Speaker 1: From Marhart where Innovation, Money and power Collie in Silicon Valley, NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 3: I'm Carolin Hyde at Bloomberg's Wiltid quarters in New York
Speaker 3: and I met Lolo in San Francisco.
Speaker 4: This is Bloomberg Technology coming up.
Speaker 5: Full coverage of tech earnings ahead.
Speaker 3: Is of course palents, SOLS and unprecedented AI demand while
Speaker 3: chipmakers struggle.
Speaker 4: To wather it, the industry downturn, plus Salesforce expanding its
Speaker 4: approach to the degenerative AI boom with a new set
Speaker 4: of tools unveiled. Salesforce co president Sarah Franklin joins us
Speaker 4: from the Tableau conference in Las Vegas.
Speaker 3: And we talked the state of fundraising as the startup
Speaker 3: UBI raises one hundred million dollars for AI powered car inspections,
Speaker 3: and we speak to the co founder of RX three,
Speaker 3: which is also raised one hundred and fifty million dollars
Speaker 3: from athletes and celebrities for its second growth equity fund. First,
Speaker 3: that's sort of the private money being raised. What's happening
Speaker 3: with your publicly traded companies today? We're nervous, cautious, and
Speaker 3: we see a bit of a pullback on the Nasdaq
Speaker 3: grow off by six tenths percent at the moment.
Speaker 5: This is all about worries about that debt.
Speaker 3: Ceiling coming front and center for the United States investor,
Speaker 3: but also what's happening in China. The worry about the
Speaker 3: impart demand not being as strong as we anticipated, is
Speaker 3: that global economy, one of the fire powers of the
Speaker 3: global economy not returning to growth post COVID as quickly.
Speaker 5: As we hoped.
Speaker 3: Golden Dragon therefore off by two point seven percent, and
Speaker 3: also anxiety around the regional banks once again front and
Speaker 3: center were off by nine tenths of a percent.
Speaker 5: So that's your macro picture.
Speaker 3: Let's move on to what's happening in the world of crypto,
Speaker 3: because today we see a little bit of caution.
Speaker 5: Overall.
Speaker 3: We're just off by about five tenths of a percent.
Speaker 3: We've had volatility in the og that is bitcoin today.
Speaker 3: Really this is more a story of where the dollar
Speaker 3: direction of travel is ahead of that debt ceiling demarcle,
Speaker 3: whether or not it's more about the crypto.
Speaker 5: We're just taking a bit of a pause on crypto.
Speaker 4: It feels on the day, ed Yeah, I'm afraid. The
Speaker 4: earning story also putting a lot of pressure to the downside.
Speaker 4: You take a look at PayPal lowering its margins outlook
Speaker 4: for the year. We're going to dig into the details
Speaker 4: around that later in the show. Lucid Group softer by
Speaker 4: eight percent, basically reguiding to the low end of its
Speaker 4: previously stated forecast. An automaker that's trying to catch up
Speaker 4: with Tesla but not making a lot of progress. Global
Speaker 4: Founderies again paying for the chip sector, seems to be
Speaker 4: in place through the end of the year. We're going
Speaker 4: to go to Bloomberg's Ian King, the guy you want
Speaker 4: to talk to when it comes to semiconductors. Global Foundry
Speaker 4: softer by five percent. The big name, the big mover
Speaker 4: to the upside is Palenteer up around twenty percent so
Speaker 4: far in Tuesday session, a couple of percentage points more,
Speaker 4: and this is a stop that's heading for his biggest
Speaker 4: jump since January twenty twenty one. They've shown their hand
Speaker 4: with a new AI tool and talk about talks about
Speaker 4: unprecedented demand for that AI tool during the earning school.
Speaker 4: I want to get more on this story and bring
Speaker 4: in Bloomberg's Lazette Champman, who's here with us in San Francisco.
Speaker 4: The palentin AI tool is atte what is it? Hey there?
Speaker 6: Yeah, you know, palent here had a Crackerjack quarter. It
Speaker 6: had a surprise profit. It said it was going to
Speaker 6: be profitable not only this current quarter but for the
Speaker 6: entire year, and they had unprecedented demand for their AI platform,
Speaker 6: which you know, as the CEO Alex Kark said, is
Speaker 6: still under construction. They don't exactly have a pricing strategy,
Speaker 6: but they are in conversations with hundreds of their hundreds
Speaker 6: of their customers about incorporating this into their into their plans.
Speaker 3: His turn of phrase, he's not shy of using sometimes
Speaker 3: more controversial language.
Speaker 5: He says in large language.
Speaker 3: Models as a revolution that will raise ships and sinkshit
Speaker 3: will raise ships and sink ships. I'm just I'm fascinated
Speaker 3: by the fact how this sits with people ultimately about
Speaker 3: generative AI studying in large language models helping us in
Speaker 3: the battlefield, right.
Speaker 6: I think that there's been a huge demand for that
Speaker 6: based on the you know, in increased interest both from
Speaker 6: you know, are the United States Department of Defense as
Speaker 6: well as our allies, and so it's very much seen
Speaker 6: as a critical asset in a software first defense scenario
Speaker 6: given the rising tensions with China and Russia and others
Speaker 6: that are not necessarily friendly to US interest. So there
Speaker 6: is definitely a defense application. More than half of Palanteer's
Speaker 6: revenue does come from the government sector, which includes not
Speaker 6: only the Department of Defense and all of its branches,
Speaker 6: but also those of our allies. So it's very much
Speaker 6: geared toward a defense context, along with some commercial applications.
Speaker 4: Well, so astonishing about this story. Yeah, the stocks up
Speaker 4: twenty percent because of AI. Also surprise profit and no
Speaker 4: one's really talking about.
Speaker 5: It, right, Well, let's dig into that a little bit more.
Speaker 2: It's a surprise profit.
