Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
Speaker 1: from coast to coast with Caroline Hide in New York
Speaker 1: and Eva though in San Francisco.
Speaker 2: This is Bloomberg Tech coming out.
Speaker 3: The US Defence Department adds Ali Barber by doing Others
Speaker 3: to a list of firms that says are connected to
Speaker 3: the Chinese military, but then pulls the list.
Speaker 4: Plus, we keep beating the earnings drum.
Speaker 5: Ribon, Coinbase, Instacar, Airbnb all out with their results.
Speaker 4: Will break it all down.
Speaker 3: An Anthropic completes a deal to raise thirty billion dollars
Speaker 3: in funding, doubling the valuation of the company to three
Speaker 3: hundred and eighty billion dollars.
Speaker 5: Private market said, public markets, we do it all on
Speaker 5: the show, and we think about the macro data as well.
Speaker 5: When that CPI print comes in much cooler than ext
Speaker 5: affected and it gives life to the bond market, but
Speaker 5: not so much the equity market I'm looking at, then
Speaker 5: that's that one hundred.
Speaker 4: It's actually down on the week.
Speaker 5: Look, we're just inching into the green on the day,
Speaker 5: we're off of our lows. But on the week, and
Speaker 5: it's been turbulent and then some We're going to dig
Speaker 5: into the pressures that we see on software that's continuing.
Speaker 5: We're off by one point three percent on the week.
Speaker 5: On the week, we're off by two point three percent.
Speaker 5: On Bitcoin, we actually steady on the day.
Speaker 4: Ed there's a lot to.
Speaker 5: Be digesting about some of the market signals we're getting.
Speaker 4: What are you looking at?
Speaker 3: Later in the show, we're going to go deep on Rivian.
Speaker 3: You and I are going to talk about what's going
Speaker 3: on with this name. Up twenty percent in the session
Speaker 3: at one point, up twenty eight percent, and on track
Speaker 3: for its best day since it's IPO in November twenty
Speaker 3: twenty one. Honestly, it doesn't even matter what it posted
Speaker 3: in the quarter gone or what it said its financials
Speaker 3: would be for this year. The stock is only trading
Speaker 3: on the idea it's on track for its next generation
Speaker 3: EVDR two and that will go on sale next quarter.
Speaker 3: We'll have a lot more on the earning story. This
Speaker 3: is the big breaking news of the morning. The Pentagon
Speaker 3: added names Ali, barber I, Do and BYD to a
Speaker 3: list of Chinese technology companies that it says are aiding
Speaker 3: the Chinese military, only to then take down or pull
Speaker 3: that list without any explanation. The moment that the headlines
Speaker 3: hit from the list going up, you saw the US
Speaker 3: listed shares of those names drop ten Cent was already
Speaker 3: on the list that had been published earlier in January.
Speaker 3: This is difficult to understand. Let's get to Bloomberg Senior
Speaker 3: Tech editor Mike Shephard. I hope that I explained the
Speaker 3: chronology of events correctly there give us the fuller details.
Speaker 3: And my understanding is that Bloomberg News has also heard
Speaker 3: from the Pentagon, but they didn't have much to say.
Speaker 6: They didn't have much to say at all in the
Speaker 6: way of an explanation about why this move. This list,
Speaker 6: This updated list, which now has one hundred and thirty
Speaker 6: Chinese entities on it, was posted in Age forty five
Speaker 6: this morning, and then shortly after it withdrawn. They said
Speaker 6: they had nothing to announce it the the moment now ed.
Speaker 6: This is something that's become increasingly closely watched by investors
Speaker 6: and by others who are wondering whether Chinese companies may
Speaker 6: be suffering some sort of repercussions from elsewhere in the.
Speaker 2: Government as well.
Speaker 6: The twelve sixty h list, as it's known, is seen
Speaker 6: as a precursor perhaps or bell Weather to further measures
Speaker 6: that the government has taken against Chinese entities. And it's
Speaker 6: also closely watched in particular because we see the addition
Speaker 6: in this latest iteration that has since been withdrawn of
Speaker 6: Ali Baba and Baidu, and those companies are making inroads
Speaker 6: and artificial intelligence, and this is a central point of
Speaker 6: contention and competition between the US and China right now.
Speaker 5: It's the central point of contention when it comes to
Speaker 5: open Ai. We understand through a document that's been seen
Speaker 5: that was sent by Open Ai to Capitol Hill all
Speaker 5: regarding their warriors, what Deep Sink's been doing with their technology.
Speaker 6: Well, that's right, Karen. This comes amid so much scrutiny
Speaker 6: on China and its advances in artificial intelligence, and open
Speaker 6: Ai has warned US lawmakers that it believes Deep Seek
Speaker 6: has been using improper methods to advance its models, especially
Speaker 6: the R one breakthrough that we saw last year and
Speaker 6: heard so much about. What they are saying, in essence
Speaker 6: is that deep Seek has been using frontier models from
Speaker 6: the US and elsewhere and copying and taking those results
Speaker 6: and then improperly through a method called distillation, using it
Speaker 6: to advance its own models and train its models, and
Speaker 6: open I went further to say that it has been
Speaker 6: raising these concerns, and we even scooped last year that
Speaker 6: Microsoft and open Ai, who are partners in the open
Speaker 6: Ai venture, had looked into the extent of distillation by
Speaker 6: deep Seek and other Chinese ventures. Open Ai since in
Speaker 6: this memo to Congress, is saying that it has tried
Speaker 6: countermeasures against deep Seek, but deep Seek is c to
Speaker 6: thwart those. It also noted what it called a national
Speaker 6: security risk, and that is that with Deepseek searches under
Speaker 6: topics that are sensitive to the Chinese government and then
Speaker 6: include scannerman Square and Taiwan Independence for example, those are
Speaker 6: screened out and you do not get the answers that
Speaker 6: you might through open ai and other platforms.
Speaker 5: Mike Sheppin on all the national security news, we so
Speaker 5: appreciate it.
Speaker 4: Thank you. Look, let's talk about open ai and.
Speaker 5: This rival Anthropic because on Topics just finalized a deal
Speaker 5: to raise thirty billion dollars, doubling the valuation of the
Speaker 5: company to three hundred and eighty billion from All Blue
Speaker 5: Measuring Gafari joins us. Now what's interesting is some of
Speaker 5: the same vcs that back open Ai are backing Anthropic,
Speaker 5: but talk to us about the Garganshuan valuation hit.
