Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
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Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed lud Love.
Speaker 3: Live from New York.
Speaker 4: This is Bloomberg Technology coming up. Tech charges higher as
Speaker 4: the NASDAC is sept for its best week of the year.
Speaker 4: We dig into the AI drivers as even as Adobe.
Speaker 4: This is the mark a mutant forecast on AI growth,
Speaker 4: overshadowing better than expected third quarter results. And Uber it
Speaker 4: powers ahead as it expands its partnership with Weimo, bringing
Speaker 4: autonomous right hailing to Austin and Atlanta. But let's look
Speaker 4: into what's happening with Uber because we are driving higher
Speaker 4: the putt four point nine percent. This is all surrounding,
Speaker 4: of course, a deal that it's making with Waymo.
Speaker 3: It really wants the owning autonomous driving.
Speaker 4: Let's dig into that news that it will basically be
Speaker 4: the only app offering driverless rides in waymow cars in
Speaker 4: Austin and Atlanta.
Speaker 3: So good news for this stock. Natalie Lung is with us.
Speaker 4: To break it all down, and Natalie overall, I am
Speaker 4: wandering more broadly about well what Uber.
Speaker 3: Is seeing here.
Speaker 4: Is it the challenge coming from robo taxes, challenge coming
Speaker 4: from Tesla, or is it something else that drives us?
Speaker 5: He couldn't be a combination of all these things. And
Speaker 5: Uber wants to make early innings into being the platform
Speaker 5: that people go to, that regular people go to to
Speaker 5: get these consumer that get these driverless rides. So that's
Speaker 5: why they're making partnerships with Weimo, as with Cruise as
Speaker 5: well as byd for ride experiences outside the US. And
Speaker 5: it wants to be that so called indispensable partner to
Speaker 5: all these manufacturers who are looking to put their driverers
Speaker 5: cars to use.
Speaker 4: It's going to bring on board all electric Jaguar Ipace
Speaker 4: vehicles the way mo offering how quickly am I going
Speaker 4: to be able to get in one at the moment?
Speaker 4: Where which cities? How fast will this expand?
Speaker 6: Right?
Speaker 5: So, Uber and Waimo currently has a collaboration in Phoenix,
Speaker 5: so that's happening there now, but starting early next year,
Speaker 5: Uber will be offering those way more rides exclusively in
Speaker 5: Austin and Atlanta.
Speaker 3: It really is a good day for the Uber stock.
Speaker 4: We're popping first days since August the eighth, but up
Speaker 4: almost five percent. Natalie Lung breaks down, we appreciate it
Speaker 4: so much. Meanwhile, Adobe ches doing the opposite, whipsawing to
Speaker 4: the lower side today after the company reported earnings yesterday,
Speaker 4: after the bell outlook really failed to quell investor impatience
Speaker 4: for new AI tools to start generating cash. Bradie Ford
Speaker 4: pointed us toward it yesterday and is here with the
Speaker 4: results today, and it does seem to be the digital media.
Speaker 3: Side that is letting the side down.
Speaker 2: Yeah, Well, here's the big question for these software companies
Speaker 2: that were the big winners over the last decade. Is
Speaker 2: AI a meaningful new product that will unlock new revenue?
Speaker 2: Are Is it just kind of like a cool feature
Speaker 2: that you add in and it's a nice to have,
Speaker 2: but it doesn't really move the needle. And that's the
Speaker 2: question that investors been batting back and forth with Adobe.
Speaker 2: And what we saw last night is just that that
Speaker 2: incremental revenue they were hoping to see from new AI
Speaker 2: products at least isn't materializing yet. We have executives talking
Speaker 2: about we are optimizing for use and adoption rather than
Speaker 2: really driving monetization on these products.
Speaker 7: Yet.
Speaker 4: Yeah, what did Chantanu have to say, to quell investors
Speaker 4: nerves because this is a heavy sell off in the stock.
Speaker 3: But they seem to be.
Speaker 4: Trying to show that, yes, they're driving profitability, they're driving
Speaker 4: forward in terms of their offerings, but not really speaking
Speaker 4: to this weakness.
Speaker 1: Yeah.
Speaker 2: Their defense, as I read it, and it was a
Speaker 2: bit of a subtle one, is that AI is still
Speaker 2: a value ad because it keeps folks from going to
Speaker 2: our competitors and it allows us to increase prices. Right,
Speaker 2: so it's not that I'm paying an additional ten dollars
Speaker 2: for the new AI tools, but it's that, well, I'm
Speaker 2: not going to go install Canva, and if you raise
Speaker 2: my prices ten percent, I'm not going to cancel, and
Speaker 2: I'm not going to fight you either. And so they
Speaker 2: said that it's it's kind of an indirect monetization story
Speaker 2: at this point, with more direct monetization to come in
Speaker 2: the future.
Speaker 4: What levers, therefore, can they pull to monetize in the future.
Speaker 2: In the future, the idea would be that you know
Speaker 2: generation saying photoshop, click here, make a picture of a
Speaker 2: dog doing a backflip. Every time you do that, you
Speaker 2: have let's say a thousand credit standard for generations you
Speaker 2: go above that, you start getting charged. That's one method.
Speaker 2: In more resource intensive models such as video, which they're
Speaker 2: working on, they said that could be a whole different
Speaker 2: monetization mechanism, in part because the compute would probably be
Speaker 2: so much higher. So general credit packs, consumption and additional
Speaker 2: productiers would be the general way folks would expect. And
Speaker 2: they've spoken about.
Speaker 4: One area of focus that we have for Adobe going
Speaker 4: forward has been the investment that they're having to make
Speaker 4: as well. The partnerships are striking where they're trying. You
Speaker 4: were on yesterday just talking through how these businesses are
Speaker 4: trying to delve into the three D modeling side of things.
