Spotify and Palantir Surge, Tech Market Bulls | Bloomberg Technology
>> THIS IS ANNOUNCER: -- "BLOOMBERG TECHNOLOGY ," WITH CAROLINE HYDE AND ED LUDLOW. CAROLINE: I'M CAROLINE HYDE IN NEW YORK. ED: AND I'M ED LUDLOW IN SAN FRANCISCO. THIS IS "BLOOMBERG TECHNOLOGY." CAROLINE: FULL EARNINGS COVERAGE AHEAD OF SPOTIFY IN PALANTIR, THEY SURGE ON STRONG RESULTS. ED: STRATEGISTS FROM CITIBANK WORN POSITIONING IN TECHNOLOGY STOCKS IS SO BULLISH THAT ANY SELLOFF COULD SPUR A MARKET ROUTE. CAROLINE: ADAM NEUMANN AND OTHER
INVESTORS ARE BUYING WE WORK OUT OF BANKRUPTCY. WE'LL BRING YOU THE LATEST ON THE MATTER, BUT FIRST LET'S CHECK IN WITH THE MARKETS. IT IS A MACRO STORY. AFTER THE SIGNIFICANT SELLOFF IN THE BOND MARKET WE SEE A LITTLE BIT OF CALMNESS AS WE ANTICIPATE A LOT OF FED SPEAK. WE ARE OFF BY ABOUT .1% ON THE NASDAQ MORE BROADLY. 10-YEAR YIELD DOWN FIVE BASIS POINTS AFTER HAVING RISEN FAST IN THE LAST TWO TRADING DAYS. LOOK AT WHAT IS HAPPENING IN CHINA.
WE SEE THE TALK THAT JEEZY AND PAYING AT THE TOP HIERARCHY CHAIN OF CHINA IS STARTING TO DEBATE WHAT TO DO ABOUT THE SELLOFF THAT CONTINUES TO AFFLICT SOME OF THE CHINESE STOCKS. TRADING OF CHINESE STOCKS UP SOME 5% WHEN YOU'RE LOOKING AT THE NASDAQ GOLDEN DRAGON TODAY. MOVING ON, HAPPENING IN CRYPTO, WE ARE UP MORE THAN 2%. IN FACT OUTPERFORMING MOST OF THE TECH NAMES THROUGHOUT THE DAY.
WHAT HAVE YOU GOT ON THE MICRO? ED: THIS IS AN AI STORY. PALANTIR, SHARES ARE OFF SESSION HIGHS BUT ON TRACK FOR THE BIGGEST JUMP SINCE MAY. THAT INCOME OF $210 MILLION IN THE YEAR, JUST GOTTEN THEIR FIRST FULL ANNUAL PROFIT AHEAD OF EXPECTATIONS. WHAT PALANTIR IS SAYING IS FOR 2024 OPERATING INCOME WILL BE UP TO $850 MILLION, WAY ABOVE WHAT THE STREET THOUGHT THEY COULD DO. THE STORY, UNBELIEVABLE DEMAND FOR AI PRODUCTS. IN FACT, SO GREAT IS THE
DEMAND, PALANTIR'S CEO TOLD BLOOMBERG LAST NIGHT THEY CANNOT COPE. THEY DON'T KNOW WHAT TO DO ABOUT ALL OF THE INCOMING FOR THEIR AI PLATFORM. A REALLY BIG MOVE TO THE UPSIDE. WILL GET DEEPER IN THAT IN JUST
A MOMENT. SPOTIFY DOES IT -- SPOTIFY IS INTERESTING. THIS IS A GLOBAL NAME. IT IS ON TRACK FOR -- FOR ITS BIGGEST JUMP SINCE OCTOBER. 236 MILLION SUBSCRIBERS, A BEAT VERSUS WHAT THE STREET WAS EXPECTING. I REFLECT ON THE LAST FEW WEEKS
OF SHOWS AND WE HAVE BEEN TALKING ABOUT THE DIFFICULTY IN THE STREAMING LANDSCAPE, ALL OF THE CHANGES. THEY ARE STILL SEEING GROWTH AND THE STREET IS CHAIRING IT. LET'S GET DETAILS WITH LUCAS SHAW. IS THIS JUST ABOUT THE SUBSCRIBER BEAT? >> I THINK IT IS THAT THEY BEAT ON EVERYTHING. OFTEN TIMES WHEN SPOTIFY HAS EARNINGS THEY HAVE DELIVERED CONSISTING USER GROWTH FOR YEARS. BUT THERE IS ALWAYS SOMETHING INVESTORS CAN NITPICK.
MARGINS ARE OFF, THE REVENUE IS OFF, THE FORECAST IS OFF. THIS TIME THEY BEAT ACROSS THE BOARD. THEY ARE GROWING FASTER THAN THEY HAVE EVER GROWN, WHICH IS IMPRESSIVE FOR A 16-YEAR-OLD COMPANY. THEY ARE DOING IT WITH FREE USERS, THEY ARE DOING IT WITH PAID USERS, AND THE MARGINS ARE STARTING TO GET BETTER. THEY'RE STILL AN UNPROFITABLE COMPANY. NOT GREAT, BETWEEN RAISING PRICES AND CUTTING BACK ON SOME OF THE EXPENDITURES IT IS LOOKING LIKE A BETTER BUSINESS TO MOST INVESTORS. CAROLINE: THOSE EXPENDITURES FOR PEOPLE.
AN AWFUL LOT OF PEOPLE THAT WENT, MORE BROADLY. WE TO BE STINK THE AREA OF FOCUS IS FOR SPOTIFY? THEY PULLED BACK ON PODCASTING, BUT THEN MORE THAN 200 MILLION GOING FOR -- 200 MILLION DOLLARS FOR JOE ROGAN TO REMAIN. HOW DO YOU SEE THE COMPANY CONTINUING TO INNOVATE CHECKUP >> WHEN I BROUGHT UP EXPENDITURES I SHOULD HAVE BEEN A LITTLE MORE CARING WHEN IT CAME TO HOW MANY PEOPLE THEY CUT. I WAS TALKING ABOUT THE SHIFT IN THE PROGRAMMING STRATEGY. YOU BROUGHT UP JOE ROGAN.
IT IS IMPORTANT TO KNOW THAT THAT PODCAST WILL NO LONGER BE EXCLUSIVE TO SPOTIFY. THAT IS PART OF A SHIFT IN STRATEGY WHERE THEY HAVE TAKEN SHOWS -- YOU KNOW, THEY WENT IN FIRST WITH PODCASTING AND GOT A LOT OF EXCLUSIVE RIGHTS TO SHOWS, BOUGHT A LOT OF COMPANIES. DID THAT TO BRING PODCAST LISTENERS ONTO THE PLATFORM. NOW THAT THEY HAVE PEOPLE THERE THEY ARE MORE THAN HAPPY TO TAKE THOSE SHOWS WIDE. SO, ALICE COOPER AND JOE ROGAN, THEY CAN BE ANYWHERE. SPOTIFY WANTS THE ABILITY TO
SELL ADS AND, TO YOUR POINT ABOUT WHAT IS NEXT AND BIG, THEY ARE MAKING A BIG PUSH AND AUDIOBOOKS. ED: THAT IS WHAT CAUGHT MY EYE. IT IS A BRIGHT SPOT FOR THE COMPANY AND THEY TRIALED THE GIVEAWAY. IN SOME MARKETS THEY WOULD SAY, HAVE A FEW AUDIOBOOKS ON US. NOW THEY ARE SOLIDIFYING THEIR STRATEGY. THERE IS ALSO A CULTURAL MOMENT. LIKE, AUDIOBOOKS ARE IN NOW.
