Speaker 1: I'm Caroline Hyde of Bloomberg's world side quarters in New York,
Speaker 1: and I made Ludlow in San Francisco. This is Bloomberg
Speaker 1: Technology coming up, Tesla invested dat it kicks off and
Speaker 1: we bring you everything you need to know from Elo
Speaker 1: Musk's big event. And we'll bring you a conversation with
Speaker 1: the CEO of coin Base amid a broad regulatory crackdown
Speaker 1: on that industry. Is the seci is the company's staking product.
Speaker 1: Plus Capital g names Lala Sturdy as the new leader.
Speaker 1: We sit down with her to discuss the new role
Speaker 1: as the head of Google's growth investment fund. All that
Speaker 1: so much more coming up, but from private markets to
Speaker 1: public we check in on what was a slightly dour
Speaker 1: mood and the overall equity benchmark NASA one hundred off
Speaker 1: by nine tenths a percent. Worries about inflation, some of
Speaker 1: that manufacturing data here in the US showing that prices
Speaker 1: are still rising further than the federals ever want to see.
Speaker 1: The tenure yield therefore pushes higher boring costs rise. Tech
Speaker 1: falls off. Interesting that at China managed to actually have
Speaker 1: a pretty strong day. I'm looking at the Golden Dragon
Speaker 1: at China Index, so we're up three percent. The reason
Speaker 1: is actually their manufacturing data came in stronger than anticipated.
Speaker 1: This is why perhaps we're seeing a weekly US dollar
Speaker 1: flick it on. I want to see what crypto is
Speaker 1: doing versus US dollar because actually managing to hold its
Speaker 1: head above the water, up seven tenth percent over the
Speaker 1: last two days, even though the risk of risk assets
Speaker 1: have been selling off head YEP and from the macros
Speaker 1: to the micro we get straight to earning season salesforce
Speaker 1: frankly knocking it out the park. You see the shares
Speaker 1: up more than fourteen percent in after hours. There's given
Speaker 1: us a four year twenty four outlook for both revenue
Speaker 1: and EPs pretty significantly above expectations, and in the near
Speaker 1: term looking at the fiscal first quarter, also looking at
Speaker 1: revenue n EPs above expectations. We had a little bit
Speaker 1: of reaction from sell side stating that this is evident
Speaker 1: this is a company now more focused on profit. The
Speaker 1: cause about to get underway. Will give you those headlines
Speaker 1: as they come stock we have to pay close attention
Speaker 1: to is Tesla Tesla's holding its invest to day out
Speaker 1: in Austin after hours, we kind of modestly lower down
Speaker 1: three tenths of one percent. There is no one big
Speaker 1: headline to speak of yet, but they've teased two new
Speaker 1: evs in the works. They're covered in blankets on the screen,
Speaker 1: you know how Elon Musk does it, but also outlining
Speaker 1: what is a very clear path to a sustainable future.
Speaker 1: Bloomberg Shaun Okaine covers Tesla for us and is in Austin. Sean,
Speaker 1: what have we learned so far? Well, we've gotten a
Speaker 1: pretty big, high level picture from Elon Musk and Tesla's
Speaker 1: SVP Drew Baglino about the macroview they have of how
Speaker 1: they think we could shift the entire economy to a
Speaker 1: sustainable economy, sustainable energy economy. They've said that they're going
Speaker 1: to be releasing a white paper. They went through a
Speaker 1: whole bunch of big, impressive numbers, but we're only just
Speaker 1: now starting to get into what that's going to mean
Speaker 1: for Tesla as a company. So we have a couple
Speaker 1: of different executives on stage who are maybe hopefully going
Speaker 1: to talk about some new products in the next couple
Speaker 1: of minutes. Talk to us about the context here of
Speaker 1: a third master plan. Because you've written so eloquently before,
Speaker 1: Sean that well, the Second master Plan hasn't exactly been
Speaker 1: enacted yet. Yeah. I mean this is the thing that
Speaker 1: Elon Musk likes to do. It's a way of guiding
Speaker 1: investors and potential investors on where they're headed. Why he
Speaker 1: thinks that the company could be worth twice what Saudi
Speaker 1: r Emco is worth. So you know, they haven't finished
Speaker 1: executing on all of the ideas and the second master
Speaker 1: Plan from twenty sixteen, and this is a way of
Speaker 1: him sort of pushing those concerns aside about you know,
Speaker 1: execution worries and saying, hey, there's a much bigger picture here.
Speaker 1: We're trying to solve or contribute to solving something much
Speaker 1: bigger than just for what a company can do, and
Speaker 1: here's how we think other people can do it. There
Speaker 1: was also an emphasis on what it's going to take
Speaker 1: to get Tesla to its ultimate goal, and it was
Speaker 1: interesting that Drew Baglino went pretty early on to mining
Speaker 1: and access to raw materials. I think the line was
Speaker 1: that they're getting to require less mining in an electrified
Speaker 1: economy then we currently have in today's economy. What kind
Speaker 1: of things are we watching out for, What redheadlines can
Speaker 1: we expect across the Bloomberg if all goes to plan.
Speaker 1: I mean, we know from our own reporting that they've
Speaker 1: been in talks to possibly acquire certain lithium miners. They
Speaker 1: have been working on potentially building a lithium refinery, either
Speaker 1: here in Texas or maybe other sites in the United States.
