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Speaker 1: From Mahard where Innovation, Money and Power Collie in Silicon Valley, NBN.

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Speaker 1: This is Bloomberg Technology with Caroline Hyde and.

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Speaker 2: Ed lud Love.

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Speaker 3: And Caroline Hyde in San Francisco. Ed Lulow is off.

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Speaker 3: This is Bloomberg Technology coming up the US set to

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Speaker 3: unveil sweeping tarras on China targeting EVS, batteries and more

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Speaker 3: details ahead. Plus we'll sit down with the CEOs of

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Speaker 3: Grinder of Akamai to break down their latest earnings results

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Speaker 3: and Apple apologizing for its latest ad after the online backlash.

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Speaker 3: We'll discuss that and so much more throughout this hour. First,

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Speaker 3: it's going to quick check on these markets and look,

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Speaker 3: it is three straight weeks of games, folks. That is

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Speaker 3: the best winning street we've seen since back in February.

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Speaker 3: But on the day, we're actually just pulling back a little,

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Speaker 3: only two percent on the NASDAK. Some mixed economic data

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Speaker 3: coming through, in particular some of the confidence consumer confidence

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Speaker 3: actually falling quite significantly in the previous month. That because

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Speaker 3: of lingering inflationary issues, labor side concerns. But nevertheless we're

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Speaker 3: down some two tens percent. But the sock six hundred

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Speaker 3: over in Europe on a tear are up eight tens

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Speaker 3: ofven percent, and in fact we are have just a

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Speaker 3: real run of good gains in Europe as we see

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Speaker 3: earnings beat time after time, every single industry group up

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Speaker 3: to finish the day over in Europe. Bitcoin echoing some

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Speaker 3: of that slight risker version, but notably we're also seeing

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Speaker 3: well the first time you're seeing crypto exchange volume are

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Speaker 3: actually falling in about seven months. So post bitcoin etf

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Speaker 3: slight pullback, slight reality bump, we're off by two point

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Speaker 3: six percent. Move on, have a look at some of

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Speaker 3: the individual movers that we're looking on the micro perspective,

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Speaker 3: and Warner brother Discovery actually your best performer when you're

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Speaker 3: looking at the Nasdaq one hundred at more than three percent. Yesterday,

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Speaker 3: Lucashaw breaking the news that David Saslav is looking to

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Speaker 3: control costs here once again. Maybe even more job cuts come.

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Speaker 3: Remember they've already fired some two thousand people. We could

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Speaker 3: see a real focus on ultimately profitability at the moment.

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Speaker 3: For Warner Brothers Discovery, we're seeing actually Apple off by

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Speaker 3: more than a percentage point. That we'll get into the

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Speaker 3: woes that is the pulling of the ad when it

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Speaker 3: comes to the iPad that's seemingly crushing of ingenuity and

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Speaker 3: human expression, suddenly not being liked. Apple apologizes we were

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Speaker 3: down a percentage point. Tesla also down two point three

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Speaker 3: percent earlier. I've been training higher. Now Is this something

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Speaker 3: to do with the fact that now we've got a

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Speaker 3: flip reverse on what Elon Musk is currently doing with superchargers. Yes,

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Speaker 3: he is going to be selling focusing on some five

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Speaker 3: hundred million dollars of investment in that area, swift reversal

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Speaker 3: from what we'd heard the previous week, the fact that

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Speaker 3: he was of course firing the entire team of the superchargers.

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Speaker 3: But also is this more to do with geopolitics? Is

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Speaker 3: this more to do with the fact that the Biden

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Speaker 3: administration is potentially set to unveil a sweeping decision on

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Speaker 3: China tarras next week, targeting key industries, including of for

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Speaker 3: Tesla's perspective, electric vehicles and batteries and solar cells. Would

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Speaker 3: that mean we get Chinese backlack on US producers such

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Speaker 3: as Tesla joining US and Wall Bloomberg's Mike Shephard, who's

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Speaker 3: in Washington, and my incredible reporting coming from the team

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Speaker 3: at Bloomberg, and it does seem that what this is

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Speaker 3: finally after years of decision, more focus on China and

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Speaker 3: a targeted manner.

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Speaker 4: Well, it certainly is, and I'm glad you brought it

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Speaker 4: up in that context. The team did such a terrific

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Speaker 4: job really going after this for weeks and weeks to

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Speaker 4: try to figure out when and in what manner this

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Speaker 4: decision would take place and how it would hit. And

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Speaker 4: it is really shaping up in those three areas that

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Speaker 4: you outlined. This is going to be one of the

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Speaker 4: most significant moves that Biden has made since taking office

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Speaker 4: with respect to China. It is one of the most

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Speaker 4: consequential because it affects that big round of tariffs that

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Speaker 4: Donald Trump announced back in twenty eighteen, and that has

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Speaker 4: been the subject of a lot of back and forth

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Speaker 4: with the world's second largest economy since then.

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Speaker 3: Therefore, are we expecting more back and forth? Are we

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Speaker 3: bracing ourselves to the fact that if this comes that

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Speaker 3: this does indeed target more of the evs, the solar

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Speaker 3: anity We've already seen some focus on metals, even though

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Speaker 3: then have a broad implication. Are we going to have

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Speaker 3: more tip for tat here is China going.

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Speaker 4: To respond, Well, China respond to this morning at least

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Speaker 4: with a verbal volley objecting to this. You'll recall that,

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Speaker 4: you know, with the emergence of news about the export

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Speaker 4: controls aimed against Huahwei, that they saw that as economic coercion.

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Speaker 4: They're complaining about this as well. The response to the

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Speaker 4: news last night was swift from the Chinese government.

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Speaker 1: They're concerned.

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Speaker 4: However, the retaliation from China may not come in the

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Speaker 4: areas that are directly aligned with the policy that we're seeing,

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Speaker 4: and we'll expect next week. Senator Chuck Grassley, according to

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Speaker 4: our reporting, is indicating that we may see a retaliation

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Speaker 4: in agricultural products, trying to hit America where it hurts

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Speaker 4: a different place, and it's something that in the past

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Speaker 4: has been targeted by Beijing.

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Speaker 3: Just to stay with us, Mike, we've got some breaking

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Speaker 3: news this being reported by the Wall Street Journal. So

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Speaker 3: building on the Bloomberg reporting that apparently min administration is

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Speaker 3: actually going to quadruple tariffs on Chinese evs. Now, how

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Speaker 3: broader implication is that, considering not many electric vehicles are

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Speaker 3: actually shipped from China to the United States.

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Speaker 4: Well, you're right, and the whole idea of this, at

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Speaker 4: least with EVS is it's symbolic in a way, it's

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Speaker 4: low cost for the Biden administration to quadruple EVS because

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Speaker 4: there is no consumer impact at home. Remember, when you

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Speaker 4: raise tariffs, it is not the country that is targeted

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Speaker 4: with the tariffs that pays the cost. It is actually

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Speaker 4: the consumers in the purchasing country that actually pay the price,

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Speaker 4: and in this case there are. China does not have

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Speaker 4: much of an ev market presence here in the US

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Speaker 4: with its makers, So the administration is trying to do

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Speaker 4: two things. It's trying to show that it's tough without

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Speaker 4: imposing too much cost, but it is also trying to

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Speaker 4: create a bullwark so that it is harder for Chinese

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Speaker 4: makers to break into the US market, which is becoming

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Speaker 4: increasingly amenable to the idea of EVS.

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Speaker 3: We'll see also what Europe does. We know that Europe

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Speaker 3: has been focusing a lot on EVS when it comes

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Speaker 3: to China as well. Mike Shepherd bring in to have you,

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Speaker 3: thank you so much on the latest when it comes

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Speaker 3: to tariffs. Now, all of this, well is the context

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Speaker 3: with which you're trying to invest more broadly across assets

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Speaker 3: At the moment, the geopolitics is a key headwind. Let's

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Speaker 3: dive into that and the impact on equities in tech

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Speaker 3: in particular with Mona Mahazan. She's senior investment strategist to

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Speaker 3: Edward Jones. And once again we're just Monas seeing more

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Speaker 3: and more navigation necessary by big tech companies of geopolitics.

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Speaker 3: Is that an overhang for you? Yeah?

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Speaker 5: Thanks, Carolyn, It's a great question. Look, I think as

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Speaker 5: we get closer and closer at election time period, we

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Speaker 5: will be hearing more and more about the policies that

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Speaker 5: both sides of the aisle will be proposing, and a

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Speaker 5: lot of times what we see is the impact is

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Speaker 5: felt in an outside way way in certain sectors, and

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Speaker 5: technology is certainly one of them. I'd point to healthcare

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Speaker 5: as another, depending on regulation and policy that's administered. Higher taxes,

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Speaker 5: as was noted earlier, higher tariffs taxes in general does

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Speaker 5: tend to be inflationary, so we have to think about that.

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Speaker 5: Will the administration want to take that step or is

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Speaker 5: this more symbolic in nature in that we don't want

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Speaker 5: to one enter a more meaningful trade war with China,

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Speaker 5: but two we want to signal to them that they

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Speaker 5: cannot be flooding the market, whether it's EVS or any

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Speaker 5: other end market or good that they may be trying

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Speaker 5: to get into into the US. So keep in mind

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Speaker 5: some of it is signaling, some of it has real

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Speaker 5: meaningful implications for areas like technology. But we will get

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Speaker 5: more and more insight into how these policies manfold. I

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Speaker 5: think as we get closer to the November time period,

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Speaker 5: I'd say more broadly, we are looking at a market

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Speaker 5: that has been driven still by the momentum behind AI

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Speaker 5: and tech anology and megacap technology in particular, But we

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Speaker 5: do expect that to broaden over time.

