WEBVTT - Tech Stocks Under Pressure As Iran War Drags On 0:00:02.520 --> 0:00:13.680 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive 0:00:13.720 --> 0:00:17.560 from coast to coast with Caroline Hyde in New York 0:00:17.800 --> 0:00:20.639 and Edla Lolow in San Francisco. 0:00:23.440 --> 0:00:25.040 This is Bloomberg Tech coming up. 0:00:25.079 --> 0:00:28.920 Tech socks fowards oil prices spike again, stoking fears the 0:00:28.920 --> 0:00:32.440 war in Iran will further crimp energy supplies a fuel inflation. 0:00:32.760 --> 0:00:35.120 Plus, we hear from Michael Dell and the US Energy 0:00:35.159 --> 0:00:38.519 Department Under Secretary for Science about Dell's work with the 0:00:38.520 --> 0:00:40.240 federal government on Ai. 0:00:40.760 --> 0:00:44.200 And new details emerged on Apple's entry into the foldable 0:00:44.240 --> 0:00:44.880 phone category. 0:00:44.960 --> 0:00:47.120 We'll break it down key headlines. 0:00:47.159 --> 0:00:49.800 Iran Supreme Leader has called for the strait of hermuz 0:00:50.159 --> 0:00:52.640 to remain closed and warn that new fronts may be 0:00:52.760 --> 0:00:54.440 opened if the war persists. 0:00:54.440 --> 0:00:55.680 Here with the latest in. 0:00:55.640 --> 0:00:59.560 The Middle East is Bloomberg Jermana Vissecchi live from Dubai. 0:00:59.640 --> 0:01:02.120 And you know those are the two red headlines on 0:01:02.160 --> 0:01:06.720 the terminal, right, the latest in public address from Iran 0:01:06.880 --> 0:01:08.200 Supreme Leader that start there. 0:01:08.240 --> 0:01:09.680 But conscious of course. 0:01:09.800 --> 0:01:13.640 That in real time drone attacks continue across the region, 0:01:13.640 --> 0:01:14.440 including where. 0:01:14.280 --> 0:01:17.320 You are exactly that ed and it is day thirteen 0:01:17.360 --> 0:01:19.560 now of the Iran war with no signs really that 0:01:19.600 --> 0:01:22.600 things are letting up. And you know, as you can see, 0:01:22.959 --> 0:01:27.040 we have actually started working from home today. Many institutions 0:01:27.120 --> 0:01:31.080 around Dubai have actually advised their employees to be working 0:01:31.120 --> 0:01:33.759 from home out of precaution. There hasn't been a formal 0:01:33.800 --> 0:01:37.080 evacuation notice issued, but I think what has happened in 0:01:37.080 --> 0:01:40.600 the last twenty four hours is the intensity of the 0:01:40.640 --> 0:01:43.960 strikes has really taken on a different dimension. And what 0:01:44.000 --> 0:01:47.360 you're seeing here is, you know, the UEE has been 0:01:47.440 --> 0:01:51.240 extremely successful at intercepting many of the projectiles that have 0:01:51.280 --> 0:01:54.200 been headed towards them. Out of all of the projectiles 0:01:54.200 --> 0:01:57.320 that Iran have fired, about two thirds have been directed 0:01:57.320 --> 0:01:59.360 towards the UAE alone, just to give you an idea 0:01:59.400 --> 0:02:02.840 here of Kant. But that's not to say that some 0:02:02.880 --> 0:02:06.960 of the fallen debris isn't causing damage on residential buildings, 0:02:07.000 --> 0:02:09.720 which is exactly the situation that we're in. So out 0:02:09.760 --> 0:02:13.120 of an abundance of precaution, we are, of course broadcasting 0:02:13.160 --> 0:02:15.760 for home. But I will tell you that the tone 0:02:15.919 --> 0:02:18.440 still coming out of Iran is one of defiance. We 0:02:18.480 --> 0:02:21.440 had the first statement a couple of hours ago coming 0:02:21.480 --> 0:02:23.600 through from the new Supreme Leader, the son of the 0:02:23.600 --> 0:02:26.560 prior Supreme Leader, and he was saying that they will 0:02:26.720 --> 0:02:30.680 maintain the closure of the Straits of Hormos. They are 0:02:30.800 --> 0:02:32.840 very aware of the cost that this is inflicted on 0:02:32.880 --> 0:02:36.840 the global economy and global energy infrastructure, and they've also 0:02:36.919 --> 0:02:38.840 warned that new fronts could open up and that they 0:02:38.840 --> 0:02:43.000 