From Marhard. We're Innovation, Money and Power colle in Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
I'm Caroline Heide of Bloomberg's World headquarters in New York, and I'm d Ludlow in San Francisco.
This is Bloombay Technology.
Coming up, we get a read on the IPO market. That's as retail Machine files confidentially for a US listing, while Reddit it tests the water for a twenty twenty four public offering.
More ahead, plus we'll talk the state of the consumer on this travel Tuesday and Amazon reports new records for Black Friday and Cyber Monday sales.
And Tesla's production nightmare. Why this cyber truck is continuing to be trouble for Tesla ahead of it's all important delivery event this week. We'll discuss that so much more. This hour, Let's go to companies that well perhaps are looking to get into the world of publicly traded pies and lose. Let's talk about Sheen's file for an IPO. We understand Reddit also again holding talks to potential investors as well. Let's get all of it on the strength or like there of of an IPO market as we
look towards twenty twenty four. Butlue most Katie roof, I mean a whole lot of news. I mean, not forgetting skims of course of Kim Kardashian and one of the helm and that particular business. But start on sheen. What are we thinking the appetite would be like for a company that basically is rivaling h and emon Zara.
That's right, So they just filed confidentially for a US IPO. They're hoping to go sometime next year. We think they could be valued as much as ninety billion dollars. They have low price points, which has been very popular with US consumers in global consumers. They were Chinese founded, but they moved their headquarters to Singapore, so this technically wouldn't
be a Chinese company listing in the US. Obviously, there's been a little a lot of the geopolitical tensions there, but the Singapore makes.
It more amenable.
Reddit's an interesting one as well, Katie, And it was funny I spent the morning reading about reddits kind of more recent history, and you realize that they actually first started this IPO discussion January twenty twenty two, which the other way looking at it was two years ago. What is the latest on a reddit listing.
Sure, so they wanted to go public during the last IPO boom, but they just missed it, and so they've been eagerly waiting for the IPO window to reopen. They weren't in the first crop of companies to go public this fall, as you know we saw Instacart, Clavio and all that, but sources tell us that they are getting ready. They are hoping that as soon as Q one that they could go public. But obviously, as we've seen, they've had a lot of fits and starts.
Okay, Bloomberg's Katie Roof with a lot of reporting overnight about what looks like a busy one Q in twenty twenty four. Let's keep the conversation going with Equity Zen's head of market Insights, Rihann Lynch, And I guess we start with Sheen because the valuation being discussed is mega. It is, to all intents and purposes, a kind of discount clothing retailer side by side. What do you make about it coming to market?
Yeah, this is one that we've heard is rumored to IPO for a while now, and it looks like it's finally making that move into the public markets, and it's an interesting one to watch. It's different than the cohort of companies that we saw went public this fall, and it's a company that's been growing really rapidly. They achieved twenty three billion dollars in revenue last year, had their
most profitable half the first half of this year. On top of that, they've grown their distribution centers and the US camp Europe. They've opened more manufacturing centers in India and Brazil.
And they're really solidifying their US footprint.
The US is their largest market, you know, fourteen partnerships with Forever twenty one and others to you know, create that brick and mortar presence. That being said, there is a lot of hair around this one. There's concerns about their labor practices, their ties.
To China, you know, and other issues.
So it's interesting and it will be interesting to see how investors think about this one. There really hasn't been an apples to apples comparison recently.
And distinguished for US. The driving force behind Achine wanting to go public and for example, a Reddit, it feels as though from a Reddit perspective, this is a liquidity event that really drives the desire to go public.
I think that's right. Reddit was founded in two thousand and five. This is an eighteen year old company. You'll get sheen they're eleven years old, so you know they're not young either. And when you look at a mobal level, they're over twelve hundred of these unicorn companies valued it over three point eight trillion in aggregate, So that's a lot of value that has been tied up in the private markets.
And wild platforms like equities.
Then enable some investors to access this market and some shareholders to achieve liquidity.
