WEBVTT - Meta's Revenue Beats, Boosts Buybacks 0:00:01.320 --> 0:00:05.680 This is Bloomberg Business Week inside from the reporters and 0:00:05.840 --> 0:00:09.400 editors who bring you America's most trusted business magazine, plus 0:00:09.480 --> 0:00:13.640 global business, finance and tech news. The Bloomberg Business Week 0:00:13.680 --> 0:00:18.600 Podcast with Carol Manser and Tim Stinebec from Bloomberg Radio. 0:00:19.640 --> 0:00:22.000 All right, everybody you're listening in watching Bloomberg Business Week, 0:00:22.040 --> 0:00:24.720 what are you thinking. I'm thinking that Romaine is like 0:00:24.840 --> 0:00:30.000 ready to go at it about meta earnings. I keep 0:00:30.040 --> 0:00:31.520 staying with climate change. We're all going to be living 0:00:31.520 --> 0:00:33.080 in the metaverse because you're not gonna be able to 0:00:33.120 --> 0:00:36.199 go outside. But having said that, who knows? I know 0:00:36.320 --> 0:00:39.280 someone who knows everything? Does she? Yeah, we've got Alex. 0:00:40.680 --> 0:00:43.000 We're very pleased with her with us. In fact, she 0:00:43.080 --> 0:00:45.519 was in here before these earnings even came out. She's 0:00:45.520 --> 0:00:48.440 furiously typing away getting to the bottom of what's happening 0:00:48.440 --> 0:00:51.400 with shares of Facebook. It is formally, of course Facebook 0:00:51.400 --> 0:00:54.080 now it's metal platforms just out with earnings. I want 0:00:54.080 --> 0:00:56.000 to get back to uh these right now. And we 0:00:56.040 --> 0:00:58.360 got Bloomberg Technology Report Alex Brinka here in our Bloomberg 0:00:58.400 --> 0:01:01.040 Interactor Broker's studio to do it. Okay, So Alex, I 0:01:01.040 --> 0:01:03.720 know you weren't paying attention to what Carol remained. Katie 0:01:03.760 --> 0:01:06.039 and I were all yelling about because you're actually doing important, 0:01:06.080 --> 0:01:08.160 real work. But now that you've had a good six 0:01:08.200 --> 0:01:14.080 minutes to give I was we were what are you 0:01:14.120 --> 0:01:15.959 seeing what sticks out here? I'll tell you what jumping 0:01:15.959 --> 0:01:17.959 out to me in six minutes that we're also sharing 0:01:17.959 --> 0:01:20.480 on the blog on the terminal revenue beat for the 0:01:20.520 --> 0:01:23.400 fourth quarter um they also seem to have some pretty 0:01:23.400 --> 0:01:27.240 strong revenue estimates for the first quarter. First quarter revenue 0:01:27.360 --> 0:01:30.640 estimates of billion to twenty and a half billion straddle 0:01:30.760 --> 0:01:33.399 what analysts were estimating. So that's exciting. I bring that 0:01:33.600 --> 0:01:36.600 add dollars. That is the majority of their revenue is 0:01:36.640 --> 0:01:40.840 AD dollars, so close to upwards of that is AD dollars. 0:01:40.840 --> 0:01:44.000 So that to me is saying that what we heard 0:01:44.000 --> 0:01:46.720 from Snap yesterday that the malaise in the AD market 0:01:46.800 --> 0:01:49.680 is leveling off, at least to the level of folks expect. 0:01:50.240 --> 0:01:52.720 That seems to kind of play out that narrative. Who 0:01:52.720 --> 0:01:54.760 knows what we'll hear on the call. We're looking for 0:01:54.800 --> 0:01:57.080 some more clues on where the AD market is going, 0:01:57.120 --> 0:01:59.800 but that top line number is really jumping out at me. 0:02:00.280 --> 0:02:02.920 Another number that the back. The buy back was my 0:02:03.000 --> 0:02:06.440 number two forty billion dollars in share buy backs. Look, 0:02:06.640 --> 0:02:09.639 last year two was the worst year on record for 0:02:09.720 --> 0:02:13.600 Meta They fell what six um on the year, So 0:02:13.840 --> 0:02:16.160 we've had a little bit of recovering the stock. Definitely 0:02:16.200 --> 0:02:18.320 a jump of the stock this um this afternoon up. 0:02:19.400 --> 0:02:23.680 But clearly the company thinks that the shares are undervalued now. 0:02:23.800 --> 0:02:28.080 Investors sold off last year basically because they're concerned about 0:02:28.080 --> 0:02:30.720 where this company is going in terms of strategy. You 0:02:30.760 --> 0:02:32.960 have the ad business, like we said, makes up a 0:02:33.000 --> 0:02:35.080 majority of revenue, but a lot of the focus and 0:02:35.120 --> 0:02:37.480 the renaming of the company has been on this kind 0:02:37.520 --> 0:02:40.400 of far flung virtual reality future that the company calls 0:02:40.480 --> 0:02:43.200 the Metaverse. Now, when it comes to earnings, the Metaverse 0:02:43.240 --> 0:02:46.440 sits in a business unit called Reality Labs. Reality Labs 0:02:46.680 --> 0:02:49.720 is a big loser. They lost four point to eight 0:02:49.760 --> 0:02:53.000 billion dollars in the fourth quarter, more than analysts estimated. 