Speaker 4: How expensive is the artificial intelligence offering for them.
Speaker 2: The beauty of being a giant company like Adobe. Some
Speaker 2: folks have told me that Adobe Suite of Creative Tools
Speaker 2: is one of the most profitable products ever and so
Speaker 2: they have a bit of a mountain of cash and
Speaker 2: so they're definitely able to train these things and throw
Speaker 2: some money around without it being too diluted at this point.
Speaker 2: So it's a big expense, especially for the startups. We
Speaker 2: hear about it being a you know, it can be
Speaker 2: even inhibiting factor. Adobe has really tried to message that, look,
Speaker 2: we have a diversified business. We are willing to pull
Speaker 2: some cash over here and put it over here to
Speaker 2: make sure we're able to keep on doing this and
Speaker 2: keep getting adoption. And they generally think that they're best
Speaker 2: set by centralizing users on Adobe and keeping them there
Speaker 2: by keeping AI accessible for a little longer before jacking
Speaker 2: up the prices.
Speaker 4: Ready, Ford, we thank you, thank you. Let's talk aviation
Speaker 4: tech right now. Boeing factory workers walked off the job
Speaker 4: for the first time in sixteen years today, halting manufacturing
Speaker 4: across the plane maker's Seattle hub. This after members of
Speaker 4: its largest union voted overwhelmingly to reject a contract offer
Speaker 4: angle on strike. While both parties have expressed a desire
Speaker 4: to get back to the bargaining table to move ads
Speaker 4: to the strain on Boeing, let's just stick with the
Speaker 4: airline industry now, because United Airlines has announced a deal
Speaker 4: with Starlink. The airline is set to offer in flight
Speaker 4: Wi Fi through SpaceX's Internet service for free. Winimberg's Nongrasch
Speaker 4: joins us now, Wow, no more five dollars ninety nine
Speaker 4: minimum spends when if you get on the plane. What
Speaker 4: does it say about Starlink's reliability in the air right.
Speaker 8: I think a lot of people were wondering when, you know,
Speaker 8: they would strike a big deal with one of the
Speaker 8: major airlines, and I think what it's showing is that
Speaker 8: all right. You know, there were some questions about whether
Speaker 8: or not it could handle the capacity earlier, but now
Speaker 8: I think at least one of these airlines says all right,
Speaker 8: I think they're ready to handle our fleet of vehicles.
Speaker 4: When you say one of these airlines one of the
Speaker 4: big carriers in the US, they've already got to deal
Speaker 4: with Hawaiian airlines, right, They've.
Speaker 8: Got JSX, which is a smaller airline you know, predominantly
Speaker 8: based out of Texas. But yes, this is one of
Speaker 8: the big four, if you will. And so now they
Speaker 8: finally have I think the bragging rights that they need
Speaker 8: to say, all right, we are here for the big time,
Speaker 8: the big players.
Speaker 3: Just look at this deal.
Speaker 4: Scott Kirby really talking about how you're gonna be able
Speaker 4: to just walk straight on the plane from the lounge.
Speaker 4: Everything will be seamless. Ultimately you'll be connected devices. Also,
Speaker 4: what you're going to be using on the aircraft itself.
Speaker 4: What in terms of market shared. Do analysts think that
Speaker 4: they're able to get his Scott Kirby the first guy
Speaker 4: to go and everyone else follows.
Speaker 3: I think so.
Speaker 8: I think a lot of people think this might be like.
Speaker 3: A watershed moment for them, you.
Speaker 8: Know, because it's a big advertising get right. They can say,
Speaker 8: all right, here we have one of the major players.
Speaker 8: When are the other ones going to follow suit? And
Speaker 8: so that's I think really the big get for them.
Speaker 4: The technology is what we love to hear from you
Speaker 4: and ultimately, how hard is this? We all understand how
Speaker 4: glitchy the airline Wi Fi is at the moment, why
Speaker 4: is that?
Speaker 3: What does starting offer?
Speaker 8: Well, one of the big advantages that starlink has over
Speaker 8: its competitors for other Internet satellites is that they're closer. Right,
Speaker 8: So the incumbents that a lot of the airlines use
Speaker 8: use satellites that are in much higher orbits and so
Speaker 8: there's a latency. There's that lag that I'm sure everybody
Speaker 8: has been frustrated with on their planes from time to time.
Speaker 8: But what starlink offers their satellites are much closer to
Speaker 8: the Earth and so you can have that cut down
Speaker 8: in latency. Of course, that comes with more satellites in orbit.
Speaker 8: They need to launch more and more so that they
Speaker 8: can have that global coverage because when you're closer to
Speaker 8: the Earth, the satellites are moving a lot quicker, and
Speaker 8: so in order to have a satellite overhead at any
Speaker 8: given time, they just have to keep launching satellites. It's
Speaker 8: basically a numbers game. But if they are able to
Speaker 8: have enough satellites in orbit, then you cut down down
Speaker 8: that latency and it's a more seamless experience.
Speaker 4: Willumbre analyst Luis de Palmas, he's to be saying Stalin
Speaker 4: is in no oppositioned to have the highest aviation mock
Speaker 4: show in the next decade, but he's not saying in
Speaker 4: the next two or three years.
Speaker 3: This takes time run.
Speaker 8: Yeah, it's definitely going to take time. And as we've seen,
Speaker 8: you know, in terms of where Starlink has excelled, they've
Speaker 8: really gone up in numbers. When it comes to individual subscribers,
Speaker 8: maritime deals. They're definitely very popular over the ocean right
Speaker 8: because there's less demand there, But when it comes to
Speaker 8: the you know, over land and with bigger airlines, you
Speaker 8: know that's going to take some time.
