Bloomberg Audio Studios, podcasts, radio news from the heart of where innovation, money and power collide in Silicon Valley and beyond. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Live from New York. Come Caroline Hyde and.
I'm Jackie Devalas in San Francisco.
This is Bloomberg Technology. Coming up.
Apple's iPhones will use Ali Baba's AI technology or the partnership help Apple revive iPhone sales in China. Plus Reddit shares fool as user growth underwhelms. We talk with the COO about Google's algorithm.
And its in house AI and.
The feud between Elon Musk and Open Ai.
It continues with Musk saying he.
Would drop his bid for the startup if it halts its for profit restructuring. Drip feed News This coming as reports that yes, Ali Baba is going to be lending it's AI general to AI technology for Apple.
Intelligence in China, crucial in terms.
Of market share for this all important geography.
But will it remain exclusive?
There is so much to talk with Bloomberg's round Vastelica about it, about the importance of China. But this is Josi for was the chairman of Ali Baba, confirming previous reporting out there that Apple is getting its first general to AI partnership in China.
Hey, thanks for having me, So this is a big development. China is obviously a major market for Apple. I think they got about seventeen percent of their revenue from the Greater China region in their most recent fiscal year. They have been seeing a little bit of struggle there in terms of sales. They're seeing increased competition from companies like Huawei.
So the idea that they can get sort of really strong AI features onto devices there in China, that has seen as a real opportunity for them to kind of prove their fortunes there and that would help with overall growth, which is something that investors have been looking for for quite a while.
Talk to us about some of the mechanics behind the manufacturing. I'm talking about the tariff risk. How are investors thinking about this potential risk as it relates to Apple.
So Apple's really in sort of the crosshairs here because it does have such a major manufacturing hub out of China that we have seen tariff levy I think was tim percent tariffs China retaliated. It also has some kind of probe looking at Apple app store policy. So there's certainly a lot of questions here. We don't know how long tariffs might be in place for. We don't know if there's going to be an escalation. We don't know if Apple might get some kind of exemption the way
it did during the first Trump term. So far, it seems like people aren't seen too significant an impact to earnings from this. But this is something that could clearly escalate and become a much bigger issue very quickly.
And certainly we've seen the ramifications on the stock price from investigations coming from China from a regulatory perspective, and certainly Germany also looking into it.
On the day as well. Ryan point us forward.
From how this baks into evaluation and Apple, as we say, over the last five days, we're up two point seven percent.
Yeah, recent performance has been pretty good.
Overall.
It has been an underperformer this year because of the early concerns about how strong iPhone sixteen demand was, and you know, the overall kind of geopolitical environments. You know, the stock does have a pretty high multiple given the fact that the growth is not what you're seeing in some of the other mag seven names. But people do consider it a pretty defensive and sort of safe haven kind of company, just because it's cash flow is enormous.
It spends billions of dollars on buybacks. It hasn't been planning a ton of capbex into AI, which has become a concern for some of the other stocks. So there's certainly still reasons to recommend it, you know, services growth.
You can kind of go down a list of issues like that, but do you think overall, I mean, people have been looking for a more pronounced growth inflection from the company, and when you have all these concerns about tariffs and China and so forth like that, that does make that a little bit harder in the near term.
Bloomberg's Ryan West delica, thanks for joining us. Meanwhile, shares of Intel are rising and on track for its biggest one week jump in twenty five years.
This as a report from Baar says.
That the company could be in talks to work with a TSMC on a potential project for more. Bloomberg's Ian King joins us now Ian Intel has had a turbulent couple months. It's CEO being ousted. How much does Intel need a project like this.
I think in general, we've seen the stock go up over the last few days. There's been a lot of speculation. What investors want is something to happen from the outside that could help Intel, because they've seen over the last couple of years that it really hasn't been able to change the direction of its fortunes. So, whether it's JD.
Van's talking in Europe about hey, we need to do a made in America, whether it's speculation in Asia about it potentially getting help from partner, from partners who are currently competitors and less as are just looking for something, you know, give me a sign, give me a spark.
Talking of spark and signs coming at the moment from Apple, I just want to return to some breaking news to Tim Cook is indeed posting about the next member of the Apple family coming on February the nineteenth. Throughout one point two percent. Much has been reported about the latest cheaper se revamp coming from our own Mark German previously, but at the moment, all the statement coming from Tim Cook is we are awaiting the newest member of the
family of Apple. And you go to the ex post from Tim Cook, the CEO of that business.
