WEBVTT - Tech Stocks Take a Beating and Tesla Recalls Cars 0:00:14.000 --> 0:00:17.880 Imed Lovelow in San Francisco. This is Bloomberg Technology coming up, 0:00:17.920 --> 0:00:20.919 Tech stocks taker Bruising, we'll discuss the sea of red 0:00:21.160 --> 0:00:23.800 in the stock market. Is investors brace for a more 0:00:23.840 --> 0:00:27.639 hawkish FED? Plus shop of five plunges. After earnings, we 0:00:27.680 --> 0:00:31.560 discussed the company's revenue outlook with President Harley Finkelstein, and 0:00:31.560 --> 0:00:35.320 bring you the latest on the CEO departure at YouTube 0:00:35.840 --> 0:00:38.640 and a look at artificial intelligence and investing in it. 0:00:38.680 --> 0:00:41.760 We speak with Greylock general partner song Butter Meddie. That's 0:00:41.800 --> 0:00:46.160 for more. Let's stick with these markets and the tech sector, 0:00:46.200 --> 0:00:49.720 bringing clear Bridge senior research analysts Hillary Fresh and Hillary 0:00:49.960 --> 0:00:52.320 you know you've learned that one session and market does 0:00:52.360 --> 0:00:55.240 not make but the FED giving us a clear kind 0:00:55.240 --> 0:00:57.560 of travel direction today right when we think about the 0:00:57.600 --> 0:00:59.840 technology sector, how are you thinking right now when it 0:01:00.080 --> 0:01:03.200 ums particularly to software and there's high multiple tech names. 0:01:03.600 --> 0:01:06.040 Thanks very much that it's good to be here. U. 0:01:06.280 --> 0:01:08.520 First of all, there has I agree with Richard, there's 0:01:08.560 --> 0:01:10.880 been a lot of speculation in this market, especially with 0:01:11.000 --> 0:01:15.760 certain components of the Tech index. However, um I have 0:01:15.800 --> 0:01:18.600 a slightly different view. Um when we look at how 0:01:18.600 --> 0:01:22.440 we got here, um Q four orians in fact weren't 0:01:22.480 --> 0:01:25.839 so bad. They weren't as bad as investors feared. UM 0:01:26.000 --> 0:01:29.320 companies actually were able to constructively take down guidance for 0:01:29.400 --> 0:01:32.440 the four year and on top of that, most companies 0:01:32.440 --> 0:01:36.640 have actually taken a much more significant step toward profitability 0:01:36.640 --> 0:01:39.920 and improving profitability, and I think that's a big part 0:01:39.959 --> 0:01:43.360 of the reason why the average stock has rallied. The 0:01:43.440 --> 0:01:47.640 IDV software next was up as of yesterday. That's almost 0:01:47.720 --> 0:01:50.360 double the SMP appreciation, and there are components of that 0:01:50.360 --> 0:01:53.800 that were up thirty not all of them speculative, but 0:01:53.840 --> 0:01:57.280 I agree how interest rates are very tough for tech um. Plus, 0:01:57.400 --> 0:01:59.680 we're entering the seasonally difficult part of the year, so 0:02:00.040 --> 0:02:02.000 it's likely we give up some of these games, and 0:02:02.040 --> 0:02:05.040 I think that would be constructive. You know, we're in 0:02:05.080 --> 0:02:07.960 the debts of earning season, and you know, all we 0:02:08.000 --> 0:02:10.120 can do on a case by case basis and look 0:02:10.160 --> 0:02:13.040 at those that be expectations and those that miss. But 0:02:13.120 --> 0:02:17.240 as you look across software sas enterprise in particular, how 0:02:17.280 --> 0:02:19.840 are you discerning those that are are struggling in this 0:02:19.960 --> 0:02:24.640 environment and those that are outdoing expectations. Sure well, at 0:02:24.680 --> 0:02:26.880 clear Bridge we have a quality bias, and we tried 0:02:26.919 --> 0:02:29.840 to invest in quality companies, quality management teams that are 0:02:29.840 --> 0:02:34.400 extremely well positioned across their sector UM. HubSpot is an 0:02:34.400 --> 0:02:37.080 example of that. HubSpot reported after the clothes that actually 0:02:37.120 --> 0:02:41.160 beat revenues by five it beat EPs by thirty percent. 