THIS IS GREAT FOR SPOTIFY. LUCAS: AUDIBLE HAS BEEN THE DOMINANT PLAYER IN AUDIOBOOKS FOR BASICALLY AS LONG AS AUDIOBOOKS HAVE EXISTED. BUT SPOTIFY SEES AN OPPORTUNITY, MUCH LIKE THEY DID IN PODCASTING, WHERE APPLE WAS THE DOMINANT PLAYER, HAD NOT INNOVATED THAT MUCH. BECAUSE THERE ARE HUNDREDS OF MILLIONS OF PEOPLE WHO USE SPOTIFY TO LISTEN TO MUSIC, THEY FIGURED IT WOULD BE EASY TO ROPE THEM INTO DOING SOME OTHER AUDIO BEHAVIOR. THAT HAS WORKED FROM AN AUDIENCE PERSPECTIVE. SPOTIFY IS PROBABLY THE NUMBER ONE PODCAST PLATFORM IN THE WORLD.
IT DEPENDS ON HOW YOU WANT TO CLASSIFY YOUTUBE AND APPLE. AUDIBLE IS NOT QUITE AS LAZY, I WOULD SAY, AS APPLE HAS BEEN IN PODCASTING. SPOTIFY DOES HAVE A MUCH LARGER CUSTOMER BASE COMING IN EVERY DAY TO LISTEN TO STUFF.
CAROLINE: ALWAYS GREAT TO CATCH UP. LUCAS SHAW, WE APPRECIATE YOU ON ALL SPRINGS -- ON ALL THINGS SPOTIFY. PALANTIR, ABSOLUTELY THRIVING ON THE DAY, UP ALMOST 21%. GAVE HIGHER THAN OUTLOOK. A DEMAND DRIVES SALES. IT IS OFF THE CHARTS.
MANDEEP SINGH IS HERE FROM BLOOMBERG INTELLIGENCE. DAN IVES MAKING US LAUGH. HOWEVER THEY NOT ABLE TO KEEP UP WITH DEMAND? IS COMING WITH THE DEMAND? MANDEEP: CLEARLY THE LLM WAVE WE HAVE SEEN IS A NICE TAILWIND FOR THEM. WHAT PALANTIR HAS IS A VISUALIZATION SOFTWARE THAT HELPS YOU LEVERAGE AI, AND ALSO USE IT. SO, WHAT COMPANIES ARE STRUGGLING WITH RIGHT NOW IS, YOU KNOW, THEY ARE LOOKING TO TRAIN THEIR LLMS AND DEPLOY THEM. HE QUIPPED ABOUT HOW A CHATBOT IS NOT A GREAT INTERFACE.
AND THEY DO HAVE VISUALIZATION SOFTWARE BEING USED FOR DEFENSE PURPOSES, HEALTH CARE CUSTOMERS. I THINK FROM A VERTICAL AI STRATEGY THEY YOU HAVE SOMETHING UNIQUE, AND THINK OF IT AS A COPILOT. EVERYONE RIGHT NOW IS TRYING TO DEPLOY A COPILOT. I THINK PALANTIR'S SOLUTION WILL RESONATE FOR CERTAIN VERTICALS, AND THAT IS WHAT THEY CALLED OUT YESTERDAY WITH U.S. COMMERCIAL CUSTOMERS. TRADITIONALLY THEY HAVE BEEN HEAVY ON THE GOVERNMENT SIDE, THEY ARE NOW ADDING NEW CUSTOMERS ON THE COMMERCIAL SIDE, WHICH IS WHAT THE MARKET IS EXCITED ABOUT. ED: THIS IS WHAT DR. ALEX KARP TOLD US LAST NIGHT.
BUILDING OUT THAT COMMERCIAL BUSINESS. OUR COMMERCIAL BUSINESS IS EXPLODING IN A WAY WE DON'T KNOW HOW TO HANDLE, WE DON'T KNOW WHAT TO DO WITH THE ONSLAUGHT OF DEMAND. HUMOR ME ON THIS ONE. I'M GOING TO GO BACK A FEW YEARS, PRE-IPO, WHERE PALANTIR DID NOT CARE ABOUT SALESPEOPLE. THEY WERE NOT REALLY WORRIED ABOUT ONBOARDING CUSTOMERS, ANY OF THAT STUFF. THEY RIDICULED THE IDEA OF SALESPEOPLE.
THEY WANTED TO DO THEIR OWN THING. NOW DR. KARP IS BASICALLY SAYING, WE NEED SOME SALES REPS AND SALES ENGINEERS AND BE ABLE TO GIVE THIS TO CUSTOMERS. ARE YOU CONVINCED THEY CAN ACTUALLY DO THAT, TAKE A BUSINESS OF IT? MANDEEP: LOOK, THEY HAVE A VERY DIFFERENT SELLING MOTION. COMPARE THEM TO HYPER-SCALERS. MICROSOFT IS DOING WITH AI, SETTING INFRASTRUCTURE AND PROVIDING THE LLM, AND MAKING IT EASY TO TRAIN YOUR OWN MODEL.
PALANTIR'S SOLUTION IS MORE OUT-OF-THE-BOX. IF YOU HAVE DATA YOU CAN USE THEIR PLATFORM AND IT OFFERS SOMETHING UNIQUE. I DON'T THINK IT APPLIES TO ALL SORTS OF ENTERPRISES. THAT IS WHERE HAVING A SALES FORCE COULD HELP, BUT WE ALSO KNOW THE CUSTOMER ACQUISITION COSTS GO UP WHEN YOU HAVE A DIRECT SALESFORCE MODEL. TO ME THE COMPETITIVE DYNAMICS ARE BETWEEN THE LIKES OF PALANTIR AND A SNOWFLAKE, OR DATA BREAKS, THAT ALSO COMPETE IN THE SAME SPACE. BUT THEY LEVERAGE THE PUBLIC CROWD MORE THAN PALANTIR DOES, WHICH IS MORE ON-PRAM.
CAROLINE: WHAT IS INTERESTING IS HE IS PULLING EMPLOYEES OUT OF EUROPE. GERMANY, FRANCE. HE THINKS AT THE MOMENT THE DEMAND IS NOT THERE. HE THINKS EUROPE IS NOT TAKING PART IN THIS AI WAVE. ARE YOU SEEING THAT REGIONALLY SPEAKING? MANDEEP: I THINK IT MAKES INTUITIVE SENSE, BECAUSE EUROPE IS PROBABLY BEHIND WHEN IT COMES TO LEVERAGING LLMS OR CUSTOMIZING LLMS. EVEN THOUGH THERE ARE STARTUPS, YOU DON'T SEE COMPANIES BEING AT THE CUTTING EDGE OF DEPLOYING THESE LLMS. ONE COULD ARGUE THE MARKET IS NOT RIGHT FOR
DEPLOYING. CAROLINE: VISIT THEY JUST DO NOT WANT TO USE A U.S. COMPANY? MANDEEP: PALANTIR IS CONTROVERSIAL. WE KNOW THAT, AND THE FACT THAT THEY HAVE BEEN SO VOCAL ABOUT EVERYTHING THEY DO WITH REGARDS TO THE MIDDLE EAST CONFLICT. THAT HAS HELPED WITH INTERNATIONAL BUSINESS, BUT NOT EVERY COMMERCIAL COMPANY WANTS TO ENGAGE WITH A COMPANY LIKE PALANTIR, THAT CLEARLY HAS VERY VOCAL VIEWS. THAT COULD GO AGAINST YOU SOMETIMES WHEN YOU'RE TRYING TO SELL SOFTWARE. ED:
MANDEEP SINGH OF BLOOMBERG INTELLIGENCE. GREAT TO HAVE YOUR ANALYSIS. COMING UP, WE ARE GOING TO KEEP THE EARNINGS CONVERSATION GOING. WE GET THE MACRO TAKE ON THE
MARKETS WITH NANCY TENGLER OF LAFFER TENGLER INVESTMENTS. CAROLINE, WHAT ARE YOU LOOKING AT? CAROLINE: LET'S HAVE A QUICK CHECK ON EARNINGS. WE KNEW THE JOB CUTS WERE COMING AT SNAP. WHAT DOES THAT POTENT -- PORTEND FOR THEIR EARNINGS? WE ARE UP 2.6%. MICROSTRATEGY AS WELL, WE WILL GET AN INCREASE -- INSIGHT INTO CRYPTO. 3% AHEAD OF EARNINGS AS WELL. THIS IS "BLOOMBERG TECHNOLOGY."
