WEBVTT - OpenAI Raises $6.6 Billion in Funds at $157 Billion Value 0:00:02.960 --> 0:00:08.200 Bloomberg Audio Studios, Podcasts, radio news. 0:00:08.560 --> 0:00:12.920 This is Bloomberg Business Wait inside from the reporters and 0:00:13.080 --> 0:00:16.680 editors who bring you America's most trusted business magazine, plus 0:00:16.720 --> 0:00:20.880 global business, finance and tech news. The Bloomberg Business Week 0:00:20.920 --> 0:00:25.840 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:27.040 --> 0:00:29.720 Okay, we've been all over this as the process has 0:00:29.760 --> 0:00:32.720 progressed over the past month or so. Now we know 0:00:32.800 --> 0:00:35.480 Carol open Ai completed a deal to raise six point 0:00:35.560 --> 0:00:38.000 six billion dollars in new funding. It gives the company 0:00:38.240 --> 0:00:41.640 a vale evaluation of one hundred and fifty seven billion dollars, 0:00:42.360 --> 0:00:44.120 and the idea is that the funding will help bolster 0:00:44.200 --> 0:00:47.599 their efforts to be the world's leading jen Ai company, 0:00:47.960 --> 0:00:49.839 bringing the leading technology with it. 0:00:49.920 --> 0:00:52.400 General Motors has a market kappa fifty billion. I know 0:00:52.440 --> 0:00:53.960 it's that appens to Apple's. But I like to just 0:00:54.240 --> 0:00:57.680 perspect out there the public once private, that's true. I 0:00:57.760 --> 0:00:59.480 know it's just kind of wild, all right, So is 0:00:59.520 --> 0:01:01.360 it a short? Is the sun at the top? We 0:01:01.440 --> 0:01:04.000 continue to have so many questions, So back with us. 0:01:04.000 --> 0:01:06.600 As Bloomberg News AI reporter Rachel Mets, She's out there 0:01:06.600 --> 0:01:10.039 in our san Francisco Bureau. Rachel. First of all, let's 0:01:10.080 --> 0:01:13.440 walk everybody through this global funding raise. Who how much? 0:01:13.560 --> 0:01:16.920 How impressive is this funding round in open ai? It 0:01:16.959 --> 0:01:18.360 sounds rather impressive. 0:01:19.319 --> 0:01:21.680 It is rather impressive. I mean, this is a ton 0:01:21.840 --> 0:01:24.520 of money, and there are a bunch of people in 0:01:24.600 --> 0:01:29.560 firms involved, including Thrive Capital. You have Nvidio, which also 0:01:29.840 --> 0:01:32.000 makes the chips that are very very important to this 0:01:32.120 --> 0:01:35.399 kind of work. I believe Coastal a Ventures as part 0:01:35.400 --> 0:01:39.000 of it, as well a whole bunch of other players besides, 0:01:39.480 --> 0:01:43.240 And I think what's so interesting is that, well like 0:01:43.319 --> 0:01:45.919 the size of it, of the amount of money they're getting, 0:01:46.200 --> 0:01:49.800 the size of their valuation, but also what they're doing 0:01:49.840 --> 0:01:51.520 with this money. They have to raise this kind of 0:01:51.520 --> 0:01:53.360 money if they want to keep making the kind of 0:01:53.520 --> 0:01:56.720 AI software that they're making, because it costs gobs of 0:01:56.760 --> 0:01:58.480 money just to make this stuff. 0:01:59.120 --> 0:02:00.960 Where do where are the costs? I mean, this is 0:02:00.960 --> 0:02:03.280 all in video chips that they're spending the money on. 0:02:03.480 --> 0:02:05.640 Is it that the engineers you can do this stuff 0:02:05.680 --> 0:02:08.560 are paid upwards of a million dollars a year? Rachel? 0:02:08.880 --> 0:02:10.200 Is it the server costs? 0:02:10.560 --> 0:02:11.079 Yes? Yes? 0:02:11.080 --> 0:02:12.080 And yes? What am I missing? 0:02:12.280 --> 0:02:12.359 Is it? 0:02:12.400 --> 0:02:14.160 Why Jensen Wong is saying, what is it everything is 0:02:14.160 --> 0:02:16.120 awesome or what was the wordy? I forget what he 0:02:16.200 --> 0:02:17.559 said anyway, anyway. 0:02:17.440 --> 0:02:18.440 Said demand is insane. 0:02:18.560 --> 0:02:19.080 Insane. 