Speaker 1: It's still not abundantly clear what their plan is at
Speaker 1: the moment with that, but they are looking at trying
Speaker 1: to get further down the supply chain. So if they're
Speaker 1: willing to talk about some of that stuff today in
Speaker 1: any kind of specifics, then that would be some pretty
Speaker 1: big news as far as how much they're willing to
Speaker 1: stake themselves in this economy. We've had some executives outlining well,
Speaker 1: the talk about the battle skills they've had for a
Speaker 1: Model three, the famous production hell that they had around that,
Speaker 1: and of course about that the cybertruck is coming this year,
Speaker 1: so they have shown the production capabilities. What many want
Speaker 1: to see, though, Sean, particularly this time, is their cost cutting. Well,
Speaker 1: their price cutting for some cars is a cheaper model
Speaker 1: in and of itself, right, Yeah, I mean, I think
Speaker 1: I would imagine part of the argument they're going to
Speaker 1: make is that whatever this new vehicle or this new
Speaker 1: vehicle platform entails. It's going to be folding in all
Speaker 1: of these things that they've developed over the years that
Speaker 1: they've been building the Model three and the Model Why
Speaker 1: these sort of efficiencies that they've bolted onto the ideas
Speaker 1: as they were being put out into the world, like
Speaker 1: casting giant pieces for the Model Y and putting them
Speaker 1: together as opposed to use the hundreds of pieces that
Speaker 1: were bolted together like a lot of regular automakers, and
Speaker 1: so being able to take some of those learnings from
Speaker 1: those programs, those vehicle programs, and do it from the
Speaker 1: ground up on a new vehicle platform, I would bet
Speaker 1: is going to be a big portion of why they
Speaker 1: think they can drive those costs down without losing too
Speaker 1: much of their margin. And especially scale. I mean, this
Speaker 1: is all going to be about scale, not just on
Speaker 1: the energy side of things, but how many vehicles they
Speaker 1: can make in the coming years. And if they're going
Speaker 1: to be building a much cheaper car, they're going to
Speaker 1: need a much bigger scale to be able to keep
Speaker 1: those margins up. Sean so great to get the context
Speaker 1: for me. Thank you, Sean o'caine. Let's take even deeper
Speaker 1: the Wesley Group Managing partner Steve Wesley is with us now.
Speaker 1: The reason is so important because he was on the
Speaker 1: Tesla board when Elon must debuted the company's initial master plan,
Speaker 1: and therefore it is so great to get your insights.
Speaker 1: We will also have plenty of time thinking about energy
Speaker 1: and efficiency from the government level as well, when we
Speaker 1: look at the master plan for sustainable energy economy. How
Speaker 1: much do you think that we have to take Elon
Speaker 1: Musk at his word here? Well, well, look he's our
Speaker 1: eline as a tendency to or over a promise a bit.
Speaker 1: But here's why this is a big deal. Today every
Speaker 1: auto company in the world is going all electric, and
Speaker 1: the reason is simple. They're safer, they're lower maintenance, they're faster,
Speaker 1: we're fun to drive, and they're greener. There's only been
Speaker 1: one big head with and that's been cost, and Tesla
Speaker 1: is about to change that. So today I think you're
Speaker 1: hearing them announced a dramatic reduction in manufacturing costs. Again,
Speaker 1: that comes down to lower battery costs, mature stamping machines, tools.
Speaker 1: They can produced cars more quickly with fewer parts than ever.
Speaker 1: SI's alluded to more robots so on all this leads
Speaker 1: to lower costs. I believe what's going to happen is
Speaker 1: going to be dramatic, and that is I think Tesla's
Speaker 1: going to trigger a global price for and it's going
Speaker 1: to rate for consumers deadly for some of the competition,
Speaker 1: or people don't quite understand yet about Tesla is the
Speaker 1: Tesla's already making cars in one third at the time
Speaker 1: of Volsaga as ten hours versus thirty hours. By using
Speaker 1: the battering techniques, this enables them to make over fifteen
Speaker 1: thousand dollars in profit per car. That's twice with Volsagun
Speaker 1: makes yeah, three times toilet it makes five times with
Speaker 1: ford maas to Tesla's the only company with the room
Speaker 1: to draw prices. It's going to create major consolidation industry.
Speaker 1: I rate news for the consumer competitors. See how low
Speaker 1: can they go when you think of a cheap auto,
Speaker 1: when you think of what price point they could unveil,
Speaker 1: How I couldn't that be for Tessa's own margins. Well,
Speaker 1: look again, they've got quite a ways to go, but
Speaker 1: they're leading the world in batteries. There's you know, batteries
Speaker 1: are roughly a third of the cost for their vehicle.
Speaker 1: They're also way ahead of the others what's called over
Speaker 1: the air software in this new next gen robotization of manufacturing,
Speaker 1: bigger stamping, fewer pieces, faster production. This all gives them
Speaker 1: an hedge. And the simple fact is they're about three
Speaker 1: years ahead of everybody else terms of manufacturing. Gm Ford
Speaker 1: trying to build a new plant here or there. Justice
Speaker 1: got five plants up and running today, six just announced
Speaker 1: in Mexico. They have not only established themselves it is
Speaker 1: the fastest powering auto company in the world fifty percent
Speaker 1: growth last year, but the most profitable. What's not to
Speaker 1: like about that? Shares down about a percentage point now
Speaker 1: in off their eyes trading Steve, you may have seen
Speaker 1: my reporting last week that Russ gub had suspended his
Speaker 1: attempts to gain a board seat in part because Tesla
Speaker 1: had moved to allay some of his fears. I'm looking
Speaker 1: at the speakers so far, Zach kirk on CFO opened
Speaker 1: up the show. Elon did speak, but so did Drew Bagnino,
Speaker 1: Franz von the Wholhausen and now Lars more of a
Speaker 1: How much do you think this is them trying to
Speaker 1: demonstrate that there is a plan outside of Elon musk
Speaker 1: a succession plan. I think the message is loud and clear.
Speaker 1: You don't invest in Tesla just because of Elon. You
Speaker 1: invest because it is the leading EV company and what
Speaker 1: is an EV world? And again, just look at the
Speaker 1: fast everybody else one or two EV plants up and running.
