Speaker 1: From the heart where Innovation, money and power Collie in
Speaker 1: Silicon Valley, NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde.
Speaker 3: And edlud Love.
Speaker 4: Live from Bloomberg's World headquarters in New York.
Speaker 3: I'm Ed Ludlow.
Speaker 4: Caroline Hyde is off today. This is Bloomberg Technology. Coming
Speaker 4: up on the program. Open ai kicks off its first
Speaker 4: ever developers conference, with engineers and entrepreneurs gathering in downtown
Speaker 4: San Francisco. We'll break down what we expect from the event.
Speaker 4: Plus we'll push your head to earnings this week and
Speaker 4: get the macro take on big text results as companies
Speaker 4: deliver even bigger profits than Wall Street anticipated, will it last?
Speaker 4: And Apple is in search of a new growth engine
Speaker 4: after warning on a slower holiday season. Can the vision
Speaker 4: pro solve that problem we discussed at first? The maker
Speaker 4: chat Chat GPT sorry is about to still go through
Speaker 4: a kind of Silicon rally rite of passage. Today is
Speaker 4: OpenAI's first Developers conference in downtown San Francisco. Hundreds of
Speaker 4: software engineers and entrepreneurs gathering to hear about the best
Speaker 4: use of the company's tools and how they can build
Speaker 4: their own products with the underlying GBT technology. Who have
Speaker 4: we got on the ground. Bloomberg's Rachel Metz is at
Speaker 4: the developers conference set the scene for us. What is
Speaker 4: this event symbolized?
Speaker 5: Rachel, this event is a really big deal through open ai.
Speaker 5: It has to have a developer conference before. We've seen
Speaker 5: so many technology companies that are big and want to
Speaker 5: be larger create these events to get developers more involved
Speaker 5: with their products over time, like Apple and Meta and Microsoft, Amazon,
Speaker 5: and they do these events here after year, and they've
Speaker 5: in many cases become a really big deal for a
Speaker 5: company to telegraph what they want to share book with
Speaker 5: developers and eventually with consumers.
Speaker 4: We relaunched the Bloomberg Technology Show almost a year ago
Speaker 4: to the day, and it's almost a year ago to
Speaker 4: the day that the chat GPT has made public. It's
Speaker 4: more towards the end of November, but open Eyes just
Speaker 4: dominated basically the discussion at least around the work in
Speaker 4: generative AI and the foundation models that power them. How
Speaker 4: big is that lead right now? Do you think, Rachel,
Speaker 4: based on all the reporting you've done over the last
Speaker 4: twelve months.
Speaker 2: I think it's big.
Speaker 5: But there are a lot of companies that are really
Speaker 5: getting in there and creating their own models, coming up
Speaker 5: with their own tools of open source. There's also from
Speaker 5: large tech companies. A lot of people are really interested
Speaker 5: in this space, and it's going to be interesting to
Speaker 5: see both what open AI brings out so it can
Speaker 5: stay ahead, and also what happens in the months to come.
Speaker 4: So the one side of the AI story that we
Speaker 4: love is there's still a human side. There's who's who
Speaker 4: in the world of AI. We expect Sam Mountman of
Speaker 4: course to be on site, right Rachel absolutely.
Speaker 5: I think well, there's probably bunch of executives here. I
Speaker 5: haven't had time to wander around too much yet, but
Speaker 5: Sam's expected to be here.
Speaker 3: I believe Mira Murradi.
Speaker 6: Will probably be here.
Speaker 5: She's also a very important executive at the company, and
Speaker 5: probably a bunch of other people. I mean that it's
Speaker 5: a really interesting time for the company. I would guess
Speaker 5: that if you could be here, you'd probably want to
Speaker 5: be here.
Speaker 4: Boombos. Rachel Metz on the ground at the Open AIS
Speaker 4: Developers conference, and she will be reporting across all Bloindoe
Speaker 4: platforms throughout the day. Thank you so much. Another story
Speaker 4: we're watching, Elon Musk revealed his own artificial intelligence spot
Speaker 4: to challenge chat GPT over the weekend called grock. He
Speaker 4: claims the prototype is already superior to GPT three point
Speaker 4: five across several benchmarks. It's the first product of Musk's
Speaker 4: XAI company that is currently testing with a limited group
Speaker 4: of users in the US. But interestingly, you have to
Speaker 4: be an ex the company formerly known as Twitter Premium
Speaker 4: subscriber to get on that waitlist, something that I signed
Speaker 4: up for overnight. Let's stick with AI and bring in
Speaker 4: Mike Mason, he's Chief AI officer of global tech consultancy
Speaker 4: thought Works, and Mike I wanted to get you on
Speaker 4: the program because this is a moment where we can say, Wow,
Speaker 4: what are twelve months it's been? You heard me frame
Speaker 4: it to Rachel in terms of what open ai did
Speaker 4: first in November of twenty twenty two, do you see
Speaker 4: them as having, particularly in the software space right a
Speaker 4: clear lead in the field of generative AI.
Speaker 1: I think they certainly do have a lead. They were
Speaker 1: first out of the gate with GPT three point five,
Speaker 1: then four point zero, and just a month or so
Speaker 1: ago they added GPT four V, which is adding vision
Speaker 1: to their product. They're also scaling very strongly from a
Speaker 1: revenue perspective, but I think they are not the only
Speaker 1: game in town. Certainly we're seeing features from Microsoft, Google, Amazon,
Speaker 1: and all of the cloud players are really adding AI
Speaker 1: into their platforms. I think AI is going to be
Speaker 1: the next battleground for those large companies. It is almost
Speaker 1: a bewildering array of options.
Speaker 3: So the thought works.
