June 4, 2025 • 41 mins
Bloomberg’s Caroline Hyde and Ed Ludlow discuss footage and details from late 2023 when a Tesla using what the company calls Full Self-Driving (FSD) was in a fatal crash. Plus, GlobalFoundries CEO Tim Breen talks about his company’s plans to spend $16 billion to boost chip production in New York and Vermont. And HPE CEO Antonio Neri explains why the company has reduced how much it expects tariffs to impact earnings.
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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 (00:34):
Live from San Francisco. This is Bloomberg Technology Coming up.
President Trump says Chinese leader Shijingping is very tough to
make a deal with tech response to his late night
social media post.
Speaker 3 (00:45):
Plus Global Foundaries, the biggest US based provider of made
to order chips announces a plan to spend sixteen billion
to bolster domestic production.
Speaker 2 (00:54):
And Bloomberg makes public for the first time dashcam footage
and details from the late twenty twenty three when a
Tesla using FSD was in.
Speaker 4 (01:03):
A fatal crash.
Speaker 2 (01:04):
But first we check in on these markets and alternatively
higher Look, we've once again got.
Speaker 4 (01:09):
Bad news being good news.
Speaker 2 (01:11):
Slower services than expected in terms of economic data, slow
in jobs growth than expected means will the Federal Reserve
give some push to the economic perspective? Now's that one
hundred trades up, some three tens of percent ed Go
on a hood.
Speaker 4 (01:23):
What's moving this market?
Speaker 3 (01:23):
Yeah, we've got some big stories in the show today.
Let's start with one that's coming up very soon. Global
Foundaries up two percent. An accelerating and expanded investment in
the United States for cutting edge production capacity. Tesla is
down under pressure a big Bloomberg report making public for
the first time some dashcam footage of a crash in
(01:45):
twenty twenty three when a Tesla using FSD struck and
killed someone. We will get the details later. And then
HPE Hewlett Packard Enterprise up six tens percent, strong revenue growth.
Tariffs are an impact. And then here's the activist investor question.
We speak to the sea later in the.
Speaker 4 (02:00):
Hour, important conversation.
Speaker 2 (02:01):
But let's get back to what has been really the
focus of the market this morning. Was President Trump doubling
down on tensions with China. Like in a post on
truth Social overnight, the President called Chinese leader Shiji Ping very.
Speaker 4 (02:13):
Tough and extremely hard to make a deal with.
Speaker 2 (02:15):
For more in Moost, Katie land Lines is standing by Kaylee.
What is the impact on corporate America and indeed tech
America at that.
Speaker 5 (02:25):
Well, it's going to depend, frankly on how the President
and president she decided to move from here. As Trump
says that China is proving and she's specifically very tough
to deal with. It seems he's also proving tough to
get on the phone, as the White House has four
days now said that a phone conversation between Trump and
She will happen in the near future as they try
to sort out what both sides have accused each other
(02:45):
of as being violations of the trade agreement that was
just struck in Geneva that of course, brought tariffs down
from the incredibly high levels in exchange for some other
non tariff barriers being removed, at least in the US's mind,
China was set to start granting licenses once again for
exports of critical minerals and rare earths to US companies
that have been choked off from them. Knowing that China
(03:07):
has a choke hold on rare earth supply, they control
about seventy percent of that market, and those rare earths
are needed for a lot of national security purposes in
the US. Obviously advanced technology around things like fighter jets,
for example, or nuclear control rods. These are things that
the US and many US companies actually need access to
in order to do their production work. In the US
(03:29):
is saying that China is keeping them from getting those
materials not moving as quickly as the US desires. China,
on the other hand, is accusing the US of also
violating the agreement, as we have seen a further ratcheting
up of export controls in different areas, including around jet
parts but also chip design software for example. We continue
to see an expansion of the areas in which the
(03:49):
US is not allowing export into the Chinese markets, and
all of this raises the risk that if an agreement
cannot be made or kept to, that tariffs between these
two largest economies could go higher again, which obvious have
massive implications for companies that are reliant on Chinese imports
in order to make their goods.
Speaker 3 (04:07):
Bloomberg Balance of Power hosts Katie lyons, thank you very much.
Just days after leaving his position in government, Elon Musk
has been criticizing President Trump's signature legislation, his Big, Beautiful
Tax and Spending Bill, calling it a budget busting abomination.
The Tech Titans public condemnation pits him against the President
at a critical time, as Trump is personally lobbying holdouts
(04:30):
on that bill.
Speaker 2 (04:31):
Cara, Now, let's look at how the US government is
affecting American chip sector, which of course is something that
President Trump has been vocal about. Ed global founderies, it's
the biggest US based provider of May to order chips,
today announcing plans to invest sixteen billion dollars to expand
its chip manufacturing and advance packaging capabilities across facilities in
New York and in Vermont A. Please to welcome CEO
(04:53):
Tim Breen to the show. Tim, how much is this
a reaction to the geopolitical landscape and to Trump's desire
to bring manufacturing into the US.
Speaker 6 (05:02):
Yeah, well, thank you for having me. So it's really
a long term trend where we see the needs for
the technologies that we make here in the US just
growing significantly as semiconductors play a broader role in kind
of every aspect of our life, from the cars we drive,
the phones in our pockets, even satellites in space, and
the data centers we're building around the world. And that
role is growing, and obviously that needs to be met
by increased investment. And the US has an imbalance between
(05:25):
what is designed here and what is created here from
innovators like the ones mentioned in our announcement today, and
what is manufactured, and you know, GF is doing its
part to grow that capacity, and that's a long term
investment for us and part of a long term trend.
Speaker 2 (05:38):
And there had been long term signals that you were
making this investment. I think it was a late last
year you talked about the thirteen billion dollars over the
next ten years.
Speaker 4 (05:44):
So how much of this is net new?
Speaker 2 (05:47):
Is that three billion dollars in terms of R and
D the real new bit hit tim.
Speaker 6 (05:51):
Yeah, So we're building on our existing plans, and those
plans are already underway. So this is a great chance
for us to go faster, go bigger, and also bring
more innovation. And I think especially the the changes we're
seeing with the role of AI, both in the cloud,
in the edge, and all of the connectivity in between,
just means we need to be ready for the demand
that's coming our way. And so yes, it's more building
on those investments we've already started.
Speaker 3 (06:12):
I've studied your capital expenditures and basically you average about
one point four billion dollars every year. So I go
back to Caroline's question the sixteen billion dollars, what's new
in it? What is the composition of that funding and
where does the funding come from.
Speaker 6 (06:27):
Yeah, so we have a clear plan to fund this
over the coming years, and I think you know, obviously,
our CAPEX investments are based on customer demand, and so
we'll be able to accelerate those as that demand materializes.
And we're seeing that renewed interest in US based manufacturing
from you know, many of these companies we've talked about,
and so we'll be able to modulate our CAPEX investments
to match the demand.
Speaker 7 (06:46):
And obviously that's what we try to do as a company.
Speaker 3 (06:50):
Qualcom is is a pretty high digits customer for you,
right and when the news broke within minutes there's an
email in my inbox and a quote from Christy them
on it's interesting because you are listing many partners and
customers as beneficiaries of this initiative. Which customers are you
going to prioritize and why?
Speaker 6 (07:13):
You know, we have a number of great companies that
have supported this announcement and then you know, in many
cases they've been our partners for you know, decades in
some cases, and so quotcom is a great example of
a company that's always prioritized global sourcing, having optionality and
definitely producing here in the US and it's a true
anchor for US in our US factories, especially in New York,
and so I think we're going to be continuing to
work with all of these customers to meet their requirements,
(07:35):
and those requirements are changing, right. They're bringing new technologies
to market, they're penetrating new markets on their own. Quo
become a great example of penetrating new industries like automotive,
which is again a strength for US, and so very
happy to support more of that right here in the US.
Speaker 2 (07:48):
It's more expensive to do things here in the US.
How much are costs slightly to go up? How much
more can you charge by bringing your manufacturing here?
Speaker 6 (07:58):
Well, manufacturing scale matter, and that's why for US, building
on existing factories that have already been up and running
with good yields, with high quality makes it more efficient.
And so when you've learned how to do it now,
for in the New York case, over a decade and
even longer in Vermont, you know how to do it
at a better cost structure, and obviously investing more gives
you that scale advantage. But the other advantage for customers
(08:19):
is that they have flexibility, They have optionality in where
they manufacture and so they can do one design and
have it made all over the world for their requirements
they have for different markets, including here in the US.
So actually we think this for them actually represents a
cost saving over the long haul.
Speaker 3 (08:33):
Tim. There's also reports out of Germany this morning that
you are investing there. What's the latest with that.
Speaker 6 (08:39):
Yeah, So today's announcement is very much focused on our
US plans and it's clearly the area we see the
biggest mismatch between supply and demand, and so we'll be
a large part of our investment plan going forward. We
have a great facility in Germany and dress then we'll
continue to upgrade that and expand it over time.
Speaker 7 (08:54):
Nothing like the.
Speaker 6 (08:55):
Scale we see in the US in terms of new
investments in the short haul, but again a great opportunity
to get meet board our European customers need out of
that facility.
Speaker 2 (09:04):
Tim, Do you need more from the government in terms
of funding. You got money from the Chipsack late last year,
and of course that's been in many ways talked down
by the current administration. Do you need more funding from
the government or is this the way to do things?
With capital partnerships and indeed with capital expenditure from yourself.
Speaker 6 (09:23):
Yeah, I think all of these investments always need to
be done in partnership. We're really grateful for the support
of this administration. They've been impeccable partners. They understand our
business and where we're going. We get great support from
them in various different forms, and not just for building
the supply, but also encouraging the demand to come back
on shore.
Speaker 7 (09:40):
And I think that's a super helpful partnership for us. Obviously,
we can't do this without our customers.
Speaker 6 (09:44):
That's the reason we exist, and so them being a
part of the story and bringing back that demand to
the US is also an essential part of underrunning these investments.
Speaker 7 (09:51):
And so look, it's all about partnership.
Speaker 8 (09:53):
Tim.
Speaker 3 (09:54):
What's Apple's role in this and how are you going
to be working with them differently as part of this expansion.
