From Bahard where Innovation, Money and power Collie in Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
I'm Caroline Hyde and Bloomberg's world headquarters in New York and our Meed Ludlow in San Francisco.
This is Bloomberg Technology.
Coming up the reality of artificial intelligence. It's disruption, hits hiring, it hits business models and more. We're going to discuss it all with Apple co founder Steve Wozniak later.
This hour, and we'll sit down with the CEO of Uber as the right sharing company post solid earnings on strong demand for rides and deliveries.
Plus we'll speak with the CEO of so Far I mean the banking system termil is the personal finance company partners with travel john Expedia to create a rewards program for its customers.
The main earnings mover is certainly Uber. We're looking at the biggest jumps into around November. You look at asedy bit DAR outperforming in the quarter, gong strong outlook for adjusted ebit DAR in the second quarter, gross booking slightly below estimates, but their strength in riding and strength in delivery, and we will get into that Emily later in the show.
Lift modesty higher had been lower on some of the outperformance by Uber because of course they're so closely linked as market competitors.
Let's just for a moment, Ed, though, talk about one particular company that you didn't mention in the micro. We're going to talk about chat GPT. How is up ending the ed tech industry seems to be a concern in particular for Check, absolute extraordinary move for this online education company, down more than fifty percent at one point. It's following the company warning that chatbot tool is really threatening its
homework health services. Check CEO says they've noticed a quote significant spike in student interest in chatchbt since March, which is impacting their new customer growth rate. So what does AI and education look like going forward? But how do they harness each other? How does upend each other? And stick into the impact of generative AI in particular on ed tech space.
How do you putovies with us?
His CEO of co dot August, an ed tech nonprofit which just launched teach ai along with karn Academy, the World Economic Forum and others. Teach ai is look an initiative dedicated to helping educators teach with AI about AI, but HARDI how much already is AI teaching kids instead of teachers?
I don't know by the AI teaching kids instead of teachers. But what every parent, every school student, and teacher recognize is that since the moment that chat GBT in these chatbots came out, kids are wondering can I use this for homework? Teachers are wondering how do I need to adjust my classroom now that this technology is out there? And you know, one of the best questions when I show this to my kids, he also asked, am I
allowed to use this for school? But then he also asked, what's the point of school if this can do all this stuff well perposely?
Right?
And so these are questions that nobody has firm answers to. And part of the issue is that the technology creators aren't saying how schools should be using it, and school leaders are just receiving this technology is coming out, wondering
how do we react and it's moving so fast. The goal of teach AI is to bring together tech leaders such as OpenAI, Microsoft and Amazon who are creating these technologies, together with education leaders such as code dot Org, con Academy, the College Board, and then global education leaders all across this country and all six continents to answer these questions about how should education evolve for an age of AI?
I mean, will this erode many a business model you're currently looking at incorporating AI curriculum, you say, and tools into your platform to reach one hundred and fifty million students by twenty thirty. But what is education prophesied for us? What is education going to look like by twenty thirty? Will they really be using online tools?
Well, one thing I could say is the current education system we use, where students spend most of their time reading in books and sort of filling their heads with knowledge from books, was designed based on the invention the printing press six hundred years ago, and so we need to rethink how we do education in a time when information is available at your fingertips and AI can synthesize
and create for you. And so our goal isn't just to get students who know how to memorize a lot of information and practice repetitive road tasks, but helping students become creators and problem solvers using AI as a superpower.
Yeah, are you on the side that AI augments rather than competes again or are you already thinking, wow, education is going to have to so pivot because the job market is going to so have to pivot.
I think both of those are true. AI absolutely augments, but we need to teach students not just the skills of the past, but also the skills of the future. Every workplace is asking its workers figure out how this can make you more productive, whereas today many schools are banning AI because it's considered cheating. The heating that people are trying to stop in schools is what employers want their employees to do. They're like, oh, if this makes
you work faster, please do it. If it reduces the time spent on any kind of task.
Howdey does code to org Good morning. By the way, have any sort of granular insight into how students, either at the high school level or college level are actually using generatord AI tools.
How they're using it. It's much broader than what code dot org sees. And honestly, the best way to see that is what is listening to parents, students, and teachers, and it's much more anecdotal. You know, as one example, my neighbor's daughter just got an f on a homework assignment because the teacher accused her of using chat GPT, and she's insisting I didn't use it, I wrote it myself. And that's a kind of story that's happening all around
the world. It's not easy to keep track of because, first of all, students when they use these tools, they use them at home, and they also know to change up the writing and to personalize it as well. But the real issue we need to talk about is not to view using of new technology as cheating, but to figure out how do we move the goalposts of education.