0:02:53.040 --> 0:02:55.519 So when it comes to the hard questions that will 0:02:55.520 --> 0:02:58.360 be on costs, and Reality Labs seem to be the 0:02:58.360 --> 0:03:00.919 big cost suck with a big question mark these days. 0:03:00.919 --> 0:03:02.840 But Mark Zuckerbert coming out in a statement saying that 0:03:03.680 --> 0:03:07.240 three the management theme is quote year of efficiency focused 0:03:07.240 --> 0:03:10.080 on becoming a stronger and more nimble organization. Is it 0:03:10.120 --> 0:03:12.680 a nod to the thousands of people who were laid 0:03:12.720 --> 0:03:16.520 off just a few weeks ago of the workforce laid 0:03:16.520 --> 0:03:19.760 off in the end of last year. So yes, it 0:03:19.800 --> 0:03:22.280 needs to be. And it seems like he's projecting that 0:03:22.360 --> 0:03:25.960 it's not just a change in the cost structure, but 0:03:26.040 --> 0:03:28.880 it's a change in how the company is thinking going forward. 0:03:29.080 --> 0:03:31.480 Remember this is a company that's only seen growth up 0:03:31.480 --> 0:03:34.440 into the right right. We we've seen now sales declines 0:03:34.480 --> 0:03:36.880 for the first time a few quarters in the row 0:03:37.160 --> 0:03:39.960 ever for Meta or when it was called Facebook. So 0:03:40.280 --> 0:03:42.680 it seems like they're trying to kind of um at 0:03:42.720 --> 0:03:46.760 least project to the street a reason to give patients, 0:03:46.880 --> 0:03:49.600 which is what he was asking for last quarter. And 0:03:49.640 --> 0:03:52.040 he wasn't afforded by the market when the stock fell 0:03:52.920 --> 0:03:55.320 on the last earnings day, So it seems like he 0:03:55.520 --> 0:03:57.920 is needing to change his tune a little bit more 0:03:58.160 --> 0:04:00.440 from trust us. We know what the future is going 0:04:00.480 --> 0:04:02.440 to look like too. Oh look, we're actually going to 0:04:02.520 --> 0:04:05.600 be efficient now and kind of drive towards running a 0:04:05.600 --> 0:04:08.040 more kind of priority focus business. Is that first quote 0:04:08.080 --> 0:04:10.800 revenue outlook was a miss or disappointing, would we be 0:04:10.840 --> 0:04:13.640 having a much different conversation right now. Absolutely, that's what 0:04:13.680 --> 0:04:16.240 we saw hopping with Snap yesterday. So if that first 0:04:16.320 --> 0:04:19.200 quarter was a miss, I think you can continue to 0:04:19.240 --> 0:04:21.839 have kind of questions around. Look, if you want to 0:04:21.839 --> 0:04:24.640 build a decades of virtual reality future, you've got to 0:04:24.680 --> 0:04:27.360 fund it somehow. Don't forget to forget about the bread 0:04:27.400 --> 0:04:29.680 and butter with the caveat that. This is an impossible 0:04:29.760 --> 0:04:32.400 question to answer. I'm gonna ask you anyway, is the 0:04:32.480 --> 0:04:36.480 sixteen point six percent rise in Facebook stock right now 0:04:37.080 --> 0:04:40.679 about the share buy back or about the revenue number? 0:04:41.160 --> 0:04:44.599 I would guess it's a mix of both. Um, if 0:04:44.600 --> 0:04:46.880 this comes back down to earth, I will say it's 0:04:46.920 --> 0:04:50.159 the share buy back. If it continues to say stay high, 0:04:50.160 --> 0:04:52.240 I would say it's the revenue number and not to 0:04:52.360 --> 0:04:54.760 throw it to tomorrow. But we get Alphabet earnings tomorrow 0:04:54.800 --> 0:04:57.200 as well. Alphabet and Meta are the two kind of 0:04:57.200 --> 0:05:00.000 monsters in the digital ad space. They've really traded all 0:05:00.000 --> 0:05:03.240 off as there's been kind of economic uncertainty and marketers 0:05:03.279 --> 0:05:05.880 pulling back on spending. So if that stays up and 0:05:05.960 --> 0:05:08.640 Alphabet hits, then I think, Um, this is more about 0:05:09.080 --> 0:05:11.520 about the first not necessarily scientific, but just doing our 0:05:11.600 --> 0:05:14.480 g I P O aftermarket you know function on the terminal. 