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FROM THE HEART OF WHERE INNOVATION, MONEY AND POWER COLLIDE IN SILICON VALLEY AND BEYOND THIS IS BLOOMBERG TECHNOLOGY WITH CAROLINE HYDE AND AT THE. ED: I'M AT THE THOUGH IN SAN FRANCISCO. COMING UP WE WILL TALK EARNINGS ABOUT -- AS ORACLES HAS THE BIGGEST EARNINGS AND YEARS.
BITCOIN CONTINUES HIS RECORD-BREAKING RUN AS TWO POINT 7 BILLION FLOWDAN TO CRYPTO ASSETS LAST WEEK WE WILL DISCUSS THAT WITH THE DELTA PLOT -- WE WILL DISCUSS THEM IN SO MUCH MORE THROUGHOUT THE HOUR. LET'S GET TO MARKETS, A HOTTER THAN EXPECTED CPI PRINT THAT DROVE THE NARRATIVE. IN THE EQUITY SPACE IT WAS A NEGATIVE REACTION AT FIRST. WE HAVEN'T CHANGED HER MIND ABOUT THE IDEA THAT IF A RATE CUT IS COMING FROM THE FEDERAL RESERVE IS NOT COMING UNTIL JUNE. WE ARE NOW UP BY A PERCENTAGE POINT AND A LOT OF THE LEGWORK COMING FROM THE EARNINGS STORY.
SEMICONDUCTORS HIGHER. EVEN AS YOU SEE RATES CREEP I. THE 10 YEAR YIELD WAS CREEPING UP AND BITCOIN IS DOWN 1.36%. JUST ABOVE 71,000 U.S. DOLLARS PER TOKEN. TALKING ABOUT THIS UPSIDE AND EQUITIES IS PROBABLY ORACLE THAT ACCOUNTS FOR THAT. THE STORY, 20 5% TOPLINE GROWTH IN THIS CLOUD BUSINESS.
IF YOU LOOK AT THE ANALYST KNOWN THERE IS AN AI DETAIL WENT. LET'S GET RIGHT TO THE CONVERSATION AND BRING FORTH BRODY, BLOOMBERG ORACLE CHIEF. THE PERFORMANCE OF THE CLOUD UNIT, THAT WAS PRETTY GOOD. >> THEY BOOKED A LOT MORE BUSINESS THAN ANYONE EXPECTED IN THE EXECUTIVES ATTRIBUTED THAT TO THE CLOUD BUSINESS.
EVERYBODY NEEDS MORE CLOUD COMPUTING POWER, AI, TRAINING MODELS AND MASS DIGITALIZATION. THERE'S NOT ENOUGH COMPUTER POWER GOING AROUND. WE SHOULD SEE THAT TURN INTO REVENUE IN THE COMING QUARTERS. ED: ONE OF THE GREAT THINGS ABOUT YOU IS YOU CAN TAKE ANY TECHNOLOGY COMPANY ON PAPER CAN BE A BIT DRY. THE USE ALL THIS JARGON THAT WE DON'T UNDERSTAND AND IN ORACLE'S CASE, REMAINING PERFORMANCE OBLIGATION. IF ANYONE CALLED AND SAID THAT YOU WOULD FALL ASLEEP.
THIS IS A MIGHTY IMPRESSIVE BACKLOG OF BUSINESS IN THE STREET IS PAYING ATTENTION. BRODY: IT'S A BACKLOG, BUSINESS THAT IS BEEN SIGNED. THE REASON IT IS A BACKLOG BECAUSE THEY DON'T HAVE THE PHYSICAL SPACE. THE CLOUD'S DATA CENTERS IN VIRGINIA AND THEY NEED TO BUILD MORE OF THEM. IN THE NEXT YEAR THEY WILL SPEND 10 BILLION BUILDING OUT THEIR DATA CENTER PRESENTS AROUND THE COUNTRY. THINK OF THAT CAPEX COMPARED TO TWO YEARS AGO. THAT'S GIVING INVESTORS
CONFIDENCE THAT THEY ARE BUILDING UP THEIR FOOTPRINT IN RESPONSE TO CUSTOMER DEMAND. ED: I TALKED ABOUT THE AI TAILWIND AND THAT IS WHAT THE BULLS SEE. BUT WHAT IS ORACLE STORY AND HOW DO THEY FIT INTO WHAT'S GOING ON. BRODY: THERE IS SOME REAL THIRD-PARTY VOICES SAYING ORACLES CLOUD IS PARTICULARLY GOOD FOR TRAINING THESE AI MODELS THAT ARE NOTORIOUSLY RESOURCE INTENSIVE.
WE'VE HEARD OF A LOT OF FOLKS GOING TO ORACLE TO TRAIN THEIR MODELS AND THAT HIS AND FUELING SOME OF THIS DEMAND. THERE IS SOME SKEPTICISM. BRETT WAS ON HILL YESTERDAY SAYING THE CURRENT AMOUNT OF REVENUE AI WORKLOADS IS NOT MASSIVE. IN THE COMING YEAR AS THE AI BECOMES MAINSTREAM IN THE TECH STOCK THAT WILL INCREASE. ED: ORACLE, A REAL CONTRIBUTOR TO THE UPSIDE WE SEE AND EQUITIES PARTICULARLY IN THE EQUITY SECTOR. LET'S TURN TO ANOTHER TOP STORY. THE LATEST ELON MUSK LAWSUIT.
OPENAI IN A COURT FILING THAT THE BILLIONAIRES CLAIMS REST ON CONVOLUTED, OFTEN INCOHERENT FACTUAL PREMISES. THE SPRING IN BLOOMBERG'S AI REPORTER, RACHEL MUST. WHAT IS OPEN AI TRYING TO SAY HERE ARE NORMAL PEOPLE SPEAK? >> THEY ARE ECHOING T A NUMBER OF THINGS THAT THEY PUT UP IN A BLOG POST FROM LAST WEEK AND INTERNAL MEMOS WE GOT A HOLD OF. THEY ARE SAYING THERE WAS NO AGREEMENT FOR US TO DO WHAT YOU SAID AND WHAT YOU'RE SAYING IS IN CORRECT -- INCORRECT.
