April 28, 2025 • 41 mins
Bloomberg’s Caroline Hyde discusses IBM's plans to invest $150 billion over the next five years in the US. Plus, Palo Alto Networks’ CEO joins on the company's latest acquisition. And FPV managing partners, Pegah Ebrahimi and Wesley Chan, talk about finding startups that outlive the AI hype and withstand an economic downturn.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news from the heart of
where innovation, money and power collide in Silicon Valley and beyond.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2 (00:35):
Live from New York. This is Blueberg Technology Coming up.
Speaker 3 (00:38):
Four of the Magnificent Seven are set to report earnings
this week. The giants make up nearly twenty percent waiting
in the S and P five hundred.
Speaker 2 (00:45):
So what's priced in?
Speaker 4 (00:46):
Plus?
Speaker 3 (00:47):
IBM plans to invest one hundred and fifty billion dollars
in the US over the next five years with Quantumer
mainframes made in America.
Speaker 2 (00:54):
And we will be joined by the CEO of Palo
Alto Networks.
Speaker 3 (00:57):
He announces a new deal to leverage the AI security opportunity.
But first we have Meta Microsoft come Wednesday. We then
have Apple Amazon.
Speaker 2 (01:06):
What is priced in? Where have it? Investors in?
Speaker 3 (01:08):
Analysts already started to think about the pull forward for
their fiscal quarter they report because of Taris and what
of the macro economic environment going into the full year
earnings expectations. Ran Vastella can can dig in because Ryan,
what's so interesting about these numbers the fact that many
analysts just in the lack of clarity, haven't been really
able to downgrade their expectations.
Speaker 4 (01:30):
Yeah.
Speaker 5 (01:30):
Absolutely, we're starting to see this in some names, especially
for twenty twenty six, But for the moment, people are
sort of holding firm with their expectations. We really do
not know what to expect out of results this quarter.
We really do not know what any company is going
to say about really anything about the economic environment, about
their outlooks for the rest of the year. That makes
it extremely difficult for analysts to know how to sort of,
(01:52):
you know, peg their expectations their estimates, and in turn
that means that valuations right now are sort of up
in the air.
Speaker 2 (01:58):
We really do not know what fair value.
Speaker 5 (02:00):
Looks like because it is hard to evaluate these companies
on a price to earnings basis if there is so
much uncertainty about the earnings.
Speaker 3 (02:07):
I mean, look, we're looking currently at analysts being very
slow to cut profit estimates on the twelve month earnings
projections for a Meta for example. But Ryan Meta is
going to feel the effects of Chinese companies like Timu
like Shean no longer advertising with them. Potentially we're going
to see a downdraft there. And also they've got hardware
(02:27):
that they have to import from China. Are we going
to get any signal of what that does to the
bottom line?
Speaker 5 (02:33):
Yeah, I mean, I think these kinds of questions are
really what is paramount for investors right now. Obviously, these
companies have their own sort of individual impacts related to
tariffs and so forth. A company like Meta, which is
so heavily reliant on online advertising, it's not going to
be as direct for them as it will be for
a company like Apple, which is hardware based. So I mean,
obviously we're going to see different kinds of impacts, different
(02:54):
levels of impact. But I think overall, there's still so
much uncertainty about what the economy is going to look like,
not even a year from now, but even a few
quarters from now. We are a couple of months from now,
So again, any kind of clarity investors will get will
be certainly welcome, But it's hard to know how any
company can even be too confident about anything right now.
Speaker 3 (03:13):
Alphabet beat last week, and all of these stocks swored
the previous week as well. Raan Vas Fleastelica pushes us forward.
We thank you now President Trump's tarrorf announcements. They've roiled
Washington to Wall Street for nearly a month now. And
Chinese retail apps you just mentioned them, tea machine, they've
already started actually passing on the new import taxes onto
US consumers, onto you and me by hiking up prices. Now,
(03:35):
China bus far has denied having any trade talks for
the United States, though President Trump is still hopeful China
will make a deal eventually.
Speaker 6 (03:44):
They want to make it deal obviously right now they're
not doing business.
Speaker 7 (03:47):
Well, you know, people talk about going cold Turkey with
China and.
Speaker 2 (03:50):
Then they just forget about it.
Speaker 7 (03:53):
And we were losing hundreds of billions of dollars a
year with China.
Speaker 8 (03:57):
And now they're not doing any business with us, you know,
because not because of them, because of me.
Speaker 5 (04:04):
Because at one.
Speaker 4 (04:04):
Hundred and forty five percent, you can't do business.
Speaker 3 (04:07):
But something's gonna happen.
Speaker 4 (04:10):
That's gonna be possible.
Speaker 3 (04:12):
It begs Mike Shepherd standing by, and look, we all
still doing business with China. Many a consumer is still
buying from Timu and she In, but they're paying the
price for it.
Speaker 7 (04:21):
Well, you're right, kra and we are seeing now what
economists have been warning about for some time in relation
to the president's tariff policy, and that is that consumers
would bear the increased costs and economic pain of those
import levies. We are seeing that the prices are being
passed along now by Timu and by she In. At
she In, for instance, some goods, the prices have gone
(04:44):
up by as much as three hundred percent. And keep
in mind, Carra, it's not just here in the US
where the pain is being felt by consumers. The retaliatory
programs by some other trading partners, including Candidate, including China,
including the EU have increased costs and goods from the
US into those countries. And we saw Tesla over the
weekend urging consumers to try to tap the pre tariff
(05:08):
inventory before prices went up and before it became too
late to avoid those increases. So there is a ripple
effect and corollary effect, not just here in the US,
but elsewhere around the world.
Speaker 2 (05:19):
Cara, extraordinary reporting done.
Speaker 3 (05:22):
They just highlight you mentioned Tesla having to pass on costs.
Speaker 2 (05:25):
We've also got here.
Speaker 3 (05:26):
Import tariffs wearing on Tiamo's shopping cart. They look at
some of the most popular things that people buy on Team.
Apparently it's a fourteen and one power strip with a
surge protection and one touch control.
Speaker 2 (05:36):
Who knew that's the most popular item.
Speaker 3 (05:37):
But basically it's doubling in price because of tariffs MIC
And when we think of an Amazon, for example, Bloomberg
Intelligence thinks Amazon has about seventy percent of its products
were either offered by Amazon or third party sellers coming
from China.
Speaker 2 (05:51):
This is going to have a long term tail.
Speaker 7 (05:54):
This is going to have a long tail, and it's
not really just going to be sticker shot carro It's
going to be supply live shock potentially. We've heard from
a number of economists and experts out there, including the
chief economists that Apollo who one that we could be
seeing a COVID like shock. Remember this is a crucial
time of year. You and I were just trying to
get through the end of the school year, maybe for
(06:16):
our children, but we are all looking ahead. If you're
a retailer, you're thinking ahead to Christmas to back to school,
because now is when that inventory is actually planned, it's purchased,
and it's already shipped. It's usually in the water by
April to get here in time for back to school
and for the holidays.
Speaker 4 (06:36):
So there won't be a ripple effect.
Speaker 7 (06:38):
And we've already seen a drop in cargo shipments from
the world's second largest economy to the US in the
wake of these tariffs.
Speaker 4 (06:45):
So there is going to.
Speaker 7 (06:46):
Be a lot of pain felt along the supply chain.
It's not just going to be consumers at the end,
like you and me looking at prices in our Temu
shopping car, or even on the grocery store or other retailers.
Speaker 4 (07:00):
It's going to be in a lot of different places.
Speaker 3 (07:02):
And yet many hold out hopes for a deal. But
China pushing that once again that no negotiations are happening.
Speaker 7 (07:09):
Well, that's right, and Scott Besson is indicating that, hey,
you know, the ball is in China's court. We really
want talks to get underway. And the President indicated even
at the end of last week during a time when
Chinese officials were here in Washington for the World Bank
and IMF meetings, where maybe there was some contact between
the two sides, but it was informal and if it
(07:32):
even took place, And for the Chinese, they really want
something much higher level, they want something launched formally. They
would like to be speaking regularly with Scott Besson and
other officials of his port to be able to get
all of those key points for them, not just tariffs, remember,
but all the US export restrictions on advanced technology that
(07:53):
we've been talking about so much.
Speaker 3 (07:54):
Particularly in the semiconductor space. Mike Sheppard, thank you so
much for joining me while coming up. IBM to invest
one hundred and fifty billion dollars in the US over
the next five years. Why this is blue met technology.
(08:23):
IBM just raising its earlier gains as the market turns
a little bit lower. It just announced plans to invest
one hundred and fifty billion dollars in the United States
over the next five years. The latest company, of course,
that follows the likes of Apple or Eli Lilly pledging
to increase spending in the country following President Trump's election
and his teriff threats. Let's bring in brody Ford and
starting on IBM. It seems to be about made in
(08:45):
America the mainframe quantum compute. How much of an acceleration
in spending home in the US space is this?
Speaker 9 (08:53):
That is the big question. It's the one that is
so hard to answer looking at a lot of these announcements, right,
IBM says we're going to spend their billion in R
and D in the US. We look that they've reported
about thirty three billion in R and D over the
last five years. I believe most of that's in the US.
So it's hard to say is this an acceleration. Is
this them you know, putting a pretty bow and spending
(09:14):
they were going to do anyway? This is the big
question when we see these announcements from companies like Apple
or Nvidia. What's clear is that as tariffs hit, companies
feel a lot of pressure to say, hey, actually we
have capabilities in the US and upstate New York. We
can build your main frames too, And so I think
that's what we're seeing from IBM today.
Speaker 3 (09:36):
Alvin Krishna, the CEO, saying IBM remains the epicenter of
the world's most advanced computing and AI capabilities.
Speaker 2 (09:42):
Now I want to get to AI capabilities.
Speaker 3 (09:43):
Because I'm an interesting story you've been reporting on for
over in the UK. Nscale, which seems to be a
startup that is once again a Bitcoin minor turn compute offerer,
trying to raise money and they're talking about a deal
with bike Dugs.
Speaker 7 (09:58):
Yeah.
Speaker 9 (09:58):
Nscale is kind of like a or weave where they
are focused on building these AI specific data centers and
so they've been fundraised. They looking for a billion or
two in debt, telling everybody, hey, we are how we
have this deal with Byteedance for about assign the paper.
It's gonna be worth two billion dollars. We're gonna give
them all these great GPUs and Bye Dance told us
(10:19):
that's overstating things. We don't have that much business with them,
and so these situations are hard, right because GPUs are
a pretty geopolitically sensitive thing. Maybe byte Dance doesn't want
it out there. Maybe in scale is overstating things. I mean,
it's an interesting instance that shows us how much the
financing around AI data centers has become very interesting in
(10:41):
the last year.