0:05:14.520 --> 0:05:16.760 It looks like as soon as the revenue number hit, 0:05:17.000 --> 0:05:19.160 the stock shot up. I'm not saying that it didn't 0:05:19.160 --> 0:05:21.440 go a tiny bit higher on the buy back news, 0:05:21.520 --> 0:05:23.159 but as soon as that revenue number and I would 0:05:23.200 --> 0:05:26.760 agree that if they're able to fund it right, people 0:05:26.800 --> 0:05:28.600 are going to invest in and say, okay, go ahead, 0:05:28.640 --> 0:05:30.800 because you're still making a ton of money. So Facebook, 0:05:31.200 --> 0:05:34.080 Facebook is an advertising company now that that sells ads 0:05:34.120 --> 0:05:38.280 in Instagram and in Facebook always it has, but you know, 0:05:38.520 --> 0:05:40.560 over the last year, Mark Zuckerberger said, we are a 0:05:40.600 --> 0:05:43.240 metaverse company. We changed the ticker name. We're investing in 0:05:43.240 --> 0:05:46.320 Reality Labs, which, as you noted, lost billions of dollars 0:05:46.360 --> 0:05:49.600 in the fourth quarter. Uh, aleo remain two point Oh well, 0:05:49.640 --> 0:05:53.840 I'm Facebook stock up seventeen point seven percent right now, Alex. Okay, 0:05:53.920 --> 0:05:57.320 So a lot of so many questions for you. Um, 0:05:57.480 --> 0:05:59.560 if we think about this from the perspective of Snap, 0:05:59.640 --> 0:06:02.640 what they get right and Snap get wrong? Meta got 0:06:02.760 --> 0:06:05.360 right not taking a big hit to kind of change 0:06:05.360 --> 0:06:07.080 its ad product in the first start of the year. 0:06:07.320 --> 0:06:10.760 Meta's ad ad ads on Facebook and Instagram are really 0:06:10.800 --> 0:06:13.480 focused on direct response, so that's where you are selling 0:06:13.520 --> 0:06:15.800 products immediately. That's the slice of the digital ad world 0:06:15.839 --> 0:06:19.440 where marketers are still spending because it is seeing their 0:06:19.440 --> 0:06:22.560 dollars go to work immediately. Snap had some very snap 0:06:22.600 --> 0:06:25.880 focus changes yesterday where they said, we're actually rolling out 0:06:25.880 --> 0:06:28.240 a lot of technology updates to our ad product and 0:06:28.320 --> 0:06:30.119 we're going to take a big hit in the first quarter. 0:06:30.520 --> 0:06:34.400 That being said, Meta's the giant right aside techically, so 0:06:34.760 --> 0:06:37.120 Meta carries a lot more weight. They have a much 0:06:37.200 --> 0:06:39.960 larger chunk um. They had to do woppolie them and 0:06:40.240 --> 0:06:43.599 and Google, which they lost um last year, but they're 0:06:43.600 --> 0:06:45.920 still kind of the strongest ones out there. So I 0:06:45.960 --> 0:06:49.240 think again some leveling off in terms of some of 0:06:49.240 --> 0:06:51.840 this malaise in the ad market seems to be positive 0:06:51.839 --> 0:06:54.239 news and that's reading through and at least the revenue 0:06:54.240 --> 0:06:57.320 projection to you. I think on the blog we're saying, 0:06:57.320 --> 0:06:59.200 I think that's the first time that they've hit two 0:06:59.200 --> 0:07:03.760 billion in daily active users. I mean, the behemoth cool stuff. 0:07:04.160 --> 0:07:06.960 Alex Brinka, thank you so much. She covers a lot 0:07:07.000 --> 0:07:09.560 of the technology world for us here at Bloomberg joining 0:07:09.640 --> 0:07:15.360 us in studio. This is Bloomberg business Week Inside from 0:07:15.360 --> 0:07:18.520 the reporters and editors who bring you America's most trusted 0:07:18.600 --> 0:07:22.800 business magazine, plus global business, finance and tech news. The 0:07:22.880 --> 0:07:27.400 Bloomberg Business Week Podcast with Carol Messer and Tim stinebec 0:07:27.760 --> 0:07:31.000 from Bloomberg Radio. All Right, so maybe you've heard of it, 0:07:31.040 --> 0:07:34.000 the nonprofit Core Response started by actor Sean Penn. That's 