Bloomberg Technology 04/26/2024
>> 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. . >> I'M CAROLINE HYDE. >> I'M ED LUDLOW IN SAN FRANCISCO. THIS IS BLOOMBERG TECHNOLOGY. CAROLINE: INTEL SLIDES AMID TEPID FORECASTS. WE WILL DISCUSS ALL OF THAT WITH THE CEO. ED:
MICROSOFT AND GOOGLE POST STRONG RESULTS. CAROLINE: JEFF BEZOS AND ANDY JASSY DELETING CHAPS AMID AN ANTITRUST PROBE. LET'S CHECK IN ON THESE MARKETS. THIS IS A MACRO PICTURE ON THE DAY AND SOME EARNINGS GALVANIZING A DRIVE HIGHER. NASDAQ UP MORE THAN 2% THEN.
WE SEE THE CORE PCE THAT THE FED SO LOVES COMING IN LINE. WE ARE NOT CALLING, BUT WE ARE NOT EXCEEDING EXPECTATIONS. THE MARKET IS RELIEVED AND WE ARE SEEING ABOUT OF GOOD, HEALTHY INCREASE IN CERTAIN STOCKS. A 10 YEAR YIELD DIVES DOWN ONTO THE BACK OF THAT PCE NUMBER.
EVEN THOUGH WE SEE BONDS INDEED RALLYING COMING YIELDS FALLING LOWER, THE DOLLAR STILL RESILIENT AGAINST THE JAPANESE YEN. WILL WE SEE INTERVENTION FROM THE BOJ? MOVING ON, HAVE A LOOK AT WHAT IT IS DOING AGAINST BITCOIN. DOLLAR STRENGTH AGAINST BITCOIN. CRYPTO ON THE DOWNSIDE. ED: IT IS ALL ABOUT EARNINGS. INTEL IS OFF SESSION LOWS. AND JUST A MOMENT, IAN KING WILL GIVE US THE NUMBERS AND THEN WE WILL SPEAK TO THE INTEL CEO. MICROSOFT AND ALPHABET ARE ALL ABOUT CLOUD GROWTH DRIVEN BY AI PRODUCTS. MICROSOFT, 31% TOPLINE GROWTH
ON AZURE. WE WILL GO DEEPER ON THAT LATER IN THE SHOW. CLEARLY, ALPHABET IS OUTPERFORMING. IF A JUMP IN THAT STOCK.
A DIVIDEND FOR THE FIRST TIME. IT JOINS THE $2 TRILLION MARKET CAP CLUB IF IT CLOSES AT THAT LEVEL. JOINING NAMES LIKE MICROSOFT, APPLE, NVIDIA. THAT IS IMPORTANT. WE ARE STARTING TO BELIEVE THAT THERE WAS GROWTH AT ALPHABET AND GOOGLE DRIVEN BY ALL THE INVESTMENT AROUND AI.
THAT IS LATER IN THE PROGRAM, BUT WE START WITH SEMI CONDUCTORS. CAROLINE: LET'S DIG IN ON ALL THINGS INTEL. IAN KING WAS DISCUSSING WITH THE BUSINESS. THIS SEEMS TO BE A WORRY ABOUT FORECASTS. Q1 WAS PRETTY RESILIENT, THE FORECAST, TEPID. >> YOU ARE ABSOLUTELY RIGHT.
THE ISSUE THAT INVESTORS HAD WAS WITH THE FORECAST THAT PAT AND HIS TEAM PUT OUT AND THAT WAS CONSIDERABLY LIGHTER THAN THE CONSENSUS. THAT WAS EXPLAINED BY PAT AND HIS MANAGEMENT TEAM AS BEING RELATED TO A STRUCTURAL ISSUE THAT SOME OF THE EXCESS DEMAND CAN'T BE MET BECAUSE OF AN ISSUE WITH A SHORTAGE OF A CERTAIN TYPE OF MANUFACTURING. ED: IT IS IMPORTANT TO TALK ABOUT THE SERVER MARKET. WHAT DID WE LEARN ABOUT INTEL'S PLACE? IAN: AS I FORWARDED IT ALONG TO YOU, THE SERVER MARKET, THE BASIC SERVER MARKET AT INTEL HAS OWNED FOR MANY YEARS ISN'T GROWING AT A RATE THAT IT HAS IN THE PAST BECAUSE SPENDING IS GOING ELSEWHERE, INTO AI ACCELERATORS.
AND THAT ISN'T A BIG MARKET FOR INTEL YET. ED: WE SHOULD TALK ABOUT FOUNDRY. INTEL IS PURSUING TWO BUSINESS MODELS. IAN: THAT IS THE BIG STORY, ISN'T IT?
PAT IS PURSUING SOME LONG-TERM FUNDAMENTAL CHANGES TO THE CHIP INDUSTRY. IF IT PLAYS OUT HOW HE PROJECTS, WE WILL SEE A WHOLE DIFFERENT INTEL AND A WHOLE DIFFERENT INDUSTRY, BUT IN THE MEANTIME HE HAS TO REPORT QUARTERLY EARNINGS BASED ON WHAT IS HAPPENING RIGHT NOW. ED: IAN KING, THANK YOU SO MUCH. CARO, IT IS THE EARNINGS CONTEXT. BUT LIKE EVERY EARNINGS, IT IS ABOUT OUTLOOK AND THE LONG TERM. THE STORY WITH INTEL THAT THE MARKET IS SEIZING ON RIGHT NOW.
CAROLINE: WE WANT TO DIG IN TO THE LONG-TERM WITH THE CEO. BUT WE HAVE TO ACKNOWLEDGE THE SHORT TERM. THE WORST SELLOFF SINCE JULY 2020. WE ARE AT THE WORST SINCE JANUARY 2024.
THIS IS A COMPANY THAT HAS LOST A THIRD OF ITS MARKET CAPITALIZATION THIS YEAR ALONE. ED: WE KNOW THAT AI IS A COMPLICATED STORY. THE SERVER MARKET NEEDS CPU'S AND IT ALSO NEEDS MEMORY, WHICH WE DISCUSSED WITH MICRON THE OTHER DAY. A LOT OF THIS IS HAPPENING IN PARALLEL. SOME OF THE CLOUD GROWTH IS NOT NECESSARILY AI RELATED. DATA CENTER INFRASTRUCTURE IS
NEEDED FOR NON-AI REASONS AS WELL. LET'S TRY TO UNPICK WHAT IS HAPPENING IN A NAME THAT YOU SAY IS DOWN. WE WELCOME NOW TO BLOOMBERG TV AND RADIO WORLDWIDE AND JOINING US IS THE INTEL CEO PAT GELSINE GER. THE STOCK IS DOWN MORE THAN 10% AND WE ARE KIND OF HERE AGAIN WHERE THERE IS THE SHORT-TERM AND THE LONG-TERM WHERE YOU ARE TRYING TO CONVINCE INVESTORS OF A RETURN TO TECHNOLOGY LEADERSHIP AND ALSO GROW A FOUNDRY BUSINESS.
