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Speaker 1: From Mahart.

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Speaker 2: We're Innovation, Money and Power Collie in Silicon Valley, NBN.

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Speaker 3: This is Bloomberg Technology with Caroline Hyde.

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Speaker 1: And Ed Ludlove.

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Speaker 4: I'm Parlinehider Bloomberg's World headquarters in New York.

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Speaker 5: And I'm Ed Ludlow in San Francisco. This is Bloomberg

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Speaker 5: Technology coming up.

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Speaker 4: Full earnings coverage ahead, we break down results from sales Force,

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Speaker 4: Snowflake Paramount to name.

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Speaker 5: But a few, plus Bitcoin pushes toward a record high

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Speaker 5: amid massive inflows into exchange traded funds. We'll get to

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Speaker 5: read on the state of digital currencies amid that rally, and.

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Speaker 4: Apple facing weak demand for the iPhone in China as

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Speaker 4: resellers slashed the price of the latest model. We'll discuss

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Speaker 4: that and so much more throughout the salbot. First, let's

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Speaker 4: check in on these markets, and it's a macro feel

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Speaker 4: to the day. We get that pceedflator, what is the

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Speaker 4: inflationary pressure that the Federal Reserve is looking at? Came

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Speaker 4: in bang in line with expectations, two point eight percent

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Speaker 4: year on year in terms of inflatory pressure. Right for

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Speaker 4: the Federal Reserve therefore to be pausing on any rate

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Speaker 4: cuts but we hold up about five ten percent on

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Speaker 4: the nasdacs and relief to the market. We're seeing tenure

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Speaker 4: yields come down some three four basis points in fact,

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Speaker 4: down across the curve, and I'm looking at a volatility

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Speaker 4: index of fear gauge that shrinks by less than a point.

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Speaker 4: We're at thirteen handle. Moving on and have a look

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Speaker 4: at what you were just outlining their ed Really where

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Speaker 4: the action has been is on the risk Asseler choice

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Speaker 4: of the technology show, which is Bitcoin.

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Speaker 6: We're up almost four.

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Speaker 4: Percent, sixty two sixty three thousand, let's call it. Remember

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Speaker 4: sixty nine thousand dollars is the previous record back in

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Speaker 4: November twenty twenty one.

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Speaker 6: Where are you looking on the micro so a.

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Speaker 5: Lot in the earnings context, but when it comes to

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Speaker 5: tech Snowflake is the big mover. It's down eighteen percent

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Speaker 5: or so in the session, but on track for its

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Speaker 5: biggest drop on record. Two pieces of news, really, Kevin Supman,

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Speaker 5: the CEO, is stepping down. He will be replaced by

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Speaker 5: ex Googler Shrida Ramaswami. But also the sales outlook that

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Speaker 5: they gave for the current period, even at the high

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Speaker 5: end of the range, it's like twenty million dollars below

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Speaker 5: what the street was expecting in terms of consensus, And

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Speaker 5: the story for Snowflake was sharp deceleration and growth in

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Speaker 5: twenty twenty three. They didn't do enough to say we're

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Speaker 5: on the upward trajectory moving forward into twenty twenty four.

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Speaker 5: There's a lot more happening as well. In the Arnie's

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Speaker 5: context's a kind of mixed bag of different companies that

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Speaker 5: will get to throughout the show. The first is Paramount

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Speaker 5: is actually up four point eight percent. Sales declined mid

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Speaker 5: single digits in the quarter gone ad weakness, but they

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Speaker 5: called it the AD slump is over, we bottomed out,

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Speaker 5: we're rebounding. We'll talk about it later in the program.

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Speaker 5: Hb's now down one percent. It's kind of traded a

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Speaker 5: bit choppy this morning. Look specifically at sales of PCs

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Speaker 5: to consumers. The street expected them to return to growth,

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Speaker 5: but sales fell one percent in that category. It's a

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Speaker 5: concern even though they're saying twenty twenty four will be

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Speaker 5: better on the customer or corporate side. Then salesforce is

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Speaker 5: actually up one point five percent. It's outlook for the

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Speaker 5: year suggests annual growth of full year fiscal twenty five

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Speaker 5: ten point eight percent. I want to go very specific

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Speaker 5: with the numbers, ten point eight percent. The reason that's

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Speaker 5: important is that they grew just above eleven percent last year.

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Speaker 5: So in other words, we expect decelerating growth. That's not

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Speaker 5: what the street wanted to hear. But we got a

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Speaker 5: first ever dividend and a buyback. How many times are

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Speaker 5: we going to keep saying that divvy buy back stocks

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Speaker 5: up one and a half.

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Speaker 4: Percent, And let's dig in therefore, with an expert who

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Speaker 4: is across all of those numbers ed and you bring

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Speaker 4: us the takeaways. Brody Ford was there with a closer

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Speaker 4: look at some of these results, and Brody, there does

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Speaker 4: seem to be this worry about the forecast front and center.

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Speaker 7: Yeah, everybody wants some more growth, there's no question. With

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Speaker 7: Snowflake in particular, they're always an interesting one because, unlike

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Speaker 7: a lot of these software companies that charge you five

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Speaker 7: ten year contracts so you can predict it pretty well,

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Speaker 7: they charge you based on how much you use the product,

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Speaker 7: kind of like AWS or an Azure, which means every earnings,

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Speaker 7: it's a little volatile. We're not sure what we're gonna

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Speaker 7: get and so this forecast, it made people feel anxious

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Speaker 7: because it showed that growth continue to decelerate. You mix

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Speaker 7: that with losing one of the most famous CEOs in

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Speaker 7: the industry, that's going to be a shakeup.

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Speaker 5: Okay, let's talk about salesforce. This is I just go

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Speaker 5: so nerdy on the details. I use MDL on the

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Speaker 5: Bloomberg terminal, and we're talking about a few basis points.

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Speaker 5: But my understanding, Brody, and you and I were talking

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Speaker 5: about this on the phone, is where do we find

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Speaker 5: the AI read through? We didn't you know they outperformed

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Speaker 5: in the quarter gone to end twenty twenty four fiscal

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Speaker 5: twenty four with like eleven point two percent growth, and

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Speaker 5: they're guiding us to ten point eight percent growth this year.

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Speaker 5: What is or what is not happening for salesforce right now?

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Speaker 7: Yeah, And it's funny because they are guiding to that

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Speaker 7: above ten percent number when it comes to the non

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Speaker 7: consulting revenue. When it comes to top line, their forecast

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Speaker 7: has slipped below that psychologue called ten percent mark, which

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Speaker 7: you know, all of a sudden, then you become a

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Speaker 7: value stock rather than a growth stock.

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Speaker 5: Salesforce.

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Speaker 7: The story they're telling is that AI is going to

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Speaker 7: buffet the need for a lot of their solutions. The

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Speaker 7: early stage one will be in their data products, data cloud, warehousing,

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Speaker 7: Tableau for analytics, and that did outperform, right, I mean,

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Speaker 7: they are seeing uptick there.

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Speaker 5: They say it's the.

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Speaker 7: Highest organic growth of any product they've had. But still

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Speaker 7: I think the AI impact on these numbers is relatively low,

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Speaker 7: and I think that's the case for a lot of

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Speaker 7: these application software makers. They want to tell an AI story,

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Speaker 7: but in reality, it's still very early days. It is

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Speaker 7: hard to quantify the exact impact at this point, even

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Speaker 7: if in the earnings call you're going to hear those

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Speaker 7: two letters over and over again.

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Speaker 4: We certainly are.

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Speaker 6: Brady Ford.

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Speaker 4: We thank you so much for bringing us the inside

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Speaker 4: track on both Snowfake Salesforce. Let's dig in with both

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Speaker 4: those companies and the broader ecosystem right now, of Lisa,

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Speaker 4: welcome Rebecca webtman CEO and principle of Valua, Technology analyst

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Speaker 4: firm providing research advisory services to leaders with a focus

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Speaker 4: on the value of technology. So talk to us about

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Speaker 4: the value proposition at Salesforce right now. From your perspective, Rebecca,

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Speaker 4: are the offering the right kind of offerings at the

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Speaker 4: right price point with the right focus on margin.

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Speaker 8: Sure, Caroline, thanks thanks for having me today.

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Speaker 2: So Salesforce I got the timing right with data Cloud right,

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Speaker 2: just as everyone recognizes that data and metadata is actually

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Speaker 2: what makes AI work. They've got data Cloud out production

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Speaker 2: and they're doing a lot today from a penetration perspective,

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Speaker 2: offering credits to customers to get out there and start

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Speaker 2: to adopt data cloud so they can start to experience

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Speaker 2: the benefits of AI. Salesforce has some runway in other

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Speaker 2: areas as well, and I think what we've seen too

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Speaker 2: in the past years they've.

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Speaker 8: Pushed to improve efficiency and improve.

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Speaker 2: Margins is offerings like the AWS marketplace and other more

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Speaker 2: self service things that should help them keep their cost

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Speaker 2: of sales under control as well.

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Speaker 4: It's interesting whenever I hear, for example, marketing coming my

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Speaker 4: way from a Salesforces or is about the safety the

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Speaker 4: using of your own proprietary data here, and that seems

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Speaker 4: to be the sale from Snowflake too. But sticking with Salesforce, ultimately,

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Speaker 4: what's your view on whether the incumbents win in this space.

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Speaker 4: The fact that they've already got the deals with so

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Speaker 4: many of these corporates that they're going to be the

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Speaker 4: ones that win out these AI offerings, or whether these

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Speaker 4: challenges that are coming up and being VC backed can

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Speaker 4: make some begin roads.

