Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
Speaker 1: from coast to coast with Caroline Hyde in New York
Speaker 1: and Vla Low in San Francisco.
Speaker 2: This is Bloomberg Tech coming up. Memory chip prices strike again,
Speaker 2: this time taking a toll on Cisco, even as AI
Speaker 2: demand surges will break it down.
Speaker 3: Plus, Apple's revamp of its Siri voice assistant hits new
Speaker 3: snags that could delay the release of some features.
Speaker 2: An Altruist launched AI tax planning tool, and within ours
Speaker 2: wealth management stocks tumbled. The CEO of Outist joins us
Speaker 2: to discuss.
Speaker 3: First we check in on these markets that in many
Speaker 3: ways are still digesting AI disruption. We focus in on
Speaker 3: Cisco that I know you'll go to. We're off by
Speaker 3: one percent on the Nastak one hundred. That anxiety of costs,
Speaker 3: of memory costs really building into the benchmark. But more broadly,
Speaker 3: we're all eyes on costs for consumers. CPI print coming
Speaker 3: later in the market. Just a little bit nervous ahead
Speaker 3: of that. Bitcoin down another day of five percentage point
Speaker 3: sixty seven thousand is where we trade for this particular
Speaker 3: risk asset ed What.
Speaker 2: Are you looking at there's a lot of pieces of
Speaker 2: consecutive red on the screens we've been putting up. Cisco
Speaker 2: no exception, down eleven percent, on track for its biggest
Speaker 2: drop since May twenty twenty two, and prior to today's session
Speaker 2: it was up eleven percent and had momentum. Outlook is
Speaker 2: strong on sales for the current period. AI demands there,
Speaker 2: but there's margin compression memory chip prices. Let's get more
Speaker 2: with Bloomberg Intelligence senior hardware and network analysts Wou jin Ho.
Speaker 2: It's actually probably a good time to remind us what
Speaker 2: Cisco is and what Cisco does. But the memory issue
Speaker 2: is factoring in to servers, and right now you are
Speaker 2: leading with your REACT piece on the Bloomberg terminal with
Speaker 2: the memory chip issue. What do we need to know.
Speaker 4: So really quickly with Cisco, is is the leading global
Speaker 4: provider of a networking equipment for corporate as well as
Speaker 4: for data centers, and they've actually had a foray into
Speaker 4: cloud data centers to help power some of the AI workloads. Now,
Speaker 4: what happened last quarter? They got the AI orders, you know,
Speaker 4: momentum and drove a lot of the upside on sales,
Speaker 4: but the gross margin issue especially given from the dram,
Speaker 4: pricing is a lot bigger than we had thought.
Speaker 3: Chuck Robins, though, was trying to say that, like, if
Speaker 3: anyone's going to navigate this, they're going to navigate it.
Speaker 3: They're already going to their suppliers. They're already thinking about
Speaker 3: increasing prices. How well can they handle it?
Speaker 4: Yeah, So we did the math for the third quarter,
Speaker 4: there's about two hundred basis point product derosion on gross margin.
Speaker 4: But when we look at the fourth quarter, you know
Speaker 4: they're able to stabilize that. Now, if we think about
Speaker 4: twenty twenty seven, they actually have a fairly sizable software business,
Speaker 4: and if software really starts wrapping up, we could start
Speaker 4: seeing some gross mogstability in twenty twenty seven.
Speaker 3: W Jino Blomberg Intelligence. There we have your p Cisco's
Speaker 3: results outlook pinched by memory price spike. Look, all of
Speaker 3: this is as Cisco's numbers. They highlight the heavy infrastructure
Speaker 3: build out, but have investors really questioning what happens next
Speaker 3: for the implications to software too, joining us now to
Speaker 3: go across the whole gamut. As Tony one portfolio manager
Speaker 3: tro Price Science and Technology Fund in his latest thoughts,
Speaker 3: he says that the recent software sell off is more
Speaker 3: of a valuation reset and that companies that successfully embed
Speaker 3: AI into workflows could drive stronger productivity and margins over time.
Speaker 3: And Tony, what's so great about having your voice on this?
Speaker 3: Shows you time and time again have been like the
Speaker 3: proof point the ROI is going to be productivity gains.
Speaker 3: Suddenly we've got the productivity gains. Saw a shining a
Speaker 3: light that we're actually worried it's going to really hit valuations.
Speaker 3: How do you weigh where we are in terms of
Speaker 3: the selloff and if it's overdone?
Speaker 5: Yeah, well, I think it's the key question the market
Speaker 5: is wrestling with bright now. And so when I think
Speaker 5: about it, it's it's really just what is on the
Speaker 5: right side of change, I think, and what is the
Speaker 5: inevitability here? And I think what you're seeing with plod
Speaker 5: cowork is that these agents are becoming more autonomous and
Speaker 5: they can actually execute things on their own, do more
Speaker 5: than just like you have to prompt something like chat
Speaker 5: to be team, you know, for for your your own
Speaker 5: personal chat bete. But so what it's it's exciting is
Speaker 5: that these enterprise agents, I think, are going to be
Speaker 5: more more of a force here and as we're starting
Speaker 5: to see that really pay off. And when we think
Speaker 5: about it, like I think the why the markets reacting
Speaker 5: to the way it is because if you think about
Speaker 5: it in the in the future, like, there are wide
Speaker 5: sweeping implications for what modes mean, like in terms of
Speaker 5: software as well as information services. So it's definitely a
Speaker 5: disruptive potential force here.
Speaker 3: Disruptive to some of those in your portfolio. I'm looking
Speaker 3: you are exposed to salesforce, you are exposed to accenture,
Speaker 3: which people have been worrying about the consultants side of
Speaker 3: the equation. Even Shopify and delimit strong numbers got beaten
Speaker 3: up yesterday. How are you being discerning at this moment
Speaker 3: of where you actually buy into on a dip because
Speaker 3: you do think that they'll manage to ride the software disruption.
Speaker 5: Yeah, so I think that you know there it's more
Speaker 5: important that you are the platform and not just a feature.
