Speaker 1: From the heart of where innovation, money and power collive
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily jay I met Lovelow in New York in for
Speaker 1: Emily Chang. This is Bloomberg Technology. Coming up in the
Speaker 1: next hour artificial intelligence, a humanoid robot, and a recruitment
Speaker 1: drive to power Tesla's work on full self driving. The
Speaker 1: ev maker hosts its second A I D will discuss
Speaker 1: what to expect. Plus, Bloomberg learns that super agent Ari
Speaker 1: Emmanuel is pushing a settlement between Twitter and Elon Musk.
Speaker 1: The social media company shares jump as Musks texts. Two
Speaker 1: key players are revealed, and Katie Hahn left Andres and
Speaker 1: Horowitz to start her own firm, Han Ventures. I'll sit
Speaker 1: down with her on how she plans to put the
Speaker 1: one point five billion dollars of capital she raised to
Speaker 1: work again to all that in a moment. The first
Speaker 1: let's get to the markets and wow, what an end
Speaker 1: to a week, What an end to a month? And
Speaker 1: what an end to a quart of brutal for then
Speaker 1: as that one hundred bloombergs, Baby lip Scholtz here with
Speaker 1: the latest blimey, Yeah, pretty much everything under the sea
Speaker 1: or everything trading sharply in the red today. It's really
Speaker 1: just been a brutal September. When I have multiple emails
Speaker 1: from analysts and strategists saying good riddance September, that really
Speaker 1: is a signal of all you need to know for
Speaker 1: the Nazza one, in particular, a third quarter trading in
Speaker 1: the red. That's its longest quarterly losing streak since two
Speaker 1: thousand and two. Obviously, this pain has really been across
Speaker 1: the board. You're looking at stocks trading lower than the
Speaker 1: likes of Apple, Microsoft providing the largest largest drag. Really
Speaker 1: just bad when the market is so heavily skewed to
Speaker 1: these tech giants. I think I took a bit of
Speaker 1: a pause during Friday to think when things were slightly different.
Speaker 1: We had the FED on September twenty one, and then
Speaker 1: when I look at the NASTAC one hundred, I think
Speaker 1: I'm right saying mid August we were up nineteen point
Speaker 1: three percent for the quarter or something like that, and
Speaker 1: things have changed so quickly. What is top of mind
Speaker 1: right now for investors, particularly when we look across technology
Speaker 1: and the equity markets. It's a lot of uncertainty obviously
Speaker 1: around the Federal Reserve, the intent to continue raising interest rates,
Speaker 1: keeping those interest rates higher for longer. But then when
Speaker 1: you really look at the latest leg lower and you
Speaker 1: look at Apple, Amazon, and Microsoft, there are a lot
Speaker 1: of jitters around earning season. Earnings is right on the horizon.
Speaker 1: You looked at that report from Nike that really blew
Speaker 1: out the bottom for that stock, and wait on both
Speaker 1: the Nasdaq one hundred and the down Industrial average. So
Speaker 1: concerns are really getting to the point where price to
Speaker 1: earnings are going to be something that falls under the
Speaker 1: mic right, and earnings expectations have already come down. We
Speaker 1: wait for the third quarter earnings and see how much
Speaker 1: earnings expectations full further thank you to bilian Berg's Bailey
Speaker 1: lip Sholts Right. On Friday night, Elon Musk will hold
Speaker 1: testa second ever AI date. We expect updates on full
Speaker 1: self driving, the company's in house supercomputer, and of course Optimus,
Speaker 1: a humanoid Tesla box. You may remember the Mr Roboto
Speaker 1: style dancer the joint Musk on stage last year. This
Speaker 1: time he's expected to unveil a true prototypes. Sorry, it's
Speaker 1: hard to keep a straight face with that. On the
Speaker 1: screen to get what we expect. In the latest we're
Speaker 1: joined by Bloomberg Shawn o'caine over in Austin. So, Sean,
Speaker 1: what do we expect. It's about what it looks like
Speaker 1: when I try to dance too. Um. Yeah, I think
Speaker 1: the biggest thing that we're waiting for is what kinds
Speaker 1: of demos. Musk has promised to show off a couple
Speaker 1: of different actual working demos tonight, and so I think
Speaker 1: that's going to be the thing that people take away
Speaker 1: the most. More specifically, think a lot of people in
Speaker 1: the community who are working on robotics and have studied
Speaker 1: it for a long time, you know, I think we
Speaker 1: all they all expect to see Tesla try to prove
Speaker 1: that it can differentiate somehow from some of the other
Speaker 1: companies like Boston Dynamics that are already working on this
Speaker 1: kind of stuff. And one thing we are probably going
Speaker 1: to get based on what Tesla has been tweeting and
Speaker 1: Elon Musk has been tweeting, is some sort of demonstration
Speaker 1: of manual dexterity and being able to show that the
Speaker 1: robot can really do fine motor skills, uh, you know,
Speaker 1: by doing some sort of demo whether that's you know,
Speaker 1: cracking open a beer or something like that. I don't know,
Speaker 1: I'm sure it will be something weird, maybe throwing up
Speaker 1: a giant metal ball at a cybertruck. Bring us up
Speaker 1: to speed on where Test is at with its work
Speaker 1: around our official intelligence, Right, we're really focused on on Optimus,
Speaker 1: but actually the focus to this point has really been
Speaker 1: about full self driving. Yeah. I mean they have spent
Speaker 1: a lot of time. They have a lot of engineers
Speaker 1: who have been working on the sort of underlying the
Speaker 1: fundamental research and development and engineering that goes into trying
Speaker 1: to make their cars be able to drive themselves. And
Speaker 1: they're not there yet, but they've done a ton of
Speaker 1: work going down that path, more than any other automaker.
