From Mahart.
We're Innovation, Money and Power Collie in Silicon Valley, NBN.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
I'm Caroline Hyde at Bloomberg's world headquarters in New York. Ed Ludlow is at Google Io and joins us shortly.
This is Blombag Technology coming up.
Full earnings coverage ahead, we have Airbnb suffering its worst day ever as a public company, and an interview with the Akama CEO on its report. Details they follow. Plus we'll cover the world of electric vehicles from Rivian earnings to the conversation with CEO of Blink Charging.
We've got you covered.
And we cover the latest in artificial intelligence with the CEO of Scale AI and go live of course to Google Io event. Our our own Ed Ludlow is on the gram. At first, let's check in on these markets as we assess a little bit of a mood shift today, money moving into tech stocks. Why because the inflationary pressure dials down a bit CPI print coming in below that
five percent handle. We therefore have NASDAC of course interest straight sensitive tech stocks on the up seven tenths of a percent two year yield on the down as we expect, maybe the Federal Reserve won't have to hike so hard going forward.
Maybe a pause is on the agenda.
We're off by almost eight basis points on the two year yield the front end of the curve. The US dollar index also drops on that view that we get a more dubbish tone going forward.
Move it on, and.
Let's have a little look at what's happening in the world of crypto, because we are indeed seeing dollar lower, so crypto on the upside, we're up by one point nine percent on the OG that is Bitcoin twenty eight thousand is currently where we trade. Though it's interesting that we're still seeing some of the moon music around crypto just being on the dour side, Let's stick with it. Jane Street Group Jump Crypto two of the world's top
market making firms. They're actually pulling back from trading digital assets here in the United States. That's as regulators crack down on the industry. Look, Jane Street is going even further. It's scaling back at scrypto ambissions globally because regulatorly uncertainty has made it difficult for the firm to operate the business so much in the world of crypto, so much
in the world of tech handings. More broadly, let's get to it, because Airbnb shares wow volatility there worst day in fact on record as after reporting pretty muted Outlook, let's get the inside track with Tom White's DA Davidson's senior research analyst, And do you think what we heard from the company in terms of its forwardlooking guidance vindicates the plunge in the share price today?
Yeah?
Look, I think you know Airbnb is it's a stock that's got a premium valuation relative to its peers, and with a premium valuation typically you get elevated expectations, particularly around Coraly or ningx prints. So look, we're not surprised to see the stock sell off a bit today, you know.
I think the debate around the shares now is whether the guidance, which shows basically increased marketing investment relative to what the street was expecting, you know, whether that increase spend is really just a timing related issue and just sort of a pull forward of marketing from later in the year to the beginning of the year, or if it's something more structural, so you know, near term numbers are going down. You know, that's why the staff is
going down a bit. But you know, we still see value and share of Airbnb over a longer term time horizon.
I mean overall, when you put together all the analyst recommendations and price targets are still they think it's going to go high.
One hundred and thirty two dollars.
The general price target was seeing seventeen buyers, only fourteen cells on the stock overall, and from your perspective, when you have a by rating one hundred and twenty seven dollars, it is in one hundred and forty dollars price target. Tom, What do you make of the macro environment. We're just hearing about inflation, the pressure rolling over, But it looks as though airline prices are coming down, hotel prices are coming down.
Is that good or bad for Airbnb?
Well, look, I think any kind of pressure on the consumer, any pressure on discretionary spending, is not good for travel spending overall. What we've seen though, over the course of you know, prior downturns, is that leisure travel spending is is quite a resilient category, particularly if you look on a global basis. You know, even when times are tough, people still like to get away. I still like to take vacations.
You know.
I think in some ways, Airbnb's recent announcement of their Airbnb Rooms offering, it's maybe a little bit of a way to kind of get get ahead of that. Airbnb Rooms is sort of an example of Airbnb kind of disrupting itself a little bit by offering a significantly lower priced offerings in single rooms in people's homes or apartments. I think they said last night, eighty percent of that
inventory is less than one hundred dollars per night. So, you know, we think overall travel is going to be resilient, and we think Airbnb, because of the variety of the listings it has, is probably going to be more resilient than other online travel assets.
Interesting, what about the market share that seems to being eked out a little bit by booking dot Com, by vlbo, by some of the competitors out there, not to mention the old hotel industry as well.