There really isn't a wide scale liquidity event until there is an IPO.
So I think a lot of these companies are feeling intense pressure from their early investors, from their early.
Employees to get some liquidity.
And you know, venture capitalists really aren't looking to pump more money into these late stage companies, so the IPO is really, you know, they expected next step.
The reported target valuation for Reddit is fifteen billion dollars. The last active user number that I reported, which was like months ago, is between fifty and sixty million daily active users, which in the grand scheme of things, doesn't seem like that many. You talked about the motivation being employee liquidity, but what on the about the demand side of the equation, Is anyone actually interested in a publicly traded Reddit.
Reddit's an interesting one to watch because they are so entwined in the.
Whole retail investor market.
They really were in the news a lot at the time of the memestock era. Their subreddit Wall Street Bets really drove a lot of that retail momentum, So there's certainly a tie there, and I think there are some super fan and users who will be eagerly watching and looking at to.
Participate in this IPO.
So while they are maybe one of the smaller social platform really do have a loyal user base. And another thing to note is that they are growing from a profitability perspective.
It's reported that.
They're advertising revenue grew thirty one percent in twenty twenty two. This has historically been a really small part of their business, so an opportunity for them to grow and potentially achieve profitability.
It'll be interesting to see.
If they are profitable at the time of considering an IPO, because that seems to be a table stake for any company considering now.
It's interesting that in many ways an IPO is often a marketing event as well, getting your name out that a retail community. And one particular interview we had last week amid the whole fura and debarcle around the ousting then return of Sam Altman to open ai was one very key VC saying well, this wouldn't eventually be a bad time to actually ipo open AI. Just take a listen for us, Brian.
I actually think that they should once they get this AFT sorted out, immediately filed to go public. I think that the demand and the outpouring and interest that you've seen and the support for Sam is just absolutely unprecedented a tech company. It's almost like an unintended pre IPO roadshow to show the overwhelming demand.
Of lux capital. That was Josh Wolf Brian, you, of course make a market in open AI. What would you say to the level of demand there is for a company like that amid the turmoil.
When we look at demand amongst our investadors in the private markets, AI and machine learning companies are by far the most in demand companies on equity sense platforms, so not surprising given just the boom in this space, but there was certainly a lot of investor interest for AI an AI adjacent company, So an interesting take on that one, and I'm interested to see kind of if that story develops and what comes from that, because there certainly is a lot of demand, and when you look at the
AI market more broadly, a lot of these companies are still quite young, so less likely to be IPO candidates, but that doesn't mean that there couldn't be one that hits the market, and open Ai certainly has the brand name.
Brian just thirty seconds. Do you expect in active one Q twenty twenty four another window to happen?
I do.
I do think things will pick up in Q one of next year.
From a macroeconomic perspective.
We have really good indicator growth, strong GDP, inflation is cooling, so from you know, when you look at that now as an opportune time to enter the market, IPOs we've seen haven't done great, but I don't think that.
Should be a deterrent for more of these companies next.
Year, especially those who really have both the liquidity and the investor access need to enter the markets.
Equity sends hell and market Insights Brian Lynch has been brilliant talking to you. So an upcoming developers conference has been canceled after seeming to list fake female speakers on the event's roster, prompting executives from Microsoft and other firms to back out of the Devternity conference. My tickets are actually selling for up to eight hundred and seventy dollars apiece, joining us now. One of the people reporting this out bluembg's lsir own and I mean totally extraordinary. The events
organizer confirming it's been canceled. What was it? He was auto generating women in particular as speakers.
That's the story of what he said happened. So this conference to Eternity had a number of speakers listed, and then a newsletter writer came out on x saying that actually this one profile has been AI generated. Another one seems very suspicious, and from their participants started dropping out. They just said it was very suspicious. The gentleman who organized the conference since said that one of the accounts or one of the profiles had been auto generated.
It had been a mistake. He has since removed it.
