Speaker 1: From Marhart where Innovation, Money and Power Collie in Silicon
Speaker 1: Vallet NBN. This is Bloomberg Technology with Caroline Hyde and
Speaker 1: Ed loved Love.
Speaker 2: I'm Caroline Heinde at Bloomberg's World headquarters in New.
Speaker 3: York and ourmed lovelow in San Francisco. This is Bloomdog
Speaker 3: Technology coming up.
Speaker 2: Well, some mixed signals in the labor market. Will break
Speaker 2: down what hiring looks like within the tech sector and
Speaker 2: speak to the CEO of Human Resources Platform Athena.
Speaker 3: Plus, we get a peek inside the c suite when
Speaker 3: it comes to the health of the tech industry and
Speaker 3: speak to the CEOs of CrowdStrike and z Scaler. Does
Speaker 3: those companies report earnings?
Speaker 2: And Amazon and talks to offer mobile phone services to
Speaker 2: its prime customers, will discuss well what that means with
Speaker 2: the competition.
Speaker 4: All that and so much more coming up.
Speaker 2: I don't know if you saw the story coming out
Speaker 2: of the Bank of America once again showing us where
Speaker 2: the fun flows are going. And Michael Harten it's been
Speaker 2: just putting out note after note calling what he says
Speaker 2: as an AI baby bubble that we saw.
Speaker 4: In the month of May.
Speaker 2: But did you see the statistics and the last week
Speaker 2: of May the money flowing in to technology a record
Speaker 2: amount eight and a half billion dollars. That's EPFR global
Speaker 2: data extraordinary. And we know why. We know it's the
Speaker 2: AI bubble.
Speaker 3: Well, look, there's this kind of fomo element, right, but
Speaker 3: remember what we talked about with Juane Phoenie twenty four
Speaker 3: hours ago. All of the games in the S and
Speaker 3: P five hundred years to day are just seven names,
Speaker 3: the megacats and Nvidia, which is a big part of
Speaker 3: that AI story. Then we think about the fed hot
Speaker 3: hot hot jobs data. What does it mean looking at swaps,
Speaker 3: we're probably pricing for a hike in July, however you
Speaker 3: want to phrase it for June a skip. Some in
Speaker 3: the market would say higher rates impact present value of
Speaker 3: future cash flows to tech. So we've got to pay
Speaker 3: attention to the fundamentals as well.
Speaker 2: Ed twenty four hours ago, you were talking to the
Speaker 2: CEO Palenteer. I know this is a weird week, so
Speaker 2: Joanne PHOENI was forty eight hours. I don't know if
Speaker 2: you know, but I have no idea what day it is,
Speaker 2: what time it is. But it was a great set
Speaker 2: of interviews that we've had this week, and yeah, where
Speaker 2: we're talking chips, where they're talking AI, let's talk payrolls
Speaker 2: right now, because well, today we're showing continued strength in
Speaker 2: the labor market, but we're just trying to dissect where
Speaker 2: that strength is and whether it's actually in the tech
Speaker 2: sector that we talk about day in day out. Let's
Speaker 2: bring in someone who knows well Roxanvates, CEO of course
Speaker 2: of the key company that is looking at the resource platform,
Speaker 2: thinking about the technology startups that you're focusing on, Zoom, Figma,
Speaker 2: even Netflix, Athena is supplying to these companies at the
Speaker 2: moment in Rockxan, what are you seeing in terms of nervousness,
Speaker 2: because you're actually all about compliance, you're all about culture. Ultimately,
Speaker 2: what's the tech sector feel like?
Speaker 5: I think that there's kind of this tension because there's
Speaker 5: obviously been huge challenges in the tech sector, massive layoffs
Speaker 5: that have kind of happened throughout the past twelve to
Speaker 5: eighteen months. But on the flip side, there's also a
Speaker 5: huge desire to keep key talent, keep culture and companies
Speaker 5: whether they're navigating return to office, whether they're navigating sort
Speaker 5: of all the social chalnelenges, intergenerational in the workforce, and
Speaker 5: so I think you're seeing both, you know, the kind
Speaker 5: of rampifications of a bit of a tighter economy in tech,
Speaker 5: you know.
Speaker 6: Layouts and things like that, but also absolutely.
Speaker 5: Wanting to hold on tight to all of your key
Speaker 5: talent because you know, that's at the end of the day,
Speaker 5: what makes really great type companies this great employees.
Speaker 2: So try and carve it out for US three hundred
Speaker 2: and thirty nine thousand from a global from a US
Speaker 2: macro perspective, looks very hot, but the unemployment rate is rising.
Speaker 2: We are seeing a fight for certain types of talent,
Speaker 2: for AI talent in particular.
Speaker 4: We're just hearing how JP.
Speaker 2: Morgan is just forty percent of those that are trying
Speaker 2: to hard at amendment have got AI skill set. So
Speaker 2: is that what was being referenced by the companies you're
Speaker 2: talking to about this worry that those that they have decided.
Speaker 4: To keep having a hard time keeping them.
Speaker 5: I think that's exactly right, that there's you know, I
Speaker 5: think that there can be this feeling that you conduct
Speaker 5: a layoff and then it's just done. And in fact,
Speaker 5: what I'm seeing with really thoughtful companies that we're really
Speaker 5: proud to serve is that their people team, their management
Speaker 5: teams understand that you may conduct a layoff, but that's
Speaker 5: almost like day one. What you really then need to
Speaker 5: do is invest in making sure that those who are
Speaker 5: staying are happy, that they're connected to the company, that
Speaker 5: they understand new policies, that they understand, you know, whatever
Speaker 5: new things are happening in that company. Because a company
Speaker 5: has done a layoff, but they are absolutely still planning
Speaker 5: for growth, they you know, still fundamentally believe in their
Speaker 5: core mission and in order to do that they have
Speaker 5: to keep the best talent.
Speaker 6: And of course AI is absolutely driving a lot of this.