CAROLINE: LET'S JUST TALK ABOUT TECHNOLOGY'S IMPACT ON THE BROADER MARKET. CITI OUT WITH AN INTERESTING NOTE MORNING ABOUT POSITIONING IN TECH STOCKS. RIGHT NOW SAYING IT IS SO BULLISH THAT ANY SELLOFF COULD TRIGGER A WILDER -- A WIDER ROUTE. NOTING THAT SHORT BETS HAVE BEEN COMPLETELY CLEAR. LET'S DIG INTO WHAT IS A CONCERN FOR THE BROADER MARKET. LAFFER TENGLER INVESTMENTS CEO
NANCY TENGLER, WE LOVE HAVING ON BECAUSE YOUR DETAIL ABOUT LEADERS, BUT ALSO THE MACRO IMPACT OF TECH. ARE YOU WORRIED ABOUT ANY JITTERS AND WHAT THAT MEANS FOR THE S&P AND BROADER BENCHMARKS? NANCY: I DON'T THINK I'M A BALL. THERE ARE PLENTY OF TIMES WHERE YOU WANT TO HEDGE YOUR PORTFOLIOS OR GET OUT, BUT I DON'T THINK THIS IS ONE OF THEM.
I THINK USE WEAKNESS IN SOME OF THESE NAMES THAT THERE IS A SELLOFF. WE WILL GET A CORRECTION, AND THAT WILL BE HEALTHY FOR THE MARKET. I THINK THEN YOU WANT TO ADD TO NAMES YOU DON'T OWN OR DON'T THINK YOU OWN ENOUGH OF. YOU HEARD, YOU JUST HAD A GREAT
INTERVIEW ON PALANTIR. THAT WAS AN EXTRAORDINARILY BULLISH REPORT FOR THE MONETIZATION OF GENERATIVE AI. THE NAYSAYERS HAVE BEEN FLEEING THE TECH TRADE FOR THE LAST FOUR YEARS THAT I CAN REMEMBER. IT MIGHT BE EVEN LONGER. AND EVERY TIME TECHNOLOGY COMES BACK. WE HAVE TALKED ABOUT HOW THEY ARE THE NEW DEFENSIVE NAMES BECAUSE THEY GENERATE RELIABLE EARNINGS GROWTH. WE HAVE SEEN THAT AGAIN THIS EARNINGS SEASON. CAROLINE:
WHAT HAS BEEN INTERESTING IS PERHAPS SOME OF THE COMPANIES THAT HAVE OUTPERFORMED. WE FINALLY GET TO SEE WHERE AI FITS INTO THEIR BUSINESS MODEL. WHEN YOU HAVE NOT LIKED IS META. MINUS OF WHY PERHAPS YOU ARE CHANGING YOUR TUNE SINCE THE MEGA RALLY COME FRIDAY. NANCY: WE HAVE OWNED IT IN THE PAST AND MADE A LOT OF MONEY ON THE STOCK, AND WE GOT OFF A COUPLE OF YEARS BACK. I HAVE BEEN WRONG ON THAT, BUT
THERE ARE OTHER PLACES WHERE WE HAVE PUT OUR CLIENTS' MONEY, AND THOSE HAVE BEEN MAYBE NOT QUITE AS GOOD, OR IN SOME CASES BETTER, BUT I JUST DON'T LIKE THE TWO-SHARE STRUCTURE. I DON'T LIKE THE BUSINESS MODEL. AND I HAVE BEEN WRONG. SO IT IS AN ADVERTISING COMPANY, FOR SURE. THEY ARE GOING TO ADAPT AND ADOPT AI, AND THAT WILL PROBABLY CONTINUE TO DRIVE MARGINS. BUT THERE IS BETTER PLACES, IN OUR VIEW.
THAT IS WHERE WE HAVE BEEN HIDING OUT. ED: WHAT WOULD META AND A ZUCKERBERG HAVE TO DO TO CHANGE YOUR MIND? NANCY: I THINK FOR NOW WE HAVE MISSED IT. I LOVE THE DIVIDEND. AND WHETHER OR NOT IT WAS SELF-SERVING, I THINK HE KEEPS ABOUT $700 MILLION A YEAR FROM THE DIVIDEND, I LOVE THE NOTION OF IT AND I THINK GOOGLE SHOULD BE PAYING ATTENTION. AMAZON, WHICH IS A FREE CASH FLOW COURSE -- HORSE, OR HOWEVER YOU WANT TO CLASSIFY.
META, IT WOULD NEED TO COME DOWN FROM A VALUATION STANDPOINT AND WE NEED TO SEE CONTINUED MONETIZATION ACROSS THE PLATFORMS. BUT, LISTEN, HE HAS DONE A GREAT JOB AND THERE IS NO DISPUTING IT. ED: THERE ARE A FEW THINGS AS ROMANTIC AND POETIC AS THE BLOOMBERG MARKETS WRAP HEADLINE WHICH READS, WALL STREET ON HOLD AS TRADERS AWAIT MORE FED STATE. INSPIRATION AND ENERGY IN THE MARKET. WE FORGET ALL OF THE AI STUFF, WE ARE STILL WAITING ON THE FED, RIGHT? NANCY: I THINK THE MARKET IS BEGINNING TO NOT LISTEN TO THE FED. AND THE REASON I SAY THAT IS,
IF YOU GO BACK AND LOOK AT CHAIRMAN POWELL'S COMMENTS, HISTORICALLY HE HAS BEEN ADAMANT ABOUT, WE ARE NOT EVEN THINKING ABOUT RAISING RATES. WE WILL NOT RAISE 75 BASIS POINTS. WE ARE GOING TO STAY HIGHER FOR LONGER. EACH TIME HE MADE THOSE STATEMENTS HE REVERSED HIMSELF
A SHORT TIME LATER. I THINK WITH THE MARKET IS SEEING IS, WE MAY OR MAY NOT GET A CUT IN MARCH, BUT WE WILL GET CUTS THIS YEAR. I THINK THE MARKET IS WILLING TO COEXIST, AS WE DID IN THE 1990'S, AND I HAVE TALKED ABOUT THAT ON YOUR SHOW, WITH HIGHER INTEREST RATES. BECAUSE THEY ARE NOT DEBILITATING. WE HAVE SEEN THAT.
FOR LARGE TECH COMPANIES HIGHER INTEREST RATES HAVE AUGURED WELL TODAY BALANCE SHEETS. THEY HAVE GROWN CASH BECAUSE OF THE HIGHER INTEREST THEY ARE RECEIVING IN CASH. THE MARKET IS SAYING, PRODUCTIVITY IS IMPROVING, THERE IS A TIGHT LABOR MARKET -- AND THAT IS GOING TO CONTINUE TO BENEFIT TECHNOLOGY COMPANIES. THE FED MATTERS LESS AND LESS EACH DAY THAT GOES BY, IN MY VIEW. ED: NANCY TENGLER, GREAT TO HAVE YOU ON THE PROGRAM. THANK YOU VERY MUCH.
