WEBVTT - FRC's Trading Halt and Upcoming Tech Earnings 0:00:01.520 --> 0:00:06.800 From Bahard where Innovation, Money and power Collie in Silicon Valley, NBN. 0:00:07.160 --> 0:00:11.360 This is Bloomberg Technology with Caroline Hyde and ed Love Love. 0:00:25.960 --> 0:00:28.840 I met Lovelow in San Francisco. Caroline Hyde is off today. 0:00:28.880 --> 0:00:32.600 This is Bloomberg Technology coming up full coverage of the 0:00:32.680 --> 0:00:35.800 second biggest bank collapse in US history. We'll discuss the 0:00:35.840 --> 0:00:40.200 outlook for funding with Jojao a Millennia Capital. Plus another 0:00:40.240 --> 0:00:43.080 big week for tech earnings ahead with AMD, Quilcom and 0:00:43.200 --> 0:00:46.640 Apple all reporting. We'll get a preview of what's to come. 0:00:46.760 --> 0:00:50.720 And soft banks chip design firm ARM filing confidentially for 0:00:50.800 --> 0:00:53.239 an IPO in the US over the weekend. More in 0:00:53.280 --> 0:00:56.640 the offering later this app There is just one story 0:00:56.680 --> 0:00:59.400 that we're talking about, and that is JP Morgan stepping 0:00:59.440 --> 0:01:03.120 in to acquire First Republic, taking on portions of its 0:01:03.160 --> 0:01:07.720 loan book and deposit base in a deal negotiated with regulators. 0:01:07.760 --> 0:01:10.440 You see JP Morgan high by two point seven percent. 0:01:10.520 --> 0:01:13.080 Some kind of feel good at bank, the biggest bank 0:01:13.240 --> 0:01:15.479 that's got even bigger. Let's get more details on First 0:01:15.480 --> 0:01:18.720 Republic bringing Bloomberg Shnali Bassack, who's out in Los Angeles 0:01:18.720 --> 0:01:21.240 at the Milking Conference. And I imagine this is the 0:01:21.280 --> 0:01:23.720 topic of the day, Shinali. But bring us the details 0:01:23.920 --> 0:01:26.760 of this JP Morgan deal to acquire First Republic. 0:01:26.880 --> 0:01:28.760 It certainly is because, as you say, we are watching 0:01:28.800 --> 0:01:31.240 the biggest US bank get bigger. As we know that 0:01:31.280 --> 0:01:34.640 there were other bidders behind the scenes. We had reported 0:01:34.680 --> 0:01:39.080 that Apollo and black Rock had supported, for example, PNC's 0:01:39.120 --> 0:01:41.680 efforts to buy the company as well. Yet the reason 0:01:41.760 --> 0:01:44.480 JP Morgan had emerged as the biggest bidder here and 0:01:44.520 --> 0:01:47.280 the most successful is because, as we know it that 0:01:47.360 --> 0:01:50.600 the cost of the deposed insurance fund for the fdiit 0:01:51.520 --> 0:01:54.760 was the least under a JP Morgan acquisition. 0:01:55.200 --> 0:01:56.200 Now, any other. 0:01:56.080 --> 0:01:59.080 Politics that come out beyond this is up for debate. 0:01:59.320 --> 0:02:02.720 But the question here is does this stem the banking crisis. 0:02:02.720 --> 0:02:05.360 We have seen a lot of California lenders now go 0:02:05.560 --> 0:02:08.880 through a series of struggles as we have been talking about, 0:02:09.000 --> 0:02:13.239 have failed. This one now is another major deal and 0:02:13.360 --> 0:02:17.600 it certainly gives JP Morgan and even more attract it 0:02:18.120 --> 0:02:21.880 the base of customers high net worth individuals. Remember, when 0:02:21.880 --> 0:02:23.840 we look at First Republic, there has been a lot 0:02:23.880 --> 0:02:25.919 of bleeding already for the last couple of weeks and 0:02:26.000 --> 0:02:30.240 months but this deal and an iconic franchise is certainly 0:02:30.320 --> 0:02:31.560 a co for JP Morgan. 0:02:33.240 --> 0:02:35.840 You go back to when SBB collapse in one of 0:02:35.880 --> 0:02:38.639 the beneficiaries was JP Morgan right snapping up some of 0:02:38.639 --> 0:02:42.000 the venture capital and startup customers or depositors. 0:02:42.720 --> 0:02:43.280 You pose a. 0:02:43.280 --> 0:02:46.440 Question there sheanali about whether this fixes the sort of 0:02:46.480 --> 0:02:49.320 systemic risk? Are there any answers to that on the 0:02:49.320 --> 0:02:54.679 ground yet? In milkn conference in LA. 0:02:53.520 --> 0:02:55.640 Yeah, you can kind of put it in their two buckets. 