April 17, 2024 • 43 mins
Bloomberg's Caroline Hyde and Ed Ludlow break down why Tesla is asking its investors to approve CEO Elon Musk's $56 billion pay package again. Plus, chipmaking equipment orders dive at ASML as Europe's most valuable company faces a pull back from its Taiwanese and South Korean customers.
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Speaker 1 (00:01):
From Mahard of Where Innovation, Money and Power.
Speaker 2 (00:04):
Collie in Silicon Vallet NBN. This is Bloomberg Technology with
Caroline Hyde and Ed Love Love.
Speaker 3 (00:25):
I'm Caroline Hyde at Bloomberg's world headquarters in New York.
Speaker 4 (00:27):
And I'm Ed Lovedlow in San Francisco. This is Bloomberg
Technology coming up.
Speaker 3 (00:31):
Tesla asked its investors to approve Musk's fifty six billion
dollar pay package. Again, we discussed the vote on moving
to Texas and its criticism of the Delaware court that
voided Musk's twenty eighteen award.
Speaker 4 (00:44):
Chip making equipment orders dive at ASML as Europe's most
valuable company faces a pullback from its Taiwanese and South
Korean customers.
Speaker 5 (00:52):
Are chip stockpiles back.
Speaker 3 (00:55):
And meanwhile we bring you a key conversation with the
CEO of debt laden Autos as the French IT company
seeks to save itself. That and so much more coming
up throughout this hour. But let's get your cook check
on these markets. And I want to shine a light
and what's happening ultimately an the equity market, which pulls
back a little bit from where it had been. We're
seeing a little bit of caution, of course, as we
(01:15):
digest a more hawkish federal reserve, as we think about
where JA power is really steering us in terms of
number of cuts ubs, thinking it'll be two for this
year starting in maybe September.
Speaker 6 (01:23):
Nevertheless, we're seeing.
Speaker 3 (01:24):
Actually bob markets continuing to outperform, and not as much
as they were earlier. Red currently seeing a twenty year
yield just down by about two three basis points to
remember big auction coming ahead of that all important Beige
Book as well, and moment we're moving on and have
a look at what's happening in the world of crypto,
because Bitcoin has actually been well on the downside, even
as the US dollar is for once falling now after
six this is the first time in six days we've
(01:46):
actually seen the US dollar give up some of its
strength as we maybe just digest what has been, of
course an apparent slightly more hawkish shift, where we're looking
at a bitcoin currently off by two and a half
percent riskasset's still cautious out there are but what are
you watching?
Speaker 4 (01:58):
On the micro Tesla continues to dominate headlines and market moves.
We're down for a four straight session, that's the worst
run of declines since the beginning of this year, and
the stock is trading at its lowest level in almost
a year. And I don't think this is to do
with the two red headlines on the Bloomberg tumil. I
think the proxy revealing that investors will vote on that
(02:19):
original twenty eighteen pay package rejected by a court, and
the idea of incorporating in Texas. I don't think that's
the downward pressure. There's indigestion from the events of the
last four days, executive departures, layoffs, and Elon's comment about
going all in on ROBOTAXI, and I think a lot
of people are trying to understand what's happening, what is
(02:40):
the big picture and when does it happen. But the
stock's under a lot of pressure, while the talk from
Elon Musk on his own platform X is fighting talk.
Speaker 5 (02:48):
And I think we've got some pretty good guests to
go through that with.
Speaker 3 (02:51):
Yeah, let's talk about the fighting talk, let's talk about
the reaction throughout. Let's start the Bloomberg's Crow Todell, And
what's so interesting is ultimately coming out fighting to Delaware,
to the court, to the judge that said initially, this
twenty eighteen pay package is far too much and new
board are not doing enough to push back. But I'm
interested ased why the argument goes that it would cost
(03:13):
billions more to renegotiate a pay package rather than just
try and vote through the current one.
Speaker 7 (03:20):
Yeah, I do think it's interesting that the board sort
of you know, portrayed this as a nuisance, really this
idea that they would have to take on additional expense
that you know, the company accounted for having to set
up these options and set aside this this compensation for
(03:41):
musk and essentially would have to sort of, you know,
do it over again. It does also strike me just
from the language that was used in the filing that
it was sort of musky in and that Robin Denholm,
the chair of the company, you know, referred to this
idea of essentially that the court had taken away shareholder
or voice. It was kind of a freedom of speech
(04:02):
esque defense of this pay package. But of course, you know,
share you know, corporate governance critics are not going to
look on this very family, this idea of you know,
this this award being slapped down and the board just
going back to the world with the same plan.
Speaker 4 (04:19):
Craig, you've been reading the proxy for the last four
hours and thirty minutes.
Speaker 5 (04:26):
I know you have been at your desk doing that.
Speaker 4 (04:28):
There's some granular detail in it that Tesla explains a
randy compensation program and the idea of reincorporating in Texas
in parallel, and my read on it is that they
basically don't want to be accused of using the Texas
incorporation as leverage in this ongoing pay issue.
Speaker 7 (04:50):
Yeah, they want to kind of pair these two basically
get the shareholders backing again. You know, I guess make
the case really that shareholders, if they didn't already know
what went into this award, the Delaware court just you know,
brought to light a lot of these details, made clear
(05:12):
what was going on here and really sort of put
it back in the court of the shareholders and say
are you okay with this or aren't you? And of
course you know, we have you know, heard rumblings reported
on this idea that retail shareholders were really sort of
an uproar, you know, based on just at least the
(05:33):
volume of complaints about the way this was handled. Also
Tesla saying in the proxy that four of its ten
biggest institutional investors wrote to the company or you know,
somehow communicated that they were in support of this award.
So there is some reason to think that perhaps this
stands a chance of being approved, just as it was back.
Speaker 4 (05:55):
In twenty eighteen, it was a load of dents texts
to go through testas down a percentage point. That way
of sessions in moos created ow great work, Thank you
very much. Just keep a conversation going with Pierre Faragu,
who's head of Tech Infrastructure research at New Street Research.
Just give me one sentence, what is the story of
Tesla right now? Just one sentence.
Speaker 8 (06:19):
I'm not very good at doing one sentence, you know that.
Speaker 9 (06:23):
So the one sentence would be Testa is a car
manufacturer first and for the seable future, they need to
continue to be successful at manufacturing cars, and that's a
platform for them to do additional amazing things.
Speaker 8 (06:40):
You have a donomous driving.
Speaker 9 (06:42):
They are the most advanced player in the world on
supervised autonomous driving, so your car driving by itself under
your supervision. They're making exceptional progress. There is a very
long term, like over the horizon goal host of being
able to do Robert. It's a much more still challenging
(07:03):
thing to get to very uncertain so and there's also
the opportunity to develop human and humanoid robots on the
same technology platform as FIG And these things will take
us whichever way you look at it.
Speaker 8 (07:21):
And we know Elon Musk is very impatient, wants to
accelerate that momentum, but it's going to take us.
Speaker 9 (07:28):
And in the meantime, we also need Tesla to see
that Tesla is still going to be a very successful
g manufacturers being able over time to stabilize pricing, to
continue to gain share with the product they have in
the market today, and then in the next two three
years to be able to ramp a large volume, lower
price platform to continue to grow sustainably, and all that
(07:52):
should deliver revenue growth and margin expansion.
Speaker 8 (07:55):
And that's really like the near term and the longer
term is yes. But and robotaxes.
Speaker 4 (08:02):
It was a loaded question, but you did give me
one sentence just without full stops of punctuation.
Speaker 5 (08:07):
That's okay.
Speaker 4 (08:08):
The reason I ask it is I'm trying to understand
in the moment the downward pressure on the stock, and
I don't think it's got much to do with the
proxy So of all the headlines of the last four days,
which was of most interest to ups.
Speaker 9 (08:27):
Of the last few days, the most important headlines have heard, well,
you know, the most important thing of the last few
days was actually to digest swear the headlines of last week.
Speaker 8 (08:39):
And so we've heard, like, we've read a rota's report
mode to.
Speaker 9 (08:43):
Being canceled and things like that, and we've had like
you know, ins and indications from Milan Musk and from
this last chief designer that the modity is probably not cancered.
And so the most important breakthrough earlier this week was
the understanding that probably what's happening to that Tesla is
(09:04):
that Tesla is going to prioritize designing developing the robot
taxi in Austin for now, because anyway, the model too
will need to wait for Mexico to ramp in millions
of units, and Mexico is still two three years away,
and so in the meantime, producing only a quarter of
(09:26):
a million Model twos in Austin doesn't really help.
Speaker 8 (09:29):
It's it's like a very very little help.
Speaker 9 (09:32):
And so my educated guess is that Elan understood that
and thought, okay, let's go all in on robot taxi.
Let's get a platform out, let's have a small flet
on which we can try out tests, improve the technology,
and then let's get back to the model too a
bit later. So hopefully next week when the company reports,
we get a bit more lightly on that. So that's
(09:54):
really the big thing of the last forty eight.
Speaker 3 (09:57):
I like the fact that you give us your reasoning,
you interpretation, pr give us your reasoning on whether the
stock should be down by a third so far this year.
Speaker 9 (10:08):
Yes, so if you look at the potential of the
company in the long run, that's a nonsense.
Speaker 8 (10:15):
Tesla makes electric cards.
Speaker 9 (10:18):
Electric cars remain I think the future of cards and
nobody on us can make electric cars as good as
Tesla and as cost efficiently. And if anything, this gap
is widening. I just took delivery of my new medal three,
the high Lander. Like the podcast Testa is making it
doing grades and very cost efficient.
Speaker 8 (10:39):
Cards is still mind blowing.
Speaker 9 (10:40):
So I think it's still a very powerful company in
the stock is vastly undervalued if you look at it
in the long run. In terms of short term developments,
I have a lot of sympathy for where the stock
is going has been going in the last three months
because Tesla has been hitting a wall in terms of growth,
has been forced to regius pricing lots, you know, like
(11:01):
finding themselves in a situation where they were raising increasing
productions faster than demon could could increase. So they have
to reset the bar and it's not going to happen
over a few weeks. We still have a lot of
inventories ri seeing are still low. Demand is still not
enough to comfortably absorb the production today, so we will
need some time, you know, to get the start back
(11:23):
on track, and of course the stock correcting to that
is the way the market works, and yes, I have
sympathy for that. TESTA is at a low point, is
between two gross trajectories, continues to work on you know,
long terim moonshots like Theroid and a robotaxi, and in
the meantime, like the next couple of years are going
(11:43):
to be years of recovery.