Speaker 5: But you know, in management, you need strong managers to
Speaker 5: step up. Sometimes their span of control has increased. So
Speaker 5: I think that the idea that layoffs were conducted and
Speaker 5: then done, we're not really seeing that. Instead, we're seeing
Speaker 5: companies really invest in like, Okay, what's the day after.
Speaker 2: What's the day after, what's the culture like in d
Speaker 2: how much you're having to pay people? Because I think
Speaker 2: that's the other interesting part of this macro store and
Speaker 2: the Job's data today was maybe you saw that wage
Speaker 2: increase in that wage inflation just stall back a little bit.
Speaker 7: Yeah, that's the data point.
Speaker 3: Something I tweeted this week Roxanne was the story around
Speaker 3: zip Recruiter cutting twenty percent of its staff.
Speaker 7: What does that tell you?
Speaker 3: Forget the economic data, what does that tell you when
Speaker 3: a company like zip Recruiter that's doing recruitment is cutting
Speaker 3: twenty percent of its own Stuff about this market?
Speaker 5: Yeah, I mean, I think regardless of what company it is,
Speaker 5: you know, the layst I think I've tended to be
Speaker 5: between ten and twenty percent, And of course any company
Speaker 5: that's heavily in the talent space was hit early, hit hard.
Speaker 5: But I don't think that it fundamentally changes. Like if
Speaker 5: you kind of pull back from the month to month
Speaker 5: and look year to year, everybody believes that tech is
Speaker 5: the future.
Speaker 6: Like there's still this.
Speaker 5: Really strong optimism driven by AI primarily, but across the board.
Speaker 5: I think that as companies go hybrid, key tools are
Speaker 5: going to be needed in order to connect management with
Speaker 5: their employees. Like none of these I guess secular trends
Speaker 5: are rolling back, and so I think it's a little
Speaker 5: bit more.
Speaker 6: You know, what it probably tells most people is that.
Speaker 5: There may have been some overhiring, some exuberance, regardless of
Speaker 5: what the company is. The past couple of years were
Speaker 5: quite wild in tech, and I think it's just more
Speaker 5: of a like a restructure, not a fundamental disagreement that
Speaker 5: the future of these tech companies remain strong.
Speaker 7: When do we return to horing.
Speaker 5: I mean, I think that we are absolutely there. I
Speaker 5: still many of the companies we work with, even companies
Speaker 5: that have conducted, you know, to your point, these ten
Speaker 5: twenty percent layoffs on the exact same day, may still
Speaker 5: be hiring for key roles. So I'm not sure if
Speaker 5: I had a crystal ball, you know, everything would be
Speaker 5: much easier for me when we're going to return to
Speaker 5: the pace of hiring that we might have seen over
Speaker 5: the past two years.
Speaker 6: But I wouldn't in any way.
Speaker 5: Say that the people teams that were we work really
Speaker 5: closely with have stopped hiring. They're backfilling certain roles. They're
Speaker 5: absolutely thinking about where they need to continue to invest.
Speaker 5: And so it's kind of this complicated dance of on
Speaker 5: the one hand, perhaps conducting a layoff, but on the
Speaker 5: other hand, really investing in both the talent that remains
Speaker 5: and thinking about the talent coming in o.
Speaker 2: Those people teams being replaced by AI.
Speaker 5: I mean I think that they're being handspare by AI
Speaker 5: right now. That's like sort of both the hope and
Speaker 5: I think what we're seeing in general, there's still so
Speaker 5: much of the people function that really is this like
Speaker 5: interpersonal dynamic. You're conducting one on ones, you're conducting really
Speaker 5: sensitive conversations, and I think there's an understanding, even among
Speaker 5: folks who are incredibly optimistic about AI, that you're still
Speaker 5: going to need to have these conversations have this really
Speaker 5: complex inner personal dynamic.
Speaker 6: But the absolute hope is.
Speaker 5: Replace a lot of that paperwork with AI so that
Speaker 5: you can focus more on the people work and not
Speaker 5: just kind of that routine, you know, day to day stuff.
Speaker 6: That's exactly what Athena is aiming to do.
Speaker 3: Roxand Portraeus of Athena, thank you, Thank you. Coming up,
Speaker 3: CrowdStrike reports its first quarter results are going to bright
Speaker 3: and little.
Speaker 7: Down with CEO that's coming up next.
Speaker 3: I'm just going to take quick look at shares of
Speaker 3: Broadcom as well. Interesting here, Caroline, which story do you
Speaker 3: buy into when it comes to Broadcom the narrative that
Speaker 3: AI sales will double over the course of this fiscal year,
Speaker 3: or that every other business area is slowing down, particularly
Speaker 3: when it comes to the memory side of the business.
Speaker 3: I think that's really important stock to watch right now.
Speaker 3: Investors liking it at one point nine percent. This is
Speaker 3: Spoonberg CrowdStrike, reporting its first quarter results earlier this week
Speaker 3: and boosting its revenue guidance for the full year. The
Speaker 3: company also announced it's working with AWS to developed new
Speaker 3: generative AI applications. Let's bring in CEO George Kurtz for
Speaker 3: more on this. There was some concern George about a
Speaker 3: decileraration in billings at one point to stock Thursday down
Speaker 3: eleven percent, biggest drop since November. Others on the street
Speaker 3: saying nothing to dislike in this earnings report.
Speaker 7: What was the most important point for you?
Speaker 8: Well, I think when you look at the earnings report,
Speaker 8: you've got to start with we've exceeded our guided metrics.
Speaker 8: In addition to that, we actually record revenue record, gross
Speaker 8: profit record, operating profit and for the first time gap profitability.
Speaker 8: So when you put all that together, it was extremely strong.
Speaker 8: And the way we run our business is not by billings.
Speaker 8: Billings is more of a timing issue. You have to
Speaker 8: look at that new arr and if you look at
Speaker 8: the current environment with the current conditions and macroheadwinds. We
Speaker 8: think it was an absolutely strong quarter and it was
Speaker 8: a beat and raise, and I think it's a testament
Speaker 8: to the product in the customer base that we have.
