Speaker 1: Bloomberg Audio Studios, podcasts, radio news from the heart of
Speaker 1: where innovation, money and power collide in Silicon Valley and beyond.
Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2: Live from New York.
Speaker 3: I'm Tim Stenoveek and I'm Jackie Devalas in San Francisco.
Speaker 3: This is Bloomberg Technology Now coming up. US President jd
Speaker 3: Vance blasts Europe, accusing the region's leaders of undermining democratic
Speaker 3: values and taking aim at the blocks attempt to regulate
Speaker 3: hate speech and misinformation in media online. Plus, we are
Speaker 3: joined by the CEO of Data bricks on the company's
Speaker 3: AI focused partnership with SAP and a look at Elon
Speaker 3: Musk's empire and how some of his companies hired undocumented
Speaker 3: workers to build factories. Let's also take a look at
Speaker 3: those shares of Meta they're up on the day and
Speaker 3: this as the company is pushing into augmented reality NAI
Speaker 3: and has identified its next big bet, AI powered humanoid robots.
Speaker 3: Let's get more on this with Bloomberg's Mark.
Speaker 4: German, who joins us now.
Speaker 3: Mark, humanoid robots sound like something out of a sci
Speaker 3: fi movie. What is Meta's vision for this venture? Here
Speaker 3: and how much are they spending to do it?
Speaker 5: So Meta wants to own this still nascent humanoid market. Right,
Speaker 5: These are home robots that can do chores for you,
Speaker 5: maybe fold laundry, carry a glass of water, bring something
Speaker 5: for you up the stairs. You've seen Tesla get into
Speaker 5: this game with optimists, We've seen Boston Dynamics with Spot.
Speaker 5: Other companies like Apple and Google Deep Mind or making
Speaker 5: investments here. But Meta wants to be the android or
Speaker 5: qualcom of the humanoid industry, empower the underpinnings, the software,
Speaker 5: the hardware, the artificial intelligence, the sensor stacked the compute
Speaker 5: for the whole industry. So they're talking to several partners,
Speaker 5: including Unitry. They're talking to a company called Figure Ai,
Speaker 5: and they want to power this. And today they're starting
Speaker 5: up a new division run by the former CEO of
Speaker 5: GM's Crews, Mark Whitten. They're going to hire about one
Speaker 5: hundred people for their robotics field and their plan is
Speaker 5: to try to own this market and eventually maybe even
Speaker 5: make a humanoid robot of their own.
Speaker 2: Mark is the idea here that they make money on
Speaker 2: the hardware, the software. At the end of the day,
Speaker 2: how is this a company How does this help the
Speaker 2: company make more money selling US ads?
Speaker 5: I mean, Meta is investing billions of dollars in artificial
Speaker 5: intelligence and augmented reality, and those are two core technologies
Speaker 5: that are also useful in humanoid robots. Right, this technology
Speaker 5: could be applied to humanoids. They're spending sixty five billion
Speaker 5: dollar on R and D investments across twenty twenty five,
Speaker 5: so a portion of that will now go to humanoid robots.
Speaker 5: And how they can make money from this one day
Speaker 5: obviously is selling it to consumers, but sooner they can
Speaker 5: make money on becoming the platform right and licensing their
Speaker 5: technology parts of it open source to third party partners.
Speaker 6: Right.
Speaker 5: Meta believes that the hardware stacks are pretty well done
Speaker 5: right now by the third party humanoid manufacturers.
Speaker 7: Right.
Speaker 5: Where they see a step down is in the AI
Speaker 5: and the software, and they believe with Loma they can.
Speaker 7: Fill that gap.
Speaker 4: Mark.
Speaker 3: What has the company learned from its reality labs, prior
Speaker 3: ventures and headsets for example? What does it plan to
Speaker 3: do differently this time around with humanoid robots?
Speaker 5: Well, I don't think they're going to do much differently
Speaker 5: right other than I think they're starting to hire a
Speaker 5: little bit more slowly than they have with the augmented
Speaker 5: reality metaverse push.
Speaker 8: Right.
Speaker 5: So they're hiring about one hundred people this year, right,
Speaker 5: That seems like small potatoes compared to the number of
Speaker 5: people they hired at the height of COVID, at the
Speaker 5: height of building out the metaverse and mixed reality.
Speaker 7: Right.
Speaker 5: So they're going to go a little bit more slowly here,
Speaker 5: maybe invest a little bit less money at the get go,
Speaker 5: but I think their ambition is still the same.
Speaker 7: What is that, Moonshaw?
Speaker 5: What is that long term area that we can own
Speaker 5: as a company.
Speaker 2: Bloomberg's Mark German and joining us out there in Los Angeles. Mark,
Speaker 2: always good to see you. Congratulations on this scoop as
Speaker 2: well well. Earlier today we heard from Vice President JD
Speaker 2: Vance who spoke at the Munich Security Conference. Take a
Speaker 2: listen to what he had to say.
Speaker 9: The threat that I worry the most about visa the
Speaker 9: Europe is not Russia, it's not China, it's not any
Speaker 9: other external actor.
Speaker 7: And what I worry about is.
Speaker 9: The threat from within the retreat of Europe from some
Speaker 9: of its most fundamental values, values shared with the United
Speaker 9: States of America.
Speaker 2: Van's called out Europe's regulation of big tech, saying it's
Speaker 2: out of control and harming free speech. Van cited incidents
Speaker 2: from Germany to Sweden to the UK of what might
Speaker 2: be called woke policies as evidence of how Europe has
Speaker 2: lost its way. Bloomberg's Mike Shepherd joins us now to
Speaker 2: discuss Mike, how did this message? How did this speech
Speaker 2: land with the audience in Munich?
