Microsoft, OpenAI and UK Regulators | Bloomberg Technology
>> FROM THE HEART OF WHERE INNOVATION, MONEY, AND POWER COLLIDED, FROM SILICON VALLEY AND BEYOND, THIS IS "BLOOMBERG TECHNOLOGY" WITH CAROLINE HYDE AND ED LUDLOW. CAROLINE: I AM CAROLINE HYDE IN NEW YORK. ED: I AM ED LUDLOW IN SAN FRANCISCO AND THIS IS "BLOOMBERG TECHNOLOGY." CAROLINE: OPENAI AND MICROSOFT PARTNERSHIP FACING ANTITRUST SCRUTINY IN THE U.K. AND THE U.S.. WE WILL BREAK DOWN THE CONCERN. ED: E.U. NEGOTIATORS CONTINUE TO DEBATE RULES FOR AI AND THE STICKING POINTS AS A BALANCE THE RISK OF ARTIFICIAL INTELLIGENCE AND POTENTIAL BENEFITS. CAROLINE:
112 -- 100 $25 MILLION INVESTED FOR NEW STAGE STARTUPS. WE SIT DOWN WITH THE FOUNDER, BUT FIRST LET US CHECK IN ON THE MARKETS, COMPLETELY FLAT ON THE NASDAQ. WE TRIED TO DIGEST THE MACRO PICTURE. A STRONG JOBS MARKET AND CONFIDENCE BUILDING.
WE ARE ONE POINT TO THE DOWNSIDE IN THE NASDAQ. WE SAW THE INJECTION ABIDING YESTERDAY. WE DO SEE BIG MOVES, 14 BASIS POINTS TO THE UPSIDE ON THE TWO YEAR. PERHAPS WE GOT A LITTLE BIT TOO EXUBERANT ABOUT THINKING WE WOULD HAVE RATE CUTS AS SOON AS MARCH. THOSE PROBABILITIES FALLING BACK. BRENT CRUDE PROP -- POPPING UP AFTER OIL HAS BEEN UNDER PRESSURE. SOME U.S.
STOCKPILES MANAGING TO PUSH UP A LITTLE BIT HIGHER. LET US LOOK ABOUT WHAT IS HAPPENING IN THE REST OF THE WORLD. OVER THE COURSE OF THE FIVE PAST TRADING DAYS, WHAT A TEAR BITCOIN HAS BEEN ON. ALREADY 3800 IS WHERE WE TRADE. BUT WHAT ABOUT MICRO DETAILS? ED: A LOT OF NEWS FLOW. ONE STORY REPORTED, TESLA,
ANOTHER EXECUTIVE HAS LEFT THE DOES SHOW -- DOJO PROJECT. 24 HOURS AGO MARK AND I REPORTED THAT THE LEAD FOR DOJO HAD LEFT AND NOW WE ARE REPORTING ANOTHER DEPARTURE. THE STARK IS -- THE STOCK IS A LITTLE SOFTER. NOT REALLY DRAWING A CAUSAL LINK. THE BIG TECHNOLOGY STORY IS MICROSOFT AND OPENAI. BLOOMBERG REPORTED THAT THE FTC
HAS OPENED A PRELIMINARY LOOK FROM AN ANTITRUST PERSPECTIVE IN MICROSOFT'S INVESTMENT IN OPENAI FOLLOWING THE U.K. CMA THAT DID AN EARLIER LOOK, INVITATION FOR THE THOUGHTS OF THE PUBLIC FOR WHAT THEY FEEL ABOUT IT. IT COULD LEAD TO A FULL-BLOWN PROBE. THIS IS IMPORTANT, DID WE SEE IT COMING? LET US START WITH THE U.K. CMA, WHAT DO WE KNOW? >> AS YOU SAY, IT IS EARLY STAGES.
BUT I THINK WE DID SEE IT COMING. WE SOUGHT EARLY SIGNS AND IT IS HARD TO KEEP UP WITH THE CMA PROCESS ON THE MICROSOFT FRONT. IT IS LESS THAN TWO MINUTES SINCE THEY CLOSED THE ACTIVISION PROBE. THEY HAVE BEEN LOOKING AT AI AND THE CLOUD MARKET.
AND IN TODAY'S STATEMENT THEY DO EXPLICITLY MENTION THE RELATIONSHIP WITH MICROSOFT AZURE AND OPENAI. REALLY INTERESTING AND INTERESTING TO SEE HOW REGULATORS ARE MAKING MOVES. CAROLINE: IT IS KINDA FASCINATING WHEN WE ARE -- WHEN WE ARE LOOKING ACROSS AT WHAT THE FTC IS EXAMINING THE NATURE OF THE INVESTMENT. WE KNOW THAT THEY PUT IN $30 MILLION IN TERMS OF OVERALL VALUATION THAT THEY HAVE CONTRIBUTED TO. WHAT THE CMA IS LOOKING AT IS WHETHER PARTICULARLY THROUGH THE GOVERNANCE SITUATION AND UNRAVELING, FIRING AND HIRING OF SAM ALTMAN, MICROSOFT HAS MORE CONTROL THAN THE LESS THAN 50% OWNERSHIP THAT THEY HAVE IN EQUITY. WHAT IS THE CMA TRYING TO APPROVE.
THOMAS: THE KEY PHRASE, AND WHEN YOU LOOK AT ANTITRUST, THERE IS A LOT OF DRY OR ARCANE PHRASES. THE KEY PHRASE IS SUBSTANTIAL LESSENING OF COMP -- OF COMPETITION. THIS IS NOT A MERGER PER SE, BUT IT IS A SUBSTANTIAL INVESTMENT. DO NOT KNOW THE TERM SHEET AND I KNOW THEY WOULD LIKE TO STAKE A LOOK AT IT. ON THE STAGE BACK IN OCTOBER I ASKED THAT VERY QUESTION, WHETHER HE WOULD LIKE TO SEE THE TERM SHEETS AND YOU COULD TELL THAT HE WOULD. HE IMPLIED THAT THEY WANTED TO
LOOK AT VERTICAL RELATIONSHIPS BETWEEN BIG TECH COMPANIES AND FOUNDATION MODELS, NOT JUST MICROSOFT OPENAI BUT SAM'S -- SUBSTANTIAL INVESTMENTS AND GOOGLE'S FULL-BLOWN TAKEOVER OF DEEP MINE. CAROLINE: THAT IS EXACTLY THE DEAL REFERENCED IN THE POST WHEN RESPONDING TO ALL OF THIS. HE SAID THIS IS DIFFERENT FROM GOOGLE'S ACQUISITION OF DEEP MINE. THEY REFERENCE THAT THE ONLY THING THAT HAS CHANGED THEY WILL NOW HAVE NONVOTING OBSERVER ON THE OPENAI. GREAT REPORTING AND ANALYSIS IN
TERMS OF WHAT IS HAPPENING. AS MENTIONED EARLIER THE FTC IS EXAMINING THE NATURE OF INVESTMENT IN THE OPENAI AS WELL. WHETHER IT WILL VIOLATE ANTITRUST LAWS ACCORDING TO A SOURCE. IT HAS NOT OPENED A FORMAL INVESTIGATION AND THE SOURCE SAYS THAT MICROSOFT DID NOT REPORT THE TRANSACTION BECAUSE THE INVESTMENT DOES NOT MOUNT THE CONTROL OF THE COMPANY UNDER U.S. COULD -- U.S. LAW. THIS SHOWS THE FRENZY WITH WHICH MANY REGULATORS ARE TRYING TO WRAP THEIR HEADS AROUND TECHNOLOGY GOAL ADVANCED -- TECHNOLOGICAL ADVANCES. LET US GO TO THE E.U. WHERE THE NEGOTIATORS ARE
TRYING TO HAMMER OUT RULES, HITTING A SNAG WHEN IT COMES TO FACE GETTING TECHNOLOGY. JULIAN DEUTSCH HAS HAD A PRETTY INTENSE WEEK. PEOPLE ARE TRYING -- OR FALLING ASLEEP AT THEIR DESKS TRYING TO GET THINGS OVER THE LINE. WHAT DO WE KNOW?
