February 13, 2025 • 42 mins
Bloomberg's Caroline Hyde and Jackie Davalos discuss Apple's plans to use Alibaba's AI tech for its iPhones in China while reports are said to indicate conversations with Baidu are still ongoing. And, we hear from Reddit's COO as shares fall after posting 4Q earnings that missed estimates. Plus, Elon Musk continues his feud with Sam Altman, saying he could drop his bid for OpenAI if it stops its for-profit structure.
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news from the heart of
where innovation, money and power collide in Silicon Valley and beyond.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2 (00:34):
Live from New York. Come Caroline Hyde and.
Speaker 3 (00:36):
I'm Jackie Devalas in San Francisco.
Speaker 4 (00:38):
This is Bloomberg Technology. Coming up.
Speaker 5 (00:40):
Apple's iPhones will use Ali Baba's AI technology or the
partnership help Apple revive iPhone sales in China. Plus Reddit
shares fool as user growth underwhelms. We talk with the
COO about Google's algorithm.
Speaker 2 (00:54):
And its in house AI and.
Speaker 5 (00:56):
The feud between Elon Musk and Open Ai.
Speaker 2 (00:58):
It continues with Musk saying he.
Speaker 5 (01:00):
Would drop his bid for the startup if it halts
its for profit restructuring. Drip feed News This coming as
reports that yes, Ali Baba is going to be lending
it's AI general to AI technology for Apple.
Speaker 2 (01:13):
Intelligence in China, crucial in terms.
Speaker 5 (01:15):
Of market share for this all important geography.
Speaker 2 (01:18):
But will it remain exclusive?
Speaker 5 (01:20):
There is so much to talk with Bloomberg's round Vastelica
about it, about the importance of China. But this is
Josi for was the chairman of Ali Baba, confirming previous
reporting out there that Apple is getting its first general
to AI partnership in China.
Speaker 6 (01:35):
Hey, thanks for having me, So this is a big development.
China is obviously a major market for Apple. I think
they got about seventeen percent of their revenue from the
Greater China region in their most recent fiscal year. They
have been seeing a little bit of struggle there in
terms of sales. They're seeing increased competition from companies like Huawei.
So the idea that they can get sort of really
strong AI features onto devices there in China, that has
(01:57):
seen as a real opportunity for them to kind of
prove their fortunes there and that would help with overall growth,
which is something that investors have been looking for for
quite a while.
Speaker 3 (02:06):
Talk to us about some of the mechanics behind the manufacturing.
I'm talking about the tariff risk. How are investors thinking
about this potential risk as it relates to Apple.
Speaker 6 (02:17):
So Apple's really in sort of the crosshairs here because
it does have such a major manufacturing hub out of
China that we have seen tariff levy I think was
tim percent tariffs China retaliated. It also has some kind
of probe looking at Apple app store policy. So there's
certainly a lot of questions here. We don't know how
long tariffs might be in place for. We don't know
if there's going to be an escalation. We don't know
(02:39):
if Apple might get some kind of exemption the way
it did during the first Trump term. So far, it
seems like people aren't seen too significant an impact to
earnings from this. But this is something that could clearly
escalate and become a much bigger issue very quickly.
Speaker 5 (02:52):
And certainly we've seen the ramifications on the stock price
from investigations coming from China from a regulatory perspective, and
certainly Germany also looking into it.
Speaker 2 (03:00):
On the day as well. Ryan point us forward.
Speaker 5 (03:03):
From how this baks into evaluation and Apple, as we say,
over the last five days, we're up two point seven percent.
Speaker 6 (03:09):
Yeah, recent performance has been pretty good.
Speaker 7 (03:11):
Overall.
Speaker 6 (03:12):
It has been an underperformer this year because of the
early concerns about how strong iPhone sixteen demand was, and
you know, the overall kind of geopolitical environments. You know,
the stock does have a pretty high multiple given the
fact that the growth is not what you're seeing in
some of the other mag seven names. But people do
consider it a pretty defensive and sort of safe haven
kind of company, just because it's cash flow is enormous.
(03:34):
It spends billions of dollars on buybacks. It hasn't been
planning a ton of capbex into AI, which has become
a concern for some of the other stocks. So there's
certainly still reasons to recommend it, you know, services growth.
You can kind of go down a list of issues
like that, but do you think overall, I mean, people
have been looking for a more pronounced growth inflection from
the company, and when you have all these concerns about
(03:55):
tariffs and China and so forth like that, that does
make that a little bit harder in the near term.
Speaker 3 (04:00):
Bloomberg's Ryan West delica, thanks for joining us. Meanwhile, shares
of Intel are rising and on track for its biggest
one week jump in twenty five years.
Speaker 4 (04:08):
This as a report from Baar says.
Speaker 3 (04:10):
That the company could be in talks to work with
a TSMC on a potential project for more. Bloomberg's Ian
King joins us now Ian Intel has had a turbulent
couple months. It's CEO being ousted. How much does Intel
need a project like this.
Speaker 8 (04:27):
I think in general, we've seen the stock go up
over the last few days. There's been a lot of speculation.
What investors want is something to happen from the outside
that could help Intel, because they've seen over the last
couple of years that it really hasn't been able to
change the direction of its fortunes. So, whether it's JD.
Van's talking in Europe about hey, we need to do
(04:48):
a made in America, whether it's speculation in Asia about
it potentially getting help from partner, from partners who are
currently competitors and less as are just looking for something,
you know, give me a sign, give me a spark.
Speaker 5 (05:00):
Talking of spark and signs coming at the moment from Apple,
I just want to return to some breaking news to
Tim Cook is indeed posting about the next member of
the Apple family coming on February the nineteenth. Throughout one
point two percent. Much has been reported about the latest
cheaper se revamp coming from our own Mark German previously,
but at the moment, all the statement coming from Tim
(05:21):
Cook is we are awaiting the newest member of the
family of Apple. And you go to the ex post
from Tim Cook, the CEO of that business.
Speaker 2 (05:29):
In sticking more with.
Speaker 5 (05:31):
What's occurring on the manufacturing side of things and what's happening.
Speaker 2 (05:35):
With Intel, we know that maybe they'll look at.
Speaker 5 (05:38):
Outsourcing manufacturing doing deals with TSMC, But more broadly, how
in line with this is what pat originally wanted or
how much of is a distinction from previous leadership.
Speaker 8 (05:48):
Yeah, I think it's we have to be careful here
to point to there being a lot of speculation. We
don't actually know the much is happening right now. What
we really need is big customers. If they get the
big customers with huge orders that give them a lot
of volume to fill those factories, then the plan is on.
Then what Gelsinger tried to put in place is actually
(06:09):
paying off. Until we see, you know, Apple or Nvidia
or somebody else like that putting lots and lots of
chips into Intel's factories, the plan is not really going anywhere.
Speaker 5 (06:22):
In King and all things Intel, which might say, has
been on quite the crescendo in the last three weeks
in terms of its share price. Let's give to Nooon
breaking News SpaceX. We understand in South Africa the talks
are stalling over tensions with Elon Musk and with President Trump,
SpaceX and South Africa. The negotiators intend to restart talks later.
This all about space X's adoption and its satellite use
(06:46):
in South Africa.
Speaker 2 (06:47):
Will have more on that as and when we get it.
Speaker 5 (06:48):
But coming up, we'll be joined by Reddit COO Gen
Wong to break down the company's earnings. That's coming next.
This is bloom meg Technology. Just look at Reddit right
(07:17):
now shares our dam that's after fourth quarter user growth
missed Wall Streets expectations that we're having in the worst days.
It's November, the twenty second Reddit itself saying user growth
was indeed impacted last quarter after Google made a change
to its algorithm that impacted search traffic. Let's begin. Reddit
COEO Gen Wong joins us now and just talk to
us about how this quarter is currently looking in terms
(07:41):
of the reaction to Google's overall algorithm change and how
you drive your own fortunes when it comes to the
use and adoption.
Speaker 2 (07:48):
Is staying with Reddit.
Speaker 9 (07:51):
Thanks for having me, Good morning. Q four was a
really strong quarter for us.
Speaker 10 (07:56):
We saw daily active users growth thirty nine percent ear year,
the revenue grow seventy one percent year. Every year so
I think in terms of growth, we're probably top of
the market in terms of both of those. Start to
find a company that's growing as fast for the things
that we control. In terms of making the product better,
making it easier, helping people find communities faster.
Speaker 9 (08:19):
We're really happy with our work.
Speaker 10 (08:20):
Our work is working, and that's been consistent over the
last four quarters, and there's a lot more there. We're
still early in that process. In late Q four we
did see that there were some changes in Google that
sort of came and went. We've seen recovery since then
and we're off to a really good start and the
work that we're doing again continues to bear fruit and
(08:42):
making Reddit more extensible. Reddit is an opportunity, as an
opportunity to address everybody. The whole world needs community and
has passions and interests and can be on Reddit. So
we make redit easier, more accessible, help people find their
communities faster. That's when it becomes extend incible to everybody
in the world. So our tam is really everybody. We're
(09:03):
just early in that journey, so we feel very good
about our roadmap and our opportunity.
Speaker 3 (09:08):
Jen Reddit has a licensing agreement with Google and in
the earnings call yesterday, the company called that relationship symbiotics.
So the faster that users can find Reddit on a
Google search, the more engaged they can be on your website,
and then in turn, the better data that Google is
able to glean. Have you had conversations with Google about
(09:29):
maybe cutting you some slack or at least giving you,
guys a heads up next time there's an algorithm.
Speaker 10 (09:33):
Change the way that Google work, you know, Google Google
the way the algorithm work is there proprietary work. The
conversations we've had are around obviously the Reddit data and
how that can be used for training and for in
their you know, search generative products. There's no question that
(09:56):
it's a symbiotic relationship in that. What happened when next year,
I think in searches demonstrates this. So Reddit has become
the sixth most search term in US in Google.
Speaker 9 (10:07):
I mean, that's incredible.
Speaker 10 (10:09):
That means people are intentionally searching for Reddit. They're typing
in a query what's the best backpack Reddit? Because they
are trying to navigate to the recommendations and the trove
of human intelligence on Reddit, and because Reddit has the
best answers on the internet, and Google is a place
where people go for broad based questions. It's a really
(10:30):
symbiotic relationship, and that helps reveal the corpus of information
that Reddit has to users who are searching the broad
based Internet. So in that sense, you know, it's been
a very fruitful partnership.
Speaker 4 (10:45):
But if it's getting harder for users.
Speaker 3 (10:47):
To find a Reddit link via Google Search, do you
see this kind of algorithm change or similar ones in
the future straining that relationship.
Speaker 10 (10:58):
We've been beneficiaries of the open Internet, and again, when
people are intentionally navigating to Reddit, that tells us that
they are trying to access that information on red the recommendations,
the advice. So I think we're really important because we're
actually what users are seeking, right, they're actively searching for us.
