Speaker 1: Bloomberg Audio Studios, podcasts, radio news from the heart of
Speaker 1: where innovation, money and power collide in Silicon Valley and beyond.
Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed.
Speaker 2: Ludlow live from New York.
Speaker 3: I'm Caroline Hyde, and this is Bloomberg Technology.
Speaker 4: Coming up.
Speaker 3: The Magnificent seven is in the reader sell off in
Speaker 3: tech megacaps as Trump's trade war is still on the horizon.
Speaker 3: Plus an exclusive conversation with the CEOs of Anthropic and
Speaker 3: Data Bricks, who are out with a new partnership to
Speaker 3: bring claud models to the enterprise and advertisers return to
Speaker 3: X with the platform Projector to post a jump in
Speaker 3: advertising sales.
Speaker 4: That's according to new research.
Speaker 3: Will bring you those X exclusive numbers later this hour,
Speaker 3: but first we check in on a market that is
Speaker 3: sinking once again. Then as that one hundred off by
Speaker 3: nine tenths of a percent, but we're seeing the Magnificent
Speaker 3: seven all training lower and.
Speaker 4: By some significant numbers.
Speaker 3: Move on and have a look at what's underneath the
Speaker 3: herd as we still try to digest what happens in
Speaker 3: terms of tariffs and ultimately what valuations should be at
Speaker 3: for big tech. We're off by three point six percent
Speaker 3: again for Tesla.
Speaker 4: This is as we see the downwards of.
Speaker 3: Directory continue after the European numbers bone ill for the company.
Speaker 3: We're looking at fundamentals that continue to get under pressure,
Speaker 3: and indeed in videos.
Speaker 4: Off by four percent. We're seeing all the points.
Speaker 3: Drags from mag seven. I shine like what's happening with ARM.
Speaker 3: We'll get to that in a moment. But the legal
Speaker 3: tip for tats are going on with qual Common ARM
Speaker 3: and I'm looking at Amazon off by one point four percent.
Speaker 3: Maybe the one that's starting to look like is more
Speaker 3: juicy from a valuation perspective, Let's get to it with
Speaker 3: Ryan Valastelica, who is with us, and this is another
Speaker 3: day of stress on the valuations of the Magnificent seven.
Speaker 3: Let's just go to in video and some of the
Speaker 3: reasons we're seeing the sell off from a macro perspective,
Speaker 3: Is this about the economy?
Speaker 2: Yes?
Speaker 5: Broadly speaking, yes, I would say that is the case.
Speaker 5: There's a still a lot of uncertainty about tariff policy,
Speaker 5: about the implications for overall economic growth, the outlook for
Speaker 5: the consumer, the outlook for businesses. We are seeing signs
Speaker 5: of businesses or maybe pulling back on investments is because
Speaker 5: they are not sure what the tariff situation is going
Speaker 5: to be, what the economic outlook is going to be.
Speaker 5: All that kind of frozen activity, all that uncertainty is
Speaker 5: really just causing people to take some profits if they
Speaker 5: still have them, and just you know, kind of take
Speaker 5: a pause and step back.
Speaker 3: But when you step back, you start to look at
Speaker 3: the valuations, You look at the fundamentals, and you've done
Speaker 3: exactly that. For example, Amazon not been trading at these
Speaker 3: sorts of price to future earnings levels in years.
Speaker 5: Yeah, so some of these names, you know, at the
Speaker 5: start of the year, there were a lot of concerns
Speaker 5: about valuations. Those concerns are a lot smaller now just
Speaker 5: given how much some of these names have come down.
Speaker 5: So in the case of Amazon, they have pretty strong
Speaker 5: earnings growth. They've been really focusing on efficiency and cost
Speaker 5: cutting things that are really improving their profitability. That is
Speaker 5: really driving the multiple down. The multiples about half of
Speaker 5: what it was over the longer term. It is cheaper
Speaker 5: than Apple now, and just a few years ago Apple
Speaker 5: was several times cheaper than Amazon. So is quite the
Speaker 5: flip in narrative when it comes to tech valuations. Amazon
Speaker 5: is cheaper than other retail names like Walmart and Costco.
Speaker 5: It's a stock that, you know, given people continue to
Speaker 5: have pretty optimistic views about its long term growth potential
Speaker 5: the multiple here, it wouldn't surprise me if you start
Speaker 5: seeing people look at a name like this, say, to
Speaker 5: really come off its lows. The fundamentals look pretty intact.
Speaker 5: Still a lot of you know, earning's growth potential and
Speaker 5: revenue growth potential ahead even in a rockier economic climate.
Speaker 5: Maybe that's why they start taking a look at a
Speaker 5: stock like this.
Speaker 4: But who is taking a look at a stock like this?
Speaker 6: Ryan?
Speaker 3: You get so much inbound and response to your stories.
Speaker 3: Are people starting to want to catch what seems like
Speaker 3: a falling life?
Speaker 5: You know, that's something I've heard, the falling knife thing.
Speaker 5: I do think people still feel like these are pretty
Speaker 5: safe companies. Isn't broken even if some of the arrogance
Speaker 5: let out, even the multiples come down a little bit more.
Speaker 5: I don't think people are really concerned about the long
Speaker 5: term prospects of these companies. There can still consider to
Speaker 5: be very dominant in their field, and even if we
Speaker 5: see a weaker economic outlook, it wouldn't surprise me if
Speaker 5: we saw Amazon, for example, maybe consolidate its market share,
Speaker 5: especially in online retail or retail. Overall, cloud business remains
Speaker 5: very strong and has an AD business that's growing a lot.
Speaker 5: There's certainly a lot of positives you can point to here,
Speaker 5: even if we see a lot more volatility in the
Speaker 5: short term.
Speaker 3: Ran Rasselica, we thank you from a macro perspective across
Speaker 3: Magnificent seven. Meanwhile, just take a look at ARM and
Speaker 3: coal Comb once again. Now this is as Arms trading
Speaker 3: significantly lower today. As you can Seequalcomb, as is being reported,
Speaker 3: has begun a global antitrust campaign against the chip designer,
Speaker 3: alleging in private meetings that ARM is guilty of anti
Speaker 3: competitive behavior. So all according to sources, and we want
Speaker 3: to get the analysis of all of this in Mandy
Speaker 3: saying from Bloembag Intelligence, and for me it immediately becomes
Speaker 3: a question.
