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Speaker 1: From Mahart where Innovation of Money and Power Collie in

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Speaker 1: Silicon Valley NBN.

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Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.

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Speaker 3: Live from New York.

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Speaker 4: This is Blomberg Technology coming up. Intel's secures an eight

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Speaker 4: billion dollar grant for its US chip factory expansion of

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Speaker 4: the months of trying to convince Washington and Wall Street

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Speaker 4: that it can execute on its vision.

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Speaker 3: Plus California, it proposes.

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Speaker 4: State in centers for EV buyers, which could exclude Tesla's models,

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Speaker 4: and social media companies push back against new legislation in

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Speaker 4: Australia that's going through the courts that could limit team usage.

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Speaker 3: But first that's checking on these markets.

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Speaker 4: Because we're currently hired to the tune of four tenths

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Speaker 4: of a percent, we're managing to shrug off some of

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Speaker 4: that anxiety once again being built in around geopolitics and

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Speaker 4: remid tariffs that we're going to break it down for

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Speaker 4: you a little bit later.

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Speaker 3: But still big tech managing to lead us higher.

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Speaker 4: And in fact, the S and P five hundred on

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Speaker 4: track for yet another set of records, and the NASUC

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Speaker 4: is up for four straight days.

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Speaker 3: Move on and look at some of the individual movers.

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Speaker 4: Because we have still got some drip feed around earnings

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Speaker 4: that have come after the bell. I want to look

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Speaker 4: at what's of course been happening in the world of

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Speaker 4: Zoom and another key chip maker. Zoom down some seven

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Speaker 4: point nine percent, didn't live up to expectations in terms

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Speaker 4: of its growth for its fiscal third quarter, and I

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Speaker 4: think most notably is because this stock has run up

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Speaker 4: hard since it's bottoming out in August some sixty percent higher.

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Speaker 3: Many alis saying like it went.

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Speaker 4: It showed solid numbers, but not as good as a

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Speaker 4: market been pricing in analog devices down a percentage point,

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Speaker 4: had been rallying earlier in the trade after they showed

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Speaker 4: some strength in terms of auto sales and chips, but

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Speaker 4: now just taking a turn into the red.

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Speaker 3: But let's stick with chips now.

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Speaker 4: Because Intel securing seven point nine billion dollars in federal

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Speaker 4: grants from the Biden administration. The deal is actually marking

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Speaker 4: the largest ever direct subsidy from a program, and this

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Speaker 4: is a course to boost US chip production, sources telling

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Speaker 4: Bloomberg Intel will get the money for projects in Arizona,

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Speaker 4: in Oregon, in New Mexico. Bloomberg's Mackenzie Hawkins joins US

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Speaker 4: now in Mackenzie, Ohio. Not on tap for this particular

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Speaker 4: area of money because it's not far down the road

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Speaker 4: enough in terms of well digging in and breaking ground.

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Speaker 3: Where do we stand in terms of actually building.

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Speaker 5: So Intel seven point nine billion dollar ward from the

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Speaker 5: hips AP supports projects across four US states through between

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Speaker 5: now and twenty thirty, by which time Intel plans to

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Speaker 5: send ninety billion of a total one hundred billion CAPEX.

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Speaker 2: On US projects.

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Speaker 6: But projects have.

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Speaker 5: To meet certain benchmarks and milestones to qualify for a

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Speaker 5: funding dispersement, so it'll take a while for the money

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Speaker 5: to actually go out the door and make it into

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Speaker 5: Intel's hands. The first roughly one billion of that will

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Speaker 5: happen this year because Intel has already made progress on

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Speaker 5: projects in Arizona, New Mexico, and Oregon, Ohio. Construction was

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Speaker 5: supposed to finish by late twenty twenty six. Now one

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Speaker 5: of the facilities won't be online until the next decade.

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Speaker 4: Paq Helsinger has joined Bloomberg Technology and sort of vented

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Speaker 4: some frustration at how slow it's been to get the

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Speaker 4: money from the US government.

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Speaker 3: And also you note.

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Speaker 4: That this is a little bit less than previously estimated.

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Speaker 5: So it's been a very long process for Intel and

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Speaker 5: for all of the other companies. Intel's award was announced

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Speaker 5: at a preliminary stage in March for eight point five

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Speaker 5: billion dollars, and since then the company has.

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Speaker 2: Been going through due diligence.

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Speaker 5: There have been disagreements about how much information Intel has

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Speaker 5: to disclose to the government, and also about terms specifying

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Speaker 5: what happens if Intel stands off at manufacturing business.

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Speaker 6: Or is acquired in part or in whole.

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Speaker 5: That's obviously a pretty tense discussion with Intel when they're

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Speaker 5: going through some serious financial problems, and there have been

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Speaker 5: conversations with other players in industry about potential m and a.

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Speaker 5: The haircut that Intel took on its award is actually

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Speaker 5: not because of those business problems. It's because the company

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Speaker 5: is separately getting three billion dollars to make chips for

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Speaker 5: the Pentagon. That program was originally supposed to be mostly

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Speaker 5: funded by the Defense Department, but after a big funding

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Speaker 5: stat involving various departments in the Biden administration and lawmakers

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Speaker 5: on Capitol Hill, the Commerce Department had to use its

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Speaker 5: own ship sacked money to support that program, and some

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Speaker 5: of that came from the money already set aside for Intel.

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Speaker 4: Breaking down the numbers and some of the M and

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Speaker 4: A rumors. Mackenzie Hawkins really appreciate it, thank you. Look

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Speaker 4: sticking with those M and A reports previously, Colcom's takeover

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Speaker 4: interest in the company is actually cooling now, sources are

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Speaker 4: telling Bloomberg the complexities associated with acquiring Intel have made

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Speaker 4: it less attractive to Coalcom. A deal would likely have

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Speaker 4: been one of the largest ever in technology. Meanwhile, more

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Speaker 4: on chips and tech more broadly, as bringing in Nancy Curtain,

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Speaker 4: chief investment Officer and ULTI team and global Nazi. It's

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Speaker 4: always so important to have your voice on the show

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Speaker 4: talking about the global context here, just dig in on

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Speaker 4: for example, M and A hopes around this new administration

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Speaker 4: coming in twenty twenty five and deals getting done, chips

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Speaker 4: being supported or not supported as a sector.

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Speaker 3: What do you make of it?

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Speaker 7: Well, let's start with M and A first, and we

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Speaker 7: do think that M and A will increase. You know,

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Speaker 7: you have pretty rigorous merger guidelines passed by President Biden

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Speaker 7: in twenty twenty three. We reckon those will be undone

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Speaker 7: under President elect Trump. And remember they had lowered the

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Speaker 7: guidance threshold at a company being seen as anti competitive.

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Speaker 7: So we do think it's going to be a friendlier

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Speaker 7: environment for regulation, a friendlier environment for M and A,

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Speaker 7: and expect that animal spirits M and A and IPOs

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Speaker 7: will pick up in twenty twenty five. So we think

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Speaker 7: this is one of the positives coming from Trump. Just

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Speaker 7: quickly on the Chips Act and Intel, are we back

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Speaker 7: in their own horse there? I mean, this is supposed

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Speaker 7: to create jobs. They just laid off fifteen percent of

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Speaker 7: the workforce, and I kind of look at and think

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Speaker 7: in Video didn't get any money from the CHIPSAC and

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Speaker 7: it's actually doing a pretty dark good job of actually

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Speaker 7: supplying the chips industry. So I think this is a program.

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Speaker 7: It's hard to change and remove these legislative programs. It's

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Speaker 7: not a program the president Electron favors very much. I

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Speaker 7: think he called it a really bad program.

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Speaker 3: Yeah, so stay tuned on in Video.

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Speaker 4: Though they basically get TSMC and other chip makers to

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Speaker 4: produce this is all about on shoring and making sure

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Speaker 4: that chips can be made in the United States.

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Speaker 3: When you're looking at in Video, and.

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Speaker 4: Indeed, it's exposure, whether it be selling into China or

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Speaker 4: indeed depending on a supply chain that is in many

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Speaker 4: ways related to Taiwan.

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Speaker 3: How does that factor into an investment thesis.

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Speaker 7: Well, as you know, Trump has said Tara's the most

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Speaker 7: beautiful word in the English language. So you know, maybe

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Speaker 7: Trump just used some tariffs here on TSMC because that

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Speaker 7: would incur coourage them to think about And by the way,

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Speaker 7: they were part of the Chips Act as well, so

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Speaker 7: they did receive some subsidies there. But you know that

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Speaker 7: might encourage them to accelerate production in the United States. Now,

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Speaker 7: how will in Vidia respond, I don't know. With seventy

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Speaker 7: four percent gross margins and it seems like insane demand

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Speaker 7: in Jensen Wayne's words, it seems like they're just going

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Speaker 7: to raise prices. So you know, if we get some

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Speaker 7: tariffs on TSMC, which I wouldn't be surprised, I just

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Speaker 7: think in Video will end up passing that on to

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Speaker 7: its demand hungry customers.