Speaker 2: Let's talk about that new annual recurring revenue first year
Speaker 2: every year decline and made what is, of course, as
Speaker 2: you say, challenging macro environment. Is that macro environment improving
Speaker 2: in any way that the perspective you're seeing.
Speaker 4: Is it getting easier in the sales cycle or no.
Speaker 8: Well, it's certainly not getting easier. When we looked at it,
Speaker 8: it remained consistent and consistently challenging. Was it something that
Speaker 8: we talked about the headwinds for the last couple of quarters.
Speaker 8: We didn't see it get better, but we saw it
Speaker 8: remain basically the same. So we'll see what happens for
Speaker 8: the upcoming quarters. And obviously everyone's hoping for some relief
Speaker 8: with interest rates and some of the debt ceiling issues,
Speaker 8: but that remains to be seen.
Speaker 2: What the clients that you're signing at the moment, what
Speaker 2: are they most focused on. I'm pretty sure everyone's thinking
Speaker 2: about general to AI about some of the risks involved
Speaker 2: in cloud, which adoption is still strong there. What is
Speaker 2: the number one priority for the clients that you're currently serving.
Speaker 8: Well, it starts with stopping breaches, which is why I
Speaker 8: built a company, and I certainly believe we're the best
Speaker 8: at and I think our customers would say that. But
Speaker 8: when you put that aside, the number one driver really
Speaker 8: is consolidation. In the current environment, everyone is looking to
Speaker 8: save costs and consolidate, and with a platform that has
Speaker 8: twenty three modules, we can create a very compelling.
Speaker 1: ROI and a payback within the first year.
Speaker 8: But that means is we're taking share from other vendors,
Speaker 8: we're consolidating it onto our platform.
Speaker 3: George, when we spoke at RSA in eight pro AI
Speaker 3: was the buzzway for everyone in your industry, both as
Speaker 3: a tool but also recognizing that threat actors have access
Speaker 3: to the same technology. Now you've got a partnership with AWS.
Speaker 3: How did that come about?
Speaker 6: Well?
Speaker 8: AWS has been a great partner for many many years.
Speaker 8: Are also a customer, and when we looked at what
Speaker 8: we were doing what they were doing with Bedrock, we
Speaker 8: thought it was a great partnership. We protect a lot
Speaker 8: of their customers and their clouds, and when we think
Speaker 8: about AI. You talk about RSA, you know we were
Speaker 8: both there.
Speaker 1: It was all about AI.
Speaker 8: Guess what, Crowdstrike's been doing this since twenty twelve when
Speaker 8: I started the company. That was the bedrock in the
Speaker 8: foundation of why I started it. Now AI has transformed
Speaker 8: over time. You've got Generative AI, which we're excited to
Speaker 8: talk about Charlotte AI and what we're doing in that space.
Speaker 8: But AWS has certainly been a great partner for us,
Speaker 8: and we look forward to advancing that relationship.
Speaker 3: George, what I increasingly hear in the c suite conversations
Speaker 3: I'm having here in Silicon Valley is technical expertise.
Speaker 7: Is the driver within a company?
Speaker 3: Who within your organization was pushing you to basically say,
Speaker 3: what can we do with Amazon? How can we build
Speaker 3: something within bedrock? I want to know how day to
Speaker 3: day a company like CrowdStrike brings llms into their existing offering.
Speaker 8: Well, it's a great question, and the good news is
Speaker 8: there's not a lot of pushing.
Speaker 1: It's actually built into the DNA of the company.
Speaker 8: That's the way we started, That's the way we protect
Speaker 8: against these adversaries using AI.
Speaker 1: When we think about Generative AI.
Speaker 8: We started this project some time ago as m's were
Speaker 8: starting to mature and come to market. So we have
Speaker 8: a group or many groups actually, but we have a
Speaker 8: particular group in Europe. In fact, I was out in
Speaker 8: the office when we launched Charlotte are AI Expertise and
Speaker 8: Center of Excellence, and we basically said, you know, how
Speaker 8: do we do this at scale? How do we partner
Speaker 8: with someone like AWS, and how do we come up
Speaker 8: with the best outcomes for customers? And one of the
Speaker 8: things to keep in mind is you have to have
Speaker 8: the best data set to come out with the best outcome.
Speaker 2: Always great to catch up with George. Thanks, I'm sure
Speaker 2: you're hitting the road soon again. But talking Europe and
Speaker 2: indeed the focus on AI, George Kurts, we thank your
Speaker 2: CrowdStrike CEO. Let's talk about z skater Just what it's
Speaker 2: third quind of results and beta expectations even raising it's
Speaker 2: for your forecast for adjusted earnings shares as you'll see,
Speaker 2: had been performing well today, up seven and a half
Speaker 2: percent over the last couple of trading days. Please to
Speaker 2: say the CEO is with us, Jay Chowdry for more
Speaker 2: and Jay, you're pre released and many seeing that this
Speaker 2: is the solid numbers that They wanted to see what
Speaker 2: are you feeling in terms of macroeconomic headwinds at the moment.
Speaker 2: What are you feeling and hearing from your clients.
Speaker 9: Well, macro conditions are tight, there's a lot of scrutiny,
Speaker 9: but CIOs are still looking for making sure they're doing
Speaker 9: what needs to be done for cybersecurity. But they want
Speaker 9: to do it by having good cost savings, by having
Speaker 9: good ROI. Since we delivered great cybersecurity and we can
Speaker 9: eliminate a lot of point products, the ROI is often strong,
Speaker 9: often about two hundred percent to three hundred percent. That's
Speaker 9: what's giving strength to our business.
Speaker 3: This is a good opportunity for us to work out
Speaker 3: what is going on inside cybersecurity right now. We just
Speaker 3: had George Kurtz on CrowdStrike. His stop folls eleven percent
Speaker 3: because growth is decelerating. Yours seems to be doing your posite.
Speaker 3: You have a lot of government earl of enterprise customers.
