Google in DOJ Crosshairs and 13F Filings Hit | Bloomberg Technology
>> 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. CAROLINE: LIVE FROM NEW YORK AND SAN FRANCISCO THIS IS BLOOMBERG TECHNOLOGY. GOOGLE IS IN THE CROSSHAIRS. WASHINGTON IS THINKING ABOUT
BREAKING UP THE SEARCH GIANT AFTER THE LANDMARK ANTITRUST WIN. ED: BIG TECH, NVIDIA AND BITCOIN IN FOCUS AS 13F FILINGS HEAD. CAROLINE: EARNINGS SEASONS CONTINUE AS CISCO CUTS COSTS AND JOBS IN A SHIFT TO AI. ED: LET US GET RIGHT TO ALPHABET. SHARES ARE DOWN THE .5% AFTER A
SLOW START. WITHIN TWO STANDARD DEVIATIONS. THE HEADLINE REPORTING IS THAT DOJ OFFICIALS AND ATTORNEYS ARE ASSESSING A BID TO BREAK UP THE SEARCH GIANT. THERE ARE MANY OTHER OPTIONS BEING DISCUSSED AND ACTIONS THAT CAN BE TAKEN. WE ARE GOING IN LATER TO TALK ABOUT THE PIXEL EVENT, THE HARDWARE GAIN FROM GOOGLE.
IS THAT A PART OF THE STORY? NOT REALLY CLEAR. IT IS A BID -- BIG HEADLINE WHERE THE NUANCE IS IMPORTANT. CAROLINE: YESTERDAY THE DEPARTMENT OF JUSTICE, FROM WHAT WE WERE UNDERSTANDING, THEY ARE CONSIDERING A BID TO BREAK UP GOOGLE VIOLENT -- FOLLOWING THE LAND PARK RULING THAT IT MONOPOLIZE THE ONLINE SEARCH MARKET. WE HAVE BEEN GETTING SCOOP AFTER SCOOP FROM WASHINGTON, D.C..
HOW LIKELY AND REALISTIC IS THAT WE GO BACK TO TWO DECADES AGO THE MICROSOFT FIGHT? >> THE JUSTICE DEPARTMENT IS CONSIDERING RECOMMENDING A BREAKUP. THEY HAVE A COUPLE OF OPTIONS TO SEE IF THEY COULD REQUIRE THAT GOOGLE SELLOFF THE ANDROID OPERATING SYSTEM, THE HARDWARE YOU GUYS WERE TALKING ABOUT. THE CHROME INTERNET OR ADWORKS. IT WILL BE UP TO THE JUDGE
BECAUSE HE GETS TO CHOOSE THE REMEDY. THEY DID PROPOSE RAKING UP MICROSOFT BACK IN THE DAY AND THE COURTS DID NOT GO FOR IT. INSTEAD MICROSOFT ENDED UP IN UNDER A CONSENT DEGREE THAT WENT ON FOR 10 YEARS. THAT IS WHAT THEY ARE MULLING, SHOULD THEY PROPOSE A BREAKUP, THAT IS PAYING A LOT UP FRONT AND THEN IT IS OVER, OR SHOULD THEY DO SOMETHING THAT GOES ALONG FOR OVERSIGHT MANY YEARS? ED: THE STOCK IS DOWN MORE SIGNIFICANTLY THAN IT WAS AFTER HOURS AND THERE ARE MANY FACTORS BEHIND THAT. THERE IS NOT A LOT OF RESEARCH OUT IN RESPONSE.
SOURCES ARE GETTING US AN INSIGHT INTO HOW THE DOJ WORKS. TELL US WHO THEY ARE SPEAKING TO AND SOLICITING INFORMATION FROM AND THE THINGS ON THE TABLE SO TO SPEAK OF WHERE THEY MIGHT GO NEXT? LEAH: THE JUSTICE DEPARTMENT DOES NOT MAKE THIS DECISION IN A VACUUM. THEY ARE CONSULTING WITH THIRD PARTIES IMPACTED BY GOOGLE. OTHER SEARCH ENGINES BUT ADVERTISERS, PEOPLE WHO ADVERTISE ON GOOGLE, LOTS OF OTHER WEBSITES THAT COULD IMPACTED BY THIS. ONE THING THAT THEY ARE VERY INTERESTED IN IS THE MOVE INTO AI. THEY ARE CONCERNED THAT GOOGLE
COULD USE SOME OF ITS DOMINANCE IN THE SEARCH AREA TO LEAPFROG OTHER COMPANIES IN AI. THEY ARE LOOKING AT ARE THERE ANY RESTRICTIONS THAT THEY NEED TO PUT ON GOOGLE'S DEVELOPMENT. ONE POSSIBILITY IS REQUIRING THAT ANY INFORMATION THAT THEY COLLECT FOR THE PURPOSES OF SEARCH IS NOT ALLOWED TO BE USED FOR PURPOSES OF AI. THIS IS JUST THE BEGINNING. THERE IS GOING TO BE A HEARING NEXT MONTH TO SORT OF SET UP THE PROCEDURE FOR HOW THIS REMEDY GETS PUT INTO PLACE.
BUT THESE ARE THE INITIAL THOUGHTS THAT THEY HAVE BEEN THINKING. CAROLINE: AS YOU SAY IT IS JUST THE BEGINNING AND ALPHABET AND GOOGLE ITSELF WILL FIGHT THIS. HOW OPEN TO POLITICAL PERSUASIONS WILL THIS BE? WE ARE LOOKING AT AN ELECTION IN NOVEMBER AND WOULD ANYTHING CHANGE OFF OF THE BACK OF THAT? LEAH: THAT IS THE OTHER POSSIBILITY. IF THERE IS A TRUMP
ADMINISTRATION THERE WOULD BE NEW FOLKS AND DIFFERENT IDEAS ON HOW TO PROCEED. THIS CASE ACTUALLY STARTED TRUMP ADMINISTRATION. IT WAS THE FOLKS ON ANTITRUST IN 2020 WHO BROUGHT THE ORIGINAL CASE. SO THE SECOND TRUMP ADMINISTRATION WOULD PROBABLY WANT TO CONTINUE PURSUING A REMEDY AGAINST GOOGLE BUT THEY MIGHT HAVE DIFFERENT IDEAS ON HOW TO GO ABOUT IT. ED:
REPORTING OUT OF WASHINGTON, D.C.. THANK YOU. THAT WAS A REPORTING SO LET US GET THE REACTION. SELL SIDE. AND THE BREAKUP OF THE BIG TECH BUSINESS MODELS IS HIGHLY UNLIKELY DOWN THE ROAD, ALTHOUGH TWEAKS AND HEAVIER SCRUTINY OF M&A WILL BE FRONT AND CENTER. CHRISTINA IS THE COFOUNDER AND VICE CHAIR AT COMPETITION NETWORK AND AN EXPERT IN THIS FIELD. LET US START WITH THE LIKELIHOOD THAT THE DOJ LAUNCHES AN INITIATIVE TO BREAK UP GOOGLE. >> THANK YOU. IT IS A PLEASURE TO BE HERE.
