1 00:00:01,600 --> 00:00:05,280 Speaker 1: From the Heart where Innovation, money and power Collie in 2 00:00:05,400 --> 00:00:06,880 Speaker 1: Silicon Vallet NBN. 3 00:00:07,200 --> 00:00:11,280 Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 4 00:00:24,360 --> 00:00:27,200 Speaker 3: I'm Caroline Heider Bloomberg's Worlday quarters in New York, and 5 00:00:27,240 --> 00:00:28,800 Speaker 3: I'm Ed Ludlow in San Francisco. 6 00:00:28,880 --> 00:00:30,440 Speaker 4: In this is Bloomberg Technology. 7 00:00:30,600 --> 00:00:34,080 Speaker 3: Coming up, we'll talk all things chips as Intel wins 8 00:00:34,120 --> 00:00:37,040 Speaker 3: nearly twenty million dollars of incentives from the US government. 9 00:00:37,360 --> 00:00:42,000 Speaker 5: Plus the Biden administration weighs sanctions on Huawei's secretive chip 10 00:00:42,280 --> 00:00:45,760 Speaker 5: network as the US seeks to curtail China's tech ambitions. 11 00:00:45,960 --> 00:00:49,159 Speaker 3: And look, we've got to talk IPOs Reddit tomorrow. The 12 00:00:49,200 --> 00:00:51,840 Speaker 3: company and shareholders guiding that they could price the offering 13 00:00:52,120 --> 00:00:55,400 Speaker 3: at the top of its marketed ranger, above Astera Labs. 14 00:00:55,480 --> 00:00:58,280 Speaker 3: The CEO joins US later as we expect to pop 15 00:00:58,360 --> 00:00:59,040 Speaker 3: in those shares. 16 00:00:59,240 --> 00:01:01,480 Speaker 6: Exclusive report at from Bloombog. 17 00:01:01,520 --> 00:01:04,480 Speaker 3: The US is considering blacklisting a number of Chinese semiconductor 18 00:01:04,520 --> 00:01:08,000 Speaker 3: firms linked to Huawei. That's after the telecom giant, of course, 19 00:01:08,040 --> 00:01:10,000 Speaker 3: made that significant technological breakthrough. 20 00:01:10,040 --> 00:01:11,520 Speaker 6: It seemed like last year. 21 00:01:11,880 --> 00:01:13,959 Speaker 3: According to sources, We've got to get into it with 22 00:01:14,000 --> 00:01:17,800 Speaker 3: Bloomberg's executive editor for US Government, Michael Shephard. 23 00:01:17,920 --> 00:01:19,640 Speaker 6: Michael, it's great to have you on the show. And 24 00:01:19,959 --> 00:01:20,840 Speaker 6: perhaps we've. 25 00:01:20,640 --> 00:01:23,839 Speaker 3: Seen the reading of the tea leies anticipating yet further 26 00:01:23,920 --> 00:01:25,319 Speaker 3: action on Chinese names. 27 00:01:25,600 --> 00:01:28,280 Speaker 7: Well, I think you're right. What we're seeing is an 28 00:01:28,319 --> 00:01:33,520 Speaker 7: extension of the Biden administration's push to keep China's chip 29 00:01:33,560 --> 00:01:40,360 Speaker 7: making and technological pursuit in check. We have already seen 30 00:01:40,400 --> 00:01:44,120 Speaker 7: them negotiating with the Netherlands, with Japan, with South Korea, 31 00:01:44,160 --> 00:01:47,280 Speaker 7: and other countries to try to prevent China from acquiring 32 00:01:47,319 --> 00:01:50,240 Speaker 7: the gear needed to make those advanced chips like the 33 00:01:50,240 --> 00:01:53,600 Speaker 7: one that we saw Huawei deploy in that phone last summer. 34 00:01:53,840 --> 00:01:56,040 Speaker 7: What was interesting is that the US was caught by 35 00:01:56,120 --> 00:01:59,920 Speaker 7: surprise back then with that particular model of phone, which 36 00:02:00,000 --> 00:02:03,960 Speaker 7: had a seven nanometer chip that was a semiconductor that 37 00:02:04,000 --> 00:02:06,760 Speaker 7: the US had previously thought was out of China's reach. 38 00:02:07,240 --> 00:02:10,880 Speaker 7: And Huawei, remember, has also been in the US cross 39 00:02:10,919 --> 00:02:13,400 Speaker 7: heres for quite some time, for nearly a decade. 40 00:02:14,680 --> 00:02:15,000 Speaker 4: Michael. 41 00:02:15,000 --> 00:02:18,680 Speaker 5: We're just showing the list of Chinese domestic chip names 42 00:02:19,000 --> 00:02:22,840 Speaker 5: that the US, according to our sources, is considering sanctioning. 43 00:02:22,919 --> 00:02:27,440 Speaker 5: Swayshore pst CXMT, the d ram maker. What they all 44 00:02:27,480 --> 00:02:30,840 Speaker 5: have in common, based on my understanding of the reporting, 45 00:02:31,280 --> 00:02:35,000 Speaker 5: is existing ties to Huawei, either they're an affiliate of 46 00:02:35,040 --> 00:02:39,520 Speaker 5: Huawei or Huawei has basically been using those companies to 47 00:02:39,639 --> 00:02:42,720 Speaker 5: try and get access to chip making equipment to which 48 00:02:42,800 --> 00:02:46,280 Speaker 5: Huawei is banned or sanctioned from accessing. 49 00:02:47,840 --> 00:02:50,960 Speaker 7: Well, you're right, Huawei has been on the so called 50 00:02:51,160 --> 00:02:55,080 Speaker 7: entity list, this blacklist since twenty nineteen, and that prohibits 51 00:02:55,200 --> 00:02:59,519 Speaker 7: any US company from selling technology to Huawei unless it 52 00:02:59,560 --> 00:03:02,960 Speaker 7: could spell permission from the Commerce Department. And the concern 53 00:03:03,080 --> 00:03:05,000 Speaker 7: is that while we may have been able to develop 54 00:03:05,080 --> 00:03:08,200 Speaker 7: this advanced chip that I just mentioned by using some 55 00:03:08,240 --> 00:03:11,600 Speaker 7: of these companies as proxies to help get some of 56 00:03:11,639 --> 00:03:15,160 Speaker 7: the technology it needed to make that leap. And so 57 00:03:15,240 --> 00:03:17,200 Speaker 7: now what the US is trying to do, and Commerce 58 00:03:17,240 --> 00:03:20,160 Speaker 7: Secretorary Gina Raymondo has been very clear about trying to 59 00:03:20,560 --> 00:03:25,360 Speaker 7: plug any gaps in access that Huawei may have to 60 00:03:25,480 --> 00:03:29,760 Speaker 7: advance technology. And likewise, the Commerce Department has also been pushing, 61 00:03:29,800 --> 00:03:34,359 Speaker 7: as I mentioned, efforts to try to restrict China's access 62 00:03:34,440 --> 00:03:39,320 Speaker 7: to chip making equipment in other areas as well. 63 00:03:39,400 --> 00:03:41,320 Speaker 5: Okay, and it's important to note that the White House 64 00:03:41,400 --> 00:03:44,960 Speaker 5: National Security Council, the Commerce Department did not comment on 65 00:03:45,040 --> 00:03:48,520 Speaker 5: our story. Representatives all those Chinese domestic names that we 66 00:03:48,520 --> 00:03:51,120 Speaker 5: show didn't respond to comment, but the Ministry of Foreign 67 00:03:51,120 --> 00:03:55,160 Speaker 5: Affairs in China reiterated to us that it resolutely opposes 68 00:03:55,280 --> 00:04:00,240 Speaker 5: US actions that disrupt market order and harm Chinese Enterprises's 69 00:04:00,240 --> 00:04:03,360 Speaker 5: Michael Sheppard out of DC on an incredibly important Bloomberg 70 00:04:03,520 --> 00:04:04,360 Speaker 5: piece of reporting. 71 00:04:04,400 --> 00:04:06,480 Speaker 4: Thank you the other chip News. Let's get back to it. 72 00:04:06,720 --> 00:04:09,680 Speaker 5: US will award Intel eight point five billion dollars in 73 00:04:09,720 --> 00:04:12,840 Speaker 5: grants and as much as eleven billion dollars in loans 74 00:04:12,880 --> 00:04:16,920 Speaker 5: to help the company fund and expansion of its semiconductive factories. 75 00:04:16,960 --> 00:04:20,719 Speaker 5: That's the largest award from a program designed to reinvigorate 76 00:04:21,000 --> 00:04:23,800 Speaker 5: the domestic chip industry. Here with me and San Francisco, 77 00:04:23,800 --> 00:04:26,680 Speaker 5: Bloomberzie and King, we've gone the phone last night with 78 00:04:26,760 --> 00:04:29,960 Speaker 5: Pat Gelsinger. It's a big chunk of money. He told 79 00:04:30,040 --> 00:04:32,039 Speaker 5: us he would have liked more, but he's pretty happy 80 00:04:32,080 --> 00:04:35,599 Speaker 5: with it. The main point is to onshore or re 81 00:04:35,920 --> 00:04:39,039 Speaker 5: onshore the semiconductor industry in this country. 82 00:04:39,160 --> 00:04:41,760 Speaker 8: Yeah, I mean there are two things that play here. Obviously, 83 00:04:41,880 --> 00:04:44,920 Speaker 8: the concentration of advanced manufacturing who's currently in East Asia, 84 00:04:45,040 --> 00:04:48,760 Speaker 8: predominantly Taiwan, but also South Korea. That, as we saw 85 00:04:48,839 --> 00:04:52,960 Speaker 8: during the pandemic and this ongoing dispute with China, is 86 00:04:53,080 --> 00:04:57,039 Speaker 8: a security risk, it's a stability risk. The Biden administration 87 00:04:57,160 --> 00:05:01,479 Speaker 8: wants contingencies, it wants manufacturing in this country. It's backing 88 00:05:01,560 --> 00:05:04,240 Speaker 8: Intel as the best chance of getting that. For Intel, 89 00:05:05,040 --> 00:05:07,360 Speaker 8: they're on the comeback trail. They need money, all right, 90 00:05:07,600 --> 00:05:09,120 Speaker 8: and this is a big chunk of that. 91 00:05:10,360 --> 00:05:12,880 Speaker 3: Let's also think about some of the other names that 92 00:05:12,920 --> 00:05:14,920 Speaker 3: are likely to be incentivized to build here in the 93 00:05:15,040 --> 00:05:17,599 Speaker 3: United States, because it's notable. The US name gets the 94 00:05:17,600 --> 00:05:20,440 Speaker 3: big chunk of change and the announcement, but others are 95 00:05:20,440 --> 00:05:22,599 Speaker 3: going to be receiving it from the likes of Samsung 96 00:05:22,640 --> 00:05:23,200 Speaker 3: for example. 