Speaker 3: Why is it that you are benefiting from a spend
Speaker 3: on cyber right now?
Speaker 1: What markets do?
Speaker 7: What they do?
Speaker 9: I focus, as one way of putting it, Yeah, I
Speaker 9: focus less on the star price. I focus on building
Speaker 9: great solutions and taking care of our customers. But if
Speaker 9: I were to say, what's helping us is two things. One,
Speaker 9: there are many aspects of cybersecurity. The aspect we deal
Speaker 9: with is implementing zero trust architecture, which is fundamental to
Speaker 9: stop rand somewhere and other very sophisticated attacks.
Speaker 7: But number two, you may be doing a lot.
Speaker 1: Of great cybersecurity.
Speaker 9: If your business case for ROI in cost saving is
Speaker 9: not very strong, your deal gets put on hold.
Speaker 3: I'm going to give Caroline the opportunity to ask you
Speaker 3: about our official intelligence. But okay, ransomware still interests me. Yep,
Speaker 3: Where are the threats coming from?
Speaker 7: Right now?
Speaker 3: It's not been long since RSA and ransomware with a
Speaker 3: big topic of conversation at that summit.
Speaker 9: So where does ransomware come from?
Speaker 7: Yeah? Geographically? State level? What do you saying?
Speaker 9: So there's a lot of state level stuff going on.
Speaker 9: China and Russia are generally in the top two list.
Speaker 9: China driven more by IP and Russia they do a
Speaker 9: whole lot of things, and probably many times it's driven
Speaker 9: by making money though their whole range of groups that
Speaker 9: go after ransomware for making money.
Speaker 2: Can I ask you just your thought as an expert
Speaker 2: clear expert in the field about the credibility the validity
Speaker 2: when Russia and the Russian government accuses well allegations that
Speaker 2: the US has had certain iPhones, particularly of those over
Speaker 2: in Russia, is that something you think bears weight that
Speaker 2: one could assume could have happened, even whether or not
Speaker 2: it did.
Speaker 9: There's a lot of reconnaissance activity happens, and all countries
Speaker 9: do it to a certain degree. It's hard to say
Speaker 9: for sure which of these reports are true, but I
Speaker 9: can tell you that our security research team picks up
Speaker 9: a lot of reconnaissance because at the end of the day,
Speaker 9: this communication going on. Before any major breaches happen, the
Speaker 9: reconnaissance activity starts. We at these like a switchboard. We
Speaker 9: are in the middle of all communications that happens between
Speaker 9: users and applications AE and we often see a lot
Speaker 9: of that. That's how we are able to detect some
Speaker 9: of these early warnings of phishing attacks, fans similar the like.
Speaker 9: We have over three hundred billion requests that go to
Speaker 9: a cloud every day. With such a large volume of data,
Speaker 9: you can pick up stuff. The example I'll give you
Speaker 9: is before nine to eleven, there was a fair amount
Speaker 9: of reconnaissance FBI had a lot of information CI and
Speaker 9: other bodies if they could really correlate lots of telltale signs.
Speaker 9: Since we have such a massive cloud, we have a
Speaker 9: lot of those telltale signs, and now AIML, especially generative AIML,
Speaker 9: is helping us to figure those things out as scale
Speaker 9: and help our customers.
Speaker 3: Generates, ave AIML always the keywords right now in this
Speaker 3: earning season, Z Scale is CEO J. Chowdery, thank you
Speaker 3: so much for your time. Now coming up, Amazon shopping
Speaker 3: around for a partner in order to add wireless services
Speaker 3: to its list of perks for Prime. We can get
Speaker 3: more details on that from one of the reporters that
Speaker 3: broke the story, but watching shares of Meta formerly known
Speaker 3: as Facebook as we head to break social media giant
Speaker 3: asking employees assigned to an office to come in three
Speaker 3: times a week beginning in September that, according to sources,
Speaker 3: joining a clamp down on remote work in the tech
Speaker 3: industry in Caroline. How often are we hearing this three
Speaker 3: days a week the tech sector come back to the
Speaker 3: office having done reductions in workforce.
Speaker 7: Interesting one, isn't it?
Speaker 2: Yeah? It does feel like three is the magic number
Speaker 2: when it comes to technology.
Speaker 4: It's a little bit higher.
Speaker 2: If you're looking across over in Wall Street and some
Speaker 2: of those big financial players wanting four or five days
Speaker 2: a week of face show, but notable.
Speaker 4: That well, even though they've got all their virtual.
Speaker 2: Reality ways of interacting online, they still want people to
Speaker 2: come in and interact in real life too. For San
Speaker 2: Francisco and New York as a Bloomberg welcome back to
Speaker 2: Bloomberg Technology. I'm Caroline Haid in New York and.
Speaker 3: I Med Lovelow in San Francisco. Let's going to check
Speaker 3: in on these markets. So much going on from the
Speaker 3: eco to the news cycle, in particular with looking at
Speaker 3: an equity market that is charging towards a ball market,
Speaker 3: in part driven by relentless outperformance in big tech. Similarly,
Speaker 3: also thinking of course about that hot, hot hot jobs
Speaker 3: number that came in looking at swaps the market saying okay,
Speaker 3: when we think about the FED, then maybe a pause
Speaker 3: or a skip in June, call it what you will,
Speaker 3: and then a hike in July. It now seems possible
Speaker 3: throw into that some of the outperformance of single names
Speaker 3: as well in the marketplace names to the upside, like
Speaker 3: dish on that scoop we're going to get into in
Speaker 3: just a moment to the downside, what we're seeing our
Speaker 3: carriers T Mobile in particular down seven point seven percent,
Speaker 3: biggest drops into March, with twenty twenty Bloomberg News reporting
Speaker 3: according to sources that Amazon is in talks with those
Speaker 3: carriers basically to buy wholesale rates right and start offering
Speaker 3: to Prime customers some sort of wireless offering of its own.