Speaker 7: That's right, So this was even more money than Anthropic,
Speaker 7: and we were initially expecting. The round went from ten
Speaker 7: billion in initial talks to a thirty billion total, so
Speaker 7: we have a big bottom number. And you know, we
Speaker 7: are seeing what we you know, have have kind of
Speaker 7: cloquially referred to as double dipping, or we're seeing investors
Speaker 7: that maybe used to only focus on one big player
Speaker 7: in the AI race actually start to hedge their bets
Speaker 7: and also invest in competitors such as Anthropic, Open Ai
Speaker 7: or Xai open Ai. And that's that's a newer phenomenon
Speaker 7: in the valley.
Speaker 3: I would say, we also surely now have some confirmation
Speaker 3: of how Anthropics business has been going.
Speaker 8: Right.
Speaker 3: You and I've talked a lot about how Anthropics focus
Speaker 3: initially was on the enterprise. Tell me what the annual
Speaker 3: revenue run rate numbers are that we now have, and
Speaker 3: I guess you know the reason we care so much
Speaker 3: about this round is will this company go public or not?
Speaker 7: That's right, We're seeing run rate go up just very
Speaker 7: quickly from the last report of nine billion to thirteen.
Speaker 7: We're also seeing the cloud code run rate in particular
Speaker 7: go up, and now claud code is their coding agent
Speaker 7: that's been very suc that's for so, I think that
Speaker 7: this is showing that Anthropic even though it doesn't have
Speaker 7: the kind of consumer reach that open ai does, which
Speaker 7: sort of has the Kleenex phenomenon of chatchipt being the
Speaker 7: brand everyone knows in the consumer space. But that doesn't
Speaker 7: mean that anthropics should be counted out in terms of
Speaker 7: being able to achieve some very high revenue projections and
Speaker 7: very strong growth, which of course investors like to see.
Speaker 3: Bloomberg sharing Gafari brilliant reporting. Thank you very much. We
Speaker 3: have other funding news. Shield Ai, which makes AI powered
Speaker 3: software to help run autonomous vehicles and other hardware like drones,
Speaker 3: is in talks to raise as much as a billion dollars.
Speaker 3: Sources say the new round would double its valuation in
Speaker 3: less than a year. It up to twelve billion dollars,
Speaker 3: which include the capital raised.
Speaker 5: CARA coming up ed, we'll discuss the wider impact of
Speaker 5: what's been termed the AI scare trade. The sericond Clear Capitals,
Speaker 5: Blobotech Logistic Stocks became the latest victims of the so
Speaker 5: called AI scare trade.
Speaker 4: After a Karaoke turned to AHI company. Yes, I said
Speaker 4: that right. It's a semi.
Speaker 5: Cab platform and enables customers to scale freight volumes by
Speaker 5: three hundred percent to four hundred percent. Shares of H
Speaker 5: Robinson tumbled fifteen percent, adding to a growing mister companies
Speaker 5: where AI fears a reshaping investor sentiment across sectors. Nomaga Equities,
Speaker 5: Reporter Com, and Ryanikey has been across the latest and
Speaker 5: I had to double triple check that this particular company
Speaker 5: karaoke turned autonomous vehicle business. It's actually just six million
Speaker 5: dollars in valuation, but it rocked market caps across the
Speaker 5: entire industry.
Speaker 4: Yeah, it's teeny tiny.
Speaker 8: And actually the CEO told me yesterday that he had
Speaker 8: never imagined, sort of in his wildest dreams, that they
Speaker 8: would have a day like they did yesterday. I mean,
Speaker 8: their stack was at more than twenty percent. So we've
Speaker 8: really just seen sort of the fear of software disruption
Speaker 8: from AI trickle across the broader market into these little
Speaker 8: sectors that you wouldn't think were initially tied to the
Speaker 8: AI trade. And some of the fear in software disruption
Speaker 8: you know, may be founded, but it seems like there
Speaker 8: are a lot of these knee jerk reactions and investors
Speaker 8: are sort of turning and saying, you know, what's next?
Speaker 8: How can I even protect from downside like this? Because
Speaker 8: you know, just the smallest little headline or thing coming
Speaker 8: out can send you know, all of these stocks off
Speaker 8: a cliff.
Speaker 3: Caroline was on this so quickly yesterday. But I think
Speaker 3: there's some value in giving the Bloomberg Tech audience and
Speaker 3: understanding a bit what it's like, right, so that headlines
Speaker 3: are going on the terminal because there's certain stock moves,
Speaker 3: there's volatility, you have like industrials, transport logistics teams, equities teams,
Speaker 3: Like what is happening? You know, like all of these
Speaker 3: stocks are falling. Just summarized that that session, we just
Speaker 3: showed a great chart, but it was severe, right, and
Speaker 3: then we still continue to see ongoing pressure and software
Speaker 3: generally from the broader story.
Speaker 8: Yeah, finding that the trip wire can be really difficult. Actually,
Speaker 8: I mean we've seen so many things fall on pretty
Speaker 8: small things or even you know, like in the instance
Speaker 8: of real estate stocks past week, there wasn't a super
Speaker 8: immediately clear catalyst that drove selling in that sector. So
Speaker 8: it is definitely, you know, a team effort. You know,
Speaker 8: I'm speaking to investors as much as possible to see
Speaker 8: sar of what they're thinking, how they're reacting to these
Speaker 8: sort of like sparked sell offs. And yeah, it's been
Speaker 8: a full collaboration, right because we just don't know what's next.
Speaker 8: There are so many different parts of the market that
Speaker 8: could see potential disruption.
Speaker 9: Here and where.
Speaker 8: You know, these fears could spark another decline in shares.
Speaker 5: While you were sort of calling up the CEO of
Speaker 5: Algorithm that was affecting logistics, we understand we were speaking
Speaker 5: to the CEO of Altruist, which is the wealth management
Speaker 5: start up that discombobulated wealth management market more broadly, and
Speaker 5: he too had this sort of David Goliath moment common
Speaker 5: But what's so interesting is ED and I speak a
Speaker 5: lot to the VC back companies that are developing the
Speaker 5: latest autonomous vehicles and trucking and bringing up these new platforms.
