WEBVTT - US Pulls List of Tech Firms Linked to China’s Military 0:00:00.120 --> 0:00:13.600 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive 0:00:13.640 --> 0:00:17.480 from coast to coast with Caroline Hide in New York 0:00:17.760 --> 0:00:20.920 and Eva though in San Francisco. 0:00:24.440 --> 0:00:26.000 This is Bloomberg Tech coming out. 0:00:26.040 --> 0:00:29.360 The US Defence Department adds Ali Barber by doing Others 0:00:29.600 --> 0:00:31.520 to a list of firms that says are connected to 0:00:31.560 --> 0:00:34.440 the Chinese military, but then pulls the list. 0:00:34.840 --> 0:00:37.080 Plus, we keep beating the earnings drum. 0:00:37.159 --> 0:00:40.479 Ribon, Coinbase, Instacar, Airbnb all out with their results. 0:00:40.479 --> 0:00:41.360 Will break it all down. 0:00:42.240 --> 0:00:45.320 An Anthropic completes a deal to raise thirty billion dollars 0:00:45.400 --> 0:00:49.040 in funding, doubling the valuation of the company to three 0:00:49.159 --> 0:00:50.920 hundred and eighty billion dollars. 0:00:51.320 --> 0:00:54.639 Private market said, public markets, we do it all on 0:00:54.640 --> 0:00:56.880 the show, and we think about the macro data as well. 0:00:56.920 --> 0:00:59.960 When that CPI print comes in much cooler than ext 0:01:00.000 --> 0:01:02.240 affected and it gives life to the bond market, but 0:01:02.280 --> 0:01:04.200 not so much the equity market I'm looking at, then 0:01:04.200 --> 0:01:05.000 that's that one hundred. 0:01:05.240 --> 0:01:06.559 It's actually down on the week. 0:01:06.600 --> 0:01:08.520 Look, we're just inching into the green on the day, 0:01:08.520 --> 0:01:10.280 we're off of our lows. But on the week, and 0:01:10.360 --> 0:01:12.479 it's been turbulent and then some We're going to dig 0:01:12.520 --> 0:01:15.600 into the pressures that we see on software that's continuing. 0:01:15.720 --> 0:01:17.479 We're off by one point three percent on the week. 0:01:17.480 --> 0:01:19.360 On the week, we're off by two point three percent. 0:01:19.360 --> 0:01:21.520 On Bitcoin, we actually steady on the day. 0:01:21.680 --> 0:01:23.000 Ed there's a lot to. 0:01:22.920 --> 0:01:26.039 Be digesting about some of the market signals we're getting. 0:01:26.040 --> 0:01:26.720 What are you looking at? 0:01:27.720 --> 0:01:29.479 Later in the show, we're going to go deep on Rivian. 0:01:29.520 --> 0:01:31.000 You and I are going to talk about what's going 0:01:31.040 --> 0:01:33.840 on with this name. Up twenty percent in the session 0:01:33.880 --> 0:01:36.600 at one point, up twenty eight percent, and on track 0:01:36.640 --> 0:01:38.840 for its best day since it's IPO in November twenty 0:01:38.920 --> 0:01:41.520 twenty one. Honestly, it doesn't even matter what it posted 0:01:41.560 --> 0:01:43.880 in the quarter gone or what it said its financials 0:01:43.920 --> 0:01:46.280 would be for this year. The stock is only trading 0:01:46.560 --> 0:01:49.320 on the idea it's on track for its next generation 0:01:49.520 --> 0:01:52.320 EVDR two and that will go on sale next quarter. 0:01:52.400 --> 0:01:54.640 We'll have a lot more on the earning story. This 0:01:54.720 --> 0:01:57.880 is the big breaking news of the morning. The Pentagon 0:01:58.240 --> 0:02:03.000 added names Ali, barber I, Do and BYD to a 0:02:03.040 --> 0:02:07.960 list of Chinese technology companies that it says are aiding 0:02:08.000 --> 0:02:11.680 the Chinese military, only to then take down or pull 0:02:11.800 --> 0:02:16.400 that list without any explanation. The moment that the headlines 0:02:16.480 --> 0:02:18.880 hit from the list going up, you saw the US 0:02:18.960 --> 0:02:21.959 listed shares of those names drop ten Cent was already 0:02:22.000 --> 0:02:24.639 on the list that had been published earlier in January. 0:02:24.680 --> 0:02:27.640 This is difficult to understand. Let's get to Bloomberg Senior 0:02:27.680 --> 0:02:31.480 Tech editor Mike Shephard. I hope that I explained the 0:02:31.520 --> 0:02:35.320 chronology of events correctly there give us the fuller details. 