COMING UP, WE WORK CO-FOUNDER ADAM NEUMANN AND CAPITAL PROVIDERS ARE WORKING TOGETHER TO EXPLORE AN OFFER TO BUY THE CO-WORKING FIRM OUT OF BANKRUPTCY. ACCORDING TO A LETTER SENT TO WEWORK'S LAWYERS. I DID JUST SAY THAT. CAROLINE: ADAM NEUMANN AGAIN. LET'S TAKE A LOOK AT WHAT IS HAPPENING WITH HERTZ. WE ARE TRADING HIGHER ON THE JUGGERNAUT FOR CAR RENTAL.
WE HAD DIPPED INTO THE RED EARLIER, BECAUSE THEY MASSIVELY MISSED IN TERMS OF THEIR OVERALL EARNINGS-PER-SHARE. BUT WHY? BECAUSE THEY ARE OFFLOADING THOSE 20,000 TESLA EV'S, ABOUT ONE THIRD OF ITS OVERALL ELECTRIC FLEET. NOW INVESTORS STARTING TO SEE OPPORTUNITIES AS TO HOW THEY CUT COSTS GOING FORWARD. ED: OK, TIME TO TALK TECH. ATTENTIONAL INVESTORS IN ELON MUSK'S ARTIFICIAL INTELLIGENCE STARTUP FOCUSING ON TWO SELLING POINTS. ACCESS TO MUSK'S COMPANIES, AND THE EARLY SUCCESS OF THE TITAN.
PROMINENTLY FEATURES BOTH MUSK'S TRACK RECORD AND OPENAI, INCLUDING A SLIDE SHOWCASING THE KEY ATTRIBUTES THAT DROVE OPENAI'S SUCCESS. PLUS, THE NEWLY RELEASED APPLE VISION PRO HEADSET IS PRESENTING SOME CUSTOMER SERVICE SNAGS. IF AN OWNER PREVENTS -- FORGETS THEIR PASS CODE THE ONLY WAY TO GET THE DEVICE WORKING AGAIN IS TO BRING IT TO AN APPLE STORE OR MAIL IT TO CUSTOMER SUPPORT. APPLE WOULD THEN RESET IT.
ADAM NEUMANN IS TEAMING UP WITH CAPITAL PROVIDERS TO EXPLORE AN OFFER TO BUY THE CO-WORKING FIRM OUT OF BANKRUPTCY. THAT ACCORDING TO A LETTER SENT TO WEWORK'S OWNERS. A BID WOULD BE FOR THE ENTIRE COMPANY OR ITS ASSETS. CAROLINE: WE ARE GOING TO DIG INTO THIS MORE, BECAUSE IT IS NOT THE FIRST TIME ADAM NEUMANN WANTED TO WRITE TO THE RESCUE OFFICE.
LATE 2022 HE WAS TRYING TO MAKE BIDS TO BASICALLY RESUSCITATE THIS COMPANY HE WAS SO ASSOCIATED WITH. >> YES. APPARENTLY THERE HAS BEEN A LOT HAPPENING BEHIND THE SCENES THAT HASN'T BEEN TOO DEEPLY REPORTED ON, BUT ADAM NEUMANN CANNOT LET GO OF THIS COMPANY HE STARTED.
IT IS LIKE WE ARE GOING TO GET WECRASH SEASON TOO. HE APPARENTLY MADE A BID IN 2022 ACCORDING TO HIS LETTER. HE MOST RECENTLY OFFERED ANOTHER SORT OF BANKRUPTCY FINANCING OFFER, AND NOW HE IS TEAMING UP WITH OTHER FINANCIERS TO MAKE A BIG BED, MAYBE TO BUY THE HOPE COMPANY. HE HASN'T BEEN TOO SPECIFIC, BUT HE SAYS HE IS FRUSTRATED BECAUSE THE COMPANY IS NOT GIVING HIM THE INFORMATION HE WANTS. ED: MARK MILIAN SHARING HIS IDEA OF FUN WITH THE MILLIONS OF VIEWERS. WHAT IS WEWORK? WHAT IS IT NOW AND WHAT DID THEY HOPE TO MAKE IT INTO? ED: WEWORK IS IN BANKRUPTCY, IT IS DEEP IN DEBT, THEY CANNOT PAY THEIR BILLS, THEY ARE RENEGOTIATING WITH THEIR LANDLORDS. WEWORK IS IN DEEP, DEEP TROUBLE.
FOR A LOT OF PEOPLE, WEWORK IS ADAM NEUMANN, WHICH IS WHY IN SOME WAYS THIS DOES MAKE SENSE. HE DESERVES MUCH OF THE CREDIT FOR DRIVING THE COMPANY INTO THE GROUND, WHICH IS WHY HE WAS KIND OF PUSHED TO STEP DOWN IN 2019. BUT THE LAST FEW YEARS IT HAS BEEN A TOUGH ECONOMY FOR A REAL ESTATE BUSINESS, A COMMERCIAL REAL ESTATE BUSINESS IN PARTICULAR.
I DON'T KNOW THAT ADAM NEUMANN WOULD HAVE BEEN ABLE TO LEAD WEWORK OUT OF THE CRISIS DURING THE PANDEMIC, BUT WHAT IS WEWORK WITHOUT ADAM NEUMANN? CAN PEOPLE EVEN NAME THE LAST FEW CEOS OF THE COMPANY? MAYBE THIS DOES MAKE SENSE. MAYBE THIS IS WEWORK'S LAST SHOT AND THEY SHOULD TAKE HIM SERIOUSLY. AT LEAST THAT IS WHAT HE IS ARGUING. ED: MARK MILIAN ON THE WHAT IS NEXT
FOR WEWORK. NVIDIA AND CISCO ARE TEAMING UP TO HELP COMPANIES BUILD IN-HOUSE AI COMPUTING. CISCO IS GOING TO OFFER NVIDIA-BASED EQUIPMENT POPULAR FOR DEVELOPING AI MODELS, ALONG WITH ITS OWN NETWORKING GEAR. HEREIN LIES THE STORY. FORGETH100, -- FORGET H100, THERE ARE OTHER SERVER COMPONENTS.
>> WHAT CISCO IS OFFERING MORE THAN ANYTHING ELSE FOR NVIDIA IS A SALESFORCE. NVIDIA DOESN'T HAVE A CHANNEL INTO THIS WORLD OF COMPANIES, OF CORPORATE DATA CENTERS, OF ALL OF THESE SMALL TO MEDIUM, ALL THE WAY UP TO LARGE COMPANIES THAT, YOU KNOW, WANT TO PERHAPS GET IN ON THE AI GAME, WANT TO PERHAPS PUT THEIR OWN HARDWARE IN PLACE BUT HAVE NO REAL WAY OF DOING THAT. THAT IS WHAT CISCO CAN OFFER FOR NVIDIA HERE, OR AT LEAST THAT IS THE PLAN. ED:
NVIDIA PROCESSORS GOING TO THE AND SEVEN, BUT IF YOU LOOK AT THE CLOUD PROVIDERS, IT IS SHIFTING SOME SPEND. IAN: THEY ARE TRYING TO. TREMENDOUS SUCCESS WITH THE CLOUD PROVIDERS, AND THAT IS WONDERFUL.
IT HAS DRIVEN THEIR SALES TO UNPRECEDENTED LEVELS, AND IT IS GREAT, BUT IT IS ALREADY 40% OF THEIR REVENUE. WHAT ARE MICROSOFT, WHAT ARE GOOGLE DOING? THEY ARE MAKING THEIR OWN SHIPS. THEY DON'T WANT TO BE BEHOLDEN. CAROLINE: WE'RE GOING TO BE TALKING SO MUCH MORE ABOUT AI, BUT ITS IMPLICATIONS ON ELECTIONS. YOU TALK ABOUT THE CONCERNS OF NEW TECHNOLOGY RAISING AROUND THE LEGITIMACY OF INFORMATION WE CONSUME. HOW DO WE SOLVE IT? RECORDED FUTURE CEO CHRISTOPHER AHLBERG JOINING US NEXT.