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Speaker 4: It feels like you've got some nues about which horses

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Speaker 4: you should back. But more broadly, the winners I likely

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Speaker 4: to continue winning into the next administration is that we

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Speaker 4: are articulating. Is it's still good to be longing tech here?

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Speaker 7: I mean, let's just talk about a little bit of

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Speaker 7: the winners and semiconductor. You know, at the end of

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Speaker 7: the day, Nvidia is clearly in poll position monopoly position,

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Speaker 7: I mean, more demand than supply. But competition is coming.

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Speaker 7: Remember forty percent of their data center customers are also

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Speaker 7: trying to compete with them. Amazon's coming pretty close here

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Speaker 7: in developing a chip. Now I understand it's forty percent cheaper.

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Speaker 7: Not really sure the performance benchmarks with respect to training

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Speaker 7: an inference, they haven't been published and it's not clear

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Speaker 7: it's in production.

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Speaker 3: Mode, so to speak. So let's see what happens.

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Speaker 7: And of course, to a certain extent, AMD and Intel

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Speaker 7: are fast trying to be competitors as well. So competition

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Speaker 7: is on the way and we should expect to see

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Speaker 7: more of that. You know, people are looking at the

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Speaker 7: price of Nvidia chips, the fact that they can't get

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Speaker 7: access and are trying to diversify their supply sources, and

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Speaker 7: that makes sense, right, So we do expect competition to

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Speaker 7: come as we look forward. Now, I don't say this

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Speaker 7: is a Q one. I think Nvidia should have another

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Speaker 7: blockbuster quarter. Certainly they were pretty clear about it. They

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Speaker 7: expect revenues to be up seventy percent in the next quarter,

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Speaker 7: and they normally beat that number. So let's see where

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Speaker 7: that comes out.

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Speaker 4: Customers look at the price of the chips, Investors look

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Speaker 4: at the price of the stock. With an Nvidia trading

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Speaker 4: at forty six times future earnings, many have been perhaps

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Speaker 4: taking a bit of profit. When you're looking at Tesla

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Speaker 4: that's trading at one hundred and forty.

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Speaker 3: One times future earnings.

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Speaker 4: What do you make about the optimism beaked into that

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Speaker 4: stock post election?

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Speaker 1: WILLD Tesler is clearly a special child at the moment

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Speaker 1: given the relationship between Eli Musk, you know, and Trump,

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Speaker 1: and you know, in these stocks, these magnificent.

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Speaker 7: Seven you know, on average there at about thirty five

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Speaker 7: times forward earnings at the moment, and that means makes

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Speaker 7: them very vulnerable to disappointment.

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Speaker 8: Right.

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Speaker 7: So one of the themes that we've had on this

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Speaker 7: year is, you know, tech is fine. We believe in

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Speaker 7: jen Ai, but you need to diversify beyond just those

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Speaker 7: magnificent seven technology shares that have fueled the market's advanced

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Speaker 7: and we think MidCap and particular trading at about thirteen

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Speaker 7: fourteen times earnings up close to ten percent already this

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Speaker 7: month is an excellent beneficiary OMAGA, potentially corporate tax rate cuts,

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Speaker 7: manufacturer renaissance, and a better outlook for growth in the

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Speaker 7: United States. So there are other things you can do

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Speaker 7: and diversify away from tech. By the way, where earnings

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Speaker 7: are expected to decelerate in the so called Magnificent seven

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Speaker 7: as we head into twenty twenty five, where they're supposed

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Speaker 7: to accelerate in the rest of the market, and so

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Speaker 7: I think that's a really way nice way to still

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Speaker 7: learn a return, participate, but protect some of that valuation potential,

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Speaker 7: downside risk and tech.

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Speaker 4: Massacatain always great to catch up. Thank you, Chief Investment

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Speaker 4: Officer for an ltteam and Global I. Meanwhile, let's just

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Speaker 4: talk about globally. China's shaw Me preparing a self design

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Speaker 4: mobile processor for its upcoming smartphones. This comes as an

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Speaker 4: effort to actually reduce its reliance on foreign suppliers Qualcom

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Speaker 4: Media Tech. According to sources, massuction of the chip is

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Speaker 4: expected to begin in twenty twenty five. Coming up, well,

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Speaker 4: deja vu, President elect Donald Trump rattling markets across the

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Speaker 4: world with more tariff threats. We discussed the potential impact

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Speaker 4: on the tech sector next and we were just looking

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Speaker 4: at Tesla with Nancy Nestwell on it a little bit

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Speaker 4: more upper percentage point. We will recover from some of

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Speaker 4: yesterday's sell off. Will going to dig in on what

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Speaker 4: California is currently threatening, how they could be excluding them

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Speaker 4: from any future support for EVS if indeed federal support

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Speaker 4: is taken away.

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Speaker 3: This is BlueBag technology.

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Speaker 4: President's elect Donald Trump took to truth Social to vow

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Speaker 4: additional tariffs on Mexico, Canada, and China, and the comment

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Speaker 4: marks his first specific threat to the top trading partners

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Speaker 4: of the United States since his election win just three

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Speaker 4: weeks ago.

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Speaker 3: Now, Bloomberg's Michael Shepherd joins us or for more.

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Speaker 4: He promised it on campaign trail, and now he's once

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Speaker 4: again reconfirming.

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Speaker 9: He's taking a step closer. Caroline, this is what the

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Speaker 9: president elect have been telling his voters all along, that

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Speaker 9: he would try to bring manufacturing back to the US

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Speaker 9: using tariffs as his primary weapon. Now he is threatening

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Speaker 9: to use tariffs for something else, and this is to

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Speaker 9: extract policy concessions from America's key trading partners. With Canada

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Speaker 9: and Mexico. It's his concern about the border and with China.

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Speaker 9: He is really trying to get Beijing to cooperate more

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Speaker 9: in his view to stem the flow of fentanyl in

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Speaker 9: the US, which has been blamed for a surge in

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Speaker 9: overdose deaths in recent years. So we're seeing tariffs being

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Speaker 9: applied in a different since, not purely economically, but to

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Speaker 9: actually get a policy goal out of a key US counterpart.

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Speaker 4: Yeah, and some of those policy goals the ones we

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Speaker 4: heard in the previous administration too. The market more broadly

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Speaker 4: is sort of it in its stride, and I'm wondering

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Speaker 4: whether people feel that they'll be carve outs, whether or

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Speaker 4: not this will specifically hit certain industries.

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Speaker 9: Mike, Well, there's so many unanswered questions around this, Caroline

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Speaker 9: right now, because he really just kind of dropped it

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Speaker 9: on truth Social less than twenty four hours ago and

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Speaker 9: walked away, and his transition team has not answered any

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Speaker 9: further questions about just as you say, will there be carveouts?

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Speaker 9: Is this in addition to the Tarasi had already been

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Speaker 9: threatening a sixty percent level against goods coming in from China?

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Speaker 9: And likewise, what does this mean for the USMCA agreement

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Speaker 9: that he forged to replace NAFTA during his first term

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Speaker 9: in office? In any case, this will have a major

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Speaker 9: ripple effect on the economy and on supply chains. If enacted,

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Speaker 9: it would affect autos, It would affect very significantly the

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Speaker 9: tech trade with China. We do a huge amount of

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Speaker 9: business with Chinese companies, sending them legacy semiconduct, getting finished

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Speaker 9: computers back, and all of that would be royal by this,

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Speaker 9: and we would have to watch for these trading partners

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Speaker 9: to assess, as Mexico warned it might do today, whether

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Speaker 9: they would retaliate in kind.

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Speaker 4: Michael Sheppard always such a thorough setup. We really appreciate

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Speaker 4: taking us through what is at the moment just a

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Speaker 4: statement on truth social but let's try and extrapolate it out.

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Speaker 4: With Mary Lovely, senior fellow at the Peterson Institute for

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Speaker 4: International Economics and Mike there was discussing how this will

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Speaker 4: affect auto's immediately In the tech industry, we think evs.

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Speaker 4: But Mary, what are the ramifications on the auto sector

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Speaker 4: do you think?

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Speaker 3: Yeah?

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Speaker 6: It's great to be with you.

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Speaker 10: Well, first of all, when we're talking trade with Canada

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Speaker 10: and Mexico, the first job has to be the auto sector.

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Speaker 10: It's the most important export other than fuel from Canada

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Speaker 10: that comes.

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Speaker 6: From our two USMCA partners.

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Speaker 10: Production is fully integrated between the United States, Canada, and Mexico.

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Speaker 6: Cars go back and forth.

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Speaker 10: By some accounts, certain vehicles can go back and forth

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Speaker 10: across the border seven or more times before they're sent

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Speaker 10: to an auto dealer. So this would be extremely disruptive.

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Speaker 10: We would imagine that auto companies would be lining up

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Speaker 10: to tell the new administration how harmful this would be

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Speaker 10: not only to the two countries involved in this, Canada Mexico,

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Speaker 10: but to the United States and to the plants that

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Speaker 10: are in the United States waiting for those parts. So

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Speaker 10: undoubtedly it would lead to disruptions of US production and.

