Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is live
Speaker 1: from the heart of Silicon Valley with Ed Ludlow in
Speaker 1: Van Francisco.
Speaker 2: This is Bloomberg Tech. I'm Tim Steneveek in for Ed Ludlow.
Speaker 2: Coming up on the program. Open AI is on track
Speaker 2: to generate annualized revenue more than forty billion dollars. That's
Speaker 2: roughly doubling its run rate from the end of twenty
Speaker 2: twenty five. Plus, a new city bill backed by Mayor
Speaker 2: Ziorron Mamdani, calls for Amazon to directly employ their delivery workers.
Speaker 2: What will Amazon do if the bill passes? We discuss
Speaker 2: and Meta's former chief AI scientist is joining a new
Speaker 2: venture firm to invest in AI startups. We'll be joined
Speaker 2: by the firm's leader, Sean Johnson. Well, let's start with
Speaker 2: today's big number, and that is forty billion dollars. Open
Speaker 2: a eyes on track to January analyzed revenue that tops
Speaker 2: that number. That's, according to sources, that would roughly double
Speaker 2: its run rate from the end of twenty twenty five.
Speaker 2: I want to bring in Bloomberg's AI reporter Rachel Matt
Speaker 2: who broke this story. Rachel, what specific products are driving
Speaker 2: this annualized revenue run rate that is such a jump
Speaker 2: from last year.
Speaker 3: So according to what we've we've been told in our
Speaker 3: reporting is actually kind of a range of things. The
Speaker 3: company's consumer business is still by far its largest business,
Speaker 3: and they recently announced that they had passed this one
Speaker 3: billion active weekly user mark, which they've been pushing toward
Speaker 3: for a long time. So they've got more paying users
Speaker 3: on the consumer side. They also have a lot more
Speaker 3: businesses that are using it, and this is driven in
Speaker 3: some part by Codex, which is its coding assistant.
Speaker 2: Okay, well, we can't talk about this as open air
Speaker 2: in a vacuum. How does it compare to what the
Speaker 2: latest is from Anthropic, it's chief rival.
Speaker 3: I mean, they've been that sort of neck and neck
Speaker 3: in a way. Okay, I hate to say like it's
Speaker 3: one versus the other, because I think that it's like
Speaker 3: much much bigger and broader than that, And there are
Speaker 3: a lot of companies here in this ecosystem, but I
Speaker 3: think Inthropic definitely has proved over the last year or
Speaker 3: so that they're a really handy rival to this company,
Speaker 3: and they have especially on the coding front. They in
Speaker 3: some ways really outpaced open Ai. But Opening Eye is
Speaker 3: showing us as revenue is going up that customers are
Speaker 3: also willing to pay for its products as well.
Speaker 2: Okay, we're talking top line here, Do we know anything
Speaker 2: about the bottom line and what expenses are and and
Speaker 2: cost of revenue here and what it's spending.
Speaker 3: Ooh, We're still looking into that as far as like
Speaker 3: specific numbers, but what we do know generally, and I
Speaker 3: feel like we've we've talked about this so many times. Yes,
Speaker 3: and it's so frustrating, but it's the same thing over
Speaker 3: and over.
Speaker 4: Compute is really expensive.
Speaker 5: It costs a lot.
Speaker 3: Open Ai has worked very hard to a mass a
Speaker 3: war chest essentially of computing power, and it has that
Speaker 3: at its disposal. And yet the company also will still
Speaker 3: say that its biggest obstacle is getting enough compute. But
Speaker 3: that is going to take up a huge chunk of
Speaker 3: any revenue that it brings in. So other than that,
Speaker 3: it's obviously that's probably by far its largest extense.
Speaker 2: Bloomberg's Rachel Mettz out there on the West coast. Rachel,
Speaker 2: thanks for the update. We're going to keep asking you
Speaker 2: those questions about top and bottom lines at these companies.
Speaker 2: Appreciate your time well. Strategists that City Group and Bank
Speaker 2: of America are finding that the Chips Index is in
Speaker 2: quote bubble land after it rose over too standard deviations
Speaker 2: above its long term trends in real terms, as risks
Speaker 2: develop in the AI trade. Our next guest argues that
Speaker 2: early winners aren't necessarily winners forever, and early winner Nvidia.
Speaker 4: Is at the center of it all.
Speaker 2: Grenadilla, advisory founder at DOO Anna Rathbund, joins us now.
Speaker 2: And you talk about this quote duration mismatch between the
Speaker 2: realities of AI infrastructure and investor expectations.
Speaker 4: How do you quantify that?
Speaker 6: Yeah, you know, we're looking at quarter to quarter numbers,
Speaker 6: and perhaps that's not the right timeframe, even though that's
Speaker 6: what we're used to as equity investors. The hyperscalers and
Speaker 6: semiconductor companies are telling us, you know, look out to
Speaker 6: twenty twenty seven, twenty eight, twenty nine. I mean, they're
Speaker 6: really they're issuing bonds that go all the way out
Speaker 6: to twenty sixty six. I'm not saying that we have
Speaker 6: to wait until twenty twenty six, but we definitely have
Speaker 6: a mismatch in expectations of when we might actually see
Speaker 6: return on some of these investments. The revenue expectations that
Speaker 6: are being promised years out, they have to be able
Speaker 6: to meet it years out, and that takes a lot
Speaker 6: of investment today in numbers that we're totally not used to, right,
Speaker 6: So I think we have to we have to sort
Speaker 6: of adjust our expectations to be a little bit more
Speaker 6: longer term focused than we are today.
Speaker 4: Okay, but how how longer term?
Speaker 2: I mean, at least what we're talking about memory makers,
Speaker 2: we still hear about twenty thirty over and over again.
Speaker 2: I mean the visibility quarter to quarter is I think
Speaker 2: tough for a lot of people to comprehend. How much
Speaker 2: time do we have to wait?
Speaker 6: Yeah, and that's the uncertainty, right And that's why you
Speaker 6: see the volatility in the markets, And that's basically investors
Speaker 6: expressing that uncertainty. The answer, I think is we don't
Speaker 6: really know, and I'm not entirely sure that the hyperscalers
Speaker 6: know either. Right now, they are in an existential race.