Speaker 5: How discerning our investors starting to become to a headline
Speaker 5: risk or actually what is going to upend the industries
Speaker 5: they put money into, Because is really a seven million
Speaker 5: dollar algorithm company going to do that.
Speaker 8: You know, I think we've seen actually really a lack
Speaker 8: of discernment. Right, Everything is a very knee jerk reaction.
Speaker 2: Now.
Speaker 8: I keep hearing people say over and over something along
Speaker 8: the lines of, you know, sell first, ask questions later.
Speaker 8: And I think, actually, what I'm hearing from, you know,
Speaker 8: fund managers and people on the street is they're looking
Speaker 8: or trying to impress sort of maybe more discernment on investors,
Speaker 8: so they're not sort of making these very like snap decisions.
Speaker 8: We'll have to keep seeing what happens. It's definitely been
Speaker 8: you know, a while a few days.
Speaker 3: Bloomer's Carmen Rhiniky, You've been brilliant for a number of
Speaker 3: weeks in a row trying to explain what's going on
Speaker 3: the AI scare. It sent market caps across stocks in
Speaker 3: multiple industries humbling. We've just explained that, but all that
Speaker 3: disruption hasn't hit top lines. That's notable not just for
Speaker 3: public company shareholders, but for private market investors who are
Speaker 3: trying to find their next win. Surrocance, managing director of
Speaker 3: Clear Capital, a generalist VC firm multiple software companies in
Speaker 3: its portfolio.
Speaker 2: Sarah, that's your job, right, like you.
Speaker 3: Know, in the case study of a software name with
Speaker 3: a six million dollar valuation that spooked an entire logistics
Speaker 3: sector yesterday, you want to be finding those names through
Speaker 3: that lens. What's your interpretation of what we've seen this
Speaker 3: week across multiple sectors where software is coming for it.
Speaker 10: Yeah, I want to find companies that are going to
Speaker 10: disrupt markets because they have a great product, not because
Speaker 10: they have great Twitter fingers.
Speaker 4: And so I think part.
Speaker 10: Of what we're seeing right now that makes investors nervous
Speaker 10: on the startup side private investors is that we want
Speaker 10: to make sure that these companies, the CEOs who are
Speaker 10: going viral with these sort of hey guess what, everything's
Speaker 10: falling apart, that they actually have an interesting solution, because
Speaker 10: otherwise they're just sort of a megaphone, not necessarily a unicorn.
Speaker 2: I said software coming for it.
Speaker 3: I meant AI coming for it, even coming for existing
Speaker 3: software platforms. Is there real risk to establish industries here imminently.
Speaker 11: Yeah.
Speaker 10: I think that there's risk long term, but the reality
Speaker 10: is that a lot of that risk is going to
Speaker 10: be sort of taken up by companies in those industries.
Speaker 10: So it's not like logistics is ignoring what's happening right
Speaker 10: When you look at some of the bigger logistics players,
Speaker 10: you have companies like the Nordics who have been consistently
Speaker 10: sort of ahead on software, investing on their pension arm
Speaker 10: So they're obviously, I'm sure, having those kinds of conversations,
Speaker 10: and so I think it's a little bit flipant to
Speaker 10: think that you're going to end in a situation where
Speaker 10: logistics didn't see this coming. Of course they know, and
Speaker 10: there are often placing bets into startups or building and
Speaker 10: buying technology in house that can help them sort of
Speaker 10: be a part of that change, kind of the same
Speaker 10: way in oil and gas we've seen them often also
Speaker 10: get some upside as it transitions to a cleaner energy.
Speaker 5: It makes a great point, and I'll chat that you know,
Speaker 5: you would have thought Flexport would be the company that
Speaker 5: would be uphending the future of transportation and logistics AI.
Speaker 5: From your perspective, how are you at this moment seeing
Speaker 5: the valuations in startups reflecting this FOMO or this fear
Speaker 5: fact that you see in the public markets.
Speaker 10: There's a huge barbell right now in valuations for startups,
Speaker 10: and what you tend to see is there a handful
Speaker 10: of companies mostly in AI, like Anthropics, Giant Round, like
Speaker 10: some of what Elon's doing with his various country companies
Speaker 10: like Open Ai, where those private names are going up
Speaker 10: and up and up, and we all have no idea
Speaker 10: how they're going to make that money back in an
Speaker 10: IPO or ever be profitable. And then on the other hand,
Speaker 10: you have startups that aren't promising the world, and we're
Speaker 10: seeing a lot less velocity in those startup fundraising rounds,
Speaker 10: not because there's anything wrong with those companies, but just
Speaker 10: because people are worried about, Hey, if all of the
Speaker 10: capital intensity is going over there, do I really want
Speaker 10: to be in these sort of solid, interesting, slower growing
Speaker 10: companies that might actually end up being profitable but don't
Speaker 10: feel like they're going to be multi trillion dollar IPOs.
Speaker 5: Although any solid SaaS companies.
Speaker 10: Out there right now, I think there are a lot
Speaker 10: of solid SaaS companies. I mean, even in the public markets,
Speaker 10: you look at names like Salesforce and you have to
Speaker 10: kind of ask, why do people, even though the valuation
Speaker 10: is a bit high, why do people think that this
Speaker 10: is going to go away overnight? When when they look
Speaker 10: inside of their own companies, they're not in a rush
Speaker 10: to cancel all their contracts and just yolo everything into
Speaker 10: chat GPT. But for some reason, there's the thought that
Speaker 10: that is going to happen overnight in the larger market
Speaker 10: and all of these companies are going to be valueless.
Speaker 5: Sarahkunst looking at a portfolio right now. We appreciate it,
Speaker 5: Managing director of Cleo Capital. Coming up, we're going to
Speaker 5: speak with a software company, Twilio CEO Cozmership Chandlers joining us.
Speaker 4: The latest earnings they were good. As a Bloomberg Tech.
Speaker 5: Shares a Twilio holding on too, Gaines were up two
Speaker 5: point four percent, the company posting solid fourth quarter earnings
Speaker 5: results and guidance, driven in many ways by gains and
Speaker 5: voice and messaging. Company also issued its revenue forecast of
Speaker 5: about fourteen percent that top DNAs estimates. Twilio CEO cozemer
Speaker 5: Hip Chandler is with US and Kazima. What's driving the
Speaker 5: adoption You talk about becoming sort of a foundational infrastructure layer.