0:02:19.200 --> 0:02:22.600 That's it, man, is insane. Okay, No, I mean okay, So, like, 0:02:22.680 --> 0:02:24.680 think about it this way. If you want to train 0:02:24.800 --> 0:02:27.720 a state of the art AI model, like like a 0:02:27.800 --> 0:02:30.600 large language model right now, you're going to spend easily 0:02:31.280 --> 0:02:34.120 hundreds of millions of dollars to do that. Right, So 0:02:34.520 --> 0:02:36.440 let's assume you want to do that a couple times. 0:02:37.600 --> 0:02:40.040 Let's assume you know you're happy with two of the 0:02:40.120 --> 0:02:41.920 out of the three. Let's say you've done three. I 0:02:41.960 --> 0:02:44.560 mean that is, you know, that's easily more than a 0:02:44.600 --> 0:02:47.480 billion dollars right there, right, And then, as you mentioned, 0:02:47.520 --> 0:02:49.480 you've got all these other costs, I mean staff, I'm 0:02:49.520 --> 0:02:51.519 not even sure. I would love to see a breakdown 0:02:51.919 --> 0:02:53.600 if we can do that at some point of like 0:02:53.760 --> 0:02:55.919 staff costs might not even be you know, that's not 0:02:55.960 --> 0:02:57.720 even going to rate, right, even if you're paying somebody 0:02:57.720 --> 0:02:59.920 a million bucks. That's just like pocket change. 0:03:00.080 --> 0:03:02.200 Well, this is what you know, we have this question 0:03:02.400 --> 0:03:05.080 not my pocket change. To be fair, tim and on 0:03:05.120 --> 0:03:07.480 our list of questions It's like, we're thinking transparency of 0:03:07.520 --> 0:03:09.359 this business. And I understand it's not public yet so 0:03:09.400 --> 0:03:12.600 it doesn't have to report things, But how many specifics 0:03:13.200 --> 0:03:16.600 this is your world, like your expertise. I am curious 0:03:16.880 --> 0:03:19.560 how many specifics are you able to get access to 0:03:20.120 --> 0:03:22.520 or an understanding of when it comes to the business 0:03:22.520 --> 0:03:26.120 of open AI in terms of users chat GPT, Like, 0:03:26.200 --> 0:03:29.320 what do we know really that might justify one hundred 0:03:29.320 --> 0:03:30.919 and fifty seven billion dollar valuation. 0:03:32.400 --> 0:03:34.880 Well, we do know that they are bringing in revenue. 0:03:36.040 --> 0:03:39.640 This has come from some reports. This has also come 0:03:39.720 --> 0:03:45.280 from information that we have learned. They also have put 0:03:45.320 --> 0:03:47.000 out some stats. Every once in a while, they'll put 0:03:47.040 --> 0:03:49.480 out a number or an updated you know, an updated number. 0:03:49.480 --> 0:03:51.360 We know that as of now, there are I think 0:03:51.400 --> 0:03:54.800 it was two hundred and fifteen million weekly chat cheept 0:03:54.960 --> 0:03:58.000 users if I remember the stat correctly. When they said 0:03:58.000 --> 0:04:00.360 that they're funning round clothes the other day, they also 0:04:00.440 --> 0:04:03.120 mentioned that, so we know that. We also know from 0:04:03.280 --> 0:04:05.880 a recent report we had that a million. They hit 0:04:06.120 --> 0:04:09.200 the mark of a million paying business customers for chat 0:04:09.280 --> 0:04:11.640 DBT recently, and that would be across I think it's 0:04:11.680 --> 0:04:15.000 three different businesses there, sorry, three different products they have. 0:04:15.080 --> 0:04:17.520 One is like an educational one, and then two are 0:04:17.800 --> 0:04:21.000 different business products that they saw. So they are bringing 0:04:21.120 --> 0:04:25.039 in money. It's just you know, you've got to bring 0:04:25.040 --> 0:04:26.640 in lots and lots and lots of money if you 0:04:26.640 --> 0:04:28.719 want to grow this kind of business. So the valuation 0:04:29.000 --> 0:04:31.279 and the amount of money that they raised, it all, 0:04:31.480 --> 0:04:34.640 I feel think it all makes sense in a sense. 0:04:35.279 --> 0:04:38.240 But it is not lost on me that these are 0:04:38.240 --> 0:04:39.240 all very large numbers. 