May 17, 2024 • 43 mins
Bloomberg's Caroline Hyde and Ed Ludlow break down Applied Materials' earnings which fail to impress investors. Plus, OpenAI and Reddit announce a partnership to bring its content to ChatGPT and other products, and CoreWeave secures nearly $8 billion in private debt.
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Speaker 1 (00:01):
From Markhard We're Innovation of Money and Power colle in
Silicon Valley, NBN.
Speaker 2 (00:07):
This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.
Speaker 3 (00:24):
I'm Caroline Heid at Bloomberg's at World Headquarters in New York,
and I'm Ed Ludlow in San Francisco.
Speaker 4 (00:29):
This has Beenberg Technology coming up.
Speaker 3 (00:31):
Full market coverage of a head of course, the largest
US maker of chip making machinery fails to impress investors.
What does it say around the rest of the chip sector.
We talk applied materials.
Speaker 5 (00:41):
Plus open Ai and Reddit announce a partnership to bring
its content to chat, GPT and other new products.
Speaker 3 (00:47):
Details ahead, and we sit down with the CEO of
cloud computing company core Weave as it secures seven and
a half.
Speaker 6 (00:52):
Billion dollars in private debt.
Speaker 3 (00:55):
All that and so much more coming up first, as
check in on a market that has been ramping higher
for four straight weeks, the longest winning street we see
for the SMP and indeed the Nasdaq in well, at
least since February.
Speaker 6 (01:06):
We're actually seeing the best months.
Speaker 3 (01:08):
So far for the entire year, and we're seeing again
just tentative gains. We've called some of those gains as
the week has progressed, but nevertheless still up almost ten
points on the Nasdaq stock six hundred over in Europe.
Less optimism on the day, we're off by a tenth
of a percent, but again we've seen gains throughout the
course of the week, and look, we're still near or
at record highs for a.
Speaker 6 (01:28):
Lot of these benchmarks.
Speaker 3 (01:29):
Looking at ten year yields, actually just selling off a
little bit on Neil's just pushing up somewhat, but this
has been a reassessment of the Federal Reserve and whether
we can still see cuts coming in for this year.
Some of that data just showed a healthy cooling of
the US economy. Move on, have a look at what's
happened over the last five days, and we're looking at
crypto and look on the up and up more than
nine percent. We're at six hundred and seven, a way
off far high as their ed but still notable risk
(01:51):
on sentiment throughout this week. When it comes to crypto,
what have you got on the micro Well.
Speaker 5 (01:55):
Let's start, we've read it and read it is up
a lot, flirting with a record higher bound for four
fourteen percent. Since it's ipo, which you know is in March.
So the deal with open ai is kind of a
two way deal. Open ai basically licenses Reddit forum posts
to get that text data's train models, but it can
also show Reddit posts in the consumer facing products. And
(02:16):
what does Reddit get out of it, Well, according to analysts,
like forty million dollars of high margin revenue every year,
which is great.
Speaker 4 (02:22):
But also they are.
Speaker 5 (02:23):
Talking about building ai products into the forum on top
of open AI's large language models. Let's talk about that
later in the show. The other name we're talking about
is in the chip space applied materials. As you point out,
the story here is about a company that makes the
machines that makes the chips. It sells to the contract
manufacturers like TSMC higher three tensven percent. It beat estimates,
(02:45):
but at the upper range of the estimates that were
given by the street it fell a little short. The
question is where are we at in chip demand through
the proxy of the companies that buy the machines that
make the chips.
Speaker 3 (02:57):
What a fun story it is, because ultimately, is this
a bell weather? Is this some sort of ability for
us to have a bird side perspective?
Speaker 6 (03:04):
Wear's hot, wet's not?
Speaker 3 (03:05):
Maybe not In autos, maybe not in connected devices, but
certainly all things AI is still driving us. And what
about the China exposure ed and pleased to say we
can go broadly across the sector with Advisor's capital management
partner and portfolio manager, Joe am Poenie. Always enjoyed to
have you with us, Joeanne. And look, this is a
chip equipment company. But what are you seeing in terms
of where we are in chips more broadly?
Speaker 6 (03:27):
Right now?
Speaker 7 (03:28):
Yeah, good morning guys.
Speaker 8 (03:30):
Apply Materials results better than expected, but their guidance was
a little bit soft, and in this kind of an economy, this.
Speaker 7 (03:36):
Kind of a market, that doesn't go over too well.
Speaker 8 (03:38):
But when you look into what Applied said, they indicated
continued strong demand from several of their end markets, except
for China. Obviously with the US trade policy really trying
to crack down on exports that would enable China to
have its own leading edge chip business. Applied Materials find
yourself in the cross fair, no surprise, and so that
(04:00):
part of their business is going to fall off pretty sharply.
But what we're seeing is that global demand for equipment
because of the global demand for high end chips for
AI and other things is still going to remain robust
for many years to come.
Speaker 4 (04:14):
That's really interesting.
Speaker 5 (04:15):
So around on Monday, I'm going to speak in a
conversation with Jensen Wang, Michael Dell, and Bill McDermott for
twenty five minutes, and what I'm trying to get out
of it is this idea of when do we move
beyond AI as a market AI accelerators just being the hyperscalers.
Speaker 4 (04:32):
So think about what you just said in demand, But.
Speaker 5 (04:34):
As far as I see, that's the only place it's going,
and it's largely in the US. What's your kind of
counter to that.
Speaker 8 (04:42):
Well, what we're seeing, I believe is that there's a
demand beyond just the US hyperscalers for other entities to
have their own AI training and inference capabilities, notably countries
that want want to keep their data private, and so
we're going to see entities there develop the infrastructure to
(05:03):
run those models and to deploy those models. So your
Jensen has mentioned that in the past, you could try
to get some numbers out of him for how big
that is currently and how big he expects it to be,
because it should be the case that wants the hyperscalers
build up their capabilities for training and for inference that
will see that other end the sovereign investments or even
company specific investments where again data is likely to be
(05:27):
kept private, become the next buyer.
Speaker 4 (05:31):
You know what's so interesting?
Speaker 5 (05:32):
And maybe I'm getting a bit in the weeds here,
but like think about Dell's history, they're really good at
selling to SMEs and governments. They're great sales channels that
maybe like Nvidia, has never really operated him. And that's
the bit I'm trying to scratch away at. Like everyone
else in the world who wants a part of the
AI story, how do they actually do it right? From
their CAPEX spend And where do you Jo Anthony position
(05:55):
yourself if you think that they're going to get there right?
Speaker 8 (05:59):
So the others that they're going to do it, They're
going to have to build the infrastructure ed if I
understand your question correctly, And so whether it's through a
Dell or a super micro or an HP or an IBM, right,
they're going to have to bring the hardware in which
will be powered by chips from Nvidia and the future
AMD and perhaps.
Speaker 7 (06:14):
In the future from some of these startups we're hearing about.
Speaker 8 (06:17):
And how we position is we look at the fundamental
suppliers that make it all possible, which are the chip
guys and Vidia, AMD, Broadcom working in conjunction with Alphabet
and others to bring the chips capable of this high
end computing.
Speaker 7 (06:31):
That's kind of a clean way to invest.
Speaker 8 (06:33):
But also then on the application side, companies that are
rolling out the capabilities to deploy AI like a service.
Speaker 7 (06:39):
Now is one example, but it's broader than that. It's
beyond the technology sector, it's into industrials.
Speaker 9 (06:44):
It's into healthcare.
Speaker 8 (06:45):
So you really have to dig deep to find those
individual companies that are being successful at this early stage
and starting to deploy the AI capabilities that.
Speaker 9 (06:52):
Are just emerging.
Speaker 3 (06:54):
I'm loving this entire show because we're going to many
ways pick away all these different ways of telling the story.
We've got core Weave coming on, of course, one of
these new hyperscale entrance almost offering new data center footprints
that's going to be closer to the companies that need
the access to the compute.
Speaker 6 (07:11):
You're then also going to be.
Speaker 3 (07:12):
Discussing this new AI push towards regulation, but ultimately standards
and investment coming from the US government. We just had
Chuck Schumer, of course, right, that key AI thought leadership piece.
Basically there's no real regulation in it yet. Will we
be delving into that. But all of this very much
focuses on the US and bits China and the worry there.
(07:32):
But what about Europe, what about Japan? What about other
areas that you can invest geographically?
Speaker 7 (07:37):
Joanne, Yeah, I mean asking.
Speaker 8 (07:40):
One of the big trends that I'm going that's related
to this space is the desire for let's call it
self sufficiency regionally to have for countries and regions like
the US and Europe to have their own capability to
manufacture those high end chips.
Speaker 7 (07:55):
Whether regulation and how regulation evolves.
Speaker 8 (07:58):
Over time is really hard a hard thing to sort
out at this point, and so we don't try to
make bets based on regulation changes.
Speaker 7 (08:07):
It's just sort of too.
Speaker 8 (08:08):
Early to know what Chuck Schumer's and that bipartisan groups
proposals will actually mean. So instead, again, what we can
do is look at how the subsidies are.
Speaker 10 (08:17):
Evolving and how the tariff barriers and restrictions are evolving
to push the manufacturing of advanced semiconductors around the world.
And what it means, right is we're going to get
more chip manufacturing, which is good for the equipment suppliers
by the way, and probably get some cheaper chips as
a result of a bit of overcapacity over time.
Speaker 3 (08:39):
When you therefore look at some of the startups coming in,
when you think about where to allocate to, where's already done?
Speaker 6 (08:46):
Well?
Speaker 3 (08:46):
Is in Vidio ahead of its earnings next week, still
at the right valuation point to enter.
Speaker 11 (08:52):
Well?
Speaker 8 (08:53):
You know, a company like in Nvidia has many years
of growth head of it, and its valuation reflects the
expectations about how high that growth will be and for
how long it can be maintained. And right now, and
Video with its chip technology is well ahead of competition. Yes,
a m D is coming along, and they will they
will definitely have a good chip in the race. And
(09:15):
we talked about Broadcom with their teaming up with Google
and others. But ultimately, and Vidia has not only the hardware,
the most advanced chips with the most capability for training AI.
Speaker 12 (09:26):
But it also has the software that is needed to
make all of that work, that Coupa software that it's
been developing over decades. So it really does give Nvidia
a substantial and defensive lead for several years to come.
Speaker 7 (09:38):
That doesn't mean that we're not going to get.
Speaker 8 (09:40):
Newsflow that disturbs those long term forecasts, and that could
cause disruptions in the stock price. And that's why we
think for Nvidia to be helped by clients. In our
growth portfolio, it's a substantial position, But in our balanced strategy,
where clients have a perhaps a more conservative view on
what their portfolios need to do over time, it's a
smaller position because of the volatility that we're likely to
(10:02):
see as expectations can be disrupted at any time.
Speaker 5 (10:05):
M Foinie, how are you and Advisor's Capital using AI
at home and at work?
