Speaker 1: From Mahard where Innovation, Money and Power Collie in Silicon
Speaker 1: Vallet NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.
Speaker 3: And Caroline Heider Bloomberg's world headquarters in New York. Ed
Speaker 3: Ludlow He's off today. This is Bloombag Technology coming up.
Speaker 3: Apple and Google in talks to use Google's Gemini AI
Speaker 3: in iPhones. Will break down the potential blockbuster agreement that
Speaker 3: could shake up the AI industry Prus. The Woodstock Festival
Speaker 3: of AI and Videos annual conference kicks off today and
Speaker 3: the company facing sky high expectations for investors. Willham full
Speaker 3: coverage ahead and Elon Musk's full interview with Don Lemon.
Speaker 3: It's out this morning after the billionaire canceled a planned
Speaker 3: partnership with the CNN. Veteran will bring you the takeaways
Speaker 3: what this means for X and why el says his
Speaker 3: Ketamin prescription is an investors' best interests. It's the most
Speaker 3: important story of the day when it comes to the
Speaker 3: stock moves the future of AI ahead of, of course, what
Speaker 3: we see from video. A little bit later, Alphabet shares
Speaker 3: soaring six point eight percent.
Speaker 4: Why because we understand that there are indeed some conversations
Speaker 4: into the works that Gemini will be the AI of
Speaker 4: choice when it comes to generative AI for Apple, of course,
Speaker 4: two billion phones.
Speaker 5: What does that mean?
Speaker 3: Well, broadly, we have two point six percent high for Apple.
Speaker 3: Now notably though, what does it mean for Apple on
Speaker 3: its own generative AI story? And why not Microsoft and
Speaker 3: open Ai so much to discuss the Bloomberg's Mark German
Speaker 3: who brought us the scoop? Of course you did, Mark,
Speaker 3: amazing bit of reporting. Now first, what does this mean
Speaker 3: from your perspective for Apple? Because where are we in
Speaker 3: its own generative AI story?
Speaker 6: Yeah, Caroline, thank you so much for having me.
Speaker 7: This is a sizable moment.
Speaker 6: For the AI industry, a big moment for relations between
Speaker 6: Apple and Google, and of course a big moment for Apple.
Speaker 6: Apple really has no choice but to get on the
Speaker 6: artificial intelligence chat GPT generative AI bandwagon. They were caught
Speaker 6: flat footed when all of those new software and AI
Speaker 6: initiatives started rolling out about a year and a half
Speaker 6: two years ago, and so Apple has a homegrown artificial
Speaker 6: intelligence model of its own. You're going to see Apple
Speaker 6: release several new AI features this year, but most of
Speaker 6: those features are focused on day to day productivity, proactive intelligence,
Speaker 6: doing things in the background. They're not focused on what
Speaker 6: we think of as AI today, which is essay creation,
Speaker 6: image generation, typing things into a Gemini or chet GPT
Speaker 6: or copilot like chatbot, and so to fill that gap,
Speaker 6: Apple is seeking an outside partner, and they've talked to
Speaker 6: two companies primarily, maybe a third, but the two they've
Speaker 6: talked to primarily are Open Ai, of course, and Google
Speaker 6: and Open AI and Apple held talks recently, but active
Speaker 6: talks are currently between Apple and Google about licensing Gemini
Speaker 6: to be used in iOS eighteen in the iPhone for
Speaker 6: generative AI use cases beginning later this year.
Speaker 5: Okay, that's an interesting take, isn't it.
Speaker 3: More broadly about the Microsoft relationship over are I'm many
Speaker 3: wondering whether how much of.
Speaker 5: A done deal this is go back to alphabet and
Speaker 5: what this.
Speaker 3: Means not only for Gemini, which of course has had
Speaker 3: some hits from a PR perspective, if not much more,
Speaker 3: but also it means sort of.
Speaker 5: Certain chips that they make.
Speaker 3: I mean, some people reading across that this isn't therefore
Speaker 3: just completely in video and an AMD's game here.
Speaker 6: Yeah, certainly this is a big moment for Gemini and
Speaker 6: Google as well. Depending on how this thing is branded,
Speaker 6: it can turn Gemini into more of a household name.
Speaker 7: From what I'm.
Speaker 6: Told talks, they're not early, they're not advanced, They're sort
Speaker 6: of somewhere in the middle. So this is not a
Speaker 6: done deal by any stretch of the imagination. The companies
Speaker 6: have some time here before Apple needs to make its
Speaker 6: Artificial intelligen announcement. Commercial terms haven't been worked out yet,
Speaker 6: nor has branding been worked out yet, but this definitely
Speaker 6: would take Gemini and put it, like you said, on
Speaker 6: billions of more devices, depending on where Apple does these
Speaker 6: AI integrations and if they slapped the Gemini name on it.
Speaker 6: Obviously this would be very big for Google, but it's
Speaker 6: unclear yet if they will do that. It's also unclear
Speaker 6: if Gemini would be the default or one of multiple
Speaker 6: large language model options for checkbots and other things within Siri,
Speaker 6: in addition to Apple's homegrown EIE tools, and.
Speaker 3: Not to mention what that means from an anti trust
Speaker 3: perspective of alphabet and Apple's relationship has been right through
Speaker 3: the calls of late Mark German, wonderful reporting. Thank you
Speaker 3: so much for bringing us the breakdown of the overall
Speaker 3: story that has really infused enthusiasm into the stocks today.
Speaker 3: Let's get more tap for you, Brentzdale, his Jeffrey's Equity
Speaker 3: research analyst, and let's start on what this means for
Speaker 3: Alphabet and indeed whether this deal can really get done
Speaker 3: from an anti trust perspective.
Speaker 5: What do you think, Brent.
Speaker 7: Well, I think and get done.
Speaker 8: Google needs it. I mean, right now, Google's had a
Speaker 8: really difficult run. It's been an investor story that most
Speaker 8: investors right now are are disappointed with the leadership, and
Speaker 8: obviously the.
Speaker 7: AI launches that they they've they've come out with.
Speaker 8: And so I'd say in terms of the most negative
Speaker 8: sentiment in any stock I cover right now is on Google.
Speaker 8: So they need a good win like this, and they
Speaker 8: need Gemini to to be put on the front burner
Speaker 8: and and this would be obviously a huge opportunity for them.
