Speaker 1: Bloomberg Audio Studios, podcasts, radio news from the heart of
Speaker 1: where innovation, money and power collide in Silicon Valley and beyond.
Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2: Live from New York. This is Blueberg Technology Coming up.
Speaker 3: Four of the Magnificent Seven are set to report earnings
Speaker 3: this week. The giants make up nearly twenty percent waiting
Speaker 3: in the S and P five hundred.
Speaker 2: So what's priced in?
Speaker 4: Plus?
Speaker 3: IBM plans to invest one hundred and fifty billion dollars
Speaker 3: in the US over the next five years with Quantumer
Speaker 3: mainframes made in America.
Speaker 2: And we will be joined by the CEO of Palo
Speaker 2: Alto Networks.
Speaker 3: He announces a new deal to leverage the AI security opportunity.
Speaker 3: But first we have Meta Microsoft come Wednesday. We then
Speaker 3: have Apple Amazon.
Speaker 2: What is priced in? Where have it? Investors in?
Speaker 3: Analysts already started to think about the pull forward for
Speaker 3: their fiscal quarter they report because of Taris and what
Speaker 3: of the macro economic environment going into the full year
Speaker 3: earnings expectations. Ran Vastella can can dig in because Ryan,
Speaker 3: what's so interesting about these numbers the fact that many
Speaker 3: analysts just in the lack of clarity, haven't been really
Speaker 3: able to downgrade their expectations.
Speaker 4: Yeah.
Speaker 5: Absolutely, we're starting to see this in some names, especially
Speaker 5: for twenty twenty six, But for the moment, people are
Speaker 5: sort of holding firm with their expectations. We really do
Speaker 5: not know what to expect out of results this quarter.
Speaker 5: We really do not know what any company is going
Speaker 5: to say about really anything about the economic environment, about
Speaker 5: their outlooks for the rest of the year. That makes
Speaker 5: it extremely difficult for analysts to know how to sort of,
Speaker 5: you know, peg their expectations their estimates, and in turn
Speaker 5: that means that valuations right now are sort of up
Speaker 5: in the air.
Speaker 2: We really do not know what fair value.
Speaker 5: Looks like because it is hard to evaluate these companies
Speaker 5: on a price to earnings basis if there is so
Speaker 5: much uncertainty about the earnings.
Speaker 3: I mean, look, we're looking currently at analysts being very
Speaker 3: slow to cut profit estimates on the twelve month earnings
Speaker 3: projections for a Meta for example. But Ryan Meta is
Speaker 3: going to feel the effects of Chinese companies like Timu
Speaker 3: like Shean no longer advertising with them. Potentially we're going
Speaker 3: to see a downdraft there. And also they've got hardware
Speaker 3: that they have to import from China. Are we going
Speaker 3: to get any signal of what that does to the
Speaker 3: bottom line?
Speaker 5: Yeah, I mean, I think these kinds of questions are
Speaker 5: really what is paramount for investors right now. Obviously, these
Speaker 5: companies have their own sort of individual impacts related to
Speaker 5: tariffs and so forth. A company like Meta, which is
Speaker 5: so heavily reliant on online advertising, it's not going to
Speaker 5: be as direct for them as it will be for
Speaker 5: a company like Apple, which is hardware based. So I mean,
Speaker 5: obviously we're going to see different kinds of impacts, different
Speaker 5: levels of impact. But I think overall, there's still so
Speaker 5: much uncertainty about what the economy is going to look like,
Speaker 5: not even a year from now, but even a few
Speaker 5: quarters from now. We are a couple of months from now,
Speaker 5: So again, any kind of clarity investors will get will
Speaker 5: be certainly welcome, But it's hard to know how any
Speaker 5: company can even be too confident about anything right now.
Speaker 3: Alphabet beat last week, and all of these stocks swored
Speaker 3: the previous week as well. Raan Vas Fleastelica pushes us forward.
Speaker 3: We thank you now President Trump's tarrorf announcements. They've roiled
Speaker 3: Washington to Wall Street for nearly a month now. And
Speaker 3: Chinese retail apps you just mentioned them, tea machine, they've
Speaker 3: already started actually passing on the new import taxes onto
Speaker 3: US consumers, onto you and me by hiking up prices. Now,
Speaker 3: China bus far has denied having any trade talks for
Speaker 3: the United States, though President Trump is still hopeful China
Speaker 3: will make a deal eventually.
Speaker 6: They want to make it deal obviously right now they're
Speaker 6: not doing business.
Speaker 7: Well, you know, people talk about going cold Turkey with
Speaker 7: China and.
Speaker 2: Then they just forget about it.
Speaker 7: And we were losing hundreds of billions of dollars a
Speaker 7: year with China.
Speaker 8: And now they're not doing any business with us, you know,
Speaker 8: because not because of them, because of me.
Speaker 5: Because at one.
Speaker 4: Hundred and forty five percent, you can't do business.
Speaker 3: But something's gonna happen.
Speaker 4: That's gonna be possible.
Speaker 3: It begs Mike Shepherd standing by, and look, we all
Speaker 3: still doing business with China. Many a consumer is still
Speaker 3: buying from Timu and she In, but they're paying the
Speaker 3: price for it.
Speaker 7: Well, you're right, kra and we are seeing now what
Speaker 7: economists have been warning about for some time in relation
Speaker 7: to the president's tariff policy, and that is that consumers
Speaker 7: would bear the increased costs and economic pain of those
Speaker 7: import levies. We are seeing that the prices are being
Speaker 7: passed along now by Timu and by she In. At
Speaker 7: she In, for instance, some goods, the prices have gone
Speaker 7: up by as much as three hundred percent. And keep
Speaker 7: in mind, Carra, it's not just here in the US
Speaker 7: where the pain is being felt by consumers. The retaliatory
Speaker 7: programs by some other trading partners, including Candidate, including China,
Speaker 7: including the EU have increased costs and goods from the
Speaker 7: US into those countries. And we saw Tesla over the
Speaker 7: weekend urging consumers to try to tap the pre tariff
Speaker 7: inventory before prices went up and before it became too
Speaker 7: late to avoid those increases. So there is a ripple
Speaker 7: effect and corollary effect, not just here in the US,
Speaker 7: but elsewhere around the world.
Speaker 2: Cara, extraordinary reporting done.
Speaker 3: They just highlight you mentioned Tesla having to pass on costs.