Speaker 6: Let's capture that future compute that we get to sell
Speaker 6: by building data centers and buying in video chips and
Speaker 6: perhaps making our own chips. And that is I think
Speaker 6: how the industry is changing, and frankly, we have.
Speaker 4: To wait and see a sort of field of dreams.
Speaker 2: If we build it, they will come maybe okay, maybe,
Speaker 2: Well we'll help us envision that future and what it
Speaker 2: looks like. Because there's the conversation too happening where there's
Speaker 2: no guarantee on this ROI. Do you buy into that
Speaker 2: or do you think that there will be an ROI.
Speaker 5: On this I think there will be an ROI on it.
Speaker 6: I mean, And this is the other expectation that we
Speaker 6: have perhaps misplaced, is the level of compute.
Speaker 5: Right overall investors.
Speaker 6: Are we're used to looking at the last twenty years
Speaker 6: of Internet and cloud growth, etc. At the AI level,
Speaker 6: the sophistication of these models, and just how much compute
Speaker 6: that it takes. I'm not entirely sure the market has
Speaker 6: digested it, and that's why there's so much money going
Speaker 6: into it.
Speaker 5: I do believe that we will see the ROI.
Speaker 6: It's just as you mentioned before, it's the timing is uncertain,
Speaker 6: and that's why we have to take a long term view.
Speaker 4: Are in your view?
Speaker 2: Are we talking about the right names? Are we looking
Speaker 2: at the right names at least on the public equity side.
Speaker 2: We're going to talk to some venture capitalists later a
Speaker 2: little later this hour. You know, they're thinking about it
Speaker 2: from the perspective of Okay, what are the early companies
Speaker 2: now we should be investing in. But you focus on
Speaker 2: public markets. Are we talking about the right names here?
Speaker 6: I think those are the names that we have to
Speaker 6: talk about because that's where the spend is coming from,
Speaker 6: that's where the circular financing is, that's where the debt
Speaker 6: issuance is coming from. And so if you are a
Speaker 6: public market investors, those names you do have to pay
Speaker 6: attention to. Now, what we have discovered in the last
Speaker 6: two or three years is that sometimes names come up
Speaker 6: out of nowhere, out of the left field in terms
Speaker 6: of being in the front line of AI. So until
Speaker 6: we see those names, I think we are focusing on
Speaker 6: the names that we see today. But we do have
Speaker 6: to think about the risks. You mentioned Nvidia earlier, it
Speaker 6: was an early winner. Now everyone is making their own chips.
Speaker 6: What does that mean for Nvidia? Now Corewave is actually
Speaker 6: dependent on Nvidia and their debt is actually collateralized by
Speaker 6: Nvidia chips.
Speaker 5: What does that mean for Nvidia?
Speaker 6: I mean, I think we have to look at it differently,
Speaker 6: give it a second look in the same names that
Speaker 6: we all talk about today.
Speaker 2: Yeah, well, we'll find out a couple of weeks what
Speaker 2: Nvidia says August twenty six is when they're scheduled to
Speaker 2: report their most recent quarter. And before we let you go,
Speaker 2: you mentioned circular financing. Certainly that gets a lot of attention,
Speaker 2: but increasingly we're hearing about concentration risks and worries that
Speaker 2: some of these hyperscalers are really have two customers, anthropic
Speaker 2: and open AI. What's your view on concentration risk.
Speaker 6: Yeah, concentration risk is something that these companies need to
Speaker 6: work on. I mean, we heard from Cerebras saying that
Speaker 6: they actually have a huge concentration risk, right, But they're
Speaker 6: actually new to the public markets. So I think we're
Speaker 6: going to have to expect that to reduce the risk.
Speaker 6: If at least they're not going to be able to
Speaker 6: tell us when we're going to get the ROI tell
Speaker 6: us that they are actually reducing the risk on their
Speaker 6: business side.
Speaker 2: Yeah, well, I guess the question that I have is
Speaker 2: who would take the place of those large customers at
Speaker 2: this point?
Speaker 5: Well, right, and that's is Algeum this.
Speaker 6: Yeah, that's the conundrum of the circular financing, right, because
Speaker 6: you know, it takes so much capital and size in
Speaker 6: order to build this AI ecosystem that there are a
Speaker 6: few players, right, and so I mean, I think we're
Speaker 6: going to be able to see in about a year
Speaker 6: or two. I mean, we have the hyperscalers trying to
Speaker 6: reduce their dependence on the number one supplier, and I
Speaker 6: think the companies are going to continue to make those
Speaker 6: innovative changes to their business model. And so this is,
Speaker 6: unfortunately is also a wait and see because of the
Speaker 6: nature of the AI ecosystem and how much money it
Speaker 6: takes to build it out.
Speaker 4: MANA.
Speaker 2: Rathbund of Grenadilla Advisory joining us this morning on Bloomberg Tech. Anna,
Speaker 2: thanks so much, do appreciate your time.
Speaker 4: Well.
Speaker 2: Coming up, applied Materials beats expectations investors, though, oh they're
Speaker 2: not so impressed. Shares down by about four point six
Speaker 2: percent right now. We're going to break down the chip
Speaker 2: equipment giants outlook next. I'm also watching shares a broadcom
Speaker 2: that owns VMware. Shares a broadcom down this morning, trading
Speaker 2: and dragging the S and P five hundred lower. It
Speaker 2: follows a report that VMware security vulnerability being actively exploited
Speaker 2: across several countries. Broadcom shares off their worse levels, but
Speaker 2: still down five point three percent. This is Bloomberg Tech.
Speaker 2: AMD has raised four point seventy five billion dollars in
Speaker 2: its biggest ever US dollar bond sale. It joins a
Speaker 2: wave of borrowing tied to the AI boom, the chip
Speaker 2: maker ramping up spending as demand for computing capacity surges.
Speaker 2: AD says the proceeds will be used for general corporate purposes,
Speaker 2: potentially including debt repayment, with eight hundred and seventy five
Speaker 2: million dollars.
Speaker 4: Of bonds due next month.
Speaker 2: A Fly Materials delivered a better than expected forecast investors.
Speaker 2: Though hard to impress, it's the biggest US chip maker
Speaker 2: of equipment, I should say. It says that customers are
Speaker 2: pushing it to ramp up production even faster. Bloomberg's I
Speaker 2: and King covers all things semiconductors, and he joins US now.