will continue to strike on US acids. This coming after 0:02:43.080 --> 0:02:46.360 a very intense twenty four hours of more vessels being 0:02:46.440 --> 0:02:50.399 targeted around the Persian Gulf, more fuel depots also being 0:02:50.480 --> 0:02:55.000 hit set a flame. We've had disruption and oil supply 0:02:55.200 --> 0:02:58.680 and analysts essmates vary, but any way you look at it, 0:02:58.720 --> 0:03:01.440 as long as the straits mains closed, what you're going 0:03:01.480 --> 0:03:04.080 to continue to see is this upward push on the 0:03:04.080 --> 0:03:05.119 price of oil. 0:03:05.639 --> 0:03:09.200 And Jamana I can only imagine the stress that's putting 0:03:09.200 --> 0:03:11.960 you on and all of your colleagues, your family at 0:03:11.960 --> 0:03:14.120 the moment to all to us them a little bit 0:03:14.120 --> 0:03:16.440 about what you think the impact is written large on 0:03:17.080 --> 0:03:19.640 your part of the world. The UAE not an oil force, 0:03:19.760 --> 0:03:22.240 it is a financial force. But how do you think 0:03:22.280 --> 0:03:25.200 that this focus on all prices as well is changing 0:03:25.200 --> 0:03:26.240 the tone in the Middle East? 0:03:27.480 --> 0:03:32.080 Well, Ue obviously some very notable OPEC producer and so 0:03:32.320 --> 0:03:33.880 you know there are two dimensions to this. 0:03:34.840 --> 0:03:37.840 Of course, the focus. 0:03:37.480 --> 0:03:42.080 From an economic perspective is maintaining the flow of oil 0:03:42.200 --> 0:03:47.600 and ensuring that production doesn't get permanently halted or disrupted. 0:03:47.680 --> 0:03:50.320 What has happened is some of the key OPEC producers 0:03:50.320 --> 0:03:54.320 from the region, the likes of Saudi Arabia, Kuwait, iraq Uee, 0:03:54.800 --> 0:03:58.080 have had to manage their production levels simply because they 0:03:58.160 --> 0:04:01.240 don't have any capacity left in their store. They're looking 0:04:01.240 --> 0:04:04.160 for other ways to get that oil out. You've probably 0:04:04.200 --> 0:04:06.720 heard about this East West pipeline in Saudi Arabia that 0:04:06.720 --> 0:04:09.320 Saudi Arabia are leaning on as well. In the UAE, 0:04:09.440 --> 0:04:12.760 there's also Fugera, a pipeline that bypasses the straits as 0:04:12.840 --> 0:04:14.040 options to get the oil out. 0:04:14.080 --> 0:04:16.240 But beyond the oils dimensioned. 0:04:15.760 --> 0:04:19.159 As you say, look these are this is a part 0:04:19.240 --> 0:04:23.200 of the world that has spent decades painting this image 0:04:23.440 --> 0:04:29.039 of a place where financial the financial ecosystem constructure. They've 0:04:29.080 --> 0:04:33.720 created the whole ecosystem around it to bring in capital 0:04:33.800 --> 0:04:35.960 and to bring an investment from abroad. And you even 0:04:36.000 --> 0:04:38.080 saw it when President Trump made a visit almost a 0:04:38.160 --> 0:04:40.080 year ago to this part of the world talking about 0:04:40.240 --> 0:04:44.200 the investments and the opportunities in terms of artificial intelligence 0:04:44.200 --> 0:04:47.880 and the diversification strategies that these economies are pursuing. At 0:04:47.960 --> 0:04:52.000 risk here is that these projects are being severely tested 0:04:52.080 --> 0:04:57.479 by and undermined by the geopolitical developments with really no 0:04:57.839 --> 0:04:59.719 end in sights. And of course this is the reason 0:04:59.720 --> 0:05:02.480 why GCC states have been one for ages trying to 0:05:02.520 --> 0:05:05.240 avoid the scenario and two actively trying to work the 0:05:05.279 --> 0:05:06.960 diplomatic channels to make it stop. 0:05:07.839 --> 0:05:10.880 Emos Jamana Vissecci, We so appreciate you coming live for 0:05:11.000 --> 0:05:13.839 us from Dubai. Stay safe, Thank you. Now look. A 0:05:13.920 --> 0:05:18.240 pro Iranian digital activist group Handala, has claimed credit for 0:05:18.320 --> 0:05:21.320 a cyber attack against medical technology making a Striker