Speaker 6: And one of the things that I think that was
Speaker 6: interesting was that they achieved this two years before they
Speaker 6: originally said they would. Originally the plan was for them
Speaker 6: to hit gap profitability by twenty twenty five. Now they're
Speaker 6: saying that they will do it for this full year
Speaker 6: and they will maintain profitability, will continuing to reorient all
Speaker 6: of their resources. That's thousands of employees around building this
Speaker 6: AI platform.
Speaker 5: Absolutely extraordinary, I mean, big move on the stock.
Speaker 3: Great to have Lizette breaking it all down on the
Speaker 3: surprise profit side of the equation as well as all
Speaker 3: in on AI as another company seems to be we
Speaker 3: thank you so much for coming in and joining the show. Meanwhile,
Speaker 3: let's turn to another key company that's out with earnings
Speaker 3: and look, the share price is not having a similar reaction.
Speaker 3: Global foundryes signaling weakness in its outlook on muted chip demand. More,
Speaker 3: let's go out to really most in king, the king
Speaker 3: of all things when it comes to our chip coverage
Speaker 3: here in what do you make of what this is signaling?
Speaker 5: More broadly, because we keep on waiting.
Speaker 3: For there to be some sort of turnaround, Is in
Speaker 3: any way Global Foundry is a bell weather for the sector?
Speaker 7: Yeah, one hundred percent.
Speaker 8: A good way to look at them is a smaller
Speaker 8: version of TSNC through their customers. Effectively, they're in the
Speaker 8: auto chip business, they're in the data center business, they're
Speaker 8: in the mobile phone business. And the outlook that they
Speaker 8: gave today unfortunately reflects a lot of what's been said
Speaker 8: throughout this ending season and that's not particularly positive.
Speaker 3: Next, therefore, are we tending to start to think we
Speaker 3: can call a bottom on this? Did they in any
Speaker 3: way say okay, this isn't looking good in the meantime,
Speaker 3: in the here and the now, but we see some
Speaker 3: sort of light at the end of the tunnel.
Speaker 8: Yeah, No, it's a very good question. They're basically effectively
Speaker 8: speaking out of both sides of their mouth, which a
Speaker 8: lot of chip companies have been doing, which is and
Speaker 8: what they've been saying is quarter one that was the worst,
Speaker 8: that was the absolute bottom, and things will get better
Speaker 8: from here. But things will not get better at the
Speaker 8: rate we thought that they would. So that's obviously causing
Speaker 8: some concern. Can we believe this kind of rose tinted
Speaker 8: scenario for the second half of the year, And again
Speaker 8: Global Foundery said, not looking as good as we thought
Speaker 8: it had.
Speaker 3: Just on the specifics here in what particular areas of
Speaker 3: demand When you say it's like a good bell weather
Speaker 3: or smaller ty SMC or whatever they likes, What particular
Speaker 3: areas of demand are we so worried about smartphones?
Speaker 7: Has got to be number one.
Speaker 8: I mean, they effectively repeated what Qualcom said, which is,
Speaker 8: China hasn't come back as quick as we thought. The
Speaker 8: inventory that we said was going to be burned away
Speaker 8: by the middle of the year looks like it's going
Speaker 8: to be hanging around into the second half of the year,
Speaker 8: So they're saying, Look, supply is kind of getting better,
Speaker 8: that position is improving, but demand whereas demand.
Speaker 3: It's interesting that when you in video was a big
Speaker 3: drag today and indeed, as you've pointed out, sort of,
Speaker 3: this has been a bit of a bell weather for
Speaker 3: the entire ship sector on the day, and a video
Speaker 3: actually hit at fifty two week high yesterday.
Speaker 5: The areas are we going to get both bifurcated market?
Speaker 3: Are we going to see the chip makers, designers that
Speaker 3: are all in on AI doing well and those that
Speaker 3: aren't languishing because they're consumer exposed.
Speaker 7: Yeah, I mean that would appear to be the way
Speaker 7: to look at it.
Speaker 8: Look at the only green dot on my screen today
Speaker 8: was AMD and that's definitely a play on the future
Speaker 8: of AI and what investors are expecting to happen.
Speaker 4: The Bloombergsie and King joining us out of San Francisco,
Speaker 4: Salesforce expanding its approach to generative AI with the reimagined
Speaker 4: version of its Tableau suite called Tableau GPT and also
Speaker 4: Tableau Pulse for more ns. We welcome Salesforce co president
Speaker 4: Sarah Franklin, who's coming to us from the Tableau conference
Speaker 4: out in Las Vegas. Let's get straight to the why,
Speaker 4: why is Salesforce doing this and why now?
Speaker 9: So big picture, Salesforce has been a pioneer in AI
Speaker 9: for over a decade. We created Einstein, which brought everyone
Speaker 9: to have their own data.
Speaker 2: Scientists about a decade ago, and now today.
Speaker 9: We're delivering over a trillion prediction every week for all
Speaker 9: of our hundreds of thousands of customers, which brought them
Speaker 9: into AI. And now we've moved from predictive to generative,
Speaker 9: and Salesforce, who has led every seismic shift and technology
Speaker 9: from going to cloud, to mobile to social, we are
Speaker 9: here right at the forefront leading all of our customers
Speaker 9: into dinnerative AI with Tableau GPT and Tableau Pulse.
Speaker 4: So, Sarah, you're out at the Tableau conference. The other
Speaker 4: tool announced is Slack GPT. So the question is this
Speaker 4: is this you trying to get Salesforce customers to use
Speaker 4: the services of other things you've acquired in recent years.
Speaker 9: So, Salesforce, we have an incredible suite across the entire
Speaker 9: customer through sixty sales service marketing commerce lack has been
Speaker 9: an incredible addition to our portfolio helping everyone have great
Speaker 9: productive employees. And we ask ourselves a question, how do
Speaker 9: you make every employee more productive? How do you make
Speaker 9: every customer more happy? How do you provide incredible customer
Speaker 9: service and sales and marketing and a fully integrated single.