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Speaker 2: You know, it's interesting that you asked that, Caroline, because

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Speaker 2: we just stood a study asking people about whom they

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Speaker 2: would trust with their AI and what we found is

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Speaker 2: that it wasn't necessarily those established vendors. Buyers were more

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Speaker 2: likely to trust AI solutions that came back from organizations

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Speaker 2: that had traceable data and clear ethics and privacy policies,

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Speaker 2: not necessarily an established vendor.

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Speaker 8: So there's still a lot of room for innovators out there.

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Speaker 5: This is how I think about AI and salesforce. Right,

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Speaker 5: AI means they can charge more, they're more expensive premium products,

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Speaker 5: adds value to what they already do that did not

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Speaker 5: show up in their numbers. Do you agree with that?

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Speaker 2: I would agree with that, But I think too what

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Speaker 2: we're seeing is a penetration strategy for data cloud today

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Speaker 2: as customers need to make that leap into it. So

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Speaker 2: you see with the new marketing cloud offering where they

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Speaker 2: get data cloud credits, they're going to work on building

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Speaker 2: that up in true salesforce fashion, get them to try

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Speaker 2: and get excited about it and then really be able

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Speaker 2: to turn on the switch.

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Speaker 5: Oh, we know all about true Salesforce fashion, but here's

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Speaker 5: the reality. There's a company that grew mid twenty percent

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Speaker 5: range every year for a decade and it's going the

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Speaker 5: wrong way. Snowflake had a sharp deceleration in its growth

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Speaker 5: last year. It's not giving us evidence that it's turning around.

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Speaker 5: What's your conclusion on the corporate enterprise spending environment based

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Speaker 5: on the results that those companies gave.

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Speaker 2: Well, I think Snowflake made it pretty clear when they

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Speaker 2: said this is recovery, not rebound. We're looking at a

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Speaker 2: new era in correcting. On the software space. I do

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Speaker 2: think Salesforce has some runway with its other products like Slack.

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Speaker 2: There's still a big revenue opportunity there that they haven't

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Speaker 2: quite at.

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Speaker 5: Okay, so we have a change of leadership at Snowflake.

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Speaker 5: Does that excite you?

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Speaker 8: The market never likes the surprise change in CEOs.

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Speaker 2: Right, But I think too. Frank was brought in to

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Speaker 2: grow at a certain point, just like you did with Service. Now,

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Speaker 2: a streeter is a different person, and as we look

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Speaker 2: at Snowflake moving from just cloud storage to more of

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Speaker 2: an AI company. Certainly Shreeter has the chops and the

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Speaker 2: experience that make him a good.

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Speaker 8: Person in that spot.

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Speaker 5: All right, CEO and principle of Valoir, Rebecca Edam and

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Speaker 5: greats have you on the program. Really good wide range

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Speaker 5: of analysis on many different companies coming up on the program.

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Speaker 5: We're going to switch from the equity markets to bitcoin

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Speaker 5: risk asset of choice and crypto markets more broadly, we're

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Speaker 5: going to discuss all of that and more with Framework

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Speaker 5: Bench's Vance Spencer. That's neck, but there are other stocks

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Speaker 5: on the move, Carra.

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Speaker 6: There are and there are more earnings to come.

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Speaker 4: If you thought it was all over after the bell,

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Speaker 4: we're going to be looking at for what Dell has

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Speaker 4: to report.

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Speaker 6: We're up seven tenths of a percent ahead of those

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Speaker 6: numbers you.

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Speaker 4: Look back, and of course we've got the focus on HPE.

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Speaker 4: We've already had HPS you were running us through at

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Speaker 4: the start of the show. Currently at one point eight percent,

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Speaker 4: and I understand the CEO will be joining the network

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Speaker 4: tomorrow now. Soundhown Ai another darling in the AI spies,

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Speaker 4: up two hundred and twenty percent so far this year

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Speaker 4: for up another seven percent. Can this company deliver the

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Speaker 4: exuberance that we see factored into the share price from

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Speaker 4: New York, from San Francisco.

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Speaker 6: This is Bloomberg Technology.

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Speaker 4: Look, let's check on other risk assets today because they

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Speaker 4: are higher decidedly, so we are on a tear when

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Speaker 4: it comes to crypto.

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Speaker 6: Could we be eyeing the.

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Speaker 4: Sixty nine thousand dollars handle that we had previously at

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Speaker 4: record numbers for bitcoin currently training up at sixty three thousand,

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Speaker 4: as you'll see. But it's not just Bitcoin getting the love.

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Speaker 4: It's being spread through some of the other areas. I

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Speaker 4: think theoryum up significantly, up two point three on the day,

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Speaker 4: but we're hitting A three thousand, four hundred and sixty

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Speaker 4: five and other Layer one protocols. I think a Solana

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Speaker 4: also doing particularly well. Look at that more than eleven

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Speaker 4: percent on the day. There is much love more broadly

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Speaker 4: in the cryptosphere. Look at what's happening in the equity

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Speaker 4: side of the equation though as well, because as some

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Speaker 4: of these underlying assets do well well, if you're holding

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Speaker 4: or if you're mining, they're.

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Speaker 6: Doing particularly well for you as well.

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Speaker 4: I mean, we know key Hoddler in chief in the

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Speaker 4: equity market is of course MicroStrategy and they're up three

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Speaker 4: point three percent. Now, interestingly, on the downside have been Marathon.

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Speaker 4: Now this is on the back of their numbers. Many

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Speaker 4: worrying about the accounting practices and ultimately whether or not

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Speaker 4: they're just showing an uplift to their overall earnings because

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Speaker 4: they're able to show the current increase in value of

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Speaker 4: the underlying holdings a bitcoin. It's that some fifteen percent,

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Speaker 4: some an has felt that the numbers didn't hit their mark.

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Speaker 6: And remember these stocks have run up in recent weeks

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Speaker 6: and months.

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Speaker 4: We're looking also at r platforms on the downside by

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Speaker 4: more than nine percent, probably in sympathy with the other

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Speaker 4: miner that is Marathon. But it's notable that at the

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Speaker 4: moment ed there is this supply demand dynamic that just

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Speaker 4: seems to be working in bitcoin in particular's favor.

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Speaker 5: All right, let's keep digging into everything crypto and bringing

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Speaker 5: Van Spencer, co founder of the Web three focus venture

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Speaker 5: firm Framework Ventures one point four billion in assets under management.

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Speaker 5: You carry summed it up really nicely. First of all,

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Speaker 5: we've moved slightly beyond just bitcoin to a kind of

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Speaker 5: broader positivity in digital assets. And then the supply demand equation.

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Speaker 5: Just give me a health check right now of how

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Speaker 5: you feel. General sentiment is towards cryptocurrencies extremely positive, to

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Speaker 5: say the least.

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Speaker 9: I mean, if you think about the nine bitcoin ETFs

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Speaker 9: that are active right now, they're on pace to buy about.

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Speaker 5: A million bitcoin per year.

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Speaker 9: I have it up on my other screen, but there's

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Speaker 9: about one point nine million bitcoin total on all of

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Speaker 9: the exchanges worldwide, and so something's got to give. And

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Speaker 9: this is what's different in this cycle versus the previous cycles,

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Speaker 9: where you know, we didn't have Larry Fink buying eighty

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Speaker 9: five thousand bitcoin in the last twenty trading days, and

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Speaker 9: so these ETFs are a watershed moment. There are eleven

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Speaker 9: years in the making. That was when the first application

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Speaker 9: was filed, and we've got ether up next. It's a

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Speaker 9: May twenty ninth approval or deny update. We think it

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Speaker 9: will be approved. It's basically the same case, and it's

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Speaker 9: a much smaller and much more reflexive asset. And the

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Speaker 9: last thing I'll say is that there's a ton of

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Speaker 9: work that's happened since you know, the big crash that

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Speaker 9: happened in twenty twenty two. We've got DeFi really firing

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Speaker 9: starting to produce earnings. We've got gaming starting to bring

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Speaker 9: in a lot of people. The ecosystem is extremely coherent.

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Speaker 9: It's kind of hard to fade just all of the

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Speaker 9: work that's happened.

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Speaker 5: So I feel good you take on the face of it,

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Speaker 5: just the movement in bitcoin. But one of the things

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Speaker 5: we've been talking about this week is the offshoots right

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Speaker 5: to other let's call them asset classes, but take NFTs.

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Speaker 5: You look at the date of NFT volume in December,

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Speaker 5: really close correlation with Bitcoin. The reason I'm glad to

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Speaker 5: have you on the show, Vans is to me, it

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Speaker 5: seems like a lot of that is related to what's

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Speaker 5: happening in gaming, an area that your firm is really

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Speaker 5: focused on.

