Speaker 1: I'm Caroline hired Bloomberg's World headquarters in New York, and
Speaker 1: I'm Lovo in San Francisco. This is Bloomberg Technology risk
Speaker 1: On in the markets AI A driver and no surprise
Speaker 1: Caroline from Power No surprise markets risk on. But having
Speaker 1: noticed all these chatbots, from Bernie to Being to of
Speaker 1: course barred over at Google, they're all named for a
Speaker 1: B we get into that in a moment. But let's
Speaker 1: get into the race first and foremost, the AI race.
Speaker 1: It is on end from Microsoft to Google to Baidu.
Speaker 1: We've been in the latest global generative AI developments and
Speaker 1: speak to a kid executive from Microsoft on its big
Speaker 1: being announcement and honing in on the chip industry arm
Speaker 1: posting increase in revenue in its latest quarter. We speak
Speaker 1: with the CEO of the company as it prepares what
Speaker 1: parents soft Bank hopes will be the largest ever I
Speaker 1: p O for a chip maker, plus zoom slashing of
Speaker 1: its workforce while metal ones managers to get back to
Speaker 1: making things or leave all that and so much more
Speaker 1: coming up at first. Soft Bank get posted its earnings,
Speaker 1: losing nearly six billion dollars in the most recent quarter,
Speaker 1: failed to start up bets and its Vision Fund segment.
Speaker 1: But the silver lining the conglomerate has in its arsenal,
Speaker 1: it's its ownership of ARM. The UK based company's chip
Speaker 1: designs and its technology are present throughout consumer electronics. Just
Speaker 1: think the chips that are powering almost every single smartphone
Speaker 1: on the planet, or the designs come from ARM And
Speaker 1: just reported a twenty percent increase in revenue for the
Speaker 1: latest quarter. It's preparing, we understand, for a highly anticipated
Speaker 1: I p O this year. That's why we are so
Speaker 1: pleased to welcome the CEO. Ren A House is joy
Speaker 1: to have you with us. Just talk to us about
Speaker 1: this twenty eight percent increase in revenue because we've seen
Speaker 1: overall the chip sector be somewhat decimated, the demand supply
Speaker 1: flip reversing, and yet you manage to be pushing higher
Speaker 1: when your clients are four. What's happening. We're very happy
Speaker 1: with the quarter that we've just had. Our revenue was up.
Speaker 1: We saw an increase of our licensing business and twelve
Speaker 1: percent and royalties. But more importantly, we've seen a significant
Speaker 1: diversification in our business. Caroline are business around the cloud
Speaker 1: has been up double double digits. Our business and automotive
Speaker 1: probably triple digits. Uh. This diversification strategy is not new.
Speaker 1: We started a number of years ago, but we're just
Speaker 1: now starting to see the fruits of that labor as
Speaker 1: the power efficiency at which ARM is known for is
Speaker 1: stinding its way into the data center and all evs.
Speaker 1: Can you give us some targets around the focus on
Speaker 1: data center's automotive pecs rather than just a smartphone sector.
Speaker 1: You know, these areas are places where the growth has
Speaker 1: been very significant in the last number of years, and
Speaker 1: we made a very conscious decision to focus on these
Speaker 1: new markets, particularly with new products are Neo verse flying
Speaker 1: for servers, adding functional safety to our automotive products, and
Speaker 1: as a result, we've seen a huge benefit from that.
Speaker 1: Every major cloud provider now has ARM instances in the
Speaker 1: cloud aws forty eight out of their top fifty customers
Speaker 1: are able to use ARM and electronic vehicles. We're seeing
Speaker 1: companies such as st Renaissance, Mobile, I and Video all
Speaker 1: shifting silicon into automotive Renne, good afternoon to you. Look,
Speaker 1: as Caroline said, you bucked the trend. I want to
Speaker 1: dig into this idea of how you continue to grow
Speaker 1: when your customers don't is this an issue of lag
Speaker 1: that what the rest of the chip sector is going
Speaker 1: through you are not yet experiencing, but will experience later
Speaker 1: on in the year. We're no different than the rest
Speaker 1: of the industry. We certainly feel the effects of the
Speaker 1: slowdown in certain markets, but we are buffered to some extent.
Speaker 1: As I said, we've seen significant growth by gaining market
Speaker 1: share in the cloud, gaining market share in automotive, in smartphones,
Speaker 1: where it's been well documented there's been a slowdown of
Speaker 1: that industry, we've actually seen some very good results, and
Speaker 1: that's been due to kind of two main factors. One
Speaker 1: is our version nine architecture, which carries a higher royalty rate,
Speaker 1: which needs more value for us. But also, more importantly,
Speaker 1: we're just seeing more technology inside these smartphones. More processors
Speaker 1: that find their ways into all different areas of the
Speaker 1: application space, means more CPUs inside the smartphone, which again
Speaker 1: means more royalties for us. So we've been able to
Speaker 1: be buffered to some extent in that space and seeing
Speaker 1: growth really across all our markets. Okay, how confident are
Speaker 1: you that those outliers of performance that you have just
Speaker 1: flags can continue throughout calendar twenty three? You know who
Speaker 1: to be really competent these days in terms of predicting
Speaker 1: where the market is going to go at that we're
Speaker 1: very confident in the long term secular trends that are
Speaker 1: good for ARM and that is number one, more compute
Speaker 1: and number two that is more power efficient compute. Again,
Speaker 1: when you look at the data center, when you look
Speaker 1: at automotive, these are areas that really need a high
Speaker 1: degree of compute, They need a high degree of power efficiency.
