Adobe Calls off Figma Deal, Apple Halts Watch Sales, AI Deep Dive

From Marhart where Innovation, Money and Power Collie in Silicon Valley, NBN.

This is Bloomberg Technology with Caroline Hyde and Ed loved Love.

I'm Karine Heinde of Bloomberg's World head quarters in New York.

Then i am at Lovelow in San Francisco. This is Bloomberg Technology.

Adobe Figma, they call off their twenty billion dollar deal after clashing with regulators in Europe.

And the UK. Will bring you everything you need to know.

Plus a Rod's black Chech company plans a merger with satellite Communications provide a link global. We hear from the former New York Yankees. All start on the deal and.

We'll take a deep dive into the world of you guessed it, artificial intelligence, from investing in the space, how businesses are utilizing the technology, and the ethical concerns attached to AI or break it all down.

Let's first talk to us about these deals.

Yeah, well, the deal that's dead, Adobe and Figma mutually agreeing to terminate Adobe's acquisition of Figma, a twenty billion dollar deal. As you said, equity market reaction Adobe up one point nine percent. And it's interesting because the question is would this have ever pass muster with the regulators. We'll get to that in just a second. The news being that Adobe pays Figma a one billion dollar termination

Yeah, I mean imagine getting paid one billion dollars to break up The reason, the big one is just that it was taking so long. Right fifteen months ago, I think we sat here and spoke about why Adobe was going to buy Pigma, because it wanted to expand its kind of creative dominance to look at the app designers, the UI designers, and also just invest in a more

The UK EU.

The US regulators were expected to sue as well, and so there was a certain point where both Adobe and Figma said, we do not see a way forward here. I mean, they could have litigated this for another six twelve months and it might have still not worked.

So they decided to walk away.

I mean Dylanfield, co founder CEO of Figma, putting out a blob today really talking about what was it that thousands of hours spent with regulators they still couldn't get this deal away. We can see that Adobe's rallying a bit on the news, but what is the future of Figma.

This is a big VC backed company.

There's a lot of money to be made on this particular bet, and I'm interested that they still seem pretty positive about what they managed to basically put to market during this time.

Yeah, the big question for US now is are Adobe and Figma still on a collision course?

Right?

Figma is growing rapidly. For those who are super familiar, Figma's really core market is the software that helps you design the way that apps and websites look. But they're expanding elsewhere. They've looked into more productivity software suite kind of think about like a Google workspaces kind of thing. They've looked a bit into image editing, right, and so you figure that this is a capable company, a capable leadership.

It's interesting they talk about the huge advancewers in AI as well, and how that is an area of focus for the business. I mean, look, we're all waiting for IPOs and exits, and this is an exit that's put on ice. Do you think this company will be going in alone and looking to build in a public market.

Brody, I think it'll be a while before we see an IPO. I think again that Adobe was buying a fast growing but somewhat still nascent competitor. I don't remember their revenue numbers, but you know they are rapidly growing, they're scaling. I think it'd be a while before we see an IPO. I mean I've already seen those some theories out there, like is fig mug going to merge with CANBA? Is fig mug going to get acquired by

Bloomberg's Brady Ford on the collapse of the ad Pigma deal. Thank you. Staying in the world of deals. A blank check company set up by former New York Yankees all star Alex Rodriguez, is planning to merge with Satellite Communications provide a Link Global. Earlier I sat down with the CEOs of Link and slam Court to discuss have a listen.

Link invented this technology. You go back to twenty fifteen when the original idea was created. Many people thought this is impossible, and we then invented all the core technology to connect to the standard phone already in your pocket with no change to the phone. People thought that was crazy thinking. Not only did we invent the tech, we then proved it and we have three operational commercially license satellites in orbit today and we're operational in five countries.

Charles, you have the consolation well, a small constellation up and running, you have the commercial deals in place. This is an area just last week we learned that SpaceX wants to get into as well. Is there enough room for you and the likes of SpaceX to build out the SAT to sell network.

Well, absolutely, so let me explain why. First of all, is completely validating that SpaceX wants to follow link right. We're the category creators. We inmitted this, we proved it, and there's a bunch of companies jumping in now that we've done it. But this is the key thing to understand. There's no one's going to get a monopoly in the mobile wireless industry. There's at least two or three winners.

So there's going to be at least two.

Maybe three winners in satellite direct the standard phone, it's going to be Link and one or two other companies. So that's a natural, it's best for the consumer, and it just completely validates what we're doing.