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Speaker 9: I mean, gaming is probably the most positive story in

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Speaker 9: crypto right now, and it's a story that's again been

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Speaker 9: years in the making. But all the games that were

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Speaker 9: funded in that twenty twenty one twenty twenty two run

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Speaker 9: have just started to launch, and one in particular, Pixels,

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Speaker 9: has about four hundred thousand daily active wallets. That's the

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Speaker 9: biggest blotching application by far right now in terms of

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Speaker 9: user count. And so we're moving kind of beyond this

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Speaker 9: prosumer you know, whale driven crypto economy into something that's

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Speaker 9: more mass market. And you know, people have been waiting

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Speaker 9: for that adoption moment, and I think it's coming. I

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Speaker 9: think it might already be here. And so you've got

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Speaker 9: all these different narratives really firing. The ETFs gaming DeFi

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Speaker 9: eth what's the bare case. I mean, maybe the ETF

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Speaker 9: inflows stop, but the vast majority of O RaaS have

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Speaker 9: not been able to allocate to these yet. And the

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Speaker 9: numbers that we hear are one to three percent. That's

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Speaker 9: what Fidelity says, you know, of the portfolio that you

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Speaker 9: should have in crypto, well, that equates to about one

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Speaker 9: hundred and fifty billion dollars coming into this space over

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Speaker 9: the next couple of years. And you know, we're one

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Speaker 9: of the larger asset managers in crypto framework is and

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Speaker 9: we've had the pleasure of buying you know, mid nine

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Speaker 9: figures of crypto over the past two years. And liquid

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Speaker 9: markets and this might sound strange, but it's actually hard

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Speaker 9: to get the coins. These markets are not as liquid

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Speaker 9: as people think. And so I think the open question

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Speaker 9: is kind of what happens when that money comes in

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Speaker 9: it could get, you know, wilder than people think.

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Speaker 10: It is.

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Speaker 5: My guess. I remember reading about you guys twenty twenty two.

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Speaker 5: Hannah Millo was writing about how you were raising money

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Speaker 5: at a time where everyone was raising money. You know,

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Speaker 5: that was happening. It did not happen in twenty twenty three.

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Speaker 5: Where are you focus now in the deploying of capital

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Speaker 5: and your your kind of appetite to raise more funds.

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Speaker 9: I don't know how much I can or cannot say

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Speaker 9: about you know, our raising plans.

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Speaker 5: It's just you and I on the show. Just give

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Speaker 5: us to meet those events.

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Speaker 9: Yeah, we raised four hundred million two weeks before Luna collapsed,

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Speaker 9: and so you can imagine what that was like. And

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Speaker 9: we spent that year buying you know, we called a

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Speaker 9: lot of the capital in that fund, and you know,

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Speaker 9: really nobody wanted to talk to us when we were

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Speaker 9: buying eight at one thousand, But at thirty five hundred.

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Speaker 9: People have now turned around and you know, all the

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Speaker 9: LPs are excited and there's a lot more interest in

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Speaker 9: this space. But let me put it in perspective for you.

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Speaker 9: I was at a pension fund conference this week. It

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Speaker 9: was a two day multi strategy multi asset class Pension

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Speaker 9: fund conference. The crypto people got one panel at eight

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Speaker 9: thirty in the morning, and you know, there's a ton

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Speaker 9: of interest, but the pension funds and the largest endowments

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Speaker 9: in the world are still behind on this stuff. And

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Speaker 9: I do think in the fullness of time, when you

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Speaker 9: look back and you think about what it might mean

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Speaker 9: to miss the birth of an acid class, especially into

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Speaker 9: an ETF style paradigm, a lot of those people are

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Speaker 9: going to be pretty upset and wondering what happened. So

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Speaker 9: I think we're early.

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Speaker 11: All right.

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Speaker 5: Framework VENs has co found event Spen, so really appreciate

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Speaker 5: having you on the show. I'm glad there were some

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Speaker 5: things you could time for talking tech. First off, Electronic

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Speaker 5: Art said yesterday that it would be cutting five percent

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Speaker 5: of its workforce that's about six hundred and seventy people,

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Speaker 5: due to shifting customer needs and a refocusing of the company.

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Speaker 5: Will also be halting development on a number of undisclosed

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Speaker 5: titles and pulling back on its real estate holding. CEO

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Speaker 5: Andrew Wilson told staff in a memo that the company

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Speaker 5: would be quote moving away from development of future licensed

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Speaker 5: ip that we do not believe will be successful in

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Speaker 5: our changing industry. EA joined Sony, Microsoft, ten Cents, Riot Games,

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Speaker 5: and other top studios and laying off employees as game

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Speaker 5: development costs increase and finance. The world's largest crypto exchange

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Speaker 5: said it recovered four point four billion dollars worth of

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Speaker 5: digital assets for its users who mishandled their deposits within

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Speaker 5: the past two years. Users can mishandle their funds in

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Speaker 5: a variety of ways, including entering incorrect wallet addresses, depositing

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Speaker 5: incompatible tokens, and problems from blockchain upgrades. That's according to

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Speaker 5: Thursday's report. The cryptocurrency exchange said it resolved more than

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Speaker 5: three hundred eighty one thousand cases of cryptocurrency that was

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Speaker 5: deposited by users but not credited in twenty twenty two

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Speaker 5: and twenty twenty three. Plus. Ali Barber is rolling out

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Speaker 5: its second major price cut for cloud services in years,

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Speaker 5: hoping to win back users from rivals like ten Cent

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Speaker 5: competing to provide tools critical to training AI. The Chinese

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Speaker 5: Internet Pioneer will slash prices starting Thursday on scores of

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Speaker 5: internet based services by as much as fifty five percent

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Speaker 5: or twenty percent on average. The cuts represent one of

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Speaker 5: the more aggressive moves by the company to stay ahead

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Speaker 5: of ten Cent and by do in the cloud business

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Speaker 5: and risk triggering a price war in what's already a

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Speaker 5: hotly contested set throughout in China. Caro, what are you Yeah, we.

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Speaker 4: Talking in contestant sectors and ones that well might be

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Speaker 4: feeling the heat.

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Speaker 6: Let's talk about streaming.

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Speaker 4: And focusing on Paramount says to see, actually a bit

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Speaker 4: of a reprieve today, up three point three percent off

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Speaker 4: the revenue for its direct to consumer streaming business Parwaermount

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Speaker 4: plus beat expectations room meg Intelligence analyst Keitha. Ranganathan joins

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Speaker 4: us now for more on the results, and well, there

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Speaker 4: was some optimism really showing there, but ultimately the revenues

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Speaker 4: the AD side still a cloud here.

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Speaker 3: Yeah, absolutely, Caroline. So you know you're right in terms

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Speaker 3: of the DTC business, which is the streaming business, there

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Speaker 3: were some green shoots there. I think overall what we

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Speaker 3: came off with was there are some tones of you know,

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Speaker 3: stabilization in Paramount's results. I'm just not sure that it's

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Speaker 3: going to be enough. You know, you do have the

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Speaker 3: linear TV business, which brings in about fifty five percent

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Speaker 3: of the revenue for the whole company almost ninety percent

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Speaker 3: of its profits though, so there's obviously a lot of

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Speaker 3: focus there, and that sector has just been so challenged

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Speaker 3: just with cord cutting and kind of this whole movement

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Speaker 3: to to streaming and you know, the movement of eyeballs

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Speaker 3: from linear TV networks to all of the digital platforms,

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Speaker 3: and so obviously the advertising dollars also moving away, so

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Speaker 3: that market has been under a lot of stress. TV

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Speaker 3: ads were down fifteen percent. You know, Paramount will get

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Speaker 3: the benefit in the first quarter with the Super Bowl.

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Speaker 3: There will be you know, some lingering benefits throughout the

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Speaker 3: year with the political ad cycle, but that's not going

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Speaker 3: to be enough because you know, the core advertising trends

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Speaker 3: remain very, very challenged, and so yeah, that was definitely

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Speaker 3: kind of that remains a pain point. But I think

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Speaker 3: the bright spot is that, you know, the streaming metrics

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Speaker 3: definitely look good.

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Speaker 5: There's a lot going on in the background with Paramount Gita,

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Speaker 5: and for me, it always comes back to the loss

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Speaker 5: in the streaming business was more narrow than expected, but

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Speaker 5: we don't have any better sense on how Paramount does

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Speaker 5: anything organically or inorganically to make that business profitable.

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Speaker 3: So they did articulate a strategy, and this was you know,

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Speaker 3: this was I think one of the things that investors

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Speaker 3: are kind of cheering a little bit this morning, because

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Speaker 3: they said that they are hoping to get to paramount

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Speaker 3: plus profitability domestic profitability by twenty twenty five. Now that's

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Speaker 3: the first time that they've actually given us a time frame. Yes,

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Speaker 3: losses have narrowed. They do seem to have some plans

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Speaker 3: in place for cutting down costs, for kind of optimizing

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Speaker 3: content costs across the board, both their linear TV networks

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Speaker 3: as well as streaming. Again, I'm not sure that's enough

439
00:21:25,520 --> 00:21:27,640
Speaker 3: to move the needle. We did see last week Warner

440
00:21:27,680 --> 00:21:31,959
Speaker 3: Brothers Discovery actually posting a modest profit in its streaming business,

441
00:21:32,240 --> 00:21:35,639
Speaker 3: but investors are still very, very skeptical that the profits

442
00:21:35,800 --> 00:21:39,880
Speaker 3: on the streaming side can actually completely offset the losses

443
00:21:40,280 --> 00:21:41,880
Speaker 3: on the linear TV side.

444
00:21:43,200 --> 00:21:46,280
Speaker 5: Cutting your way to profit. Bloomeg Intelligence analystsiter rang an

445
00:21:46,280 --> 00:21:55,679
Speaker 5: eighth and great to have you on the program. Welcome

446
00:21:55,720 --> 00:21:59,520
Speaker 5: back to bloomboag Technology. Ed love low here in San Francisco, Caroline.

