Speaker 1: From Marhart where Innovation, Money and power Collie in Silicon
Speaker 1: Vallet NBN. This is Bloomberg Technology with Caroline Hyde and
Speaker 1: Ed Ludlove.
Speaker 2: I'm Caroline Hyde at Bloomberg's world headquarters in New York, and.
Speaker 3: I'm Med Ludlow in San Francisco. This is Bloomberg Technology.
Speaker 2: Coming up, we sit down with Marcello Clara's launching a
Speaker 2: new venture firm focused on Latin America, aiming to raise
Speaker 2: half a billion dollars for its inaugural fund.
Speaker 3: Plus bar hurdles facing the Microsoft's sixty nine billion dollar
Speaker 3: takeover of Activision Blizzard. We'll discuss why a US judge
Speaker 3: is temporary blocking the deal and Google.
Speaker 2: Hit with charges by the EU for abusing its ad
Speaker 2: tech dominance. We break down what's next with the process
Speaker 2: that could take years to resolve. For first, let's check
Speaker 2: in on these markets at the moment, Ed, because it
Speaker 2: is a day of macro consequences, a day when we
Speaker 2: wait for the Federal Reserve to.
Speaker 4: Come out, Will it pause the market expects?
Speaker 2: So S and P five hundred on a roll on
Speaker 2: its longest winning streak, So is November twenty twenty one.
Speaker 2: If we hold onto these gains then a's like one hundred.
Speaker 2: Also on the higher side, Big tech on top, we're
Speaker 2: up by five tenths of a percent. The US two
Speaker 2: year are actually interestingly falling on the day as people
Speaker 2: really do think that the Federal Reserve is going to
Speaker 2: be forced to pause that PPI data that focus on
Speaker 2: inflation actually showing some easing once again today, So people
Speaker 2: thinking good news is good news at the moment, and
Speaker 2: let's pick it on a look to the risk asset
Speaker 2: of choice when it comes to our world of technology.
Speaker 2: Bitcoin having a bit of a volatile day, but look,
Speaker 2: we're holding up to five tens of percent gains this
Speaker 2: as we start to see maybe some reprieve and the
Speaker 2: anxiety around finance in particular and their particular token we're
Speaker 2: seeing at the moment are weekening the US dollar versus bitcoin.
Speaker 2: We're at twenty nine hundred and seventy six. What have
Speaker 2: you got in terms of the micro.
Speaker 5: Ed Yeah, single names.
Speaker 3: In terms of movers to the upside, Tesla, we continue
Speaker 3: to track. It's kind of flirted between g and losses,
Speaker 3: but if it is up at the close, it will
Speaker 3: be a fourteenth straight day of gains for Tesla, more
Speaker 3: than two hundred and forty billion dollars of market cap
Speaker 3: has been added in that run. You get into the numbers,
Speaker 3: that two hundred and forty billion dollar market cap gain
Speaker 3: is bigger than the standing market cap of ninety percent
Speaker 3: of the Nasdaq one hundred. We look at RSI Relative
Speaker 3: Strength Index, and this is a stock that is very
Speaker 3: much in over bought territory around eighty eight. Anything over
Speaker 3: seventy is over bought. Two kind of news movers out
Speaker 3: there as well. First of all, Alphabet, parent company of Google,
Speaker 3: moving to the downside just three tenths of one percent,
Speaker 3: pairing some deeper losses. The EU has accused Google of
Speaker 3: abusing its dominant position in ad tech. We will bring
Speaker 3: you those details from Brussels later in the program. And
Speaker 3: in Vidia unstoppable on one point nine percent and a
Speaker 3: fresh record for the name in AI. You think AI,
Speaker 3: you're buying in video because you think the GPUs are
Speaker 3: where it's at. If you want to get skin in
Speaker 3: the game for LLLM building.
Speaker 4: Tell you who else is unstoppable.
Speaker 2: Marcella Claring, the former chief operating officer of SoftBank, got
Speaker 2: a new gig executive chairman managing partner of his own
Speaker 2: bench firm, Bicycle Capital. The firm is already a mass
Speaker 2: four hundred and twenty million dollars in commitments so far
Speaker 2: for it's inaugural fund, and I'm so pleased to say
Speaker 2: that we're not only joined by Marcello, but Shuniata, Bicycle's
Speaker 2: other managing partner, also of SoftBank, someone that we've spoken
Speaker 2: to previously on shows and Bloomberg events. Welcome both of
Speaker 2: you racing to us. Asello, you're targeting five hundred million dollars,
Speaker 2: you've already a mass of four hundred and forty million dollars.
Speaker 4: What would you selling to people?
Speaker 6: Why?
Speaker 4: Latin America? What is there?
Speaker 1: So first, thanks for having us. I'll tell you that
Speaker 1: it feels so good to be an entrepreneur again and
Speaker 1: to have finalized my non compete and be able to
Speaker 1: do what I love. And as I shared with you
Speaker 1: in the past, my passion is in Latin America. It's
Speaker 1: a great place. It has size, it has great entrepreneurs,
Speaker 1: it's already created some amazing technology companies that are world
Speaker 1: numbers one, and I think always lacking his capital. So
Speaker 1: you know, we're lucky that this or first day of
Speaker 1: a fund and we've only made a few phone calls
Speaker 1: and it's nice to launch with four hundred and forty million.
Speaker 1: We should reach our target of five hundred million, which
Speaker 1: is what we're targeting to get it done. And we're
Speaker 1: proud to partner not only Shoe as my partner in
Speaker 1: launching this fund, but also to partner with Mubalala, who,
Speaker 1: as you know, Middle Eastern funds have become a deep
Speaker 1: placed for capital today and the fact that they are
Speaker 1: trusting Latin America in the growth site in technology to
Speaker 1: us is something that we're very proud of.
Speaker 4: I know we want to dig into that in a moment.
Speaker 2: But Shoe your experience, of course you mentioned already you've
Speaker 2: shown that you can pick the right companies Rappi. You
Speaker 2: did that over with soft Bank, both of you together
Speaker 2: with the Latin American fund there as well.
Speaker 4: As New Bank.
Speaker 2: What other types of technology are you excited about that?
Speaker 2: Because everyone's talking about AI? Is it AI or is
Speaker 2: it really across the gamut of what's being built.
