Intel's Chips Grant, California Vs. Tesla | 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, THIS IS "BLOOMBERG TECHNOLOGY." COMING UP, INTEL SECURES AN EIGHT BILLION DOLLARS GRANT FOR ITS U.S. CHIP FACTORY EXPANSION AFTER MONTHS OF TRYING TO CONVINCE WASHINGTON IT CAN EXECUTE ON ITS VISION. CALIFORNIA PROPOSES STATE INCENTIVES FOR EV BUYERS WHICH COULD EXCLUDE TESLA'S MODELS. SOCIAL MEDIA COMPANIES PUSH BACK AGAINST NEW LEGISLATION IN AUSTRALIA THAT IS GOING TO THE COURTS THAT COULD LIMIT TEEN USAGE.
FIRST, LET'S CHECK ON THESE MARKETS. WE ARE CURRENTLY HIGHER. WE ARE MANAGING TO SHORT OFF SOME OF THAT ANXIETY IN AROUND GEOPOLITICS. WE ARE GOING TO BREAK IT DOWN FOR YOU LATER, BIG TECH MANAGING TO LEAD US HIGHER. THE S&P 500 ON TRACK FOR
ANOTHER SET OF RECORDS. THE NASDAQ IS UP FOR FOUR STRAIGHT DAYS. WE WANT TO LOOK AT SOME OF THE INDIVIDUAL MOVERS. WE HAVE SOME DRIP FEED AROUND
EARNINGS THAT HAVE COME AFTER THE BELL. I WANT TO LOOK AT ZOOM AND ANOTHER KEY CHIPMAKER. ZOOM DOWN 7.9%. DID NOT LIVE UP TO EXPECTATIONS
IN TERMS OF ITS GROWTH FOR ITS FISCAL THIRD QUARTER. MOST NOTABLY THIS STOCK HAS RUN UP HARD SINCE AUGUST. SOME 60% HIGHER. SOME ANALYSTS SAYING IT SHOWED SOLID NUMBERS BUT NOT AS GOOD AS MARKET WERE PRICING IN. ANALOG DEVICES DOWN 1%. HAD BEEN RALLYING AFTER THEY
SHOWED STRENGTH IN TERMS OF AUTO SALES AND CHIPS, BUT NOW TAKING A TURN INTO THE RED. LET'S STICK WITH CHIPS. INTEL SECURING SEVEN POINT $9 BILLION IN FEDERAL GRANTS. THE DEAL IS MARKING THE LARGEST-EVER DIRECT SUBSIDY FROM A PROGRAM AND THIS IS TO BOOST U.S. CHIP PRODUCTION. SOURCES TELLING BLOOMBERG INTEL WILL GET THE MONEY IN ARIZONA, OREGON, AND NEW MEXICO. WE HAWKINS JOINS US NOW. OHIO -- MCKENZIE HAWKINS JOINS US NOW. OHIO NOT ON THIS LIST BECAUSE IT IS NOT FAR ENOUGH DOWN THE ROAD IN TERMS OF BREAKING GROUND. DO WE STAND IN TERMS OF
BUILDING. -- BUILDING? >> INTEL'S AWARD SUPPORTS PROJECTS ACROSS FOUR U.S. STATES BETWEEN NOW AND 2030, BY WHICH TIME INTEL EXPECTS TO SPEND 90 BILLION ON CAPEX PROJECTS. -- $90 BILLION ON PROJECTS. IT WILL TAKE A WHILE FOR THE MONEY TO GO OUT THE DOOR AND MAKE IT INTO INTEL'S HANDS. THE FIRST $1 BILLION OF THAT WILL HAPPEN THIS YEAR BECAUSE INTEL HAS ALREADY MADE PROGRESS ON PROJECTS IN ARIZONA, NEW MEXICO, AND OREGON. OHIO CONSTRUCTION WAS SUPPOSED
TO FINISH BY LATE 2026. NOW ONE OF THE FACILITIES WILL NOT BE ONLINE UNTIL THE NEXT DECADE. PAT VENTED SOME -- CAROLINE: PAT VENTED SOME FRUSTRATION ABOUT HOW HARD IT HAS BEEN TO GET MONEY FROM THE U.S.
GOVERNMENT. THIS IS LESS THAN PREVIOUSLY ESTIMATED. >> IT HAS BEEN A VERY LONG PROCESS FOR INTEL AND THE OTHER COMPANIES. INTEL'S AWARD WAS ANNOUNCED THAT A PRELIMINARY STAGE IN MARCH FOR A .5 BILLION DOLLARS
AND SINCE THEN THE COMPANY HAS BEEN GOING THROUGH DUE DILIGENCE. THERE HAVE BEEN DISAGREEMENTS ABOUT HOW MUCH INFORMATION INTEL HAS TO DISCLOSE TO THE GOVERNMENT AND ALSO ABOUT TERMS SPECIFYING WHAT HAPPENS IF INTEL SPINS OFF ITS MANUFACTURING BUSINESS OR IS ACQUIRED. THAT IS A PRETTY TENSE DISCUSSION WITH INTEL WHERE THEY ARE GOING THROUGH SOME SERIOUS FINANCIAL PROBLEMS AND THERE HAVE BEEN CONVERSATIONS WITH OTHER PLAYERS ABOUT POTENTIAL M&A. HAIRCUT INTEL TOOK ON ITS AWARD
IS NOT BECAUSE OF THOSE BUSINESS PROBLEMS. IT IS BECAUSE THE COMPANY IS SEPARATELY GETTING $3 BILLION TO GET CHIPS -- TO MAKE CHIPS FOR THE PENTAGON. THAT WAS SUPPOSED TO BE MOSTLY HOPE AND -- THAT WAS SUPPOSED TO BE MOSTLY-FUNDED BY THE PENTAGON. SOME OF THAT CAME FROM THE MONEY ALREADY SET ASIDE FOR INTEL. ED: BREAKING DOWN THEN THE --
CAROLINE: BREAKING DOWN THE NUMBERS, MCKENZIE HAWKINS. STICKING WITH THOSE M&A REPORTS PREVIOUSLY, QUALCOMM'S TAKEOVER INTEREST IN THE COMPANY IS GROWING. THE COMPLEXITIES ASSOCIATED WITH ACQUIRING INTEL HAVE MADE IT LESS ATTRACTIVE TO QUALCOMM. A DEAL WOULD TEST THE DEAL WOULD HAVE BEEN ONE OF THE LARGEST EVER IN TECHNOLOGY. MORE ON CHIPS AND TECH MORE BROADLY. AS WE BRING IN NANCY CURTIN. IT IS ALWAYS SO IMPORTANT TO
HAVE YOUR VOICE ON THIS SHOW. JUST DIG IN ON M&A, HOPES AROUND THIS NEW ADMINISTRATION COMING IN 2025, AND DEALS GETTING DONE, CHIPS BEING SUPPORTED OR NOT SUPPORTED AS A SECTOR. WHAT DO YOU MAKE OF IT? NANCY: LET'S START WITH M&A FIRST. WE THINK M&A WILL INCREASE. YOU HAVE PRETTY RIGOROUS MERGER GUIDELINES PASSED BY PRESIDENT BIDEN 2023. WE RECKON THOSE WILL BE UNDONE
UNDER PRESIDENT-ELECT TRUMP. REMEMBER, THEY HAD LOWERED THE GUIDANCE THRESHOLD. THE COMPANY, BEING SEEN AS ANTICOMPETITIVE. WE DO INC. IT IS GOING TO BE A FRIENDLIER
ENVIRONMENT FOR M&A AND EXPECT THAT ANIMAL SPIRITS, M&A, AND IDEAS WILL PICK UP IN 2025. WE THINK THIS IS ONE OF THE POSITIVES COMING FROM TRUMP. JUST QUICKLY ON THE CHIPS ACT AND INTEL, ARE WE BACK IN -- BACKING THE WRONG HORSE THERE? THIS IS SUPPOSED TO CREATE JOBS. THEY JUST LAID OFF 50% OF THE WORKFORCE. NVIDIA DID NOT GET ANY MONEY
FROM THE CHIPS ACT AND IS ACTUALLY DOING A PRETTY DARN GOOD JOB OF ACTUALLY SUPPLYING THE CHIPS INDUSTRY. I THINK THIS IS A PROGRAM THAT IS HARD TO CHANGE AND REMOVE THESE LEGISLATIVE PROGRAMS. IT IS NOT A PROGRAM THE PRESIDENT -- THAT PRESIDENT-ELECT TRUMP FAVORS. I THINK HE CALLED IT A REALLY BAD PROGRAM, SO STAY TUNED. CAROLINE: ON NVIDIA, THOUGH, THEY BASICALLY GET TSMC AND OTHER CHIPMAKERS TO PRODUCE.