Speaker 8 (10:00):
Yeah.
Speaker 6 (10:00):
I think Apple's been very clear that for them, there's
a huge amount of semiconductor content that goes in all
of the incredible devices they bring to market. And you know,
if you took your iPhone out of your pocket and
opened it up, you'd find an incredible array of different.
Speaker 7 (10:11):
Technologies in there.
Speaker 6 (10:12):
Many of them are technologies that you have produces and
some here in the US and some will bring back
to the US as we go forward, And so yeah,
they're obviously very keen to see more domestic manufacturing.
Speaker 7 (10:21):
And the fact we have such a long standing partnership means.
Speaker 6 (10:23):
We know each other well, we know what we do
well together, and they're keen for us to do more,
as they've indicated.
Speaker 3 (10:29):
Global foundary Seeo Timbering. Great to have you on Bloomberg Technology.
Thank you very much. Now coming up, federal regulators are
investigating whether it's Tesla's full self driving system is dangerous
after a fatal crash involving the technology in late twenty
twenty three. This is Bloomberg Technology a z Elon Must's
(10:59):
house driver robo taxis in Austin. Federal regulators are investigating
whether the system it calls full self driving is dangerous
even with a human behind the wheel. That's after a
fatal crash in November twenty twenty three involving a driver
using the system. Bloomberg is publishing images and partial footage
of that crash for the first time, which had warned
(11:21):
the audience the content you're about to see, which Bloomberg
News obtained via a public records request may be disturbing
to some viewers. A Tesla Model Y with full self
(11:43):
driving engaged round the curve at highway speed. The sun
was low, the visibility was poor. The car didn't stop.
Moments later, the Tesla using FSD hit seventy two year
old Jonah Story, who is standing helping direct traffic at
the scene of an earlier crash outside of Phoenix. She
(12:05):
was pronounced dead at the scene. Bloombergs Crey Trudell, who
broke the story with Donahle, joins us now for today's
Bloomberg Big Take. And I think the most important question,
the question that we are getting most is why is
it important that we release the details of a crash
that happened in November of twenty twenty three.
Speaker 9 (12:23):
Great, Yeah, there's a lot of pushback on that, you know,
for the obvious reasons of yeah, it's now June twenty
twenty four, right, and yet what makes the twenty five
very significant excuse me, twenty twenty five. What makes us
crash very significant for Tesla is the fact that this
(12:45):
is something that led to a federal investigation. This investigation
is ongoing, and this speaks to the sort of complexities
of the way that the US has approached regulating this technology.
Speaker 8 (12:58):
Right.
Speaker 9 (12:58):
I think when you listen to you on Must talk
about his driverless ambitions, he talks about, you know, regulatory
approval and sort of gives this impression that there are
these hurdles that that Tesla needs to clear as long
as you're making your cars with things like steering wheels
and you know, other components that sort of quote unquote
(13:20):
normal car has. You can put a car on the
road today and and say we think this is ready
to be driverless. NITSA doesn't have to say, you know,
safe or unsafe, thumbs up or thumbs down. And you
know what they what they are doing is picking up
on crashes that are reported like this one, picking out
(13:40):
patterns in them. In this case, this crash along with
some others. Uh, you know, there were consistencies in terms
of conditions that the system seems to have trouble dealing with.
And NISA is saying, look, we need to investigate this
and whether or not your system is safe in these conditions,
and that is a risk for investor and obviously you know,
(14:01):
worthy of reporting, you know, putting aside the fact that
you know This is a tragic situation, and you know,
forty thousand people you know, die on us roads every year.
Much as that's a worthy ambition to try and change that.
If you're Tesla, you know, it's rare that we look
at those desks as closely as we have the opportunity to.
Speaker 3 (14:23):
Here.
Speaker 2 (14:25):
It's emotional for seventy one year old Jonas Story's family,
it is for Carl Stock as well, who is the
Tesla driver. Craig push us forward though on the technology
front here though, because there are key differences between for example,
Lida with Waimo and what Tesla has been using and
is in any way an interpretation is the technology and
(14:45):
how it reacts to low sun and certain of those
themes that you're seeing among these crashes.
Speaker 9 (14:51):
Yeah, that's a really key aspect of this story because
you know, Elon Musk has has sort of taken this
view that all Tesla needs is cameras, that it doesn't
need more expensive radar and even more expensive light our sensors,
and he's kind of out on a limb in this regard.
Weimo has a very different approach. They, of course, you know,
(15:12):
offer a system that does not have to be supervised,
whereas full self driving to this point needs to be
to be supervised by a human. And WEIMO because it's
offering that level of capability and taking that approach of
we want to put cars on the road without anybody
behind the wheel. They have a much more robust, much
(15:33):
more expensive sensor set. And I think, you know, part
of the sort of question here is, you know, is
is there sort of a safety shortcoming if you're relying
on on these cameras, especially in conditions like this one.
You can see from the video footage that it's quite hard,
you know, to see what's ahead from from the cameras
(15:56):
on the front of this model y and you really
don't see the the pedestrian who was tragically killed until
the very last moment.
Speaker 4 (16:05):
Pray Trudell, phenomenal reporting. We thank you for bringing it
to us.
Speaker 3 (16:11):
Epic Games twenty twenty five edition of its Unreal Fest
conference just kicked off yesterday in Orlando. The game developers
showed off the tech behind the witcher for This Was Everywhere,
and also showed off some of its AI created tools.
Bloomberg caught up with CEO Tim Sweeney for an upcoming
episode of the Circuit with Emily Chang. He weighed in
on a competition in the AI space and also Apple strategy.
Speaker 10 (16:34):
Well AI is interesting because the Google's Android operating system
is open to third party AI assistants, and we're seeing
some really roverse competition. There is perplexity, and others provide solutions.
Apple so far has been closed. Not only are they
like stifling other companies from producing AIS after their works
as in Reed and to iOS as here he does,
(16:56):
but they're failing to deliver their own AI and that's
very unfortunate. I think iOS is an area where the
entire ecosystem, an entire platform should be opened up to
third party competition. Apple should get out of the way
and that awesome developers make Arson software and then let
the best win.
Speaker 4 (17:12):
Now, let's talk about the wellness industry.
Speaker 2 (17:14):
It's forecast to hit nine trillion dollars by twenty twenty
eight according to a study from Global Wellness Institute. But today,
a leading software provider for businesses in that sector have
announced a major rebrand to bring three companies Mind, Body
Booker class Pass under a new parent brand called playlist Player.
CEO Fritz Lamon joins us us Now and Fritz why
(17:35):
do this? What is it that you're going to be
able to do in terms of efficiency here when you're
bringing these three names in a closer alignment.
Speaker 8 (17:43):
Well, you teed me up beautifully there.
Speaker 11 (17:45):
You know, we have built three highly successful different brands.
Class Pass which gives people a way to book fitness
spas and salons and even food and beverage take out
increasingly Booker, which is vertical SaaS that's powering businesses that
run spa salons or appointments. And then mind Body, whose
bread and butter is giving you know, kind of the
operating system to the wellness industry or mostly studio fitness owners,
(18:09):
but also PT and others serving up wellness. And so
it didn't make sense for us to have a brand
that was just one of our three successful businesses. And
really we wanted to sort of say, hey, look, we
are now building a common platform of AI tools, an
app partner, ecosystem, consumer distribution that can let us go
(18:32):
serve experiences businesses. So yes, wellness businesses and the fitness
and beauty and spons long world as we already do,
but our aspiration, we believe we've earned the right to
go even bigger and to build software for anybody delivering
great experiences in their town, and to give consumers apps
that help them discover and book this stuff and really
(18:53):
give them a playlist for their life if you will.
Speaker 4 (18:56):
So, how much bigger does it get?
Speaker 2 (18:57):
You're already forty thousand salons of SPA seventy three thousand
and gyms and workout places and across thirty countries.
Speaker 4 (19:03):
How much does this enlarge your total addressable market?
Speaker 11 (19:07):
I mean again, you team me up beautifully there. The
wellness economy is massive right in the US. It's over
two trillion dollars, and so I think we'd be fine.
You know, our investors would would have a great outcome
hopefully if we continue to execute within the wellness vertical.
But the fact that we built these our scale has
allowed us to build this industry leading AI stuff, this
(19:28):
consumer aggregation, so we can help these businesses get more
reach and distribution and not have to pay social media companies,
you know, crazy ad rates to get users. The fact
that we have big, big partnerships ecosystems so you can
take advantage of premium tools that are built into our software.
Speaker 8 (19:44):
You know, we want to go much bigger.
Speaker 11 (19:46):
And you know there's twenty million small businesses in the US,
and you know, only only a sliver of those are wellness,
so we think it substantially increases our addressable market.
Speaker 3 (19:56):
Fritz, what's the total active user base of the combined
and see how many people now will be on that platform.
Speaker 11 (20:04):
I can't speak to the specifics on even though you know,
sharing metrics and financials my favorite topic.
Speaker 8 (20:10):
The powers that.
Speaker 11 (20:10):
Be have have have prevented me from sharing any any
any specific details. But you know, we're we're reaching tens
of millions of consumers in the US, We're operating in
thirty one countries across multiple verticals, and we want to
get an order of magnitude bigger in terms of our
impact and our reach.
Speaker 3 (20:28):
IPO get the name out there.
Speaker 8 (20:31):
You know, we can't really comment on our plans.
Speaker 11 (20:34):
We have investors who are super long term focused and
right now we're in a position where we don't need
to raise capital and so you know, we'll keep an
eye on the markets and see how they evolve and
see where the world takes us. Right now, we're just
focused on how can we touch as many businesses and
help them achieve their potential as we can?
Speaker 8 (20:51):
How many how can we help as many.
Speaker 11 (20:53):
Consumers get out of their screens and truly kind of
build the anti tech tech company where instead of manipulating
you and and damaging your mental health, we're trying to
get you off your screens and into your city having
rewarding experiences.
Speaker 8 (21:05):
So that's our focus for now.
Speaker 3 (21:07):
Fritz Lemon, CEO of Playlists, thank you very much for
joining us.
