Speaker 1: From Marhart where Innovation, Money and power Collie in Silicon Valley, NBN.
Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed loved Love.
Speaker 2: Welcome to Bloomberg Technology. I'm Caroline Hyde live from New
Speaker 2: York and.
Speaker 3: I'm Ed Loudlow in San Francisco. This is Bloomberg Technology.
Speaker 4: Coming up.
Speaker 2: We are looking at hedge fund exposure to technology.
Speaker 4: It's hitting a record high.
Speaker 2: We get to the Outlook for Tech investing from Kristina
Speaker 2: Clark Barclay's Plus.
Speaker 3: We hear from YouTube CEO Neil Mohen on his plans
Speaker 3: to make the video platform even bigger, and we sit
Speaker 3: down with.
Speaker 4: The CEO of Ring for her first broadcast.
Speaker 2: Interview as a connected camera company gets a new mission statement.
Speaker 4: But Ed first, we check in on.
Speaker 2: These markets and we are struggling with a macropacked picture
Speaker 2: right now. We've course seeing a wall of money coming
Speaker 2: well from a supply side to the bond market. We
Speaker 2: have a big auction for the seven year debt. We're
Speaker 2: seeing forty four billion dollars. And remember auction appetite just
Speaker 2: wasn't that great for the last.
Speaker 4: Couple of days.
Speaker 2: So we're seeing Nasdaq just being pulled down as yields
Speaker 2: push higher, the sucks that sounder in Europe also down
Speaker 2: by a percentage point.
Speaker 4: It's notable though that.
Speaker 2: Nasdaq is boiltcing off of its lows. We're off down
Speaker 2: just three tenths of a percent. It's actually the best
Speaker 2: performing major benchmark here in the United States. So there's
Speaker 2: really other industry groups that runder pressure today. And as
Speaker 2: they say that seven year yield just picking up some
Speaker 2: five basis points four point six to two. We're seeing
Speaker 2: the longer end sell off harder move on though, And
Speaker 2: I want to give us the risk appetite a choice.
Speaker 2: When it comes to the tech world, Crypto also under
Speaker 2: pressure a little bit today. Bitcoin just to the downside,
Speaker 2: but not by March only a percentage point that we're
Speaker 2: sixty seven five hundred is currently where we trade. But look,
Speaker 2: there are some cautious sentiment out there at the moment.
Speaker 2: Ed what are you looking at them?
Speaker 4: On the micro So I'm looking.
Speaker 3: At the US listed share of BYD the ev maker.
Speaker 3: It's actually a pretty big story coming out of China.
Speaker 3: They have announced a hybrid drive train that is capable
Speaker 3: of doing more than twelve hundred miles or two thousand
Speaker 3: kilometers on a single charge or single fill of the tank.
Speaker 3: It's a hybrid drive train, and it's really continued to
Speaker 3: boost BYD's US listed shares. It's got a lot of
Speaker 3: people talking on social media. Check out Bloombo's coverage out
Speaker 3: of Hong Kong and learn more about what byd is doing.
Speaker 3: The other big mover here in the United States is Apple.
Speaker 3: Apple up more than a percentage point for most of
Speaker 3: the session. WWDC invites went out yesterday, I got mine.
Speaker 3: But the big news is also out of China. A
Speaker 3: court in China has dismissed the case against Apple that
Speaker 3: a consumer had brought on the issue of app store
Speaker 3: fees and commissions, and in app fees and commissions. Later
Speaker 3: in the program, we're going to go to Bloombo's Mark German.
Speaker 3: It might sound like a familiar story because it's happening
Speaker 3: here in the United States too, this time the China
Speaker 3: side of that discussion.
Speaker 2: Caroline, Yeah, and just all of this in a picture
Speaker 2: of how big tech bohemos have been doing and performing
Speaker 2: at the moment. We know Apple's been under pressure for
Speaker 2: the last couple of months beginning of this year. Really,
Speaker 2: but hedge Fund's positioning more broadly, the exposure to US
Speaker 2: tech bohemos is we just had a new record high
Speaker 2: and of course that's downto in video in many ways,
Speaker 2: it's strong earnings report last week.
Speaker 4: It's all according to gorm Sexs Prime brokerage.
Speaker 2: Their report is also saying that the so called Magnificent
Speaker 2: seven is now accounting close to twenty one percent of
Speaker 2: Hedge Fund's total net exposure to US single stocks.
Speaker 4: We want to get a sentiment check on.
Speaker 2: Big tech, on allocation and on companies going public. Kristin
Speaker 2: Roth de Clark is with US Global head of Technology
Speaker 2: Investment Banking at Barclay's, and you have so much wealth
Speaker 2: of experience and expertise within the investment banking market within
Speaker 2: technology in particular focus. You look at companies looking and
Speaker 2: I in going public. But what is ultimately the sentiment
Speaker 2: of access to growth companies in the US right now?
Speaker 5: Yeah, Look, there's been a real deretha of opportunity to
Speaker 5: invent in growth tech in the public markets. If you
Speaker 5: look just at the five hundred or so companies tech
Speaker 5: companies that are public right now that are two billion
Speaker 5: dollar market cap or more, there are only less than
Speaker 5: thirty that are growing that have grown thirty percent in
Speaker 5: the last year, and so the opportunity to invest in
Speaker 5: growth isn't really there necessarily in the public market. Their
Speaker 5: bid for IPOs is there from the investor side, but
Speaker 5: we haven't seen that translate into much activity this year,
Speaker 5: partially because of the rate environment and investors' corporates are
Speaker 5: looking more to twenty twenty five as a year of optimism,
Speaker 5: I think in the new issue market.
