Speaker 1: From Marhard where Innovation of money and power Collie in
Speaker 1: Silicon Vallet NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 3: I'm Caroline Heinde of Bluemug's world headquarters in New York
Speaker 3: and I.
Speaker 4: Met Ludlow in San Francisco. This has been big technology
Speaker 4: coming up.
Speaker 3: We have a mixed picture on US jobs and non
Speaker 3: farm payrolls. Plus the ism will get the read on
Speaker 3: the state of the labor market and how AI will
Speaker 3: impact hiring in twenty twenty four.
Speaker 4: Plus a tear down of Huawei's newest laptop reveals its
Speaker 4: chips empowered by TSMC, throwing cold water on chatter about
Speaker 4: another technological breakthrough for the sanctioned company. Details ahead and.
Speaker 5: An AI start up taking on Google.
Speaker 3: He gets fresh funding with backers including Jeff Bezos and
Speaker 3: Nvidia down with the CEO of Perplexity. AI is the
Speaker 3: company which is a half a billion dollar valuation just
Speaker 3: two years since its inception. And what is the read
Speaker 3: on the resilience of a consumer? What is the read
Speaker 3: on the resilience of the labor market? Very muney picture today,
Speaker 3: strong payrolls report, the nonfarm payrolls closing out twenty twenty three,
Speaker 3: just showing that the US adding two hundred and sixteen
Speaker 3: thousand jobs in the month of December and the jobless
Speaker 3: rate remaining unchanged. But then comes the US service sector
Speaker 3: number and that shows sagnation and the end of twenty
Speaker 3: twenty three and the gauge of employment and indeed that
Speaker 3: particular signal was its biggest contraction in more than three years.
Speaker 3: Glad that we've got some nuanced to be put to
Speaker 3: it with Corey Style an economist for the Indeed Hiring
Speaker 3: Lab and just wade through these waters right now, What
Speaker 3: are you seeing at your hiring lab in terms of
Speaker 3: the resilience of the US labor market.
Speaker 6: Yeah, I mean what we're seeing right now in our
Speaker 6: postings data from Indeed is very much what we've seen
Speaker 6: in the overall labor market picture from these government numbers,
Speaker 6: which is we've seen, you know, kind of a decline
Speaker 6: in job postings throughout the year, but still a much
Speaker 6: stronger labor market than we had pre pandemic. You know,
Speaker 6: So things have soppened over the last year, but we're
Speaker 6: still above where we were in early twenty twenty.
Speaker 4: Corey zeroing in on the sort of technology sectors perspective,
Speaker 4: it's actually interesting to look at where those gains were.
Speaker 7: They were not in the technology sector. To me, it.
Speaker 4: Seems like a lot of public sector jobs, right education,
Speaker 4: health services, government, and to some extent, leisure in hospitality.
Speaker 7: Give us the tech story if there is one.
Speaker 6: Yeah, So, I mean, I think the tech story is
Speaker 6: a big part of the story in the labor market,
Speaker 6: especially as we look back to kind of that pandemic baseline.
Speaker 6: You know, what we saw was is the pandemic hit,
Speaker 6: a lot of job postings fell together across all sectors.
Speaker 6: Then we started seeing those sectors kind of all come
Speaker 6: up together, and I think twenty twenty three really showed
Speaker 6: us it was a year of divergence where we started
Speaker 6: seeing more strength in these kind of in person type sectors.
Speaker 6: You know, healthcare has been kind of that perennial powerhouse
Speaker 6: in terms of adding jobs, but we definitely saw some
Speaker 6: kind of weakening demand in tech and some of these
Speaker 6: other areas. And so I think ultimately the tech story
Speaker 6: here is that, you know, tech has taken a little
Speaker 6: more of a brunt in terms of a drop in
Speaker 6: job postings over the last year, but really that's been
Speaker 6: a part of this larger divergence. So we're adding jobs
Speaker 6: over all at the top level once we roll it up,
Speaker 6: But once you kind of look under the hood, you
Speaker 6: can see kind of some of these differences that are
Speaker 6: beginning to emerge between different sectors.
Speaker 3: What's interesting is there's divergence within the tech space too.
Speaker 3: I'm pretty sure that anything with an AI name within
Speaker 3: it has been hiring pretty well, and other areas a
Speaker 3: little bit more bleak. Just start there, rather than how
Speaker 3: AI is affecting the rest of the labor market, let's
Speaker 3: just show how is it affecting tech jobs that aren't
Speaker 3: off OKOI.
Speaker 6: Yeah, I mean, so ultimately, we have seen a pretty
Speaker 6: dramatic increase in the number of job postings asking for
Speaker 6: you know, these types of generative AI type of skills,
Speaker 6: you know, really the new you know, the chat GPTs,
Speaker 6: the generative AI skills. Obviously, AI kind of in a
Speaker 6: broader sense of self driving cars and all those technologies
Speaker 6: have been something we've discussed for the past couple of years.
Speaker 6: But what's interesting to note is that in the trend
Speaker 6: of generative AI in particular, you know, last year there
Speaker 6: were basically no jobs talking about these technologies, and what
Speaker 6: we've seen is that in the last year, there's been
Speaker 6: a dramatic increase. You know, if you look at the
Speaker 6: graph for job postings with the genera of AI terms
Speaker 6: being asked or skills being asked by employers, it's basically
Speaker 6: a hockey stick. It was zero last year, and this
Speaker 6: is the first time we're kind of sharing this data
Speaker 6: publicly with the newest data from December, but at the
Speaker 6: end of December, there was about point zero five or
Speaker 6: point zero eighty five percent of jobs that were mentioning
Speaker 6: gener of AI. So still overall a pretty small portion
Speaker 6: of a labor market, but when you think about what
Speaker 6: it means to go from zero to almost a tenth
Speaker 6: of a percent in a year, that's starting to really
Speaker 6: show some momentum for these types of jobs.