0:07:34.040 --> 0:07:35.960 really stepped up when it comes to helping people in 0:07:36.040 --> 0:07:40.320 Haiti that after the earthquake, for saving American lives during 0:07:40.320 --> 0:07:43.600 the pandemic and doing so much more so, Tim sounds 0:07:43.640 --> 0:07:45.840 like a lot of good deeds. I'm really coming into 0:07:45.840 --> 0:07:49.920 help up, clean up messy and difficult situations, right and well. 0:07:50.000 --> 0:07:52.960 And yet, as a Bloomberg Business Week investigation has found out, 0:07:53.000 --> 0:07:55.560 what was going on in the inside of the nonprofit, 0:07:55.560 --> 0:07:58.320 according to employees, was another mess as well. It's an 0:07:58.320 --> 0:08:00.840 exclusive story. It's in the upcoming new issue with Bloomberg 0:08:00.840 --> 0:08:03.280 Business Week. It's out on news stands tomorrow. It's already 0:08:03.280 --> 0:08:05.600 online at Bloomberg dot com, slash business Week and of 0:08:05.600 --> 0:08:08.440 course on the Bloomberg terminal. We've got with Bloomberg News 0:08:08.480 --> 0:08:11.000 Wealth Team reporter Sophie Alexander along with the editor of 0:08:11.040 --> 0:08:13.960 Bloomberg Business with Joe Webber, both in our Bloomberg Interactive 0:08:13.960 --> 0:08:16.840 Broker Studio. Joel, I, I I know this charity because they 0:08:17.360 --> 0:08:19.640 did so much work in the in Haiti and so 0:08:19.720 --> 0:08:23.200 much work during the pandemic. What happened, well, when when 0:08:23.240 --> 0:08:27.040 they were when core U was getting started UH in 0:08:27.160 --> 0:08:31.120 places like Haiti really was disaster relief response, right, and 0:08:31.200 --> 0:08:35.319 it was actually fairly modest um not you know, dozens 0:08:35.320 --> 0:08:39.079 of employees, not you know, millions upon millions of dollars. 0:08:39.559 --> 0:08:43.560 But COVID really changed that. And what the Sean penn 0:08:44.280 --> 0:08:47.720 Uh nonprofit did was really doubled down in Los Angeles 0:08:47.720 --> 0:08:51.680 and it became effectively like a de facto healthcare operation. 0:08:51.960 --> 0:08:56.360 But with that growth and this massive influx of money 0:08:56.400 --> 0:09:00.240 that it saw there also created some chaos. And think 0:09:00.240 --> 0:09:03.920 that chaos led to um so if he's reporting? Um so, so, 0:09:04.000 --> 0:09:05.800 if you what did you hear and where did that 0:09:05.880 --> 0:09:09.680 lead you? Yeah? So, like you said, they grew incredibly 0:09:09.760 --> 0:09:12.320 quickly during the pandemic. They were just about a dozen 0:09:12.480 --> 0:09:16.360 employees beforehand, and then they grew to thousands over the 0:09:16.360 --> 0:09:19.360 matter over a matter of months and less than seven 0:09:19.360 --> 0:09:24.640 million dollars in revenue in two million dollars, so that's 0:09:24.840 --> 0:09:27.640 enormous growth. And so I started reaching out to employees 0:09:27.679 --> 0:09:31.439 after I heard about this, and basically they were saying, yeah, 0:09:31.480 --> 0:09:34.400 it was a total mess inside. A lot of employees 0:09:34.440 --> 0:09:37.200 said there were a lot of financial issues, a lot 0:09:37.240 --> 0:09:40.160 of employees told me about sexual harassment, and so some 0:09:40.240 --> 0:09:43.320 of the testing sites, including the one at Dodger Stadium, 0:09:43.320 --> 0:09:45.880 which was the one of the largest, if not the 0:09:45.960 --> 0:09:49.400 largest testing site in the US during the pandemic. What 0:09:49.440 --> 0:09:51.680 I found so remarkable about this was the way head 0:09:51.720 --> 0:09:54.600 count exploded. You point out in your piece that head 0:09:54.640 --> 0:09:58.199 count went to three thousand plus people and some context 0:09:58.240 --> 0:10:00.319 there as you write, Sophie, it's larger in the bill 0:10:00.360 --> 0:10:03.160 and Melinda Gates Foundation at one point, that's right. They're 0:10:03.160 --> 0:10:06.199 an operating nonprofits, so you know, like they had all 0:10:06.240 --> 0:10:08.720 these people on the ground, and they started out just 0:10:08.760 --> 0:10:11.920 by getting volunteers to respond to the pandemic, but quickly 0:10:11.960 --> 0:10:14.360 