February 14, 2025 • 40 mins
Bloomberg's Jackie Davalos and Tim Stenovec discuss JD Vance's speech at the Munich Security Conference saying Europe is undermining democratic values. And, a conversation with Databricks CEO Ali Ghodsi as the company partners with SAP. Plus, the undocumented workers that helped build a part of Elon Musk's companies.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news from the heart of
where innovation, money and power collide in Silicon Valley and beyond.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2 (00:34):
Live from New York.
Speaker 3 (00:35):
I'm Tim Stenoveek and I'm Jackie Devalas in San Francisco.
This is Bloomberg Technology Now coming up. US President jd
Vance blasts Europe, accusing the region's leaders of undermining democratic
values and taking aim at the blocks attempt to regulate
hate speech and misinformation in media online. Plus, we are
joined by the CEO of Data bricks on the company's
(00:58):
AI focused partnership with SAP and a look at Elon
Musk's empire and how some of his companies hired undocumented
workers to build factories. Let's also take a look at
those shares of Meta they're up on the day and
this as the company is pushing into augmented reality NAI
and has identified its next big bet, AI powered humanoid robots.
(01:21):
Let's get more on this with Bloomberg's Mark.
Speaker 4 (01:22):
German, who joins us now.
Speaker 3 (01:24):
Mark, humanoid robots sound like something out of a sci
fi movie. What is Meta's vision for this venture? Here
and how much are they spending to do it?
Speaker 5 (01:34):
So Meta wants to own this still nascent humanoid market. Right,
These are home robots that can do chores for you,
maybe fold laundry, carry a glass of water, bring something
for you up the stairs. You've seen Tesla get into
this game with optimists, We've seen Boston Dynamics with Spot.
Other companies like Apple and Google Deep Mind or making
investments here. But Meta wants to be the android or
(01:55):
qualcom of the humanoid industry, empower the underpinnings, the software,
the hardware, the artificial intelligence, the sensor stacked the compute
for the whole industry. So they're talking to several partners,
including Unitry. They're talking to a company called Figure Ai,
and they want to power this. And today they're starting
up a new division run by the former CEO of
(02:16):
GM's Crews, Mark Whitten. They're going to hire about one
hundred people for their robotics field and their plan is
to try to own this market and eventually maybe even
make a humanoid robot of their own.
Speaker 2 (02:27):
Mark is the idea here that they make money on
the hardware, the software. At the end of the day,
how is this a company How does this help the
company make more money selling US ads?
Speaker 5 (02:40):
I mean, Meta is investing billions of dollars in artificial
intelligence and augmented reality, and those are two core technologies
that are also useful in humanoid robots. Right, this technology
could be applied to humanoids. They're spending sixty five billion
dollar on R and D investments across twenty twenty five,
so a portion of that will now go to humanoid robots.
And how they can make money from this one day
(03:02):
obviously is selling it to consumers, but sooner they can
make money on becoming the platform right and licensing their
technology parts of it open source to third party partners.
Speaker 6 (03:12):
Right.
Speaker 5 (03:12):
Meta believes that the hardware stacks are pretty well done
right now by the third party humanoid manufacturers.
Speaker 7 (03:18):
Right.
Speaker 5 (03:18):
Where they see a step down is in the AI
and the software, and they believe with Loma they can.
Speaker 7 (03:24):
Fill that gap.
Speaker 4 (03:26):
Mark.
Speaker 3 (03:26):
What has the company learned from its reality labs, prior
ventures and headsets for example? What does it plan to
do differently this time around with humanoid robots?
Speaker 5 (03:36):
Well, I don't think they're going to do much differently
right other than I think they're starting to hire a
little bit more slowly than they have with the augmented
reality metaverse push.
Speaker 8 (03:45):
Right.
Speaker 5 (03:45):
So they're hiring about one hundred people this year, right,
That seems like small potatoes compared to the number of
people they hired at the height of COVID, at the
height of building out the metaverse and mixed reality.
Speaker 7 (03:54):
Right.
Speaker 5 (03:54):
So they're going to go a little bit more slowly here,
maybe invest a little bit less money at the get go,
but I think their ambition is still the same.
Speaker 7 (04:01):
What is that, Moonshaw?
Speaker 5 (04:02):
What is that long term area that we can own
as a company.
Speaker 2 (04:06):
Bloomberg's Mark German and joining us out there in Los Angeles. Mark,
always good to see you. Congratulations on this scoop as
well well. Earlier today we heard from Vice President JD
Vance who spoke at the Munich Security Conference. Take a
listen to what he had to say.
Speaker 9 (04:19):
The threat that I worry the most about visa the
Europe is not Russia, it's not China, it's not any
other external actor.
Speaker 7 (04:27):
And what I worry about is.
Speaker 9 (04:29):
The threat from within the retreat of Europe from some
of its most fundamental values, values shared with the United
States of America.
Speaker 2 (04:39):
Van's called out Europe's regulation of big tech, saying it's
out of control and harming free speech. Van cited incidents
from Germany to Sweden to the UK of what might
be called woke policies as evidence of how Europe has
lost its way. Bloomberg's Mike Shepherd joins us now to
discuss Mike, how did this message? How did this speech
land with the audience in Munich?
Speaker 10 (05:00):
Well, it, Philip with flat because when you consider the
context of the Munich Security Conference, you have to think
about what's happened earlier this week we saw JD. Vance's boss,
President Donald Trump make this sudden outreach to Vladimir Putin
and Russia to try to negotiate an end to the
Ukraine War. And Ukraine really did not come up very
(05:21):
much in the speech at all from Vance, and overall
it was an elbows out address. He began his remarks
by saying basically that there is a new sheriff in town,
and he really tried to suggest that Europe need to
fall much more into line with his and Donald Trump's
brand of politics, especially when it comes to the tech
(05:42):
industry and regulation of online content and regulation of AI.
There's a thread between the remarks we heard today in
Munich and what he said earlier this week in Paris
where he addressed the artificial intelligence summit convened by French
President Manuel mccrom. The idea from Vance there was to
(06:03):
talk about overregulation of that sector too and say that
that is stifling innovation. But again he also brought up
this whole question of moderation and the risk of censorship
through artificial intelligence.
Speaker 3 (06:16):
Mike Vice President Vance also seemed to suggest that the
annulment of the Romanian election in December was somehow uncalled for,
despite that there was evidence of Russian interference.
Speaker 4 (06:28):
How did those commons land well?
Speaker 10 (06:30):
Again, this is another remark that he made during his appearance.
It really did not sit well with the audience, especially
the Romanian delegation. There's ample evidence that Russia had tried
to interfere with the results, which led to a far
right candidate pulling off a surprising victory. And the concern
(06:51):
about Russian interference with and tampering with domestic affairs of
its closest neighbors is a constant concerning that we have
heard from Baltic officials that we have interviewed. You know,
I've spoken with the foreign ministers of Lithuania and Latvia
in the past year, and this is something very much
(07:11):
at top of mind, and they recognize the risk of
these kinds of interference operations. And it is a sensitive
point for Vance and the Republican Party too because dating
back to twenty sixteen, we saw Donald Trump's election somehow
tied to a Russian interference operation here as well. So
this is something he is trying to diminish. And don't forget,
(07:34):
Jade Vance is not just aiming this speech at the
audience Erah Munich. He has an audience back here in
the US that he's trying to satisfy, and that is
his allies, Donald Trump's allies, and they are looking for
him to have this really strong approach towards Europe. And
even if the speech didn't land well in the room there,
it very likely landed well with allies here who want
(07:57):
to see JD. Vance take this forceful role in propelling
the maga politics of Donald Trump for the future.
Speaker 3 (08:05):
That's Bloomberg's Mike Shephard, appreciate you joining us. Shares of
Airbnb are surging today as the company posted an upbeat
forecast for the first three months of twenty twenty five,
citing continued strong demand following its holiday strength.
Speaker 4 (08:28):
Now for more, Bloomberg's Natalie Lung joins us.
Speaker 3 (08:30):
Now, Natalie, help us understand this because gigagonomy, peers, Lift
and Uber issued more muted forecasts. But what's driving Airbnb's
optimism here?
Speaker 6 (08:41):
Yeah, they had a very good fourth quarter during the
holiday season where US airline carriers as well as online
travel peer Expedia also talked about, you know, strong international
travel and in particular, airbnbsaw acceleration of growth in all
of the regions that's operating in, including the US, where
there was some slowing demand last year, but it seems
(09:03):
like it's really back in the later part of the year.
Speaker 5 (09:08):
Natalie.
Speaker 2 (09:08):
What's going on with the company's experience as part of
the business and the investment that they talked about happening there?
Speaker 6 (09:15):
Yeah, the company told us that they're going to be
spending two hundred million to a two hundred and fifty
million this year into new initiatives, including the relaunch of experiences.
The CEO talked a bit about how in the past
when they launched it, maybe havn't cross marketed products enough.
So let's say, when you're staying in staying in a
particular city that they don't push or promote their related
(09:38):
experience as much, and so the relaunch will be better
at that.
Speaker 2 (09:42):
All right, Bloomberg's Natalie Lung, thanks so much for joining
us on Airbnb surging. Let's bring in Tiffany Wade, senior
portfolio manager at Columbia Threadnil Investments. They've got about six
hundred and forty five billion dollars in assets under management. Tiffany,
I want to start with Palo Alto Networks and get
your thoughts there, because we're seeing shares on a little
more than four percent as we speak. The company did
(10:03):
report disappointing earnings outlook, but for To net and Checkpoint
posted strong results. What's going on with Palo Alto.