Speaker 1: As a technology consulting firm, we advise our clients on
Speaker 1: how they can build technology to solve their biggest challenges,
Speaker 1: and AI is certainly in that list. We worked with
Speaker 1: one client where we were helping them with their AI strategy,
Speaker 1: and before we'd even got started, they showed us two
Speaker 1: hundred and seventy ideas for how GENAI might improve their
Speaker 1: business and create value for them. And so you know,
Speaker 1: clearly having ideas is not the difficult bit. It's figuring
Speaker 1: out which of those ideas are really going to create
Speaker 1: business value for you, and then doing a proof of
Speaker 1: value and then getting that into production. Something that we're
Speaker 1: seeing a lot happening is that companies are able to
Speaker 1: do a proof of concept, but they don't really have
Speaker 1: the machinery in place to take that through into production
Speaker 1: at scale delivering value. And so that's an area where
Speaker 1: we can help.
Speaker 4: Well, a company having two hundred and seventy ideas, I
Speaker 4: don't know that there are two hundred and seventy large
Speaker 4: language models on the market to choose from. Maybe there
Speaker 4: are that many. I think we're talking about those with
Speaker 4: sort of tens of billions of parameters, you know, from
Speaker 4: GPT three point five LAMA to the work then thropic inflection.
Speaker 4: AI are doing things like that. Today is the Open
Speaker 4: AI dev conference. And when a company holds an event
Speaker 4: like this, Mike, what is it you want to hear
Speaker 4: from them?
Speaker 1: Well, so I would expect to hear more about model features,
Speaker 1: So new features that they're introducing, maybe more vision, maybe
Speaker 1: some cogeneration. Maybe also multimodal models, so that's a model
Speaker 1: that can work across text and speech and image and
Speaker 1: possibly video, both for input and output, and can kind
Speaker 1: of fluidly move between those modes of interaction. I'd expect
Speaker 1: to see greater clarity around costs of using these models.
Speaker 1: One of the problems with generative AI is that the
Speaker 1: costs are unpredictable, and that can be a serious barrier
Speaker 1: to getting these things into production and creating value from them.
Speaker 1: I might also expect to see some words around safety features. Safety,
Speaker 1: of course, is a huge factor in AI. We put
Speaker 1: out some consumer research a couple of weeks ago where
Speaker 1: we interviewed ten thousand consumers about their attitudes towards AI,
Speaker 1: and we found that more than ninety percent of people
Speaker 1: had concerns about data privacy, their data usage, and whether
Speaker 1: companies are being responsible and transparent with AI. And actually,
Speaker 1: I really think there's something there. You know, taking a
Speaker 1: privacy forward stance can be a brand enhancing move.
Speaker 4: We're just showing on the screen, you know that the
Speaker 4: cloud provider perspective, because ultimately, if you're a company that
Speaker 4: wants to invest in AI, what we're talking about here
Speaker 4: is compute and you mentioned the costs associated with that.
Speaker 4: I've reported that open ai will likely book a billion
Speaker 4: dollars of revenue this year, but there is a concern
Speaker 4: about the competitive pricing to bring in customers and then
Speaker 4: the long term profitability because crunching the data is proving expensive.
Speaker 4: How closely do you look at that, mic Well, I.
Speaker 1: Think it's difficult to look at it closely because those
Speaker 1: figures closely guarded secrets from those companies. But reading the
Speaker 1: tea leaves I would say that I don't think they
Speaker 1: really know whether they're pricing is where it needs to
Speaker 1: be to make the money. You've seen both Google and
Speaker 1: Microsoft with Duet and Office three six five add GENAI
Speaker 1: features to their productivity tool suites, and that's kind of
Speaker 1: in the thirty dollars per person per month zone. I
Speaker 1: don't think they actually know whether they're going to make
Speaker 1: money from that. It's something that's going to shake out
Speaker 1: in the long term. Rumors around chatch EPT five, of course,
Speaker 1: say the open AI is really focused on efficiency, and
Speaker 1: efficiency really means bringing down the cost to run that.
Speaker 1: I think another option that should not be overruled is
Speaker 1: to look at the open source world. There's amazing progress
Speaker 1: with models that are less big, smaller. You know, you
Speaker 1: can run them yourself, you can run them in house,
Speaker 1: and that's especially useful if you want to keep tight
Speaker 1: control over your data and not actually use a cloud
Speaker 1: provider for your AI.
Speaker 4: Well, the event is underwear in San Francisco in about
Speaker 4: an hour's time, so whether their rumors or not, we
Speaker 4: will get some more information later on in Monday's day.
Speaker 4: Foult Works Chief AI Officer Mike Mason, thank you so
Speaker 4: much now coming up here on Bloobow Technology. Earnings of
Speaker 4: the big tech companies are kind of about the way.
Speaker 4: We're going to take a deeper look at how the
Speaker 4: group delivered in the past quarter, what that spells for
Speaker 4: the sets going forward, big emphasis on profit. We're also
Speaker 4: taking a look at another Elon Musk company, Tesla. Reuter's
Speaker 4: reporting that Berlin and Gigaberlin will be home to this
Speaker 4: twenty five thousand euro next generation platform. That's around twenty
Speaker 4: seven thousand dollars. You know, I was speaking to sources
Speaker 4: throughout the day. The long term expectation was that it
Speaker 4: would be Shanghai that went first, but it looks like
Speaker 4: in the battle for affordable EBS that battleground, at least
Speaker 4: Tesla's perspective, and according to Reuter's reporting, is going to
Speaker 4: be done out of Berlin. The stockdown half of percent.