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Speaker 4: Increase costs, as many would anticipate from a consumer perspective.

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Speaker 4: What about the supply chain when it affects China and

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Speaker 4: US technology companies?

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Speaker 3: Here how intertwined?

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Speaker 4: How dependent does the US remain on Chinese pots and goods?

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Speaker 10: Yeah, since the First Trade War, US has depended less

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Speaker 10: strongly on China. But we have to remember that many

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Speaker 10: of the electronic devices that we know and love were

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Speaker 10: not actually tax under the First Trade War. So final

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Speaker 10: items like laptops, nip notebooks, smart watches, cell phones, none

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Speaker 10: of those were actually hit with the first trade war,

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Speaker 10: tariffs peripherals were things that we may use with these devices.

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Speaker 10: So that's you know, he has already proposed or promised

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Speaker 10: a flat sixty on China. We don't know if this

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Speaker 10: extra ten percent that he sent out last night is

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Speaker 10: by a social media post, is on top of that

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Speaker 10: or part of that. Either way, it's going to be

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Speaker 10: extremely disruptive because our companies have not had time to

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Speaker 10: move these vast supply chains out of China.

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Speaker 3: Take Apple for a case study.

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Speaker 4: They have been trying to depend more on India, for example,

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Speaker 4: of the Southeast Asian countries, and we've seen him just

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Speaker 4: in China over the weekend, trying to ensure the relationships

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Speaker 4: remain strong with the government there. But also many understand

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Speaker 4: that Tim Cook has a decent relationship with the incoming administration.

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Speaker 4: Do you think CEOs are anticipating CoV outs? Do you

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Speaker 4: think CEOs are able to manage this without passing it

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Speaker 4: on to a consumer.

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Speaker 10: I think they understand how disruptive this would be, and

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Speaker 10: that if we know that there are constitutional limits on

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Speaker 10: what the president can do, he's shown a pension for

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Speaker 10: trying to blow past a lot of the limits that

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Speaker 10: people have tried to place on him, but he can't

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Speaker 10: revoke the law of economics, and there's economics limits to

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Speaker 10: what he can do, or at least economic constraints. They're

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Speaker 10: going to cause him a lot of trouble, not only

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Speaker 10: in individual sectors, but on the macro front. Inflation will

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Speaker 10: kick up again, for example, something which voters have shown

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Speaker 10: that they dislike intensely. So I think it would be

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Speaker 10: wise that C suites are anticipating.

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Speaker 6: That this will be either set up with carve outs.

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Speaker 10: Or it will be rolled back in terms of the

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Speaker 10: absolute tex amount.

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Speaker 6: That he is going to levy.

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Speaker 10: So I think we have a long way to go

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Speaker 10: before this social media quote becomes new taxes on US trade?

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Speaker 4: How effective in the first iteration were tariffs on changing

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Speaker 4: the flow of goods out of China in the US,

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Speaker 4: reducing perhaps dependence or indeed the overall trade excess or

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Speaker 4: lack thereof.

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Speaker 10: I think we saw the value of trade dropped by

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Speaker 10: about thirty percent between well US and China. Remember, China

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Speaker 10: also retaliated against the US. We would certainly expect to

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Speaker 10: see some retaliation again, not just from China but also

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Speaker 10: from our other partners. So it had a significant effect

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Speaker 10: on trade flows.

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Speaker 6: That said, a lot of that trade was diverted to countries.

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Speaker 10: There's very little evidence that any of that activity came

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Speaker 10: back to the United States. Some of it flowed to Vietnam,

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Speaker 10: some of it flowed to other parts of East and

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Speaker 10: Southeast Asia, and of course some of it went into Mexico,

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Speaker 10: which is why we've seen our trade, particularly in electronics

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Speaker 10: and electrical devices increase with Mexico.

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Speaker 4: Very lovely and the vets and Institute breaking it all down.

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Speaker 4: Thank you, Meta TikTok Google. They're taking aim in Australia's

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Speaker 4: legislation to ban children under sixteen from accessing such social

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Speaker 4: media platforms. The government in Australia is pushing to pass

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Speaker 4: the bill through parliament this week.

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Speaker 3: Under the proposed bill, the.

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Speaker 4: Social Media Chance would be responsible for policing that ban

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Speaker 4: under threats of fines of up to thirty two point

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Speaker 4: five million dollars. Let's bring in bring those, Kurt Wagner

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Speaker 4: and look, thirty two and a half million dollars is

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Speaker 4: but a drop in the ocean for any of these companies.

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Speaker 3: But what is to fear here for them?

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Speaker 8: Yeah?

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Speaker 11: I think the bigger concern here is that this serves

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Speaker 11: as some kind of a blueprint or template that other

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Speaker 11: countries are going to adopt. Right, I mean, the last

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Speaker 11: thing these companies want, these services want is for teenagers

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Speaker 11: young people to not be able to use their services

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Speaker 11: because that's how they get that next.

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Speaker 6: Generation and users.

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Speaker 11: And so if this ends up working in Australia, or

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Speaker 11: it ends up getting passed and sort of effectively ending

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Speaker 11: that connection, there would be real concern that other countries,

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Speaker 11: especially those in Europe where regulation around these big tech

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Speaker 11: companies has been much tighter, that other countries would try

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Speaker 11: to maybe follow in their footsteps.

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Speaker 4: It's interesting that we've had a spate of activity around

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Speaker 4: protecting young people, whether it's in gaming with roadblocks, but

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Speaker 4: also Instagram for example, they have their teen accounts rolled out.

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Speaker 4: What is it then when instagram parent company Metro is

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Speaker 4: coming out and saying that this is going to be

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Speaker 4: really hard to enforce. We had a statement from Meta

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Speaker 4: saying that the approach will require each app provider to

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Speaker 4: collect personal identification or biometric data from all Australians. Are

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Speaker 4: they trying to make out that this is you know,

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Speaker 4: this is an issue of free speech and identity here?

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Speaker 11: Yeah, I mean this is kind of an old playbook

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Speaker 11: from them, right, which is to really push back and say, hey,

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Speaker 11: this is impossible technologically, we can't do this, right and

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Speaker 11: Meta is not the only company to say those kinds

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Speaker 11: of things. At the same time, those team accounts you mentioned,

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Speaker 11: Caroline are exactly the type of thing that you would

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Speaker 11: think they could roll out in Australia, right, which is

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Speaker 11: they automatically put teens into two more strict settings. They

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Speaker 11: require you know, ID or some other type of verification

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Speaker 11: before those teens can age up into an account for

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Speaker 11: eighteen plus. And so while I do agree that it

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Speaker 11: probably is a very tough technical challenge, I don't think

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Speaker 11: it's necessarily impossible, and I think it's in Meta's best

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Speaker 11: interests and all these companies' best interest to get across

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Speaker 11: the fact that this is a tough chain Andre that's

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Speaker 11: their argument is that hey, we can't do this.

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Speaker 4: All eyes on how it goes through the Parliament this week.

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Speaker 4: Wagner being asked to work hard up until holidays.

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Speaker 3: We thank you.

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Speaker 4: Welcome back to lum Meg Technology. I'm Caroline Hide in

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Speaker 4: New York. A quick check in on these markets and

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Speaker 4: more specifically crypto, because look, the ecosystem added about a

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Speaker 4: trillion dollars. Since the election of Donald Trump for the

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Speaker 4: administration in twenty twenty five, we had seen a bit

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Speaker 4: of a pullback from close to one hundred thousand dollars.

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Speaker 4: We've called down slightly maybe sort of about a four

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Speaker 4: day sell off. Eight percent wiped off. We're now recovering

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Speaker 4: a little bit up sixt tens percent. Ninety four two

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Speaker 4: undred and sixty three is where we trade as people

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Speaker 4: lock in profits, maybe question some of the geopolitical risks

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Speaker 4: once again, and some risk aversion. But more broadly, let's

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Speaker 4: talk about politics post the election of Trump, and in

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Speaker 4: particular California Governor Gavin Newsom proposing a state incentive for

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Speaker 4: EV buyers if federal support is taken away, but it

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Speaker 4: would exclude Tesla's models from a market share limitation perspective

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Speaker 4: that this move is aiming to create market editions for

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Speaker 4: more car makers to enter the EV market, but confurther

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Speaker 4: escalate tensions between these two characters, Elon Musk and Gavin Newsom.

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Speaker 4: Let's talk about it all webnomgs Ilia, Yahoo, Keemische who

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Speaker 4: joins us for more? And look, this is Gavin Newsom

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Speaker 4: trying to front run any change from the new administration.

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Speaker 4: If they take away that seven and a half thousand

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Speaker 4: dollars tax credit for EV purchases, California will be there

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Speaker 4: to step in and support.

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Speaker 3: But why limit Tesla's.