THE LIKELIHOOD REFLECTS THE VIEWING SIDE OF THE DOJ AND WILL BROADLY HELP OUTSIDE THAT FUNDAMENTALLY THE PURPOSE OF ALL OF THESE ACTIONS NEEDS TO BE RESTORE OR INDUCE COMPETITION. IT IS POINTLESS TO HAVE AN OPINION OR JUDGMENT THAT TELLS US THAT GOOGLE IS A MONOPOLY. WE HAVE A NUMBER OF THOSE IN EUROPE.
WE HAVE FAILED IN EUROPE TO FOLLOW THAT THROUGH AND IMPLEMENT MEASURES AND REMEDIES THAT ARE CAPABLE OF -- THAT WE ARE CAPABLE OF IN INCREASING COMPETITION. THE QUESTION IS TO WHAT EXTENT WILL THE JUDGE AS LEAH WAS SAYING BUILD THE APPETITE AND OPPORTUNITY TO PUSH THE REMEDY FOLLOWING THAT DECISION. ED: YOU FORGET THAT THERE ARE PEOPLE BEHIND THE STORY. THE REPORTING IS BASED ON ANONYMOUS SOURCES BUT WE ARE TRYING TO INFER THE THINKING OF DOJ OFFICIALS AND ATTORNEYS.
WHY IN THIS MOMENT WHAT THEY FEEL THIS IS REALISTIC IF NOT A BREAKUP OF THE OTHER POTENTIAL ACTIONS THAT WERE REPORTED ON MOMENTS AGO? CRISTINA: THE REASON WHY IT IS A SALIENT MOMENT FOR THIS KIND OF ACTION IS THAT THERE IS A GLOBAL MOVE OF ANTITRUST ACTION AGAINST GLOBAL TECH AND GOOGLE HAS NOT BEEN AFFECTED BECAUSE WE ARE TOO TIMID. WE HAVE NOT AFFECTED MEASURES CAPABLE OF COMPETITION. JONATHAN KANTER CALLED THIS HISTORIC AND MONUMENTAL. THIS IS A TIME WHEN WE NEED TO GET SERIOUS ABOUT WHETHER WE USE ANTITRUST AS A POLICY TOOL TO CREATE COMPETITION AND THAT IS WHERE WE HAVE FAILED THOUGH FAR WITH HALF WITTED MEASURES.
OR, CONTINUE TO DO SOMETHING WHICH IS MARGINAL, TARGETED AND VERY PRESCRIPTIVE BUT DOES NOT DELIVER COMPETITION, WHICH WAS THE GOAL. THE DEPARTMENT OF JUSTICE WILL FEEL THAT THIS IS THE SALIENT MOMENT TO PURSUE THIS KIND OF AGGRESSIVE. CAROLINE: 3.5% FALL IN MARKET CAP SHARE PRICE AND IT IS A BIG MOVE ON THE DAY BUT IT DOES NOT REFLECT THE IDEA THAT IT WILL BE BROKEN UP. IS THIS IN ANY WAY REALISTIC AND WHAT DO YOU ANTICIPATE WILL BE THE REAL SOLUTION HERE? CRISTINA: THE MARKETS NEVER ANTICIPATE THAT ANTITRUST WILL DO MUCH AND THAT IS THE TEST. THE OUTCOME OF THIS CASE IN WHICH THE JUDGES DELIVERED A VERY THOUGHTFUL AND -- A VERY THOUGHTFUL OPINION. IS IT GOING TO BE SERIOUS OR
NIBBLING AT THE MARGIN. I THINK MARKETS ARE JUST WAITING TO SEE. OF COURSE THE PROSPECT OF BREAKING UP GOOGLE IS VERY AMBITIOUS. ON THE OTHER HAND IF WE DO NOT DO IT NOW THEN HOW WILL WE CREATE COMPETITION. A JUDGE THAT SIMPLY MANDATES THAT GOOGLE CAN NO LONGER PLAY FOR -- PAY FOR EXCLUSIVITY -- EXCLUSIVITY SHOULD KNOW THAT THIS WILL BE PERFORMATIVE. IT WILL NOT DELIVER ANYTHING OF SUBSTANCE? CAROLINE: IS IT ABOUT GOING INTO ALL OF THE WAYS THAT GOOGLE IMPACTS THE ECOSYSTEM AND TRYING TO UNRAVEL IT BECAUSE THAT IS A HUGE TASK. CRISTINA: IT IS HERCULEAN, AND I FEAR
THAT WE MIGHT END UP WITH PROPOSALS THAT ARE A RUBE GOLDBERG MACHINE OF VARIOUS LITTLE MEASURES OR ATTEMPTS TO DEAL WITH THE CONTROL POINTS THAT GOOGLE HAS. THERE IS NO QUESTION THAT THE TENTACLES HAVE GONE DEEP AND LESS WE ADDRESS THOSE CHOKEPOINTS THEN WE ARE NOT FINDING A SOLUTION. REDLINING A CONTRACT IS NOT AN ANSWER. SO BREAKUP IS DIFFICULT BUT THERE ARE PRECEDENTS IN THE U.S.. YOU HAVE DONE ATT, THE MOST SIGNIFICANT PRECEDENT AND IT UNLEASHED COMPETITION AND INNOVATION.
OF COURSE THERE WILL BE MASSIVE CHALLENGES BECAUSE GOOGLE WILL NOT TAKE THIS LYING DOWN. THERE WILL BE POSSIBLY YEARS OF CHALLENGES. FUNDAMENTALLY YOU HAVE AN ECOSYSTEM WHERE YOU HAVE YOUTUBE AND GOOGLE SEARCH, THE TWO MOST IMPORTANT WEBSITES THAT PEOPLE ACTUALLY USE. IN THE SAME COMPANY ON THE MOST IMPORTANT BROWSER, CHROME. IF YOU ALLOW THAT TO BE UNDER THE SAME UMBRELLA THE INCENTIVE OF THIS COMPANY TO USE ALL OF THE PIECES OF THE TECHNOLOGY TO FAVOR ITSELF AND DRIVE REVENUES TO ITSELF IN WAYS THAT CEMENT THE MONOPOLY CONTINUE FOREVER MORE WITHOUT ALLOWING ANYONE TO COMMIT. MICROSOFT OFFERED $20 BILLION OVER FIVE YEARS TO BE ABLE TO BE ON SAFARI INSTEAD OF GOOGLE SEARCH. CAROLINE:
WE HAVE TO LEAVE IT HERE, BUT WE APPRECIATE THE NUANCED PERSPECTIVE. THE COFOUNDER AND VICE CHAIR OF THE COMPETITION RESEARCH POLICY NETWORK. FILING SEASON. WE WILL DISCUSS THE LATEST ON WHAT THE HEDGE FUNDS ARE UP TO. CAROLINE: IT IS THE SO-CALLED 13F FILING SEASON. THAT IS WHERE HEDGE FUNDS ARE FORCED TO DISCLOSE WHAT THEIR HOLDINGS HAVE BEEN. WE BREAK IT DOWN.