Speaker 2: We've also got here.
Speaker 3: Import tariffs wearing on Tiamo's shopping cart. They look at
Speaker 3: some of the most popular things that people buy on Team.
Speaker 3: Apparently it's a fourteen and one power strip with a
Speaker 3: surge protection and one touch control.
Speaker 2: Who knew that's the most popular item.
Speaker 3: But basically it's doubling in price because of tariffs MIC
Speaker 3: And when we think of an Amazon, for example, Bloomberg
Speaker 3: Intelligence thinks Amazon has about seventy percent of its products
Speaker 3: were either offered by Amazon or third party sellers coming
Speaker 3: from China.
Speaker 2: This is going to have a long term tail.
Speaker 7: This is going to have a long tail, and it's
Speaker 7: not really just going to be sticker shot carro It's
Speaker 7: going to be supply live shock potentially. We've heard from
Speaker 7: a number of economists and experts out there, including the
Speaker 7: chief economists that Apollo who one that we could be
Speaker 7: seeing a COVID like shock. Remember this is a crucial
Speaker 7: time of year. You and I were just trying to
Speaker 7: get through the end of the school year, maybe for
Speaker 7: our children, but we are all looking ahead. If you're
Speaker 7: a retailer, you're thinking ahead to Christmas to back to school,
Speaker 7: because now is when that inventory is actually planned, it's purchased,
Speaker 7: and it's already shipped. It's usually in the water by
Speaker 7: April to get here in time for back to school
Speaker 7: and for the holidays.
Speaker 4: So there won't be a ripple effect.
Speaker 7: And we've already seen a drop in cargo shipments from
Speaker 7: the world's second largest economy to the US in the
Speaker 7: wake of these tariffs.
Speaker 4: So there is going to.
Speaker 7: Be a lot of pain felt along the supply chain.
Speaker 7: It's not just going to be consumers at the end,
Speaker 7: like you and me looking at prices in our Temu
Speaker 7: shopping car, or even on the grocery store or other retailers.
Speaker 4: It's going to be in a lot of different places.
Speaker 3: And yet many hold out hopes for a deal. But
Speaker 3: China pushing that once again that no negotiations are happening.
Speaker 7: Well, that's right, and Scott Besson is indicating that, hey,
Speaker 7: you know, the ball is in China's court. We really
Speaker 7: want talks to get underway. And the President indicated even
Speaker 7: at the end of last week during a time when
Speaker 7: Chinese officials were here in Washington for the World Bank
Speaker 7: and IMF meetings, where maybe there was some contact between
Speaker 7: the two sides, but it was informal and if it
Speaker 7: even took place, And for the Chinese, they really want
Speaker 7: something much higher level, they want something launched formally. They
Speaker 7: would like to be speaking regularly with Scott Besson and
Speaker 7: other officials of his port to be able to get
Speaker 7: all of those key points for them, not just tariffs, remember,
Speaker 7: but all the US export restrictions on advanced technology that
Speaker 7: we've been talking about so much.
Speaker 3: Particularly in the semiconductor space. Mike Sheppard, thank you so
Speaker 3: much for joining me while coming up. IBM to invest
Speaker 3: one hundred and fifty billion dollars in the US over
Speaker 3: the next five years. Why this is blue met technology.
Speaker 3: IBM just raising its earlier gains as the market turns
Speaker 3: a little bit lower. It just announced plans to invest
Speaker 3: one hundred and fifty billion dollars in the United States
Speaker 3: over the next five years. The latest company, of course,
Speaker 3: that follows the likes of Apple or Eli Lilly pledging
Speaker 3: to increase spending in the country following President Trump's election
Speaker 3: and his teriff threats. Let's bring in brody Ford and
Speaker 3: starting on IBM. It seems to be about made in
Speaker 3: America the mainframe quantum compute. How much of an acceleration
Speaker 3: in spending home in the US space is this?
Speaker 9: That is the big question. It's the one that is
Speaker 9: so hard to answer looking at a lot of these announcements, right,
Speaker 9: IBM says we're going to spend their billion in R
Speaker 9: and D in the US. We look that they've reported
Speaker 9: about thirty three billion in R and D over the
Speaker 9: last five years. I believe most of that's in the US.
Speaker 9: So it's hard to say is this an acceleration. Is
Speaker 9: this them you know, putting a pretty bow and spending
Speaker 9: they were going to do anyway? This is the big
Speaker 9: question when we see these announcements from companies like Apple
Speaker 9: or Nvidia. What's clear is that as tariffs hit, companies
Speaker 9: feel a lot of pressure to say, hey, actually we
Speaker 9: have capabilities in the US and upstate New York. We
Speaker 9: can build your main frames too, And so I think
Speaker 9: that's what we're seeing from IBM today.
Speaker 3: Alvin Krishna, the CEO, saying IBM remains the epicenter of
Speaker 3: the world's most advanced computing and AI capabilities.
Speaker 2: Now I want to get to AI capabilities.
Speaker 3: Because I'm an interesting story you've been reporting on for
Speaker 3: over in the UK. Nscale, which seems to be a
Speaker 3: startup that is once again a Bitcoin minor turn compute offerer,
Speaker 3: trying to raise money and they're talking about a deal
Speaker 3: with bike Dugs.
Speaker 7: Yeah.
Speaker 9: Nscale is kind of like a or weave where they
Speaker 9: are focused on building these AI specific data centers and
Speaker 9: so they've been fundraised. They looking for a billion or
Speaker 9: two in debt, telling everybody, hey, we are how we
Speaker 9: have this deal with Byteedance for about assign the paper.
Speaker 9: It's gonna be worth two billion dollars. We're gonna give
Speaker 9: them all these great GPUs and Bye Dance told us
Speaker 9: that's overstating things. We don't have that much business with them,
Speaker 9: and so these situations are hard, right because GPUs are
Speaker 9: a pretty geopolitically sensitive thing. Maybe byte Dance doesn't want
Speaker 9: it out there. Maybe in scale is overstating things. I mean,
Speaker 9: it's an interesting instance that shows us how much the
Speaker 9: financing around AI data centers has become very interesting in
Speaker 9: the last year.
Speaker 3: And of course they're rather home to in video chips.