Speaker 2: And we add that context of the day with yields
Speaker 2: just pushing higher for longer, whether it's in Europe as well.
Speaker 2: We see German bond yields pushing higher as it looks
Speaker 2: like inflation is hard to curtail. But is it just
Speaker 2: the rate environment? Is there also element of political issues?
Speaker 2: Is that why twenty twenty five is going to really
Speaker 2: be the year to come?
Speaker 6: Yeah?
Speaker 5: I think at this point a lot of issuers are saying,
Speaker 5: you know, twenty twenty five will get through the election cycles,
Speaker 5: will get you to a place where we hopefully start
Speaker 5: to see rates come back down, so to kind of
Speaker 5: there are some issuers coming out in twenty twenty four
Speaker 5: and certainly getting a lot of attention from investors, but
Speaker 5: there's more optimism I think in twenty twenty five, and
Speaker 5: that's true for both growth companies but also super profitable
Speaker 5: businesses Inside private equity, A lot of the private equity
Speaker 5: firms are opting to do private minority stake sales to
Speaker 5: establish marks and get a little bit of liquidity instead
Speaker 5: of going to the IPO market.
Speaker 6: This year, christin good morning. Hello.
Speaker 3: I hear from a lot of founders, a lot of CEOs,
Speaker 3: a lot of people right now that are much more
Speaker 3: open minded to doing some M and A or even
Speaker 3: going private.
Speaker 6: Why is that.
Speaker 5: Yeah, take private activities increased significantly this year. It's up
Speaker 5: fifty percent in the tech industry from last year. Part
Speaker 5: of that is is an acceptance of kind of where
Speaker 5: we are from a valuation standpoint, But the other part
Speaker 5: is on the financing side. The last couple of years,
Speaker 5: the financing for LBOs have been driven by the direct
Speaker 5: lenders in the private credit market. We're now starting to
Speaker 5: see some of the more traditional funding sources in the
Speaker 5: broadly syndicated market available as well.
Speaker 3: Convertible issuance is interesting, take my word for it, it's interesting.
Speaker 3: One case study out this morning is Lenovo doing an
Speaker 3: arrangement with Saudi Arabia through one of its investment firms
Speaker 3: on very favorable terms.
Speaker 6: But it's also kind of a quid pro.
Speaker 3: Quo right where there's the financing side of it that
Speaker 3: Lenovo has to set up an R and D facility
Speaker 3: in that country.
Speaker 6: I've heard it elsewhere.
Speaker 3: In fact, I've heard of shareholders selling out of the
Speaker 3: stock buying up convertible notes in the same name.
Speaker 6: What are you seeing in that market?
Speaker 5: Well, the convertible market I think will be pretty active
Speaker 5: this year. There are a couple of interesting things that
Speaker 5: have changed with this higher for longer sentiment. One in
Speaker 5: particular is that we're now seeing issuers refinance floating rate
Speaker 5: debt with convertibles and they're saving up to fifty percent
Speaker 5: in interest expense with premiums that are one hundred percent,
Speaker 5: you know, So it's it makes a lot of sense.
Speaker 4: For some of these large cap issuers.
Speaker 5: The other thing we're seeing in the convertible market is
Speaker 5: large cap issuers doing a convert to repurchase shares, and
Speaker 5: so I think that the convert activity will only increase
Speaker 5: meaningfully this year, especially in this environment.
Speaker 2: Isn't it interesting that, ultimately, at a time where markets
Speaker 2: go from record high to record high there's less and
Speaker 2: less access to getting into the public market, and so
Speaker 2: much of the enthusiasm we talk about on a daily
Speaker 2: basis is in the private markets. There's also a lot
Speaker 2: of talk around M and A and I'm interested as
Speaker 2: to what you're anticipating there from.
Speaker 4: Even fewer publicly traded companies going forward.
Speaker 5: Yeah, so the take privates we've talked about, I think
Speaker 5: that we've also seen an increase in strategic activity in
Speaker 5: a meaningful way, and we'll continue to see that throughout
Speaker 5: the balance of the year. And then some of the
Speaker 5: smaller M and A that's happening tends to be a
Speaker 5: little you know, some of these early stage AI technology businesses,
Speaker 5: but they're scaling very rapidly, so that could over the
Speaker 5: next twelve, eighteen, twenty four months mean much larger scale
Speaker 5: M and A and adding to this already massive IPO backlog.
Speaker 3: Kristen, for all of the growth stage technology companies out
Speaker 3: there that are watching the show right now, be it
Speaker 3: the founders or staff, what's a good reason to go public?
Speaker 3: What is a good motivation to list your company?
Speaker 5: Well, the biggest reason right now the companies are opting
Speaker 5: to go public tends to be employee liquidity, you know,
Speaker 5: being private for a number of years, giving their employees
Speaker 5: an opportunity to start to find wealth in a publicly
Speaker 5: traded stock, or to validate a technology or the staying
Speaker 5: power of a private company. Some companies opt to go
Speaker 5: public because their customers are worried they're not going to
Speaker 5: be around, are not going to have long term funding,
Speaker 5: and so they, you know, from a reputational standpoint, want
Speaker 5: to be public. And the last is probably you know,
Speaker 5: the investors looking for liquidity, and again private equity is
Speaker 5: I think there will be a number of IPOs that
Speaker 5: come out over the next couple of years because we
Speaker 5: haven't seen a lot of activity out of private equity
Speaker 5: and returning capital to LPs. But right now they're you know,
Speaker 5: for the most part, finding liquidity in the private market
Speaker 5: more appealing than the IPO market, although we're seeing some
Speaker 5: really attractive assets coming public, just in a more limited basis.
Speaker 3: Kristin Roth to Clark Global Head of Technology Investment Banking.
