Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: From the heart where Innovation, money and power.
Speaker 3: Collie in Silicon Valley, Nbon This is Bloomberg Technology with
Speaker 3: Caroline Hyde and Ed loud Love.
Speaker 4: I'm Caroline Hyde at Rumbouge's world headquarters in New York.
Speaker 5: And I'm Ed Lovelow in San Francisco. This is Bloomberg Technology.
Speaker 4: Coming up, we'll have full coverage of TikTok from what
Speaker 4: we can expect in the Senate, who wants to buy it,
Speaker 4: and the response from China, and of course the impact
Speaker 4: on those content creators.
Speaker 6: We've got you covered.
Speaker 5: Plus Starship goes further and faster, but SpaceX loses the
Speaker 5: vessel during re entry, an unprecedented technology breakthrough for Musk's company.
Speaker 4: Details to come, and we get to check in on
Speaker 4: the tech earnings, sit down with the CFO of UiPath,
Speaker 4: and push ahead to Adobe's results after the Bell Rumble.
Speaker 5: Is one of the names to the downside, the sort
Speaker 5: of more conservative social platform backed by Peter Teel. But
Speaker 5: as you know, Caro, it's been absolutely soaring in recent
Speaker 5: days after its CEO said, hey, we could talk with
Speaker 5: TikTok about a cloud partnership about looking at TikTok's US operations.
Speaker 5: There's no hard catalyst today, but it's interesting to look
Speaker 5: at different moves, and if anything, some of the names
Speaker 5: that saw significant gains in more recent days have kind
Speaker 5: of pulled back a little bit because I think we
Speaker 5: still have quite a lot to work out when it
Speaker 5: comes to TikTok.
Speaker 4: Indeed, and we've got a lot to dissect in terms
Speaker 4: of the reactions coming from the business itself, from.
Speaker 6: Key diplomats as well.
Speaker 4: Just following the House passing that divestal ban TikTok, Bill Head,
Speaker 4: or the top American diplomat in China, hit out at
Speaker 4: Beijing's objection to a potential ban on the social media
Speaker 4: platform in the US. Just take a listen to the
Speaker 4: comments coming from the US ambassador to China.
Speaker 7: Number of complaints from the government here in Beijing this
Speaker 7: week about the American debate on TikTok. I find it
Speaker 7: supremely ironic because government officials here are using the X
Speaker 7: platform to criticize the United States. They don't give their
Speaker 7: own citizens the right to use X, to use Instagram,
Speaker 7: to use Facebook, to have access of Google, and so
Speaker 7: it is ironic. Indeed, that the government here is complaining
Speaker 7: about a process when they shut down access for one
Speaker 7: point four billion Chinese to all these platforms.
Speaker 4: Meanwhile, we've got to get up to speed with what's
Speaker 4: happening here in the US. Down Flatley has more following
Speaker 4: the story, of course closely. And the key question now
Speaker 4: is does the startling numbers of support in the House
Speaker 4: really carry.
Speaker 6: Over to what we might see in the Senate?
Speaker 3: Yeah, I mean, I think that's the question of the day.
Speaker 3: You know, the Senate is known for working certainly slower,
Speaker 3: more slowly than the House, and I think that you're
Speaker 3: going to have a variety of opinions over there. There's
Speaker 3: one hundred senators and they're each going to have their opinion,
Speaker 3: as Mike Gallagher, who is the author of the House
Speaker 3: bill said yesterday, So there's a few different paths forward.
Speaker 3: One that could go very quickly and a couple that
Speaker 3: would take a little bit longer. It's looking likely that
Speaker 3: they'll take sort of the longer, more deliberative path. And
Speaker 3: if that happens, it's kind of a question of does
Speaker 3: the interest stay there? Where are we two or three
Speaker 3: weeks from now. What's happening in the world is this
Speaker 3: still top of mind for people, so you know, it's
Speaker 3: still a lot of tape to play out in terms.
Speaker 5: Of that, Dan, is there a clear party line on
Speaker 5: this bill, like a Republican attitude towards it and a
Speaker 5: Democrat attitude towards it that we can carry through to
Speaker 5: the Senate or has there been basically a bipartisan approach
Speaker 5: to this.
Speaker 3: Yeah, I think there's no real clear party line. I mean,
Speaker 3: it's sort of very similar to the National Defense Authorization Act,
Speaker 3: the big defense bill that passes almost every year, does
Speaker 3: pass every year without fail here where you have a
Speaker 3: lot of these sort of more moderate Democrats, a lot
Speaker 3: of the sort hawkish Republicans, which is really the majority
Speaker 3: of both chambers when you get down to it, supporting it,
Speaker 3: passing those types of bills, and then you have the
Speaker 3: progressives and the more libertarians or conservatives who are against it,
Speaker 3: which is a smaller number. If you just look at
Speaker 3: the House vote, I mean, three fifty two to sixty
Speaker 3: five really kind of tells you where you are in
Speaker 3: the House. In the Senate, I've heard numbers like seventy
Speaker 3: of the one hundred Senators would support this, So that
Speaker 3: gives you a sense of where we are there.
Speaker 4: I think it's worth reminding that we're seeing a pushback
Speaker 4: more broadly of the US government having foreign ownership of
Speaker 4: key companies or indeed access to its own population. We
Speaker 4: just have to see what's happening with US Steel and
Speaker 4: nip On Steel as well. With your expertise when it
Speaker 4: comes to national security, Dan, will this be the focus
Speaker 4: of lawmakers that this is a national security concern or
Speaker 4: are they actually going to go more towards well, who
Speaker 4: does this ultimately make more powerful US technology companies?
Speaker 3: Well, you certainly hear some concern about that, especially along
Speaker 3: antitrust grounds, like who would buy this? Would it be
Speaker 3: a meta, would it be somebody else? Would there be
Speaker 3: challenges to that? And you also hear questions about, you know,
Speaker 3: is this the right thing to do?