0:04:39.480 --> 0:04:41.720 If you could sit down with the management team and 0:04:41.760 --> 0:04:43.839 they said, all right, Rachel, we know you want to 0:04:43.880 --> 0:04:46.280 know more, but we can only give you one statistic 0:04:46.360 --> 0:04:48.320 to tell you like kind of how we're doing. What 0:04:48.440 --> 0:04:50.800 might it be? What would you ask or what would 0:04:50.800 --> 0:04:51.320 you want to know? 0:04:53.120 --> 0:04:56.240 Oh my gosh, sorry that is you're putting on. 0:04:57.440 --> 0:04:58.400 I know, but you're so smart. 0:04:59.760 --> 0:05:01.880 No, I mean, but the things that I'm interested in 0:05:02.120 --> 0:05:06.960 probably probably might not interest other people. But I mean, 0:05:07.000 --> 0:05:09.920 I guess I would be curious to know just how 0:05:10.360 --> 0:05:15.720 has usage of chat GPT changed over time or what 0:05:15.760 --> 0:05:18.600 the churn is, you know, like how as of now, 0:05:18.720 --> 0:05:21.400 like people that have been paying to use the service, 0:05:21.440 --> 0:05:23.479 how many are sticking with it, how long are they 0:05:23.520 --> 0:05:26.440 sticking with it? That kind of thing. Because I don't 0:05:26.480 --> 0:05:29.240 have the best sense of how people are using it 0:05:29.279 --> 0:05:31.719 over time and if they find it useful over time. 0:05:32.240 --> 0:05:32.400 Right. 0:05:32.440 --> 0:05:34.160 You do wonder if somebody uses it and they're like, ey, 0:05:34.279 --> 0:05:36.040 this isn't for me and they stop using it, Right, 0:05:36.040 --> 0:05:38.200 That's where churn could be exactly so telling. 0:05:38.320 --> 0:05:41.440 It's also not the only game in town. There's Anthropic 0:05:41.520 --> 0:05:44.480 out there. I mentioned perplexity. These are not necessarily apples 0:05:44.520 --> 0:05:46.880 apples comparisons. But who would you say is the biggest 0:05:46.880 --> 0:05:49.000 competitor to open ai? 0:05:49.320 --> 0:05:49.599 Oh? 0:05:49.720 --> 0:05:52.080 In my mind, I often think of Anthropic. Some of 0:05:52.080 --> 0:05:54.400 that is probably because it was started by people who 0:05:54.480 --> 0:05:56.680 left open ai and has since been joined by a 0:05:56.680 --> 0:06:00.920 bunch of other people from open Ai, but has always 0:06:00.960 --> 0:06:04.040 been focused on I mean, they've been very public about 0:06:04.040 --> 0:06:06.880 their focus on safety, and they are much more geared 0:06:06.880 --> 0:06:09.120 toward businesses from the get go, Like they are not 0:06:09.680 --> 0:06:11.800 concerned with doing some of the bells and whistles that 0:06:11.920 --> 0:06:15.120 you would see on mark consumer facing products, like for instance, 0:06:15.160 --> 0:06:17.400 they don't have an image generator, and they have said 0:06:17.400 --> 0:06:20.279 this is because their clients don't really want that or 0:06:20.279 --> 0:06:22.360 don't really need that, you know they do, so they 0:06:22.440 --> 0:06:25.719 are very like methodical about how they're rolling out features, 0:06:25.720 --> 0:06:29.479 and they seem to focus very firmly on what business 0:06:29.520 --> 0:06:32.680 users want, not thinking too much about consumers for the 0:06:32.760 --> 0:06:33.240 most part. 0:06:33.520 --> 0:06:36.040 Hey, Rachel, you went through the funding round led by 0:06:36.080 --> 0:06:40.120 Thrive Capital, which is a venture capital headed by Josh Kushner, 0:06:40.640 --> 0:06:44.480 brother of Jared. They put in one point three billion. Microsoft, 0:06:44.480 --> 0:06:47.080 which is open AI's largest back are put in another 0:06:47.080 --> 0:06:50.480 seven hundred and fifteen right on top of thirteen billion. 