Speaker 1: From Mahart where Innovation, Money and Power Collie in Silicon Valley, NBN.
Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2: Live from New York and San Francisco.
Speaker 3: This is Bloomberg Technology coming up. Intel gets to work
Speaker 3: striking a chip making deal with Amazon after postponing expansion
Speaker 3: plans in Germany.
Speaker 4: Plussy Loon Musk expanding his support for Republicans, don eighteen
Speaker 4: millions to back the GOP in congressional races.
Speaker 3: And Microsoft rewards its shareholders boosting is diffenend and unveiling
Speaker 3: a sixteen billion dollar buyback plan that as we hear
Speaker 3: from co founder Bill Gates as he tackles a different
Speaker 3: three trillion dollar problem. But first, let's check in on
Speaker 3: these markets. Because they s people one hundred hits new
Speaker 3: Interdai highs. We are still well off the hires and
Speaker 3: annows that one hundred about five percent off of them,
Speaker 3: but we managed to push.
Speaker 2: On higher on the day. We're at five to percent.
Speaker 3: We're seeing a Goldilocks reading once again.
Speaker 2: When it comes to economic data.
Speaker 3: There's retail sales surprising to the upside for August, but
Speaker 3: still the market waits for tomorrow the FED and whether
Speaker 3: we get a fifty basis point cut.
Speaker 4: But ed, you're watching the micro Yeah, three big technology
Speaker 4: names moving higher.
Speaker 5: Amazon CEO Andy Jasse.
Speaker 4: Has told staff they have to go back to the
Speaker 4: office five days a week starting in January except for
Speaker 4: extenuating circumstances.
Speaker 5: Everyone's talking about that.
Speaker 4: Microsoft boosting its dividend ten percent, a new sixty billion
Speaker 4: dollar share buyback plan that is pushing the stock higher.
Speaker 4: And then Intel a long list of news and announcements
Speaker 4: that shows Pat Gelsinger's turnaround plan is making. They will
Speaker 4: manufacture a chip for Amazon Aws, they will separate out
Speaker 4: the foundry business to serve customers. They will pull back
Speaker 4: in plants in Europe.
Speaker 5: That's a long list.
Speaker 3: Carrot it is, and we get into it blom Meg's
Speaker 3: Ian King. There is the positive, the deal to fabricate
Speaker 3: for Amazon.
Speaker 2: How important is this the in I.
Speaker 6: Mean, they needed a win, They needed a big name
Speaker 6: customer to come out and say, hey, yeah we can
Speaker 6: use that stuff. How material this particular type of chip is.
Speaker 5: How big a.
Speaker 6: Deal this individually is is another question. And really I
Speaker 6: spoke to Pat ahead of the announcement and he said, look,
Speaker 6: I don't need one big customer. I need lots of customers.
Speaker 6: So really that's the perspective for that particular announcement.
Speaker 4: But this is an important start. We'll show what Pat
Speaker 4: told you on that phone call on screen in a second.
Speaker 4: It's a fabric chip.
Speaker 5: What is a fabric chip and why is it significant
Speaker 5: that Intel has been chosen to make it?
Speaker 7: Yeah?
Speaker 6: I mean this is an integral part of a data center.
Speaker 6: It links other chips together. It's not the kind of
Speaker 6: thing that you have millions and millions of, but it's
Speaker 6: very important and you want it to be made on
Speaker 6: the best possible technology. The fact that Amazon, which is
Speaker 6: one of the, if not the leading data center operator
Speaker 6: in the world, has decided to use Intel, that's an
Speaker 6: affirmation that Intel has something that it can use and
Speaker 6: you know, helps.
Speaker 1: It helps.
Speaker 3: You mentioned that he needs lots and lots of customers,
Speaker 3: but they're not going to be Europe based for the
Speaker 3: time being. How upsetting is this ultimately for Germany and
Speaker 3: Poland today?
Speaker 6: Well, it might have customers in Europe, but they won't
Speaker 6: be being building chips in Germany. Remember, they have a
Speaker 6: plant in Ireland which they said is going to be
Speaker 6: the center of their operations for now in Europe in
Speaker 6: terms of what this means for the actual you know,
Speaker 6: the European investment in semiconductors.
Speaker 8: It's clearly a setback.
Speaker 6: Everybody has been hoping that Intel would kind of ride
Speaker 6: to the rescue, obviously here in the United States, but
Speaker 6: also Europe is pushing this as a public policy. Anything
Speaker 6: that delays that, anything that raises the possibility that it
Speaker 6: won't happen, is obviously not good.
Speaker 4: Let me show you this chart on the Bloomberg terminal.
Speaker 4: It shows us that going back to twenty twenty, Intel's
Speaker 4: only had three quarters where sales have grown. What did
Speaker 4: you learn on your phone call with back Pat Gelsinger
Speaker 4: that suggests this list of actions will change that chart
Speaker 4: and that at the top line they will start to
Speaker 4: see some growth.
Speaker 7: Right.
Speaker 6: What I said to him was like, Pat, do you
Speaker 6: have enough money to keep this thing going?
Speaker 9: Right?
Speaker 6: You know, everybody approves of the plan, everybody approves of
Speaker 6: what you've set out to do, but they are worried
Speaker 6: that you don't have enough money to do that. And
Speaker 6: his answer was, well, this has kind of saved me
Speaker 6: some more money to help me to keep things going.
Speaker 6: I feel like I've got the worst of the investment
Speaker 6: period behind me, and now we're in a position with
Speaker 6: our technology and what we can offer to begin to
Speaker 6: start to bring in those orders that turn things around.
Speaker 3: In King always bringing us the important conversations.
Speaker 2: Thank you.
Speaker 3: Now let's bring in Jordan Klein to continue that conversation,
Speaker 3: tech media and telecom analyst over at Bazooho Americas.
Speaker 2: You'll take on all of this, Jordan.
Speaker 3: You write your note this morning really actually highlighting the
Speaker 3: pa reality for Intel is that in one week alone,
Speaker 3: a company such as Broadcom will add twice the market
Speaker 3: capitalization of an Intel. How are you thinking about the
Speaker 3: news coming from what was the key chip manufacturer of
Speaker 3: ten years ago.