THIS IS ABOUT ON ENSURING -- ON ENSURING -- ON-SHORING. WHETHER SELLING INTO CHINA OR A SUPPLY CHAIN RELATED TO TAIWAN, HOW DOES THAT FACTOR INTO AN INVESTMENT THESIS? NANCY: AS YOU KNOW, TRUMP HAS SAID TARIFF IS THE MOST BEAUTIFUL WORD IN THE ENGLISH LANGUAGE. MAYBE TRUMP JUST USED SOME TARIFFS HERE ON TSMC, BECAUSE THAT WOULD ENCOURAGE THEM TO THINK ABOUT -- BY THE WAY, THEY WERE PART OF THE CHIPS ACT AS WELL. THEY DID RECEIVE SOME SUBSIDIES THERE.
THAT MIGHT ENCOURAGE THEM TO ACCELERATE PRODUCTION IN THE UNITED STATES. HOW WILL NVIDIA RESPOND? I DON'T KNOW, WITH 74% GROSS MARGINS, AND IT SEEMS LIKE INSANE DEMAND IN JEN-HSUN HUANG'S WORDS, THEY ARE JUST GOING TO RAISE PRICES. IF WE GET SOME TARIFFS ON TSMC, WHICH I WOULD NOT BE SURPRISED, I JUST THINK NVIDIA WILL END UP PASSING DOWN ONTO ITS DEMAND-HUNGRY CUSTOMERS. CAROLINE: IT FEELS LIKE YOU HAVE SOME NUANCE ABOUT WHICH HORSES YOU SHOULD BACK, BUT THAT THE WINNERS ARE UNLIKELY TO CONTINUE WINNING INTO THE NEXT ADMINISTRATION. IS IT STILL GOOD TO BE LONG
TECH HERE? NANCY: LET'S TALK ABOUT THE WINNERS IN SEMI CONDUCTOR. AT THE END OF THE DAY NVIDIA IS CLEARLY IN MONOPOLY POSITION. OR DEMAND THAN SUPPLY. BUT COMPETITION IS COMING. REMEMBER, 40% OF THEIR DATA CENTER CUSTOMERS ARE ALSO TRYING TO COMPETE WITH THEM. AMAZON IS COMING PRETTY CLOSE HERE IN DEVELOPING A CHIP.
I UNDERSTAND IT IS 40% CHEAPER. NOT REALLY SURE THE PERFORMANCE BENCHMARKS. THEY HAVE NOT BEEN PUBLISHED AND IT IS NOT CLEAR IT IS IN PRODUCTION MODE, SO TO SPEAK SO, LET'S SEE WHAT HAPPENS. TO A CERTAIN EXTENT AMD AND
INTEL ARE TRYING TO BE COMPETITORS AS WELL. COMPETITION IS ON THE WAY, AND WE SHOULD EXPECT TO SEE MORE OF THAT. YOU KNOW, PEOPLE ARE LOOKING AT THE PRICE OF NVIDIA CHIPS, THE FACT THAT THEY CANNOT GET ACCESS, AND ARE TRYING TO DIVERSIFY THEIR SUPPLY SOURCES. THAT MAKES SENSE, RIGHT? WE DO EXPECT COMPETITION TO COME AS WE LOOK FORWARD. I DO NOT SAY THIS AS QR. NVIDIA SHOULD HAVE ANOTHER BLOCKBUSTER QUARTER.
THEY EXPECT REVENUES TO BE UP 70% IN THE NEXT QUARTER, AND THEY NORMALLY BEAT THAT NUMBER. CAROLINE: CUSTOMERS LOOK AT THE PRICE OF THE CHIPS. INVESTORS LOOK AT THE PRICE OF THE STOCK.
WITH NVIDIA TRADING 56 TIMES FUTURE EARNINGS MANY HAVE BEEN TAKING A BIT OF PROFIT. WHEN YOU LOOK AT TESLA, WHICH IS TRADING AT 141 TIMES FUTURE EARNINGS, WHAT DO YOU MAKE ABOUT THE OPTIMISM BAKED INTO THAT STOCK POST-ELECTION? NANCY: TESLA IS CLEARLY A SPECIAL CHILD AT THE MOMENT, GIVEN THE RELATIONSHIP BETWEEN ELON MUSK AND TRUMP. THESE STOCKS, THESE MAGNIFICENT SEVEN, ON AVERAGE THEY ARE AT ABOUT 35 TIMES FORWARD EARNINGS. THAT MAKES THEM VERY VULNERABLE TO DISAPPOINTMENT, RIGHT? ONE OF THE THINGS WE HAVE HAD THIS YEAR IS TECH IS FINE, WE BELIEVE IN GENAI, YOU NEED TO DIVERSIFY. BEYOND TECHNOLOGY SHARES THAT HAVE FUELED THE MARKETS ADVANCE. WE THINK MADE CAP IN
PARTICULAR, TRADING AT 13, 14 TIMES EARNINGS, IS AN EXCELLENT BENEFICIARY OF MAGA, POTENTIALLY CORPORATE TAX RATE CUTS, AND A BETTER OUTLOOK FOR GROWTH IN THE UNITED STATES. THERE ARE OTHER THINGS YOU CAN DO AND DIVERSIFY AWAY FROM TECH. EARNINGS ARE EXPECTED TO DECELERATE IN THE SO-CALLED MAGNIFICENT SEVEN AS WE HEAD INTO 2025, WHERE THEY ARE SUPPOSED TO ACCELERATE IN THE REST OF THE MARKET. I THINK THAT IS A NICE WAY TO STILL EARN A RETURN, PARTICIPATE, BUT PROTECT SOME OF THAT VALUATION, POTENTIAL DOWNSIDE RISK IN TECH. CAROLINE: NANCY CURTIN, ALWAYS GREAT TO
CATCH UP. MEANWHILE, LET'S TALK ABOUT CHINA'S XA OMI READYING A CHIP. ACCORDING TO SOURCES MASS PRODUCTION OF THE CHIP IS EXPECTED TO BEGIN IN 2025. COMING UP, IT IS DEJA VU. PRESIDENT-ELECT DONALD TRUMP RATTLING MARKETS WITH MORE TARIFF THREATS. WE DISCUSSED THE POTENTIAL IMPACT ON THE TECH SECTOR NEXT.