Speaker 3: Above is terrific way to start the program. Thank you
Speaker 3: so much. We'll like to continue the conversation on the
Speaker 3: tech IPO landscape later in the hour with Eric Hippo
Speaker 3: of lera hippo. Really interesting conversation, interesting person, another interesting person,
Speaker 3: don't want to miss are coming up. In the first instance,
Speaker 3: we're going to hear from YouTube CEO Neil Mohen on
Speaker 3: the company's plans for expansion.
Speaker 6: Caroline some shares, some shares in.
Speaker 4: The public trading market that are still available.
Speaker 2: Salesforce absolutely just seeing it up about six tens percent.
Speaker 4: Unlike the rest of the market, we're higher.
Speaker 2: We are anticipating their earnings after the bell reporting their
Speaker 2: fiscal first quarter earnings.
Speaker 4: Look, how much are we able to see data.
Speaker 2: Cloud, which obviously helps organize corporate data for analytics for
Speaker 2: the all important AI space. How much is that going
Speaker 2: to help with their focus on margins as well?
Speaker 4: This is a Bluebogo technology.
Speaker 3: How YouTube became must watch TV. That's the latest episode
Speaker 3: of the Circuit where Bloomberger Regional's host Emily Chang sits
Speaker 3: down with YouTube CEO Neil Mohen about transforming the platform
Speaker 3: into the world's biggest streamer.
Speaker 7: To this, YouTube's really kind of its own sort of
Speaker 7: unique thing. We're not a social media platform, we're not
Speaker 7: traditional media in the sense, we're not linear television. We're
Speaker 7: really sort of our own thing. And so if we
Speaker 7: live up to that vision, we think we're really still
Speaker 7: in the early days of our growth story and fulfilling
Speaker 7: what our mission is, which is to give everyone a
Speaker 7: voice and show them the world.
Speaker 8: Based on Nielsen's latest data, YouTube is now by far
Speaker 8: the biggest streamer in the world, Netflix close behind, and
Speaker 8: then everybody else drops way down who Disney Max. But
Speaker 8: you don't get the awards or the critical acclaim. What
Speaker 8: more does YouTube have to prove?
Speaker 7: I do think that YouTube is getting recognized as that
Speaker 7: platform on television screens. We just surpassed a billion hours
Speaker 7: of watch time on living room screens, and you mentioned
Speaker 7: the Nielsen ratings. That is certainly something that when I
Speaker 7: speak to our advertising partner, the brands that look to
Speaker 7: build connections with consumers on our platform, they recognize that
Speaker 7: and they they see it as a place not just
Speaker 7: of this broad reach, you know, the number one streaming
Speaker 7: platform here in the US, but also reach that is
Speaker 7: engaged and from a brand's perspective, that is something that
Speaker 7: they are really recognizing. Like I said, it's still the
Speaker 7: early days of our journey, but I do start to
Speaker 7: hear that more and more from our partners.
Speaker 8: YouTube is printing money for Google, as I understand it,
Speaker 8: upwards of fifteen billion dollars a year. Where will the
Speaker 8: future revenue growth come from. Talk to us about that
Speaker 8: strategy and how it will play in.
Speaker 7: If you think about YouTube today compared to what YouTube
Speaker 7: was five years ago or certainly ten years ago, there
Speaker 7: are an order of magnitude more creators on our platform.
Speaker 7: We have a breadth of monetization offerings to support this
Speaker 7: creator economy, not just ads, but subscription business. You know
Speaker 7: that was the fifteen billion dollars subscription business across all
Speaker 7: of Google, but also direct to fan funding like channel
Speaker 7: memberships and things like that. So there's an enormous amount
Speaker 7: of scale and complexity in the ecosystem that requires us
Speaker 7: to rethink how we're going to support that creator ecosystem.
Speaker 2: YouTube CEO Neil Maan, along with Bloomberg's Emini Chang. You
Speaker 2: can catch the full episode of The Circuit tonight six
Speaker 2: pm right.
Speaker 4: Here on Blomberg Television.
Speaker 2: Let's talk about open AI because Helen Toner is a
Speaker 2: former board member of open ai and has actually said
Speaker 2: that the board didn't know about the original twenty twenty
Speaker 2: two launch of chat CBT until afterwards and that they
Speaker 2: only found out about it on well Twitter or x.
Speaker 2: Let's bring in Bloomberg's Seth Figman for more on what
Speaker 2: seems to be more.
Speaker 4: Discussion in the press coming from Helen Toner.
Speaker 2: She'd already written a piece with Tash as well another
Speaker 2: previous board member, about some of their worries about AI governance.
Speaker 4: This keeps building.
Speaker 9: Yeah, I mean it's remarkable. I have a former board
Speaker 9: member who's just going rogue at this point and really
Speaker 9: bashing the company, or at least its current leadership. The
Speaker 9: claim about Chatchibt is remarkable. Here's their biggest, best known
Speaker 9: product them they're saying that the Borg had no previous
Speaker 9: awareness that it was going to be launched. Now there's
Speaker 9: a caveat there. When they released this product, it was
Speaker 9: kind of a slow burn. Initially, people didn't know it
Speaker 9: was going to be as big as it became. But
Speaker 9: the bigger takeaway from this piece is that she's really
Speaker 9: gegging at the idea that there was a long series
Speaker 9: of times where they were either misinformed, uninformed, or felt
Speaker 9: like they were being manipulated by Sam Altman. And for
Speaker 9: months now it's been a guessing game in and out
Speaker 9: of Silicon Valley. What Precipititikea the ouster last year. This
Speaker 9: is really the most that we've seen so far that
Speaker 9: gets at that question.