Speaker 9: Yeah, well thanks for having me. I mean, I would
Speaker 9: agree with the insummation that this is an important bit
Speaker 9: of positive news. Intel needed something to kind of help
Speaker 9: the stock and sentiment.
Speaker 1: So I think on one.
Speaker 9: Side, it's at least a affirmation that yes, they have
Speaker 9: this foundry business. They've won an important cloud customer in Amazon,
Speaker 9: But basically it's not we don't really know enough on
Speaker 9: the volume and the timing of when it would actually
Speaker 9: drive you know, revenues for them, and I think now
Speaker 9: the stage is set for them to hopefully go out
Speaker 9: and start adding more customers to the mix.
Speaker 1: Whether that's you.
Speaker 9: Know, the biggest and the best would be in Nvidia,
Speaker 9: but they could get others as well, and that's going
Speaker 9: to be a very zephill to climb, but they got
Speaker 9: to start somewhere, and that's what today.
Speaker 2: Was biggest of the best in Vidia.
Speaker 3: Our investors still feeling that that's where they should be
Speaker 3: allocating that chip's more broadly, chip making is where they
Speaker 3: should be putting money in this time in the market.
Speaker 1: Well, that's a really good question.
Speaker 9: I think people are a bit mixed on how much
Speaker 9: more exposure to semiconductors they want and need at this time.
Speaker 9: The group semiconductors that is is extremely sentiment driven, so
Speaker 9: when it's performing well, it's got the momentum, people are
Speaker 9: generally very happy to ride the wave. And that's what
Speaker 9: you saw all first half of twenty twenty four. It
Speaker 9: was like a fear of missing out led by Nvidia.
Speaker 9: As soon as we hit the highs in the first
Speaker 9: part of July and the group sold off, I think
Speaker 9: investor sentiment shifted. People will worried this group is ahead
Speaker 9: of fundamentals. Evaluations were stretched, and it was time to
Speaker 9: look outside of SEMIS to areas like software or large
Speaker 9: cap Internet, and that's kind of where we are now.
Speaker 1: I would say.
Speaker 9: A last thing is that the investor feedback in SEMIS
Speaker 9: is quite mixed. Even though the group is still up
Speaker 9: a lot this year and the stocks act relatively well,
Speaker 9: not a lot of them are making new highs and
Speaker 9: the fundamentals, meaning what these companies are saying, particularly outside
Speaker 9: of Nvidia and GPUs for Ai, is actually not improving
Speaker 9: in some instances, it's deteriorating a bit, like the auto
Speaker 9: and memory sector.
Speaker 4: Away from the idiosyncratic Jordan, what did the Intel story
Speaker 4: tell you about this investment cycle and through pats lens
Speaker 4: those potential customers and where they might be going.
Speaker 9: Well, it tells me a couple things. It tells me
Speaker 9: that one these large cloud hyperskill customers like Amazon, Meta, Google, Facebook. Sorry,
Speaker 9: you know, these large cloud customers are very interested in
Speaker 9: building and designing their own custom chips. As you pointed
Speaker 9: out early in the show, this is more of a
Speaker 9: fabric new working chip. But keep in mind Amazon is
Speaker 9: very big at building and designing their own chips for
Speaker 9: training and inferencing as opposed to relying too much on Nvidia,
Speaker 9: so I think that's going to continue.
Speaker 5: All these big.
Speaker 9: Cloud companies with large CAPEX spending budgets will seek to
Speaker 9: do as much as they can internally with the help
Speaker 9: of other leading design companies like Broadcom, Marvel, maybe Intel
Speaker 9: and others. It also shows that there's really no end
Speaker 9: in sight here. I think that they're going to look
Speaker 9: to diversify if they can beyond just building all these
Speaker 9: chips with Taiwan Semi, who's the world's leading foundry. But
Speaker 9: they don't want to be too reliant upon them or
Speaker 9: give TSM so much leverage that they can keep raising prices,
Speaker 9: so they kind of want to keep the industry balanced
Speaker 9: and honest, so to speak, and that would be at
Speaker 9: Intel's advantage if they can show and prove they can
Speaker 9: execute at these very advanced, leading edge nodes.
Speaker 4: Jordan, I don't know what you're doing on Wednesday afternoon.
Speaker 4: Here we'll be focusing on the next FOMC decision. You're
Speaker 4: somebody whose desk is just every day flowing with technology
Speaker 4: news essentially, So how do you and all the people
Speaker 4: that phone you at five am think about the FED tomorrow?
Speaker 9: Well, I think half of them, like myself just wanted
Speaker 9: to be behind us so we can move on and
Speaker 9: focus more on fundamentals as opposed to the FED and
Speaker 9: the macro. I tend to think this one is one
Speaker 9: of the more important FED decisions and announcements that we've
Speaker 9: had in some time, But it also feels like a
Speaker 9: little bit overhyped in terms of are we really is
Speaker 9: the market really going to change dramatically whether it's twenty
Speaker 9: five or fifty basis points. Are institutional investors and big
Speaker 9: mutual fund managers going to dramatically change the makeup of
Speaker 9: their portfolio based on twenty five versus fifty? I don't
Speaker 9: think so. I think they're already of the view that
Speaker 9: whether it's twenty five or fifty, the FED is going
Speaker 9: to continue to probably air on the side of wanting
Speaker 9: to ease as opposed to keep rates high. And with
Speaker 9: that backdrop, as long as we can believe in a
Speaker 9: soft landing, which I think most investors do, they're going
Speaker 9: to probably stay long equities, and they're probably going to
Speaker 9: continue to look for growth, and that's going to favor
Speaker 9: key parts of tech. So bottom line, I think when
Speaker 9: the dust settles in a week, the fundamentals and the
Speaker 9: backdrop for tech still remain pretty favorable.
Speaker 3: Does it still favor the most valuable companies? I think
Speaker 3: of Microsoft today once again having money back in terms
Speaker 3: of buybacks, promised dividends given, but it's so valuable already.
Speaker 3: Do the sentiment stick with it?