HAVE YOU AN UPDATED TIMELINE OF WHEN YOU THINK YOU WILL ACHIEVE THAT TARGET? PAT: YES, THANKS. WE DELIVERED SOLID Q1. WE MET ON REVENUE, WE BEAT ON EARNINGS. A BIT TEPID IN THE FIRST HALF, BUT WE SEE A LOT OF IMPROVEMENT AS WE GO THROUGH THE YEAR. WITH THAT, THE FOUNDRY BUSINESS AS I WOULD SAY WE WILL SEE PROGRESS EVERY QUARTER FROM NOW UNTIL THE END OF THE DECADE. IT JUST GETS BETTER AND BETTER AS WE MOVE INTO OUR NEW TECHNOLOGIES.
GETTING BACK TO PROCESS LEADERSHIP, WHICH HAD BETTER ASP'S AND WE CAN BUILD BETTER PRODUCTS WITH THEM. WE WIN MORE EXTERNAL FOUNDRY CUSTOMERS AS SCALE GROWS AND WE GET PAST THIS PERIOD WHERE WE HAD TO INVEST AND CATCH UP AND CREATE. EVERYTHING BECOMES A TAILWIND GOING FORWARD AND WE HIT KEY MILESTONES. ONE OF THOSE I WAS VERY PROUD OF HIS WE WENT TO PRODUCTION THIS WEEK WITH OUR FIRST SERVER PART FOR INTEL 3. THE U.S. IS BACK TO LEADERSHIP PROCESS TECHNOLOGY BEING MANUFACTURED ON OUR SHORES FOR THE FIRST TIME IN A DECADE. EVERYTHING'S COMING TOGETHER AS WE WOULD SAY AND WE ARE VERY OPTIMISTIC THAT WE WILL DELIVER. THE FOUNDRY BUSINESS AND THE
MANUFACTURING CAPABILITIES AS WE HAVE LAID OUT IN THE COMPANY, THE INDUSTRY, AND THE WORLD. CAROLINE: 2024 THE BOTTOM IN MANY ASPECTS. THEY WANT TO UNDERSTAND THE PACE OF THE CLIMB NECESSARY. HOW CAN YOU TELL US ABOUT HOW QUICKLY YOU WILL BE ABLE TO SCALE BACK THAT MARKET SHARE YOU HAVE SO FAR LOST? PAT: WE LOOK AT INTEL NOW IN THESE TWO DIFFERENT PERSPECTIVES. INTEL PRODUCT AND WE EXPOSE THROUGH OUR RECAST FINANCIALS THAT WE HAVE A VERY SOLID BUSINESS WITH HEALTHY FINANCIALS AND WE EXPECT THOSE TO IMPROVE OVER TIME. BUT THE BIG STORY HAS BEEN
ABOUT EXPOSING THE FINANCIALS FOR FOUNDRY AND THE LOSSES ASSOCIATED WITH THEM. WE WILL CROSS THROUGH PROFITABILITY THROUGH THE MIDDLE OF THAT PERIOD AS WE START TO MODERATE THE LEVEL OF INVESTMENT REQUIRED TO GO REBUILD THAT DECADE OF UNDERINVESTMENT. AS WE DO THAT, IF WE HAD THAT TODAY, WE WOULD BE MORE THAN DOUBLE THE EARNINGS WE ARE FORECASTING. IT BECOMES A HUGE POSITIVE LEVER FOR US. AND AS I LIKE TO SAY, ALL OF THAT IS IN OUR CONTROL. ALL OF THESE THINGS ARE IN OUR CONTROL AND IT GETS BETTER AS WE WIN ADDITIONAL EXTERNAL FOUNDRY CUSTOMERS. ED:
THE LINK IS ABOUT GROWING MARKET SHARE SERVER TO SUPPORT THE COSTS NECESSARY FOR THE FOUNDRY BUSINESS. YOU WERE ASKED AN INTERESTING QUESTION ON THE CALL IN THE CONTEXT OF SERVERS BUILT ON X 86 VERSUS ARM-BASED ALTERNATIVES AND YOU GAVE A PRETTY THOROUGH EXPLANATION ABOUT THE DATA CENTER CPU'S, BUT I DIDN'T HEAR WHAT WAS HAPPENING IN THE REAL WORLD. WHERE ARE DATA CENTERS BEING BUILT AND WHAT ARE THEY BEING BUILT ON RIGHT NOW? PAT: WE HAVE BEEN IN A PERIOD NOW FOR A NUMBER OF QUARTERS WERE DATA CENTER CPUS HAVE BEEN FAIRLY TEPID AND WE DO SEE THAT IMPROVING. WE HAD A GOOD IMPROVEMENT IN THE FIRST QUARTER OF THE YEAR AND WE EXPECT THAT TO CONTINUE AND THERE IS TIME FOR A REFRESH, BUT WE ARE ALSO SEEING THAT THE CPU'S AS HEAD NODES FOR TEST CASES. WE CAN NOW RUN 70 BILLION PERIMETER MATERS NATIVELY ON THE CPU. I DON'T NEED A SPECIAL ACCELERATOR. I CAN DO EVERYTHING IN OF THE SOFTWARE STACK I ALREADY USE INSIDE DATA CENTERS AND WE ARE SEEING THAT THESE POWER EFFICIENT PRODUCTS WE ARE BRINGING TO THE MARKETPLACE ARE GOING TO ENABLE US TO STABILIZE AND REGAIN MARKET SHARE WITH MUCH HIGHER CORE COUNTS. THE ASP'S ARE GOING UP VERY
NICELY ON THAT THROUGH THE YEAR. WE SAW GROWTH IN Q1 AND WE EXPECT THAT TO CONTINUE THROUGH THE YEAR. AND IN THE BACK HALF OF THE YEAR, OUR ACCELERATOR PRODUCT LINE WE BELIEVE BECOMES A VERY COMPELLING SOLUTION FOR ENTERPRISE CUSTOMERS AND WE HAVE QUITE A NUMBER OF ANNOUNCEMENTS OF THOSE THIS QUARTER. CUSTOMERS SUCH AS BOSCH AND DELL AND SUPERMICRO ALL BRINGING THOSE INTO THE MICRO -- MARKETPLACE. HE CLOUD PARTNERS LIKE THE FASTEST GLOWING CLOUD PROVIDER IN ASIA. ALL OF THOSE COMING ALONGSIDE
THE INTEL STRATEGY, SO WE SEE THE MOMENTUM BUILDING AREA CAROLINE: MOMENTUM AND WE ARE WITH TV, RADIO AUDIENCES, THE CEO OF INTEL, PAT GELSINGER. ON MOMENTUM, EVERYONE WANTS TO TALK ABOUT AI AND ALL OF ITS WAYS AND MEANS. I'M REALLY INTERESTED IN ULTIMATELY YOU WERE GOING TO BE SHIPPING IN EXCESS OF 40 MILLION AI PCU'S, BUT WHAT IS THE DEMAND LIKE AT THE MOMENT AND WHAT IS THE COST LIKE? PAT: WHEN WE ANNOUNCE TO THE CATEGORY AT THE END OF LAST YEAR , EVERYBODY SAID, WOW, WHAT IS GOING ON? YOU ARE SEEING A FLURRY OF INTEREST OF OTHER PEOPLE COMING INTO THE MARKET. BUT INTEL IS UNQUESTIONABLY THE LEADER. FIRST TO DECLARE THE MARKET AND FIRST TO DESCRIBE THE USE CASES, AND OUR FIRST PRODUCT IS HAVING A VERY ROBUST RAMP INTO THE MARKETPLACE. TO SOME DEGREE, I'M RACING TO CATCH UP TO THE DEMAND. WE ARE REACHING SUPPLY