Now. 0:05:21.360 --> 0:05:24.320 The attack crippled the company's global operations, with many Striker 0:05:24.320 --> 0:05:26.800 employees around the world unable to work due to the 0:05:26.839 --> 0:05:29.040 breach so all. According to a source and a memoc 0:05:29.160 --> 0:05:32.400 by blombag News, Striker is still investigating the breach and 0:05:32.440 --> 0:05:35.320 doesn't know when its systems will be back online. Joining 0:05:35.400 --> 0:05:37.239 us now are the details? Is bloombag to Patrick Howell 0:05:37.240 --> 0:05:41.440 O'Neil from our cybersecurity team. And it's actually not the 0:05:41.480 --> 0:05:45.320 company Striker that's telling us it's an Iranian impact cyber hack. 0:05:45.440 --> 0:05:48.839 It's Iran itself. How do we know that Striker is 0:05:48.880 --> 0:05:49.320 dealing with this? 0:05:50.279 --> 0:05:54.640 So yesterday a little bit after midnight Eastern time, computers 0:05:54.640 --> 0:05:57.520 began to turn off and strike your offices around the world. 0:05:58.120 --> 0:06:00.400 It was a bit of a frantic scene. Employees trying 0:06:00.400 --> 0:06:02.760 to once they realized what was going on, unplugged the 0:06:02.800 --> 0:06:07.239 computers to save the data, and it interrupted operations around 0:06:07.240 --> 0:06:08.200 the world for the company. 0:06:08.200 --> 0:06:10.479 Employees were sent home. I mean, it was a full stop. 0:06:10.560 --> 0:06:13.400 Data was wiped on the computers and even on phones 0:06:13.440 --> 0:06:17.279 and devices, even personal devices for employees that had you know, 0:06:17.360 --> 0:06:21.240 corporate software on their computers, on their phones rather and 0:06:21.279 --> 0:06:24.480 then Hondala posted taking credit for the attack and saying 0:06:24.520 --> 0:06:27.479 it was in response to a suspected US strike of 0:06:27.640 --> 0:06:30.240 an Iranian school and has said that. 0:06:30.240 --> 0:06:31.160 They have a ton of data. 0:06:31.200 --> 0:06:34.760 But Striker is it appears really recovering and getting back 0:06:34.800 --> 0:06:35.360 on its feet. 0:06:36.120 --> 0:06:37.760 Patrick, this is a case study. 0:06:37.839 --> 0:06:41.360 Right Handala is a pro ranean distractivist group. What can 0:06:41.360 --> 0:06:46.080 you tell us about Iran's broadest strategy cyber strategy? In 0:06:46.120 --> 0:06:49.279 response to what the United States has thus far enacted 0:06:49.279 --> 0:06:49.840 in the region. 0:06:50.640 --> 0:06:53.159 When you think about Iran's cyber strategy, you can easily 0:06:53.160 --> 0:06:56.000 put it into the context of iran strategy overall in 0:06:56.040 --> 0:06:59.039 this war, which is that it's defined by asymmetry. I mean, 0:06:59.080 --> 0:07:01.719 you can think about drones, missiles, the kinetic space for sure, 0:07:02.520 --> 0:07:05.760 and the cyberspaces just like that. They are looking ways, 0:07:05.880 --> 0:07:09.039 looking for ways to impose cost on Israel, on the 0:07:09.160 --> 0:07:12.720 US and on partners of those countries, and so there 0:07:12.720 --> 0:07:16.840 are opportunistically looking for companies with connections, companies that will 0:07:16.840 --> 0:07:19.960 make usplash. There's a big propaganda value for doing things 0:07:20.040 --> 0:07:20.320 like this. 0:07:21.480 --> 0:07:22.720 What the actual. 0:07:22.320 --> 0:07:25.679 Impact is economically, The long term impact of this company 0:07:26.040 --> 0:07:29.160 is to be determined, but it's a major propaganda win 0:07:29.240 --> 0:07:33.320 for Iran, and you can expect continued opportunistic attacks like 0:07:33.360 --> 0:07:34.160 this from the country. 0:07:34.920 --> 0:07:37.679 Bloomberg's Patrick how O'Neil, thank you very much. The conflict 0:07:37.680 --> 0:07:40.040 in Iran and across the Middle East continues to bring 0:07:40.080 --> 0:07:43.880 investor attention back to defense technology. Joining us to discuss 0:07:44.200 --> 0:07:47.560 is Lauren Webster Piper Sandler, Managing director of Investment Banking. 