Speaker 4: What does that look like?
Speaker 12: Yeah, I mean I think for us, what it means
Speaker 12: is is that companies increased They've always been using us
Speaker 12: for communications and for data, but increasingly they're pointing their
Speaker 12: workloads towards us. And I'm talking about AI companies as
Speaker 12: well as enterprises as infrastructure that allows them to connect
Speaker 12: the llms, the data warehouses, the agents that they're now
Speaker 12: starting to build with, and Telco's put all of those
Speaker 12: different capabilities together under one platform.
Speaker 13: And that's I think what uniquely positions.
Speaker 5: Twilio uniquely positions you against this so called SaaS apocalypse
Speaker 5: how much because they imagine you get questions on an
Speaker 5: ongoing basis from investors saying how resilient is the way
Speaker 5: in which you charge customers.
Speaker 12: Yeah, we don't get as many questions about that that topic. Actually,
Speaker 12: I mean, I think the reality is is that, you know,
Speaker 12: we've always been sort of an infrastructure provider, and so
Speaker 12: there's some level of insulation in that way.
Speaker 13: Like what we do is like very unique.
Speaker 12: I think the other dynamic that is at play here
Speaker 12: is that our pricing model has always been usage based
Speaker 12: and so you know, if you're worried about what the
Speaker 12: terminal value is associated with seat licenses and stuff like that,
Speaker 12: like that's not something that we.
Speaker 13: Think about day to day.
Speaker 12: Instead, we think about how do we combine all of
Speaker 12: these different elements that are coming to the fore to
Speaker 12: create a great customer experience.
Speaker 13: On the other.
Speaker 3: Side, it's great to have you back on the show,
Speaker 3: going back to basics with Twilio. I think it really
Speaker 3: helps the audience understand right, Twilio does customer engagement, and
Speaker 3: on the show every week Caroline and I get told
Speaker 3: that the area that is most imminently ripe for improvement
Speaker 3: is call center essentially that kind of domain. The analysts
Speaker 3: are looking at the results and the outlook and saying
Speaker 3: that you might be being a bit conservative and a
Speaker 3: bit muted. They want to see more evidence that voice AI,
Speaker 3: as an example, is really taking off. What do you
Speaker 3: see on the ground, so to speak, Osmer.
Speaker 12: I mean, you know, look, we want to see more too.
Speaker 12: I mean, I think we feel pretty good about the look.
Speaker 12: We feel great about the way that twenty twenty six
Speaker 12: is shaping up so far, and we're pretty positive on
Speaker 12: it all. I think as it relates to voice AI specifically,
Speaker 12: since that's kind of where you started, I mean, I
Speaker 12: think you're seeing tremendous velocity from a number of different companies.
Speaker 12: You know, we called out a number of them in
Speaker 12: our most recent earnings. You know, I'll just take an
Speaker 12: example like Sierra, like they've really captured the imagination right
Speaker 12: now in this moment. We're lucky to have them utilizing
Speaker 12: our infrastructure to be able to grow with a customer
Speaker 12: like that and add different kinds of voice capabilities to
Speaker 12: the speech to text and text to speech capabilities that
Speaker 12: they offer. So I think that's really been exciting and
Speaker 12: interesting for us. And then I think looking forward there's
Speaker 12: a number of other growth vectors that we're looking at.
Speaker 12: This idea of having persistence, memory, context, being able to
Speaker 12: combine all of that also with agent building capabilities. I
Speaker 12: think that's what creates durable tailwind for our company.
Speaker 3: The usage based model is you just described it. It's
Speaker 3: a great advantage for you, right, And I think again,
Speaker 3: just going on the reaction to earnings, some of the
Speaker 3: concern is that if the outlook for the rest of
Speaker 3: the year is conservative, how much is that because you
Speaker 3: don't have visibility that far afield on a usage based
Speaker 3: model from your customers.
Speaker 13: Yeah, I think it's less about that.
Speaker 12: I mean, I just think the dynamics of a usage
Speaker 12: based business maybe cause us to be a little bit
Speaker 12: more conservative about the way that we forecast and the
Speaker 12: way that we kind of call it. I wouldn't take
Speaker 12: that as signal that there's any dampening of optimism in
Speaker 12: terms of our business.
Speaker 13: Quite the contrary. I mean, the signals we're.
Speaker 12: Hearing from customers are that they want to go all
Speaker 12: in with Tulio again, not just communications and data, but
Speaker 12: to build their entire AI stack around a lot of
Speaker 12: our infrastructure, including a number of other companies obviously as
Speaker 12: well who will end up partnering with. But I think
Speaker 12: this usage based pricing model like ideally positions us because
Speaker 12: it matches a customer's revenue events with our revenue events,
Speaker 12: and so our incentives are very very tightly aligned.
Speaker 5: Because I know there's a lot of fear, there's a
Speaker 5: lot of anxiety you're not just in investors, but in
Speaker 5: people writ large around AI at the moment, How are
Speaker 5: you thinking about that around your own labor force and
Speaker 5: about how you make your business as efficient as possible
Speaker 5: by adopting the tools with which you're currently building upon.
Speaker 12: Yeah, Look, my personal view is is that I don't
Speaker 12: think AI is per se coming for the workforce. I mean,
Speaker 12: I think frankly, it's going to be tremendously additive to
Speaker 12: the workforce, like you know, I've got a kid in college.
Speaker 13: I've got one that's about to go.
Speaker 12: I actually think what's about to happen here is is
Speaker 12: that over the next five to seven years you're going
Speaker 12: to have a whole slew of college graduates who are
Speaker 12: AI natives, who are going to add so much more
Speaker 12: interesting and intellectual capacity to the workforce that I actually
Speaker 12: think workforces could potentially.
Speaker 13: Grow in many ways.
Speaker 12: I think what is you know, probably a certainty is
Speaker 12: is that those who don't retrain or reskill with different
Speaker 12: kinds of AI capabilities, they're probably more at risk. And
Speaker 12: you know, we're working hard to make sure that our
Speaker 12: workforce is retrained, reskilled. We're adding a number of different
Speaker 12: capabilities to our own internal tech stack. There's a number
Speaker 12: of things that we're doing to use AI inside the company.