Speaker 1: And you know, the thinking is and and the pitch
Speaker 1: from Elon Musk is like, hey, we're doing all this work,
Speaker 1: there's a way that we could leverage that into other
Speaker 1: lines of business. And so whether or not that's taking
Speaker 1: the supercomputer that they've developed and making space for other
Speaker 1: companies to use it in some capacity because maybe in
Speaker 1: some ways it exceeds what other sort of chip makers
Speaker 1: are out there doing, or taking the virtual worlds that
Speaker 1: they're building to train those AI models to power the
Speaker 1: full self driving system and finding a way to use
Speaker 1: what they're doing there, and so you know, I think
Speaker 1: that's probably one thing we maybe get a little more
Speaker 1: clarity on tonight. Musk is always very proud of the
Speaker 1: supercomputing team, and some of these things are happening, you know,
Speaker 1: far more in the background compared to sort of the
Speaker 1: electric vehicle divories and sales. So I hope we hear
Speaker 1: more about some of that tonight, but he's promised it's
Speaker 1: going to be very technical. Tesla treats all these events
Speaker 1: as recruiting events, so you know, if you're watching as
Speaker 1: a lay person, it might be hard to follow, but
Speaker 1: I'm sure there will be some some sort of dancing
Speaker 1: robot to keep you entertained. Hey, show them real quick,
Speaker 1: give us some color. What what? What do these events
Speaker 1: tend to be like? How do they tend to play out?
Speaker 1: I mean they're overwhelming when you're there. Even the vehicle
Speaker 1: reveals are always a little bit um, you know, like
Speaker 1: rock concerts, I mean they're always it's always a big stage,
Speaker 1: there's always a lot of loud music. Uh. And I
Speaker 1: was at the opening of the Austin factory earlier this year,
Speaker 1: and it was you know, Tesla took that to its
Speaker 1: most extreme and like actually hosting concerts during the event
Speaker 1: before and after Elon Musk's folks. So I don't think
Speaker 1: we're gonna get quite as much of that element tonight.
Speaker 1: It's gonna be a lot nearlier, but you never know.
Speaker 1: With Elon Musk, it can always go in a really
Speaker 1: wild direction. And so I'm I think I think I'm
Speaker 1: most interested to see is how far has the development
Speaker 1: of this robot com Does it looked like someone dancing
Speaker 1: at a suit or will that actually looks like a robot?
Speaker 1: All right, Bloomberg, Seawan Okaine, thank you very much. I
Speaker 1: want to get some more analysis and bring in p F.
Speaker 1: Farrago of New Street Research. She currently has a by
Speaker 1: rating on Tessa Stock. And I'm delighted to have you
Speaker 1: here in New York with me because you cover Tesla,
Speaker 1: but from the tech perspective, you also cover in video
Speaker 1: a chip maker that's done a lot of work around
Speaker 1: artificial intelligence, and we'll bring those themes in. What is
Speaker 1: your interest in the work that Tester is doing around AI?
Speaker 1: What do you see is the opportunity there so let's
Speaker 1: talk about like the chip space. What's very interesting is
Speaker 1: that test slat today they have these giants and your
Speaker 1: network that is driving the car for you more or less, right,
Speaker 1: and these thing still has to train to learn. And
Speaker 1: the learning cycle today on giant clusters of Nvida GPUs
Speaker 1: takes let's say five days, and the objective of dojos
Speaker 1: has developed in nose is to be able to do
Speaker 1: that over one night, right. And that's basically instead of
Speaker 1: having people working and waiting a week, is people working,
Speaker 1: going to bed, and the next morning working again. So
Speaker 1: it's a game changer in terms of the pace at
Speaker 1: which you can improve the system. That's that's all the
Speaker 1: vision of e learn and that's what the investment has
Speaker 1: been made there. It's interesting you went straight to the hardware, yes,
Speaker 1: component of this. You know a lot of Tesla fans
Speaker 1: and investors and owners that I've spelling to, they want
Speaker 1: to know about the latest beta version of full self
Speaker 1: driving updates. They want to know when there will be
Speaker 1: a wide public release. Yes, what do you expect on
Speaker 1: that front? Yeah, it's a very good questions. So Tesla
Speaker 1: has already made a lot of fo guys on the system.
Speaker 1: I personally drive the latest version of every Day I
Speaker 1: like it Alert. My assessment is that on the perception front,
Speaker 1: Tesla has made achievements nobody and you need its ability
Speaker 1: to read the world around it. The GAK can figure
Speaker 1: out what's around it, like the traffic lights or the cars, obstacles, pedestrians, bikers.
Speaker 1: I can't remember a single time my car would not
Speaker 1: perceive something around it um and I think it has
Speaker 1: been the focus of Tesla in the last in the
Speaker 1: last few years, and everybody that Sweatyland calls like real
Speaker 1: world AI interacting with the real world, and they've achieved
Speaker 1: a lot. And what's very interesting that now now that
Speaker 1: the car can deceive the world around it's the next
Speaker 1: challenge to me is what we call representation, which is
Speaker 1: making sense of what what you perceive, what you see
Speaker 1: and figuring out, okay, is that's the stuff I need
Speaker 1: to wait and wait for this car and then sneak
Speaker 1: between these two cards and things like that, And that's
Speaker 1: where I feel fs D. But as a user, I
Speaker 1: feel there's still a lot of work. It's already very impressive,
Speaker 1: but there's still a lot of work to do for
Speaker 1: really the car to step to level three where I
Speaker 1: can stop supervising it. And what I would expect today
Speaker 1: is actually Testalla to show these challenges and to show
Speaker 1: how difficult it is and what they're doing to to
Speaker 1: address the challenges, because that's the way you're getting to
Speaker 1: hire the best people on that point, what they're doing
Speaker 1: to address it, you know, Elon Musk builds. This is
Speaker 1: a recruitment event. I did a Twitter pole, you know,
Speaker 1: and I asked Tesla owners, fans, investors, what are they
Speaker 1: interested in? And of course you see on your screen
Speaker 1: they're interested in lot mess the humanoid robot. I mean,
Speaker 1: how interested you in the robot itself? You know, what
Speaker 1: do you see? Do you see that as a product
Speaker 1: or it's just an in house tool or a gimmick.