Speaker 8: Whether it happens or not, who knows at this point,
Speaker 8: but yeah, this is a this is a is a
Speaker 8: great opportunity for Google. I'd just say that right now,
Speaker 8: all the attention has really been on Microsoft with the
Speaker 8: open Eye relationship, and so obviously you're starting to see
Speaker 8: different alignments in different AI technologies, right, Microsoft and open Ai,
Speaker 8: obviously Apple, my Amazon's now aligning with others in the industry.
Speaker 8: So you're seeing kind of clear alignment in the industry
Speaker 8: around different AI leaders. And we think that again this
Speaker 8: would make sense given what's happened with the search relationship,
Speaker 8: to extend on Gemini out to the platform. And again
Speaker 8: I think the opportunity is great for consumers, which today
Speaker 8: a lot of these AI agents are.
Speaker 7: Kind of difficult to navigate.
Speaker 8: They're they're kind of wonky, right, So could Apple and
Speaker 8: Google seamlessly integrate this into the products, you know, where
Speaker 8: I can literally open up my Apple laptop and say
Speaker 8: what are my top appointments for today, you know, and
Speaker 8: the agent can read read off what's happening today that
Speaker 8: doesn't really exist. So there's a lot of integration that
Speaker 8: can make this really easy for end users and the
Speaker 8: adoption you can take off further for for Google.
Speaker 5: But Brent, what does it mean more broadly therefore?
Speaker 3: On an ability for alphabet to maintain its market share
Speaker 3: here many have worried that open ai, for example, would
Speaker 3: start to steal away some of the search penetration that
Speaker 3: it has, but it hasn't so far.
Speaker 5: It feels like, what do you think about that?
Speaker 7: It's early, Yeah, it's very early.
Speaker 8: And I think why this is so important is to
Speaker 8: your point that everyone's so worried that we're all gonna
Speaker 8: have all these little agents running around. We're gonna ask
Speaker 8: questions what's the weather like in San Francisco, house traffic?
Speaker 8: And X y Z from point A to point B. Right,
Speaker 8: We're gonna have these agents doing this. And I think
Speaker 8: this again is why it's so badly needed that if
Speaker 8: you can put on one of the top platforms that
Speaker 8: this effectively and this they would capture those search shares
Speaker 8: through through Gemini, right, So the AI agents need the data,
Speaker 8: and they need the users, and they need the back
Speaker 8: end information. And so if effectively this can front end,
Speaker 8: then you know, again versus other chatbots that they could
Speaker 8: partner with or any other AI agents, this this is
Speaker 8: again gonna be a huge removal of that overhang.
Speaker 7: Uh if that if that happen.
Speaker 8: And now today I think that again many of the
Speaker 8: AI agents can't really solve real world problems, right, and
Speaker 8: they're starting to show that that they're getting better, and
Speaker 8: so yeah, there's the fear I certainly think that this
Speaker 8: would help, but that fear is not going to go
Speaker 8: away for Google. Many of these systems you know, for
Speaker 8: example and chat GPT. You know, I was in the
Speaker 8: Atlanta airport last week. I had meetings all day. I
Speaker 8: didn't know where I didn't know where Chick fil A was.
Speaker 8: You can ask it's internal a right. The agents are
Speaker 8: getting smarter. I don't think it would have probably known that,
Speaker 8: you know, six months ago, but these agents are getting smarter.
Speaker 8: So that is going to be an ongoing conserve for Google.
Speaker 8: The bigger issue for Google right now is really no
Speaker 8: no CFO. Who's going to be the CFO. I they're
Speaker 8: going to be shareholder friendly?
Speaker 5: Uh?
Speaker 8: And to your point, search share and then AI relevance
Speaker 8: are all weighing on investors' minds right now.
Speaker 3: Okay, so still, what about Ruth Porat's replacement as she
Speaker 3: moved to a different part of the business. More broadly, Brent,
Speaker 3: but go back to Microsoft, which you also have a
Speaker 3: buy rating on, I believe in the moment, and how
Speaker 3: much this means for the traction of open AI partnership
Speaker 3: with Microsoft and what being represents as a TAP challenger,
Speaker 3: and more broadly, it's.
Speaker 5: World of AI.
Speaker 3: You worried that the fact that it hasn't automatically pushed
Speaker 3: out alphabet here, I'm not worried.
Speaker 8: I think again, it would make sense that Apple and
Speaker 8: Google wouldligne over over an Apple Microsoft alignment, So never
Speaker 8: rule it out.
Speaker 7: But certainly I think that alignment with Google makes a
Speaker 7: lot of sense.
Speaker 8: Again, I think the thing is that you're going to
Speaker 8: have multiple vendors that win. There won't be a lot
Speaker 8: of winners in AI among large caps. They're only going
Speaker 8: to be a few right in the Amazon, Microsoft and Google,
Speaker 8: but they're all going to have an alignment and just
Speaker 8: doesn't concern me for Microsoft relationship. If you think about
Speaker 8: where Microsoft's writing is in large enterprise, They've gotten just
Speaker 8: incredible adoption and everywhere we turn they're getting adopted often
Speaker 8: right from even big Amazon shops. So it doesn't it
Speaker 8: doesn't concern me. I think you're going to see again,
Speaker 8: as I said, formation around different AI platforms from all
Speaker 8: the big tech leaders, and that formation is started, so
Speaker 8: I would I would think that the Apple Google relationship
Speaker 8: would make make more sense. They never rule out Microsoft,
Speaker 8: but again it's that it's not a thesis, uh crushure
Speaker 8: for Microsoft, given their presence and a lot of the
Speaker 8: big insurance healthcare government.
Speaker 7: Uh, they're doing just fine.
Speaker 8: There's plenty of contracts for them to go after outside
Speaker 8: this one.
Speaker 3: This is a show me moment for Alphabet Brentzelle is
Speaker 3: so good to catch up with you. Thank you this
Speaker 3: Monday morning of Jeffries. Meanwhile, look, if you wanted a
Speaker 3: trade out there of those stocks, you might have had
Speaker 3: a bit of a problem in earlier market hours. That
Speaker 3: was at least the NASDAQX Dot Market Exchange now saying
Speaker 3: it has resolved that technology glitch the disrupted pre market
Speaker 3: trading in almost well three hours of time. Now the
Speaker 3: NASDACS person that we spoke with, they said that they
Speaker 3: issue did start shortly after four am, but it was
Speaker 3: resolved around seven am. And the disruption was the second
Speaker 3: at Nasdaq in about three months. But it must be
Speaker 3: said they had These sorts of issues from the Nasdaq
Speaker 3: are very few and far between. You can see the
Speaker 3: impact of basically nothing going through the markets pre market
Speaker 3: trading up until seven am.