started turning them into full time employees. And a lot 0:10:14.400 --> 0:10:18.160 of these were young people working their first jobs. Um. 0:10:18.200 --> 0:10:21.720 But then later on they brought also very experienced nonprofit 0:10:21.760 --> 0:10:25.760 employees for from other organizations who knew what how this 0:10:25.840 --> 0:10:29.520 was supposed to go? Okay, So the story starts um 0:10:29.600 --> 0:10:32.080 with the fundraiser and to just give a sense of 0:10:32.120 --> 0:10:35.480 the star power in the setting and where you know 0:10:35.559 --> 0:10:38.800 money money gets raised for a nonprofit like core response 0:10:38.840 --> 0:10:43.000 like take us there, take us to Miami. Sure, so 0:10:43.559 --> 0:10:45.840 nonprofit like this, you know it's a celebrity nonprofit. They 0:10:45.840 --> 0:10:48.800 spend a good amount of time and money on fundraisers. 0:10:48.920 --> 0:10:51.280 And these fundraisers are home to Seam Penn and a 0:10:51.320 --> 0:10:54.119 lot of his rich and famous friends like Leonardo DiCaprio. 0:10:54.280 --> 0:10:57.000 The one um in the story at art Bosel in 0:10:57.040 --> 0:11:01.240 Miami was hosted by the pop singer Anita Delphine or No, 0:11:01.480 --> 0:11:05.199 the heir to the world's largest fortune, was also there, 0:11:05.360 --> 0:11:09.439 and everyone was told that this was going to raise 0:11:09.520 --> 0:11:13.240 money for Latin America COVID response. Um, that's what was 0:11:13.280 --> 0:11:15.439 on the invitations that were shared with Business Week, That's 0:11:15.440 --> 0:11:18.839 what was on the marketing materials. And I spoke with 0:11:18.880 --> 0:11:22.920 employees who said it took a lot of nagging of 0:11:22.960 --> 0:11:26.240 the CEO to hey, why hasn't this money reached Brazil yet? 0:11:26.280 --> 0:11:28.640 Because that was basically the only place they were doing 0:11:28.720 --> 0:11:31.000 such work at the time. And why hasn't gone to 0:11:31.040 --> 0:11:33.080 Brazil yet? Why hasn't gone to Brazil yet? And the 0:11:33.120 --> 0:11:36.320 CEO was essentially like, you know, it doesn't matter if 0:11:36.360 --> 0:11:38.880 we actually spend it in Brazil. Um. That's what these 0:11:38.880 --> 0:11:42.600 employees were telling me. And so according to an email 0:11:42.600 --> 0:11:45.160 that we saw, it ultimately took almost six months to 0:11:45.240 --> 0:11:47.600 make it to Brazil and that's ultimately where all the 0:11:47.600 --> 0:11:50.240 money was allocated. But it's kind of a confusing mess 0:11:50.280 --> 0:11:52.800 in between. So fisis about like an organization, like when 0:11:52.800 --> 0:11:54.839 you talk about the money, how it started out, and 0:11:54.880 --> 0:11:57.600 then you know, you're talking about raising two million dollars. 0:11:57.800 --> 0:11:59.880 Is it a case of an organization and nonprofit that 0:12:00.000 --> 0:12:02.240 all of a sudden just ran really quickly and they 0:12:02.280 --> 0:12:05.160 didn't have the people, the infrastructure, the systems in place. 0:12:05.280 --> 0:12:08.440 Or is this about an organization that maybe internally had 0:12:08.480 --> 0:12:13.160 some really bad eggs. Well, yeah, that that Their response 0:12:13.240 --> 0:12:15.800 to our reporting is basically, you know, they responded really 0:12:15.840 --> 0:12:18.480 quickly to the pandemic. It was a huge challenge and 0:12:19.080 --> 0:12:22.320 an unprecedented one, and they rose their hands and said 0:12:22.360 --> 0:12:24.400 we're going to do this, and they did it well, 0:12:24.400 --> 0:12:26.559 to be fair, and and they did it well. They 0:12:26.600 --> 0:12:31.559 did you know, respond to the to the pandemic. Well, um, 0:12:31.600 --> 0:12:34.079 and that's what they're saying. But you know, I'm talking 0:12:34.080 --> 0:12:36.360 to people who are saying, we're almost three years on 0:12:36.480 --> 0:12:40.400 now and it's still internally a problem, financially a problem. 