Speaker 8 (10:11):
Well, I know from talking to the marketing guys, for example,
that they're using AI to create We just had a conference,
for example, they created a lot of the background material
for the conference, the images. I worked with a colleague
recently to do a podcast on behavioral finance, and he
generated notes using AI.
Speaker 7 (10:30):
Questioning, Hey, what did Danny Kahneman contribute?
Speaker 8 (10:33):
And so I saw all these great notes, I'm like, wow,
that's it's impressive. He said he did it in fifteen minutes.
So it's an incredible time saver for folks. Quickly needing
to generate content or get quick answers to questions and
to generate images for marketing materials.
Speaker 5 (10:46):
J am Feenie Advisors Capital Management. Great to have you
back on the show. Thank you so much. Now coming
up from Bloomberg Technology, we have all the details on
that open Ai and Reddit relationship and a new partnership.
Stay with us, We will be right back. This is
Bloomberg Technology. So open ai unveiled a partnership with Reddit
(11:14):
that will bring the social networks content to chat, GPT
and other products, but also allow Reddit to add new
AI features to its online communities. That's bringing Bloomberg Sharen
Gafari for more a bit of a scramble last night
because the market reacted right. Reddit shares now really high.
Just give us the basics of the deal in both directions.
Speaker 3 (11:34):
Sure.
Speaker 13 (11:34):
So open ai, which has kind of an insatiable desire
for data right to train its models and to just
show data within its chat GPT app, will now have
access to Reddit posts, and that's going to happen through
the Reddit api. So you know, whatever people post on Reddit,
open ai now has the legal right through this deal
to actually use that in its products and to train
(11:56):
its products on Reddit side. You know, they are presumably
getting some kind of financial benefit from this, although the
terms of the deal have not been disclosed.
Speaker 3 (12:05):
Also, perhaps they fold in open AI's own large language
model and AI applications within the use of Reddit. It
seems as though there's going to be advertising involved, and
the question to me sharing is what do they get
that's different versus the Google agreement. We know the amount
of money it seems that they got from Alphabet already,
but why therefore so embed open ai from an actual
(12:29):
AI architecture perspective and not Google's.
Speaker 13 (12:34):
I think that these media companies, social media companies, publishers,
they're kind of looking to just get the most value
that they can out of the data that they have, right,
so I think the deals are very similar. I think,
you know, we just have a little bit more information
about how much the value of that Google deal was
on the advertising front, because there was a mention in
there in their release I actually clarified with open Ai.
(12:56):
So all that means is that open ai is actually
going to place ads on Reddit as part of the deal,
So we're not seeing a kind of deeper ad integration
that's that some may have had thought.
Speaker 6 (13:09):
Really fascinating.
Speaker 3 (13:10):
And I think also we've got to remember the history
of Reddit and Sam Altman. Even though it says really
that it is Brad Lightcap that forged this deal, certainly
is one of the key investors in Reddit at the IPO.
Those ties go deep, and the fact that he is
interrom CEO for a short while putting the Suran Gafari.
We thank you so much for talking us through the
latest deal. Meanwhile, let's talk about the space race that's
(13:31):
upon us, because we're just so you can look at
Elil Musk's Starlink.
Speaker 6 (13:34):
It's launched, friends of competition for space dominance. Just take
a listen.
Speaker 14 (13:41):
The largest single constellation of satellites orbiting our planet is
run by a mercurial individual who needs no introduction. It's
this guy. It achieves this by maintaining a vast relay
network in low Earth orbit. That's the area higher than
a jetliner but below a GPS satellite.
Speaker 15 (14:02):
Right now, Starlink has more than five six hundred satellites
in orbit.
Speaker 14 (14:07):
And it accomplished all this in less time than it
took James Cameron to make a second Avatar movie.
Speaker 15 (14:13):
At one point, SpaceX and vision launching up to forty
two thousand satellites.
Speaker 14 (14:19):
But this speed and relative success has raised eyebrows, concerned
ones in government and excited ones in the boardrooms of
potential rivals.
Speaker 15 (14:27):
It's essentially a company trying to disrupt a somewhat complacent marketplace.
Speaker 5 (14:38):
So you can catch the full thing from Bloomberg originals
at Bloomberg dot com.
Speaker 4 (14:42):
It's it must kind of watch.
Speaker 5 (14:43):
And the speed and relative success of elon musk Starlink
has encouraged the deep pocketive rivals like Amazon co founder
Jeff Bezos and his Blue Origin, which is actually slated
to resume space tourist flights this Sunday after it had
stopped crude operations two years ago following a mid flight mishap.
I want to go out to Chicago and Bloombo's Kyle Porter.
Speaker 4 (15:03):
Let's start with the starlink doc.
Speaker 16 (15:04):
Right.
Speaker 5 (15:05):
That was one minute, but it's a longer thing. Tell
us about the other items that you covered off in it.
Speaker 17 (15:11):
Well, thank you for having me on ed. We cover
quite a bit of ground in those seven minutes. We
look into how the service performs, Elon's plans for growth
of the service, potential rivals, and as that one minute
alluded to difficulties geopolitical and technical.
Speaker 4 (15:26):
With the service.
Speaker 3 (15:27):
Let's talk about technical difficulties because there's been a few
launches that have been delayed of late. We're also anticipating
the re launch or well certain regalvanization of Blue Origin
this weekend.
Speaker 6 (15:40):
Things have been stopped start.
Speaker 17 (15:43):
They certainly have a little bit, and Elon's been a
little bit frustrated in his getting approvals to build out
the size of the network that he wants. Starlink's biggest
problem is getting satellites in the air. Doing things in
low earth orbit is fantastic and it decreases the latency,
which is the time it takes for the signal to
get back and down to your dish. However, you really
(16:04):
need to think of it like filling off a bath.
You need an awful lot more satellites in the air
to stop your service slimming down. Frankly, they're not doing
it as quickly as they'd like.
Speaker 5 (16:14):
Kyle, my understanding is you and I are under orders
to be awake very early this Sunday because Blue Origin
will try to launch its tourism offering again after two years.
Speaker 4 (16:23):
Just give us the basics of that mission.
Speaker 17 (16:26):
Yes, well you'll be earlier than I am. Thank goodness.
The plan is after twenty twenty two. There was a
mishapen I'm thankfully unmanned flight which saw Blue Origin ground
its flights. This will mark the resumption. I believe it's
the seventh flight to carry a crew, and it's also
going to include someone rather special.
Speaker 9 (16:45):
Ed D.
Speaker 17 (16:46):
White, who was part of the original NASA program, would
have been the first African American in space had he
been picked.
Speaker 3 (16:52):
And then not to mention what happens early next week
Boeing's first cruise space flight maybe just maybe using its
Starliner craft. So that's been delayed a little bit. Maybe
it'll come on May twenty first. There is a lot
going on in space, has always been most Carl Porter
helping us tell that story. I hope you both have
to get up too early someday. Meanwhile, coming up after
a volatile week of trading the Memestock rally, coming to
(17:14):
back down to Earth.
Speaker 6 (17:15):
I could have used all the puns about to the moon,
but I won't.
Speaker 3 (17:18):
We will bring you the latest next as a rumored technology.
Speaker 5 (17:30):
It is time for talking tech. These are some of
the other stories we're following in the news. First up
Snowflake is in talks to acquire startup Wreca Ai for
more than one billion dollars. That's according to sources. RecA
Ai is a producer of large language models and would
enable software maker Snowflake to offer generative AI capabilities. Record
Ai was founded in twenty twenty two and was valued
(17:52):
at three hundred million dollars in a twenty twenty three
investment round. Plus, Ingram Micro is preparing to move ahead
with plans for an IPO that could raise more than
one billion dollars. That also according to sources, who say
Ingram's considering seeking evaluation of as much as ten billion dollars.
The company has been working with Goldman Sachs and Morgan
(18:12):
Stanley on the listing and is said to have added
JP Morgan to its list of advisors, and Microsoft avoids
a UK antitrust probe for its partnership with meestrel Ai.
Last month, the UK Competition and Markets Authority announced that
it was gathering information on whether the two companies threatened
competition in the UK. The watchdog group reversed that decision,
(18:34):
saying Microsoft does not have the ability to quote materially
influence Miestrel's commercial policy.
Speaker 3 (18:42):
Caroline, Let's just go back to what was quite the
frenzy at the start of the weekend, all the mean stops,
but now that's come to a bit of an abrupt halt.
Came so off as you see now only up sixteen percent,
shares falling for a third secutive day. In fact, as
a company pre announced earnings. So it may set up
to fully five million shares. Let speke it all down
in the most Bailey lipshals. And the point here is
(19:02):
that we had GameStop.
Speaker 6 (19:04):
And AMC really soaring at the beginning of the week.
AMC made the most of it. Now game stops trying
to make the most.
Speaker 4 (19:11):
Of it exactly.
Speaker 18 (19:11):
AMC happened to have that at the market offering in
the works before, so they were able to capitalize on
that raise about one hundred and twenty five million.
Speaker 4 (19:19):
Dollars through sales of new shares. They also then.
Speaker 18 (19:22):
Announced a debt for equity swap, so diluting investors, but
trying to shore up the fact that they had at
least at the beginning of the week north of four
and a half billion dollars in debt. Now game stop
to be Fair doesn't really have debt, they don't need
the cash. But when I talked to market watchers, they
basically said, they are two times you sell shares, one
when you're stupid not to and one when you need cash.
And it does seem like games stop trying to move
(19:42):
to capitalize on the rally. But as you mentioned, not
only up seventeen percent this week, not up the two
hundred and seventy percent it was at the start of
the week on Tuesday, and.
Speaker 3 (19:51):
We got a little bit of fundamental news unlike what
has driven this meme stock rally.
Speaker 6 (19:56):
And they pre announced their earnings. How do they fare?
And it looks as though revenues are under pressure.
Speaker 18 (20:02):
Under pressure missed what Wall Street had penciled in. But
they're only how many I would say there are two
analysts who follow it, so it's not really like we
can say there are dozens of analysts who kind of
are sharpening their pencils to come up with what they
should be reporting.
Speaker 4 (20:13):
But it is slowing.
Speaker 18 (20:14):
They are focused really on getting back to profitability. So
the net loss was more narrow in the last three
months than it was this time last year, but still
fundamentally there are pressures there's kind of they need a
new game cycle, They needed a new console cycle. They
are also battling with the fact that people download games
and don't go to stores, and that's really been the
bare Case four game stop even well before twenty twenty one's.
Speaker 5 (20:35):
Craze Bailey, Hello Happy Friday. I was talking to somebody
interesting last night, let's call them a market participant, and
I asked about Roaring Kitty And I was like, has
anyone yet worked out what Roaring Kitty was trying to
communicate through social media? And this person, again let's call
(20:56):
them a market participant, was like, do we even know
that it is Roaring Kitty?