Speaker 9: Oh yeah, I definitely think that there's no deterioration or
Speaker 9: weakening and positive sentiment for these mag seven you know,
Speaker 9: particularly these names like Microsoft and Video, Amazon and Meta.
Speaker 9: That the companies that are perceived to be the leaders
Speaker 9: in both class out an.
Speaker 5: AI, even Apple.
Speaker 9: I mean it's down a bit the last few days,
Speaker 9: but to be to be honest, like if AI on
Speaker 9: the smartphone is going to work, they're going to be
Speaker 9: leading the charge. And I just don't think you can
Speaker 9: get that exposure, that potential growth in other areas of tech,
Speaker 9: and actually probably not in other areas of the market.
Speaker 9: The debate is going to be what you pay for it,
Speaker 9: and that's that's you know, hard to determine. It's it's
Speaker 9: more of an art form than a than a science.
Speaker 9: But as long as rates are coming down and the economies,
Speaker 9: you know, not grinding to a halt, I tend to
Speaker 9: think people will pay up for growth and that favors
Speaker 9: these large megacaps as opposed to the smaller companies that
Speaker 9: are going to have to see if the economy.
Speaker 5: Holds up or not.
Speaker 4: MISSOI America's analyst Jordan Klein, thank you very much. Coming
Speaker 4: up on the show, we have all the details on
Speaker 4: Uber's latest driver safety perch that's next.
Speaker 8: This has been that technology.
Speaker 3: Starting tomorrow, Uber will begin automatically verifying passengers, checking their
Speaker 3: account information against third party identity databases, all in an
Speaker 3: effort to make drivers feel safer.
Speaker 2: Bloomegs. Dana Wrman joins us for more.
Speaker 3: A big step one that's been called for.
Speaker 10: Yes, And I don't think we talk enough about driver's safety,
Speaker 10: which is odd because when you think about it, these
Speaker 10: are drivers who are picking up strangers, mostly in their
Speaker 10: own cars, and I can imagine that being somewhat scary,
Speaker 10: maybe vulnerable feeling. And these are measures being taken really
Speaker 10: to make drivers feel a little safer as they pick
Speaker 10: up drivers in the day.
Speaker 5: To day Dana, How's this going to work?
Speaker 4: In some cases, like if you pay with a gift
Speaker 4: card on Uber rather than attach a credit card, there
Speaker 4: is some verification as a passenger or rider you already
Speaker 4: have to go through what will be required of us
Speaker 4: going forward.
Speaker 1: Yeah, so I don't excuse me.
Speaker 10: Writers who use anonymous payment methods, and I don't know
Speaker 10: how many of them there are, will need to go
Speaker 10: through a manual process, but most of us, For most
Speaker 10: of us, the process will be automatic, and it might
Speaker 10: even be that it's already been done. I actually checked
Speaker 10: my Uber account before joining you all here on TV
Speaker 10: and I had check marks next to both my cell
Speaker 10: phone number and my email address in my account. So
Speaker 10: for many customers, that automatic process may have already taken place.
Speaker 10: And it's worth noting that you cannot, as a writer,
Speaker 10: opt out of the automatic process. So if you have
Speaker 10: a phone number attached the email address, ubers going to
Speaker 10: match you against a third party database to verify your identity,
Speaker 10: and it may already have been done.
Speaker 3: This is one of a couple of steps that doing
Speaker 3: dosh cooms as well. All of this costs, but the
Speaker 3: reward must be more sustainable.
Speaker 2: Drivers on that platform.
Speaker 10: Yes, drivers have said in the past they're worried about
Speaker 10: their safety, both physically and reputationally. They're worried about things
Speaker 10: like carjack, but aside from violent incidents, they're worried about.
Speaker 1: Malicious reports, just reports.
Speaker 10: From maybe spiteful riders that could really tank their rating
Speaker 10: and therefore their standing with the platform and by extension,
Speaker 10: their income. So one of the measures today, in addition
Speaker 10: to the automatic identity.
Speaker 1: Verification, is the ability.
Speaker 10: To no longer match within the future someone who you've
Speaker 10: rated as a.
Speaker 1: Driver a two or three.
Speaker 10: As it is, you wouldn't be matched against again with
Speaker 10: someone who you rated just one out of five. But
Speaker 10: this is sort of an extension of that, saying, Okay,
Speaker 10: this passenger was a bit of a jerk, I rated
Speaker 10: them a two or three.
Speaker 1: I'm not going to see them again.
Speaker 5: Bloomberg's Dana Wolman, thank you very much. Now.
Speaker 4: Microsoft raised its quarterly dividend ten percent and unveiled a
Speaker 4: new sixty billion dollar stock buyback program, matching the size
Speaker 4: of the repurchase plan three years ago. The company said
Speaker 4: shareholders as of November twenty first will receive a quarterly
Speaker 4: dividend of eighty three cents a share, compared with the
Speaker 4: current seventy five cents. The buyback agreement represents less than
Speaker 4: two percent of Microsoft's market value.
Speaker 5: Carac Let's just.
Speaker 3: Discuss in one of Microsoft's co founders Bill Gates, as
Speaker 3: his foundation just released its Goalkeepers Report for twenty twenty four,
Speaker 3: highlighting a sudden halt in the global health boom with
Speaker 3: a worsening child nutrition crisis causing a potential three trillion
Speaker 3: dollars in economic losses.
Speaker 2: I sat down with Microsoft co founder.
Speaker 3: Bill Gates to discuss just this, how technology and AI
Speaker 3: can help, and why resources are needed.
Speaker 7: Take a listen, We do need to raise money to
Speaker 7: get resources for this so that the poor countries, you know,
Speaker 7: get out of the poverty trap and then are our
Speaker 7: self sufficient. The innovation is going to accelerate tools like
Speaker 7: AI or helping us understand that god the immune system,
Speaker 7: you know, how to design vaccines in a very deep way.
Speaker 5: And you know, the.
Speaker 7: Key thing that the Foundation has my innovation is making
Speaker 7: sure it's not just helping the rich countries, but it's
Speaker 7: helping the poorest.
Speaker 5: And so, you know, can.