In sticking more with.
What's occurring on the manufacturing side of things and what's happening.
With Intel, we know that maybe they'll look at.
Outsourcing manufacturing doing deals with TSMC, But more broadly, how in line with this is what pat originally wanted or how much of is a distinction from previous leadership.
Yeah, I think it's we have to be careful here to point to there being a lot of speculation. We don't actually know the much is happening right now. What we really need is big customers. If they get the big customers with huge orders that give them a lot of volume to fill those factories, then the plan is on. Then what Gelsinger tried to put in place is actually
paying off. Until we see, you know, Apple or Nvidia or somebody else like that putting lots and lots of chips into Intel's factories, the plan is not really going anywhere.
In King and all things Intel, which might say, has been on quite the crescendo in the last three weeks in terms of its share price. Let's give to Nooon breaking News SpaceX. We understand in South Africa the talks are stalling over tensions with Elon Musk and with President Trump, SpaceX and South Africa. The negotiators intend to restart talks later. This all about space X's adoption and its satellite use in South Africa.
Will have more on that as and when we get it.
But coming up, we'll be joined by Reddit COO Gen Wong to break down the company's earnings. That's coming next. This is bloom meg Technology. Just look at Reddit right now shares our dam that's after fourth quarter user growth missed Wall Streets expectations that we're having in the worst days. It's November, the twenty second Reddit itself saying user growth was indeed impacted last quarter after Google made a change
to its algorithm that impacted search traffic. Let's begin. Reddit COEO Gen Wong joins us now and just talk to us about how this quarter is currently looking in terms of the reaction to Google's overall algorithm change and how you drive your own fortunes when it comes to the use and adoption.
Is staying with Reddit.
Thanks for having me, Good morning. Q four was a really strong quarter for us.
We saw daily active users growth thirty nine percent ear year, the revenue grow seventy one percent year. Every year so I think in terms of growth, we're probably top of the market in terms of both of those. Start to find a company that's growing as fast for the things that we control. In terms of making the product better, making it easier, helping people find communities faster.
We're really happy with our work.
Our work is working, and that's been consistent over the last four quarters, and there's a lot more there. We're still early in that process. In late Q four we did see that there were some changes in Google that sort of came and went. We've seen recovery since then and we're off to a really good start and the work that we're doing again continues to bear fruit and making Reddit more extensible. Reddit is an opportunity, as an opportunity to address everybody. The whole world needs community and
has passions and interests and can be on Reddit. So we make redit easier, more accessible, help people find their communities faster. That's when it becomes extend incible to everybody in the world. So our tam is really everybody. We're just early in that journey, so we feel very good about our roadmap and our opportunity.
Jen Reddit has a licensing agreement with Google and in the earnings call yesterday, the company called that relationship symbiotics. So the faster that users can find Reddit on a Google search, the more engaged they can be on your website, and then in turn, the better data that Google is able to glean. Have you had conversations with Google about maybe cutting you some slack or at least giving you, guys a heads up next time there's an algorithm.
Change the way that Google work, you know, Google Google the way the algorithm work is there proprietary work. The conversations we've had are around obviously the Reddit data and how that can be used for training and for in their you know, search generative products. There's no question that it's a symbiotic relationship in that. What happened when next year, I think in searches demonstrates this. So Reddit has become the sixth most search term in US in Google.
I mean, that's incredible.
That means people are intentionally searching for Reddit. They're typing in a query what's the best backpack Reddit? Because they are trying to navigate to the recommendations and the trove of human intelligence on Reddit, and because Reddit has the best answers on the internet, and Google is a place where people go for broad based questions. It's a really symbiotic relationship, and that helps reveal the corpus of information that Reddit has to users who are searching the broad
based Internet. So in that sense, you know, it's been a very fruitful partnership.
But if it's getting harder for users.
To find a Reddit link via Google Search, do you see this kind of algorithm change or similar ones in the future straining that relationship.
We've been beneficiaries of the open Internet, and again, when people are intentionally navigating to Reddit, that tells us that they are trying to access that information on red the recommendations, the advice. So I think we're really important because we're actually what users are seeking, right, they're actively searching for us.
The way we think about it is this whole process of.
