May 1, 2024 • 42 mins
Bloomberg's Caroline Hyde and Ed Ludlow break down Amazon's earnings after the company posted its biggest cloud sales growth in a year on AI demand. Plus, AMD fell after its AI chip forecast disappointed Wall Street, and Pinterest's CEO joins for an exclusive interview as the company's revenue surged.
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Speaker 1 (00:01):
From the heart where Innovations, money and power Collie in
Silicon Valley, NBN.
Speaker 2 (00:06):
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 3 (00:24):
I'm Caroline Heinder Bloomberg's weltead quarters.
Speaker 4 (00:26):
In New York, and I met Ludlow in San Francisco.
This is Bloomberg Technology.
Speaker 3 (00:30):
Coming up Amazon.
Speaker 5 (00:31):
It posts a biggest cloud sales growth in a year.
Speaker 3 (00:35):
That's all on AI demand details.
Speaker 6 (00:37):
The't com plus full.
Speaker 4 (00:39):
Chip coverage ahead is AMD falls after its AI chip
forecast disappoints.
Speaker 5 (00:43):
And we sit down with the CEO of Pinterest for
an exclusive interview as that revenue surge is the first
let's check in on the rest of these markets and
actually a little bit of nervousness, shall we say, ahead
of the FAED all important two PM two thirty is when,
of course j Powell comes forward with his press conference.
So we're down about a ten percent, but bouncing off
of our lows. But of course, more broadly, the technology
(01:04):
drag lower by some of those earnings in the chip
names and the read across we're down by two point
five percent.
Speaker 3 (01:09):
Let's call it on the socks.
Speaker 5 (01:10):
I know edge you'll be digging into really what are
the ultimate names that are pulling down the key chip index.
Speaker 3 (01:15):
But I also look at ten year yields actually catching
a bid now. Earlier we saw bond sell off.
Speaker 5 (01:19):
Now they're catching a bid because we see the US
Treasury actually isn't going to be upping its supply in
the coming quarter in terms of bond auctions. That notably,
we have seen some worrying signs when it comes to
economic data today, Manufacturing in particular seeing a slowdown, but
the price is paid still.
Speaker 3 (01:34):
On the upside. So we've got that issue of inflation.
Speaker 5 (01:36):
How much we are actually seeing a cooling or a
steadying of the US economy. Remember we actually saw some
weaker jobs data today as well. Moving on, have a
look at what's happening in terms of you got individual
movers and from a crypto perspective, and I'm looking at
what's happening on the bitcoin down four point three percent
on the day, We're now sub sixt fifty seven thousand
dollars is where we currently trade. Maybe that's a macro picture,
(01:57):
Maybe that's a risk off feel.
Speaker 3 (01:58):
What are you seeing on the.
Speaker 4 (01:59):
Micro Let's start with AMD. Actually, this is a big
move lower in AMD despite actually upgrading their forecast for
sales of AI accelerators from three point five billion to
four billion. The problem was high hope, some in the
street seeing or hoping for guides of eight billion dollars.
We're talking about them three hundred x, which AMD is
(02:20):
going to put out into the market to compete against
Nvidia principally h two hundred. But they also sing a
slowdown in gaming. Old is new, right, AMD's the name
we used to talk about because you built your custom
rig with AMD GPU if you want to play high
performance games. We'll come back to that in just a
moment with our analyst, con Jensabani, and then Amazon Amazon.
Speaker 6 (02:41):
Actually it's a kind of muted response.
Speaker 4 (02:42):
We're up two point three percent strong first quarter, tep
it outlook for sales in the second quarter. But the
story is AWS annual revenue run rate of one hundred
billion dollars.
Speaker 6 (02:53):
But the devil's in the detail.
Speaker 4 (02:55):
And it was just one sentence from Brian Zawski, the CFO,
that generative AI revenue run rate in the multiple billions
of dollars, and that seems to be enough to show
that AI is actually starting to show up in the financials.
Speaker 6 (03:07):
Let's dig into Amazon's results.
Speaker 4 (03:08):
After the company's cloudion, it posted it's strongest sales growth
in the year.
Speaker 6 (03:12):
We're bloomed by Spencer Sopa.
Speaker 4 (03:13):
Spencer, you were on that media call with Brian Ozowski,
and I think that's the focus.
Speaker 6 (03:17):
Here, isn't it.
Speaker 4 (03:18):
It's the AI is a real thing that makes real
money sort of.
Speaker 7 (03:23):
Yeah, the profitability for AWS and the quarter was huge.
You know, it accounts for less than twenty percent of
all Amazon revenue, but it's like two thirds of its profit.
Speaker 1 (03:35):
So that was big.
Speaker 7 (03:36):
And then the question for the investors is, you know,
what's the pace of investment going to look like and
how are these margins going to look as Amazon continues
to invest in new data centers to fuel this boom,
and there is a little bit of just some breadcrumbs dropped.
Amazon said it dropped about fourteen billion in the first
quarter on data centers, and it said that'll be the
low point for the rest of the year, so they're
probably looking at about, you know, north of fifty billion
(03:59):
in data center investment at least this year.
Speaker 5 (04:03):
Nenevertheless, managed to support that operating margin what was it,
thirty seven point six percent whyer since they started disclosing
what it was and breaking out AWS. But the bread
and buffer that we all know Amazon for in many
ways is the e commerce play.
Speaker 3 (04:15):
And how's the consumer looking for them right now?
Speaker 6 (04:18):
Yeah, that's where things were a little soft.
Speaker 7 (04:19):
The overall revenue guidance was a little light for the
current quarter, and they said that consumers are definitely pinching
their pennies there. The average order size is smaller, and
so that hurts the margins of the e commerce business
because if you're shipping less expensive things, it still costs
the same amount to process and ship those items. So
the e commerce outlook is good, just not nearly as
(04:42):
good as AWS was, and they're definitely seeing some signs
of consumer strength.
Speaker 3 (04:46):
We've got the Pinterest CEO coming on a little bit later.
Speaker 5 (04:48):
We're being asking a lot about advertising, and of course
they've got a partnership with Amazon. How is prime ads looking,
How is that particular part of this newer part of
the business doing.
Speaker 7 (04:58):
So Their ad business is still strong, still predominantly the
sponsored ads things that you see on the actual website.
There wasn't a lot of clarity about the contribution from
the video ads that they've added. Analyser estimating somewhere in
the realm of I think five billion was the last
I saw for the year from that business. But it's
a yeah, there wasn't a lot of clarity on exactly
(05:19):
what it's adding. An Amazon emphasized, look where we're going
to be lighter on the advertising, the most other programming
and television and that sort of thing. If you watch
Prime Video, you'll see fewer advertisements. So they're definitely, you know,
moving delicately on that new revenue source.
Speaker 5 (05:34):
Yeah, don't want to put us off of our watching Spencer.
It's so nice to have him here in New York.
Spencer sofa on all things Amazon. Meanwhile, we are sticking
on this earnings. Let's break down AMD. Look, it was
giving a disappointing forecast. In particular, there was sluggishness when
it came to gaming demand. We want to bring in
Bloemberg Intelligence Senior analyst Kunjan Sabani, And it really seems
to be Q two. Everyone slightly focusing in on because
(05:55):
Q you are not good.
Speaker 8 (05:58):
Yeah, exactly, I mean fundamentally the already remains intact. It's
that Sentimentally, it didn't beat enough the high lofty investor expectations,
especially for the GPU numbers coming into the earnings. A
second point is the rest of the non AI business
is growing through a persistence slump, which is being heavily
on all the AI goodness, so over all at the
(06:18):
company level, actually, the EPs numbers for twenty four and
twenty four came down at had bit. That's not what
you want to see from a flying AI flying high name.
Speaker 4 (06:27):
I was trying to unpick what Lisa Sue is saying.
It seemed in the first instance she was saying AMD
is supply constrained. In other words, there's great demand for
the AI accelerator product, they just can't get enough of them.
She data said in the call. Actually that's not the case.
The full year guy doesn't factor in any supply constraint.
What is the story here with demand versus supply? The
(06:50):
mi I three hundred X clarify from.
Speaker 8 (06:53):
Our perspective, the demand continues to run higher. Is just
supply is not binary the way people think, so they
do the second quarter supply is constrained. There will be
more supply coming in in three Q and four Q,
and there's only so much they can ship on the
second half of the year, and The second point to
remember is there's all these high, crazy high expectation numbers
coming from the byside, where people are going in and
(07:15):
evaluating how much supply is coming in and multiplying that
number of by based on how.
Speaker 6 (07:20):
Many units the MD can ship.
Speaker 1 (07:21):
But that's not how it works.
Speaker 8 (07:23):
The supply when it comes in doesn't run one hundred
person utilization and yield and et cetera. So it's not
a linear equation that you can extrapolate.
Speaker 4 (07:30):
You hear that buyside, you've got crazy high expectations. Even so,
do we think that AMD gave enough evidence they will
take market share from Nvidia, which is so far ahead
in the AI accelerator race.
Speaker 8 (07:44):
We believe so, like they've showcased enough engagements both at
the cloud and the enterprise customer. And the second part
is more important because the next wave of increasing capex
is going to come from the enterprise customers, especially in
the inference where the MI three hundred sort of have
a more competitive positioning.
Speaker 4 (08:02):
Bloomberg Intelligence Senior analyst Kunjen Sabani check out his research
on the Bloomberg terminal. Let's keep a conversation going with
Daniel o'reagan, Managing Director, of Global Equities at Missuo Americas.
Speaker 6 (08:12):
Let's start with AMD.
Speaker 4 (08:15):
Let's set a baseline that expectations were high, and we
got a raised forecast, and it doesn't.
Speaker 6 (08:20):
Seem to have been good enough.
Speaker 1 (08:21):
Yeah, precisely.
Speaker 9 (08:22):
I think your previous guests did an incredible job of
outlining exactly what went down. Listen results were great, they
were tremendous. I think in any other tape this name
would be trading a little bit higher. I just think
expectations got a little ahead of themselves. So she was
very prudent last night, raising GPU guides from three and
a half billion to four. Again, we heard that the
bus I was looking for closer to six, maybe even seven.
(08:43):
Long story short, as we're sticking with it, we like
it down here. There are other levers to pull also too.
If you're a massive hyperscaler looking to secure as many
chips as possible, you definitely want to diversify your offerings
instead of just having all your chips in one basket
with Nvidia. You think there should be other people that
supply your chips, and I think AMT probably fits that bill.
Speaker 5 (09:03):
Can you go into the other levers that you just
said that they have to pull What in particular do
you want to see pulled, Daniel.
Speaker 1 (09:08):
That's a great question.
Speaker 9 (09:09):
So the gaming side was actually one lackluster area for
next quarter, But I think more importantly going forward, there's
potential for an enterprise refresh, especially on the back of COVID.
A lot of Fortune one hundred, Fortune five hundred companies
have old legacy systems that they.
Speaker 1 (09:24):
Have to rip and replace.