Yeah, look, I think, you know, talking about marketing shares right now is a little bit tricky just because of the comps, the differences in the comps. Right you know, Airbnb is camping you know, over the last few years has had explosive growth. Right during the pandemic, they were sort of the only game in town. People didn't feel comfortable going to big cities or going into hotels where they had.
To you know, mingle with other folks.
Airbnb's comps are relatively tougher now, whereas the traditional kind of OTAs or the hotel industry comps are a little bit easier. So just looking at the growth rates kind of you know, this quarter, next quarter, I think doesn't tell you know, kind of the entire story. You know, the bottom line is is a lot of these online travel assets all continue to grow, you know, significantly quickly.
I think, you know, discussions about market share you know, need to be looked at in sort of a longer term perspective.
Well said, it's great to have some time Tony, Tom. Thank you so much, Tom White of DA Davidson, as we say, the biggest drop on records of the Airbnb, but still got a seventy to seventy three billion dollar market capitalization.
Let's talk about the.
Macro environment, which BMB is currently well working within inflation data, as we said, without today showing signs of actually a bit of a cooling CPI rising just by four point nine percent on a year on year basis. But let's go into the insight of how you and I are spending.
Are we looking at luxury? Are we holding back our purchases Rackaton President, I'm pleased to say, Kristin gull is with us and Rakuton is an online shopping platform partners in thousands of stores to provide data, expertise, technology both businesses and consumers. And also you give cash back, and that's a key draw Kristin. What are you seeing in consumers desire to be spending right now, particularly on the luxury side of things.
We were very worried coming into this year that with all of the inflation pressure, that consumers were going to spend significantly less than they'd spent last year. And actually, on the contrary, we've seen a relatively stable spending environment, both on the lower end and the world of marketplaces and in the world of mid tier department stores. But luxury has been booming, and really that luxury thread carried throughout the pandemic and has continued into this year in
a significant strength. And how people are spending despite the fact that the economy makes them a little nervous.
So all day in some ways buying on the luxury en because it's deemed an investment in some way if I'm thinking of actual, real tangible goods.
That's exactly what it is.
We have a lot of data that's telling us that people are spending differently now, and there's two ways that they're spending differently. Number one, buying less but making it count more. Number two dealing with things like sustainability, where they want to buy fewer items with less impact on the environment. And what that leads to is people investing in either resale or luxury, and investing in luxury is something that increasingly younger and younger audiences are playing in.
We are seeing a lot of data that gen Z is buying luxury at a significantly earlier age than other generations, and I think that really points to people changing the way that they spend.
But also there's different offerings of the way in which they spend. How much you seeing a competitive threat from well the real reel or eBay or web paces you can go and buy, se can hand or pre used luxury items as an investment. Where do you see that focus from Rackington in the moment.
I think right now that is a massive area of growth in the retail industry is the world of resale, and I think for a lot of these younger consumers that was what brought them into into the luxury fold in the first place. I think the interesting thing is now luxury companies are trying to get in on this
volume and get in on that relationship. So you have people like Gucci offering their own resale world on their website right now, and basically what it means is that they want to own the customer in a way that isn't disintermediated by resale sites. So that's something that I see as part of a massive growth story in retail is resale overall, but not just on resale platforms, but by brands.
How do you keep your market share in this environment we're all talking about oltificial intelligence, We're all thinking about how we can interact with a consumer more swiftly productively. How are you looking at updating recuteon and what your offering looks like when we're interfacing the e commerce platform.
At the end of the day, our job is to drive growth for our retail partners, and we're doing that in a number of different ways. The first is by increasing the number of players on our site that appeal to consumers, things like resale, things like more luxury players are really really important to us. The second is there's a level of personalization that becomes important. We give cash
back to our consumers for shopping at our retailers. That cash back is increasingly personalized to do things like incentivize you to try stores that you've never tried before, to incentivize you to make a second purchase at a retailer that you've experienced before.
That level of value.
That we drive, not only is it valuable to our retailers, but it's also really valuable to our consumers.
So when you say at the moment, you keep a real loyal customer, in many ways, you say when a retailer leaves, quite often the shopper remains on seventy five percent of the time. Here, what is your dream new customer? From a client perspective, From a retailer perspective, you're just talking about Gucci there. Who do you want to lure onto the platform that you haven't got yet?