0:12:40.520 --> 0:12:43.120 And they're saying that a lot of this runs up 0:12:43.160 --> 0:12:46.440 to leadership basically not wanting to do much and so 0:12:46.520 --> 0:12:48.560 walk us through some of the financial problems that some 0:12:48.640 --> 0:12:51.360 of the employees flagged to you and your reporting. Sure, 0:12:51.400 --> 0:12:53.960 so it's a lot of you know, kind of mundane 0:12:54.080 --> 0:12:57.880 stuff that's kind of technical, but like payroll stuff. For example, 0:12:58.080 --> 0:13:00.480 I spoke with an employee who was getting paid months 0:13:00.520 --> 0:13:03.280 after they had quit and they had raised the issue 0:13:03.360 --> 0:13:05.760 with the nonprofit and didn't hear anything. I was going 0:13:05.800 --> 0:13:12.360 to say, beats the alternative, Okay, thank you, you know, no, 0:13:12.520 --> 0:13:18.040 but it sounds like like oversight financially coming in, dollars 0:13:18.040 --> 0:13:20.720 coming in and then somebody who's not even employed anymore 0:13:20.760 --> 0:13:24.880 is still getting paid. It's federal dollars to taxpair dollars, 0:13:25.000 --> 0:13:29.360 right exactly. Um, what about like, who do you hearing 0:13:29.440 --> 0:13:33.840 from beyond the employees, anybody from senior management? They did 0:13:34.000 --> 0:13:38.360 sean calling up, you know, they declined to make Sean 0:13:38.679 --> 0:13:41.880 available for an interview, the CEO and the CEO available 0:13:41.880 --> 0:13:43.840 for an interview. Well, Carol makes a good point. What 0:13:44.040 --> 0:13:47.360 is Sean Penn's involvement. So he's the chair of the board, 0:13:47.559 --> 0:13:50.960 which basically means he's responsible for the thing. If there 0:13:51.000 --> 0:13:54.240 are problems, he's responsible for making sure that leadership is 0:13:54.280 --> 0:13:57.320 doing their job and doing it well and responsibly. UM. 0:13:57.360 --> 0:13:59.280 But on a day to day what people telling me, 0:13:59.679 --> 0:14:01.839 he's not really involved all that much except for kind 0:14:01.840 --> 0:14:04.600 of as a figurehead. And who is Who's who's running point? 0:14:04.920 --> 0:14:08.000 It's the CEO and Lee and and tell us more 0:14:08.040 --> 0:14:11.760 about her and Sean and how they came to basically 0:14:11.840 --> 0:14:14.880 co lead this organization. Sure, so they met in Haiti 0:14:15.320 --> 0:14:19.040 in the wake of the two earthquake. UM. She has 0:14:19.360 --> 0:14:22.600 been had been working in nonprofits in Haiti specifically for 0:14:22.640 --> 0:14:25.480 a while. UM. She kind of bounced around until ultimately 0:14:25.920 --> 0:14:30.320 she was brought into Core made CEO in and people 0:14:30.360 --> 0:14:33.360 say that Sehn and her close, you know, like they 0:14:33.480 --> 0:14:36.200 told us that they meet monthly. UM. People said that 0:14:36.280 --> 0:14:38.240 it seems like a lot of what Anne does is 0:14:38.280 --> 0:14:40.200 to try to make Sean look good and to try 0:14:40.240 --> 0:14:43.960 to keep Sean happy. UM. And a lot of people 0:14:44.040 --> 0:14:48.520 said that, you know, like it ultimately runs up to her. 0:14:48.640 --> 0:14:50.280 Everything runs up to her. She's the one who makes 0:14:50.280 --> 0:14:53.000 their decisions. And if there's an issue and it's ultimately 0:14:53.040 --> 0:14:55.920 run up to her, she's the one who's saying it's 0:14:56.240 --> 0:15:00.640 it's not our problem. Okay. So obviously corn At this 0:15:01.080 --> 0:15:05.320 response to covid um as those test sites and vaccine 0:15:05.360 --> 0:15:10.280 sites have wound down, curious what's happened since uh they 0:15:10.320 --> 0:15:14.480 made those that that initiative. Now they're in Ukraine. UM. 0:15:14.520 --> 0:15:18.680 Sean Penn was with Zelenski the day Russia invaded UM 0:15:18.760 --> 0:15:22.240 and so that really opened up an opportunity for CORE 0:15:22.360 --> 0:15:24.200 at a time when it was kind of hard for 0:15:24.280 --> 0:15:28.720 other international nonprofits to get involved. UM. They're also responding 0:15:28.760 --> 0:15:33.960 to domestic hurricanes, so in Puerto Rico, in Florida, UM. 0:15:34.200 --> 0:15:37.120 And what I've been hearing from not just employees but 0:15:37.200 --> 0:15:39.240 also some partners who are seeing Corps work on the 0:15:39.240 --> 0:15:42.440 ground is that, you know, it seems like they're showing 0:15:42.520 --> 