Speaker 4: The other thing in the domain of technology that I've
Speaker 4: been thinking about is participation in the economy and particularly
Speaker 4: the age of workers. I think back to when we
Speaker 4: talked about the union efforts with regards to the automakers
Speaker 4: and ev and they'll concern down the line is that
Speaker 4: there is a whole generation of workforce that will retire
Speaker 4: in the coming years, and there are people sitting on
Speaker 4: the sidelines what you would call prime age workers.
Speaker 7: Yeah, and that's a great point.
Speaker 6: I think that's one of the kind of key points
Speaker 6: that we saw this morning in the jobs report is that, yes,
Speaker 6: it was a jobs report where the number of jobs
Speaker 6: we added really surpassed kind of a lot of expectations,
Speaker 6: which was kind of a fit for you know, kind
Speaker 6: of wrap up of what we saw in twenty twenty three.
Speaker 6: But I think what was different from what we saw
Speaker 6: in the rest of twenty twenty three is that in
Speaker 6: the last couple months, we have seen the labor force
Speaker 6: participation rate, especially among those primage workers, start to drop off,
Speaker 6: you know, and you talk about, you know, kind of
Speaker 6: the demographic headwinds as we have fewer workers aging in
Speaker 6: and many more workers aging out. You know, the US
Speaker 6: is really facing kind of an uphill battle in terms
Speaker 6: of making sure the labor supply is there, because adding
Speaker 6: the jobs and having the job openings is one thing,
Speaker 6: but finding the people to fill those jobs, you know,
Speaker 6: is a vital part of actually making sure that the
Speaker 6: economy and the labor market continues to be robust.
Speaker 4: Corey style of indeed hiring lab just terrific data granular
Speaker 4: data about the technology sector and jobs. Thank you, Let's
Speaker 4: keep the conversation going. Is the labor market show some
Speaker 4: signs of cooling? How is AI being implemented, particularly in
Speaker 4: the financial services industry to help consumers and workers build
Speaker 4: a safety net. Joining us now as Liz Davidson, founder
Speaker 4: and CEO of financial Finess, which offers personalized financial coaching,
Speaker 4: both live and AI powered to millions of employees, the
Speaker 4: job state always gives us an opportunity to ask about
Speaker 4: what is really happening right now in the way that
Speaker 4: AI is impacting our daily task, but also, as our
Speaker 4: last guest pointed out, hiring and I just asked you
Speaker 4: in the first instance and kind of give us a
Speaker 4: read of where you think that is.
Speaker 2: Yeah, it's very interesting those hiring numbers that were just articulated.
Speaker 2: What we're seeing is a whole lot of talk in
Speaker 2: the financial services industry about AI and things that will
Speaker 2: be happening in the future, but it's still very, very early,
Speaker 2: and there's a lot of concerns about compliance and how
Speaker 2: do you make this safe for consumers because we all
Speaker 2: know open AI can really be problematic. We work in
Speaker 2: the financial coaching industry, providing financial coaching as an employee
Speaker 2: benefit and have managed to leverage AI using vetted content,
Speaker 2: only vetted content from on staff certified financial planners, so
Speaker 2: that any questions that are asked in this virtual coaching
Speaker 2: process where it asks you questions and you ask you questions,
Speaker 2: any of that all points to our content and it's
Speaker 2: completely safe and contained. And I think that's really you know,
Speaker 2: one of the biggest hurdles that financial services companies need
Speaker 2: to get through is how do you leverage this powerful
Speaker 2: tool but make sure it's safe.
Speaker 3: And also how do you ensure you're building yourself security
Speaker 3: financial independence, particularly when you do start to see perhaps
Speaker 3: the overall jobs market soften a little bit, but you've
Speaker 3: actually managed to secure a bit of a wage increase
Speaker 3: and you're wanting it ensure that you've got your you know,
Speaker 3: underall overall safety net lined up list.
Speaker 5: You use something called the.
Speaker 3: Artificial intelligence motivating employees everywhere any basically is how you
Speaker 3: call it. Talk to us about how AI has really
Speaker 3: managed to either reduce the amount of financial advisors one
Speaker 3: needs to get the right information at the right time,
Speaker 3: How are employees engaging with this more now than ever
Speaker 3: because they feel a little bit less secure than perhaps
Speaker 3: lost you.
Speaker 2: Absolutely, And the great thing about AI is it allows
Speaker 2: what we call mass personalization, so you can reach an
Speaker 2: incredibly large number of people, but in an incredibly personalized way.
Speaker 2: And we always say people's favorite financial topic is themselves.
Speaker 2: It's not act allocation, and it's not stop actions, it's
Speaker 2: themselves and their families and their financial security. So having
Speaker 2: the ability to have a virtual financial coach that can
Speaker 2: walk you through these things, that you can ask questions
Speaker 2: too and get vetted answers that you are fully confident
Speaker 2: or in your best interests free you have any conflicts
Speaker 2: of interest, is tremendous. Now, the interesting question is how
Speaker 2: does this work with an advisor?
Speaker 5: And I would.