0:06:51.520 --> 0:06:54.640 The role of Microsoft, how much, say, do they have 0:06:55.240 --> 0:06:57.080 at this company? I think we've talked about this before, 0:06:57.120 --> 0:06:58.720 but it continues to be like kind of top of 0:06:58.720 --> 0:06:59.240 mind for me. 0:07:00.600 --> 0:07:04.400 Yeah, I mean, I think right now, that's definitely that's 0:07:04.440 --> 0:07:09.120 definitely a question mark. The company was going to have 0:07:09.160 --> 0:07:14.000 a board observer seat, and that was that person is 0:07:14.040 --> 0:07:16.920 not actually doing that role now. It was something that 0:07:16.960 --> 0:07:19.000 we had learned was happening, and now it sounds like 0:07:19.040 --> 0:07:22.360 it's not happening. So I think it's a little bit 0:07:22.440 --> 0:07:25.720 unclear since it is still not a publicly traded company, 0:07:25.840 --> 0:07:27.360 what role the company has. 0:07:27.960 --> 0:07:29.880 I also think do you think or do you think 0:07:29.960 --> 0:07:32.720 it's interesting for the companies that maybe didn't invest, like 0:07:33.360 --> 0:07:36.520 a little known company called Apple, Like, does that surprise 0:07:36.560 --> 0:07:37.440 you at all or no. 0:07:39.080 --> 0:07:42.360 I mean, nothing surprises me at this point because everything 0:07:42.400 --> 0:07:47.400 is weird. But it wouldn't shock me if Apple has 0:07:48.160 --> 0:07:51.600 other plans. You know, potentially they are already enmeshed with 0:07:51.680 --> 0:07:54.320 open Ai. They have this deal related to chat GPT, 0:07:54.920 --> 0:07:57.240 so who knows. I would definitely keep an eye on 0:07:57.280 --> 0:08:00.440 them and see are they planning to invest employment in 0:08:00.480 --> 0:08:04.600 the future, all on Microsoft or in some other way. 0:08:05.040 --> 0:08:07.200 Right now, I think it's still very TBD. I wouldn't 0:08:07.200 --> 0:08:09.400 say that they're not planning to invest, because we just 0:08:09.440 --> 0:08:09.800 don't know. 0:08:10.040 --> 0:08:13.640 Yeah, would you say, Rachel that Microsoft, even though they're 0:08:13.640 --> 0:08:15.400 an investor of the tune of more than ten billion 0:08:15.480 --> 0:08:18.440 dollars in open ai, they also compete with open ai? 0:08:18.560 --> 0:08:19.360 Is that fair to say? 0:08:20.280 --> 0:08:21.280 Sorry, say that one more time? 0:08:21.600 --> 0:08:23.600 Was it fair to say that Microsoft also competes with 0:08:23.640 --> 0:08:26.160 open ai even though they're an investor in open Ai? 0:08:28.280 --> 0:08:31.040 Right, And it's been like that the whole time, Like 0:08:31.080 --> 0:08:34.160 since they invested. I feel like it stood out a 0:08:34.160 --> 0:08:36.720 little bit more to me, like a year or so ago, 0:08:36.800 --> 0:08:39.960 and now it feels like maybe they're a little more complimentary. 0:08:40.000 --> 0:08:42.880 But honestly, that's more that's more vibeespased in my mind, 0:08:43.800 --> 0:08:45.600 but they definitely are a competitor. 0:08:45.640 --> 0:08:47.719 Are they a competitor in the set? Like are their 0:08:47.800 --> 0:08:52.719 own internal external tools? Are they powered by open ai 0:08:52.840 --> 0:08:55.640 the same way that Apple's tools are powered by or 0:08:55.679 --> 0:08:58.680 will be powered by open Ai? Are Microsoft's tools powered 0:08:58.679 --> 0:09:01.080 by open Ai? Are they? Are they separate? Distinct? 0:09:02.960 --> 0:09:04.959 I think it depends. I think it really depends on 0:09:05.000 --> 0:09:07.280 the products. So you kind of have to have to 0:09:07.320 --> 0:09:09.120 look at at the different ones sort of break it down. 0:09:10.559 --> 0:09:12.800 Hey, one other thing that we need to get into, 0:09:12.880 --> 0:09:14.800 and this is that an idea of I don't know, 0:09:14.880 --> 0:09:17.480 open ai maybe growing up a little bit and trying 0:09:17.480 --> 0:09:20.120 to figure out what its corporate structure or structure is 0:09:20.200 --> 0:09:22.880 going forward. And they've talked about right moving from a 0:09:22.920 --> 0:09:27.120 nonprofit to a for profit model, I know in your 0:09:27.160 --> 0:09:29.839 story and the team story talk about some of the 0:09:29.920 --> 0:09:33.080 legal hurdles to doing that. Should we assume do you 0:09:33.160 --> 0:09:36.040 assume as you watch kind of the evolution of open 0:09:36.040 --> 0:09:38.719 ai in the last almost two years now or so, 0:09:39.679 --> 0:09:41.480 say that that's going to be it's going to be 0:09:41.520 --> 0:09:43.880 a profit a for profit company, that's where it's going. 