>> TODAY MARKS NINE HOURS INTO THE SECOND MARATHON ROUND OF TRYING TO GET A DEAL ON THE ARTIFICIAL INTELLIGENCE ACT AFTER NEARLY A 24 HOUR ROUND ENDED ON THURSDAY AFTERNOON WITHOUT A DEAL TO RECONVENE THIS MORNING AND IT STARTED OFF WITH A BIT OF A HITCH. LAWMAKERS WERE TOO BUSY DEBATING TO ENTER THE NEGOTIATING ROOM AND NOW WE ARE SEEING COUNTERPROPOSALS BETWEEN LAWMAKERS AND THE MEMBER STATES. EVERYONE IS BUCKLING UP FOR A LONG NIGHT. ED: AS WE PUT ON THE SCREEN, WHAT IS AT STAKE, IT WOULD BE THE FIRST COMPREHENSIVE AI LAW IF WE GET PROGRESS.
JILLIAN DEUTSCH HAS BEEN BUSY AND WILL CONTINUE TO BE BUSY. COMING UP WE WILL GET A READ ON THE HEALTH OF THE TECHNOLOGY SECTOR WHEN IT COMES TO HIRING AS PAYROLLS IN THE U.S. TOPPED ESTIMATES. THE LINKEDIN SENIOR ECONOMIST CORY KATANGA JOINS US NEXT. THIS IS BLOOMBERG TECHNOLOGY.
ED: U.S. LABOR MARKET CONTINUES TO DEFY SLOWDOWN FORECASTS AS EVIDENT IN THE PAYROLLS REPORT. THIS WEEK WE SAW SPOTIFY ANNOUNCE JOB CUTS THAT WILL IMPACT 17% OF ITS WORKFORCE. SO WHAT IS JOINING US -- SO WHAT IS GOING ON, SO JOINING US IS KORY KOTENGA. LET US GET RIGHT TO THE TECHNOLOGY SECTOR.
DO YOU HAVE ANY SORT OF MICRO FOCUS ON WHAT IS HAPPENING WITH HIRING AND FIRING THE CONTEXT OF A REALLY ROBUST JOBS REPORT? KORY: WHAT WE ARE SEEING RIGHT NOW IN THE TECHNOLOGY SECTOR ARE SIGNS OF STABILIZATION. HIRING IS DOWN PERCENT SINCE JULY WHICH IS ALSO A POSITIVE SIGN. HIRING IN TECH IS UP 3%. IT HAS BEEN ABOUT A YEAR AND A HALF IN COOLDOWN AND WE ARE FINALLY STARTING TO SEE SOME POSITIVE SIGNS IN THE HIRING MARKET. CAROLINE: WHAT ABOUT, WELL, THE OVERALL INFLATIONARY PRESSURE, THE WAVE INFLATION. WE ARE SEEING THE INCREASE OF 0.4% FOR THE HOURLY AVERAGE
EARNINGS. WE ARE SEEING PRICES OF PEOPLE AND TALENTS GO UP. KORY: IN THE JOBS REPORT WE DID SEE AN ACCELERATION AND NOMINAL WAGE GROWTH.
THAT CAN FUEL CONCERNS ABOUT INFLATION. ONE OF THE KEYS THAT THE FED THINGS TO CONCLUDE JUST A CONTROLLING INFLATION IS BRINGING DOWN NOMINAL WAGE GROWTH SO WAGES ARE NOT FEEDING INTO PRICE PRESSURES. BUT THIS MONTH'S REPORT IS A REVERSAL OF THE SLOWDOWN OF LAST MONTH. NOMINAL WAGES ARE RUNNING ABOVE WHAT THE FED WOULD LIKE. SOME OF THAT IS JUST COMING
FROM THE COMPOSITION OF THE WORK. SO, THOSE LOW WAGES ARE DROPPING OFF WHICH IS KIND OF INFLATING THE NUMBER AS WELL. ED: LOW WAGES ARE DROPPING OFF AND WHAT ARE THE HIGHER WAGES DOING. AND OF OUR FAVORITE PASTIMES IS TO LOOK AT ALL OF THE POSTINGS FOR AI RELATED JOBS AND THEN DESPAIR AT HOW WELL-PAID THOSE POTENTIAL POSTINGS ARE. NOT THAT WE ARE JEALOUS.
BUT IS AI HAVING A SERIOUS IMPACT IN THE WAY THAT THE NEWS HEADLINES WOULD HAVE YOU BELIEVE? KORY: I'M GOING TO HAVE TO LOOK AT THOSE MYSELF IF THAT IS THE CASE. SO RIGHT NOW, YOU'RE ONLY SEEING A NASCENT IMPACT ON THE JOB MARKET. ONLY ABOUT 4% OF EMPLOYERS PLAN TO MAKE CHANGES TO THEIR HEADCOUNT AS A RESULT OF THE INNOVATIONS WE HAVE SEEN. CONVERSATIONS ARE UP. WE ARE TALKING ABOUT IT.
70% HIGHER THAN LAST YEAR. PEOPLE ARE LOOKING AT JOB POSTINGS THAT SAY AI, ABOUT 70%. THAT IS COMPARED TO JOBS THAT DO NOT SAY ANYTHING ABOUT AI. A LOT OF THESE ARE NOT AI JOBS JOBS THAT MENTION AI IN THE JOB POSTING. IN PART BECAUSE WE KNOW THIS IS AN EXCITING AREA AND NOBODY WANTS TO BE LEFT BEHIND. CAROLINE:
IT IS GREAT GETTING YOUR PERSPECTIVE ON THE NUANCES WITHIN THE TECHNOLOGY SECTOR AND THE RAMIFICATIONS FROM A STURDY SET OF NUMBERS. WE THANK YOU FOR YOUR TIME. MEANWHILE, LET US GET THE MARKET IMPLICATION. WE ARE STILL PLEASED TO HAVE THE CIO, WHO REALLY HAS SUCH A GREAT VIEWPOINT ON WHEN IT COMES TO VALUATIONS.