Speaker 9 (11:21):
The way we think about it is this whole process of.
Speaker 10 (11:23):
Data licensing is really I think revealed how important reddits
content is, and we also have an opportunity to build
our own products around our corpus of information. You see
this with us testing something called Reddit Answers, which is
a chat based search that reveals recommendations on Reddit.
Speaker 9 (11:41):
Again what's the best backpack.
Speaker 10 (11:42):
But it gives you a search result that is specific
to Reddit that shows answers and opinions across every subreddit
a really different experience from broad based internet search, and
I think we have an opportunity to continue to build
our own products around our corpus of information in addition
to being in sort of broad based search on the Internet.
Speaker 5 (12:05):
So speak to those analysts or investors with some anxiety
about the dependence on Google. How much is Reddit ass
boosting the engagement that you control.
Speaker 10 (12:15):
Reddit answers is early right now, it's it's in a
beta test, But we like what we're seeing there.
Speaker 9 (12:20):
I think the thesis of people wanting.
Speaker 10 (12:23):
To come and be able to search Reddit and see
what is happening across opinions across all communities, that thesis,
I think.
Speaker 9 (12:30):
Is born out, and so we're excited about what we
see there.
Speaker 10 (12:33):
We are investing in search search of Reddit, and there's
an opportunity for us that will continue to be building out.
When I think about the opportunity here, it's it's it's enormous, right,
I mean recommendations and advice. We have twenty years of
conversations on every topic on the planet, and so it's
(12:56):
core to our mission to empower communities and make their
knowledge accessible both to all.
Speaker 3 (13:02):
That's red at COO. Jen Wong, thanks so much for
joining us. We also caught up with the CEO of
Lyft yesterday on the heels of the company's earnings. We
discussed his outlook on autonomous vehicles and competition with the
likes of Weaimo, and he says Lift's market share in
San Francisco has not.
Speaker 4 (13:18):
Moved to a listen.
Speaker 11 (13:21):
In San Francisco, it's flat.
Speaker 12 (13:23):
Interesting is even as they increase in San Francisco, our
share has been flat now, So that suggests that the
market is expanding, maybe suggests that they're taking some share from.
Speaker 11 (13:32):
The other guys. I don't know.
Speaker 12 (13:33):
In Phoenix, we're actually growing faster than ever, so we
grow about fifteen percent nationwide in Phoenix. It's a little
north of that. So that also even and Wyn was
quite active there. So it's a great profit. It's great technology,
but I think a lot of people come and they
use it, and they like it, and then they come
back to traditional ride share and.
Speaker 11 (13:49):
Use this both.
Speaker 3 (13:49):
Your competitor, Uber said it would quote hopefully partner with
Tesla's on autonomous vehicles. They said that last year has
lived had any conversations with Elon Musk or Tesla about
a potential partnership.
Speaker 12 (14:00):
You know, I don't talk about individual things like that.
I think, you know, there's this sort of danger of
kind of trying to win the press release and announcement war,
and we try to win the service war. That's kind
of our thing. So I want to say not. I
think it's I think that'll be all kinds of partnerships,
I really do, and the ones that happen, we'll kind of.
Speaker 11 (14:15):
Have to see.
Speaker 3 (14:16):
The incoming Transportation Secretary Sean Duffy has proposed that a
federal level law should kind of supersede this patchwork of
state by state rules for autonomous vehicles. Do you think
this new administration would help lift's ambitions in autonomous vehicles?
Speaker 11 (14:32):
I do, I do.
Speaker 4 (14:33):
Yeah.
Speaker 11 (14:34):
The safe by state thing is really hard.
Speaker 12 (14:35):
I mean, it's you understand, you want to do some
local experimentation in different states are different, they have different cultures,
they have different geographies, different weather and.
Speaker 11 (14:43):
So on and so forth.
Speaker 12 (14:44):
But an overall sort of safety, you know, kind of
framework and general autonomous vehicle framework I think would be
very helpful in helping this industry move a little bit
faster and frankly, keep up with the way the rest.
Speaker 11 (14:54):
Of the world is going.
Speaker 3 (14:55):
That was Lift CEO David Risher. We're also watching shares
of Coinbase. Shares are up over six percent because it's
a key beneficiary of President Trump's promise to usher in
a new era for the cryptospace.
Speaker 4 (15:08):
The exchange is.
Speaker 3 (15:09):
Reporting fourth quarter results after the belt today, and Wall
Street is expecting to see a boost in trading volumes
on the back of bitcoins gains.
Speaker 5 (15:24):
Blue Origin, Jeff Bezos' rocket company, is cutting ten percent
of its workforce to cut costs, to trim manager ranks,
and to focus on ramping.
Speaker 2 (15:32):
Up rocket launches.
Speaker 5 (15:33):
That the surprise round of layoffs comes about a month
after Blue Origin debuted its flagship New Glen Rocket Swing
years of delays and development setbacks.
Speaker 3 (15:41):
Jackie startup K two Space has raised one hundred and
ten million dollars in a series speed funding ground led
by light Speed Ventures and Ultimeter Capital. The company, created
by former SpaceX engineers, is developing.
Speaker 4 (15:56):
A platform to launch multiple.
Speaker 3 (15:58):
Satellites into orbit at higher speed and lower costs than
currently available. Joining us now is K two Space CEO
Karen Kundred. Thank you so much for joining us. Walk
us through about what your platform actually does. It's essentially
almost like a bus for satellites. How are you able
to do this at a cheaper price?
Speaker 13 (16:15):
So we're building a platform that is ten times more
powerful than existing platforms.
Speaker 11 (16:20):
Today.
Speaker 13 (16:21):
When it comes to applications in space, almost every application
ties back to power. So my brother and I kind
of started the company on the contrarian bet.
Speaker 11 (16:28):
We decided to go the opposite direction.
Speaker 13 (16:29):
Of the market that was going smaller and lower power
with their satellites and redesign the satellite. From the reaction,
weill up to build a platform that is higher power,
higher capability, while still being able to multi manifest into
launch vehicles to do constellations.
Speaker 5 (16:43):
The market has come to your contrariant bet because SpaceX
is starship just the innovation in terms of bigger and
bigger rockets being able to pay take these bigger and
bigger payloads. I'm interested in ultimately what the manufacturing therefore
is needed in the United States because you're vertically integrated exactly.
Speaker 13 (17:01):
Yeah, all launch players like SpaceX and Blue Origin are
moving the market larger. We kind of equate it to
we're moving from an era of launch constraint in space
to launch abundance. It's almost as if we're operating in
the age of dial up internet and moving to broadband,
and our company was started under this premise of like
what happens at this new age of broadband where we
can do things differently. For us, it's vertical integration, it's
(17:24):
rebuilding the satellite. We're building about seventy five percent of
the satellite in the house, and that allows us to
do a lot of unique things to optimize the platform
for the launch future that we see coming, not necessarily
the launch vehicles of the past.
Speaker 3 (17:37):
You've already brought in millions of dollars worth of contracts,
both coming from the public sector but also commercial contracts.
We've heard a lot about the DoD getting inside Silicon
Valley trying to scoop up some of those startup ideas.
Speaker 4 (17:51):
But talk to us about your commercial.
Speaker 3 (17:53):
Partnerships, because there's a lot of space companies out there
right now.
Speaker 11 (17:56):
Yeah.
Speaker 13 (17:56):
The interesting thing about going higher power, when you tex
the amount of power, you also dramatically increase the throughput
per satellite. So our commercial customers are mainly commercial operators
that are beaming data down from space that see the
potential when you have ten times the amount of power
to fundamentally change the unit economics of their business. Higher
power means more throughput while maintaining the low cost means
(18:17):
that they're actually able to deploy even more satellites with
even more capacity on orbit in a way they never
could before.
Speaker 3 (18:23):
So are these like SpaceX, Blue Origin those kind of players.
Speaker 13 (18:27):
SpaceX and Blue Origin are two of the players, but
there's a bunch of others out there as well that
are also thinking about how to better operate their constellations
on orbit.
Speaker 5 (18:36):
What's so interesting is the government side of things as well, Karen,
And you've got John Plum, of course, who used to
be in government, former Assistance Sectuary of Defense for Space
policy in house now. But how is it liaising with
the current administration that we've just had breaking news that
a deal with Starling over in South Africa is in
jeopardy because of relationships between Elon Musk and President Trump.
Speaker 2 (18:57):
How are you finding relationships?
Speaker 13 (19:00):
Yeah, we were pretty excited to bring John on the team.
He's the former Assistant Secretary of Defense for space policy.
When we first briefed him, he kind of saw what
was possible with this completely new platform at the end
of the day, we believe that if we build a
platform that is as differentiated as what we claim it
to be, our work with the national security and commercial
customers will come regardless of the political environment. What I
(19:22):
will say is that the existing administration has clearly shown
that they believe space is the next frontier, an important
place to have investment, and we're pretty excited to continue
to service our national security customers.
Speaker 3 (19:34):
You know news today that Blue Origin is cutting ten
percent of its workforce. Are you worried at all that
that signals a broader slow down in the space in
any way?
Speaker 13 (19:42):
Yeah, it's you know, we have a lot of friends
that work over there. We're pretty sad to see hear
about that, and you know, we'll be trying to hire
ourselves people that may be leading from that company. I
think layoffs and investment are always a part of the
national natural capital cycle when it comes to any business.
You don't like to see it, but sometimes that happens,
and so I don't think it's a nicative of a
(20:02):
broader trend. I mean, we raised we were preempted on
our Series A thirteen months ago. We were preempted again
on our Series B two months ago, we've raised about
one hundred and eighty million dollars in venture capital.
Speaker 11 (20:13):
Today we're not seeing that.
Speaker 13 (20:15):
What we see is if we're truly building something that's different,
with the differentiated team that's going after it, the capital
is there to fund our vision.
Speaker 5 (20:21):
Okay, so potentially hiring up some of that talent that
has to be pushed out.
Speaker 2 (20:26):
Talk about next steps?
Speaker 5 (20:27):
Where next do we see K two space? You've just
this month, well I think it was in January in fact,
flying several technology demonstrations using SpaceX.
Speaker 2 (20:36):
What's the next key marker?
Speaker 13 (20:39):
Yeah, so we just finished up our first successful in
space mission, so, as we like to say, we're now
a real space company.
Speaker 11 (20:45):
And yeah, we were pretty excited to.
Speaker 13 (20:47):
Have that because, as I said, we're kind of resetting
the entire supply chain, so we had to fly a
bunch of the components that we built from scratch to
start buying down risk on the full platform.
Speaker 11 (20:55):
We're now shifting gears.
Speaker 13 (20:56):
We're moving towards the full satellite platform mission that's called Gravitas,
that's launching fund of twenty twenty six. We want a
thirty million dollars contract back in December from the Department
of Defense to fly a number of national security payloads,
and our goals is to basically showcase this differentiated platform
and buy down the entire risk of the platform. We're
going to fly to the harshest environments. We're going to
(21:17):
test the platform. We're going to show what happens when
you have twenty kilo lots of power, and we're really
going to prove out this completely new capability to our customer.