Yeah, I think increasingly there is a younger consumer that we're going after. The sort of younger millennial audience and gen Z is really important to us. A lot of what we've been doing over the last few years is bringing on a lot of direct to consumer brands that are more important to that audience and that generation, and then to your point, expanding our luxury environment overall on the platform. We have played really, really hard in luxury
department stores for a long time. Individual brands is the next thing I'd love to tackle because that does actually drive a lot of value for that younger millennial and gen Z.
Consumer or someone who brings a lot of experience to the role, having been well with Recuten as a general manager since twenty eighteen, plenty of other places before that. So Kris Single, we thank you so much for spending some time with us with Q ten president there Now from luxury spending to what's going on in the world of Mountain View, California right now, ed and manner luxury.
You're covering Google though developers conference all day for us. What's the key themes?
Yeah, Look, artificial intelligence just at the heart of everything here. Thousands of people as Shoreline mountain View, two hundred and thirty thousand union worldwide. And remember when Google introduced Barred in February. It was always billed as a creative companion, not a replacement for the core search product. So that's the question. What are we going to find out today about how you integrate the large Language Model the LM
into a next generation search engine. What does that functionality look like? And what about Google's other software offerings. And that's before we even get to hardware.
Caroline, Yeah, we'll address that a little bit later with you.
Brilliant to have you on the ground there.
You're going to be back with us and later in the hour, but we're also going to be there throughout the day.
We thank you so much. Let's go back to the earnings.
Let's look at Acamai Technologies shares actually having their best day since twenty twenty after it reported first all results that meat expectations. It gave a fullier forecast that was ahead of the AMAS consensus. Let's talk about it all with the CEO of Acami, Tom Nayton. Doctor Layton, it's
great to have some time with you. Strong given challenging macroheadwinds and the pricing pressure, what do you make of the economic environment which you're currently managing to weather better than some had anticipated.
It is a challenging environment. You know, customers are trying to cut back on costs. There are a couple of ways that help us mitigate that though.
You know.
The first is folks are really.
Concerned about security and reliability, especially in the financial sector. Now, the last thing a major bank wants is to have an outage with the concern that people will think something's wrong, you get a run and that's a big challenge and we're the you know, the best provider when it comes to reliability and security.
So that's been you know, helpful for us.
Also, as companies need to cut cost we can help them.
With our compute solution.
You know that's now integrated into our delivery platform. And you know we are the biggest when it comes to delivery and have a very economical platform for doing that, and so we can help customers reduce their costs access to cloud computing and delivery.
What about your buildout though, Tdcowen saying that they are longer term a bit more cautious on your stock given the capital expenditure intensity that's needed to build out the compute part.
How are you managing those as a costs?
Yeah, so We are investing this year to you know, jumpstart the base platform, and that will largely be done by the end of Q three, and then going forward from there, the buildout expense is proportional to the revenue. So if we get a lot of revenue growth, which is what we're hoping and is a good news story,
then there'll be more capital expense. And you know, if it's a more modest growth on revenue, then you know, there won't be all that much capex to worry about, so that'll be pretty much, you know, done with by the end of Q three. We just turned on our first new data center and we have fourteen more planned over the next couple of quarters.
You really do.
Sound optimistic about the client still spending in this economic environment, particularly on security. Just push back therefore on analysts over at Guggenheim who are saying your low double digit guidance in terms of security growth, they actually say it's somewhat implausible because of this macro environment and the sharp acceleration that's needed a new business. Why do you think that this is plausible even though you've got some worrying about it.
Well, we have the market leading solutions for web at firewall, you've got to have that market leading solution for bot management, market leading solution for ransomware and defending against that, you know, And and think about some of the older attacks that are maybe you think of them as old news, like
denial of service. You know, we just in the last few months you have the killnet coordinated d DOS attacks against you know, the nation's leading medical centers for goodness sake, and so security is still very much needed, and you know, when you're the market leader in these solutions like akamie is, I'm very optimistic about low double digit growth this year
for our security business. And of course now we're adding API security, and as you know, that's very much in the news with all the API attacks that have taken place recently.
Yes, exactly, let's talk from API to AI as well more broadly, doctor Layton, because I mean, you're a man of fifty patents to your name in terms of content delivery and Internet protocols. But I'm pretty sure you're thinking the way in which artificial intelligence is increasing some of those security attacks as we mentioned, but ultimately upending many a business model. Right now, Is there anyway in which you're thinking that you can harness that or that you're worrying about it.