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Speaker 12: Yeah, that's exactly right. This is part of Newsom coming

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Speaker 12: out from and saying Trump does take this away, we're

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Speaker 12: going to Californians are still going to be eligible for

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Speaker 12: electric vehicle tax credits. But the proposal that he gave

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Speaker 12: yesterday says that there's a market share limitation which would

443
00:23:57,240 --> 00:24:01,119
Speaker 12: prevent Tesla from qualifying from these credit. It's their reasoning

444
00:24:01,200 --> 00:24:05,040
Speaker 12: for that is that they want to spur competition of

445
00:24:06,800 --> 00:24:10,320
Speaker 12: smaller electric vehicle manufacturers in the state, and they said

446
00:24:10,359 --> 00:24:12,240
Speaker 12: they want them to take root in the state. So

447
00:24:12,640 --> 00:24:16,359
Speaker 12: essentially they're saying, you know, Tesla already has a huge

448
00:24:16,359 --> 00:24:19,119
Speaker 12: market share in the state, and they want some of

449
00:24:19,119 --> 00:24:21,600
Speaker 12: the smaller guys to be able to compete. A lot

450
00:24:21,640 --> 00:24:25,679
Speaker 12: of these other electric vehicle manufacturers are losing money, some

451
00:24:25,720 --> 00:24:29,320
Speaker 12: of the traditional OEM manufacturers are losing money when they

452
00:24:29,400 --> 00:24:33,960
Speaker 12: sell an electric vehicle, so this is kind of an

453
00:24:34,040 --> 00:24:36,840
Speaker 12: incentive for those smaller guys, while Tesla is making money

454
00:24:36,840 --> 00:24:37,800
Speaker 12: every time they sell a car.

455
00:24:39,320 --> 00:24:42,560
Speaker 4: I can imagine that Ilia who that this is going

456
00:24:42,600 --> 00:24:46,000
Speaker 4: to be seen as therefore punishment for success, for punishment

457
00:24:46,040 --> 00:24:49,040
Speaker 4: for being profitable. Already, I mean, what do we anticipate

458
00:24:49,080 --> 00:24:52,200
Speaker 4: in terms of the reaction coming from Elon Musk because

459
00:24:52,200 --> 00:24:54,960
Speaker 4: he's not been afraid to have pretty tough words for

460
00:24:55,000 --> 00:24:56,119
Speaker 4: Gavin Newsom in the past.

461
00:24:57,720 --> 00:25:00,800
Speaker 12: Yeah, I mean Elon Musk has already come out swinging

462
00:25:00,840 --> 00:25:03,760
Speaker 12: and he called this proposal insane, and he cited that

463
00:25:05,040 --> 00:25:08,240
Speaker 12: Tesla is the only car manufacturer that is actually producing

464
00:25:08,280 --> 00:25:11,040
Speaker 12: cars in California, and they have a lot of employees

465
00:25:11,080 --> 00:25:13,920
Speaker 12: based in California, even though they did move their headquarters

466
00:25:14,160 --> 00:25:18,120
Speaker 12: to Texas. So I think it really does raise the

467
00:25:18,119 --> 00:25:24,080
Speaker 12: tensions between these two characters. California is becoming this oil

468
00:25:24,280 --> 00:25:28,320
Speaker 12: to the Trump administration, and Elon Musk has taken a

469
00:25:28,680 --> 00:25:32,639
Speaker 12: newfound prominence in Republican politics. So you're seeing kind of

470
00:25:32,800 --> 00:25:38,000
Speaker 12: Elon Musk and Newsome becoming these emerging characters that are

471
00:25:38,040 --> 00:25:42,119
Speaker 12: representing kind of the new state of politics in the

472
00:25:42,119 --> 00:25:42,800
Speaker 12: country right.

473
00:25:42,720 --> 00:25:47,600
Speaker 4: Now, California and some massive economy. Elijah who commissa thank

474
00:25:47,640 --> 00:25:49,720
Speaker 4: you for breaking it down. Let's just keep this discussion

475
00:25:49,720 --> 00:25:53,080
Speaker 4: going with Jessica Caldwell, head of Insights at Edmonds, and

476
00:25:53,400 --> 00:25:56,120
Speaker 4: your focus that you can bring us is the underlying

477
00:25:56,200 --> 00:25:59,680
Speaker 4: data of EV sales, the actual success story that Tesla

478
00:25:59,760 --> 00:26:03,160
Speaker 4: has compared to other competitors. Jessica, what will this mean

479
00:26:03,160 --> 00:26:05,639
Speaker 4: for competition? Could it spur competition?

480
00:26:07,040 --> 00:26:08,840
Speaker 2: I mean it's definitely going to spur competition.

481
00:26:08,920 --> 00:26:10,480
Speaker 13: I mean, if you're out there at your shopping for

482
00:26:10,520 --> 00:26:13,399
Speaker 13: a vehicle one adiligible for seventy five hundred dollars rebate,

483
00:26:13,440 --> 00:26:16,200
Speaker 13: when is not I mean you're going to shop both vehicles.

484
00:26:16,280 --> 00:26:19,080
Speaker 13: Of course, everyone knows what Tesla is. They have a

485
00:26:19,160 --> 00:26:22,360
Speaker 13: lot of brand recognition, but something like this is going

486
00:26:22,400 --> 00:26:25,080
Speaker 13: to get shoppers to look and consider other things, and

487
00:26:25,119 --> 00:26:27,960
Speaker 13: a lot of times that does ultimately end in a purchase. So,

488
00:26:28,600 --> 00:26:31,080
Speaker 13: without a doubt, Tesla will be at a disadvantage if

489
00:26:31,200 --> 00:26:31,960
Speaker 13: this goes through.

490
00:26:32,440 --> 00:26:34,720
Speaker 4: Jessica, just set the context here though, seven and a

491
00:26:34,760 --> 00:26:37,080
Speaker 4: half thousand, what does that mean for the ultimate price

492
00:26:37,119 --> 00:26:39,520
Speaker 4: point of an easy right now? Because well, they're not

493
00:26:39,640 --> 00:26:41,600
Speaker 4: cheap and seven and a half thousand doesn't seem that

494
00:26:41,680 --> 00:26:43,080
Speaker 4: much in comparison.

495
00:26:42,520 --> 00:26:44,120
Speaker 3: To the cost of a Rivian for example.

496
00:26:45,320 --> 00:26:47,280
Speaker 13: Yeah, I mean that is true, but I think as

497
00:26:47,320 --> 00:26:50,000
Speaker 13: we go towards the mass market consumer, they're looking for

498
00:26:50,119 --> 00:26:53,200
Speaker 13: cheaper evs, and in that case, seventy five hundred dollars

499
00:26:53,440 --> 00:26:56,399
Speaker 13: does become probably more attractive because someone that's buying one

500
00:26:56,480 --> 00:26:58,919
Speaker 13: hundred thousand dollars EV they're probably not bothered by these

501
00:26:58,960 --> 00:27:01,560
Speaker 13: rebeates anyhow. And at the end of the day, people

502
00:27:01,600 --> 00:27:03,719
Speaker 13: are buying a lot of times even though they shouldn't

503
00:27:03,760 --> 00:27:06,440
Speaker 13: be on monthly payment, and so when it's calculated out,

504
00:27:06,640 --> 00:27:08,720
Speaker 13: you're looking at the monthly payment, the seventy five hundred

505
00:27:08,720 --> 00:27:10,639
Speaker 13: dollars apply, especially for lease customers.

506
00:27:10,760 --> 00:27:11,919
Speaker 2: That can make a really.

507
00:27:11,640 --> 00:27:13,840
Speaker 13: Big difference and make that a lot more attractive and

508
00:27:13,840 --> 00:27:15,240
Speaker 13: get consumers to buy.

509
00:27:15,400 --> 00:27:19,400
Speaker 4: California, though I'm assuming has been a first adopt early

510
00:27:19,480 --> 00:27:22,520
Speaker 4: adopter of evs. More broadly, when you compare state to state,

511
00:27:22,640 --> 00:27:25,560
Speaker 4: so who is how much of the mass market is

512
00:27:25,560 --> 00:27:28,240
Speaker 4: still left to penetrate in California?

513
00:27:28,320 --> 00:27:29,919
Speaker 13: Well, I think that's the whole thing, is that in

514
00:27:29,960 --> 00:27:32,879
Speaker 13: California the EV market share over twenty percent, So you

515
00:27:33,080 --> 00:27:35,480
Speaker 13: have a lot of masks or a lot of early

516
00:27:35,520 --> 00:27:38,760
Speaker 13: adopters have already purchased. So getting the mass market is

517
00:27:38,760 --> 00:27:41,160
Speaker 13: probably the bigger challenge here because these people need convincing.

518
00:27:41,240 --> 00:27:44,000
Speaker 13: They probably don't have highs income. They're kind of questioning

519
00:27:44,040 --> 00:27:45,920
Speaker 13: whether they even want an EV So now.

520
00:27:45,840 --> 00:27:47,360
Speaker 2: It's a time. If there was ever a time.