Speaker 8 (11:44):
So ahead of that, seeing the stock quickening makes sense
to me, even.
Speaker 9 (11:47):
If I would disagree with that blatantly with evaluation implied,
if she will get it over like a three to
five year horizon, yeah.
Speaker 3 (11:55):
Giving us short term and the long term, we thank you,
Head of Tech infrastructures, research of a new street research.
Speaker 6 (12:00):
Some of the longest sentences in the house, but we
love it.
Speaker 3 (12:02):
Meanwhile, coming up tech earnings, they're upon us will dive
deeper into what to expect and the current state of
tech market's more broadly aired.
Speaker 6 (12:09):
What are you looking at ahead of that conversation?
Speaker 4 (12:12):
Philadelphia Semiconductor Index or SOCKS twenty seven names in the red,
three in the green.
Speaker 5 (12:17):
Biggest drop on ASML.
Speaker 4 (12:19):
The story chip contract manufacturers are not ordering chip making equipment.
Speaker 5 (12:24):
What does that tell us? We'll explain next. This is Bloomberg.
Speaker 3 (12:27):
Technology ASML chip equipment maker, having its worst day since
June twenty twenty two. Now put it into context, this
is a company that's up about twenty five percent so
(12:48):
far this year. Nevertheless, we see a pullback because it's
earnings really disappoint on the quarter that we've just seen
in terms of revenue. But also pointing to this quarter
we're already in saying it's going to be low where
the market had anticipated. Why, Well, we're seeing TSMC Samsung
pull back on perhaps some of the orders that we
thought for some of their overall chip equipment.
Speaker 6 (13:07):
Now, this still shows a chip sector that's.
Speaker 3 (13:09):
In recovery when you're thinking of our own purchases of
electronic goods, and they're like, but what of the AI
revolution ed? This is what's so interesting is the fact
that actually their number one market, it's China. Basically half
of their revenue is coming from China at the moment,
even though we see those sanctions, those curbs on such
very high EUV chip equipment going to China, they can't
get their hands on that, but actually they're still relatively
(13:31):
strong orders for the lower elements of where that chip
equipment has been going.
Speaker 4 (13:36):
But notably, look their own revenues that China historically is
big market. The story of the anxiety is about not China, TSMC, Taiwan,
Samsung in South Korea, all this CAPEX commitment, but they're
not fronting up in the short term. The drop was
called on quarter sixty one percent for EUV lithography. Basically,
(13:57):
they ain't buying machines that make chips. Why let's dig
deeper into these markets tech earning seasons also around the
corner epek Oscar Diskay, a senior market analyst over at
Swiss quote. You know, there's the headlines governments in Europe
and the United States right in big checks, saying come
and build chip factories.
Speaker 5 (14:15):
It's going to be great.
Speaker 4 (14:16):
And Samsung and TSMC gave us better capex outlooks for
this year, and then we've got ASML and things aren't
going so rosy.
Speaker 5 (14:23):
What was your read on that?
Speaker 10 (14:25):
Well, Actually, ASML Earning is really disappointed this morning in
Europe and kind of raised a couple of ibros regarding
the sustainability of the demand growth from chip makers and
the sustainability.
Speaker 2 (14:38):
Of the AI.
Speaker 10 (14:39):
Really now, it's important to note that ASML said that
the second half of this year is going to see
a rebound and they actually kept their full year outlook unchanged,
but obviously because now we are used to have fantastic
results from chip makers while the ASML's disappointment. Disappointment has
been a sour taste in investors well mouth this morning.
(15:01):
And I'm actually we actually think that at some point
reasonably the growth and growth expectations for chip makers will
be leveling out, and it's just to see if this
is the quarter that we will see these expectations slow down,
and there is a possibility that we do see them
slow down, and that's going to be able to trigger
(15:22):
actually a sizeable downside correction and profit taking. But more
broadly regarding AI, well, ASMA also said that they expect
AI to continue to contribute to their revenues, and we
do also expect AI really to continue, maybe not in
the same way because we expect some changes within the
AI segments. So what I mean by that is we
(15:44):
saw so far the first phase, what we call the
first phase of the AI really benefit to companies, to
chip makers, data centers, cloud businesses, all these companies that
do provide AI tools other companies. But we are now
thinking that there will be second phase in this AI
really which is expected to benefit two companies that actually
(16:05):
invest in massively in AI technologies and tools and which
should shortly start well seeing the return on their AI investments.
Speaker 6 (16:14):
So I think that even though we see.
Speaker 10 (16:16):
Some disappointment in terms of chip maker earnings Squart, while
the AI really is not ready to end, you.
Speaker 3 (16:23):
Pack brun that out to the rest of earning season
for us, because well, there's a lot of optimism that
AI is already going to be helping with costs for example.
Speaker 10 (16:31):
Well, actually, the AI has been the major talking point
and the expectations are quite high.
Speaker 5 (16:37):
Mind you.
Speaker 10 (16:37):
I mean looking at the magnificent seven socks expectations around
learning's growth of around forty percent for the first quarter.
That's huge number. That's still down from fifty five percent
printed a quarter earlier. But if we single out stocks
like Tesla and Apple who have been in trouble in
the first quarter, will the expectation of earnings growth goes.
Speaker 6 (16:59):
All the way up to eighty percent.
Speaker 10 (17:01):
So now we're talking about a handful of AI sucks,
namely Nvidia, Microsoft, but also Google, and we're sold by
Facebook and Amazon. So I think that there is a
huge optimism out there. But what we will be really
interested in is who within this AI segment is going
to be profiting from the AI developments, whether it's going
(17:22):
to be the provider of AI tools or are we
going to shift towards well the user of the AI tools.
Speaker 6 (17:28):
IMPAC great to have your voice in the show. Thank you.
Speaker 3 (17:30):
Ipek Oscar Deshka, Senior market analyst, Swiss quote giving us
the context. JP Morgan, Chase c Jamie Dinan. He makes
no secret of his firm than it is all in
on artificial intelligence. Now the head of the world's biggest bank,
when he's laying out his vision for the future money
in this AI world.
Speaker 6 (17:49):
He spoke with Bloomberg Original's.
Speaker 3 (17:50):
Host Emily Chang about that and so much more in
the premiere episode of The Circuits second season, particul Listen.
Speaker 2 (17:58):
The best needs be prepared for any business.
Speaker 11 (18:01):
I think when you think about really think about things
that can go terribly wrong, can you survive them? You know,
it could be technology, it could be government regulations, it
could be it could be the literally the weather. If
you're a restaurant, you know that might close you down.
If you have if you lose this week's business, you're
out of business. Get enough cash. So you should think
all that through.
Speaker 12 (18:19):
Bill Gates once said banking is necessary, banks are not
to what extent could AI or fintech replace traditional banks.
Speaker 11 (18:28):
So I think, first of all, I remember him saying
banks of dinosaurs. I spoke to about it in nineteen
ninety seven, and obviously he was dead roll. We probably
agree to that, but he's not wrong. The technology changes everything.
And if anyone is complacent or arrogant or think that
because you have a big position to day, you get
a big position tomorrow, that's a mistake. But the end
of this fine what is banking. Someone's going to have
(18:48):
to hold the money. Someone's got to move the money,
someone's got to raise the money, someone's got.
Speaker 2 (18:53):
To do research, you know, around money.
Speaker 11 (18:55):
Those services will still be around, and you know, hopefully
we're doing it and using a lot have to do
a better job at it. But I've always thought it's
very possible that some tech thing, you know, distant intermediates
a piece of that. And I've been writing about you know,
big tech going to our business. We've got fintech. We
also have big tech, and they will embed payment systems
in there. Some we're going to white label banks kind
(19:16):
of what Apple did.
Speaker 13 (19:17):
Uh.
Speaker 2 (19:18):
You know, they have the right to do that. I'm
not against that.
Speaker 11 (19:20):
I would be against unfair use of their position to
dominus in a business.
Speaker 12 (19:25):
Well, Apple is going deeper into financial services.
Speaker 6 (19:27):
Do you worry about the bank of Apple.
Speaker 11 (19:29):
Well, we'll get to compete, so they have a tough competitor.
But you know they hold money, move money. Yeah, they're
a form of a competitor. You know, we also partner
with them, but I'm very used to partnering and competing
with lots of people.
Speaker 12 (19:43):
Existential threat.
Speaker 2 (19:45):
I don't think it's an existential threat. But I think
if we were complacent about it.
Speaker 4 (19:49):
Yes, that was JP Morgan, Chase CEO, Jamie Diamond, and
right here on set, this is being back in the
regional so it's Emily Chang. Jamie Diamond is kind of
one of the most upset about people like high flying
executive in the person yep, the circuit series too.
Speaker 5 (20:06):
That's kind of what's cool.
Speaker 4 (20:07):
About it is you get people in a chair but
being themselves. How did you do it this time around?
Speaker 14 (20:14):
Oh boy?
Speaker 12 (20:14):
And this was my first time meeting him. You know,
it was all about London, right in London, and he
was just there for a tech conference really quick. It
was all about just making the most of every single minute,
the handshake, the walk to the interview room, the chit
chat that you know before we actually got quote unquote
on camera for you know, the formal sit down interview,
and you know, we talked about how many days he's
on the road a year, one hundred and twenty days.
Speaker 6 (20:35):
We talked about childhood, family. I asked, you know, how
do you do it? He was like, what do you mean,
how do you juggle it all?
Speaker 12 (20:41):
And I think he kind of appreciated that question because
it's you know, you normally ask that to a woman,
and you don't ask that to someone like date Jamie Dimond,
and he was like, look, I don't I don't socialize,
I don't go on red carpets. It's it's work and
family and that's what it is, and family actually comes first.
And so that's kind of where we started, and we
tried to open up from there.
Speaker 3 (21:00):
You then, of course peel away not only about his
family and keutles for continuing to ask that of both
men and women, but ultimately about how AI is changing
his business. You're going to be thinking about AI for
the rest of the season as well.
Speaker 6 (21:12):
I'm pretty sure AI is a.
Speaker 12 (21:14):
Huge part of the season, as it is a huge
part of your show. I mean, it's a huge part
of our world. We can't avoid it. One of the
interesting questions I had for him is, you know, Chat JPM,
will something like that exist in the future where we
could ask, you know, I've got thirty years, what should
I do with my money? And he said, essentially yes,
it's already doing that. We've got AI embedded and everything.
