Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is live
Speaker 1: from coast to coast with Caroline Hide in New York
Speaker 1: and Vla low in sentrances.
Speaker 2: Go, this is Bloomberg Tech coming up hot week for IPOs.
Speaker 2: After fintech company Klana yesterday, we look today to blockchain
Speaker 2: lender Figure will be joined by its executive chairman.
Speaker 3: Plus, Apple sentiment sours again with more analyst downgrades, the
Speaker 3: lowest of five years.
Speaker 4: We talk the stock price and iPhone price, and.
Speaker 2: We speak with box CEO Aaron Levy, is the company
Speaker 2: of bails new AI products at its annual Boxworks conference.
Speaker 3: Let's check in on these markets because as we anticipate
Speaker 3: in conversation on AI with Aaron Levy, we think about
Speaker 3: how much AI stocks are supporting this market rally. We
Speaker 3: are up for a seventh straight day on the Nazak
Speaker 3: one hundred. We're in a new record high five tenths
Speaker 3: of a percent. But you get underneath the index ed
Speaker 3: and show us the individual's stocks to look at.
Speaker 2: Yeah, some of the technology stories today are stock stories.
Speaker 2: So mikecron got its price target raised at City. There
Speaker 2: are other names in the streets saying Micron has earning
Speaker 2: September twenty third. We talk a little bit about Oracle
Speaker 2: and the momentum in the hyperscale as well memory Chip's
Speaker 2: key to the data center. They see upside for that
Speaker 2: Oracle had its best day since nineteen ninety two yesterday.
Speaker 2: It is now giving back some of those gains down
Speaker 2: a little bit. And then there's Klaner, a company that
Speaker 2: iPod yesterday at forty.
Speaker 5: Opened at fifty two.
Speaker 2: I think I'm right in saying session high fifty seven
Speaker 2: closed around forty five. Where we at we're at forty
Speaker 2: five there or thereabouts. There's a lot more to discuss
Speaker 2: on that IPO momentum, though correct.
Speaker 4: No, it isn't this a perfect person to do it with.
Speaker 3: Bloomberg's Aishagani joins us you cover Klan I have done
Speaker 3: for years, spoken a lot with the AI version of
Speaker 3: the CEO and the CEO himself.
Speaker 4: I share.
Speaker 3: I'm just interested as to what you deem as the
Speaker 3: success story of yesterday's listing in the performance today.
Speaker 6: Absolutely just to set the scene. With Sequoia, who have
Speaker 6: of course invested in Kana for a long time, they
Speaker 6: made a two point seven billion dollar windfall and over
Speaker 6: the years, they had invested around five hundred million, which
Speaker 6: kind of indicates that when Karna popped yesterday, a lot
Speaker 6: of investors were quite happy. Others had held on to
Speaker 6: their onto their shares while others sold so it was
Speaker 6: extremely successful day, but we yet to see how things
Speaker 6: will pan out.
Speaker 2: One of the things that we discussed with the company
Speaker 2: CEO yesterday on the program was the idea that this
Speaker 2: isn't just a buy now, pay later name. They want
Speaker 2: to be this kind of everything app and when a
Speaker 2: company IPOs, it's not always about raising money, like you
Speaker 2: just pointed out, it's about getting the name out there.
Speaker 2: Do you get a sense I show that that story
Speaker 2: is resonating that Klana is so much more than buy now,
Speaker 2: pay later.
Speaker 6: I'm sure as many of your viewers would have seen
Speaker 6: yesterday across Ford Street and of Macy's, they would have
Speaker 6: seen the Kana banner draping many of New York's hotspots.
Speaker 6: But I suppose what's been fascinating about their story is
Speaker 6: this is a European fintech and it is now global.
Speaker 6: Their largest market is in the US, and a lot
Speaker 6: of people will be quite familiar with Klana at checkout
Speaker 6: when they're shopping, and of course now Klana is going
Speaker 6: into banking and that's basically the next big push in
Speaker 6: order to keep those customers.
Speaker 4: On the app for longer.
Speaker 3: Look, it is a success story for European VC, for
Speaker 3: European tech, and all eyes on Revolute now the UK
Speaker 3: success story, it has a much bigger evaluation in the
Speaker 3: private market.
Speaker 6: I'm glad you raised Revolue.
Speaker 4: Last week.
Speaker 6: I was reporting that Revlue is now engaging its staff
Speaker 6: in a semi twenty five billion dollar share sale and
Speaker 6: which is absolutely staggering when you think about it. But
Speaker 6: of course Klana has been private for twenty years now,
Speaker 6: so it's an indication of where private firms like Revolute
Speaker 6: and Klana are thinking in terms of next steps. Will
Speaker 6: definitely be eyeing this.
Speaker 7: Of course, Klana.
Speaker 6: Has iPod on the New York Stock Exchange and a
Speaker 6: lot of these firms are still deciding where to go.
Speaker 6: But I'm sure a lots of them will be looking
Speaker 6: at the Klana CEO Sebastian Simikowski and the sort of
Speaker 6: media attention that he had received and also the investor
Speaker 6: sentiment as well, and would be hoping that they could
Speaker 6: capture some of that too Bloomberg.
Speaker 2: Zai Shighani, thank you very much. So let's bring Anna
Speaker 2: Rathburn on broader tech market. She's the CEO and founder
Speaker 2: of wealth management firm Grenadilla Advisory.
Speaker 5: And you heard what I had to say, right.
Speaker 2: You know, it's been several consecutive weeks and months of
Speaker 2: interesting ipo, many of them fintech related. Is there a
Speaker 2: broader signal that you've taken in the investor response to
Speaker 2: those IPOs?
Speaker 8: Anna, Yeah, good morning. I think it's nice to see
Speaker 8: fintech IPOs, and I think it's also nice to see
Speaker 8: tech stories that are not necessarily AI related. These are
Speaker 8: fintech companies that are coming in the line to actually
Speaker 8: directly interact with the consumers. And if we pay attention
Speaker 8: to what the CEO said yesterday, it was really about
Speaker 8: revolutionizing the way people actually fund their purchases. And I
Speaker 8: think some of this is very refreshing. I think we're
Speaker 8: going to have to have a lot of creative ideas
Speaker 8: like that one in order for investors to get excited,
Speaker 8: because right now all the attention seems to be on AI.