Speaker 5: Because you're a feature than AI agents can encode software
Speaker 5: so easily and coustiously that you essentially can be embedded
Speaker 5: in a bigger platform. And so I think that increasingly
Speaker 5: you want to make sure that you're the layer that
Speaker 5: all these agents need to coalesce around, and I think
Speaker 5: that there's going to be a lot of change here
Speaker 5: in terms of and we honestly don't know. And so
Speaker 5: I think the market is in a sell first and
Speaker 5: ask questions later mode, and so it's important to kind
Speaker 5: of stay on the right side and manage these these
Speaker 5: changes in the market.
Speaker 2: Tiny Nvidia CEO agents one has this line that software
Speaker 2: where is now worth paying for? The example he would
Speaker 2: give is Cursor. But I guess what we're trying to
Speaker 2: do with you is define what software is that is
Speaker 2: worth paying for. You just brought up Salesforce, right, so
Speaker 2: in the most recent quarter they had like more than
Speaker 2: a billion dollars of arr directly from AI and they
Speaker 2: talk about all the almost nineteen thousand agent force deals
Speaker 2: that they have, yet they're still subject to this same
Speaker 2: AI is going to eat software's lunch chat that's going
Speaker 2: on right now. Why do people not believe the traction
Speaker 2: that they have as an example that it's worth paying for.
Speaker 6: Yeah, So I think.
Speaker 2: There's two things that I think about.
Speaker 5: One is that there's just so much competition when you
Speaker 5: think about all these AI neted startups and they're pricing
Speaker 5: in a way that is really compelling and to drive
Speaker 5: ad option essentially, So you think about like image generation, right,
Speaker 5: like you pay twenty dollars at chat to bet you
Speaker 5: can generate unloaded images, whereas on Adobe or Firefly you
Speaker 5: have to pay per image generation. But you know, you
Speaker 5: can think about you know, cloud cowords in a similar
Speaker 5: way in terms of what they're pricing versus the value
Speaker 5: that they're delivering is really compelling. And so I think,
Speaker 5: what you just have a lot of price inflation, and
Speaker 5: that's why I think a lot of these you know,
Speaker 5: software companies are looking to drive adoption. You know, the
Speaker 5: economics aren't as good as the seat based model, and
Speaker 5: we're going from like a sea based model to outcomes
Speaker 5: and agents, which is a very different, different version.
Speaker 2: Just for reference to audience. And as that one hundred
Speaker 2: near session low is now down one and a quarter percent.
Speaker 2: This story started in Europe in August. I was there
Speaker 2: in London. I remember the day all the European software
Speaker 2: that was sold off. Earlier today we spoke to the
Speaker 2: ceman CEO. Let's get his take.
Speaker 7: We know that AI has the potential to disrupt some
Speaker 7: of the software businesses. I mean, if you talk about software,
Speaker 7: it runs on call centers and the like. I mean,
Speaker 7: that's fully on the block. But if you go on
Speaker 7: the other end on industrial software, simulation software, physics, space software,
Speaker 7: let's we don't see that at all. We rather see
Speaker 7: an enrichment of the software which allows more and more
Speaker 7: customers to use it.
Speaker 2: Another software CEO whose fate is very closely tied to
Speaker 2: a relationship with Nvideo, and I think it's important to
Speaker 2: point that out. But his argument is that actually specialized
Speaker 2: software is getting better because of AI. You buy that.
Speaker 5: I think so, And I think that most I think
Speaker 5: a lot of the economics that we've made and the
Speaker 5: specialization of the niches, so you know, domain specific knowledge
Speaker 5: will always be very important, and so you know, I
Speaker 5: think just general knowledge is probably going to be not
Speaker 5: take the economics, and so what really matters is like
Speaker 5: being able to put this into ROI now. At the
Speaker 5: same time, it doesn't mean that if you have a
Speaker 5: stronger model, that doesn't mean it doesn't create more competition
Speaker 5: for existing comments. So I don't think the battle is
Speaker 5: one or loss for these companies, and I think it's
Speaker 5: just important that they stay you know, front footed and
Speaker 5: incorporating the latest technology trends into their.
Speaker 3: Platform and your science Technology fund has all the trends.
Speaker 3: You're in hardware, you're in software, you're number one holding
Speaker 3: is alphabet at the moment, then in video. But going
Speaker 3: back full circle to Cisco who exposure there? What do
Speaker 3: you think about the memory price implications and how you
Speaker 3: can weather who are the winners and loses in that situation?
Speaker 2: How long for?
Speaker 5: Yeah, So I think that you know, memory is fascinating
Speaker 5: industry because one is secular trends and AI is now
Speaker 5: this new tam and then we've also gone through multiple
Speaker 5: years of under investment because memory has been a downturn.
Speaker 6: So I think one it.
Speaker 5: Is that they're secular, but there's also cyclcal elements a bit.
Speaker 5: So you know, in terms of our portfolio, we definitely
Speaker 5: own a lot of the bottlenecks where the economic value
Speaker 5: capture is in such as memory. At the same time,
Speaker 5: I think that you know, Cisco networking and this is
Speaker 5: also going to be part of in AI. I think
Speaker 5: that the implications of the memory a shortage is actually
Speaker 5: becoming more widespread and having implications that a.
Speaker 2: Lot of times the market didn't think about.
Speaker 5: So you know, it is fascinating, But I do think
Speaker 5: Cisco continue to be a really impeign company that's driving
Speaker 5: a lot on this AI adoption tourny one.
Speaker 2: Duro price great heavy back on Bloomberg Tech. Really appreciate it.
Speaker 2: Now coming up, Apple's new Sery runs into more snags
Speaker 2: during testing. What's delaying the AI up grade? We have
Speaker 2: the Bloomberg recording next, This is Bloomberg Tech. Apple's revamp
Speaker 2: of its Siri voice assistant has hit new challenges that
Speaker 2: could delay the release of some features, according to sources,
Speaker 2: Bloombo's Mark German, as always, has the details. Let's get
Speaker 2: into the details. What do we need to know? What
Speaker 2: you what are you hearing from inside the company about
Speaker 2: the latest snag with artificial intelligence powered Sery.
Speaker 8: So Apple has been planning to launch the new Seri.