Speaker 2: Does this really meet the moment?
Speaker 3: Does it address the national security concerns while preserving the
Speaker 3: ability of folks to continue to exercise their First Amendment
Speaker 3: rights and their right to free speech. You know, the
Speaker 3: bills authors say that this is not a band, it's
Speaker 3: designed to force ByteDance to divest TikTok. But when you
Speaker 3: talk about a six month timeline to implement a divestment.
Speaker 3: That's where you get some people who are a little
Speaker 3: nervous that that may not be enough time to actually
Speaker 3: pull together a sale and that would in the end
Speaker 3: lead to a band. So you know that all remains
Speaker 3: to be seen.
Speaker 5: Bloom bet Dan Flatley has been a busy twenty four
Speaker 5: hours to say for you out in Washington, d C.
Speaker 2: Thank you.
Speaker 5: Let's keep going with the TikTok story and talk more
Speaker 5: about the implications of what is a divest or band
Speaker 5: bill and the potential antitrust issues around that. Let's bring
Speaker 5: in an academic studying the intersection of emerging technology and
Speaker 5: the law, Jennifer Huddleston, a Technology policy research fellow at
Speaker 5: the Cato Institute. Simple question, would the United States let
Speaker 5: a large technology company based in this country by TikTok's
Speaker 5: US operations if they choose to divest.
Speaker 2: It's an interesting question.
Speaker 8: This whole issue is coming up at a time where
Speaker 8: technology acquisitions have been under increasing scrutiny, and particularly in
Speaker 8: the social media market. When we look at popular social
Speaker 8: media apps like Facebook, some have really asked questions about concentration.
Speaker 8: Here you have what has become an immensely popular app
Speaker 8: providing yet another option for short term video that users
Speaker 8: have chosen because they feel like it's the right platform
Speaker 8: for their choices when it comes to expression. If we
Speaker 8: did get to the point where it was sell or ban,
Speaker 8: you have the question of would the company is looking
Speaker 8: to buy it face further anti trust scrutiny, particularly from
Speaker 8: the Federal Trade Commission, around a potential acquisition of TikTok,
Speaker 8: or in the alternative, if it were to get to
Speaker 8: a ban point, what does that do for the over
Speaker 8: all social media market?
Speaker 2: Jennifer.
Speaker 5: Twenty four hours ago, FCC Commissioner car joined Bloomberg Television
Speaker 5: and he gave his opinion that it doesn't have to
Speaker 5: be a US company that buys TikTok's US operations. It
Speaker 5: could be from another country, so long as it's not China.
Speaker 5: Is that a feasible thing to your mind?
Speaker 8: There are very specific requirements around the devestment that they
Speaker 8: have to assuage concerns about certain foreign adversaries being linked.
Speaker 2: To the company in question.
Speaker 8: So that would depend on how the administration looked at
Speaker 8: something like that and whether or not they felt that
Speaker 8: that was necessary or that that sufficiently met the concerns,
Speaker 8: as well as the question again of when we look
Speaker 8: at particularly if we're considering another technology company that might
Speaker 8: have the expertise to continue the popular TikTok product as
Speaker 8: it is, are there really companies in areas like Europe
Speaker 8: that have that expertise Right now.
Speaker 4: I'm going to go really basic Jennifer for a moment.
Speaker 4: Is it a good idea to separates it from its
Speaker 4: China's ownership?
Speaker 8: From real perspective, there have been a lot of questions
Speaker 8: raised about potential national security concerns and a lot of
Speaker 8: different questions around national security that have been brought up.
Speaker 8: Some are concerned about the potential access to data and
Speaker 8: there may be one set of restrictions that could resolve that,
Speaker 8: as well as concerns about if the data practice has changed,
Speaker 8: do you still have problems with the ability to buy
Speaker 8: that same data on Americans from data brokers. The other
Speaker 8: issue that's been brought up often is questions about the algorithm,
Speaker 8: and that really starts to get into questions of speech,
Speaker 8: not only from the point of view of what could
Speaker 8: this mean for government, the US government getting into the
Speaker 8: speech of social media platforms more generally, but also what
Speaker 8: does this mean for the broader speech context when it
Speaker 8: comes to traditions around the First Amendment and Americans' ability
Speaker 8: to access speech.
Speaker 4: I'm kind of this has been done in India, but
Speaker 4: before it was nearly as successful as it currently see
Speaker 4: TikTok being successful here in the US.
Speaker 6: How technically do we do this?
Speaker 8: I think that's a really important question because it also
Speaker 8: goes to who does the onus for enforcing this ban,
Speaker 8: for ensuring compliance with what could be a ban actually
Speaker 8: fall on. The bill in question focuses on the distribution, maintenance,
Speaker 8: and updating of covered apps or websites. So when you
Speaker 8: think about that, what that actually may mean is that
Speaker 8: it falls to places like app stores or web hosts
Speaker 8: to ensure that these products are removed. Many of those
Speaker 8: companies are American companies, So again we have questions of
Speaker 8: what impact would such a piece of legislation have on
Speaker 8: Americans and American companies.
Speaker 4: Almost feels like there's more questions than answers, But thank
Speaker 4: you for answering ours today. Cato Institute Technology Policy Research
Speaker 4: Fellow Jennifer Huddleston in while coming up, we've got to
Speaker 4: get back to space BASEDX launchers.
Speaker 6: It's Starship rocket to near orbit in space.
Speaker 4: We've got all the details and you're fresh on the
Speaker 4: back of reporting on that. But what else are you
Speaker 4: looking at?
Speaker 8: Yeah?
Speaker 5: Back down here on Earth, I'm taking a look at Adobe.
Speaker 5: So the stocks up two tens percent reporting after hours.
Speaker 5: They're on track for their third straight quarter of double
Speaker 5: digit sales growth. Boring, But the story is about Firefly AI.