Speaker 2: Say, you know, in our model, we have seen that
Speaker 2: both leverage each other. Our financial coaches have trained the AI,
Speaker 2: but the AI is also helping them become better financial coaches,
Speaker 2: both in terms of understanding mass trends, aggregated trends, but
Speaker 2: also individuals, you know, profiles. So we've become more efficient,
Speaker 2: we've become able to help more people. AI has an
Speaker 2: exponential power that is tremendous for contexts. Last year we
Speaker 2: had one point six million interactions I'm sorry two thousand,
Speaker 2: twenty twenty two, one point six million interactions, twenty twenty three,
Speaker 2: eight point three million interactions.
Speaker 8: There is such an incredible.
Speaker 2: Snowball effect when you use this technology right, especially in
Speaker 2: tandem with human financial coaches or.
Speaker 3: Advisors, nesle, general Mills, NFL players, associations, some of those
Speaker 3: that you served as Davidson Financial Finness founder.
Speaker 5: We thank you and CEO.
Speaker 3: Meanwhile, to turn our attention to another story that we
Speaker 3: were following today, Tesla will deploy an over the air
Speaker 3: software fixed to more than one point six million vehicles
Speaker 3: in China, especially every car it's ever sold there.
Speaker 5: That's of course a mid.
Speaker 3: Heightened risk potentially with its autopilot functions and the move mirrors.
Speaker 3: That recall is sometimes they're called two million vehicles in
Speaker 3: the US last month.
Speaker 4: Then, sticking with Tesla in China, the other big story,
Speaker 4: the electric vehicle maker has been overtaken by China's BYD
Speaker 4: as the world's top selling electric car maker. Bloomberg's Weekly
Speaker 4: doc takes a look at how that happened.
Speaker 9: It likes to describe itself as.
Speaker 10: The biggest car brand you've never heard of.
Speaker 9: Now China's BYD has overtaken Tesla as the world's largest
Speaker 9: seller of electric vehicles. Its success is a root of
Speaker 9: long term strategic thinking on the part of BYD itself
Speaker 9: and the Chinese government.
Speaker 11: We've arguably never seen thing like this in terms of,
Speaker 11: you know, the amount of support that China has extended
Speaker 11: to automakers, specifically pertaining to evs.
Speaker 9: Most of BYD's cars are simply a lot cheaper than
Speaker 9: tesselas they.
Speaker 12: Have very cheap models starting from ten thousand US dollars.
Speaker 12: The most important factor is that BID is the only
Speaker 12: auto maker that produces all of its batteries in house.
Speaker 9: Making its own batteries and other components helps it reduce
Speaker 9: a lot of costs. All of this is setting China
Speaker 9: up to be the dominant global player in the transportation
Speaker 9: of the future electric vehicles, a business that could be
Speaker 9: worth eight point eight trillion dollars by the end of
Speaker 9: a decade.
Speaker 4: I highly recommend check out the full Dark eight minutes
Speaker 4: packed with data and analysis are coming up here On
Speaker 4: Bluebeo technology, a tear down of Huawei's newest laptop shows
Speaker 4: it's powered by a chip made in Taiwan, quashing talks
Speaker 4: of another mainland Chinese technological breakthrough. We got those details. Next,
Speaker 4: this is Bloomberg.
Speaker 3: Now as a new teardown video by tech Insights new
Speaker 3: findings showing that Huawei's latest laptop it's actually run on
Speaker 3: a chip made by Taiwan's Semiconductor to SMC.
Speaker 5: It throws cold water on well that talk that.
Speaker 3: Was happening about another big Chinese advance and technology amid
Speaker 3: this US China tech war. And we're going to break
Speaker 3: it down with you for a moment because this was
Speaker 3: commissioned by Bloomberg to do this tear down because suddenly
Speaker 3: there was this talk that maybe an even more advanced
Speaker 3: chip than have been thought it was inside this laptop.
Speaker 5: But not the case.
Speaker 4: So tech Insights is the same firm that Bloomberg News
Speaker 4: partnered with on the teardown of the Huawei Mate sixty
Speaker 4: or Mate sixty pro smartphone, and I would look at
Speaker 4: it paradoxically. First, if they had found that that five
Speaker 4: nanometer proessa in the laptop had indeed been made by SMICK,
Speaker 4: China's mainland domestic chipfab, that would be huge news because
Speaker 4: it would demonstrates and technological progress.
Speaker 7: But it wasn't.
Speaker 4: It was indeed made by TSMC a five and animeter
Speaker 4: node used to make the processor.
Speaker 7: But here's the thing.
Speaker 4: It was made that generation back in twenty twenty, so
Speaker 4: it's not even at the cutting edge, and it wasn't
Speaker 4: made in China.
Speaker 3: And also, what does it show about what Huawet's been
Speaker 3: up to since twenty twenty. Twenty nineteen was when, of
Speaker 3: course it was first ploll on the entities list. Twenty
Speaker 3: twenty is when TSMC was no longer allowed to basically
Speaker 3: sell to it. But they would just stop piling were
Speaker 3: they to be able to get this chip.
Speaker 4: Yeah, there is evidence that they had been stockpiling chips
Speaker 4: that at the time.
Speaker 7: Were at the cutting edge and now are not.
Speaker 4: The latest generation of node is three and animeter right,
Speaker 4: that is used by TSMC and prevalent in many consumer electronics,
Speaker 4: for example those made Apple. What we found in the
Speaker 4: teardown of the Huawei laptop was a five nanometer produced
Speaker 4: processor the care in nine hundred and six C. So
Speaker 4: it's two generations removed from the latest but one generation
Speaker 4: ahead of what we think China had access to, even
Speaker 4: though it's still dated.
Speaker 5: I love these teardowns are so useful.