Speaker 1: You know, another number that really surprised folks last quarter
Speaker 1: was a record number of shipments by the ARMED partners.
Speaker 1: Eight billion ships that were shipped by our partners, and
Speaker 1: that feeds a cycle of more and more people who
Speaker 1: are developing software on those eight billion ships, which feeds
Speaker 1: into more demand. So I think the quarter to quarter
Speaker 1: of proturbations, you're always going to see those relative to
Speaker 1: what's going on with inventory and such. But we are
Speaker 1: very confident that the long term secular trends that we're
Speaker 1: seeing in the industry are very good for us. Someone
Speaker 1: else is confident around you on its soft bank, the
Speaker 1: confident that the I p O will be done by
Speaker 1: this year. Are you doing a jewel approaches in London?
Speaker 1: New York. Do you have a time frame for US?
Speaker 1: I can say that we are fully committed to an
Speaker 1: I p O in There has been a lot of
Speaker 1: planning underway already on this. We've been doing a lot
Speaker 1: of work regarding location, listening venue. I can't talk about that.
Speaker 1: Noticisions have been made there yet. What needs to be
Speaker 1: cleared up? Tease crossed, eyes dotted when it comes to
Speaker 1: a relationship, for example, with Qualcom ahead of the initial
Speaker 1: public offering. Of course, there's been dispute there one of
Speaker 1: your key clients. How is that progressing? You know, I
Speaker 1: can't comment on the litigation there. Carolina had to lead
Speaker 1: it up to our legal team. You know. I can
Speaker 1: say though that we are very competent in the case
Speaker 1: and we think the court will ultimately agree with our position. Ready,
Speaker 1: I want to talk about China a little bit. You know,
Speaker 1: ARM is all about the underlying technology, the intellectual property
Speaker 1: chip designs. How impacted are you by US and Allied
Speaker 1: efforts to cut China off to access to the latest
Speaker 1: in chip technology? Like any other company, we comply with
Speaker 1: whatever the US government comes down with visa the export controls,
Speaker 1: because we actually don't make anything physical that is what
Speaker 1: we deliver as intellectual property. I either the license rates
Speaker 1: to build a product with our designs were now so
Speaker 1: directly impacted by some of the recent rulings which really
Speaker 1: impact more people who are actually building the chips, either
Speaker 1: chip companies or or fab equipment makers or the fabs themselves.
Speaker 1: So we have some level of indirect impact, and we
Speaker 1: comply whenever there's something that we need to comply with
Speaker 1: these a lat of course, but given where we should
Speaker 1: in the value chain, not so directly impacted some of
Speaker 1: the other companies might be. As we discussed, your technology
Speaker 1: is present through so much that goes into consumer electronics.
Speaker 1: Your designs are sort of integral to the chips are
Speaker 1: going smartphones. But the hot topic the area in vogue
Speaker 1: is artificial intelligence. Is ARM competitive in that field in
Speaker 1: terms of the chips that it's designing, and I know
Speaker 1: that you work closely with some big tech names that
Speaker 1: are doing more in house chips in this area. Yeah,
Speaker 1: I'd like to say we're far more than competitive. You know,
Speaker 1: there's a lot of AI that runs on ARM already.
Speaker 1: When you think about inference at the edge and any
Speaker 1: kind of artificial intelligence that's being run there that's all
Speaker 1: being running armed. They're being running armed CPUs. Uh. There's
Speaker 1: been a lot of buzz you know, in the industry
Speaker 1: and certainly even today regarding generative AI and chat GPT
Speaker 1: and such. That's gonna mean even more demand for armed technology.
Speaker 1: You know, when you look at the trade offs between
Speaker 1: the workloads that run on the CPU and the workloads
Speaker 1: that run on accelerators, there's room for some of this
Speaker 1: acceleration to take place in both areas. I think the
Speaker 1: area where we're going to really perform well in this
Speaker 1: space again, it's around power efficiency. These new AI algorithms
Speaker 1: are incredibly compute intensive, and in a world where we
Speaker 1: just don't have that much energy to throw with the problem,
Speaker 1: having energy efficient processors to assist and offload is going
Speaker 1: to be critically important. Rene haasom CEO. We look forward
Speaker 1: to that i p O that Jill committed to at
Speaker 1: some point this year. The big reveal today Microsoft announcing
Speaker 1: it's utilizing open AI technology power new versions of it's
Speaker 1: being Search Engine and Edge Browser. But pleased to dig
Speaker 1: into this now use of medies with us Microsoft Corporate
Speaker 1: vice president of Modern Life and Devices Group, and has
Speaker 1: been a busy day and just how busy has it
Speaker 1: been in terms of sign ups? There's a wait list
Speaker 1: to access to start using being in this way. What's
Speaker 1: the reaction been like use? Yeah, it's it's early days,
Speaker 1: but it's already or early hour, as I should say.