Speaker 11 (10:12):
I think across the cybersecurity space we are seeing pretty
strong trends. The last couple of quarters, we saw some
customer rationalization of spending. I think we're seeing that coming
to an end, and we're starting to see sales growth
pick up again. Palo Alto obviously down today, for the
most part, the metrics were pretty good that they reported
some of the key metrics that custo that investors look at,
(10:36):
recurring revenue was very strong in the quarter, and they
beat numbers for the most recent quarter that they provided. However,
free cash flow guidance looks like it's a little bit
second half loaded for the year, which I think is
disappointing some people. But I would say I think the
other important thing that we're positive on is that over
the last couple of quarters, Palo Alto was adopted a
(10:57):
platform approach to product sales, which seems to be resonating
with customers, and I think we saw more evidence of
that this quarter, and this helps customers consolidate spending, which
is a trend that we've seen for the last couple
of quarters. But I also think for the longer term,
the trend of increasing cyber threats is not slowing down,
and Palo Alto will play an important role in helping
their companies and their customers secure their data and also
(11:20):
their AI models, because we are seeing companies face traditional
security threats such as data breaches, but new threats driven
by AI, such as more sophisticated threats or enhanced security
threats that are designed to disrupt output for an AI model.
Speaker 3 (11:39):
Tiffany, let's stick with AI in particular, some of the
big tech giants that have made some pretty wide comments
about infrastructure, R and D talent investments. How discerning our
investors when it comes to this kind of spend. Do
they care where it's going, especially now off the news
that Meta is building a humanoid robot, which is surely
(12:01):
to take quite a bit of investment there.
Speaker 11 (12:05):
Yeah, I think investors are definitely keeping a very close
eye on the amount of spending that the large companies
like the hyperscalers are putting into AI, and over the
course of the next couple quarters, we're going to want
to see returns on those investments. For the cloud providers, specifically,
they're spending a significant amount of CAPEX in investing in
(12:26):
AI processing capacity. I think in order to stay ahead
of trends. Amazon's CEO Jeff Bezos said recently that he
thinks that we'll see a world where virtually every app
has generative AI in it, and they need to invest
to stay ahead of this. So the cloud providers are
offering a variety of AI models which are pre trained
for use cases, but they also help customers tune a
(12:49):
model or adapted to specific needs. And they're also offering
tools and services like secure data storage and data management
that make it easier for their customers to handle the
large data sets required for AI models.
Speaker 7 (13:02):
And I think that all.
Speaker 11 (13:03):
Of these services should see additional demand with faster adoption
of AI. And I think what we'll see is these
companies are becoming kind of the toll roads for AI,
where they're supplying the cloud, the tools some of the developers,
and the processing capacity that their customers need to enable
other companies to develop and deploy AI.
Speaker 3 (13:24):
We've also seen some comments coming from Washington that the
government plans to be more supportive when it comes to
investments in artificial intelligence. How much of that initial enthusiasm
from President Trump's Stargate venture being announced has worn off
by now?
Speaker 11 (13:40):
I think that that's probably the Stargate venture is a
flashy announcement, but I think it's more of the same
of what we're seeing. There was already a significant amount
of capital investment going into infrastructure spending. Formalizing announcements with
multiple companies investing is a great news story, and maybe
some of the spending, but I think a lot of
(14:01):
the spending was going to happen anyways over the next
three to four years and over the next decade.
Speaker 2 (14:06):
Are you not at all concerned about CAPEX spending from
the hyperscalers from any members of the mag seven being
too much? Are you overspending?
Speaker 11 (14:18):
I don't think they're overspending right now. A lot of
the spending from the mag seven companies is going to
their own use cases where they're actually seeing a return
on those investments in terms of better advertising models or
better offerings to customers. But a lot of the spending
is also going to support their customers who are trying
to develop AI tools that they're going to sell in
(14:41):
the future. So I don't think that the I wouldn't
call it overspending at this point. And I do think
that the adoption curve for AI is probably going to
pick up very significantly from here, as we do see
costs coming down very significantly, and that's going to fuel
more demand for the services that the cloud providers are
are providing.
Speaker 2 (15:00):
Well, speaking of costs coming down, the news that we
got from deep Seek a little over two weeks ago
or three weeks ago at this point, does that mean that,
indeed these companies have become more efficient when they're training ms,
for example, that they won't need all the CAPEX that's
been invested.
Speaker 11 (15:18):
That's definitely a concern in the market, and you saw
that in the Monday after the deep Seek R one
model announcement. I don't think that we're going to I
think what we're seeing is that the deep Seak announcement
was really highlighted the efficiency of model development already. So
costs for model development from the established US players like
(15:41):
open ai or Anthropic have been coming down almost as
quickly as we saw in the deep Seek model. So
I think it's really highlighted how efficient the models are becoming,
how fast the technology improvement is. And if we need
less processing power per computation or for inferencing instance, I
(16:03):
don't think that that leads to a lesser demand for
processing capacity. I think that means the adoption picks up faster.
Speaker 7 (16:11):
So if you think.
Speaker 11 (16:12):
About the adoption of cell phones, as they got cheaper,
more people bought them, you didn't end up needing to
make less cell phones.
Speaker 3 (16:21):
That's Tiffani Wade from Columbia Thread Needle Investments, thanks for
joining us.
Speaker 4 (16:26):
Coming up will be.
Speaker 3 (16:27):
Joined by the CEO of AI startup Times on their
big funding round. We're also watching shares of draft kings
this as the Boston based company reported fourth quarter earnings
that eat expectations. Also boosted its sales guidance for the
current year to at least six point three billion dollars,
in the sign that the company is overcoming concerns about
(16:48):
a tough market for sports betting operators. This is Bloomberg
(17:10):
on today's AI and Action. We're looking at AI software
startup times. After Goldman Sachs Growth Equity Union led at
one hundred and twenty five million dollar funding round for
the company at one point three billion one point one
to three billion dollar valuation. Let's bring in CEO Owen
Henshee Owen, Welcome to the Unicorn club. How does it
(17:31):
feel to finally reach this smilestone and how do you
plan to put this money.
Speaker 12 (17:35):
To use f person foremost, Jackie, thank you for having me.
Happy Valentine's Day. Yeah, it's a great question. We're really
proud and excited to have raised this capital. I think
where you'll see us invest is in the areas where
we've seen kind of outsized traction over the last eighteen months.
So as a startup, we've been around for about seven
years now. What it's really in the last kind of
(17:56):
eighteen months where we've experienced a lot of accelerated growth
as we brought these new AI capabilities to our customers.
And so we'll continue to invest in R and D.
We'll hire about one hundred people this year and that
will be all to support the growth and demand that
we're seeing. We're now doing about a billion automated actions
on behalf of our customers every single week, and we
(18:18):
expect that growth to accelerate if anything.
Speaker 2 (18:21):
Oh and as Jackie mentioned, one hundred and twenty five
million dollar funding round, it increases the valuation by eighty percent,
so certainly a big round when it comes to your company.
I'm trying to get an understanding for how difficult it
was to raise money in this environment. How long did
it take?
Speaker 7 (18:36):
Was it easy?
Speaker 2 (18:36):
Was it tough?
Speaker 12 (18:38):
I would say it's never easy, you know, raising capital,
regardless of the markets is never easy. I would say
that the reason we were able to raise this round,
and it's only nine months since our previous fundraise, was
just the success we've had in the market over the
last twelve months. And so as I say, and you know,
we've increased the number of automated actions, we're performing ten
(19:00):
in eighty months. We've grown our active users by about
two hundred and fifty percent in the last twelve months.
And so when you're kind of posting those numbers and
you're adding the level of value we are to our customers,
it tends to attract a lot of investor attention. And
so we find that our customers and the customer love
that we generate, that's really the reason we've been able
to raise at this kind of valuation.
Speaker 3 (19:21):
Oh and let's talk about some of those customers, because
a lot of European startups kind of get a bad
rap for not being kind of the big heavy hitters
that you see coming out of the US and Silicon Valley.
Where is your customer base coming from?
Speaker 7 (19:35):
Yeah, it's a great question.
Speaker 12 (19:36):
So although we're headquartered here in Dublin, we also have
offices in San Francisco, Boston, and in Australia, and so
we very much consider ourselves a global company. About seventy
five percent of our customers are in North America and Canada.
We've got about twenty five percent in Europe. But it's
across a variety of different segments, from commercial to enterprise,
to fed to strategic. I would say that the their
(20:00):
initial sweet spot for talents was in those high grow
software companies so coin based, data Break, Snowflake. But since
then we've expanded a lot into your kind of more
traditional industries confectionery like Mars, but also in fed and
strategic as well.
Speaker 3 (20:15):
We're expecting a much friendlier federal Trade Commission here in
the United States and something that might open up the
doors to more m and A. You operate in a
space that could potentially see some of that uptick. Have
you thought about how far you want to take this?
Do you see yourself as a public company or perhaps
sewing down the line.
Speaker 7 (20:34):
Yeah, it's a great question.