Speaker 10: Well, it, Philip with flat because when you consider the
Speaker 10: context of the Munich Security Conference, you have to think
Speaker 10: about what's happened earlier this week we saw JD. Vance's boss,
Speaker 10: President Donald Trump make this sudden outreach to Vladimir Putin
Speaker 10: and Russia to try to negotiate an end to the
Speaker 10: Ukraine War. And Ukraine really did not come up very
Speaker 10: much in the speech at all from Vance, and overall
Speaker 10: it was an elbows out address. He began his remarks
Speaker 10: by saying basically that there is a new sheriff in town,
Speaker 10: and he really tried to suggest that Europe need to
Speaker 10: fall much more into line with his and Donald Trump's
Speaker 10: brand of politics, especially when it comes to the tech
Speaker 10: industry and regulation of online content and regulation of AI.
Speaker 10: There's a thread between the remarks we heard today in
Speaker 10: Munich and what he said earlier this week in Paris
Speaker 10: where he addressed the artificial intelligence summit convened by French
Speaker 10: President Manuel mccrom. The idea from Vance there was to
Speaker 10: talk about overregulation of that sector too and say that
Speaker 10: that is stifling innovation. But again he also brought up
Speaker 10: this whole question of moderation and the risk of censorship
Speaker 10: through artificial intelligence.
Speaker 3: Mike Vice President Vance also seemed to suggest that the
Speaker 3: annulment of the Romanian election in December was somehow uncalled for,
Speaker 3: despite that there was evidence of Russian interference.
Speaker 4: How did those commons land well?
Speaker 10: Again, this is another remark that he made during his appearance.
Speaker 10: It really did not sit well with the audience, especially
Speaker 10: the Romanian delegation. There's ample evidence that Russia had tried
Speaker 10: to interfere with the results, which led to a far
Speaker 10: right candidate pulling off a surprising victory. And the concern
Speaker 10: about Russian interference with and tampering with domestic affairs of
Speaker 10: its closest neighbors is a constant concerning that we have
Speaker 10: heard from Baltic officials that we have interviewed. You know,
Speaker 10: I've spoken with the foreign ministers of Lithuania and Latvia
Speaker 10: in the past year, and this is something very much
Speaker 10: at top of mind, and they recognize the risk of
Speaker 10: these kinds of interference operations. And it is a sensitive
Speaker 10: point for Vance and the Republican Party too because dating
Speaker 10: back to twenty sixteen, we saw Donald Trump's election somehow
Speaker 10: tied to a Russian interference operation here as well. So
Speaker 10: this is something he is trying to diminish. And don't forget,
Speaker 10: Jade Vance is not just aiming this speech at the
Speaker 10: audience Erah Munich. He has an audience back here in
Speaker 10: the US that he's trying to satisfy, and that is
Speaker 10: his allies, Donald Trump's allies, and they are looking for
Speaker 10: him to have this really strong approach towards Europe. And
Speaker 10: even if the speech didn't land well in the room there,
Speaker 10: it very likely landed well with allies here who want
Speaker 10: to see JD. Vance take this forceful role in propelling
Speaker 10: the maga politics of Donald Trump for the future.
Speaker 3: That's Bloomberg's Mike Shephard, appreciate you joining us. Shares of
Speaker 3: Airbnb are surging today as the company posted an upbeat
Speaker 3: forecast for the first three months of twenty twenty five,
Speaker 3: citing continued strong demand following its holiday strength.
Speaker 4: Now for more, Bloomberg's Natalie Lung joins us.
Speaker 3: Now, Natalie, help us understand this because gigagonomy, peers, Lift
Speaker 3: and Uber issued more muted forecasts. But what's driving Airbnb's
Speaker 3: optimism here?
Speaker 6: Yeah, they had a very good fourth quarter during the
Speaker 6: holiday season where US airline carriers as well as online
Speaker 6: travel peer Expedia also talked about, you know, strong international
Speaker 6: travel and in particular, airbnbsaw acceleration of growth in all
Speaker 6: of the regions that's operating in, including the US, where
Speaker 6: there was some slowing demand last year, but it seems
Speaker 6: like it's really back in the later part of the year.
Speaker 5: Natalie.
Speaker 2: What's going on with the company's experience as part of
Speaker 2: the business and the investment that they talked about happening there?
Speaker 6: Yeah, the company told us that they're going to be
Speaker 6: spending two hundred million to a two hundred and fifty
Speaker 6: million this year into new initiatives, including the relaunch of experiences.
Speaker 6: The CEO talked a bit about how in the past
Speaker 6: when they launched it, maybe havn't cross marketed products enough.
Speaker 6: So let's say, when you're staying in staying in a
Speaker 6: particular city that they don't push or promote their related
Speaker 6: experience as much, and so the relaunch will be better
Speaker 6: at that.
Speaker 2: All right, Bloomberg's Natalie Lung, thanks so much for joining
Speaker 2: us on Airbnb surging. Let's bring in Tiffany Wade, senior
Speaker 2: portfolio manager at Columbia Threadnil Investments. They've got about six
Speaker 2: hundred and forty five billion dollars in assets under management. Tiffany,
Speaker 2: I want to start with Palo Alto Networks and get
Speaker 2: your thoughts there, because we're seeing shares on a little
Speaker 2: more than four percent as we speak. The company did
Speaker 2: report disappointing earnings outlook, but for To net and Checkpoint
Speaker 2: posted strong results. What's going on with Palo Alto.