Speaker 3 (10:42):
And of course they're rather home to in video chips.
Berdie Ford breaks that down. We thank you, and let's
talk more about in video chips and competition to them,
because over in China Huawei apparently the company is set
to test a new AI processor then it hopes can
rival those of Nvidia. Now it's all according to reports
on the Wall Street Journal in video trading, the as
you can see on the day now accelerating losses in
(11:02):
King talks about this about what's happening over at Intel.
But first Yan, what is the long term picture of
Huawei trying to help China become more self sufficient here?
Speaker 6 (11:12):
Yeah, I think what we have to do is because
it's very difficult to get a clear picture of what
is going on there and the capabilities of those chips,
what it is important to do is to take it
back to what Invidia has said, which is, look, if
we're not allowed to do business there, if we are
restricted from exporting chips to China, they will find a
way to do their own over time. It's just a
(11:33):
matter of time. And I think this report is another
example of efforts being made out there to do that.
Are they competitive with what Invidia can do? Probably not
at this point. Are they going to be wonderful? Are
they going to be good enough?
Speaker 10 (11:45):
Though?
Speaker 6 (11:46):
Is really the key question, And the answer is we'll see.
But they're probably another step on a path towards that.
Speaker 11 (11:52):
Well.
Speaker 3 (11:52):
In there's a more local competitor who hasn't been much
of a competitor to in video of late, and that's Intel.
Lit Bhutan written a great Tech Daily report really on
how is trying to nuance culture over an Intel.
Speaker 2 (12:06):
How has it gone down?
Speaker 6 (12:08):
Yeah, I mean he really didn't give any of the
concrete answers that Wall Street wanted in terms of when
are the new products going to arrive, when you're going
to have outside customers for your factories. What he did
focus on, and what he did give a very specifics on,
was like, Intel's culture is not in a good position,
and these are some of the shocking things that we're
seeing going on. Frankly, it was pretty brutal. That clearly
(12:31):
is something that he believes needs to be fixed. But
as we know, fixing a company culture and getting everybody
moving in the right direction is important, takes time, and
what is arguably more important is that you're getting them
moving in the right direction towards products, towards customer relationships
that will turn this company around.
Speaker 3 (12:49):
We have seen the response to the earnings in King
Tech in Depth, the newsletter out today.
Speaker 2 (12:55):
Go read it.
Speaker 3 (12:55):
Thanks so much. Now, as shakeup is underway for Apple's
AI and machine learning divisions, the company has begun to
break up would have been a pretty unified approach for more.
Speaker 2 (13:11):
Blue Meg's Mark German has more.
Speaker 3 (13:13):
You've been writing over the weekend about one particular executive
they lured away from Google in twenty eighteen, and now
he's getting some things pulled away from him.
Speaker 12 (13:21):
That's right. So here's the story with Apple. AI serie
launched in twenty eleven, and by twenty fifteen, twenty sixteen,
a little bit after that, they really fell behind Google.
Assistant came online. You had a lot of competitors, including
Alexa from Amazon, and it felt like Apple had squandered
a three four year lead. And at the time, Apple
(13:42):
felt that part of that is because the AI work
at Apple was scattered across the company, right They worked
in silos across different divisions, hardware, software services. So they
hired John gen Andrea, who was running AI in search
at Google at the time in twenty eighteen. They believe
putting everything in his group with skyrocket their approach to
AI and make them a true player in artificial intelligence
(14:05):
and machine learning.
Speaker 4 (14:06):
So far, it hasn't worked out.
Speaker 12 (14:07):
We saw how far they've fallen behind compared to Chad Shipt, Google.
Speaker 4 (14:11):
Gemini Copilot.
Speaker 12 (14:12):
So now what they're trying is breaking it up, going
back to their roots, going back to that Apple functional
organization and taking pieces of the AI group and re
scattering them around the company, and that started a few
weeks ago with Siri. They move Siri from their AI
division to their software engineering division, which makes sense to
some extent because Siri is well software. And now what
(14:33):
they're doing is they're taking the robotics division, which was
also in the AI organization, and moving that to hardware engineering.
Robotics that is a hardware play at heart, and so
it makes sense to put that in the hardware engineering division.
So we'll see how that works out. But to me
and to many people at Apple, it feels like they're
preparing for a world without a true AI chief, a
world where apples back to being completely functionally organized.
Speaker 3 (14:55):
And mark a world where they're about to report earnings
this week, they're trying to tackle China supply chain, move
it more to India. Just brace us for what we
expect on Thursday.
Speaker 12 (15:06):
I think that Apple this is going to be one
of the more interesting Apple earnings results presentations in a while,
not because of the numbers that they're going to share,
not because of the data they're going to be given
the prepared remarks, but because they have a lot more
questions they're going to have to answer than usual. Things
when it comes to AI, of course is going to
be big on the minds of analysts on the call,
(15:27):
but also tariffs, also dealing with the Trump administration, dealing
with innovation questions. So that's going to be really important
earnings TOOLL to listen to, not because of what they're
going to come out and say, but because of what
they're going to be asked and how they're going to respond.
So I'm actually very much looking forward to that, and
everyone should stay tuned for our coverage there.
Speaker 3 (15:45):
Well, we're excited for your reporting on it, Mark German.
We appreciate all things Apple. And now.
Speaker 2 (15:50):
Meanwhile, in other AI.
Speaker 3 (15:51):
News, enterprise AI platform Writer is launching a new adaptive
reasoning model that it says is cheaper faster than competing lllms.
It eaches a one million token context window to create
more comprehensive responses. Mayhabi write as CEO joins us for
now and tell me about the new model and what
makes it different.
Speaker 10 (16:11):
Oh hi Caroline, so good to see you. Well that's
the headline.
Speaker 13 (16:15):
Palmyra x five is out and it is the first
enterprise grade, enterprise ready model built for agentic AI.
Speaker 10 (16:24):
So you got it.
Speaker 13 (16:25):
This is an LM with performance on par with other
frontier models, but it's radically three x faster, and it's
four times cheaper, and as of today it's available on
AWS Bedrock.
Speaker 3 (16:38):
Okay, So tell us about how you get that sort
of cost efficiency. You're offering what sixty cents per one
million input tokens, you're doing six dollars per million output tokens.
How do you get to that price point?
Speaker 5 (16:49):
Way?
Speaker 13 (16:50):
So it's really important for folks to understand what's required
to get enterprise grade agentic AI. When we launched our
AI HQ a few weeks ago, we had one hundred
plus pre built agents built for the enterprise, and folks
were asking me, how are you getting this kind of
efficiency and accuracy with really complex workflows Agents at a Uber,
(17:15):
at a Franklin Templeton, things that were capable of taking
multiple systems, data from third party and internal research, and
able to generate really complex work We are able to
take that full million token prompt and process that context
window in twenty two seconds, firing off multi turn function
(17:39):
calls in three hundred milliseconds, all while getting this price efficiency.
Speaker 10 (17:44):
It is a.
Speaker 13 (17:45):
Combination of breakthrough both algorithmic and data we train this
model on about a million dollars of GPUs, so also
incredibly efficient on the training and we passed.
Speaker 2 (17:57):
How how is this occurring?
Speaker 9 (17:58):
Way?
Speaker 3 (17:59):
Is this the new deep seek trend that we're seeing
that you just do more and more with this. It's
more about turning to open source. I mean, how have
you managed to be so efficient?
Speaker 8 (18:08):
Yeah?
Speaker 10 (18:08):
I mean we deep seeked before deep seek.
Speaker 13 (18:10):
So this is a one hundred percent synthetic data based
approach which has the IP friendliness that the enterprise really requires. Algorithmically,
we are doing a very interesting set of techniques around
a hybrid attention mechanism, blending linear and other approaches, and
(18:31):
we're doing a mixture of experts set of techniques, so
we're only activating the most relevant subnetworks and resulting in
much lower latency, much more efficiency.
Speaker 3 (18:43):
Mate, you talked about some of the very well known
companies that you currently serve. But to get these sort
of investors and the vanguards of this world to be
coming on board, how are you making yourself known? I mean,
are you having to offer this sort of price efficiency?
Speaker 2 (18:57):
Is that how you arrives above the noise?
Speaker 3 (18:59):
Because it just feels like there are so many offerings,
enterprise suited offerings out.
Speaker 2 (19:03):
There right now.
Speaker 10 (19:04):
It's absolutely so noisy.
Speaker 13 (19:06):
But what we're seeing is folks who don't have results
are understanding that they can't build everything themselves. So in
addition to enterprise grade frontier lms, we've got an end
to end platform for building, activating, supervising these agents. And
that's how we stand out, Caroline. That entire package is
what results in the incredible roy Forster just reported three
(19:31):
hundred and thirty three percent ROY on implementing writer for
building and using agents and it's one of the highest
that they've ever seen. So you're right, right, it's incredibly
noisy for these enterprises, but CEOs are seeing that their
CEOs are demanding results. And I think this is AI's
COVID moment, and COVID, you know, you had this explosion
(19:55):
of collaboration tools because forks, folks had to do it.
And I think we're going into, you know, the kind
of economic uncertainty that just demands results and writers providing that.
Speaker 2 (20:06):
Okay, so really interesting.
Speaker 3 (20:07):
You think that in this potential downturn from a global
GDP perspective, people could be more drawn to your products,
not less.
Speaker 10 (20:15):
Oh one hundred percent.
Speaker 13 (20:16):
I mean, we're AI software that builds software, and we're
already seeing it in our customer base executives CEOs who say, look,
before you ask for more headcount, before you ask for
more software, I want to see that AI couldn't do
it better.
Speaker 3 (20:31):
So what about that for your opportunities as we get
more nervousness, more economic uncertainty. I know that prior to
all of this you were getting other tech startups coming
to you saying, look, I can't keep on doing this,
my expenses are too high. Would you mind buying me?
Are there still the M and A opportunities out there
for you?
Speaker 13 (20:48):
Right now, we're trying to grow organically as fast as possible, Caroline,
we can't keep up with the demand.
Speaker 10 (20:56):
I'm with you from our London office.
Speaker 13 (20:58):
We're almost one hundred people here, more than four hundred globally,
trying to be eight hundred globally as soon as possible.
Folks really need results, and you know they're coming to
us to be able to really bring AI, especially agen
kic AI to the business.
Speaker 3 (21:14):
Mahavieve, it's always great catching up with you. Thanks for
joining us in London.
Speaker 2 (21:25):
Pano Also our networks.
Speaker 3 (21:26):
Manages to fight the narrative of a downward.
Speaker 2 (21:28):
Draft in the markets. We're up a quarter percent.
