Speaker 1: From Mark Hard We're Innovation of Money and Power Collie
Speaker 1: in Silicon Valley, NBN. This is Bloomberg Technology with Caroline
Speaker 1: Hyde and Ed Ludlove.
Speaker 2: I'm Caroline Hyde at Bloomberg's World headquarters in New York,
Speaker 2: and I'm Ed Ludlow in San Francisco.
Speaker 3: This is Bloomberg Technology coming up.
Speaker 2: Full earnings coverage ahead, and we're going to be kicking
Speaker 2: off the show with Reddit CEO Steve Huffman.
Speaker 3: Plus later this hour we'll turn to ride sharing and
Speaker 3: sit down with the CEO of Lift, and.
Speaker 2: We'll hear from Alphabet CEO so No a pitchy ahead
Speaker 2: of Google's developer conference. Io will break that down and
Speaker 2: discuss so much more throughout this hour, But first we
Speaker 2: turn our attention to what is happening more broadly on
Speaker 2: the markets. Maybe we look at this risk asset of
Speaker 2: choice to start bitcoin currently on the downside versus the
Speaker 2: US dollar, or it really shows risk appetite is waning
Speaker 2: at the moment. Ed, we've got a stronger dollar though,
Speaker 2: and more broadly, we've seen kind of lackluster moves on
Speaker 2: the benchmarks. More broadly, I wonder if the director can
Speaker 2: bring up at the moment. What's happening when the Nasdaq
Speaker 2: more broadly and tex stocks have been underwater a little
Speaker 2: bit as we've pulled lower on some of the chip
Speaker 2: names in particular. Look at the Nasdaq basically trading flat.
Speaker 2: We're off by seven points. There's caution out there ahead
Speaker 2: of maybe some bond auctions to come.
Speaker 4: We've seen the sell off in the bond market.
Speaker 2: Yields as we've been seeing on the tenure just up
Speaker 2: about two three basis points. We've got a big flood
Speaker 2: of money coming with a supply of tenure debt coming
Speaker 2: on auction a little bit later.
Speaker 4: How will that be taken down supply goes up? Of course,
Speaker 4: maybe a little bit of a sell off. But I'm
Speaker 4: showing a light.
Speaker 2: And what's happening more broadly with the socks the Philadelphia
Speaker 2: Semiconductor Index. Why is that lower when we've seen some
Speaker 2: real ramifications from that news that broke yesterday all regarding
Speaker 2: HUAWEIH once again limitations on the access to chips made
Speaker 2: here in the United States by Intel by Qualcom. We
Speaker 2: can dig into that story a little bit later, ed,
Speaker 2: but I want to show that actually we're bouncing off
Speaker 2: our loads when it comes to the socks. But what
Speaker 2: if you've got on the micro perspective.
Speaker 3: Well, in the first instance, earnings, there's going to be
Speaker 3: a lot throughout the hour outside of earnings. But let's
Speaker 3: start there with the tail of two ride sharing apps,
Speaker 3: Uber and lyft Okay. Uber has a lot more to
Speaker 3: it than ride sharing, but in its quarter there was
Speaker 3: issues of seasonality. Regionally, it was a bit weaker and
Speaker 3: the stock is down pretty significantly. Then you have the
Speaker 3: little brother of ride sharing, Lyft, and its stock is higher.
Speaker 3: It actually was pretty strong. You know. It wasn't just
Speaker 3: that gross bookings, which is the industry standard metric, was
Speaker 3: stronger than expected. They're also seeing kind of some bump
Speaker 3: in activity for the riders themselves, not just rider growth,
Speaker 3: but stickiness the amount they're using it. Then you have Rivian.
Speaker 3: Rivian's a difficult one. It's not really about in the moment,
Speaker 3: it's about the future. Later in the hour, we hear
Speaker 3: again from the CEO Rjscarrange, and what I tried to
Speaker 3: get from him was a sense of like, is this
Speaker 3: really going to plan? Then there's Reddit redd its debut earnings.
Speaker 3: We want to get to that stock and welcome our
Speaker 3: Bloomberg TV and radio audiences worldwide. Read it out with
Speaker 3: its first earnings report as a public company, shares markedly
Speaker 3: higher seven percent. Let's bring in Reddit CEO Steve Huffman
Speaker 3: and Steve the quarter gone forty eight cent top line growth.
Speaker 3: You're doing well. The ad environment seems really good. But
Speaker 3: I actually want to start with the next big thing,
Speaker 3: and that seems to be the user economy. That seems
Speaker 3: to be your focus. Tell me about the user economy strategy.
Speaker 5: So, good morning, thanks for having me.
Speaker 6: So, the user economy is the family of products and
Speaker 6: features that we're building to facilitate transactions between users on
Speaker 6: the platform, so user to user, gifting user to use
Speaker 6: their subscription, user community, subscriptions, things like that. We think
Speaker 6: there's a ton of potential here. One of our sayings
Speaker 6: that Reddit is the only thing that scales with the
Speaker 6: users is users. And so look, the ads business is
Speaker 6: great and can scale pretty much infinitely from our point
Speaker 6: of view, but we'd love to have another business model
Speaker 6: to sit alongside it, and that's what the user economy.
Speaker 4: Is, Steve alongside.
Speaker 2: Also, the ad business that you say can infinitely scale
Speaker 2: has been AI in the selling of data and licensing
Speaker 2: to some of those big businesses that are creating large
Speaker 2: language models based upon the data that you license, Google being.
Speaker 4: One of them.
Speaker 2: How infinite is that revenue stream? Because once the models
Speaker 2: are trained, how necessary is it to keep on licensing.
Speaker 5: So I think there's a couple of ways to look
Speaker 5: at this.
Speaker 6: First, the potential value here is I think quite large,
Speaker 6: and between us and other folks in the market, we're
Speaker 6: actually still developing that. You know, we're finding increasingly folks
Speaker 6: coming to Reddit. And I think what we're seeing overall
Speaker 6: big picture is in the AI era, where increasingly content
Speaker 6: online is written by machines, there's this increasing premium content perspectives,
Speaker 6: conversation that comes from real humans, and that's what Reddit provides.
Speaker 6: So so far we've done one kind of major content
Speaker 6: licensing deal with Google, but we're talking to others as well.
