Speaker 1: From Marhard. We're Innovation, Money and Power colle in Silicon Valley, NBN.
Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2: I'm Caroline Heide of Bloomberg's World headquarters in New York,
Speaker 2: and I'm d Ludlow in San Francisco.
Speaker 3: This is Bloombay Technology.
Speaker 2: Coming up, we get a read on the IPO market.
Speaker 2: That's as retail Machine files confidentially for a US listing,
Speaker 2: while Reddit it tests the water for a twenty twenty
Speaker 2: four public offering.
Speaker 4: More ahead, plus we'll talk the state of the consumer
Speaker 4: on this travel Tuesday and Amazon reports new records for
Speaker 4: Black Friday and Cyber Monday sales.
Speaker 2: And Tesla's production nightmare. Why this cyber truck is continuing
Speaker 2: to be trouble for Tesla ahead of it's all important
Speaker 2: delivery event this week. We'll discuss that so much more.
Speaker 2: This hour, Let's go to companies that well perhaps are
Speaker 2: looking to get into the world of publicly traded pies
Speaker 2: and lose. Let's talk about Sheen's file for an IPO.
Speaker 2: We understand Reddit also again holding talks to potential investors
Speaker 2: as well. Let's get all of it on the strength
Speaker 2: or like there of of an IPO market as we
Speaker 2: look towards twenty twenty four. Butlue most Katie roof, I
Speaker 2: mean a whole lot of news. I mean, not forgetting
Speaker 2: skims of course of Kim Kardashian and one of the
Speaker 2: helm and that particular business. But start on sheen. What
Speaker 2: are we thinking the appetite would be like for a
Speaker 2: company that basically is rivaling h and emon Zara.
Speaker 5: That's right, So they just filed confidentially for a US IPO.
Speaker 5: They're hoping to go sometime next year. We think they
Speaker 5: could be valued as much as ninety billion dollars. They
Speaker 5: have low price points, which has been very popular with
Speaker 5: US consumers in global consumers. They were Chinese founded, but
Speaker 5: they moved their headquarters to Singapore, so this technically wouldn't
Speaker 5: be a Chinese company listing in the US. Obviously, there's
Speaker 5: been a little a lot of the geopolitical tensions there,
Speaker 5: but the Singapore makes.
Speaker 6: It more amenable.
Speaker 4: Reddit's an interesting one as well, Katie, And it was
Speaker 4: funny I spent the morning reading about reddits kind of
Speaker 4: more recent history, and you realize that they actually first
Speaker 4: started this IPO discussion January twenty twenty two, which the
Speaker 4: other way looking at it was two years ago. What
Speaker 4: is the latest on a reddit listing.
Speaker 5: Sure, so they wanted to go public during the last
Speaker 5: IPO boom, but they just missed it, and so they've
Speaker 5: been eagerly waiting for the IPO window to reopen. They
Speaker 5: weren't in the first crop of companies to go public
Speaker 5: this fall, as you know we saw Instacart, Clavio and
Speaker 5: all that, but sources tell us that they are getting ready.
Speaker 5: They are hoping that as soon as Q one that
Speaker 5: they could go public. But obviously, as we've seen, they've
Speaker 5: had a lot of fits and starts.
Speaker 4: Okay, Bloomberg's Katie Roof with a lot of reporting overnight
Speaker 4: about what looks like a busy one Q in twenty
Speaker 4: twenty four. Let's keep the conversation going with Equity Zen's
Speaker 4: head of market Insights, Rihann Lynch, And I guess we
Speaker 4: start with Sheen because the valuation being discussed is mega.
Speaker 4: It is, to all intents and purposes, a kind of
Speaker 4: discount clothing retailer side by side. What do you make
Speaker 4: about it coming to market?
Speaker 7: Yeah, this is one that we've heard is rumored to
Speaker 7: IPO for a while now, and it looks like it's
Speaker 7: finally making that move into the public markets, and it's
Speaker 7: an interesting one to watch. It's different than the cohort
Speaker 7: of companies that we saw went public this fall, and
Speaker 7: it's a company that's been growing really rapidly. They achieved
Speaker 7: twenty three billion dollars in revenue last year, had their
Speaker 7: most profitable half the first half of this year. On
Speaker 7: top of that, they've grown their distribution centers and the
Speaker 7: US camp Europe. They've opened more manufacturing centers in India
Speaker 7: and Brazil.
Speaker 8: And they're really solidifying their US footprint.
Speaker 7: The US is their largest market, you know, fourteen partnerships
Speaker 7: with Forever twenty one and others to you know, create
Speaker 7: that brick and mortar presence. That being said, there is
Speaker 7: a lot of hair around this one. There's concerns about
Speaker 7: their labor practices, their ties.
Speaker 6: To China, you know, and other issues.
Speaker 7: So it's interesting and it will be interesting to see
Speaker 7: how investors think about this one. There really hasn't been
Speaker 7: an apples to apples comparison recently.
Speaker 2: And distinguished for US. The driving force behind Achine wanting
Speaker 2: to go public and for example, a Reddit, it feels
Speaker 2: as though from a Reddit perspective, this is a liquidity
Speaker 2: event that really drives the desire to go public.
Speaker 7: I think that's right. Reddit was founded in two thousand
Speaker 7: and five. This is an eighteen year old company. You'll
Speaker 7: get sheen they're eleven years old, so you know they're
Speaker 7: not young either. And when you look at a mobal level,
Speaker 7: they're over twelve hundred of these unicorn companies valued it
Speaker 7: over three point eight trillion in aggregate, So that's a
Speaker 7: lot of value that has been tied up in the
Speaker 7: private markets.
Speaker 8: And wild platforms like equities.
Speaker 7: Then enable some investors to access this market and some
Speaker 7: shareholders to achieve liquidity.