THE TECHNOLOGY SPACE IN PARTICULAR. YOU HAVE SEEN THIS ECONOMY BEFORE. YOU SAY KEEP LOOKING AT THE 90'S, WE HAVE DONE THAT. FROM THE 90'S WITH THIS RESILIENCE YOU STILL BUY TECH? >> YOU DO. THANK YOU FOR HAVING ME, IN STUDIO. IT IS GREAT TO BE HERE. WHEN YOU LOOK BACK AT THE 90'S
YOU LEARN THAT WE CAN COEXIST OR STOCK EQUITY INVESTORS WITH HIGHER INTEREST RATES. THE 10 YEAR AVERAGED FIVE TO 8%. HIGHER LEVELS OF INFLATION, WE WERE ABOVE 3% AND A TIGHT LABOR MARKET WITH PRODUCTIVITY GROWTH. AND A NUMBER OF OTHER THINGS THAT WE PAY ATTENTION TO LIKE THE VIX, IT WAS LOW DURING THE 90'S. THESE ARE THINGS THAT HAVE BEEN BEFORE AND WE ARE STILL ABLE TO GENERATE EXCESS RETURNS.
WHERE WERE THE BEST RETURNS IN THE 90'S, TECHNOLOGY. WE ARE AT THE BEGINNING OF A NEW SUPER CYCLE. THERE IS A LOT OF REASONS TO BUY THESE NAMES. CAROLINE:
WE HAVE NOT SEEN THAT MUCH WEAKNESS IN THE MAGNIFICENT SEVEN, MAY BE A DEPTH BY THE CHIPMAKERS. WHAT ARE YOU SAYING LET US GO FOR THE MICROSOFT OR NVIDIA OR DO YOU BROADEN THAT VIEWPOINT. NANCY: WE ARE BROADENING IT. IN THE 90'S IT WAS THE FOUR HORSEMEN. AT LEAST NOW WE HAVE SEVEN. IN MICROSOFT WAS TRADING AT 51
TIMES PEAK EARNINGS AROUND 30 TIMES NOT PEAK EARNINGS. YOU WANT TO KNOW THAT -- YOU WANT TO OWN THAT NAME. I THINK I SHOT WITH METADATA, WE OWN A LITTLE BIT OF GOOGLE, WE LIKE ADOBE AND THE POOR MAN'S NVIDIA BROADCOM AND GREAT RESULTS.
THOSE ARE SOME THE PLACES WE BROUGHT INTO OUT TO ORACLE FOR COMPLETE COMPUTING PLAY. WE WERE JUST KIND OF BUYING A CHEAP CANNOT -- ECONOMY STOCK. ED: ED IS NOT THAT EASILY SHOCKED. WHAT DID CATCH MY EYE THIS YEAR I SPENT TODAY WITH AMD. THE MARKET FOR AI ACCELERATORS ONLY WILL BE $400 BILLION IN 2027. THAT IS UP FROM THE FORECAST
THAT THEY GAVE IN AUGUST IN $150 MILLION. LAST YEAR THE ENTIRE SEMICONDUCTOR MARKET, EVERY CHIP WAS $500 BILLION WHICH MAKES THIS FORECAST OF MULTI-YEAR ONGOING EXPANSION EVEN MORE AMAZING, I SUPPOSE, DO YOU SEE THE INVESTORS FOLLOWING THAT TRAJECTORY? NANCY: EVENTUALLY, YES. THE BEARS DO NOT GET TO BE IN CHARGE SO THEY ARE LOATH TO LEAVE. WE HEARD THAT THE TECH TRADE WAS OVER IN THE FALL, BUT THE PARTICULAR IN OCTOBER. WE WERE IN BUYING. AT THE END OF THE SUMMER THE STOCKS GOT PRETTY WELL TROUNCED INCLUDING THE MAGNIFICENT SEVEN. WE WROTE A PIECE THAT SAID WE
OUGHT TO BUY THIS STUFF AND WE WERE DOING THAT. THIS WILL NOT WORK FOREVER, AND THAT IS FOR SURE. THESE SUPER CYCLES CAN RUN FIVE TO 10 YEARS.
SO YOU HAVE IDENTIFIED THE TOTAL ADDRESSABLE MARKET WHICH IS CRITICAL. IT EXTENDS BEYOND CHIPS INTO SOFTWARE AS WELL. ED: THAT IS A CONVERSATION EVERY MOMENT. WHAT ABOUT ALL OF THE OTHER STUFF? JOHN HYLAND SAYING THAT IF NVIDIA IS THE CHAMPAGNE AND BROADCOM IS THE PVR BASED ON YOUR THESIS. WHAT ABOUT THE ETHERNET INFRASTRUCTURE, THE MEMORY CHIPS. DO YOU THINK THAT THAT WILL BE DISCOUNTED FOR NOW? NANCY: FOR NVIDIA SUCKING ALL OF THE AIR OUT OF THE ROOM AND THEY ARE ADDING SOME NARRATIVE TO THIS. BROADCOM IS ONLY PARTIALLY.
25% OF REVENUES AND THE BLOOD COMPUTING CHIP PART OF IT. BUT THEY HAVE VMWARE AS PART OF THE SLACK. ADOBE IS THE UNSUNG HERO. YOU ARE LOOKING FOR
OPPORTUNITIES. SERVICE NOW IS TAKING I.T. SPEND AWAY FROM SOME OF THE OTHER PROVIDERS. IN THE CLUB. SO THERE ARE A LOT OF WAYS TO PLAY THIS.
AND I THINK YOU DO NOT HAVE TO CHASE NVIDIA INSTEAD OF THE LATTER. CAROLINE: ALWAYS STRAIGHT TALKING. WE REALLY APPRECIATE IT. GREAT TO HAVE YOU HERE IN NEW YORK. MEANWHILE? ED: WE HAVE A CONVERSATION ABOUT DOC YOU SIGN AND THEN WE WILL GET THE OUTLOOK AND -- THE OUTLOOK WITH THE CEO ON THE PROGRAM. TSMC, UP .4%. IT IS SO WEIRD. NOVEMBER DATA FOR SALES IS NOT
GOOD. OCTOBER HAD BEEN GOOD. DOWN THE FIRST 11 MONTHS OF THE YEAR. WE HAVE NO HARD GAUGE OF WHAT IS GOING ON WITH THIS CHIP INDUSTRY.
IF WE BUT DOWN IN SOME AREAS WE ARE SINKING IN OTHERS. CAROLINE: TIME FOR TALKING TECH. AN INDIAN CONGLOMERATE IS PLANNING TO BUILD ONE OF THE LARGEST IPHONE ASSEMBLY PLANTS WITH ABOUT 20% -- 20 ASSEMBLY LINES AND WILL EMPLOY 20,000 WORKERS. TATA WOULD BOLSTER EFFORTS TO INCREASE PRODUCTION IN INDIA. TENCENT IS BETTING ON ITS KNOW -- ITS NEW OPEN WORLD ADVENTURE GAME. THE LAST SENTINEL WAS UNVEILED DURING THE 2023 GAME AWARDS. LAST SENTINEL WAS DEVELOPED BY
THE CALIFORNIA BASED LIGHTSPEED STUDIO. NO WORD ON THE RELEASE DATE. PLUS BROADCOM SAYS IT EXPECTS THE RAPID EXPANSION FOR AI COMPUTING TO HAVE ITS WORST SLOW DOWN SINCE 2020.
