Speaker 1: From Marhart where Innovation of Money and Power Collie in
Speaker 1: Silicon Valley, NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 3: I'm Caroline Heinde at Bloomberg's worldad quarters in New York,
Speaker 3: Alaned Ludlow in San Francisco.
Speaker 4: This Bloomberg Technology coming up.
Speaker 3: We sit down with the CEO of Lift to run
Speaker 3: through the company's results. Break down that all important clerical
Speaker 3: error that led to at one point a sixty seven
Speaker 3: percent surge in its shares.
Speaker 4: Class.
Speaker 5: Will be joined by Open Ai chair and former Salesforce
Speaker 5: CEO Brett Taylor as he raises one hundred and ten
Speaker 5: million dollars to bring AI agents to business.
Speaker 3: And fighting talk from Mark Zuckerberg as he personally reviews
Speaker 3: Apple's Vision.
Speaker 6: Pro whereas takeaways not good.
Speaker 3: We'll discuss that and so much more throughout this hour,
Speaker 3: but first let's check in on these markets. Uber giving
Speaker 3: money back to the investor base. Remember they had a
Speaker 3: really strong quarter, they posted it last week, and then
Speaker 3: today after an investor meeting, they're giving us a share buyback.
Speaker 3: We're driving that stock up almost twelve percent on the
Speaker 3: back of that, as they managed to be bringing profitability
Speaker 3: and therefore capital back to the investor base. Let's have
Speaker 3: a look at what's happening though with the rival Lift.
Speaker 3: I mean, what an extraordinary day we had yesterday earning's
Speaker 3: posted but an extra zero crept into the margin forecast
Speaker 3: five hundred bits. That was clerical error, they called it.
Speaker 3: We rose up to sixty seven percent in after ours trading.
Speaker 3: We then sunk back down. Now we are still trading
Speaker 3: higher on Lift for that five hundred margin becomes a
Speaker 3: fifty margin. Overall, we've got to dig into the growth
Speaker 3: of this business and actually how they're giving back to
Speaker 3: the consumer. A key conversation that we're about to have now.
Speaker 5: Welcome to our TV and radio audiences worldwide. Joining us
Speaker 5: now on the company's fourth quarter is Lift CEO David
Speaker 5: Risher and David a clerical error?
Speaker 4: What happened?
Speaker 2: Well, look, first of all, it's on me. There are
Speaker 2: a lot of eyes on this press release. But at
Speaker 2: the end of the day, my bad. But look, I
Speaker 2: don't want it to take anything away from the butt
Speaker 2: kicking performance that the business did thanks to all of
Speaker 2: our employees and thanks to millions of drivers. I mean, look,
Speaker 2: we had our financially strongest quota we've ever had, and
Speaker 2: I'm super excited about.
Speaker 5: To be clear, this was simply a mistake, human error.
Speaker 5: The stock rose as much as six seven percent in
Speaker 5: after hours. As Caroline pointed out, it's significantly hard this morning,
Speaker 5: and we can talk about the performance in the quarter
Speaker 5: gone and the performance in the current period. This may
Speaker 5: sound bizarre to you, but I think it's a real question.
Speaker 5: Did you guys use AI to write that press release seriously?
Speaker 5: Or is this as simple as you are? Calling it
Speaker 5: a clerical error?
Speaker 6: Now it was a clerical error.
Speaker 2: Yeah, Now we're not at the point where press releases
Speaker 2: can be written by at least not financial pressure releases.
Speaker 6: No way.
Speaker 3: I hate to ask it because real people's jobs are
Speaker 3: now on the line, I'm sure, David, and I want
Speaker 3: to ask, is a cfo's role safe? Is this going
Speaker 3: to have repercussions from across your membership and employee.
Speaker 2: Base the cfo's or is one hundred percent safe? One
Speaker 2: hundred percent safe? Look, she and the team are taking
Speaker 2: this incredibly seriously, and you have to understand. I mean,
Speaker 2: we go through hours and hours of checking and double
Speaker 2: checking before something like this goes. It's an unacceptable error. Again, Ultimately,
Speaker 2: it's on me. I'm the CEO.
Speaker 6: Buck stops with me, but the team is taking it.
Speaker 3: Super seriously, and I know that you want to be
Speaker 3: talking ultimately about how you're seeing growth in the business.
Speaker 3: And I'm sure that that's something that in a way,
Speaker 3: the salt in the wound is even greater because you
Speaker 3: had a great story to tell and it got marred
Speaker 3: by this particular error. But people are going back and
Speaker 3: saying that you've never seen anything like.
Speaker 4: This in history.
Speaker 3: David, what would you do differently in the next stannings?
Speaker 3: How can you make sure that it investors feel confident
Speaker 3: in the statements that you put out to them in
Speaker 3: the foreseeable future.
Speaker 2: Yeah, I mean, look, I would look at our record
Speaker 2: and look at the growth, look at the fundamentals of
Speaker 2: the financials. And to be very clear, this was it
Speaker 2: was a bad error, but it was one zero in
Speaker 2: a press release and you know a lot of other pages,
Speaker 2: and of course we corrected it within seconds of finding it.
Speaker 2: So I think, you know, like with any mistake, I
Speaker 2: think it's not so much about the mistake itself, it's
Speaker 2: also about how you correct for it. And we've corrected
Speaker 2: for it obviously in the moment putting out new materials,
Speaker 2: but also doing a really deep process type including having
Speaker 2: our own internal ardit team, a separate team look and
Speaker 2: figure out how we can make sure we never make
Speaker 2: a mistake.
Speaker 6: Like this again.
Speaker 5: Okay, if you're listening on Bloomberg Television and radio worldwide,
Speaker 5: we're joined by the CEO of Lift, David Risher, and
Speaker 5: I go back to the current stock performance. You are
Speaker 5: still up thirty two percent in the session, and there
Speaker 5: are so many stories within that, but I zero in
Speaker 5: on the gross booking outlook strong.
Speaker 4: Yeah, what is the story there? For me?