Speaker 9 (09:25):
That could bode well for them in the second half
of twenty twenty five or even earlier twenty twenty five.
Speaker 5 (09:30):
Okay, interesting, I want to pivot away therefore, not just
well a boy from AMD, but more broadly looking at
the cloud and some of those hyper scaleres that you
say are going to be the end demand for an AMD.
Speaker 3 (09:40):
Amazon today coming out looking really.
Speaker 5 (09:42):
Strong when it comes to it's aws, when it comes
to its AI focus is more broadly that the level
that you want to see continuing to be pulled.
Speaker 3 (09:49):
By any Jesse.
Speaker 9 (09:50):
Yeah, So that conference call last night was one of
the most polish I've listened to realllly in years, maybe
on the back of the Metal one from two quarters ago.
She basically said that this opportunity with AI is almost
as tremendous as anything he's ever seen.
Speaker 1 (10:05):
And they're willing to spend tens of billions of.
Speaker 9 (10:07):
Dollars to reap the rewards later on, and they're not
afraid to spend. And I wouldn't bet against these guys.
We've literally seen it for eighteen years. They identify a
massive technology, they invest aggressively.
Speaker 1 (10:18):
Profits and margins get hit a little bit, but.
Speaker 9 (10:20):
Then later on profitability hockey sticks as everybody comes to
realize these guys are ahead of the curve. I think
the same thing's going to happen with Amazon. And I
also think the spending votes very very well for the
supply chain names for example, like the NVIDIAs and the
AMDs of the world, because they are the arms.
Speaker 1 (10:35):
Providers for this AI race.
Speaker 9 (10:37):
So I think the journal was positive for the entire
AI ecosystem.
Speaker 4 (10:41):
Daniel, I'm interested in that thesis. You said it was
the most bullish call from Andy Jesse and Brian Azowski
you've heard in some time. Was it light on details though?
I mean, think about what you just said. The one
thing we didn't hear is any sort of tangible number
for CAPEX other than Brian saying will be meaningfully higher
in twenty two money full, right.
Speaker 9 (11:02):
I think that's a great question, and I don't think
they wanted to pigeon and pole themselves with just specifically
quantifying it. The fact that they used overwhelming or significant
I think that gave them room to kind of fall
down later on. At the end of the day, they
know that there's a massive opportunity, They're okay to spend
aggressively to take advantage of that. One thing that I
think that could be different this time is back in
(11:26):
previous investment cycles, they didn't have as much profitability as
they do now. Amazon has multiple mature businesses, right, It's
not just retail. They have retail, they have AWS now,
they have advertising, they have logistics, they have all these
other profitable businesses that I hope or think that could
blunt the impact of profitability.
Speaker 1 (11:45):
And also too.
Speaker 9 (11:46):
On the call, they reiterated over and over again that
they think they can do both. They think they can
be efficient and they think they can drive growth at
the same time. Let's see if they can thread the needle.
But like I said earlier, I wouldn't bet against these guys.
Speaker 4 (12:00):
If AWS is the cash cow and the bright spot
for everyone, what's the next best thing in the multifaceted business.
Speaker 1 (12:07):
Daniel, that's a great question. I really don't know.
Speaker 9 (12:11):
I think it's AWS for now. One area that was
weaker last night in terms of guidance, I don't even
think really matters. They said that the European consumer was lackluster,
which her top line.
Speaker 1 (12:22):
I don't really talk.
Speaker 9 (12:23):
To any investors that are concerned much about their European
consumer business. So again, I think the focus is on AWS,
but going a little deeper, the operating profit for their
retail business was tremendous, Like this was their bread and
butter ten years ago, and it's like they're growing past
that now. And to AWS, I think it's just to
your dispenser's point earlier, it's just going to continue to
(12:44):
drive the bottom line and the entire ecosystem is just
going to get better.
Speaker 5 (12:48):
And meanwhile, they're not particularly articulating CAPEX when it comes
to the amount of spending.
Speaker 3 (12:53):
But what we can glean from Microsoft.
Speaker 5 (12:55):
From Amazon, from IBM, from anyone that's providing some sort
of cloud offering is that they spending in this spending big.
What do we therefore worry about or be optimistic about
when it comes to video that's coming or the other
big chip names that need this sort of exuberance to
suspend the market cap that we've continued to see.
Speaker 1 (13:14):
You know, that's a great question.
Speaker 9 (13:16):
We kind of say that it's the trillion dollar question,
right is how many more quarters are these AI spenders
going to get the hall pass from investors and tell hey,
show me the money, show me the ROI. You spend
tens of billions of dollars on this AI buildout, When
are we going to get paid back?
Speaker 1 (13:30):
The jury is still out right, we.
Speaker 9 (13:31):
Don't know exactly what's going to happen Jess yet. How
last night Andy Jesse did say a few times that
they're already seeing billions of dollars of AI related revenue
on AWS, so I don't even want to say it's
brings shoots, but already making a good.
Speaker 1 (13:46):
Headway in that segment.
Speaker 9 (13:48):
And if you remember last week we had amazing az
your numbers, is Microsoft ajurre actually accelerated year over year
on a big number.
Speaker 1 (13:55):
Google Cloud obviously continues to do well.
Speaker 9 (13:57):
So we've now heard from three of the major cloud
providers through the world's biggest hyperscalers come back with really
tremendous results. It's just it gets me pretty biled up
on space.
Speaker 5 (14:07):
Daniel Reagan, thank you for being built up with us,
Managing director and Global Equities over at Azooho America's great
to have some time with you.
Speaker 6 (14:22):
Here's some news time for talking.
Speaker 4 (14:23):
Tech Binance founder Changpeng Jow was ordered to spend four
months in prison for failures that allowed cyber criminals and
terrorist groups to freely trade on the world's largest cryptocurrency exchange.
Speaker 6 (14:35):
The sentence was far below.
Speaker 4 (14:36):
The three years requested by prosecutors who had sought to
make an example out of Joo to a heavily scrutinized
industry which is rebounding frankly from a slew of high
profile scandals. Plus, Paramount Global agreed to extend contract renewal
talks with Charter Communications, the owner of CBS and MTV,
is said to have extended talks with Charter, one of
(14:58):
the largest cable TV providers, the head of last night's
deadline preventing its channels from going dark on the cable service,
and Tesla's pivotal partnership with Buydo in China may amount
to a u turn of sorts for Elon Musk, the
Tesla CEO has long claimed his company can offer self
driving without HD maps, but in order to go to
(15:19):
market with FSD in China, he had no choice but
to join with a local partner for a mapping license,
which was by.
Speaker 6 (15:25):
Do carroc Oh.
Speaker 5 (15:26):
Boy, let's stick with Tesla because there is so much
news which ed you and team have been breaking. The
company actually eliminating almost its entire supercharger organization, which is built,
you know, a vast network of public charging stations that
basically every major automaker is in the process of trying
to tap into in the United States. We've then had
breaking news that well, the head of HR is now
(15:47):
stepping down me most Crowdrudell is with us and Craig.
Let's just start on the supercharger element of this, because
this has got a lot of well the auto industry worried.
Speaker 3 (15:57):
I'm not sure of course whether internally at Tesla they're
warned too.
Speaker 10 (16:01):
I think it's incredible in part because to Tesla's credit,
this was a fantastic business that they built over more
than a decade. I think, you know, you can sort
of quibble with, you know, some of the promises made
and promises not necessarily kept that Musk has offered over
the years. But what this company has done is built
a really solid and extensive, fast, reliable charging network. And
(16:25):
you hear that, you know, from Tesla customers all over
the place, you know, when they talk about why they
love their car so much. This is one of the
sort of main you know, positives that that is often
pointed to is that you know, when you're in need
of a top up, Tesla has, you know, the charging
network to support you. And so for them to you know,
make this sudden decision to get rid of, as you know,
(16:49):
roughly five hundred people, including the head of this business,
who they just put forward in front of investors a
little over a year ago, as you know, an example
of the deep bench they have behind me as really
is leading to a lot of people scratching their heads.
Speaker 4 (17:04):
Craig, I want to bring you some breaking news that's
happened since you've set in the chair. What I'm hearing
and what I've reported just now with Donna Hole Bloomberg's
DNA Howe, is that Tesla's most senior HR executive, the
senior director, Ali Araballo, has actually left the company. My
suspicion issue was fired, but this is another example of
(17:29):
a high profile exec departure alongside a really big wave
of layoffs.
Speaker 6 (17:34):
So I know that you're aware of this story, just
give us your reaction.
Speaker 10 (17:38):
I think it's it is very interesting that this makes it,
you know, two and two days of major you know,
departures of senior women within this organization. I think it's
a company that you know, for the most part, when
you do tune into these events that Tesla puts on,
it is very much male dominated. And I mentioned that
(17:58):
Investor Day in March of last year, there were sixteen
executives who were trotted out along with Elon Musk. Only
two of those executives were women. I also just think that,
you know, this latest sort of drumbeat of news just
really sort of speaks to this idea of you know,
as you reported ed just last week, of chaos, right,
(18:21):
it really seems like a chaotic moment for this company
where you know, they're trying to sort of fix problems
that they don't have and not addressing problems that they
do have.
Speaker 4 (18:33):
And there are many out there that would know Elon Musk,
to their mind, knows what he's doing and that the
testa will come through the other side. All we can
do is report what's happening inside Bloomberg's created ol. Thank
you very much. Now coming out, Microsoft reveals it invested
in open Ai and it fears of falling behind Google
in the race for AI dominance. We're bringing that Bloomberg
reporting next.
Speaker 6 (18:52):
Stick with us. This is Bloomberg Technology.
Speaker 4 (19:11):
Microsoft's motivation for investing heavily and partnering with open Ai
came from a sense of falling badly behind Google. That's
according to an internal email released them in the Justice
Department's antitrust case against the search giant.
Speaker 6 (19:25):
Joining us as Bloombergs.
Speaker 4 (19:26):
Mike Shephard out of DC leads the coverage of politics
and tech. I love these investigations because I love the
paper trail, and this was a pretty juicy one to
get some details on.
Speaker 11 (19:37):
Yes, this really was, and it provides yet another window,
actually specifically into the battle between the biggest tech companies
over artificial intelligence. This is such an important and emerging
area for them, and such a potentially lucrative one too.
We saw it show up in the earnings reports that
tumbled in last week. Cloud revenue was up for Microsoft
(20:01):
and Google in part on AI services and that helped
their shares, So this is an area where they want
to maintain and edge an advantage. However, it's also an
area of focus for regulators and prosecutors here. It did
happen to be mentioned in this antitrust case against Google,
and this is where the Microsoft internal email emerged.
Speaker 5 (20:22):
And interestingly that it was news organizations that really pushed
for this document in its reductive form to be published. Mike,
we now have Thursday Friday upon us. They're going to
be the closing remarks right of this overall DOJ case
against alphabet Yes.
Speaker 1 (20:38):
That's right, Carolina.