It's gonna learn more and more about you. Will I
(21:37):
be able to say to Chat JPM. I want to
get rich quick, and he was like, I hope it
tells you that you're crazy, because that's just.
Speaker 6 (21:43):
Not possible.
Speaker 5 (21:45):
Really quickly. What can we expect this season?
Speaker 8 (21:48):
Oh?
Speaker 12 (21:50):
Well, I hope you love it. We're traveling. We're taking
you to Latin America, going on Netflix sets. That's sort
of the next leg of their global expansion. After South Korea,
we go to see Mary Bara and Troy. We spend
a lot of time with her and really get to
know her behind the scenes. Palmer Lucky, the founder of Oculus,
and of course Anderild now making drones and satellites, AI
(22:10):
and warfare.
Speaker 6 (22:11):
I hope you love it, sure.
Speaker 5 (22:13):
Well, Bloomberg Original's host Emily Change.
Speaker 4 (22:15):
You can catch the full first episode tonight on Bloomberg
six pm Eastern.
Speaker 6 (22:26):
Welcome back to Bloombog Technology. I'm Caroline Hyde in New.
Speaker 5 (22:28):
York and I'm as our Vote in San Francisco.
Speaker 4 (22:31):
A very quick check in on the markets and when
it comes to publicly traded technology names. I'm taking a
look at Tesla sevent tens four percent. It's paired its decline,
but we're still down for a fourth straight session. We
talked about the reasons why earlier in the show with
Pierre Ferugu it's a sock that's below five hundred billion
dollars now in market cap, and you know, I'm looking
(22:53):
for stories. I'm looking for clear downward direction in the market.
Tesla was one name that contributes to that. Bitcoins so
really interesting. Actually during the course of this show, Carrow,
you highlighted it earlier. But we're now down nearer to
sixty thousand US dollars per token on bitcoin, a drop
of four percent in the session of an asset that
trades twenty four to seven on the Bloomberg terminal. There's
(23:15):
a lot of writing about the real world use case
ATMs in Latin America becoming more mainstay, but also the
industry bracing for the harving loads of people saying they're ready.
But if you look at some of the technology related
stocks linked to crypto, those are also seeing some downward pressure.
Speaker 5 (23:32):
And we other pieces of news from that industry too.
Speaker 3 (23:34):
We do, and let's dive in because Gray Scale Investment
CEO Michael the Sonosheine. He says that the market for
US spot bitcoin ETFs, still relatively new, hasn't seen.
Speaker 6 (23:43):
Wide scale institutional adoption at least.
Speaker 3 (23:45):
In an exclusive conversation with blouobg TV, the CEO also
spoke about the SEC's approval of bitcoin ETFs and the
long road to regulatory approval.
Speaker 6 (23:53):
Is what we have to say.
Speaker 15 (23:55):
Even though they've been in market now for three and
a half months, we still do not have listed option
unspot bitcoin et apps. This is a really important feature
that investors want and they deserve. This can help investors
to manage their positions, manage risk. Ultimately, I do believe
that the SEC should be approving these so that they're
once again not in a position to be treating spot
(24:17):
bitcoin et apps disparately from you know, bitcoin futures based UTPs.
Speaker 4 (24:23):
Let's stick with regulation. Moving on to stable coins now.
I'm to push in the House and the Senate to
pass such legislation as soon as next month. Senators Loomis
and Gillibrand are proposing a measure that would ban algorithmic
stable coins and say that bill would protect consumers in
US dollar while enabling innovation in payments. Scout to DC
(24:43):
with Bloombers Kaylee Lyons. I saw a headline on the
terminal this morning that says the legislation has momentum from
one of those senators, does it.
Speaker 2 (24:53):
Yeah.
Speaker 16 (24:53):
This is an effort by Gillibrand and Lummis, who have
had cryptoinitiatives in the past. They've introduced in the past
much wider legislation to kind of set regulatory standards for
the industry as a whole. This is a much narrow effort,
and perhaps the narrowness of it is what could actually
get this across the finish line in the way that
other efforts have not. Essentially, what we're talking about here
(25:13):
is a framework for stable coins, as you mentioned, that
would ban algorithmic stable coins. Perhaps the example of an
algorithmic stable coin that looms largest in our head is
terry USD, which of course was supposed to be pegged
one for once and the dollar, but instead of being
backed by reserved to use smart contracts to try to
keep that peg, which worked until it did not and
then collapsed in fabulous fashion with forty billion dollars being
(25:35):
wiped out. So they want to avoid that in the future.
What this regulation instead would do is not allow those
and require one to one reserve requirements for stable coin issuers,
so making sure there actually is a dollar for every
one dollar stable coin that is out there, would set
some other guidelines as well as to the authorities that
federal and state regulators would have. And interestingly, it also
(25:55):
would establish the FDIC as being able to recover lost
assets these stable coins collapse. Obviously, again, that's probably a
product of what we have seen in the past. Will
this initiative actually move forward is kind of a question
that will be left to the Democratic Senator from Ohio
and chair of the Banking Committee, Shared Brown. He is
largely a cryptoskeptic, but in an interview this week he
(26:16):
did suggest that he could see the stable coin measure
attached to other measures that have gone through his committee,
including safe banking for marijuana companies in the clawbacks of
compensation for executives of collapse banks. So we'll see if
this initiative does move forward in the Senate. And I
would note as well that in the House, the Chair
of the Financial Services Committee, Patrick McHenry, along with the
ranking member Maxine Waters, are working on a stable coin
(26:37):
effort of their own.
Speaker 3 (26:38):
Yeah, I mean already meeting with Senate to Majority Leader
Chuck Schumer about this and Kayleie more broadly, how necessary
is is for the industry to have some sort of
robust set of rules of god rails. We've already been
speaking with the European Commissioner, for example, about how they've
been trying to enforce regulation, and at least it's clarity
of some sort.
Speaker 16 (27:00):
Clarity is what this industry is often asking for, Caroline,
and certainly this probably does not go as far as
the industry would like, but it would address us a
certain part of it. We've already heard from some industry
lobbying groups, like the Blockchain Associations that they are supportive
of the stable coin effort, and when I've talked to
people here in Washington, a lot of them have expressed
much more optimism that stable coin legislation is the most
(27:20):
likely thing to get through this Congress, versus more wide
sweeping legislation that would actually perhaps delineate what, for example,
the SEC would have control over versus the CFTC. That
has proven a lot more difficult to do. On Capitol Hill,
we have seen an effort get through the Financial Services
and Agricultural committees in the House that would delineate that
regulatory land, if you will, territory for those two different agencies,
(27:44):
but that has not moved forward further. And that really
is what would be required much more sweepingly to provide
clarity for the industry. And in the meantime, of course,
is you all probably know well based on your crypto
conversations here on Bloomberg Technology, the industry really sees that
at this point it's regulation buy horsemen, and it may
stay that way. Intel Congress actually moves forward more substantially.
Speaker 3 (28:04):
Katie Lyon's just so thorough with the analysis and getting
us up to speed. We thank you so much over
there in Washington. Meanwhile, well, let's just talk about the
SEC a little bit more. It's blocked third party messaging
apps and texts from employees work mobile phones. Now it's
bringing its own practices closer to the standards it's enforcing
for the industry, and that includes what'sapp and I Message. Now,
(28:24):
the SEC says it will quote lower risk that their systems.
Speaker 6 (28:27):
Could be compromised and enhance record keeping. Interesting one head.
Speaker 5 (28:32):
Yeah, let's get to another story out of Europe.
Speaker 4 (28:34):
The CEO of Atos, which has been struggling with tumbling
shares and a wall of debt, is confident that the
French IT company will be say CEO Paul Seller, spoke
in an exclusive interview with Bloomberg's Caroline Connen in Paris.
Speaker 5 (28:49):
Have listened to this.
Speaker 13 (28:51):
We are actually working with our creditors, both our banks
and our bondholders for a solution to our high level
of debt, and the maturities are coming due in the
next eighteen months and the dialogue is very very positive.
We're operating under the consoliation, as you have mentioned, is
like a mediator is helping through those discussions, and I
(29:16):
do believe that everybody is aligned. In fact, we recently
had secured some liquidity from those same bondholders and banks,
again an indication.
Speaker 2 (29:28):
That everybody is really aligned to find a solution.
Speaker 14 (29:31):
So what else could be part of the proposal apart
from this group of bondholders. Are we going to see,
for example, some asset disposal announced before the end of
next week. Is that a possibility or do you totally
exclude this.
Speaker 13 (29:47):
I think what we have presented is a comprehensive plan
that included all the assets of ATOS. Now we're going
to have to see what proposals are going to come through.
Some of them will just keep the whole the whole
of the company together. One of those proposal is likely
to come from one point, one of our largest shareholders,
(30:08):
and others will come in from our bondholders who seem
to also be interested in keeping the whole company. But
we can't just really ago any potential proposal that may
come in and may entail a different mix of ideas
such as asset disposal or not.
Speaker 14 (30:24):
Will this whole pen be able to save Atos?
Speaker 13 (30:28):
Actually ATOS is a great company. As I mentioned to you,
it's just really is going to be you know, I
do believe that will come up with a plan and
the company will succeed long term, So we'll be saved.
Speaker 8 (30:39):
It will be saved.
Speaker 6 (30:41):
Carolyn Conan speaking with the h CEO called Sally.
Speaker 3 (30:44):
Now coming up, we're going to be joined my Meno
Ventures partner Matt Murphy on the firm's new playbook for
AI applications.
Speaker 13 (30:51):
Or on that.
Speaker 6 (30:52):
Next, this is Blue Big Technology.
Speaker 3 (31:07):
Now it's today's VC Spotlight, and we're going to be
taking a look at some of the winning strategies the
formulas being used by early AI native enterprise companies, because
that's the focus of Meno ventures latest AI paybook.
Speaker 6 (31:19):
Here to discuss. This is Meno Ventures partner Matt Murphy,
and you've put out.
Speaker 3 (31:22):
Basically, there's seven Golden rules for generative AI apps. So
this isn't the foundational models, but this is the applications
which can be built upon these models that can be
then used cross industry or across sales or marketing. What
have you learned about the similarities some of these breakout
successes we've already seen.
Speaker 17 (31:40):
Sure, yeah, so I think basically this is the fastest
innovation cycle we've seen across many like mobile, cloud, et cetera.