Speaker 7: The interesting thing about times like now that are very
Speaker 7: uncertain is there's one thing you can count on as founders.
Speaker 7: Founders are focused on problems they can solve, and that's
Speaker 7: what makes them really interesting as an asset class in general,
Speaker 7: in terms that are as uncertain as this, and in
Speaker 7: Latin America, it's not really about the cutting edge. It's
Speaker 7: about inclusive technologies. It's about bringing technology to people who
Speaker 7: are deeply underserved consumers and businesses. So it's propagating technologies
Speaker 7: deep into the pyramid and that's a real green field
Speaker 7: opportunity across every market in Latin America.
Speaker 2: It's interesting. And we were just hearing about the money
Speaker 2: that's behind this. And last time I spoke to Marsello
Speaker 2: was out in Kata. It was all about Middle East
Speaker 2: and it's interesting where the money, the LP money is
Speaker 2: coming from at this moment.
Speaker 3: Yes, Marcella, my understanding is you're able to launch because
Speaker 3: your non compete with soft Bank for Latin America has expired.
Speaker 3: So a comment on that, But Mabilala is interesting. Would
Speaker 3: you guys take money or bring in LPs from Saudi
Speaker 3: Arabia and China for example.
Speaker 1: I think one is happy that now we can be
Speaker 1: back in business. It's a great feeling and to me
Speaker 1: happy that after you know, an exciting experience of being
Speaker 1: within the soft bankkecosystem for many years, I can be
Speaker 1: back how it all started in Latin Americas and entrepreneurs,
Speaker 1: so could not be more excited as that as it
Speaker 1: relates to the initial fund, I mean, this is the
Speaker 1: start of a journey and we tend to do a
Speaker 1: lot more in Latin America. This is our first fund
Speaker 1: and we thought five hundred million dollars is a good
Speaker 1: way to start. And it's a combination of a Mvalalla,
Speaker 1: who to me is the premiere sovereign fund in the
Speaker 1: Middle East, and my family office and many other investors,
Speaker 1: including founders from Latin America, founders from the United States.
Speaker 1: So so far, everybody that we've asked has come through
Speaker 1: in terms of, you know, the potential amount of capital
Speaker 1: that we need. We really haven't discussed this with any
Speaker 1: other sovereign funds and at this point in time, I
Speaker 1: don't think there will be a need because we pretty
Speaker 1: much have what we need for this first round. In
Speaker 1: the future, you know, we're going to look at where
Speaker 1: the businesses, where the pocuts of capital are in the
Speaker 1: case that we raise you know, bicycle capital two and
Speaker 1: three and four, But now we're focused on one. We
Speaker 1: got to go find the founders, We got to deploy
Speaker 1: capital and more importantly, we got to make sure that
Speaker 1: we generate the returns. You know, when people are crusting
Speaker 1: you with their capital is something that we got to
Speaker 1: go generate returns.
Speaker 3: And Sue, good afternoon, good morning to you from San Francisco.
Speaker 3: Your friendship, your partnership with the guy next to you,
Speaker 3: goes back to soft Bank. They were not in LP
Speaker 3: or involved in the raising of this fund. But could you,
Speaker 3: through Bicycle invest in any of the startups and names
Speaker 3: that you were both involved in during your time at
Speaker 3: SoftBank if they were to raise future funds?
Speaker 5: Yes.
Speaker 4: Absolutely.
Speaker 7: Our core is to keep good relationships with the entire
Speaker 7: ecosystem that includes soft Bank. We have a lot of
Speaker 7: gratitude to soft Bank. They helped put the Latin American
Speaker 7: ecosystem on the map with our help and they continue
Speaker 7: to be great partners. Marcelo I call the master of momentum.
Speaker 7: He helps generate the drive to get things done and
Speaker 7: then I helped execute it. And so we're just playing
Speaker 7: that role again here, but on our own this time.
Speaker 4: I like the momentum.
Speaker 2: I mean the name Bicycle in many ways, I know
Speaker 2: it comes from the idea of Steve Jobs thinking computer
Speaker 2: There is a bicycle for the mind. But also you
Speaker 2: guys bike together Mozllo when you're building together. Also you've
Speaker 2: had interesting partnerships, for example Sheen, that's something that you're
Speaker 2: helping bringing a big company, a global company, almost the
Speaker 2: supply side to Latin America, helping the manufacture in Brazil
Speaker 2: and Mexico. When you're thinking about the companies you're investing,
Speaker 2: and you're also thinking about global companies accessing that in America,
Speaker 2: what kind of big companies you're thinking of, how much
Speaker 2: of the fund would be dedicated to that.
Speaker 1: So this fun is all about Latin America, and it's
Speaker 1: about helping Latin American founders accelerate the momentum that they
Speaker 1: have because there are great businesses in Latin America. But
Speaker 1: it's also about helping global companies who having global momentum
Speaker 1: to basically land in Latin America. Latin America is close
Speaker 1: to seven hundred million people. People in Latin America make
Speaker 1: four times the amount of money that people make in India.
Speaker 1: The GDP of Latin America is two exercise of India.
Speaker 1: So Latin America is a great place if you understand
Speaker 1: that it's not an easy place to do business. It's
Speaker 1: complex taxation and another thing. So we plan to invest
Speaker 1: not only in Latin American founders, but also in companies
Speaker 1: that are going to go into Latin America. And there
Speaker 1: are so many companies that you know, the current geopolitical
Speaker 1: landscape health for companies that you want to get into
Speaker 1: Latin America usually faster than they did before. So excited
Speaker 1: about bringing companies, bringing you know, FinTechs, bringing companies like
Speaker 1: Shane who basically disrupted in the fashion industry. And there
Speaker 1: are so many disruptors. Like I've always expressed, I think
Speaker 1: the next five years is going to be a world
Speaker 1: of disruption, not only because of AI but because of technology,
Speaker 1: and it's going to change pretty much every industry, every
Speaker 1: very clos We know it, and we want to make
Speaker 1: sure that if anything is being disrupted in Latin America,
Speaker 1: we have some role to play in that sense.
Speaker 2: You've been the disruptors for Vision Fund appended VC in
Speaker 2: a way and many people's mindset the size of checks
Speaker 2: you would write. So if you're getting into really small
Speaker 2: companies but also really large ones and global companies, can
Speaker 2: the checkspe of any size? What are you thinking about
Speaker 2: where in the lifespan of companies are going.