97 00:05:24,240 --> 00:05:27,320 Speaker 8: Yeah, I mean, you can't just back Intel. Intel, you know, 98 00:05:27,400 --> 00:05:29,600 Speaker 8: let's be honest, has kind of fallen behind over the 99 00:05:29,680 --> 00:05:33,200 Speaker 8: last five years. They say they're making a good shake 100 00:05:33,520 --> 00:05:35,560 Speaker 8: of a comeback and that they're close to being back 101 00:05:35,560 --> 00:05:37,800 Speaker 8: where they should be. But if you're looking at it 102 00:05:37,839 --> 00:05:40,480 Speaker 8: from a purely objective point of view, then you have 103 00:05:40,520 --> 00:05:43,400 Speaker 8: to back the winners as well, and that would be Samsung, 104 00:05:43,440 --> 00:05:46,720 Speaker 8: and that would be Taiwan semi conductor Manufacturing, and both 105 00:05:46,720 --> 00:05:50,400 Speaker 8: of those companies are building new facilities in the US. 106 00:05:50,920 --> 00:05:54,040 Speaker 5: I think Pat Gelsinger was honest with us last night 107 00:05:54,160 --> 00:05:58,120 Speaker 5: that the semiconductory industry in this country over a thirty 108 00:05:58,200 --> 00:06:01,599 Speaker 5: year period, went elsewhere. Therefore, it's not going to happen 109 00:06:01,640 --> 00:06:05,159 Speaker 5: overnight bringing it back. But walk our audience through the 110 00:06:05,160 --> 00:06:07,880 Speaker 5: footprint of what they're trying to do. Arizona and Ohio 111 00:06:07,960 --> 00:06:10,480 Speaker 5: are the focus. They also have plans for New Mexico. 112 00:06:10,880 --> 00:06:13,479 Speaker 5: The twenty billion actually goes quite a long way towards 113 00:06:13,480 --> 00:06:14,440 Speaker 5: getting things built. 114 00:06:15,160 --> 00:06:17,120 Speaker 8: It doesn't, It doesn't. I mean, you've got to bear 115 00:06:17,120 --> 00:06:20,880 Speaker 8: in mind one of these plants, twenty billion is just 116 00:06:20,920 --> 00:06:21,880 Speaker 8: about going to cover. 117 00:06:21,760 --> 00:06:23,760 Speaker 4: Its soutariety of that one fab. 118 00:06:23,760 --> 00:06:26,720 Speaker 8: Right, So, I mean, and it's not actually building the factory, 119 00:06:26,720 --> 00:06:28,560 Speaker 8: it's the equipment. It's what the money you give to 120 00:06:28,560 --> 00:06:31,159 Speaker 8: apply materials and everything like that. So it's a massive 121 00:06:31,200 --> 00:06:34,080 Speaker 8: amount of public money. But as you said, as you 122 00:06:34,160 --> 00:06:36,560 Speaker 8: reminded us, he said, it's not as much as I want. 123 00:06:36,640 --> 00:06:36,760 Speaker 7: Right. 124 00:06:36,800 --> 00:06:41,359 Speaker 8: This helps this balances the economics. This makes investing in 125 00:06:41,400 --> 00:06:44,000 Speaker 8: a US facility sort of equivalent to doing it in 126 00:06:44,040 --> 00:06:46,960 Speaker 8: Taiwan or doing it in South Korea. But this is 127 00:06:47,000 --> 00:06:49,760 Speaker 8: not a free pass. This is not a ten year 128 00:06:49,920 --> 00:06:52,240 Speaker 8: kind of extension of Intel's life to do what they 129 00:06:52,240 --> 00:06:56,200 Speaker 8: want for free for free. It's considerable help, but we're 130 00:06:56,200 --> 00:06:58,239 Speaker 8: going to need more money if we want to create 131 00:06:58,279 --> 00:07:00,000 Speaker 8: that basis. 132 00:07:00,040 --> 00:07:04,240 Speaker 3: While the real gem of the chip ecosystem in the 133 00:07:04,320 --> 00:07:07,440 Speaker 3: US and video has still been going out there discussing 134 00:07:07,520 --> 00:07:10,920 Speaker 3: its future plans. It's vision for an AI focused reality 135 00:07:11,600 --> 00:07:13,400 Speaker 3: in what are we learning more from in video? And 136 00:07:13,400 --> 00:07:15,200 Speaker 3: also who they're bathing in their own glory? 137 00:07:16,440 --> 00:07:20,320 Speaker 8: Are they anybody that Jensen Wang mentioned during his massive keynote, 138 00:07:20,480 --> 00:07:23,920 Speaker 8: they start got a bump, and you know, my colleagues 139 00:07:23,960 --> 00:07:25,640 Speaker 8: on the market team wrote a good story about that, 140 00:07:25,720 --> 00:07:27,840 Speaker 8: So have a look at that one. And that's exactly 141 00:07:27,840 --> 00:07:30,680 Speaker 8: what's going on here. They are absolutely central to what's 142 00:07:30,720 --> 00:07:33,000 Speaker 8: going on. The big message was, hey, here's a great 143 00:07:33,040 --> 00:07:34,680 Speaker 8: new tip. Of course it's twice as good as the 144 00:07:34,680 --> 00:07:37,880 Speaker 8: previous one, but don't worry too much about that. There's servers, 145 00:07:38,000 --> 00:07:41,280 Speaker 8: there's networking, there's you name it, and we're going to 146 00:07:41,320 --> 00:07:44,720 Speaker 8: bring this technology to everybody. It's not just going to 147 00:07:44,720 --> 00:07:46,840 Speaker 8: be for Amazon. It's not just going to be for Microsoft. 148 00:07:47,000 --> 00:07:49,280 Speaker 8: We're going to put it out there for corporations yunday. 149 00:07:49,360 --> 00:07:52,880 Speaker 8: Shipbuilding is going to be using AI to make better ships. 150 00:07:52,920 --> 00:07:53,920 Speaker 4: It's everything. 151 00:07:54,000 --> 00:07:56,040 Speaker 8: That was the big message that they kind of rammed 152 00:07:56,040 --> 00:07:57,800 Speaker 8: down our throats over the last couple of days. 153 00:07:58,200 --> 00:08:00,200 Speaker 3: It's Sam sang up the most of six months to 154 00:08:00,640 --> 00:08:04,360 Speaker 3: getting Jensen Lang's blessing a little bit earlier, inking across 155 00:08:04,360 --> 00:08:06,120 Speaker 3: it all in the world of chips, We've got more 156 00:08:06,120 --> 00:08:07,680 Speaker 3: to come. We thank you so much. I mean, while 157 00:08:07,680 --> 00:08:10,440 Speaker 3: coming up, Look, let's just check in on the implication 158 00:08:10,520 --> 00:08:12,400 Speaker 3: of the chip market on the rest of the markets. 159 00:08:12,480 --> 00:08:15,120 Speaker 3: Remember Magnificent seven still driving us to New hus yesterday. 160 00:08:15,360 --> 00:08:16,400 Speaker 6: Where is it going in the future? 161 00:08:16,400 --> 00:08:19,920 Speaker 3: Principal Asset Management chief Global strategist Semashal joins us ed, 162 00:08:20,000 --> 00:08:20,680 Speaker 3: what are you looking at? 163 00:08:21,400 --> 00:08:23,440 Speaker 5: Well, I'm looking at shares of Micron because we're at 164 00:08:23,440 --> 00:08:26,240 Speaker 5: the tail end of earning season. But Micron memory chip maker, 165 00:08:26,320 --> 00:08:31,640 Speaker 5: incredibly important, DRAM highly commoditized, and we've seen recovery in 166 00:08:31,720 --> 00:08:35,160 Speaker 5: d RAM prices and the streets. Expectation is that that 167 00:08:35,240 --> 00:08:37,840 Speaker 5: will result in some feel good for Micron. Where do 168 00:08:37,960 --> 00:08:41,280 Speaker 5: the memory chip makers sit in this AI story? We 169 00:08:41,360 --> 00:08:42,920 Speaker 5: still kind of want to learn that if they're building 170 00:08:42,920 --> 00:08:45,680 Speaker 5: all these data centers, surely they need the memory to 171 00:08:45,720 --> 00:08:48,640 Speaker 5: go in there alongside the GPUs and CPUs. Micro run 172 00:08:48,720 --> 00:08:50,880 Speaker 5: up nine ten to percent, and it's a big earnings 173 00:08:50,920 --> 00:09:13,600 Speaker 5: print after the bell. This is Bloomberg technology. 174 00:09:08,920 --> 00:09:10,960 Speaker 3: Go ahead of the FED decision today, This so called 175 00:09:11,000 --> 00:09:13,760 Speaker 3: Magnificent Seven, a few of them taking a breather, having 176 00:09:13,880 --> 00:09:17,000 Speaker 3: powered benchmarks to new records yesterday. I made all this 177 00:09:17,120 --> 00:09:19,640 Speaker 3: AI hype and indeed the reality being served to us 178 00:09:19,679 --> 00:09:22,760 Speaker 3: from in video for example, the Laters unveilings. They've made 179 00:09:23,120 --> 00:09:26,560 Speaker 3: some of these Magnificent seven names the most crowded trade 180 00:09:26,640 --> 00:09:27,800 Speaker 3: according to Bank of America. 181 00:09:27,920 --> 00:09:30,439 Speaker 6: So is this rarely going to be sustained? Let's get 182 00:09:30,520 --> 00:09:30,800 Speaker 6: into it. 183 00:09:30,800 --> 00:09:33,800 Speaker 3: Principal Asset Management chief Global strategist Seemacha is here with 184 00:09:33,880 --> 00:09:36,520 Speaker 3: us and to talk us through the macro and the 185 00:09:36,559 --> 00:09:39,600 Speaker 3: micro and just tell us how much you think, with 186 00:09:39,720 --> 00:09:41,959 Speaker 3: the macro policy as it is, with the fared as 187 00:09:41,960 --> 00:09:45,520 Speaker 3: it is, whether or not the Magnificent Seven can continue 188 00:09:45,520 --> 00:09:46,760 Speaker 3: to just own this rally. 189 00:09:46,880 --> 00:09:49,200 Speaker 9: Yeah, well, thanks for having me on. It's an interesting 190 00:09:49,240 --> 00:09:52,199 Speaker 9: question right now because coming to this year, there was 191 00:09:52,679 --> 00:09:54,720 Speaker 9: a perspective that actually there was going to be a 192 00:09:54,720 --> 00:09:57,160 Speaker 9: ship away from the MAG seven into other parts of 193 00:09:57,160 --> 00:09:59,760 Speaker 9: the market. But actually what we've seen is because there 194 00:09:59,760 --> 00:10:02,720 Speaker 9: has been in so much macro volatility, so much debates 195 00:10:02,720 --> 00:10:04,600 Speaker 9: still going on about what the FED is going to do, 196 00:10:05,280 --> 00:10:08,960 Speaker 9: that you're still seeing that uncertainty. Mean that investors are 197 00:10:09,000 --> 00:10:11,240 Speaker 9: looking for where they have safety, where they know what 198 00:10:11,280 --> 00:10:15,079 Speaker 9: they can expect, and so that means that actually people's 199 00:10:15,200 --> 00:10:18,719 Speaker 9: interest in MAG seven has been maintained. And of course 200 00:10:18,720 --> 00:10:21,479 Speaker 9: there's always going to be questions about the froppiness evaluations. 