Speaker 1: From Mahard where Innovation, Money and Power Collie in Silicon Valley, NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 3: And Caroline Heind of Bloomberg's world headquarters in New York,
Speaker 3: and I'm Ed Ludlow in San Francisco.
Speaker 4: This is Bloomberg Technology coming up Apple.
Speaker 5: It hits an intra day record.
Speaker 3: The SMP closes in on its all time highs after
Speaker 3: a dovish FED signal. What does it mean for the
Speaker 3: tech rally?
Speaker 6: We discussed plus as GM's cruise slashes twenty four percent
Speaker 6: of its workforce. We'll talk the state of the tech
Speaker 6: labor market as more than two hundred and fifty thousand
Speaker 6: workers at tech companies of all sizes have been let
Speaker 6: go this year.
Speaker 3: Meanwhile, Adobe facing regulatory scrutiny and for the company subscription practices,
Speaker 3: we'll take a look at the FTC investigation and why
Speaker 3: the company AI ambissions well may take longer than expected.
Speaker 6: The other big mover this morning is Intel. It has
Speaker 6: given us details on its AI strategy. The stock up
Speaker 6: three percent or two and a half percent now it
Speaker 6: had been up as much as five and a half percent.
Speaker 6: You have new zeon server chips. Those chips have been
Speaker 6: through two redesigns in the last year already. You also
Speaker 6: have details around Goudi three, the AI accelerator. This is
Speaker 6: the GPU CPU hybrid that basically is going to take
Speaker 6: on in video's h one hundred. And you have Intel
Speaker 6: with this fighting talk saying that Galdi three is going
Speaker 6: to be as good, if not better than in videos
Speaker 6: H one hundred, but it's nowhere to be seen yet,
Speaker 6: doesn't come out until twenty twenty four, Caroline. But the
Speaker 6: battleground for AI we were at AMD last week is
Speaker 6: heating up now.
Speaker 3: It really feels this end of the year as just
Speaker 3: a florry to get as much of the innovation out
Speaker 3: the door as they possibly can, to steal some of
Speaker 3: the market share. The overall hype that there's been around AI,
Speaker 3: and as you say, some fighting talk coming from Pat Gelsinger,
Speaker 3: and they're like the Galdi three has the most approved,
Speaker 3: But ultimately how much of a win do you think
Speaker 3: is the fact that they'll be more efficient with some
Speaker 3: of these chips going to the data centers.
Speaker 6: What's interesting in Intel's case is that they basically are
Speaker 6: saying the market's going to be so big there'll be
Speaker 6: something for everyone. Arsn Vidia and AMD, but they're also
Speaker 6: focusing on PCs. Remember that's their bread and butter. They're
Speaker 6: the biggest PC processor maker. And we're increasingly talking about
Speaker 6: on device right, the idea that the processing power of
Speaker 6: our laptops and our phones needs to be able to
Speaker 6: handle the inference side of a generative AI product. It
Speaker 6: needs to have the compute to perform whether it's in
Speaker 6: aeroplane mode or not. And that seems to be a
Speaker 6: part of what Intel's discussing today.
Speaker 3: And I think you're so right to say this is
Speaker 3: about the rest of the ecosystem of chips. We keep
Speaker 3: talking about H one hundreds and keep sort of talking
Speaker 3: about the Gowdy threes, but there's an awful lot of
Speaker 3: infrastructure play, an awful lot of other ultimately picks and shovers,
Speaker 3: bolts and chips that need to go into all of
Speaker 3: this to ensure that the AI becomes reality. Let's dig
Speaker 3: into that a little bit more with our next guest,
Speaker 3: ed Silvia Geblonski Ceocio Defiance ETS, who you know has
Speaker 3: been coming off what is an extraordinary day in terms
Speaker 3: of macro policy, and I'm interested if you can put
Speaker 3: that onto the micro of whether or not technology and
Speaker 3: the AI HiPE was still something to buy into at
Speaker 3: these points.
Speaker 2: Absolutely, So you know, I think yesterday felt like Santa
Speaker 2: Claus came to town a little bit.
Speaker 7: Right.
Speaker 2: The market's like the outlook for next year, we're finally
Speaker 2: done with ray hikes. I think, you know, we'll have
Speaker 2: some restrictive policy, but at least no more kind of
Speaker 2: like pounding on the gas to hike rates and you know,
Speaker 2: kind of break the economy. So I think that sets
Speaker 2: tech up very well. And I do think that the
Speaker 2: next five to ten years of technology are going to
Speaker 2: be super computing, quantum computing, and AI. And we've talked
Speaker 2: so much this year about Navidia. You and I have
Speaker 2: talked so much about Navidia and a MD this year,
Speaker 2: and I think they're kind of the clear leaders and chips.
Speaker 2: But what I think will happen next year is now
Speaker 2: all of the floodgates will open, So Intel's going to
Speaker 2: come in, companies like ion cbe like IBM, and you know,
Speaker 2: the bigger components around AI, like data processing, super computing
Speaker 2: five G for the speed to make AI work will
Speaker 2: all become tradable. Themes and you're going to start getting,
Speaker 2: you know, beyond the magnific magnificent.
Speaker 5: Seven for AI place.
Speaker 3: What's interesting though, is how much the exuberance becomes real
Speaker 3: revenue now.
Speaker 5: And Vidia has managed to prove.