521
00:27:47,200 --> 00:27:49,320
Speaker 13: To have an incentive on EV's, it is for the

522
00:27:49,359 --> 00:27:51,600
Speaker 13: mass market, not for the people that were early adopters

523
00:27:51,640 --> 00:27:53,720
Speaker 13: that were excited about EV's to start with and probably

524
00:27:53,720 --> 00:27:55,480
Speaker 13: didn't need much incentive to even purchase.

525
00:27:55,800 --> 00:27:57,440
Speaker 3: Just compare States to state.

526
00:27:57,560 --> 00:28:00,240
Speaker 4: We know that Newsom has not been afraid to push

527
00:28:00,320 --> 00:28:02,720
Speaker 4: back at a LA musk and indeed perhaps be a

528
00:28:02,800 --> 00:28:06,040
Speaker 4: key supporter of the EC sector. Wouldn't this be replicated elsewhere?

529
00:28:06,119 --> 00:28:08,240
Speaker 4: Do you think if federal support did come away?

530
00:28:09,520 --> 00:28:11,439
Speaker 2: I mean, it's likely we have things like CARB states.

531
00:28:11,560 --> 00:28:14,200
Speaker 13: Other people are following some of the California a Resource Board,

532
00:28:14,320 --> 00:28:16,399
Speaker 13: some of the edicts that they have put out, So

533
00:28:16,480 --> 00:28:18,480
Speaker 13: there is a president here of other states kind of

534
00:28:18,480 --> 00:28:19,920
Speaker 13: following California's lead.

535
00:28:20,280 --> 00:28:21,640
Speaker 2: But at the end of the day, this program does

536
00:28:21,680 --> 00:28:25,320
Speaker 2: sound quite costly, especially if you're to sell a lot

537
00:28:25,400 --> 00:28:26,000
Speaker 2: of vehicles.

538
00:28:26,000 --> 00:28:28,480
Speaker 13: So state's going to have to find funding for this program,

539
00:28:28,720 --> 00:28:31,040
Speaker 13: which may be complicated. I mean, California has a clear

540
00:28:31,160 --> 00:28:33,440
Speaker 13: order zero missions vehicle by twenty thirty five.

541
00:28:33,960 --> 00:28:36,520
Speaker 2: And you know, if that's the case, then programs like.

542
00:28:36,440 --> 00:28:38,680
Speaker 13: This will have to exist to spur that mass market

543
00:28:38,720 --> 00:28:39,400
Speaker 13: to start to buy.

544
00:28:39,960 --> 00:28:41,680
Speaker 3: They really want to spur the mass market.

545
00:28:42,160 --> 00:28:45,360
Speaker 4: You'd anticipate that you let Chinese EV's in, which are

546
00:28:45,440 --> 00:28:49,080
Speaker 4: much cheaper than US competitors. Who therefore, given that that

547
00:28:49,120 --> 00:28:51,880
Speaker 4: won't be the case, where are the cheaper vehicles, who

548
00:28:51,920 --> 00:28:53,120
Speaker 4: will this end up supporting?

549
00:28:54,560 --> 00:28:55,080
Speaker 6: Well, I mean, I.

550
00:28:55,080 --> 00:28:57,360
Speaker 2: Think any automakers. I mean they're all kind of scrambling.

551
00:28:57,360 --> 00:28:59,360
Speaker 13: I mean, in this era of affordability, it costs all

552
00:28:59,360 --> 00:29:02,520
Speaker 13: living increase of inflation, people just feeling a lot less

553
00:29:02,520 --> 00:29:03,440
Speaker 13: wealthy than they have in.

554
00:29:03,400 --> 00:29:06,480
Speaker 2: The past has been a big issue for car buyers.

555
00:29:06,640 --> 00:29:08,360
Speaker 13: So I think a lot of automakers are trying to

556
00:29:08,440 --> 00:29:11,400
Speaker 13: focus on the lower end. To anyone that is delivering

557
00:29:11,720 --> 00:29:14,160
Speaker 13: good value that kind of has maybe like you know,

558
00:29:14,160 --> 00:29:16,560
Speaker 13: a forty thousand dollars price tag, they're probably going to

559
00:29:16,640 --> 00:29:18,320
Speaker 13: get a lot more eyeballs than some of these other

560
00:29:18,320 --> 00:29:20,160
Speaker 13: things that we have seen, you know, like the Jaguar

561
00:29:20,240 --> 00:29:22,360
Speaker 13: coming out in a few years or any of these

562
00:29:22,400 --> 00:29:24,360
Speaker 13: you know, six figure EV type of vehicles.

563
00:29:25,280 --> 00:29:27,040
Speaker 4: All eyes on the neis sounds of this world, Jessica

564
00:29:27,040 --> 00:29:29,880
Speaker 4: Cool well, we thank you. Kind of insights over at Edmund's.

565
00:29:30,080 --> 00:29:33,440
Speaker 4: I meanwhile coming up Klana getting ready for that IPO.

566
00:29:33,640 --> 00:29:34,520
Speaker 3: We'll discuss with.

567
00:29:34,560 --> 00:29:38,280
Speaker 4: Headlines Cameron and Sorry, and what it means for other

568
00:29:38,320 --> 00:29:40,600
Speaker 4: fintech companies that may also be mone and going public.

569
00:29:41,160 --> 00:29:49,360
Speaker 3: This is what we make Technology.

570
00:29:54,640 --> 00:29:58,320
Speaker 4: A group of former Google and Stripe executives who helped

571
00:29:58,360 --> 00:30:01,600
Speaker 4: build the Android platform and raising fifty six million dollars

572
00:30:01,640 --> 00:30:04,040
Speaker 4: for a new company. This one focused on developing an

573
00:30:04,080 --> 00:30:08,040
Speaker 4: operating system for AI agents. Showing KAfari joins us now

574
00:30:08,080 --> 00:30:10,520
Speaker 4: showing every other moment I seem to reading about the

575
00:30:10,600 --> 00:30:14,040
Speaker 4: latest AI agent company, and this one's actually to foster

576
00:30:14,120 --> 00:30:15,680
Speaker 4: an operating system for its adoption.

577
00:30:17,560 --> 00:30:18,040
Speaker 3: That's right.

578
00:30:18,120 --> 00:30:21,240
Speaker 14: So the idea is they're not actually building the agents themselves,

579
00:30:21,480 --> 00:30:25,080
Speaker 14: but because they believe that the future of computing will

580
00:30:25,080 --> 00:30:27,920
Speaker 14: not be necessarily about apps, that the next evolution of

581
00:30:27,960 --> 00:30:31,120
Speaker 14: these AI agents, that they want to build something that

582
00:30:31,160 --> 00:30:33,320
Speaker 14: will connect all these agents to be able to talk

583
00:30:33,360 --> 00:30:36,280
Speaker 14: to each other and for developers to all build on

584
00:30:36,280 --> 00:30:39,440
Speaker 14: one platform, kind of like how we have Android for OS.

585
00:30:40,080 --> 00:30:41,920
Speaker 4: It's called well, I don't know how it would say

586
00:30:41,920 --> 00:30:45,280
Speaker 4: it slash dev, slash agents or just dev agents as

587
00:30:45,280 --> 00:30:46,840
Speaker 4: they're coming out of stealth.

588
00:30:46,880 --> 00:30:47,680
Speaker 3: This is the new name.

589
00:30:47,720 --> 00:30:51,400
Speaker 4: They've got some really interesting characters on their cap table now,

590
00:30:51,400 --> 00:30:57,000
Speaker 4: so Alexander Wang of SCALEAI. They've also got Nikesh Aurora,

591
00:30:57,040 --> 00:30:58,880
Speaker 4: who we've been speaking to on the show recently of

592
00:30:58,960 --> 00:31:01,600
Speaker 4: Palo Alto Networks. But who are the vcs behind this

593
00:31:01,720 --> 00:31:02,720
Speaker 4: and how do they find them?

594
00:31:04,160 --> 00:31:08,840
Speaker 14: That's right, so Index is leading the round and Alphabet's

595
00:31:09,200 --> 00:31:12,080
Speaker 14: independent growth arm Capital G is co leading it.

596
00:31:12,480 --> 00:31:14,320
Speaker 3: And what's interesting is that you know, these.

597
00:31:14,120 --> 00:31:16,360
Speaker 14: Guys have been known for a long time in Silicon

598
00:31:16,440 --> 00:31:20,440
Speaker 14: Valley helping build the Android platform, and the CEO is

599
00:31:20,440 --> 00:31:23,920
Speaker 14: also a former Stripe executive. You a CTO there, so

600
00:31:24,080 --> 00:31:26,800
Speaker 14: you know these people. These investors have known these these

601
00:31:27,520 --> 00:31:30,120
Speaker 14: leaders for a while. And actually the lead partner at

602
00:31:30,120 --> 00:31:33,280
Speaker 14: Index knew the founder back at Google. They both worked

603
00:31:33,320 --> 00:31:38,240
Speaker 14: together briefly at Google. So yeah, it's a really interesting,

604
00:31:38,680 --> 00:31:41,200
Speaker 14: I think case study of where you see this sort

605
00:31:41,200 --> 00:31:44,719
Speaker 14: of founder market fit. The lead investor told me right

606
00:31:44,760 --> 00:31:47,120
Speaker 14: where people have a lot of confidence in this group

607
00:31:47,160 --> 00:31:50,200
Speaker 14: to be able to execute on this kind of ambitious

608
00:31:50,200 --> 00:31:53,280
Speaker 14: plan to build a new network that can connect this

609
00:31:53,400 --> 00:31:56,120
Speaker 14: future wave of technology we're seeing with AI agents.