Speaker 12 (20:36):
I think what we love to do as a company,
honestly is build product that our customers love, make our
customers outrageously successful. And that's what we're going to be
focused on for the next kind of like short and
medium term. And I think if we do that, and
then I think we'll have optionality towards the outcome. But
right now, we're heads down focused on building a great product.
Speaker 2 (20:57):
Owen Henchy, time CEO, joining us from Bublin this afternoon.
Thank you so much for joining us. To appreciate it.
Welcome back to Bloomberg Technology. I'm Jim Stenoviek in.
Speaker 3 (21:14):
New York and I'm Jackie Devalis in San Francisco. SAP
and Data Bricks are launching a new product combining SAP's
business data with data Bricks AI platform for more. Ali Gotseed,
CEO of Data Bricks, joined us. Now, Ali, you're going
to invest two hundred and fifty million dollars. You say
you're expecting a billion dollars in revenue. Talk to us
(21:36):
about how this partnership is going to differentiate you from
what's already on the market.
Speaker 13 (21:43):
Yeah, so this is you know, we've only had one
partnership this big, and that was ten years ago with Microsoft.
So we think this is going to be game tending
for the industry. So when we talk to our customers,
we say, oh, we have an amazing platform.
Speaker 7 (21:55):
It's great. They always say, but what about the SAP data.
Speaker 13 (21:57):
Because SAP's data is the most important data in the world.
Speaker 7 (22:01):
It's what's powering all the leaders, all the.
Speaker 13 (22:03):
Financial systems of over ninety percent of fourteen five hundred,
and this data has sort of been locked away and
people can't access it.
Speaker 7 (22:10):
So what the partnership means is that anyone that goes
and now.
Speaker 13 (22:14):
Buys SAP data backs from SAP, will get all this
data accessible right there and they can start building a
genetic systems AI and so on. So that's why we
saw bullish on it, and that's why we earmarked the
quarter a billion dollars, as you said, from our ten
billion dollar fundraise that we just did.
Speaker 3 (22:31):
You know, another important partner of yours is Microsoft, and
it's increasingly becoming a competitor. It said that it's using
its products. It's fabric. It's going quickly. What's the pitch
to use data bricks rather than fabric.
Speaker 8 (22:46):
Yeah.
Speaker 13 (22:46):
Look, Microsoft's a great partner, but still remains a great partner.
They're actually investor in data bricks as well. So is
by the way, aws so is also a Google. But
there's competition. As you pointed out, they have sometimes their
own products. The great thing about SAP Data bricks is
that you have now all the SAP data in it
there and you won't find that in the other offerings,
So they don't the other offerings out there in the
market will not be there with all the business data
(23:09):
that SAP has, and it's been enriched with all the semantics.
Speaker 7 (23:12):
So what I mean by that is this is not
just data on the.
Speaker 13 (23:16):
Financial ledger of a company, it's also the travel system.
Speaker 7 (23:19):
Because SAP has.
Speaker 13 (23:21):
You know, a product called concur, they have success factors
for HR, they have a REVA for procurement. All this
data has been combined and enriched and it's just available
in spe Data bricks. But that's the big difference between
using SAP Data Bricks and using any other data platform
out there.
Speaker 2 (23:36):
Ali, there's been a huge conversation lately around inference cost
and I'm wondering, if you've seen inference costs go down,
what does it mean for data bricks.
Speaker 13 (23:47):
Yeah, inference cost has been going down all the time
in the last few years, and we have a whole
research team dedicated to just optimizing the software portion of that.
There's of course a hardware portion. We don't build hardware,
but the software portion is actually significant. Two we're seeing
you know, two and a half to three x boost
just in the software.
Speaker 7 (24:05):
What does it mean, Well, what it means is that
it's just much cheaper to.
Speaker 13 (24:09):
Build applications on top of AI. You know, it's kind
of crazy if you think about if you zoom out,
what it costs costs less than a dollar to produce
a million orbs. That's basically three books. You can get
the AI to produce three novel books for you for
less than a dollar, So that's what you know, cheaper
inference means and just just unlocks all these applications on
(24:31):
pop So that's what we're excited about.
Speaker 7 (24:33):
But for those applications, you need.
Speaker 13 (24:35):
Special data and that's all that's going to matter. And
the enterprises have all the special data. So the question
is how do you combine that data AI with that
special data that they have, and then of course with
the inference so that you can build these AI applications.
Speaker 2 (24:48):
Well, as we heard from Jackie, you recently closed this
fifteen billion dollar funding at popping sixty two billion dollar valuation.
Is that it for fundraising? Is that done?
Speaker 7 (25:00):
Ah?
Speaker 13 (25:00):
Never say never, you know, but it's a significant portant
that we've raised. Now, I think it's more important for
us to invest at wisely invested in AI talents, invested
in building AI systems, invested in goal to market, expanding
around the world, and we have significant business in Europe
and in Asia and Latin America, you know, so continuing
to expand. We're about eight thousand people we want to
(25:22):
grow very fast. We're still hiring, so that's more focused
on that.
Speaker 3 (25:26):
But never say never, Ali, We're seeing some reporting coming
out of our colleagues here on the venture capital team
that late stage startups are actually kind of struggling to
get additional funding because of just this dry up in IPOs.
What's the future for Data Bricks? Is that coming down
the pike for you?
Speaker 13 (25:46):
Well, I've said many many times we will be a
public company. There's no doubt about it. So it's not
a question of if, it's a question of when, you know.
But the thing is, we're not trying to time the market.
We're trying to win the market. So that's what we're
focusing on. We've raised all the funding, now we're going
to use it. We did this big partnership with SAP
where we can get all the most important data in
Data Bricks. Now we want to build AI for our
(26:07):
customers and make them successful. That's the focus. How do
we win this market?
Speaker 3 (26:11):
What kind of milestone are you setting for yourself before
you actually get to the point where you tell investors
that you're ready to go public, that you're ready.
Speaker 7 (26:20):
We are ready. We could press a button and we
would be public today.
Speaker 13 (26:23):
It's really sort of a question of what's the priority
right now and how much benefit do we get out
of going public this fundraise that we just did, the
fifteen billion that you just referred to.
Speaker 7 (26:32):
We're also using a large portion of that towards.
Speaker 13 (26:36):
Liquidity for our employees, so you know, we're solving the
liquidity problem. We're solving investing in you know, our business,
in our products. So you know, there's not an extreme
sense of urgency. But we evaluate, you know, every day.
If it's in our interest, we will go. If not,
you know, we'll stay private. I do think my guess
is that we will be public, and it's not going
(26:57):
to be too far in the distant future.
Speaker 2 (26:59):
How far in the distant future twenty twenty five, twenty
twenty six, what can you tell us?
Speaker 13 (27:04):
Yeah, I mean I would say the earliest would be
probably this year, but you know, I think that's unlikely.
That's that's all I can say. And then, you know,
but I don't think this is like a five years
out thing.
Speaker 2 (27:16):
But still, I just want to confirm the option to
raise more money before going public, if you need it
is still on the table.
Speaker 13 (27:25):
I mean, look, when we did this fundraise. We weren't
sure we were there's going to be enough interest. In fact,
we were you know, maybe we set the price too
high and there's not going to be enough capital. That
actually happened to some other late stage companies that tried
this year or two ago.
Speaker 7 (27:37):
So we're worried about that.
Speaker 13 (27:38):
And we got twice the amount that we wanted to
raise in interest. You know, we got close to twenty
billion dollars of interest, and you know, our pro and
the problem was the investors kept calling me and saying,
please don't cut me back, let me allocate the full
amount that I want to put in, let me put
one billion, let me leave this round.
Speaker 7 (27:57):
So the interest for AI and data is just insane.
Speaker 13 (28:01):
I have never seen anything like it in you know,
the ten fifteen years I've been doing this. So there's
a lot of capital out there, but they want to
invest it towards AI. So you're right, if you're not
an AI then it might be a completely different story.
So it's sort of a tale of two different cities,
you know, the AI companies where there was seems to
be infinite amount of interest, and then a non AI
companies where you know.
Speaker 7 (28:22):
There's like it's sort of not great. It stopped growing.
Speaker 13 (28:25):
They don't want to invess, right you know, multiples are depressed,
so unfortunately it's like that.
Speaker 2 (28:29):
Right now, Ali got Zi Data Bricks CEO. Good to
see Ali, Thanks so much for joining us. Well, you
heard Ali mentioned it's kind of this tale of two
different types of companies, those ones that are AI backed
and those ones that aren't VC backed. Unicorns, though some
reaching a tipping point. Over one thousand startups with a
one billion dollar valuation or higher are struggling to IPO
(28:51):
and raise funds for more. Bloomberg's Katie Roof joins us. Katie,
was that surprising to hear from Ali that they just
have like investors cla to invest more and more money
or does that make sense because of where they play
in the market.
Speaker 4 (29:06):
Yeah, I wasn't surprised at all.
Speaker 14 (29:07):
I was well aware that there's a lot of investor
interests in data bricks, but you know, they are in
a league of their own. There's a small number of
these unicorns that are able to raise a lot or
deck accords in their case, that are able to raise
a lot of money.
Speaker 4 (29:24):
You know, there are over a.
Speaker 14 (29:26):
Thousand unicorns, maybe over twelve hundred according to CB Insights,
and the vast majority, especially the ones that aren't AI, are.
Speaker 7 (29:35):
Going through a tough spot.