Speaker 4: Tesla did not respond to requests for comment and a
Speaker 4: note on programming. Tomorrow, Bloomberg will introduced a new podcast
Speaker 4: called Elon Inc. It's going to break down the most
Speaker 4: important stories on Mask all of his companies in his
Speaker 4: empire across the Bloomberg newsroom. Tune into that. This is
Speaker 4: Bloomberg Technology okay, time for talking tech. First up, Bumble
Speaker 4: founder Whitney wolf Heard is stepping down from her role
Speaker 4: as CEO. Wolf Heard founded the women's centric dating app
Speaker 4: in twenty fourteen and later took it public in twenty
Speaker 4: twenty one. She also briefly became one of the world's
Speaker 4: few women billionaires, who will be succeeded by Slack CEO
Speaker 4: Lydian Jones in January. And a Chinese startup founded by
Speaker 4: bench capitalist Kaifu Lee has taken the artificial intelligence space
Speaker 4: by storm with its one billion dollar valuation just eight
Speaker 4: months into its existence. I'm talking about zero one AI,
Speaker 4: which also received funding from the likes of Aali Barber's
Speaker 4: cloud unit. The startup developed an open source large language
Speaker 4: model available in both Chinese and English. Plus a flurry
Speaker 4: of AI related hearings are set to take place on
Speaker 4: Capitol Hill this week. US lawmakers in both the House
Speaker 4: and the Senate will gather to discuss possible measures to
Speaker 4: rain in the technology, especially as campaigning for the twenty
Speaker 4: twenty four general election heats up. This comes amid President
Speaker 4: Biden's sweeping executive order, which of course was issued last week.
Speaker 4: Now earnings for most big tech companies have come out,
Speaker 4: and while the group deliver better than expected profits, the
Speaker 4: outlook for those stocks are on shaky ground based on
Speaker 4: sales joining us from Chicago blooms Bloomberg's Ryan Lostellica. It's
Speaker 4: so interesting how the story changed. Right we go into
Speaker 4: it going, oh, that the magnificent five or seven. They're
Speaker 4: propping up profit estimates for twenty twenty four. We've come
Speaker 4: out the other side, and now everyone's worried about the
Speaker 4: sale out the ryme.
Speaker 3: Yeah, absolutely.
Speaker 7: I mean the thing about this earning season is really
Speaker 7: that no matter what narrative you really want to abscribe to,
Speaker 7: you will find a big tech result that will kind
Speaker 7: of fit your point of view. So Microsoft, for example,
Speaker 7: had very strong results. The stock initially did quite well,
Speaker 7: but given concerns about the macro backdrop and the Fed
Speaker 7: and treasure yields and things like that, the stock barely
Speaker 7: ended higher on the day, you know, pretty slight gain. Then,
Speaker 7: on the other hand, you have something like Alphabet, which
Speaker 7: was also a pretty strong result except for some weakness
Speaker 7: in their cloud business, and that stock saying almost ten
Speaker 7: percent following results, So a pretty outsized reaction, especially for
Speaker 7: a company that would probably classify as one of the
Speaker 7: cheaper of the big tech stocks at these traditional evaluation metrics.
Speaker 7: And then last week we saw Apple come out and
Speaker 7: they really gave a sort of a discouraging forecast for
Speaker 7: their holiday season, especially given concerns about the strength of
Speaker 7: their business in China, which is a major market for
Speaker 7: them for both supply chain and consumer demand purposes. That stock, however,
Speaker 7: it fell on the day, but not too much considering
Speaker 7: because there was a little bit of optimism about FED
Speaker 7: policy and you know that path going forward there. So
Speaker 7: again a very mixed thing. There's a lot of focus
Speaker 7: on the macroeconomic environment. But I'd say overall the big
Speaker 7: tech earnings have been mixed so far. But it does
Speaker 7: seem like people, you know, overall have been kind of
Speaker 7: looking past them and looking to what's the come next.
Speaker 4: Ran you are a member of the Bloomberg newsroom who's
Speaker 4: just like zeroed in on the Bloomberg terminal, every headline,
Speaker 4: every piece of data, and you flagged me before the
Speaker 4: show this UBS note right, which shows us that not
Speaker 4: everyone agrees with the fair you know, UBS's perspective is
Speaker 4: that tech stocks look contractive right now.
Speaker 6: Yeah.
Speaker 3: Absolutely.
Speaker 7: It says that some of the figures surrounding the group
Speaker 7: are overdone, and the you know, the sector looks pretty
Speaker 7: well positioned for growth, especially in twenty twenty four. It
Speaker 7: expects it to be one of the most you know,
Speaker 7: robustly growing sectors in the economy.
Speaker 4: So that's obviously a positive.
Speaker 7: It sees you know, buying opportunity and semiconductors, it sees
Speaker 7: you know, pretty you know, attractive margin prospects for software companies,
Speaker 7: and you know, we're talking about pretty widespread optimism there.
Speaker 7: And I would say that even though there were some
Speaker 7: disappointments this season and some pronounced selloffs, you know, most
Speaker 7: analysts remain pretty positive about the group, especially from a
Speaker 7: longer term perspective as far as their growth potential.
Speaker 4: So there's what's been and then there's what's to come
Speaker 4: for me in Vidia. You know, it's been an incredible
Speaker 4: ride on the stock YEA to date, but now because
Speaker 4: it's so big, like from an index perspective and a
Speaker 4: wasting perspective, the market will pay attention, right.
Speaker 7: Yeah, absolutely, and it's going to get you know, additional
Speaker 7: focus you know again for you know, one of the
Speaker 7: several quarters in a row now just because it is
Speaker 7: so central to the AI thesis right now, chips are
Speaker 7: really the first stop or anyone who's looking to build
Speaker 7: out any kind of AI infrastructure. Past two quarters have
Speaker 7: been extremely strong as far as their forecast goes. Will
Speaker 7: they go for a hat trick?
Speaker 4: Will they do it again?