0:09:45.280 --> 0:09:46.680 I mean, one thing that we know is that the 0:09:46.720 --> 0:09:49.080 company is not afraid to change the structure, right, They 0:09:49.120 --> 0:09:51.160 already did that once. I believe it was in twenty 0:09:51.280 --> 0:09:56.240 nineteen when they created this really complicated structure that they 0:09:56.240 --> 0:10:00.079 have to this day that has an end to you 0:10:00.200 --> 0:10:04.720 within it that can bring in a profit. So I 0:10:04.760 --> 0:10:08.040 think based on that, we know that they may be 0:10:08.080 --> 0:10:09.559 willing to do that in the future. I think there's 0:10:09.559 --> 0:10:13.880 still a lot of questions about, like, could converting from 0:10:13.920 --> 0:10:16.800 what they are now to a public benefit corp, which 0:10:16.840 --> 0:10:19.960 is what we were hearing from our sources that they 0:10:20.000 --> 0:10:23.120 would want to convert to. Might that lead to a 0:10:23.160 --> 0:10:27.160 giant tax liability that that's a big unanswered question to me, 0:10:27.679 --> 0:10:30.800 because it's potentially possible that something like that, if it 0:10:30.840 --> 0:10:33.880 was many, many, many billions of dollars, could make it 0:10:33.960 --> 0:10:37.040 untenable to do that. So it's gonna it's a little 0:10:37.040 --> 0:10:38.520 it's a little TVD right now. We're going to have 0:10:38.559 --> 0:10:40.439 to do some more reporting and stay tuned. 0:10:40.600 --> 0:10:43.679 I think also TVD is is what an exit looks 0:10:43.720 --> 0:10:48.120 like for the investors of this company. Is anyone talking 0:10:48.120 --> 0:10:50.400 about an IPO yet at this point? Is it too 0:10:50.400 --> 0:10:52.240 early to be talking about that because that seems like 0:10:52.280 --> 0:10:53.200 the only exit here. 0:10:54.400 --> 0:10:57.040 It makes like it makes sense, right and We've seen 0:10:57.200 --> 0:11:00.520 other companies take a similar path, where like they get 0:11:00.520 --> 0:11:02.720 to this point and then the next step is that. 0:11:03.960 --> 0:11:07.439 To my knowledge, I haven't heard of anybody talking about it. However, 0:11:08.840 --> 0:11:12.240 definitely seeing investors increasingly talking about it. I mean, you know, 0:11:12.240 --> 0:11:14.600 they're not investing in this company for fun, right, they 0:11:14.679 --> 0:11:17.079 want to return at some point. So I think I'm 0:11:17.080 --> 0:11:17.600 pretty sure. 0:11:17.679 --> 0:11:20.080 That's pretty sure. Hey, listen, you have a great deep 0:11:20.200 --> 0:11:24.040 dive that hit the Bloomberg terminal just about two hours ago, 0:11:24.320 --> 0:11:26.439 and it's entitled or at least the headline on the 0:11:26.480 --> 0:11:29.760 story open ayes Sam Altman concentrates power on his path 0:11:29.800 --> 0:11:32.640 to one hundred and fifty seven billion dollar valuation. Safe 0:11:32.679 --> 0:11:35.440 to say he is in the driver's seat, Sam Altman, 0:11:35.520 --> 0:11:38.480 despite being kicked out at one point, just you know 0:11:38.520 --> 0:11:40.440 what in the past year? Was it earlier this year? 0:11:40.559 --> 0:11:43.560 It was like crazy, He's in the driver's seat and 0:11:43.600 --> 0:11:45.360 just got about twenty five thirty seconds here. 0:11:46.800 --> 0:11:49.400 Yes, I think that that is absolutely what's happening there. 