YOUR ARGUMENT IS INCOHERENT AND FUNNY ABOUT THIS IS A PROCEDURAL FILING. THEY WERE PUTTING IN THIS FILING TO SAY WE WANT THIS COURT CASE TO BE CLASSIFIED, IS KNOWN AS A COMPLEX CASE IN CALIFORNIA. IT WOULD GIVE IT A TINY BIT OF TREATMENT BY A JUDGE THEY CAN UNDERSTAND THIS STUFF AND GET IT DONE QUICKLY. ED:
ONE OF THE EARLY AI INVESTORS WAS ON THE SHOW IN ONE OF THE THINGS HE WAS ARGUING FOR IS OPENAI IS CRITICALLY IMPORTANT FROM A NATIONAL SECURITY STANDPOINT. IF THEY WANT TO BE COMPETITIVE IN AI WE NEED TO SUPPORT OPENAI IN DOING THAT AND ONE OF THE THING THEY DID WITH THIS FILING IS TO SAY, IF WE GO THROUGH WITH THIS LAWSUIT THE DISCOVERY PROCESS WILL GIVE AWAY ALL OF HER SEEKERS IN THE CONTEXT OF AI. >> THEY DID ARGUE THAT. TO BE FAIR, ONE COULD ARGUE THAT ANY DISCOVERY PROCESS MIGHT HAVE A RISK OF BRINGING UP THINGS YOU DON'T WANT SHARED WITH THE PUBLIC. AS PART OF WHAT MAKES IT INTERESTING TO THE REST OF US. HOPEFULLY WE WILL GET INTERESTING INFORMATION IN SOME OF THE THINGS THEY WANT TO KEEP HER PRIORITY WILL BE CAP KEPT PROPRIETARY. ED:
ANOTHER BIG STORY IN THE WORLD OF TECHNOLOGY NVIDIA AND ANOTHER SAID JOSH THEY ALLEGE NVIDIA BUILT THEIR MODELS ON THE LIBRARY OF PIRATED DIGITAL E-BOOKS THEY WERE FILED ON MARCH 8 AND THE JOINT DOZENS OF AUTHORS SUING TAPIA COMPANIES INCLUDING OPENAI AND META. BITCOIN HOVERS NEAR THEIR ALL-TIME HIGH. CAN THE CRYPTOCURRENCY RUN THE SUSTAIN 71 692 RIGHT NOW? ARM CHIP DESIGN FORM. THE LOCKUP ASCENDING IN THE CONCERN THAT THE INSIDERS ARE FREE TO SELL SHARES WILL DO SO. IT IS A STORY THAT HAPPENS FOR MANY IN THE POST CYCLE IF YOU THINK ABOUT THE NUMBER OF TECH NAME SET OF LISTED.
THIS IS BLOOMBERG TECHNOLOGY. ED: COINS RECORD-BREAKING BRAND SHOWED FEW SIGNS OF SLOWING WITH LARGE AMOUNT OF CAPITAL INFLOWS, STRONG DEMAND FOR THE CRYPTOCURRENCY RECENT ALL-TIME HIGH OF 72,881 ON MONDAY. WITH SOME INVESTORS EYEING A TARGET OF 80,000 U.S. DOLLARS IN THE MEDIUM-TERM. GRAYSCALE INVESTMENT IS LOOKING TO LAUNCH A CLONE OF THE WORLD'S LARGEST BITCOIN FUND, SAW MORE THAN 11 BILLION OF OUTFLOWS FROM HIS GB TC FUN.
LET'S GET THE ANALYSIS. THERE'S SOMETHING GOING ON IN THE SHORT-TERM AND THERE IS THE DEBATE ABOUT WHAT'S GOING ON IN THE LONG-TERM. THE STAR THE SHORT TERM. THE FLOW STATUS SEEMS TO IMPLY SUSTAIN MOMENTUM. GIVE ME YOUR ASSESSMENT OF THE HERE AND NOW? >> IF I LOOK AT THE SHORT-TERM I REALLY SEE THE DEMAND HAS SURPRISED A LOT OF PEOPLE'S EXPECTATIONS.
WE HAVE ALWAYS EXPECTED THAT BEFORE THE COIN IF THE PRICES GO UP BUT EVEN WITH THIS ALL PRESSURE, WE SEE THE BITE IS TOO MUCH. IT'S BEEN A VERY INTERESTING CYCLE FOR BITCOIN. ED: SOMETHING I'VE BEEN BRINGING UPON AARON THE LAST FEW DAYS THERE IS A SCENARIO WHERE THOSE WHO ARE BULLISH ON CRYPTOCURRENCIES ESPECIALLY BITCOIN, AND THOSE THAT ARE BEARISH ON BITCOIN SEEM TO AGREE ON ONE THING.
FROM WHERE WE ARE NOW, IS LIKELY BITCOIN GOES TO A HIGHER MILESTONE. WE TALKED ABOUT 80,000 AS A MEDIUM TERM CALL AND I'VE ALSO SEEN A HUNDRED THOUSAND BUT MANY AGREE THEY ALL PULLED BACK. WHAT'S YOUR UNDERSTANDING OF THE WHY BEHIND THAT? >> THE FIRST THING IS, AFTER THE BITCOIN HAVING WE SEE SOME SORT OF A PLATEAU, WE ARE ALSO EXPECTING A LOT OF PEOPLE THE INTEREST RATE TO BE CUT DOWN BEFORE THE ELECTIONS. THE ELECTIONS BRING JOSH WILL REDEFINE THE POLITICAL ROADMAP PROCRIT DO OR NOT SO MUCH PROCRIT DO.