447
00:21:59,160 --> 00:22:01,200
Speaker 4: Heid and Neo Les quick check on these markets said,

448
00:22:01,200 --> 00:22:04,960
Speaker 4: because today the PCE number that favored view of inflationary

449
00:22:04,960 --> 00:22:07,240
Speaker 4: pressures from the Federal Reserve was posted at eight thirty am,

450
00:22:07,520 --> 00:22:09,560
Speaker 4: and it was a relief it came in where expectations

451
00:22:09,600 --> 00:22:11,680
Speaker 4: were two point eight percent urinear growth in terms of

452
00:22:11,760 --> 00:22:14,639
Speaker 4: inflationary pressure, the Fed seeming right to be pausing on

453
00:22:14,760 --> 00:22:17,159
Speaker 4: any cuts. But that sort of relief that it came

454
00:22:17,240 --> 00:22:20,080
Speaker 4: in as expected means that tech stocks push higher, up

455
00:22:20,080 --> 00:22:22,600
Speaker 4: four tens a percent. Tenure yield comes down some three

456
00:22:22,640 --> 00:22:25,560
Speaker 4: basis points, but actually sort of moving aside from any

457
00:22:25,600 --> 00:22:28,199
Speaker 4: of the macro data points of late, Bitcoin has been

458
00:22:28,240 --> 00:22:30,520
Speaker 4: on its own role over the last few trading days

459
00:22:30,520 --> 00:22:32,479
Speaker 4: and weeks. As you know, we're currently at sixty two

460
00:22:33,080 --> 00:22:35,840
Speaker 4: and fifteen, so clearly really trying to eye that new

461
00:22:35,880 --> 00:22:38,720
Speaker 4: record high at supply demand dynamics continue. We'll dig into

462
00:22:38,760 --> 00:22:40,400
Speaker 4: that in a moment. Was one of our VC guests.

463
00:22:40,400 --> 00:22:42,399
Speaker 4: We're up two point eight percent. Move on and have

464
00:22:42,440 --> 00:22:44,560
Speaker 4: a look at some of the individual movers because earnings

465
00:22:44,600 --> 00:22:46,159
Speaker 4: have come thinking fast a lot for some of these

466
00:22:46,160 --> 00:22:48,200
Speaker 4: software AI players that I want to shine a light on.

467
00:22:48,560 --> 00:22:50,400
Speaker 6: OCTA massive move up some twenty percent.

468
00:22:50,440 --> 00:22:52,520
Speaker 4: Now, this company's been under duress, remember a breach that

469
00:22:52,560 --> 00:22:55,119
Speaker 4: happened recently. Now the numbers that came in from Octa

470
00:22:55,440 --> 00:22:57,920
Speaker 4: seemed to give analysts some reprieve. They seem to be

471
00:22:58,040 --> 00:23:00,560
Speaker 4: liking the fact that they're managing to upsale where they

472
00:23:00,600 --> 00:23:02,600
Speaker 4: think the price point for this particular company is going.

473
00:23:02,840 --> 00:23:05,080
Speaker 4: And subscriptions were sort of a relief over there, ju

474
00:23:05,160 --> 00:23:09,359
Speaker 4: A Lingo up twenty two percent. Absolutely rampant growth that

475
00:23:09,440 --> 00:23:11,680
Speaker 4: we're seeing at the moment in terms of revenues driving higher.

476
00:23:11,680 --> 00:23:13,960
Speaker 4: People wanting to be learning the languages on this particular

477
00:23:14,040 --> 00:23:17,639
Speaker 4: AI enabled platform. Maybe the Super Bowl advert did a

478
00:23:17,680 --> 00:23:19,640
Speaker 4: little bit as well. We're looking at C three AI

479
00:23:19,880 --> 00:23:23,480
Speaker 4: twenty four percent higher. This also a relief because many

480
00:23:23,560 --> 00:23:25,160
Speaker 4: had thought that maybe this had just been an AI

481
00:23:25,320 --> 00:23:27,920
Speaker 4: hype cycle. C THREEAI needed to prove that it's a

482
00:23:27,960 --> 00:23:30,800
Speaker 4: subscription growth was really there, and it is and many

483
00:23:30,840 --> 00:23:33,080
Speaker 4: an analyst therefore upgrading on the back of these numbers

484
00:23:33,119 --> 00:23:34,879
Speaker 4: as well. So some big moves in some of these

485
00:23:34,960 --> 00:23:36,399
Speaker 4: software and AI plays today ed.

486
00:23:37,320 --> 00:23:39,640
Speaker 5: All right, we have some breaking news crossing the Bloomberg

487
00:23:39,760 --> 00:23:42,320
Speaker 5: terminal and a red headline in the video games industry.

488
00:23:42,440 --> 00:23:46,840
Speaker 5: Swedish video games outfit Embracer is going to sell its

489
00:23:46,920 --> 00:23:51,399
Speaker 5: Saber subsidiary in a deal valued around five hundred million

490
00:23:51,520 --> 00:23:56,080
Speaker 5: US dollars that according to a Bloomberg source. Let's bring

491
00:23:56,119 --> 00:23:59,280
Speaker 5: in the reporter that just broke that story for Bloomberg,

492
00:23:59,359 --> 00:24:03,040
Speaker 5: Jason strud This is an interesting one. I'm familiar with

493
00:24:03,119 --> 00:24:06,040
Speaker 5: the names because I'm a longtime fan and player of

494
00:24:06,119 --> 00:24:08,359
Speaker 5: Knights of the Old Republic, the Star Wars Going We

495
00:24:08,440 --> 00:24:11,280
Speaker 5: used to play on PC, the OG and the second version.

496
00:24:11,600 --> 00:24:14,720
Speaker 5: Tell us about the deal you're reporting on. Yeah, So

497
00:24:15,200 --> 00:24:16,320
Speaker 5: it's happening as we speak.

498
00:24:16,440 --> 00:24:19,800
Speaker 1: So this is going to be announced in a in

499
00:24:19,920 --> 00:24:23,520
Speaker 1: the next week or two that Embracer Group is selling. Essentially, Saber,

500
00:24:23,560 --> 00:24:25,399
Speaker 1: which is a big subsidiary of Embracer Group, is going

501
00:24:25,440 --> 00:24:26,040
Speaker 1: to go private.

502
00:24:26,119 --> 00:24:27,400
Speaker 5: So a little bit of context here.

503
00:24:27,760 --> 00:24:30,760
Speaker 1: Embracer Group is the Swedish gaming conglomerate that made a

504
00:24:30,840 --> 00:24:32,560
Speaker 1: lot of headlines a couple of years ago because it

505
00:24:32,640 --> 00:24:35,919
Speaker 1: was buying up companies all across the video game industry,

506
00:24:36,000 --> 00:24:39,560
Speaker 1: a huge spending spree back in the halcyon days of

507
00:24:39,640 --> 00:24:40,760
Speaker 1: twenty twenty one, when the.

508
00:24:40,800 --> 00:24:42,960
Speaker 5: Interest rates were low and buying was easy.

509
00:24:43,200 --> 00:24:45,520
Speaker 1: But of course things have changed and Embraser Group has

510
00:24:45,560 --> 00:24:48,120
Speaker 1: since embarked on a cost cutting initiative that has led

511
00:24:48,160 --> 00:24:50,800
Speaker 1: to carnage across the video game industry and has shut

512
00:24:50,840 --> 00:24:53,920
Speaker 1: down studios, laid people off, and now it's just looking

513
00:24:54,000 --> 00:24:55,520
Speaker 1: to shed costs whenever possible.

514
00:24:55,600 --> 00:24:58,200
Speaker 5: This is the latest move on that front.

515
00:24:59,119 --> 00:25:02,280
Speaker 4: And overall, well, when you see these cancelation of projects,

516
00:25:02,320 --> 00:25:05,520
Speaker 4: when you see ultimately companies doing deals like this, does

517
00:25:05,560 --> 00:25:07,680
Speaker 4: it speak to some of the pressure points that we

518
00:25:07,720 --> 00:25:09,160
Speaker 4: sing across the entire industry?

519
00:25:10,600 --> 00:25:11,280
Speaker 5: It definitely does.

520
00:25:11,400 --> 00:25:13,639
Speaker 1: And yes, just this year, this week alone, I mean

521
00:25:13,720 --> 00:25:16,160
Speaker 1: we've just seen it's been a bloodbath. Sony has laid

522
00:25:16,280 --> 00:25:18,960
Speaker 1: off nine hundred people. EA just said last night it

523
00:25:19,040 --> 00:25:21,520
Speaker 1: was laying off more than six hundred people. Yeah, we're

524
00:25:21,520 --> 00:25:23,359
Speaker 1: seeing our climate a lot of it. There are a

525
00:25:23,359 --> 00:25:25,880
Speaker 1: few factors behind all of these layoffs, but I think

526
00:25:25,920 --> 00:25:28,560
Speaker 1: the biggest one is that during the pandemic, when there

527
00:25:28,640 --> 00:25:30,760
Speaker 1: was a lot of growth in the video game industry,

528
00:25:30,800 --> 00:25:33,679
Speaker 1: a lot of these companies just swelled, they bloated, they

529
00:25:33,880 --> 00:25:36,600
Speaker 1: hired too many people. And now they are kind of

530
00:25:37,000 --> 00:25:39,679
Speaker 1: they're facing the math. They are looking at the numbers.

531
00:25:39,720 --> 00:25:41,680
Speaker 1: The numbers have gone down a little bit. The growth

532
00:25:41,720 --> 00:25:44,360
Speaker 1: hasn't been quite what it was when everybody was stuck

533
00:25:44,400 --> 00:25:47,640
Speaker 1: at home playing video games. But the overhiring is still

534
00:25:47,760 --> 00:25:50,960
Speaker 1: there and as always happens to people who actually made

535
00:25:51,000 --> 00:25:53,439
Speaker 1: those decisions that are sticking around. It's the people who

536
00:25:53,480 --> 00:25:55,720
Speaker 1: got hired who are suffering as a result of this.