Speaker 4: Of just what a distraction this is.
Speaker 3: But ultimately this is Qualcom coming out and feeling and
Speaker 3: stating that ARM is getting competitive with them and therefore
Speaker 3: stopping access to their technology, to their designs.
Speaker 7: Yeah, and especially when it comes from one of your
Speaker 7: top two customers in the case of ARM, you know,
Speaker 7: Qualcom is a top two customer. It's never easy. So look,
Speaker 7: ARM did bring a lawsuit back in twenty twenty four,
Speaker 7: which they ended up losing against Qualcomm, and to me,
Speaker 7: it reminds me, you know what Qualcom faced against Apple.
Speaker 7: I mean, I remember twenty seven to twenty nineteen they
Speaker 7: had the back and forth where Apple was using Qualcom
Speaker 7: technology and Qualcomm didn't go you know, anywhere with sort
Speaker 7: of getting more royalties from Apple. So I think ARM
Speaker 7: is in a weak position here given you know, I mean,
Speaker 7: Qualcom is using all the IP that ARM has to
Speaker 7: offer and paying for it. And you know, granted they
Speaker 7: made that acquisition of Nuilla, but at the end of
Speaker 7: the day, they're still using ARMS instruction sets and it's
Speaker 7: hard to really prove that, you know, Qualcomm is doing
Speaker 7: anything wrong. So I'm not surprised that they are going
Speaker 7: all in with this centi trust campaign, but I think
Speaker 7: ARM is in a weaker.
Speaker 3: Position coming complaints to the European Commission. We understand the
Speaker 3: sec in the US Career Fair Trade Commission, Man Deed,
Speaker 3: I just want to get the perspective of the companies.
Speaker 3: Qualcombs declined to comment. Suppose people from this regulators also
Speaker 3: declining arms, saying it's confident it will prevail.
Speaker 4: But I go to the distruction perspective here.
Speaker 3: Because they say they remain focused on enhancing innovation. Does
Speaker 3: innovation generally dip when companies are locked in what might.
Speaker 4: Be a year long, years long legal disputes.
Speaker 7: Yeah, and especially you know with the AI market moving
Speaker 7: so fast with inferencing. I mean everyone is trying to
Speaker 7: come up with new designs in terms of how to
Speaker 7: do infencing faster. So you're right, it is a distraction.
Speaker 7: And in the case of Qualcomm, they have expressed interest
Speaker 7: and even Intel. I mean granted Intel has a new
Speaker 7: CEO now and we don't know what they will end
Speaker 7: up doing with the overall business, but clearly Qualcomm has
Speaker 7: ambitions on the CPU side, and really they want to
Speaker 7: do much more with the infance in hip beyond smartphones.
Speaker 7: So to your point about distraction, I mean all the
Speaker 7: back and courts and the lawsuits do seem like a distraction.
Speaker 3: Many people wanting to go beyond the smartphone in this environment.
Speaker 4: Man Deep saying thanks for joining us. Coming up, we're.
Speaker 3: Here from the CEOs of Anthropic and Data Bricks on
Speaker 3: their brand new partnership aipolicies under the Trump administration and
Speaker 3: so much more. This is brume meg Technology, dat to
Speaker 3: Bricks and Anthropic just announced a five year partnership to
Speaker 3: offer anthropic models and services on data bricks. Basically, it's
Speaker 3: bringing Anthropics Claude models directly to ten thousand companies. Tim
Speaker 3: Centevic sat down when the Anthropic CEO Dario Mmoda and
Speaker 3: Data Bricks CEO Ali.
Speaker 4: Gotzi to discuss what this means for their customers.
Speaker 8: What it really means is that you can use securely
Speaker 8: Anthropic inside data bricks. You can get all that intelligence,
Speaker 8: especially all the programmability these models. Claud are really good
Speaker 8: at programming, and you can use that for data science
Speaker 8: and you can use it together with all the data
Speaker 8: that we have. So enterprises have been storing their data
Speaker 8: with data bricks for the last decade. How do you
Speaker 8: build AI that can reason on that data. So we're
Speaker 8: super excited to bring those llms and that data together
Speaker 8: in the partnership.
Speaker 9: Daria, we know what all is getting out of it,
Speaker 9: what are you getting out of it?
Speaker 10: So we're really excited to bring Claude to a wide
Speaker 10: range of enterprise customers. Claud Claud models are growing very fast.
Speaker 10: Models are you know, the API revenue is growing growing
Speaker 10: at something like a twenty x annualized rate.
Speaker 2: But we want to make.
Speaker 10: Sure that our models can meet all the requirements that
Speaker 10: complex enterprise customers have. Uh and we can do this
Speaker 10: with the help of data bricks, as Olie was saying,
Speaker 10: we can take our models, which are the world best
Speaker 10: for coding and many other tasks, and use use data
Speaker 10: bricks as tools to operate on the customer data and
Speaker 10: we can work together to secure that customer data and
Speaker 10: you know, make sure that customers can be assured that
Speaker 10: they get the proper security experience. Both companies value things
Speaker 10: like safety, security, privacy, things that enterprise customers greatly value.
Speaker 10: Where's the fastest area of growth for you? You know,
Speaker 10: I think I think, by far and away, the fastest
Speaker 10: area of growth is code. Claud models are better than
Speaker 10: anything out there by wide margin in terms terms of
Speaker 10: how they code. We power a large number of players
Speaker 10: in the space, including Cursor, Codium, Cognition, GitHub, Copilot, First Sell,
Speaker 10: source Graph, many many others that I'm that I'm not
Speaker 10: even mentioning, and we're starting to build an ecosystem around
Speaker 10: this area. Now, all that said, we also have partners
Speaker 10: in many other areas. We have partners in the financial space,
Speaker 10: we have partners in the biomedical and scientific research space.
Speaker 11: We work with.
Speaker 10: Companies in the legal and productivity space. So it's it's
Speaker 10: pretty broadly spread. But among those areas, I think Code
Speaker 10: has by far been, you know, growing the fastest.