Speaker 3: Also, you know, you have.
Speaker 8: To get certain approvals, you have to re outfit the planes,
Speaker 8: so it's going to be a slow process.
Speaker 3: But this is just the first step.
Speaker 8: And well it'll be interesting to see if any of
Speaker 8: the other airlines follow.
Speaker 4: I'm crush, what joy to have you in the studio
Speaker 4: in New York. Watch this here traveling thank you so
Speaker 4: much in a busy week in space elsewhere and transportation,
Speaker 4: Amazon says it will invest more than two billion dollars
Speaker 4: in its delivery service partner program, especially in an effort
Speaker 4: to raise driver pay to a national average about twenty
Speaker 4: two dollars an hour. Bloomberg's Matt Day reporting across this.
Speaker 4: Why do it, Matt Well?
Speaker 9: Why?
Speaker 10: The first and kind of obvious context behind this is
Speaker 10: a pressure from labor groups. You know, Amazon's contract delivery
Speaker 10: drivers are a focused for the team Stais in particular,
Speaker 10: they put a big target on Amazon's back, saying we're
Speaker 10: going after them. Famously, these folks represent ups and have
Speaker 10: said they think they can organize an Amazon worker. So
Speaker 10: Amazon playing a little bit of defense here.
Speaker 4: Defense Ultimately, why do they go for contractors? To begin with?
Speaker 4: Why don't they hire their own drivers?
Speaker 10: You know, the argument they make is that it's about
Speaker 10: empowering small businesses. I think labor experts would maybe bat
Speaker 10: an eye at that, but it is. It is a
Speaker 10: relatively common model, right, FedEx uses you know, versions of this.
Speaker 10: Uber you know, famously doesn't employ its own folks either.
Speaker 10: So for Amazon, this gives them, you know, a bit
Speaker 10: of a best of both worlds.
Speaker 4: Right.
Speaker 10: They don't have to provide you know, the perks of
Speaker 10: employees to these folks directly. You know, at the same time,
Speaker 10: they can exert a relatively high degree of control over independent,
Speaker 10: often bespoke contract outfits.
Speaker 3: How does it look abroad?
Speaker 4: Is it this model in the US?
Speaker 3: Same elsewhere? Different?
Speaker 10: There are versions of it, and obviously, you know, in
Speaker 10: countries with stricter labor laws, you know, they have to
Speaker 10: comply with those. The US has fewer of those when
Speaker 10: it comes to last mile drivers, but there are versions
Speaker 10: of their Delivery Service Partner program abroad. They say there's
Speaker 10: something like three hundred and ninety thousand drivers employed by
Speaker 10: DSP's worldwide, So it's a it's a huge portion of
Speaker 10: their you know, kind of workforce that does not accrue
Speaker 10: to their books.
Speaker 4: And let's talk about that books because I think Ultimately,
Speaker 4: this is a business that has been cutting jobs, has
Speaker 4: been getting leaner and meaner in areas it can, while
Speaker 4: it's splurges an awful lot on artificial intelligence and compute.
Speaker 4: What does this say a two billion dollar investment, what
Speaker 4: does that in the context of Amazon's overall spending.
Speaker 10: I think it's a reminder that, you know, as people
Speaker 10: talk about them as a technology company, you know, their
Speaker 10: core business of getting you things you know by by
Speaker 10: delivery is still growing, even if it's slower than it
Speaker 10: was during the boom years, and it still requires a
Speaker 10: whole lot of bodies to make it work.
Speaker 1: Right.
Speaker 10: We're going to see surely from them announcements about their
Speaker 10: seasonal hiring coming up for the fall, for the the
Speaker 10: peak holiday season, something they do every year about this time.
Speaker 10: So just a reminder I think that, you know, listen,
Speaker 10: while they're they is getting all the headlines, they still
Speaker 10: are moving a whole lot of stuff and require a
Speaker 10: lot of partners to make that happen that day.
Speaker 4: All things Amazon, we appreciate it, Thank you so much. Now,
Speaker 4: coming up with the dirt bag of the Internet, who
Speaker 4: happens to be behind the Crypto project promoted by Donald Trump?
Speaker 3: That's next. This is Blouly Big Technology Revolute.
Speaker 4: It's seeking licenses to start operating in the Middle East.
Speaker 4: This is the London fintech giant hunts for growth beyond.
Speaker 3: Its home market.
Speaker 4: Now the firm has submitted applications to the Central Bank of.
Speaker 3: The UAE reporting.
Speaker 4: Shows to become an electronic money institution and offer remittiscences
Speaker 4: in the country they of course. The sources currently speaking
Speaker 4: to Bloomberg say that the goal is to eventually apply
Speaker 4: for a full banking license similar to the one that
Speaker 4: it recently received from regulators in the UK after years
Speaker 4: of work. Now let's stick with the world of fintech,
Speaker 4: but the crypto side of it. In the last year,
Speaker 4: Donald Trump has fashioned himself into a friend to the
Speaker 4: cryptocurrency crowd. He and his two older sons now have
Speaker 4: been particularly good friends to World Liberty Finance, the crypto
Speaker 4: project they've been promoting on social media. Here to tell
Speaker 4: us more about well, the deal maker behind the project,
Speaker 4: Sloomberg Investigative reporters Fox. You're also the author of book
Speaker 4: Number Go Up Inside Crypto's Wild Rise and Staggering four,
Speaker 4: which is up for a few awards. So congratulations on
Speaker 4: that Zeke, you start your story focused on Chase Hero.
Speaker 3: What can you tell about this guy?