How do we teach creativity, communication skills, problem solving skills, and technological fluency so students learn the stuff that we want them to learn, including how to use these tools to be more productive.
So, in Cheke's case, their shares are plunging because they gave evidence that their offering is being displaced by chat GBT. It's a free service principally that anyone can access as long as they get past the wait list. Is that what you're seeing that generative AI tools are displacing traditional online education tools.
What's definitely true is that tools like chat GPT can help a students do almost all of what their current homework looks like today. And so once that's out there, students wonder, can I use this for my homework? And of course teachers classroom schools wonder, how do we change what homework is? Because what's the point if a student just plugs it in and gets an answer and doesn't
actually use their heads and their brains very much. And so there's going to be great disruption within education technology and also in classrooms as we rethink not only the tools for education, but even how teaching has done and even the purpose of education.
You've been in the for profit side, studying your career at Microsoft and other tech giants, and then when you're now in a nonprofit focus, how much are you talking with government?
How much are you thinking about the ethical.
Repercussions of where artificial intelligence is leading us, whether it be from children, whether it be more broadly about the way in which we use it as humankind and what it ultimately means.
For all of us in our productivity.
That is a fantastic question. It's the purpose of what we're announcing today with Teachai, which is to bring together for profit and private corporate leaders basically the technology creators with the education leaders, many of which are basically governments, to have this dialogue to figure out how to safely and ethically and equitably into rad AI And I'm not put it.
Back in its boxing. You don't think we should slow down?
Yeah, there's two extremes, which is just release the technology, see what happens, and the other extremes ban it, slow it down, stop it. The middle ground is to figure out how do we use it and harness it, but with safety and ethics as part of that conversation. And that's why we're bringing together not only tech leaders and
education leaders, but government leaders. There's numerous ministries from around the world, ministries of education that are participating in this work because they want to basically be at the forefront of how we change education.
For good hopefully. Co dot com, quote dot org. In fact, CEO Hardiputovi, we thank you so much for being with us.
Meanwhile, and more on the global sphere.
Right now, Yeah, Infinian Technology is breaking ground on a five billion euros new chip factory in Dresden, Germany, as part of its largest investment in chips. The German company's aiming to get another billion euros worth of funding from the European Union as the block seeks to double European chip output by twenty thirty. CEO Yoch and Hannabak also spoke about the Chips Act and self reliance in the semiconductor industry. Have a listen.
I would appreciate some alignment in the liberal democratic world on the Chips Act. I think no country will achieve self sufficiency. It's all about reducing one sided dependencies, and therefore some alignment would be for the better good of the whole industry and the economy.
Coming up, Uber out with earnings at the top testaments. We sit down with Uber's CEO Dara Kota Shahi next. This is thing, though, on a.
Day where tech stops are on the downside, there's a significant apperform. We've got to turn our attention to Uber out with earnings and absolutely rocketing in terms of its share price, best day since November, revenue beat record profitability for the company, free cash flow as well, and even promise that they're going to be expanding profitability ed into
this second quarter. All of this, though, as monthly active users are actually perhaps a little less than expected but those users, they are active, they're riding more, we're ordering more freight. A little bit of weakness, but look, I took a drive from the airport yesterday and when I checked out Lift versus Uber, Uber still has a lower
price point. But that's the interesting thing, isn't it. As the moment ends to how much the competition, the focus on prices that coming down, whether that will ultimately impact some of the business models out there. For now, Uber really managing to show its pos post its earnings ed.
Yeah, Look, we're judging Uber on an adjusted ebit DAR basis strong in the quarter, gong strong outlook going into the second quarter, eight hundred to eight hundred and fifty million dollars above what the street was looking for. They had that twenty twenty four goal when it comes to adjusted ebit DA coming up. We welcome our bloombag TV and radio audiences worldwide joining us now the CEO of Uber, Dara Kostrashahi, and of course Emily Chang of Bloomberg News here with me and take it away.
Thank you so much, and Dara, thank you so much as always for joining us. Obviously, we're seeing strong reaction in the stock today, strong on mobility, strong on delivery. I want to focus on delivery first because that's more discretionary, and obviously times are tough right now, people are being more picky about what they spend on. Are you expecting any pullback in delivery in particular?