Speaker 6: But your question about is is it a one time
Speaker 6: thing or ongoing? I think what's really important here is
Speaker 6: folks want real time access to up to date information,
Speaker 6: conversation perspectives.
Speaker 5: Right.
Speaker 6: Imagine a search engine that stopped indexing in twenty twenty one.
Speaker 5: It wouldn't be very helpful. And so I think that
Speaker 5: real time feed is really important.
Speaker 3: Steve, you took the interesting step to ask redditors and
Speaker 3: particularly redditors who investors in the IPO, to submit questions,
Speaker 3: and those some of which you answered on the call
Speaker 3: and some of which you will follow up in video form.
Speaker 3: We're showing one of them now, which is what is
Speaker 3: the justification for having one billion dollars in working capital?
Speaker 3: I want to take that question and apply it to AI.
Speaker 3: You know, data licensing is a revenue generation tool for you.
Speaker 3: But on the technology side, might we see some m
Speaker 3: and A that answers that question from your redditor community,
Speaker 3: but also helps us understand a bit more like what
Speaker 3: are you guys going to do to increase competence to
Speaker 3: increase the technology offering on AI?
Speaker 5: Sure, we'll look.
Speaker 6: Our first priority with the cash is to invest in
Speaker 6: the business, so to continue to develop the core Reddit product,
Speaker 6: the user economy, which we discussed, the developer platform, our
Speaker 6: AI efforts, all of those things.
Speaker 5: Our second priority would be M and A.
Speaker 6: And so you know, we're always I think looking in
Speaker 6: the market for teams and technology that can really kind
Speaker 6: of help advance our initiatives. And right as you allude to,
Speaker 6: I think there's just a tremendous opportunity in AI in search,
Speaker 6: both to make our core product better and potentially to
Speaker 6: expand it as well.
Speaker 2: Let's talk about expansion and particularly internationally, Steve, because there's
Speaker 2: much talk about how you're basically translating able to bring
Speaker 2: what is all the reviews, the content, the discussion groups,
Speaker 2: not just to those that are writing and speaking in
Speaker 2: the English language, but in French and European countries.
Speaker 4: How is this.
Speaker 2: Likely to be enabled by AI but also add to
Speaker 2: the scale of international growth.
Speaker 5: Well, this is really exciting.
Speaker 6: Like, not that long ago, we didn't have the capability
Speaker 6: of translating our content at human quality, but with today's
Speaker 6: large language models, we can do that, and so we
Speaker 6: can translate our what is today our mostly English corpus
Speaker 6: into just about any language. And so we're doing that
Speaker 6: in French right now and testing that in France, and
Speaker 6: it's going very well, and so almost immediately French speakers
Speaker 6: can see the entire Reddit corpus or consume their entire
Speaker 6: redit corpus in English. And a lot of reddits content
Speaker 6: is universal, right, it's just people talking about life. But
Speaker 6: even the content that is maybe regionally specific to America,
Speaker 6: I think it's still really interesting to read and vice versa.
Speaker 5: And so I'm really excited.
Speaker 6: At this idea that we can fulfill the promise of
Speaker 6: the Internet, which is allow people around the world, in
Speaker 6: different countries and different cultures to communicate in their native language.
Speaker 3: For our Bloomberg television and radio audience worldwide, we're speaking
Speaker 3: to the Reddit CEO Steve Huffman, and Steve things are
Speaker 3: going well right now. It seems one of the technology
Speaker 3: changes at the start of this year and even before that,
Speaker 3: was that Google started applying its work in large language
Speaker 3: models and AI to its search engine. And there is
Speaker 3: a school of thoughts that Reddit was a beneficiary of
Speaker 3: that that just within search, Reddit becomes more commonplace up
Speaker 3: the results that are given. Can you give us any
Speaker 3: sort of granularity on how that's helping you with growing
Speaker 3: the redditor base and keeping the redditor base.
Speaker 5: Well, let's just take a step up for a second.
Speaker 6: Reddit has what people want, right, People have questions.
Speaker 5: They often go to Google with questions. Reddit has the
Speaker 5: best answers on the Internet.
Speaker 6: They want advice, they want information, they want a sense
Speaker 6: of community and belonging. These are the things that Reddit
Speaker 6: provides and search engines like Google ten years ago, last year, today, tomorrow,
Speaker 6: help people find that content on Reddit. They're looking for
Speaker 6: those answers, they're looking for those communities they're looking for.
Speaker 5: And so I think I look at this as a
Speaker 5: natural evolution.
Speaker 6: Search engines are getting smarter, they're getting better, they're getting
Speaker 6: more effective, which means they're getting more effective at helping
Speaker 6: users find what they're looking for on Reddit, which of
Speaker 6: course benefits our platform and our business. And so I
Speaker 6: think these are all I think welcome evolutions. But Reddit
Speaker 6: it's been a net beneficiary of search for a long time,
Speaker 6: and I expect that to continue.
Speaker 2: How much have you been a net beneficiary of going public, Steve?
Speaker 2: How much did the IPO help draw people to the platform.
Speaker 2: How much was it a pr event do you think
Speaker 2: and actually boosted some of the community there.
Speaker 5: Well, look, I'm sure that's an aspect to it.
Speaker 6: You know, it's hard to say and that you know,
Speaker 6: Reddit primarily grows through word of mouth anyway. You know,
Speaker 6: we don't really do consumer marketing, and so I think
Speaker 6: anytime we're in the news that helps in the IPO
Speaker 6: with a lot of news. But look, the reason I
Speaker 6: was most excited about the IPO is that we are
Speaker 6: able to.
Speaker 5: Include our users as investors.
Speaker 6: Our users have this deep sense of ownership over Reddit,
Speaker 6: right they create the communities, they create the culture, they
Speaker 6: create all of the content, and for them to have
Speaker 6: the opportunity to be actual owners. That was our dream
Speaker 6: and that was one of the main reasons we went
Speaker 6: public in the first place. So that's actually what I'm
Speaker 6: most excited about.
Speaker 3: Steve is a kind of returning founder. CEO of Date,
Speaker 3: what's your one personal goal for this year, it's something
Speaker 3: you want to achieve.
Speaker 5: Well, we mapped out two of them.