Speaker 1: What's your read I'm going to be interested in exactly
Speaker 1: in the same thing. I want the test let's him
Speaker 1: to tell me how far have they're gone. And I
Speaker 1: don't explain them to to have been to have gone
Speaker 1: that far. It's quite a challenging project. But I want
Speaker 1: them to articulate what the challenges are because that's the
Speaker 1: best way they're going to be able to hire the
Speaker 1: best people like you can work with it on most
Speaker 1: you can have exposure exposure to the Tesla stock options,
Speaker 1: and you're going to work on the most interesting challenges.
Speaker 1: That's really I think what they're going to try to have.
Speaker 1: So it might be a bit disappointing for like an
Speaker 1: atlyst and investors because you're not going to see the
Speaker 1: product getting into the market anytime soon. You're going to
Speaker 1: have like very technical discussions about how do you achieve
Speaker 1: you know, like the dexterity, how do you achieve perception
Speaker 1: for a robot or like UM as I say, um
Speaker 1: representation and things like that. You've said in your previous
Speaker 1: research that Tesla is a matter of years ahead of
Speaker 1: others when it comes to ours official intelligence, and I
Speaker 1: said earlier you also cover in video and the video
Speaker 1: not just on the semi co inductor side, but broadly
Speaker 1: has done a lot of work in AI. Can you
Speaker 1: compare and contrast those two, you know, where does Tesla
Speaker 1: stand in your estimation and what has it achieved today
Speaker 1: in the field of artificial intelligence. So in the field
Speaker 1: of like real world artificial intelligence, I don't think anybody
Speaker 1: stands close to test is ahead of everybody in terms
Speaker 1: of developing systems, but remember the videos a platform players,
Speaker 1: they develop a chip and like a Nichol system for
Speaker 1: people can develop their own systems, so they are not
Speaker 1: training the same game. And what's happening today is that
Speaker 1: Tesla being so ahead of the curves, the same with
Speaker 1: Goodglele is ahead of the curves. These two players, whatever
Speaker 1: they done, they've developed their own chips and like the
Speaker 1: tipu at Google and Dodgo for for training at at Tesla,
Speaker 1: and they've done that for this reason that they need
Speaker 1: to accelerate the pace at which they develop their systems.
Speaker 1: So of course, like mainstreat, like common wisdom is that's
Speaker 1: not good for video because like the dream of Tesla
Speaker 1: is actually to turn off the Nvidia cluster and replace
Speaker 1: it by Dodgo. But I have a different take. I
Speaker 1: think it's very encouraging. It's very positive because at the
Speaker 1: end of the day, what Tesla wants is to be
Speaker 1: able to do over night what takes them several days today.
Speaker 1: So they need more and more and more processing power
Speaker 1: and as you can imagine, very few people will be
Speaker 1: able to develop their own systems. So with Tesla and
Speaker 1: Google do it, and that's the market for nvideo. So
Speaker 1: I actually see Google developing the TPU Tesla developing Dodgo
Speaker 1: as very positive leading indicator of where the market of
Speaker 1: Nvidia is going. Everybody needs more processing power to develop
Speaker 1: these models. Here. I wish we had more time, but
Speaker 1: very quickly we might get the court deliveries that this weekend.
Speaker 1: What are you expecting on that front? So I sense
Speaker 1: the SLA has produced a lot of car Wow, that's high,
Speaker 1: that's very high. I also suspect they've been struggling a
Speaker 1: bit to deliver all this car. So I think delivery
Speaker 1: is are more like a three sixty. And I think
Speaker 1: you have about twenty thousand cars that might be on
Speaker 1: boots between China and the rest of the world. All right,
Speaker 1: Pierre Ferrague, New Street Research, thank you very much. Hollywood
Speaker 1: super agent Ari Emmanuel is trying to pave the way
Speaker 1: for a potential settlement between Elon Musk and Twitter. That's
Speaker 1: according to sources, The news coming one day after Musk's
Speaker 1: text between Twitter executives, close friends and potential investors came
Speaker 1: to light. Bloombergs Max Chafkin joins us discussed, just when
Speaker 1: you think that this saga cannot get any weirder, we
Speaker 1: have a Hollywood super agent. You know, I'm not sure
Speaker 1: how seriously we should take this. I think one of
Speaker 1: the things we learned in these texts that dropped um
Speaker 1: is that there are a lot of people out there
Speaker 1: trying out trying to use their friendship with Elon Musk
Speaker 1: and sort of wheedle their way into this deal. Um.
Speaker 1: You know Ari Emmanuel of course, very very well known,
Speaker 1: very famous dealmaker. This is potentially a huge deal. I
Speaker 1: don't think it's hugely surprising that he might try to
Speaker 1: put himself in the middle of this. I don't think
Speaker 1: that's a reason to think it's going to go anywhere.
Speaker 1: So let's get onto those texts. These are texts that
Speaker 1: emerge from court filings relating to the upcoming trial, which
Speaker 1: starts October seventeenth. They go all the way back to April,
Speaker 1: which predates Musk's offer. I think we have a series
Speaker 1: of texts starting with the current Twitter CEO, Paragagrool and
Speaker 1: and basically what they seem to demonstrate is how that
Speaker 1: relationship deteriorated quite quickly, and then Elon Musk basically said,
Speaker 1: all right, I'm going to put a deal in too,
Speaker 1: make take Twitter private. Yeah, I mean one thing you
Speaker 1: learn when you read these texts that wow, like Elon
Speaker 1: Musk is talking to a lot of people. He's having
Speaker 1: direct relationships with many many people in in sort of
Speaker 1: all different domains, politics, all these billionaires. Um. And he's
Speaker 1: you know, just texting away with with Twitter ceo and
Speaker 1: it's board um and it's kind of working things out
Speaker 1: as he goes. And as you said with the with
Speaker 1: the text with Twitter ceo, you see, you know what
Speaker 1: seems like pretty diligent efforts to work with him. Uh
Speaker 1: and then uh, the deterioration the relationship happened, you know,
Speaker 1: almost immediately. We saw this play out, by the way,
Speaker 1: on Twitter as well, when Elon Musk's famously you know,
Speaker 1: tweeted a poop emoji at at the ceo of Twitter.