Speaker 2: And a specific to Klana is the discussion about going
Speaker 2: public versus staying private, like some of their peers did,
Speaker 2: and we discussed on the program the merits of staying private,
Speaker 2: what it does for some of Clona's peers, like Revolute.
Speaker 2: But on the other side of the table, what kind
Speaker 2: of a signal is it that a company is choosing
Speaker 2: to go public in this environment? What does it tell
Speaker 2: you about the health of public markets for technology in America.
Speaker 8: Yeah, I think it's okay for companies to stay private,
Speaker 8: And frankly, this has been a trend for a very
Speaker 8: long time. This isn't anything new and it's okay because, frankly,
Speaker 8: a lot of the innovation, especially on the AI front,
Speaker 8: that is taking place, it's so new and so experimental
Speaker 8: that if you have those companies ipo too early, we
Speaker 8: may have something like the nineteen nineties tech bubble, where
Speaker 8: you know, the cash flow isn't a steady it's not
Speaker 8: as stable, and then you have a crash, right and
Speaker 8: everything is done on hope. So I actually don't mind companies,
Speaker 8: especially tech companies that are innovating and doing something very new,
Speaker 8: staying private for longer, and then after they have stabilized
Speaker 8: and have they're big enough to enter the io market.
Speaker 8: For the health of the retail investors, especially.
Speaker 3: What's fascinating is going back to the nineties. Yesterday Oracle
Speaker 3: had its biggest chev move in the night sense the nineties,
Speaker 3: and we saw significant value accretion not just for the
Speaker 3: shareholders but the main owner of those shares, who is
Speaker 3: the co founder, Larry Ellison, now the world's wealthiest ana.
Speaker 3: What do you make of the love being shown for
Speaker 3: the companies that can add to the infrastructure build out here?
Speaker 8: Yeah, and this has to do with the things that
Speaker 8: everybody is concerned about, which is a concentration.
Speaker 7: In the S and P five hundred.
Speaker 8: It is made up of mega, mega tech stacks and frankly,
Speaker 8: if you think about what it takes to build infrastructure,
Speaker 8: to build the picks and shovels, it takes a very
Speaker 8: very big check. And these aren't things that venture companies
Speaker 8: can do. These aren't things that small companies can do
Speaker 8: and put on their balance sheet. These are things that big,
Speaker 8: big companies can do. So I think invest are pouring
Speaker 8: out their love for all these big companies that are
Speaker 8: building the infrastructure because down the line, we don't know when,
Speaker 8: but down the line the timeline we're expecting to see
Speaker 8: the software companies really innovate and develop and bring out
Speaker 8: more than proof of concept and utilize these hardware and infrastructure.
Speaker 3: I mean, we need to see that because salesfills down
Speaker 3: on the year, Adobe has been suffering, and we've got
Speaker 3: the earnings after the Ballana.
Speaker 8: Yeah, we do need to see it, and I think
Speaker 8: the investors need to sort of fine tune their expectations
Speaker 8: and maybe start with dividing out hardware from software. Hardware
Speaker 8: we already know, we're very, very excited software. I think
Speaker 8: investors need to be a little bit more patient. What
Speaker 8: I see down the line potentially is, and really down
Speaker 8: the line, is that some of these venture companies will
Speaker 8: be successful in innovating and bringing out software that actually
Speaker 8: works and is reliable, and probably companies like Salesforce will
Speaker 8: end up acquiring them to incorporate them into their infrastructure.
Speaker 5: I know we're jumping around a bit with you, but
Speaker 5: we're enjoying it.
Speaker 2: You have a great command of everything across hardware and software,
Speaker 2: and is that not the world of technology?
Speaker 5: So I'm going to ask you about Micron.
Speaker 2: The market has a lot of enthusiasm for Micron, and
Speaker 2: they're just extrapolating from everything that's happened so far. Micron
Speaker 2: reports earnings on September twenty third. It's a memory chip maker,
Speaker 2: and the market's logic seems to be, well, if every
Speaker 2: other part of the data center story is booming, micro
Speaker 2: must be experiencing the same. Is that a typical behavior
Speaker 2: in markets that you see that kind of logic?
Speaker 7: You know?
Speaker 8: I think it is because it's sort of the tie
Speaker 8: that lifts all boats, type of a mentality. It's not
Speaker 8: unlike to, oh, interest rates are falling, the FED is
Speaker 8: going to cut rates, Let's buy everything. And so I
Speaker 8: think in tech, as long as AI is still a
Speaker 8: little bit nebulous in terms of what we're expecting, I
Speaker 8: think you can expect that.
Speaker 4: And that's why this.
Speaker 8: AI train and tech train is a really hard thing
Speaker 8: to stop, even going into the fall in what historically
Speaker 8: is a difficult year, difficult time for stock market.
Speaker 2: What happens next? This is my favorite question to end
Speaker 2: a segment quickly. Balance of the year in tech?
Speaker 8: Yeah, I think rates cutting, Yeah, it's great for markets,
Speaker 8: but tech is going to go up anyway. I think
Speaker 8: the AI story is very very strong. I do think
Speaker 8: that there is a risk still that we're not talking
Speaker 8: about necessarily because It's been a while since China and
Speaker 8: the negotiations on tariffs have been on the docket for discussion.
Speaker 8: It's been very, very quiet and in the background. Now,
Speaker 8: what happens in November with the Supreme Court, I think
Speaker 8: could be a risk. It's a binary risk, but I
Speaker 8: think I don't think the tech market is without its
Speaker 8: hurtles going into the end.
Speaker 4: Of the year.
Speaker 3: Anna Rathman, I've gone into the advisory It's so great
Speaker 3: to have you back on the show. We appreciate it.