Speaker 9: Yeah, so Chase is an unknown in the crypto world,
Speaker 9: but I dug it into his career and he's been
Speaker 9: a marijuana dealer. He says he went to prison for that.
Speaker 9: He sold weight loss calling cleanses online. He had one
Speaker 9: hundred and forty nine dollars a month Get Rich Quick class.
Speaker 9: And then now he appears to be the main deal
Speaker 9: maker behind World Liberty Financial, which is this defive startup
Speaker 9: the Trumps are promoting, and President Trump himself posted a
Speaker 9: video saying, you know this is going to challenge the
Speaker 9: big banks. So it's really bizarre to see that this
Speaker 9: is the person they're partnering with.
Speaker 4: I'm sorry, the guy behind this DeFi project isn't even
Speaker 4: known in the crypto world.
Speaker 9: No, and I mean he calls himself in videos. He
Speaker 9: likes to call himself the dirt bag of the Internet.
Speaker 9: I found in another video he said regulators should kick
Speaker 9: people like him out of the industry, and not in
Speaker 9: those words. He seems to have a very cynical, to
Speaker 9: say the least, attitude towards crypto and this project World Liberty.
Speaker 9: You know it might sound kind of impressive if you
Speaker 9: didn't know about crypto, but it appears to be kind
Speaker 9: of a copy of an existing project that didn't go
Speaker 9: anywhere and then lost a lot of money in a hack.
Speaker 4: Yeah, you're talking about the Dough project, right, Dough. That
Speaker 4: seems to be what's got actually industry inside. Is the
Speaker 4: crypto industry a little worried is ultimately that the people
Speaker 4: behind Well Liberty Financial have come across from a much
Speaker 4: smaller project that didn't manage to raise that many funds
Speaker 4: and actually got hacked.
Speaker 9: Yes, and I mean we don't know the details of
Speaker 9: World Liberty. I obtained a white paper that lays out
Speaker 9: some of them, but I'm sure it's all subject of change.
Speaker 9: But this is supposed to be defile like decentralized finance.
Speaker 9: The white paper says that seventy percent of the tokens
Speaker 9: will be reserved for insiders. So talking to people in crypto,
Speaker 9: they said, this looks like it could be more of
Speaker 9: a cash grab than an innovative project.
Speaker 4: Okay, And there in lies the issue that this could
Speaker 4: be some sort of cash grab.
Speaker 3: Some of the.
Speaker 4: Details in your story and that might hint that there's
Speaker 4: a slight difference in how this DeFi project is run
Speaker 4: compared to others is that the people behind the cut
Speaker 4: the overall project keep what of issue tokens.
Speaker 3: That's a lot.
Speaker 9: Yeah, And I mean like we're talking about this like
Speaker 9: I think we're talking about this even a little bit
Speaker 9: too seriously. Like you should go go read what this
Speaker 9: guy says about crypto. I mean, I can't, I can't
Speaker 9: repeat it. The language to this is a family TV channel,
Speaker 9: I guess, but the way he talks about it doesn't
Speaker 9: give you any confidence that this is a serious project
Speaker 9: that's going to challenge big banks.
Speaker 4: He says, basically, you can sell us a rubbish and
Speaker 4: anyone will buy it in crypto. He happened to say
Speaker 4: that in a twenty eighteen YouTube video recorded as he
Speaker 4: drove his rolls Royce.
Speaker 9: Yes, and I mean, I'm thinking deep to try and
Speaker 9: find his crypto resume, and I found that he appeared
Speaker 9: on influencer Logan Paul's podcast, and during the podcast, the
Speaker 9: two of them promoted a token called Omi, which I
Speaker 9: had also never heard of before since they promoted it
Speaker 9: a couple of years ago. Is down ninety six percent
Speaker 9: and another YouTuber, a scam busting YouTuber named coffee Zilla
Speaker 9: posted this expose that appeared to show the two of
Speaker 9: them coordinating ahead of the show their plan to talk
Speaker 9: about OMI.
Speaker 4: I mean, it seems that someone else listed in the
Speaker 4: white paper who's responsible as operations lead used to run
Speaker 4: a service called Date Hotter Girls, where he taught seminars
Speaker 4: on how to pick up women. All of this just
Speaker 4: feels like a real risk ultimately for the person who
Speaker 4: is running to be president of the United States again
Speaker 4: to be associating himself with Why do it?
Speaker 9: I mean, it's pretty bizarre, and the crypto industry, to
Speaker 9: the people I've spoke to from it, are not happy
Speaker 9: about it. They like that Trump has flip flopped and
Speaker 9: has endorsed crypto. He said that he's going to fire
Speaker 9: the head of the SEC and provide looser regulations that
Speaker 9: he says will make the US the crypto capital of
Speaker 9: the world. They're like, that all sounds great, but then
Speaker 9: why are you starting this pretty silly sounding new venture,
Speaker 9: a for profit venture just before the election. It almost
Speaker 9: discredits the I raises questions about his motivations for deregulating
Speaker 9: the industry.
Speaker 4: What has ultimately the world liberty financial spokespeople said to you,
Speaker 4: have you tried to get in touch, What have they
Speaker 4: said ultimately about the real underlying necessity of this project?
Speaker 9: So I did contact them, and I received an email
Speaker 9: back from a man who said he was not a spokesperson,
Speaker 9: but then he spoke for World Liberty and said that
Speaker 9: he could see where I was going with all these questions,
Speaker 9: and it was painting an inaccurate portrait of this company,
Speaker 9: and that time will tell that this is a serious
Speaker 9: project that's doing cool stuff. And Donald Trump has said
Speaker 9: he's going to unveil the details on Monday at eight
Speaker 9: pm on a Twitter spaces So I guess we'll see
Speaker 9: if what he says is consistent with the white paper.