Data licensing is really I think revealed how important reddits content is, and we also have an opportunity to build our own products around our corpus of information. You see this with us testing something called Reddit Answers, which is a chat based search that reveals recommendations on Reddit.
Again what's the best backpack.
But it gives you a search result that is specific to Reddit that shows answers and opinions across every subreddit a really different experience from broad based internet search, and I think we have an opportunity to continue to build our own products around our corpus of information in addition to being in sort of broad based search on the Internet.
So speak to those analysts or investors with some anxiety about the dependence on Google. How much is Reddit ass boosting the engagement that you control.
Reddit answers is early right now, it's it's in a beta test, But we like what we're seeing there.
I think the thesis of people wanting.
To come and be able to search Reddit and see what is happening across opinions across all communities, that thesis, I think.
Is born out, and so we're excited about what we see there.
We are investing in search search of Reddit, and there's an opportunity for us that will continue to be building out. When I think about the opportunity here, it's it's it's enormous, right, I mean recommendations and advice. We have twenty years of conversations on every topic on the planet, and so it's core to our mission to empower communities and make their knowledge accessible both to all.
That's red at COO. Jen Wong, thanks so much for joining us. We also caught up with the CEO of Lyft yesterday on the heels of the company's earnings. We discussed his outlook on autonomous vehicles and competition with the likes of Weaimo, and he says Lift's market share in San Francisco has not.
Moved to a listen.
In San Francisco, it's flat.
Interesting is even as they increase in San Francisco, our share has been flat now, So that suggests that the market is expanding, maybe suggests that they're taking some share from.
The other guys. I don't know.
In Phoenix, we're actually growing faster than ever, so we grow about fifteen percent nationwide in Phoenix. It's a little north of that. So that also even and Wyn was quite active there. So it's a great profit. It's great technology, but I think a lot of people come and they use it, and they like it, and then they come back to traditional ride share and.
Use this both.
Your competitor, Uber said it would quote hopefully partner with Tesla's on autonomous vehicles. They said that last year has lived had any conversations with Elon Musk or Tesla about a potential partnership.
You know, I don't talk about individual things like that. I think, you know, there's this sort of danger of kind of trying to win the press release and announcement war, and we try to win the service war. That's kind of our thing. So I want to say not. I think it's I think that'll be all kinds of partnerships, I really do, and the ones that happen, we'll kind of.
Have to see.
The incoming Transportation Secretary Sean Duffy has proposed that a federal level law should kind of supersede this patchwork of state by state rules for autonomous vehicles. Do you think this new administration would help lift's ambitions in autonomous vehicles?
I do, I do.
Yeah.
The safe by state thing is really hard.
I mean, it's you understand, you want to do some local experimentation in different states are different, they have different cultures, they have different geographies, different weather and.
So on and so forth.
But an overall sort of safety, you know, kind of framework and general autonomous vehicle framework I think would be very helpful in helping this industry move a little bit faster and frankly, keep up with the way the rest.
Of the world is going.
That was Lift CEO David Risher. We're also watching shares of Coinbase. Shares are up over six percent because it's a key beneficiary of President Trump's promise to usher in a new era for the cryptospace.
The exchange is.
Reporting fourth quarter results after the belt today, and Wall Street is expecting to see a boost in trading volumes on the back of bitcoins gains.
Blue Origin, Jeff Bezos' rocket company, is cutting ten percent of its workforce to cut costs, to trim manager ranks, and to focus on ramping.
Up rocket launches.
That the surprise round of layoffs comes about a month after Blue Origin debuted its flagship New Glen Rocket Swing years of delays and development setbacks.
Jackie startup K two Space has raised one hundred and ten million dollars in a series speed funding ground led by light Speed Ventures and Ultimeter Capital. The company, created by former SpaceX engineers, is developing.
A platform to launch multiple.
Satellites into orbit at higher speed and lower costs than currently available. Joining us now is K two Space CEO Karen Kundred. Thank you so much for joining us. Walk us through about what your platform actually does. It's essentially almost like a bus for satellites. How are you able to do this at a cheaper price?
So we're building a platform that is ten times more powerful than existing platforms.
Today.
When it comes to applications in space, almost every application ties back to power. So my brother and I kind of started the company on the contrarian bet.
We decided to go the opposite direction.
Of the market that was going smaller and lower power with their satellites and redesign the satellite. From the reaction, weill up to build a platform that is higher power, higher capability, while still being able to multi manifest into launch vehicles to do constellations.