Speaker 14 (29:37):
According to data reviewed by Karta, about well fewer than
thirty percent of the unicorns have raised money in the
last few years, and almost half of those were down rounds,
which used to be, you know, something that you wouldn't
do in greener times.
Speaker 3 (29:55):
Katie, what about Zoo's other startups that aren't in a
league of their own, What sorts of desperate measures are
they now resorting to.
Speaker 14 (30:04):
So beyond the down rounds, we've seen other things like
reopening the last round, you know, quietly raising more money
at the same valuation.
Speaker 4 (30:12):
But then sometimes.
Speaker 14 (30:13):
More desperate things like pay to play rounds, where you
require investors to you know, pay more money to be
able to keep their existing stake. There's all sorts of
different ways that they're getting creative here. Some of them
are taking on pretty difficult terms. You know, much was
(30:34):
made of what service Titan did. They took some difficult
terms from TBG, although in the end they were able
to go public at you know, above their round. But
most of them aren't on track to go public. There
have been very few IPOs in the last few years,
and so the industry is quietly talking about what's been
known as what's become known as zombie unicorns. These unicorns
(30:55):
that are like still there because they have revenue, but
they can't go public and provide liquidity for their investors.
No one wants to acquire them at the price for
their last round, and they're just in a really difficult plot.
Speaker 3 (31:09):
That's Bloomberg's Katie Riff, thanks for joining us. Coming up,
advertisers return to X. More on that story. Next, this
is Bloomberg. Social media platform X is seeing a resurgence
(31:36):
in advertising. The company's revenue jumped over forty percent in
December compared to a year ago. This as marketers rethink
their position with the platform as Elon Musk gains newfound
influence with the US government. More on this. Bloomberg's Kurt
Wagner joins us. Now, Kurt, how much of this has
to do with Elon's influence in Washington versus X getting
(31:58):
better as a platform for mark to be on.
Speaker 8 (32:02):
Yeah, I think the influenced part from Elon as a
huge factor here, right, because I think if you look
at what X looks like today versus what it looked
like six months ago. I don't see a huge difference.
The marketers that I talk to don't necessarily see a
huge difference. What has changed is to point out Jackie
is of course Elon's role within the government, and also
the fact that X is now outsuing brands that aren't
(32:25):
advertising on the platform. Right, So, if you're a marketer today,
you're sitting there going, hey, is it worth spending some
money on this service or sort of getting in the
crosshairs of Elon Musk right now given his power, and
I think some brands are choosing you know that it's
the time to return for.
Speaker 2 (32:42):
Them at the end of the day, though Kirk, does
it work? Does it work better than meta platforms? Instagram?
Does it work better than TikTok?
Speaker 8 (32:50):
As far as advertising goes, I mean it has never
worked better. It's a different type of ad, right, So
usually with X or formerly with Twitter, you would be
doing what's called the brand ad, essentially, you know, the
digital version of a TV commercial type of thing, and
you know that could be great if you're going alongside
the super Bowl or the Grammys or some other major
news event. You're not really going to drive sales in
(33:12):
the way that you would on Google or Meta, and
so it's a different type of AD. It's never performed
at the same level as those other competitors, which is
one of the reasons why X and Twitter's business has
always been significantly smaller than those bigger players.
Speaker 3 (33:25):
Kurt, Now, with that we're seeing this kind of improvement
on the platform, where does this leave X in the
broader array of businesses that Elon Musk oversees.
Speaker 8 (33:35):
Yeah, I mean it's always been you know, the most
maybe culturally important of those, just given the speech factor, right,
given the fact that Elon's out here commenting on on
you know, politics and other things that are happening in
the world, it's still certainly going to be a much
smaller part of the business than or his empire excuse me,
than a Tesla SpaceX even XAI. Right, the valuation we're
(33:56):
seeing that XAI is raised AD is significantly higher than
X so business wise, it is still a smaller part
of his portfolio. But again, it's more of the cultural
and speech elements of this that I think give it
so much clout within his broader universe.
Speaker 2 (34:11):
Bloomberg' Kurt Wagner to subscribe to the Bloomberg Tech In
Depth newsletter. Go to Bloomberg dot com slash newsletters. Well,
let's look elsewhere in Elon Musk's empire. Today's Big Take
looks at how Tesla and SpaceX both relied on work
by undocumented immigrants all the while, well, Elon A. Musk
advocated for a broader crackdout Bloomberg Sarah Fryar joins us
(34:34):
for more on this. As I mentioned, Sarah, it is
today's big take. Julia Loves investigation. What did she find?
What did the Bloomberg News team find about Musk's company's
reliance on undocumented labor.
Speaker 15 (34:47):
Well, it's really quite stunning.
Speaker 16 (34:49):
I think we are all used to the idea that
a lot of construction projects, a lot of agriculture projects,
a lot of cleaning projects, do you undocumented labor? What's
what's different here is evil and must proximity to that
issue and advocacy against undocumented immigrants, of working with Donald
(35:12):
Trump on policy in that area. Tweeting started posting on
Ked about it constantly. This is this is a huge
area of interest and concern for Musk, and yet Julia
Love spoke with several undocumented workers who have helped be
part of must expansion in Austin with his gigafactory and
(35:35):
with SpaceX. So what they have spoken about is whether
they're working on on facilities, on construction, on parts of
expanding and maintaining those factories. It has been a critical
part of the.
Speaker 17 (35:55):
Workforce for the gigafactory and for some SpaceX projects. So
we have been talking to those to those people and
trying to understand their role. Julia spoke with about a
dozen people.
Speaker 3 (36:12):
Sarah, what did the company have to say about what
you guys found in the reporting? Are they improving practices
in any way?
Speaker 15 (36:20):
We have not gotten a response yet from the company,
although of course, as we as journalists always do, we
ask for comment. We have not heard any response, but
we worked very hard to Julia Love worked very hard
to verify everything that she was.
Speaker 3 (36:35):
Told Bloomberg Sarah Fryer, thanks for joining us. Apple and
Alphabet are restoring TikTok to its app stores after US
Attorney General Pam Bondi sent a letter to two companies
assuring that a band wouldn't immediately be enforced for more.
Speaker 4 (36:59):
Bloomberg's Alex joins us.
Speaker 3 (37:00):
Now Alex this has been quite the tit for tat
ever since the ban was initially passed. This is kind
of something that is underpinned by federal legislation. So even
though it's momentarily brought on, where does this leave the
fate of TikTok's future.
Speaker 18 (37:17):
I think, Jackie, that it can seem like this is
a huge win. I do think that it is a
big win in sort of this longer saga that TikTok
is now back online in both the Apple and Google
app stores. However, it is definitely not the end of
the road for the platform. Donald Trump has essentially stopped
enforcement of the law that went into effect for seventy
five days, so from now that ME and C has
(37:39):
another roughly six weeks. Early April is the deadline at
this point, and so what he has to do between
now and the beginning of April is negotiated deal that
would keep TikTok running in the US, but would also
address the national security concerns that were brought up in
a very bipartisan manner with the prior administration in the
prior Congress. So even though like I said, it is,
(38:00):
you know, a big win in this longer saga, it
is certainly not the end of the line for TikTok,
and it does not guarantee its future in the United States.
Speaker 2 (38:07):
Alex, what could that deal look like? Does that deal?
Is it on the table for the US perhaps to
buy TikTok via a sovereign wealth fund if that does
get established.
Speaker 18 (38:20):
The terms of the deal, and you know, various proposals
that have been thrown around are very mushy. I think
that you know, every week we hear another kind of proposal,
we hear about another interested potential acquire, another interested potential buyer.
Some of the names that have been thrown out have
you know, denied actually being involved in any way. People
(38:41):
like Elon Musk, who we had initially heard was being
considered as one potential off ramp by the Chinese government,
actually came out just at the end of January to
say he's actually not interested. So the sovereign Wealth fund
was another thing that was put forward, but the terms
of how that would actually work were very unclear. We
also know that with this Auber Wealth Fund, this would
(39:01):
take a lot of time to actually to actually stand up.
And Donald Trump as of right now, has only given
himself until the beginning of April for the enforcement of
this law to kick back in. So that's all to say,
there's a lot of stuff on the table. It's all
a little bit uncertain at this point. But we do
know that there are ongoing talks in the White House
and between the White House and TikTok and Bye Dance
(39:23):
on a potential path forward.
Speaker 4 (39:25):
Here, Alex.
Speaker 3 (39:26):
Do we know what kind of assurances lawmakers want to
see before we end up getting any kind of deal
between President and Trump and any other party involved.
Speaker 18 (39:38):
That is a great question, and most lawmakers have been
mum on this ever since the executive order was signed
by Donald Trump during his first day in office. We
know that a large number of the folks that actually
pushed this legislation across the finish line to begin with
were members of Trump's own party, and some of them,
for example Tom Cotton, have come out to say the
(39:58):
law needs to be enforced. And even though you know,
even though there hasn't been a whole ton of chatter
since the executive Order was signed, we do know that
behind the scenes there is likely a lot of pushback
from folks who are concerned that whatever deal may end
up coming to Fruition may not actually address the national
security concerns that got that app shot down here in
(40:20):
the first place, so that all remains to be seen.
Speaker 2 (40:22):
Bloomberg's Alex Levine joining us from New York today. Alex,
thanks so much. Have a great long weekend, and you
have a great long weekend everybody, because that is going
to do it for this edition of Bloomberg Technology. Do
not forget to check out our podcast. You can find
it on a terminal as well as online on Apple, Spotify,
and iHeart This is Bloomberg. We'll see you on Tuesday.