Speaker 2: Source of truth of your customers?
Speaker 9: And so yes, by providing that entire suite of products
Speaker 9: for our customers, they can all have better customers and
Speaker 9: better employees. And it's really important that we give them
Speaker 9: all of their data so they can unlock it and
Speaker 9: really have that trusted customer and company data to use
Speaker 9: generative AI and to have tabloa GPT really bring that
Speaker 9: data to life for everyone that's involved in customer engagement.
Speaker 4: Caroline data is really the key point, isn't it, Particularly
Speaker 4: when we're talking about enterprise is a use case for
Speaker 4: generative AI tools. There's an element of concern about the
Speaker 4: data it's sourcing and how it's secure.
Speaker 3: Yeah, and so to that point, you use trusted a
Speaker 3: number of times there or single source of truth. Is
Speaker 3: there any concern that generative AI does just make some
Speaker 3: things up? If there is a hole in the private
Speaker 3: data that this is being run on the so called
Speaker 3: hallucinations and many people to take issue with that particular
Speaker 3: turn of phrase, But is that happening? How do you
Speaker 3: ensure that people are getting the right insights at the
Speaker 3: right time.
Speaker 9: Trust is absolutely paramount, As we've discussed just now, Every
Speaker 9: company wants to have trusted data.
Speaker 2: They need to know that they have their data is
Speaker 2: being trusted.
Speaker 9: Their customers expect them to trust them with their data
Speaker 9: and salesforce at our core, we have always had trust
Speaker 9: other number one value, and so having trusted data is
Speaker 9: important because your AI is only as good as your data,
Speaker 9: and so no company wants to bring hallucinations, as you say,
Speaker 9: into the enterprise.
Speaker 2: They need to know that they can trust the AI.
Speaker 9: And that's why our approach is founded on trust and
Speaker 9: we always have a human in the process because the
Speaker 9: AI is here to help us, not to not to
Speaker 9: replace us, and so that's so important that the data
Speaker 9: is trusted, so that you can also trust the generative
Speaker 9: AI that's being created from that data.
Speaker 3: Interesting, so I'm feeling that you're on the AIS here
Speaker 3: to augment us humans rather than take away our jobs.
Speaker 3: But you are someone who's built your career on the
Speaker 3: democratization of technology, or someone who's se passive passionate about
Speaker 3: how with ease people can change.
Speaker 5: From a blue collar job to a white college job.
Speaker 3: Using, for example, the ways in which you've used trailheading
Speaker 3: for example. But are you brought a picture here thinking
Speaker 3: AI is going to inevitably take white college jobs at
Speaker 3: the moment.
Speaker 9: So I really want to look at generative AI as
Speaker 9: an incredible opportunity for us.
Speaker 2: It's really interesting when you rewind back in history and
Speaker 2: you think of the first computer.
Speaker 9: The first computer was a person, not a machine, and
Speaker 9: there's a lot of fear that it would replace us
Speaker 9: in our jobs. Fast forward to today, we don't have
Speaker 9: enough skilled talent for all of the jobs that work
Speaker 9: with computers and work in tech, and so we're already
Speaker 9: seeing new careers being created such as prompt engineering or
Speaker 9: AI illustrations.
Speaker 2: There's just a lot of opportunity.
Speaker 9: So we as an industry and as salesforce, we do
Speaker 9: take it as a responsibility to scale people up for
Speaker 9: the future. We created Trailhead as a free online learning
Speaker 9: platform to democratize all of this technology so everyone can
Speaker 9: have access and everyone can learn. There's an incredible opportunity
Speaker 9: and we want to make it easy and accessible for everyone,
Speaker 9: and we can also hopefully change the ratios and tech
Speaker 9: in the process. But yes, we are here to help
Speaker 9: skill people up and help remove the fear from this
Speaker 9: incredible new generation of technology we see with generative AI.
Speaker 4: Sarah, how are these new tools driving sales for Salesforce?
Speaker 9: So Generative AI is everything that all of our customers
Speaker 9: are talking about. They are wondering how to future prove
Speaker 9: their business in the wake of this new technology trend,
Speaker 9: and it's here to stay. It's not a bad and
Speaker 9: so every single one of our customers is looking at
Speaker 9: Salesforce right now and saying, we trust you. We know
Speaker 9: that you will guide us into this future, just like
Speaker 9: you guided us into cloud, into mobile, into social. So yes,
Speaker 9: every single one of our customers wants Salesforce GPT to
Speaker 9: help them.
Speaker 2: With sales GPP, service GPT, marketing GPT and more.
Speaker 9: And Tablot GPT and tablet Pulse are incredible innovations that
Speaker 9: are going to help fuel all of our customers' success.
Speaker 4: In your career, as Caroline pointed out, you've been through
Speaker 4: waves of new technological advancement. This has happened quite quickly.
Speaker 4: Did Salesforce really plan these tools over a really long
Speaker 4: period of time, or is this something that you've rushed
Speaker 4: through in recent weeks in response to what the rest
Speaker 4: of the industry's done.
Speaker 2: So this is what's so powerful is.
Speaker 9: That Salesforce has been a pioneer in AI for over
Speaker 9: a decade. We've been investing in Einstein, which is our
Speaker 9: AI platform, and we have seen, as I mentioned earlier,
Speaker 9: we have over one trillion predictions being done every single
Speaker 9: week on our AI platform. So this is not something
Speaker 9: that we're just pulling out of a hat. We have
Speaker 9: been investing in this for a long time, and we
Speaker 9: have the world's best data scientists that are here at Salesforce,
Speaker 9: and they're generating all kinds of incredible large language models
Speaker 9: that help us create code, that help us create reply response,
Speaker 9: that help us create.
Speaker 2: Great engagement and ways for like you.