Speaker 3: And coming up another day with an upsized typo. We're
Speaker 3: going to be talking with Mike Cagney, co found running
Speaker 3: exective chairman of blockchain based lender Figure as a company
Speaker 3: goes public as a.
Speaker 4: Bloomberg tech.
Speaker 2: The ipo market is proving strong this year. Take a
Speaker 2: look at some of the largest IPOs of twenty twenty
Speaker 2: five so far. Blockchain based Figure is next up and
Speaker 2: the company and investors raise seven hundred and eighty seven
Speaker 2: point five million dollars it shares the set to begin
Speaker 2: trading today. Figure co founder and executive chairman Mike Cagney
Speaker 2: joins US from the Nasdaq. We've also got Tim Senovik
Speaker 2: with US, host of Bloomberg Crypto as well, Mike, where
Speaker 2: we stand shares indicated to open at thirty four dollars.
Speaker 2: You price the IPO at twenty five. But there's intense
Speaker 2: interest in figure for two reasons, you've elected to go public,
Speaker 2: so we want to understand the rationale. But there's also
Speaker 2: this mechanism where you, as a founder or co founder
Speaker 2: retain a lot of control to explain the logic behind
Speaker 2: those two points.
Speaker 9: Sure, I think starting with the latter point, you know,
Speaker 9: obviously there's a lot of empirical research that shows that
Speaker 9: founder leg companies outperform, and it's important to keep that
Speaker 9: founder DNA within the business. You know, I'm fortunate to
Speaker 9: have a partner with Mike tan Obama CEO, where we've
Speaker 9: worked together before and we have a huge amount of synergy.
Speaker 9: But you know, obviously being able to drive product direction
Speaker 9: and innovation for Figures is very important for me and
Speaker 9: something I can continue to add value for I think,
Speaker 9: you know, as it relates to the IPO. You know,
Speaker 9: what we've done in a very different way is used
Speaker 9: real world access or real world assets within blockchain. So
Speaker 9: we started originating loans on blockchain in twenty eighteen. We
Speaker 9: were on the first entities to do that. We've done
Speaker 9: over seventeen billion dollars of loan origination on public chain,
Speaker 9: over fifty five billion dollars of transactions, and we've been
Speaker 9: able to build a very profitable, rapidly growing company in
Speaker 9: the last four years, which have been incredibly difficult from
Speaker 9: a regulatory standpoint. So going public now in a situation
Speaker 9: where the public market is now opening up to the
Speaker 9: opportunity at blockchain, you know, I view it and now
Speaker 9: so there's a magnificent seven and Web two point zero,
Speaker 9: I think there's going to be the equivalent in Web
Speaker 9: three point zero. I think we're one of those companies,
Speaker 9: and so we're very excited to be going in public today.
Speaker 3: At the NASDAC and the NASDAK itself, Mike is pushing
Speaker 3: towards those tokenized real world assets in the form of equities.
Speaker 3: How much of a tailwind is that going to be
Speaker 3: to the business, So how much you want to actually
Speaker 3: own that space?
Speaker 9: Yeah, I think equities is the next big area we
Speaker 9: want to lean in on. So obviously we've done an
Speaker 9: enormous amount of work in the private credit space and
Speaker 9: brought the benefits of blockchain into that ecosystem through liquidity
Speaker 9: and financing capabilities. But equities are the next thing we
Speaker 9: want to lean in to do. And I think one
Speaker 9: of the things that we're exploring is the ability for
Speaker 9: figure to do a second fast follow issuance of stock,
Speaker 9: but do it native to blockchain, not as a DTCC security,
Speaker 9: and that introduces some efficiencies and introduces some liquidity benefits,
Speaker 9: but I think most importantly for the buyside, it introduces
Speaker 9: the ability to control your stock for stock loan, and
Speaker 9: I think that's a huge differentiator over the way that
Speaker 9: we do things historically.
Speaker 3: And Mike, how do you want to be the owners
Speaker 3: either the token ised sequities or in the equity more broadly,
Speaker 3: have you looking to the real retail community or is
Speaker 3: this much more about institutional holding.
Speaker 9: Look, one of the things I really like about blockchain
Speaker 9: is it's a great leveling force. It's a democratization of
Speaker 9: financial services. And so, you know, we gave retail one
Speaker 9: of the largest allocations of the IPO. I think that
Speaker 9: maybe anyone's ever done because of how important retail is
Speaker 9: to us, and so you know, we view that as
Speaker 9: an integral part of the ecosystem that we're building out
Speaker 9: That doesn't mean that the institutions aren't equally important. We
Speaker 9: have over one hundred and seventy partners that use our
Speaker 9: tech to originate assets on chain, and they're critical to
Speaker 9: our growth and success. But retail is very much right
Speaker 9: down the center of the area of focus for us.
Speaker 10: Mike, considering the success that you've had with on chain
Speaker 10: loan origination and using AI to quickly approve these loans digitally,
Speaker 10: what's going to stop a traditional financial institution coming in
Speaker 10: and doing the same thing. What's your mode here?
Speaker 9: Yeah, I think the biggest mode is the liquity that
Speaker 9: we've been able to build within the ecosystem, the marketplace
Speaker 9: that we have we call it Figure Connect, and for
Speaker 9: the first time, we're allowing originators to be able to
Speaker 9: directly access capital outside of the GSS, outside of Fanny
Speaker 9: and Freddie, where they can sell forward production, guarantee pricing,
Speaker 9: guarantee liquidity. That's a huge moat. I think that's going
Speaker 9: to become very pressing as the Stable Coin Act begins
Speaker 9: to take effect and you start to see deposit flight
Speaker 9: out of banks into coin. Banks are going to be
Speaker 9: stressed in the liability side. They're not going to have
Speaker 9: their balance sheet the way they historically have, and I
Speaker 9: think that's where blockchain and in particular decentralized finance can
Speaker 9: step in and fill that void. And so I don't
Speaker 9: see so much people trying to replicate the model, but
Speaker 9: leverage the economy of scale that's there and actually lean
Speaker 9: in and be part of it.