Speaker 11 (20:40):
My colleague Leah Nylam will be covering that very closely
to see how this is going to end up. We
won't have a ruling right away in the case, probably
not until the summertime here, but this is one that
we're watching very closely because it is part of a
series of moves by the FTC and the Justice Department,
(21:01):
which is handling this case against the largest tech companies,
questioning whether they are engaging in anti competitive practices, and
they're looking at them on a series of fronts. When
it comes to artificial intelligence specifically, they're concerned that they're
trying to hoover up or get involved with, or lock
in relationships with these startups like open Ai, like deep
(21:22):
Mind in a way that preserves their market dominance. And
they're also worried about these interlocking directorships too among these
AI startups as well.
Speaker 5 (21:31):
UK CMA Key and I to Mike Shepard just so
on the nose when it comes to Washington, we thank
you so much.
Speaker 4 (21:45):
Welcome back to Bloomberg Technology, Ed Lovelow here in San Francisco,
Alan Hid.
Speaker 3 (21:49):
In New York. And let's just quick check on these
markets because it's.
Speaker 5 (21:52):
A macro day, it's a FED day, and we are
therefore perhaps a little bit of cautious trading ahead of
that all important two pm then two thirty pm press
conference FED chair.
Speaker 3 (22:00):
Power're looking at the NASA currently down some six.
Speaker 5 (22:02):
Tenths of a percent now, and in large part is
the chips that continue to fall. We'll dig into moment
why I'm looking at a ten year yield that actually
catches a bid.
Speaker 3 (22:10):
That's as the US Treasury.
Speaker 5 (22:11):
Says, Look, we're not going to be increasing the pace
of our auctions in the following quarters. So we're seeing
supply side playing to that. We're down some two basis points.
Even though we are still looking at the FED, I'm
looking at what's happening on bitcoin. Look, some of this anxiety,
some of this risk coming off the table, some of
the ETF slowing in terms of their inflows. It's just
pulling us down by almost five percent. We're below that
(22:31):
six well now below fifty seven thousand dollars mark when
it comes to bitcoin.
Speaker 3 (22:36):
Move on some of the individual movers.
Speaker 5 (22:37):
Now, I talked and I pushed ahead to the fact
that the chip stocks are really underwater today. Why AMD. Look,
we did see that tepid forecast. The market wanted to
see more when it comes to the MI three hundreds
in terms of their AI focus, and well, it's hitting
across some of the other big chip names. So we're
off by almost nine percent, let's call it on AMD.
I'm looking at Amazon, though, managing to post what is
(22:58):
strongest quarter for adlars growth that we've seen in several years,
or at least in a year. We're seeing twenty five
billion dollars being brought in. We're seeing overall still the
growth of one point seven percent, managing to be a
relief when it comes to Amazon and strong AI focus
multi billion dollar revenue run rate, and then we have Pinterest.
We're up twenty one percent on the day. Ed, this
is the best day since October twenty twenty for this
(23:20):
social media name, and we've finally got back to this
revenue run rate in excess of twenty percent growth. We're
seeing focus on gen Z. We're seeing a focus on shoppability.
We're seeing a management managing to build momentum, so say
the analysts, and we're going to be digging into it
in a moment.
Speaker 6 (23:34):
I mean that is a big move.
Speaker 4 (23:36):
I did not have Pinterest on my earnings BINGO cards.
So let's dive deeper into Pinterest and those first quarter
sales user growth with Pinterest. CEO Bill ready a bill,
terrific to have you on the program.
Speaker 6 (23:48):
The story seems quite clear.
Speaker 4 (23:50):
Pinterest pushing into shopping and Pinterest focusing on gen Z users.
Speaker 6 (23:55):
Right.
Speaker 4 (23:55):
My question to start what is the relationship in the
activity between the shopping and the gen Z uses.
Speaker 12 (24:03):
Yeah, so you know we're finding our best product market
fit in years. We've hit an all time high with
users more than half a billion users and as you noted,
gen Z is our largest demographic. It's now more than
forty percent of our platform, and it's our fastest growing
demographic as well. And at the core that growth with
gen Z has been the rising actionability in the platform.
(24:25):
Pinterest is where gen Z goes to shop, and as
we've made Pinterest more actionable, so the people who can
get to more of the things they're finding on Pinterest.
We're seeing that work really well for users, where we've
accelerated user growth for seven straight quarters now. But it's
also cutting through for advertisers, where as you noted revenue
grow twenty three percent this quarter, nearly doubling our revenue
(24:47):
growth rate from last quarter. And so we're really seeing
this be quite synergistic between users finding the things that
they love on Pinterest and then advertisers finding this is
a great place for them to meet users that are
in market looking to shop and buy.
Speaker 5 (24:59):
And that's just some of the synergies that you've managed
to bring to bear with Amazon, with Google, with.
Speaker 3 (25:04):
Those ad partnerships.
Speaker 5 (25:05):
Bill, how much of that advertising optic is thanks to
these third parties.
Speaker 12 (25:10):
Well, you know, on the shop ability front, you know,
historically Pintress has solved digital window shopping. It was hard
to get to the things that you found on Pinterest.
We have opened the stores, and in doing that, we're
seeing that retailers broadly are finding great performance on Pinterest.
At the core of our revenue acceleration has been our
strength in low funnel actionability users that are clicking and buying.
(25:34):
We more than double the number of clicks we sent
to advertisers in Q four, and we did it again
in Q one. That is broad based, but we are
seeing our best strength with the largest, most sophisticated retailers
that provide really.
Speaker 1 (25:47):
Great buying experiences.
Speaker 12 (25:48):
We're quite pleased with that, and we also see that
the third party demand that we've brought onto the platform
is doing exactly what it was intended to do, which
is rounding out gaps in our auction and bringing more great, shoppable,
biable content onto Pinterest so that when users find what
they're looking for on Pinterest, they can easily click and
buy it.
Speaker 4 (26:08):
This was a milestone quarter in the sense that global
monthly uses past half a billion for the first time.
You've put a lot of emphasis on gen z So
look forward, what is the arc of user growth and
what drives it, what brings in you users to your platform?
Speaker 12 (26:25):
Bill Yeah, so you know, as I mentioned, this is
our seventh consecutive core of accelerating user growth. We've accelerated
in every geography and with every generation that we track.
Gen zs are fastest growing in our largest but you
have millennials right behind that. So our improvement in the
product has been broad based, and it is that actionability
at the core. But I would say we are just
(26:46):
getting going with that. We see much more building momentum
in that as we look forward, and it's both the
actionability as well as the positivity that.
Speaker 1 (26:55):
We're bringing into it.
Speaker 12 (26:56):
We've made tremendous strides with AI, and AI is bringing
more relevant recommendations for users so they can take action
on more of what they find. But it's also the
case that we're tuning AI for positivity. We're tuning it
to help users feel better not just in finding what
they're looking to shop and buy, but in making sure
that we're bringing inspirational content to them. So we've done
(27:18):
things like inclusive AI, where we have skin tone filters
so people can filter for things that will reflect them
and including diversity by default in our feeds. We introduce
body type AI where people can select body types so
that they can find more things that fit well for them,
and so we want to make it so that every
(27:38):
person on Pinterest can see themselves on Pinterest. And so
that's really leading to great strides.
Speaker 1 (27:45):
In both the.
Speaker 12 (27:48):
Relevance, the representation, and just people feeling positive when they
spend time on Pinterest.
Speaker 4 (27:54):
So last night on the Amazon Media called, Brian Osowski
was asked about Tmu and she in the context of
competition with you guys at pinterest a little bit different,
would you talk about Timu and Shean as potential partners?
Are you seeing any uplift from Chinese advertisers?
Speaker 12 (28:13):
So apac cross border has been a contributor to our growth,
but it's a nice contributor. You know, it's not overwhelming,
but it's a nice contributor. But as I mentioned before,
our strength and retail has been broad based. Retailers of
all sizes are finding strength on Pinterest, and it's because
they're seeing that doubling of clicks that we sent to
(28:33):
advertisers a year on year in Q four and again
in Q one. And it's also because they're able to
meet hard to find shoppers like gen Z on Pinterest,
and they're meeting those shoppers in a really unique moment
because users come to Pinterest when they have clear intent.
More than half the users on the platform, we're here
to shop, but they haven't yet decided what to buy,
so they're not necessarily searching for a specific brand or
(28:56):
a specific item where maybe the decisions already made. They're
coming here with much more general thoughts like cool outfits
for spring, what to wear to Coachella, and those are
great moments for advertisers to meet users because the user
has clear intent but hasn't decided yet what to buy.
And again we're seeing that broad based across retailers. China
cross border is a contributor, but it's broad based strength
(29:17):
for retailers.
Speaker 5 (29:18):
Focusing a little bit more on China for a moment, Bill,
I mean, this is a unique time in social media
more broadly, because it looks as though one of a
key social media player might be falling away.
Speaker 3 (29:29):
Do you think more gen Z will come to.
Speaker 5 (29:30):
You because of TikTok potentially being banned completely no longer
existing in the US.
Speaker 12 (29:36):
Well, when you look at why we are doing so
well with gen Z, it is because we are doing
something very different than the rest of social media. For
gen Z, most of social media has the user in
a lean back entertainment mode. We have the user in
a lean forward mode with intent and purpose. And I
mentioned tuning for positivity. You know, gen Z sees Pinterest
(29:57):
as an oasis away from the toxicity they experience on
much of the rest of social media. They know that
social media has largely become comparative and performative. And if
you go talk to gen Z about why they spend
time on Pinterest, they'll say they go to other places
on social media and see what others want them to be,
what others expect them to be, and then go to
Pinterest to discover what they want to be and invest
(30:19):
in themselves with a small circle of friends. So that's
already winning with gen Z. And we're not sitting around
hoping for the demise of other platforms. We're just busy
building something that makes people feel more positive, is going
to give them a great experience, and that's winning, particularly
of gen Z.
Speaker 5 (30:35):
Okay, so no clear ambition to capitalize in the uncertainty,
but clearly seeing the flow of gen Z. What really
always interests me, Bill is when you break down your
numbers in terms of average users and where they are
you're so dominant in the rest of the world, do
you see US as the area of growth do you
see internationally more the area of growth.
Speaker 3 (30:54):
Where do you see the expansion?
Speaker 12 (30:57):
So that's a great question. As you noted, we have
approximately eighty percent of our eighty percent or more of
our use outside the US, but only approximately twenty percent
of our revenue outside the US. So the improvements we've
made from the user perspective have been broad based. As
I mentioned, we've accelerated users across every geography. On the
modernization side, we are much further along in the US,
(31:20):
and we are now starting to deploy those things internationally,
and so we see international as a huge growth vector
for us, both in terms of what we will bring
to advertisers directly where we do first party selling, as
well as where we're bringing in new sources of demand,
either through third party demand like what we're doing with
our Google partnership in international markets or what we're now
(31:40):
doing with resellers in international markets where they can bring
more local demand, which is going to be great for
those advertisers, but also great for users that will find
more shoppable content as more of those advertisers those international
markets come onto our platform.