MUCH IS BEING MADE OF SOME HOLDINGS OF THAT COIN ETF'S. WHAT DO YOU MAKE OF THE REPORTING? >> INTERESTING. THE SEC APPROVED SPOT ETF EARLIER THIS YEAR SO WE HAVE SEEN SOME BUYING. IT LOOKS LIKE GOLDMAN SACHS BOUGHT OR HUNDRED MILLION. THE THING TO KEEP IN MIND IS THAT IT GIVES US SOME CLARITY BUT NOT FULL CLARITY. WE DO NOT KNOW WHICH PART OF THE BANK BOUGHT IT.
DO NOT KNOW THE INTENTIONALITY BEHIND TRADES. IS IT BULLISH ON THE ETF'S ON BITCOIN OR A WAY TO CAPITALIZE IN THE VOLATILITY? OR IS IT A SHORT AGAINST -- A LONG BET AGAINST SHORTS. IT MIGHT BE INTERESTING TO SEE SIGNIFICANT BUYING IN THAT SPACE. ED: WE WILL BRING UP THE NVIDIA CHART. IT IS AN INTERESTING CASE STUDY BECAUSE THE DATA IS BACK LURED LOOKING. YOU WANT TO GO INTO THE DARK WORLD OF HEDGE FUNDS AND STOCKPICKING FUND.
THE HEADLINES THAT I SEE IS THAT A NUMBER INCREASED THEIR POSITION IN NVIDIA AND IT IS INTERESTING BECAUSE IT IS THE PERIOD ENDING JUNE 30 AND WE HAD A HIGH ON JUNE 18. WHAT HAVE YOU LEARNED SO FAR? HEMA: THAT IS ONE OF THE KEY THEMES, HOW WERE FUNDS POSITIONED JUST AHEAD OF THE TIME THAT WE SAW IN JULY AND THEN GOT FIRST IN AUGUST. WE DID SEE NOMINAL BUYING AND WISCONSIN'S PENSION BOUGHT A LITTLE BIT. COATUE TRIMMED THEIR POSITION SLIGHTLY. IT IS INTERESTING TO SEE HOW
THE FUNDS WERE POSITIONING THEIR BOOKS AHEAD OF A TO MOTRICITY AND WEEKS. CAROLINE: WHAT ELSE ARE YOU MANAGING TO PEEL BACK IN TERMS OF BIG NAMES? HEMA: COATUE INTERESTING MOVEMENT. SLASHED THERE OUT -- ALPHABET AND SALESFORCE POSITION AHEAD OF THIS DOWNPOUR. THEY DITCHED THE INSTACART POSITION ENTIRELY. TRIMMED META AND NVIDIA. THEY STARTED SIX NEW POSITIONS, INCLUDING ONE IN A COMPANY THAT WE ARE HEARING MORE ABOUT, THE SPIN OUT FROM GE THAT IS MORE ENERGY FOCUSED. THEY HAVE A NEW POSITION IN
THAT COMPANY AND THE STOCK IS UP 37%. ED: YOU HAVE DONE A GOOD JOB OF THE BASICS TO THE AUDIENCE AROUND THE WORLD. MANY OF THEM WILL NOT UNDERSTAND 13F, SO WE WENT OVER STOCK TAKING AND DIRECTIONAL BETS. THERE IS A LOT MORE TO COME AND WE CANNOT SAY THIS IS WHAT THE STORY WAS. JUST EXPLAIN HOW IT PLAYS OUT OVER THE NEXT COUPLE OF DAYS. HEMA: HEDGE FUNDS ARE REQUIRED TO FILE THESE POSITIONS WHICH SHOWS THEIR POSITIONS AS OF THE END OF THE SECOND QUARTER.
WE GET A BIT OF A BACKWARDS LOOKING VIEW INTO THE FUNDS. THEY HAVE TO FILE IT BY END OF DAY TODAY. SEE THE FILINGS LATER IN THE DAY AS SOME PROCRASTINATE TO EARLIER. WE GET MORE OF AN AGGREGATE SENSE OF HOW THE FUNDS WERE POSITIONED LATER IN THE AFTERNOON. TOMORROW WE HAVE MORE CLARITY
AS TO WHAT THE POSITIONS WERE AND WHAT THE POPULAR BUY AND SELLING TRENDS WERE. EVEN THOUGH THIS IS BACKWARDS LOOKING IT IS HELPFUL BECAUSE HEDGE FUNDS ARE TORY ASLEEP SECRETIVE AND THIS GIVES US SOME INSIGHT INTO WHAT AND HOW THEIR THINKING MIGHT BE. IT -- ACROSS THE SECTOR BUT PARTICULARLY INTACT. -- IN TECH. ED: THANK YOU.
LET US TALK ABOUT MARKETS MORE BROADLY. CORE U.S. INFLATION EASE ON AN ANNUAL BASIS KEEPING THE BED ON TRACK TO LOWER INTEREST RATES LAST MONTH -- NEXT MONTH. HOW WILL THAT IMPACT THE TECHNOLOGY SECTOR AND STOCKS? JOINING US IS ROB. IT FEELS LIKE THERE HAS BEEN SOME ANXIETY IN THE MARKETS. I THINK BACK TO THAT FATEFUL
MONDAY AFTER THE BOJ. WE TALKED ABOUT THE CARRY TRADE. WHAT TO YOUR MIND IS THE PRINCIPAL DRIVER IN MARKETS ESPECIALLY WHEN YOU FOCUS ON TECHNOLOGY AND THE EQUITIES MARKET? ROB: GOOD MORNING. IN THE END IT IS SPENDING. WHAT WE HAVE SEEN DRIVE TECH STOCKS FOR THE BULK OF THIS YEAR IS MUCH HIGHER INVESTMENT IN TECHNOLOGY INFRASTRUCTURE TO SUPPORT ARTIFICIAL INTELLIGENCE. I THINK THE QUESTION BEFORE US IS NOT IS THAT GOING TO CONTINUE WHAT DOES THAT BROADEN OUT? IS A CONSUMER HEALTHY ENOUGH TO INCREASE GOOD SPENDING WHICH PUTS FURTHER QUEST -- FURTHER PRESSURE ON TECHNOLOGY INFRASTRUCTURE. WE HAVE SEEN FAIRLY LIGHT AUTO SALES AND THE CONSUMER WEAKENING. THEY HAVE BEEN FOCUSED SO MUCH
ON SERVICES AND SOME OF THE NEWS THAT WE ARE SEEING INDICATES A LACK OF CLARITY ON SERVICE SPENDING IN THE YEAR END AND DOES THAT PIVOT INTO GOOD SPENDING LIKE ON AUTOS OR DURABLE GOODS WITH LOTS OF CHIPS IN THEM. THAT PUTS MORE PRESSURE ON TECHNOLOGY INFRASTRUCTURE AS WE LOOK AT YEAR END. THAT IS NOT THERE FOR US THAT IT IS A QUESTION THAT WE HAVE. ED:
MANY DAYS UNTIL AUGUST 28, A NOTABLE DATE BECAUSE NVIDIA REPORTS EARNINGS. WHAT IS YOUR APPROACH TO THAT? IT IS A SINGLE NAME DRIVING THE ENTIRE MARKET AT THE MOMENT. ROB: A SINGLE NAME THAT REMAINS IMPORTANT TO BE IN PORTFOLIOS.