Speaker 7: I mean, we'll see, And even then if they do,
Speaker 7: who knows how the stock's going to react? Is because
Speaker 7: you know, it's a name that you know by many
Speaker 7: traditional metrics, is you know, kind of looking pricey, especially
Speaker 7: within a context of you know, potential or higher rate environment.
Speaker 7: So that's one that people are going to be paying
Speaker 7: a lot.
Speaker 4: Of attention to.
Speaker 7: And if they kind of give any indication that AI
Speaker 7: demand isn't as strong as maybe some people are hoping for,
Speaker 7: that could have some broader implications as well.
Speaker 4: Definitely in the data center contact we focus so much
Speaker 4: in H one hundred. We have Grace Hopper coming down
Speaker 4: the pipe as well, thanks of billiam I's Ryan Flaseelica
Speaker 4: out there.
Speaker 8: People want to keep flying, families want to go on holidays.
Speaker 8: They just don't want to pay of turns as outrageous prices.
Speaker 8: So I think fares that next year, I mean, my
Speaker 8: operating assumptions fhares will go by a low double digit
Speaker 8: percentage again through the summer twenty four. It'd be the
Speaker 8: third year in a row, third summer in a row,
Speaker 8: we'll see double digit fare increases in Europe.
Speaker 4: That was Ryan S CEO Michael O'Leary earlier on Bloomberg
Speaker 4: Television with his outlook for travel demands. Also talked about
Speaker 4: the fuel prices at the moment and sort of delays
Speaker 4: in taking new airplanes impacting their ability to meet demand
Speaker 4: and sticking with travel demand delights to say, we're joined
Speaker 4: now by Expedy A CEO Peter Kern, and Peter is
Speaker 4: interesting to hear what Michael leary said there, you know,
Speaker 4: the challenges alongside meeting what he sees is demand. What
Speaker 4: kind of demand do you see?
Speaker 9: Yeah, well we've seen thanks ed for having me first
Speaker 9: of all, and I enjoyed the clip.
Speaker 3: What we see is steady demand.
Speaker 9: I would say, I think what he's talking about is
Speaker 9: that we are seeing some shifts as customers are looking
Speaker 9: for lower cost carriers over the main airlines. So he's
Speaker 9: probably benefiting from that and seeing a little bit of
Speaker 9: a move in his direction. I think overall air demand
Speaker 9: in Western Europe and in the North America, et cetera.
Speaker 9: Is pretty steady, but we're seeing generally priced declines across
Speaker 9: the markets. So I think what he's discussing as a
Speaker 9: shift in his favor, but it's not necessarily that that's
Speaker 9: true for everything across the board.
Speaker 4: Peter, what fascinates me about Expedire in the portfolio of
Speaker 4: brands and platforms is the granularity of your data. You know,
Speaker 4: you can tell me the demographics of people that are
Speaker 4: not traveling where they're traveling too. Right now, what does
Speaker 4: gen z look like? I know that's a very specific question,
Speaker 4: but who's traveling and particularly how have you seen the
Speaker 4: younger traveler behave in the most recent quarter.
Speaker 9: Yeah, I think we don't tend to break it that way,
Speaker 9: but I can tell you that the travelers, you know
Speaker 9: that Weezer travel has remained strong. Corporate still, you know,
Speaker 9: still not back to pre COVID levels. You see a
Speaker 9: lot of differences geography to geography. You know, we still
Speaker 9: have Asia is still opening up to a certain extent,
Speaker 9: which has been a tailwind in Asia and Latin America,
Speaker 9: whereas the West has sort of normalized, I would say,
Speaker 9: and in general, by and large, you know, people have
Speaker 9: been waiting for travelers to trade down for cheaper alternatives.
Speaker 3: We haven't seen that very much. Now.
Speaker 9: It's true that at the lower end of the market
Speaker 9: you see it a little bit more. But as you
Speaker 9: know it, we introduced our new grand loyalty program called
Speaker 9: one Key, and what we're seeing as people get accustomed
Speaker 9: to that is they're actually trading up when they have
Speaker 9: value that they can use to get a better room.
Speaker 9: Like if they have one key cash, which is our
Speaker 9: rewards currency, they trade up to a better room or
Speaker 9: a better experience, or use that for something better.
Speaker 4: Alongside Sorry to interrupeed, I was gonna say, alongside rewards.
Speaker 4: You've also focused kind of on content creation and influences
Speaker 4: on social media. Has that given any sort of tangible
Speaker 4: boost to your sales?
Speaker 9: Yeah, well we're you know, we're using all the latest
Speaker 9: marketing and reach tools we can. I mean, for us,
Speaker 9: it's an education process when we launch something like one Key,
Speaker 9: we want people to understand it. When where you have
Speaker 9: one key now in Verbo, which is the only place
Speaker 9: you can get rewards and vacation rentals, we want to
Speaker 9: make sure that people that are interested in vacation rentals
Speaker 9: understand and appreciate the benefit. So sometimes, you know, old
Speaker 9: fashioned advertising is the best way, and it's easier to
Speaker 9: reach people with more information through influencers and such. But
Speaker 9: you know, you referred to all the data we have
Speaker 9: on gen z. That's really what's powering our product now
Speaker 9: as we make the product better and better. The fact
Speaker 9: that we have all that data is what allows us
Speaker 9: to now take friction out of the process, use AI
Speaker 9: and machine learning to make the.
Speaker 3: Experience better, in the product better. And that's really where
Speaker 3: we're focused.
Speaker 4: It's the expedia that the consumer and our audience around
Speaker 4: the world knows. And then there's the B to B business.
Speaker 4: When you look at your growth trajectory going forward, what
Speaker 4: is the splitting contribution of those two.