COMMITMENTS, BUT NOT ALL OF THE UPSIDE REQUESTS. THIS IS VERY ROBUST AND WE EXPECT TO EXCEED THE 40 MILLION UNITS. WE WILL INTRODUCE OUR NEXT GENERATION PRODUCT IN THE MIDDLE OF THIS YEAR, SO ALL OF THESE PIECES WE ARE VERY OPTIMISTIC AND WE SEE USE CASES AND COMMUNICATIONS WHERE ALL OF A SUDDEN I GET SUMMARIZATION, CONTEXTUALIZATION, TRANSLATION IN REAL TIME ALL RUNNING ON MY PC. ALL OF THESE USE CASES ARE BECOMING AI ENABLED AND INTEL LEADING THE AI PC PARADE IS A VERY EXCITING TIME AND WHAT WILL BE THE BIGGEST PC REFRESH IN DECADES. CAROLINE: THIS IS A CONVERSATION ABOUT
YOUR TECHNOLOGY AND YOUR FUNDAMENTALS OF THE BUSINESS. I'M GOING TO TAKE A TURN FOR THE MOMENT AND IT IS A SENSITIVE QUESTION. GIVEN YOUR RELATIONSHIP WITH ISRAEL AND THE FACT THAT YOU ARE ONE OF THE LARGEST EMPLOYERS OVER THERE, HOW ARE YOU CURRENTLY FEELING ABOUT STUDENTS IN THE UNITED STATES PROTESTING AGAINST ENDOWMENTS BEING INVESTED IN COMPANIES ASSOCIATED WITH ISRAEL AT THIS MOMENT? PAT: WELL, WE HAVE BEEN IN ISRAEL FOR 40 YEARS NOW AND IT HAS BEEN AN INCREDIBLE COUNTRY FOR US, AN INCREDIBLE INNOVATORS AND EXTRAORDINARY RESILIENCE BY THE ISRAELI PEOPLE. AND THEY CONTINUE DESPITE THE CHALLENGES OF THE WAR THAT IS GOING ON THERE TO DELIVER AGAINST THEIR OBJECTIVES. WE ARE VERY COMMITTED TO SUPPORT OUR TEAMS WHEREVER THEY ARE IN THE WORLD. THAT SAID, WE SEEK PEACE AND WE HAVE BEEN CLEARLY EMPHASIZING THAT WE NEED TO FIND ROUTES OF SUSTAINABLE PEACE IN THE REGION.
WE HAVE BEEN SUPPORTING PERSPECTIVES THAT REINFORCE THAT ACROSS THE REGION. AS WE LOOK ACROSS THE WORLD, THERE CONTINUES TO BE THE TURBULENCE AND FUNDAMENTALLY OUR STRATEGY IS ABOUT BUILDING FUNDAMENTALLY RESILIENT SUPPLY CHAINS AROUND THE WORLD. THERE WILL BE THESE CHALLENGES ACROSS THE WORLD, WHETHER THAT IS IN ISRAEL, UKRAINE, OR ASIA, AND WE ARE COMMITTED TO MAKING SURE THAT WE CAN SUPPORT THE GLOBAL MARKETS THAT WE SERVE WITH A STRATEGY THAT WE REALLY WAS BILLED A TURBULENT WORLD. ED: LET'S END ON AI ACCELERATORS. GAUDI IS ON TRACK FOR 500
MILLION THIS YEAR. A WE'LL PROBABLY DOMD 3.5 BILLION. NVIDIA WILL DO 34 BILLION. YOU HAVE SAID THAT CHOICE IS IMPORTANT AND ALSO THE CPU WAS IMPORTANT AND I ACCEPT THAT MANY SHARE IT. DO YOU SEE A CLEAR PATH WHERE THE NUMBERS I OUTLINED REBALANCE IN YOUR FAVOR IN THE AI ACCELERATOR MARKET GOING FORWARD? PAT: GIVEN THE STRENGTH THAT WE SAW AT OUR VISION EVENT, WE HAD 20 PLUS CUSTOMERS COMING OUT PUBLICLY IN SUPPORT OF OUR ACCELERATOR STRATEGY, WE ARE STARTING TO SEE THAT PIPELINE OF ACTIVITY CONVERT. AND ULTIMATELY MUCH OF THE ACTIVITY THAT YOU HAVE SEEN SO FAR ON GENERATIVE AI HAS BEEN IN CLOUD TRAINING. NOW I THINK THE ULTIMATE MONETIZATION OF AI HAPPENS AS BUSINESS DEPLOYMENTS START TO OCCUR AND THOSE ARE THE AREAS WE SEE STRIKE. WE LAUNCHED THE OPEN PLATFORM
FOR ENTERPRISE AI. HOW DO WE ENABLE THESE USE CASES INSIDE OF THE ENTERPRISE BUT IN AN OPEN ARCHITECTURE THAT MANY GET TO PARTICIPATE IN? WE ANNOUNCED OPENAI NETWORKING TO STANDARD ETHERNET-BASED SCALE UP AND SCALE OUT NETWORKING. AND OBVIOUSLY THE MOMENTUM WE ARE SEEING WITH GAUDI, ALL OF THAT IS IN THE SECOND HALF OF THE YEAR. YOU CAN SEE A VERY ACCELERATED
CYCLE. A LOT OF ENTHUSIASM FOR GAUDI. THE UNQUESTIONED LEADER IN TOTAL COST OF OWNERSHIP FOR ENTERPRISES. BUILDING ON THE XEON FRANCHISE AND THE POSITION WE HAD.
AND LITERALLY ISV'S AND CLOUD PROVIDERS, BUT MOST IMPORTANTLY ENTERPRISE CUSTOMERS SEEING THE VALUE PROPOSITION. WE FEEL LIKE WE ARE GETTING A LOT OF MOMENTUM IN THE CATEGORY AND FEEL GOOD ABOUT THE POTENTIAL FOR AI EVERYWHERE. HEY IPC, EDGE, AND CLOUD. CAROLINE: ENDING ON AN OPTIMISTIC NOTE, WE THANK YOU SO MUCH, PAT GELSINGER ON ALL THINGS AI AND ALL THINGS INTEL NUMBERS.
LET'S KEEP THE FOCUS ON EARNINGS FOR A MOMENT. THE FORECAST FOR SNAP IS A GOOD ONE. SHARES POPPING. UP 25% LET'S CALL IT. POSITIVE SIGNS IN THEIR REVAMP.