Speaker 9: See with Tableau GBT and Tableau Pulse, for people to
Speaker 9: really bring their data to life, where in the past
Speaker 9: they haven't been able to really do that easily. So
Speaker 9: this has been something Salesforce has been doing for a
Speaker 9: long time and will continue to be a leader in generative.
Speaker 3: AI, a leader at a time where the macro headwinds
Speaker 3: for every single industry are tough at the moment, and Sarah,
Speaker 3: as you talk about the in house talent that you
Speaker 3: have to keep building, it's at a time where we
Speaker 3: know companies like you also are having to lay off staff,
Speaker 3: having to slim down in the face of what has
Speaker 3: been a slowing economy.
Speaker 5: Have you got the right mix of talent in the
Speaker 5: moment you.
Speaker 9: Think at Salesforce, we have the most talented engineers, marketeers, salespeople.
Speaker 9: We have the best people in the business at Salesforce,
Speaker 9: and we are more equipped than ever. Our company is
Speaker 9: in a great spot set up for the decades to come.
Speaker 9: We're laser focused on our customers, on our innovation, and
Speaker 9: really delivering success for everyone.
Speaker 3: Sarah Franklin, thanks for spending some time with us co
Speaker 3: president of Salesforce.
Speaker 10: There.
Speaker 3: Meanwhile, ed one of the biggest concerns, of course, that
Speaker 3: comes with using artificial intelligence just in our daily lives, Well,
Speaker 3: we're just talking about being replaced by it, especially for
Speaker 3: those that work in the media landscape.
Speaker 5: Enter GPT zero.
Speaker 3: It's an app launch to distinguish whether copy was written
Speaker 3: by a human or by artificial intelligence. More than one
Speaker 3: million users of registered since January and the brain behind
Speaker 3: the app is just a twenty two year old from
Speaker 3: Princeton University. A student is also launching a new program
Speaker 3: called Origin, which aims to weed out disinformation in the
Speaker 3: online media generated by AI. It secured three and a
Speaker 3: half million dollars in funding so far.
Speaker 4: Ed Yeah, let's stick with AI. IBM introducing a platform
Speaker 4: for large companies to train and use AI models. When
Speaker 4: it rains, it pours Caroline, the company leaning in on
Speaker 4: its Watson legacy to stand out in a crowded field
Speaker 4: for AI. Tool have to say, not doing much to
Speaker 4: support the shares this Wednesday Tuesday. Sorry, down one right
Speaker 4: and at a seven month low. So many headlines in
Speaker 4: the field of AI now coming up. Regional banks resume
Speaker 4: their sell off as uncertainty hits the sector. We're going
Speaker 4: to discuss that next in our weekly Wall Street Beat.
Speaker 7: This is bloomberg.
Speaker 4: Time for Wall Street Beat. Pack West and Western Alliance
Speaker 4: led regional bank stocks lower today as the hard hit
Speaker 4: sector resumed its decline. The drop comes as investors remain
Speaker 4: unnerved by a rash of deposit outflows from banks and
Speaker 4: increasing concerns about general stability. Plus Linked in the latest
Speaker 4: tech company to join the wave of job cuts. The
Speaker 4: company plans to shut its jobs app in China and
Speaker 4: cut about seven hundred and sixteen jobs as the networking
Speaker 4: service further shrinks its presence in the world's second largest economy,
Speaker 4: and a group of firms including Goldman, Sachs and Microsoft
Speaker 4: adjoining a new blockchain system aimed at linking disparate institutional applications,
Speaker 4: potentially encouraging broader adoption of distributed ledger technology in financial markets.
Speaker 4: Participants in the Canton network, which will start testing some
Speaker 4: features in July, say the system offers better privacy and
Speaker 4: controls than currently available AI. At the same time, it
Speaker 4: will achieve a scale and standard appropriate for financial institutions.
Speaker 4: That all according to a quite long statement released by
Speaker 4: the companies on Tuesday.
Speaker 3: Yeah, a little one to dig into. Basically, blockchain is back. Meanwhile,
Speaker 3: we els is back. Celebrities endorsing brands are x three
Speaker 3: raising one hundred and fifty million dollars from athletes from
Speaker 3: celebrities were at Second Equity Fund where they really analyze
Speaker 3: some consumer opportunities.
Speaker 5: We've got an exclusive interview for you coming up.
Speaker 3: Nate Robb's going to be joining us managing partner at
Speaker 3: our ex three ventures that's up next.
Speaker 5: Meanwhile, another stot that we've got an eye on Nintendo.
Speaker 3: Wow, the Mario maker is learning and warning a big
Speaker 3: slowdown in the switch console sales. This is a key concern,
Speaker 3: but actually Nintendo managing to tread above water at the moment,
Speaker 3: at least over the last few trading days. But it
Speaker 3: seems as though maybe you want too many consoles out there.
Speaker 5: D you know you're the expert on this one.
Speaker 4: Yeah, look, I am tracking Mobile. I we kind of
Speaker 4: pared some earlier gains. We're up sort of more than
Speaker 4: nine percent. After we did an interview with the CEO
Speaker 4: the company reaching a deal with Porsche to just basically
Speaker 4: give them their advanced driver technology assistance technology going forward.
Speaker 4: The CEO telling me that actually we could see the
Speaker 4: tech in real cars in production sooner than we might think.
Speaker 4: Have a listen.
Speaker 11: Normally, when you get a design, when it's between two
Speaker 11: to three years until you have started off production. So
Speaker 11: we're talking about the same timeframe. But we started working
Speaker 11: a few months early before this announcement, so you can
Speaker 11: do this smath then come up with a start of production.
Speaker 4: I would say, Caroline, this is a deal that the
Speaker 4: mobile it's in recent weeks, particularly on the earnings care
Speaker 4: or wondering who is this mysterious European automaker the mobilized
Speaker 4: doing businesses. Well, it's a pretty decent one poor show.