0:02:55.639 --> 0:02:58.160 Here you have a lot of banking titans that believe 0:02:58.480 --> 0:03:00.840 that there could be some pain among a couple of 0:03:00.840 --> 0:03:04.280 more regional lenders. We just talked to Julian Salisbury, for example, 0:03:04.400 --> 0:03:06.760 the CIO over at Coleman, who believes it's almost death 0:03:06.800 --> 0:03:09.680 by a million cuts, where you see sustained pressure on 0:03:09.720 --> 0:03:13.120 the industry but not wholesale failures or systemic wrist. On 0:03:13.160 --> 0:03:15.400 the other hand, you talk to the likes of a 0:03:15.480 --> 0:03:18.200 Mark Rowan, the CEO of Apollo, which was behind that 0:03:18.280 --> 0:03:21.160 P and C bid, and there are les there's a 0:03:21.200 --> 0:03:23.639 second wave. Really, there's a lot of problems under the 0:03:23.720 --> 0:03:26.320 surface when you look at other asset classes like commercial 0:03:26.360 --> 0:03:29.840 real estate, so to where the pain will be felt 0:03:30.080 --> 0:03:34.320 further is a huge open question ed and the fact 0:03:34.480 --> 0:03:37.320 is is that there could still be more pain among 0:03:37.400 --> 0:03:39.600 this industry as well as other parts of the market, 0:03:39.880 --> 0:03:42.240 as we continue to see the pressure high interest rates 0:03:42.240 --> 0:03:43.440 on the systems. 0:03:44.320 --> 0:03:46.800 All right, Bloomboagtion, Ali Bassack out at Milking, go work 0:03:46.840 --> 0:03:47.360 the corridors. 0:03:47.400 --> 0:03:48.520 We'll see you later in the week. 0:03:48.720 --> 0:03:50.480 Let's stick with his story and for more, let's bring 0:03:50.520 --> 0:03:53.840 in Lenny a cap to investor Joe Chow. Joe, I 0:03:53.840 --> 0:03:57.760 would frame you as an avench capitalist with a knowledge 0:03:57.760 --> 0:04:00.720 base in fintech the banking sector, but you also have 0:04:00.800 --> 0:04:04.280 your own exposure to First Republic. Can you just tell 0:04:04.280 --> 0:04:05.800 our audience what that exposure is? 0:04:07.040 --> 0:04:09.280 Yeah, So, as a VC fund, we have profolio companies 0:04:09.280 --> 0:04:11.760 and our operations which run on both our Socing Value 0:04:11.760 --> 0:04:12.640 Bank and for Republic. 0:04:14.480 --> 0:04:17.560 So, Joe, this outcome, what do you make of it? 0:04:17.640 --> 0:04:21.200 I mean, JP Morgan becomes much bigger, but they've stepped 0:04:21.240 --> 0:04:24.320 in and saved First Republic essentially. 0:04:25.200 --> 0:04:27.680 Yeah, I would say this Republic incident is a little 0:04:27.680 --> 0:04:30.000 bit different than the Local Value Bank incident in a 0:04:30.040 --> 0:04:33.920 few ways. CD was largely unanticipated, but in the case 0:04:33.920 --> 0:04:37.280 of b FC, most vcs and founders have already made 0:04:37.360 --> 0:04:40.280 content continuous planted in the last few weeks. So in fact, 0:04:40.279 --> 0:04:44.719 most founders, entrepreneurs vcs now have several bank accounts with 0:04:44.760 --> 0:04:47.920 different banks and so you know, so you know, we're 0:04:47.960 --> 0:04:51.800 not unprepared for sort of the transition here. Now our 0:04:51.839 --> 0:04:53.919 you know, accounts at efforts will roll over to a 0:04:53.960 --> 0:04:58.120 new acquirers hipping workings account, so that would ensure continuity. 0:04:58.360 --> 0:05:00.520 But I think on a broader sense, the different between 0:05:01.640 --> 0:05:04.480 First C and slolicon value bank was FIRC has also 0:05:04.560 --> 0:05:08.480 a larger non tech consumer base, and I think this 0:05:08.680 --> 0:05:12.320 outcome helping shore the continuity of that. But for businesses 0:05:12.320 --> 0:05:14.480 and tech tech business in the VCS, we've already been 0:05:14.560 --> 0:05:16.680 largely prepared for this outcome. 0:05:18.120 --> 0:05:18.600 Prepared. 0:05:18.720 --> 0:05:21.800 How are you talking about diversification of banking. 