BEYOND BITCOIN WE HAVE SEEN THE TECHNOLOGY LATERALLY WITH POLYGON AND SOLANO AND THAT WILL DEFINE THIS ROADMAP. ED: THERE'S AN INTERESTING NEWS STORY THIS MORNING WHERE THE RIKSBANK GOVERNOR, IS CENTRAL BANKER GAVE HIS OPINION THAT HE WANTED TO MINIMIZE BITCOINS INFLUENCE, PRESENCE IN THE FINANCIAL SECTOR. HE SAID I WANT AS LITTLE BITCOIN IS POSSIBLE IN THE SWEDISH FINANCIAL SYSTEM. WHAT YOU MAKE OF THE CENTRAL BANK IN LIKE THAT? >> WE HAVE SEEN THAT AGAIN AND AGAIN, EVERY BULL CYCLE WE SEE A REPUTABLE INSTITUTION SAYING THIS COULD BE A PROBLEM AND DID THE BEAR MARKET THEY SAID SEE, WE TOLD YOU IT WAS A PROBLEM. AND THEN MORE AND MORE
COUNTRIES STARTED USING IT. IT'S NOT NEW, SAYING THAT IS BEYOND ANY PARTICULAR STATE, CITY, COUNTRY ALL THE WAY TO THE U.S. WHERE WE DO HAVE BITCOIN ETF'S WHERE EVEN THREE YEARS BACK WILL IT EVEN EXIST OR NOT? ED: THE CENTRAL BANK GOVERNORS ARGUMENT IS NOT A THREAT TO FINANCIAL STABILITY BUT WORRIED ABOUT THE IMPACT ON CONSUMERS THAT MAY OR MAY NOT CHOOSE TO HOLD THAT IS A RISK ASSET. WHAT'S THE BIG PICTURE HAPPENING HERE BEYOND BUL BITCOIN? >> WE ALWAYS TALK ABOUT THE CLAIM IN CRISIS. IN FT BY SOME HOLLYWOOD ACTOR BUT THE REAL THING IS THE TECHNOLOGY AND THE DECENTRALIZATION OF THINGS USED BY SOME OF THE BIGGEST COMPANIES, INSTITUTIONS GLOBALLY. YOU ARE SEEING ALTCOINS, TECHNOLOGY TOKENS WHETHER IT IS POLYGON, OPTIMISM IS DOING WELL. I THINK IT'S ABOUT THE
TECHNOLOGY, ADOPTION AND SUPPLY CHAINS, AND I THINK WE NEED TO START TALKING ABOUT IN THE MAINSTREAM MEDIA ABOUT THE UNDERLYING TECH THAN JUST THE PRICE MOVEMENT. IT'S AMAZING WHEN YOU HAVE TRILLIONS OF DOLLARS TO TALK ABOUT BUT I THINK THE TECHNOLOGY SHOULD BE MAKING THE HIGHLIGHTS NOW. ED: ON THIS TECHNOLOGY IN THE LONG-TERM, THERE SEEMS TO BE BIPARTISAN NOT SUPPORT BUT PROBABLY ACKNOWLEDGMENT OF WHAT'S HAPPENING OF CRYPTOCURRENCY. DO YOU AGREE WITH THAT, THAT'S WHAT'S HAPPENING IN D.C. IN PARTICULAR? >> D.C. IS MUCH MORE INFORMED TODAY
THAT IT WAS 4, 5 YEARS BACK. AT THE SAME TIME WE SHOULD LOOK AT BLOCKCHAIN AS A TRUSTED TECHNOLOGY WHETHER IT'S A CASH CURRENCY OF THE COIN. YOU WERE JUST TALKING ABOUT OPENAI, YOU CAN GRAB DATA FROM ANYWHERE BUT THE VERIFICATION OF THE DATA HAS ALWAYS BEEN A PROBLEM. THAT'S WHAT GIVES YOU THE VERIFICATION OF DATA, OWNERSHIP OF THAT CONTENT AND WHO TO GIVE IT BACK TO. VERY SIMILAR TO WHAT THE NEW YORK TIMES AND NEWS MEDIA TRIED TO BLAME AND SUE GPT. AT THE END OF THE DAY WHETHER IT IS A BLOCKCHAIN, BITCOIN WERE TALKING ABOUT THE TRACEABILITY, VERIFICATION, DECENTRALIZATION TECHNOLOGY. MORE AND MORE PEOPLE ARE
GETTING INFORMED ABOUT IT BUT THE CHANNEL BLOCKING. PRICES ARE JUST TOO DIFFICULT TO GET AWAY FROM THE. ED: WE DIDN'T GET TO A THEORY ABOUT THERE'S A LOT OF INVESTMENT IN THE AREA HIM SYSTEM. --ETHERIUM SYSTEM. >> USING A CASE STUDY OF KATIE PORTER RUNNING IN CALIFORNIA.
LOOKING AT SHARES OF APPLE. APPLE WILL ALLOW YOU TO DOWNLOAD APPLICATIONS FROM THE WEB OUTSIDE OF IOS LOCALIZED ON THE DEVICE. IT DIDN'T DO MUCH FOR THE SHARES, 0% ON THE STOCK.
WE SAT DOWN WITH MORGAN STANLEY STRATEGIST MORGAN WILSON WHO HAD THIS TO SAY ON ARTIFICIAL INTELLIGENCE. >> WE DO BELIEVE IN AI, WE HAVE BEEN FRONT FOOTED ON THIS FRONT IN THE LAST YEAR, 1.5 YEARS. ED: IT IS TIME FOR TALK TECH, JAMIE DIMON HAS ONCE AGAIN HAILED AN OFFICIAL INTELLIGENCE POINTING TO THEIR UNBELIEVABLE POTENTIAL FOR THE BANKING SYSTEM. AI ACROSS FUNCTIONS LIKE RISK, FRAUD, MARKETING AND CUSTOMER RELATIONS HAS CAUSED IT TO GROW IN IMPORTANCE WITHIN THE COMPANY. IN THIS ELECTRONICS FIRM HAS HAD HIS INTRADAY SALES FOR A YEAR AFTER IT ANNOUNCED SELLING HIS LONG-AWAITED ELECTRONIC VEHICLES IS BUNK.
IT IS A RED-HOT CONTEST IN CHINA'S EV MARKET LED BY TESLA AND BYD AND LEGISLATION THAT WOULD FORCE TIKTOK'S CHINESE PARENT TO SELL ITSELF OR FACE A BAN IS PICKING UP SPEED AND CONGRESS PLACING A DO DEBT LIMIT AFTER PRESIDENT TRUMP SUGGESTED THE AD SHOULD NOT BE BANNED AFTER ALL YOUNG TIKTOK USERS WOULD GO CRAZY WITHOUT IT. LET'S STICK WITH TIKTOK AND TURN TO ITS CURRENT PLACE IN THE POLITICAL LANDSCAPE. EVERY ELECTION CYCLE ONE PLATFORM EMERGES AS A MEANS TO CONNECTING WITH YOUNG VOTERS IN THIS CYCLE IS POINTING TO TIKTOK BUT IS CAMPAIGNING ON TIKTOK EVEN WITH THAT? BLOOMBERG'S ALICE PARENCHYMA HAS DONE THE SCIENTIFIC REPORTING OF EXAMINING KATIE PORTER'S CAMPAIGN THAT RELIED HEAVILY ON TIKTOK. >> I LOOK TO KATIE PORTER AND ADAM SCHIFF WHO WERE THE FRONT RUNNERS IN THEIR PERFORMANCE ON TIKTOK.