Speaker 1: There's a lot of sign up interests. I'm getting a
Speaker 1: lot of emails from people who want to get in
Speaker 1: front of the wait list. But I think we've struck
Speaker 1: a nerve. I think we actually have um kind of
Speaker 1: lit up people's imagination about what's possible with a new
Speaker 1: generation of search by infusing AI and chat and then
Speaker 1: getting to a place where you don't just get search results,
Speaker 1: but you can actually get answers to your questions. And
Speaker 1: I think it's struck a chord so far. So we're
Speaker 1: pretty excited about it. Struck a nerve as an interesting,
Speaker 1: interesting way of saying it, because it feels like you've
Speaker 1: struck a nerve lit far underneath Google as well, because
Speaker 1: it's talking up it's barred at the moment. Just discuss
Speaker 1: why there seems to be the sudden flurry of announcements
Speaker 1: this race upon us for this generative AI within search. Well,
Speaker 1: we've been working at it for a little while and
Speaker 1: and we've been excited about. The thing that has motivated
Speaker 1: us is today there's like ten billion queries that happened
Speaker 1: on any given day, and by our estimation, roughly half
Speaker 1: go unanswered, and that to us is a huge opportunity
Speaker 1: to sort of reinvent search. The other big dynamic is
Speaker 1: that AI in the last really in the last number
Speaker 1: of months, has seen an inflection. Both the technical capability
Speaker 1: has gotten so much better, but the user experienced this
Speaker 1: idea of being able to chat. The combination of those
Speaker 1: two things has really come together to make for a
Speaker 1: big opportunity use of good off need to you busy days.
Speaker 1: Caroline said, My question is why now you know? How
Speaker 1: ready is it? How convinced are you that being with
Speaker 1: AI is ready? I thought the timing was was interesting. Yeah,
Speaker 1: as I mentioned, we've been working at for a while,
Speaker 1: we've been at it for for many months. We do
Speaker 1: feel like we're ready to go to the limit preview
Speaker 1: and we're happy to have shipped in that state. And
Speaker 1: the reason for that is that in the evolution of
Speaker 1: the technology, there's only so much you can do in
Speaker 1: the lab, and then eventually you get to a place
Speaker 1: where you need to get that you know and user feedback.
Speaker 1: You need to have that to come and improve the product.
Speaker 1: We feel confident today that we've got a we've got
Speaker 1: a wow idea in terms of how chat and search
Speaker 1: and the brows are all come together and uh, and
Speaker 1: we've put in all of the good work to make
Speaker 1: sure it is a stable system. And so we're looking
Speaker 1: forward now at getting feedback and then improving. You se
Speaker 1: if open ai has a closed profit model, it's been
Speaker 1: licensing access to chat, GPT and other tools to developers.
Speaker 1: Is there any element of exclusivity in this arrangement with
Speaker 1: open ai that gives you an advantage over others in
Speaker 1: utilizing the underlying technology, either for search or other applications. Um,
Speaker 1: the open could work with money companies. The opportunity we
Speaker 1: have is that we've worked with them together so so closely.
Speaker 1: So this latest ai model on any the covers, which
Speaker 1: we announced today as a brand new one, this one
Speaker 1: is much more powerful than chat, GPT and it's tuned
Speaker 1: for search. We've worked together to make that happen. That's
Speaker 1: pretty unique. Certainly, other companies can work with the technology,
Speaker 1: but I think we have a great collaboration there and
Speaker 1: we're making that across because we that cloud of Azure
Speaker 1: powers the back in. We've worked with them on the
Speaker 1: AI supercomputer UH and we work with them on the
Speaker 1: modernization model as well. So across the board we have
Speaker 1: a very deep partnership. Talk to us about monetization such
Speaker 1: in a data you're CEO saying the technology is going
Speaker 1: to recipe basically pretty much every software category. What does
Speaker 1: that mean in terms of revenues, particularly when it comes
Speaker 1: to boosting search for example. Well, the way to think
Speaker 1: about this is um search is the largest software category
Speaker 1: and software that's out there. Advertising as a whole as
Speaker 1: a six D billion dollar business, and searches the predominant
Speaker 1: part of that. We have an opportunity to reshape that,
Speaker 1: to to bring new value to people, as we talked
Speaker 1: about in terms of being able to answer questions, but
Speaker 1: also new value to advertisers who within that experience that
Speaker 1: can bring more targeted advertising and get better R o I.
Speaker 1: So the opportunity to improve that is is something that
Speaker 1: we think is going to benefit everybody. It's interesting we
Speaker 1: went to our own audience via Twitter to ask them
Speaker 1: where they feel the winnings will be made now, not
Speaker 1: just talking about Google versus by do versus yourself at
Speaker 1: the moment, but China versus the US, and notably interesting me,
Speaker 1: they didn't think well thought that US technology companies are
Speaker 1: going to win the AI race less likely China, but
Speaker 1: the robots win is actually where they came out with you.
Speaker 1: So that speaks to a point of the power of
Speaker 1: artificial intelligence and at that point, to recorrect itself, to
Speaker 1: improve upon itself. And to that end, I asked you
Speaker 1: about the concerns, the safety, the issues, the biases. How
Speaker 1: do you ensure that we're at the right place there
Speaker 1: to unleash this. Yeah, that's a great question, Caroline, that's
Speaker 1: top of mind for us. We um We have focused
Speaker 1: now for many years on responsible AI. We've put forth
Speaker 1: principles and a framework, and we've done a lot of
Speaker 1: engineering in that regard. We've learned a lot from our
Speaker 1: past releases. So what we released today has a bunch
Speaker 1: of guard rails and safety in there for things like
Speaker 1: hate speech and violence and self harm. We you know,
Speaker 1: we catch the quarries when people type them in, and
Speaker 1: we can determine before it gets to the model, before
Speaker 1: it generates any content. We've trained the model specifically to
Speaker 1: catch these things and then again before answers come out.