Speaker 5: I'm trying to make sense of the gig economy more broadly,
Speaker 5: on both the demand and supply side. But if you
Speaker 5: look at the consumer, you look at corporates spending, you
Speaker 5: guys are adding to this narrative that things are quite
Speaker 5: rosy out there.
Speaker 4: And when does that stop? How long does it last?
Speaker 2: Well, look, I don't know when it stops. That's the
Speaker 2: shricky thing to predict. But here's what I can tell you.
Speaker 2: We've had now four quarters of growth, increasing growth, and
Speaker 2: we had our biggest growth year last year of our
Speaker 2: company's history. And by the way, we're talking about billions
Speaker 2: of dollars, by the way, billions of dollars that end
Speaker 2: up going in drivers pockets. So you can see this
Speaker 2: is a really important part of the economy because it's
Speaker 2: a really important part of people's lives.
Speaker 6: When people take the seven.
Speaker 2: Hundred million trips they took last year on lift, they're
Speaker 2: going to see their parents, they're going to a tailor
Speaker 2: swift concert, they're going to work every day, they're coming
Speaker 2: home from work, they're going to see their doctor.
Speaker 6: This is an important part of people's lives.
Speaker 2: And then when drivers are driving, they're earning to save
Speaker 2: for a house, they're earned to save for tuition. They're
Speaker 2: earning because maybe they lost a W two job and
Speaker 2: they're three weeks away from picking up a new job
Speaker 2: and they need something to bridge them. So it doesn't
Speaker 2: surprise me that the gig economy is becoming increasingly es
Speaker 2: central part of people's lives and people's economic lives.
Speaker 5: Your bigger competitor, Uber succeeded by adding new products to
Speaker 5: the app, diversifying even within ride hailing, and it proved
Speaker 5: that its algorithm is working in matching riders with efficient
Speaker 5: routes and drivers. Do you feel that you're going to
Speaker 5: be competitive in those domains.
Speaker 4: I do.
Speaker 6: I do.
Speaker 2: Look, our focus is a huge strength. We are one
Speaker 2: hundred percent focused on ride share. You know, just yesterday
Speaker 2: we launched women plus Connect that allows a woman rider
Speaker 2: to pick a woman driver all across the United States
Speaker 2: two hundred and seventy markets. It's been a huge success
Speaker 2: over the first six months when we've been kind of
Speaker 2: trialing it. We launched a new driver standard that allows
Speaker 2: drivers to get a guarantee that they'll never earn less
Speaker 2: than seventy percent of what rider pays them after us
Speaker 2: some fees. So, you know, this is the sort of
Speaker 2: innovation that we can do because we're focused on ride share.
Speaker 2: And look, I expect Uber to do pretty well. I
Speaker 2: think we'll do pretty well too. I think this is
Speaker 2: a really strong sector.
Speaker 3: I'm going to go back to the drivers, David, because
Speaker 3: what's interesting on this day is there is strike action.
Speaker 3: There is on Valentine's Day, whether you're going to be
Speaker 3: flying to Miami, where they're going to be flying to Chicago,
Speaker 3: there might well be issues trying to get a new
Speaker 3: but or indeed a lift. And also in the UK
Speaker 3: as well, I'm interested as to what's happening when you
Speaker 3: are offering seventy percent guarantee, why still do they want
Speaker 3: to demand more even if you say, look, i'm giving
Speaker 3: you flexibility.
Speaker 2: Yeah, I mean, first on the strike itself, Carolyn, It's
Speaker 2: been in the works for weeks, you know, so it
Speaker 2: predates the announcement of this new seventy percent guarantee. If
Speaker 2: you look at what the drivers are asking for, and
Speaker 2: I think these are reasonable things to bring up. They
Speaker 2: want more transparency on their pay. We've given it to them.
Speaker 2: We give them a very very clear weekly breakdown that says,
Speaker 2: this is how much riders paid you, this is how
Speaker 2: much we took, this is how much you get.
Speaker 6: They've asked for a guarantee right so that they don't,
Speaker 6: you know, so that there's a floor to their earnings.
Speaker 2: We've given them that too. They've asked for better visibility
Speaker 2: and deactivation. You know, if you, as a writer raise
Speaker 2: a complaint about about a driver, we.
Speaker 6: Have a whole process we go through, and drivers, of course.
Speaker 2: Don't want to be off the platform, particular if they
Speaker 2: think it was an unfair accusation. And now we cover
Speaker 2: something like seventy percent of those in less than twenty
Speaker 2: four hours. And there's a new one click button that
Speaker 2: allows drivers to sort of appeal the deactivation. So what
Speaker 2: we're doing is we're focused on drivers because we're obsessed
Speaker 2: over customers. That's kind of our thing, and by doing that,
Speaker 2: we think we can address a lot of their issues
Speaker 2: that they're raising.
Speaker 3: JP Morgan actually completely in line with some of the
Speaker 3: words that you use there. The customer obsession is something
Speaker 3: they point out. The marketplace health is something they see
Speaker 3: to continuing to improve on supply tailwinds.
Speaker 6: So really, drivers are not your.
Speaker 4: Issue in the moment.
Speaker 3: Compared to JP Morgan, another analyst, Opram from Nathan Nathanson,
Speaker 3: those saying ultimately are at the mercy of Uber when
Speaker 3: it comes to pricing power and take rates. Do you
Speaker 3: feel that way that you're in the mercy of Uber
Speaker 3: in some way?
Speaker 2: No, I mean it's a competitive marketplace, so I think,
Speaker 2: you know, to a certain extent there at our mercy,
Speaker 2: like we're at theirs, right, we can't do things that
Speaker 2: are completely different and expect to have, you know, kind
Speaker 2: of reasonable results. But at the same time, you know,
Speaker 2: for example, let's again look at this driver Earn's guarantee.
Speaker 2: That's a that's a commitment we've made. It's a leadership
Speaker 2: move we've made. You know, we'll see whether Uber followers
Speaker 2: or not. But that's an area where I would say
Speaker 2: they're going to want to look pretty closely at what
Speaker 2: we're doing and decide whether they want to follow us.