Bloomberg Audio Studios, podcasts, radio news from the heart of
where innovation, money and power collide in Silicon Valley and beyond.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2 (00:34):
Live from New York.
Speaker 3 (00:35):
I'm Tim Stenoveek and I'm Jackie Devalas in San Francisco.
This is Bloomberg Technology Now coming up. US President jd
Vance blasts Europe, accusing the region's leaders of undermining democratic
values and taking aim at the blocks attempt to regulate
hate speech and misinformation in media online. Plus, we are
joined by the CEO of Data bricks on the company's
(00:58):
AI focused partnership with SAP and a look at Elon
Musk's empire and how some of his companies hired undocumented
workers to build factories. Let's also take a look at
those shares of Meta they're up on the day and
this as the company is pushing into augmented reality NAI
and has identified its next big bet, AI powered humanoid robots.
(01:21):
Let's get more on this with Bloomberg's Mark.
Speaker 4 (01:22):
German, who joins us now.
Speaker 3 (01:24):
Mark, humanoid robots sound like something out of a sci
fi movie. What is Meta's vision for this venture? Here
and how much are they spending to do it?
Speaker 5 (01:34):
So Meta wants to own this still nascent humanoid market. Right,
These are home robots that can do chores for you,
maybe fold laundry, carry a glass of water, bring something
for you up the stairs. You've seen Tesla get into
this game with optimists, We've seen Boston Dynamics with Spot.
Other companies like Apple and Google Deep Mind or making
investments here. But Meta wants to be the android or
(01:55):
qualcom of the humanoid industry, empower the underpinnings, the software,
the hardware, the artificial intelligence, the sensor stacked the compute
for the whole industry. So they're talking to several partners,
including Unitry. They're talking to a company called Figure Ai,
and they want to power this. And today they're starting
up a new division run by the former CEO of
(02:16):
GM's Crews, Mark Whitten. They're going to hire about one
hundred people for their robotics field and their plan is
to try to own this market and eventually maybe even
make a humanoid robot of their own.
Speaker 2 (02:27):
Mark is the idea here that they make money on
the hardware, the software. At the end of the day,
how is this a company How does this help the
company make more money selling US ads?
Speaker 5 (02:40):
I mean, Meta is investing billions of dollars in artificial
intelligence and augmented reality, and those are two core technologies
that are also useful in humanoid robots. Right, this technology
could be applied to humanoids. They're spending sixty five billion
dollar on R and D investments across twenty twenty five,
so a portion of that will now go to humanoid robots.
And how they can make money from this one day
(03:02):
obviously is selling it to consumers, but sooner they can
make money on becoming the platform right and licensing their
technology parts of it open source to third party partners.
Speaker 6 (03:12):
Right.
Speaker 5 (03:12):
Meta believes that the hardware stacks are pretty well done
right now by the third party humanoid manufacturers.
Speaker 7 (03:18):
Right.
Speaker 5 (03:18):
Where they see a step down is in the AI
and the software, and they believe with Loma they can.
Speaker 7 (03:24):
Fill that gap.
Speaker 4 (03:26):
Mark.
Speaker 3 (03:26):
What has the company learned from its reality labs, prior
ventures and headsets for example? What does it plan to
do differently this time around with humanoid robots?
Speaker 5 (03:36):
Well, I don't think they're going to do much differently
right other than I think they're starting to hire a
little bit more slowly than they have with the augmented
reality metaverse push.
Speaker 8 (03:45):
Right.
Speaker 5 (03:45):
So they're hiring about one hundred people this year, right,
That seems like small potatoes compared to the number of
people they hired at the height of COVID, at the
height of building out the metaverse and mixed reality.
Speaker 7 (03:54):
Right.
Speaker 5 (03:54):
So they're going to go a little bit more slowly here,
maybe invest a little bit less money at the get go,
but I think their ambition is still the same.
Speaker 7 (04:01):
What is that, Moonshaw?
Speaker 5 (04:02):
What is that long term area that we can own
as a company.
Speaker 2 (04:06):
Bloomberg's Mark German and joining us out there in Los Angeles. Mark,
always good to see you. Congratulations on this scoop as
well well. Earlier today we heard from Vice President JD
Vance who spoke at the Munich Security Conference. Take a
listen to what he had to say.
Speaker 9 (04:19):
The threat that I worry the most about visa the
Europe is not Russia, it's not China, it's not any
other external actor.
Speaker 7 (04:27):
And what I worry about is.
Speaker 9 (04:29):
The threat from within the retreat of Europe from some
of its most fundamental values, values shared with the United
States of America.
Speaker 2 (04:39):
Van's called out Europe's regulation of big tech, saying it's
out of control and harming free speech. Van cited incidents
from Germany to Sweden to the UK of what might
be called woke policies as evidence of how Europe has
lost its way. Bloomberg's Mike Shepherd joins us now to
discuss Mike, how did this message? How did this speech
land with the audience in Munich?
Speaker 10 (05:00):
Well, it, Philip with flat because when you consider the
context of the Munich Security Conference, you have to think
about what's happened earlier this week we saw JD. Vance's boss,
President Donald Trump make this sudden outreach to Vladimir Putin
and Russia to try to negotiate an end to the
Ukraine War. And Ukraine really did not come up very
(05:21):
much in the speech at all from Vance, and overall
it was an elbows out address. He began his remarks
by saying basically that there is a new sheriff in town,
and he really tried to suggest that Europe need to
fall much more into line with his and Donald Trump's
brand of politics, especially when it comes to the tech
(05:42):
industry and regulation of online content and regulation of AI.
There's a thread between the remarks we heard today in
Munich and what he said earlier this week in Paris
where he addressed the artificial intelligence summit convened by French
President Manuel mccrom. The idea from Vance there was to
(06:03):
talk about overregulation of that sector too and say that
that is stifling innovation. But again he also brought up
this whole question of moderation and the risk of censorship
through artificial intelligence.
Speaker 3 (06:16):
Mike Vice President Vance also seemed to suggest that the
annulment of the Romanian election in December was somehow uncalled for,
despite that there was evidence of Russian interference.
Speaker 4 (06:28):
How did those commons land well?
Speaker 10 (06:30):
Again, this is another remark that he made during his appearance.
It really did not sit well with the audience, especially
the Romanian delegation. There's ample evidence that Russia had tried
to interfere with the results, which led to a far
right candidate pulling off a surprising victory. And the concern
(06:51):
about Russian interference with and tampering with domestic affairs of
its closest neighbors is a constant concerning that we have
heard from Baltic officials that we have interviewed. You know,
I've spoken with the foreign ministers of Lithuania and Latvia
in the past year, and this is something very much
(07:11):
at top of mind, and they recognize the risk of
these kinds of interference operations. And it is a sensitive
point for Vance and the Republican Party too because dating
back to twenty sixteen, we saw Donald Trump's election somehow
tied to a Russian interference operation here as well. So
this is something he is trying to diminish. And don't forget,
(07:34):
Jade Vance is not just aiming this speech at the
audience Erah Munich. He has an audience back here in
the US that he's trying to satisfy, and that is
his allies, Donald Trump's allies, and they are looking for
him to have this really strong approach towards Europe. And
even if the speech didn't land well in the room there,
it very likely landed well with allies here who want
(07:57):
to see JD. Vance take this forceful role in propelling
the maga politics of Donald Trump for the future.
Speaker 3 (08:05):
That's Bloomberg's Mike Shephard, appreciate you joining us. Shares of
Airbnb are surging today as the company posted an upbeat
forecast for the first three months of twenty twenty five,
citing continued strong demand following its holiday strength.
Speaker 4 (08:28):
Now for more, Bloomberg's Natalie Lung joins us.
Speaker 3 (08:30):
Now, Natalie, help us understand this because gigagonomy, peers, Lift
and Uber issued more muted forecasts. But what's driving Airbnb's
optimism here?
Speaker 6 (08:41):
Yeah, they had a very good fourth quarter during the
holiday season where US airline carriers as well as online
travel peer Expedia also talked about, you know, strong international
travel and in particular, airbnbsaw acceleration of growth in all
of the regions that's operating in, including the US, where
there was some slowing demand last year, but it seems
(09:03):
like it's really back in the later part of the year.
Speaker 5 (09:08):
Natalie.
Speaker 2 (09:08):
What's going on with the company's experience as part of
the business and the investment that they talked about happening there?
Speaker 6 (09:15):
Yeah, the company told us that they're going to be
spending two hundred million to a two hundred and fifty
million this year into new initiatives, including the relaunch of experiences.
The CEO talked a bit about how in the past
when they launched it, maybe havn't cross marketed products enough.
So let's say, when you're staying in staying in a
particular city that they don't push or promote their related
(09:38):
experience as much, and so the relaunch will be better
at that.
Speaker 2 (09:42):
All right, Bloomberg's Natalie Lung, thanks so much for joining
us on Airbnb surging. Let's bring in Tiffany Wade, senior
portfolio manager at Columbia Threadnil Investments. They've got about six
hundred and forty five billion dollars in assets under management. Tiffany,
I want to start with Palo Alto Networks and get
your thoughts there, because we're seeing shares on a little
more than four percent as we speak. The company did
(10:03):
report disappointing earnings outlook, but for To net and Checkpoint
posted strong results. What's going on with Palo Alto.