0:11:49.480 --> 0:11:52.200 It was really instructive to spend the last few weeks 0:11:52.360 --> 0:11:55.000 looking back at our previous reporting, look it back at, 0:11:55.000 --> 0:11:58.439 looking back at the company's history, and also doing some 0:11:58.520 --> 0:12:01.120 fresh reporting and just kind of taking a broader look 0:12:01.120 --> 0:12:03.400 because usually I'm stuck in the weeds with these stories 0:12:03.760 --> 0:12:06.600 on you know, what's been happening and how did we 0:12:06.640 --> 0:12:08.839 get to this point, Where did we start? Where were 0:12:08.840 --> 0:12:11.439 we in the middle, And though in particular since he 0:12:11.679 --> 0:12:14.200 was brought back last year, a lot has changed and 0:12:14.200 --> 0:12:15.480 he is much more powerful now than most. 0:12:15.880 --> 0:12:17.320 It's a great story, and as you say, the open 0:12:17.360 --> 0:12:19.800 AI of today bears a little resemblance to its earlier self, 0:12:19.840 --> 0:12:21.960 so I highly recommend it. We'll put it out on Twitter. 0:12:22.960 --> 0:12:24.920 You get interrupted because of folks like us, but we 0:12:25.000 --> 0:12:27.800 so appreciate it, of course. Rachel Mists, our AI reporter 0:12:27.880 --> 0:12:28.560 Here at Bloomberg. 0:12:30.200 --> 0:12:33.720 You're listening to the Bloomberg Business Week podcast. Catch us 0:12:33.760 --> 0:12:37.000 live weekday afternoons from two to five pm Eastern Listen 0:12:37.040 --> 0:12:39.199 on Apple car Play and then Bright Auto with a 0:12:39.240 --> 0:12:42.200 Bloomberg Business app, or watch us live on YouTube. 0:12:43.600 --> 0:12:45.160 Well, we talked earlier about this morning to you have 0:12:45.200 --> 0:12:49.080 sweetly jobless claims being consistent with low layoffs. Mike McKee 0:12:49.200 --> 0:12:50.880 joined us too to talk about some of the other 0:12:50.960 --> 0:12:53.680 data points that maybe questioned a little bit about some 0:12:53.720 --> 0:12:56.000 of the strength that we are seeing in the job market. 0:12:56.160 --> 0:12:59.640 We do get another read tomorrow morning on the monthly 0:13:00.360 --> 0:13:02.920 job picture and on the labor front. We also heard 0:13:03.000 --> 0:13:06.000 from a big player when it comes to being an 0:13:06.040 --> 0:13:08.080 employer of a lot of workers. We're talking about Amazon 0:13:08.120 --> 0:13:11.560 dot Com today earlier as it kind of does around 0:13:11.559 --> 0:13:14.320 this time of year, earlier, talking about what it will 0:13:14.360 --> 0:13:17.120 need for the all important and busy holiday shopping season. 0:13:17.520 --> 0:13:19.920 Yeah, Amazon's going to bring about two hundred and fifty 0:13:19.920 --> 0:13:23.360 thousand seasonal, part time in full time employees on for 0:13:23.400 --> 0:13:26.520 the US holiday shopping rush. It's unchanged from last year. 0:13:26.559 --> 0:13:29.040 It's an indication that the company expects steady demand in 0:13:29.080 --> 0:13:32.160 its biggest market. Carol, I will say as of June 0:13:32.200 --> 0:13:35.160 thirtieth of this year, they had one point five three 0:13:35.240 --> 0:13:37.040 two million employees. 0:13:36.600 --> 0:13:38.360 As well have roles the employee a lot. All right, 0:13:38.400 --> 0:13:40.800 let's head to Atlanta and to Sandy Gordon. She's Amazon's 0:13:40.880 --> 0:13:44.640 vice president of Global Operations, Employee Experience and Relations. Sandy, 0:13:44.679 --> 0:13:48.680 great to have you here on Bloomberg Radio and Television. 0:13:49.679 --> 0:13:52.280 Tell us a little bit about how you guys determined 0:13:52.320 --> 0:13:55.080 demand for the year, how you make these projections, and 0:13:55.120 --> 0:13:57.840 maybe what your needs this year. Tell you a little 0:13:57.840 --> 0:14:00.760 bit about the market any economic environment. 0:14:01.800 --> 0:14:04.199 Yeah, Carolyn, Tim, it's nice to be with you all today, 0:14:04.200 --> 0:14:07.280 and thank you for taking the time. You know, this time, 0:14:07.480 --> 0:14:09.120 this is the time of the year when we began 0:14:09.200 --> 0:14:11.760 preparing for what we do expect to be a busy 0:14:11.880 --> 0:14:15.800 holiday season. And as you stated, that preparation includes US 0:14:15.880 --> 0:14:18.400 hiring for two hundred and fifty thousand full time and 0:14:18.480 --> 0:14:22.920 part time seasonal roles across our customer fulfillment and transportation 0:14:23.120 --> 0:14:27.680 network in the US, and this is a diverse range 0:14:27.680 --> 0:14:30.840 of roles for applicants of all backgrounds and experience levels. 