Speaker 10: No question, crypto assets have absolutely had a moment over
Speaker 10: the last year. A big part of that has to
Speaker 10: do with this administration. But crypto winter is not too
Speaker 10: far into recent memory. What happens to figure during the
Speaker 10: next crypto winter? What do investors need to know about
Speaker 10: how you sustain.
Speaker 9: Yeah, Look, crypto is obviously integral to the workings of
Speaker 9: book blockchains. It allows for the decentralization of the networks.
Speaker 9: We are very much a blockchain company, and so what
Speaker 9: we're doing is bring the transactional efficiency, liquidity and financing
Speaker 9: benefits of blockchain into every asset. So we're somewhat immune
Speaker 9: from the volatility of the price of crypto and bitcoin
Speaker 9: in particular. You know, obviously we're involved in those markets,
Speaker 9: but we're a little more insulated and a little more
Speaker 9: exposed to traditional finance. But on a web three construct.
Speaker 3: Mike You've obviously created a liquidity moment for you for employees.
Speaker 3: You're also raising funds potentially to make acquisitions where would
Speaker 3: be a useful addition.
Speaker 9: Certainly, the blockchain space, in the crypto space is generally subscale,
Speaker 9: so there's an enormous amount of consolidation. I like to
Speaker 9: view the raising of this capital analogous to a last company.
Speaker 9: I raised a billion dollars of capital, was the largest
Speaker 9: private raise ever done. I raised it from SoftBank, and
Speaker 9: it ended up being an enormous competitive advantage for us
Speaker 9: in the balance sheet in terms of our ability to
Speaker 9: take risks that our competitors couldn't. I viewed that analogous
Speaker 9: here as well. It's really having that balance sheet to
Speaker 9: lean in and do some really disruptive work in blockchain
Speaker 9: and crypto over the next several years.
Speaker 10: You said you want to do a second fast follow.
Speaker 10: You also said in the S one that you plan
Speaker 10: to use some of the proceeds from this IPO for acquisitions. Specifically,
Speaker 10: what are those.
Speaker 9: We don't have any specific acquisition and in line right now,
Speaker 9: we're looking at the market. We're always open to those conversations. Again,
Speaker 9: it's a subscale space, so there's an enormous amount of
Speaker 9: opportunity out there, but you know, we're very focused on
Speaker 9: just core execution right now.
Speaker 3: Mike Cagney, so good to have you co founder executive
Speaker 3: chair for Figure along with our own Timsteentivic.
Speaker 4: Thank you. And then you've got some breaking news.
Speaker 2: Yeah, we do have some breaking news crossing the Bloomberg terminal.
Speaker 2: Hyundai has decided to delay the construction of a battery
Speaker 2: plant in Georgia following a raid by the United States,
Speaker 2: which was part of a broader effort you'll remember, to
Speaker 2: crack down on undocumented workers. Hyundai has communicated its decision
Speaker 2: to delay the construction of that Georgia plant in an
Speaker 2: interview with Bloomberg, which was with the CEO Josimonnos. He's
Speaker 2: basically saying that there is a plan still for the
Speaker 2: JV which is between Hyundai and LG, to resume in
Speaker 2: two to three months, and that the plant will need
Speaker 2: new workers to resume construction. But for now, that is
Speaker 2: the breaking news headline from Bloomberg. The Hyundai in a
Speaker 2: JV with LG has decided to delay construction in Georgia
Speaker 2: following that US raid, which was on September the eighth,
Speaker 2: you'll remember Kroen.
Speaker 4: Such an important geopolitical story.
Speaker 2: D Apple getting hit with a pair of downgrades today
Speaker 2: at DA Davidson and Philip Security is the latest sign
Speaker 2: a bit of caution toward the iPhone maker, which has
Speaker 2: sharply underperformed it's large cap tech piers this year. It's
Speaker 2: off the back of its new iPhone lineup launch earlier
Speaker 2: this week. Bloomberg's consumer tech managing editor Mark German is
Speaker 2: back and joins us for more. There's so much analysis
Speaker 2: that needs to be done on the line up of
Speaker 2: the iPhone seventeen. It's technological capabilities, but also it's price points.
Speaker 5: And in your latest.
Speaker 2: You write simply that this might be Apple getting us
Speaker 2: ready for the idea of a two thousand dollars handset,
Speaker 2: which you just explained the reporting and argument you're making.
Speaker 11: Of course, so for the first time in the US,
Speaker 11: Apple's offering a two thousand dollars tier of the iPhone.
Speaker 11: It's a niche device, it's the iPhone seventeen promacs with
Speaker 11: two terabytes of storage. But the point I'm really making,
Speaker 11: beyond the fact that there is now a two thousand
Speaker 11: dollars tier, is that we are getting towards the era
Speaker 11: of two thousand dollars phones. Anyways, look at the pricing
Speaker 11: for this year's models. They did not raise the prices.
Speaker 11: I think two reasons. One Samsung and Google didn't, so
Speaker 11: it would be really hard for Apple to do so
Speaker 11: in a meaningful way. Two of the tariffs really haven't
Speaker 11: kicked in for Apple yet, so it would be a
Speaker 11: bad look for them to raise prices two to tariffs
Speaker 11: when the tariffs haven't even started.
Speaker 7: The reality is these phone tariffs will kick in.
Speaker 11: At some point, and so I'm not room Apple raising
Speaker 11: prices later when the prices actually have to be adjusted
Speaker 11: for Apple to retain its margins, and that is probably
Speaker 11: going to bring the phone up a couple hundred bucks, right,
Speaker 11: And then you look at next year. Next year they're
Speaker 11: going to release their first foldable. Samsung's foldable already costs
Speaker 11: over two thousand dollars. The iPhone Air, which is essentially
Speaker 11: as the foldable, maybe less, that costs one thousand dollars.
Speaker 11: So you can put pretty good money on the idea
Speaker 11: that Apple will be launching a base price two thousand
Speaker 11: dollars iPhone twelve months from now. And then you look
Speaker 11: beyond twenty twenty seven to twenty anniversary iPhone, the glass wing,
Speaker 11: it's all glass, it has translucency, much more advanced technologies,
Speaker 11: very similar concept to one thousand dollars iPhone ten in
Speaker 11: twenty seventeen.