Speaker 5 (21:24):
Set Leo moo Leeos Karen Kunjam, We thank you so much,
Ceo KTI Space, It's great having time with you. Welcome
back to LUMAT Technology and Caroline Hyder.
Speaker 3 (21:41):
New York, and I'm Jackie Devalas in San Francisco.
Speaker 5 (21:44):
Quick check on these markets and in fact single names, Jackie,
there are still earnings coming thick and fast, the good,
the bad, the ugly.
Speaker 2 (21:50):
I'm looking at.
Speaker 5 (21:51):
App Lovin up twenty eight percent, not forty percent growth
in terms of their previous year revenue, but they're also
selling off their game development unit for nine hundred million
dollars to private company.
Speaker 2 (22:01):
The investors love it.
Speaker 5 (22:02):
We're up twenty eight percent, trade desk down thirty one percent,
a rare miss for the advertising focused business. And this is,
as Fundamental said, they disappointed themselves in terms of their
own growth in.
Speaker 2 (22:13):
The previous years.
Speaker 5 (22:14):
So investors really trying to take on board what this
means in terms of sentiment for advertising and trade desk.
Speaker 2 (22:19):
More broadly, Data Dog also under.
Speaker 5 (22:20):
Pressure up eight percent, down eight percent. This is they too,
see an underwhelming forecast in particular, and really trying to
see from an analyst and investment perspective, this is just
conservative if actually the cloud trend is going to be
good for them in the long term, and indeed some
of the generative AI adoption for the software company move
on to generative AI story of the day, Apple because finally.
Speaker 2 (22:42):
We'll get some Apple intelligence into China.
Speaker 5 (22:44):
Because it seems though Joe Sai over of course, that
Ali Barber is confirming that, yes, the reports are true.
Speaker 2 (22:49):
We are going to be teaming up with Apple.
Speaker 5 (22:51):
We're going to be giving them access to our generative
AI models, and you're going to get Apple intelligence in China.
The first of these deals when it remained exclusive for long, Jackie,
what you.
Speaker 3 (23:00):
Got Elon Musk's bid to buy open Ai is being
used against the tech billionaire. Lawyers for Lawyers for Sam
Altman argue that the offer ultimately contradicts Musk's arguments that
open Ai cannot be transferred away for private gain. In
response to open eyes filing, Tesla CEO told the court
(23:20):
he'd drop his bid for open Ai if the company
halts it's restructuring for more. Bloomberg's Rachel Metz joins us. Now, Rachel,
does this feud risk slowing down Open Eye's progress?
Speaker 14 (23:34):
That is the possibility, at least as far as the
progress toward the restructuring. It certainly puts more attention on
what's happening there, and they're in the middle of what
is no matter what going to be a submen lengthy process.
And it certainly, you know, with the court battle of
that open Ai an Eland must have, this puts.
Speaker 9 (23:52):
Like one more It's like one more way to come
up the works.
Speaker 5 (23:55):
And I think we've got to remember the context, the
complex context to all of this. Fifteen Elong Sam other
founders make a not for profit twenty nineteen. It becomes
in part a for profit with a cap for profit
that the nonprofit controls. And now well that might reverse
as to who controls whom.
Speaker 14 (24:14):
It's very complicated, and you can see how that structure
itself also makes it hard to even understand if you
are putting in a bid for this for the startup
portion of the company, and that's in its assets, like
what exactly are you buying?
Speaker 9 (24:29):
How much should it be valued at?
Speaker 14 (24:31):
So, yeah, it is overall just a very complicated situation.
And then if you put in a feud there, yeah,
you're making You're making things ultra complicated.
Speaker 5 (24:40):
Wow, the media and spectators are here for it, Rachel Metz.
We appreciate your time and giving us the context. Meanwhile,
Adobe sticking with generator of AI is a mean to
convince skeptical investors that it can compete with AI startups
such as open Ai. The company introduced a new product
that charges around fifty cents per AI generated video now.
It also launched new subscriptions for its fly ai models.
Speaker 2 (25:01):
For more.
Speaker 5 (25:01):
We joined by Blue Merg's Brodie Ford. Interesting that we
get the price point here.
Speaker 15 (25:05):
Absolutely so Adobe, it's really existential for them in the
pre AI era, if you needed to edit some photos
and videos, you needed Adobe. The big question for the
last two years has been once generative AI becomes more commonplace,
do you still need Adobe? And it seems investors change
their mind every six months, and so today what is
so interesting is that we are getting you know, it's
(25:27):
going to be about fifty cents a pop to make
AI videos. That's pretty competitive with some of the startup rivals,
which is meaningful because the startup rivals don't have to
report every quarter, they can eat some costs a little longer.
So it's interesting to see them price what I would
think as somewhat aggressively.
Speaker 3 (25:41):
Here, Bertie, let's talk about the product itself. How does
it compare with what's already on the market, because open
Ai and even Runway also have competing products.
Speaker 15 (25:51):
I thought it was pretty cool, right, and I tried
it out yesterday and I found it to be a
pretty effective product that worked well. I mean, and what
Adobe has always said is not that we are going
to have the number one best model visually, but that
we're going to have really great controls. You're going to
be able to integrate it with the software you already use,
You're going to keep it in the ecosystem in general,
especially for enterprises, they don't want to have a bunch
(26:13):
of bespoke models coming in with potential security risks, and
so ADOBEA has really tried to make sure that it
integrates well into existing environments. And you know, I was
impressed with some of those manual tools and trying get out.
Speaker 5 (26:25):
Yesterday, Body Ford across the Adobe News.
Speaker 11 (26:29):
We appreciate it.
Speaker 4 (26:29):
Thank you.
Speaker 2 (26:30):
Let's bring you some macro news. Government news here. Robert F.
Speaker 5 (26:34):
Kennedy Junior has indeed been confirmed as a new head
of the US Department of Health and Human Services. Is
approved with a fifty two to forty eight vote after
pretty tense confirmation hearings. And we'll now of course have
influence of the FDA, the CDC, and the federal insurance programs.
(26:56):
Morgan Stanley boosting the latest debt offering of.
Speaker 2 (26:59):
Elon musk X. Now the bank will.
Speaker 5 (27:02):
Upsize it's offering from the market to three billion dollars
to four point seven billion dollars or due to strong
investor demand.
Speaker 2 (27:09):
Jackie.
Speaker 3 (27:10):
Here's what some of Bloomberg's TV guests had to say
about Deep Seek at the Paris AI summit taking place
earlier this week.
Speaker 6 (27:18):
I feel so confident about our research shroadmap and also
our product droadmap.
Speaker 11 (27:21):
That you know, Deep Seak will do whatever Deep Seak's
going to do.
Speaker 16 (27:24):
Other people do whatever they're going to do and we're
just going to try to like build.
Speaker 11 (27:27):
The best technology we can and get into people's hands.
Speaker 7 (27:30):
It's a very impressive model, or very impressive piece of work.
I think the team is probably the best team that
I've seen come out of China. So that said, I
think a lot of the claims are exaggerated and a
little bit misleading.
Speaker 3 (27:41):
A lot of the key things from deep Seak are
reducing the cost of innovation, but also raising this question
of data control.
Speaker 17 (27:50):
If you have potentially mutal strained resources, you can make
a better job then if you have your men's resources
and stop thinking about what to do efficiently.
Speaker 3 (27:57):
I think there's been a lot of excitement, but we'll
have to see if it material. Let's get to the
infrastructure question in the age of deep Seek with today's
VC Spotlight with Angene mitta general partner at Andresen Horowitz
on Jenay. Where does this leave the conversation around how
much infrastructure we actually need? What were you hearing on
the sidelines of the Pear Summit.
Speaker 18 (28:18):
I heard that we are in the era of infrastructure independence. Basically,
I think most large nation state leaders have realized that
modern AI models have risen to the level of general
purpose technologies.
Speaker 11 (28:30):
The history of.
Speaker 18 (28:30):
Humanity, We've had maybe twenty twenty two of these, electricity,
the printing press, and when that happens, leaders start realizing
that that technology becomes critical.
Speaker 11 (28:40):
To national progress.
Speaker 18 (28:41):
And so that's what I heard from President Macron and
Prime Minister Modi. The summit was co hosted by France
and India, and I also heard from JD. Vance at
the summit that the United States believes that now staying
at the frontier of AI infrastructure and making sure that
open source is competitive. American open source is competitive, Allied
(29:01):
open sources competitive with the best models coming out of
any country, including China.
Speaker 3 (29:05):
Well, speaking of China, when we have the biggest players,
China and the US with kind of different values competing
against each other. You've talked about what you call joint
ventures between nations that perhaps don't have the resources on
their own to compete in AI.
Speaker 4 (29:20):
Talk to us about that.
Speaker 18 (29:21):
Yeah, So one of the atomic units of AI is
the data center, right, because if you sort of look
at the history or the ingredients of how we got
the current deep learning wave, there's really three or four
of them. There's compute, there's data, there's algorithms, and there's regulation,
and so when it comes to compute, the idea is
that there are only some regions that have enough compute
(29:45):
and access to the power that's cost competitive to stay
at the frontier. I call these hypercenters. We clearly have
at least two hyper centers now in the world today.
We've got America and we've got China, and I think
every other major nation is now hitting a reckoning point
where they're trying to figure out do they build, do
they buy, or do they partner? And so I think
I'm quite bullish on the US and her allies teaming
(30:05):
up across what we call the infrastructure stack. Right, so
when you at the lowest level, you've got chips, and
then you get into models, and then you've got applications,
And I think it's going to be much more likely
that countries that aren't hyper centers today pick which hyper
center they matches their value system the most, and then
they work on joint mentors across the stack, because I
(30:28):
think it's it's quite unlikely that people reinvent the chip
stack for them. They're much more likely to partner with
a country that does match their value system and I
think clearly in France, America, France and India we're teaming up.
Speaker 2 (30:41):
You're on mis Trile's board.
Speaker 5 (30:42):
We were hearing from after a little bit ago CEO
of Miss Trial and so as France got it right now,
is that going to become a center in some way
they're committing to their own infrastructure build out or they
ultimately have to depend on the US at least CHIPS
for example.
Speaker 18 (30:58):
So the zeitgeist has definitely changed. I think from the
last two summits, you know, the first that was in
Seoul and the last one which was in Bletchley Park
in the UK, the overarching theme was one of pessimism.
You know, AI is really risky, We've got to think
about the downside. And instead, what I heard this time
from leaders across the EU, by the way, not just France,
(31:18):
was the idea of optimism that AI actually can unlock
massive growth for Europe and for America. And I think
that France is in the middle of figuring out how
to accelerate its infrastructure. I think they have a huge
headstart when it comes to nucleared option, but when it
comes to data center construction, they're clearly behind the United States,
and they're happy to accelerate permitting and construction, and at
(31:40):
the same time they're happy to work with American chip
companies like Nvidia to actually rack and stack frontier chips
in these data centers. So I think you're going to
see over the long term Europe start to accelerate. But
in the short term, I think they're going to partner
with folks like America.