But then there was a far more pervasive issue of confirmed speakers Whitson's dropped out, their profiles were still up on the screen, including two women who had shifted for various reasons, and so there was a lot of concern that there was a plot to make the account look or to make the conference look more diverse than it really was.
So the organizer, Edwards Sizovs, has confirmed that Devternity's been cancer.
It's not happening.
But let's go back to his rational He said this was not about giving the appearance of a more diverse conference than was actually the case. It was about a mistake essentially that he had made.
Yes, that's exactly what he said.
What happened.
But one of the bigger pervasive issues is that we know that tech is still chronically under represented when it comes to female developers. One report said that the tech industry is still less than thirty percent female, and so there has been this really big push to make sure that these conferences that everything is really representative, that they
have a really good mix. Some of these speakers who were confirmed as allies have even said I'm not going to appear at a conference unless there's a really decent representative mix, and so when they pulled out, they said that they had been duped and that their clauses had you know, it didn't pass muster for the clauses.
Okay, Bloomberg's Elliser, and thank you so much for that reporting. Coming up here on Bloomberg Technology, we're going to talk about the state of the consumer. As Amazon says, Black Friday and Cyber Monday shopping broke records this year.
More on that next. This is Bloomberg Technology.
The consumers had a remarkable resilience, but I do think the momentum will start to slow, and I mean evidence of that is that we are seeing more usage of credit cards to fund these transactions.
To credit card balances are at all time highs.
Your colleague was just speaking about the fact that by now pay later is factoring into this as well. We're seeing delinquencies across the consumer spectrum, across the full income spectrum, start to increase from very low levels, but increase nonetheless.
A mega Black Friday in Cyber Monday. But Lisa Hornby strowed as earlier on the state of consumers, some concerns and a focus after what was a strong weekend for e commerce sales, travel Tuesday is now underway and when we go up to the skies with Tom White of
DA Davidson. So the hot categories to spend over the weekend, we're like consumer electronics and hot wheels, totally rad Do you expect to see the same spend at elevated levels gains from last year on travel, be it flights, be it bit accommodations.
Yeah, first off, thanks for having me.
Yeah, look, we're a few you know, we're monitoring the consumer closely, but so far it looks quite good. It looks like underlying travel the men is still holding up quite well based on a number of the data points that we track, certainly the big public OTAs online travel agencies that we cover all that pretty encouraging things to say about how kind of fourth quarter and early twenty
twenty four travel was shaping up. But even some of the third party data, like for example, the TSA checkpoint data coded date, so far on the fourth quarter.
We're up about ten percent on a year of a year basis.
A third quarter was up about eleven percent, so pretty kind of stable growth trends. There a handful of other surveys from companies like Deloitte, All Point to you know, people looking to travel more. You know, this Thanksgiving through the mid January across all age groups, all demographics.
Really so so far, so good.
But you know, obviously I think Idrid Straits and the broader macro a somebody to keep an eye.
Well that that's a good point.
So you had that bite around the role that credit cards are playing with the consumer. By now pay later is how consumers spend on travel. Concern kind of for a long term outlook on that market look.
Certainly for a long term out look, I mean in the short term out look. You know, if people are stretching themselves a little bit because they still feel the lingering effects of being cooped up during COVID and they want to prioritize experiences and travel, you know, that'll obviously be positive for the online.
Travel agencies that we cover.
A longer term though, we need a generally healthy consumer who's got discretionary income to spend.
So I think an easing.
Of rates or at least the stability and rates, and you know kind of maybe going into next year would you know, be a further kind of positive catalyst for travel spending.
Okay, Tom White of DA Davidson with the travel outlook on this Travel Tuesday.
Thank you, Caroline. What have you got on the ground.
Well, we're going to go to the consumer a little bit more, but the non discretionary type. We want to be talking a little bit more about the grocery world after. In fact, Amazon just reported for Black Friday in Cyber Monday. Well all those hot wheels you were just talking about. It broke records this year, customers around the world purchasing over one billion items. But let's go into the grocery side of the equation. Meredith Bunches with us, Amazon's director
of worldwide grocery stores. And were the consumers showing up in your part of the business as well, Meredith.