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Speaker 3: And can that broadening with stan still issues you mentioned

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Speaker 3: infrastory pressure coming from Taris. Infrastry pressure is still something

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Speaker 3: that the FED is still very focused on. We're hearing

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Speaker 3: from many a FED member at the moment saying we're

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Speaker 3: going to be higher for longer. We see the stocks

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Speaker 3: just take a little bit of a dip on the

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Speaker 3: back of that context, Mona, are you expecting inflatory headwinds

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Speaker 3: to limit some of the increase in the stock markets

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Speaker 3: from here?

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Speaker 5: You know, Actually we are in the Jerome Powell camp,

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Speaker 5: who he did outline. You know, he had the famous

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Speaker 5: line he doesn't see the stag and he doesn't see

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Speaker 5: the flation. We are also of the mindset that we

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Speaker 5: do think inflation can gradually, perhaps not in a straight line,

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Speaker 5: but gradually move more meaningfully towards at two percent target.

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Speaker 5: For a couple of reasons. One, we do see that

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Speaker 5: shelter and rent component playing some catch up. We are

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Speaker 5: seeing the data in real time if you look at

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Speaker 5: a ZILLA rent index move meaningfully lower. That has not

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Speaker 5: yet showed up in any of the CPI baskets, And

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Speaker 5: even the PC basket, which is a lower part has

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Speaker 5: a lower exposure to shelter and rent still hasn't moved

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Speaker 5: meaningfully lower, So we think that's coming. Number two, we

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Speaker 5: are starting to see more meaningful potential slowdown in the

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Speaker 5: wage gains component of the labor market. So labor market

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Speaker 5: a couple of early signals of softening, not only the

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Speaker 5: non farm jobs are poured on Friday, but also the

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Speaker 5: jobless claims figure this week was elevated. We think over

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Speaker 5: time there'll be better balanced in the labor force, more

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Speaker 5: supply coming in, less demand for jobs, which will lead

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Speaker 5: to softer wage gains, which has a direct implication on

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Speaker 5: services inflation. So a combination of shelter and rent and

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Speaker 5: a softening labor market we think will lead to better

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Speaker 5: inflationary trends going forward.

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Speaker 3: That, combined with.

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Speaker 5: This earnings growth picture that we are seeing continuing to

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Speaker 5: outperform and improve meaningfully, we think is a good headwind

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Speaker 5: or sorry, tailwind for equities broadly.

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Speaker 3: Interestingly, here in San Francisco, the one key thing that

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Speaker 3: comes up time and time again is how expensive engineers are.

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Speaker 3: Whether it's particularly in the field of AI, software developers

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Speaker 3: a little bit less but still arguably about a million

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Speaker 3: in terms of their overall pay at the moment. Mona,

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Speaker 3: I'm interested in what you make there for of AI,

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Speaker 3: the tailwinds of AI more broadly, are we going to

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Speaker 3: see you mentioned the broadening out which industry groups in

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Speaker 3: particular is the healthcare industry groups that we start to

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Speaker 3: pile into.

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Speaker 5: Yeah, you know, it's a great point because thus far,

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Speaker 5: what we've seen is most of the gains from the

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Speaker 5: AI trade have been felt by the enablers of AI,

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Speaker 5: the infrastructure players, the semiconductors for example. We do think

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Speaker 5: over time you will see the sectors that will benefit

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Speaker 5: from the productivity gains of AI start to place a

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Speaker 5: meaningful catchup as well. They mentioned healthcare, that's certainly one

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Speaker 5: of the sectors, but if you look at financial services,

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Speaker 5: if you look at manufacturing and industrials, all of those

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Speaker 5: sectors we think will be beneficiaries. And this is over

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Speaker 5: you know, not a twelve month period, but probably more

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Speaker 5: like a three to five year period. We will start

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Speaker 5: to see those productivity gains come through. And keep in

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Speaker 5: mind those sectors are not only prevalent here in the US,

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Speaker 5: but globally. When you think about where manufacturing, financials, industrials

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Speaker 5: tend to lie, it does tend to be in non

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Speaker 5: US markets as well. So we think there is a

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Speaker 5: case to be made to have exposure to the US.

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Speaker 5: We like having exposure that megacap technology, but also the

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Speaker 5: sectors that may benefit from AI, but also international we

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Speaker 5: think still plays a meaningful part of your portfolio.

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Speaker 3: Thanks for going global with us. We love it. Menahajen,

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Speaker 3: great to have you on Senior Investments. Stanks Jone had

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Speaker 3: Edward Jones stay well, happy weekend. Meanwhile, well, look, maybe

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Speaker 3: not a happy weekend for some if you're looking at

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Speaker 3: the infrastructure here in the US, it's severe solar storm

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Speaker 3: is expected this weekend and it threatens to trigger blackouts,

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Speaker 3: disrupt navigation systems, knock out high frequency radios around the world.

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Speaker 3: And this is the first time, it's January two thousand

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Speaker 3: and five that the US Space where the Prediction Center,

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Speaker 3: has actually issued a G four geomagnetic storm watch. It's

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Speaker 3: the second highest on a five step scale, and it

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Speaker 3: says multiple waves of solar energy are going to be

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Speaker 3: bearing down on the planet now five eruptions, some material

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Speaker 3: from the Sun's atmosphere of forecast to arrive starting late

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Speaker 3: on Friday and persist through Sunday. Coming up, we'll hear

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Speaker 3: from Snapchat CEO Evan Spiegel. Spiegel when talking all things

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Speaker 3: social media as TikTok ban looms here in the United States,

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Speaker 3: what did he have to say at yesterday's San Francisco

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Speaker 3: tech e Ben Meanwhile, t SMC on an absolute tear.

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Speaker 3: Let's focus in on the fact that it's April sales

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Speaker 3: jumped sixty percent. You won't guess that it's a stayed

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Speaker 3: demand for AI chips with me, there's a broadening out

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Speaker 3: here as well. We've seen perhaps a bit of a

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Speaker 3: bottoming out in the global smartphone industry as well, returning

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Speaker 3: to growth for them. We're seeing it really paying out

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Speaker 3: for the world's largest contract chip maker, this will be

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Speaker 3: their technology time now for Talking Tech first up Elon

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Speaker 3: Musk's U turn on superchargers Now, the Tesla founder says

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Speaker 3: that the company will still spend well over five hundred

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Speaker 3: million dollars to grow its charging network this year. Now.

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Speaker 3: The news comes just over a week when Tesla actually

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Speaker 3: fired nearly roughly five hundred people who were running the

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Speaker 3: charging business plus for years. Now. Soft Bank has quietly

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Speaker 3: sold off billions of dollars of assets from its flagship

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Speaker 3: Vision Fund now, a sign that basically found in Masseosti's

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Speaker 3: son is shifting away from broader venture capital deals towards

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Speaker 3: investments in just semiconductors and AI.

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Speaker 4: Now.

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Speaker 3: Since the end of twenty twenty one, soft Bank's Vision

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Speaker 3: funds sort its US portfolio shrink almost twenty nine billion dollars,

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Speaker 3: and Microsoft enters the mobile gaming arena, announcing it will

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Speaker 3: launch its own version of a mobile game store by July,

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Speaker 3: taking on the likes of Apple and Google Now, the

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Speaker 3: browser based store will debut Microsoft's own games and offer

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Speaker 3: discounts on in game items Misoft says that eventually it

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Speaker 3: will open the store to other publishers at a later date.

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Speaker 3: Let's turn from gaming to social and snap CEO Evan

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Speaker 3: Spiegel is urging the government to develop a more comprehensive

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Speaker 3: framework for dealing with national security issues. Social media rival

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Speaker 3: TikTok faces a divestment or band ultimatum. Now here's part

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Speaker 3: of what he had to say at Bluebog's technology event

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Speaker 3: in San Francisco.

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Speaker 6: Always focused on communication between family and friends and making

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Speaker 6: that really fast and fun and visual, and I think

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Speaker 6: that's why we've been able to continue to grow through

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Speaker 6: all the changes that you mentioned. Now reach more than

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Speaker 6: eight hundred million people. So, you know, I think just

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Speaker 6: sticking you know, really staying focused on those close relationships.

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Speaker 6: They're the relationships that mean the most to us, are

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Speaker 6: the people we talk to most frequently.

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Speaker 1: And enriching that, you know, through Snapchat.

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Speaker 6: With visual communication, with stories, with the math that allows

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Speaker 6: people to see what their friends are up to, where

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Speaker 6: they are, what they're doing. All these sorts of products

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Speaker 6: I think help bring people close together with the people

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Speaker 6: that mean the most to them. And I think that's

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Speaker 6: really what's you know, led to our just enduring growth.

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Speaker 7: We actually have a poll, a TikTok specific poll.

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Speaker 3: What is your opinion on the TikTok ban.

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Speaker 7: I'll be bummed when TikTok is banned. TikTok should be

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Speaker 7: totally banned care either way, So please vote. Are you

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Speaker 7: a TikTok should be totally banned kind of guy like that?

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Speaker 7: Seems like it would be an opportunity for you.

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Speaker 1: It's probably a no brainer.