0:05:22.800 --> 0:05:24.920 Yeah, since, like you know, a few weeks ago, most 0:05:25.000 --> 0:05:27.640 vcs and most founders that leads in our portfolio and 0:05:27.640 --> 0:05:30.840 the ones we've we've connected with and the ones we're 0:05:30.839 --> 0:05:34.160 seeing in the market have opened several new accounts at 0:05:34.160 --> 0:05:38.520 different banks, even instant banks multiple accounts. And there's also 0:05:38.560 --> 0:05:41.800 fintech players which are offering a higher deplit insurance than 0:05:41.800 --> 0:05:45.640 to fifty because they're parking their opening accounts with multiple banks, 0:05:45.680 --> 0:05:47.599 so that ensure you can actually, lets say, add four 0:05:47.839 --> 0:05:50.680 to fifty case to give to a million. So that's 0:05:50.680 --> 0:05:53.520 been underway for you know, since the SVB fallout, and 0:05:53.600 --> 0:05:56.200 so when you know, this incident kind of occurred with FC, 0:05:57.000 --> 0:05:59.719 vcs and founders have already kind of been making continuous 0:05:59.720 --> 0:06:02.400 a plant plus even if the ones that happened, you know, 0:06:02.520 --> 0:06:05.000 I guess they're the positive for being short by the 0:06:05.040 --> 0:06:06.719 large bank in the US. So I think, you know, 0:06:06.720 --> 0:06:10.680 founders and vcs feel much safer this time and securely on. 0:06:10.760 --> 0:06:12.679 The last time, Joe. 0:06:12.680 --> 0:06:15.640 Even for private market participants in vcs. There are some 0:06:15.680 --> 0:06:18.880 big picture questions, one of which is what does the 0:06:18.920 --> 0:06:20.200 Fed do this Wednesday? 0:06:21.640 --> 0:06:25.000 Yeah, you know, financial stability was always sort of a 0:06:25.040 --> 0:06:29.240 third objective by the Fed after the inflation and unemployment rate. 0:06:29.560 --> 0:06:31.120 You know, if you if you look at sort of 0:06:31.120 --> 0:06:33.920 effas of terms from Marks, you know, I think he 0:06:33.960 --> 0:06:36.120 did to say in the pressure that we expect to 0:06:36.120 --> 0:06:37.920 inflict some pains, and I think, you know, what was 0:06:37.960 --> 0:06:41.760 happening here within the broader financial system is not inconsistent 0:06:41.800 --> 0:06:44.200 with what they would anticipate. I think the real question 0:06:44.279 --> 0:06:48.400 in my mind is to what extent will the banking 0:06:49.120 --> 0:06:52.240 crisis and followouts sort of deter the FED from from 0:06:52.320 --> 0:06:55.200 raising rates. In my view, you know, they're probably gonna 0:06:55.360 --> 0:06:58.200 raise race another twenty five pips at this meeting. 0:06:58.480 --> 0:06:59.840 But but you know, in my own. 0:06:59.800 --> 0:07:02.279 View, holding rates at you know, five and a half, 0:07:02.520 --> 0:07:04.560 five hun quarts five and a half is also very 0:07:04.720 --> 0:07:08.640 very restrictive and so and so financials abilities, you know, 0:07:08.960 --> 0:07:10.960 become a large concern for the FED and might actually 0:07:10.960 --> 0:07:13.400 deser the FED from raising riks further. But by keeping 0:07:13.480 --> 0:07:16.440 race at parent levels, there's still being very restrictive on 0:07:16.520 --> 0:07:18.680 financial conditions and that could really kind of temper and 0:07:18.720 --> 0:07:19.640 non inflation over time. 0:07:21.200 --> 0:07:24.080 What what is the environment like right now, Joe? For 0:07:24.680 --> 0:07:28.280 vcs that yourself considering writing checks for startups trying to 0:07:28.320 --> 0:07:29.920 raise money, you. 0:07:29.880 --> 0:07:31.160 Know, there's two schools of thought. 