Speaker 1: Tesla's got five heading to six. Nobody else has the
Speaker 1: capacity to grow like Tesla will this year. No other
Speaker 1: auto company in the world is coming close to fifty
Speaker 1: percent growth, add to the highest level of profitability. This
Speaker 1: is a tough story to be Now, there's one other
Speaker 1: story that almost nobody has talked about today you're going
Speaker 1: to hear Elon and the Tesla Group address, and that
Speaker 1: is they're no longer just an auto company. They're an
Speaker 1: auto and an energy company. And what they have to
Speaker 1: sell is powerful, and that is Tesla and Tesla alone
Speaker 1: can sell you the electric car, solar panels for the roof,
Speaker 1: powerwall for your home. They can help you create a
Speaker 1: world where you'll never have to pit Hold on, Steve,
Speaker 1: hold on, hold on, because, as Caroline pointed out earlier,
Speaker 1: a lot of this was in master Plan Part one
Speaker 1: and two, and much of that seems unfinished. That's why
Speaker 1: we are should we take some of this with a
Speaker 1: grain of salt, because we might not see it materialize
Speaker 1: for another decade. If that you're seeing it materialized now.
Speaker 1: And look, I'm not going to tell you Elon doesn't
Speaker 1: keeps the over promise that Livery does. But even when
Speaker 1: he finally gets there where they heck hand of the competition.
Speaker 1: So they've already offering ex turnkey solution around the country
Speaker 1: energy realities from going up now producing mega packs. This
Speaker 1: is one point five mego stords to university's, large corporations, hospitals.
Speaker 1: It's all rolling out now. But I think the big
Speaker 1: picture today is going to be Tesla is creating an ecosystem.
Speaker 1: It's more than an auto company, but it's pretty darned
Speaker 1: fast an auto company as it is, and the extent
Speaker 1: they can cut costs while they go mobile with a
Speaker 1: pretty good product. Two is that's a hard story. Well
Speaker 1: so difficult supply chain here time and time again. How
Speaker 1: will the movement be hindered by access to lithium to
Speaker 1: cobal takoppa. You know, I think that story has been
Speaker 1: really overreported. And get four or five years ago we
Speaker 1: all heard it by my lithium mind now, or you've
Speaker 1: got to go to mongolium. They're the only people wolved
Speaker 1: with rare earth minerals. This turned out not to be
Speaker 1: the case. Two quick points. One, lithium is actually one
Speaker 1: of the most plentiful minerals on the planet. They're lithium
Speaker 1: minds all over California in the western half of the US.
Speaker 1: You nunited need to over the via or mon and
Speaker 1: the minds were opening up now in a response to
Speaker 1: wise the prices. Second, it was those weird earth minerals
Speaker 1: like cobalt, manganese, nickel, that we're going to be tough
Speaker 1: to get to. You can only find them in the
Speaker 1: congo now. So prices peaked for a little bit. You're
Speaker 1: now seeing cobalt particular, lowest prices we've seen in some time.
Speaker 1: So the market is responding. Elon and the Tesla team
Speaker 1: were fairly stright to integrate earlier than the others. I
Speaker 1: think it's give them an edge. Yeah. Sources told me
Speaker 1: that actually they're looking at a number of mining options
Speaker 1: and weighing up what's best for them. The stocks are
Speaker 1: more than sixty percent year today. We asked our audience
Speaker 1: if this event right now is going to act as
Speaker 1: a catalyst for the stock. The audience relatively split right,
Speaker 1: some say yes because of what this is going to
Speaker 1: be announced. Some of others, disagreeing, say no, this is
Speaker 1: a sell the news event. To your mind, based on
Speaker 1: how much you've heard, how high is the bar here
Speaker 1: for Tesla to prove the big things coming? Well? Look,
Speaker 1: last year was a bad year for Tesla. He was
Speaker 1: caught up in headlines about Twitter. He personally sold forty
Speaker 1: billion dollars with the shares mind modeling number that push
Speaker 1: the shared bries down. When it comes to smart investing,
Speaker 1: look at the boring stuff like the numbers fifty percent
Speaker 1: growth twenty twenty one, twenty twenty twenty two. They're going
Speaker 1: to do the same thing this year, huge profitability, and
Speaker 1: the really boring part is inside the factories that most
Speaker 1: people can't see. You're going to hear again and again
Speaker 1: about state of the art manufacturing improvements, costs down curves
Speaker 1: that the incumbents for some reason haven't figured out. And
Speaker 1: don't take my word for it. Just look at the
Speaker 1: average profitability per vehicle and they've got an edge, and
Speaker 1: I think they're going to be useless in pursuing it.
Speaker 1: They've just taken prices down roughly fifteen percent. If they
Speaker 1: take them down another fifteen percent, that is awfully hard
Speaker 1: for the other right. Wesley Group managing partner Steve Wesley,
Speaker 1: of course on Tessa's board back two thousand and seven
Speaker 1: when Elon Musk was getting Master Plan Part one off
Speaker 1: the ground. And here we are at Master Plan Part three.
Speaker 1: We'll see how it goes. M The Chip Giant Banks
Speaker 1: Bicoft Bank will pause plans for a London Stock Exchange
Speaker 1: listing and focus solely on an IPO in New York.
Speaker 1: This according to Bloomberg sources. Bloomberg's Crystals joins us Now Chrystal,
Speaker 1: what is the thinking behind this? Yeah, So, as we know,
Speaker 1: ARM is based in England and it's one of the
Speaker 1: crown jewel of the European tech scene. So it was
Speaker 1: actually a really big loss for the London Stock Exchange,
Speaker 1: for London as a whole. So we've always known that
Speaker 1: the plan is to have a primary listing in New
Speaker 1: York and perhaps to a secondary listing and London, And
Speaker 1: now the thinking has kind of shift and they will
Speaker 1: focus solely on a New York listing for the deeper investor,
Speaker 1: poor and high evaluation, and that's always been the appeal
Speaker 1: of the New York venue and obviously huge loss for London.
Speaker 1: And I'm sure they will have even more lobbying effort
Speaker 1: to try to get them back. I mean, mushisunac, the
Speaker 1: Prime Minister has already been involved, so no much not
Speaker 1: sure how much harder lobbying they can get for this.
Speaker 1: What is a Cambridge based business when you say it's
Speaker 1: going to hire evaluation who in the US? For what reason?
