From Mahard. We're Innovation Money and Power Collie in Silicon Vallet NBN. This is Bloomberg Technology with Caroline Hyde and Ed Ludloven from.
New York and San Francisco. This is Bloomberg Technology coming up.
Apple and Google.
Losing multi billion dollar court fights with the European.
Union, plus shares of Oracle touch a fresh record high on strong demand for AI products.
While Apple BET's big on AI, unveiling a new line of products centered around Apple Intelligence.
But first let's check on the markets.
And while it is Apple that we're going to dive in on a matcro perspective and maybe tugs the Nasdaq more broadly off of its highs. We're up one and a half percent over the last two trading days, but most of those games are from yesterday.
Today.
We are calling some of that risk on sentiment and some of the most focus is on some of the individual movers, and you're going to dive into it.
Yeah, Apple and Alphabet, the parent of Google, two court fights lost with the EU, but the stock telling two different stories. Apple is lower, Alphabet the parent of Google modesty higher. Actually at the kind of low point of the session, a fourteen point four billion dollar decision to imback taxes essentially for Apple, and it's a fine for Google.
In the fight with the European Union, Eucompetition Commissioner Margaret Vessela, who ends her term in November, says the rulings brought her to tears.
Listen to this, of course.
On your victories, but you also own your defeats, and we have had both and hopefully that shows that we are willing to push the envelopes also sometimes to take a risk in order to try to make sure that the market serves the consumer, that we are not just small porns. We'll meet for the machine.
I think Vesay has long maintained this idea that an individual member state should not make an ad hoc beneficial tax arrangement with a specific company like Apple. Let's bring in Bloombergs Jennifer Duggan out of Dublin for more. And this relates to a historic series of events in Ireland. Back taxes essentially just explain the basics of the EU ruling in Apple's case.
Hi.
Yeah, The case relates to tax Apple's tax that was paid in Ireland back in the nineteen nineties and early two thousands under the ruling today, the European Court ruled that Apple hadn't paid enough tax and that Ireland had granted Apples state aid in relation to its presence in Ireland, so that tax will no need to be paid in Ireland.
Just to remind us more broadly of Ireland's view on taxes of old and why it is embroiled in this way with.
Apple, Well back in the early nineteen nineties, Ireland had wanted to make itself an attractive place for foreign direct investment and it had a lower corporation tax rate as part of those efforts. Since then, there was a lot of accusations at the time of Ireland that Ireland had become a tax haven. There are some tax tax loops, essentially one in particularly that was known as the Double Irish.
Those have in the past ten fifteen years those have essentially been closed off and Ireland is now subject to has signed up to OECD rules on global taxation and it now has a fifteen percent corporation tax rate, So those situations have changed. But at the time back in this refers to a very specific period back in the nineteen nineties and two thousands.
Apple has some cash spare luckily, but is a huge amount to be paying him taxis Jennifer Duggan live from Alan, We thank you very much. Apple, in fact, though, introduced the latest version of its flagship product just yesterday, the iPhone sixteen.
CEO Tim Cooks, saying it was built for AI.
Quote from the ground up, Mal German has had ooh, a little under twenty four hours to digest. You knew most of it coming ahead of the game mark. Is it going to be AI that makes everyone buy a new aliphone?
Well, it's interesting because Apple Intelligence isn't, as we've discussed many times, isn't going to be released until mid October at the earliest, and these phones begin chipping on September twentieth. But AI is where the marketing message is at right now.
AI is what Wall.
Street is interested in right now. AI has been on the mines of consumers in the past several months, so that is where Apple is focusing its messaging for these new devices. In my view, what's really going to spur upgrades are people who are on older phones, whether that's the fourteen to thirteen, twelve, eleven or earlier, people who have a completely drained battery, people who have a craft screen, people who want those nice camera upgrades. It's not really
going to be the AI that's pushing these sales. It's going to be the other factors. I think.
Mark you add access to iOS eighteen point one beta version right, and yesterday I was able to get hands on with sixteen sixteen plus pro and pro macs, and the early functionality is like quite limited tech summarization, auto response in email. There is some pretty cool image editing stuff, you know in the version that I was able to access. But you seem to have detail as well about what happens next, a series of updates and more functionality that's perhaps the cutting edge.