Speaker 3: Seth As you know, I remember the weekend as Sam
Speaker 3: Outman's Ousta Helen Tona didn't pick up the phone.
Speaker 6: She hadn't had much to say.
Speaker 3: Then in the last twenty four hours or forty eight hours,
Speaker 3: she's had quite a lot to say. But the issue
Speaker 3: is the relationship with Sam. See something Sam Oltman told
Speaker 3: Bloomberg last year.
Speaker 8: Have listen, you have an incredible amount of power at
Speaker 8: this moment in time. Why should we trust you?
Speaker 10: You shouldn't, I think at this moment in time, like
Speaker 10: people deserve basically as much time asking questions as they want,
Speaker 10: and I'm trying to show up and do it. But
Speaker 10: more to that, like no one person should be trusted here.
Speaker 10: I don't have super voting shares, like I don't want them.
Speaker 6: The board can fire me. I think that's important.
Speaker 3: So at its route, there's Sam Altman pushing to commercialize
Speaker 3: the technology, and then there's different iterations of the board
Speaker 3: who seem unaware.
Speaker 6: I don't really know where to go next with that.
Speaker 9: Well, you're right again, it's pretty remarkable. I think there's
Speaker 9: been a drip drip from Helen. She's become a little
Speaker 9: bit more comfortable being public about her concerns. You're right,
Speaker 9: For months, we really couldn't get much detail. What we've
Speaker 9: heard was essentially that there was a long simmering build
Speaker 9: up of mistrust and miscommunication, and in her latest statements
Speaker 9: we're seeing a little bit more on that.
Speaker 2: The current context is that you can't trust Sam when
Speaker 2: it comes to discussions with celebrities when it comes to that,
Speaker 2: ultimately is what people are now realizing, rightly or wrongly.
Speaker 2: What was cast into the public discourse has of course
Speaker 2: been Scarlett Johnson and the calls or what time they happened,
Speaker 2: and AI really trying to just lay out the order
Speaker 2: of a currency of when they discussed using the voice
Speaker 2: at Scarlett u Hansson and when they're already talked to
Speaker 2: actors and actresses.
Speaker 4: But there is a feeling of distrust.
Speaker 9: Going I think so I think they're taking pains now
Speaker 9: go to be as transparent as they can be. What's
Speaker 9: funny is that for all of the tension that they've
Speaker 9: have at board members never cross a famous actress. I
Speaker 9: think that's where you're going to really lose the public.
Speaker 2: Seth Fiegerman. We'll see what the next response is from
Speaker 2: open Ai. Amid all of this, we thank him for
Speaker 2: walking us through it. Meanwhile, open Ai has actually got
Speaker 2: some competition, you know it, and one of them is
Speaker 2: from Francis mistral Ai, which has launched in early twenty
Speaker 2: twenty three as a European rival, but it's now eyeing.
Speaker 4: The United States.
Speaker 2: We're going in Blomberg's Matt Berg and for more and
Speaker 2: they're hiring a key member of talent, right.
Speaker 11: So this has been a major hire. And this is
Speaker 11: a really closely watched start up here in Europe, and
Speaker 11: there's really no precedence for company aside from maybe Spotify
Speaker 11: having becoming a global technology success out of Europe, and
Speaker 11: that seems to be ambision of Mistro at least that's
Speaker 11: what their investors are signaling.
Speaker 8: Right.
Speaker 11: There's reports that that in probably a less than fourteen months,
Speaker 11: they've now gone from zero to a company worth six billion,
Speaker 11: and so there's a lot of expectations and a pretty
Speaker 11: high evaluation they have to meet.
Speaker 3: Mark give me a sense of mistrual size and scale,
Speaker 3: Like we report on them a lot they're a little
Speaker 3: bit shy. They've been regulatory focuses in Europe. Tell me
Speaker 3: about the basics.
Speaker 11: Yes, the basics are pretty small.
Speaker 6: That's sort of thing that I mean.
Speaker 11: I think that from my sense it's probably a team
Speaker 11: of maybe around fifty at this point. I mean, it
Speaker 11: could be a little biggeran that, but but you know there,
Speaker 11: that's sort of their mo is that we are leaner,
Speaker 11: We're building these smaller, more agile AI models. They're open source.
Speaker 11: They're very at this point very close to the French
Speaker 11: government in a sense that one of their co founders
Speaker 11: and it's kind of their policy chief is the prior
Speaker 11: French Digital minister. Macrone has talked about supporting them. Last
Speaker 11: week I gave this really interesting comments about how he
Speaker 11: preferred that they would grow big on their own and
Speaker 11: remain independent. The sort of subtext there was, don't sell
Speaker 11: to a big tech American firm.
Speaker 6: The bag Smartberg in terrific reporting out of Yurope. We
Speaker 6: really appreciate it.
Speaker 3: Welcome back to BLIEMBG Technology. Ed Ludlow in San Francisco.
Speaker 4: I'm callin hid in New York.
Speaker 2: Quick check on your markets today because we are more
Speaker 2: and about born costs bonields rising. That's dragging some of
Speaker 2: the stock markets lower. Ashley the NASDA and then as
Speaker 2: that one hundred outperforming other key US benchmarks, but we
Speaker 2: are lower by four tens percent on the big tech
Speaker 2: benchmark of the nas that one hundred tenure yield as
Speaker 2: a thirtyer yield across the board. In fact, we're seeing
Speaker 2: born costs rising as we have another big auction forty
Speaker 2: four billion dollars a.
Speaker 4: Seven year deck coming.
