May 2, 2024 • 44 mins
Bloomberg's Caroline Hyde and Ed Ludlow break down what to expect from Apple's earnings after the bell as investors anxiously await iPhone sales numbers. Plus, a conversation with Qualcomm's CEO as the chipmaker offers an upbeat forecast, and with DoorDash's CFO on the company's latest results.
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Speaker 1 (00:01):
From the heart where innovation, money and power Collie in
Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde
and Ed Ludlow.
Speaker 2 (00:25):
I'm Caroline Heinder Bloomberg's weltad quarters in New.
Speaker 3 (00:27):
York, and I'm Ed Ludlow in San Francisco. This is
Bloomberg Technology.
Speaker 2 (00:31):
Coming up. We push our head to Apple's results after
the bell.
Speaker 4 (00:33):
This is investors anxiously await iPhone sales numbers.
Speaker 5 (00:37):
US.
Speaker 3 (00:37):
We'll sit down with the CEO of qualcom Is the
chip maker, offers an upbeat forecast.
Speaker 4 (00:42):
And the CFO of door Dash joins us to run
through the company's latest results.
Speaker 2 (00:47):
All that and so much more coming up.
Speaker 4 (00:49):
There is a wealth of micro data of company news today.
Speaker 2 (00:52):
That we're going to be digging into.
Speaker 4 (00:53):
Not to mention New York based Peloton, but I'm looking
at what's happening on a broad index today.
Speaker 5 (00:57):
Ed.
Speaker 4 (00:58):
We're seeing the nasdak cup seven tenths of a percent
post the FED. We're relieved that we're not going to
see rate hikes coming, but certainly still no signal over
those rate cuts as we still see a resilient US
overall jobs picture, which we get the detail of come Friday.
Speaker 2 (01:13):
Yes there's a calling.
Speaker 4 (01:13):
Maybe the slowest increase in jobs since November, but still resilient.
We're seeing a ten year yield just down one basis point.
A little bit of movement into the mode market on
the day post fed as we anticipate the jobs data
and Bluemberg dollar index actually weaker as we see a
little bit of a relief there. We're down by four
tenths of a percent. What therefore is bitcoin doing the
versus the US dollar. Let's move it on and have
(01:34):
a little look that we're up three percent, so a
little bit of a risk on kind of a trade today,
but still sub that sixty thousand dollars level. But ed,
what are you watching on this corporate news front?
Speaker 3 (01:44):
Let's start with Peloton, an absolutely wild morning session in
the market. So far CEO Barry McCarthy is going to
step down the board. We'll find a new CEO. Fifteen
percent of global headcount going to be cut. The story overall,
things are not getting better for Peloton. Look at the
chart two day chart to illustrate the point that when
the market opened there was a session high of eighteen
percent cheering. What is another restructuring and yet we're now
(02:07):
down more than ten percent. Having had some time to
basically look at what Peloton's saying and on the hardware
side of their business, the multi channel sales side of
their business, and then subscriptions, things are not going to
be as good by the end of the year as
perhaps they had hoped, the.
Speaker 1 (02:22):
Market had hoped.
Speaker 3 (02:22):
We're gonna get deep on that later in the show
were Bloombos Mark German, but that is just a real
ride that stocked this morning. The earning story is elsewhere
as well. Quill Calm up almost ten percent. The smartphone
market seems to be recovering. There's going to be a
lot to talk about with CEO Christiano and on later
in the program in the context of AI and also
what's happening in China and then door Dash. This is
(02:43):
a tail as old as not time, but the history
of gig economy companies investors looking at ebit dar forecast
and wondering what's going on the relationship between at Basic
gig platforms and ebit dar is something we've talked about
a lot. The concern is like are they investing too much?
What's going on the bottom line, It's the US's biggest
delivery platform, mid single digit growth team growth in the
(03:05):
second quarter. Let's find out what's going on with that one, Caroline.
Speaker 4 (03:07):
Yeah, because we did actually see strong numbers for fiscal
first quarter revenue on the higher side, but it was
this worry about the forecast that is setting the shares lower.
DoorDash CFO the perfect person to speak to about it,
Rabbi in Conda. Thank you very much indeed for joining us,
Rabbi and just talk to us about why this restrained
outlook for adjusted a bit dark come the second quarter.
Speaker 2 (03:29):
And why then the ramp in the second half.
Speaker 6 (03:32):
Good morning, Carolina, thanks for having me this morning. Q
one was a very strong quarter for US across the board.
If you look at the results, demand on the platform
continues to be very strong. All time highs in terms
of users, all time high in terms of subscribers, all
time high in terms of order frequency. In Q one,
we fulfilled more orders than ever before in our history. Honestly,
(03:53):
you've been one of the strongest quarters since I've been
here for the last six years. When I look at
the underlying demand on the platform, it really is very good.
We're not seeing weakness on the consumer side, whether it's
you know, low income or high income, or the East
Coast or the west. Goal, we're team trend across all markets.
We operate in thirty countries across all life of business,
(04:14):
and at the same time, we posted the lowest netlots
in our history, which is being aided by the highest
adjuctity bite in our history. Overall, the business continues to
do really well, and I'm excited about not just the
Q one results, but they're going forward Q two as
well as the rest of twenty four.
Speaker 4 (04:30):
So did you get frustrated when the shares full because
the market wanted to see more in terms of profitability
for the forecast.
Speaker 6 (04:38):
Our goal has always been to continue to build the
best product possible, and you're seeing that in our results.
Speaker 1 (04:44):
Users, Like I said, I've been in an all time high.
Speaker 6 (04:46):
We ended twenty three with over thirty seven million consumers
and that number continues to grow considerably since that point.
We're not seeing any weakness, whether it's the large, you know,
enterprise merchants on the platform or the local merchants on
the platform. You're seeing wrong double digits scapes, stores, sales
growth across the world. Our grocery business is growing at
one hundred percent year on ear for the third straight
(05:08):
quarter in a row. Our goal will continue to be
to build the best product possible that consider all three
sides of the audience, whether it's consumers, merchants or adaptors.
Speaker 3 (05:18):
Robbie, I'm building the best product possible. It's easier way
in on the adjusteday with the forecast. There's some sense
that you're investing in specific areas and that might be
impacting the bottom line. Right you're investing at the technology layer.
What are you doing and what's the goal there?
Speaker 1 (05:35):
Yeah?
Speaker 6 (05:35):
In Q one, you know, one of the key things
that impacted the overall business is we did absorb some
costs in New York as well as Seattle.
Speaker 1 (05:43):
That cost is.
Speaker 6 (05:44):
Going to continue to reduce as we go through the
rest of the year, as we make the business more efficient,
as we consider other opportunities to consider to make.
Speaker 1 (05:51):
Those costs go down.
Speaker 6 (05:53):
If you recall our business, the core restaurant's business has
actually been profitable for many years now. We're taking the
it's from that business and building two new businesses, grocery
as well as international, both of which are growing extremely fast.
They're growing faster than our restaurant's business. At the same time,
the profitability of both of those businesses is going up.
(06:14):
If you look at our new verticals business, the third
party component of it has been gross profit positive for
a few quarters now. Same is the case with international,
where many countries the restaurant business is actually contribution margin positive.
So overall the restaurant business profitability is improving. Our new
vehicles as well as international is also improving in profitability.
Speaker 3 (06:36):
Just really quick. You mentioned Seattle in New York. There's
a kind of idiosyncratic factors in the quarter. Just explain
the basics to audience of what happened there. On the
policy front, Yeah, on the.
Speaker 6 (06:47):
Policy, if I look up, our goal is always to
work with policymakers and regulators. We do that in over
hundreds of cities across thirty different countries to ensure we're
protecting the flexibility and accessibility the doctors and couriers across.
Speaker 1 (07:02):
The globe we're asking for. I just HELFU are.
Speaker 6 (07:05):
Honestly like extreme examples of that regulation.
Speaker 1 (07:08):
We've taken some action to.
Speaker 6 (07:10):
Change the way in which we operate. We're making the
business more efficient, and our goal is to continue to
work with policymakers in.
Speaker 4 (07:17):
That regard, Let's just get details on operating profits. You
say they'll come in the near future. The market expects
the third quarter, are they right to expect that?
Speaker 6 (07:27):
Look, I mean, our gap net loss is the lowest
in our history. What you're seeing in the business is
the growth is strong. Profitability across all lines of business
is improving. I do expect the trend to continue. And
if that trend continues on both the growth as well
as the profitability, the overall business is going to be
gap positive.
Speaker 1 (07:46):
It's just a question of time.
Speaker 6 (07:48):
Our free cap flow has been very strong. If you
look at the quarter, we've generated roughly about half a
billion dollars of free cash flow. And that's truly our
north star in being able to rabas in the business.
Speaker 3 (08:00):
Robbi real quick, what are the specific consumer habits, the
size of the basket that they're doing, Lots of frequency,
little spend like little things like that.
Speaker 6 (08:10):
Sure, what you're seeing in the business today is more
consumers ordering from more categories. Historically, people thought of us
purely as a restaurant delivery platform. Today are consumers roughly
about twenty percent of our consumers are ordering from convenience
grocery alcohol. We have increased the basket sizes across Robbi.
Speaker 3 (08:30):
Rabbisfi, Robbi and a condo.
Speaker 7 (08:32):
We've got to go.
Speaker 8 (08:32):
Thank you.
Speaker 7 (08:33):
Caron.
Speaker 4 (08:33):
Yeah, if we have some breaking news, let's go to
the President Biden delivering remarks right now.
Speaker 8 (08:39):
The first is the right to free speech and for
people to peacefully assemble and make their voices heard. The
second is the rule of law. Both must be upheld.
We are not an authoritarian nation where we silence people
or squash descent American people are heard. In fact, protests
(09:00):
is in the best tradition of how Americans respond to
consequential issues. But neither are we a lawless country. We
are a civil society. An order must prevail. Throughout our history.
We've often faced moments like this because we are a big, diverse,
free thinking and freedom loving nation, and moments like this
(09:23):
there are always those who rush in to score political points.
But this isn't a moment for politics. It's a moment
for clarity. So let me be clear. Peaceful protest in America.
Violent protest is not protected. Peaceful protest is. It's against
the law, violence occurs, Destroying property is not a peaceful protest.
Speaker 1 (09:46):
It's against the law.