537
00:25:56,760 --> 00:25:59,919
Speaker 5: Adjacent the other top story that our alreadience is following

538
00:26:00,400 --> 00:26:04,399
Speaker 5: is rock Star Games, the studio behind graand Theft Auto,

539
00:26:05,680 --> 00:26:09,400
Speaker 5: telling its employees, according to your reporting, to come back

540
00:26:09,440 --> 00:26:12,480
Speaker 5: to the office five days a week starting in April.

541
00:26:12,840 --> 00:26:17,280
Speaker 5: What do you know about the decisions behind that move. Yeah,

542
00:26:17,400 --> 00:26:19,760
Speaker 5: it's interesting. I think that in a lot of industries.

543
00:26:19,800 --> 00:26:22,000
Speaker 1: A lot of industries obviously are grappling with this question

544
00:26:22,119 --> 00:26:25,440
Speaker 1: of returning to the office after employees have gotten used

545
00:26:25,440 --> 00:26:29,440
Speaker 1: to either working hybrid or working remotely. With the gaming industry,

546
00:26:29,600 --> 00:26:31,600
Speaker 1: it's kind of it plays off on the topic we

547
00:26:31,680 --> 00:26:34,040
Speaker 1: were just talking about, because the volatility of the video

548
00:26:34,080 --> 00:26:37,600
Speaker 1: game industry is such that people have to uproot their

549
00:26:37,680 --> 00:26:40,720
Speaker 1: lives constantly for new jobs, and so remote work is

550
00:26:41,240 --> 00:26:43,399
Speaker 1: very much a shield against that volatility. And so for

551
00:26:43,480 --> 00:26:45,400
Speaker 1: a company like Rockstar, which is one of the leading

552
00:26:45,480 --> 00:26:48,200
Speaker 1: video game developers, to come out and say, hey, we

553
00:26:48,320 --> 00:26:50,240
Speaker 1: need you all to come in five days a week

554
00:26:51,119 --> 00:26:53,800
Speaker 1: really strikes kind of It's a big contrast between what

555
00:26:53,880 --> 00:26:59,679
Speaker 1: we're seeing elsewhere. Yeah, Rockstar, they're Rationale here. It's largely

556
00:26:59,720 --> 00:27:03,159
Speaker 1: because of security, and so they've suffered from some huge

557
00:27:03,320 --> 00:27:05,879
Speaker 1: leaks of the next Grand Theft Auto game. There was

558
00:27:05,920 --> 00:27:08,120
Speaker 1: one in twenty twenty two where a bunch of footage,

559
00:27:08,160 --> 00:27:10,280
Speaker 1: early footage from the game got leaked and dropped on

560
00:27:10,320 --> 00:27:13,200
Speaker 1: the internet. And then last year, last December, just a

561
00:27:13,240 --> 00:27:15,120
Speaker 1: couple of months ago, and they were planning on releasing

562
00:27:15,200 --> 00:27:19,200
Speaker 1: their latest their new trailer, their first trailer for GTA six.

563
00:27:19,960 --> 00:27:22,560
Speaker 1: It was actually leaked on Twitter a few hours before

564
00:27:22,560 --> 00:27:25,920
Speaker 1: it was due to go up. It was pretty ridiculous. Actually,

565
00:27:25,960 --> 00:27:27,879
Speaker 1: it was leaked with like a giant chiron in the

566
00:27:27,920 --> 00:27:31,520
Speaker 1: middle saying by Bitcoin. It was very very bizarre sequence

567
00:27:31,560 --> 00:27:33,920
Speaker 1: of events. The game was the game is set in Florida.

568
00:27:34,080 --> 00:27:36,320
Speaker 1: I joked at the time that it's the most Florida

569
00:27:36,440 --> 00:27:38,920
Speaker 1: thing ever for the game to leak in that fashion.

570
00:27:39,000 --> 00:27:41,360
Speaker 1: But this is one of the main reasons that they're

571
00:27:41,440 --> 00:27:43,880
Speaker 1: doing this return to office because they believe that their

572
00:27:44,240 --> 00:27:47,480
Speaker 1: security was compromised as a result of people working remotely.

573
00:27:47,880 --> 00:27:50,080
Speaker 6: What's interesting, though, is we've seen it at other tech companies.

574
00:27:50,119 --> 00:27:52,560
Speaker 4: I think of Grinder, who said look, come back to

575
00:27:52,640 --> 00:27:55,879
Speaker 4: the office, and it actually helps them reduce their workforce

576
00:27:56,000 --> 00:27:58,640
Speaker 4: with a more of a natural attrition version, because they're like, look,

577
00:27:58,640 --> 00:27:59,879
Speaker 4: if you're not going to buy by some of a

578
00:28:00,800 --> 00:28:02,480
Speaker 4: you need not come back. Is that kind of what's

579
00:28:02,520 --> 00:28:04,280
Speaker 4: playing into this as well, Jason, even though they are

580
00:28:04,320 --> 00:28:05,560
Speaker 4: playing up the security side.

581
00:28:06,400 --> 00:28:09,520
Speaker 1: That is extremely an extremely common theory, I will say,

582
00:28:09,600 --> 00:28:11,840
Speaker 1: and I've heard that not just attached to Rockstar, but

583
00:28:11,960 --> 00:28:14,639
Speaker 1: also to a bunch of other companies. Lizard last year

584
00:28:14,840 --> 00:28:17,399
Speaker 1: was big on return to office and one of the

585
00:28:17,480 --> 00:28:19,120
Speaker 1: theories was, hey, is this just kind.

586
00:28:19,040 --> 00:28:19,959
Speaker 5: Of a soft layoff?

587
00:28:20,080 --> 00:28:21,600
Speaker 1: Is this a way that we can lay people off

588
00:28:21,680 --> 00:28:24,280
Speaker 1: without actually laying people off because we know that X

589
00:28:24,320 --> 00:28:27,840
Speaker 1: percent of people will leave when they're forced with the

590
00:28:27,920 --> 00:28:29,680
Speaker 1: prospect of having to go back to the office five

591
00:28:29,720 --> 00:28:30,160
Speaker 1: days a week.

592
00:28:30,200 --> 00:28:31,520
Speaker 5: So very common theory.

593
00:28:31,840 --> 00:28:34,960
Speaker 1: I don't have anything that can prove that, but it's

594
00:28:35,000 --> 00:28:37,919
Speaker 1: certainly logical, Jason Shyer.

595
00:28:38,600 --> 00:28:41,480
Speaker 4: Brilliant to have you across what is a very talkt

596
00:28:41,520 --> 00:28:44,640
Speaker 4: of industry group today, across all of the different companies

597
00:28:44,960 --> 00:28:45,680
Speaker 4: moving and shaking me.

598
00:28:45,760 --> 00:28:46,400
Speaker 6: Thank you so much.

599
00:28:46,480 --> 00:28:48,960
Speaker 4: Meanwhile, let's turn to Apple for a moment, because well,

600
00:28:48,960 --> 00:28:51,720
Speaker 4: there's not some great price point action happening over in China.

601
00:28:51,880 --> 00:28:55,400
Speaker 4: Resellers slashing the price of the iPhone fifteen models get

602
00:28:55,440 --> 00:28:56,920
Speaker 4: this by as much as one hundred and eighty dollars,

603
00:28:57,040 --> 00:28:58,920
Speaker 4: and it all seems to signal that we've got an

604
00:28:59,000 --> 00:29:02,520
Speaker 4: unusually prolonged slump in demand and ed, this is more

605
00:29:02,600 --> 00:29:03,160
Speaker 4: than we're used to.

606
00:29:03,360 --> 00:29:04,040
Speaker 6: What took my.

607
00:29:04,160 --> 00:29:06,560
Speaker 4: Attention was it actually some of this as dressed up

608
00:29:06,600 --> 00:29:09,560
Speaker 4: as well deals to be made before International Women's Day.

609
00:29:09,640 --> 00:29:12,160
Speaker 4: I haven't seen many deals being made my way for

610
00:29:12,320 --> 00:29:15,600
Speaker 4: International Women's Day next week for objects to be cheaper

611
00:29:15,680 --> 00:29:17,840
Speaker 4: than usual, but the fact that one hundred and eighty

612
00:29:17,880 --> 00:29:19,760
Speaker 4: dollars does seem to be more than we usually see

613
00:29:19,800 --> 00:29:21,400
Speaker 4: at this time of year in the lunar holidays.

614
00:29:22,040 --> 00:29:24,520
Speaker 5: Yeah, there are different data sets that you can point

615
00:29:24,560 --> 00:29:26,600
Speaker 5: to and try and draw a conclusion. The main one

616
00:29:26,680 --> 00:29:29,040
Speaker 5: that the Bloomberg focuses on in the story Carro is

617
00:29:29,120 --> 00:29:32,760
Speaker 5: that iPhone fifteen sales are just not doing as well

618
00:29:32,800 --> 00:29:35,959
Speaker 5: as prior generations the iPhone fourteen in China, so an

619
00:29:35,960 --> 00:29:37,800
Speaker 5: Ali barber's team or you can get one hundred and

620
00:29:37,800 --> 00:29:40,680
Speaker 5: eighty dollars discount, but the difference this time around this

621
00:29:40,880 --> 00:29:44,880
Speaker 5: year more domestic pressure right a handset from Huawei, you know,

622
00:29:45,000 --> 00:29:46,400
Speaker 5: in the marketplace, and.