WE WERE JUST LOOKING AT TESLA WITH NANCY. LET'S DWELL ON IT MORE. UP 1%. WE RECOVERED FROM YESTERDAY'S SELLOFF. WE WILL DIG IN ON WHAT CALIFORNIA IS CURRENTLY THREATENING I'M A HOW THEY COULD BE EXCLUDING THEM FROM SUPPORT FOR EV'S. THIS IS "BLOOMBERG TECHNOLOGY." CAROLINE: PRESIDENT-ELECT DONALD TRUMP TOOK TO TRUTH SOCIAL TO VALLOW ADDITIONAL TARIFFS. HIS FIRST SPECIFIC THREAT TO TOP TRADING PARTNERS OF THE UNITED STATES. ARK SHEPHERD JOINS US NOW FOR
MORE. HE PROMISED IT ON THE CAMPAIGN TRAIL AND HE IS ONCE AGAIN CONFIRMING. MARK: HE IS TAKING A STEP FORWARD, CAROLINE. THIS IS WHAT THE PRESIDENT-ELECT HAD BEEN TELLING HIS SUPPORTERS ALL ALONG. THAT HE WOULD BRING MANUFACTURING BACK USING TERRACE AS HIS PRIMARY WEAPON.
NOW HE IS THREATENING TERRACE FOR SOMETHING ELSE. THIS IS TO EXTRACT POLICY CONCESSIONS FROM AMERICA'S KEY TRADING PARTNERS. WITH CANADA AND MEXICO IT IS HIS CONCERN ABOUT THE BOARD. WITH CHINA, HE IS TRYING TO GET AGING TO COOPERATE TO STEM THE FLOW OF FENTANYL IN THE U.S., WHICH HAS BEEN BLAMED FOR A
SURGE IN OVERDOSE DEATHS IN RECENT YEARS. WE ARE SEEING TERRACE BEING APPLIED NOT PURELY ECONOMICALLY, BUT TO ACTUALLY GET A POLICY GOAL OUT OF KEY U.S. COUNTERPARTS. CAROLINE: SOME OF THOSE POLICY GOALS, THE ONES WE HEARD IN THE PREVIOUS ADMINISTRATION TOO, THE MARKET IS TAKING IT IN STRIDE. I'M WONDERING WHETHER PEOPLE
FEEL THERE WILL BE CARVEOUTS, WHETHER THIS SPECIFICALLY HITS CERTAIN INDUSTRIES, MIKE? MICHAEL: THERE ARE SO MANY UNANSWERED QUESTIONS AROUND THIS, BECAUSE HE REALLY JUST KIND OF DROPPED IT ON TRUTH SOCIAL LESS THAN 24 HOURS AGO AND WALKED AWAY. HIS TRANSITION TEAM HAS NOT ANSWERED ANY FURTHER QUESTIONS ABOUT, JUST AS YOU SAY, WILL THERE BE CARVEOUTS? IS THIS IN ADDITION TO THE TARIFFS HE HAD ALREADY BEEN THREATENING AGAINST GOODS COMING IN FROM CHINA? LIKEWISE, WHAT DOES THIS MEAN FOR THE AGREEMENT HE FORGED TO REPLACE NAFTA DURING HIS FIRST TERM IN OFFICE? IN ANY CASE THIS WILL HAVE A MAJOR RIPPLE EFFECT ON THE ECONOMY AND ON SUPPLY CHAINS. IT WOULD AFFECT AUTOS. IT WOULD AFFECT VERY SIGNIFICANTLY THE TECH TRADE WITH CHINA. WE DO A HUGE AMOUNT OF BUSINESS WITH CHINESE COMPANIES, SENDING THEM LEGACY SEMI CONDUCTORS, GETTING FINISHED COMPUTERS BACK. ALL OF THAT WOULD BE ROILED BY THIS AND WE WOULD HAVE TO WATCH THOSE TRADING PARTNERS TO ASSESS -- AS MEXICO WANTED MIGHT DO TODAY -- WHETHER THEY MIGHT RETALIATE IN KIND.
CAROLINE: WE REALLY APPRECIATE YOU TAKING US THROUGH WHAT IS AT THE MOMENT JUST A STATEMENT ON TRUTH SOCIAL. LET'S TRY TO EXTRAPOLATE AND OUT WITH MARY LOVELY, SENIOR FELLOW AT THE PETERSON THE TWO. MIKE WAS DISCUSSING HOW THIS WILL AFFECT AUTOS.
WHAT ARE THE RAMIFICATIONS ON THE AUTO SECTOR, DO YOU THINK? >> IT IS GREAT TO BE WITH YOU. FIRST OF ALL, WHEN WE ARE TALKING TRADE WITH CANADA AND MEXICO THE FIRST UP HAS TO BE THE AUTO SECTOR. IT IS THE MOST IMPORTANT EXPORT OTHER THAN FUEL FROM CANADA THAT COMES FROM OUR TWO USMCA PARTNERS. REDUCTION IS FULLY INTEGRATED BETWEEN THE U.S., CANADA, AND MEXICO. CERTAIN VEHICLES CAN GO BACK AND FORTH ACROSS THE BORDER SEVEN OR MORE TIMES BEFORE THEY ARE SENT TO AN AUTO DEALER.
THIS WOULD BE EXTREMELY DISRUPTIVE. WE WOULD IMAGINE THAT AUTO COMPANIES WOULD BE LINING UP TO TELL THE NEW ADMINISTRATION HOW HARMFUL THIS WOULD BE, NOT ONLY TO THE TWO COUNTRIES INVOLVED IN THIS, CANADA AND MEXICO, BUT TO THE UNITED STATES AND THE PLANTS IN THE UNITED STATES WAITING FOR THOSE PARTS. UNDOUBTEDLY IT WOULD LEAD TO DISRUPTIONS OF U.S. PRODUCTION. CAROLINE: AND INCREASE COSTS FROM A CONSUMER PERSPECTIVE. WHAT ABOUT THE SUPPLY CHAIN WHEN IT AFFECTS CHINA AND U.S. TECHNOLOGY COMPANIES HERE? HOW INTERTWINED DOES THE U.S.
REMAIN ON CHINESE PARTS AND GOODS? MARY: YEAH, SINCE THE FIRST TRADE WAR U.S. HAS DEPENDED LESS-STRONGLY ON CHINA, BUT WE HAVE TO REMEMBER THAT MANY OF THE ELECTRONICS DEVICES THAT WE KNOW AND LOVE WERE NOT ACTUALLY TAXED UNDER THE FIRST TRADE WAR. SO, FINAL ITEMS LIKE LAPTOPS, NOTEBOOKS, SMART WATCHES, CELL PHONES. NONE OF THOSE WERE ACTUALLY HIT WITH THE FIRST TRADE WAR TARIFFS. PERIPHERALS WERE, THINGS WE MAY USE WITH THESE DEVICES. SO, HE HAS ALREADY PROPOSED OR PROMISED A FLAT 60% ON CHINA.