0:02:35.320 --> 0:02:38.600 And my understanding is that Bloomberg News has also heard 0:02:38.600 --> 0:02:40.880 from the Pentagon, but they didn't have much to say. 0:02:42.080 --> 0:02:43.600 They didn't have much to say at all in the 0:02:43.600 --> 0:02:47.959 way of an explanation about why this move. This list, 0:02:48.080 --> 0:02:50.760 This updated list, which now has one hundred and thirty 0:02:50.840 --> 0:02:54.679 Chinese entities on it, was posted in Age forty five 0:02:54.720 --> 0:02:57.679 this morning, and then shortly after it withdrawn. They said 0:02:57.720 --> 0:03:01.400 they had nothing to announce it the the moment now ed. 0:03:01.840 --> 0:03:06.399 This is something that's become increasingly closely watched by investors 0:03:06.440 --> 0:03:09.280 and by others who are wondering whether Chinese companies may 0:03:09.320 --> 0:03:13.440 be suffering some sort of repercussions from elsewhere in the. 0:03:13.400 --> 0:03:14.680 Government as well. 0:03:14.760 --> 0:03:17.679 The twelve sixty h list, as it's known, is seen 0:03:17.720 --> 0:03:21.160 as a precursor perhaps or bell Weather to further measures 0:03:21.200 --> 0:03:24.200 that the government has taken against Chinese entities. And it's 0:03:24.240 --> 0:03:27.480 also closely watched in particular because we see the addition 0:03:27.639 --> 0:03:31.160 in this latest iteration that has since been withdrawn of 0:03:31.200 --> 0:03:34.480 Ali Baba and Baidu, and those companies are making inroads 0:03:34.480 --> 0:03:37.680 and artificial intelligence, and this is a central point of 0:03:37.720 --> 0:03:41.640 contention and competition between the US and China right now. 0:03:41.760 --> 0:03:43.960 It's the central point of contention when it comes to 0:03:44.000 --> 0:03:47.920 open Ai. We understand through a document that's been seen 0:03:48.000 --> 0:03:51.560 that was sent by Open Ai to Capitol Hill all 0:03:51.600 --> 0:03:54.520 regarding their warriors, what Deep Sink's been doing with their technology. 0:03:55.840 --> 0:03:59.880 Well, that's right, Karen. This comes amid so much scrutiny 0:04:00.080 --> 0:04:04.240 on China and its advances in artificial intelligence, and open 0:04:04.280 --> 0:04:08.040 Ai has warned US lawmakers that it believes Deep Seek 0:04:08.080 --> 0:04:12.880 has been using improper methods to advance its models, especially 0:04:12.920 --> 0:04:15.640 the R one breakthrough that we saw last year and 0:04:15.720 --> 0:04:18.279 heard so much about. What they are saying, in essence 0:04:18.440 --> 0:04:23.400 is that deep Seek has been using frontier models from 0:04:23.400 --> 0:04:27.719 the US and elsewhere and copying and taking those results 0:04:27.720 --> 0:04:32.640 and then improperly through a method called distillation, using it 0:04:32.720 --> 0:04:35.920 to advance its own models and train its models, and 0:04:36.360 --> 0:04:38.640 open I went further to say that it has been 0:04:38.720 --> 0:04:42.279 raising these concerns, and we even scooped last year that 0:04:42.320 --> 0:04:45.880 Microsoft and open Ai, who are partners in the open 0:04:45.880 --> 0:04:49.600 Ai venture, had looked into the extent of distillation by 0:04:49.600 --> 0:04:53.440 deep Seek and other Chinese ventures. Open Ai since in 0:04:53.520 --> 0:04:56.679 this memo to Congress, is saying that it has tried 0:04:56.760 --> 0:05:00.359 countermeasures against deep Seek, but deep Seek is c to 0:05:00.520 --> 0:05:03.799 thwart those. It also noted what it called a national 0:05:03.839 --> 0:05:08.080 security risk, and that is that with Deepseek searches under 0:05:08.120 --> 0:05:10.600 topics that are sensitive to the Chinese government and then 0:05:10.640 --> 0:05:14.880 include scannerman Square and Taiwan Independence for example, those are 0:05:15.040 --> 0:05:17.320 screened out and you do not get the answers that 0:05:17.360 --> 0:05:19.920 you might through open ai and other platforms. 