Speaker 3: That point to certain extent, but I think of Adobe,
Speaker 3: We're going to dig into that story later in the show.
Speaker 3: But ultimately it's earnings not living up to the hype
Speaker 3: in terms of how quickly it can turn it into
Speaker 3: revenue into the bottom line. How much can an IBM,
Speaker 3: how much can quantum computing finally becomes the sort of
Speaker 3: revenue driver.
Speaker 5: Yeah, and that's a great point.
Speaker 2: And I think what happened a little bit with AI
Speaker 2: is that AI has been around for such a long time,
Speaker 2: and there was a news flash around Microsoft this year
Speaker 2: and then AI became kind of the word of the year.
Speaker 2: But then it started to feel like a bubble and
Speaker 2: people started to equate it to you know, memestock media
Speaker 2: and you know, kind of kind of that world that happened,
Speaker 2: and then it was kind of like thrown to the
Speaker 2: side a little bit. But now it's back because to
Speaker 2: your point, they're starting to show revenues. So I do
Speaker 2: think that everyone who's sort of hitched the word AI
Speaker 2: onto their wagon, is now going to have to prove
Speaker 2: it in you know, Q one, Q two, probably actually
Speaker 2: Q four as well earning. So I do think that
Speaker 2: you're going to start that play out, and it is
Speaker 2: super important for companies like IBM. So IBM is a
Speaker 2: company that has a formed you know, quantum computer, and
Speaker 2: they're actually working with companies like Cleveland Clinic to have
Speaker 2: better outcomes and drug trials and things like this. So
Speaker 2: quantum computing is now actually becoming more of a.
Speaker 5: Reality and it exists.
Speaker 2: Granted, you need a whole room the size of this
Speaker 2: and a lot of air conditioners torovite it for a
Speaker 2: process now, but it's there, right, So five to ten
Speaker 2: years from now, you know, Sky's limit.
Speaker 6: Taking a look at the defiance quantum etf TICKA, qt M,
Speaker 6: with which of course you are familiar, it's yours and
Speaker 6: all of the names you've just mentioned are in there.
Speaker 6: What I find so interesting is how long does this
Speaker 6: keep going?
Speaker 4: Right?
Speaker 6: You look at the performance year today up almost forty percent.
Speaker 6: You have Lisa Sewer of AMD saying that the market
Speaker 6: she saw as being one hundred and fifty billion dollars
Speaker 6: just in August is actually going to be four hundred
Speaker 6: billion in twenty twenty seven.
Speaker 4: How do you keep this going? It's been ridiculous.
Speaker 5: Yeah, that's a great point.
Speaker 2: And I think what's interesting about you know, the CTF
Speaker 2: and you know, some of the names I mentioned is IBM,
Speaker 2: I ONQ, you know, Arabella. Some of the smaller types
Speaker 2: of companies in this index are not companies that we're
Speaker 2: talking about right now. We're talking about Microsoft. We're talking
Speaker 2: about Google, Navidia, A m D, maybe a little bit
Speaker 2: of other names in there. But what's going to happen
Speaker 2: is that you have a whole lot of small cap
Speaker 2: names in there. So you know, why aren't we up
Speaker 2: two hundred percent? Where you're getting the performance of the
Speaker 2: large caps, the small caps because of rates and you know,
Speaker 2: kind of new to the scene types of conditions are
Speaker 2: going to probably start to rally and pick up performance.
Speaker 2: So I do think that this is going to ride
Speaker 2: out as those smaller companies start to you know, generate
Speaker 2: revenues and then are kind of cushioned by the Google
Speaker 2: and the Microsoft might end up returning five to ten
Speaker 2: percent next year and not you know, triple digit for
Speaker 2: Navidias and things like that. So I think having that
Speaker 2: well balanced mix of names you're not thinking about gives
Speaker 2: it room to run Sylvie.
Speaker 6: In the context of yesterday's FED meeting, the ECO data
Speaker 6: we've had of late, how isolated is what's happening in
Speaker 6: the AI industry for want of a better descriptor, from
Speaker 6: what's actually happening in the global economy.
Speaker 5: Yeah, So I.
Speaker 2: Think I think that, you know, the AI industry is
Speaker 2: kind of almost being you know, pigeonholed again into some
Speaker 2: of the Magnificent seven and a couple of specific you know,
Speaker 2: themes that are very sort of just like straight technology
Speaker 2: focused AI data processing things like that, but we don't
Speaker 2: really talk about, you know, the macro impact and how
Speaker 2: you know that will play into what's going on. So,
Speaker 2: you know, first, the government is going to increase AI
Speaker 2: spending by you know, billions of dollars next year, so
Speaker 2: there's going to be sort of money going into AI, supercomputing,
Speaker 2: artificial intelligence. The growth of AI is creating this need
Speaker 2: for cloud and cybersecurity, so that's going to increase in
Speaker 2: you know, kind of macro business spending and things like this.
Speaker 2: And then I think just overall, you're finally going to
Speaker 2: start talking about how AI impacts different sectors, you know,
Speaker 2: healthcare for example, are we getting those better kind of
Speaker 2: like drug outcomes, surgical proceeds, your outcomes, things like this.
Speaker 2: So I think the story is going to change more
Speaker 2: about how is AI making companies more efficient? And that
Speaker 2: started a little bit with digitalization of factories for missing workers,
Speaker 2: but I think that'll really continue to play out.