Yes, they were.
As you mentioned, Amazon had record Black Friday sales, and we had great success in the grocery space as well, lots of customers shopping online and in store across Full Foods and Amazon Fresh, especially taking advantage of our great deal that we had on turkey at just forty nine cents a pound, which was an amazing deal.
So yes, a great holiday all around.
What's interesting, of course, because you do have from Whole Foods and more, perhaps luxurious expenditure that you might do at a grocery department rather than you go to Fresh. And Amazon Essentials basically tickle the boxes on a price perspective, and I'm interested as to whether or not you're managing to have the one shopping cat that much a little bit more for people who want to splash out at Whole Foods but also get their basics from say Fresh for example.
Yes, absolutely.
We know that customers have different needs and our goal is to meet those needs, whether it's through Whole Foods Market or through Amazon Fresh. We also have Amazon Go, and each one of those banners provides our customers with a different set of groceries. Whether they want to buy their sustainable seafood from Whole Foods Market, and then they want to get their center store Pringles or Coca Cola or just really basic cooking goods at Amazon Fresh, and then they want to get some fresh food to go
from Amazon Go. We really see our holistic grocery offering as a way to solve our customer's needs because we know that they're shopping across four to five different retailers today.
Ten and so we think, what if we can yeah, go ahead, can I.
Get it in one delivery yet.
Not yet, but we are working on that because we have everything that the customer wants. We've got the tens of thousands of shelf stable items on Amazon dot Com, the Whole Foods Market, the Amazon Fresh, the Amazon Go and we want to make it as easy as possible for customers to get all of that in one shopping
cart and one grocery delivery. And that is what we are working towards because simplifying that relationship where they can get everything from one singular relationship with Amazon is really how we think we can solve for customers in the grocery space.
And if you look at producing stools of course as well, Meredith, you've been bringing in as we are, but do not se coffee, but also some of the no more technology savvy ways and perhaps just walking out for example. But how is that squaring with actually the expansion of bricks and water. Are you still rolling out more stores? I think it was about one hundred of Whole Food that you wanted over the next few years.
Yes, we are going to continue to open our Whole Food's market stores, and we'll do so selectively with Amazon Fresh when we see the results that we like and as you mentioned, we have relaunched several Amazon Fresh stores in the Chicago area in the Los Angeles area. In those stores, we've added thousands of new products, We've lowered prices across thousands of products.
We've added new checkout options.
So customers can use just walk out, they can use our dash cart, they can use self checkout, really giving them the power to choose how they want to check out.
Do you also mentioned we've.
Got Krispy Kreme integrated in the stores with coffee and donuts, which makes everybody's shopping trip a lot more delightful. And Prime customers can also get an additional ten percent off of those stores. And we're really happy with the results that we're seeing, and we're going to continue to iterate and continue to invent on behalf of the customer and look for those results that tell us where we want to be.
What was interesting with the whole refresh refocus that was really announced in August was those prime account holders and non prime account holders. You started to say, look, you combine with us even if you don't have a prime subscription, how is that going? How many numbers of people are using your groceries when they're not having a Prime subscription.
Yeah, we were really excited just a few weeks ago to launch grocery delivery for customers without a Prime membership from Amazon Fresh. Previously, customers needed to be a Prime Member in order to access our grocery delivery, and we really wanted to democratize our affordable, fast, reliable delivery for everybody,
whether you're a Prime member or not. That being said, being a Prime member still gives you an additional ten percent off thousands of items when you shop in store, as well as lower delivery.
Fees for shopping online.
We're really pleased to see the number of customers that are not Prime Members shopping our grocery delivery service we continue to roll out.
We hope god will continue to grow.
Meredith Branch, thank you so much giving us the insight on Amazon and all the worlds of groceries.
And we we've got coming up yep, A big focus on China tech presidents using ping visiting Shanghai today. A lot of stories in the news flow. This is Bloomberg Technology.