610
00:31:56,480 --> 00:31:59,720
Speaker 4: David Singleton, who is over Stripe as CTO quoting it

611
00:31:59,760 --> 00:32:02,640
Speaker 4: we need an Android like moment for Ai Shoreen KAfari,

612
00:32:02,880 --> 00:32:05,360
Speaker 4: thank you so much for bring us the latest funding round. Meanwhile,

613
00:32:05,520 --> 00:32:10,200
Speaker 4: let's dig into funding rounds to future IPOs and exits. Karana,

614
00:32:10,280 --> 00:32:12,560
Speaker 4: for example, another key fintech that we're all getting on

615
00:32:12,600 --> 00:32:15,480
Speaker 4: our mind for its IPO. We understand it almost broke

616
00:32:15,520 --> 00:32:18,200
Speaker 4: even in the first nine months of the year, companies

617
00:32:18,240 --> 00:32:21,280
Speaker 4: stating that as at eyes the markets in today's VC Spotlight,

618
00:32:21,320 --> 00:32:24,080
Speaker 4: let's dig in with Cameron and Sary his partner at Headline,

619
00:32:24,080 --> 00:32:28,600
Speaker 4: who understands by now pay later deeply and I'm.

620
00:32:28,440 --> 00:32:29,760
Speaker 3: Interested in Kharana.

621
00:32:29,920 --> 00:32:32,440
Speaker 4: How important, how integral to the market opening?

622
00:32:32,480 --> 00:32:33,480
Speaker 3: Will it's IPO be?

623
00:32:34,120 --> 00:32:35,920
Speaker 15: Well, it's going to be huge because we really haven't

624
00:32:35,960 --> 00:32:39,640
Speaker 15: had a major tech IPO in months. We had read

625
00:32:39,640 --> 00:32:41,840
Speaker 15: it and I bought it came out back in the spring,

626
00:32:42,200 --> 00:32:44,160
Speaker 15: but it's been quite since then. I think been waiting

627
00:32:44,200 --> 00:32:46,680
Speaker 15: for the election outcome and also to see what's happening

628
00:32:46,760 --> 00:32:49,120
Speaker 15: with interest rates. But now that we're past that, I

629
00:32:49,120 --> 00:32:50,720
Speaker 15: think Clara is going to be the first real test

630
00:32:50,760 --> 00:32:51,760
Speaker 15: of the market.

631
00:32:51,800 --> 00:32:55,600
Speaker 4: And in terms of valuation, like they've been on a

632
00:32:55,680 --> 00:32:56,440
Speaker 4: volatile ride.

633
00:32:56,480 --> 00:32:58,320
Speaker 3: Ro's so too a stripe.

634
00:32:58,400 --> 00:33:00,200
Speaker 4: Look, both of these companies will call up and the

635
00:33:00,200 --> 00:33:03,000
Speaker 4: twenty twenty one year Fouria or around fintech I both

636
00:33:03,040 --> 00:33:05,880
Speaker 4: had a sharp realization of what valuations really are. Klan

637
00:33:05,960 --> 00:33:07,640
Speaker 4: has been bringing its way back as that's strong.

638
00:33:07,680 --> 00:33:09,840
Speaker 8: Absolutely. Look, I think Clarna did a very smart thing.

639
00:33:10,080 --> 00:33:13,080
Speaker 15: They got over what I call valuation nostalgia, where you

640
00:33:13,120 --> 00:33:14,760
Speaker 15: feel like I was worth X before I should be

641
00:33:14,760 --> 00:33:15,920
Speaker 15: worth X now it's not true.

642
00:33:16,000 --> 00:33:17,080
Speaker 8: Right, the markets adjusted.

643
00:33:17,840 --> 00:33:19,479
Speaker 15: Everyone's kind of worth a different price than they were

644
00:33:19,520 --> 00:33:22,040
Speaker 15: in twenty twenty in a zero interest rate environment. So

645
00:33:22,120 --> 00:33:24,720
Speaker 15: Clarnet was valued at forty six billion and they came

646
00:33:24,760 --> 00:33:26,959
Speaker 15: down and did around the next year at seven billion.

647
00:33:27,240 --> 00:33:29,640
Speaker 15: That's a tough pill to swallow, but they did it.

648
00:33:29,680 --> 00:33:31,920
Speaker 15: They did the reset. It was a sober, great decision.

649
00:33:32,280 --> 00:33:34,280
Speaker 15: And now they've built their way back up, and this IPO,

650
00:33:34,320 --> 00:33:36,840
Speaker 15: by all indicasions, will price probably somewhere in fifteen twenty

651
00:33:36,840 --> 00:33:39,360
Speaker 15: billion dollars sort of range, maybe a little higher.

652
00:33:39,520 --> 00:33:41,520
Speaker 8: Their main comp affirm in the US.

653
00:33:41,560 --> 00:33:43,240
Speaker 15: The stock US up like five hundred percent in the

654
00:33:43,320 --> 00:33:45,320
Speaker 15: last couple of years, So I think they're coming out

655
00:33:45,360 --> 00:33:47,280
Speaker 15: at a great time and they're going to get the

656
00:33:47,480 --> 00:33:48,880
Speaker 15: you know, hopefully approach back.

657
00:33:48,720 --> 00:33:51,000
Speaker 8: To where they were. But they did that reset and

658
00:33:51,000 --> 00:33:51,920
Speaker 8: that was very smart them.

659
00:33:52,240 --> 00:33:55,200
Speaker 4: What's interesting is that the secondary market has been so

660
00:33:55,280 --> 00:33:58,200
Speaker 4: active and so many companies have a decent chunk of

661
00:33:58,320 --> 00:33:59,400
Speaker 4: change they don't.

662
00:33:59,200 --> 00:33:59,920
Speaker 3: Need to exit.

663
00:34:00,040 --> 00:34:02,800
Speaker 4: So, for example, Stripe has been buying back its own

664
00:34:02,920 --> 00:34:06,240
Speaker 4: stock from previous employees. They so little need to go

665
00:34:06,280 --> 00:34:08,680
Speaker 4: and tap the markets. Why then should a Klan or

666
00:34:08,719 --> 00:34:10,680
Speaker 4: a Stripe eventually come an IPO.

667
00:34:10,600 --> 00:34:13,719
Speaker 15: Look and ipl Really, there's three things. It's a marketing event.

668
00:34:13,719 --> 00:34:15,400
Speaker 15: It's an opportunity to come out and say here's what

669
00:34:15,440 --> 00:34:17,200
Speaker 15: we do, here's what we are. You know, my parents

670
00:34:17,200 --> 00:34:19,000
Speaker 15: may have not heard of Clara before, but now they will.

671
00:34:19,560 --> 00:34:21,480
Speaker 15: You know, Klarana is telling a big AI story that

672
00:34:21,560 --> 00:34:24,080
Speaker 15: I call themselves the AI powered Global Payments Network.

673
00:34:24,440 --> 00:34:26,880
Speaker 8: So that's the first thing. The second is it is liquidity, right.

674
00:34:26,960 --> 00:34:29,920
Speaker 15: Dot's provide liquidity in a deeper way than any private

675
00:34:29,920 --> 00:34:31,040
Speaker 15: funding round can.

676
00:34:31,200 --> 00:34:32,880
Speaker 8: To employees to investors.

677
00:34:33,320 --> 00:34:35,200
Speaker 15: And the third thing that's really important is it sets

678
00:34:35,239 --> 00:34:38,279
Speaker 15: a really clear public equity price for your stock, so

679
00:34:38,280 --> 00:34:40,640
Speaker 15: you can use that to then compensate employees to hire

680
00:34:41,000 --> 00:34:42,719
Speaker 15: and to do m and A to buy companies because

681
00:34:42,719 --> 00:34:44,879
Speaker 15: before that it's always this parlor game of well, what's

682
00:34:44,880 --> 00:34:46,920
Speaker 15: the stock really worth? We don't really know, and now

683
00:34:46,960 --> 00:34:48,759
Speaker 15: you'll know every second of every day how much it's worth.

684
00:34:48,920 --> 00:34:51,080
Speaker 4: What are you thinking about MNA, because I believe that

685
00:34:51,160 --> 00:34:54,480
Speaker 4: you backed sort of a Klana similar so got bought

686
00:34:54,520 --> 00:34:55,440
Speaker 4: by a bigger tech company.