Speaker 3: I'm interested in well Ed says, maybe the rally's been
Speaker 3: ridiculous when it comes to AI. Some might have said
Speaker 3: that crypto is starting to look a bit ridiculous again,
Speaker 3: but it's managed to top out about shot forty five thousand.
Speaker 5: There has been a rule in twenty twenty three? Will
Speaker 5: that continue? Is that all about Matt Crow? Is there
Speaker 5: anything it is in classic that you like that? Yeah?
Speaker 2: So I think that there's a little more room to
Speaker 2: run in crypto. And that's because I suspect I can't
Speaker 2: predict the future. If I suspect that these approvals that
Speaker 2: we've kind of longer waited for are probably going to
Speaker 2: play out, and then you know, so you're just going
Speaker 2: to have kind of a shift of assets and you know,
Speaker 2: in some regard and new products are going to have
Speaker 2: to buy more bitcoin to create themselves, so you know,
Speaker 2: you'll really have that demand need. But then once that
Speaker 2: comes out, now all of a sudden, these products become
Speaker 2: more institutionalized, easier to trade, you get better spreads, you
Speaker 2: don't have to worry about kind of futures, rolling contangle
Speaker 2: or managing digital wallets. And then I think the efficiency
Speaker 2: of all that starts to play out more. So, you know,
Speaker 2: do I think it's going to double or triple? I
Speaker 2: don't know, but I do think that there's some solid
Speaker 2: runway left, particularly around that once we get that stamp
Speaker 2: like this is approved, I think, you know, I think
Speaker 2: bitcoin's going.
Speaker 3: To run all lies on that spot Bitcoin ETF. Sylvia Jamansky,
Speaker 3: who knows a thing or two about ets, she just
Speaker 3: of course the defiance ETF.
Speaker 5: And we thank you so much for being in the studio.
Speaker 6: Ed all right. Coming up on the program, twenty twenty
Speaker 6: three was a brutal year for tech workers. We're going
Speaker 6: to be joined by the creator of the tech Layoffs
Speaker 6: Tracker Layoffs dot FYI.
Speaker 4: That's coming up next.
Speaker 3: Let's talk layoffs. Because Cruise, the autonomous vehicle unit of
Speaker 3: General Motors, will lay off twenty four percent of its workforce.
Speaker 3: Around nine hundred people, it'scording to a blog post by
Speaker 3: the company. These layoffs come just one day after Cruise
Speaker 3: also just missed nine of its top executives. Now, the
Speaker 3: company has been trying to cut its costs in an
Speaker 3: effort to revamp the company after, of course, that crucial
Speaker 3: accident in which a Cruise card dragged a pedestrian in
Speaker 3: October ed.
Speaker 6: Yeah, it's been a big story here in this city
Speaker 6: and for that company and Cruises. Layoffs are just the
Speaker 6: latest occurrence piling onto this year's wave of layoffs.
Speaker 4: In the tech sector.
Speaker 6: In total, more than two hundred and fifty thousand workers
Speaker 6: at tech companies big and small have been let go
Speaker 6: in twenty twenty three.
Speaker 4: That's according to.
Speaker 6: The job tracker Layoffs dot FYI. Let's bring in the
Speaker 6: job trackers creator Roger Lee to dig into that data.
Speaker 6: I think a good starting point is to ask, well,
Speaker 6: two hundred and fifty thousand, what does that look like
Speaker 6: relative to prior years, prior periods of recession, prior periods
Speaker 6: of economic pain.
Speaker 7: Well, the number is very high, even compared to last
Speaker 7: year when we first started seeing a wave of tech layoffs.
Speaker 7: Twenty twenty three is the highest number that we've seen today.
Speaker 7: So two hundred fifty thousand tech employees have been laid
Speaker 7: off so far this year. That's up from one hundred
Speaker 7: and sixty five and twenty twenty two. And even in
Speaker 7: twenty twenty, when we saw a wave of pandemic related
Speaker 7: tech layoffs, that number was only about eighty thousand. So
Speaker 7: this year has been the worst time in the past
Speaker 7: few years.
Speaker 6: What if anything to the companies that have done layoffs
Speaker 6: and cuts got in common, be it their reasons for
Speaker 6: doing so or their reaction into something.
Speaker 7: Well, the biggest reason for these tech layoffs has been
Speaker 7: an over correction of the over hiring that they did
Speaker 7: during the pandemic search. You know, back in twenty twenty
Speaker 7: to twenty twenty one, we were in a very low
Speaker 7: industrate environment. Tech companies were booming in demand from people
Speaker 7: staying at home and turning to tech services more and more,
Speaker 7: and so these companies are able to go on a
Speaker 7: hiring spree and they invested aggressively in initiatives that were
Speaker 7: respeculative or wouldn't payoff for several years.
Speaker 4: Now, of course, the climate is entally different.
Speaker 7: We're in a period of interest rate hikes, and so
Speaker 7: that's causing these same companies now cut back and correct
Speaker 7: for that over hiring from before.
Speaker 5: Okay, so now we're in talk of cups. So does
Speaker 5: twenty twenty.
Speaker 3: Four mean we rectify that we see more exuberant, more
Speaker 3: hiring or is it actually slower and more specific.
Speaker 5: Like, yes, we'll hire, but only in AI.