Speaker 9: This is an AI revamp that initially introduced in June
Speaker 9: twenty twenty four at its Developers conference, and I'm going
Speaker 9: to tap into features like your personal data to fulfill
Speaker 9: queries onstream content and precise control of apps. It was
Speaker 9: supposed to launch next month in March. Is part of
Speaker 9: an update called iOS twenty six point four. This had
Speaker 9: been the plan for several months. It's actually been the
Speaker 9: plan for well over a year at this point. Now
Speaker 9: that is being delayed and staggered potentially right now. The
Speaker 9: delay is moving many of the serie capabilities to iOS
Speaker 9: twenty six dot five that's scheduled for some time in
Speaker 9: May June, so about a couple month delay. But some
Speaker 9: of the features, including the personal context features, those are
Speaker 9: likely not to launch until September as part of iOS
Speaker 9: twenty seven, so a bit of a delay there, you know. Altogether,
Speaker 9: it's possible that these new features are not going to
Speaker 9: launch until two years after they were initially introduced. The
Speaker 9: setback for Apple here is not necessarily in bone sales.
Speaker 9: People are still buying iPhones. You saw the eighty five
Speaker 9: billion dollars worth of sales, which could have even been
Speaker 9: more if not for some manufacturing challenges. But the challenge
Speaker 9: is where is OpenAI whereas anthropic? Where are Google going
Speaker 9: to be at the end of this year? Right, They're
Speaker 9: likely to be well ahead where they are today. So
Speaker 9: that's really what we have to pay attention to.
Speaker 3: Mett's talk Mark about how therefore the Google introgation is going,
Speaker 3: because in many ways it just fits into the overall
Speaker 3: Apple intelligence stop start and how they're going to be
Speaker 3: building out from within.
Speaker 9: My belief is the only reason they're going to be
Speaker 9: able to get this done this year, which I still
Speaker 9: believe they're going to do despite these latest snags during testing,
Speaker 9: is because their models are being improved by the Google
Speaker 9: Gemini team as part of that collaboration between the research
Speaker 9: labs at both Apple and Google. So that is going
Speaker 9: to be a major boon for them. I do expect
Speaker 9: this big serie chatbot revamp in iOS twenty seven coming
Speaker 9: out with the iPhones in the fall to be pretty
Speaker 9: nifty and pretty cool, a new way to control your
Speaker 9: phone with AI. They just need to pull it off,
Speaker 9: and I think they will. But the big question is
Speaker 9: how impressive is it going to be in September compared
Speaker 9: to whatever Open AI in Gemini has for their own
Speaker 9: customers and bropias with Quad in six months from now.
Speaker 3: Bloomberg's Mark German, we appreciate you on all things latest
Speaker 3: with Apple. Meanwhile, let's turn our attention to social media now,
Speaker 3: because Instagram boss Adam Massari testified in a landmark case
Speaker 3: they're like in social media to digital casinos. Masari told
Speaker 3: the jury he doesn't consider problematic use of platforms like
Speaker 3: meta to be the same as quote critical addiction. Blom
Speaker 3: Meg's legal reporter Madlyn Mackelberg is with us. You were
Speaker 3: there in the hearing, NLA, and so the push on
Speaker 3: Adam Massari anything different. We've heard on other occasions that
Speaker 3: he's testified.
Speaker 10: So he covered a lot of similar ground to things
Speaker 10: that we've heard before in congressional testimony and other public
Speaker 10: remarks about this issue of social media addiction. Obviously, what's
Speaker 10: unique here is the context in which he was giving
Speaker 10: this testimony, which is this landmark case that's testing whether
Speaker 10: juries will respond to claims that these companies knowingly designed
Speaker 10: their platforms to addict young users. But we heard him
Speaker 10: cover a lot of different ground. As you noted, he
Speaker 10: talked about this issue of clinical addiction versus problematic use,
Speaker 10: which is something that we hear a lot from social
Speaker 10: media companies, referring to people who use the platforms more
Speaker 10: than maybe they feel good about. We also heard him
Speaker 10: talk about some internal emails in the company when he
Speaker 10: was asked about them by the lawyer about decisions they
Speaker 10: were weighing about certain features on the platform related to
Speaker 10: photo filters on Instagram.
Speaker 2: Mad this is a process, right, both sides present arguments
Speaker 2: of plaintiffs, what do we need to know about what
Speaker 2: happens next, who else might testify, and what is under
Speaker 2: consideration at the cort of the trial. That's right.
Speaker 10: So we're in week one of what's expected to be
Speaker 10: an eight week trial. Adam Asseri was the first executive
Speaker 10: to be called to the stand, but he will certainly
Speaker 10: not be the last. As you said, this is the
Speaker 10: plaintiff's case. They kind of get the first chunk of
Speaker 10: time at the trial, and then the defendants in this case,
Speaker 10: Meta in Google, they're going to get a chance to respond.
Speaker 10: We're also expecting to hear from Mark Zuckerberg of Meta,
Speaker 10: We're expecting to hear from YouTube CEO Neil Mohan at
Speaker 10: some point, and we're also we kind of got a
Speaker 10: little bit of a preview that we're going to be
Speaker 10: hearing from executives a little bit further down the food
Speaker 10: chain who maybe we're weighing in on some of these decisions.
Speaker 10: But the heart of this case is about this question
Speaker 10: of addiction and whether or not these platforms knowingly designed
Speaker 10: these tools to hook young users resulting in mental health struggles.
Speaker 10: This case, of course, centers on one individual, a young
Speaker 10: woman from California and her specific allegations, but it represents
Speaker 10: thousands of other cases that have been filed. So there's
Speaker 10: a lot of attention on the outcome here because it's
Speaker 10: going to dictate how the rest of these cases are decided.
Speaker 2: Bloomberg's Madeline Meckeberg, thank you very much. Now coming up,
Speaker 2: Altruist introduces a new AI way to plan your taxes.
Speaker 2: We speak with Jason wenk Voucheris's CEO. Next, this is
Speaker 2: Bloomberg Tech.
Speaker 11: AI.
Speaker 3: It's added again and it's been a wonkey, worrying few
Speaker 3: days for wealth managers and those who had shares in
Speaker 3: it considering the technology's impact. It's all started Tuesday, a
Speaker 3: startup called Altruist added a tax planning tool to its
Speaker 3: AI model Hazel. Within hours, wealth management stocks had tumbled.
Speaker 3: Charles schwab lpl Woymond James, as you see significantly, and
Speaker 3: that's as investors really.