0:07:31.400 --> 0:07:32.800 You know, my own school of thought is this is 0:07:32.800 --> 0:07:35.800 actually the best comething best because you know, because values 0:07:35.880 --> 0:07:38.120 start down and we believe this is a help you 0:07:38.200 --> 0:07:41.640 reset for valuations and companies. And but there's another school 0:07:41.680 --> 0:07:44.960 of thought, which is many found many vcs are actually 0:07:45.440 --> 0:07:49.080 uh kind of holding back from investing, and so you know, 0:07:49.120 --> 0:07:51.960 but within the broader system. You know, there's you know, 0:07:52.080 --> 0:07:54.680 amongst kind of this period of weakness, I would I 0:07:54.680 --> 0:07:57.680 would call uh, the whole AI kind of a genet 0:07:57.760 --> 0:08:01.440 AI sort of a uh you know, innovation has been 0:08:01.480 --> 0:08:04.560 introducing some new life back into the ecosystem. 0:08:04.840 --> 0:08:07.280 So I think broader quality speaking, most. 0:08:07.120 --> 0:08:10.480 Vcs are slowing down not only on investing, but lpis 0:08:10.480 --> 0:08:13.160 are slowing down on investing in funds well, when bright 0:08:13.160 --> 0:08:15.840 Spot is general AI, which seems to offer a lot. 0:08:15.760 --> 0:08:19.440 Of new blood and excitement back into this ecosystem. 0:08:19.640 --> 0:08:22.400 Hey, Joe, there was a guest on Bluemoll television earlier 0:08:22.440 --> 0:08:26.480 saying that banks and markets don't have crystal balls, they 0:08:26.520 --> 0:08:29.360 don't have clairvoyance. But as you look into the future, 0:08:30.080 --> 0:08:33.800 does the JP Morgan intervention kind of settle things a. 0:08:33.720 --> 0:08:34.480 Bit for now? 0:08:35.720 --> 0:08:38.480 I think in the short term yes, because kaping Morgan 0:08:38.520 --> 0:08:41.480 and I looked at the assets. They're fifteen to twenty 0:08:41.520 --> 0:08:44.520 some larger than evarsas assets, and that should really contain 0:08:45.200 --> 0:08:47.680 sort of the spread of the of the of the 0:08:47.760 --> 0:08:48.400 bad assets. 0:08:48.559 --> 0:08:50.080 But also I think you know, having. 0:08:51.679 --> 0:08:54.400 And there's you know, debates on whether it's politically viable 0:08:54.480 --> 0:08:56.480 or not, but I think having the largest band to 0:08:56.520 --> 0:09:00.160 kind of step in and contain sort of this this 0:09:00.320 --> 0:09:03.079 usual kind of health restore system and not very much 0:09:03.080 --> 0:09:05.840 like an eight and nine. But you know, I guess 0:09:05.840 --> 0:09:09.040 the question is, are we are we fully through the banking. 0:09:10.200 --> 0:09:10.640 Fallouts? 0:09:10.760 --> 0:09:14.640 I think for large banks which have regularly, uh you know, 0:09:14.679 --> 0:09:17.920 regularly passed the first card test, the stress testing, I think, 0:09:17.960 --> 0:09:20.079 personally think they will be fun. I think mis sized 0:09:20.120 --> 0:09:23.160 banks management who haven't been on top of it would 0:09:23.160 --> 0:09:25.960 be on top of it now. My actually natural concern 0:09:26.080 --> 0:09:29.800 would be with the smaller banks, which you know, maybe 0:09:29.960 --> 0:09:31.719 I would expect to be to see a little more 0:09:31.720 --> 0:09:34.040 stress in the bankings on the smaller side. I think 0:09:34.040 --> 0:09:38.360 from this larger banks, I think the crisis that uh 0:09:38.480 --> 0:09:39.640 in the first term content. 0:09:39.600 --> 0:09:42.560 All right, Joe Chow, Millennia Capital Goods, catch up, Thank 0:09:42.600 --> 0:09:45.760 you for your time. Now, another busy week ahead for 0:09:45.880 --> 0:09:49.920 earnings with Apple, a m D and qualcom Or reporting numbers. 0:09:49.960 --> 0:09:51.560 Let's get a preview of what to expect from the 0:09:51.600 --> 0:09:55.520 iPhone maker with our own Mark German. Good morning to you, Mark. 0:09:55.760 --> 0:09:56.880 What's on deck for Apple? 