YOU DON'T KNOW IF THIS EXTRA 10% THAT HE SENT OUT LAST NIGHT IS ON TOP OF THAT WAR PART OF THAT. EITHER WAY IT IS GOING TO BE EXTREMELY DISRUPTIVE, BECAUSE OUR COMPANIES HAVE NOT HAD TIME TO MOVE THESE SUPPLY CHAINS OUT OF CHINA. CAROLINE: TAKE APPLE FOR A CASE STUDY. THEY HAVE BEEN TRYING TO DEPEND
MORE ON INDIA, OTHER SOUTHEAST ASIAN COUNTRIES. WE JUST SAW TIM COOK TRYING TO ENSURE THAT RELATIONSHIPS REMAIN STRONG, BUT MANY UNDERSTAND TIM COOK HAS A DECENT RELATIONSHIP WITH THE INCOMING ADMINISTRATION. DO YOU THINK CEOS ARE ANTICIPATING CARVEOUTS? DO YOU THINK CEOS ARE ABLE TO MANAGE THIS WITHOUT PASSING IT ON TO A CONSUMER? MARY: I THINK THEY UNDERSTAND HOW DISRUPTIVE THIS WOULD BE AND THAT WE KNOW THERE ARE CONSTITUTIONAL LIMITS ON WHAT THE PRESIDENT CAN DO. HE HAS SHOWN A PENCHANT FOR TRYING TO BLOW PAST A LOT OF THE LIMITS PEOPLE HAVE TRIED TO PLACE ON HIM, BUT CAP -- BUT HE CANNOT REVOKE THE LAW OF ECONOMICS, AND THERE IS ECONOMICS THE MIDST OF WHAT HE CAN DO, OR AT LEAST ECONOMIC CONSTRAINTS ARE GOING TO CAUSE HIM A LOT OF TROUBLE. NOT ONLY IN INDIVIDUAL SECTORS, BUT ON THE INFLATION FRONT.
SOMETHING WHICH VOTERS HAVE SHOWN THEY DISLIKE INTENSELY. I THINK IT WOULD BE WISE THAT C-SUITE'S ARE ANTICIPATING THIS WILL BE EITHER SET UP WITH CARVEOUTS OR IT WILL BE ROLLED BACK IN TERMS OF THE ABSOLUTE AMOUNT HE IS GOING TO LEVY. SO, I THINK WE HAVE A LONG WAY TO GO BEFORE THIS SOCIAL MEDIA QUOTE BECOMES NEW TAXES ON TRADE. CAROLINE: HOW EFFECTIVE IN THE FIRST SITUATION WERE TARIFFS ON CHANGING THE FLOW OF GOODS OUT OF CHINA AND THE U.S.? REDUCING, PERHAPS, DEPENDENCE, OR INDEED THE OVERALL TRADE ACCESS, OR LACK THEREOF? MARY: I THINK WE SAW THE VALUE OF TRADE DROPPED BY ABOUT 30% BETWEEN -- WELL, U.S. AND CHINA. CHINA ALSO RETALIATED AGAINST THE U.S.
YOU WOULD CERTAINLY EXPECT TO SEE SOME RETALIATION AGAIN, NOT JUST FROM CHINA, BUT OUR OTHER PARTNERS. SO, IT HAD A SIGNIFICANT EFFECT ON TRADE FLOWS. THAT SAID, A LOT OF THAT TRADE WAS DIVERTED TO THIRD COUNTRIES. THERE IS VERY LITTLE EVIDENCE THAT ANY OF THAT ACTIVITY CAME BACK TO THE UNITED STATES. SOME OF IT FLOWED TO VIETNAM. SOME OF IT FLOWED TO PARTS OF SOUTHEAST ASIA. AND OF COURSE SOME OF IT WENT TO MEXICO, WHICH IS WHY WE HAVE SEEN ELECTRONICS AND ELECTRONIC DEVICES INCREASE WITH MEXICO. CAROLINE:
MARY LOVELY OF THE PETERSON INSTITUTE WORKING IT ALL DOWN. WE THANK YOU. TIKTOK PREPARING FOR A BILL THAT COULD IMPACT AUSTRALIAN CONSUMERS. THE YOUNGER ONES.
DETAILS NEXT. THIS IS "BLOOMBERG TECHNOLOGY." CAROLINE: MATTER, TIKTOK, GOOGLE, THEY ARE TAKING AIM AT -- THE GOVERNMENT IN AUSTRALIA IS PUSHING TO PASS THE BILL THROUGH PARLIAMENT THIS WEEK. SOCIAL MEDIA GIANTS WOULD BE RESPONSIBLE FOR POLICING THAT BAN UNDER THREATS OF FINES OF UP TO $32.5 MILLION.
LET'S BRING IN KURT WAGNER. 32.5 MILLION DOLLARS IS BUT A DROP IN THE OCEAN FOR ANY OF THESE COMPANIES. BUT WHAT IS TO FEAR HERE FOR
THEM? >> I THINK THE BIGGER CONCERN IS THAT THIS SERVES AS A BLUPRYNT OR TEMPLATE THAT OTHER COUNTRIES ARE GOING TO ADOPT, RIGHT? THE LAST THING THESE SERVICES ONE IS FOR TEENAGERS, YOUNG PEOPLE TO NOT BE ABLE TO USE THEIR SERVICES. BECAUSE THAT IS HOW THEY GET THAT NEXT GENERATION OF USERS. IF THIS ENDS UP WORKING IN AUSTRALIA FOR GETTING PAST AND EFFECTIVELY ENDING THAT CONNECTION THERE WOULD BE A REAL CONCERN ABOUT OTHER COUNTRIES, ESPECIALLY THOSE IN EUROPE, WHERE A GALATIAN ROUND THESE TECH COMPANIES HAS BEEN TIGHTER, THAT OTHER COUNTRIES WOULD TRY TO FOLLOW IN THEIR FOOTSTEPS. CAROLINE:
IT IS INTERESTING WE HAVE HAD ACTIVITY AROUND PROTECTING ON -- PROTECTING YOUNG PEOPLE, WHETHER IT IS WITH ROBLOX, OR INSTAGRAM. THEY HAVE HAD TEEN ACCOUNTS ROLLED OUT. META IS COMING OUT AND SAYING THIS IS GOING TO BE HARD TO ENFORCE. WE HAD A STATEMENT FROM META SAYING IT WILL REQUIRE EACH APP TO COLLECT BIOMETRIC DATA FROM ALL AUSTRALIANS AND TRYING TO MAKE OUT THAT THIS IS AN ISSUE OF FREE SPEECH AND IDENTITY HERE. KURT:
YEAH, I MEAN, THIS IS AN OLD PLAYBOOK FROM THEM, WHICH IS TO PUSH BACK AND SAY, THIS IS IMPOSSIBLE, TECHNOLOGICALLY WE CANNOT DO THIS. META IS NOT THE ONLY COMPANY TO SAY THOSE KINDS OF THINGS. AT THE SAME TIME, THOSE TEEN ACCOUNTS YOU MENTIONED ARE THE EXACT TYPE OF THING YOU WOULD THINK THEY COULD ROLL IN AUSTRALIA. THEY PUT TEENS INTO MORE STRICT SETTINGS, THEY REQUIRE ID OR SOME TYPE OF VERIFICATION BEFORE THOSE TEENS CAN AGE UP INTO AN ACCOUNT FOR 18-PLUS. WHILE I DO AGREE THAT IT PROBABLY IS A VERY TOUGH TECHNICAL CHALLENGE, I DON'T THINK IT IS NECESSARILY IMPOSSIBLE AND I THINK IT IS IN META'S BEST INTEREST TO GET ACROSS THE FACT THAT THIS IS A TOUGH CHALLENGE. THAT IS THEIR ARGUMENT. CAROLINE: ALL EYES ON HOW IT GOES THROUGH PARLIAMENT THIS WEEK. KURT WAGNER BEING ASKED TO WORK
HARD UP UNTIL THE HOLIDAYS. THANK YOU. YOU GOING TO BE DIGGING INTO CALIFORNIA'S PROPOSAL FOR STATE INCENTIVES FOR ELECTRIC VEHICLES, AND WHY THEY WOULD EXCLUDE TESLA'S. THIS IS "BLOOMBERG TECHNOLOGY." CAROLINE: WELCOME BACK TO "BLOOMBERG TECHNOLOGY." A QUICK CHECK ON THESE MARKETS
AND MORE SPECIFICALLY CRYPTO. THE ECOSYSTEM ADDED ABOUT $1 TRILLION SINCE THE ELECTION OF DONALD TRUMP. WE HAD SEEN A BIT OF A PULLBACK FROM CLOSE TO $100,000. WE HAVE COOLED DOWN SLIGHTLY. A PERCENT WIPED OFF. WE ARE NOW RECOVERING A LITTLE BIT.