Speaker 7: Yeah. Well, you know, after seeing actually some declines and
Speaker 7: layoffs over the course of this year, the past two
Speaker 7: months have marked an uptick in the tech layoffs and
Speaker 7: I do expect that to carry over to early next
Speaker 7: year because the year end is a natural time that
Speaker 7: connoct a layoff as a coin science and annual budgeting.
Speaker 7: So as companies in tech are taking stock of their
Speaker 7: full year perform and are looking ahead to twenty twenty four,
Speaker 7: they're finding our job cuts aren't necessary to improve profitability.
Speaker 4: So I do expect.
Speaker 7: That this remains slow for the next few months, although
Speaker 7: as we look ahead to the rest of twenty twenty four,
Speaker 7: hopefully if interest rates do come down as is expected,
Speaker 7: that would mean that the tech where they are will
Speaker 7: finally subside Roger.
Speaker 3: It's interesting, isn't it that much of the so called
Speaker 3: silver lining when everyone was really talking about the big
Speaker 3: cuts that were being executed. At the beginning of the year,
Speaker 3: everyone was like, well, more startups will be formed, while
Speaker 3: people will leave. They've got some cash in the bank
Speaker 3: that we be able to start up some other companies.
Speaker 3: Now it feels also that we're talking of well, technology
Speaker 3: being necessary everywhere, particularly in the field of AI, and
Speaker 3: people going into banking sectors, going into different industry groups
Speaker 3: that need that sort of technology retail.
Speaker 5: I mean there is an industry that it doesn't affect.
Speaker 5: Are people leaving tech more broadly?
Speaker 7: Yeah, you know, the rate of startupformation is affected because
Speaker 7: fundraising is so hard to come by. We're in an era
Speaker 7: now where the cost of capital is much higher than
Speaker 7: in years past, and so startups are finding it harder
Speaker 7: to raise money compared to before. And that does make
Speaker 7: it harder for these late off tech employees to stay
Speaker 7: in tech or to go start their own company.
Speaker 4: And so you are finding that.
Speaker 7: More and more folks are going to other industries either,
Speaker 7: you know, folks on the business side, like sales people
Speaker 7: recruiters are leaving tech entirely because they can find better
Speaker 7: roles in other industries. Since the tech downtern has not
Speaker 7: broadly affected what's going on in the rest of the
Speaker 7: economy where unemployment is still very, very favorable. And then
Speaker 7: even engineers are also looking at other options too outside
Speaker 7: of tech because of the reasons you said, tech is everywhere,
Speaker 7: and they industry now has a need to invest in technology.
Speaker 6: Yeah, Roger, I found it fascinating that the principal driver
Speaker 6: is undoing the over exuberance of hiring from the pandemic
Speaker 6: period about Caroline, But I just had this weird deja
Speaker 6: vu because I felt like we told that story a
Speaker 6: year ago.
Speaker 4: Yeah, so why are these.
Speaker 6: Companies doing cuts twelve months later on the same rationale.
Speaker 4: Anyway, I just thought that was interesting.
Speaker 3: Yeah, and the pendulum and we hope doesn't swing completely
Speaker 3: the other direction once more. Roger, lee'fraid we have to
Speaker 3: leave it there, but thank you so much. Creator of
Speaker 3: layoffs dot f Yi. French billionaire Vizant Belori, Well, he's
Speaker 3: considering a split of the media and entertainment empire he
Speaker 3: effectively controls Blue Meg. Sources say the breakup would allow
Speaker 3: for the venue to split into several companies in order
Speaker 3: to better take advantage of each unit's strength.
Speaker 5: Cheers. They've been searching on the hills of that report.
Speaker 6: Edd Let's continue that story with Bloomberg's Benoir Bertilo out
Speaker 6: in Paris. Go out to Paris with our correspondent who
Speaker 6: in the last two hours has broken even more news
Speaker 6: on the Vendi. Let's start with the basic premise of
Speaker 6: what Vincen Belaure is doing here.
Speaker 8: Yeah, a very unexpected move. Really announced late yes of
Speaker 8: the that it would break up or explore the breaking
Speaker 8: up of his company in three different units. That would
Speaker 8: be one unit for PATV is building a sort of
Speaker 8: Netflix like streaming service out of PATV operators across Europe,
Speaker 8: so that's can help. Plus another unit would be the
Speaker 8: ad group Avers. It's a good ad group valued between
Speaker 8: two billion and three billion euros by investors, but it's
Speaker 8: much smaller than Peers publicis WPP on income, So that
Speaker 8: would be a stand alone company as well, both listed company,
Speaker 8: and that would be a third company, an investment company
Speaker 8: holding the shares of various groups that the Boloy and
Speaker 8: Vivandi group has, including La Gardeer, which is a publishing
Speaker 8: giant encompassing the third book publisher in the world, which
Speaker 8: is Ashet. It also has travel retail operations, so a
Speaker 8: complete split of the group he tried to build for
Speaker 8: the past decade would be explored now.
Speaker 5: I mean volsobroken news.
Speaker 3: So maybe he thinks about selling a steak in the
Speaker 3: former poem Monopolia Italy Telecometalia. It's also fascinating and paint
Speaker 3: a picture of Beloray for us, because what's so interesting
Speaker 3: in your story is basically on the Puifontein. The CEO
Speaker 3: of Ivandi almost doesn't get a mention here. This is
Speaker 3: about a lot sort of a Rupot Murdoch figure of France.