IN MARK, THERE ARE OTHER EARNINGS WE HAVE TO KEEP AN EYE ON. MUCH OF THEM HAVING TO DO WITH CHIPS. NOT LOOKING PRETTY IN GERMANY. INFINEON OFF BY 2.5%. ED: WELCOME BACK TO "BLOOMBERG TECHNOLOGY ."
I'M ED LUDLOW IN SAN FRANCISCO. CAROLINE: I'M CAROLINE HYDE IN NEW YORK. WE ARE MANAGING TO BE MORE STABLE THAN WE HAVE IN THE LAST FEW DAYS. WHEN IT COMES TO THE BOND MARKET WE HAD SIGNIFICANT SELLOFFS. NOW SEEING RESPITE AHEAD THE HEAD OF FED SPEAK.
WE ARE UP, DOWN .3% ON THE NASDAQ. PERHAPS SOME OF THOSE SEMI CONDUCTOR NAMES WE WERE JUST TALKING ABOUT. WHAT IS HAPPENING IS CHINA AND THE CHINESE-RELATED RELATED TECHNOLOGY NAMES THAT HAVE TRADED ON THIS ETF. SOARING TODAY MORE THAN 6%. THERE IS TALK, BROKEN BY BLOOMBERG, REPORTING THAT XI JINPING IS LOOKING AT HOW THEY CAN START TO SUPPORT THIS OVERALL MARKET. WE ARE LOOKING AT WHAT IS
HAPPENING IN BITCOIN. WE ARE UP A LITTLE BIT. MOVING ON, INDIVIDUAL MOVERS. WE HAVE HAD A LOOK AT SOME OF THE ONGOING NARRATIVE AROUND THE NEED TO CUT COSTS, BUT ALSO THE EARNINGS THAT, THEY CAN FAST. PALANTIR SOARING ON THE DAY. THEY CANNOT HANDLE THE AMOUNT OF ENTERPRISE INBOUND THEY ARE GETTING FOR THEIR OFFERINGS AND ARE CURRENTLY UP 24%. DOCUSIGN, ONCE AGAIN ANOTHER
COMPANY MAKING LAYOFFS. 6% OF THEIR WORKFORCE. WE ARE ALSO SEEING WHAT IS HAPPENING WITH MICROCHIP. EXECUTIVES SAYING THEY WILL TAKE A 20% PAY CUT. THAT WAS ANNOUNCED YESTERDAY, BUT CLEARLY ALL OF THESE OPENINGS TRYING TO BE MORE EFFICIENT.
WHAT HAVE YOU GOT IN THE WORLD OF AI? ED: THE ELECTION. NEVADA HOLDING ITS PRIMARIES TODAY, THE U.S. ELECTION IS ON EVERYBODY'S MIND, INCLUDING META. THE TECH GIANT WILL BEGIN LABELING POSTS THAT WERE CREATED USING AI TO PREVENT MISINFORMATION FROM SPREADING ON THE PLATFORMS THEY SPOKE, INSTAGRAM, AND THREATS DURING WHAT IS A CRITICAL ELECTION YEAR. LET'S BRING IN KURT WAGNER. THIS MORNING YOU DID AN INTERVIEW WITH NICK CLEGG.
THE QUESTION AROUND META IS WHETHER ONE DEFINITIVE POINT OF TECHNOLOGY IS GOING TO FIX ALL OF THIS, WHICH WE KNOW THE ISSUE IS THE SPREAD OF MISINFORMATION. >> I THINK THE EASY ANSWER IS NO, RIGHT? THERE IS NEVER GOING TO BE A SINGLE SOLUTION TO A PROBLEM, ESPECIALLY ONE AS COMPLICATED AS AI-GENERATED CONTENT. WHILE META IS TRYING TO PUSH FORWARD INTO DIGITAL WATERMARKING AND METADATA, IF YOU CREATE AN AI-GENERATED PHOTO OR VIDEO USING META'S TOOLS WERE SOME OTHER IN THE INDUSTRY, THERE IS GOING TO BE THESE INVISIBLE MARKERS ON THE CONTENT THAT META CAN USE TO LABEL IT. BAD ACTORS ARE NOT GOING TO FOLLOW THOSE RULES.
THEY ARE GOING TO FIGURE OUT WAYS TO GET AROUND THESE WATERMARKS, THIS METADATA. BECAUSE THEY ARE OUT TO CAUSE CHAOS. I THINK NICK CLEGG ANNOUNCED THIS IS NOT A ONE-SIZE-FITS-ALL SOLUTION, BUT IT IS BETTER THAN NOTHING FOR THEM. CAROLINE: OF COURSE, NICK CLEGG SO INTEGRAL TO THESE SORTS OF CONVERSATIONS, HAVING HAD HIS OWN ROLE IN POLITICS IN THE U.K. I'M INTERESTED IN WHAT HE HAD TO SAY AROUND THE AUDIO DOCTORING OF BIDEN AHEAD OF THE PRIMARIES.
THAT SEEMED TO BE A REAL CATALYST. HE SEEMED ALMOST RELATIVELY OPTIMISTIC, RIGHT? KURT: I WAS SURPRISED. ONE OF THE QUESTIONS I WAS MOST EAGER TO ASK IS, HOW BIG OF A DEAL IS THIS GOING TO BE FOR THE U.S. ELECTION? WE ARE ALL SORT OF BRACING FOR THIS INEVITABLE MOMENT WHERE ONE OF THE CANDIDATES HAS A DEEPFAKE OF THEM THAT GOES VIRAL ONLINE AND IT HARMS THEIR CAMPAIGN.
NICK CLEGG IS NOT NEARLY AS CONCERNED AS I THOUGHT HE WOULD BE, AND MOST OF THAT IS BECAUSE HE SAID, EVERYONE IS ALREADY LOOKING FOR THIS STUFF. THE MINUTE THAT THIS HAPPENS, THE MINUTE THAT JOE BIDEN IS SEEN IN THE DEEPFAKE HIS CAMPAIGN IS GOING TO RAISE THE ALARM, THEY ARE GOING TO CALL META, THEY ARE GOING TO CALL THE PRESS. HIS FEELING WAS THERE ARE SO MANY PEOPLE PAYING ATTENTION NOW THAT HE DOES NOT ANTICIPATE THIS IS GOING TO BE AS BIG OF AN ISSUE AS A LOT OF OTHER PEOPLE WORRY ABOUT. CAROLINE: HOW REFRESHING, SOME OPTIMISM. KURT WAGNER, THANK YOU SO MUCH COMING TO US FROM DENVER. LET'S TALK MORE ABOUT POTENTIAL THREATS AND BENEFITS, THE WAY IN WHICH AI TECHNOLOGIES MIGHT SOLVE AND A ROLE ACROSS THE YEAR OF MOBILE ELECTION CYCLES. CHRISTOPHER AHLBERG IS WITH US,
HE IS CEO OF RECORDED FUTURE. LET'S DWELL ON WHAT WE WERE HEARING FROM KURT, THE FACT THERE IS SOME OPTIMISM THAT EVERYONE IS FOCUSED ON IT, SO WE WON'T BE ABLE TO HAVE THIS LEVEL OF MISINFORMATION AND DEEPFAKES WE ARE WORRIED ABOUT. DO YOU AGREE? CHRISTOPHER: YEAH, NO. FIRST OF ALL, I LOVE OPTIMISM. SECOND, THE AMAZING THING IS WE ARE ACTUALLY SORT OF ABLE TO COLLECT ALL OF THIS DATA, AND WE CAN ORGANIZE IT, WE CAN ANALYZE IT, AND LOOK FOR WHAT IS ANOMALOUS, THE STUFF THAT DOESN'T STAND OUT.