Speaker 11: I think across the cybersecurity space we are seeing pretty
Speaker 11: strong trends. The last couple of quarters, we saw some
Speaker 11: customer rationalization of spending. I think we're seeing that coming
Speaker 11: to an end, and we're starting to see sales growth
Speaker 11: pick up again. Palo Alto obviously down today, for the
Speaker 11: most part, the metrics were pretty good that they reported
Speaker 11: some of the key metrics that custo that investors look at,
Speaker 11: recurring revenue was very strong in the quarter, and they
Speaker 11: beat numbers for the most recent quarter that they provided. However,
Speaker 11: free cash flow guidance looks like it's a little bit
Speaker 11: second half loaded for the year, which I think is
Speaker 11: disappointing some people. But I would say I think the
Speaker 11: other important thing that we're positive on is that over
Speaker 11: the last couple of quarters, Palo Alto was adopted a
Speaker 11: platform approach to product sales, which seems to be resonating
Speaker 11: with customers, and I think we saw more evidence of
Speaker 11: that this quarter, and this helps customers consolidate spending, which
Speaker 11: is a trend that we've seen for the last couple
Speaker 11: of quarters. But I also think for the longer term,
Speaker 11: the trend of increasing cyber threats is not slowing down,
Speaker 11: and Palo Alto will play an important role in helping
Speaker 11: their companies and their customers secure their data and also
Speaker 11: their AI models, because we are seeing companies face traditional
Speaker 11: security threats such as data breaches, but new threats driven
Speaker 11: by AI, such as more sophisticated threats or enhanced security
Speaker 11: threats that are designed to disrupt output for an AI model.
Speaker 3: Tiffany, let's stick with AI in particular, some of the
Speaker 3: big tech giants that have made some pretty wide comments
Speaker 3: about infrastructure, R and D talent investments. How discerning our
Speaker 3: investors when it comes to this kind of spend. Do
Speaker 3: they care where it's going, especially now off the news
Speaker 3: that Meta is building a humanoid robot, which is surely
Speaker 3: to take quite a bit of investment there.
Speaker 11: Yeah, I think investors are definitely keeping a very close
Speaker 11: eye on the amount of spending that the large companies
Speaker 11: like the hyperscalers are putting into AI, and over the
Speaker 11: course of the next couple quarters, we're going to want
Speaker 11: to see returns on those investments. For the cloud providers, specifically,
Speaker 11: they're spending a significant amount of CAPEX in investing in
Speaker 11: AI processing capacity. I think in order to stay ahead
Speaker 11: of trends. Amazon's CEO Jeff Bezos said recently that he
Speaker 11: thinks that we'll see a world where virtually every app
Speaker 11: has generative AI in it, and they need to invest
Speaker 11: to stay ahead of this. So the cloud providers are
Speaker 11: offering a variety of AI models which are pre trained
Speaker 11: for use cases, but they also help customers tune a
Speaker 11: model or adapted to specific needs. And they're also offering
Speaker 11: tools and services like secure data storage and data management
Speaker 11: that make it easier for their customers to handle the
Speaker 11: large data sets required for AI models.
Speaker 7: And I think that all.
Speaker 11: Of these services should see additional demand with faster adoption
Speaker 11: of AI. And I think what we'll see is these
Speaker 11: companies are becoming kind of the toll roads for AI,
Speaker 11: where they're supplying the cloud, the tools some of the developers,
Speaker 11: and the processing capacity that their customers need to enable
Speaker 11: other companies to develop and deploy AI.
Speaker 3: We've also seen some comments coming from Washington that the
Speaker 3: government plans to be more supportive when it comes to
Speaker 3: investments in artificial intelligence. How much of that initial enthusiasm
Speaker 3: from President Trump's Stargate venture being announced has worn off
Speaker 3: by now?
Speaker 11: I think that that's probably the Stargate venture is a
Speaker 11: flashy announcement, but I think it's more of the same
Speaker 11: of what we're seeing. There was already a significant amount
Speaker 11: of capital investment going into infrastructure spending. Formalizing announcements with
Speaker 11: multiple companies investing is a great news story, and maybe
Speaker 11: some of the spending, but I think a lot of
Speaker 11: the spending was going to happen anyways over the next
Speaker 11: three to four years and over the next decade.
Speaker 2: Are you not at all concerned about CAPEX spending from
Speaker 2: the hyperscalers from any members of the mag seven being
Speaker 2: too much? Are you overspending?
Speaker 11: I don't think they're overspending right now. A lot of
Speaker 11: the spending from the mag seven companies is going to
Speaker 11: their own use cases where they're actually seeing a return
Speaker 11: on those investments in terms of better advertising models or
Speaker 11: better offerings to customers. But a lot of the spending
Speaker 11: is also going to support their customers who are trying
Speaker 11: to develop AI tools that they're going to sell in
Speaker 11: the future. So I don't think that the I wouldn't
Speaker 11: call it overspending at this point. And I do think
Speaker 11: that the adoption curve for AI is probably going to
Speaker 11: pick up very significantly from here, as we do see
Speaker 11: costs coming down very significantly, and that's going to fuel
Speaker 11: more demand for the services that the cloud providers are
Speaker 11: are providing.
Speaker 2: Well, speaking of costs coming down, the news that we
Speaker 2: got from deep Seek a little over two weeks ago
Speaker 2: or three weeks ago at this point, does that mean that,
Speaker 2: indeed these companies have become more efficient when they're training ms,
Speaker 2: for example, that they won't need all the CAPEX that's
Speaker 2: been invested.
Speaker 11: That's definitely a concern in the market, and you saw
Speaker 11: that in the Monday after the deep Seek R one
Speaker 11: model announcement. I don't think that we're going to I
Speaker 11: think what we're seeing is that the deep Seak announcement
Speaker 11: was really highlighted the efficiency of model development already. So
Speaker 11: costs for model development from the established US players like
Speaker 11: open ai or Anthropic have been coming down almost as
Speaker 11: quickly as we saw in the deep Seek model. So
Speaker 11: I think it's really highlighted how efficient the models are becoming,
Speaker 11: how fast the technology improvement is. And if we need
Speaker 11: less processing power per computation or for inferencing instance, I
Speaker 11: don't think that that leads to a lesser demand for
Speaker 11: processing capacity. I think that means the adoption picks up faster.