0:15:45.000 up to these disasters, they're taking a bunch of photos, 0:15:45.080 --> 0:15:47.400 they're fundraising a bunch of money, and then they're paying 0:15:47.480 --> 0:15:50.600 less attention to how that money gets spent to actually 0:15:50.600 --> 0:15:52.560 respond to the disasters. Yeah, one of the things that 0:15:52.560 --> 0:15:55.360 sticks with me is like they're known in this world 0:15:55.440 --> 0:15:58.920 for showing up with cameras before almost anything else, right, 0:15:59.040 --> 0:16:02.360 like be seeing in the dollars keep flowing that way, 0:16:02.400 --> 0:16:05.440 but maybe maybe there's not that much impact after the fact. 0:16:05.560 --> 0:16:07.960 That's what felt like one common denominator. They made sure 0:16:08.040 --> 0:16:10.600 that there was good visuals, even if they weren't necessarily 0:16:10.720 --> 0:16:14.600 very involved UM seconds and net net takeaway of kind 0:16:14.600 --> 0:16:19.240 of whirreness is where it stands. It's complicated. I know, 0:16:19.320 --> 0:16:22.280 it's never well one thing that I think it boils 0:16:22.280 --> 0:16:25.360 down to this California All this rolls up to a G. 0:16:25.520 --> 0:16:27.360 So if AG is gonna look at anything, you know, 0:16:27.440 --> 0:16:31.680 they've we've clearly spoken enough current and former employees that 0:16:32.200 --> 0:16:33.800 there's some stuff to look into here. Yeah, and I 0:16:33.800 --> 0:16:35.960 would say definitely do a read through because the sexual 0:16:36.000 --> 0:16:39.440 harassment concerns um which were also brought to the attention 0:16:39.440 --> 0:16:42.080 at the top, that seemed to have been dismissed, at 0:16:42.120 --> 0:16:45.240 least according to the employees accounts. Great story. Sophie Alexander Wealth, 0:16:45.280 --> 0:16:48.320 team reporter at Bloomberg News here in our Interactive Broker studio, 0:16:48.640 --> 0:16:50.800 the story and the upcoming new issue of Bloomberg Business Week, 0:16:50.840 --> 0:16:52.640 or thanks to Joe Webber, the editor of Business Week. 0:16:52.680 --> 0:16:54.640 You can also find it at Bloomberg dot com and 0:16:54.680 --> 0:16:58.440 always on the Bloomberg terminal. You're listening to the Bloomberg 0:16:58.520 --> 0:17:01.840 Business Week podcast. Catch us live week days from two 0:17:01.880 --> 0:17:05.399 to five pm Easter on Bloomberg Radio, the Bloomberg Business 0:17:05.480 --> 0:17:08.240 a band you do. You can also listen live to 0:17:08.280 --> 0:17:12.399 our flagship New York station, Just Say Alexa, Play Bloomberg, 0:17:12.440 --> 0:17:17.760 Elove and Dirty I focused on but just a few 0:17:17.760 --> 0:17:20.639 weeks ago, we were focused on Microsoft, their interests and 0:17:20.640 --> 0:17:25.359 then subsequent further investment in open aies chat GPT, which 0:17:25.440 --> 0:17:28.160 is really kicked off, safe to say, Tim another round 0:17:28.160 --> 0:17:31.040 of euphoria when it comes to all things artificial intelligence. 0:17:31.320 --> 0:17:33.320 You add dot AI to the end of your name, 0:17:33.440 --> 0:17:35.080 or you say that you're you know a company that's 0:17:35.119 --> 0:17:38.600 working with AI or chat GPT like BuzzFeed, and you 0:17:38.640 --> 0:17:40.880 see what investors do. It certainly set the investment world 0:17:40.920 --> 0:17:44.000 scrambling to figure out who will benefit. Carol, our next guest, 0:17:44.000 --> 0:17:46.720 has some thoughts on how chat GPT could change voice 0:17:46.800 --> 0:17:49.399 first products and services. Very pleased to have with us. 0:17:49.520 --> 0:17:53.200 Nitti the Donni CEO at the voice technology software company Rain, 0:17:53.440 --> 0:17:56.160 joining us via zoom in New York City. If you're 0:17:56.160 --> 0:17:57.959 good to have you with us this afternoon. How are you. 0:17:58.920 --> 0:18:01.160 I'm great, Thank you so much. It's good to be here. 0:18:01.280 --> 0:18:03.320 It's good to have you with us. Explain how RAIN works. 0:18:04.480 --> 0:18:08.919 So Rain is a conversational AI company. We build voice 0:18:09.040 --> 0:18:12.560 products for desk less workers. So if you think about 0:18:13.080 --> 0:18:17.560 um Alexa or Google Assistant, we build professional grade versions 0:18:17.640 --> 0:18:21.480 of those assistants specifically for an audience called deskless workers. 