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Speaker 6: But really, what I think is is really important is

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Speaker 6: that we come up with a durable framework to deal

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Speaker 6: with these sorts of national security issues. I think the

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Speaker 6: United States has recognized that there are these issues, but

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Speaker 6: has sort of been dealing with them in sort of

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Speaker 6: an ad hoc, one off kind of way, And I

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Speaker 6: think that has real implications for the economy looking forward.

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Speaker 1: If you think about how.

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Speaker 6: Many businesses in the United States, you know, have a

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Speaker 6: relationship with China, you know, whether or not they manufacture

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Speaker 6: there or they sell their products there. I think it's

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Speaker 6: going to be really important for those businesses here in

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Speaker 6: the United States to get a lot of clarity around

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Speaker 6: what the government thinks is totally okay. Maybe that's like

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Speaker 6: kids toys and diapers and those sorts of things, no problem,

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Speaker 6: you know, but sensitive technology chips, you know, things that

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Speaker 6: could be used in weapons, probably not okay. And I

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Speaker 6: think the sooner that the United States government can be

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Speaker 6: clear about the areas where they think business cooperation makes

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Speaker 6: a lot of sense, and also clear about the areas

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Speaker 6: where it's you know, maybe not not okay, the more

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Speaker 6: stability we can have in our economy, and I think

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Speaker 6: we can you know, maybe better strengthen that relationship.

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Speaker 1: I think it's the uncertainty that's tricky.

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Speaker 6: So you know, I think the more the government can

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Speaker 6: share about how they're thinking about those risks and you know,

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Speaker 6: really create some clarity for business, that'll be helpful.

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Speaker 7: Now TikTok's not banned yet, there is uncertainty for some

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Speaker 7: of their really important stakeholders, like creators or advertisers. What

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Speaker 7: are you guys doing to take advantage of that uncertainty

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Speaker 7: right now?

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Speaker 6: The most important thing we can do is just focus

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Speaker 6: on our own business. Folks have lots of alternatives when

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Speaker 6: it comes to short video. You know, they can use Spotlight,

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Speaker 6: which is on our platform, or YouTube.

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Speaker 1: Shorts or you know, Instagram reels.

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Speaker 6: So I think there are a lot of different opportunities

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Speaker 6: in the short video space. So what we've continued to

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Speaker 6: do is just focus on what creators love about our platform,

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Speaker 6: which is the relationship they can form with their audience,

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Speaker 6: and that's primarily through our stories products. So creators love

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Speaker 6: using stories to just show what they're doing throughout their day.

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Speaker 6: And because we revenue, creators don't feel pressure to do

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Speaker 6: all these brand deals. So Snapchat content just feels very authentic,

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Speaker 6: which is why their viewers and their audience, you know,

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Speaker 6: really love it and why that resonates with them.

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Speaker 1: And then they use tools like Spotlight.

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Speaker 6: To get more distribution to help people discover them so

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Speaker 6: that they'll add them and watch their story on an

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Speaker 6: ongoing basis. So I think that's a pretty unique value

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Speaker 6: proposition we have for creators, and we're just going to,

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Speaker 6: you know, really stay focused on that.

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Speaker 3: Snap CEO even Spiegel yesterday, let's talk earnings now, with

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Speaker 3: Grinder posting its first quarter results showing revenue growth thirty

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Speaker 3: five percent year every year, let's discuss all of it,

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Speaker 3: the margin as well, and the expansion of products. Grinder

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Speaker 3: CEO George Arrison is here with me, and George you're

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Speaker 3: saying in your statement, this is a really strong set

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Speaker 3: of numbers. Still loss making, but much smaller loss.

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Speaker 8: How are you not a real lass from the financial perspective,

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Speaker 8: because it's all weren't related, So we'd have warrants because

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Speaker 8: we did as back and warrants are held as a

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Speaker 8: liability right, and so when you're we have an operating

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Speaker 8: profit and then a loss because of the warrants. So

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Speaker 8: from the business perspective, we didn't lose anyone and.

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Speaker 3: An adjusted EBITDAR that's showing margin, that's improving.

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Speaker 8: I mean, we did very well on even are fourty

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Speaker 8: two percent, which I think is really healthy. And we're

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Speaker 8: investing in the busines at the same time.

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Speaker 3: So and where are you investing because you do talk

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Speaker 3: about your product roadmap. In fact, you're bringing two key

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Speaker 3: products to bear a lot of technical innovation that comes

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Speaker 3: to the chat parts.

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Speaker 8: Well, yeah, so that was a really big launch for us.

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Speaker 8: We launched a new chat architecture. People would lose chats

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Speaker 8: every time they switched phones before and there was a

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Speaker 8: huge complaint. So that's not going to happen anymore because

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Speaker 8: chats were hosted locally on your device, So we moved

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Speaker 8: away from that. We are when I joined, we didn't

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Speaker 8: really have a long term part problemap. We spent a

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Speaker 8: lot of time last year working on that. We believe

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Speaker 8: there's huge extension opportunities for the product, extending it into

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Speaker 8: more into dating, building feature sets to support dating and

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Speaker 8: do that not in terms of what other people did day,

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Speaker 8: but what dating world will look like in two years

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Speaker 8: one A What like, well, AI is going to be first, right, Like,

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Speaker 8: I think people will expect that social networks will actually

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Speaker 8: drive connections through AI rather than through filtering, because today

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Speaker 8: the dating problems haven't really fundamentally changed. It is you

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Speaker 8: come to a page and then you filter what you're

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Speaker 8: interested in. I think that's going to really change.

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Speaker 3: So you're going to be pushed people because they can

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Speaker 3: the AI can already understand you exactly.

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Speaker 8: Even from activity that you do on the app, or

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Speaker 8: even activity from the outside the app. Right, Like, there's

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Speaker 8: so much information your text messages about who you are,

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Speaker 8: what you're into. What if there's a world where you

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Speaker 8: uploaded a bunch of your text messages and we use

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Speaker 8: that to understand who you are. I'm not necessarily saying

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Speaker 8: we're going to do that, but those are the kinds

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Speaker 8: of things I think that ay, I will allow companies

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Speaker 8: like us to do and so we don't have a

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Speaker 8: broad dating specific features are today. We have a lot

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Speaker 8: of dating that happens on the app through conversations and chat,

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Speaker 8: but not in terms of like features for dating specifically.

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Speaker 8: And so as we build that out, I think there's

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Speaker 8: a huge opportunity to kind of skip over the world

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Speaker 8: we're in today and go directly through the world will

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Speaker 8: be coming in a couple of years.

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Speaker 3: What's interesting is, of course that means you have to

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Speaker 3: have a lot of your community buy into that from

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Speaker 3: a security perspective, and I know that at the moment

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Speaker 3: in the UK, for example, you have been sued because

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Speaker 3: of what you claim is four years a mischaracterization of

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Speaker 3: the way that you were running the businesses practice four

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Speaker 3: years ago. But when there is a concern about privacy,

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Speaker 3: how do you start forward?

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Speaker 8: So two things. One is for us, privacy is a

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Speaker 8: paramount in sixty concerns in the world, being gay is illegal,

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Speaker 8: and we have users in most of those countries, and

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Speaker 8: so we need to really protect our user privacy because

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Speaker 8: it's not just a matter of life good for business,

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Speaker 8: it's a matter of their life and death. In some

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Speaker 8: respects and so we take that really really serious thing.

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Speaker 8: We do a lot to protect user privacy. That's where

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Speaker 8: you can get on Grinder without giving a photo, for example,

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Speaker 8: learn her the verification to support user privacy. Secondly, we've

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Speaker 8: never shared any HIV or medical information with any advertiser ever,

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Speaker 8: So it's a complete miscarpectation of what Grinder doesn't do.

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Speaker 8: We've never done that and we never will. So we're

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Speaker 8: going to fight that last suit very vigorously because we

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Speaker 8: don't think it has a merit. But it's also important

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Speaker 8: to remember that whatever they're seeing might have happened which

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Speaker 8: is not true. Happened along there claiming happened a long

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Speaker 8: time ago, two managements ago. So this is a very

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Speaker 8: different regime at Grinder today than was under Chinese ownership

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Speaker 8: in twenty and eighteen. So you know, I think that's

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Speaker 8: an important thing as well. I think users have to

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Speaker 8: trust us. That's that's really important for us, and that's

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Speaker 8: why we make privacy such a big deal at the company.

435
00:21:27,160 --> 00:21:29,600
Speaker 3: I wish we had longer, but we've got thirty seconds.

436
00:21:29,720 --> 00:21:31,440
Speaker 3: One thing you are hiring.

437
00:21:31,160 --> 00:21:33,520
Speaker 8: Again, we are We've grown our chetreeam about fifty percent

438
00:21:33,560 --> 00:21:34,760
Speaker 8: on the last quarter and we have a lot of

439
00:21:34,800 --> 00:21:36,440
Speaker 8: roles open across the company.

440
00:21:36,600 --> 00:21:39,119
Speaker 3: George, come back, thank you for talking us through it all.