Speaker 3: Berdie Ford breaks that down. We thank you, and let's
Speaker 3: talk more about in video chips and competition to them,
Speaker 3: because over in China Huawei apparently the company is set
Speaker 3: to test a new AI processor then it hopes can
Speaker 3: rival those of Nvidia. Now it's all according to reports
Speaker 3: on the Wall Street Journal in video trading, the as
Speaker 3: you can see on the day now accelerating losses in
Speaker 3: King talks about this about what's happening over at Intel.
Speaker 3: But first Yan, what is the long term picture of
Speaker 3: Huawei trying to help China become more self sufficient here?
Speaker 6: Yeah, I think what we have to do is because
Speaker 6: it's very difficult to get a clear picture of what
Speaker 6: is going on there and the capabilities of those chips,
Speaker 6: what it is important to do is to take it
Speaker 6: back to what Invidia has said, which is, look, if
Speaker 6: we're not allowed to do business there, if we are
Speaker 6: restricted from exporting chips to China, they will find a
Speaker 6: way to do their own over time. It's just a
Speaker 6: matter of time. And I think this report is another
Speaker 6: example of efforts being made out there to do that.
Speaker 6: Are they competitive with what Invidia can do? Probably not
Speaker 6: at this point. Are they going to be wonderful? Are
Speaker 6: they going to be good enough?
Speaker 10: Though?
Speaker 6: Is really the key question, And the answer is we'll see.
Speaker 6: But they're probably another step on a path towards that.
Speaker 11: Well.
Speaker 3: In there's a more local competitor who hasn't been much
Speaker 3: of a competitor to in video of late, and that's Intel.
Speaker 3: Lit Bhutan written a great Tech Daily report really on
Speaker 3: how is trying to nuance culture over an Intel.
Speaker 2: How has it gone down?
Speaker 6: Yeah, I mean he really didn't give any of the
Speaker 6: concrete answers that Wall Street wanted in terms of when
Speaker 6: are the new products going to arrive, when you're going
Speaker 6: to have outside customers for your factories. What he did
Speaker 6: focus on, and what he did give a very specifics on,
Speaker 6: was like, Intel's culture is not in a good position,
Speaker 6: and these are some of the shocking things that we're
Speaker 6: seeing going on. Frankly, it was pretty brutal. That clearly
Speaker 6: is something that he believes needs to be fixed. But
Speaker 6: as we know, fixing a company culture and getting everybody
Speaker 6: moving in the right direction is important, takes time, and
Speaker 6: what is arguably more important is that you're getting them
Speaker 6: moving in the right direction towards products, towards customer relationships
Speaker 6: that will turn this company around.
Speaker 3: We have seen the response to the earnings in King
Speaker 3: Tech in Depth, the newsletter out today.
Speaker 2: Go read it.
Speaker 3: Thanks so much. Now, as shakeup is underway for Apple's
Speaker 3: AI and machine learning divisions, the company has begun to
Speaker 3: break up would have been a pretty unified approach for more.
Speaker 2: Blue Meg's Mark German has more.
Speaker 3: You've been writing over the weekend about one particular executive
Speaker 3: they lured away from Google in twenty eighteen, and now
Speaker 3: he's getting some things pulled away from him.
Speaker 12: That's right. So here's the story with Apple. AI serie
Speaker 12: launched in twenty eleven, and by twenty fifteen, twenty sixteen,
Speaker 12: a little bit after that, they really fell behind Google.
Speaker 12: Assistant came online. You had a lot of competitors, including
Speaker 12: Alexa from Amazon, and it felt like Apple had squandered
Speaker 12: a three four year lead. And at the time, Apple
Speaker 12: felt that part of that is because the AI work
Speaker 12: at Apple was scattered across the company, right They worked
Speaker 12: in silos across different divisions, hardware, software services. So they
Speaker 12: hired John gen Andrea, who was running AI in search
Speaker 12: at Google at the time in twenty eighteen. They believe
Speaker 12: putting everything in his group with skyrocket their approach to
Speaker 12: AI and make them a true player in artificial intelligence
Speaker 12: and machine learning.
Speaker 4: So far, it hasn't worked out.
Speaker 12: We saw how far they've fallen behind compared to Chad Shipt, Google.
Speaker 4: Gemini Copilot.
Speaker 12: So now what they're trying is breaking it up, going
Speaker 12: back to their roots, going back to that Apple functional
Speaker 12: organization and taking pieces of the AI group and re
Speaker 12: scattering them around the company, and that started a few
Speaker 12: weeks ago with Siri. They move Siri from their AI
Speaker 12: division to their software engineering division, which makes sense to
Speaker 12: some extent because Siri is well software. And now what
Speaker 12: they're doing is they're taking the robotics division, which was
Speaker 12: also in the AI organization, and moving that to hardware engineering.
Speaker 12: Robotics that is a hardware play at heart, and so
Speaker 12: it makes sense to put that in the hardware engineering division.
Speaker 12: So we'll see how that works out. But to me
Speaker 12: and to many people at Apple, it feels like they're
Speaker 12: preparing for a world without a true AI chief, a
Speaker 12: world where apples back to being completely functionally organized.
Speaker 3: And mark a world where they're about to report earnings
Speaker 3: this week, they're trying to tackle China supply chain, move
Speaker 3: it more to India. Just brace us for what we
Speaker 3: expect on Thursday.
Speaker 12: I think that Apple this is going to be one
Speaker 12: of the more interesting Apple earnings results presentations in a while,
Speaker 12: not because of the numbers that they're going to share,
Speaker 12: not because of the data they're going to be given
Speaker 12: the prepared remarks, but because they have a lot more
Speaker 12: questions they're going to have to answer than usual. Things
Speaker 12: when it comes to AI, of course is going to
Speaker 12: be big on the minds of analysts on the call,
Speaker 12: but also tariffs, also dealing with the Trump administration, dealing
Speaker 12: with innovation questions. So that's going to be really important
Speaker 12: earnings TOOLL to listen to, not because of what they're
Speaker 12: going to come out and say, but because of what
Speaker 12: they're going to be asked and how they're going to respond.
Speaker 12: So I'm actually very much looking forward to that, and
Speaker 12: everyone should stay tuned for our coverage there.
Speaker 3: Well, we're excited for your reporting on it, Mark German.
Speaker 3: We appreciate all things Apple. And now.
Speaker 2: Meanwhile, in other AI.
Speaker 3: News, enterprise AI platform Writer is launching a new adaptive
Speaker 3: reasoning model that it says is cheaper faster than competing lllms.