0:18:21.520 --> 0:18:23.800 So these are workers who do not work, you know, 0:18:23.960 --> 0:18:27.080 at a desk literally every day. They're moving around in 0:18:27.160 --> 0:18:32.960 their jobs. So in industries like construction, automotive, healthcare, professionals 0:18:33.040 --> 0:18:35.240 moving around in their jobs and they don't you know, 0:18:35.440 --> 0:18:39.040 they need information and data at their fingertips. So we 0:18:39.320 --> 0:18:42.439 are able to give that to them through voice, critical 0:18:42.520 --> 0:18:45.040 information that they need at their fingertips. How fast is 0:18:45.080 --> 0:18:49.399 your business growing? Um? You know, we just raised a 0:18:49.520 --> 0:18:52.119 recent round of funding, so we have fifteen million total 0:18:52.240 --> 0:18:55.440 and funding UM and you know, we're really excited for 0:18:55.520 --> 0:18:57.399 what the next eighteen months is going to bring. But 0:18:57.680 --> 0:18:59.439 but what does that mean in terms of how much 0:18:59.440 --> 0:19:01.280 your business has grown. I don't know, give us the 0:19:01.359 --> 0:19:04.719 last twelve months or so. Yeah, I mean we are 0:19:04.920 --> 0:19:08.399 so right now. Our core product is called ortho UM. 0:19:08.640 --> 0:19:11.439 It is a product for the automotive industry. So if 0:19:11.480 --> 0:19:15.239 you think about technicians who are working on vehicles, UM, 0:19:15.440 --> 0:19:19.520 we essentially provide them o EM data at their fingertips. 0:19:19.560 --> 0:19:22.520 So instead of having to get out from under a vehicle, 0:19:22.640 --> 0:19:26.520 go over to a computer, search a database for specifications 0:19:26.640 --> 0:19:29.520 like fluid type and whatever, you know, whatever whatever else 0:19:29.560 --> 0:19:32.439 they might need in the moment um, they can get 0:19:32.480 --> 0:19:34.560 that at their fingertips. So right now, our products is 0:19:34.600 --> 0:19:37.640 actually you know, we we are piloting in a number 0:19:37.680 --> 0:19:41.320 of different shops UM and and pre revenue at the 0:19:41.359 --> 0:19:45.560 moment is the technology that you have at RAIN? Is 0:19:45.640 --> 0:19:48.800 it about the database? Is about where where things are 0:19:49.160 --> 0:19:51.520 being found, where the answers are being found? Or is 0:19:51.560 --> 0:19:54.480 it about the voice recognition technology? Or is it both? 0:19:55.480 --> 0:19:58.960 It's both right UM. So it's essentially taking what is 0:19:59.600 --> 0:20:03.240 you know, number of different databases that exist today O E. 0:20:03.440 --> 0:20:06.840 M data that then feeds into another database called MOTOR 0:20:07.119 --> 0:20:10.680 for example, where these these technicians typically get their information 0:20:11.280 --> 0:20:13.960 and making that data conversational. And I know we're going 0:20:14.000 --> 0:20:16.440 to talk about chat GPT, but there are just so 0:20:16.560 --> 0:20:21.200 many parallels between that kind of conversational nature of the interaction. UM. 0:20:21.359 --> 0:20:24.359 So you know it's it's it's UM taking this data, 0:20:24.440 --> 0:20:27.520 making it conversational, but also making it domain specific. And 0:20:27.640 --> 0:20:30.119 what I mean by that is a lot of the 0:20:30.359 --> 0:20:33.600 AI that's out there today is generalist. So if you 0:20:33.680 --> 0:20:36.000 think of Alexa, or you think of even chat GPT, 0:20:36.119 --> 0:20:39.000 you're asking a question and you're getting a you know, 0:20:39.359 --> 0:20:42.639 they want to serve the general public, so you're getting 0:20:42.800 --> 0:20:45.920 a response back. UM. When you go really deep into 0:20:45.960 --> 0:20:49.240 an industry like automotive or healthcare, as we are, you 0:20:50.200 --> 0:20:53.600 really need to understand the nuances of that specific industry. 0:20:53.760 --> 0:20:57.480 So I'll give you a little bit of an example here. 0:20:57.920 --> 0:21:00.840 If you were to say we'll hut, which is a 0:21:01.080 --> 0:21:04.800