Speaker 4: It'll be interesting to see if this moves the needle
Speaker 4: for them and they get some more deals. Welcome back
Speaker 4: to Bloomberg Technology. I'm ed love Low in San Francisco.
Speaker 3: I'm Caroline Heard in New York. And let's dig into
Speaker 3: some of this market action. Halfway through the show and
Speaker 3: I'm looking at what is sentiment a little bit more
Speaker 3: like luster On the day, we're off by seven ten
Speaker 3: percent on the NASDAG. We're worried about some key themes
Speaker 3: here in the US, the debt ceial course, keeping some
Speaker 3: investors on edge. We're also worrying about China potentially more
Speaker 3: of a hit to that economy that we're anticipating imports
Speaker 3: not as fast as we wanted Golden dragons. So some
Speaker 3: of those Chinese listed companies here in the United States,
Speaker 3: or Chinese companies listed here in the US, are on
Speaker 3: the downside. Two and a half percent. KBW bankin nets.
Speaker 3: Keep an eye on some of these regional lenders. We
Speaker 3: are still worried about them. Pack westers on the downside
Speaker 3: once again, so a lot to think about from the
Speaker 3: macro perspective, but also let's dig into the earnings the micro.
Speaker 3: Have a quick look at what's on the move in
Speaker 3: terms of your individual tech names on the day. Look,
Speaker 3: Amazon manages to outperform and what's actually up modern than this.
Speaker 3: It's adding in terms of points perspective to the NASDAK
Speaker 3: and the NASDAQ one hundred to day. It's unveiling the
Speaker 3: fact that you might be able to buy Amazon products
Speaker 3: even when you're in a gaming or virtual reality sphere
Speaker 3: at the moment.
Speaker 5: So don't worry. You can order that Amazon get you
Speaker 5: down on a matter where you go.
Speaker 3: Paleteer, as you mentioned at the top of the show,
Speaker 3: ed up twenty two percent, absolutely soaring because Moves is
Speaker 3: twenty twenty one as they say, look this AI app
Speaker 3: that they're developing, the software they will be used even
Speaker 3: in the battlefield.
Speaker 5: That is unprecedented demand for it.
Speaker 3: PayPal though on the downside after its earnings because operating
Speaker 3: margin not as strong as wanted to be seen. Even
Speaker 3: though they're seeing volumes increase in terms of overall payments processing, they're.
Speaker 5: Doing too much white labeling.
Speaker 3: People want to see more of the PayPal payments going forward,
Speaker 3: and I'm looking at fiska off by six tens percent,
Speaker 3: six percent fully actually, as we worry about the software
Speaker 3: in its new SUV and whether or not that's looking
Speaker 3: pretty cunky for the time being.
Speaker 4: At right from the public markets, let's go to the
Speaker 4: private markets. The Venger Fund RX three has just raised
Speaker 4: one hundred and fifty million dollars from athletes and celebrities
Speaker 4: for its second consumer focus growth equity fund, The Farmers,
Speaker 4: co founded by football star Aaron Rodgers, bench catalyst Byron Roth,
Speaker 4: and Nate Raby, who joins us now for an exclusive interview. Nate,
Speaker 4: good morning to you. Why are all of the LPs athletes, actors, celebrities. Yeah,
Speaker 4: thanks Ed Caroline for having me on.
Speaker 12: I think the reason we have a lot of these athletes,
Speaker 12: celebrities and actors as LPs it really provides us access
Speaker 12: to consumer brands across the growth sector.
Speaker 4: And not only we have be able to provide capital,
Speaker 4: but we can provide.
Speaker 12: Value beyond that capital and really move the needle and
Speaker 12: help drive revenue to these brands.
Speaker 4: When you look at the portfolio companies or potential portfolio companies.
Speaker 4: Do you think that having celebrity backing is an investor
Speaker 4: and then endorsement increases the I guess the likelihood that
Speaker 4: you will have success and then a successful exit down
Speaker 4: the road.
Speaker 12: Yeah, I think it definitely can if there's the authentic relationship.
Speaker 12: So we really drive, really strive to align our differentiated
Speaker 12: LPU based with brands when there is that authentic relationship.
Speaker 4: I don't think you can set it up.
Speaker 12: Where the days of where they just get paid to
Speaker 12: do a post, those are kind of long gone. So
Speaker 12: we really try to baster authentic relationships between our differentiated
Speaker 12: LP based in our brands.
Speaker 3: Some VCS that I've been speaking to Nate have said
Speaker 3: the one area that they are not going anywhere near
Speaker 3: a consumer led companies right now, consumer focused companies because
Speaker 3: of the economy that we're in.
Speaker 5: Why is it still the great hit for you?
Speaker 9: Yeah?
Speaker 12: For us, because we have athletes and entertainers. It's easy
Speaker 12: for them to get behind because it's products and brands
Speaker 12: they use on the have a day basis. So we
Speaker 12: invest across help, wellness, active, lifestyle, beauty, pet and these
Speaker 12: are all brands that they can feel, touch and using
Speaker 12: their daily life. We have shifted our focus from kind
Speaker 12: of high growth BTC consumer brands to more consumer essentials,
Speaker 12: profitable brands that have strong fundamentals behind them.
Speaker 5: Always got to feed your pet.
Speaker 3: Talk to us a little bit though about some of
Speaker 3: the overall valuations that you're seeing. Are you getting a
Speaker 3: better entry point when you're starting these conversations and where
Speaker 3: do you think some of the opportunities are and what
Speaker 3: is a dislocated market?
Speaker 12: Yeah, I think there's there's definitely been a healthy reset
Speaker 12: in the market across private equity.
Speaker 4: You know, we're looking at it.
Speaker 12: We've only made one investment out of our second fund,
Speaker 12: and well positioned to kind of take advantage and really
Speaker 12: help provide value to these brands. So we're excited about
Speaker 12: about this vintage because there definitely has been a healthy reset.