Speaker 12: You know, at you pointed to customer service a moment ago,
Speaker 12: we're certainly using it their inbound sales. We're certainly using
Speaker 12: it there. And I think there'll be a lot more
Speaker 12: other things that we do going forward.
Speaker 5: Cosimship Chandler embracing it. We thank you so much, Twilio CEO.
Speaker 5: There coming up, we'll take a look at Airbnb and
Speaker 5: Instacart's earnings, so coming thick of fast folks.
Speaker 14: This a bring by Tech, Welcome back to Bloomberg Tech.
Speaker 3: At the top of the show, our top story was
Speaker 3: US listed shares of Chinese technology companies. The Pentagon briefly
Speaker 3: listed Ali Barber, Baidu, and byd as being names that
Speaker 3: it considers as aiding the Chinese military. Then that list
Speaker 3: was pulled from the internet, essentially. In Vidia also down
Speaker 3: two percent. I'm not drawing a causal link, but remember
Speaker 3: that in Ali Barber's case, Embido as well, they are
Speaker 3: big potential buyers and video GPUs if that is a
Speaker 3: transaction that's allowed to go through by the US government. Also,
Speaker 3: taking a look at shares of Amazon Caro, we are
Speaker 3: teetering on the edge. They are flat as a pancake
Speaker 3: right now in the session, but had been headed for
Speaker 3: their ninth straight day of declines following that monster Capex
Speaker 3: outlook for the year. Ninth straight day of declines would
Speaker 3: be the worst losing streak since two thousand and six,
Speaker 3: which I guess if you look at the right hand
Speaker 3: side of that chart and the slide gives you a
Speaker 3: sense of anxiety. Right now with capital expenditure also looking
Speaker 3: at Rivian.
Speaker 2: So Rivian really on a tear.
Speaker 3: Remember it was down thirty percent almost year today it's
Speaker 3: now up twenty four percent in the session. Doesn't really
Speaker 3: matter what they posted in the court gone, but they's
Speaker 3: basically on track for their next product, the R two,
Speaker 3: And that's all the market cares about.
Speaker 5: I mean, talk about the R two because it's got
Speaker 5: to be able to inspire purchasing at a time where
Speaker 5: we've taken away some of the support from the government
Speaker 5: and we are seeing just EV's on a downhill trajectory.
Speaker 2: Yeah.
Speaker 3: You know, Rivian today had two premium consumer products that
Speaker 3: are on SSUVR and TE pick up, and it didn't
Speaker 3: have a mass market product. The R two is supposed
Speaker 3: to be that it's still at a premium price point,
Speaker 3: and Rivian and its cor J Scarring are basically argued
Speaker 3: there isn't much out there below seventy thousand US dollars
Speaker 3: for the everyday family.
Speaker 2: You know, in the SUV form.
Speaker 3: Factor, it's like the Toyota RAB four of evs. And
Speaker 3: all they're saying is that, you know, things are going
Speaker 3: as they said they would. And that chart there tells
Speaker 3: the story that spike that you around December, that's when
Speaker 3: they announced that their AI plans, right, which we went
Speaker 3: deep on, and then it faded because there was a
Speaker 3: lot of anxiety that they'd fall behind on the actual
Speaker 3: product delivery.
Speaker 5: I mean, they had been kind of cost right per vehicle,
Speaker 5: more than seven thousand dollars, like in lockstep with the
Speaker 5: amount that you're now not getting in terms of subsidization.
Speaker 4: But it's interesting the delivery numbers. Are they optimistic?
Speaker 5: Is it positive to be between sixty two and sixty
Speaker 5: seven thousand.
Speaker 3: It's more than last year, but it's still is low volume, right,
Speaker 3: and they're still going to lose two billion dollars this year.
Speaker 3: And there's still one to watch though, because of you know,
Speaker 3: all the people that back them and the hype around
Speaker 3: their tech elsewhere and earning strong demand for travel help
Speaker 3: booth shares of Airbnb bloem most Natalie Lung joins US. Now, Airbnb,
Speaker 3: what's the story here? You know, what are they doing
Speaker 3: that's new, that's different and that's giving them a boost.
Speaker 11: Last year they rolled out a reserve now, pay later
Speaker 11: option in the US, and that's really how boost bookings,
Speaker 11: letting people book in advance without worrying about their budgets
Speaker 11: so much, and there expecting to roll this out to
Speaker 11: more markets globally, so that could continue help help the results.
Speaker 11: And this year CEO branch has can really put a
Speaker 11: big focus on launching new businesses. Yesterday he talked about
Speaker 11: possibly testing airport pickup services and we also know their
Speaker 11: testing grocery delivery for guests.
Speaker 3: We're up four percent. At one point, we'd been up
Speaker 3: almost ten percent in the session. I know we're here
Speaker 3: to talk about tech, Natalie, but does Airbnb tell us
Speaker 3: anything about the kind of health of the travel industry
Speaker 3: right now and the consumer around the world to spend
Speaker 3: money on travel and experiences.
Speaker 11: Yes, so, US travel has been pretty strong, and especially
Speaker 11: strong in their international markets as well, which are growing
Speaker 11: at almost like twice as fast than their core markets.
Speaker 11: They called out Brazil, Japan, and India has also seen
Speaker 11: a lot of first time bookers for them.
Speaker 5: Let's talk about the strength of groceries in Stacar really
Speaker 5: impressing investors, Nahani.
Speaker 11: Yes, yesterday they provided first quarter guidance that could be
Speaker 11: their strongest quarterly growth as as a public company. So that, uh,
Speaker 11: that was really positive news for investors, you know, instacrat
Speaker 11: has seen this sort of moderating growth and in the
Speaker 11: last few years, and this has really seen them accelerating.
Speaker 11: As you know, they're lowered the minimum basket size needed
Speaker 11: for free delivery. That's really helped. Their partnership with Uber
Speaker 11: allowing people to order takeout has also helped with demand.
Speaker 5: What about the underlying technology and how much AI is
Speaker 5: becoming a flywheel for them or not.