Speaker 11: Feared AI disruption.
Speaker 3: The CEO of the company that kicked all of this off, Altruists,
Speaker 3: Jason Wank Jason, did this citate you?
Speaker 11: I surprise?
Speaker 12: Yeah. I think, to be incredibly honest, I don't think
Speaker 12: anybody could have possibly thought that you know, somewhere between
Speaker 12: you know, tens of billions and maybe one hundred billion
Speaker 12: of market cap would be wiped out in a week.
Speaker 12: AI is very powerful and certainly the market you know
Speaker 12: reaction tells me that there's a lot of people voting
Speaker 12: with their dollars in the potential disruption.
Speaker 3: Jason, all of this is about enabling well wealth managers
Speaker 3: individual wealth managers. From your part, just remind us what
Speaker 3: altruist does and what this new development in terms of
Speaker 3: building in a tax tool does to help them.
Speaker 8: Yeah, absolutely so.
Speaker 12: I think the nail on the head, like the most
Speaker 12: important thing is that we're not trying to displace financial
Speaker 12: advisors or wealth managers.
Speaker 8: It's not AI taking those jobs away.
Speaker 12: It's AI to help empower them to do better work
Speaker 12: for their clients. And in many ways, when people think
Speaker 12: about wealth management, you know, there's there's deservedly a lot
Speaker 12: of critique. It could be things like why is it
Speaker 12: so hard to get access? Like the minimums are really high,
Speaker 12: Why are the costs very high? Why are the results
Speaker 12: sometimes inconsistent? And a lot of that is, you know,
Speaker 12: because of how much manual process and human labors involved.
Speaker 8: You just have a lot of limiting factors.
Speaker 12: AI very much is an incredible equalizer, you know, effectively
Speaker 12: with a tool like Hazel what used to take you know,
Speaker 12: teams that were you know, ten or more people working
Speaker 12: hundreds of hours and costing many tens of thousands of dollars,
Speaker 12: It can be done in like two to three minutes.
Speaker 12: And you know, users, the advisor users in our case
Speaker 12: are paying one hundred is dollars per month, right, so
Speaker 12: much more affordable, much more accessible.
Speaker 8: And tax is just the start.
Speaker 12: We launched tax first for what it's worth, because it's
Speaker 12: tax season in the US. We wanted that to be
Speaker 12: our first agent, you know, to kind of get out
Speaker 12: there in the hands wealth managers and advisors. But this
Speaker 12: is a pretty good harbinger of the things that will come.
Speaker 12: There'll be more agents doing more work that will continue
Speaker 12: to make advice better, more affordable, and more accessible.
Speaker 2: Jason, you will have noticed that some of the CEOs
Speaker 2: of those wealth managers appeared on television in the days
Speaker 2: that followed the selloff. His child swab listened to what
Speaker 2: they had to say.
Speaker 13: AI is a real accelerant. So it was puzzling to
Speaker 13: see our stock sell off related AI because we're benefiting
Speaker 13: it from it in multiple ways and bringing it to
Speaker 13: our clients.
Speaker 2: It's allowing us to reach new clients.
Speaker 13: And I think that's why you won't see the population
Speaker 13: of advisor's shrink, is that AI will be useful in
Speaker 13: reaching new clients that we couldn't before.
Speaker 2: Has mister West or any other leader in that field
Speaker 2: phoned you since Tuesday and would you be open to
Speaker 2: working with these companies literally jointly. Yes.
Speaker 12: So no, I haven't heard directly from mister Worcester, but
Speaker 12: we already actually work with any dependent financial advisor. One
Speaker 12: of the reasons why we stood up Hazel as a
Speaker 12: separate entity altruist of course as a direct competitor to Schwab, Fidelity,
Speaker 12: LPL and others. But we wanted Hazel to be something
Speaker 12: that any advisor could use to help any client, and
Speaker 12: we didn't want them to be forced into using a
Speaker 12: single custodian. So there are already thousands of advisors who
Speaker 12: use Schwab, for example, as a custodian that are leveraging
Speaker 12: Hazel and doing so to drive better outcomes for their
Speaker 12: clients and a lot more operational efficiency for themselves. And
Speaker 12: we have i'd say, in the last forty eight hours.
Speaker 12: It's in the hundreds of very large, significant, you know,
Speaker 12: wealth management companies around the world reaching out to see
Speaker 12: if there's a way that we can partner. So definitely
Speaker 12: looking forward to, you know, putting this tool in as
Speaker 12: many hands of as many capable advisors in the US
Speaker 12: as possible.
Speaker 2: Let's talk about the tool and the technology. You know,
Speaker 2: what are the data sets that the underlying model was
Speaker 2: trained on. What is your coal competence that if there
Speaker 2: is concern from the legacy industry of wealth management, what
Speaker 2: is it they should be concerned about, And what is
Speaker 2: it that makes this model powerful?
Speaker 12: Well, so kind there's two parts that I'll try to
Speaker 12: be succinct. But the first is I think what causes
Speaker 12: concern is not so much just the AI. It's the
Speaker 12: fact that we also have built a very modern infrastructure
Speaker 12: for our wealth business. So the things you can do
Speaker 12: on altruists you just can't do anywhere else in terms
Speaker 12: of the speed of opening accounts and funding accounts and
Speaker 12: managing of assets. If you take AI and you put
Speaker 12: it on top of bad, antiquated infrastructure, you're not going
Speaker 12: to get a ton of value. It's you know, kind
Speaker 12: of akin to putting like a you know, self driving
Speaker 12: on a horse and buggy or something like that, Like
Speaker 12: you need to have like an entire vertically integrated ecosystem.
Speaker 12: I think, if anything, that's maybe where some of the
Speaker 12: market concern is is that what happens if something like
Speaker 12: you know is digital and it's twenty or thirty percent better,
Speaker 12: you add AI and multiple agents, it becomes two or
Speaker 12: three hundred percent better. Now advisors could very much have
Speaker 12: a shift in where they decide to custoy their assets.
Speaker 12: That could be pretty monumentally difficult to overcome for some
Speaker 12: of the big incumbents.
Speaker 8: As far as what makes the model unique.
Speaker 12: The way that we built Hazel's we rely, like most
Speaker 12: AI companies, on having really clean data.