441
00:21:39,160 --> 00:21:42,119
Speaker 3: Grind the CEO, George Rrison, on that thirty five percent,

442
00:21:42,160 --> 00:21:52,000
Speaker 3: you're on near growth in revenue. Welcome back to Blue

443
00:21:52,000 --> 00:21:54,800
Speaker 3: Meg Technology. I'm Caroline Hide in San Francisco, and let's

444
00:21:54,840 --> 00:21:56,879
Speaker 3: just get you a quick check on these markets, because

445
00:21:57,000 --> 00:22:00,359
Speaker 3: today we're currently seeing well, the market just a little

446
00:22:00,359 --> 00:22:02,480
Speaker 3: bit sanguine on the broader benchmark. But then as that

447
00:22:02,520 --> 00:22:04,760
Speaker 3: one hundred actually turning into the green. Now that we've

448
00:22:04,760 --> 00:22:08,879
Speaker 3: had a relative wealth of overall contexts coming from the

449
00:22:08,880 --> 00:22:11,560
Speaker 3: Federal Reserve, We've had FED speak still saying look, we're

450
00:22:11,600 --> 00:22:13,600
Speaker 3: going to be keeping these rates higher for longer. You've

451
00:22:13,600 --> 00:22:16,119
Speaker 3: also had on the flip side, some slightly weaker economic

452
00:22:16,200 --> 00:22:18,560
Speaker 3: data when you're looking at consumer sentiment. Add that together

453
00:22:18,680 --> 00:22:20,440
Speaker 3: and look, we're just still up about two tens per percent,

454
00:22:20,480 --> 00:22:22,680
Speaker 3: and in fact we're on call for the best well

455
00:22:22,720 --> 00:22:25,600
Speaker 3: a three straight week winning streak when it comes to benchmarks,

456
00:22:25,720 --> 00:22:28,040
Speaker 3: actually the longest winning street that we seen since back

457
00:22:28,040 --> 00:22:29,800
Speaker 3: to February. So we're currently higher. We're see the stock

458
00:22:29,800 --> 00:22:32,240
Speaker 3: six hundred on a tear as well. Europe once again

459
00:22:32,320 --> 00:22:34,919
Speaker 3: seeing another day of gains and that's been ramping up

460
00:22:34,960 --> 00:22:37,359
Speaker 3: higher as we see earnings doing well. We're seeing tenure

461
00:22:37,440 --> 00:22:39,920
Speaker 3: yield just up four basis points there. So still factoring

462
00:22:39,920 --> 00:22:41,320
Speaker 3: in perhaps some of the supply that we've seen this

463
00:22:41,320 --> 00:22:43,920
Speaker 3: week from the bomdernd auctions, but also perhaps still some

464
00:22:44,119 --> 00:22:46,600
Speaker 3: sensitivity to FED speech saying we're high for longer. Move

465
00:22:46,640 --> 00:22:47,800
Speaker 3: on to have a look at some of the individual

466
00:22:47,840 --> 00:22:50,440
Speaker 3: movers that we're having a look at, because ultimately we've

467
00:22:50,480 --> 00:22:53,359
Speaker 3: got key TSMC moves that we were just shining a

468
00:22:53,400 --> 00:22:55,760
Speaker 3: light on at the previous part of the show. That

469
00:22:55,840 --> 00:22:58,760
Speaker 3: TSMC up more than will call it five percent. Another

470
00:22:58,880 --> 00:23:01,600
Speaker 3: great month April, just showing that revenue is higher and

471
00:23:02,119 --> 00:23:04,400
Speaker 3: growing at a faster pace than the market had anticipated.

472
00:23:04,680 --> 00:23:08,680
Speaker 3: Of course ongoing AI demand, but also factoring a global

473
00:23:09,000 --> 00:23:11,199
Speaker 3: scene for smartphones it seems to be bottoming out and

474
00:23:11,240 --> 00:23:13,840
Speaker 3: seeing some recovery and revenue growth, so key for that

475
00:23:14,080 --> 00:23:16,000
Speaker 3: chip maker. We're looking at Tesla off by one and

476
00:23:16,040 --> 00:23:18,560
Speaker 3: a half percent, whether that's the reversal that we've seen

477
00:23:18,680 --> 00:23:21,240
Speaker 3: on its superchargers, whether or not. It's also the fact

478
00:23:21,240 --> 00:23:23,920
Speaker 3: that we're getting more tough talk coming from the US

479
00:23:24,040 --> 00:23:27,480
Speaker 3: the Bloomberg reporting that maybe we'll see increased tariffs coming

480
00:23:27,600 --> 00:23:31,040
Speaker 3: on Chinese evs in particular, and what would that mean

481
00:23:31,080 --> 00:23:32,760
Speaker 3: for the Tit for Tap? Could that hurt Tesla a

482
00:23:32,800 --> 00:23:34,840
Speaker 3: little bit? So we're seeing it just down and video

483
00:23:35,000 --> 00:23:36,639
Speaker 3: at one point four percent. Doesn't look like some of

484
00:23:36,640 --> 00:23:38,840
Speaker 3: the chip makers are going to potentially be hit anymore

485
00:23:39,000 --> 00:23:40,480
Speaker 3: when it comes to the Tit for tat with US

486
00:23:40,480 --> 00:23:43,000
Speaker 3: and China. Remember we've got in VideA earnings still to come.

487
00:23:43,320 --> 00:23:45,200
Speaker 3: But meanwhile, I want to take a quick like another

488
00:23:45,280 --> 00:23:48,720
Speaker 3: key stock ack am I currently falling now? This is

489
00:23:48,800 --> 00:23:52,000
Speaker 3: after forecasts for revenue and adjusted earnings per share came

490
00:23:52,040 --> 00:23:54,720
Speaker 3: in well less than where the market had wanted to

491
00:23:54,720 --> 00:23:56,919
Speaker 3: see it. Here to walk us through some of the

492
00:23:57,000 --> 00:23:59,639
Speaker 3: numbers and the content distribution part in particular, that seems

493
00:23:59,640 --> 00:24:02,159
Speaker 3: to be the weness. As a CEO, Tom Laton and

494
00:24:02,560 --> 00:24:06,120
Speaker 3: security revenue was good, up twenty one percent, Compute revenue

495
00:24:06,119 --> 00:24:09,000
Speaker 3: good up twenty five percent. But it's a delivery revenue

496
00:24:09,119 --> 00:24:12,040
Speaker 3: that is under pressure. Is that what's really hitting the

497
00:24:12,080 --> 00:24:13,120
Speaker 3: revenue forecasts?

498
00:24:14,080 --> 00:24:18,439
Speaker 9: Yes, exactly right. You know Internet traffic always increases, but

499
00:24:18,520 --> 00:24:21,159
Speaker 9: it's not in a straight line. And we have the

500
00:24:21,200 --> 00:24:25,200
Speaker 9: world's largest content delivery network, and so when there are dips,

501
00:24:25,240 --> 00:24:28,439
Speaker 9: we feel it. The good news is that we really

502
00:24:28,440 --> 00:24:32,000
Speaker 9: diversified our business beyond delivery to the point where now

503
00:24:32,040 --> 00:24:36,119
Speaker 9: two thirds of our revenue is security and compute, and

504
00:24:36,160 --> 00:24:39,480
Speaker 9: as you noted, both of those businesses are very strong,

505
00:24:40,280 --> 00:24:43,719
Speaker 9: great growth and great potential. And I think over time,

506
00:24:44,200 --> 00:24:46,320
Speaker 9: as we have more and more of our revenue from

507
00:24:46,400 --> 00:24:49,440
Speaker 9: security and compute, you know, the dips you get from

508
00:24:49,480 --> 00:24:52,600
Speaker 9: time to time and Internet traffic, we won't see as

509
00:24:52,600 --> 00:24:54,480
Speaker 9: noticeably on our overall performance.

510
00:24:55,440 --> 00:25:00,320
Speaker 3: Interesting diversification key what's took me my interest was a

511
00:25:00,400 --> 00:25:04,399
Speaker 3: large social media customer optimizing its costs. As what was

512
00:25:04,440 --> 00:25:06,840
Speaker 3: put forward as to why you've downgraded so many outlooks.

513
00:25:07,520 --> 00:25:10,080
Speaker 3: Who is the social media player? Are we seeing that

514
00:25:10,160 --> 00:25:10,960
Speaker 3: more broadly.

515
00:25:10,720 --> 00:25:13,879
Speaker 9: Or is it just one Well, we do have a

516
00:25:14,040 --> 00:25:18,880
Speaker 9: very large social media company and they are cutting back

517
00:25:19,160 --> 00:25:22,040
Speaker 9: as best they can on costs, you know, facing some

518
00:25:22,280 --> 00:25:26,800
Speaker 9: geopolitical pressures, I would say more broadly. You know, we've

519
00:25:26,840 --> 00:25:29,639
Speaker 9: seen sort of a week past couple of months in

520
00:25:29,720 --> 00:25:34,119
Speaker 9: the gaming vertical and in video, and there's been a

521
00:25:34,160 --> 00:25:37,760
Speaker 9: lot of reports out there talking about you know, subscriber numbers,

522
00:25:38,560 --> 00:25:40,840
Speaker 9: you know, and traffic as a whole. And so we

523
00:25:40,920 --> 00:25:44,120
Speaker 9: feel that because you know, we carried most of all

524
00:25:44,160 --> 00:25:47,240
Speaker 9: the video out there and a very big for the

525
00:25:47,240 --> 00:25:49,840
Speaker 9: gaming companies, and so that creates a little bit of

526
00:25:50,280 --> 00:25:52,760
Speaker 9: a dip in our outlook for the year. That said,

527
00:25:52,800 --> 00:25:56,960
Speaker 9: we raised our outlook on security and compute, both of

528
00:25:57,000 --> 00:25:58,639
Speaker 9: those business is very strong.