Speaker 11: Yes, they're continuing to push out new technology solutions for
Speaker 11: grocers such as their white label website building and as
Speaker 11: also as well as other recommendation engines for grocery and
Speaker 11: that has powered a third of their revenue and they
Speaker 11: continue to expect it to grow this year and pushing
Speaker 11: internationally with Costco in Europe.
Speaker 5: In most Natalie Lung, we thank you so much on
Speaker 5: their earnings roundup.
Speaker 4: We've got more of them.
Speaker 5: Coinbase, well, it showed how quickly a cooling crypto market
Speaker 5: can pressure even one of the industry's most diversified exchanges
Speaker 5: revenue in the fourth quarter tumbling twenty percent to one
Speaker 5: point eight billion. That says, falling token prices drain trading
Speaker 5: activity across digital assets. This is the company's stock is
Speaker 5: already down ay thirty seven percent year to date, but
Speaker 5: it's got a bounce today. Katie Greifeld, I'm pleased to say,
Speaker 5: joins us, host of the Crypto Show, and whateveryone is
Speaker 5: trying to get to grips with is have we found
Speaker 5: a bottom here? Is?
Speaker 4: Is it bad? And as ugly as it gets?
Speaker 15: That seems to be the explanation for why you're seeing
Speaker 15: shares bounce and then some Coinbase currently up about sixteen
Speaker 15: percent at the moment. That is its best day since June,
Speaker 15: which looks unintuitive when you consider some of the actual
Speaker 15: numbers that we got last night, which weren't great transaction
Speaker 15: revenue coming in soft you also trading volumes coming in
Speaker 15: lower than expectations. But as you mentioned, I mean, shares
Speaker 15: were thirty seven percent through yesterday's close. We also had
Speaker 15: Robinhood report a few days earlier their crypto business drove
Speaker 15: a net revenue miss for that company, So it wasn't
Speaker 15: necessarily surprising to see these figures. And the idea here
Speaker 15: is now basically that exactly that we're looking for a bottom,
Speaker 15: that maybe the worst is already priced into this stock.
Speaker 3: Katie, I'm a little ignorant here. You know, like crypto
Speaker 3: from a sort of asset perspective is not something that
Speaker 3: I spend a huge amount of time on. What I
Speaker 3: was trying to ask out in the week is I
Speaker 3: get when volumes are down, that's not great, right, that's
Speaker 3: kind of logical, But.
Speaker 2: There's been so much volatility.
Speaker 3: So I thought that in an environment where there's volatility,
Speaker 3: a name like this would do really well. Right, because
Speaker 3: you're on one side of the trade or you're on
Speaker 3: the other.
Speaker 15: Well, you're not wrong for thinking that. I mean, volatility
Speaker 15: that's typically good news for exchanges across any asset class.
Speaker 15: But consider the movements that you've been seeing in the
Speaker 15: price of bitcoin. It hasn't necessarily been two sided volatility.
Speaker 15: It's I've really been dropping like a stone over the
Speaker 15: past several weeks, which isn't a great environment when it's
Speaker 15: a one sided trade here. But I mean, as Caroline mentioned,
Speaker 15: this is a fairly diversified business. It's they've been trying
Speaker 15: to move away from just that reliance on spot trading.
Speaker 15: They have an interesting revenue sharing agreement with Circle, so
Speaker 15: they're exposed to stable coins, which is seen as much
Speaker 15: steadier and another reason why you are seeing the shares
Speaker 15: pop today is there's some optimism that maybe we are
Speaker 15: going to see that Market Structure bill that's currently working
Speaker 15: its way through Congress actually gets some action in the
Speaker 15: next few months, maybe actually make its way over the
Speaker 15: finish line. So that's what you're seeing. Maybe also the
Speaker 15: price of bitcoin itself pop a little bit today.
Speaker 4: Clarity and the Clarity Act. Who thought it?
Speaker 5: Katie Greifeld, thank you so much for joining us today. Meanwhile,
Speaker 5: let's take quick more aarnings. I want to just take
Speaker 5: you to Apply Materials because this is the equipment maker
Speaker 5: of the US for the chip makers. We are up
Speaker 5: nine percent status at a numbers, managing to prove to
Speaker 5: the MAIT that even though China is pulling away in
Speaker 5: terms of orders, we're actually seeing just the drumbeat of
Speaker 5: more and more investment in data centers. Of course, that
Speaker 5: means equipment manufacturing that is needed for chips to go
Speaker 5: into those data centers. Applying materials benefiting off the back
Speaker 5: of it. We're up eight point nine per cent. CEO
Speaker 5: sounded pretty bullished.
Speaker 3: Etching and deposition gear absolutely essential. Let's go to space SPACEXA.
Speaker 9: Dragon and Guard feed Crew twelve and lift.
Speaker 7: Off Freedom Flies bound for the International Space Station.
Speaker 10: One point seven million pounds of trust now going bacod night.
Speaker 2: I've got ahead of myself.
Speaker 3: The SpaceX capsule, carrying four crew members from the US,
Speaker 3: Europe and Russia, launched overnight to the International Space Station,
Speaker 3: the start of a planned eight months stay in orbit
Speaker 3: that will include research on meditation in space.
Speaker 2: They'll be joining three other astronauts.
Speaker 3: Aboard the ISS, which has been operating with a skeleton
Speaker 3: crew since the first ever space medical evacuation.
Speaker 2: You remember in January, Karen.
Speaker 4: Thankscute meditation. We need to do more of it on Earth.
Speaker 4: Let loan in space. Brilliant, Thank you, Ed.
Speaker 5: Meanwhile, coming up, bensn from Primary joins us to talk
Speaker 5: about the venture firms. The latest megafund is Bree meg Tech,
Speaker 5: early stage benure firm Primary. It's just closely six hundred
Speaker 5: and twenty five million dollar fund that brings total assets
Speaker 5: on a management to one point six five billion, and
Speaker 5: it's at the time when investors are still really eager
Speaker 5: to back start ups at the seed level. I speak
Speaker 5: to Ben's Sun, Primary's co founder general partner Ben. The
Speaker 5: size and scale of the funds are getting bigger.
Speaker 4: Is that because we're seeing.
Speaker 5: More opportunity to fund more companies or because each individual
Speaker 5: seed company needs more money.