Speaker 9: Yeah, well, B to B it's had a very good
Speaker 9: run for us, and in part, as I mentioned earlier,
Speaker 9: it has to do with the exposure of the business,
Speaker 9: which is exposed more to Asia and some of the
Speaker 9: markets that have come back more recently post COVID. But
Speaker 9: also we've been building that business, building the technology in
Speaker 9: that business, expanding our customer base. So that business has
Speaker 9: seen you know, growth in the twenties for the last
Speaker 9: several years, twenty percent plus.
Speaker 3: Top line growth last quarter.
Speaker 9: Was closer to twenty six twenty seven, but we expect
Speaker 9: that to continue. It is a smaller part of our
Speaker 9: overall business, and as you know, we've done a lot
Speaker 9: of work in the last couple of years on our
Speaker 9: core consumer business with one key with the launch of
Speaker 9: new products and capabilities. So we expect our bigger business
Speaker 9: to accelerate now, but the B to B business probably
Speaker 9: has slightly more you know, tailwinds still for a bit.
Speaker 4: Peter, very very quick. Friday, your stock took off like
Speaker 4: a rocket, biggest jump since November twenty twenty. You must
Speaker 4: be happy about that.
Speaker 3: I was.
Speaker 9: I don't pretend to understand the markets, but we've just
Speaker 9: been shipping away at it, and I think the market's
Speaker 9: starting to understand that all the work we've done has
Speaker 9: set us up in a better way to go forward
Speaker 9: than most of our competitors, and that's what we're really
Speaker 9: excited about.
Speaker 3: The market recognize it.
Speaker 4: Expedia ceopiece, can Goods catch up? Have you here on
Speaker 4: Bloomberg Technology. Welcome back to Bloomberg Technology ed here in
Speaker 4: New York City this week. I want to get a
Speaker 4: quick check in on bitcoin and it's been interesting to
Speaker 4: track this, honestly, it's kind of been up and down.
Speaker 4: It's trades twenty four to seven, of course, but there's
Speaker 4: a debate whether any movement that we've seen to the
Speaker 4: upside as we are around thirty five thousand US dollars
Speaker 4: per token, has anything at all to do with the
Speaker 4: outcome of the FTX trial and Sam Bankman Freed, who
Speaker 4: was found guilty on multiple counts of fraud, securities fraud,
Speaker 4: and conspiracy. Let's get to Sam Bankman Freed's guilty verdict.
Speaker 4: The thirty one year old MIT graduate has been charged
Speaker 4: on seven counts of wire fraud, securities fraud, and money
Speaker 4: laundering and now faces the possibility of decades in prison
Speaker 4: when he is sentenced, which we think will happen in March.
Speaker 4: Joining us for more reaction on that trial, but its
Speaker 4: impact on the cryptosphirit large is Jilak Joban Putra, founder
Speaker 4: and managing partner of Future Perfect Ventures, an early stage
Speaker 4: VC firm that focuses on blockchain technology, crypto assets, AI,
Speaker 4: and human computer interaction. Your reaction to the outcome of
Speaker 4: the truck, Well.
Speaker 10: It's great to be with you. I think this is
Speaker 10: a huge sigh of relief for the crypto industry. We've
Speaker 10: moved on from this FTX trial or the news for
Speaker 10: the last year. But at the end of the day,
Speaker 10: fraud is fraud is fraud, and it doesn't matter what industry.
Speaker 10: It's good to see that justice is served and we
Speaker 10: can go back to backing and talking about the builders
Speaker 10: that are in it to create a better world using
Speaker 10: this new technology.
Speaker 4: That is sentiment I think echoed by a number of
Speaker 4: our guests on the show. There are those that acknowledge, however,
Speaker 4: that it had an impact right up until the jury
Speaker 4: gave its verdict because of what it represented from a
Speaker 4: sort of high to low collapse of the industry. As
Speaker 4: a venture capitalist, have you been able to go out
Speaker 4: and write checks with confidence over the last twelve months
Speaker 4: into startups that are working on the underlying technology or
Speaker 4: even backing a token of their.
Speaker 10: Own Absolutely, I mean we were long term investors. We
Speaker 10: have a ten year fund. I've been in the industry,
Speaker 10: in the venture industry since nineteen ninety nine, so I've
Speaker 10: certainly seen many cycles, and even within crypto for the
Speaker 10: last ten years, there have been many cycles. So look,
Speaker 10: I'm not going to lie FTX and what happened there
Speaker 10: was such a magnitude that it did impact and have
Speaker 10: an effect on all entrepreneurs, large companies and smaller companies
Speaker 10: in the sector. But what the jury showed is four
Speaker 10: hours to come to decision shows that the evidence was
Speaker 10: so compelling that people are not going to get away
Speaker 10: with this type of fraud in the industry. And I
Speaker 10: think entrepreneurs can rest easy there and people who are
Speaker 10: passionate about the sector continue to build and have continued
Speaker 10: to build. Downturns are notorious for giving birth to some
Speaker 10: of the most impactful companies throughout history.
Speaker 4: Nick Kotta was on the show and Friday Costwhile Adventures
Speaker 4: and he said that they were offer the opportunity twice
Speaker 4: to invest in FDx, but they didn't feel right about
Speaker 4: it and so they didn't. Just for sheer transparency of
Speaker 4: our audience, did you ever have the opportunity to back
Speaker 4: FDx or an associated group and did you? Yeah, I'll do.
Speaker 10: Nick one better on that. We had an opportunity three
Speaker 10: times to invest in FTX and did not. So we
Speaker 10: are early stage investors. We like to see governance even
Speaker 10: from the earliest stages in companies. Look crypto regulations very
Speaker 10: uncertain around the world is getting more and more clarity
Speaker 10: as we move on over the years. But that lack
Speaker 10: of regulatory clarity actually creates more need for diligence on
Speaker 10: the part of investors because we don't have regulators overseeing
Speaker 10: these companies. So it's really important to know that, you know,
Speaker 10: other co investors have the same it's kind of the
Speaker 10: same incentives we do. That we trust the entrepreneur in
Speaker 10: a sector that that's new, and there's lots of capital
Speaker 10: floating around even right now in a downturn.