Speaker 8 (09:48):
Vandalism, trespassing, breaking windows, shutting down campuses, forcing the cancelation
of classes and graduations. None of this is a peaceful protest.
Threatening people, instilling, firing people is not peaceful protest.
Speaker 1 (10:04):
It's against the law.
Speaker 8 (10:06):
Descent is essential to democracy, but descent must never lead
to disorder or to denying the rights of others, so
students can finish the semester and their college education. Look,
it's basically a matter of fairness. It's a matter of
what's right. There's the right to protest, but not the
right to cause chaos. People have the right to get
(10:27):
an education, the right to get a degree, the right
to walk across the campus safely without fear of being attacked.
But let's be clear about this as well. There should
be no place in any campus, no place in America
for anti semitism or threats of violence against Jewish students.
There is no place for hate speech or violence of
(10:49):
any kind, whether it's anti Semitism, Islamophobia, or discrimination against
Arab Americans or Palestinian Americans. It's simply wrong. There's no
place for racism in America. It's all wrong. It's not American.
I understand people have strong feelings and deep convictions in America.
We respect the right and protect the right for them
(11:11):
to express that. But it doesn't mean anything goes. It
needs to be done without violence, without destruction, without hate,
and within the law. You know, I'll make no mistake
as president. I will always defend free speech and I
will always be just as strong as standing up for
the rule of law. That's my responsibility to you, the
(11:34):
American people, and my obligation of the Constitution.
Speaker 1 (11:38):
Thank you very much.
Speaker 9 (11:40):
The protest forced you to be consider any of the
policies in regard to the region.
Speaker 1 (11:46):
No, thank you.
Speaker 7 (11:48):
Do you think the national.
Speaker 4 (11:54):
President might delivering remarks at the White House regarding protests
student protests that's bring in Bluemug's Kaye lines for more
and against violence and destruction, but well full peaceful protest.
Speaker 9 (12:09):
Yeah, the President making it clear that he does stand
by Americans' right to free speech and that that should
not be interfered with. But yes, Caroline, essentially that it
should be done peacefully. The President, and making these remarks
in the Roosevelt Room, said descent must never lead to
disorder or denial of rights, that the right to protest
does not mean the right to cause chaos, going on
(12:29):
to say that there is no place for anti Semitism
in America. He makes these remarks as he is facing
growing pressure to address what we're seeing happening on college
campuses across the country, from Columbia University to the West Coast,
with what we've seen at UCLA in the wee hours
this morning. All of it just speaking to the pressure
that he is under as he is trying to stand
by Israel as an ally, but there is growing concern
(12:51):
about the way Israel is conducting itself in its war
against a moss in Gaza. We just heard there the
President being asked by a reporter whether or not this
has all made him rethink his policy on Israel.
Speaker 2 (13:02):
He said no.
Speaker 9 (13:03):
He also said no to the question he was asked
about whether the National Guard should be interfering in these
instances on the college campuses. He said no to that
as well. I would also point out we will be
hearing from President Biden on the issue of anti Semitism
again next week on Tuesday, May seventh. He is planning
to speak at the Capital as part of the National
Holocaust Remembrance ceremony that will be happening on that date.
(13:29):
We heard from the White House Press Secretary of Karee
John Pierre yesterday who said the President will discuss the
moral duty to combat the rising scores of anti Semitism
and the administration's work on that issue. Of course, we
probably got a preview of some of what he will
likely say when we just heard him speak today.
Speaker 3 (13:45):
Bloom bells Ka lines, thank you for the context on that.
It's interesting because we've been talking about protests at different
university campuses across the country and indeed across the world
for several days at least. Now, what was the politics
of this with the president, but what was the pressure
on the hill and the conversation about whether or not
Biden would come out and say anything, and the timing
(14:07):
of it.
Speaker 9 (14:09):
Well, we had heard President Biden speak on this before,
saying that he condemns anti Semitism, although he also had
suggested that people need to understand what's going on with
the Palestinian people. But certainly the domestic political pressure has
been growing. We have seen specifically Republican members of Congress
really taking hold of this issue. We have seen the
House Speaker Mike Johnson, together with other Republican members of
(14:31):
the New York delegation actually going to the campus of
Columbia University just last week, and just last night, the
House passed by a wide bipartisan margin, a bill that
would essentially help the definition of anti Semitism be applied
differently with the Department of Education. There was some concern
that that would become a free speech issue, that it
would limit criticism of Israel or the Israeli government, for example,
(14:54):
but it still got through with a bipartisan majority. It's
unclear whether or not that will move forward in the Senate,
but you are definitely seeing through the legislature efforts to
combat anti Semitism. A lot of blame being cast on
President Biden, whether rightly or not, for what we're seeing
on college campuses, and of course he's been dealing with
the political ramifications of his wider policy toward Israel consistently
(15:16):
throughout this primary season, as we have seen actual Democratic
primary voters voting against alternatives, whether it be uncommitted or
something to the effect in different states like Michigan and others,
to express their discontent with how the president has been
handling his Israeli policy.
Speaker 2 (15:31):
Talking of Israeli policy.
Speaker 4 (15:33):
Breaking news that Turkey has indeed halted all trade with Israel.
That's both exports and imports to and from Israel as
of Thursday. That's according to two Turkish officials familiar with
the matter. Katie Lines bringing us the latest from what
the president has been saying. Meanwhile, now we want to
return our attention toward is in an investor's focus right now.
Speaker 2 (15:53):
We are still a mid earning season.
Speaker 4 (15:55):
Today is Apple reporting quarterly results after the market closes
later today, giving investors kind of a better sense of
how the iPhone maker is weathering at sales slump. We've also, though,
got to be talking about what on earth is happening
over at Peloton. It's its shares slump too. Bloomberg's Mark
Gum and for more on what to expect, let's just
kick off with Apple because it is the huge company
that many focus on.
Speaker 2 (16:16):
What are we lining up for?
Speaker 10 (16:18):
Yeah, Apple earnings? The expectation for the fifth time in
six quarters, Apple is going to report an annual decline.
Revenue is expected by Wall Street to come in at
about ninety billion in change, which would be about a
five billion dollar dip on year over year. The other
thing that's not so hot here. All of Apple's product categories,
(16:38):
so hardware categories, from the iPhone to the iPad, the Mac, wearables, AirPods,
those are expected to decline on an annual basis, with
the only bright spot potentially being actually some pretty significant
growth in the services business. Also another decline in Greater China,
right on the heels of reports from Counterpoint in IDC
(16:58):
and others that iPhone sales in China dipped by about
a fifth despite the smartphone market going up in general.
So overall ninety billion in revenue. That's a big number.
That's amazing for most companies, but for Apple, Wall Street
probably would have liked a little bit more.
Speaker 3 (17:15):
Mark Hardware and Services is a pretty wild story when
it comes to Peloton Bluembo technology team. Let's show the
two day chart and just go back over what happened.
Opened up as high as eighteen percent, is now down
more than ten percent in the session. The CEO is
going after two years, another headcount reduction, and I think
no sign really that Peloton's got a strategy to get
(17:37):
itself out of trouble. Give me the details.
Speaker 10 (17:41):
I don't think people realize how close Peloton is to bankruptcy. Right,
they'll be lucky to remain on the stock market much longer.
If you ask me, I'm shocked that Barry McCarthy stuck
around so long. There is nothing he didn't try. There
is nothing he didn't do. He's laid off several thousand people,
He's moved from a hardware focus to a content and
(18:03):
subscription focus, restructured the company multiple times, hired new executives
to write the ship, outsourced pretty much everything you could outsource,
from installation to shipping to manufacturing. And here we are
missing Wall Street expectations, missing internal forecasts. People still not
(18:24):
buying as many bikes and rows and different Peloton appliances
as you would expect, the premium app falling flat on
its face. Yes, people like their marketing chief continuing to
leave Pelotons in its worshape as it's ever been. And
they have no CEO running the company.
Speaker 3 (18:43):
Just looking at the Bloomberg terminal, and just to give
some specifics, the stock is at a record low. They
ended the quarter with about seven hundred million dollars seven
hundred and thirty seven million dollars of cash, and they
did say that because of the headcut count reduction, they'll
say about two hundred million dollars a year and cash
flow positivity is possible by the fourth quarter. But as
(19:04):
you outline, Mark, the situation of Peloton, which is a
company way off its pandemic era high, is pretty bleak.
Bloombo's Mark German. Stay tuned for his reporting on a
Apple as well after the belt. Now coming up, chip
maker Quial com up with earnings in a strong forecast.
There's a lot to talk about with CEO Christiano Ramon
about the AI smartphone and the AIPC. That conversation is
(19:24):
coming up. This is Bloomberg Technology.
Speaker 2 (19:36):
Time now for talking tech.
Speaker 4 (19:38):
First up, video game publisher Take too Interactive and plans
to shut down two subsidiaries as part of a mass
layoff across its divisions over in London and Seattle.
Speaker 2 (19:46):
That's according to documents review by Bloomberg Now.
Speaker 4 (19:48):
Last month, Take two said it would lay off five
percent of its staff.
Speaker 2 (19:52):
That's around six hundred workers. Meanwhile, let's take a look
at Starlink, as it's still operating.
Speaker 4 (19:57):
In multiple unauthorized regions even after the company issued warnings
last month that its satellite internet will be shut down by.
Speaker 2 (20:03):
May first in those areas.
Speaker 4 (20:05):
These notices come after a March investigation by bloombag News,
which first revealed the extent which Musk's satellites are being
used in countries where it is illegal to operate, including
in territories ruled by repressive regimes. And regulators moved to
bar a Huawei lab from approving telecom gear.
Speaker 2 (20:23):
For use in the United States.
Speaker 4 (20:24):
Now it's a proposed similar moves now against other providers
deemed a national security threat, including several Chinese companies. The
SEC says this will ensure that these non government labs
aren't quote influenced by untrustworthy actors.
Speaker 2 (20:39):
And we've got more Hunhuawei.
Speaker 3 (20:41):
This is another big Bloomberg story. Chinese seller communication as
giant Huawei is secretly funding cutting edge research at American universities,
including Harvard, through an independent Washington based foundation. Here with
the scoop is Bloomberg's k O'Keeffe in Kate. At the
heart of this reporting, like all good Bloomberg reporting, is
(21:03):
you following the money. What did following the money tell you?
Speaker 2 (21:09):
Right?