Speaker 8: There really isn't a wide scale liquidity event until there
Speaker 8: is an IPO.
Speaker 7: So I think a lot of these companies are feeling
Speaker 7: intense pressure from their early investors, from their early.
Speaker 8: Employees to get some liquidity.
Speaker 7: And you know, venture capitalists really aren't looking to pump
Speaker 7: more money into these late stage companies, so the IPO
Speaker 7: is really, you know, they expected next step.
Speaker 4: The reported target valuation for Reddit is fifteen billion dollars.
Speaker 4: The last active user number that I reported, which was
Speaker 4: like months ago, is between fifty and sixty million daily
Speaker 4: active users, which in the grand scheme of things, doesn't
Speaker 4: seem like that many. You talked about the motivation being
Speaker 4: employee liquidity, but what on the about the demand side
Speaker 4: of the equation, Is anyone actually interested in a publicly
Speaker 4: traded Reddit.
Speaker 7: Reddit's an interesting one to watch because they are so
Speaker 7: entwined in the.
Speaker 8: Whole retail investor market.
Speaker 7: They really were in the news a lot at the
Speaker 7: time of the memestock era. Their subreddit Wall Street Bets
Speaker 7: really drove a lot of that retail momentum, So there's
Speaker 7: certainly a tie there, and I think there are some
Speaker 7: super fan and users who will be eagerly watching and
Speaker 7: looking at to.
Speaker 8: Participate in this IPO.
Speaker 7: So while they are maybe one of the smaller social
Speaker 7: platform really do have a loyal user base. And another
Speaker 7: thing to note is that they are growing from a
Speaker 7: profitability perspective.
Speaker 8: It's reported that.
Speaker 7: They're advertising revenue grew thirty one percent in twenty twenty two.
Speaker 7: This has historically been a really small part of their business,
Speaker 7: so an opportunity for them to grow and potentially achieve profitability.
Speaker 8: It'll be interesting to see.
Speaker 7: If they are profitable at the time of considering an IPO,
Speaker 7: because that seems to be a table stake for any
Speaker 7: company considering now.
Speaker 2: It's interesting that in many ways an IPO is often
Speaker 2: a marketing event as well, getting your name out that
Speaker 2: a retail community. And one particular interview we had last
Speaker 2: week amid the whole fura and debarcle around the ousting
Speaker 2: then return of Sam Altman to open ai was one
Speaker 2: very key VC saying well, this wouldn't eventually be a
Speaker 2: bad time to actually ipo open AI. Just take a
Speaker 2: listen for us, Brian.
Speaker 9: I actually think that they should once they get this
Speaker 9: AFT sorted out, immediately filed to go public. I think
Speaker 9: that the demand and the outpouring and interest that you've
Speaker 9: seen and the support for Sam is just absolutely unprecedented
Speaker 9: a tech company. It's almost like an unintended pre IPO
Speaker 9: roadshow to show the overwhelming demand.
Speaker 2: Of lux capital. That was Josh Wolf Brian, you, of
Speaker 2: course make a market in open AI. What would you
Speaker 2: say to the level of demand there is for a
Speaker 2: company like that amid the turmoil.
Speaker 7: When we look at demand amongst our investadors in the
Speaker 7: private markets, AI and machine learning companies are by far
Speaker 7: the most in demand companies on equity sense platforms, so
Speaker 7: not surprising given just the boom in this space, but
Speaker 7: there was certainly a lot of investor interest for AI
Speaker 7: an AI adjacent company, So an interesting take on that one,
Speaker 7: and I'm interested to see kind of if that story
Speaker 7: develops and what comes from that, because there certainly is
Speaker 7: a lot of demand, and when you look at the
Speaker 7: AI market more broadly, a lot of these companies are
Speaker 7: still quite young, so less likely to be IPO candidates,
Speaker 7: but that doesn't mean that there couldn't be one that
Speaker 7: hits the market, and open Ai certainly has the brand name.
Speaker 4: Brian just thirty seconds. Do you expect in active one
Speaker 4: Q twenty twenty four another window to happen?
Speaker 10: I do.
Speaker 7: I do think things will pick up in Q one
Speaker 7: of next year.
Speaker 8: From a macroeconomic perspective.
Speaker 7: We have really good indicator growth, strong GDP, inflation is cooling,
Speaker 7: so from you know, when you look at that now
Speaker 7: as an opportune time to enter the market, IPOs we've
Speaker 7: seen haven't done great, but I don't think that.
Speaker 8: Should be a deterrent for more of these companies next.
Speaker 7: Year, especially those who really have both the liquidity and
Speaker 7: the investor access need to enter the markets.
Speaker 2: Equity sends hell and market Insights Brian Lynch has been
Speaker 2: brilliant talking to you. So an upcoming developers conference has
Speaker 2: been canceled after seeming to list fake female speakers on
Speaker 2: the event's roster, prompting executives from Microsoft and other firms
Speaker 2: to back out of the Devternity conference. My tickets are
Speaker 2: actually selling for up to eight hundred and seventy dollars apiece,
Speaker 2: joining us now. One of the people reporting this out
Speaker 2: bluembg's lsir own and I mean totally extraordinary. The events
Speaker 2: organizer confirming it's been canceled. What was it? He was
Speaker 2: auto generating women in particular as speakers.
Speaker 10: That's the story of what he said happened. So this
Speaker 10: conference to Eternity had a number of speakers listed, and
Speaker 10: then a newsletter writer came out on x saying that
Speaker 10: actually this one profile has been AI generated. Another one
Speaker 10: seems very suspicious, and from their participants started dropping out.
Speaker 10: They just said it was very suspicious. The gentleman who
Speaker 10: organized the conference since said that one of the accounts
Speaker 10: or one of the profiles had been auto generated.
Speaker 2: It had been a mistake. He has since removed it.