Speaker 5 (31:54):
Bill, great to catch up with you thanks to spending
some time with USKS. Very money Pindras CEO Bill ready there.
Meanwhile coming up that we're going to be joined by
Renegade Partners co founder Rosanne Winsec about the.
Speaker 3 (32:05):
Firm's new fun They raise a lot where they're spending it.
Speaker 5 (32:09):
There's a rumot technology, so Pallenteer CEO Alex cart Sequoia's
(32:29):
leader that of Boda venture capitalist Vinod Kozla, that among
the Silicon Valley heavyweights, you're traveling to Washington this week
for a summit on the role of AI and escalating
competition between.
Speaker 3 (32:40):
The US and China.
Speaker 5 (32:41):
Now the Hill and the Valley Forum, as it's called,
is sponsored by a group of vcs including Peter tielback
to Founders Fund that seems to be the second iteration
head and still gets.
Speaker 4 (32:50):
I've got some deja vu. I'm pretty sure we've done
that one before. Let's stick in the world of private
markets and vents capital. Renegade Partners, an early stage venture firm,
just announced the close of it's fun Too with one
hundred and twenty eight million dollars, bringing the total assets
under management to two hundred and twenty eight million dollars.
It's like to say, we're joined by Renegade Partners co
founder and managing director Razan win Sec.
Speaker 6 (33:12):
Welcome. You are going to.
Speaker 4 (33:14):
Invest in what you're calling durable technology companies. What is
a durable technology company?
Speaker 6 (33:20):
Hied?
Speaker 13 (33:20):
Thank you so much for having me. So when we
think about what is a durable company, we're actually looking at,
you know, what are markets that actually really matter here?
What are markets that are large and still relatively untouched
by technology that can support really large outcomes? You know,
I think over the past few years, we've seen a
lot of you know, software selling to software software selling
to startups, and those companies have frankly like evaporated in
(33:43):
this market turn And so one thing that we thought
about a lot in our fund one, and we're thinking
even more about in Fund two. Or what are those
markets that actually really drive like meaningful parts of GDP
and can actually move beyond you know, trends in venture
capital and become lasting companies.
Speaker 6 (33:57):
So what is the secret source?
Speaker 4 (33:59):
So speak like, how is it that your position to
identify a company that fits that profile? And you can
go to your LPs and say, we're pretty confident that
this fits the thesis.
Speaker 13 (34:09):
Yeah, you know, so we're generalists. We're very like sector agnostic,
stage specific, but we like to kind of look at
the market very broadly. So for instance, in our find one,
we have companies like Aerospace Intelligence that sells into aerospace
and defense, COPA Automation selling into PLC right into factories.
So thinking about you know, on shoring and digital transformation.
(34:30):
There companies like Auxiliar selling into biotech FP and A
a great way to get beta access to the beta
of that market without actually investing in a molecular a therapeutic.
Speaker 3 (34:41):
So we really try to.
Speaker 13 (34:42):
Think kind of big tops down and look for great
companies that are going after big problems in those faces.
Speaker 5 (34:48):
Relatively competitive still in the earliest stages of VC. What
do you do that makes you stand out? Rozan, how
do you manage to be supporting some of these founders
which increasingly to to us about bun out about worries
about mental health issues.
Speaker 13 (35:04):
I know it is, Caroline, You're completely right, Like it
is still very competitive there, even though the market feels
softer than it did a couple of years ago. I mean,
as we think about Renegade and like what we can offer,
I always think about like, you know, you can't beat
somebody else at their own games, So how do you
play a game that they can't play? Right Like, we
like to focus ourselves on being like a very bespoke
boutique firm where founders get to work directly with the
(35:25):
founders themselves. Right Like, if you are a founder led
business and you're sitting on your board, you don't want
an employee sitting next to you, you want another founder sitting
next to you.
Speaker 1 (35:33):
Uh.
Speaker 13 (35:33):
We have really great alignment that way, right Like, we
don't have a story about job security or you know
around partnership dynamics because we all in the firm as well.
We only make twenty investments per fund. That means, you know,
only six or seven deals per year, and so we're
really spending a lot of time with each and every
company and you know, helping them where they need help
and getting out of the way where they don't. We
also have a great operating practice where we focus on
(35:55):
you know, people and team. It's led by our incredible
operating partner, a woman named Susan Albyn and and she
really helps our companies think about team organs, team organ design, structure, compensation,
building the hiring and firing machine. And often those are
the things that are keeping early stage CEOs up at
night because we kind of assume that they know how
to build and run a team when often this is
(36:15):
their first time.
Speaker 3 (36:16):
Yeah, we assume that they can be leaders and they
get go.
Speaker 5 (36:19):
I'm interested those as to how you're helping those leaders
and others within those startups to be able to pivot
if they on an AI first business right now?
Speaker 13 (36:28):
Yeah, I mean I think, you know, I think there's
a blessing and a curse today today you're being an
AI first business. We've seen a lot of companies that
are just frankly a thin wrapper on type of open
AI and those businesses are not defensible, you know, I
think really first and foremost, like you have to be
thinking about what is actually driving value for your customer,
what's actually driving OURI, what they're actually going to pay
for after like you know, the AI innovation budgets dry up,
(36:52):
and so frankly, you know, every company is going to
be an AI company. It's just like every company today
is a cloud company. We don't invest in companies because
theyre cloud companies. Every company is a cloud company. AI
is going to be the same way, right, So what
are those products and services that AI can actually supercharge,
that can do you know, different things than just a
great SaaS business that's putting.
Speaker 3 (37:10):
AI into their product.
Speaker 4 (37:11):
You heard the story reported at the top of the segment. Yeah,
some of your industry colleagues Pizza Teel then d Coosa
going to d C. Do you think it's the job
of vcs to do that?
Speaker 13 (37:20):
You know, I think it's important that are like the
Silicon Valley is well represented on the Hill because frankly,
what happens here has a massive impact in the US
and in the world, you know, the world in total,
and you know, I do think there is a role
for it. You know, we have to remember like incentives
drive behavior, so you have to think about what is
everyone's incentive as you know, regardless of what they're doing.
(37:43):
But I think it's important that we're thinking about AI,
you know, at the cutting edge at the federal level.
Speaker 4 (37:49):
Renegay Partners co founder managing director as Sam Winset.
Speaker 6 (37:52):
Great to have you on the program. Thank you.
Speaker 5 (38:01):
It's the latest episode of The Circuit and Bloomberg Originals
hosts and executive producer em Andy Chang. She sat down
with the GM CEO Mary Burrow to discuss well why
she's continuing to bet.
Speaker 3 (38:11):
Big on electric vehicles and autonomous driving particulous.
Speaker 14 (38:17):
We're still as an industry, we're in the early days.
I think what we're still seeing is battery, battery chemistry,
battery technology is still expensive, and because the vehicle's already
a very expensive purchase for consumers, you know, it's getting
continuing to get costs down while we continue to improve
the technology. It almost feels like hype is slowing down.
(38:38):
Do you feel like you're battling that like a sentiment?
You know shift as well. I think it was overhyped
and now it's probably under hyped and the truth is
somewhere in the middle. But you know, again, yes growth
has slowed, but it's still growing. You scaled back some
other EV targets, mainly because of the battery manufacturing issues,
Like why is that still such a challenge. We were
(39:01):
making something new and I grew up in manufacturing, so
I feel like we do have a lot of manufacturing expertise,
but I think we took for granted some of the
newer processes and we will not do that again.
Speaker 12 (39:11):
Yeah.
Speaker 14 (39:12):
Elon Musk has mocked traditional automakers for how long it
took come to get into Eb's Was he right about that?
You know, if I had a do over, I would
have even though we were moving, I would have accelerated
the pace. You know, Hindsight's twenty twenty Tesla stock is
up more than thirteen hundred percent in the last ten years.
GM is up like twelve thirteen percent. You have met
(39:33):
or beat expectations thirty five out of last thirty six quarters.
So when you look at the stock, does it ever
piss you off?
Speaker 3 (39:41):
Yeah?
Speaker 14 (39:42):
It does, I mean because I but but again, I
can get mad about it, and I can be upset
and up frustrated, and believe me, I have those moments.
You know, at the end, it's our responsibility. You can't
go home and have a pity party.
Speaker 4 (39:53):
Watch The Circuit with Emily Chang tonight at six pm
easton in New York on Bloomberg Television, or stream at
eight pm E.
Speaker 6 (40:00):
On Bloomberg Originals. Let's stick with.
Speaker 4 (40:02):
GM, The company's eyeing billions in digital revenues with an
alternative to Apple's car Play, which has become the default
home screen of the center console and vehicles ranging from
Ford's to Ferrari's GM's platform called Altifi was rolled out,
but not without a few hiccups. Joining us now is
the author of that terrific deep dive Bloomberg's Dave as well,
(40:23):
which out of Detroit. You paint the picture of Michael
Wardrum who's picked up this beautiful sixty two thousand dollars
Chevy Blazer EV. He's so proud of it, and he
sits in the cockpit, in the driver's seat, no Apple
car play, And therein lies the strategy from GM.
Speaker 2 (40:41):
That's right. They want to pull people into their cars.
And actually, I've driven the Blazer Rev. It is quite
a good vehicle. Waldron's assessment is right. But they're making
this gamble that people will like the cars get in,
and that they can overcome this consumer inertia and just
pull people away from CarPlay, and they're better Bely, this
CarPlay will project what your phone does, which is music, messaging, podcasts,
(41:05):
that sort of thing. But they can do so much
more with their own internal system. I like how the
head software guy in an interview with me put it
from Rivian said, we don't want our infotainment system in
a arriva and to be the same thing that's in
every rental car, and GM is taking the same approach
with this, but that still means you have to execute
a better system than Apple has, and so far GM's
(41:27):
had a tough time with that. The new system since
they brought it back, has had no issues since they
started selling it again in March, but it was a
very rough start for them. And even after that, if
they can build it well, if they can keep the
software from being buggy, they're still going to have to
get consumers to decide that they don't need CarPlay, and
that can be a tough marketing challenge.
Speaker 5 (41:47):
Tough marketing challenge, but a lot to be rewarded for
when it comes to digital revenue in the future. We
can see why they're trying to tussele it out with Apple.
David Welch, it's a great deep dive. Please go read it.
GMI billions in digital revenue with CarPlay alternative.
Speaker 3 (42:03):
Meanwhile, look, that does it for this edition of Bloomberg Technology.
Speaker 5 (42:06):
We've had CEO conversations, we've deep dived into the earnings,
and there's.
Speaker 4 (42:09):
More to come in Yeah, and you forget that we
have more CEOs coming up twenty four hours time in
the show cloudcom reports tonight, then you've got Apple Thursday.
There is so much more still to come recap.
Speaker 6 (42:21):
This show, though, is a good one.
Speaker 4 (42:22):
On the podcast, Apple, Spotify, and iHeart and of course
the pod goes onto all the Bloomberg platforms as well.