0:05:20.320 --> 0:05:23.039 Mike Sheppin on all the national security news, we so 0:05:23.120 --> 0:05:23.760 appreciate it. 0:05:23.800 --> 0:05:26.000 Thank you. Look, let's talk about open ai and. 0:05:25.920 --> 0:05:29.440 This rival Anthropic because on Topics just finalized a deal 0:05:29.480 --> 0:05:32.240 to raise thirty billion dollars, doubling the valuation of the 0:05:32.240 --> 0:05:34.880 company to three hundred and eighty billion from All Blue 0:05:34.920 --> 0:05:37.640 Measuring Gafari joins us. Now what's interesting is some of 0:05:37.680 --> 0:05:41.159 the same vcs that back open Ai are backing Anthropic, 0:05:41.440 --> 0:05:43.960 but talk to us about the Garganshuan valuation hit. 0:05:45.760 --> 0:05:49.720 That's right, So this was even more money than Anthropic, 0:05:49.800 --> 0:05:53.840 and we were initially expecting. The round went from ten 0:05:53.880 --> 0:05:56.800 billion in initial talks to a thirty billion total, so 0:05:56.920 --> 0:06:00.200 we have a big bottom number. And you know, we 0:06:00.240 --> 0:06:02.520 are seeing what we you know, have have kind of 0:06:02.680 --> 0:06:06.159 cloquially referred to as double dipping, or we're seeing investors 0:06:06.880 --> 0:06:10.279 that maybe used to only focus on one big player 0:06:10.360 --> 0:06:13.239 in the AI race actually start to hedge their bets 0:06:13.640 --> 0:06:17.200 and also invest in competitors such as Anthropic, Open Ai 0:06:17.480 --> 0:06:21.440 or Xai open Ai. And that's that's a newer phenomenon 0:06:21.480 --> 0:06:21.920 in the valley. 0:06:21.960 --> 0:06:25.240 I would say, we also surely now have some confirmation 0:06:25.360 --> 0:06:27.080 of how Anthropics business has been going. 0:06:27.160 --> 0:06:27.360 Right. 0:06:27.400 --> 0:06:30.440 You and I've talked a lot about how Anthropics focus 0:06:30.520 --> 0:06:34.000 initially was on the enterprise. Tell me what the annual 0:06:34.040 --> 0:06:36.640 revenue run rate numbers are that we now have, and 0:06:37.000 --> 0:06:39.039 I guess you know the reason we care so much 0:06:39.120 --> 0:06:41.800 about this round is will this company go public or not? 0:06:44.160 --> 0:06:48.039 That's right, We're seeing run rate go up just very 0:06:48.120 --> 0:06:52.680 quickly from the last report of nine billion to thirteen. 0:06:53.400 --> 0:06:56.839 We're also seeing the cloud code run rate in particular 0:06:56.880 --> 0:06:59.159 go up, and now claud code is their coding agent 0:06:59.200 --> 0:07:01.919 that's been very suc that's for so, I think that 0:07:02.000 --> 0:07:04.479 this is showing that Anthropic even though it doesn't have 0:07:04.560 --> 0:07:07.360 the kind of consumer reach that open ai does, which 0:07:07.360 --> 0:07:10.960 sort of has the Kleenex phenomenon of chatchipt being the 0:07:10.960 --> 0:07:14.040 brand everyone knows in the consumer space. But that doesn't 0:07:14.080 --> 0:07:16.240 mean that anthropics should be counted out in terms of 0:07:16.280 --> 0:07:19.480 being able to achieve some very high revenue projections and 0:07:19.600 --> 0:07:22.320 very strong growth, which of course investors like to see. 0:07:22.920 --> 0:07:26.320 Bloomberg sharing Gafari brilliant reporting. Thank you very much. We 0:07:26.360 --> 0:07:29.560 have other funding news. Shield Ai, which makes AI powered 0:07:29.640 --> 0:07:33.440 software to help run autonomous vehicles and other hardware like drones, 0:07:33.800 --> 0:07:35.920 is in talks to raise as much as a billion dollars. 0:07:35.960 --> 0:07:39.320 Sources say the new round would double its valuation in 0:07:39.400 --> 0:07:41.800 less than a year. It up to twelve billion dollars, 0:07:41.840 --> 0:07:43.640 which include the capital raised. 0:07:43.920 --> 0:07:47.200 CARA coming up ed, we'll discuss the wider impact of 0:07:47.240 --> 0:07:52.360 what's been termed the AI scare trade. The sericond Clear Capitals, 0:07:52.400 --> 0:08:11.680 Blobotech Logistic Stocks became the latest victims of the so 0:08:11.800 --> 0:08:13.920 called AI scare trade. 