Speaker 3 (21:30):
And look, we're seeing the cybersecurity Leader announced it's intent
to acquire protect AI is expanding the company's capabilities in
security basically combating new threats, I mean an explosion in
artificial intelligence. All of this as we get the CSRSA
conference underway, joining us now Nikesha or a power auto
network CEO, You've got a lot to announce new security platform,
(21:51):
but let's just go to.
Speaker 2 (21:53):
The new announcement. In terms of M and A.
Speaker 3 (21:55):
You're going to get us an amount that you paid.
I was hearing about up to six hundred and fifty
million dollars.
Speaker 4 (22:00):
We're not going to talk about what we paid. Caroline.
Nice to see you.
Speaker 8 (22:02):
Like we're again at a technology inflection point. We're all
talking about AI. You had people talking about AAI earlier.
And every time you have a technology inflection point, it
becomes very important that we are able to come forward
and provide solutions to our customers so they can securely
deploy technology. And in that context, we're very exertively and
aggressively working on both a build and buy strategy to
(22:25):
build perhaps what will be the most important thing over
the next few years, which is a platform that allows
you to deploy AI securely.
Speaker 3 (22:33):
Okay, so let's talk about build versus by and why
was this asset protect AI so necessary to go inorganic
at this moment?
Speaker 8 (22:40):
Well, kind of like if you look at what's going
on in AI you were on before, people talk about LMS,
people talking about deploying AI based applications, People trying to
figure out how to deploy infrastructure, whether it's on prem
or in the public cloud, with chips set to use,
which model to use. All these are very important technological
decisions which are going to underpin the platform forms of
the future. Now, when you put them together and you
(23:03):
deploy them, you have to make sure that you're looking
at the security aspect of every one of these things.
Protector AI, after an extensive look around the market, we
found was working on some very interesting topics which are
complementary to what we've been building. We've been building a
great run time platform to if we protect our customers
as the DEPLOYI. Protector I was working on something similar
(23:24):
where they're looking at all the model in the world,
scanning them to make sure there wasn't bad stuff lurking
in them. So the combination of the two, which we
will integrate into one platform, actually allows us to be
more comprehensive and we will offer our customers.
Speaker 3 (23:38):
I just want to get your birds eye perspective here
in a kesh, because no one can push us forward
as much as you can in many ways to the
future of agenic KI.
Speaker 2 (23:45):
And the fact that where are we to ultimately be
protecting ourselves.
Speaker 3 (23:48):
There's demand for traditional, basically farwall endpoint products of security.
How does that shift if you're going from a user
level to an agent level in this moment, that's going to.
Speaker 8 (24:00):
The buzzword for RSA Carol, and people are going to
talk a lot about how do.
Speaker 4 (24:04):
You make agents work? I think it's still unclear.
Speaker 8 (24:07):
There's a lot of innovation being put out in the market,
whether as the A to A model that an MCP
Model's all wonderful buzzwords.
Speaker 4 (24:14):
We create in our industry.
Speaker 8 (24:15):
But as Agendica I've said before to me, Agendici becomes
real when you start giving AI arms and legs, whether
robotic arms and robotic legs or real arms and legs
in terms of replacing human beings, and I think that's
where the question becomes, can I rely on AI to
accomplish the task without supervision? And that's where things will
(24:35):
get very interesting and very hairy in certain cases. There
it becomes important only to make sure that the agent
you're giving autonomy to is something that you're very comfortable
will act within the guardrails that you put out there
for that agent. And then you got to make sure
nobody can take over your agent and hijack it in
a way that can make them do things you don't
want them to do.
Speaker 4 (24:54):
So I think that's going to be the next.
Speaker 8 (24:55):
Frontier of cybersecurity as we get AI deployed in multiple places,
is how do we give autonomous control to these agents?
How do we give them agency effectively? And can't wait
for that world to happen, But it's going to be
a whole new sort of set of opportunities that are
open up for us.
Speaker 3 (25:12):
There are a lot of names trying to make the
most of this opportunity. A lot of them are the hyperscalers.
A lot of them in many ways become your competitors
as they add their own security offerings. Where do you
sit in this whole FRENEMI environment, Well, you know.
Speaker 4 (25:26):
As we fascinating Caroline.
Speaker 8 (25:28):
Logically, the cloud providers should have been our competitors and
cloud security. They should have our competitors and endpoints secure,
but they're not. They're focused on making sure technology gets
deployed as quickly as possible, which is good perhaps for
their business, not all of their customers. Our job is
to make sure that we stay in lockstep with them
and work with our customers to make sure they can
deploy technology in a secure fashion. Let's be fair if
(25:51):
our customers have comfort that when they deploy AI, when
they give autonomous control to AI to do some repetitive
tasks or interesting time, it can be done securely. The
moment we can provide the underpinning of trusts, the underprinting
of reliability, the fact that if you deploy with Pollo
Auto Networks, there is a very high probability that it's
going to be much safer than anything else.
Speaker 4 (26:12):
I think that's where the winning combination happens.
Speaker 8 (26:14):
So I don't see this as sort of a competitor
environment for now with the hyperscalers. I see it as
an opportunity for us to work together and make sure
we accelerate the adoption of the technology, as opposed to
have our customers be confused.
Speaker 4 (26:26):
Which way to go.
Speaker 3 (26:27):
I mean used to work out Google. You host your
products on Google Cloud. How do you feel about their
big splashy deal for wiz.
Speaker 4 (26:37):
It'll be interesting to watch.
Speaker 8 (26:39):
I have lots of conversations with people at Google about it,
and we don't intend to change how we deploy our products.
We buy infrastructure from them, and sometimes we see them
in the market.
Speaker 4 (26:48):
Our hope is that our.
Speaker 8 (26:49):
Customers will understand that you want an unbiased product that
can operate effectively on every cloud provider, as opposed to
something that is beholden to a particular cloud provider.
Speaker 4 (26:58):
We still need to solve for everybody else.
Speaker 8 (27:01):
Out there, so I think that's our sort of athos.
We want to be independent. We want to be somebody
that can deliver the same level and capability or security
across every platform there is out there, so our customers
don't have to spend time trying to integrate all this
stuff together, which is our entire philosophy around platformization.
Speaker 3 (27:19):
I love following what you're doing in terms of platform offerings, products,
what you're doing in terms of well the latest MNA,
but I also love following on social and perhaps whether
you wanted to or not, you involved in the AI
debate about whether we're going to get as much CAPEX spend,
whether infrastructure is reality versus hype.
Speaker 2 (27:36):
Where do you stand on it right now?
Speaker 3 (27:37):
Nikesh?
Speaker 8 (27:39):
I think if you look around you, everybody is getting
ready for a very large adoption of AI scenario because
you see tens of billions of dollars being committed by
people in terms of building infrastructure.
Speaker 4 (27:50):
I think that's right.
Speaker 8 (27:51):
I think we may get the sort of the timing
not perfect. You know, you may build too much before
it's all consumed.
Speaker 4 (27:58):
But I think it's headed in the direction. I think.
Speaker 8 (28:00):
Short term, in this twelve to twenty four month timeframe,
you could see that a lot of the investment that's
going is going towards innovation. I say, make a smarter model,
make robotics work.
Speaker 4 (28:10):
So you need a lot of power.
Speaker 8 (28:12):
You need a lot of compute to get to a
place where these models become extremely useful. Once you get
to a point where these models are extremely useful, the
question becomes how do I deploy them in my business?
How do I, as a regular company, regular customer, deploy
these things effectively securely. I think that could take a
little longer than people think because everybody's experimenting and we're
(28:33):
not all experts yet.
Speaker 4 (28:34):
Now this is something that came about.
Speaker 8 (28:36):
Less than twenty four months ago, so we all have
to get our muscle understand how this affects our business.
How do I build robotic things that can do stuff
for me around my enterprise? How do I build AI
agents that can do stuff for me?
Speaker 4 (28:47):
I'm a enterprise.
Speaker 8 (28:47):
Do I build or do I buy from somebody? So
all that stuff will take a little longer to pan out.
But when it happens, we're going to need all that
capacity that's being built, and unfortunately, you can't wait to
build capacity, you have to build it ahead of demands.
I think I think it's the right direction. Timing's still
to be figured out.
Speaker 3 (29:05):
Well, thanks for sharing your expertise across all the subjects
and the deal news aqusha Ura go enjoy RSA. We
thank you, Palo Alta Networks CEO. Now next up, talking
tech first stuff, I'm talking about UAE data center developer Kasna. Well,
it's planning a major expansion into Saudi Arabia.
Speaker 7 (29:22):
Now.
Speaker 2 (29:22):
The company is looking to take.
Speaker 3 (29:23):
Twenty five percent of the market share already identified two
locations for its data centers, directly competing with smaller local
and specialized firms, plus German defense startup Arx Robotics. Let's
raised thirty five million dollars in its latest VC funding round,
and it's the second time in the past year as
the company aims to expand in the United Kingdom. Aarx
Robotics declined to share this new valuation and alphabet after
(29:45):
its earning is now set to be offering about four
million dollars in US high grade corporate debt today.
Speaker 2 (29:50):
It's according to sources.
Speaker 3 (29:51):
The company is said to be looking to sell the
bonds in as many as four parts and could mark
the company's first bond sale. This is the way back
in twenty twenty are coming up. We'll talk to the
managing partners of FPV about finding product led AI startups
for their latest fund you will.
Speaker 2 (30:06):
There's some news out on Sony.
Speaker 3 (30:08):
Could they be spinning out their semiconductor part of the business.
The shares have actually risen on the back of the
news that as the company tries to get more focused.
Of course it's all about PlayStation and gaming, but they're
also trying to be selling off some of the assets
that don't mean quite so much to the core business anymore.
Semiconductor has been One of them is Bloombag Technology, EUIL
(30:35):
masks XAI. Well, it's in talks to raise roughly twenty
billion dollars in funding for its newly combined AI and
social media business. According to sources, the deal would value
the company in over one hundred and twenty billion dollars,
according to one of the people briefed on the matter. Now,
if completed, it will be the second largest startup funning
round of all time behind guess who Open ai And
they're forty billion dollar financing earlier this year, according to
(30:57):
data from Pitchbook. Now, we've got so much when it
comes to VC. And there's more fundraising news from a
fund perspective. The venture firm fpv's raised five hundred twenty
five million dollars to fund target product driven startups. Fpv's
co founders have back companies such as Canva and Flexport
and Peace to Welcome to the show, Pega Abraham and
Wesley Chan join us. Now, congratulations on the funding round.
Speaker 2 (31:18):
Now we're excited, So tell.
Speaker 3 (31:20):
Me Pega first and foremost, how hard how easy was
it to get the LP's excited in.
Speaker 2 (31:25):
This current environment.