The market has come to your contrariant bet because SpaceX is starship just the innovation in terms of bigger and bigger rockets being able to pay take these bigger and bigger payloads. I'm interested in ultimately what the manufacturing therefore is needed in the United States because you're vertically integrated exactly.
Yeah, all launch players like SpaceX and Blue Origin are moving the market larger. We kind of equate it to we're moving from an era of launch constraint in space to launch abundance. It's almost as if we're operating in the age of dial up internet and moving to broadband, and our company was started under this premise of like what happens at this new age of broadband where we can do things differently. For us, it's vertical integration, it's
rebuilding the satellite. We're building about seventy five percent of the satellite in the house, and that allows us to do a lot of unique things to optimize the platform for the launch future that we see coming, not necessarily the launch vehicles of the past.
You've already brought in millions of dollars worth of contracts, both coming from the public sector but also commercial contracts. We've heard a lot about the DoD getting inside Silicon Valley trying to scoop up some of those startup ideas.
But talk to us about your commercial.
Partnerships, because there's a lot of space companies out there right now.
Yeah.
The interesting thing about going higher power, when you tex the amount of power, you also dramatically increase the throughput per satellite. So our commercial customers are mainly commercial operators that are beaming data down from space that see the potential when you have ten times the amount of power
to fundamentally change the unit economics of their business. Higher power means more throughput while maintaining the low cost means that they're actually able to deploy even more satellites with even more capacity on orbit in a way they never could before.
So are these like SpaceX, Blue Origin those kind of players.
SpaceX and Blue Origin are two of the players, but there's a bunch of others out there as well that are also thinking about how to better operate their constellations on orbit.
What's so interesting is the government side of things as well, Karen, And you've got John Plum, of course, who used to be in government, former Assistance Sectuary of Defense for Space policy in house now. But how is it liaising with the current administration that we've just had breaking news that a deal with Starling over in South Africa is in jeopardy because of relationships between Elon Musk and President Trump.
How are you finding relationships?
Yeah, we were pretty excited to bring John on the team. He's the former Assistant Secretary of Defense for space policy. When we first briefed him, he kind of saw what was possible with this completely new platform at the end of the day, we believe that if we build a platform that is as differentiated as what we claim it to be, our work with the national security and commercial
customers will come regardless of the political environment. What I will say is that the existing administration has clearly shown that they believe space is the next frontier, an important place to have investment, and we're pretty excited to continue to service our national security customers.
You know news today that Blue Origin is cutting ten percent of its workforce. Are you worried at all that that signals a broader slow down in the space in any way?
Yeah, it's you know, we have a lot of friends that work over there. We're pretty sad to see hear about that, and you know, we'll be trying to hire ourselves people that may be leading from that company. I think layoffs and investment are always a part of the national natural capital cycle when it comes to any business. You don't like to see it, but sometimes that happens, and so I don't think it's a nicative of a broader trend. I mean, we raised we were preempted on
our Series A thirteen months ago. We were preempted again on our Series B two months ago, we've raised about one hundred and eighty million dollars in venture capital.
Today we're not seeing that.
What we see is if we're truly building something that's different, with the differentiated team that's going after it, the capital is there to fund our vision.
Okay, so potentially hiring up some of that talent that has to be pushed out.
Talk about next steps?
Where next do we see K two space? You've just this month, well I think it was in January in fact, flying several technology demonstrations using SpaceX.
What's the next key marker?
Yeah, so we just finished up our first successful in space mission, so, as we like to say, we're now a real space company.
And yeah, we were pretty excited to.
Have that because, as I said, we're kind of resetting the entire supply chain, so we had to fly a bunch of the components that we built from scratch to start buying down risk on the full platform.
We're now shifting gears.
We're moving towards the full satellite platform mission that's called Gravitas, that's launching fund of twenty twenty six. We want a thirty million dollars contract back in December from the Department of Defense to fly a number of national security payloads, and our goals is to basically showcase this differentiated platform and buy down the entire risk of the platform. We're going to fly to the harshest environments. We're going to
test the platform. We're going to show what happens when you have twenty kilo lots of power, and we're really going to prove out this completely new capability to our customer.
Set Leo moo Leeos Karen Kunjam, We thank you so much, Ceo KTI Space, It's great having time with you. Welcome back to LUMAT Technology and Caroline Hyder.