Speaker 1: So we've done a lot of work that said. You know,
Speaker 1: it's been clear there's definitely bad actors out there that
Speaker 1: like to hack the system, and we're gonna have to
Speaker 1: stay vigilant and on top of it. Um. We feel
Speaker 1: that today is an important part because part of how
Speaker 1: you get better and better is you have to go
Speaker 1: to market. You actually have to ship. You can't just
Speaker 1: solve these problems in the lab, and today is an
Speaker 1: important step to continue to improve on that for a
Speaker 1: I being something that can work for everybody. Yes, if
Speaker 1: we talk about Generative AI day in day out in
Speaker 1: the show, it's great to have you thank you yourself
Speaker 1: many of microslot and and you didn't talk about it
Speaker 1: day in day out, not just from Microsoft's perspective, but
Speaker 1: some of the other competitors, right. Yeah, So by do
Speaker 1: the big name coming out overnight out of China confirming
Speaker 1: a Bloomberg scoop that as soon as March it will
Speaker 1: roll out in English. Ernie it's chat GPT competitor in
Speaker 1: the former Generative AI, a chat bot. And it's interesting
Speaker 1: because they didn't do a big onstage splash with the
Speaker 1: press and with analysts gathered, they just made a statement
Speaker 1: and we're out on Twitter kind of flexing a little
Speaker 1: bit about the roadmap for Ernie. We've been reporting around
Speaker 1: the work they've done around this, Carol. But you know,
Speaker 1: by Do is the Google of China right dominates the
Speaker 1: search market there, and they plan to integrate that tool
Speaker 1: into their own search capabilities. And as we've discussed, the
Speaker 1: shares absolutely surging both in Hong Kong and in the
Speaker 1: US in response. Yeah, and and just the element here
Speaker 1: that we've talked time and time again about US versus China,
Speaker 1: and just at one point, you think of the books
Speaker 1: have been written, the focus from Kaifu Lee and many
Speaker 1: others that China really managed to get into the home
Speaker 1: so much faster, the use of you know, the basic
Speaker 1: form of generative language AI that we're all used to have,
Speaker 1: basically asking alex or or some sort of piece of
Speaker 1: equipment in our home. China led the way in that.
Speaker 1: And I wonder how much further ahead by Do will
Speaker 1: end up becoming and how many checks and balances it
Speaker 1: will have itself. Right, And what's so interesting is Ernie
Speaker 1: is so similar to chat GBT gives a conversational style response.
Speaker 1: They're just handling it slightly differently. Sorry, well, of course,
Speaker 1: continues track. Now coming up, we're going to turn back
Speaker 1: to soft Bank and take a look at maybe a
Speaker 1: Vision Fund three plus a new fund from Goldman Sachs
Speaker 1: has its eyes set on more tech. We'll bring all
Speaker 1: of you that that next. This is Bloomberg time for
Speaker 1: talking tech. Soft Bank may consider launching a third Vision
Speaker 1: Fund after it exhausts its available capital, and the executive
Speaker 1: has told Bloomberg the Vision Fund too still has six
Speaker 1: point five billion dollars for fresh investments. But SoftBank's Marquee
Speaker 1: funds lost five billion dollars in value in the December quarter,
Speaker 1: dragged down by those slumping valuations across private startups. It
Speaker 1: was the segments fourth straight quarter of losses and more.
Speaker 1: Of course, in the world of AI, the Apple Dabby
Speaker 1: based AI company G forty two hiring dozens of people
Speaker 1: in Singapore, Jakarta, Shanghai, and Tel Aviv to scout for
Speaker 1: opportunities for a ten billion dollar tech fund. That's, according
Speaker 1: to sources, the Fungal target technology investments across those countries,
Speaker 1: as well as markets in Saudi Arabia and in Egypt.
Speaker 1: Welcome back to Bluemo Technology. M Carraine Hide in New York,
Speaker 1: and lawmakers are targeting TikTok during a markup of three
Speaker 1: bipartisan proposals. According to reporting from Bring the Government tech
Speaker 1: reporter Maria Curie, she enjoys us now from Capital Hill. Maria,
Speaker 1: the Senate Judiciary Committee is going to hold this hearing
Speaker 1: on protecting kids online next week. Sources tell us how
Speaker 1: much is this a long term goal for Biden. I
Speaker 1: think he's discussed this in speeches before relative to try
Speaker 1: and put pressure on Congress to do something about it. Sure,
Speaker 1: so this is definitely an issue that can be tackled
Speaker 1: from multiple angles, not just from Congress, but from relevant
Speaker 1: federal agencies like a Federal Trade Commission. UM. And so
Speaker 1: it certainly can be a long term goal on various fronts.