Speaker 2 (21:19):
Welcome back to Bluemerg Technology. I'm Caroline Hyde in San
Francisco today with.
Speaker 3 (21:22):
You Ed, and I am Ed Ludlow. It's great to
be back together. Markets are moving on geopolitical headlines and
other things. Take it away.
Speaker 2 (21:32):
Yeah, and actually we're sort of trading tentatively higher on
the NASNAT boar broadly. But I want to get into
a couple of names right here, right now, because Apple
actually managing to shake off what is yet another down crade,
this one coming from Laura Martin over at Needham putting
it to a hold. We now got twenty holds on
Apple and we're actually racking up a few cell ratings.
Speaker 4 (21:50):
Up four teen percent.
Speaker 2 (21:50):
The issue here for needom is once again the lack
of AI spontaneity and grasp of generative AI within the
overall offering and indeed therefore slowing of a sales.
Speaker 4 (21:59):
Cycle potential with the next round of phones.
Speaker 2 (22:01):
So we're up four tenths of percent there cloud strike
actually coming off of our lows, we're still down four percent.
At one point we were down by some seven percent
pre market. This is as numbers actually met exceeded expectations
for their fiscal first quarter, but not good enough when
it comes to perhaps where we're seeing ARR this compared
to this time last year, the net new ARR hasn't
recovered from, of course, what was a massive wipeout blackout
(22:25):
that CrowdStrike caused in July of twenty twenty four.
Speaker 3 (22:28):
Head, okay, let's go to another on the top stories.
Salesforce's agreement by Informatica for eight billion dollars came a
year after initial talks collapsed, but then the acquisition target
lost a third of its market value. The result, according
to Salesforce executives and people close to the negotiations, is
evidence of the software giants more disciplined approach to deal
(22:50):
making and it's patients. Bloombergs Leanna Baker leads the deal's team.
This is just like a classic Bloomberg Tech story. This
is what happened behind the scenes. Two things, Salesforce learning
the value of patients, and then you know, the two
people at the helm with those companies probably paid a
big role.
Speaker 12 (23:09):
If you look at where Salesforce stock has been since
the Informatica deal was announced, it's not doing too well.
It's actually down more than what Informatica is worth. So
Mark Benioff here is sort of defending the deal to
Wall Street, and Salesforce is using words like discipline and
patients to show that they're a different acquirer than they
were just a few years ago when they bought Slack,
(23:31):
when you know later they came under in the crosshairs
of activists in vesters. So they're trying to show that
they're a different sort of m and a acquirer now
still a serial one, but maybe not paying as much
as they would have even a year ago when they
first started talks with Informatica, and the need.
Speaker 2 (23:48):
For Informatica became ever more necessary in a way, as
Jenner to Ai just became the focal point for Salesforce
of Mark Benioff. But how did they therefore keep the
conversation alive? How did they show this discipline over the
twelve months.
Speaker 12 (24:01):
So we reported in the story that the CEOs stayed
in touch. As you know, when two companies come together,
it's kind of like a marriage, it takes a while
to get comfortable. And we also know that there was
interest in Informatica, not just from Salesforce. We reported that
Cloud Software Group, a big privately held private equity back company,
(24:22):
was also interested in. Mark Benioff did say we were
lucky to get this company because it does seem like
it was a competitive auction. Goldman Sachs was working with Informatica,
JPMorgan was working with Salesforce, and it just took a
long time to come together, but it did accelerate ahead.
Speaker 3 (24:38):
Of our scoop.
Speaker 12 (24:39):
They had a handshake agreement before we reported it a
few weeks ago.
Speaker 2 (24:43):
Yeah, Milbyding, I've forgot that handshake with them. We thank you,
Leanna Baker. It's been great reporting throughout. Let's discuss it
further with someone who has a lot of focus on
that particular deal and others. Brand Ruda is co managing partner,
and Coco Pemira, which is an investor in Informatica, And
what's so interesting, Ryan is perhaps you say that a
dollar back today is worth more than a dollar back perhaps.
Speaker 4 (25:05):
A year ago.
Speaker 2 (25:06):
How has liquidity changed, how's this deal making changed?
Speaker 13 (25:11):
Yeah, I mean the probably Thanks Carolyn ed good to
see you guys.
Speaker 14 (25:14):
The environment for private equity has been really tough in
terms of getting liquidity back to investors. You've had extending
investment horizons for a lot of businesses. That's usually actually
good news in the case of like an informatica, which
we've been invested in for a decade at this point,
kind of leading to this transaction, but it's been very
hard to get liquidity. And actually this kind of liquidity
to our investors is particularly valuable because it's coming from
(25:35):
a strategic it's an all cast transaction. It's not private
equity to private equity, which from an LP's perspective is fine,
but also it tends to be left pocket right pocket.
They might actually be an investor in that private equity
fund that's buying from the private equity fund.
Speaker 13 (25:48):
That they're an investor in as well.
Speaker 14 (25:50):
So this is particularly precious DPI, as we say, distribution
to paid ins like real liquidity relative to the value
of what's in the fund. So We're very proud, very
happy with this transaction at this particular point in time especially,
and so.
Speaker 2 (26:01):
How repeatable is that, how many strategic buyers are out
there with the guts the determination to keep following these
sorts of processes.
Speaker 13 (26:09):
We think strategic activity.
Speaker 14 (26:11):
Certainly, the interest that we're seeing is very high in
the kinds of businesses that we back, and i'd say
for our investment philosophy, it's really strong.
Speaker 3 (26:18):
You know.
Speaker 13 (26:19):
Informatica is one of these great stories.
Speaker 14 (26:20):
Of really product led growth that we try to back
for long periods of time. And that's what actually strategic
buyers want. They're not trying to buy in EBITDA optimized
gutted private equity portfolio. What they want is really well
invested product sets. And so if you have businesses that
are doing that, like we do with our technology portfolio,
it generates a lot of strategic interest. So we expect
(26:40):
that it's certainly very active today in terms of dialogue,
and we expect that's going to continue.
Speaker 3 (26:46):
I was really looking forward to this conversation because of
the private equity lens rather than what is more common
on the show, which is venture back deals. But what
they have in common, right, is the exit environment and
what types of exits are on the horizon. D S
D sales full Symformatica as a sort of starting gun
and signal of more activity to come in different formats,
(27:08):
particularly thinking about this administration and the regulatory environment that
would allow something like that to happen.
Speaker 14 (27:13):
Yeah, I mean we think what a lot of the strategic,
big strategic buyers that we see are looking at is
actually generally pretty appreciated currencies in their own stock price,
a lot of liquidity, and then the need and the
excitement to really get their story together for the emerging
and kind of really accelerating AI landscape, and informatic is
(27:34):
exactly that. So you want to find businesses that are
going to help, you know, codify kind of what you're
going to be able to do in that AI world,
and Informatica is like right in the middle. So for
those like you, if you have assets that kind of
bolts of that story. And there's like so many companies
that are out there in the private ecosystem today, you know,
it's a bit of a smorgas board.
Speaker 3 (27:52):
Is twenty five dollars a share, good like it's great
for us.
Speaker 14 (27:55):
Yeah, I mean this has been a it's more than
six billion dollars to our investors.
Speaker 13 (28:00):
Wow, it's a.
Speaker 14 (28:01):
Very very significant, large, multiple billion dollar gain.
Speaker 3 (28:05):
I asked that because of the reporting right that you know,
one year on from their initial talks, a big fact
was the downward pressure on the stock that allowed them
to proceed. And I don't know how you view it.
You might say, well, what might have been at thirty
dollars or thirty five I don't know.
Speaker 14 (28:20):
Yeah, I mean there's a lot of volatility in the
world today. You see you kind of everywhere. What we'd
focus on is like the point what matters to us
is the point to point over ten years, not over
twelve months, and over that period of time.
Speaker 8 (28:31):
I mean.
Speaker 13 (28:31):
The really cool thing about Informatica.
Speaker 14 (28:32):
And there's a lot in there, is that the products
that salesforce is buying with this company are overwhelmingly products
that we created with the management team host the going
private in twenty fifteen, So the cloud business was really
zero at the time we invested in them. We saw
a team that we really fu could build a next
generation cloud data management platform that's guiding the company's guiding
(28:54):
into more than a billion of ARAR this year from
a starting point of zero, not a lot of private
equity back to software businesses can say that they've done that.
So from that kind of point to point level, like
we're thrilled, our investors are very happy with the transaction,
and look, it's a very good home.
Speaker 13 (29:07):
I think Salesforce will get a lot out of Informertica.
Speaker 2 (29:09):
I know the way you said, there's a lot of
volatility in the globe right now because you're a global
footprint kind of pee in fact, for ED and I
we think about your European chops because that's the place
that we come from.
Speaker 4 (29:20):
I'm interested as to how therefore the landscape differs. We
talk about us exceptionalism. Is that where the deal is
going to happen. Is it global in nature?
Speaker 14 (29:28):
Well, we think, I mean a side effect or kind
of a very direct consequence of what's going on in
the world today and particularly in this country, is that
the commitment that we see in Western Europe about investing
in Europe is very high. It's about the highest that
I've seen it in my investing career.
Speaker 8 (29:44):
And so.
Speaker 14 (29:46):
That's going to have like really interesting benefits to the
economies there, to the innovation pace, and frankly it's overdue.
I mean, look at all the hyperscalers based in the US.
We are looking more at bringing the best of Silicon
Valley into Europe. As we've always and there's never been
a better time in our view to have a very
deep European origination network to be able to invest behind
(30:07):
where a lot of that innovation is going to come.
Speaker 2 (30:09):
We were just showing actually some newsletter coming out of
our European colleagues, Mark Bergen, who's writing about how this
glimmer of hope is on the returns that are yet
to be born in Europe for the VC community, for
the P community.
Speaker 4 (30:21):
What needs to get done here in terms of actually
starting to see IPOs.
Speaker 2 (30:26):
For darlings like Revolute or actual exits. Is it going
to be actually your kind of companies that help foster.
Speaker 4 (30:32):
The M and A side of things.