201 00:10:21,800 --> 00:10:24,240 Speaker 9: But actually the clients that we're speaking to, they're telling 202 00:10:24,280 --> 00:10:26,359 Speaker 9: us that they really do have belief in the expectations, 203 00:10:26,400 --> 00:10:29,160 Speaker 9: the earnings expectations, so they're not too concerned about the 204 00:10:29,160 --> 00:10:30,920 Speaker 9: froth but they would like to find other parts of 205 00:10:30,920 --> 00:10:32,920 Speaker 9: the market to also increase exposure to. 206 00:10:33,400 --> 00:10:35,200 Speaker 6: And let's talk about other parts of the market. 207 00:10:35,240 --> 00:10:39,360 Speaker 3: Is it therefore a broader part of the AI ecosystem 208 00:10:39,400 --> 00:10:42,199 Speaker 3: we look at other names? Are the global names in particular, 209 00:10:42,280 --> 00:10:44,960 Speaker 3: I think of ASML's done really well over there in Europe, 210 00:10:44,960 --> 00:10:47,160 Speaker 3: We've done some other Asian names doing incredibly well. 211 00:10:47,200 --> 00:10:48,920 Speaker 6: Or is it just getting into other industry groups. 212 00:10:49,960 --> 00:10:52,120 Speaker 9: So there's a bit of both. I mean typically looking 213 00:10:52,120 --> 00:10:54,720 Speaker 9: across TU Asia for the parts of that tech space 214 00:10:54,760 --> 00:10:57,680 Speaker 9: which can do well, but it is also about looking 215 00:10:57,720 --> 00:10:59,800 Speaker 9: at just other parts of the market, other sectors and 216 00:11:00,080 --> 00:11:02,920 Speaker 9: the regions which haven't performed as well, particularly in twenty 217 00:11:02,960 --> 00:11:06,839 Speaker 9: twenty three. So that has been some interest in small 218 00:11:06,840 --> 00:11:10,599 Speaker 9: cap space, but really quite hesitant, but hopefully looking to 219 00:11:10,640 --> 00:11:12,280 Speaker 9: see that once they know what the FED is going 220 00:11:12,360 --> 00:11:14,120 Speaker 9: to do, that they can start dipping their toes more 221 00:11:14,600 --> 00:11:17,520 Speaker 9: deeply into that area. And then other parts of the 222 00:11:17,520 --> 00:11:20,440 Speaker 9: market which you really are not tech focused, places like 223 00:11:20,480 --> 00:11:23,560 Speaker 9: Latin America, where evaluations are really interesting when the macro 224 00:11:24,160 --> 00:11:26,959 Speaker 9: stories are quite compelling as well. So it is a 225 00:11:27,000 --> 00:11:29,480 Speaker 9: bit of variation, but certainly what we're seeing throughout all 226 00:11:29,520 --> 00:11:31,680 Speaker 9: of this is even as interested outside of the US 227 00:11:31,760 --> 00:11:34,920 Speaker 9: tech space is growing, that still doesn't mean that then 228 00:11:35,040 --> 00:11:36,680 Speaker 9: taking it away from US tech either. 229 00:11:37,880 --> 00:11:41,040 Speaker 5: I've been thinking a lot sooner about what's supporting the 230 00:11:41,160 --> 00:11:44,080 Speaker 5: sort of large or megacap tech space in the United 231 00:11:44,160 --> 00:11:47,560 Speaker 5: States right. Earnings are really strong, and even if you 232 00:11:47,679 --> 00:11:50,280 Speaker 5: debate the timing of rate cuts, I think most people 233 00:11:50,320 --> 00:11:52,880 Speaker 5: still think some rate cuts are coming this year. But 234 00:11:52,960 --> 00:11:55,560 Speaker 5: the thing supporting all of it is like this investment 235 00:11:55,600 --> 00:11:59,800 Speaker 5: cycle driven by AI. How much carry does that give 236 00:11:59,840 --> 00:12:01,800 Speaker 5: us through the end of the year. If you call 237 00:12:01,840 --> 00:12:04,520 Speaker 5: it a tailwind, for how long does the tail wind flow? 238 00:12:06,640 --> 00:12:09,680 Speaker 9: It's interesting because actually I would say that that narrative 239 00:12:10,440 --> 00:12:12,040 Speaker 9: for a lot of people is not just the interest 240 00:12:12,080 --> 00:12:13,800 Speaker 9: for the rest of the year, and it really takes 241 00:12:13,880 --> 00:12:17,480 Speaker 9: up a very significant part of the strategic gap allocation, 242 00:12:17,559 --> 00:12:20,600 Speaker 9: not necessarily the tactical ass allocation. The valuations mean that 243 00:12:20,600 --> 00:12:22,520 Speaker 9: from a tactical side, this probably isn't going to be 244 00:12:22,559 --> 00:12:24,679 Speaker 9: the time that you want to be adding your exposure. 245 00:12:25,240 --> 00:12:28,240 Speaker 9: But most people are looking at this megacap space and saying, okay, 246 00:12:28,240 --> 00:12:29,760 Speaker 9: this is something which is going to deliver for the 247 00:12:29,760 --> 00:12:32,600 Speaker 9: next three, five to ten years from beyond because of 248 00:12:32,640 --> 00:12:36,040 Speaker 9: the AI. So actually, I think that tailwind probably maintains 249 00:12:36,080 --> 00:12:38,320 Speaker 9: and carries the space through to the end of the year. 250 00:12:38,320 --> 00:12:40,520 Speaker 9: And obviously, look, the macrospace is going to be important, 251 00:12:40,800 --> 00:12:43,719 Speaker 9: but as you said right now, the narrative is more 252 00:12:43,720 --> 00:12:45,840 Speaker 9: about when is the bed going to cup? Not necessarily 253 00:12:46,160 --> 00:12:49,000 Speaker 9: is the bed gonna cup? So certainly that does help 254 00:12:49,040 --> 00:12:49,840 Speaker 9: the situation too. 255 00:12:50,600 --> 00:12:52,320 Speaker 5: I want to go back to the example of Intel, 256 00:12:52,320 --> 00:12:54,080 Speaker 5: because we were talking about it earlier in the show. 257 00:12:54,160 --> 00:12:56,320 Speaker 5: You know, if you just as a comparison, put Intel 258 00:12:56,440 --> 00:12:58,880 Speaker 5: side by side with the MAG seven, I think it's 259 00:12:58,920 --> 00:13:02,000 Speaker 5: down sixteen seventeen percent so far this year, just got 260 00:13:02,000 --> 00:13:04,760 Speaker 5: twenty billion dollars of awards from the US government, and 261 00:13:04,800 --> 00:13:08,240 Speaker 5: it's another example of something supporting that sector, at least 262 00:13:08,400 --> 00:13:11,560 Speaker 5: the CHIPSAC support. Do you expect investors to kind of 263 00:13:11,559 --> 00:13:15,079 Speaker 5: pay that more credence in the back half of twenty 264 00:13:15,120 --> 00:13:15,600 Speaker 5: twenty four. 265 00:13:16,880 --> 00:13:19,040 Speaker 9: So we are, and I think that is actually a 266 00:13:19,120 --> 00:13:22,480 Speaker 9: really important story is we're trying to see, you know, 267 00:13:22,520 --> 00:13:25,199 Speaker 9: we know how the MAG seven is done, but it's 268 00:13:25,200 --> 00:13:27,040 Speaker 9: now about thinking about whate of the second round effects, 269 00:13:27,120 --> 00:13:29,480 Speaker 9: which are the other parts of the universe which are 270 00:13:29,480 --> 00:13:31,760 Speaker 9: really going to benefit And as you said, Intel is 271 00:13:31,800 --> 00:13:34,320 Speaker 9: one perfect example, but also if you just look outsidely 272 00:13:34,360 --> 00:13:38,679 Speaker 9: in the tech sector, looking to maybe towards agribusiness, healthcare, 273 00:13:39,400 --> 00:13:41,960 Speaker 9: data centers, these are all areas that will benefit as 274 00:13:41,960 --> 00:13:44,840 Speaker 9: a second round from technology. And that's actually where we're 275 00:13:44,880 --> 00:13:49,040 Speaker 9: getting particular client interest of where can they benefit maybe 276 00:13:49,040 --> 00:13:51,880 Speaker 9: where the valuations haven't really moved up as much, but 277 00:13:51,920 --> 00:13:55,320 Speaker 9: they do know that those segments of the market are 278 00:13:55,400 --> 00:13:58,880 Speaker 9: really standing to have some serious gains over the coming 279 00:13:58,960 --> 00:14:01,800 Speaker 9: years from all of the technology moves we've already seen. 280 00:14:02,880 --> 00:14:05,920 Speaker 3: See, man, you are a global strategist, and you are 281 00:14:05,960 --> 00:14:08,280 Speaker 3: a cross asset strategist. I would like to do credit, 282 00:14:08,280 --> 00:14:11,200 Speaker 3: but instead I go to crypto and more broadly, is 283 00:14:11,200 --> 00:14:13,199 Speaker 3: that something you're getting some clients more questions as to 284 00:14:13,280 --> 00:14:14,559 Speaker 3: whether that rallies run out a little? 285 00:14:16,600 --> 00:14:16,960 Speaker 10: Of course. 286 00:14:17,040 --> 00:14:18,600 Speaker 9: I mean when you see the moves that we've had 287 00:14:18,600 --> 00:14:20,480 Speaker 9: in the crypto in flu that you're going to get 288 00:14:20,520 --> 00:14:23,520 Speaker 9: a lot of questions. And you know the questions are, 289 00:14:23,520 --> 00:14:26,120 Speaker 9: of course, is can it continue? But also what we're 290 00:14:26,120 --> 00:14:28,080 Speaker 9: seeing is that investors are looking and saying, well, look, 291 00:14:28,120 --> 00:14:31,040 Speaker 9: this has been legitimized now and there is a real runway. 292 00:14:31,320 --> 00:14:33,920 Speaker 9: They accept that there's a ton of volatility associated with this, 293 00:14:34,000 --> 00:14:36,280 Speaker 9: they have to have a fairly strong stomach, but again 294 00:14:36,680 --> 00:14:39,560 Speaker 9: they're looking at this is a long term and a 295 00:14:39,600 --> 00:14:41,680 Speaker 9: long term perspective, not something that you can maybe trade 296 00:14:41,760 --> 00:14:44,920 Speaker 9: in and out of. So certainly investors are trying to 297 00:14:44,920 --> 00:14:47,720 Speaker 9: find like, where are we going to get the significant 298 00:14:47,720 --> 00:14:50,080 Speaker 9: returns that maybe we've enjoyed in previous years but are 299 00:14:50,080 --> 00:14:52,320 Speaker 9: looking a little bit more like a little less likely 300 00:14:52,360 --> 00:14:54,560 Speaker 9: over the coming years. And that is certainly where crypto 301 00:14:54,640 --> 00:14:55,360 Speaker 9: is coming in more. 302 00:14:55,200 --> 00:14:55,720 Speaker 7: And more. 303 00:14:57,400 --> 00:15:00,440 Speaker 5: Principal asset management chief global strategies seem as are great. 