PORTER IS KNOWN AS BELOVED TIKTOK HER. HER ENGAGEMENT RATES ARE BETTER THAN EVEN THE BEST INFLUENCE. WE WANTED TO SEE HOW THAT PLAYED OUT IN THE OPEN RACE FOR THE SENATE PRIMARY WHICH GOES TO THE TOP TWO VOTE GETTERS. KATIE PORTER WELL ARE PERFORMED ADAM SCHIFF. SHE HAD TWICE AS MANY VIEWS IN HER ENGAGEMENT RATES WERE STELLAR AND GOING INTO THE PRIMARY IN EARLY MARCH SHE WAS PULLING INCREDIBLY WELL WITH YOUNG VOTERS. THE VAST MAJORITY OF VOTERS UNDER 30 -- PORTER CAME IN THIRD WHICH MEANS SHE WILL NOT BE ON THE BALLOT. WHY?
THOSE YOUNG PEOPLE DID NOT SHOW UP. ONLY 10% WERE UNDER 30, 47% WORK OVER THE AGE OF 65 AND I DON'T KNOW IF THEY ARE SPENDING THEIR TIME ON TIKTOK. ED: I WAS UP ON SUPER TUESDAY HERE AT THE DESK COVERING CALIFORNIA. THE SAME NUMBER OF VOTERS OVER 65 AS UNDER 35.
I THINK THERE ARE ABOUT 170 MILLION USERS OF TIKTOK. JUST PUT THAT IN PERSPECTIVE WITH THE CONTEXT OF THIS BILL PLAYING IN D.C.. >> IN THIS PRIMARY LAYS BARE A PAIN POINT OF THE DEMOCRATS. THEY REALLY NEED YOUNG VOTERS TO SHOW UP. THEY SHOWED UP FOR BY THEN AND THE MIDTERMS. FOR THOSE 170
MILLION THEY SAY THEY OFTEN GET THEIR NEWS ON TIKTOK. THIS IS CERTAINLY A PLACE FOR POLITICIANS TO SPEND THEIR TIME BECAUSE THOSE TRADITIONAL TV AD DOLLARS THEY'RE LOOKING AWAY FROM THOSE TO REACH OUT TO VOTERS. IN NOVEMBER FOR A CAMP LIKE BIDEN WHO WAS ON TIKTOK IT'S NOT ONLY REACHING THEM IN SPEAKING THE INTERNET LANGUAGE LIKE KATIE PORTER WAS SO GOOD AT BUT ALSO GETTING THOSE FOLKS TO AGITATE AND ALIGN TO GET TO THE POLLS. FOR BIDED IN PARTICULAR AS HE BATTLES THE NARRATIVE AROUND HIS AGE, TIKTOK SEEMS TO BE A PLACE HE COULD BE RELATABLE, AUTHENTIC, A CANDIDATE FOR THOSE VOTERS.
HE WILL HAVE TO CLEAR SOME OF THE BARS TO NOT JUST VOTE WITH THEIR FINGERS BUT TO GET ON THEIR FEET AND HEAD OUT TO THE POLLS. ED: I RECOMMEND YOU READ THAT REPORTING ON KATIE PORTER ON BLOOMBERG. WE WILL TAKE THE PULSE OF THE IPO MARKET.
LET'S TAKE A LOOK AT THE MARKETS. THESE ARE YOUR MAJOR INDICES. AFTER THAT HOT CPI. MARKETS AND TRADERS WERE BRACED FOR THE WORST CASE SCENARIO BUT A REALITY, NOTHING HAS REALLY CHANGED. THEY ARE STILL BETTING A FIRST RATE CUT WILL COME IN JUNE IF IT ALL AND IF YOU LOOK AT THE NASDAQ 100, A SLIGHT OUR PERFORMANCE RELATIVE TO THE S&P 500 A BIG PART OF THAT IS ORACLE AND ITS EARNINGS. >> WELCOME BACK TO BLOOMBERG TECHNOLOGY WITH ED LUDLOW IN SAN FRANCISCO. READ ITS IPO IS STILL THE TALK OF CREDIT. LAST NIGHT THE COMPANY POSTED
AN AMA, AND ASKED ME ALMOST ANYTHING AND READ IT ADDED MEN'S INVITED WRITERS TO ASK QUESTIONS TO THE CEO, CFO THROUGH THE END OF MARCH 12. THEN READ IT --REDDIT PLANS TO RESPOND MARCH 18 IN A VIDEO BECAUSE LEGALLY IT CANNOT RESPOND IN THE COMMENTS. AS OF THIS MORNING THE MOST OF VOTED POST BY REDDITERS POSED THIS QUESTION. THE GENERAL CONSENSUS VIBE AMONG REDDIT USERS ABOUT IPO AND WHAT IT RETURNS FOR THE FUTURE OF THE SITE SEEMS EXTREMELY NEGATIVE.
WHY DO YOU THINK THAT IS? >> THAT SPEAKS TO US HISTORICALLY COMBAT OF REDDITERS HAVE ON THE WEBSITE. LET'S TALK ABOUT THE LISTING WITH THE COFOUNDER AND MANAGING DIRECTOR OF RAINMAKER SECURITIES. LET'S START WITH YOUR REACTION TO THE IDEA THAT THIS SHALL MEDIA COMPANY IS TRYING TO MARKET 8% OF THE OFFERING TO RIOTERS WHO DON'T SEEM TO LIKE THE COMPANY OFFERING.