0:02:41.520 --> 0:02:44.200 The street was concerned because they announced a sudden percent 0:02:44.280 --> 0:02:47.960 headcount cut about a week ago, and actually they guided 0:02:48.240 --> 0:02:52.800 inline revenues going forward and they guided EPs fift above 0:02:52.840 --> 0:02:54.760 the streets. So I would say that's an example of 0:02:54.760 --> 0:02:57.120 a quality name which we like a lot um and 0:02:57.160 --> 0:02:59.720 we try to pick leading companies in their category a 0:02:59.760 --> 0:03:02.920 comes that have UM like HubSpot, that are expanding a 0:03:02.919 --> 0:03:05.600 product portfolio, moving up and down market, doing things to 0:03:05.639 --> 0:03:09.840 really determine their destiny beyond the markets hit away. We 0:03:09.880 --> 0:03:11.760 just showed a fantastic chart. In fact, I think we'll 0:03:11.760 --> 0:03:14.120 bring it up again because it was that good showing 0:03:14.160 --> 0:03:19.240 the NAS that one hundred a pretty historic relative highs 0:03:19.400 --> 0:03:23.519 the SMP five hundred. Right we're talking about elevated levels 0:03:23.560 --> 0:03:25.880 that go back to near its dot com peak. My 0:03:26.000 --> 0:03:28.640 question to you, based on that chart is where do 0:03:28.680 --> 0:03:31.160 we sit right now with tech valuations? We had a 0:03:31.160 --> 0:03:35.200 brutal sell off in two we're trying to pass valuations 0:03:35.240 --> 0:03:37.880 as part of the equation around higher rates as well. 0:03:38.480 --> 0:03:41.160 That's such a good question, ed. Not all tech has 0:03:41.200 --> 0:03:46.400 created equal. However, software and enterprise tech in particular has 0:03:46.480 --> 0:03:50.680 actually been adjusting from evaluation perspective for two years. Two 0:03:50.760 --> 0:03:54.920 years as of April. Currently, for software in particular, evaluations 0:03:55.040 --> 0:03:59.680 stand within their pre pandemic five and tenure averages, and 0:04:00.120 --> 0:04:03.440 for growth equities there below the tenure average, in part 0:04:03.520 --> 0:04:06.920 because many of the growth contingents of of the sector 0:04:07.000 --> 0:04:10.200 weren't as profitable, but they're becoming more profitable. So I 0:04:10.240 --> 0:04:13.440 think we've done a lot of constructive work. Um. Again, 0:04:13.480 --> 0:04:15.560 the markets certainly can give back a lot of what 0:04:15.600 --> 0:04:18.719 we've gotten, but I would view those that give back 0:04:18.880 --> 0:04:21.479 as an interesting opportunity because I think at the end 0:04:21.520 --> 0:04:24.280 of the day, digital transformation and many of the things 0:04:24.320 --> 0:04:28.440 these companies are doing for digital economy remain incredibly important. 0:04:28.440 --> 0:04:31.560 I don't think that's going away by any means. Hillary, 0:04:31.560 --> 0:04:33.760 how many of your conversations at clear Bridge and with 0:04:33.839 --> 0:04:38.720 your clients are about artificial intelligence right now? Many that 0:04:39.520 --> 0:04:44.240 tell me, sure, well, well, it's interesting, um, where we're 0:04:44.360 --> 0:04:48.880 large holders of Microsoft and Avid fans, Um, what's interesting 0:04:48.920 --> 0:04:51.680 about this. Even though the world is incredibly focused on 0:04:51.880 --> 0:04:56.480 search and the impact of chat GBT on search, I 0:04:56.520 --> 0:04:59.880 think the impact to Microsoft in particular goes well the 0:05:00.040 --> 0:05:02.480 on search. I think this could be a huge boon 0:05:02.520 --> 0:05:06.400 to their cloud business, their productivity application business, their development 0:05:06.400 --> 0:05:10.680 platform business, all of that accruise eventually to their cloud business. 0:05:11.080 --> 0:05:13.720 So I think this could be a leap frogging for 0:05:13.839 --> 0:05:18.000 Microsoft in the marketplace, who has never actually been seen 0:05:18.080 --> 0:05:21.320 and never gotten the credit for their technology prowess and 0:05:21.480 --> 0:05:25.000 never been seen as a leader in important next generation technologies, 0:05:25.040 --> 0:05:28.919 whereas AI is probably the most important next generation technology 0:05:29.120 --> 0:05:33.120 of this decade. Hillary Fresh of clear Bridge, thank you 0:05:33.160 --> 0:05:34.840 so much for your time. See we take it from 0:05:34.839 --> 0:05:39.440 those market fundamentals to AI completely conversation, different conversation happening 0:05:39.720 --> 0:05:42.640 on Wall Street and globally for investors, and honestly, it 0:05:42.760 --> 0:05:54.160 is getting us excited, So thank you for your time. Night. 