Speaker 18 (21:01):
If we don't, And that's why it's scary, because we
haven't seen the person who operates under the moniker Raring Kitty.
Keith Gill hasn't been on social media. He used to
be streaming on YouTube and different means back in twenty
twenty one. In twenty twenty he hasn't physically appeared, so
that x handle was back to posting a number of videos.
Speaker 4 (21:21):
But to your point, no one's been able to confirm or.
Speaker 18 (21:23):
Talk to Gil himself to see if he actually has
resurfaced after almost three years of being away from social media,
or to read between the lines that what your source
is pointing at.
Speaker 4 (21:33):
It could be other actors, but no one really knows.
Speaker 5 (21:36):
What is interesting is that loads of people tried to
play the game this week.
Speaker 4 (21:40):
Right.
Speaker 5 (21:40):
People have taken to social media and said, oh, look,
I made a small amount of money by buying or
selling games of AMC shares. Is there any sense that
there was something bigger than that, beyond just retail trade
is playing the moment?
Speaker 15 (21:53):
Well?
Speaker 18 (21:53):
We wrote about this throughout the week, and when you
look at the trading flows on the likes of a
Fidelity or an interactive brokers, it's a small portion compared
to what we saw in twenty twenty one. And if
you look at Fidelity's platform over the past week, the
number of buy and sell orders has basically been matched.
So when you look at the hundreds of millions of
shares that have traded four game stop in the north
(22:13):
of a billion shares in AMC that have traded, the
underlying factors would point towards this likely being some form
of momentum or quantitative funds trading in it.
Speaker 4 (22:22):
Bloomberg's Bei lip Schultz, Well, week, it's been tha. Thank you.
Speaker 5 (22:25):
Now coming up on the show, cloud computing company Core.
We've received seven point five billion in private debt. We're
going to speak to the CEO next. Stay with us
because we'll be right back.
Speaker 4 (22:34):
This is Bloomberg.
Speaker 5 (22:45):
Welcome back to Bloomberg Technology, Ed Lovelow here in San Francisco.
Speaker 6 (22:49):
Caroline had in New York.
Speaker 3 (22:50):
Let's get your cold check on these markets, because it
has been a week, and it's been a macro fueled
week in many ways, some of the data points shining
a light that maybe the FAG can still cut. We've
got therefore, benchmarks near or at record highs. There certainly
have been for the Nasdaq one hundred, the Nasdaq SMP
five hundred, of course, the Dow hitting more than forty thousand.
Speaker 6 (23:06):
We're just wavering on the days.
Speaker 3 (23:07):
Perhaps we just trade into this weekend and take a
little bit of profit. But stock six hundred not as
strong a week, up less than a percentage point, but
still up for two straight weeks and still near a
record high as well. Remember it was four straight weeks
on the US benchmarks as the longest winning street that
we've seen since February. I'm looking at Bitcoin up three
hundred quarter percent. It's having a good week two and
we're currently up at sixty seven thousand. Move on and
(23:29):
have a look what's happening in terms of individual names
that are on the move, and notably Take two is
actually one of the best performers on the NASDAK one
hundred gaming company coming out and saying sorry, we're delaying
it again the latest grand theft auto. But at least
we're getting a timetable a little bit more resolutely, and
so investors seem to be in a forgiving mood when
maybe some of the numbers did have to be daled
back more broadly for this year, the school year's revenue
(23:51):
because of the delay to the start of twenty twenty
five PDD I'm looking at, of course, TMU ubs upgrading
their stock saying that look, we're all over exaggerating the
limitations of TEMU into geographical diversity on the back of
geopolitical threats. In fact, they think that they're still going
to be a winning formula. PDD get their numbers on
the twenty second of May. Who else gives us their
(24:12):
numbers next week in video we're currently down by eight
tens percent, but ed we're looking at in terms of
the world of AI.
Speaker 5 (24:18):
Well, a name that's very closely tied to in video.
In one of the largest private financings to date, cloud
computing company core Weave has received a seven point five
billion dollar debt package led by Blackstone, Magnetar and Co.
Two and please to say were join now by the
core Weave CEO, Michael and Tranter. Okay, let me frame
it this way. Seven point five billion dollars is a
(24:41):
lot of debt financing. It's a very large number. You
are an unusual company because you're doing something with pace
but very closely tied to in video. So I think
our audience would appreciate that you just kind of explain
how you got the debt financing and how it's structured,
because the cast of character in there are also unusual.
Speaker 11 (25:03):
Yeah, so first of all, thank you for having me
back on again. They appreciate the opportunity to, uh to
speak with you in your in your audience. So, uh,
this is a very exciting financing for us, and it
follows very closely on the coattails of a one point
one billion dollar equity round that we.
Speaker 9 (25:23):
Completed last week.
Speaker 11 (25:25):
And so it's been a very very active period of
time for for Core. We've in the capital markets, the
the uh the.
Speaker 9 (25:34):
Syndicate of lenders, which is really who's who.
Speaker 11 (25:39):
Of private lending, including you know, as you said, Blackstone,
magnutar Co two, but you also have Carlisle, CDPQ, Digital Bridge,
black Rock, Eldridge, you know, like really wonderful names, really
great supporters that that have a deep understanding of the
business and you know, really provide in coordination with the
(26:01):
equity round that closed last week and a deep validation
for the solution that we are delivering to the market,
our approach to building you know, ait cloud infrastructure. And
so it's been really oneful few weeks here for the
company as we really pushed towards enormous scale.
Speaker 6 (26:22):
I mean, this is a big pot of money.
Speaker 3 (26:24):
As you referenced one point one billion equity funding just
done two weeks ago. You've now got the seven and
a half billion dollars more of debt put to work,
and it's about infrastructure. Seems to be the fact that
you want to be doubling your.
Speaker 6 (26:36):
Footprint when it comes to data centers.
Speaker 3 (26:38):
You've already expanded into London outside of the US, You're
going to be buying those chips the infrastructure, So where
will you put the data centers first and foremost?
Speaker 7 (26:46):
Michael, Sure, So.
Speaker 9 (26:48):
A couple of things.
Speaker 1 (26:49):
One is, in total, over the past twelve months, we've
raised twelve billion dollars into COREWAK and that is representative
of an incredibly capital intensive build out of infrastructure, initially
across the United States.
Speaker 11 (27:06):
But now, as you said, we're pushing into Europe. We've
we've we've got too data centers that we're building in London,
We've got.
Speaker 9 (27:12):
A footprint in Spain, will be up in the Nordics.
Speaker 11 (27:15):
In total, we'll have twenty eight data centers by the
the end of this year that we will be providing
our clients infrastructure from. You know, we try to build
our data centers approximate population centers. You know, think to
like as the you know, the NFL strategy, you know,
in terms of trying to put our data our data
(27:38):
centers so that they are relatively low latency providers of infrastructure.
But you know, as I said, our footprint is getting
much larger very quickly. And you know this, this this
pool of capital here is seven and a half billion,
is really focused on the physical infrastructure that we have
to build in order to deliver our products to our clients.
Speaker 5 (28:03):
Michael, I think a lot of people are really starting
to become concerned or at least inquisitive about energy and
power consumption. Have you a clear strategy for energy and
power sourcing and all the geographies you've just outlined, Yeah,
we do.
Speaker 9 (28:18):
And it's a work in progress.
Speaker 11 (28:22):
You know, the rate at which we're scaling, we are
continually addressing that. My background is actually from energy, and
you know that's where I grew up, and prior to that,
I really focused on environmental commodities, and so it's something.
Speaker 9 (28:37):
That's near and dear to me. It's near and dear
to the company.
Speaker 11 (28:39):
We have an entire team internal to the company that
are building a strategy we'll have in place by two
thousand and thirty as we go through this rant. And so,
you know, we understand that there is a moral imperative
to take responsibility for the energy that is required to
be able to deliver this type of resource to the world.
Speaker 6 (29:03):
So what is it? Is it nuclear?
Speaker 3 (29:05):
Is it just having to be more efficient with what
you've got, go for more power efficient chips.
Speaker 11 (29:12):
Yeah, So the answer is is, like so many things
around energy is it's a combination of a number of things, right.
So a great example is in the next iteration of
our technology build, we'll be moving from air cooled data
centers into liquid cooled data centers, and the savings that
(29:33):
are associated with liquid cooled provide maybe thirty percent more
energy efficiency within the data center because you don't have
to run all the air fans, you don't have to
move so much cooling through it. It's just more efficient.
And so there'll be a significant step function.
Speaker 19 (29:53):
That you will be able to achieve by just evolving
the technology into the most modern energy efficient component.
Speaker 9 (30:04):
The other thing to think about is from computational perspective,
the the.
Speaker 11 (30:08):
The hardware that that is being delivered, Yeah, right now
is enormously more energy efficient per flop than it has
ever been in the past.
Speaker 5 (30:19):
I know somebody that will make that argument. Next week
on Monday, I'm going to speak to Jensen Wang, Michael Dell,
and Bill McDermott, all at the same time. The success
of those companies, Michael, to which one is your fate
most closely tied?
Speaker 9 (30:37):
So look, you know we have a wonderful partnership with
in Video.
Speaker 11 (30:45):
You know they are absolutely at the epicenter of anyone's
approach to building out the physical infrastructure.
Speaker 9 (30:55):
For serving the AI markets.
Speaker 11 (31:00):
That is a reality of where we are right now
and will be for for quite a while.
Speaker 9 (31:07):
You know, Michael dell.
Speaker 11 (31:08):
Is is you know, del is an extremely important partner
of ours there. You know, we require them to be
able to build, uh the infrastructure that that incorporates the
the the the GPUs that we use, and so you know,
we we are you know, working with with with many
partners across the space.
Speaker 6 (31:29):
Are you too dependent Michael though, Are you too dependent
on a video?
Speaker 9 (31:33):
Uh?
Speaker 11 (31:33):
So the world is dependent on in video at this juncture.
Their technology is defining the space, and so we work
with them because our clients demand the technology that they
drive and deliver into the market.
Speaker 6 (31:50):
No I m D not any of us.
Speaker 20 (31:52):
So so we we we look at all different types
of silicon, We look at all different types of solutions,
but our clients have clearly indicated that for the time being,
the type of.
Speaker 11 (32:04):
Silicon that they require to build their products, to build
the artificial intelligence that's changing the world is currently being
driven in large part by the Nvidio infrastructure.
Speaker 3 (32:17):
Well, the share price reflects at core Wee've CEO Michael
and Treta, thanks so much for coming on to talk about.
Speaker 6 (32:23):
Your own funding.
Speaker 3 (32:24):
I mean, while coming up, we're going to be hearing
from the Salesforce CEO Mark Benioff about the future of
artificial intelligence.
Speaker 6 (32:29):
Who'd have thought it? This is Bloomberg Technology.
Speaker 5 (32:40):
In an exclusive interview with Bloomberg Salesforce CEO Mark Bennioff
suppose to us about working with activist investors, competition with
service Now, and his outlook for the future of artificial intelligence.