THEY REFERRED TO AI AS A BRIGHT SPOT FOR THE CHIPMAKER WHICH EXPECTS SALES TO GROW MORE THAN 25% IN 2024. THIS WAS THE FIRST CALLING REPORT AFTER THE ACQUISITION OF VMWARE. ED: DOC YOU SIGN OUT WITH RESULTS BEATING EXPECTATIONS. BUT ALSO OFFERING A MARGIN OUTLOOK THAT WAS SEEN AS CAUTIOUS BY SOME OUT -- BY SOME ANALYSTS. NOW JOINING US IS THE DOC YOU SIGN CEO. DOCUMENT GENERATION, E-SIGNATURE, GREAT YOU SET --
GREAT RESULTS. YOU ARE UP 4% AND THE ANALYSIS IS SAYING GIVE US A LITTLE BIT MORE ON THE MARGIN OUTLOOK. WHY ARE YOU SO CONSERVATIVE? ALLAN: WE HAVE SET -- WE HAVE SHOWN THAT WE HAVE TRADE OPERATING SUFFICIENCY. BUT, WE STILL HAVE GROWTH AMBITIONS AS WELL. WE ARE BALANCING OUR INVESTMENT AND ROADMAP WITH CONTINUING NEW OPERATING EFFICIENCIES. ED: MOST OF OUR AUDIENCE WOULD KNOW DOCUSIGN, SOMEONE SENT YOU SOMETHING AND YOU SIGN IT, DONE AND DUSTED. WHAT IS THE TECHNOLOGY STORY?
YOU TALKED ABOUT GROWTH BUT GROWTH UNTIL WHAT? ALLAN: HISTORICALLY WE PIONEERED E-SIGNATURE AND THAT CONTINUES TO BE THE MAJORITY OF OUR BUSINESS. IN THE LAST SEVERAL YEARS WE HAVE BEEN INVESTING IN HELPING COMPANIES MANAGE AGREEMENTS FROM DEVELOPMENTS, EDITING, NEGOTIATING, SETTLING, SIGNING, AND THEN ONCE YOU HAVE THE SIGNED AGREEMENTS, WHAT ARE YOU DOING WITH THEM AND HOW ARE YOU PERFORMING AGAINST OBLIGATIONS AND HOW WOULD YOU LIKE TO RENEGOTIATE. THAT WHOLE SWEEP WE CALL AGREEMENT MANAGEMENT AND WE DELIVER VARIOUS PIECES AND WE ARE PUTTING THE WHOLE THING TOGETHER. CAROLINE: MORGAN STANLEY ANALYST TALKING ABOUT DECELERATING TRENDS WHICH YOU TRY TO COUNTERACT WITH THIS STORY AND THE FOCUS ON A BROADER AGREEMENT. WHAT DOES THE MACROECONOMY PAINT FOR YOU AND YOUR CUSTOMERS? ALLAN: I WOULD SAY A CAUTIOUS OUTLOOK. OUR OUTLOOK REFLECTS WHAT WE SEE RIGHT NOW.
BUT I WOULD SAY THAT TO HAVE THE ENTERPRISE SPEND IN THAT AREA IS STEADY. CERTAINLY TO THE EXTENT THAT THE MACRO ENVIRONMENT INTEREST RATES IMPROVE AND THAT WILL BE VERY HELPFUL. WE ARE NOT PROJECTING THAT YET. I WOULD SAY THAT WE ARE IN A STABLE ENVIRONMENT AND WE ARE NOT FALLING ANYMORE. CAROLINE: YOUR BACKGROUND BEFORE DOCUSIGN -- BEFORE DOCUSIGN, GOOGLE AND BEFORE GOOGLE YOU WERE INVESTING IN STARTUPS. WHAT IS IT THAT YOU HAVE MANAGED TO DO BECAUSE MANY WOULD REFLECT THAT YOU ARE MANAGED TO CONTAIN COSTS AND YOU ARE DOING THIS EXPANSION WITHOUT BRINGING UP THE COST OF BUSINESS. HOW ARE YOU RINGING THE PLAYBOOK FROM BEFORE TO YOUR BUSINESS NOW? ALLAN: I SPENT THE EARLY PART OF MY CAREER IN START OFFS -- STARTUPS AND THEN AN ACTIVE VENTURE INVESTOR. I STILL LOOK FOR OPPORTUNITY
GROWTH AND THAT IS WHAT EXCITES ME AND ABOUT THE DOCUSIGN OPPORTUNITY. I LOOK FOR OPPORTUNITIES TO INVEST IN NEW GROWTH AREAS. AT THE SAME TIME I HAVE SEEN THE SCALE AT GOOGLE AND SOME OF THE THINGS THAT STRUCK ME AS I LOOKED AT DOCUSIGN COMING IN WAS FOR EXAMPLE, WE WERE TAKING ORDERS THROUGH HUMANS FOR THE VAST MAJORITY OF OUR BUSINESS WHEN AT GOOGLE, IF AN ADVERTISER SPENT $100 OR $100 MILLION THEY PLACE THEIR ORDERS ON THE SYSTEM.
I FELT LIKE THERE WERE OPPORTUNITIES TO IMPROVE OUR SERVICES. AND WE ARE IN THE MIDST OF DOING THAT. ED: I'M GOING TO DO IT AND ASK IT. WHAT IS THE DOCUSIGN AI STORY, IF THERE IS ONE? ALLAN: I THINK WE HAVE A GREAT STORY AND I KNOW THAT ALL OF THEM SAY THAT. IF YOU THINK ABOUT AGREEMENTS,
HISTORICALLY THE WAY COMPANIES TREATED AGREEMENTS IS THAT THEY ARE DUMB AND FLAT FILES. YOU MIGHT HAVE DIGITIZED THEM BUT WE CAN STILL BARELY FIND THEM OR WHAT IS IN IT. THE BEAUTY OF AI IS THAT IT ALLOWS IT TO US -- TO EXTRACT THE DATA AND THEN YOU CAN MEASURE THE AGREEMENTS VERSUS THE ACTUAL PERFORMANCE AS WELL AS OTHER AGREEMENTS WITH SIMILAR ENTITIES. WE ARE THE PROCESS OF BUILDING
THAT OUT AND WE HAVE ACTIVE TRIALS WITH A NUMBER OF LARGE COMPANIES. WE BUILT A SANDBOX WHERE THEY CAN TRY THIS OUT. THE AGREEMENT SPACE IS PARTICULARLY WELL-PLACED. WE ARE FAR BY LARGEST PLAYER IN THE AGREEMENT SPACE WITH A MILLION A HALF COMPANIES PAYING US INTO A GREAT POSITION. ED: IT WAS GREAT TO CATCH UP, WHAT HAVE YOU GOT? CAROLINE: WE HAVE A GREAT CONVERSATION COMING UP. WE HAVE SOME GROUNDBREAKING
TREATMENT. ED: WELCOME BACK TO BLOOMBERG TECHNOLOGY. ED LUDLOW IN SAN FRANCISCO. CAROLINE: LET US GET A CHECK IN ON THE MARKETS. WE ACTUALLY SEE A LITTLE BIT OF CAUTIOUS BUYING. WE ARE UP .10%. WE HAD A LOT OF EXUBERANCE. THE TWO YEAR YIELD IS SHOWING
SIGNIFICANT SELLOFF ACROSS THE CURVE ON SELLING OFF BECAUSE THE GOOD NEWS IS BAD NEWS IN TERMS OF THE STRENGTH OF THE U.S. ECONOMY. THE JOBS DATA SHOWING GROWTH RESILIENCE AND THAT COMING DOWN MEANING THAT THE FEDERAL RESERVE WILL KEEP RATES A LITTLE BIT HIGHER THAN LONGER. AND CERTAINLY THE CONFIDENCE COMING FROM THE CONSUMER.