OUR APPROACH IS THAT WE THINK THAT THIS RALLY HAS TO BROADEN OUT A LITTLE BIT MORE. WE ARE LOOKING TOWARDS AN EQUAL WEIGHT S&P 500 POSITION BECAUSE WE THINK THERE NEEDS TO BE MORE BENEFICIARIES THAN JUST TECHNOLOGY IF THIS ECONOMY IS HOLDING UP AS WELL AS DATA INDICATES. WE ARE SEEING SOFTER INFLATION BUT LOW UNEMPLOYMENT AND GOOD WAGE GROWTH AND GOOD GDP GROWTH AND SO SEE MORE BENEFICIARIES OF THIS ECONOMIC ACTIVITY BEYOND TECHNOLOGY. CAROLINE:
GO ACROSS ASSET CLASS AS WELL. SHOULD YOU BE ONLY THINKING OF EQUITY IS? WHAT ABOUT EXTEND, AND CORPORATE BONDS? ROB: FIXED INCOME IS ATTRACTIVE AND WE ARE LOOKING AT GETTING MORE CREDIT EXPOSURE AND ARE FIXED IN -- FIXED INCOME PORTFOLIOS WHETHER IT IS HIGH-YIELD MUNICIPAL BONDS FOR TAXABLE INVESTORS OR BELOW INVESTMENT GRADE CORPORATE CREDIT. THE INTERESTING THING IN THE TECHNOLOGY SPACE IS THAT THEY ARE CASH RICH. YOU ARE GETTING HIGH QUALITY BONDS AS WELL. WE WOULD LIKE TO GET SOME CREDIT EXPOSURE AT THIS POINT IN PORTFOLIOS BECAUSE ECONOMY IS HOLDING UP WELL. THE INTERESTING THING IS THAT
INVESTOR SENTIMENT IS ROBUST AND CREDIT COMPARED TO EQUITY. WE HAVE SEEN SOFTNESS AS OF LATE. BUT THE CREDIT SENTIMENT HAS STAYED STRONG. NOT OF EXPECTATIONS OF A SLOWING ECONOMY. CAROLINE: SO GOOD TO CATCH UP WITH YOU.
MEANWHILE, COMING UP A LOOK AT HOW CONSULTING GIANTS ARE BRINGING ARTIFICIAL INTELLIGENCE INTO THE CLIENT WORK. THAT UP NEXT. CAROLINE: HOW IS ARTIFICIAL INTELLIGENCE BEING IMPLEMENTED RIGHT NOW? WE CAN SPEAK TO SOMEONE ABOUT IT. THE COFOUNDER AND CEO OF ELISEAI WHO SAYS THEY HAVE A BILLION-DOLLAR INNOVATION AND IT IS ALL ABOUT HELPING RENTERS.
HOW ARE YOU DOING THAT? >> THAT IS CORRECT. THIS IS AN AI TECHNOLOGY COMPANY BASED IN NEW YORK CITY THAT SERVES THE HOUSING AND HEALTH CARE INDUSTRIES. BOTH OF THESE INDUSTRIES EXPERIENCE SIGNIFICANT ROLE -- SIGNIFICANT OPERATIONAL CHALLENGES BECAUSE THE DAY-TO-DAY OPERATIONS ARE LARGELY MANAGED BY ARCANE AND MANUAL PROCESSES.
WE PROVIDE AI TECHNOLOGY THAT ALLOWS CUSTOMERS TO AUTOMATE THE MOST IMPORTANT AND BUSINESS-CRITICAL FUNCTIONS. IN THE HOUSING INDUSTRY WE PROVIDE AN AI THAT HELPS WITH ALL OF THEIR NEEDS TO LOOKING FOR AN APARTMENT TO HANDLING THE MAINTENANCE REQUEST TO EVEN RENEWING THE RELEASE -- EVEN RENEWING THE LEASE IS. THIS HELPS HOUSING PROVIDERS SERVE MORE RENTERS FASTER AND BETTER AND ALSO AT A LOWER COST. TODAY THE AI IS ALREADY USED BY OVER 70% OF THE LARGEST PROFIT -- PROFIT MANAGEMENT COMPANIES IN THE U.S.. WE HAVE EXPANDED INTO THE HEALTH CARE MARKET. IN THAT INDUSTRY THE AI AUTOMATES THE DAY-TO-DAY WORKFLOWS LIKE SCHEDULING APPOINTMENTS THAT ALLOW OUR CUSTOMERS TO MANAGE THEIR BUSINESSES MORE EFFECTIVELY.
ED: A BILLION-DOLLAR EVALUATION, CONGRATULATIONS. THERE ARE A LOT OF PEOPLE SITTING BEHIND YOU. WHAT ARE THEY WORKING ON AND WHAT WILL YOU USE THEM FOR.
