having higher throughput, the service providers.
Speaker 9: So you think about a lot of.
Speaker 13: Institutional traditional financial institutions are still moving into.
Speaker 9: The cryptal space.
Speaker 13: And we just heard about black Rock and Fidelity refiling
Speaker 13: for the Bitcoin spot ETF. So there's a lot of
Speaker 13: institutional interests. So what are the technologies and software and
Speaker 13: services you can provide to help institutions move into the space.
Speaker 13: Custodiums is one type of technology, or prime brokerage or
Speaker 13: trading services, anything that can help them better facilitate their
Speaker 13: interests into the space and providing service to their customers.
Speaker 13: And the last area is what we call when we
Speaker 13: just wrote research on this space, it's called decentralized physical
Speaker 13: infrastructure networks. I know, it's a really long term. We
Speaker 13: call it deep in, and it's any kind of real
Speaker 13: world infrastructure that can facilitate token to be able to
Speaker 13: provide services. So you can think about decentralized servers, mobile networks,
Speaker 13: or decentralized servers.
Speaker 9: Hannah just mentioned Jensen.
Speaker 13: They do a decentralized computing for training AI models. That's
Speaker 13: just an example, and they can use tokens to have
Speaker 13: anyone that has a computer can help facilitate and contribute
Speaker 13: power and compute to that.
Speaker 5: Network, kind of like an AI version of file coin exactly.
Speaker 9: That's exactly what they're doing.
Speaker 5: I'm interested in where these things are getting built because
Speaker 5: crypto is decentralized. It's also global, and there was a
Speaker 5: bit of sort of regulatory arbitrage going on at one point.
Speaker 5: Is that still happening as some of the founders moving
Speaker 5: off going out of the US.
Speaker 13: Honestly, we that is the narrative. We just don't see
Speaker 13: that happening. We think that the talent largely is still
Speaker 13: here in the US. A lot of the founders are
Speaker 13: still building here and they're recruiting talent here in the US.
Speaker 13: You know, a lot of folks talk about the strict
Speaker 13: regulations that is happening right now with you know, the sec, CFTC,
Speaker 13: the FED all coming after crypto, that I think is
Speaker 13: not going to push founders to move abroad.
Speaker 9: And I give you a quick example.
Speaker 13: We know in Europe typically their regulations are a lot
Speaker 13: more progressive. You know, even with fintech. You let a
Speaker 13: PSC two and open banking that happened a few years ago.
Speaker 13: A lot of folks that that fintech innovation is going
Speaker 13: to move to Europe.
Speaker 9: We never saw that happen.
Speaker 13: Still a lot of the fintech innovations happening here in
Speaker 13: the US, so we expect the same for crypto.
Speaker 5: Now we have an end so all our talk of
Speaker 5: the founders leaving not happening.
Speaker 4: But things can move so quickly, right, Yeah, I guess
Speaker 4: the question I have, Robert, is when's the rebound for
Speaker 4: crypto come? What moves the needle?
Speaker 13: Yeah, it's going to be mostly the funding, Okay, because
Speaker 13: scarps are now they need funding to grow and scale.
Speaker 9: So what point will investors get comfortable?
Speaker 13: And our call still holds is that it's going to
Speaker 13: be sometime towards the end of this year. So as
Speaker 13: what investors are looking at, what projects are building the
Speaker 13: strongest products out there, and what are their under line
Speaker 13: business models and how are they getting product market fit?
Speaker 13: And then the ones that are going to get that
Speaker 13: are going to get the funding. And we're going to
Speaker 13: expect to see that towards the end of this year.
Speaker 13: So you know, the rebound's hard to say, but we're
Speaker 13: hoping sometime next year, early twenty twenty five, we're going
Speaker 13: to start seeing a lot more capital and more founders
Speaker 13: coming into space to build.
Speaker 4: Pagebild crypto analyst Robert lay with the banqward looking data
Speaker 4: but also the forward looking forcust Thank you very much.