Speaker 5 (31:54):
And the administration is cool with that because you have
close proximity to the administration with A sixteen and Z
and at the same time doesn't see relations are at
their highest moment right now.
Speaker 18 (32:05):
Well, look, the best thing about this administration is they
share everything very publicly. I think JD was very clear
in his speech at in Europe that we're putting America
first and we will partner and help our allies too.
And you know, NATO is a huge priority for America,
and so I think we'll just continue seeing more investments
in NATO alliances.
Speaker 3 (32:22):
And Jason Horowitz was an early investor in on open AI,
and you're also on the board of Mistral. I'm just
curious what do you make of this feud between elon
Musk and open AI. Does it have broader implications for
the progress for other players in the space.
Speaker 18 (32:37):
Definitely, you know, ultimately where the frontier goes has implications
for all of us. But I think the important thing
to focus on is that, you know, just a year ago,
there were lots of folks who are confidently testifying in
front of Congress that America was so far ahead of
China that China could never catch up. And I think
what we're seeing is one the gap between.
Speaker 11 (32:58):
Open source and closed source has narrowed.
Speaker 18 (33:01):
That's something those of us in the open source community
have been paying attention have known for a while, but
more importantly that the gap between America and China has
narrowed as well. It's incredibly fast. You know, one, which
is one of the most cutting edge models from open Ei,
came out on December fifth, and barely a month and
a half later is when deep Scar one came out
January twenty fifth, and it's comparable. And so I think
(33:21):
the more important dynamic to pay attention to is that
that gap has closed, especially between America and any adversarial
nations that aren't in our alliances like NATO.
Speaker 3 (33:31):
What about Elon Musk's influence in Washington, do you think
that could have broader implications for other AI players in
the space.
Speaker 18 (33:39):
Oh absolutely, you know, I think Elon is an important voice.
But I think the reality is that we are reaching
a state of disequilibrium in AI infrastructure where a lot
of basic assumptions that people had taken for granted are
being revisited, like the gap narrowing bit in open and
(34:00):
closed between America and other countries. And so I think
there are a number of voices, especially in the open
source community obviously, you know, you just played a great
clip from Arthur Mensh, who was.
Speaker 11 (34:09):
The CEO of Mistral. I think there are other.
Speaker 18 (34:12):
Important voices like Jon Stoyka, who's a professor at UC
Berkeley who has been leading an effort called ELMSIS that
works on AI model evaluations. And I think those kinds
of voices are also becoming much more important to nation
state leaders. So I'm just really glad that at the
highest levels frontier AI and especially open source HEREA is
getting a lot of attention, Tony.
Speaker 5 (34:29):
It's getting a lot of politicization as well.
Speaker 2 (34:33):
And how comfortable and uncomfortable does that make you know?
Speaker 5 (34:35):
I've sat down with David Ulovitch a couple of weeks
ago we were talking about American dynamism within this new administration. Then,
of course there's a relatively politicized hire rightly along wrongly
whether it was politicized of course, mister Penny becoming a
deal partner. Of course, mister Penny, twenty six year old
was well known for having had an incident on the
subway here in New York and ultimately led to the
(34:57):
death as someone who's homeless.
Speaker 2 (34:58):
And there was a read on that higher. How are
you feeling.
Speaker 5 (35:01):
About the cultural impact and the perspective of the culture
at a sixteen Z this has.
Speaker 11 (35:07):
Yeah, look taking a step back.
Speaker 18 (35:09):
I think one of the things that's always said a
sixteen z apart is just how strongly the firm believes
in its values, right, and so in the case of
open source AI, for example, I think the firm is
taken a very clear position that.
Speaker 11 (35:20):
We believe open source.
Speaker 18 (35:21):
The history of computing infrastructure is shown that open source
is critical to unlocking massive amounts of productivity for humanity
and for society. You know, when you look at storage, networking, compute,
and so on. I think a lot of the productivity
we've seen from software comes from a value system and
a philosophy and a belief that democratizing access to the
best technology, put in control of that technology in the
(35:42):
hands of the biggest companies and organizations is what pushes
technology forward.
Speaker 11 (35:47):
And so you know, while I'm not.
Speaker 18 (35:49):
An expert on American dynamism, and I'm sure you can
get better opinions from my partner David on that, I
think the more important thing to notice is that the
firm just stands by its values and its philosophy is
very aggressively.
Speaker 5 (36:01):
Thanks for articulating that. As NITA, it's great to have
some time with you on the future of AI and
regulation and throughout General partner Andrewsen and Horowitz Jackie.
Speaker 3 (36:11):
Coming up by Now pay Later firm Klarna has added
to JP Morgan's payment platform. Clarna CEO joined us to
discuss what it means for the startups future.
Speaker 4 (36:20):
This is Bloomberg.
Speaker 5 (36:35):
Robin Hood reported revenue that more than doubled as the
online trading firm was buoyed by crypto market transactions around
the US presidential election. Here's what CEO just had to
say on Bloomberg's open interest.
Speaker 17 (36:45):
They can listen a lot of people focus on crypto
and we're certainly going to be in a more innovation
friendly environment in crypto. I think that's going to be
a tailwind for our business as one of the few
scaled players in both crypto and traditional financial assets.
Speaker 3 (37:04):
Buy now, pay later provider Klarna has been added to
JP Morgan's payment platform. The Swedish spin tech company has
been expanding partnership deals in recent months, and it's targeting
a USIPO later this year. The company CEO Sebastian Schimankowski
joins US. Now, Okay, let's talk about this partnership because
it's a major US bank, and I want you to
(37:25):
quantify the upside of this for for US. How much
of a boost in revenue does this mean for Klarna?
Speaker 16 (37:33):
Well, you know, time will tell, but I mean, obviously
from our perspective, JP Morgan is one of the you know,
it is probably the largest payments company in the world.
They actually do two trillion dollars worth of volume, and
so for Klona that does one hundred billion dollar on
an annual basis. You know, even if we if we're
super successful with them and can get five to ten
percent of that volume on the time, that's obviously a
(37:55):
massive opportunity so we'll find out. It's always you know,
big orkanship like this. You announce them and then it
takes some times because there are systems, integrations, promotions and
stuff like that. But we're very, very excited about it
and super proud of the fact that Tip Morgan decided
to work with us.
Speaker 5 (38:10):
But they might decide to work with other by now
high later players.
Speaker 2 (38:14):
Is that an issue the competition?
Speaker 16 (38:18):
No, I mean I think, look, they work with both Visa,
MasterCard and Amex, and I think like the next generation
of companies that you see on the screen here, they
are kind of the next generation. We think of ourselves
as a third party network, and I think there will
obviously be others as well, so there will be others,
but we're very happy to be first to announce this
partnership with them.
Speaker 5 (38:37):
And let's talk about that third party focus and these partnerships, Sebastian,
because I know you can't talk too much about an IPO.
You've got a lot of investors to convince of the
ultimate valuation of your company. When you're signing up merchants
but not having a direct relationship, just tell us about
the value that that has.
Speaker 16 (38:53):
No, for sure, I mean Klana have historically signed up
merchants directly, and that's brought us to about six hundred
thousand versions. Then took a closer look at like, I mean,
maybe the most successful expansion of a third party network
was Amis in the last two three decades, which went
from you know, being something you only used at restaurants
and hotels to being, you know, something you can use everywhere.
And so it's all about acceptance points. And we realize
(39:14):
that that's not going to happen by our own machine.
That can only happen to these amazing partnerships with Stripe
and the Addings of the world and the world Pace
and the Jping Mormons of the world and so forth.
So so we're super happy about this. It gives us,
you know, access to millions and millions of immersions to
make Klana acceptable. I mean in the US, still a
lot of people that associate us primarily with binapulator, but
like thirty percent, thirty percent of our volume is paying
(39:36):
fold the full amount.
Speaker 11 (39:38):
We offer all types of payment forms.
Speaker 16 (39:40):
So we think about ourselves as a third party network,
and Visa Mascot and the others need some competition.
Speaker 3 (39:46):
Let's stay in the US for a minute Sebastian because
here the Consumer Financial Protection Bureau its features in question.
Now that it's kind of come within striking distance of
Elon musk Stoge, is this a good thing for Klarina?
Speaker 16 (40:01):
Well, I mean, look, I think we are based in Europe,
where there's very tough regulation, much tougher in any ways.
I mean, it was actually funny the only thing Trump
said that was for more regulation was to cut credit
card interest rate fees, which to me kind of make
sense because you know, a lot of markets we operate
in Europe, you will see like max interest rate card
(40:22):
can be like at sixteen percent or eighteen percent, right,
while in US is very very different. So I think
you could expect from this administration to go quite some
tough challenges to the banks. But I think the best
way is going to be more competition, and to some degree,
you know, less regulation can help to accelerate more competition
and to go after those success profits that we've seen
(40:44):
in the banking industry. So I think that the you know,
we are have always operated according to regulatory requirements, but
also in addition to that, we have always said that,
like the ethical standards are extremely important for us and
to make sure that we provide services that are priced
reasonably for consumers, that we don't charge too high interest
or too high fees and so forth, and that's going
(41:06):
to continue being an objective for us, either CFPB is
present or not.
Speaker 3 (41:12):
All right, Well, real quickly, Sebastian, what about crypto You
called it a decentralized Ponzi scheme in twenty twenty two.
Speaker 4 (41:18):
Has that changed? Is Karna planning?
Speaker 8 (41:20):
Yeah?
Speaker 4 (41:20):
Please?
Speaker 11 (41:21):
I was happy you brought that up.
Speaker 16 (41:23):
Well, I actually this this weekend after thanks to my
board member Andrew from Sequoia, I met with a few
very interesting crypto companies and after listening to them and
what's happening with crypto, stable coins, bitcoins, I did a
small tweet this weekend that said that like, okay, I
give up, it's time to explore crypto for Klana. And
(41:44):
I thought that, like everyone would be just sighing and
thinking it was the most boring news ever because it
feels like we're the last large fintech in the world
to say that. But I had over a million views,
so people are super engaged. The whole community open up
and I got like one thousands ideas of what we're
going to do so, I'm excited about that.
Speaker 11 (41:59):
Now happy you know sometimes you're wrong.
Speaker 2 (42:02):
Come back and talk with AI with us as well.
Speaker 5 (42:04):
Soon we've run out of time, plan to CEO Sebastian
showing Kowski.
Speaker 2 (42:07):
Thanks so much for the time.
Speaker 4 (42:08):
Now.
Speaker 5 (42:08):
That does it for this edition of Bloomberg Technology, Jackie,
don't forget your audience can go and check.
Speaker 4 (42:13):
Out our podcast.