Speaker 11 (10:12):
I think across the cybersecurity space we are seeing pretty
strong trends. The last couple of quarters, we saw some
customer rationalization of spending. I think we're seeing that coming
to an end, and we're starting to see sales growth
pick up again. Palo Alto obviously down today, for the
most part, the metrics were pretty good that they reported
some of the key metrics that custo that investors look at,
(10:36):
recurring revenue was very strong in the quarter, and they
beat numbers for the most recent quarter that they provided. However,
free cash flow guidance looks like it's a little bit
second half loaded for the year, which I think is
disappointing some people. But I would say I think the
other important thing that we're positive on is that over
the last couple of quarters, Palo Alto was adopted a
(10:57):
platform approach to product sales, which seems to be resonating
with customers, and I think we saw more evidence of
that this quarter, and this helps customers consolidate spending, which
is a trend that we've seen for the last couple
of quarters. But I also think for the longer term,
the trend of increasing cyber threats is not slowing down,
and Palo Alto will play an important role in helping
their companies and their customers secure their data and also
(11:20):
their AI models, because we are seeing companies face traditional
security threats such as data breaches, but new threats driven
by AI, such as more sophisticated threats or enhanced security
threats that are designed to disrupt output for an AI model.
Speaker 3 (11:39):
Tiffany, let's stick with AI in particular, some of the
big tech giants that have made some pretty wide comments
about infrastructure, R and D talent investments. How discerning our
investors when it comes to this kind of spend. Do
they care where it's going, especially now off the news
that Meta is building a humanoid robot, which is surely
(12:01):
to take quite a bit of investment there.
Speaker 11 (12:05):
Yeah, I think investors are definitely keeping a very close
eye on the amount of spending that the large companies
like the hyperscalers are putting into AI, and over the
course of the next couple quarters, we're going to want
to see returns on those investments. For the cloud providers, specifically,
they're spending a significant amount of CAPEX in investing in
(12:26):
AI processing capacity. I think in order to stay ahead
of trends. Amazon's CEO Jeff Bezos said recently that he
thinks that we'll see a world where virtually every app
has generative AI in it, and they need to invest
to stay ahead of this. So the cloud providers are
offering a variety of AI models which are pre trained
for use cases, but they also help customers tune a
(12:49):
model or adapted to specific needs. And they're also offering
tools and services like secure data storage and data management
that make it easier for their customers to handle the
large data sets required for AI models.
Speaker 7 (13:02):
And I think that all.
Speaker 11 (13:03):
Of these services should see additional demand with faster adoption
of AI. And I think what we'll see is these
companies are becoming kind of the toll roads for AI,
where they're supplying the cloud, the tools some of the developers,
and the processing capacity that their customers need to enable
other companies to develop and deploy AI.
Speaker 3 (13:24):
We've also seen some comments coming from Washington that the
government plans to be more supportive when it comes to
investments in artificial intelligence. How much of that initial enthusiasm
from President Trump's Stargate venture being announced has worn off
by now?
Speaker 11 (13:40):
I think that that's probably the Stargate venture is a
flashy announcement, but I think it's more of the same
of what we're seeing. There was already a significant amount
of capital investment going into infrastructure spending. Formalizing announcements with
multiple companies investing is a great news story, and maybe
some of the spending, but I think a lot of
(14:01):
the spending was going to happen anyways over the next
three to four years and over the next decade.
Speaker 2 (14:06):
Are you not at all concerned about CAPEX spending from
the hyperscalers from any members of the mag seven being
too much? Are you overspending?
Speaker 11 (14:18):
I don't think they're overspending right now. A lot of
the spending from the mag seven companies is going to
their own use cases where they're actually seeing a return
on those investments in terms of better advertising models or
better offerings to customers. But a lot of the spending
is also going to support their customers who are trying
to develop AI tools that they're going to sell in
(14:41):
the future. So I don't think that the I wouldn't
call it overspending at this point. And I do think
that the adoption curve for AI is probably going to
pick up very significantly from here, as we do see
costs coming down very significantly, and that's going to fuel
more demand for the services that the cloud providers are
are providing.
Speaker 2 (15:00):
Well, speaking of costs coming down, the news that we
got from deep Seek a little over two weeks ago
or three weeks ago at this point, does that mean that,
indeed these companies have become more efficient when they're training ms,
for example, that they won't need all the CAPEX that's
been invested.
Speaker 11 (15:18):
That's definitely a concern in the market, and you saw
that in the Monday after the deep Seek R one
model announcement. I don't think that we're going to I
think what we're seeing is that the deep Seak announcement
was really highlighted the efficiency of model development already. So
costs for model development from the established US players like
(15:41):
open ai or Anthropic have been coming down almost as
quickly as we saw in the deep Seek model. So
I think it's really highlighted how efficient the models are becoming,
how fast the technology improvement is. And if we need
less processing power per computation or for inferencing instance, I
(16:03):
don't think that that leads to a lesser demand for
processing capacity. I think that means the adoption picks up faster.
Speaker 7 (16:11):
So if you think.
Speaker 11 (16:12):
About the adoption of cell phones, as they got cheaper,
more people bought them, you didn't end up needing to
make less cell phones.
Speaker 3 (16:21):
That's Tiffani Wade from Columbia Thread Needle Investments, thanks for
joining us.
Speaker 4 (16:26):
Coming up will be.
Speaker 3 (16:27):
Joined by the CEO of AI startup Times on their
big funding round. We're also watching shares of draft kings
this as the Boston based company reported fourth quarter earnings
that eat expectations. Also boosted its sales guidance for the
current year to at least six point three billion dollars,
in the sign that the company is overcoming concerns about
(16:48):
a tough market for sports betting operators. This is Bloomberg
(17:10):
on today's AI and Action. We're looking at AI software
startup times. After Goldman Sachs Growth Equity Union led at
one hundred and twenty five million dollar funding round for
the company at one point three billion one point one
to three billion dollar valuation. Let's bring in CEO Owen
Henshee Owen, Welcome to the Unicorn club. How does it
(17:31):
feel to finally reach this smilestone and how do you
plan to put this money.
Speaker 12 (17:35):
To use f person foremost, Jackie, thank you for having me.
Happy Valentine's Day. Yeah, it's a great question. We're really
proud and excited to have raised this capital. I think
where you'll see us invest is in the areas where
we've seen kind of outsized traction over the last eighteen months.
So as a startup, we've been around for about seven
years now. What it's really in the last kind of
(17:56):
eighteen months where we've experienced a lot of accelerated growth
as we brought these new AI capabilities to our customers.
And so we'll continue to invest in R and D.
We'll hire about one hundred people this year and that
will be all to support the growth and demand that
we're seeing. We're now doing about a billion automated actions
on behalf of our customers every single week, and we
(18:18):
expect that growth to accelerate if anything.
Speaker 2 (18:21):
Oh and as Jackie mentioned, one hundred and twenty five
million dollar funding round, it increases the valuation by eighty percent,
so certainly a big round when it comes to your company.
I'm trying to get an understanding for how difficult it
was to raise money in this environment. How long did
it take?
Speaker 7 (18:36):
Was it easy?
Speaker 2 (18:36):
Was it tough?
Speaker 12 (18:38):
I would say it's never easy, you know, raising capital,
regardless of the markets is never easy. I would say
that the reason we were able to raise this round,
and it's only nine months since our previous fundraise, was
just the success we've had in the market over the
last twelve months. And so as I say, and you know,
we've increased the number of automated actions, we're performing ten
(19:00):
in eighty months. We've grown our active users by about
two hundred and fifty percent in the last twelve months.
And so when you're kind of posting those numbers and
you're adding the level of value we are to our customers,
it tends to attract a lot of investor attention. And
so we find that our customers and the customer love
that we generate, that's really the reason we've been able
to raise at this kind of valuation.
Speaker 3 (19:21):
Oh and let's talk about some of those customers, because
a lot of European startups kind of get a bad
rap for not being kind of the big heavy hitters
that you see coming out of the US and Silicon Valley.
Where is your customer base coming from?
Speaker 7 (19:35):
Yeah, it's a great question.
Speaker 12 (19:36):
So although we're headquartered here in Dublin, we also have
offices in San Francisco, Boston, and in Australia, and so
we very much consider ourselves a global company. About seventy
five percent of our customers are in North America and Canada.
We've got about twenty five percent in Europe. But it's
across a variety of different segments, from commercial to enterprise,
to fed to strategic. I would say that the their
(20:00):
initial sweet spot for talents was in those high grow
software companies so coin based, data Break, Snowflake. But since
then we've expanded a lot into your kind of more
traditional industries confectionery like Mars, but also in fed and
strategic as well.
Speaker 3 (20:15):
We're expecting a much friendlier federal Trade Commission here in
the United States and something that might open up the
doors to more m and A. You operate in a
space that could potentially see some of that uptick. Have
you thought about how far you want to take this?
Do you see yourself as a public company or perhaps
sewing down the line.
Speaker 7 (20:34):
Yeah, it's a great question.
Speaker 12 (20:36):
I think what we love to do as a company,
honestly is build product that our customers love, make our
customers outrageously successful. And that's what we're going to be
focused on for the next kind of like short and
medium term. And I think if we do that, and
then I think we'll have optionality towards the outcome. But
right now, we're heads down focused on building a great product.