Speaker 5: Now coming up, we'll turn to nvideo.
Speaker 3: What can we expect from the first day of the
Speaker 3: Semiconductor Companies Annual Artificial Intelligence Conference?
Speaker 5: It's called the woodstock of AI. We'll tell you why.
Speaker 3: Meanwhile, look, maybe not many people are buying these ar
Speaker 3: VR bits of hardware as have been inspected and Sony
Speaker 3: we understand, still up two point two percent on the day,
Speaker 3: but it's hit pause on its PlayStation VR two production.
Speaker 5: Basically, it's got too much inventory. Needs to get rid
Speaker 5: of it before.
Speaker 3: It pumps out any more of these five hund and
Speaker 3: fifty dollars wearable accessories from New York. This is Blue
Speaker 3: Meade Technology. All eyes on Nvidia today. The Semiconductor Make
Speaker 3: is GtC is an overall technology conference. Of course, it's
Speaker 3: kicking off in San Jose today. Get this, some ten
Speaker 3: thousand people are going to be watching live. We understand
Speaker 3: last night it's twenty two million watched virtually. Those expectations
Speaker 3: are high for a amount of people tuning in.
Speaker 5: But what it means for this stock rally that you
Speaker 5: can see two one and forty three.
Speaker 3: Percent higher over the course of a year. That's bringing
Speaker 3: Blue meg Intelligence analysts Content Savani for.
Speaker 5: More on what to expect.
Speaker 3: Is four pm Eastern where I sit one pm your
Speaker 3: time over on the West coast.
Speaker 5: What will we hear from Jensen do you think, Well, we.
Speaker 9: Expect a few significant announcement that should sort of recharge
Speaker 9: the already strong rally. First is the announcement of the
Speaker 9: new B one hundred chip, which we believe will be
Speaker 9: the first cold chip in a package product. And what
Speaker 9: it's important is it should have a performance of rate
Speaker 9: over H one hundreds of at least two x, but
Speaker 9: we believe more sort of two point five x. Second,
Speaker 9: would be sort of an upside on the TAM last
Speaker 9: GtC that HAM was about a trillion, with three hundred
Speaker 9: billion being the size for the market of the chips
Speaker 9: and hardware. We think since then the estimates have kept
Speaker 9: on rising and they are likely to announce a higher
Speaker 9: number on the chips in the hardware section. And finally,
Speaker 9: what we think would be an ideal update would be
Speaker 9: a lot more clarity and visibility on their software business execution,
Speaker 9: more importantly, the monetization and the revenue run.
Speaker 7: Rate over there.
Speaker 3: Okay, so you want a lot of transparency on pricing,
Speaker 3: on speed on addressable market.
Speaker 5: I'm interested on the.
Speaker 3: Pricing side of things, just quickly, because when we are
Speaker 3: seeing such iterations, when we are seeing such ability and
Speaker 3: power being brought to the market, as in what you
Speaker 3: insinuate with the B one hundred, are they going to
Speaker 3: be able to charge a whole lot more for it?
Speaker 9: They should be able to. I mean, look, two x
Speaker 9: performance over the last is significant and it should help
Speaker 9: them widen their technology performance gap even higher, so they
Speaker 9: should be able to charge a lot more pricing with that.
Speaker 5: Briefly, the risk for you, quj is it that we
Speaker 5: don't get enough of these numbers? Is it that people's
Speaker 5: expectations are too high going in?
Speaker 9: Yeah, it's mainly the headline risk. I think in the
Speaker 9: intermediary period, while the B one hundred starts ramping, you
Speaker 9: know we're hearing the customers might think about should I
Speaker 9: adopt let's say, in H two hundred right now or
Speaker 9: wait for a B one hundred. So what that might
Speaker 9: mean is sort of a lower magnitude of beaten raises
Speaker 9: in the intermediary Also, the other thing to remember is
Speaker 9: one hundred launches, it will be a new supply chain stack,
Speaker 9: so it could be again supply constraint limiting Nvidia's ability
Speaker 9: to again deliver higher beats and raiss.
Speaker 3: Very importantly, put remeg Intelligence Analyst con Jient Savanni, thank
Speaker 3: you so much, and let's talk about some of those
Speaker 3: risks and opportunities a little bit more now when bring
Speaker 3: in advisors.
Speaker 5: Capital management partner and portfolio manager Joanne.
Speaker 3: Feeney, and I feel as though this is something you've
Speaker 3: mentioned time and time again. The supply side is the
Speaker 3: issue here, not the demand side. And what are you
Speaker 3: worried perhaps with a B one hundred and a supply
Speaker 3: chain that has to be reampt even more there.
Speaker 2: Yeah, it's certainly going to be a complicated process, but
Speaker 2: Nvidia has been there before. The challenge now is really
Speaker 2: on the packaging side, and it's been a constraint for
Speaker 2: a while for them to get more chips out the door.
Speaker 7: Now they're going to have more to work with.
Speaker 2: They're going to have the old you know, H one hundred,
Speaker 2: the H two hundred coming out this year, and then
Speaker 2: the B one hundred. So I suspect that different sorts
Speaker 2: of customers will get the different sorts of chips and
Speaker 2: that will help ease their supply constraints. But that new
Speaker 2: one that's going to ramp towards the end of the year,
Speaker 2: it's probably going to be a twenty twenty five story
Speaker 2: in terms of real numbers and by then we should
Speaker 2: see the increase in packaging that's being made available now
Speaker 2: by TSMC, by some of the specialty packaging companies, and
Speaker 2: even by Intel, with whom Nvidia is going to work
Speaker 2: for some of their advanced packaging needs.
Speaker 3: This is what's so interesting about the space is its
Speaker 3: one big front of me club as well as I
Speaker 3: can work out intell and and Video sort of against
Speaker 3: each other, but so.
Speaker 5: Dependent on one another.
Speaker 3: And when we then think about the demand side as well,
Speaker 3: there's front of me.
Speaker 5: Is there too the.