GREG: IT IS SMART. CLEARLY THERE IS A RISK ED: --REDDIT SEES BEING A COMMERCIAL ENTERPRISE AT ALL AND SELLING THEMSELVES AS A PUBLIC COMPANY TRYING TO MAXIMIZE FOR PROFITS KIND OF VIOLATES THE RELATIONSHIP THEY HAVE WITH THEIR USERS THAT CONTRIBUTE A VAST AMOUNT OF CONTENT FOR FREE. NOW THE POTENTIAL COMMERCIALIZATION BECOMES A RISK FACTOR. HOW DO THEY MITIGATE THAT? THEY MAKE THEIR USERS AND THEIR CONTENT GENERATORS PART OF THE COMPANY. THEY GIVE THEM ECONOMIC INCENTIVE TO SAY POSITIVE THINGS ABOUT REDDIT. BECAUSE, NOW THEY WILL HOPEFULLY BE IPO SHAREOWNERS MOTIVATED TO SPEAK WELL OF REDDIT.
I THINK IT IS SMART, BUT THERE IS A RISK THAT THE REDDIT BACKLASH FROM PEOPLE THAT DON'T OWN SHARES OR PEOPLE THAT SHIRK THE OPPORTUNITY TO OWN SHARES BECAUSE THEY WANT TO REMAIN IN BOHEMIA COMMUNITY. THERE IS PART OF THAT RISK BUT I THINK IT IS PART OF WHAT REDDIT IS DOING. ED: THEY WERE FLEXING ON THE TIMING OF ALL THIS. I REMEMBER IN 2021 WHEN THEY CONFIDENTIALLY FILED. 2021 WAS THE BETTER YEAR FOR THE U.S. IPO MARKET. HOW DO YOU FRAME THE TIMING OF WHETHER THEY MISSED THE BOAT OR ACTUALLY WERE RIGHT TO WAIT UNTIL THIS POINT? GREG: LESSON, IT WOULD HAVE BEEN GREAT IF THEY COULD HAVE GONE OUT IN 2019 OR 2020 AND HAD A FEW YEARS OF THE ZERO INTEREST RATE ENVIRONMENT WE HAD.
SORT OF, TO SURE OFF THEIR AFTERMARKET PERFORMANCE. I THINK GOING PUBLIC AT THE END OF 2021 WAS A BIG MISTAKE. I THINK THEIR VALUATION WOULD HAVE BEEN HAMMERED.
THEY WOULD HAVE LOST THE AFFECT OF BEING A NEW PUBLIC COMPANY. THEY WERE CLEARLY WAY BEHIND IN REVENUE AT THAT POINT. THEY DID NOT HAVE AN AI STORY LIKE THEY ARE TRYING TO TELL NOW BEEF UP THEIR VALUATIONS. I THINK IT IS GOOD THEY DID NOT GO PUBLIC THEN. I THINK THE MARKETS ARE MORE FAVORABLE NOW FOR A LONG-TERM SUCCESSFUL STORY.
I THINK THEY WILL PRICE THEIR IPO AT A MORE REASONABLE VALUATION NOW THAN THEY WOULD HAVE IN 2020 ONE. -- 2021. ED: I WANT TO TALK ABOUT THE VALUATION AND ALSO AI. YOU SAID THEY ARE NOW TELLING THE STORY, THAT ESSENTIALLY, WHAT WE CAN DO IS LICENSE THE CONTENT THAT THOSE -- TWO DOES THAT WANT THE DATA TO TRAIN LARGE LANGUAGE MODELS OR FOUNDATION MODELS. HOW DOES THAT SOUND TO SOMEBODY DECIDING WHETHER OR NOT TO BUY GREG: INTO AN IPO? GREG:THAT IS THE MILLION-DOLLAR QUESTION. THERE IS NO DOUBT THE COMPANY TODAY IS 98% ADVERTISING REVENUE. IT IS A MEDIA COMPANY AND IT SHOULD TRADE MORE LIKE PINTEREST OR SNAPCHAT. THEY ARE TRYING TO PUSH A
NARRATIVE TO SELL MORE LIKE AN AI DATA COMPANY. THEY HAVE A LOT OF PROPRIETARY DATA THAT IS USER GENERATED CONTENT AROUND VARIOUS INTEREST GROUPS, WHETHER IT IS STOCKS, CARS, OR ALL KINDS OF GROUPS. THEY HAVE A LOT OF CONTENT TO THEIR USERS ARE GENERATING AND IT IS PROPRIETARY. THEY HAVE DONE DEALS ALREADY WITH GOOGLE. THEY TALKED ABOUT $200 MILLION OF DATA REVENUE OVER THE NEXT THREE YEARS INCLUDING AROUND A 60 MILLION-DOLLAR DEAL WITH GOOGLE. THEY HAVE ACTUAL REVENUE ASSOCIATED WITH THIS AI TRAINING MODEL. THE AI COMING ONTO THEIR SITE.
CRAWLING THROUGH THEIR DATA AND TRAINING ITSELF. THERE'S A STORY THERE. IT ALSO RUNS THE RISK OF INFLAMING THEIR USERS THAT ARE LIKE, YOU ARE SELLING MY DATA, HAVING AN AI TRADE ON ME AND I AM NOT GETTING AID FOR WHAT? THERE ARE RISKS TO THAT STRATEGY AS WELL BUT I THINK THEY ARE TRYING TO GET AWAY FROM BEING A PURE ADVERTISING NARRATIVE AND I THINK IT IS A GOOD STRATEGY TO LIFT THEIR VALUATION. ED: AT THE UPPER END OF THE RANGE $34 BY SHARE. 6.4 BILLION. HOW MARKETABLE IS THAT? PEOPLE PAY A LOT OF ATTENTION TO HEADLINE FIGURE ON VALUATION? GREG: THE COMPANY DID ABOUT $800 MILLION IN REVENUE LAST YEAR, ABOUT 20%. THAT IT'S KIND OF PEDESTRIAN
GROWTH. 98% OF THAT WAS ADVERTISING. IF YOU APPLY A FIVE X, SEVEN MULTIPLE TO THAT. YOU COME UP WITH A $4 BILLION-$6 BILLION VALUATION. $6 BILLION AT THE HIGH-END. FRANKLY IT SHOULD BE CLOSER TO FIVE. WE ARE SEEING TRAITS ON OUR
PLATFORM AT THE $4.8 BILLION-$5 BILLION RANGE IN THE PRIVATE MARKET BEFORE THEY HIT THE ROAD THIS WEEK. SO I THINK IT IS A STRETCH AND A QUESTION OF WHETHER THE MARKET WILL BUY INTO THIS EMERGING DATA AI STORY THEY ARE TRYING TO TELL. THEY DO HAVE SOME CONTRACTS. THEY DO HAVE SOME REVENUE. TO PUSH. OF TRADITIONAL SOCIAL MEDIA MULTIPLE THAT IS WHAT THE MARKET WILL HAVE TO BELIEVE. THAT IS WHY THEY SPEAK UP.