687
00:34:55,440 --> 00:34:56,640
Speaker 3: Aren't we going to see more I'm and A in

688
00:34:56,680 --> 00:34:57,359
Speaker 3: the space.

689
00:34:57,760 --> 00:34:58,440
Speaker 8: I really think so.

690
00:34:58,960 --> 00:35:00,960
Speaker 15: I beck to company called Bread Finances, which is bought

691
00:35:00,960 --> 00:35:02,120
Speaker 15: by aline Stata Systems.

692
00:35:02,360 --> 00:35:03,960
Speaker 8: The whole companies now called Bread.

693
00:35:04,320 --> 00:35:06,360
Speaker 15: It's a very similar company to our firmand Clarna, And

694
00:35:06,480 --> 00:35:08,560
Speaker 15: in fact, you know, in the fintech space and tech.

695
00:35:08,440 --> 00:35:10,520
Speaker 8: Overall, we've seen very little M and A.

696
00:35:10,560 --> 00:35:12,800
Speaker 15: Part of it's been the regime and the regulatory process

697
00:35:12,800 --> 00:35:15,400
Speaker 15: where people are afraid that deals will get blocked. I

698
00:35:15,400 --> 00:35:17,440
Speaker 15: think by all indications, in twenty twenty five, with the

699
00:35:17,480 --> 00:35:20,200
Speaker 15: new Trump era, we'll see a more friendly environment for

700
00:35:20,320 --> 00:35:21,960
Speaker 15: M and A and I think folks are kind of

701
00:35:22,280 --> 00:35:24,439
Speaker 15: leaning into that now. And you saw some rumored stuff.

702
00:35:24,440 --> 00:35:26,239
Speaker 15: There was like a Qualcom deal that was going to happen.

703
00:35:26,280 --> 00:35:29,640
Speaker 15: We've heard about HubSpot, Google, Whiz Google. Those didn't turn

704
00:35:29,680 --> 00:35:32,000
Speaker 15: out to actually happen. But I think in the new

705
00:35:32,040 --> 00:35:34,160
Speaker 15: year you will see M and A pickup as well. Absolutely,

706
00:35:35,239 --> 00:35:35,600
Speaker 15: How do.

707
00:35:35,600 --> 00:35:38,719
Speaker 4: You prep your own portfolio companies then for that new

708
00:35:38,760 --> 00:35:40,480
Speaker 4: era of twenty twenty five, I.

709
00:35:40,440 --> 00:35:42,640
Speaker 15: Think, you know, the thing has always been, you know,

710
00:35:42,800 --> 00:35:45,000
Speaker 15: cash is oxygen and auxygen is life, So you have

711
00:35:45,000 --> 00:35:46,600
Speaker 15: to have enough cash on hand to make it through

712
00:35:46,640 --> 00:35:48,839
Speaker 15: whatever period of time. And these last couple of years

713
00:35:48,880 --> 00:35:50,480
Speaker 15: have been tricking in that regard. So companies have been

714
00:35:50,560 --> 00:35:53,680
Speaker 15: raising you know, debt rounds, bank equity, you know, loans

715
00:35:53,680 --> 00:35:56,880
Speaker 15: from banks, convertible notes, things like that to bridge and

716
00:35:56,920 --> 00:35:59,080
Speaker 15: get through to a period where hopefully there's going to

717
00:35:59,120 --> 00:36:01,400
Speaker 15: be more liquidity and better environment for exits.

718
00:36:02,120 --> 00:36:06,400
Speaker 4: What about you and your thoughts on building up holdings

719
00:36:06,400 --> 00:36:09,600
Speaker 4: in companies via the secondary market or going direct to

720
00:36:09,680 --> 00:36:10,920
Speaker 4: when they're doing fresh sales.

721
00:36:10,960 --> 00:36:14,200
Speaker 3: What's the environment been like? How how pure is it.

722
00:36:14,200 --> 00:36:15,919
Speaker 4: At the moment or is it kind of it's who

723
00:36:15,960 --> 00:36:17,960
Speaker 4: you know in the back door and therefore you.

724
00:36:17,920 --> 00:36:19,719
Speaker 15: Will access It used to be that way, you know,

725
00:36:19,800 --> 00:36:21,719
Speaker 15: ten tho ten years ago, secondaries was always kind of

726
00:36:21,719 --> 00:36:24,680
Speaker 15: whispered and so forth. And there's famously a massive secondary

727
00:36:24,680 --> 00:36:25,759
Speaker 15: market for Facebook soccer.

728
00:36:25,840 --> 00:36:27,040
Speaker 8: You know before it was public.

729
00:36:26,800 --> 00:36:29,200
Speaker 15: For many years, but a lot of companies put limits

730
00:36:29,239 --> 00:36:31,600
Speaker 15: on secondary sales and you can only sell a certain portion,

731
00:36:31,760 --> 00:36:34,520
Speaker 15: or some companies don't allow sales at all. They have

732
00:36:34,600 --> 00:36:38,640
Speaker 15: rights of first refusal to stop sales or purchases stocks themselves.

733
00:36:38,840 --> 00:36:39,760
Speaker 8: But now you have all these.

734
00:36:39,600 --> 00:36:44,680
Speaker 15: Other markets like Forge and Hive, and while Carter was

735
00:36:44,680 --> 00:36:46,040
Speaker 15: trying to do this where you have a kind of

736
00:36:46,160 --> 00:36:48,640
Speaker 15: more liquid quote unquote secondary market where you can see

737
00:36:48,840 --> 00:36:52,920
Speaker 15: the most up to date pricing, but it's still very episodic,

738
00:36:52,920 --> 00:36:54,560
Speaker 15: where you know, some deal happens and then maybe six

739
00:36:54,600 --> 00:36:56,920
Speaker 15: months goes by, so you're not really sure exactly how

740
00:36:57,000 --> 00:36:59,080
Speaker 15: what the pricing is of these shares in any given

741
00:36:59,120 --> 00:36:59,520
Speaker 15: moment in.

742
00:36:59,480 --> 00:37:03,080
Speaker 4: Time, and how difficult is it to understand some of

743
00:37:03,120 --> 00:37:07,399
Speaker 4: the nuances in the deals. The contracts are very individual,

744
00:37:07,880 --> 00:37:11,440
Speaker 4: and some of these very hot companies are able to

745
00:37:11,480 --> 00:37:14,400
Speaker 4: have pretty tough rules on how you speak about.

746
00:37:14,160 --> 00:37:16,600
Speaker 3: Them and how you invest in rivals. What's that looking like?

747
00:37:16,840 --> 00:37:19,000
Speaker 15: Well, you know, the biggest thing is information right, and

748
00:37:19,080 --> 00:37:21,719
Speaker 15: information rights are very limited for investors who come into

749
00:37:21,719 --> 00:37:24,880
Speaker 15: say a secondary in a company like a Klarna or

750
00:37:24,880 --> 00:37:27,319
Speaker 15: whatever before their public you don't get all the rights

751
00:37:27,360 --> 00:37:29,080
Speaker 15: you don't get all the financials, you don't get all

752
00:37:29,080 --> 00:37:31,040
Speaker 15: the documents. You're just told, okay, look this is the

753
00:37:31,120 --> 00:37:32,960
Speaker 15: information you get. There's the price of the stock and

754
00:37:32,960 --> 00:37:34,160
Speaker 15: that's Sydney. You have to kind of live with that.

755
00:37:34,560 --> 00:37:36,560
Speaker 15: Once a company is public, then obviously you get all

756
00:37:36,560 --> 00:37:38,759
Speaker 15: the full information and it's a level playing field for

757
00:37:38,760 --> 00:37:41,879
Speaker 15: everybody and it's a much adding more rich environment.

758
00:37:41,560 --> 00:37:43,000
Speaker 8: For folks people to invest with full info.

759
00:37:43,480 --> 00:37:45,920
Speaker 4: We'll see how that full info comes to beir next

760
00:37:45,960 --> 00:37:47,400
Speaker 4: day at camera And I'm sorry, it's so great to

761
00:37:47,440 --> 00:37:56,000
Speaker 4: have you partner at headline Eon.

762
00:37:56,320 --> 00:37:59,360
Speaker 3: It's a cloud backup startup and in fact it was

763
00:37:59,360 --> 00:38:00,080
Speaker 3: founded in just.

764
00:38:00,120 --> 00:38:02,520
Speaker 4: January of this year by a group of Amazon Web

765
00:38:02,560 --> 00:38:05,480
Speaker 4: Services alumni and it's just closed a new funding round,

766
00:38:05,560 --> 00:38:07,600
Speaker 4: value in the company at one point four billion dollars.

767
00:38:08,040 --> 00:38:10,560
Speaker 4: That's less than a year after founding. So I'm going

768
00:38:10,600 --> 00:38:12,239
Speaker 4: to talk about it with a fair like he's the

769
00:38:12,320 --> 00:38:16,440
Speaker 4: CEO joining us. Now, you've done three funding rounds in

770
00:38:16,520 --> 00:38:19,960
Speaker 4: one year of your first existence. How are we doing

771
00:38:19,960 --> 00:38:22,040
Speaker 4: this and talk to us about what problem you're solving.