0:05:54.279 --> 0:05:58.279 Shares of Shopify plunging today after earning sixteen cent dropped 0:05:58.320 --> 0:06:02.200 biggest in a year, revenue forecast for the current fiscal 0:06:02.279 --> 0:06:05.520 quarter below expectations. What's really interesting, though, at least five 0:06:05.560 --> 0:06:09.560 analysts raised their price targets on the stock despite that 0:06:09.640 --> 0:06:11.360 drop and that miss you can see on a two 0:06:11.440 --> 0:06:13.840 day basis kind of the picture they're telling the story, 0:06:13.920 --> 0:06:17.600 joining us now to discuss Shopify as president Harley Finkelstein 0:06:18.040 --> 0:06:20.040 and Hardy. There's no getting away from that, right, that's 0:06:20.080 --> 0:06:23.640 a pretty severe market reaction, at least the investors in 0:06:24.000 --> 0:06:27.760 the context of the stock. But analysts raising price targets. 0:06:28.360 --> 0:06:30.719 What is it that you think they got wrong in 0:06:30.760 --> 0:06:34.000 their reaction the investors? I mean, well, first, before we 0:06:34.000 --> 0:06:35.960 started get into the reaction, let's talk about the quarter, 0:06:36.000 --> 0:06:38.120 because obviously this all came out of out of our 0:06:38.120 --> 0:06:40.240 earnings released yesterday, out of out of the print. I 0:06:40.680 --> 0:06:43.800 think in a year, in particularly Q four was a 0:06:43.880 --> 0:06:46.760 quarter where performance mattered more than anything else, to the street, 0:06:46.960 --> 0:06:50.800 to investors, to the world. More rather than you know, potential, 0:06:50.960 --> 0:06:54.240 Shopify delivered. I think we demonstrated that while commerce is 0:06:54.279 --> 0:06:57.520 moving fast, Shopify is moving much faster. On the top line, 0:06:57.560 --> 0:07:01.279 we beat gm B was up on a conte currency basis. 0:07:01.400 --> 0:07:04.880 In Q four, revenue was was up um it was 0:07:04.920 --> 0:07:08.479 sixty one million dollars for the quarter. As excuse me, 0:07:08.800 --> 0:07:11.560 revenue was up to one point seven billion dollars for 0:07:11.640 --> 0:07:13.720 the quarter. That's up twenty eight percent on a constant 0:07:13.720 --> 0:07:16.440 currency basis. So on the top line we did really well. 0:07:16.720 --> 0:07:19.440 On the bottom line, we also had we were profitable. 0:07:19.480 --> 0:07:21.760 We we showed a o I of but sixty one 0:07:21.800 --> 0:07:25.920 million dollars, and more importantly, we demonstrated operating expense growth 0:07:25.920 --> 0:07:29.480 actually decelerated from Q three to Q four. So when 0:07:29.480 --> 0:07:31.160 I think about the last two quarters Q three, in 0:07:31.200 --> 0:07:33.400 Q four, I think shop it has proven that we 0:07:33.400 --> 0:07:36.040 can we can drive improvements in our cost structure and 0:07:36.080 --> 0:07:38.400 at the same time grow revenue while still invest in 0:07:38.480 --> 0:07:41.240 critical areas. And then you know, we we mentioned brands 0:07:41.280 --> 0:07:44.080 like Supreme, Black and Deck or Glossier, Mattel all coming 0:07:44.120 --> 0:07:46.760 out to Shopify. So in terms of the Q four 0:07:46.920 --> 0:07:48.640 we're very proud of how we showed up there. Now, 0:07:48.640 --> 0:07:51.680 in terms of the expectation, obviously people didn't necessarily like 0:07:51.720 --> 0:07:53.800 the guidance. We were trying to be prudent and and 0:07:53.800 --> 0:07:55.680 and frankly, this morning we woke up and we saw 0:07:55.880 --> 0:07:59.440 inflation numbers came out completely different than everyone thought. We 0:07:59.520 --> 0:08:01.760 can of macro trends. We can do is make sure 0:08:01.760 --> 0:08:04.360 that we're building a durable company, that our products are 0:08:04.400 --> 0:08:06.280 beloved by the millions of merchancy that used it. We're 0:08:06.280 --> 0:08:08.360 now ten of all e commerce in the US, were 0:08:08.440 --> 0:08:10.760 higher in other countries, but that we're building a company 0:08:10.800 --> 0:08:14.480 that is operationally disciplined and notwithstanding obviously the you know 0:08:14.520 --> 0:08:18.440 today's today's stock price change, we think we are we're 0:08:18.480 --> 0:08:24.000 absolutely executing. My colleague Jeffrey Morgan wrote, Shopify like a 0:08:24.040 --> 0:08:27.400 film that draws critics or a film that nobody loves, 0:08:27.480 --> 0:08:31.560 is getting bad reviews from investors, but then praise from others. 