0:08:13.600 --> 0:08:17.200 After a Karaoke turned to AHI company. Yes, I said 0:08:17.200 --> 0:08:19.080 that right. It's a semi. 0:08:18.920 --> 0:08:22.280 Cab platform and enables customers to scale freight volumes by 0:08:22.320 --> 0:08:24.200 three hundred percent to four hundred percent. Shares of H 0:08:24.280 --> 0:08:27.360 Robinson tumbled fifteen percent, adding to a growing mister companies 0:08:27.360 --> 0:08:31.880 where AI fears a reshaping investor sentiment across sectors. Nomaga Equities, 0:08:31.920 --> 0:08:34.640 Reporter Com, and Ryanikey has been across the latest and 0:08:34.720 --> 0:08:38.720 I had to double triple check that this particular company 0:08:38.840 --> 0:08:44.880 karaoke turned autonomous vehicle business. It's actually just six million 0:08:44.920 --> 0:08:48.520 dollars in valuation, but it rocked market caps across the 0:08:48.720 --> 0:08:49.480 entire industry. 0:08:50.840 --> 0:08:52.120 Yeah, it's teeny tiny. 0:08:52.160 --> 0:08:54.600 And actually the CEO told me yesterday that he had 0:08:54.640 --> 0:08:57.200 never imagined, sort of in his wildest dreams, that they 0:08:57.200 --> 0:08:59.080 would have a day like they did yesterday. I mean, 0:08:59.120 --> 0:09:02.000 their stack was at more than twenty percent. So we've 0:09:02.040 --> 0:09:05.520 really just seen sort of the fear of software disruption 0:09:05.720 --> 0:09:09.880 from AI trickle across the broader market into these little 0:09:10.200 --> 0:09:12.920 sectors that you wouldn't think were initially tied to the 0:09:12.960 --> 0:09:15.760 AI trade. And some of the fear in software disruption 0:09:15.840 --> 0:09:18.840 you know, may be founded, but it seems like there 0:09:18.840 --> 0:09:21.480 are a lot of these knee jerk reactions and investors 0:09:21.480 --> 0:09:24.240 are sort of turning and saying, you know, what's next? 0:09:24.280 --> 0:09:26.960 How can I even protect from downside like this? Because 0:09:27.160 --> 0:09:30.720 you know, just the smallest little headline or thing coming 0:09:30.760 --> 0:09:33.600 out can send you know, all of these stocks off 0:09:33.600 --> 0:09:34.000 a cliff. 0:09:35.040 --> 0:09:37.600 Caroline was on this so quickly yesterday. But I think 0:09:37.600 --> 0:09:40.959 there's some value in giving the Bloomberg Tech audience and 0:09:41.080 --> 0:09:43.320 understanding a bit what it's like, right, so that headlines 0:09:43.320 --> 0:09:45.920 are going on the terminal because there's certain stock moves, 0:09:45.960 --> 0:09:51.000 there's volatility, you have like industrials, transport logistics teams, equities teams, 0:09:51.000 --> 0:09:53.079 Like what is happening? You know, like all of these 0:09:53.080 --> 0:09:56.719 stocks are falling. Just summarized that that session, we just 0:09:56.760 --> 0:09:59.679 showed a great chart, but it was severe, right, and 0:09:59.720 --> 0:10:02.840 then we still continue to see ongoing pressure and software 0:10:02.880 --> 0:10:04.640 generally from the broader story. 0:10:06.040 --> 0:10:10.400 Yeah, finding that the trip wire can be really difficult. Actually, 0:10:10.440 --> 0:10:13.760 I mean we've seen so many things fall on pretty 0:10:13.800 --> 0:10:16.079 small things or even you know, like in the instance 0:10:16.080 --> 0:10:19.120 of real estate stocks past week, there wasn't a super 0:10:19.160 --> 0:10:23.320 immediately clear catalyst that drove selling in that sector. So 0:10:23.720 --> 0:10:25.600 it is definitely, you know, a team effort. You know, 0:10:25.640 --> 0:10:28.439 I'm speaking to investors as much as possible to see 0:10:28.480 --> 0:10:31.440 sar of what they're thinking, how they're reacting to these 0:10:31.480 --> 0:10:34.839 sort of like sparked sell offs. And yeah, it's been 0:10:34.880 --> 0:10:37.880 a full collaboration, right because we just don't know what's next. 0:10:37.920 --> 0:10:40.280 There are so many different parts of the market that 0:10:40.440 --> 0:10:42.960 could see potential disruption. 0:10:42.640 --> 0:10:43.760 Here and where. 0:10:43.840 --> 0:10:47.160 You know, these fears could spark another decline in shares. 