Speaker 4: Ian SO shares.
Speaker 2: We're up about one hundred and eight percent going into
Speaker 2: this print yesterday. Expectations fair to say, we're pretty high.
Speaker 2: Looks like a pretty good print across the board. What
Speaker 2: are investors upset.
Speaker 7: About Yeah, whether the actually upset about buy anything in
Speaker 7: particular isn't really clear. I Mean, all of the numbers
Speaker 7: look very clean, but really what we've got is yet
Speaker 7: another case of a company comes out and says, hey,
Speaker 7: guess what our innings are going to be hundreds of
Speaker 7: millions of dollars better than you had expected. And the
Speaker 7: reaction they get is, yeah, great, we know that. What
Speaker 7: are you going to do for us next And so
Speaker 7: a lot of the conversation on the call was about
Speaker 7: next year.
Speaker 2: Okay, well, let's talk about that, because the question that
Speaker 2: I think a lot of people have is about how
Speaker 2: this firm is somewhat of a barometer for the entire industry.
Speaker 2: Can you talk a little bit about visibility that we
Speaker 2: got from applied Materials into what the rest of the
Speaker 2: year and what next year looks like.
Speaker 7: Yeah, no, that's a very good question, and this is
Speaker 7: one of the reasons why you would concentrate on a
Speaker 7: company that does something a little bit more esoteric. So
Speaker 7: what the CEO told us in a conversation, you know
Speaker 7: after the numbers hit, was look, I've got eight quarters
Speaker 7: of guidance from my customers because it takes so long
Speaker 7: to make this equipment, to then ship it, to then
Speaker 7: install it and get it up and running in these factories.
Speaker 7: You know, we have to plan over the horizon and
Speaker 7: guess what, they're giving me even more visibility than they
Speaker 7: normally would. So he's saying, look, next year, things are
Speaker 7: going to get better. So the call was all about, well,
Speaker 7: how much better? Tell us exactly how much better? And
Speaker 7: you know he's saying, look a lot better. So I
Speaker 7: don't really know what more of a conversation, well that
Speaker 7: you could have as a management team at this point, Ian.
Speaker 2: Before we let you go, we have thirty seconds. You've
Speaker 2: been doing this a long time and covering these types
Speaker 2: of companies a long time through different cycles, So I'm
Speaker 2: just curious contextualize the moment for us. Have you seen
Speaker 2: anything like this?
Speaker 7: Never the extent that we are, you know, sort of
Speaker 7: getting in front of ourselves and projecting growth. We've never
Speaker 7: seen anything like this. We've seen ups and downs with
Speaker 7: a fool, but never anything to this extent.
Speaker 2: Ian King, It's always great to chat with you. Thanks
Speaker 2: for getting up early. Do appreciate that's Ian King out
Speaker 2: in our San Francisco bureau. Well Chinese aifirm z dot
Speaker 2: Ai is upgrading its flagship model as it looks to
Speaker 2: close the gap with US rivals Open Ai and Anthropic.
Speaker 2: The new GLM five point three will focus on stronger
Speaker 2: coding capabilities and stronger performance gains over its previous model.
Speaker 2: The company plans to release the new LLM weights within
Speaker 2: two weeks, allowing developers to download and customize it. Sanford's
Speaker 2: AI Index finds a striking divide and attitudes toward AI
Speaker 2: in China in the US. But the question what's driving
Speaker 2: that gap and could China's enthusiasm give its AI industry
Speaker 2: and edge. Bloomberg's minmen Low explaance.
Speaker 8: This Stanford University AI Index shows that more than eighty
Speaker 8: percent of Chinese are optimistic towards AI, compared to less
Speaker 8: than forty percent in the US. And Edelmann has a
Speaker 8: similar survey showing the same trend that more than seventy
Speaker 8: percent of Chinese trusts AI compared to less than forty
Speaker 8: percent in the US. And again, why is there such
Speaker 8: a huge gulf in attitudes between Chinese and Americans? One
Speaker 8: reason could be people's experience with technology in China over
Speaker 8: the last two decades. It's still in a rapid development phase,
Speaker 8: and people's experience of tech is one of empowerment and transformation.
Speaker 8: We're talking about rural residents getting to sell their goods
Speaker 8: through e commerce channels, elite frogging credit cards to become
Speaker 8: a cashless society, experiencing the convenience of door to door
Speaker 8: delivery and very cheap efficient logistics for example. But in
Speaker 8: the US that's already a norm, right. People are familiar
Speaker 8: with big box retail, they have reliable mail, and the
Speaker 8: experience of the tech explosion has been one of addiction,
Speaker 8: data privacy, violation, over concentration of power in big tech.
Speaker 8: So that's one reason, and the other concern is around
Speaker 8: whether there is enough guard rails that has been put
Speaker 8: in place. And in China, these tech films are still
Speaker 8: under the thumb of the government. They're constantly worried about crackdowns.
Speaker 8: And when the government pushed this Common Prosperity campaign, tech
Speaker 8: films were rushing to pledge billions of un to support that.
Speaker 8: While in the US it's a different story where you
Speaker 8: have a revolving door where tech executives raise funds to
Speaker 8: run political campaigns, where billions are being poured into lobbying.
Speaker 8: So again that concern around guard rails and there's just
Speaker 8: not enough trust that the government is protecting the interests
Speaker 8: of residents. So why does this matter When some people
Speaker 8: are more willing to try new technology? That means market
Speaker 8: adoption rate can be much faster. And while China legs
Speaker 8: behind in some of the foundational technology like the chips
Speaker 8: and the hardware, Chinese firms could have an advantage in
Speaker 8: having that more futile ground to test new products and
Speaker 8: to allow much faster adoption of new AI products. Mimnlo
Speaker 8: Bloomboo News, Hong Kong.
Speaker 2: Well so breaking news crossing the Bloomberg terminal. Luigi Mangioni
Speaker 2: to plead guilty to killing of healthcare CEO. Once again,
Speaker 2: Luigi Mangioni to plead guilty to US charges. This according
Speaker 2: to Luigi Mangione's lawyer, will continue to bring you updates
Speaker 2: on that story as it continues to break well. Staying
Speaker 2: with China's Ai boom, Deepseek is sharply raising prices for
Speaker 2: its flagship V four models. Peak hour rates will more
Speaker 2: than quadruple starting August sixteenth. This is the startup prepares
Speaker 2: for a potential IPO and puts greater focus on profitability.