Speaker 7: Yeah.
Speaker 4: Well, the thing about it as well, is that you
Speaker 4: lift the lid, you get the analysis from the experts,
Speaker 4: you answer a lot of questions about where we're at
Speaker 4: in this tech war and supply chain.
Speaker 3: And actually what sunk the share prices of some of
Speaker 3: those that were traded over in China. The anticipation had
Speaker 3: perhaps run up on smoke, and actually it pulled back
Speaker 3: a little bit.
Speaker 5: Time now for talking tech.
Speaker 3: First up, Fox con warned of its fourth consecutive decline
Speaker 3: and quarterly sales. Now the Apple partner reported a steep
Speaker 3: twenty seven percent drop in December sales. Now, is these
Speaker 3: sales falling in the current period as well? So I
Speaker 3: think to concerns about all that slowing demand we're talking
Speaker 3: on for the latest iPhone. And as Twitch tries to
Speaker 3: take on the likes of TikTok is a new discovery
Speaker 3: feed for short videos, well, it's raising.
Speaker 5: Concerns for kids safety.
Speaker 3: Now, an analysis by Bloomberg News of nearly eleven hundred clips
Speaker 3: on Twitch found that at least eighty three of the
Speaker 3: short videos contain sexualized content involving children. Once Bloomberg alar
Speaker 3: to the company, Twitch removed that prohibited content. Plus American Tower, well,
Speaker 3: it's agreed to sell its operations in India to an
Speaker 3: affiliate of Brookfield Asset Management. Is then a deal worth
Speaker 3: about two and a half billion dollars in the US
Speaker 3: networking company now. The deal is expected to close in
Speaker 3: the second half of this year.
Speaker 5: That's according to the company.
Speaker 12: Ed.
Speaker 4: Yeah, another news story we're tracking in the world of
Speaker 4: vc CO two closing its European office in London two
Speaker 4: years after they opened it. The move is part of
Speaker 4: a wider strategy overhaul to adjust to a downturn in
Speaker 4: the technology market. Let's bring in Bloombergs mark Bergen out
Speaker 4: there in London. I mean, the stated reason is streamlining
Speaker 4: the investment approach in Europe. But what else do we
Speaker 4: know about what was a short lived stay in London.
Speaker 10: Yeah, I think there's a couple off in factors.
Speaker 13: One say is unique to the fund SOKO two has
Speaker 13: been going through this big adjustment and they've lost a
Speaker 13: managing partner in last months. They had a write down
Speaker 13: of about thirty percent that we reported in November.
Speaker 10: On their portfolio.
Speaker 13: Some of that because they mark down some of their
Speaker 13: startup holdings as much as ninety percent. I think this
Speaker 13: is something a lot of firms are doing they've raised
Speaker 13: a new fund with this discount, this kind of rare,
Speaker 13: unusual move where they're letting the investors in their fund
Speaker 13: get into startups at a discounted rate in exchange for
Speaker 13: cutting some of the fees. And so they're making some
Speaker 13: different strategic changes. I think there's also a bigger trend,
Speaker 13: which is, you know, they're not the first VC fund
Speaker 13: in the past six months to pull out Omer's ventures.
Speaker 13: The Canadian Pension Fund left Europe. We reported that this
Speaker 13: summer there's not a lot of deal activity in.
Speaker 7: Anything but the early stage.
Speaker 13: So these later stage startups growth, it's been pretty quiet
Speaker 13: here and so maybe they're the tea leaves on that
Speaker 13: going forward.
Speaker 3: But why then, has iv P has Andrewson Horowitz just
Speaker 3: set up shop in London? What are they saying that
Speaker 3: perhaps while CO two.
Speaker 13: Isn't It's a really good question, I think, I mean,
Speaker 13: and Dresen came here at least they announced it as
Speaker 13: focused on crypto. As far as they know, they haven't
Speaker 13: made other investments, but they have, you know, they just
Speaker 13: we reported earlier they came in this big round from Mistral,
Speaker 13: the French company that was out of their California team.
Speaker 10: But you know they will CO two says the same thing.
Speaker 13: They're going to continue to invest in Europe out of California,
Speaker 13: out of New York. I think different funds have a
Speaker 13: different approach about whether or not it's worthwhile to have
Speaker 13: people on the ground where they can go and meet
Speaker 13: the startups in Paris, in Scandinavia, in Eastern Europe, where
Speaker 13: you know the UiPath which was a co to investment.
Speaker 13: That people here talk a lot about the value of
Speaker 13: being on the ground. And that being said, this is
Speaker 13: obviously some some ferns and maybe their LPs think it's worthwhile.
Speaker 3: Not to be there were early backer in Spotify and
Speaker 3: new iPath. We'll see how much they can continue to
Speaker 3: get in on some of these European startups, even though
Speaker 3: perhaps it's been a tougher time for these crossover funds.
Speaker 3: In particular Mattberg and brilliant and really well read story,
Speaker 3: we thank you so much for all the lives, comings
Speaker 3: and goings in BC in Europe. Meanwhile, let's go into
Speaker 3: this conversation with Catherine Dowling, general counsel and chief compliance
Speaker 3: Officer at bit Wise Asset Management, and you are gazing
Speaker 3: into those sec stars as well, and ultimately it is
Speaker 3: important as to whether or not we get the yay
Speaker 3: or nay by January the tenth. Are you more on
Speaker 3: the probabilities really stacked towards a yes.