SAM ALTMAN WITH HIS BEING INVOLVED WITH THE COMPANY THERE IS A LOT AROUND THE AI STORY TO PUSH THAT MULTIPLE UP, BUT I THINK IT WILL BE A CHALLENGE. ED: I DON'T THINK THERE IS A SINGLE MEMBER OF ALEXIS OHANIAN AND OTHER COFOUNDERS IN THE X1. WHEN THEY STEP ON THE SHOW I WILL ASK ABOUT THAT. GREG ALWAYS KNOWS THE FULL SO WHAT IS GOING ON ON THE GROUND. COMING UP, WE DISCUSS THE
HEALTH OF THE CRYPTO INVESTING LANDSCAPE AND MORE WITH OUR THE COIN SHARES CEO JOINING US LIVE ON BLOOMBERG CRYPTO AT 12:00 P.M. EASTERN 9:00 A.M. PACIFIC. THIS IS BLOOMBERG. LET'S GET NEW THE. VENTURE CAPITAL FIRM EXCEL IS BACKING AN AI START UP THAT IS USING THE TECHNOLOGY TO KILL FINANCE PAPERWORK. IT USES ARTIFICIAL INTELLIGENCE TO HELP BUSINESSES SQUARE ACCOUNTS AND MANAGE BUDGETS AND RAISED $29 MILLION IN AN EARLY ROUND LED BY XL INDIA, Y COMBINATOR, ELEVATION CAPITAL, AND OTHERS TOOK PART IN THE SERIES BRINGING THE SAN FRANCISCO-BASED STARTUP'S TOTAL FUNDING TO $40 MILLION. LET'S TALK MORE ABOUT STARTUPS AND VENTURE WITH SALIL DESHPANDE ON TODAY'S VC STARTUP. HE IS THE FOUNDER AND GENERAL PARTNER OF UNCORRELATED VENTURES WHICH RAISED A NEW $315 MILLION FUND A FEW WEEKS AGO TO FOCUS ON SOFTWARE AND CRYPTO. FOR A SOLO GP THAT'S A BIG
CHUNK OF CHANGE. TWO FOCUSES FOR YOU TO CRYPTO. WHICH IS BIGGER? SALIL: INFRASTRUCTURE SOFTWARE IS AT THE LARGER FOCUS, 80% AND CRYPTO IS 20%. ED: WHY? SALIL: PARTIALLY MY BACKGROUND HAS ALL BEEN IN INFRASTRUCTURE SOFTWARE. A LOT OF CRYPTO'S INFRASTRUCTURE SOFTWARE. NOT ALL OF IT. BUT, PORTIONS OF IT ARE JUST
DECENTRALIZED INFRASTRUCTURE SOFTWARE. ED: HOW MUCH -- I DON'T KNOW HOW TO PUT THIS -- FEEL GOOD DOES SPACES LIKE INFRASTRUCTURE SOFTWARE, SAS MAY GET FROM WHAT IS HAPPENING IN AI? AS FAR AS I CAN TELL, THE VERY BASIC PITCH FOR AI IS IT IS A VALUE ADD TO EXISTING SOFTWARE PLATFORMS. SALIL: AI IS A SUBSET OF INFRASTRUCTURE SOFTWARE. SO, IT GETS A LOT OF FEEL-GOOD VALUE FROM AI. INFRASTRUCTURE SOFTWARE IS JUST
SOFTWARE THAT'S NOT APPLICATION SOFTWARE. SO, AI IS VERY VERY MEAN FRIENDLY -- MEME FRIENDLY NOW. THE SENTIMENT IS TOO POSITIVE. IT IS A HOT MESS. I WOULD LIKE TO BE INVESTING IN THE TOOLS AND THE TOOLCHAIN SLAYER. BUT THERE ARE TOO MANY COMPANIES. IT'S TOO CROWDED AND VALUATIONS ARE HIGH. THE LOWER LEVEL, HARDWARE, IS OFF-LIMITS VENTURE INVESTORS.
THAT IS THE REALM OF LARGER COMPANIES. DELAY OR ABOUT THAT, FOUNDATION MODELS, THOSE ARE ALSO TOUGH TO INVEST IN BECAUSE THEY ARE MORE LIKE OPERATING SYSTEMS THAT ARE TOUGHER TO MONETIZE THAN DATABASES THAT ARE EASIER. THE THIRD LAYERED, TOOLS AND TOOL CHAINS, IS THE BEST AREA FOR VENTURE INVESTORS, BUT IT'S A HOT MESS. THE FOURTH PLAYER, JUST USING AI OR LEVERAGING AI HAS BEEN, SO FAR, A BIT EASIER FOR ME TO INVEST IN. ED: YOU KEEP SAYING IT'S A HOT MESS. THERE MUST BE AN OPPORTUNITY OR
WAY TO NAVIGATE A HOT MESS BECAUSE YOU HAVE RAISED A SELLS A BOWL -- EIGHT SIZABLE FUN AND THE LPS MUST BACK YOUR VISION TO INVEST IN THAT PLAYER. SALIL: THERE ARE A LOT OF GREAT OPPORTUNITIES. THERE ARE JUST SO MANY COMPANIES THAT IS TOUGH TO WEED THROUGH ALL OF THEM AND FIND THE RIGHT ONES. WHEN YOU FIND THE RIGHT ONES AT THE VALUATIONS ARE VERY HOT. THEY CLOSE VERY FAST. SO IT IS TOUGHER TO PROSECUTE. I DO HAVE A HALF-DOZEN OR SO
SEED INVESTMENTS IN THAT AREA AND WE WILL SEE HOW WELL ED: DAN: DAN: THEY DO. MY NEXT QUESTION IS AT WHAT STAGE AND WHERE GEOGRAPHICALLY ARE YOU FINDING THE MOST SUCCESS INITIALLY? SALIL: SEE, SERIES A, SMALL CHECKS, AND SERIES B. GEOGRAPHICALLY U.S. OR WORLD MARKETS WITH AN
EXCEPTION FOR INDIA. ED: THE OTHER FOCUS OF THE FUND IS CRYPTO. I AM GUESSING CRYPTO ADJACENT STARTUPS ARE WORKING MORE ON UNDERLYING TECHNOLOGY, IS THAT RIGHT? AS OPPOSED TO ADDITIONAL TOKENS THEMSELVES. SALIL:
YES BUT SOMETIMES THE ONLY WAY TO INVEST IN THE PRODUCT IS TO BUY THE TOKEN. SOMETIMES YOU BUY EQUITY INDIVIDUALLY THE EQUITY CONVERTS TO TOKENS. BUT TO THE EXTENT IT IS DECENTRALIZED INFRASTRUCTURE IT IS IN SCOPE FOR ME. NOT ALL OF CRYPTO'S INFRASTRUCTURE. ED: $315 MILLION IS A SIZABLE FUND.