529
00:26:00,080 --> 00:26:02,960
Speaker 3: Tom, You're the perfect person to therefore ask, because I'm

530
00:26:02,960 --> 00:26:06,520
Speaker 3: reading between the lines here. A geopolitically affected social media

531
00:26:06,560 --> 00:26:08,919
Speaker 3: company has got to be TikTok, and I know that

532
00:26:08,960 --> 00:26:11,120
Speaker 3: you have expertise when it comes to security and more

533
00:26:11,119 --> 00:26:13,040
Speaker 3: broadly an exposure. At the moment that we're seeing of

534
00:26:13,119 --> 00:26:17,679
Speaker 3: US companies to China, how much you seeing geopolitics weighing

535
00:26:17,680 --> 00:26:19,400
Speaker 3: on your business and the business of your clients.

536
00:26:20,640 --> 00:26:24,800
Speaker 9: Well, there is some concern there, and you know we

537
00:26:25,040 --> 00:26:27,720
Speaker 9: made a disclosure that in particular, if the law does

538
00:26:27,760 --> 00:26:31,959
Speaker 9: take effect banning TikTok, that could impact about a percent

539
00:26:32,000 --> 00:26:35,399
Speaker 9: and a half of our revenue next year. You know,

540
00:26:35,440 --> 00:26:38,399
Speaker 9: it shouldn't have a direct impact this year, and it

541
00:26:38,440 --> 00:26:41,800
Speaker 9: remains to be seen if the law will go into effect.

542
00:26:43,280 --> 00:26:45,760
Speaker 3: Are you trying to diversify out of exposure to China

543
00:26:45,800 --> 00:26:46,080
Speaker 3: more and.

544
00:26:46,040 --> 00:26:49,760
Speaker 9: More time well, we want to diversify our company as

545
00:26:49,800 --> 00:26:52,919
Speaker 9: a whole. Today we have seven customers at one percent

546
00:26:52,920 --> 00:26:55,719
Speaker 9: of revenue, and you know the goal is to have

547
00:26:55,760 --> 00:26:58,000
Speaker 9: a broader and broader base, and I think we've done

548
00:26:58,000 --> 00:27:00,880
Speaker 9: a really good job of that, both within the customer

549
00:27:00,920 --> 00:27:05,760
Speaker 9: base and also across product lines and geographies, so that

550
00:27:05,880 --> 00:27:08,040
Speaker 9: you know, you won't see much of an impact, you know,

551
00:27:08,119 --> 00:27:11,040
Speaker 9: as we go forward, when you know particular things happen

552
00:27:11,119 --> 00:27:15,040
Speaker 9: on the political stage, or you get a dip in traffic.

553
00:27:16,280 --> 00:27:18,080
Speaker 3: And I mean with the wealth of patterns that you

554
00:27:18,160 --> 00:27:21,360
Speaker 3: have and the focus on security, where are we in

555
00:27:21,400 --> 00:27:24,800
Speaker 3: the cybersecurity landscape? How much are you seeing in particularly

556
00:27:24,840 --> 00:27:28,120
Speaker 3: the age of artificial intelligence, it becoming harder and harder

557
00:27:28,640 --> 00:27:30,719
Speaker 3: to ensure that we are protected in some way from

558
00:27:30,760 --> 00:27:31,200
Speaker 3: our data.

559
00:27:32,240 --> 00:27:35,240
Speaker 9: Yeah, things are in a very challenged state with cybersecurity,

560
00:27:35,920 --> 00:27:39,280
Speaker 9: particularly with the advances in gen ai, which as of

561
00:27:39,359 --> 00:27:43,080
Speaker 9: now are very helpful to the attacker. It's much easier

562
00:27:43,080 --> 00:27:47,560
Speaker 9: for them to generate very malicious malware. We're seeing a

563
00:27:47,640 --> 00:27:50,880
Speaker 9: lot more breaches and I think the key now really

564
00:27:51,080 --> 00:27:54,159
Speaker 9: is to develop the internal layer of defense for an

565
00:27:54,240 --> 00:27:57,080
Speaker 9: enterprise because probably you're going to get breached and the

566
00:27:57,160 --> 00:28:00,560
Speaker 9: key is to identify it quickly and to proact block

567
00:28:00,640 --> 00:28:03,960
Speaker 9: it spread. And there we have the market leading solution

568
00:28:04,119 --> 00:28:07,720
Speaker 9: with guardacoor to stop the spread of ransomware and data

569
00:28:07,760 --> 00:28:11,640
Speaker 9: exfiltration malware. And that's a very rapidly growing segment.

570
00:28:11,320 --> 00:28:14,960
Speaker 3: For US and a key acquisition made Tom Layton thank

571
00:28:14,960 --> 00:28:17,480
Speaker 3: you so much spending time with us Yakami a CEO,

572
00:28:18,080 --> 00:28:22,200
Speaker 3: on all of geopolitics and indeed the revenue from the business. Meanwhile,

573
00:28:22,600 --> 00:28:24,880
Speaker 3: at our Bloomberg Technology event, I actually talked a little

574
00:28:24,880 --> 00:28:27,880
Speaker 3: bit more around AI but the infrastructure within coming from

575
00:28:28,000 --> 00:28:32,040
Speaker 3: chip makers MPARE Computing. The CEO, Renee James, was on

576
00:28:32,119 --> 00:28:34,199
Speaker 3: stage with me to discuss the state of well the

577
00:28:34,200 --> 00:28:36,600
Speaker 3: semiconductor industry, some of the competition there. Take to listen.

578
00:28:38,440 --> 00:28:40,760
Speaker 10: I had worked in semi conductors obviously a long time,

579
00:28:41,200 --> 00:28:46,760
Speaker 10: and one of the unexplored areas was continuing to deliver

580
00:28:47,120 --> 00:28:50,160
Speaker 10: performance but a lower and lower and lower power because

581
00:28:50,200 --> 00:28:52,400
Speaker 10: one of the things that we had the luxury of

582
00:28:52,440 --> 00:28:56,240
Speaker 10: doing in the early days of high performance semi conductors

583
00:28:56,640 --> 00:28:59,480
Speaker 10: was just to use more power, like make them more powerful.

584
00:29:00,040 --> 00:29:02,120
Speaker 10: We got faster, but we threw more power at it.

585
00:29:02,520 --> 00:29:04,280
Speaker 10: So when we started the company, we said you know,

586
00:29:04,440 --> 00:29:06,680
Speaker 10: we don't need to start a company to prove that

587
00:29:06,720 --> 00:29:10,040
Speaker 10: we know how to make semi conductors or that to

588
00:29:10,160 --> 00:29:12,560
Speaker 10: do what we'd already done. So really what we wanted

589
00:29:12,600 --> 00:29:16,320
Speaker 10: to pioneer is what we call technical term efficiency frontier,

590
00:29:16,760 --> 00:29:20,920
Speaker 10: which is that knife sedge between super high performance but

591
00:29:21,000 --> 00:29:23,640
Speaker 10: at lower power. And up until the time that we

592
00:29:23,680 --> 00:29:27,640
Speaker 10: started ampere, low power met low performance, okay, and so

593
00:29:27,680 --> 00:29:29,640
Speaker 10: people would think about it and they'd be like, oh, yeah,

594
00:29:29,680 --> 00:29:32,120
Speaker 10: we have a super low power device, like is it

595
00:29:32,320 --> 00:29:34,520
Speaker 10: for a cell phone or is it you know whatever,

596
00:29:34,720 --> 00:29:36,280
Speaker 10: even though nowadays phones.

597
00:29:35,960 --> 00:29:37,280
Speaker 3: Are super bowful.

598
00:29:37,880 --> 00:29:43,200
Speaker 10: So we endeavored to build products that could be air cooled.

599
00:29:43,840 --> 00:29:47,840
Speaker 10: And we of course had been building microprocessors. My core

600
00:29:47,880 --> 00:29:50,280
Speaker 10: team and I that started the company. We'd been building

601
00:29:50,320 --> 00:29:52,920
Speaker 10: microprocess for a long time, as you pointed out, and

602
00:29:53,560 --> 00:29:57,160
Speaker 10: we of course knew that you know, that mL AI

603
00:29:57,480 --> 00:30:01,080
Speaker 10: was a major workload. We're thinking a lot about how

604
00:30:01,160 --> 00:30:03,680
Speaker 10: much power takes and how are we going to even

605
00:30:03,720 --> 00:30:05,800
Speaker 10: be able to build all these data centers because we

606
00:30:05,880 --> 00:30:08,520
Speaker 10: had we had been a team that had worked together

607
00:30:08,800 --> 00:30:10,520
Speaker 10: on the first phase of build out of what you

608
00:30:10,640 --> 00:30:13,920
Speaker 10: now call hyperscalers, and we knew how big these data

609
00:30:13,920 --> 00:30:17,760
Speaker 10: centers were getting and how much power these chips the combination.

610
00:30:17,480 --> 00:30:20,360
Speaker 3: Right, So that was our thesis.