Speaker 8: I am on record with your colleagues saying that my
Speaker 8: prediction was mid January, and I have not changed my
Speaker 8: opinion on that. I can't speak to our specific conversations
Speaker 8: with the SEC. But if you look at what's happening
Speaker 8: out in the public, yes, there's a lot of fake
Speaker 8: news and some fake bumps, but if you can do
Speaker 8: the actual documents being fun, you're seeing that there are
Speaker 8: fewer and fewer blanks in those documents, and you can
Speaker 8: look at those documents and see what the basics of
Speaker 8: the conversations are looking like with the SEC. The SEC
Speaker 8: is doing their job. They're working hard. They are working
Speaker 8: behind the scenes and did over the holidays to make
Speaker 8: sure that what's known as the s one side of
Speaker 8: the House, the disclosure document, has all the investor protections
Speaker 8: in it, all the disclosures. They've been pushing on the
Speaker 8: issuers as they should to make sure that all of
Speaker 8: the information is set forth in that document, that it's
Speaker 8: very clear. And on the other side of the house,
Speaker 8: we have the nineteen before document the exchange document, and
Speaker 8: you'll see that there's information that is being matched up
Speaker 8: between those two documents, so you can see that progression
Speaker 8: in the public record as issuers work to work on
Speaker 8: both sides of those documents, and the SEC also works
Speaker 8: to communicate with the various issuers behind the scenes, and
Speaker 8: all of this is going to be a huge win
Speaker 8: for investors when it does come out of the gates.
Speaker 3: As one of the applicants for spot bitcoin ETFE, what
Speaker 3: is the upside here? What sort of fun flows you anticipating.
Speaker 3: We got a general anticipation a one to two billion,
Speaker 3: for example, on the first week that it actually is.
Speaker 5: Able to be traded.
Speaker 3: Do you abide by that sort of level of increase
Speaker 3: and interest coming from institutions and retail on that first week.
Speaker 8: Yes, Caroline, we expect a big uptick out of the gates,
Speaker 8: and part of that we look at the history of
Speaker 8: gold ETFs, we look at the Bitcoin futures ETF so
Speaker 8: we do have historic issues to look at to see
Speaker 8: what we can expect, and also with this issuance, the
Speaker 8: expectation if all goes as we believe it should be going,
Speaker 8: we'll have a number of issuers come out of the
Speaker 8: gates at the same time, so you will have a
Speaker 8: number of options for investors. And from a demand standpoint,
Speaker 8: bitwise has just put out our or research survey with
Speaker 8: financial advisors, and a number of financial advisors have been
Speaker 8: waiting for this moment to get into bitcoin for their
Speaker 8: clients because it's just a much easier and we're transparent
Speaker 8: way for them to provide Bitcoin exposure to their clients, Catherine.
Speaker 4: As Caroline pointed out, bitwise asset management is an applicant.
Speaker 4: You've applied for an ETF, but I'm really interested in
Speaker 4: your role as general counsel and chief compliance officer and
Speaker 4: what you're doing every day. You know, you said you're
Speaker 4: stuck by your mid January call, But there's only one
Speaker 4: party in all of this that actually knows, and that's
Speaker 4: the SEC.
Speaker 8: Yes, the SEC is definitely the zeus in this operation.
Speaker 8: But what we can also see is looking in history,
Speaker 8: the SEC doesn't want they don't want hunger games here.
Speaker 8: They want what's best for the investor, which is a
Speaker 8: number of issuers coming out. So as you see from
Speaker 8: the public record, they're speaking with all of us and
Speaker 8: to your question of what you know we do or
Speaker 8: what I do in my role where speaking to them,
Speaker 8: we're answering their questions, we're working with them, And what
Speaker 8: I can tell you is that they have been very
Speaker 8: dedicated to making sure that one if you kind of
Speaker 8: go back a little bit in time, first it started
Speaker 8: as this kind of academic conversation Ivory Tower, you know,
Speaker 8: what is this product? How does it work? And then
Speaker 8: we moved into a higher energy, a little more intensity
Speaker 8: about Okay, let's look at the nuts and bolts, how
Speaker 8: does this really work. Who's holding the bitcoin, where's the risk,
Speaker 8: where's the cash coming in? Who are the different players?
Speaker 8: And you know that's why you're seeing in the public
Speaker 8: record a concern with the SEC of let's list the aps,
Speaker 8: Let's get the people out here, the entities, the parties
Speaker 8: who are going to be engaging in this process, so
Speaker 8: that there is an understanding and so we can have
Speaker 8: a fulsome disclosure about how this product works. So you
Speaker 8: saw that progression with the SEC engaging on understanding how
Speaker 8: this product works.
Speaker 14: And I think they've been.
Speaker 8: Pretty dedicated to making sure they understand that because they
Speaker 8: have to first understand it to make sure that the
Speaker 8: correct disclosures are in the prospectus, So that's what's going
Speaker 8: on behind the scenes. But you can see that reflected
Speaker 8: in the amended s ones that you're seeing that everybody's following.
Speaker 8: You can see the fewer blanks happening, and you can
Speaker 8: actually back and see the additional disclosures that are being
Speaker 8: added as this process goes forward and progresses.
Speaker 4: A very simple question in the thirty seconds you've got,
Speaker 4: is the SEC and the United States a good regulator,
Speaker 4: a competent regulator for this field?
Speaker 5: They are absolutely, I think.
Speaker 8: I know we've had a lot of dialogue about Obviously,
Speaker 8: other countries have gotten this product out in advance, but
Speaker 8: in our country, we have a number of regulators and
Speaker 8: they're looking at what they should be looking at. Has
Speaker 8: this progressed more slowly than many of us would have liked. Yes,
Speaker 8: But at the end of the day, we're going to
Speaker 8: get a product that is better for investors. It's going
Speaker 8: to have the disclosures, it's going to have the information.