304 00:15:00,480 --> 00:15:05,880 Speaker 5: To catch up with you here on invo technology. Steri 305 00:15:06,000 --> 00:15:10,320 Speaker 5: Labs indicated to open at fifty two dollars fifty six 306 00:15:10,400 --> 00:15:15,160 Speaker 5: cents a share. That's pretty significantly above its IPO price 307 00:15:15,200 --> 00:15:18,920 Speaker 5: of thirty six dollars a share. Shares indicated to open 308 00:15:18,920 --> 00:15:22,440 Speaker 5: at fifty three dollars as of around fifteen minutes past 309 00:15:22,480 --> 00:15:26,640 Speaker 5: eleven Eastern time fifteen minutes past eight am Pacific time. 310 00:15:26,800 --> 00:15:29,480 Speaker 5: It's a forty six percent premium on where they priced. 311 00:15:29,520 --> 00:15:32,240 Speaker 5: Let's get straight to Bloomberg Deal's reporter, Katie Ruth. 312 00:15:32,760 --> 00:15:36,080 Speaker 11: Your reaction, Well, this is the excitement that IPO market 313 00:15:36,160 --> 00:15:39,640 Speaker 11: is needed. There've only been three venture backed IPOs since 314 00:15:39,640 --> 00:15:45,160 Speaker 11: twenty twenty one. Is Sarah Labs popping significantly, which you 315 00:15:45,240 --> 00:15:49,320 Speaker 11: know this is after already pricing above their revised range. 316 00:15:49,320 --> 00:15:52,040 Speaker 11: They kept revising it higher because there was so much 317 00:15:52,120 --> 00:15:56,280 Speaker 11: demand from institutional investors and so the fact that Sarah 318 00:15:56,400 --> 00:15:59,600 Speaker 11: Lab's roadshow went really well shows it proves that there 319 00:15:59,680 --> 00:16:02,280 Speaker 11: is an US through demand for the right companies for 320 00:16:02,320 --> 00:16:03,480 Speaker 11: tech IPOs right now. 321 00:16:03,960 --> 00:16:06,960 Speaker 6: And the reason that it's so well liked is well. 322 00:16:06,960 --> 00:16:11,960 Speaker 3: It developed semiconductor based connectivity solutions. Basically, this is about AI, Katie, 323 00:16:11,960 --> 00:16:13,760 Speaker 3: And do you think therefore we are needing to have 324 00:16:13,800 --> 00:16:16,840 Speaker 3: this element of AI to get investors really excited at 325 00:16:16,840 --> 00:16:17,200 Speaker 3: the moment. 326 00:16:18,080 --> 00:16:20,320 Speaker 11: Yes, that's what it seems like. This is definitely an 327 00:16:20,400 --> 00:16:24,480 Speaker 11: AI related company. They're in chips and you know that's 328 00:16:24,520 --> 00:16:27,560 Speaker 11: been something that's drawn more excite and back to tech again. 329 00:16:27,600 --> 00:16:30,640 Speaker 11: Obviously twenty twenty two was rough, and then twenty twenty 330 00:16:30,640 --> 00:16:33,000 Speaker 11: three people started to get more excited about AI. And 331 00:16:33,320 --> 00:16:36,520 Speaker 11: now in twenty twenty four we're seeing this make it 332 00:16:36,520 --> 00:16:39,440 Speaker 11: to Wall Street in IPOs and there's a lot of 333 00:16:39,480 --> 00:16:40,200 Speaker 11: excitement there. 334 00:16:40,400 --> 00:16:43,280 Speaker 5: Let's get to the other technology IPO due in the 335 00:16:43,320 --> 00:16:46,800 Speaker 5: next twenty four hours. Reddit sources are telling us that 336 00:16:46,880 --> 00:16:48,480 Speaker 5: we're looking at the top end of the range. The 337 00:16:48,600 --> 00:16:50,920 Speaker 5: range was thirty one to thirty four dollars a share, 338 00:16:51,400 --> 00:16:53,920 Speaker 5: which on a diluted basis values. 339 00:16:53,560 --> 00:16:55,800 Speaker 4: Reddit six point four billion. What do we know? 340 00:16:56,400 --> 00:16:59,120 Speaker 11: So, you know, technically hasn't priced yet, but we're already 341 00:16:59,160 --> 00:17:02,640 Speaker 11: hearing positive indications about where it will price. You know, 342 00:17:02,680 --> 00:17:06,360 Speaker 11: they're writing off of the excitement from Astra, which helps, 343 00:17:06,480 --> 00:17:11,320 Speaker 11: you know, excited investors for tech generally, and you know, 344 00:17:11,359 --> 00:17:13,320 Speaker 11: they saw how the market was trading today and they're 345 00:17:13,320 --> 00:17:16,119 Speaker 11: thinking already that this could go well. Technically, it doesn't 346 00:17:16,119 --> 00:17:20,040 Speaker 11: get priced until after the bell, but you know already 347 00:17:20,080 --> 00:17:21,439 Speaker 11: it's looking positive for Reddit. 348 00:17:21,840 --> 00:17:22,080 Speaker 4: Yeah. 349 00:17:22,119 --> 00:17:24,679 Speaker 3: I mean it's going to be music to some of 350 00:17:24,720 --> 00:17:27,199 Speaker 3: the banks. Is when we're at record highs and in 351 00:17:27,200 --> 00:17:29,480 Speaker 3: the days before the IPO being led by Monges Standing, Goldman, 352 00:17:29,520 --> 00:17:32,960 Speaker 3: sax Shaping, Morgan, Bank of America, Katie. This is a 353 00:17:33,119 --> 00:17:35,760 Speaker 3: name that people have anticipated coming to the market for 354 00:17:35,840 --> 00:17:39,280 Speaker 3: so long. How is some of the allocation going to 355 00:17:39,560 --> 00:17:42,120 Speaker 3: the regets themselves? Because they want to ensure that their 356 00:17:42,119 --> 00:17:44,679 Speaker 3: community is supportive of them going public. 357 00:17:45,520 --> 00:17:48,080 Speaker 11: That's right. They're allocating shares to some of their top 358 00:17:48,119 --> 00:17:50,679 Speaker 11: Breddit users. And you know the way this works is 359 00:17:51,040 --> 00:17:54,080 Speaker 11: normally it's a wall street that gets access at the 360 00:17:54,119 --> 00:17:58,560 Speaker 11: IPO price. Normally, an average retail investor can only buy 361 00:17:59,000 --> 00:18:01,280 Speaker 11: after it begins trade on the first day, and they 362 00:18:01,320 --> 00:18:04,280 Speaker 11: don't have access to that much of that pop that 363 00:18:04,359 --> 00:18:06,720 Speaker 11: we see, and so this is a way to kind 364 00:18:06,720 --> 00:18:09,480 Speaker 11: of gift that to some of their top users. We 365 00:18:09,600 --> 00:18:12,960 Speaker 11: have seen this with a couple of other consumer facing 366 00:18:13,000 --> 00:18:16,080 Speaker 11: IPOs now but this is part of that trend. 367 00:18:16,640 --> 00:18:19,919 Speaker 5: I think what's interesting about Reddit is relatively complicated history. 368 00:18:20,040 --> 00:18:22,879 Speaker 5: Founded two thousand and five, had a y combinator as well, 369 00:18:23,400 --> 00:18:26,840 Speaker 5: then bought by Conde Nas very quickly spun out twenty eleven, 370 00:18:27,320 --> 00:18:29,159 Speaker 5: and as carry pointed out, we've been waiting. 371 00:18:28,920 --> 00:18:29,560 Speaker 4: A long time. 372 00:18:30,240 --> 00:18:32,520 Speaker 5: There is also how this IPA is going to work. 373 00:18:32,600 --> 00:18:35,479 Speaker 5: So some of the sheds to insiders and staff, some 374 00:18:35,520 --> 00:18:38,800 Speaker 5: of them to redditors themselves. How does that impact the mechanics? 375 00:18:39,280 --> 00:18:39,560 Speaker 4: Sure? 376 00:18:39,680 --> 00:18:41,800 Speaker 11: So, you know, what we saw on this is that 377 00:18:41,920 --> 00:18:44,880 Speaker 11: we had smaller than usual stakes for some of the 378 00:18:45,080 --> 00:18:48,440 Speaker 11: institutional shareholders like venture capitalists, and that's part of that, 379 00:18:48,800 --> 00:18:52,119 Speaker 11: you know, because they were spun out of Advanced the 380 00:18:52,160 --> 00:18:57,000 Speaker 11: Conde Nas parent, the founders had really small stakes, you know, 381 00:18:57,240 --> 00:19:00,440 Speaker 11: less than five percent for them, and that's not something 382 00:19:00,440 --> 00:19:03,439 Speaker 11: we typically see at the time of an IPL. But 383 00:19:03,960 --> 00:19:06,560 Speaker 11: you know, this is a company that's going public after 384 00:19:06,720 --> 00:19:10,000 Speaker 11: being around for nineteen years. That's really really long for 385 00:19:10,080 --> 00:19:12,760 Speaker 11: a startup to IPL. But again, this is technically the 386 00:19:12,880 --> 00:19:15,639 Speaker 11: second exit for Reddit because they were sold in the 387 00:19:15,680 --> 00:19:18,240 Speaker 11: early days and then now spun out. 388 00:19:19,160 --> 00:19:23,360 Speaker 3: Question is profitability from these companies as of when it's 389 00:19:23,400 --> 00:19:26,359 Speaker 3: hit Katie Woof, We thank you so much for breaking 390 00:19:26,400 --> 00:19:28,119 Speaker 3: it down. It feels like a bit of an IPO 391 00:19:28,240 --> 00:19:38,440 Speaker 3: Mini Frenzy. Welcome back to Bloomberg Technology and carolinehid in New. 392 00:19:38,440 --> 00:19:40,960 Speaker 5: York and I'm Med Lodlo in San Francisco. The Buying 393 00:19:40,960 --> 00:19:44,760 Speaker 5: Administration is toughening auto emission mandates in order to boost 394 00:19:44,760 --> 00:19:47,920 Speaker 5: EV sales. In the near term, there's actually some easing 395 00:19:48,119 --> 00:19:51,400 Speaker 5: in tail pipe requirements, but in the long term it's 396 00:19:51,480 --> 00:19:53,840 Speaker 5: going to be an EPA cat for car and truck 397 00:19:54,119 --> 00:19:58,760 Speaker 5: tailpipe emissions through the model years twenty thirty two. The 398 00:19:58,880 --> 00:20:02,200 Speaker 5: idea is that it will push the automakers, particularly the 399 00:20:02,280 --> 00:20:05,920 Speaker 5: legacy auto makers, to move more quickly in boosting their 400 00:20:06,000 --> 00:20:08,679 Speaker 5: sales of battery electric vehicles. You look at some of 401 00:20:08,680 --> 00:20:10,800 Speaker 5: the names on the board. We have both pure play 402 00:20:10,840 --> 00:20:14,520 Speaker 5: and legacy OEMs on there that are making both combustion 403 00:20:14,600 --> 00:20:18,399 Speaker 5: engine and EV powertrain. Right now, you'd expect that GM 404 00:20:18,440 --> 00:20:21,480 Speaker 5: and Ford, as an example, will now get going more quickly. Caro, 405 00:20:21,760 --> 00:20:25,320 Speaker 5: as I say, biden tailpipe rule coming into a force 406 00:20:25,480 --> 00:20:28,320 Speaker 5: and pushing those EV makers to accelerate their EV timelines. 