Speaker 1: Why would a deeper market more investors automatically mean that
Speaker 1: they would value the company differently. So first of all,
Speaker 1: you can look at the peers. There are just more
Speaker 1: companies of this same background, of the same market, of
Speaker 1: the same scale listed in New York. And if you
Speaker 1: look at overall market liquidity, you just have more investors
Speaker 1: that have a US pocket and they have more leeway
Speaker 1: to invest in US list a company and as a result,
Speaker 1: you just generate a little bit more interest. That said,
Speaker 1: a lot of most of this is still theoretical. There's
Speaker 1: no IPO market right now. We were talking about how
Speaker 1: it could be another couple of months, a couple of
Speaker 1: weeks until things comes back so whatever this is, it
Speaker 1: will hold off and we will not know the actual valuation,
Speaker 1: but they're aiming for at least sixty billion, which is
Speaker 1: a very very big number compared to wear SoftBank got it.
Speaker 1: What's interesting about the reporting here is that London tried
Speaker 1: very hard to win this business and ultimately they weren't successful.
Speaker 1: But what do we know about those efforts. Yeah, like
Speaker 1: Caroline said, Sooner personally actually try to pitch a company,
Speaker 1: and as we know he was a former Goldman person
Speaker 1: and Goldman was on the listing, so it wouldn't be
Speaker 1: surprising if he went to his own firm TAPESO colleagues. Also,
Speaker 1: the London Stock Exchange Chief executive officer had very publicly
Speaker 1: said that they have worked very very hard and they
Speaker 1: want to they want the energy, they want to win
Speaker 1: this deal and they would say young sextapp say hungry
Speaker 1: to when the arm listening and more technology listing hopefully
Speaker 1: would have come after, But so far it seems like
Speaker 1: it's not been a huge one. Is that any way
Speaker 1: that this is related to Brexit or anything like that,
Speaker 1: or is this purely a size of market situation So
Speaker 1: we haven't heard anything about that, but it wouldn't be
Speaker 1: you know, outrageous if Brexit was one of the consideration.
Speaker 1: It definitely limits investment coming into the UK, especially when
Speaker 1: you have investment professional having to real ocay into continential
Speaker 1: Europe and you just have a little bit more outflow
Speaker 1: and just just separate the markets more and overall again
Speaker 1: like comparing to New York, it's just not as deep
Speaker 1: a market, and it would make sense for them to
Speaker 1: focus on New York, which always has been the plan,
Speaker 1: but now they're just scrapping the secondary listening AH Corporates,
Speaker 1: Pretty nice, Crystalcy. Great to have a covering this potential
Speaker 1: IPO coming up at some point in the US at
Speaker 1: least coming up. Well, Athletes get in the VC game
Speaker 1: and Stripe is cutting its valuation. All this and more
Speaker 1: in the VC round up next d Yeah, and I
Speaker 1: want to get back to those shares of Salesforce and
Speaker 1: now for hours pushing even higher now actually we're up
Speaker 1: sixteen percent. Ny Off on the calls, saying that the
Speaker 1: company is completely fully disbanded its M and a committee.
Speaker 1: It looks like a big part of this story Caro
Speaker 1: is Salesforce doing what the activists investors wanted to hear
Speaker 1: which is focusing on profit with that big outlook for
Speaker 1: four year fiscal twenty four revenues going to be thirty
Speaker 1: four point five to thirty four point seven billion dollars
Speaker 1: in fiscal twenty four, way above what the street was
Speaker 1: looking for. That call underway, will continue to track it.
Speaker 1: This Spoonberg time now for our VC round up, and
Speaker 1: starting with Stripe, which has just cut its share price
Speaker 1: for its fundraising round, increasing its implied valuation by about
Speaker 1: ten percent to around fifty billion dollars. Now it's all
Speaker 1: according to the information it's citing to people familiar with
Speaker 1: the matter. The payment software company is now setting the
Speaker 1: per share price and around twenty dollars. That's down from
Speaker 1: twenty three a share previously. Meanwhile, Tennis icon Venus Williams's
Speaker 1: joining private equity firm Top Spin Consumer Partners to tackle
Speaker 1: health and wellness business investments. Now, the seven time Grand
Speaker 1: Slam title holder will take on the role of operating
Speaker 1: partner at the middle market investment shop. This is as
Speaker 1: of course, peas an industry scrappling with slowing economy, with
Speaker 1: tightening credit markets, and keeping with the athlete's theme baseball
Speaker 1: legend Alex Rodriguez, You knows a Rod and his business
Speaker 1: partner Mark Law have raised another twenty million dollars in
Speaker 1: their funding round for the new ticketing and fan experienced
Speaker 1: business Jump, bringing the total funding to thirty minu million
Speaker 1: dollars now. The round was led by four Run Adventures
Speaker 1: and joined by Courtside Adventures, Will Ventures and Mastery Ventures.
Speaker 1: Additional investors include Meta Lab and Drive By DraftKings. And
Speaker 1: you've got a key story. We've got to be witching
Speaker 1: in well the public markets, right, Yeah, we've got to
Speaker 1: get back to salesforce and what we've got coming up,
Speaker 1: because he only's calls ongoing real push higher in after
Speaker 1: hours in I think the focus right now for investors
Speaker 1: is Benioff's doing exactly what we asked him to focus
Speaker 1: on cost cuts, focused on profit, and that stock really
Speaker 1: pushing higher carrict Yeah, I mean more than fifteen percent
Speaker 1: jump on the higher side. Many really feeling that he's
Speaker 1: addressing the fears that many an activist investor put to
Speaker 1: it the fact that they might be still spending on MNA,
Speaker 1: the fact that they'd be worrying about, you know, the
Speaker 1: splurging the marketing spend. Of course, in many ways put
Speaker 1: Sam Francisco and all other hubs on the map. But
Speaker 1: ultimately this is appeasing the new narrative of this economy
Speaker 1: that it has to be profitability first, right, Think about Slack,
Speaker 1: think about MuleSoft. The single headline on the Bloomberg terminal
Speaker 1: from ben Off Salesforce has fully disbanded our m and
Speaker 1: a committee. We're getting a much more severe decline in
Speaker 1: the earnings and that's going to happen across the economy.