Speaker 4: So where does the capital go, particularly in the context
Speaker 4: of the underlying blockchain right you know, on this show
Speaker 4: most recently we increasingly talk about it in the context
Speaker 4: of gaming as opposed to crypto, where right now excites
Speaker 4: you most well.
Speaker 10: Our thesis from our inception feature of Perfect Ventures in
Speaker 10: twenty fourteen is that crypto which is part of Web three.
Speaker 10: So this intersection of crypto, AI, machine learning, Internet of things,
Speaker 10: this collection and analnalytics of data as well as a
Speaker 10: distribution of data is going to be the next Internet.
Speaker 10: And so just like the Internet has impacted every industry,
Speaker 10: the media, industry, financial services, we believe that Web three
Speaker 10: crypto being a part of that will impact every industry,
Speaker 10: so gaming is certainly one. I wrote a blog post
Speaker 10: recently about what we're seeing around deep fakes in the media.
Speaker 10: So one of the really great elements of crypto and
Speaker 10: blockchain is the fact that you can track data prominence.
Speaker 10: And that's why FTX is a little ironic because the
Speaker 10: industry is supposed to be all about transparency, not about
Speaker 10: cover ups, and so this provenance tracking of data. We
Speaker 10: know if we're seeing a clip whether or not that
Speaker 10: is authentic data. What we need now is the intersection
Speaker 10: of machine learning where we can collect and analyze this
Speaker 10: data in real time. So WhatsApp has forty million messages
Speaker 10: that get posted per minute worldwide. Now there's no way
Speaker 10: to quickly analyze all of those messages right now in
Speaker 10: real time, but we are getting there, and when we
Speaker 10: get there, we'll know that our data is authentic, or
Speaker 10: it'll at least be water marked in a way where
Speaker 10: we know what we're consuming is authentic.
Speaker 4: Galacto Van Puncher, founder and managing partner of Future Perfect Ventures.
Speaker 4: Great wide, broad ranging conversation, Thank you very much. Now
Speaker 4: coming up here on the show, we're going to talk
Speaker 4: about the state of investing in Europe's tech sector, and
Speaker 4: celebrate an anniversary with Shnali Dereika of AXL That coming
Speaker 4: up next from London, This is Bloomberg Technology. Some news
Speaker 4: out of Europe. Artificial intelligence startup alif Alfa has raised
Speaker 4: more than five hundred million dollars from a consortium of
Speaker 4: industrial giants and financial investors as it tries to build
Speaker 4: a European rival to the large language models created by
Speaker 4: Open Ai and Google. Schwartz Group and the venture arm
Speaker 4: of Robert Bosch joined a group of seven other new
Speaker 4: investors in the financing round, which included SAP and HPE.
Speaker 4: Right sticking with tech in Europe, It's time for today's
Speaker 4: VC Spotlight. And joining us today is Sonali Deria, a
Speaker 4: partner at Excel, where she focuses on the consumer next
Speaker 4: generation financial services and software companies. Excel is also celebrating
Speaker 4: this week four decades of operating in Europe. Shanali, welcome
Speaker 4: to the program. Forty years of venture activity globally and
Speaker 4: in Europe. How did the firm do it?
Speaker 11: Thank you for having me here. Ed It's great to
Speaker 11: see you, even if I'm in London and you're in
Speaker 11: New York. You know, forty years it's a big milestone
Speaker 11: and it's a really important time to be reflective. And
Speaker 11: what I'll say is that we've always had the DNA
Speaker 11: at Excel to find to build a relationship and to
Speaker 11: invest in founders, exceptional founders really regardless of where they are,
Speaker 11: and typically that's been in really far fun places. And
Speaker 11: it's this philosophy that made us open up our London
Speaker 11: office twenty three years ago, opened up India fifteen years
Speaker 11: later in two thousand and fifteen, and it's really been
Speaker 11: a core part of our success and why we were
Speaker 11: able to invest in companies like Qualtrics in Utah, a
Speaker 11: Classian in Australia, in Romania and Bucharest UiPath, one of
Speaker 11: the most iconic companies to come out of Europe, companies
Speaker 11: like fresh Works in Chennai in India, and to construct
Speaker 11: a firm that things.
Speaker 2: Global from the get go.
Speaker 11: We sort of walk our walk and talk our talk,
Speaker 11: if you will, and help our companies and help our
Speaker 11: founders to become these category leaders. Wasn't easy, but I
Speaker 11: think it's really been quite unique and it's been core
Speaker 11: to everything we've achieved so far.
Speaker 4: The rapid pace of companies being founded and funds being
Speaker 4: raised in the AI context kind of set up this
Speaker 4: nice USA versus Europe discussion, Right, is there going to
Speaker 4: be a viable European maker builder of lms to take
Speaker 4: on the likes of open AI. You heard me mention
Speaker 4: alf Alfha now seeing a five hundred million dollar raise
Speaker 4: this morning. What do you see as being potential for
Speaker 4: European AI builders?
Speaker 2: Yeah, I know, it's a great question.
Speaker 11: What I'd say is that if you just take a
Speaker 11: pause and think back around AI, because AI is really,
Speaker 11: you know, the overnight revolution that's actually been going for decades.
Speaker 11: It's more generative AREI that's probably less than a year old.
Speaker 11: And when it comes to research, when it comes to citations,
Speaker 11: Europe's probably had sort of fifty percent more in terms
Speaker 11: of publications than the US. I mean, if you're going
Speaker 11: to do the US versus Europe. That said, I think
Speaker 11: a lot of the funding activity and a lot of
Speaker 11: the startup activity and even the incombing activity has been
Speaker 11: more in the US. But we're seeing a lot of
Speaker 11: promising companies and entrepreneurs over here, and the majority of
Speaker 11: the activity so far has been more in the infrastructure.