Speaker 3: It eaches a one million token context window to create
Speaker 3: more comprehensive responses. Mayhabi write as CEO joins us for
Speaker 3: now and tell me about the new model and what
Speaker 3: makes it different.
Speaker 10: Oh hi Caroline, so good to see you. Well that's
Speaker 10: the headline.
Speaker 13: Palmyra x five is out and it is the first
Speaker 13: enterprise grade, enterprise ready model built for agentic AI.
Speaker 10: So you got it.
Speaker 13: This is an LM with performance on par with other
Speaker 13: frontier models, but it's radically three x faster, and it's
Speaker 13: four times cheaper, and as of today it's available on
Speaker 13: AWS Bedrock.
Speaker 3: Okay, So tell us about how you get that sort
Speaker 3: of cost efficiency. You're offering what sixty cents per one
Speaker 3: million input tokens, you're doing six dollars per million output tokens.
Speaker 3: How do you get to that price point?
Speaker 5: Way?
Speaker 13: So it's really important for folks to understand what's required
Speaker 13: to get enterprise grade agentic AI. When we launched our
Speaker 13: AI HQ a few weeks ago, we had one hundred
Speaker 13: plus pre built agents built for the enterprise, and folks
Speaker 13: were asking me, how are you getting this kind of
Speaker 13: efficiency and accuracy with really complex workflows Agents at a Uber,
Speaker 13: at a Franklin Templeton, things that were capable of taking
Speaker 13: multiple systems, data from third party and internal research, and
Speaker 13: able to generate really complex work We are able to
Speaker 13: take that full million token prompt and process that context
Speaker 13: window in twenty two seconds, firing off multi turn function
Speaker 13: calls in three hundred milliseconds, all while getting this price efficiency.
Speaker 10: It is a.
Speaker 13: Combination of breakthrough both algorithmic and data we train this
Speaker 13: model on about a million dollars of GPUs, so also
Speaker 13: incredibly efficient on the training and we passed.
Speaker 2: How how is this occurring?
Speaker 9: Way?
Speaker 3: Is this the new deep seek trend that we're seeing
Speaker 3: that you just do more and more with this. It's
Speaker 3: more about turning to open source. I mean, how have
Speaker 3: you managed to be so efficient?
Speaker 8: Yeah?
Speaker 10: I mean we deep seeked before deep seek.
Speaker 13: So this is a one hundred percent synthetic data based
Speaker 13: approach which has the IP friendliness that the enterprise really requires. Algorithmically,
Speaker 13: we are doing a very interesting set of techniques around
Speaker 13: a hybrid attention mechanism, blending linear and other approaches, and
Speaker 13: we're doing a mixture of experts set of techniques, so
Speaker 13: we're only activating the most relevant subnetworks and resulting in
Speaker 13: much lower latency, much more efficiency.
Speaker 3: Mate, you talked about some of the very well known
Speaker 3: companies that you currently serve. But to get these sort
Speaker 3: of investors and the vanguards of this world to be
Speaker 3: coming on board, how are you making yourself known? I mean,
Speaker 3: are you having to offer this sort of price efficiency?
Speaker 2: Is that how you arrives above the noise?
Speaker 3: Because it just feels like there are so many offerings,
Speaker 3: enterprise suited offerings out.
Speaker 2: There right now.
Speaker 10: It's absolutely so noisy.
Speaker 13: But what we're seeing is folks who don't have results
Speaker 13: are understanding that they can't build everything themselves. So in
Speaker 13: addition to enterprise grade frontier lms, we've got an end
Speaker 13: to end platform for building, activating, supervising these agents. And
Speaker 13: that's how we stand out, Caroline. That entire package is
Speaker 13: what results in the incredible roy Forster just reported three
Speaker 13: hundred and thirty three percent ROY on implementing writer for
Speaker 13: building and using agents and it's one of the highest
Speaker 13: that they've ever seen. So you're right, right, it's incredibly
Speaker 13: noisy for these enterprises, but CEOs are seeing that their
Speaker 13: CEOs are demanding results. And I think this is AI's
Speaker 13: COVID moment, and COVID, you know, you had this explosion
Speaker 13: of collaboration tools because forks, folks had to do it.
Speaker 13: And I think we're going into, you know, the kind
Speaker 13: of economic uncertainty that just demands results and writers providing that.
Speaker 2: Okay, so really interesting.
Speaker 3: You think that in this potential downturn from a global
Speaker 3: GDP perspective, people could be more drawn to your products,
Speaker 3: not less.
Speaker 10: Oh one hundred percent.
Speaker 13: I mean, we're AI software that builds software, and we're
Speaker 13: already seeing it in our customer base executives CEOs who say, look,
Speaker 13: before you ask for more headcount, before you ask for
Speaker 13: more software, I want to see that AI couldn't do
Speaker 13: it better.
Speaker 3: So what about that for your opportunities as we get
Speaker 3: more nervousness, more economic uncertainty. I know that prior to
Speaker 3: all of this you were getting other tech startups coming
Speaker 3: to you saying, look, I can't keep on doing this,
Speaker 3: my expenses are too high. Would you mind buying me?
Speaker 3: Are there still the M and A opportunities out there
Speaker 3: for you?
Speaker 13: Right now, we're trying to grow organically as fast as possible, Caroline,
Speaker 13: we can't keep up with the demand.
Speaker 10: I'm with you from our London office.
Speaker 13: We're almost one hundred people here, more than four hundred globally,
Speaker 13: trying to be eight hundred globally as soon as possible.
Speaker 13: Folks really need results, and you know they're coming to
Speaker 13: us to be able to really bring AI, especially agen
Speaker 13: kic AI to the business.
Speaker 3: Mahavieve, it's always great catching up with you. Thanks for
Speaker 3: joining us in London.
Speaker 2: Pano Also our networks.
Speaker 3: Manages to fight the narrative of a downward.
Speaker 2: Draft in the markets. We're up a quarter percent.
Speaker 3: And look, we're seeing the cybersecurity Leader announced it's intent
Speaker 3: to acquire protect AI is expanding the company's capabilities in
Speaker 3: security basically combating new threats, I mean an explosion in
Speaker 3: artificial intelligence. All of this as we get the CSRSA
Speaker 3: conference underway, joining us now Nikesha or a power auto
Speaker 3: network CEO, You've got a lot to announce new security platform,
Speaker 3: but let's just go to.