I AM INTERESTED IN THIS ECONOMIC ENVIRONMENT, IN THIS RATES ENVIRONMENT, WHAT THE LPS LOOK LIKE. WHERE YOU WILL -- WERE ABLE TO RAISE THOSE FUNDS FROM AND HOW QUICKLY. SALIL: THEY WERE MOSTLY INSTITUTIONAL. 70%-70 5% WAS INSTITUTIONAL AND THERE IS A LONG TAIL OF FAMILY OFFICES AND INDIVIDUALS. THERE ARE FOUR SOVEREIGN WEALTH
FUNDS AND ONE UNIVERSITY ENDOWMENT. THE FUNDRAISING WAS NOT TOO BAD. IT WAS PRETTY SMOOTH. ED: LET'S QUICKLY GO BACK TO AI. YOU EXPRESSED CONCERNS ABOUT AI VALUATIONS RIGHT NOW OR AT LEAST THE IMPACT OF THE INTEREST IN AI ON VALUATIONS. DO YOU FEEL LIKE THAT IS SOMETHING THAT WILL CONTINUE THROUGH THE YEAR? OR, INVESTORS HAVE KIND OF HAD THEIR FILL OF THE HIGH MULTIPLE AI NAMES THEY HAVE GONE INTO? SALIL: AI IS A LONG TERM OPPORTUNITY THAT WILL CHANGE EVERYONE.
EVERYONE WILL LEVERAGE AI AND AI IS AVAILABLE TO EVERYBODY THROUGH AN API CALL. SHORT TERM I'M A LITTLE WORRIED. THE POSITIVE SENTIMENT MAKES ME A LITTLE NERVOUS AND I AM HOPING FOR THE TROUGH OF DISILLUSIONMENT TO INVEST MORE. BUT, I THINK BEYOND THE TROUGH OF DISILLUSIONMENT, IT WILL BE AN UPTREND AGAIN. ED: NAI LANDSCAPE THAT IS A HOT MESS UNDERPINNED BY A TROUGH OF DISILLUSIONMENT. SALIL DESHPANDE FOUNDER AND PARTNER AT UNCORRELATED VENTURES I APPRECIATE THAT CONVERSATION. EARLIER WE REPORTED ON THE OPENAI COURT FILING CAUSING MOSQUES -- COLLIN ELON MUSK'S SUIT AGAINST THEM INCOHERENT.
DURING THE SHOW ELON MUSK EMAILED ME HIS RESPONSE TO SAY THAT OPENAI IS A LIE AND THAT IS ALL HIS RESPONSE TO THE STORY SAID. COMING UP, RENT THE RUNWAY IS PLEDGING $1 MILLION TO CELEBRATE CAREER WINS FOR WOMEN IN HONOR OF WOMEN'S HISTORY MONTH. WE WILL HAVE ALL OF THE DETAILS WITH THE CEO COMING UP.
AND SHARES OF RUMBLE, THE CONSERVATIVE VIDEO NETWORK BACKED BY PETER THIEL IS UP ALMOST 14%. WHY? RUMBLES CEO HAS FLOATED IN INTEREST, ACCORDING TO BLOOMBERG REPORTING, IN TIKTOK'S U.S. OPERATIONS. WE ARE STARTING TO BUILD OUT A LIST OF WHO, ON PAPER, MIGHT GO AFTER TIKTOK'S U.S. OPERATIONS IS, INDEED, THE PARENT COMPANY IS FORCED TO SELL.
THIS IS BLOOMBERG TECHNOLOGY. ED: RENTED THE RUNWAY AS A PLATFORM WHERE CUSTOMERS CAN SUBSCRIBE, RENT ITEMS A LA CARTE AND SHARP RETAIL FROM HUNDREDS OF DESIGNER BRANDS AND IS GIFTING $1 MILLION IN FREE SCOOP GROUP YEARNS -- SUBSCRIPTIONS THROUGHOUT WOMEN'S HISTORY MONTH TO WOMEN THAT HAVE REACHED A MILESTONE IN THEIR CAREER. HERE ARE THE DETAILS. CEO JENNIFER. THIS IS ALSO A COLLABORATION WITH LINKED IN ON THE PLATFORM SIDE. EXPLAIN WHY YOU ARE DOING IT. JENNIFER: I RECENTLY HAD MY THIRD CHILD. IT WAS FASCINATING.