Speaker 11: The large language model space, if you will. But the
Speaker 11: Denovo the native applications if you will, that'll come in
Speaker 11: and really native to AI, it's really still early innings.
Speaker 11: So I think we're very much a little bit like
Speaker 11: what mobile was and if you think six or seven
Speaker 11: o eight when iOS and Android came out, but it
Speaker 11: took a while for the Denovo apps on mobile to
Speaker 11: really become big. And I think we'll see Europe play
Speaker 11: probably a bigger role in some of the more vertical AI.
Speaker 4: Applications Sonali As an aside, did you look at alif
Speaker 4: Alfa or even a Mistral, you know that made a
Speaker 4: debut with such a giant round earlier in the summer.
Speaker 2: Yeah.
Speaker 11: See, it's our job to, as you can imagine, to
Speaker 11: meet with all the great founders, and we tend to
Speaker 11: do this even when the founders haven't even started to
Speaker 11: become founders themselves. We sort of track the builders, if
Speaker 11: you will, as you called it. So, yes, I think,
Speaker 11: you know, we've spent time with all of the interesting
Speaker 11: companies in the AI space, and I think what I'd
Speaker 11: say is that generally there's so many flavors of how
Speaker 11: to think about these large language models. This infrastructure part
Speaker 11: of the stack, from data, sovereignty, from privacy, from language,
Speaker 11: from security. That there are a number of companies that
Speaker 11: are sort of trying to figure out which part open source,
Speaker 11: close source, which part of the box, if you will,
Speaker 11: or the part of the market that they own. So
Speaker 11: there's a number of these companies, and yeah, we spend
Speaker 11: time with all of them.
Speaker 4: The last time that I was in New York City
Speaker 4: was in that September period of the IPO windows suddenly
Speaker 4: opening up, and I was looking at your current portfolio
Speaker 4: and then the historic Excel portfolio. So many successes you
Speaker 4: know of companies that went public and built a legacy.
Speaker 4: What's next in the IPO market? What is the next
Speaker 4: name to your mind, particularly out of Europe to tap
Speaker 4: the public markets.
Speaker 2: Oh and I wish I knew.
Speaker 11: I don't have a crystal ball to figure out what
Speaker 11: is going to be nice, I will say, you know,
Speaker 11: from an investor, from an entrepreneur perspective, it is a
Speaker 11: bit of a confounding time time.
Speaker 2: There is this deglobalization.
Speaker 11: Everyone's trying to figure out what the next move is
Speaker 11: from the central banks. We have some serious geopolitical issues
Speaker 11: to wars, and so really thinking about what's going to
Speaker 11: make the IPO window, which feels standardive right now truly
Speaker 11: open isn't clear to anybody. I think the obvious answer
Speaker 11: would be a real bell Weather stock to go public. So,
Speaker 11: but time will tell. I think nobody's in a hurry.
Speaker 11: A lot of these companies have a lot of cash
Speaker 11: on their balance sheet, so everybody wants to make sure
Speaker 11: they have time to execute and really have that be successful,
Speaker 11: and so time will tell.
Speaker 4: One portfolio company currently is Monzo, and I think Bloomberg's
Speaker 4: listed Monso at least is a candidate for IPO at
Speaker 4: some point. What happens next for them?
Speaker 11: Mcmonzo is it's a special company. I mean from a
Speaker 11: standing start, it's what is it the seventh largest bank
Speaker 11: already in the UK. I think eight and a half
Speaker 11: million customers. I think one one in every three six
Speaker 11: people sorry in the UK have a Monso bank account,
Speaker 11: and most of those customers find Monso pretty organically, so
Speaker 11: it's got to a sizeable position. And I think, you know,
Speaker 11: there was a point that a lot of the fintech
Speaker 11: companies were out of favor, and I think Monzo really
Speaker 11: prevailed because why of their promise to really deliver a
Speaker 11: fabulous product with trust and safety to the consumers. So
Speaker 11: I think companies like that really have a lot of
Speaker 11: options open to them, and I think that will be
Speaker 11: the name of the game, where companies really want to
Speaker 11: control their own destiny. And that's the way we you know,
Speaker 11: that's really our language with our founders and on the
Speaker 11: bords is make sure you can control your own destiny
Speaker 11: to the extent possible.
Speaker 4: Sinari, I want to reflect on the next forty years
Speaker 4: hopefully for Excel and maybe the role that London will
Speaker 4: play in that. You know, that's city where I was born,
Speaker 4: It is my home for most of my life. Caroline
Speaker 4: as well. We're talking about London more and more outside
Speaker 4: of a more narrow scope of fintech. But as you
Speaker 4: look at the firm future, what role do you see
Speaker 4: that city playing in your portfolio strategy and where you're
Speaker 4: writing checks.
Speaker 11: Yeah, you know we're based in London, but we really
Speaker 11: cover a very vast footprint from the London office. I
Speaker 11: think at last COUMP we've invested in over sixty eight cities,
Speaker 11: more than twenty countries just in Europe and Monumn counting
Speaker 11: sort of outside of the European market.
Speaker 2: So London is an important base.
Speaker 11: I think it's probably the second most exciting place when
Speaker 11: it comes to deep tech AI talent, and there's spades
Speaker 11: of it and I count sort of Greater London in
Speaker 11: that too, and our ability to really spend time with
Speaker 11: the right founders in the region from the London office
Speaker 11: is going to be very important, and so that's how
Speaker 11: we really view it. In the UK is of course
Speaker 11: a big part of the venture capital scene. But as
Speaker 11: the principles and rewards of entrepreneurship really become even better understood,
Speaker 11: and as technology becomes pervasive, there are really going to
Speaker 11: be great founders coming from everywhere and this is the
Speaker 11: best place for us to be in order to travel
Speaker 11: and see them and spend.