Speaker 8: Yeah, we've compared him to report Murdoc in the past,
Speaker 8: is like him a media mogul, is pretty conservative in
Speaker 8: the line of his media outlets. He's seventy one years old.
Speaker 8: Officially he retired last year, so he's not the CEO
Speaker 8: of all chairman of the groups we're talking about, but
Speaker 8: he is said to be really calling the shots for
Speaker 8: any big moves like this, and it's really the writing
Speaker 8: on the walls. Being known as a corporate Rado has
Speaker 8: made a lot of surprising moves with his companies. For
Speaker 8: example the listing of Universal Group two years ago, which
Speaker 8: really is sort of an inspiration for what's happening now.
Speaker 8: So so yeah, is at the age of a try
Speaker 8: of free daring. Clearly he has his two older sons,
Speaker 8: Sel and Yannique, both heads of Boloy and Vivandi. But clearly,
Speaker 8: like it seems, he has a lot of some moves
Speaker 8: still to.
Speaker 4: Make all right.
Speaker 6: Bloomberg's Ben wor Betterlow out in Paris on that story.
Speaker 6: Coming up here on the program, we're gonna have all
Speaker 6: the details on the FTC's probe into Adobe subscription cancelation rules.
Speaker 6: Drives a lot to be mad I see on social media.
Speaker 6: We're gonna be joined by Tech Policy Institute's senior fellow,
Speaker 6: Sarah o'lamb. That's coming up next from San Francisco. This
Speaker 6: is Bloomberg Technology. Welcome back to Bloomberg Technology, Ed Lovelow.
Speaker 5: In San Francisco, and Carolin Hyde right here in New York.
Speaker 3: Let's get a check on these markets because we are
Speaker 3: dictated by macro polls at the moment. We had the
Speaker 3: Federal Reserve yesterday, of course, signaling that rake carts say
Speaker 3: are to come in twenty twenty four. The retail sales
Speaker 3: number also just showing the resilience of this US economy.
Speaker 3: The fact that we saw not only three percent growth
Speaker 3: in retail sales in November rather than a contraction who also
Speaker 3: of course got.
Speaker 5: Jobless claims looking good. This is a strong economy. Do
Speaker 5: we see a rotation?
Speaker 3: Therefore, money is still going into the NASAC, though tentatively,
Speaker 3: and this is the Nawstak one hundred. What's interesting is
Speaker 3: you're getting more love for the well, let's more left
Speaker 3: out in what has been a ramp in twenty twenty
Speaker 3: three the small caps, of course, and let's move on
Speaker 3: and to see what's happening on the individual stock movers
Speaker 3: of choice though at the moment, and Apple did hit
Speaker 3: an intra day high at one point, so there was
Speaker 3: some love some of the big tech and still those
Speaker 3: magnificent seven names.
Speaker 5: Adobe.
Speaker 3: Interesting outline, we're off by almost six percent. Big move
Speaker 3: was Perform and then as that one hundred ed and
Speaker 3: a lot of this to do with numbers that didn't
Speaker 3: live up to expectations in terms of their earnings.
Speaker 5: Still going to see double.
Speaker 3: Digit growth in revenue, but the market wanted to see more,
Speaker 3: particularly in the digital media. But I think also the
Speaker 3: ongoing narrative around the fact that they're getting pushed back
Speaker 3: on the Pigma deal and of course, the FTC the
Speaker 3: fact that they are too difficult to cancel, and that's
Speaker 3: a key story that want to dig in on.
Speaker 6: Yeah, so Adobe has been cooperating with the FTC in
Speaker 6: a civil investigation since twenty twenty two, which looks exactly
Speaker 6: that policies around canceling subscriptions. It's driven many of you mad.
Speaker 6: We know you tell us on social media, but it's
Speaker 6: an interesting disclosure that Adobe had in that filing last night.
Speaker 6: Let's bring in Tech Policy Institute Senior fellow Sarah o'lam
Speaker 6: joining us here on the program. Your reaction to that
Speaker 6: FTC look at Adobe's practices around canceling subscriptions and products
Speaker 6: and services.
Speaker 9: Sure, well, it was news yesterday and Adobe's eight K
Speaker 9: filing that it wasn't really known before that that the
Speaker 9: FTC as an investigative demand before it, and that in
Speaker 9: November twenty twenty three last month, that it would enter
Speaker 9: into negotiations to possibly impose penalties. They're using this authority
Speaker 9: under Section five A Unfair and Deceptive Practices, but also
Speaker 9: the Restore Online Shoppers Confidence Act RASCA.
Speaker 10: It's a statute from twenty ten.
Speaker 9: Folks might be reminded of the use of this law
Speaker 9: as well when FTC sued Amazon earlier this year also
Speaker 9: for prime subscription practices, So this is ongoing. It's also
Speaker 9: related to rulemaking proceding a click to cancel negative option
Speaker 9: rule proceeding from earlier this year as well. So the
Speaker 9: FTC seems to be ramping up its investigations of subscription practices.
Speaker 3: And maybe we shouldn't be surprised President Joe Biden. Of
Speaker 3: course it was back in March. I think really talking
Speaker 3: about the need for the ability to sign on to
Speaker 3: be as easy as the ability to cancel these online subscriptions,
Speaker 3: digital subscriptions, and you know when it costs up to
Speaker 3: seven hundred dollars a year for an Adobe subscription, no
Speaker 3: wonder they want to ensure that it doesn't drag on
Speaker 3: in some way. Do you think the FTC is sort
Speaker 3: of going to get more broad with this? Is it
Speaker 3: always going to be looking for settlements, for example that
Speaker 3: could have significant monetary costs Adobe lines?