Speaker 2: Will there be not as much demand as was hoped
Speaker 2: like we've seen in the previous two auctions. We're up
Speaker 2: six basis points bitcoin. On the downside, we're off by
Speaker 2: nine tens percent sixty seven thousand. Moving on though, as
Speaker 2: we try to mark through what is a slight tempering
Speaker 2: of risk appetite. The socks is one of the ones
Speaker 2: that underperforms the Philadelphia Semiconductor Index off by one and
Speaker 2: a half percent. Every single chip maker down, but that's
Speaker 2: because they've been rallying so hard in previous weeks.
Speaker 4: Maybe we've got a little bit of profit taking going on.
Speaker 2: Certainly the case for the Maderna, we're off by almost
Speaker 2: five percent, had a horrible day yesterday, but that's after
Speaker 2: it had a record winning streak of ten straight days
Speaker 2: of gains profit taking. This is a company also injecting
Speaker 2: generator of AI throughout its focus on healthcare. We're looking
Speaker 2: at Amazon actually one of the outperformers on the day.
Speaker 2: We're up three quarters of percent. Nice little headline there
Speaker 2: that they're once again expanding their partnership deal with Germany's
Speaker 2: sap SO. A key focus there on the power of
Speaker 2: generative AI coming into bedrock and aws more broadly.
Speaker 4: And then we've got more on Amazon.
Speaker 6: Yeah, we do.
Speaker 3: For years the Amazon unit, Ring touted its crime fighting
Speaker 3: features thanks to its selling smart doorbells that let homeowners
Speaker 3: remotely monitor their residences. But today the kind of footage
Speaker 3: Ring users share is less about suspicious activity and more
Speaker 3: about pets or wild animal sightings and water balloon fights.
Speaker 3: And it's all part of how Ring is trying to
Speaker 3: reinvent itself, aiming for more of a mashup between something
Speaker 3: akin to Nextdoor or even TikTok.
Speaker 6: Here to discuss the why is.
Speaker 3: Ring CEO Liz hammern in actually the first sort of
Speaker 3: sit down interview since you've been CEO. Actually, you and
Speaker 3: I met almost one year to the day you are
Speaker 3: one year in this role. The best place to start
Speaker 3: is probably why a new mission? What prompted you to say, Okay,
Speaker 3: Ring's got to be a different company.
Speaker 12: Well, you know, our new mission was really prompted by
Speaker 12: my last year of going out and talking to our
Speaker 12: customers and talking to our employees and seeing how people
Speaker 12: were using our cameras. And one of the things that
Speaker 12: we found is that while our mission around safety and
Speaker 12: security is still very relevant, people use these cameras to
Speaker 12: feel safe and secure, but they were also using them
Speaker 12: for so much more for convenience. Did my packages arrive
Speaker 12: for presence and control? How busy is my small business?
Speaker 12: Do I need to send more staff or a connection?
Speaker 12: People do love to watch their pets with their Ring cameras,
Speaker 12: and we were finding as we were building new products
Speaker 12: that their mission was limiting and just too narrow. And
Speaker 12: so our new mission is just more expansive for how
Speaker 12: people use our products and how we want to build products.
Speaker 3: The expensive part is interesting. Full disclosure. We are a
Speaker 3: Ring family. You know, often when my father in law's
Speaker 3: here in San Francisco, he's worrying about whatever's going on
Speaker 3: at home down in Socow. He consults his phone to
Speaker 3: check it on ring these new areas, do you see
Speaker 3: sort of a meaningful split or even can you give
Speaker 3: me a proportion of what sales you think are driven
Speaker 3: by security versus I guess what is social interaction?
Speaker 4: Well?
Speaker 12: I think that it's about, you know, why do I
Speaker 12: buy and then how do I use it? And a
Speaker 12: lot of white people buy is they want to be
Speaker 12: connected to their homes. Their homes one of their most
Speaker 12: valuable assets. They want to see what's going on, They
Speaker 12: want to feel safe and secure. But what they find
Speaker 12: is there's any number of convenience features to using it.
Speaker 4: I suspect that what.
Speaker 12: Your father shows you is not just security in safety features,
Speaker 12: but funny things that happen at home, or surprising weather,
Speaker 12: or any number of things that make you connected to
Speaker 12: your home or small business.
Speaker 2: That connection is allowing you to well make some revenue,
Speaker 2: drive twenty dollars a month subscription and you now are
Speaker 2: aiming and have attained profitability.
Speaker 4: Is that sustainable?
Speaker 12: Is yes?
Speaker 4: I believe so.
Speaker 12: I think this is actually just the beginning of you know,
Speaker 12: significant continued significant business growth. You know, last year we
Speaker 12: grew double digits, and where we see continued continued growth here,
Speaker 12: especially as we think about Ring really being a video
Speaker 12: service company. When people talk to you about their Ring
Speaker 12: cameras and they're not showing you their camera as iconic,
Speaker 12: you know, as our hardware is, they're showing you video
Speaker 12: on your phone, and that video service is incredibly valuable,
Speaker 12: and as we invest in computer vision and AI to
Speaker 12: make it even more valuable, we think the business will
Speaker 12: continue to be profitable and grow.
Speaker 2: Lizio expertise has been in the world of connected cameras.
Speaker 2: You came from dot Com, You've got a lot of
Speaker 2: business expertise.
Speaker 4: Prior to joining and leading Ring. Was now the moment
Speaker 4: to turn on the money pipeline?
Speaker 2: Or is it more where Amazon is within a focus
Speaker 2: on profitability rather than growth at all costs.
Speaker 12: You know, I think that I'm not sure I would
Speaker 12: would think about it as is it this binary decision?
Speaker 12: I mean, the business is very healthy, and the natural
Speaker 12: course of this business is to be profitable based on
Speaker 12: the size of the business and the customer demand. And frankly,
Speaker 12: the vast majority of our customers subscribe to our subscription
Speaker 12: service and that is a big driver of our business health.