AND A LITTLE BIT BITCOIN MANAGED TO SHRUG OFF ISSUES WITH THE BOND MARKET. WE WILL LOOK AT SOME OF THE INDIVIDUAL MOVERS. I AM LOOKING AT ALPHABET PULLING BACK ON THE RUNOFF. IT DID MANAGE TO PUSH HIGHER ON THE BACK WITH THE GEMINI ANNOUNCEMENT.
OUR OPINION ON -- OUR OPINION WRITER SAYING THAT THIS LAGS OPENAI AND SOME OF THOSE VIDEO AND MARKETING TOOLS WERE NOT WHAT THEY WERE CRACKED UP TO BE. NVIDIA ON THE HIGHER SIDE AT ALMOST 2%. THE EXUBERANCE IS PULLING BACK A LITTLE BIT.
TSMC NOT POINTING TO TWO MUCH RESILIENCE BUT NVIDIA GETS A LITTLE BIT ABIDING. I AM LOOKING AT PARAMOUNT'S, QUITE A BIT ABIDING. WILL THE STUDIOS BE BOUGHT, AS IT ON OFFER. WE ARE SEEING RED BURN CAPITAL AND POTENTIALLY EYEING THIS PARTICULAR COMPANY AND THAT IS WHAT "DEADLINE" IS REPORTING BUT PEOPLE ARE BUYING ON THAT RUMOR. ED: A BIG STORY. A GENE EDITING TREATMENT FOR SICKLE CELL DISEASE BASED ON THE CRISPER TECHNOLOGY WAS APPROVED BY U.S. REGULATORS MARKING THE FIRST TIME THE TECHNOLOGY CAN BE USED IN THE U.S..
CRISPR USES PRECISELY TARGETED CHANGES IN DNA TO REPAIR FLAWS IN THE GENOMES RELATED TO INHERITED DISEASE. IF APPROVED IT WOULD BE THE FIRST TIME THIS TECHNOLOGY CAN BE USED IN PATIENTS IN AMERICA. THE TREATMENT IS OFFERED BY VERTEX PHARMACEUTICALS AND CRISPR THERAPEUTICS. THERE WERE INTERESTING RESPONSES ON THE NEWS BROKE. YOU CAN SEE THE NAMES LOWER IN U.S. TRADING. JENNIFER IS A BIOCHEMIST AT THE UNIVERSITY OF CALIFORNIA BERKELEY AND POWELL -- AND PIONEERED THE CRISPR TECHNOLOGY WHICH LED TO HER WINNING THE 2020 NOBEL PRIZE IN CHEMISTRY ALONG WITH HER COLLABORATOR. JENNIFER JOINS US NOW.
I ASK YOU TO JUST GIVE YOUR REACTION TO THE NEWS THAT WE OUTLINED. JENNIFER: I AM JUST AMAZED. IT IS 11 YEARS FROM A FUNDAMENTAL DISCOVERY IN SCIENCE TO AN APPROVED THERAPEUTIC. THAT IS EXTRAORDINARY SPEED AND THANKS TO THE MANY PEOPLE WHO CONTRIBUTED TO MAKE THAT POSSIBLE. ED: I POSTED ON THE NEW -- ON THE NEWS AND I WAS SURPRISED BY THE NUMBER OF PEOPLE WHO WERE IMPACTED BY SICKLE-CELL DISEASE EITHER A FAMILY MEMBER OR SOMEONE THAT THEY KNOW. COULD YOU EXPLAIN THE BASICS OF HOW THIS WOULD WORK? JENNIFER: SICKLE-CELL DISEASE IS A HUMAN CONDITION THAT RESULTS FROM A SINGLE GENE IN OUR DNA.
IT IS DEFECTIVE AND THEY HAVE TWO COPIES OF THE GENE AND THEN THEY HAVE TERRIBLE SYMPTOMS, PAIN AND IT SHORTENS THEIR LIFESPAN. IT IS REALLY DEVASTATING. AND WHAT CRISPR OFFERS IS FOR SOME PATIENTS THE OPPORTUNITY TO HAVE A TREATMENT THAT IS EFFECTIVELY A CURE. THEY GET A ONE AND DONE THERAPY THAT REMOVES THE SYMPTOMS FOR THE REST OF THEIR LIFE. CAROLINE: I AM INTERESTED IN THE APPLICATION.
AND ULTIMATELY, HOW QUICKLY THIS CAN BE IN THE HANDS OF PATIENTS AND REALLY FROM AN ECONOMIC PERSPECTIVE, AND QUALITY PERSPECTIVE IN THE HANDS OF PATIENTS WHEN IT IS LIKELY TO BE VERY EXPENSIVE. JENNIFER: YOU BRING UP AN IMPORTANT POINT WHICH IS A REASON WE ARE WORKING HARD AT THE GENOMICS INSTITUTE AT THE UNIVERSITY OF CALIFORNIA TO ENSURE THAT THIS TYPE OF THERAPY BECOMES WIDELY AVAILABLE AND AFFORDABLE BECAUSE IT IS AN EXPENSIVE TREATMENT RIGHT NOW AND IT INVOLVES WEEKS OF HOSPITALIZATION TO DELIVER THE THERAPY. WE WANT TO FIGURE OUT WAYS TO HAVE NEW TECHNOLOGIES ENTER SECTIONING -- INTERSECTING WITH GENOME EDITING AND MAKING IT MORE AVAILABLE TO PEOPLE WORLDWIDE. CAROLINE: TALKING WORLDWIDE, THE U.K. REGULATORS SIGNED OFF THE USE OF CRISPR. HOW DO YOU THINK THIS WILL
BECOME A GLOBAL STORY AND HOW DO YOU THINK IT WILL EVOLVE TO HELP OTHER DISEASES THAT CURRENTLY AFFECT AND ARE PASSED DOWN THROUGH THE GENERATIONS? JENNIFER: HERE IS A VERY EXCITING THING ABOUT CRISPR. IT IS A THERAPEUTIC THAT CAN BE PROGRAMMED FOR DIFFERENT DISEASES. NOW THAT WE SEE THE PATH FORWARD WITH SICKLE-CELL DISEASE IT IS REALLY THE BEGINNING OF WHAT I THINK WILL BE A NEW ERA IN MEDICINE WHERE WE HAVE IN THE FUTURE FEWER GENETIC DISORDERS AND ALSO PREVENTATIVE TREATMENTS AS A RESULT OF MODIFYING OUR GENES. ED: THE SUPPLY CHAIN FOR THESE TREATMENTS IS COMPLICATED. WE COVERED THE IDEA THAT YOU DO A LOT OF THE R&D AND PRELIMINARY MANUFACTURING PLANNING FOR ITS PREAPPROVAL.