Speaker 3: Let's continue the conversation on that exclusively and Big reporting
Speaker 3: with Matt Day who joins us now, Matt, what are
Speaker 3: the details of what you've reported here? What is it
Speaker 3: that Amazon's actually looking at doing?
Speaker 10: So it looks like Amazon's trying to add what would
Speaker 10: be the biggest perk to Prime in many years, maybe
Speaker 10: since they launched their streaming video service.
Speaker 7: The details that are schedule.
Speaker 10: What we know is they're hoping to add some sort
Speaker 10: of wireless service, maybe free, maybe as cheap as ten
Speaker 10: bucks a month, and offer that as a part of
Speaker 10: the Prime bundle to subscribers.
Speaker 2: And this is all about making Prime even more addictive,
Speaker 2: because is it because of the growth rate slowing? What
Speaker 2: do you think the real causation of this is?
Speaker 7: I think it's a little bit of that.
Speaker 10: It's also a little bit you know, Amazon in this
Speaker 10: era is trying to get costs you know, kind of
Speaker 10: across the board and kind of re emphasize the value
Speaker 10: of their core products. You know, that's online retail, let's
Speaker 10: prime more broadly, so it's not surprising to see them
Speaker 10: looking to a pro way to make a splash, you know,
Speaker 10: with it's really their main retail programming, the way.
Speaker 1: They have in the many, many years.
Speaker 3: I think consideration here in that, as you know, you
Speaker 3: and I talk about this in the context of healthcare,
Speaker 3: in the context of transport, When Amazon moves into a
Speaker 3: new industry, that industry shivers. What is the logic in
Speaker 3: this kind of big negative reaction you see, for example,
Speaker 3: from T Mobile but also Verizon.
Speaker 10: I think the logic is that, you know, in the US,
Speaker 10: the market for wireless service is pretty well carved up
Speaker 10: between three major players in a Hoverizon, T Mobile, and
Speaker 10: AT and T prices are relatively steady.
Speaker 7: The thought is if Amazon.
Speaker 10: Comes in, you know, essentially rents one of those wireless networks,
Speaker 10: then offers to undercut the company that they're dealing with
Speaker 10: them now that means hypothetically less or less revenue for
Speaker 10: the rest.
Speaker 7: Of the table.
Speaker 2: What's interesting, though, is one space Amazon hasn't really managed
Speaker 2: to make headwinders in as hardware, right, Is it ultimately
Speaker 2: going to give up the fact that you know, you'll
Speaker 2: still be using an Apple Phone or a Google Pixel,
Speaker 2: but you'll be using it viar on Amazon carrying service.
Speaker 7: That's certainly impossible.
Speaker 10: And I also, despite Amazon's you know, eye profile failure
Speaker 10: to catch fire with their own firephone, excuse the punouldn't
Speaker 10: count them out as a hardware maker too. There's always
Speaker 10: rumors coming out of Amazon that they might be kicking
Speaker 10: around the idea of bringing.
Speaker 7: Something like that back.
Speaker 10: But yeah, it would be definitely a weird look to
Speaker 10: see somebody, you know, looking up a chix l something
Speaker 10: to do an Amazon wireless And let's.
Speaker 4: Just talk about hardware for a moment.
Speaker 2: Alexa or the data they're in of that particular hardware
Speaker 2: amazing story that also you're on. Thirty thousand Amazon workers.
Speaker 4: Had access to the Alexa data, we understand, that's right.
Speaker 10: Yeah, between twenty eighteen and twenty nineteen, the USFTC says
Speaker 10: thirty thousand people at Amazon could play your voice recordings,
Speaker 10: which seems like an awful lot. And maybe the more
Speaker 10: worrying part is the FTC allege, is that half of
Speaker 10: those folks didn't need access to that for their job.
Speaker 10: Many of those people didn't even work on Alexa products,
Speaker 10: So kind of a worrying indication about Amazon's internal data
Speaker 10: controls on really the most intimate stuff they have about us,
Speaker 10: which is our voice recordings.
Speaker 3: All right, I think it's simply nice Matt Day for
Speaker 3: that reporting out of Seattle.
Speaker 7: Pappa Inc.
Speaker 3: Is a popular eldercare startup that's been pegged as a
Speaker 3: task rabbit for seniors, where contractors provide.
Speaker 7: Home assistance services.
Speaker 3: Think of it as like an Uber or a lyft,
Speaker 3: a gig economy, but in the field of elder care.
Speaker 3: But recent findings from Bloomberg reveal a dark and troubling
Speaker 3: experience for some of its users. Joining me on set
Speaker 3: for more on her story from Bloomberg BusinessWeek is preer
Speaker 3: anand you gave some troubling examples of interaction between contractors
Speaker 3: that were employeed essentially through this app, and the elderly
Speaker 3: they were giving care to. But in the first instance,
Speaker 3: I'd never heard of Papa before. This is a company
Speaker 3: that's raised money at a high valuation.
Speaker 4: That's right.
Speaker 11: You might not have heard of PAPA, but plenty of
Speaker 11: people on Medicare advantage Medicaid have heard of PAPA. Employer
Speaker 11: plans are also offering this as a service, so they're
Speaker 11: employees who are caregivers for their elderly parents. And this
Speaker 11: company has been valued at one point four billion by
Speaker 11: investors including Reddit co founder Alexis o'hannians, South Bank, Tiger Global.
Speaker 11: They've raised two hundred and forty million from investors, and
Speaker 11: they've racked up contracts with some of the largest insurers
Speaker 11: in the country like Signa, Humana, Etna.
Speaker 3: You reported in that BusinessWeek story some of the scale
Speaker 3: of PAPA in terms of revenue, the number of hours
Speaker 3: of care had given some of those facts. By the way,
Speaker 3: the company disputed that didn't give us any up to
Speaker 3: date or other figures. That's to explain in basics how
Speaker 3: PAPA works, what the idea behind it was.
Speaker 11: It essentially brings the gig economy to eldercare. The company
Speaker 11: says that they've created a whole new category of care
Speaker 11: by taking out some of the more nursing related things
Speaker 11: that home health aids normally take care of.