Yeah, that's right.
So in eighteen point one, that's going to be the first version that includes Apple Intelligence, like you said, that's going to include summarization, that's going to call phone, include phone call recording and provide you a transcription afterwards. It's going to include voice memo transcriptions. It's going to include notification summarization, notification prioritization within the mail app. And then you have eighteen point two coming in December. That's when
include things like chat GPT integration from open AI. It's going to include gen Moji, where you can use text to create your own emojis. It's going to include an image playground app for generative image creation. There's an updated interface for auto email categorization within the mail app. There's general notification prioritization across the system on your lock screen,
so more bells and whistles there. But the real thing that people think about when you think about AI is Siri, And right now, Siri has an updated interface on these newer phones when you're running Apple Intelligence. But truth be told, that's just lipstick, right, because the reality is that the underpinnings of Siri really haven't change, and Siri is not going to change in any meaningful way until it gets its own sort of brain transplant, so to speak, in
March April of next year. That's when Siria is going to be able to do things like pull up when my mom's flight lands, or what is the podcast that my wife sent me two weeks ago? Right, that's the deeper integration and in that actions that people have been waiting for. That's probably four to six months away.
Still doing Berg's Mark German an honor to be live blogging with you in the trenches of you going through pretty much every piece of product announcement that you had nailed in advance. Anyway, really strong reporting, Thank you very much. I just point out one thing as well that we posted in the blog that you take for granted, but best ever battery life, most powerful processor. These are things that people are interested in, and there's a lot more
than the iPhone. Let's keep it going with Marabell Lopez, principal analysts at Lopez Research, and you know, in aggregate, what was there to be excited about across the product portfolio for you, Marabell.
I think in many ways we saw exactly the predictable hardware innovations that you could always see with a smartphone. Lunch, we talked about a better camera, We talked about bezzlso a bigger screen with the watch, we talked about thinner, lighter. I think for consumers that are coming into these new phones that need to do upgrades the concept of having
the camera button and the visual intelligence was really interesting. Really, what sells phones with consumers continues to be the visual aspects. How's the camera? What can we do with photos? What can we do with videos? And we saw a strong showing on that. I think some of the surprises were around things like the health features that they added with sleep APMEA and hearing aids, So it was actually, in some ways predictable, with a few surprises that really focus on usability.
I think that health focus is an interesting one, Marabell. But give us your take on artificial intelligence and Apple intelligence. Is that going to be a winning formula if it's not actually here to use right yet?
Well, first of all, I think the concept that it's not here until December or Q one next year being a big deal is really overplayed. In general, most consumers are not going out and saying, what I really want right now is artificial intelligence? Right What they want is they want things to be easier to use. They want to be able to capture better visuals, do better sharing,
express themselves in different ways. And I think that Apple took a very tempered approach to what artificial intelligence means and really tried to tie it to those things that they thought consumers would find important. So not just artificial intelligence for artificial intelligence sake, but something that's going to
make your life better. They talked about personalization and context and how to create videos easier, and how to do emojis, So I think these are things that resonate with consumers and the timing of that it'll come to them. They'll use it, but you know, they're not knocking the doors down for it right now. What they want is they want a phone or watch that's going to be able to run whatever comes next from Apple.
Ambient Ai is how a guest put it yesterday, just naturally doing it all in the background, Marabel, go back to the watches and the AirPods.
It did have quite an impact on certain stocks.
Certainly hearing aid makes at one point in the trade. How much are people going to be spurred to buy this on a health focus?
So I don't know if they're necessarily going to buy it on the health focus.
What I think is.
Really going to happen and what the real win is for Apple is the concept of the continuous upgrade cycle. Once I get that AirPod in, I figured out that I have a hearing issue or that I can have better quality hearing with this, I think that's a game changer in terms of continual use and constant upgrades. I do think it's an issue for the hearing aid manufacturers. I mean, one of the things that We've always had an issue with is do people want to feel like
they're wearing health devices. These are just AirPods, right, Nobody knows if it's a hearing aid or not. So I think there's a lot of opportunity for that. I also just find the usability. Think about not needing the change of battery as an elderly person, you just have easy charging capability. I think it could be a huge win for people that need to have better hearing.