Speaker 7: You're going to see price increases there too. So maybe the.
Speaker 11: Two thousand dollars iPhone because it's the highest tier two
Speaker 11: terabyte model this year, may seem like a joke, but
Speaker 11: it will happen.
Speaker 7: In the next twelve twenty four months regardless.
Speaker 3: And maybe Mark that's what analysts need to see to
Speaker 3: really start to get excited about the stock again from
Speaker 3: a profitability perspective, because at the moment, with these two downgrades,
Speaker 3: looking at gil Luria saying basically we were left uninspired,
Speaker 3: it feels as though they haven't managed to garner much
Speaker 3: excitement this time round.
Speaker 11: Yeah, you know, I rarely agree with the Wall Street analysts,
Speaker 11: and I will hold to that. I actually think that
Speaker 11: this year's iPhones are going to sell incredibly well.
Speaker 7: As I've said many times on this program and elsewhere.
Speaker 7: What really sells new iPhones is the design. The orange color.
Speaker 7: I like it.
Speaker 11: Some may find it ridiculous, but don't discount it. Don't
Speaker 11: discount Apple's marketing around dat device and how new it is,
Speaker 11: the aluminum unibody.
Speaker 12: You name it.
Speaker 11: The functionality may not be much different, but it looks different,
Speaker 11: and then that's going to be good enough to spur sales.
Speaker 7: Don't forget there are.
Speaker 11: A lot of people who have held on to their
Speaker 11: iPhones the past four or five years because the design
Speaker 11: hasn't changed much.
Speaker 7: Now it's finally changed, there's probably going to be some
Speaker 7: pent up demand.
Speaker 3: I'm all in on Orange, particularly today, and we appreciate it.
Speaker 4: Welcome back to bloombag Tech.
Speaker 3: Let's get to Adobe reporting its earnings after the closing
Speaker 3: bell today.
Speaker 4: Investors, well, they have watched Adobe's.
Speaker 3: Shares get left behind in the AI craze. Maybe they've
Speaker 3: got a little rison to be optimistic ahead of its results.
Speaker 4: Bloomberg's tech reporter Matt Day is here to discuss.
Speaker 3: We are down twenty one percent year to date, with
Speaker 3: down forty percent in terms of the last twelve months. Matt,
Speaker 3: it's all about competition. Is there anyway it can prove
Speaker 3: that actually it's still got it?
Speaker 13: I think a lot's going to depend on the forecast.
Speaker 13: You know, Adobe's been trying to put AI all over
Speaker 13: its products. It's got a Firefly product, It's invested a
Speaker 13: whole lot into that kind of smatters AI across its
Speaker 13: creative suite. But investors haven't seen the results that they
Speaker 13: would have hoped for. You know, the last few quarters
Speaker 13: has been disappointing guidance after disappointing guidance. It's like they're
Speaker 13: looking at flatish profitability that go around, So they'd have
Speaker 13: to definitely do something to change the narrative.
Speaker 5: We focus a lot on the stock performance.
Speaker 2: It's down forty percent over the last year, twenty five
Speaker 2: percent year to day. But if you park it one
Speaker 2: to one moment, I feel like Adobe has not stopped
Speaker 2: talking about all of its AI stuff, Like do we
Speaker 2: understand in the newsroom at the story about why Adobe's
Speaker 2: just not been able to convince anyone that all the
Speaker 2: AI attachments you talked about are actually paying off?
Speaker 13: Well, I think they got to convince their buyers, you know,
Speaker 13: first off, that this is worth you know, sometimes showing
Speaker 13: an extra four, sometimes using you know, it's it's largely
Speaker 13: a similar story to to what we've seen with other
Speaker 13: AI tools in the enterprise, right that like is it
Speaker 13: is it something fuel because the're piloting is something they're
Speaker 13: taking wholesale and for now, you know, it'll be facing
Speaker 13: a lot of inroads from you know, not just the
Speaker 13: sort of freemium AI native upstarts, but also just chat GBT. Right,
Speaker 13: are the pure AI tools kind of taking taking some
Speaker 13: of that creative demand and illustrations and all like that
Speaker 13: Adobe depends on.
Speaker 3: And it's a global story. We understand that, you know,
Speaker 3: the likes of deep Sea can Now Bite Dance. They
Speaker 3: got great in the generations that are taking the world
Speaker 3: by storm across the field. When you're looking at the fundamentals,
Speaker 3: revenue isn't that bad. We're likely to post nine percent growth.
Speaker 3: But the problem is it just keeps on shrinking in
Speaker 3: terms of growth.
Speaker 13: Yeah, and the other problem, I mean they've they've forecasted
Speaker 13: something like two hundred and fifty million dollars in recurring
Speaker 13: revenue from AI. You know, that's that's not a ton
Speaker 13: on their enormous user base. Folks would like to see
Speaker 13: more to move the stock. So they still have a
Speaker 13: whole lot to prove in terms of people actually form
Speaker 13: the shell out and we'll want to use these tools.
Speaker 13: You know, the expense of a canva or a FIGMA
Speaker 13: or a CHGPT.
Speaker 2: If anything, it just demonstrates us like earning season continues,
Speaker 2: the next big tech name to go is Adobe, and
Speaker 2: that's why we're grateful for Bloomberg's Matt Day joining us
Speaker 2: here on Bloomberg Tech. After the Bell, we'll go back
Speaker 2: to it tomorrow.
Speaker 5: Okay.
Speaker 2: For the next episode of Bloomberg Tech Europe, Tom McKenzie
Speaker 2: speaks exclusively with Demis Hassabis, the Nobel laureate responsible for
Speaker 2: all of Alphabet's core AI work and the co founder
Speaker 2: and CEO of Google deep Mind. The subace is also
Speaker 2: on a mission to harness AI to quote soul all
Speaker 2: disease through his work at the London base Alphabet subsidiary
Speaker 2: Isomorphic Labs. Here's a part of that conversation.