Speaker 10: But then there was a far more pervasive issue of
Speaker 10: confirmed speakers Whitson's dropped out, their profiles were still up
Speaker 10: on the screen, including two women who had shifted for
Speaker 10: various reasons, and so there was a lot of concern
Speaker 10: that there was a plot to make the account look
Speaker 10: or to make the conference look more diverse than it
Speaker 10: really was.
Speaker 4: So the organizer, Edwards Sizovs, has confirmed that Devternity's been cancer.
Speaker 3: It's not happening.
Speaker 4: But let's go back to his rational He said this
Speaker 4: was not about giving the appearance of a more diverse
Speaker 4: conference than was actually the case. It was about a
Speaker 4: mistake essentially that he had made.
Speaker 2: Yes, that's exactly what he said.
Speaker 3: What happened.
Speaker 10: But one of the bigger pervasive issues is that we
Speaker 10: know that tech is still chronically under represented when it
Speaker 10: comes to female developers. One report said that the tech
Speaker 10: industry is still less than thirty percent female, and so
Speaker 10: there has been this really big push to make sure
Speaker 10: that these conferences that everything is really representative, that they
Speaker 10: have a really good mix. Some of these speakers who
Speaker 10: were confirmed as allies have even said I'm not going
Speaker 10: to appear at a conference unless there's a really decent
Speaker 10: representative mix, and so when they pulled out, they said
Speaker 10: that they had been duped and that their clauses had
Speaker 10: you know, it didn't pass muster for the clauses.
Speaker 4: Okay, Bloomberg's Elliser, and thank you so much for that reporting.
Speaker 4: Coming up here on Bloomberg Technology, we're going to talk
Speaker 4: about the state of the consumer. As Amazon says, Black
Speaker 4: Friday and Cyber Monday shopping broke records this year.
Speaker 3: More on that next. This is Bloomberg Technology.
Speaker 11: The consumers had a remarkable resilience, but I do think
Speaker 11: the momentum will start to slow, and I mean evidence
Speaker 11: of that is that we are seeing more usage of
Speaker 11: credit cards to fund these transactions.
Speaker 6: To credit card balances are at all time highs.
Speaker 11: Your colleague was just speaking about the fact that by
Speaker 11: now pay later is factoring into this as well. We're
Speaker 11: seeing delinquencies across the consumer spectrum, across the full income spectrum,
Speaker 11: start to increase from very low levels, but increase nonetheless.
Speaker 4: A mega Black Friday in Cyber Monday. But Lisa Hornby
Speaker 4: strowed as earlier on the state of consumers, some concerns
Speaker 4: and a focus after what was a strong weekend for
Speaker 4: e commerce sales, travel Tuesday is now underway and when
Speaker 4: we go up to the skies with Tom White of
Speaker 4: DA Davidson. So the hot categories to spend over the weekend,
Speaker 4: we're like consumer electronics and hot wheels, totally rad Do
Speaker 4: you expect to see the same spend at elevated levels
Speaker 4: gains from last year on travel, be it flights, be
Speaker 4: it bit accommodations.
Speaker 12: Yeah, first off, thanks for having me.
Speaker 13: Yeah, look, we're a few you know, we're monitoring the
Speaker 13: consumer closely, but so far it looks quite good. It
Speaker 13: looks like underlying travel the men is still holding up
Speaker 13: quite well based on a number of the data points
Speaker 13: that we track, certainly the big public OTAs online travel
Speaker 13: agencies that we cover all that pretty encouraging things to
Speaker 13: say about how kind of fourth quarter and early twenty
Speaker 13: twenty four travel was shaping up. But even some of
Speaker 13: the third party data, like for example, the TSA checkpoint
Speaker 13: data coded date, so far on the fourth quarter.
Speaker 12: We're up about ten percent on a year of a
Speaker 12: year basis.
Speaker 13: A third quarter was up about eleven percent, so pretty
Speaker 13: kind of stable growth trends. There a handful of other
Speaker 13: surveys from companies like Deloitte, All Point to you know,
Speaker 13: people looking to travel more. You know, this Thanksgiving through
Speaker 13: the mid January across all age groups, all demographics.
Speaker 12: Really so so far, so good.
Speaker 13: But you know, obviously I think Idrid Straits and the
Speaker 13: broader macro a somebody to keep an eye.
Speaker 3: Well that that's a good point.
Speaker 4: So you had that bite around the role that credit
Speaker 4: cards are playing with the consumer. By now pay later
Speaker 4: is how consumers spend on travel. Concern kind of for
Speaker 4: a long term outlook on that market look.
Speaker 13: Certainly for a long term out look, I mean in
Speaker 13: the short term out look. You know, if people are
Speaker 13: stretching themselves a little bit because they still feel the
Speaker 13: lingering effects of being cooped up during COVID and they
Speaker 13: want to prioritize experiences and travel, you know, that'll obviously
Speaker 13: be positive for the online.
Speaker 12: Travel agencies that we cover.
Speaker 13: A longer term though, we need a generally healthy consumer
Speaker 13: who's got discretionary income to spend.
Speaker 12: So I think an easing.
Speaker 13: Of rates or at least the stability and rates, and
Speaker 13: you know kind of maybe going into next year would
Speaker 13: you know, be a further kind of positive catalyst for
Speaker 13: travel spending.
Speaker 4: Okay, Tom White of DA Davidson with the travel outlook
Speaker 4: on this Travel Tuesday.
Speaker 3: Thank you, Caroline. What have you got on the ground.
Speaker 2: Well, we're going to go to the consumer a little
Speaker 2: bit more, but the non discretionary type. We want to
Speaker 2: be talking a little bit more about the grocery world after.
Speaker 2: In fact, Amazon just reported for Black Friday in Cyber Monday.
Speaker 2: Well all those hot wheels you were just talking about.