Marrabo, it was interesting that inside the Steve Jobs Theater, the most audible sort of gasps and excitement was around watch and airports in parts specifically sleep ATNA and hearing aid. We talk about wearables as kind of the jumping in point because actually the hardware costs less than the smartphone and lowers the barrier to entry. How do you model that for the success of Apple's ecosystem?
So when I think about Apple, it is a portfolio approach, right, you have a phone, you have a smart device. But I think the real win for Apple, what they're very good at, is that all these things work together, and the more of you you have, the better your life becomes.
And I think they really try to ugur in on we can help you with your health, we can help you with fitness, we can help you with problems that you didn't even know you had, and all of that's attached to the personalization of you and kind of taking what we talked about as that AI and really trying to make that AI relevant in someone's life. So I think moving forward, we're going to continue to see that the health market is going to be one of the drivers for Apple revenue moving forward.
A lot of this was about what's inside of the Apple I phone, because it hasn't changed that much extensibly.
From the outside.
What has changed on the outside is what's going on in China Huawei. We see a trifold phone. How much do we see innovation from a hardware perspective coming from China.
We actually see quite a bit of innovation coming from China. What I think is very interesting is that Apple continues to have the perspective that the foldable phone is not something that they need to participate in. Clearly, a trifle phone is an innovation. The timing of the Huawei launch was really important to try to create some of that fear and uncertainty in Apple's presence in China, and I actually think it accomplished that. But the reality of the
situation is foldable devices are very expensive. It's been a limited market for some time. Samsung has been pushing that rock up the hill for quite a while, and it has also not made that break. So it makes perfect sense to me. If you're looking at a mainstream market, then foldability isn't going to be where it's at. But if you want to talk tech factor cool, fold ability is absolutely that.
Parabell Lopez, principal analyst at Lopez Research, wonderful take Thank you. Coming up, we're going to be joined by Rubric CEO if we'll seener for a conversation on the firm's earnings doubts around growth in the second half.
Is that what's pulling the shares lower.
This is putting big technology.
Too.
Notable calls from the cell side this morning, first out DA Davidson initiating coverage and Alphabet with a neutral recommendation, the analysts highlighting numerous headwinds within the company's core search business. And our second goal comes from Deutship Bank naming Tesla it's top pick within the auto sector, noting that shares deserve a unique valuation, giving its potential to reshape business models across multiple industries.
Caart, do have another stock that we should be looking at, Rubric posting a thirty five percent gain in revenue.
Raising for your guidance.
Yeah, shares are off six percent, joining us now to dive in as Rubric CEO before seen. Now who you know must be looking at the stock with some surprise. You've got analysts such as Guggenheim saying you significantly outperformed on all key metrics, but Bloomberg Intelligence they're flagging. Perhaps some questions around growth dynamics in the second half.
Can you speak to that.
Thank you, Caroline for this opportunity. Look, I leave this stock to the expert. But we are building a long term business and if you look at the growth and a very important market that is cyber resilience. We grew forty percent year over year on our subscription era to over nine hundred million. I mean we are growing at this speed at that scale. And last quarter we beat the quarter handsomely. Q two, then quarter before we beat
the quarter handsomely. We are continuing to outperform both on top line and our profitability metrics, and this quarter we also raise the guidance for the rest of the year. So we are very bullish about what is in front of us. We are confident in our execution, what we see and we want. We'll finish our years strong.
Before in the context is like what Rubric actually does. It seems like when enterprises invest more in cloud or shift to the cloud, there's a benefit that you derive from that. Could you explain the basics of that relationship and those mechanics.
As more in board businesses and governments have realized that just doing cyber prevention will not allow them to run their business when there is a successful cyber attack. Because cyber attacks are inevitable. They are all thinking about cyber resilience. How do they continue to run their business win in presents of attacks? How do hospitals continue to admit patients? Banks continue to dole out money? And that's what we do.
We help businesses ensure that their applications are running and applications could be in their enterprise, could be in the SaaS could be in the cloud. And as businesses are doing more digital transformation to gain productivity, cyber is the number one rest and ability to run their services all the time. Irrespective of successful cyber attack is what we help their businesses with. So more cloud transformation, more SaaS adoption, more digital transformation is actually helping our business.