Speaker 4: To be entering.
Speaker 7: It's important to say the ecosystem in latam is really
Speaker 7: good at the early stage. They're great funds that have
Speaker 7: been working for decades to set the foundation. We do
Speaker 7: not intend to compete with them, so we come in
Speaker 7: at the Series B and later. Our checks range from
Speaker 7: twenty to fifty million dollars in any given company. This
Speaker 7: is not going to be a big portfolio.
Speaker 5: This is about really.
Speaker 7: Choosing a few partners that we can work with for
Speaker 7: the long term. So we're talking about ten to fifteen
Speaker 7: companies and the life of the fund. So it's really
Speaker 7: about a close partnership. And we won't invest more than
Speaker 7: fifty million dollars in any given company, but we want
Speaker 7: to have a real seat at the table. So if
Speaker 7: you want big ownership, you have to go early. If
Speaker 7: you're writing checks of that.
Speaker 3: Size, Marcello, Latin America is more than six hundred and
Speaker 3: fifty million people. I get your history with it, but
Speaker 3: what inside Latin America? Where is the San Francisco or
Speaker 3: Silicon Valley of Latin America? Is there a Stamford equivalents
Speaker 3: churning out founders like we see where I am I
Speaker 3: want to get some granular detail on where you see
Speaker 3: opportunities geographically and by which sectors.
Speaker 1: So few things. There are so many lucky American founders
Speaker 1: who actually went to stand for, who come to Harvard,
Speaker 1: come to Wharton, and then they go back and they
Speaker 1: rather than become entrepreneurs in the United States, they basically
Speaker 1: take that knowledge and take it back to Latin America.
Speaker 1: And most of the stories that you've seen so far,
Speaker 1: a lot of those founders were US educated. Most of
Speaker 1: them want to stand for and then they go back
Speaker 1: to Latin America with that entrepreneurial mindset, and that has
Speaker 1: given rise to a booming entrepreneurial ecosystem that's sitting in Sapaulo,
Speaker 1: that's sitting in Mexico City, that's sitting in Bogota in Colombia.
Speaker 1: Because now there are huge stories of success. I mean,
Speaker 1: you have Rappi, you have Eyefood to me, who's probably
Speaker 1: one of the best food delivery companies in the planet.
Speaker 1: You got New Bank, which is a Colombian who emigrated
Speaker 1: to Brazil and today is the most valuable digital bank
Speaker 1: in the world and the one that makes money and
Speaker 1: the one that's worth tens of billions of dollars you have.
Speaker 1: Now you have the growth the Americati livery, who's a
Speaker 1: multi billion dollar marketplace that continues to grow. So today
Speaker 1: there's enough stories of success that have created entrepreneurial ecosystems
Speaker 1: that have shared employees for starting a new company. So
Speaker 1: there's the I think what we started a soft bank was,
Speaker 1: you know, we took Latin America from one and a
Speaker 1: half billion a year to close to sixteen billion dollars
Speaker 1: a year of investment along other funds, and that gave
Speaker 1: rise to a wooman entrepreneurial ecosystem that right now needs
Speaker 1: our capital. And I think Latin America deserves the fund
Speaker 1: that is going to be focused only in Latin America
Speaker 1: and not the traditional tourist capital that comes in only
Speaker 1: when good times rolled and then they retrench when things
Speaker 1: are not that good. Where there were committed, we're in
Speaker 1: it for the next few years. I made it a
Speaker 1: point to focus the rest of my career in Latin America,
Speaker 1: and that's what I want to do.
Speaker 2: True you would deep be dedicated not just to Latin
Speaker 2: American founders, but diverse founders, minority founders.
Speaker 4: With the sp Opportunity Fund, how much.
Speaker 2: When we are still seeing look and an environment where
Speaker 2: interest rates are going higher, where companies are slimming down,
Speaker 2: where people are wanting to put money into tried and
Speaker 2: tested founders. How are you able to still focus on
Speaker 2: a minority founder?
Speaker 8: Do you?
Speaker 4: Is that priority all?
Speaker 7: The interesting thing about founders who are underrepresented is they
Speaker 7: have the grid it taste to succeed. They have been overlooked.
Speaker 7: They're the perfect solution for this moment in time. They
Speaker 7: do not come from the typical mold. They have had
Speaker 7: to struggle to get where they are, and we like
Speaker 7: to back those founders because we just think they're unfairly overlooked.
Speaker 7: So again, it's not about the macro for us, it's
Speaker 7: about the micro and the people best suited to navigate
Speaker 7: moments like this are people in places that are overlooked,
Speaker 7: people who look like they're overlooked. And if you back
Speaker 7: those folks, we believe you can make a lot of money.
Speaker 2: We thank you for spending some time with us talking
Speaker 2: about the vision a Selah Clay Juniata. They're running back
Speaker 2: for a plane. We thank them.
Speaker 9: At Google's conduct distorted competition among ad exchanges, rather than
Speaker 9: letting the best of the ad exchanges win the race.
Speaker 9: The helping hands of the powerful Google ecosystem gave Google's
Speaker 9: own exchange a unique head start over all other rivals
Speaker 9: in the industry, ann exclude a fort to keep its
Speaker 9: commission high without losing its advertisers.
Speaker 2: You Commissioner, Margaret Vesta, are there Google being accused of
Speaker 2: abusing its dominance over advertising technology to crush competition? Now
Speaker 2: that is the European Union now fires off an anti
Speaker 2: trust charge sheet that threatens a breakup of the lucrative business.
Speaker 2: But look, it's a process that can take years to resolve.
Speaker 2: Let's dig into the details. Blue megs, Mark Bergen is
Speaker 2: in London, Sam Stalton is in Brussels, and Mark with
Speaker 2: the expertise of Google here. I immediately want to get
Speaker 2: their response. We've just heard from Margaret Vesta and none
Speaker 2: of this seems to come as that much of a
Speaker 2: surprise to them, right.
Speaker 6: No, certainly both things, both having vested your stand up
Speaker 6: and accuse them of monopoly of the acting as a
Speaker 6: monopoly and dominance, and then the same accusation around ad tech.