0:10:47.360 --> 0:10:49.120 While you were sort of calling up the CEO of 0:10:49.160 --> 0:10:52.880 Algorithm that was affecting logistics, we understand we were speaking 0:10:52.880 --> 0:10:56.520 to the CEO of Altruist, which is the wealth management 0:10:56.720 --> 0:11:01.160 start up that discombobulated wealth management market more broadly, and 0:11:01.200 --> 0:11:03.720 he too had this sort of David Goliath moment common 0:11:04.160 --> 0:11:06.280 But what's so interesting is ED and I speak a 0:11:06.280 --> 0:11:09.439 lot to the VC back companies that are developing the 0:11:09.520 --> 0:11:14.439 latest autonomous vehicles and trucking and bringing up these new platforms. 0:11:15.200 --> 0:11:19.080 How discerning our investors starting to become to a headline 0:11:19.200 --> 0:11:22.680 risk or actually what is going to upend the industries 0:11:22.720 --> 0:11:25.240 they put money into, Because is really a seven million 0:11:25.280 --> 0:11:27.320 dollar algorithm company going to do that. 0:11:28.840 --> 0:11:30.720 You know, I think we've seen actually really a lack 0:11:30.760 --> 0:11:33.880 of discernment. Right, Everything is a very knee jerk reaction. 0:11:34.040 --> 0:11:34.199 Now. 0:11:34.240 --> 0:11:36.760 I keep hearing people say over and over something along 0:11:36.800 --> 0:11:40.000 the lines of, you know, sell first, ask questions later. 0:11:40.080 --> 0:11:42.200 And I think, actually, what I'm hearing from, you know, 0:11:42.559 --> 0:11:45.560 fund managers and people on the street is they're looking 0:11:45.679 --> 0:11:49.080 or trying to impress sort of maybe more discernment on investors, 0:11:50.360 --> 0:11:53.600 so they're not sort of making these very like snap decisions. 0:11:54.840 --> 0:11:58.640 We'll have to keep seeing what happens. It's definitely been 0:11:59.000 --> 0:12:00.679 you know, a while a few days. 0:12:01.679 --> 0:12:04.160 Bloomer's Carmen Rhiniky, You've been brilliant for a number of 0:12:04.200 --> 0:12:06.679 weeks in a row trying to explain what's going on 0:12:06.960 --> 0:12:09.599 the AI scare. It sent market caps across stocks in 0:12:09.679 --> 0:12:12.240 multiple industries humbling. We've just explained that, but all that 0:12:12.280 --> 0:12:16.560 disruption hasn't hit top lines. That's notable not just for 0:12:16.600 --> 0:12:20.360 public company shareholders, but for private market investors who are 0:12:20.360 --> 0:12:23.760 trying to find their next win. Surrocance, managing director of 0:12:23.760 --> 0:12:27.400 Clear Capital, a generalist VC firm multiple software companies in 0:12:27.440 --> 0:12:28.200 its portfolio. 0:12:28.440 --> 0:12:30.400 Sarah, that's your job, right, like you. 0:12:30.360 --> 0:12:32.800 Know, in the case study of a software name with 0:12:32.840 --> 0:12:36.520 a six million dollar valuation that spooked an entire logistics 0:12:36.559 --> 0:12:40.400 sector yesterday, you want to be finding those names through 0:12:40.440 --> 0:12:43.600 that lens. What's your interpretation of what we've seen this 0:12:43.640 --> 0:12:46.839 week across multiple sectors where software is coming for it. 0:12:47.679 --> 0:12:50.080 Yeah, I want to find companies that are going to 0:12:50.200 --> 0:12:54.079 disrupt markets because they have a great product, not because 0:12:54.120 --> 0:12:55.560 they have great Twitter fingers. 0:12:55.800 --> 0:12:57.119 And so I think part. 0:12:56.840 --> 0:13:00.000 Of what we're seeing right now that makes investors nervous 0:13:00.080 --> 0:13:03.760 on the startup side private investors is that we want 0:13:03.800 --> 0:13:06.960 to make sure that these companies, the CEOs who are 0:13:06.960 --> 0:13:10.120 going viral with these sort of hey guess what, everything's 0:13:10.160 --> 0:13:14.319 falling apart, that they actually have an interesting solution, because 0:13:14.360 --> 0:13:19.040 otherwise they're just sort of a megaphone, not necessarily a unicorn. 