THE NEW DIGITAL ADVERTISING BUSINESS THEY HAVE BEEN OFFERING, MARKETERS LIKE IT. 18% FORECAST FOR INCREASE IN SALES. THIS IS BLOOMBERG TECHNOLOGY. CAROLINE: GOT TO GET BACK TO THOSE EARNINGS. GOT TO GET BACK TO THE NEW $2 TRILLION ENTRANT. SHARES POPPING HIGHER AFTER THE SURGE IN CLOUD REVENUE AT THOSE BUSINESSES FUELED IN PART BY BOOMING USE OF ARTIFICIAL INTELLIGENCE SERVICES HELPING DELIVER STRONG EARNINGS RESULTS. I WANT TO GET TO IT WITH HILLARY. LET'S COMMENT ON THE ONE MOVING
THE MOST TODAY. ALPHABET, PARENT OF GOOGLED. CLOUD ALWAYS BEEN SEEN AS THE LAGGER THERE. BUT IT IS HELPING BRING ABOUT MARKET SHARE WITH STARTUPS. >> INDEED IT IS. THANK YOU FOR HAVING ME. GOOGLE IS WELL KNOWN FOR HAVING A STRONG PRESENCE AMONG STARTUPS, TECH COMPANIES. THEY HAVE AMONG THE BEST AI
ASSETS AROUND HISTORICALLY. THEY ARE GOING TO BENEFIT FROM THIS ALONG WITH EVERYBODY ELSE. CAROLINE: I THINK MANY WERE WAITING FOR THESE OFFERINGS, HOW ARE PEOPLE ADOPTING THEM AND BOOSTING THEIR OWN PRODUCTIVITY? MICROSOFT HAS SHOWN A LIGHT ON THE FORTUNE 100 USING THE AZURE CLOUD AT THE MOMENT. CLOUD IS STILL GOOD FOR GOOGLED. HILARY: THE CYLINDERS ARE REALLY STARTING TO GET GOING.
IT IS INTERESTING BECAUSE MICROSOFT IS ABSOLUTELY BENEFITING FROM A SHARE PERSPECTIVE DUE TO THEIR LEADING POSITION IN AI ACROSS THEIR BUSINESSES AND ACROSS CLOUD. I VIEW AI AS ULTIMATELY A CONTRIBUTOR, BUT IT IS DEFINITELY AN ACCELERANT TO CLOUD MIGRATIONS. ED: GOOD MORNING. THE SHARE REACTIONS OF EACH ARE INTERESTING. ALPHABET MORE PRONOUNCED.
WHEN I TALKED LAST NIGHT ABOUT CLOUD, AI SOLUTIONS DID MAKE A MEANINGFUL CONTRIBUTION TO THE 28% CLOUD GROWTH YEAR ON YEAR, BUT SHE DIDN'T PUT A NUMBER ON IT. MICROSOFT DID PUT A NUMBER ON IT. THEY SAID 31% AZURE, 7% FROM AI. REALLY INTERESTING SHARE REACTION. I PUT IT TO YOU THAT ALPHABET ISN'T PROBABLY JUMPING AS MUCH ON THAT CLOUD NARRATIVE AS IT IS THE SWEETENER OF A DIVIDEND. HILARY: I THINK YOU ARE RIGHT ABOUT THAT. INVESTORS WERE PLEASED TO SEE THE RESULTS ACROSS THE BOARD. I THINK THEY BREATHED A SIGH OF
RELIEF THAT CLOUD ACCELERATED AND BUSINESSES ACCELERATED QUARTER OVER QUARTER, BUT THE BIG PIECE OF NEW INFORMATION HERE WAS OPERATING MARGIN IMPROVEMENT AND COMMITMENT TO THAT THROUGH THE YEAR AS WELL AS THE DIVIDEND. IMPORTANTLY, IT SIGNALS A SHAREHOLDER FRIENDLY HER STANCE THAN WE HAVE SEEN FROM GOOGLE HISTORICALLY. ED: HILARY, DO YOU BELIEVE NOW THROUGH THE LENS OF ALPHABET AND MICROSOFT'S EARNINGS THAT CORPORATE AMERICA IS SPENDING ON USING GENERATIVE AI? HILARY: I BELIEVE THEY ARE. I BELIEVE MOST OF CORPORATE AMERICA IS EXPERIMENTING WITH AI AND TESTING GENERATIVE AI IN MICROSOFT AZURE'S CLOUD AND ELSEWHERE. THERE ARE SOME EARLY ADOPTERS
WHO ARE STARTING TO GET TO SOME LEVEL OF SCALE. MICROSOFT'S SEVEN POINTS OF AI CONTRIBUTION WERE GOOD. I WOULD SAY THEY WERE GENERALLY IN LINE. MICROSOFT DID SIGNAL THAT THEY WERE CAPACITY CONSTRAINED. I STILL BELIEVE IT WILL BE IN THE SECOND HALF THAT WE SEE MICROSOFT DOING INFERENCING ON THE CLOUD REALLY BROUGHT NOW AND START TO DRIVE THAT NUMBER.
CAROLINE: WE ARE TALKING ABOUT TWO NAMES THAT HAVE ALREADY DONE PHENOMENALLY WELL IN THE HEIGHT AROUND AI. WE ALSO THINK ABOUT WHAT DATA DOG IT IS UP TO. HOW ARE THESE COMPANIES GOING TO BENEFIT? HILARY: THE WHOLE CLOUD CONSUMPTION CONFERENCE, THEY WILL BENEFIT WITH A LAG. WE ARE NOT SEEING IT ON A BROAD-BASED BASIS YET. THERE ARE A SELECT FEW WHO WILL BENEFIT. THEY WILL BENEFIT FROM THE ABSENCE OF COST OPTIMIZATION WE SAW LAST YEAR. THEY WILL SEE THE FLOW THROUGH
OF WHAT IS EFFECTIVELY A CYCLICAL CLOUD CONSUMPTION. WE HEARD THAT FROM MICROSOFT LAST NIGHT. COMPANIES ARE STARTING TO DO THINGS, THEY ARE TAKING ON MULTIPLE PROJECTS AND BRINGING THOSE BACK. THAT IS A POSITIVE. ED: WE ARE DOWN WEEK ONE OF MEGA CAP TECH AND I'M BRACING FOR WEEK TWO. WHAT DO YOU THINK IS THE
BLANKET TAKEAWAY OF THIS SEVEN-DAY PERIOD SO FAR? HILARY: I WOULD SAY OVERALL CAUTIOUSLY OPTIMISTIC. AGAIN, I STICK TO THE NAMES WHERE EXPECTATIONS ARE LOW, VALUATIONS ARE REASONABLE, AND COMPANIES HAVE IDIOSYNCRATIC DRIVERS. THE CLOUD CONSUMPTION COMPLEX AMAZON SHOULD SHOW SOME PRETTY GOOD RESULTS BASED ON THE FACT THAT THEY HAVE A LOT OF TECH COMPANIES AND STARTUPS WHO ARE EXPERIMENTING WITH AI, BUT IT IS COMPANY BY COMPANY AND ENTERPRISE BUDGETS REMAIN SOMEWHAT CONSTRAINED IN THE FIRST HALF. MORE OF THAT OPENING UP IN THE SECOND HALF. CAROLINE: ALWAYS SO GOOD TO GET YOUR EXPERTISE IN THE TIME THAT WE HAVE EARNINGS AND ALL THE TIME. WE THINK YOU FOR BEING HERE. ED: LET'S GET SOME NEWS IN TALKING TACK. A FOOD DELIVERY SERVICE
LAUNCHING ITS INTERNATIONAL PLATFORM IN RIYADH, ITS FIRST LOCATION OUTSIDE CHINA. ACCORDING TO SOURCES, THE COMPANY LOOKED INTO EXPANDING IN THE MIDDLE EAST FOR MONTHS AND COULD LAUNCH AS EARLY AS A FEW MONTHS FROM NOW. THE MOVE COMES AS CHINESE COMPANIES SEEK GROWTH ABROAD TO COMBAT A DOMESTIC SLOWDOWN READ U.S. SECRETARY OF STATE ANTONY BLINKEN AND CHINESE PRESIDENT XI MET.
