WEBVTT - Microsoft Backs ChatGPT, Elliott Invests in Salesforce 0:00:14.120 --> 0:00:18.320 I'm Caroline Hyde up Bloomberg's San Francisco studio. Welcome for 0:00:18.480 --> 0:00:21.160 New York. Together back in San Francisco and d Lovelow. 0:00:21.239 --> 0:00:23.959 This is Bloomberg Technology and how nice it is to 0:00:24.000 --> 0:00:26.920 have you here, so many headlines to pass over many 0:00:26.960 --> 0:00:29.000 of the market moving when there's some feel good right 0:00:29.000 --> 0:00:31.760 now around technology, despite layoffs, despite everything that's going on, 0:00:31.920 --> 0:00:34.800 and it is centric to being in San Francisco this 0:00:34.800 --> 0:00:36.839 week with all the earnings to come, first and foremost, 0:00:36.840 --> 0:00:39.680 we talk about valuations here in Silicon Valley. Microsoft's ten 0:00:39.760 --> 0:00:42.560 billion bet on open Ai is just the start of 0:00:42.560 --> 0:00:46.280 the artificial intelligence revolution, is what Microsoft's chief product officer 0:00:46.400 --> 0:00:49.520 is pitching as quote the defining technology of our time 0:00:49.920 --> 0:00:53.000 and more local to us. Elliott's multibillion dollars stake in 0:00:53.120 --> 0:00:56.320 sales Force comes as a way of the activist investors 0:00:56.360 --> 0:00:59.720 pushed companies to act more on behalf of their shareholders. 0:01:00.120 --> 0:01:03.560 And we now know what Apple's mixed reality headset is 0:01:03.600 --> 0:01:06.640 capable of as a company explores a new approach to 0:01:06.840 --> 0:01:10.440 eye and hand tracking controls. But first let's do it. 0:01:10.480 --> 0:01:13.080 Let's get to how the focus on any investment management 0:01:13.080 --> 0:01:15.280 has had us all eyes on the tower that is 0:01:15.319 --> 0:01:18.039 here in San Francisco. Of course, what is Mark Benioff, 0:01:18.120 --> 0:01:20.720 Where is his focus now? And what does the activist 0:01:20.760 --> 0:01:24.000 Steake really mean for his business? Swooping in of course 0:01:24.040 --> 0:01:26.760 after layoffs, after deep stop plunge at the enterprise software 0:01:26.760 --> 0:01:29.679 giant mean Wes Leana Veka is more every New York Leanna, 0:01:29.959 --> 0:01:32.119 As I sit here in San Francisco, and I think 0:01:32.480 --> 0:01:35.920 of initially the worry Mimmi many had for Mark Benioff. 0:01:35.920 --> 0:01:39.600 Perhaps as we've seen some of the other executives shed away, 0:01:39.880 --> 0:01:41.679 many thought maybe that meant he was going to be 0:01:41.720 --> 0:01:44.640 doing more dealmaking, spending more. But does an investor like 0:01:44.680 --> 0:01:47.880 Elliott mean that's off the cards? At this point, we 0:01:47.880 --> 0:01:50.480 don't know exactly what Elliott is pushing for, but we 0:01:50.600 --> 0:01:53.680 have seen their public statement that was pretty complimentary of 0:01:53.760 --> 0:01:55.960 Mark Bennioff, so it doesn't look like it'll be a 0:01:56.080 --> 0:02:00.200 nasty fight. That said, Elliott Management has taken on so 0:02:00.360 --> 0:02:03.360 many big tech companies over time that have made so 0:02:03.400 --> 0:02:06.160 many changes, so there could really be a range of 0:02:06.200 --> 0:02:08.760 things that they would like. I think ultimately they want 0:02:08.800 --> 0:02:11.079 the stock to go up and that they believe there's 0:02:11.080 --> 0:02:15.440 probably ways for shareholder value to be improved, you know, Leona, 0:02:16.840 --> 0:02:21.399 this time around Salesforce, Elliot's name crosses the Bloomberg terminal monthly. 