Speaker 14 (30:34):
Yeah, we'd be very like we're here in Europe and
we think the capital base that we've got to be
able to invest in the businesses that are really growing
and really building the next generation of innovators and disruptors
in Europe, that's a very fine thing to be. There
will be plenty of capital now from US and folks
who look like us in the private markets and the
piper up markets really do need to come around again
(30:55):
in Europe and kind of open the way that they
are opening in the US pretty successfully now as well.
But there will be we think, with what we have
like plenty of private capital will be able to pick
up those companies at the same time.
Speaker 3 (31:06):
Brian Ruder, Permira, co managing partner CO ce a great
feel together here in San Francisco, Thank you very much.
Speaker 8 (31:11):
So.
Speaker 3 (31:11):
Coming up, the CEO of HPE Antonia and Nary Joins
US discussed the company's earnings and what it expects to
see a reduced impact from tariffs US. Next, this is
Bloomberg Technology.
Speaker 2 (31:33):
Yet more announcements of investment in the US by big
data center players. This one Amazon coming out saying they're
going to be investing ten million dollars in North Carolina.
At the moment, it's expanding its AI infrastructure, creating we
understand about five hundred new high school jobs. What's interesting though,
ed here is the commitment to reskilling the training, the
education programs, the fact that they want to be really
(31:54):
bringing about more engineers in particular. That is what a
lot of people have been worried about this move to generator.
AI moved to manufacturing, whereas the skill base his Amazon
committing ten billion dollars a lot of AI hardware and infrastructure,
but with that some support for skills as well.
Speaker 12 (32:08):
Ed.
Speaker 3 (32:09):
Yes, we're thinking about where their data centers are on
the East coast and southeast coast particular of this country.
Speaker 1 (32:14):
Okay.
Speaker 3 (32:15):
HPE says tariffs will have a smaller than expected impact
on sales this year. AI revenue also beat and assessmates,
but the company continues to face headwinds, and that includes
an activist investor. HPE CEO Anthony Andery joins us. Now,
I find what you said about tariffs and how that's
reflected in the numbers so interesting because the hyperscalers, for example,
(32:39):
told us that one reason capital expenditures were raised in
that period is the reflection of the higher cost of
doing business because of tariffs. For you, it's like almost
the opposite story.
Speaker 15 (32:53):
Yeah, good morning, Ed, thanks for having me. Look, we'll
raise our guide thence for a number of factors. Number one,
because of all the work we have done throughout a
very diversified supply chain, we find ways to mitigate the
tariffs obviously the USMCA plays a role in that. But
(33:13):
at the same time, we know we are performing better
in many of our businesses and we have had a
number of targeted actions to continue to mitigate any impact
from the tariff.
Speaker 8 (33:24):
And that's us today as we know it.
Speaker 15 (33:26):
But the reality is that the original impact we communicated
at the earnest call in Q one now is significant lesser,
and therefore, together with the cost actions, together with the
better performance of the business and the lesser impact on tariff,
we raise the bottom range of our guide by eight cents.
Speaker 3 (33:45):
And Sony, is it possible for you to quantify for
us the sort of sales channel impact that you provide
from video? So we talk endlessly about all of the
projects domestic and overseas, and videos involved in the great buildout.
It's you know so well, and I spend hours tearing
servers apart. Nothing happens without HPE and others assembling the designs.
(34:08):
I just want a number on it, that's the thing.
Speaker 8 (34:12):
Yeah, Well, hard.
Speaker 15 (34:13):
To put a numbered because you know, many of these
buildouts are happening as we speak, and it takes a
little bit of time to go from an agreement with
a customer working with US and Nvidia to building a
deploying it and then eventually put it in production. But
I can tell you, look, we are have a deep,
(34:35):
long standing relationship with Nvidia. We are covering all segments
of the market where it's these big large buildouts in
the service provider space, whether it's.
Speaker 8 (34:45):
Sovereign or enterprise.
Speaker 15 (34:46):
And one of the things I'm really proud is that
the work we put together with Nvidia LA last year
when we announced the Nvidia competing by HP and a
private cloud, AI is growing very rapidly. In fact, one
third of the new orders we booked in Q and
Q two were from enterprise. But at the same time,
we are completing one of the largest deployments on the
(35:08):
GB two hundred as we speak, and that's a very
large deployment.
Speaker 13 (35:14):
And then we said.
Speaker 15 (35:15):
That our backlog grew quarter over quarter now is three
point two billion dollars on a commulative basis.
Speaker 8 (35:22):
For the last two.
Speaker 15 (35:23):
Years, we booked over nine billion dollars and we have
a multiples of the backlog in our pipeline.
Speaker 2 (35:30):
That one billion attributed to AI in particular is good,
but it's not as much as Dell, for example. I
hate to put it so on the nose in that way, Antonio,
But how much is perhaps Elliott on your board or
others around you sort of saying, look, capitalize on AI
even more.
Speaker 15 (35:47):
Yeah, now there has nothing to do. Look, the previous
quore that we book ourselves a very large order, which
is the one we are deploying today, and that was
not the all didn't do that. So this is a
lumping business and you will see us also talking about
some of the large orders as we may get in
the current quarter of subsequent quarter. So you know this
(36:09):
goes back and forth. But ultimately you have to play
with discipline and our goal is to grow in the
eye and the rest of the business with a capital
structure that works because the reality is that there is
revenue growth, then there is profit accretion, and then is
working capital. And the working capital is something you have
to watch very very closely because the timing from winning
(36:34):
a deal to the time of revenue recognition in these
large deals can be long and therefore you impact cash
flow from operation. So we're trying to balance all of
that while we delivering our commitments from the revenue growth
and on the EPs.
Speaker 2 (36:47):
Growth, well, you delivered in terms of six percent revenue
growth on the quarter. We appreciate it, Antonio andry Hpeco
for joining us.
Speaker 3 (36:56):
The enterprise gets a lot of attention when it comes
to AI option, but consumer technology is poised to be
upended by AI as well. At least that's according to
today's VC Spotlight guests. Ambudetski, a partner at Nea and
Nan joins us now on set San Francisco. I mean, like,
you know, chat GPT is the easiest example, the lowest
hanging fruit. You know, the user base is all of
(37:18):
us going on our iOS based app saying oh sorry
or thank your police. Could I ask this question? Crashing
the GPUs? But I think that's kind of what you're
looking for in your thesis, right, the next version of that.
Speaker 16 (37:29):
Well, thank you so much for having me on. And
you're exactly right. We're at the beginning of an incredible
new consumer AI renaissance if you think about it, We're
now in the third subwave of the AI super cycle.
Twenty twenty three gave us large language models, twenty twenty
four gave us multimodel the ability to generate voice video images,
and twenty twenty five is now the year of agentic
(37:51):
capabilities and applications. Incredibly exciting time to build the new
generation of consumer category creating companies. If we look back
companies like Uber, Spotify, Netflix, we cannot imagine living without
these consumer products today, and we're at the beginning of
a new wave of consumer applications today.
Speaker 3 (38:11):
I don't know about carry, but I feel like the
stories we're covering this domain a largely early stage companies.
They are moving so fast.
Speaker 16 (38:18):
Yes, we are early, but what's really exciting right now
is how quickly consumers are adopting AI tools AI applications.
The stats are absolutely remarkable. We're seeing faster consumer adoption
than any of their prior tech waves. If you look
at it today, eighty percent of consumers already use zero
click search AI search for over forty percent of their searches.
(38:41):
And gen Z, which is always the tip of the
sphere for new consumer products, ninety three percent of gen
Z knowledge workers are using two or more AI tools
every single day. So consumers are experimenting, They're hungry for
new tools, and they want more.
Speaker 4 (38:55):
Who isn't adopting fast enough?
Speaker 2 (38:58):
I mean, is there Sometimes there's a handring element that maybe.
Speaker 4 (39:00):
This agenda divide as well. Is that something a seatbone
out and someone will take to research.
Speaker 16 (39:05):
Yeah, we're starting to see more research reports and consumer adoption.
One of the interesting disparities is that if you look
at mainstream US consumers, only twenty seven percent of US
consumers are using AI tools regularly versus let's say seventy
nine percent among AI experts, really the people who are
building and working in Silicon Valley today. So there's an
(39:26):
interesting trust and awareness gap that still exists, and that
creates the perfect opportunity for consumer product companies to come
along MA CAI useful, MAKEI really relevant in people's everyday lives.
You know, they may not even know it's AI behind
the scenes. They're just going to be incredible new consumer products,
and they have to be trusted brands. Trust is a
really important element in building consume AA products.
Speaker 2 (39:48):
I mean, Apple is a trusted brand and it seems
to be being really slow and it's getting and it's
getting stooled in China. My regulate it is how much
do you need the juggnal of Apple and indeed Google
and Android to push through generative A on I day
and then you get more eleven labs twelve labs companies
that you'll you're backing to build into.
Speaker 16 (40:05):
That well, I think those companies are incredible distribution partners
and their investment in the AI ecosystem, the infrastructure, the GPUs,
the model capabilities is really important. But ultimately startups are
always the best position to take risks, to innovate, create
magical new products that people love, and I think it's
incumbent on these large players to find the right partners
(40:28):
in the startup ecosystem really quick.
Speaker 3 (40:30):
I wanted to get your reaction to Johnny I've io
and open AI because the bigger picture question is is
there a world beyond the smartphone interaction or PC interaction
in form factors When you look for a company they're
developing for I don't even know what.
Speaker 16 (40:46):
Well, so far we have not needed a new device
for hundreds of millions of consumers right to try these
new AI tools. But the interesting thing is, I think
the desire for an AI native and many companies have it.
Not just OPENINGI is also a signal that we want
a more open ecosystem, one where developers can freely build
(41:09):
AI native applications that connect to our devices. So will
there be new AI native devices whether it's eyewear or
you know something on your lapel that that didn't work. Yeah,
well we'll see them very very soon.
Speaker 2 (41:22):
And it's great to have you here, great to have
her in the studio and Petski partner at Nea. All
things consume AI. Well, that does it for this edition
of Bloombag Technology, though ed. But we've got some big
conversations have today.
Speaker 3 (41:34):
Yeah, tune in tonight as the Tech Summit kicks off
in San Francisco, first with a conversation with Alphabet CEO
cinderpitch Ie, and we'll be on the road tomorrow for
a special edition of Bloomberg Technology Live from the Summit.