Speaker 9: I'm curious about your each of your views on the
Speaker 9: administration and what we've seen thus far out of Washington
Speaker 9: and David Sachs he's crypto and AI zre Ollie, what
Speaker 9: does he mean for your business?
Speaker 4: I think it's great that.
Speaker 8: We have people that actually understand the tech that are
Speaker 8: in the government. I think it's early days, so you know,
Speaker 8: we're working together to figure out what's the best way
Speaker 8: to bring value to our customers.
Speaker 11: How are you working together? Are you in touch with them?
Speaker 8: Yeah, I mean we've we've uh, you know, we've given
Speaker 8: our feedback on you know, AI policy and other things
Speaker 8: and their requests of that. And I think the government's
Speaker 8: requested broadly from the industry.
Speaker 11: So we're excited. Daria, What about you. Are you in
Speaker 11: touch with the administration.
Speaker 10: Yeah, we're we're you know, we're in touch with this administration.
Speaker 10: Just like we've been in touch with the last administration
Speaker 10: as well. You know, the thing I like to say is,
Speaker 10: you know, you know, AI has big impact, big implications
Speaker 10: for society. So it's very important for anthropic to be
Speaker 10: about the policy and not about the politics. So we
Speaker 10: don't care which you know, you know, regardless of which
Speaker 10: administration is in office at the present time. We have
Speaker 10: a we have a set of things that we think
Speaker 10: it's it's good to do, you know, good to do
Speaker 10: in AI policy. And you know, we've told the same
Speaker 10: thing to the Trump administration that we've told to the
Speaker 10: Biden administration. We have folks that we've we've we've talked
Speaker 10: to in this administration just like the last administration, and
Speaker 10: we've delivered exactly the same message both times. We aim
Speaker 10: to be assistant, we aim to be non partisan and
Speaker 10: offer our view of how to make the industry go best.
Speaker 11: What is the US government's role? Well, what what should
Speaker 11: the US government's role be in your view?
Speaker 10: Yeah, So we laid this out in our RFI submitted
Speaker 10: to to the OSTP that I think that was a
Speaker 10: couple a couple of weeks ago. But you know, things
Speaker 10: that we've emphasized include I won't get the complete list here,
Speaker 10: but include export controls on chips to China, testing of
Speaker 10: models for national security risks such as bio or or
Speaker 10: or cyber risks. The government should have a role in
Speaker 10: provisioning as much as much energy as possible. The government
Speaker 10: should help to secure AI labs. We're very concerned about security.
Speaker 10: We talked a lot about security, you know, as part
Speaker 10: of this partnership. But another kind of security is you know,
Speaker 10: we're worried about our our models and our technology being stolen.
Speaker 10: So those are those are a few of the areas
Speaker 10: where I think the government can have a constructive role.
Speaker 3: Anthropic CEO Dario Amada and Data back CEO Ali Gotzi
Speaker 3: with our very owned tim Sthenomic and look, let's stick
Speaker 3: with global competition around AI models.
Speaker 4: It is top of mind for US.
Speaker 3: Tech companies because ever since deep Seat launch, the Chinese
Speaker 3: tech industry has been flooding the world with more AI models.
Speaker 3: Nu Mergs Peter Elstrom joins us for more and beta.
Speaker 3: It feels like every day there is yet a new
Speaker 3: update or a new release coming from deep Seak and
Speaker 3: so many others.
Speaker 4: Is that the cadence we're getting?
Speaker 12: Yeah, I think you're pretty much exactly right. It has
Speaker 12: been almost every day that we've been seeing these new
Speaker 12: AI services and models that have been introduced from Chinese companies.
Speaker 12: We count at least ten of them over the past
Speaker 12: two weeks, and those are really just the major companies.
Speaker 12: This is Baidu and Ali, Baba and ten Cent. At
Speaker 12: Anc Group also came out with some AI breakthroughs, and
Speaker 12: really what they're doing is they're putting a lot of
Speaker 12: pressure on the profit models that we're seeing in Silicon Valley,
Speaker 12: where they're providing open source AI services that people can
Speaker 12: use and modify and incorporate into their technology to be
Speaker 12: able to use all of the know how the AI
Speaker 12: models without paying some of the prices that you would
Speaker 12: have to pay if you went to more premium models
Speaker 12: like open AI, like Google in particular. So they're putting
Speaker 12: some downward pressure on those companies. In particular, they've been
Speaker 12: mostly focused on the China market so far, but they
Speaker 12: certainly have global ambitions and we'll see how far they
Speaker 12: take that.
Speaker 3: Ultimately, it feels as though this is a rerun of
Speaker 3: what if we've seen in plenty of industries. You think
Speaker 3: of China and evs, you think China of solar. They've
Speaker 3: driven down the costs.
Speaker 4: And the prices.
Speaker 3: But what does this mean. What's the implication through a
Speaker 3: US competitor.
Speaker 4: Is it a bad thing? Got to be good for customers?
Speaker 12: Yeah, those are very interesting parallels if you look at
Speaker 12: evs or you look at solar panels. Certainly there are
Speaker 12: some negative implications for other countries around the world. It's
Speaker 12: not exactly clear how this is going to play out though.
Speaker 12: At this point they are driving down profits in certain
Speaker 12: areas of the AI industry, but they're probably shifting the
Speaker 12: competition to other areas like execution. Who can actually build
Speaker 12: the services to connect some of that AI AI know
Speaker 12: how with the corporate needs for example, or consumer needs.
Speaker 12: And you're going to see a lot of innovation, certainly
Speaker 12: out of Silicon Valley and the companies that we were
Speaker 12: just talking about, and also out of China. Overall, it's
Speaker 12: probably good for the AI market. You get rapid commercialization
Speaker 12: of these services, you get lower prices, you get some
Speaker 12: robust competition, and that will probably lead to more innovation
Speaker 12: down the line.
Speaker 3: And certainly Apple CEO Tim Cook been going to that
Speaker 3: home of innovation of late at Hanzu Blomberg's Peter Elstrom,
Speaker 3: we thank you so much all things China.
Speaker 4: It's time now for talking tech.
Speaker 3: First up, Google's Gemini gets an upgrade. The company's released
Speaker 3: version two point five of its AI model that it
Speaker 3: says is capable of reasoning before responding and resulting in
Speaker 3: better performance and accuracy, and the latest model.