Speaker 6: We got the company public and I had my second kid,
Speaker 6: and so for the rest of this year, I want
Speaker 6: to deliver on some of the product initiatives that I've
Speaker 6: been very excited about, so developer platform, the user economy,
Speaker 6: the machine translation that we've discussed. These are all things
Speaker 6: I think in the day to day building of Reddit
Speaker 6: that I'm very excited about.
Speaker 2: Steve, congrats, I'm the second kid. Reddit CEO, Steve Hoffman,
Speaker 2: I try to have you with us.
Speaker 4: Thank you.
Speaker 2: Now, coming up, we'll hear from the Alphabet CEO Sin
Speaker 2: of hitsheie his vision for the future of artificial intelligence
Speaker 2: as next and.
Speaker 4: What are you watching.
Speaker 3: We continue with the earning story and we take a
Speaker 3: look at shares of a firm lower again eight and
Speaker 3: a half percent. It's really been a season of if
Speaker 3: you don't beat expectations or your prior guidance, you go
Speaker 3: down lower. Continued about product differentiation, continue discussion about the
Speaker 3: rate environment with the firm as well, or continue the
Speaker 3: earnings coverage. Much more ahead. This is Bloomberg Technology.
Speaker 2: Let's talk open AI because it's developing a feature for
Speaker 2: chatchbt that can search the web and cite sources and
Speaker 2: its results according to a source.
Speaker 4: Now, the future, we would all allow users.
Speaker 2: To ask chatchbt a question and receive answers that use
Speaker 2: details from the web with citations to sources.
Speaker 4: Just think Wikipedia entries and blog posts.
Speaker 2: Now, this could potentially be competing head on with AI search,
Speaker 2: Startle Perplexity, and of course Google Search. And speaking of which,
Speaker 2: Google and Alphabet CEO so on a pitch I sat
Speaker 2: down exclusively with blubgo Original's host Emily Tang to discuss
Speaker 2: the future of search and accelerating work on Google's AI models.
Speaker 2: Here's what he had to say on some of the
Speaker 2: growing pains of Google searchers adaptation to the AI revolution.
Speaker 7: Anytime there's a transition, you get an explosion of new content,
Speaker 7: and AI is going to do that. So for us,
Speaker 7: we view this as the challenge, and I actually think
Speaker 7: here there'll be people will struggle to do that right.
Speaker 3: So doing that well is what.
Speaker 7: Will define a high quality product, and I think it's
Speaker 7: going to be the heart of what makes so successful.
Speaker 8: You make a ton of money on ads next to
Speaker 8: the links generated by searchers if a chatbot is giving
Speaker 8: you answers and not links, and maybe more answers in links.
Speaker 8: Sometimes are we in the midst of an assault on
Speaker 8: Google's business model.
Speaker 7: So we've always found people want choices, including in commercial area,
Speaker 7: and that's a fundamental need and I think we've always
Speaker 7: been able to balance it. As we are rolling out
Speaker 7: Aiovius and Search, we've been experimenting with ads and the
Speaker 7: data we see shows that those fundamental principles will hold
Speaker 7: true during the space as well.
Speaker 8: The images that Gemini initially generated of Asian Nazis and
Speaker 8: black Founding fathers, you said that was unacceptable.
Speaker 9: If you look at any pictures of the.
Speaker 8: Founding fathers, you're seeing old white men. People are calling
Speaker 8: this Woki and it's not just happening here, It's happening
Speaker 8: across the industry. How did the model generate something that
Speaker 8: it never saw.
Speaker 7: We are a company which serves products uses around the world,
Speaker 7: and there are generic questions. For example, people come and
Speaker 7: say show me images of school teachers or doctors or nurses.
Speaker 7: We have people asking discovery from Indonesia or the US.
Speaker 7: How do you get it right for our global user base.
Speaker 7: Obviously the mistake was that we over applied, including case
Speaker 7: the spirit should have never applied.
Speaker 9: So that was the bug.
Speaker 7: And you know, you know, so we got it wrong.
Speaker 3: That was alphabet CEO Cunda Pinschai and Bloomberg Original's host
Speaker 3: Emily Changi. You can catch the full interview from the
Speaker 3: circuit tonight at six pm Eastern on Bloomberg Television.
Speaker 2: Let's just check in on the shares of Shopify because
Speaker 2: they're down the most on record US after the company
Speaker 2: forecasts lower profit margins as I can induce to really
Speaker 2: be boosting the marketing spend now. The comments company also
Speaker 2: reported a surprise net loss in the first quarter after
Speaker 2: the sale of its logistics business last year. Joining us
Speaker 2: now to break down the results. Harley Finkelstein, Shopify president,
Speaker 2: and Harley I remember speaking with Toby look At, the
Speaker 2: CEO of the business once and he said that anytime
Speaker 2: anyone talks about the share price in the office, while
Speaker 2: everyone has to be bought donuts, I have a fee
Speaker 2: that might be some downuts.
Speaker 9: To day specific specific.
Speaker 2: Yeah, Harley, I mean, what what does it feel like
Speaker 2: when you see the shares down that hard?
Speaker 9: Oh?
Speaker 10: I'm I mean we've always managed the business in a
Speaker 10: long term way. What we actually and what you're seeing
Speaker 10: at Shopify right now is we got came on the show. Actually,
Speaker 10: I think it's wo to end about this new shape
Speaker 10: of Shopify is unlocking our potential. We're helping all different
Speaker 10: types of merchants take more and more of our products.
Speaker 10: But let's just kind of break down. You know, how
Speaker 10: the quarter went. I mean, we generate almost two billion
Speaker 10: dollars of revenue. That was a twenty three percent year
Speaker 10: a year. We had a billion dollars a gross profit
Speaker 10: and very important in this particular macro environment, Carolyn. We
Speaker 10: had free cashual of two hundred and thirty two million
Speaker 10: dollars for the quarter. In fact, free cash margin doubled
Speaker 10: from Q one of last year, so you're seeing I
Speaker 10: think one of the best versions of Shopify with a
Speaker 10: ton of opportunities, whether it's enterprise, physical, retail, international B
Speaker 10: to B. We are very excited about about what we
Speaker 10: did in Q one. We're very excited about the future
Speaker 10: of this company.
Speaker 3: Hally. The anxiety from investors about fitting margins, right, I
Speaker 3: think we all set that as the baseline. One thing
Speaker 3: you've been focused on is marketing, right, which accounts for
Speaker 3: that in part? Give me some specifics. What kind of
Speaker 3: marketing are you doing? And I think you've also said
Speaker 3: it's going to pay off in about eighteen months time.