Speaker 2: But I think it should be honest. I think this
Speaker 2: is a healthy marketplace. It's got two good players in
Speaker 2: a Huber and Left, and we're both doing a good job.
Speaker 2: I like our strategy better because I think we're more
Speaker 2: focused on writers and drivers and I think that's a
Speaker 2: real strength.
Speaker 6: But you know, they're going at a versification thing. We'll
Speaker 6: see if that works from them.
Speaker 5: For our Bloomberg television and radio audience, we're speaking with
Speaker 5: LIFT CEO David Risher. And David as you know, we
Speaker 5: always go to our audience and ask what would you
Speaker 5: want to know from from David Risher? And it's the
Speaker 5: same question every time. Is LIFT and acquisition target? And
Speaker 5: many put people put forward hypotheses about the type of
Speaker 5: business you know, maybe an auto maker, maybe another convenience app.
Speaker 5: But where's your head at with that?
Speaker 6: You call?
Speaker 4: With your earnings performance?
Speaker 5: But kicking yeah, but there are still free cash flow questions.
Speaker 5: There are still scale questions with lift.
Speaker 6: Yeah, well let.
Speaker 2: Me talk about those and then and then get to
Speaker 2: the court of the question.
Speaker 6: Look, we were free cash flow.
Speaker 2: Positor for the second time in our company's history this quarter,
Speaker 2: and we've committed to investors will be free cashul A
Speaker 2: positive for the year of twenty twenty four, so you know,
Speaker 2: and we have one point seven million dollars in the bank.
Speaker 2: So from a cash perspective, from a pretty good shape.
Speaker 2: From demand perspective, we're in good shape, highest demand ever.
Speaker 2: From a supply perspective, we're in good shape, highest drivers
Speaker 2: hours since we've had since twenty nineteen, so you know,
Speaker 2: from a basic core and then again you think about it,
Speaker 2: seven hundred million rides in a year. I mean, think
Speaker 2: about a Delta air Lines that might do a couple thousand,
Speaker 2: maybe three or four thousand takeoff and landings a day,
Speaker 2: whereas we do, let's get two million a day. So
Speaker 2: our scale isn't really an issue for us. We've got
Speaker 2: pretty good scale. Ask the acquisition thing, you know, just
Speaker 2: like people ask the same question, I always give the
Speaker 2: same answer.
Speaker 6: I mean, our phone, you know, will pick up the.
Speaker 2: Phone if someone calls because that's the deal, but it's
Speaker 2: not our focus.
Speaker 6: Our focus is.
Speaker 5: Customers, right Lifts CEO David Risher on set here in
Speaker 5: San Francisco.
Speaker 4: Thank you so much for your time.
Speaker 6: For sure, thanks.
Speaker 3: I enjoyed it, Caroline, such a deep conversation. So thousands
Speaker 3: of US ride haaling workers. They're striking at major US
Speaker 3: airports today, also in the UK. In fact, what are
Speaker 3: they demanding been to pay benefits and in what organizers
Speaker 3: say is their largest strike yet. However, Uber has actually said, look,
Speaker 3: it won't have much impact on Valentine's Day operations. Joining
Speaker 3: us now to dig into the movement of Uber and
Speaker 3: Lyft and more notably, what's happening in the rest of
Speaker 3: the ending space. Bloom Meg's Natalie Lang is here mandep
Speaker 3: Seeing of bloue Meg Intelligence. Natalie, I start with you
Speaker 3: this sort of pressure coming from ultimately the supply side
Speaker 3: and then worry about regulatory changes. Is it something that
Speaker 3: companies and investors should be worried about?
Speaker 7: Still, It's definitely and overhang that analysts have been talking about.
Speaker 7: There's different laws that are coming up this year, such
Speaker 7: as the Supreme Court decision in California over Prop twenty two,
Speaker 7: which guarantee minimum pay for drivers. In Minnesota, people are
Speaker 7: fighting for better pay standards, and so it's definitely something
Speaker 7: that would add costs for the company. But so far,
Speaker 7: whenever regulatory changes have been made, we see the company
Speaker 7: trying to pass that cost, either maybe from the driver side,
Speaker 7: or passing that cost to customers by adding a fee,
Speaker 7: like in New York they added a courier fee after
Speaker 7: a minimum wage was implemented, So in a way, the
Speaker 7: business has a way to sort of mitigate.
Speaker 5: These Mandy, this has been a pretty astonishing week in
Speaker 5: the world of gig economy, in the world of convenience apps.
Speaker 4: Call it what you will.
Speaker 5: I guess let's go back in and zero on the
Speaker 5: Uber investor sweetener. It's an interesting one, but it's built
Speaker 5: on the back of a profitable year, and if you
Speaker 5: take that in aggregate with what David Risher of Lyft
Speaker 5: just told us, the demand side of this economy is
Speaker 5: holding up.
Speaker 8: Yeah.
Speaker 9: I mean, look, I've always felt these companies generate, you know,
Speaker 9: more value than the profitability that they have shown so far,
Speaker 9: and in this case, I think Uber has shown that
Speaker 9: it is working towards this vision of you know, becoming
Speaker 9: a super app where if you're thinking about transportation, you
Speaker 9: go to Uber, whether it's right sharing, delivery, or even taxis.
Speaker 9: I mean, we have come a full circle, you know,
Speaker 9: in terms of disrupting Taxis to having Taxis on Uber's platform.
Speaker 9: And I think scale and operating efficiency is what drives
Speaker 9: a mode in this business, and I think Uber is
Speaker 9: clearly demonstrating that.
Speaker 4: Okay, let's talk about Airbnb.
Speaker 5: The company gives a forecast on sales to the current
Speaker 5: quarter that even at the low end, man deep is
Speaker 5: pretty good and then or sorry, Natalie, and then tells investors, actually,
Speaker 5: things aren't going to be that good, and then tells
Speaker 5: investors We're going to be different company in the future
Speaker 5: that does other things with the parties and AI summarize
Speaker 5: that story for us.