0:02:21.480 --> 0:02:24.639 It seems to me, you know, the cadence of their investments, 0:02:24.639 --> 0:02:27.440 what is their track record on working with companies? Because 0:02:27.480 --> 0:02:30.640 you said you read the statement from the company deep 0:02:30.760 --> 0:02:33.560 respect for Mark Bennioff was the word they used. It 0:02:33.600 --> 0:02:36.440 doesn't seem hostile. It seems they want to work with 0:02:36.760 --> 0:02:39.440 Mr Benioff over at Salesforce Tower. And one of the 0:02:39.480 --> 0:02:41.920 reasons they might be wanting to work in a friendly 0:02:41.960 --> 0:02:44.480 manner with the company is that I've been joking with 0:02:44.520 --> 0:02:48.960 sources that Salesforce is now a hedge fund hotel. There's, uh, 0:02:49.080 --> 0:02:52.480 you know, first there was Starboard, Now there's Elliott, Inclusive Capital, 0:02:52.800 --> 0:02:55.480 Jeff Odden's firm. He used to be a value actors 0:02:55.480 --> 0:02:57.680 in there. And then there's a mystery Activists that we're 0:02:57.680 --> 0:03:00.079 trying to figure out. CNBC, you know, has report it 0:03:00.520 --> 0:03:03.240 on that. So there might be a sense that maybe 0:03:03.280 --> 0:03:07.200 Elliott's the White Knight activists to work with. In twenty nineteen, 0:03:07.400 --> 0:03:12.240 eBay fell in the crosshairs of Elliott and also Starboard, 0:03:12.280 --> 0:03:14.680 and they gave them both board seats. So That's another 0:03:14.840 --> 0:03:17.239 example that we're kind of looking back in history to 0:03:17.280 --> 0:03:19.480 see what could happen here. At this point, we don't 0:03:19.480 --> 0:03:22.120 know if Salesforce is willing to offer those board seats, 0:03:22.120 --> 0:03:25.520 but Jesse Cohen, who is the one leading the investment 0:03:25.520 --> 0:03:27.880 for Ellie Management, he sat on some pretty big boards 0:03:29.320 --> 0:03:33.080 and Leanna just put into perspective twenty twenty two, the 0:03:33.160 --> 0:03:36.840 last quota, we saw so many more activist steaks really 0:03:36.880 --> 0:03:40.480 being built globally worldwide. How many offenses are there? I 0:03:40.520 --> 0:03:43.080 can already think of what Disney's outlet, Intel, how what 0:03:43.120 --> 0:03:46.000 other companies? So you nailed it with Disney. That's kind 0:03:46.000 --> 0:03:49.000 of the big one that the whole activist community is 0:03:49.040 --> 0:03:51.400 watching because that looks like it's headed to an actual 0:03:51.440 --> 0:03:55.360 shareholder vote at some point. Um Elliott doesn't usually get 0:03:55.400 --> 0:03:57.760 to that shareholder vote, so I'd be surprised if that's 0:03:57.760 --> 0:04:01.040 where Salesforce is headed. But right now we're entering this 0:04:01.160 --> 0:04:04.800 what we call proxy season. These nomination windows are starting 0:04:04.800 --> 0:04:08.040 to open at various companies, so we're seeing investors come 0:04:08.080 --> 0:04:11.040 in and say, hey, we want to nominate shareholders. Salesforce's 0:04:11.080 --> 0:04:13.480 window is coming up in February. We'll be watching that 0:04:13.560 --> 0:04:17.679 really closely. All right, Bloomberg's the Aanna Baker who leads 0:04:17.680 --> 0:04:20.960 our deals coverage investor coverage. Thank you so much, Caroline. 0:04:21.000 --> 0:04:23.960 Welcome to San Francisco. If you jump in a cab acuet, 0:04:24.400 --> 0:04:28.560 you go downtown whatever, no preference, but you'll see the 0:04:28.560 --> 0:04:30.720 Salesforce tower. And this is what jumped out at me 0:04:30.720 --> 0:04:34.400 on the Bloomberg terminal earlier, this single chart about salesforces 0:04:34.520 --> 0:04:37.679 marketing spend as a percentage of its sales. You start 0:04:37.720 --> 0:04:40.840 to realize what it is that investors, activists, investors might 0:04:40.880 --> 0:04:45.360 be getting at. They're almost at fifty right of their 0:04:45.480 --> 0:04:49.080 their sales spend being on marketing, which is kind of 0:04:49.320 --> 0:04:53.440 mind blowing a little bit, right, But then they have potential. 0:04:53.560 --> 0:04:56.640 You know, this is a software company margins it also 0:04:56.680 --> 0:04:58.880 though that spend as largs you were on dream Force. 0:04:58.960 --> 0:05:00.840 I think the last time we was. Lenny Kravitz is 0:05:00.880 --> 0:05:04.080 performing there. These big parties. Basically it's a massive music festival. 0:05:04.120 --> 0:05:07.320 It does a lot for the San Francisco ecosystem as well. 0:05:07.360 --> 0:05:10.560 Those sorts of events they bring people to gatherings, which 0:05:10.560 --> 0:05:12.240 are a city that they're really taking on the road 0:05:12.279 --> 0:05:15.080 to the marketing spenders about being in people and in 0:05:15.160 --> 0:05:17.920 person and sharing ideas. But they're probably going to want 0:05:17.960 --> 0:05:19.360 him to pull back on that. And this is a 0:05:19.360 --> 0:05:20.880 company that has had to pull off on the on 0:05:20.880 --> 0:05:24.039 the layoffs front, you know, in pausing her in other areas, 0:05:24.080 --> 0:05:26.480 and where M and A has been just absolutely right. 