Speaker 1: But the Senate Judiciary Committee next week, we'll put a
Speaker 1: focus on it early on in the eighth Congress. The
Speaker 1: witnesses have yet to be determined, but we can expect
Speaker 1: some conversations. They're on key legislation that um did not
Speaker 1: make it across the finish lying in the last Congress,
Speaker 1: but did come close. UM. So, yeah, it was interesting
Speaker 1: when we've had guests on in particular well FCC commissioners,
Speaker 1: and then they've talked about perhaps that this should be driven,
Speaker 1: the TikTok focus should be coming from the administration rather
Speaker 1: than from Congress. When is there any update on Saphius
Speaker 1: or in general where the administration stands on TikTok and
Speaker 1: our access to it. Well, we heard recently that the
Speaker 1: President said he's not sure if TikTok should be banned
Speaker 1: in the country. But interestingly, Congress's approach would be giving
Speaker 1: the President more authority to limit TikTok, so it would
Speaker 1: still end up being UM an executive branch effort UM. Importantly,
Speaker 1: Senator Warner is working on a bill that UM would
Speaker 1: prevent giving other countries a platform for retaliating against US companies,
Speaker 1: So that's certainly a consideration moving forward as we see
Speaker 1: more and more bills crop up. Today's markup of the
Speaker 1: three UM TikTok bills were different in the sense that
Speaker 1: they would empower consumers to have more knowledge about their app.
Speaker 1: They would UM app distributors would be required to tell
Speaker 1: consumers that it is is UM owned by a company
Speaker 1: that is based in China, and that their data is
Speaker 1: being collected, and so this is taking on a different approach.
Speaker 1: Instead of banning or limiting the app, it would just
Speaker 1: be empowering consumers with more information. Career Curi of Bloomberg
Speaker 1: Government now staying in Washington to u S. Senators express
Speaker 1: their concern to Meta CEO Mark Zuckerberg over the risk
Speaker 1: of developers in China and Russia having access to use
Speaker 1: a data they say metas Facebook unit new in two
Speaker 1: thousand eighteen that quote, hundreds of thousands of developers in
Speaker 1: countries characterized as high risk had access to significant amounts
Speaker 1: of sensitive user data. The senators said their staff held
Speaker 1: meetings with company execs to determine who could get the
Speaker 1: data and what Facebook planned to do about it, particularly
Speaker 1: with regards to protecting users information. But stick with Meta,
Speaker 1: the company is asking many of its managers and directors
Speaker 1: to transition to individual contributor jobs or leave the penny
Speaker 1: as it tries to become more efficient. Joining us for
Speaker 1: more is Bloomberg Sarah Fryer who broke this story. I mean, Sarah,
Speaker 1: since we reported the kind of mass round of layoffs
Speaker 1: at Meta, I imagine there are a number of employees
Speaker 1: who have been waiting for the acts to drop. But
Speaker 1: in this case, it's very specific roles that Mark Zuckerberg
Speaker 1: and co. Appear to be going after. Right if you're
Speaker 1: a Meta employee, Ever since those cuts in November, this
Speaker 1: historic time for the company, You've seen a number of
Speaker 1: other rounds of layoffs at other companies and you're thinking,
Speaker 1: you know what's coming next? Are we going to have
Speaker 1: another round? Amazon had another round? And what it turns
Speaker 1: out from our sources is there is a thinning of
Speaker 1: the ranks happening at Meta as we speak, that managers
Speaker 1: are getting told by their supervisors, Um, you need to
Speaker 1: get to a point where you're doing individual contributor work,
Speaker 1: whether that's coding, research, design, um, whatever it is that
Speaker 1: you can do. That is part of building as opposed
Speaker 1: to managing. That is what Meta values right now, that's
Speaker 1: where we want to push it forward. And if and
Speaker 1: if you can't do that, if you don't find yourself
Speaker 1: in a role like that, we'll have to ask you
Speaker 1: to leave. And here's here's here's a nice package to
Speaker 1: that point, the nice package. But Sarah, if you're being
Speaker 1: asked to pull back on managerial role but do more yourself,
Speaker 1: is that more valuable or less in terms of recompense
Speaker 1: to you. Well, it's unclear whether people are being asked
Speaker 1: as they make those transitions to take lower salaries. I
Speaker 1: imagine that would be hard to swallow if if you're
Speaker 1: a Meta employee. But I think the important factor here
Speaker 1: is that the company is trying to become more efficient.
Speaker 1: Zuckerberg is called the Year of Efficiency. They're calling this
Speaker 1: move the flattening um. They're trying to make sure that
Speaker 1: there are fewer steps to getting things done and trying
Speaker 1: to make sure that products are better, profits are better,
Speaker 1: all things across the board can in theory, be solved
Speaker 1: by having fewer middle managers m R. I p to
Speaker 1: all of us who who have that role. Apparently, so
Speaker 1: I think that that is that is the takeaway. Whether
Speaker 1: Meta will actually be more efficient as a result of
Speaker 1: of this thinning, I'm I don't know. I mean, I
Speaker 1: think that there there are, you know, roles that have
Speaker 1: been created for a reason. But what I have heard
Speaker 1: in talking to employees at the company is there is
Speaker 1: some some encouraging science here. People who have noticed that
Speaker 1: there are some managers that only are in charge of
Speaker 1: one or two employees, that there are some teams that
Speaker 1: are tasked with doing jobs that are in conflict or
Speaker 1: in competition with what other teams are doing. So certainly
Speaker 1: those things can be sorted out and fixed in this
Speaker 1: next round. And maybe the fact that they're not doing
Speaker 1: it all at once UM and more on an individual
Speaker 1: basis gives them time to be more thoughtful, since I
Speaker 1: think there was a lot of of tension following the
Speaker 1: last layoffs that people didn't hear about until the last minute.