Speaker 14: Well, that was always the kind of holy girl in
Speaker 14: a way, is to try and tackle cancer. But we've
Speaker 14: also done it for practical reasons as well, because you know,
Speaker 14: the clinical aspects of that are favorable for new drugs
Speaker 14: because obviously the disease is so serious and so there
Speaker 14: are a number of reasons we pick those two areas. Also,
Speaker 14: partly what we think is going to the platform is
Speaker 14: going to be able to do early on.
Speaker 15: There's the speed and efficiency that the platform brings to it.
Speaker 12: There's the quality as well.
Speaker 15: Of course, when we're thinking about pre clinical research and
Speaker 15: AI drug discovery usually using the old methods. You were
Speaker 15: talking what three to six years? How to what extent
Speaker 15: can you cut that time frame down?
Speaker 14: I think in the fullness of time, when our platform
Speaker 14: is mature in the next couple of years, I'd like
Speaker 14: to see that cut down into a matter of months
Speaker 14: instead of years. That's what I think is possible, perhaps
Speaker 14: even far than that, so kind of order of magnitude
Speaker 14: speed up. But you know, we'll see if that's possible.
Speaker 14: There's a lot of work we've got to do first.
Speaker 14: But you know, initial, initial worker initial signs are very promising.
Speaker 15: Back in March, you've raised your first extent of funding
Speaker 15: six hundred million US dollars and you're putting that to
Speaker 15: play in different paths to build out the platform. But
Speaker 15: also talent seems to be part of that. When you
Speaker 15: think about talent, when you think about people like Mark
Speaker 15: Zuckerberg signing checks for two hundred million dollars, what does
Speaker 15: that signal to you?
Speaker 14: Well, Lena, that's a slightly different market, which is the
Speaker 14: pure sort of AGI market, let's say. But it's and
Speaker 14: you know whether or not that's rational, and I think
Speaker 14: our organizations need to think through themselves. But I do
Speaker 14: think AI is going to be one of the biggest technologies,
Speaker 14: if not the biggest, that humanity will ever event so
Speaker 14: in some sense that is rational. But on the other hand,
Speaker 14: in it's particlarly with isomorphic. We have such a compelling
Speaker 14: mission of applying AI to to improve human health. I mean,
Speaker 14: what better use of AI is there than that? And
Speaker 14: that's a really compelling and compelling proposition for both our investors,
Speaker 14: our and our staff.
Speaker 3: We've got to catch the full conversation and it's in
Speaker 3: the next edition of Bloemberg Tech Europe. It's quite early
Speaker 3: though Eastern time, one thirty am six thirty am in London,
Speaker 3: but you can catch it online too. Now, coming up,
Speaker 3: we speak with Repless CEO I'm Jad Massad about the
Speaker 3: startup's latest funding round and the excitement surrounding the Vibe
Speaker 3: coding space.
Speaker 4: This is Bloomberg Tech.
Speaker 2: AI coding startup Replet has a new valuation three billion dollars,
Speaker 2: nearly tripling its previous value.
Speaker 5: We broke the story.
Speaker 2: Yesterday it closed the two hundred and fifty million dollar
Speaker 2: funding round led by Prison Capital, with American Express Ventures,
Speaker 2: Google's AI Futures Fund, and existing backers like Andreson Howitz
Speaker 2: and why Combinator I'm Jad Masad Replet CEO and founder
Speaker 2: joins us. Now something is happening in AI and coding
Speaker 2: in particular. There is a lot of momentum behind you
Speaker 2: and a number of your peers. Why, you know, like
Speaker 2: the valuations, the headline, but what's the thing underneath that
Speaker 2: that's driving it?
Speaker 16: You know, Since the dawn of computing, the holy grail
Speaker 16: the vision of using computers is the ability to program them.
Speaker 16: And there's been many attempts across the years, in most
Speaker 16: recently with the no code and low code movement, but it.
Speaker 12: Really never achieved the potential.
Speaker 16: And today with AI, you can conjure up software by
Speaker 16: merely speaking them and that's really a magical feeling and
Speaker 16: it's transforming all sorts of jobs, not just programming, but
Speaker 16: others as well.
Speaker 2: And Jack, can we do a vibe check and talk
Speaker 2: about vibe coding? Are you in the camp of people
Speaker 2: that accept that vibe coding was coined by Andre Kape
Speaker 2: earlier in the year and now.
Speaker 5: It's a big thing.
Speaker 2: I think our audience would really appreciate understanding what is
Speaker 2: vibe coding and what do people say things like that?
Speaker 16: Yeah, yeah, I mean looking again at the history of computing,
Speaker 16: Grace Hopper in the nineteen fifties, then Venor the compiler
Speaker 16: talked about what we need to do is get to
Speaker 16: a position where we're coding in English, and that was
Speaker 16: always a vision, and so Carpathi last year, in his
Speaker 16: experience coding, said, I'm starting to trust AI more and
Speaker 16: as I'm coding THEI is presenting the code, I'm just
Speaker 16: typing natural language and I just accepted. So that was
Speaker 16: sort of the coinage of the term. But obviously that's
Speaker 16: something that people have been doing since chat GBT.
Speaker 12: We started seeing it at a Replet. We released Replet.
Speaker 16: Agents in September twenty twenty four and it was the
Speaker 16: first coding agent on the market where you don't even
Speaker 16: have to look at the code, so you just type
Speaker 16: your prompt just say I want to build like a
Speaker 16: storefront for my pet store, and it will like in
Speaker 16: a few minutes.
Speaker 12: You'll to see the website.
Speaker 16: You can say I want to add login, I want
Speaker 16: to add my stripe integration, and boom, you have a
Speaker 16: website that's being built. So vibe coding initially was coined
Speaker 16: by a Carpaty for professionals, saying that you can move
Speaker 16: a lot faster, you can.
Speaker 12: Iterate very quickly. But our take on it is really.
Speaker 16: Anyone can program, and that's transforming not just software engineering.
Speaker 16: We have people designers, product managers, finance people, operations people.