Thanks everyone for tuning in from San Francisco and New
York City.
Speaker 6 (42:31):
This is Bloomberg Technology.
From the heart where Innovations, money and power Collie in
Silicon Valley, NBN.
Speaker 2 (00:06):
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 3 (00:24):
I'm Caroline Heinder Bloomberg's weltead quarters.
Speaker 4 (00:26):
In New York, and I met Ludlow in San Francisco.
This is Bloomberg Technology.
Speaker 3 (00:30):
Coming up Amazon.
Speaker 5 (00:31):
It posts a biggest cloud sales growth in a year.
Speaker 3 (00:35):
That's all on AI demand details.
Speaker 6 (00:37):
The't com plus full.
Speaker 4 (00:39):
Chip coverage ahead is AMD falls after its AI chip
forecast disappoints.
Speaker 5 (00:43):
And we sit down with the CEO of Pinterest for
an exclusive interview as that revenue surge is the first
let's check in on the rest of these markets and
actually a little bit of nervousness, shall we say, ahead
of the FAED all important two PM two thirty is when,
of course j Powell comes forward with his press conference.
So we're down about a ten percent, but bouncing off
of our lows. But of course, more broadly, the technology
(01:04):
drag lower by some of those earnings in the chip
names and the read across we're down by two point
five percent.
Speaker 3 (01:09):
Let's call it on the socks.
Speaker 5 (01:10):
I know edge you'll be digging into really what are
the ultimate names that are pulling down the key chip index.
Speaker 3 (01:15):
But I also look at ten year yields actually catching
a bid now. Earlier we saw bond sell off.
Speaker 5 (01:19):
Now they're catching a bid because we see the US
Treasury actually isn't going to be upping its supply in
the coming quarter in terms of bond auctions. That notably,
we have seen some worrying signs when it comes to
economic data today, Manufacturing in particular seeing a slowdown, but
the price is paid still.
Speaker 3 (01:34):
On the upside. So we've got that issue of inflation.
Speaker 5 (01:36):
How much we are actually seeing a cooling or a
steadying of the US economy. Remember we actually saw some
weaker jobs data today as well. Moving on, have a
look at what's happening in terms of you got individual
movers and from a crypto perspective, and I'm looking at
what's happening on the bitcoin down four point three percent
on the day, We're now sub sixt fifty seven thousand
dollars is where we currently trade. Maybe that's a macro picture,
(01:57):
Maybe that's a risk off feel.
Speaker 3 (01:58):
What are you seeing on the.
Speaker 4 (01:59):
Micro Let's start with AMD. Actually, this is a big
move lower in AMD despite actually upgrading their forecast for
sales of AI accelerators from three point five billion to
four billion. The problem was high hope, some in the
street seeing or hoping for guides of eight billion dollars.
We're talking about them three hundred x, which AMD is
(02:20):
going to put out into the market to compete against
Nvidia principally h two hundred. But they also sing a
slowdown in gaming. Old is new, right, AMD's the name
we used to talk about because you built your custom
rig with AMD GPU if you want to play high
performance games. We'll come back to that in just a
moment with our analyst, con Jensabani, and then Amazon Amazon.
Speaker 6 (02:41):
Actually it's a kind of muted response.
Speaker 4 (02:42):
We're up two point three percent strong first quarter, tep
it outlook for sales in the second quarter. But the
story is AWS annual revenue run rate of one hundred
billion dollars.
Speaker 6 (02:53):
But the devil's in the detail.
Speaker 4 (02:55):
And it was just one sentence from Brian Zawski, the CFO,
that generative AI revenue run rate in the multiple billions
of dollars, and that seems to be enough to show
that AI is actually starting to show up in the financials.
Speaker 6 (03:07):
Let's dig into Amazon's results.
Speaker 4 (03:08):
After the company's cloudion, it posted it's strongest sales growth
in the year.
Speaker 6 (03:12):
We're bloomed by Spencer Sopa.
Speaker 4 (03:13):
Spencer, you were on that media call with Brian Ozowski,
and I think that's the focus.
Speaker 6 (03:17):
Here, isn't it.
Speaker 4 (03:18):
It's the AI is a real thing that makes real
money sort of.
Speaker 7 (03:23):
Yeah, the profitability for AWS and the quarter was huge.
You know, it accounts for less than twenty percent of
all Amazon revenue, but it's like two thirds of its profit.
Speaker 1 (03:35):
So that was big.
Speaker 7 (03:36):
And then the question for the investors is, you know,
what's the pace of investment going to look like and
how are these margins going to look as Amazon continues
to invest in new data centers to fuel this boom,
and there is a little bit of just some breadcrumbs dropped.
Amazon said it dropped about fourteen billion in the first
quarter on data centers, and it said that'll be the
low point for the rest of the year, so they're
probably looking at about, you know, north of fifty billion
(03:59):
in data center investment at least this year.
Speaker 5 (04:03):
Nenevertheless, managed to support that operating margin what was it,
thirty seven point six percent whyer since they started disclosing
what it was and breaking out AWS. But the bread
and buffer that we all know Amazon for in many
ways is the e commerce play.
Speaker 3 (04:15):
And how's the consumer looking for them right now?
Speaker 6 (04:18):
Yeah, that's where things were a little soft.
Speaker 7 (04:19):
The overall revenue guidance was a little light for the
current quarter, and they said that consumers are definitely pinching
their pennies there. The average order size is smaller, and
so that hurts the margins of the e commerce business
because if you're shipping less expensive things, it still costs
the same amount to process and ship those items. So
the e commerce outlook is good, just not nearly as
(04:42):
good as AWS was, and they're definitely seeing some signs
of consumer strength.
Speaker 3 (04:46):
We've got the Pinterest CEO coming on a little bit later.
Speaker 5 (04:48):
We're being asking a lot about advertising, and of course
they've got a partnership with Amazon. How is prime ads looking,
How is that particular part of this newer part of
the business doing.
Speaker 7 (04:58):
So Their ad business is still strong, still predominantly the
sponsored ads things that you see on the actual website.
There wasn't a lot of clarity about the contribution from
the video ads that they've added. Analyser estimating somewhere in
the realm of I think five billion was the last
I saw for the year from that business. But it's
a yeah, there wasn't a lot of clarity on exactly
(05:19):
what it's adding. An Amazon emphasized, look where we're going
to be lighter on the advertising, the most other programming
and television and that sort of thing. If you watch
Prime Video, you'll see fewer advertisements. So they're definitely, you know,
moving delicately on that new revenue source.
Speaker 5 (05:34):
Yeah, don't want to put us off of our watching Spencer.
It's so nice to have him here in New York.
Spencer sofa on all things Amazon. Meanwhile, we are sticking
on this earnings. Let's break down AMD. Look, it was
giving a disappointing forecast. In particular, there was sluggishness when
it came to gaming demand. We want to bring in
Bloemberg Intelligence Senior analyst Kunjan Sabani, And it really seems
to be Q two. Everyone slightly focusing in on because
(05:55):
Q you are not good.
Speaker 8 (05:58):
Yeah, exactly, I mean fundamentally the already remains intact. It's
that Sentimentally, it didn't beat enough the high lofty investor expectations,
especially for the GPU numbers coming into the earnings. A
second point is the rest of the non AI business
is growing through a persistence slump, which is being heavily
on all the AI goodness, so over all at the
(06:18):
company level, actually, the EPs numbers for twenty four and
twenty four came down at had bit. That's not what
you want to see from a flying AI flying high name.
Speaker 4 (06:27):
I was trying to unpick what Lisa Sue is saying.
It seemed in the first instance she was saying AMD
is supply constrained. In other words, there's great demand for
the AI accelerator product, they just can't get enough of them.
She data said in the call. Actually that's not the case.
The full year guy doesn't factor in any supply constraint.
What is the story here with demand versus supply? The
(06:50):
mi I three hundred X clarify from.
Speaker 8 (06:53):
Our perspective, the demand continues to run higher. Is just
supply is not binary the way people think, so they
do the second quarter supply is constrained. There will be
more supply coming in in three Q and four Q,
and there's only so much they can ship on the
second half of the year, and The second point to
remember is there's all these high, crazy high expectation numbers
coming from the byside, where people are going in and
(07:15):
evaluating how much supply is coming in and multiplying that
number of by based on how.
Speaker 6 (07:20):
Many units the MD can ship.
Speaker 1 (07:21):
But that's not how it works.
Speaker 8 (07:23):
The supply when it comes in doesn't run one hundred
person utilization and yield and et cetera. So it's not
a linear equation that you can extrapolate.
Speaker 4 (07:30):
You hear that buyside, you've got crazy high expectations. Even so,
do we think that AMD gave enough evidence they will
take market share from Nvidia, which is so far ahead
in the AI accelerator race.
Speaker 8 (07:44):
We believe so, like they've showcased enough engagements both at
the cloud and the enterprise customer. And the second part
is more important because the next wave of increasing capex
is going to come from the enterprise customers, especially in
the inference where the MI three hundred sort of have
a more competitive positioning.
Speaker 4 (08:02):
Bloomberg Intelligence Senior analyst Kunjen Sabani check out his research
on the Bloomberg terminal. Let's keep a conversation going with
Daniel o'reagan, Managing Director, of Global Equities at Missuo Americas.
Speaker 6 (08:12):
Let's start with AMD.
Speaker 4 (08:15):
Let's set a baseline that expectations were high, and we
got a raised forecast, and it doesn't.
Speaker 6 (08:20):
Seem to have been good enough.
Speaker 1 (08:21):
Yeah, precisely.
Speaker 9 (08:22):
I think your previous guests did an incredible job of
outlining exactly what went down. Listen results were great, they
were tremendous. I think in any other tape this name
would be trading a little bit higher. I just think
expectations got a little ahead of themselves. So she was
very prudent last night, raising GPU guides from three and
a half billion to four. Again, we heard that the
bus I was looking for closer to six, maybe even seven.
(08:43):
Long story short, as we're sticking with it, we like
it down here. There are other levers to pull also too.
If you're a massive hyperscaler looking to secure as many
chips as possible, you definitely want to diversify your offerings
instead of just having all your chips in one basket
with Nvidia. You think there should be other people that
supply your chips, and I think AMT probably fits that bill.
Speaker 5 (09:03):
Can you go into the other levers that you just
said that they have to pull What in particular do
you want to see pulled, Daniel.
Speaker 1 (09:08):
That's a great question.
Speaker 9 (09:09):
So the gaming side was actually one lackluster area for
next quarter, But I think more importantly going forward, there's
potential for an enterprise refresh, especially on the back of COVID.
A lot of Fortune one hundred, Fortune five hundred companies
have old legacy systems that they.
Speaker 1 (09:24):
Have to rip and replace.
Speaker 9 (09:25):
That could bode well for them in the second half
of twenty twenty five or even earlier twenty twenty five.