Speaker 11 (31:26):
I mean, you know you have we last time around
we raised I think when we announced it was the
seventy five basis points that the FED just raised.
Speaker 2 (31:34):
So we're used to this.
Speaker 11 (31:35):
And our investors are back really long term founders and
that's what we're focused on. So it wasn't the environment stuff,
and we're privileged to have raised. But you know, we
had just exceptional bluetrip founders who are really investing for
the long term, so they're not as distracted by the
short term stuff.
Speaker 3 (31:51):
I mean, Wesley, we think about how much Canva, for example,
has managed to be an iconic company you found not
on the West coast of America on any US A tool,
but over in Australia.
Speaker 2 (32:01):
How do you find teams like that? How do you
replicate the success?
Speaker 14 (32:05):
Yes, so our founders are amazing product driven founders, right,
so they see other amazing product driven founders.
Speaker 2 (32:11):
That's the secret.
Speaker 14 (32:12):
Like I spent over fifteen years at Google, of which
ten of them I help build the ad system, launch
Google Analytics, I helped launch Google Voice, I help bring
Android and help them grow. Like It's one of those
things that when you've worked on these products that are hundreds,
if not billions of people use worldwide, you have a
reputation for building great products that founders gravitate towards. And
so I got the opportunity to meet the Canva founders
more than a decade ago. They were very excited about
(32:34):
some of the product work that I did. I help
them build and prioritize some of their features, and they said,
let's work together. And that's what I love doing, is
spending time with founders that want to build products that
change the world, that do better whether there's a recession
or not a recession, and that just stand the test
of time. And so that's what we do here at.
Speaker 3 (32:50):
FPV, and it's about kind of being the operators alongside them.
People come to your experience from Google, your experience from Cisco,
experience from August Stanley and the technology area there pego,
and I'm I'm interested as to what advice you're giving
to found us right now when none of us really
having any idea with a clarityism.
Speaker 11 (33:06):
No. Look, so one thing is clear, and everyone's like,
what's happening to the market, and one thing it's clear
it's gonna be whiplash. I mean, we're gonna have a
few years up, up and down. But we both started
out during the tech bubble burst, and I was CIO
at Morgan Stanley during the financial crisis. There's gonna you
can't go up to the right all the time. And
if you're really building for the wrong term, you shouldn't
get you have to go with the waves, but you
(33:28):
can't really be building for the next year or the
next two years. And for the founders that are really
looking for those ten year plus horizons, it's actually a
great time because you have to focus. You can't get
as much distraction, you don't have as much competition.
Speaker 2 (33:42):
Because not everyone can raise.
Speaker 11 (33:43):
So if you're a mission driven founder who's really focused
on really changing the future, this is actually a great
time to just say laser focus on those big missions.
And if you're not a mission driven founder, look, it's
gonna be hard. If you're depending on the hype and
the short term stuff. It might not the hype might
not last on certain things. And so that's what we say,
stay focus. If you have a really big vision and
(34:04):
you know, work with the times.
Speaker 3 (34:05):
I mean, you have been the anti hype apostles in
many ways just saying cut through that noise.
Speaker 2 (34:10):
But Wesley, a lot of LPs.
Speaker 3 (34:12):
At this moment thought there'd be a little bit of
hyper our exits around IPOs, but.
Speaker 2 (34:16):
That's not happening now.
Speaker 3 (34:18):
How are you helping your current your previous fund bets
be able to give liquidity to that talent.
Speaker 2 (34:25):
How are you helping them sort of march through this?
Speaker 4 (34:27):
Well.
Speaker 14 (34:28):
One of the wonderful things about the LPs we found
is that they're long term thinkers. Right like we have
blue chip lpiece, most of them are charitable endowments and
foundations that think, you know, decades, if not like fifty
years out into the future, and they know in investing us,
we're not placing the bet for today. We're doing it
for ten years in the future. That's the liquidity time
horizon for venture capital. So we're not worried about like
if things exit tomorrow, ORF things exit next year, obviously
(34:49):
our LPs would like it, but we worry about if
things are going to be big in ten years. Right,
they have the option to exit, but if they hold on,
the add more value and our LPs are okay with
it because there's such long term thinkers, and we have
deep pools of capital.
Speaker 10 (35:01):
We want to return.
Speaker 14 (35:02):
Money to them, but we want to do it at
the right time, and we want to do it when
things are great. And so the help the companies that
survived the recessions, the companies that survived the market turmoil,
whether it's tariffs or whether it's crazy world war or
whatever else, Like they are left and they are the winners,
and then they have these wonderful exits. Google in two
thousand and four was dot com crash, right, and then
like they exited and they became a big market winner.
Speaker 2 (35:24):
Yeah, And I worked on the IPO.
Speaker 11 (35:26):
It was like it reopened the market and everyone was
freaking out that it was never going to come back.
Speaker 2 (35:30):
And they reopened it.
Speaker 11 (35:31):
And then you got you know, several years later after
the financial crisis worked, they all the salesforce, all these guys.
So there was great companies built during these times. And
I think it takes longer to exit, But that's one
of the benefits we have. Like is it ten years,
is it twelve years? It doesn't matter for compounding companies. Obviously,
it's harder for zero growth.
Speaker 3 (35:49):
I mean, everyone thought, cool, you would reopen the market,
and that was a very udio idiosyncratic kind of a bet.
But then ultimately the market's moved away from them. What
reopens us next time? What are we currently seeing value
a crew too? That's the right thing to have, value
a crew too, peck of Look.
Speaker 11 (36:05):
I think when the market's open, I mean, I don't
know if I can predict the future, but I can
tell you market's like a bit of stability, So it
might not be for a bit if we're not having
if we're not kind of knowing what's happening. I think
now we have the tear of shock that will smooth out.
Then people that have been ready for a while will
start saying, okay, we're coming back back in maybe, but
(36:25):
I think nobody wants to go when the tides are like,
you know, going up and down at the same time.
But I think people will have to eventually it becomes normal.
Maybe this this whiplash is actually normalized, and then people
don't care.
Speaker 3 (36:37):
I mean, Wesley Lin, you're looking for ten yas time
you're looking at perhaps private market valuations be impacted slightly
by public markets, But what.
Speaker 2 (36:45):
Is the tenure bet? What is currently interesting?
Speaker 3 (36:48):
Now there's going to be incredibly interesting in Tenya's time
that people aren't thinking about.
Speaker 14 (36:52):
So we have a lot of healthcare AI bets, right,
and that sounds sort of crazy because a lot of
people are running away from healthcare in the last couple
of years. But we have companies that are really using
AI or using machine learning to figure out the next
generation of drugs. And then we have a company that
has figured out how to do clinical trials and half
the time and half the price using AI to find
better patients. And then they are taking drugs out the
market themselves because they have this cost of manage.
Speaker 9 (37:14):
These are massive tenure bets.
Speaker 14 (37:15):
The founders are amazing and mission driven, and they're able
to raise capital and hopefully they'll be around when everybody
else is getting washed away by the hurricane.
Speaker 2 (37:22):
I think the healthcare bit.
Speaker 11 (37:23):
And I would say also, you know, at the first
craze of AI, everyone gets excited about it feels like
not incremental tech, and I think they're really exciting stuff.
There's no it's kind of like the cloud times. If
you're building a company and you're not building on aws
like they're, you're like crazy, So of course you should
be using AI. But I think it's are you Are
you working on the big problems and are you working
(37:44):
on not the incremental things, but they're really big things
that just weren't possible. And that's the things that happen
with health, in biotech.
Speaker 2 (37:51):
And some of those things.
Speaker 11 (37:51):
It's just things that just weren't possible because now you
can do it.
Speaker 3 (37:54):
Pega, we go thirty seconds. Are they got to be
built in the West Coast? Are they going to be
built globally? Where are you going to find this us?
Speaker 11 (38:00):
I mean we're going to go everywhere wherever great founders
are and hopefully they come looking for us too. But
I think there's no denying that the West Coast has
a lot of the current talent and the uh you
know in Ai. But I think we're going to go everywhere.
Speaker 3 (38:15):
I get Ebrahimi, we're pleased that you came here along
with Wesley Shan. Great to have the co founders and
managing partners of FPV in the studio today.
Speaker 2 (38:23):
We appreciate it.
Speaker 3 (38:24):
Delivery shares over in the UK absolutely surging today, most
on record of eighteen percent, and this is after the
British delivery firm disclosed an acquisition offer from door Dash
which would value Delivery at three point six billion dollars
the megs Henry Wren has more. As we can see,
Delivery has currently been a phenomenal days trade up sixteen
(38:44):
percent is where it closed the market, but it's well
off the highs of where it used to trade. I
think it had a seven billion market cap at one point, Henry,
Why would we see DoorDash want to be buying in.
Speaker 15 (38:55):
Yes, So we really think that the deal, the offer
from Ordash is something that's long time in the making,
because according to press reports as early as twenty twenty two,
there have been already been interest from DoorDash to merge
with Delivery. Also, DoorDash have this international expansion ambition already
because in twenty twenty two it made a deal to
(39:17):
buy a finish food delivery company called Quote at that time,
so it has demonstrated its ambition to expand overseas. Also,
in twenty twenty four there was a change on deliver
Roue side because there was an expiry of a dual
class sheer structure at that time, so which means that
CEO and founder Will Shoe no longer held the dominant
(39:40):
voting power, which paved the way for consolidations or further
mergers down the road. So we think that actually it's
not very surprising and it's something a long time in
the making, long time in the making.
Speaker 3 (39:53):
Shares have bounced today, but not up to the highs
of the full extent of the offer. Henry, and I'm
interested as to whether there's any concern around the consolidation.
We're seeing any industry writ large right now because Process
Group has been making bids for other Delivery Hero for example.
Speaker 4 (40:09):
Yeah.
Speaker 2 (40:09):
Indeed, so.
Speaker 15 (40:11):
For European food delivery stocks, whether we're talking about just
Eat or deliver Ru or Delivery Hero, it's very clear
on their share price chot that there have been well
off their heights about three years ago. The reason is
pretty clear because those companies they even pumped huge investor
led cash at that time during the pandemic days.
Speaker 2 (40:32):
And order its numbers were high.
Speaker 15 (40:34):
But now as we come out of the pandemic, people
dine more into restaurants, so that peak is no longer
there and those companies have to pivot to profitability, and
that's why we're seeing low and lower growth. For example,
for deliver Ru, it's only reporting about seven percent.
Speaker 4 (40:51):
Order growth this quarter and.
Speaker 15 (40:53):
That's the exact reason why we're seeing more consolidations here.
You mentioned about the process offware for just Eat and
this deal that we're looking at as well. Because these
companies they need more competition, they need more deals to ease.