You know, we use a and a lot of our products, particularly in security for anomaly detection, detecting attackers really you know, very important.
We don't sell AI products per se.
Now, I think there's been some very interesting advances recently an AI generative AI, and you know, one thing about that is it's compute intensive, and so there is the prospect of a lot more need for compute cycles and that's something that you know, we could ultimately benefit us
with our compute platform. In fact, you know, there's early work going on now that would you know, using algorithms in scientific methods, uh, make it more affordable so that you could do a lot of the work on inference engines using CPUs instead of GPUs, which.
Is a lot more efficient.
So I think there's a lot of exciting results to come there and ultimately, you know, good for business.
And it really is interesting that we've had from other security software companies out there, thinking at ten with a revenue forecast that was a bit lackluster cloud flair, we have had this worry that people aren't going to invest in much as much in securing themselves in this environment. So is there any sign from any of your clients that they're just going to have to pull back in that area or none at all from you.
It does slow down sales cycle some you know, in our growth rate, even in the low double digits, is less than it was last year. That said, we had a strong bookings quarter in security, and in fact, you know, we ended up you know, taking business away from you know, some of the companies that you mentioned, particularly in the financial sector where you know, the leading financial institutions just can't have an outage or an incident or have an
attack be successful in this environment. And so there's a I think they turned to Akami more now so where you might see some company struggling a bit, it's on balance within this environment.
Good for Akami, doctor Ayton, Tom Layton, Akam, I see and we thank you for your winning us. We need spelling out the environment in which we currently find ourselves. Meanwhile, we're also watching other companies that actually are not performing as well on the day as Zachameayas. Just check out on internet infrastructure company Twilio falling in terms of sixteen percent.
On the day.
This is really is struggling to find its growth right now, we overall see the company posting numbers that did show a growth slowdown overall, and this is a business that's trying to find it's footing amid the macro weak macro that Jefferies are saying a small beat overall in this quarter, but it really is the margin turnaround, and this particular company is being overshadowed by a weak macro picture going forward.
So deterioration its net revenue retention rate in the outlook for the second quarter points to more difficult days ahead coming up. Look, let's talk about days ahead in the race to compete with the likes of Chatchepete. More on how Softbag s getting in on the action US next as a bloomberg time now for Talking Tech and first up monthly sales and Taiwan inconduct of Manufacturing TSMC fell for a second month as his consumer demand for electronics just slows sales.
And made to order chips.
They're down fourteen percent from a year earlier, signaling that the chip sectors slump skeet to bottom. Meanwhile, also over in Asia, soft Banks Mobile Unit is building a Japanese version of You Guessed at Chatchipt, joining the already intense race to create the next generation AI. The telecoms company is actually setting up a new entity in March to develop the technology. The CEO didn't elaborate on the project's
goals or progress so far. And let's look at content right now, because Tucker Carlson says that he's turning to Twitter to launch a new show as after, of course, being fired from Fox News last month, Carlson posted a three minute video online saying like he would bring a new version of his Fox News program, although says.
He hasn't signed any sort of deal.
But let's dig into this with plans not send and Stone, what would a program actually look like on a platform like Twitter? And one of the concerns around content moderation, Felix Jillett is with us.
Is flomby News interesting.
That many would say he left Fox or was pushed out a Fox his advertisers were uncomfortable, So what makes how does is it subscription based this time around?
It's kind of hard to say, because, yeah, advertisers were uncomfortable with Tucker Carlson the show on Fox. They've been uncomfortable with Elon Musk's version of Twitter. So do you take two negatives, does it make a positive. It's hard to imagine that happening. You know, Elon Musk has been trying to get more subscription money for Twitter, getting people to sign up for Twitter Blue. That's been a struggle.
So maybe getting some very die hard Tucker Carlson fans to sign up and subscribe to a show.
It's all a little bit hard to imagine.
I mean, if you think about like video on Twitter. I was thinking about what's the most successful video on Twitter over the years, I would have to say it's Vine, which was six second loops of comedians and people talking. And you're going to take an hour long show and somehow put it on this platform that has no real history of TV shows.
This show used to stream on Twitter.
But there is an interesting viewpoint overall about just the way in which we consume as well. I mean, how much is there a vindication that people will want three minute long pieces of information indeed shows anywhere you go, Because is there anything that resembles another social media network that's done content delivery, done shows like this in a decent manner.