Speaker 1: But but it's it's pretty interesting to see this, um,
Speaker 1: you know, kind of in black and white. The other
Speaker 1: thing we learned is some of the background I suppose
Speaker 1: of how Elon Musk went out to raise tapits or
Speaker 1: outside equity financing for this deal. And in exchange with
Speaker 1: Larry Edison, he basically says, you want to get involved.
Speaker 1: He says, sure, how much? Elon Musk says, oh, two billion.
Speaker 1: Yeah you think they were, you know, talking about buying
Speaker 1: a cup of coffee or something. Larrie Elson says, oh billion,
Speaker 1: you know ish uh the I think what this shows
Speaker 1: first of all, number one, this is a hot deal.
Speaker 1: I mean, and we can debate whether the whether they're
Speaker 1: fundamentals to back that up, or whether it's just Elon Musk.
Speaker 1: But you look down the list and you see Ellison,
Speaker 1: Mark and Reason, a bunch of lesser investors, all of
Speaker 1: them basically willing to get in and on this without
Speaker 1: much of a many questions asked, um which I think
Speaker 1: you know that tells you something about how things turned out.
Speaker 1: It also tells you just the gravity around Elon Musk h.
Speaker 1: He is clearly at the top of the Silicon valley.
Speaker 1: Totem Pole. You have Mark and Resent, very influential venture
Speaker 1: capitalists basically putting up a quarter of a billion dollars,
Speaker 1: no questions asked, and and and in seeing this over
Speaker 1: and over again, including Larry Elson, another you know, rich
Speaker 1: and powerful guy. So when the news broke that Aria
Speaker 1: Emmanuel was, according to sources, brokering some kind of settlement,
Speaker 1: the shares rose at one point to their highest level
Speaker 1: since man I think we have a chart which shows
Speaker 1: the spread. You know, I look at it from time
Speaker 1: to time. It's kind of a soft indication of where
Speaker 1: wool Street sees this deal's likelihood. Where do all these
Speaker 1: tech leave us ahead of the trial? Is my question? Well,
Speaker 1: I think one of the things people have observed this
Speaker 1: already about Elon Musk, But you know, he has some
Speaker 1: things in common with the former president. And one of
Speaker 1: those things is he tends to tweet what he's actually feeling.
Speaker 1: I mean, and and so if you look at these texts,
Speaker 1: they are very interesting. They give you a sense of
Speaker 1: what is it like to live as Elon Musk. You
Speaker 1: have a lot of people hangers on, rich guys bothering
Speaker 1: you all the time. But it doesn't actually change the
Speaker 1: narrative all that much. Elon Musk has said many of
Speaker 1: the things that we learned in these texts he's already
Speaker 1: said publicly, including this thing about bots, where he was
Speaker 1: already you know, talking about bots publicly before you have
Speaker 1: a business week call him out. Recently, Twitter's woes come
Speaker 1: from Jack Dorsey being too busy with bitcoin. Very quickly,
Speaker 1: give me the overview of that. So Dorsey and and
Speaker 1: this is one interesting thing that that came out in
Speaker 1: these texts. You see Dorsey, who had just resigned from
Speaker 1: Bitcoin from Twitter, probably to spend more time with his
Speaker 1: Bitcoin u talking to Musk and saying, you know, we
Speaker 1: really need to change things. We need to we need
Speaker 1: to shake this up. Maybe it should be a protocol.
Speaker 1: He's very much whispering and Musks here encouraging him to
Speaker 1: pursue this deal and encouraging the idea that there needs
Speaker 1: to be significant change, which is kind of strange because
Speaker 1: he was the CEO until very recently. It's and it
Speaker 1: kind of tells you again the gravity around Elon Musk
Speaker 1: that Jack Dorsey thinks that this outsider can come in
Speaker 1: and do something that he, as a founder and CEO
Speaker 1: cannot do. All right, So much more to learn, Bloomberg's
Speaker 1: Max Chafkin, Thank you much more ahead, stay with us.
Speaker 1: This is Bloomberg. Google continues to collect ad revenue from
Speaker 1: crisis pregnancy centers on abortion related search terms, while failing
Speaker 1: to properly lay them as organizations that do not provide abortions.
Speaker 1: Bloom The Quick takes Medicine Mills paints the picture is
Speaker 1: Google keeping its promises on abortion information After Roe v
Speaker 1: Wade was overturned. The information that's displayed on Google products
Speaker 1: across maps, search and ads became really crucial information. Google
Speaker 1: announced that it would adjust its search engine so users
Speaker 1: could find verified abortion providers. But are Google's changes actually
Speaker 1: working in practice. Let's say we're in Lincoln, Nebraska, where
Speaker 1: it can be hard to get an abortion. If I
Speaker 1: search abortion help, the contextual labels provided by Google seem
Speaker 1: to work. You can see that the first search result
Speaker 1: clearly says does not provide abortions. In this case, the
Speaker 1: labels are working. All of these search results are for
Speaker 1: crisis pregnancy centers. That's the type of non medical organization
Speaker 1: that aims to persuade women to not get abortions. These
Speaker 1: centers pay to appear in searchers for women horse seeking
Speaker 1: abortion information. The problem is that this approach from Google
Speaker 1: doesn't seem to work in searches for adjacent terms. In September,
Speaker 1: when I searched for planned parenthood, for example, I found
Speaker 1: that Google provided no labels on any of the ads
Speaker 1: that came up in search. The top shown result was
Speaker 1: for Nebraska Parents Center, which is a known crisis pregnancy center,
Speaker 1: and there was no label. According to an investigation by
Speaker 1: Bloomberg and the Center for Countering Digital Hate. Google also
Speaker 1: failed to add these labels on other abortion related search
Speaker 1: terms like pregnancy help, abortion pills, and n a F hotline.