Speaker 6: This is something that they actually had first in the
Speaker 6: US and an identical case that they were using sort
Speaker 6: of ball size of the market in this opig and
Speaker 6: pretty powerful world of digital publishing. So I think that's
Speaker 6: probably a contribution why the stack basically they move. Investies
Speaker 6: have basically priced in this regulatory risk.
Speaker 3: Sam just in Layman's terms, what is the European Commission
Speaker 3: and the EU accusing Google of doing within the market's
Speaker 3: so healy involved in.
Speaker 10: Yes, yes, and hello here from Brussels. Well, Effectively, the
Speaker 10: European Commission today has filed formal antitrust charges against Google's
Speaker 10: actions in the advertising technology space, and specifically it's focusing
Speaker 10: on Google services that match supply and demand for advertising
Speaker 10: space online and it's really all about self preferencing.
Speaker 5: What the European.
Speaker 10: Commission says is that Google has effectively self preferenced its
Speaker 10: own services to the detriment of other rivals in the market,
Speaker 10: and this could obviously have aative effects further afield in
Speaker 10: the online ecosystem. And these are formal antitrust charges. The
Speaker 10: investigation was first launched by the European Commission in Brussels
Speaker 10: in April twenty twenty one, and it's very much, as
Speaker 10: I say, this first step in a procedure that could
Speaker 10: go on for a number of years, Mark.
Speaker 3: Explain, what is Google's advertising technology business different from its
Speaker 3: broader ad offering.
Speaker 6: Yeah, it's hard to unpack, in part because it is
Speaker 6: that the ad tack is supervasive inside of Google. When
Speaker 6: we think about the commissioner talks about it. It is
Speaker 6: basically their machinery that deals with the buying and selling
Speaker 6: of online ads. Everything that's sort of not Google's own
Speaker 6: and operated property. So the things that aren't Google Search,
Speaker 6: aren't YouTube, aren't its play store maps. But at the
Speaker 6: same time as using that same exact machinery to make
Speaker 6: Google Search ads, to make YouTube ads much more powerful,
Speaker 6: much more effective. And I think that competitors argue sort
Speaker 6: of elbow out these services that are playing the digital
Speaker 6: publishing field but don't have the tremendous data resources of
Speaker 6: running the world's biggest search and video and mapping platforms.
Speaker 2: What's interesting here, Sam is sort of how they're going
Speaker 2: for the JUG leader the EU here saying, look, remedies
Speaker 2: on enough to your business model. You need to start
Speaker 2: hiving parts of it off. But will that become some
Speaker 2: sort of a reality because this is going to take
Speaker 2: a long time in the.
Speaker 10: Course, Well, indeed, and I mean It was one of
Speaker 10: the main messages today from the press conference with the
Speaker 10: EU's Commission for Competition, Margaretta Vestaga, and she effectively said
Speaker 10: that behavioral remedies were insufficient in correcting the anti competitive
Speaker 10: abuse here. And what's really fascinating is to watch the
Speaker 10: growing transatlantic sort of alliance around the option of structural
Speaker 10: remedies or like you say, hiving off certain parts of
Speaker 10: the business in order to correct the anti competitive abuses.
Speaker 10: Because as Mark just said, there are of course a
Speaker 10: number of lawsuits open in the United States against Google's
Speaker 10: ad tech business, and the Department of Justice at least
Speaker 10: in its lawsuit has recommended the option of potentially structural separations,
Speaker 10: and as I say, one of the core messages from
Speaker 10: the press conference from Vestagers today was that's very much
Speaker 10: an option for us to and we're now going to
Speaker 10: engage with those discussions with Google to see if we
Speaker 10: can make progress further afield in terms of correcting these problems.
Speaker 3: A bloom best, Mark Bergen and London, Sam Stulton in
Speaker 3: Brussels for us, Thank you very much. Now coming up,
Speaker 3: more regulatory headwinds and hurdles facing Microsoft's sixty nine billion
Speaker 3: dollar takeover of Activision Blizzard. We'll discuss why a US
Speaker 3: judge is temporarily blocking the deal.
Speaker 5: This is Bloomberg.
Speaker 2: More regulatory action Microsoft's sixty nine billion dollars acquisition of
Speaker 2: Activision Blizzard. What it's temporarily blocked by a federal judge
Speaker 2: in California who said a temporary restraining order was necessary
Speaker 2: to maintain the status quo while the FTC, the Federal
Speaker 2: Trade Commission challenges the deal joining US now plums Anna
Speaker 2: Juton and is.
Speaker 4: This just part of normal process? Is this a surprise
Speaker 4: all we expecting it?
Speaker 11: Well, it's a really interesting development because you see how
Speaker 11: the FTC is trying to make sure this deal doesn't
Speaker 11: become a foregone conclusion. And part of the context of
Speaker 11: this is that we have kind of competing decisions from
Speaker 11: the other side of the Atlantic, where the UK competition
Speaker 11: authorities have said that this deal should not go forward
Speaker 11: they would be bad for market concentration, whereas in the
Speaker 11: EU anti trust authorities have said this deal can go
Speaker 11: through with remedies and it's actually good for competition. So
Speaker 11: you definitely see the Federal Trade Commission trying to make
Speaker 11: sure that this doesn't go forward, that this deal doesn't
Speaker 11: play out while they're trying to prosecute.
Speaker 4: Their case here.
Speaker 3: I know it's a temporary holt because the FTC filed
Speaker 3: that emergency motion Monday to hold the merger. There will
Speaker 3: be a hearing next week here in SF, an evidentiary
Speaker 3: hearing for a longer term discussion around holding it. What
Speaker 3: is Microsoft and Activision's response to this about having to
Speaker 3: go before a.
Speaker 11: Judge, Well, we saw we heard from Microsoft president Brad
Speaker 11: Smith yesterday where he said he's looking forward to presenting
Speaker 11: Microsoft's case in court. And one of the difference is
Speaker 11: is that this is a federal court where the Federal
Speaker 11: Trade Commission has to go and ask for this hold.
Speaker 11: Where is the actual case, the actual complaint filed by
Speaker 11: the Federal Trade Commission is in there in house court.
Speaker 11: So there's a slightly different juridical situation for them. And
Speaker 11: Microsoft has said that they look forward to presenting their
Speaker 11: case in federal court and kind of see that this
Speaker 11: is an opportunity to defend the deal that they say
Speaker 11: would be good for competition.