0:05:26.560 --> 0:05:28.160 The other big story we're watching here out on the 0:05:28.200 --> 0:05:31.200 West Coast is, of course, Microsoft and open Ai are 0:05:31.279 --> 0:05:34.880 reported ten billion dollar investments set over a number of years, 0:05:35.200 --> 0:05:38.919 which open Aron Microsoft have now confirmed sort of in 0:05:38.960 --> 0:05:43.080 a blog, the company saying Microsoft will involve invest multiple 0:05:43.160 --> 0:05:45.479 billions of dollars. Remember, this is a company that mass 0:05:45.560 --> 0:05:48.080 more than a million users just within days of launch 0:05:48.400 --> 0:05:52.040 back in November, and we've already started the debate where 0:05:52.040 --> 0:05:54.040 does this all fit in with Microsoft strategy? Where does 0:05:54.040 --> 0:05:56.560 it fit in our lives? The use of chat, GPT 0:05:56.680 --> 0:05:59.279 and other AI tours a fascinating one, and also how 0:05:59.320 --> 0:06:02.240 does this help soft gain market share from the likes 0:06:02.400 --> 0:06:05.440 of aws. Now we know that Amazon is the power 0:06:05.480 --> 0:06:07.880 player when it comes to the cloud provision. Overall the 0:06:07.920 --> 0:06:11.040 fact that Microsoft wants to intertwine open Ai into every 0:06:11.960 --> 0:06:13.960 really every part of Azure the business it wants to 0:06:14.000 --> 0:06:17.080 set itself apart as a cloud offering, and open Eye 0:06:17.080 --> 0:06:18.880 is such a clever way to do it. What's so interesting, 0:06:18.960 --> 0:06:20.880 of course, is the open Eye once upon a time 0:06:20.960 --> 0:06:24.560 was an off profit, now as a capped profit right company. 0:06:24.720 --> 0:06:27.120 So this deal, there's ten million that's being invested. It's 0:06:27.160 --> 0:06:29.320 kind of awkwardly done, isn't it, because you're kind of 0:06:29.320 --> 0:06:33.560 being it's offering in kind. Basically open ai is able 0:06:33.680 --> 0:06:37.760 to use the firepower of Microsoft's own cloud provisions, so 0:06:37.880 --> 0:06:41.240 so it's a really significant investment from Microsoft seven days 0:06:41.400 --> 0:06:44.919 after they have laid off ten thousand staff. But the 0:06:44.920 --> 0:06:47.640 closed profit model is where basically any money that open 0:06:47.680 --> 0:06:51.280 Ai mates, which is by licensing the tools to software developers, 0:06:51.320 --> 0:06:53.840 they put back straight into the development because they still 0:06:53.839 --> 0:06:56.560 feel like it's in the nascent stage, after they've paid investors, 0:06:56.640 --> 0:06:58.960 after they've paid their dus, and after they pay their 0:06:58.960 --> 0:07:01.279 own employees. Right, yeah, I mean, we've been trying to 0:07:01.320 --> 0:07:03.920 identify what is the next big company for the next decade, 0:07:03.960 --> 0:07:06.320 the next twenty years. You know, there's a lot of 0:07:06.800 --> 0:07:09.960 debate whether actually open ai is it, and the emphasis 0:07:09.960 --> 0:07:11.720 of them in the news cycles amazing, And you're right, 0:07:12.200 --> 0:07:15.120 Microsoft are already implementing this and as you're cloud for customers. 0:07:15.160 --> 0:07:18.200 You can use chat GPT or even dally on the 0:07:18.200 --> 0:07:20.200 imaging side, So it's out there in the real world. 