0:09:56.960 --> 0:09:58.720 Yeah, good morning, thank you for having me. So this 0:09:58.840 --> 0:10:01.360 quarter is likely to play out a bit similarly the 0:10:01.440 --> 0:10:05.120 last quarter. Right, Bloomberg consensus at this point anticipates about 0:10:05.120 --> 0:10:08.880 a five percent annual decline. Last year for the second quarter, 0:10:08.920 --> 0:10:12.880 Apple reported revenue of about ninety seven billion. For this 0:10:12.960 --> 0:10:15.080 year twenty twenty three, the second quarter will come in 0:10:15.120 --> 0:10:19.880 at around ninety two billion. That's according to a summary 0:10:19.920 --> 0:10:24.320 of analyst estimates. Now, within that ninety two billion, it appears, 0:10:24.320 --> 0:10:27.400 according to these estimates, that all of the Apple major 0:10:27.440 --> 0:10:31.400 product categories aside from services, will see a bit of 0:10:31.440 --> 0:10:34.800 a decline. That includes the iPhone, the iPad, the Mac, 0:10:34.920 --> 0:10:38.640 as well as wearables. The iPhone decline is likely to 0:10:38.720 --> 0:10:42.880 be less significant than in the previous quarter because in 0:10:42.920 --> 0:10:45.240 the previous quarter we had the supply chain challenges that 0:10:45.320 --> 0:10:49.040 have now been essentially fully resolved. But you'll still see 0:10:49.320 --> 0:10:52.840 the iPad and the math go down quite significantly compared 0:10:52.880 --> 0:10:53.839 to the year ago quarter. 0:10:54.320 --> 0:10:55.560 Services, however, are. 0:10:55.440 --> 0:10:58.400 The estimates indicate that should be up a little bit, 0:10:58.480 --> 0:11:02.720 which obviously is news and positive growth somewhere for Apple 0:11:02.760 --> 0:11:03.240 on this quarter. 0:11:03.520 --> 0:11:05.839 All right, Bluemos, Mark Gurhman, We're all waiting for Apple 0:11:05.920 --> 0:11:07.680 later in the week. And by the way, Mark's power 0:11:07.679 --> 0:11:10.480 On column was out over the weekend. If you don't subscribe, 0:11:10.679 --> 0:11:13.120 do so. He's focused on Apple watching software. Thank you 0:11:13.559 --> 0:11:16.600 to Mark. Now sticking with earnings. Another stock we're watching 0:11:16.760 --> 0:11:20.760 is Checkpoint Software, out with earnings that frankly disappointed to 0:11:20.800 --> 0:11:24.520 the downside as revenue missed expectation. Shares at one point 0:11:24.520 --> 0:11:27.640 in the session down by the most since February of 0:11:27.679 --> 0:11:31.280 twenty twenty one. Now, coming up, how the AI startup 0:11:31.400 --> 0:11:34.280 pine Cone managed to get a seven hundred and fifty 0:11:34.280 --> 0:11:38.080 million dollars valuation in a one hundred dollars million dollar 0:11:38.240 --> 0:11:39.000 funding round. 0:11:39.240 --> 0:11:42.240 We'll talk to the CEO Ido Liberty. That's next. 0:11:42.760 --> 0:11:46.000 Meantime, here's what Wing Venture partner Jake Flomenberg, who took 0:11:46.040 --> 0:11:48.320 part in that round, had to say about. 0:11:48.080 --> 0:11:48.680 It last week. 0:11:50.200 --> 0:11:54.080 And so, if you're building a generative AI startup or 0:11:54.120 --> 0:11:56.600 a generative AI application and you want to marry that 0:11:56.920 --> 0:11:59.040 with your own company's data, or if you want to 0:11:59.080 --> 0:12:03.840 remember things from one question to the next, you need 0:12:03.840 --> 0:12:05.400 a vector database like Han Kong. 0:12:16.240 --> 0:12:19.200 The White House is probing how companies use AI to 0:12:19.280 --> 0:12:23.280 monitor and manage workers. The Biden administration says such practices 0:12:23.320 --> 0:12:26.440 are on the rise and can inflict significant harm. Just 0:12:26.520 --> 0:12:30.000 last week, the Minnesota Statehouse actually passed a bill to 0:12:30.080 --> 0:12:34.040 require companies like Amazon to provide warehouse workers with copies 0:12:34.080 --> 0:12:37.360 of data they collected on their pace of work. California 0:12:37.440 --> 0:12:40.480 and New York had passed similar legislation in the past 0:12:40.720 --> 0:12:44.440 couple of years. Let's keep talking about AI with pine Cone, 0:12:44.480 --> 0:12:47.520 an AI powered platform. We've just raised one hundred million 0:12:47.600 --> 0:12:50.080 dollars in a funding round last week, valuing the company 0:12:50.280 --> 0:12:53.400 at seven hundred and fifty million dollars. Founder and CEO 0:12:53.480 --> 0:12:57.360 Eedo Liberty joins us. Now, we would describe pine Cone 0:12:57.400 --> 0:13:01.400 Edo as the long term memory for AI models, right, 0:13:01.520 --> 0:13:02.720 Explain what pine Cone. 0:13:02.559 --> 0:13:06.000 Does provides exactly that. I mean when. 0:13:07.559 --> 0:13:12.120 We think about AI models as being smart, they might 0:13:12.160 --> 0:13:13.520 not be very knowledgeable. 