Speaker 7: Right. A lot of this is what Brian Chesky has
Speaker 7: talked about being at an inflection point at the company
Speaker 7: that sort of the post pandemic travel trends, the post
Speaker 7: pandemic boom has sort of faded, and that's kind of
Speaker 7: shown up in the financial performance. Growth isn't as strong
Speaker 7: as coming out of Omicron last year, and at the
Speaker 7: same time they've sort of cleaned up their apps and
Speaker 7: services a bit kind of encouraging more hosts to bring
Speaker 7: down some of the cleaning fees and encouraging more people
Speaker 7: to host, getting more users on the platform to make
Speaker 7: it more reliable. So he feels this is they are
Speaker 7: at an inflection point to be able to expand beyond
Speaker 7: that core hosting service, going back to before the pandemic,
Speaker 7: more ambitious endeavors.
Speaker 5: Okay, bloomberg'st Nasi lung Man Deep seeing of Bloomberg Intelligence,
Speaker 5: great analysis of a big week in the gig economy
Speaker 5: are coming up here on the program. We're going to
Speaker 5: get into Acamai's fourth quarter numbers with their CEO, Tom Layton.
Speaker 4: Caroline more stocks to watch.
Speaker 3: Yeah, Instacart under pressure as we were just looking at
Speaker 3: a moment ago. Now this is as it falls on
Speaker 3: its fourth.
Speaker 4: Quarter revenue miss.
Speaker 3: They're also cutting jobs at the company, restructuring. Heading pretty
Speaker 3: much at a pivotal moment for this particular company. We've
Speaker 3: seen the share price under pressure. As you can see
Speaker 3: over interur day it's almost down some ten percent. Mark
Speaker 3: Kelly of rit steph for example, saying it's a mixed
Speaker 3: fourth quarter results, a miss on the top line, but
Speaker 3: better gross transaction value.
Speaker 4: And a bit dart.
Speaker 3: But this is a company that's once again having to
Speaker 3: belt titan as they cut costs, and that means people
Speaker 3: from New York, from San Francisco. This is Blomberg Technology.
Speaker 3: Let's just take a look at Achami shares at the
Speaker 3: moment under pressure. This is after the company, the infrastructure
Speaker 3: software company reported fourth quarter results and look, it was
Speaker 3: relatively mixed is what the street is interpreting. Maybe a
Speaker 3: little bit cool and then expected an injusted and things
Speaker 3: for share.
Speaker 6: They did indeed beat some expectations. We're going to walk
Speaker 6: through the numbers.
Speaker 3: CEO Tom Naton is with us on piece to say,
Speaker 3: and just getting back to the mixed results. Weakness in
Speaker 3: core content delivery network that part of the business. What
Speaker 3: drove that weakness? Is there going to be some recovery, Tom.
Speaker 10: Yeah, you know, we're the largest content delivery provider by
Speaker 10: far and very important business for us. But today most
Speaker 10: of our revenue is now security performing very well, growing
Speaker 10: in the mid teens.
Speaker 1: And compute, which is a really.
Speaker 10: Exciting area for US, did very well, reached half a
Speaker 10: billion dollars last year with strong growth forecasted for this year.
Speaker 10: So delivery important, great business market leader by far.
Speaker 1: You know, pricing pressure there.
Speaker 10: It's a business we've been in really created twenty five
Speaker 10: years ago, so there is some pricing pressure there. But
Speaker 10: the exciting I think things about Akamai would be the
Speaker 10: security business and the compute business, which is now approaching
Speaker 10: about two thirds of our revenue.
Speaker 5: So the compute business is posting pretty solid top line growth.
Speaker 5: But what are we talking about that on the market
Speaker 5: for compute. Who are the customers you're serving and what
Speaker 5: is it that you offer?
Speaker 10: Yeah, the compute marketplace is enormous, you know today it's
Speaker 10: well north of one hundred billion dollars and growing rapidly.
Speaker 10: And what Akamai is doing is bringing compute support for VMS,
Speaker 10: for containers, for Kubernetes to.
Speaker 1: The edge and really the edge.
Speaker 7: You know.
Speaker 10: Our goal is by the end of this year to
Speaker 10: be supporting compute full stack compute in one hundred cities
Speaker 10: around the world, which nobody else does today, and that
Speaker 10: will give us a better performance, better scalability, and also
Speaker 10: because we can take advantage of our existing delivery platform,
Speaker 10: which is in four thousand locations, better economics so that
Speaker 10: our customers can get better performing compute for their applications
Speaker 10: at a lower price point, and.
Speaker 5: Structurally, Tom, when you look about your business, where are
Speaker 5: you growing the most? Internally, we've talked about this idea
Speaker 5: that companies have had to reduce cost and then reallocate
Speaker 5: either talents or simply dollars because there are different speeds
Speaker 5: happening within their business lines. That's exactly what's happening with you,
Speaker 5: and I wondered how you've responded to that.
Speaker 10: Yes, so we have shifted a lot of the resources
Speaker 10: an investment from the delivery side of the house into
Speaker 10: compute and also security, and so you see that reflected
Speaker 10: our numbers with the very strong growth in security and compute,
Speaker 10: very good profitability.
Speaker 1: And we've been able to do that.
Speaker 10: Investment because we have shifted a lot of resources from
Speaker 10: the delivery side.
Speaker 1: Also, we're now big.
Speaker 10: Users of our own compute platform for our own applications
Speaker 10: and that is saving us a lot of money which
Speaker 10: we then plow back into development of new capabilities to
Speaker 10: drive future growth.
Speaker 3: It's interesting that some analysts note that the Bears are
Speaker 3: going to fixate on inline fourth quarter revenues shaping up
Speaker 3: a surprise as you mentioned with the compute beat, but
Speaker 3: ultimately the offset in the delivery and they seem to say,
Speaker 3: this is elusiveness of delivery stability. Can you guide us
Speaker 3: as to when and where we will start to see
Speaker 3: ultimately stability. You talk about the pricing pressure, but what
Speaker 3: about the traffic load tom.
Speaker 10: Traffic growth is a little bit higher this year than
Speaker 10: it was last year, but still below historical pre pandemic norms.