Yeah, Alex, really similar question for you. In a lot of the SPACs that I've covered over the last three or four years, the ones that have gone wrong, is where due diligence was a problem. And I wondered how much of a concern entering a market with Link with a big competitor or potential competitor like SpaceX, how much of that was a consideration for you?

Yeah, it was.

And look, we are super disciplined that we'd rather not do as fact and take something in public unless we felt really passionate about it, where long term thinkers and our core values are aligned. I mean, it's such an exciting space to think that this is a trillion dollar business annually opportunity and to connect the unconnected, to think that Charles and Link can connect over a billion people

Is a good point, which is the industries you're trying to disrupt. But if you think about the end user, right me the consumer with the cell phone, it seems to be the carriers childs that you want to do business with.

That is a key part of our strategy. We're partner with mobile phone companies like many people here in the United States, no Verizon AT and T AT T Mobile, but there's eight hundred around the world, and we are going to be a partner with mobile network operators around the world. It goes directly to our business model. We are going set up as a trusted partner of mobile network operators and it has huge implications for our economics.

A rod Spack taking Linked Global and its CEO Charles Miller Public Caroline will being well valuation around eight hundred million dollars and they literally want to take on SpaceX. It's not a new story I thought i'd wake up to on a Monday morning.

There's been quite a few stories to wake up to on this Monday morning. And one of them, in fact, another market moving story for US was the fact that Apple is holding sales of its flagship Apple Watch models in.

The United States.

I'm going to bring you yet another sort of antitrust story here as well.

And what if you go right and overnight in China are colleagues reporting that the government crack down on the use of foreign handsets continues across government and state backed enterprise. And look at some of Apple's key suppliers. Broad Coom interestingly now up one point two percent, have been lower early in the session. Other key suppliers seem to be moving lower. On that news, we all have the details. Next,

And there is so much to chew on when it comes to Apple today, ed, So let's stick with the company that's also confirming it's soon going to be halting sales of its flagship Apple Watch models right.

Here in the United States.

Now.

The move comes following an ITC ruling as part of a long running pattern dispute between Apple and the medical technology company Massimo around the Apple Watches, blood oxygen sensor technology. Let's get our tape from our Bloomberg Intelligence and our Grana and.

First the watches.

This is quite a major step, but basically they're anticipating an import ban here.

Yeah, Nie, we were expecting, you know, my colleague Hamlin Stern know a lot of work for this, that there would be a settlement by now between the two companies. And you know, we still have a few days. Let's see if this is just arm stronging by both the companies. But let's see what how happens. But we are hopeful that there'll be a settlement between them.

The other story we're reported overnight amarag According to Bloomberg sources, this kind of government or public sector clamp down on foreign handsets in China. Right it started with I think Beijing and Chianjen. Now there are eight other provinces where state backed entities or companies government entities are saying leave your foreign handset at work by domestic Does that really impact Apple sales grow for or potential in China?

Yeah, I think there isn't that much good news for Apple in the last several days. I think the iPhone news is something that you know, I mean all frankness, you don't expect the government employees to showcase their iPhones anyway in the public. That's just been you know, this is something you don't do for four years. But I think the bigger issue at that time right now is Huawei has a new forum with five G capabilities and

So you know, when when they.

Report results over the next couple of months, I think this is going to be the single most important question asked to Tim Cokz to you know, what's really happening in China and how should we expect because it is the biggest growth market for Apple in.

Terms of you know, our phones, and Apple's.

Up fifty percent year today the years always out fell twenty six percent in twenty twenty two. What's the story going to be for Apple in twenty twenty four.

So, as far as we can see right now, I think the growth prospects are pretty tepid at this point. I mean, growth rate of three four five percent is nothing to really write home about.

But you know, one of the reasons.

People look at Apple is because of it's it's you know, what we call as a flight to quality, and with interest rates going down, that has helped some of the larger tech naus.

But fundamentally, I think Apple.

Still needs to do a little bit of work to showcase that they can get back to that high single digit to load double digit growth rate. But we don't think that's going to happen next year, next twelve months. It's going to be tough for them.

We of course, have seen that there's been a slight pivot from a supply chain perspective looking towards India and indeed looking towards India as a demand driver as well an rug Is that going to be some sort of a silver lining amid the pullback in China and a more difficult outlook for twenty twenty four.

Yeah, I mean, in the long term, India is a very big growth market for them, that's no doubt about it. But that's something I think it's going to play it into three to five years range.