YOU SEEM VERY BUSY ALREADY? MINNA: WE ARE EXTREMELY BUSY. WE ARE AT OUR OFFICE IN NEW YORK CITY AND BEHIND ME ARE A BUNCH OF REALLY TALENTED ENGINEERS, PRODUCT AND MANY PEOPLE SUPPORTING NEW CUSTOMERS EVERY DAY AND TRANSFORMING THEIR BUSINESSES USING AI. WE ARE USING THE FUNDING TO EXPAND THE TEAM AND TO HELP MORE CUSTOMERS AND BUILD MORE INNOVATIVE PRODUCTS TO CREATE EFFICIENCIES IN THE OPERATIONS. CAROLINE: SAPPHIRE VENTURES LED THE ROUND OTHER, -- OTHERS LIKE DIFFCOWEST. HOW WAS IT LIKE
RAISING FUNDS? MINNA: SURPRISINGLY EASY. THERE IS A LOT OF FUNDING AVAILABLE FOR GREAT BUSINESSES SOLVING REALLY IMPORTANT PROBLEMS AND WE ARE EXCITED TO HAVE PARTNERED WITH PEOPLE WHO UNDERSTAND HOW THE INDUSTRY SHOULD BE. ED: THE COFOUNDER AND CEO OF ELISEAI. COMING UP WE WILL LOOK AT
GOOGLE'S PRODUCT ANNOUNCEMENT TO FOCUS ON THE HARDWARE SIDE OF THE AI STORY. MARK WAS ON LOCATION AND I WONDER WHERE HE MADE IT. THIS IS BLOOMBERG TECHNOLOGY. CAROLINE: WELCOME BACK. I AM CAROLINE HYDE IN NEW YORK. ED: I AM ED LUDLOW IN SAN FRANCISCO. CAROLINE: WE ARE NOW CURRENTLY FLAT ON THE NASDAQ 100 INDEX AND HAS BEEN TRADING LOWER. NVIDIA PUSHES UP HIGHER AND
BROAD CALL DOING SOME HEAVY LIFTING. WE ARE SEEING A FLAT DAY AFTER THE CPI ANTICIPATION AND WE GET A PRINT THAT SHOWS THE FEDERAL RESERVE IS LIKELY TO CUT. 10-YEAR YIELD DIES DOWN A LITTLE BIT SO WE ARE SEEING A BUYING UP BONDS. THE BITCOIN OFF BY 2.5%. WE ARE TRADING IN THE RANGE OF 65,000.
LOOKING AT INDIVIDUAL NAMES. NVIDIA HAS BEEN DICTATING THE WAY THE BENCHMARK HAS BEEN GOING. WE ARE SEEING TENCENT DOING TENCENT MUSIC AND MAYBE I GAVE THE WRONG FOCUS. THEY HAVE BEEN GIVING US THEIR EARNINGS. WE ARE THINKING HOW THIS
JUGGERNAUT WHEN IT COMES TO GAMING AND CHAT AND OVERALL FINTECH HAS MANAGED TO PUSH UP ITS OVERALL REVENUE. ALPHABET IS A DRAG ON THE MARKET AND WE HAVE TO DELVE INTO WHAT CAN BE A DOJ DISCUSSION AND WE UNDERSTAND FROM REPORTING OF BLOOMBERG THEY ARE CONSIDERING BREAKING UP ALPHABET. THIS IS AFTER SOME IMPORTANT ANNOUNCEMENTS THAT REALLY SHOWED OFF THE AI PROW S WHICH IS WHAT IT -- PROWESS, WHICH IS WHAT AI IS WORRYING ABOUT. ED: GOOGLE IS ROLLING OUT SMARTPHONES IN A PUSH TO SELL AI. JOINING US FROM THE EVENT FRESH OFF LOCATION IS MARK GURMAN.
IT IS AN UPDATED LINE OF PIXEL PHONES BUT WHAT GOOGLE IS TRYING TO CONVINCE US OF IS THAT WE NEED A HARDWARE FOR THE BEST INTEGRATION OF GEMINI AND USE OF GEMINI IN THE REAL WORLD. WHAT DID YOU MAKE OF IT? MARK: THESE LAUNCHES HAVE BEEN HAPPENING SINCE 2016. THESE PHONES, THEY ANNOUNCED PARTS OF THE PHONES AND POST PICTURES AND THEY TWEET THEM OUT.
THERE ARE SO MANY LEAKS, PEOPLE GO HANDS-ON BEFORE THEY ARE ANNOUNCED. BY THE TIME THAT THEY ANNOUNCE, THE PHONE IS ALREADY ESSENTIALLY BEEN ANNOUNCED. SO WE HAD LONG ANTICIPATED WHAT THESE FEATURES WOULD BE. THERE ARE INTERESTING THINGS AND WHY I THINK IT IS SO INTERESTING IS HOW TIGHTLY THEY HAVE INTEGRATED EVERYTHING. WE HAD THE NEWS ABOUT THE DOJ LOOKING TO BREAK UP THE COMPANY. HOW DO YOU BREAK UP A COMPANY NOW SO TIGHTLY INTEGRATED? THEY MADE A DECISION TO FOLD THE DEVICES GROUP TOGETHER A FEW MONTHS AGO. CAROLINE: THAT IS EXACTLY THE PUSH AHEAD
FOR REGULATORS WORRYING THAT THE AMOUNT OF ECOSYSTEM THAT ALPHABET AND GOOGLE CONTROLS ALLOWS THE AI OFFERING TO BE THAT MUCH BETTER. IS IT AND HOW MUCH ARE WE LIKELY TO SEE THAT GOOGLE GOING AHEAD AND A SMARTPHONE ARENA BUT THEN HAVE 5% OF THE MARKET IN THE U.S.? MARK: IT IS THEIR COMPETITIVE ADVANTAGE.
THEY BUILT GOOGLE SEARCH. THEY BUILT IT FROM THE GROUND UP 20 TO 30 YEARS AGO AND THEY BUILT THIS NETWORK AND THIS WEB CRAWLING SYSTEM AND AMAZING SEARCH ENGINE THAT WILL POWER THESE INCREDIBLE ARTIFICIAL INTELLIGENCE FEATURES. AND NOW THAT TECHNOLOGY THAT THEY SPENT DECADES BUILDING ARE BEING HELD AGAINST THEM. I DO NOT THINK THAT THE GOVERNMENT SHOULD BE HOLDING OUT AGAINST THEM, THEIR ABILITY TO BUILD A BETTER PRODUCT BECAUSE OF HOW MANY DECADES AND BILLIONS MORE THEY HAVE SPENT TO DEVELOP THE TECHNOLOGY. TO YOUR POINT, THIS IS MUCH MORE ADVANCED THAN WHAT APPLE HAS. APPLE IS VERY NEW TO THE GAME USING SAME AND SIMILAR MODELS SO WHAT GOOGLE IS DOING. ED:
THE MARKET IS IMPORTANT, THERE ARE A COUPLE BILLION ACTIVE MONTHLY USERS THAT I THINK THEY ARE SHIPPING 10 MILLION HANDSETS A YEAR. NOTHING REALLY COMPARED TO THE SCALE OF IPHONE. YOU COVER APPLE BETTER THAN ANYONE ON THE PLANET. IS IT GOING TO BE A REAL COMPETITION ON THE HANDSET SIDE BASED ON WHAT YOU SAW? MARK: THE FEATURES, 10 TIMES BETTER IF YOU ARE USING THE GOOGLE PLATFORM. HOW MUCH EMBEDDED AI YOU ARE GETTING WILL BE FAR BETTER. BUT IF YOU REALLY THINK ABOUT IT, APPLE IS GOING TO BECOME THE MOBILE -- THE BIGGEST MOBILE AI PLAYER OVERNIGHT WHEN APPLE INTELLIGENCE LAUNCHES AS PART OF IOS 18.1 A FEW WEEKS AFTER THE IPHONE 16 LAUNCHES.