0:07:47.600 --> 0:07:49.120 And that's your expertise. 0:07:49.160 --> 0:07:52.480 It's not just cyber But I look at the Bloomberg 0:07:52.560 --> 0:07:55.080 terminal every morning for the last couple of weeks, and 0:07:55.120 --> 0:07:57.040 the stories that are up there in the realm of 0:07:57.080 --> 0:08:00.440 tech are to do with defense technology. Must have the 0:08:00.440 --> 0:08:02.200 same conversation with clients on a data. 0:08:01.960 --> 0:08:06.080 Basis, absolutely, And I think there's a couple of thematics 0:08:06.120 --> 0:08:08.760 that are really driving investor interest in the category. And 0:08:08.800 --> 0:08:11.400 it certainly started before the current conflict. 0:08:11.960 --> 0:08:14.360 One was this push across. 0:08:13.960 --> 0:08:17.680 The West US, Canada, Europe for sort of sovereign reindustrialization 0:08:17.960 --> 0:08:21.200 of their defense space. A lot of investment pouring into 0:08:21.360 --> 0:08:26.160 we want to buy what we build in our borders. Two, 0:08:26.480 --> 0:08:30.240 more recently, the rotation out of the software sector. The 0:08:30.240 --> 0:08:32.880 sell doun on AI concerns that money hasn't just sat 0:08:32.920 --> 0:08:36.360 on the sidelines, it's been plowing into industrial space is 0:08:36.600 --> 0:08:41.280 like defense technology. And then third third, the current conflict 0:08:41.320 --> 0:08:43.720 is certainly bringing kind of a microscope to the space 0:08:44.120 --> 0:08:46.120 and really getting investor interests there. 0:08:47.600 --> 0:08:51.760 In a war scenario, it's hard to determine what actually 0:08:51.800 --> 0:08:54.000 has changed. Right, One of the data sets we track 0:08:54.160 --> 0:08:59.280 is non classified or declassified dollars that go to the 0:08:59.360 --> 0:09:02.920 legacy for ballistics, right, and they go to the same players, 0:09:02.960 --> 0:09:08.760 the vast majority still to Lockheed, etc. Are you seeing 0:09:08.800 --> 0:09:13.040 actually this new group of largely private companies get real 0:09:13.120 --> 0:09:15.120 tangible traction in this environment. 0:09:15.200 --> 0:09:16.000 Yeah, yeah, certainly. 0:09:16.040 --> 0:09:18.800 And there's a couple pockets that really plug into the 0:09:18.800 --> 0:09:21.120 ballistics space. And you're right, like, we have a huge 0:09:21.200 --> 0:09:26.120 resupply requirement there after expending so many in the current conflict. 0:09:27.240 --> 0:09:29.760 But one is in sort of the launch capability, and. 0:09:29.720 --> 0:09:33.800 There's a lot of investor interest going into particularly private 0:09:33.840 --> 0:09:38.400 companies to be able to fuel the launch capability for 0:09:38.520 --> 0:09:41.920 those ballistics ammunitions. So that's one pocket. The other one 0:09:42.040 --> 0:09:44.240 is actually kind of the picks and shovels around the industry. 0:09:44.280 --> 0:09:48.360 We have a whole manufacturing base we need to reconstitute 0:09:48.360 --> 0:09:50.920 here in Europe saying the same thing, we need to 0:09:50.960 --> 0:09:54.320 have our supply chain within our borders, and so it's 0:09:54.400 --> 0:09:57.880 not just ship subs ballistics, but it is the supply 0:09:58.000 --> 0:09:59.400 chain around that entirely. 0:10:00.400 --> 0:10:02.960 Go a little bit learn not just in defense tech, 0:10:03.040 --> 0:10:05.760 but we think about cybersecurity at this moment as well. 0:10:05.760 --> 0:10:08.280 We were just hearing about what's happened with Stryker. How 0:10:08.360 --> 0:10:10.120 much is that a point of interest? How much of 0:10:10.160 --> 0:10:12.920 people willing to take on what has been some software 0:10:12.920 --> 0:10:14.199 anxiety around that area. 0:10:15.200 --> 0:10:18.040 Yeah, yeah, absolutely, so, I think I think you're right 0:10:18.040 --> 0:10:22.719 around sort of the interest and where it was, particularly 0:10:22.760 --> 0:10:23.920 in the SaaS sell off. 0:10:23.920 --> 0:10:25.400 I mentioned previously. 