Speaker 3: Story that Apple may be looking to Alphabet for its
Speaker 3: generative AI applications, then the read across some analysts is well,
Speaker 3: Alphabet starting to make its own chips. How much of
Speaker 3: a concern is competition for Nvidia at the stage, Well,
Speaker 3: I think.
Speaker 2: It's a little bit early. But what they say this week,
Speaker 2: and particularly what Jensen says later today, I think is
Speaker 2: going to help frame people's expectations on the competition front.
Speaker 7: And there's really two areas.
Speaker 2: One the training side, which requires the absolute best possible
Speaker 2: accelerator chips made by Nvidia, and then there's the inference side,
Speaker 2: which is less computationally intensive. It's just where you ask
Speaker 2: the question and it gets answered that competition is and
Speaker 2: this is demanding, and that's where we're seeing more competition.
Speaker 2: And clearly, you know, Google has its own chips that
Speaker 2: they make in coordination with Broadcom, which is one of
Speaker 2: the reasons why we continue to like Broadcom as a
Speaker 2: as a stock pick here. And then you also have
Speaker 2: a bunch of startups that are starting to get into
Speaker 2: this space, whether they're private companies or older A six
Speaker 2: sorts of companies.
Speaker 7: So there's definitely going to be a lot of competition.
Speaker 2: They're attracted by those high prices and high margins, but
Speaker 2: it's no easy trick to build a very highly computationally
Speaker 2: capable chip like the ones in video has worked out
Speaker 2: for decades.
Speaker 5: Let's just dig into the software side as well. And
Speaker 5: you've talked about COUDA in particular over within video.
Speaker 3: We were hitting from Kunjan saying, you know, where is
Speaker 3: the ongoing growth and particularly from our revenue perspective of software,
Speaker 3: Where are you seeing growth for video there?
Speaker 2: Yeah, I think that the software side is, as we've
Speaker 2: been learning, is going to become increasingly important. I mean,
Speaker 2: the chips don't work in isolation, and the Kuda software
Speaker 2: platform that Nvidia has had out there for you know,
Speaker 2: along many many years, works tightly with their chips and
Speaker 2: it makes it easier to run these models and to
Speaker 2: basically build the code. The code is now trained on
Speaker 2: you know, many many software programmers have grown up learning Kuda,
Speaker 2: and so they have a huge advantage in the coordination
Speaker 2: between the hardware and the software side. And we do
Speaker 2: expect the software side to become a bigger driver of
Speaker 2: revenues as they're really closely tied together. And that's why
Speaker 2: we do think there's room a little bit of room
Speaker 2: for a bit more margin over at in video. It's
Speaker 2: one of the reasons that earnings have outpaced revenue growth
Speaker 2: over the last four or five years, and we do
Speaker 2: think it'll be able to push it a little bit
Speaker 2: harder for the next couple of years.
Speaker 3: I love how you dissect what basically the room and
Speaker 3: developers are going to want to be hearing, and then
Speaker 3: the room of investors on the back of what developers
Speaker 3: are hearing, going do we wanting to be listening into margin?
Speaker 5: I mean, tell us a little bit about where in video.
Speaker 3: Sits in your portfolio, whether you add to at these levels,
Speaker 3: whether you want to be going more broadly.
Speaker 2: Yeah, so you know, we've held in video for a
Speaker 2: while now. We've always liked the AI story. The role
Speaker 2: of Nvidia in portfolio is really depends on the client. Right,
Speaker 2: This is clearly a growth company. It's going to be
Speaker 2: potentially more volatile than some other companies out there in
Speaker 2: terms of its stock, so it's not suitable for everybody,
Speaker 2: but we do see as a core holding in our
Speaker 2: growth strategy. We do see the opportunity for it to
Speaker 2: continue to grow. We see eighty percent revenue growth this year,
Speaker 2: but that's really built on the fact that they hit
Speaker 2: twenty two billion in revenues last quarter.
Speaker 7: So you just run that forward, add a.
Speaker 2: Little bit of sequential growth and you get to, you know,
Speaker 2: over one hundred billion, one hundred and ten billion in revenue,
Speaker 2: so you get eighty percent growth. But going forward, people
Speaker 2: have to recognize that we're going to seem more like
Speaker 2: twenty percent growth. Yeah, twenty five percent growth and.
Speaker 5: At the moment still trading on forward p valuation of
Speaker 5: thirty five times but market cap just what two and
Speaker 5: a half trillion? Extraordinary the run we've seen.
Speaker 3: Joanne Feoenie of Advisor's Capital Management, we thank you so much.
Speaker 7: Time.
Speaker 5: Now if for talking tech.
Speaker 3: First up Intel backed semiconductor connectivity company that's the Steri Labs.
Speaker 3: Let's raise the size of its ban ib here by
Speaker 3: get there's twenty six percent. As the investor frenzy around
Speaker 3: AI continues to rage. Now, according to an updated registration
Speaker 3: statement that was filed with the SEC, the company and
Speaker 3: its investors now planned sell nineteen point eight million shares
Speaker 3: at thirty two to thirty.
Speaker 5: Four dollars each.
Speaker 3: That means the offering would raise as much as six
Speaker 3: hundred and seventy three point two million dollars plus. A
Speaker 3: barber has appointed a new head of its grocery arm
Speaker 3: that's Freship Home, in the latest step for a broadery
Speaker 3: structuring effort. Now, the CFO is going to replace the
Speaker 3: company's founder a CEO a fresher pot. They will retire
Speaker 3: but serve as a senior advisor to the company that's
Speaker 3: a former founder. Of course, all of this according to sources,
Speaker 3: and the EO is considering a form more review of
Speaker 3: how widely businesses use mature or lower end chips from China. Look,
Speaker 3: they're joining the United States and flagging a potential risk
Speaker 3: to national security and of course global supply chains.
Speaker 5: Now, according to a.
Speaker 3: Draft working statement, the EU is weighing whether to investigate
Speaker 3: how deeply such semiconductors are indeed embedded across industry networks.
Speaker 5: Now coming up, we've got.
Speaker 3: To get back to that crypto rise and slight pullback
Speaker 3: of late dig into the markets with August co founder
Speaker 3: Aya Cantorovich. Next up, let's look at what we're watching
Speaker 3: in terms of those publicly traded companies, Cloud Flair, interesting
Speaker 3: sort of revolving door here we've seen Stephanie Cohen. That
Speaker 3: name will ring a bell because Shoe, of course was
Speaker 3: the leader behind Marcus, the retail offering coming from Goldman Sachs.