Speaker 5 (09:30):
Okay, interesting, I want to pivot away therefore, not just
well a boy from AMD, but more broadly looking at
the cloud and some of those hyper scaleres that you
say are going to be the end demand for an AMD.
Speaker 3 (09:40):
Amazon today coming out looking really.
Speaker 5 (09:42):
Strong when it comes to it's aws, when it comes
to its AI focus is more broadly that the level
that you want to see continuing to be pulled.
Speaker 3 (09:49):
By any Jesse.
Speaker 9 (09:50):
Yeah, So that conference call last night was one of
the most polish I've listened to realllly in years, maybe
on the back of the Metal one from two quarters ago.
She basically said that this opportunity with AI is almost
as tremendous as anything he's ever seen.
Speaker 1 (10:05):
And they're willing to spend tens of billions of.
Speaker 9 (10:07):
Dollars to reap the rewards later on, and they're not
afraid to spend. And I wouldn't bet against these guys.
We've literally seen it for eighteen years. They identify a
massive technology, they invest aggressively.
Speaker 1 (10:18):
Profits and margins get hit a little bit, but.
Speaker 9 (10:20):
Then later on profitability hockey sticks as everybody comes to
realize these guys are ahead of the curve. I think
the same thing's going to happen with Amazon. And I
also think the spending votes very very well for the
supply chain names for example, like the NVIDIAs and the
AMDs of the world, because they are the arms.
Speaker 1 (10:35):
Providers for this AI race.
Speaker 9 (10:37):
So I think the journal was positive for the entire
AI ecosystem.
Speaker 4 (10:41):
Daniel, I'm interested in that thesis. You said it was
the most bullish call from Andy Jesse and Brian Azowski
you've heard in some time. Was it light on details though?
I mean, think about what you just said. The one
thing we didn't hear is any sort of tangible number
for CAPEX other than Brian saying will be meaningfully higher
in twenty two money full, right.
Speaker 9 (11:02):
I think that's a great question, and I don't think
they wanted to pigeon and pole themselves with just specifically
quantifying it. The fact that they used overwhelming or significant
I think that gave them room to kind of fall
down later on. At the end of the day, they
know that there's a massive opportunity, They're okay to spend
aggressively to take advantage of that. One thing that I
think that could be different this time is back in
(11:26):
previous investment cycles, they didn't have as much profitability as
they do now. Amazon has multiple mature businesses, right, It's
not just retail. They have retail, they have AWS now,
they have advertising, they have logistics, they have all these
other profitable businesses that I hope or think that could
blunt the impact of profitability.
Speaker 1 (11:45):
And also too.
Speaker 9 (11:46):
On the call, they reiterated over and over again that
they think they can do both. They think they can
be efficient and they think they can drive growth at
the same time. Let's see if they can thread the needle.
But like I said earlier, I wouldn't bet against these guys.
Speaker 4 (12:00):
If AWS is the cash cow and the bright spot
for everyone, what's the next best thing in the multifaceted business.
Speaker 1 (12:07):
Daniel, that's a great question. I really don't know.
Speaker 9 (12:11):
I think it's AWS for now. One area that was
weaker last night in terms of guidance, I don't even
think really matters. They said that the European consumer was lackluster,
which her top line.
Speaker 1 (12:22):
I don't really talk.
Speaker 9 (12:23):
To any investors that are concerned much about their European
consumer business. So again, I think the focus is on AWS,
but going a little deeper, the operating profit for their
retail business was tremendous, Like this was their bread and
butter ten years ago, and it's like they're growing past
that now. And to AWS, I think it's just to
your dispenser's point earlier, it's just going to continue to
(12:44):
drive the bottom line and the entire ecosystem is just
going to get better.
Speaker 5 (12:48):
And meanwhile, they're not particularly articulating CAPEX when it comes
to the amount of spending.
Speaker 3 (12:53):
But what we can glean from Microsoft.
Speaker 5 (12:55):
From Amazon, from IBM, from anyone that's providing some sort
of cloud offering is that they spending in this spending big.
What do we therefore worry about or be optimistic about
when it comes to video that's coming or the other
big chip names that need this sort of exuberance to
suspend the market cap that we've continued to see.
Speaker 1 (13:14):
You know, that's a great question.
Speaker 9 (13:16):
We kind of say that it's the trillion dollar question,
right is how many more quarters are these AI spenders
going to get the hall pass from investors and tell hey,
show me the money, show me the ROI. You spend
tens of billions of dollars on this AI buildout, When
are we going to get paid back?
Speaker 1 (13:30):
The jury is still out right, we.
Speaker 9 (13:31):
Don't know exactly what's going to happen Jess yet. How
last night Andy Jesse did say a few times that
they're already seeing billions of dollars of AI related revenue
on AWS, so I don't even want to say it's
brings shoots, but already making a good.
Speaker 1 (13:46):
Headway in that segment.
Speaker 9 (13:48):
And if you remember last week we had amazing az
your numbers, is Microsoft ajurre actually accelerated year over year
on a big number.
Speaker 1 (13:55):
Google Cloud obviously continues to do well.
Speaker 9 (13:57):
So we've now heard from three of the major cloud
providers through the world's biggest hyperscalers come back with really
tremendous results. It's just it gets me pretty biled up
on space.
Speaker 5 (14:07):
Daniel Reagan, thank you for being built up with us,
Managing director and Global Equities over at Azooho America's great
to have some time with you.
Speaker 6 (14:22):
Here's some news time for talking.
Speaker 4 (14:23):
Tech Binance founder Changpeng Jow was ordered to spend four
months in prison for failures that allowed cyber criminals and
terrorist groups to freely trade on the world's largest cryptocurrency exchange.
Speaker 6 (14:35):
The sentence was far below.
Speaker 4 (14:36):
The three years requested by prosecutors who had sought to
make an example out of Joo to a heavily scrutinized
industry which is rebounding frankly from a slew of high
profile scandals. Plus, Paramount Global agreed to extend contract renewal
talks with Charter Communications, the owner of CBS and MTV,
is said to have extended talks with Charter, one of
(14:58):
the largest cable TV providers, the head of last night's
deadline preventing its channels from going dark on the cable service,
and Tesla's pivotal partnership with Buydo in China may amount
to a u turn of sorts for Elon Musk, the
Tesla CEO has long claimed his company can offer self
driving without HD maps, but in order to go to
(15:19):
market with FSD in China, he had no choice but
to join with a local partner for a mapping license,
which was by.
Speaker 6 (15:25):
Do carroc Oh.
Speaker 5 (15:26):
Boy, let's stick with Tesla because there is so much
news which ed you and team have been breaking. The
company actually eliminating almost its entire supercharger organization, which is built,
you know, a vast network of public charging stations that
basically every major automaker is in the process of trying
to tap into in the United States. We've then had
breaking news that well, the head of HR is now
(15:47):
stepping down me most Crowdrudell is with us and Craig.
Let's just start on the supercharger element of this, because
this has got a lot of well the auto industry worried.
Speaker 3 (15:57):
I'm not sure of course whether internally at Tesla they're
warned too.
Speaker 10 (16:01):
I think it's incredible in part because to Tesla's credit,
this was a fantastic business that they built over more
than a decade. I think, you know, you can sort
of quibble with, you know, some of the promises made
and promises not necessarily kept that Musk has offered over
the years. But what this company has done is built
a really solid and extensive, fast, reliable charging network. And
(16:25):
you hear that, you know, from Tesla customers all over
the place, you know, when they talk about why they
love their car so much. This is one of the
sort of main you know, positives that that is often
pointed to is that you know, when you're in need
of a top up, Tesla has, you know, the charging
network to support you. And so for them to you know,
make this sudden decision to get rid of, as you know,
(16:49):
roughly five hundred people, including the head of this business,
who they just put forward in front of investors a
little over a year ago, as you know, an example
of the deep bench they have behind me as really
is leading to a lot of people scratching their heads.
Speaker 4 (17:04):
Craig, I want to bring you some breaking news that's
happened since you've set in the chair. What I'm hearing
and what I've reported just now with Donna Hole Bloomberg's
DNA Howe, is that Tesla's most senior HR executive, the
senior director, Ali Araballo, has actually left the company. My
suspicion issue was fired, but this is another example of
(17:29):
a high profile exec departure alongside a really big wave
of layoffs.
Speaker 6 (17:34):
So I know that you're aware of this story, just
give us your reaction.
Speaker 10 (17:38):
I think it's it is very interesting that this makes it,
you know, two and two days of major you know,
departures of senior women within this organization. I think it's
a company that you know, for the most part, when
you do tune into these events that Tesla puts on,
it is very much male dominated. And I mentioned that
(17:58):
Investor Day in March of last year, there were sixteen
executives who were trotted out along with Elon Musk. Only
two of those executives were women. I also just think that,
you know, this latest sort of drumbeat of news just
really sort of speaks to this idea of you know,
as you reported ed just last week, of chaos, right,
(18:21):
it really seems like a chaotic moment for this company
where you know, they're trying to sort of fix problems
that they don't have and not addressing problems that they
do have.
Speaker 4 (18:33):
And there are many out there that would know Elon Musk,
to their mind, knows what he's doing and that the
testa will come through the other side. All we can
do is report what's happening inside Bloomberg's created ol. Thank
you very much. Now coming out, Microsoft reveals it invested
in open Ai and it fears of falling behind Google
in the race for AI dominance. We're bringing that Bloomberg
reporting next.
Speaker 6 (18:52):
Stick with us. This is Bloomberg Technology.
Speaker 4 (19:11):
Microsoft's motivation for investing heavily and partnering with open Ai
came from a sense of falling badly behind Google. That's
according to an internal email released them in the Justice
Department's antitrust case against the search giant.
Speaker 6 (19:25):
Joining us as Bloombergs.
Speaker 4 (19:26):
Mike Shephard out of DC leads the coverage of politics
and tech. I love these investigations because I love the
paper trail, and this was a pretty juicy one to
get some details on.
Speaker 11 (19:37):
Yes, this really was, and it provides yet another window,
actually specifically into the battle between the biggest tech companies
over artificial intelligence. This is such an important and emerging
area for them, and such a potentially lucrative one too.
We saw it show up in the earnings reports that
tumbled in last week. Cloud revenue was up for Microsoft
(20:01):
and Google in part on AI services and that helped
their shares, So this is an area where they want
to maintain and edge an advantage. However, it's also an
area of focus for regulators and prosecutors here. It did
happen to be mentioned in this antitrust case against Google,
and this is where the Microsoft internal email emerged.
Speaker 5 (20:22):
And interestingly that it was news organizations that really pushed
for this document in its reductive form to be published. Mike,
we now have Thursday Friday upon us. They're going to
be the closing remarks right of this overall DOJ case
against alphabet Yes.
Speaker 1 (20:38):
That's right, Carolina.