0:07:20.200 --> 0:07:22.400 You and I have played with it to a lesser extent, 0:07:22.960 --> 0:07:26.320 you know here on the show. But interesting a lot 0:07:26.320 --> 0:07:29.520 of cash math on chat GPT. That was my learning, 0:07:29.560 --> 0:07:32.040 my podcast learning over the course of the weekend. And 0:07:32.120 --> 0:07:33.760 I can't tell you how nice it's about in San 0:07:33.760 --> 0:07:37.040 Francisco known fat that chat GPT wouldn't tell you about 0:07:37.080 --> 0:07:40.280 my family. My son's middle name is Francisco. That's how 0:07:40.320 --> 0:07:43.160 much the city. Because of your time here, well, let's 0:07:43.200 --> 0:07:53.160 make the most of it while you're here. We've might 0:07:53.200 --> 0:07:55.360 have been positive. I'm big deck for I don't know 0:07:55.440 --> 0:07:57.520 a year, a year and a half. We do believe 0:07:57.520 --> 0:08:00.200 that there is still some deflation to come out of 0:08:00.200 --> 0:08:03.760 this market after the exube. I actually think that the 0:08:03.800 --> 0:08:06.480 tech sector is one of the few sectors that is 0:08:06.560 --> 0:08:10.040 really discounting a recession in its outlook. And the longer 0:08:10.120 --> 0:08:13.600 the macro volatilely persists, we do expect early stage and 0:08:13.720 --> 0:08:16.040 seed to start to see that crunch that the late 0:08:16.080 --> 0:08:18.160 stages you see right now, there is going to be 0:08:18.200 --> 0:08:22.280 some amount of normalization of the demand. Uh well, frankly, 0:08:22.280 --> 0:08:24.920 we in the tech industry will also have to get efficient, right. 0:08:24.960 --> 0:08:27.480 It's not about everyone else doing more with less. We 0:08:27.520 --> 0:08:31.080 will have to do more with less. There was just 0:08:31.160 --> 0:08:34.360 some of our recent guests discussing the state of the 0:08:34.400 --> 0:08:38.960 tech sector. And another week, another day, more headlines all 0:08:39.000 --> 0:08:42.000 to do with layoffs. This Monday, Spotify six percent of 0:08:42.000 --> 0:08:44.280 staff six dred and then just as we were getting 0:08:44.280 --> 0:08:46.920 ready for the show, Gemini a second round of ten 0:08:46.960 --> 0:08:52.240 percent and just keeps going un relenting. Really feels like 0:08:52.280 --> 0:08:55.320 the numbers that are coming out ten percent smaller amount 0:08:55.320 --> 0:08:57.920 for Gemini, of course, a sixth cent number layoff over 0:08:58.000 --> 0:08:59.800 Spotify I means six thousand people are going to be 0:08:59.800 --> 0:09:03.560 going this vote again. It's about a CEO trying to 0:09:03.600 --> 0:09:06.880 own the mistakes made, basically saying his words were I 0:09:06.920 --> 0:09:08.960 was too ambitious. They put out a note from Daniel 0:09:09.240 --> 0:09:12.160 talking about the fact that they once again hired too 0:09:12.200 --> 0:09:15.120 many but also invested too far perhaps and the fact 0:09:15.160 --> 0:09:17.839 that the executive changes going on at Spotify they want 0:09:17.840 --> 0:09:20.000 to have more efficiency. That is the watchword. There's a 0:09:20.000 --> 0:09:22.720 debate of how much embassis you put on layoffs announced 0:09:22.880 --> 0:09:24.679 versus laos and acted you know, we have the Challenger 0:09:24.760 --> 0:09:27.679 Christmas data and people say, well, those are just announcements, 0:09:27.679 --> 0:09:29.480 they're not fulfilled. And there are others out there in 0:09:29.480 --> 0:09:33.400 the market who say there's bright spots here. And that's 0:09:33.400 --> 0:09:36.160 why I'm delighted to say we can discuss with Spencer Green, 0:09:36.240 --> 0:09:40.320 managing partner at t s VC, which actually is invested 0:09:40.360 --> 0:09:42.360 in C state companies over the last twelve years. A 0:09:42.360 --> 0:09:46.079 good example, you invested in Zoom eleven before they were 0:09:46.080 --> 0:09:49.040 even had a product, really, you know, and that was 0:09:49.120 --> 0:09:53.040 coming out of a financial crisis or downturn. When you 0:09:53.120 --> 0:09:56.640 see these headlines crossing the Bloombog terminal time and time again, 0:09:56.679 --> 0:10:01.760 Spotify six the latest as somebody who invests in companies 0:10:01.800 --> 0:10:05.199 that actually may still be trying to hire. What's your reaction, Well, 0:10:05.240 --> 0:10:07.679 I mean, nobody roots for a recession, but it's definitely 0:10:07.760 --> 0:10:11.000 good for the seed stage economy. Um, the seed I 0:10:11.040 --> 0:10:13.839 mean you heard, you know, one of your your prior 0:10:13.880 --> 0:10:16.600 guests talking about a crunch and seed we see the opposite. 