Speaker 4 (32:52):
Listen to this.
Speaker 2 (32:54):
I think I might be one of the few CEOs
that actually really enjoyed working with these activist investors. I
had never heard so many great new ideas in my career,
including such out of the box thinking and look, we
were able to really transform and evolve Salesforce over the
last year, and you can see it with our incredible
financial results that we had last year and our idea
(33:15):
that we're able to continue to move forward with these
incredible new characteristics of our company and our last earning
result we'veven talked about that we've started to create a dividend.
That's something that was beyond my imagination even just a
few years ago. So it's exciting to be the number
one CRM to help companies connect with our customers in
a whole new way. Right now, we're about to enter
(33:37):
an incredible new world, which is the world of artificial
intelligence and how it's going to transform these customer relationships.
And I think we're about to see some technology that
we never thought we'd see in our lifetimes. We're going
to see just some incredible new ways to run our businesses.
Speaker 16 (33:54):
Competition and CRM is feerce mark. You've got Service now
trying to poach a bunch of salesforce employees. I believe
they stopped using Slack after you bought it. They're trying
to build more of a consumer brand. They started their
own trailblazer program. Are they trying to pick a fight
with you?
Speaker 2 (34:14):
Well, they're an interesting company, you know. I just think
they need to be careful. They might be getting a
little ahead of their skis. We just replaced them at Disney.
Of course, we already had run Disney stores and Disney
guides in the Park, and we had done a lot
of things with Disney with their customer relationships. But I
think everybody knows that when they went to have Disney
(34:35):
Plus and wanted to have a call center, and they
chose that company. Well, unfortunately, Salesforce had to come in
and rescue the entire operation and rebuild all of the
customer success and call centers for Disney and which was
at that point had been called out as a marquee
customer of their as well. Salesforce is actually a tremendous
(34:57):
company that does real customers and delivers solutions in sales
service marketing for so many great companies around the world.
Now obviously standardized the Disney, but for so many other
or great organizations, banks, insurance companies all over the world.
And I think we're doing pretty well on.
Speaker 3 (35:17):
Our own iding talk coming from the Salesforce CEO Mark
Benioff as if you expect anything less.
Speaker 6 (35:23):
Meanwhile, the Senate's bipart of some AI.
Speaker 3 (35:25):
Working Group finally released is AI roadmap this week, but
it's getting some mixed reactions from civil groups, for example,
who feel that the industry is playing.
Speaker 6 (35:34):
An outsized role in shaping this legislation. Let's dig deeper
with all of it.
Speaker 3 (35:38):
Linda Moore is with US president and CEO of tech net,
which represents bipartisan network of Innovation economy, CEOs, senior executives
like the open aiyes of this world and Linda, I
can imagine that thus far, what's being said, the thirty
two billion dollars of investment coming for AI. The focus
on innovation is music to your ears. But are you
listening to what the civil side of the equation is
(35:59):
and the fact that they feel that regulation and god
rails aren't coming soon enough.
Speaker 21 (36:04):
Yes, I understand, and they were involved in all of
the AI insight forums that were held in the US Senate,
and I'm sure their voices will still be heard as
we go through the process. One thing that I think
that they need to understand and the public should understand
is last summer, these big AI companies in America made
voluntary commitments with the White House to secure the systems
(36:25):
to mitigate bias, all the risks and harms that can
be anticipated, and they also went beyond that to make
their own internal evaluations on all the risk mitigation that
need to be done.
Speaker 7 (36:37):
This will go through a committee.
Speaker 9 (36:38):
Process in the US Senate and also in the.
Speaker 21 (36:40):
House, and everyone's voice will be heard, including civil society
and our companies. The tech companies in the US are
working very closely with them and want to address all
their concerns.
Speaker 5 (36:51):
Apologies for the sneeze to our Bloomberg technology audience around
the world. It's allergies season, but I've recently discovered flow nase.
Speaker 4 (36:58):
Other products are available.
Speaker 5 (37:00):
Linda Caroline summed it up perfectly earlier when we were
talking about Chuck Schumer. There's a lot of speak coming
out of DC, but it's basically thought leadership. It's not substantive,
codified rules or way forward with AI. When do we
start seeing some concrete action.
Speaker 21 (37:20):
Well, we already saw concrete action just this week. On Wednesday,
the Senate Rules Committee passed three bills related to the
use of AI and elections. Eighteen states have already done that,
and there will be another hearing on AI policy next.
Speaker 9 (37:33):
Week in the US Senate.
Speaker 7 (37:34):
So I expect some of this to move pretty quickly.
There are other committees that will.
Speaker 21 (37:38):
Take a little bit more time, but I think you'll
see pretty expeditious action here in the next few months.
I can't say that every single part of AI policy
this reflected in the roadmap will be addressed, but I
think that they'll make good progress.
Speaker 9 (37:51):
In the next few months.
Speaker 21 (37:52):
I've been really pleased to see that AI is an
area of great curiosity and cooperation across the aisle. We
see such a partisanship in DC right now, and that's
another case with AI policy. We see people working together
and that's really great to see.
Speaker 5 (38:07):
Tech that President CEO, Linda Moore, we really appreciate your
perspective and analysis. Thank you so much. Coming up on
Bloomberg Technology, we're going to be joined by the CEO
of Visco. Remember Visco, the company reached two hundred if
well exactly it reads two hundred million users worldwide. Talk
about photos, talk about their turnaround.
Speaker 4 (38:27):
That's coming up next. This is Bloomberg.
Speaker 5 (38:40):
Visco, a platform for photographers and visual storytellers, just announced
first time profitability.
Speaker 4 (38:46):
Under its new leadership.
Speaker 5 (38:48):
But it's also a mass two hundred million users worldwide.
I want to dig into that with Visco CEO Eric
Whitman joining me here on set in San Francisco. So
our producer John Highland was reflecting that, like in the
early days of Visco, part of it was the technology
offering right specific filters, photo editing, and imaging. Two hundred
million users is a lot. The question is how they're
(39:08):
using it, Are they paying users, where are they and
principally what are they using it for?
Speaker 22 (39:13):
Yeah, great question, Thanks for having me on again too. Yeah,
you know, I think Visco has had a very long journey.
It's been around for ten years and we've seen multiple
versions of the company. It's really started by creators for creators.
So these were photographers, ad agency folks who are really
trying to support more people like them. And you know,
(39:33):
for a lot of these users, right, they come to
Visco for the tools, for the looks. They come because
they're trying to get a certain look and Visco is
a really easy way for them to do that. What
we find though, is people come for the tools and
they ended up staying for this really healthy creative community
where people can get to meet other people, get inspired
(39:54):
by their work, collaborate on other projects. And that's what
we're finding is where Visco is really sticking for a
lot of folks. And as we've been making our transition
more as a business to support more of those serious
creators like photographers, they're staying around for more of that.
Speaker 5 (40:08):
Of those two hundred million, how many of them are
a paying customer?
Speaker 4 (40:12):
Will subscribe it in some form?
Speaker 22 (40:14):
Yeah, so pay we primary our business models primarily subscription,
primarily membership, so it's a fraction of that two hundred million.
And where we're seeing most of our growth is actually
with a professional tier, which we just introduced a year ago.
Speaker 3 (40:28):
Okay, and I'm assuming that the professional is more opportunity
not only to be seeing business done between brands and photographers,
but also you taking yet further opportunity to boost revenue.
Speaker 6 (40:40):
How do you do that?
Speaker 9 (40:42):
Yeah?
Speaker 22 (40:43):
I mean first is really spending some time listening to
our customers, and what we're finding with a lot of them,
especially pro photographers, is it's increasingly difficult for them to
promote themselves, to find work to be discovered by brands
or other potential clients, and especially with traditional social media
and the algorithm's changing, where it's becoming increasingly harder for
(41:05):
those people to be discovered.
Speaker 9 (41:06):
There.
Speaker 22 (41:07):
What Visco is doing is we're providing a great way
for these people to create and express that creative identity
and then be discovered by other people. And in our
recent introduction of Visco Hub, which is this is a
very smart and powerful AI driven engine that allows people
to get discovered by brands and other potential people who
(41:29):
want to hire them.
Speaker 6 (41:30):
Where are you, Eric?
Speaker 4 (41:31):
Though?
Speaker 6 (41:31):
In terms of those two hundred.
Speaker 3 (41:32):
Million, how many are actually just people in gen Z
millennial wanting a different type of social media. That's how
you initially catalyzed growth. You were an alternative where you
didn't want to be garnering just likes and the anxiety
that came with that. Do you benefit from the backlash
that we can still see and the push out potentially
(41:53):
of TikTok?
Speaker 5 (41:55):
Yeah.
Speaker 22 (41:55):
I still think that there's a lot of people who
come to Visco because they want that safe place to
engage and connect with other people.
Speaker 4 (42:03):
We get over a million.
Speaker 9 (42:05):
Signups a month.
Speaker 22 (42:06):
Organically, we don't do any paid advertising, and this is
something that I think many people come to Visco for.
Speaker 4 (42:13):
However, that's not our focus.
Speaker 22 (42:15):
We do find that a lot of gen Z who
want to increasingly become professional creators or professional photographers themselves.
They come because they.
Speaker 5 (42:25):
Quick carry So I think there's a lot of skepticism
about two hundred million, and so Visco uses two hundred
million of view around the world which have a camera.
I'm looking at If you are a Visco, use a
contact us. I'd like to hear from you. Caaren mentioned
one TikTok and one million on board a month.
Speaker 4 (42:39):
Are you onboarding from anywhere? Specifically? It's organic.
Speaker 22 (42:43):
I mean a lot of people are just right now.
Speaker 4 (42:44):
They've got to be coming from somewhere. It's a battle
for eyeballs. Yeah.
Speaker 22 (42:47):
The biggest, the biggest place we're finding these customers is
actually coming from Instagram. So that's our biggest referral source
is people who are coming over from Instagram. Second is
people just finding Visco on the web. They're looking for alternatives.
They are looking for places where they can express themselves
creatively in a healthy and authentic way, and Visco is
that place fascinating.
Speaker 3 (43:09):
Risco CEO Eric Whitman on being a bit dea positive
on a million people adopting your platform every single month.
Speaker 6 (43:16):
We thank you for talking us through where they're coming from. Now.
Speaker 3 (43:19):
That does it from this edition of Bluebod Technology, and
what a week it has been, and we brace ourselves
from an amazing conversation come Monday, ed.
Speaker 4 (43:26):
Yeah, yeah, just an incredible week.
Speaker 5 (43:29):
You know, earnings AI it all continues, and it does
continue Monday.
Speaker 4 (43:32):
Thank you know.
Speaker 5 (43:33):
I'm having this big conversation with Jensen Wang and Mike
Michael Dell recap today. Though we cover a lot of ground,
you know where to find the pod. Thank you to
everyone that tunes in, and thank you to those who
listen to the podcast.