Speaker 8: They're going to have a more fulsome understanding of how
Speaker 8: this product works, and that's going to make everybody able
Speaker 8: to make a better decision if they want to include
Speaker 8: this as one of their investment.
Speaker 4: Choices, Catherine Dowling, General Counsel, Chief Compliance Officer over a
Speaker 4: bit wise asset management.
Speaker 7: Thank you okay.
Speaker 4: As open Ai is due to complete its tender offer,
Speaker 4: the company is also talking to dozens of publishers about
Speaker 4: striking deals to license their articles. This is the startup
Speaker 4: looks for content to train its artificial intelligence models. Let's
Speaker 4: bring in Bloomberg's Sharen Gafari for more. I've been reading
Speaker 4: a lot about this in the press over weeks and months,
Speaker 4: the value of data, who they're talking to and who
Speaker 4: they're not.
Speaker 7: What do we know?
Speaker 14: So we know that they are speaking to dozens of
Speaker 14: publishers about significant deals, and this would be both to
Speaker 14: pay for these publishers to give data that will help
Speaker 14: Opening Eye train its models, as well as to more
Speaker 14: prominently display these articles themselves and the output of what
Speaker 14: chat GPT tells you.
Speaker 3: So while they're trying to navigate potential well future cases
Speaker 3: of course, whether being sued by The New York Times,
Speaker 3: are trying to ensure that other publishers getting on board
Speaker 3: all of this tovindicate their business model. Ultimately, there's at
Speaker 3: a time where we know the company is a perhaps
Speaker 3: looking for new funding, but also completing on a tender
Speaker 3: offer where they're giving some liquidity to the actual employee
Speaker 3: base at the moment, how is that tender offer looking.
Speaker 14: That's correct, So as far as we know, the tender
Speaker 14: offer is still on. It's set actually to close today.
Speaker 14: Remember that was basically an offer that allows employees to
Speaker 14: sell their shares in the company to investors. So it's
Speaker 14: offering employees a chance to liquidate the assets that they
Speaker 14: have in open Ai. And it was set for eighty
Speaker 14: six billion, and it was extended a little bit in
Speaker 14: the chaos that ensued during the board ouster. So this
Speaker 14: is an extended deadline.
Speaker 4: So what I heard is that you know, the money's
Speaker 4: been wired. What needs to happen now, Caro is open
Speaker 4: AI does a transfer of ownership for the shares and
Speaker 4: then issues new share certificates.
Speaker 7: So it seems like it's buttoned up. But as Shearon
Speaker 7: and I reported before the holidays, they're.
Speaker 4: Going to do a primary straight away more than one
Speaker 4: hundred billion dollar valuation. Can those guys just come on,
Speaker 4: you know, we all need a break at some point, Carrot.
Speaker 3: Yeah, interesting as to whether or not you've been selling
Speaker 3: out at a moment of a slightly lower evaluation that
Speaker 3: you're about to see of current shareholding the numbered at
Speaker 3: It's fascinating ongoing and continuing conversation that you and Sharon
Speaker 3: have been leading me. Thank you so much, Sharon Gaffride
Speaker 3: to just take us through what's happening in the midst
Speaker 3: of a tender offer and new primary raise. Meanwhile, let's
Speaker 3: continue the conversation on like the secondary market activity a bit.
Speaker 3: Greg Martin's with us co founder and managing director at
Speaker 3: rain Maker Securities mid market investment bank broke a deeda
Speaker 3: specializing in pre IPO investing, and I mean ed just
Speaker 3: told us about the state of play where we are
Speaker 3: in terms of this tender offer. But the fact that
Speaker 3: also open Ai might raise new funds just tell us
Speaker 3: about the extent of demand to get into this company
Speaker 3: despite some of the internal turmoil.
Speaker 1: Well, great to see you again and thank you for having me.
Speaker 1: You know, open Ai has been one of the hottest
Speaker 1: you know companies, certainly in the last year. I mean
Speaker 1: it's its previous tender was was you know, at twenty
Speaker 1: eight billion, and now it's three x that, and as
Speaker 1: you've mentioned that it may be going up even more
Speaker 1: in a primary round. We have seen you know, almost
Speaker 1: unlimited demand for open Ai this year, and of course
Speaker 1: it's a pretty new phenomenon. I mean, the company just
Speaker 1: released chat GQBT in November of twenty twenty two, so
Speaker 1: I mean, it's revenues have gone from zero to a
Speaker 1: billion six run rate reported you know, in the end
Speaker 1: of twenty three, and I'm hearing they might finish twenty
Speaker 1: twenty four, you know, closer to five billions. So the
Speaker 1: growth in the company is immense, and the demand for
Speaker 1: stock and open Ai is also immense. And we're seeing
Speaker 1: a ton of trading and interest on our platform today
Speaker 1: and I think that's why you're seeing, you know, the
Speaker 1: valuation continue to go up even a month after a
Speaker 1: tender is about to close.
Speaker 4: It's that trading, active tense that I'm really interested in.
Speaker 4: You know, the tender is a transaction, right, and my
Speaker 4: understanding is is very hard to get in on that tender.
Speaker 4: But what struck me in the days prior to Sam
Speaker 4: Altman initially being dismissed by the board was how liquid
Speaker 4: the market was the secondary's market for an open Ai shares,
Speaker 4: And I just wondered if you could explain to us
Speaker 4: how that works.