Speaker 9: Well, in January, in the new year, it's going to
Speaker 9: have a hearing, a public hearing about this negative option rule,
Speaker 9: which is its way of saying that they want to
Speaker 9: make a rule across all companies that to make it
Speaker 9: easier to cancel the click to cancel.
Speaker 10: So it's an ongoing open proceeding for the FTC.
Speaker 9: What's interesting about yesterday's announcement was that they are sending
Speaker 9: these investigative demands to public companies with outside of the
Speaker 9: rulemaking process, and so I think that might be causing
Speaker 9: some stock market effects that that they're.
Speaker 10: Getting all these investigative demands.
Speaker 9: And what's interesting is, yeah, the Figma acquisition is still
Speaker 9: up in the air. It's still under review at the
Speaker 9: Justice Department. So Adobe has a few things happening with
Speaker 9: the FTC right now and Justice Department.
Speaker 5: And so does some other companies.
Speaker 3: I mean, the FDC has got busy, so have actually
Speaker 3: global regulators towards the end of the year. You're seeing
Speaker 3: what the FTC looking at the nature of Microsoft's investment
Speaker 3: in open Ai. The EU is looking at a similar
Speaker 3: So while the UK indeed is looking at a similar
Speaker 3: sort of relationship between Microsoft and open Ai, we've got
Speaker 3: the EU looking in many a field of regulatory oversight.
Speaker 3: We think of alphabets impact earlier this week, Sarah, our
Speaker 3: regulators just having enough with some of these business models.
Speaker 9: Well, what makes it easy for regulators is that they
Speaker 9: can send a letter an investigative demand pretty costlessly. I mean,
Speaker 9: they prepare it, but they send it, and then the
Speaker 9: companies have to do a lot to respond.
Speaker 10: And beyond noticed.
Speaker 9: And so it depends on your view of how broad
Speaker 9: the FTC's Section five a Unfair and Deceptive Practices authority is,
Speaker 9: if they're going beyond the scope of their authority or
Speaker 9: if they're within the scope of their authority. And so
Speaker 9: that's a really good question right now about this FTC
Speaker 9: in particular, which is a little bit more active than
Speaker 9: prior FTCs.
Speaker 6: Well, I appreciate Caroline's question too, because throughout the cadence
Speaker 6: of this year, I think the only thing we can
Speaker 6: agree on is there's been a lot of antitrust and
Speaker 6: regulatory news when it comes to big tech net net Sarah,
Speaker 6: who came out on top at the end of twenty
Speaker 6: twenty three. The regulators or the technology companies.
Speaker 9: Well, you know, it slows down business, but folks would
Speaker 9: say that maybe it is the job of these government
Speaker 9: regulators to make it harder or to protect consumers. And so,
Speaker 9: you know, you hope that there is that balance of
Speaker 9: being pro consumer and pro investment, especially for American companies,
Speaker 9: which are you making up the most of big tech
Speaker 9: in the markets and in globally, and so hopefully that
Speaker 9: they can strike that balance.
Speaker 6: Some of that is, Kurry pointed out, was in the
Speaker 6: context of M and A, right, you think about like
Speaker 6: Microsoft Activision or maybe now Microsoft's stake and open AI
Speaker 6: in twenty twenty four, what will be the area of
Speaker 6: focus do you think from regulators is they look at
Speaker 6: technology companies?
Speaker 9: Well, I think what's really important for you know, us
Speaker 9: in the policy arena and Congress and the regulators is
Speaker 9: to know that any government involvement slows things down. And
Speaker 9: so there might be you know, good good reasons for
Speaker 9: caution and for policy making, but there's also you know,
Speaker 9: a big important value in letting companies innovate and merge
Speaker 9: and acquire each other and then learn that way see
Speaker 9: what happens in the market. So you know, I would
Speaker 9: recommend the regulators to make sure that we're accelerating growth
Speaker 9: and not slowing it down.
Speaker 3: Well, said Sarah Alamb's great to have you, senior fellow
Speaker 3: at the Technology Policy Institute. Great to have your expertise. Meanwhile,
Speaker 3: let's just stick with it Obie for a moment, because well,
Speaker 3: we know that the shares runner pressure. Also because of
Speaker 3: its warm outlook for sales in twenty twenty four, it
Speaker 3: seemed to signal a potential that the AI boosts, particularly
Speaker 3: when it comes to its product far Fly, It's going
Speaker 3: to take longer than expected to actually boost the bottom line.
Speaker 3: Wall Street still expects Adobie to be one of the
Speaker 3: first software chants to benefit.
Speaker 5: From general to AI. Now that's stick with AI and look.
Speaker 3: At just all the industries that it's going to transform,
Speaker 3: most likely healthcare. I sat down with Best Some Adventures
Speaker 3: partners Steve Kraus just talk about what he's seeing in
Speaker 3: the impact so far.
Speaker 5: Take a listen.
Speaker 11: We at Bessemer have made a really large commitment to AI,
Speaker 11: and I would say that healthcare is actually one of
Speaker 11: the industries where it's going to be most relevant, most impactful.