Speaker 7: They get medical advice in their native language on their
Speaker 7: cell phone. Can they have their diseases that are so ignored,
Speaker 7: like malaria, Can we use AI to develop ways to
Speaker 7: not only reduce that but eventually eradicate it. And so
Speaker 7: you know, that's where the Foundation is looking at the
Speaker 7: innovation and making sure that it's benefiting those most in need.
Speaker 3: The foundation talking with global leaders often, I'm sure global
Speaker 3: leaders of wealthy, developed nations who are preoccupied right now
Speaker 3: with their own political instabilities, their own worries about the
Speaker 3: cost of living. Will you get the help you need
Speaker 3: from developed nations?
Speaker 2: Do you think?
Speaker 1: Now that's a very good question.
Speaker 5: You know.
Speaker 7: The dream is that even in the face of huge
Speaker 7: budgetary challenges that all countries have, that they would be
Speaker 7: willing to have one to two percent that go to
Speaker 7: help the poorest, to help these countries move forward. And
Speaker 7: these are things where you're saving a life for less
Speaker 7: than a thousand dollars per life saved, so, you know,
Speaker 7: very catalytic, very well measured. You know, I wouldn't be
Speaker 7: putting my money in unless I knew that it was
Speaker 7: extremely well spent. And so we're trying to keep this
Speaker 7: on the agenda to continue that miracle that took place
Speaker 7: where we made so much progress getting rid of childhood death.
Speaker 3: Bill gates there and often ed to solve what is
Speaker 3: a three trillion dollar economic issue.
Speaker 2: Is not rocket science.
Speaker 3: It's about getting vitamins out to people. It's about more
Speaker 3: productive cows.
Speaker 4: Yeah, and consistent with the foundation. What Gates is looking
Speaker 4: for is a technology that is upfront, affordable and scale
Speaker 4: and that's consistent always done. But they're putting a big
Speaker 4: check in particularly a nutrition microby and things like that.
Speaker 3: Time now for talking tech and first up Hong Kong
Speaker 3: while it's preparing to issue a policy statement on the
Speaker 3: use of AI in finance, escording to sources, with the
Speaker 3: document broadly intended to signal Hong Kong's.
Speaker 2: Support for artificial intelligence, and.
Speaker 3: The move could catalyze the use of the technology in
Speaker 3: areas from training to investment, banking and cryptocurrencies. Plus, Lenovo
Speaker 3: started building AI servers in south of India, moving beyond
Speaker 3: products such as laptops and smartphones, and the Chinese company
Speaker 3: will also build out its facilities in Bangalore region, including
Speaker 3: a research lab with a focus on.
Speaker 1: AI and Amazon.
Speaker 3: CEO Andy Jase he's moving to streamline the company. In
Speaker 3: a memo to employees yesterday, the CEO announced cutting management
Speaker 3: layers and ordered employees to return to the office five
Speaker 3: days a week.
Speaker 5: In January, more.
Speaker 4: Tech news as Salesforce is kicking off its Dreamforce event today.
Speaker 4: It's also unveiling a pivot in its AI strategy now
Speaker 4: saying that it's AI tools can handle tasks without human supervision,
Speaker 4: and changing the way it charges for software. Let's bring
Speaker 4: in Bloomberg intelligence analyst and a rag Rana and on
Speaker 4: the charging they're going to start doing two dollars per
Speaker 4: conversation handled by an AI agent as opposed to a
Speaker 4: subscription on a per head basis.
Speaker 5: What's the BI reaction to that.
Speaker 11: Yeah, So when you look at the way some of
Speaker 11: these core pilots are being priced, you know, companies like
Speaker 11: Microsoft are saying they're going to charge thirty dollars per
Speaker 11: user per month. So that's one pricing mechanism. Another pricing
Speaker 11: mechanism is consumption based, which is what you just mentioned.
Speaker 11: Adobe has a similar one for their Firefly appligation where
Speaker 11: you're going to get some credits initially and then you're
Speaker 11: going to have to pay for it. And the third
Speaker 11: one would be just part of the full enterprise packet.
Speaker 11: So there are several ways you're going to modernize this
Speaker 11: is monetize this, but needless to say, over the next
Speaker 11: few years, we think these costs are going to reduce
Speaker 11: dramatically because currently the reason why it's a little bit
Speaker 11: more expensive is because it really required a lot of
Speaker 11: resources to train these large language models. And over time
Speaker 11: that consumption, that processing is going to improve.
Speaker 3: So as it becomes cheaper, will that be reflected in
Speaker 3: the price point that you and I charged for any conversation?
Speaker 11: Yeah, I think that's going to be beyond for everything,
Speaker 11: not just this, but probably you know, you could say chat,
Speaker 11: GPT pricing or subscriptions. Over time, you could expect some
Speaker 11: compression in those charges and you know, better profit for.
Speaker 5: These AI vendors.
Speaker 11: But for Salesforce, I think they're going to play it
Speaker 11: a few ways. They have a product called data Cloud.
Speaker 11: I think that's doing very well. That's an area of
Speaker 11: strength for them. Now, remember but that's too small of
Speaker 11: a thing that is cannot offset the bigger compression on ender.
Speaker 11: Is it budgets that's compressing their seat growth right now?
Speaker 4: Anna Rag, I'm surprised that you're not here with me
Speaker 4: in San Francisco for dream Force. You know, Salesforce were
Speaker 4: well the research, the podcast. Why aren't you attempted to
Speaker 4: come out? Is it not a sort of substantive event?
Speaker 11: No, it is an important event, but frankly speaking, almost
Speaker 11: every week there is an event like this whether it's
Speaker 11: Oracle World or Workday, I wondn't get any work done
Speaker 11: if I.
Speaker 8: Was doing that.
Speaker 3: He's going to be in the office like most of
Speaker 3: the Amazon employers will have to be as well soon.
Speaker 3: Just very briefly, what is factored in to CRM at
Speaker 3: the moment in salesforce? Are we seeing well the enthusiasm
Speaker 3: ram the name reflecting the evaluation.