Speaker 11 (21:09):
Well, what we saw is that over the past few years,
Huawei has funded hundreds of researchers and spent millions of
dollars and it was all really without their knowledge. They
thought they were being funded by a foundation based in Washington,
DC that is called the Optica.
Speaker 4 (21:28):
Foundation competition administered by Optica and in fact Grant's I
think you say, there are eleven opportunities on the Optica
Foundation website to have early career prizes and fellowships, but
all but the Huawei funded competition are basically clear about
which backers are providing the money. What did ultimately the
(21:50):
Optica Foundation save for its quietness on Huawei's money.
Speaker 11 (21:56):
Right exactly, So the other ten opportunities are made clear
that they were funded by an individual or a company
or some combination. The Huawei funded prize appeared to all
the people that I spoke with to be funded by
the foundation's general funds, and the response from Optica's CEO
was that, look.
Speaker 7 (22:14):
You know, there's a lot of donors who.
Speaker 11 (22:16):
Want to remain anonymous, including US donors, and you know, effectively,
you know, there's no issue with it.
Speaker 3 (22:25):
There is examples in other jurisdictions of Huawei being a
bit more public having initiatives to make inbros in those markets,
I think, particularly in Europe, Kate, explain what you learned there.
Speaker 7 (22:41):
Yeah, that's right.
Speaker 11 (22:42):
I mean, as we as we reported in countries like France,
in Germany, Huawei is openly funding, you know, research centers.
Speaker 7 (22:48):
In the US, it's a really different story.
Speaker 11 (22:50):
Because several years ago the US government moved on multiple
fronts to restrict restrict Huawei. One of the major restrictions
that have been in place are at sport controls, and
that blocks people and individual people and companies from sharing
tech with Huawei.
Speaker 7 (23:06):
But what's interesting about this.
Speaker 11 (23:07):
Competition is it actually kind of falls through the cracks
of all these different regulations because it deals with academic research,
which is for the most part meant to be published,
and therefore it is not subject to the current export
controls that we have in place in the US.
Speaker 4 (23:23):
Nevertheless, and as a great quote in your piece says,
it's a bad look for prestigious research foundation to be
anonymously accepting money from a Chinese company. So really, ultimately
this is about sort of the feel of it rather
than actually the letter of the law.
Speaker 11 (23:42):
Well, right, there's nothing illegal about this as far as
I could tell in my reporting. It does, though, put
the universities who actually accept the money on behalf of
these researchers, as well as the researchers themselves in an
uncomfortable position because a lot of the university these have
decided independently that you know, they don't want to work
(24:04):
with well anymore. Some of them have made public statements
about that, and so they're in this weird spot now
where some of their researchers have gotten money already but
you know, to do good work, to do science, but
they didn't know who was ultimately funding it, and you know,
maybe something different would have happened had they known the
true source of funding.
Speaker 4 (24:24):
Kate o'keith, first, great big deep dive for us here
at Bridemerg.
Speaker 2 (24:29):
We so appreciate you joining the show. Thank you very much.
Speaker 3 (24:31):
Indeed, welcome to our Bloomberg television and radio audiences worldwide.
Quowdcom stock significantly higher around ten percent the story. Things
look like they're improving in the smartphone market globally, and
within that there's a lot of nuance. There is specific
action in China and there's strength also for the chips
that go into cars in the automotive sector. Delighted to
(24:54):
say that Quidcom CEO Christiana and one joins us. Now,
good morning to you, Christiano, and let's start with China.
What you guys said is that sales to Chinese handset
makers serves forty percent in the first half. But I
wonder what the story behind that is in the end market,
what's happening, particularly with Android based platforms for the Chinese consumer.
Speaker 12 (25:17):
Very good good morning to you as well. It's a
great morning I think today. But look the story on
hints's in China. It's pretty simple. We've seen the market
had stabilized. We had said about that a couple quarters ago,
and users aren't buying better phones. It's really for us
a story of flagship and high tiers within the Android,
(25:40):
especially a lot of those flagships that are launching with Genai.
I think we see the very beginning of Genai coming
to devices and that actually drove you know, a lot
of the growth. And it's forty percent not only in
this quarter, but actually expected to have the same in
the next. As we as we look at the guide,
(26:02):
he has been a good story as the smartphone markets
stabilize it and Android flagship has stayed resilient.
Speaker 3 (26:09):
Christiana, As you know and our audience knows, we will
talk about on device when it comes to generative AI.
Let's just linger a moment longer on China. It looks
like some of the domestic players that Android base are
gaining market share against Apple and the iPhone. You see
that in the I d C data, you see it
in the counterpoint research data. If that is the case,
(26:30):
where the domestic players are gaining that market share, what
does it mean for Qualcom.
Speaker 12 (26:36):
Look the way you should think about our position in
China in the hinter market, we have been very focused
on the premium in height tier word Snapdragon. So when
when an Android OEM from our customers show me up
a one plus Honor Vivo when they're selling a flagship device,
(26:57):
we have a lot of content. Not only we have
the more content, but we have a lot of the
application processor, the AI engine. So that has been a
positive development and that's what is being driving the content
increase and the ASP increased, especially when the mix changes
to a premium device. The fact that the Android flagship
in China with the Chinese OEMs had been stable, proven
(27:21):
to be resilient in see positive momento at the mixed
get richer Chinese users are buying a better phone. That's
a good story for Qualcom and it's reflected into numbers.
Speaker 4 (27:32):
Is there any anxiety from a political perspective, Christiano, You've
obviously weathered the fact that you're.
Speaker 2 (27:38):
Only in Huawei four G phones.
Speaker 4 (27:40):
Now you're actually seeing basically ultimately revenue pull away by
the end of this year for Huawei. But the geopolitical
context is clear. How difficult is it to you to
be so dependent on China.
Speaker 12 (27:52):
Look, the first thing I want to say is our
business is not just China, and I think what happened
with the smartphone this is a phenomenon globally. I think
you even saw Samsung when they talk about it the
earnings called they have a commentary about the device AI
opportunity for flagships.
Speaker 1 (28:09):
It is real.
Speaker 12 (28:10):
So the second part is the way we think about
everything is if you have a leadership position in technology,
you're going to have a big business in China. It's
just a function of the size of the market. And
I think that's been true not only for Qualcom, for
a lot of other companies that have leadership product position.
Speaker 1 (28:27):
And to this.
Speaker 12 (28:28):
Point, I think we have been seeing our business in
China can continue to be a stable business. We have
not been restricted by like everybody else in the industry,
you have to monitor the situation. I think this is
how we have to navigate in the semiconductor industry. But
we're happy with the results we have right now.
Speaker 4 (28:46):
Let's go therefore to the technology that is winning out,
and you talk about AI on device, how are people
using it? You've got snaptrack at eight series Gen three
mobile platform that's really meant to be supporting generative AI
at the moment, basically with a personal assystement assistant potentially,
But how is that a reality for any or many?
Speaker 12 (29:06):
Look, I love talking about this and I wish I
had a lot of time, so I'm going to try
to summarize it in just a few minutes.
Speaker 1 (29:13):
The first thing that is happening.
Speaker 12 (29:15):
You need to think about AI running on the cloud
and the device as a new way of doing computing.
And we're just at the very beginning of the use cases.
So right now we can see, for example, multiple tens
of use cases, and I expect that within six months
from now will be hundreds, if not more. What are
people doing with it? You see some use cases of
(29:37):
life translate. You can watch a video, you can add
a subtitle in any language, you want. You can do
a lot of real time photo editing. You can change
a lot of the images with the way you like it.
You can create new images, you can summarize documents. But
the most important thing is the other thing that it's
going to bring the phones. I'm going to give you
(29:59):
a point to an example. More and more you do
more things on the phone today, but there are things
that you're going to think about it. You know what,
I have to respond to this very long email. I'd
rather wait until I get to my laptop. When you
think about a Microsoft Copilot in the phone, for example,
you're going to see a lot more use of those devices.
We're going to see much much more productivity. So we're
(30:22):
the beginning of something great. It's going to take some time.
Use cases are developing. You should think about this. What
happened with the smartphone. In the beginning, there's just a
few apps in the app store, but then all of
a sudden, the apps started to define the user experience.
That's how we feel about AI were the beginning. It's
going to take a little bit of time, but the
signs are great.
Speaker 3 (30:44):
For a Bloomberg television and radio audiences worldwide, we're speaking
to the culowdcom CEO, Christiano Amon, and I think you
summed it up well. Christiana. We're in the very early
stages of the world where we're running ten billion parameter
models locally on device on the small inside. But we're
already talking about the AIPC.
Speaker 1 (31:04):
Right.
Speaker 3 (31:04):
You guys have your latest generation which will come to
market Snapdragon ten Elite and plus, and it's very impressive
combination of CPU, GPU, NPU. Give me a minute, we'll
talk about MPU. But I still think a lot of
people struggle to say, what am I going to do
sitting in a cafe running allion dollar a ten billion
(31:25):
parameter model while I have a cappuccino, Like, what's the
actual real.
Speaker 13 (31:29):
World use case?
Speaker 12 (31:31):
Okay, you know, we could not be more excited about
what's happening in PC. I really think PC is reborn
with the Snapdragon ex Elite, and it's not only because
of the performance, but because actually AI. By the way,
we can run twenty billion parameter on the ax Elite.
This is it's it's evolving very very fast. But the
(31:54):
use case are really incredible. Think about now there's AI
running all the time. Everything you're doing on your PC.
It is running and it's private, it's your data, it's
your use. The ICE learning about you, stray to understand
your intent. And we starting to see right now with
the Microsoft Copilot that you can use the Copilot for everything,
(32:16):
for PowerPoint, for Excel, for Word or email.
Speaker 1 (32:19):
But it's much more.
Speaker 12 (32:20):
The AI is helping you recall documents that you have
on that you've seen or you have on your computer.
It's going to help you do things, going to reminding
of things that you have to do or even it's
going to help you with tasks that you need. You
don't know how to do it, and they will help
you one step of the way. That's going to change
(32:40):
how we use our computers. And the interesting thing is
how do you do this in a way that you
don't compromise battery life.
Speaker 1 (32:49):
A CPU and a GPU have a job to do.
Speaker 12 (32:51):
And that's why when you buy a PC today, you
want a fest CPU and a fast GPU, but you
need a whole new engine that needs to do something
else and needs to do it all the time and
not compromise battery life.