Speaker 11: And the reason for that is, you know, healthcare is
Speaker 11: the most laborious, inefficient industry in the economy. It's also
Speaker 11: thirty percent of the world's data and so if you
Speaker 11: think about that combination, what is artificial intelligence good at.
Speaker 11: It's good at automating tasks in all parts of our economy,
Speaker 11: but we think in healthcare it's going to be really
Speaker 11: impactful basically everywhere, from how the payment in healthcare is
Speaker 11: administered on the back end, how healthcare is delivered you know,
Speaker 11: by clinicians. In terms of clinical decision support, for instance,
Speaker 11: AI can be very impactful, and then also how drugs
Speaker 11: are designed and delivered to improve human health. And so
Speaker 11: we think all aspects of the healthcare economy are going
Speaker 11: to be revolutionized by AI.
Speaker 3: The problem with twenty twenty three is suddenly we felt
Speaker 3: that AI was this bright, new shiny object, and ultimately
Speaker 3: artificial intelligen has been in an un sexy topic for years,
Speaker 3: and I'm interested as to therefore for you, was it
Speaker 3: a out starting to amplify the AI story amid the
Speaker 3: companies you've already backed, or is it finding new companies
Speaker 3: that are being built out of this sudden nique change
Speaker 3: that we did see with generative AI.
Speaker 1: I think it's both.
Speaker 11: We've actually been investing You're right, it's been around for
Speaker 11: a long time these technologies, and we've actually been investing
Speaker 11: in five plus years in terms of how these technologies
Speaker 11: are applied to healthcare, and I mentioned some of the
Speaker 11: ways that could be and so I think there's going
Speaker 11: to be plenty of new opportunities that come out over
Speaker 11: the next decade of how AI can be applied to healthcare.
Speaker 11: But I also think for existing companies. As you point out,
Speaker 11: I talked about how healthcare is a very laborious industry.
Speaker 1: A lot of its services you.
Speaker 11: Know, humans doing tasks that actually can be automated, that
Speaker 11: are pretty mundane but are very important. And so we
Speaker 11: actually think AI is going to shift services to more software,
Speaker 11: like in their administration and how care is delivered.
Speaker 3: What has it done to the valuation story of the
Speaker 3: companies that you're looking to invest it or already have that.
Speaker 11: Well, AI is a hot space and I think, you know,
Speaker 11: the valuations the AI sector are pretty robust, but we
Speaker 11: also think the opportunities equally as robust.
Speaker 1: And it's if you think about it.
Speaker 11: You know, in my career and venture there have been
Speaker 11: several platform changes, you know, moving from on premise software
Speaker 11: to the cloud. That was a huge, huge shift in
Speaker 11: our economy and created hundreds of billions, trillions of dollars
Speaker 11: of innovation entrepreneurship. The iPhone right huge moment. AI is
Speaker 11: also a huge moment. So while you know valuations are heady,
Speaker 11: I actually think the opportunity is almost uncapped, and so
Speaker 11: we're excited. And that applies to healthcare AI companies.
Speaker 5: Too, and maybe even some exits.
Speaker 3: I mean, talk to us about when you're thinking of
Speaker 3: best some adventures, I think of, well, some of the
Speaker 3: unbelievable companies that have been gone public through the pinterest
Speaker 3: that you've been from early days and some of the
Speaker 3: other Twilios linkedins.
Speaker 5: Who are they in your current.
Speaker 3: Source of portfolio companies that you've invested in. Where do
Speaker 3: we see those exits coming from.
Speaker 1: Yeah, I think it's the AI wave.
Speaker 11: We're early in it, and so I think those exits
Speaker 11: will come in you know, five ten years. But right now,
Speaker 11: one area that we've invested in is the digitization of
Speaker 11: the healthcare economy. Again, it's often been experienced where people
Speaker 11: get their healthcare in person, but we saw that covid
Speaker 11: actually unlock the whole idea of telehealth, and so we
Speaker 11: think all throughout the delivery of care, whether it be
Speaker 11: companies like Headspace Health or Hinge Health. Headspace is obviously
Speaker 11: focused on mental health care, which as you know, has
Speaker 11: been an area where frankly, there's a lack of supply
Speaker 11: of clinicians in the US and in the world. And
Speaker 11: so a company like Headspace that delivers really important, high
Speaker 11: quality mental health care to all if you have a phone,
Speaker 11: an iPhone. Again, that's a huge, huge opportunity that we
Speaker 11: think is going to run for a long time. And
Speaker 11: also a company like Hinge, which is doing the same
Speaker 11: when it comes to back or knee or hip pain,
Speaker 11: being able to deliver that care like physical therapy, you
Speaker 11: don't have to go to see your physical therapist in person.
Speaker 11: You can actually do that care via your iPhone. Again,
Speaker 11: a huge market opportunity, and we think those are the
Speaker 11: companies that we're going to see you get to exits
Speaker 11: in the near term.
Speaker 3: We'll based on the East Coast, but up in Boston. Yes,
Speaker 3: where are those opportunities coming from? Where are these companies
Speaker 3: being built at the moment? Do you think that you're
Speaker 3: going to be looking to in twenty twenty four?
Speaker 11: I You know, we at Bessemer have lawn believed that
Speaker 11: you know, Silicon Valley is obviously a hotbed of innovation,
Speaker 11: but Boston's a hot bed of biopharmacutical and healthcare innovation.