Speaker 7: So if you think.
Speaker 11: About the adoption of cell phones, as they got cheaper,
Speaker 11: more people bought them, you didn't end up needing to
Speaker 11: make less cell phones.
Speaker 3: That's Tiffani Wade from Columbia Thread Needle Investments, thanks for
Speaker 3: joining us.
Speaker 4: Coming up will be.
Speaker 3: Joined by the CEO of AI startup Times on their
Speaker 3: big funding round. We're also watching shares of draft kings
Speaker 3: this as the Boston based company reported fourth quarter earnings
Speaker 3: that eat expectations. Also boosted its sales guidance for the
Speaker 3: current year to at least six point three billion dollars,
Speaker 3: in the sign that the company is overcoming concerns about
Speaker 3: a tough market for sports betting operators. This is Bloomberg
Speaker 3: on today's AI and Action. We're looking at AI software
Speaker 3: startup times. After Goldman Sachs Growth Equity Union led at
Speaker 3: one hundred and twenty five million dollar funding round for
Speaker 3: the company at one point three billion one point one
Speaker 3: to three billion dollar valuation. Let's bring in CEO Owen
Speaker 3: Henshee Owen, Welcome to the Unicorn club. How does it
Speaker 3: feel to finally reach this smilestone and how do you
Speaker 3: plan to put this money.
Speaker 12: To use f person foremost, Jackie, thank you for having me.
Speaker 12: Happy Valentine's Day. Yeah, it's a great question. We're really
Speaker 12: proud and excited to have raised this capital. I think
Speaker 12: where you'll see us invest is in the areas where
Speaker 12: we've seen kind of outsized traction over the last eighteen months.
Speaker 12: So as a startup, we've been around for about seven
Speaker 12: years now. What it's really in the last kind of
Speaker 12: eighteen months where we've experienced a lot of accelerated growth
Speaker 12: as we brought these new AI capabilities to our customers.
Speaker 12: And so we'll continue to invest in R and D.
Speaker 12: We'll hire about one hundred people this year and that
Speaker 12: will be all to support the growth and demand that
Speaker 12: we're seeing. We're now doing about a billion automated actions
Speaker 12: on behalf of our customers every single week, and we
Speaker 12: expect that growth to accelerate if anything.
Speaker 2: Oh and as Jackie mentioned, one hundred and twenty five
Speaker 2: million dollar funding round, it increases the valuation by eighty percent,
Speaker 2: so certainly a big round when it comes to your company.
Speaker 2: I'm trying to get an understanding for how difficult it
Speaker 2: was to raise money in this environment. How long did
Speaker 2: it take?
Speaker 7: Was it easy?
Speaker 2: Was it tough?
Speaker 12: I would say it's never easy, you know, raising capital,
Speaker 12: regardless of the markets is never easy. I would say
Speaker 12: that the reason we were able to raise this round,
Speaker 12: and it's only nine months since our previous fundraise, was
Speaker 12: just the success we've had in the market over the
Speaker 12: last twelve months. And so as I say, and you know,
Speaker 12: we've increased the number of automated actions, we're performing ten
Speaker 12: in eighty months. We've grown our active users by about
Speaker 12: two hundred and fifty percent in the last twelve months.
Speaker 12: And so when you're kind of posting those numbers and
Speaker 12: you're adding the level of value we are to our customers,
Speaker 12: it tends to attract a lot of investor attention. And
Speaker 12: so we find that our customers and the customer love
Speaker 12: that we generate, that's really the reason we've been able
Speaker 12: to raise at this kind of valuation.
Speaker 3: Oh and let's talk about some of those customers, because
Speaker 3: a lot of European startups kind of get a bad
Speaker 3: rap for not being kind of the big heavy hitters
Speaker 3: that you see coming out of the US and Silicon Valley.
Speaker 3: Where is your customer base coming from?
Speaker 7: Yeah, it's a great question.
Speaker 12: So although we're headquartered here in Dublin, we also have
Speaker 12: offices in San Francisco, Boston, and in Australia, and so
Speaker 12: we very much consider ourselves a global company. About seventy
Speaker 12: five percent of our customers are in North America and Canada.
Speaker 12: We've got about twenty five percent in Europe. But it's
Speaker 12: across a variety of different segments, from commercial to enterprise,
Speaker 12: to fed to strategic. I would say that the their
Speaker 12: initial sweet spot for talents was in those high grow
Speaker 12: software companies so coin based, data Break, Snowflake. But since
Speaker 12: then we've expanded a lot into your kind of more
Speaker 12: traditional industries confectionery like Mars, but also in fed and
Speaker 12: strategic as well.
Speaker 3: We're expecting a much friendlier federal Trade Commission here in
Speaker 3: the United States and something that might open up the
Speaker 3: doors to more m and A. You operate in a
Speaker 3: space that could potentially see some of that uptick. Have
Speaker 3: you thought about how far you want to take this?
Speaker 3: Do you see yourself as a public company or perhaps
Speaker 3: sewing down the line.
Speaker 7: Yeah, it's a great question.
Speaker 12: I think what we love to do as a company,
Speaker 12: honestly is build product that our customers love, make our
Speaker 12: customers outrageously successful. And that's what we're going to be
Speaker 12: focused on for the next kind of like short and
Speaker 12: medium term. And I think if we do that, and
Speaker 12: then I think we'll have optionality towards the outcome. But
Speaker 12: right now, we're heads down focused on building a great product.