Speaker 16: I think it's a combination about caroline. And if you
Speaker 16: look over the last decade the seed more, it has
Speaker 16: grown from five billion dollars ten years ago, and this
Speaker 16: is just what was invested at seed in the US
Speaker 16: and ten years ago in that year to last year
Speaker 16: being about twenty billion, So we've seen four x the
Speaker 16: amount of capital in terms of round sizes. On top
Speaker 16: of that, round sizes have gone up from one billion
Speaker 16: to four billion as well, So again a climb of
Speaker 16: about four x.
Speaker 5: Are you seeing returns though? That vindicates such bigger bets
Speaker 5: of the seed level? Where are you deciding to double
Speaker 5: down on companies?
Speaker 4: Do you just stay at seed?
Speaker 5: How do you think your own DNA changes in this moment?
Speaker 8: Oh?
Speaker 16: I think if you look at historically on the exits
Speaker 16: and the size of outcomes in both the media and
Speaker 16: the decile, you've seen that each kind of generation of
Speaker 16: startups just gets a step function higher and higher. And
Speaker 16: now with what's cappening in AI, we think the outcomes
Speaker 16: are going to be much greater, and so the amount
Speaker 16: of capital going in it matches the quality of the talent,
Speaker 16: but also the quality of the opportunities. And with transformations
Speaker 16: like AI, we think in the market thinks those opportunities
Speaker 16: are going to become and those outcomes are going to
Speaker 16: become bigger than that we've ever seen before.
Speaker 3: Then some of the data you were just referencing. I
Speaker 3: wrote my column about this in January twenty six. There's
Speaker 3: no point calling it a seed round anymore. Mango seed,
Speaker 3: coconut seed, avocado seed. But you know, the scale is
Speaker 3: not just different. You're basically making a bet sometimes on
Speaker 3: just two or three people in the AI lab context,
Speaker 3: for example. Is that more disconcerting in the moment when
Speaker 3: you do a seed round based on you know, maybe
Speaker 3: an alumni of a bigger tech company or someone that's
Speaker 3: going it alone in this environment.
Speaker 16: Yeah, people look at historical data and they say, well,
Speaker 16: round size has gotten bigger, So it hasn't become irrational.
Speaker 16: Reason why we have become bigger because it's become more rational.
Speaker 16: Think about the founding talent. I know alone. You know,
Speaker 16: I started my career as a founder thirty years ago.
Speaker 16: You know what we knew about the Internet and how
Speaker 16: to scale a technology company back then. I mean, it's
Speaker 16: night and day to where you see the market and
Speaker 16: the type of talent you have. Now, a lot of
Speaker 16: the talent are coming from best in class tech companies
Speaker 16: that have gone from zero a billion dollar type outcomes
Speaker 16: if not more, and those that talent is coming out
Speaker 16: and starting new companies. And then on top of that,
Speaker 16: the scale and the quality of their ideas are just
Speaker 16: getting in better and better. So I think the capital
Speaker 16: going in, the valuations are climbing.
Speaker 13: These are just markets being efficient.
Speaker 16: And saying, well, the talent and these potential outcomes look
Speaker 16: like they have much more upside and therefore kind of
Speaker 16: demand those type of premiums.
Speaker 2: The seed market is very broad. What are the corners of.
Speaker 3: The technology industry or opportunities where like the technology just
Speaker 3: doesn't exist yet.
Speaker 16: I mean, the big unlock, as you know, is around
Speaker 16: kind of AI, and this is at the infrastructure level
Speaker 16: all the way to the application level, and the opportunities
Speaker 16: that we're kind of seeing across all different types of
Speaker 16: sectors is becoming evident that really AI is being unlock.
Speaker 16: What is a much larger TAM than historically you've seen before.
Speaker 16: Before we used to talk about tam as like software budgets.
Speaker 16: AI is replacing or augmenting human labor. And when you
Speaker 16: think about that type of replacement augmentation, we're talking about
Speaker 16: the market that's trillions of dollars, not you know, hundreds
Speaker 16: of billions of dollars. And that's really kind of the
Speaker 16: opportunity that we see. And it's happening in all different
Speaker 16: sectors where it be fintech, healthcare, industrials throughout the enterprise,
Speaker 16: all the way to SMBs and consumers across the board.
Speaker 16: We think there's going to be huge transformations.
Speaker 3: Especially with Ai Benson, general partner at Primary. Great to
Speaker 3: have you on Bloomberg Tech. Thank you very much. Carries
Speaker 3: so many more news headlines to get to there are.
Speaker 5: It's time now for talking tech, and first up. Byte
Speaker 5: Dance is in talks to sell its Moonton video game
Speaker 5: business to Saudi Arabia based Savvy Games and.
Speaker 4: One than six billion dollars.
Speaker 5: It's all according to reports and Voiters, which says the
Speaker 5: parties could finalize a deal as soon as this quarter.
Speaker 5: Bloomberg's reported that the company has revived sale corks late
Speaker 5: last year, plus day one Data centers. Well, it's selected
Speaker 5: banks for a USIPO that could raise five billion dollars
Speaker 5: according to sources. They say the company, which is backed
Speaker 5: by Chinese data center operator GDS, targeting a valuation as
Speaker 5: high as twenty billion dollars, a listing that may take
Speaker 5: place as soon as this year, and also looking to
Speaker 5: go public in the United States. Is SoftBank's digital payments
Speaker 5: provide a paypey. The company could list as early as March,
Speaker 5: according to public filing. Now, Pape is seeking evaluation more
Speaker 5: than ten billion those soft Bank founder Massiyoshison is pushing
Speaker 5: for as much as twenty billion dollars sources.
Speaker 2: And Okay coming up.
Speaker 3: Social media is having a rough start to the year,
Speaker 3: But is the bad press slowing the industry's growth?
Speaker 2: Were on that next, This is Blomberg Tech.
Speaker 4: Social media's impact on teams.
Speaker 5: Well, it's never been more scrutinized than it is right
Speaker 5: now with lawsuits in the US of addiction allegations, Australia's
Speaker 5: ban on under sixteen's that could actually spread to Europe.
Speaker 5: But are these moves actually comping the industry's growth. Bloombot's
Speaker 5: Kurt Wagner, who covers social media, joins us on this.