Speaker 1: Every single person wants to be more productive, more effective
Speaker 1: at work, have more impact. Do we know if there's
Speaker 1: bits of the business that this is going to really
Speaker 1: affect Where the bloating really got from a managerial perspective, Well,
Speaker 1: I think that the company wants to really focus on
Speaker 1: UM some of their their core initiatives. We know that
Speaker 1: they want to improve their artificial intelligence for better ad targeting,
Speaker 1: for better algorithmic sharing, on on their real products, trying
Speaker 1: to make sure that people get the right videos. They're
Speaker 1: trying to ensure that UM you know, some of the
Speaker 1: work they're doing on Horizon World can translate to a
Speaker 1: mobile phone user. So there's some really key initiatives that
Speaker 1: they're working towards here that are focused on profits. One
Speaker 1: of them that was mentioned on the earnings call that
Speaker 1: caught my eye was this transition to making money in messaging,
Speaker 1: which is something that people have been asking that about
Speaker 1: for years. In Zuckerberg SAIDs are now at ten billion
Speaker 1: annual run rate and revenue there. So I think that
Speaker 1: we're going in to see the company get a lot
Speaker 1: more focus, a lot less experimental throwing spaghetti at the
Speaker 1: world to see what six and more thoughtful about where
Speaker 1: they spend their time going forward to try to to
Speaker 1: bring you know, this sense of efficiency and energy in
Speaker 1: the next few months. So far, the music to some
Speaker 1: investors is at least Springberg. Sarah Fry, thank you so much.
Speaker 1: Great reporting, even though she's of course senior editor of
Speaker 1: that team. Meanwhile, coming up, we'll talk about the future
Speaker 1: of mobility from e VS here on Earth two planes
Speaker 1: to the moon on that next with up Partners co
Speaker 1: founder Sarah Sagary. It's just published a key report for
Speaker 1: full insights on all of this, and you're keeping a
Speaker 1: keen eye on certain shares right now. Yeah, let's continue
Speaker 1: to look at Microsoft, as I said, to stop moving
Speaker 1: in lockstep with the SMP five. A lot of this
Speaker 1: about fed chair pals comments, but there is some buoyancy
Speaker 1: around using open aiyes tech with being with the edge
Speaker 1: browser and what they can do to boost their competitor
Speaker 1: ativeness against Google and particular in the world of search.
Speaker 1: Investors clearly liking what they see. This is Bloomberg. Later tonight,
Speaker 1: President Biden is expected to discuss his economic progress so far,
Speaker 1: including how the Inflation Reduction Act will drive manufacturing and
Speaker 1: supply chain improvements for the adoption of electric fields and
Speaker 1: by extension, cut US emissions. Speaking of which, UP Partners
Speaker 1: just published its own Moving World Report, which looks at
Speaker 1: all of the macro and micro trends across mobility and
Speaker 1: transport in the venture firms. Report is based on hundreds
Speaker 1: of research studies, dozens of interviews and draws some critical conclusions.
Speaker 1: Firstly that funding for mobility has outpaced most tech sectors.
Speaker 1: But secondly, mobility has become the most important segment when
Speaker 1: it comes to looking at how we combat emissions here
Speaker 1: in North American beyond joining us to discuss Sorry Cigary,
Speaker 1: managing partner and co founder of UP Partners, and sorry's
Speaker 1: before you you joined us here in San Francisco for
Speaker 1: the show You posted on linked In about the report
Speaker 1: coming out, and hundreds of people engage with you and
Speaker 1: said I'd like to see it. But those are the
Speaker 1: two key conclusions. More money from vcs into mobility than
Speaker 1: any other subsector, and also the mobility counts for more emissions.
Speaker 1: What is it that you've discovered or found? Yea, thanks
Speaker 1: for having us. The big takeaway is that mobility is
Speaker 1: growing rapidly thirty x increase and venture investment and mobility,
Speaker 1: and it represents about of all CEO two emissions as
Speaker 1: a ten trillion dollar market. And so we have this
Speaker 1: convergence of perhaps one of the most important thing for
Speaker 1: society today, which is how do we reduce carbon missions
Speaker 1: with how we move things on the ground, air, see
Speaker 1: in space, people and packages. And we're see an opportunity
Speaker 1: for real economic development as a result of it. So
Speaker 1: I guess the conclusion to clear this is where the
Speaker 1: money is going. This is what's the biggest contributors to
Speaker 1: emissions backward looking when you think about the nobility your
Speaker 1: avenge capitalists, you know you, and I've spent some time
Speaker 1: with some of your portfolio companies and areas you invest.
Speaker 1: What did the findings of the report push you to
Speaker 1: do with your own investment thesis and where you're looking
Speaker 1: to make change. But we just released it, so now
Speaker 1: we get to actually go make some decisions based off
Speaker 1: the data. And we made it open source, so other
Speaker 1: skin as well. A couple of key takeaways. One is
Speaker 1: in the aviation industry, we are facing a major pilot shortage.