623
00:29:46,480 --> 00:29:47,880
Speaker 6: Those headwinds just continue.

624
00:29:48,120 --> 00:29:50,560
Speaker 4: We talk about some of the geopolitical tensions that have

625
00:29:50,640 --> 00:29:53,400
Speaker 4: effect of course a supply side chain of Apple and

626
00:29:53,520 --> 00:29:56,160
Speaker 4: more broadly demand too. We've got to think that there's

627
00:29:56,200 --> 00:29:59,920
Speaker 4: been this government not perhaps the pr around it is

628
00:30:00,120 --> 00:30:03,520
Speaker 4: been difficult to find the nuance, but ultimately governments or

629
00:30:03,880 --> 00:30:06,080
Speaker 4: government affiliated companies not wanting you to bring in your

630
00:30:06,080 --> 00:30:08,800
Speaker 4: Apple phone, wanting you to buy local, and Huilewey of

631
00:30:08,840 --> 00:30:11,040
Speaker 4: course bringing out this incredibly powerful rival.

632
00:30:12,280 --> 00:30:16,200
Speaker 5: The conclusion that Bloomberg Intelligence anlysts reach, it implies weakness

633
00:30:16,280 --> 00:30:19,479
Speaker 5: in China. Okay, coming up on Bloomberg technology, how New

634
00:30:19,560 --> 00:30:22,400
Speaker 5: York City might be poised to be the next major

635
00:30:22,520 --> 00:30:25,080
Speaker 5: AI hub. That's according to Lux Capital. We're going to

636
00:30:25,080 --> 00:30:28,760
Speaker 5: discuss with partner Grace Isford. That's next, Carol, what's happening

637
00:30:28,800 --> 00:30:29,360
Speaker 5: in the markets.

638
00:30:29,520 --> 00:30:32,080
Speaker 4: We're just going back to Apple for a moment, because

639
00:30:32,120 --> 00:30:35,320
Speaker 4: this is a European related company, a Swiss chip maker

640
00:30:35,360 --> 00:30:38,320
Speaker 4: in fact, absolutely plunging as you can see in European

641
00:30:38,400 --> 00:30:39,560
Speaker 4: trading after.

642
00:30:39,400 --> 00:30:40,280
Speaker 6: A major customer.

643
00:30:40,360 --> 00:30:43,600
Speaker 4: Now analysts believe this customer to be Apple ed canceled

644
00:30:43,720 --> 00:30:47,640
Speaker 4: the chip maker's key project around micro LEDs. So as

645
00:30:47,720 --> 00:30:49,920
Speaker 4: this is a result impactment charges of up to nine

646
00:30:50,040 --> 00:30:52,920
Speaker 4: hundred million euros. You can see the impact on that

647
00:30:53,000 --> 00:30:55,480
Speaker 4: two day chart from New York, from San Francisco, this

648
00:30:55,560 --> 00:31:09,560
Speaker 4: is Bloomberg Technology. Well you just saw that magnovograts is

649
00:31:09,600 --> 00:31:11,440
Speaker 4: going to be on Bloomberg in a little while. And

650
00:31:11,840 --> 00:31:14,000
Speaker 4: well that's because we're talking about crypto a lot at

651
00:31:14,000 --> 00:31:16,360
Speaker 4: the moment. Bitcoin of course having quite the tear forty

652
00:31:16,400 --> 00:31:18,520
Speaker 4: two percent on the nose over the last trading days

653
00:31:18,800 --> 00:31:20,600
Speaker 4: of thirty days. And this is of course as we

654
00:31:20,680 --> 00:31:23,880
Speaker 4: see demand supply ultimate imbalance, as we start to see

655
00:31:24,120 --> 00:31:27,000
Speaker 4: the ETFs come to bear, and notably some of the

656
00:31:27,120 --> 00:31:30,320
Speaker 4: talk of halving hamp maoning in April, someone who basically

657
00:31:30,400 --> 00:31:32,680
Speaker 4: is at the intersection everything we're talking about at the moment,

658
00:31:32,720 --> 00:31:35,120
Speaker 4: whether it's the nexus of web three, also of data

659
00:31:35,200 --> 00:31:38,840
Speaker 4: infrastructure of AIML is Lux Capital partner Grace Isford, who

660
00:31:38,920 --> 00:31:42,080
Speaker 4: joins us now for VC Spotlight. And what's so interesting

661
00:31:42,240 --> 00:31:45,320
Speaker 4: is you were sort of very highly focused on what

662
00:31:45,480 --> 00:31:47,680
Speaker 4: now seems to be all of our talking points at

663
00:31:47,720 --> 00:31:49,640
Speaker 4: the moment when you first came to Lux in twenty

664
00:31:49,680 --> 00:31:52,280
Speaker 4: twenty two, having been at canvas before that what are

665
00:31:52,280 --> 00:31:54,440
Speaker 4: you making of the ecosystem in crypto when you're looking

666
00:31:54,440 --> 00:31:56,800
Speaker 4: at putting VC dollars to work? Because yes, we can

667
00:31:56,880 --> 00:31:58,480
Speaker 4: all think of it as some sort of asset that

668
00:31:58,560 --> 00:32:01,520
Speaker 4: we can track and better and speculate, But what is

669
00:32:01,600 --> 00:32:04,120
Speaker 4: the underlying building of infrastructure looking like right now?

670
00:32:04,400 --> 00:32:06,600
Speaker 10: Ironically, it's the same building blocks for both. You know,

671
00:32:06,680 --> 00:32:10,000
Speaker 10: who are the innovative technologists who are taking you know,

672
00:32:10,040 --> 00:32:13,280
Speaker 10: cutting edge fundational principles, whether it's in cryptography or whether

673
00:32:13,320 --> 00:32:16,000
Speaker 10: it's in applied machine learning, and taking that to solve

674
00:32:16,000 --> 00:32:18,640
Speaker 10: a real problem for the end users. So, both the

675
00:32:18,680 --> 00:32:20,560
Speaker 10: B to B infrastructure on the crypto side and the

676
00:32:20,600 --> 00:32:23,040
Speaker 10: B to B infrastructure on the AI side, we continue

677
00:32:23,040 --> 00:32:24,720
Speaker 10: to see a lot of exciting innovation.

678
00:32:25,160 --> 00:32:27,440
Speaker 4: Okay, well, let's talk about the practical innovations that are

679
00:32:27,480 --> 00:32:30,200
Speaker 4: being built. Maybe here you've just been to San Francisco.

680
00:32:30,880 --> 00:32:33,719
Speaker 4: There's a lot of talk actually of how cryptography can

681
00:32:33,760 --> 00:32:36,840
Speaker 4: be an answer to compute and access to compute when

682
00:32:36,880 --> 00:32:40,160
Speaker 4: we are thinking of large language models and machine learning.

683
00:32:40,280 --> 00:32:41,800
Speaker 6: Is that something you're seeing being solved for at the

684
00:32:41,840 --> 00:32:42,720
Speaker 6: moment in both places?

685
00:32:42,880 --> 00:32:45,920
Speaker 10: Well, certainly, actually, take our lex Portfolio company together AI.

686
00:32:46,040 --> 00:32:47,920
Speaker 10: We actually led the seed in that company. They're based

687
00:32:47,960 --> 00:32:50,840
Speaker 10: in San Francisco, but they're chief scientists Tredoo. He's actually

688
00:32:50,920 --> 00:32:52,840
Speaker 10: moving to New York to be an assistant professor at

689
00:32:52,880 --> 00:32:54,760
Speaker 10: Princeton and love to talk a little bit more about

690
00:32:54,760 --> 00:32:56,720
Speaker 10: the New York theme there. But they are actually having

691
00:32:56,840 --> 00:33:00,320
Speaker 10: decentralized compute in many ways versus using a centralized cloud

692
00:33:00,360 --> 00:33:03,320
Speaker 10: provider in order to power that AI infrastructure stack.

693
00:33:04,440 --> 00:33:07,560
Speaker 5: Great, let's have a little bit of healthy competition between cities,

694
00:33:07,600 --> 00:33:12,640
Speaker 5: shall we. This week we published a documentary called Welcome

695
00:33:12,720 --> 00:33:15,360
Speaker 5: to Cerebral Valley. And as you know, like right now,

696
00:33:15,480 --> 00:33:19,240
Speaker 5: the line share of dollar or intellectual capital is here,

697
00:33:19,800 --> 00:33:23,440
Speaker 5: but New York is growing both on the personnel side

698
00:33:23,480 --> 00:33:27,440
Speaker 5: and attracting more dollars. What is lux Capital's attitude.

699
00:33:27,000 --> 00:33:30,280
Speaker 10: Towards that the AI demand is unprecedented, both in San

700
00:33:30,320 --> 00:33:31,960
Speaker 10: Francisco and New York, and I think you're going to

701
00:33:32,000 --> 00:33:35,120
Speaker 10: see continued growth in both cities. Right sfal Continua Hub.

702
00:33:35,400 --> 00:33:37,880
Speaker 10: New York is a really exciting and growing hub, both

703
00:33:37,920 --> 00:33:40,480
Speaker 10: because of the demand we have here. Forty four of

704
00:33:40,560 --> 00:33:43,640
Speaker 10: Fortune five hundred companies are headquartered right here in New York.