And so what really has to happen to create the
foundation for application innovators to move as quickly as they
want to as you need the infrastructure side to be
built out. So you've got kind of the brain, the
(32:01):
heart and soul and something like anthropic and then a
lot of surrounding tooling to get data into the model,
such as an unstructured or a clean lab or pine
cone which kind of help you curate and get data
into the model. So that kind of is well underway,
and we feel like we're at a kind of tipping
point where the infrastructure stack is pretty well solidified and
(32:21):
now we're really going to see a ten year innovation
cycle around applications that's going to move faster and faster,
and now that that tooling infrastructure is in place.
Speaker 1 (32:29):
So what we really took a look.
Speaker 17 (32:30):
At in this report is what are some of the
early breakout applications, what have they done differently? And so
we came up with the seven Golden rules. So for example,
things like having an almost infinite content loop. If you
think about a lot of applications, before you basically had
to have a designer, design creative for each potential campaign.
Speaker 1 (32:53):
You would then test that, take it back, iterate.
Speaker 17 (32:56):
The way generative AI works is it can make end
different campaigns and actually kind of close the loop and
have this constant feedback system. So one of the companies
that does that really well is a company called Typeface,
which is the former CTO of Adobe and based recreating
the Adobe Creative.
Speaker 1 (33:13):
Cloud with generative AI. So that's one very concrete example that's.
Speaker 3 (33:18):
Obviously one of your portfolio companies start to jump in there.
But what's so interesting is what sets that particular business
apart from others that you're pitched. I mean you also say, look,
you want to see within these AI apps target work
that is high value, high volume, or facing labor shortages.
So basically, where is AI going to have the biggest impact.
(33:40):
What are some of the winning formulas there?
Speaker 1 (33:43):
Yeah, sure, so what you want to do? Basically, there's
two ways that an a generator model can work.
Speaker 17 (33:48):
It can work as a kind of an assistant, call
that a copilot, where it makes a worker smarter, better,
more efficient at their job. And then sometimes it'll actually
be able to replace that job and allow a work
to do something else, like a higher value, higher skilled activity.
Things like customer service are a great example of that,
and you kind of look for these pattern based, high
(34:09):
volume workflows. On the other end of the spectrum, there
are these high value, lower maybe amount of people workflows
like let's say a paralegal who spends all this time
digging through documents and matching terms and things like that,
when they could really do the analytic work if a
system built that for them. So that's kind of what's
being reimagined here with general AI is how do you
(34:32):
kind of take the bulk work and allow workers to
do more higher value add activities.
Speaker 4 (34:37):
On top of that, Matt, I'd like to discuss how
backward or forward looking your report is and how crowded
the field of activity is in this space, I would
say that. Caroline and I talk about companies and platforms
targeting developers and apps quite regularly, an example being Salesforce.
Speaker 5 (34:57):
And the app Exchange.
Speaker 4 (34:58):
Right, they have brought in generative AI layer to their
existing products.
Speaker 5 (35:03):
Just how busy is it right now in what you
see happening?
Speaker 1 (35:07):
Yeah, I mean it's extremely busy, right.
Speaker 17 (35:09):
I mean so if you look even anecdotally at our
portfolio over fifty companies early half of last year, maybe
twenty percent of companies were doing something with the generative AI.
Now it's pushing up against one hundred percent, and I
think that's a good proxy for what's going on in
the market. If you're an existing software company, it's not
doing something with generative AI, you're falling behind.
Speaker 1 (35:29):
So that's one wave. But frankly, the.
Speaker 17 (35:30):
Wave that we're most excited about is people kind of
rebuilding from the get go now with new capabilities of
generative AI, like a couple that I mentioned, Because the
most creative and innovative way to disrupt applications is to
kind of start with a founding team that has the
DNA around AI and thinks about how to build the
application from the bottoms up.
Speaker 1 (35:50):
That way, whenever you bolt something on later.
Speaker 17 (35:54):
It's beneficial, it's additive, it's going to be great for
Salesforce and other companies. But when a new company comes
in and says, hey, you could just this application shouldn't
even exist without generative AI.
Speaker 1 (36:04):
I can give you an example if you'd like.
Speaker 17 (36:06):
For example, take a company like Elios, which is doing
kind of a generative AI for a therapist conversation, so
you can listen to the conversation, use your own model
to kind of parse that and give doctor notes as
well as a potential diagnosis, and use generat AI to
package that up and curate the content that comes.
Speaker 4 (36:26):
Out of that.
Speaker 17 (36:27):
These are kind of capabilities that a model was never
able to process before, nor synthesize it down as something
as precise and important as a diagnosis.
Speaker 4 (36:37):
Matt, one of your bullets is build where incumbents aren't, can't,
or won't. But you know, in the history of Silicon
Valley often something gets built because a founder realizes there's
a problem because they were at another tech company where
they were frustrated by something. Do you have any sense
that the end markets actually know what their use cases
are yet how they're supposed to be using generative AI
(36:59):
in whatever it is the business does well.
Speaker 17 (37:02):
I think that's kind of my point is, like, I
think everyone knows that generative AI is a great writer.
It can take all the content you have, synthesize it
down and help people get through it really quickly. If
you've got a graph or a set of output, you
can distill all that down and it makes it so
much more effective for the user to consume the output.
Speaker 1 (37:20):
Of your application. But that's kind of table stakes.
Speaker 17 (37:23):
The things that again we're most interested in is how
are you using that technology to the make the application
completely different than what the incumbent has done and in
the past.
Speaker 1 (37:35):
And that's really the opportunity lies here.
Speaker 17 (37:38):
Seeing a bunch of examples of that in the legal
vertical that's a fast mower out of the gate and
areas like that. I already mentioned customer service. So it's
just different when you say let's change the entire workflow
versus bolt on the capability after.
Speaker 4 (37:52):
The fact Menlovench has partner Matt Murphy. Thank you very much, Caroline.
Speaker 3 (37:58):
Yeah, let's have a quick check on talking to he
first up to Shiba is seeking to cut five thousand jobs,
or roughly ten percent of its head count in Japan.
Speaker 6 (38:05):
That's what the NIK is currently reporting now. The move could.
Speaker 3 (38:08):
Initiate one hu Jupan's biggest rounds of staff reductions this
year in a country that has some of the world's
strictest worker protection laws. Plus, Apple is wearing a possibility
of making some of its gadgets in Indonesia now, the
iPhone maker has been exploring production bases beyond its longtime
stronghold of China. Of course, that to minimize geopolitical risks
as tensions they rise between the world's two biggest superpowers.
Speaker 6 (38:30):
And business software start up Rippling.
Speaker 3 (38:32):
Well, it's a reporter that's in talks to raise new
funding and evaluation between thirteen and fourteen billion dollars and
the company we understand is planning to raise about five
hundred million in a deal. According to sources, the talks
with investors are ongoing, with plans to finalize terms within
a few weeks. It might be said that Rippling so
far has denied some of those reports. So the Bloomberg
(38:58):
NEF Summit, it's in full swing here in New York,
convenient leaders and energy, industry, transport, technology, finance, and government
to discuss just how to shape a cleaner and more
competitive future. I'm pleased to say we're speaking to a
person who's doing just that. Cuna, your CEO, Spante Fresh
Office panel from the summit and Claude. What's so interesting
is you are providing the technology, the filters, the ability
(39:21):
for companies such as say manufacturing makers to carbon capture.
Speaker 8 (39:27):
How well.
Speaker 18 (39:28):
We kind of focus on a problem that we stated
the one hundred and thirty five years ago by fellow
called Venti Ernius, and we took the name Vante similar
to Tesla Fuish on the EV. So we're unicorn and
focusing on carbon management by providing solution to avoid SEE
two going out in the atmosphere in the first place,
(39:49):
industrial factory, cement pulp on paper plants, or even removing
the SU two from the atmosphere that's sorry above the ground.
So we are working in that case with the company
called clim Works and we provide the filters inside the
contactor that they have to collect the C two from
the atmosphere.
Speaker 3 (40:07):
You built a lot of partnerships, You're working with a
lot of companies and emitter is how long a timeframe
is it to build such you know, to manufacture to
actually get this going when you know that one of
your clients wants indeed.
Speaker 18 (40:20):
Action this so for a legacy is that we're sixteen
years in research, in developing the technology, the product, product,
proving out in the market, and raising all these partnership
to get there. We've raised five hundred million dollars to
get to the point where we are, and we're currently
building a factory to make the filters that we'll be
able to equip the equivalent of ten project of a
(40:41):
million ton. The world needs to get to ten thousand
plant of a million ton in the next thirty years.
Speaker 2 (40:47):
Wow.
Speaker 18 (40:47):
So this is factory number one for us, and we're
almost there in terms of building up the capacity to
deliver projects. So now when you look at the specific
project with one a meter, normally it takes about almost
two years of discussions studies to evaluate how we're going
to integrate the capture project into let's say a cement
(41:08):
factory or a pulp and paper plant, and then it
takes two years to construct. So these projects are to
take a certain amount of time to deploy, and imagine,
you know, we need to deploy at the rate of
two capture plant every week for the next thirty.
Speaker 4 (41:21):
Years clause your twenty twenty two Series E three hundred
and eighty million dollars led by Chevron's venture arm I
remember twenty twenty one, twenty twenty two, there was a
lot of energy, pardon the expression behind your industry and
financial backing. Had things slowed down in terms of corporate
interest and public commitment to what you're trying to do, well,
(41:42):
you have?
Speaker 18 (41:43):
Your question is two fold one. The corporate commitment has
been there and it's growing as well. I think the
support we got from the audio gas industry and primarily
led by Chevron, is instrumental in us being here today
be able to talk about about management. But you know
what's missing now to grow the business at the scale
(42:05):
that needs to be done is we need the private
equity infrastructure funds to come to play, and so far
they never come to the value of debt of early
start startup companies and help them to deploy. So this
is something that we're working on these days to bring
the two together because it's the sum of the financial
sector plus the corporate that will make this thing work. Now,
(42:28):
from a consumer point of view or the public acceptance,
I think that it's a slow process. And the analogy
I can give you is we've been throwing see you
two in the atmosphere freely for the last one hundred
years with no consequences. In the minds of people, the
analogy is the waste management. At the same time you
know you're rubbish at home. The waste management somebody collects
(42:52):
and transport and recycle and store your rubbish. That's because
it smells and you can see it. You cannot see
and smell Coe two. So it's very difficult for people
to associate that the common management industry needs to exist.
And the price of collecting your rubbish is about one
hundred and fifty dollars per per ton of SE two equivalent.