0:10:16.640 --> 0:10:20.640 We see that brand new company formations are booming and 0:10:20.760 --> 0:10:23.319 it's become much easier to hire staff, to hire staff, 0:10:23.320 --> 0:10:26.040 to hire talent. Um. We had a year ago, what 0:10:26.080 --> 0:10:28.880 I would call it double whammy that it was hard 0:10:28.880 --> 0:10:31.520 to hire people, and also these big companies were investing 0:10:31.559 --> 0:10:34.720 in some of these innovative projects. As they cut their investments, 0:10:34.720 --> 0:10:37.280 they leave room for competitors and they put more talent 0:10:37.320 --> 0:10:39.120 on the street spent. So we delight to have you 0:10:39.120 --> 0:10:41.240 in the studio, Caroline and I while we're together in 0:10:41.280 --> 0:10:44.760 San Francisco. It feels like the story is not just 0:10:44.800 --> 0:10:46.440 playing out here. But the reason you hear is, I 0:10:46.440 --> 0:10:49.079 tweeted over the weekend, hold on, is there anyone that's 0:10:49.120 --> 0:10:50.920 kind of actively trying to go out there and hire 0:10:50.960 --> 0:10:53.559 all these people? Because we do hear that, but we're 0:10:53.559 --> 0:10:56.199 looking for some concrete evidence that it's true. I mean, 0:10:56.240 --> 0:10:59.000 are you saying to your portfolio companies, Hey, now's a 0:10:59.000 --> 0:11:01.480 great chance to get top to absolutely. And we have 0:11:01.520 --> 0:11:03.959 portfolio companies. We have one here in San Francisco called 0:11:04.040 --> 0:11:07.360 Zoom Transportation that runs electric school bus services for San 0:11:07.400 --> 0:11:10.520 Francisco and for Oakland and for Los Angeles and so forth. 0:11:10.880 --> 0:11:13.280 They're hiring. We have a recent company we funded called 0:11:13.320 --> 0:11:18.400 Ebots that does assembly robots for electronics. They're hiring. Angle 0:11:18.440 --> 0:11:21.040 Health is hiring. You know, lots of our portfolio companies 0:11:21.040 --> 0:11:24.160 are hiring and a year ago it was much more 0:11:24.160 --> 0:11:27.079 difficult for them. It's interesting, and I suppose in many 0:11:27.080 --> 0:11:30.319 ways this is why the relentless headlines that we talk 0:11:30.360 --> 0:11:32.840 about the hundred tens of thousands being let go at 0:11:32.880 --> 0:11:35.200 Metro and they're like on't showing up in the federal 0:11:35.280 --> 0:11:38.880 data because many would say anninkdotally, they're snapped up very quickly. 0:11:38.880 --> 0:11:40.720 They get great severance and then they move on either 0:11:40.760 --> 0:11:43.280 to be become a talent at Zoom one of your 0:11:43.320 --> 0:11:46.720 new ventures and the transport company, or are they becoming 0:11:46.800 --> 0:11:49.800 entrepreneurs themselves and yet to see any sort of charts 0:11:49.840 --> 0:11:52.319 on new business formation. Are you starting to hear from 0:11:52.360 --> 0:11:55.960 these people getting great severance packages. I know they probably 0:11:55.960 --> 0:11:58.200 want to remain at a company and employed, but if 0:11:58.240 --> 0:11:59.760 they are let go, are they willing to take on 0:11:59.800 --> 0:12:02.079 a can build something? You know, It's it's a huge 0:12:02.080 --> 0:12:05.600 point and I think it's definitely fueling a lot of 0:12:05.600 --> 0:12:08.360 the entrepreneurial activity because what you have is, you know, 0:12:08.440 --> 0:12:10.120 as you said, folks who maybe have a little bit 0:12:10.120 --> 0:12:12.679 of money, they've gotten a severance, they've been doing very 0:12:12.720 --> 0:12:14.880 well over the last few years working for these larger 0:12:14.920 --> 0:12:18.120 companies and in some cases, you know, the Silicon Valley 0:12:18.320 --> 0:12:21.719 spree and what's happening in San Francisco has always I mean, 0:12:22.280 --> 0:12:24.240 so many people that you meet here they have another 0:12:24.280 --> 0:12:26.840 startup going on on the side, right, So there are 0:12:26.840 --> 0:12:28.480 people who are and so if you think about, like 0:12:28.520 --> 0:12:30.680 who's going to get laid off some of these people, 0:12:30.800 --> 0:12:33.040 maybe you were not rated as the best employees by 0:12:33.040 --> 0:12:35.760 their big company employers because they were giving half of 0:12:35.800 --> 0:12:37.520 their time to the company and half of the time 0:12:37.520 --> 0:12:40.120 to their startup. So now you say, well, I've got 0:12:40.160 --> 0:12:42.360 a little extra cash, I've got all my day free 0:12:42.360 --> 0:12:45.800 to work on my startup. Not a bad situation. Is 0:12:45.840 --> 0:12:49.480 there an element that you're seeing this worldwide? This is 0:12:49.600 --> 0:12:52.760 very much where are the talent that you're currently hiring 0:12:52.920 --> 0:12:55.959 and seeing hiring from? Do people want to remain remote? 