PEOPLE LOCK IN PROFITS, MAYBE QUESTION SOME OF THE GEOPOLITICAL RISKS. BUT MORE BROADLY LET'S TALK ABOUT POLITICS POST-THE ELECTION OF TRUMP. IN PARTICULAR CALIFORNIA GOVERNOR GAVIN NEWSOM PROPOSING A STATE INCENTIVE FOR EV BUYERS. THAT IS IF FEDERAL SUPPORT WAS
TAKEN AWAY. IT WOULD EXCLUDE TESLA'S MODELS FROM A MARKET SHARE LIMITATION PERSPECTIVE. THIS MOVE IS AIMING FOR MORE CARMAKERS TO ENTER THE EV MARKET THAT COULD ESCALATE TENSIONS BETWEEN THESE TWO CHARACTERS. LET'S TALK ABOUT IT. THIS IS GAVIN NEWSOM TRYING TO
FRONT RUN ANY CHANGE FROM THE NEW ADMINISTRATION. IF THEY TAKE AWAY THAT 75 HUNDRED DOLLARS CREDIT FOR EV PURCHASERS CALIFORNIA WILL BE THERE TO STEP IN AND SUPPORT. BUT WHY LIMIT TESLA'S? >> THAT IS EXACTLY RIGHT. THIS IS NEWSOM COMING OUT AND
SAYING, IF TRUMP DOES TAKE THIS AWAY CALIFORNIANS ARE STILL GOING TO BE ELIGIBLE FOR ELECTRIC VEHICLE TAX CREDITS. THE PROPOSAL HE GAVE YESTERDAY SAID THIS MARKET SHARE LIMITATION, WHICH WOULD PREVENT TESLA FROM QUALIFYING, THEIR REASON FOR THAT IS THEY WANT TO SPUR COMPETITION OF SMALLER ELECTRIC VEHICLE MANUFACTURERS IN THE STATE AND THEY SAID THEY WANT IT TO TAKE ROOT IN THE STATE. ESSENTIALLY THEY ARE SAYING TESLA ALREADY HAS A HUGE MARKET SHARE IN THE STATE AND THEY WANT SOME OF THE SMALLER GUYS TO BE ABLE TO COMPETE. A LOT OF THESE OTHER ELECTRIC
VEHICLE MANUFACTURERS ARE LOSING MONEY. SOME OF THE TRADITIONAL OEM MANUFACTURERS ARE LOSING MONEY WHEN THEY SELL AN ELECTRIC VEHICLE. SO, THIS IS KIND OF AN INCENTIVE FOR THOSE SMALLER GUYS, WHILE TESLA IS MAKING MONEY EVERY TIME THEY SELL A CAR. CAROLINE: I CAN IMAGINE THIS IS GOING TO BE SEEN AS PUNISHMENT FOR SUCCESS. PUNISHMENT FOR BEING PROFITABLE ALREADY. WHAT DO YOU ANTICIPATE IN TERMS OF THE REACTION COMING FROM ELON MUSK? HE HAS NOT BEEN AFRAID TO HAVE PRETTY TOUGH WORDS FOR GAVIN NEWSOM IN THE PAST. ELIYAHU: YEAH.
ELON MUSK HAS COME OUT SWINGING AND CALLED THIS PROPOSAL "INSANE" AND CITED THAT TESLA IS THE ONLY CAR MANUFACTURER THAT IS PRODUCING CARS IN CALIFORNIA. THEY HAVE A LOT OF EMPLOYEES BASED IN CALIFORNIA. EVEN THOUGH THEY DID MOVE THEIR HEADQUARTERS TO TEXAS. I THINK IT DOES RAISE THE TENSIONS BETWEEN THESE TWO CHARACTERS.
CALIFORNIA IS BECOMING THIS FOIL TO THE TRUMP ADMINISTRATION, AND ELON MUSK HAS TAKEN A NEWFOUND PROMINENCE IN REPUBLICAN POLITICS. YOU ARE SEEING ELON MUSK AND NEWSOM BECOMING THESE EMERGING CHARACTERS THAT ARE REPRESENTING A NEW STATE OF POLITICS IN THE COUNTRY. CAROLINE: CALIFORNIA, THAT IS A MASSIVE ECONOMY. ELIYAHU KAMISHER, THANK YOU FOR BREAKING IT DOWN. LET'S KEEP THIS DISCUSSION GOING WITH CALDWELL. THE UNDERLYING DATA OF EV
SALES, THE SUCCESS STORY TESLA HAS, WHAT WILL THIS MEAN FOR COMPETITION? COULD IT SPUR COMPETITION? JESSICA: IT IS DEAFLY GOING TO SPUR COMPETITION. IF YOU ARE SHOPPING FOR A VEHICLE, ELIGIBLE FOR $7,500 REBATE, YOU ARE GOING TO SHOP BOTH VEHICLES. EVERYONE KNOWS WHAT TESLA IS. THEY HAVE A LOT OF BRAND RECOGNITION. BUT SOMETHING LIKE THIS IS GOING TO GET SHOPPERS TO CONSIDER OTHER THINGS.