Speaker 1 (33:02):
That's the Qualcom story, and what is.
Speaker 2 (33:04):
The market share story of Qualcolm.
Speaker 4 (33:07):
We've been hearing a lot about other competitors getting into
the AIPC space.
Speaker 12 (33:12):
I think this is the great story for Qualcom because
we're new, we're just entering the market. I think we're
going to see a lot of the devices coming up
in the second half of this year. I encourage everybody
to watch the Microsoft build and the incredible things they're
doing with the new Windows, and I think what's going
to happen is Qualcom is coming in with the leadership product.
Speaker 1 (33:37):
We like the design traction.
Speaker 12 (33:39):
Financially, that's going to be more of a fiscal twenty
five event because a lot of the laptops are going
to be in the shelves for the second half and
back to school. But the product momentum is great. And
here's how you should think about Qualcom market share in general.
One thing about the company, and it's been the history
of the company, everything that we set ourselves to do.
Speaker 1 (34:00):
The track record exactly not bad.
Speaker 12 (34:01):
When we entered the Wi Fi or, we became number one,
we entered the rfron end, we became number one automotive,
we said we're going to go into automotive. I think
our story there is very very good. We're becoming the
prefer partner of the industry. We said we're going to
enter the metaphorse we have every single design. Now we're
saying we're going to enter the PC. And we started
off the gate with the leadership in the product. So
(34:24):
you know, as we continue to execute, time is going
to show that we can gain share and can be
a significant player. After that, it's going to be industrial
as we continue to execute on the growth diversification of
the company.
Speaker 4 (34:37):
Fart intwo call com CEO Cristiano Aman, We thank you
for bringing the energy today.
Speaker 1 (34:43):
Thank you great talking to both of you.
Speaker 3 (34:53):
All right, let's get some news in the world of
private markets and venture. Blood testing company carry Us raised
one hundred million dollars in a new funding round from
investors led by existing investor Coastal Adventures, alongside five AM
Ventures and Glide Healthcare. The company declined to give its valuation,
but says that we use the cash to get its
technology for detecting hard to identify infections in to more hospitals.
(35:18):
Let's stick with all things private venture and startups and
bring in CRV general partner Max Gaza on today's VC
Spotlight producer Extraordinairy Marguerite Gallery, and he's been crunching the
numbers on IPO activity. You don't really need to crunch
the numbers because we've been quite busy of late, and
we had a pocket in September. Your affirm that invests
(35:39):
at the seed and Series A stage. What are the
numbers that you crunch when activity is happening in the market.
Speaker 1 (35:48):
Yeah, well, great to be back.
Speaker 13 (35:50):
Last time I was here in January, we mentioned that
we counted over one hundred companies that we felt were
ip already, and I'm glad to report that that number
is still holding strong. We've seen also some great activity
in the public markets with Rubric going out first software
IPO of twenty four. We saw some strength with the
(36:10):
Sterei Labs, which is an AI infrastructure hardware play arm held.
Speaker 1 (36:15):
Up post lock up.
Speaker 13 (36:16):
These are all data points that would suggest that not
only is the IPO market strong, but the M and
A market is thawing as well. So with Hashi Corporate
IBM and talks of informatic and salesforce, we feel that
the big thoughts here were very optimistic for twenty four
and into twenty five.
Speaker 3 (36:31):
And the reason that we want to have you on
the show, and I guess that you give yourselves a
little put on the back is that you identify the
names early that go on to be successful. It seems
to me though, like even pre seed, but seed in
Series A is becoming a very competitive space in the
context of AI.
Speaker 1 (36:50):
Absolutely.
Speaker 13 (36:51):
You know, look, AI is one of those things that
people are focused on.
Speaker 1 (36:54):
Every VC in the valley is looking at AI.
Speaker 13 (36:57):
We think of it not just as an innovation from
a technology point of view, there is a technology you know,
step function and change there, but also from a business
model point of view. So let me give you an example.
Most software today is sold via license model. Whether you
use it or not, you pay for the license and
you know that's that, or it's a seat based model
(37:18):
where it's per set. What if that business model changes
to a per consumption basis, so you pay for the
for every task that the AI completes. If that holds,
we're at the dawn of a new era in business
software because it's a transformational shift and how software will
be sold and AI is enabling that. So we're not
just looking at it from a technology point of view,
but a business model innovation point of view. At the
(37:40):
earliest stages, it's really hard to see that so we're
betting on founders that think in those big terms, and
we've been doing that for fifty three years.
Speaker 2 (37:48):
Max.
Speaker 4 (37:49):
What's therefore the viewpoint when you bet on those founders
of their exit right now? Because what we're seeing with
AI startups is they're having these increasingly interesting partnerships with
big legacy businesses that the likes of dwn Lobe are
currently saying are actually going to be the winners of
(38:10):
the artificial intelligence revolution. Do you think it's all about
M and A when it comes to these AI bets.
Speaker 7 (38:16):
Well, Carolyn, it's a good, great question.
Speaker 13 (38:18):
If you look historically at the VC market, most of
the exits have happened via m and A. Right, there's
a few giant winners and the power to laws take
effect with IPOs, but MNA is really important, which is
why it's important for us and encouraging for us to
see this big thaw that's happening. To your other question.
Right now, everyone's focusing on the Magnificent seven and these
big companies and the scale that they have because there's
(38:40):
so few public AI companies, right, we think that there's
hundreds to come in the in the next decade or so.
And I think that the shift will focus away from
those concentrated winners today to some of the startups that
we're seeing in the market, the private markets that are
coming behind that.
Speaker 4 (38:58):
Two, of course, keep on raising fund to keep on
allocating to the founders the very early. You've got to
have this proof of track record, which you have. And
I'm just interested as to if you've got any companies
that you're thinking about to get out the gates, how
you bracing yourself for your own IPO pipeline.
Speaker 7 (39:14):
It's a great question.
Speaker 13 (39:15):
A few things have to happen for an IPO to occur,
and they happen often very far in advance. So one
is often up leveling of leadership teams, right functional roles
in finance, in marketing and sales and product et cetera.
So we see that we see cap table fortification with
the introduction of crossover investors that are both private and
(39:36):
public investors that come on.
Speaker 3 (39:38):
In Nvidia is big one doing at the moment.
Speaker 1 (39:40):
That's right.
Speaker 13 (39:41):
And you know, the other thing that we see, which
is probably the strongest leading indicator is the number of
independent board searches. Through our executive recruiting partners, we've been
hearing the uptick in that and we feel at firsthand
as well, and with many searches that are going on
with our portfolio, a lot of companies are getting ready
for this and it's happening, and it's you know, behind
the scenes, but it will happen.
Speaker 4 (40:01):
Ah, and boy do we brace ourselves for it. CRV
general partner Maxkazor, thank you so much for spending time
with us talking all things exits. Meanwhile, coming up, let's
talk at AB and B revealing a new once in
a lifetime stay and experience category.
Speaker 2 (40:16):
I bring you all the details. Next, there's some good pictures.
There's a bluebog technology.
Speaker 3 (40:30):
The world's biggest record label, Universal Music, said it's entered
a new licensing agreement with TikTok, ending a dispute that
led to its artist songs being pulled from the social
media platform Bluemos, Alex Brinka here, Rihanna Drake joining Taylor
Swift back on the Tiktoks give me the deats.
Speaker 14 (40:49):
They are Since February, basically the music from artists under
You and g have disappeared from user speeds and from
the artists themselves because this deal was not e play.
But basically overnight. There's a new deal in place that
would give improved payments for UMG songwriters and artists, give
them access to TikTok shop, the e commerce capabilities, and
(41:11):
the two companies also say that they will work together
on promotional campaigns around new songs and records, and that
there's one more kind of piece to this whole story
that was a big concern for UMG and a lot
of kind of protect creators, and that's to do with AI.
This agreement does say that TikTok will expand its protections
when it comes to AI, because certainly songwriters are worried
(41:34):
about not only kind of fake songs being created, fake
videos and images being created, but also the fact that
it's been kind of a wackable process on TikTok to
get those taken down. So exciting move for them, and
I'm sure that a lot of the users who had
the sounds kind of disappear overnights and their songs and
the trends they were doing will be excited to get
(41:54):
those songs back to less mutes.
Speaker 4 (41:57):
Well thank you from New Meg's Alex BURINCA brilliant get
all the assessment but also going viral Airbnb announcing is
the latest category Icons, a new vertical for extraordinary experiences,
hosted by the greatest names in music, film, television, art, sports,
and more joining us now at the details blue makes
Natalie Lung, I mean, is this just a bit of
good pr or is this actually going to bring in
(42:18):
real money for Airbnb?
Speaker 5 (42:20):
Right? This is definitely part of their marketing expense. It's
expensive to build the house from up for example, from
scratch and placing it in New Mexico and hosting it
up a fifty of a crane fifty feet off the ground.
So this is definitely a marketing expense for them, but
they hope to be able to drive more traffic new users.
A user account is required to sign up and also
(42:42):
reach new audiences abroad.
Speaker 3 (42:46):
This was a big thing that played out on social media,
so they tried to do the thing from the movie up,
but it was with a crane. And then I saw
all these founders and people associated with Airbnb, pat Brian
Chesky on the back. For him, this seems like a
bit of a personal project, Natalie.
Speaker 5 (43:03):
Right, It is definitely a personal project, something that he
has done long long before this launch. They put an
Ikia home up on Airbnb, and of course last year
there was the Barbie Dreamhouse, which went viral. So this
is really him taking Airbnb beyond some of the core
experiences that we all come to know. He wants people
(43:25):
to be inspired by these homes.
Speaker 4 (43:28):
We'll see he starts wanting to get in on all
of these one of the kind experiences. Natalie n thanks
for bringing us a pretty fun story to end, as
long as you're not afraid of heights or something.
Speaker 2 (43:38):
Meanwhile, that does it for this edition of Bloomberg Technology.
Speaker 3 (43:40):
Yet, what a big show, and I imagine there will
be another big show in twenty four hours time because
Apple Reports after the bell recap, all the conversations, so
many stories, great Bloomberg reporting on the podcast. We're putting
the pod on Apple's Spotify, iHeart and the Bloomberg platforms.
And once again, just a big thank you from Karen
and so many of you reach out saying that you
(44:02):
listen to the show in podcast form and we'll keep
bringing you that part every day. Stay tuned. So much
more to come, but one day left in the week.