Speaker 4: Is available to use Google's Ai studio and Gemini app us.
Speaker 3: Open Ai is now making is simpler to edit images
Speaker 3: in chat ChiPT livestream. On Tuesday, the company showed how
Speaker 3: users could now refine images in CHATCHYBT with a series
Speaker 3: of conversations. Now, according to open Ai, the program will
Speaker 3: now also be able to better create diagrams in for
Speaker 3: graphics and logos for professional use. Meanwhile, Elon Musk's Grog
Speaker 3: is making political ways in India. The AI chatbot that
Speaker 3: must described as maximumly truth seeking, has made some controversial
Speaker 3: responses around Indian politics, including criticizing Prime Minister and Arrando
Speaker 3: Modi and praising opposition leader Rahul Gandhi. Groc's replies is
Speaker 3: said to have sparked a political firestorm within the Indian
Speaker 3: government as they take a look at making action against
Speaker 3: users who prompt for those responses, Let's just stick with
Speaker 3: Elon Musk because for the first time since the billionaire
Speaker 3: acquired X, where Grok is the social media platform is
Speaker 3: on pace to see advertising revenue grow. That's according to
Speaker 3: research firm e Marketer. Jasmin Embergs with US vice president
Speaker 3: and principal analysts for e Marketer, and you've brought us
Speaker 3: this research exclusively, Jasmine, where did the data come from?
Speaker 3: How you tracking this increase?
Speaker 13: But the data is from our proprietary forecast here at eMarketer,
Speaker 13: and we have a multi source methodology where we have
Speaker 13: a team of forecasters that regularly goes through a variety
Speaker 13: of different sources from third party research firms to interviews
Speaker 13: with advertisers and looks at broader macroeconomic and digital advertising
Speaker 13: trends to put together these forecasts.
Speaker 4: The drivers of growth there forward.
Speaker 3: Those advertisers that are returning, are they coming back with
Speaker 3: a feeling of joy and desire to spend or is
Speaker 3: there something else going on here?
Speaker 13: Look first, I would say that this is a recovery,
Speaker 13: not a rebound. Even with the growth that we are projecting,
Speaker 13: X's ad business in twenty twenty five is still going
Speaker 13: to be smaller than Twitter's ad business was back in
Speaker 13: twenty nineteen, and to your question, some of this growth
Speaker 13: is actually being driven by fear. There are plenty of
Speaker 13: advertisers out there now who see spending on xcess kind
Speaker 13: of a cost of doing business in order to mitigate
Speaker 13: any potential legal or financial repercussions. The problem, of course,
Speaker 13: is that fear is not a sustainable motivator. Luckily, for
Speaker 13: x it's not just fear that's driving this growth. It
Speaker 13: has also been able to secure a new base of advertisers,
Speaker 13: including small and medium sized businesses, which is something that
Speaker 13: Twitter historically struggled with. The problem there is that these
Speaker 13: advertisers have less money to spend, and so while they're
Speaker 13: helping to prop up the growth, we're still not seeing
Speaker 13: spending levels reach the same heights as they were prior
Speaker 13: to musks takeover.
Speaker 4: Okay, so take us back to you.
Speaker 3: Put the two and a quarter billion dollars basically expected
Speaker 3: for twenty twenty five, what is that versus pre forty
Speaker 3: billion dollar acquisition by Elon and where does it go
Speaker 3: from there?
Speaker 13: So it's smaller than it was in twenty nineteen, And
Speaker 13: of course Twitter saw very strong growth like other social
Speaker 13: ad businesses during the pandemic, which means that pretty much
Speaker 13: all of that growth that it gained is lost.
Speaker 4: We're still expecting.
Speaker 13: The ad business to continue growing in twenty twenty six
Speaker 13: and twenty twenty seven, which is the end of our forecast,
Speaker 13: but of course we have less visibility into those years
Speaker 13: because the situation is still incredibly volatile. There's still a
Speaker 13: lot of concerns about brand safety among advertisers, and as
Speaker 13: those attitudes continue to evolve, we could see shifts in spending.
Speaker 13: Of course, there's also the economic uncertainty that's impacting advertising budgets,
Speaker 13: as well as the uncertainty at TikTok, so there's a
Speaker 13: lot of different moving parts that could change how advertisers
Speaker 13: spend their budgets.
Speaker 3: When you talk of the advertisers who are coming back,
Speaker 3: whether it's through feral or a desire to access new products,
Speaker 3: have the main ones that took on air on comeback
Speaker 3: as Disney comeback, for example.
Speaker 13: We don't have an exact list of all of the
Speaker 13: advertisers that have returned. What we do know is that
Speaker 13: many of the big tech advertisers have returned. There was
Speaker 13: also reports that Apple, for example, which was once a
Speaker 13: target of musks has returned, but there's plenty of evidence
Speaker 13: to show that many of these companies are returning to spend,
Speaker 13: though again not at the same levels as previously.
Speaker 3: I like how you brought in TikTok there as well.
Speaker 3: We're all waiting as to what April the fifth really brings.
Speaker 4: But would X benefit.
Speaker 3: From TikTok being taken off the scene. It feels like
Speaker 3: it's always a Meta driver rather than an X driver.
Speaker 13: So the biggest beneficiaries of TikTok disappearing would be Meta
Speaker 13: and YouTube. Because of Instagram reels and YouTube shorts, there
Speaker 13: are obviously the most natural fits for users, for creators,
Speaker 13: and for advertisers. In January, we actually released an analysis
Speaker 13: that showed that about fifty percent of reallocated TikTok AD
Speaker 13: dollars in the US would go to Meta and YouTube.
Speaker 13: There would be you know, other spending two other platforms,
Speaker 13: potentially also X, but mostly to other social platforms like Snapchat,
Speaker 13: perhaps even Pinterest. We saw some of that during TikTok's
Speaker 13: brief shutdown, as well as other players competitors to TikTok
Speaker 13: and other industries thinking about retail media like Amazon or
Speaker 13: even streaming services because TikTok touches so many aspects of
Speaker 13: our digital lives.
Speaker 3: Very briefly, we've only got about thirty seconds. The competitors
Speaker 3: to X, are they thriving or not?