Speaker 2: The new announcement. In terms of M and A.
Speaker 3: You're going to get us an amount that you paid.
Speaker 3: I was hearing about up to six hundred and fifty
Speaker 3: million dollars.
Speaker 4: We're not going to talk about what we paid. Caroline.
Speaker 4: Nice to see you.
Speaker 8: Like we're again at a technology inflection point. We're all
Speaker 8: talking about AI. You had people talking about AAI earlier.
Speaker 8: And every time you have a technology inflection point, it
Speaker 8: becomes very important that we are able to come forward
Speaker 8: and provide solutions to our customers so they can securely
Speaker 8: deploy technology. And in that context, we're very exertively and
Speaker 8: aggressively working on both a build and buy strategy to
Speaker 8: build perhaps what will be the most important thing over
Speaker 8: the next few years, which is a platform that allows
Speaker 8: you to deploy AI securely.
Speaker 3: Okay, so let's talk about build versus by and why
Speaker 3: was this asset protect AI so necessary to go inorganic
Speaker 3: at this moment?
Speaker 8: Well, kind of like if you look at what's going
Speaker 8: on in AI you were on before, people talk about LMS,
Speaker 8: people talking about deploying AI based applications, People trying to
Speaker 8: figure out how to deploy infrastructure, whether it's on prem
Speaker 8: or in the public cloud, with chips set to use,
Speaker 8: which model to use. All these are very important technological
Speaker 8: decisions which are going to underpin the platform forms of
Speaker 8: the future. Now, when you put them together and you
Speaker 8: deploy them, you have to make sure that you're looking
Speaker 8: at the security aspect of every one of these things.
Speaker 8: Protector AI, after an extensive look around the market, we
Speaker 8: found was working on some very interesting topics which are
Speaker 8: complementary to what we've been building. We've been building a
Speaker 8: great run time platform to if we protect our customers
Speaker 8: as the DEPLOYI. Protector I was working on something similar
Speaker 8: where they're looking at all the model in the world,
Speaker 8: scanning them to make sure there wasn't bad stuff lurking
Speaker 8: in them. So the combination of the two, which we
Speaker 8: will integrate into one platform, actually allows us to be
Speaker 8: more comprehensive and we will offer our customers.
Speaker 3: I just want to get your birds eye perspective here
Speaker 3: in a kesh, because no one can push us forward
Speaker 3: as much as you can in many ways to the
Speaker 3: future of agenic KI.
Speaker 2: And the fact that where are we to ultimately be
Speaker 2: protecting ourselves.
Speaker 3: There's demand for traditional, basically farwall endpoint products of security.
Speaker 3: How does that shift if you're going from a user
Speaker 3: level to an agent level in this moment, that's going to.
Speaker 8: The buzzword for RSA Carol, and people are going to
Speaker 8: talk a lot about how do.
Speaker 4: You make agents work? I think it's still unclear.
Speaker 8: There's a lot of innovation being put out in the market,
Speaker 8: whether as the A to A model that an MCP
Speaker 8: Model's all wonderful buzzwords.
Speaker 4: We create in our industry.
Speaker 8: But as Agendica I've said before to me, Agendici becomes
Speaker 8: real when you start giving AI arms and legs, whether
Speaker 8: robotic arms and robotic legs or real arms and legs
Speaker 8: in terms of replacing human beings, and I think that's
Speaker 8: where the question becomes, can I rely on AI to
Speaker 8: accomplish the task without supervision? And that's where things will
Speaker 8: get very interesting and very hairy in certain cases. There
Speaker 8: it becomes important only to make sure that the agent
Speaker 8: you're giving autonomy to is something that you're very comfortable
Speaker 8: will act within the guardrails that you put out there
Speaker 8: for that agent. And then you got to make sure
Speaker 8: nobody can take over your agent and hijack it in
Speaker 8: a way that can make them do things you don't
Speaker 8: want them to do.
Speaker 4: So I think that's going to be the next.
Speaker 8: Frontier of cybersecurity as we get AI deployed in multiple places,
Speaker 8: is how do we give autonomous control to these agents?
Speaker 8: How do we give them agency effectively? And can't wait
Speaker 8: for that world to happen, But it's going to be
Speaker 8: a whole new sort of set of opportunities that are
Speaker 8: open up for us.
Speaker 3: There are a lot of names trying to make the
Speaker 3: most of this opportunity. A lot of them are the hyperscalers.
Speaker 3: A lot of them in many ways become your competitors
Speaker 3: as they add their own security offerings. Where do you
Speaker 3: sit in this whole FRENEMI environment, Well, you know.
Speaker 4: As we fascinating Caroline.
Speaker 8: Logically, the cloud providers should have been our competitors and
Speaker 8: cloud security. They should have our competitors and endpoints secure,
Speaker 8: but they're not. They're focused on making sure technology gets
Speaker 8: deployed as quickly as possible, which is good perhaps for
Speaker 8: their business, not all of their customers. Our job is
Speaker 8: to make sure that we stay in lockstep with them
Speaker 8: and work with our customers to make sure they can
Speaker 8: deploy technology in a secure fashion. Let's be fair if
Speaker 8: our customers have comfort that when they deploy AI, when
Speaker 8: they give autonomous control to AI to do some repetitive
Speaker 8: tasks or interesting time, it can be done securely. The
Speaker 8: moment we can provide the underpinning of trusts, the underprinting
Speaker 8: of reliability, the fact that if you deploy with Pollo
Speaker 8: Auto Networks, there is a very high probability that it's
Speaker 8: going to be much safer than anything else.
Speaker 4: I think that's where the winning combination happens.
Speaker 8: So I don't see this as sort of a competitor
Speaker 8: environment for now with the hyperscalers. I see it as
Speaker 8: an opportunity for us to work together and make sure
Speaker 8: we accelerate the adoption of the technology, as opposed to
Speaker 8: have our customers be confused.
Speaker 4: Which way to go.
Speaker 3: I mean used to work out Google. You host your
Speaker 3: products on Google Cloud. How do you feel about their
Speaker 3: big splashy deal for wiz.
Speaker 4: It'll be interesting to watch.
Speaker 8: I have lots of conversations with people at Google about it,
Speaker 8: and we don't intend to change how we deploy our products.
Speaker 8: We buy infrastructure from them, and sometimes we see them
Speaker 8: in the market.
Speaker 4: Our hope is that our.