Speaker 1: Yeah, well, I mean, just to be clear, the week
Speaker 1: that Sam Altman, you know, decided to leave and then
Speaker 1: come back again, was definitely a near term wet blank
Speaker 1: I don't.
Speaker 7: Know that he decided to leave ground. I think he
Speaker 7: was fired, but things keep going.
Speaker 1: That may be, but it was a wet blanker for
Speaker 1: a moment in time. There was a lot of you know,
Speaker 1: worried investors, you know, and of course I think a
Speaker 1: lot of that has been solidified. I think there's a
Speaker 1: feeling of stability now the team is back in place.
Speaker 1: But you know, trading is interesting because, as I said,
Speaker 1: there's actually consummating a trade is challenging. I mean, there's
Speaker 1: there are a lot of bits. There's people who want
Speaker 1: to be owners of open ai. Obviously it's forty nine
Speaker 1: percent owned by Microsoft. It has a funky corporate structure,
Speaker 1: you know, with the combination of a non for profit,
Speaker 1: and so I think people are setting up entities, you know,
Speaker 1: special purpose vehicles, et cetera, by which they hold the
Speaker 1: shares and they're actually sometimes selling units in those special
Speaker 1: purpose vehicles versus actually trading the shares. In some cases,
Speaker 1: clearly the tender offer is actually a direct trade of shares,
Speaker 1: but people are trying to find all kinds of innovative
Speaker 1: ways to actually trade the shares, and we're facilitating a
Speaker 1: lot of that at Rainmaker.
Speaker 3: Is there any other company that can compare? I mean
Speaker 3: there are some other very heady valuations in the private
Speaker 3: market still, but they've been fewer and further between. They're
Speaker 3: just some obvious culprits that everyone wants in and everyone
Speaker 3: Oh the others are just second here.
Speaker 1: Yeah, you know, the big I mean the biggest in
Speaker 1: the last couple of years is SpaceX. SpaceX is literally
Speaker 1: and figuratively defied gravity. You know, in twenty twenty two,
Speaker 1: when when most stocks were down, SpaceX was continuing to rise,
Speaker 1: and we see a tender being announced in SpaceX to
Speaker 1: the tune of about another seven hundred and fifty million
Speaker 1: at an eight and eighty billion valuation. So SpaceX has
Speaker 1: has been our hottest stock on our platform for several
Speaker 1: years now and continues to be even though the valuation
Speaker 1: has reached a very high level. I think it's something
Speaker 1: like twenty times you know, projected twenty twenty three revenues.
Speaker 1: So you know, SpaceX has been very hot. Anything AI frankly,
Speaker 1: you know since chat GPT launched, you know, whether it's anthropic.
Speaker 1: We just saw propic announcement valuation around and at the
Speaker 1: end of December we we see, you know, Elon Musk
Speaker 1: himself has Xai, which you know I'm hearing is coming
Speaker 1: out at a thirty billion valuation. So AI companies are
Speaker 1: are definitely hot across the board, you know, clearly led
Speaker 1: by open Ai. But I think that's where we saw
Speaker 1: the rise of Nvidia and the public markets and we
Speaker 1: see the numbers that are putting up. There's clearly a
Speaker 1: lot of demand, uh, you know for AI capabilities, and
Speaker 1: so companies that have real AI businesses, real technology are
Speaker 1: seeing a lot of demand.
Speaker 4: The volume of demands there that specifically, where is it
Speaker 4: coming from? Institutionals, high net worth individuals, who's buying?
Speaker 1: It's all of you above, I mean, clearly led by
Speaker 1: the institutions who have you know, the larger pockets of capital.
Speaker 1: So definitely a strong, strong demand from institutional capital, but
Speaker 1: it goes to family offices, it goes to high networth individuals.
Speaker 1: I think there's a fear of missing out right now,
Speaker 1: and I think it's also frankly, there's a vanity play.
Speaker 1: I think people like to say they own an AI company,
Speaker 1: and you know, I think there's there's still a little
Speaker 1: bit to be desired in terms of properly valuing these
Speaker 1: businesses because the revenues are still very light, and so
Speaker 1: a lot of it's based on the prospects and hopes
Speaker 1: for the future. And you know, we'll see what happens
Speaker 1: if pro starts to normalize in some of these companies,
Speaker 1: But right now, the demand is very insatiable across the
Speaker 1: board for.
Speaker 7: What it's worth.
Speaker 4: Greg, that's SpaceX tender at one hundred and eighty billion.
Speaker 4: I don't think they announced it. I think Katie roof
Speaker 4: and reported it on December twelfth, But I appreciate the
Speaker 4: Greg Martin co found it.
Speaker 1: Give you proper credit for that. That was right now?
Speaker 7: All good?
Speaker 5: Oh he'll don't you worry.
Speaker 7: We appreciate the analysis.
Speaker 4: Greg Martin, founder and managing director of Rainmaker Securities.
Speaker 7: Thank you.
Speaker 4: Now coming up here on Bloomberg Technology, one AI powered
Speaker 4: search engine is aiming to take on the likes of
Speaker 4: Google and Chat GPT. We're going to talk to the
Speaker 4: CEO Perplexity. That's next.
Speaker 7: This is Bloomberg.
Speaker 4: Perplexity says it's AI powered conversational search engine has the
Speaker 4: chops to take on the likes of Google and chat GPT,
Speaker 4: and backers like Jeff Bezos and Nvidia agree. The startups
Speaker 4: just raised seventy three zero point six million dollars in
Speaker 4: a series B round. Here to tell us more is
Speaker 4: Aravin Trinavass, CEO of Perplexity, Interesting backers, interesting competition.