It's almost Friday. Gang from San Francisco and New York City.
This is Bloomberg technology,
From the heart where innovation, money and power Collie in
Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde
and Ed Ludlow.
Speaker 2 (00:25):
I'm Caroline Heinder Bloomberg's weltad quarters in New.
Speaker 3 (00:27):
York, and I'm Ed Ludlow in San Francisco. This is
Bloomberg Technology.
Speaker 2 (00:31):
Coming up. We push our head to Apple's results after
the bell.
Speaker 4 (00:33):
This is investors anxiously await iPhone sales numbers.
Speaker 5 (00:37):
US.
Speaker 3 (00:37):
We'll sit down with the CEO of qualcom Is the
chip maker, offers an upbeat forecast.
Speaker 4 (00:42):
And the CFO of door Dash joins us to run
through the company's latest results.
Speaker 2 (00:47):
All that and so much more coming up.
Speaker 4 (00:49):
There is a wealth of micro data of company news today.
Speaker 2 (00:52):
That we're going to be digging into.
Speaker 4 (00:53):
Not to mention New York based Peloton, but I'm looking
at what's happening on a broad index today.
Speaker 5 (00:57):
Ed.
Speaker 4 (00:58):
We're seeing the nasdak cup seven tenths of a percent
post the FED. We're relieved that we're not going to
see rate hikes coming, but certainly still no signal over
those rate cuts as we still see a resilient US
overall jobs picture, which we get the detail of come Friday.
Speaker 2 (01:13):
Yes there's a calling.
Speaker 4 (01:13):
Maybe the slowest increase in jobs since November, but still resilient.
We're seeing a ten year yield just down one basis point.
A little bit of movement into the mode market on
the day post fed as we anticipate the jobs data
and Bluemberg dollar index actually weaker as we see a
little bit of a relief there. We're down by four
tenths of a percent. What therefore is bitcoin doing the
versus the US dollar. Let's move it on and have
(01:34):
a little look that we're up three percent, so a
little bit of a risk on kind of a trade today,
but still sub that sixty thousand dollars level. But ed,
what are you watching on this corporate news front?
Speaker 3 (01:44):
Let's start with Peloton, an absolutely wild morning session in
the market. So far CEO Barry McCarthy is going to
step down the board. We'll find a new CEO. Fifteen
percent of global headcount going to be cut. The story overall,
things are not getting better for Peloton. Look at the
chart two day chart to illustrate the point that when
the market opened there was a session high of eighteen
percent cheering. What is another restructuring and yet we're now
(02:07):
down more than ten percent. Having had some time to
basically look at what Peloton's saying and on the hardware
side of their business, the multi channel sales side of
their business, and then subscriptions, things are not going to
be as good by the end of the year as
perhaps they had hoped, the.
Speaker 1 (02:22):
Market had hoped.
Speaker 3 (02:22):
We're gonna get deep on that later in the show
were Bloombos Mark German, but that is just a real
ride that stocked this morning. The earning story is elsewhere
as well. Quill Calm up almost ten percent. The smartphone
market seems to be recovering. There's going to be a
lot to talk about with CEO Christiano and on later
in the program in the context of AI and also
what's happening in China and then door Dash. This is
(02:43):
a tail as old as not time, but the history
of gig economy companies investors looking at ebit dar forecast
and wondering what's going on the relationship between at Basic
gig platforms and ebit dar is something we've talked about
a lot. The concern is like are they investing too much?
What's going on the bottom line, It's the US's biggest
delivery platform, mid single digit growth team growth in the
(03:05):
second quarter. Let's find out what's going on with that one, Caroline.
Speaker 4 (03:07):
Yeah, because we did actually see strong numbers for fiscal
first quarter revenue on the higher side, but it was
this worry about the forecast that is setting the shares lower.
DoorDash CFO the perfect person to speak to about it,
Rabbi in Conda. Thank you very much indeed for joining us,
Rabbi and just talk to us about why this restrained
outlook for adjusted a bit dark come the second quarter.
Speaker 2 (03:29):
And why then the ramp in the second half.
Speaker 6 (03:32):
Good morning, Carolina, thanks for having me this morning. Q
one was a very strong quarter for US across the board.
If you look at the results, demand on the platform
continues to be very strong. All time highs in terms
of users, all time high in terms of subscribers, all
time high in terms of order frequency. In Q one,
we fulfilled more orders than ever before in our history. Honestly,
(03:53):
you've been one of the strongest quarters since I've been
here for the last six years. When I look at
the underlying demand on the platform, it really is very good.
We're not seeing weakness on the consumer side, whether it's
you know, low income or high income, or the East
Coast or the west. Goal, we're team trend across all markets.
We operate in thirty countries across all life of business,
(04:14):
and at the same time, we posted the lowest netlots
in our history, which is being aided by the highest
adjuctity bite in our history. Overall, the business continues to
do really well, and I'm excited about not just the
Q one results, but they're going forward Q two as
well as the rest of twenty four.
Speaker 4 (04:30):
So did you get frustrated when the shares full because
the market wanted to see more in terms of profitability
for the forecast.
Speaker 6 (04:38):
Our goal has always been to continue to build the
best product possible, and you're seeing that in our results.
Speaker 1 (04:44):
Users, Like I said, I've been in an all time high.
Speaker 6 (04:46):
We ended twenty three with over thirty seven million consumers
and that number continues to grow considerably since that point.
We're not seeing any weakness, whether it's the large, you know,
enterprise merchants on the platform or the local merchants on
the platform. You're seeing wrong double digits scapes, stores, sales
growth across the world. Our grocery business is growing at
one hundred percent year on ear for the third straight
(05:08):
quarter in a row. Our goal will continue to be
to build the best product possible that consider all three
sides of the audience, whether it's consumers, merchants or adaptors.
Speaker 3 (05:18):
Robbie, I'm building the best product possible. It's easier way
in on the adjusteday with the forecast. There's some sense
that you're investing in specific areas and that might be
impacting the bottom line. Right you're investing at the technology layer.
What are you doing and what's the goal there?
Speaker 1 (05:35):
Yeah?
Speaker 6 (05:35):
In Q one, you know, one of the key things
that impacted the overall business is we did absorb some
costs in New York as well as Seattle.
Speaker 1 (05:43):
That cost is.
Speaker 6 (05:44):
Going to continue to reduce as we go through the
rest of the year, as we make the business more efficient,
as we consider other opportunities to consider to make.
Speaker 1 (05:51):
Those costs go down.
Speaker 6 (05:53):
If you recall our business, the core restaurant's business has
actually been profitable for many years now. We're taking the
it's from that business and building two new businesses, grocery
as well as international, both of which are growing extremely fast.
They're growing faster than our restaurant's business. At the same time,
the profitability of both of those businesses is going up.
(06:14):
If you look at our new verticals business, the third
party component of it has been gross profit positive for
a few quarters now. Same is the case with international,
where many countries the restaurant business is actually contribution margin positive.
So overall the restaurant business profitability is improving. Our new
vehicles as well as international is also improving in profitability.
Speaker 3 (06:36):
Just really quick. You mentioned Seattle in New York. There's
a kind of idiosyncratic factors in the quarter. Just explain
the basics to audience of what happened there. On the
policy front, Yeah, on the.
Speaker 6 (06:47):
Policy, if I look up, our goal is always to
work with policymakers and regulators. We do that in over
hundreds of cities across thirty different countries to ensure we're
protecting the flexibility and accessibility the doctors and couriers across.
Speaker 1 (07:02):
The globe we're asking for. I just HELFU are.
Speaker 6 (07:05):
Honestly like extreme examples of that regulation.
Speaker 1 (07:08):
We've taken some action to.
Speaker 6 (07:10):
Change the way in which we operate. We're making the
business more efficient, and our goal is to continue to
work with policymakers in.
Speaker 4 (07:17):
That regard, Let's just get details on operating profits. You
say they'll come in the near future. The market expects
the third quarter, are they right to expect that?
Speaker 6 (07:27):
Look, I mean, our gap net loss is the lowest
in our history. What you're seeing in the business is
the growth is strong. Profitability across all lines of business
is improving. I do expect the trend to continue. And
if that trend continues on both the growth as well
as the profitability, the overall business is going to be
gap positive.
Speaker 1 (07:46):
It's just a question of time.
Speaker 6 (07:48):
Our free cap flow has been very strong. If you
look at the quarter, we've generated roughly about half a
billion dollars of free cash flow. And that's truly our
north star in being able to rabas in the business.
Speaker 3 (08:00):
Robbi real quick, what are the specific consumer habits, the
size of the basket that they're doing, Lots of frequency,
little spend like little things like that.
Speaker 6 (08:10):
Sure, what you're seeing in the business today is more
consumers ordering from more categories. Historically, people thought of us
purely as a restaurant delivery platform. Today are consumers roughly
about twenty percent of our consumers are ordering from convenience
grocery alcohol. We have increased the basket sizes across Robbi.
Speaker 3 (08:30):
Rabbisfi, Robbi and a condo.
Speaker 7 (08:32):
We've got to go.
Speaker 8 (08:32):
Thank you.
Speaker 7 (08:33):
Caron.
Speaker 4 (08:33):
Yeah, if we have some breaking news, let's go to
the President Biden delivering remarks right now.
Speaker 8 (08:39):
The first is the right to free speech and for
people to peacefully assemble and make their voices heard. The
second is the rule of law. Both must be upheld.
We are not an authoritarian nation where we silence people
or squash descent American people are heard. In fact, protests
(09:00):
is in the best tradition of how Americans respond to
consequential issues. But neither are we a lawless country. We
are a civil society. An order must prevail. Throughout our history.
We've often faced moments like this because we are a big, diverse,
free thinking and freedom loving nation, and moments like this
(09:23):
there are always those who rush in to score political points.
But this isn't a moment for politics. It's a moment
for clarity. So let me be clear. Peaceful protest in America.
Violent protest is not protected. Peaceful protest is. It's against
the law, violence occurs, Destroying property is not a peaceful protest.
Speaker 1 (09:46):
It's against the law.
Speaker 8 (09:48):
Vandalism, trespassing, breaking windows, shutting down campuses, forcing the cancelation
of classes and graduations. None of this is a peaceful protest.
Threatening people, instilling, firing people is not peaceful protest.