Speaker 2: Briefly, Anna, this is a global narrative, right, absolutely.
Speaker 11: Yeah, Like I said, you know, we see kind of
Speaker 11: competing decisions from the other side of the Atlantic. And
Speaker 11: also you know, Microsoft positioning has solved very strongly there,
Speaker 11: you know, criticizing the UK for their decision to block
Speaker 11: the deal and praising the EU for letting this seal
Speaker 11: go forward.
Speaker 3: A right Bloomberg Xana editing out in DC, Thank you,
Speaker 3: Welcome back to Bloomberg Technology.
Speaker 5: I am ed Ludlow here in San.
Speaker 2: Francisco and I'm Karin Hawd in New York. Let's check
Speaker 2: in on these markets. It is FED day.
Speaker 4: We're waiting for the all important decision.
Speaker 2: We are looking at actually the market sustaining their higher
Speaker 2: inclination NASDAC cup four tenths of big tech managing to
Speaker 2: rally as many feel that there's a pause, it's likely
Speaker 2: to happen in terms of interest rates, of course, that
Speaker 2: being helpful for some of the technology focus and future
Speaker 2: cash flows. We're looking at the two year yields actually
Speaker 2: dropping some four basis points as people start to price in. Indeed,
Speaker 2: the FED will go at what point we'll start to
Speaker 2: see the rate hiking process being an end most factoring
Speaker 2: in September Now we're looking at Bitcoin just about five
Speaker 2: ten percent as well, so look, it's relatively weight and
Speaker 2: see mode overall, but we're seeing some of the anxiety,
Speaker 2: particularly around financy exchange. They're dialing back a little bit
Speaker 2: in cryptosphere. Let's move on and look at some of
Speaker 2: the individual movers, because while we're getting Microsoft on the
Speaker 2: upside more than percentage point higher, maybe because of course,
Speaker 2: there's a four stoppage on their plan to be purchasing
Speaker 2: Activision Blazzon sixty nine billion dollars being dropped, So maybe
Speaker 2: that's on the rally side, or maybe it's more of
Speaker 2: an AI theme that's happening with Microsoft today. Nikola, one
Speaker 2: of ed's favorites and show focusing in on some sixteen
Speaker 2: percent higher, actually had been leading some of the charge
Speaker 2: in the other EV space, but largely Nikola having of
Speaker 2: late been pushed to pause any future supply side issuance
Speaker 2: of further shares. But on the upside today, as we
Speaker 2: see maybe more of an interest rate focus going on.
Speaker 2: I'm looking at AMD as well. This is AI front
Speaker 2: and center. This is a company of course, is unveiling
Speaker 2: its AI focused chips, processes that are going to be
Speaker 2: AI accelerate and being able to support generative AI and
Speaker 2: the processing of data there that much faster the market
Speaker 2: seem to like what they were hearing from that particular CEO.
Speaker 3: Ed, all right, Caroline, bear with me. I'm going to
Speaker 3: do something now and combine two of our favorite topics,
Speaker 3: AI and inflation, or rather AI and deflation. How are
Speaker 3: those two things linked. Well, let's bring in pooblicist sapient
Speaker 3: CEO Nigel Vaz. Your job is to work with technologists
Speaker 3: at all kinds of firms, banks, quick serve restaurants to
Speaker 3: digitoually transform. You tell us how AI is deflationary.
Speaker 8: Our belief right now is that when you think about
Speaker 8: the ability for businesses to serve customers in lower costs,
Speaker 8: more efficient ways, AI is a huge accelerant to what
Speaker 8: they're trying to do, which means the achieved growth with
Speaker 8: lower costs and efficiency and productivity. Pretty much every Western
Speaker 8: economy today is bring from population challenges, people dropping out
Speaker 8: of the workforce. The hospitality sector in particular has been
Speaker 8: particularly hurt, so lots of check in lines orders heard incorrectly.
Speaker 8: AI is helping with the work we're doing to start
Speaker 8: to make these simple, basic consumer experiences easier, more effective,
Speaker 8: and frankly more efficient for these businesses. So to us,
Speaker 8: I feel like that is a real opportunity to drive
Speaker 8: some of that growth at a lower cost.
Speaker 3: Where do you sit in the debate around whether AI
Speaker 3: will eliminate jobs versus sort of be supportive of existing roles.
Speaker 8: Well, you know, there's some research by David Artur talking
Speaker 8: about the fact that since nineteen forty we've now seen
Speaker 8: you know, sixty to eighty percent of jobs not exist today,
Speaker 8: and a lot of those jobs have been created by
Speaker 8: technologies that have come over the course of that period.
Speaker 8: When we think about AI, of course, there are going
Speaker 8: to be some jobs that are impacted and governments and
Speaker 8: public private partnerships. The kind of work we do to
Speaker 8: bring in new skills and capabilities from younger people entering
Speaker 8: the workforce into this technology is going to need to
Speaker 8: happen to continue to build skills. But we also think
Speaker 8: this is going to be a huge opportunity for growth.
Speaker 8: We recently acquired fully publicly CPNAI Labs, a joint venture
Speaker 8: we created a few years ago, because we feel like
Speaker 8: that's going to help us bring in more people into
Speaker 8: the workforce into this new space. What if I think GDP,
Speaker 8: you know, Goldmansacs is talking about seven percent The National
Speaker 8: Bureau of Economic Research is talking about fourteen percent in
Speaker 8: terms of impact on work our productivity. I think all
Speaker 8: of these things will create opportunities.
Speaker 2: Yeah, Nigel, you just mentioned how you're training well the
Speaker 2: future workforce. What about the future for What about the
Speaker 2: workforce of the here and the now? Do the c
Speaker 2: suite do the people below them have the skill set
Speaker 2: to be adopting all the joys and risks of generative
Speaker 2: AI in the here and now?
Speaker 8: I don't think anybody was expecting the adoption of this
Speaker 8: technology to happen as quickly as it has, right But
Speaker 8: what it does tell you the fact that you have
Speaker 8: so many people engaging with this, making this one of
Speaker 8: the fastest adopted technologies, is the potential is certainly there.