407 00:20:28,359 --> 00:20:29,560 Speaker 6: This is an interesting that Semashah. 408 00:20:29,600 --> 00:20:32,040 Speaker 3: We just had that conversation about how much regulation and 409 00:20:32,280 --> 00:20:35,480 Speaker 3: US incentives are going to be changing some of the investors' 410 00:20:35,520 --> 00:20:38,879 Speaker 3: mindsets so across chips and cars. Meanwhile, let's just go 411 00:20:38,960 --> 00:20:40,119 Speaker 3: to Microsoft for a moment. 412 00:20:40,440 --> 00:20:40,800 Speaker 6: Get this. 413 00:20:40,920 --> 00:20:43,479 Speaker 3: It's tapped DeepMind co founder and the stuff are Cinnemon 414 00:20:43,800 --> 00:20:47,320 Speaker 3: to head up its consumer artificial intelligence business, basically hiring 415 00:20:47,359 --> 00:20:50,440 Speaker 3: most of the stuff from his Inflection AI startup. As 416 00:20:50,440 --> 00:20:52,679 Speaker 3: a software giant, it's trying to be fending off Google 417 00:20:52,720 --> 00:20:56,280 Speaker 3: in the highly competitive market for AI products, really targeting consumers. 418 00:20:56,600 --> 00:20:58,879 Speaker 3: Joining us now from more bloom Moost Jackie Deavlos, And 419 00:20:58,920 --> 00:21:02,000 Speaker 3: this is so interesting because once again Microsoft getting in 420 00:21:02,040 --> 00:21:05,239 Speaker 3: net with a really fan favorite startup. This one an 421 00:21:05,240 --> 00:21:08,080 Speaker 3: empathetic one when it comes to Chapel, but they're licensing 422 00:21:08,119 --> 00:21:12,000 Speaker 3: the tech of Inflection and taking both well two of 423 00:21:12,000 --> 00:21:14,399 Speaker 3: the three co founders right they already have Reidofman on 424 00:21:14,400 --> 00:21:14,760 Speaker 3: the board. 425 00:21:16,000 --> 00:21:19,200 Speaker 2: It's a really interesting agreement between one of the biggest 426 00:21:19,240 --> 00:21:22,760 Speaker 2: players in AI right now, Microsoft and what was seen 427 00:21:22,800 --> 00:21:27,639 Speaker 2: to be is a really promising AIS startup. Now, both 428 00:21:27,680 --> 00:21:31,240 Speaker 2: companies were pretty careful not to call this an acquisition, 429 00:21:31,800 --> 00:21:37,560 Speaker 2: but nonetheless the agreement effectively has Microsoft absorbing this team 430 00:21:38,080 --> 00:21:42,199 Speaker 2: for them, it means they get to acquire this massive talent. 431 00:21:42,359 --> 00:21:46,679 Speaker 2: Mustafa Suliman, as you mentioned Caroline, comes from Google and 432 00:21:46,720 --> 00:21:50,480 Speaker 2: before that he co founded Deepmine along with Demisisabus. This 433 00:21:50,640 --> 00:21:54,480 Speaker 2: is kind of really pitting these two prominent figures and 434 00:21:54,600 --> 00:22:00,280 Speaker 2: artificial intelligence in these competing roles. Now, for Microsoft, this 435 00:22:00,359 --> 00:22:02,560 Speaker 2: is not just about the talent, but it's also about 436 00:22:02,600 --> 00:22:06,640 Speaker 2: expanding into consumer where you know, they haven't traditionally been 437 00:22:06,640 --> 00:22:09,159 Speaker 2: able to do as well as their enterprise business. So 438 00:22:09,240 --> 00:22:12,359 Speaker 2: this is a fairly large advantage for them for inflection. 439 00:22:12,520 --> 00:22:14,719 Speaker 2: On the other hand, there's still a few questions there 440 00:22:14,760 --> 00:22:17,040 Speaker 2: as to what this means for the company. While yes, 441 00:22:17,080 --> 00:22:21,000 Speaker 2: they get to run their technology on Microsoft's Azure infrastructure, 442 00:22:21,320 --> 00:22:24,360 Speaker 2: what does this mean for investors? The company said yesterday 443 00:22:24,400 --> 00:22:28,680 Speaker 2: that investors will be made whole. Even read Hoffman himself 444 00:22:28,720 --> 00:22:31,000 Speaker 2: posted on LinkedIn saying that it would be a good 445 00:22:31,040 --> 00:22:34,320 Speaker 2: outcome for investors. How and when this will happen is 446 00:22:34,359 --> 00:22:35,680 Speaker 2: still yet to be seen. 447 00:22:36,840 --> 00:22:39,080 Speaker 4: I think there's more than a few questions with this. 448 00:22:39,359 --> 00:22:41,800 Speaker 5: So when we put the story out on social media, 449 00:22:41,880 --> 00:22:45,240 Speaker 5: people start calling in Aqui higher and then this is 450 00:22:45,280 --> 00:22:47,879 Speaker 5: the most bizarre thing about the whole thing. Open Ai 451 00:22:48,280 --> 00:22:52,840 Speaker 5: felt compelled to issue a statement congratulating the stuff on 452 00:22:52,920 --> 00:22:55,200 Speaker 5: his new role, and I think that we spoke to 453 00:22:55,200 --> 00:22:59,080 Speaker 5: in Thedella as well, right Jackie, and he reiterated Microsoft's 454 00:22:59,080 --> 00:23:02,800 Speaker 5: commitment to open up. It's a very complicated situation. 455 00:23:03,440 --> 00:23:05,359 Speaker 2: It really is, because at the end of the day, 456 00:23:05,520 --> 00:23:10,000 Speaker 2: open Ai is a competitor to Inflection in many ways. 457 00:23:10,000 --> 00:23:12,680 Speaker 2: Inflection runs its own chat pot pie, which it said 458 00:23:12,720 --> 00:23:17,240 Speaker 2: it will continue to keep running for how long That's unclear, 459 00:23:17,480 --> 00:23:19,919 Speaker 2: but for what we do know is that Inflection plans 460 00:23:19,960 --> 00:23:24,240 Speaker 2: to focus more on enterprise business. Of course, that's right 461 00:23:24,320 --> 00:23:27,320 Speaker 2: up Microsoft's alley. But at the end of the day, 462 00:23:27,840 --> 00:23:30,080 Speaker 2: you have to kind of wonder how this is also 463 00:23:30,160 --> 00:23:33,719 Speaker 2: going to play out within Microsoft, who's already under some 464 00:23:33,800 --> 00:23:37,080 Speaker 2: pretty intense scrutiny by the FTC here in the US 465 00:23:37,200 --> 00:23:42,320 Speaker 2: about its agreement with open Ai. This might potentially draw 466 00:23:42,480 --> 00:23:45,000 Speaker 2: some more scrutiny, but again, I think we're still waiting 467 00:23:45,040 --> 00:23:47,399 Speaker 2: on some of the details around what this means for 468 00:23:47,480 --> 00:23:51,359 Speaker 2: the rest of the Inflection team. The company didn't say 469 00:23:51,520 --> 00:23:55,520 Speaker 2: exactly how many of inflection seventy employees will be joining over, 470 00:23:55,840 --> 00:23:58,840 Speaker 2: although we do know that another co founder will lead 471 00:23:59,400 --> 00:24:03,000 Speaker 2: It will become chief scientific Officer under this new Microsoft 472 00:24:03,119 --> 00:24:03,800 Speaker 2: AI group. 473 00:24:05,240 --> 00:24:09,080 Speaker 5: Public companies private companies making moves. Another example of a 474 00:24:09,119 --> 00:24:13,000 Speaker 5: public and private company getting closer aligned Blue Most Jack Davolos, 475 00:24:13,080 --> 00:24:16,320 Speaker 5: Trivic Reporting, Thank you AI, Let's stick with it and 476 00:24:16,400 --> 00:24:19,760 Speaker 5: let's stick with private markets is also on ivp's mind. 477 00:24:19,760 --> 00:24:20,560 Speaker 4: The forty four year. 478 00:24:20,480 --> 00:24:23,840 Speaker 5: Old Silicon Valley venture firm wanting to take advantage of 479 00:24:23,880 --> 00:24:27,919 Speaker 5: the great opportunities it sees with this technological shift, and 480 00:24:27,960 --> 00:24:31,440 Speaker 5: it's launching it's eighteenth fund with a one point six 481 00:24:31,480 --> 00:24:35,840 Speaker 5: billion dollar raise. Springing IVP partner Caac Wilhelm for more 482 00:24:36,119 --> 00:24:39,040 Speaker 5: in today's VC Spotlight. Welcome to the studio in San Francisco. 483 00:24:39,640 --> 00:24:41,560 Speaker 5: Let's start with the fund one point six billion. 484 00:24:42,000 --> 00:24:42,840 Speaker 4: Explain it to me. 485 00:24:42,920 --> 00:24:44,919 Speaker 5: What is it going to be used for, what is 486 00:24:44,920 --> 00:24:47,399 Speaker 5: the thematic focus, and how did it come together? 487 00:24:47,680 --> 00:24:48,160 Speaker 6: Absolutely? 488 00:24:48,240 --> 00:24:50,960 Speaker 10: Yeah, So you mentioned one point six billion and eighteenth fund. 489 00:24:51,040 --> 00:24:53,680 Speaker 10: That means, you know, Fund one was back in nineteen 490 00:24:53,800 --> 00:24:56,679 Speaker 10: eighty Fund one was a grand total of twenty two 491 00:24:56,720 --> 00:24:57,359 Speaker 10: million dollars. 492 00:24:57,400 --> 00:24:59,040 Speaker 6: So as you can see, we've come a long way. 493 00:25:00,040 --> 00:25:00,960 Speaker 6: We've invested through. 494 00:25:00,760 --> 00:25:02,800 Speaker 10: Cycles, and I think the key cycle right now is AI. 495 00:25:03,359 --> 00:25:06,840 Speaker 5: But it's a crowded space, a crowded cycle because you 496 00:25:06,880 --> 00:25:10,040 Speaker 5: not only have the like, well one point thing's been 497 00:25:10,040 --> 00:25:12,320 Speaker 5: in early stage or so it's a good question. 498 00:25:12,359 --> 00:25:14,639 Speaker 10: You know, venture means many things, so many people ventures 499 00:25:14,680 --> 00:25:16,080 Speaker 10: everything from you know pre. 500 00:25:16,000 --> 00:25:17,840 Speaker 6: Seed and seed all the way to pre IPO. 501 00:25:18,280 --> 00:25:20,879 Speaker 10: We are squarely in the sort of super growth phase. 