0:13:19.679 --> 0:13:21.000 I said software coming for it. 0:13:21.040 --> 0:13:24.240 I meant AI coming for it, even coming for existing 0:13:24.240 --> 0:13:29.360 software platforms. Is there real risk to establish industries here imminently. 0:13:30.840 --> 0:13:31.040 Yeah. 0:13:31.080 --> 0:13:33.479 I think that there's risk long term, but the reality 0:13:33.679 --> 0:13:36.160 is that a lot of that risk is going to 0:13:36.200 --> 0:13:40.359 be sort of taken up by companies in those industries. 0:13:40.400 --> 0:13:43.920 So it's not like logistics is ignoring what's happening right 0:13:44.000 --> 0:13:46.080 When you look at some of the bigger logistics players, 0:13:46.120 --> 0:13:48.880 you have companies like the Nordics who have been consistently 0:13:48.920 --> 0:13:52.040 sort of ahead on software, investing on their pension arm 0:13:52.240 --> 0:13:55.040 So they're obviously, I'm sure, having those kinds of conversations, 0:13:55.080 --> 0:13:58.560 and so I think it's a little bit flipant to 0:13:58.640 --> 0:14:01.360 think that you're going to end in a situation where 0:14:01.920 --> 0:14:04.680 logistics didn't see this coming. Of course they know, and 0:14:04.720 --> 0:14:07.400 there are often placing bets into startups or building and 0:14:07.480 --> 0:14:11.360 buying technology in house that can help them sort of 0:14:11.400 --> 0:14:13.200 be a part of that change, kind of the same 0:14:13.240 --> 0:14:16.000 way in oil and gas we've seen them often also 0:14:16.080 --> 0:14:19.360 get some upside as it transitions to a cleaner energy. 0:14:20.360 --> 0:14:22.880 It makes a great point, and I'll chat that you know, 0:14:22.920 --> 0:14:24.600 you would have thought Flexport would be the company that 0:14:24.640 --> 0:14:28.840 would be uphending the future of transportation and logistics AI. 0:14:29.200 --> 0:14:31.600 From your perspective, how are you at this moment seeing 0:14:31.600 --> 0:14:35.480 the valuations in startups reflecting this FOMO or this fear 0:14:35.520 --> 0:14:38.080 fact that you see in the public markets. 0:14:37.880 --> 0:14:41.160 There's a huge barbell right now in valuations for startups, 0:14:41.160 --> 0:14:43.360 and what you tend to see is there a handful 0:14:43.400 --> 0:14:47.440 of companies mostly in AI, like Anthropics, Giant Round, like 0:14:47.520 --> 0:14:51.000 some of what Elon's doing with his various country companies 0:14:51.880 --> 0:14:55.240 like Open Ai, where those private names are going up 0:14:55.240 --> 0:14:57.400 and up and up, and we all have no idea 0:14:57.400 --> 0:14:58.960 how they're going to make that money back in an 0:14:59.000 --> 0:15:02.880 IPO or ever be profitable. And then on the other hand, 0:15:03.280 --> 0:15:06.880 you have startups that aren't promising the world, and we're 0:15:06.880 --> 0:15:10.280 seeing a lot less velocity in those startup fundraising rounds, 0:15:10.480 --> 0:15:13.240 not because there's anything wrong with those companies, but just 0:15:13.280 --> 0:15:16.160 because people are worried about, Hey, if all of the 0:15:16.240 --> 0:15:19.680 capital intensity is going over there, do I really want 0:15:19.720 --> 0:15:22.880 to be in these sort of solid, interesting, slower growing 0:15:22.920 --> 0:15:26.400 companies that might actually end up being profitable but don't 0:15:26.400 --> 0:15:29.000 feel like they're going to be multi trillion dollar IPOs. 0:15:29.880 --> 0:15:32.400 Although any solid SaaS companies. 0:15:31.960 --> 0:15:34.640 Out there right now, I think there are a lot 0:15:34.720 --> 0:15:37.200 of solid SaaS companies. I mean, even in the public markets, 0:15:37.240 --> 0:15:39.240 you look at names like Salesforce and you have to 0:15:39.320 --> 0:15:42.120 kind of ask, why do people, even though the valuation 0:15:42.240 --> 0:15:44.400 is a bit high, why do people think that this 0:15:44.520 --> 0:15:47.440 is going to go away overnight? When when they look 0:15:47.440 --> 0:15:49.720 inside of their own companies, they're not in a rush 0:15:49.960 --> 0:15:53.040 to cancel all their contracts and just yolo everything into 0:15:53.080 --> 0:15:56.600 chat GPT. But for some reason, there's the thought that 0:15:56.600 --> 0:15:59.880 that is going to happen overnight in the larger market 0:16:00.080 --> 0:16:02.680 and all of these companies are going to be valueless. 