Speaker 6 (43:14):
So Claude, we will share more time. Claude Latuna, your CEO.
A savante that does it for this edition of BLOEMG
Technology
From Mahard of Where Innovation, Money and Power.
Speaker 2 (00:04):
Collie in Silicon Vallet NBN. This is Bloomberg Technology with
Caroline Hyde and Ed Love Love.
Speaker 3 (00:25):
I'm Caroline Hyde at Bloomberg's world headquarters in New York.
Speaker 4 (00:27):
And I'm Ed Lovedlow in San Francisco. This is Bloomberg
Technology coming up.
Speaker 3 (00:31):
Tesla asked its investors to approve Musk's fifty six billion
dollar pay package. Again, we discussed the vote on moving
to Texas and its criticism of the Delaware court that
voided Musk's twenty eighteen award.
Speaker 4 (00:44):
Chip making equipment orders dive at ASML as Europe's most
valuable company faces a pullback from its Taiwanese and South
Korean customers.
Speaker 5 (00:52):
Are chip stockpiles back.
Speaker 3 (00:55):
And meanwhile we bring you a key conversation with the
CEO of debt laden Autos as the French IT company
seeks to save itself. That and so much more coming
up throughout this hour. But let's get your cook check
on these markets. And I want to shine a light
and what's happening ultimately an the equity market, which pulls
back a little bit from where it had been. We're
seeing a little bit of caution, of course, as we
(01:15):
digest a more hawkish federal reserve, as we think about
where JA power is really steering us in terms of
number of cuts ubs, thinking it'll be two for this
year starting in maybe September.
Speaker 6 (01:23):
Nevertheless, we're seeing.
Speaker 3 (01:24):
Actually bob markets continuing to outperform, and not as much
as they were earlier. Red currently seeing a twenty year
yield just down by about two three basis points to
remember big auction coming ahead of that all important Beige
Book as well, and moment we're moving on and have
a look at what's happening in the world of crypto,
because Bitcoin has actually been well on the downside, even
as the US dollar is for once falling now after
six this is the first time in six days we've
(01:46):
actually seen the US dollar give up some of its
strength as we maybe just digest what has been, of
course an apparent slightly more hawkish shift, where we're looking
at a bitcoin currently off by two and a half
percent riskasset's still cautious out there are but what are
you watching?
Speaker 4 (01:58):
On the micro Tesla continues to dominate headlines and market moves.
We're down for a four straight session, that's the worst
run of declines since the beginning of this year, and
the stock is trading at its lowest level in almost
a year. And I don't think this is to do
with the two red headlines on the Bloomberg tumil. I
think the proxy revealing that investors will vote on that
(02:19):
original twenty eighteen pay package rejected by a court, and
the idea of incorporating in Texas. I don't think that's
the downward pressure. There's indigestion from the events of the
last four days, executive departures, layoffs, and Elon's comment about
going all in on ROBOTAXI, and I think a lot
of people are trying to understand what's happening, what is
(02:40):
the big picture and when does it happen. But the
stock's under a lot of pressure, while the talk from
Elon Musk on his own platform X is fighting talk.
Speaker 5 (02:48):
And I think we've got some pretty good guests to
go through that with.
Speaker 3 (02:51):
Yeah, let's talk about the fighting talk, let's talk about
the reaction throughout. Let's start the Bloomberg's Crow Todell, And
what's so interesting is ultimately coming out fighting to Delaware,
to the court, to the judge that said initially, this
twenty eighteen pay package is far too much and new
board are not doing enough to push back. But I'm
interested ased why the argument goes that it would cost
(03:13):
billions more to renegotiate a pay package rather than just
try and vote through the current one.
Speaker 7 (03:20):
Yeah, I do think it's interesting that the board sort
of you know, portrayed this as a nuisance, really this
idea that they would have to take on additional expense
that you know, the company accounted for having to set
up these options and set aside this this compensation for
(03:41):
musk and essentially would have to sort of, you know,
do it over again. It does also strike me just
from the language that was used in the filing that
it was sort of musky in and that Robin Denholm,
the chair of the company, you know, referred to this
idea of essentially that the court had taken away shareholder
or voice. It was kind of a freedom of speech
(04:02):
esque defense of this pay package. But of course, you know,
share you know, corporate governance critics are not going to
look on this very family, this idea of you know,
this this award being slapped down and the board just
going back to the world with the same plan.
Speaker 4 (04:19):
Craig, you've been reading the proxy for the last four
hours and thirty minutes.
Speaker 5 (04:26):
I know you have been at your desk doing that.
Speaker 4 (04:28):
There's some granular detail in it that Tesla explains a
randy compensation program and the idea of reincorporating in Texas
in parallel, and my read on it is that they
basically don't want to be accused of using the Texas
incorporation as leverage in this ongoing pay issue.
Speaker 7 (04:50):
Yeah, they want to kind of pair these two basically
get the shareholders backing again. You know, I guess make
the case really that shareholders, if they didn't already know
what went into this award, the Delaware court just you know,
brought to light a lot of these details, made clear
(05:12):
what was going on here and really sort of put
it back in the court of the shareholders and say
are you okay with this or aren't you? And of
course you know, we have you know, heard rumblings reported
on this idea that retail shareholders were really sort of
an uproar, you know, based on just at least the
(05:33):
volume of complaints about the way this was handled. Also
Tesla saying in the proxy that four of its ten
biggest institutional investors wrote to the company or you know,
somehow communicated that they were in support of this award.
So there is some reason to think that perhaps this
stands a chance of being approved, just as it was back.
Speaker 4 (05:55):
In twenty eighteen, it was a load of dents texts
to go through testas down a percentage point. That way
of sessions in moos created ow great work, Thank you
very much. Just keep a conversation going with Pierre Faragu,
who's head of Tech Infrastructure research at New Street Research.
Just give me one sentence, what is the story of
Tesla right now? Just one sentence.
Speaker 8 (06:19):
I'm not very good at doing one sentence, you know that.
Speaker 9 (06:23):
So the one sentence would be Testa is a car
manufacturer first and for the seable future, they need to
continue to be successful at manufacturing cars, and that's a
platform for them to do additional amazing things.
Speaker 8 (06:40):
You have a donomous driving.
Speaker 9 (06:42):
They are the most advanced player in the world on
supervised autonomous driving, so your car driving by itself under
your supervision. They're making exceptional progress. There is a very
long term, like over the horizon goal host of being
able to do Robert. It's a much more still challenging
(07:03):
thing to get to very uncertain so and there's also
the opportunity to develop human and humanoid robots on the
same technology platform as FIG And these things will take
us whichever way you look at it.
Speaker 8 (07:21):
And we know Elon Musk is very impatient, wants to
accelerate that momentum, but it's going to take us.
Speaker 9 (07:28):
And in the meantime, we also need Tesla to see
that Tesla is still going to be a very successful
g manufacturers being able over time to stabilize pricing, to
continue to gain share with the product they have in
the market today, and then in the next two three
years to be able to ramp a large volume, lower
price platform to continue to grow sustainably, and all that
(07:52):
should deliver revenue growth and margin expansion.
Speaker 8 (07:55):
And that's really like the near term and the longer
term is yes. But and robotaxes.
Speaker 4 (08:02):
It was a loaded question, but you did give me
one sentence just without full stops of punctuation.
Speaker 5 (08:07):
That's okay.
Speaker 4 (08:08):
The reason I ask it is I'm trying to understand
in the moment the downward pressure on the stock, and
I don't think it's got much to do with the
proxy So of all the headlines of the last four days,
which was of most interest to ups.
Speaker 9 (08:27):
Of the last few days, the most important headlines have heard, well,
you know, the most important thing of the last few
days was actually to digest swear the headlines of last week.
Speaker 8 (08:39):
And so we've heard, like, we've read a rota's report
mode to.
Speaker 9 (08:43):
Being canceled and things like that, and we've had like
you know, ins and indications from Milan Musk and from
this last chief designer that the modity is probably not cancered.
And so the most important breakthrough earlier this week was
the understanding that probably what's happening to that Tesla is
(09:04):
that Tesla is going to prioritize designing developing the robot
taxi in Austin for now, because anyway, the model too
will need to wait for Mexico to ramp in millions
of units, and Mexico is still two three years away,
and so in the meantime, producing only a quarter of
(09:26):
a million Model twos in Austin doesn't really help.
Speaker 8 (09:29):
It's it's like a very very little help.
Speaker 9 (09:32):
And so my educated guess is that Elan understood that
and thought, okay, let's go all in on robot taxi.
Let's get a platform out, let's have a small flet
on which we can try out tests, improve the technology,
and then let's get back to the model too a
bit later. So hopefully next week when the company reports,
we get a bit more lightly on that. So that's
(09:54):
really the big thing of the last forty eight.
Speaker 3 (09:57):
I like the fact that you give us your reasoning,
you interpretation, pr give us your reasoning on whether the
stock should be down by a third so far this year.
Speaker 9 (10:08):
Yes, so if you look at the potential of the
company in the long run, that's a nonsense.
Speaker 8 (10:15):
Tesla makes electric cards.
Speaker 9 (10:18):
Electric cars remain I think the future of cards and
nobody on us can make electric cars as good as
Tesla and as cost efficiently. And if anything, this gap
is widening. I just took delivery of my new medal three,
the high Lander. Like the podcast Testa is making it
doing grades and very cost efficient.
Speaker 8 (10:39):
Cards is still mind blowing.
Speaker 9 (10:40):
So I think it's still a very powerful company in
the stock is vastly undervalued if you look at it
in the long run. In terms of short term developments,
I have a lot of sympathy for where the stock
is going has been going in the last three months
because Tesla has been hitting a wall in terms of growth,
has been forced to regius pricing lots, you know, like
(11:01):
finding themselves in a situation where they were raising increasing
productions faster than demon could could increase. So they have
to reset the bar and it's not going to happen
over a few weeks. We still have a lot of
inventories ri seeing are still low. Demand is still not
enough to comfortably absorb the production today, so we will
need some time, you know, to get the start back
(11:23):
on track, and of course the stock correcting to that
is the way the market works, and yes, I have
sympathy for that. TESTA is at a low point, is
between two gross trajectories, continues to work on you know,
long terim moonshots like Theroid and a robotaxi, and in
the meantime, like the next couple of years are going
(11:43):
to be years of recovery.
Speaker 8 (11:44):
So ahead of that, seeing the stock quickening makes sense
to me, even.