Speaker 6: It's an interesting time.
Speaker 3: Amazon Panos Panais come in to lead the Devices and
Speaker 3: Services group broadly, how has your relationship been with him
Speaker 3: and how do you work together because there's a lot
Speaker 3: of I guess interruptibility between Ring the Amazon ecosystem.
Speaker 12: Yeah, you know, well Panas and I actually work together
Speaker 12: back in my days at Microsoft. So it's awesome to
Speaker 12: have to have him leading Devices and Services for Amazon.
Speaker 12: And you know, we work together to ensure that all
Speaker 12: of our products work together. And so you know, many
Speaker 12: customers connect their Ring cameras to Alexa, and about a
Speaker 12: third of our doorbell customers actually use an Echo device
Speaker 12: as their time.
Speaker 3: It's competitive, you know, I get advertisements all the time
Speaker 3: for other similar camera based technologies. What would you say
Speaker 3: is rings point of differentiation technologically speaking?
Speaker 6: What is it that you are doing better or at
Speaker 6: a higher level than the others?
Speaker 12: Well, I think it's a combination of our software and
Speaker 12: our hardware. But really the differentiation is in software. And
Speaker 12: as you point out, there's lots of cameras on the market,
Speaker 12: but what makes them unique is really how the software
Speaker 12: takes advantage of the hardware capabilities.
Speaker 2: I'm so looking at this footage is hilarious. This guy
Speaker 2: trying to scare this bear off through different camera And
Speaker 2: I've actually watched many friends trying to be terrified about
Speaker 2: squirrel inside their house due to some sort of camera.
Speaker 2: What's so interesting is you oversee other parts as well.
Speaker 2: There's Blink camera, there's Key in home delivery services that
Speaker 2: you're saying, and people using these sorts of technologies for
Speaker 2: efficiency and for knowing when you've got deliveries sidewalk wireless
Speaker 2: network or miss a meshweb network.
Speaker 4: Here.
Speaker 2: You're not going to the world of thermostats and other
Speaker 2: connected areas in your part of business, are you, Liz,
Speaker 2: Because for me, that's a differentiation the Google.
Speaker 4: Office, for example, in nest so for.
Speaker 12: Rings specifically and Blink and the areas that I oversee.
Speaker 12: We're really focused on this notion of understanding what's going
Speaker 12: on at your homer business and then with Key providing
Speaker 12: access to it. And so although those products are interesting,
Speaker 12: they're not they don't really fit with our mission of
Speaker 12: keeping people close to what's important. And so I think
Speaker 12: we're just really focused on the products that do that,
Speaker 12: and I think we're pretty busy and full just fulfilling
Speaker 12: on that mission.
Speaker 3: Alice, the director in New York, is going to bring
Speaker 3: up that footage of the bear again.
Speaker 6: I see that all the time.
Speaker 3: I see images just like those, what are those wild
Speaker 3: bore or something squirrel fantastic, But I see them on
Speaker 3: TikTok and I see them on Instagram reels.
Speaker 6: That's where the content is shared.
Speaker 3: So how does Ring derive a benefit from the enthusiasm
Speaker 3: of the customer who then takes it and shares it elsewhere.
Speaker 4: Well, I think in two ways.
Speaker 12: One is our customers to feel like they get a
Speaker 12: lot of value out of their products, and one of
Speaker 12: those values is being able to download videos and share
Speaker 12: them however they would like. And then it also drives
Speaker 12: awareness of the products. So people who maybe aren't yet
Speaker 12: Ring customers see those videos and think, oh, I really
Speaker 12: want to make sure I can stay connected to my home.
Speaker 3: It's like it's like marketing, you know, through through social
Speaker 3: and it's like ownership spreading the word like Tesla does
Speaker 3: with its evs. I find that all Raccoon Ring CEO
Speaker 3: Liz hammern it's just fantastic to finally get you on
Speaker 3: the show one year into the job.
Speaker 6: Thank you so much, Car. You've got some other news headlines.
Speaker 2: I too, what a great conversation, but it's time for
Speaker 2: talking tech now and first up, Nobel Laureate Paul Roma
Speaker 2: issuing warning about artificial intelligence speaking to Blue MEGDV in
Speaker 2: Hong Kong. The economics professor Liken sy Ai market run
Speaker 2: to the crypto hype mubble.
Speaker 4: Take a listen right now.
Speaker 13: There's way too much confidence about the future trajectory of AI.
Speaker 13: Would people project this forward? I think they're at risk
Speaker 13: of making a very serious mistake. We've benefited from skilled
Speaker 13: scaling up compute and ingesting a whole lot of data.
Speaker 13: Scaling up computes pretty easy. It's just war machines, more chips.
Speaker 13: But what's going to happen is we're not going to
Speaker 13: have enough data.
Speaker 2: Meanwhile, talking of hyper not around AI. The US and
Speaker 2: UK arms of accounting firm PwC. They're set to start
Speaker 2: selling open ai products directly to clients, and the agreement
Speaker 2: will allow PwC to become the first reseller of chatchpt
Speaker 2: enterprise products geared towards business use.
Speaker 4: In terms of the deal, we're not disclosed.
Speaker 2: And a lawsuit challenging webscraping practices of open Ai and
Speaker 2: Microsoft has been dismissed.
Speaker 4: By a federal judge in California.
Speaker 2: The complaint accused open Ai and Microsoft of violating property
Speaker 2: and privacy laws by stealing data to train AI systems. Now,
Speaker 2: the judge slam the attorneys who file the complaints for
Speaker 2: being excessively long and meandering, calling the suit quote unnecessary.
Speaker 4: And distracting youan while.