Speaker 5 (42:13):
You can find on the terminal as well as online
on Apple, Spotify.
Speaker 2 (42:16):
And iHeart. This is Bloomberg Technology.
Bloomberg Audio Studios, podcasts, radio news from the heart of
where innovation, money and power collide in Silicon Valley and beyond.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2 (00:34):
Live from New York. Come Caroline Hyde and.
Speaker 3 (00:36):
I'm Jackie Devalas in San Francisco.
Speaker 4 (00:38):
This is Bloomberg Technology. Coming up.
Speaker 5 (00:40):
Apple's iPhones will use Ali Baba's AI technology or the
partnership help Apple revive iPhone sales in China. Plus Reddit
shares fool as user growth underwhelms. We talk with the
COO about Google's algorithm.
Speaker 2 (00:54):
And its in house AI and.
Speaker 5 (00:56):
The feud between Elon Musk and Open Ai.
Speaker 2 (00:58):
It continues with Musk saying he.
Speaker 5 (01:00):
Would drop his bid for the startup if it halts
its for profit restructuring. Drip feed News This coming as
reports that yes, Ali Baba is going to be lending
it's AI general to AI technology for Apple.
Speaker 2 (01:13):
Intelligence in China, crucial in terms.
Speaker 5 (01:15):
Of market share for this all important geography.
Speaker 2 (01:18):
But will it remain exclusive?
Speaker 5 (01:20):
There is so much to talk with Bloomberg's round Vastelica
about it, about the importance of China. But this is
Josi for was the chairman of Ali Baba, confirming previous
reporting out there that Apple is getting its first general
to AI partnership in China.
Speaker 6 (01:35):
Hey, thanks for having me, So this is a big development.
China is obviously a major market for Apple. I think
they got about seventeen percent of their revenue from the
Greater China region in their most recent fiscal year. They
have been seeing a little bit of struggle there in
terms of sales. They're seeing increased competition from companies like Huawei.
So the idea that they can get sort of really
strong AI features onto devices there in China, that has
(01:57):
seen as a real opportunity for them to kind of
prove their fortunes there and that would help with overall growth,
which is something that investors have been looking for for
quite a while.
Speaker 3 (02:06):
Talk to us about some of the mechanics behind the manufacturing.
I'm talking about the tariff risk. How are investors thinking
about this potential risk as it relates to Apple.
Speaker 6 (02:17):
So Apple's really in sort of the crosshairs here because
it does have such a major manufacturing hub out of
China that we have seen tariff levy I think was
tim percent tariffs China retaliated. It also has some kind
of probe looking at Apple app store policy. So there's
certainly a lot of questions here. We don't know how
long tariffs might be in place for. We don't know
if there's going to be an escalation. We don't know
(02:39):
if Apple might get some kind of exemption the way
it did during the first Trump term. So far, it
seems like people aren't seen too significant an impact to
earnings from this. But this is something that could clearly
escalate and become a much bigger issue very quickly.
Speaker 5 (02:52):
And certainly we've seen the ramifications on the stock price
from investigations coming from China from a regulatory perspective, and
certainly Germany also looking into it.
Speaker 2 (03:00):
On the day as well. Ryan point us forward.
Speaker 5 (03:03):
From how this baks into evaluation and Apple, as we say,
over the last five days, we're up two point seven percent.
Speaker 6 (03:09):
Yeah, recent performance has been pretty good.
Speaker 7 (03:11):
Overall.
Speaker 6 (03:12):
It has been an underperformer this year because of the
early concerns about how strong iPhone sixteen demand was, and
you know, the overall kind of geopolitical environments. You know,
the stock does have a pretty high multiple given the
fact that the growth is not what you're seeing in
some of the other mag seven names. But people do
consider it a pretty defensive and sort of safe haven
kind of company, just because it's cash flow is enormous.
(03:34):
It spends billions of dollars on buybacks. It hasn't been
planning a ton of capbex into AI, which has become
a concern for some of the other stocks. So there's
certainly still reasons to recommend it, you know, services growth.
You can kind of go down a list of issues
like that, but do you think overall, I mean, people
have been looking for a more pronounced growth inflection from
the company, and when you have all these concerns about
(03:55):
tariffs and China and so forth like that, that does
make that a little bit harder in the near term.
Speaker 3 (04:00):
Bloomberg's Ryan West delica, thanks for joining us. Meanwhile, shares
of Intel are rising and on track for its biggest
one week jump in twenty five years.
Speaker 4 (04:08):
This as a report from Baar says.
Speaker 3 (04:10):
That the company could be in talks to work with
a TSMC on a potential project for more. Bloomberg's Ian
King joins us now Ian Intel has had a turbulent
couple months. It's CEO being ousted. How much does Intel
need a project like this.
Speaker 8 (04:27):
I think in general, we've seen the stock go up
over the last few days. There's been a lot of speculation.
What investors want is something to happen from the outside
that could help Intel, because they've seen over the last
couple of years that it really hasn't been able to
change the direction of its fortunes. So, whether it's JD.
Van's talking in Europe about hey, we need to do
(04:48):
a made in America, whether it's speculation in Asia about
it potentially getting help from partner, from partners who are
currently competitors and less as are just looking for something,
you know, give me a sign, give me a spark.
Speaker 5 (05:00):
Talking of spark and signs coming at the moment from Apple,
I just want to return to some breaking news to
Tim Cook is indeed posting about the next member of
the Apple family coming on February the nineteenth. Throughout one
point two percent. Much has been reported about the latest
cheaper se revamp coming from our own Mark German previously,
but at the moment, all the statement coming from Tim
(05:21):
Cook is we are awaiting the newest member of the
family of Apple. And you go to the ex post
from Tim Cook, the CEO of that business.
Speaker 2 (05:29):
In sticking more with.
Speaker 5 (05:31):
What's occurring on the manufacturing side of things and what's happening.
Speaker 2 (05:35):
With Intel, we know that maybe they'll look at.
Speaker 5 (05:38):
Outsourcing manufacturing doing deals with TSMC, But more broadly, how
in line with this is what pat originally wanted or
how much of is a distinction from previous leadership.
Speaker 8 (05:48):
Yeah, I think it's we have to be careful here
to point to there being a lot of speculation. We
don't actually know the much is happening right now. What
we really need is big customers. If they get the
big customers with huge orders that give them a lot
of volume to fill those factories, then the plan is on.
Then what Gelsinger tried to put in place is actually
(06:09):
paying off. Until we see, you know, Apple or Nvidia
or somebody else like that putting lots and lots of
chips into Intel's factories, the plan is not really going anywhere.
Speaker 5 (06:22):
In King and all things Intel, which might say, has
been on quite the crescendo in the last three weeks
in terms of its share price. Let's give to Nooon
breaking News SpaceX. We understand in South Africa the talks
are stalling over tensions with Elon Musk and with President Trump,
SpaceX and South Africa. The negotiators intend to restart talks later.
This all about space X's adoption and its satellite use
(06:46):
in South Africa.
Speaker 2 (06:47):
Will have more on that as and when we get it.
Speaker 5 (06:48):
But coming up, we'll be joined by Reddit COO Gen
Wong to break down the company's earnings. That's coming next.
This is bloom meg Technology. Just look at Reddit right
(07:17):
now shares our dam that's after fourth quarter user growth
missed Wall Streets expectations that we're having in the worst days.
It's November, the twenty second Reddit itself saying user growth
was indeed impacted last quarter after Google made a change
to its algorithm that impacted search traffic. Let's begin. Reddit
COEO Gen Wong joins us now and just talk to
us about how this quarter is currently looking in terms
(07:41):
of the reaction to Google's overall algorithm change and how
you drive your own fortunes when it comes to the
use and adoption.
Speaker 2 (07:48):
Is staying with Reddit.
Speaker 9 (07:51):
Thanks for having me, Good morning. Q four was a
really strong quarter for us.
Speaker 10 (07:56):
We saw daily active users growth thirty nine percent ear year,
the revenue grow seventy one percent year. Every year so
I think in terms of growth, we're probably top of
the market in terms of both of those. Start to
find a company that's growing as fast for the things
that we control. In terms of making the product better,
making it easier, helping people find communities faster.
Speaker 9 (08:19):
We're really happy with our work.
Speaker 10 (08:20):
Our work is working, and that's been consistent over the
last four quarters, and there's a lot more there. We're
still early in that process. In late Q four we
did see that there were some changes in Google that
sort of came and went. We've seen recovery since then
and we're off to a really good start and the
work that we're doing again continues to bear fruit and
(08:42):
making Reddit more extensible. Reddit is an opportunity, as an
opportunity to address everybody. The whole world needs community and
has passions and interests and can be on Reddit. So
we make redit easier, more accessible, help people find their
communities faster. That's when it becomes extend incible to everybody
in the world. So our tam is really everybody. We're
(09:03):
just early in that journey, so we feel very good
about our roadmap and our opportunity.
Speaker 3 (09:08):
Jen Reddit has a licensing agreement with Google and in
the earnings call yesterday, the company called that relationship symbiotics.
So the faster that users can find Reddit on a
Google search, the more engaged they can be on your website,
and then in turn, the better data that Google is
able to glean. Have you had conversations with Google about
(09:29):
maybe cutting you some slack or at least giving you,
guys a heads up next time there's an algorithm.
Speaker 10 (09:33):
Change the way that Google work, you know, Google Google
the way the algorithm work is there proprietary work. The
conversations we've had are around obviously the Reddit data and
how that can be used for training and for in
their you know, search generative products. There's no question that
(09:56):
it's a symbiotic relationship in that. What happened when next year,
I think in searches demonstrates this. So Reddit has become
the sixth most search term in US in Google.
Speaker 9 (10:07):
I mean, that's incredible.
Speaker 10 (10:09):
That means people are intentionally searching for Reddit. They're typing
in a query what's the best backpack Reddit? Because they
are trying to navigate to the recommendations and the trove
of human intelligence on Reddit, and because Reddit has the
best answers on the internet, and Google is a place
where people go for broad based questions. It's a really
(10:30):
symbiotic relationship, and that helps reveal the corpus of information
that Reddit has to users who are searching the broad
based Internet. So in that sense, you know, it's been
a very fruitful partnership.
Speaker 4 (10:45):
But if it's getting harder for users.
Speaker 3 (10:47):
To find a Reddit link via Google Search, do you
see this kind of algorithm change or similar ones in
the future straining that relationship.
Speaker 10 (10:58):
We've been beneficiaries of the open Internet, and again, when
people are intentionally navigating to Reddit, that tells us that
they are trying to access that information on red the recommendations,
the advice. So I think we're really important because we're
actually what users are seeking, right, they're actively searching for us.
Speaker 9 (11:21):
The way we think about it is this whole process of.
Speaker 10 (11:23):
Data licensing is really I think revealed how important reddits
content is, and we also have an opportunity to build
our own products around our corpus of information. You see
this with us testing something called Reddit Answers, which is
a chat based search that reveals recommendations on Reddit.