Speaker 3: Healthy reset that in many ways ED has not just
Speaker 3: been seen across technology companies and in the private markets,
Speaker 3: but in the public markets as well. But really a
Speaker 3: lot of this is about having technology at its core,
Speaker 3: a way in which you can speak to a mass
Speaker 3: consumer via the power of well social media, and big
Speaker 3: brands that are happened to be big individuals in this
Speaker 3: case ED.
Speaker 4: Yeah, I guess that in that vein Nay, when you
Speaker 4: guys are making an investment decision, a deck hits your desk,
Speaker 4: do you then invite all of these LPs that would
Speaker 4: be involved in the endorsement of this company to participate
Speaker 4: actively in that investment decision or do the three partners
Speaker 4: just make the decision on their behalf.
Speaker 2: No great question.
Speaker 12: So our LPs and our athletes Lebri advessors we're return focused.
Speaker 2: First.
Speaker 12: We don't require anybody to do anything, but rather, if
Speaker 12: there is that natural alignment, we do go out to
Speaker 12: our existing lpbasency if there is interest, and they would
Speaker 12: it is a brand that they would give behind. They're
Speaker 12: not involved in the day to day investment decision and
Speaker 12: not required to do anything for the brand. But we
Speaker 12: do try to align ourselves with brands where there is
Speaker 12: someone in our network that we.
Speaker 2: Can provide value to.
Speaker 4: Nate Ashton Kirsch had told us on the show last
Speaker 4: week he raised two hundred and forty three million for
Speaker 4: his AI fund in just five weeks. How quickly did
Speaker 4: he raise this fund?
Speaker 12: A little more in five five weeks? Ashton Kutcher as
Speaker 12: a strong brand in the investing side. That's very impressive.
Speaker 12: Definitely took us a little longer, so very impressed with
Speaker 12: what he did, but we're happy to say we're oversubscribed
Speaker 12: with our second fund him.
Speaker 5: What about artificial intelligence?
Speaker 3: What a way about the ways in which that is
Speaker 3: seeming uppending every business model?
Speaker 5: Is it something that you're looking at?
Speaker 12: Yeah, I think it's something that all of our brands
Speaker 12: across the consumer spectrum are going to have to take
Speaker 12: a look at and how they can incorporate it into
Speaker 12: their company. I think it's still early days here and
Speaker 12: it's definitely something though that we're looking at and will
Speaker 12: be a part of our our super brands.
Speaker 3: Nate Raby, thanks for the time, managing partner and our
Speaker 3: X three ventures. Meanwhile, coming up, we're going to stick
Speaker 3: on the focus of investment VC firms continuing to tap
Speaker 3: their commitments to AI native companies.
Speaker 5: We're speaking with a partner from Bessemer Venture Partners.
Speaker 3: We're gonna dig in really to the nuance of the portfolio,
Speaker 3: what they're building in AI.
Speaker 5: That's next.
Speaker 1: This is Bloomberg. There's time now for our VC roundup.
Speaker 3: Investment firm processes exploring potential divestments from its emerging markets
Speaker 3: fintech company Pay You Look. Sources are saying it's working
Speaker 3: with Bank of America to gauge interest in pay US
Speaker 3: business outside of India and could fetch as much as
Speaker 3: eight hundred million dollars in the potential deal. Meanwhile, Taiwanese
Speaker 3: battery maker pro Logium Technology is looking into funding an
Speaker 3: evaluation of about two billion dollars to ramp up growth
Speaker 3: in twenty twenty four.
Speaker 5: The ev battery supplier, which is backed by Mercedes.
Speaker 3: Benz, some talks with potential advisors to raise as much
Speaker 3: as three hundred million dollars, according to sources, and Aura,
Speaker 3: the finished company behind some of those pricey health tracking rings,
Speaker 3: says it's buying a little known tech startup called Proxy.
Speaker 5: Proxy makes digital identification tools.
Speaker 4: Said yeah, loving those private startup and venture stories from
Speaker 4: around the world. They're stay in the VC space and
Speaker 4: wait welcome. Samir de La key partner with Besmadventure Partners,
Speaker 4: a billion dollars.
Speaker 13: Billion dollars the AI four AI from an existing fund,
Speaker 13: from an existing fund. We have lots of flexibility with
Speaker 13: our existing funds to be able to deploy it. The
Speaker 13: message is really clear to entrepreneurs out there. We are
Speaker 13: committed to AI in investment in AI native founders.
Speaker 3: Okay, tell us Samir, how you thought week from chaff
Speaker 3: at the moment we had. Of course, many VC come
Speaker 3: on saying there's plenty of opportunities to write checks at
Speaker 3: the moment, but not all of the companies are as
Speaker 3: strong as the other. How do you understand that they're
Speaker 3: really doing something foundational within AI?
Speaker 13: No question, and that is fundamental to our job is
Speaker 13: to be able to sort those I will just say
Speaker 13: I've been in software now for twenty eight years, served
Speaker 13: as CEO of two different companies, joined venture capital recently.
Speaker 13: But I'll tell you I've seen these seminal moments in
Speaker 13: technology history where it becomes clear to the mainstream that
Speaker 13: we have made a technical leap forward and everything about
Speaker 13: life and work will be different. I saw it with
Speaker 13: the Netscape moment in ninety five. I saw it with
Speaker 13: the iPhone moment with.
Speaker 4: Jobs in seven.
Speaker 13: And there's just no question in my mind that we
Speaker 13: will look back at November thirtieth of twenty two and
Speaker 13: say that was the chat GPT moment, and everything about
Speaker 13: the future is going to be different in great ways.
Speaker 13: And I think that in on us as venture capitalists.