0:13:13.760 --> 0:13:15.119 And if you see. 0:13:14.880 --> 0:13:19.880 All the issues that people have had with what's called illucinations, 0:13:19.920 --> 0:13:24.720 basically AI models giving very smart sounding answers but with 0:13:24.840 --> 0:13:29.199 wrong information. That is solved by equipping them with long 0:13:29.280 --> 0:13:32.360 term memory, which is provided by fine. 0:13:32.200 --> 0:13:36.200 Con interesting timing one hundred million dollar round a seven 0:13:36.280 --> 0:13:39.960 hundred and fifty million dollar valuation. You did a much 0:13:40.000 --> 0:13:42.840 smaller round a sort of a year ago. How difficult 0:13:42.920 --> 0:13:45.200 was it to raise those funds? And why did you 0:13:45.280 --> 0:13:46.199 raise the fund. 0:13:46.440 --> 0:13:47.960 It wasn't difficult at all. 0:13:48.280 --> 0:13:54.079 In fact, the fact that sector databases really asserted themselves 0:13:54.200 --> 0:13:58.280 as a critical piece of generative AI and the ability 0:13:58.320 --> 0:14:04.040 to do that escale correctly and pine Cone being the 0:14:04.120 --> 0:14:07.720 leader in that space and made that a no brainer 0:14:07.840 --> 0:14:13.440 to be honest, And so it was. Yeah, it was 0:14:14.040 --> 0:14:16.840 needed for us to really fuel the future research and 0:14:16.920 --> 0:14:20.880 development and future investment in the field. 0:14:21.040 --> 0:14:24.720 You know, we're covering AI more than a daily basis 0:14:24.720 --> 0:14:26.680 here on the show, right and we're talking to those 0:14:26.720 --> 0:14:29.880 that are working on foundational models vcs that are investing 0:14:29.880 --> 0:14:32.200 in the technology. We kind of break it down to 0:14:32.920 --> 0:14:37.560 data prep, deep learning, and then inference. Where does pine 0:14:37.560 --> 0:14:40.280 Cone sit within that development cycle. 0:14:40.840 --> 0:14:46.480 Well, it's sort of a different component altogether. This is 0:14:46.560 --> 0:14:52.680 about search and retrieval and access to your long term memories. 0:14:52.720 --> 0:14:55.640 If you are trying to build a generative AI on 0:14:56.520 --> 0:15:00.480 your own company data and you want your then you 0:15:00.560 --> 0:15:05.240 want your application to not hallucinate or make gross mistakes, 0:15:06.240 --> 0:15:09.520 then you have to equip it with that capability and 0:15:09.560 --> 0:15:12.960 that's what prime Cone provides. That could be either on 0:15:13.040 --> 0:15:17.080 training side or data cleaning, or in production at real 0:15:17.160 --> 0:15:18.720 time or customer facing. 0:15:19.640 --> 0:15:22.240 This happens everywhere up and down the stack. It's just 0:15:22.280 --> 0:15:23.520 a whole different component. 0:15:24.120 --> 0:15:26.680 And in some sense, doubling down on what I said before, 0:15:26.800 --> 0:15:31.280 this is the realization that this is a critical piece 0:15:31.360 --> 0:15:34.960 and that it's here to stay was exactly what catalyzed that, 0:15:35.120 --> 0:15:37.119 both the round and evaluation. 0:15:37.520 --> 0:15:42.440 You have customers like Shopify, HubSpot, ZAPR, and Gong interesting 0:15:42.520 --> 0:15:46.040 names in Layman's terms, What is it you're doing for them? 0:15:47.200 --> 0:15:51.960 When when large language models. 