Speaker 1 (10:04):
It's against the law.
Speaker 8 (10:06):
Descent is essential to democracy, but descent must never lead
to disorder or to denying the rights of others, so
students can finish the semester and their college education. Look,
it's basically a matter of fairness. It's a matter of
what's right. There's the right to protest, but not the
right to cause chaos. People have the right to get
(10:27):
an education, the right to get a degree, the right
to walk across the campus safely without fear of being attacked.
But let's be clear about this as well. There should
be no place in any campus, no place in America
for anti semitism or threats of violence against Jewish students.
There is no place for hate speech or violence of
(10:49):
any kind, whether it's anti Semitism, Islamophobia, or discrimination against
Arab Americans or Palestinian Americans. It's simply wrong. There's no
place for racism in America. It's all wrong. It's not American.
I understand people have strong feelings and deep convictions in America.
We respect the right and protect the right for them
(11:11):
to express that. But it doesn't mean anything goes. It
needs to be done without violence, without destruction, without hate,
and within the law. You know, I'll make no mistake
as president. I will always defend free speech and I
will always be just as strong as standing up for
the rule of law. That's my responsibility to you, the
(11:34):
American people, and my obligation of the Constitution.
Speaker 1 (11:38):
Thank you very much.
Speaker 9 (11:40):
The protest forced you to be consider any of the
policies in regard to the region.
Speaker 1 (11:46):
No, thank you.
Speaker 7 (11:48):
Do you think the national.
Speaker 4 (11:54):
President might delivering remarks at the White House regarding protests
student protests that's bring in Bluemug's Kaye lines for more
and against violence and destruction, but well full peaceful protest.
Speaker 9 (12:09):
Yeah, the President making it clear that he does stand
by Americans' right to free speech and that that should
not be interfered with. But yes, Caroline, essentially that it
should be done peacefully. The President, and making these remarks
in the Roosevelt Room, said descent must never lead to
disorder or denial of rights, that the right to protest
does not mean the right to cause chaos, going on
(12:29):
to say that there is no place for anti Semitism
in America. He makes these remarks as he is facing
growing pressure to address what we're seeing happening on college
campuses across the country, from Columbia University to the West Coast,
with what we've seen at UCLA in the wee hours
this morning. All of it just speaking to the pressure
that he is under as he is trying to stand
by Israel as an ally, but there is growing concern
(12:51):
about the way Israel is conducting itself in its war
against a moss in Gaza. We just heard there the
President being asked by a reporter whether or not this
has all made him rethink his policy on Israel.
Speaker 2 (13:02):
He said no.
Speaker 9 (13:03):
He also said no to the question he was asked
about whether the National Guard should be interfering in these
instances on the college campuses. He said no to that
as well. I would also point out we will be
hearing from President Biden on the issue of anti Semitism
again next week on Tuesday, May seventh. He is planning
to speak at the Capital as part of the National
Holocaust Remembrance ceremony that will be happening on that date.
(13:29):
We heard from the White House Press Secretary of Karee
John Pierre yesterday who said the President will discuss the
moral duty to combat the rising scores of anti Semitism
and the administration's work on that issue. Of course, we
probably got a preview of some of what he will
likely say when we just heard him speak today.
Speaker 3 (13:45):
Bloom bells Ka lines, thank you for the context on that.
It's interesting because we've been talking about protests at different
university campuses across the country and indeed across the world
for several days at least. Now, what was the politics
of this with the president, but what was the pressure
on the hill and the conversation about whether or not
Biden would come out and say anything, and the timing
(14:07):
of it.
Speaker 9 (14:09):
Well, we had heard President Biden speak on this before,
saying that he condemns anti Semitism, although he also had
suggested that people need to understand what's going on with
the Palestinian people. But certainly the domestic political pressure has
been growing. We have seen specifically Republican members of Congress
really taking hold of this issue. We have seen the
House Speaker Mike Johnson, together with other Republican members of
(14:31):
the New York delegation actually going to the campus of
Columbia University just last week, and just last night, the
House passed by a wide bipartisan margin, a bill that
would essentially help the definition of anti Semitism be applied
differently with the Department of Education. There was some concern
that that would become a free speech issue, that it
would limit criticism of Israel or the Israeli government, for example,
(14:54):
but it still got through with a bipartisan majority. It's
unclear whether or not that will move forward in the Senate,
but you are definitely seeing through the legislature efforts to
combat anti Semitism. A lot of blame being cast on
President Biden, whether rightly or not, for what we're seeing
on college campuses, and of course he's been dealing with
the political ramifications of his wider policy toward Israel consistently
(15:16):
throughout this primary season, as we have seen actual Democratic
primary voters voting against alternatives, whether it be uncommitted or
something to the effect in different states like Michigan and others,
to express their discontent with how the president has been
handling his Israeli policy.
Speaker 2 (15:31):
Talking of Israeli policy.
Speaker 4 (15:33):
Breaking news that Turkey has indeed halted all trade with Israel.
That's both exports and imports to and from Israel as
of Thursday. That's according to two Turkish officials familiar with
the matter. Katie Lines bringing us the latest from what
the president has been saying. Meanwhile, now we want to
return our attention toward is in an investor's focus right now.
Speaker 2 (15:53):
We are still a mid earning season.
Speaker 4 (15:55):
Today is Apple reporting quarterly results after the market closes
later today, giving investors kind of a better sense of
how the iPhone maker is weathering at sales slump. We've also, though,
got to be talking about what on earth is happening
over at Peloton. It's its shares slump too. Bloomberg's Mark
Gum and for more on what to expect, let's just
kick off with Apple because it is the huge company
that many focus on.
Speaker 2 (16:16):
What are we lining up for?
Speaker 10 (16:18):
Yeah, Apple earnings? The expectation for the fifth time in
six quarters, Apple is going to report an annual decline.
Revenue is expected by Wall Street to come in at
about ninety billion in change, which would be about a
five billion dollar dip on year over year. The other
thing that's not so hot here. All of Apple's product categories,
(16:38):
so hardware categories, from the iPhone to the iPad, the Mac, wearables, AirPods,
those are expected to decline on an annual basis, with
the only bright spot potentially being actually some pretty significant
growth in the services business. Also another decline in Greater China,
right on the heels of reports from Counterpoint in IDC
(16:58):
and others that iPhone sales in China dipped by about
a fifth despite the smartphone market going up in general.
So overall ninety billion in revenue. That's a big number.
That's amazing for most companies, but for Apple, Wall Street
probably would have liked a little bit more.
Speaker 3 (17:15):
Mark Hardware and Services is a pretty wild story when
it comes to Peloton Bluembo technology team. Let's show the
two day chart and just go back over what happened.
Opened up as high as eighteen percent, is now down
more than ten percent in the session. The CEO is
going after two years, another headcount reduction, and I think
no sign really that Peloton's got a strategy to get
(17:37):
itself out of trouble. Give me the details.
Speaker 10 (17:41):
I don't think people realize how close Peloton is to bankruptcy. Right,
they'll be lucky to remain on the stock market much longer.
If you ask me, I'm shocked that Barry McCarthy stuck
around so long. There is nothing he didn't try. There
is nothing he didn't do. He's laid off several thousand people,
He's moved from a hardware focus to a content and
(18:03):
subscription focus, restructured the company multiple times, hired new executives
to write the ship, outsourced pretty much everything you could outsource,
from installation to shipping to manufacturing. And here we are
missing Wall Street expectations, missing internal forecasts. People still not
(18:24):
buying as many bikes and rows and different Peloton appliances
as you would expect, the premium app falling flat on
its face. Yes, people like their marketing chief continuing to
leave Pelotons in its worshape as it's ever been. And
they have no CEO running the company.
Speaker 3 (18:43):
Just looking at the Bloomberg terminal, and just to give
some specifics, the stock is at a record low. They
ended the quarter with about seven hundred million dollars seven
hundred and thirty seven million dollars of cash, and they
did say that because of the headcut count reduction, they'll
say about two hundred million dollars a year and cash
flow positivity is possible by the fourth quarter. But as
(19:04):
you outline, Mark, the situation of Peloton, which is a
company way off its pandemic era high, is pretty bleak.
Bloombo's Mark German. Stay tuned for his reporting on a
Apple as well after the belt. Now coming up, chip
maker Quial com up with earnings in a strong forecast.
There's a lot to talk about with CEO Christiano Ramon
about the AI smartphone and the AIPC. That conversation is
(19:24):
coming up. This is Bloomberg Technology.
Speaker 2 (19:36):
Time now for talking tech.
Speaker 4 (19:38):
First up, video game publisher Take too Interactive and plans
to shut down two subsidiaries as part of a mass
layoff across its divisions over in London and Seattle.
Speaker 2 (19:46):
That's according to documents review by Bloomberg Now.
Speaker 4 (19:48):
Last month, Take two said it would lay off five
percent of its staff.
Speaker 2 (19:52):
That's around six hundred workers. Meanwhile, let's take a look
at Starlink, as it's still operating.
Speaker 4 (19:57):
In multiple unauthorized regions even after the company issued warnings
last month that its satellite internet will be shut down by.
Speaker 2 (20:03):
May first in those areas.
Speaker 4 (20:05):
These notices come after a March investigation by bloombag News,
which first revealed the extent which Musk's satellites are being
used in countries where it is illegal to operate, including
in territories ruled by repressive regimes. And regulators moved to
bar a Huawei lab from approving telecom gear.
Speaker 2 (20:23):
For use in the United States.
Speaker 4 (20:24):
Now it's a proposed similar moves now against other providers
deemed a national security threat, including several Chinese companies. The
SEC says this will ensure that these non government labs
aren't quote influenced by untrustworthy actors.
Speaker 2 (20:39):
And we've got more Hunhuawei.
Speaker 3 (20:41):
This is another big Bloomberg story. Chinese seller communication as
giant Huawei is secretly funding cutting edge research at American universities,
including Harvard, through an independent Washington based foundation. Here with
the scoop is Bloomberg's k O'Keeffe in Kate. At the
heart of this reporting, like all good Bloomberg reporting, is
(21:03):
you following the money. What did following the money tell you?
Speaker 2 (21:09):
Right?
Speaker 11 (21:09):
Well, what we saw is that over the past few years,
Huawei has funded hundreds of researchers and spent millions of
dollars and it was all really without their knowledge. They
thought they were being funded by a foundation based in Washington,
DC that is called the Optica.