Speaker 1: Will be at sixty five thousand pilots short by you.
Speaker 1: That is a huge impact our economy if we don't
Speaker 1: fix so we're looking to invest in technologies and businesses
Speaker 1: that can solve that. Two is, as we go towards
Speaker 1: electrification of everything, a massive material shortage. We're looking at
Speaker 1: a ten x increase in lithium ion batteries. We already
Speaker 1: saw close to increase in the lithium ion price index.
Speaker 1: That entire ecosystem for technology used to help create lithium
Speaker 1: ion batteries cleaner, faster, cheaper, more accessible is a huge
Speaker 1: area of continued investment for us. What are the charts
Speaker 1: that jumped out from me at the report was the
Speaker 1: kind of demand curve for batteries going through an area
Speaker 1: Bloomberg U Energy finances looked at as well. When you
Speaker 1: discuss with your portfolio companies in this aero you go
Speaker 1: out is with making an investment in mind, how do
Speaker 1: you fix the problem? You know, which areas do you
Speaker 1: invest in that there are offering solutions to fight this
Speaker 1: shortage of supply. Yeah, so we've made a couple of
Speaker 1: direct investments in this space just recently, company called a
Speaker 1: on X which is using AI to help understand what
Speaker 1: materials can help solve another AI compare there you go.
Speaker 1: So it's AI and energy put together. So it's very
Speaker 1: relevant based off what's going on. We also have investment
Speaker 1: a company called unit x which is using UM computer
Speaker 1: Vision AI in factories to help look at batteries for
Speaker 1: their faults. You know, battery fires are a big big deal.
Speaker 1: Can be up to forty five minutes put out a
Speaker 1: battery fire for an e V. So ensuring you've got
Speaker 1: high quality of product going out the door using technology
Speaker 1: do that big areasm of investment. What about the focus federally?
Speaker 1: What about a desire for lowering emissions and seeing obviously
Speaker 1: a labor shortage alleviated coming from an administration? Is that
Speaker 1: head wind or tail wind for you at the moment? Well,
Speaker 1: the Inflation Reduction Act has created some pretty significant tail
Speaker 1: ones for this whole industry. We're looking at close to
Speaker 1: a hundred and fifty billion dollars allocated out of the
Speaker 1: Inflation Reduction Act into hydrogen, into clean energy, into transportation,
Speaker 1: which is going to create all sorts of new activity
Speaker 1: in and around mobility. Specifically here in the United States.
Speaker 1: One big piece of news is the the upcoming Green Deal.
Speaker 1: In Europe, they're looking at close to a trillion dollars
Speaker 1: to be allocated towards going net zero. By this is
Speaker 1: a huge secular change in all things moving people in goods,
Speaker 1: on the ground, air scene, and space. And so it's
Speaker 1: having literally an Act of Congress, be it here or
Speaker 1: in Europe or elsewhere, is going to be required to
Speaker 1: see these ajor major changes and how we move about
Speaker 1: this planet. I mean, you're a man who is so
Speaker 1: passionate about how you move out this planet, in particular flying.
Speaker 1: You've from a very young age understand how to navigate
Speaker 1: the skies. Talk to us about there are other people
Speaker 1: who navigate the skies, who run these businesses, I think
Speaker 1: the Delta CEO, and many have come on very passionately
Speaker 1: wanting to bring down their own emissions curve and and
Speaker 1: ways in which to do that. Are you seeing the
Speaker 1: sort of focus on real innovation here coming from the
Speaker 1: big companies are having doesn't have to come from the
Speaker 1: smaller companies that you've got. I think it's really a
Speaker 1: partnership between entrepreneurs and the largest companies in the world
Speaker 1: to really affect major change and how we move people
Speaker 1: and goods around the world. A company like zip zip Line,
Speaker 1: which is using drones to do package delivery in partnership
Speaker 1: with Walmart and bent Vial Arkansas today, where they did
Speaker 1: over five thousand delivery flights last year, we've seen two
Speaker 1: x increase in the number of drone delivery flights from
Speaker 1: last year, which doubled the previous year, which doubled the
Speaker 1: year before. So I think to your specific question, you
Speaker 1: got to get the entrepreneurs partner with the largest companies
Speaker 1: in the world to really collectively transform the way we
Speaker 1: move things. So you're very able pilots across a number
Speaker 1: of classes of aircraft. As you know, my head is
Speaker 1: often up in space, and I was really interested to
Speaker 1: see a focus of your report and the opportunity outside
Speaker 1: of this atmosphere. Why go there? Why look at that? Well,
Speaker 1: it's really the last frontier for us is space, and
Speaker 1: I think it's so important to recognize the consequences of
Speaker 1: what Ellen is doing with Starship. The way people should
Speaker 1: think about Starship is like the railway to space. It's
Speaker 1: effectively making almost free to get a pound of payload
Speaker 1: to orbit. And when you make it practically free to
Speaker 1: get a pound of palot to orbit, you can't begin
Speaker 1: to understand what the consequences will be a new business.
Speaker 1: As an opportunity, he is like a base on the
Speaker 1: Moon or Mars or whatever it might be. So this
Speaker 1: is a huge area of investment and interest I think collectively.
Speaker 1: All right, sorry Cigary managing partner, co founder out Partners,
Speaker 1: Good to catch up. You know what's so interesting? Care
Speaker 1: for me as well as the opportunity as an investor.