YOU HAVE CONFIDENCE THAT THERE WILL BE A SORT OF AVAILABILITY OF TREATMENTS FOR THOSE WHO NEED THEM BASED ON THE MARKET'S ABILITY TO MAKE AND PROVIDE THEM? JENNIFER: I DO. IT WILL NOT HAPPEN OVERNIGHT BUT THERE IS ENORMOUS EFFORT IN NONPROFITS AND MANY COMPANIES TO ENSURE THAT THERE WILL BE SUPPLY CHAIN BENEFITS FROM THIS THAT WE WILL BE ABLE TO FIGURE OUT HOW TO GET THESE PRODUCTS MADE IN THE QUANTITIES THAT ARE NEEDED. OVER TIME, AND IT WILL TAKE TIME THEY ARE GOING TO BE SOME STREAMLINING PROCESSES THAT WILL ADVANCE THE THERAPY IS AND MAKE IT MORE AND MORE AVAILABLE TO PEOPLE AROUND THE WORLD. ED:
WE OUTLINED YOUR 2020 NOBEL PRIZE AWARD, THE WORK THAT YOU HAVE DONE. IS THERE WORK AT LEAST AT THE INTERSECTION OF ACADEMIA AND BIOTECHNOLOGY THAT STILL NEEDS TO BE DONE? IF SO, WHAT NEEDS TO BE DONE RIGHT NOW? JENNIFER: AS I WAS DRIVING TO WORK THIS MORNING I WAS THINKING THIS IS AN EXCITING DAY, BUT IT IS ALSO THE VERY BEGINNING. THERE IS A LOT OF WORK TO BE DONE. WE NEED TO REALLY WORK HARD TO FIGURE OUT HOW TO, AS WE DISCUSSED, MAKE THESE THERAPIES MORE WIDELY AVAILABLE AND BRING DOWN THE COST. THAT WILL BE A COMBINATION OF TECHNICAL DEVELOPMENTS AS WELL AS WORKING WITH REGULATORS AND PATIENT ADVOCACY -- ADVOCACY GROUPS AND HOW TO APPROPRIATELY PARTNER BETWEEN ACADEMICS AND COMPANIES TO CONTROL THE COST IN A WAY THAT WILL MAKE THIS BENEFIT AVAILABLE TO MANY. CAROLINE: AND YOU DO THAT. YOU ARE THE GO-BETWEEN BETWEEN
ACADEMIA AND HELPING COMPANIES. CRISPR, THE COMPANY THAT HAS A $5 BILLION MARKET CAPITALIZATION. VERTEX IS $90 MILLION. THEY CAN PUT IN THE R&D SPEND. WHAT ABOUT THE MONEY ALLOCATED
TO THE FIELD OF WORK AT THE MOMENT AND WHERE IS IT NECESSARY TO COME FROM? JENNIFER: IT COMES FROM VARIOUS SOURCES, INVESTORS ARE PLAYING A BIG ROLE. WE ARE ALSO SEEING BIG INPUT FROM THE GOVERNMENT. YOU MIGHT KNOW THE NATIONAL HAS A MAJOR EFFORT THROUGH THE ADVANCED GENE EDITING IN THE CONTEXT OF GENE AND CELL THERAPY. WE HAVE OTHER NONPROFIT ORGANIZATIONS THAT DO PHILANTHROPIC SUPPORT. THE GATES FOUNDATION COMES TO
MIND BUT THERE ARE OTHERS THAT ARE SUPPORTING THIS. THERE IS A LOT OF EFFORT AND MANY PEOPLE APPRECIATE THE GENOME EDITING TO IMPACT MANY PEOPLE IF WE COULD REALLY FIGURE OUT HOW TO REDUCE COSTS AND MAKE THESE WIDELY AVAILABLE THERAPIES. MAKE THEM AVAILABLE FOR PEOPLE AROUND THE WORLD. CAROLINE:
BACK IN 2020 THE WORLD WAS IN A DIFFERENT PLACE AND OPTIMISM AROUND LEAPS AND BOUNDS OF CREATIVITY AND TECHNOLOGICAL DEVELOPMENT AND SCIENCE IN PARTICULAR WAS VERY PARTICULAR. IT FEELS LIKE 2023, ALL OF THE OXYGEN HAS BEEN DRAGGED OUT WHEN IT COMES TO AI AND GENERATIVE AI. THERE IS A LOT OF DISCUSSION ABOUT SAFETY AND THAT IS A BIG POINT FOR YOU. HOW ARE YOU THINKING ABOUT THE APPLICATION OF CRISPR TECHNOLOGIES AND ENSURING THAT THIS IS ROLLED OUT IN THE SAFEST MANNER QUOTE -- SAFEST MANNER POSSIBLE? JENNIFER: THIS IS ONE OF OUR FOUNDING PRINCIPLES, ENSURING SAFETY AND RESPONSIBILITY AS CRISPR CONTINUES TO ADVANCE.
I THINK FOR ME, IT IS ONE OF THE QUESTIONS REGARDING ETHICS IS REALLY ABOUT EQUITY. AND WE HAVE TOUCHED ON THAT A LOT IN THIS CONVERSATION. VERY IMPORTANT. WE HAVE TO CONTINUE TO THINK ABOUT SAFETY AND EFFECTIVENESS OF THE THERAPY IS. AND TO FIGURE OUT HOW TO WORK
WITH REGULATORS TO ENSURE THAT WE HAVE A PROCESS FOR TESTING THE SAFETY AND THAT WE ADVANCE THE THERAPY AS QUICKLY AS WE CAN TO HELP PATIENTS. IT IS A DELICATE BALANCE. ED: I WANT TO RETURN TO THE IDEA THAT IF SICKLE-CELL IS THE START, WHAT IS THE NEXT STEP? WHAT IS THE NEXT BREAKTHROUGH THAT COULD HELP HUMANKIND? JENNIFER: I AM EXCITED ABOUT A COUPLE OF THINGS. I THINK CERTAINLY ADVANCING THE GENOME EDITING APPROACH INTO OTHER TYPES OF TISSUES WILL BE IMPORTANT AND WE ARE SEEING SOME GREAT PROGRESS IN TERMS OF LIVER DISEASE, WORK BEING DONE BY A COMPANY THAT I AM A FOUNDER OF, ALTHOUGH I DID NOT DO ANY OF THE SCIENCE THAT THEY ARE DOING. THEY SHOWED EFFECTIVENESS IN TREATING RARE LIVER DISEASES USING CRISPR GENOME EDITING. THEY ARE DELIVERING THE
MOLECULES DIRECTLY INTO PATIENTS WITHOUT REQUIRING A BONE MARROW TRANSPLANT WHICH IS REQUIRED FOR THE SICKLE-CELL TREATMENT. THERE IS ALSO WORK IN THE FUTURE TO PROVIDE PROTECTIVE MEDICINE FOR PEOPLE WHO HAVE GENES THAT MIGHT MAKE THEM SUSCEPTIBLE TO CARDIOVASCULAR DISEASE FOR EXAMPLE. THAT IS WHERE COMING OUT OF A COMPANY CALLED VERVE. I THINK THOSE ARE REALLY EXCITING DEVELOPMENTS IN THE FIELD GOING FORWARD. CAROLINE: AND DEVELOPMENTS THAT YOU HELP DRIVE.