Speaker 3: And now she's the latest executive to step down from
Speaker 3: that particular bank where she gone. Cloud Flair chief strategy
Speaker 3: officer for Stephanie Cohene from New York. This is Bluebig Technology.
Speaker 3: I'll come back to Blueberg Technology. I'm Caroline hired in
Speaker 3: New York.
Speaker 5: Let's get your check in on these markets.
Speaker 3: And after a slight technology outage of its own over
Speaker 3: at the NASDAK, we're back on track and we're actually
Speaker 3: see the NASAQ one hundred up one and a half percent.
Speaker 3: So after that pre market issue from a technical perspective
Speaker 3: that stops on trading. We're now up one and a
Speaker 3: half and it seems to be AI that's leading the charge.
Speaker 3: The hopes of course within certain well the woodstock of AI.
Speaker 3: A little bit later, Stock six six hundred though over
Speaker 3: in Europe just finished trading and actually down some two
Speaker 3: tens percent. So this sort of euphoria from AI not
Speaker 3: being built in to what's happening globally in the stock
Speaker 3: market today. And remember this is a big week for
Speaker 3: the macro picture, particularly from central banks back of England,
Speaker 3: back of Japan is coming tomorrow and of course the
Speaker 3: Fed on Wednesday. We're looking at Bitcoin just lower versus
Speaker 3: the US dollar, and in fact US dollar has been
Speaker 3: higher against most of its G ten currency pairs. We're
Speaker 3: off by another two percent, let's call it sixty six thousand,
Speaker 3: nine hundred and seventy four. Get dig into that in
Speaker 3: a moment. Move on though, and have a look at
Speaker 3: some of the individual companies that we're looking at. And
Speaker 3: I mean, this is the story of the day coming
Speaker 3: from a scoop from our own Mark Gum, and we're
Speaker 3: seeing Alphabet shares powering up almost seven percent.
Speaker 5: Why because it looks as.
Speaker 3: Though Apple are already in talks of them to be
Speaker 3: using Gemini the generative AI part and offering from Alphabet
Speaker 3: within the iPhones and iPhone ecosystem. But Apple, more broadly,
Speaker 3: what does that mean for adoption? What does that mean
Speaker 3: for its penetration and holding its overall market share when
Speaker 3: it comes to search. I'm looking also what's happening with
Speaker 3: Cisco one point two three percent higher?
Speaker 5: Why because finally the.
Speaker 3: Deal is done with Splunk and I actually want to
Speaker 3: stick with that very news because the CEO Chuck Robbins
Speaker 3: and the former now Splunk CEO Gary Steel join Bloomberg
Speaker 3: earlier today, need to discuss how this Splunk iteration fitting
Speaker 3: in within Cisco's product and financial strategy is going to
Speaker 3: continue to.
Speaker 5: Take a listen.
Speaker 10: There's an emerging area called observability, which is effectively trying
Speaker 10: to help our customers understand application performance, what's going on
Speaker 10: in their technology infrastructure, particularly in this world where you
Speaker 10: have hybrid cloud, multi cloud, private cloud SaaS and so
Speaker 10: that's one big area, and then the other big area
Speaker 10: of cybersecurity. If you think about the utilization of AI
Speaker 10: by the bad actors, we're going to have to do
Speaker 10: a better job of doing real time analytics, in real
Speaker 10: time detection and response, and in my view, we have
Speaker 10: to be able to take three or four different things
Speaker 10: that we're seeing happening at the same time, and those
Speaker 10: three or four independently might not indicate a problem, but
Speaker 10: together there's a problem. And their data platform with our
Speaker 10: detection response capabilities and all of our endpoints and all
Speaker 10: of the sources of threat intelligence. So we have in
Speaker 10: our massive amount of intel that we see on a
Speaker 10: daily basis, we think brings our customers the ability to
Speaker 10: actually do that in real time.
Speaker 11: And of course when you talk to the cell side,
Speaker 11: there's also this narrative out there that you're trying to
Speaker 11: remake Cisco as a provider of networking services and really
Speaker 11: trying to lessen your reliance on one time sales of equipment.
Speaker 11: How do you see this deal as really pushing that
Speaker 11: effort forward.
Speaker 10: Well, that's an accurate narrative.
Speaker 8: So we.
Speaker 10: Have been moving into more software. So I think the
Speaker 10: three metrics I would share is at last quarter we
Speaker 10: hit a milestone that we had set to try to
Speaker 10: get to fifty percent of our revenue coming from recurring revenue,
Speaker 10: and we did that last quarter, which is a big
Speaker 10: move from eight years ago. The other thing is combined,
Speaker 10: Geary and the team bring four point two billion of
Speaker 10: ar run in mid teams.
Speaker 12: Fifteen percent as of the climes at the end of
Speaker 12: the year.
Speaker 10: And combined we have arr now of almost twenty nine billion,
Speaker 10: and we're over twenty billion from just software sales in
Speaker 10: the company now, which is when we add splung software
Speaker 10: sales to it. So I think we've made a lot
Speaker 10: of progress and we're going to continue marching down that
Speaker 10: path well.
Speaker 11: As this integration goes forward. Of course, both of your
Speaker 11: companies have announced layoffs in the recent months. As you
Speaker 11: integrate these two, would you expect to be there to
Speaker 11: be further headcount reductions.
Speaker 10: This still was not predicated on cost synergies at all.
Speaker 10: It was built on revenue synergy. So it was built
Speaker 10: on the integration that we talked about and the new
Speaker 10: capabilities that we can bring to our customers. So that
Speaker 10: was never part of our plan as we were putting
Speaker 10: the integration plan together.
Speaker 11: And of course you had mentioned chat that when it
Speaker 11: comes to AI there's a concern and uptick and that
Speaker 11: being harnessed by bad actors and Gary I'm curious what
Speaker 11: you're seeing in your data when it comes to these
Speaker 11: AI side for security attacks.
Speaker 12: You've just seen more sophisticated attacks, whether they're specifically target attacks,
Speaker 12: phishing attacks, we're just seeing more sophistication and it's a
Speaker 12: new set of tools that bad actors can drive more
Speaker 12: and more sophisticated attacks. And we feel very good about
Speaker 12: coming together and the work that we can do collectively
Speaker 12: driving great outcomes through the use of AI to ensure
Speaker 12: that our enterprise customers are well protected.