Speaker 13: Well, what's been really interesting to see is there's been
Speaker 13: a resurgence now as well in growth in some of
Speaker 13: these competitors. We saw after the election, of course that
Speaker 13: Threads and Blue Sky saw many new users coming onto
Speaker 13: the platform, and that seems to be sticking. But even
Speaker 13: as X has lost users, both of those platforms remain
Speaker 13: significantly smaller.
Speaker 3: A's Menemberg. Great to have you back, e Marketer. We
Speaker 3: appreciate it. Welcome back to Blue Meg Technology. I'm Karen
Speaker 3: Hid and New York.
Speaker 4: Go quick check on these markets.
Speaker 3: Because of a few days of stability, we're coming back off.
Speaker 3: Maybe we're selling some of the moves that we've seen
Speaker 3: in the last couple of days when we're taking a
Speaker 3: few profits after Monday's stellar charge higher of more than
Speaker 3: two percent on this particular benchmark, and we sustained growth yesterday,
Speaker 3: but we're now a five percentage point and really it's
Speaker 3: a magnificent seven that tuguslower. We're off by eight point well,
Speaker 3: got that's one point eight percent. Let's call it on
Speaker 3: this particular index, and really it's the likes of in
Speaker 3: video which are off by a significant amount.
Speaker 4: So to is Tesla. Take a look at what that
Speaker 4: particular name is doing. We know it's volatile.
Speaker 3: We know that the bulls like Kathy would remain in
Speaker 3: this name, but we're currently off by almost four percent.
Speaker 3: Had a dramatically good day on Monday, pushing up more
Speaker 3: than nine ten percent. However, we did then get the
Speaker 3: byd strength. We also got the worries about European sales
Speaker 3: and we see some of that come off on Tesla.
Speaker 3: Rivian off by three tens and percent. There's some interesting
Speaker 3: news there of a spinoff when it comes to smaller
Speaker 3: mobility forms of transport. Let's get to that work with
Speaker 3: Bloomberg's David Welch and I just want to go to
Speaker 3: the news on Rivian in particular. We understand that they're
Speaker 3: spinning off what's going to be called Also they're investing
Speaker 3: up to one hundred million dollars coming from another player,
Speaker 3: Evolve as well. This is about small mobility. Where is
Speaker 3: there a gap in the markets that David.
Speaker 14: You know that there's a market for smaller urban type
Speaker 14: vehicles that you don't need to go as far on
Speaker 14: a charge as the bigger vehicles Rivian sells. I think
Speaker 14: one of the issues Rivin has is right now they're
Speaker 14: selling expensive pickup trucks and SUVs that happen to be electric,
Speaker 14: and people like them. They're sort of a unique style
Speaker 14: compared to what Tesla has and compared to what Ford
Speaker 14: and General Motors sell for electric pickup trucks. But they're
Speaker 14: still very pricey for what they are at the end
Speaker 14: of the day, and it's tough for them to get
Speaker 14: scale and really drive their costs down just selling those vehicles.
Speaker 14: And they've got other models coming they would have more
Speaker 14: mass appeal. But I think with something like this, you know,
Speaker 14: the industrial logic behind it would be you're selling more
Speaker 14: vehicles and getting your battery costs down, which ultimately is
Speaker 14: how any of these EV companies are going to get
Speaker 14: into profitability. They've got to get those costs down, and
Speaker 14: you can't do it on fifty thousand trucks an issue
Speaker 14: easy year.
Speaker 3: They call it Microme Mobility Company for also, and I
Speaker 3: correct myself that it's Rivian and a VC firm Eclipse,
Speaker 3: who are going to be helping finance all of this.
Speaker 4: I mean, this.
Speaker 3: Comes at a time where the competition does seem pretty fierce,
Speaker 3: even though that Chinese competition can't make its way into
Speaker 3: the United States. Globally, all eyes on EV, all eyes
Speaker 3: are more efficient and cheaper models. David compare what's happening
Speaker 3: with Tesla at the moment. Just why the pressure continuing
Speaker 3: on the start?
Speaker 14: Yeah, Tesa's It's really an interesting case here. I get
Speaker 14: asked this all the time. Is that the political pressure
Speaker 14: because of Euon's stance and is his closeness to Donald Trump?
Speaker 14: And I think that's probably true on the margin, maybe
Speaker 14: more than that. There's really not data that tells us
Speaker 14: how much of that is true. But EV sales were
Speaker 14: flattening out even before Eon became essentially part of the
Speaker 14: Trump administration. So they were already losing growth rates as
Speaker 14: a company. And a lot of that is petition from China. Bui,
Speaker 14: d we Auto, of those players over there. They have
Speaker 14: very good products, they're coming on strong. It's tougher for
Speaker 14: foreign companies operating in China to get the sales they want.
Speaker 14: That includes Tesla. I think there is political pressure in
Speaker 14: Europe that's causing Tesla to loose some sales. And Dan,
Speaker 14: don't forget they're changing over the model Y, which means
Speaker 14: they've got production down. That always cuts sales for any
Speaker 14: car company. I think that's also a big piece of it.
Speaker 14: And then the thing you just mentioned competition. You know,
Speaker 14: in Europe you've got all the European automakers adding more
Speaker 14: evs and coming on pretty strong. In the US, you've
Speaker 14: got Hondai Kia selling a lot of new product. General
Speaker 14: Motors is bringing out a lot of new EV's and
Speaker 14: they're ramping up production right now. So there's competition here
Speaker 14: that wasn't here two or three years ago that Tesla
Speaker 14: has to deal with. And by the way, you know
Speaker 14: the model hy is being changed over. But this is
Speaker 14: a this is a product line that's pretty stale with
Speaker 14: the exception of cyber Truck, and cyber Truck is too
Speaker 14: quirky to sell in really big numbers.
Speaker 3: Suddenly, as David Wells, thanks so much for joining us. Meanwhile,
Speaker 3: let's just go to another key stock you cook. Coop
Speaker 3: and I on game Stop is having a stellar day.