WE APPRECIATE YOU MAKING TIME FOR US ON THIS MILESTONE. THE FOUNDER OF THE ABDOMEN GENOMICS -- INHABIT ATTENTIVE --INEVIATIVE GENOMICS COMPANY. LET US TALK ABOUT HARPOON VENTURES BACKING EARLY-STAGE STARTUPS. WE WILL TALK ABOUT WHERE THAT MONEY IS BEING ALLOCATED. THIS IS BLOOMBERG TECHNOLOGY. ED: IT IS TIME FOR THE VC ROUND UP.
AIRSPACE INTELLIGENCE, AND AIRSPACE STARTUP IS STARTING FUNDRAISING TO MORE AGGRESSIVELY PURSUE DEALS WITH THE U.S. DEPARTMENT OF DEFENSE. THE NEW FINANCING BRINGS A GOOD CHUNK OF CHANGE TO THE EQUATION. A GROUP OF SAM ALTMAN BACKED STARTUP HAS LAUNCHED A PRIVATE BITCOIN FUND. ADVISORS ACCORDING TO NEW REPORTS, THE FUND IS TARGETING A 5% BITCOIN DENOMINATED YIELD LIGHT LENDING BITCOIN TO BORROWERS. PLUS HARPER -- HARPOON VENTURES HAS RAISED 125 MILLION DOLLARS FOR A NEW FUND TO BACK EARLY-STAGE ENTERPRISE STARTUPS SERVING THE PUBLIC AND PRIVATE SECTORS. CAROLINE: LET US TAKE INTO THAT STORY. LET US BRING IN THE FOUNDER
LARSON JENSEN FOR THE VC SPOTLIGHT. THE MONEY, THE REPEATABILITY TO RAISE MONEY, WHAT IS IT THAT BRINGS LP'S BACK AND YOU HAVE -- AND HAVE YOU ATTRACTED NEW ONES? LARSEN: IT IS A PLEASURE AND I APPRECIATE THE TIME. IT IS A TESTAMENT TO WHAT WE HAVE BUILT. WHEN WE STARTED YEARS AGO WE WERE THE FIRST TO OBSERVE THAT EMERGING TECHNOLOGY AND STARTUPS, WOULD HAVE FURTHER REACHING IMPLICATIONS MEANING MORE SPECIFICALLY THAT THEY WOULD HAVE NATIONAL SECURITY AND GEOPOLITICAL IMPLICATIONS THAT THEY HAD NOT UNTIL THIS CURRENT ERA. WE SEE THIS RECENTLY BY THE
ANNOUNCEMENT OF CHINESE ESPIONAGE AND PRESIDENT BIDEN'S EXECUTIVE ORDER ON ARTIFICIAL INTELLIGENCE AND WITHIN OUR PORTFOLIO. AS WE THINK ABOUT THE LP'S, THE REPEAT ONES THAT HAVE BEEN WITH US AND WE HAVE THE -- WE HAVE CERTAINLY BROUGHT ON SOME NEW ONES THAT IT IS NO SECRET THAT LP'S ARE STRUGGLING DUE TO THE DENOMINATOR EFFECTS AND BEING OVER ALLOCATED TO PRIVATE INVESTMENTS, BROADLY SPEAKING. WHAT WE HAS BUILT IS A TESTAMENT TO OUR PROGRESS. CAROLINE: WHAT HAS BEEN INTERESTING IS THAT YOU RAISE THIS AT A TIME WHEN THERE IS A LOT OF HANDWRINGING AROUND ARTIFICIAL INTELLIGENCE AND FUTURE REGULATIONS. THE E.U. TRYING TO GET TOGETHER THE AI ACT. IT IS INTERESTING THAT MANY OF THESE COUNTRIES -- COMPANIES ARE IN THE AREA OF SAFETY IN AI.
HOW HAVE YOU DETERMINED THE WHEAT FROM THE CHAFF? LARSEN: IT IS DIFFICULT TO DO BECAUSE THE SPACE IS CHANGING DRASTICALLY. WHEN WE THINK ABOUT WHAT WE ARE INVESTING IN, WE ARE LOOKING AT THE FIRST PRINCIPLE STANDPOINT WHERE WE HAVE DOMAIN EXPERT TECHNOLOGISTS THAT HAVE A DEFENSIBLE TECHNOLOGY WITH SERIAL ENTREPRENEURS AND ARE VERY CUSTOMER OBSESSED. WE THINK THAT THERE IS NO GREATER GAUGE THAN TORQUING TO THE -- TALKING TO THE EARLY CUSTOMERS TO UNDERSTAND THE PAIN POINTS AND BUDGETS AND ALIGN THOSE WITH INVESTMENT DECISIONS. ED: REALLY INTERESTED AS AN EXAMPLE AS A TARGET COMPANY OR PORTFOLIO COMPANY. THEY ARE A SECTION OF THE VC
COMMUNITY THAT SAYS OUR PORTFOLIO COMPANIES HAVE A LOT OF ACCESS TO THE COMPANY PORTFOLIO. DOES THAT MAKE FOR A POTENTIAL INVESTOR FOR YOU GUYS? LARSEN: THE WAY WE PUT IT, IT NEEDS TO BE DUAL USE. WE NEED A LARGE ADDRESSABLE MARKET IN THE END APPLIES.
-- ENTERPRISE. THEY ARE SELLING PREDOMINANTLY TO INTERNET SERVICE PROVIDERS. OUR THESIS WAS TO DO BUSINESS WITH UNCLE SAM AS WELL WHICH IS A LARGE-SCALE AND DURABLE MARKET. AND IT REALLY SHOULD INCREASE THE POSSIBLE OUTCOME OF WHAT THAT COMPANY CAN DO. ED: WHAT WAS THE EXPERIENCE OF RAISING THE FUND, HOW LONG DID IT TAKE? WAS IT CHALLENGING OR EASY? ARE YOU DOING THE PUSHING? LARSEN: I THINK THIS YEAR IT WAS NO SECRET THAT IT WAS MORE DIFFICULT THAN 2021. IN 2021 INVESTORS AND ALLOCATORS WERE JUMPING BOTH FEET INTO THE POOL OR DIVING INTO THE POOL OF VENTURE CAPITAL LED BY LARGE-SCALE IPOS AND GETTING CASH BACK FOR THEM TO REDEPLOY.