Speaker 10: If I could add real quickly, we have an organization
Speaker 10: called Tellos that sees about twenty billion threats a day,
Speaker 10: and so one of the things that we believe we
Speaker 10: can do is take that all of that intelligence and
Speaker 10: inject it into the data platform that they provide customers
Speaker 10: and give them a whole new level of real time
Speaker 10: visibility that they've never had before. So it's pretty exciting.
Speaker 5: Nature of AI future of their relationship. CEO Chuck Robbins,
Speaker 5: the Cisco, of course, the formers Plunk CEO now part
Speaker 5: of the business, Gary Steele. Now let's pivot away for
Speaker 5: a moment and talk all things crypto. We just got
Speaker 5: to talk the numbers involved.
Speaker 3: Investors adding get this, eight point one two billion dollars
Speaker 3: to crypto focused exchange train of products during the past
Speaker 3: month alone.
Speaker 5: Fifteen point five billion in.
Speaker 3: Fact, has been added to these ETFs in the past year,
Speaker 3: all according to day To compiled by Bloomberg. Let's get
Speaker 3: up to speed with why therefore some of the share
Speaker 3: well not shares, why crypto has pulled back in terms
Speaker 3: of our price point as as August co founder and
Speaker 3: co CEO Aya Kantorovich for more and look, the hype
Speaker 3: has been real, but the flows have been real, and
Speaker 3: now we pull back.
Speaker 5: Any reason why, I absolutely so.
Speaker 1: We did see, as you mentioned, a height of some
Speaker 1: new two thousand dollars reached last week and so we
Speaker 1: did finally clear the sixty nine thousand level.
Speaker 7: And what we are hearing.
Speaker 1: Is a rumor that that led to the BTC crash
Speaker 1: going into the weekend, and so we went from sey
Speaker 1: two thousand down to sixty five point five. And the
Speaker 1: rumor is that there was a fun blowing out roughly
Speaker 1: a billion dollars of the micro strategy BDC spread trade,
Speaker 1: and so this hedge fund set up a spread trade
Speaker 1: that shortly before the ETF approval considering that they were
Speaker 1: long BTC, they were short micro Strategy, and the idea
Speaker 1: behind it was that micro Strategy was going to fall
Speaker 1: once the ETF was approved and BTC is going to
Speaker 1: a rise. However, as you'll see in the market, that
Speaker 1: MicroStrategy actually outperformed Bitcoin and so it necessitated them unwinding
Speaker 1: the trade and closing the position. Into the weekend, you
Speaker 1: saw BDC dump as well as micro Strategy premium go
Speaker 1: high and a mini rally. There, so a lot of
Speaker 1: market activity and that's really the rumor going into why.
Speaker 3: Okay, some rumors that we will check in on, make
Speaker 3: sure that we'll look around as to who this fund
Speaker 3: is and a MicroStrategy price currently at sixteen forty one,
Speaker 3: so down a little bit from its heights of the
Speaker 3: previous week.
Speaker 5: When we move away from.
Speaker 3: Rumors and look at fact at the moment, though, I
Speaker 3: what's factual is that Bitcoin has done well, but actually
Speaker 3: so has the entire ecosystem, and you're not just see
Speaker 3: eth do well. And there's many a rumor perhaps around
Speaker 3: the future ETF spot ETF for ETH in the US too,
Speaker 3: but just broadly like mean, coin's going well, but so
Speaker 3: some really you know, well, loved protocols such as Solana
Speaker 3: are all boat It's gonna keep rising.
Speaker 1: I think right now what you're seeing, especially with Solana,
Speaker 1: is with regards to the mean coin trend. And I
Speaker 1: want to anchor on this because we're really seeing Solana
Speaker 1: look like Ethereum in the twenty seventeen Ico bubble. You're
Speaker 1: seeing mean coins come out with the pre sales that
Speaker 1: look very much like Ico pre sales. You're seeing that
Speaker 1: the Solana ecosystem has so much activity. Soul eth ratio
Speaker 1: is at an all time high right now, and Solana
Speaker 1: has also overtaken Ethereum on Google trends. You're also seeing
Speaker 1: a lot of this activity happen outside of the US.
Speaker 1: So for example, robin Hood Europe listed a couple of
Speaker 1: mean coins as well on their platform, and so you know,
Speaker 1: to your point, rising tidelifts of all boats, but there
Speaker 1: certainly are boat boes that are rising much faster than others,
Speaker 1: and especially with the correction that happened into the weekend,
Speaker 1: Solana was very much unfazed by that, and so it's
Speaker 1: very interesting to watch as well, and to your point,
Speaker 1: a lot of eyes on ethereum going into a potential etf.
Speaker 5: Approval the main coin craze.
Speaker 3: How much is that actually being jumped upon by institution investors,
Speaker 3: by crypto ogs who understand that perhaps the fundamentals on
Speaker 3: a basis of this, but this is a value creation
Speaker 3: like we haven't seen before.
Speaker 5: It's going to be very much retail driven.
Speaker 1: And you know, the way I think about it is
Speaker 1: very much a sense of community and engagement. And we
Speaker 1: saw a lot of this happen with Reddit and the
Speaker 1: Reddit community when you had GameStop on robin Hood, you
Speaker 1: had your robin Hood traders.
Speaker 5: And again you're.
Speaker 1: Seeing just absolute insane engagement on Reddit, which is going
Speaker 1: to be very interesting for them going into their IPO,
Speaker 1: and also engagement on Twitter around just people building communities.
Speaker 1: So you saw, you know, David Sachs for example, launch
Speaker 1: his own meme coin. You saw something called the Book
Speaker 1: of Meme which has performed tremendously. Obviously, Elon Musk is
Speaker 1: continuing to push dogecoin, and you saw dog with hat
Speaker 1: as well. These are all just very large communities of
Speaker 1: folks who you know, are engaging and can find a
Speaker 1: way to engage in the markets on Solona today primarily,
Speaker 1: which is where they're being pushed but it is very
Speaker 1: very much retail driven. I would say there's very few
Speaker 1: institutions who see perhaps the value accrule here long term
Speaker 1: as opposed to just trading in and out of these
Speaker 1: tokens as well.
Speaker 3: This is just an extremely online community wanting to show
Speaker 3: that love. But what therefore of more broadly, going back
Speaker 3: to where institutional money is bitcoin is some of the
Speaker 3: more outstanding protocols.