People switching gear, Sally, I think we asked you, let's say a dozen times over the course of a year when you were going to go public, and eventually it happens, and it feel like it all happened quite fast. So I just wanted to ask what it's like being a public company and how that you think that's going.
It's going great as a public company. But for me as a CEO, there is no real different friends other than reporting to public market and doing callbacks with our stakeholders, because from the day one of the company, we wanted to build a long term company, a company that lasts longer than my own professional career in life. And there's no difference in terms of how we build our product,
how we think about the next chapter of Rubric. We are coming up on a billion dollar that we actually guided to thinking about how do we go to three billion and beyond what are the product configurations that we do today so that we have high acceleration four years down the line. That's how we think as a business, and there's no real change in how we operate our business.
Since you've gone public.
Though we had the most major global IT outage and everyone started thinking about resiliency all over again now today, in fact, I think Microsoft is currently hosting a cybersecurity summit for the first time since that outage with government participation to really get their learnings. People, how many customers did you suddenly sign from that event? How have you seen the market shift after it?
It was an unfortunate event, but it actually previewed what a real cyber attack could do to our digital, interconnected global economy, and it really, as you mentioned, brought the discussion of resilience at the top. And so we are seeing a lot of CIOs and board of directors and csows and CEOs having this conversation that how do we keep our businesses up and running irrespective of what happens.
So we are definitely seeing anecdotal evidence of like a renewed interest, renewed focus, and cyber resilience is the number one topic in cybersecurity, but this is one of the many factors and over time it will be clear how much impacts it does to actual demand and top line people.
Very simply did you get invited to this summit that Microsoft's hosting and what are you hearing about it?
We have a great partnership with Microsoft. In fact, they gave us a Healthcare Partner of the Year because we are really going after protect the unprotected, which is the healthcare segment of the market. And obviously Microsoft is very serious about cybersecurity. If you look at the number of initiatives that they are doing, number of partnerships that we are creating with microsoftware. We are bringing the cyber resilience, They are bringing the cloud and infrastructure security, and together
we are delivering end to end security. So as far as Microsoft is concerned, our partnership around security is very strong and they are quite serious about it.
What about global growth more broadly before and where are you seeing CEOs CSOs willing to spend at this moment?
So I was in Asia three four weeks ago and spent almost a week in Japan. And if you look at a country like Japan, which is a large industrial economy, they are also undertaking digital transformation because they want to gain productivity. They want to have this whole digital moment
for themselves. And the number one concern for Their digital transform is cybersecurity because in a manufacturing oriented economy, if you have digital disruption because of cyber attacks, I mean the whole economy could come to stand still, or the
whole company could come to stand still. So folks are very serious about investing in cybersecurity, particularly around cyber resilience, because they have done a lot of investment in prevention of attack, but they're not able to prevent the unpreventable. So the focus is how do I keep my services up and running, how do I ensure that I confidently do digital transformation and.
More BRICO people saying yea, it's great to have you back here on Booming Back Technology. Thank you very much. It's time for talking tech. And first off, Amazon's Audible is set to begin selecting US based narrators to help train AI their own voices. The company plans to use cloned voices to quickly and cheaply increase their audiobook offerings. Amazon currently offers the option for self published authors to use a generic virtual voice narration for their works. Plus
shares of Avali Barber rising in Hong Kong trading. This is the e commerce giant made its stock debut to investors from mainland China. For the first time, shares of Vali Barber were added to the stock connect program that linked Shanghai and Shenzen with the Hong Kong Exchange. The stock rose four point two percent, the most since August sixteen,
and a sigh of relief for AI investors. TSMC revenue rows thirty three percent in August for sales reaching seven point eight billion dollars, Taiwan's largest company, now making more than half of its revenue from high performance computing driven by AI demand for the third quarter, and this expect TSMC's revenue to grow thirty seven percent.
Correct.
Let's just check in some stocks again and ed you referenced this earlier Tesla having a very good day one of the biggest points to the higher side for the Nasdaq, Deutsche Bank naming the ev maker it's top pic with auto sector. Also and interestingly, the EU maybe actually reducing those tariffs on Tesla's and other evs from China.
Interesting as we get that news on Google and Apple from the EU today.