A WARNING WAS ISSUED SAYING CHINA AND THE UNITED STATES SHOULD BE PARTNERS RATHER THAN RIVALS. THE MEETING COMPOSED ON TRADE, TENSIONS, AND AI TALKS. HUAWEI'S LATEST SMARTPHONES ARE SAID TO BE UTILIZING AN UPDATED VERSION OF ITS MADE IN CHINA CHIPS. THE PHONES SPORT A PROCESSOR WHICH IS A NEW VERSION OF THE 9000 CHIPS THAT ALARMED WASHINGTON OFFICIALS DUE TO THEIR SEVEN NANOMETER TECH LONG THOUGHT TO BE BEYOND CHINESE CAPABILITIES. IT SOLD OUT WITHIN TWO DAYS OF BEING LAUNCHED. CAROLINE: FASCINATING.
COMING UP, WE WILL TALK FTC ALLOCATIONS -- ALLEGATIONS AGAINST JEFF BEZOS AND ANDY JASSY. THEY HAVE BEEN DESTROYING MESSAGES AMID AN ANTITRUST PROBE. MEANWHILE, U.K. LISTED COMPANY UP 16%. THE U.K. CYBER COMPANY HAS AGREED TO SELL ITSELF TO A PRIVATE EQUITY FIRM FOR $5.3 BILLION, BASICALLY A 20% PREMIUM. CAUTION IN THE MARKET THIS DEAL WILL GET DONE.
THEY WALKED AWAY BACK IN 2022 FROM TALKS TO BUY DARK TRACE. THIS IS A COMPANY IN SOMEWHAT OF AN INTERESTING RELATIONSHIP WITH THE EMBATTLED ENTREPRENEUR MIKE LYNCH ON TRIAL FOR FRAUD IN THE U.S. ED: WELCOME BACK TO BLOOMBERG TECHNOLOGY. ED LUDLOW IN SAN FRANCISCO. CAROLINE: CAROLINE HYDE BACK IN NEW YORK. WE ARE HAVING THE BEST WEEK SINCE NOVEMBER FOR THE NASDAQ 100 AND THE NASDAQ MORE BROADLY AT THE MOMENT. THIS IS BEING DRIVEN ON MACRO
DATA. INFLATIONARY PRESSURES ARE IN LINE WITH WHAT THE MARKET EXPECTED. THE BOND MARKET CATCHES A BID. RESILIENT DOLLAR STRENGTH.
THIS IS THE LOWEST BEGIN HAS BEEN IN 34 YEARS. LOOKING AT BITCOIN ALSO DOWN. LET'S LOOK AT WHAT IS HAPPENING IN THE MICRO LEVEL. NASDAQ HAS A FEEL-GOOD FEELING. IT FIRST -- ITS FIRST QUARTER CAME IN LINE. ONE OF THE OTHER KEY UNDERPERFORMERS, THIS IS AN AUSTRALIAN SOFTWARE COMPANY. THE CO-CEO HAS LEFT AND IS
STEPPING DOWN TO SPEND MORE TIME WITH FAMILY AND ON PHILANTHROPY. THAT HAS UPSET SOME STOCKHOLDERS. BIG MOVE -- GROWTH LOOKS GOOD, CLOUD LOOKS GOOD. FOR THE FIRST TIME EVER, THEY ARE DOING MORE BUYBACKS. WHAT ARE YOU LOOKING AT, AND? ED: LET'S GET TO ONE OF THE TOP STORIES. TOP ANIMAS IN -- AMAZON EXECUTIVES AND ANDY JASSY
DESTROYED TEXT MESSAGES DISCUSSING BUSINESS ACCORDING TO ALLEGATIONS BY THE FTC, ERASING EVIDENCE THE AGENCY COULD HAVE USED IN AN ANTITRUST CASE AGAINST THE RETAIL GIANT. I WANT TO BRING IN MIKE SHEPPARD WHO LEADS OUR COVERAGE OF THE INTERSECTION OF TECH AND POLITICS. AMAZON IS PUSHING BACK AGAINST THIS FTC ALLEGATION WITH SOME FORCE. WE WILL GET TO THAT, BUT WE ARE
TALKING ABOUT COMMUNICATIONS MADE BY EXECUTIVES ON THE SIGNAL APP. EXPLAIN IT TO US. MIKE: IT IS IMPORTANT TO TURN THE CLOCK BACK A COUPLE OF MONTHS TO SEPTEMBER AND THIS IS WHEN THE FTC FILED ITS INITIAL ANTITRUST CASE AGAINST AMAZON. THEY HAVE BEEN GRADUALLY INCREASING THE PRESSURE ON THIS COMPANY. IN NOVEMBER, THEY HAD A LESS REDACTED VERSION OF THE CASE RELEASED TO THE PUBLIC AND THAT INDICATED THEY HAD CONCERNS. THEY DIDN'T NAME NAMES. TODAY, WE LEARNED AND WE ARE DISCUSSING TODAY THE LATEST AND THAT IS THAT THEY ARE NAMING NAMES INCLUDING CEO ANDY JASSY AND FOUNDER JEFF BEZOS.