I mean, you know, Snapchat, YouTube, Facebook, like, people have experimented with different links and different kinds of shows, political shows on social media platforms. Yeah, and you know, Tucker, he has these home studios that he built during the pandemic. He's got a very robust and loyal audience. So you know,
how is that going to be monitored. It's hard to imagine, but it does give him a voice in the platform to keep himself relevant during the political campaign that's coming up, as opposed to just being on the sidelines until he finds a new cable network that would take.
Him rumble shares. On that note, we're on the down side after the news. Felix Jenette always great to get his take on all these things. We thank him. Welcome back to BlueBag Technology. I'm Caroline Hide in New York. Let's have a quick check on your markets because we've actually seen a reprieve in tech stocks again on the back of inflation data that shows maybe this pricing pressure
is cooling. Of course, interest rates sensitive tech stocks do well, and then as like one hundred more than seven ten percent as inflation comes in sub five percent year on year, we're looking at ten year yield getting a bid. That's as we maybe anticipate the Fed will maybe be able to take that pause in its hiking cycle. We're down seven basis points. Bitcoin does higher as the dollar goes lower. We're up more than two percent.
Flick it on.
Let's go into some of the individual names, though, because we've had mixtra amount of earning still to be digesting. A firm on the higher side up more than four percent, even there was some caution after the numbers dropped about overall by now pay later the overall headwinds in this macro environment of consumer but many an analyst thinking that this is a stock that can weather.
Can perform at the moment. So we're up more than four percent.
Data Dog, it's a local company, New York based up six percent. Guess what's gone. An integration with open ai and people like it, the fact that it's gonna be checking in on how companies interact with chatchibt and like product products. So Data Dog on the upside. Airbnb very much on the downside, having its worse fall as a publicly traded company after its forward looking guidance was a little bit weak. Let's talk about other earnings, because there
are more they can fast in the EV space. In particular, Blink Charging just reported revenue for the first quarter nook. It missed some analystsessiments out there, but it's still more than doubling revenues. The ev Charging Stations Company is really continuing to transition to an in house manufacturing model. Gross margin profile is expected to improve throughout twenty twenty three and the next year. Let's talk about it all with the relative we knew recently appointed CEO, Brendan Jones.
Of course you were other business.
Already and now taking the CEO mantel Brendan and just talk to us about the revenue drivers here. Who is wanting to get their hands on these charging stations across the United States?
Absolutely so, this space is on fire.
As more and more states start to adopt provisions that say that internal combustion engines can no longer be sold past twenty thirty five, we're seeing an increasing emphasis on charging and who's.
Asking for it.
You've got everything from municipalities to private ownerships, to big real estate groups, to state parks that want to have charging for new sport utility vehicles that are EVY, and.
Of course the federal government. We're very proud to have been one.
The United States Post Office Service put out a bid for four thousand for forty five thousand chargers. We won part of that deal and we've already began to install those chargers with USPS. So the goal right now is to make sure that we can get as many chargers out there to service the ED buying public and blink right now.
As you saw, we're on digit.
Double digit growth between last year and this year, and we see that trend continuing for the foreseeable future.
How does the US stack up versus Europe, Asia, Latin America. I know these are all markets that you're analyzing and in yes.
So what you see in Europe is a little bit progression of the model. So they're much further ahead on both the car sales and the penetration of chargers in the public space. So US is following right behind that. So while there a little ahead, we see ourselves as catching up.
Now.
A lot in Europe is policy driven to mandate charging and mandate the purchase of electric vehicles. We have some policy initiatives that make it easy to adopt, and then we have the federal funding for the Nevy program, the two billion dollars from the Biden administration to accelerate infrastructure.
So the US is more show US. But I'll tell you the autoims they are bringing out the cars today.
You have some of the most versatile, sexiest high speed cars on the market.
That all drives.
What do you happen?
So I transitioned just recently out of Audietron, which is a beautiful car, you know, full ev all the way, but all everything you expected in a luxury car. Now I'm looking at a couple of different models, some domestic and some meat overseas as well.
So my goal in life was always on a Mustang.
So I'm not hitting that it might be a monkey, but I'm definitely leading that direction.
What about the inside focus on where you're buying? But what about the innovation that blinks doing at the moment as well?