Speaker 9 (11:47):
If I would disagree with that blatantly with evaluation implied,
if she will get it over like a three to
five year horizon, yeah.
Speaker 3 (11:55):
Giving us short term and the long term, we thank you,
Head of Tech infrastructures, research of a new street research.
Speaker 6 (12:00):
Some of the longest sentences in the house, but we
love it.
Speaker 3 (12:02):
Meanwhile, coming up tech earnings, they're upon us will dive
deeper into what to expect and the current state of
tech market's more broadly aired.
Speaker 6 (12:09):
What are you looking at ahead of that conversation?
Speaker 4 (12:12):
Philadelphia Semiconductor Index or SOCKS twenty seven names in the red,
three in the green.
Speaker 5 (12:17):
Biggest drop on ASML.
Speaker 4 (12:19):
The story chip contract manufacturers are not ordering chip making equipment.
Speaker 5 (12:24):
What does that tell us? We'll explain next. This is Bloomberg.
Speaker 3 (12:27):
Technology ASML chip equipment maker, having its worst day since
June twenty twenty two. Now put it into context, this
is a company that's up about twenty five percent so
(12:48):
far this year. Nevertheless, we see a pullback because it's
earnings really disappoint on the quarter that we've just seen
in terms of revenue. But also pointing to this quarter
we're already in saying it's going to be low where
the market had anticipated. Why, Well, we're seeing TSMC Samsung
pull back on perhaps some of the orders that we
thought for some of their overall chip equipment.
Speaker 6 (13:07):
Now, this still shows a chip sector that's.
Speaker 3 (13:09):
In recovery when you're thinking of our own purchases of
electronic goods, and they're like, but what of the AI
revolution ed? This is what's so interesting is the fact
that actually their number one market, it's China. Basically half
of their revenue is coming from China at the moment,
even though we see those sanctions, those curbs on such
very high EUV chip equipment going to China, they can't
get their hands on that, but actually they're still relatively
(13:31):
strong orders for the lower elements of where that chip
equipment has been going.
Speaker 4 (13:36):
But notably, look their own revenues that China historically is
big market. The story of the anxiety is about not China, TSMC, Taiwan,
Samsung in South Korea, all this CAPEX commitment, but they're
not fronting up in the short term. The drop was
called on quarter sixty one percent for EUV lithography. Basically,
(13:57):
they ain't buying machines that make chips. Why let's dig
deeper into these markets tech earning seasons also around the
corner epek Oscar Diskay, a senior market analyst over at
Swiss quote. You know, there's the headlines governments in Europe
and the United States right in big checks, saying come
and build chip factories.
Speaker 5 (14:15):
It's going to be great.
Speaker 4 (14:16):
And Samsung and TSMC gave us better capex outlooks for
this year, and then we've got ASML and things aren't
going so rosy.
Speaker 5 (14:23):
What was your read on that?
Speaker 10 (14:25):
Well, Actually, ASML Earning is really disappointed this morning in
Europe and kind of raised a couple of ibros regarding
the sustainability of the demand growth from chip makers and
the sustainability.
Speaker 2 (14:38):
Of the AI.
Speaker 10 (14:39):
Really now, it's important to note that ASML said that
the second half of this year is going to see
a rebound and they actually kept their full year outlook unchanged,
but obviously because now we are used to have fantastic
results from chip makers while the ASML's disappointment. Disappointment has
been a sour taste in investors well mouth this morning.
(15:01):
And I'm actually we actually think that at some point
reasonably the growth and growth expectations for chip makers will
be leveling out, and it's just to see if this
is the quarter that we will see these expectations slow down,
and there is a possibility that we do see them
slow down, and that's going to be able to trigger
(15:22):
actually a sizeable downside correction and profit taking. But more
broadly regarding AI, well, ASMA also said that they expect
AI to continue to contribute to their revenues, and we
do also expect AI really to continue, maybe not in
the same way because we expect some changes within the
AI segments. So what I mean by that is we
(15:44):
saw so far the first phase, what we call the
first phase of the AI really benefit to companies, to
chip makers, data centers, cloud businesses, all these companies that
do provide AI tools other companies. But we are now
thinking that there will be second phase in this AI
really which is expected to benefit two companies that actually
(16:05):
invest in massively in AI technologies and tools and which
should shortly start well seeing the return on their AI investments.
Speaker 6 (16:14):
So I think that even though we see.
Speaker 10 (16:16):
Some disappointment in terms of chip maker earnings Squart, while
the AI really is not ready to end, you.
Speaker 3 (16:23):
Pack brun that out to the rest of earning season
for us, because well, there's a lot of optimism that
AI is already going to be helping with costs for example.
Speaker 10 (16:31):
Well, actually, the AI has been the major talking point
and the expectations are quite high.
Speaker 5 (16:37):
Mind you.
Speaker 10 (16:37):
I mean looking at the magnificent seven socks expectations around
learning's growth of around forty percent for the first quarter.
That's huge number. That's still down from fifty five percent
printed a quarter earlier. But if we single out stocks
like Tesla and Apple who have been in trouble in
the first quarter, will the expectation of earnings growth goes.
Speaker 6 (16:59):
All the way up to eighty percent.
Speaker 10 (17:01):
So now we're talking about a handful of AI sucks,
namely Nvidia, Microsoft, but also Google, and we're sold by
Facebook and Amazon. So I think that there is a
huge optimism out there. But what we will be really
interested in is who within this AI segment is going
to be profiting from the AI developments, whether it's going
(17:22):
to be the provider of AI tools or are we
going to shift towards well the user of the AI tools.
Speaker 6 (17:28):
IMPAC great to have your voice in the show. Thank you.
Speaker 3 (17:30):
Ipek Oscar Deshka, Senior market analyst, Swiss quote giving us
the context. JP Morgan, Chase c Jamie Dinan. He makes
no secret of his firm than it is all in
on artificial intelligence. Now the head of the world's biggest bank,
when he's laying out his vision for the future money
in this AI world.
Speaker 6 (17:49):
He spoke with Bloomberg Original's.
Speaker 3 (17:50):
Host Emily Chang about that and so much more in
the premiere episode of The Circuits second season, particul Listen.
Speaker 2 (17:58):
The best needs be prepared for any business.
Speaker 11 (18:01):
I think when you think about really think about things
that can go terribly wrong, can you survive them? You know,
it could be technology, it could be government regulations, it
could be it could be the literally the weather. If
you're a restaurant, you know that might close you down.
If you have if you lose this week's business, you're
out of business. Get enough cash. So you should think
all that through.
Speaker 12 (18:19):
Bill Gates once said banking is necessary, banks are not
to what extent could AI or fintech replace traditional banks.
Speaker 11 (18:28):
So I think, first of all, I remember him saying
banks of dinosaurs. I spoke to about it in nineteen
ninety seven, and obviously he was dead roll. We probably
agree to that, but he's not wrong. The technology changes everything.
And if anyone is complacent or arrogant or think that
because you have a big position to day, you get
a big position tomorrow, that's a mistake. But the end
of this fine what is banking. Someone's going to have
(18:48):
to hold the money. Someone's got to move the money,
someone's got to raise the money, someone's got.
Speaker 2 (18:53):
To do research, you know, around money.
Speaker 11 (18:55):
Those services will still be around, and you know, hopefully
we're doing it and using a lot have to do
a better job at it. But I've always thought it's
very possible that some tech thing, you know, distant intermediates
a piece of that. And I've been writing about you know,
big tech going to our business. We've got fintech. We
also have big tech, and they will embed payment systems
in there. Some we're going to white label banks kind
(19:16):
of what Apple did.
Speaker 13 (19:17):
Uh.
Speaker 2 (19:18):
You know, they have the right to do that. I'm
not against that.
Speaker 11 (19:20):
I would be against unfair use of their position to
dominus in a business.
Speaker 12 (19:25):
Well, Apple is going deeper into financial services.
Speaker 6 (19:27):
Do you worry about the bank of Apple.
Speaker 11 (19:29):
Well, we'll get to compete, so they have a tough competitor.
But you know they hold money, move money. Yeah, they're
a form of a competitor. You know, we also partner
with them, but I'm very used to partnering and competing
with lots of people.
Speaker 12 (19:43):
Existential threat.
Speaker 2 (19:45):
I don't think it's an existential threat. But I think
if we were complacent about it.
Speaker 4 (19:49):
Yes, that was JP Morgan, Chase CEO, Jamie Diamond, and
right here on set, this is being back in the
regional so it's Emily Chang. Jamie Diamond is kind of
one of the most upset about people like high flying
executive in the person yep, the circuit series too.
Speaker 5 (20:06):
That's kind of what's cool.
Speaker 4 (20:07):
About it is you get people in a chair but
being themselves. How did you do it this time around?
Speaker 14 (20:14):
Oh boy?
Speaker 12 (20:14):
And this was my first time meeting him. You know,
it was all about London, right in London, and he
was just there for a tech conference really quick. It
was all about just making the most of every single minute,
the handshake, the walk to the interview room, the chit
chat that you know before we actually got quote unquote
on camera for you know, the formal sit down interview,
and you know, we talked about how many days he's
on the road a year, one hundred and twenty days.
Speaker 6 (20:35):
We talked about childhood, family. I asked, you know, how
do you do it? He was like, what do you mean,
how do you juggle it all?
Speaker 12 (20:41):
And I think he kind of appreciated that question because
it's you know, you normally ask that to a woman,
and you don't ask that to someone like date Jamie Dimond,
and he was like, look, I don't I don't socialize,
I don't go on red carpets. It's it's work and
family and that's what it is, and family actually comes first.
And so that's kind of where we started, and we
tried to open up from there.
Speaker 3 (21:00):
You then, of course peel away not only about his
family and keutles for continuing to ask that of both
men and women, but ultimately about how AI is changing
his business. You're going to be thinking about AI for
the rest of the season as well.
Speaker 6 (21:12):
I'm pretty sure AI is a.
Speaker 12 (21:14):
Huge part of the season, as it is a huge
part of your show. I mean, it's a huge part
of our world. We can't avoid it. One of the
interesting questions I had for him is, you know, Chat JPM,
will something like that exist in the future where we
could ask, you know, I've got thirty years, what should
I do with my money? And he said, essentially yes,
it's already doing that. We've got AI embedded and everything.
It's gonna learn more and more about you. Will I
(21:37):
be able to say to Chat JPM. I want to
get rich quick, and he was like, I hope it
tells you that you're crazy, because that's just.