THAT INDICATES THE KIND OF PRESSURE THE AGENCY IS PUTTING ON THE COMPANY. IT ECHOES WHAT THIS BROADER EFFORT AGAINST BIG TECH IN D.C. CAROLINE: TURN THE CLOCK BACK EVEN FURTHER AND YOU GO BACK TO 2019 WHEN JEFF BEZOS MADE CLEAR THAT HIS PHONE HAD BEEN HACKED. THAT IS THE ARGUMENT AS TO WHY EXECUTIVES MOVED TO SIGNAL AND THESE DISCUSSIONS THAT CAN DELETE THEMSELVES. AMAZON HAS SAID THE FTC HAS A COMPLETE PICTURE OF DECISION-MAKING INCLUDING 1.7 MILLION DOCUMENTS, OVER 100 TERABYTES OF DATA. WHAT MORE NEEDED THEY DO TO
PROVE THAT THEY WEREN'T USING SIGNAL FOR CONVERSATIONS THEY DIDN'T WANT SEEN BY THE FTC? MIKE: THE FTC IS ACTUALLY ALLEGING THAT MAYBE THERE WAS MORE THAT THEY NEEDED TO KNOW ABOUT. MAYBE THERE WAS MORE IN THOSE CONVERSATIONS THAT DISAPPEARED THAT THEY DON'T HAVE ACCESS TO AND ARE NOT PRIVY TO IN THE CASE YET AND THAT THEY SHOULD THEREFORE BE ABLE TO SEE TO HAVE A CLEAR AND COMPLETE PICTURE, BUT AMAZON IS SAYING THAT YOU ALREADY HAVE ENOUGH. YOU HAVE MORE THAN ENOUGH THEN YOU NEED TO BE ABLE TO CARRY ON YOUR WORK HERE. I'M GLAD YOU BROUGHT UP THE POINT ABOUT 2019 BECAUSE OF COURSE THAT IS WHEN JEFF BEZOS' TEXTS WERE PURPORTEDLY HACKED AND HIS DESIRE TO MAINTAIN SOME DEGREE OF PRIVACY IS ANOTHER DRIVER HERE. SO THE COMPANY IS SAYING WE HAVE DONE ENOUGH AND WE HAD CAUSE TO TRY TO PROTECT SOME OF THESE COMMUNICATIONS AGAINST PEOPLE ON THE OUTSIDE. CAROLINE: MIKE, YOU ALWAYS SUM IT UP SO BEAUTIFULLY. MEANWHILE, LET'S SHIFT GEARS A
LITTLE BIT. NEARING A DEAL TO RAISE $6 BILLION IN FUNDING. THAT IS ACCORDING TO A PERSON FAMILIAR WITH THE MATTER. MAX CHAFKIN JOINS US NOW.
I'M INTERESTED BY THE FACT OF THE SHEER AMOUNT THEY ARE RAISING VERSUS THE CAPITALIZATION, BUT THEY DID GO FOR FUNDING TO BEEF UP XA I. MAX: ELON MUSK SAID THIS COMPANY MAKES LARGE LANGUAGE MODEL SIMILAR TO OPENAI. HE DID THIS QUICKLY AND WITH A SMALL STAFF, BUT TO KEEP THESE MODELS TRAINING, YOU NEED AN INSANE NUMBER OF VERY EXPENSIVE GPU'S, THE GRAPHICS CHIPS THAT ARTIFICIAL INTELLIGENCE COMPANIES USE. ON AN INTERVIEW LAST MONTH, HE SAID THEY WERE USING 20,000 ALREADY OF THESE NVIDIA H 100'S AND THAT THEY NEED 100,000. THAT IS AN EXPENSE THAT IS IN THE HUNDREDS OF MILLIONS OF DOLLARS, IF NOT THE BILLIONS OF DOLLARS.
THAT IS WHY HE IS RAISING THIS MONEY AND THEY NEED IT. ED: THERE IS A LITTLE BACK STORY OF ALL OF THIS THAT A BLOOMBERG NEWS JANUARY 19 THAT XAI WAS IN TALKS TO RAISE FUNDS AT A VALUATION BETWEEN $15 BILLION AND $20 BILLION. $18 BILLION IS PRETTY MUCH BETWEEN THOSE.
ELON MUSK DENIED IT AND HE SAID FAKE. AND THEN THE INFORMATION CAME OUT YESTERDAY WHICH BLOOMBERG REPORTED AND HE HASN'T SAID ANYTHING YET. THE MAIN THING IS IRRESPECTIVE OF WHAT ELON MUSK SAYS, HE HAS AN ABILITY TO RAISE MONEY FOR PRETTY MUCH ANY PROJECT HE IS DOING. MAX: IT IS NOT THAT HE ONLY HAS AN
ABILITY, BUT HE HAS TO RAISE MONEY HERE. ELON MUSK IS VERY WEALTHY AS MANY PEOPLE KNOW, BUT HE IS NOT VERY LIQUID. MOST OF HIS LIQUID -- WEALTH IS TIED UP IN TESLA STOCK, SPACEX STOCK. HE DOES NOT HAVE BILLIONS OF DOLLARS. HE SPENT A LOT OF MONEY TO BUY TWITTER AND TURN IT INTO X. HE DOES NOT HAVE BILLIONS OF DOLLARS RATTLING AROUND IN HIS POCKET WITHOUT RAISING MONEY. HE NEEDS THIS IF HE HAS ANY
PRAYER TO CATCH UP TO OPENAI. INVESTORS ARE HAPPY TO GIVE IT TO HIM BECAUSE OPENAI, THESE COMPANIES, THERE ARE SOME REAL QUESTIONS ABOUT THE BUSINESS MODELS, BUT THEY HAVE BEEN ABLE TO ACHIEVE HUGE VALUATIONS, A LOT OF ADOPTIONS. TAKING A FLYER ON ELON MUSK IN THE HOTTEST CATEGORY OF BUSINESS MAKES A LOT OF SENSE FOR THE VENTURE CAPITALISTS CONSIDERING THESE DEALS. ED: AND TO HIS CREDIT, A LOT OF THESE PROJECTS DO TURN OUT TO BE PROFITABLE. HAPPY FRIDAY TO YOU, MAX. SHARES OF IBM A LITTLE LOWER, BUT THEY ARE BACKING A PROJECT IN CANADA. $730 MILLION U.S.
DOLLARS, ONE BILLION U.S. CANADIAN DOLLARS, THIS IS FOR SEMI CONDUCTORS. IT'S AN INTERESTING BET. WE HAVEN'T REALLY TALKED AS MUCH ABOUT CANADA IN THE CONTEXT OF ARE THEY GOING TO BE IN SHORING AND MAKING SOME KIND OF DOMESTIC EFFORT WHEN IT COMES TO SEMI CONDUCTORS? IBM IS DOING SOMETHING. WE WILL BE RIGHT BACK. THIS IS BLOOMBERG TECHNOLOGY. THIS IS BLOOMBERG. ♪
CAROLINE: CYBERSECURITY FIRM RUBRIC JUMPED YESTERDAY ON ITS IPO DAY AND IT IS FALLING ONTO ITS GAINS. IT RAISED ABOUT $732 MILLION ON THE BACK OF THAT IPO. ONE OF THE KEY BACKERS IS GREYLOCK. WE HAVE GREYLOCK'S PARTNER WITH US. YOU ARE AT THE STOCK EXCHANGE RINGING THE BELL AND CELEBRATING. HOW DOES IT FEEL ULTIMATELY TO SEE AN EARLY PAYOFF LIKE THAT? >> THANKS SO MUCH FOR HAVING ME. THE HONEST ANSWER WHEN YOU BACK
A COMPANY VERY EARLY, YOU DON'T REALLY FULLY KNOW WHAT LIES AHEAD. I WOULD SAY THIS COMPANY IS A STORY OF AN EXCEPTIONAL LEADERSHIP TEAM, AN EXCEPTIONAL LEADER TARGETING A VERY LARGE MARKET. EARLY ON IN THE COMPANY'S HISTORY, IT WAS VERY CLEAR THE SIZE OF THE MARKETS THEY WERE TARGETING. AND THEN THE QUALITY OF THE PEOPLE. CAROLINE: AND I THINK WHAT'S INTERESTING MORE BROADLY ABOUT THE DIRECTION OF TRAVEL WITH RUBRIK IS THEY HAVE POPPED AND INCREASED AND THERE ARE OTHER CYBERSECURITY COMPANIES IN YOUR PORTFOLIO EYING THE MARKET, BUT IT IS ALSO THE JUGGERNAUT THAT IS MICROSOFT. MICROSOFT SAID IT IS STILL MAKING STRIDES IN CYBERSECURITY INTERLACED WITH GENERATIVE AI.