611
00:30:20,520 --> 00:30:22,920
Speaker 10: You can do this at lower power. You can do

612
00:30:23,000 --> 00:30:27,520
Speaker 10: this in a way that enables all these workloads and

613
00:30:27,600 --> 00:30:30,160
Speaker 10: stay air cooled, which means you don't have to build

614
00:30:30,160 --> 00:30:32,840
Speaker 10: a brand new data center with liquid cooling, and that

615
00:30:32,920 --> 00:30:36,360
Speaker 10: you can stay within the envelope of kind of you know,

616
00:30:36,680 --> 00:30:41,120
Speaker 10: think about being landlocked. When you build a data center,

617
00:30:41,160 --> 00:30:43,120
Speaker 10: you have a certain amount of power in that footprint.

618
00:30:43,280 --> 00:30:45,480
Speaker 10: How are you going to ever upgrade to better compute.

619
00:30:47,840 --> 00:30:51,479
Speaker 3: It's a relatively new chip company and it's making inroads

620
00:30:51,520 --> 00:30:54,080
Speaker 3: into market share and PR computing CEO and A James there.

621
00:30:54,240 --> 00:30:56,600
Speaker 3: Of course, twenty eight years you'd had an Intel before

622
00:30:56,640 --> 00:30:59,160
Speaker 3: spotting her own company coming up, we're going to be

623
00:30:59,240 --> 00:31:03,200
Speaker 3: joined by Index's partners, Nina at Chatian. She's scared her

624
00:31:03,240 --> 00:31:06,240
Speaker 3: take on AI investing trends of course, where she's seeing

625
00:31:06,240 --> 00:31:08,280
Speaker 3: the hype in the reality that's next this will be

626
00:31:08,360 --> 00:31:12,320
Speaker 3: my technology.

627
00:31:18,320 --> 00:31:20,120
Speaker 5: I think twenty twenty four is going to be a

628
00:31:20,160 --> 00:31:21,600
Speaker 5: monumental year for AI.

629
00:31:21,880 --> 00:31:24,400
Speaker 2: The current generation of models that we're seeing out there

630
00:31:24,480 --> 00:31:27,320
Speaker 2: is still in one hundred million dollar range, you know,

631
00:31:27,480 --> 00:31:29,600
Speaker 2: I think all of this can scale to one hundred

632
00:31:29,600 --> 00:31:30,600
Speaker 2: billion dollar range.

633
00:31:30,720 --> 00:31:33,719
Speaker 1: LAMA three should not be open source. It's a national

634
00:31:33,800 --> 00:31:35,480
Speaker 1: security has to open source.

635
00:31:35,520 --> 00:31:38,240
Speaker 11: We are trying to be the most responsible actors that

636
00:31:38,280 --> 00:31:42,720
Speaker 11: we can be and think about what are the potential

637
00:31:43,080 --> 00:31:47,080
Speaker 11: externalities that could be caused kind of accidentally by this tech.

638
00:31:47,160 --> 00:31:51,200
Speaker 5: I also worry about over hyping of human extinction risk.

639
00:31:51,440 --> 00:31:53,680
Speaker 1: I think that is blown out of control.

640
00:31:53,880 --> 00:31:57,720
Speaker 6: I feel like today every single company has to guild

641
00:31:57,760 --> 00:32:00,200
Speaker 6: their own AI.

642
00:32:00,400 --> 00:32:03,040
Speaker 1: They run the risk of being left behind.

643
00:32:05,680 --> 00:32:09,000
Speaker 3: Yet the theme there it was AI of cross every

644
00:32:09,040 --> 00:32:12,120
Speaker 3: single conversation yesterday when we're at the Blueback Technology event,

645
00:32:12,120 --> 00:32:14,560
Speaker 3: and let's keep that conversation going. He now shady and

646
00:32:14,760 --> 00:32:17,400
Speaker 3: is with us in Next Ventures partner who joins us

647
00:32:17,480 --> 00:32:20,240
Speaker 3: to today's VC spotlight. A boy, you've been busy writing

648
00:32:20,280 --> 00:32:23,240
Speaker 3: some checks backing some AI companies and are the valuations

649
00:32:23,240 --> 00:32:23,720
Speaker 3: out of whak?

650
00:32:24,280 --> 00:32:26,200
Speaker 12: Well, thank you for having me, Caroline, It's great to

651
00:32:26,240 --> 00:32:29,600
Speaker 12: see you. Yes, there is definitely a tale of two cities.

652
00:32:29,640 --> 00:32:31,600
Speaker 12: If you are an AI company right now, you can

653
00:32:31,680 --> 00:32:34,600
Speaker 12: raise in the one hundred x er or multiple But

654
00:32:34,720 --> 00:32:37,080
Speaker 12: if you're not an AI company, it's still trending around

655
00:32:37,120 --> 00:32:39,600
Speaker 12: ten x. So there is a huge discrepancy between the

656
00:32:39,680 --> 00:32:42,320
Speaker 12: valuations for AI and everybody else where.

657
00:32:42,360 --> 00:32:46,320
Speaker 3: Are you seeing the value therefore in AI investments, where

658
00:32:46,320 --> 00:32:48,719
Speaker 3: would you want to be allocating checks when they are

659
00:32:48,760 --> 00:32:50,120
Speaker 3: at a heady price point?

660
00:32:50,240 --> 00:32:52,320
Speaker 12: Yeah, So for us, it really comes back down to

661
00:32:52,360 --> 00:32:55,480
Speaker 12: the basics. Is this company building something that has true

662
00:32:55,640 --> 00:32:58,320
Speaker 12: ROI for their customers? And we're really seeing that a

663
00:32:58,320 --> 00:33:02,280
Speaker 12: lot in the application layer sometimes focus on very specific verticals.

664
00:33:02,320 --> 00:33:05,720
Speaker 12: For example, we invested in this company called Viscom. They

665
00:33:05,720 --> 00:33:09,280
Speaker 12: build software for industrial designers. So think anybody that has

666
00:33:09,320 --> 00:33:12,400
Speaker 12: to design a shoe, a car, a piece of furniture

667
00:33:12,960 --> 00:33:16,640
Speaker 12: may use AI to help these industrial designers accelerate their process.

668
00:33:17,000 --> 00:33:19,840
Speaker 12: And they had some inbound interest very early on from

669
00:33:19,920 --> 00:33:23,320
Speaker 12: huge companies like Ford and New Balance, And so those

670
00:33:23,320 --> 00:33:25,960
Speaker 12: are really the areas that we find attractive to invest

671
00:33:26,400 --> 00:33:29,560
Speaker 12: clear customer, clear ROI, and of course over time we'll

672
00:33:29,600 --> 00:33:30,440
Speaker 12: see more and more of these.

673
00:33:30,480 --> 00:33:32,640
Speaker 3: Hopefully you're leading the team here in San Francisco, and

674
00:33:32,720 --> 00:33:35,120
Speaker 3: I'm sure there's many an entrepreneur who've used US who's

675
00:33:35,200 --> 00:33:39,120
Speaker 3: interested in how therefore this called gets your interest? How

676
00:33:39,200 --> 00:33:41,120
Speaker 3: did they get your inbound? Did they come to you?

677
00:33:41,200 --> 00:33:43,560
Speaker 3: Do you come to them? How you finding out these

678
00:33:43,640 --> 00:33:44,360
Speaker 3: jewels in the rough.

679
00:33:44,600 --> 00:33:47,120
Speaker 12: Yeah, Well, for us, it's all about investing in people,

680
00:33:47,200 --> 00:33:49,920
Speaker 12: and so we try to build relationships with folks very early.

681
00:33:50,040 --> 00:33:52,760
Speaker 12: Sometimes this is while they're still at their current job,

682
00:33:52,960 --> 00:33:55,560
Speaker 12: or it could be through a network that we have

683
00:33:55,640 --> 00:33:58,360
Speaker 12: of our own entrepreneurs. And so we really meet people

684
00:33:58,360 --> 00:34:01,480
Speaker 12: in all different avenues, whether it's a pants referrals from

685
00:34:01,480 --> 00:34:04,360
Speaker 12: our own entrepreneurs, or even just outbound, and so we're

686
00:34:04,360 --> 00:34:06,200
Speaker 12: always open to meet great entrepreneurs.

687
00:34:06,920 --> 00:34:10,040
Speaker 3: Where are some of the other use cases of AI

688
00:34:10,280 --> 00:34:12,520
Speaker 3: really peaking your appetite there? It seemed to be more

689
00:34:12,560 --> 00:34:14,840
Speaker 3: the visual perspective in the way in which ultimately we

690
00:34:14,840 --> 00:34:18,160
Speaker 3: can spark creativity. Look at the backlash the Apples ad

691
00:34:18,200 --> 00:34:20,960
Speaker 3: like there's a worry about creativity being stifled rather than

692
00:34:21,640 --> 00:34:25,200
Speaker 3: rather than augmented. But where else is oxygen intelligence and

693
00:34:25,280 --> 00:34:28,319
Speaker 3: generative AI reaping rewards for some of the companies that

694
00:34:28,360 --> 00:34:28,799
Speaker 3: you look at?

695
00:34:28,920 --> 00:34:31,359
Speaker 12: Yeah, so, I think the code generation space has been

696
00:34:31,400 --> 00:34:33,520
Speaker 12: an area that a lot of people have talked about,

697
00:34:33,800 --> 00:34:36,040
Speaker 12: and there's many companies that have popped up in the space.