Don't forget the podcast from San Francisco. This is Bloomberg Technology.
Bloomberg Audio Studios, podcasts, radio news from the heart of
where innovation, money and power collide in Silicon Valley and beyond.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2 (00:34):
Live from San Francisco. This is Bloomberg Technology Coming up.
President Trump says Chinese leader Shijingping is very tough to
make a deal with tech response to his late night
social media post.
Speaker 3 (00:45):
Plus Global Foundaries, the biggest US based provider of made
to order chips announces a plan to spend sixteen billion
to bolster domestic production.
Speaker 2 (00:54):
And Bloomberg makes public for the first time dashcam footage
and details from the late twenty twenty three when a
Tesla using FSD was in.
Speaker 4 (01:03):
A fatal crash.
Speaker 2 (01:04):
But first we check in on these markets and alternatively
higher Look, we've once again got.
Speaker 4 (01:09):
Bad news being good news.
Speaker 2 (01:11):
Slower services than expected in terms of economic data, slow
in jobs growth than expected means will the Federal Reserve
give some push to the economic perspective? Now's that one
hundred trades up, some three tens of percent ed Go
on a hood.
Speaker 4 (01:23):
What's moving this market?
Speaker 3 (01:23):
Yeah, we've got some big stories in the show today.
Let's start with one that's coming up very soon. Global
Foundaries up two percent. An accelerating and expanded investment in
the United States for cutting edge production capacity. Tesla is
down under pressure a big Bloomberg report making public for
the first time some dashcam footage of a crash in
(01:45):
twenty twenty three when a Tesla using FSD struck and
killed someone. We will get the details later. And then
HPE Hewlett Packard Enterprise up six tens percent, strong revenue growth.
Tariffs are an impact. And then here's the activist investor question.
We speak to the sea later in the.
Speaker 4 (02:00):
Hour, important conversation.
Speaker 2 (02:01):
But let's get back to what has been really the
focus of the market this morning. Was President Trump doubling
down on tensions with China. Like in a post on
truth Social overnight, the President called Chinese leader Shiji Ping very.
Speaker 4 (02:13):
Tough and extremely hard to make a deal with.
Speaker 2 (02:15):
For more in Moost, Katie land Lines is standing by Kaylee.
What is the impact on corporate America and indeed tech
America at that.
Speaker 5 (02:25):
Well, it's going to depend, frankly on how the President
and president she decided to move from here. As Trump
says that China is proving and she's specifically very tough
to deal with. It seems he's also proving tough to
get on the phone, as the White House has four
days now said that a phone conversation between Trump and
She will happen in the near future as they try
to sort out what both sides have accused each other
(02:45):
of as being violations of the trade agreement that was
just struck in Geneva that of course, brought tariffs down
from the incredibly high levels in exchange for some other
non tariff barriers being removed, at least in the US's mind,
China was set to start granting licenses once again for
exports of critical minerals and rare earths to US companies
that have been choked off from them. Knowing that China
(03:07):
has a choke hold on rare earth supply, they control
about seventy percent of that market, and those rare earths
are needed for a lot of national security purposes in
the US. Obviously advanced technology around things like fighter jets,
for example, or nuclear control rods. These are things that
the US and many US companies actually need access to
in order to do their production work. In the US
(03:29):
is saying that China is keeping them from getting those
materials not moving as quickly as the US desires. China,
on the other hand, is accusing the US of also
violating the agreement, as we have seen a further ratcheting
up of export controls in different areas, including around jet
parts but also chip design software for example. We continue
to see an expansion of the areas in which the
(03:49):
US is not allowing export into the Chinese markets, and
all of this raises the risk that if an agreement
cannot be made or kept to, that tariffs between these
two largest economies could go higher again, which obvious have
massive implications for companies that are reliant on Chinese imports
in order to make their goods.
Speaker 3 (04:07):
Bloomberg Balance of Power hosts Katie lyons, thank you very much.
Just days after leaving his position in government, Elon Musk
has been criticizing President Trump's signature legislation, his Big, Beautiful
Tax and Spending Bill, calling it a budget busting abomination.
The Tech Titans public condemnation pits him against the President
at a critical time, as Trump is personally lobbying holdouts
(04:30):
on that bill.
Speaker 2 (04:31):
Cara, Now, let's look at how the US government is
affecting American chip sector, which of course is something that
President Trump has been vocal about. Ed global founderies, it's
the biggest US based provider of May to order chips,
today announcing plans to invest sixteen billion dollars to expand
its chip manufacturing and advance packaging capabilities across facilities in
New York and in Vermont A. Please to welcome CEO
(04:53):
Tim Breen to the show. Tim, how much is this
a reaction to the geopolitical landscape and to Trump's desire
to bring manufacturing into the US.
Speaker 6 (05:02):
Yeah, well, thank you for having me. So it's really
a long term trend where we see the needs for
the technologies that we make here in the US just
growing significantly as semiconductors play a broader role in kind
of every aspect of our life, from the cars we drive,
the phones in our pockets, even satellites in space, and
the data centers we're building around the world. And that
role is growing, and obviously that needs to be met
by increased investment. And the US has an imbalance between
(05:25):
what is designed here and what is created here from
innovators like the ones mentioned in our announcement today, and
what is manufactured, and you know, GF is doing its
part to grow that capacity, and that's a long term
investment for us and part of a long term trend.
Speaker 2 (05:38):
And there had been long term signals that you were
making this investment. I think it was a late last
year you talked about the thirteen billion dollars over the
next ten years.
Speaker 4 (05:44):
So how much of this is net new?
Speaker 2 (05:47):
Is that three billion dollars in terms of R and
D the real new bit hit tim.
Speaker 6 (05:51):
Yeah, So we're building on our existing plans, and those
plans are already underway. So this is a great chance
for us to go faster, go bigger, and also bring
more innovation. And I think especially the the changes we're
seeing with the role of AI, both in the cloud,
in the edge, and all of the connectivity in between,
just means we need to be ready for the demand
that's coming our way. And so yes, it's more building
on those investments we've already started.
Speaker 3 (06:12):
I've studied your capital expenditures and basically you average about
one point four billion dollars every year. So I go
back to Caroline's question the sixteen billion dollars, what's new
in it? What is the composition of that funding and
where does the funding come from.
Speaker 6 (06:27):
Yeah, so we have a clear plan to fund this
over the coming years, and I think you know, obviously,
our CAPEX investments are based on customer demand, and so
we'll be able to accelerate those as that demand materializes.
And we're seeing that renewed interest in US based manufacturing
from you know, many of these companies we've talked about,
and so we'll be able to modulate our CAPEX investments
to match the demand.
Speaker 7 (06:46):
And obviously that's what we try to do as a company.
Speaker 3 (06:50):
Qualcom is is a pretty high digits customer for you,
right and when the news broke within minutes there's an
email in my inbox and a quote from Christy them
on it's interesting because you are listing many partners and
customers as beneficiaries of this initiative. Which customers are you
going to prioritize and why?
Speaker 6 (07:13):
You know, we have a number of great companies that
have supported this announcement and then you know, in many
cases they've been our partners for you know, decades in
some cases, and so quotcom is a great example of
a company that's always prioritized global sourcing, having optionality and
definitely producing here in the US and it's a true
anchor for US in our US factories, especially in New York,
and so I think we're going to be continuing to
work with all of these customers to meet their requirements,
(07:35):
and those requirements are changing, right. They're bringing new technologies
to market, they're penetrating new markets on their own. Quo
become a great example of penetrating new industries like automotive,
which is again a strength for US, and so very
happy to support more of that right here in the US.
Speaker 2 (07:48):
It's more expensive to do things here in the US.
How much are costs slightly to go up? How much
more can you charge by bringing your manufacturing here?
Speaker 6 (07:58):
Well, manufacturing scale matter, and that's why for US, building
on existing factories that have already been up and running
with good yields, with high quality makes it more efficient.
And so when you've learned how to do it now,
for in the New York case, over a decade and
even longer in Vermont, you know how to do it
at a better cost structure, and obviously investing more gives
you that scale advantage. But the other advantage for customers
(08:19):
is that they have flexibility, They have optionality in where
they manufacture and so they can do one design and
have it made all over the world for their requirements
they have for different markets, including here in the US.
So actually we think this for them actually represents a
cost saving over the long haul.
Speaker 3 (08:33):
Tim. There's also reports out of Germany this morning that
you are investing there. What's the latest with that.
Speaker 6 (08:39):
Yeah, So today's announcement is very much focused on our
US plans and it's clearly the area we see the
biggest mismatch between supply and demand, and so we'll be
a large part of our investment plan going forward. We
have a great facility in Germany and dress then we'll
continue to upgrade that and expand it over time.
Speaker 7 (08:54):
Nothing like the.
Speaker 6 (08:55):
Scale we see in the US in terms of new
investments in the short haul, but again a great opportunity
to get meet board our European customers need out of
that facility.
Speaker 2 (09:04):
Tim, Do you need more from the government in terms
of funding. You got money from the Chipsack late last year,
and of course that's been in many ways talked down
by the current administration. Do you need more funding from
the government or is this the way to do things?
With capital partnerships and indeed with capital expenditure from yourself.
Speaker 6 (09:23):
Yeah, I think all of these investments always need to
be done in partnership. We're really grateful for the support
of this administration. They've been impeccable partners. They understand our
business and where we're going. We get great support from
them in various different forms, and not just for building
the supply, but also encouraging the demand to come back
on shore.
Speaker 7 (09:40):
And I think that's a super helpful partnership for us. Obviously,
we can't do this without our customers.
Speaker 6 (09:44):
That's the reason we exist, and so them being a
part of the story and bringing back that demand to
the US is also an essential part of underrunning these investments.
Speaker 7 (09:51):
And so look, it's all about partnership.
Speaker 8 (09:53):
Tim.
Speaker 3 (09:54):
What's Apple's role in this and how are you going
to be working with them differently as part of this expansion.
Speaker 8 (10:00):
Yeah.