Speaker 1: What we're finding is that Google's tiny policy changes do
Speaker 1: actually have a big impact on whether people are able
Speaker 1: to find accurate information about abortions or if they're misled.
Speaker 1: In a statement, Google said it has clear and longstanding
Speaker 1: policies that govern abortion related ads on its platform, and
Speaker 1: it applies these rules to all advertisers. It added that
Speaker 1: the company is constantly reviewing and updating its pauses as needed.
Speaker 1: That was Bloomberg Quick Takes. Madison Mills another story we
Speaker 1: continue to watch. Our Trier has ended a deal that
Speaker 1: barred it from competing with Jewel that opens the door
Speaker 1: for the maker of Marlboro to buy an e cigarette
Speaker 1: company or develop its own vaping products. In Trier announced
Speaker 1: a twelve point eight billion investment in Jewel. As of
Speaker 1: June that Steak was worth four and fifty million. And
Speaker 1: just this hour we got the headline that Intel's Mobile
Speaker 1: I has filed for an I p O. We knew
Speaker 1: that Intel had planned the spinoff, and according to sources,
Speaker 1: that would be a lower valuation of thirty billion dollars.
Speaker 1: Very interesting time in considering the markets and a lack
Speaker 1: of companies going public. The company seeking to list on
Speaker 1: the NASDAG under the ticker m b l Y. This
Speaker 1: is Bloomberg Technology, im Ed Ludlow in New York. Rising
Speaker 1: interest rates and repeated market volatility has created a funding void,
Speaker 1: leaving many cash hungry startups scrambling for backup plans. So
Speaker 1: how long are the hard time is gonna last? Joining
Speaker 1: us for more insight is Kathy Gau, partner at Sapphire Dventures,
Speaker 1: whose investments include the likes of Fitbit and twenty three
Speaker 1: and me. Kathy is good to catch up. I've been
Speaker 1: asking venture capitalists all week, where is your head at
Speaker 1: right now? Well ed? As we know, the markets have
Speaker 1: been absolutely crazy, But I will also say there's a
Speaker 1: dynamic in the venture capital industry right now where VC
Speaker 1: firms are sitting on an unprecedented amount of dry powder,
Speaker 1: about three billion right now, sitting on the sidelines waiting
Speaker 1: to be invested into private companies. But as we sit
Speaker 1: here on the last day of Q three and look
Speaker 1: back at the quarter, deal activity is still well below
Speaker 1: that of last year, but in the past month or
Speaker 1: so I am starting to see certain pause of signals
Speaker 1: that indicate a pickup from the summer slowdown. So, first
Speaker 1: of all, more and more companies are starting to raise
Speaker 1: growth stage rounds and that's what I focused on Series
Speaker 1: B all the way to pre I p O or
Speaker 1: they're at least more open to talking to investors about
Speaker 1: a potential funding round. Number two blockbuster M and A.
Speaker 1: A few weeks ago, Adobe acquired the popular design platform
Speaker 1: Figma for twenty billion dollars and fun fact, it's actually
Speaker 1: the third largest acquisition of a subscription software company. The
Speaker 1: first one was Salesforce acquiring Slack for about twenty seven billion,
Speaker 1: and the second one was Microsoft acquiring LinkedIn for twenty
Speaker 1: six billion, So the Adobe Figma deal is definitely up
Speaker 1: there in terms of large M and A. And lastly,
Speaker 1: the I p O market is slowly showing signs of revival.
Speaker 1: Earlier this year, Instacar did file to go public, but
Speaker 1: more recently, the corporate trip management company trip Actions also filed.
Speaker 1: So all in all, the world is crazy, the markets
Speaker 1: are crazy, but as a venture capitalists, I am encouraged
Speaker 1: by some of these signals. Let's let's talk a little
Speaker 1: bit in a moment about the kind of I P
Speaker 1: O winter that we've been seeing. As you look across
Speaker 1: the startup curve, what are the headwinds right now to
Speaker 1: both deal making and also I guess the temptation to
Speaker 1: proceed with an I P A Absolutely well, you know,
Speaker 1: founders and CEOs continue to postpone fundraising number one due
Speaker 1: to the very large amount of money that they raised
Speaker 1: last year. Many companies raise mega rounds last year at
Speaker 1: very very high valuations, so they have plenty of runway
Speaker 1: to continue to grow their business commensurate with the valuations
Speaker 1: they last raise. And at the same time, of course,
Speaker 1: there's global headwinds to a lot of businesses. Uncertainty has
Speaker 1: caused a lot of fear in the market, and companies
Speaker 1: as a result are cutting back on spend, including software spend. Well, Cathy,
Speaker 1: I know you to be this kind of long term optimist,
Speaker 1: right you look at the global economy, you look long term,
Speaker 1: and you see opportunity. So what is the opportunity down
Speaker 1: the line? You know? And I'm still very long term
Speaker 1: bullish on enterprise fas I fundamentally believe that current macro
Speaker 1: challenges can actually be a catalyst for increased innovation and
Speaker 1: optimization at many companies and enterprises. Of course, buyers will
Speaker 1: continue to be very careful with spend because burn is
Speaker 1: very important, but they'll also be looking for the next
Speaker 1: and best, greatest solution, right They're looking for the best solutions,
Speaker 1: and I think it might trigger a soft software upgrade
Speaker 1: buying cycle across many of the sectors that we cover.