Over the next two to three years.

China remains one of the most important things because the purchasing power of consumers in China still is a lot.

More than what it is in India.

In India, if you look at the smartphone market, you know, Apple doesn't even qualify for ninety five percent of the unit shipments because they are below three hundred dollars.

Apple doesn't play in that market.

So while the population size is very attractive and very appetizing, but the smartphone growth is not there just from units at this point, all.

Right, Bloomberg Xander Egran or Bloomberg Intelligence, great to get your analysis on a lot of Apple news.

Let's turn our attention to Nvidia now and then really fascinating deep dive by Bloomberg highlighting the threat that AI poses to minorities. This is highlighted by two former employees of Invidia who warn the CEO of the consequences of artificial intelligence on marginalized communities. Thus far, and Video has declined to comment on the specifics of the meeting that was conducted, but.

The company said it could quote continues to devote.

Tremendous resources to ensuring that AI benefits everyone. Let's get to the reporter behind this incredible piece, Sindujo Rangarajan is with us and Sinduja it goes back several years to a meeting that they had with Jensen the CEO of Nvidia, and these two employees basically walked out feeling that they weren't hurt, right.

Correct, got all good and alex Alexander Sodo, you know, they were both presidents of the Black Black Employees Group. But they work with executives and people from across the company to put together presentation for Jensen Huang, the CEO of f and video about the risks AI can post, how can we make AI safe and the general topic about AI ethics, and they wanted to make sure that you know, the company which is supported which which they claim is you know, going to be a major AI

Make sure that AI is safe.

And they and then they they you know, walked out of the meetings not feeling heard and they quit shortly after.

A part of this is not just the not feeling heard or basically an inaction by video from their point of view, was the idea that it's the people building the technology. It's important that there's diversity within it, right, And you dug down into in videos workforce, essentially it's hiring relative to some of its peers. What did you find and why is that important?

You know, there's a lot of research that says that you know, particularly for AI, but technology as a whole, that as an industry, it's so it has such few underrepersent and minorities that it's likely to miss blind spots when it comes to building these tools that you know

We read in Vidia's statement in response to the story at the beginning of the segment. But what is the net result of this reporting, Ben, what kind of action is in video taking and has anything improved?

They, you know, the meeting happened a while ago in video claims that it's done a tremendous amount of work in thinking about this issue, and they've hired you know, Nikki Pope to run their trustworthy AI division. They've you know, made sure that their data sets that the models are trained on are debiased, and they've put in a lot of work into making their models are transparent and not

Because it's worth reminding people that these two employees when they first went to the CEO Jensen, it was back in twenty twenty. A lot has changed, a lot of soul searching among corporate America has occurred since, of course, the tragic death of George Floyd as well. I'm interested in ultimately the real part of AI they seem to be worried about.

Is facial recognition, correct.

That's one of the big pieces, and that was one of the things that they raised during that meeting. You know, we'll there's a lot of research that says already that facial recognition technologies in general, you know, don't identify people of color quite well. So this was just just generally raised. You know, if that's going to be powering self driving cars, then you know what's going to happen, Like what if they don't recognize people with darker skins or different kinds of people in general.

A right, Bloomberg's Induja and Garage and just really important and deep reporting on video company that everyone has become so obsessed with throughout twenty twenty three. Welcome back to Bloomberg Technology. Ed love Low here in San Francisco.

Carolin Hired in New York.

Let's get a check on these markets, because we're managing to hold firm in the NASDAQ stock still managing to power on hire. Remember we've had seven straight weeks of gains in the S and P five hundred, but still the moon music is positive inequities even though in the bob market we're selling off a little bit. Is we get a little bit more caution coming from some of

Let's move on to look at the individual companies. They're on the move.

There is so much winding and unwinding of MNA is extraordinary. Today you see Vodaphone up four point two percent. These are the ADRs traded here in the United States of what is European telecom juggernaut that's looking to tie up its Italian unit with that of Iliad in France as well. To keep an eye on that particular coming together and Italian coordination. I'm looking at Coupang, South Korean e commerce company looking to basically save a down and out UK

This particular deal.

Five hundred million dollars of bridge loans going in Coupang basically teaming up with another company to be able to buy this company out of an administration. It's down some four percent on the purchase news Lumina one point eight percent higher. This is as they are forced to divest of its grail. This has called a cancer technology company that it bought. And look, once again, US really feeling that they had to not go forward with this particular bit of M and A even though they fought hard.