Speaker 4: In a home for an elderly person.
Speaker 11: So let's say you're an elderly person, you don't have
Speaker 11: any help at home. You need help Bernnie Erond's going
Speaker 11: to the grocery store, maybe doing your laundry, folding clothes.
Speaker 11: The idea is you can call someone from Papa. They'll come,
Speaker 11: maybe chat with you, help you feel less lonely, if
Speaker 11: that's a concern of yours, and you get those hours
Speaker 11: for free from your health insurance plan.
Speaker 4: In a lot of.
Speaker 2: Cases, certainly in our particular age range. At the moment,
Speaker 2: I'm fortunate enough to think more about the carers of
Speaker 2: my younger children than my elderly parents. But that fear
Speaker 2: is always within me when I leave my child with
Speaker 2: someone who I haven't met before because I need an
Speaker 2: emergency backup care. Now, the story Prier just heart wrenching.
Speaker 2: Some of these. I mean, was it twelve hundred confidential
Speaker 2: complaint reports logged by Popper over the past four years
Speaker 2: and dozens of allegations, one involving rate that you bring
Speaker 2: to bear. But there's sexual harassment, assault, And actually it's
Speaker 2: not just the pals.
Speaker 4: The people contract is coming in.
Speaker 2: Sometimes it's the pappas, the elderly who are behaving badly too.
Speaker 2: Is this coming down to a lack of control? Is
Speaker 2: this coming down to lack of training?
Speaker 7: What is it?
Speaker 4: From your reporting?
Speaker 11: The company disputed any characterizations that it is lacks on
Speaker 11: safeguards and lacks on safety measures, But our reporting shows
Speaker 11: that their background checks have had incidents far through the
Speaker 11: cracks were someone who's had a conviction has actually been
Speaker 11: able to become an independent contractor through their service and
Speaker 11: visit an elderly person leading to an incident.
Speaker 4: And they say they.
Speaker 11: Do background checks, but at the end of the day,
Speaker 11: the training provided is very little. So for home health
Speaker 11: aa AS Medicare rules require seventy five hours of training,
Speaker 11: but because PAPA strips away the nursing aspect of that,
Speaker 11: there's no bathing, there's no toileting, you're not really supposed
Speaker 11: to touch the person when you go to their home.
Speaker 11: You're supposed to just provide help with household tasks and companionship.
Speaker 11: There aren't any training requirements, and so the company's training
Speaker 11: is essentially a short video that pal's watch and then
Speaker 11: they're able to go to homes.
Speaker 2: And you highlight a lot of those previous workers who
Speaker 2: felt that there were issues with the business. Ultimately, though,
Speaker 2: nursing for the elderly has been woeful in many no.
Speaker 4: Matter what way it served.
Speaker 2: We just think back to the understaffing of nursing homes
Speaker 2: during the pandemic. I mean horrific some of the things
Speaker 2: have happened. Do you think ultimately this is something that
Speaker 2: company is looking to take the financiers the money behind this,
Speaker 2: ensuring that this is a business that tackles these problems
Speaker 2: and can ultimately solves a really big problem for many families.
Speaker 4: The company says.
Speaker 11: It takes safety very seriously and that safety related complaints
Speaker 11: from both the elderly members who rely on Poppy and
Speaker 11: its workers account for less than one percent of incidents.
Speaker 11: But we did find in our reporting reviewing, as you mentioned,
Speaker 11: more than twelve hundred complaints court records, that there have
Speaker 11: been instances when those measures have still things have fallen
Speaker 11: through the cracks, incidents have occurred, and things that have
Speaker 11: occurred in some cases on a repeat basis, harassment on
Speaker 11: both sides. Because the company has shared direct phone numbers,
Speaker 11: We've found a number of incidents where there were repeat
Speaker 11: occurrences and seemingly incidents that if someone had noticed a
Speaker 11: prior conviction may have been preventable.
Speaker 4: Of course we have.
Speaker 2: You have requested interviews from the CEO, Andrew Parker, and
Speaker 2: from the investors, and in large part they've declined to
Speaker 2: comment thus far. But prier and thank you very much
Speaker 2: indeed for bringing us what is an extraordinary story on BusinessWeek.
Speaker 3: Early door Dashbacker Pair VC is closed a new four
Speaker 3: hundred and thirty two million dollar fund for early stage investing.
Speaker 3: The firm's fourth fund will continue pairs generalist strategy of
Speaker 3: investing across sectors including life sciences, healthcare, consumer climate, and
Speaker 3: artificial intelligence. Of course, Mar Hirschinson is Pairs founding managing partner.
Speaker 7: Joins me now and set in San Francisco.
Speaker 3: Four hundred and thirty two million dollars early stage. Are
Speaker 3: you going to be writing a lot of checks or
Speaker 3: a check's getting bigger?
Speaker 4: I think it's a combination of both.
Speaker 12: The checks have been getting bigger over the last five years.
Speaker 12: And we've also grown our investment team from two people
Speaker 12: two years ago, I mean ten years ago to now
Speaker 12: twelve people in our investment team.
Speaker 3: It's a broad range of target industries. I actually wonder
Speaker 3: how much of that is in the physical world versus software.
Speaker 4: Most of it is software.
Speaker 12: You know, we're very you know focused on business at scale,
Speaker 12: and a lot of that you know, has to do
Speaker 12: with software, although we do have some you know, semiconductor
Speaker 12: beds you know that are more in the physical world.
Speaker 2: Well, what's fascinating about the companies you've chosen to back
Speaker 2: is the diversity of their leadership. A lot of female founders,
Speaker 2: diverse founders. Are There still a lot of companies being
Speaker 2: grown by diverse founders at the moment, because we know
Speaker 2: that when Silicon Valley Bank pulled back, when ultimately the
Speaker 2: economy pulled back, it's been harder for diverse founders to
Speaker 2: raise funds.