Speaker 3: How do you know the marketing spend will pay off? Well?
Speaker 10: First of all, we think about marketing and the same
Speaker 10: way we think about building products, build the best solutions,
Speaker 10: build the best internal tools to drive decision through data,
Speaker 10: and the results are evident.
Speaker 9: I'll go with them in a second.
Speaker 10: But one of the things that we really believe is
Speaker 10: that shopi line needs to be agile and at times countercyclical.
Speaker 10: When we see opportunities for us to take advantage and
Speaker 10: gain more market share across any of our core products,
Speaker 10: We're going to do that. But the key for us
Speaker 10: is striking a balance between top line growth, operational leverage,
Speaker 10: and profitability. And I think what differentiates Shopify from a
Speaker 10: growth perspective or marketing perspective to user words is that
Speaker 10: the way we interpret data, the way we experiment, actually
Speaker 10: helps us to win.
Speaker 9: And we have multiple drivers of this growth.
Speaker 10: But the best proof I can give you is we
Speaker 10: drove a nearly one hundred and thirty percent increase immersion
Speaker 10: ADS within one of our key marketing channels, sure you know,
Speaker 10: the one from Q four to Q one, while still
Speaker 10: remaining squarely within our payback Guardrails. So when we see
Speaker 10: the people that other companies are pulling back and we
Speaker 10: think we can get a return on our AD spend,
Speaker 10: that again is within Guardrails has the right CAC to
Speaker 10: L two ratios that in twenty twenty five you will
Speaker 10: see the growth from these efforts. We're going to take
Speaker 10: those and back to sort of the question Caroline open with,
Speaker 10: that's the reason why we don't really care about the
Speaker 10: day to day stock fluctuation. We care about over the
Speaker 10: long run, does a stock price reflect the real value
Speaker 10: of the company. And Shopify is becoming the global retail company.
Speaker 3: Next month, you're going to have a big event, and
Speaker 3: I think I'm right in saying it's the first in
Speaker 3: person event at least since before the pandemic twenty eighteen.
Speaker 3: That is a marketing expense, but there must be a
Speaker 3: reason for doing.
Speaker 9: It, certainly.
Speaker 10: I mean, we are thriving in this remote first environment
Speaker 10: and we see immense value in getting people together as well.
Speaker 10: So some at SHOPIAY Summit is accommodation of multiple events
Speaker 10: that brings together our team, our partners, our top one
Speaker 10: thousand developers from all all over the world. And you know,
Speaker 10: we think that it's this remote first philosophy and working
Speaker 10: model allows us to recruit the best of the brands
Speaker 10: from all over the world. But a key component of
Speaker 10: this digital bide design approach is also supplementing it with
Speaker 10: a few real life events, and we have not done
Speaker 10: We've not brought the entire company together in person, and
Speaker 10: since like twenty eighteen, we think it's important to do so,
Speaker 10: especially because we can also get our developers, our third
Speaker 10: party developers in the room, explain to them all the
Speaker 10: opportunities of how they should be building on Shopify. Then
Speaker 10: they go back home and they and they continue their
Speaker 10: businesses as well. So it's an important event for us,
Speaker 10: and we're excited by the Shopfy summit, and.
Speaker 2: I can imagine that it's important for morale, particularly after layoffs.
Speaker 4: Holly, are layoffs done now?
Speaker 10: We have no plans to do any additional layoffs at
Speaker 10: this point. What you are seeing, Caroline is this new
Speaker 10: shape of Shopify. We have been able to grow top line,
Speaker 10: We've been able to grow bottom line. We're making serious
Speaker 10: investments in the future of our business now we're doing
Speaker 10: so with a relatively flat headcount. In fact, if you
Speaker 10: go back three quarters, headcount has not grown that much.
Speaker 10: What matters to us is the talent density of the company,
Speaker 10: and this is the best talent team, the best version
Speaker 10: of Shopify I've seen in my fifteen years of being here.
Speaker 2: And you've talked about how this is. You're being countercyclical
Speaker 2: right now. Just tell us how countercyclical. How many headwinds
Speaker 2: are you experiencing in the world of the consumer right now?
Speaker 4: How reticent are they to shop?
Speaker 10: Yeah, I mean it's really important, obviously because the state
Speaker 10: of the consumers as obviously, and the whole macro trend
Speaker 10: is something that everyone's thinking about. First of all, we
Speaker 10: see the consumer actually remaining quite resilient. What we do see,
Speaker 10: in particular is that these consumers are buying from brands
Speaker 10: they love and feel ineffinity to. And all those brands
Speaker 10: think of the brands you love are all on Shopify.
Speaker 10: But a new area of business are those less discretionary
Speaker 10: brands like Nesley or Hines or bark Box or Figs
Speaker 10: whose scrubs are in hospitals all over the country.
Speaker 9: Those are also using Shopify as well.
Speaker 10: And when you combine in our enterprise offering, Shopify point
Speaker 10: a cell, which is the physical retail product we have,
Speaker 10: plus B to B plus all these new merchant solutions
Speaker 10: like audiences to help with ads, shop off a capital Shoppey,
Speaker 10: which is the best can run accelerated check out. You're
Speaker 10: beginning to see that all these on raps are going
Speaker 10: to lead to serious growth in our future. And that's
Speaker 10: the reason why the sentiment inside of Shopify right now
Speaker 10: is incredibly optimistic.
Speaker 3: Shop five President Harley Finkelstein, thank you, welcome back to
Speaker 3: Bloomber Technology ed Lovelow in San Francisco.
Speaker 2: Aline hid right here in New Or let's check in
Speaker 2: on these market said, because we're basically flat when you're
Speaker 2: looking at the big benchmarks. I'm looking the na's that
Speaker 2: one hundred on the day and a.
Speaker 4: Little bit of a cautious tone. And look, we've had
Speaker 4: four straight days of games. That has been a good run.
Speaker 2: But we're also trying to digest a macro picture that's
Speaker 2: not giving us much. We're still looking at the FED
Speaker 2: and some of the speakers coming from the federals.
Speaker 4: EV, but more some of the microheadwinds.