Speaker 2: Even after the hike, deeps Seek says its models remains
Speaker 2: significantly cheaper than major rivals. Well, coming up, how close
Speaker 2: are we really to a world full of humanoid robots?
Speaker 2: We've got some answers. Next, this is Bloomberg. The promise
Speaker 2: of embodied AI think humanoid robots, drones, autonomous vehicles seems
Speaker 2: to be coming into its own and increasingly entering the
Speaker 2: real world. Bloomberg Tech Europe's Tom McKenzie spoke with Google
Speaker 2: Deep Mind set of Robotics Carolina Parata about whether physical
Speaker 2: AI is finally having its quote chat GPT moment.
Speaker 9: I would say not yet, but you can see it.
Speaker 9: You can see it, and you can see the lights.
Speaker 9: In my opinion depends what you call the TGIC moment
Speaker 9: for robotics. In my opinion of ChiPT moment for robotics
Speaker 9: would be one where everybody can experience what it's like
Speaker 9: to interact with the robot, and the robot responds to
Speaker 9: what you want, and that's what you want in a
Speaker 9: completely new environment or a completely new setting. So that's
Speaker 9: what it means to me. I don't think we're there yet,
Speaker 9: but we're getting there.
Speaker 4: What gets us there?
Speaker 10: What are the technological barriers that need to be overcome
Speaker 10: to get to that point?
Speaker 9: Yeah, I mean this is precisely what we're invested on.
Speaker 9: So our goal is to build the intelligence layer that
Speaker 9: can power any robot and make it really intelligent, so
Speaker 9: that it's includive for humans to use, so that it
Speaker 9: can do a broad range of tasks, so that it
Speaker 9: can make the robot smart enough to understand an environment,
Speaker 9: reason about it, and then take action to complete a
Speaker 9: completely new task that you might have asked to do.
Speaker 9: That's what we're going after. I think that this is
Speaker 9: there's been significant progress over the last three four years.
Speaker 9: I mean, before robots didn't even understand what an object
Speaker 9: was and what their environment that were just simply the
Speaker 9: points in space without any meaning. We've actually introduced around
Speaker 9: if you need to lllms and blms into robots that
Speaker 9: taught them but naturally like understand to understand natural language.
Speaker 9: It also taught them how the reason about their environment
Speaker 9: and then how do you take action in a way
Speaker 9: that was touris a particular semantic task or a particular
Speaker 9: meaningful task for the robot that didn't exist before.
Speaker 10: Humanoids get a lot of headlines, they get a lot
Speaker 10: of pause. Do you think that's distracting? Do you think investors,
Speaker 10: the media, others. Do you think we're still overly obsessed
Speaker 10: with humanoids.
Speaker 9: That's a great question. I mean, we be live in
Speaker 9: a world where there will be many different robotypes. I
Speaker 9: actually think I'm very practical about this. I think that
Speaker 9: there's going to be a lot of tasks where a
Speaker 9: different form factor that is not a humanoid is the
Speaker 9: right thing. However, I do think humanoids are going to
Speaker 9: become useful and they are going to be an important form
Speaker 9: factor for a few reasons. First, I think the world
Speaker 9: is made for humans. So if you want to immediately
Speaker 9: deploy a robot in an environment that is human centric,
Speaker 9: then a humanoid is probably going to be an easy
Speaker 9: one to deploy. Actually, there's an interesting research aspect to this,
Speaker 9: which is if we want robots to learn from humans
Speaker 9: and the robot has a human form factor, it's actually
Speaker 9: easier because it can now translate what the human is
Speaker 9: doing when it's say cooking a recipe, into what the
Speaker 9: robots should do in order to do the same task.
Speaker 9: So that's a learning perspective that I find interesting. And
Speaker 9: then The other piece is that my goal is to
Speaker 9: really show that we can get to AGA in the
Speaker 9: physical world. What does that mean. It really means that
Speaker 9: the robot can do anything the human can. So I
Speaker 9: feel like humanoids are going to enable us to show
Speaker 9: and really believe that we have gotten to that level.
Speaker 9: So that is another reason why I like it. But
Speaker 9: we care about all kinds of robots, and we're interested
Speaker 9: in enabling bringing intelligence to all robots.
Speaker 2: That was Google d minds Carolina Parata speaking with Bloomberg's
Speaker 2: Tom McKenzie. You can check out the full interview in
Speaker 2: the latest episode of Bloomberg Tech Europe as Tom looks
Speaker 2: into whether we are on the cusp of a robot reality.
Speaker 2: You can find it on YouTube and Bloomberg dot Com. Well,
Speaker 2: let's take a look at more at tex stories with
Speaker 2: Bloomberg's You Hire annd Now You Hire a Take it away?
Speaker 11: Hi, Tim, It's time now for talking tech. First up,
Speaker 11: Francis Highest Court blocked a ban on social media for
Speaker 11: children under the age of fifteen, calling the ruling unconstitutional
Speaker 11: for harming youth's freedom of speech and communication. It really
Speaker 11: shows how global efforts to ban kids from social media
Speaker 11: are crashing into major legal and technical roadblocks, plus Nintendo
Speaker 11: climbs as much as seven and a half percent in
Speaker 11: Tokyo Today, following the success of its hit game Pokemon
Speaker 11: Poco Pia, the Nintendo Switch games global sales topped five
Speaker 11: million units since it launched back in March. Shares are
Speaker 11: on course for their third weekly gained the longest winning
Speaker 11: streak since November, and a judge ordered Calshe to stop
Speaker 11: offering some wagers in Washington States after regulators said the
Speaker 11: prediction markets app likely constituted an illegal gambling operation. Calshey's
Speaker 11: head of enforcements, Robert Deno, spoke on Bloomberg Surveillance earlier today.
Speaker 12: The exchange model operates differently than a sportsbook model. A
Speaker 12: sportsbook profits every time somebody walks in and puts up money.
Speaker 12: If they lose, the sportsbook wins all that money. An
Speaker 12: exchange model is fundamentally different. What you're doing is pairing
Speaker 12: users who are setting the price amongst each other in
Speaker 12: an order book that is open, impartial, and fair and
Speaker 12: available nationwide, and operating in exchange that fits that framework
Speaker 12: requires federal regulation.