Speaker 12: I think diverse founders are you know, we have like
Speaker 12: a forty one percent of our portfolios female founders, and
Speaker 12: they are amazing entrepreneurs. I think they need a little
Speaker 12: big bit more of a nudge to move to move
Speaker 12: ahead with their fundraising.
Speaker 4: But they've been you know, they are.
Speaker 12: Even within the downturn, it's muchas you know, it's much
Speaker 12: better right now than when I got started thirty years ago,
Speaker 12: almost for diverse founders.
Speaker 2: So it's all relative, right, and there speaks the fact
Speaker 2: that you have founder experience, both you and your co founder.
Speaker 2: That was sort of your emo, the dive, the way
Speaker 2: in which you stood.
Speaker 4: Out from the crowd. How are you nudging.
Speaker 2: Your own founders right now, particularly in the world of AI.
Speaker 2: How are you ensuring the your portfolio companies you already have,
Speaker 2: are insuring they're not going to get disrupted, that their
Speaker 2: lunch isn't gonna be eaten.
Speaker 12: Yeah, you know, I think the message that for founders,
Speaker 12: no matter what, it's always like focused on the metrics
Speaker 12: that matter, work really hard to achieve those and forget
Speaker 12: the noise.
Speaker 4: It's the same in AI.
Speaker 12: You know, we've been in the valley for like I said,
Speaker 12: almost thirty years. So I saw the Web one, the
Speaker 12: Web Revolution, mobile, and now AI. It's almost the same dynamics.
Speaker 12: Right Initially there's going to be a lot of noise
Speaker 12: and excitement and eventually there's going to be some massive
Speaker 12: companies that will be created. So we are telling our
Speaker 12: founders to keep their eyes on the ball, you know,
Speaker 12: on those long term wins, not on the short term wins.
Speaker 7: You raises the question of how quickly you raise the funds?
Speaker 7: Was AI always your goal?
Speaker 3: Did you have to pivot take advantage of LP interest.
Speaker 7: Do you see what I mean?
Speaker 4: Yeah, No, no, not at all.
Speaker 12: You know, I think we're a general is fun the
Speaker 12: same we do AI. It's just some part of what
Speaker 12: we do. Right, there's a lot of life sciences, healthcare,
Speaker 12: et cetera. But I want to make a point that
Speaker 12: AI is truly a horizontal technology, meaning that it can
Speaker 12: be it's going to be applied to all industries. It's
Speaker 12: almost like, you know, you couldn't be a company and
Speaker 12: not have a web presence or a mobile strategy, et cetera.
Speaker 12: Same with any industry that we're going into. So for
Speaker 12: our existing founders that are you know that perhaps started
Speaker 12: the company before chat GPT, which is when the population
Speaker 12: became aware of AI, we're telling them, hey, there's new technology.
Speaker 4: You should be adopting this as we go. And same
Speaker 4: with al peace.
Speaker 12: I mean, our job is to be you know, give
Speaker 12: the right advice or current porfoli and be ahead of
Speaker 12: what's coming.
Speaker 3: Right, So, so all temper expectations right there, there is
Speaker 3: sort of enough impetus. I mean, you call yourselves generalists.
Speaker 3: Think about life science, is climate and arsfisial intelligence? What
Speaker 3: about the inbound are you receiving many more pitches from
Speaker 3: AI than others.
Speaker 4: Absolutely, it has changed dramatically.
Speaker 12: I mean you could say even twelve months ago or
Speaker 12: eighteen months ago, the volume of inbound from crypto was
Speaker 12: really really high.
Speaker 4: That's almost gone down to zero.
Speaker 12: And today you know the inbound from AI is very high.
Speaker 12: So it's climate, right, is what founders care about. I
Speaker 12: do think you know this AI? Like I was mentioning,
Speaker 12: if you started any software company today as a founder,
Speaker 12: you would probably be thinking about how do I incorporate
Speaker 12: AI into my company? So whether you know when when
Speaker 12: you're at the application layer, we're going to keep seeing.
Speaker 4: More and more of this AI companies.
Speaker 2: Not wishing to for you to give away your secret source, mom,
Speaker 2: but the founders you find, how are you searching that?
Speaker 2: I know you go to dorms, you've caught sort of
Speaker 2: the way in which you get students on board. But
Speaker 2: where geographically are these founders? You come from Spain, you're
Speaker 2: the co founder originally coming from Iran as well. How
Speaker 2: you diversifying the kind of people that you're managing to
Speaker 2: find to build these companies?
Speaker 12: Yeah, we have various I mean I think sourcing or
Speaker 12: finding the right founders and venture is very intentional, so
Speaker 12: we have We're not sitting in a chair waiting for
Speaker 12: people to show up with this inbounds. You know, we're
Speaker 12: out there trying to find them. We run multiple programs,
Speaker 12: perhaps storm of our most well known programs are Pair Dorm,
Speaker 12: which is where we spend a lot of time in
Speaker 12: universities trying to find those great, high potential founders that
Speaker 12: can go off and start companies. Forty percent of our
Speaker 12: portfolio will come from those founders. And this is a
Speaker 12: you know, this is how pair started. You know, it's
Speaker 12: not it was not immediately obvious ten years ago.
Speaker 4: They should be able.
Speaker 12: You should actually build a firm and go on proactively
Speaker 12: source those kinds of founders. In the last couple of years,
Speaker 12: we've put together a program targeting female engineers. It's called
Speaker 12: Female Founder Circles. Has actually been extremely successful, where you know,
Speaker 12: we form community for female engineers that before they're out
Speaker 12: there starting their company. We've done four cohorts and within
Speaker 12: the first three cohorts, out of one hundred and five women,
Speaker 12: we've had nearly sixty companies come up with that have
Speaker 12: raised significancy.
Speaker 3: So that's you know, I do want your secret source.
Speaker 3: I'm sorry, I want you to talk about it right now.
Speaker 3: So you invested in DoorDash early, DoorDash was a success.
Speaker 7: How did you identify them?