0:08:31.600 --> 0:08:34.400 You know, that's kind of the summary here. Despite the reaction, 0:08:34.840 --> 0:08:36.400 you talked about the top line, and you talked a 0:08:36.440 --> 0:08:38.760 little bit about the bottom line. I know that Toby 0:08:38.880 --> 0:08:41.280 was asked about this on the call. There was a 0:08:41.360 --> 0:08:43.840 want from the street to learn a little bit more 0:08:44.040 --> 0:08:47.439 about the roadmap for profit profit throughout this calendar year. 0:08:47.480 --> 0:08:50.160 Can you talk about what Shopify is doing to to 0:08:50.280 --> 0:08:54.200 meet its profitability targets. You know, we're not a company 0:08:54.240 --> 0:08:56.360 that was raised on the venture capital If you think 0:08:56.400 --> 0:09:00.320 about the seven year period post I p O, we 0:09:00.320 --> 0:09:03.400 were profitable, profitable five at A seven at A seven years. 0:09:03.480 --> 0:09:05.840 So we're a company that actually has been profitable for 0:09:05.840 --> 0:09:08.240 a very long time, and we we understand the path 0:09:08.280 --> 0:09:10.440 back In fact, we you know, we were cashlow positive 0:09:10.559 --> 0:09:12.880 Q three, cashlow pause by a Q four and we 0:09:12.920 --> 0:09:15.120 had a y then. But we're also a company that 0:09:15.160 --> 0:09:17.160 takes its medicine. If you think about the layoffs that 0:09:17.160 --> 0:09:19.079 have been happening in tech the last couple of weeks, 0:09:19.240 --> 0:09:22.680 Shopify did head count reduction back in July of last year. 0:09:22.920 --> 0:09:25.040 So we're not a company that that has been bloated 0:09:25.040 --> 0:09:27.160 like a lot of other companies have. But we're also 0:09:27.200 --> 0:09:29.360 making sure the products that we're putting out there are 0:09:29.400 --> 0:09:32.160 are products that have that are port into our merchants. 0:09:32.440 --> 0:09:36.040 One metric that missed almost entirely is our attach rate, 0:09:36.040 --> 0:09:37.920 which is now at two point eight five two point 0:09:37.960 --> 0:09:41.040 eight five percent. The attach rate, which is effectively revenue 0:09:41.040 --> 0:09:43.280 divided by g m V, is a proxy for the 0:09:43.440 --> 0:09:46.120 usage of of of our products buy our merchants. So 0:09:46.400 --> 0:09:48.720 remember we have small business that come to Shopify. We 0:09:48.760 --> 0:09:50.439 also have a lot of larger merchants are coming to 0:09:50.440 --> 0:09:52.920 Shopify as well. I mentioned Black and Decker and Mittel 0:09:53.000 --> 0:09:55.480 and Supreme on the call yesterday, So we have all 0:09:55.520 --> 0:09:57.959 these different growth vectors. Not to mention, once they come 0:09:57.960 --> 0:10:00.320 into Shopify, we're not just helping them with a commerce 0:10:00.320 --> 0:10:02.520 we help them with physical retail. We're giving them capital. 0:10:02.559 --> 0:10:05.200 We gave about four hundred million dollars of cash advances 0:10:05.240 --> 0:10:07.400 in the quarter. That's about We've done about four point 0:10:07.480 --> 0:10:10.240 eight billion dollars of cash advances total since the capital 0:10:10.280 --> 0:10:12.720 program came to be. We're doing these like audiences to 0:10:12.720 --> 0:10:14.880 help with things right return and ad spin and helping 0:10:14.880 --> 0:10:17.319 them reduce the cost of customer acquisition. Shop play is 0:10:17.440 --> 0:10:20.160 very much becoming the retail operating system. And this isn't 0:10:20.200 --> 0:10:22.439 something that we're hoping investors, you know, trust us and 0:10:22.640 --> 0:10:24.680 you'll see in the future. We're doing that right now. 0:10:24.720 --> 0:10:27.120 And and and the performance I think was indicated by 0:10:27.200 --> 0:10:30.079 by the print yesterday. Hey Holliday, we just have about 0:10:30.080 --> 0:10:33.559 fifteen seconds. But what's your assessment of the health of 0:10:33.880 --> 0:10:37.160 your user based your customers and also others intimes of 0:10:37.200 --> 0:10:39.480 the consumer read through? Well, this is where I get 0:10:39.480 --> 0:10:42.200 excited