Why or why not?
Well, first of all, thank you for having me. It's great to be here, and obviously it's great to be here within the context of super strong results overall for Uber. As it relates to our delivery growth, we saw a really solid growth this last quarter in terms of constant currency, growing about twelve percent. Are gross bookings on a year on your basis, and we're seeing the habit of frequency.
For example, frequency for a delivery consumers was up on a you're on your basis, Basket size continues to be higher, and we actually saw our growth bookings growth accelerate from Jen to feb to March. So we expect Q two delivery growth to be higher than what it was in Q one. So we're not seeing any kind of a signal at this point of a slowdown. And while there may be a slowdown going on in terms of the economy,
I think generally the consumer remains strong. Generally the consumer spending more money on experiences, and I think food is a part of that experience set. And we as a company, because of our global scale and size and our brand and our tech prowess so to speak, are generally going faster than the delivery category. I think if you put that all together, along with profitable growth, you get to good outcomes regardless of the environment.
All Right, Lift has a new CEO. They've made it clear they're going to lean into lower prices to compete. They want to call back market share. What's the risk of a price.
For well, you never know, and you can't predict the future, but from what we have seen in terms of the statements coming out from Lyft is that they want to compete based on competitive pricing and what we're seeing in the marketplace. You know you mentioned at the beginning, which is Uber pricing is quite competitive in the in the marketplace.
And I think if you have Uber.
And Lyft competing not on who can have the lowest price, but who's got the best experience, who's got the best brand, who's got the better reliability or breadth of products out there, I think that you know, we can both do fine in this marketplace. The fact is that the mobility marketplace is growing. People are going out more, They're going to restaurants,
they're returning to work, they're returning to the office. We are definitely seeing those tailwinds and I wouldn't be surprised if left us two going forward.
Welcome to our Bloomberg radio and television audiences worldwide. We're with the CEO of Uber, Dara Kshrashahi Dara on that outlook on consumer strength. How long does it last? I mean, are you seeing any price pressure on the consumer or any sort of granular data you can give about how you see the rest of the year.
We're not seeing any kind of pressure as it relates to consumer spend at this point, and I think part of it is because of our supply situation and generally
supplying the marketplace getting better. We are seeing drivers talk about inflation more and about seventy percent of drivers who are coming onto the platform have said that inflation, the affordability of groceries, et cetera, has played a part in their decision to come onto the platform and to join Uber in order to augment their earnings or just bring in a healthy earning set. As it relates to the marketplace.
Right now, we are seeing some signs on the enterprise side of weakness in terms of pickup, for example of Uber for Business. So when we look at Uber for Business new client signings, they're a bit slower than what they were pacing before. So I think you're seeing in the environment companies are being more careful, they are cutting
cost often they're kind of cutting personnel. But that weakness has definitely not translated into the consumer, and the consumer we see being very strong and we don't see any signal of weakness there at all.
The other enterprise facing business is freight, which you fund separately. But what metrics would guide a timeline to sell or spin off Uber Freight Darra Well.
At this point, the focus for freight is to really operate the business in an optimal way. Right now, the freight brokerage business and the transportation business is readjusting pricing significantly. Prices were sky high two years ago. They have come down significantly for two years now, and I think what we're going to see is essentially pricing bottoming out sometime
in the next couple of months. As we see that pricing bondoming out, then we can get in a position to grow our freight business use or digital acumen and the data advantage that we have in order to provide a better service for shippers and to be the best best platform for truckers out there. That's really the focus of freight right now. Ultimately, we will look to optimize, whether freight's inside of Uber or outside of Ubert, et cetera, to maximize shareholder value.
That's what we're here for.
But today the focus is on building the best digital freight business that we can.
Tens of thousands of folks have been laid off across the tech industry, Dara. You've continued to say no company wide layoffs, but you have done some more targeted layoffs. You've done some performance related cuts. How are you thinking about headcount right now and are you considering potentially a broader riff if things continue to get worse, you know, looking across the broader landscape.