Speaker 2: Owen Henchy, time CEO, joining us from Bublin this afternoon.
Speaker 2: Thank you so much for joining us. To appreciate it.
Speaker 2: Welcome back to Bloomberg Technology. I'm Jim Stenoviek in.
Speaker 3: New York and I'm Jackie Devalis in San Francisco. SAP
Speaker 3: and Data Bricks are launching a new product combining SAP's
Speaker 3: business data with data Bricks AI platform for more. Ali Gotseed,
Speaker 3: CEO of Data Bricks, joined us. Now, Ali, you're going
Speaker 3: to invest two hundred and fifty million dollars. You say
Speaker 3: you're expecting a billion dollars in revenue. Talk to us
Speaker 3: about how this partnership is going to differentiate you from
Speaker 3: what's already on the market.
Speaker 13: Yeah, so this is you know, we've only had one
Speaker 13: partnership this big, and that was ten years ago with Microsoft.
Speaker 13: So we think this is going to be game tending
Speaker 13: for the industry. So when we talk to our customers,
Speaker 13: we say, oh, we have an amazing platform.
Speaker 7: It's great. They always say, but what about the SAP data.
Speaker 13: Because SAP's data is the most important data in the world.
Speaker 7: It's what's powering all the leaders, all the.
Speaker 13: Financial systems of over ninety percent of fourteen five hundred,
Speaker 13: and this data has sort of been locked away and
Speaker 13: people can't access it.
Speaker 7: So what the partnership means is that anyone that goes
Speaker 7: and now.
Speaker 13: Buys SAP data backs from SAP, will get all this
Speaker 13: data accessible right there and they can start building a
Speaker 13: genetic systems AI and so on. So that's why we
Speaker 13: saw bullish on it, and that's why we earmarked the
Speaker 13: quarter a billion dollars, as you said, from our ten
Speaker 13: billion dollar fundraise that we just did.
Speaker 3: You know, another important partner of yours is Microsoft, and
Speaker 3: it's increasingly becoming a competitor. It said that it's using
Speaker 3: its products. It's fabric. It's going quickly. What's the pitch
Speaker 3: to use data bricks rather than fabric.
Speaker 8: Yeah.
Speaker 13: Look, Microsoft's a great partner, but still remains a great partner.
Speaker 13: They're actually investor in data bricks as well. So is
Speaker 13: by the way, aws so is also a Google. But
Speaker 13: there's competition. As you pointed out, they have sometimes their
Speaker 13: own products. The great thing about SAP Data bricks is
Speaker 13: that you have now all the SAP data in it
Speaker 13: there and you won't find that in the other offerings,
Speaker 13: So they don't the other offerings out there in the
Speaker 13: market will not be there with all the business data
Speaker 13: that SAP has, and it's been enriched with all the semantics.
Speaker 7: So what I mean by that is this is not
Speaker 7: just data on the.
Speaker 13: Financial ledger of a company, it's also the travel system.
Speaker 7: Because SAP has.
Speaker 13: You know, a product called concur, they have success factors
Speaker 13: for HR, they have a REVA for procurement. All this
Speaker 13: data has been combined and enriched and it's just available
Speaker 13: in spe Data bricks. But that's the big difference between
Speaker 13: using SAP Data Bricks and using any other data platform
Speaker 13: out there.
Speaker 2: Ali, there's been a huge conversation lately around inference cost
Speaker 2: and I'm wondering, if you've seen inference costs go down,
Speaker 2: what does it mean for data bricks.
Speaker 13: Yeah, inference cost has been going down all the time
Speaker 13: in the last few years, and we have a whole
Speaker 13: research team dedicated to just optimizing the software portion of that.
Speaker 13: There's of course a hardware portion. We don't build hardware,
Speaker 13: but the software portion is actually significant. Two we're seeing
Speaker 13: you know, two and a half to three x boost
Speaker 13: just in the software.
Speaker 7: What does it mean, Well, what it means is that
Speaker 7: it's just much cheaper to.
Speaker 13: Build applications on top of AI. You know, it's kind
Speaker 13: of crazy if you think about if you zoom out,
Speaker 13: what it costs costs less than a dollar to produce
Speaker 13: a million orbs. That's basically three books. You can get
Speaker 13: the AI to produce three novel books for you for
Speaker 13: less than a dollar, So that's what you know, cheaper
Speaker 13: inference means and just just unlocks all these applications on
Speaker 13: pop So that's what we're excited about.
Speaker 7: But for those applications, you need.
Speaker 13: Special data and that's all that's going to matter. And
Speaker 13: the enterprises have all the special data. So the question
Speaker 13: is how do you combine that data AI with that
Speaker 13: special data that they have, and then of course with
Speaker 13: the inference so that you can build these AI applications.
Speaker 2: Well, as we heard from Jackie, you recently closed this
Speaker 2: fifteen billion dollar funding at popping sixty two billion dollar valuation.
Speaker 2: Is that it for fundraising? Is that done?
Speaker 7: Ah?
Speaker 13: Never say never, you know, but it's a significant portant
Speaker 13: that we've raised. Now, I think it's more important for
Speaker 13: us to invest at wisely invested in AI talents, invested
Speaker 13: in building AI systems, invested in goal to market, expanding
Speaker 13: around the world, and we have significant business in Europe
Speaker 13: and in Asia and Latin America, you know, so continuing
Speaker 13: to expand. We're about eight thousand people we want to
Speaker 13: grow very fast. We're still hiring, so that's more focused
Speaker 13: on that.
Speaker 3: But never say never, Ali, We're seeing some reporting coming
Speaker 3: out of our colleagues here on the venture capital team
Speaker 3: that late stage startups are actually kind of struggling to
Speaker 3: get additional funding because of just this dry up in IPOs.