0:14:31.720 --> 0:14:34.600 We obviously take a look at what we project as 0:14:34.600 --> 0:14:38.840 our customer demand. We watch how we're performing in the 0:14:38.920 --> 0:14:41.000 year leading into the holiday and that helps us to 0:14:41.080 --> 0:14:45.320 identify the volume of employees that we'll need, the number 0:14:45.320 --> 0:14:49.280 of employees that we'll need to meet our customers' expectations. 0:14:49.320 --> 0:14:53.680 And so we are really excited and ready to welcome 0:14:53.720 --> 0:14:57.480 back so many of our repeat seasonal customers, I mean employees, 0:14:58.160 --> 0:15:00.160 and we're happy to welcome new. 0:15:00.560 --> 0:15:02.480 And customers and customers. That's fair. 0:15:03.280 --> 0:15:06.760 Oh, hey, absolutely will say that, of. 0:15:06.720 --> 0:15:09.600 Which we all we all can certainly say yep, Amazon 0:15:09.640 --> 0:15:12.240 customer and certainly use it. Hey, Sandy though, what is 0:15:12.280 --> 0:15:14.440 what you're seeing in your expectations for what you need 0:15:14.480 --> 0:15:17.800 for the holiday season? Tell you about how the economy 0:15:17.840 --> 0:15:19.640 is doing. As you know, we're Bloomberg. We talk a 0:15:19.640 --> 0:15:23.920 lot about soft landing hard landing. What the outlook is. 0:15:23.960 --> 0:15:27.400 Do we miss a recession? How would you describe it? 0:15:27.440 --> 0:15:29.320 Based on your hiring needs and what you guys are 0:15:29.320 --> 0:15:31.800 expecting for the business come the holiday season. 0:15:32.760 --> 0:15:36.120 I think we're projecting, you know, what we're expecting, projecting 0:15:36.760 --> 0:15:41.800 expected holiday growth in our customer demand, and I don't 0:15:41.840 --> 0:15:45.280 think we expect there to be anything less than that. 0:15:45.640 --> 0:15:48.360 I heard you at the opening say we're hiring similar 0:15:48.360 --> 0:15:50.440 to what we hired last year, and that is true, 0:15:51.120 --> 0:15:53.600 but that is what we The additional two hundred and 0:15:53.640 --> 0:15:57.640 fifty thousand compliments are already existing more than one million 0:15:57.680 --> 0:16:01.120 Amazon employees. And each year we get smarter in the 0:16:01.160 --> 0:16:03.720 way that we do business and projecting what our customers 0:16:04.160 --> 0:16:06.600 will want to purchase and making sure that those items 0:16:06.600 --> 0:16:09.440 are close to them so that we're able to meet 0:16:09.480 --> 0:16:12.280 the the commitment to get it there quickly. And so 0:16:12.720 --> 0:16:16.600 I think just through our typical behaviors of continuing to 0:16:16.640 --> 0:16:19.880 improve the way we operate, we're able to do more 0:16:20.080 --> 0:16:23.240 with our two hundred and fifty thousand additional seasonal employees. 0:16:23.560 --> 0:16:25.120 It's not too early to be talking about this. I 0:16:25.160 --> 0:16:26.720 kind of said that yesterday and we spoke to Ali 0:16:26.760 --> 0:16:29.920 Furman over at PwC. She's Consumer Markets industry leader, and 0:16:29.920 --> 0:16:32.200 she shared with us with us some data about how 0:16:32.200 --> 0:16:34.520 consumers are projected to spend a record high of one 0:16:34.560 --> 0:16:36.920 thousand and six and thirty eight dollars per shopper this 0:16:36.960 --> 0:16:40.760 holiday season. It's up seven percent over last year, but 0:16:40.800 --> 0:16:43.400 it's lower than the fifteen percent increase that we saw 0:16:43.760 --> 0:16:47.600 the prior year. In terms of hiring your seasonal employees, 0:16:47.600 --> 0:16:50.680 that you're hiring this year is unchanged compared to last year. 0:16:50.720 --> 0:16:52.840 What can you tell us about what that reflects when 0:16:52.880 --> 0:16:53.600 it comes to demand. 