Speaker 3: It's up the most since June of last year. That's
Speaker 3: as bitcoin is interestingly off by one undre quarter percent
Speaker 3: eighty six thousand. But these two stories are linked. Game
Speaker 3: Stop is up more than fifteen percent because they announced
Speaker 3: after their earnings yesterday that they are indeed going to
Speaker 3: move forward with having bitcoin on their own balance sheet,
Speaker 3: and another company that's doing it or following Michael Saylor
Speaker 3: of course with strategy, but many others have done it.
Speaker 3: Block for example, think of the way in which they
Speaker 3: saw crypto on their balance sheet. Bitcoin currently off by
Speaker 3: one and quarter percent, so GameStop and not enough to
Speaker 3: drive it higher. But this comes in the context of
Speaker 3: a major crypto summit that's underway in DC at the moment,
Speaker 3: and legislation regarding digital assets is of course making its
Speaker 3: way through Congress. Joining US now is Blockchain Association CEO
Speaker 3: Kristin Smith.
Speaker 4: I just want to start on.
Speaker 3: The idea of more companies storing bitcoin or other crypto on.
Speaker 4: The balance sheet.
Speaker 3: Is that because the moon music is changing? Is that
Speaker 3: because regulation is fine creeping through?
Speaker 7: Yeah?
Speaker 15: And I think we've had such progress in Washington, Caroline
Speaker 15: that I think it's pretty clear across institutions, across traditional companies,
Speaker 15: across those who are managing treasuries of large organizations, that
Speaker 15: digital assets are something they should be thinking about. I
Speaker 15: was down in up in New York last week at
Speaker 15: the Digital Assets Summit, and the amount of enthusiasm and
Speaker 15: excitement amongst the trade FI and institutional investors was was
Speaker 15: really great. And I think that's extending to companies as well.
Speaker 15: So I think it's smart. I think something a lot
Speaker 15: of companies are looking at, and I think we're going
Speaker 15: to see more announcements like this going forward.
Speaker 3: It's smart because game Stop gets a pop in its
Speaker 3: stock when actually it's revenues are down twenty eight percent
Speaker 3: year on year.
Speaker 4: There may be to sort of harness what feels.
Speaker 3: Like a feel good effect that retail likes to trade off.
Speaker 4: So tell us actually fundamentally.
Speaker 3: How this sort of helps businesses and how you see
Speaker 3: regulation in particular supporting crypto right now.
Speaker 15: Yeah, Well, I think the regulatory clarity is key. This
Speaker 15: is something that the industry has been talking about for
Speaker 15: many years. Now we're seeing a lot of progress. We've
Speaker 15: seen a lot of actions taken to undo the damaging
Speaker 15: policies that were put in place when Gary Gunsler was
Speaker 15: the head of the SEC, and we're seeing Congress do
Speaker 15: a lot of work to establish and put the legislation
Speaker 15: in place that we need. It seems like every week
Speaker 15: here in Washington we have another vote on crypto. You know,
Speaker 15: two weeks ago we had the Senate Banking Committee, which
Speaker 15: very rarely holds markups, had a vote on stable coin legislation.
Speaker 15: We're expecting a House committee to do the same on
Speaker 15: the counterpart legislation next week. We also have the final
Speaker 15: vote to undo the tax policy that President Biden put
Speaker 15: out at the very very last days of his term.
Speaker 15: Is going to be repealed by Congress this week. So
Speaker 15: we're seeing steps. There's a lot of momentum. There's still
Speaker 15: a lot of work to do, but I think, you know,
Speaker 15: we've got the White House, we've got the leaders in
Speaker 15: the House and the Senate are all communicating, they're all
Speaker 15: talking together, and they all want to get this done.
Speaker 15: And I think it's a cornerstone of sort of the
Speaker 15: administration in Congress's priorities for making the US more competitive,
Speaker 15: more innovative, and more modern. And so I think that does,
Speaker 15: going back to your original question, give companies some comfort
Speaker 15: that they can look at at these assets as something
Speaker 15: that will be more stable, that will be welcome, and
Speaker 15: something that they need to be thinking about going forward.
Speaker 3: Whil's not being tackled you'd like to see tackled from
Speaker 3: a regulatory perspective, Kristin, You know.
Speaker 15: It's interesting they're really covering the list. I think it's
Speaker 15: two steps. Like I was saying, the first step is
Speaker 15: undoing the policies of the past. We've seen the SEC
Speaker 15: dismiss litigation across the board in the industry. We're seeing
Speaker 15: Congress fix this IRS rule that was enacted late in
Speaker 15: the administration. And we're seeing agencies like the occ UNDO
Speaker 15: some of the letters and interpretive guidance that they had
Speaker 15: put in place over the past four years. It made
Speaker 15: it very difficult for crypto to integrate with the banking world.
Speaker 15: And then, you know, in terms of what we need
Speaker 15: to get done, we need a stable coin framework, we
Speaker 15: need a market structure framework. But I think there's also
Speaker 15: a lot of interesting things going on with tokenization. The
Speaker 15: SEC just announced yesterday they're doing a series of round
Speaker 15: tables on various topics and are trying to figure out
Speaker 15: what they have within the existing authority that they have
Speaker 15: that they can do to help make this space more competitive.
Speaker 4: So, you know, we're.
Speaker 15: Really excited about it.
Speaker 4: It's a lot of work to do.
Speaker 15: I think everyone in the crypto policy space feels like
Speaker 15: they're ready for a vacation. But we're not gonna let
Speaker 15: down now. We've got a lot of work to get
Speaker 15: done and potentially a short time to do it. But
Speaker 15: I think once in place, it will be lasting and
Speaker 15: it's something that will allow the US to be competitive
Speaker 15: for decades to come.
Speaker 3: Briefly, Kristen, is enough thing done to sort of get
Speaker 3: rid of the tonishing effect that KRYPTI sometimes have the
Speaker 3: idea that David Sachs, for example, has done a lot
Speaker 3: to make explicit. He's sold down his assets, his exposure
Speaker 3: to all these things. But when you've got well, ultimately
Speaker 3: game stops like a mean name getting in on bitcoin.
Speaker 4: And then you have some sense, and I don't know it's.
Speaker 3: Not factual, but there's a sense from those out there
Speaker 3: that many ways people are benefiting from crypto doing well
Speaker 3: over in the administration.
Speaker 4: Is enough being done to tackle that?