Speaker 3: What's the future for Data Bricks? Is that coming down
Speaker 3: the pike for you?
Speaker 13: Well, I've said many many times we will be a
Speaker 13: public company. There's no doubt about it. So it's not
Speaker 13: a question of if, it's a question of when, you know.
Speaker 13: But the thing is, we're not trying to time the market.
Speaker 13: We're trying to win the market. So that's what we're
Speaker 13: focusing on. We've raised all the funding, now we're going
Speaker 13: to use it. We did this big partnership with SAP
Speaker 13: where we can get all the most important data in
Speaker 13: Data Bricks. Now we want to build AI for our
Speaker 13: customers and make them successful. That's the focus. How do
Speaker 13: we win this market?
Speaker 3: What kind of milestone are you setting for yourself before
Speaker 3: you actually get to the point where you tell investors
Speaker 3: that you're ready to go public, that you're ready.
Speaker 7: We are ready. We could press a button and we
Speaker 7: would be public today.
Speaker 13: It's really sort of a question of what's the priority
Speaker 13: right now and how much benefit do we get out
Speaker 13: of going public this fundraise that we just did, the
Speaker 13: fifteen billion that you just referred to.
Speaker 7: We're also using a large portion of that towards.
Speaker 13: Liquidity for our employees, so you know, we're solving the
Speaker 13: liquidity problem. We're solving investing in you know, our business,
Speaker 13: in our products. So you know, there's not an extreme
Speaker 13: sense of urgency. But we evaluate, you know, every day.
Speaker 13: If it's in our interest, we will go. If not,
Speaker 13: you know, we'll stay private. I do think my guess
Speaker 13: is that we will be public, and it's not going
Speaker 13: to be too far in the distant future.
Speaker 2: How far in the distant future twenty twenty five, twenty
Speaker 2: twenty six, what can you tell us?
Speaker 13: Yeah, I mean I would say the earliest would be
Speaker 13: probably this year, but you know, I think that's unlikely.
Speaker 13: That's that's all I can say. And then, you know,
Speaker 13: but I don't think this is like a five years
Speaker 13: out thing.
Speaker 2: But still, I just want to confirm the option to
Speaker 2: raise more money before going public, if you need it
Speaker 2: is still on the table.
Speaker 13: I mean, look, when we did this fundraise. We weren't
Speaker 13: sure we were there's going to be enough interest. In fact,
Speaker 13: we were you know, maybe we set the price too
Speaker 13: high and there's not going to be enough capital. That
Speaker 13: actually happened to some other late stage companies that tried
Speaker 13: this year or two ago.
Speaker 7: So we're worried about that.
Speaker 13: And we got twice the amount that we wanted to
Speaker 13: raise in interest. You know, we got close to twenty
Speaker 13: billion dollars of interest, and you know, our pro and
Speaker 13: the problem was the investors kept calling me and saying,
Speaker 13: please don't cut me back, let me allocate the full
Speaker 13: amount that I want to put in, let me put
Speaker 13: one billion, let me leave this round.
Speaker 7: So the interest for AI and data is just insane.
Speaker 13: I have never seen anything like it in you know,
Speaker 13: the ten fifteen years I've been doing this. So there's
Speaker 13: a lot of capital out there, but they want to
Speaker 13: invest it towards AI. So you're right, if you're not
Speaker 13: an AI then it might be a completely different story.
Speaker 13: So it's sort of a tale of two different cities,
Speaker 13: you know, the AI companies where there was seems to
Speaker 13: be infinite amount of interest, and then a non AI
Speaker 13: companies where you know.
Speaker 7: There's like it's sort of not great. It stopped growing.
Speaker 13: They don't want to invess, right you know, multiples are depressed,
Speaker 13: so unfortunately it's like that.
Speaker 2: Right now, Ali got Zi Data Bricks CEO. Good to
Speaker 2: see Ali, Thanks so much for joining us. Well, you
Speaker 2: heard Ali mentioned it's kind of this tale of two
Speaker 2: different types of companies, those ones that are AI backed
Speaker 2: and those ones that aren't VC backed. Unicorns, though some
Speaker 2: reaching a tipping point. Over one thousand startups with a
Speaker 2: one billion dollar valuation or higher are struggling to IPO
Speaker 2: and raise funds for more. Bloomberg's Katie Roof joins us. Katie,
Speaker 2: was that surprising to hear from Ali that they just
Speaker 2: have like investors cla to invest more and more money
Speaker 2: or does that make sense because of where they play
Speaker 2: in the market.
Speaker 4: Yeah, I wasn't surprised at all.
Speaker 14: I was well aware that there's a lot of investor
Speaker 14: interests in data bricks, but you know, they are in
Speaker 14: a league of their own. There's a small number of
Speaker 14: these unicorns that are able to raise a lot or
Speaker 14: deck accords in their case, that are able to raise
Speaker 14: a lot of money.
Speaker 4: You know, there are over a.
Speaker 14: Thousand unicorns, maybe over twelve hundred according to CB Insights,
Speaker 14: and the vast majority, especially the ones that aren't AI, are.
Speaker 7: Going through a tough spot.
Speaker 14: According to data reviewed by Karta, about well fewer than
Speaker 14: thirty percent of the unicorns have raised money in the
Speaker 14: last few years, and almost half of those were down rounds,
Speaker 14: which used to be, you know, something that you wouldn't
Speaker 14: do in greener times.
Speaker 3: Katie, what about Zoo's other startups that aren't in a
Speaker 3: league of their own, What sorts of desperate measures are
Speaker 3: they now resorting to.
Speaker 14: So beyond the down rounds, we've seen other things like
Speaker 14: reopening the last round, you know, quietly raising more money
Speaker 14: at the same valuation.