Speaker 10: And of course there's you know, continued price pressure, and
Speaker 10: we're being more selective in the deals that we take.
Speaker 10: So we have been you know, not taking on some
Speaker 10: of the you know, the contracts and opportun unities there
Speaker 10: where it's less profitable.
Speaker 1: Others you know, can do that.
Speaker 10: That helps our profitability and helps us move more investment
Speaker 10: into security and compute, and so that's driving a little
Speaker 10: of what you see with you know, the revenue on
Speaker 10: the delivery side declining and the single digits. And really,
Speaker 10: you know, our focus is on where we're doing Security,
Speaker 10: which is a bigger product line growing in the mid teens,
Speaker 10: and Compute, which has enormous potential growing at over twenty percent.
Speaker 10: So you'll see us continue to do that, and I
Speaker 10: think the focus really shouldn't be on delivery, and in fact,
Speaker 10: as a result of the continued shift into security and
Speaker 10: compute for our revenue. You know, this year, our guidance
Speaker 10: is they'll be accelerated overall top line growth for Akamai
Speaker 10: and continued strong bottom line growth.
Speaker 3: We'll see when the ship I starts to fact to
Speaker 3: that in a little bit more on the day, But
Speaker 3: for now, we thank you so much. Tom Nathan has
Speaker 3: always for joining us the CEO of Akamai.
Speaker 6: Let's check in on these markets.
Speaker 3: Book at airbnbed have seen or run up in their stock.
Speaker 6: Maybe there's a little bit of profit taking.
Speaker 3: Maybe this is also the fact that they are still
Speaker 3: posting growth, but they're showing maybe a little bit of
Speaker 3: a downdraft or a cooling in momentum when it comes
Speaker 3: to overall room rates growth, as was pointing out by Bi.
Speaker 3: But what's notable is this as a company that's really
Speaker 3: starting to rely on AI, particularly when it comes to
Speaker 3: customer service. They're investing in particular there to improve the
Speaker 3: customer experience, and that's what we're going to be digging
Speaker 3: into a little bit more now.
Speaker 5: That was the Brian Chesky message, transforming customer service using AI.
Speaker 5: What about transforming customer service with conversational AI. That's the
Speaker 5: promise of Sierra. It's the latest venture from former Salesforce
Speaker 5: co CEO Brett Taylor, of course, also the chair of
Speaker 5: Open Ai and former Google employee Clay Before Sierra is
Speaker 5: an AI agent which mirrors the nuances of human communication,
Speaker 5: but it's also empowered to take action to solve customers problems.
Speaker 5: Delighted to say that Sierra's co founder is Breton Clay
Speaker 5: are here with us in San Francisco.
Speaker 4: So Brett's start with you. I've been wondering a little
Speaker 4: while what you've been up to.
Speaker 5: You raise some money and stealth for Sierra. You've come
Speaker 5: out as stealth, and you want to do something that's
Speaker 5: been talked about a bit in recent months, introduce an
Speaker 5: AI agent.
Speaker 8: Yeah, we're really excited about this. You know, when you
Speaker 8: leave your job, especially jobs like we have, you want
Speaker 8: to go towards a big vision and from Clay in
Speaker 8: our perspective, conversational AI, I think is perhaps the most
Speaker 8: important consumer technology trend of a generation when you look
Speaker 8: at it. The advent of the Internet and how it
Speaker 8: impacted company's ability to interact with their customers digitally, the
Speaker 8: birth of the smartphone, we think conversational AI is on
Speaker 8: par with those, and candidly, I think every company is
Speaker 8: going to need their own AI agent. That's going to
Speaker 8: be the way you interact with your customers, and I
Speaker 8: think it will be as important as your mobile app,
Speaker 8: as important as your website in just a few years.
Speaker 5: Clay you raise some money, will two separate rounds, but essentially,
Speaker 5: I want to know how you guys got together. Interesting
Speaker 5: careers you've both had so far, whose idea.
Speaker 4: Was it and why are you working together on this company.
Speaker 11: Brett and I have actually known each other for almost
Speaker 11: twenty years. We met in our early days at Google,
Speaker 11: where we started our careers and have kept in touch
Speaker 11: ever since. And Brett and I both saw this wave
Speaker 11: of technology change and we're so excited about the potential
Speaker 11: in large language models and recent advances in AI and
Speaker 11: got together just over a year ago over lunch actually
Speaker 11: and kind of hatched early plans there. And I think,
Speaker 11: like with most things we do, the idea came from
Speaker 11: us both, and we worked over the past almost eleven
Speaker 11: months to really discover and refine it, including with a
Speaker 11: number of what we call design partners early pilot customers
Speaker 11: who have helped us shape the platform and the idea.
Speaker 3: Clay talk about that refining hallucinations. What are the key
Speaker 3: concern and maybe limitations in the here and the nower
Speaker 3: of generative AI more broadly and chat bolts in a
Speaker 3: generative AI form. What are you seeing Clay about improvements
Speaker 3: in that?
Speaker 1: Well, first of.
Speaker 11: All, I think what we've built with Sierra and conversational
Speaker 11: AI goes far beyond what I think most people will
Speaker 11: have experienced with chatbots. I think if you pulled Bloomberg
Speaker 11: readers and watchers, do they like chatbots that you use
Speaker 11: embedded on websites today? Probably zero of one hundred would
Speaker 11: say yes. But if you pulled those same hundred people
Speaker 11: and asked do you like talking with chat GPT, maybe
Speaker 11: one hundred would say yes.
Speaker 1: And so the technology.
Speaker 11: Underlying Sierra and our AI agents really fundamentally didn't exist
Speaker 11: much more than a year ago. And so we've built
Speaker 11: Sierra and the platform on this fundamentally new technology. As
Speaker 11: for hallucinations, it's a really important issue. And as you know,
Speaker 11: AI is fundamentally non deterministic and using a large language
Speaker 11: model on its own, you can't guarantee what it will output.
Speaker 4: So we've taken a multi.