Speaker 9: If they've they've made some changes, I'll certainly be listening
Speaker 9: whether or.
Speaker 4: Not it will indeed move away from the old banks,
Speaker 4: as former President Trump has discussed zep Fox. We might
Speaker 4: need to come back to you on Monday. Thank you
Speaker 4: so much, extraordinary peace.
Speaker 3: Meanwhile, some news.
Speaker 4: From a company that used to be associated with crypto
Speaker 4: much more in the AI world now core Weave.
Speaker 3: It's a cloud computing provider.
Speaker 4: Now that's among the hottest startups in the artificial intelligence race,
Speaker 4: and as in talks to a range of sale of
Speaker 4: existing shares, valuing it to get this twenty three billion dollars,
Speaker 4: according to sources. The sources say that the company is
Speaker 4: discussing a transaction that would allow existing shareholders such as employees,
Speaker 4: to tender between four hundred million and five hundred million
Speaker 4: dollars worth of their holdings. Welcome back to Bloomberg Technology.
Speaker 4: I'm Caroin Hide in New York. Let's get your check
Speaker 4: on these markets, because they are higher, and in fact
Speaker 4: they've been higher for five straight training days. And then
Speaker 4: as that one hundred, if we've added more than a
Speaker 4: trillion dollars in market cap, we're up and another four
Speaker 4: tenths of percent. Maybe the panic of last week becomes
Speaker 4: the past, and we start to once again factor in
Speaker 4: maybe a forty percent chance at least that the Fed
Speaker 4: could indeed cut rates to the tune of fifty basis
Speaker 4: points as soon as September. That's what the market is
Speaker 4: currently trying to digest. We see that reflected in the
Speaker 4: bond market, the yields just falling on the two year yield.
Speaker 4: I'm saying this because actually equities worldwide are seeing buoyancy
Speaker 4: from their stock six hundred over in Europe. It finishes
Speaker 4: the trading week also on the higher side, and it
Speaker 4: adds some three quarters percent on the day. As we've
Speaker 4: finished trade, let's move on to some of the individual
Speaker 4: movers trading here in the United States. At least, look
Speaker 4: chips have been on fire. We've made up so much
Speaker 4: of last week's real panic selling that we saw. The
Speaker 4: socks is currently up one point four percent. In fact,
Speaker 4: every single name and been trading in the green on
Speaker 4: the day, and largely we've got some meteoric moves over
Speaker 4: the last five days.
Speaker 3: Arm is up some twenty five percent.
Speaker 4: This of course a chip design company that Raymond James
Speaker 4: is saying.
Speaker 3: They're now rating it and outperform.
Speaker 4: They see it growth few particularly when it comes to
Speaker 4: AI on the edge, and we're looking at Adobe though
Speaker 4: despite managing two live up to expectations in its fiscal
Speaker 4: third quarter, it's dragged lower.
Speaker 3: It's forecasts not good enough. Where have we heard that
Speaker 3: before in video broadcon.
Speaker 4: And we've heard this a theme in the earning season,
Speaker 4: and Adobe once again just not managing to show the
Speaker 4: generation of revenue from AI, even though they do add
Speaker 4: generative AI.
Speaker 3: To their offering.
Speaker 4: Let's just stick with AI now because AI pioneer faith
Speaker 4: A Lee has raised two hundred and thirty million dollars
Speaker 4: from a star studied list of investors for a new
Speaker 4: AI startup called world Labs, which officially launches today. The
Speaker 4: company aims to build software that can use images and
Speaker 4: other data.
Speaker 3: To make decisions about.
Speaker 4: The three dimensional world, building what it calls large world models.
Speaker 4: Here to talk about what exactly that means, and indeed
Speaker 4: the fundraise doctor Fai Failee alongside Bloemug's Rachel Myths.
Speaker 3: It is wonderful to have you both here and well,
Speaker 3: doctor Lee.
Speaker 4: I asked, first and foremost, what was it like raising
Speaker 4: funds as an academic now entering this private world to
Speaker 4: be raising money.
Speaker 3: You've been in private well before, but to raise funds?
Speaker 3: Was it easy? From the starstut a list.
Speaker 1: Good morning, Carolyn, it's really good to be here. Well,
Speaker 1: nothing is easy, but what's really really hard is make
Speaker 1: spatial intelligence happen. I'm just so excited that we've brought
Speaker 1: together a incredible group of pixel AI talents to work
Speaker 1: on this really, really hard problem that we now call
Speaker 1: spatial intelligence.
Speaker 6: Explain to us what you mean when you say spatial intelligence,
Speaker 6: And what is it that you're building exactly?
Speaker 1: Yeah, Rachel, Well, look, humans have spatial intelligence. It's actually
Speaker 1: a very ancient ability. We have evolved over millions and
Speaker 1: millions of years. It's the ability to understand, to reason,
Speaker 1: to generate, and to even interact in a three D world,
Speaker 1: whether you're looking at a beautiful flower or trying to
Speaker 1: touch a butterfly or building a city. All this is
Speaker 1: part of the capability of spatial intelligence.
Speaker 6: We see that with humans, and we see that with animals.
Speaker 6: How do you expect that we'll see that with computers.
Speaker 1: Well, that's the problem we're working on. We're already starting
Speaker 1: to make tremendous progress. The past decade of AI has
Speaker 1: been pretty exhilarating, and people hear a lot about language recently,
Speaker 1: but truly in the world of pixels and vision and
Speaker 1: spatial intelligence, we've been making progress such as understanding what's
Speaker 1: in the picture, to be able to tell a story
Speaker 1: of what's in the picture, to even prompting a sentence
Speaker 1: and get to the image out of it. But what's
Speaker 1: really the next frontier, which is such a hard problem
Speaker 1: to crack, is to bring all this into three D
Speaker 1: because the real world is three D and humans. Spatial
Speaker 1: intelligence is built upon this very native capability of understanding
Speaker 1: and working with three D.