And i'd also point out it's thirty days until Robotaxi Day and elon Musk if you're watching, I'm still waiting on my invite, La.
You come, We're coming up. It's the first ever private spacewalk mission for SpaceX. I'll have all the details on today's launch.
That's next. This is Blue Big Technology. Welcome back to Bloomberg Technology.
I'm Caroline Hyde, New York and our medlad Low in San Francisco.
Quick check on these markets for yeah, because we're trying to remain risk on. It will feel on the day. We're up five tens of a percent. Let's call it on then as that one hundred after remember a decent woman in one percentage point game yesterday, So riding high even though we got the anxiety of an inflation print and of course a presidential debate that comes later tonight.
The tenure yield, they're getting a bid.
Maybe there is some anxiety and we're wanting to get into some of these well more haven trades, that is the bond market. Despite we've got some auctions coming up. We're down some three four basis points. Let's call it on the tenure. Looking at Bitcoin, just catching a slight bid up two tens percent. It's been a bit volatile on the day. Move on and have a look at the individual movers because it's a day of micro news today.
Apple drag lower off of it's lows, but still trading three tens percent to the downside.
After well, we're still.
Wondering what appen intelligence really comes and what it means for sales with the new iPhone sixteen. But it loses that fight it had with the EU over at more than few fourteen billion dollar tax debt that they owe. Of course they have preferential treatment coming from Ireland. EU says we still want that money. Look Bloomberg Intelligence other Ana is saying, this isn't going to affect the business from a fundamental business, one of the few ones that
could afford it. But Google also loses its fight and more than two billion one in terms of exerting its power, it would seem when it comes to e commerce and its own search platform. And look once again May it's owing. They're both disappointed. We understand. Let's have a look at Oracle though record high for the stock up more than well, let's call it twelve percent. Now AI a driving force in terms of cloud what are you watching it?
Well? Earlier today SpaceX launched a rocket carrying four private astronauts to space.
Got you one alf.
Do you fought us?
You can be on range.
Flying crew on board Dragon and Falcon nine of New Heights, all part of a groundbreaking mission aimed at performing the world's first commercial spacewalk. After a number of days of delay, Carrow, the Polarist Dawn mission is underway.
Jared isaacman billionaire, happens to run a company also now in space. It would seem just remind us why the spacewalk is so ground king.
Yeah, I think that it just hasn't been done before. And the point of Jared's ambition to go back to space, because remember he was part of the Inspiration four crew, is he is this adrenaline junkie billionaire. He is bankrolling this threat thing in partnership with SpaceX. He's fascinated by pushing the boundary of technology but also sort of human kinds achievements in space. I'd also point out like he's
not alone up there. He's with Sarah Gillison and Ana Mennon, two very senior SpaceX engineers who go as mission spen specialist and medical officer respectively. On the right. Scott Petite, mission pilot, is Jared's best friend, essentially another adrenaline junkie and fighter jet pilot.
And Sarah and Jered they're the ones that are going to open the hatch, walk on out and make history.
Ultimately, what's different about this space walk is not just the sort of altitude that they'll do it at, but also the mechanism kind of used to historic pictures of spacewalks on the outside of the ISS where they have a air lock and they're tethered up. This time they'll be tethered up, but the only way to do it inside the Dragon capsule is to open up the hatch.
So it means that the two of them will go out one by one, but there'll be a vacuum inside the capsule itself, meaning that the other two who are not doing the spacewalk also have to sort of don these specialist suits and just sit in there, floating in a vacuum. And then when the two return, hopefully they close the hatch, repressurize and add oxygen to the chamber, and all being well and equal, they'll come home.
Let's hope.
Now we want to turn from one race, the space race, to another one to the White House. Presidential nominee Kamala Harris. Of course, VP and Donald Trump are set to debate stage. Set to debate on the stage later tonight at nine pm Eastern. For more, let's bringing Katie Lines, who joins.
US and Kayleie Technology Show. Is it corporate tax for us?
Is it? Well?
The focus on innovation? Anything you think we might get, well, you could get some on innovation.
Investing in US innovation is actually something both of these campaigns have talked about. There is a whole segment in that regard on Kamala Harris's policy Paige the issues page on her website, so you could get some of that. Donald Trump may even bring crypto into the conversation, as he has been talking about that more and more given the money the crypto industry is throwing into this election cycle.