Speaker 11: Layered approach to security, starting with very strict security protocols
Speaker 11: around whenever our AI agents are taking action and using systems,
Speaker 11: those are done completely deterministically. We also imbue our agents
Speaker 11: with knowledge invited to us by our customers, and have
Speaker 11: multiple layers of supervision and oversight, including advanced auditing and
Speaker 11: inspection tools for our customers to use.
Speaker 3: It's interesting that Brett, we just had Clay reference chat GPT,
Speaker 3: and of course you are the chair of the board
Speaker 3: of open Ai.
Speaker 4: I'm really interested in.
Speaker 3: When you're building another generative AI company that might well
Speaker 3: also be seen as a competitor, how you think about
Speaker 3: that from an ethical perspective.
Speaker 8: Well, first, I really don't think open ai and Sierra
Speaker 8: are competitive. I think I think we'll look back at
Speaker 8: this here and it would be sort of like saying
Speaker 8: you're an Internet company today. It doesn't make sense because
Speaker 8: the Internet permeates every business and every decision we make,
Speaker 8: and I think AI will have a similar impact, and
Speaker 8: we exist at a sort of a different layer of
Speaker 8: the stack where customers of open ai, in addition to
Speaker 8: a number of other foundation models, and obviously at open
Speaker 8: I operated more of a governance role not an operational role,
Speaker 8: and certainly if there's ever an opportunity for conflict, I'd
Speaker 8: simply recuse myself. And I can say I'm really grateful
Speaker 8: to be a part of Opening Eye. I joined that
Speaker 8: board and a story that you covered extensively, and I
Speaker 8: think the mission is more important than ever before, and
Speaker 8: I'm grateful to be a part of that mission.
Speaker 5: Clay, one of the things I've learned in my reporting
Speaker 5: of open ai is that the cap table is complicated
Speaker 5: and important, but actually access to compute and your strategic
Speaker 5: partners are equally as important, if not more. What is
Speaker 5: Sierra done in its access to AI accelerators on that
Speaker 5: end of the spectrum, but also what are your relationships
Speaker 5: with the hyperscalers and your talent base as well well.
Speaker 11: First of all, the technology approach that we use to
Speaker 11: building SERRA agents is what's called an autonomous AI agent architecture,
Speaker 11: and what we do is, rather than relying on a
Speaker 11: single model, any action that the agent takes might rely
Speaker 11: on five or six different models for different tasks, reasoning,
Speaker 11: decision planning, generating responses and more, and so we actually
Speaker 11: use a constellation of models. We currently work with open
Speaker 11: AIY we work with Azure, Cognitive Services and others on
Speaker 11: our cloud infrastructure. In our model providers, we generally rely
Speaker 11: on them to provision and provide the underlying hardware that
Speaker 11: we scale through. So we're a step removed from it,
Speaker 11: but it's always on our mind, and we've taken multiple
Speaker 11: steps to ensure that we can plan for capacity and
Speaker 11: use and so on.
Speaker 5: Brett, if you don't mind, I'd like to linger on
Speaker 5: your CV a bit, because what's happened in the last
Speaker 5: twelve months is extraordinary. You have companies like yours coming
Speaker 5: out of stealth raising vast amounts of money. You said that,
Speaker 5: Clay said you'd put this together in eleven months. But
Speaker 5: I just want to understand how this process compares to
Speaker 5: your time at Salesforce, the earlier days at Google in
Speaker 5: eleven months. How big is your team grown to? Is
Speaker 5: it just the two of you in a garage somewhere?
Speaker 10: You know.
Speaker 5: I think people don't really have a great sense of
Speaker 5: what building a startup that rapidly is, Like, well, I've.
Speaker 8: Gone from eighty thousand employees to thirty and it's been delightful.
Speaker 8: And actually, let me just contextualize it in sort of
Speaker 8: the story of Silicon Valley. If you look at the
Speaker 8: previous significant technology waves, the growth of the Internet in
Speaker 8: the late nineties, the growth of the smartphone, and the
Speaker 8: twenty tens, those periods coincide with many startups that start
Speaker 8: then that become formidable companies. Our two predecessors, Salesforce and
Speaker 8: Google were born in the birth of the web browser.
Speaker 8: Companies like Uber and Lyft that you were just speaking
Speaker 8: about came to exist because of the birth of the smartphone.
Speaker 8: So in these moments where there's a significant new technology
Speaker 8: trend that means new consumer behaviors, new technology models, often
Speaker 8: new business models, there's really an opportunity for startups to compete. Again,
Speaker 8: there's a great Steve Jobs quote that it's more fun
Speaker 8: to be a pirate than it is to be in
Speaker 8: the Navy. And there's these moments in Silicon Valley history
Speaker 8: where you have an opportunity a smaller company where your
Speaker 8: agility and your ability to have that unique market perspective
Speaker 8: is an advantage. It doesn't mean that incumbents don't have advantages,
Speaker 8: but it's a fun time to be a startup right now,
Speaker 8: and because no one knows what the future of this
Speaker 8: technology will bring and we have an opportunity to define it, Clay.
Speaker 3: There are other startups doing this, and I think of forethought,
Speaker 3: I think of Aida, and I think of ultimately what
Speaker 3: holds back and what you're having to do is to
Speaker 3: connect with other enterprise systems. I've been talking to Kaifu Lee,
Speaker 3: for example, yesterday, who's saying agents personal agents sound like
Speaker 3: they're going to be really easy to orchestrate, but they're
Speaker 3: not because there's going to be pushed back from incumbents.
Speaker 3: How much pushback have you felt, how much of enterprise
Speaker 3: systems and other big companies already playing in the enterprise
Speaker 3: space been willing to allow a company agent to navigate
Speaker 3: with them.