Speaker 6 (21:43):
Not possible.
Speaker 5 (21:45):
Really quickly. What can we expect this season?
Speaker 8 (21:48):
Oh?
Speaker 12 (21:50):
Well, I hope you love it. We're traveling. We're taking
you to Latin America, going on Netflix sets. That's sort
of the next leg of their global expansion. After South Korea,
we go to see Mary Bara and Troy. We spend
a lot of time with her and really get to
know her behind the scenes. Palmer Lucky, the founder of Oculus,
and of course Anderild now making drones and satellites, AI
(22:10):
and warfare.
Speaker 6 (22:11):
I hope you love it, sure.
Speaker 5 (22:13):
Well, Bloomberg Original's host Emily Change.
Speaker 4 (22:15):
You can catch the full first episode tonight on Bloomberg
six pm Eastern.
Speaker 6 (22:26):
Welcome back to Bloombog Technology. I'm Caroline Hyde in New.
Speaker 5 (22:28):
York and I'm as our Vote in San Francisco.
Speaker 4 (22:31):
A very quick check in on the markets and when
it comes to publicly traded technology names. I'm taking a
look at Tesla sevent tens four percent. It's paired its decline,
but we're still down for a fourth straight session. We
talked about the reasons why earlier in the show with
Pierre Ferugu it's a sock that's below five hundred billion
dollars now in market cap, and you know, I'm looking
(22:53):
for stories. I'm looking for clear downward direction in the market.
Tesla was one name that contributes to that. Bitcoins so
really interesting. Actually during the course of this show, Carrow,
you highlighted it earlier. But we're now down nearer to
sixty thousand US dollars per token on bitcoin, a drop
of four percent in the session of an asset that
trades twenty four to seven on the Bloomberg terminal. There's
(23:15):
a lot of writing about the real world use case
ATMs in Latin America becoming more mainstay, but also the
industry bracing for the harving loads of people saying they're ready.
But if you look at some of the technology related
stocks linked to crypto, those are also seeing some downward pressure.
Speaker 5 (23:32):
And we other pieces of news from that industry too.
Speaker 3 (23:34):
We do, and let's dive in because Gray Scale Investment
CEO Michael the Sonosheine. He says that the market for
US spot bitcoin ETFs, still relatively new, hasn't seen.
Speaker 6 (23:43):
Wide scale institutional adoption at least.
Speaker 3 (23:45):
In an exclusive conversation with blouobg TV, the CEO also
spoke about the SEC's approval of bitcoin ETFs and the
long road to regulatory approval.
Speaker 6 (23:53):
Is what we have to say.
Speaker 15 (23:55):
Even though they've been in market now for three and
a half months, we still do not have listed option
unspot bitcoin et apps. This is a really important feature
that investors want and they deserve. This can help investors
to manage their positions, manage risk. Ultimately, I do believe
that the SEC should be approving these so that they're
once again not in a position to be treating spot
(24:17):
bitcoin et apps disparately from you know, bitcoin futures based UTPs.
Speaker 4 (24:23):
Let's stick with regulation. Moving on to stable coins now.
I'm to push in the House and the Senate to
pass such legislation as soon as next month. Senators Loomis
and Gillibrand are proposing a measure that would ban algorithmic
stable coins and say that bill would protect consumers in
US dollar while enabling innovation in payments. Scout to DC
(24:43):
with Bloombers Kaylee Lyons. I saw a headline on the
terminal this morning that says the legislation has momentum from
one of those senators, does it.
Speaker 2 (24:53):
Yeah.
Speaker 16 (24:53):
This is an effort by Gillibrand and Lummis, who have
had cryptoinitiatives in the past. They've introduced in the past
much wider legislation to kind of set regulatory standards for
the industry as a whole. This is a much narrow effort,
and perhaps the narrowness of it is what could actually
get this across the finish line in the way that
other efforts have not. Essentially, what we're talking about here
(25:13):
is a framework for stable coins, as you mentioned, that
would ban algorithmic stable coins. Perhaps the example of an
algorithmic stable coin that looms largest in our head is
terry USD, which of course was supposed to be pegged
one for once and the dollar, but instead of being
backed by reserved to use smart contracts to try to
keep that peg, which worked until it did not and
then collapsed in fabulous fashion with forty billion dollars being
(25:35):
wiped out. So they want to avoid that in the future.
What this regulation instead would do is not allow those
and require one to one reserve requirements for stable coin issuers,
so making sure there actually is a dollar for every
one dollar stable coin that is out there, would set
some other guidelines as well as to the authorities that
federal and state regulators would have. And interestingly, it also
(25:55):
would establish the FDIC as being able to recover lost
assets these stable coins collapse. Obviously, again, that's probably a
product of what we have seen in the past. Will
this initiative actually move forward is kind of a question
that will be left to the Democratic Senator from Ohio
and chair of the Banking Committee, Shared Brown. He is
largely a cryptoskeptic, but in an interview this week he
(26:16):
did suggest that he could see the stable coin measure
attached to other measures that have gone through his committee,
including safe banking for marijuana companies in the clawbacks of
compensation for executives of collapse banks. So we'll see if
this initiative does move forward in the Senate. And I
would note as well that in the House, the Chair
of the Financial Services Committee, Patrick McHenry, along with the
ranking member Maxine Waters, are working on a stable coin
(26:37):
effort of their own.
Speaker 3 (26:38):
Yeah, I mean already meeting with Senate to Majority Leader
Chuck Schumer about this and Kayleie more broadly, how necessary
is is for the industry to have some sort of
robust set of rules of god rails. We've already been
speaking with the European Commissioner, for example, about how they've
been trying to enforce regulation, and at least it's clarity
of some sort.
Speaker 16 (27:00):
Clarity is what this industry is often asking for, Caroline,
and certainly this probably does not go as far as
the industry would like, but it would address us a
certain part of it. We've already heard from some industry
lobbying groups, like the Blockchain Associations that they are supportive
of the stable coin effort, and when I've talked to
people here in Washington, a lot of them have expressed
much more optimism that stable coin legislation is the most
(27:20):
likely thing to get through this Congress, versus more wide
sweeping legislation that would actually perhaps delineate what, for example,
the SEC would have control over versus the CFTC. That
has proven a lot more difficult to do. On Capitol Hill,
we have seen an effort get through the Financial Services
and Agricultural committees in the House that would delineate that
regulatory land, if you will, territory for those two different agencies,
(27:44):
but that has not moved forward further. And that really
is what would be required much more sweepingly to provide
clarity for the industry. And in the meantime, of course,
is you all probably know well based on your crypto
conversations here on Bloomberg Technology, the industry really sees that
at this point it's regulation buy horsemen, and it may
stay that way. Intel Congress actually moves forward more substantially.
Speaker 3 (28:04):
Katie Lyon's just so thorough with the analysis and getting
us up to speed. We thank you so much over
there in Washington. Meanwhile, well, let's just talk about the
SEC a little bit more. It's blocked third party messaging
apps and texts from employees work mobile phones. Now it's
bringing its own practices closer to the standards it's enforcing
for the industry, and that includes what'sapp and I Message. Now,
(28:24):
the SEC says it will quote lower risk that their systems.
Speaker 6 (28:27):
Could be compromised and enhance record keeping. Interesting one head.
Speaker 5 (28:32):
Yeah, let's get to another story out of Europe.
Speaker 4 (28:34):
The CEO of Atos, which has been struggling with tumbling
shares and a wall of debt, is confident that the
French IT company will be say CEO Paul Seller, spoke
in an exclusive interview with Bloomberg's Caroline Connen in Paris.
Speaker 5 (28:49):
Have listened to this.
Speaker 13 (28:51):
We are actually working with our creditors, both our banks
and our bondholders for a solution to our high level
of debt, and the maturities are coming due in the
next eighteen months and the dialogue is very very positive.
We're operating under the consoliation, as you have mentioned, is
like a mediator is helping through those discussions, and I
(29:16):
do believe that everybody is aligned. In fact, we recently
had secured some liquidity from those same bondholders and banks,
again an indication.
Speaker 2 (29:28):
That everybody is really aligned to find a solution.
Speaker 14 (29:31):
So what else could be part of the proposal apart
from this group of bondholders. Are we going to see,
for example, some asset disposal announced before the end of
next week. Is that a possibility or do you totally
exclude this.
Speaker 13 (29:47):
I think what we have presented is a comprehensive plan
that included all the assets of ATOS. Now we're going
to have to see what proposals are going to come through.
Some of them will just keep the whole the whole
of the company together. One of those proposal is likely
to come from one point, one of our largest shareholders,
(30:08):
and others will come in from our bondholders who seem
to also be interested in keeping the whole company. But
we can't just really ago any potential proposal that may
come in and may entail a different mix of ideas
such as asset disposal or not.
Speaker 14 (30:24):
Will this whole pen be able to save Atos?
Speaker 13 (30:28):
Actually ATOS is a great company. As I mentioned to you,
it's just really is going to be you know, I
do believe that will come up with a plan and
the company will succeed long term, So we'll be saved.
Speaker 8 (30:39):
It will be saved.
Speaker 6 (30:41):
Carolyn Conan speaking with the h CEO called Sally.
Speaker 3 (30:44):
Now coming up, we're going to be joined my Meno
Ventures partner Matt Murphy on the firm's new playbook for
AI applications.
Speaker 13 (30:51):
Or on that.
Speaker 6 (30:52):
Next, this is Blue Big Technology.
Speaker 3 (31:07):
Now it's today's VC Spotlight, and we're going to be
taking a look at some of the winning strategies the
formulas being used by early AI native enterprise companies, because
that's the focus of Meno ventures latest AI paybook.
Speaker 6 (31:19):
Here to discuss. This is Meno Ventures partner Matt Murphy,
and you've put out.
Speaker 3 (31:22):
Basically, there's seven Golden rules for generative AI apps. So
this isn't the foundational models, but this is the applications
which can be built upon these models that can be
then used cross industry or across sales or marketing. What
have you learned about the similarities some of these breakout
successes we've already seen.
Speaker 17 (31:40):
Sure, yeah, so I think basically this is the fastest
innovation cycle we've seen across many like mobile, cloud, et cetera.