because if you look actually at the US business registrations, 0:10:42.360 --> 0:10:45.080 the last two years have been the highest business registrations 0:10:45.160 --> 0:10:47.319 of the last ten years. That's on the merchant side. 0:10:47.480 --> 0:10:49.840 On the consumer side, the consumer is strong. You know, 0:10:49.880 --> 0:10:53.959 we had two hundred billion dollars of g m V two. 0:10:54.080 --> 0:10:57.160 That's three Times two thousand nineteen, and if you on Wednesday, 0:10:57.200 --> 0:10:59.520 when when US retail sales came out, it's served. I 0:10:59.520 --> 0:11:01.599 think it was up three percent. In January it was 0:11:01.600 --> 0:11:04.119 anticipated to be at one point eight percent. So the 0:11:04.120 --> 0:11:06.360 the consumer in the world is strong, merchants are strong, 0:11:06.480 --> 0:11:09.400 and Shopify is absolutely entrepreneurship company in the retail operating 0:11:09.440 --> 0:11:12.120 system for the future of business. And we're happy and 0:11:12.120 --> 0:11:13.959 proud of of what we're doing. We'll keep we'll keep 0:11:13.960 --> 0:11:18.400 doing us Harley Finklestein, Shopify President, We're grateful for your time. 0:11:18.480 --> 0:11:21.199 Thank you, Thank you very much. Now turning to another 0:11:21.280 --> 0:11:24.360 name that we're watching, and that's YouTube CEO Susan Jiki, 0:11:24.480 --> 0:11:28.040 stepping down from the role after nine years running Google's 0:11:28.120 --> 0:11:32.280 video streaming division, handing the reins to top Lieutenant Neil Mohan, 0:11:32.360 --> 0:11:35.240 joining us with Mooys, Bloomberg's Mark Berg and also the 0:11:35.280 --> 0:11:39.400 author of Course of Light comments subscribed inside YouTube's chaotic 0:11:39.559 --> 0:11:43.080 rise to world domination. Mark This is a big moment 0:11:43.160 --> 0:11:46.120 for YouTube. It's the big moment that some people have 0:11:46.120 --> 0:11:48.760 been expecting for a while. I'd say that the pickup 0:11:48.760 --> 0:11:51.760 succession is surprised. No one who's been tracking YouTube and 0:11:51.840 --> 0:11:55.199 Google Neil Mohan has been at YouTube in the role 0:11:55.200 --> 0:11:59.160 of Chief Product Officer since his role has expanded in 0:11:59.160 --> 0:12:02.240 those eight years. Actually worked with with Susan Wijiski before 0:12:02.320 --> 0:12:05.160 that on Google Adds. So he's a known entity certainly 0:12:05.200 --> 0:12:07.680 for advertisers and a little bit more so for for 0:12:07.920 --> 0:12:12.280 YouTube creators. Is Susan leaving YouTube at a time where 0:12:12.320 --> 0:12:15.120 they pressured and challenged or is she leaving them in 0:12:15.120 --> 0:12:18.960 sort of robust rude health. Uh, let's say both. I mean, 0:12:19.080 --> 0:12:21.280 you know, I think part of Susan's Likegacy, certainly on 0:12:21.280 --> 0:12:25.439 the business side, has been taking this asseteen when she 0:12:25.559 --> 0:12:28.360 joined YouTube, was this huge commercial success or sorry, are 0:12:28.360 --> 0:12:31.600 the huge like pop culture success right, but had never 0:12:31.640 --> 0:12:35.000 really proven itself to be profitable. Uh. They've gone through 0:12:35.080 --> 0:12:37.360 like a series of crises around the business side. But 0:12:37.360 --> 0:12:40.240 in the past five years that ad business, at least 0:12:40.559 --> 0:12:43.960 from what they disclosed, has more than tripled. Uh. And 0:12:44.000 --> 0:12:46.880 you know there's moving into TV streaming. Um, They've they've 0:12:46.880 --> 0:12:49.400 struggled a little bit on competing with Spotify, but they're 0:12:49.440 --> 0:12:53.000 big threats now are TikTok, which is clearly a much 0:12:53.000 --> 0:12:56.400 bigger existential threat. Uh. And then just the larger threast 0:12:56.440 --> 0:12:58.840 that Google has on the regulatory side, like that's very 0:12:58.920 --> 0:13:01.440 unclear about YouTube shoote. So some saw this coming. This 0:13:01.520 --> 0:13:04.440 is what Susan herself had to say in a blog 0:13:04.480 --> 0:13:09.120 post that was published on Thursday morning about why the 0:13:09.120 --> 0:13:11.120 time is right for me. I feel able to do 0:13:11.200 --> 0:13:14.760 this because we have an incredible leadership team clearly referenced 0:13:14.760 --> 0:13:16.400 as well to Neil who's going to take the reins. 