Speaker 2: Coming up, we'll talk about the state of the US
Speaker 2: IPO market.
Speaker 4: Leric Hippo of.
Speaker 2: Lere Hippo coming up next, this Bluemo technology. We talked
Speaker 2: about a little bit earlier the lack of IPOs in
Speaker 2: the market, and in a recent op ed Lara Hippo
Speaker 2: managing partner, Eric Hippo argues, then the number of public
Speaker 2: US companies is plumitting, and that's bad news for the
Speaker 2: democratic component of the economy, saying exit opportunities, they're critical
Speaker 2: to the promise of American innovation and neglecting them or
Speaker 2: their collective detriment and polase to say, we're welcoming to
Speaker 2: the show now, Lara Hippo managing partner, Eric, as you
Speaker 2: helped write that out and now thinking about broadening out
Speaker 2: the conversation. You articulate why it's bad for want to
Speaker 2: be investors and indeed for future growth and financial benefits
Speaker 2: to many, Eric, But why is this happening from your perspective.
Speaker 1: Well, it's happening mostly due to regulations, so that's the
Speaker 1: number one factor. Number two factor is that companies are
Speaker 1: choosing to stay private longer because there's more private capital.
Speaker 1: It's a bit of a conundrum because obviously all of
Speaker 1: this private capital is expecting an exit at some point,
Speaker 1: which is likely to be the public markets. So we
Speaker 1: used to have eight thousand public companies back in the nineties.
Speaker 1: We are down to less than four thousand at this phase.
Speaker 1: We'll be down to two thousand in another twenty years.
Speaker 1: Two thousand is about the size of the London Stock Exchange,
Speaker 1: which by the way, went from four thousand to two thousand.
Speaker 1: So our stock exchanges are shrinking, not in terms of valuations,
Speaker 1: but in terms of the number of public companies, meaning
Speaker 1: that the remaining companies have higher and higher market capitalizations
Speaker 1: and it's very difficult for young, innovative, growing companies to
Speaker 1: go public.
Speaker 3: Can we think about this, Eric, through the lens of
Speaker 3: a case study, If you don't mind, I think about
Speaker 3: Elon Musk Inc. You know, he's documented the challenges of
Speaker 3: being a public company CEO of Tesla, and if you,
Speaker 3: by comparison, look at his private companies SpaceX, xai X,
Speaker 3: the company formerly known as Twitter. Many would argue that
Speaker 3: he's able to innovate with more freedom because he's free
Speaker 3: of the responsibility or scrutiny or even the transparency required
Speaker 3: of being a public company. What would your response be
Speaker 3: to that case study? In that line of argument, I
Speaker 3: would say.
Speaker 1: That Elon is pretty distinct and remarkable by himself, and
Speaker 1: that he's been able to raise billions of dollars in
Speaker 1: the private market for his companies and stay private a
Speaker 1: lot longer. This is not within the reach of most
Speaker 1: most private companies. Most private companies are able to raise
Speaker 1: you know, in the tens of millions or hundreds of
Speaker 1: millions at most, but to have access to billion dollars
Speaker 1: two billion dollars in capitalization, you need the public market
Speaker 1: for this. So when when when Elon's company these go public,
Speaker 1: they're already pretty substantial companies, and so that's not the norm.
Speaker 6: The norm.
Speaker 1: What we're looking for is the ability to have public
Speaker 1: companies being capitalized around one to five billion dollars. That's
Speaker 1: where there is almost no IPOs and this is where
Speaker 1: this is kind of the point of entry. If you
Speaker 1: let's take the example of n Video and Video went
Speaker 1: public in the late nineteen nineties at a market cap
Speaker 1: of about six hundred million dollars and thet's say that
Speaker 1: that's about the billion dollars in today's money. That company
Speaker 1: now is worth almost three trillion dollars. So a remarkable
Speaker 1: rise and a lot of a lot of the public shareholders,
Speaker 1: the people who were able to buy those shares in
Speaker 1: the early days that have become if they kept them,
Speaker 1: have become very, very rich. That's the kind that's the
Speaker 1: kind of momentum that we're looking for.
Speaker 2: But therefore, if it's regulation that stifled, it is it
Speaker 2: less regulation that's needed. And therefore, how do you protect
Speaker 2: an investor base with less regulation.
Speaker 1: Well, it's going to be judicious regulation, you know. The
Speaker 1: the the tipping point really was the Sobbing Socksley Act
Speaker 1: of two thousand and two. A lot of smaller public
Speaker 1: companies were forced to either dealist or merge or go
Speaker 1: or go private given the burdens imposed by the by
Speaker 1: socks By that but that particular act, So this, in
Speaker 1: my mind, this needs to be reviewed. Do we really
Speaker 1: need all of these controls or these internal controls. You know,
Speaker 1: we're assuming, we're kind of assuming that people go public,
Speaker 1: are have something to hide, have have you know, bad
Speaker 1: intentions of sorts. We need to go back to uh,
Speaker 1: you know a place where we we we allowed uh capitalism.
Speaker 3: Yes, Eric, I just were pushed back on that slightly.
Speaker 3: I mean, one reason that it's such a privilege to
Speaker 3: host this show, Caroline, is that we come across all
Speaker 3: kinds of founders who dream of taking their technology startup
Speaker 3: public because of the prestige or because it gives their
Speaker 3: staff liquidity, who may be long serving. You know, in
Speaker 3: many instances that that's the dream, and it's still intact.
Speaker 3: You know, you're an investor and you're part of this ecosystem.
Speaker 3: Do you not recognize that still being a part of
Speaker 3: the dream.
Speaker 6: Very much so.