Speaker 4 (43:43):
That's where you can see it and hear it. This
is Bloomberg
From Markhard We're Innovation of Money and Power colle in
Silicon Valley, NBN.
Speaker 2 (00:07):
This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.
Speaker 3 (00:24):
I'm Caroline Heid at Bloomberg's at World Headquarters in New York,
and I'm Ed Ludlow in San Francisco.
Speaker 4 (00:29):
This has Beenberg Technology coming up.
Speaker 3 (00:31):
Full market coverage of a head of course, the largest
US maker of chip making machinery fails to impress investors.
What does it say around the rest of the chip sector.
We talk applied materials.
Speaker 5 (00:41):
Plus open Ai and Reddit announce a partnership to bring
its content to chat, GPT and other new products.
Speaker 3 (00:47):
Details ahead, and we sit down with the CEO of
cloud computing company core Weave as it secures seven and
a half.
Speaker 6 (00:52):
Billion dollars in private debt.
Speaker 3 (00:55):
All that and so much more coming up first, as
check in on a market that has been ramping higher
for four straight weeks, the longest winning street we see
for the SMP and indeed the Nasdaq in well, at
least since February.
Speaker 6 (01:06):
We're actually seeing the best months.
Speaker 3 (01:08):
So far for the entire year, and we're seeing again
just tentative gains. We've called some of those gains as
the week has progressed, but nevertheless still up almost ten
points on the Nasdaq stock six hundred over in Europe.
Less optimism on the day, we're off by a tenth
of a percent, but again we've seen gains throughout the
course of the week, and look, we're still near or
at record highs for a.
Speaker 6 (01:28):
Lot of these benchmarks.
Speaker 3 (01:29):
Looking at ten year yields, actually just selling off a
little bit on Neil's just pushing up somewhat, but this
has been a reassessment of the Federal Reserve and whether
we can still see cuts coming in for this year.
Some of that data just showed a healthy cooling of
the US economy. Move on, have a look at what's
happened over the last five days, and we're looking at
crypto and look on the up and up more than
nine percent. We're at six hundred and seven, a way
off far high as their ed but still notable risk
(01:51):
on sentiment throughout this week. When it comes to crypto,
what have you got on the micro Well.
Speaker 5 (01:55):
Let's start, we've read it and read it is up
a lot, flirting with a record higher bound for four
fourteen percent. Since it's ipo, which you know is in March.
So the deal with open ai is kind of a
two way deal. Open ai basically licenses Reddit forum posts
to get that text data's train models, but it can
also show Reddit posts in the consumer facing products. And
(02:16):
what does Reddit get out of it, Well, according to analysts,
like forty million dollars of high margin revenue every year,
which is great.
Speaker 4 (02:22):
But also they are.
Speaker 5 (02:23):
Talking about building ai products into the forum on top
of open AI's large language models. Let's talk about that
later in the show. The other name we're talking about
is in the chip space applied materials. As you point out,
the story here is about a company that makes the
machines that makes the chips. It sells to the contract
manufacturers like TSMC higher three tensven percent. It beat estimates,
(02:45):
but at the upper range of the estimates that were
given by the street it fell a little short. The
question is where are we at in chip demand through
the proxy of the companies that buy the machines that
make the chips.
Speaker 3 (02:57):
What a fun story it is, because ultimately, is this
a bell weather? Is this some sort of ability for
us to have a bird side perspective?
Speaker 6 (03:04):
Wear's hot, wet's not?
Speaker 3 (03:05):
Maybe not In autos, maybe not in connected devices, but
certainly all things AI is still driving us. And what
about the China exposure ed and pleased to say we
can go broadly across the sector with Advisor's capital management
partner and portfolio manager, Joe am Poenie. Always enjoyed to
have you with us, Joeanne. And look, this is a
chip equipment company. But what are you seeing in terms
of where we are in chips more broadly?
Speaker 6 (03:27):
Right now?
Speaker 7 (03:28):
Yeah, good morning guys.
Speaker 8 (03:30):
Apply Materials results better than expected, but their guidance was
a little bit soft, and in this kind of an economy, this.
Speaker 7 (03:36):
Kind of a market, that doesn't go over too well.
Speaker 8 (03:38):
But when you look into what Applied said, they indicated
continued strong demand from several of their end markets, except
for China. Obviously with the US trade policy really trying
to crack down on exports that would enable China to
have its own leading edge chip business. Applied Materials find
yourself in the cross fair, no surprise, and so that
(04:00):
part of their business is going to fall off pretty sharply.
But what we're seeing is that global demand for equipment
because of the global demand for high end chips for
AI and other things is still going to remain robust
for many years to come.
Speaker 4 (04:14):
That's really interesting.
Speaker 5 (04:15):
So around on Monday, I'm going to speak in a
conversation with Jensen Wang, Michael Dell, and Bill McDermott for
twenty five minutes, and what I'm trying to get out
of it is this idea of when do we move
beyond AI as a market AI accelerators just being the hyperscalers.
Speaker 4 (04:32):
So think about what you just said in demand, But.
Speaker 5 (04:34):
As far as I see, that's the only place it's going,
and it's largely in the US. What's your kind of
counter to that.
Speaker 8 (04:42):
Well, what we're seeing, I believe is that there's a
demand beyond just the US hyperscalers for other entities to
have their own AI training and inference capabilities, notably countries
that want want to keep their data private, and so
we're going to see entities there develop the infrastructure to
(05:03):
run those models and to deploy those models. So your
Jensen has mentioned that in the past, you could try
to get some numbers out of him for how big
that is currently and how big he expects it to be,
because it should be the case that wants the hyperscalers
build up their capabilities for training and for inference that
will see that other end the sovereign investments or even
company specific investments where again data is likely to be
(05:27):
kept private, become the next buyer.
Speaker 4 (05:31):
You know what's so interesting?
Speaker 5 (05:32):
And maybe I'm getting a bit in the weeds here,
but like think about Dell's history, they're really good at
selling to SMEs and governments. They're great sales channels that
maybe like Nvidia, has never really operated him. And that's
the bit I'm trying to scratch away at. Like everyone
else in the world who wants a part of the
AI story, how do they actually do it right? From
their CAPEX spend And where do you Jo Anthony position
(05:55):
yourself if you think that they're going to get there right?
Speaker 8 (05:59):
So the others that they're going to do it, They're
going to have to build the infrastructure ed if I
understand your question correctly, And so whether it's through a
Dell or a super micro or an HP or an IBM, right,
they're going to have to bring the hardware in which
will be powered by chips from Nvidia and the future
AMD and perhaps.
Speaker 7 (06:14):
In the future from some of these startups we're hearing about.
Speaker 8 (06:17):
And how we position is we look at the fundamental
suppliers that make it all possible, which are the chip
guys and Vidia, AMD, Broadcom working in conjunction with Alphabet
and others to bring the chips capable of this high
end computing.
Speaker 7 (06:31):
That's kind of a clean way to invest.
Speaker 8 (06:33):
But also then on the application side, companies that are
rolling out the capabilities to deploy AI like a service.
Speaker 7 (06:39):
Now is one example, but it's broader than that. It's
beyond the technology sector, it's into industrials.
Speaker 9 (06:44):
It's into healthcare.
Speaker 8 (06:45):
So you really have to dig deep to find those
individual companies that are being successful at this early stage
and starting to deploy the AI capabilities that.
Speaker 9 (06:52):
Are just emerging.
Speaker 3 (06:54):
I'm loving this entire show because we're going to many
ways pick away all these different ways of telling the story.
We've got core Weave coming on, of course, one of
these new hyperscale entrance almost offering new data center footprints
that's going to be closer to the companies that need
the access to the compute.
Speaker 6 (07:11):
You're then also going to be.
Speaker 3 (07:12):
Discussing this new AI push towards regulation, but ultimately standards
and investment coming from the US government. We just had
Chuck Schumer, of course, right, that key AI thought leadership piece.
Basically there's no real regulation in it yet. Will we
be delving into that. But all of this very much
focuses on the US and bits China and the worry there.
(07:32):
But what about Europe, what about Japan? What about other
areas that you can invest geographically?
Speaker 7 (07:37):
Joanne, Yeah, I mean asking.
Speaker 8 (07:40):
One of the big trends that I'm going that's related
to this space is the desire for let's call it
self sufficiency regionally to have for countries and regions like
the US and Europe to have their own capability to
manufacture those high end chips.
Speaker 7 (07:55):
Whether regulation and how regulation evolves.
Speaker 8 (07:58):
Over time is really hard a hard thing to sort
out at this point, and so we don't try to
make bets based on regulation changes.
Speaker 7 (08:07):
It's just sort of too.
Speaker 8 (08:08):
Early to know what Chuck Schumer's and that bipartisan groups
proposals will actually mean. So instead, again, what we can
do is look at how the subsidies are.
Speaker 10 (08:17):
Evolving and how the tariff barriers and restrictions are evolving
to push the manufacturing of advanced semiconductors around the world.
And what it means, right is we're going to get
more chip manufacturing, which is good for the equipment suppliers
by the way, and probably get some cheaper chips as
a result of a bit of overcapacity over time.
Speaker 3 (08:39):
When you therefore look at some of the startups coming in,
when you think about where to allocate to, where's already done?
Speaker 6 (08:46):
Well?
Speaker 3 (08:46):
Is in Vidio ahead of its earnings next week, still
at the right valuation point to enter.
Speaker 11 (08:52):
Well?
Speaker 8 (08:53):
You know, a company like in Nvidia has many years
of growth head of it, and its valuation reflects the
expectations about how high that growth will be and for
how long it can be maintained. And right now, and
Video with its chip technology is well ahead of competition. Yes,
a m D is coming along, and they will they
will definitely have a good chip in the race. And
(09:15):
we talked about Broadcom with their teaming up with Google
and others. But ultimately, and Vidia has not only the hardware,
the most advanced chips with the most capability for training AI.
Speaker 12 (09:26):
But it also has the software that is needed to
make all of that work, that Coupa software that it's
been developing over decades. So it really does give Nvidia
a substantial and defensive lead for several years to come.
Speaker 7 (09:38):
That doesn't mean that we're not going to get.
Speaker 8 (09:40):
Newsflow that disturbs those long term forecasts, and that could
cause disruptions in the stock price. And that's why we
think for Nvidia to be helped by clients. In our
growth portfolio, it's a substantial position, But in our balanced strategy,
where clients have a perhaps a more conservative view on
what their portfolios need to do over time, it's a
smaller position because of the volatility that we're likely to
(10:02):
see as expectations can be disrupted at any time.
Speaker 5 (10:05):
M Foinie, how are you and Advisor's Capital using AI
at home and at work?
Speaker 8 (10:11):
Well, I know from talking to the marketing guys, for example,
that they're using AI to create We just had a conference,
for example, they created a lot of the background material
for the conference, the images. I worked with a colleague
recently to do a podcast on behavioral finance, and he
generated notes using AI.