Speaker 8: With that come risks, management of ethics, understanding bias, all
Speaker 8: of the issues that have to be worked through. But
Speaker 8: our belief is certainly now a lot of the existential
Speaker 8: threat that's being talked about AI, we're not in a
Speaker 8: place right now where that is in the immediate future.
Speaker 8: I think there are bigger issues in the immediate future
Speaker 8: and the context of AI, like how do you ensure
Speaker 8: that bias and things that brands wouldn't want associated with
Speaker 8: them know how hallucinations. All of these ideas getting addressed today,
Speaker 8: and companies are making investments very very quickly because the
Speaker 8: benefits on the other side are huge. You know, we're
Speaker 8: seeing molecule identification in pharmaceuticals, We're seeing fraud detection in banking,
Speaker 8: We're seeing risk management and risk assessments for mortgages. All
Speaker 8: of these things now starting to be able to happen
Speaker 8: so much more seamlessly than was possible before.
Speaker 2: Nigel, I'm kind of fascinated just the intricacies of exactly
Speaker 2: what you go and do you set up a meeting
Speaker 2: with a company who's new to you, What do you
Speaker 2: go in and say, how do you start to assess
Speaker 2: the need of each individual company where they're currently at,
Speaker 2: because mL and AI is already in our life, and
Speaker 2: then what they need to do to start to ensure
Speaker 2: that they're getting all the benefits of productivity.
Speaker 8: You know, polic is say is fundamentally in the business
Speaker 8: of digital business transformation right effectively, very simply. What that
Speaker 8: means is helping businesses that were established transform themselves to
Speaker 8: be increasingly digital in a world that is fast becoming
Speaker 8: entirely digital. So our approach centers around this notion at
Speaker 8: this idea called speed. It is an acronym and an
Speaker 8: idea about helping businesses move quickly. And one of the
Speaker 8: biggest challenges with enterprise businesses is the CEO would ask
Speaker 8: for a strategy in a business case, and then that
Speaker 8: would turn into requirements and then they'd linearly pass the
Speaker 8: baton onto the next rung and the next rung. So
Speaker 8: for us, the S in speed is strategy, so being
Speaker 8: really clear about what use case you're trying to drive
Speaker 8: the outcome from assessing that, and then moving very quickly
Speaker 8: to this idea of P, which is products, so not
Speaker 8: thinking about the business and the context of a project
Speaker 8: that begins and ends, but a product that is constantly evolving.
Speaker 8: The E is experienced, so how do you think about
Speaker 8: the experience of the employee and the experience of the customer,
Speaker 8: the patient, the citizen that you're trying to affect. The
Speaker 8: next D is engineering, which is all about how do
Speaker 8: you build these experiences in ways that allow you to
Speaker 8: evolve ever so quickly. And then the D is data
Speaker 8: and AI, so how do you create that closed loop
Speaker 8: system almost like fagers in a hand where the data
Speaker 8: feeds back into helping you automate and build the efficiency
Speaker 8: we're talking about. And that conversation today in many organizations
Speaker 8: is about yeah, we've got this and this and this,
Speaker 8: but they don't work like fingers.
Speaker 5: In a hand.
Speaker 8: You know, there's a strong thumb and a strong index
Speaker 8: thing or but they don't connect to the pinky and
Speaker 8: guess what, it becomes very hard lift and shift and
Speaker 8: move things.
Speaker 3: Yes, in that context, Nigel, for what it's worth, a
Speaker 3: headline crossing the Bloomberg terminal from Black Rock CEO Larry Fink,
Speaker 3: who's speaking at black Rocks Invested Ate. He says, AI
Speaker 3: maybe the tech that brings down inflation. When Nigel Vaz
Speaker 3: goes into a company like that, be it, Walmart, JP, Morgan, Marriott,
Speaker 3: do you want the CEO sitting on the other side
Speaker 3: of the table from you to implement this change with
Speaker 3: AI or do you want the CTO who's leading the
Speaker 3: charge within these companies.
Speaker 8: I think this is a business change, and of course
Speaker 8: you need a very strong CTO CEO somebody he understands
Speaker 8: how the technology works. But for us, AI is an
Speaker 8: opportunity to reimagine the business. So, you know, the Bloomberg
Speaker 8: you know terminal headline that you were just calling out
Speaker 8: there are are belief is that doesn't happen when it's
Speaker 8: a CMO or a CIO or CEO. This has got
Speaker 8: to be something that is a CEO priority. And from
Speaker 8: all of this EOS, I'm spending time with some of
Speaker 8: the biggest companies in the world. I can tell you
Speaker 8: this is the one technology that they themselves have started
Speaker 8: to realize will force the choice for them to be
Speaker 8: more transformative rather than digitizing what they already do, which
Speaker 8: is has been the first wave of digital I think.
Speaker 2: Thus far whovers is Sapient CEO Nigel Vas. Great to
Speaker 2: have some time with you, Larry Finking you on the
Speaker 2: same page. Meanwhile, coming up now we're going to be
Speaker 2: talking about the Swedish tech scene. We are so global
Speaker 2: today standout tech companies that are currently being built in
Speaker 2: that market.
Speaker 4: Of Thomas is joining us partner at Ox. This is
Speaker 4: bring back.
Speaker 3: All right time for talking tech first off, and you
Speaker 3: study is shining the light on who may be the
Speaker 3: biggest winners and losers in the global AI boom. Research
Speaker 3: from McKinsey says generative AI could apt to add up
Speaker 3: to four point four trillion dollars annually to the world's economy. However,
Speaker 3: AI tools will likely put more pressure on the labor
Speaker 3: force and could especially be a disruption to higher wage
Speaker 3: knowledge workers whose work would be threatened by automation.
Speaker 5: How often are we discussing that?
Speaker 3: Plus Advanced micro Devices or AMD is hoping its new
Speaker 3: line of AI processors can compete with the likes of
Speaker 3: Nvidia in the AI computing market. During a presentation Tuesday,
Speaker 3: the company showcase the MI three hundred x accelerator. It
Speaker 3: will speed up processing for generative AI services and aims
Speaker 3: to help data centers streamline a crunch of AI traffic.
Speaker 3: And speaking of Nvidia, the company drawing is drawing made
Speaker 3: some hefty stock buybacks last year after a three year hiatus,
Speaker 3: The chipmaker repurchased more than ten billion dollars in stock
Speaker 3: ahead of a massive rally fueled by Wall Street's AI friends.