Speaker 11: Yeah, I think you know, for CRM, they really need
Speaker 11: to get back to double digit growth rate. I mean,
Speaker 11: I think this is really a big issue for them
Speaker 11: because right now, when we looked at bookings data for
Speaker 11: the last quarter, we're hovering around at eight and a
Speaker 11: half nine percent mark, which means next to your sales
Speaker 11: growth is going to be nine percent. You can check
Speaker 11: out on the Bloomberg te or in our view that
Speaker 11: needs to come to that ten to twelve percent number
Speaker 11: before you know, you would see investors by link the
Speaker 11: way the margin story is done and done with, but
Speaker 11: now it's a matter of revenue acceleration for them.
Speaker 3: Bloomberg Intelligence analyst Anna rag Rana, thank you, Welcome back
Speaker 3: to Bluemag Technology.
Speaker 2: I'm Caroline hid in New York.
Speaker 5: Medald Loo in San Francisco, let's just talk.
Speaker 3: Politics, because Elon Musk is openly as wallet wider in
Speaker 3: support of Republican candidates in battlegwn districts across the country. Now,
Speaker 3: the Tesla CEU Super Political Action Committee is following two
Speaker 3: point one million dollars in its first foray into congressional races.
Speaker 3: Megs Mike Shephard joins us. Now, this is a new foray.
Speaker 3: Which kind of races are they targeting?
Speaker 12: Well, what they're looking for is some of the most
Speaker 12: closely contested districts in the country. These are the kinds
Speaker 12: of competitions that could side control of the House of
Speaker 12: Representatives come November. These are areas where Joe Biden won
Speaker 12: in twenty twenty but Democrats in twenty twenty two during
Speaker 12: the midterm elections lost those seats. Now that Democratic Party
Speaker 12: is trying to make some efforts to regain control of
Speaker 12: those districts so that maybe they could flip the House
Speaker 12: back into their hands come November. Now, this will not
Speaker 12: be an easy task, but it is something that's a
Speaker 12: little bit more within reach than might appear, even as
Speaker 12: we look at a very closely contested presidential race. So
Speaker 12: Elon Musk putting some money through his superpack into these races.
Speaker 12: One is Mike Lawler and Westchester. Another is Marcus Molnaro's
Speaker 12: district further upstate New York. These are the kinds of
Speaker 12: places where Republicans are looking to hold onto their gains
Speaker 12: from twenty twenty two.
Speaker 4: To some two point one million dollars might not seem
Speaker 4: like a lot to others, it will seem like a lot.
Speaker 4: But the point that Bloomberg's Down the Hole makes well
Speaker 4: in her story is that Elon Musk is the world's
Speaker 4: richest man but also has other platforms in which his
Speaker 4: voice gets out to voters. Explain why that's important, Mike.
Speaker 12: Well, and you're getting at something really important here in
Speaker 12: this particular campaign, and that is a dynamic of in
Speaker 12: kind support that Elon Musk is able to provide to
Speaker 12: his allies on the right. He for the first time
Speaker 12: really came out and endorsed a candidate when he did
Speaker 12: so in July, coming out in favor of former President
Speaker 12: Donald Trump. And he has signaled his interest in pushing
Speaker 12: more of these right leaning causes and conservative candidates.
Speaker 5: So he is doing so using.
Speaker 12: His ex platform by amplifying some of their posts and
Speaker 12: their views and also putting information out there and putting
Speaker 12: posts out there that make Kamala Harrison Democrats look not so.
Speaker 3: Great, Mike, what does it mean for his businesses though,
Speaker 3: like Tesla, what does it mean to have well finance
Speaker 3: some political candidates.
Speaker 12: Well, it's a really good question, Carolyn, because Elon Musk
Speaker 12: has so much business tied up with the federal government,
Speaker 12: either directly for example with SpaceX providing so many services
Speaker 12: to the US government, but also Tesla does have a
Speaker 12: stake in the fate of how President Joe Biden's Inflation
Speaker 12: Reduction Act, in all of its green incentives to get
Speaker 12: more people to buy electric vehicles, how that goes. So
Speaker 12: he has a very strong tied to the US government
Speaker 12: and how things look for his companies. Now, in this sense,
Speaker 12: he is trying to ensure that not only does he
Speaker 12: get a candidate like Donald Trump who is in his
Speaker 12: court and in his favor, into the White House, he
Speaker 12: also wants to make sure he has allies in Congress
Speaker 12: who will act on his interests.
Speaker 5: Bombangs Mike shepphad out of DC. Thank you very much.
Speaker 5: Let's get to another story.
Speaker 4: Instagram is rolling out new privacy settings for teens. It
Speaker 4: will make teen accounts private by defeat limiting the use
Speaker 4: of private messages and sensitive posts. These restrictive settings will
Speaker 4: be turned on automatically for all Instagram users under the
Speaker 4: age of eighteen. Bloom Best Kurt Wagner covers social media
Speaker 4: and joins us now. And you spoke to Adam Asseerri,
Speaker 4: the chief over at Instagram, not just about how that
Speaker 4: will look if you're a team user of Instagram, but
Speaker 4: the rationale for doing it.
Speaker 5: What did he tell you?
Speaker 13: Well, he said that this has been in the works
Speaker 13: for over a year, and you can see why, right,
Speaker 13: this is one of the biggest complaints that Instagram gets
Speaker 13: from parents. It's one of the biggest complaints they certainly
Speaker 13: get from lawmakers. We've seen Mark Zuckerberg have to show
Speaker 13: up in DC to answer questions about their role on
Speaker 13: protecting children on several instances over the last couple of years.
Speaker 13: So this is something that is not a new problem
Speaker 13: or something that is not a new idea to them.
Speaker 13: It's been in the works a long time. I think,
Speaker 13: you know, the bigger question might be what took them
Speaker 13: so long? But I think they've gotten to a point
Speaker 13: here where this is a very robust set of changes,
Speaker 13: and they feel like they're finally sort of addressing a
Speaker 13: lot of those concerns that they are getting from parents
Speaker 13: and lawmakers.
Speaker 3: And Kurt, it does intertwine artificial intelligence to help them
Speaker 3: ensure that you are the age you say you are.
Speaker 5: Yeah, it's sort of unique.