Speaker 11: Well, first of all, we've had the privilege of working
Speaker 11: with many leading consumer brands and actually developing the first
Speaker 11: version of our platform, brands like weight Watchers, so nos Serious, XM,
Speaker 11: and Olakai, and we've worked hand in hand with them
Speaker 11: to develop our cr platform and the agent architecture to
Speaker 11: make sure that it's trustworthy, that it can integrate seamlessly
Speaker 11: and easily, and it's easy to deploy with their systems,
Speaker 11: and that the experience it delivers for their customers is
Speaker 11: really delightful. And so you're right. In order to have
Speaker 11: these agents able to take action on behalf of your customers,
Speaker 11: there is some work to do to integrate with systems
Speaker 11: and your knowledge bases and so on. We're really proud
Speaker 11: of how easy we've made that, and in fact, a
Speaker 11: Serra agent can be deployed in just a matter of weeks.
Speaker 5: Our colleague Katie Ruth broke the story about your fundraises
Speaker 5: and the near evaluation of a billion dollars. What justifies
Speaker 5: those numbers? You know, you kind of tease some of
Speaker 5: the customers that you worked with in the development process.
Speaker 5: We mentioned Airbnb has an ambition to integrate agents, I
Speaker 5: suppose into their customer service offering. Who are you talking to?
Speaker 5: You know, how quickly do you come magialize this spreap?
Speaker 8: Well, Number one, we're really focused on our customers. We're
Speaker 8: really focused on the largest consumer brands. SOHO I think
Speaker 8: would benefit the most from this conversationally, I think they'll
Speaker 8: save the most and operating expenses, not just retailers. If
Speaker 8: you think we've partnered with media companies, all subscription services, airlines,
Speaker 8: travel companies. We think there's really broad consumer categories that
Speaker 8: can benefit from this and as Clay said, the unique
Speaker 8: requirements of these larger enterprises, I think here is uniquely
Speaker 8: able to handle. You talk about valuations. You know, it's
Speaker 8: funny you talk about the dot com bubble, and I
Speaker 8: think a lot of people think of pets, dot com
Speaker 8: and web fits. If you could go back in time
Speaker 8: and buy an index fund of all of those dot
Speaker 8: com companies, you'd also get Amazon, You'd also get Google,
Speaker 8: you'd get eBay, you'd get PayPal, and you probably would
Speaker 8: make a ton. I think, as you're looking at investment
Speaker 8: right now, it's certainly frothy, it's certainly a bit of
Speaker 8: an AI bubble. However, I think the thesis that out
Speaker 8: of this AI wave will come many generational companies uniquely
Speaker 8: built on this technology is probably true. So I think
Speaker 8: it's probably both true that there's a lot of hype
Speaker 8: and that this technology wave is going to fundamentally change
Speaker 8: the way we interact with consumers and fundamentally change the
Speaker 8: market of the technology economy.
Speaker 4: And I think it's exciting.
Speaker 8: So I think we have a lot of work to
Speaker 8: do to justify the faith that our investors have in us,
Speaker 8: and but I could not be more optimistic about the future.
Speaker 5: Sierra co found in CEO Brett Taylor and co founder
Speaker 5: Clay Before great conversation that was I guess a Silicon
Speaker 5: Valley classic in the new era of Caroline and it.
Speaker 3: Just while coming up, we'll talk about well, another classic
Speaker 3: in the Silicon Valley area. Why Combinator's placing its bets
Speaker 3: on perhaps some different areas at the moment. We're going
Speaker 3: to talk about it all with Delton Coldwell, Managing director
Speaker 3: over there at YC. This is Bluemo Technology on today's
Speaker 3: VC Spotlight, Why Combinator. It's going a whole new request
Speaker 3: for startups for you. The request, well, it's a bit
Speaker 3: of a tradition at the firm, with each one laying
Speaker 3: out some big ideas, some inspirations, some spaces basically that
Speaker 3: they want well the entrepreneur to focus in on and
Speaker 3: where they want their investments to back. The new list
Speaker 3: includes twenty categories. We've got machine learning applied to robotics,
Speaker 3: we got new defense technology, got climate tech. Let's bring
Speaker 3: in y Combinator partner and Investments Managing Director Dalton Caldwell
Speaker 3: for more on this and the inspiration. Let's take one,
Speaker 3: for example, robotics. Now, the limitations are real world data.
Speaker 3: We've got to go out there and understand how robotics
Speaker 3: really interact with the real world. We've got a lot
Speaker 3: of online data, we don't have that much real world data.
Speaker 3: But what do you want to be anticipated and built here?
Speaker 3: What are you looking to back?
Speaker 12: Yeah, thanks much for having me. And to start off
Speaker 12: the RFS, the Request for Startups has a rich history
Speaker 12: at YS, and we put these out honestly kind of
Speaker 12: for fun. We put these out to inspire people to
Speaker 12: be aware of the kind of ideas we want to fund.
Speaker 4: So let's talk about robotics.
Speaker 1: Which is the one you just asked me about.
Speaker 12: Sometimes you'll see founders trying to come up with an
Speaker 12: idea and they're not sure what investors want to fund,
Speaker 12: and sometimes they're insecure or they're worried that maybe YC
Speaker 12: doesn't want to fund a robotics startup. And so the
Speaker 12: goal of this RFS and all these RFSs is just
Speaker 12: to give a little bit of a window into our
Speaker 12: brains of the sorts of startups that we'd love to
Speaker 12: see apply that we're excited to see people apply with.
Speaker 1: And you know, the.
Speaker 12: Deep insights that's the founder's department about how exactly to
Speaker 12: implement it. But the goal of putting out say again
Speaker 12: this robotics one is to is to signal to people
Speaker 12: that are curious if maybe they should apply to YC
Speaker 12: with a robotics idea that yes, they definitely should.
Speaker 5: Yeah right, Dalton does why Combinator still require Is it
Speaker 5: still mandatory if you get into the summer or winter
Speaker 5: class to be in person in San Francisco?
Speaker 4: Yeah, yeah, we shure you.
Speaker 1: It's an in person program.
Speaker 12: All of our meetings with the founders are in person,
Speaker 12: so yeah, that's right.
Speaker 5: The reason I ask is that I have a documentary
Speaker 5: coming soon called Cerebral Valley. Your friend and colleague Gary
Speaker 5: Tanner is in it, and at the time we shot it,
Speaker 5: you guys had around thirty five percent of that ben
Speaker 5: class working in AI. And it looks at why there's
Speaker 5: a really high concentration of talent coming to San Francisco.