502 00:25:20,960 --> 00:25:22,760 Speaker 10: So you're raising a Series B in a Series C, 503 00:25:23,000 --> 00:25:25,600 Speaker 10: you have early data. We believe in you, your team 504 00:25:25,640 --> 00:25:27,600 Speaker 10: and your market, and that's where we're trying to hone 505 00:25:27,600 --> 00:25:30,760 Speaker 10: in interesting in venture. You know, lots of people have 506 00:25:30,840 --> 00:25:33,639 Speaker 10: moved to a platform model, so everything to everyone. We 507 00:25:33,720 --> 00:25:36,520 Speaker 10: have consistently over eighteen funds, we've been really focused on 508 00:25:36,560 --> 00:25:38,200 Speaker 10: doing this one stage in this one stage way. 509 00:25:38,240 --> 00:25:39,800 Speaker 5: How I didn't mean to lose my train of thought there, 510 00:25:39,840 --> 00:25:42,520 Speaker 5: but I was just reflecting, having been at GtC, that 511 00:25:42,600 --> 00:25:44,639 Speaker 5: this is a space where it's not just venture firms 512 00:25:44,720 --> 00:25:48,280 Speaker 5: jumping in. You have strategic investors like in video as well. 513 00:25:48,600 --> 00:25:50,560 Speaker 5: There's a lot of people putting capital to play. 514 00:25:50,720 --> 00:25:52,080 Speaker 6: Yeah, it's super competitive. 515 00:25:52,200 --> 00:25:55,600 Speaker 3: And for that instance, when you're trying to therefore woo 516 00:25:55,640 --> 00:25:59,240 Speaker 3: in this new era of founders and ensure that you're 517 00:25:59,280 --> 00:26:01,520 Speaker 3: managing to write the write checks rather than well, the 518 00:26:01,560 --> 00:26:04,439 Speaker 3: corporate vcs at the same time, CAAC, I'm assuming some 519 00:26:04,520 --> 00:26:07,080 Speaker 3: of the past precedents really win out. I think of 520 00:26:07,119 --> 00:26:09,000 Speaker 3: some of the exits that you've had Data Dog here 521 00:26:09,000 --> 00:26:11,440 Speaker 3: in New York. I think of Klana coming up. I mean, 522 00:26:11,480 --> 00:26:14,320 Speaker 3: how much does that track record help show that you 523 00:26:14,359 --> 00:26:17,400 Speaker 3: should be as part of that winning team for them? 524 00:26:17,720 --> 00:26:19,840 Speaker 10: Yeah, exactly. I mean I think longevity really helps. I 525 00:26:19,840 --> 00:26:22,000 Speaker 10: think brand matters and venture capital. So I think the 526 00:26:22,040 --> 00:26:24,960 Speaker 10: brand of IVP means something we wanted to mean, substance 527 00:26:25,000 --> 00:26:27,320 Speaker 10: and soul. We wanted to mean that warrior partner. We're 528 00:26:27,359 --> 00:26:28,560 Speaker 10: going to lead the round and we're going to be 529 00:26:28,560 --> 00:26:31,320 Speaker 10: with you for a long time. Take for example, Perplexity, 530 00:26:31,400 --> 00:26:33,480 Speaker 10: which is sort of akin to you know, Consumer AI 531 00:26:33,600 --> 00:26:36,040 Speaker 10: at the moment, and then Zekeeist and that's one where 532 00:26:36,080 --> 00:26:38,840 Speaker 10: we you know, hard fought battle for the Series B 533 00:26:39,119 --> 00:26:40,760 Speaker 10: and we were competitive and we won. 534 00:26:41,960 --> 00:26:45,280 Speaker 3: What do you make there for of inflection going with 535 00:26:45,320 --> 00:26:48,959 Speaker 3: Microsoft and a future of Perplexity. I mean, it feels 536 00:26:49,040 --> 00:26:52,480 Speaker 3: as though the big tech companies are not only writing 537 00:26:52,520 --> 00:26:55,400 Speaker 3: with their vcs, but they're also making these very extraordinary 538 00:26:55,400 --> 00:26:57,080 Speaker 3: partnerships that end up feeling. 539 00:26:56,800 --> 00:26:57,240 Speaker 6: Like M and A. 540 00:26:59,119 --> 00:27:01,720 Speaker 10: Yeah, I mean on this one you guys were discussing earlier. 541 00:27:01,760 --> 00:27:04,040 Speaker 10: I would like this inflection deal does sort of like 542 00:27:04,080 --> 00:27:06,320 Speaker 10: smells like an acquisition, looks like an acquisition. I think 543 00:27:06,359 --> 00:27:08,840 Speaker 10: everyone's focused on the CEO and his his move and 544 00:27:08,880 --> 00:27:11,520 Speaker 10: his role and Microsoft. But I think this does sound 545 00:27:11,560 --> 00:27:13,480 Speaker 10: and smell more like an acquisition than it does anything 546 00:27:13,480 --> 00:27:13,919 Speaker 10: else to me. 547 00:27:14,680 --> 00:27:16,080 Speaker 6: I mean, I think what it does is, you. 548 00:27:16,000 --> 00:27:19,080 Speaker 10: Know, from the perspective of a perplexity for example, very 549 00:27:19,080 --> 00:27:23,280 Speaker 10: focused on Google and their positioning visa be Google. I 550 00:27:23,280 --> 00:27:27,280 Speaker 10: think Microsoft historically conventionally has been very much an enterprise business. 551 00:27:27,440 --> 00:27:30,560 Speaker 10: So I think what this does is this puts Microsoft 552 00:27:30,600 --> 00:27:32,800 Speaker 10: consumer on the map in a way that maybe people 553 00:27:32,840 --> 00:27:34,200 Speaker 10: hadn't appreciated more recently. 554 00:27:34,960 --> 00:27:38,800 Speaker 3: Thinking of consumer, I'm thinking of you know, Klana for example, 555 00:27:39,000 --> 00:27:42,479 Speaker 3: as one of those companies that is very consumer facing, 556 00:27:42,600 --> 00:27:45,000 Speaker 3: is looking at tapping the markets itself. We today are 557 00:27:45,080 --> 00:27:48,520 Speaker 3: anticipating a non consumer business a Steri Labs coming to 558 00:27:48,560 --> 00:27:50,760 Speaker 3: the market. It looks as though it's going to price well, 559 00:27:50,800 --> 00:27:53,000 Speaker 3: it's going to start trading well above where at priced 560 00:27:53,000 --> 00:27:55,040 Speaker 3: we got Reddit tomorrow. How do you feel about the 561 00:27:55,080 --> 00:27:57,600 Speaker 3: exits at the moment, not only just big joint ventures, 562 00:27:57,640 --> 00:27:58,920 Speaker 3: but the public markets. 563 00:28:00,480 --> 00:28:02,800 Speaker 10: I'd say we're cautiously optimistic. I mean, if you think 564 00:28:03,000 --> 00:28:05,760 Speaker 10: look back on history, look at twenty twenty one for IVP, 565 00:28:05,880 --> 00:28:09,040 Speaker 10: we had fifteen IPOs in that single year. That's of 566 00:28:09,080 --> 00:28:12,119 Speaker 10: one hundred and thirty total over we discussed since nineteen eighty. 567 00:28:12,920 --> 00:28:15,359 Speaker 10: So those heyday you know, that heyday we all lived at. 568 00:28:15,600 --> 00:28:17,680 Speaker 10: You know, maybe we want to go back, but those 569 00:28:17,760 --> 00:28:20,400 Speaker 10: days are probably over for the next you know, ensuing years. 570 00:28:20,440 --> 00:28:23,000 Speaker 10: I think again, we're cautiously optimistic for this year. We 571 00:28:23,000 --> 00:28:24,720 Speaker 10: don't think it's going to be more like twenty twenty one. 572 00:28:24,760 --> 00:28:28,120 Speaker 10: But you know, Reddit and these others suggest that there 573 00:28:28,160 --> 00:28:30,920 Speaker 10: are companies in the wings that want to get out. 574 00:28:31,359 --> 00:28:34,080 Speaker 5: I'm interested in where the one point six billion is 575 00:28:34,119 --> 00:28:38,480 Speaker 5: coming from in the context of exits, but also the competition. 576 00:28:39,080 --> 00:28:41,680 Speaker 5: We are obsessed with the FED because we're Bloomberg and 577 00:28:41,680 --> 00:28:44,320 Speaker 5: that's all we talk about. But who would be an 578 00:28:44,440 --> 00:28:46,720 Speaker 5: LP right now in a venture firm like like yours. 579 00:28:46,760 --> 00:28:48,840 Speaker 5: Are they kicking down your door and saying I want 580 00:28:48,880 --> 00:28:51,680 Speaker 5: on that fund or was it difficult to bring the 581 00:28:51,720 --> 00:28:52,280 Speaker 5: fund together? 582 00:28:52,560 --> 00:28:53,400 Speaker 6: Yeah, a little bit of both. 583 00:28:53,440 --> 00:28:55,000 Speaker 10: I mean, we started in nineteen eighty and so we 584 00:28:55,040 --> 00:28:57,000 Speaker 10: have an investor base money of whom we've been with 585 00:28:57,080 --> 00:28:59,360 Speaker 10: us since nineteen eighty. You know that is a makeup 586 00:28:59,400 --> 00:29:03,480 Speaker 10: of a lot of US in Europe sort of mainstream LPs. 587 00:29:03,600 --> 00:29:05,720 Speaker 10: That being said, if you had taken a pulse check 588 00:29:05,760 --> 00:29:08,840 Speaker 10: with me six months ago, five months ago, four months ago, 589 00:29:08,840 --> 00:29:11,520 Speaker 10: I would have had different answers for you. It wasn't straightforward. 590 00:29:11,560 --> 00:29:13,160 Speaker 10: I think you guys know as well as we do. 591 00:29:13,280 --> 00:29:17,960 Speaker 10: Like it's been a tumultuous several years and the liquidity constraints, 592 00:29:18,000 --> 00:29:22,680 Speaker 10: the optimism of our investor base has really varied over time. 593 00:29:23,200 --> 00:29:26,160 Speaker 3: One of seven GPS over their IVP of course oldest 594 00:29:26,200 --> 00:29:27,880 Speaker 3: one on the black block when it comes to Slickon 595 00:29:27,920 --> 00:29:30,400 Speaker 3: Valley and cac. But you need to get into your 596 00:29:30,440 --> 00:29:33,640 Speaker 3: running prowess and how that's all going. IVP partner CAQ Wilhelm, 597 00:29:33,680 --> 00:29:35,080 Speaker 3: We thank you so much for coming on and talk 598 00:29:35,080 --> 00:29:36,880 Speaker 3: about the new fun. Meanwhile, coming up, we've got to 599 00:29:36,880 --> 00:29:39,760 Speaker 3: get into the IPO. We're just mentioning Asta Labs. It's 600 00:29:39,800 --> 00:29:43,680 Speaker 3: about to go start moving on the Nasdak it priced 601 00:29:43,920 --> 00:29:45,720 Speaker 3: now we're going to see where it starts to trade. 