I THINK IT IS FAIR TO SAY THAT THE BIG THINGS, SOMEBODY DOES THAT DEEPFAKE, WHETHER IT IS JOE BIDEN OR TRUMP, WE ARE GOING TO BE ABLE TO FIND THAT. YOU MAY NOT EVEN NEED AN ALGORITHM. I WORRY ABOUT THE SUBTLE STUFF. WHEN SOMEBODY IN OHIO SOMEWHERE THAT IS THE PLACED -- THE PLACE THAT IS GOING TO MAKE A DIFFERENCE WHETHER THE ELECTION IS GOING TO GO LEFT OR RIGHT, THEY MAY NOT EVEN NEED TO MAKE FAKE STUFF, THEY JUST MANIPULATE THE NEW STRING. THERE IS MORE SUBTLE MANIPULATION WE NEED TO WATCH FOR AND THE SUBTLE DEEPFAKES.
CAROLINE: HYPOTHESIZING THERE IS A MANIPULATED PHOTO OF THE LOCAL POLLING STATION WHERE YOU MIGHT GOING CAST YOUR VOTE, THESE ARE MORE INTRICATE, SMALLER SCALE ISSUES THAT REALLY IMPACT CERTAIN MOVES WITHIN CERTAIN STATES AND GEOGRAPHIES THEN. HOW DO WE AS A NATION GIVE THE AVERAGE CONSUMER CONFIDENCE THAT THEY ARE NOT BEING MANIPULATED? CHRISTOPHER: I THINK THAT'S GONNA TAKE A LONG TIME. THIS IS NOT GOING TO HAPPEN OVERNIGHT. THE GOOD NEWS HE -- NEWS IS WE JUST HEARD AN ESSAY SAY THE OTHER DAY, HIS VIEW WAS THAT OUR ELECTION IS GOING TO BE THE SAFEST ON RECORD.
SO THAT IS GOOD TO HEAR. NOW IT IS AN INTERESTING YEAR. THE U.S. HAS A BIG ELECTION. YOU CAN COUNT 40 MAJOR ELECTIONS IN THE WORLD AROUND, SORT OF, IN THE FULL YEAR. U.K., SINGAPORE, INDONESIA, INDIA.
WHEREVER YOU WANT TO GO THERE IS BIG ELECTIONS. I DON'T THINK WE ARE GOING TO GET CONFIDENCE ON THIS IN SHORT ORDER. THERE IS WAYS WE CAN DO WITH THIS PROBLEM, BUT THE CAT IS OUT OF THE BAG AND I THINK IT'S GOING TO TAKE SOME TIME BEFORE WE CAN GET BACK TO A PLACE OF CONFIDENCE. IT IS NOT GOING TO HAPPEN OVERNIGHT. ED: THE CHALLENGE HERE IS THE SAME AS WE SEE IN THE CYBERSECURITY CONTEXT. THAT THERE IS ACCESS TO ARTIFICIAL INTELLIGENCE TECHNOLOGY FOR DEFENSE, AND THE THREAT ACTORS HAVE ACCESS TO THE SAME ARTIFICIAL INTELLIGENCE TECHNOLOGY.
IN THE CONTEXT OF THIS ELECTION HOW DO YOU FEEL ABOUT WHO HAS THE BALANCE OF COMPETENCE, OF HOW TO USE IT? THE THREAT ACTORS OR COMPANIES LIKE YOURS WHO AIM TO HELP FIGHT BACK AND PREVENT THINGS SPREADING, LIKE A I-GENERATED CONTENT? CHRISTOPHER: FIRST OF ALL, THE GOOD NEWS IS THE UNITED STATES HAS THE BEST AI TECHNOLOGY IN THE WORLD. I THINK WE HAVE ACTUALLY DONE WORK IN OUR OWN ANALYSIS HERE AT RECORDED FUTURE, WHERE WE HAVE GOTTEN OUR HANDS ON THE BEST RUSSIAN AND CHINESE AI, AND USING WHATEVER METHODS, WE WILL LEAVE IT AT THAT, HE COULD GET OUR HANDS ON IT AND PLAYING WITH IT AND DOING ALL KINDS OF INTERESTING STUFF WITH IT. IT IS NOT AS GOOD AS WHAT WE HAVE HERE. THE GOOD NEWS IS THE U.S. IS AHEAD, AND IT IS IMPORTANT
WE KEEP BEING AHEAD. THERE ARE INCREDIBLE WAYS WE CAN APPLY THIS SORT OF INTELLIGENCE TO BE ABLE TO DISCERN MALICIOUS INFORMATION, AMONG OTHER THINGS. SO THERE IS GREAT WAYS WE CAN HELP WITH THAT.
DO YOUR POINT, IT IS NO DIFFERENT WITH GENERAL CYBERSECURITY, GENERAL INTELLIGENCE. WE ARE TALKING ABOUT DISINFORMATION, BUT WE ARE GOING TO HAVE TO KEEP INVESTING, HAVE TO BE AGGRESSIVE. WE HAVE TO BE CAREFUL SO THAT WE DO NOT PUT BIG REGULATORY STOPS IN THE WAY OF STAYING AHEAD. AGAIN, THE U.S.
IS AHEAD OF EUROPE BECAUSE OF REGULATORY BEING MORE PERMISSIVE OVER HERE. WE HAVE TO KEEP THAT. ED: CHRISTOPHER AHLBERG, CEO OF RECORDED FUTURE. WE APPRECIATE THE OPTIMISM. WE ARE GOING TO DISCUSS ALL THINGS EUROPEAN BENCH CAPITAL WITH HECTOR MASON FROM EPISODE1 VENTURES. WHAT ARE YOU LOOKING AT?
CAROLINE: LOOKING ACROSS TO JAPAN AND NINTENDO. IT HAS RAISED ITS FORECAST FOR THE SWITCH CONSULT. SALES, THEY THINK THEY'RE GOING TO HAVE 15.5 MILLION FOR THIS FISCAL YEAR. THE PROPHET IS GOING TO BE ON THE HIGHER END OF EXPECTATIONS.
IT LOOKS AS THOUGH THEIR HOLIDAY QUARTER WAS GOOD. CUSTOMIZE ADDITIONS -- CUSTOMIZED EDITIONS HELPED RAISE EXPECTATIONS MORE BROADLY. 3% ON THE NOSE FOR THE INTRADAY TRADING WE SAW IN JAPAN. THIS IS "BLOOMBERG TECHNOLOGY." CAROLINE: LET'S TAKE A LOOK AT THE LATEST IN THE VENTURE CAPITAL WORLD.
EPISODE1 VENTURES, ONE OF EUROPE'S LEADING EARLY-STAGE FUNDS IS LAUNCHING A FUND TO INVEST IN THE TO BE SOFTWARE. LET'S CHAT THROUGH ALL OF IT WITH HECTOR MASON, PARTNER AT EPISODE1 VENTURES. WE ARE INTERESTED IN SOME OF YOUR CORNERSTONE INVESTORS. NOT ONLY DO YOU TAKE MONEY FOR -- FROM SOME GREAT COMPANIES THAT ARE WELL-KNOWN, BUT ALSO U.K.-GOVERNMENT-BACKED MONEY. WHAT IS IT THAT THEY WANT TO SEE GROWN IN EUROPE AND IN THE U.K. MORE BROADLY? HECTOR: THANKS FOR HAVING ME ON. WE HAVE BEEN AROUND A WHILE AND
GROWN A REALLY SOLID INVESTOR BASE. INVESTING IN SEED STAGE COMPANIES, LARGELY BASED IN THE U.K. WITH CHECKS OF BETWEEN THE HUNDRED THOUSAND POUNDS AND 3 MILLION POUNDS. IT IS REALLY IMPORTANT TO BUILD THAT DIVERSITY. YES, WE HAVE INSTITUTIONAL INVESTORS TO BACK US FUND AFTER FUND, BUT AS YOU MENTIONED WE ALSO HAVE THIS HIGHLY SUCCESSFUL ENTREPRENEURS, INCLUDING MANY UNICORN BUSINESSES WHO HAVE CHOSEN TO TRUST US WITH SOME OF THEIR MONEY IN THIS LATEST FUND.