HOW MUCH ROOM IS THERE FOR THE ELEMENT OF COMPETITION? >> CYBERSECURITY IS A SECULAR GROWING MARKET. THESE MARKETS HAVE BECOME VERY LARGE. IT IS ONE OF THE MOST IMPORTANT PARTS OF TECHNOLOGY.
THERE IS A LOT OF ROOM FOR MULTIPLE PROVIDERS AND MULTIPLE PIECES OF THE STACK. AND THEN RUBRIC IS AN IMPORTANT PARTNER. RUBRIC AND MICROSOFT HAVE A STRONG PARTNERSHIP. ED: I'M REALLY INTERESTED IN RUBRIC'S CLOSE RELATIONSHIP WITH MICROSOFT. THERE IS A FINANCIAL ELEMENT TO IT. GIVEN HOW AI IS PLAYING OUT, I
WONDERED IF YOU HAD A PARTICULAR THESIS ON HOW THAT RELATIONSHIP CONTINUES? ASHEEM: IT IS A MULTIFACETED RELATIONSHIP, BUT FUNDAMENTALLY WHAT MICROSOFT AND RUBRIK ARE TRYING TO DO IS PROVIDE CUSTOMERS WITH CYBER RESILIENCE AND BRING DIFFERENT PIECES TOGETHER. ED: SO, WHAT IS NEXT WITH GREYLOCK? YOU HAVE A LOT GOING ON, YOU WOULD CLAIM, I THINK, AND MANY OF YOUR COLLEAGUES HAVE SAID ON THIS SHOW THAT YOU GUYS EARLY ON GENERATIVE AI AND ORGANIZED ON GENERATIVE AI -- I WONDERED IF YOU HAVE SHARPENED YOUR FOCUSED ON ANY OTHER AREAS IN TO KILLER? -- IN PARTICULAR? ASHEEM: I HAVE BEEN AT GREYLOCK NOW A LITTLE OVER TWO DECADES AND THERE HAS NEVER BEEN A MORE EXCITING TIME FOR CAPITAL. IT HAS REALLY BECOME AN AI JOB. THERE IS THE FOUNDATION LAYER, ENABLING INFRASTRUCTURE IN THE MIDDLE, AND THEN APPLICATIONS AT THE TOP.
FOR VC BACKED STARTUPS, THERE IS A LOT OF ENABLING INFRASTRUCTURE AND ALSO IN APPLICATIONS. IT IS A SAFE STATEMENT TO SAY THAT OVER THE COMING 5-10 YEARS, YOU WILL SEE LOTS OF APPLICATIONS COMPLETELY REINVENTED WITH NEW WORKFLOWS. CAROLINE: AND YOU HAVE GOT COMPANIES IN THE PORTFOLIO ALREADY DOING THAT AND YOU CAN NAME SOME OF THE OTHER KEY AI COMPANIES THAT YOU MIGHT WANT TO ANTICIPATE COMING TO THE MARKET I'M SURE, BUT WHAT ABOUT THE COMPANIES THAT AREN'T INHERENTLY AI FOCUSED AND ARE TRYING TO BECOME SO? HOW DO YOU ADVISE THOSE? ASHEEM: I THINK ANY COMPANY THAT STARTED THREE OR FOUR YEARS AGO, THEY ARE AT RISK OF BEING COMPLETELY DISRUPTED BY A NEW START UP.
A COMPANY THAT HAS A PRODUCT LINE OR A NEWER START UP, THEY HAVE TO GO AND LOOK AT THE APPLICATION OF AI TO THEIR PRODUCT LINE AND KIND OF REIMAGINE OTHER WAYS. EITHER IN A COPILOT MODE OR THE MORE IMPORTANT IF YOU TAKE A ONE-YEAR VIEW FROM HERE, IT IS ALL ABOUT AGENT FRAMEWORKS. SO MOST COMPANIES REALLY SHOULD BE LOOKING AT HOW THESE TECHNOLOGIES REALLY APPLY. ED: IF THERE IS ONE THING CAROLINE AND I HAVE LEARNED IN THE LAST 12 MONTHS OR SO IT IS THAT NOT JUST A COMPANY IS BEING FOUNDED INCREDIBLY QUICKLY, BUT A PLATFORM OR PRODUCT IS BEING BUILT VERY QUICKLY. YOU GUYS HAVE THIS EDGE PROGRAM WHERE THAT IS WHAT YOU FACILITATE. AN IDEA FROM AN INDIVIDUAL
THROUGH TO A BUSINESS QUICKLY. JUST EXPLAIN THE PROCESS AND HOW THAT IS PLAYING OUT. ASHEEM: THANKS FOR ASKING ABOUT THAT. WE HAVE A BESPOKE COMPANY BUILDING PROGRAM AT GREYLOCK CALLED EDGE. WE ARE VERY SELECTIVE ABOUT WHO WE PICK IN THE PROGRAM.
ONCE AN ENTREPRENEUR AND GREYLOCK SELECT EACH OTHER, WE WORK CLOSELY WITH ENGINEERS AND FOUNDING TEAMS ALL THE WAY FROM MARKET SEGMENTATION TO PRODUCT STRATEGY TO INSERTION FOR INITIAL PRODUCT, WORKING WITH INITIAL CUSTOMERS, BUILDING CUSTOMER ADVISORY BOARDS, THEN OVER TIME HELPING GO TO MARKET. IT IS A VERY BESPOKE PROGRAM. MANY YEARS AGO, PALO ALTO NETWORKS STARTED IN OUR OFFICE THROUGH THAT APPROACH.
ANOTHER ONE THAT WENT PUBLIC IS SUMO LOGIC AS WELL. AND MORE RECENTLY, A COMPANY CALLED ABNORMAL SECURITY STARTED IN THAT PROCESS AS WELL. THEY HAVE RAPIDLY GROWN TO BECOME A LATE STAGE COMPANY. WE HAVE ANOTHER ONE IN THAT
PROGRAM. ED: ASHEEM CHANDNA, GREYLOCK PARTNERS, GREAT TO HAVE YOU ON THE PROGRAM. COMING UP ON THE SHOW, UBER BACKED LIME IS GOING TO GROW ITS FLEET OF SCOOTERS, ELECTRIC BIKES, IN CITIES NOT JUST HERE IN THE U.S., BUT AROUND THE WORLD. DO THOSE CITIES WANT THEM? THAT IS THE BIG QUESTION.