Speaker 7 (10:30):
Questioning, Hey, what did Danny Kahneman contribute?
Speaker 8 (10:33):
And so I saw all these great notes, I'm like, wow,
that's it's impressive. He said he did it in fifteen minutes.
So it's an incredible time saver for folks. Quickly needing
to generate content or get quick answers to questions and
to generate images for marketing materials.
Speaker 5 (10:46):
J am Feenie Advisors Capital Management. Great to have you
back on the show. Thank you so much. Now coming
up from Bloomberg Technology, we have all the details on
that open Ai and Reddit relationship and a new partnership.
Stay with us, We will be right back. This is
Bloomberg Technology. So open ai unveiled a partnership with Reddit
(11:14):
that will bring the social networks content to chat, GPT
and other products, but also allow Reddit to add new
AI features to its online communities. That's bringing Bloomberg Sharen
Gafari for more a bit of a scramble last night
because the market reacted right. Reddit shares now really high.
Just give us the basics of the deal in both directions.
Speaker 3 (11:34):
Sure.
Speaker 13 (11:34):
So open ai, which has kind of an insatiable desire
for data right to train its models and to just
show data within its chat GPT app, will now have
access to Reddit posts, and that's going to happen through
the Reddit api. So you know, whatever people post on Reddit,
open ai now has the legal right through this deal
to actually use that in its products and to train
(11:56):
its products on Reddit side. You know, they are presumably
getting some kind of financial benefit from this, although the
terms of the deal have not been disclosed.
Speaker 3 (12:05):
Also, perhaps they fold in open AI's own large language
model and AI applications within the use of Reddit. It
seems as though there's going to be advertising involved, and
the question to me sharing is what do they get
that's different versus the Google agreement. We know the amount
of money it seems that they got from Alphabet already,
but why therefore so embed open ai from an actual
(12:29):
AI architecture perspective and not Google's.
Speaker 13 (12:34):
I think that these media companies, social media companies, publishers,
they're kind of looking to just get the most value
that they can out of the data that they have, right,
so I think the deals are very similar. I think,
you know, we just have a little bit more information
about how much the value of that Google deal was
on the advertising front, because there was a mention in
there in their release I actually clarified with open Ai.
(12:56):
So all that means is that open ai is actually
going to place ads on Reddit as part of the deal,
So we're not seeing a kind of deeper ad integration
that's that some may have had thought.
Speaker 6 (13:09):
Really fascinating.
Speaker 3 (13:10):
And I think also we've got to remember the history
of Reddit and Sam Altman. Even though it says really
that it is Brad Lightcap that forged this deal, certainly
is one of the key investors in Reddit at the IPO.
Those ties go deep, and the fact that he is
interrom CEO for a short while putting the Suran Gafari.
We thank you so much for talking us through the
latest deal. Meanwhile, let's talk about the space race that's
(13:31):
upon us, because we're just so you can look at
Elil Musk's Starlink.
Speaker 6 (13:34):
It's launched, friends of competition for space dominance. Just take
a listen.
Speaker 14 (13:41):
The largest single constellation of satellites orbiting our planet is
run by a mercurial individual who needs no introduction. It's
this guy. It achieves this by maintaining a vast relay
network in low Earth orbit. That's the area higher than
a jetliner but below a GPS satellite.
Speaker 15 (14:02):
Right now, Starlink has more than five six hundred satellites
in orbit.
Speaker 14 (14:07):
And it accomplished all this in less time than it
took James Cameron to make a second Avatar movie.
Speaker 15 (14:13):
At one point, SpaceX and vision launching up to forty
two thousand satellites.
Speaker 14 (14:19):
But this speed and relative success has raised eyebrows, concerned
ones in government and excited ones in the boardrooms of
potential rivals.
Speaker 15 (14:27):
It's essentially a company trying to disrupt a somewhat complacent marketplace.
Speaker 5 (14:38):
So you can catch the full thing from Bloomberg originals
at Bloomberg dot com.
Speaker 4 (14:42):
It's it must kind of watch.
Speaker 5 (14:43):
And the speed and relative success of elon musk Starlink
has encouraged the deep pocketive rivals like Amazon co founder
Jeff Bezos and his Blue Origin, which is actually slated
to resume space tourist flights this Sunday after it had
stopped crude operations two years ago following a mid flight mishap.
I want to go out to Chicago and Bloombo's Kyle Porter.
Speaker 4 (15:03):
Let's start with the starlink doc.
Speaker 16 (15:04):
Right.
Speaker 5 (15:05):
That was one minute, but it's a longer thing. Tell
us about the other items that you covered off in it.
Speaker 17 (15:11):
Well, thank you for having me on ed. We cover
quite a bit of ground in those seven minutes. We
look into how the service performs, Elon's plans for growth
of the service, potential rivals, and as that one minute
alluded to difficulties geopolitical and technical.
Speaker 4 (15:26):
With the service.
Speaker 3 (15:27):
Let's talk about technical difficulties because there's been a few
launches that have been delayed of late. We're also anticipating
the re launch or well certain regalvanization of Blue Origin
this weekend.
Speaker 6 (15:40):
Things have been stopped start.
Speaker 17 (15:43):
They certainly have a little bit, and Elon's been a
little bit frustrated in his getting approvals to build out
the size of the network that he wants. Starlink's biggest
problem is getting satellites in the air. Doing things in
low earth orbit is fantastic and it decreases the latency,
which is the time it takes for the signal to
get back and down to your dish. However, you really
(16:04):
need to think of it like filling off a bath.
You need an awful lot more satellites in the air
to stop your service slimming down. Frankly, they're not doing
it as quickly as they'd like.
Speaker 5 (16:14):
Kyle, my understanding is you and I are under orders
to be awake very early this Sunday because Blue Origin
will try to launch its tourism offering again after two years.
Speaker 4 (16:23):
Just give us the basics of that mission.
Speaker 17 (16:26):
Yes, well you'll be earlier than I am. Thank goodness.
The plan is after twenty twenty two. There was a
mishapen I'm thankfully unmanned flight which saw Blue Origin ground
its flights. This will mark the resumption. I believe it's
the seventh flight to carry a crew, and it's also
going to include someone rather special.
Speaker 9 (16:45):
Ed D.
Speaker 17 (16:46):
White, who was part of the original NASA program, would
have been the first African American in space had he
been picked.
Speaker 3 (16:52):
And then not to mention what happens early next week
Boeing's first cruise space flight maybe just maybe using its
Starliner craft. So that's been delayed a little bit. Maybe
it'll come on May twenty first. There is a lot
going on in space, has always been most Carl Porter
helping us tell that story. I hope you both have
to get up too early someday. Meanwhile, coming up after
a volatile week of trading the Memestock rally, coming to
(17:14):
back down to Earth.
Speaker 6 (17:15):
I could have used all the puns about to the moon,
but I won't.
Speaker 3 (17:18):
We will bring you the latest next as a rumored technology.
Speaker 5 (17:30):
It is time for talking tech. These are some of
the other stories we're following in the news. First up
Snowflake is in talks to acquire startup Wreca Ai for
more than one billion dollars. That's according to sources. RecA
Ai is a producer of large language models and would
enable software maker Snowflake to offer generative AI capabilities. Record
Ai was founded in twenty twenty two and was valued
(17:52):
at three hundred million dollars in a twenty twenty three
investment round. Plus, Ingram Micro is preparing to move ahead
with plans for an IPO that could raise more than
one billion dollars. That also according to sources, who say
Ingram's considering seeking evaluation of as much as ten billion dollars.
The company has been working with Goldman Sachs and Morgan
(18:12):
Stanley on the listing and is said to have added
JP Morgan to its list of advisors, and Microsoft avoids
a UK antitrust probe for its partnership with meestrel Ai.
Last month, the UK Competition and Markets Authority announced that
it was gathering information on whether the two companies threatened
competition in the UK. The watchdog group reversed that decision,
(18:34):
saying Microsoft does not have the ability to quote materially
influence Miestrel's commercial policy.
Speaker 3 (18:42):
Caroline, Let's just go back to what was quite the
frenzy at the start of the weekend, all the mean stops,
but now that's come to a bit of an abrupt halt.
Came so off as you see now only up sixteen percent,
shares falling for a third secutive day. In fact, as
a company pre announced earnings. So it may set up
to fully five million shares. Let speke it all down
in the most Bailey lipshals. And the point here is
(19:02):
that we had GameStop.
Speaker 6 (19:04):
And AMC really soaring at the beginning of the week.
AMC made the most of it. Now game stops trying
to make the most.
Speaker 4 (19:11):
Of it exactly.
Speaker 18 (19:11):
AMC happened to have that at the market offering in
the works before, so they were able to capitalize on
that raise about one hundred and twenty five million.
Speaker 4 (19:19):
Dollars through sales of new shares. They also then.
Speaker 18 (19:22):
Announced a debt for equity swap, so diluting investors, but
trying to shore up the fact that they had at
least at the beginning of the week north of four
and a half billion dollars in debt. Now game stop
to be Fair doesn't really have debt, they don't need
the cash. But when I talked to market watchers, they
basically said, they are two times you sell shares, one
when you're stupid not to and one when you need cash.
And it does seem like games stop trying to move
(19:42):
to capitalize on the rally. But as you mentioned, not
only up seventeen percent this week, not up the two
hundred and seventy percent it was at the start of
the week on Tuesday, and.
Speaker 3 (19:51):
We got a little bit of fundamental news unlike what
has driven this meme stock rally.
Speaker 6 (19:56):
And they pre announced their earnings. How do they fare?
And it looks as though revenues are under pressure.
Speaker 18 (20:02):
Under pressure missed what Wall Street had penciled in. But
they're only how many I would say there are two
analysts who follow it, so it's not really like we
can say there are dozens of analysts who kind of
are sharpening their pencils to come up with what they
should be reporting.
Speaker 4 (20:13):
But it is slowing.
Speaker 18 (20:14):
They are focused really on getting back to profitability. So
the net loss was more narrow in the last three
months than it was this time last year, but still
fundamentally there are pressures there's kind of they need a
new game cycle, They needed a new console cycle. They
are also battling with the fact that people download games
and don't go to stores, and that's really been the
bare Case four game stop even well before twenty twenty one's.
Speaker 5 (20:35):
Craze Bailey, Hello Happy Friday. I was talking to somebody
interesting last night, let's call them a market participant, and
I asked about Roaring Kitty And I was like, has
anyone yet worked out what Roaring Kitty was trying to
communicate through social media? And this person, again let's call
(20:56):
them a market participant, was like, do we even know
that it is Roaring Kitty?
Speaker 18 (21:01):
If we don't, And that's why it's scary, because we
haven't seen the person who operates under the moniker Raring Kitty.