698
00:34:36,080 --> 00:34:38,239
Speaker 12: But that seems one that's an obvious use case and

699
00:34:38,280 --> 00:34:40,759
Speaker 12: we've already seen a lot of customers, even Fortune five

700
00:34:40,840 --> 00:34:44,759
Speaker 12: hundreds really putting down, you know, commitment to try out

701
00:34:44,800 --> 00:34:48,960
Speaker 12: these new codegen softwares companies like Augment for example, and others,

702
00:34:48,960 --> 00:34:51,160
Speaker 12: And so we're really excited about that use case. And

703
00:34:51,200 --> 00:34:53,520
Speaker 12: then if you think about anybody that's using pen and

704
00:34:53,520 --> 00:34:56,880
Speaker 12: paper and has a lot of unstructured data, that really

705
00:34:57,000 --> 00:34:59,440
Speaker 12: is ripe for the use of AI, because now suddenly

706
00:34:59,440 --> 00:35:02,080
Speaker 12: you can make sense of all of that data and

707
00:35:02,160 --> 00:35:06,200
Speaker 12: really integrate into your workflow something that will accelerate what

708
00:35:06,239 --> 00:35:06,920
Speaker 12: you're trying to do.

709
00:35:07,719 --> 00:35:11,480
Speaker 3: That sparks my imagination back to a conversation with may

710
00:35:11,480 --> 00:35:14,279
Speaker 3: havebb yesterday of right REI, and she was saying, like,

711
00:35:14,360 --> 00:35:17,200
Speaker 3: ultimately scanning all the cools from other companies right now

712
00:35:17,200 --> 00:35:19,000
Speaker 3: who are running out of money and they would need

713
00:35:19,040 --> 00:35:21,040
Speaker 3: to be bulled. Is this something you're seeing of a

714
00:35:21,080 --> 00:35:24,799
Speaker 3: generation of AI entrepreneurs that companies off the ground but

715
00:35:24,800 --> 00:35:27,440
Speaker 3: they can't sustain it from a cost perspective. Absolutely.

716
00:35:27,480 --> 00:35:29,600
Speaker 12: I think we're going to see a lot of consolidation

717
00:35:29,719 --> 00:35:31,800
Speaker 12: in the space because everybody talks about how it's a

718
00:35:31,840 --> 00:35:34,960
Speaker 12: war for talent specifically within AI, and it's just not

719
00:35:35,000 --> 00:35:38,480
Speaker 12: sustainable that all of these companies can exist at very

720
00:35:38,560 --> 00:35:41,200
Speaker 12: high valuations when they're still very early in revenue. And

721
00:35:41,239 --> 00:35:43,120
Speaker 12: so you know, we saw that very early on with

722
00:35:43,200 --> 00:35:47,160
Speaker 12: Mosaic and Data Bricks, of course, the Inflection and Microsoft partnership,

723
00:35:47,440 --> 00:35:49,040
Speaker 12: and so I think we'll start to see more and

724
00:35:49,080 --> 00:35:52,040
Speaker 12: more of that over time, and hopefully, you know, two

725
00:35:52,120 --> 00:35:54,439
Speaker 12: plus two one plus one will equal greater than two.

726
00:35:55,120 --> 00:35:56,920
Speaker 3: Are we going to get more of these weird kind

727
00:35:56,960 --> 00:36:00,120
Speaker 3: of acquihighs though, because the Inflection Microsoft deal it was

728
00:36:00,160 --> 00:36:01,480
Speaker 3: a relatively extraordinary one.

729
00:36:01,800 --> 00:36:04,160
Speaker 12: I wish I could tell you it was extraordinary. We

730
00:36:04,200 --> 00:36:06,080
Speaker 12: were also scratching our heads a little bit on it.

731
00:36:06,280 --> 00:36:08,520
Speaker 12: But look, I think it all comes down to acquisition

732
00:36:08,560 --> 00:36:11,000
Speaker 12: of talent. And I think for a lot of companies

733
00:36:11,000 --> 00:36:13,359
Speaker 12: that have raised money and they're struggling to find that

734
00:36:13,400 --> 00:36:15,560
Speaker 12: product market fit, I think it could be an attractive

735
00:36:15,920 --> 00:36:17,160
Speaker 12: path for them moving forward.

736
00:36:17,440 --> 00:36:20,200
Speaker 3: We've only got forty seconds left, But where else, if

737
00:36:20,239 --> 00:36:22,480
Speaker 3: not AI, where can still be a good investment.

738
00:36:22,680 --> 00:36:26,160
Speaker 12: Look, I still think this transition from doing things manually

739
00:36:26,320 --> 00:36:29,239
Speaker 12: to digitizing them is really important for some of these

740
00:36:29,280 --> 00:36:32,360
Speaker 12: massive industries. For example, there's a company that I invested

741
00:36:32,360 --> 00:36:34,480
Speaker 12: in called Siso. They're trying to be the work day

742
00:36:34,600 --> 00:36:37,759
Speaker 12: for the agriculture industry. So right now, in the agriculture

743
00:36:37,760 --> 00:36:40,080
Speaker 12: industry you have to do a lot of paperwork on

744
00:36:40,200 --> 00:36:43,880
Speaker 12: digital onboarding completely manually. So doing things like that and

745
00:36:43,920 --> 00:36:46,840
Speaker 12: helping those huge industries really transform to tech first, I

746
00:36:46,840 --> 00:36:48,120
Speaker 12: think is a huge opportunity.

747
00:36:48,440 --> 00:36:50,440
Speaker 3: Wish we could talk more. Nina, Thanks for coming in.

748
00:36:50,520 --> 00:36:52,879
Speaker 3: Thank great to have you here. Nina shout in which

749
00:36:52,920 --> 00:36:56,439
Speaker 3: is an Index Benures partner right based here in San Francisco. Now,

750
00:36:56,520 --> 00:36:58,160
Speaker 3: let's go back to the new meg Tech event that

751
00:36:58,239 --> 00:37:01,400
Speaker 3: was held right in this city yesterday. Flow co founder

752
00:37:01,480 --> 00:37:03,680
Speaker 3: and of course well known for being the We Work CEO,

753
00:37:03,800 --> 00:37:07,080
Speaker 3: Adam Newman, sat with our own Bradstone yesterday to discuss

754
00:37:07,400 --> 00:37:08,960
Speaker 3: his attempts to win back We Work.

755
00:37:09,000 --> 00:37:13,840
Speaker 13: Take a listen, and we're just at the middle of

756
00:37:13,880 --> 00:37:15,680
Speaker 13: all of it right now. But just to explain a

757
00:37:15,680 --> 00:37:18,200
Speaker 13: little bit more about it, our bid was six hundred

758
00:37:18,200 --> 00:37:20,040
Speaker 13: and fifty million. The bid that seems to be the

759
00:37:20,040 --> 00:37:22,080
Speaker 13: one that they're considering to confirm at the end of

760
00:37:22,120 --> 00:37:24,719
Speaker 13: the month is four hundred million. It's the difference of

761
00:37:24,719 --> 00:37:27,600
Speaker 13: two hundred and fifty million. The number is very important.

762
00:37:27,640 --> 00:37:33,560
Speaker 13: I'll explain a second. Why two when in bankruptcy and

763
00:37:33,600 --> 00:37:35,719
Speaker 13: I'm learning a lot about I've never heard anything about

764
00:37:35,719 --> 00:37:38,719
Speaker 13: it before, so it's all new. I didn't think bankruptcy

765
00:37:38,760 --> 00:37:39,719
Speaker 13: was a beauty competition.

766
00:37:40,200 --> 00:37:42,400
Speaker 2: I thought bankruptcy was where there is a line in

767
00:37:42,440 --> 00:37:44,120
Speaker 2: your in your in your brief.

768
00:37:44,200 --> 00:37:46,640
Speaker 13: Yeah, it's it is a lender brief. I thought it

769
00:37:46,680 --> 00:37:50,000
Speaker 13: was whoever is going to give the best offer, and

770
00:37:50,120 --> 00:37:51,719
Speaker 13: when you base it, you based well, what is the

771
00:37:51,719 --> 00:37:54,160
Speaker 13: other offer? What's the plan that So they show a

772
00:37:54,200 --> 00:37:56,160
Speaker 13: plan and they give numbers, and just to share a

773
00:37:56,160 --> 00:37:57,960
Speaker 13: few numbers in the plan that's going to be presented

774
00:37:58,000 --> 00:37:59,759
Speaker 13: to the judge at the end of the month. The

775
00:38:00,000 --> 00:38:02,920
Speaker 13: plan says that the average two numbers that are very

776
00:38:02,920 --> 00:38:06,960
Speaker 13: easy to track, average revenue, member and occupancy. The two

777
00:38:07,040 --> 00:38:10,440
Speaker 13: numbers that the current plan is forecasting would be the

778
00:38:10,520 --> 00:38:13,480
Speaker 13: highest numbers we have seen since twenty nineteen, which is

779
00:38:13,520 --> 00:38:15,279
Speaker 13: as far as we can go, which I would call

780
00:38:15,440 --> 00:38:19,319
Speaker 13: peak office and would hockey stick, and they would have

781
00:38:19,360 --> 00:38:21,359
Speaker 13: to achieve those numbers by the end of this year.

782
00:38:21,760 --> 00:38:26,799
Speaker 13: I'll say a little more. The profit margin of the

783
00:38:26,840 --> 00:38:29,600
Speaker 13: margin of the buildings would have to go from sixteen

784
00:38:29,600 --> 00:38:31,959
Speaker 13: percent margin, which is the last number that we saw

785
00:38:32,320 --> 00:38:36,400
Speaker 13: right before it went declared bankruptcy to twenty four percent.