Speaker 4 (21:28):
Foundation competition administered by Optica and in fact Grant's I
think you say, there are eleven opportunities on the Optica
Foundation website to have early career prizes and fellowships, but
all but the Huawei funded competition are basically clear about
which backers are providing the money. What did ultimately the
(21:50):
Optica Foundation save for its quietness on Huawei's money.
Speaker 11 (21:56):
Right exactly, So the other ten opportunities are made clear
that they were funded by an individual or a company
or some combination. The Huawei funded prize appeared to all
the people that I spoke with to be funded by
the foundation's general funds, and the response from Optica's CEO
was that, look.
Speaker 7 (22:14):
You know, there's a lot of donors who.
Speaker 11 (22:16):
Want to remain anonymous, including US donors, and you know, effectively,
you know, there's no issue with it.
Speaker 3 (22:25):
There is examples in other jurisdictions of Huawei being a
bit more public having initiatives to make inbros in those markets,
I think, particularly in Europe, Kate, explain what you learned there.
Speaker 7 (22:41):
Yeah, that's right.
Speaker 11 (22:42):
I mean, as we as we reported in countries like France,
in Germany, Huawei is openly funding, you know, research centers.
Speaker 7 (22:48):
In the US, it's a really different story.
Speaker 11 (22:50):
Because several years ago the US government moved on multiple
fronts to restrict restrict Huawei. One of the major restrictions
that have been in place are at sport controls, and
that blocks people and individual people and companies from sharing
tech with Huawei.
Speaker 7 (23:06):
But what's interesting about this.
Speaker 11 (23:07):
Competition is it actually kind of falls through the cracks
of all these different regulations because it deals with academic research,
which is for the most part meant to be published,
and therefore it is not subject to the current export
controls that we have in place in the US.
Speaker 4 (23:23):
Nevertheless, and as a great quote in your piece says,
it's a bad look for prestigious research foundation to be
anonymously accepting money from a Chinese company. So really, ultimately
this is about sort of the feel of it rather
than actually the letter of the law.
Speaker 11 (23:42):
Well, right, there's nothing illegal about this as far as
I could tell in my reporting. It does, though, put
the universities who actually accept the money on behalf of
these researchers, as well as the researchers themselves in an
uncomfortable position because a lot of the university these have
decided independently that you know, they don't want to work
(24:04):
with well anymore. Some of them have made public statements
about that, and so they're in this weird spot now
where some of their researchers have gotten money already but
you know, to do good work, to do science, but
they didn't know who was ultimately funding it, and you know,
maybe something different would have happened had they known the
true source of funding.
Speaker 4 (24:24):
Kate o'keith, first, great big deep dive for us here
at Bridemerg.
Speaker 2 (24:29):
We so appreciate you joining the show. Thank you very much.
Speaker 3 (24:31):
Indeed, welcome to our Bloomberg television and radio audiences worldwide.
Quowdcom stock significantly higher around ten percent the story. Things
look like they're improving in the smartphone market globally, and
within that there's a lot of nuance. There is specific
action in China and there's strength also for the chips
that go into cars in the automotive sector. Delighted to
(24:54):
say that Quidcom CEO Christiana and one joins us. Now,
good morning to you, Christiano, and let's start with China.
What you guys said is that sales to Chinese handset
makers serves forty percent in the first half. But I
wonder what the story behind that is in the end market,
what's happening, particularly with Android based platforms for the Chinese consumer.
Speaker 12 (25:17):
Very good good morning to you as well. It's a
great morning I think today. But look the story on
hints's in China. It's pretty simple. We've seen the market
had stabilized. We had said about that a couple quarters ago,
and users aren't buying better phones. It's really for us
a story of flagship and high tiers within the Android,
(25:40):
especially a lot of those flagships that are launching with Genai.
I think we see the very beginning of Genai coming
to devices and that actually drove you know, a lot
of the growth. And it's forty percent not only in
this quarter, but actually expected to have the same in
the next. As we as we look at the guide,
(26:02):
he has been a good story as the smartphone markets
stabilize it and Android flagship has stayed resilient.
Speaker 3 (26:09):
Christiana, As you know and our audience knows, we will
talk about on device when it comes to generative AI.
Let's just linger a moment longer on China. It looks
like some of the domestic players that Android base are
gaining market share against Apple and the iPhone. You see
that in the I d C data, you see it
in the counterpoint research data. If that is the case,
(26:30):
where the domestic players are gaining that market share, what
does it mean for Qualcom.
Speaker 12 (26:36):
Look the way you should think about our position in
China in the hinter market, we have been very focused
on the premium in height tier word Snapdragon. So when
when an Android OEM from our customers show me up
a one plus Honor Vivo when they're selling a flagship device,
(26:57):
we have a lot of content. Not only we have
the more content, but we have a lot of the
application processor, the AI engine. So that has been a
positive development and that's what is being driving the content
increase and the ASP increased, especially when the mix changes
to a premium device. The fact that the Android flagship
in China with the Chinese OEMs had been stable, proven
(27:21):
to be resilient in see positive momento at the mixed
get richer Chinese users are buying a better phone. That's
a good story for Qualcom and it's reflected into numbers.
Speaker 4 (27:32):
Is there any anxiety from a political perspective, Christiano, You've
obviously weathered the fact that you're.
Speaker 2 (27:38):
Only in Huawei four G phones.
Speaker 4 (27:40):
Now you're actually seeing basically ultimately revenue pull away by
the end of this year for Huawei. But the geopolitical
context is clear. How difficult is it to you to
be so dependent on China.
Speaker 12 (27:52):
Look, the first thing I want to say is our
business is not just China, and I think what happened
with the smartphone this is a phenomenon globally. I think
you even saw Samsung when they talk about it the
earnings called they have a commentary about the device AI
opportunity for flagships.
Speaker 1 (28:09):
It is real.
Speaker 12 (28:10):
So the second part is the way we think about
everything is if you have a leadership position in technology,
you're going to have a big business in China. It's
just a function of the size of the market. And
I think that's been true not only for Qualcom, for
a lot of other companies that have leadership product position.
Speaker 1 (28:27):
And to this.
Speaker 12 (28:28):
Point, I think we have been seeing our business in
China can continue to be a stable business. We have
not been restricted by like everybody else in the industry,
you have to monitor the situation. I think this is
how we have to navigate in the semiconductor industry. But
we're happy with the results we have right now.
Speaker 4 (28:46):
Let's go therefore to the technology that is winning out,
and you talk about AI on device, how are people
using it? You've got snaptrack at eight series Gen three
mobile platform that's really meant to be supporting generative AI
at the moment, basically with a personal assystement assistant potentially,
But how is that a reality for any or many?
Speaker 12 (29:06):
Look, I love talking about this and I wish I
had a lot of time, so I'm going to try
to summarize it in just a few minutes.
Speaker 1 (29:13):
The first thing that is happening.
Speaker 12 (29:15):
You need to think about AI running on the cloud
and the device as a new way of doing computing.
And we're just at the very beginning of the use cases.
So right now we can see, for example, multiple tens
of use cases, and I expect that within six months
from now will be hundreds, if not more. What are
people doing with it? You see some use cases of
(29:37):
life translate. You can watch a video, you can add
a subtitle in any language, you want. You can do
a lot of real time photo editing. You can change
a lot of the images with the way you like it.
You can create new images, you can summarize documents. But
the most important thing is the other thing that it's
going to bring the phones. I'm going to give you
(29:59):
a point to an example. More and more you do
more things on the phone today, but there are things
that you're going to think about it. You know what,
I have to respond to this very long email. I'd
rather wait until I get to my laptop. When you
think about a Microsoft Copilot in the phone, for example,
you're going to see a lot more use of those devices.
We're going to see much much more productivity. So we're
(30:22):
the beginning of something great. It's going to take some time.
Use cases are developing. You should think about this. What
happened with the smartphone. In the beginning, there's just a
few apps in the app store, but then all of
a sudden, the apps started to define the user experience.
That's how we feel about AI were the beginning. It's
going to take a little bit of time, but the
signs are great.
Speaker 3 (30:44):
For a Bloomberg television and radio audiences worldwide, we're speaking
to the culowdcom CEO, Christiano Amon, and I think you
summed it up well. Christiana. We're in the very early
stages of the world where we're running ten billion parameter
models locally on device on the small inside. But we're
already talking about the AIPC.
Speaker 1 (31:04):
Right.
Speaker 3 (31:04):
You guys have your latest generation which will come to
market Snapdragon ten Elite and plus, and it's very impressive
combination of CPU, GPU, NPU. Give me a minute, we'll
talk about MPU. But I still think a lot of
people struggle to say, what am I going to do
sitting in a cafe running allion dollar a ten billion
(31:25):
parameter model while I have a cappuccino, Like, what's the
actual real.
Speaker 13 (31:29):
World use case?
Speaker 12 (31:31):
Okay, you know, we could not be more excited about
what's happening in PC. I really think PC is reborn
with the Snapdragon ex Elite, and it's not only because
of the performance, but because actually AI. By the way,
we can run twenty billion parameter on the ax Elite.
This is it's it's evolving very very fast. But the
(31:54):
use case are really incredible. Think about now there's AI
running all the time. Everything you're doing on your PC.
It is running and it's private, it's your data, it's
your use. The ICE learning about you, stray to understand
your intent. And we starting to see right now with
the Microsoft Copilot that you can use the Copilot for everything,
(32:16):
for PowerPoint, for Excel, for Word or email.
Speaker 1 (32:19):
But it's much more.
Speaker 12 (32:20):
The AI is helping you recall documents that you have
on that you've seen or you have on your computer.
It's going to help you do things, going to reminding
of things that you have to do or even it's
going to help you with tasks that you need. You
don't know how to do it, and they will help
you one step of the way. That's going to change
(32:40):
how we use our computers. And the interesting thing is
how do you do this in a way that you
don't compromise battery life.
Speaker 1 (32:49):
A CPU and a GPU have a job to do.
Speaker 12 (32:51):
And that's why when you buy a PC today, you
want a fest CPU and a fast GPU, but you
need a whole new engine that needs to do something
else and needs to do it all the time and
not compromise battery life.
Speaker 1 (33:02):
That's the Qualcom story, and what is.
Speaker 2 (33:04):
The market share story of Qualcolm.