Speaker 2 (41:08):
Up the competition. I have to leave it there. We
thank you, Henry Rn. That does it for this addition
of blue Meg technology,
Bloomberg Audio Studios, podcasts, radio news from the heart of
where innovation, money and power collide in Silicon Valley and beyond.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2 (00:35):
Live from New York. This is Blueberg Technology Coming up.
Speaker 3 (00:38):
Four of the Magnificent Seven are set to report earnings
this week. The giants make up nearly twenty percent waiting
in the S and P five hundred.
Speaker 2 (00:45):
So what's priced in?
Speaker 4 (00:46):
Plus?
Speaker 3 (00:47):
IBM plans to invest one hundred and fifty billion dollars
in the US over the next five years with Quantumer
mainframes made in America.
Speaker 2 (00:54):
And we will be joined by the CEO of Palo
Alto Networks.
Speaker 3 (00:57):
He announces a new deal to leverage the AI security opportunity.
But first we have Meta Microsoft come Wednesday. We then
have Apple Amazon.
Speaker 2 (01:06):
What is priced in? Where have it? Investors in?
Speaker 3 (01:08):
Analysts already started to think about the pull forward for
their fiscal quarter they report because of Taris and what
of the macro economic environment going into the full year
earnings expectations. Ran Vastella can can dig in because Ryan,
what's so interesting about these numbers the fact that many
analysts just in the lack of clarity, haven't been really
able to downgrade their expectations.
Speaker 4 (01:30):
Yeah.
Speaker 5 (01:30):
Absolutely, we're starting to see this in some names, especially
for twenty twenty six, But for the moment, people are
sort of holding firm with their expectations. We really do
not know what to expect out of results this quarter.
We really do not know what any company is going
to say about really anything about the economic environment, about
their outlooks for the rest of the year. That makes
it extremely difficult for analysts to know how to sort of,
(01:52):
you know, peg their expectations their estimates, and in turn
that means that valuations right now are sort of up
in the air.
Speaker 2 (01:58):
We really do not know what fair value.
Speaker 5 (02:00):
Looks like because it is hard to evaluate these companies
on a price to earnings basis if there is so
much uncertainty about the earnings.
Speaker 3 (02:07):
I mean, look, we're looking currently at analysts being very
slow to cut profit estimates on the twelve month earnings
projections for a Meta for example. But Ryan Meta is
going to feel the effects of Chinese companies like Timu
like Shean no longer advertising with them. Potentially we're going
to see a downdraft there. And also they've got hardware
(02:27):
that they have to import from China. Are we going
to get any signal of what that does to the
bottom line?
Speaker 5 (02:33):
Yeah, I mean, I think these kinds of questions are
really what is paramount for investors right now. Obviously, these
companies have their own sort of individual impacts related to
tariffs and so forth. A company like Meta, which is
so heavily reliant on online advertising, it's not going to
be as direct for them as it will be for
a company like Apple, which is hardware based. So I mean,
obviously we're going to see different kinds of impacts, different
(02:54):
levels of impact. But I think overall, there's still so
much uncertainty about what the economy is going to look like,
not even a year from now, but even a few
quarters from now. We are a couple of months from now,
So again, any kind of clarity investors will get will
be certainly welcome, But it's hard to know how any
company can even be too confident about anything right now.
Speaker 3 (03:13):
Alphabet beat last week, and all of these stocks swored
the previous week as well. Raan Vas Fleastelica pushes us forward.
We thank you now President Trump's tarrorf announcements. They've roiled
Washington to Wall Street for nearly a month now. And
Chinese retail apps you just mentioned them, tea machine, they've
already started actually passing on the new import taxes onto
US consumers, onto you and me by hiking up prices. Now,
(03:35):
China bus far has denied having any trade talks for
the United States, though President Trump is still hopeful China
will make a deal eventually.
Speaker 6 (03:44):
They want to make it deal obviously right now they're
not doing business.
Speaker 7 (03:47):
Well, you know, people talk about going cold Turkey with
China and.
Speaker 2 (03:50):
Then they just forget about it.
Speaker 7 (03:53):
And we were losing hundreds of billions of dollars a
year with China.
Speaker 8 (03:57):
And now they're not doing any business with us, you know,
because not because of them, because of me.
Speaker 5 (04:04):
Because at one.
Speaker 4 (04:04):
Hundred and forty five percent, you can't do business.
Speaker 3 (04:07):
But something's gonna happen.
Speaker 4 (04:10):
That's gonna be possible.
Speaker 3 (04:12):
It begs Mike Shepherd standing by, and look, we all
still doing business with China. Many a consumer is still
buying from Timu and she In, but they're paying the
price for it.
Speaker 7 (04:21):
Well, you're right, kra and we are seeing now what
economists have been warning about for some time in relation
to the president's tariff policy, and that is that consumers
would bear the increased costs and economic pain of those
import levies. We are seeing that the prices are being
passed along now by Timu and by she In. At
she In, for instance, some goods, the prices have gone
(04:44):
up by as much as three hundred percent. And keep
in mind, Carra, it's not just here in the US
where the pain is being felt by consumers. The retaliatory
programs by some other trading partners, including Candidate, including China,
including the EU have increased costs and goods from the
US into those countries. And we saw Tesla over the
weekend urging consumers to try to tap the pre tariff
(05:08):
inventory before prices went up and before it became too
late to avoid those increases. So there is a ripple
effect and corollary effect, not just here in the US,
but elsewhere around the world.
Speaker 2 (05:19):
Cara, extraordinary reporting done.
Speaker 3 (05:22):
They just highlight you mentioned Tesla having to pass on costs.
Speaker 2 (05:25):
We've also got here.
Speaker 3 (05:26):
Import tariffs wearing on Tiamo's shopping cart. They look at
some of the most popular things that people buy on Team.
Apparently it's a fourteen and one power strip with a
surge protection and one touch control.
Speaker 2 (05:36):
Who knew that's the most popular item.
Speaker 3 (05:37):
But basically it's doubling in price because of tariffs MIC
And when we think of an Amazon, for example, Bloomberg
Intelligence thinks Amazon has about seventy percent of its products
were either offered by Amazon or third party sellers coming
from China.
Speaker 2 (05:51):
This is going to have a long term tail.
Speaker 7 (05:54):
This is going to have a long tail, and it's
not really just going to be sticker shot carro It's
going to be supply live shock potentially. We've heard from
a number of economists and experts out there, including the
chief economists that Apollo who one that we could be
seeing a COVID like shock. Remember this is a crucial
time of year. You and I were just trying to
get through the end of the school year, maybe for
(06:16):
our children, but we are all looking ahead. If you're
a retailer, you're thinking ahead to Christmas to back to school,
because now is when that inventory is actually planned, it's purchased,
and it's already shipped. It's usually in the water by
April to get here in time for back to school
and for the holidays.
Speaker 4 (06:36):
So there won't be a ripple effect.
Speaker 7 (06:38):
And we've already seen a drop in cargo shipments from
the world's second largest economy to the US in the
wake of these tariffs.
Speaker 4 (06:45):
So there is going to.
Speaker 7 (06:46):
Be a lot of pain felt along the supply chain.
It's not just going to be consumers at the end,
like you and me looking at prices in our Temu
shopping car, or even on the grocery store or other retailers.
Speaker 4 (07:00):
It's going to be in a lot of different places.
Speaker 3 (07:02):
And yet many hold out hopes for a deal. But
China pushing that once again that no negotiations are happening.
Speaker 7 (07:09):
Well, that's right, and Scott Besson is indicating that, hey,
you know, the ball is in China's court. We really
want talks to get underway. And the President indicated even
at the end of last week during a time when
Chinese officials were here in Washington for the World Bank
and IMF meetings, where maybe there was some contact between
the two sides, but it was informal and if it
(07:32):
even took place, And for the Chinese, they really want
something much higher level, they want something launched formally. They
would like to be speaking regularly with Scott Besson and
other officials of his port to be able to get
all of those key points for them, not just tariffs, remember,
but all the US export restrictions on advanced technology that
(07:53):
we've been talking about so much.
Speaker 3 (07:54):
Particularly in the semiconductor space. Mike Sheppard, thank you so
much for joining me while coming up. IBM to invest
one hundred and fifty billion dollars in the US over
the next five years. Why this is blue met technology.
(08:23):
IBM just raising its earlier gains as the market turns
a little bit lower. It just announced plans to invest
one hundred and fifty billion dollars in the United States
over the next five years. The latest company, of course,
that follows the likes of Apple or Eli Lilly pledging
to increase spending in the country following President Trump's election
and his teriff threats. Let's bring in brody Ford and
starting on IBM. It seems to be about made in
(08:45):
America the mainframe quantum compute. How much of an acceleration
in spending home in the US space is this?
Speaker 9 (08:53):
That is the big question. It's the one that is
so hard to answer looking at a lot of these announcements, right,
IBM says we're going to spend their billion in R
and D in the US. We look that they've reported
about thirty three billion in R and D over the
last five years. I believe most of that's in the US.
So it's hard to say is this an acceleration. Is
this them you know, putting a pretty bow and spending
(09:14):
they were going to do anyway? This is the big
question when we see these announcements from companies like Apple
or Nvidia. What's clear is that as tariffs hit, companies
feel a lot of pressure to say, hey, actually we
have capabilities in the US and upstate New York. We
can build your main frames too, And so I think
that's what we're seeing from IBM today.
Speaker 3 (09:36):
Alvin Krishna, the CEO, saying IBM remains the epicenter of
the world's most advanced computing and AI capabilities.
Speaker 2 (09:42):
Now I want to get to AI capabilities.
Speaker 3 (09:43):
Because I'm an interesting story you've been reporting on for
over in the UK. Nscale, which seems to be a
startup that is once again a Bitcoin minor turn compute offerer,
trying to raise money and they're talking about a deal
with bike Dugs.
Speaker 7 (09:58):
Yeah.
Speaker 9 (09:58):
Nscale is kind of like a or weave where they
are focused on building these AI specific data centers and
so they've been fundraised. They looking for a billion or
two in debt, telling everybody, hey, we are how we
have this deal with Byteedance for about assign the paper.
It's gonna be worth two billion dollars. We're gonna give
them all these great GPUs and Bye Dance told us
(10:19):
that's overstating things. We don't have that much business with them,
and so these situations are hard, right because GPUs are
a pretty geopolitically sensitive thing. Maybe byte Dance doesn't want
it out there. Maybe in scale is overstating things. I mean,
it's an interesting instance that shows us how much the
financing around AI data centers has become very interesting in
(10:41):
the last year.
Speaker 3 (10:42):
And of course they're rather home to in video chips.