Speaker 8: So data is a huge advantage.
Speaker 12: I think, you know, mister Worcester was right in saying
Speaker 12: that data is very critical. In the case of the custodian.
Speaker 12: You have the ultimate system of record meeting, right. We
Speaker 12: have all of this data on clients transactions. That makes
Speaker 12: it a lot easier to give personalized analysis and feedback
Speaker 12: back to the users.
Speaker 2: Jason Mike Vouchers, Sorry, we're out of time. Grateful for
Speaker 2: the conversation coming out. We look at way moo. We'll
Speaker 2: be right back. This is blue bag attack.
Speaker 3: Welcome back to Bloomberg Tech. A lot of action in
Speaker 3: the markets today, let's just go through it. In terms
Speaker 3: of the NASDA benchmark currently off by one point eight percent,
Speaker 3: we're at session lows. This is as we worry about
Speaker 3: earnings and how they're implicated by prices. Prices and Memory
Speaker 3: Cisco in particular down significantly. I want to shine a
Speaker 3: night and off by eleven percent. So we've got that
Speaker 3: anxiety about whether AI is really helping these businesses or
Speaker 3: whether pricing pressure is hurting them. Remember the macro pictures
Speaker 3: are about get CPI data, so pricing pressure for the
Speaker 3: consumer too. As we build up to that, the market's
Speaker 3: just a little bit jittery. Add Ian over in European
Speaker 3: trading check it out by twenty percent. This is the
Speaker 3: payments company Fintech, which is being hit by consumer.
Speaker 11: Sentiment being on the downside.
Speaker 3: Also a week of dollar hit them as well in
Speaker 3: terms of payments, revenue and their earnings outline, just really
Speaker 3: not living up to expectations. We move on and have
Speaker 3: a think about what's happening when you've got exposure to
Speaker 3: the private sector now many are saying, I'm talking BTIG
Speaker 3: in particular, saying that soft bank is like the way
Speaker 3: to play open Ai exposure as well, because they've already
Speaker 3: put thirty six billion dollars in. They're looking to increase
Speaker 3: that maybe up to the tune of thirds thirty billionaire.
Speaker 3: They have an eleven percent stake in the business, and
Speaker 3: actually they managed to post a profit, the fourth quarterly
Speaker 3: profit in a row, not seen since twenty twenty one,
Speaker 3: as their investment stake in open Ai goes up and
Speaker 3: to the right, helping offset some other losses. But the
Speaker 3: stock traded in the US if you're looking at depository
Speaker 3: receipts currently up by thirty percent.
Speaker 11: So we'll dig into that a little bit more.
Speaker 9: End.
Speaker 3: But it's interesting what's happening in terms of a soft
Speaker 3: bank story.
Speaker 2: It's a little bit like shuffling the deck and like
Speaker 2: you know, you have to sell at certain holdings to
Speaker 2: fund investment deeper into the names that you're most interested in.
Speaker 2: Like it's not rocket science at the end of the day.
Speaker 2: Carry one quick question to ask is like how wide
Speaker 2: soft banks is exposed beyond one single name like open Ai,
Speaker 2: Given how ferocious the lab battle is right now.
Speaker 3: Yeah, opening either in on Remember they've been going into
Speaker 3: chip design companies like I'm peer, they've been looking real
Speaker 3: exposure to ARM but they've been coming back on their
Speaker 3: T mobile exposure to be able to get more into
Speaker 3: these privately held businesses. Also been buying private equity companies
Speaker 3: right because they want the exposure to day to center.
Speaker 2: Yeah, I'm glad the team got that up. I mean,
Speaker 2: you know, far right column says everything. Let's get to
Speaker 2: another story in the private markets that we've been trying
Speaker 2: to update you on regularly. Anthropic is close to locking
Speaker 2: in a deal to raise more than twenty billion dollars
Speaker 2: in a funding round co led by investors including Pieter
Speaker 2: Teal's founder's fund, The Shore and DRAGONEA that's, according to
Speaker 2: Bloomberg's sources, one of the largest startup funding rounds ever.
Speaker 2: And who's been across at Bloomberg's VC reporter Natasha mascarinus
Speaker 2: important detail, Actually, Like some of those names are are interesting.
Speaker 2: You know, dragone has come up a lot recently. Weimo
Speaker 2: was something we reported a couple of weeks ago. What
Speaker 2: do we need to know? Like how close is this
Speaker 2: and who's leading? Yeah, listen.
Speaker 14: On Monday, we were discussing where are the crossover funds
Speaker 14: in this round? Now we have some examples with d Shah,
Speaker 14: with DRAGONEIR. We also have a continuing list of traditional
Speaker 14: venture capitalists in the round. What I'm really paying attention
Speaker 14: to is the addition of Founder's Fund to the cap table.
Speaker 14: That's an early open AI investor and founder just Want
Speaker 14: is known for concentrated bets, So it is interesting to
Speaker 14: see an early open AI investor go ahead and be
Speaker 14: a major investor in this anthropic ground. And Founder's Want
Speaker 14: is not alone. We're seeing Sequoia as well in the round,
Speaker 14: and the list grows.
Speaker 11: It's interesting.
Speaker 3: I know another VEC that makes concentrated bets and doesn't
Speaker 3: go in to other companies that seem to directly compete.
Speaker 3: So how much of a taboo is it that vcs
Speaker 3: back to horses, almost like having some sub option here.
Speaker 14: Yeah, I mean it used to be a huge taboo
Speaker 14: because of concerns about information leakage or how do you
Speaker 14: really take that out of your head when you're in
Speaker 14: a partner meeting and discussing you know two different roadmaps
Speaker 14: that are you know, both in this case going towards
Speaker 14: a version of AGI. What I would say and what
Speaker 14: we are reporting is that certain investors get certain information rights.
Speaker 14: In the case of open AI, sources are telling us
Speaker 14: that if you have a certain amount of ownership in
Speaker 14: the company, that comes with its own information. And so
Speaker 14: what we're really wondering is who's taking big checks in
Speaker 14: these rounds, because they are the ones that will have
Speaker 14: to answer the questions of how are we keeping the
Speaker 14: information separate?