Speaker 4: So let's put into real world contexts that working with
Speaker 4: three D the applications. Is it robotics, is it manufacturing?
Speaker 4: Is it just us interacting with the real world when
Speaker 4: we put our AI function glasses on.
Speaker 1: You're not wrong, Carolyn. This is such a foundational technology.
Speaker 1: It's a foundational ability for computers that it has implications
Speaker 1: in a wide range of use cases. To start with, right, creators.
Speaker 1: Creators includes not only artists and VFX creators, but also designers,
Speaker 1: in developers, builders, and this technology has a profound implication
Speaker 1: for them. But in the long arc of this, of course,
Speaker 1: robotics manufacturing.
Speaker 3: A r v R.
Speaker 1: This is you know, there's a reason that Apple calls
Speaker 1: their vision pros spacial computing. Well, in my opinion, spacial
Speaker 1: computing needs spacial intelligence, so does many other use cases.
Speaker 4: Why does spatial computing need VC money, private sector action?
Speaker 4: What couldn't you achieve in academia?
Speaker 1: So this is a whole ecosystem.
Speaker 3: We've been seeing this in AI.
Speaker 1: We've been seeing this for years now, and this dates
Speaker 1: back to any technology that our society our country is
Speaker 1: building right. This ecosystem needs upstream fundamental curiosity driven research,
Speaker 1: which I have spent many years of my life in,
Speaker 1: but it also needs very focused drive industry. We've got
Speaker 1: great big tech companies working on related problems, but we
Speaker 1: also what's beautiful about our ecosystem, our startups that has
Speaker 1: a toll dream has the ability to call on the
Speaker 1: believers who believing cracking such a hard problem, and we
Speaker 1: come together and focus all of our allergy in solving
Speaker 1: this truly hard problem that needs to be scaled, needs
Speaker 1: to be productionized, and needs to be delivered in the
Speaker 1: hands of users and customers.
Speaker 6: Doctor Lee, One of the things that you're most well
Speaker 6: known for is image net, on big database of millions
Speaker 6: of images that really help push forward the field of
Speaker 6: object recognition and images. I'm curious how your work on
Speaker 6: that played into your decision to start World Labs.
Speaker 3: How do you see those two things as related?
Speaker 1: Yeah, thanks for asking that question, Rachel. I think they're
Speaker 1: related into two ways.
Speaker 3: At least.
Speaker 1: One is that image net is one of the earlier
Speaker 1: work in the field of computer vision, which is in
Speaker 1: the pixel space. Granted, in that time, you know more
Speaker 1: than ten years ago what image net and the derivative
Speaker 1: algorithms were able to do. Are still in a two
Speaker 1: D space right, recognizing objects in photos and eventually telling
Speaker 1: stories of pictures. But now this is an intellectual continuation
Speaker 1: of the early working computer vision. Now we're into the
Speaker 1: next really difficult chapter, which is spatial intelligence. So intellectually,
Speaker 1: I feel it's my life's work in continuation and zooming
Speaker 1: out one layer image that was my more than fifteen
Speaker 1: years ago. It was my intellectual bet on a big
Speaker 1: north star problem, a north star problem that can really
Speaker 1: change the course of AI. I do believe spatial intelligence
Speaker 1: is the next north star for me and for my team,
Speaker 1: that it will change the course of AI.
Speaker 6: One of the things I'm wondering about with the funding
Speaker 6: for this company is there are a number of big
Speaker 6: names in AI in particular that invested in this. We've
Speaker 6: got Jeff Dean and Jeffrey Hinton and Dracopathy. Some of
Speaker 6: them you've worked with previously. I know several you were
Speaker 6: at Google at the same time. How did you pitch
Speaker 6: them on it?
Speaker 1: Well, that's the beauty of our field. The first of all,
Speaker 1: these people have been friends and colleagues for years or
Speaker 1: former students. I think they share my belief. I think
Speaker 1: they see this as such a big problem and they
Speaker 1: believe in my team that when they hear my co
Speaker 1: founders been Mildenhall, Christophe Lassner, Justin Johnson, and really the
Speaker 1: entire funding team, they recognize that while this is a
Speaker 1: tough problem, it needs people who really can have the
Speaker 1: ability and believe to crack this, and I think that's
Speaker 1: why they support.
Speaker 4: You've got money from big name vcs as well, Andrewson
Speaker 4: and Horowitz, to name just one. I'm interested more broadly
Speaker 4: about the rallying call you've had for money to go
Speaker 4: towards academia.
Speaker 3: You went to President Biden himself saying.
Speaker 4: That there needs to be more funding in the public
Speaker 4: sector as well as the private sector when it comes
Speaker 4: to AI, R and D ultimately so universities can access
Speaker 4: GPU and compute. Are you still feeling that necessity that
Speaker 4: public sector needs money or have.
Speaker 3: You just sort of given up and gone to the private.
Speaker 1: Sector here, Carolyn, I actually believe even more so now
Speaker 1: that I'm traversing both the private and the public sector
Speaker 1: that's seeing the access to compute, access to support in
Speaker 1: the private sector. I believe none of us will be
Speaker 1: here in the private sector without the public sector, you know,
Speaker 1: imaged net convolution on your network back probably gay transformer models.