0:10:25.600 --> 0:10:29.920 Cybersecurity was not immune to the sell down, but we 0:10:30.040 --> 0:10:32.240 see it. I see it as somewhat overblown for a 0:10:32.280 --> 0:10:36.040 few reasons. One is, companies like Strike or others, they 0:10:36.080 --> 0:10:38.680 know the threat is still very real in there, and 0:10:38.720 --> 0:10:44.480 they need effective cybersecurity tooling. So efficacy is super important 0:10:44.960 --> 0:10:47.920 and a lot of the AI solutions are just starting 0:10:47.960 --> 0:10:51.160 to get there. Two is cybersecurity is actually going to 0:10:51.200 --> 0:10:53.719 continue to be a place that wins. It's a beneficiary 0:10:54.120 --> 0:10:56.800 from plugging AI capabilities into it, and so I think 0:10:56.840 --> 0:11:01.360 you're going to see cybersecurity companies continue to do quite well. 0:11:01.400 --> 0:11:04.720 They've done better than the broader software market given both 0:11:04.800 --> 0:11:07.520 the threat and the opportunity from some of the new 0:11:07.559 --> 0:11:09.360 AI technology learn not that. 0:11:09.320 --> 0:11:11.840 Any of that set themselves apart that have managed a 0:11:12.040 --> 0:11:14.440 sell themselves as a platform, not some sort of single 0:11:14.440 --> 0:11:16.959 point of service, but well broadly have intertwined gender to 0:11:17.040 --> 0:11:17.960 AI ahead of the curve. 0:11:18.880 --> 0:11:22.120 Yeah, you certainly saw last week Crowdstrikes earnings come out 0:11:22.160 --> 0:11:25.680 and just really strong performance from the business around this 0:11:25.880 --> 0:11:30.360 platform story. Look, it has end points, millions of endpoints, 0:11:30.440 --> 0:11:32.480 billions of endpoints that it is monitoring, and that is 0:11:32.520 --> 0:11:33.239 a data. 0:11:33.040 --> 0:11:36.920 Mote in the AI in the AI era. Second, they 0:11:36.960 --> 0:11:40.320 are using AI to really drive. 0:11:40.160 --> 0:11:43.400 Security outcomes for their customers, So you saw that bright 0:11:43.440 --> 0:11:44.760 spot in their earnings for sure. 0:11:45.160 --> 0:11:47.720 What are you modeling for to happen in the duration 0:11:47.880 --> 0:11:51.800 of this conflict? What you are as a team discussing. 0:11:53.040 --> 0:11:56.120 Through the lens of different asset prices and how long 0:11:56.200 --> 0:11:59.719 you think, particularly the volatility in oil, Right, that's the 0:11:59.800 --> 0:12:02.040 end opinning of what's going on. But the simple question 0:12:02.080 --> 0:12:03.200 is having anything it's kind of lost. 0:12:03.280 --> 0:12:05.360 Yeah, I wish I had a crystal ball for that. 0:12:05.679 --> 0:12:08.480 But certainly you know there's going to be near term disruption. 0:12:08.559 --> 0:12:11.640 We have seen multiple points of that this year, first 0:12:11.640 --> 0:12:13.520 the AI sell off. 0:12:13.320 --> 0:12:15.080 In the market, now the conflict. 0:12:15.360 --> 0:12:19.319 But I think long term, we see a few opportunities 0:12:19.400 --> 0:12:22.160 with a significant growth outlook, and those continue to be 0:12:22.240 --> 0:12:26.680 defense technology going from largely private to public over time, 0:12:26.720 --> 0:12:31.240 and we're really excited about that and we will see yeah, certainly, 0:12:32.040 --> 0:12:35.880 but in cybersecurity, we expect to see a bounce back 0:12:35.920 --> 0:12:37.480 to as well on Webster. 0:12:37.640 --> 0:12:40.000 It's been great having you on today of Pipistana. Thank 0:12:40.040 --> 0:12:43.760 you for your time. Coming up, another eye popping valuation 0:12:43.960 --> 0:12:46.199 in the AI boom, but going to that private market 0:12:46.240 --> 0:12:49.440 we just discussed Cursor could nearly double its worth to 0:12:49.520 --> 0:12:52.720 fifty billion dollars. That conversation next, this is pretty bad tech. 0:13:05.880 --> 0:13:08.600 Cursor is reportedly in talks and a new funding round 0:13:08.600 --> 0:13:11.439 that would value the company at around fifty billion dollars, 0:13:11.480 --> 0:13:14.480 nearly double its valuation from just last fall, all according 0:13:14.480 --> 0:13:17.439 to sources. So the latest Bloomersons hash Mascaranas broke the 0:13:17.480 --> 0:13:19.920 story with the team, there's a lot of interesting Cursor. 