Speaker 2: Bloombergs and Sasha Mascarinas, thank you very much. Now, Waimo
Speaker 2: is aiming to have a big year, adding new US
Speaker 2: and international markets. The robotax firm also recently raised sixteen
Speaker 2: billion dollars from parent Alphabet and other outside investors. Co
Speaker 2: CEO Taqijra Maracana sat down with us and discuss the
Speaker 2: company's plans, including whether it's considering an IPO. Listen to this.
Speaker 15: We are just laser focused on execution, you know, building
Speaker 15: weimo to be financially responsible, operationally excellent, and then make
Speaker 15: sure we maintain the safety culture. Like that's what we're
Speaker 15: really focused on. Having this vote of confidence, as you said,
Speaker 15: not only from Alphabet, but from our three colleagues. From
Speaker 15: this round and from all of the new investors who
Speaker 15: decided to join our cap table and the existing ones
Speaker 15: who doubled down on their belief that this is the
Speaker 15: right opportunity to fund, and we just feel humbled, but
Speaker 15: also there's a lot to do, so we're really focused
Speaker 15: on making sure that we can scale, focusing on our
Speaker 15: two first international launches, you know, London and Tokyo, and
Speaker 15: scaling across the United States.
Speaker 2: We do not yet have, although there has been progress
Speaker 2: towards just this week, a federal level framework set of rules.
Speaker 2: What do you think the direction of travel is with that?
Speaker 2: And you know, clearly if you had to deal with
Speaker 2: one set of rules and not a city by city,
Speaker 2: let alone state by state basis or case, you'd be
Speaker 2: making a bit more progress. I suppose.
Speaker 15: Yeah, we think it's really important that there is a
Speaker 15: federal av standard. We've been advocating for sort of a
Speaker 15: safety case based approach because the technologies are different and
Speaker 15: we think that the burdens should be on companies to
Speaker 15: demonstrate why you believe your technology is safe enough. We
Speaker 15: also think there should be transparency requirements. You know, people
Speaker 15: should have to demonstrate how many trips.
Speaker 16: Are you providing?
Speaker 15: You know, I don't right now.
Speaker 2: The balance isn't quite there.
Speaker 15: I mean, some states require a lot of reporting, some
Speaker 15: don't require as much reporting. I think the United States
Speaker 15: has an opportunity with this technology to lead globally, and
Speaker 15: I don't think you can lead globally if it's a
Speaker 15: framework that's governed by multiple jurisdictions across the states. And
Speaker 15: it's a way to slow down the adoption of this
Speaker 15: technology not only in the US, but in other markets.
Speaker 2: New York City, New York City, not necessarily New York State.
Speaker 2: A lot of people want to know what's the roadblock
Speaker 2: there upon the expression and what's the timeline. You know,
Speaker 2: you work closely with the authorities, but that is a
Speaker 2: big potential market.
Speaker 15: Yeah, that's a market where you know, we're just going
Speaker 15: to have to do the work and demonstrate our safety
Speaker 15: outcomes and earn the trust and shizzle away at it
Speaker 15: over time.
Speaker 2: Do they have the rules for you to follow?
Speaker 15: They do not have rules that allow the human operator
Speaker 15: to be removed from vehicle entirely.
Speaker 2: And until that changes, and until that changes.
Speaker 15: But you know, there is an interest in doing this
Speaker 15: in the state, even outside of the city, and that
Speaker 15: gives us an opportunity to grow more fans, and fans
Speaker 15: actually are calling for this in cities where our technology
Speaker 15: can't be deployed. We are seeing organic campaigns spring up
Speaker 15: saying I want WEIMO in my town.
Speaker 2: San Francisco. The Bay Area is my home. London's where
Speaker 2: I grew up. And I was studying the map of
Speaker 2: the burros that you propose to launch in and you
Speaker 2: correct me if my math is wrong, but just based
Speaker 2: on those burroughs at launch, this seems to be the
Speaker 2: biggest citywide deployment from the start that you guys will
Speaker 2: have done. Is that correct?
Speaker 17: It?
Speaker 2: Possibly, it's correct.
Speaker 15: I mean, we're in the phases of figuring out the
Speaker 15: specifics around the launch and figuring out the actual framework
Speaker 15: around the launch, and so I don't want to speak
Speaker 15: to definitive word about what we're going to do. But
Speaker 15: what you're speaking to is we're not gated by the technology, right,
Speaker 15: and we have the appetite to scale, and we want
Speaker 15: to partner and do so safely, and we want to
Speaker 15: earn trust. So that's like there's a lot of levers
Speaker 15: there that we have to figure out how to strike
Speaker 15: the right balance and how to make sure that we're
Speaker 15: introducing it to the community both to meet the demand
Speaker 15: and a grow I.
Speaker 2: Asked, because of those twenty cities to come, London is one, yes,
Speaker 2: and London is now outside of the European Union, but
Speaker 2: it's you know, it's kind of your europe launch. Yes,
Speaker 2: what was that experience like? Within London's regulatory framework and
Speaker 2: the UK's regulatory framework.
Speaker 15: They've been extremely forward leaning and interested in seeing how
Speaker 15: this technology could actually improve safety.
Speaker 11: On their roadways.
Speaker 15: And that's where I think, you know, we find a
Speaker 15: sweet spot when people are less sort of complacent about
Speaker 15: the status quo.
Speaker 3: Weimo co CEO to Keedra Mawakana ed. I mean, we've
Speaker 3: got to check out the full interview. It's on Bloomberg
Speaker 3: or as a special edition of Bloomberg Tech Podcast. But
Speaker 3: really your conversation is about this extrawnay expansion into London
Speaker 3: and just what pace of growth, what signals you discerning
Speaker 3: as to how big it can be there.
Speaker 2: Now you and I have both called London home, right
Speaker 2: and we've taken the bus and the tube and gone
Speaker 2: on bikes, and so how do they get past what's
Speaker 2: a really established transit network and right now there are
Speaker 2: several dozen Waymo vehicles testing in London. They are doing
Speaker 2: that in more than thirty of the sixty London boroughs,
Speaker 2: you know, like sixty percent of the city's already covered.