Speaker 13: If I take the Netscape example, the first one that
Speaker 13: I lived through. We need to go find the next
Speaker 13: Jeff Bezos and I know he's out there and or
Speaker 13: she's out there, and we would love to talk to her,
Speaker 13: and we want to and we have to be able
Speaker 13: to sort the Jeff Bezos from you know, the next
Speaker 13: Amazon from the next Webvan And that's hard to do,
Speaker 13: but we're excited to go do it, and we want
Speaker 13: a signal to the market. We've got a billion dollars
Speaker 13: of capital here to deploy into this new breakthrough that
Speaker 13: we think is going to change the world.
Speaker 3: And we're looking at some of your portfolio Jasper Dpel,
Speaker 3: for example, Samir. There is currently this discussion about whether
Speaker 3: big tech or indeed all gardens will win out. We see,
Speaker 3: of course everyone talking about open AI and being a
Speaker 3: relationship with Microsoft. We think about the competition with Google,
Speaker 3: but many are also talking about well open source. We're
Speaker 3: also seeing how hugging face makes an impact on that.
Speaker 3: What do you think about that sort of the dichotomy we're.
Speaker 5: Getting at the moment.
Speaker 13: Absolutely, I think you're going to see continued innovation at
Speaker 13: all layers of the staff. We're seeing open source flourish
Speaker 13: costs are coming down really quickly. I do believe if
Speaker 13: you were to ask me as a betting man, I
Speaker 13: think at the foundation model layers would probably see a
Speaker 13: redux of the cloud wars, where the big tech provides
Speaker 13: the biggest platforms. But I think you'll but you will
Speaker 13: also see open source solutions. I think you'll see vertical
Speaker 13: solutions that are smaller lms trained to solve a particular
Speaker 13: problem set in a given vertical industry, et cetera. And
Speaker 13: so I think we're just going to and then of
Speaker 13: course at the application layer, I think you're going to
Speaker 13: see the creativity of the world's entrepreneurs unleashed and problem
Speaker 13: solved in novel ways. And there will be thousands of
Speaker 13: those solutions. So I think this is one of those
Speaker 13: moments where I genuinely would say trillions of dollars of
Speaker 13: market cap will be created from this AI moment. And
Speaker 13: it's not I say that not because my crystal ball
Speaker 13: is any clearer than anybody else's, but because I'm a
Speaker 13: student of his, and I've lived in twenty eight years
Speaker 13: through the previous platform shifts, and every other platform shift
Speaker 13: has led to that level of innovation creation and market
Speaker 13: value creation, which are.
Speaker 4: Is you pulling back from or hitting pause on so
Speaker 4: you can commit a billion dollars to AI Native.
Speaker 13: The fun thing for me about the AI investments is
Speaker 13: AI is not a category. In my humble opinion, I
Speaker 13: think it is going to be embedded everywhere. They're the
Speaker 13: AI natives. We will invest deeply, and that's what this
Speaker 13: fund is all about. Every one of our portfolio companies
Speaker 13: have heard the message, how are you adopting and rethinking
Speaker 13: your solutions in the context of this technical leap forward?
Speaker 13: And so I think we're seeing it everywhere, and so
Speaker 13: I believe will continue to invest meaningfully behind all the
Speaker 13: places we have historically vertical SaaS, horizontal SaaS, and cybersecurity
Speaker 13: or healthcare. We do invest behind crypto as well. Well,
Speaker 13: We've got a Dow where and so I believe crypto
Speaker 13: as well. I think all of these categories will fundamentally
Speaker 13: adopt AI because it's just a great.
Speaker 4: New capability psychologically and mechanically. Is the timeline for exit
Speaker 4: different for an AI company or an AI adjacent company
Speaker 4: or a native AI company AI native and the type.
Speaker 13: Of exit, Yeah, I would say yes, and I think
Speaker 13: it's faster. So the companies that I've invested in so far.
Speaker 13: As an example in AI, Jasper and deep l are
Speaker 13: two of the fastest growing software companies that I have
Speaker 13: ever seen in twenty eight years, I've seen a lot
Speaker 13: of companies. They're rocket ships the adoption because they solve
Speaker 13: a very real problem for customers. They each have tens
Speaker 13: of thousands of paying business customers already, and so I
Speaker 13: think we'll see exits even faster. I think these are
Speaker 13: IPO worthy companies, and so I think that's kind of
Speaker 13: exits will be the same, but I think they'll be
Speaker 13: even faster than what we've seen in the past.
Speaker 3: What we've seen and you just mentioned crypto, there is
Speaker 3: not only talk of a hype cycle, but also some
Speaker 3: talk of.
Speaker 5: Lack of regulation. How are you seeing round corners.
Speaker 3: I know you said your crystal ball isn't good as others,
Speaker 3: but I'm pretty sure it is because that's why you're
Speaker 3: a VC. What are you for seeing in terms of
Speaker 3: regulatory strain and the race for AI being a certain
Speaker 3: and safe one.
Speaker 13: Yeah, First off, I think the hype around AI is
Speaker 13: under hyped given the impact I think it is going
Speaker 13: to have on the way we work and live in
Speaker 13: terms of the regulation. I would say, in my experience
Speaker 13: in business, it is so uncommon for me to see
Speaker 13: all parties agree that regulation is needed and want to
Speaker 13: collaborate together across policy makers, founders, technologists, etc. And so
Speaker 13: I'm very confident that the industry as a whole is
Speaker 13: going to address that. I think there are some obvious
Speaker 13: and no brainer areas where regular will come into play
Speaker 13: that'll be good for everybody. Where I'm focused is gosh,
Speaker 13: the amazing technical lead forward here can solve things in
Speaker 13: healthcare in industries that I think could be an education
Speaker 13: that can be game changing for us as humans across
Speaker 13: the world.
Speaker 4: Caroline, the humble opinion of Samir de Lakia, partner over
Speaker 4: a best of adventures will called twenty billion dollars to
Speaker 4: play with.