He wants to make America the crypto capital of the world, he says, But for business as a whole, beyond just technology, they of course will be affected by things like taxes too. Kamala Harris obviously wants to raise the corporate tax rate to twenty eight percent. She also wants to lift to twenty eight percent the tax on long term capital gains for those making over a million dollars. She of course hasn't specifically said anything about unrealized capital gains, although Donald
Trump has accused her of that, it is true. Her campaign initially said it supported a number of policy ideas in the President Biden's last budget proposal, which included a tax on unrealized capital gains for those making over one hundred million dollars a year who had less than twenty five percent tax rate on their income.
But she has an outright.
Said that that is not on her policy platform, and of course she wants to raise taxes on regular capital gains for those making over a million dollars and help to fund some of her other initiatives, including down payment assistants for first time home buyers and no tax on tips, that kind of thing. Donald Trump, of course, wants to cut the corporate tax rate for companies that make things in America down to fifteen percent, and also wants to
make permanent his twenty seventeen tax cuts. All of those proposals are estimated to cost about ten and a half trillion dollars over the next ten years, and there just simply isn't enough non defense discretionary spending projected over the next ten years to pay.
For that, and he also wants to cut government spending or make it more efficient with the help of one Elon musk Helly.
In my more.
Limited experience of presidential debates, having only lived in this country since twenty eighteen, the news cycle also kind of informs what they'll discuss. Sometimes you have the idea of a sovereign wealth fund in the headlines, and you've kind of outlined cryptso just is there a stage of what we'll be asked and the key battleground.
Well, no questions have actually been told of the candidates or to us ABC, and those moderators are keeping them close to the chest. That is part of the rules for this debate, including of course the rule that the microphone will be off for the candidate whose turn it is not to speak, which will be an interesting dynamic there. But yeah, you're right, news does indeed drive questioning often on the sovereign wealth fund. We're getting that, frankly from
both the Democrat and Republican sides of the aisle. First, Donald Trump floated a US sovereign wealth fund at the Economic Club of New York last week. Then Bloomberg reported just a day later that this is actually something that Biden needs, including Jake Sullivan have also been pursuing. That is a question of how exactly that would be funded.
We don't know those details yet. Donald Trump has suggested it could be funded and perhaps by tariffs, and tariffs of course is another thing we expect could come up on the stage tonight, as Donald Trump has floated a blanket tariff on all US imports potentially of ten percent, and even higher tariffs on China. And China of course gets us to the foreign policy aspects that could be present in this debate as well, not just on China,
but the ongoing war between Russia and Ukraine. Of course, perhaps most difficulty for Kamala Harris in particular as the vice president of this Biden administration, could be questions around Israel and the ongoing war in Gaza, and of course here domestically, it's the economy always.
Bloomba's Kaylee Lynes, thank.
You very much.
Time now for our VC roundup.
First up, Singapore based firm Genesis Alternative Ventures, a private lender to venture and growth stage companies, has closed its second debt fund and the lower end of its target. That's as global investors remain somewhat cautious about Southeast Asia's startup industry, and the firm is raised one hundred and twenty five million for the fund, securing new investors including Japan's Mazoo Home Bank and Israel's our Crowd plus Amco.
It's a London based bench firm that has backed fintech diling, Stripe and Karana. It's raised one point two four billion dollars for two new funds. The dual fund strategy includes its first dedicated arm for growth capital and acts as a response to a dearth of late stage technology financing in Europe. According to the firm, CEO and Exo Watt is a startup backed by open Ay. Sam Altman, just launched a modular system to generate, store, and dispatch clean
energy to data centers. So the startup is relatively new, it already has a demand backlog of some one point two gigawatts from some of the world's largest data center operators and wind and solar developers.
Ed another story, Lara Belle, an open source startup in Arkansas, just raised fifty seven million dollars from Excel and Excel partner Mars Clements, who led this investment joins us here in San Francisco. Curiously enough, I've got a bit of experience covering tech in Arkansas. I've spoken a lot with like Stuart Walton and the up partnership who kind of like wanted to be a tech club. I was surprised to see the headline tell me about the round and a bit about the company and also the state.