Speaker 1: And I think it's also important really to take the
Speaker 1: long run view. Some of the best companies have started
Speaker 1: and we're built and emerged from economic downturns, companies like Microsoft,
Speaker 1: Apple and Adobe. So caffy real quick, we were just
Speaker 1: looking at some of your portfolio companies. What is the
Speaker 1: advice to found is right now in terms of cash
Speaker 1: preservational how they use cash's talent key in this environment. Absolutely,
Speaker 1: And you know the four main things I chat with
Speaker 1: my CEOs about, uh every week is Number one cash, right,
Speaker 1: just you've got to make sure you have enough runway
Speaker 1: to hit the milestones you need if you need to
Speaker 1: raise the subsequent funding round, So CEOs are all keeping
Speaker 1: cash firm in mind. Number two is really customer attention, right,
Speaker 1: make sure your current customers are happy by delivering a
Speaker 1: great product and a great service and really listening to
Speaker 1: your needs. This is not a time to be neglecting
Speaker 1: your current customers. Um. And lastly, and this might be
Speaker 1: the most important of all in my opinion, your employees right.
Speaker 1: Continue to hire the best and develop the most talented
Speaker 1: people you can find, all right. Thanks to Caffie Gaal
Speaker 1: partner of course at Sapphire Avenches, now General Motors is
Speaker 1: taking its next dive into electric vehicles. GM president Mark
Speaker 1: Royce took my mate Bloombergs Matt Miller on an exclusive
Speaker 1: first ride into the company's e V truck, the Silverado RST.
Speaker 1: Miller joined him from the GM headquarters in Detroit, Michigan.
Speaker 1: M What people need to do is get into it
Speaker 1: and see what an electric truck really can do. And
Speaker 1: this is a dedicated platform with Ultium. You know, we're
Speaker 1: just bringing our cell plant online right now in Ohio
Speaker 1: and the second one will be in spring Hill. But
Speaker 1: the center of gravity is different. You know, We've got
Speaker 1: this will beyond sale here um in the spring with
Speaker 1: our work truck, which is uh, you know what you're
Speaker 1: probably in today, and so you know, for under forty
Speaker 1: thousand bucks and that's a that's a heck of a deal.
Speaker 1: And uh, you know, we're gonna start off with about
Speaker 1: ten thousand pounds of towing with it. We'll follow it
Speaker 1: up with twenty pounds and it's just a very capable truck.
Speaker 1: What's demand like right now, I mean, not just for
Speaker 1: the business in general, the American consumer. What's demanded? Well,
Speaker 1: we haven't seen a lot of demand UM fall off
Speaker 1: even with some of the you know, sort of the
Speaker 1: ups and downs of the economic situation that or we're
Speaker 1: seeing in in the United States. But the demand is there.
Speaker 1: I mean we we are. We are selling every single
Speaker 1: thing that we make, and we're selling it deep into
Speaker 1: the pipeline. So our dealers have really done a good
Speaker 1: job of being able to UM show people what the
Speaker 1: truck or whatever the product is UM that they want,
Speaker 1: and then when it's built, and then when it's coming
Speaker 1: and that'll just get get better as the chip UM,
Speaker 1: the chip piece of this becomes begins to level off
Speaker 1: and be more consistent. Are you seeing any signs of
Speaker 1: that light at the end of the tunnel in terms
Speaker 1: of chips? I think so. I think we're seeing you know,
Speaker 1: fourth quarter here UM A little bit of leveling off,
Speaker 1: it's nowhere near what the demand is. The demand is
Speaker 1: still going to outstrip what we can actually supply because
Speaker 1: the inventory levels are still extremely low. So it takes
Speaker 1: a while for us to get the inventory back. But
Speaker 1: that means no incentives obviously. Um. In fact, people are
Speaker 1: paying more than M S r P in a lot
Speaker 1: of situations. How long can that last? I won't last forever.
Speaker 1: There's no way that can last forever. But you know, again,
Speaker 1: until we begin to fill the pipeline again with some inventory, UM,
Speaker 1: that's going to be the case. I think, what about
Speaker 1: the electric pickup I'm not the pickup truck, I mean
Speaker 1: to pick up in terms of consumers buying electric cars.
Speaker 1: I drove the Bolt out here and it was surprisingly
Speaker 1: luxurious for a car that you basically get into for
Speaker 1: thirty five thousand after rebates, right, and it's even lower
Speaker 1: than that now. We dropped the price on it here
Speaker 1: a few months ago, and uh, you know, we're seeing
Speaker 1: I think you'll see in our quarter quarterly results that
Speaker 1: people are really interested in the Bolt as one of
Speaker 1: the probably the lowest cost ev that you can get
Speaker 1: into in the market. And you know, strategically that's great
Speaker 1: for us because our dealers begin to learn how to
Speaker 1: sell e V sum into the into the dealer footprint
Speaker 1: with our customers, and then our customers are looking for
Speaker 1: the cars so um, you know, and their supply um,
Speaker 1: and you know, we we're matching that the best we
Speaker 1: can right now. So it's a very very compelling vehicle,
Speaker 1: always has been, particularly with super cruise on the e
Speaker 1: u V, and we're seeing a lot of demand for that.
Speaker 1: What about how does the business look to you as
Speaker 1: we see rising rates, as we hear concerns about a recession,
Speaker 1: how do you plan into that? We plan into it
Speaker 1: with our cost structure and so we um, you know,
Speaker 1: four or five years ago, we really went at our
Speaker 1: cost structure and you know, we're in good shape, but
Speaker 1: we can always be better, and so we'll continually take
Speaker 1: costs unnecessary, you know, uh, cost out of the business
Speaker 1: from an efficiency standpoint, and next year will be better
Speaker 1: than this year. And that's the way we're gonna work
Speaker 1: at That was GM president Mark Royce with bloom Bags
Speaker 1: Matt Miller earlier today in the latest episode of Studio
Speaker 1: One Point, former federal prosecutor turned crypto venture capitalist Katie
Speaker 1: Horn shares her outlook on cryptocurrency markets. Horn sits down
Speaker 1: with Bloomberg Technologies Emily Chang to discuss why she left
Speaker 1: story venture capital firm Andreas and Horro Wrists to launch
Speaker 1: her own firm, Horn Ventures, and just how hard it
Speaker 1: was to do so. Take a listen. What I set
Speaker 1: out to do was to continue to invest in this
Speaker 1: ecosystem that I think is so broad. That decision was
Speaker 1: very purposeful and the timing was very purposeful. We have
Speaker 1: an early stage fund that does seed stage, Series A,
Speaker 1: even Series B, and then we have what we call
Speaker 1: an acceleration fund, which is it's not a growth fund,
Speaker 1: it's a crypto growth fund, and I think those are
Speaker 1: different things. But later stage it might be crypto publics.