A LOT OF TIMES THAT DOES END IN A PURCHASE. THAT A DOUBT TESLA WILL BE AT A DISADVANTAGE IF THIS GOES THROUGH. CAROLINE: SET THE CONTEXT HERE. $7,500, DOES THAT MEAN FOR THE PRICE POINT OF AN EV RIGHT NOW? THEY ARE NOT CHEAP AND $7,500 IS NOT SEEN THAT MUCH COMPARED TO THE COST OF A RIVIAN, FOR EXAMPLE. JESSICA: AS WE GO TOWARD THE MASS-MARKET CONSUMER THEY ARE LOOKING FOR CHEAPER CVS. $7,500 DOES BECOME PROBABLY MORE ATTRACTIVE, BECAUSE SOMEONE THAT IS BUYING A $100,000 EV, THEY ARE PROBABLY NOT BOTHERED BY THESE REBATES ANYHOW. WHEN IT IS CALCULATED OUT YOU
WERE LOOKING AT THE MONTHLY PAYMENT, THE 75 HUNDRED DOLLARS, ESPECIALLY FOR LEASE CUSTOMERS, THAT CAN MAKE A BIG DIFFERENCE AND MAKE THAT ATTRACTIVE AND GET CONSUMERS TO BUY. CAROLINE: CALIFORNIA, I'M ASSUMING, HAS BEEN AN EARLY ADOPTER TO EV'S MORE BROADLY WHEN YOU COMPARE STATE TO STATE. HOW MUCH OF THE MASS-MARKET IS STILL LEFT TO PENETRATE IN CALIFORNIA? JESSICA: THAT IS THE WHOLE THING. IN CALIFORNIA THE EV MARKET SHARE IS OVER 20%. YOU HAVE A LOT OF EARLY
ADOPTERS. EATING THE MASS-MARKET IS PROBABLY THE BIGGER CHALLENGE. THESE PEOPLE NEED CONVENTION. THEY ARE QUESTIONING WHETHER THEY WANT AN EV, SO IF THERE WAS EVER A TIME TO HAVE AN INCENTIVE ON EV'S IT IS FOR THE MASS-MARKET, NOT THE PEOPLE THAT WERE EARLY ADOPTERS AND PROBABLY DID NOT NEED MUCH INCENTIVE. CAROLINE: COMPARING STATE TO STATE WE KNOW NEWSOM HAS NOT BEEN AFRAID TO PUSH BACK AT ELON MUSK AND INDEED PERHAPS BE A KEY SUPPORTER OF THE EV SECTOR. WILL THIS BE REPLICATED ELSEWHERE IF FEDERAL SUPPORT DID COME AWAY? JESSICA: IT IS LIKELY. OTHER PEOPLE ARE FOLLOWING SOME OF THE CALIFORNIA RESOURCE BOARD, SOME OF THE THINGS THEY HAVE PUT OUT. IT IS A PRECEDENT OF OTHER
STATES CALL -- FOLLOWING CALIFORNIA'S LEAD. THIS PROGRAM DOES SOUND QUITE COSTLY, ESPECIALLY IF YOU SELL A LOT OF VEHICLES. THE STATE IS GOING TO HAVE TO FIND FUNDING, WHICH MAY BECOME THE KID. CALIFORNIA HAS A CLEAR ORDER, ZERO EMISSIONS BY 2035.
IF THAT IS THE CASE PROGRAMS LIKE THIS WILL HAVE TO EXIST TO SPUR THAT MASS-MARKET TO BUY. CAROLINE: IF THEY REALLY WANTED TO SPUR THE MASS-MARKET YOU WOULD ANTICIPATE THEY WOULD LET CHINESE EV'S IN, WHICH ARE MUST CHEAPER THAN U.S. COMPETITORS. GIVEN THAT THAT WILL NOT BE THE CASE, WHO WILL THIS END UP SUPPORTING? JESSICA: I THINK ANY AUTOMAKERS. THEY ARE SCRAMBLING IN THIS AREA OF AFFORDABILITY. PEOPLE ARE FEELING A LOT LESS
WEALTHY THAN THEY HAVE IN THE PAST. IT HAS BEEN A BIG ISSUE FOR CAR BUYERS. I THINK A LOT OF AUTOMAKERS ARE TRYING TO FOCUS ON THE LOW END. ANYONE DELIVERING GOOD VALUE, THAT HAS A $40,000 PRICE TAG, THEY ARE PROBABLY GOING TO GET A LOT MORE EYEBALLS THAN SOME OF THESE OTHER THINGS WE HAVE SEEN, LIKE THE JAGUAR COMING OUT. WERE SIX-FIGURE EV-TYPE OF VEHICLES. CAROLINE: JESSICA CALDWELL, WE THINK YOU, HEAD OF INSIGHTS OVER AT EDMONDS. CLIENT GETTING READY FOR THAT IPO.
WE WILL DISCUSS THE HEADLINES. AND WHAT IT MEANS FOR OTHER FINTECH COMPANIES THAT ALSO -- THAT MAY ALSO BE GOING PUBLIC. THIS IS "BLOOMBERG TECHNOLOGY." ♪ OUTCAST. THIS IS -- PODCAST. THIS IS BLOOMBERG. A GROUP OF FORMER GOOGLE AND STRIPE EXECUTIVES WHO HELPED THE ANDROID PLATFORM ARE NOW RAISING $56 MILLION FOR A NEW COMPANY. THIS ONE FOCUSED ON DEVELOPING AN OPERATING SYSTEM FOR AI AGENTS. SHRINK FRA JOINS US NOW.
EVERY OTHER MOMENT I SEEM TO BE READING ABOUT THE LATEST AI AGENT COMPANY, AND THIS ONE IS TO FOSTER AN OPERATING SYSTEM. >> THAT'S RIGHT. THE IDEA IS THEY ARE NOT BUILDING THE AGES THEMSELVES, BUT BECAUSE THEY BELIEVED THE FUTURE OF COMPUTING WILL NOT BE APPS, BUT THE NEXT EVOLUTION OF THESE AI AGENTS, THAT THEY WANT TO BUILD SOMETHING THAT WILL CONNECT ALL OF THESE AGENTS TO TALK TO EACH OTHER AND FOR DEVELOPERS TO BUILD ON ONE PLATFORM. KIND OF LIKE HOW WE HAVE ANDROID FOR OS. CAROLINE:
IT IS KIND OF LIKE DEV AGENTS, AS THEY ARE COMING OUT OF STEALTH. THIS IS THE NEW NAME. THEY HAVE SOME INTERESTING CHARACTERS. ALEXANDER WANG OF SCALE AI. THEY ALSO HAVE NIKESH AURORA. WHO ARE THE VCS BEHIND THIS AND HOW DID THEY FIND THEM? SHIRIN: INDEX IS LEADING THE ROUND. IT IS INTERESTING IS, THESE GUYS HAVE BEEN KNOWN FOR A LONG TIME IN SILICON VALLEY, HELPING BUILD THE ANDROID PLATFORM.
THE CEO IS ALSO A FORMER STRIPE EXECUTIVE. THESE PEOPLE, THESE INVESTORS HAVE NAMED THESE LEADERS FOR A WHILE, AND ACTUALLY THE LEAD PARTNER AT INDEX NEW THE FOUNDER BACK AT GOOGLE. THEY BOTH WORKED TOGETHER BRIEFLY AT GOOGLE. YEAH, IT IS A REALLY INTERESTING, I THINK, CASE STUDY OF WHAT YOU SEE THIS SORT OF FOUNDER MARKET FIT. WHERE PEOPLE HAVE A LOT OF
CONFIDENCE IN THIS GROUP TO EXECUTE ON THIS AMBITIOUS PLAN TO BUILD A NEW NETWORK THAT CAN CONNECT THIS FUTURE WAVE OF TECHNOLOGY WE ARE SEEING WITH AI AGENTS. CAROLINE: DAVID SINGLETON, SAYING WE NEED AN ANDROID-LIKE MOMENT FOR AI. MEANWHILE, LET'S DIG INTO FUNDING ROUNDS TO FUTURE IPOS AND EXITS. KLARNA, ANOTHER KEY FINTECH, WE UNDERSTAND IT ALMOST BROKE EVEN IN THE FIRST NINE MONTHS OF THE YEAR. THE COMPANY STATING THAT AS AN EYES THE MARKETS.