705
00:33:43,880 --> 00:33:45,880
Speaker 10: There was a recent Unicorn Report where the number of

706
00:33:46,000 --> 00:33:48,640
Speaker 10: unicorns in New York grows from three to one hundred

707
00:33:48,720 --> 00:33:51,640
Speaker 10: over the last ten years. And you're seeing huge industries here,

708
00:33:51,880 --> 00:33:54,760
Speaker 10: whether it's financial services or media. As it retains to

709
00:33:54,800 --> 00:33:57,960
Speaker 10: New York specifically, there's a great talent be here. I

710
00:33:58,080 --> 00:34:00,880
Speaker 10: just mentioned tread out from Together actually as moving here

711
00:34:00,920 --> 00:34:04,160
Speaker 10: to New York. We've also seen several other great AI

712
00:34:04,280 --> 00:34:07,600
Speaker 10: labs world class right here in New York. Nyu Jan Lacun,

713
00:34:07,800 --> 00:34:11,239
Speaker 10: He's the chief medice scientist at Meta. He's also here

714
00:34:11,280 --> 00:34:14,040
Speaker 10: in New York, and the Princeton and Columbia and Cornell

715
00:34:14,120 --> 00:34:15,080
Speaker 10: labs are are bustling.

716
00:34:16,080 --> 00:34:18,680
Speaker 5: One of the surprising headlines that caught my eye in

717
00:34:18,719 --> 00:34:21,239
Speaker 5: the last couple of days was Jamie Diamond of all

718
00:34:21,320 --> 00:34:24,920
Speaker 5: people saying that mayor's in Texas will phone them up

719
00:34:24,960 --> 00:34:27,160
Speaker 5: and say what can we do to get more business?

720
00:34:27,680 --> 00:34:30,600
Speaker 5: But you know, officials in New York City, according to

721
00:34:30,680 --> 00:34:33,480
Speaker 5: Jamie Diamond, and not as business friendly. What is your

722
00:34:33,560 --> 00:34:35,879
Speaker 5: kind of boots on the ground experience of that. From

723
00:34:35,960 --> 00:34:38,600
Speaker 5: kind of a host city perspective.

724
00:34:38,520 --> 00:34:40,759
Speaker 10: I've been seeing bustling innovation and I've been seeing a

725
00:34:40,760 --> 00:34:42,680
Speaker 10: lot of people choosing to live in New York because

726
00:34:42,680 --> 00:34:45,200
Speaker 10: they want to live here and going through whatever hoops

727
00:34:45,200 --> 00:34:47,440
Speaker 10: they need to do to build an awesome company here. So,

728
00:34:47,520 --> 00:34:50,280
Speaker 10: whether that's getting great talent out of major tech companies,

729
00:34:50,440 --> 00:34:52,359
Speaker 10: whether that's getting a lot of new grads. We saw

730
00:34:52,440 --> 00:34:54,919
Speaker 10: a six x increase in applicants according to a recent

731
00:34:55,000 --> 00:34:57,680
Speaker 10: Handshag report over the last five years, wanting to move here.

732
00:34:57,880 --> 00:34:59,919
Speaker 10: And we see a lot of international talent, right folks

733
00:35:00,000 --> 00:35:02,560
Speaker 10: iming from Europe, both coming from Israel, all moving right

734
00:35:02,600 --> 00:35:03,560
Speaker 10: here to New York City.

735
00:35:04,239 --> 00:35:07,400
Speaker 4: What often will be said to some of the vcs

736
00:35:07,480 --> 00:35:09,600
Speaker 4: that I speak to us chatting with able partners, for

737
00:35:09,640 --> 00:35:13,120
Speaker 4: example yesterday, is that what New York has going through it,

738
00:35:13,280 --> 00:35:15,520
Speaker 4: even if it's not comparable in terms of the share

739
00:35:15,560 --> 00:35:17,880
Speaker 4: scale of money being raised quite yet or deployed here

740
00:35:18,440 --> 00:35:22,200
Speaker 4: is diversity. And we have different industry groups here. It's

741
00:35:22,239 --> 00:35:23,839
Speaker 4: interesting that a lot of the companies that you're backing

742
00:35:23,920 --> 00:35:25,759
Speaker 4: seem to be in image generation, seem to be in

743
00:35:26,040 --> 00:35:29,080
Speaker 4: sort of the advertising creative space.

744
00:35:29,160 --> 00:35:31,240
Speaker 6: I think a Runway, for example, well.

745
00:35:31,160 --> 00:35:33,360
Speaker 10: Runway right based here in New York, looks partnered and

746
00:35:33,520 --> 00:35:36,000
Speaker 10: led the theory feed in that company. They are working

747
00:35:36,080 --> 00:35:38,719
Speaker 10: hand in hand with filmmakers and with producers right in

748
00:35:38,760 --> 00:35:40,839
Speaker 10: their offices in New York City, and so they're working

749
00:35:41,040 --> 00:35:43,719
Speaker 10: not just to add AI as a side thing to

750
00:35:43,800 --> 00:35:46,840
Speaker 10: their workflows, but integrate it directly into their workflow. And

751
00:35:46,880 --> 00:35:48,719
Speaker 10: you've seen a lot of success with that, working with

752
00:35:48,800 --> 00:35:51,800
Speaker 10: both for five hundred companies and those filmmakers in production.

753
00:35:52,400 --> 00:35:55,400
Speaker 4: And I'm pretty sure a little bit of healthy nervousness

754
00:35:55,600 --> 00:35:58,399
Speaker 4: coming from those industry groups that are seeing themselves being

755
00:35:58,560 --> 00:36:01,439
Speaker 4: well and many would say disrupt by the pace of AI.

756
00:36:01,960 --> 00:36:03,800
Speaker 4: Gratis Fords, So great to have her on just on

757
00:36:03,880 --> 00:36:05,920
Speaker 4: the nexus of everything that's happening in a world at

758
00:36:05,960 --> 00:36:08,600
Speaker 4: the moment, Lu's capital partner, and we're talking at to

759
00:36:08,640 --> 00:36:11,239
Speaker 4: you about well another portfolio company of their right now.

760
00:36:12,280 --> 00:36:15,399
Speaker 5: Yeah, Hugging Face. And actually, as a reminder, the big

761
00:36:15,440 --> 00:36:18,479
Speaker 5: story we've been tracking this week is the fallout from

762
00:36:18,640 --> 00:36:23,719
Speaker 5: Gemini alphabet or Google's generatorve AI text and image generating

763
00:36:23,880 --> 00:36:27,480
Speaker 5: tool that has come in for criticism and elicited a

764
00:36:27,600 --> 00:36:32,080
Speaker 5: response from Sunder Pitchi, the CEO of Google, who called

765
00:36:32,239 --> 00:36:36,000
Speaker 5: some of the deficiencies unacceptable. Let's bring in Hugging Face

766
00:36:36,120 --> 00:36:40,000
Speaker 5: Research and chief ethics scientists Margaret Mitchell Murrett. You have

767
00:36:40,080 --> 00:36:43,840
Speaker 5: your own history with the academic body of Google that

768
00:36:43,920 --> 00:36:47,040
Speaker 5: we can get into. But yeah, that's right. We're showing

769
00:36:47,160 --> 00:36:52,080
Speaker 5: Sunder pitch Eye's statement right now about what happened with Gemini.

770
00:36:52,560 --> 00:36:54,040
Speaker 5: The reason we really want to get you on the

771
00:36:54,080 --> 00:36:58,960
Speaker 5: show is can this be fixed technologically speaking in the

772
00:36:59,040 --> 00:36:59,560
Speaker 5: short term?

773
00:37:00,760 --> 00:37:01,839
Speaker 6: Yeah, it actually can.

774
00:37:02,000 --> 00:37:04,760
Speaker 11: So there's a few different approaches to handling the different

775
00:37:04,760 --> 00:37:06,760
Speaker 11: ways that people are going to be using these systems,

776
00:37:07,080 --> 00:37:09,160
Speaker 11: and one is to have a bunch of different models

777
00:37:09,239 --> 00:37:12,800
Speaker 11: under the hood that end up figuring out what different

778
00:37:12,880 --> 00:37:18,000
Speaker 11: users intent is and providing different kinds of responses based

779
00:37:18,040 --> 00:37:19,239
Speaker 11: on what the user intent is.

780
00:37:19,560 --> 00:37:20,759
Speaker 6: So it should be fixable.

781
00:37:21,239 --> 00:37:23,120
Speaker 11: I'm a little surprised it's taking so long, but I

782
00:37:23,160 --> 00:37:23,759
Speaker 11: guess we'll see.

783
00:37:26,080 --> 00:37:28,800
Speaker 5: What I'm trying to reconcile in my mind is that

784
00:37:29,120 --> 00:37:33,320
Speaker 5: Google is at the origin story of artificial intelligence, the

785
00:37:33,360 --> 00:37:36,800
Speaker 5: body of R and D or academic work that happened

786
00:37:37,080 --> 00:37:39,320
Speaker 5: more than a decade ago. How do we get to

787
00:37:39,440 --> 00:37:43,680
Speaker 5: this point where they publish a tool where there is

788
00:37:43,760 --> 00:37:48,040
Speaker 5: clear evidence that the model has some deficiencies and evidence

789
00:37:48,080 --> 00:37:48,719
Speaker 5: of biases.

790
00:37:50,040 --> 00:37:53,080
Speaker 11: Yeah, I mean, we've seen Google laying off a lot

791
00:37:53,120 --> 00:37:58,680
Speaker 11: of people, laying off people who are experts in AI ethics,

792
00:37:58,680 --> 00:38:01,279
Speaker 11: which really helps with the kind of issues that they're

793
00:38:01,360 --> 00:38:04,320
Speaker 11: seeing now. I think that Google might be playing a

794
00:38:04,360 --> 00:38:08,160
Speaker 11: bit of catch up, sort of trying to release things

795
00:38:08,280 --> 00:38:12,279
Speaker 11: perhaps before they're fully ready, and also not necessarily having

796
00:38:12,320 --> 00:38:14,880
Speaker 11: the right people at the table to make the decisions.