Speaker 9 (11:41):
Again what's the best backpack.
Speaker 10 (11:42):
But it gives you a search result that is specific
to Reddit that shows answers and opinions across every subreddit
a really different experience from broad based internet search, and
I think we have an opportunity to continue to build
our own products around our corpus of information in addition
to being in sort of broad based search on the Internet.
Speaker 5 (12:05):
So speak to those analysts or investors with some anxiety
about the dependence on Google. How much is Reddit ass
boosting the engagement that you control.
Speaker 10 (12:15):
Reddit answers is early right now, it's it's in a
beta test, But we like what we're seeing there.
Speaker 9 (12:20):
I think the thesis of people wanting.
Speaker 10 (12:23):
To come and be able to search Reddit and see
what is happening across opinions across all communities, that thesis,
I think.
Speaker 9 (12:30):
Is born out, and so we're excited about what we
see there.
Speaker 10 (12:33):
We are investing in search search of Reddit, and there's
an opportunity for us that will continue to be building out.
When I think about the opportunity here, it's it's it's enormous, right,
I mean recommendations and advice. We have twenty years of
conversations on every topic on the planet, and so it's
(12:56):
core to our mission to empower communities and make their
knowledge accessible both to all.
Speaker 3 (13:02):
That's red at COO. Jen Wong, thanks so much for
joining us. We also caught up with the CEO of
Lyft yesterday on the heels of the company's earnings. We
discussed his outlook on autonomous vehicles and competition with the
likes of Weaimo, and he says Lift's market share in
San Francisco has not.
Speaker 4 (13:18):
Moved to a listen.
Speaker 11 (13:21):
In San Francisco, it's flat.
Speaker 12 (13:23):
Interesting is even as they increase in San Francisco, our
share has been flat now, So that suggests that the
market is expanding, maybe suggests that they're taking some share from.
Speaker 11 (13:32):
The other guys. I don't know.
Speaker 12 (13:33):
In Phoenix, we're actually growing faster than ever, so we
grow about fifteen percent nationwide in Phoenix. It's a little
north of that. So that also even and Wyn was
quite active there. So it's a great profit. It's great technology,
but I think a lot of people come and they
use it, and they like it, and then they come
back to traditional ride share and.
Speaker 11 (13:49):
Use this both.
Speaker 3 (13:49):
Your competitor, Uber said it would quote hopefully partner with
Tesla's on autonomous vehicles. They said that last year has
lived had any conversations with Elon Musk or Tesla about
a potential partnership.
Speaker 12 (14:00):
You know, I don't talk about individual things like that.
I think, you know, there's this sort of danger of
kind of trying to win the press release and announcement war,
and we try to win the service war. That's kind
of our thing. So I want to say not. I
think it's I think that'll be all kinds of partnerships,
I really do, and the ones that happen, we'll kind of.
Speaker 11 (14:15):
Have to see.
Speaker 3 (14:16):
The incoming Transportation Secretary Sean Duffy has proposed that a
federal level law should kind of supersede this patchwork of
state by state rules for autonomous vehicles. Do you think
this new administration would help lift's ambitions in autonomous vehicles?
Speaker 11 (14:32):
I do, I do.
Speaker 4 (14:33):
Yeah.
Speaker 11 (14:34):
The safe by state thing is really hard.
Speaker 12 (14:35):
I mean, it's you understand, you want to do some
local experimentation in different states are different, they have different cultures,
they have different geographies, different weather and.
Speaker 11 (14:43):
So on and so forth.
Speaker 12 (14:44):
But an overall sort of safety, you know, kind of
framework and general autonomous vehicle framework I think would be
very helpful in helping this industry move a little bit
faster and frankly, keep up with the way the rest.
Speaker 11 (14:54):
Of the world is going.
Speaker 3 (14:55):
That was Lift CEO David Risher. We're also watching shares
of Coinbase. Shares are up over six percent because it's
a key beneficiary of President Trump's promise to usher in
a new era for the cryptospace.
Speaker 4 (15:08):
The exchange is.
Speaker 3 (15:09):
Reporting fourth quarter results after the belt today, and Wall
Street is expecting to see a boost in trading volumes
on the back of bitcoins gains.
Speaker 5 (15:24):
Blue Origin, Jeff Bezos' rocket company, is cutting ten percent
of its workforce to cut costs, to trim manager ranks,
and to focus on ramping.
Speaker 2 (15:32):
Up rocket launches.
Speaker 5 (15:33):
That the surprise round of layoffs comes about a month
after Blue Origin debuted its flagship New Glen Rocket Swing
years of delays and development setbacks.
Speaker 3 (15:41):
Jackie startup K two Space has raised one hundred and
ten million dollars in a series speed funding ground led
by light Speed Ventures and Ultimeter Capital. The company, created
by former SpaceX engineers, is developing.
Speaker 4 (15:56):
A platform to launch multiple.
Speaker 3 (15:58):
Satellites into orbit at higher speed and lower costs than
currently available. Joining us now is K two Space CEO
Karen Kundred. Thank you so much for joining us. Walk
us through about what your platform actually does. It's essentially
almost like a bus for satellites. How are you able
to do this at a cheaper price?
Speaker 13 (16:15):
So we're building a platform that is ten times more
powerful than existing platforms.
Speaker 11 (16:20):
Today.
Speaker 13 (16:21):
When it comes to applications in space, almost every application
ties back to power. So my brother and I kind
of started the company on the contrarian bet.
Speaker 11 (16:28):
We decided to go the opposite direction.
Speaker 13 (16:29):
Of the market that was going smaller and lower power
with their satellites and redesign the satellite. From the reaction,
weill up to build a platform that is higher power,
higher capability, while still being able to multi manifest into
launch vehicles to do constellations.
Speaker 5 (16:43):
The market has come to your contrariant bet because SpaceX
is starship just the innovation in terms of bigger and
bigger rockets being able to pay take these bigger and
bigger payloads. I'm interested in ultimately what the manufacturing therefore
is needed in the United States because you're vertically integrated exactly.
Speaker 13 (17:01):
Yeah, all launch players like SpaceX and Blue Origin are
moving the market larger. We kind of equate it to
we're moving from an era of launch constraint in space
to launch abundance. It's almost as if we're operating in
the age of dial up internet and moving to broadband,
and our company was started under this premise of like
what happens at this new age of broadband where we
can do things differently. For us, it's vertical integration, it's
(17:24):
rebuilding the satellite. We're building about seventy five percent of
the satellite in the house, and that allows us to
do a lot of unique things to optimize the platform
for the launch future that we see coming, not necessarily
the launch vehicles of the past.
Speaker 3 (17:37):
You've already brought in millions of dollars worth of contracts,
both coming from the public sector but also commercial contracts.
We've heard a lot about the DoD getting inside Silicon
Valley trying to scoop up some of those startup ideas.
Speaker 4 (17:51):
But talk to us about your commercial.
Speaker 3 (17:53):
Partnerships, because there's a lot of space companies out there
right now.
Speaker 11 (17:56):
Yeah.
Speaker 13 (17:56):
The interesting thing about going higher power, when you tex
the amount of power, you also dramatically increase the throughput
per satellite. So our commercial customers are mainly commercial operators
that are beaming data down from space that see the
potential when you have ten times the amount of power
to fundamentally change the unit economics of their business. Higher
power means more throughput while maintaining the low cost means
(18:17):
that they're actually able to deploy even more satellites with
even more capacity on orbit in a way they never
could before.
Speaker 3 (18:23):
So are these like SpaceX, Blue Origin those kind of players.
Speaker 13 (18:27):
SpaceX and Blue Origin are two of the players, but
there's a bunch of others out there as well that
are also thinking about how to better operate their constellations
on orbit.
Speaker 5 (18:36):
What's so interesting is the government side of things as well, Karen,
And you've got John Plum, of course, who used to
be in government, former Assistance Sectuary of Defense for Space
policy in house now. But how is it liaising with
the current administration that we've just had breaking news that
a deal with Starling over in South Africa is in
jeopardy because of relationships between Elon Musk and President Trump.
Speaker 2 (18:57):
How are you finding relationships?
Speaker 13 (19:00):
Yeah, we were pretty excited to bring John on the team.
He's the former Assistant Secretary of Defense for space policy.
When we first briefed him, he kind of saw what
was possible with this completely new platform at the end
of the day, we believe that if we build a
platform that is as differentiated as what we claim it
to be, our work with the national security and commercial
customers will come regardless of the political environment. What I
(19:22):
will say is that the existing administration has clearly shown
that they believe space is the next frontier, an important
place to have investment, and we're pretty excited to continue
to service our national security customers.
Speaker 3 (19:34):
You know news today that Blue Origin is cutting ten
percent of its workforce. Are you worried at all that
that signals a broader slow down in the space in
any way?
Speaker 13 (19:42):
Yeah, it's you know, we have a lot of friends
that work over there. We're pretty sad to see hear
about that, and you know, we'll be trying to hire
ourselves people that may be leading from that company. I
think layoffs and investment are always a part of the
national natural capital cycle when it comes to any business.
You don't like to see it, but sometimes that happens,
and so I don't think it's a nicative of a
(20:02):
broader trend. I mean, we raised we were preempted on
our Series A thirteen months ago. We were preempted again
on our Series B two months ago, we've raised about
one hundred and eighty million dollars in venture capital.
Speaker 11 (20:13):
Today we're not seeing that.
Speaker 13 (20:15):
What we see is if we're truly building something that's different,
with the differentiated team that's going after it, the capital
is there to fund our vision.
Speaker 5 (20:21):
Okay, so potentially hiring up some of that talent that
has to be pushed out.
Speaker 2 (20:26):
Talk about next steps?
Speaker 5 (20:27):
Where next do we see K two space? You've just
this month, well I think it was in January in fact,
flying several technology demonstrations using SpaceX.
Speaker 2 (20:36):
What's the next key marker?
Speaker 13 (20:39):
Yeah, so we just finished up our first successful in
space mission, so, as we like to say, we're now
a real space company.
Speaker 11 (20:45):
And yeah, we were pretty excited to.
Speaker 13 (20:47):
Have that because, as I said, we're kind of resetting
the entire supply chain, so we had to fly a
bunch of the components that we built from scratch to
start buying down risk on the full platform.
Speaker 11 (20:55):
We're now shifting gears.
Speaker 13 (20:56):
We're moving towards the full satellite platform mission that's called Gravitas,
that's launching fund of twenty twenty six. We want a
thirty million dollars contract back in December from the Department
of Defense to fly a number of national security payloads,
and our goals is to basically showcase this differentiated platform
and buy down the entire risk of the platform. We're
going to fly to the harshest environments. We're going to
(21:17):
test the platform. We're going to show what happens when
you have twenty kilo lots of power, and we're really
going to prove out this completely new capability to our customer.