Speaker 15: Yeah, you know, I think that's an interesting question. I think,
Speaker 15: you know, David Sachs took a steps that were absolutely
Speaker 15: appropriate for him to do by selling off his positions
Speaker 15: and funds and various investments I think that is a
Speaker 15: smart thing to do, you know. I do think there
Speaker 15: are a lot of folks within the Trump family that
Speaker 15: are obviously very interested in this space. But I think
Speaker 15: the important thing though, this is really important work that
Speaker 15: we need to get done and get across the finish line.
Speaker 15: And I think there are a lot of different policy
Speaker 15: makers across the agencies, Congress and others that are really
Speaker 15: committed to doing this and that this is something that
Speaker 15: should benefit everyone who wants to participate in this ecosystem,
Speaker 15: including corporations and trad FI and institutional investors, et cetera.
Speaker 15: So I think this is a space that's only going
Speaker 15: to grow over time and that we'll see more innovation
Speaker 15: that is built on top of these blockchain networks.
Speaker 4: Christmas Smith. Always great to have you on the show.
Speaker 3: Thank you, Blockchain Association CEO, you are coming up more
Speaker 3: and trad five meets Fintech. Mercury hits a three and
Speaker 3: a half billion dollar valuation after raising three hundred million
Speaker 3: dollars in its latest round. Will be speaking with the
Speaker 3: CEO in Madaconlex. This is Blomberg Technology. Fintech firm Mercury
Speaker 3: has just announced a Series C funding of three hundred
Speaker 3: million dollars. It's been led by Sequoia Capital and the
Speaker 3: latest round helping push the company's evaluation and a half
Speaker 3: billion dollars.
Speaker 4: Here to discuss is imad Achun.
Speaker 3: Mercury CEO, And well, what the money is for? Therefore, Iman,
Speaker 3: I understand there's new products coming along.
Speaker 16: Yeah, we've actually been profitable for the last ten quarters.
Speaker 16: We did five hundred million revenue last year, so we're
Speaker 16: really seeing this money is kind of helping us invest
Speaker 16: in new products, but also giving us a cushion kind
Speaker 16: of we could do for future acquisitions and things like that.
Speaker 16: Last year we launched a bunch of new products, including invoicing, Accounts, Payable,
Speaker 16: and Mercury Personal. So we're expanding from serving just businesses
Speaker 16: to consumers as well.
Speaker 4: You've got to go there, M and A.
Speaker 3: Where would you want to do inorganic as well as
Speaker 3: organic growth?
Speaker 2: Then yeah, we'll see.
Speaker 16: We made an acquisition last year in the accounting space,
Speaker 16: but yeah, you know, we haven't we haven't announced anything else.
Speaker 16: But the interesting thing about banking is there's a lot
Speaker 16: of places to expand, both in terms of types of customers.
Speaker 16: So we kind of expanded in the last few years
Speaker 16: from startups to e commerce and professional services as well
Speaker 16: as well as kind of these new products that we
Speaker 16: can build on top of it. We really want to
Speaker 16: reimagine banking, so it's not just kind of, you know,
Speaker 16: a dumb account that doesn't do anything. We really wanted
Speaker 16: to help biber people's finances and help them run their
Speaker 16: company in the easiest way possible.
Speaker 3: Reported that Sequoia Capital was particularly impressed by the way
Speaker 3: you hand handled the influx of demand coming after the
Speaker 3: collapse of SVB, and certainly Mercury and Brex were everywhere.
Speaker 4: We were talking that.
Speaker 3: Amount of client deposits that came in. How much have
Speaker 3: you retained? How have you managed to build from that moment?
Speaker 16: Yeah, yeah, we had two billion and basically that one
Speaker 16: week time period, we retained ninety five percent of them
Speaker 16: six months later, and we've grown significantly since then. So
Speaker 16: just last year we grew transaction volume by sixty four percent.
Speaker 16: Where you know, our scale is much much bigger than
Speaker 16: even two years ago when that SBB failure I happen.
Speaker 3: You're not technically a bank, so how are you thinking
Speaker 3: about broadening out? You of course have relationships with underlying
Speaker 3: banks that give you the ability to help with these products.
Speaker 3: We also think of building software ultimately, what do you
Speaker 3: want to be thought of? How are we going to
Speaker 3: say this is what mercury is in five years time.
Speaker 16: Yeah, we kind of think about like reimagining banking. So
Speaker 16: you know, one of the benefits of working with kind
Speaker 16: of partner banks is we actually work with a sweet
Speaker 16: network underneath the hood. So we provide everyone five million
Speaker 16: in FDIC insurance, so the vast majority of the deposits
Speaker 16: we have actually FDIC insured. And we work with kind
Speaker 16: of two main partner banks right now, Choice Financial and
Speaker 16: Column Bank. And you know, we kind of think like
Speaker 16: if there was a software company that built great software
Speaker 16: for banking, what would it be. And that's the whey
Speaker 16: we think about like kind of broadening out the suite
Speaker 16: and really want to redefine banking or a banking shouldn't
Speaker 16: just be a bank account. It should be a lot more.
Speaker 16: And I think in ten years it will be weird
Speaker 16: to do invoices not from a bank account. It will
Speaker 16: be weird to kind of have spend management and corporate
Speaker 16: card that's not part of your banking.
Speaker 3: You're using funds I understand to help give liquidity to
Speaker 3: your talent, your workforce, or doing a tender offer. But
Speaker 3: many will be thinking where's the next step? The exit?
Speaker 3: In many ways, what in ten years time will merchur
Speaker 3: we be publicly listed, Will you have been bought by someone?
Speaker 4: Will you bought others?
Speaker 16: Yeah, you know, I don't think of this as like
Speaker 16: a thing I want to exit. I want to run
Speaker 16: this company for the next twenty years. There's a lot
Speaker 16: we can do and we will do. I think being
Speaker 16: public along the way is part of the journey. So yeah,
Speaker 16: there's nothing in minute. We only actually launched six ish
Speaker 16: years ago, so I still think of us as as
Speaker 16: a pretty young company. But yeah, it's important for employees
Speaker 16: to have access to some liquidity rather than you know,
Speaker 16: waiting another ten years or whatever it is till we
Speaker 16: go public. So we wanted to provide that as an option.