THEY COME IN ALONGSIDE LARGER INVESTORS. REALLY, TO ENSURE THAT THE U.K. CONTINUES TO DELIVER OUTSTANDING TECHNOLOGY ON A GLOBAL STAGE. ED:
HOW WOULD YOU SUMMARIZE THE EARLY-STAGE ENVIRONMENT RIGHT NOW IN THE U.K.? PARTICULARLY INTERESTING THAT YOU ARE TALKING PRE-SEED. HE SEEMED TO SPECIALIZE IN THIS AREA WHERE YOU CAN WRITE A SMALL CHECK, BUT MANY OF THOSE PORTFOLIO COMPANIES DO GO ON TO RAISE AT HIGHER LEVELS. HECTOR: ABSOLUTELY. WE ARE SPECIALIST AT PRE-SEED AND SEE. WE ARE INVESTING IN FLEDGLING STARTUPS, AND WE HOPE AND HAVE SEEN THAT MANY OF THOSE QUANTA BECOME LARGE COMPANIES WITH MANY HUNDREDS OR THOUSANDS OF EMPLOYEES. SO, THE REASON WHY WE INVEST AT
THIS STAGE IS THERE ARE FANTASTIC RETURNS AVAILABLE, AND YOU GET IN AT THE GROUND FLOOR THESE COMPANIES AND YOU CAN SEE THEM PROGRESS AND GO ON THEIR JOURNEYS TO SUCCESSFUL OUTCOMES. ACTUALLY, WE HAVE SEEN A 75% GRADUATION RATE IN OUR PORTFOLIO OR COMPANIES GO ON TO FUNDING. WHICH IS ALMOST FOUR TIMES AS HIGH AS THE MARKET AVERAGE. CAROLINE: WHAT IS INTERESTING AS THIS COMES AT A TIME WHERE THE U.K. HAS VERY MUCH BEEN ABLE TO PUT ITSELF FRONT AND CENTER WHEN IT COMES TO AI.
I'M LOOKING AT ROBIN AI, AMONG YOUR PORTFOLIO COMPANIES. WE HAVE SPOKEN TO THE LEADER OF THAT BUSINESS, AND APPLYING AI IN THE LEGAL FRAME OF APPLICATIONS. THERE IS SOME INTERESTING VIEWS OUT THERE IN THE U.K. AT THE MOMENT THAT THERE SHOULD BE MORE OF AN IMPETUS TO REGULATE, AND THE U.K. GOVERNMENT IS NOT GETTING AHEAD
OF THIS. WHAT HAVE YOU MADE OF THE GOVERNMENT SAYING, WE ARE WAITING AND WATCHING AND TALKING TO CIVIL SOCIETY AND ENTREPRENEURSHIP IN THE COUNTRY MORE BROADLY? HECTOR: IT IS A GREAT QUESTION AND THERE IS A LOT HAPPENING IN THE SPACE AROUND AI REGULATION. WE ACTUALLY HAVE A COUPLE OF AI PHDS ON OUR TEAM. WE HAVE A NATURAL INTEREST, AND IT IS IMPORTANT THAT PEOPLE ARE DEVELOPING THESE TECHNOLOGIES WITH AN EYE ON BEING RESPONSIBLE. WE LOVE COMPANIES LIKE ROBIN
AI, AND WE HAVE OTHER AI COMPANIES IN THE PORTFOLIO THAT ARE ABLE TO BUILD REAL DEFENSIBILITY AROUND THEIR BUSINESSES. WHETHER IT IS DATA THAT PEOPLE WOULD FIND HARD TO ACCESS SO THAT THEY CAN OUTCOMPETE OTHER PLAYERS IN THE MARKET, OR MORE GENERALLY COMPANIES USING AI AS PART OF THEIR EXISTING TOOLS TO MAKE THEIR PRODUCTS BETTER FOR THEIR CUSTOMERS. WE ALSO REALLY LIKE COMPANIES THAT ARE USING AI TO HELP ENTERPRISE ADOPTION AND SPEED UP THAT PROCESS. BUT YOU ARE ABSOLUTELY RIGHT.
A LOT OF FOCUS NEEDS TO BE PLACED ON HOW WE CAN DO THIS RESPONSIBLY. AND THE PORTFOLIO IS TAKING RESPONSIBILITY THERE AND BEING CAUTIOUS AROUND ROLLING OUT THE TECHNOLOGIES. ED: HECTOR MASON, GENERAL PARTNER, EPISODE1 VENTURES. GREAT TO HAVE SOME OF YOUR TIME. WE DON'T OFTEN TALK ABOUT THAT U.K. MARKET IN ISOLATION. COMING UP, WE ARE GOING TO TALK
ABOUT USING AI TO TACKLE THE SECONDARY MARKET FOR RETAIL RETURNS. HAVE YOU EVER SENT -- SENT SOMETHING BACK AND THOUGHT, WHAT HAPPENS TO A CHECKUP THAT CONVERSATION WITH BILLIONAIRE JON PAUL DID YOU. ED: A NEW AI COMPANY WANTS TO TACKLE A NICHE PROBLEM IN RETAIL. FINDING A HOME FOR RETURNED INVENTORY THAT WOULD OTHERWISE BE GATHERING DUST. THE COMPANY IS BILLIONAIRE JOHN PAUL DEJORIA'S LATEST VENTURE. HE JOINS US RIGHT NOW ON BLOOMBERG TECHNOLOGY.
THIS IS INTERESTING. IF I RETURN ANY GOOD IT WILL END UP IN OVER -- IN A WAREHOUSE SOMEWHERE, JP. THERE IS A MARKET FOR THAT. THERE ARE DISCOUNTERS, RETAILERS LOOKING FOR THAT BIG VOLUME OF USED OR RETURNED INVENTORY. BUT IT TAKES A LONG TIME TO GET HOLD OF IT. EXPLAIN THE POINT. JOHN PAUL: WOULD LOVE TO. EITHER WAY, IT IS BIGGER THAN PEOPLE KNOW.
ONE IN SIX OF MOST RETAIL PRODUCTS ARE RETURNED. IT IS A TRILLION DOLLAR BUSINESS. THIS YEAR IT WILL BE A $1 TRILLION BUSINESS. WHAT HAPPENS IS THIS. PEOPLE BUY THINGS, MANUFACTURERS OVERLOAD THINGS, THEN WHAT DID THEY DO WITH A CHECKUP SITTING IN WAREHOUSES, TRUCKS GO BACK AND FORTH. WE HAVE PUT TOGETHER IS A SPECIAL PLATFORM THAT COSTS THE MANUFACTURER, OR OUR CLIENTS, NOTHING TO IMPLEMENT AS WELL AS USE.
WHAT IT DOES IS NEXT THE SELLER AND BUYER OR MANUFACTURER INSTANTANEOUSLY. INSTEAD OF SITTING IN A WAREHOUSE FOR WEEKS AND BEING SHUFFLED AROUND. IT ALSO ELIMINATES LANDFILLS.