0:15:54.240 --> 0:16:00.400 Processed texts, they don't save it or represent then in 0:16:00.440 --> 0:16:04.680 the same way. And when you want to search for data, 0:16:04.760 --> 0:16:07.480 when a large language model search is for data, they 0:16:07.520 --> 0:16:10.800 don't search through it with a regular search engine like 0:16:10.880 --> 0:16:13.240 you would and I would like search on Google, but 0:16:13.320 --> 0:16:15.920 in a very different pattern. And that pattern is support 0:16:16.080 --> 0:16:19.960 supported by pine Cone. And so if you know, if 0:16:20.000 --> 0:16:21.760 you're on Gong and you want to see what the 0:16:21.880 --> 0:16:27.760 some salesperson you know offered some discount for some customer, uh, 0:16:28.080 --> 0:16:30.480 that's much easier to do with the large language model 0:16:30.680 --> 0:16:33.080 searching through the data with with pine Cone. 0:16:32.840 --> 0:16:35.320 Than with keyword search for example. Right. 0:16:35.680 --> 0:16:40.600 The same goes for Shopify, who built a shopping assist 0:16:40.960 --> 0:16:46.520 app very quickly with those capabilities, surfacing the actual information 0:16:46.560 --> 0:16:47.720 about their products and so on. 0:16:48.440 --> 0:16:50.360 Uh, the customer's products. 0:16:52.520 --> 0:16:55.600 You know, it's it's really retrieval and search in the 0:16:55.640 --> 0:16:58.400 way that AI models expect them to happen. 0:17:00.080 --> 0:17:02.120 And the daily power. 0:17:02.120 --> 0:17:06.680 It's very power, very new kinds of applications, especially where 0:17:06.720 --> 0:17:07.840 hallucinations is. 0:17:07.800 --> 0:17:11.119 Something that you really try very strong to avoid. 0:17:12.440 --> 0:17:14.720 You know, is there a risk that the pool of 0:17:14.840 --> 0:17:19.000 data is finite that it just runs out for training 0:17:19.040 --> 0:17:20.160 foundational models? 0:17:20.920 --> 0:17:23.080 I'm not sure what you mean by that, to be honest. 0:17:24.359 --> 0:17:26.720 There's a debate we are enable, Okay. 0:17:27.400 --> 0:17:29.920 Well, there's debit from industry participants. Right, there are lots 0:17:29.920 --> 0:17:34.160 of data inputs that go into training generative AI tools. Right, 0:17:35.600 --> 0:17:39.560 if you take for example, Google and Bard, they clearly 0:17:39.640 --> 0:17:42.639 have an advantage in the data that they are able 0:17:42.640 --> 0:17:46.320 to draw on to train that model. Others have less access, 0:17:46.359 --> 0:17:48.440 especially those of the training models where there are far 0:17:48.520 --> 0:17:52.560 fewer parameters and inputs. I guess my question is, you know, 0:17:52.600 --> 0:17:55.280 how are you helping and make data available and what 0:17:55.320 --> 0:17:57.680 the risk is that there is not sufficient access to 0:17:57.800 --> 0:18:00.720 data to train future models. 0:18:01.960 --> 0:18:06.160 So, first of all, I don't think that that is 0:18:06.280 --> 0:18:11.280 that is a serious risk for training better models, because 0:18:11.280 --> 0:18:14.600 I think we have scarcely tapped the. 0:18:16.560 --> 0:18:19.080 Single percents of what's available out there. 0:18:19.560 --> 0:18:25.000 But what pinekone allows you to do is actually make 0:18:25.119 --> 0:18:28.000 your AI models a lot more accurate and a lot 0:18:28.040 --> 0:18:31.760 more actionable without retraining them, which is I think why 0:18:32.440 --> 0:18:35.239 it has been so successful and why we're ramped up 0:18:35.280 --> 0:18:41.080 thousands of customers even just in Q one, because you know, 0:18:41.160 --> 0:18:44.920 with the large language model, even without being retrained, if 0:18:44.920 --> 0:18:48.560 it's given the right context and the right information from 0:18:48.600 --> 0:18:52.080 which to construct the answer, then you don't have to 0:18:52.200 --> 0:18:55.240 bake into the model all the data in your company. 