Keith Gill hasn't been on social media. He used to
be streaming on YouTube and different means back in twenty
twenty one. In twenty twenty he hasn't physically appeared, so
that x handle was back to posting a number of videos.
Speaker 4 (21:21):
But to your point, no one's been able to confirm or.
Speaker 18 (21:23):
Talk to Gil himself to see if he actually has
resurfaced after almost three years of being away from social media,
or to read between the lines that what your source
is pointing at.
Speaker 4 (21:33):
It could be other actors, but no one really knows.
Speaker 5 (21:36):
What is interesting is that loads of people tried to
play the game this week.
Speaker 4 (21:40):
Right.
Speaker 5 (21:40):
People have taken to social media and said, oh, look,
I made a small amount of money by buying or
selling games of AMC shares. Is there any sense that
there was something bigger than that, beyond just retail trade
is playing the moment?
Speaker 15 (21:53):
Well?
Speaker 18 (21:53):
We wrote about this throughout the week, and when you
look at the trading flows on the likes of a
Fidelity or an interactive brokers, it's a small portion compared
to what we saw in twenty twenty one. And if
you look at Fidelity's platform over the past week, the
number of buy and sell orders has basically been matched.
So when you look at the hundreds of millions of
shares that have traded four game stop in the north
(22:13):
of a billion shares in AMC that have traded, the
underlying factors would point towards this likely being some form
of momentum or quantitative funds trading in it.
Speaker 4 (22:22):
Bloomberg's Bei lip Schultz, Well, week, it's been tha. Thank you.
Speaker 5 (22:25):
Now coming up on the show, cloud computing company Core.
We've received seven point five billion in private debt. We're
going to speak to the CEO next. Stay with us
because we'll be right back.
Speaker 4 (22:34):
This is Bloomberg.
Speaker 5 (22:45):
Welcome back to Bloomberg Technology, Ed Lovelow here in San Francisco.
Speaker 6 (22:49):
Caroline had in New York.
Speaker 3 (22:50):
Let's get your cold check on these markets, because it
has been a week, and it's been a macro fueled
week in many ways, some of the data points shining
a light that maybe the FAG can still cut. We've
got therefore, benchmarks near or at record highs. There certainly
have been for the Nasdaq one hundred, the Nasdaq SMP
five hundred, of course, the Dow hitting more than forty thousand.
Speaker 6 (23:06):
We're just wavering on the days.
Speaker 3 (23:07):
Perhaps we just trade into this weekend and take a
little bit of profit. But stock six hundred not as
strong a week, up less than a percentage point, but
still up for two straight weeks and still near a
record high as well. Remember it was four straight weeks
on the US benchmarks as the longest winning street that
we've seen since February. I'm looking at Bitcoin up three
hundred quarter percent. It's having a good week two and
we're currently up at sixty seven thousand. Move on and
(23:29):
have a look what's happening in terms of individual names
that are on the move, and notably Take two is
actually one of the best performers on the NASDAK one
hundred gaming company coming out and saying sorry, we're delaying
it again the latest grand theft auto. But at least
we're getting a timetable a little bit more resolutely, and
so investors seem to be in a forgiving mood when
maybe some of the numbers did have to be daled
back more broadly for this year, the school year's revenue
(23:51):
because of the delay to the start of twenty twenty
five PDD I'm looking at, of course, TMU ubs upgrading
their stock saying that look, we're all over exaggerating the
limitations of TEMU into geographical diversity on the back of
geopolitical threats. In fact, they think that they're still going
to be a winning formula. PDD get their numbers on
the twenty second of May. Who else gives us their
(24:12):
numbers next week in video we're currently down by eight
tens percent, but ed we're looking at in terms of
the world of AI.
Speaker 5 (24:18):
Well, a name that's very closely tied to in video.
In one of the largest private financings to date, cloud
computing company core Weave has received a seven point five
billion dollar debt package led by Blackstone, Magnetar and Co.
Two and please to say were join now by the
core Weave CEO, Michael and Tranter. Okay, let me frame
it this way. Seven point five billion dollars is a
(24:41):
lot of debt financing. It's a very large number. You
are an unusual company because you're doing something with pace
but very closely tied to in video. So I think
our audience would appreciate that you just kind of explain
how you got the debt financing and how it's structured,
because the cast of character in there are also unusual.
Speaker 11 (25:03):
Yeah, so first of all, thank you for having me
back on again. They appreciate the opportunity to, uh to
speak with you in your in your audience. So, uh,
this is a very exciting financing for us, and it
follows very closely on the coattails of a one point
one billion dollar equity round that we.
Speaker 9 (25:23):
Completed last week.
Speaker 11 (25:25):
And so it's been a very very active period of
time for for Core. We've in the capital markets, the
the uh the.
Speaker 9 (25:34):
Syndicate of lenders, which is really who's who.
Speaker 11 (25:39):
Of private lending, including you know, as you said, Blackstone,
magnutar Co two, but you also have Carlisle, CDPQ, Digital Bridge,
black Rock, Eldridge, you know, like really wonderful names, really
great supporters that that have a deep understanding of the
business and you know, really provide in coordination with the
(26:01):
equity round that closed last week and a deep validation
for the solution that we are delivering to the market,
our approach to building you know, ait cloud infrastructure. And
so it's been really oneful few weeks here for the
company as we really pushed towards enormous scale.
Speaker 6 (26:22):
I mean, this is a big pot of money.
Speaker 3 (26:24):
As you referenced one point one billion equity funding just
done two weeks ago. You've now got the seven and
a half billion dollars more of debt put to work,
and it's about infrastructure. Seems to be the fact that
you want to be doubling your.
Speaker 6 (26:36):
Footprint when it comes to data centers.
Speaker 3 (26:38):
You've already expanded into London outside of the US, You're
going to be buying those chips the infrastructure, So where
will you put the data centers first and foremost?
Speaker 7 (26:46):
Michael, Sure, So.
Speaker 9 (26:48):
A couple of things.
Speaker 1 (26:49):
One is, in total, over the past twelve months, we've
raised twelve billion dollars into COREWAK and that is representative
of an incredibly capital intensive build out of infrastructure, initially
across the United States.
Speaker 11 (27:06):
But now, as you said, we're pushing into Europe. We've
we've we've got too data centers that we're building in London,
We've got.
Speaker 9 (27:12):
A footprint in Spain, will be up in the Nordics.
Speaker 11 (27:15):
In total, we'll have twenty eight data centers by the
the end of this year that we will be providing
our clients infrastructure from. You know, we try to build
our data centers approximate population centers. You know, think to
like as the you know, the NFL strategy, you know,
in terms of trying to put our data our data
(27:38):
centers so that they are relatively low latency providers of infrastructure.
But you know, as I said, our footprint is getting
much larger very quickly. And you know this, this this
pool of capital here is seven and a half billion,
is really focused on the physical infrastructure that we have
to build in order to deliver our products to our clients.
Speaker 5 (28:03):
Michael, I think a lot of people are really starting
to become concerned or at least inquisitive about energy and
power consumption. Have you a clear strategy for energy and
power sourcing and all the geographies you've just outlined, Yeah,
we do.
Speaker 9 (28:18):
And it's a work in progress.
Speaker 11 (28:22):
You know, the rate at which we're scaling, we are
continually addressing that. My background is actually from energy, and
you know that's where I grew up, and prior to that,
I really focused on environmental commodities, and so it's something.
Speaker 9 (28:37):
That's near and dear to me. It's near and dear
to the company.
Speaker 11 (28:39):
We have an entire team internal to the company that
are building a strategy we'll have in place by two
thousand and thirty as we go through this rant. And so,
you know, we understand that there is a moral imperative
to take responsibility for the energy that is required to
be able to deliver this type of resource to the world.
Speaker 6 (29:03):
So what is it? Is it nuclear?
Speaker 3 (29:05):
Is it just having to be more efficient with what
you've got, go for more power efficient chips.
Speaker 11 (29:12):
Yeah, So the answer is is, like so many things
around energy is it's a combination of a number of things, right.
So a great example is in the next iteration of
our technology build, we'll be moving from air cooled data
centers into liquid cooled data centers, and the savings that
(29:33):
are associated with liquid cooled provide maybe thirty percent more
energy efficiency within the data center because you don't have
to run all the air fans, you don't have to
move so much cooling through it. It's just more efficient.
And so there'll be a significant step function.
Speaker 19 (29:53):
That you will be able to achieve by just evolving
the technology into the most modern energy efficient component.
Speaker 9 (30:04):
The other thing to think about is from computational perspective,
the the.
Speaker 11 (30:08):
The hardware that that is being delivered, Yeah, right now
is enormously more energy efficient per flop than it has
ever been in the past.
Speaker 5 (30:19):
I know somebody that will make that argument. Next week
on Monday, I'm going to speak to Jensen Wang, Michael Dell,
and Bill McDermott, all at the same time. The success
of those companies, Michael, to which one is your fate
most closely tied?
Speaker 9 (30:37):
So look, you know we have a wonderful partnership with
in Video.
Speaker 11 (30:45):
You know they are absolutely at the epicenter of anyone's
approach to building out the physical infrastructure.
Speaker 9 (30:55):
For serving the AI markets.
Speaker 11 (31:00):
That is a reality of where we are right now
and will be for for quite a while.
Speaker 9 (31:07):
You know, Michael dell.
Speaker 11 (31:08):
Is is you know, del is an extremely important partner
of ours there. You know, we require them to be
able to build, uh the infrastructure that that incorporates the
the the the GPUs that we use, and so you know,
we we are you know, working with with with many
partners across the space.
Speaker 6 (31:29):
Are you too dependent Michael though, Are you too dependent
on a video?
Speaker 9 (31:33):
Uh?
Speaker 11 (31:33):
So the world is dependent on in video at this juncture.
Their technology is defining the space, and so we work
with them because our clients demand the technology that they
drive and deliver into the market.
Speaker 6 (31:50):
No I m D not any of us.
Speaker 20 (31:52):
So so we we we look at all different types
of silicon, We look at all different types of solutions,
but our clients have clearly indicated that for the time being,
the type of.
Speaker 11 (32:04):
Silicon that they require to build their products, to build
the artificial intelligence that's changing the world is currently being
driven in large part by the Nvidio infrastructure.
Speaker 3 (32:17):
Well, the share price reflects at core Wee've CEO Michael
and Treta, thanks so much for coming on to talk about.
Speaker 6 (32:23):
Your own funding.
Speaker 3 (32:24):
I mean, while coming up, we're going to be hearing
from the Salesforce CEO Mark Benioff about the future of
artificial intelligence.
Speaker 6 (32:29):
Who'd have thought it? This is Bloomberg Technology.
Speaker 5 (32:40):
In an exclusive interview with Bloomberg Salesforce CEO Mark Bennioff
suppose to us about working with activist investors, competition with
service Now, and his outlook for the future of artificial intelligence.
Speaker 4 (32:52):
Listen to this.