Speaker 5: You look at like all of the startups working on
Speaker 5: a texted image platform and a text to video. Has
Speaker 5: Adobe got some response to that? That's what the street's
Speaker 5: worried about the world of AI. This is Bloomberg Technology.
Speaker 9: There.
Speaker 5: It is SpaceX launching its colossal Starship rocket and system
Speaker 5: in its third major test flight. The spacecraft lifted off
Speaker 5: earlier this morning from the company's launch shit in Bokachka, Texas.
Speaker 5: Simply put, the story is that Starship went further, and
Speaker 5: it went faster, and it pushed the boundaries of space
Speaker 5: launch systems and technology, but it was lost later while
Speaker 5: returning to Earth.
Speaker 2: Let's go out to Texas to.
Speaker 5: Bloomberg's space correspondent Lauren Grush explain what has happened this
Speaker 5: morning with SpaceX's Starship, Right, Well.
Speaker 1: I think you just said it there earlier ed they
Speaker 1: got even farther than they ever have before. It's very
Speaker 1: clear that SpaceX is making progress when it comes to
Speaker 1: the development starship. This flight lasted about an hour, which
Speaker 1: was kind of the planned flight time. Earlier flights lasted
Speaker 1: just a few minutes before the vehicle exploded. No explosions
Speaker 1: this time, and they achieved a number of amazing feeds
Speaker 1: that they haven't before.
Speaker 9: They were able to reach.
Speaker 1: Near orbit, reach space, nearly lap the Earth.
Speaker 9: Unfortunately, the vehicle did seem to burn up or be.
Speaker 1: Lost during re entry into Earth's atmosphere, but they got
Speaker 1: wriven farther than.
Speaker 9: They'd ever planned or ever expected before.
Speaker 2: So let's show images of the re entry.
Speaker 5: And there's an important technology point here, which is that
Speaker 5: SpaceX was able to maintain the camera images that you're
Speaker 5: seeing now because it had Starlin on board, and as
Speaker 5: it went from an altitude of say one hundred kilometers downwards,
Speaker 5: it was bouncing the signal off so many Starling satellites
Speaker 5: in orbit, Lauren, to maintain that kind of high fidelity connection.
Speaker 5: This is what I want to put the question to you, though,
Speaker 5: to quote one of the pre eminent space minds, buzz
Speaker 5: light Year, is that flying or is it just falling
Speaker 5: with style?
Speaker 9: Well, the way.
Speaker 1: That they set up this flight is it was always
Speaker 1: going to come down no matter what. It never was
Speaker 1: intended to reach a full orbit. It was always going
Speaker 1: to be suborbitable, so.
Speaker 9: Gravity was always going to bring it down at some point.
Speaker 1: What they were hoping to see is if they could
Speaker 1: bring it back to Earth intact, and so they were
Speaker 1: kind of hoping that it would stay in one piece
Speaker 1: and splash down in the Indian Ocean.
Speaker 9: It looks like that did not happen.
Speaker 1: They'd lost signal at the all from all of their
Speaker 1: different inputs at the same time, which indicates it probably
Speaker 1: burned up, probably was destroyed in some way.
Speaker 9: So yes, it was falling with style, but that was
Speaker 9: always the plan. But it did fly before that happened.
Speaker 4: Ed Ludlow and his six Espresso shots to the rescue,
Speaker 4: as he might have said too.
Speaker 6: I'm interested, Lauren, ultimately, like we.
Speaker 4: All potentially going to mass we all.
Speaker 6: Ordering with a NASA contract to go to the Moon.
Speaker 6: Where does this put SpaceX?
Speaker 9: Right?
Speaker 1: So with each of these flights they learn a little
Speaker 1: bit more than last time, So I would say they're
Speaker 1: incrementally farther along than they were before.
Speaker 9: I mean, reaching near orbit was a huge achievement.
Speaker 1: They're going to need to be able to do that
Speaker 1: if they want to launch satellites.
Speaker 9: From the vehicle.
Speaker 1: But there's still quite a long laundry list of things
Speaker 1: that they need to achieve.
Speaker 9: In order for this vehicle to be a deep space vehicle.
Speaker 1: For instance, they need to demonstrate transferring super cold propellants
Speaker 1: between the tanks in the vehicle.
Speaker 9: They did have that demonstration on this flight.
Speaker 1: They were trying to see if they could transfer those
Speaker 1: propellants while in space. We aren't sure how that went,
Speaker 1: but they seem to have conducted the experiment, so we'll
Speaker 1: be eager to learn about how that went.
Speaker 9: And then they also have to come up with life
Speaker 9: support systems.
Speaker 1: Demonstrate that it can land on other worlds like the Moon.
Speaker 1: There's a long way to go, but this give some
Speaker 1: confidence that they're removing high direction.
Speaker 4: Lauren Grash busy morning. We appreciate it so much. You
Speaker 4: tour a dream team with all the quotes.
Speaker 2: Okay, it's signed for Talking Tech.
Speaker 5: And in the news, soft Bank is weighing a potential
Speaker 5: investment in one of Europe's hottest AI companies, Mistral. The
Speaker 5: Japanese tech giant has expressed interest in backing the French
Speaker 5: artificial intelligence startup the next time that it raises funds.
Speaker 5: According to sources, any deal can potentially value Mistral and
Speaker 5: more than two billion.
Speaker 2: US dollars plus.
Speaker 5: Fintech giant Klana will begin allowing users in the UK
Speaker 5: to make payments directly from their bank accounts in an
Speaker 5: effort to reduce its reliance on both Visa and MasterCard. Initially,
Speaker 5: the move will help Clana cut costs, and longer term
Speaker 5: the product will help it create a stronger alternative to
Speaker 5: the payment giants networks and finding. Amazon has pledged to
Speaker 5: make fixes to its advertising operation after mistakenly charging online
Speaker 5: merchants to promote product shoppers actually couldn't purchase. The problem
Speaker 5: came to light when a seller discovered he was being
Speaker 5: charged thousands of dollars to advertised merchandise in California, even
Speaker 5: though he'd stopped selling those products there. After Bloomberg described
Speaker 5: the small business owners experience, the company acknowledged that he
Speaker 5: and other sellers paid for missdirected advertisements, and it was
Speaker 5: working to fix the problem.