Speaker 3: Yeah, quite phenomenal, don't now for what's going viral uvii
Speaker 3: just raised a hundred million dollars from investors including General Motors,
Speaker 3: CarMax and Look the company is using artificial intelligence for
Speaker 3: vehicle inspections. Please to see with us the person who
Speaker 3: can explain exactly how CEO and co founder Emir Heava,
Speaker 3: it is great to have some time with the Amir
Speaker 3: so I drive in and what automatically you can understand
Speaker 3: what's wrong with my vehicle?
Speaker 5: How is this going to work?
Speaker 10: So exactly? At UVII, it's kind of you can think
Speaker 10: of us like MRI for the vehicle. We have a
Speaker 10: few systems. You simply drive through our systems and then
Speaker 10: we're able within a few seconds to really understand the
Speaker 10: full condition of the vehicle. We're taking images of the tires,
Speaker 10: the undercarriage, the whole exterior. So if you have any leakages,
Speaker 10: any expire tires, any issues that were in tear of
Speaker 10: the tires, were simply able to find out everything.
Speaker 4: Hanneko Ventures led the round, but GM did participate through
Speaker 4: its venture round. I thought we'd use that as a
Speaker 4: sort of case study. Do you do business with General Motors?
Speaker 4: What is it that you actually sell to the auto
Speaker 4: makers or to the service shops.
Speaker 10: So we have quite a few partners. It was published
Speaker 10: that we work with General Motors. We work with them
Speaker 10: on mainly on their dealerships to be able to service
Speaker 10: their customers better. It's really important for us to give
Speaker 10: a better customer experience while someone driving into the dealership,
Speaker 10: exposing kind of the issues and really understand the full
Speaker 10: condition of the vehicle.
Speaker 7: We are working with them on the dealerships.
Speaker 10: But also we have more partners like CarMax, like Volvo,
Speaker 10: like Yundai and Tuta that invested us in the previous round.
Speaker 7: We're also working with them as well.
Speaker 4: Bloomberg reported that the deal valued UVI at around eight
Speaker 4: hundred million dollars. How difficult was that to raise the
Speaker 4: funds in this environment from those partners and I guess
Speaker 4: we wanting to hit unicorn status. I think right now
Speaker 4: we're really focusing on building value. Samir just spoke about
Speaker 4: companies that really needs to approve that they have customers
Speaker 4: who are bringing value to their customers, and this is
Speaker 4: exactly what we are doing. We are working with all
Speaker 4: of our partners, where GM and the others, to make
Speaker 4: sure that our products bring value not only to our customers,
Speaker 4: but also to their customers.
Speaker 7: And this is what is important, and this is.
Speaker 10: Why we were still able to raise fairly a lot
Speaker 10: of money, especially right now, which is slightly harder in
Speaker 10: terms of everything that is going on the economics CARO.
Speaker 4: They describe it as the MRI machine for Vehicle inspection,
Speaker 4: but really this is a story about artificial intelligence.
Speaker 3: Yeah, and I'm interested in to that end, how do
Speaker 3: you actually say that this is an artificially intelligent at its.
Speaker 5: Foundation level company.
Speaker 3: Because you're running it through images, I'm assuming to be
Speaker 3: able to understand whether your tiles are looking good or
Speaker 3: whether other parts. But how do how do you prove
Speaker 3: to the investor base that you haven't just tacked on
Speaker 3: AI to make yourself sexy?
Speaker 10: Right, So basically, what we're showing the investors, how does
Speaker 10: it really work right? How do how do we are
Speaker 10: able to really find all the issues at the vehicle?
Speaker 10: How do things work in the back end. The fact
Speaker 10: that we're able to break the vehicle into the different parts,
Speaker 10: the fact that we're able to find different things really
Speaker 10: really quickly. These are the things that are important to
Speaker 10: our investors to make sure we have a really strong
Speaker 10: foundation off models and AI based models. They can really
Speaker 10: work for every vehicle, every type of vehicle, vehicle, and
Speaker 10: any condition of the vehicle that we're seeing. And this
Speaker 10: is kind of why it's really important and kind of
Speaker 10: the strength of your AI because it really helps us
Speaker 10: to even support things we haven't seen before. So if
Speaker 10: there's a new vehicle we haven't seen it before, we're
Speaker 10: still able to find most of the damages on that vehicle,
Speaker 10: even when we didn't see the specific type or model
Speaker 10: off the vehicle.
Speaker 7: And that's kind of the strength of what we're building.
Speaker 3: V I faced Nehir. Well, you're in Jersey, right, you
Speaker 3: came from Israel. Where is your tech talent at the
Speaker 3: moment for this?
Speaker 10: So both here and here in Jersey we have offices
Speaker 10: both in in Jersey but also in Ohio, and we
Speaker 10: also have an office in Israel. We also have offices
Speaker 10: in Germany and the UK.
Speaker 4: Very quick and where will you build and manufactured the
Speaker 4: systems here in North America?
Speaker 10: Where so we're now manufacturing here in Indianapolis and that
Speaker 10: help us to scale a lot quicker and to share
Speaker 10: more systems to our customers.
Speaker 4: All right, Oh, thanks to mere Hava, the CEO and
Speaker 4: co founder of uv I.
Speaker 7: Thank you very much.
Speaker 4: That does it for this edition of Bloomberg Technology. Stay
Speaker 4: with Bloomberg Television because we're speaking to the Nicola CEO,
Speaker 4: Carol Michael Loscheller who's coming up with me and Matt
Speaker 4: Miller and John. I meant in the next hour here
Speaker 4: on Bloomberg TV to.
Speaker 3: Power people that love all things autos. Sitting down with
Speaker 3: Michael Mimmile. Do not forget to check out our podcast.
Speaker 3: You can find it all on the terminal. You can
Speaker 3: be online on Apple, Spotify, iHeart, wherever you like to
Speaker 3: consume your audio.
Speaker 5: Come do it with us and.
Speaker 3: Get your AI fixed, because boy, are we focused on
Speaker 3: it at the moment.
Speaker 5: From New York. From San Francisco, this is a Bloomberg