They are divesting of that particular acid ed.

All right, let's get it a deep dive now on generative AI and what's actually happened so far in the world of AI. Joining us now is Mayland Thompson, Big Vic, Amazon Web Services vice President. It's great to have you back on the program. And what I want to get into is detail. You know, I talked a lot this year about Amazon Aws Bedrock. What's being offered now that the year is coming to close, myl what is the one thing that most customers have come to you and asked for.

Customers all over the world, as you know, are looking to deploy generative AI at scale, but they want to do it responsibly, they want to do it safely, and so that really comes.

Down to your data.

What is the data driving your business today and how can you put that data to work as well as how can you do it securely responsibly by default. And that is just top of mind for CEOs all over the world, no matter what industry they're in.

But is that specifically them saying, Okay, we want to use because we can access all kinds of third party models, or because it's a place they can build their own.

I think the first reason why customers come to Amazon Bedrock.

Is about choice.

There's not going to be one model that every single customer is going to use. In fact, what we're seeing that customers are doing today is they're actually using a lot of different models for different purposes.

I'll give you an example.

Adobe launched a generative pill in Photoshop back in May, and generative phil is normously popular with creatives. That's actually the most used feature of Photoshop. In fact, it's been adopted ten times faster than any other feature in Photoshop history. And Adobe built that on AWLS, and they built it using a variety of different models, large language models and

How price sensitive are these customers at the moment, Minn Because we enter this period of AI exuberance at a time of economic realities where companies need to cut costs in many ways.

Well, I think.

Cost is always going to be front and center of any large scale deployment, and that's what customers are really trying to do with generative AI. They're trying to use generative AI not just to transform their customer experiences. For example, into it, which has over one hundred million small business and consumer customers today, into It rolled out something called assist in all of their into it portfolio. So if

Man, I know you're a thoughtful person when it comes to ultimately humanity. At the same time as working within technology or someone who thinks a lot about Asians and Amazon you're sponsoring women within technology, and therefore, I'm sure you're thinking about the implications of AI II more broadly. And to that end, when you are thinking about companies cutting costs, how do you feel about the fact that we're going to either be or menting humanity or indeed perhaps putting a few out of jobs.

Is that something that you talk about a lot within the business.

Well, you know, I think.

The world wants to be responsible in how we're using AI. For me personally, Carolin, I'm very excited about generative AI because for me, it levels the playing field for data literacy. It brings everybody, as it were, to the data table today. You know, if you think about it, the way we make sense of our world is often with numbers, and we use spreadsheets, and we use data queries. But there's a lot of people out there who don't have exposure

Now.

In order to do this at scale, AWS is all about being at scale. We've been doing AWS cloud services now for just about eighteen years.

Uh.

We have to be able to do it responsibly. We have to be able to do it in a way where you know, one of the top three data challenges that you know I I hear from customers when I talk to them, is you know, like, how can I be my own best auditor today? This is a major initiative right now, right like the world of regulation has no yet arrived and generative AI, but you know it will, you know it will.

Uh.

And so what we do is we try to think about, you know, how can we build that capability that audit trail into our AWS UH managed AI solutions like Amazon Bedrock by default. So if you're using Amazon Bedrock, as over ten thousand customers are, uh, you are able to get an audit trail for not just your user interactions with the model, but also how is the model making decisions? And that audit trail is logged and available for your use for any type of compliance you need, and it's

It's the next level to.

Be responsible by default, to be responsible in an automated way, and that's what we're building into our AI services my lan.

Last month, Adam joined me on the program to talk about next gen trainingum Trainium two, but also the deeper relationship with Nvidia. In the three weeks that have followed, can you give us any granular detail on how selective customers have been and how deeply they think about which silicon their workloads are being trained on.

Well, fundamentally, customers want choice, and for us, we've had over thirteen years of a deep partnership with Nvidia, which is going to continue into the next year. We've announced how the Nvidia Grace Happer superchip is going to be offered through AWS. It's gonna be in a graded with our AWS Nitro security and virtualization system. But customers are about choice, and we have been building our own custom silicon now since twenty eighteen. We have four generations of

So our goal is.

To give AWS customers whatever choice they want, whether it's using our partnership that we've had with an Nvidia for their choices, or to use our custom silicon, which we think gives the best price for performance as well as the right energy savings energy efficiency that we know the world wants as well.

Just at the forefront of everything we've been discussing throughout twenty twenty three.

It's a joy to catch up with you. Thank you for joining the show.