Speaker 1: It's it's it's in some cases almost their only dream, right,
Speaker 1: that's that's your exit. So if you let's take a
Speaker 1: typical company in a private portfolio of Cetera's mind. Company
Speaker 1: does one hundred million dollars in annual recurring revenues, you know,
Speaker 1: has a grows thirty to fifty percent a year, has
Speaker 1: ibidah of about you know, twenty million dollars. Again, I'm
Speaker 1: using a general case, and they want to go public,
Speaker 1: So what's going to happen? They the cost of going
Speaker 1: public is going to cost them ten to fifty million
Speaker 1: dollars a year, right, so that's over half of their abida.
Speaker 1: So suddenly the valuation that they might command in the
Speaker 1: public market is way then it should be as a
Speaker 1: result of this. So there's plenty of companies in that
Speaker 1: situation who are would like to go public. They're they've
Speaker 1: been in business for ten years or more. There their
Speaker 1: employees need that liquidity for their for their own equity,
Speaker 1: but it's not really possible for them to do so.
Speaker 3: Eric Hippo, Managing partner Larry Hippo. I can say with
Speaker 3: certainly that Caroline and I both followerly enjoyed that conversation.
Speaker 6: Thank you.
Speaker 3: The Chinese court dismissed the case filed by a local
Speaker 3: consumer against Apple's commission and fees for purchases via its
Speaker 3: app store, granting the US company some reprieve as it
Speaker 3: faces growing scrutiny around the world over its practices.
Speaker 6: Bloomberg's Mark German is here.
Speaker 3: With more Mark give US the details of this specific
Speaker 3: case and why it's important.
Speaker 14: Yeah, a consumer in China sued Apple locally over the
Speaker 14: company's thirty percent are up to thirty percent take rate
Speaker 14: on applications, saying that this stifles competition. This is the
Speaker 14: same thirty percent. This is the same situation that we've
Speaker 14: seen play out in the US, playing out in Australia
Speaker 14: with Epic Games. Obviously, the European Union has been largely
Speaker 14: against this, and this is a time where Apple actually got.
Speaker 6: A rare win.
Speaker 14: Apple has been fined in many places. They're losing portions
Speaker 14: of lawsuits over this cut. The cut is at the
Speaker 14: heart of a continued battle between Apple and a judge
Speaker 14: in California, and this is something Apple is likely going to.
Speaker 6: Have to shake up.
Speaker 14: You've already seen Apple throughout the concept of the thirty
Speaker 14: percent as part of the Digital Markets Act in the
Speaker 14: European Union, and over time, I expect even more significant
Speaker 14: changes to the Apple revenue share agreements in the US
Speaker 14: and elsewhere as well as this legal pressure and pressure
Speaker 14: from both consumers and developers continues to heat up to.
Speaker 2: Heat up, and now China the outline, Madam, and great
Speaker 2: wrap of it all well, thank you so much. Meanwhile,
Speaker 2: let's go from Apple to Meta, because Matt has just
Speaker 2: removed hundreds of Facebook accounts associated with covert influence campaigns
Speaker 2: from China, Israel, Iran, Russia and other countries, some of
Speaker 2: which used AI tools to generate disinformations, according to the
Speaker 2: company's quarterly threat report.
Speaker 4: Well, let's bring in the moos Kurt Wagner, and.
Speaker 2: I'm assuming maybe they used AI to find this disinformation too.
Speaker 15: Yeah, they use AI and algorithms to detect a lot
Speaker 15: of this stuff and do it at the scale that
Speaker 15: they need to for Facebook's products, right, I mean, they
Speaker 15: have billions of users, billions of pieces of content. That's
Speaker 15: not really something that they can necessarily do manually, although
Speaker 15: they do have teams that then, you know, once things
Speaker 15: are detected, kind of going and do some investigating manually.
Speaker 15: But I think the important part here is that, you know,
Speaker 15: we are seeing a little bit more generative AI content that.
Speaker 6: Is being used to mislead people.
Speaker 15: And I think that this is not a surprise, but
Speaker 15: it's something as we head into the twenty twenty four election,
Speaker 15: as we head into you know, important Senate races, this
Speaker 15: is something that they're paying close attention to.
Speaker 3: K when Meta finds this content, generative, AI driven or otherwise,
Speaker 3: what do they do in response?
Speaker 15: Yeah, their goal and they've been doing this for years
Speaker 15: to be clear, this is not a brand new thing.
Speaker 15: But their goal is to basically wipe out these organizations,
Speaker 15: wipe out these you know, groups before they're able to
Speaker 15: gain any kind of traction. They've gotten very good at
Speaker 15: doing that since twenty sixteen election, you may remember. And
Speaker 15: so most of the time when they're sharing this stuff,
Speaker 15: you know, they're catching these things before it reaches a
Speaker 15: huge audience. And I think that's the big key. Now,
Speaker 15: sometimes things do you know, slip through, but ultimately they're
Speaker 15: trying to find these groups and eliminate them before they
Speaker 15: can reach some type of scale.
Speaker 2: And Nick Claik, the President of Global Affairs, we you're saying,
Speaker 2: you've got to detect, you've got to label this AI
Speaker 2: generated content in particular kut Wagner, great breakdown as we
Speaker 2: face what's more than thirty elections worldwide this year, and
Speaker 2: look that does.
Speaker 4: It for this rather busy edition of remote technology.
Speaker 3: Yet, Yeah, there has been no stop in the flow
Speaker 3: in the water of tech. Real quick, I won't be
Speaker 3: on the show tomorrow. I'm away on a top secret mission.
Speaker 3: Stay tuned. Check out the pod many of you do
Speaker 3: on your way to work, way home from work, or
Speaker 3: just hanging out Apple, Spotify, iHeart, and we published all
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