Welcome back to Bluemo Technology. I'm Caroline Hid in New York and.
I'm Ed Lovelow in San Francisco. There was a lot of news out of China overnight technology stories that impacted markets. One of the shares we're looking at is the Hong Kong listed shares of sense Time, a Chinese AI company. We're going to bring you the full details later in the show, but they're subject to a short seller's report which did see the shares in Hong Kong closed down
almost five percent. The other big name, and this has continued into the US session, is the ADRs or the US listed shares of Pindwo d Woe, the owner of team we're talking about online retail, absolutely smashing expectations in its earnings in the court have just gone more than doubling revenue year on year, coming in twenty five percent ahead of consensus, but also really beating on their income.
The story is Timu really taking shoppers and market share from the likes of Sheen, which we've talked about is standing by for a US listing at the start the next year, but also Amazon some evidence that they're taking shoppers from Amazon in other markets as well, and those usadrs now up almost nineteen percent eighteen and a half percent in the session.
Carol Andrew Duau a Shanghai based company. Let's talk about that a little bit more, because Chinese President's using Ping is indeed visiting Shanghai for what is like the first time since COVID lockdown, making stops at the Shanghai Futures Exchange and several tech giants operating in the megacity to try and boost waning private sector sentiment. That's all according
to local media. Johnny us Now is an expert. Ben Harberg is managing partner and MSA capital who actually, well, you just had words with Shixingping when he was at APEC in San Francisco. Where where it is right now? And what is your message to him at the moment, and what is his message at this moment by going to Shanghai.
Well, he's trying to stretch his hands out.
Shanghai was probably one of the most damaged major cities by the draconian zero COVID lockdowns. We didn't face the same type of shut down in Beijing, and Shanghai was kind of seen as a poster child for one that had kind of fallen a foul of let's say, central government regulations around managing zero COVID and therefore was subjected to the most strict lockdowns, and the PTSD that that left both for its residents as well as global investors, will not soon be forgotten.
The PDSD that many an investor has is then the regulatory crackdown that Shi Jinping had on the tech investment area. More broadly, how do you think that investors are seeing a post COVID and post regulatory enforcement world for China.
Well, you know, the regulars are doing everything they can to try to assuage those fears that there will be
an ongoing interference in the markets. And when I had the chance to whisper a few thoughts to President and She last week, I said, please get your hand out of the markets and get a better PR team, because you need people that can explain why you're doing what you're doing, and explain well ahead of the time that it takes place, so that people don't fear that there's these unexpected twists and turns and unpredictability that would cause them to flee the market.
And it's that volatility with the strong returns on the US side, it will cause a lot of global investors to say, why is China worth the risk? If I could go put pop my money in the US at these kind of returns.
Shanghai and some of its high tech parks are the site of AI development. They're the site of chip design firms and actually, to some extent gaming. Twenty four hours ago we posed this question about the regulatory crackdown on gaming and where we stand now.
Just have to listen to this.
But most of the regulatory changes are behind us now and that people have some stronger footing to move forward. There's still huge amounts of money to be made in the Chinese games market.
Ben That was Lisa Costmus Hansen, partner at NICO Partner's President of Nico Partners. She was talking in the context of gaming, but broadly across the technology sector.
Is she now carrying out.
A supportive policy or is still having some heavy regulatory overt tang on those sectors, many of which based in Shanghai.
I think that regulatory intervention is over and again it squares with the type of tone that he took during his speeches at APEX, particularly the one that we were attending on Wednesday night, where he was really olive branch out the state of the Chinese.
Economy is dire.
The last thing they need is further shocks and further interventions, and in the technology giants that they are seen as bell weathers and so don't expect further interventions. That doesn't mean that the world will believe that. We've got to show that through proof. And again that's why they've really got to come out clearly and state that just having photo ops at Sense.
Time or Pinduo Duo or sm C won't do it.
They've got to make that clear to investors and then show it over the coming year before a lot of that trust can be rebuilt.