Speaker 4: Well coming up.
Speaker 2: Cornell University is Director of Labor Education Research Kate Bronfrean
Speaker 2: Brenner joins us to discuss New York's battle with Amazon
Speaker 2: over its delivery workers.
Speaker 4: This is a Bloomberg Tech.
Speaker 2: I'm also watching shares of Micron and sand Disc as
Speaker 2: we speak. Right now, shares of Micron are higher Pierre
Speaker 2: farragu over at New Street Research, upgrading the stock to
Speaker 2: buy from neutral. He writes, even with strong share price appreciation,
Speaker 2: the company is attractively valued based on a metric a
Speaker 2: price to cost a good sold. Micron shares were hired earlier,
Speaker 2: but still up one point three percent. Sand Disc also
Speaker 2: surging today, up close to six percent. But take surging
Speaker 2: with a grain of salt. I mean shares of sand
Speaker 2: Disc this year, they are up close to six hundred percent,
Speaker 2: up five point eight percent right now. JP Morgan assigned
Speaker 2: an overweight rating following the firm's investor Day. Remember share
Speaker 2: surge fourteen percent yesterday. We're talking Amazon, and we are
Speaker 2: talking labor, specifically when it comes to how those packages
Speaker 2: get to people in New York City. That's coming next
Speaker 2: on Bloomberg Tech. Welcome back to Bloomberg Tech. Let's take
Speaker 2: a look at the Nasdaq this week. We did see
Speaker 2: the s and P five hundred hit a new all
Speaker 2: time high this week. The Nasdaq GOO, even though it's
Speaker 2: up over the last five days about eight tenths of
Speaker 2: one percent, underperforming at least the recent high of the
Speaker 2: S and P five hundred. The decline in retail sales
Speaker 2: that we got this morning means that bets are increasing
Speaker 2: that the FED is going to hold rates in September,
Speaker 2: meaning a lot can happen between now and the next
Speaker 2: policy meeting, but at least for now, there's less of
Speaker 2: a risk that the FED actually raises rates at its
Speaker 2: September meeting. We'll wait to hear what Chair Warsh says,
Speaker 2: of course, at Jackson Hole a little later this month.
Speaker 4: Well.
Speaker 2: A new bill back by New York City Mayor Zoron
Speaker 2: Mamdani threatens Amazon's chief delivery model. If the Delivery Protection
Speaker 2: Act passes, the e commerce giant may pull up stakes
Speaker 2: and make all New York City deliveries from hubs outside
Speaker 2: city limits. But Bloomberg Spencer Soper writes in Today's Tech
Speaker 2: and Death newsletter, proponents of the bill say Amazon can't
Speaker 2: abandon the city because that would lengthen delivery times, which
Speaker 2: it is perpetually trying to shorten. We're now joined by
Speaker 2: Cornell University's Director of Labor Education and Research and senior
Speaker 2: lecture Kate Bronfinbrenner, to help us make sense of it all. Kate,
Speaker 2: I just want to start with the way that traditionally
Speaker 2: delivery companies have involved humans in that last mile. What
Speaker 2: have they done in terms of a structure to you know,
Speaker 2: employ them or not directly employ them.
Speaker 13: So the delivery service model is one where the companies
Speaker 13: try to distance themselves as much as possible from the
Speaker 13: workers and responsibility for the workers and the liability for
Speaker 13: the actions of the delivery drivers and the vans. It
Speaker 13: allows them to exploit the workers and deny responsibility for accidents,
Speaker 13: traffic problems, worker health and safety issues in to pay
Speaker 13: workers and lower wages and lower benefits than they otherwise would.
Speaker 2: This is distinctive from let's say UPS, for example, which
Speaker 2: is known for having a strong union and directly employing
Speaker 2: those UPS drivers and UPS delivery workers that you see
Speaker 2: delivering packages.
Speaker 5: Correct, exactly.
Speaker 13: These companies are trying to say they're not join employers,
Speaker 13: they're not responsible, they you know, they can't be unionized.
Speaker 13: Very different from UPS and much much more dangerous working
Speaker 13: conditions and much more less liability for the actions of
Speaker 13: the delivery service providers.
Speaker 2: So let's talk about this Delivery Protection Act, because the
Speaker 2: folks who say, you know, if this passes and Amazon
Speaker 2: has to directly employ delivery workers who deliver packages within
Speaker 2: the city, then Amazon's going to just, you know, move
Speaker 2: town over to New Jersey or something and employ workers
Speaker 2: there or get deliveries made from there. Then they want
Speaker 2: to have to adhere to this. Is that a realistic
Speaker 2: concern that the city should have.
Speaker 13: First of all, that is a decision, that's a choice
Speaker 13: that Amazon would make. Obviously, Amazon is making huge profits,
Speaker 13: some of one of the most profitable companies in the
Speaker 13: history of the world. They definitely can afford to do
Speaker 13: better by their workers, and their whole system is designed
Speaker 13: to get things to people fast, faster and faster and
Speaker 13: faster to same day delivery.
Speaker 5: It is not in.
Speaker 13: Their interests to move outside the city, and they don't.
Speaker 13: The amount of extra money it's going to cost them
Speaker 13: is just a tiny fraction of the amount of profits
Speaker 13: billions of billions of dollars of profits they make each year.
Speaker 2: Do you think, though, that the Delivery Protection Act is
Speaker 2: the right approach to this.
Speaker 13: Well, at a time where we really can rely on
Speaker 13: the federal government less and less to protect workers and
Speaker 13: to protect consumers, many organizations are turning to states and
Speaker 13: cities in order to provide regulation that our federal government
Speaker 13: is no longer providing. There have been a dramatic increase
Speaker 13: in the number of accidents. There are eighteen DSPs in
Speaker 13: the New York City area and then seventy eight percent
Speaker 13: of the communities in New York City accent crashes with
Speaker 13: injuries have risen, and you know these are serious accidents.
Speaker 13: Worker safety has gone down, worker pay and benefits have
Speaker 13: gone down. So you know, the City of New York
Speaker 13: is committed to improving the status of the working class
Speaker 13: in the city. Mondani has made that very clear, and
Speaker 13: this is a step in that direction. But New York
Speaker 13: is not a loons. Cities and states across the country
Speaker 13: you're realizing that they have to take over what the
Speaker 13: federal government did in the past.