Speaker 16: Everyone is automating their jobs, building tools around their jobs.
Speaker 12: And that's what vibecoding is doing.
Speaker 3: And so now with the progress in your agents from
Speaker 3: agent one of just doing two minutes of work and
Speaker 3: now we're up to two hundred minutes with your Agent three,
Speaker 3: are you doing engineers and software designers out of a job?
Speaker 12: Well, I don't think so. I think we're empowering them.
Speaker 16: So if you look at some of our customers, what
Speaker 16: they're saying, for example, we have dual Lingo and Zilos,
Speaker 16: some of are exciting customers in the enterprise. What they're
Speaker 16: telling us is they're cutting product development life cycle by
Speaker 16: up to fifty percent. So previously, when you want to
Speaker 16: produce a new feature, new product, what you would do
Speaker 16: a product manager would sit down write a very long
Speaker 16: document that we call a PRD. We'll pass it to
Speaker 16: the designer. Designer takes that. Typically they misunderstand some aspect
Speaker 16: of it because it's a lot, and they produce a
Speaker 16: mock and then a mock goes to the engineer. They
Speaker 16: also understand some aspect of it, so there's a lot
Speaker 16: of communication issues there. So what they're doing right now
Speaker 16: is a product manager, instead of going from text to
Speaker 16: design to program, they go straight to program. So they
Speaker 16: generate a prototype, they pass that prototype to the designer
Speaker 16: and the engineer and the iteration loop just goes much faster.
Speaker 16: So companies are a lot more productive, they're shipping faster,
Speaker 16: and that's really how we're transforming software in the enterprise.
Speaker 2: And I think the blombag tech audience would love to
Speaker 2: learn a bit more about Redplit as a company. Yeah,
Speaker 2: you know again, headline is the tripling of the valuation.
Speaker 2: But how have you grown internally? What are the main
Speaker 2: priorities for you in terms of onboarding talent?
Speaker 16: You know, we set up this really big vision when
Speaker 16: we started the company in twenty sixteen. We said we're
Speaker 16: going to empower a billion people to be able to
Speaker 16: create software, and people were investors especially, who were laughing
Speaker 16: us out of the room. It's like, yeah, no, no way,
Speaker 16: A billion people would want to learn how to code.
Speaker 16: But we kept talking about how AI is going to
Speaker 16: change things. We built a platform that removes all the
Speaker 16: complexity from creating software. And that's not just the code,
Speaker 16: that's you know, creating the development environment, that's creating a
Speaker 16: database and managing it, that's deploying it. And so we
Speaker 16: spent ten years, eight or nine years before the company
Speaker 16: took off commercially. You know, last year about this time,
Speaker 16: we're about three million dollars in annual recurrent revenue release
Speaker 16: replet Agent one that sent us immediately to nine million dollars,
Speaker 16: but by the end of the year we were about
Speaker 16: you know, nine or ten million dollars, and then from
Speaker 16: there until July we fifteen x tow one hundred and
Speaker 16: fifty million dollar arr Agent V two made it so
Speaker 16: that you can go from the agent, you can give
Speaker 16: it an idea or work for two minutes and come
Speaker 16: back to you with questions or a lot of struggle.
Speaker 16: V two could work for twenty minutes. Now V three
Speaker 16: could work for two hundred minutes, and it's really becoming
Speaker 16: like your own programmer. You don't have to go hire
Speaker 16: a programmer off the market. You can just go to rapport,
Speaker 16: put in your idea, a report will work like a teammate.
Speaker 3: But you are hiring, and in many ways, that's why
Speaker 3: you've raised the funds. Amjad, I'm going to make it
Speaker 3: personal if you don't mind, but knowing your story of
Speaker 3: coming here to the United States back in what was
Speaker 3: it twenty twelve, the fact you came to New York,
Speaker 3: I just spoke with the Governor Kathy Hochel of New
Speaker 3: York who's worried about the access of talent for building
Speaker 3: technology here in New York. And I'm sure it's something
Speaker 3: you think about on the West Coast. Can you get
Speaker 3: the talent you need, particularly from outside of the United States.
Speaker 16: I think there's a lot of talent here and the
Speaker 16: out of states. Still, I think the salaries are getting
Speaker 16: quite absurd because of the funding that's going in AI,
Speaker 16: but I think we should do Obviously, immigration is still
Speaker 16: going to be very important to getting the best and
Speaker 16: the brightest people from all over the world to America.
Speaker 16: But also there's a lot of local talent here and
Speaker 16: I think Replet's also mission is.
Speaker 12: To teach people those skills.
Speaker 16: So Replets has always been used in schools and universities,
Speaker 16: and it's the best time ever if you're a student
Speaker 16: to start learning how to make software is so easy.
Speaker 12: You can make your first piece of.
Speaker 16: Software in a matter of like fifteen to twenty minutes.
Speaker 16: And so I think we're going to see an explosion
Speaker 16: of talent and people coming on the market being able
Speaker 16: to not just code, but you know, use chat, GPT,
Speaker 16: use mid journey, be able to design, be able to
Speaker 16: create videos. I think it's an amazing time for a
Speaker 16: student to be building a broad set of skills, and
Speaker 16: I think I don't think we're going.
Speaker 12: To have a talent problem.
Speaker 3: Really appreciate that on So thank you, Jadamasad's Replet CEO
Speaker 3: and founder. Congratulations on the Rais file management company. Box
Speaker 3: has unveiled a new set of agentic tools that it's
Speaker 3: annual BlockWorks conference and includes a kind of operating system
Speaker 3: for AI agents and an a cybersecurity tool. Let's get
Speaker 3: into it in Box CEO Aaron Levy, who joins us. Now, Aaron,
Speaker 3: what are you most excited about? Because there's a raft
Speaker 3: of things you're unveiling, whether it's about extracting data, whether
Speaker 3: it's about managing the raft of agents we're about to face.
Speaker 4: How are your consumers going to adopt it?
Speaker 17: Yeah, So I think the thing we're most excited about
Speaker 17: is that box we help companies manage their unstructured data.