Speaker 2: When you think of well chip maker is trying to
Speaker 2: sell into geopolitical headwinds. That's more of what we're boiling
Speaker 2: down to on the day. When it comes to tech stocks,
Speaker 2: I'm looking at the tenure yield. Though this is a
Speaker 2: macro picture. This is one of sales. This is an
Speaker 2: auction of tenure debt coming. I'm currently off by about
Speaker 2: two basis points. When you're thinking of yields going higher,
Speaker 2: prices falling. Bitcoin also on the lower side, resentiment a
Speaker 2: little bit dower there or off by one point four percent.
Speaker 2: Maybe that's also to do with a stronger US dollor
Speaker 2: on the day, but also whether those ETF flows just
Speaker 2: cooling down a little bit. Let's look at some of
Speaker 2: the micro pictures that we want to shine a light
Speaker 2: on though, and we just referenced it just before we
Speaker 2: went to break. Tesla currently off by one point six percent.
Speaker 2: Now we know that US prosecutors have been looking in
Speaker 2: the way in which Tesla and Eilon Musk have discussed
Speaker 2: self driving. Did they mislead investors? Do they mislead consumers?
Speaker 2: But now the nuance is coming from a router's report
Speaker 2: saying that maybe they're looking at them for securities fraud,
Speaker 2: wire fraud. Potentially that's a router's report. We're off by
Speaker 2: one point six percenters, we're just reminded of the US
Speaker 2: prosecutor's investigation. Armholdings up by quarter of a percent. Now,
Speaker 2: remember this is a company we were looking at this.
Speaker 2: Its current valuation is ninety times future earnings. At the moment,
Speaker 2: many wondering how they live up to this valuation on
Speaker 2: the market. How we baked in too much from euphoria
Speaker 2: around AI for this chip designer. Their earnings come after
Speaker 2: the bell so tooos the Airbnb and look, we're looking
Speaker 2: for bookings ultimately to be slowing, in fact flowing bookings
Speaker 2: growth for Airbnb that will likely to have seen since
Speaker 2: twenty twenty. That's what the market braces itself for or
Speaker 2: a more than a percentage point ed.
Speaker 4: But what are you looking at.
Speaker 3: Well, let's head out to DC and talk about TikTok,
Speaker 3: after its China based parent, byte Dance made it clear
Speaker 3: it won't comply with the new US law requiring it
Speaker 3: to sell the video sharing app, saying quote that for
Speaker 3: the first time in history, Congress is an acted a
Speaker 3: law that subjects a single named speech platform to a
Speaker 3: permanent nationwide band and bars every American from participating in
Speaker 3: a unique online community with more than one billion people worldwide.
Speaker 3: I want to bring in Bloombergs Chris Strome to break
Speaker 3: it all down. It is not a surprise, right Chris.
Speaker 3: The legal challenge, but the question to be considered by
Speaker 3: the courts is whether or not this is an outright ban,
Speaker 3: And I think the academic consensus is that that will
Speaker 3: be something the court looks at closely.
Speaker 11: Yeah, that's absolutely right. I mean TikTok is making a
Speaker 11: few different arguments here. They're saying that, you know, the
Speaker 11: the law that was signed in fringes on on on
Speaker 11: the first Amendment, it represents an illegal taking, and uh,
Speaker 11: you know, TikTok is saying that it's not feasible for
Speaker 11: them to separate you know, TikTok us from the rest
Speaker 11: of the TikTok you know global community. And so really
Speaker 11: what TikTok has done here is they've just bought a
Speaker 11: lot of time by filing this lawsuit, because there's no
Speaker 11: way this is going to be resolved by next January.
Speaker 11: There's going to be a long court battle, you know,
Speaker 11: regardless of what happens, There's going to be appeals. It's
Speaker 11: most likely going to go to the Supreme Court.
Speaker 2: Okay, And this sort of time frame many feeling that
Speaker 2: an expedited ruling isn't gonna come until say the fourth quarter,
Speaker 2: then you have to look ahead to January when it
Speaker 2: ultimately it might be then at least banned or at.
Speaker 4: Least has to be sold.
Speaker 2: It feels as though the sentiment very much is is
Speaker 2: that this isn't going to be a sales process, right.
Speaker 11: Bike Dances making it clear at this point that they
Speaker 11: have no intention of divesting TikTok. They are gonna you know,
Speaker 11: they're digging in for a prolonged legal battle and also
Speaker 11: probably with the hopes of you know, a Trump administration
Speaker 11: that might be more friendly to them, and so the
Speaker 11: law says that they need to divest by next January
Speaker 11: or there's going to be a ban in the United States.
Speaker 11: The legal process won't be resolved by then. If they
Speaker 11: get up to the point where the band is supposed
Speaker 11: to go into effect, they'll most likely seek an emergency
Speaker 11: in junction to prevent that band from going to and
Speaker 11: going going to effect, and it'll most likely be granted.
Speaker 11: And so, you know, we're long ways away from this
Speaker 11: being resolved.
Speaker 3: Chris, who are the players here? You just outline brilliant
Speaker 3: the kind of short term and long term process. But
Speaker 3: if Bike Dance has filed a legal challenge, who are
Speaker 3: they challenging. Who's on the other side of the table.
Speaker 11: Yeah, it's interesting because they actually filed their lawsuit against
Speaker 11: the Attorney General Meryrick Garland. And part of the reason
Speaker 11: for that is because according to the law, DJs and
Speaker 11: is charged with enforcing the law. And so you know,
Speaker 11: in order to bring a legal lawsuit, they needed to find,
Speaker 11: you know, a defendant that they were gonna that they
Speaker 11: were going to sue, so they chose Meyork Garland. But really,
Speaker 11: you know, they're they're challenging the law that Congress passed
Speaker 11: that Biden signed and saying it's unconstitutional.
Speaker 2: Amidst all of this, we have players weighing in whether
Speaker 2: it's Steve monusan previous Treasury Sextuori sat down in David
Speaker 2: Weston yesterday talking about how he's still hoping that he
Speaker 2: might be able to get his hands on TikTok, perhaps
Speaker 2: without the algorithm he'd rebuild it. Had Eric Schmid on
Speaker 2: the show yesterday who had been interested in buying the US.
Speaker 4: Version of TikTok.
Speaker 2: He backs away from that and actually says that this
Speaker 2: is just more broadly should be regulated in the US
Speaker 2: rather than banned. But Chris, I'm interested from a legal perspective,
Speaker 2: can we read anything across from what happened in Montana?