I RECEIVED MORE PERSONAL CONGRATULATIONS AND LOVE THEN WHEN I IPO DRENCH THE RUNWAY -- IPOED RENT THE RUNWAY IN 2021 AND I THOUGHT ABOUT HOW IN THE CONTEXT OF OUR CULTURE IT IS PART OF THE GAME THAT WOMEN FEEL MORE COMFORTABLE SHARING THEIR PERSONAL MILESTONES AND PERSONAL ACCOMPLISHMENTS THEN PROFESSIONAL ONES AND GIVEN THAT WE LIVE IN A WORLD WHERE THE MORE SENIOR YOU GET IN AN ORGANIZATION, THE MORE YOUR ABILITY TO RISE IS BASED ON YOUR BRAND, THE STORIES THAT YOU YOURSELF TELL ABOUT YOURSELF AND THE STORIES OTHERS TELL ABOUT YOU. THIS IS A CAMPAIGN TO ENCOURAGE MORE WOMEN TO FEEL COMFORTABLE SHARING PROFESSIONAL ACCOMPLISHMENTS ON A PLATFORM LIKE LINKED IN WORDS MATTERS. ED: AS I HAVE DISCLOSED ON THE PROGRAM BEFORE MY WIFE IS A LONG-TERM SUBSCRIBER, USER, AND CUSTOMER OF RENT THE RUNWAY. THINKING BACK TO A YEAR AGO WHEN YOU WERE ON THEIR SHOW, PARTICULARLY IN THE SUMMER OF 2023 YOU COULD BACK ON INCENTIVES AND DISCOUNTS LIKE THAT OUTLINING THE LOGIC AT THE TIME THAT THE NEW USERS OR SUBSCRIBERS THAT SIGN UP IN THE FACE OF LOWER DISCOUNTS ARE LIKELY TO STAY LONGER. WHAT IS THE STRATEGY HERE WITH
THIS INCENTIVE IN THE CONTEXT OF SUBSCRIBER GROWTH? JENNIFER: OUR BRAND IS A POWER TOOL FOR WORKING WOMEN. ONE OF THE MAIN REASONS SOMEONE SIGNS UP IS TO FEEL EMPOWERED AND CONFIDENT EVERY SINGLE DAY AT WORK. SO, THE FACT NOW THAT WOMEN WILL BE REFERRING THEIR COLLEAGUES, THEIR PEERS, THEIR FRIENDS, FOR AN ACCOLADE THAT THEY RECENTLY DESERVE IN THEIR CAREER, TO RECEIVE A RENT THE RUNWAY SUBSCRIPTION WE FEEL THIS IS EXACTLY HOW WE BRING OUR BRAND BACK INTO THE UNIVERSE AND CREATE MOMENTUM AROUND OUR BRAND BEING A BRAND THAT SUPPORTS PROFESSIONAL WOMEN. ED: WHEN I POSTED ON SOCIAL MEDIA YOU WERE COMING ON THE SHOW A LOT OF PEOPLE BROUGHT UP NEWLY AND POINTED OUT IT IS A YOUNGER PLATFORM BUT HAS MORE SUBSCRIBERS THAN RENT THE RUNWAY. THEY ASKED IF YOU HAVE LEARNED ANY LESSONS FROM NEWLY AND TAKEN ANYTHING FROM THEIR EXPERIENCE THAT YOU MIGHT APPLY TO RENT THE RUNWAY. JENNIFER: I THINK IT IS INCREDIBLE THAT A
MARKET WE CREATED AROUND RENTING CLOTHES IS NOW A REAL MARKET IN THE U.S. AND MILLIONS OF WOMEN PER YEAR ARE RENTING FASHION SO --, SUBSCRIBING TO FASHION. THERE ARE DIFFERENT PLATFORMS AND DIFFERENT CHOICES THAT PROVIDE DIFFERENT KINDS OF DESIGNER BRANDS AND DIFFERENT AESTHETICS. RENT THE RUNWAY IS ABOUT CATERING TO A WOMAN THAT IS ACCELERATING IN HER CAREER, THAT ALSO WANTS TO SOCIALIZE, THAT IS ALSO TRAVELING, TRYING TO OPTIMIZE HER OWN TIME. I THINK REALLY FOCUSING IN ON WHO OUR CORE CUSTOMER IS, THE CAMPAIGN BEING AND EXEMPLIFY HER OF WHO THE CUSTOMER IS IS A CRITICAL PART OF US CONTINUING TO GROW AND ACCELERATE.
I THINK NEWLY HAS DONE A REALLY GOOD JOB OF TARGETING A SIGNIFICANTLY YOUNGER CUSTOMER THAN RENT THE RUNWAY. ED: WHAT IS THE AI STORY WITH RENT THE RUNWAY? JENNIFER: SO, ARA IS REALLY AN IMPORTANT PART OF HOW WOMEN SEARCH FOR PRODUCTS ON OUR SIDE. WE LAUNCHED AI ENABLED SEARCH AND STYLING EARLIER IN THE YEAR. IT ENABLES WOMEN TO HAVE A LONG TERM USE CASE LIKE WHAT SHOULD I WEAR TO THE TAYLOR SWIFT CONCERT? THEN, TO GET A WHOLE HOST OF SUGGESTIONS TAILOR-MADE FOR HER. YOU WILL SEE US CONTINUING TO ITERATE ON STYLING AND GENERAL AND SEARCH. PART OF OUR PLATFORM IS ABOUT OFFERING DISCOVERY. ENABLING WOMEN TO WEAR THINGS
THEY WOULD NOT OTHERWISE BUY. AI IS A PERFECT COMPLEMENT TO THAT. ED: IT HAS BEEN TOUGH FOR RENT TO THE RUNWAY. THE SHARES HAVE HAD A LONG BEST TOUGH RUN. WOULD YOU CONSIDER TAKING THE
COMPANY PRIVATE TO GO AWAY AND GO BACK TO GROWTH? JENNIFER: OUR FOCUS IS ON DRIVING THE BUSINESS TO FREE CASH FLOW PROFITABILITY AND ON MAKING THE RIGHT LONG-TERM DECISIONS FOR THE BUSINESS. I THINK WHAT HAS BEEN PROVEN OVER THE LAST FEW YEARS IS RENTAL IS A REAL MARKET GROWING FAR QUICKER THAN THE OVERALL FASHION INDUSTRY WITH MILLIONS OF WOMEN THAT ARE NOW COMFORTABLE AND CONFIDENT SIGNING UP FOR SKYPE -- A SUBSCRIPTION TO FASHION AND THAT WAS NOT THE CASE EVEN FIVE YEARS AGO. SO, IT IS OUR RESPONSIBILITY TO ENSURE THIS IS A PROFITABLE SUSTAINABLE BUSINESS AND WE TAKE A PART IN THE MARKET WE WERE PART OF CREATING. ED: WENT THE RUNWAY FOUNDER AND CEO JENNIFER HYMAN, GLAD TO HAVE YOU ON THE PROGRAM. WHAT IS SHOW IT HAS BEEN. CHECK OUT THE POD WHEREVER YOU GET YOUR PODCASTS.
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