New York, and I'm Jackie Devalas in San Francisco.
Quick check on these markets and in fact single names, Jackie, there are still earnings coming thick and fast, the good, the bad, the ugly.
I'm looking at.
App Lovin up twenty eight percent, not forty percent growth in terms of their previous year revenue, but they're also selling off their game development unit for nine hundred million dollars to private company.
The investors love it.
We're up twenty eight percent, trade desk down thirty one percent, a rare miss for the advertising focused business. And this is, as Fundamental said, they disappointed themselves in terms of their own growth in.
The previous years.
So investors really trying to take on board what this means in terms of sentiment for advertising and trade desk.
More broadly, Data Dog also under.
Pressure up eight percent, down eight percent. This is they too, see an underwhelming forecast in particular, and really trying to see from an analyst and investment perspective, this is just conservative if actually the cloud trend is going to be good for them in the long term, and indeed some of the generative AI adoption for the software company move on to generative AI story of the day, Apple because finally.
We'll get some Apple intelligence into China.
Because it seems though Joe Sai over of course, that Ali Barber is confirming that, yes, the reports are true.
We are going to be teaming up with Apple.
We're going to be giving them access to our generative AI models, and you're going to get Apple intelligence in China. The first of these deals when it remained exclusive for long, Jackie, what you.
Got Elon Musk's bid to buy open Ai is being used against the tech billionaire. Lawyers for Lawyers for Sam Altman argue that the offer ultimately contradicts Musk's arguments that open Ai cannot be transferred away for private gain. In response to open eyes filing, Tesla CEO told the court he'd drop his bid for open Ai if the company halts it's restructuring for more. Bloomberg's Rachel Metz joins us. Now, Rachel, does this feud risk slowing down Open Eye's progress?
That is the possibility, at least as far as the progress toward the restructuring. It certainly puts more attention on what's happening there, and they're in the middle of what is no matter what going to be a submen lengthy process. And it certainly, you know, with the court battle of that open Ai an Eland must have, this puts.
Like one more It's like one more way to come up the works.
And I think we've got to remember the context, the complex context to all of this. Fifteen Elong Sam other founders make a not for profit twenty nineteen. It becomes in part a for profit with a cap for profit that the nonprofit controls. And now well that might reverse as to who controls whom.
It's very complicated, and you can see how that structure itself also makes it hard to even understand if you are putting in a bid for this for the startup portion of the company, and that's in its assets, like what exactly are you buying?
How much should it be valued at?
So, yeah, it is overall just a very complicated situation. And then if you put in a feud there, yeah, you're making You're making things ultra complicated.
Wow, the media and spectators are here for it, Rachel Metz. We appreciate your time and giving us the context. Meanwhile, Adobe sticking with generator of AI is a mean to convince skeptical investors that it can compete with AI startups such as open Ai. The company introduced a new product that charges around fifty cents per AI generated video now. It also launched new subscriptions for its fly ai models.
For more.
We joined by Blue Merg's Brodie Ford. Interesting that we get the price point here.
Absolutely so Adobe, it's really existential for them in the pre AI era, if you needed to edit some photos and videos, you needed Adobe. The big question for the last two years has been once generative AI becomes more commonplace, do you still need Adobe? And it seems investors change their mind every six months, and so today what is so interesting is that we are getting you know, it's going to be about fifty cents a pop to make
AI videos. That's pretty competitive with some of the startup rivals, which is meaningful because the startup rivals don't have to report every quarter, they can eat some costs a little longer. So it's interesting to see them price what I would think as somewhat aggressively.
Here, Bertie, let's talk about the product itself. How does it compare with what's already on the market, because open Ai and even Runway also have competing products.
I thought it was pretty cool, right, and I tried it out yesterday and I found it to be a pretty effective product that worked well. I mean, and what Adobe has always said is not that we are going to have the number one best model visually, but that
we're going to have really great controls. You're going to be able to integrate it with the software you already use, You're going to keep it in the ecosystem in general, especially for enterprises, they don't want to have a bunch of bespoke models coming in with potential security risks, and so ADOBEA has really tried to make sure that it integrates well into existing environments. And you know, I was impressed with some of those manual tools and trying get out.
Yesterday, Body Ford across the Adobe News.
We appreciate it.
Thank you.