From a pure technology and competence perspective, you see evidence that China is standing on its own two feet.
Certainly.
I mean the pace at which China has been able to develop its own chips is beats any kind of global precedent. You know, China's numbers in terms of publications and magazines in Nature magazines or you know, the other kind of scientific sources is off the charts.
Numbers of patents being filed.
You know, the ability of Huawei and now obviously is Shoe its own operating system with Harmony.
We are truly now.
Witnessing what I think a lot of us, you know, Poo Pooon maybe early on, which was kind of the reality of a truly coupling. And we are finding ourselves in a balconized world where there will be a set of Chinese hardware, operating systems, app stores, and customer bases, and then those balcainized from those of Western producers.
How balkanized will the investor base eventure REBN. This is what you deal in day to day, accessing pools of liquidity from the West to be going into China. And at this time we're looking at Sheen, which, of course you know would say it's not a Chinese company, but it once was, and ultimately a lot of it stock comes from there, but it's now based in Singapore. But they're gonna be tapping an American investor once again. How do you see the liquidity being brought to bear for Chinese investments.
It's been tough this year. I think a lot of that again down to performance. So as you know, we have further first negative FBI since nineteen ninety eight in China. We had seventy five percent of the capital that flowed into China this year and the public markets flow out about twenty five billion.
But I think again a lot of that is returns driven.
The capital that is not returns influenced is being scared away for let's say, non fundamental reasons, and that I think pertains more to geopolitics. And those investors are looking for opportunities to invest in China still they believe it fundamentally is a growth opportunity, but they want to do so in a way that helps them navigate these geopolitical uncertainty.
So they want to know that the companies they're investing in aren't going to aid in the VET the PLA, They're not going to necessarily compromise American values, and so I think companies that can prove that ILK are going to continue to see and attract capital if they can return the type of profile that's required to kind of
compete with those US opportunity costs. And so I think that capital will return, but that takes the stability, and those companies that are not on those that they're falling a file that the likes of sense Time four Paradigm or those that are kind of have connectivity to CCP entites or the PLA, I think they will track a lot less capital because of those geo political concerns going forward.
Then we were just showing the performance of the Nasdaq Golden Dragon Index year. Today, I think it's trailing the end and as that one hundred and in s and P five hundred. Either way, what do you see as being the twenty twenty four story for China tech?
We have to be ever bullish, and I really am.
I mean I'm talking my own my own personal book in terms of what I put my money into.
The numbers are irrationally discounted.
That Ali Baba is trading outern near its IPO valuation yet with ten times increase in revenue makes no logical sense. And again, if we can sustain the growth, and I think China will hit its five percent target this year. The IMF even raised that target to above five heading into the tail end of this year.
I think that China.
Has the tools to deploy.
The fundamentals are sound in the economy.
The real estate picture is overblown in terms of the impact it will have the true economic drivers and the economy is not a Leman moment. And therefore, you know, we are actually piling into Chinese equities and taking them out of the American ones that we think are probably fully priced at this point, just can't manage to sustain this type of upside that we've experienced.
Throughout this year.
So I'm a China ball heading into next year, even if it's a more modest ball than I would have been in that kind of growth spurt from twenty seventeen to twenty twenty one.
All Right, China bull light will come back to you at some point in twenty twenty four and check in. Ben Harberg, managing partner of MSA Capital, thank you so much. I want to go back to that story that I was talking about at the markets context since Time Group shares plummeted there most since April. After short seller Grizzly Research released the report citing documents and insiders which accused
the Chinese AI company of inflating its revenues. The stock tumbled as much as nine point seven percent before closing down about five percent lower in Hong Kong, and a filing to the exchange since Time said the report is quote without merit and contains unfounded allegations. Okay, it's time for talking tech and first stuff in the news. A Toronto based hedge fund building a steak in Twilio is
reportedly pushing for a sale. Reports from the Information say Ants and Funds send a letter to the software company's board of directors urging Twilio to either sell or divest its data and applications business Ants and steak in. Twilio is said to be worth about fifty million US dollars, and in an effort to grow its AI footprint, Dell has agreed to provide computing hardware to artificial intelligence startup INBEW.