Speaker 2: That's way beyond what, for example, Tesla's doing in Austin
Speaker 2: right even the Bay Area here in terms of their
Speaker 2: scale on footprint. So there's a big expectation that if
Speaker 2: this labor government is doing okay and passes the rules,
Speaker 2: then they can do this for real this year, no
Speaker 2: safety driver or supervisor and have a commercial service at
Speaker 2: scale that they haven't done that quickly in the United States.
Speaker 3: Look, this is about disruption of transport, and it looks
Speaker 3: as though transport and logistics is in the either storm
Speaker 3: in terms of disruption today as well. If you're looking
Speaker 3: at the markets now, you and I have just been
Speaker 3: pouring over some of these market moves extraordinary for c H.
Speaker 3: Robinson down by twenty one percent, but you're actually seeing
Speaker 3: the Dow Transports the index having its worst day since
Speaker 3: April of twenty twenty five, currently down by five percent.
Speaker 3: Now traders are telling Bloomberg Kuneneagel, for example, which is
Speaker 3: another European logistics company, traders are citing an announcement coming
Speaker 3: from Algorithm Now.
Speaker 11: Algorithm is a.
Speaker 3: US traded company and they've announced that as a leading
Speaker 3: AI technology company. They've published a new white paper demonstrating
Speaker 3: its semi cab platform reduces empty freight miles by more
Speaker 3: than seventy percent across active customer networks. Is this the
Speaker 3: next aishooter drop ed?
Speaker 2: It was a severe sharp drop and we got to
Speaker 2: keep looking into it. Coming up from the program Back
Speaker 2: to Ai similarly secures one hundred million dollars in new
Speaker 2: funding as it looks to scale predictive AI mimics human behavior.
Speaker 2: We have more on that next. This is Bloomberg Tech.
Speaker 2: AIS Startups similarly has raised one hundred million dollars in
Speaker 2: a new funding round led by Index Ventures. Similarly as
Speaker 2: an AI lab, the wantes to help companies predict human behavior,
Speaker 2: in fact a chain of human behaviors for more. June
Speaker 2: Park similarly CEO and one of the founding group is
Speaker 2: with us in San Francisco. This is very interesting because
Speaker 2: the field has tried to develop a model that is
Speaker 2: a behavior model, and it has had mixed success some failure.
Speaker 2: Let's start by talking about the data sets that the
Speaker 2: model's trained on. How did you develop what you think
Speaker 2: is a model that does give you an insight or
Speaker 2: a prediction of how a human might behave? Absolutely, thank
Speaker 2: you for having me. Glad to be here.
Speaker 17: So similarly is a company that are spinning out of
Speaker 17: Stanford where we led frontier research on creating agents and
Speaker 17: simulations that leverages generate to BAI technology. So today we
Speaker 17: partner with millions of real people and combine our data
Speaker 17: collection strategy with our modeling strategy to create agents that
Speaker 17: can actually behave in a much more generalizable context. So
Speaker 17: data here we might leverage include interview data that's unstructured,
Speaker 17: which is the kind of data in the past was
Speaker 17: very hard to.
Speaker 2: Leverage literally people telling you their life stories. That's exactly right.
Speaker 17: So we actually create ai interviewer that can go talk
Speaker 17: to people one on one, voice to voice and actually
Speaker 17: get life stories and their preferences around different policies and
Speaker 17: so forth with their consent.
Speaker 3: And to what end I mean to build simulations that
Speaker 3: are one hundred percent accurate to then populate with agents tune.
Speaker 11: How do you see this work?
Speaker 3: You've done proving more disruption to the market right now, right.
Speaker 17: So today we work Fortune ten companies in retailer businesses,
Speaker 17: to personal finance, to CpG companies and even to polling companies.
Speaker 17: And today our customers use our technology to do concept testing. So,
Speaker 17: for instance, CBS has been a close partner for the
Speaker 17: past five months where CBS has now created hundreds of
Speaker 17: thousands of similis or quote unquote agents that represent their
Speaker 17: real customers, so they can actually do simulated focus groups
Speaker 17: to understand better and there's in their pain points and
Speaker 17: their use cases, but also to do story layout designs
Speaker 17: and so forth. Galop, another polling company that's highly well
Speaker 17: established and respected, is now working with similar to create
Speaker 17: digital panel of their agents or their simulated human panels. Now,
Speaker 17: one last example that's interesting is, of course many of
Speaker 17: our customers are Fortune five hundred companies that regularly have
Speaker 17: earnings call, so use case there might actually be creating
Speaker 17: simulation of their earnings call. So this is an ass
Speaker 17: that we get frequently. So in the recent earnings call
Speaker 17: we simulated we actually can predict eight out of ten
Speaker 17: questions that are actually asked.
Speaker 2: In this court.
Speaker 3: Sorry, June, you're saying the analysts almost don't need to
Speaker 3: be asking that question. You can predict with eighty seventy
Speaker 3: what analysts are going to ask CEO CFOs on earning course.
Speaker 2: That's exactly right.
Speaker 17: In fact, I actually before our conversation today, I had
Speaker 17: a chance to simulate the questions that twelve you might ask.
Speaker 17: And these are some other questions that actually have come
Speaker 17: up in our assimilation.
Speaker 2: Oh so you seem well prepared. Look, there's a degree
Speaker 2: of skepticism about Similarly, to be fair, the founding members
Speaker 2: four of you are are largely academics at Stamford. You
Speaker 2: founded the company officially a year ago, but you've only
Speaker 2: been training the model for seven months. You say you
Speaker 2: have five months of commercial deals. How have you done
Speaker 2: that so quickly? So similarly, it is a.
Speaker 17: Real combination of amazing front your researchers that lasers the
Speaker 17: ceiling of what the models are capable of today, but
Speaker 17: also amazing product and engineers.
Speaker 2: So here on the product.
Speaker 17: Side, we have people like Laney Allen and Mikha Kapor
Speaker 17: who have been product and engineering leader in the space
Speaker 17: of companies such as Figma and Heavier, and that combined
Speaker 17: with the rest of the engineering team and the research
Speaker 17: talent our neighbors, us to create frontier technology that actually
Speaker 17: gets routed directly.