Speaker 3: Now the company is drawing attention because it's stopped buying
Speaker 3: despite having more than seven billion on its buyback authorization.
Speaker 3: In Vidia Space person declined to comment.
Speaker 2: Carrot, let's go broader, Let's go to Europe for a moment,
Speaker 2: because at the moment brilliant minds twenty twenty three years
Speaker 2: upon us Look. It's the foundation and related event established
Speaker 2: by Spotify founder CEO Daniel Eck and it's focusing this
Speaker 2: year on a theme of future gazing the slower speakers
Speaker 2: ranging from tech startups, actors, activists, education, sustainability leaders and
Speaker 2: much more. They've also got a program to highlight startups
Speaker 2: in the European scene brilliant innovators and one of the
Speaker 2: men behind that is Ox partner Bob Thomas, who's joining
Speaker 2: us for more on the event and indeed the innovator
Speaker 2: that you singled out as the winner this year. Let's
Speaker 2: start Bob with Brilliant Minds as an event first and foremost,
Speaker 2: what is hoped to be achieved.
Speaker 4: This is about shining a light on Sweden, on.
Speaker 2: The ecosystem, but also well Swedish principles in many ways.
Speaker 5: Yeah, absolutely so.
Speaker 12: Daniel initially set up the Brilliant Minds Foundation with his board,
Speaker 12: which consist of some influential Swedish families, to bring Swedish
Speaker 12: values to creative builders, innovators from across the world. So
Speaker 12: every June kind of mid June, actors, activists, you know,
Speaker 12: some of the people who you've highlighted already descend on
Speaker 12: Stockholm during one of the most beautiful periods of the
Speaker 12: year and enjoy a two day conference where they discuss
Speaker 12: kind of creative ideas and the vision for the future
Speaker 12: of how the world might look in a positive sense. So,
Speaker 12: you know, in Brilliant Innovators, what we're trying to do
Speaker 12: is extend that to the startup ecosystem and say, you
Speaker 12: know how can Swedish ideals of sustainability, of inclusivity, you
Speaker 12: know how can we highlight European startups that are promoting
Speaker 12: these ideals.
Speaker 2: And you've singled out as a winner this year a
Speaker 2: French startup that is all about sustainability, particularly an aircraft
Speaker 2: right you're shunning a line on one particular companies are
Speaker 2: about hydrogen propulsion. What got you there for this particular
Speaker 2: set of founders and business that they're trying to build,
Speaker 2: It was a.
Speaker 12: Combination both of the vision, which is to let me
Speaker 12: take a step back, so the businesses beyond arrow It's say,
Speaker 12: as you say, French business focused on hydrogen fuel cell
Speaker 12: transport in the private aviation space, and that business has
Speaker 12: a massive opportunity to take an enormous amount of carbon
Speaker 12: out of air travel and essentially kind of just you know,
Speaker 12: one of the biggest polluters in terms of kind of
Speaker 12: carbon emissions in the European landscape to take a huge
Speaker 12: amount of carbon out of that. It was a combination
Speaker 12: of that proposition, that vision, and then the quality of
Speaker 12: the pitch and of the team. You know, a huge
Speaker 12: number of industry experts aligning around around a shared cause
Speaker 12: and again to you know, to speak to those ideals
Speaker 12: of teamwork, of you know, having having a kind of
Speaker 12: collective long term principle in mind when you develop a product.
Speaker 12: It really spoke to the judges.
Speaker 3: Was there any commonality, Bob, between the founders and the
Speaker 3: startups that entered the competition with a heavily AI focus
Speaker 3: for example?
Speaker 12: Interesting, So I've been watching your texto for some time
Speaker 12: and obviously kind of in recent days, and thank you,
Speaker 12: the focus has been very, very much on AI. Actually
Speaker 12: relatively little mention of AI in the startups that we
Speaker 12: looked at, which was strange. There was a skew towards
Speaker 12: materials science, you know, how to innovate in manufacturing, innovating
Speaker 12: heavy industry with the thinking that you know, a big
Speaker 12: part of the reason that startups were entering was part
Speaker 12: of a sustainability theme, part of a long termism around
Speaker 12: the environment and around other cultural issues related to pollution.
Speaker 1: So actually AI, you know.
Speaker 12: Despite the despite the focus of things kind of more
Speaker 12: generally within tech and within MySpace in B to B software,
Speaker 12: in the last few weeks, AI was absence Bob.
Speaker 3: Earlier in the show, we had Marcello Claray on about
Speaker 3: his new venture firm Bicycle. I'm sure you're familiar with Myllo,
Speaker 3: and he's all about Latin America. Has talked a little
Speaker 3: bit about Sweden with you. You know, I'm here in
Speaker 3: San Francisco. The history of this place in Silicon Valley
Speaker 3: is that you have Stamford, a lot of people focused
Speaker 3: on computing and software. They found companies, the vcs all
Speaker 3: moved here. Is there an equivalent thing going on out
Speaker 3: in Sweden and Nordic nations right now?
Speaker 12: Yes, absolutely, and I would say to some extent it's
Speaker 12: already happened. So the European Investment Fund and THES have
Speaker 12: highlighted in their annual report that they do kind of
Speaker 12: ranking European geographies on the basis of various innovation metrics.
Speaker 12: You know, Sweden's been the top country in Europe for
Speaker 12: a number of years, and that's driven by quality of education.
Speaker 12: But also that first cohort of great Swedish startups has
Speaker 12: now gone beyond the point where they've you know, a
Speaker 12: lot of the founders have exited, they've become public businesses,
Speaker 12: and you have those initial set of founders reinvesting in
Speaker 12: the next cohort of startups. So you know, to take
Speaker 12: Brilliant Minds as an example, it's a foundation set up
Speaker 12: by Daniel Leck and you know, the support for that
Speaker 12: foundation is driven by the fantastic success that he's achieved
Speaker 12: with Spotify, So yeah, Spotify, klana Iz or you know,
Speaker 12: these great Swedish technology institutions now are feeding back into
Speaker 12: that early stage ecosystem. And also, I mean there's a
Speaker 12: great private capital ecosystem that's developed here over you know,
Speaker 12: over the course of really twenty years, which we're very
Speaker 12: happy to play a small part of.