The one hundred and fifty million dollar deal will supply and View with Dell servers in order to process vast amounts of data in View as one of the handful of AI startups building its models from scratch. Plus Adobe's twenty billion dollar purchase of DESI NIGN software maker Figma, is at risk of being blocked by the UK's Competition and Markets Authority. The agency says the deal could threaten competition in product design software and reduce the possibility of
new products in that market. These notes are pretty in line with the EUS regulator, which sent Adobe a list of objections earlier this month.
Caroline Well, Let's stay.
In the region for a moment ed because European biotech startup Cradle is on the path to expanding its use of generative AI in the name of science. Today, Cradle is announcing twenty four million dollars in this series A funding led by Index Ventures, taking the total raise to thirty three million dollars. For more on how these funds are going to be used, with police to welcome the CEO, Steph van Griechen and Steff Welcome using generative AI, using
machine learning. You're helping biologists what basically design more efficiently, effectively less money. How do you do this stuff?
Yeah, so we're using generative AI to help scientists teams to engineer your proteins that will basically help them to get to the types of bio based products that they want to bring into the market a lot faster. It's a little bit akin to how large language models are being used in natural language, but then for biological sequences from DNA.
You've got Johnson and Johnson Innovation and other zimes, Twist Buy Science as some of your companies. You've already on boarded the money you use. Now, how does that accelerate onboarding more? What is it are you investing in talent in AI labs? Where you are in the Netherlands or Switzerland.
Yeah, definitely.
So we're scaling our go to market with this money, as well as our own in house data collection. I think what's a little bit different in biological research is that a lot of the data that you need in order to train these machine learning models you can just find on the internet because people are not publishing their
IP and their experimental results. And so we're building out some of our in house lab capabilities, and obviously we will continue to train large language models and expand our mL research team step.
There's a large body of work gone the use of generative AI tools in proteins in drug discovery. The whole point is largely to expedite what is a highly regulated and slow process. Where you are in Europe, is there regulatory support for if your tech works, you can actually go out and make an impact in the real world.
Yeah, certainly. I mean, luckily for us, a lot of the products that people are building today are already being regulated. So if you want to bring a drug market up, you already have to go to the FDA or the European Drug Authority, and same for food products that you might bring into the market. Where we really show up is in sort of the research and development stages for
these sector products. So if you're in pharmaceuticals, it can easily take four years before you go into a clinical trial and actually test whether your drugs are FICA safe and useful for people, and we really cut that initial part of drug discovery in half. Very similarly, a lot of people are now using bio based products and selling them to people. For example, you might have wandered at some point why you might detergents keep working at lower temperatures.
That's because we're increasingly using.
Enzymes like biologicals in the formulations. And also, these types of products are really expensive to bring to market and tens of millions of dollars worth of R and D. I think really the promise of generative AI in this space is to significantly reduce the amount of time required to do the R and D for these types of projects, therefore allowing our customers to bring those types of products to market a lot faster.
Steff, just for clarity, say, what is it that Cradle has that's uniquely yours? Is it the underlying large language model that you've written, trained and then now using yourselves.
Yeah, it's basically two things.
One is indeed those large language models that help get our customers to outcomes much faster. I think secondly is we've collected a lot of proprietary data inside of our laboratory that we use to train these models that make it really easy and sort of usable for a lot of our customers. And I think finally, software in research and development for these types of products is still very early. We build very intuitive web based software that scientists and experimentalists can use.
In the lab.
I'm sure the vcs who've backed this latest round love what you're doing now, but they also love the background of the team and new stuff. Of course, you were part of product leadership over at Google AI at Machine Intelligence. What do you make of the current tearing apart almost of itself slightly of the way in which we should be developing generive AI, in particular the race or the slowdown? Where do you come out and that having worked at a force such as Google.