And so what really has to happen to create the
foundation for application innovators to move as quickly as they
want to as you need the infrastructure side to be
built out. So you've got kind of the brain, the
(32:01):
heart and soul and something like anthropic and then a
lot of surrounding tooling to get data into the model,
such as an unstructured or a clean lab or pine
cone which kind of help you curate and get data
into the model. So that kind of is well underway,
and we feel like we're at a kind of tipping
point where the infrastructure stack is pretty well solidified and
(32:21):
now we're really going to see a ten year innovation
cycle around applications that's going to move faster and faster,
and now that that tooling infrastructure is in place.
Speaker 1 (32:29):
So what we really took a look.
Speaker 17 (32:30):
At in this report is what are some of the
early breakout applications, what have they done differently? And so
we came up with the seven Golden rules. So for example,
things like having an almost infinite content loop. If you
think about a lot of applications, before you basically had
to have a designer, design creative for each potential campaign.
Speaker 1 (32:53):
You would then test that, take it back, iterate.
Speaker 17 (32:56):
The way generative AI works is it can make end
different campaigns and actually kind of close the loop and
have this constant feedback system. So one of the companies
that does that really well is a company called Typeface,
which is the former CTO of Adobe and based recreating
the Adobe Creative.
Speaker 1 (33:13):
Cloud with generative AI. So that's one very concrete example that's.
Speaker 3 (33:18):
Obviously one of your portfolio companies start to jump in there.
But what's so interesting is what sets that particular business
apart from others that you're pitched. I mean you also say, look,
you want to see within these AI apps target work
that is high value, high volume, or facing labor shortages.
So basically, where is AI going to have the biggest impact.
(33:40):
What are some of the winning formulas there?
Speaker 1 (33:43):
Yeah, sure, so what you want to do? Basically, there's
two ways that an a generator model can work.
Speaker 17 (33:48):
It can work as a kind of an assistant, call
that a copilot, where it makes a worker smarter, better,
more efficient at their job. And then sometimes it'll actually
be able to replace that job and allow a work
to do something else, like a higher value, higher skilled activity.
Things like customer service are a great example of that,
and you kind of look for these pattern based, high
(34:09):
volume workflows. On the other end of the spectrum, there
are these high value, lower maybe amount of people workflows
like let's say a paralegal who spends all this time
digging through documents and matching terms and things like that,
when they could really do the analytic work if a
system built that for them. So that's kind of what's
being reimagined here with general AI is how do you
(34:32):
kind of take the bulk work and allow workers to
do more higher value add activities.
Speaker 4 (34:37):
On top of that, Matt, I'd like to discuss how
backward or forward looking your report is and how crowded
the field of activity is in this space, I would
say that. Caroline and I talk about companies and platforms
targeting developers and apps quite regularly, an example being Salesforce.
Speaker 5 (34:57):
And the app Exchange.
Speaker 4 (34:58):
Right, they have brought in generative AI layer to their
existing products.
Speaker 5 (35:03):
Just how busy is it right now in what you
see happening?
Speaker 1 (35:07):
Yeah, I mean it's extremely busy, right.
Speaker 17 (35:09):
I mean so if you look even anecdotally at our
portfolio over fifty companies early half of last year, maybe
twenty percent of companies were doing something with the generative AI.
Now it's pushing up against one hundred percent, and I
think that's a good proxy for what's going on in
the market. If you're an existing software company, it's not
doing something with generative AI, you're falling behind.
Speaker 1 (35:29):
So that's one wave. But frankly, the.
Speaker 17 (35:30):
Wave that we're most excited about is people kind of
rebuilding from the get go now with new capabilities of
generative AI, like a couple that I mentioned, Because the
most creative and innovative way to disrupt applications is to
kind of start with a founding team that has the
DNA around AI and thinks about how to build the
application from the bottoms up.
Speaker 1 (35:50):
That way, whenever you bolt something on later.
Speaker 17 (35:54):
It's beneficial, it's additive, it's going to be great for
Salesforce and other companies. But when a new company comes
in and says, hey, you could just this application shouldn't
even exist without generative AI.
Speaker 1 (36:04):
I can give you an example if you'd like.
Speaker 17 (36:06):
For example, take a company like Elios, which is doing
kind of a generative AI for a therapist conversation, so
you can listen to the conversation, use your own model
to kind of parse that and give doctor notes as
well as a potential diagnosis, and use generat AI to
package that up and curate the content that comes.
Speaker 4 (36:26):
Out of that.
Speaker 17 (36:27):
These are kind of capabilities that a model was never
able to process before, nor synthesize it down as something
as precise and important as a diagnosis.
Speaker 4 (36:37):
Matt, one of your bullets is build where incumbents aren't, can't,
or won't. But you know, in the history of Silicon
Valley often something gets built because a founder realizes there's
a problem because they were at another tech company where
they were frustrated by something. Do you have any sense
that the end markets actually know what their use cases
are yet how they're supposed to be using generative AI
(36:59):
in whatever it is the business does well.
Speaker 17 (37:02):
I think that's kind of my point is, like, I
think everyone knows that generative AI is a great writer.
It can take all the content you have, synthesize it
down and help people get through it really quickly. If
you've got a graph or a set of output, you
can distill all that down and it makes it so
much more effective for the user to consume the output.
Speaker 1 (37:20):
Of your application. But that's kind of table stakes.
Speaker 17 (37:23):
The things that again we're most interested in is how
are you using that technology to the make the application
completely different than what the incumbent has done and in
the past.
Speaker 1 (37:35):
And that's really the opportunity lies here.
Speaker 17 (37:38):
Seeing a bunch of examples of that in the legal
vertical that's a fast mower out of the gate and
areas like that. I already mentioned customer service. So it's
just different when you say let's change the entire workflow
versus bolt on the capability after.
Speaker 4 (37:52):
The fact Menlovench has partner Matt Murphy. Thank you very much, Caroline.
Speaker 3 (37:58):
Yeah, let's have a quick check on talking to he
first up to Shiba is seeking to cut five thousand jobs,
or roughly ten percent of its head count in Japan.
Speaker 6 (38:05):
That's what the NIK is currently reporting now. The move could.
Speaker 3 (38:08):
Initiate one hu Jupan's biggest rounds of staff reductions this
year in a country that has some of the world's
strictest worker protection laws. Plus, Apple is wearing a possibility
of making some of its gadgets in Indonesia now, the
iPhone maker has been exploring production bases beyond its longtime
stronghold of China. Of course, that to minimize geopolitical risks
as tensions they rise between the world's two biggest superpowers.
Speaker 6 (38:30):
And business software start up Rippling.
Speaker 3 (38:32):
Well, it's a reporter that's in talks to raise new
funding and evaluation between thirteen and fourteen billion dollars and
the company we understand is planning to raise about five
hundred million in a deal. According to sources, the talks
with investors are ongoing, with plans to finalize terms within
a few weeks. It might be said that Rippling so
far has denied some of those reports. So the Bloomberg
(38:58):
NEF Summit, it's in full swing here in New York,
convenient leaders and energy, industry, transport, technology, finance, and government
to discuss just how to shape a cleaner and more
competitive future. I'm pleased to say we're speaking to a
person who's doing just that. Cuna, your CEO, Spante Fresh
Office panel from the summit and Claude. What's so interesting
is you are providing the technology, the filters, the ability
(39:21):
for companies such as say manufacturing makers to carbon capture.
Speaker 8 (39:27):
How well.
Speaker 18 (39:28):
We kind of focus on a problem that we stated
the one hundred and thirty five years ago by fellow
called Venti Ernius, and we took the name Vante similar
to Tesla Fuish on the EV. So we're unicorn and
focusing on carbon management by providing solution to avoid SEE
two going out in the atmosphere in the first place,
(39:49):
industrial factory, cement pulp on paper plants, or even removing
the SU two from the atmosphere that's sorry above the ground.
So we are working in that case with the company
called clim Works and we provide the filters inside the
contactor that they have to collect the C two from
the atmosphere.
Speaker 3 (40:07):
You built a lot of partnerships, You're working with a
lot of companies and emitter is how long a timeframe
is it to build such you know, to manufacture to
actually get this going when you know that one of
your clients wants indeed.
Speaker 18 (40:20):
Action this so for a legacy is that we're sixteen
years in research, in developing the technology, the product, product,
proving out in the market, and raising all these partnership
to get there. We've raised five hundred million dollars to
get to the point where we are, and we're currently
building a factory to make the filters that we'll be
able to equip the equivalent of ten project of a
(40:41):
million ton. The world needs to get to ten thousand
plant of a million ton in the next thirty years.
Speaker 2 (40:47):
Wow.
Speaker 18 (40:47):
So this is factory number one for us, and we're
almost there in terms of building up the capacity to
deliver projects. So now when you look at the specific
project with one a meter, normally it takes about almost
two years of discussions studies to evaluate how we're going
to integrate the capture project into let's say a cement
(41:08):
factory or a pulp and paper plant, and then it
takes two years to construct. So these projects are to
take a certain amount of time to deploy, and imagine,
you know, we need to deploy at the rate of
two capture plant every week for the next thirty.
Speaker 4 (41:21):
Years clause your twenty twenty two Series E three hundred
and eighty million dollars led by Chevron's venture arm I
remember twenty twenty one, twenty twenty two, there was a
lot of energy, pardon the expression behind your industry and
financial backing. Had things slowed down in terms of corporate
interest and public commitment to what you're trying to do, well,
(41:42):
you have?
Speaker 18 (41:43):
Your question is two fold one. The corporate commitment has
been there and it's growing as well. I think the
support we got from the audio gas industry and primarily
led by Chevron, is instrumental in us being here today
be able to talk about about management. But you know
what's missing now to grow the business at the scale
(42:05):
that needs to be done is we need the private
equity infrastructure funds to come to play, and so far
they never come to the value of debt of early
start startup companies and help them to deploy. So this
is something that we're working on these days to bring
the two together because it's the sum of the financial
sector plus the corporate that will make this thing work. Now,
(42:28):
from a consumer point of view or the public acceptance,
I think that it's a slow process. And the analogy
I can give you is we've been throwing see you
two in the atmosphere freely for the last one hundred
years with no consequences. In the minds of people, the
analogy is the waste management. At the same time you
know you're rubbish at home. The waste management somebody collects
(42:52):
and transport and recycle and store your rubbish. That's because
it smells and you can see it. You cannot see
and smell Coe two. So it's very difficult for people
to associate that the common management industry needs to exist.
And the price of collecting your rubbish is about one
hundred and fifty dollars per per ton of SE two equivalent.
Speaker 6 (43:14):
So Claude, we will share more time. Claude Latuna, your CEO.
A savante that does it for this edition of BLOEMG
Technology
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