Speaker 6 (10:00):
I think Apple's been very clear that for them, there's
a huge amount of semiconductor content that goes in all
of the incredible devices they bring to market. And you know,
if you took your iPhone out of your pocket and
opened it up, you'd find an incredible array of different.
Speaker 7 (10:11):
Technologies in there.
Speaker 6 (10:12):
Many of them are technologies that you have produces and
some here in the US and some will bring back
to the US as we go forward, And so yeah,
they're obviously very keen to see more domestic manufacturing.
Speaker 7 (10:21):
And the fact we have such a long standing partnership means.
Speaker 6 (10:23):
We know each other well, we know what we do
well together, and they're keen for us to do more,
as they've indicated.
Speaker 3 (10:29):
Global foundary Seeo Timbering. Great to have you on Bloomberg Technology.
Thank you very much. Now coming up, federal regulators are
investigating whether it's Tesla's full self driving system is dangerous
after a fatal crash involving the technology in late twenty
twenty three. This is Bloomberg Technology a z Elon Must's
(10:59):
house driver robo taxis in Austin. Federal regulators are investigating
whether the system it calls full self driving is dangerous
even with a human behind the wheel. That's after a
fatal crash in November twenty twenty three involving a driver
using the system. Bloomberg is publishing images and partial footage
of that crash for the first time, which had warned
(11:21):
the audience the content you're about to see, which Bloomberg
News obtained via a public records request may be disturbing
to some viewers. A Tesla Model Y with full self
(11:43):
driving engaged round the curve at highway speed. The sun
was low, the visibility was poor. The car didn't stop.
Moments later, the Tesla using FSD hit seventy two year
old Jonah Story, who is standing helping direct traffic at
the scene of an earlier crash outside of Phoenix. She
(12:05):
was pronounced dead at the scene. Bloombergs Crey Trudell, who
broke the story with Donahle, joins us now for today's
Bloomberg Big Take. And I think the most important question,
the question that we are getting most is why is
it important that we release the details of a crash
that happened in November of twenty twenty three.
Speaker 9 (12:23):
Great, Yeah, there's a lot of pushback on that, you know,
for the obvious reasons of yeah, it's now June twenty
twenty four, right, and yet what makes the twenty five
very significant excuse me, twenty twenty five. What makes us
crash very significant for Tesla is the fact that this
(12:45):
is something that led to a federal investigation. This investigation
is ongoing, and this speaks to the sort of complexities
of the way that the US has approached regulating this technology.
Speaker 8 (12:58):
Right.
Speaker 9 (12:58):
I think when you listen to you on Must talk
about his driverless ambitions, he talks about, you know, regulatory
approval and sort of gives this impression that there are
these hurdles that that Tesla needs to clear as long
as you're making your cars with things like steering wheels
and you know, other components that sort of quote unquote
(13:20):
normal car has. You can put a car on the
road today and and say we think this is ready
to be driverless. NITSA doesn't have to say, you know,
safe or unsafe, thumbs up or thumbs down. And you
know what they what they are doing is picking up
on crashes that are reported like this one, picking out
(13:40):
patterns in them. In this case, this crash along with
some others. Uh, you know, there were consistencies in terms
of conditions that the system seems to have trouble dealing with.
And NISA is saying, look, we need to investigate this
and whether or not your system is safe in these conditions,
and that is a risk for investor and obviously you know,
(14:01):
worthy of reporting, you know, putting aside the fact that
you know This is a tragic situation, and you know,
forty thousand people you know, die on us roads every year.
Much as that's a worthy ambition to try and change that.
If you're Tesla, you know, it's rare that we look
at those desks as closely as we have the opportunity to.
Speaker 3 (14:23):
Here.
Speaker 2 (14:25):
It's emotional for seventy one year old Jonas Story's family,
it is for Carl Stock as well, who is the
Tesla driver. Craig push us forward though on the technology
front here though, because there are key differences between for example,
Lida with Waimo and what Tesla has been using and
is in any way an interpretation is the technology and
(14:45):
how it reacts to low sun and certain of those
themes that you're seeing among these crashes.
Speaker 9 (14:51):
Yeah, that's a really key aspect of this story because
you know, Elon Musk has has sort of taken this
view that all Tesla needs is cameras, that it doesn't
need more expensive radar and even more expensive light our sensors,
and he's kind of out on a limb in this regard.
Weimo has a very different approach. They, of course, you know,
(15:12):
offer a system that does not have to be supervised,
whereas full self driving to this point needs to be
to be supervised by a human. And WEIMO because it's
offering that level of capability and taking that approach of
we want to put cars on the road without anybody
behind the wheel. They have a much more robust, much
(15:33):
more expensive sensor set. And I think, you know, part
of the sort of question here is, you know, is
is there sort of a safety shortcoming if you're relying
on on these cameras, especially in conditions like this one.
You can see from the video footage that it's quite hard,
you know, to see what's ahead from from the cameras
(15:56):
on the front of this model y and you really
don't see the the pedestrian who was tragically killed until
the very last moment.
Speaker 4 (16:05):
Pray Trudell, phenomenal reporting. We thank you for bringing it
to us.
Speaker 3 (16:11):
Epic Games twenty twenty five edition of its Unreal Fest
conference just kicked off yesterday in Orlando. The game developers
showed off the tech behind the witcher for This Was Everywhere,
and also showed off some of its AI created tools.
Bloomberg caught up with CEO Tim Sweeney for an upcoming
episode of the Circuit with Emily Chang. He weighed in
on a competition in the AI space and also Apple strategy.
Speaker 10 (16:34):
Well AI is interesting because the Google's Android operating system
is open to third party AI assistants, and we're seeing
some really roverse competition. There is perplexity, and others provide solutions.
Apple so far has been closed. Not only are they
like stifling other companies from producing AIS after their works
as in Reed and to iOS as here he does,
(16:56):
but they're failing to deliver their own AI and that's
very unfortunate. I think iOS is an area where the
entire ecosystem, an entire platform should be opened up to
third party competition. Apple should get out of the way
and that awesome developers make Arson software and then let
the best win.
Speaker 4 (17:12):
Now, let's talk about the wellness industry.
Speaker 2 (17:14):
It's forecast to hit nine trillion dollars by twenty twenty
eight according to a study from Global Wellness Institute. But today,
a leading software provider for businesses in that sector have
announced a major rebrand to bring three companies Mind, Body
Booker class Pass under a new parent brand called playlist Player.
CEO Fritz Lamon joins us us Now and Fritz why
(17:35):
do this? What is it that you're going to be
able to do in terms of efficiency here when you're
bringing these three names in a closer alignment.
Speaker 8 (17:43):
Well, you teed me up beautifully there.
Speaker 11 (17:45):
You know, we have built three highly successful different brands.
Class Pass which gives people a way to book fitness
spas and salons and even food and beverage take out
increasingly Booker, which is vertical SaaS that's powering businesses that
run spa salons or appointments. And then mind Body, whose
bread and butter is giving you know, kind of the
operating system to the wellness industry or mostly studio fitness owners,
(18:09):
but also PT and others serving up wellness. And so
it didn't make sense for us to have a brand
that was just one of our three successful businesses. And
really we wanted to sort of say, hey, look, we
are now building a common platform of AI tools, an
app partner, ecosystem, consumer distribution that can let us go
(18:32):
serve experiences businesses. So yes, wellness businesses and the fitness
and beauty and spons long world as we already do,
but our aspiration, we believe we've earned the right to
go even bigger and to build software for anybody delivering
great experiences in their town, and to give consumers apps
that help them discover and book this stuff and really
(18:53):
give them a playlist for their life if you will.
Speaker 4 (18:56):
So, how much bigger does it get?
Speaker 2 (18:57):
You're already forty thousand salons of SPA seventy three thousand
and gyms and workout places and across thirty countries.
Speaker 4 (19:03):
How much does this enlarge your total addressable market?
Speaker 11 (19:07):
I mean again, you team me up beautifully there. The
wellness economy is massive right in the US. It's over
two trillion dollars, and so I think we'd be fine.
You know, our investors would would have a great outcome
hopefully if we continue to execute within the wellness vertical.
But the fact that we built these our scale has
allowed us to build this industry leading AI stuff, this
(19:28):
consumer aggregation, so we can help these businesses get more
reach and distribution and not have to pay social media companies,
you know, crazy ad rates to get users. The fact
that we have big, big partnerships ecosystems so you can
take advantage of premium tools that are built into our software.
Speaker 8 (19:44):
You know, we want to go much bigger.
Speaker 11 (19:46):
And you know there's twenty million small businesses in the US,
and you know, only only a sliver of those are wellness,
so we think it substantially increases our addressable market.
Speaker 3 (19:56):
Fritz, what's the total active user base of the combined
and see how many people now will be on that platform.
Speaker 11 (20:04):
I can't speak to the specifics on even though you know,
sharing metrics and financials my favorite topic.
Speaker 8 (20:10):
The powers that.
Speaker 11 (20:10):
Be have have have prevented me from sharing any any
any specific details. But you know, we're we're reaching tens
of millions of consumers in the US, We're operating in
thirty one countries across multiple verticals, and we want to
get an order of magnitude bigger in terms of our
impact and our reach.
Speaker 3 (20:28):
IPO get the name out there.
Speaker 8 (20:31):
You know, we can't really comment on our plans.
Speaker 11 (20:34):
We have investors who are super long term focused and
right now we're in a position where we don't need
to raise capital and so you know, we'll keep an
eye on the markets and see how they evolve and
see where the world takes us. Right now, we're just
focused on how can we touch as many businesses and
help them achieve their potential as we can?
Speaker 8 (20:51):
How many how can we help as many.
Speaker 11 (20:53):
Consumers get out of their screens and truly kind of
build the anti tech tech company where instead of manipulating
you and and damaging your mental health, we're trying to
get you off your screens and into your city having
rewarding experiences.
Speaker 8 (21:05):
So that's our focus for now.
Speaker 3 (21:07):
Fritz Lemon, CEO of Playlists, thank you very much for
joining us.
Speaker 2 (21:19):
Welcome back to Bluemerg Technology. I'm Caroline Hyde in San
Francisco today with.
Speaker 3 (21:22):
You Ed, and I am Ed Ludlow. It's great to
be back together. Markets are moving on geopolitical headlines and
other things. Take it away.