Speaker 4: Caroline, let's go to a key name to be watching
Speaker 4: today's shares of automation.
Speaker 6: Software company UiPath. They're actually trading a bit lower.
Speaker 4: That's after its first quarter revenue outlook seemed.
Speaker 6: To come a little bit short of some expectations on
Speaker 6: the street.
Speaker 4: But that said, the company reported fourth quarter results they
Speaker 4: really beat those expectations and it's received several analyst upgrades
Speaker 4: on the back of the results. So let's dig into
Speaker 4: where we're likely to see some transparency going forward now
Speaker 4: than the CFO of UiPath, Asheene Gutter, it was great
Speaker 4: to have you here, and Sheen, thank you for joining.
Speaker 10: Thanks for having me Caroline.
Speaker 4: So let's just first of all tackle some of the
Speaker 4: forecast and dip in net retention rates soft subscription sales
Speaker 4: is what BlueBag Intelligence calls out, JP Morgan saying.
Speaker 6: Look, maybe there's some.
Speaker 4: Macro pressures here that still need to be reworked repositioning.
Speaker 4: When can we get clarity on how that macro pressure
Speaker 4: is coming.
Speaker 10: Yeah, Look, I think we've talked about the macro environment
Speaker 10: being relatively stable in the sense that it continues to
Speaker 10: be variable. We have different pockets that have strength. Our
Speaker 10: enterprise businessing is incredibly strong. If you look at our
Speaker 10: customers growing greater than a million dollars. They're up thirty
Speaker 10: one percent in the fourth quarter, and we look at
Speaker 10: that as a real sign of strength in terms of
Speaker 10: enterprise spending. That said, the lower end of the market
Speaker 10: that's where we see volatility, and so overall we look
Speaker 10: at a very positive environment for AI and automation and
Speaker 10: the transformative effects of our platform. That's why we actually
Speaker 10: raise total year estimates for the total for the coming
Speaker 10: year by close to thirty million dollars.
Speaker 4: Let's talk about convincing that lower end of the market
Speaker 4: that this is the right investment at the right time
Speaker 4: despite those macro pressures. I mean, JP Morgan seeing meaningful
Speaker 4: reacceleration ar our growth and I'm sure because if the
Speaker 4: AI promise and realization, what are you doing differently in
Speaker 4: your automation software?
Speaker 2: Yeah, I think multiple things.
Speaker 10: One is, we've had several great product releases that are
Speaker 10: out there. If you look at the AI trends that
Speaker 10: have been there, We've been actually investing for the last
Speaker 10: five years. So things like Autopilot, which enables natural language
Speaker 10: to allow developers to create automations faster, that's being released
Speaker 10: that's going to go into production and being priced in
Speaker 10: the summertime for us. When you look at areas like
Speaker 10: intelligent document processing, this isn't just seeing a document, this
Speaker 10: is processing, understanding and processing the billions of documents that
Speaker 10: exist in governments and enterprises. That is meaningfully scaling now
Speaker 10: with our customers. So when we look at those trends,
Speaker 10: when we look at the C level conversations that we're having,
Speaker 10: they're no longer talking about digital transformation, They're talking about
Speaker 10: AI transformation.
Speaker 1: Right.
Speaker 10: They need business automation platforms, and that's where we come
Speaker 10: in and that's where.
Speaker 5: We're valid It's in the last eighteen months has been
Speaker 5: about a romantic discussion around generative AI, in particular wreck
Speaker 5: to consume a focused chatbots.
Speaker 2: But a lot of people I.
Speaker 5: Speak to it now just coming to the honest reflection
Speaker 5: that where AI is most present and useful is an
Speaker 5: automation you do large scale, end to end. But I
Speaker 5: wonder if you've kind of feel like you got left
Speaker 5: behind in all of the chat around AI when it's
Speaker 5: actually the tools you're working on that everyone's now saying, oh,
Speaker 5: that's actually quite useful.
Speaker 10: No, actually, it's the opposite. From my perspective, to be
Speaker 10: candid with you, if you go back to February of
Speaker 10: last year, there was discussions that said, hey, is UiPath,
Speaker 10: you know, is it really an AI company? You fast forward,
Speaker 10: you know through last year we had thousands of customers,
Speaker 10: tens of thousands really looking and understanding US sea level
Speaker 10: executives attending our AI summit. And when you look at
Speaker 10: analysts notes today, I think one of the analysts even
Speaker 10: say that UiPath is AI that works. So the romantic
Speaker 10: notions of AI are great. We're excited about the macro trends.
Speaker 10: We're investing not just for the next year, but what's
Speaker 10: possible over the next ten years.
Speaker 2: But it's practical today.
Speaker 10: And so when you look at our revenue AI and
Speaker 10: the areas that our platform can drive growth that is
Speaker 10: already taken route, it is practical right now.
Speaker 4: I've certainly been the beat of Kathy Wood on some
Speaker 4: other names in the AI space, ypath key one of them.
Speaker 6: CFO. Actually can't go to a great to some time
Speaker 6: with your post roundings.
Speaker 2: Thanks hi everyone the show here.
Speaker 11: Just wanted to share some thoughts with our US users
Speaker 11: about the disappointing vote in the House of Representatives. There
Speaker 11: has been a lot of misinformation and I hope to
Speaker 11: clarify some things. First, thank you to our incredible community.
Speaker 11: You are what makes TikTok so special. Thank you for
Speaker 11: making your voices heard. Over the last few years, we
Speaker 11: have invested to keep your data safe and our platform
Speaker 11: free from outside manipulation. We have committed that we will
Speaker 11: continue to do so.