Speaker 1: Are the evidence is already overwhelming. It's been most apparent
Speaker 1: in the tech space because that's where the overinvestment was
Speaker 1: the most egregious. And now we're seeing companies deal with that,
Speaker 1: but we think they're going to be woefully slow to
Speaker 1: get those costs down to a level where you think
Speaker 1: they need to to get the margins to stabilize. Welcome
Speaker 1: back to Boboy Technology. I'm Caroline had in New York
Speaker 1: and now med Lovelow in San Francisco. And that was
Speaker 1: Morgan Stanley, Chief US equity strategist Mike Wilson speaking earlier
Speaker 1: this morning. Let's turn though, from the public markets to
Speaker 1: the private markets in tech were some big news Capital
Speaker 1: g Google's growth investment fund has named Laylas Sturdy as
Speaker 1: its new managing partner and leader the Movements. Sturdy one
Speaker 1: of the only women actually to lead a major venture firm,
Speaker 1: and I'm delighted to say Leila joins us now here
Speaker 1: in San Francisco. I asked you this off caram Im
Speaker 1: and ask you again, Well, your industry peers surprise by
Speaker 1: this appointment, bearing in mind your history at this firm anyway, Well,
Speaker 1: I've been investing for ten years, so I have a
Speaker 1: number of amazing colleagues and peers in the industry, and
Speaker 1: I'd say it's been amazing to see the support in
Speaker 1: the outreach today. So I don't know if they were surprised,
Speaker 1: but they were certainly supportive. And we can get into
Speaker 1: the portfolio some of the investments you've made. I think
Speaker 1: you know this is an interesting firm, a lot of
Speaker 1: capital to play with. Would you say that in your
Speaker 1: new position of leadership, will you change the investment thesis
Speaker 1: the strategy from how it has been. Well, we will
Speaker 1: keep building on the success we've had. So Capital D
Speaker 1: we're focused on investing in generational growth technology companies, so
Speaker 1: we typically invest in Series B, the Series D of
Speaker 1: hypergrowth companies across consumer enterprise. So some of the companies
Speaker 1: us in our CrowdStrike, UiPath, Stripe, Dual Lingo, so really
Speaker 1: amazing founders, amazing companies operating in big markets. And we
Speaker 1: make very concentrated bets. So we do a lot of
Speaker 1: work to really find and develop investment theses in the
Speaker 1: world's most exciting technologies and markets and companies, and then
Speaker 1: we make big investments. So we typically invest fifty it
Speaker 1: up to two hundred million in these companies and partner
Speaker 1: with them over the long haul. So that's what's worked
Speaker 1: really well for us, and we'll continue to focus on
Speaker 1: that strategy, keep building a great team and keep having
Speaker 1: a global focus. You back them, and the anecdotes, the
Speaker 1: stories of how you back them and evacts the co founders,
Speaker 1: the CEOs and selves. I think of Jue Lingo, how
Speaker 1: much they've said that your support, in particular Lela was
Speaker 1: so integral to the building of the strategy of the
Speaker 1: business and of course the eventual really successful exit. And
Speaker 1: I think a UiPath as well, which again you wrote
Speaker 1: a check at a small valuation and it just apts
Speaker 1: went parabolic. But the way you have to chase UiPath
Speaker 1: down for example. That's not the environment we're currently in,
Speaker 1: is it. Or are you still going to have to
Speaker 1: be that much more competitive than others? Well, that's what's
Speaker 1: fun about the investing world is with the macro things
Speaker 1: are constantly changing, and I do believe that you will
Speaker 1: still have to compete and work to invest in the
Speaker 1: very best technology companies. So you cited a few that
Speaker 1: I've been very lucky to partner with UiPath due lingo,
Speaker 1: and the process of finding these companies does take a
Speaker 1: lot of work. It doesn't always mean chasing founders around
Speaker 1: the world, but it means digging deep into the investment,
Speaker 1: theces and the opportunities that we think are going to
Speaker 1: generate the biggest returns, and then it means adding value
Speaker 1: to those companies. So once we partner and make an investment,
Speaker 1: we work really hard to be very active board members
Speaker 1: and to find different ways to support the companies, which
Speaker 1: is something that's quite different about Capital G. Because Google
Speaker 1: and Alphabet are our single LP at Capital G we
Speaker 1: have a really large network of advisors inside of Alphabet,
Speaker 1: and these are technical advisors, go to market advisors, operational
Speaker 1: advisors that we can bring to partner with our companies
Speaker 1: on issues or challenges of scaling and is a unique
Speaker 1: thing that we can do to add value. So we've
Speaker 1: helped companies on pricing, studies, on We've actually started the
Speaker 1: inside sales team for CrowdStrike in our office at Capital G.
Speaker 1: So lots of different creative ways that we keep trying
Speaker 1: to be the best partner and that we can and
Speaker 1: I think that will help us continue to be able
Speaker 1: to invest in partner with the best founders. And now
Speaker 1: you've got to help companies scale with profit not growth
Speaker 1: at all cost. I think of Stripe. Of course you wrote,
Speaker 1: well you cod led the Series D when it was
Speaker 1: worth nine billion and still even when the down potential
Speaker 1: down round was seeing it's it's well, their own readjustment
Speaker 1: of their pricing is still fifty billion. It's extraordinary growth
Speaker 1: for this payment's company. And I'm interested as advice you
Speaker 1: now need to give needs such as the Callison Brothers.