Yeah, sure thing, So the accent was not a dead giveaway for Little Rock, Arkansas. But I'm glad to know that you spend time in that tech ecosystem too. Larravel is an exceptional company founded by a really generational founder, Tailor Otwell. And the fact that it's in Little Rock, the fact that it is bootstrapped and profitable and really a company that controls its own destiny, is entirely consistent with what our growth investing strategy is at Excel and has been for sixteen years.
Right, Miles, I'll bite you strap some profitable definition explanation.
Yeah, sure thing. So we have this kind of peculiar growth investing strategy with fits which fits in with Excel strategy that we have devoid for forty years across all of our firm, which is that at the most fundamental level, we want to be the first partner the founder's turn to when they go to raise capital. Now, doing that requires a certain degree of flexibility. Some companies want to raise a million dollars in the heart of San Francisco
in a seed round. Other companies want to raise a fifty seven million dollars bootstrap Series A, as was the case Wither in Little Rock, or I would point to a company like one Password, which raised a two hundred million dollars Series A in Toronto, which my partner a rou Matthew led a couple of years ago.
One Password might see competition coming from well a pretty age old firm, favorite Silicon valley that is Apple. How are you seeing competition coming from the huge publicly traded companies and can there still be room for these startups?
Absolutely?
I mean the technology industry today is so humbling. There are so many great incumbents, there's so many great startups. You're seeing companies move at warp speed with the assistance
of AI. But with that said, the companies that we really have built our growth practice around are just growing durably, sustainably, profitably at kind of a different cadence and It's a cadence of growth and a discipline that we really really appreciate and that we seek out when we spend time in geographies like Toronto with one Password, Sydney Australia with Alassian, probo Utah with qual Tricks, etc.
We're humbled.
We're always sort of paranoid and aware of the competition out there, but we think these companies are special in their ability to be durable and compound for decades at a time.
It's interesting about open source, and we had Chi Discovery on yesterday just raised around that sort of open source large language model, particularly around biotech. Now, when you're thinking about the open source area you just mentioned AI. We think about open source a lot with AI, but you're actually talking about open source to build full stack web applications. When it comes to lavarel, what is the business model there?
Because interestingly Chi Discovery didn't talk about how they go monetize. How already is Lavarell cloud monetizing right?
Well, the thing that we love about open source, whether it is biotech and pharma or developer tooling, is that they tend to be rooted in these vibrant organic ecosystems. And if you are loyal and faithful to the ecosystem if you serve your company, your customers, and end users well over time. I think the best open source software companies in the world have demonstrated this win win capability
of monetizing where you can build this revenue flywheel. But I think the best company is in open source invest the profits back into the ecosystem. They invest the profits back into enhancing the product roadmap. And that is exactly what Taylor wants to do with this capital that he's raised from Excel.
It's seven million.
You've also backed Versa and Century, so not unaccustomed to the open source area. Miles Climent's Excel partner, thanks for joining us today. Shares of Oracle all time his today that's his artificial intelligence demand continues to boost its cloud computing business, and there's some new agreements being made, for example, with Amazon Web Services to make intelligence. Senior analyst Ana Agrano joins us some more and Oracle managing to really focus on this new area of growth.
Yeah. I think of this as the downstreaming effect and all the video sales that you're seeing, because at the end of the day, it's these cloud providers that are buying those GPUs and then in turn offering those services to clients to experiment on Genai to run new workloads. And that's really where Oracle is getting a lot of that bump. Not to mention the brand new deal that they have with AAWS.
Well, let's jump on it. I don't understand the deal with AWS. I thought that for a long time they had some pretty frosty relations. Where does that work? And also that is this way about on prem versus not on prem which is a big part of Oracle's history, right.
Yeah, Now, I was surprised to see this particular deal. I mean, I would say a year ago, I was surprised to see them do a deal with Microsoft and then again with Google. So a couple of things are happening over here. If I run an on premise application, it was theoretically possible for me to take that application up from my data center, move it to AWS, and at the same time run an Oracle database on it.