Speaker 11: New York but frankly, we've invested all over the United
Speaker 11: States and.
Speaker 1: All over the globe.
Speaker 11: We have offices worldwide, and so we actually think entrepreneurs
Speaker 11: can be anywhere. And frankly, one of the things that
Speaker 11: you know remote work taught us is that you you know, entrepreneurs.
Speaker 1: Are everywhere and people can work everywhere.
Speaker 11: And so we've invested in everywhere from Minneapolis to North
Speaker 11: Carolina to London, Israel, and all.
Speaker 1: Across the globe.
Speaker 11: And so I don't think entrepreneurs are limited and where
Speaker 11: they live. I think it's that spirit lives everywhere and
Speaker 11: the possibilities are everywhere.
Speaker 5: Steve Krausser from Bessemer Venture.
Speaker 6: Partners venture back startups in the lab grown meat space
Speaker 6: have received billions of dollars in the last decade, but
Speaker 6: the companies aren't actually delivering and what was initially forecast
Speaker 6: for mainstream adoption. In the latest edition of Bloomberg Business Week,
Speaker 6: we dive deep into one of the industry's biggest players,
Speaker 6: Upside Foods. Joining us now is one of the co
Speaker 6: authors of that piece. Bloomberg's preer and end. There is
Speaker 6: a stigma we've grab loan lab grown anything.
Speaker 4: Tell us about your article in the magazine. What is
Speaker 4: the main conclusion that it comes to.
Speaker 12: These companies, especially Upside Foods, promised that they would deliver
Speaker 12: a center of plate sort of style of meat that
Speaker 12: is an equal substitute to folks who enjoy eating meat,
Speaker 12: different from the plant based industry, where you know, it's
Speaker 12: not necessarily one to one and it's not necessarily real meat.
Speaker 12: There are other components of vegetables and other things like
Speaker 12: that mixed in. And what has become clear is over
Speaker 12: the years, after hundreds of millions of dollars in funding
Speaker 12: for Upside Foods in particular, the company is still struggling
Speaker 12: to make the technology work to actually deliver what it
Speaker 12: has promised over the years.
Speaker 6: Well like that one basics, so is it even revenue generating?
Speaker 6: In other words, does it have a meat product lab
Speaker 6: grown that it sells anywhere?
Speaker 12: Right now, the company is supplying small amounts to a restaurant,
Speaker 12: very very very small amounts, and it's far away from
Speaker 12: being able to make a similar product at scale for supermarkets.
Speaker 5: And for years, the promise.
Speaker 12: Has been that these kinds of companies will by twenty
Speaker 12: twenty one under supermarkets like Costco. And the idea was
Speaker 12: people love eating meat, why should we slaughter more animals
Speaker 12: for it?
Speaker 3: What ultimately has been perhaps an exuberance about the timetable here,
Speaker 3: is there any reality that we'll start to see lab
Speaker 3: grown meat on our plates more quickly? Because you have
Speaker 3: this beautiful part of the story where you're saying that
Speaker 3: basically people are having.
Speaker 5: To sort of dig out of test tubes.
Speaker 3: And make one very small, tiny piece of chicken in
Speaker 3: the metal when they should be making much larger amounts
Speaker 3: of a feel that's right.
Speaker 12: There are a number of companies in the space that
Speaker 12: say they're going to use animal cells to create sort.
Speaker 5: Of hybrid products that are.
Speaker 12: Partly plant based, partly this lab grown meat to make
Speaker 12: a plant based meat while tastes more like actual chicken
Speaker 12: or actual beef, for example. And these companies say that
Speaker 12: they will in a couple of years have these sort
Speaker 12: of hybrid products available. But at the same time, the
Speaker 12: process has been slow moving, and many of the largest
Speaker 12: companies are still only in these small scale tasting events.
Speaker 12: And in the case of Upside Foods, we've learned that
Speaker 12: the company has yet to actually be producing at scale.
Speaker 5: Preer fascinating. Go read the story.
Speaker 3: It's really sort of a history of what is exuberant
Speaker 3: in this particular space.
Speaker 5: Faced with reality priann end. We thank you so much.
Speaker 3: Meanwhile, look we're turning to another story, this gone viral.
Speaker 5: That we haven't had a chance to discuss yet.
Speaker 3: Ail Musk is starting his own university of wanting to
Speaker 3: tax filings for the billionaire's latest charity, called the Foundation
Speaker 3: Now as a CEO is planning.
Speaker 5: To start a university in Austin.
Speaker 3: New institution, inceeded with roughly one hundred million dollars gift
Speaker 3: from Musk, will start with a STEM focused primary and
Speaker 3: secondary school and then move on to late style education.
Speaker 5: He's actually not the first time.
Speaker 6: He started education for kids, right, Yeah, He's actually set
Speaker 6: up a school for his children years ago in Texas.
Speaker 4: This is the next level Elon Muster, the philanthropist.
Speaker 5: What's he gonna call it? Is that have has something
Speaker 5: to do with.
Speaker 6: X Maybe it has something to do with being proximity
Speaker 6: to his space company.
Speaker 3: I think convenience is everything. Meanwhile, that does it. For
Speaker 3: this edition of Bluebog Technology, check
Speaker 6: Out the pod wherever you get your pods Apple and
Speaker 6: on Bloomberg