Speaker 2: Time with them.
Speaker 4: Snarali de Riiker of Excel. Congratulations on forty years of
Speaker 4: a bench capital in Europe and beyond, and stick with
Speaker 4: us in the next forty Thank you very much. Okay.
Speaker 4: So Apple has not managed to snap out of a
Speaker 4: year long sales slump, and on a conference call with
Speaker 4: analyst last week, the company hitted at a holiday period
Speaker 4: that would not be stellar, maybe a little sluggish, It
Speaker 4: would mark potentially it's fifth straight quarter of sales declines
Speaker 4: in a row. So now Apple's in need of a
Speaker 4: new growth engine. Can the vision pro mixed reality headset
Speaker 4: for Phil batt Let's bring in Bloomberg's chief correspondent Mark German,
Speaker 4: who's been writing about this idea and power on. It
Speaker 4: was interesting on the call, right that the analysts ask
Speaker 4: questions about vision pro in how it's been received with developers,
Speaker 4: the early signs that they'll get when they start shipping it.
Speaker 4: But you've got a pretty clear thesis outlined in today's news.
Speaker 3: That.
Speaker 6: Yeah, it was interesting because going into the call, Wall
Speaker 6: Street and the breadth of vandalysts we cite were pretty
Speaker 6: adamant that Apple would grow about five percent in the
Speaker 6: holiday period, right, but then look on my instry of
Speaker 6: the company's CFO, he dropped this figurative, you know, this
Speaker 6: this big announcement saying that it would be similar. Right,
Speaker 6: the holiday quarter would come in similar to last year,
Speaker 6: which means, like you there a decline or no growth,
Speaker 6: so flat for the fifth quarter in a row. And
Speaker 6: so this is a pretty you know, interesting situation for
Speaker 6: Apple where they are making a ton of money, but
Speaker 6: they're not growing like they used to.
Speaker 3: And so Wall Street.
Speaker 6: And analysts and investors. They're looking for a new growth engine,
Speaker 6: and there's this strong potential for the Apple Vision Pro,
Speaker 6: this mixture that's to one day be that growth engine
Speaker 6: for the company.
Speaker 3: Right, it's a new.
Speaker 6: Category, but it's still very nascent, and at the get go,
Speaker 6: it's going to be very expensive. And when they're putting
Speaker 6: it on sale in their Apple retail source, it's going
Speaker 6: to be a very curative experience that requires appointments, it's
Speaker 6: going to require tryals sizing, and it's not, like kin
Speaker 6: Cook said, going to be a graund like experience, which
Speaker 6: means it's going to take a long time for them
Speaker 6: to gather numbers gather revenue on this device. So combined
Speaker 6: with that retail approach, combined with the price, this is
Speaker 6: going to start out very slow, and eventually I think
Speaker 6: they're going to need to switch more to an Apple
Speaker 6: Watch model where they're moving from a curated experience with
Speaker 6: appointments to something that is a bit more grab and go,
Speaker 6: let's say like a mac ipowder.
Speaker 4: I film even, well, it's interesting how they plan to
Speaker 4: sell it, but also what it is. Right, I remember
Speaker 4: being in Koubatino for the unveil Vision Pro You've written
Speaker 4: so much about this. It's a thirty five hundred dollars product,
Speaker 4: high end, but it's almost designed for developers, not a
Speaker 4: mass market. So what is the plan with Apple for
Speaker 4: a sort of more approachable, mainstream headset for a broader audience.
Speaker 6: Yeah, the first iteration of the product, like you said,
Speaker 6: is essentially a development device, right, This is a device
Speaker 6: that developers are going to build mixed reality vision os
Speaker 6: apps for and then eventually hope and pray that they
Speaker 6: come out with a down market version, something maybe in
Speaker 6: the one to two thousand dollars range that eventually, eventually,
Speaker 6: I say, maybe ten years from now, be a computer replacement.
Speaker 6: And the goal is to have that app ecosystem ready
Speaker 6: for when that day comes. And then the ultimate holy
Speaker 6: grail in this space, in the future of computing space
Speaker 6: with wearables, are lightweight augmented reality glasses. Now, if Apples
Speaker 6: are able to come out with well priced augmented reality
Speaker 6: glasses in five to ten years from now with a
Speaker 6: full blown app ecosystem, going to have a huge hit
Speaker 6: on their hands, potentially something that rivals the iPhone. But
Speaker 6: the only way to launch with that type of success,
Speaker 6: that type of interest in that type of market is
Speaker 6: consumer education and to build an app ecosystem. So the
Speaker 6: vision pro for at least the next few years is
Speaker 6: going to be about educating consumers about this mixed reality technology,
Speaker 6: how these applications work, and to get developers on board
Speaker 6: because of course, many of the apps written for this
Speaker 6: device will of course one day be compatible with other
Speaker 6: augmented reality had it sets from Apple.
Speaker 4: All right, Bloombog's chief correspondent for all things devices Apple, Markum,
Speaker 4: and I really recommend our audience world, why do subscribe
Speaker 4: to power on because it has all of the detail
Speaker 4: about present and future products coming out of Apple. Well,
Speaker 4: that does it for this edition of Bloomberg Technology. Thanks
Speaker 4: so much to everyone out there that's reading the news
Speaker 4: but also listening to the podcast wherever you get your podcasts,
Speaker 4: all of the Bloomberg platforms, but we're also putting it
Speaker 4: up on Apple, Spotify, and iHeart from New York City
Speaker 4: this week, all week long, this is Bloomberg Technology