Speaker 2: Can we feel that sentiment will be on the side
Speaker 2: from a First Amendment perspective, even if though we're hearing
Speaker 2: from TikTok that they couldn't legally actually separate the businesses anyhow.
Speaker 11: Uh, there's gonna be a lot of support for TikTok's
Speaker 11: It's already it's already coming, and it's gonna it's gonna
Speaker 11: h span the political spectrum, the economic spectrum. You have
Speaker 11: you know, people who advocate for free speech uh saying
Speaker 11: that TikTok shouldn't be banned. You have people who are
Speaker 11: saying that the government hasn't made u, you know, a
Speaker 11: legitimate national security argument to try to ban TikTok. I
Speaker 11: would expect that there's gonna be a lot of amicus
Speaker 11: filings in this case, and then you have this statecases
Speaker 11: that are playing out like you mentioned, and so you know,
Speaker 11: for the foreseeable future, there's going to just be a
Speaker 11: lot of litigation over this issue.
Speaker 3: Blimbers Kristrom, thank you very much. Former US Treasury Secretary
Speaker 3: Steve maninschen As Caroenline says, says he's still interested in
Speaker 3: buying TikTok's US operations from its Chinese owner, Byte Dance,
Speaker 3: but believes the social media app's critical video recommendation technology
Speaker 3: could be replicated. Listen to this.
Speaker 12: Still very interested in buying it, and to the extent
Speaker 12: they want to sell it or spin it off, we
Speaker 12: very much want to pursue that. I support that Congress
Speaker 12: passed the bill and it's now been signed into law.
Speaker 5: I will say this is had just.
Speaker 12: Incredible overwhelming support with the Republicans and Democrats. This may
Speaker 12: be the only thing that everybody agrees on the fact
Speaker 12: that it's on.
Speaker 4: One hundred and sixty million phones.
Speaker 12: I do think it's a security issue now.
Speaker 2: One of the other people who are at one point
Speaker 2: reported to be interested in getting in on buying with
Speaker 2: minution was Google or former Google CEO Eric Schmidt. We
Speaker 2: spoke with him yesterday and he's actually non interested anymore.
Speaker 4: Just take a listen.
Speaker 13: My personal view on this is you're better off regulating
Speaker 13: than banning or a judicial action. All the big tech
Speaker 13: companies are now in the hands of.
Speaker 3: The DOJ in various legal fights.
Speaker 1: I would prefer to see.
Speaker 13: A regulatory regime that it sort of has the right
Speaker 13: incentives and the right prohibitions for all of these things.
Speaker 13: My own view of TikTok is that TikTok is not
Speaker 13: really social media, it's really television, and that you can
Speaker 13: regulate television by the equivalent of the equal time rule.
Speaker 13: But somehow we're not having that conversation.
Speaker 3: Let's get back to earnings and Rivian posting a wider
Speaker 3: than expected adjusted loss in the first quarter. A break
Speaker 3: down the results Rivian CEO R J. Scaringe.
Speaker 14: The challenge with this number is it's a false metric
Speaker 14: and it just causes It just caused a lot of noise,
Speaker 14: and so we'd like to rather focus on the product.
Speaker 14: We're tears out from launch, and our goal is to
Speaker 14: pete ramping production as quickly as possible so that people
Speaker 14: don't have to wait as long as they had to
Speaker 14: wait in the case of our R one products.
Speaker 3: Oh, Jay, something I noticed is interesting in your filings
Speaker 3: is the proportion of the R one generation that at
Speaker 3: least versus ball seems to be going up. Could you
Speaker 3: give us that proportion and is it a good thing
Speaker 3: for Rivian right now in this environment where you're between
Speaker 3: the two growth phases if more are one generations at.
Speaker 14: Least, Yeah, we don't disclose the split between sales and lease.
Speaker 14: We now we've expanded least to offer that on R
Speaker 14: one s as well, and we've added a number of
Speaker 14: states that we offer leasing. Believe it's not thirty two states.
Speaker 3: Now.
Speaker 14: The key to recognize is leasing does have an advantage
Speaker 14: for electric vehicles and that any lease qualifies for the
Speaker 14: seven thousand and five fron dollar attack credit, and so
Speaker 14: that leads to disproportionately large number of leases relative to
Speaker 14: an internal combustion engine vehicle given the benefits of that
Speaker 14: of that credit.
Speaker 15: And I do want to talk a little bit about
Speaker 15: what's going on with the factories because you shut down
Speaker 15: some of the assembly lines to make component upgrades. If
Speaker 15: you could just walk us through the math and sort
Speaker 15: of the path board on how that gets through to
Speaker 15: positive gross profit by the fourth quarter, that.
Speaker 8: Would be helpful.
Speaker 5: Yeah, we.
Speaker 14: Started production in late twenty twenty one, and this was
Speaker 14: the first time, you know, walking through the plant that
Speaker 14: there had been no vehicles on the lines. At the
Speaker 14: start of April, the plant was really empty. We drained
Speaker 14: out everything that we were producing with the largely original
Speaker 14: supply chain and component design, made a large number of
Speaker 14: changes to the plant, and then also had a number
Speaker 14: of new suppliers come on board replacing existing suppliers and
Speaker 14: the park designs and component designs, and that's going to
Speaker 14: lead to a step change improvement in our structure, both
Speaker 14: at the bill of materials level, but importantly also at
Speaker 14: the what we call the conversion costs level, allowing the
Speaker 14: plant to run more efficiently. And we did a similar
Speaker 14: shutdown with our ED program, and that was something we
Speaker 14: did at the beginning of twenty twenty three. We took
Speaker 14: about thirty five percent bill of material cost out of
Speaker 14: the vehicle with that shutdown, and the scale of change
Speaker 14: we've made with our one here is very similar to that.
Speaker 2: Great interview ed the Rivian CEO R J. Scarrange along
Speaker 2: with Kitiger.
Speaker 4: I felt too.
Speaker 2: Now coming up will be joined by Logitech CEO. I
Speaker 2: like a favor about consumer tech and gaining on AI
Speaker 2: so much more. That conversation you don't want to miss
Speaker 2: as a blue meg technology.
Speaker 4: Let's talk Logitech.