Speaker 2: It broke records this year, customers around the world purchasing
Speaker 2: over one billion items. But let's go into the grocery
Speaker 2: side of the equation. Meredith Bunches with us, Amazon's director
Speaker 2: of worldwide grocery stores. And were the consumers showing up
Speaker 2: in your part of the business as well, Meredith.
Speaker 6: Yes, they were.
Speaker 14: As you mentioned, Amazon had record Black Friday sales, and
Speaker 14: we had great success in the grocery space as well,
Speaker 14: lots of customers shopping online and in store across Full
Speaker 14: Foods and Amazon Fresh, especially taking advantage of our great
Speaker 14: deal that we had on turkey at just forty nine
Speaker 14: cents a pound, which was an amazing deal.
Speaker 6: So yes, a great holiday all around.
Speaker 2: What's interesting, of course, because you do have from Whole
Speaker 2: Foods and more, perhaps luxurious expenditure that you might do
Speaker 2: at a grocery department rather than you go to Fresh.
Speaker 2: And Amazon Essentials basically tickle the boxes on a price perspective,
Speaker 2: and I'm interested as to whether or not you're managing
Speaker 2: to have the one shopping cat that much a little
Speaker 2: bit more for people who want to splash out at
Speaker 2: Whole Foods but also get their basics from say Fresh
Speaker 2: for example.
Speaker 6: Yes, absolutely.
Speaker 14: We know that customers have different needs and our goal
Speaker 14: is to meet those needs, whether it's through Whole Foods
Speaker 14: Market or through Amazon Fresh. We also have Amazon Go,
Speaker 14: and each one of those banners provides our customers with
Speaker 14: a different set of groceries. Whether they want to buy
Speaker 14: their sustainable seafood from Whole Foods Market, and then they
Speaker 14: want to get their center store Pringles or Coca Cola
Speaker 14: or just really basic cooking goods at Amazon Fresh, and
Speaker 14: then they want to get some fresh food to go
Speaker 14: from Amazon Go. We really see our holistic grocery offering
Speaker 14: as a way to solve our customer's needs because we
Speaker 14: know that they're shopping across four to five different retailers today.
Speaker 6: Ten and so we think, what if we can yeah,
Speaker 6: go ahead, can I.
Speaker 2: Get it in one delivery yet.
Speaker 14: Not yet, but we are working on that because we
Speaker 14: have everything that the customer wants. We've got the tens
Speaker 14: of thousands of shelf stable items on Amazon dot Com,
Speaker 14: the Whole Foods Market, the Amazon Fresh, the Amazon Go
Speaker 14: and we want to make it as easy as possible
Speaker 14: for customers to get all of that in one shopping
Speaker 14: cart and one grocery delivery. And that is what we
Speaker 14: are working towards because simplifying that relationship where they can
Speaker 14: get everything from one singular relationship with Amazon is really
Speaker 14: how we think we can solve for customers in the
Speaker 14: grocery space.
Speaker 2: And if you look at producing stools of course as well, Meredith,
Speaker 2: you've been bringing in as we are, but do not
Speaker 2: se coffee, but also some of the no more technology
Speaker 2: savvy ways and perhaps just walking out for example. But
Speaker 2: how is that squaring with actually the expansion of bricks
Speaker 2: and water. Are you still rolling out more stores? I
Speaker 2: think it was about one hundred of Whole Food that
Speaker 2: you wanted over the next few years.
Speaker 14: Yes, we are going to continue to open our Whole
Speaker 14: Food's market stores, and we'll do so selectively with Amazon
Speaker 14: Fresh when we see the results that we like and
Speaker 14: as you mentioned, we have relaunched several Amazon Fresh stores
Speaker 14: in the Chicago area in the Los Angeles area. In
Speaker 14: those stores, we've added thousands of new products, We've lowered
Speaker 14: prices across thousands of products.
Speaker 6: We've added new checkout options.
Speaker 14: So customers can use just walk out, they can use
Speaker 14: our dash cart, they can use self checkout, really giving
Speaker 14: them the power to choose how they want to check out.
Speaker 6: Do you also mentioned we've.
Speaker 14: Got Krispy Kreme integrated in the stores with coffee and donuts,
Speaker 14: which makes everybody's shopping trip a lot more delightful. And
Speaker 14: Prime customers can also get an additional ten percent off
Speaker 14: of those stores. And we're really happy with the results
Speaker 14: that we're seeing, and we're going to continue to iterate
Speaker 14: and continue to invent on behalf of the customer and
Speaker 14: look for those results that tell us where we want
Speaker 14: to be.
Speaker 2: What was interesting with the whole refresh refocus that was
Speaker 2: really announced in August was those prime account holders and
Speaker 2: non prime account holders. You started to say, look, you
Speaker 2: combine with us even if you don't have a prime subscription,
Speaker 2: how is that going? How many numbers of people are
Speaker 2: using your groceries when they're not having a Prime subscription.
Speaker 14: Yeah, we were really excited just a few weeks ago
Speaker 14: to launch grocery delivery for customers without a Prime membership
Speaker 14: from Amazon Fresh. Previously, customers needed to be a Prime
Speaker 14: Member in order to access our grocery delivery, and we
Speaker 14: really wanted to democratize our affordable, fast, reliable delivery for everybody,
Speaker 14: whether you're a Prime member or not. That being said,
Speaker 14: being a Prime member still gives you an additional ten
Speaker 14: percent off thousands of items when you shop in store,
Speaker 14: as well as lower delivery.
Speaker 6: Fees for shopping online.
Speaker 14: We're really pleased to see the number of customers that
Speaker 14: are not Prime Members shopping our grocery delivery service we
Speaker 14: continue to roll out.
Speaker 6: We hope god will continue to grow.
Speaker 2: Meredith Branch, thank you so much giving us the insight
Speaker 2: on Amazon and all the worlds of groceries.