Speaker 4: What you're doing is kind of the opposite. You're the pool.
Speaker 5: You're saying, come, you know, we want specifically people focused
Speaker 5: in this area. But answer that question for me, why
Speaker 5: is there such a high concentration of talent in these
Speaker 5: areas already in San Francisco, Like nowhere else.
Speaker 12: Well, look, I think there's a rich history of technology
Speaker 12: being in the Bay Area. In fact, we've even put
Speaker 12: out a video that myself and one of my colleagues,
Speaker 12: Michael Isn't in specifically about whether a founder should consider
Speaker 12: moving to the Bay Area or not and what the
Speaker 12: pros and cons are, But to quickly summarize it, there's
Speaker 12: network effects from all these things being here in the
Speaker 12: fifties and sixties, the history of computing, and those network
Speaker 12: effects still continue to pay off all these years later,
Speaker 12: where the folks that worked at a prior generation of
Speaker 12: companies tend to stay around, just like the folks that
Speaker 12: are on the segment before me. You can see that
Speaker 12: they've benefited tremendously from being in the Bay Area and
Speaker 12: continue to do so.
Speaker 4: And it sounds like they're choosing to.
Speaker 1: Put their start up here too.
Speaker 12: So you know, this isn't a new This isn't a
Speaker 12: new phenomena.
Speaker 1: I think this is going on a long time.
Speaker 3: Let's go back to the inspiration in the areas that
Speaker 3: you want to see things built, and space is another
Speaker 3: one that you highlight. Maybe you would say that's not
Speaker 3: dominated so much by the Bay Area. I think a
Speaker 3: Leo Labs. It's over in Europe, and there's also some
Speaker 3: other key space companies being built more broadly around the
Speaker 3: United States.
Speaker 6: But what do you want?
Speaker 3: Where is the opportunity do you think to build in
Speaker 3: space tech?
Speaker 1: I think that's an excellent question.
Speaker 12: The reason we put this RFS out was that I
Speaker 12: think founders sometimes feel that space ideas are too ambitious,
Speaker 12: or that maybe you know, they see the kind of
Speaker 12: companies that are currently raising money. You know, this is
Speaker 12: the naive algorithm A lot of founders do for what
Speaker 12: start up idea to work on.
Speaker 4: Is they go read.
Speaker 12: Articles or you know, see TV segments on what raises
Speaker 12: the most money, and they're like, I'll do that, but
Speaker 12: with a tiny difference, a subtle difference, and then I'll
Speaker 12: raise money.
Speaker 1: And so we want to put out.
Speaker 12: Things like space to inspire people that yes, we will
Speaker 12: definitely fund space companies. We've had a lot of success
Speaker 12: funding space companies such as Stoke Space and Relativity Space.
Speaker 12: And there's this Moore's law type of effect happening on
Speaker 12: how easy and cheap it is to get objects into space,
Speaker 12: and the side off factor that we think is going
Speaker 12: to be staggering similar to Moore's law affecting computing, similar
Speaker 12: thing that we think is going to happen for space.
Speaker 12: And so again we're just trying to signal to people
Speaker 12: if you're considering doing a space startup, A, you know,
Speaker 12: seems like a good idea, and B we would love
Speaker 12: to see you apply to YC with that idea.
Speaker 5: All right, y Combinator partner and Investments managing director, don't
Speaker 5: in call world, good to catch up. Thank you for
Speaker 5: your time sticking with Space. Actually it's some news crossing
Speaker 5: the terminal this hour. Elon Musks Starlink has won a
Speaker 5: license to operate in Israel and parts of the Gaza
Speaker 5: Strip after agreeing to a series of measures that prevent
Speaker 5: Hermas from getting access to its satellite internet services. I
Speaker 5: think this story is important, and the use cases identified
Speaker 5: are for example, in field hospitals and by Israeli government agencies.
Speaker 4: But will continue to track that story.
Speaker 13: All right, guys, So I finally tried Apple's Vision Pro,
Speaker 13: and you know, I have to say that before this,
Speaker 13: I expected that Quest would be the better value for
Speaker 13: most people, since it's really good and it's like seven
Speaker 13: times less expensive, But after using it, I don't just
Speaker 13: think that quest is the better value. I think the
Speaker 13: question is the better product period?
Speaker 5: Meta CEO Mark Zuckerberg taking aim at the Vision Pro
Speaker 5: with metas Quest three. Let's get right to Bloomberg's Mark German. Wow,
Speaker 5: what a video. Interesting analysis from their side of the
Speaker 5: the technological divide.
Speaker 4: What was said?
Speaker 14: Yeah, you know, Zuckerberg went right at the Vision Pro.
Speaker 14: He talked about field of view. Oh, he talked about comfort,
Speaker 14: he talked about pass through quality, he talked about the
Speaker 14: resolution of the displays. He implied that the Vision Pro,
Speaker 14: as we've discussed before, as an over engineered product where
Speaker 14: they've put these extremely high resolution panels into the product,
Speaker 14: bringing up the price. But what are the use cases
Speaker 14: for that? And so I think he made a few
Speaker 14: salient points. I think he did something that he had
Speaker 14: to do. I think his review that he posted on
Speaker 14: Instagram is really going to drum up sales of the metaquest.
Speaker 14: I think this is going to help sell his product.
Speaker 14: But that's the positive. On the other side, I think
Speaker 14: a few years time, remember the Vision Pro is a
Speaker 14: first generation product. In a few years time, I think
Speaker 14: Apple's going to figure some stuff out. I think the
Speaker 14: price is probably going to come down a little bit.
Speaker 14: The comfort is going to improve the use. Since they're
Speaker 14: going to improve, the app store will finally include some
Speaker 14: interesting apps. And at that point people will be going
Speaker 14: back and playing the Zuckerberg video and it won't look
Speaker 14: so great. So I think for his sake, he should
Speaker 14: have said he thinks it will improve.
Speaker 6: In the few gentlemen, we thank you. This is Bloomberg Technology.