0:12:55.960 --> 0:12:57.920 Are you seeing some of your startups that are SF 0:12:58.000 --> 0:13:00.920 based hiring talent for being let go in Austin Miami? 0:13:01.240 --> 0:13:03.160 Where is this all going on at the moment? It 0:13:03.320 --> 0:13:05.080 is much more remote than what it used to be. 0:13:05.240 --> 0:13:06.600 You know, we we've been in you know, I've been 0:13:06.640 --> 0:13:10.640 in Silicon Valley since the nineties and it was definitely 0:13:10.679 --> 0:13:14.319 you know, you'd set up a facility, everybody would come there. Um, 0:13:14.360 --> 0:13:16.680 you even had, of course, you know, companies like Facebook 0:13:16.679 --> 0:13:19.640 where they were relocated by their investors to Silicon Valley 0:13:19.679 --> 0:13:22.040 because the story was, oh, yeah, we love you, but 0:13:22.160 --> 0:13:24.679 you can't do it from where you are. It's not 0:13:24.760 --> 0:13:27.319 so much a destination for companies. I think a lot 0:13:27.360 --> 0:13:31.079 of companies are formed here still, and the companies that 0:13:31.120 --> 0:13:33.720 are formed here have done so much more with remote talent, 0:13:33.920 --> 0:13:35.800 and some of it's offshore. More of it now is 0:13:35.800 --> 0:13:39.080 actually on shore, but outside of the area. The conversation 0:13:39.120 --> 0:13:42.600 that Caroline keep having is that across the startup curve, 0:13:43.280 --> 0:13:46.760 the opportunity of three is going to be seed stage, 0:13:46.800 --> 0:13:50.600 earlier stage investments, and actually it's the growth stage funds 0:13:50.720 --> 0:13:52.600 keeping their power to dry even though they raised all 0:13:52.640 --> 0:13:55.360 that capital over the last two years. Is that a 0:13:55.400 --> 0:13:59.240 fair interpretation of where the industry sits. Certainly? I think 0:13:59.280 --> 0:14:01.720 something it ts. You see, we do seed stage primarily, 0:14:01.760 --> 0:14:03.839 and we feel like the markets coming to us because 0:14:03.840 --> 0:14:06.320 they need. Um. Well, the market is coming to us 0:14:06.320 --> 0:14:07.920 in the sense that it's just hard to make money 0:14:07.920 --> 0:14:10.040 at late stage right now. Um, if you have a 0:14:10.080 --> 0:14:12.840 company that was overfunded at too high of evaluation a 0:14:12.880 --> 0:14:15.640 year or two ago. Yes, you can do a down round, 0:14:15.720 --> 0:14:18.560 you can get a better price, but then the employees 0:14:18.600 --> 0:14:21.240 are not happy, so you lose momentum in the business. 0:14:21.320 --> 0:14:24.800 So even though you might normalize or rationalize the pricing 0:14:24.800 --> 0:14:26.840 of the company, that doesn't mean that it's going to 0:14:26.920 --> 0:14:28.760 take off and be successful. So I would hate to 0:14:28.760 --> 0:14:30.760 be writing Hunter million dollar checks right now. I think 0:14:30.760 --> 0:14:34.040 it's it's a difficult time. We write a million dollar 0:14:34.120 --> 0:14:36.640 checks into early companies and you think about something like Zoom. 0:14:36.640 --> 0:14:38.440 There's a photograph which I wish I had with us, 0:14:38.480 --> 0:14:41.720 but photograph of the of the assume founder er qu 0:14:41.920 --> 0:14:45.040 N two engineers in our offices in two thousand eleven. 