Because yes, it would.
Be lovely, of course to have the infrastructure there that we can all pull up and be able to speedily charge our cars, But what about if you're on the move, what about if you've been breaking down you're having I mean, I know you had a whole host of different kind of options on array at CS this one.
Yeah, and absolutely what we want to do is service the pallethor of charging needs for the public. And that means you've got to have fast chargers on the highway that can fuel a vehicle in under thirty minutes or in some cases under fifteen depending on the speed of the battery.
Then you also have to havet home based charging.
When we look at McKinsey data, it tells us that ninety percent of the charging that's going to take place globally is what we call level two charging, and then the other ten percent is going to be DC fast charging, which is the faster must have charging. But also, as you point it out, there's this need for what we call a rescue charger. So if you run out of charge, just like you run out of gas, we also have products to satisfy that market, so.
We can charge you up on the go and get you back to a charger as soon as possible.
So our job is to cover the home, to cover the public, to cover the municipalities, and to cover the highway with charging and make sure we have options and innovative products to serve the general the general needs out there.
Are you growing that and innovating organically or I know that you make quite a lot of acquisitions as well. Do you want to do bolt on us to be able to add that sort of level of offering.
Yeah, So we continue to be an inquisitive company. So where acquisitions make sense, we will pursue them. We just acquired a car sharing company called Envoy, who basically has people engage with them on a car by car basis. They get it, they're all evs, They get it for a day, for an hour, etc.
They charge on our charging stations, and then we have.
Blue La, which is our mobility program in Los Angeles, and under Blue La, we have two hundred stations that have two to three cars on them and the general public comes in there, takes a car for a day, gets a chance to be in an EV and they serve both the general public and the underserved communities simultaneously.
And we do both the cars and the charging.
Brendan, what's the regulatory environment for you thanking thesels of acquisitions at the moment. I know you're not a big cat player yet at the moment, but what are the concerns about making acquisitions of other companies.
Well, you have to make sure that these acquisitions, when we're looking at.
Them, you have a high degree of synergies.
If you don't, it doesn't make sense because the acquisition of the in and of itself has to fit into our business models. If it doesn't, we're going to pass because the synergies of which makes that very valid. And when you look at acquisitions in general and you benchmark other companies, you see where they failed was they didn't get the synergies. So we put a lot of money.
We work with McKenzie to outline, set a path, and set a timeline associated to bid revenue sentergies, g anda sentergies, and then product synergies across the board.
Without that, we're not going to do any acquisitions.
We need that to be efficient and to really get to global scale.
Well, thank you giving us the global perspective link CEO Friend and Jones. And look, let's just focus on M and A a little bit more in the world of tech because Bloomberg research has found that US government's current aggressive stance on anti trust it's actually really chilling merger activity among the country's biggest companies for some deals never
making it past the boardroom. Let's bring in and peace to say right here in Neil Leah Nyland, who's over from Washington to break it all down, and this story really showing just how much of a chilling effect. Just can you paint the picture of where we've been and where we've come to because of the action of the administration.
Yeah, so the Biden administration really came in strong on anti trust. They really felt that the past administrations were a little too easy on mergers and letting big deals go through with only settlements or maybe like challenging only a couple of the bigger ones. But the Biden administration has been really aggressive on this so far. Since the anti trust enforcers came in in July of twenty twenty one, they have challenged seventeen cases in court, but they've also
raised anti trust concerns about another twenty six. So those abandoned, those deals were abandoned before they even made it to court. So they have quite a record of, you know, killing off deals so far.
How much are they ultimately tech savvy.
We know that the FTC that got a very much a leaderly A Khan, who's focused on the world of technology, did a lot of work within big tech. But there is a talk now about AI being a new area in which we get competitive overreach and monopolistic capabilities. How much of those of the conversations you're having, is it all about big tech and stifling there or just this go cross industry.
It goes across industry, as if you look at a lot of the deals that they have blocked, You've seen a lot in the healthcare sector, you see some in you know, brick and mortar industries like concrete and cement, But the big tech ones are definitely ones that are they're paying a lot of attention to.
You know.
The big case that the FTC challenged last year was the one between meta platforms and Within, which was actually just a small stirred up focused on virtual reality. One of the anecdotes in our story was actually about Google abandoning an acquisition because they had some concerns about the antitrust problems.