Let's bring you some macro news. Government news here. Robert F.
Kennedy Junior has indeed been confirmed as a new head of the US Department of Health and Human Services. Is approved with a fifty two to forty eight vote after pretty tense confirmation hearings. And we'll now of course have influence of the FDA, the CDC, and the federal insurance programs. Morgan Stanley boosting the latest debt offering of.
Elon musk X. Now the bank will.
Upsize it's offering from the market to three billion dollars to four point seven billion dollars or due to strong investor demand.
Jackie.
Here's what some of Bloomberg's TV guests had to say about Deep Seek at the Paris AI summit taking place earlier this week.
I feel so confident about our research shroadmap and also our product droadmap.
That you know, Deep Seak will do whatever Deep Seak's going to do.
Other people do whatever they're going to do and we're just going to try to like build.
The best technology we can and get into people's hands.
It's a very impressive model, or very impressive piece of work. I think the team is probably the best team that I've seen come out of China. So that said, I think a lot of the claims are exaggerated and a little bit misleading.
A lot of the key things from deep Seak are reducing the cost of innovation, but also raising this question of data control.
If you have potentially mutal strained resources, you can make a better job then if you have your men's resources and stop thinking about what to do efficiently.
I think there's been a lot of excitement, but we'll have to see if it material. Let's get to the infrastructure question in the age of deep Seek with today's VC Spotlight with Angene mitta general partner at Andresen Horowitz on Jenay. Where does this leave the conversation around how much infrastructure we actually need? What were you hearing on the sidelines of the Pear Summit.
I heard that we are in the era of infrastructure independence. Basically, I think most large nation state leaders have realized that modern AI models have risen to the level of general purpose technologies.
The history of.
Humanity, We've had maybe twenty twenty two of these, electricity, the printing press, and when that happens, leaders start realizing that that technology becomes critical.
To national progress.
And so that's what I heard from President Macron and Prime Minister Modi. The summit was co hosted by France and India, and I also heard from JD. Vance at the summit that the United States believes that now staying at the frontier of AI infrastructure and making sure that open source is competitive. American open source is competitive, Allied open sources competitive with the best models coming out of any country, including China.
Well, speaking of China, when we have the biggest players, China and the US with kind of different values competing against each other. You've talked about what you call joint ventures between nations that perhaps don't have the resources on their own to compete in AI.
Talk to us about that.
Yeah, So one of the atomic units of AI is the data center, right, because if you sort of look at the history or the ingredients of how we got the current deep learning wave, there's really three or four of them. There's compute, there's data, there's algorithms, and there's regulation, and so when it comes to compute, the idea is that there are only some regions that have enough compute and access to the power that's cost competitive to stay
at the frontier. I call these hypercenters. We clearly have at least two hyper centers now in the world today. We've got America and we've got China, and I think every other major nation is now hitting a reckoning point where they're trying to figure out do they build, do they buy, or do they partner? And so I think I'm quite bullish on the US and her allies teaming
up across what we call the infrastructure stack. Right, so when you at the lowest level, you've got chips, and then you get into models, and then you've got applications, And I think it's going to be much more likely that countries that aren't hyper centers today pick which hyper center they matches their value system the most, and then they work on joint mentors across the stack, because I think it's it's quite unlikely that people reinvent the chip
stack for them. They're much more likely to partner with a country that does match their value system and I think clearly in France, America, France and India we're teaming up.
You're on mis Trile's board.
We were hearing from after a little bit ago CEO of Miss Trial and so as France got it right now, is that going to become a center in some way they're committing to their own infrastructure build out or they ultimately have to depend on the US at least CHIPS for example.
So the zeitgeist has definitely changed. I think from the last two summits, you know, the first that was in Seoul and the last one which was in Bletchley Park in the UK, the overarching theme was one of pessimism. You know, AI is really risky, We've got to think about the downside. And instead, what I heard this time from leaders across the EU, by the way, not just France, was the idea of optimism that AI actually can unlock
massive growth for Europe and for America. And I think that France is in the middle of figuring out how to accelerate its infrastructure. I think they have a huge headstart when it comes to nucleared option, but when it comes to data center construction, they're clearly behind the United States, and they're happy to accelerate permitting and construction, and at the same time they're happy to work with American chip companies like Nvidia to actually rack and stack frontier chips
in these data centers. So I think you're going to see over the long term Europe start to accelerate. But in the short term, I think they're going to partner with folks like America.