0:13:16.400 --> 0:13:18.439 What do we know about him him as a leader 0:13:18.600 --> 0:13:22.520 is as an operator, he's incredibly googly. I mean, I 0:13:22.559 --> 0:13:24.280 mean that the sense of he's been there since two 0:13:24.280 --> 0:13:27.160 thousand eight. You know, people talk to me about this. 0:13:27.240 --> 0:13:29.360 This this actually does have some value in the sense 0:13:29.400 --> 0:13:31.599 of Google's a very political place and in order to 0:13:31.640 --> 0:13:34.800 get things done, you know, YouTube is a division that 0:13:34.840 --> 0:13:37.280 has to fight for resources with other with Google Cloud, 0:13:37.400 --> 0:13:40.840 with Pixel right, uh, and certainly having someone who has 0:13:40.880 --> 0:13:44.079 been so experienced with the company is an asset. He's 0:13:44.160 --> 0:13:47.280 not a media executive, right, he never worked in media before. 0:13:48.000 --> 0:13:51.280 Um Like on programming, they had Robert Kinsel, who was 0:13:51.320 --> 0:13:54.360 their Hollywood chief who left earlier this year, and I 0:13:54.360 --> 0:13:57.280 think that was his replacement was another person who worked 0:13:57.280 --> 0:13:59.840 on Google Ads, and I think It's a clear indication here. 0:14:00.160 --> 0:14:02.360 You know, YouTube has dropped their strategy to compete with 0:14:02.400 --> 0:14:05.760 Netflix and Amazon Prime. They're like all in on becoming 0:14:06.240 --> 0:14:09.120 just the pre premier sort of ad ad base destination 0:14:09.200 --> 0:14:11.960 and competing with TikTok. Before we let you go, what 0:14:11.960 --> 0:14:13.720 do we What do you kind of reflect on in 0:14:13.760 --> 0:14:16.360 your book about Susan? What did you learn about her 0:14:16.360 --> 0:14:18.439 as you went about writing. Yeah, Susan's a bit of 0:14:18.480 --> 0:14:21.640 a cipher like unlike some say Sheryl Sandberg. She has 0:14:21.720 --> 0:14:24.520 not built a public profile. Most people out on the 0:14:24.560 --> 0:14:26.880 street don't know who she is. I think that's been 0:14:26.920 --> 0:14:29.360 advantageous to to YouTube, and in some ways they've been 0:14:29.400 --> 0:14:31.880 able to sort of avoid some of the scrutiny that 0:14:31.920 --> 0:14:34.800 Facebook has. I think what will be really interesting going 0:14:34.840 --> 0:14:37.120 forward is she is described by people who worked at 0:14:37.120 --> 0:14:39.280 Google as one of the very few humings of the 0:14:39.400 --> 0:14:42.800 planet that has a relationship with the Google founders, who 0:14:42.880 --> 0:14:44.960 are as we know, have left the company but are 0:14:45.000 --> 0:14:48.040 still the majority shareholders. And now as Google is having 0:14:48.040 --> 0:14:52.120 this big existential moment around ai UM, she's an important 0:14:52.160 --> 0:14:55.080 person there and and you know she's clearly still consulting, 0:14:55.200 --> 0:14:58.440 but her absence will I think will be felt all right. 0:14:58.480 --> 0:15:01.840 Bloom Dugs montug of Coolest Bloomberg Reporter, but also author 0:15:02.160 --> 0:15:04.280 of that book that you can check out. I'm sure 0:15:04.280 --> 0:15:06.240 you can get it anywhere. It's been out since September, 0:15:06.240 --> 0:15:08.960 and I myself will be reading it like comments Subscribe 0:15:08.960 --> 0:15:14.480 inside YouTube's chaotic rise to world domination. Now something else 0:15:14.520 --> 0:15:17.400 we're keeping our eye on very closely. Changes coming to 0:15:17.480 --> 0:15:21.280 an app near you. Both Meta and Spotify launching new 0:15:21.320 --> 0:15:25.320 features metas Instagram rolling out broadcast channels, which let users 0:15:25.360 --> 0:15:28.960 send text or photo updates directly to followers. The ideas 0:15:28.960 --> 0:15:32.080 to offer another way to share posts without having to 0:15:32.120 --> 0:15:35.960 put them on a potentially cluttered main Instagram feed. Meanwhile, 0:15:36.000 --> 0:15:41.080 Spotify will launch a TikTok esque vertically scrolling feed next month. 