786
00:38:36,920 --> 00:38:41,160
Speaker 13: That is fifty percent growth in margin by the end

787
00:38:41,200 --> 00:38:41,520
Speaker 13: of this year.

788
00:38:41,600 --> 00:38:45,000
Speaker 2: And this is under your plan or the plan this

789
00:38:45,120 --> 00:38:47,440
Speaker 2: is you're saying it's could be hyperbolic.

790
00:38:47,800 --> 00:38:49,760
Speaker 13: Oh, I'm saying it's definitely unpheasical.

791
00:38:49,800 --> 00:38:50,719
Speaker 1: But let me just ask you.

792
00:38:50,840 --> 00:38:54,600
Speaker 2: I mean, don't the creditors have a legal requirement to,

793
00:38:55,080 --> 00:38:58,000
Speaker 2: you know, to take the best deal? So what is

794
00:38:58,040 --> 00:39:00,600
Speaker 2: there something? And you said it's not a popular early content.

795
00:39:00,680 --> 00:39:03,520
Speaker 2: So if it was, you know, why if they looked

796
00:39:03,760 --> 00:39:07,040
Speaker 2: at your deal and perhaps had a legal requirement, had

797
00:39:07,080 --> 00:39:10,120
Speaker 2: a very very self interested requirement to take the best deal,

798
00:39:10,239 --> 00:39:14,040
Speaker 2: why why do you think that they have bypassed.

799
00:39:13,719 --> 00:39:17,000
Speaker 13: We're maybe getting we're getting very technical, but let's say one, I.

800
00:39:16,960 --> 00:39:18,280
Speaker 2: Don't think it's a technical question.

801
00:39:18,400 --> 00:39:20,839
Speaker 13: Well it is because your real question you're asking is

802
00:39:20,840 --> 00:39:23,279
Speaker 13: is the judge obligated to take the best deal or

803
00:39:23,320 --> 00:39:25,480
Speaker 13: does the judge get to choose what deal he's going

804
00:39:25,480 --> 00:39:27,320
Speaker 13: to take? And I think it gets quite technical. But

805
00:39:27,400 --> 00:39:30,120
Speaker 13: let's say something else, just about back to what I said,

806
00:39:30,239 --> 00:39:33,720
Speaker 13: from sixteen percent to twenty four percent, fifty percent growth

807
00:39:33,880 --> 00:39:37,840
Speaker 13: in one year without spending any money on an old

808
00:39:38,520 --> 00:39:41,160
Speaker 13: on a business that now has aging buildings and what

809
00:39:41,320 --> 00:39:43,959
Speaker 13: I think is one of the worst office markets maybe

810
00:39:43,960 --> 00:39:45,920
Speaker 13: in the history, but definitely of the past forty years.

811
00:39:45,960 --> 00:39:48,120
Speaker 13: Look around just here in San Francisco, but it's a

812
00:39:48,160 --> 00:39:52,560
Speaker 13: global phenomenon. If they achieve these very rosy plans that

813
00:39:52,600 --> 00:39:55,040
Speaker 13: I think are unfeasible, they would then need to in

814
00:39:55,080 --> 00:39:58,839
Speaker 13: twenty twenty five grow from that to not go cash

815
00:39:58,840 --> 00:40:04,400
Speaker 13: flow negative.

816
00:40:14,080 --> 00:40:18,360
Speaker 3: Weird old five it's going viral. That was part of

817
00:40:18,440 --> 00:40:23,399
Speaker 3: Apple's recently pulled advertisement, of course, for the new iPad air.

818
00:40:23,640 --> 00:40:26,719
Speaker 3: The company facing backlash online after the ad depicted so

819
00:40:26,800 --> 00:40:29,319
Speaker 3: as you can see musical instruments, TVs, paint cans, other

820
00:40:29,440 --> 00:40:34,120
Speaker 3: creative tools being crushed into an iPad. Apple issued a

821
00:40:34,160 --> 00:40:36,680
Speaker 3: rare apology for the advert and said that an upset

822
00:40:36,760 --> 00:40:39,680
Speaker 3: many creators and other customers. The company also said it

823
00:40:39,719 --> 00:40:44,000
Speaker 3: will not air the ad on television as planned. Meanwhile,

824
00:40:44,080 --> 00:40:46,360
Speaker 3: let's just talk about healthcare for a moment and a

825
00:40:46,440 --> 00:40:49,520
Speaker 3: huge acquisition that Oracle did a twenty eight billion dollar

826
00:40:49,560 --> 00:40:52,600
Speaker 3: one two years ago to acquire electronic records company Serna,

827
00:40:52,840 --> 00:40:56,239
Speaker 3: promising a revolution and healthcare technology. However, interviews with more

828
00:40:56,239 --> 00:40:59,360
Speaker 3: than thirty current and former employees and customers show that

829
00:40:59,400 --> 00:41:02,560
Speaker 3: software maker has lost at least a dozen centers. Large

830
00:41:02,560 --> 00:41:04,799
Speaker 3: clients used to say that Bradie Ford is the guy

831
00:41:04,800 --> 00:41:08,840
Speaker 3: behind the very well word story and so what they're

832
00:41:08,920 --> 00:41:10,879
Speaker 3: all in on a healthcare but the clients don't seem

833
00:41:10,880 --> 00:41:12,200
Speaker 3: to slight the time together.

834
00:41:13,200 --> 00:41:15,719
Speaker 14: If you are anybody with a brain, it's hard not

835
00:41:15,760 --> 00:41:17,839
Speaker 14: to look at the healthcare system of America and say,

836
00:41:18,680 --> 00:41:19,719
Speaker 14: something's not right here.

837
00:41:19,760 --> 00:41:20,560
Speaker 1: We can fix this.

838
00:41:20,840 --> 00:41:25,399
Speaker 14: Apple's done it, Google's done it now, Oracle's done it consistently.

839
00:41:25,440 --> 00:41:28,719
Speaker 14: They found, hey, this is tough to disrupt, right, and

840
00:41:28,760 --> 00:41:31,800
Speaker 14: so Oracle said that we can buy this company, which

841
00:41:31,840 --> 00:41:34,160
Speaker 14: makes essentially if you're at the doctor's office and they're

842
00:41:34,200 --> 00:41:37,360
Speaker 14: taking notes, prescribing stuff, all the kind of software for

843
00:41:37,440 --> 00:41:40,680
Speaker 14: medical facilities they run that. They said, if we buy this,

844
00:41:40,840 --> 00:41:43,320
Speaker 14: we can integrate these systems well, put it on the cloud,

845
00:41:43,400 --> 00:41:46,680
Speaker 14: make it run easier, or a tech company gener today

846
00:41:47,400 --> 00:41:52,120
Speaker 14: grows some generative AI. Turns out it's hard. So it's

847
00:41:52,120 --> 00:41:53,880
Speaker 14: been really tough. They haven't been able to make the

848
00:41:53,920 --> 00:41:57,120
Speaker 14: progress they've wanted. The company they bought it was kind

849
00:41:57,120 --> 00:41:59,360
Speaker 14: of on a downward trajectory. So I mean, this is

850
00:41:59,400 --> 00:42:01,960
Speaker 14: not all Or's fault. But in the two years since

851
00:42:02,000 --> 00:42:06,080
Speaker 14: they've purchased it, the outcome has been revenues down, Customers

852
00:42:06,120 --> 00:42:10,200
Speaker 14: have left, They've fired three thousand plus people. It has

853
00:42:10,360 --> 00:42:13,920
Speaker 14: been tough going. And when they bought initially the talking

854
00:42:13,960 --> 00:42:16,840
Speaker 14: point was this is going to boost our earnings, revenue

855
00:42:16,840 --> 00:42:22,480
Speaker 14: growth engine. Exclusive financials we reviewed show this has not

856
00:42:22,560 --> 00:42:23,120
Speaker 14: been the case.

857
00:42:23,680 --> 00:42:26,080
Speaker 3: We've got thirty seconds. But the move to Nashville, then

858
00:42:26,239 --> 00:42:28,080
Speaker 3: I'm not gonna happen to Nashville.

859
00:42:28,160 --> 00:42:29,200
Speaker 1: Look, it's hard to say.

860
00:42:29,280 --> 00:42:31,319
Speaker 14: I saw some other documents that when they moved to

861
00:42:31,400 --> 00:42:34,960
Speaker 14: Texas more people are still in California. So what does

862
00:42:34,960 --> 00:42:37,279
Speaker 14: the headquarters mean? Is it a state of mind? Is

863
00:42:37,320 --> 00:42:38,680
Speaker 14: it where all your employees are?

864
00:42:38,840 --> 00:42:39,560
Speaker 13: We do not know.

865
00:42:40,000 --> 00:42:42,439
Speaker 3: It's a state of mind, very cooled, natural state of mind.

866
00:42:42,440 --> 00:42:44,560
Speaker 3: We thank you so much for being with us. He's

867
00:42:44,600 --> 00:42:46,279
Speaker 3: going back to New York. I'm going back to New York.

868
00:42:46,280 --> 00:42:48,400
Speaker 3: That's it for this edition of Bloombg Technology. Do not

869
00:42:48,440 --> 00:42:51,319
Speaker 3: forget to check out our podcast. You can relive so

870
00:42:51,480 --> 00:42:53,000
Speaker 3: much as the great content that came out of the

871
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Speaker 3: event yesterday at San Francisco. This is Bloomberg