I HAVE BEEN USING APPLE INTELLIGENCE AND YOU ARE GETTING SOME -- YOU ARE GETTING SUMMARIES OF TEXT AND NOTIFICATION PRIORITIZATION BUT THERE WERE COOL DEMOS. YOU COULD HAVE THE PHONE ANSWER PHONE CALLS ON YOUR BEHALF AND GO THROUGH TREES WHEN YOU MAKE A PHONE CALL. IT CAN EDIT IMAGES AND PLACE YOU IN A COMPLETELY DIFFERENT ENVIRONMENT. IT CAN DO THINGS ON YOUR BEHALF AND CREATE RESEARCH REPORTS. IT IS DAY AND NIGHT. CAROLINE:
-- ED: THAT IS THE CHEESE CORRESPONDENT FOR EVERYTHING CONSUMER-ELECTRONICS. THIS STORY IS GAMING, TENCENT REVENUE GROWTH ACCELERATING AFTER THE RELEASE OF THE BLOCKBUSTER GAME THIS SUMMER. JOINING US IS HENRY. BASICALLY IT IS AN EARNINGS BEAT, BUT PACIFIC PERFORMANCE OF ONE TITLE HAS US VERY OPTIMISTIC ABOUT A REBOUND FOR THE GAMING INDUSTRY. THAT AFTERNOON. HENRY: YES INDEED. SO TENCENT'S GAMING REVENUE HAS
BEEN A HIGHLIGHT FOR THE QUARTER. THE DOMESTIC GAINING -- GAMING REVENUE IMPROVED BY 8% AND THAT IS THE FASTEST GROWTH PACE THAT TENCENT HAS SEEN IN AT LEAST TWO YEARS. THE KEY CATALYST HAS BEEN THE DUNGEON AND FIGHTER MOBILE GAME RELEASED IN MAY. HOWEVER TENCENT IS SAYING THAT IT IS SEEING STRONGER GROWTH OR MOMENTUM ACROSS ITS EVERGREEN GAMES, NAMELY THE STEEPER AND HONOR -- PEACEKEEPER AND HONOR OF KINGS.
IN THE MEANTIME OLDER TITLES HAVE BEEN SEEING STRONGER ATTRACTION AS WELL. CAROLINE: IT IS SUCH A JUGGERNAUT AND THE FACT THAT IT HAS ONLY PEOPLE USING WE CHAT AND ADD TO THAT IS EXTRAORDINARY. DO WE GET ANY DETAIL ON HOW THEY ARE BETTING ON AI AND HOW IT WILL REVOLUTIONIZE PRODUCTS? HENRY: INTERESTINGLY AND ACTUALLY, IN THIS PRESS CONFERENCE THAT WE HAVE HAD WITH TENCENT THE DETAILS WITH AI HAVE BEEN PRETTY SCARCE. THE COMPANY HAS SAID IT IS USING ITS MODEL FOR ITS NEW AI SYSTEM, HOWEVER APART FROM THAT WE HAVE NOT GOTTEN TOO MANY DETAILS. IT SEEMS THAT THE MINDSET HAS BEEN MOVING SLOWLY WITH AI TO GET READY FOR ITS TOOLS INSTEAD OF ROLLING RAPIDLY LIKE ALPHABET. CAROLINE: WHAT WOULD WE DO WITHOUT YOU?
WE APPRECIATE THE SUM UP. LET US TALK A LITTLE BIT ABOUT BAIJU, FACING POTENTIAL INSOLVENCY AFTER THE RULING THAT ALLOWED IT TO REVERT BANKRUPTCY. THAT MEANS THAT PROCEEDINGS CAN RESTART UNTIL THE SUPREME COURT DECIDES ON THE CASE. COMING UP, WE WILL DEEP DIVE. MAX GEISER -- GAZOR IS TALKING ABOUT AI AND IS IT TO HAVE A? THIS IS BLOOMBERG TECHNOLOGY.
TERMINAL AND ONLINE ON APPLE, SPOTIFY AND IHEART. THIS IS BLOOMBERG. CODE RABBIT, FOCUSING ON THE CODE REVIEW PROCESS ANNOUNCED THAT IT COMPLETED A $60 MILLION SERIES A FUNDING ROUND. IT INCLUDED PARTICIPATION FROM FLEX CAPITAL, ENGINEERING CAPITAL AND PROMINENT INVESTORS INCLUDING OLIVIA, THE CEO OF DATADOG, SO LET US BRING IN MAX FOR MORE AND TODAY'S SPOTLIGHT.
TO INTO CODERABBIT BUT I WANT TO REFLECT ON WHAT WE TRY TO MAKE SENSE OF WHAT IS HAPPENING IN PRIVATE TICKETS DOLLARS MIGHT HAVE BEEN A LARGE SERIES A, BUT THE APPLICATION AND FOUNDATION MODEL LAYER IT IS NOT THAT BIG IN THIS CONTEXT. GOOD MORNING AND WHAT DO YOU MAKE OF IT? MAX: WE HAVE HAD A BUSY SUMMER. CODERABBIT WAS AN INVESTMENT THAT WE ANNOUNCE THIS MORNING AND A DEAL CALLED NAPKIN AND IT HAS BEEN ONE OF OUR BUSIEST SUMMERS. THE EARLY-STAGE PRIVATE
INVESTMENT MARKET IS VERY ACTIVE. MOST OF THAT IS CONCENTRATED IN AI. IT IS COMPLETELY INDEPENDENT OF WHAT YOU SEE WITH THE VOLATILITY IN THE PUBLIC MARKETS.
WE ARE STILL VERY ACTIVE ACROSS A NUMBER OF DIFFERENT CATEGORIES. ONE OF THE MORE INTERESTING THINGS IS THAT THE INVESTMENT SHIFT FOCUS FROM INFRASTRUCTURE INTO APPLICATIONS AND WE ARE SEEING A WIDE BREDATH OF DOMAINS. CAROLINE: THERE ARE THINGS OUT THERE ANALOGOUS WITH THAT, BUT WOULD YOU MIND GOING INTO HOW COMPETITIVE IT WAS AND WHAT WAS IT LIKE GETTING SOMETHING DONE RELATIVE TO LAST SUMMER? MAX: MY PARTNER LEAD THAT DEAL. CODERABBIT IS FOCUSED ON USING AI FOR IMPROVING CODE QUALITY AND REVIEW. IT WAS COMPETITIVE AND LIKE
MANY OTHER DEALS WE HAVE TO SHOW UP WITH STRONG CONVICTION AND GET TO CONVICTION ON A CATEGORY. IT HELPS TO HAVE A PREPARED MIND WHICH WE DO. AND I THINK THE PORTFOLIO IN THE DEVELOPING TOOLS AND ECOSYSTEM SPACE HELPS US WIN THE DEALS SO THAT WAS AN EARLY INVESTOR IN COMPANIES LIKE DATA DOG AND A NUMBER OF HIGHFLYING COMPANIES THAT HELPED TO SEAL THE DEAL.