Speaker 16: I'm sure lots of them want to, you know, buy
Speaker 16: houses or do nice things for themselves. And yeah, I
Speaker 16: think as we're profitable, it makes sense to make that
Speaker 16: available to our employees.
Speaker 3: In mad it's great speaking with you and Mada Alphen
Speaker 3: come back, Mercury CEO.
Speaker 4: Congrats on the rays.
Speaker 3: Meanwhile, scientists, they are laying the foundation for a field
Speaker 3: that may blur the lines between the biological and the synthetic.
Speaker 4: It's called biocomputing.
Speaker 3: Human neurons emerge the chips with startups building sci fi
Speaker 3: alternatives to traditional hardware. Could the living human brain cells
Speaker 3: end up actually powering AI? Primer It's the latest bluem
Speaker 3: meg original series takes a deep dive into this. This
Speaker 3: is a simulation of Pong, the iconic nineteen seventies arcade game,
Speaker 3: where you use this paddle to stop this ball from
Speaker 3: getting past you.
Speaker 4: It's a pretty simple game for US humans.
Speaker 3: To learn, and as well, quite recently, with advancements in AI,
Speaker 3: computers can learn it too.
Speaker 4: But today Pong.
Speaker 3: Has a new kind of player, not a computer human.
Speaker 3: A cluster of living human brain cells on top of
Speaker 3: a silicon chip can play pomp yep.
Speaker 4: Researchers in a.
Speaker 3: Lab taught a tiny clump of neurons too, in a sense,
Speaker 3: play this video game, but it's more than just a game.
Speaker 3: Some believe merging biology with computing could upend our approach
Speaker 3: to artificial intelligence.
Speaker 4: AI is a massive, often.
Speaker 3: Volatile, global market, with people looking all over for a
Speaker 3: competitive edge. In twenty twenty five, private sector companies teamed
Speaker 3: up to invest more than five hundred billion dollars in
Speaker 3: AI infrastructure alone. But what if the building blocks of
Speaker 3: that infrastructure include living human brain cells with the promises
Speaker 3: and challenges of our own biology.
Speaker 4: Sounds like sci fi, right, Well, we're kind of on
Speaker 4: our way.
Speaker 16: Science fiction talked about this.
Speaker 15: I love thinking about the Hollywood stuff, like are we
Speaker 15: really computers?
Speaker 2: Our computers really human?
Speaker 5: My life has been focused on how can you elictit
Speaker 5: intelligence from brain cells in a dish?
Speaker 3: Tune in tomorrow for the second episode of Primer on
Speaker 3: Bloomberg TV at six pm Eastern. US officials they're not
Speaker 3: permitted to use a messaging app Signal to share sensitive
Speaker 3: information yet today The Atlantic has released the near complete
Speaker 3: transcript of a Signal chat where top US officials discuss
Speaker 3: military plans. Let's bring in Bloomberg's Mike Shepherd for the
Speaker 3: technology angle of all of this, But before we get
Speaker 3: into Signal and its intricacies, the broader context here is
Speaker 3: that we're getting more and more information. What exactly was
Speaker 3: said in this conversation.
Speaker 6: Well, that's right, Kerain. This is an episode that is
Speaker 6: not going away. Much to the Trump administration's chagrin. They
Speaker 6: are seeing this really carry on through days, and in
Speaker 6: many ways it is a jaw dropping blunder of operational security,
Speaker 6: according to experts and many lawmakers on Capitol Hill who
Speaker 6: heard from and really pushed hard back at the top
Speaker 6: intelligence officials in the US government who were appearing before
Speaker 6: them for a hearing. And the question is why were
Speaker 6: these officials using this app to discuss something so sensitive?
Speaker 6: And we can see now from the full Atlantic transcript
Speaker 6: that yes, this was sensitive and potentially classified information about
Speaker 6: the details of strikes that would be to that were
Speaker 6: to be waged against Houthi rebels in Yemen. And this
Speaker 6: raises all sorts of questions about operational hygiene and security
Speaker 6: hygiene that are being put forth by senators, including the
Speaker 6: top Democrat on the Intelligence Committee.
Speaker 4: Mark Warner, in that hearing.
Speaker 3: As you say that many intelligence people and experts were attending,
Speaker 3: might just go back to signal though, because this all
Speaker 3: came to light because the wrong person was c seed
Speaker 3: in the chat and not being Jeffrey Goldberg over at
Speaker 3: the Atlantic. But why would it not be appropriate to
Speaker 3: be used in this sensitive manner? What's the worst that
Speaker 3: can happen?
Speaker 6: Well, actually, we're getting an example of the worst that
Speaker 6: could happen. Let's say it wasn't Jeffrey Goldberg of The Atlantic,
Speaker 6: the editor in chief, a Washington veteran, someone who is
Speaker 6: widely known across town and who I worked with many
Speaker 6: many years ago. Let's say, for instance, it was instead
Speaker 6: somebody from the hoothy side who saw those war plans
Speaker 6: and could alert the rebels about what might be coming.
Speaker 6: It could also be another US adversary that had a
Speaker 6: window into operational planning or other sensitive information. If they're
Speaker 6: using signal for this, what else are they using it for?
Speaker 6: And that is what we also don't know.
Speaker 4: Now there's a.
Speaker 6: Reason why, beyond just adding the wrong person to the chat,
Speaker 6: which I guess maybe we're all guilty of doing at
Speaker 6: one time or another in our own lives. There is
Speaker 6: the risk that your phone could be infected with spyware,
Speaker 6: somehow compromise in another fashion that would allow observation of
Speaker 6: message traffic and other information. And this is why the
Speaker 6: Defense Department and other US intelligence agencies require sensitive conversations
Speaker 6: to be carried internally on secured networks and in secured spaces.
Speaker 3: Mike Shepherd. The story continues to Unfold. Thanks of bringing
Speaker 3: it to us. Meanwhile, that does it for this edition
Speaker 3: of bloom Bag Technology. You do not want to forget
Speaker 3: to check out our podcast. Can find it on the
Speaker 3: terminal as well as online.
Speaker 4: On Apple, Spotify, and iHeart This is bloom Meg Technology.