Speaker 4 (33:07):
We've been hearing a lot about other competitors getting into
the AIPC space.
Speaker 12 (33:12):
I think this is the great story for Qualcom because
we're new, we're just entering the market. I think we're
going to see a lot of the devices coming up
in the second half of this year. I encourage everybody
to watch the Microsoft build and the incredible things they're
doing with the new Windows, and I think what's going
to happen is Qualcom is coming in with the leadership product.
Speaker 1 (33:37):
We like the design traction.
Speaker 12 (33:39):
Financially, that's going to be more of a fiscal twenty
five event because a lot of the laptops are going
to be in the shelves for the second half and
back to school. But the product momentum is great. And
here's how you should think about Qualcom market share in general.
One thing about the company, and it's been the history
of the company, everything that we set ourselves to do.
Speaker 1 (34:00):
The track record exactly not bad.
Speaker 12 (34:01):
When we entered the Wi Fi or, we became number one,
we entered the rfron end, we became number one automotive,
we said we're going to go into automotive. I think
our story there is very very good. We're becoming the
prefer partner of the industry. We said we're going to
enter the metaphorse we have every single design. Now we're
saying we're going to enter the PC. And we started
off the gate with the leadership in the product. So
(34:24):
you know, as we continue to execute, time is going
to show that we can gain share and can be
a significant player. After that, it's going to be industrial
as we continue to execute on the growth diversification of
the company.
Speaker 4 (34:37):
Fart intwo call com CEO Cristiano Aman, We thank you
for bringing the energy today.
Speaker 1 (34:43):
Thank you great talking to both of you.
Speaker 3 (34:53):
All right, let's get some news in the world of
private markets and venture. Blood testing company carry Us raised
one hundred million dollars in a new funding round from
investors led by existing investor Coastal Adventures, alongside five AM
Ventures and Glide Healthcare. The company declined to give its valuation,
but says that we use the cash to get its
technology for detecting hard to identify infections in to more hospitals.
(35:18):
Let's stick with all things private venture and startups and
bring in CRV general partner Max Gaza on today's VC
Spotlight producer Extraordinairy Marguerite Gallery, and he's been crunching the
numbers on IPO activity. You don't really need to crunch
the numbers because we've been quite busy of late, and
we had a pocket in September. Your affirm that invests
(35:39):
at the seed and Series A stage. What are the
numbers that you crunch when activity is happening in the market.
Speaker 1 (35:48):
Yeah, well, great to be back.
Speaker 13 (35:50):
Last time I was here in January, we mentioned that
we counted over one hundred companies that we felt were
ip already, and I'm glad to report that that number
is still holding strong. We've seen also some great activity
in the public markets with Rubric going out first software
IPO of twenty four. We saw some strength with the
(36:10):
Sterei Labs, which is an AI infrastructure hardware play arm held.
Speaker 1 (36:15):
Up post lock up.
Speaker 13 (36:16):
These are all data points that would suggest that not
only is the IPO market strong, but the M and
A market is thawing as well. So with Hashi Corporate
IBM and talks of informatic and salesforce, we feel that
the big thoughts here were very optimistic for twenty four
and into twenty five.
Speaker 3 (36:31):
And the reason that we want to have you on
the show, and I guess that you give yourselves a
little put on the back is that you identify the
names early that go on to be successful. It seems
to me though, like even pre seed, but seed in
Series A is becoming a very competitive space in the
context of AI.
Speaker 1 (36:50):
Absolutely.
Speaker 13 (36:51):
You know, look, AI is one of those things that
people are focused on.
Speaker 1 (36:54):
Every VC in the valley is looking at AI.
Speaker 13 (36:57):
We think of it not just as an innovation from
a technology point of view, there is a technology you know,
step function and change there, but also from a business
model point of view. So let me give you an example.
Most software today is sold via license model. Whether you
use it or not, you pay for the license and
you know that's that, or it's a seat based model
(37:18):
where it's per set. What if that business model changes
to a per consumption basis, so you pay for the
for every task that the AI completes. If that holds,
we're at the dawn of a new era in business
software because it's a transformational shift and how software will
be sold and AI is enabling that. So we're not
just looking at it from a technology point of view,
but a business model innovation point of view. At the
(37:40):
earliest stages, it's really hard to see that so we're
betting on founders that think in those big terms, and
we've been doing that for fifty three years.
Speaker 2 (37:48):
Max.
Speaker 4 (37:49):
What's therefore the viewpoint when you bet on those founders
of their exit right now? Because what we're seeing with
AI startups is they're having these increasingly interesting partnerships with
big legacy businesses that the likes of dwn Lobe are
currently saying are actually going to be the winners of
(38:10):
the artificial intelligence revolution. Do you think it's all about
M and A when it comes to these AI bets.
Speaker 7 (38:16):
Well, Carolyn, it's a good, great question.
Speaker 13 (38:18):
If you look historically at the VC market, most of
the exits have happened via m and A. Right, there's
a few giant winners and the power to laws take
effect with IPOs, but MNA is really important, which is
why it's important for us and encouraging for us to
see this big thaw that's happening. To your other question.
Right now, everyone's focusing on the Magnificent seven and these
big companies and the scale that they have because there's
(38:40):
so few public AI companies, right, we think that there's
hundreds to come in the in the next decade or so.
And I think that the shift will focus away from
those concentrated winners today to some of the startups that
we're seeing in the market, the private markets that are
coming behind that.
Speaker 4 (38:58):
Two, of course, keep on raising fund to keep on
allocating to the founders the very early. You've got to
have this proof of track record, which you have. And
I'm just interested as to if you've got any companies
that you're thinking about to get out the gates, how
you bracing yourself for your own IPO pipeline.
Speaker 7 (39:14):
It's a great question.
Speaker 13 (39:15):
A few things have to happen for an IPO to occur,
and they happen often very far in advance. So one
is often up leveling of leadership teams, right functional roles
in finance, in marketing and sales and product et cetera.
So we see that we see cap table fortification with
the introduction of crossover investors that are both private and
(39:36):
public investors that come on.
Speaker 3 (39:38):
In Nvidia is big one doing at the moment.
Speaker 1 (39:40):
That's right.
Speaker 13 (39:41):
And you know, the other thing that we see, which
is probably the strongest leading indicator is the number of
independent board searches. Through our executive recruiting partners, we've been
hearing the uptick in that and we feel at firsthand
as well, and with many searches that are going on
with our portfolio, a lot of companies are getting ready
for this and it's happening, and it's you know, behind
the scenes, but it will happen.
Speaker 4 (40:01):
Ah, and boy do we brace ourselves for it. CRV
general partner Maxkazor, thank you so much for spending time
with us talking all things exits. Meanwhile, coming up, let's
talk at AB and B revealing a new once in
a lifetime stay and experience category.
Speaker 2 (40:16):
I bring you all the details. Next, there's some good pictures.
There's a bluebog technology.
Speaker 3 (40:30):
The world's biggest record label, Universal Music, said it's entered
a new licensing agreement with TikTok, ending a dispute that
led to its artist songs being pulled from the social
media platform Bluemos, Alex Brinka here, Rihanna Drake joining Taylor
Swift back on the Tiktoks give me the deats.
Speaker 14 (40:49):
They are Since February, basically the music from artists under
You and g have disappeared from user speeds and from
the artists themselves because this deal was not e play.
But basically overnight. There's a new deal in place that
would give improved payments for UMG songwriters and artists, give
them access to TikTok shop, the e commerce capabilities, and
(41:11):
the two companies also say that they will work together
on promotional campaigns around new songs and records, and that
there's one more kind of piece to this whole story
that was a big concern for UMG and a lot
of kind of protect creators, and that's to do with AI.
This agreement does say that TikTok will expand its protections
when it comes to AI, because certainly songwriters are worried
(41:34):
about not only kind of fake songs being created, fake
videos and images being created, but also the fact that
it's been kind of a wackable process on TikTok to
get those taken down. So exciting move for them, and
I'm sure that a lot of the users who had
the sounds kind of disappear overnights and their songs and
the trends they were doing will be excited to get
(41:54):
those songs back to less mutes.
Speaker 4 (41:57):
Well thank you from New Meg's Alex BURINCA brilliant get
all the assessment but also going viral Airbnb announcing is
the latest category Icons, a new vertical for extraordinary experiences,
hosted by the greatest names in music, film, television, art, sports,
and more joining us now at the details blue makes
Natalie Lung, I mean, is this just a bit of
good pr or is this actually going to bring in
(42:18):
real money for Airbnb?
Speaker 5 (42:20):
Right? This is definitely part of their marketing expense. It's
expensive to build the house from up for example, from
scratch and placing it in New Mexico and hosting it
up a fifty of a crane fifty feet off the ground.
So this is definitely a marketing expense for them, but
they hope to be able to drive more traffic new users.
A user account is required to sign up and also
(42:42):
reach new audiences abroad.
Speaker 3 (42:46):
This was a big thing that played out on social media,
so they tried to do the thing from the movie up,
but it was with a crane. And then I saw
all these founders and people associated with Airbnb, pat Brian
Chesky on the back. For him, this seems like a
bit of a personal project, Natalie.
Speaker 5 (43:03):
Right, It is definitely a personal project, something that he
has done long long before this launch. They put an
Ikia home up on Airbnb, and of course last year
there was the Barbie Dreamhouse, which went viral. So this
is really him taking Airbnb beyond some of the core
experiences that we all come to know. He wants people
(43:25):
to be inspired by these homes.
Speaker 4 (43:28):
We'll see he starts wanting to get in on all
of these one of the kind experiences. Natalie n thanks
for bringing us a pretty fun story to end, as
long as you're not afraid of heights or something.
Speaker 2 (43:38):
Meanwhile, that does it for this edition of Bloomberg Technology.
Speaker 3 (43:40):
Yet, what a big show, and I imagine there will
be another big show in twenty four hours time because
Apple Reports after the bell recap, all the conversations, so
many stories, great Bloomberg reporting on the podcast. We're putting
the pod on Apple's Spotify, iHeart and the Bloomberg platforms.
And once again, just a big thank you from Karen
and so many of you reach out saying that you
(44:02):
listen to the show in podcast form and we'll keep
bringing you that part every day. Stay tuned. So much
more to come, but one day left in the week.
It's almost Friday. Gang from San Francisco and New York City.
This is Bloomberg technology,
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