Speaker 5: Are we seeing leverage back?
Speaker 3: That would seem to be something that we're being flagged
Speaker 3: at the end of last week that maybe the poll
Speaker 3: pack is because we'd just go to heady again.
Speaker 1: Yeah, we are seeing leverage back, but what is really
Speaker 1: nice is that we saw the funding reset into the
Speaker 1: weekend and so funding went from roughly eighty percent to
Speaker 1: twenty percent, which leaves us in a really healthy spot
Speaker 1: right now for.
Speaker 7: Us to move forward.
Speaker 1: Obviously, to your point, as you mentioned, when the funding
Speaker 1: does go out of hand, we tend to see pretty
Speaker 1: volatile moves, and I will just really emphasize that liquidity
Speaker 1: on exchanges is very very thin. This is some of
Speaker 1: the thinnest liquidity that we've seen, as you are seeing
Speaker 1: people hoddle or hold their bitcoin and so you're seeing
Speaker 1: very you know, very big market price moves and market
Speaker 1: moves because of that thin liquidity, and at large the
Speaker 1: technology is building. I mean, I will say, you know,
Speaker 1: outside of the mean coins Ethereum did have an upgrade
Speaker 1: last week, which meant that transaction costs on Layer two
Speaker 1: roll ups built on Ethereum are now lower. So you're
Speaker 1: getting a lot of updates, a lot of really interesting
Speaker 1: technology that's being pushed over the last few weeks. That
Speaker 1: is very focused on the institutional volume coming in across
Speaker 1: the top ten majors, and so we're excited to keep
Speaker 1: an eye on that. Well.
Speaker 5: Thanks akeeping our eyes on it. We thank you, August
Speaker 5: co founder and co CEO Ia Kanorovich. Stay well.
Speaker 3: Meanwhile, coming up, we're going to have more of the
Speaker 3: focus and other parts of the technology ecosystem startups in particular,
Speaker 3: Indexpensures is out with a new book for rapidly scaling
Speaker 3: companies or on that next with Indexpensures my partner Martin
Speaker 3: Migno Mina. Meanwhile, let's have a quick look at some
Speaker 3: of the public trading companies for a moment. FedEx Amazon,
Speaker 3: They're only up about three ten percent. Look, FedEx has
Speaker 3: its earnings coming out later this week. An interesting report
Speaker 3: coming from the Wall Street Journal. But FedEx and Amazon
Speaker 3: are and d discussing a partnership at as of course,
Speaker 3: the competition perhaps is returning for package and overall deliveries.
Speaker 3: We knew that the two companies last year discussed apparently
Speaker 3: FedEx accepting returns of Amazon packages at its retail locations
Speaker 3: from New York.
Speaker 5: This is Bloomberg Technology.
Speaker 3: Today in Theex Ventures well, it's launching a new book
Speaker 3: and mapp of course for its own founders.
Speaker 5: Book is called Scaling.
Speaker 3: Through Chaos, The Founder's Guide to Navigating a New Era
Speaker 3: of Innovation. It it explores the challenges of designing a
Speaker 3: rapidly scaling organization, investing in leadership, and so much more.
Speaker 3: Joining us to break it all down, Index Ventures partner
Speaker 3: Martin Mignore and it's great to have you here. You'
Speaker 3: of course moved from Europe to New York. You've been
Speaker 3: setting up more of a hub here. And I'm interested
Speaker 3: as to why founders need a blueprint because almost the
Speaker 3: whole idea of startups is that they're unprecedent and never
Speaker 3: seen before, totally new.
Speaker 13: Yeah, so maybe taking a step back so inexpensure US
Speaker 13: is launching a new set of resources, as you mentioned,
Speaker 13: for founders to help them scale from zero to one
Speaker 13: thousand employees. And we call it scaling through chaos precisely
Speaker 13: to reflect the nature of the beast is. You know,
Speaker 13: it is challenging and there's a lot of uncertainty. This
Speaker 13: is the most in depth research on the topic. We
Speaker 13: analyzed more than two hundred of the fastest growing companies
Speaker 13: of the past decade, companies like Uber, Airbnb, id and
Speaker 13: Data Dog, and we also interviewed more than sixty founders
Speaker 13: and top operators from these companies to kind of bring
Speaker 13: the data to life. And the result is the book
Speaker 13: the Blueprint that you mentioned, throunded pages, an absolute page
Speaker 13: turner I can guarantee, and a companion app called team Plan,
Speaker 13: which is all available for free to everyone on scalingthroughkes
Speaker 13: dot com.
Speaker 3: But having a business of any sort is chaotic at least,
Speaker 3: and then you throw in sort of huge valuations purchases
Speaker 3: not purchasing. I think a Figma, of course, is one
Speaker 3: of the companies that you backed in an extraordinary jurnel
Speaker 3: that Dylan has been on and having to now continue
Speaker 3: to build no matter what, even when you think you've
Speaker 3: got a massive deal on the table. What were some
Speaker 3: of the most surprising things you heard from the founders.
Speaker 5: Yeah, well they are.
Speaker 13: You know, it's a lot of pages, a lot of findings,
Speaker 13: but the three that really resonated with us. I would
Speaker 13: say the first one is the time spent on people
Speaker 13: related matters. It sounds obvious, but we quantified it in
Speaker 13: the book. And what's interesting is that across stages, so
Speaker 13: from zero to a thousand employees, it stays relatively constant
Speaker 13: at about fifty percent of the time of founders. And
Speaker 13: it's quite surprising for founders. Very often we think that
Speaker 13: the people a really matters is a bit of a
Speaker 13: tax on that time.
Speaker 5: While it's not, it's.
Speaker 13: The main thing. The nature of the time you spend
Speaker 13: is a bit different. In the early days, it's mostly
Speaker 13: about hiring and onboarding employees. Later on it's more aligning
Speaker 13: people and running the team, but that amount is pretty constant.
Speaker 13: The second finding that we thought was really telling was
Speaker 13: the importance of emphasizing performance over loyalty. One of the
Speaker 13: findings of the book is that by size fifty, only
Speaker 13: five of the first ten employees are still with the business,
Speaker 13: and when the company reached is one thousand employees only
Speaker 13: two or three, which means it's not a failure. It
Speaker 13: is a nature of the beast. It is, you know,
Speaker 13: this is a natural life cycle of a startup. It's
Speaker 13: very important for founders to realize that and almost embrace it,
Speaker 13: realize that this is part of the journey. And the
Speaker 13: third one is embracing chaos. More generally, these company is
Speaker 13: on average or growing more.