LET'S CHECK IN WITH KAMRAN ANSARI, WITH HEADLINE VENTURES. I'M INTERESTED IN KLARNA, HOW IMPORTANT, HOW INTEGRAL TO THE MARKET OPENING WILL ITS IPO BE? KAMRAN: WE HAVE NOT HAD A MAJOR TECH IPO IN MONTHS. WE HAD READ IT -- REDDIT, BUT IT HAS BEEN QUIET SINCE THEN. EVERYONE IS WAITING FOR THE ELECTION AND TO SEE WHAT HAPPENS WITH INTEREST RATES. I THINK KLARNA IS GOING TO BE
THE FIRST REAL TEST OF THE MARKET. CAROLINE: IN TERMS OF VALUATION THEY HAVE BEEN ON A VOLATILE RIDE. KAMRAN: CAROLINE: ROLLER COASTER. BOTH OF THESE COMPANIES WERE
CAUGHT UP IN THE EUPHORIA AROUND FINTECH AND HAD A SHARP REALIZATION OF WHAT VALUATIONS ARE. KAMRAN: I THINK KLARNA DID A SMART THING. THEY GOT OVER VALUATION NOSTALGIA. I WAS WORTH X BEFORE, I SHOULD
BE WORTH X NOW. IT'S NOT TRUE. THE MARKETS HAVE ADJUSTED. KLARNA WAS VALUED AT $46 BILLION AND THEY CAME DOWN AND DID A ROUND NEXT YEAR AT $7 BILLION. THAT IS A TOUGH PILL TO SWALLOW, BUT THEY DID IT. IT WAS A SOBER, GREAT DECISION
AND NOW THEY HAVE BUILT THEIR WAY BACK UP. THIS IPO WILL PROBABLY PRICE IN $15 BILLION, 20 BILLION DOLLARS, MAY BE HIGHER. THEIR MAIN COMP, THE STOCK IS UP 500% IN THE LAST COUPLE OF YEARS.
I THINK THEY ARE COMING OUT AT A GREAT TIME AND THEY ARE GOING TO HOPEFULLY APPROACH BACK TO WHERE THEY WERE, THAT THEY DID THAT RESET AND THAT WAS SMART OF THEM. CAROLINE: THE SECONDARY MARKET HAS BEEN SO ACTIVE AND SO MANY COMPANIES HAVE A DECENT CHUNK OF CHANGE. THEY DON'T NEED TO EXIT. STRIPE HAS BEEN BUYING BACK ITS OWN STOCK FROM PREVIOUS EMPLOYEES, THEY SO LITTLE NEED TO TAP THE MARKETS.
I SHOULD KLARNA OR STRIPE BECOME AN IPO? KAMRAN: IT IS A MARKETING EVENT. IT IS AN OPPORTUNITY TO SAY, HERE IS WHERE WE ARE. LIKE PARENTS MAY NOT HAVE HEARD OF KLARNA BEFORE, BUT NOW THEY WELL.
KLARNA CALLS THEMSELVES THE AI-POWER GLOBAL PAYMENTS NETWORK. SECOND, IT IS LIQUIDITY. IT DOES PROVIDE LIQUIDITY IN A DEEPER WAY THAN ANY PRIVATE FUNDING ROUND CAN. TWO EMPLOYEES, TO INVESTORS. THE OTHER THING THAT IS IMPORTANT IS ITS DEBTS -- IT SETS A PRICE POINT FOR YOUR STOCK. YOU CAN HIRE AND DO M&A. BEFORE IT IS ALWAYS THIS PARLOR GAME OF, WHAT IS THE STOCK WORTH? NOW YOU WILL KNOW WHAT IT IS WORTH. CAROLINE: I BELIEVE YOU BACKED A KLARNA SIMILAR THAT GOT LOCKED BY A BIGGER TECH COMPANY.
ARE WE GOING TO SEE MORE M&A IN THE SPACE? KAMRAN: I THINK SO. BREAD, IT IS A SIMILAR COMPANY, AND IN THE FINTECH SPACE WE HAVE SEEN VERY LITTLE M&A. PART OF IT HAS BEEN THE REGULATORY PROCESS WHERE PEOPLE ARE AFRAID THAT DEALS WILL GET BLOCKED. I THINK BELL INDICATIONS IN
2025 WE WILL SEE A MORE FRIENDLY ENVIRONMENT FOR M&A. I THINK FOLKS ARE LEANING INTO THAT NOW. THERE WAS A QUALCOMM DEALER WAS GOING TO HAPPEN. WE HAVE HEARD OF HUB SPOT-GOOGLE. THOSE DID NOT TURN OUT TO HAPPEN, BUT IN THE NEW YEAR YOU WILL SEE HIM IN A PICKUP. CAROLINE:
HOW DO YOU PREP YOUR OWN PORTFOLIO COMPANIES FOR THAT NEW ERA OF 2025? KAMRAN: THE THING HAS ALWAYS BEEN, CASH IS OXYGEN AND OXYGEN IS LIFE. THESE LAST COUPLE OF YEARS HAVE BEEN TRICKY IN THAT REGARD. COMPANIES HAVE BEEN RAISING DEBT ROUNDS, LOANS FROM BANKS, CONVERTIBLE NOTES TO BRIDGE AND GET THROUGH TO THE PERIOD WHERE HOPEFULLY THERE IS GOING TO BE MORE LIQUIDITY AND A BETTER ENVIRONMENT FOR EXITS. CAROLINE: WHAT ABOUT YOU AND YOUR THOUGHTS ON BUILDING UP HOLDINGS IN COMPANIES VIA THE SECONDARY MARKET OR GOING DIRECT TO WHEN THEY ARE DOING FRESH SALES? WHAT HAS THE ENVIRONMENT BEEN LIKE? HOW PURE IS IT AT THE MOMENT? OR IS IT WHO YOU KNOW IN THE BACK DOOR AND THEREFORE YOU ACCESS IT? KAMRAN: 10, 15 YEARS AGO SECONDARIES WAS ALWAYS WHISPERED AND THERE IS FAMOUSLY A MASSIVE SECONDARY FOR FACEBOOK STOCK. A LOT OF COMPANIES PUT LIMITS ON SECONDARY SALES. YOU CAN ONLY SYLLABUS -- SELL A
CERTAIN PORTION OR YOU CANNOT SELL IT ALL. BUT NOW YOU HAVE ALL OF THESE OTHER MARKETS, LIKE FORGE AND HIVE, WHERE YOU HAVING MORE LIQUID SECONDARY MARKET WHERE YOU CAN SEE THE MOST UP-TO-DATE PRICING. BUT IT IS STILL VERY EPISODIC. SOME DEAL HAPPENS AND A SIX MONTHS GOES BY, SO YOU ARE NOT SURE WHAT THE PRICING IS OF THESE SHARES AT ANY GIVEN MOMENT. CAROLINE: HOW DIFFICULT IS IT TO
UNDERSTAND SOME OF THE NUANCES IN THE DEALS? THE CONTRACTS ARE VERY INDIVIDUAL, AND SOME OF THESE VERY HOT COMPANIES ARE ABLE TO HAVE PRETTY TOUGH RULES ON HOW YOU SPEAK ABOUT THEM AND HOW YOU INVEST IN RIVALS. WHAT IS THAT LOOKING LIKE? KAMRAN: THE BIGGEST THING IS INFORMATION. INFORMATION RIGHTS ARE LIMITED BEFORE THEY ARE PUBLIC. YOU DON'T GET ALL OF THE RIGHTS. YOU DON'T GET ALL OF THE FINANCIALS. YOU ARE JUST TOLD, THIS IS THE
INFORMATION YOU GET, THIS IS THE PRICE, AND YOU HAVE TO LIVE WITH THAT. ONCE A COMPANY IS PUBLIC YOU GET THE INFORMATION AND IT IS A LEVEL PLAYING FIELD FOR EVERYBODY. IT IS A MUCH MORE RICH ENVIRONMENT FOR FOLKS TO BE ABLE TO INVEST WITH FULL INFO. CAROLINE: WE WILL SEE HOW THAT FULL INFO COMES TO BEAR.