Speaker 1: Maining of these seminal work in AI came from public
Speaker 1: sector first. So I think this ecosystem is so critical
Speaker 1: and missing or the imbalance of any component is harmful
Speaker 1: for the ecosystem. And now I have personal experience to
Speaker 1: see the access we have to resources. It makes me
Speaker 1: believe even more that our country needs to invest in
Speaker 1: our public sector, in academia in this kind of moonshop
Speaker 1: mentality to support students and faculty and researchers in basic science.
Speaker 4: Research, academics backing you financially, as well as as I
Speaker 4: say A sixteen z Nea Radical Ventures, as well as
Speaker 4: many others and some celebrities in the mix as well.
Speaker 4: We thank you so much. World Labs co founder Faith
Speaker 4: Ailey and Brinibad's Rachel Metz appreciate it.
Speaker 3: Now let's just talk about elsewhere.
Speaker 4: And AI Open AI see Sam Altman and Video CEO
Speaker 4: Jensen Wang and other industry leaders have actually just been
Speaker 4: meeting with senior Biden administration officials at the White House
Speaker 4: just yesterday, where they discussed steps to address massive infrastructure
Speaker 4: means for AI projects.
Speaker 3: Following the talks, the White House.
Speaker 4: Announced an interagency they're calling it an Interagency Task Force
Speaker 4: to help promote data center development in the US and
Speaker 4: initiatives to support accelerator permitting for those facilities coming up.
Speaker 3: I'm going to be joined by Dylan Cox, had.
Speaker 4: A private market's research at Pitchbook for the firm's latest
Speaker 4: report on private money going into startups like we've just
Speaker 4: been talking about. And then we've got Rethink Impact founder
Speaker 4: and managing partner Jenny Abranson on.
Speaker 3: The firm's latest fundraise. It's a lot.
Speaker 4: This is reallymog technology. This week, Pitchbook released it's quarterly
Speaker 4: private market fundraising report. Not that pretty a reading. Funding
Speaker 4: was down in the second quarter, with bench capitals seeing
Speaker 4: a thirty three percent drop in fundraising year over year.
Speaker 4: As discussed at All with Pitchbook head and private markets
Speaker 4: research Dylan Cox, Dylan, we know that it's been hard
Speaker 4: to raise funds for some who particularly is it.
Speaker 3: Hard for.
Speaker 11: Well, thanks for having me on over the last twelve months.
Speaker 11: Our data shows it's been particularly hard for venture investors
Speaker 11: as well as private real estate funds on the flip side.
Speaker 11: Of things. We've seen some strategies have success, such as
Speaker 11: private equity secondarias, which provides liquidity to private markets and
Speaker 11: mitigates the jcre of impact for newer investors, as well
Speaker 11: as private real assets which a lot of people don't expect.
Speaker 11: There's a lot of money right now flowing into infrastructure,
Speaker 11: kind of along the lines of decarbonization of the economy.
Speaker 4: What about well, data center and digitalization, and we're seeing
Speaker 4: that in terms of the real asset allocation we are.
Speaker 11: That's another big piece of it. It's decarbonization, it's data centers.
Speaker 11: But not to be forgotten are sort of traditional infrastructure
Speaker 11: like roads, bridges, ports and airports. And then something that
Speaker 11: also catches a lot of folks by surprise is the
Speaker 11: sort of slow but study chugging along of more traditional
Speaker 11: natural resources in that bucket, things like oil and gas
Speaker 11: and timber. Funds I think have proved to be a
Speaker 11: bit more resilient than a lot of investors would have expected,
Speaker 11: maybe five or ten years ago.
Speaker 4: Less on our tech theme of things, but important to acknowledge.
Speaker 4: Talk to us a little bit about what's happening in BC.
Speaker 4: What are the funds having to say to former LPs
Speaker 4: to get them to commit to new funds. Where are
Speaker 4: we seeing outlies raise big new funds to allocate.
Speaker 11: Well, AI is certainly the name of the game, which
Speaker 11: will of course surprise no. We're seeing much larger AI
Speaker 11: focused funds as well as AI focused deals right now,
Speaker 11: many of them you know, household names at this point.
Speaker 11: But in terms of the asset class as a whole,
Speaker 11: I think the single most important issue right now is liquidity.
Speaker 11: That's distributions back to investors of venture capital funds viewed
Speaker 11: as a proportion of the size of the fund or
Speaker 11: of the assets and the fund. We're reaching decade lows
Speaker 11: in terms of trailing twelve month distributions, which of course
Speaker 11: means that investors in those venture funds have fewer dollars
Speaker 11: on hand to recommit into the next vintage of venture vehicles.
Speaker 4: Love that you talk us through the secondaries and the
Speaker 4: liquidity side of things as well. Dylan Cox's pitchbook, head
Speaker 4: of Private Markets Research.
Speaker 3: Great to have your take.
Speaker 4: We're actually going to now pinpoint a complete outlier to
Speaker 4: the conversation that we've just been having because we think
Speaker 4: Impact is now one of the largest VC firms dedicated
Speaker 4: to funding female CEOs, and it's just announced the whopping
Speaker 4: two hundred and fifty million dollar.
Speaker 3: Fund, it's third and largest raised to date, any.
Speaker 4: Doubling the firm's assets under management to more than half
Speaker 4: a billion. Founder and managing partner Jenny Abramson joins us.
Speaker 3: Now, So, Jenny, we're.
Speaker 4: Just hearing that it's dire out there for venture but
Speaker 4: not for you.
Speaker 3: Who did you have to come on board? Which LPs
Speaker 3: are interested?
Speaker 7: Well, first of all, thank you for having me on
Speaker 7: behalf of my partner Heidi Patel and the rest of
Speaker 7: our everythinking back team. Yeah, we're very excited to have
Speaker 7: announced more than two hundred and fifty million dollar raise,
Speaker 7: the largest fund backing female CEOs. And we were fortunate,
Speaker 7: despite the trends that Dylan shared, to be able to
Speaker 7: do this in this market. And it was a large
Speaker 7: part due to major institutions who came on board to
Speaker 7: support the fund.