Speaker 2: It's linking its products to guess what artificial intelligence in
Speaker 2: a whole number of ways, like with new AI Promptu
Speaker 2: software which will turn your Logitech keyboard your mouse. It's
Speaker 2: basically a shortcut to chat YOUBT a priest and welcome
Speaker 2: here in New York.
Speaker 4: Ha a favor. Now for more.
Speaker 2: She's just finished our firste hundred days at Logitech, new
Speaker 2: ceo coming via here and interested to hear about how
Speaker 2: much how quickly you've had to evolve with AI. Was
Speaker 2: it something that you already had in the locker, you
Speaker 2: were already look.
Speaker 16: In this direction, or something that you were able to
Speaker 16: be nimble on. Yeah, I think we have a very
Speaker 16: nimble team. So a lot has happened, even in my
Speaker 16: first one hundred days there, which has been fun. But
Speaker 16: AI is definitely wanted a tailwinds so that we see for
Speaker 16: our business going forward, along with some other things. Hybrid
Speaker 16: work clearly is a tailwind for us as well as
Speaker 16: gaming really mainstreaming and continuing to grow. But if I
Speaker 16: look at AI, there's really three things we're doing. First
Speaker 16: of all, like everyone else, it's helping internal productivity and
Speaker 16: we're seeing, especially with our software engineers, some really good
Speaker 16: productivity gains from using some of the new AI tools.
Speaker 16: Then when we look at our products, two things into
Speaker 16: software you just mentioned it. We just launched the new
Speaker 16: Logy AI prompt builder, which is a shortcut to chat GPT.
Speaker 16: You know, if you're a big user of chat GPT,
Speaker 16: you have to go in and out, you're toggling between
Speaker 16: what you're doing and chat GPT. This is a shortcut
Speaker 16: so that you can stay in the flow, which is
Speaker 16: really important for our heavy users again, the coders, and only.
Speaker 4: Open a eyes chat GPT. What about the others?
Speaker 16: Okay for now, but I'm sure more will follow. We're
Speaker 16: a company who really partners with everyone, so more will follow. Yeah,
Speaker 16: And then what I'm probably most excited about is actually
Speaker 16: in the video and audio space, where we've for actually
Speaker 16: for quite a while, have been using these large data
Speaker 16: models to really step change the quality of audio and videos.
Speaker 16: So maybe two quick examples. In headphones, our latest generation
Speaker 16: of headphones does two way noise cancelations. So let's say
Speaker 16: we're on the phone, I'm at an airport, You're wearing
Speaker 16: the headphone, and of course it's super annoying because you
Speaker 16: know you're hearing not just my voice, but every announcement
Speaker 16: at that airport. New headphones, our new headphones do two
Speaker 16: way noise cancelation on both sides. So now it's smart
Speaker 16: enough things to the model to recognize my voice, but
Speaker 16: to tune out everything else that's going on around me,
Speaker 16: which really really step changes audio quality.
Speaker 4: We love that.
Speaker 16: On the video side, we just launched this new video
Speaker 16: conferencing tool for offices called Site. It's a camera that
Speaker 16: you set in a large meeting room. I'm sure you've
Speaker 16: been in meetings. There's twelve of you on one side,
Speaker 16: one poor guy on the other side on the screen.
Speaker 16: He's of course left out. This acts like a intelligent
Speaker 16: producer in the room. It swivels around to focus on
Speaker 16: the right person. But again also audio, it swivels to
Speaker 16: you when you're speaking, but not when you're opening a
Speaker 16: packet of crisps, which is quite important.
Speaker 2: I'm afraid I did go away.
Speaker 3: No, really, I think we run out of time. But
Speaker 3: what I was just going to say is like, gaming
Speaker 3: still a thirty year business and as we reflected on,
Speaker 3: it's really hard out there. Just ten seconds sum up
Speaker 3: the environment.
Speaker 16: Yeah, we think gaming is a real tailwind for US.
Speaker 16: Gaming was up eight percent for US in the last quarter.
Speaker 16: We think the future of gaming is really great.
Speaker 4: Log Tech CEO had like a favor. We wish I
Speaker 4: had more time with you. Thank you for stopping by
Speaker 4: while you're on your In New.
Speaker 3: York, ride sharing company Lift reported first quarter results and guidance.
Speaker 3: The beat investors expectations really send me the shares of
Speaker 3: the company higher. Joining us now is the Lift CEO
Speaker 3: David Rischer on set in San Francisco. There was something
Speaker 3: interesting that you said, which is you made improvement in
Speaker 3: both rider retention and new riders, and you've made some
Speaker 3: progress in Canada. But actually I wanted more specifics on
Speaker 3: what you did to achieve that.
Speaker 17: Yeah, so I'd break it down like this. First of all,
Speaker 17: it's good to be here. The second of all, I
Speaker 17: break it down like this. First you got to get
Speaker 17: the basics. Rate we call it ride shair perfection. That's
Speaker 17: all a pricing rate, paying drivers right, picking you up fast,
Speaker 17: our ETA is that's what we call how fast we
Speaker 17: pick you up are faster they've been in four years.
Speaker 17: So those are the basics. Once you do that, then
Speaker 17: you can build on top of that. Then you can
Speaker 17: do things like innovations around how fast can.
Speaker 1: We pick you up for the airport, for example.
Speaker 17: One of my favorite example, I think last time you
Speaker 17: and I talked, we had just rolled out this on
Speaker 17: time pickup promise, and now less than one point five
Speaker 17: percent of people are being picked up so late that
Speaker 17: we have to give them the one hundred bucks. So
Speaker 17: after the basics, then you innovate, and then you partner
Speaker 17: with other people. We've got great partnerships with Chase, with
Speaker 17: Delta and others. You put all those things together and
Speaker 17: it's a great combination. It's work really well.
Speaker 2: Oh, let's go in on the B to B partnerships, David,
Speaker 2: Because I know that you are mobility first, but you
Speaker 2: look at Uber and instacart yesterday.
Speaker 4: What other partnerships do you have in mind?
Speaker 17: So I probably won't be able to speculate on new partnerships,
Speaker 17: but I can tell you this. You know, I spent
Speaker 17: in my prior career a lot of time in Africa.
Speaker 17: And now you're asking where's this going, But the answer
Speaker 17: is in a lot of countries in Africa, there's this
Speaker 17: great expression, if you want to go fast, you go alone,
Speaker 17: but if you want to go far, you go together.