Speaker 13: So if you are a teen under eighteen and you're
Speaker 13: lying about your birthday, they're going to use AI to
Speaker 13: try and detect those lies. Right, They're going to look
Speaker 13: at what a normal teen account might look like, what
Speaker 13: normal teen behavior might look like, and using AI, they
Speaker 13: will sort of bucket people into whether or not they
Speaker 13: think they are an under eighteen account, and then will
Speaker 13: automatically put them into those settings right now. It may
Speaker 13: make mistakes at times, but you can imagine a lot
Speaker 13: of teenagers who are suddenly going to wake up here
Speaker 13: this news and try and change their birthday to get
Speaker 13: around this. And Meta says that they're trying to proactively
Speaker 13: prevent that.
Speaker 4: For many social media platforms, Kurt, the demographic of the
Speaker 4: user base is important. So we have a sense of
Speaker 4: on Instagram how much of the user base is teen
Speaker 4: age and how much of it is parent overseeing teenage
Speaker 4: user account.
Speaker 13: Yeah, no, we don't. I mean, we know it's in
Speaker 13: the millions. We know there are millions of teens around
Speaker 13: the world and millions of teens just here in the
Speaker 13: US that are using Instagram. We don't know a more
Speaker 13: striking percentage than that. This will be a small portion
Speaker 13: of the overall user base, right, So, even though it's
Speaker 13: all teens that are eighteen, it's really just teens under
Speaker 13: sixteen who need parental.
Speaker 5: Permission to change these things.
Speaker 13: If you are a sixteen or seventeen year old, you'll
Speaker 13: be kicked into these new settings, but you can change
Speaker 13: them on your own. So you know, this is a
Speaker 13: small cohort of users based on Instagram's total audience. But
Speaker 13: of course it is the most vulnerable and it's also
Speaker 13: the group that people are most concerned about, right because
Speaker 13: they're interacting at times with people that they've never met
Speaker 13: or don't know in real life.
Speaker 3: And as a global concern, how is this a global outreach?
Speaker 13: Yeah, so this will be implemented for teenagers across the world.
Speaker 13: They're starting with some English speaking countries, the US, the UK,
Speaker 13: out in Australia. They're going to bring it to the
Speaker 13: rest of the European Union. I believe by the end
Speaker 13: of this year, and then early in twenty twenty five
Speaker 13: they'll start expanding this to teens in other countries. So
Speaker 13: this isn't just a you know, a US thing.
Speaker 5: This is a global thing.
Speaker 13: And I asked Adamissari, hey, is this the kind of
Speaker 13: thing that's going to come to Facebook too, right, because
Speaker 13: this isn't just an issue on Instagram. He said, they
Speaker 13: want to start small with Instagram and if all goes
Speaker 13: well with the rollout, it seemed I got the sense
Speaker 13: that it was very likely these types of protections could
Speaker 13: move to some of Meta's other apps in the future
Speaker 13: as well.
Speaker 3: Kyle Wagner, thank you keeping us up to speed and
Speaker 3: more on Meta now because it's banning Russian media outlet
Speaker 3: RT and its parent entity Rasia Say Good yea, the
Speaker 3: media group, and other related entities, according to reports Now,
Speaker 3: a spokesperson at Meta said in a statement that the
Speaker 3: outlets have been banned from metas apps globally for foreign
Speaker 3: interference activity.
Speaker 4: Ed that's quick take quick look at Market's carry because
Speaker 4: I don't who really have done as much so far
Speaker 4: as maybe we should. The S and P five hundred,
Speaker 4: by the way, is very near a fresh record but
Speaker 4: I'm looking at the text focused indexes. We know what
Speaker 4: the points boosts are, right, you see one on the
Speaker 4: screen there Microsoft after the shared buyback in dividend that
Speaker 4: is helping push the NASDAK one hundred higher, along with
Speaker 4: Amazon Chips having a better day outperforming up almost percentage
Speaker 4: point on the Philadelphia Semiconductor Index. Y. You know the
Speaker 4: story Intel, and Intel's seen its gains accelerate. We have
Speaker 4: so much more to come here on bloom Technology.
Speaker 5: Stay with us. This is bloomot Technology.
Speaker 3: Time now for our VC roundup in video back sakhana
Speaker 3: Ai now valued at one point five billion.
Speaker 2: Dollars according to sources. The startup, founded.
Speaker 3: By former Google researchers in twenty twenty three, was boosted
Speaker 3: by investments from Summer Japan's biggest banks.
Speaker 2: And companies, using two hundred and thirteen million dollars in
Speaker 2: a series a funning round.
Speaker 3: Emhil, Germany's rapid delivery startup Flink, has raised one hundred
Speaker 3: and fifty million dollars in a new round of fun
Speaker 3: We's thing it's valuation to.
Speaker 2: Lily a billion.
Speaker 3: Still, that's down from three billion dollars that it was
Speaker 3: valued at during the height of COVID when it emerged
Speaker 3: as a pandemic darling during Lockdown's VC firm Patron raised
Speaker 3: three and well one hundred million dollars for a new
Speaker 3: fund with a focus on young consumer facing companies.
Speaker 2: Particularly in the gaming field. It's second fund from Patron.
Speaker 2: Ed We've got more.
Speaker 4: Yeah, and Patron general partner and co founder Jason Yea
Speaker 4: joins us now for today's VC Spotlight here in San Francisco.
Speaker 4: Cover gaming a lot in this program. There are lots
Speaker 4: of headlines we should get to, but I think it's
Speaker 4: a good place to start. When you have one hundred
Speaker 4: million dollars to invest, where do you find disruption in
Speaker 4: the gaming industry? It won't be all of your focus,
Speaker 4: but it'll be a big part.
Speaker 9: Yeah.
Speaker 14: Well, good morning, ED, thanks again for having me here
Speaker 14: and alongside my partner's Brandjo and memory Atherdon, we're excited
Speaker 14: to be announcing our one hundred million dollars second fund today.