0:13:19.960 --> 0:13:22.640 There has been for quite some time. They've moved quickly, 0:13:22.679 --> 0:13:25.120 grown the product. But this is a big jump in valuation. 0:13:25.480 --> 0:13:27.520 What are the details on the round? Who are the players? 0:13:27.679 --> 0:13:27.839 Yeah? 0:13:27.920 --> 0:13:28.760 Absolutely so. 0:13:28.920 --> 0:13:32.160 Earlier this month we reported that Cursor has topped two 0:13:32.160 --> 0:13:36.040 billion an annualized revenue. That's up from around one hundred 0:13:36.080 --> 0:13:38.800 million in annualized revenue at this time last year. So 0:13:38.880 --> 0:13:41.959 the revenue growth has just been insane, which is basically 0:13:42.040 --> 0:13:45.880 investor catnip in this industry. We've also been watching Cursor 0:13:45.960 --> 0:13:49.440 focus on more in house model efforts, which I would 0:13:49.520 --> 0:13:51.360 expect is a big part of why they need to 0:13:51.480 --> 0:13:54.360 raise new capitals so soon after their last round closed 0:13:54.440 --> 0:13:56.560 just a few months ago. You know, we don't know 0:13:56.600 --> 0:13:59.520 the lead investors just yet, but we do know. I mean, 0:13:59.600 --> 0:14:02.720 just looking at the market, so many companies are hitting 0:14:02.760 --> 0:14:06.320 revenue milestones or even new funding milestones. With yesterday Replet 0:14:06.600 --> 0:14:08.880 announcing that they had raised at nine billion and. 0:14:08.920 --> 0:14:11.160 Natasha, I mean, we've got the reput CEO joining us 0:14:11.200 --> 0:14:13.520 a little late in the show, and it just feels 0:14:13.520 --> 0:14:16.559 that all of these companies are able to thrive simultaneously. 0:14:16.600 --> 0:14:19.040 The fact that all we talk about is Anthropic and 0:14:19.080 --> 0:14:22.040 it's cowork and it's coding a bit capabilities open a 0:14:22.120 --> 0:14:23.720 eyes as well, but still this space. 0:14:23.560 --> 0:14:25.720 For Cursor, Yeah, absolutely. 0:14:25.760 --> 0:14:27.920 I mean it's it's a little bit of a cliche 0:14:27.920 --> 0:14:30.440 that it's not a winner takes all market, because at 0:14:30.440 --> 0:14:32.720 some point it does dip over into it. I mean, 0:14:33.000 --> 0:14:36.040 when Cursor launched its product in twenty twenty three, in 0:14:36.120 --> 0:14:39.560 developers eyes, all the big names of AI were missing. 0:14:39.640 --> 0:14:43.000 Open Ai didn't have a product, Anthropic didn't have a product. 0:14:43.000 --> 0:14:46.040 They were the model layer helping these companies, but once 0:14:46.080 --> 0:14:49.840 they saw Cursor's growth, you know, and other growth. We 0:14:50.040 --> 0:14:54.000 absolutely saw them put more efforts into their own products. 0:14:54.440 --> 0:14:56.840 My expectation is this year, similar to last year, we 0:14:56.840 --> 0:14:59.640 will see consolidation in this space. Last year we saw 0:14:59.640 --> 0:15:03.480 windsor or of a smaller company get acquired by Cognition. 0:15:03.680 --> 0:15:06.360 I am watching the same thing this year because to 0:15:06.400 --> 0:15:09.200 your point, despite the immense growth, there are just so 0:15:09.240 --> 0:15:09.920 many players. 0:15:10.320 --> 0:15:12.360 You know, see a lot of headlines on the Bloomberg right, 0:15:12.440 --> 0:15:13.960 Lovable is one out of Sweden. 0:15:14.040 --> 0:15:15.520 I think that's raised money. 0:15:15.880 --> 0:15:18.760 By the way, Curser didn't reply to comment on our story, 0:15:18.880 --> 0:15:21.000 but I did put on X that Basically, as far 0:15:21.000 --> 0:15:24.080 as I can tell, Replic, Cursor, and clud Code just 0:15:24.120 --> 0:15:26.440 all do the same thing in a slightly different way. 0:15:27.120 --> 0:15:31.360 It is a competitive field, the AI coding agent space. 