Speaker 1: So it's obvious everyone that the macro environment has changed
Speaker 1: markedly over the last eighteen to twenty four months. So
Speaker 1: I think it is true that companies are much more
Speaker 1: focused on profitability. But a Capital G and all the
Speaker 1: companies we work with have always been very focused on
Speaker 1: the business model and on the unit economics and not
Speaker 1: only growing quickly, but growing in a way that builds
Speaker 1: a sustainable, enduring business. And so I think they'll the
Speaker 1: capital will be more expensive and harder to find for
Speaker 1: most companies, but those that have really strong business models
Speaker 1: will be able to continue to raise and we'll be
Speaker 1: able to continue to grow at really accelerated rates. So
Speaker 1: I think when you look back historically through the last
Speaker 1: few downturns and through capital markets that were harder, you
Speaker 1: see that some of the best companies were founded and
Speaker 1: funded and grew rapidly in those stages. The third party
Speaker 1: data shows a drop in activity or dollar deal value
Speaker 1: twenty twenty one to twenty too. But we had Matt
Speaker 1: Harris from Bain Capital Benches on twenty four hours ago.
Speaker 1: He says, this is a buying opportunity right now. They
Speaker 1: want to be out there writing checks. Basically, are you
Speaker 1: in a similar position to him? I completely agree. I mean,
Speaker 1: the reality is the macro environment has brought prices down,
Speaker 1: but there's still and valuations down, but the quality of
Speaker 1: companies is still extraordinarily high. So we see whether it's
Speaker 1: these secular trends like cloud computing, data AI driving really
Speaker 1: exciting opportunities in transforming businesses and creating large new opportunities.
Speaker 1: And you see so many more businesses out there looking
Speaker 1: for funding that are really adding value to customers, that
Speaker 1: are growing in more efficient ways, and the valuations have
Speaker 1: gone down. So we look even though it's a harder
Speaker 1: macro environment, we look at this as a time where
Speaker 1: we think we can make some of our best investments.
Speaker 1: Caroline mentioned it a moment ago, and it would be
Speaker 1: remissive me not to ask, but the information reported twenty
Speaker 1: four hours ago the Stripe has cut its value by
Speaker 1: about ten percent, still at fifty billion. You are involved
Speaker 1: or have done prior rounds with that company, What is
Speaker 1: your sort of response to that report? So I won't
Speaker 1: comment on any particular fundraising round of any of my
Speaker 1: portfolio companies. I will say that Stripe is an incredible company,
Speaker 1: and so I've been love being involved since we co
Speaker 1: led the Series D in twenty sixteen, and I believe
Speaker 1: that it's one of the biggest markets and best teams
Speaker 1: in technology. So excited to be a part of it.
Speaker 1: And I think there's a long, long, long runway ahead.
Speaker 1: I hope you appreciate why we have to ask the
Speaker 1: question you mentioned at the beginning, global, and Caroline and
Speaker 1: I are really zeroed in on that. Yeah, where are
Speaker 1: the opportunities outside the United States right now? Geographically speaking? Absolutely.
Speaker 1: So one of the exciting things is that technology teams
Speaker 1: have been going after global markets and growing globally for
Speaker 1: a long time. So if you look at some of
Speaker 1: our most exciting investments of capitol G companies like UiPath, Calibra,
Speaker 1: these are actually software companies that were founded outside of
Speaker 1: the US. UiPath was founded in Romania, moved their headquarters
Speaker 1: to New York, but has been a global operation from
Speaker 1: the beginning, so has access to markets in Asia, Europe,
Speaker 1: the US, and I think you see most big software
Speaker 1: markets for example. Those companies are all growing their teams
Speaker 1: internationally and growing customers internationally much earlier in their growth
Speaker 1: cycle than they used to do. So we look for
Speaker 1: those founding teams wherever they're starting, in India, in Europe,
Speaker 1: in the US, and we help partner with them to
Speaker 1: grow their organizations and their markets globally. So that's one example.
Speaker 1: We've also invested in several companies in India, China, and elsewhere.
Speaker 1: So we see opportunities in lots of different markets throughout
Speaker 1: the world. China still, so China we've been spending less
Speaker 1: time on. We have made investments there in the past,
Speaker 1: but we've been spending less time there. And therefore, from
Speaker 1: geography into industry group because the breadth of your portfolio,
Speaker 1: the fat that you all B to B B two C,
Speaker 1: whether you're in cybersecurity and an enterprise infrastructure, in language learning.
Speaker 1: In many ways, I'm interested in where you're looking right now.
Speaker 1: Everyone talking about utificial intelligence. Is that a particular sweet
Speaker 1: sport or what else? Do you think it's enticing? Yeah?
Speaker 1: So luckily for Capital g A, we have a large
Speaker 1: fund and we have a diverse and fantastic group of
Speaker 1: general partners, so we're able to cover a wide variety
Speaker 1: of sectors within technology. So we spend a lot of
Speaker 1: time in cybersecurity, data, business process automation, as well as
Speaker 1: consumer marketplaces, commerce and as you just mentioned, artificial intelligence.
Speaker 1: So we see opportunities in lots of different places. And
Speaker 1: the data side, we've invested in data data, coup data
Speaker 1: bricks in the business process automation space, a theme we're
Speaker 1: really excited about is the growth of no code software,
Speaker 1: which is visual application platforms that make it easy for
Speaker 1: people without technical backgrounds to come and build software different applications,
Speaker 1: whether it's a website or a more sophisticated business process applications,
Speaker 1: So a company like Webflow. In the AI space, we've
Speaker 1: been spending a lot of time and that's an area
Speaker 1: that we're really excited. We can dig into advisors we
Speaker 1: have within Google to help us build and test our
Speaker 1: investment theses, and we think that AI is such a
Speaker 1: big opportunity. It's going to be a platform shift where
Speaker 1: probably the next next Google, the next Microsoft is going
Speaker 1: to be born, as well as incumbents who have real
Speaker 1: strengths are going to incorporate I AI into their business processes. Well,
Speaker 1: when you find that business, you'll have to come back
Speaker 1: onto the show and tell us about it. I can't believe, Caroline,
Speaker 1: we didn't even get fully into AI in this conversation.