0:16:03.360 --> 0:16:06.320 Sarahkunst looking at a portfolio right now. We appreciate it, 0:16:06.520 --> 0:16:09.720 Managing director of Cleo Capital. Coming up, we're going to 0:16:09.760 --> 0:16:13.600 speak with a software company, Twilio CEO Cozmership Chandlers joining us. 0:16:13.640 --> 0:16:16.080 The latest earnings they were good. As a Bloomberg Tech. 0:16:29.880 --> 0:16:31.840 Shares a Twilio holding on too, Gaines were up two 0:16:31.920 --> 0:16:34.920 point four percent, the company posting solid fourth quarter earnings 0:16:34.960 --> 0:16:38.200 results and guidance, driven in many ways by gains and 0:16:38.280 --> 0:16:42.320 voice and messaging. Company also issued its revenue forecast of 0:16:42.360 --> 0:16:46.000 about fourteen percent that top DNAs estimates. Twilio CEO cozemer 0:16:46.080 --> 0:16:50.280 Hip Chandler is with US and Kazima. What's driving the 0:16:50.360 --> 0:16:54.400 adoption You talk about becoming sort of a foundational infrastructure layer. 0:16:54.400 --> 0:16:55.080 What does that look like? 0:16:56.400 --> 0:16:58.240 Yeah, I mean I think for us, what it means 0:16:58.360 --> 0:17:02.040 is is that companies increased They've always been using us 0:17:02.080 --> 0:17:06.040 for communications and for data, but increasingly they're pointing their 0:17:06.080 --> 0:17:08.879 workloads towards us. And I'm talking about AI companies as 0:17:08.880 --> 0:17:14.320 well as enterprises as infrastructure that allows them to connect 0:17:14.760 --> 0:17:19.320 the llms, the data warehouses, the agents that they're now 0:17:19.359 --> 0:17:22.720 starting to build with, and Telco's put all of those 0:17:22.720 --> 0:17:25.840 different capabilities together under one platform. 0:17:25.880 --> 0:17:27.800 And that's I think what uniquely positions. 0:17:27.400 --> 0:17:32.480 Twilio uniquely positions you against this so called SaaS apocalypse 0:17:32.560 --> 0:17:35.520 how much because they imagine you get questions on an 0:17:35.520 --> 0:17:40.400 ongoing basis from investors saying how resilient is the way 0:17:40.400 --> 0:17:41.600 in which you charge customers. 0:17:43.040 --> 0:17:46.479 Yeah, we don't get as many questions about that that topic. Actually, 0:17:46.520 --> 0:17:48.600 I mean, I think the reality is is that, you know, 0:17:48.600 --> 0:17:51.199 we've always been sort of an infrastructure provider, and so 0:17:51.840 --> 0:17:54.560 there's some level of insulation in that way. 0:17:54.600 --> 0:17:56.600 Like what we do is like very unique. 0:17:56.880 --> 0:17:59.520 I think the other dynamic that is at play here 0:17:59.640 --> 0:18:03.479 is that our pricing model has always been usage based 0:18:03.520 --> 0:18:06.080 and so you know, if you're worried about what the 0:18:06.119 --> 0:18:09.680 terminal value is associated with seat licenses and stuff like that, 0:18:09.760 --> 0:18:11.120 like that's not something that we. 0:18:11.040 --> 0:18:12.120 Think about day to day. 0:18:12.240 --> 0:18:14.760 Instead, we think about how do we combine all of 0:18:14.800 --> 0:18:17.159 these different elements that are coming to the fore to 0:18:17.240 --> 0:18:18.680 create a great customer experience. 0:18:18.720 --> 0:18:19.240 On the other. 0:18:19.119 --> 0:18:22.480 Side, it's great to have you back on the show, 0:18:22.920 --> 0:18:24.840 going back to basics with Twilio. I think it really 0:18:24.880 --> 0:18:28.840 helps the audience understand right, Twilio does customer engagement, and 0:18:28.880 --> 0:18:31.439 on the show every week Caroline and I get told 0:18:31.480 --> 0:18:36.119 that the area that is most imminently ripe for improvement 0:18:37.240 --> 0:18:41.560 is call center essentially that kind of domain. The analysts 0:18:41.560 --> 0:18:43.560 are looking at the results and the outlook and saying 0:18:43.600 --> 0:18:45.679 that you might be being a bit conservative and a 0:18:45.680 --> 0:18:49.240 bit muted. They want to see more evidence that voice AI, 0:18:49.640 --> 0:18:52.480 as an example, is really taking off. What do you 0:18:52.520 --> 0:18:55.159 see on the ground, so to speak, Osmer. 