0:15:31.600 --> 0:15:32.720 It's immensely competitive. 0:15:32.760 --> 0:15:35.440 I mean, think about also this whole idea of people 0:15:35.480 --> 0:15:38.280 being worried that their jobs are going to be automated away. 0:15:38.720 --> 0:15:41.360 You see engineers trying all the products, but they are 0:15:41.400 --> 0:15:44.880 going to pick one at some point, and so right 0:15:44.880 --> 0:15:46.720 now it feels like there's this arm rates to figure 0:15:46.720 --> 0:15:50.040 out which is going to be the preferred coding assistant 0:15:50.120 --> 0:15:53.360 or software development assistant and you know, day by day 0:15:53.400 --> 0:15:54.680 we see these companies go ahead. 0:15:54.480 --> 0:15:55.000 To head on it. 0:15:55.720 --> 0:15:59.080 Natasha, it's great. You're so much the breaking us in 0:15:59.120 --> 0:16:02.000 the private area. Thank you very much. In Dean, Natasha Mascaron, is. 0:16:02.000 --> 0:16:12.320 There software firm at Lassian is joining rivals blaming AI 0:16:12.520 --> 0:16:15.680 for massive staff reductions. The Sydney based company plans to 0:16:15.680 --> 0:16:18.440 cut sixteen hundred jobs, about a tent of. 0:16:18.440 --> 0:16:19.520 Its global workforce. 0:16:19.760 --> 0:16:23.200 The most ready forward has the software spaceed details. It 0:16:23.280 --> 0:16:25.400 is the latest one right. The scale is not perhaps 0:16:25.480 --> 0:16:27.520 the same as what we heard from Block a little 0:16:27.560 --> 0:16:30.040 while back, but you have the details. Why is it 0:16:30.120 --> 0:16:31.600 Lassian doing this and what to doing? 0:16:31.680 --> 0:16:31.840 Well? 0:16:31.880 --> 0:16:33.680 This is the cool thing to do now if you're 0:16:33.720 --> 0:16:36.280 a software company, right, if you want to cut costs, 0:16:36.320 --> 0:16:38.640 you say it's doing to AI. A couple of years 0:16:38.680 --> 0:16:41.640 ago it was that you were flattening management layers, and 0:16:42.360 --> 0:16:45.480 today it's that AI is changing the market. And there 0:16:45.520 --> 0:16:48.000 is some truth to that, right. I mean, Elassian stock 0:16:48.160 --> 0:16:51.160 is down fifty percent on this year, and a lot 0:16:51.200 --> 0:16:54.200 of that is because investors are scared they're not adapting 0:16:54.200 --> 0:16:57.400 to AI correctly. So there is certainly some truth that 0:16:57.520 --> 0:17:00.760 AI fuels these cuts. But it's probably not quite as 0:17:00.840 --> 0:17:03.680 direct as some of these management memos make it out 0:17:03.720 --> 0:17:03.960 to me. 0:17:04.280 --> 0:17:07.720 Oh, the old AI washing debate continues, Brody, and you've 0:17:07.800 --> 0:17:09.760 just been breaking the news last week the Oracle was 0:17:09.840 --> 0:17:13.040 likely to be laying off many thousands of people that 0:17:13.160 --> 0:17:15.359 might be understood, and after their earnings, it feels as 0:17:15.359 --> 0:17:18.600 though they've filed some formal paperwork. All of this seems 0:17:18.600 --> 0:17:20.000 to be building. Are we going to hear it from 0:17:20.000 --> 0:17:22.280 other software names? We've got more earnings coming after the Bell, 0:17:22.320 --> 0:17:22.880 for example. 0:17:24.440 --> 0:17:26.680 I think it's likely that we're going to keep hearing. 0:17:26.760 --> 0:17:29.959 I mean, this whole AI job displacement question has been 0:17:30.000 --> 0:17:33.520 going for years, and it seems like it's only ramping up. Yeah, 0:17:33.520 --> 0:17:36.760 I mean tonight we have Adobe. Notably, they haven't done 0:17:36.760 --> 0:17:40.400 a big scale layoff, and they're firmly in this bucket 0:17:40.480 --> 0:17:43.800 of a company that is kind of really facing a 0:17:43.800 --> 0:17:46.280 lot of skepticism from the market about their ability to 0:17:46.320 --> 0:17:47.680 compete in this AI era. 0:17:48.760 --> 0:17:51.840 Bloomberg's Brody Ford, thank you very much, indeed on all 0:17:51.880 --> 0:17:55.360 things AI, and unfortunately work at displacement. But let's talk 0:17:55.400 --> 0:17:58.800 about Netflix now. Maybe shelling out up to six hundred 0:17:58.840 --> 0:18:02.840 million dollars to Qua afflex AI startup into Positive. That's 0:18:02.880 --> 0:18:05.040 according to sources familiar with the deal. Now the movement 0:18:05.080 --> 0:18:07.639 mark one of the biggest purchases ever for the streaming giant. 