0:15:41.320 --> 0:15:44.120 At their stream on event in Los Angeles, Spotify executives 0:15:44.160 --> 0:15:46.960 will announce the latest features and upgrades coming to the 0:15:47.000 --> 0:15:50.520 audio platform. The move toward a TikTok like feed comes 0:15:50.720 --> 0:15:53.120 as the company seeks to attract more of those gen 0:15:53.280 --> 0:15:56.360 Z listeners. Now coming up will bring you the latest 0:15:56.360 --> 0:15:59.080 news in the land of VC back startups from Hydrogen 0:15:59.320 --> 0:16:02.080 and Finte to ed Tech, and we're keeping it global 0:16:02.520 --> 0:16:05.240 as we had to break. I'm watching shares of door Dash, 0:16:05.520 --> 0:16:09.560 a pretty strong forecast for earnings, kind of beating expectations. 0:16:09.800 --> 0:16:12.960 Cross cunning efforts at that company really seemed to be 0:16:13.200 --> 0:16:16.360 taking whole door Dash and tissue fading ebit dar of 0:16:16.400 --> 0:16:18.920 a million to a hundred and seventy million in the 0:16:18.920 --> 0:16:21.560 fiscal first quarter. Clearly the street likes it. Shares up 0:16:21.800 --> 0:16:24.240 six and a half percent in after hours. This is 0:16:24.240 --> 0:16:38.600 Bloomberg time now for the VC round up, starting with Bijou, 0:16:38.760 --> 0:16:42.640 which is in negotiations with investors including TPG to raise 0:16:42.680 --> 0:16:45.520 more than five hundred million dollars. The Indian d tech 0:16:45.560 --> 0:16:49.200 startup is hoping to keep its valuation steady at about 0:16:49.200 --> 0:16:53.040 two billion dollars during that financing. That's according to sources. 0:16:53.080 --> 0:16:57.080 Now negotiations are ongoing. It's unclear if the prospective investors 0:16:57.080 --> 0:16:59.320 will go ahead with a deal and buys you. Is 0:16:59.320 --> 0:17:03.520 in talks separately with creditors to renegotiate an agreement governing 0:17:03.520 --> 0:17:06.480 a one point two billion dollar loan that's in breach 0:17:06.600 --> 0:17:10.040 of covenants. Sunfire is in talks with investors to raise 0:17:10.080 --> 0:17:13.200 about two hundred million euros and a new financing round 0:17:13.320 --> 0:17:16.000 that were put a one billion euro valuation on the 0:17:16.080 --> 0:17:19.520 hydrogen startup, as according to German newspaper Handles Flat, who 0:17:19.600 --> 0:17:23.719 cites sources similarly here, though discussions are solo ongoing and 0:17:23.760 --> 0:17:27.280 talks yet to be finalized. And over in Pakistan, fintech 0:17:27.359 --> 0:17:31.600 startup ad Alphi, which helps consumers and smaller businesses, obtained loans, 0:17:31.920 --> 0:17:35.000 raised a seven point five million dollar funding round. It's 0:17:35.040 --> 0:17:37.920 a sign of life for the South Asian country's VC 0:17:38.080 --> 0:17:40.639 market after it dried up with a global decline in 0:17:40.680 --> 0:17:43.000 tech stocks last year. The round was led by co 0:17:43.160 --> 0:17:48.040 To Ventures, Clima Ventures, Fatima, Goober Ventures and Zane Capital. 0:17:56.240 --> 0:17:58.440 I think there's hype and there's substance, and we try 0:17:58.480 --> 0:18:01.160 to separate the two. Hype comes and goes. It kind 0:18:01.160 --> 0:18:04.679 of creates this crazy animal spirits. You can't control it, 0:18:04.880 --> 0:18:06.600 and so for the better of our part, we try 0:18:06.600 --> 0:18:09.160 to ignore what happens with hype and focus on the substance. 0:18:09.520 --> 0:18:12.040 And when it comes to substance, it is just starting 0:18:12.080 --> 0:18:15.360 to see some of the results in Generative AI already. 0:18:16.560 --> 0:18:19.520 Welcome back to bloom Blow Technology IMD Lovelow in San Francisco, 0:18:19.560 --> 0:18:22.280 and that was part of our conversation with Sonya Huanga 0:18:22.359 --> 0:18:25.800 Sequoia Capital speaking with us yesterday about you Guessed it 0:18:25.880 --> 0:18:31.440 artficial intelligence and sticking with AI. Can bing take over Google? 