Speaker 2 (21:32):
Yeah, and actually we're sort of trading tentatively higher on
the NASNAT boar broadly. But I want to get into
a couple of names right here, right now, because Apple
actually managing to shake off what is yet another down crade,
this one coming from Laura Martin over at Needham putting
it to a hold. We now got twenty holds on
Apple and we're actually racking up a few cell ratings.
Speaker 4 (21:50):
Up four teen percent.
Speaker 2 (21:50):
The issue here for needom is once again the lack
of AI spontaneity and grasp of generative AI within the
overall offering and indeed therefore slowing of a sales.
Speaker 4 (21:59):
Cycle potential with the next round of phones.
Speaker 2 (22:01):
So we're up four tenths of percent there cloud strike
actually coming off of our lows, we're still down four percent.
At one point we were down by some seven percent
pre market. This is as numbers actually met exceeded expectations
for their fiscal first quarter, but not good enough when
it comes to perhaps where we're seeing ARR this compared
to this time last year, the net new ARR hasn't
recovered from, of course, what was a massive wipeout blackout
(22:25):
that CrowdStrike caused in July of twenty twenty four.
Speaker 3 (22:28):
Head, okay, let's go to another on the top stories.
Salesforce's agreement by Informatica for eight billion dollars came a
year after initial talks collapsed, but then the acquisition target
lost a third of its market value. The result, according
to Salesforce executives and people close to the negotiations, is
evidence of the software giants more disciplined approach to deal
(22:50):
making and it's patients. Bloombergs Leanna Baker leads the deal's team.
This is just like a classic Bloomberg Tech story. This
is what happened behind the scenes. Two things, Salesforce learning
the value of patients, and then you know, the two
people at the helm with those companies probably paid a
big role.
Speaker 12 (23:09):
If you look at where Salesforce stock has been since
the Informatica deal was announced, it's not doing too well.
It's actually down more than what Informatica is worth. So
Mark Benioff here is sort of defending the deal to
Wall Street, and Salesforce is using words like discipline and
patients to show that they're a different acquirer than they
were just a few years ago when they bought Slack,
(23:31):
when you know later they came under in the crosshairs
of activists in vesters. So they're trying to show that
they're a different sort of m and a acquirer now
still a serial one, but maybe not paying as much
as they would have even a year ago when they
first started talks with Informatica, and the need.
Speaker 2 (23:48):
For Informatica became ever more necessary in a way, as
Jenner to Ai just became the focal point for Salesforce
of Mark Benioff. But how did they therefore keep the
conversation alive? How did they show this discipline over the
twelve months.
Speaker 12 (24:01):
So we reported in the story that the CEOs stayed
in touch. As you know, when two companies come together,
it's kind of like a marriage, it takes a while
to get comfortable. And we also know that there was
interest in Informatica, not just from Salesforce. We reported that
Cloud Software Group, a big privately held private equity back company,
(24:22):
was also interested in. Mark Benioff did say we were
lucky to get this company because it does seem like
it was a competitive auction. Goldman Sachs was working with Informatica,
JPMorgan was working with Salesforce, and it just took a
long time to come together, but it did accelerate ahead.
Speaker 3 (24:38):
Of our scoop.
Speaker 12 (24:39):
They had a handshake agreement before we reported it a
few weeks ago.
Speaker 2 (24:43):
Yeah, Milbyding, I've forgot that handshake with them. We thank you,
Leanna Baker. It's been great reporting throughout. Let's discuss it
further with someone who has a lot of focus on
that particular deal and others. Brand Ruda is co managing partner,
and Coco Pemira, which is an investor in Informatica, And
what's so interesting, Ryan is perhaps you say that a
dollar back today is worth more than a dollar back perhaps.
Speaker 4 (25:05):
A year ago.
Speaker 2 (25:06):
How has liquidity changed, how's this deal making changed?
Speaker 13 (25:11):
Yeah, I mean the probably Thanks Carolyn ed good to
see you guys.
Speaker 14 (25:14):
The environment for private equity has been really tough in
terms of getting liquidity back to investors. You've had extending
investment horizons for a lot of businesses. That's usually actually
good news in the case of like an informatica, which
we've been invested in for a decade at this point,
kind of leading to this transaction, but it's been very
hard to get liquidity. And actually this kind of liquidity
to our investors is particularly valuable because it's coming from
(25:35):
a strategic it's an all cast transaction. It's not private
equity to private equity, which from an LP's perspective is fine,
but also it tends to be left pocket right pocket.
They might actually be an investor in that private equity
fund that's buying from the private equity fund.
Speaker 13 (25:48):
That they're an investor in as well.
Speaker 14 (25:50):
So this is particularly precious DPI, as we say, distribution
to paid ins like real liquidity relative to the value
of what's in the fund. So We're very proud, very
happy with this transaction at this particular point in time especially,
and so.
Speaker 2 (26:01):
How repeatable is that, how many strategic buyers are out
there with the guts the determination to keep following these
sorts of processes.
Speaker 13 (26:09):
We think strategic activity.
Speaker 14 (26:11):
Certainly, the interest that we're seeing is very high in
the kinds of businesses that we back, and i'd say
for our investment philosophy, it's really strong.
Speaker 3 (26:18):
You know.
Speaker 13 (26:19):
Informatica is one of these great stories.
Speaker 14 (26:20):
Of really product led growth that we try to back
for long periods of time. And that's what actually strategic
buyers want. They're not trying to buy in EBITDA optimized
gutted private equity portfolio. What they want is really well
invested product sets. And so if you have businesses that
are doing that, like we do with our technology portfolio,
it generates a lot of strategic interest. So we expect
(26:40):
that it's certainly very active today in terms of dialogue,
and we expect that's going to continue.
Speaker 3 (26:46):
I was really looking forward to this conversation because of
the private equity lens rather than what is more common
on the show, which is venture back deals. But what
they have in common, right, is the exit environment and
what types of exits are on the horizon. D S
D sales full Symformatica as a sort of starting gun
and signal of more activity to come in different formats,
(27:08):
particularly thinking about this administration and the regulatory environment that
would allow something like that to happen.
Speaker 14 (27:13):
Yeah, I mean we think what a lot of the strategic,
big strategic buyers that we see are looking at is
actually generally pretty appreciated currencies in their own stock price,
a lot of liquidity, and then the need and the
excitement to really get their story together for the emerging
and kind of really accelerating AI landscape, and informatic is
(27:34):
exactly that. So you want to find businesses that are
going to help, you know, codify kind of what you're
going to be able to do in that AI world,
and Informatica is like right in the middle. So for
those like you, if you have assets that kind of
bolts of that story. And there's like so many companies
that are out there in the private ecosystem today, you know,
it's a bit of a smorgas board.
Speaker 3 (27:52):
Is twenty five dollars a share, good like it's great
for us.
Speaker 14 (27:55):
Yeah, I mean this has been a it's more than
six billion dollars to our investors.
Speaker 13 (28:00):
Wow, it's a.
Speaker 14 (28:01):
Very very significant, large, multiple billion dollar gain.
Speaker 3 (28:05):
I asked that because of the reporting right that you know,
one year on from their initial talks, a big fact
was the downward pressure on the stock that allowed them
to proceed. And I don't know how you view it.
You might say, well, what might have been at thirty
dollars or thirty five I don't know.
Speaker 14 (28:20):
Yeah, I mean there's a lot of volatility in the
world today. You see you kind of everywhere. What we'd
focus on is like the point what matters to us
is the point to point over ten years, not over
twelve months, and over that period of time.
Speaker 8 (28:31):
I mean.
Speaker 13 (28:31):
The really cool thing about Informatica.
Speaker 14 (28:32):
And there's a lot in there, is that the products
that salesforce is buying with this company are overwhelmingly products
that we created with the management team host the going
private in twenty fifteen, So the cloud business was really
zero at the time we invested in them. We saw
a team that we really fu could build a next
generation cloud data management platform that's guiding the company's guiding
(28:54):
into more than a billion of ARAR this year from
a starting point of zero, not a lot of private
equity back to software businesses can say that they've done that.
So from that kind of point to point level, like
we're thrilled, our investors are very happy with the transaction,
and look, it's a very good home.
Speaker 13 (29:07):
I think Salesforce will get a lot out of Informertica.
Speaker 2 (29:09):
I know the way you said, there's a lot of
volatility in the globe right now because you're a global
footprint kind of pee in fact, for ED and I
we think about your European chops because that's the place
that we come from.
Speaker 4 (29:20):
I'm interested as to how therefore the landscape differs. We
talk about us exceptionalism. Is that where the deal is
going to happen. Is it global in nature?
Speaker 14 (29:28):
Well, we think, I mean a side effect or kind
of a very direct consequence of what's going on in
the world today and particularly in this country, is that
the commitment that we see in Western Europe about investing
in Europe is very high. It's about the highest that
I've seen it in my investing career.
Speaker 8 (29:44):
And so.
Speaker 14 (29:46):
That's going to have like really interesting benefits to the
economies there, to the innovation pace, and frankly it's overdue.
I mean, look at all the hyperscalers based in the US.
We are looking more at bringing the best of Silicon
Valley into Europe. As we've always and there's never been
a better time in our view to have a very
deep European origination network to be able to invest behind
(30:07):
where a lot of that innovation is going to come.
Speaker 2 (30:09):
We were just showing actually some newsletter coming out of
our European colleagues, Mark Bergen, who's writing about how this
glimmer of hope is on the returns that are yet
to be born in Europe for the VC community, for
the P community.
Speaker 4 (30:21):
What needs to get done here in terms of actually
starting to see IPOs.
Speaker 2 (30:26):
For darlings like Revolute or actual exits. Is it going
to be actually your kind of companies that help foster.
Speaker 4 (30:32):
The M and A side of things.
Speaker 14 (30:34):
Yeah, we'd be very like we're here in Europe and
we think the capital base that we've got to be
able to invest in the businesses that are really growing
and really building the next generation of innovators and disruptors
in Europe, that's a very fine thing to be. There
will be plenty of capital now from US and folks
who look like us in the private markets and the
piper up markets really do need to come around again
(30:55):
in Europe and kind of open the way that they
are opening in the US pretty successfully now as well.