0:18:08.000 --> 0:18:10.240 Here with more Blueberg's Luca Sure who covers all things 0:18:10.280 --> 0:18:14.359 media and entertainment, and well, they couldn't get Warner Brothers Discovery, 0:18:14.560 --> 0:18:17.880 so they're going in on AI. And actually it's cash 0:18:17.920 --> 0:18:20.400 portion is less, but there's some quotas they should hit. 0:18:21.560 --> 0:18:24.440 Yeah, I mean the the price was initially described to 0:18:24.480 --> 0:18:26.440 me as six hundred million dollars. I spoke to a 0:18:26.520 --> 0:18:29.359 knot different people where there is an earnout that would 0:18:29.600 --> 0:18:32.600 get to six hundred and perhaps even more. The initial 0:18:32.680 --> 0:18:35.640 upfront money is less than that, but still a big 0:18:35.680 --> 0:18:38.480 payday for a company that nobody even knew existed. Really 0:18:38.600 --> 0:18:41.600 until Netflix announced this deal, you know, Ben Affleck had 0:18:41.600 --> 0:18:44.760 been out there giving some really interesting public statements on AI, 0:18:44.880 --> 0:18:46.920 but it seemed just as sort of a curious filmmaker, 0:18:47.000 --> 0:18:48.800 not as someone who'd started his own company. 0:18:49.560 --> 0:18:52.040 The performance triggers are interesting when you just stop and 0:18:52.040 --> 0:18:54.359 look at what Interpositive does right. The tools that it 0:18:54.480 --> 0:19:00.440 makes allows filmmakers to alter existing footage. Talk a little 0:19:00.480 --> 0:19:03.200 bit about that Lucas. Why it's useful to Netflix. 0:19:04.160 --> 0:19:06.359 Yeah, well, it's useful on a couple of fronts. 0:19:06.400 --> 0:19:09.840 One is, this is an AI company that is founded 0:19:09.880 --> 0:19:12.480 by a filmmaker. It's for filmmakers, And if you listen 0:19:12.520 --> 0:19:15.960 to Ben Affleck talk, you know they don't They don't 0:19:16.040 --> 0:19:19.359 train on a bunch of existing work that's already out there. 0:19:19.359 --> 0:19:21.800 You're not going to run into copyright issues in the 0:19:21.840 --> 0:19:24.800 way that Google, Facebook, Open AI, et cetera. 0:19:24.920 --> 0:19:28.280 Are. You are supposed to upload your movie. 0:19:28.080 --> 0:19:30.639 As you're making it or your TV show, and the 0:19:30.720 --> 0:19:33.520 model will train on what you have put into it 0:19:33.560 --> 0:19:36.639 and can then help you change your shots, adapt your shots, 0:19:36.680 --> 0:19:40.800 take things out, adjust certain backgrounds. And so it's exactly 0:19:40.840 --> 0:19:44.159 what Hollywood should want in an AI product, which I 0:19:44.160 --> 0:19:46.640 think is helpful to Netflix because most people in Hollywood 0:19:46.640 --> 0:19:48.840 are going to be very mistrustful of companies like Netflix 0:19:48.880 --> 0:19:50.760 and Amazon when it comes to AI. They're going to 0:19:50.800 --> 0:19:53.359 assume that they are out to do sort of what 0:19:53.400 --> 0:19:56.159 you were just talking about with with Brody Right job displacement. 0:19:57.040 --> 0:20:00.760 This is a lot of money. How lo is the 0:20:00.840 --> 0:20:04.320 scale of the engineering talent, the scale of the company. 0:20:04.440 --> 0:20:08.080 How long has been Affleck been building this basically in stealth. 0:20:09.240 --> 0:20:11.200 The company is only a couple of years old, the 0:20:11.359 --> 0:20:15.200 staff is still quite sparse. I think the number caught 0:20:15.240 --> 0:20:17.520 a lot of people, including myself, off guard, which is 0:20:17.560 --> 0:20:19.439 one of the reasons why we ended up reporting it 0:20:19.480 --> 0:20:21.639