Speaker 1: Capital G managing partner Layla Study and Caroline just frankly
Speaker 1: a really big moment for this industry actually, with Layla
Speaker 1: taking the reins at Capital G. Yeah, extraordinary, and we
Speaker 1: thank us so much for coming on discussing all of
Speaker 1: it and I'll wisher, Well, we're going to dig in
Speaker 1: so much more to the world of VC, particularly with
Speaker 1: plenty of diversity of thought throughout. But let's stick with
Speaker 1: executive changes for a minute here, because PayPal, you know,
Speaker 1: it's on the hunt for the next CEO. Dan Shulman
Speaker 1: is planning on his exit at the end of this year,
Speaker 1: and look, the company is now working hard to try
Speaker 1: and find his replacement. They've got away whether to seek
Speaker 1: a cost cutter or another visionary. Meanwhile, the payments firm
Speaker 1: is also trying to recover from a year long slide
Speaker 1: that's raised to get this two hundred and seventy nine
Speaker 1: billion dollars in market value. But coming up, or we're
Speaker 1: just talking about a AI, let's get into the world
Speaker 1: of chap GPT. It's sparring a wave of investments as
Speaker 1: companies from Meta but also to Tapes Street to a
Speaker 1: home depot flood Ernie Schools were commentary about their artificial
Speaker 1: intelligence efforts. Zed we've got to dig in, yeah, and
Speaker 1: also another company using AI Tesla. I'm looking at shares
Speaker 1: and after hours we're actually getting a little deep and
Speaker 1: now down two point seven percent. We knew that this
Speaker 1: master plan Part three would be a sell the news
Speaker 1: of then we haven't really had any subset onted product update,
Speaker 1: and that seems to be what's happening for that event ongoing,
Speaker 1: Carra will track it, will be talking about it for
Speaker 1: the next decade. I'm told this is Bloomberg. I want
Speaker 1: to make your invest sacking. Well, apparently you just need
Speaker 1: to start joking up artificial intelligence in your earning schools.
Speaker 1: Get this references to AI relatable terms. This earning season
Speaker 1: up seventy seven percent compared to this time last year.
Speaker 1: And sure the big tech juggernaughts are doing it, the
Speaker 1: likes of Meta, Microsoft, Alphabet Zoom for example. For some
Speaker 1: of our companies, fashion giants like Tapestry, equipment makers like Caterpillar.
Speaker 1: You're getting banks like Wells Fargo getting in on the
Speaker 1: actual and two no wonder this is happening. Just think
Speaker 1: of the companies with AI expertise and what their stops
Speaker 1: have done of late. In Nvidia, the chip making company
Speaker 1: that helps you with the computing power for AI tasks,
Speaker 1: It's stock is the best performing one this year in
Speaker 1: terms of megacats. Got AI on your name, Bingo, think
Speaker 1: of big Bear AI. It's up three hundred percent C
Speaker 1: three AI. It's more than doubled so far this year.
Speaker 1: But how are you going to distinguish the height from
Speaker 1: the reality. While the advice is state discipline, understand what
Speaker 1: the business actually does, get to know the management, get
Speaker 1: to understand the competitive mode that they have, and also
Speaker 1: get to understand what the valuation really is. Ed. Let's
Speaker 1: give you the visual. I mentioned a few of those
Speaker 1: companies that have AI in their name, Big Bear AI,
Speaker 1: check it out. So we around thirty six percent up
Speaker 1: so far this year. You think of the likes a
Speaker 1: C three AI. We've interviewed the CEO of late more
Speaker 1: than double and I'm looking at BuzzFeed, which quard announced
Speaker 1: its own aim musing within some of its quizzes up
Speaker 1: one hundred and twenty five scent. And if we take
Speaker 1: a look at which sectors mentioned AI, most of course
Speaker 1: you're going to be thinking about the technology companies, so
Speaker 1: they're going to be leading the charge and the orange here.
Speaker 1: But actually just everyone is piling on in financials as
Speaker 1: thinking that Wells Fargo was out there giving its turning
Speaker 1: of focus of AI. Really, is there any company I
Speaker 1: wonder that isn't talking about it? I absolutely love that
Speaker 1: chart far right hand side of the screen. Your left
Speaker 1: hand side says it. All the recent fura in the
Speaker 1: first quarter of our bonkers this has all gone. But
Speaker 1: you are right to point out there are sectors that,
Speaker 1: by right you don't think should have anything to do
Speaker 1: with AI. Yeah, but actually when you dig into the
Speaker 1: nitty gritty, they do. The fact that you know you
Speaker 1: might be using artificial intelligence to be able to ensure
Speaker 1: that you're selling the right handbag at the right price
Speaker 1: point in the way right visual, the way in which
Speaker 1: we're seeing Home Depot, even Caterpillar and a company that
Speaker 1: is so ahead of its time in terms of trying
Speaker 1: to have autonomous tractors, it too is trying to understand
Speaker 1: how AI can develop the way in which they produce
Speaker 1: a manufacture equipment and attracting all of these names on
Speaker 1: a daily basis. Thank you very much, Caroline Now. Coin
Speaker 1: base CEO Brian Armstrong says he is prepared to defend
Speaker 1: the company's staking products in court. Shares of coin base
Speaker 1: it down more than sixty percent in the past year
Speaker 1: is regulators have cracked down on cryptsite practices. Here's some
Speaker 1: of the conversation he had Whip Blomberg Shnati Bassak. We
Speaker 1: recently saw there was a settlement with Kraken who that's
Speaker 1: another exchange out there, and they have what they called
Speaker 1: a staking product. It was kind of more of a
Speaker 1: yield product. But you know, in coin basis case, our
Speaker 1: staking product is not a security. There's many differences. I mean,
Speaker 1: we customers never turn over their assets to coin base,
Speaker 1: for instance. They're they're always in the customer's possession and
Speaker 1: we're really just providing a service that passes through those
Speaker 1: coins to help them, you know, participate in staking, which
Speaker 1: is a decentralized protocol. So that's an important part of
Speaker 1: you know, the cryptoeconomy that we want to make sure
Speaker 1: that we ensure that that's out there, and you know,
Speaker 1: we're prepared to defend that in court if we need to,
Speaker 1: but you know, we never we're never looking for a fight.
Speaker 1: We want to work collaboratively with regulators all over the world.