0:14:45.600 --> 0:14:48.520 That was the company. It was himself and two engineers 0:14:48.520 --> 0:14:53.000 a power point deck. Right, fantastic ambitions. Um, those are 0:14:53.000 --> 0:14:54.840 the kinds of folks that we're funding right now. Tweet 0:14:54.880 --> 0:14:57.400 ask off to the show you when you've done Absolutely yeah, 0:14:57.560 --> 0:15:00.280 and Ginko Bio Works and and Cata they I haven't 0:15:00.280 --> 0:15:03.560 been a one trick plony TSPC managing partner. He's a 0:15:03.600 --> 0:15:06.040 coal spencer green. What joy having him right here in 0:15:06.080 --> 0:15:07.760 the studio with us. Nice tweeting from you had to 0:15:07.760 --> 0:15:10.480 get him on as well, meanwhile, coming up Apple's headset, 0:15:10.760 --> 0:15:13.720 it's going to be controlled by your hands, by your eyes. 0:15:14.080 --> 0:15:16.240 More details on the mixed reality device next, and it's 0:15:16.280 --> 0:15:28.160 price point. Li's a Blien Bug New Day, New Week 0:15:28.160 --> 0:15:30.040 News scoop for one Mark Gum and let's talk about 0:15:30.040 --> 0:15:32.880 new details that are out about the highly anticipated three 0:15:33.000 --> 0:15:36.440 thousand dollar mixed reality headset by Apple. Of course, it's 0:15:36.440 --> 0:15:39.520 according to sources, which boast an eye and a hand 0:15:39.520 --> 0:15:42.760 tracking system that could set the technology pretty much apart 0:15:42.760 --> 0:15:45.440 from rivals. Right, Mark, you've got this new story and 0:15:45.480 --> 0:15:47.840 just tell us about how this one's going to be 0:15:47.840 --> 0:15:50.560 different from the other ones in the market. Yeah, that's 0:15:50.560 --> 0:15:53.040 exactly right. So this is Apple's next big thing. They've 0:15:53.040 --> 0:15:55.120 been working on it for north of seven years. At 0:15:55.120 --> 0:15:59.440 this point. They have well over engineers on the project. 0:15:59.520 --> 0:16:01.480 They're getting ready to unveil it in the next couple 0:16:01.520 --> 0:16:04.040 of months and put on sale later this year. The 0:16:04.080 --> 0:16:06.400 factories are going to start churning them out starting at 0:16:06.400 --> 0:16:08.800 the end of next month in China. But the eye 0:16:08.880 --> 0:16:11.720 in hand control, right, some devices on the market area 0:16:11.720 --> 0:16:14.320 now already can read your eyes and have hand control, 0:16:14.800 --> 0:16:17.400 but with Apple's device, it's the way they work together. 0:16:17.520 --> 0:16:20.000 That makes it so special. If you remember the touch 0:16:20.040 --> 0:16:22.880 screen on the first iPhone, that was a big differentiator, 0:16:22.920 --> 0:16:25.240 the crown on the watch. For this, it's eye in 0:16:25.280 --> 0:16:27.040 hand control. So let me give you an example. The 0:16:27.080 --> 0:16:29.120 way you control the device is you can just look 0:16:29.160 --> 0:16:31.560 at something, whether you want to launch an app, whether 0:16:31.600 --> 0:16:34.400 you want to swipe through a list or toggle a setting. Right, 0:16:34.680 --> 0:16:37.840 you look at it and then you pinch your thumb 0:16:37.840 --> 0:16:40.760 and your index finger together when you're looking at it 0:16:40.800 --> 0:16:43.840 to launch it. Just like on a touch screen you 0:16:43.880 --> 0:16:46.280 tap what you want or on a mouse, you point 0:16:46.320 --> 0:16:48.520 the cursor toward it and then you click. This is 0:16:48.560 --> 0:16:53.520 you look and tap your fingers together. So pretty nifty. 0:16:53.960 --> 0:16:55.280 I guess. The question is how do we get to 0:16:55.320 --> 0:16:57.200 a three thousands of the price point? Right? How does 0:16:57.240 --> 0:17:01.360 this headset differentiates itself from metas quest? The other real 0:17:01.400 --> 0:17:03.200 question I have to you is like, as an iPhone 0:17:03.280 --> 0:17:06.760 user and thinking about emoji or emojis and and emojis 0:17:06.800 --> 0:17:08.640 right where you use the camera to kind of map 0:17:08.680 --> 0:17:11.320 your face and interact with that technology. Is this the 0:17:11.359 --> 0:17:14.639 kind of extension of that. Yes. So in terms of 0:17:14.640 --> 0:17:17.280 the price point, well, it has fourteen cameras, right, you 0:17:17.359 --> 0:17:20.000 have a bunch of cameras outside. You need cameras that 0:17:20.000 --> 0:17:21.760 can look forward, you need cameras that can look up, 0:17:21.760 --> 0:17:24.520 and need cameras that could look down, right down to 0:17:24.560 --> 0:17:26.680 see what your legs look like and what your body 0:17:26.760 --> 0:17:28.960 looks like in order to recreate