COMING UP, WE ARE TALKING WITH A HOT CAR BACK UP START UP. A 1.4 BILLION DOLLARS OF VALUATION WITHIN ITS FIRST YEAR. EO IN'S CEO -- EON'S CEO IS JOINING THE SHOW. THIS IS "BLOOMBERG TECHNOLOGY."
CAROLINE: EON IS A CLOUD BACKUP STARTUP. IT WAS FOUNDED IN JANUARY OF THIS YEAR BY A GROUP OF WEB SERVICES ALUMNI, AND IT JUST CLOSED A NEW FUND AROUND EVALUATING THE COMPANY AT $1.4 BILLION. WE ARE GOING TO SPEAK ABOUT IT WITH THE CEO NOW.
YOU HAVE DONE THREE FUNDING ROUNDS IN YOUR FIRST YEAR OF EXISTENCE. TALK TO US ABOUT WHAT PROBLEM YOU ARE SOLVING. OFIR: IT IS ACTUALLY FOUR ROUNDS OF FUNDING. THE FIRST ROUND WAS LED BY SEQUOIA.
WHAT WE ARE DOING, WE ARE MAKING CLOUD BACKUP USEFUL. BECAUSE NOW THEY ARE NOT. AND IF YOU THINK, WHY SHOULD WE CARE ABOUT CLOUD BACKUPS? I MEAN, MY GRANDMOTHER HAVE BACKUP ON HER IPHONE, SO IT IS NOT THAT EASY IN THE CLOUD. ON PREMISE, EVERYONE HAVE EVERYTHING. IN THE CLOUD, COMPANY JUST MOVED THE LAST FEW YEARS.
THEY ARE SPENDING HUNDREDS OF BILLIONS OF DOLLARS ANNUALLY ON THE CLOUD, I'D OF WHICH 20% IS CLOUD SPEND. IT IS BACKUP SPEND. THIS IS A HUGE SPEND, AND TODAY IT DOES NOT WORK. IT IS VERY CUMBERSOME. IT IS A MESS AND IT IS NOT USEFUL. YOU CANNOT EVEN USE IT WHEN YOU
NEED IT, SO IT IS A BIG PROBLEM AND WE ARE HAPPY TO SOLVE THAT. CAROLINE: A W S SAW IT AS A PROBLEM AND BOUGHT YOUR PREVIOUS COMPANY. HOW LONG HAVE YOU BEEN FIXING THIS PROBLEM? HOW ARE THE WAYS THAT TECHNOLOGY IS CHANGING TO ENSURE IT IS LESS CUMBERSOME MOVING FORWARD? OFIR: WHEN WE WERE A PREVIOUS COMPANY, THEN AFTER BEING ACQUIRED BY AGE OF U.S., IN AWS -- EIGHT OF U.S. -- AWS -- EITHER MOVING TO THE CLOUD, AND APPARENTLY THEY COUNTERED MANY PROBLEMS. THEN HOW YOU MAKE SURE IT IS SAFE
AND YOU CAN ACCESS IT WHEN YOU NEED IT. WE HAVE SEEN IT FOR THE LAST 11 YEARS. MY PARTNER IS DOING THAT FOR EVEN MORE TIME THAN THAT. WE LEFT IT OF U.S. -- AWS, WHEN ENTERPRISE MOVED TO THE CLOUD THEY FORMED CLOUD OPERATIONS.
THESE ORGANIZATIONS ARE RESPONSIBLE FOR CLOUD RESILIENCE. 20% OF CLOUD SPEND, WHICH IS TENS OF BILLIONS OF DOLLARS ANNUALLY. BUT SIMPLY IT DOES NOT WORK.
THE SAME TECHNOLOGY SIMPLY DOES NOT WORK IN THE CLOUD. WE ARE HERE TO FIX IT IN TWO WAYS. ONE, WE WANT TO MAKE SURE WE ARE ABLE TO MANAGE ALL OF THE DATA FOR THE ENTIRE ORGANIZATION, HELP CLASSIFY EVERYTHING, UNDERSTAND WHAT IS IMPORTANT TO BACKUP, WHAT IS NOT, AND THEN WE ARE MAKING VERY EASY TO ACTUALLY ACCESS IT WHEN YOU NEED IT.
FOR EXAMPLE, COMPLIANCE BOTH INTERNAL AND EXTERNAL. LET'S SAY YOU ARE AN INSURANCE COMPANY AND YOU WANT TO ACCESS YOUR DATA. WHO KNOWS IF YOU HAVE BACKUP? IF YOU DO, HOW LONG WILL IT TAKE YOU TO GET THE DATA? TODAY IT COULD TAKE DAYS OR WEEKS. COMPANIES ARE MISSING COMPLIANCE AUDITS. CAROLINE: SEE YOU ARE THIS FIX. IT SOUNDS LIKE YOU HAVE THE OFFERING, SO WHEN YOU ARE GOING FOR YOUR FOURTH ROUND OF FUNDING WHY DO YOU NEED THE FUNDS? WHAT ARE YOU GOING TO BE SPENDING IT ON? OFIR: WE FIND OUT THAT THIS CATEGORY EMERGES, AND THERE ARE VERY BIG PROBLEMS THAT CUSTOMERS ARE HAVING.
WE WANT TO MAKE SURE WE HAVE EVERYTHING TO SOLVE IT QUICKLY AND AT AN ENTERPRISE LEVEL, BECAUSE THE PAIN IS ENORMOUS. FRANKLY, TODAY WHAT IS GOING ON IS A MESS. WITH ENOUGH FUNDING TO MAKE SURE WE ARE BUILDING A COMPREHENSIVE SOLUTION FOR THE ENTERPRISE, SO THAT WE ARE WELL-POSITIONED TO SOLVE THAT FOR EVERY COMPANY, BIG OR SMALL. CAROLINE: ENGINEERS, MARKETING, SALES, I'M SURE YOU WILL BE BRINGING ON A FAIR FEW. THANK YOU FOR YOUR TIME. THAT DOES IT FOR THIS EDITION
OF "BLOOMBERG TECHNOLOGY." DON'T FORGET TO CHECK OUT THE PODCAST. YOU CAN FIND IT ON THE TERMINAL, AS WELL AS ONLINE ON APPLE, SPOTIFY, ON IHEART. FROM NEW YORK, THIS IS
"BLOOMBERG TECHNOLOGY." ♪
2024-11-29 04:11