Speaker 1: But you know, we have to follow a rule of law,
Speaker 1: and in this case, I think we're well within the
Speaker 1: law given the stands the SEC has been taking regarding
Speaker 1: defining certain assets of securities. Is there anything that you
Speaker 1: think we'll need to get to that point. Well, you know,
Speaker 1: the SEC has expressed their view about what is a security,
Speaker 1: and they've taken kind of an expansive view of that.
Speaker 1: I think, you know, coin Base, we've evaluated over a
Speaker 1: thousand different assets, and as I mentioned earlier, eight hundred
Speaker 1: of them we've rejected and we do think they have
Speaker 1: some properties of being a security, so we don't trade
Speaker 1: those today. Another two hundred or so of them we
Speaker 1: do trade today, and we feel that those are commodities.
Speaker 1: So you know, look, I think as a as a CEO,
Speaker 1: we want to basically just have a clear rule book,
Speaker 1: right and if a clear rules are published, we're happy
Speaker 1: to follow it. And if and if those rules change,
Speaker 1: you know, we're happy to follow those. But I think
Speaker 1: you know, when we when we became a public company,
Speaker 1: we explained to the SEC and our S one filing
Speaker 1: and in dozens of meetings that we've had with the SEC.
Speaker 1: I think we worked pretty collaboratively with them. We've explained
Speaker 1: into our business to them many times, including in our
Speaker 1: S one and you know, they approved us to become
Speaker 1: a public company. So we'll continue working with regulators all
Speaker 1: over the world about where the boundaries are on what's
Speaker 1: a commodity. What's the security or what is something else
Speaker 1: we're setting once more for our Bloomberg radio and television audiences.
Speaker 1: In conversation with coin base CEO Brian Armstrong, you know
Speaker 1: we're talking about the SEC and state regulators as well.
Speaker 1: You know, in regulatory filings you've noticed that you've received
Speaker 1: investigative subpoenauts from the SEC and state regulators. How and
Speaker 1: when do you get those resolved? Yeah, well, subpoenas are
Speaker 1: really just requests for information, right, and so we're in
Speaker 1: dialogue with regulators not only here in the US at
Speaker 1: the state and federal level, but really around the world.
Speaker 1: I mean we're in Europe, European markets, and you know,
Speaker 1: in Singapore and Australia, et cetera, Canada, many different markets
Speaker 1: around the world. So I think subpoenas are an important
Speaker 1: part of the process. That's that's them asking us a
Speaker 1: question and saying we'd like more information on this, and
Speaker 1: we're happy to do that. That was coin Base CEO Brian.
Speaker 1: I'm strong and believe Bacnalty Bassak, who can doucte that
Speaker 1: end joins me. Now for more. You went really deep
Speaker 1: on the relationship Shinali with the sec they've got history,
Speaker 1: Gary Gensler and Brian Armstrong. My question really though, is
Speaker 1: moving on from that, what do we learn about the
Speaker 1: health of that business coin Base right now and actually
Speaker 1: the crypto market more broadly. Well. I think one thing
Speaker 1: interesting that he said to us too was the idea
Speaker 1: here that a lot of the assets that are associated
Speaker 1: with coin base, they have really the CFTC as a
Speaker 1: main regulator, and a lot of these assets are kind
Speaker 1: of viewed as commodities as well. It's the definition and
Speaker 1: that we were looking at for a lot of the
Speaker 1: crypto assets in the universe, and he was pretty specific
Speaker 1: about how they choose not to list assets. I think
Speaker 1: another interesting point here is as the SEC moves on
Speaker 1: and as other regulators move on beyond tokens and securities,
Speaker 1: here you're also asking about staking, and you're asking about
Speaker 1: stable coins and other part of the crypto ecosystem that
Speaker 1: helped provide liquidity to the system and help move assets
Speaker 1: from one place to another. I think the stable coin
Speaker 1: question is particularly relevant because, of course we know coinbase
Speaker 1: has a close relation ship with Circle and USDC and
Speaker 1: holds a bit of it on its own kind of
Speaker 1: treasury here, so you know, the relationship with the regulators
Speaker 1: here is super interesting for a lot of reasons. But
Speaker 1: you know, even though we've seen that decline over a
Speaker 1: year in coin basis stock, they've been on a tear
Speaker 1: this year, even with the SEC really taking a hard
Speaker 1: look at things like staking across the industry and stable
Speaker 1: coins across the industry. Yeah, I'm strong saying he was
Speaker 1: quite bullish. Quote on USD coin just so much coming
Speaker 1: out of that interview, blue MOTIONALI base, thank you so much. Oh,
Speaker 1: there's some big changes coming to this show, ed, and
Speaker 1: I'm so excited to be doing it with you. This
Speaker 1: same tech coverage, you know, but a new time frame
Speaker 1: twelve pm Eastern little earlier few nine am San Francisco. Yeah,
Speaker 1: no worries. This is worth getting up for bank smack
Speaker 1: in the middle of the markets day. And you and
Speaker 1: I have learned so much in recent weeks about how
Speaker 1: important the interplay is between public and private markets, and
Speaker 1: this new time we can really own that space. Yeah,
Speaker 1: market moves in the public, but also the moves that
Speaker 1: are happening in private and the people behind this, the
Speaker 1: innovation behind it, the diversity of thought and leadership. I
Speaker 1: cannot wait to get into all of it. Yeah, and
Speaker 1: a quick look at Tesla because the investiday is ongoing.
Speaker 1: Perfect example. We're talking about innovation, we're tracking the market moves.
Speaker 1: It's a crazy story about master Plan Part three. We're
Speaker 1: revealing our own masterplan on this show. Character very nicely done.
Speaker 1: After hours, still training lower for Tesla by two point
Speaker 1: seven percent. We will digin into it more tomorrow. But
Speaker 1: that does it for this edition of Bloombo Technology. So
Speaker 1: much to recap. Check out the podcast, iHeart Apples, Spotify,
Speaker 1: wherever you get your podcasts. Big news out of b tech,
Speaker 1: This is Bloomberg