Speaker 1: You know, we see so many of these reports, but
Speaker 1: Sara saying they're actually sustainability offers an attractive return down
Speaker 1: the road. Sticking with sustainability from investment to reality, Amazon
Speaker 1: has started selling lettuce leaves through an investment made two
Speaker 1: years ago in the startup Hippo Harvest. The leaves are
Speaker 1: produced using less water, less fertilizer than conventionally produced crops.
Speaker 1: According to Hippo. Nike Ellis from the Amazon Climate Pledge
Speaker 1: Fund joined me here in San Francisco. That's the story.
Speaker 1: How did this investment become a real product for Amazon.
Speaker 1: It was a collaborative effort between Amazon and Hippo Harvests
Speaker 1: over the last fifteen months. When we first diligence and
Speaker 1: sourced the deal. We sold two really compelling features about
Speaker 1: the opportunity. One was to drive down the price and
Speaker 1: the second was to increase the quality of the investment rate.
Speaker 1: And so we've worked for fifteen months now hand in
Speaker 1: hand to bring this product in the market in our
Speaker 1: fresh doors, iterating on the timing, the packaging, the quality
Speaker 1: of the produce, the price point, and we're finally able
Speaker 1: to get it over the line and proud to announce
Speaker 1: it here today. Let's talk about the economics of it day.
Speaker 1: And I'm understanding you to have a pretty small footprint
Speaker 1: down their Santa Clara or Santa Cruz. H Is this
Speaker 1: a money maker? Is this a viable business long term
Speaker 1: for Amazon to make these investments and convert them to product. Absolutely,
Speaker 1: From the Amazon Climate Pludge Fund point of view, we
Speaker 1: have a dual mandate of both reducing carbon emissions for
Speaker 1: Amazon and also looking to do it profitably. So for US,
Speaker 1: hip hop Harvest really represents the best of both of
Speaker 1: those cases, and I think they're already demonstrating that down
Speaker 1: there in Puscadero, and the hope is that that scales
Speaker 1: throughout the network and around the world here in the
Speaker 1: years ahead. Can give us a sense some timing of scaling.
Speaker 1: When I get it in New York, when can you
Speaker 1: get it abroad? It's gonna take time, Caroline. We're at
Speaker 1: a crawl, walk, run experimentation phase. The first step is
Speaker 1: just to get it into the market and validate customers
Speaker 1: are interested in purchasing it. Our expectation is we will
Speaker 1: scale out throughout the Amazon and Whole Foods ecosystem, and
Speaker 1: then we're going to look to support Hippo Harvest as
Speaker 1: they try and expand both domestically and internationally. But we
Speaker 1: would expect that's going to take a couple of years
Speaker 1: before we finally hit that stride. We've been looking at
Speaker 1: some of the pictures of how this will works. I
Speaker 1: can see your robots that are there, and I know
Speaker 1: you're a man who talks about startups about climate, but
Speaker 1: you also talk about workforce. How is this sort of focus,
Speaker 1: this efficiency going to be impacting blue collar workers an
Speaker 1: inability to need that sort of labor. Well, we're just
Speaker 1: beginning to learn how these robots are going to change
Speaker 1: the dynamics on the farm. I think one thing we've
Speaker 1: seen early on is that Hippo Harvest is still employing
Speaker 1: local employees and bringing their farm expertise to bear to
Speaker 1: help produce this produce. And then we're also seeing new
Speaker 1: jobs emerge, obviously servicing and supporting the robots, but also
Speaker 1: doing quality assurance and control and supply chain management to
Speaker 1: modernize these farms. And so my suspicion is the net
Speaker 1: of it's going to be we see job growth in
Speaker 1: both areas as we look to secure our food supply
Speaker 1: chain or Nick, I know you're you're an Amazon Climate
Speaker 1: Pledge Fund principle, that's your job. My question, can hipp
Speaker 1: Ho move as fast as it's done without Amazon behind it?
Speaker 1: Does it take an Amazon to bring this kind of
Speaker 1: rapid success? Certainly having Amazon behind you as a key catalyst.
Speaker 1: I think one of the things we've looked for in
Speaker 1: our investment floor proven entrepreneurs that can reliably deliver innovations
Speaker 1: to market, certainly with hippop Harvest. We have serial entrepreneurs
Speaker 1: here and they've done it again, so our expectitioners will
Speaker 1: see more of the same and it doesn't necessarily require Amazon.
Speaker 1: Very very quickly, Have you eaten the lettuce? Is it good?
Speaker 1: I have? It's fantastic. Highly recommend everybody give it a trial. Okay,
Speaker 1: it's quite the array from remain to all types of letters.
Speaker 1: We thank you so much for coming on and talking
Speaker 1: all about the Amazon Climate Pledge Fund principle. Nick Ellis, Meanwhile,
Speaker 1: that does it for this edition of blomg Technology. We're
Speaker 1: gonna talk about key earnings coming thinking vast on Wednesday's
Speaker 1: uber On CEO Dara Kososha he joins Bloomberg and then
Speaker 1: thirty a m Eastern eight thirty am Pacific. Of course,
Speaker 1: don't want to miss that sort of conversation from New
Speaker 1: York from San Francisco, this is Bloombergh