0:18:55.920 --> 0:18:57.720 I mean, you know, look, we want to see more too. 0:18:58.040 --> 0:19:00.320 I mean, I think we feel pretty good about the look. 0:19:00.359 --> 0:19:02.960 We feel great about the way that twenty twenty six 0:19:03.040 --> 0:19:05.639 is shaping up so far, and we're pretty positive on 0:19:05.680 --> 0:19:08.600 it all. I think as it relates to voice AI specifically, 0:19:08.640 --> 0:19:10.320 since that's kind of where you started, I mean, I 0:19:10.359 --> 0:19:14.080 think you're seeing tremendous velocity from a number of different companies. 0:19:14.560 --> 0:19:16.639 You know, we called out a number of them in 0:19:16.680 --> 0:19:19.480 our most recent earnings. You know, I'll just take an 0:19:19.520 --> 0:19:22.960 example like Sierra, like they've really captured the imagination right 0:19:23.000 --> 0:19:26.520 now in this moment. We're lucky to have them utilizing 0:19:26.640 --> 0:19:29.280 our infrastructure to be able to grow with a customer 0:19:29.480 --> 0:19:33.080 like that and add different kinds of voice capabilities to 0:19:33.880 --> 0:19:36.840 the speech to text and text to speech capabilities that 0:19:36.880 --> 0:19:40.000 they offer. So I think that's really been exciting and 0:19:40.040 --> 0:19:42.920 interesting for us. And then I think looking forward there's 0:19:42.920 --> 0:19:45.440 a number of other growth vectors that we're looking at. 0:19:45.840 --> 0:19:51.520 This idea of having persistence, memory, context, being able to 0:19:51.560 --> 0:19:55.000 combine all of that also with agent building capabilities. I 0:19:55.000 --> 0:19:58.400 think that's what creates durable tailwind for our company. 0:20:00.160 --> 0:20:02.439 The usage based model is you just described it. It's 0:20:02.480 --> 0:20:05.840 a great advantage for you, right, And I think again, 0:20:06.160 --> 0:20:08.879 just going on the reaction to earnings, some of the 0:20:08.920 --> 0:20:10.840 concern is that if the outlook for the rest of 0:20:10.880 --> 0:20:14.560 the year is conservative, how much is that because you 0:20:14.600 --> 0:20:18.760 don't have visibility that far afield on a usage based 0:20:19.080 --> 0:20:20.200 model from your customers. 0:20:21.520 --> 0:20:22.919 Yeah, I think it's less about that. 0:20:23.040 --> 0:20:25.240 I mean, I just think the dynamics of a usage 0:20:25.280 --> 0:20:27.600 based business maybe cause us to be a little bit 0:20:27.600 --> 0:20:30.720 more conservative about the way that we forecast and the 0:20:30.760 --> 0:20:32.600 way that we kind of call it. I wouldn't take 0:20:32.640 --> 0:20:36.240 that as signal that there's any dampening of optimism in 0:20:36.320 --> 0:20:37.159 terms of our business. 0:20:37.320 --> 0:20:39.800 Quite the contrary. I mean, the signals we're. 0:20:39.600 --> 0:20:42.480 Hearing from customers are that they want to go all 0:20:42.520 --> 0:20:45.760 in with Tulio again, not just communications and data, but 0:20:45.840 --> 0:20:49.560 to build their entire AI stack around a lot of 0:20:49.560 --> 0:20:52.320 our infrastructure, including a number of other companies obviously as 0:20:52.359 --> 0:20:55.560 well who will end up partnering with. But I think 0:20:55.600 --> 0:21:00.680 this usage based pricing model like ideally positions us because 0:21:00.840 --> 0:21:04.720 it matches a customer's revenue events with our revenue events, 0:21:04.760 --> 0:21:07.880 and so our incentives are very very tightly aligned. 0:21:08.240 --> 0:21:11.320 Because I know there's a lot of fear, there's a 0:21:11.320 --> 0:21:14.000 lot of anxiety you're not just in investors, but in 0:21:14.040 --> 0:21:16.240 people writ large around AI at the moment, How are 0:21:16.280 --> 0:21:19.040