Speaker 4: It's Nazi Downstaird team with the TikTok CEO show to
Speaker 4: react to the quote disappointing House vote. Let's bring in
Speaker 4: Bloomberg Opinions US tech columnist Dave Lee, who's about to.
Speaker 6: Do a dance and it's not but it's actually just.
Speaker 4: Going to tell us a little bit more about your
Speaker 4: point of view is a really interesting one you took
Speaker 4: to Bloomberg Opinion before actually the House.
Speaker 6: Had voted it through, but looked likely it.
Speaker 4: Was going to saying, don't take this to the last
Speaker 4: moment from a legal battle.
Speaker 6: TikTok actually just sell and sell now why Well.
Speaker 12: I think if this is going to be an inevitability,
Speaker 12: which some people feel it is, then the maximum value
Speaker 12: they're going to get from a sale of TikTok would
Speaker 12: be as soon as possible. Right, I was at the
Speaker 12: south by Southwest Festival in Austin this week, which is
Speaker 12: a hub for creators and social media figures to come
Speaker 12: together and discuss the industry. And already people are starting
Speaker 12: to say, well, is this a good place to build
Speaker 12: my following anymore? Because it may not be here by.
Speaker 2: The end of the year, and so there is a.
Speaker 12: Danger that if the sale takes too long, the value
Speaker 12: of the app might have diminished and they won't get
Speaker 12: as much money as they could have done. However, interestingally,
Speaker 12: you know it's writing that column some of the fallout.
Speaker 2: We've seen from the users.
Speaker 12: You do wonder what exactly a buyer might be getting
Speaker 12: because you heard there from the CEO of TikTok him saying,
Speaker 12: you know, the user base is what makes the site
Speaker 12: what it is. That's kind of true, right, And if
Speaker 12: there's a feeling that people don't like the new owners
Speaker 12: or they think that this has been done incorrectly, then
Speaker 12: the value of the APPI go down as well. So
Speaker 12: it's a really really quite quite tense situation.
Speaker 5: I'm just trying to do the math. I think you're right, Like,
Speaker 5: what is it you're buying? The last reported valuation of
Speaker 5: byte Dance, the parent company was two hundred and sixty
Speaker 5: eight billion, right, and that makes it by some distance,
Speaker 5: the world's most valuable private company. There are one hundred
Speaker 5: and seventy million US TikTok users. They're about a billion
Speaker 5: around the world. How do you find a dollar value
Speaker 5: and then price in all of the shenanigans that is
Speaker 5: happening this week precisely?
Speaker 12: And also it's interesting to think about what exactly is
Speaker 12: for you know, because technically this bill would only require
Speaker 12: you know, the US user base to be part of
Speaker 12: this divestitory. If it wants to op say in the US,
Speaker 12: that doesn't speak to the rest of.
Speaker 2: The global community.
Speaker 12: It's big, got a big presence in Brazil, it's obviously
Speaker 12: got a big presence in Europe, and so would that
Speaker 12: be a separate company and would that be obviously less
Speaker 12: valuable if it was separated from the US. I also think,
Speaker 12: you know, we need to think about the value of
Speaker 12: the algorithm and the technology that's behind TikTok. Of course,
Speaker 12: the reason why it exploded in popularity, as you know
Speaker 12: ed is you know, it's algorithm knows what you like
Speaker 12: and it shows you more of it, and that's how
Speaker 12: it's grown. Now it seems like if this sale was
Speaker 12: to go ahead, China would still try to retain the
Speaker 12: secret source, you know, the thing that makes TikTok as popular.
Speaker 2: As it is. And you know, without that.
Speaker 12: Secret source, what are you getting? You might you might
Speaker 12: be getting something that's not worth very much at all.
Speaker 5: Frankly, just real quick, yesterday after the vote, I got
Speaker 5: leaked to memo that Mike Dabs, who's on the public
Speaker 5: policy team at TikTok, senter all staff and it didn't
Speaker 5: say much other than they still think that Project Texas,
Speaker 5: the idea of housing US user data in US domestic
Speaker 5: data centers currently run by Oracle, is going to convince
Speaker 5: people that it's fine. But that then leads me to believe, well,
Speaker 5: who might buy TikTok's US operations, or who might come
Speaker 5: to the rescue to operationalize whatever the solution is.
Speaker 12: I guess one of the striking things about this particular
Speaker 12: moment in time is, you know, some of the companies
Speaker 12: that might have the funds and you know, the know
Speaker 12: how to buy and own a company like TikTok, they
Speaker 12: may not be in a position to do that. I mean,
Speaker 12: it certainly couldn't be brought by Meta for anti trust concerns.
Speaker 12: You question whether someone like Microsoft, who was part of
Speaker 12: that discussion when all of this was beginning a couple
Speaker 12: of years ago. It doesn't seem like we're in the
Speaker 12: climate where a big tech company could take it over,
Speaker 12: but it could be a coalition of other buyers. We
Speaker 12: saw Steve Nishan, the former Treasury sectory today talking about
Speaker 12: how he'd gained he was seeking to form a.
Speaker 2: Group of invest is to buy the app.
Speaker 12: But I wonder, you know, if that is the kind
Speaker 12: of deal that ends up happening, what will these TikTok
Speaker 12: users think of that? Because of course, you know, as
Speaker 12: a former Trump administration official, I mean that's going to
Speaker 12: be seen as particularly disagreeable I think by a large
Speaker 12: member of those TikTok users. So it's finding the right
Speaker 12: buyer is going to be incredibly difficult.
Speaker 13: I think.
Speaker 4: Here with the opinions, we thank him, Yes, techconomists, Dave Lee. Meanwhile,
Speaker 4: we were just talking about what creators are going to think,
Speaker 4: what consumers are going to think. Let's get that create
Speaker 4: a perspective for you on potential separation. Even a ban
Speaker 4: a Ven's boxes with US president and co founder of VELTK.