THE IPO WINDOW HAS BEEN EFFECTIVELY SHUT SINCE THEN. IT REALLY PUTS ALLOCATORS IN A LITTLE BIT OF A BIND AS TO WHERE THEY ALLOCATE THAT DOLLAR. AND IT IS NO SECRET THAT THE OPPORTUNITY COST HAS GONE UP. MANY OF THE INSTITUTIONAL INVESTORS HAVE AN 8% TARGET ON THE OVERARCHING ENDOWMENT OR FOUNDATION AND NOW YOU CAN GET THAT NOT RISK-FREE BUT MORE SO THAN ALLOCATING TO LONGER HORIZON ASSET CLASSES LIKE VENTURE CAPITAL. IT TOOK LONGER BUT WE ARE
FORTUNATE TO HAVE DURABLE CAPITAL PARTNERS THAT HAVE WORKED WITH US AND THE MAJORITY OF WHICH HAS STEPPED UP TO THE PLATE. CAROLINE: YOU MENTION THE WORD POOL, AND TO ASK A PERSONAL QUESTION BECAUSE MANY PEOPLE WILL RECOGNIZE YOU FOR THE FACT YOU HAVE TWO OLYMPIC MEDALS, AND YOU ARE DEEPLY INVOLVED IN JUMPING INTO THE SEA. I AM INTERESTED IN HOW THAT MENTALITY HAS AFFECTED THE WAY YOU RAISE MONEY OR ALLOCATE AND DO BUSINESS OR DOES IT MAKE, BECAUSE PEOPLE KNOW WHO YOU ARE THAT MORE WILLING TO INVEST? LARSEN: IT IS A COMBINATION. AND I THINK THE RAW INGREDIENTS THAT I USED AS A YOUNG SWIMMER GOING FROM HIGH SCHOOL INTO PROFESSIONAL SWIMMING IN THE OLYMPICS ARE THE INGREDIENTS OF WAKING IT UP EARLY AND INVESTING IN MYSELF FOR DECADES IN ORDER TO MAKE AN OLYMPIC APPEARANCE. I THINK INVESTING IN VENTURE CAPITAL IS SIMILAR IN A SENSE THAT YOU CANNOT CONTROL THE OUTPUT BUT YOU CAN CONTROL THE INPUT.
YOU CAN CONTROL DAY IN OR OUT IF YOU WILL BE THE FIRST IN THE POOL OR THE LAST OUT AND THAT IS THE EFFORT WE EXPECT OF OUR TEAM AND FOUNDERS AND THAT IS WHAT WE BRING TO BEAR. CAROLINE: STILL A RECORDHOLDER IN 400 METER FREESTYLE AND ASK NAVY SEAL. LARSON JENSEN, AND WHAT WHAT HAVE WE GOT COMING UP? ED: DIVING RIGHT INTO WHAT IS COMING UP. GOODBYE LUXURY CARS AND EXTRAVAGANT DINNERS.
THIS IS A NEW ERA FOR SALESFORCE. WE BREAK DOWN THE LATEST EDITION OF BLOOMBERG BUSINESSWEEK WHICH LOOKS AT A NEW MODEL FOR SILICON VALLEY. THIS IS BLOOMBERG TECHNOLOGY. ♪ CAROLINE: THE LATEST EDITION OF "BLOOMBERG BUSINESSWEEK" DIVES INTO SALESFORCE WHICH WAS HARSHER THAN PRE-PANDEMIC WHICH IS IMPACTING TECH FOR DUST FIRMS. THE ERA OF $800 DINNERS AND LUXURY CAR BONUSES IS OVER AS SALESFORCE. LET US BRING IN BRODIE FORD.
IT IS A GREAT STORY AND YOU LOOK AT ONE PARTICULAR INDIVIDUAL'S RISE WITHIN THE ROLE AND HOW MUCH SHE WAS WINNING AND BRINGING IN. WHAT HAS CHANGED AT CRM? BRODY: THERE WAS A WILD WHEN SALESFORCE AND THE INDUSTRY AT LARGE IF YOU SHUT UP AND HAD A NICE SMILE YOU COULD MAKE 400 K. SOFTWARE WAS FLYING OFF THE SHELVES. ENTIRE INDUSTRIES HAD TO DIGITIZE.
THERE WAS THIS GOLDEN ERA OF THESE SOFTWARE COMPANIES BECAUSE THERE WERE SO MANY CUSTOMERS. OBVIOUSLY INTEREST RATES HAVE GONE UP. THE ECONOMIC PICTURE IS DIFFERENT AND COMPANIES ARE SAY AND HOW DID WE SPEND SO MUCH MONEY ON SOFTWARE WHICH HAS CAUSED COMPANIES TO SAY WE ACTUALLY NEED TO CUT COSTS. WHERE ARE THE COSTS?
THE SALESPEOPLE. THE JOB GETS HARDER. ED: YOU HAVE A SHOT OUT FROM MARC BENIOFF, THE CEO WHO SAYS " YOU KNOW AND I KNOW WHEN YOU WRITE ABOUT THESE COMPANIES IT CAN GO ONE WAY OR ANOTHER. HE SEEMED TO AGREE WITH THE THESIS IN YOUR PIECE. BRODY: I THINK THEY NEED -- THEY KNOW THEY NEED TO BE SEEN AS THE BAD GUY.
THEY HAD ALL OF THESE INVESTORS A YEAR AGO SAYING YOU ARE NOT RAISING PROFIT MARGINS QUICKLY ENOUGH. THIS ESSENTIALLY SHOWS WHAT IT LOOKS LIKE WHEN YOU RAISE YOUR PROFIT MARGINS 10 PERCENTAGE POINTS IN SIX MONTHS, THINGS GET HARDER. SALESFORCE IS AWARE THAT THEY NEED TO BE DOING THAT AND THEY ARE HAPPY TO SEE IT EXPLAINED. CAROLINE: YOU GO INTO DETAIL THAT BENIOFF IS A NATURAL SALESMAN. WHAT TALENT ARE THEY FOCUSING
IN ON. IF IT IS NOT A NICE SMILE, WHAT DO THEY HAVE TO BRING TO THE TABLE AND HOW IS THAT READING ACROSS THE REST OF THE COMMUNITY? BRODY: WE STILL HAVE SALESPEOPLE BUT THEY ARE NOW HIRING MORE ENGINEERS NOW. CAROLINE: THEY HAVE THE MARKETPLACE. BRODY: WHEN THEY HIRED 30,000 PEOPLE IN THE PANDEMIC MAJORITY WERE SALESPEOPLE. AND NOW IN THE LAYOFFS THE WERE SALESPEOPLE. THEY ARE FOCUSING IN ON WHAT WILL GET US TO THE NEXT LEVEL AND A LOT OF THAT IS HAVING TO BUILD NEW PRODUCTS.
WE ARE SEEING THAT ACROSS THE INDUSTRY. THERE ARE A LOT OF HIGHFLYING STARTUPS THAT HAD A SIMILAR TRAJECTORY AND THEY ARE HAVING A SIMILAR BUST CYCLE. CAROLINE: ON THAT HAPPY NOTE WE WILL LEAVE IT. IT IS A PHENOMENAL STORY GETTING A LOT OF PICKUP ACROSS THE LINE AND GO IN PICK IT OFF THE SHELF OR HOWEVER YOU CONSUME IT. REALLY INTERESTING DEEP DIVE
INTO SALESFORCE. THAT DOES IT FOR THIS EDITION OF BLOOMBERG TECHNOLOGY. ED: A RELENTLESS YEAR AND WEEK. CHECK OUT THE PODCAST ON APPLE, SPOTIFY, I HEART AND WE POSTED TO BLOOMBERG AND YOUTUBE.
2023-12-09 20:09