Speaker 7: Let's just start with the technology.
Speaker 4: What is it that's unique about either your model or
Speaker 4: just the tool, the generative AI tool?
Speaker 10: Yeah, so thank you for having me here.
Speaker 15: So Perplexity is an AI power conversational answer engine.
Speaker 10: It's not a search engine.
Speaker 15: So you ask a query, you ask a question, it
Speaker 15: just directly gives you the answer.
Speaker 10: The main difference from other.
Speaker 15: Chatbots like Chadgipt is that you always get the sources,
Speaker 15: so it only says what exists on the web already,
Speaker 15: and it clearly deals to user where every part of
Speaker 15: the answer, Where is it coming from on the web.
Speaker 4: One of the backers or investors is in Nvidia, but
Speaker 4: are they also supporting you in compute? Did you get
Speaker 4: access to an H one hundred cluster?
Speaker 7: For example?
Speaker 15: So in video is an investor in US strategically where
Speaker 15: we partner with them to work on frameworks for training
Speaker 15: and inference. But we have all our compute cluster on
Speaker 15: other hyperscalers like AWS.
Speaker 7: Competition.
Speaker 4: I get that the uniqueness is that the source is
Speaker 4: clearly labeled, but you're directly taking on chat GPT barred.
Speaker 4: Is the sourcing enough to sort of differentiate in that market?
Speaker 15: Yeah, So our perspective is that AI chad bots are
Speaker 15: going to be.
Speaker 10: Of wide variety. There.
Speaker 15: It's going to be a chadbot for you to go
Speaker 15: and brainstorm new ideas and interact with it to like
Speaker 15: ask for ideas for birthday pressens, or generate essays or
Speaker 15: write poems. There's going to be character AI like chadbots,
Speaker 15: very chatting with personalities.
Speaker 10: But there has to be.
Speaker 15: One single chat bot which you rely on for accurate, live,
Speaker 15: correct information on the web. And that market is there
Speaker 15: for the taking, and we want to.
Speaker 3: Go for that and ten million people on a monthly basis.
Speaker 3: Do I'm interested in your desire to go out and
Speaker 3: build this van because you were at open AI as
Speaker 3: a researcher, you've been working with deep Mind. Why did
Speaker 3: you feel that something new was necessary to be created?
Speaker 15: I always wanted to try an entrepreneurial journey, so it
Speaker 15: was not meant to go and create a company for search.
Speaker 15: We initially started off as just to brainstorm and create
Speaker 15: products using the large language models as an upcoming technology.
Speaker 10: Much before it was even called generative AI.
Speaker 15: It was just that we stumbled on this amazing idea
Speaker 15: of combining large language models and web search together in
Speaker 15: the form of a new product called Perplexity.
Speaker 3: So you raise this money, is that to be put
Speaker 3: towards R and D compute power is a little bit
Speaker 3: of marketing because I'm kind of interested as how you
Speaker 3: got into the hands of ten million people.
Speaker 15: Yeah, so we've really been fortunate to have completely organic growth.
Speaker 10: We haven't paid for any of these users.
Speaker 15: We obviously announce all our product features on Twitter and like,
Speaker 15: people follow us there and get to know about us,
Speaker 15: and there's a lot of word of mouth growth for us.
Speaker 10: But our space is largely.
Speaker 15: Going to be on scaling adoption and usage, and that's
Speaker 15: going to be spent more on computer resources.
Speaker 4: As you want out, Caroline and I have experienced some
Speaker 4: of that word of mouth about Perplexity.
Speaker 7: Here's the thing.
Speaker 4: The story with open ai was about the push to commercialize.
Speaker 4: Do you feel as a founder and leader of that
Speaker 4: company that pressure.
Speaker 15: Well, honestly, I think people just want progress, and progress
Speaker 15: can be reflected in terms of clear user growth and
Speaker 15: adoption and not just through revenue. So as you get
Speaker 15: more and more users, there's always going to be plenty
Speaker 15: of opportunities for you to monetize, either through subscriptions or
Speaker 15: of other forms of monetization. And therefore, right now all
Speaker 15: our investors are pretty aligned with us that we actually
Speaker 15: want to scale more in.
Speaker 10: Terms of getting growing a larger user base.
Speaker 4: Ara of intronovsc of Perplexity, greats have you here in
Speaker 4: the studio San Francisco. Thank you for your time, Carrot.
Speaker 3: Yeah, and we finish up on a topic that we
Speaker 3: love to lace throughout the show, whether it's twenty twenty
Speaker 3: three or twenty twenty four, All things AI, all things
Speaker 3: about the desire to get into the secondary market, the
Speaker 3: primary market of these companies and the valuations that just
Speaker 3: goes onto this ongoing narrative. And for now it feels
Speaker 3: like that does it for this addition of Bloomberg Technology.
Speaker 4: Yeah, much of the same themes of last year continuing
Speaker 4: into twenty twenty four, but that's not a bad thing.
Speaker 4: Recap the show on our podcast. Thanks to everyone that
Speaker 4: has tuned in. Whereve yougate your podcast? We're on Apple,
Speaker 4: We're on Spotify, we're on iHeart, and of course we're
Speaker 4: uploading everything to the Bloomberg platforms. Next week is a
Speaker 4: big one. I'm off to Vegas. Vegas, BABYCS Will I survive?
Speaker 4: Tune in to find out. Caroline from San Francisco and.
Speaker 3: A small thing called the spot Bitcoin.
Speaker 7: E t is based on prior experiences.
Speaker 4: This is Bloomberg technology.