0:18:31.560 --> 0:18:35.520 That's what Microsoft seems to think. It's reported initial findings 0:18:35.720 --> 0:18:38.920 after a week of testing new AI additions to it's 0:18:38.960 --> 0:18:41.919 being search engine with users from more than one sixty 0:18:41.960 --> 0:18:45.880 nine countries. The results aipowered answers have earned the approval 0:18:45.920 --> 0:18:49.840 of around seventy of testers, and Chat in particular has 0:18:49.880 --> 0:18:53.840 proven a popular edition that's deepened engagement. According to the company, 0:18:53.880 --> 0:18:56.320 Now people are also using the chat cabable wile bing 0:18:56.600 --> 0:19:00.600 beyond specific queries for quote more general discovery of the world, 0:19:00.960 --> 0:19:03.639 and for social entertainment. It's the story we've just got 0:19:03.720 --> 0:19:06.000 to stick with. So let's turn to Graylock, who've been 0:19:06.000 --> 0:19:08.719 investing in AIM machine learning for a little while now 0:19:08.760 --> 0:19:12.280 in companies like a Debt Inflection, Gretel and many more. 0:19:12.320 --> 0:19:14.320 You see those names of their port photo companies on 0:19:14.320 --> 0:19:17.840 the screen. Bring in Graylock General partner, some Mode medi 0:19:18.160 --> 0:19:20.119 So I don't even know where to start at the moment. 0:19:20.200 --> 0:19:22.560 Every day there's a new headline. But you heard so 0:19:22.640 --> 0:19:25.199 when you talk about the sort of the hype and 0:19:25.240 --> 0:19:29.280 the reality, where are you on the hype reality spectrum 0:19:29.359 --> 0:19:31.120 right now in terms of what we're seeing in real 0:19:31.160 --> 0:19:34.399 world deployment of AI. First, thanks for having me on 0:19:34.560 --> 0:19:36.680 excited here to talk to you about AI. As you mentioned, 0:19:36.720 --> 0:19:39.200 we've been investing in AI Graylock for over a decade, 0:19:39.600 --> 0:19:41.840 and we believe the shift that we're seeing now around 0:19:41.840 --> 0:19:45.240 generative AI is equal in importance to the earlier shifts 0:19:45.240 --> 0:19:47.679 from cloud to on premise software and the shift from 0:19:47.720 --> 0:19:50.720 desktop to mobile. I think every company is going to 0:19:50.760 --> 0:19:53.280 be an AI company, and everything we do at work 0:19:53.359 --> 0:19:55.840 and how we live is going to be transformed by AI. 0:19:55.920 --> 0:19:57.960 So I met out thinking a lot of this is real. 0:19:58.359 --> 0:20:00.880 One mental model that my partner Hoffman and I wrote 0:20:00.920 --> 0:20:03.760 about I think about how AI might impact our lives 0:20:04.119 --> 0:20:07.160 is this concept of a copilot for everybody. So get 0:20:07.200 --> 0:20:09.920 Hub copilot is an initial copilot product that's used by 0:20:09.920 --> 0:20:13.760 developers that helps developers write better code. Imagine a world 0:20:13.760 --> 0:20:16.919 where copilots get for lawyers helping them write better briefs, 0:20:16.960 --> 0:20:20.240 for doctors helping them do medical diagnoses, for salespeople helping 0:20:20.240 --> 0:20:23.440 themselves software. I think if we're having this conversation three 0:20:23.520 --> 0:20:25.640 years from now, all of us will be using these 0:20:25.640 --> 0:20:28.080 products that feel like copilots in the way we work 0:20:28.119 --> 0:20:31.119 and live some contexts with your audience. So Reid Hoffman, 0:20:31.200 --> 0:20:34.280 your partner, he's kind of one of the founding members 0:20:34.280 --> 0:20:37.160 of open ai. He is on the board. He invested 0:20:37.160 --> 0:20:40.680 through his own means, his own charity or charitable funds. 0:20:41.040 --> 0:20:43.280 But I know you guys track what open ai is 0:20:43.320 --> 0:20:46.720 doing really closely. We'll get onto your portfolio companies. But 0:20:46.880 --> 0:20:50.600 for you right now, who or what is leading the 0:20:50.640 --> 0:20:54.320 way in artificial intelligence? I think you have to start 0:20:54.320 --> 0:20:56.480 with open ai and give them immense credit what they've 0:20:56.520 --> 0:20:59.359 done with the transformer model architecture, with products like Dolly, 0:20:59.480 --> 0:21:02.840 GPP three, Chat GPT, new models that we think will 0:21:02.880 --> 0:21:05.720 come out later this year. They're really at the front 0:21:05.720 --> 0:21:08.920 lines of bringing these technology to lots of application developers 0:21:08.920 --> 0:21:10.920 and users. And as you know, they expose these and 0:21:11.000 --> 0:21:13.359 a p i s and we're fortunate to be involved 0:21:13.359 --> 0:21:15.600 with a number of companies that are leveraging those a 0:21:15.680 --> 0:21:17.639 p i s on the text and the image side 0:21:17.840 --> 0:21:20.439