Speaker 2: Yeah, I'm coming to you from New York. And the
Speaker 2: scale here of the package delivery is actually just completely unbelievable.
Speaker 2: I mean, Spencer, our colleague Spencer Soper, in his newsletter,
Speaker 2: writes about two and a half million packages delivered every
Speaker 2: single day in New York City. A third of the
Speaker 2: people who live here are getting a package each day.
Speaker 4: I mean, you can see these.
Speaker 2: Trucks that are outside of our office.
Speaker 4: Here and they're just loaded. The entire the.
Speaker 2: Entire tractor trailer is loaded with packages to be delivered.
Speaker 4: And that's just in Midtown.
Speaker 2: I'm wondering about companies that are not Amazon here, Kate
Speaker 2: if obviously Amazon's the eight hundred tunkerrilla in the in
Speaker 2: the room, but a lot of things come from other companies,
Speaker 2: would this affect other companies too.
Speaker 13: Well? Right now, Amazon kind of sets the standard because
Speaker 13: it's so big, So what it does, everybody else has
Speaker 13: to do. So if Amazon has to treat its workers better,
Speaker 13: it will make it easier for the other companies to
Speaker 13: keep treat their workers better and be competitive. Amazon has to,
Speaker 13: like all the companies now, are going to have to
Speaker 13: get licensed by the Consumer and Worker Protection Bureau, which
Speaker 13: is going to track labor and employment violations and consumer violations.
Speaker 13: So if companies do right and follow the law, they
Speaker 13: will be able to get licensed regularly. Amazon will not
Speaker 13: be able to be an outlaw just ignoring every regulation
Speaker 13: as it has in the past.
Speaker 2: Can you just can you explain why, like I understand
Speaker 2: the idea of these delivery service partners, these DSPs, why
Speaker 2: you know, maybe the wages wouldn't as high and the
Speaker 2: benefits wouldn't be as good as if they were, you know,
Speaker 2: as opposed to working directly for for Amazon, But can
Speaker 2: you explain why conditions will be safer for them and
Speaker 2: why you think there would be fewer accidents if they
Speaker 2: were employed directly by a big company.
Speaker 13: Because right now, the big companies are not liable if
Speaker 13: there's an accident. So even though we all know that
Speaker 13: those drivers are work for Amazon, they're wearing Amazon uniforms,
Speaker 13: the roots are set by Amazon. They're hiring so is
Speaker 13: overseen by Amazon. Their hours are seen by Amazon. But
Speaker 13: Amazon right now does not have to take responsibility if
Speaker 13: there is an accident or if their drivers are being
Speaker 13: pressured to on production productivity so that they have to
Speaker 13: drive so fast that.
Speaker 5: They are breaking the laws.
Speaker 13: But if Amazon is then responsible and can't get a
Speaker 13: license renewed to be a delivery provider, then it's going
Speaker 13: to make conditions safer, consumers more protected, and enforce the
Speaker 13: laws of the city. When it comes to traffic accidents.
Speaker 2: Kate rofren Renner, appreciate your time this afternoon or this morning,
Speaker 2: I should say, joining us over at Cornell University, Kate,
Speaker 2: appreciate it well. Watching shares of Reddit, they're surging this morning,
Speaker 2: up fourteen percent. This after the company we learned yesterday
Speaker 2: is set to join the S and P five hundred.
Speaker 4: Look at that.
Speaker 2: It's going to replace Avalon Bay Communities that's being acquired
Speaker 2: by Equity Residential. Now this is a big deal because
Speaker 2: now passive investment funds have to buy shares of Reddit.
Speaker 4: So that's why.
Speaker 2: Inclusion these days in an increasingly passive world is just
Speaker 2: becoming more and more important.
Speaker 4: Four companies.
Speaker 2: Here's a Reddit down by about twenty percent this year,
Speaker 2: up today by just about fourteen percent.
Speaker 4: Coming up.
Speaker 2: Sean Johnson joins US general partner over at two twenty
Speaker 2: four Ventures. He's going to talk to us about launching
Speaker 2: the new firm with AI heavyweights. This includes Jan lucun
Speaker 2: An oriole Vin y'alls. This is Bloomberg Tech. Dry Capital
Speaker 2: is seeing a massive payoff from its early bets on AI.
Speaker 2: Josh Kushner's twenty twenty two venture fund has grown more
Speaker 2: than sevenfold to three point seven billion dollars. It's been
Speaker 2: fueled by investments in companies including open Ai, SpaceX, and Anderil,
Speaker 2: Bloomberg's Natasha Mascarenas and joins us now for more. I
Speaker 2: guess does this answer some question about where money comes
Speaker 2: from to buy the Lakers for twelve billion dollars.
Speaker 4: I don't know.
Speaker 14: We'll see, we'll see. We know that thrive is going
Speaker 14: to be putting some money into it. But yeah, the
Speaker 14: news that we broke last night gives us an answer
Speaker 14: on why Thrives approached for concentration in the top positions,
Speaker 14: and its portfolio is definitely making a difference. Like you said,
Speaker 14: the twenty twenty two fund is up about seven x
Speaker 14: from where LP's put in it just a few years ago.
Speaker 14: And I mean VC sure.
Speaker 4: Yeah, not Natasha.
Speaker 2: It's a great story, unfortunately having some problems with with
Speaker 2: your connection.
Speaker 4: It's a great story.
Speaker 2: On the Bloomberg trumbel and at Bloomberg dot com, congratulations
Speaker 2: on the scoop that's Natasha mos Garnis. Check it out
Speaker 2: on the Bloomberg terminal and at Bloomberg dot com. We'll
Speaker 2: sticking with AI and Venture Capital. Two twenty four Ventures
Speaker 2: is a new AI native venture for launch by former
Speaker 2: AIX Ventures co founder Sean Johnson, ex Google DeepMind researcher
Speaker 2: oriole Beniols, and AI pioneer Jan Lucun. The trio plans
Speaker 2: to make seed stage bets and launches with more than
Speaker 2: one hundred million dollars in assets under management and two
Speaker 2: twenty four ventures partner Sean Johnson joins us now, Sean,
Speaker 2: good to have you, congratulations on this news. I'm curious
Speaker 2: about what you see as sort of the white space
Speaker 2: out there in Silicon Valley and really the world when
Speaker 2: it comes to these AI bets.