Speaker 11 (20:40):
My colleague Leah Nylam will be covering that very closely
to see how this is going to end up. We
won't have a ruling right away in the case, probably
not until the summertime here, but this is one that
we're watching very closely because it is part of a
series of moves by the FTC and the Justice Department,
(21:01):
which is handling this case against the largest tech companies,
questioning whether they are engaging in anti competitive practices, and
they're looking at them on a series of fronts. When
it comes to artificial intelligence specifically, they're concerned that they're
trying to hoover up or get involved with, or lock
in relationships with these startups like open Ai, like deep
(21:22):
Mind in a way that preserves their market dominance. And
they're also worried about these interlocking directorships too among these
AI startups as well.
Speaker 5 (21:31):
UK CMA Key and I to Mike Shepard just so
on the nose when it comes to Washington, we thank
you so much.
Speaker 4 (21:45):
Welcome back to Bloomberg Technology, Ed Lovelow here in San Francisco,
Alan Hid.
Speaker 3 (21:49):
In New York. And let's just quick check on these
markets because it's.
Speaker 5 (21:52):
A macro day, it's a FED day, and we are
therefore perhaps a little bit of cautious trading ahead of
that all important two pm then two thirty pm press
conference FED chair.
Speaker 3 (22:00):
Power're looking at the NASA currently down some six.
Speaker 5 (22:02):
Tenths of a percent now, and in large part is
the chips that continue to fall. We'll dig into moment
why I'm looking at a ten year yield that actually
catches a bid.
Speaker 3 (22:10):
That's as the US Treasury.
Speaker 5 (22:11):
Says, Look, we're not going to be increasing the pace
of our auctions in the following quarters. So we're seeing
supply side playing to that. We're down some two basis points.
Even though we are still looking at the FED, I'm
looking at what's happening on bitcoin. Look, some of this anxiety,
some of this risk coming off the table, some of
the ETF slowing in terms of their inflows. It's just
pulling us down by almost five percent. We're below that
(22:31):
six well now below fifty seven thousand dollars mark when
it comes to bitcoin.
Speaker 3 (22:36):
Move on some of the individual movers.
Speaker 5 (22:37):
Now, I talked and I pushed ahead to the fact
that the chip stocks are really underwater today. Why AMD. Look,
we did see that tepid forecast. The market wanted to
see more when it comes to the MI three hundreds
in terms of their AI focus, and well, it's hitting
across some of the other big chip names. So we're
off by almost nine percent, let's call it on AMD.
I'm looking at Amazon, though, managing to post what is
(22:58):
strongest quarter for adlars growth that we've seen in several years,
or at least in a year. We're seeing twenty five
billion dollars being brought in. We're seeing overall still the
growth of one point seven percent, managing to be a
relief when it comes to Amazon and strong AI focus
multi billion dollar revenue run rate, and then we have Pinterest.
We're up twenty one percent on the day. Ed, this
is the best day since October twenty twenty for this
(23:20):
social media name, and we've finally got back to this
revenue run rate in excess of twenty percent growth. We're
seeing focus on gen Z. We're seeing a focus on shoppability.
We're seeing a management managing to build momentum, so say
the analysts, and we're going to be digging into it
in a moment.
Speaker 6 (23:34):
I mean that is a big move.
Speaker 4 (23:36):
I did not have Pinterest on my earnings BINGO cards.
So let's dive deeper into Pinterest and those first quarter
sales user growth with Pinterest. CEO Bill ready a bill,
terrific to have you on the program.
Speaker 6 (23:48):
The story seems quite clear.
Speaker 4 (23:50):
Pinterest pushing into shopping and Pinterest focusing on gen Z users.
Speaker 6 (23:55):
Right.
Speaker 4 (23:55):
My question to start what is the relationship in the
activity between the shopping and the gen Z uses.
Speaker 12 (24:03):
Yeah, so you know we're finding our best product market
fit in years. We've hit an all time high with
users more than half a billion users and as you noted,
gen Z is our largest demographic. It's now more than
forty percent of our platform, and it's our fastest growing
demographic as well. And at the core that growth with
gen Z has been the rising actionability in the platform.
(24:25):
Pinterest is where gen Z goes to shop, and as
we've made Pinterest more actionable, so the people who can
get to more of the things they're finding on Pinterest.
We're seeing that work really well for users, where we've
accelerated user growth for seven straight quarters now. But it's
also cutting through for advertisers, where as you noted revenue
grow twenty three percent this quarter, nearly doubling our revenue
(24:47):
growth rate from last quarter. And so we're really seeing
this be quite synergistic between users finding the things that
they love on Pinterest and then advertisers finding this is
a great place for them to meet users that are
in market looking to shop and buy.
Speaker 5 (24:59):
And that's just some of the synergies that you've managed
to bring to bear with Amazon, with Google, with.
Speaker 3 (25:04):
Those ad partnerships.
Speaker 5 (25:05):
Bill, how much of that advertising optic is thanks to
these third parties.
Speaker 12 (25:10):
Well, you know, on the shop ability front, you know,
historically Pintress has solved digital window shopping. It was hard
to get to the things that you found on Pinterest.
We have opened the stores, and in doing that, we're
seeing that retailers broadly are finding great performance on Pinterest.
At the core of our revenue acceleration has been our
strength in low funnel actionability users that are clicking and buying.
(25:34):
We more than double the number of clicks we sent
to advertisers in Q four, and we did it again
in Q one. That is broad based, but we are
seeing our best strength with the largest, most sophisticated retailers
that provide really.
Speaker 1 (25:47):
Great buying experiences.
Speaker 12 (25:48):
We're quite pleased with that, and we also see that
the third party demand that we've brought onto the platform
is doing exactly what it was intended to do, which
is rounding out gaps in our auction and bringing more great, shoppable,
biable content onto Pinterest so that when users find what
they're looking for on Pinterest, they can easily click and
buy it.
Speaker 4 (26:08):
This was a milestone quarter in the sense that global
monthly uses past half a billion for the first time.
You've put a lot of emphasis on gen z So
look forward, what is the arc of user growth and
what drives it, what brings in you users to your platform?
Speaker 12 (26:25):
Bill Yeah, so you know, as I mentioned, this is
our seventh consecutive core of accelerating user growth. We've accelerated
in every geography and with every generation that we track.
Gen zs are fastest growing in our largest but you
have millennials right behind that. So our improvement in the
product has been broad based, and it is that actionability
at the core. But I would say we are just
(26:46):
getting going with that. We see much more building momentum
in that as we look forward, and it's both the
actionability as well as the positivity that.
Speaker 1 (26:55):
We're bringing into it.
Speaker 12 (26:56):
We've made tremendous strides with AI, and AI is bringing
more relevant recommendations for users so they can take action
on more of what they find. But it's also the
case that we're tuning AI for positivity. We're tuning it
to help users feel better not just in finding what
they're looking to shop and buy, but in making sure
that we're bringing inspirational content to them. So we've done
(27:18):
things like inclusive AI, where we have skin tone filters
so people can filter for things that will reflect them
and including diversity by default in our feeds. We introduce
body type AI where people can select body types so
that they can find more things that fit well for them,
and so we want to make it so that every
(27:38):
person on Pinterest can see themselves on Pinterest. And so
that's really leading to great strides.
Speaker 1 (27:45):
In both the.
Speaker 12 (27:48):
Relevance, the representation, and just people feeling positive when they
spend time on Pinterest.
Speaker 4 (27:54):
So last night on the Amazon Media called, Brian Osowski
was asked about Tmu and she in the context of
competition with you guys at pinterest a little bit different,
would you talk about Timu and Shean as potential partners?
Are you seeing any uplift from Chinese advertisers?
Speaker 12 (28:13):
So apac cross border has been a contributor to our growth,
but it's a nice contributor. You know, it's not overwhelming,
but it's a nice contributor. But as I mentioned before,
our strength and retail has been broad based. Retailers of
all sizes are finding strength on Pinterest, and it's because
they're seeing that doubling of clicks that we sent to
(28:33):
advertisers a year on year in Q four and again
in Q one. And it's also because they're able to
meet hard to find shoppers like gen Z on Pinterest,
and they're meeting those shoppers in a really unique moment
because users come to Pinterest when they have clear intent.
More than half the users on the platform, we're here
to shop, but they haven't yet decided what to buy,
so they're not necessarily searching for a specific brand or
(28:56):
a specific item where maybe the decisions already made. They're
coming here with much more general thoughts like cool outfits
for spring, what to wear to Coachella, and those are
great moments for advertisers to meet users because the user
has clear intent but hasn't decided yet what to buy.
And again we're seeing that broad based across retailers. China
cross border is a contributor, but it's broad based strength
(29:17):
for retailers.
Speaker 5 (29:18):
Focusing a little bit more on China for a moment, Bill,
I mean, this is a unique time in social media
more broadly, because it looks as though one of a
key social media player might be falling away.
Speaker 3 (29:29):
Do you think more gen Z will come to.
Speaker 5 (29:30):
You because of TikTok potentially being banned completely no longer
existing in the US.
Speaker 12 (29:36):
Well, when you look at why we are doing so
well with gen Z, it is because we are doing
something very different than the rest of social media. For
gen Z, most of social media has the user in
a lean back entertainment mode. We have the user in
a lean forward mode with intent and purpose. And I
mentioned tuning for positivity. You know, gen Z sees Pinterest
(29:57):
as an oasis away from the toxicity they experience on
much of the rest of social media. They know that
social media has largely become comparative and performative. And if
you go talk to gen Z about why they spend
time on Pinterest, they'll say they go to other places
on social media and see what others want them to be,
what others expect them to be, and then go to
Pinterest to discover what they want to be and invest
(30:19):
in themselves with a small circle of friends. So that's
already winning with gen Z. And we're not sitting around
hoping for the demise of other platforms. We're just busy
building something that makes people feel more positive, is going
to give them a great experience, and that's winning, particularly
of gen Z.
Speaker 5 (30:35):
Okay, so no clear ambition to capitalize in the uncertainty,
but clearly seeing the flow of gen Z. What really
always interests me, Bill is when you break down your
numbers in terms of average users and where they are
you're so dominant in the rest of the world, do
you see US as the area of growth do you
see internationally more the area of growth.
Speaker 3 (30:54):
Where do you see the expansion?
Speaker 12 (30:57):
So that's a great question. As you noted, we have
approximately eighty percent of our eighty percent or more of
our use outside the US, but only approximately twenty percent
of our revenue outside the US. So the improvements we've
made from the user perspective have been broad based. As
I mentioned, we've accelerated users across every geography. On the
modernization side, we are much further along in the US,
(31:20):
and we are now starting to deploy those things internationally,
and so we see international as a huge growth vector
for us, both in terms of what we will bring
to advertisers directly where we do first party selling, as
well as where we're bringing in new sources of demand,
either through third party demand like what we're doing with
our Google partnership in international markets or what we're now
(31:40):
doing with resellers in international markets where they can bring
more local demand, which is going to be great for
those advertisers, but also great for users that will find
more shoppable content as more of those advertisers those international
markets come onto our platform.
Speaker 5 (31:54):
Bill, great to catch up with you thanks to spending
some time with USKS. Very money Pindras CEO Bill ready there.