Speaker 4: But then sometimes.
Speaker 14: More desperate things like pay to play rounds, where you
Speaker 14: require investors to you know, pay more money to be
Speaker 14: able to keep their existing stake. There's all sorts of
Speaker 14: different ways that they're getting creative here. Some of them
Speaker 14: are taking on pretty difficult terms. You know, much was
Speaker 14: made of what service Titan did. They took some difficult
Speaker 14: terms from TBG, although in the end they were able
Speaker 14: to go public at you know, above their round. But
Speaker 14: most of them aren't on track to go public. There
Speaker 14: have been very few IPOs in the last few years,
Speaker 14: and so the industry is quietly talking about what's been
Speaker 14: known as what's become known as zombie unicorns. These unicorns
Speaker 14: that are like still there because they have revenue, but
Speaker 14: they can't go public and provide liquidity for their investors.
Speaker 14: No one wants to acquire them at the price for
Speaker 14: their last round, and they're just in a really difficult plot.
Speaker 3: That's Bloomberg's Katie Riff, thanks for joining us. Coming up,
Speaker 3: advertisers return to X. More on that story. Next, this
Speaker 3: is Bloomberg. Social media platform X is seeing a resurgence
Speaker 3: in advertising. The company's revenue jumped over forty percent in
Speaker 3: December compared to a year ago. This as marketers rethink
Speaker 3: their position with the platform as Elon Musk gains newfound
Speaker 3: influence with the US government. More on this. Bloomberg's Kurt
Speaker 3: Wagner joins us. Now, Kurt, how much of this has
Speaker 3: to do with Elon's influence in Washington versus X getting
Speaker 3: better as a platform for mark to be on.
Speaker 8: Yeah, I think the influenced part from Elon as a
Speaker 8: huge factor here, right, because I think if you look
Speaker 8: at what X looks like today versus what it looked
Speaker 8: like six months ago. I don't see a huge difference.
Speaker 8: The marketers that I talk to don't necessarily see a
Speaker 8: huge difference. What has changed is to point out Jackie
Speaker 8: is of course Elon's role within the government, and also
Speaker 8: the fact that X is now outsuing brands that aren't
Speaker 8: advertising on the platform. Right, So, if you're a marketer today,
Speaker 8: you're sitting there going, hey, is it worth spending some
Speaker 8: money on this service or sort of getting in the
Speaker 8: crosshairs of Elon Musk right now given his power, and
Speaker 8: I think some brands are choosing you know that it's
Speaker 8: the time to return for.
Speaker 2: Them at the end of the day, though Kirk, does
Speaker 2: it work? Does it work better than meta platforms? Instagram?
Speaker 2: Does it work better than TikTok?
Speaker 8: As far as advertising goes, I mean it has never
Speaker 8: worked better. It's a different type of ad, right, So
Speaker 8: usually with X or formerly with Twitter, you would be
Speaker 8: doing what's called the brand ad, essentially, you know, the
Speaker 8: digital version of a TV commercial type of thing, and
Speaker 8: you know that could be great if you're going alongside
Speaker 8: the super Bowl or the Grammys or some other major
Speaker 8: news event. You're not really going to drive sales in
Speaker 8: the way that you would on Google or Meta, and
Speaker 8: so it's a different type of AD. It's never performed
Speaker 8: at the same level as those other competitors, which is
Speaker 8: one of the reasons why X and Twitter's business has
Speaker 8: always been significantly smaller than those bigger players.
Speaker 3: Kurt, Now, with that we're seeing this kind of improvement
Speaker 3: on the platform, where does this leave X in the
Speaker 3: broader array of businesses that Elon Musk oversees.
Speaker 8: Yeah, I mean it's always been you know, the most
Speaker 8: maybe culturally important of those, just given the speech factor, right,
Speaker 8: given the fact that Elon's out here commenting on on
Speaker 8: you know, politics and other things that are happening in
Speaker 8: the world, it's still certainly going to be a much
Speaker 8: smaller part of the business than or his empire excuse me,
Speaker 8: than a Tesla SpaceX even XAI. Right, the valuation we're
Speaker 8: seeing that XAI is raised AD is significantly higher than
Speaker 8: X so business wise, it is still a smaller part
Speaker 8: of his portfolio. But again, it's more of the cultural
Speaker 8: and speech elements of this that I think give it
Speaker 8: so much clout within his broader universe.
Speaker 2: Bloomberg' Kurt Wagner to subscribe to the Bloomberg Tech In
Speaker 2: Depth newsletter. Go to Bloomberg dot com slash newsletters. Well,
Speaker 2: let's look elsewhere in Elon Musk's empire. Today's Big Take
Speaker 2: looks at how Tesla and SpaceX both relied on work
Speaker 2: by undocumented immigrants all the while, well, Elon A. Musk
Speaker 2: advocated for a broader crackdout Bloomberg Sarah Fryar joins us
Speaker 2: for more on this. As I mentioned, Sarah, it is
Speaker 2: today's big take. Julia Loves investigation. What did she find?
Speaker 2: What did the Bloomberg News team find about Musk's company's
Speaker 2: reliance on undocumented labor.
Speaker 15: Well, it's really quite stunning.
Speaker 16: I think we are all used to the idea that
Speaker 16: a lot of construction projects, a lot of agriculture projects,
Speaker 16: a lot of cleaning projects, do you undocumented labor? What's
Speaker 16: what's different here is evil and must proximity to that
Speaker 16: issue and advocacy against undocumented immigrants, of working with Donald
Speaker 16: Trump on policy in that area. Tweeting started posting on
Speaker 16: Ked about it constantly. This is this is a huge
Speaker 16: area of interest and concern for Musk, and yet Julia
Speaker 16: Love spoke with several undocumented workers who have helped be
Speaker 16: part of must expansion in Austin with his gigafactory and
Speaker 16: with SpaceX. So what they have spoken about is whether
Speaker 16: they're working on on facilities, on construction, on parts of
Speaker 16: expanding and maintaining those factories. It has been a critical
Speaker 16: part of the.