Berdie Ford breaks that down. We thank you, and let's
talk more about in video chips and competition to them,
because over in China Huawei apparently the company is set
to test a new AI processor then it hopes can
rival those of Nvidia. Now it's all according to reports
on the Wall Street Journal in video trading, the as
you can see on the day now accelerating losses in
(11:02):
King talks about this about what's happening over at Intel.
But first Yan, what is the long term picture of
Huawei trying to help China become more self sufficient here?
Speaker 6 (11:12):
Yeah, I think what we have to do is because
it's very difficult to get a clear picture of what
is going on there and the capabilities of those chips,
what it is important to do is to take it
back to what Invidia has said, which is, look, if
we're not allowed to do business there, if we are
restricted from exporting chips to China, they will find a
way to do their own over time. It's just a
(11:33):
matter of time. And I think this report is another
example of efforts being made out there to do that.
Are they competitive with what Invidia can do? Probably not
at this point. Are they going to be wonderful? Are
they going to be good enough?
Speaker 10 (11:45):
Though?
Speaker 6 (11:46):
Is really the key question, And the answer is we'll see.
But they're probably another step on a path towards that.
Speaker 11 (11:52):
Well.
Speaker 3 (11:52):
In there's a more local competitor who hasn't been much
of a competitor to in video of late, and that's Intel.
Lit Bhutan written a great Tech Daily report really on
how is trying to nuance culture over an Intel.
Speaker 2 (12:06):
How has it gone down?
Speaker 6 (12:08):
Yeah, I mean he really didn't give any of the
concrete answers that Wall Street wanted in terms of when
are the new products going to arrive, when you're going
to have outside customers for your factories. What he did
focus on, and what he did give a very specifics on,
was like, Intel's culture is not in a good position,
and these are some of the shocking things that we're
seeing going on. Frankly, it was pretty brutal. That clearly
(12:31):
is something that he believes needs to be fixed. But
as we know, fixing a company culture and getting everybody
moving in the right direction is important, takes time, and
what is arguably more important is that you're getting them
moving in the right direction towards products, towards customer relationships
that will turn this company around.
Speaker 3 (12:49):
We have seen the response to the earnings in King
Tech in Depth, the newsletter out today.
Speaker 2 (12:55):
Go read it.
Speaker 3 (12:55):
Thanks so much. Now, as shakeup is underway for Apple's
AI and machine learning divisions, the company has begun to
break up would have been a pretty unified approach for more.
Speaker 2 (13:11):
Blue Meg's Mark German has more.
Speaker 3 (13:13):
You've been writing over the weekend about one particular executive
they lured away from Google in twenty eighteen, and now
he's getting some things pulled away from him.
Speaker 12 (13:21):
That's right. So here's the story with Apple. AI serie
launched in twenty eleven, and by twenty fifteen, twenty sixteen,
a little bit after that, they really fell behind Google.
Assistant came online. You had a lot of competitors, including
Alexa from Amazon, and it felt like Apple had squandered
a three four year lead. And at the time, Apple
(13:42):
felt that part of that is because the AI work
at Apple was scattered across the company, right They worked
in silos across different divisions, hardware, software services. So they
hired John gen Andrea, who was running AI in search
at Google at the time in twenty eighteen. They believe
putting everything in his group with skyrocket their approach to
AI and make them a true player in artificial intelligence
(14:05):
and machine learning.
Speaker 4 (14:06):
So far, it hasn't worked out.
Speaker 12 (14:07):
We saw how far they've fallen behind compared to Chad Shipt, Google.
Speaker 4 (14:11):
Gemini Copilot.
Speaker 12 (14:12):
So now what they're trying is breaking it up, going
back to their roots, going back to that Apple functional
organization and taking pieces of the AI group and re
scattering them around the company, and that started a few
weeks ago with Siri. They move Siri from their AI
division to their software engineering division, which makes sense to
some extent because Siri is well software. And now what
(14:33):
they're doing is they're taking the robotics division, which was
also in the AI organization, and moving that to hardware engineering.
Robotics that is a hardware play at heart, and so
it makes sense to put that in the hardware engineering division.
So we'll see how that works out. But to me
and to many people at Apple, it feels like they're
preparing for a world without a true AI chief, a
world where apples back to being completely functionally organized.
Speaker 3 (14:55):
And mark a world where they're about to report earnings
this week, they're trying to tackle China supply chain, move
it more to India. Just brace us for what we
expect on Thursday.
Speaker 12 (15:06):
I think that Apple this is going to be one
of the more interesting Apple earnings results presentations in a while,
not because of the numbers that they're going to share,
not because of the data they're going to be given
the prepared remarks, but because they have a lot more
questions they're going to have to answer than usual. Things
when it comes to AI, of course is going to
be big on the minds of analysts on the call,
(15:27):
but also tariffs, also dealing with the Trump administration, dealing
with innovation questions. So that's going to be really important
earnings TOOLL to listen to, not because of what they're
going to come out and say, but because of what
they're going to be asked and how they're going to respond.
So I'm actually very much looking forward to that, and
everyone should stay tuned for our coverage there.
Speaker 3 (15:45):
Well, we're excited for your reporting on it, Mark German.
We appreciate all things Apple. And now.
Speaker 2 (15:50):
Meanwhile, in other AI.
Speaker 3 (15:51):
News, enterprise AI platform Writer is launching a new adaptive
reasoning model that it says is cheaper faster than competing lllms.
It eaches a one million token context window to create
more comprehensive responses. Mayhabi write as CEO joins us for
now and tell me about the new model and what
makes it different.
Speaker 10 (16:11):
Oh hi Caroline, so good to see you. Well that's
the headline.
Speaker 13 (16:15):
Palmyra x five is out and it is the first
enterprise grade, enterprise ready model built for agentic AI.
Speaker 10 (16:24):
So you got it.
Speaker 13 (16:25):
This is an LM with performance on par with other
frontier models, but it's radically three x faster, and it's
four times cheaper, and as of today it's available on
AWS Bedrock.
Speaker 3 (16:38):
Okay, So tell us about how you get that sort
of cost efficiency. You're offering what sixty cents per one
million input tokens, you're doing six dollars per million output tokens.
How do you get to that price point?
Speaker 5 (16:49):
Way?
Speaker 13 (16:50):
So it's really important for folks to understand what's required
to get enterprise grade agentic AI. When we launched our
AI HQ a few weeks ago, we had one hundred
plus pre built agents built for the enterprise, and folks
were asking me, how are you getting this kind of
efficiency and accuracy with really complex workflows Agents at a Uber,
(17:15):
at a Franklin Templeton, things that were capable of taking
multiple systems, data from third party and internal research, and
able to generate really complex work We are able to
take that full million token prompt and process that context
window in twenty two seconds, firing off multi turn function
(17:39):
calls in three hundred milliseconds, all while getting this price efficiency.
Speaker 10 (17:44):
It is a.
Speaker 13 (17:45):
Combination of breakthrough both algorithmic and data we train this
model on about a million dollars of GPUs, so also
incredibly efficient on the training and we passed.
Speaker 2 (17:57):
How how is this occurring?
Speaker 9 (17:58):
Way?
Speaker 3 (17:59):
Is this the new deep seek trend that we're seeing
that you just do more and more with this. It's
more about turning to open source. I mean, how have
you managed to be so efficient?
Speaker 8 (18:08):
Yeah?
Speaker 10 (18:08):
I mean we deep seeked before deep seek.
Speaker 13 (18:10):
So this is a one hundred percent synthetic data based
approach which has the IP friendliness that the enterprise really requires. Algorithmically,
we are doing a very interesting set of techniques around
a hybrid attention mechanism, blending linear and other approaches, and
(18:31):
we're doing a mixture of experts set of techniques, so
we're only activating the most relevant subnetworks and resulting in
much lower latency, much more efficiency.
Speaker 3 (18:43):
Mate, you talked about some of the very well known
companies that you currently serve. But to get these sort
of investors and the vanguards of this world to be
coming on board, how are you making yourself known? I mean,
are you having to offer this sort of price efficiency?
Speaker 2 (18:57):
Is that how you arrives above the noise?
Speaker 3 (18:59):
Because it just feels like there are so many offerings,
enterprise suited offerings out.
Speaker 2 (19:03):
There right now.
Speaker 10 (19:04):
It's absolutely so noisy.
Speaker 13 (19:06):
But what we're seeing is folks who don't have results
are understanding that they can't build everything themselves. So in
addition to enterprise grade frontier lms, we've got an end
to end platform for building, activating, supervising these agents. And
that's how we stand out, Caroline. That entire package is
what results in the incredible roy Forster just reported three
(19:31):
hundred and thirty three percent ROY on implementing writer for
building and using agents and it's one of the highest
that they've ever seen. So you're right, right, it's incredibly
noisy for these enterprises, but CEOs are seeing that their
CEOs are demanding results. And I think this is AI's
COVID moment, and COVID, you know, you had this explosion
(19:55):
of collaboration tools because forks, folks had to do it.
And I think we're going into, you know, the kind
of economic uncertainty that just demands results and writers providing that.
Speaker 2 (20:06):
Okay, so really interesting.
Speaker 3 (20:07):
You think that in this potential downturn from a global
GDP perspective, people could be more drawn to your products,
not less.
Speaker 10 (20:15):
Oh one hundred percent.
Speaker 13 (20:16):
I mean, we're AI software that builds software, and we're
already seeing it in our customer base executives CEOs who say, look,
before you ask for more headcount, before you ask for
more software, I want to see that AI couldn't do
it better.
Speaker 3 (20:31):
So what about that for your opportunities as we get
more nervousness, more economic uncertainty. I know that prior to
all of this you were getting other tech startups coming
to you saying, look, I can't keep on doing this,
my expenses are too high. Would you mind buying me?
Are there still the M and A opportunities out there
for you?
Speaker 13 (20:48):
Right now, we're trying to grow organically as fast as possible, Caroline,
we can't keep up with the demand.
Speaker 10 (20:56):
I'm with you from our London office.
Speaker 13 (20:58):
We're almost one hundred people here, more than four hundred globally,
trying to be eight hundred globally as soon as possible.
Folks really need results, and you know they're coming to
us to be able to really bring AI, especially agen
kic AI to the business.
Speaker 3 (21:14):
Mahavieve, it's always great catching up with you. Thanks for
joining us in London.
Speaker 2 (21:25):
Pano Also our networks.
Speaker 3 (21:26):
Manages to fight the narrative of a downward.
Speaker 2 (21:28):
Draft in the markets. We're up a quarter percent.
Speaker 3 (21:30):
And look, we're seeing the cybersecurity Leader announced it's intent
to acquire protect AI is expanding the company's capabilities in
security basically combating new threats, I mean an explosion in
artificial intelligence. All of this as we get the CSRSA
conference underway, joining us now Nikesha or a power auto
network CEO, You've got a lot to announce new security platform,
(21:51):
but let's just go to.