Speaker 3: To product June Park, who has preempted all of our
Speaker 3: questions through his own products of Civilly. We so appreciate
Speaker 3: your time, Thank you very much. Indeed, let's just take
Speaker 3: a look elsewhere in AI model world, because Alphabet currently
Speaker 3: spiking higher, up almost a percentage point. This is they've
Speaker 3: updated a release to Gemini three Gemini three Deep Thinking
Speaker 3: Reasoning Model. It's an update and they say that the
Speaker 3: mode hasn't been updated to solve modern science research challenges
Speaker 3: in particular.
Speaker 6: Ed.
Speaker 3: Look, Alphabet has been on a tear because of the
Speaker 3: idea that it's generative. AI is managing to leap frog
Speaker 3: or at least push ahead some of the rivals.
Speaker 2: Yeah, it has, and look at the spike in the
Speaker 2: session on those headlines are coming up Coinbase releases earning
Speaker 2: after the closing bell, We're going to preview what to expect.
Speaker 2: This is Blomberg Tech, Asian delivery firm GRAB missed analysts
Speaker 2: expectations on its full year forecast to sign that weaker
Speaker 2: consumer sentiment is weighing on the company. Earlier, we spoke
Speaker 2: with GRAB CFO Peter Owe. Listen to this.
Speaker 18: It was an amazing year for us. We achieved some
Speaker 18: new mastones in the business. We have now fifty million
Speaker 18: monthly transacting users using our app constantly on a monthly basis.
Speaker 6: We also showed great profitability.
Speaker 18: In the business to over five hundred million dollars in
Speaker 18: the Justicey you be done, but also our first YEARNIT
Speaker 18: profit in the business. As we look at twenty twenty six,
Speaker 18: we're firing on aus cylinders and we are seeing good
Speaker 18: growth across all the platforms, across all the different products
Speaker 18: that we have today. We are confident going into twenty
Speaker 18: twenty six in terms of delivering that new guide that
Speaker 18: we gave up for twenty twenty six, but also we
Speaker 18: also gave a three year guidance at the same time
Speaker 18: of twenty percent revenue growth from twenty twenty five through
Speaker 18: twenty twenty eight.
Speaker 11: So really long term perspective here.
Speaker 3: Just dialing in on the profitability side, because you're right
Speaker 3: many loving the fact that you surprised you delivered this
Speaker 3: full year profit. What now to really drive up that
Speaker 3: return on equity? Our Bloomberg Intelligence analyst talking about maybe
Speaker 3: it's the net profit.
Speaker 11: To really be driven higher.
Speaker 3: Needs even more leaning into the fintech side of the
Speaker 3: business or some cost cuts.
Speaker 11: Where do you pull.
Speaker 18: Yeah, there's really three big pillars when you look at
Speaker 18: the business today. One is continuing the growth momentum in
Speaker 18: our rights business as well as our deliveries business. And
Speaker 18: our deliveries also now we have other products and services up.
Speaker 18: One example at grocery delivery continues to be one of
Speaker 18: our fastest growing it's actually growing one point seven times faster.
Speaker 6: Than our food business today.
Speaker 18: We also have dining in which is another unique set
Speaker 18: of product features that brings people the restaurants.
Speaker 6: Also, at the same time, financial service is.
Speaker 18: Also condused to be our fastest growing segment about business today.
Speaker 18: The loan box size that we have today, we've clicked
Speaker 18: over a billion dollars in loan portfolio and we expect
Speaker 18: to double that is we finish the year twenty twenty six.
Speaker 18: So we've got all the different products working together to
Speaker 18: really drive the growth in the missus but also margin
Speaker 18: expansion at the same.
Speaker 3: Time, delivery to fintech grabs CFO Peter Ue there talking
Speaker 3: of fintech. Coinbase was about to report earnings after the
Speaker 3: bell and this comes in the context of a deepening
Speaker 3: crypto route which has seen the value of bitcoin in particular,
Speaker 3: plunge look more than forty five percent from its peak,
Speaker 3: and with that, expectations of coinbases revenue are not looking
Speaker 3: pretty Bloomberg Senior crypto reporter Olga Caraff.
Speaker 11: Joins us now.
Speaker 3: And it's all about volumes, right, and they're going to
Speaker 3: pull back, so inherently revenues must have been hit.
Speaker 19: Absolutely, So what happens when prices drop continuously? A lot
Speaker 19: of the retail traders stay on the sidelines, and of
Speaker 19: course crypto exchanges they make a huge portion of their
Speaker 19: revenues from transaction fees, so they see a huge drop
Speaker 19: on that.
Speaker 2: What I understand or I get the volumes concerned, But
Speaker 2: I've always understood that like coinbase others that it competes with,
Speaker 2: they benefit from volatility, right because volatility you have to
Speaker 2: trade in one direction or another. Why is that not
Speaker 2: a good moment for them?
Speaker 19: So you're absolutely right, when there is high volatility, they
Speaker 19: do benefit. But typically what happens is that you have
Speaker 19: say several days of very high volatility, such as sort
Speaker 19: of in October when bitcoin dropped a lot, or in
Speaker 19: early February when again it dropped a lot. So you
Speaker 19: can have a lot of volatility, a lot of trading
Speaker 19: during those days, but then you can have a sort
Speaker 19: of slower activity, lower activity in the days kind of
Speaker 19: in between those very high volatility days, and that can
Speaker 19: impact exchanges like for instance, we've already seen Robinhood report.
Speaker 16: That is a fourth quarter crypto revenue.
Speaker 19: Was down thirty percent, So things are not looking good
Speaker 19: for crypto trading providers.
Speaker 3: Briefly, Coinbase has tried to diversify ahead of this. They're
Speaker 3: looking whether or not it's predictions markets, whether it's equity
Speaker 3: trading alga.
Speaker 11: Is that enough?
Speaker 19: So Coinbase has been trying to diversify for many years
Speaker 19: and these are really good initiatives that could really help
Speaker 19: in the years ahead. But right now, for instance, they
Speaker 19: just launched prediction markets, so it's a very.
Speaker 16: Very small revenue driver.
Speaker 19: They do have stable coin revenue coming from their revenue
Speaker 19: share with Circle that is helping to stabilize revenues quite
Speaker 19: a bit, but a.
Speaker 16: Lot of the the revenue portions are.
Speaker 2: Still all Bloomberg's ald creed. Thank you very much. That
Speaker 2: does it carry for this edition of Bloomberg Tech