Speaker 8: Customers will understand that you want an unbiased product that
Speaker 8: can operate effectively on every cloud provider, as opposed to
Speaker 8: something that is beholden to a particular cloud provider.
Speaker 4: We still need to solve for everybody else.
Speaker 8: Out there, so I think that's our sort of athos.
Speaker 8: We want to be independent. We want to be somebody
Speaker 8: that can deliver the same level and capability or security
Speaker 8: across every platform there is out there, so our customers
Speaker 8: don't have to spend time trying to integrate all this
Speaker 8: stuff together, which is our entire philosophy around platformization.
Speaker 3: I love following what you're doing in terms of platform offerings, products,
Speaker 3: what you're doing in terms of well the latest MNA,
Speaker 3: but I also love following on social and perhaps whether
Speaker 3: you wanted to or not, you involved in the AI
Speaker 3: debate about whether we're going to get as much CAPEX spend,
Speaker 3: whether infrastructure is reality versus hype.
Speaker 2: Where do you stand on it right now?
Speaker 3: Nikesh?
Speaker 8: I think if you look around you, everybody is getting
Speaker 8: ready for a very large adoption of AI scenario because
Speaker 8: you see tens of billions of dollars being committed by
Speaker 8: people in terms of building infrastructure.
Speaker 4: I think that's right.
Speaker 8: I think we may get the sort of the timing
Speaker 8: not perfect. You know, you may build too much before
Speaker 8: it's all consumed.
Speaker 4: But I think it's headed in the direction. I think.
Speaker 8: Short term, in this twelve to twenty four month timeframe,
Speaker 8: you could see that a lot of the investment that's
Speaker 8: going is going towards innovation. I say, make a smarter model,
Speaker 8: make robotics work.
Speaker 4: So you need a lot of power.
Speaker 8: You need a lot of compute to get to a
Speaker 8: place where these models become extremely useful. Once you get
Speaker 8: to a point where these models are extremely useful, the
Speaker 8: question becomes how do I deploy them in my business?
Speaker 8: How do I, as a regular company, regular customer, deploy
Speaker 8: these things effectively securely. I think that could take a
Speaker 8: little longer than people think because everybody's experimenting and we're
Speaker 8: not all experts yet.
Speaker 4: Now this is something that came about.
Speaker 8: Less than twenty four months ago, so we all have
Speaker 8: to get our muscle understand how this affects our business.
Speaker 8: How do I build robotic things that can do stuff
Speaker 8: for me around my enterprise? How do I build AI
Speaker 8: agents that can do stuff for me?
Speaker 4: I'm a enterprise.
Speaker 8: Do I build or do I buy from somebody? So
Speaker 8: all that stuff will take a little longer to pan out.
Speaker 8: But when it happens, we're going to need all that
Speaker 8: capacity that's being built, and unfortunately, you can't wait to
Speaker 8: build capacity, you have to build it ahead of demands.
Speaker 8: I think I think it's the right direction. Timing's still
Speaker 8: to be figured out.
Speaker 3: Well, thanks for sharing your expertise across all the subjects
Speaker 3: and the deal news aqusha Ura go enjoy RSA. We
Speaker 3: thank you, Palo Alta Networks CEO. Now next up, talking
Speaker 3: tech first stuff, I'm talking about UAE data center developer Kasna. Well,
Speaker 3: it's planning a major expansion into Saudi Arabia.
Speaker 7: Now.
Speaker 2: The company is looking to take.
Speaker 3: Twenty five percent of the market share already identified two
Speaker 3: locations for its data centers, directly competing with smaller local
Speaker 3: and specialized firms, plus German defense startup Arx Robotics. Let's
Speaker 3: raised thirty five million dollars in its latest VC funding round,
Speaker 3: and it's the second time in the past year as
Speaker 3: the company aims to expand in the United Kingdom. Aarx
Speaker 3: Robotics declined to share this new valuation and alphabet after
Speaker 3: its earning is now set to be offering about four
Speaker 3: million dollars in US high grade corporate debt today.
Speaker 2: It's according to sources.
Speaker 3: The company is said to be looking to sell the
Speaker 3: bonds in as many as four parts and could mark
Speaker 3: the company's first bond sale. This is the way back
Speaker 3: in twenty twenty are coming up. We'll talk to the
Speaker 3: managing partners of FPV about finding product led AI startups
Speaker 3: for their latest fund you will.
Speaker 2: There's some news out on Sony.
Speaker 3: Could they be spinning out their semiconductor part of the business.
Speaker 3: The shares have actually risen on the back of the
Speaker 3: news that as the company tries to get more focused.
Speaker 3: Of course it's all about PlayStation and gaming, but they're
Speaker 3: also trying to be selling off some of the assets
Speaker 3: that don't mean quite so much to the core business anymore.
Speaker 3: Semiconductor has been One of them is Bloombag Technology, EUIL
Speaker 3: masks XAI. Well, it's in talks to raise roughly twenty
Speaker 3: billion dollars in funding for its newly combined AI and
Speaker 3: social media business. According to sources, the deal would value
Speaker 3: the company in over one hundred and twenty billion dollars,
Speaker 3: according to one of the people briefed on the matter. Now,
Speaker 3: if completed, it will be the second largest startup funning
Speaker 3: round of all time behind guess who Open ai And
Speaker 3: they're forty billion dollar financing earlier this year, according to
Speaker 3: data from Pitchbook. Now, we've got so much when it
Speaker 3: comes to VC. And there's more fundraising news from a
Speaker 3: fund perspective. The venture firm fpv's raised five hundred twenty
Speaker 3: five million dollars to fund target product driven startups. Fpv's
Speaker 3: co founders have back companies such as Canva and Flexport
Speaker 3: and Peace to Welcome to the show, Pega Abraham and
Speaker 3: Wesley Chan join us. Now, congratulations on the funding round.
Speaker 2: Now we're excited, So tell.
Speaker 3: Me Pega first and foremost, how hard how easy was
Speaker 3: it to get the LP's excited in.
Speaker 2: This current environment.
Speaker 11: I mean, you know you have we last time around
Speaker 11: we raised I think when we announced it was the
Speaker 11: seventy five basis points that the FED just raised.
Speaker 2: So we're used to this.
Speaker 11: And our investors are back really long term founders and
Speaker 11: that's what we're focused on. So it wasn't the environment stuff,
Speaker 11: and we're privileged to have raised. But you know, we
Speaker 11: had just exceptional bluetrip founders who are really investing for
Speaker 11: the long term, so they're not as distracted by the
Speaker 11: short term stuff.