And the administration is cool with that because you have close proximity to the administration with A sixteen and Z and at the same time doesn't see relations are at their highest moment right now.
Well, look, the best thing about this administration is they share everything very publicly. I think JD was very clear in his speech at in Europe that we're putting America first and we will partner and help our allies too. And you know, NATO is a huge priority for America, and so I think we'll just continue seeing more investments in NATO alliances.
And Jason Horowitz was an early investor in on open AI, and you're also on the board of Mistral. I'm just curious what do you make of this feud between elon Musk and open AI. Does it have broader implications for the progress for other players in the space.
Definitely, you know, ultimately where the frontier goes has implications for all of us. But I think the important thing to focus on is that, you know, just a year ago, there were lots of folks who are confidently testifying in front of Congress that America was so far ahead of China that China could never catch up. And I think what we're seeing is one the gap between.
Open source and closed source has narrowed.
That's something those of us in the open source community have been paying attention have known for a while, but more importantly that the gap between America and China has narrowed as well. It's incredibly fast. You know, one, which is one of the most cutting edge models from open Ei, came out on December fifth, and barely a month and a half later is when deep Scar one came out
January twenty fifth, and it's comparable. And so I think the more important dynamic to pay attention to is that that gap has closed, especially between America and any adversarial nations that aren't in our alliances like NATO.
What about Elon Musk's influence in Washington, do you think that could have broader implications for other AI players in the space.
Oh absolutely, you know, I think Elon is an important voice. But I think the reality is that we are reaching a state of disequilibrium in AI infrastructure where a lot of basic assumptions that people had taken for granted are being revisited, like the gap narrowing bit in open and closed between America and other countries. And so I think there are a number of voices, especially in the open source community obviously, you know, you just played a great clip from Arthur Mensh, who was.
The CEO of Mistral. I think there are other.
Important voices like Jon Stoyka, who's a professor at UC Berkeley who has been leading an effort called ELMSIS that works on AI model evaluations. And I think those kinds of voices are also becoming much more important to nation state leaders. So I'm just really glad that at the highest levels frontier AI and especially open source HEREA is getting a lot of attention, Tony.
It's getting a lot of politicization as well.
And how comfortable and uncomfortable does that make you know?
I've sat down with David Ulovitch a couple of weeks ago we were talking about American dynamism within this new administration. Then, of course there's a relatively politicized hire rightly along wrongly whether it was politicized of course, mister Penny becoming a deal partner. Of course, mister Penny, twenty six year old was well known for having had an incident on the subway here in New York and ultimately led to the death as someone who's homeless.
And there was a read on that higher. How are you feeling.
About the cultural impact and the perspective of the culture at a sixteen Z this has.
Yeah, look taking a step back.
I think one of the things that's always said a sixteen z apart is just how strongly the firm believes in its values, right, and so in the case of open source AI, for example, I think the firm is taken a very clear position that.
We believe open source.
The history of computing infrastructure is shown that open source is critical to unlocking massive amounts of productivity for humanity and for society. You know, when you look at storage, networking, compute,
and so on. I think a lot of the productivity we've seen from software comes from a value system and a philosophy and a belief that democratizing access to the best technology, put in control of that technology in the hands of the biggest companies and organizations is what pushes technology forward.
And so you know, while I'm not.
An expert on American dynamism, and I'm sure you can get better opinions from my partner David on that, I think the more important thing to notice is that the firm just stands by its values and its philosophy is very aggressively.
Thanks for articulating that. As NITA, it's great to have some time with you on the future of AI and regulation and throughout General partner Andrewsen and Horowitz Jackie.
Coming up by Now pay Later firm Klarna has added to JP Morgan's payment platform. Clarna CEO joined us to discuss what it means for the startups future.
This is Bloomberg.
Robin Hood reported revenue that more than doubled as the online trading firm was buoyed by crypto market transactions around the US presidential election. Here's what CEO just had to say on Bloomberg's open interest.
They can listen a lot of people focus on crypto and we're certainly going to be in a more innovation friendly environment in crypto. I think that's going to be a tailwind for our business as one of the few scaled players in both crypto and traditional financial assets.