Speaker 4: It's one of the world's largest contextual shopping apps, and
Speaker 4: basically your clients are Indeed, you work with the creators
Speaker 4: no matter where they happen to be and where they're
Speaker 4: following is to enable shopping and were what they wear
Speaker 4: and see what they post. What do your content creators
Speaker 4: think of potentially having to pull back on TikTok?
Speaker 14: Yeah, this industry was created around tenty eleven when we launched,
Speaker 14: so we're now fourteen years in ish and what we've
Speaker 14: seen is that history tells us these creators have a
Speaker 14: transferable skill set. We've seen almost a new platform emerge
Speaker 14: every two years, and these creators have both been able
Speaker 14: to expand their audiences on these new platforms, new creators
Speaker 14: have been born. This really just reinforces the importance of
Speaker 14: having a home base for creators because because we know
Speaker 14: that these platforms come and go for us, we've built
Speaker 14: the lt K app for them to have a place
Speaker 14: where they can collect community across all different media platforms
Speaker 14: and be able to service them in the way that
Speaker 14: the hospitality business would over the years, regardless of which
Speaker 14: platform is really in vogue at the moment.
Speaker 4: Have any of the creators you talked to work with
Speaker 4: a newer creator yourself. In many ways, have they spontaneously
Speaker 4: exited TikTok preemptive of any of these concerns. I mean,
Speaker 4: for example, Thailand and j Levins, he's a Fortnite streamer
Speaker 4: of twenty four million subscribers across other platforms did pull back,
Speaker 4: for example, from TikTok originally.
Speaker 6: Certainly, these creators are hyper aware.
Speaker 14: This is not something that is just a side gig
Speaker 14: for a lot of our creators. It's actually a full
Speaker 14: time business and even a family and a generational business.
Speaker 14: And so they stay aware of what's happening, even from
Speaker 14: a policy perspective.
Speaker 6: And we're now anniversary a year.
Speaker 2: Since TikTok was last.
Speaker 14: You know, speaking to government, and we saw that our
Speaker 14: creators started to understand those that were single platforms started
Speaker 14: to really move their audiences into a safe place. But
Speaker 14: we have to remember it with all of these platforms,
Speaker 14: sometimes there's an evolution and sometimes there's a revolution, but
Speaker 14: ultimately these platforms don't have long term staying power. Creators
Speaker 14: migrate and they migrate their audiences. And again, these creators
Speaker 14: have such a transferable skill set that you know, I
Speaker 14: know that they are preparing themselves to further into and
Speaker 14: future proof of their business.
Speaker 5: But I find that such an interesting point of view.
Speaker 5: But creators are now finding careers as creators, right, it
Speaker 5: is their business, And you're basically arguing that while if
Speaker 5: TikTok goes away, they'll just transfer their skills to another platform.
Speaker 5: You know, Instagram and reels in particular is quite similar
Speaker 5: to TikTok. But do you have any sense of where
Speaker 5: they're making the most money, right If TikTok is a
Speaker 5: complete cash cow for some of these creators, that I
Speaker 5: imagine they'd be a bit worried about having to transfer
Speaker 5: their energies elsewhere.
Speaker 14: Well, I think that's I think sort of a piece
Speaker 14: of the misinformation here is that creators actually aren't largely
Speaker 14: paid by these platforms. And so know, YouTube is certainly
Speaker 14: one of the greatest, greatest payers, but when you look
Speaker 14: on down, the business models are such that they're actually
Speaker 14: taking one hundred percent margin on ad revenue. So as
Speaker 14: a creator, you actually have to find and build your
Speaker 14: own business, whether that's through partnerships or that's thue a
Speaker 14: commission on sales like.
Speaker 6: What LTK offers.
Speaker 14: We actually offer both of those things, and so these
Speaker 14: creators aren't losing a direct line of revenue from the platform.
Speaker 14: We have to look at who's paying the bills here.
Speaker 14: So the brands are the ones that are investing in
Speaker 14: creator and influencer marketing. With LTK, they've invested over two
Speaker 14: point seven billion dollars to date. Goldman expects that to
Speaker 14: triple over the.
Speaker 2: Next three years.
Speaker 14: This is an industry that is driven by consumer demand,
Speaker 14: and consumers want to be entertained for free on the internet.
Speaker 14: We see that adults on average or spending about an
Speaker 14: hour a.
Speaker 2: Day on TikTok.
Speaker 14: I believe there's gonna be a lift and shift if
Speaker 14: TikTok is in fact ban, But we have to go
Speaker 14: back to what Day was saying in your earlier conversations,
Speaker 14: which is what we're talking about right now in government
Speaker 14: is actually a divestiture. So this is much more like
Speaker 14: what we saw with Hint in twenty twenty and Hinge users,
Speaker 14: you know, continued on and so I actually expect that
Speaker 14: you know that TikTok users, whether you're a brand, a creator,
Speaker 14: a consumer, will continue to have access to this platform
Speaker 14: for a while.
Speaker 5: But thank you for the explanation on how the business
Speaker 5: model works. I think our audience will find that very
Speaker 5: interesting on the creator economy side.
Speaker 2: And you're right, it's a divest or band bill.
Speaker 5: What are you hearing about how people feel about one
Speaker 5: big tech company buying the TikTok assets, And what are
Speaker 5: you hearing about the other platforms trying to steal some
Speaker 5: creator content, right, like saying, sleeve TikTok come to us, Right?
Speaker 14: You know, it's become very competitive in the space for
Speaker 14: media platforms, and they all are trying to attract creators
Speaker 14: because ultimately we're the ones creating all the content that
Speaker 14: these consumers see. When you look at these platforms, there
Speaker 14: are various, you know, types of pipes, I would say,
Speaker 14: but unless the creator shows up an entertainment audience, there's
Speaker 14: nothing for them to do there. So we've seen these
Speaker 14: these platforms become more and more competitive. When you talk
Speaker 14: about who would purchase this platform, certainly in the current
Speaker 14: regulatory environment, it would have to be a unique player.