Speaker 3: Time now we're going viral.
Speaker 5: It still is one hundred million people are saying it's Threads,
Speaker 5: It's going viral.
Speaker 3: There has been.
Speaker 5: Much hype over metas newly launched social media app.
Speaker 3: That has of course Twitter.
Speaker 5: I'm pretty high alert analysts over at ever CORESI estimate
Speaker 5: that Threads could actually need two hundred million daily active
Speaker 5: users and generate about eight billion dollars in revenue by
Speaker 5: twenty twenty five. Now, no eight billion per year for
Speaker 5: the next couple of years.
Speaker 4: Ed.
Speaker 3: That is about a drop in the ocean of.
Speaker 5: The one hundred and fifty billion in revenue that Meta
Speaker 5: as a parent company brings in.
Speaker 3: But okay, it's more than Twitter was making.
Speaker 4: But how do we reconcile that it will ever make money?
Speaker 4: Because if you think about it, just in allow producers,
Speaker 4: just as stus, when does it become Twitter? The early
Speaker 4: engagements I've had on Threads is everyone saying, we like
Speaker 4: that there's no ads, we like that it's just text,
Speaker 4: simple platform.
Speaker 5: I'm sure, but we all said that about all of
Speaker 5: the previous and then we slowly but surely realize that
Speaker 5: that is the quid pro quo. You use it, you
Speaker 5: of course have to pay for it in some way.
Speaker 3: It can't just be free.
Speaker 5: But I think what's more for a stumbling rot for
Speaker 5: me is the decentralized element of it. We know that
Speaker 5: it's not part of the feederverse quite here yet, but
Speaker 5: eventually it will be. And what does that mean for
Speaker 5: putting advertising within well, the use on its own servers
Speaker 5: and the like, and what does it mean when it
Speaker 5: becomes more distributed?
Speaker 4: And Elon Musk has kind of leaned into that in
Speaker 4: his jabs on Twitter over the weekend, some of which
Speaker 4: he directed at Mark Zuckerberg. The complaint that I that
Speaker 4: I hear people thread me about is also discoverability. How
Speaker 4: do you find communities and groups that you want to
Speaker 4: share a conversation with? But it's a simple platform, and
Speaker 4: I love that We're already talking about how much money
Speaker 4: is this going to make? Well, according to Evercore eight
Speaker 4: billion by twenty twenty five.
Speaker 5: Nice, I mean that is what financial journalists do. It
Speaker 5: all comes back to the money, isn't it. But to
Speaker 5: that point, it's also still a baby, and they kind
Speaker 5: of probably slightly rushed it coming to the fall because
Speaker 5: they were capitalizing on kind of difficult moment for Twitter.
Speaker 3: They will start to have hashtags, I'm sure.
Speaker 5: Who knows when they have a competitor to spaces and
Speaker 5: we can do go cross platform and that one too.
Speaker 4: It's just a baby. I won't do the voice, but
Speaker 4: it's grown fast, one hundred million uses in a week.
Speaker 5: What can you say helps when they're just easily porting
Speaker 5: over from Instagram. I meanwhile, that does it for this
Speaker 5: edition of Really Bag Technology. And look, John Felton, he's
Speaker 5: going to be joining Amazon SVP Worldwide Operation, going to
Speaker 5: be talking Amazon's shopping extravaganza.
Speaker 3: It's prim Day. You don't want to miss that conversation.
Speaker 4: Yeah, And if you missed any of today or you
Speaker 4: want to recap, don't forget about the podcast. There's a
Speaker 4: lot going on in every show, from AI to what's
Speaker 4: happening in hardware and video games. So the podcast on Apple, Spotify, iHeart,
Speaker 4: and of course on our Bloomberg platforms. We have a
Speaker 4: massive week in the world of technology coming up from
Speaker 4: here in San Francisco and out in New York with Caroline.
Speaker 4: This is Bloomberg Technology