Speaker 17: So if you think about ninety percent of data in
Speaker 17: the enterprise, are things like financial documents, contracts, invoices, research materials,
Speaker 17: all of that data. Traditionally you've never been able to
Speaker 17: tap into its scale inside of an organization. You kind
Speaker 17: of create it, you store it, you may look at
Speaker 17: it again, but you never really are able to actually
Speaker 17: put it in to a workflow or deeply understand what's
Speaker 17: inside that data. So we're announcing a set of capabilities
Speaker 17: with AI agents to let you actually finally tap into
Speaker 17: that data.
Speaker 7: The probably biggest.
Speaker 17: Part of the announcements of are new workflow automation capability
Speaker 17: Box automate, where you can design an end to end
Speaker 17: business process directly in box and then drop in AI
Speaker 17: agents at any step or multiple steps in that business
Speaker 17: process to let you go and bring automation to your
Speaker 17: unstructured workflows. So think about client onboarding at a bank,
Speaker 17: reviewing a contract at a law firm, being able to
Speaker 17: work through healthcare data. These are what you're going to
Speaker 17: be able to automate now at scale.
Speaker 3: And you're in like two thirds of the fortune five hundred.
Speaker 4: I really want to get a sense check of.
Speaker 3: How they're embracing these sorts of products, what effectiveness they're seeing,
Speaker 3: because with that MIT report blowing up all the vibes
Speaker 3: around whether or not this stuff is actually practically delivering
Speaker 3: on productivity, what are you seeing?
Speaker 17: Yeah, so we're seeing probably a different trend from what
Speaker 17: I think showed up in that MIT report. That's obviously
Speaker 17: a very broad based survey across lots of different types
Speaker 17: of implementations of AI. And one thing actually in particular
Speaker 17: that was found in the MIT report was a very
Speaker 17: different success and failure rate based on if companies try
Speaker 17: and build out their own technology versus work with software
Speaker 17: vendors that have pre built capabilities to let them go
Speaker 17: and deploy against their data and workflows. So we're seeing
Speaker 17: a much higher success rate because within box customers already
Speaker 17: have their data, they already have security. Now we're introducing
Speaker 17: workflow capabilities that they can drop agents into, all of
Speaker 17: which provide the guardrails to make agents much more successful
Speaker 17: in their environment. So we're seeing very different results. But
Speaker 17: I think there are important lessons within that MIT survey
Speaker 17: that CIOs should be paying attention to as they go
Speaker 17: and deploy AI and their enterprise.
Speaker 2: Aaron extract tot to mat and she'ld pro this package
Speaker 2: expansion for you. You're a one billion dollar revenue AEA company,
Speaker 2: do you just kind of see immediate acceleration of that
Speaker 2: because you think it's what your customers are wanting right now.
Speaker 17: Yeah, So we introduced a new plan called Enterprise Advanced.
Speaker 17: And what Enterprise Advance does is it has our most
Speaker 17: advanced AI capabilities, our AI agent builder, now, our new
Speaker 17: workflow capabilities with agents, and that's providing a really kind
Speaker 17: of great upgrade cycle from a revenue standpoint, but it's
Speaker 17: also making it very easy for our customers to actually
Speaker 17: get into these advanced capabilities in a seamless way. So
Speaker 17: we think it's a very good match for again driving
Speaker 17: a revenue sort of cycle for us that is driving
Speaker 17: a very healthy upgrade rate. We've seen some great results
Speaker 17: where we beat guidance and consensus on our recent numbers,
Speaker 17: and that's really driven by the enterprise advanced momentum that
Speaker 17: will only continue based on the announcements we're making today
Speaker 17: on our new set of features that we're launching aeron.
Speaker 2: I've really enjoyed following your posts on X in recent months,
Speaker 2: your on stage appearances. I've been trying to think, like,
Speaker 2: what is the Aaron Levy summary of what's happening in
Speaker 2: AI right now?
Speaker 5: And correct me if I'm wrong.
Speaker 2: I think your position is like, don't take your position
Speaker 2: in the world of software for granted.
Speaker 5: Everything is up for grabs.
Speaker 2: Would you say that's fair and that you apply that
Speaker 2: philosophy to Box as well.
Speaker 17: Yeah, I mean, I'm certainly a student of history, you know,
Speaker 17: Andy Grove. Obviously only the paranoids survive. I sort of
Speaker 17: grew up in the tech industry at a point when
Speaker 17: that was just locked in on everybody. You had this
Speaker 17: new wave of disruptors go after many incumbent industries. We
Speaker 17: were one of those, and so by living and breathing
Speaker 17: that ourselves, I think we know how tenuous these positions
Speaker 17: can be if you don't adapt and if you don't
Speaker 17: move quickly. So the way we run Box today is
Speaker 17: we have this mindset of what would our company do
Speaker 17: if we started from scratch in twenty twenty five, how
Speaker 17: would we work internally, how would we operate? And then,
Speaker 17: most importantly, what value would we deliver for our customers
Speaker 17: and for us. We're just sitting on this incredible amount
Speaker 17: of data that our customers have entrusted us with that
Speaker 17: we can now help them bring all new use cases
Speaker 17: to life with the power of AI. We're incredibly excited.
Speaker 17: This is the most exciting I've ever been, you know,
Speaker 17: when we've been running Box, and this is more exciting
Speaker 17: than the founding days, just given how many things we
Speaker 17: can go and help customers with.
Speaker 2: Aaron Levy, co founder and CEO of Box, It's great
Speaker 2: to have you back here on Bloomberg Tech. Thank you
Speaker 2: so much. That does it for this edition of Bloomberg Tech.
Speaker 2: My goodness, September has been brutal, and what a week
Speaker 2: it's been.
Speaker 3: Karroc relentless. I feel it might be. There is so
Speaker 3: much you've got to digest and catch up on and revisit.
Speaker 4: With our podcast.
Speaker 3: You can find it on the timeline and on the
Speaker 3: terminal with Apple, Spotify and I Heart.
Speaker 4: This is Bloomberg Tech.