Speaker 14: And I could actually see it being kind of a
Speaker 14: confluence of players coming together that maybe we're even nameless
Speaker 14: faceless and pulling this platform forward. And I think that
Speaker 14: would be healthy for the ecosystem for there to be
Speaker 14: a continued kind of you know, a difference in kind
Speaker 14: of who holds the power in this space on the
Speaker 14: creator and the brand side. So even since last year,
Speaker 14: last March, when these hearings first started, the creator industry
Speaker 14: has come such a long way.
Speaker 2: So while as when.
Speaker 14: This industry started, our brands were looking it platform by platform,
Speaker 14: today they're actually logging to platforms like LTK three sixty
Speaker 14: where they're getting full funnel campaign information, cross platform, cross media,
Speaker 14: and they're able to understand what they're doing with that
Speaker 14: one specific creator, whether that's on TikTok, Instagram, YouTube, LTK,
Speaker 14: and so they're making decisions actually at the industry level
Speaker 14: now and not specifically at the platform level. And tools
Speaker 14: like AI are making platforms like LTK three sixty possible,
Speaker 14: which is really removing any sort of subjectivity that used
Speaker 14: to exist in this industry, and it's helping our marketers
Speaker 14: to actually find more efficiencies in creator marketing. And I
Speaker 14: think that's why you see Goldman City being so bullish
Speaker 14: about this industry.
Speaker 4: I'm a ven's box really great to get your expertise
Speaker 4: across a wealth of areas. President, co founder of LTK, Thank.
Speaker 5: You Unstructured raised a forty million dollars Series B to
Speaker 5: make enterprise data l l M ready.
Speaker 2: The round was led by men Ventures.
Speaker 5: With participation from Data Bricks Ventures, IBM Ventures and in
Speaker 5: Videos Venture Arm and others.
Speaker 2: Let's bring in the lead.
Speaker 5: Investor in this round, Menlo Ventures partner Tim Tally on
Speaker 5: today's VC Spotlight. I want to talk about data ingestion
Speaker 5: and pre processing because we haven't talked for quite a
Speaker 5: while about the data that goes into building a large
Speaker 5: language model. But I first want to talk about the
Speaker 5: others in the round. What should we conclude from the
Speaker 5: fact that Data Bricks and Nvidia put their own venture
Speaker 5: money into this round as well.
Speaker 15: I mean, I think I should tell you how important
Speaker 15: it is to have clean data before it goes into
Speaker 15: training things like language models. I would say that it's
Speaker 15: not just the language model preparation that unstructure is powering.
Speaker 15: It's actually some of the more powerful generator of a
Speaker 15: applications themselves. So when you look at things like legal
Speaker 15: tech fintech applications that are leveraging things like the anthropic
Speaker 15: and open AI, they don't just use the anthropic in
Speaker 15: open EI, they're actually using a lot of unstructured data
Speaker 15: to sort of merge them together and do something more
Speaker 15: powerful together. That's really the power of constructured It cleans
Speaker 15: and prepares unstructured data so that it can go into
Speaker 15: these generative AI applications.
Speaker 2: We're moving from a world where.
Speaker 5: Large angage models have many hundreds of billions of parameters
Speaker 5: to many more large angrege models with fewer parameters. Right,
Speaker 5: this is a forty million dollar Series B. Some of
Speaker 5: the Series b's I've seen for the actual LLM builders
Speaker 5: are just astronomical. Why is this a lower amount? Why
Speaker 5: is there not such I guess hype reflected in the size.
Speaker 2: Of the round because there's a language model itself.
Speaker 15: It's more about the data pipeline and the preparation of
Speaker 15: the data. If it were a language model stuff, you
Speaker 15: might see this sort of more of a more of
Speaker 15: an extreme.
Speaker 2: Multiplier, if you will.
Speaker 15: But because it's more of an ETL preparation pipeline system,
Speaker 15: that's why you're not seeing that sort of insane multiplication when.
Speaker 4: We're seeing insane appetite to be backing some of these companies,
Speaker 4: not just coming from your normal typical venture capital but.
Speaker 6: From corporate VC. How competitive is it getting in the
Speaker 6: space for you?
Speaker 15: It's getting quite competitive. You know, every VC in the
Speaker 15: area wants to be involved in artificial intelligence investments right now,
Speaker 15: and so it's getting competitive. I would say the corporate
Speaker 15: vcs are quite additive. They're helpful, They add a lot
Speaker 15: of value to these mounds, and we're excited to have
Speaker 15: them participate.
Speaker 4: When I'm looking at an IBM, at data bricks or
Speaker 4: indeed a n video. Of course, the US companies are
Speaker 4: you at the moment with the context with which we're
Speaker 4: currently seeing technology. When we've got an administration or indeed
Speaker 4: Congress people taking issue with foreign ownership of really important
Speaker 4: companies here in the United States or avenues to target
Speaker 4: consumers in the US, does it give you pause of
Speaker 4: getting involved with vcs that don't come from the United States.
Speaker 15: It definitely gives you pause and makes you stop and think.
Speaker 15: But we're really excited about the participation from Nvidio and
Speaker 15: IBM and data bricks.
Speaker 4: I'm really interested more broadly in some of the AI
Speaker 4: bets you have already been making.
Speaker 6: Then when you're looking at a pine cone, when.
Speaker 4: You're looking at ultimate this stuff being used, how are
Speaker 4: we seeing it turned from hype into reality.
Speaker 15: There's a lot of value being created right now. You're
Speaker 15: seeing a lot of companies that use companies like Anthropic,
Speaker 15: like pine Cone, some of our other investments generating a
Speaker 15: lot of cash.
Speaker 2: A lot of software is being bought.
Speaker 15: You're obviously seeing a lot of popular apps being generated
Speaker 15: right now, and so a lot of our focus is
Speaker 15: on building investing in infrastructure companies that power those applications.
Speaker 2: We're really excited about what's happening.
Speaker 5: Tim You'll understand that there is a just microscopic focus
Speaker 5: at the moment of the TikTok situation.