602 00:29:46,360 --> 00:29:48,080 Speaker 6: CEO Ja Tendra Mohun's joining us. 603 00:29:48,280 --> 00:29:50,120 Speaker 5: Ed what if you got I want to go back 604 00:29:50,160 --> 00:29:52,480 Speaker 5: to those kind of legacy automaker and EV names we 605 00:29:52,560 --> 00:29:52,960 Speaker 5: were watching. 606 00:29:53,040 --> 00:29:54,800 Speaker 4: The Biden administration is bringing in. 607 00:29:54,680 --> 00:29:59,160 Speaker 5: Tougher tailpipe rules effective or caps through model year twenty 608 00:29:59,200 --> 00:30:02,240 Speaker 5: thirty two. The we ease the short term requirements, but 609 00:30:02,320 --> 00:30:05,880 Speaker 5: the idea is make long term tail pipe emissions regulations tougher. 610 00:30:05,960 --> 00:30:08,720 Speaker 5: Now to get some of those names like GM and 611 00:30:08,800 --> 00:30:12,560 Speaker 5: Ford to move more quickly on transitioning to battery electric. 612 00:30:12,760 --> 00:30:15,320 Speaker 5: There wasn't really a knee joke reaction in the moves 613 00:30:15,320 --> 00:30:17,400 Speaker 5: of these names. We do see some of them higher 614 00:30:17,680 --> 00:30:19,880 Speaker 5: Rivian soft to one point three percent, but Rivian has 615 00:30:19,880 --> 00:30:22,640 Speaker 5: got all kinds of problems right now, which we will 616 00:30:22,640 --> 00:30:23,960 Speaker 5: continue to report on. 617 00:30:24,160 --> 00:30:33,920 Speaker 4: This is Bloomberg technology. 618 00:30:39,560 --> 00:30:41,560 Speaker 3: We've got to talk IPOs, We've got to talk the 619 00:30:41,600 --> 00:30:45,040 Speaker 3: listing day over stra Labs, which provides purpose built connectivity 620 00:30:45,040 --> 00:30:48,440 Speaker 3: solutions basically for artificial intelligence and for cloud infrastructure. 621 00:30:48,760 --> 00:30:51,040 Speaker 6: Company will soon be busy trading on the. 622 00:30:51,080 --> 00:30:55,160 Speaker 12: Nasdack and of the ticket symbol alab A Lab here 623 00:30:55,160 --> 00:30:58,880 Speaker 12: for more as the Estera Lab CEO Tendra Mahanjatendra, you 624 00:30:59,000 --> 00:31:01,440 Speaker 12: own what about six percent of a company that's going 625 00:31:01,480 --> 00:31:03,040 Speaker 12: to rock it to more than about a ten million 626 00:31:03,080 --> 00:31:03,800 Speaker 12: dollar valuation. 627 00:31:03,840 --> 00:31:04,440 Speaker 6: How do you feel? 628 00:31:05,680 --> 00:31:09,480 Speaker 13: Feels great, feels awesome. It's not about me, though, it's 629 00:31:09,640 --> 00:31:11,600 Speaker 13: if you think about Esthera, It's really all about the 630 00:31:11,600 --> 00:31:14,320 Speaker 13: people who have helped us get to this valuation, and 631 00:31:14,400 --> 00:31:16,360 Speaker 13: it's the people who are going to push us to 632 00:31:16,760 --> 00:31:18,960 Speaker 13: new heights. So very excited. 633 00:31:18,640 --> 00:31:22,280 Speaker 5: About today to Tendrey, Good morning from San Francisco, and 634 00:31:22,360 --> 00:31:24,480 Speaker 5: sorry to interrupts you. Just a few minutes before you 635 00:31:24,600 --> 00:31:28,440 Speaker 5: joined us on the program, Bloomberg reported that your stock 636 00:31:28,520 --> 00:31:31,760 Speaker 5: is indicated to open at fifty two dollars fifty six 637 00:31:31,760 --> 00:31:36,440 Speaker 5: cents a share. That's a forty six percent premium on where. 638 00:31:36,200 --> 00:31:39,080 Speaker 4: The IPO price. What's your reaction to that? 639 00:31:40,360 --> 00:31:43,040 Speaker 13: Thanks, stock market prices are something that we should be 640 00:31:43,040 --> 00:31:46,200 Speaker 13: aware of, but not let them drive us. It's my philosophy. 641 00:31:46,560 --> 00:31:49,320 Speaker 13: I think it's an indication of the confidence that our 642 00:31:50,320 --> 00:31:53,800 Speaker 13: investors are placing in us. So we are very, very glad. 643 00:31:53,880 --> 00:31:56,880 Speaker 13: We have a lot of gratitude for them. But we'll 644 00:31:56,960 --> 00:32:00,000 Speaker 13: keep our heads down, continue executing, continue building products. 645 00:32:00,440 --> 00:32:02,720 Speaker 3: And let's talk about that execution that's driven your revenue 646 00:32:02,760 --> 00:32:05,640 Speaker 3: to last year one hundred and sixteen million dollars, almost 647 00:32:05,680 --> 00:32:08,320 Speaker 3: doubling but you're still got a net loss of twenty 648 00:32:08,320 --> 00:32:10,720 Speaker 3: six million dollars when you think you will be able 649 00:32:10,760 --> 00:32:13,440 Speaker 3: to provide that profitability that so many investors want to see. 650 00:32:14,160 --> 00:32:17,320 Speaker 13: So we declared that the last quarter we were indeed profitable. 651 00:32:18,200 --> 00:32:21,080 Speaker 13: A focus for ester Labs from the inception has been 652 00:32:21,120 --> 00:32:23,640 Speaker 13: to build a strong business, one that can stand on 653 00:32:23,720 --> 00:32:27,040 Speaker 13: its own to feet without external support, and that's what 654 00:32:27,080 --> 00:32:29,280 Speaker 13: we've been doing for the last six years. We turned 655 00:32:29,320 --> 00:32:32,520 Speaker 13: in a profitable quarter last quarter, and we will continue 656 00:32:32,560 --> 00:32:35,320 Speaker 13: to drive our business forward in the coming quarters and 657 00:32:35,440 --> 00:32:36,000 Speaker 13: years to come. 658 00:32:37,360 --> 00:32:40,719 Speaker 5: Jitendra, there were no fewer than two hundred and seventy 659 00:32:40,720 --> 00:32:44,000 Speaker 5: one mentions of the word AI in your most recent 660 00:32:44,160 --> 00:32:47,360 Speaker 5: SEC filing before this morning, and I think it's worth 661 00:32:47,360 --> 00:32:49,680 Speaker 5: discussing what a stera actually does. Right, You make the 662 00:32:49,720 --> 00:32:53,200 Speaker 5: hardware or the chip that allows for the high speed 663 00:32:53,200 --> 00:32:56,240 Speaker 5: connection between different parts of the server rack war as 664 00:32:56,320 --> 00:32:59,280 Speaker 5: is now more commonplace to call it the computer the 665 00:32:59,320 --> 00:33:02,959 Speaker 5: compute plant form. How are you actually benefiting in the 666 00:33:03,000 --> 00:33:06,240 Speaker 5: real world from this AI infrastructure build out that we're 667 00:33:06,280 --> 00:33:07,320 Speaker 5: seeing before our eyes. 668 00:33:08,080 --> 00:33:10,479 Speaker 13: Yeah, that's a great question, and let me give you 669 00:33:11,000 --> 00:33:14,440 Speaker 13: a little background. So whenever you enter a querry into 670 00:33:14,600 --> 00:33:17,920 Speaker 13: a chat GPT or you look for a recommendation coming 671 00:33:17,960 --> 00:33:21,080 Speaker 13: from Netflix or Amazon. What happens in the back is 672 00:33:21,120 --> 00:33:24,840 Speaker 13: in a data center, thousands, hundreds of thousands of computers 673 00:33:25,080 --> 00:33:28,080 Speaker 13: you know, many times based on GPUs come into action 674 00:33:28,280 --> 00:33:30,479 Speaker 13: and they talk to each other very very rapidly, at 675 00:33:30,600 --> 00:33:32,959 Speaker 13: very very high rates. And in fact, the rates are 676 00:33:32,960 --> 00:33:34,920 Speaker 13: so much that they are not able to talk very 677 00:33:34,920 --> 00:33:37,600 Speaker 13: well together. And that's where our products come in. We 678 00:33:37,800 --> 00:33:40,880 Speaker 13: enable the CPUs and GPUs to talk to each other. 679 00:33:41,320 --> 00:33:43,960 Speaker 13: A great analogy might be one of running a race. 680 00:33:44,320 --> 00:33:46,400 Speaker 13: If you want to run really fast, you will get tired, 681 00:33:46,800 --> 00:33:48,720 Speaker 13: and so you run a really race. You start from 682 00:33:49,120 --> 00:33:51,440 Speaker 13: one point, you run very fast, passy button onto the 683 00:33:51,440 --> 00:33:55,440 Speaker 13: next guy, and continue forward. That's what our products do. 684 00:33:55,440 --> 00:33:57,880 Speaker 13: They enable all of these brains that are behind AI 685 00:33:58,240 --> 00:34:00,680 Speaker 13: to talk to each other very fast and reliably. 686 00:34:01,600 --> 00:34:03,880 Speaker 3: Briefly, you've raised seven hundred and thirty million dollars. What 687 00:34:03,920 --> 00:34:04,440 Speaker 3: are you doing with it? 688 00:34:04,480 --> 00:34:04,920 Speaker 6: Chatandra? 689 00:34:06,600 --> 00:34:09,279 Speaker 13: We have so much opportunity in front of us. We 690 00:34:09,320 --> 00:34:11,920 Speaker 13: are in a very unique position where our customers are 691 00:34:11,920 --> 00:34:14,439 Speaker 13: coming to us and telling us, build me this, build 692 00:34:14,440 --> 00:34:16,520 Speaker 13: me this. You guys are good at semiconductors. You can 693 00:34:16,560 --> 00:34:19,920 Speaker 13: build hardware you can do software. We've earned a trusted 694 00:34:19,920 --> 00:34:23,880 Speaker 13: advisors status with our customers and so much opportunity in 695 00:34:23,920 --> 00:34:26,000 Speaker 13: front of us, so we will use this money to 696 00:34:26,520 --> 00:34:30,760 Speaker 13: really accelerate the product development that we've done, hire more people. 697 00:34:31,160 --> 00:34:33,359 Speaker 13: If you're watching this and you're looking for a job 698 00:34:33,400 --> 00:34:34,680 Speaker 13: at Estera Labs, please. 699 00:34:34,480 --> 00:34:38,880 Speaker 5: Apply Sarah Labs CEO to Bendromo and great to have 700 00:34:38,960 --> 00:34:51,040 Speaker 5: you on the program. After Hollywood filmmaker George Lucas showed 701 00:34:51,080 --> 00:34:54,640 Speaker 5: support for Disney CEO Bob iger in his proxy battle 702 00:34:54,680 --> 00:34:58,239 Speaker 5: of activist investors, let's get the take of Gerber Kawasaki 703 00:34:58,280 --> 00:35:00,880 Speaker 5: CEO and President Ros Gerber, who's point posting on x 704 00:35:01,120 --> 00:35:04,160 Speaker 5: that Nelson Peltz quote does not know his way around 705 00:35:04,160 --> 00:35:08,040 Speaker 5: Hollywood or anything related to the entertainment industry. 