Speaker 5: You know what's interesting, Caroline.
Speaker 3: Every day on Venture Spotlight, we have vcs from around
Speaker 3: the world, and if they're American, we pose the question,
Speaker 3: are you looking outside of the US in terms of
Speaker 3: where you're writing checks and looking for opportunity?
Speaker 2: And what called my eye actually on LinkedIn today was
Speaker 2: Nicholas Senstrom.
Speaker 4: Of course another key.
Speaker 2: So we just found a founded Skype gone on to
Speaker 2: have a Tomaco, very successful VC in the space.
Speaker 4: He's put out a thought leadership.
Speaker 2: Piece today, Bob all about why Europe's going to be
Speaker 2: the next area of innovation, why check shashould be being
Speaker 2: written there. But Ed and I have both been based
Speaker 2: in Europe. We both talked about technology there and it
Speaker 2: was always this ringing of hands that there's never quite
Speaker 2: been the moment that they powered through, that they were
Speaker 2: able to put.
Speaker 4: Their stamp on it. Do you think this is different?
Speaker 2: Do you think ultimately that we shouldn't always be that
Speaker 2: one area or region will win out visa via another
Speaker 2: all can do well and will eventually American money come
Speaker 2: in a more significant way to Europe.
Speaker 12: I think we've definitely seen, particularly in a kind of
Speaker 12: low interest rate environment, particularly during COVID in the B
Speaker 12: to B software space, we've seen a huge amount of
Speaker 12: American money come to Europe. And you know, I'll say,
Speaker 12: to some extent we're seeing it leave again now given
Speaker 12: the economy and given the pricing of technology businesses. But
Speaker 12: I think the development of European ecosystems, you know, initially
Speaker 12: in places like London and Berlin, but now in the Nordics,
Speaker 12: you know, not just Stockholm but Copenhag and Helsinki. You know,
Speaker 12: we're seeing a great startup ecosystem developing the Baltics, particularly
Speaker 12: in Estonia and Talent, but more broadly than that, I
Speaker 12: think it's really driven actually not by the influx of
Speaker 12: American money, but by the recycling of capital from cohorts
Speaker 12: of great technology businesses. You know, to take stop we've
Speaker 12: given a Swedish example, but to take Estonia as an example.
Speaker 12: You know, Pipe Drive, great B to B software business
Speaker 12: sells globally, is now a global business. But a lot
Speaker 12: of that capital gets recycled into the Estonian ecosystem and
Speaker 12: becomes fuel for the next generation of seed stage Estonian staffs.
Speaker 2: What's interesting, of course, we were looking at some pictures
Speaker 2: of the company that's just one overall beyond Arrow and
Speaker 2: it was a lot of guy engineers in the pictures,
Speaker 2: and we're sat here with a white male VC of course,
Speaker 2: but brilliant Minds in and of itself is very diverse
Speaker 2: female CEO. And also thinking about the people that they
Speaker 2: brought together in Sweden. How diverse is the European Talent
Speaker 2: pol right now? How diverse are the founders that you're
Speaker 2: coming and seeing pitched to you?
Speaker 5: So I would say THEO.
Speaker 12: Firstly, the CEO of beyond eerro Eloa, is a woman,
Speaker 12: and unfortunately she wasn't pictured.
Speaker 5: In the video, but you know, just to be clear
Speaker 5: about that.
Speaker 12: You know, I think when particularly does rank very highly,
Speaker 12: particularly in terms of gender diversity and companies at a
Speaker 12: point where you know, we're almost that kind of gender
Speaker 12: parity in in terms of public company CEOs in Sweden,
Speaker 12: and I think that you know, Sweden has been an
Speaker 12: early mover in the right direction. I think there is,
Speaker 12: you know, fundamentally in Europe but also particularly within tech,
Speaker 12: still a long way to go in terms of diversity,
Speaker 12: and I think it's important that we're you know, we're
Speaker 12: doing more on that. Brilliant Minds is leading the way,
Speaker 12: but you know, I think we as a fund also
Speaker 12: lead away and we care very deeply about the diversity
Speaker 12: of our team and the diversity of the companies we
Speaker 12: invest in.
Speaker 3: Ox partner, Bob Thomas and in Sweden, thank you so much.
Speaker 3: When you write your next big check come back.
Speaker 5: On the program. We talk more about the audicts in Europe.
Speaker 5: Thank you for your time.
Speaker 2: Time now for what's going viral? Fans are the Beatles,
Speaker 2: You're in for a tree. So Paul McCartney says that
Speaker 2: we can expect to hear one final song from the
Speaker 2: British pop group and he's crediting guess what, artificial intelligence
Speaker 2: for the help. In an interview at the BBC Radio
Speaker 2: for McCartney said that the song was made using a
Speaker 2: demo with John Lennon's voice and will were released later
Speaker 2: this year and ed what's interesting, I was lucky enough
Speaker 2: to be at Glastonbury this time last year Paul McCartney
Speaker 2: was performing and at that time he performed alongside virtually
Speaker 2: John Lennon and that was using an isolated Lenin vocal
Speaker 2: at that time.
Speaker 4: So already that we use the machine learning.
Speaker 5: It's called AI to do d mixing.
Speaker 3: So this was a demo tape that Lennon did on
Speaker 3: a ACEPT before he died in nineteen eighty. He gave
Speaker 3: it to Yoko Ono. Yokoona gave it to McCartney and
Speaker 3: all the AI does is isolate the voice and so
Speaker 3: interviews McCartney's talked about how it's so exciting because tracks
Speaker 3: that they never quite finished and now can finish the
Speaker 3: are available. But he's also admitted it's kind of scary
Speaker 3: if you think about it, give infinite life to something
Speaker 3: that wasn't quite quite done at the.
Speaker 4: Time, and there is. It's been working with the artists right.
Speaker 2: A lot of the other anxiety has been around copyright issues,
Speaker 2: has been around deep fakes and really how the business
Speaker 2: and industry navigates that. AI just keeps on giving us
Speaker 2: new areas to contemplate, and we love it that it's
Speaker 2: in music at least.
Speaker 4: Wow, that does it for this addition Bloomberg.
Speaker 3: Technology, Yeah, big, big show, so much to recap. So
Speaker 3: don't forget about the podcast Spotify. iHeart this is Bloomberg