Speaker 9: Than two x.
Speaker 13: You're on your for four to five years. So at
Speaker 13: any given time when those first five foundational years, but
Speaker 13: then half of the team will be new to the business.
Speaker 13: So there is an inherent level of chaos and uncertainty
Speaker 13: that wally happen, and you can't tame it entirely. So
Speaker 13: you have to learn to live with it, grow with it,
Speaker 13: and bring processes progressively. And that's what this book and
Speaker 13: the app is hopefully helping will be helping founders.
Speaker 3: To do and look, maybe use the chaos your advantage.
Speaker 3: And what's interesting is it's called navigating a new era
Speaker 3: and innovation, And boy do we keep going on about
Speaker 3: the new era of AI. And I'm interested whether how
Speaker 3: much that changes the game. When I think of HR,
Speaker 3: when I think of hiring. I suddenly think, well, is
Speaker 3: AI going to uphend that amount of people you are
Speaker 3: having to increase or the types of people that you're
Speaker 3: adding to. How are you trying to foresee the new
Speaker 3: types of chaos companies are going to see.
Speaker 13: Yeah, we may update later on our research for the
Speaker 13: new type of AI companies. But the way we think
Speaker 13: about innovation is that happens through waves, and a wave
Speaker 13: and replace the previous web it builds on top of it.
Speaker 13: So AI, for example, is built on top of cloud
Speaker 13: and mobile, and so that's why the pace of innovation
Speaker 13: seems and is actually happening faster because you're leveraging what
Speaker 13: happened before. But the reality of building a business I
Speaker 13: don't think we'll change. I think the time spent on
Speaker 13: people will remain at fifty percent across the entire life
Speaker 13: cycle in this first thousand employees' journey of a company,
Speaker 13: and the type of people to hire and how you
Speaker 13: retain them and how you motivate and how you lead them.
Speaker 13: AI is not going to change that. Actually, I think
Speaker 13: if anything, this is going to make it even more important.
Speaker 3: Well, you're going to be talking about this much more
Speaker 3: an event that you're hosting a little bit later in
Speaker 3: the extensures partner.
Speaker 5: We thank you so much. It's out. A full interview.
Speaker 3: Elo Musk and Don Lemon's hour long interview has been released,
Speaker 3: and it's just days after we understood that, of course,
Speaker 3: the billionaire in your Mask actually canceled the CNN's lums
Speaker 3: partnership with x in it. Well, the interview kind of
Speaker 3: discussed a wide range of topics Mask's commitment to free speech.
Speaker 5: For example, take a listen.
Speaker 14: I'm here, you know, as you know, I'm on the
Speaker 14: platform because you are. You say you're a free speech absolutist, right,
Speaker 14: and there're no condition.
Speaker 10: Yeah, free speeches as much as possible within the bows.
Speaker 2: Of the law.
Speaker 5: Yeah.
Speaker 14: So the reason I'm saying that is because there are
Speaker 14: no conditions on this interview. You said that, you know,
Speaker 14: we'll speak to you.
Speaker 7: For an hour.
Speaker 14: I don't like SoundBite, so I welcome that. So let's
Speaker 14: get into it.
Speaker 5: I'm on the platform, but then not on the platform.
Speaker 3: And actually it is very hard to watch the interview
Speaker 3: on the platform for the first hour or so.
Speaker 5: Let's bring in Williemos Kirk Wagner.
Speaker 3: Who has watched part of it, and I mean from
Speaker 3: the get go.
Speaker 5: It was an awkward conversation.
Speaker 3: The key takeaway for some and certainly investors in Elon's
Speaker 3: publicly traded companies, are well the way in which he's
Speaker 3: sort of vindicating his use of ketamin for example.
Speaker 7: Yeah, that was a very tense exchange.
Speaker 15: I thought they talked about Elon was, you know, talked
Speaker 15: about his prescription for ketamine. He of course said he
Speaker 15: doesn't abuse it. He uses it because of you know,
Speaker 15: a doctor's advice, and that he sort of suffers at
Speaker 15: times from depression or sadness.
Speaker 7: And so he also kind of pushed back very very briefly.
Speaker 15: He was like, you know, asking someone about a personal
Speaker 15: prescription is a pretty private thing to ask, and he
Speaker 15: kind of you know, pushed back on Don Lemon's question there.
Speaker 15: But it was just very interesting to see him sort
Speaker 15: of challenged on this reported drug use, right, and Don
Speaker 15: Lemon asked, you know, is this going to impact your
Speaker 15: contracts with the US government, impact your decision making your tweeting?
Speaker 15: And so that, as you can imagine, was a rather
Speaker 15: tense exchange very pretty early on in the conversation, which
Speaker 15: sort of sets the stage for a tougher conversation.
Speaker 3: I mean, Don Lemon went on to give his own
Speaker 3: views on why his show has been canceled on the platform,
Speaker 3: him saying that must disliked his line of questioning.
Speaker 5: Meanwhile, you know, Musque himself.
Speaker 3: Is saying that basically, this isn't what we envisaged. It's
Speaker 3: just CNN but on social media. So reading between the lines,
Speaker 3: what does this mean for X's push to being a
Speaker 3: video first platform, to getting these sorts of well top
Speaker 3: talent to come on and give them content.
Speaker 15: Well, I would say Don Lemon was probably the headline
Speaker 15: of this entire push we saw at CES in January.
Speaker 15: They came out and announced, you know, a small handful
Speaker 15: of new shows and how they were, as you said,
Speaker 15: kind of pivot into video, making that a priority.
Speaker 7: But when they're you know, top or perhaps most well known.
Speaker 15: Partnership apart before it ever really gets going, and when
Speaker 15: Don Lemon is out there saying the reason it fell
Speaker 15: apart is because I can't actually ask hard questions of
Speaker 15: the sources that I wanted to ask, it definitely does
Speaker 15: not bode well, for one, the push to video in general,
Speaker 15: but also Elon's stance on free speech.
Speaker 5: Wagner, we thank you for bringing us the latest on
Speaker 5: all things X.
Speaker 3: Meanwhile, that does it for this edition of Bloomberg Technology, wherever
Speaker 3: you consume it.