Speaker 5 (21:24):
Set Leo moo Leeos Karen Kunjam, We thank you so much,
Ceo KTI Space, It's great having time with you. Welcome
back to LUMAT Technology and Caroline Hyder.
Speaker 3 (21:41):
New York, and I'm Jackie Devalas in San Francisco.
Speaker 5 (21:44):
Quick check on these markets and in fact single names, Jackie,
there are still earnings coming thick and fast, the good,
the bad, the ugly.
Speaker 2 (21:50):
I'm looking at.
Speaker 5 (21:51):
App Lovin up twenty eight percent, not forty percent growth
in terms of their previous year revenue, but they're also
selling off their game development unit for nine hundred million
dollars to private company.
Speaker 2 (22:01):
The investors love it.
Speaker 5 (22:02):
We're up twenty eight percent, trade desk down thirty one percent,
a rare miss for the advertising focused business. And this is,
as Fundamental said, they disappointed themselves in terms of their
own growth in.
Speaker 2 (22:13):
The previous years.
Speaker 5 (22:14):
So investors really trying to take on board what this
means in terms of sentiment for advertising and trade desk.
Speaker 2 (22:19):
More broadly, Data Dog also under.
Speaker 5 (22:20):
Pressure up eight percent, down eight percent. This is they too,
see an underwhelming forecast in particular, and really trying to
see from an analyst and investment perspective, this is just
conservative if actually the cloud trend is going to be
good for them in the long term, and indeed some
of the generative AI adoption for the software company move
on to generative AI story of the day, Apple because finally.
Speaker 2 (22:42):
We'll get some Apple intelligence into China.
Speaker 5 (22:44):
Because it seems though Joe Sai over of course, that
Ali Barber is confirming that, yes, the reports are true.
Speaker 2 (22:49):
We are going to be teaming up with Apple.
Speaker 5 (22:51):
We're going to be giving them access to our generative
AI models, and you're going to get Apple intelligence in China.
The first of these deals when it remained exclusive for long, Jackie,
what you.
Speaker 3 (23:00):
Got Elon Musk's bid to buy open Ai is being
used against the tech billionaire. Lawyers for Lawyers for Sam
Altman argue that the offer ultimately contradicts Musk's arguments that
open Ai cannot be transferred away for private gain. In
response to open eyes filing, Tesla CEO told the court
(23:20):
he'd drop his bid for open Ai if the company
halts it's restructuring for more. Bloomberg's Rachel Metz joins us. Now, Rachel,
does this feud risk slowing down Open Eye's progress?
Speaker 14 (23:34):
That is the possibility, at least as far as the
progress toward the restructuring. It certainly puts more attention on
what's happening there, and they're in the middle of what
is no matter what going to be a submen lengthy process.
And it certainly, you know, with the court battle of
that open Ai an Eland must have, this puts.
Speaker 9 (23:52):
Like one more It's like one more way to come
up the works.
Speaker 5 (23:55):
And I think we've got to remember the context, the
complex context to all of this. Fifteen Elong Sam other
founders make a not for profit twenty nineteen. It becomes
in part a for profit with a cap for profit
that the nonprofit controls. And now well that might reverse
as to who controls whom.
Speaker 14 (24:14):
It's very complicated, and you can see how that structure
itself also makes it hard to even understand if you
are putting in a bid for this for the startup
portion of the company, and that's in its assets, like
what exactly are you buying?
Speaker 9 (24:29):
How much should it be valued at?
Speaker 14 (24:31):
So, yeah, it is overall just a very complicated situation.
And then if you put in a feud there, yeah,
you're making You're making things ultra complicated.
Speaker 5 (24:40):
Wow, the media and spectators are here for it, Rachel Metz.
We appreciate your time and giving us the context. Meanwhile,
Adobe sticking with generator of AI is a mean to
convince skeptical investors that it can compete with AI startups
such as open Ai. The company introduced a new product
that charges around fifty cents per AI generated video now.
It also launched new subscriptions for its fly ai models.
Speaker 2 (25:01):
For more.
Speaker 5 (25:01):
We joined by Blue Merg's Brodie Ford. Interesting that we
get the price point here.
Speaker 15 (25:05):
Absolutely so Adobe, it's really existential for them in the
pre AI era, if you needed to edit some photos
and videos, you needed Adobe. The big question for the
last two years has been once generative AI becomes more commonplace,
do you still need Adobe? And it seems investors change
their mind every six months, and so today what is
so interesting is that we are getting you know, it's
(25:27):
going to be about fifty cents a pop to make
AI videos. That's pretty competitive with some of the startup rivals,
which is meaningful because the startup rivals don't have to
report every quarter, they can eat some costs a little longer.
So it's interesting to see them price what I would
think as somewhat aggressively.
Speaker 3 (25:41):
Here, Bertie, let's talk about the product itself. How does
it compare with what's already on the market, because open
Ai and even Runway also have competing products.
Speaker 15 (25:51):
I thought it was pretty cool, right, and I tried
it out yesterday and I found it to be a
pretty effective product that worked well. I mean, and what
Adobe has always said is not that we are going
to have the number one best model visually, but that
we're going to have really great controls. You're going to
be able to integrate it with the software you already use,
You're going to keep it in the ecosystem in general,
especially for enterprises, they don't want to have a bunch
(26:13):
of bespoke models coming in with potential security risks, and
so ADOBEA has really tried to make sure that it
integrates well into existing environments. And you know, I was
impressed with some of those manual tools and trying get out.
Speaker 5 (26:25):
Yesterday, Body Ford across the Adobe News.
Speaker 11 (26:29):
We appreciate it.
Speaker 4 (26:29):
Thank you.
Speaker 2 (26:30):
Let's bring you some macro news. Government news here. Robert F.
Speaker 5 (26:34):
Kennedy Junior has indeed been confirmed as a new head
of the US Department of Health and Human Services. Is
approved with a fifty two to forty eight vote after
pretty tense confirmation hearings. And we'll now of course have
influence of the FDA, the CDC, and the federal insurance programs.
(26:56):
Morgan Stanley boosting the latest debt offering of.
Speaker 2 (26:59):
Elon musk X. Now the bank will.
Speaker 5 (27:02):
Upsize it's offering from the market to three billion dollars
to four point seven billion dollars or due to strong
investor demand.
Speaker 2 (27:09):
Jackie.
Speaker 3 (27:10):
Here's what some of Bloomberg's TV guests had to say
about Deep Seek at the Paris AI summit taking place
earlier this week.
Speaker 6 (27:18):
I feel so confident about our research shroadmap and also
our product droadmap.
Speaker 11 (27:21):
That you know, Deep Seak will do whatever Deep Seak's
going to do.
Speaker 16 (27:24):
Other people do whatever they're going to do and we're
just going to try to like build.
Speaker 11 (27:27):
The best technology we can and get into people's hands.
Speaker 7 (27:30):
It's a very impressive model, or very impressive piece of work.
I think the team is probably the best team that
I've seen come out of China. So that said, I
think a lot of the claims are exaggerated and a
little bit misleading.
Speaker 3 (27:41):
A lot of the key things from deep Seak are
reducing the cost of innovation, but also raising this question
of data control.
Speaker 17 (27:50):
If you have potentially mutal strained resources, you can make
a better job then if you have your men's resources
and stop thinking about what to do efficiently.
Speaker 3 (27:57):
I think there's been a lot of excitement, but we'll
have to see if it material. Let's get to the
infrastructure question in the age of deep Seek with today's
VC Spotlight with Angene mitta general partner at Andresen Horowitz
on Jenay. Where does this leave the conversation around how
much infrastructure we actually need? What were you hearing on
the sidelines of the Pear Summit.
Speaker 18 (28:18):
I heard that we are in the era of infrastructure independence. Basically,
I think most large nation state leaders have realized that
modern AI models have risen to the level of general
purpose technologies.
Speaker 11 (28:30):
The history of.
Speaker 18 (28:30):
Humanity, We've had maybe twenty twenty two of these, electricity,
the printing press, and when that happens, leaders start realizing
that that technology becomes critical.
Speaker 11 (28:40):
To national progress.
Speaker 18 (28:41):
And so that's what I heard from President Macron and
Prime Minister Modi. The summit was co hosted by France
and India, and I also heard from JD. Vance at
the summit that the United States believes that now staying
at the frontier of AI infrastructure and making sure that
open source is competitive. American open source is competitive, Allied
(29:01):
open sources competitive with the best models coming out of
any country, including China.
Speaker 3 (29:05):
Well, speaking of China, when we have the biggest players,
China and the US with kind of different values competing
against each other. You've talked about what you call joint
ventures between nations that perhaps don't have the resources on
their own to compete in AI.
Speaker 4 (29:20):
Talk to us about that.
Speaker 18 (29:21):
Yeah, So one of the atomic units of AI is
the data center, right, because if you sort of look
at the history or the ingredients of how we got
the current deep learning wave, there's really three or four
of them. There's compute, there's data, there's algorithms, and there's regulation,
and so when it comes to compute, the idea is
that there are only some regions that have enough compute
(29:45):
and access to the power that's cost competitive to stay
at the frontier. I call these hypercenters. We clearly have
at least two hyper centers now in the world today.
We've got America and we've got China, and I think
every other major nation is now hitting a reckoning point
where they're trying to figure out do they build, do
they buy, or do they partner? And so I think
I'm quite bullish on the US and her allies teaming
(30:05):
up across what we call the infrastructure stack. Right, so
when you at the lowest level, you've got chips, and
then you get into models, and then you've got applications,
And I think it's going to be much more likely
that countries that aren't hyper centers today pick which hyper
center they matches their value system the most, and then
they work on joint mentors across the stack, because I
(30:28):
think it's it's quite unlikely that people reinvent the chip
stack for them. They're much more likely to partner with
a country that does match their value system and I
think clearly in France, America, France and India we're teaming up.
Speaker 2 (30:41):
You're on mis Trile's board.
Speaker 5 (30:42):
We were hearing from after a little bit ago CEO
of Miss Trial and so as France got it right now,
is that going to become a center in some way
they're committing to their own infrastructure build out or they
ultimately have to depend on the US at least CHIPS
for example.
Speaker 18 (30:58):
So the zeitgeist has definitely changed. I think from the
last two summits, you know, the first that was in
Seoul and the last one which was in Bletchley Park
in the UK, the overarching theme was one of pessimism.
You know, AI is really risky, We've got to think
about the downside. And instead, what I heard this time
from leaders across the EU, by the way, not just France,
(31:18):
was the idea of optimism that AI actually can unlock
massive growth for Europe and for America. And I think
that France is in the middle of figuring out how
to accelerate its infrastructure. I think they have a huge
headstart when it comes to nucleared option, but when it
comes to data center construction, they're clearly behind the United States,
and they're happy to accelerate permitting and construction, and at
(31:40):
the same time they're happy to work with American chip
companies like Nvidia to actually rack and stack frontier chips
in these data centers. So I think you're going to
see over the long term Europe start to accelerate. But
in the short term, I think they're going to partner
with folks like America.