Speaker 14: So to the point about where we focus, I think
Speaker 14: a lot of a lot of our insight comes from
Speaker 14: the time that we spent helping to build Right and Discord,
Speaker 14: and there's this entire generation of young people that are
Speaker 14: growing up on these gaming platforms spending thousands of hours
Speaker 14: with their friends, and I think we really want to
Speaker 14: follow the audience and take a look at what are
Speaker 14: the ways that they're going to evolve, how they use
Speaker 14: how they use the Internet.
Speaker 4: When I think about the studios in particular, I mean
Speaker 4: you still focus on studios in.
Speaker 5: Part that's an area where there are some.
Speaker 4: Uncertain futures and a lot of them are pulling back
Speaker 4: reducing staff. Does that impact your ability to invest anywhere?
Speaker 14: I think something we think a lot when looking at
Speaker 14: gaming studios is this idea of market expansion and market creation.
Speaker 14: It's incredibly tough to go directly compete against the Riot, Epic,
Speaker 14: a Valve, and so I think in that particular area
Speaker 14: we really look for, like what is the unique insight
Speaker 14: how can you actually grow what previously seemed like a
Speaker 14: market that might have been too niche I think League
Speaker 14: certainly was that way with Dota initially, and then really
Speaker 14: go from there.
Speaker 3: Jason, how much is AI changing the game things?
Speaker 14: I think, as with a lot of technology emergent technologies, previously,
Speaker 14: gaming has served as the forefront for new technology adoption.
Speaker 5: And on our side, we really believe.
Speaker 14: That AI is going to change how people use the
Speaker 14: Internet overall, and I think a lot of the earliest
Speaker 14: efforts are tied to content and game creation. I think
Speaker 14: the thing that we're more interested in is like, how
Speaker 14: can AI actually help to make your experience as a
Speaker 14: consumer better? How can it make the games you play
Speaker 14: more fun? How can it make the learning apps more effective?
Speaker 14: How can you make shopping more easy? So those are
Speaker 14: the areas that we're looking at.
Speaker 3: And that's been a story you've told to institutional investors
Speaker 3: who got in on this fund, some big names who
Speaker 3: manage their own vcs. You've got Mark Andriesen, You've got
Speaker 3: Fred Wilson of Union Square Adventures.
Speaker 2: Why are they seeking you out in particular?
Speaker 3: And how easy was it to get that commitment in
Speaker 3: this environment?
Speaker 14: So well, I think fundraising overall, as we've all seen,
Speaker 14: has been pretty challenging over the last year and a half.
Speaker 14: I think one thing which resonated with a lot of
Speaker 14: our earliest investors, including a handful of the General Partner
Speaker 14: as you mentioned, and some of our largest institutions, is
Speaker 14: this idea that we are We're very focused on what
Speaker 14: we know best, and we spent better part of the
Speaker 14: last decade helping to build companies like Ride and Discord,
Speaker 14: and it is becoming increasingly clear that the consumers that
Speaker 14: grow up on products like Roadblocks and Discord and League,
Speaker 14: they're the ones that are going to drive kind of
Speaker 14: future innovation adoption of technology. And so that focus has
Speaker 14: allowed us to really differentiate from a lot of our peers.
Speaker 4: Discord's present is very different to its origin story. I
Speaker 4: wonder how much in that context you'll focus on being
Speaker 4: an operator, not just an investor. A lot of people
Speaker 4: have great ideas that they're morph into something completely different.
Speaker 14: Certainly, I think for our firm specifically, so Amber really
Speaker 14: helped Discord expand into non gaming verticals. My job at
Speaker 14: Riot was to help us launch the game, launch sports,
Speaker 14: launch entertainment into new markets. And so having this real
Speaker 14: recent experience helping to launch products build communities has really
Speaker 14: resonated with the founders that we're working with.
Speaker 3: Jason, I go back to a different hype cycle when
Speaker 3: we sort of gaming, we thought of Discord, and we
Speaker 3: thought of web three.
Speaker 5: How much is that.
Speaker 2: Still an underlying driver for you, even if it's less
Speaker 2: sexy to talk about.
Speaker 14: I think we're always going to look at how new
Speaker 14: technologies influence how people connect with each other and play online,
Speaker 14: and so whether it was web through initially, whether it's
Speaker 14: generative AI now, I don't think that changes.
Speaker 7: Again.
Speaker 14: I think as a firm, we're much more focused on
Speaker 14: the audience and the behavior of that audience. And I
Speaker 14: do think it is good to be looking in areas
Speaker 14: where not everyone else is looking, and so we are
Speaker 14: always going to be hyper focused on this audience as
Speaker 14: they kind of grow up and adopt new technologies.
Speaker 3: Jason Yay, I've patron, thank you so much for joining
Speaker 3: us on the new fund.
Speaker 5: I want to get a.
Speaker 4: Quick check in on crypto market's not already talked about
Speaker 4: it as much. Just before ten am Eastern, a lot
Speaker 4: of risk assets took a big leg to the upside,
Speaker 4: and that included Bitcoin that's now back trading around sixty
Speaker 4: one thousand US dollars per token. It had sort of
Speaker 4: had a shaky start to the week, which is a
Speaker 4: fed week, and that was a big part of the narrative.
Speaker 4: There are some other individual movers as well, largely tied
Speaker 4: to news. Crypto adjacent stocks micro Strategy, Riot and coinbase
Speaker 4: all pushing higher as well. So news overnight, Donald Trump
Speaker 4: headlined an event billed as the unveiling of a crypto
Speaker 4: platform promoted by the Republican nominee and his sons, called
Speaker 4: World Liberty Financial. It's all part of his push to
Speaker 4: attract digital asset proponents. Here's what Trump had to say
Speaker 4: about why he thinks the US should embrace crypto.
Speaker 8: If we don't do, a chinel is going to do.
Speaker 5: A channel is doing it anyway.
Speaker 13: But if we aren't doing, we're not going to be
Speaker 13: the biggest, and we have to be the biggest of
Speaker 13: the first.
Speaker 4: We're join now by Insight Consulting principle Amanda Wick. She
Speaker 4: used to work at the just CIS department specializing in
Speaker 4: money laundering and crypto, and I think all those that
Speaker 4: tuned into the spaces would agree it was kind of
Speaker 4: thin on detail and specifics, a focus on DeFi there'll
Speaker 4: be the issuance of a token, but it will be
Speaker 4: for credited investors only here in the United States at least.