THAT CONVERSATION IS NEXT. THIS IS BLOOMBERG TECHNOLOGY. ED: THE OPERATOR OF SHARED ELECTRIC BIKES AND SCOOTERS LIME, WHICH IS BACKED BY THE LIKES OF UBER, IS PLANNING TO INVEST 55 MILLION DOLLARS TO EXPAND ITS FLEET GLOBALLY. JOINING US NOW IS THE LIME CEO. I FIND THIS INTERESTING BECAUSE IT IS NOT JUST SAN FRANCISCO. THE STORY AND RELATIONSHIP IS WELL TOLD, BUT YOU ARE LOOKING AT OTHER REGIONS AROUND THE WORLD. WHICH REGION'S MOST RECEPTIVE RIGHT NOW TO ADDING MORE TO THE OFFERING? >> THANK YOU FOR HAVING ME. WE ACTUALLY SEE DEMAND FROM ALL
OVER THE WORLD. LIME IS IN 30 COUNTRIES, THREE HUNDRED PLUS CITIES. THE REASON WHY CITIES ARE SO INTERESTED IS BECAUSE THE BIGGEST CHALLENGE OF OUR TIME IS THE CLIMATE CRISIS AND THE NUMBER ONE SOURCE OF CARBON POLLUTION IN EUROPE AND THE UNITED STATES IS FROM TRANSPORTATION. THE VAST MAJORITY OF THAT IS FROM PERSONAL CARS AND TRUCKS. IF WE ARE GOING TO MEET THE CHALLENGE OF CLIMATE CHANGE, WE MUST TRANSITION AWAY FROM CARS AND ADOPT TRANSPORTATION ALTERNATIVES LIKE BIKES AND SCOOTERS.
WHICH IS WHY YOU ARE SEEING CITIES ALL AROUND THE WORLD EMBRACE MICRO ABILITY. ED: I PUT A POLE OUT TO ASK, DO CITIES NEED MORE ELECTRIC SCOOTERS AND BIKES? THE MAJORITY OF RESPONDENTS SAID NO. ALMOST THE MAJORITY. IN SOME CASES, THEY VOTED FOR FEWER. THERE IS STILL FRUSTRATION AND SKEPTICISM AND DISINTEREST OUT THERE. HOW DO YOU OVERCOME IT?
WAYNE: I THINK THE BEST WAY, WE NEED TO EARN THE TRUST OF RESIDENTS AND CITY GOVERNMENTS IN ORDER TO OPERATE. I THINK THE BEST WAY TO ENSURE THAT IS TO MAKE SURE THAT OUR SCOOTERS AND BIKES ARE PARKED RESPONSIBLY, THAT WE HAVE A GREAT SAFETY RECORD, WHICH WE DO, THAT WE CONTINUE TO INVEST IN TECHNOLOGY, AND LIME BUILDS AND UPDATES EVERY SCOOTER AND BIKE WE PUT ON THE STREET TO ENSURE THAT THEY ARE THE SAFEST, BEST RIDE OUT THERE. WHEN WE CONTINUE TO DELIVER AN EXCELLENT SERVICE, WE WILL BUILD TRUST WITH CITIES TO EXPAND. CAROLINE:
YOU WERE TALKING TO A BIKE ADDICT HERE. I PREFER THE NONELECTRIC ONES. I DO IT A LOT IN NEW YORK CITY, I DO IT IN LONDON. BUT THEY ARE A MASS AND THEY ARE EVERYWHERE AND THAT IS A KEY CONCERN.
DO YOU HAVE TO SPEND MORE ON INFRASTRUCTURE TO ENSURE PLACES DO HAVE A PLACE TO PARK THEM? WHAT IS THE RESPONSIBILITY OF YOU? WAYNE: I THINK IT IS A JOINT EFFORT. LONDON HAS 2.5 MILLION CARS. THERE ARE 100 TIMES MORE CARS IN LONDON THEN ELECTRIC E BIKES.
EACH PARKING SPOT CAN FIT 6-80 BIKES. IF YOU SAY THERE IS AN OVERABUNDANCE OF CARS IN LONDON, IF ANYTHING, IF WE CAN EVEN TAKE A 10TH OF THE PARKING SPOTS IN LONDON AND TARTED INTO BIKE PARKING CORRALS, WE CAN EASILY SOLVE PARKING ISSUES IN LONDON. WE HAVE TO CONTINUE TO WORK WITH CITIES AND CITY GOVERNMENTS TO MAKE AN INFRASTRUCTURE TRANSITION TO BUILD MORE PROTECTED BIKE LANES AND MORE PLACES YOU CAN SAFELY, RESPECTFULLY PARK YOUR E BIKES. CAROLINE: YOU ARE SOMEONE BUILDING OUT AND SPENDING MONEY WHILE THINKING ABOUT PROFITABILITY. YOU PROBABLY TOOK A LEAF OUT OF THE BOOK OF UBER.
I'M INTERESTED AS TO WHAT ULTIMATELY THE GOAL IS AT THE MOMENT. DO YOU HAVE TO REMAIN PROFITABLE AT THE CURRENT MOMENT? WAYNE: 2023, LINE GREW BY 33% AND HIT OVER $600 MILLION IN GROSS BOOKINGS. MORE IMPRESSIVELY, OUR PROFITABILITY GREW TO NEARLY $100 MILLION. THAT IS ACTUALLY WHAT HAS ENABLED US TO INVEST $50 MILLION INTO SCALING E BIKES. I ABSOLUTELY THINK THAT TODAY'S PUBLIC MARKET IS DEMAND PROFITABLE. LIME IS SHOWING THAT WE CAN DO IT AS WE EXPAND PROFITABILITY AND PROFIT MARGINS. CAROLINE:
ARE YOU GOING PUBLIC SOON? WAYNE: I THINK THAT DEPENDS ON THE MACRO MARKETS AND OUR BUSINESS RESULTS. WHAT WE CAN FOCUS ON IS MAKING SURE THAT LIME CONTINUES TO GROW RAPIDLY AND EXPANDS PROFITABILITY. THE MACRO MARKET IS STILL A LITTLE BIT IFFY. YOU WERE CHATTING ABOUT RUBRIK. READ IT HAD A GOOD IPO. BUT IT IS STILL ONE STEP FORWARD AND THREE STEPS BACK. I WOULD SAY THE MARKET FOR IPO'S IS STILL A LITTLE BIT FROSTY.
WE ARE MAKING SURE WE HAVE THE BUSINESS, PROFITABILITY, AND GENERAL CONTROLS TO LIVE AS A PUBLICLY TRADED COMPANY. THE RIGHT TIME WILL DEPEND ON THE MACRO MARKETS WHICH IS OUT OF OUR CONTROL. CAROLINE: WAYNE TING, LIME'S CEO. LET'S GET BACK TO THE PUBLIC MARKETS. ED: ASTONISHING WEEK IN EARNINGS
AND NEXT WEEK IT IS ANOTHER ASTONISHING WEEK IN EARNINGS. [LAUGHTER] CAROLINE: WE HAVE HAD SO MUCH FOCUS ON AI SPEND. $40 BILLION APIECE ON AI SPEND. WHAT CAN YOU GET FROM THAT? GOOGLE OUTPERFORMS. MICROSOFT
OUTPERFORMS. THAT IS IT FOR BLOOMBERG TECHNOLOGY.
2024-04-29 02:35