Speaker 4: And we we've got coming up yep, A big focus
Speaker 4: on China tech presidents using ping visiting Shanghai today. A
Speaker 4: lot of stories in the news flow. This is Bloomberg Technology.
Speaker 2: Welcome back to Bluemo Technology. I'm Caroline Hid in New
Speaker 2: York and.
Speaker 4: I'm Ed Lovelow in San Francisco. There was a lot
Speaker 4: of news out of China overnight technology stories that impacted markets.
Speaker 4: One of the shares we're looking at is the Hong
Speaker 4: Kong listed shares of sense Time, a Chinese AI company.
Speaker 4: We're going to bring you the full details later in
Speaker 4: the show, but they're subject to a short seller's report
Speaker 4: which did see the shares in Hong Kong closed down
Speaker 4: almost five percent. The other big name, and this has
Speaker 4: continued into the US session, is the ADRs or the
Speaker 4: US listed shares of Pindwo d Woe, the owner of
Speaker 4: team we're talking about online retail, absolutely smashing expectations in
Speaker 4: its earnings in the court have just gone more than
Speaker 4: doubling revenue year on year, coming in twenty five percent
Speaker 4: ahead of consensus, but also really beating on their income.
Speaker 4: The story is Timu really taking shoppers and market share
Speaker 4: from the likes of Sheen, which we've talked about is
Speaker 4: standing by for a US listing at the start the
Speaker 4: next year, but also Amazon some evidence that they're taking
Speaker 4: shoppers from Amazon in other markets as well, and those
Speaker 4: usadrs now up almost nineteen percent eighteen and a half
Speaker 4: percent in the session.
Speaker 2: Carol Andrew Duau a Shanghai based company. Let's talk about
Speaker 2: that a little bit more, because Chinese President's using Ping
Speaker 2: is indeed visiting Shanghai for what is like the first
Speaker 2: time since COVID lockdown, making stops at the Shanghai Futures
Speaker 2: Exchange and several tech giants operating in the megacity to
Speaker 2: try and boost waning private sector sentiment. That's all according
Speaker 2: to local media. Johnny us Now is an expert. Ben
Speaker 2: Harberg is managing partner and MSA capital who actually, well,
Speaker 2: you just had words with Shixingping when he was at
Speaker 2: APEC in San Francisco. Where where it is right now?
Speaker 2: And what is your message to him at the moment,
Speaker 2: and what is his message at this moment by going
Speaker 2: to Shanghai.
Speaker 15: Well, he's trying to stretch his hands out.
Speaker 16: Shanghai was probably one of the most damaged major cities
Speaker 16: by the draconian zero COVID lockdowns. We didn't face the
Speaker 16: same type of shut down in Beijing, and Shanghai was
Speaker 16: kind of seen as a poster child for one that
Speaker 16: had kind of fallen a foul of let's say, central
Speaker 16: government regulations around managing zero COVID and therefore was subjected
Speaker 16: to the most strict lockdowns, and the PTSD that that
Speaker 16: left both for its residents as well as global investors,
Speaker 16: will not soon be forgotten.
Speaker 2: The PDSD that many an investor has is then the
Speaker 2: regulatory crackdown that Shi Jinping had on the tech investment area.
Speaker 2: More broadly, how do you think that investors are seeing
Speaker 2: a post COVID and post regulatory enforcement world for China.
Speaker 17: Well, you know, the regulars are doing everything they can
Speaker 17: to try to assuage those fears that there will be
Speaker 17: an ongoing interference in the markets. And when I had
Speaker 17: the chance to whisper a few thoughts to President and
Speaker 17: She last week, I said, please get your hand out
Speaker 17: of the markets and get a better PR team, because
Speaker 17: you need people that can explain why you're doing what
Speaker 17: you're doing, and explain well ahead of the time that
Speaker 17: it takes place, so that people don't fear that there's
Speaker 17: these unexpected twists and turns and unpredictability that would cause
Speaker 17: them to flee the market.
Speaker 16: And it's that volatility with the strong returns on the
Speaker 16: US side, it will cause a lot of global investors
Speaker 16: to say, why is China worth the risk? If I
Speaker 16: could go put pop my money in the US at
Speaker 16: these kind of returns.
Speaker 4: Shanghai and some of its high tech parks are the
Speaker 4: site of AI development. They're the site of chip design
Speaker 4: firms and actually, to some extent gaming. Twenty four hours
Speaker 4: ago we posed this question about the regulatory crackdown on
Speaker 4: gaming and where we stand now.
Speaker 3: Just have to listen to this.
Speaker 18: But most of the regulatory changes are behind us now
Speaker 18: and that people have some stronger footing to move forward.
Speaker 18: There's still huge amounts of money to be made in
Speaker 18: the Chinese games market.
Speaker 4: Ben That was Lisa Costmus Hansen, partner at NICO Partner's
Speaker 4: President of Nico Partners. She was talking in the context
Speaker 4: of gaming, but broadly across the technology sector.
Speaker 3: Is she now carrying out.
Speaker 4: A supportive policy or is still having some heavy regulatory
Speaker 4: overt tang on those sectors, many of which based in Shanghai.
Speaker 19: I think that regulatory intervention is over and again it
Speaker 19: squares with the type of tone that he took during
Speaker 19: his speeches at APEX, particularly the one that we were
Speaker 19: attending on Wednesday night, where he was really olive branch
Speaker 19: out the state of the Chinese.
Speaker 15: Economy is dire.
Speaker 16: The last thing they need is further shocks and further interventions,
Speaker 16: and in the technology giants that they are seen as
Speaker 16: bell weathers and so don't expect further interventions. That doesn't
Speaker 16: mean that the world will believe that. We've got to
Speaker 16: show that through proof. And again that's why they've really
Speaker 16: got to come out clearly and state that just having
Speaker 16: photo ops at Sense.