Speaker 1: So you know, as I say.
Speaker 17: Delta Amazon as a partner, we pick up some of
Speaker 17: the folks at distribution centers linked in as a partner,
Speaker 17: we actually they overran their parking lot when people came
Speaker 17: back to work, and so we help people get back
Speaker 17: to work. Delta sky Miles, of course you can get
Speaker 17: sky miles, but also we help move their flight crews around,
Speaker 17: particularly in early morning hours. These are partnerships that they're
Speaker 17: Chase with Sapphire. They're really deep partnerships. And when you
Speaker 17: really go deep with someone, you know, it's almost like
Speaker 17: a relationship. You can find all sorts of amazing things to do.
Speaker 3: Those are the groups of people you're moving And as
Speaker 3: you know, I spend a lot of time thinking about
Speaker 3: how people move from me to be I want to
Speaker 3: go back to ROBOTAXI. Tesla will show us a robo
Speaker 3: tax in August, and your competitor Uber has this relationship
Speaker 3: with Weimo. I don't think you have a formal relationship.
Speaker 3: But if Tesla comes to market, you must be thinking
Speaker 3: about that long term.
Speaker 17: Yes, but so first robotaxis or let's just say a
Speaker 17: time of his vehicles are going to happen.
Speaker 1: There's no question here in San Francisco. They're happening. You
Speaker 1: see them on the street. But we have to think
Speaker 1: about it this way.
Speaker 17: For someone's got to make the tech, then someone's got
Speaker 17: to build the car, then someone's got to own the car,
Speaker 17: and someone's got to run the network. Right, these are
Speaker 17: four different pieces of business that people have to do.
Speaker 17: We run the network and it's a very expensive, very
Speaker 17: expansive network that we run every single day, two million.
Speaker 1: Rides a day.
Speaker 17: Now, if we need to incorporate and of course we
Speaker 17: will autonomous vehicles into that, that's great, that's fantastic. It'll increase,
Speaker 17: you know, supply, and increase the number of different ways.
Speaker 17: But I don't really look at an initiative like theirs
Speaker 17: and think it words me. I think that's really interesting.
Speaker 17: It's going to maybe help expand the market. And I
Speaker 17: would say for them, gosh, that's a lot to take
Speaker 17: on at once, and so you know, we'll see, we'll
Speaker 17: see how that goes.
Speaker 2: David, innovation was what you're just talking about. Would you
Speaker 2: ever reconsider innovation in taking more than just people but
Speaker 2: food but groceries.
Speaker 17: You know, our real focus is on moving people around
Speaker 17: and in specific getting them out of their house. And
Speaker 17: this is where I get a little philosophical. If you
Speaker 17: read any of this of articles about kind of the
Speaker 17: health of our nation. We talk a lot about sort
Speaker 17: of political divide, but there's also just a tremendous amount
Speaker 17: of loneliness and people staying at home too much and
Speaker 17: being disconnected from their friends and their family.
Speaker 1: And so forth.
Speaker 17: So I'd say that really is going to be our focus.
Speaker 17: It doesn't mean that, of course, we also get people
Speaker 17: out on bikes, you know.
Speaker 1: I were just talking.
Speaker 17: You've got a great bike system in New York among
Speaker 17: other places, so that's important as well. But I really
Speaker 17: think getting people out and about is really our focus,
Speaker 17: and then we can partner for other things to the
Speaker 17: extent that is important to customers.
Speaker 3: David Our Bloomberg Intelligence, and this man Deep Singing and
Speaker 3: I were going through your numbers and trying to see
Speaker 3: if it proved you'd taken market share from Uber. Dara
Speaker 3: kosh Rashahi is coming up next after we've gone off
Speaker 3: on the next program with Bloomberg's Emily Chang. What's your
Speaker 3: message for Dara in terms of whether he should be
Speaker 3: looking over his shoulder in the progress you are making.
Speaker 1: You know, it's so funny.
Speaker 17: People love, of course, to talk about this sort of
Speaker 17: head to head thing. I think our competition is people
Speaker 17: staying at home. That's our competition. I want more people out,
Speaker 17: I want them connecting.
Speaker 1: With other folks.
Speaker 17: I think it's just a much more interesting way to
Speaker 17: run of business than to sort of always focus on
Speaker 17: your competitor.
Speaker 1: You know.
Speaker 17: Look, they'll go through their ups and downs in their quarters.
Speaker 17: So he's got a loom in his mind. It's fine
Speaker 17: ask him about all the different things he's got in
Speaker 17: his mind, and we're just going to focus on our
Speaker 17: riders and drivers.
Speaker 4: On your mind.
Speaker 2: Gen Z, women, corporate travelers, who's getting in your cars,
Speaker 2: who's riding your bike?
Speaker 17: David, Well, so a lot of women are I'm glad
Speaker 17: you brought that up. Of course, we have women plus Connect,
Speaker 17: which I'm so so proud of. One of the great
Speaker 17: quotes I heard from a friend recently is when he
Speaker 17: said he was actually talking to his girlfriend and he said,
Speaker 17: why do you like this women plus connect rider driver
Speaker 17: connection on Lift and she said, look, I can finally
Speaker 17: take a nap in Ride Shair. I can finally take
Speaker 17: a nap, which I think is so profound. We've had
Speaker 17: something like twenty thousand new women joined the platform on
Speaker 17: the driver side just since we've started the program.
Speaker 1: So super important. I'll tell you another thing that's really interesting.
Speaker 1: We're seeing.
Speaker 17: Of course, commute is happening, but also party time. People
Speaker 17: really are getting out. It's after nine or after five
Speaker 17: o'clock and it's going great.
Speaker 4: I am here for party time.
Speaker 2: David Richer, CEO, thank you so much for your time today.
Speaker 4: We appreciate it. Meanwhile, that does it for this edition
Speaker 4: of Bloomberg Technology Ed. We've got a party tomorrow, a.
Speaker 3: Big party for Bloomberg Technology Live, but a big show
Speaker 3: to recap. Check out the pod, putting it on Apple, Spotify.
Speaker 3: iHeart and of course all the Bloomberg platform's big thank
Speaker 3: you to everyone that listens to their podcast and the
Speaker 3: way to work maybe in a lift or Reneuber from
Speaker 3: San Francisco, New York. This is Bloomberg