That it could raise.
And both of the leaders of the antrus agencies right now, that's Lena Khan at the FTC and Jonathan Kanter at the Justice Department, have said that they're actually looking really closely at AI because they're very concerned that some of the biggest companies, the Microsofts, the Googles, the Amazons of the world, really have the resources to devote to AI, and they're really concerned that they might try, you know, buying up a lot of the people who are really
focused on that and sort of dominating the AI market and the way that they have really been able to dominate the web.
What's interesting is some would say.
FTC Action, for example, hasn't actually been that successful. Yeah, does that give companies speaking to a bit more resilience and optimism they can get these deals through? Or they look more what the UK's up to with Microsoft and they think, okay.
No, it really depends. You know, companies that are more risk averse aren't really going to want to put the time and the money into this because so the increase any trust really is dragging some of these things out. But really big deals like Microsoft Activision, they're still going forward, even in the face of regulatory scrutiny. So that one the UK has blocked the FTC has brought litigation against it that's supposed to go to trial later this year.
We're still waiting on the EU to make a decision. It will later this month, but it's unclear if that one's going to go through, just because when you get that many lawsuits against a deal, it becomes really hard to move forward.
Nana and it's great to have you right here in New York. Appreciate it. We thank her for that great story. And Ashley, we were just talking about the worries around AI dominance. Well, coming up, we've got a great conversation to have in the world degenerative AI with a leader. Scale AI is deploying new tools to help its clients safely and responsibly integrate the technology into their systems. We're going to have a conversation with the founder, the CEO, Alexandra Wang.
But let's talk about.
Potential monopolies building in the space, or want to be monopolies. Because panenteer up another day after its earnings came out and they talked about the unprecedented demand for its own AI offering. The CEO alex cart get this saying that they just want to take the whole market.
That's a strategy for AI apparently from New York. This a Bloomberg.
Scale AI as a leader in creating generative AI systems and it's launching two new platforms tell its customers apply AI systems within their networks. Joining now is Alexander Wang, the founder and CEO of Scale AI, and alex at the moment, I'm trying to wade through Panenteer that was
to take the whole market. We had salesforce on interjecting chat GPT within its offerings or Slack, and for Tableau we've got IBM with Watson X. What exactly are you offering that's kind of different from the others.
Yeah, So at Scale we've been in the AI industry for more than seven years now. We've been quietly powering much of the modern revolution in generative AI. And what we're seeing today is a lot of AI tourists pretending to be AI natives. You know, there's a lot of companies who are not selling solutions. They're ultimately just selling vaporware and our products, you know, they aren't coming soon.
They're in the hands of customers today, from the Fortune five hundred to the US Department of Defense, and we don't see many other platforms that can say that.
So today we're proud.
To introduce our two new generative AI platforms, Scale Donovan and Scale EGP to unlock the power of AI for every industry, from the US government to global enterprise. Our Donovan product is our platform, which is the first large language model deployed on a classified network for the US government and with our war fighters connect in minutes instead
of weeks. And our customers today include the US Army's eighteen Airborne Corps, the DoD's CDAO and the Joint All Demand Command and Control Effort in particular, and the Marine Corps University School of Advanced Warfighting.
So just to go back, are you saying that palenteer with its machine learning and it's already integration with the Defense Partment, for example, that's an AI tourist.
So, you know, I think the key thing to look at with any one of these platforms is whether or not they have customers that are live with the technology.
Today or are using it actively.
And you know, I think there are plenty of platforms that are touting huge announcements but that do not have any live customers and any activity today, and they have oftentimes coming soon as sort of the headline on their homepages. So I think that's one of the key things to
look at. You know, we at scale we've worked with open AI since twenty nineteen, or you have much of the technology that's undergirded chat, GPT and other technologies work with much of the rest of the ecosystems such as Microsoft, meta working folks like Stability, adept, carper cohere, and so
this is you know, we've been in this industry. We have we're one of the companies with the greatest amount of experience in generative AI, and we're excited to actually bring that expertise to the enterprise, EMPTO government customers.
And to the White House in terms of evaluating platforms.
Right, just remind us.
That is it going to be your platform that they're using at Defcon thirty one to be able to basically test and understand how hugging Face and topic Google actually work.
Yeah, exactly.