CAROLINE: HOW MANY WILL EXIT IN THE NEXT YEAR OR SO? MAX: THE LAST TIME I WAS ON THE SHOW I WAS VERY ENTHUSIASTIC ABOUT THE PROSPECT FOR IPOS THIS YEAR. I THINK THE REALITY IS THAT IN THE FIRST HALF OF THE YEAR WE HAD A SITUATION WHERE TACH HAD A LITTLE VOLATILITY AND WE HAD MODERATE TO SUCCESSFUL IPOS BUT NOT A LOT OF ACTIVITY. WITH THE SECOND HALF OF ALL OF THE VOLATILITY IN THE BACKDROP, I THINK IT WOULD BE CHALLENGING TO EXPECT A LOT MORE ACTIVITY WITH THE IPO WINDOW OPENING. SO OUR EXPECTATIONS ARE TEMPERED. WE THINK THESE ARE HIGH QUALITY COMPANIES AND IF IT IS NOT A PUBLIC OFFERING WE ARE SEEING CREATIVE DEALMAKING GOING ON BEHIND THE SCENES. WE EXPECT THAT THE FOCUS IS ON BUILDING GREAT COMPANIES AND THAT THE EXIT OPPORTUNITIES WILL EMERGE IF WE FOCUS ON BUILDING DURABLE COMPANIES.
WE ARE PATIENT AND RESILIENT. CAROLINE: CREATIVE TO SAY THE LEAST. WE WERE SHOWING A GRAPHIC WITH SOME OF THE PORTFOLIO OF YOUR COMPANY IS. I AM INTERESTED IN THIS RATHER GROSS ACRONYM IS ROAI, WHICH IS THE RETURN ON INVESTMENT, EVERYONE IS TRYING TO UNDERSTAND IT. WHAT ARE -- WHAT IS IT AS YOU UNDERSTAND IT? MAX: THE REALITY IS THAT IF YOU LISTEN TO WHAT PUBLIC MARKETS OR COMPANIES ARE SAYING THE DEMAND IS THERE AND WE DO NOT UNDERSTAND THE RETURN PROFILE YET.
I THINK THAT IS A FAIR PLACE TO BE. WHAT WE ARE SEEING IS THE RETURN ON INVESTMENT IS HIGHER IN THE APPLICATION DOMAIN AND THAT IS WHY A LOT OF THE ACTIVITY THAT YOU HAVE SEEN HAS SHIFTED INTO THE DOMAIN VERSUS INFRASTRUCTURE WHICH IS A PICKS AND SHOVELS BUSINESS. WE HAD A GUEST ON SOLVING PROBLEMS IN THE ESTATE DOMAIN AND CODERABBIT IS SOLVING CODE PROBLEMS. THE ABILITY TO SOLVE THOSE QUICKLY AND DELIVER CUSTOMER VALUE IS STRONGER. ED: YOU ARE AN EARLY STAGE INVESTOR, IN PART AND I WAS CURIOUS BY BRINGING UP CHARACTER AI. THERE ARE NEW METHODS OF EXIT AND THEN YOU CAN EITHER TRANSFER THE IP OR YOU DO NOT LIKE IN INFLECTION'S CASE IT WAS FULLY TRANSFERRED TO MICROSOFT.
IN CHARACTER'S CASE, I DO NOT THINK IT WAS. DO YOU THINK DIFFERENTLY WHEN YOU INVEST IN A STARTUP? MAX: IS A GOOD OBSERVATION AND INTERESTING TIMELINE. LET ME GIVE YOU SOME ANECDOTES. IN THE LAST COUPLE OF WEEKS THERE ARE FOUR ACQUISITION DISCUSSIONS AND DISCUSSIONS OF DIRECT SECONDARIES AND TENDER OFFERS AND DISCUSSIONS OF CONTINUITY FUNDS FOR VENTURE FIRMS SEEKING LIQUIDITY. I AM EVEN GOING THROUGH A SITUATION WHERE THERE MIGHT BE A MERGER OF EQUALS WHICH IS THE FIRST TIME I'VE SEEN SOMETHING AT THAT SCALE. IT GIVES YOU VISIBILITY INTO WHAT IS GOING ON. THERE IS A LOT OF CREATIVE
DEALMAKING DISCUSSIONS GOING ON BEHIND THE SCENES AND PART OF THIS IS DUE TO THE LACK OF A WINDOW BEING OPEN. THE GOOD NEWS IS THAT THESE ARE VERY GOOD COMPANIES AND THE FOUNDERS ARE VERY PATIENT AND EXPLORING THINGS OPPORTUNISTICALLY. CAROLINE: CAN YOU TELL YOU THE MEASURE OF EQUALS? MAX: THAT IS FOR A DIFFERENT TIME. CAROLINE: WE WILL HAVE TO HAVE YOU BACK WHEN THAT HAPPENS. THANK YOU. GENERAL PARTNER AT CRV.
MCKINSEY SAYS THAT IT IS SEEING AN INCREASE IN THE NUMBER OF CLIENTS SEEKING AI PROJECTS REPORTING THAT HE PERCENT OF THEIR WORK INVOLVES AI. THE FIRM SAYS THAT BANKING AND INSURANCE SECTORS ARE INTEGRATING THE TECH MOST RAPIDLY. COMING UP WE WILL DISCUSS WHAT TO EXPECT FROM CISCO'S EARNINGS AND AI AS WELL PLUS A DEEP DIVE INTO THE RIVALRY BETWEEN SNOWFLAKE AND DATABRICKS AND WHY THEY FEAR MAC -- FEAR MICROSOFT. THIS IS BLOOMBERG TECHNOLOGY.
CAROLINE: INTEL IS SLASHING JOBS AND EXPENSES IN A BID TO TURNAROUND THE BUSINESS HAS JUST SOLD ITS STAKE IN ARM. THEY REPORTED IT TUESDAY AND IT NO LONGER OWNS THE 1.1 MILLION EIGHT SHARES IT HELD EARLIER. THIS AS IT STRUGGLES TO REGAIN A FOOTING IN AN INDUSTRY ONCE DOMINATED. ED: THERE IS A LOT TO DISCUSS IN THE LANDSCAPE. CISCO PLANS TO REPORT ITS FOURTH-QUARTER PERFORMANCE PROVIDING FRESH INSIGHT INTO WHETHER CORPORATIONS ARE BACK TO INVESTING IN COMPUTER NETWORKS.