Speaker 1: Um certain kinds of public tokens were set up to
Speaker 1: hold tokens and participate in the token ecosystem or later
Speaker 1: stage companies. I mean, you know there are now several
Speaker 1: crypto many crypto unicorns. The space has become really competitive.
Speaker 1: Even though you say, um, you know crypto has had
Speaker 1: its kind of ups and downs. The thing is a
Speaker 1: lot of people in some of those last cycles have
Speaker 1: seen the kind of venture style returns that can be
Speaker 1: had in crypto and so you've had a lot of
Speaker 1: new funds enter the space and that's driven up competition.
Speaker 1: So what differentiates on ventures that and from you know,
Speaker 1: all of these other crypto funds or even the more
Speaker 1: traditional venture capitalists like Entries and Herowitz or Sekoia they
Speaker 1: also have crypto fun sure well, I think a lot
Speaker 1: of traditional venture capital funds now have crypto funds. It
Speaker 1: used to just be like a regulatory designation. I was like,
Speaker 1: are you in r i A, which is Registered investment Advisor?
Speaker 1: I would say for crypto founders today, um, it's not
Speaker 1: enough to just be an r I A. Right they frankly,
Speaker 1: I don't even know if a lot of them care
Speaker 1: that's a regulatory designation. What crypto founders today want to
Speaker 1: know is do you live in breath crypto? Do you
Speaker 1: inhale the discords? Are you part of the community, do
Speaker 1: you participate in governance? Are you going to be um
Speaker 1: staking these kind of crypto verbs um out there? And
Speaker 1: if you're not really in this space full time, I
Speaker 1: think it's very hard to run a successful crypto fund.
Speaker 1: We don't have a hedge fund component, so we're not
Speaker 1: sitting here buying and trading and selling. UM. That's a
Speaker 1: hedge fund structure, and there are crypto hedge funds. Um,
Speaker 1: we're not one. We're making seven to ten ure bets.
Speaker 1: Just how hard is it to launch a crypto fund
Speaker 1: from scratch? You know it's hard, but it's not impossible.
Speaker 1: And we don't have a crystal ball. I don't know.
Speaker 1: I can't predict cycles, but I knew that we were
Speaker 1: in a cycle where you saw so much forever an
Speaker 1: excitement around the space. And I already talked about what
Speaker 1: makes us different, But I think one thing also is
Speaker 1: we are a nimble strike force. We don't fish in
Speaker 1: the same pond we have the crypto natives. We have
Speaker 1: a fish and execution. We have operators, seasoned operators who
Speaker 1: really know how to stick the landing. And I think
Speaker 1: that's reflected on our culture. I would say the only
Speaker 1: thing that's changed in our strategy as a result of
Speaker 1: the market correction is really more of a focus on
Speaker 1: early stage. But we still have our late stage fund.
Speaker 1: And when we see valuations, which I think will still
Speaker 1: see correct um spoiler, I think we'll continue to see
Speaker 1: some corrections and UM, so we might deploy our later
Speaker 1: stage fund a little bit more slowly. It might not
Speaker 1: be on an even cadence. And that's okay. Long term,
Speaker 1: our strategy hasn't changed. Long term, we're committed to this space.
Speaker 1: How much do you think valuations are going to correct?
Speaker 1: You know, it's just I can't give you a one
Speaker 1: size fits all answer because crypto is not a monolith.
Speaker 1: You have some crypto companies that really follow more of
Speaker 1: an enterprise sas business model. You have others that are
Speaker 1: layer one protocols UM. You have still others that are
Speaker 1: consumer facing applications. And I think one of the things
Speaker 1: we're seeing right now is the infrastructure layer, and that's
Speaker 1: where we're spending a lot of our time, by the way,
Speaker 1: and we think more and more use cases will come
Speaker 1: about when the infrastructure layers in place. UM So, my
Speaker 1: own view is we are not rushing to deploy. We're
Speaker 1: certainly not getting caught up. Do you get try not
Speaker 1: to avoid that, you know, Look, I think it's very
Speaker 1: easy to get into that mindset, right. It's because it's
Speaker 1: competitive sport. It's a competitive space, and I think I'd
Speaker 1: be lying if I said that that doesn't influence anyone.
Speaker 1: I try to what I do and I think I
Speaker 1: do differently, is I try to take stock of that. Oh,
Speaker 1: that's the foe mo mentality kicking in. That's bad again.
Speaker 1: You don't want to over correct though. What we look
Speaker 1: for is we look for amazing founders. It doesn't matter
Speaker 1: if I think valuations will correct. If there are amazing founders,
Speaker 1: there's a huge tam We also look for what's your
Speaker 1: regulatory plan if you're launching a token, what's your plan
Speaker 1: to comply with the law, what's your plan for security.
Speaker 1: By the way, we've seen a lot of hacks in
Speaker 1: the space. We want to really dive in there and
Speaker 1: make sure that the founders have been thoughtful. That was
Speaker 1: Horn Benches founder and CEO Katie Horn with Bloomberg Technologies
Speaker 1: Emily Chang. You can check out more of that conversation
Speaker 1: tonight at seven thirty pm Eastern four pm Pacific here
Speaker 1: on Bloomberg Television. Coming up, one company focusing on hiring
Speaker 1: hourly workers get sixty million dollars for its series B.