ONE OF OUR OFFSHOOTS, WE REDO EVERYTHING SO IT WILL NOT BE IN LANDFILLS. IT ELIMINATES TENS OF THOUSANDS OF TRUCKS. HAULING STUFF BACK AND FORTH. THEN WHAT IS THERE ON THE SHELF, IT GIVES THE PERSON THAT HAS IT, WHETHER IT IS A MANUFACTURER OR THE RETAILER WE DEAL WITH, THE HIGHEST VALUE AND HIGHEST RETURN INSTANTLY, WHERE THEY GO DIRECTLY TO THE SECOND PERSON WHO BUYS IT.
WHAT WE DO IS, OUR SOFTWARE, AI, TAKES IT FROM THE PERSON THAT HAS IT, WHETHER IT BE THE MANUFACTURER OR WHOLESALER, AND SENDS IT OUT TO OUR IMPLEMENTATION, ALL OF THESE VARIOUS PEOPLE, THOUSANDS OF THEM EVERYWHERE, WHO ARE THE ACTUAL BUYERS. IT PUTS THEM IN TOUCH. YOU TAKE SOMETHING WORTHLESS AND MAKE IT VALUABLE. THAT IS PRETTY GOOD. YOU KNOW, THAT IS PRETTY GOOD.
INSTANTLY INSTEAD OF WEEKS. ED: WE KNOW YOU AS THE FOUNDER OF PAUL MITCHELL, AND LATER IF YOU DON'T MIND ME SAYING, YOU BOTH A LOT OF YOUR WEALTH ON THE SALE OF PATRON. JOHN PAUL: YES, PATRON TEQUILA. ED: HOW DID YOU END UP IN AN AI COMPANY? JOHN PAUL: I GOT INVOLVED MANY YEARS AGO, SEVEN, EIGHT YEARS AGO WITH RENEWED LOGIC.
IT WAS A COMPANY THAT MY DEAR FRIENDS PUT TOGETHER THAT I GOT INVOLVED WITH. IT TOOK THINGS OUT OF CLOSETS, WAREHOUSES, THINGS THAT WERE ELECTRONIC THINGS, FOR EXAMPLE TELEPHONES, THAT HAD TO BE DISASSEMBLED. THE IMPORTANT PARTS THAT COULD BE REUSABLE TAKEN OUT, AND THE REST DESTROYED ECOLOGICALLY INSTEAD OF HIDING IT IN A LANDFILL. THE NEXT STEP WOULD BE, HOW DO WE TAKE THAT TO THE NEXT STEP? HOW DO WE MAKE IT MORE VALUABLE TO SOME OF OUR CUSTOMERS TO ACTUALLY MOVE THEIR GOODS INSTANTLY? AND THAT IS WHAT WE WORKED ON. I SPENT MILLIONS OF DOLLARS
PUTTING THIS TOGETHER WITH SOME OF THE GREATEST PEOPLE. GARY IS ONE OF THE BEST IN THE WORLD, ONE OF THE MAIN GUYS THERE, ONE OF OUR PARTNERS. GARY STEPHENS, JUST A GENIUS AT WHAT HE DOES. WE TOOK THAT ANGRY PEOPLE PUT IT TOGETHER. THE WORLD NEEDS TO CLEAN UP THE OCEANS, NEED TO CLEAN UP THE LANDFILLS, WE NEED TO SAVE USING TRUCKS WHERE YOU DON'T HAVE TO, AND USING PEOPLE WHERE WE DON'T HAVE TO REPETITIOUS THEY.
IT MAKES THE BUSINESS SHORTER, QUICKER, AND MUCH MORE VALUABLE. I'M ALL ABOUT FEWER MOVING PARTS. CAROLINE: WHY DO YOU THINK THIS HASN'T BEEN SOLVED ALREADY? IT IS NOT NICE. YOU JUST ARTICULATED THE TRILLIONS OF DOLLARS OF VALUE. WHY HASN'T SOMEONE DONE THIS? JOHN PAUL: PEOPLE HAVE DONE IT BEFORE, BUT IN VARIOUS SEGMENTS. WHAT WE DO WITH OUR AI IS PUT
IT ALL TOGETHER. INSTEAD OF GOING FROM THE MANUFACTURER OR WHOLESALER TO A WAREHOUSE, THEN TRY TO GET IT OUT TO VARIOUS CUSTOMERS, WE GO DIRECTLY TO THE CUSTOMER. NO ONE HAS EVER PUT THAT TOGETHER BEFORE. AND IT AFFECTS MANY INDUSTRIES. WE ARE HERE, EVEN IT HELPS OUR COMPETITORS OUT, BECAUSE IT HELPS THEM MOVE THINGS QUICKER. WE ARE ALL WORKING WITH THEM
ALSO. SO EVERYBODY WINS. THAT IS HOW AMERICA WORKS. AND AMERICA STILL WORKS, BY THE WAY. IT IS STILL THE LAND OF OPPORTUNITY. CAROLINE: WE ARE AN OPTIMISTIC SHOW TODAY
AND WE ARE LOVING IT. FROM YOUR PERSPECTIVE, WHO DO YOU SIGN ON? HOW MANY DO YOU HAVE ON THE PLATFORM? BECAUSE YOU WERE COMING OUT OF STEALTH. JOHN PAUL: THE BEST WAY TO DO IT IS THIS. WE WENT FROM ONE PERSON TAKING ORDERS NOW, AND WE ARE GOING TO BE AT THE BIG SHOW GOING ON IN LAS VEGAS THIS WEEK. I'M THE KEYNOTE SPEAKER THERE. FROM ONE TO 17 PEOPLE, JUST IMPLEMENT IT. WE HAVE PEOPLE STANDING BY
RIGHT NOW. WE HAVE A FEW THAT WE HAVE IMPLEMENTED, BUT THERE ARE QUITE A FEW. IT WILL END UP, PROBABLY THOUSANDS, BECAUSE NOBODY HAS THIS. IT IS AN ANSWER TO A BIG QUESTION AND BIG CHALLENGE MANUFACTURERS AND RETAILERS HAVE HAD.
MOVE IT OUT, AND ALSO GET TOP VALUE FOR THEIR DOLLAR. INSTEAD OF HAVING TO DISCOUNT IT ALL THE WAY DOWN AND IN THE END MAKE NO MONEY, JUST MOVE IT OUT, GET TOP VALUE THE WAY WE DO IT. CAROLINE: JOHN PAUL DEJORIA, IT HAS BEEN GREAT HAVING SOME TIME WITH YOU. JOHN PAUL: MY PLEASURE. PEACE, LOVE, AND HAPPINESS. CAROLINE: AND TO YOU. PEACE, LOVE, AND HAPPINESS, AND THE END OF THIS EDITION OF "BLOOMBERG TECHNOLOGY." IT HAS BEEN A BROAD RANGING
CONVERSATION AND WE ARE LOOKING FOR EARNINGS AFTER THE BELL TODAY. ED: THERE IS OPTIMISM GOING INTO SOME OF THOSE EARNINGS, AND SOME LESS THAN OPTIMISM. DON'T FORGET THE PODCAST WHEREVER YOU GET YOUR PODCASTS. ON THE BLOOMBERG PLATFORMS, BUT ALSO APPLE, SPOTIFY, AND IHARD. GIVE US FEEDBACK, BECAUSE THEY MIGHT WATCH THE SHOW IN THAT FORM ON THEIR WAY TO WORK. FROM NEW YORK CITY AND SAN FRANCISCO, THIS IS ME LEAVING YOU WITH A SMILE AND OPTIMISM.
AND THIS IS "BLOOMBERG TECHNOLOGY."
2024-02-08 02:30