Speaker 2 (20:57):
Owen Henchy, time CEO, joining us from Bublin this afternoon.
Thank you so much for joining us. To appreciate it.
Welcome back to Bloomberg Technology. I'm Jim Stenoviek in.
Speaker 3 (21:14):
New York and I'm Jackie Devalis in San Francisco. SAP
and Data Bricks are launching a new product combining SAP's
business data with data Bricks AI platform for more. Ali Gotseed,
CEO of Data Bricks, joined us. Now, Ali, you're going
to invest two hundred and fifty million dollars. You say
you're expecting a billion dollars in revenue. Talk to us
(21:36):
about how this partnership is going to differentiate you from
what's already on the market.
Speaker 13 (21:43):
Yeah, so this is you know, we've only had one
partnership this big, and that was ten years ago with Microsoft.
So we think this is going to be game tending
for the industry. So when we talk to our customers,
we say, oh, we have an amazing platform.
Speaker 7 (21:55):
It's great. They always say, but what about the SAP data.
Speaker 13 (21:57):
Because SAP's data is the most important data in the world.
Speaker 7 (22:01):
It's what's powering all the leaders, all the.
Speaker 13 (22:03):
Financial systems of over ninety percent of fourteen five hundred,
and this data has sort of been locked away and
people can't access it.
Speaker 7 (22:10):
So what the partnership means is that anyone that goes
and now.
Speaker 13 (22:14):
Buys SAP data backs from SAP, will get all this
data accessible right there and they can start building a
genetic systems AI and so on. So that's why we
saw bullish on it, and that's why we earmarked the
quarter a billion dollars, as you said, from our ten
billion dollar fundraise that we just did.
Speaker 3 (22:31):
You know, another important partner of yours is Microsoft, and
it's increasingly becoming a competitor. It said that it's using
its products. It's fabric. It's going quickly. What's the pitch
to use data bricks rather than fabric.
Speaker 8 (22:46):
Yeah.
Speaker 13 (22:46):
Look, Microsoft's a great partner, but still remains a great partner.
They're actually investor in data bricks as well. So is
by the way, aws so is also a Google. But
there's competition. As you pointed out, they have sometimes their
own products. The great thing about SAP Data bricks is
that you have now all the SAP data in it
there and you won't find that in the other offerings,
So they don't the other offerings out there in the
market will not be there with all the business data
(23:09):
that SAP has, and it's been enriched with all the semantics.
Speaker 7 (23:12):
So what I mean by that is this is not
just data on the.
Speaker 13 (23:16):
Financial ledger of a company, it's also the travel system.
Speaker 7 (23:19):
Because SAP has.
Speaker 13 (23:21):
You know, a product called concur, they have success factors
for HR, they have a REVA for procurement. All this
data has been combined and enriched and it's just available
in spe Data bricks. But that's the big difference between
using SAP Data Bricks and using any other data platform
out there.
Speaker 2 (23:36):
Ali, there's been a huge conversation lately around inference cost
and I'm wondering, if you've seen inference costs go down,
what does it mean for data bricks.
Speaker 13 (23:47):
Yeah, inference cost has been going down all the time
in the last few years, and we have a whole
research team dedicated to just optimizing the software portion of that.
There's of course a hardware portion. We don't build hardware,
but the software portion is actually significant. Two we're seeing
you know, two and a half to three x boost
just in the software.
Speaker 7 (24:05):
What does it mean, Well, what it means is that
it's just much cheaper to.
Speaker 13 (24:09):
Build applications on top of AI. You know, it's kind
of crazy if you think about if you zoom out,
what it costs costs less than a dollar to produce
a million orbs. That's basically three books. You can get
the AI to produce three novel books for you for
less than a dollar, So that's what you know, cheaper
inference means and just just unlocks all these applications on
(24:31):
pop So that's what we're excited about.
Speaker 7 (24:33):
But for those applications, you need.
Speaker 13 (24:35):
Special data and that's all that's going to matter. And
the enterprises have all the special data. So the question
is how do you combine that data AI with that
special data that they have, and then of course with
the inference so that you can build these AI applications.
Speaker 2 (24:48):
Well, as we heard from Jackie, you recently closed this
fifteen billion dollar funding at popping sixty two billion dollar valuation.
Is that it for fundraising? Is that done?
Speaker 7 (25:00):
Ah?
Speaker 13 (25:00):
Never say never, you know, but it's a significant portant
that we've raised. Now, I think it's more important for
us to invest at wisely invested in AI talents, invested
in building AI systems, invested in goal to market, expanding
around the world, and we have significant business in Europe
and in Asia and Latin America, you know, so continuing
to expand. We're about eight thousand people we want to
(25:22):
grow very fast. We're still hiring, so that's more focused
on that.
Speaker 3 (25:26):
But never say never, Ali, We're seeing some reporting coming
out of our colleagues here on the venture capital team
that late stage startups are actually kind of struggling to
get additional funding because of just this dry up in IPOs.
What's the future for Data Bricks? Is that coming down
the pike for you?
Speaker 13 (25:46):
Well, I've said many many times we will be a
public company. There's no doubt about it. So it's not
a question of if, it's a question of when, you know.
But the thing is, we're not trying to time the market.
We're trying to win the market. So that's what we're
focusing on. We've raised all the funding, now we're going
to use it. We did this big partnership with SAP
where we can get all the most important data in
Data Bricks. Now we want to build AI for our
(26:07):
customers and make them successful. That's the focus. How do
we win this market?
Speaker 3 (26:11):
What kind of milestone are you setting for yourself before
you actually get to the point where you tell investors
that you're ready to go public, that you're ready.
Speaker 7 (26:20):
We are ready. We could press a button and we
would be public today.
Speaker 13 (26:23):
It's really sort of a question of what's the priority
right now and how much benefit do we get out
of going public this fundraise that we just did, the
fifteen billion that you just referred to.
Speaker 7 (26:32):
We're also using a large portion of that towards.
Speaker 13 (26:36):
Liquidity for our employees, so you know, we're solving the
liquidity problem. We're solving investing in you know, our business,
in our products. So you know, there's not an extreme
sense of urgency. But we evaluate, you know, every day.
If it's in our interest, we will go. If not,
you know, we'll stay private. I do think my guess
is that we will be public, and it's not going
(26:57):
to be too far in the distant future.
Speaker 2 (26:59):
How far in the distant future twenty twenty five, twenty
twenty six, what can you tell us?
Speaker 13 (27:04):
Yeah, I mean I would say the earliest would be
probably this year, but you know, I think that's unlikely.
That's that's all I can say. And then, you know,
but I don't think this is like a five years
out thing.
Speaker 2 (27:16):
But still, I just want to confirm the option to
raise more money before going public, if you need it
is still on the table.
Speaker 13 (27:25):
I mean, look, when we did this fundraise. We weren't
sure we were there's going to be enough interest. In fact,
we were you know, maybe we set the price too
high and there's not going to be enough capital. That
actually happened to some other late stage companies that tried
this year or two ago.
Speaker 7 (27:37):
So we're worried about that.
Speaker 13 (27:38):
And we got twice the amount that we wanted to
raise in interest. You know, we got close to twenty
billion dollars of interest, and you know, our pro and
the problem was the investors kept calling me and saying,
please don't cut me back, let me allocate the full
amount that I want to put in, let me put
one billion, let me leave this round.
Speaker 7 (27:57):
So the interest for AI and data is just insane.
Speaker 13 (28:01):
I have never seen anything like it in you know,
the ten fifteen years I've been doing this. So there's
a lot of capital out there, but they want to
invest it towards AI. So you're right, if you're not
an AI then it might be a completely different story.
So it's sort of a tale of two different cities,
you know, the AI companies where there was seems to
be infinite amount of interest, and then a non AI
companies where you know.
Speaker 7 (28:22):
There's like it's sort of not great. It stopped growing.
Speaker 13 (28:25):
They don't want to invess, right you know, multiples are depressed,
so unfortunately it's like that.
Speaker 2 (28:29):
Right now, Ali got Zi Data Bricks CEO. Good to
see Ali, Thanks so much for joining us. Well, you
heard Ali mentioned it's kind of this tale of two
different types of companies, those ones that are AI backed
and those ones that aren't VC backed. Unicorns, though some
reaching a tipping point. Over one thousand startups with a
one billion dollar valuation or higher are struggling to IPO
(28:51):
and raise funds for more. Bloomberg's Katie Roof joins us. Katie,
was that surprising to hear from Ali that they just
have like investors cla to invest more and more money
or does that make sense because of where they play
in the market.
Speaker 4 (29:06):
Yeah, I wasn't surprised at all.
Speaker 14 (29:07):
I was well aware that there's a lot of investor
interests in data bricks, but you know, they are in
a league of their own. There's a small number of
these unicorns that are able to raise a lot or
deck accords in their case, that are able to raise
a lot of money.
Speaker 4 (29:24):
You know, there are over a.
Speaker 14 (29:26):
Thousand unicorns, maybe over twelve hundred according to CB Insights,
and the vast majority, especially the ones that aren't AI, are.
Speaker 7 (29:35):
Going through a tough spot.
Speaker 14 (29:37):
According to data reviewed by Karta, about well fewer than
thirty percent of the unicorns have raised money in the
last few years, and almost half of those were down rounds,
which used to be, you know, something that you wouldn't
do in greener times.