Speaker 3: I mean, Wesley, we think about how much Canva, for example,
Speaker 3: has managed to be an iconic company you found not
Speaker 3: on the West coast of America on any US A tool,
Speaker 3: but over in Australia.
Speaker 2: How do you find teams like that? How do you
Speaker 2: replicate the success?
Speaker 14: Yes, so our founders are amazing product driven founders, right,
Speaker 14: so they see other amazing product driven founders.
Speaker 2: That's the secret.
Speaker 14: Like I spent over fifteen years at Google, of which
Speaker 14: ten of them I help build the ad system, launch
Speaker 14: Google Analytics, I helped launch Google Voice, I help bring
Speaker 14: Android and help them grow. Like It's one of those
Speaker 14: things that when you've worked on these products that are hundreds,
Speaker 14: if not billions of people use worldwide, you have a
Speaker 14: reputation for building great products that founders gravitate towards. And
Speaker 14: so I got the opportunity to meet the Canva founders
Speaker 14: more than a decade ago. They were very excited about
Speaker 14: some of the product work that I did. I help
Speaker 14: them build and prioritize some of their features, and they said,
Speaker 14: let's work together. And that's what I love doing, is
Speaker 14: spending time with founders that want to build products that
Speaker 14: change the world, that do better whether there's a recession
Speaker 14: or not a recession, and that just stand the test
Speaker 14: of time. And so that's what we do here at.
Speaker 3: FPV, and it's about kind of being the operators alongside them.
Speaker 3: People come to your experience from Google, your experience from Cisco,
Speaker 3: experience from August Stanley and the technology area there pego,
Speaker 3: and I'm I'm interested as to what advice you're giving
Speaker 3: to found us right now when none of us really
Speaker 3: having any idea with a clarityism.
Speaker 11: No. Look, so one thing is clear, and everyone's like,
Speaker 11: what's happening to the market, and one thing it's clear
Speaker 11: it's gonna be whiplash. I mean, we're gonna have a
Speaker 11: few years up, up and down. But we both started
Speaker 11: out during the tech bubble burst, and I was CIO
Speaker 11: at Morgan Stanley during the financial crisis. There's gonna you
Speaker 11: can't go up to the right all the time. And
Speaker 11: if you're really building for the wrong term, you shouldn't
Speaker 11: get you have to go with the waves, but you
Speaker 11: can't really be building for the next year or the
Speaker 11: next two years. And for the founders that are really
Speaker 11: looking for those ten year plus horizons, it's actually a
Speaker 11: great time because you have to focus. You can't get
Speaker 11: as much distraction, you don't have as much competition.
Speaker 2: Because not everyone can raise.
Speaker 11: So if you're a mission driven founder who's really focused
Speaker 11: on really changing the future, this is actually a great
Speaker 11: time to just say laser focus on those big missions.
Speaker 11: And if you're not a mission driven founder, look, it's
Speaker 11: gonna be hard. If you're depending on the hype and
Speaker 11: the short term stuff. It might not the hype might
Speaker 11: not last on certain things. And so that's what we say,
Speaker 11: stay focus. If you have a really big vision and
Speaker 11: you know, work with the times.
Speaker 3: I mean, you have been the anti hype apostles in
Speaker 3: many ways just saying cut through that noise.
Speaker 2: But Wesley, a lot of LPs.
Speaker 3: At this moment thought there'd be a little bit of
Speaker 3: hyper our exits around IPOs, but.
Speaker 2: That's not happening now.
Speaker 3: How are you helping your current your previous fund bets
Speaker 3: be able to give liquidity to that talent.
Speaker 2: How are you helping them sort of march through this?
Speaker 4: Well.
Speaker 14: One of the wonderful things about the LPs we found
Speaker 14: is that they're long term thinkers. Right like we have
Speaker 14: blue chip lpiece, most of them are charitable endowments and
Speaker 14: foundations that think, you know, decades, if not like fifty
Speaker 14: years out into the future, and they know in investing us,
Speaker 14: we're not placing the bet for today. We're doing it
Speaker 14: for ten years in the future. That's the liquidity time
Speaker 14: horizon for venture capital. So we're not worried about like
Speaker 14: if things exit tomorrow, ORF things exit next year, obviously
Speaker 14: our LPs would like it, but we worry about if
Speaker 14: things are going to be big in ten years. Right,
Speaker 14: they have the option to exit, but if they hold on,
Speaker 14: the add more value and our LPs are okay with
Speaker 14: it because there's such long term thinkers, and we have
Speaker 14: deep pools of capital.
Speaker 10: We want to return.
Speaker 14: Money to them, but we want to do it at
Speaker 14: the right time, and we want to do it when
Speaker 14: things are great. And so the help the companies that
Speaker 14: survived the recessions, the companies that survived the market turmoil,
Speaker 14: whether it's tariffs or whether it's crazy world war or
Speaker 14: whatever else, Like they are left and they are the winners,
Speaker 14: and then they have these wonderful exits. Google in two
Speaker 14: thousand and four was dot com crash, right, and then
Speaker 14: like they exited and they became a big market winner.
Speaker 2: Yeah, And I worked on the IPO.
Speaker 11: It was like it reopened the market and everyone was
Speaker 11: freaking out that it was never going to come back.
Speaker 2: And they reopened it.
Speaker 11: And then you got you know, several years later after
Speaker 11: the financial crisis worked, they all the salesforce, all these guys.
Speaker 11: So there was great companies built during these times. And
Speaker 11: I think it takes longer to exit, But that's one
Speaker 11: of the benefits we have. Like is it ten years,
Speaker 11: is it twelve years? It doesn't matter for compounding companies. Obviously,
Speaker 11: it's harder for zero growth.
Speaker 3: I mean, everyone thought, cool, you would reopen the market,
Speaker 3: and that was a very udio idiosyncratic kind of a bet.
Speaker 3: But then ultimately the market's moved away from them. What
Speaker 3: reopens us next time? What are we currently seeing value
Speaker 3: a crew too? That's the right thing to have, value
Speaker 3: a crew too, peck of Look.