0:16:54.920 --> 0:16:57.760 I think it not much. For it as it reflects 0:16:57.760 --> 0:17:00.520 to demand is more so the fact that we are 0:17:00.880 --> 0:17:05.639 continuing to find ways to deliver smartly for our customers, 0:17:05.720 --> 0:17:09.120 and in doing so, you know, we have been spending 0:17:09.440 --> 0:17:12.200 a lot of time making sure that we can anticipate 0:17:12.200 --> 0:17:16.440 our customers needs and ensure that the inventory is correctly 0:17:16.480 --> 0:17:18.359 placed so that it can get to them quickly. And 0:17:18.400 --> 0:17:21.200 we'll be able to do that with our employees, the 0:17:21.200 --> 0:17:23.199 two hundred and fifty thousand that we're adding to our 0:17:23.240 --> 0:17:25.040 already more than one million compliments. 0:17:25.040 --> 0:17:27.639 So, Sandy, in other words, it's gotten more efficient just 0:17:27.720 --> 0:17:30.120 in the last year, you've been able to find efficiencies. 0:17:30.160 --> 0:17:33.120 Can you tell us what those efficiencies are or how 0:17:33.200 --> 0:17:35.919 much more efficient you've been able to become just in 0:17:36.040 --> 0:17:36.720 a short time. 0:17:37.720 --> 0:17:40.879 Yeah, I think what we could say is, you know, 0:17:40.920 --> 0:17:44.520 we're always a culture that is figuring out how we 0:17:44.560 --> 0:17:48.480 can do more and continuously improving. And our ability to 0:17:48.560 --> 0:17:52.240 deliver fast and even faster is rooted in structural changes 0:17:52.280 --> 0:17:54.520 like placing us I satic thoor, like placing items as 0:17:54.560 --> 0:17:57.919 close to customers as possible, moving from a national to 0:17:58.080 --> 0:18:01.320 a regional network and thus reducing the touch points and 0:18:01.359 --> 0:18:05.840 transportation distances for deliveries, and so with that we are 0:18:05.920 --> 0:18:11.720 able to deliver faster and meet our customers' expectations with 0:18:11.920 --> 0:18:14.600 the projected headcount that we're identifying. 0:18:14.840 --> 0:18:16.400 Hey, one of the other things that we were thinking 0:18:16.440 --> 0:18:18.800 about when we looked at the number, standy, We're curious 0:18:18.800 --> 0:18:22.239 if the base of full time logistics workers, did that 0:18:22.359 --> 0:18:24.639 base increase year over year in a way that makes 0:18:24.680 --> 0:18:26.840 the number that you guys are needing to hire for 0:18:26.880 --> 0:18:30.280 holidays being steady misleading. In other words, your full time 0:18:30.320 --> 0:18:33.240 logistics workers have been increasing ahead of this, and so 0:18:33.680 --> 0:18:35.600 maybe that explains why the numbers consistent. 0:18:38.000 --> 0:18:43.280 Our full time and our part time employee numbers, they 0:18:43.280 --> 0:18:47.600 can fluctuate throughout the year, but the seasonal The value 0:18:47.680 --> 0:18:51.320 of bringing our seasonal employees on is that they allow 0:18:51.440 --> 0:18:53.920 us to ensure we're able to deliver for our customers 0:18:53.960 --> 0:18:56.439 while aiding our permanent employees in being able to maintain 0:18:56.480 --> 0:18:59.399 their flexibility with their schedules so they're able to spend 0:18:59.400 --> 0:19:03.400 time with their families around the holidays. And so it's 0:19:03.520 --> 0:19:07.960 why we this This program has been so popular for us, 0:19:08.119 --> 0:19:10.399 not only with our permanent employees, but also with our 0:19:10.440 --> 0:19:13.000 seasonal employees. It's why we see so many people returning 0:19:13.480 --> 0:19:16.159 because there is flexibility in it and it is an 0:19:16.440 --> 0:19:19.200 opportunity to earn a good weight with a work schedule 0:19:19.240 --> 0:19:22.280 that aligns with whatever's going on in their personal life. 0:19:22.640 --> 0:19:24.399 Hey, one of the other things, listen, We've got to 0:19:24.400 --> 0:19:26.360 ask you, Sandy. In a week where you know we've 0:19:26.400 --> 0:19:30.679 got East Coast and Gulf Coast ports workers on strike, 0:19:31.359 --> 0:19:33.280