But there will be we think, with what we have
like plenty of private capital will be able to pick
up those companies at the same time.
Speaker 3 (31:06):
Brian Ruder, Permira, co managing partner CO ce a great
feel together here in San Francisco, Thank you very much.
Speaker 8 (31:11):
So.
Speaker 3 (31:11):
Coming up, the CEO of HPE Antonia and Nary Joins
US discussed the company's earnings and what it expects to
see a reduced impact from tariffs US. Next, this is
Bloomberg Technology.
Speaker 2 (31:33):
Yet more announcements of investment in the US by big
data center players. This one Amazon coming out saying they're
going to be investing ten million dollars in North Carolina.
At the moment, it's expanding its AI infrastructure, creating we
understand about five hundred new high school jobs. What's interesting though,
ed here is the commitment to reskilling the training, the
education programs, the fact that they want to be really
(31:54):
bringing about more engineers in particular. That is what a
lot of people have been worried about this move to generator.
AI moved to manufacturing, whereas the skill base his Amazon
committing ten billion dollars a lot of AI hardware and infrastructure,
but with that some support for skills as well.
Speaker 12 (32:08):
Ed.
Speaker 3 (32:09):
Yes, we're thinking about where their data centers are on
the East coast and southeast coast particular of this country.
Speaker 1 (32:14):
Okay.
Speaker 3 (32:15):
HPE says tariffs will have a smaller than expected impact
on sales this year. AI revenue also beat and assessmates,
but the company continues to face headwinds, and that includes
an activist investor. HPE CEO Anthony Andery joins us. Now,
I find what you said about tariffs and how that's
reflected in the numbers so interesting because the hyperscalers, for example,
(32:39):
told us that one reason capital expenditures were raised in
that period is the reflection of the higher cost of
doing business because of tariffs. For you, it's like almost
the opposite story.
Speaker 15 (32:53):
Yeah, good morning, Ed, thanks for having me. Look, we'll
raise our guide thence for a number of factors. Number one,
because of all the work we have done throughout a
very diversified supply chain, we find ways to mitigate the
tariffs obviously the USMCA plays a role in that. But
(33:13):
at the same time, we know we are performing better
in many of our businesses and we have had a
number of targeted actions to continue to mitigate any impact
from the tariff.
Speaker 8 (33:24):
And that's us today as we know it.
Speaker 15 (33:26):
But the reality is that the original impact we communicated
at the earnest call in Q one now is significant lesser,
and therefore, together with the cost actions, together with the
better performance of the business and the lesser impact on tariff,
we raise the bottom range of our guide by eight cents.
Speaker 3 (33:45):
And Sony, is it possible for you to quantify for
us the sort of sales channel impact that you provide
from video? So we talk endlessly about all of the
projects domestic and overseas, and videos involved in the great buildout.
It's you know so well, and I spend hours tearing
servers apart. Nothing happens without HPE and others assembling the designs.
(34:08):
I just want a number on it, that's the thing.
Speaker 8 (34:12):
Yeah, Well, hard.
Speaker 15 (34:13):
To put a numbered because you know, many of these
buildouts are happening as we speak, and it takes a
little bit of time to go from an agreement with
a customer working with US and Nvidia to building a
deploying it and then eventually put it in production. But
I can tell you, look, we are have a deep,
(34:35):
long standing relationship with Nvidia. We are covering all segments
of the market where it's these big large buildouts in
the service provider space, whether it's.
Speaker 8 (34:45):
Sovereign or enterprise.
Speaker 15 (34:46):
And one of the things I'm really proud is that
the work we put together with Nvidia LA last year
when we announced the Nvidia competing by HP and a
private cloud, AI is growing very rapidly. In fact, one
third of the new orders we booked in Q and
Q two were from enterprise. But at the same time,
we are completing one of the largest deployments on the
(35:08):
GB two hundred as we speak, and that's a very
large deployment.
Speaker 13 (35:14):
And then we said.
Speaker 15 (35:15):
That our backlog grew quarter over quarter now is three
point two billion dollars on a commulative basis.
Speaker 8 (35:22):
For the last two.
Speaker 15 (35:23):
Years, we booked over nine billion dollars and we have
a multiples of the backlog in our pipeline.
Speaker 2 (35:30):
That one billion attributed to AI in particular is good,
but it's not as much as Dell, for example. I
hate to put it so on the nose in that way, Antonio,
But how much is perhaps Elliott on your board or
others around you sort of saying, look, capitalize on AI
even more.
Speaker 15 (35:47):
Yeah, now there has nothing to do. Look, the previous
quore that we book ourselves a very large order, which
is the one we are deploying today, and that was
not the all didn't do that. So this is a
lumping business and you will see us also talking about
some of the large orders as we may get in
the current quarter of subsequent quarter. So you know this
(36:09):
goes back and forth. But ultimately you have to play
with discipline and our goal is to grow in the
eye and the rest of the business with a capital
structure that works because the reality is that there is
revenue growth, then there is profit accretion, and then is
working capital. And the working capital is something you have
to watch very very closely because the timing from winning
(36:34):
a deal to the time of revenue recognition in these
large deals can be long and therefore you impact cash
flow from operation. So we're trying to balance all of
that while we delivering our commitments from the revenue growth
and on the EPs.
Speaker 2 (36:47):
Growth, well, you delivered in terms of six percent revenue
growth on the quarter. We appreciate it, Antonio andry Hpeco
for joining us.
Speaker 3 (36:56):
The enterprise gets a lot of attention when it comes
to AI option, but consumer technology is poised to be
upended by AI as well. At least that's according to
today's VC Spotlight guests. Ambudetski, a partner at Nea and
Nan joins us now on set San Francisco. I mean, like,
you know, chat GPT is the easiest example, the lowest
hanging fruit. You know, the user base is all of
(37:18):
us going on our iOS based app saying oh sorry
or thank your police. Could I ask this question? Crashing
the GPUs? But I think that's kind of what you're
looking for in your thesis, right, the next version of that.
Speaker 16 (37:29):
Well, thank you so much for having me on. And
you're exactly right. We're at the beginning of an incredible
new consumer AI renaissance if you think about it, We're
now in the third subwave of the AI super cycle.
Twenty twenty three gave us large language models, twenty twenty
four gave us multimodel the ability to generate voice video images,
and twenty twenty five is now the year of agentic
(37:51):
capabilities and applications. Incredibly exciting time to build the new
generation of consumer category creating companies. If we look back
companies like Uber, Spotify, Netflix, we cannot imagine living without
these consumer products today, and we're at the beginning of
a new wave of consumer applications today.
Speaker 3 (38:11):
I don't know about carry, but I feel like the
stories we're covering this domain a largely early stage companies.
They are moving so fast.
Speaker 16 (38:18):
Yes, we are early, but what's really exciting right now
is how quickly consumers are adopting AI tools AI applications.
The stats are absolutely remarkable. We're seeing faster consumer adoption
than any of their prior tech waves. If you look
at it today, eighty percent of consumers already use zero
click search AI search for over forty percent of their searches.
(38:41):
And gen Z, which is always the tip of the
sphere for new consumer products, ninety three percent of gen
Z knowledge workers are using two or more AI tools
every single day. So consumers are experimenting, They're hungry for
new tools, and they want more.
Speaker 4 (38:55):
Who isn't adopting fast enough?
Speaker 2 (38:58):
I mean, is there Sometimes there's a handring element that maybe.
Speaker 4 (39:00):
This agenda divide as well. Is that something a seatbone
out and someone will take to research.
Speaker 16 (39:05):
Yeah, we're starting to see more research reports and consumer adoption.
One of the interesting disparities is that if you look
at mainstream US consumers, only twenty seven percent of US
consumers are using AI tools regularly versus let's say seventy
nine percent among AI experts, really the people who are
building and working in Silicon Valley today. So there's an
(39:26):
interesting trust and awareness gap that still exists, and that
creates the perfect opportunity for consumer product companies to come
along MA CAI useful, MAKEI really relevant in people's everyday lives.
You know, they may not even know it's AI behind
the scenes. They're just going to be incredible new consumer products,
and they have to be trusted brands. Trust is a
really important element in building consume AA products.
Speaker 2 (39:48):
I mean, Apple is a trusted brand and it seems
to be being really slow and it's getting and it's
getting stooled in China. My regulate it is how much
do you need the juggnal of Apple and indeed Google
and Android to push through generative A on I day
and then you get more eleven labs twelve labs companies
that you'll you're backing to build into.
Speaker 16 (40:05):
That well, I think those companies are incredible distribution partners
and their investment in the AI ecosystem, the infrastructure, the GPUs,
the model capabilities is really important. But ultimately startups are
always the best position to take risks, to innovate, create
magical new products that people love, and I think it's
incumbent on these large players to find the right partners
(40:28):
in the startup ecosystem really quick.
Speaker 3 (40:30):
I wanted to get your reaction to Johnny I've io
and open AI because the bigger picture question is is
there a world beyond the smartphone interaction or PC interaction
in form factors When you look for a company they're
developing for I don't even know what.
Speaker 16 (40:46):
Well, so far we have not needed a new device
for hundreds of millions of consumers right to try these
new AI tools. But the interesting thing is, I think
the desire for an AI native and many companies have it.
Not just OPENINGI is also a signal that we want
a more open ecosystem, one where developers can freely build
(41:09):
AI native applications that connect to our devices. So will
there be new AI native devices whether it's eyewear or
you know something on your lapel that that didn't work. Yeah,
well we'll see them very very soon.
Speaker 2 (41:22):
And it's great to have you here, great to have
her in the studio and Petski partner at Nea. All
things consume AI. Well, that does it for this edition
of Bloombag Technology, though ed. But we've got some big
conversations have today.
Speaker 3 (41:34):
Yeah, tune in tonight as the Tech Summit kicks off
in San Francisco, first with a conversation with Alphabet CEO
cinderpitch Ie, and we'll be on the road tomorrow for
a special edition of Bloomberg Technology Live from the Summit.
Don't forget the podcast from San Francisco. This is Bloomberg Technology.
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