Speaker 11: I think when the market's open, I mean, I don't
Speaker 11: know if I can predict the future, but I can
Speaker 11: tell you market's like a bit of stability, So it
Speaker 11: might not be for a bit if we're not having
Speaker 11: if we're not kind of knowing what's happening. I think
Speaker 11: now we have the tear of shock that will smooth out.
Speaker 11: Then people that have been ready for a while will
Speaker 11: start saying, okay, we're coming back back in maybe, but
Speaker 11: I think nobody wants to go when the tides are like,
Speaker 11: you know, going up and down at the same time.
Speaker 11: But I think people will have to eventually it becomes normal.
Speaker 11: Maybe this this whiplash is actually normalized, and then people
Speaker 11: don't care.
Speaker 3: I mean, Wesley Lin, you're looking for ten yas time
Speaker 3: you're looking at perhaps private market valuations be impacted slightly
Speaker 3: by public markets, But what.
Speaker 2: Is the tenure bet? What is currently interesting?
Speaker 3: Now there's going to be incredibly interesting in Tenya's time
Speaker 3: that people aren't thinking about.
Speaker 14: So we have a lot of healthcare AI bets, right,
Speaker 14: and that sounds sort of crazy because a lot of
Speaker 14: people are running away from healthcare in the last couple
Speaker 14: of years. But we have companies that are really using
Speaker 14: AI or using machine learning to figure out the next
Speaker 14: generation of drugs. And then we have a company that
Speaker 14: has figured out how to do clinical trials and half
Speaker 14: the time and half the price using AI to find
Speaker 14: better patients. And then they are taking drugs out the
Speaker 14: market themselves because they have this cost of manage.
Speaker 9: These are massive tenure bets.
Speaker 14: The founders are amazing and mission driven, and they're able
Speaker 14: to raise capital and hopefully they'll be around when everybody
Speaker 14: else is getting washed away by the hurricane.
Speaker 2: I think the healthcare bit.
Speaker 11: And I would say also, you know, at the first
Speaker 11: craze of AI, everyone gets excited about it feels like
Speaker 11: not incremental tech, and I think they're really exciting stuff.
Speaker 11: There's no it's kind of like the cloud times. If
Speaker 11: you're building a company and you're not building on aws
Speaker 11: like they're, you're like crazy, So of course you should
Speaker 11: be using AI. But I think it's are you Are
Speaker 11: you working on the big problems and are you working
Speaker 11: on not the incremental things, but they're really big things
Speaker 11: that just weren't possible. And that's the things that happen
Speaker 11: with health, in biotech.
Speaker 2: And some of those things.
Speaker 11: It's just things that just weren't possible because now you
Speaker 11: can do it.
Speaker 3: Pega, we go thirty seconds. Are they got to be
Speaker 3: built in the West Coast? Are they going to be
Speaker 3: built globally? Where are you going to find this us?
Speaker 11: I mean we're going to go everywhere wherever great founders
Speaker 11: are and hopefully they come looking for us too. But
Speaker 11: I think there's no denying that the West Coast has
Speaker 11: a lot of the current talent and the uh you
Speaker 11: know in Ai. But I think we're going to go everywhere.
Speaker 3: I get Ebrahimi, we're pleased that you came here along
Speaker 3: with Wesley Shan. Great to have the co founders and
Speaker 3: managing partners of FPV in the studio today.
Speaker 2: We appreciate it.
Speaker 3: Delivery shares over in the UK absolutely surging today, most
Speaker 3: on record of eighteen percent, and this is after the
Speaker 3: British delivery firm disclosed an acquisition offer from door Dash
Speaker 3: which would value Delivery at three point six billion dollars
Speaker 3: the megs Henry Wren has more. As we can see,
Speaker 3: Delivery has currently been a phenomenal days trade up sixteen
Speaker 3: percent is where it closed the market, but it's well
Speaker 3: off the highs of where it used to trade. I
Speaker 3: think it had a seven billion market cap at one point, Henry,
Speaker 3: Why would we see DoorDash want to be buying in.
Speaker 15: Yes, So we really think that the deal, the offer
Speaker 15: from Ordash is something that's long time in the making,
Speaker 15: because according to press reports as early as twenty twenty two,
Speaker 15: there have been already been interest from DoorDash to merge
Speaker 15: with Delivery. Also, DoorDash have this international expansion ambition already
Speaker 15: because in twenty twenty two it made a deal to
Speaker 15: buy a finish food delivery company called Quote at that time,
Speaker 15: so it has demonstrated its ambition to expand overseas. Also,
Speaker 15: in twenty twenty four there was a change on deliver
Speaker 15: Roue side because there was an expiry of a dual
Speaker 15: class sheer structure at that time, so which means that
Speaker 15: CEO and founder Will Shoe no longer held the dominant
Speaker 15: voting power, which paved the way for consolidations or further
Speaker 15: mergers down the road. So we think that actually it's
Speaker 15: not very surprising and it's something a long time in
Speaker 15: the making, long time in the making.
Speaker 3: Shares have bounced today, but not up to the highs
Speaker 3: of the full extent of the offer. Henry, and I'm
Speaker 3: interested as to whether there's any concern around the consolidation.
Speaker 3: We're seeing any industry writ large right now because Process
Speaker 3: Group has been making bids for other Delivery Hero for example.
Speaker 4: Yeah.
Speaker 2: Indeed, so.
Speaker 15: For European food delivery stocks, whether we're talking about just
Speaker 15: Eat or deliver Ru or Delivery Hero, it's very clear
Speaker 15: on their share price chot that there have been well
Speaker 15: off their heights about three years ago. The reason is
Speaker 15: pretty clear because those companies they even pumped huge investor
Speaker 15: led cash at that time during the pandemic days.
Speaker 2: And order its numbers were high.
Speaker 15: But now as we come out of the pandemic, people
Speaker 15: dine more into restaurants, so that peak is no longer
Speaker 15: there and those companies have to pivot to profitability, and
Speaker 15: that's why we're seeing low and lower growth. For example,
Speaker 15: for deliver Ru, it's only reporting about seven percent.
Speaker 4: Order growth this quarter and.
Speaker 15: That's the exact reason why we're seeing more consolidations here.
Speaker 15: You mentioned about the process offware for just Eat and
Speaker 15: this deal that we're looking at as well. Because these
Speaker 15: companies they need more competition, they need more deals to ease.
Speaker 2: Up the competition. I have to leave it there. We
Speaker 2: thank you, Henry Rn. That does it for this addition
Speaker 2: of blue Meg technology,