Speaker 3 (29:55):
Katie, what about Zoo's other startups that aren't in a
league of their own, What sorts of desperate measures are
they now resorting to.
Speaker 14 (30:04):
So beyond the down rounds, we've seen other things like
reopening the last round, you know, quietly raising more money
at the same valuation.
Speaker 4 (30:12):
But then sometimes.
Speaker 14 (30:13):
More desperate things like pay to play rounds, where you
require investors to you know, pay more money to be
able to keep their existing stake. There's all sorts of
different ways that they're getting creative here. Some of them
are taking on pretty difficult terms. You know, much was
(30:34):
made of what service Titan did. They took some difficult
terms from TBG, although in the end they were able
to go public at you know, above their round. But
most of them aren't on track to go public. There
have been very few IPOs in the last few years,
and so the industry is quietly talking about what's been
known as what's become known as zombie unicorns. These unicorns
(30:55):
that are like still there because they have revenue, but
they can't go public and provide liquidity for their investors.
No one wants to acquire them at the price for
their last round, and they're just in a really difficult plot.
Speaker 3 (31:09):
That's Bloomberg's Katie Riff, thanks for joining us. Coming up,
advertisers return to X. More on that story. Next, this
is Bloomberg. Social media platform X is seeing a resurgence
(31:36):
in advertising. The company's revenue jumped over forty percent in
December compared to a year ago. This as marketers rethink
their position with the platform as Elon Musk gains newfound
influence with the US government. More on this. Bloomberg's Kurt
Wagner joins us. Now, Kurt, how much of this has
to do with Elon's influence in Washington versus X getting
(31:58):
better as a platform for mark to be on.
Speaker 8 (32:02):
Yeah, I think the influenced part from Elon as a
huge factor here, right, because I think if you look
at what X looks like today versus what it looked
like six months ago. I don't see a huge difference.
The marketers that I talk to don't necessarily see a
huge difference. What has changed is to point out Jackie
is of course Elon's role within the government, and also
the fact that X is now outsuing brands that aren't
(32:25):
advertising on the platform. Right, So, if you're a marketer today,
you're sitting there going, hey, is it worth spending some
money on this service or sort of getting in the
crosshairs of Elon Musk right now given his power, and
I think some brands are choosing you know that it's
the time to return for.
Speaker 2 (32:42):
Them at the end of the day, though Kirk, does
it work? Does it work better than meta platforms? Instagram?
Does it work better than TikTok?
Speaker 8 (32:50):
As far as advertising goes, I mean it has never
worked better. It's a different type of ad, right, So
usually with X or formerly with Twitter, you would be
doing what's called the brand ad, essentially, you know, the
digital version of a TV commercial type of thing, and
you know that could be great if you're going alongside
the super Bowl or the Grammys or some other major
news event. You're not really going to drive sales in
(33:12):
the way that you would on Google or Meta, and
so it's a different type of AD. It's never performed
at the same level as those other competitors, which is
one of the reasons why X and Twitter's business has
always been significantly smaller than those bigger players.
Speaker 3 (33:25):
Kurt, Now, with that we're seeing this kind of improvement
on the platform, where does this leave X in the
broader array of businesses that Elon Musk oversees.
Speaker 8 (33:35):
Yeah, I mean it's always been you know, the most
maybe culturally important of those, just given the speech factor, right,
given the fact that Elon's out here commenting on on
you know, politics and other things that are happening in
the world, it's still certainly going to be a much
smaller part of the business than or his empire excuse me,
than a Tesla SpaceX even XAI. Right, the valuation we're
(33:56):
seeing that XAI is raised AD is significantly higher than
X so business wise, it is still a smaller part
of his portfolio. But again, it's more of the cultural
and speech elements of this that I think give it
so much clout within his broader universe.
Speaker 2 (34:11):
Bloomberg' Kurt Wagner to subscribe to the Bloomberg Tech In
Depth newsletter. Go to Bloomberg dot com slash newsletters. Well,
let's look elsewhere in Elon Musk's empire. Today's Big Take
looks at how Tesla and SpaceX both relied on work
by undocumented immigrants all the while, well, Elon A. Musk
advocated for a broader crackdout Bloomberg Sarah Fryar joins us
(34:34):
for more on this. As I mentioned, Sarah, it is
today's big take. Julia Loves investigation. What did she find?
What did the Bloomberg News team find about Musk's company's
reliance on undocumented labor.
Speaker 15 (34:47):
Well, it's really quite stunning.
Speaker 16 (34:49):
I think we are all used to the idea that
a lot of construction projects, a lot of agriculture projects,
a lot of cleaning projects, do you undocumented labor? What's
what's different here is evil and must proximity to that
issue and advocacy against undocumented immigrants, of working with Donald
(35:12):
Trump on policy in that area. Tweeting started posting on
Ked about it constantly. This is this is a huge
area of interest and concern for Musk, and yet Julia
Love spoke with several undocumented workers who have helped be
part of must expansion in Austin with his gigafactory and
(35:35):
with SpaceX. So what they have spoken about is whether
they're working on on facilities, on construction, on parts of
expanding and maintaining those factories. It has been a critical
part of the.
Speaker 17 (35:55):
Workforce for the gigafactory and for some SpaceX projects. So
we have been talking to those to those people and
trying to understand their role. Julia spoke with about a
dozen people.
Speaker 3 (36:12):
Sarah, what did the company have to say about what
you guys found in the reporting? Are they improving practices
in any way?
Speaker 15 (36:20):
We have not gotten a response yet from the company,
although of course, as we as journalists always do, we
ask for comment. We have not heard any response, but
we worked very hard to Julia Love worked very hard
to verify everything that she was.
Speaker 3 (36:35):
Told Bloomberg Sarah Fryer, thanks for joining us. Apple and
Alphabet are restoring TikTok to its app stores after US
Attorney General Pam Bondi sent a letter to two companies
assuring that a band wouldn't immediately be enforced for more.
Speaker 4 (36:59):
Bloomberg's Alex joins us.
Speaker 3 (37:00):
Now Alex this has been quite the tit for tat
ever since the ban was initially passed. This is kind
of something that is underpinned by federal legislation. So even
though it's momentarily brought on, where does this leave the
fate of TikTok's future.
Speaker 18 (37:17):
I think, Jackie, that it can seem like this is
a huge win. I do think that it is a
big win in sort of this longer saga that TikTok
is now back online in both the Apple and Google
app stores. However, it is definitely not the end of
the road for the platform. Donald Trump has essentially stopped
enforcement of the law that went into effect for seventy
five days, so from now that ME and C has
(37:39):
another roughly six weeks. Early April is the deadline at
this point, and so what he has to do between
now and the beginning of April is negotiated deal that
would keep TikTok running in the US, but would also
address the national security concerns that were brought up in
a very bipartisan manner with the prior administration in the
prior Congress. So even though like I said, it is,
(38:00):
you know, a big win in this longer saga, it
is certainly not the end of the line for TikTok,
and it does not guarantee its future in the United States.
Speaker 2 (38:07):
Alex, what could that deal look like? Does that deal?
Is it on the table for the US perhaps to
buy TikTok via a sovereign wealth fund if that does
get established.
Speaker 18 (38:20):
The terms of the deal, and you know, various proposals
that have been thrown around are very mushy. I think
that you know, every week we hear another kind of proposal,
we hear about another interested potential acquire, another interested potential buyer.
Some of the names that have been thrown out have
you know, denied actually being involved in any way. People
(38:41):
like Elon Musk, who we had initially heard was being
considered as one potential off ramp by the Chinese government,
actually came out just at the end of January to
say he's actually not interested. So the sovereign Wealth fund
was another thing that was put forward, but the terms
of how that would actually work were very unclear. We
also know that with this Auber Wealth Fund, this would
(39:01):
take a lot of time to actually to actually stand up.
And Donald Trump as of right now, has only given
himself until the beginning of April for the enforcement of
this law to kick back in. So that's all to say,
there's a lot of stuff on the table. It's all
a little bit uncertain at this point. But we do
know that there are ongoing talks in the White House
and between the White House and TikTok and Bye Dance
(39:23):
on a potential path forward.
Speaker 4 (39:25):
Here, Alex.
Speaker 3 (39:26):
Do we know what kind of assurances lawmakers want to
see before we end up getting any kind of deal
between President and Trump and any other party involved.
Speaker 18 (39:38):
That is a great question, and most lawmakers have been
mum on this ever since the executive order was signed
by Donald Trump during his first day in office. We
know that a large number of the folks that actually
pushed this legislation across the finish line to begin with
were members of Trump's own party, and some of them,
for example Tom Cotton, have come out to say the
(39:58):
law needs to be enforced. And even though you know,
even though there hasn't been a whole ton of chatter
since the executive Order was signed, we do know that
behind the scenes there is likely a lot of pushback
from folks who are concerned that whatever deal may end
up coming to Fruition may not actually address the national
security concerns that got that app shot down here in
(40:20):
the first place, so that all remains to be seen.
Speaker 2 (40:22):
Bloomberg's Alex Levine joining us from New York today. Alex,
thanks so much. Have a great long weekend, and you
have a great long weekend everybody, because that is going
to do it for this edition of Bloomberg Technology. Do
not forget to check out our podcast. You can find
it on a terminal as well as online on Apple, Spotify,
and iHeart This is Bloomberg. We'll see you on Tuesday.
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