Speaker 2 (21:53):
The new announcement. In terms of M and A.
Speaker 3 (21:55):
You're going to get us an amount that you paid.
I was hearing about up to six hundred and fifty
million dollars.
Speaker 4 (22:00):
We're not going to talk about what we paid. Caroline.
Nice to see you.
Speaker 8 (22:02):
Like we're again at a technology inflection point. We're all
talking about AI. You had people talking about AAI earlier.
And every time you have a technology inflection point, it
becomes very important that we are able to come forward
and provide solutions to our customers so they can securely
deploy technology. And in that context, we're very exertively and
aggressively working on both a build and buy strategy to
(22:25):
build perhaps what will be the most important thing over
the next few years, which is a platform that allows
you to deploy AI securely.
Speaker 3 (22:33):
Okay, so let's talk about build versus by and why
was this asset protect AI so necessary to go inorganic
at this moment?
Speaker 8 (22:40):
Well, kind of like if you look at what's going
on in AI you were on before, people talk about LMS,
people talking about deploying AI based applications, People trying to
figure out how to deploy infrastructure, whether it's on prem
or in the public cloud, with chips set to use,
which model to use. All these are very important technological
decisions which are going to underpin the platform forms of
the future. Now, when you put them together and you
(23:03):
deploy them, you have to make sure that you're looking
at the security aspect of every one of these things.
Protector AI, after an extensive look around the market, we
found was working on some very interesting topics which are
complementary to what we've been building. We've been building a
great run time platform to if we protect our customers
as the DEPLOYI. Protector I was working on something similar
(23:24):
where they're looking at all the model in the world,
scanning them to make sure there wasn't bad stuff lurking
in them. So the combination of the two, which we
will integrate into one platform, actually allows us to be
more comprehensive and we will offer our customers.
Speaker 3 (23:38):
I just want to get your birds eye perspective here
in a kesh, because no one can push us forward
as much as you can in many ways to the
future of agenic KI.
Speaker 2 (23:45):
And the fact that where are we to ultimately be
protecting ourselves.
Speaker 3 (23:48):
There's demand for traditional, basically farwall endpoint products of security.
How does that shift if you're going from a user
level to an agent level in this moment, that's going to.
Speaker 8 (24:00):
The buzzword for RSA Carol, and people are going to
talk a lot about how do.
Speaker 4 (24:04):
You make agents work? I think it's still unclear.
Speaker 8 (24:07):
There's a lot of innovation being put out in the market,
whether as the A to A model that an MCP
Model's all wonderful buzzwords.
Speaker 4 (24:14):
We create in our industry.
Speaker 8 (24:15):
But as Agendica I've said before to me, Agendici becomes
real when you start giving AI arms and legs, whether
robotic arms and robotic legs or real arms and legs
in terms of replacing human beings, and I think that's
where the question becomes, can I rely on AI to
accomplish the task without supervision? And that's where things will
(24:35):
get very interesting and very hairy in certain cases. There
it becomes important only to make sure that the agent
you're giving autonomy to is something that you're very comfortable
will act within the guardrails that you put out there
for that agent. And then you got to make sure
nobody can take over your agent and hijack it in
a way that can make them do things you don't
want them to do.
Speaker 4 (24:54):
So I think that's going to be the next.
Speaker 8 (24:55):
Frontier of cybersecurity as we get AI deployed in multiple places,
is how do we give autonomous control to these agents?
How do we give them agency effectively? And can't wait
for that world to happen, But it's going to be
a whole new sort of set of opportunities that are
open up for us.
Speaker 3 (25:12):
There are a lot of names trying to make the
most of this opportunity. A lot of them are the hyperscalers.
A lot of them in many ways become your competitors
as they add their own security offerings. Where do you
sit in this whole FRENEMI environment, Well, you know.
Speaker 4 (25:26):
As we fascinating Caroline.
Speaker 8 (25:28):
Logically, the cloud providers should have been our competitors and
cloud security. They should have our competitors and endpoints secure,
but they're not. They're focused on making sure technology gets
deployed as quickly as possible, which is good perhaps for
their business, not all of their customers. Our job is
to make sure that we stay in lockstep with them
and work with our customers to make sure they can
deploy technology in a secure fashion. Let's be fair if
(25:51):
our customers have comfort that when they deploy AI, when
they give autonomous control to AI to do some repetitive
tasks or interesting time, it can be done securely. The
moment we can provide the underpinning of trusts, the underprinting
of reliability, the fact that if you deploy with Pollo
Auto Networks, there is a very high probability that it's
going to be much safer than anything else.
Speaker 4 (26:12):
I think that's where the winning combination happens.
Speaker 8 (26:14):
So I don't see this as sort of a competitor
environment for now with the hyperscalers. I see it as
an opportunity for us to work together and make sure
we accelerate the adoption of the technology, as opposed to
have our customers be confused.
Speaker 4 (26:26):
Which way to go.
Speaker 3 (26:27):
I mean used to work out Google. You host your
products on Google Cloud. How do you feel about their
big splashy deal for wiz.
Speaker 4 (26:37):
It'll be interesting to watch.
Speaker 8 (26:39):
I have lots of conversations with people at Google about it,
and we don't intend to change how we deploy our products.
We buy infrastructure from them, and sometimes we see them
in the market.
Speaker 4 (26:48):
Our hope is that our.
Speaker 8 (26:49):
Customers will understand that you want an unbiased product that
can operate effectively on every cloud provider, as opposed to
something that is beholden to a particular cloud provider.
Speaker 4 (26:58):
We still need to solve for everybody else.
Speaker 8 (27:01):
Out there, so I think that's our sort of athos.
We want to be independent. We want to be somebody
that can deliver the same level and capability or security
across every platform there is out there, so our customers
don't have to spend time trying to integrate all this
stuff together, which is our entire philosophy around platformization.
Speaker 3 (27:19):
I love following what you're doing in terms of platform offerings, products,
what you're doing in terms of well the latest MNA,
but I also love following on social and perhaps whether
you wanted to or not, you involved in the AI
debate about whether we're going to get as much CAPEX spend,
whether infrastructure is reality versus hype.
Speaker 2 (27:36):
Where do you stand on it right now?
Speaker 3 (27:37):
Nikesh?
Speaker 8 (27:39):
I think if you look around you, everybody is getting
ready for a very large adoption of AI scenario because
you see tens of billions of dollars being committed by
people in terms of building infrastructure.
Speaker 4 (27:50):
I think that's right.
Speaker 8 (27:51):
I think we may get the sort of the timing
not perfect. You know, you may build too much before
it's all consumed.
Speaker 4 (27:58):
But I think it's headed in the direction. I think.
Speaker 8 (28:00):
Short term, in this twelve to twenty four month timeframe,
you could see that a lot of the investment that's
going is going towards innovation. I say, make a smarter model,
make robotics work.
Speaker 4 (28:10):
So you need a lot of power.
Speaker 8 (28:12):
You need a lot of compute to get to a
place where these models become extremely useful. Once you get
to a point where these models are extremely useful, the
question becomes how do I deploy them in my business?
How do I, as a regular company, regular customer, deploy
these things effectively securely. I think that could take a
little longer than people think because everybody's experimenting and we're
(28:33):
not all experts yet.
Speaker 4 (28:34):
Now this is something that came about.
Speaker 8 (28:36):
Less than twenty four months ago, so we all have
to get our muscle understand how this affects our business.
How do I build robotic things that can do stuff
for me around my enterprise? How do I build AI
agents that can do stuff for me?
Speaker 4 (28:47):
I'm a enterprise.
Speaker 8 (28:47):
Do I build or do I buy from somebody? So
all that stuff will take a little longer to pan out.
But when it happens, we're going to need all that
capacity that's being built, and unfortunately, you can't wait to
build capacity, you have to build it ahead of demands.
I think I think it's the right direction. Timing's still
to be figured out.
Speaker 3 (29:05):
Well, thanks for sharing your expertise across all the subjects
and the deal news aqusha Ura go enjoy RSA. We
thank you, Palo Alta Networks CEO. Now next up, talking
tech first stuff, I'm talking about UAE data center developer Kasna. Well,
it's planning a major expansion into Saudi Arabia.
Speaker 7 (29:22):
Now.
Speaker 2 (29:22):
The company is looking to take.
Speaker 3 (29:23):
Twenty five percent of the market share already identified two
locations for its data centers, directly competing with smaller local
and specialized firms, plus German defense startup Arx Robotics. Let's
raised thirty five million dollars in its latest VC funding round,
and it's the second time in the past year as
the company aims to expand in the United Kingdom. Aarx
Robotics declined to share this new valuation and alphabet after
(29:45):
its earning is now set to be offering about four
million dollars in US high grade corporate debt today.
Speaker 2 (29:50):
It's according to sources.
Speaker 3 (29:51):
The company is said to be looking to sell the
bonds in as many as four parts and could mark
the company's first bond sale. This is the way back
in twenty twenty are coming up. We'll talk to the
managing partners of FPV about finding product led AI startups
for their latest fund you will.
Speaker 2 (30:06):
There's some news out on Sony.
Speaker 3 (30:08):
Could they be spinning out their semiconductor part of the business.
The shares have actually risen on the back of the
news that as the company tries to get more focused.
Of course it's all about PlayStation and gaming, but they're
also trying to be selling off some of the assets
that don't mean quite so much to the core business anymore.
Semiconductor has been One of them is Bloombag Technology, EUIL
(30:35):
masks XAI. Well, it's in talks to raise roughly twenty
billion dollars in funding for its newly combined AI and
social media business. According to sources, the deal would value
the company in over one hundred and twenty billion dollars,
according to one of the people briefed on the matter. Now,
if completed, it will be the second largest startup funning
round of all time behind guess who Open ai And
they're forty billion dollar financing earlier this year, according to
(30:57):
data from Pitchbook. Now, we've got so much when it
comes to VC. And there's more fundraising news from a
fund perspective. The venture firm fpv's raised five hundred twenty
five million dollars to fund target product driven startups. Fpv's
co founders have back companies such as Canva and Flexport
and Peace to Welcome to the show, Pega Abraham and
Wesley Chan join us. Now, congratulations on the funding round.
Speaker 2 (31:18):
Now we're excited, So tell.
Speaker 3 (31:20):
Me Pega first and foremost, how hard how easy was
it to get the LP's excited in.
Speaker 2 (31:25):
This current environment.
Speaker 11 (31:26):
I mean, you know you have we last time around
we raised I think when we announced it was the
seventy five basis points that the FED just raised.