706 00:35:08,880 --> 00:35:10,440 Speaker 4: Ross is here with us on the program. 707 00:35:10,520 --> 00:35:13,040 Speaker 5: So I guess the latest piece of news is what 708 00:35:13,080 --> 00:35:19,759 Speaker 5: we reported on Tuesday that George Lucas, who sold his 709 00:35:20,719 --> 00:35:24,239 Speaker 5: production house to Disney for stock, is coming out and 710 00:35:24,280 --> 00:35:25,279 Speaker 5: saying Bob's the man. 711 00:35:25,480 --> 00:35:26,840 Speaker 4: Does that carry weight for you? 712 00:35:28,920 --> 00:35:31,400 Speaker 1: I mean, George Lucas is like one of the geniuses 713 00:35:31,440 --> 00:35:34,399 Speaker 1: of Hollywood, and Bob Igrew, who you know, I've met 714 00:35:34,440 --> 00:35:37,279 Speaker 1: and talked to many times, is like one of the 715 00:35:37,280 --> 00:35:41,520 Speaker 1: best CEOs in like America or maybe the world, but 716 00:35:41,760 --> 00:35:45,480 Speaker 1: also one of the best CEOs in Hollywood. And like 717 00:35:45,760 --> 00:35:50,880 Speaker 1: getting this deal yesterday with ESPN in college sports, getting 718 00:35:50,920 --> 00:35:53,480 Speaker 1: Taylor Swift on the platform. You know, these are the 719 00:35:53,880 --> 00:35:56,400 Speaker 1: Bob Iger effect that people like Nelson Peltz who just 720 00:35:56,440 --> 00:35:59,200 Speaker 1: like do financials he should worry about Ben and Jerry's 721 00:35:59,520 --> 00:36:03,200 Speaker 1: and New Believer versus getting involved with companies like Disney 722 00:36:03,200 --> 00:36:07,719 Speaker 1: and Hollywood, which are really really hard to understand how 723 00:36:07,760 --> 00:36:10,319 Speaker 1: to make money in Hollywood, very very few people ever 724 00:36:10,400 --> 00:36:12,880 Speaker 1: have and Bob Iver is one of them. So so 725 00:36:12,920 --> 00:36:15,080 Speaker 1: we support him one hundred percent. He's a great person, 726 00:36:15,480 --> 00:36:18,640 Speaker 1: a great leader, and George Lucas as well, one of 727 00:36:18,680 --> 00:36:22,960 Speaker 1: the great creators of our time. Basically everybody supports Eiger 728 00:36:23,000 --> 00:36:24,160 Speaker 1: except Pelts. 729 00:36:24,600 --> 00:36:27,719 Speaker 3: And his former CFO, who would have known how to 730 00:36:27,719 --> 00:36:29,080 Speaker 3: make money in Hollywood before. 731 00:36:30,040 --> 00:36:33,040 Speaker 1: And I'm actually okay with replacing one of the board 732 00:36:33,080 --> 00:36:37,680 Speaker 1: members with Joe Rossulo, especially somebody like Mary Barrow who 733 00:36:37,680 --> 00:36:39,480 Speaker 1: has no reason to be on the board of directors 734 00:36:39,480 --> 00:36:42,560 Speaker 1: at Tesla. So like, I don't think it's a horrible 735 00:36:42,560 --> 00:36:46,160 Speaker 1: thing to have one board member switched for one of 736 00:36:46,200 --> 00:36:50,279 Speaker 1: their picks, especially Joe. But like in general, Disney's doing 737 00:36:50,320 --> 00:36:51,960 Speaker 1: well right now and they're doing everything they need to 738 00:36:51,960 --> 00:36:52,800 Speaker 1: do to fix the business. 739 00:36:53,440 --> 00:36:55,719 Speaker 5: Because real quick, I think you said Tesla, but did 740 00:36:55,760 --> 00:37:00,600 Speaker 5: you mean you meant Disney Disney. Yeah, I'm sorry, Elon's 741 00:37:00,600 --> 00:37:01,680 Speaker 5: on your mind a lot at the moment. 742 00:37:01,960 --> 00:37:02,440 Speaker 4: I get it. 743 00:37:02,560 --> 00:37:05,799 Speaker 5: Yeah, let's let's not go there, us. 744 00:37:06,040 --> 00:37:08,040 Speaker 4: Let let's let's not go there. Let's stick with Disney. 745 00:37:08,800 --> 00:37:11,799 Speaker 5: We're speaking so much about a proxy fight and an 746 00:37:11,840 --> 00:37:14,719 Speaker 5: activist investor battle that actually, I don't think we've got 747 00:37:14,719 --> 00:37:17,280 Speaker 5: any real good sense on how things are going at Disney. 748 00:37:17,560 --> 00:37:20,960 Speaker 5: Because the accusation from those that want change, like Nelson Peltz, 749 00:37:21,160 --> 00:37:23,480 Speaker 5: is it's not going very well, right, That's why they 750 00:37:23,480 --> 00:37:26,839 Speaker 5: want change. But what do you feel about the performance 751 00:37:26,880 --> 00:37:30,120 Speaker 5: of disney streaming business. It's studios and it's parks. 752 00:37:31,120 --> 00:37:33,000 Speaker 1: Well, that's not the vibe I'm getting. You know, I 753 00:37:33,360 --> 00:37:35,799 Speaker 1: live here in Hollywood, and you know I have deep 754 00:37:35,800 --> 00:37:39,520 Speaker 1: connections through the entertainment industry. You know, Disney and Hollywood 755 00:37:39,600 --> 00:37:42,239 Speaker 1: is going through a major retrenchment now on what they're 756 00:37:42,280 --> 00:37:44,680 Speaker 1: spending on streaming and what they're spending on shows and 757 00:37:45,080 --> 00:37:48,279 Speaker 1: what content's being made, and it's not just Disney, It's 758 00:37:48,280 --> 00:37:50,560 Speaker 1: it's Netflix and many of the other players are really 759 00:37:50,600 --> 00:37:53,640 Speaker 1: looking at profitability now and with the ad support and 760 00:37:53,680 --> 00:37:57,120 Speaker 1: streaming services. But but Disney streaming services do we just fine? 761 00:37:57,200 --> 00:37:57,360 Speaker 5: You know? 762 00:37:57,440 --> 00:37:59,640 Speaker 1: Showgun is a great show, so the number one show 763 00:37:59,640 --> 00:38:03,160 Speaker 1: out there if you haven't seen it, amazing show. They've 764 00:38:03,160 --> 00:38:07,080 Speaker 1: got Taylor Swift on the platform, you know. So Disney 765 00:38:07,080 --> 00:38:09,560 Speaker 1: Plus is doing well. ESPN is making all the right 766 00:38:09,640 --> 00:38:11,879 Speaker 1: moves they need to make to move into the next 767 00:38:11,880 --> 00:38:15,319 Speaker 1: stage for its growth, and parks and resorts is great 768 00:38:15,360 --> 00:38:17,280 Speaker 1: as well. They just need to make some good movies. 769 00:38:17,320 --> 00:38:19,960 Speaker 1: That's the only thing. And the best person to make 770 00:38:20,040 --> 00:38:23,640 Speaker 1: good movies is Iiger and his team. There's nobody else 771 00:38:24,080 --> 00:38:25,279 Speaker 1: that I would trust doing that. 772 00:38:26,040 --> 00:38:28,960 Speaker 3: Well, they can just license Area's Tour, which got four 773 00:38:28,960 --> 00:38:31,600 Speaker 3: point six million views on Disney Plus apparently in its 774 00:38:31,640 --> 00:38:32,280 Speaker 3: first weekend. 775 00:38:32,719 --> 00:38:34,520 Speaker 6: So go with the hits. 776 00:38:34,560 --> 00:38:38,359 Speaker 3: But Ross, I am interested in the successor eventually. As 777 00:38:38,440 --> 00:38:39,960 Speaker 3: much as you love Bob Iger, he's got to go 778 00:38:39,960 --> 00:38:40,879 Speaker 3: in twenty twenty six. 779 00:38:40,920 --> 00:38:41,440 Speaker 6: Who do you like? 780 00:38:43,200 --> 00:38:46,480 Speaker 1: Well, you know, the truth of the matter is, I've 781 00:38:46,520 --> 00:38:50,360 Speaker 1: been around since the Eisner era, so until he's actually gone. 782 00:38:50,400 --> 00:38:53,160 Speaker 1: I don't know. I don't know if I believe somebody's 783 00:38:53,200 --> 00:38:55,840 Speaker 1: replacing him, because you know, Bob Iger's in phenomenal shape, 784 00:38:55,840 --> 00:38:58,480 Speaker 1: and you know, if Joe Biden's running for president, certainly 785 00:38:58,520 --> 00:39:01,799 Speaker 1: Bob Iger can run Disney for another ten years. But 786 00:39:01,920 --> 00:39:06,480 Speaker 1: that said, you know, I'm really really partial to you know, 787 00:39:06,640 --> 00:39:09,239 Speaker 1: some of the teams that have worked with them in 788 00:39:09,280 --> 00:39:12,040 Speaker 1: the past, and and you know, especially people who've worked 789 00:39:12,080 --> 00:39:15,200 Speaker 1: on Disney Plus and some of the other things. So 790 00:39:15,600 --> 00:39:18,640 Speaker 1: there are many executives that they're talking to, you know 791 00:39:18,960 --> 00:39:21,680 Speaker 1: that I have a lot of faith in that could 792 00:39:21,760 --> 00:39:24,480 Speaker 1: replace them, But I still think it's really up for grabs, 793 00:39:24,480 --> 00:39:27,480 Speaker 1: and right now I'm happy i Iber is still there, 794 00:39:27,640 --> 00:39:27,879 Speaker 1: you know. 795 00:39:28,520 --> 00:39:31,839 Speaker 3: Goba Kawasaki, CEO, President ros Gerber always great to catch 796 00:39:31,920 --> 00:39:35,359 Speaker 3: up with you. Thank you so much for Meanwhile, Well 797 00:39:35,440 --> 00:39:37,480 Speaker 3: that does it for this edition of Bloomberg Technology. 798 00:39:37,520 --> 00:39:38,560 Speaker 6: Boy, what a busy show. 799 00:39:38,680 --> 00:39:38,719 Speaker 7: Ed. 800 00:39:39,440 --> 00:39:41,640 Speaker 5: Yeah, it's interesting how there is this kind of little 801 00:39:41,800 --> 00:39:45,880 Speaker 5: IPO euphoria window of the next twenty four hours recap 802 00:39:45,920 --> 00:39:49,920 Speaker 5: the ASTERA conversation in particular on the pod Apple Spotify. 803 00:39:50,000 --> 00:39:51,600 Speaker 4: iHeart the Bloomberg platforms. 804 00:39:51,760 --> 00:39:53,279 Speaker 5: So many of you are checking out the pod on 805 00:39:53,320 --> 00:39:55,239 Speaker 5: your way to work, or when you're on the treadmill, 806 00:39:55,400 --> 00:39:58,760 Speaker 5: whatever it is. Tune in daily from New York and SF. 807 00:39:58,960 --> 00:40:00,000 Speaker 5: This is Bloomberg Technology. 808 00:40:00,080 --> 00:40:01,920 Speaker 4: James wol