Speaker 15: Time or Pinduo Duo or sm C won't do it.
Speaker 16: They've got to make that clear to investors and then
Speaker 16: show it over the coming year before a lot of
Speaker 16: that trust can be rebuilt.
Speaker 4: From a pure technology and competence perspective, you see evidence
Speaker 4: that China is standing on its own two feet.
Speaker 15: Certainly.
Speaker 16: I mean the pace at which China has been able
Speaker 16: to develop its own chips is beats any kind of
Speaker 16: global precedent. You know, China's numbers in terms of publications
Speaker 16: and magazines in Nature magazines or you know, the other
Speaker 16: kind of scientific sources is off the charts.
Speaker 15: Numbers of patents being filed.
Speaker 16: You know, the ability of Huawei and now obviously is
Speaker 16: Shoe its own operating system with Harmony.
Speaker 15: We are truly now.
Speaker 16: Witnessing what I think a lot of us, you know,
Speaker 16: Poo Pooon maybe early on, which was kind of the
Speaker 16: reality of a truly coupling. And we are finding ourselves
Speaker 16: in a balconized world where there will be a set
Speaker 16: of Chinese hardware, operating systems, app stores, and customer bases,
Speaker 16: and then those balcainized from those of Western producers.
Speaker 2: How balkanized will the investor base eventure REBN. This is
Speaker 2: what you deal in day to day, accessing pools of
Speaker 2: liquidity from the West to be going into China. And
Speaker 2: at this time we're looking at Sheen, which, of course
Speaker 2: you know would say it's not a Chinese company, but
Speaker 2: it once was, and ultimately a lot of it stock
Speaker 2: comes from there, but it's now based in Singapore. But
Speaker 2: they're gonna be tapping an American investor once again. How
Speaker 2: do you see the liquidity being brought to bear for
Speaker 2: Chinese investments.
Speaker 16: It's been tough this year. I think a lot of
Speaker 16: that again down to performance. So as you know, we
Speaker 16: have further first negative FBI since nineteen ninety eight in China.
Speaker 16: We had seventy five percent of the capital that flowed
Speaker 16: into China this year and the public markets flow out
Speaker 16: about twenty five billion.
Speaker 15: But I think again a lot of that is returns driven.
Speaker 16: The capital that is not returns influenced is being scared
Speaker 16: away for let's say, non fundamental reasons, and that I
Speaker 16: think pertains more to geopolitics. And those investors are looking
Speaker 16: for opportunities to invest in China still they believe it
Speaker 16: fundamentally is a growth opportunity, but they want to do
Speaker 16: so in a way that helps them navigate these geopolitical uncertainty.
Speaker 16: So they want to know that the companies they're investing
Speaker 16: in aren't going to aid in the VET the PLA,
Speaker 16: They're not going to necessarily compromise American values, and so
Speaker 16: I think companies that can prove that ILK are going
Speaker 16: to continue to see and attract capital if they can
Speaker 16: return the type of profile that's required to kind of
Speaker 16: compete with those US opportunity costs. And so I think
Speaker 16: that capital will return, but that takes the stability, and
Speaker 16: those companies that are not on those that they're falling
Speaker 16: a file that the likes of sense Time four Paradigm
Speaker 16: or those that are kind of have connectivity to CCP
Speaker 16: entites or the PLA, I think they will track a
Speaker 16: lot less capital because of those geo political concerns going forward.
Speaker 4: Then we were just showing the performance of the Nasdaq
Speaker 4: Golden Dragon Index year. Today, I think it's trailing the
Speaker 4: end and as that one hundred and in s and
Speaker 4: P five hundred. Either way, what do you see as
Speaker 4: being the twenty twenty four story for China tech?
Speaker 15: We have to be ever bullish, and I really am.
Speaker 16: I mean I'm talking my own my own personal book
Speaker 16: in terms of what I put my money into.
Speaker 15: The numbers are irrationally discounted.
Speaker 16: That Ali Baba is trading outern near its IPO valuation
Speaker 16: yet with ten times increase in revenue makes no logical sense.
Speaker 16: And again, if we can sustain the growth, and I
Speaker 16: think China will hit its five percent target this year.
Speaker 16: The IMF even raised that target to above five heading
Speaker 16: into the tail end of this year.
Speaker 15: I think that China.
Speaker 20: Has the tools to deploy.
Speaker 15: The fundamentals are sound in the economy.
Speaker 16: The real estate picture is overblown in terms of the
Speaker 16: impact it will have the true economic drivers and the
Speaker 16: economy is not a Leman moment. And therefore, you know,
Speaker 16: we are actually piling into Chinese equities and taking them
Speaker 16: out of the American ones that we think are probably
Speaker 16: fully priced at this point, just can't manage to sustain
Speaker 16: this type of upside that we've experienced.
Speaker 15: Throughout this year.
Speaker 16: So I'm a China ball heading into next year, even
Speaker 16: if it's a more modest ball than I would have
Speaker 16: been in that kind of growth spurt from twenty seventeen
Speaker 16: to twenty twenty one.
Speaker 4: All Right, China bull light will come back to you
Speaker 4: at some point in twenty twenty four and check in.
Speaker 4: Ben Harberg, managing partner of MSA Capital, thank you so much.
Speaker 4: I want to go back to that story that I
Speaker 4: was talking about at the markets context since Time Group
Speaker 4: shares plummeted there most since April. After short seller Grizzly
Speaker 4: Research released the report citing documents and insiders which accused
Speaker 4: the Chinese AI company of inflating its revenues. The stock
Speaker 4: tumbled as much as nine point seven percent before closing
Speaker 4: down about five percent lower in Hong Kong, and a
Speaker 4: filing to the exchange since Time said the report is
Speaker 4: quote without merit and contains unfounded allegations. Okay, it's time
Speaker 4: for talking tech and first stuff in the news. A
Speaker 4: Toronto based hedge fund building a steak in Twilio is
Speaker 4: reportedly pushing for a sale. Reports from the Information say
Speaker 4: Ants and Funds send a letter to the software company's
Speaker 4: board of directors urging Twilio to either sell or divest
Speaker 4: its data and applications business Ants and steak in. Twilio
Speaker 4: is said to be worth about fifty million US dollars,
Speaker 4: and in an effort to grow its AI footprint, Dell
Speaker 4: has agreed to provide computing hardware to artificial intelligence startup INBEW.