Speaker 2 (31:34):
So we're used to this.
Speaker 11 (31:35):
And our investors are back really long term founders and
that's what we're focused on. So it wasn't the environment stuff,
and we're privileged to have raised. But you know, we
had just exceptional bluetrip founders who are really investing for
the long term, so they're not as distracted by the
short term stuff.
Speaker 3 (31:51):
I mean, Wesley, we think about how much Canva, for example,
has managed to be an iconic company you found not
on the West coast of America on any US A tool,
but over in Australia.
Speaker 2 (32:01):
How do you find teams like that? How do you
replicate the success?
Speaker 14 (32:05):
Yes, so our founders are amazing product driven founders, right,
so they see other amazing product driven founders.
Speaker 2 (32:11):
That's the secret.
Speaker 14 (32:12):
Like I spent over fifteen years at Google, of which
ten of them I help build the ad system, launch
Google Analytics, I helped launch Google Voice, I help bring
Android and help them grow. Like It's one of those
things that when you've worked on these products that are hundreds,
if not billions of people use worldwide, you have a
reputation for building great products that founders gravitate towards. And
so I got the opportunity to meet the Canva founders
more than a decade ago. They were very excited about
(32:34):
some of the product work that I did. I help
them build and prioritize some of their features, and they said,
let's work together. And that's what I love doing, is
spending time with founders that want to build products that
change the world, that do better whether there's a recession
or not a recession, and that just stand the test
of time. And so that's what we do here at.
Speaker 3 (32:50):
FPV, and it's about kind of being the operators alongside them.
People come to your experience from Google, your experience from Cisco,
experience from August Stanley and the technology area there pego,
and I'm I'm interested as to what advice you're giving
to found us right now when none of us really
having any idea with a clarityism.
Speaker 11 (33:06):
No. Look, so one thing is clear, and everyone's like,
what's happening to the market, and one thing it's clear
it's gonna be whiplash. I mean, we're gonna have a
few years up, up and down. But we both started
out during the tech bubble burst, and I was CIO
at Morgan Stanley during the financial crisis. There's gonna you
can't go up to the right all the time. And
if you're really building for the wrong term, you shouldn't
get you have to go with the waves, but you
(33:28):
can't really be building for the next year or the
next two years. And for the founders that are really
looking for those ten year plus horizons, it's actually a
great time because you have to focus. You can't get
as much distraction, you don't have as much competition.
Speaker 2 (33:42):
Because not everyone can raise.
Speaker 11 (33:43):
So if you're a mission driven founder who's really focused
on really changing the future, this is actually a great
time to just say laser focus on those big missions.
And if you're not a mission driven founder, look, it's
gonna be hard. If you're depending on the hype and
the short term stuff. It might not the hype might
not last on certain things. And so that's what we say,
stay focus. If you have a really big vision and
(34:04):
you know, work with the times.
Speaker 3 (34:05):
I mean, you have been the anti hype apostles in
many ways just saying cut through that noise.
Speaker 2 (34:10):
But Wesley, a lot of LPs.
Speaker 3 (34:12):
At this moment thought there'd be a little bit of
hyper our exits around IPOs, but.
Speaker 2 (34:16):
That's not happening now.
Speaker 3 (34:18):
How are you helping your current your previous fund bets
be able to give liquidity to that talent.
Speaker 2 (34:25):
How are you helping them sort of march through this?
Speaker 4 (34:27):
Well.
Speaker 14 (34:28):
One of the wonderful things about the LPs we found
is that they're long term thinkers. Right like we have
blue chip lpiece, most of them are charitable endowments and
foundations that think, you know, decades, if not like fifty
years out into the future, and they know in investing us,
we're not placing the bet for today. We're doing it
for ten years in the future. That's the liquidity time
horizon for venture capital. So we're not worried about like
if things exit tomorrow, ORF things exit next year, obviously
(34:49):
our LPs would like it, but we worry about if
things are going to be big in ten years. Right,
they have the option to exit, but if they hold on,
the add more value and our LPs are okay with
it because there's such long term thinkers, and we have
deep pools of capital.
Speaker 10 (35:01):
We want to return.
Speaker 14 (35:02):
Money to them, but we want to do it at
the right time, and we want to do it when
things are great. And so the help the companies that
survived the recessions, the companies that survived the market turmoil,
whether it's tariffs or whether it's crazy world war or
whatever else, Like they are left and they are the winners,
and then they have these wonderful exits. Google in two
thousand and four was dot com crash, right, and then
like they exited and they became a big market winner.
Speaker 2 (35:24):
Yeah, And I worked on the IPO.
Speaker 11 (35:26):
It was like it reopened the market and everyone was
freaking out that it was never going to come back.
Speaker 2 (35:30):
And they reopened it.
Speaker 11 (35:31):
And then you got you know, several years later after
the financial crisis worked, they all the salesforce, all these guys.
So there was great companies built during these times. And
I think it takes longer to exit, But that's one
of the benefits we have. Like is it ten years,
is it twelve years? It doesn't matter for compounding companies. Obviously,
it's harder for zero growth.
Speaker 3 (35:49):
I mean, everyone thought, cool, you would reopen the market,
and that was a very udio idiosyncratic kind of a bet.
But then ultimately the market's moved away from them. What
reopens us next time? What are we currently seeing value
a crew too? That's the right thing to have, value
a crew too, peck of Look.
Speaker 11 (36:05):
I think when the market's open, I mean, I don't
know if I can predict the future, but I can
tell you market's like a bit of stability, So it
might not be for a bit if we're not having
if we're not kind of knowing what's happening. I think
now we have the tear of shock that will smooth out.
Then people that have been ready for a while will
start saying, okay, we're coming back back in maybe, but
(36:25):
I think nobody wants to go when the tides are like,
you know, going up and down at the same time.
But I think people will have to eventually it becomes normal.
Maybe this this whiplash is actually normalized, and then people
don't care.
Speaker 3 (36:37):
I mean, Wesley Lin, you're looking for ten yas time
you're looking at perhaps private market valuations be impacted slightly
by public markets, But what.
Speaker 2 (36:45):
Is the tenure bet? What is currently interesting?
Speaker 3 (36:48):
Now there's going to be incredibly interesting in Tenya's time
that people aren't thinking about.
Speaker 14 (36:52):
So we have a lot of healthcare AI bets, right,
and that sounds sort of crazy because a lot of
people are running away from healthcare in the last couple
of years. But we have companies that are really using
AI or using machine learning to figure out the next
generation of drugs. And then we have a company that
has figured out how to do clinical trials and half
the time and half the price using AI to find
better patients. And then they are taking drugs out the
market themselves because they have this cost of manage.
Speaker 9 (37:14):
These are massive tenure bets.
Speaker 14 (37:15):
The founders are amazing and mission driven, and they're able
to raise capital and hopefully they'll be around when everybody
else is getting washed away by the hurricane.
Speaker 2 (37:22):
I think the healthcare bit.
Speaker 11 (37:23):
And I would say also, you know, at the first
craze of AI, everyone gets excited about it feels like
not incremental tech, and I think they're really exciting stuff.
There's no it's kind of like the cloud times. If
you're building a company and you're not building on aws
like they're, you're like crazy, So of course you should
be using AI. But I think it's are you Are
you working on the big problems and are you working
(37:44):
on not the incremental things, but they're really big things
that just weren't possible. And that's the things that happen
with health, in biotech.
Speaker 2 (37:51):
And some of those things.
Speaker 11 (37:51):
It's just things that just weren't possible because now you
can do it.
Speaker 3 (37:54):
Pega, we go thirty seconds. Are they got to be
built in the West Coast? Are they going to be
built globally? Where are you going to find this us?
Speaker 11 (38:00):
I mean we're going to go everywhere wherever great founders
are and hopefully they come looking for us too. But
I think there's no denying that the West Coast has
a lot of the current talent and the uh you
know in Ai. But I think we're going to go everywhere.
Speaker 3 (38:15):
I get Ebrahimi, we're pleased that you came here along
with Wesley Shan. Great to have the co founders and
managing partners of FPV in the studio today.
Speaker 2 (38:23):
We appreciate it.
Speaker 3 (38:24):
Delivery shares over in the UK absolutely surging today, most
on record of eighteen percent, and this is after the
British delivery firm disclosed an acquisition offer from door Dash
which would value Delivery at three point six billion dollars
the megs Henry Wren has more. As we can see,
Delivery has currently been a phenomenal days trade up sixteen
(38:44):
percent is where it closed the market, but it's well
off the highs of where it used to trade. I
think it had a seven billion market cap at one point, Henry,
Why would we see DoorDash want to be buying in.
Speaker 15 (38:55):
Yes, So we really think that the deal, the offer
from Ordash is something that's long time in the making,
because according to press reports as early as twenty twenty two,
there have been already been interest from DoorDash to merge
with Delivery. Also, DoorDash have this international expansion ambition already
because in twenty twenty two it made a deal to
(39:17):
buy a finish food delivery company called Quote at that time,
so it has demonstrated its ambition to expand overseas. Also,
in twenty twenty four there was a change on deliver
Roue side because there was an expiry of a dual
class sheer structure at that time, so which means that
CEO and founder Will Shoe no longer held the dominant
(39:40):
voting power, which paved the way for consolidations or further
mergers down the road. So we think that actually it's
not very surprising and it's something a long time in
the making, long time in the making.
Speaker 3 (39:53):
Shares have bounced today, but not up to the highs
of the full extent of the offer. Henry, and I'm
interested as to whether there's any concern around the consolidation.
We're seeing any industry writ large right now because Process
Group has been making bids for other Delivery Hero for example.
Speaker 4 (40:09):
Yeah.
Speaker 2 (40:09):
Indeed, so.
Speaker 15 (40:11):
For European food delivery stocks, whether we're talking about just
Eat or deliver Ru or Delivery Hero, it's very clear
on their share price chot that there have been well
off their heights about three years ago. The reason is
pretty clear because those companies they even pumped huge investor
led cash at that time during the pandemic days.
Speaker 2 (40:32):
And order its numbers were high.
Speaker 15 (40:34):
But now as we come out of the pandemic, people
dine more into restaurants, so that peak is no longer
there and those companies have to pivot to profitability, and
that's why we're seeing low and lower growth. For example,
for deliver Ru, it's only reporting about seven percent.
Speaker 4 (40:51):
Order growth this quarter and.
Speaker 15 (40:53):
That's the exact reason why we're seeing more consolidations here.
You mentioned about the process offware for just Eat and
this deal that we're looking at as well. Because these
companies they need more competition, they need more deals to ease.
Speaker 2 (41:08):
Up the competition. I have to leave it there. We
thank you, Henry Rn. That does it for this addition
of blue Meg technology,
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