JOINING US IS IAN KING. YOU TAKE THOSE TWO STORIES AND IT IS A LANDSCAPE AND ENVIRONMENT THING, THE WINNERS AND LOSERS. CISCO IS INTERESTING BECAUSE THEY WOULD SAY WE ARE RELEVANT AND A PART OF THIS. EARNINGS WILL TELL US WHETHER THEY ARE OR NOT. IAN: IT IS A TRANSITION STORY. THEY ARE PROMISING AS AN ORGANIZATION THEY ARE TRANSITIONING INTO MORE RELEVANT FOR TODAY TECHNOLOGY AND LESS FOCUSED ON WHAT THEY USED TO BE GOOD AT. IT WILL NOT BE A ONE-DAY THING
FOR THEM. INTEL PROBABLY LESS SO. CAROLINE: GO INTO THEM FOR A MOMENT, THE FACT THAT THEY ARE HAVING TO SELLOFF SUCH HOLDINGS THAT THEY ARE TRYING TO CUT COSTS TO SUCH AN EXTENT. THIS SEEMS PAINFUL. WE TALKED ABOUT HOW THEY ARE CUTTING THE MARKETING SPEND. IAN: I MEAN, WE DO NOT KNOW THE PRECISE DETAILS BECAUSE INTEL WOULD NOT COMMENT OUTSIDE OF THE FILINGS BUT IT IS NOT A GOOD LOOK. THIS IS NOT SOMETHING THEY
BOUGHT AS A MASSIVE INVESTMENT TO MAKE A HUGE AMOUNT OF MONEY ON. IT WOULD'VE PROBABLY BEEN A STRATEGIC PURCHASE. THE FACT THAT THEY DECIDED TO SELL THAT AND THE FACT THAT IF YOU LOOK AT THEIR BALANCE SHEET THAT THEY ACTUALLY MADE LOSSES ON SOME OF THE EQUITY INVESTOR AND IS NOT A GOOD LOOK AND IT INDICATES THAT THEY NEED ANY CASH WHERE THEY CAN GET IT. ED: COULD WE END ON THE BASICS. PAT HAS AN APPROACH CALLED SMART PACK -- SMART CAPITAL PARTNERING WITH STRATEGICS AND PARTNERING WITH GOVERNMENT MONEY AND THEN TAKING THE BALANCE SHEET. HOW IS THAT GOING? IAN:
IT DEPENDS ON WHO YOU SPEAK TO. SOME OF THE ANALYSTS ARE TALKING ABOUTINTEL AND THE ACCESS TO CAPITAL. THEY ARE A COUPLE OF RUNS ABOVE JUNK AND FORTUNATELY FOR THEM THAT IS GOING TO RAISE THE COST OF CAPITAL. IN GENERAL BE TALKING ABOUT INTEL AND ITS ACCESS TO CAPITAL IS NEW TERRITORY. THIS WAS THE COMPANY THAT WAS
AWASH FOR CASH AND NOW IT IS A CONCERN. CAROLINE: A FASCINATING BEAT, THANK YOU. SECRET CODENAMES, BILLBOARDS AND DEAL DRAMA WHICH IS A WINDOW INTO THE COMPETENT -- INTO THE COMPETITION BETWEEN DATABRICKS AND SNOWFLAKES. JOINING US IS BRODY FORD WHO HAS A DEEP DIVE INTO A RIVALRY THAT STARTED AS FRENEMIES. BRODY: IN THE TECH INDUSTRY WE LOVE A RIVALRY AND WE HAVE NOT SEEN THIS IN A A WHILE. TWO COMPANIES GOING AFTER EACH OTHER. THEY HAVE CUTE NICKNAMES FOR
EACH OTHER WHEN THEY TRY TO STEAL THE BUSINESS. THEY INCENTIVIZE SELLERS TO GO AFTER EACH OTHER. WHAT UNDERLINES ALL OF THIS IS THAT THESE ARE COMPANIES THAT ARE NOT HOUSEHOLD NAMES BUT REQUIRED WHEN YOU WANT TO PUT YOUR DATA IN ORDER TO USE IT FOR AI. PRETTY MUCH A MANY COMPANY AND THERE WILL BE CUSTOMERS OF ONE OR TWO AND MOST LIKELY BOTH. ED: REMEMBER IN MARCH, A LONG TIME
AGO BUT YOU AND I DID THE STORY ABOUT BASICALLY SAYING THAT FRANK LEFT THE COMPETITION WHICH WAS WILD AT THE TIME. THERE ARE SOME PRETTY SCOOPY BITS. GIVE US THE REST OF THAT STUFF. BRODY: ONE INTERESTING THING IS THAT SNOWFLAKE WAS READY TO PURCHASE A STARTUP FOR 600 MILLION DOLLARS AND A DATABRICKS SPEND $2 MILLION TO BUY IT. ANOTHER INTERESTING ELEMENT IS THAT EVERYBODY UNDERSTANDS THAT THESE TWO COMPANIES ARE A THREAT TO ONE ANOTHER. WHAT IS NOT QUITE UNDERSTOOD IS
THE RISK OF THE HYPERSCALERS. MICROSOFT, THEIR CLOUD INFRASTRUCTURE IS A SIGNIFICANT CHUNK OF DATABRICKS REVENUE AND MICROSOFT SAID LAST MONTH THAT THEY ARE IS A -- THEY ARE A COMPETITOR NOW AND DATABRICKS HAS SPENT A LOT OF ENERGY CUT -- TOUGHENING THAT STANCE. CAROLINE: AGAIN AND AGAIN THERE IS A FIGHTING AMONG WHAT IS THE CHEAPEST OFFERING.
BUT WILL PRICE, INTUIT WHEN YOU HAVE MICROSOFT AS THE JUGGERNAUT WHICH IS SO EASY TO INTEGRATE WITH? BRODY: WHAT IS FUNNY IS THAT MOST THEY THAT I.T. PURCHASERS DO NOT FULLY SPEND ON PRICE. THEY WANT FUNCTIONALITY BUT AT THE END OF THE DAY, THE EASIEST THING TO DING YOUR COMPETITOR ON IS LUCK HOW EXPENSIVE THEY ARE. IT IS NOT SURPRISING THAT EVERY
COMPANY INVOLVED IS SAYING THIS. ED: CHECK OUT THAT DEEP DIVE IN THAT FEATURE ON BLOOMBERG.COM. WEDNESDAY, COMPLETED AND IN THE BAG. CAROLINE: HOW COULD THAT BE DONE? SO MUCH TO DIGEST, WE BRACE FOR CISCO AND SAYS IT ALL. ED:
FOR AUGUST NEWS FLOW THINGS GOING WELL. DO NOT FORGET TO RECAP ON THE PODCAST. YOU KNOW WHERE TO FIND IT ON THE BLOOMBERG TERMINAL, APPLE, SPOTIFY AND IHEART.
THIS IS BLOOMBERG TECHNOLOGY. ♪
2024-08-18 03:32