Speaker 4: The one hundred and fifty million dollar deal will supply
Speaker 4: and View with Dell servers in order to process vast
Speaker 4: amounts of data in View as one of the handful
Speaker 4: of AI startups building its models from scratch. Plus Adobe's
Speaker 4: twenty billion dollar purchase of DESI NIGN software maker Figma,
Speaker 4: is at risk of being blocked by the UK's Competition
Speaker 4: and Markets Authority. The agency says the deal could threaten
Speaker 4: competition in product design software and reduce the possibility of
Speaker 4: new products in that market. These notes are pretty in
Speaker 4: line with the EUS regulator, which sent Adobe a list
Speaker 4: of objections earlier this month.
Speaker 3: Caroline Well, Let's stay.
Speaker 2: In the region for a moment ed because European biotech
Speaker 2: startup Cradle is on the path to expanding its use
Speaker 2: of generative AI in the name of science. Today, Cradle
Speaker 2: is announcing twenty four million dollars in this series A
Speaker 2: funding led by Index Ventures, taking the total raise to
Speaker 2: thirty three million dollars. For more on how these funds
Speaker 2: are going to be used, with police to welcome the CEO,
Speaker 2: Steph van Griechen and Steff Welcome using generative AI, using
Speaker 2: machine learning. You're helping biologists what basically design more efficiently,
Speaker 2: effectively less money. How do you do this stuff?
Speaker 21: Yeah, so we're using generative AI to help scientists teams
Speaker 21: to engineer your proteins that will basically help them to
Speaker 21: get to the types of bio based products that they
Speaker 21: want to bring into the market a lot faster. It's
Speaker 21: a little bit akin to how large language models are
Speaker 21: being used in natural language, but then for biological sequences
Speaker 21: from DNA.
Speaker 2: You've got Johnson and Johnson Innovation and other zimes, Twist
Speaker 2: Buy Science as some of your companies. You've already on
Speaker 2: boarded the money you use. Now, how does that accelerate
Speaker 2: onboarding more? What is it are you investing in talent
Speaker 2: in AI labs? Where you are in the Netherlands or Switzerland.
Speaker 20: Yeah, definitely.
Speaker 21: So we're scaling our go to market with this money,
Speaker 21: as well as our own in house data collection. I
Speaker 21: think what's a little bit different in biological research is
Speaker 21: that a lot of the data that you need in
Speaker 21: order to train these machine learning models you can just
Speaker 21: find on the internet because people are not publishing their
Speaker 21: IP and their experimental results. And so we're building out
Speaker 21: some of our in house lab capabilities, and obviously we
Speaker 21: will continue to train large language models and expand our
Speaker 21: mL research team step.
Speaker 4: There's a large body of work gone the use of
Speaker 4: generative AI tools in proteins in drug discovery. The whole
Speaker 4: point is largely to expedite what is a highly regulated
Speaker 4: and slow process. Where you are in Europe, is there
Speaker 4: regulatory support for if your tech works, you can actually
Speaker 4: go out and make an impact in the real world.
Speaker 21: Yeah, certainly. I mean, luckily for us, a lot of
Speaker 21: the products that people are building today are already being regulated.
Speaker 21: So if you want to bring a drug market up,
Speaker 21: you already have to go to the FDA or the
Speaker 21: European Drug Authority, and same for food products that you
Speaker 21: might bring into the market. Where we really show up
Speaker 21: is in sort of the research and development stages for
Speaker 21: these sector products. So if you're in pharmaceuticals, it can
Speaker 21: easily take four years before you go into a clinical
Speaker 21: trial and actually test whether your drugs are FICA safe
Speaker 21: and useful for people, and we really cut that initial
Speaker 21: part of drug discovery in half. Very similarly, a lot
Speaker 21: of people are now using bio based products and selling
Speaker 21: them to people. For example, you might have wandered at
Speaker 21: some point why you might detergents keep working at lower temperatures.
Speaker 20: That's because we're increasingly using.
Speaker 21: Enzymes like biologicals in the formulations. And also, these types
Speaker 21: of products are really expensive to bring to market and
Speaker 21: tens of millions of dollars worth of R and D.
Speaker 21: I think really the promise of generative AI in this
Speaker 21: space is to significantly reduce the amount of time required
Speaker 21: to do the R and D for these types of projects,
Speaker 21: therefore allowing our customers to bring those types of products
Speaker 21: to market a lot faster.
Speaker 4: Steff, just for clarity, say, what is it that Cradle
Speaker 4: has that's uniquely yours? Is it the underlying large language
Speaker 4: model that you've written, trained and then now using yourselves.
Speaker 20: Yeah, it's basically two things.
Speaker 21: One is indeed those large language models that help get
Speaker 21: our customers to outcomes much faster. I think secondly is
Speaker 21: we've collected a lot of proprietary data inside of our
Speaker 21: laboratory that we use to train these models that make
Speaker 21: it really easy and sort of usable for a lot
Speaker 21: of our customers. And I think finally, software in research
Speaker 21: and development for these types of products is still very early.
Speaker 21: We build very intuitive web based software that scientists and
Speaker 21: experimentalists can use.
Speaker 12: In the lab.
Speaker 2: I'm sure the vcs who've backed this latest round love
Speaker 2: what you're doing now, but they also love the background
Speaker 2: of the team and new stuff. Of course, you were
Speaker 2: part of product leadership over at Google AI at Machine Intelligence.