It can be done, but it was expensive. Oracle was trying to say, well, if you want to run an application, why don't you come to my cloud, which is the oraticle cloud infrastructure, And that has been the friction. At the same time, the people want to train on the data that resides on the article database. So Articles figured out one thing that the end demand is so wide that they won't mind, you know, losing a little bit
of money on one side or the other. In the net it will actually be beneficial for them if more of their databases move to the cloud. So I think for Oracle this may be actually helpful for their database business down the road. And given the shortage of workloads out there, I think they have enough in this you could say in the pipeline that for the next couple of years you're not going to have a problem in terms of their cloud growth rate.
Alight, ran or a Plamberg Intelligence. Thank you. That was the analysis. Let's get the take from one of the companies involved in bringing ruber BORNO VP of Worldwide Channels and Alliances at AWUS. I'd love to start Ruba by say say be asking how this deal and how this relationship with Oracle came about.
Thank you for having me ed.
It's great to be here.
We always work backwards from our customers and just like Unerug said, the pace of innovation is accelerating and with generative AI our customers want to be able to take advantage of their biggest assets, which is their data. That's their differentiation, and so with this partnership, we're announcing that customers can move their data seamlessly from Oracle Database at AWS to AWS in order to be able to take advantage of their assets and innovate at the pace that's required today.
Ribo, what do you make of perhaps Anerog's take that this was surprising There is sort of frenemies going on at the moment.
What is it like working alongside Oracle.
You know, we've actually been working alongside them for a very long time. In fact, we've had joint customers with Oracle since two thousand and eight. So our focus has always been working backwards from the custom it's in our DNA, and the time was right for us to bring this offer to our customers as they're thinking about how to transform their businesses.
They want to move faster.
They want to be able to take the data that they have stored in Oracle and be able to take advantage of aws's large offerings of services like Amazon Q, Amazon Bedrock, the other services that they've gotten accustomed to, and that made it the time right right now for us to work together. So it's not new, we've been doing it for a long time, but it became a lot more urgent to support our customers on their transformations.
Rub We got a lot of questions from Morbeling technology audience that have a relationship with either AWS, Oracle or both, and they're very simple, like how does this work in practice? Is there revenue split or revenue sharing? What are the obligations that the customer has to sign up to?
Well, we're not sharing our own commercial terms between AWS and Oracle. But from a customer perspective, this is a great opportunity for customers to leverage this service. They've got their existing relationship with Oracle, their existing relationship with AWS. When we launch it later this year, we'll provide all of that information to our customers, but it should be just as seamless. It'll be single billing through their AWS console, the same way they subscribe to any services from AWS.
Your very title, RUBA is alliances? Is this a new world of alliances at the moment as people search out compute, as they work within operators, are you seeing that more and more?
Globally speaking?
I think that we've been seeing it for a long time. AWS has the largest cloud native partner network in the world, and we've had that because it is in our ethos to provide our customers with choice and provide them with simplicity so that they can run their businesses as seamlessly as possible and innovate not just through AWS first party services, but also through the breadth of third party services that
they need to run their businesses. It's not a new concept for AWS, and we're trying to make it easier on our customers to take advantage of all of that innovation.
Just very quickly. Are you seeing more SMEs kind of take note now we're trying to move beyond sort of the biggest companies thinking about their access to compute and the software that they're using.
Absolutely, I mean small medium enterprises are continuing to be a high growth engine for technology adoption. I wouldn't say that they've been laggards, but they are now certainly moving faster. It is easier for them to take advantage of it, and so we are working directly with those customers. We are working through many of our channel partners to reach those customers and help them adopt innovation that's available in
the cloud, and so we'll continue to see that. We're going to continue to build services with them, for them and.
With our partners Rivavona, VP of Worldwide Channels, Analyances and AWS. Busy time and we thank you now it's been a busy time for the show as well. That does it for this edition of Bloomberg Technology.
So many market moves, more guests to come out.
Yeah, tomorrow, we're going to be joined by Waimo co CEO Takedra Manakar for an exclusive interview. A lot of data points coming out of Weaimo and a lot of questions ask about the ongoing tie up with Alphabet, parent of Google. Don't forget also to check out the podcast. You know where to find it on the Bloomberg terminal as well as online on Apple, Spotify, and iHeart from the team out in New York City and all the team here in San Francisco. This is Bloomberg Technology.