Speaker 1: I'll chat with the CEO of Workstream about the digitization
Speaker 1: of recruitment and state of the labor market. This is
Speaker 1: Bloomberg Workstream, a texting based hiring platform working with big
Speaker 1: brands like McDonald's and Marriott. Just raised sixty million dollars
Speaker 1: in fresh capital to help it expand to even more
Speaker 1: industries that are employing hourly workers. Let's get right to
Speaker 1: Workstream co founder and CEO Desmond Limn. Desmond, how does
Speaker 1: Workstream work? Yeah, So we are this texting base hiring
Speaker 1: software that helps you do actually saw screen actually onboard
Speaker 1: hourly workers faster. In the world of of trying to
Speaker 1: work with with with with this hourly folks, there are
Speaker 1: much more on the phone, they are much less tech
Speaker 1: like Salvy. So we actually built a software that's really
Speaker 1: built for them to be able to help them be
Speaker 1: able to hire onboard faster. So it's to me about
Speaker 1: the kind of circumstances that the workers themselves, who who
Speaker 1: you hope to hire through your platform operating? What kind
Speaker 1: of workers are these and in which industries? Yeah? Yeah,
Speaker 1: I mean we all work across a really broad, broad
Speaker 1: broad broad spens of the sacnis as. So now we
Speaker 1: all work with more than four thousand customers from Burger, King, Dairy, Queen,
Speaker 1: Merit and more. And I always say that as as
Speaker 1: of now, our main focus has been in this restaurants,
Speaker 1: but we have grewed very quickly into retail, healthcare order
Speaker 1: and like you know, much more alvious. Yeah, there's a
Speaker 1: very big difference in terms of folks who work in
Speaker 1: there's hourly death less world and those who work in
Speaker 1: tech office worker. I was saying, there's actually hourly world.
Speaker 1: People are not as tech savvy. There's very high like turnover,
Speaker 1: very high churned. Um, so there is a need to
Speaker 1: actually tell the alwhere there's really built for them. I
Speaker 1: think back to the August jobs data. You know, there's
Speaker 1: there's tens of millions of people in this economy who
Speaker 1: are working part time but by choice, and of course
Speaker 1: there are many people on the sidelines who are trying
Speaker 1: to find some part time work. You must have a
Speaker 1: very interesting lens into the state of the jobs market.
Speaker 1: What can you tell me about what your customers and
Speaker 1: clients are looking for. Are they able to get the
Speaker 1: workers that they need? Yeah, I would say that it
Speaker 1: is still very very tough to actually find talent and
Speaker 1: difine people. Staffing is to the top challenge for many
Speaker 1: of this businesses, from restaurants to retail, hotels and and more.
Speaker 1: But I think that's the very first trend that we see.
Speaker 1: Second trend that we see there many of this business
Speaker 1: they are much more open to actually embrace and to
Speaker 1: try it out software and tech. We have seen a
Speaker 1: very strong growth, almost like a tanext growth in terms
Speaker 1: of how the business owners and and really ops leaders
Speaker 1: are much more open to actually use software. So I
Speaker 1: think that that that that's been very good. I think
Speaker 1: the very the trend that we see more it's like
Speaker 1: more and more folks are trying to focus on this
Speaker 1: actually hourly worker. I would say that in the past
Speaker 1: few years that this hasn't been much focused on this
Speaker 1: audi worker, which really powers the world. Right, there's more
Speaker 1: than two point seven billion business workers in the world.
Speaker 1: There's more than eighty million auti workers in the US.
Speaker 1: It's a very big market, but it hasn't been enough
Speaker 1: good software and tech built for them. So I'll say
Speaker 1: that there's more and more needs to look towards them. Now.
Speaker 1: So you've got sixty million dollars in the bank. What
Speaker 1: do you need to do with that cash to expand
Speaker 1: your offering? What are you going to do to develop
Speaker 1: your tech? Yeah? Yeah, we are very thankful and very
Speaker 1: humble that we raised this right. I think this is
Speaker 1: really with this funding it grows out, is be the
Speaker 1: actually overall million dollars. And we have triating goals for this.
Speaker 1: First's really want to expand from our main focus of
Speaker 1: this restaurant into new vote goals, into retail, healthcare, warehouse
Speaker 1: and more, and so now beyond some of the brands
Speaker 1: that share we all work with like merit ups and
Speaker 1: many many more brands. So that's the very first goal
Speaker 1: part of this funding. Second goal that we have is
Speaker 1: really really go ahead. Yeah, I think the the goal
Speaker 1: next we have is really to build new products. Our
Speaker 1: first product is hiring. Our second product is this on
Speaker 1: on boarding helping you to actually like really really help
Speaker 1: we do smooth yarders people work faster. So I would
Speaker 1: say the next goal is really you're built new products.
Speaker 1: The final goal is really leading into our company mission,
Speaker 1: which is really to serve this to really serve this
Speaker 1: doth Las Ali worker, to build better software and tag
Speaker 1: for them. Give me very quickly, desn't really have that
Speaker 1: thirty seconds? A sense of how many workers are using
Speaker 1: your platform? Yeah, we have now more than four thousand
Speaker 1: um customers across more than stars. We have now actually
Speaker 1: helped to all domit more than ten ten ten million
Speaker 1: hourly folks with been through our our this software alright.
Speaker 1: Workstream co founder and CEO Desmond Lynn, thank you very much.
Speaker 1: A good lens on the labor market. That does it
Speaker 1: for this edition of Bloomberg Technology. Have a great weekend,
Speaker 1: and don't forget to check out our podcast. You can
Speaker 1: find it on the terminal as well as online on Apple, Spotify,
Speaker 1: and of course, as always on I Hot Radio. We
Speaker 1: made it, guys. The end of a tough week, the
Speaker 1: end of a tough month, the end of a tough
Speaker 1: quarter with volatility and financial markets, venture capitalists sitting on
Speaker 1: the sidelines for now. But we'll have a whole lot
Speaker 1: more next week. From San Francisco and New York. This
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