what you look like 0:17:29.000 --> 0:17:32.600 in virtual reality. For that feature you alluded to in FaceTime, 0:17:32.800 --> 0:17:35.159 there's also cameras and sensors inside the device to be 0:17:35.200 --> 0:17:37.800 able to read where your eyes are looking at. In addition, 0:17:37.840 --> 0:17:40.160 there's two four K displays, right you know the four 0:17:40.240 --> 0:17:42.680 KTV you have maybe in your living room. Well, there's 0:17:42.720 --> 0:17:46.520 two of them, many ones inside of the headset to 0:17:46.720 --> 0:17:50.200 perform virtual reality. The cameras also, in addition to being 0:17:50.240 --> 0:17:52.920 sensors to see what everything looks like, it's a way 0:17:52.960 --> 0:17:56.600 to create augmented reality. Right. Are usually uses clear lenses, 0:17:56.640 --> 0:17:58.679 but in this case it's going to use cameras to 0:17:58.760 --> 0:18:01.119 create sort of a fake of a r VR mixed 0:18:01.160 --> 0:18:05.200 reality reality effect. It's a pretty cool and practice, I'm told. 0:18:05.440 --> 0:18:07.760 The other interesting thing to your point is you're going 0:18:07.800 --> 0:18:09.520 to be able to replicate a lot of the features 0:18:09.520 --> 0:18:12.280 of an iPad on here, right, So you'll get Safari 0:18:12.320 --> 0:18:16.960 mail maps, calendar, health tracking, even there's also a feature 0:18:16.960 --> 0:18:18.640 where you can hook it up to your Mac and 0:18:18.800 --> 0:18:21.679 you sort of can control your Mac and then you 0:18:21.720 --> 0:18:23.919 can see what your Mac stream looks like in virtual 0:18:23.960 --> 0:18:28.640 reality while using your keyboard, mouse, and track pad. Mark 0:18:28.840 --> 0:18:31.720 very briefly, how much is this moving the needle for 0:18:31.800 --> 0:18:36.000 Apple valuation perspective from an analyst perspective to people ultimately 0:18:36.000 --> 0:18:38.520 think this is gonna be a game change for them. 0:18:38.560 --> 0:18:40.199 So in year one they want to sell about a 0:18:40.200 --> 0:18:43.399 million units at three thousand dollars, right, and I believe 0:18:43.480 --> 0:18:46.200 that's about three billion dollars. So in terms of overall 0:18:46.240 --> 0:18:48.679 revenue for Apple, it's not going to move the needle, 0:18:49.119 --> 0:18:51.760 uh in the short term, But long term this could 0:18:51.760 --> 0:18:54.680 be a multi hundred billion dollar market and Apple, given 0:18:54.680 --> 0:18:57.040 the layoffs at Meta and the hardware changes that Google 0:18:57.040 --> 0:18:59.320 and Amazon as well, they seem to have a clear 0:18:59.400 --> 0:19:02.600 runway not only VR but other hardware products in the future. 0:19:03.240 --> 0:19:05.959 Right Bloomberg s Mark German another day, another big scoop, 0:19:06.280 --> 0:19:18.159 As Carrow said, welcome back to Bloomberg Technology right here 0:19:18.160 --> 0:19:20.240 from San Francisco and Caroline High and I med lovel 0:19:20.359 --> 0:19:22.800 and it is a pleasure to have you back out West, 0:19:22.840 --> 0:19:25.600 back in the Bay Area. We've got to talk about 0:19:25.600 --> 0:19:27.600 social media, and we've got to talk about regulation. Has 0:19:27.600 --> 0:19:29.399 been a big theme in the show. For a number 0:19:29.440 --> 0:19:32.560 of days now. The federal government and several states have 0:19:32.680 --> 0:19:37.080 raised cybersecurity concerns as you know carry around Chinese own TikTok, 0:19:37.320 --> 0:19:40.119 and as we reported last week, dozens of U S 0:19:40.119 --> 0:19:43.840 schools and US universities had moved to ban the app 0:19:43.880 --> 0:19:47.400 from campuses, hoping to prevent it from spying on students, 0:19:47.440 --> 0:19:52.520 asserting the Chinese government could access the private information of 0:19:52.560 --> 0:19:55.240 its users. Let's bring in Mickey Bowland to talk about 0:19:55.240 --> 0:19:59.320 the potential risks associated with the Actually is global cybersecurity 0:19:59.440 --> 0:20:04.160 architect and security evangelist over at Checkpoint Software Technologies, which 0:20:04.200 --> 0:20:08.440 is a cybersecurity solutions provider. I mean you heard the backstory. 0:20:08.880 --> 0:20:10.840