Speaker 17: Workforce for the gigafactory and for some SpaceX projects. So
Speaker 17: we have been talking to those to those people and
Speaker 17: trying to understand their role. Julia spoke with about a
Speaker 17: dozen people.
Speaker 3: Sarah, what did the company have to say about what
Speaker 3: you guys found in the reporting? Are they improving practices
Speaker 3: in any way?
Speaker 15: We have not gotten a response yet from the company,
Speaker 15: although of course, as we as journalists always do, we
Speaker 15: ask for comment. We have not heard any response, but
Speaker 15: we worked very hard to Julia Love worked very hard
Speaker 15: to verify everything that she was.
Speaker 3: Told Bloomberg Sarah Fryer, thanks for joining us. Apple and
Speaker 3: Alphabet are restoring TikTok to its app stores after US
Speaker 3: Attorney General Pam Bondi sent a letter to two companies
Speaker 3: assuring that a band wouldn't immediately be enforced for more.
Speaker 4: Bloomberg's Alex joins us.
Speaker 3: Now Alex this has been quite the tit for tat
Speaker 3: ever since the ban was initially passed. This is kind
Speaker 3: of something that is underpinned by federal legislation. So even
Speaker 3: though it's momentarily brought on, where does this leave the
Speaker 3: fate of TikTok's future.
Speaker 18: I think, Jackie, that it can seem like this is
Speaker 18: a huge win. I do think that it is a
Speaker 18: big win in sort of this longer saga that TikTok
Speaker 18: is now back online in both the Apple and Google
Speaker 18: app stores. However, it is definitely not the end of
Speaker 18: the road for the platform. Donald Trump has essentially stopped
Speaker 18: enforcement of the law that went into effect for seventy
Speaker 18: five days, so from now that ME and C has
Speaker 18: another roughly six weeks. Early April is the deadline at
Speaker 18: this point, and so what he has to do between
Speaker 18: now and the beginning of April is negotiated deal that
Speaker 18: would keep TikTok running in the US, but would also
Speaker 18: address the national security concerns that were brought up in
Speaker 18: a very bipartisan manner with the prior administration in the
Speaker 18: prior Congress. So even though like I said, it is,
Speaker 18: you know, a big win in this longer saga, it
Speaker 18: is certainly not the end of the line for TikTok,
Speaker 18: and it does not guarantee its future in the United States.
Speaker 2: Alex, what could that deal look like? Does that deal?
Speaker 2: Is it on the table for the US perhaps to
Speaker 2: buy TikTok via a sovereign wealth fund if that does
Speaker 2: get established.
Speaker 18: The terms of the deal, and you know, various proposals
Speaker 18: that have been thrown around are very mushy. I think
Speaker 18: that you know, every week we hear another kind of proposal,
Speaker 18: we hear about another interested potential acquire, another interested potential buyer.
Speaker 18: Some of the names that have been thrown out have
Speaker 18: you know, denied actually being involved in any way. People
Speaker 18: like Elon Musk, who we had initially heard was being
Speaker 18: considered as one potential off ramp by the Chinese government,
Speaker 18: actually came out just at the end of January to
Speaker 18: say he's actually not interested. So the sovereign Wealth fund
Speaker 18: was another thing that was put forward, but the terms
Speaker 18: of how that would actually work were very unclear. We
Speaker 18: also know that with this Auber Wealth Fund, this would
Speaker 18: take a lot of time to actually to actually stand up.
Speaker 18: And Donald Trump as of right now, has only given
Speaker 18: himself until the beginning of April for the enforcement of
Speaker 18: this law to kick back in. So that's all to say,
Speaker 18: there's a lot of stuff on the table. It's all
Speaker 18: a little bit uncertain at this point. But we do
Speaker 18: know that there are ongoing talks in the White House
Speaker 18: and between the White House and TikTok and Bye Dance
Speaker 18: on a potential path forward.
Speaker 4: Here, Alex.
Speaker 3: Do we know what kind of assurances lawmakers want to
Speaker 3: see before we end up getting any kind of deal
Speaker 3: between President and Trump and any other party involved.
Speaker 18: That is a great question, and most lawmakers have been
Speaker 18: mum on this ever since the executive order was signed
Speaker 18: by Donald Trump during his first day in office. We
Speaker 18: know that a large number of the folks that actually
Speaker 18: pushed this legislation across the finish line to begin with
Speaker 18: were members of Trump's own party, and some of them,
Speaker 18: for example Tom Cotton, have come out to say the
Speaker 18: law needs to be enforced. And even though you know,
Speaker 18: even though there hasn't been a whole ton of chatter
Speaker 18: since the executive Order was signed, we do know that
Speaker 18: behind the scenes there is likely a lot of pushback
Speaker 18: from folks who are concerned that whatever deal may end
Speaker 18: up coming to Fruition may not actually address the national
Speaker 18: security concerns that got that app shot down here in
Speaker 18: the first place, so that all remains to be seen.
Speaker 2: Bloomberg's Alex Levine joining us from New York today. Alex,
Speaker 2: thanks so much. Have a great long weekend, and you
Speaker 2: have a great long weekend everybody, because that is going
Speaker 2: to do it for this edition of Bloomberg Technology. Do
Speaker 2: not forget to check out our podcast. You can find
Speaker 2: it on a terminal as well as online on Apple, Spotify,
Speaker 2: and iHeart This is Bloomberg. We'll see you on Tuesday.