Speaker 4: What sort of institutions are willing to almost take what
Speaker 4: now feels that the pendulum has swung on a more
Speaker 4: d I focused to investing.
Speaker 7: Yeah, I think people major institutions. We had more than
Speaker 7: ten university endowments, we had more than ten major foundations,
Speaker 7: We had, for example, a hospital, and others that really
Speaker 7: do care about returns, and I think have realized that
Speaker 7: investing in women and gender lens investing is not just
Speaker 7: something that feels good, but is actually good business. And
Speaker 7: so they came on board along with many individuals self
Speaker 7: made billionaires like Sarah Blakeley of Spanks and Sneaks, to
Speaker 7: Melinda Frenchgates, the major philanthropists, and to many others. And
Speaker 7: we think the combination of big institutions that I named
Speaker 7: a global bank like UBS, Cambridge Associates and their LPs,
Speaker 7: these kinds of institutions have realized that this is now
Speaker 7: a mainstream opportunity.
Speaker 4: We were just looking at some of your previous portfolio
Speaker 4: from the first fund. The vintage is good, the billions.
Speaker 3: That you've managed to raise it well.
Speaker 4: These founders have now managed themselves valuable at Guild Education
Speaker 4: for example, Spring.
Speaker 3: Health, l Avest.
Speaker 4: But these companies haven't yet exited per se some of them.
Speaker 4: When do you think that that might occur in the
Speaker 4: first fund? How is the IPO pipeline?
Speaker 3: Look?
Speaker 4: If you do these female founders want to go to
Speaker 4: IPO or are they looking at M and A opportunities?
Speaker 7: Yeah, it's a great question. I mean, I think the
Speaker 7: data has shown that female entrepreneurs do deliver higher revenue,
Speaker 7: more than twice as much per dollar invested, and tend
Speaker 7: to exit on average a year faster than their male counterparts.
Speaker 7: And these companies, you know, like all companies, there's been
Speaker 7: a slower IPO market, but we invest sometimes as early
Speaker 7: as a late seed, and so it can take companies
Speaker 7: typically eight ten years as long as well as an
Speaker 7: open IPO market. Of course, there's also M and A opportunities,
Speaker 7: pe buys and others, and so depending on the company,
Speaker 7: different different outcomes will occur.
Speaker 4: We were just hearing from the people who've jumped on
Speaker 4: board to commit capital in and what I kind of
Speaker 4: already referenced of this moment where the pendulum has one,
Speaker 4: we are hearing more pushback against that focus on women,
Speaker 4: people of color, minority founders rather than wanting to embrace them.
Speaker 4: We've seen the Fearless Fund, for example, actually have legal
Speaker 4: issues being able to allocate its grants to women of color.
Speaker 4: Was that anything that you heard of when you were
Speaker 4: out this summer raising the money?
Speaker 7: You know, we really mostly heard that people were excited
Speaker 7: by the opportunity that investing in women is no longer
Speaker 7: just a passing trend, and in the wake of the
Speaker 7: me too movement, and I think this raise makes clear
Speaker 7: that this is good business, good for the economy, and
Speaker 7: certainly here to stay. So that's mostly what we heard.
Speaker 7: Male founding companies continue to get ninety eight percent of
Speaker 7: investment capital, and almost all of our companies have men
Speaker 7: and women in the top team, and we think gender
Speaker 7: diverse teams outperform. And our goal is to you know,
Speaker 7: grow the pie here and grow the economy, which is
Speaker 7: which is what we're doing by backing these great female leaders.
Speaker 4: Oh boy, Jenny, but you say that stop two percent
Speaker 4: basically a VC money going to female founded companies and
Speaker 4: it isn't changing. And I'm interested as to why you
Speaker 4: think that is occurring. If you give us all the
Speaker 4: statistics that they're managing to exit quicker, they're building revenue faster,
Speaker 4: we're seeing better outcomes.
Speaker 7: Yeah, you know, I think this is the moment where
Speaker 7: it's starting to turn to us. This raise from Rethink
Speaker 7: Impact that we announced, it really shows that these mainstream investors,
Speaker 7: these institutional investors, see the opportunity and that the opportunity
Speaker 7: between the data and now examples of companies like many
Speaker 7: that you held up. You know, a company like Spring
Speaker 7: getting a three point three billion dollar valuation last month
Speaker 7: and many others. We think that's going to be the
Speaker 7: turn that leads to capital being more allocated in ways
Speaker 7: that grow the pie. So we're excited. We think this
Speaker 7: is that moment that things are going to finally unlock
Speaker 7: and change that data point that's been stuck for a while.
Speaker 4: Wow, Heidi, patl and yourself leading this and raising a
Speaker 4: huge round, wreathing Impact founder and managing partner Jenny Abramson,
Speaker 4: We thank you for your time. One other VC story
Speaker 4: that we're watching, AI startup Paul Side is in talks
Speaker 4: for a new round of funding, giving an evaluation.
Speaker 3: Of three billion dollars or this before.
Speaker 4: The company even released an initial product. According to sources,
Speaker 4: the company is set to raise five hundred million dollars
Speaker 4: in new financing with being Capital and talks to lead
Speaker 4: the investment round. And that does it for this edition
Speaker 4: of Blomberg Technology. You do not want to forget our podcast.
Speaker 4: You can find it on the terminal as well as
Speaker 4: online on Apple, Spotify, and iHeart.
Speaker 3: And it'll be back with me next week.
Speaker 4: Have a wonderful weekend. This is Bloomberg Technology