Speaker 2: But what I want to talk about.
Speaker 5: Is what's happening in Silicon Valley, Visa the Chinese technology companies,
Speaker 5: in American technology companies, you know, in AI in particular,
Speaker 5: there are many vocal advocates who say there's a lot
Speaker 5: of talent in China. But also at an academic level,
Speaker 5: we're all kind of working on the same thing. How
Speaker 5: are you weighing through that as a firm right now?
Speaker 15: Yeah, we're just being very careful about what we invest in.
Speaker 15: I focus primarily on instructure investments, and so when I
Speaker 15: think about some of that software being built overseas, I
Speaker 15: tend to think about how to be sold here, right
Speaker 15: if there's a ton of engineers building applications overseas and
Speaker 15: countries like China, I worry a lot about what countries
Speaker 15: here in the US will buy, and so it gives
Speaker 15: me a great pause and sort of slows me down
Speaker 15: in terms of thinking about investing overseas.
Speaker 4: So it sounds like you're taking a slower idea and
Speaker 4: suddenly more pause when it comes to investing in foreign companies,
Speaker 4: but also alongside foreign investors.
Speaker 6: Where then, do you think this ultimately.
Speaker 4: Takes us in terms of the US prowess right now?
Speaker 4: Do you think AI is streets ahead here in the
Speaker 4: United States compared to the.
Speaker 6: Rest of the world.
Speaker 15: I think the US is ahead in terms of what's happening.
Speaker 15: You look at companies like Opening Air and Topic they're
Speaker 15: based here in the US. I'm really excited about what
Speaker 15: we're doing. We're investors in Anthropic and they've released three
Speaker 15: models just in the last couple of weeks that are probably,
Speaker 15: you know, right up there with Opening the Eye in
Speaker 15: terms of capability sets.
Speaker 2: So we're excited about what's happening, and.
Speaker 6: You're putting your money where your mouth is.
Speaker 4: Tintali, thanks for coming on and talking all about the
Speaker 4: latest round and indeedwhere else you're putting the money to work?
Speaker 6: Menal adventures? He joins the board. Of course, I'm unstructured. Paramount.
Speaker 4: Well, it's agreed to sell it's thirteen percent steak and
Speaker 4: it's Indian TV business by a comm eighteen to its
Speaker 4: partner over there, Reliance Industries. Well it earns five hundred
Speaker 4: and seventeen million dollars. Here to tell us why and
Speaker 4: what else is going on in India as well as
Speaker 4: me most Chris Palmry and just from the Paramount perspective, here,
Speaker 4: is this all about getting more core getting rid of
Speaker 4: non core assets at the moment.
Speaker 13: Yes, exactly that. I mean, we're seeing this huge shake
Speaker 13: up in the Indian media business right now. Eight point
Speaker 13: five billion dollars combination of Reliance and Disney's business there
Speaker 13: that includes this by Com eighteen company that Paramount owned
Speaker 13: thirteen percent of that Steak was going to shrink. So
Speaker 13: they were becoming a much smaller investor. And at a
Speaker 13: time when, as you mentioned, they've been trying to reduce
Speaker 13: their debt load, they still have fifteen billion in debt.
Speaker 13: They've sold off real estate, sold off sign.
Speaker 9: And it's just a book publishing.
Speaker 13: They talked about some channel sales, so just sort of
Speaker 13: all you know, merged together the opportune times for Paramount.
Speaker 2: Chris.
Speaker 5: Is this a story about the landscape in India or
Speaker 5: is this a story about Paramount trying to work out
Speaker 5: what on earth to do with itself.
Speaker 13: I think it's a story about the media landscape all
Speaker 13: over the world, and I think it's a window and
Speaker 13: what we're probably going to see this year in the
Speaker 13: US Paramount and comcasts in talks about merging Peacock and
Speaker 13: Paramount Plus, for example, I think we'll see a lot
Speaker 13: of consolidation similar to what India has already gone to.
Speaker 2: Here.
Speaker 5: I just want to go back to Byron Allen as well.
Speaker 2: What happened with that.
Speaker 13: Doesn't seem to be getting a lot of traction from
Speaker 13: the Paramount folks right now.
Speaker 9: They're still doing due diligence is.
Speaker 2: What they called it.
Speaker 13: With David Ellison and is offered to buy out the
Speaker 13: Red Stones Emerged Guidance. That's been the main focus. Apollo
Speaker 13: made an offer for Paramount Pictures alone, and so that's
Speaker 13: not particularly being well received by the Paramount folks, who
Speaker 13: like to keep the content portion of the company together
Speaker 13: and either you know, find a way out to the
Speaker 13: red stones and focus on content and sort of alleviating
Speaker 13: the losses and the streaming bists.
Speaker 2: That seems to be the major focus right now.
Speaker 4: Well, we keep our major focus on all things to
Speaker 4: do with these.
Speaker 6: Content creation companies.
Speaker 4: Chris Comary, thank you so much for bringing us the
Speaker 4: latest on Paramount and the exit from India.
Speaker 6: Meanwhile, I mean we are.
Speaker 4: In front and center content creation in all its guys
Speaker 4: is today whether we're watching rockets of RX and how
Speaker 4: many people tuned into that ed.
Speaker 5: Well on x more than three million, which I thought
Speaker 5: we should have discussed. Actually, that's astonishing. Next week we
Speaker 5: can talk about it.
Speaker 4: Well, apparently they're video first over there too, so everyone
Speaker 4: wants in.
Speaker 6: Meanwhile, of course we don't.
Speaker 4: Seemingly want the Chinese to be owning it according to
Speaker 4: US politicians.
Speaker 6: Meanwhile, that does it. From the addition of Bloomberg Technology.
Speaker 5: There is a lot to recap from today, So check
Speaker 5: out the podcast. So many of you are listening to
Speaker 5: the podcasts all over the world. This is Bloomberg Technology