Speaker 15: What are you thinking about, Tim, Thank you so much
Speaker 15: for having me. Yeah, white space is harder and harder
Speaker 15: to find, given I think since twenty twenty two, we've
Speaker 15: been operating in a fairly noisy market, many consensus bets
Speaker 15: years over years over the year. So what we're thinking
Speaker 15: about is what stories do founders come with that we
Speaker 15: actually believe our non consensus that are not obvious that
Speaker 15: you know, we walk away thinking, you know, maybe that's
Speaker 15: not right, But then after thinking about it, getting to
Speaker 15: know the founder more, we recognize that there are a
Speaker 15: series of things that could be proven to be true,
Speaker 15: that would change the world and make that company in
Speaker 15: fact a market leader.
Speaker 2: You know, so much of the oxygen at least in
Speaker 2: what we talk about in the massive valuations for two
Speaker 2: big firms Open Ai and Anthropic. Of course it's sucked
Speaker 2: up by that. And yet yesterday our Bloomberg News team,
Speaker 2: or well it was Wednesday night, had this just incredible
Speaker 2: scoop about Anthropic possibly making a six billion dollar acquisition.
Speaker 2: And it was funny because I think a lot of
Speaker 2: people who are outside the industry don't even necessarily know
Speaker 2: what the card Ai does. But it was a good
Speaker 2: example of sort of you know, the massive, the massive market,
Speaker 2: even at a level with a company that is worth
Speaker 2: like a trillion dollars in the private market. Right now,
Speaker 2: I'm curious what you see as the opportunities that are
Speaker 2: out there, like what exists in terms of tech in
Speaker 2: your view that five ten years will become the next
Speaker 2: open Ai or Anthropic.
Speaker 15: Yeah, of course, there's a massive opportunity in the future
Speaker 15: of work. We're just getting started there. How do we
Speaker 15: think about to date, we've been thinking a lot about chatbots.
Speaker 15: How do we think about AI actually doing jobs themselves
Speaker 15: and humans their laborers workers to say yes, that's right, No,
Speaker 15: that's incorrect. This is the very beginning of that. Robotics
Speaker 15: has both consumer and business applications, and business is wonderfully fragmented.
Speaker 15: There's a ton of white space there, and then infrastructure.
Speaker 15: When you think about what agents are going to need
Speaker 15: to do to be productive across applications, that infrastructure is
Speaker 15: just starting to be built out.
Speaker 2: I'm curious, from your view, are we having the right
Speaker 2: conversation when we talk about this idea of a zero
Speaker 2: sum game when it comes to productivity, Like you know,
Speaker 2: some people will become more productive, others will be completely replaced.
Speaker 2: From your perch as a venture capitalist who looks into this,
Speaker 2: is that the right conversation to be having.
Speaker 15: We believe it's not a zero sum games. As intelligence
Speaker 15: is proliferates through these applications, it's just the nature of
Speaker 15: our liabor is going to change. There are going to
Speaker 15: be many more jobs. They're just going to be different.
Speaker 15: They're going to be higher leverage. Frankly, they're going to
Speaker 15: be more engaging. And so we're excited about the future
Speaker 15: where AI is taking away the more mundane jobs humans
Speaker 15: are doing today and sort of levels us all.
Speaker 2: Up, So you're not concerned about like a wipeout of
Speaker 2: white collar jobs that Dario Amideoanthropic has talked about in
Speaker 2: the past.
Speaker 15: There's certainly going to be I would say a shift
Speaker 15: in jobs. There are going to be a movement from
Speaker 15: the more mundane to the less mundane, the more engaged,
Speaker 15: and I think that's what Dario's talking about. We're going
Speaker 15: to have to reskill, We're going to have to think
Speaker 15: about the implications for a large number of workers, but
Speaker 15: again that they are going to be additional jobs too,
Speaker 15: And the big question is how do we navigate the transition.
Speaker 2: Okay, I've got a bunch of questions about the fundraising
Speaker 2: process and also about your partners at the firm. I
Speaker 2: want to start with fundraising. You're launching with one hundred
Speaker 2: million dollars. How difficult was it to raise that or
Speaker 2: how easy was it to raise that? I know it's
Speaker 2: never easy to raise money, but I think it seems
Speaker 2: like a lot of people want to invest in early
Speaker 2: stage companies out in Silicon Valley right now.
Speaker 15: We raised that capital across just two months, so it's
Speaker 15: so easy. It was fairly straightforward.
Speaker 2: Yes, what's the future capital raise schedule looking like, well,
Speaker 2: we think.
Speaker 4: The market's far bell.
Speaker 15: Do you see companies coming out and raising hundreds of
Speaker 15: millions billions to start? You also have companies that are
Speaker 15: raising just a few million to start. And we have
Speaker 15: a strategy that allows us to invest in both, and
Speaker 15: so we will on the more frontier side, we will
Speaker 15: continue continuously raise doing SPVs and co invest with our LPs,
Speaker 15: and then we have an open fund two at the
Speaker 15: early stage that allows us to invest in founders just
Speaker 15: getting started that are arguably more capital efficient.
Speaker 4: Are you looking right now?
Speaker 15: Geographically predominantly Silicon Valley, New York, Toronto, Paris, London, Tel
Speaker 15: Aviv are all very interesting hotspots for a AC.
Speaker 2: Is there no question that San Francisco is the leader
Speaker 2: right now?
Speaker 15: There's no question.
Speaker 2: What about versus China in the tech that we see
Speaker 2: coming out of China.
Speaker 15: Yeah, it's arguably why we continue to see such a
Speaker 15: massive raises, so much capital come into the ecosystem. There
Speaker 15: are many geopolitical questions and issues I think that we're
Speaker 15: grappling with and trying to understand, and everyone wants to win,
Speaker 15: and so I think we have to be very mindful
Speaker 15: about enabling researchers from all over the world to come
Speaker 15: to the United States to push the frontier, to keep
Speaker 15: the United States at the bleeding edge is a top priority, Sean.
Speaker 2: You're launching this with a couple other huge names, ex.