0:18:55.560 --> 0:18:58.400 You just have to present it to the model at 0:18:58.440 --> 0:19:01.880 the query time say hey, you know, I want. 0:19:01.720 --> 0:19:06.000 To see what this customers are for a discount, and 0:19:06.119 --> 0:19:09.000 here are you know, twenty snippets of texts that I 0:19:09.040 --> 0:19:11.359 think contained the answer. Can you just steal that from 0:19:11.359 --> 0:19:13.640 that and give it to me in a reasonable way. 0:19:14.080 --> 0:19:17.119 That's a much easier problem and a much more manageable 0:19:17.440 --> 0:19:18.520 sort problem to sort. 0:19:18.720 --> 0:19:21.199 All right, pine Cone founder and Cooedo Liberty, thank you 0:19:21.240 --> 0:19:32.320 so much for joining the show. Time for Talking Tech 0:19:32.440 --> 0:19:36.359 India's most valuable startup by you look into reinsure employees 0:19:36.400 --> 0:19:39.719 and partners. After a weekend raid of the company's offices 0:19:39.760 --> 0:19:43.000 by the agency that investigates money laundering in the country. 0:19:43.000 --> 0:19:46.040 The investigations come at a time when the education company, 0:19:46.119 --> 0:19:48.960 valued the twenty two billion dollars, is in talks with 0:19:49.080 --> 0:19:52.919 investors to raise funds to address a liquidity crunch, and 0:19:52.960 --> 0:19:55.760 Ali Barba co founder Jack Maher is joining the University 0:19:55.800 --> 0:19:58.840 of Tokyo as a visiting professor. Mar is set to 0:19:58.880 --> 0:20:01.800 assume the new position to day and will provide advice 0:20:01.840 --> 0:20:04.800 on research topics and conduct his own research. Will also 0:20:04.840 --> 0:20:09.320 give seminars about entrepreneurship and innovation. Plus, Twitter co founder 0:20:09.400 --> 0:20:13.160 Jack Dorsey is offering sharp criticism of the social media's 0:20:13.320 --> 0:20:16.160 new owner, Elon Musk and his handling of the deal, 0:20:16.400 --> 0:20:20.080 after previously being publicly in favor of the sale. When 0:20:20.119 --> 0:20:22.480 asked if Musk has proven himself to be the best 0:20:22.520 --> 0:20:26.520 possible steward for the platform, Dorsey said, quote not no, 0:20:26.520 --> 0:20:29.520 nor do I think he acted right after realizing his 0:20:29.680 --> 0:20:32.359 timing was bad, Nor do I think the board should 0:20:32.440 --> 0:20:43.159 enforce the sale. Welcome back to Bloomberg Technology. I'm ed 0:20:43.200 --> 0:20:45.200 Lovelow in San Francisco. We've got to talk a little 0:20:45.200 --> 0:20:47.720 bit about AI. Now here's what some of our guests 0:20:47.720 --> 0:20:50.480 have had to say about what they think of generative 0:20:50.520 --> 0:20:53.120 AI's applications and where it's best suited. 0:20:53.640 --> 0:20:54.160 Have a listen. 0:20:54.800 --> 0:20:59.160 This technology really takes personalization to the next level when 0:20:59.160 --> 0:21:03.440 it comes to any type of education, but specifically financial literacy, 0:21:03.440 --> 0:21:04.640 which is so complicated. 0:21:04.760 --> 0:21:08.520 Certain categories are more exciting than others right now. Obviously, 0:21:08.600 --> 0:21:11.560 generative AI is a category that is very exciting to 0:21:12.200 --> 0:21:15.520 startup founders, customers, and venture capitalists as well. 0:21:15.600 --> 0:21:18.920 There'll be hundreds, if not thousands of opportunities to build 0:21:18.960 --> 0:21:21.679 interesting applications powered by AI. 0:21:21.800 --> 0:21:26.160 Technology makes it easier to create. Generative AI is accelerating 0:21:26.200 --> 0:21:28.879 that trend by decades, maybe centuries. 0:21:29.000 --> 0:21:31.639 To me, brainstorming is actually a perfect use case for 0:21:31.720 --> 0:21:32.320 these tools. 0:21:32.520 --> 0:21:35.000 I don't really care whether you're using AI or some 0:21:35.119 --> 0:21:37.720 other technology. I care what are you delivering to, what 0:21:37.800 --> 0:21:39.919 set are customers and how delighted are they going to be? 0:21:40.600 --> 0:21:43.400 So I show you these two names Starbucks and Young 0:21:43.480 --> 0:21:49.040 Brands reporting earnings Tuesday Wednesday. AI Artificial intelligence is absolutely 0:21:49.080 --> 0:21:52.680 dominated earning statements and calls over the last ten days 0:21:52.720 --> 0:21:55.520 or so, particularly for the technology sector. Do we see 0:21:55.560 --> 0:21:59.439 that happen again this week when it comes to qsr's 0:21:59.520 --> 0:22:02.600