797
00:38:15,640 --> 00:38:17,600
Speaker 11: So Google's in a very different position than it was,

798
00:38:17,680 --> 00:38:18,759
Speaker 11: you know, twenty years ago.

799
00:38:19,719 --> 00:38:22,279
Speaker 4: It's worth saying what side of the table you're coming

800
00:38:22,320 --> 00:38:24,640
Speaker 4: from and your history with Google, because of course you

801
00:38:25,000 --> 00:38:28,080
Speaker 4: co led Google's ethical AI team.

802
00:38:28,440 --> 00:38:30,439
Speaker 6: You step down from that group.

803
00:38:30,520 --> 00:38:32,759
Speaker 4: You're priate previously of course over at Microsoft, I mean

804
00:38:32,760 --> 00:38:34,960
Speaker 4: you've been everywhere. You've moved over to hugging face to

805
00:38:35,000 --> 00:38:37,880
Speaker 4: really drive the ethical perspective at that particular part of

806
00:38:37,920 --> 00:38:40,759
Speaker 4: the business. But I'm interested is to the lackings, the

807
00:38:40,800 --> 00:38:42,840
Speaker 4: failings that you saw a couple of years ago that

808
00:38:43,800 --> 00:38:45,800
Speaker 4: drew your criticism and ultimately.

809
00:38:45,400 --> 00:38:46,280
Speaker 6: As you left Google.

810
00:38:47,239 --> 00:38:49,600
Speaker 4: Is that what's the edge hit When I think about

811
00:38:49,640 --> 00:38:51,400
Speaker 4: the some of the issues that you say as to

812
00:38:51,520 --> 00:38:54,160
Speaker 4: why this isn't getting fixed as quickly it seems to

813
00:38:54,200 --> 00:38:57,000
Speaker 4: be from you your perspective, A question of personnel here

814
00:38:57,080 --> 00:39:01,240
Speaker 4: and who's got the power to make decisions right right, Yeah.

815
00:39:01,120 --> 00:39:04,640
Speaker 11: It's completely an issue of who's at the table. I mean,

816
00:39:04,719 --> 00:39:07,400
Speaker 11: one of the things that so many UH women and

817
00:39:07,480 --> 00:39:10,080
Speaker 11: people of color speak to in the AI ethics world

818
00:39:10,160 --> 00:39:12,560
Speaker 11: is the need to think about how technology is going

819
00:39:12,680 --> 00:39:15,600
Speaker 11: to be used, how it impacts different people. And we're

820
00:39:15,640 --> 00:39:19,080
Speaker 11: really not seeing that kind of consideration in the way

821
00:39:19,160 --> 00:39:23,200
Speaker 11: that these technologies are being unrolled. So it really seems

822
00:39:23,239 --> 00:39:26,560
Speaker 11: to be that there isn't enough clear thinking about foresight,

823
00:39:26,960 --> 00:39:31,000
Speaker 11: about context of use, about the social impact. And these

824
00:39:31,040 --> 00:39:33,400
Speaker 11: are things that a lot of people who specialize in

825
00:39:33,680 --> 00:39:37,640
Speaker 11: in things like AI ethics responsible AI m many of

826
00:39:37,719 --> 00:39:42,800
Speaker 11: whom are underrepresented in technology. You know, we're we're not

827
00:39:42,880 --> 00:39:45,400
Speaker 11: seeing this kind of insight, which means that there might

828
00:39:45,480 --> 00:39:47,480
Speaker 11: not be the right people, and the people there might

829
00:39:47,520 --> 00:39:49,480
Speaker 11: be more disempowered than they should be.

830
00:39:49,840 --> 00:39:52,799
Speaker 4: And the model that this is then l unleashed upon

831
00:39:53,360 --> 00:39:55,719
Speaker 4: is in an environment of a cultur wars, some might

832
00:39:55,800 --> 00:39:58,799
Speaker 4: call it. Margaret, I'm interested though, what for me as

833
00:39:58,800 --> 00:40:03,360
Speaker 4: a consumer could be made clearer? How can transformation, How

834
00:40:03,440 --> 00:40:06,680
Speaker 4: can me understanding what's going on under the hood be

835
00:40:06,840 --> 00:40:07,680
Speaker 4: better served to me?

836
00:40:07,800 --> 00:40:09,000
Speaker 6: So I understand where.

837
00:40:08,880 --> 00:40:13,120
Speaker 4: I perhaps can show my preferences, my needs my choices

838
00:40:13,160 --> 00:40:16,000
Speaker 4: when it comes to the images being generated, right right.

839
00:40:16,400 --> 00:40:19,560
Speaker 11: So one thing that actually people are familiar with with

840
00:40:19,760 --> 00:40:23,439
Speaker 11: Google image search is when you type in some sort

841
00:40:23,440 --> 00:40:25,960
Speaker 11: of query, some prompt to get a set of images,

842
00:40:26,840 --> 00:40:29,799
Speaker 11: there's a bunch of different boxes you can select from

843
00:40:29,960 --> 00:40:33,000
Speaker 11: that get at different things you might use. In the past,

844
00:40:33,080 --> 00:40:35,360
Speaker 11: Google has actually been very good at this, trying to

845
00:40:35,440 --> 00:40:39,040
Speaker 11: give users an option to specify the kinds of intents

846
00:40:39,239 --> 00:40:41,480
Speaker 11: that they have in what they're trying to search for,

847
00:40:41,960 --> 00:40:45,800
Speaker 11: and then further refining based on that. So that technology

848
00:40:45,880 --> 00:40:48,240
Speaker 11: is there. It's something that Google actually has a history

849
00:40:48,440 --> 00:40:52,680
Speaker 11: of developing and developing well. This same kind of approach

850
00:40:52,800 --> 00:40:55,800
Speaker 11: could be put into any sort of chatbot system, be

851
00:40:55,880 --> 00:40:59,759
Speaker 11: it more generative or not, where users are shown as

852
00:41:00,040 --> 00:41:03,200
Speaker 11: a selection that they can choose among to get at

853
00:41:03,239 --> 00:41:05,560
Speaker 11: the kinds of things that they would like. There's also

854
00:41:05,640 --> 00:41:08,080
Speaker 11: the possibility to have a back and forth in order

855
00:41:08,560 --> 00:41:11,200
Speaker 11: for the system to ask the user for a little

856
00:41:11,239 --> 00:41:15,160
Speaker 11: bit more specificity. Users could potentially set preferences and the

857
00:41:15,239 --> 00:41:19,719
Speaker 11: system could also show a variety of different things regardless

858
00:41:19,840 --> 00:41:23,799
Speaker 11: of different boxes users might check. They could say, here's

859
00:41:23,800 --> 00:41:27,160
Speaker 11: a historical image, here's the world, as it could be

860
00:41:27,640 --> 00:41:29,440
Speaker 11: you know, let me know more about what you'd like

861
00:41:29,560 --> 00:41:31,759
Speaker 11: to see practical takeaways.

862
00:41:31,960 --> 00:41:35,239
Speaker 4: We really appreciate you for it. Margaret Mitchell of Hugging Face.

863
00:41:35,280 --> 00:41:38,360
Speaker 4: Of course, she was previously founder and co led Google's

864
00:41:38,920 --> 00:41:44,040
Speaker 4: ethical AI group. The SEC while it's investigating where the

865
00:41:44,080 --> 00:41:47,120
Speaker 4: open Ai investors were misled as the startup went through

866
00:41:47,200 --> 00:41:49,920
Speaker 4: a ferocious debate of a leadership last year. This is

867
00:41:49,920 --> 00:41:52,160
Speaker 4: all being reported by the Wall Street Journal, citing people

868
00:41:52,200 --> 00:41:54,920
Speaker 4: familiar with the probe. Now the Securities in Exchange Commission

869
00:41:55,040 --> 00:41:59,200
Speaker 4: is studying internal communications by CEO Simulman in relation to

870
00:41:59,280 --> 00:42:01,719
Speaker 4: his ouster reports said, now the SEC has sent a

871
00:42:01,760 --> 00:42:04,840
Speaker 4: subpoena to the company in December, and our senior OpenAI

872
00:42:04,960 --> 00:42:08,120
Speaker 4: officials to preserve internal documents now to regain his job,

873
00:42:08,200 --> 00:42:12,560
Speaker 4: remember ed Altman agreed to an internal investigation among other conditions,

874
00:42:12,600 --> 00:42:13,680
Speaker 4: and we get to see the outcome.

875
00:42:14,600 --> 00:42:17,320
Speaker 5: Yeah, we wait the outcome. There are the private investors

876
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Speaker 5: in a complex cap table, and then there are the

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Speaker 5: Microsoft investors, because remember in the public markets, Microsoft shares

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Speaker 5: reacted to the chaos which you and I both live through.

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Speaker 4: Feels an age away, but of course there's still debate

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Speaker 4: rages on. Meanwhile, That does it for this edition of

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Speaker 4: Bloombog Technology.

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Speaker 5: Big thanks to everyone who listens to the podcast. We

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Speaker 5: know there are a lot of you out there. We're

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Speaker 5: on Spotify, iHeart Apple, and the Bloomberg platforms. Gosh, what

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Speaker 5: a week it's been. From San Francisco and New York City.

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Speaker 5: This is Bloomberg Technology.