Speaker 2: Google Deep Mind researcher Oriole being y'all's Jan mccun ai,
Speaker 2: pioneer people. People know Yahn's work in the space. What
Speaker 2: do they bring to the table when thinking about where
Speaker 2: to invest.
Speaker 15: Yeah, at the early stage, number one is community and access.
Speaker 15: Who do we know who can we interact with? You know,
Speaker 15: day zero, that's just starting to formulate an idea. And
Speaker 15: Yon and Oriole are embedded in the ecosystem. Yahan, of
Speaker 15: course executive chairman at Advanced Machine Intelligence, professor at n YU.
Speaker 15: Oriole just co founded Discovery Loop and former co lead
Speaker 15: of Gemini, So they're wonderfully connected. Dario, you brought up
Speaker 15: at Androvic, spend time in deep Mind. The Perplexity team
Speaker 15: came out of n y U h and so you're
Speaker 15: looking for wonderfully connected investors partners, and and Yan and Oriole.
Speaker 4: Are just that.
Speaker 2: On Johnson general partner at two two or Ventures joining
Speaker 2: us out there in Silicon Valley Sean, congrats and thanks
Speaker 2: so much for joining us on Bloomberg Tech. I want
Speaker 2: to get back to some more breaking news. Luigi Mangione
Speaker 2: has now formally pleaded guilty to US federal charges. His
Speaker 2: sentencing date now set for December eighteenth.
Speaker 4: This news comes as.
Speaker 2: A hearing is underway today with US District Judge Margaret Garnett,
Speaker 2: which was set after federal prosecutors and defense lawyers jointly
Speaker 2: requested one. The guilty pleague is the first admission of
Speaker 2: wrongdoing by Luigi Manngeon coming out. Podcaster Alex Cooper's beverage
Speaker 2: business is shutting down, highlighting the challenges that online creators
Speaker 2: face when expanding beyond content creation.
Speaker 4: We've got that story next. This is Bloomberg Tech.
Speaker 2: Color Daddy hosts Alex Cooper's beverage business is shutting down.
Speaker 2: The drinks brand was launched by her company Unwell in
Speaker 2: partnership with Nesley last year, will cease production in the fall.
Speaker 2: According to sources, It comes on the heels of Unwell
Speaker 2: raising money at a five hundred million dollar valuation to
Speaker 2: support some of Cooper's other business lines beyond podcasting. Let's
Speaker 2: get more with Bloomberg's Ashley Carmen. She joins us here
Speaker 2: in New York. I'm a little out of the loop
Speaker 2: with the podcasting and the beverage side of things, but
Speaker 2: this was launched to a lot of fanfare, and she
Speaker 2: had a good reason to launch it. She said, you know,
Speaker 2: you didn't see the energy drink market catering at all
Speaker 2: to women. It was all aimed at men.
Speaker 4: What happened here, Yeah, she had us.
Speaker 16: All a pitch, you know, Alex's things. She's talking to
Speaker 16: gen Z women. She wanted to design drinks that were
Speaker 16: for gen Z women. But the reality is the beverage
Speaker 16: business is wildly competitive. I mean, Logan Paul is an example.
Speaker 16: He has an energy drink and a Chamberlain, a YouTuber,
Speaker 16: Hersell's a coffee line. These are just too off the
Speaker 16: top of my head of people who are trying to
Speaker 16: break into that business too, And it's just it's hard.
Speaker 4: You have to.
Speaker 16: Constantly remind people to keep buying your beverage, and if
Speaker 16: they're not feeling it, then that's why.
Speaker 2: Okay, this is a part of Alex Cooper's story and
Speaker 2: a part of Unwell, but the bigger context here is
Speaker 2: what happened and what is happening behind the scenes at
Speaker 2: the company right now.
Speaker 4: You've done a ton of reporting on this.
Speaker 16: Yes, So, I mean there's been a lot going on
Speaker 16: this year. First of all, just this week we learned
Speaker 16: that they raised money at a five hundred million sorry
Speaker 16: valuation for her company Unwell, which is our broader media
Speaker 16: company that she operates with her husband and business partner,
Speaker 16: Matt Kaplan. That came from Patrick Whitesell, a major Hollywood agent.
Speaker 16: Prior to that, I had reported earlier this year kind
Speaker 16: of what's been going on behind the scenes. So there's
Speaker 16: just been a ton of staff turnover, including executives. We
Speaker 16: did some reporting around how Matt has berated staff in
Speaker 16: the office, and really just this idea of trying to
Speaker 16: build a podcast network has kind of fallen flat. There
Speaker 16: really hasn't been any shows of hers beyond Call Her Daddy,
Speaker 16: which is what made her famous, that had broken through
Speaker 16: into the mainstream in a major way.
Speaker 2: And yet that five hundred million dollar funding round shows
Speaker 2: that there is confidence behind her and the brand.
Speaker 4: Yeah, totally.
Speaker 16: I mean, she is a talent, of course, don't think
Speaker 16: anyone's denying that. It's just a question of Okay, where
Speaker 16: does your business go? From here beyond just you.
Speaker 4: So who else.
Speaker 2: Has been able to and we only about thirty seconds left,
Speaker 2: but what are examples of podcasters who've been able to
Speaker 2: take a brand that has a huge and loyal following
Speaker 2: and build it just beyond that podcast.
Speaker 16: It's been really difficult. I mean you see people like
Speaker 16: Joe Rogan, for example, who he has not hired a
Speaker 16: ton of people, He's not built a media company.
Speaker 4: He just likes podcasting.
Speaker 16: Yeah, he does his podcast. He makes plenty of money
Speaker 16: doing that. But then he's like opened a comedy club
Speaker 16: and seemingly that's doing really well. It just gets a
Speaker 16: little tricky when you start expanding your empire to bring
Speaker 16: on tons of employees and do a lot more.
Speaker 2: Bloomberg's actually Carmen Herd reporting is fantastic and it's on
Speaker 2: the Bloomberg terminal, and it's Bloomberg dot com that is
Speaker 2: going to do it for this edition of Bloomberg Tech.
Speaker 2: Check out our podcast. You can find it on the
Speaker 2: terminal as well as online at Apple, Spotify, and iHeart.
Speaker 2: Have a great weekend everyone, This is Bloomberg