Speaker 5 (31:54):
And the administration is cool with that because you have
close proximity to the administration with A sixteen and Z
and at the same time doesn't see relations are at
their highest moment right now.
Speaker 18 (32:05):
Well, look, the best thing about this administration is they
share everything very publicly. I think JD was very clear
in his speech at in Europe that we're putting America
first and we will partner and help our allies too.
And you know, NATO is a huge priority for America,
and so I think we'll just continue seeing more investments
in NATO alliances.
Speaker 3 (32:22):
And Jason Horowitz was an early investor in on open AI,
and you're also on the board of Mistral. I'm just
curious what do you make of this feud between elon
Musk and open AI. Does it have broader implications for
the progress for other players in the space.
Speaker 18 (32:37):
Definitely, you know, ultimately where the frontier goes has implications
for all of us. But I think the important thing
to focus on is that, you know, just a year ago,
there were lots of folks who are confidently testifying in
front of Congress that America was so far ahead of
China that China could never catch up. And I think
what we're seeing is one the gap between.
Speaker 11 (32:58):
Open source and closed source has narrowed.
Speaker 18 (33:01):
That's something those of us in the open source community
have been paying attention have known for a while, but
more importantly that the gap between America and China has
narrowed as well. It's incredibly fast. You know, one, which
is one of the most cutting edge models from open Ei,
came out on December fifth, and barely a month and
a half later is when deep Scar one came out
January twenty fifth, and it's comparable. And so I think
(33:21):
the more important dynamic to pay attention to is that
that gap has closed, especially between America and any adversarial
nations that aren't in our alliances like NATO.
Speaker 3 (33:31):
What about Elon Musk's influence in Washington, do you think
that could have broader implications for other AI players in
the space.
Speaker 18 (33:39):
Oh absolutely, you know, I think Elon is an important voice.
But I think the reality is that we are reaching
a state of disequilibrium in AI infrastructure where a lot
of basic assumptions that people had taken for granted are
being revisited, like the gap narrowing bit in open and
(34:00):
closed between America and other countries. And so I think
there are a number of voices, especially in the open
source community obviously, you know, you just played a great
clip from Arthur Mensh, who was.
Speaker 11 (34:09):
The CEO of Mistral. I think there are other.
Speaker 18 (34:12):
Important voices like Jon Stoyka, who's a professor at UC
Berkeley who has been leading an effort called ELMSIS that
works on AI model evaluations. And I think those kinds
of voices are also becoming much more important to nation
state leaders. So I'm just really glad that at the
highest levels frontier AI and especially open source HEREA is
getting a lot of attention, Tony.
Speaker 5 (34:29):
It's getting a lot of politicization as well.
Speaker 2 (34:33):
And how comfortable and uncomfortable does that make you know?
Speaker 5 (34:35):
I've sat down with David Ulovitch a couple of weeks
ago we were talking about American dynamism within this new administration. Then,
of course there's a relatively politicized hire rightly along wrongly
whether it was politicized of course, mister Penny becoming a
deal partner. Of course, mister Penny, twenty six year old
was well known for having had an incident on the
subway here in New York and ultimately led to the
(34:57):
death as someone who's homeless.
Speaker 2 (34:58):
And there was a read on that higher. How are
you feeling.
Speaker 5 (35:01):
About the cultural impact and the perspective of the culture
at a sixteen Z this has.
Speaker 11 (35:07):
Yeah, look taking a step back.
Speaker 18 (35:09):
I think one of the things that's always said a
sixteen z apart is just how strongly the firm believes
in its values, right, and so in the case of
open source AI, for example, I think the firm is
taken a very clear position that.
Speaker 11 (35:20):
We believe open source.
Speaker 18 (35:21):
The history of computing infrastructure is shown that open source
is critical to unlocking massive amounts of productivity for humanity
and for society. You know, when you look at storage, networking, compute,
and so on. I think a lot of the productivity
we've seen from software comes from a value system and
a philosophy and a belief that democratizing access to the
best technology, put in control of that technology in the
(35:42):
hands of the biggest companies and organizations is what pushes
technology forward.
Speaker 11 (35:47):
And so you know, while I'm not.
Speaker 18 (35:49):
An expert on American dynamism, and I'm sure you can
get better opinions from my partner David on that, I
think the more important thing to notice is that the
firm just stands by its values and its philosophy is
very aggressively.
Speaker 5 (36:01):
Thanks for articulating that. As NITA, it's great to have
some time with you on the future of AI and
regulation and throughout General partner Andrewsen and Horowitz Jackie.
Speaker 3 (36:11):
Coming up by Now pay Later firm Klarna has added
to JP Morgan's payment platform. Clarna CEO joined us to
discuss what it means for the startups future.
Speaker 4 (36:20):
This is Bloomberg.
Speaker 5 (36:35):
Robin Hood reported revenue that more than doubled as the
online trading firm was buoyed by crypto market transactions around
the US presidential election. Here's what CEO just had to
say on Bloomberg's open interest.
Speaker 17 (36:45):
They can listen a lot of people focus on crypto
and we're certainly going to be in a more innovation
friendly environment in crypto. I think that's going to be
a tailwind for our business as one of the few
scaled players in both crypto and traditional financial assets.
Speaker 3 (37:04):
Buy now, pay later provider Klarna has been added to
JP Morgan's payment platform. The Swedish spin tech company has
been expanding partnership deals in recent months, and it's targeting
a USIPO later this year. The company CEO Sebastian Schimankowski
joins US. Now, Okay, let's talk about this partnership because
it's a major US bank, and I want you to
(37:25):
quantify the upside of this for for US. How much
of a boost in revenue does this mean for Klarna?
Speaker 16 (37:33):
Well, you know, time will tell, but I mean, obviously
from our perspective, JP Morgan is one of the you know,
it is probably the largest payments company in the world.
They actually do two trillion dollars worth of volume, and
so for Klona that does one hundred billion dollar on
an annual basis. You know, even if we if we're
super successful with them and can get five to ten
percent of that volume on the time, that's obviously a
(37:55):
massive opportunity so we'll find out. It's always you know,
big orkanship like this. You announce them and then it
takes some times because there are systems, integrations, promotions and
stuff like that. But we're very, very excited about it
and super proud of the fact that Tip Morgan decided
to work with us.
Speaker 5 (38:10):
But they might decide to work with other by now
high later players.
Speaker 2 (38:14):
Is that an issue the competition?
Speaker 16 (38:18):
No, I mean I think, look, they work with both Visa,
MasterCard and Amex, and I think like the next generation
of companies that you see on the screen here, they
are kind of the next generation. We think of ourselves
as a third party network, and I think there will
obviously be others as well, so there will be others,
but we're very happy to be first to announce this
partnership with them.
Speaker 5 (38:37):
And let's talk about that third party focus and these partnerships, Sebastian,
because I know you can't talk too much about an IPO.
You've got a lot of investors to convince of the
ultimate valuation of your company. When you're signing up merchants
but not having a direct relationship, just tell us about
the value that that has.
Speaker 16 (38:53):
No, for sure, I mean Klana have historically signed up
merchants directly, and that's brought us to about six hundred
thousand versions. Then took a closer look at like, I mean,
maybe the most successful expansion of a third party network
was Amis in the last two three decades, which went
from you know, being something you only used at restaurants
and hotels to being, you know, something you can use everywhere.
And so it's all about acceptance points. And we realize
(39:14):
that that's not going to happen by our own machine.
That can only happen to these amazing partnerships with Stripe
and the Addings of the world and the world Pace
and the Jping Mormons of the world and so forth.
So so we're super happy about this. It gives us,
you know, access to millions and millions of immersions to
make Klana acceptable. I mean in the US, still a
lot of people that associate us primarily with binapulator, but
like thirty percent, thirty percent of our volume is paying
(39:36):
fold the full amount.
Speaker 11 (39:38):
We offer all types of payment forms.
Speaker 16 (39:40):
So we think about ourselves as a third party network,
and Visa Mascot and the others need some competition.
Speaker 3 (39:46):
Let's stay in the US for a minute Sebastian because
here the Consumer Financial Protection Bureau its features in question.
Now that it's kind of come within striking distance of
Elon musk Stoge, is this a good thing for Klarina?
Speaker 16 (40:01):
Well, I mean, look, I think we are based in Europe,
where there's very tough regulation, much tougher in any ways.
I mean, it was actually funny the only thing Trump
said that was for more regulation was to cut credit
card interest rate fees, which to me kind of make
sense because you know, a lot of markets we operate
in Europe, you will see like max interest rate card
(40:22):
can be like at sixteen percent or eighteen percent, right,
while in US is very very different. So I think
you could expect from this administration to go quite some
tough challenges to the banks. But I think the best
way is going to be more competition, and to some degree,
you know, less regulation can help to accelerate more competition
and to go after those success profits that we've seen
(40:44):
in the banking industry. So I think that the you know,
we are have always operated according to regulatory requirements, but
also in addition to that, we have always said that,
like the ethical standards are extremely important for us and
to make sure that we provide services that are priced
reasonably for consumers, that we don't charge too high interest
or too high fees and so forth, and that's going
(41:06):
to continue being an objective for us, either CFPB is
present or not.
Speaker 3 (41:12):
All right, Well, real quickly, Sebastian, what about crypto You
called it a decentralized Ponzi scheme in twenty twenty two.
Speaker 4 (41:18):
Has that changed? Is Karna planning?
Speaker 8 (41:20):
Yeah?
Speaker 4 (41:20):
Please?
Speaker 11 (41:21):
I was happy you brought that up.
Speaker 16 (41:23):
Well, I actually this this weekend after thanks to my
board member Andrew from Sequoia, I met with a few
very interesting crypto companies and after listening to them and
what's happening with crypto, stable coins, bitcoins, I did a
small tweet this weekend that said that like, okay, I
give up, it's time to explore crypto for Klana. And
(41:44):
I thought that, like everyone would be just sighing and
thinking it was the most boring news ever because it
feels like we're the last large fintech in the world
to say that. But I had over a million views,
so people are super engaged. The whole community open up
and I got like one thousands ideas of what we're
going to do so, I'm excited about that.
Speaker 11 (41:59):
Now happy you know sometimes you're wrong.
Speaker 2 (42:02):
Come back and talk with AI with us as well.
Speaker 5 (42:04):
Soon we've run out of time, plan to CEO Sebastian
showing Kowski.
Speaker 2 (42:07):
Thanks so much for the time.
Speaker 4 (42:08):
Now.
Speaker 5 (42:08):
That does it for this edition of Bloomberg Technology, Jackie,
don't forget your audience can go and check.
Speaker 4 (42:13):
Out our podcast.
Speaker 5 (42:13):
You can find on the terminal as well as online
on Apple, Spotify.
Speaker 2 (42:16):
And iHeart. This is Bloomberg Technology.
Popular Podcasts
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.