Meanwhile coming up that we're going to be joined by
Renegade Partners co founder Rosanne Winsec about the.
Speaker 3 (32:05):
Firm's new fun They raise a lot where they're spending it.
Speaker 5 (32:09):
There's a rumot technology, so Pallenteer CEO Alex cart Sequoia's
(32:29):
leader that of Boda venture capitalist Vinod Kozla, that among
the Silicon Valley heavyweights, you're traveling to Washington this week
for a summit on the role of AI and escalating
competition between.
Speaker 3 (32:40):
The US and China.
Speaker 5 (32:41):
Now the Hill and the Valley Forum, as it's called,
is sponsored by a group of vcs including Peter tielback
to Founders Fund that seems to be the second iteration
head and still gets.
Speaker 4 (32:50):
I've got some deja vu. I'm pretty sure we've done
that one before. Let's stick in the world of private
markets and vents capital. Renegade Partners, an early stage venture firm,
just announced the close of it's fun Too with one
hundred and twenty eight million dollars, bringing the total assets
under management to two hundred and twenty eight million dollars.
It's like to say, we're joined by Renegade Partners co
founder and managing director Razan win Sec.
Speaker 6 (33:12):
Welcome. You are going to.
Speaker 4 (33:14):
Invest in what you're calling durable technology companies. What is
a durable technology company?
Speaker 6 (33:20):
Hied?
Speaker 13 (33:20):
Thank you so much for having me. So when we
think about what is a durable company, we're actually looking at,
you know, what are markets that actually really matter here?
What are markets that are large and still relatively untouched
by technology that can support really large outcomes? You know,
I think over the past few years, we've seen a
lot of you know, software selling to software software selling
to startups, and those companies have frankly like evaporated in
(33:43):
this market turn And so one thing that we thought
about a lot in our fund one, and we're thinking
even more about in Fund two. Or what are those
markets that actually really drive like meaningful parts of GDP
and can actually move beyond you know, trends in venture
capital and become lasting companies.
Speaker 6 (33:57):
So what is the secret source?
Speaker 4 (33:59):
So speak like, how is it that your position to
identify a company that fits that profile? And you can
go to your LPs and say, we're pretty confident that
this fits the thesis.
Speaker 13 (34:09):
Yeah, you know, so we're generalists. We're very like sector agnostic,
stage specific, but we like to kind of look at
the market very broadly. So for instance, in our find one,
we have companies like Aerospace Intelligence that sells into aerospace
and defense, COPA Automation selling into PLC right into factories.
So thinking about you know, on shoring and digital transformation.
(34:30):
There companies like Auxiliar selling into biotech FP and A
a great way to get beta access to the beta
of that market without actually investing in a molecular a therapeutic.
Speaker 3 (34:41):
So we really try to.
Speaker 13 (34:42):
Think kind of big tops down and look for great
companies that are going after big problems in those faces.
Speaker 5 (34:48):
Relatively competitive still in the earliest stages of VC. What
do you do that makes you stand out? Rozan, how
do you manage to be supporting some of these founders
which increasingly to to us about bun out about worries
about mental health issues.
Speaker 13 (35:04):
I know it is, Caroline, You're completely right, Like it
is still very competitive there, even though the market feels
softer than it did a couple of years ago. I mean,
as we think about Renegade and like what we can offer,
I always think about like, you know, you can't beat
somebody else at their own games, So how do you
play a game that they can't play? Right Like, we
like to focus ourselves on being like a very bespoke
boutique firm where founders get to work directly with the
(35:25):
founders themselves. Right Like, if you are a founder led
business and you're sitting on your board, you don't want
an employee sitting next to you, you want another founder sitting
next to you.
Speaker 1 (35:33):
Uh.
Speaker 13 (35:33):
We have really great alignment that way, right Like, we
don't have a story about job security or you know
around partnership dynamics because we all in the firm as well.
We only make twenty investments per fund. That means, you know,
only six or seven deals per year, and so we're
really spending a lot of time with each and every
company and you know, helping them where they need help
and getting out of the way where they don't. We
also have a great operating practice where we focus on
(35:55):
you know, people and team. It's led by our incredible
operating partner, a woman named Susan Albyn and and she
really helps our companies think about team organs, team organ design, structure, compensation,
building the hiring and firing machine. And often those are
the things that are keeping early stage CEOs up at
night because we kind of assume that they know how
to build and run a team when often this is
(36:15):
their first time.
Speaker 3 (36:16):
Yeah, we assume that they can be leaders and they
get go.
Speaker 5 (36:19):
I'm interested those as to how you're helping those leaders
and others within those startups to be able to pivot
if they on an AI first business right now?
Speaker 13 (36:28):
Yeah, I mean I think, you know, I think there's
a blessing and a curse today today you're being an
AI first business. We've seen a lot of companies that
are just frankly a thin wrapper on type of open
AI and those businesses are not defensible, you know, I
think really first and foremost, like you have to be
thinking about what is actually driving value for your customer,
what's actually driving OURI, what they're actually going to pay
for after like you know, the AI innovation budgets dry up,
(36:52):
and so frankly, you know, every company is going to
be an AI company. It's just like every company today
is a cloud company. We don't invest in companies because
theyre cloud companies. Every company is a cloud company. AI
is going to be the same way, right, So what
are those products and services that AI can actually supercharge,
that can do you know, different things than just a
great SaaS business that's putting.
Speaker 3 (37:10):
AI into their product.
Speaker 4 (37:11):
You heard the story reported at the top of the segment. Yeah,
some of your industry colleagues Pizza Teel then d Coosa
going to d C. Do you think it's the job
of vcs to do that?
Speaker 13 (37:20):
You know, I think it's important that are like the
Silicon Valley is well represented on the Hill because frankly,
what happens here has a massive impact in the US
and in the world, you know, the world in total,
and you know, I do think there is a role
for it. You know, we have to remember like incentives
drive behavior, so you have to think about what is
everyone's incentive as you know, regardless of what they're doing.
(37:43):
But I think it's important that we're thinking about AI,
you know, at the cutting edge at the federal level.
Speaker 4 (37:49):
Renegay Partners co founder managing director as Sam Winset.
Speaker 6 (37:52):
Great to have you on the program. Thank you.
Speaker 5 (38:01):
It's the latest episode of The Circuit and Bloomberg Originals
hosts and executive producer em Andy Chang. She sat down
with the GM CEO Mary Burrow to discuss well why
she's continuing to bet.
Speaker 3 (38:11):
Big on electric vehicles and autonomous driving particulous.
Speaker 14 (38:17):
We're still as an industry, we're in the early days.
I think what we're still seeing is battery, battery chemistry,
battery technology is still expensive, and because the vehicle's already
a very expensive purchase for consumers, you know, it's getting
continuing to get costs down while we continue to improve
the technology. It almost feels like hype is slowing down.
(38:38):
Do you feel like you're battling that like a sentiment?
You know shift as well. I think it was overhyped
and now it's probably under hyped and the truth is
somewhere in the middle. But you know, again, yes growth
has slowed, but it's still growing. You scaled back some
other EV targets, mainly because of the battery manufacturing issues,
Like why is that still such a challenge. We were
(39:01):
making something new and I grew up in manufacturing, so
I feel like we do have a lot of manufacturing expertise,
but I think we took for granted some of the
newer processes and we will not do that again.
Speaker 12 (39:11):
Yeah.
Speaker 14 (39:12):
Elon Musk has mocked traditional automakers for how long it
took come to get into Eb's Was he right about that?
You know, if I had a do over, I would
have even though we were moving, I would have accelerated
the pace. You know, Hindsight's twenty twenty Tesla stock is
up more than thirteen hundred percent in the last ten years.
GM is up like twelve thirteen percent. You have met
(39:33):
or beat expectations thirty five out of last thirty six quarters.
So when you look at the stock, does it ever
piss you off?
Speaker 3 (39:41):
Yeah?
Speaker 14 (39:42):
It does, I mean because I but but again, I
can get mad about it, and I can be upset
and up frustrated, and believe me, I have those moments.
You know, at the end, it's our responsibility. You can't
go home and have a pity party.
Speaker 4 (39:53):
Watch The Circuit with Emily Chang tonight at six pm
easton in New York on Bloomberg Television, or stream at
eight pm E.
Speaker 6 (40:00):
On Bloomberg Originals. Let's stick with.
Speaker 4 (40:02):
GM, The company's eyeing billions in digital revenues with an
alternative to Apple's car Play, which has become the default
home screen of the center console and vehicles ranging from
Ford's to Ferrari's GM's platform called Altifi was rolled out,
but not without a few hiccups. Joining us now is
the author of that terrific deep dive Bloomberg's Dave as well,
(40:23):
which out of Detroit. You paint the picture of Michael
Wardrum who's picked up this beautiful sixty two thousand dollars
Chevy Blazer EV. He's so proud of it, and he
sits in the cockpit, in the driver's seat, no Apple
car play, And therein lies the strategy from GM.
Speaker 2 (40:41):
That's right. They want to pull people into their cars.
And actually, I've driven the Blazer Rev. It is quite
a good vehicle. Waldron's assessment is right. But they're making
this gamble that people will like the cars get in,
and that they can overcome this consumer inertia and just
pull people away from CarPlay, and they're better Bely, this
CarPlay will project what your phone does, which is music, messaging, podcasts,
(41:05):
that sort of thing. But they can do so much
more with their own internal system. I like how the
head software guy in an interview with me put it
from Rivian said, we don't want our infotainment system in
a arriva and to be the same thing that's in
every rental car, and GM is taking the same approach
with this, but that still means you have to execute
a better system than Apple has, and so far GM's
(41:27):
had a tough time with that. The new system since
they brought it back, has had no issues since they
started selling it again in March, but it was a
very rough start for them. And even after that, if
they can build it well, if they can keep the
software from being buggy, they're still going to have to
get consumers to decide that they don't need CarPlay, and
that can be a tough marketing challenge.
Speaker 5 (41:47):
Tough marketing challenge, but a lot to be rewarded for
when it comes to digital revenue in the future. We
can see why they're trying to tussele it out with Apple.
David Welch, it's a great deep dive. Please go read it.
GMI billions in digital revenue with CarPlay alternative.
Speaker 3 (42:03):
Meanwhile, look, that does it for this edition of Bloomberg Technology.
Speaker 5 (42:06):
We've had CEO conversations, we've deep dived into the earnings,
and there's.
Speaker 4 (42:09):
More to come in Yeah, and you forget that we
have more CEOs coming up twenty four hours time in
the show cloudcom reports tonight, then you've got Apple Thursday.
There is so much more still to come recap.
Speaker 6 (42:21):
This show, though, is a good one.
Speaker 4 (42:22):
On the podcast, Apple, Spotify, and iHeart and of course
the pod goes onto all the Bloomberg platforms as well.
Thanks everyone for tuning in from San Francisco and New
York City.
Speaker 6 (42:31):
This is Bloomberg Technology.
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