772
00:38:23,040 --> 00:38:25,880
Speaker 16: Well, it actually four rounds of funding. A first round

773
00:38:25,920 --> 00:38:28,680
Speaker 16: was led by Secoya, second round a light Speed, then

774
00:38:28,760 --> 00:38:32,840
Speaker 16: Green Oaks and lastly Bond And what we're doing we're

775
00:38:32,840 --> 00:38:38,400
Speaker 16: making cloud backup useful because now they're not. And to

776
00:38:38,520 --> 00:38:41,560
Speaker 16: think why should we care about cloud backups? Mean, my

777
00:38:41,719 --> 00:38:44,520
Speaker 16: grandmother have backup on her iPhone for all of her

778
00:38:44,600 --> 00:38:48,120
Speaker 16: kids over only grab kids, So it's not that easy

779
00:38:48,120 --> 00:38:51,160
Speaker 16: in the cloud. You see on premise everyone have everything.

780
00:38:51,280 --> 00:38:54,359
Speaker 16: And in the cloud companies just moved in the last

781
00:38:54,400 --> 00:38:58,280
Speaker 16: few years. They're spending hundreds of billions of dollars annually

782
00:38:58,520 --> 00:39:02,319
Speaker 16: on the cloud, out of which twenty percent is cloud spent,

783
00:39:02,800 --> 00:39:06,120
Speaker 16: is backup spent. And this is a huge spent and

784
00:39:06,200 --> 00:39:10,960
Speaker 16: today it doesn't work. It's very cumbersome, it's a mess,

785
00:39:11,600 --> 00:39:14,000
Speaker 16: and it's not useful. You can't even use it when

786
00:39:14,000 --> 00:39:16,640
Speaker 16: you need it. So it's a very big problem and

787
00:39:16,680 --> 00:39:18,200
Speaker 16: we're happy to solve that.

788
00:39:18,600 --> 00:39:21,120
Speaker 3: I mean aws Or it is a problem. And they

789
00:39:21,400 --> 00:39:22,000
Speaker 3: bought your.

790
00:39:21,880 --> 00:39:24,280
Speaker 4: Previous company, cloud Endure.

791
00:39:24,400 --> 00:39:26,240
Speaker 3: So how long have you been fixing this problem?

792
00:39:26,280 --> 00:39:28,799
Speaker 4: How are the ways that the technology is changing to

793
00:39:28,920 --> 00:39:30,880
Speaker 4: ensure that it is less cumbersome going forward?

794
00:39:32,160 --> 00:39:35,200
Speaker 16: So we've seen it. We had a front row seat

795
00:39:35,920 --> 00:39:37,799
Speaker 16: when we're in a previous company in cloud on Door

796
00:39:37,880 --> 00:39:41,600
Speaker 16: and then after being acquired by AWS. In AWS, we

797
00:39:42,040 --> 00:39:46,640
Speaker 16: built the disaster recovery service for enterprises, so we had

798
00:39:46,640 --> 00:39:50,359
Speaker 16: a front row seat seeing very large companies either moving

799
00:39:50,400 --> 00:39:54,279
Speaker 16: to the cloud and starting using that for resilience, and

800
00:39:54,360 --> 00:39:58,480
Speaker 16: apparently they encountered many problems related to how you manage

801
00:39:58,480 --> 00:40:01,279
Speaker 16: your data, how you govern that, and then how you

802
00:40:01,560 --> 00:40:05,320
Speaker 16: make sure that it's it's safe and that you can access.

803
00:40:04,920 --> 00:40:05,799
Speaker 8: It when you need it.

804
00:40:06,560 --> 00:40:08,600
Speaker 16: So we've seen it for the last I'm doing it

805
00:40:08,880 --> 00:40:12,200
Speaker 16: for the last eleven years and my partner's doing it

806
00:40:12,200 --> 00:40:16,120
Speaker 16: for even more time than that. And when we left AWS,

807
00:40:16,160 --> 00:40:19,480
Speaker 16: it was very vivid that the time is now because

808
00:40:19,960 --> 00:40:22,520
Speaker 16: when enterperse move to the cloud, they form these new

809
00:40:22,600 --> 00:40:27,759
Speaker 16: organizations cloud cloud infrastructure, cloud operations. These are organizations responsible

810
00:40:27,880 --> 00:40:32,680
Speaker 16: for all cloud resilience across the organization, twenty percent of

811
00:40:32,760 --> 00:40:35,960
Speaker 16: cloud spend, which is tens of billions of dollars annually.

812
00:40:36,719 --> 00:40:41,600
Speaker 16: But simply it doesn't work. The same technology and the

813
00:40:41,640 --> 00:40:45,560
Speaker 16: same architecture which worked on premise, it simply doesn't work

814
00:40:45,560 --> 00:40:47,440
Speaker 16: in the cloud. It's like trying to take a square

815
00:40:47,440 --> 00:40:50,480
Speaker 16: peg and fit it into a round hole. And we

816
00:40:50,640 --> 00:40:54,560
Speaker 16: are here to fix it in two ways. One, we

817
00:40:54,640 --> 00:40:57,160
Speaker 16: want to make sure we are able to manage all

818
00:40:57,200 --> 00:41:01,920
Speaker 16: the data for the entire organization, help classify everything, understand

819
00:41:02,160 --> 00:41:05,560
Speaker 16: what's important to back up, what's not to witch retention policy,

820
00:41:06,120 --> 00:41:09,440
Speaker 16: and then we're making it very easy to actually access

821
00:41:09,440 --> 00:41:12,680
Speaker 16: it when you need it. For example, compliance audits, both

822
00:41:12,760 --> 00:41:14,880
Speaker 16: internal and external compliance audits.

823
00:41:15,440 --> 00:41:16,560
Speaker 8: Let's say that you're.

824
00:41:16,400 --> 00:41:19,239
Speaker 16: An insurance company and you want to access your data

825
00:41:19,239 --> 00:41:22,640
Speaker 16: from three years back. Who knows if you have backup?

826
00:41:22,760 --> 00:41:24,719
Speaker 16: And if you do, how long will it take you

827
00:41:24,920 --> 00:41:27,960
Speaker 16: to get the data today? It could take days or

828
00:41:28,040 --> 00:41:33,120
Speaker 16: even weeks. Companies are missing compliance audits really bad.

829
00:41:33,320 --> 00:41:35,839
Speaker 3: So you're the fix for the It sounds like you've

830
00:41:35,840 --> 00:41:37,160
Speaker 3: built the offering.

831
00:41:37,400 --> 00:41:39,880
Speaker 4: So when you're going through your fourth round of funding,

832
00:41:39,920 --> 00:41:41,040
Speaker 4: why do you need the funds?

833
00:41:41,040 --> 00:41:42,520
Speaker 3: What is it you're going to be spending it on.

834
00:41:43,760 --> 00:41:47,920
Speaker 16: So we found out that as this category category emerges

835
00:41:48,200 --> 00:41:53,160
Speaker 16: and there are very big problems that customers are having,

836
00:41:53,719 --> 00:41:56,080
Speaker 16: we want to make sure that we have everything we

837
00:41:56,120 --> 00:41:59,000
Speaker 16: need in order to support it and solve that quickly,

838
00:41:59,600 --> 00:42:03,160
Speaker 16: and in the enterprise level, because the budget that huge,

839
00:42:03,320 --> 00:42:07,239
Speaker 16: The pain is enormous, and frankly, today what's going on

840
00:42:07,320 --> 00:42:10,399
Speaker 16: is a mess, and we need enough funding to make

841
00:42:10,440 --> 00:42:14,360
Speaker 16: sure that We're building a comprehensive solution fit for the enterprise,

842
00:42:14,920 --> 00:42:18,239
Speaker 16: so that we are well positioned to solve that for

843
00:42:18,280 --> 00:42:20,880
Speaker 16: every company, big or small.

844
00:42:21,440 --> 00:42:22,840
Speaker 3: Engineers marketing sales.

845
00:42:22,840 --> 00:42:25,320
Speaker 4: I'm sure you'll be bringing on a fair few e

846
00:42:25,440 --> 00:42:27,919
Speaker 4: on CEO, A fair Alex. Thank you for your time

847
00:42:28,200 --> 00:42:30,800
Speaker 4: over in Israel today. Meanwhile, that does it the sedition

848
00:42:30,840 --> 00:42:31,880
Speaker 4: of Bloomberg Technology.

849
00:42:32,280 --> 00:42:33,760
Speaker 3: Don't forget to check out the podcast.

850
00:42:34,080 --> 00:42:36,400
Speaker 4: You'll find it on the terminal as well as online

851
00:42:36,440 --> 00:42:37,440
Speaker 4: on Apple and Spotify.

852
00:42:37,520 --> 00:42:39,160
Speaker 3: On iHeart from New

853
00:42:39,200 --> 00:42:48,320
Speaker 4: York, this is Bloomberg Technology.