Maylan Thompson Quick of course of Amazon Web Services. Meanwhile coming up that we're going to be continuing the conversation on AI and discuss some of the ethical implications the ethical concerns of the technology. Alex Hannan, director Research of the Distributed AI Research, going to be joining the show as the Bloomberg Technology.

Earlier in the program, we discussed concerns regarding AI's impact on minorities and marginalized communities. I want to continue that conversation and bring in Alex Hanner, director of research at the Distributed Ai Research Institute, whose work centers on the data use in new computational technologies and the way in

Yeah, I mean, that was a fascinating story, and it's something that's prevalent within the industry, especially in companies that are doing work in AI. Google, Microsoft, Meta, all the big tech firms focusing on AI development. There is a complete and epidemic of just the inability to really hire and retain Black, Latin X and minority talent, and that has big repercussions for the way that these things are developed.

One of the questions I posted to our reporter is, well, what was the result of this reporting?

What did Nvidia do?

And we read in video's statement on the story several times earlier, but one of the answers was to de bias some of the models that they worked on. Does that work if they've already been trained and are in the public domain to go back and de bias them. How do you respond to that as a sort of fix.

There's no actual way to completely de bias a model. People can test for it, and there are methods for auditing, for red teaming, for ensuring that it doesn't have sort of catastrophic sort of results, but there are always going

I'm interested that we were just having a conversation with my line I've wrote aws really saying her perspective is that her clients are thinking, trying to think ahead of regulation, trying to think about compliance, governance, auditing, And you were just talking about red teaming in the way in which you can really stress test some of the underlying foundational models and indeed their application. Alex, are you finding that Corporate America cares enough about this?

It's really hard to say, because the way that Corporate America focuses on it, they tend to really not release what the results of those stress tests are the kind of transparency that we have into data, into the red teaming, into the auditing that we're doing. That they're doing is pretty much a black box. We don't know what's actually

We're done an auditor, but.

There are many different types of auditors out there. There's no way to actually get in there and actually see what they're doing in any kind of transparent way. So the research community doesn't have the visibility. External auditors don't have this visibility, and so it's really hard to see if we can take them at their word.

The question keeps something one that we will have to address in twenty twenty four, and for now, we thank you for helping us address a somewhat twenty three. Alex Hannah, great to have you back on the show. Director of Research at the distributed AI research institute.

Bluestone Equity Partners.

You know it for its investments in sports media technology the Intersection, and its latest investment is going to be delivering growth in the world of sports entertainment. How you consume it? With its aipowered video editing software, heitch talkers through it. Bobby Sharma is founding and managing partner at

So?

Video Verse is the company. It's founded in India and based here in the US, California. Their flagship product is called Magnify, and what it does is it leverages artificial intelligence, computer vision, and machine learning to automate in real time the development of I should say, the curation of short form content and highlights from live and long form content like sports and even news.

I can see the application for our particular industry, the amount that we need to be putting out long form conversations, finding the most pithy bit, putting it onto our social media, and they're like, where is the uptic coming from? When it's born out of India in America, where is the client engagement?

So video Verse and works with clients such as Champions League, the Indian Premier League, the massive success story that is something my former colleagues at IMG where I spent four years building professional sports leagues around the world, architected for the Cricket Federation. They work with Wimbledon, the US Open, the Australian Open, even NCAA basketball and large Division one

Bobby.

There is no greater agony when you're a sports fan than when you are not watching a game. You're somewhere, it doesn't matter where, maybe your mother in law's for dinner or a show, and you know what's happened, but you can't see the highlight.

But here's my question for you.

Does the platform choose what's important in the highlight or is it still a human saying this is important, but the process of editing is automated.

I think that's the biggest differentiator between video Verse and its flagship Magnify and its nearest competitor. There's a human element involved with other existing cutting edge technology that this circumvents. It's fully automated and through the machine learning that AI technology can drive the automatic curation and distribution of those highlights. So instead of waiting minutes or hours for that highlight,

Well, there an investment coming out of that three hundred million fund.

I love talking about it.

Abishama, founder and managing partner over at Bluestone Equity Partners.

You thank you for your time.

I mean, and I'm sure you weren't trying to insinuate your wife and your mother in law.

Don't minu watching some sort.

Of for example that this week, of all weeks, I will live to regret. That does it For this edition of Bloomberg Technology Massive, Massive week Ahead, don't forget to recap on the pod. Thanks for listening from San Francisco, New York City. This is Bloomberg