Speaker 2: What do you make of the current tearing apart almost
Speaker 2: of itself slightly of the way in which we should
Speaker 2: be developing generive AI, in particular the race or the slowdown?
Speaker 2: Where do you come out and that having worked at
Speaker 2: a force such as Google.
Speaker 21: Yeah, I mean I think there's still an acceleration happening.
Speaker 21: I personally am most excited in some of the application
Speaker 21: domains that are related to science, like can we get
Speaker 21: people to learn learn a lot more about something that
Speaker 21: they're researching a lot faster in things like electric engineering
Speaker 21: and things like mechanical engineering.
Speaker 20: In places like biology.
Speaker 21: I think there's an incredible amount of tapped applications for
Speaker 21: generative AI. Obviously, you know the races are offered some
Speaker 21: of the chatbots, and I wish, you know, my former
Speaker 21: employer as well as Open AI a lot of luck.
Speaker 21: I think we're just at the beginning, to be honest.
Speaker 4: Steph, you and you're founding members of the company are
Speaker 4: in Europe, but your origins are here in the Bay
Speaker 4: Area where I am. Kind of what is the benefit
Speaker 4: of launching and growing a company in Europe versus traditional
Speaker 4: Silicon Valley.
Speaker 20: Yeah, certainly. I mean there's some pros and cons.
Speaker 21: I think on the pro side, the access to really
Speaker 21: high quality talent for US is really amazing here. You know,
Speaker 21: I wouldn't want to be a founder fighting for m
Speaker 21: L researchers in the Bay Area right now because lots
Speaker 21: of people are trying to hire, and I think there's
Speaker 21: a lot of talent here that doesn't want to move
Speaker 21: to the US, that would want to work for.
Speaker 20: A company like Cradle.
Speaker 21: I think secondly, and that is for us more specifically,
Speaker 21: you know, a very large contingent of companies that are
Speaker 21: in biofarm and biotechnology are based out of Europe. You know,
Speaker 21: myself am in Eric in Switzerland right now, and so
Speaker 21: some of the large companies like Nevada's Rush, they're all
Speaker 21: based out of Europe.
Speaker 4: All right, Oh, thanks to Stefan greg and CEO of Cradle. Okay,
Speaker 4: Tesla's cyber truck is almost here, but it's not without
Speaker 4: its challenges. Even as the company is about start deliveries
Speaker 4: on Thursday, a splashy Eventlon Musk's already lamenting that Tesla's
Speaker 4: dug its own grave with it. Let's bring in bloembols
Speaker 4: down a whole who's been writing in about this on
Speaker 4: Bloomberg dot com. I guess the idea is that technologically,
Speaker 4: from an engineering perspective, from a battery perspective, this is
Speaker 4: a lot Yeah.
Speaker 22: I mean, I think a lot of people have focused
Speaker 22: on the cyber truck and the steel, which is its
Speaker 22: own challenge. But Musk has warned repeatedly that this truck
Speaker 22: has a lot of bells and whistles, there's a lot
Speaker 22: of new technology in it, so it's going to be
Speaker 22: difficult to manufacture in high volumes for that reason, and
Speaker 22: he's you know, very clearly stated on the last earnings
Speaker 22: call that.
Speaker 6: They're not going to reach high volume for quite a while.
Speaker 2: Bells and whistles was exactly what they did for the X. Well,
Speaker 2: that then goes so well from a sales perspective, So
Speaker 2: I'm interested why he's going back for more in this way?
Speaker 2: Why do this?
Speaker 22: Yeah, I mean, that's what really struck me is I
Speaker 22: listened to him talk about the cyber truck. He kept
Speaker 22: saying these phrases, and I was like, oh my god,
Speaker 22: this sounds like the Model X all over again, which
Speaker 22: you know, they eventually lamented and sort of acknowledged that
Speaker 22: the Model X suffered from hubris, and I just sort
Speaker 22: of fear that we're about to see this all over again.
Speaker 6: I mean, it's.
Speaker 22: New battery architecture, it is you know, rear wear stealing,
Speaker 22: it's a new steering wheel, it's the steel, it's a
Speaker 22: sound system, I mean, and we don't even really have
Speaker 22: real specs yet. So I think that there's probably a
Speaker 22: lot of great surprises that will delight consumers when they
Speaker 22: do the big reveal on Thursday, But manufacturing and high
Speaker 22: volume is just going to be rocky, and Tesla itself
Speaker 22: has basically said this.
Speaker 4: I remember being in Hawthorne twenty nineteen and cyber truck
Speaker 4: rolls on stage and you're like, no way, no way,
Speaker 4: and then friends from Vauhausen throws the ball, it smashes,
Speaker 4: and yet here we are done and behind schedule, but
Speaker 4: an actual product.
Speaker 22: Yeah, and I think the big question will be, so
Speaker 22: how many do they hand over on Thursday? My understanding
Speaker 22: is that it's supposed to be roughly ten. Are they
Speaker 22: to employees, to bonifide consumers, to sort of trusted consumers
Speaker 22: and influencers. And then when we get the sales you know,
Speaker 22: quarterly sales and delivery figures in January, like how many
Speaker 22: cyber trucks are on that list? So you know, I
Speaker 22: think they've learned lessons obviously, but they seem like they
Speaker 22: are repeating some mistakes that they made with the X
Speaker 22: in terms of just you know, really packing this vehicle
Speaker 22: with a lot of new technology.
Speaker 2: Another part of Elon Inc. Loving the poster behind you
Speaker 2: for the all important podcast you're part of at the
Speaker 2: moment as well, Dana, how we thank you so much
Speaker 2: for that look ahead for Thursday. Meanwhile, that does it
Speaker 2: for this edition, I'm going to make technology and you
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