Speaker 5: You wrote a piece, your tech in depth piece that
Speaker 5: kind of shows that no, it doesn't actually affect the
Speaker 5: business model.
Speaker 4: Thus far, it feels like.
Speaker 9: Yeah, And I think there's two elements here.
Speaker 17: The first is the volume of accounts that have been
Speaker 17: removed and again these bands right now, to be clear,
Speaker 17: this is only happening in Australia, Caroline right, so there
Speaker 17: is potential that this could become a real global problem.
Speaker 9: But the number of accounts that are being removed our
Speaker 9: drops in.
Speaker 17: The bugget for these companies, it's maybe even a rounding
Speaker 17: air in terms of who they are losing. And then
Speaker 17: on top of that, I think if you talk to
Speaker 17: people who study this industry from a business standpoint, a
Speaker 17: fifteen year old on snap, a fifteen year old on
Speaker 17: Instagram that is not a super valuable user for these
Speaker 17: companies in terms of revenue. They don't usually have a
Speaker 17: lot of disposable income.
Speaker 9: They're not making household purchasing decisions yet.
Speaker 17: And so the point of this story here was mostly
Speaker 17: to say, right now, this is not a real threat.
Speaker 9: To the business of these companies.
Speaker 17: It could be down the line, but I think that's
Speaker 17: something that you know, might be years away if it
Speaker 17: ever comes.
Speaker 3: The extension of that, that last part is that many
Speaker 3: of these names still rely heavily on advertising as source
Speaker 3: of revenue. This obviously subscription in some cases, which is
Speaker 3: a different model that would suggest generally add healthy.
Speaker 2: Right now, what do you.
Speaker 17: Say, Yeah, I mean all of these businesses continue to
Speaker 17: grow their ads, their ads business quite consider. I think
Speaker 17: it was meta it was more than twenty percent year
Speaker 17: over year. I mean, this is a company that's been
Speaker 17: around more than twenty years at as you know, and
Speaker 17: they still figure out how to grow that AD's business.
Speaker 17: And so I think there is a lot of money
Speaker 17: still pouring into these companies.
Speaker 9: And again it's just where is that money being targeted.
Speaker 17: It doesn't feel that teams, while they're important again to
Speaker 17: create a vibe around a platform, to create buzz around
Speaker 17: a platform, they're not necessarily who advertisers are looking to
Speaker 17: get right now. And so I think that's where again
Speaker 17: there might be some delay in how these types of
Speaker 17: bands impact the business.
Speaker 5: Push us forward, though, Kirk, because we are going to
Speaker 5: see some key executives have to come up against.
Speaker 4: Arguments in court.
Speaker 5: Look, we all remember the pictures of Mark Zuckerberb being
Speaker 5: confronted by parents holding up signs that moment resonates with
Speaker 5: a userbase and of potential customer it does.
Speaker 17: We're expected to hear Mark Zuckerberg testified next week in
Speaker 17: Los Angeles in a big trial that's all about whether
Speaker 17: these platforms are purposefully addicting teens to you know, Instagram, snap,
Speaker 17: TikTok et, cetera. And so you know, there is a
Speaker 17: reputational element to this. And I think, while I say
Speaker 17: that the business might not be impacted now, if you
Speaker 17: get a whole generation of teenagers who stop using these products,
Speaker 17: that is that is not good, right, That is not
Speaker 17: good for Meta that these people are now going to
Speaker 17: go spend time elsewhere the most.
Speaker 2: Curt Wagner, thank you very much.
Speaker 3: Some of the biggest players behind the AI boom are
Speaker 3: taking a page from the Crypto Industries twenty twenty four playbook,
Speaker 3: working to back congressional candidates who favor a lighter regulatory
Speaker 3: touch on AI. For more Bluebersts corporate lobbying report, Emily
Speaker 3: Burnbam joins US now. And these are names that are
Speaker 3: familiar right across the top tier eventure capital and the
Speaker 3: Frontier Labs explain this playbook they're trying to replicate.
Speaker 18: So the the memory of fair Shake, Crypto's big pack
Speaker 18: looms large over Democrats and Republicans in Washington. They spent
Speaker 18: huge sums, hundreds of millions of dollars and we're very successful.
Speaker 18: And so now the AI companies, including both Andresen and Horwitz,
Speaker 18: who also gave to fair Shake, are pouring millions of
Speaker 18: dollars into congressional races across the country. Last time, the
Speaker 18: crypto industry won by not talking about crypto, instead boosting
Speaker 18: candidates based on issues that are popular in their district.
Speaker 18: And that's exactly what the AI industry is going to
Speaker 18: do this time with their pack. It's called leading the future.
Speaker 5: What can they do to dial into where the electric
Speaker 5: is at at the moment, because when it comes to AI,
Speaker 5: there's a lot of anxiety, a lot of labor anxiety.
Speaker 5: For example, where are they going to post the opportunity
Speaker 5: to them?
Speaker 18: Yes, so I think first there is recingly a lot
Speaker 18: of anxiety among constituents about AI, particularly about employment, particularly
Speaker 18: about data centers being built in their backyards. So I
Speaker 18: think for the AI industry, they're both they're going to
Speaker 18: be making the argument that this is good for American
Speaker 18: dominance over China, that they are the innovators of the future.
Speaker 2: We'll see how that plays.
Speaker 18: But more than anything, I think they're working with strategists
Speaker 18: in each of these states, and you can see in
Speaker 18: their advertisements they're focusing on Ice in New York, they're
Speaker 18: focusing on Trump ally his Maga accolades in Texas. We're
Speaker 18: going to see that play out over and over and
Speaker 18: people in those states don't necessarily know that it's the
Speaker 18: AI industry behind these advertisements. Mailers, texts coming to.
Speaker 5: Their phones, fascinating in Maxeminy vembam must get you back
Speaker 5: from that story and do go read it meanwhile, That
Speaker 5: does it for this.
Speaker 4: Edition of Briting by Tech. What an extraordinary week.
Speaker 3: D Yeah, and in the United States at least a
Speaker 3: holiday weekend for many, recap the sh Show and the
Speaker 3: week on the podcast. You know where to find it,
Speaker 3: all those places online and all of the bloomerverse have
Speaker 3: a great weekend.
Speaker 2: There's the Bloomberg Tech