Speaker 12: Well, you know, I think the DoorDash story is really interesting.
Speaker 12: It's part of our how Pair works. My partner Pesman
Speaker 12: and I started Pair. We're both very different ying and Yang.
Speaker 12: He had been an angel for many years. I was
Speaker 12: an operator, and we came together to actually uh form Pair,
Speaker 12: which is more than an investment.
Speaker 4: We're helping to build companies.
Speaker 12: Peschemont met Tony and reached out to me and said,
Speaker 12: mar I met this founder.
Speaker 4: He's amazing. We should back him. And I said, what
Speaker 4: does he do? Uh? He said, uh, food delivery. I said,
Speaker 4: oh my gosh, not food delivery. That's a really.
Speaker 12: Complex, highly operational business.
Speaker 4: We're not gonna do that. He said, no, no, no, you
Speaker 4: have to meet him.
Speaker 12: So I actually spent a lot of time diligencing the company,
Speaker 12: walking up and down University Avenue and talking to every
Speaker 12: restaurant owner or manager and asking them why and uh,
Speaker 12: you know, a lot of what they said is, oh
Speaker 12: my gosh, he's changed my business, and Tony's amazing. And
Speaker 12: then Peschma and I spent a couple of hours with
Speaker 12: the whole founding team, and Tony was actually perhaps the
Speaker 12: only CEO that instead of slides, he just goes to
Speaker 12: a whiteboard and tells you why this is gonna be
Speaker 12: a great company. And he said it was not gonna
Speaker 12: be a food delivery company. He was building the largest
Speaker 12: last mile delivery company. So even then, early on he
Speaker 12: had a vision that wasn't clear, and that was super
Speaker 12: clear for him.
Speaker 2: Mah, great hearing some of the secret sauce and the
Speaker 2: way in which did you do diligence. Thank you so much,
Speaker 2: mar Hujinson of pair VC. Time now for talking tech.
Speaker 2: First up, Russia accusing the United States intelligence hacking thousands
Speaker 2: of iPhones, including devices belonging to Russian nationals and others
Speaker 2: linked to diplomatic missions and embassies in the country. Russia's
Speaker 2: main security service was scant on details and didn't identify
Speaker 2: which US intelligence agency was actually behind the alleged attacks. Meanwhile, look,
Speaker 2: it's a bit of a revolving door again. Over at Twitter,
Speaker 2: the Twitter executive in charge of content moderation and policy
Speaker 2: has resigned.
Speaker 4: Ella Erlin.
Speaker 2: Erwin was one of Musk's most loyal employees and helped
Speaker 2: oversee Twitter's policies on harassment, on hate, on speech, and
Speaker 2: violent content. Now Erwin confirmed her departure in an email
Speaker 2: earlier this hour. In fact, Wall Street Journal also reported
Speaker 2: twhich is a head of brand safety as Aj Brown,
Speaker 2: also departing. Plus, Apple is working on plans to expand
Speaker 2: and revitalize its retail chain. The company is aiming to
Speaker 2: push deeper into China and other parts of Asia, while
Speaker 2: overhauling established locations in the US and Europe.
Speaker 4: Now Iva maker aims to add about fifty.
Speaker 2: New or rebuilt stores through twenty twenty seven, including locations
Speaker 2: in Shanghai and in London.
Speaker 3: Ed Let's stick with Apple, Caro. The Bloomberg Mark German
Speaker 3: preview of Apple WWDC is out on the Bloomberg website
Speaker 3: in term or let's bring in Mark German for more.
Speaker 7: Top of the list.
Speaker 3: The highlight of WWDC the mixed reality headset.
Speaker 7: What are we expecting? Ed Caroline, thank you for having me.
Speaker 4: That's right.
Speaker 13: So on Monday, June fifth, this is going to be
Speaker 13: Apple's biggest launch event in about a decade since they launched.
Speaker 7: The Apple Watch.
Speaker 13: In the first large stream iPhones, the entree like you
Speaker 13: said for Monday, a mixed reality headset, likely to be
Speaker 13: called the Reality Pro or the Apple XR Pro. This
Speaker 13: is going to be Apple's new product category. They think
Speaker 13: it's going to start off slow but eventually become a
Speaker 13: hit with consumers and really be the future of the computer.
Speaker 7: It's going to.
Speaker 13: Blend augmented reality and virtual reality. It'll let you do
Speaker 13: everything you do today on an iPad or iPhone or
Speaker 13: a Mac in three D. You'll control it all with
Speaker 13: your face, your eyes, in your hands, and it's really
Speaker 13: going to give Meta and some of the other headset
Speaker 13: makers like HCC a huge run for their money. Apple
Speaker 13: believes the category doesn't really exist today and they're going
Speaker 13: to be creating the mixed reality category. And I tend
Speaker 13: to believe in this.
Speaker 2: Product, okay, and a lot of your stories dedicated to it.
Speaker 4: We've got thirty seconds, mark.
Speaker 2: What else do you do you mind about?
Speaker 4: That's going to go on? Yeah, I'll give you the
Speaker 4: other highlights.
Speaker 13: One Mac two software, so the Mac you'll see new
Speaker 13: high end max studios of the new M two Ultra chip.
Speaker 13: They've also been planning to unveil the new MacBook Air
Speaker 13: fifteen inch. There software side big revamp to watch os,
Speaker 13: the Apple Watch software with widgets, iOS seventeen, iPadOS seventeen
Speaker 13: and new Mac software.
Speaker 2: He did it, he always does, Mark German from Bloomberg.
Speaker 2: And you know we're not going to end the conversation here, Mark,
Speaker 2: We're going to be jumping on Twitter spaces with Mark German,
Speaker 2: myself and Ed. That's happening in half an hour's time,
Speaker 2: so tune in for that. But meanwhile, that does it
Speaker 2: for this edition of Bloomberg Technology. We've got our podcast
Speaker 2: to catch up if we've missed it. From New York,
Speaker 2: from San Francisco, this is Bloomberg