So we are Switzerland, we are not behold into any one platform, and in fact, we've been quietly partnering with most of the AI industry. As a result, we're the perfect partner to work with the White House and with Defcon in using our platform to actually evaluate all of these models that are being built and understand what the
implications and safety implications of these models are. You know, we believe that progress and foundation models needs to have been hand in hand and alongside progress and model evaluation and safety, and that's really what we've built our platform to help enable and why our platform is going to be the one that's used again in partnership with White House, in partnership with Defcon to help understand these models.
What do you think you'll find, Alex, Do you think you'll find safe and solid space is being crafted for new models or you're a little bit more worried, you know.
I think broadly within the industry. One of the things that's happened. One of the things that's happened is these models have all been released and have have been released down with the world before much of this testing has taken place out in the public, and so you know, I think invariably we're going to find some things that
are that are going to be concerning. But I think we're also going to find that many of the builders of these models have actually put a huge amount of thought into the systems that they're developing, and so I
think we'll see a range. You know, there will be some models that are significantly safer than others, and even the models that are safe, I think we'll continue to find things that you know, we need to work on, we need to improve, you know, our goal with this with this or in our work with the White Houns with defcon is really in releasing a platform that and a framework that can be used across for the rest of for the in perpetuity by the industry.
We want to create an evaluation system that we can always use to.
Evaluate the quality and performance of these models going forward.
But does it matter if we put regulation on the United States or developed nations do when others many would say China, Russia don't. And what does that look like because technology doesn't have that many boundaries.
Yeah, I think this is this is a really really important question, you know. I think that the topic of AI regulation is certainly an important one, and as we've seen with AI to date, the key to human centric responsible AI is really a solid data foundation, you know.
For technology is transformed to this.
I think it's very important to consider the questions on AI regulation and are what are the consumer impacts of this technology? One of the reasons why we're so excited about the work that we're doing with the White House
and others. That being said, like you mentioned, our adversaries, our near peer competitors like Russia and China will not let regulation get in the way of their ambitions, and in fact, I think it's quite the opposite, they will use these tools to tighten their grip on you know, domestic social and political control.
So you know, now we'll finish that thought.
Yeah.
So you know in China, you know, the the the content of their AI systems, you know, will need to reflect their socialist core values and avoid information that that undermines their state power, national unity. And so you know, you see intent from our near peer competitors to to use.
This technology to for their ambitions.
And again they won't, they won't overregulate to prevent the proliferation in spread of the technology.
Very briefly, open source versus not? Where do you come down on order that?
So our belief is that enterprises and government customers need as.
Many options as possible.
And so our view again as I mentioned we're Switzerland, we want to enable our customers to be able to use open source models as well as the best closed source models from nthropic, opening iico here, et cetera, to be able to achieve their ambitions. So I think it's really a question of choice, you know, I think the more options that there are in the ecosyst the better, and argles to enable as many of them as possible.
Alex Wang, go to spend some time with your founder and CEO the scale AI. We've got to go back to our one on only andenel adlone mountain view at Google Io, which is about officially kick off, and I imagine a high host of conversation around barred and ultificial intelligence.
Yeah, look, this is the developers conference, but it's all about AI, and really what we want to know is about a more conversational version of Google Search. So much emphasis on bard when it was released in February, but it was always meant to be a creative companion. So how have they taken their work on the large language models and moving the needle forward in terms of that core search product. That's the big question for the thousands of developers that are here but also worldwide virtually.
What about the developers that want to be building on pieces of a hardware kit, the Google mans. Where are we seeing the iteration of the pixel?
Yeah, so we expect them to unveil pixel fold, a large form factor folding smartphone and you ask, well, how does that relate to AI? But if you speak to developers or analysts, they say, well, look how big it is? Think about the processing power. What are the future on the inference side of AI use cases that you can do with a phone like that. Google has one percent of the smartphone market. Flip phones or folding phones are
one percent of that market in itself. It's tiny, So how are they going to move the needle forward here? Grow their business and deeply integrate AI throughout all of their software and hardware offerings.
Karrot ed great to have what's happening on the ground. Go run off to that next speech that you'll be listening to Ed Ludlow.
We thank him.
He's going to have so much more for you throughout the day on Bloomberg TV from Google Io. But that does it for this addition on Bloomberg Technology, Stay with us for an exclusive conversation from.
Google Io, the head of Google Devices and Services. They want to miss it. This is a Bloomberg