Speaker 2 (32:54):
I think I might be one of the few CEOs
that actually really enjoyed working with these activist investors. I
had never heard so many great new ideas in my career,
including such out of the box thinking and look, we
were able to really transform and evolve Salesforce over the
last year, and you can see it with our incredible
financial results that we had last year and our idea
(33:15):
that we're able to continue to move forward with these
incredible new characteristics of our company and our last earning
result we'veven talked about that we've started to create a dividend.
That's something that was beyond my imagination even just a
few years ago. So it's exciting to be the number
one CRM to help companies connect with our customers in
a whole new way. Right now, we're about to enter
(33:37):
an incredible new world, which is the world of artificial
intelligence and how it's going to transform these customer relationships.
And I think we're about to see some technology that
we never thought we'd see in our lifetimes. We're going
to see just some incredible new ways to run our businesses.
Speaker 16 (33:54):
Competition and CRM is feerce mark. You've got Service now
trying to poach a bunch of salesforce employees. I believe
they stopped using Slack after you bought it. They're trying
to build more of a consumer brand. They started their
own trailblazer program. Are they trying to pick a fight
with you?
Speaker 2 (34:14):
Well, they're an interesting company, you know. I just think
they need to be careful. They might be getting a
little ahead of their skis. We just replaced them at Disney.
Of course, we already had run Disney stores and Disney
guides in the Park, and we had done a lot
of things with Disney with their customer relationships. But I
think everybody knows that when they went to have Disney
(34:35):
Plus and wanted to have a call center, and they
chose that company. Well, unfortunately, Salesforce had to come in
and rescue the entire operation and rebuild all of the
customer success and call centers for Disney and which was
at that point had been called out as a marquee
customer of their as well. Salesforce is actually a tremendous
(34:57):
company that does real customers and delivers solutions in sales
service marketing for so many great companies around the world.
Now obviously standardized the Disney, but for so many other
or great organizations, banks, insurance companies all over the world.
And I think we're doing pretty well on.
Speaker 3 (35:17):
Our own iding talk coming from the Salesforce CEO Mark
Benioff as if you expect anything less.
Speaker 6 (35:23):
Meanwhile, the Senate's bipart of some AI.
Speaker 3 (35:25):
Working Group finally released is AI roadmap this week, but
it's getting some mixed reactions from civil groups, for example,
who feel that the industry is playing.
Speaker 6 (35:34):
An outsized role in shaping this legislation. Let's dig deeper
with all of it.
Speaker 3 (35:38):
Linda Moore is with US president and CEO of tech net,
which represents bipartisan network of Innovation economy, CEOs, senior executives
like the open aiyes of this world and Linda, I
can imagine that thus far, what's being said, the thirty
two billion dollars of investment coming for AI. The focus
on innovation is music to your ears. But are you
listening to what the civil side of the equation is
(35:59):
and the fact that they feel that regulation and god
rails aren't coming soon enough.
Speaker 21 (36:04):
Yes, I understand, and they were involved in all of
the AI insight forums that were held in the US Senate,
and I'm sure their voices will still be heard as
we go through the process. One thing that I think
that they need to understand and the public should understand
is last summer, these big AI companies in America made
voluntary commitments with the White House to secure the systems
(36:25):
to mitigate bias, all the risks and harms that can
be anticipated, and they also went beyond that to make
their own internal evaluations on all the risk mitigation that
need to be done.
Speaker 7 (36:37):
This will go through a committee.
Speaker 9 (36:38):
Process in the US Senate and also in the.
Speaker 21 (36:40):
House, and everyone's voice will be heard, including civil society
and our companies. The tech companies in the US are
working very closely with them and want to address all
their concerns.
Speaker 5 (36:51):
Apologies for the sneeze to our Bloomberg technology audience around
the world. It's allergies season, but I've recently discovered flow nase.
Speaker 4 (36:58):
Other products are available.
Speaker 5 (37:00):
Linda Caroline summed it up perfectly earlier when we were
talking about Chuck Schumer. There's a lot of speak coming
out of DC, but it's basically thought leadership. It's not substantive,
codified rules or way forward with AI. When do we
start seeing some concrete action.
Speaker 21 (37:20):
Well, we already saw concrete action just this week. On Wednesday,
the Senate Rules Committee passed three bills related to the
use of AI and elections. Eighteen states have already done that,
and there will be another hearing on AI policy next.
Speaker 9 (37:33):
Week in the US Senate.
Speaker 7 (37:34):
So I expect some of this to move pretty quickly.
There are other committees that will.
Speaker 21 (37:38):
Take a little bit more time, but I think you'll
see pretty expeditious action here in the next few months.
I can't say that every single part of AI policy
this reflected in the roadmap will be addressed, but I
think that they'll make good progress.
Speaker 9 (37:51):
In the next few months.
Speaker 21 (37:52):
I've been really pleased to see that AI is an
area of great curiosity and cooperation across the aisle. We
see such a partisanship in DC right now, and that's
another case with AI policy. We see people working together
and that's really great to see.
Speaker 5 (38:07):
Tech that President CEO, Linda Moore, we really appreciate your
perspective and analysis. Thank you so much. Coming up on
Bloomberg Technology, we're going to be joined by the CEO
of Visco. Remember Visco, the company reached two hundred if
well exactly it reads two hundred million users worldwide. Talk
about photos, talk about their turnaround.
Speaker 4 (38:27):
That's coming up next. This is Bloomberg.
Speaker 5 (38:40):
Visco, a platform for photographers and visual storytellers, just announced
first time profitability.
Speaker 4 (38:46):
Under its new leadership.
Speaker 5 (38:48):
But it's also a mass two hundred million users worldwide.
I want to dig into that with Visco CEO Eric
Whitman joining me here on set in San Francisco. So
our producer John Highland was reflecting that, like in the
early days of Visco, part of it was the technology
offering right specific filters, photo editing, and imaging. Two hundred
million users is a lot. The question is how they're
(39:08):
using it, Are they paying users, where are they and
principally what are they using it for?
Speaker 22 (39:13):
Yeah, great question, Thanks for having me on again too. Yeah,
you know, I think Visco has had a very long journey.
It's been around for ten years and we've seen multiple
versions of the company. It's really started by creators for creators.
So these were photographers, ad agency folks who are really
trying to support more people like them. And you know,
(39:33):
for a lot of these users, right, they come to
Visco for the tools, for the looks. They come because
they're trying to get a certain look and Visco is
a really easy way for them to do that. What
we find though, is people come for the tools and
they ended up staying for this really healthy creative community
where people can get to meet other people, get inspired
(39:54):
by their work, collaborate on other projects. And that's what
we're finding is where Visco is really sticking for a
lot of folks. And as we've been making our transition
more as a business to support more of those serious
creators like photographers, they're staying around for more of that.
Speaker 5 (40:08):
Of those two hundred million, how many of them are
a paying customer?
Speaker 4 (40:12):
Will subscribe it in some form?
Speaker 22 (40:14):
Yeah, so pay we primary our business models primarily subscription,
primarily membership, so it's a fraction of that two hundred million.
And where we're seeing most of our growth is actually
with a professional tier, which we just introduced a year ago.
Speaker 3 (40:28):
Okay, and I'm assuming that the professional is more opportunity
not only to be seeing business done between brands and photographers,
but also you taking yet further opportunity to boost revenue.
Speaker 6 (40:40):
How do you do that?
Speaker 9 (40:42):
Yeah?
Speaker 22 (40:43):
I mean first is really spending some time listening to
our customers, and what we're finding with a lot of them,
especially pro photographers, is it's increasingly difficult for them to
promote themselves, to find work to be discovered by brands
or other potential clients, and especially with traditional social media
and the algorithm's changing, where it's becoming increasingly harder for
(41:05):
those people to be discovered.
Speaker 9 (41:06):
There.
Speaker 22 (41:07):
What Visco is doing is we're providing a great way
for these people to create and express that creative identity
and then be discovered by other people. And in our
recent introduction of Visco Hub, which is this is a
very smart and powerful AI driven engine that allows people
to get discovered by brands and other potential people who
(41:29):
want to hire them.
Speaker 6 (41:30):
Where are you, Eric?
Speaker 4 (41:31):
Though?
Speaker 6 (41:31):
In terms of those two hundred.
Speaker 3 (41:32):
Million, how many are actually just people in gen Z
millennial wanting a different type of social media. That's how
you initially catalyzed growth. You were an alternative where you
didn't want to be garnering just likes and the anxiety
that came with that. Do you benefit from the backlash
that we can still see and the push out potentially
(41:53):
of TikTok?
Speaker 5 (41:55):
Yeah.
Speaker 22 (41:55):
I still think that there's a lot of people who
come to Visco because they want that safe place to
engage and connect with other people.
Speaker 4 (42:03):
We get over a million.
Speaker 9 (42:05):
Signups a month.
Speaker 22 (42:06):
Organically, we don't do any paid advertising, and this is
something that I think many people come to Visco for.
Speaker 4 (42:13):
However, that's not our focus.
Speaker 22 (42:15):
We do find that a lot of gen Z who
want to increasingly become professional creators or professional photographers themselves.
They come because they.
Speaker 5 (42:25):
Quick carry So I think there's a lot of skepticism
about two hundred million, and so Visco uses two hundred
million of view around the world which have a camera.
I'm looking at If you are a Visco, use a
contact us. I'd like to hear from you. Caaren mentioned
one TikTok and one million on board a month.
Speaker 4 (42:39):
Are you onboarding from anywhere? Specifically? It's organic.
Speaker 22 (42:43):
I mean a lot of people are just right now.
Speaker 4 (42:44):
They've got to be coming from somewhere. It's a battle
for eyeballs. Yeah.
Speaker 22 (42:47):
The biggest, the biggest place we're finding these customers is
actually coming from Instagram. So that's our biggest referral source
is people who are coming over from Instagram. Second is
people just finding Visco on the web. They're looking for alternatives.
They are looking for places where they can express themselves
creatively in a healthy and authentic way, and Visco is
that place fascinating.
Speaker 3 (43:09):
Risco CEO Eric Whitman on being a bit dea positive
on a million people adopting your platform every single month.
Speaker 6 (43:16):
We thank you for talking us through where they're coming from. Now.
Speaker 3 (43:19):
That does it from this edition of Bluebod Technology, and
what a week it has been, and we brace ourselves
from an amazing conversation come Monday, ed.
Speaker 4 (43:26):
Yeah, yeah, just an incredible week.
Speaker 5 (43:29):
You know, earnings AI it all continues, and it does
continue Monday.
Speaker 4 (43:32):
Thank you know.
Speaker 5 (43:33):
I'm having this big conversation with Jensen Wang and Mike
Michael Dell recap today. Though we cover a lot of ground,
you know where to find the pod. Thank you to
everyone that tunes in, and thank you to those who
listen to the podcast.
Speaker 4 (43:43):
That's where you can see it and hear it. This
is Bloomberg
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