Speaker 5: What did you learn? What's the main takeaway here, Amanda Well.
Speaker 1: I think the sad thing is is that everything he
Speaker 1: just said is right.
Speaker 15: I think what people in the industry are terrified is
Speaker 15: that he's the emissary saying it because there's no doubt
Speaker 15: that WLFI is going to be, if not a pump
Speaker 15: and dump, a rug pull. Everybody's watching in horror. Even
Speaker 15: Trump supporters are begging him not to do this because
Speaker 15: of the negative impact it could have on the industry
Speaker 15: long term.
Speaker 2: Amanda, can you.
Speaker 3: Give us real data or hard evidence as someone who
Speaker 3: formerly worked for the government in this as to why
Speaker 3: you think it's definitely going to be a rug pull
Speaker 3: or a pump and dump, because many working on the project,
Speaker 3: I would think would dispute that.
Speaker 15: Yeah, and I really try to be objective. But if
Speaker 15: you're looking at project where the incentives are flipped, usually
Speaker 15: these projects the organizers hold twenty percent maybe less of
Speaker 15: the tokens. I think Ethereum kept maybe sixteen percent, Cardona
Speaker 15: is twenty percent. The Trump organizers are keeping seventy percent,
Speaker 15: and even in the thirty percent that will be released
Speaker 15: to the public, they're going to make.
Speaker 5: Some profit off of that.
Speaker 15: That is a terrible sign in terms of how it's
Speaker 15: being structured. The other thing you have to look at
Speaker 15: is the motive of the people organizing it. Trump's steering
Speaker 15: down the barrel of a four hundred million dollar collection
Speaker 15: in New York, and this would be personal funds that
Speaker 15: he could use to satisfy that. So the motives that
Speaker 15: they have here to make a bunch of money very
Speaker 15: quickly is unfortunately the worst aspect of crypto and it's
Speaker 15: the part of the.
Speaker 5: Industry that people do not want to continue.
Speaker 4: Amanda Bloomberg's states quite clearly in its report that the
Speaker 4: issuance of WLFI is in sort of having a role
Speaker 4: in the governance of the business itself. I want to
Speaker 4: park that The other narrative is that Trump thinks the
Speaker 4: United States of America needs to do this bigger approach
Speaker 4: because China's already doing it and he wants America to
Speaker 4: be a leader in the field.
Speaker 5: How do you respond to that rationale.
Speaker 1: He's absolutely right. I wish that the Heroes campaign was
Speaker 1: saying that.
Speaker 15: I think they're a little tied in terms of what
Speaker 15: they can say because a sitting vice president can't really
Speaker 15: talk about the sitting administration negatively. But everybody in the
Speaker 15: industry wants a pivot from the Dems, wants America to
Speaker 15: lead first.
Speaker 5: The sad thing is is Trump is right.
Speaker 15: I think the sadder thing is this project might end
Speaker 15: up destroying the very thing that he said that was accurate.
Speaker 3: When we think of China, though we don't see China
Speaker 3: embracing all of crypto and projects. You think perhaps more
Speaker 3: of them entertaining the idea of stable coins or indeed
Speaker 3: some sort of form of using it within a central
Speaker 3: bank coin. What of DEFY more broadly, Amanda and this
Speaker 3: project about sort of getting in the way of the intermediaries,
Speaker 3: and it's all about loaning lending asset.
Speaker 15: Yeah, Look, there are great aspects of DeFi, and I
Speaker 15: think that part of his project is the good part
Speaker 15: that the industry.
Speaker 5: Wants to talk about.
Speaker 15: Again, it's just that the emissary if this ends up
Speaker 15: being a rug pull or a pump and dumb, it's
Speaker 15: the worst part of DeFi. But there are amazing DeFi
Speaker 15: projects out there that the industry wants to highlight and showcase.
Speaker 5: This will not be one of them.
Speaker 15: And I don't know that China is necessarily the market
Speaker 15: that's leading on DeFi. There are other countries that I
Speaker 15: think are more pro investing and are pro regulating in
Speaker 15: those areas, areas like you hate Singapore. Sometimes he doesn't
Speaker 15: get it quite right, which is unfortunate. But the fact
Speaker 15: that America needs to lead and DeFi is correct. It
Speaker 15: is horrifying that this project may take us back ten
Speaker 15: years instead of advancing us the way that the industry
Speaker 15: would hope.
Speaker 3: Zeke Fox Are reported in an amazing long deep dive
Speaker 3: story on the people behind this project and Dough a
Speaker 3: project before that have been hacked, and people who've come.
Speaker 2: Across from that.
Speaker 3: They had responded saying basically an email address that you
Speaker 3: posted to saying we all see the picture you're trying
Speaker 3: to paint here and consider it best grossly inaccurate, and
Speaker 3: they're saying they're confident of our results will speak for themselves.
Speaker 3: You talk of regulation, Amanda, what regulation could be put
Speaker 3: in place to ensure that projects being built like this
Speaker 3: don't have this question of whether it'll be a rug pull?
Speaker 15: Well, look, I mean there are regulations that we could
Speaker 15: use In trad FI, I prosecuted countless people who stole
Speaker 15: money as asset.
Speaker 1: Managers in trad file.
Speaker 15: So it's not a perfect system now, and a lot
Speaker 15: of times you're just relying on doing your own due
Speaker 15: diligence or as we see in CRYPTODYOLR, do your own research.
Speaker 5: Are there?
Speaker 15: I think there are particular regulations in DeFi because it's
Speaker 15: making certain financial acts decentralized.
Speaker 5: That's a lot.
Speaker 15: It's a longer complicated question, Amanda Wick, the.
Speaker 2: Insight consulting principle.
Speaker 3: We'll get you on for the longer, more complicated answers soon.
Speaker 3: We hope that does it for this edition of Blue
Speaker 3: Meg Technology Ed.
Speaker 5: Check out the pod.
Speaker 4: You know where to find find it on the online,
Speaker 4: on the Bloomberg platforms from New York and SF.
Speaker 5: This is Bloomberg Technology. M hmmm