Yeah, I mean I think there's still an acceleration happening. I personally am most excited in some of the application domains that are related to science, like can we get people to learn learn a lot more about something that they're researching a lot faster in things like electric engineering and things like mechanical engineering.
In places like biology.
I think there's an incredible amount of tapped applications for generative AI. Obviously, you know the races are offered some of the chatbots, and I wish, you know, my former employer as well as Open AI a lot of luck. I think we're just at the beginning, to be honest.
Steph, you and you're founding members of the company are in Europe, but your origins are here in the Bay Area where I am. Kind of what is the benefit of launching and growing a company in Europe versus traditional Silicon Valley.
Yeah, certainly. I mean there's some pros and cons.
I think on the pro side, the access to really high quality talent for US is really amazing here. You know, I wouldn't want to be a founder fighting for m L researchers in the Bay Area right now because lots of people are trying to hire, and I think there's a lot of talent here that doesn't want to move to the US, that would want to work for.
A company like Cradle.
I think secondly, and that is for us more specifically, you know, a very large contingent of companies that are in biofarm and biotechnology are based out of Europe. You know, myself am in Eric in Switzerland right now, and so some of the large companies like Nevada's Rush, they're all based out of Europe.
All right, Oh, thanks to Stefan greg and CEO of Cradle. Okay, Tesla's cyber truck is almost here, but it's not without its challenges. Even as the company is about start deliveries on Thursday, a splashy Eventlon Musk's already lamenting that Tesla's dug its own grave with it. Let's bring in bloembols down a whole who's been writing in about this on Bloomberg dot com. I guess the idea is that technologically, from an engineering perspective, from a battery perspective, this is a lot Yeah.
I mean, I think a lot of people have focused on the cyber truck and the steel, which is its own challenge. But Musk has warned repeatedly that this truck has a lot of bells and whistles, there's a lot of new technology in it, so it's going to be difficult to manufacture in high volumes for that reason, and he's you know, very clearly stated on the last earnings call that.
They're not going to reach high volume for quite a while.
Bells and whistles was exactly what they did for the X. Well, that then goes so well from a sales perspective, So I'm interested why he's going back for more in this way? Why do this?
Yeah, I mean, that's what really struck me is I listened to him talk about the cyber truck. He kept saying these phrases, and I was like, oh my god, this sounds like the Model X all over again, which you know, they eventually lamented and sort of acknowledged that the Model X suffered from hubris, and I just sort of fear that we're about to see this all over again.
I mean, it's.
New battery architecture, it is you know, rear wear stealing, it's a new steering wheel, it's the steel, it's a sound system, I mean, and we don't even really have real specs yet. So I think that there's probably a lot of great surprises that will delight consumers when they do the big reveal on Thursday, But manufacturing and high volume is just going to be rocky, and Tesla itself has basically said this.
I remember being in Hawthorne twenty nineteen and cyber truck rolls on stage and you're like, no way, no way, and then friends from Vauhausen throws the ball, it smashes, and yet here we are done and behind schedule, but an actual product.
Yeah, and I think the big question will be, so how many do they hand over on Thursday? My understanding is that it's supposed to be roughly ten. Are they to employees, to bonifide consumers, to sort of trusted consumers and influencers. And then when we get the sales you know, quarterly sales and delivery figures in January, like how many
cyber trucks are on that list? So you know, I think they've learned lessons obviously, but they seem like they are repeating some mistakes that they made with the X in terms of just you know, really packing this vehicle with a lot of new technology.
Another part of Elon Inc. Loving the poster behind you for the all important podcast you're part of at the moment as well, Dana, how we thank you so much for that look ahead for Thursday. Meanwhile, that does it for this edition, I'm going to make technology and you don't want to miss the recap of our podcast, So find out on the terminal. You can go online. You can go on Apple, Spotify, iHeart, wherever you get your consumption of podcasts from New York, from San Francisco, and
later from Las Vegas with Vana Silipsky. There's a Blueberg Technology