Buy now, pay later provider Klarna has been added to JP Morgan's payment platform. The Swedish spin tech company has been expanding partnership deals in recent months, and it's targeting a USIPO later this year. The company CEO Sebastian Schimankowski joins US. Now, Okay, let's talk about this partnership because it's a major US bank, and I want you to quantify the upside of this for for US. How much of a boost in revenue does this mean for Klarna?
Well, you know, time will tell, but I mean, obviously from our perspective, JP Morgan is one of the you know, it is probably the largest payments company in the world. They actually do two trillion dollars worth of volume, and so for Klona that does one hundred billion dollar on an annual basis. You know, even if we if we're super successful with them and can get five to ten percent of that volume on the time, that's obviously a massive opportunity so we'll find out. It's always you know,
big orkanship like this. You announce them and then it takes some times because there are systems, integrations, promotions and stuff like that. But we're very, very excited about it and super proud of the fact that Tip Morgan decided to work with us.
But they might decide to work with other by now high later players.
Is that an issue the competition?
No, I mean I think, look, they work with both Visa, MasterCard and Amex, and I think like the next generation of companies that you see on the screen here, they are kind of the next generation. We think of ourselves as a third party network, and I think there will obviously be others as well, so there will be others, but we're very happy to be first to announce this partnership with them.
And let's talk about that third party focus and these partnerships, Sebastian, because I know you can't talk too much about an IPO. You've got a lot of investors to convince of the ultimate valuation of your company. When you're signing up merchants but not having a direct relationship, just tell us about the value that that has.
No, for sure, I mean Klana have historically signed up merchants directly, and that's brought us to about six hundred thousand versions. Then took a closer look at like, I mean, maybe the most successful expansion of a third party network was Amis in the last two three decades, which went from you know, being something you only used at restaurants and hotels to being, you know, something you can use everywhere.
And so it's all about acceptance points. And we realize that that's not going to happen by our own machine. That can only happen to these amazing partnerships with Stripe and the Addings of the world and the world Pace and the Jping Mormons of the world and so forth. So so we're super happy about this. It gives us, you know, access to millions and millions of immersions to
make Klana acceptable. I mean in the US, still a lot of people that associate us primarily with binapulator, but like thirty percent, thirty percent of our volume is paying fold the full amount.
We offer all types of payment forms.
So we think about ourselves as a third party network, and Visa Mascot and the others need some competition.
Let's stay in the US for a minute Sebastian because here the Consumer Financial Protection Bureau its features in question. Now that it's kind of come within striking distance of Elon musk Stoge, is this a good thing for Klarina?
Well, I mean, look, I think we are based in Europe, where there's very tough regulation, much tougher in any ways. I mean, it was actually funny the only thing Trump said that was for more regulation was to cut credit card interest rate fees, which to me kind of make sense because you know, a lot of markets we operate in Europe, you will see like max interest rate card can be like at sixteen percent or eighteen percent, right,
while in US is very very different. So I think you could expect from this administration to go quite some tough challenges to the banks. But I think the best way is going to be more competition, and to some degree, you know, less regulation can help to accelerate more competition and to go after those success profits that we've seen
in the banking industry. So I think that the you know, we are have always operated according to regulatory requirements, but also in addition to that, we have always said that, like the ethical standards are extremely important for us and to make sure that we provide services that are priced reasonably for consumers, that we don't charge too high interest or too high fees and so forth, and that's going to continue being an objective for us, either CFPB is present or not.
All right, Well, real quickly, Sebastian, what about crypto You called it a decentralized Ponzi scheme in twenty twenty two.
Has that changed? Is Karna planning?
Yeah?
Please?
I was happy you brought that up.
Well, I actually this this weekend after thanks to my board member Andrew from Sequoia, I met with a few very interesting crypto companies and after listening to them and what's happening with crypto, stable coins, bitcoins, I did a small tweet this weekend that said that like, okay, I give up, it's time to explore crypto for Klana. And I thought that, like everyone would be just sighing and thinking it was the most boring news ever because it feels like we're the last large fintech in the world
to say that. But I had over a million views, so people are super engaged. The whole community open up and I got like one thousands ideas of what we're going to do so, I'm excited about that.
Now happy you know sometimes you're wrong.
Come back and talk with AI with us as well.
Soon we've run out of time, plan to CEO Sebastian showing Kowski.
Thanks so much for the time.
Now.
That does it for this edition of Bloomberg Technology, Jackie, don't forget your audience can go and check.
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