Well, I just don't think that companies should all of a sudden get discipline about headcount because they have to. I think that you've got to have discipline on heackcount and cost as a continuing way that you operate going forward, daily, weekly, monthly, yearly,
and you've seen that discipline for us. So if you look at our heaccaunt growth from call it twenty nineteen to where we are now for the base business, for our mobility and delivery business, total heacaut growth over that period is up about ten percent versus a bookings growth that is approaching seventy percent. So we have always been
very disciplined in terms of how we manage costs. We talked about this year, even though we're showing huge top line growth and huge profitability growth, we're not letting go of that discipline, and we're saying that headcount is going to be flatted down. And I think that kind of discipline in the rhythm allows the company to focus on executing, on innovating, and not looking around, you know, over your shoulder as to whether you're going to be one of
those people who's fired or not. So right now, the business is executing well. If we keep executing well, we're not going to have a riff. If we don't, then we're going to adjust, and we've always adjusted at Uber in a very timely way.
All Right, you're listening to Uber CEO Dara kosra Shahi. You've seen so many economic cycles. Dara, you ran a travel company through nine to eleven, through the financial crisis. But look, you know, we just saw First Republic sell in a fire sale to JP Morgan. How are you thinking about what's ahead? What's your outlook and how long does this last?
Yeah, I could not tell you how long this lasts, but I think as a company you've got to be prepared. I do think that the cost of capital for the banking system that tends to be a higher leverage, but for the startup ecosystem is getting much more dear. I don't think we are close to the end of that road. I think that rates are going to stay higher for long because despite people predicting recession and predicting recession, it's
not there yet. So I think that companies across the board, whether you're a bank or you're technology company, you've got to be super conservative as it relates to your balance sheet. You've got to be incredibly disciplined in terms of capital allocation. And I think that environment is going to help the larger global players who are more diversified, and we are exactly that, and that's why we're showing higher than category growth and much stronger than category margin expansion and now
significant pre cash flows as well. We think that's a great combination and we're prepared to deliver on that promise whether the environment's strong, medium or weak.
Dara I went through the earnings transcript with a fine tooth comb no mention in the prepared remarks, But the first question was about AI. Are you going to accelerate your investments in AI? And are you an AI company?
We have been in AI since I've been here the company. You think about our pricing algorithms, routing algorithms when we decide to let's say batch a delivery order or not. Even technologies such as recognition of your license or your insurance card, etc. All of these are AI driven and they have been a part of how we operate as a company. What we're seeing now is that as these models get more capable and larger, you can train them
over much larger data sets. So we would have let's say, an AI algorithm that is pricing for city by city by city. Now our AI algorithms current priced globally and the efficacy in terms of pricing and matching is incredibly powerful. And because we have more data than anyone else across a multitude of businesses. We think AI is going to be a very very powerful tale one for.
Us Derek Quick, yes or no? Are you a chat GPT user?
I am a chat GPT users. I'm trying to get better at it. There's a I've got my skills as a prompt engineer or not what I want them to be?
All right?
Oh, thanks to the CEO Dara Koshra Shah and of course our own Emily chang back to you.
Care what a great question to ask, like to leave it on ED. We thank you so much. It's time now for some talking tech. I'm going to stick with the theme of artificial intelligence. IBM, CEO of Vin Krishna says that technology is prompting Big Blue to stop or slow hiring for jobs it believes will be replaced.
By artificial intelligence.
That amounts, to get this, about thirty percent of its twenty six thousand workers in non customer facing roles.
That's over just the next five years alone.
As Samsung said this week, it would ban employees from using so called generitor AI tools such as chat gipt now.
The company is concerned that data sent.
To AI platforms could be stored on external servers, making it difficult to delete, putting it at risk disclosed to other users.
Welcome back to Bloomberg Technology. I'm Ed Lovelow in San.
Francisco and I'm Caroline Hied in New York.
There's a huge discussion to have around artificial intelligence, and we welcome now our Bloomberg TV and radio audiences worldwide and bring in Apple co founder. Steve Wozniak, active in the field of artificial intelligence, added his name to the thousands of signatories of that open letter calling for a six month pause on training AI systems more powerful than GPT for the follow up to chat GPT, to give researchers time to get a better grasp on the technology. Steve, good morning and welcome.
Thank you glad to be here.
You're a signatory. Did that effort work?
Effort work? Are we actually delaying the development of AI? No, you really can't delay the development of technology. And there are people that are motivated for various reasons, largely financial, that are you know, going to push it no matter what, not to say, oh, we're going to give up the effort. You know that we're on and the path we're on not really but new technology brings the pluses and the minuses, and we're seeing so many examples of that in the
news in presentations that are being made about it. And when new technology brings big changes, sometimes it's be responsible, you know, think about both the pluses and the minuses, because I really fear, I believe more than anything else, the apex of everything that's good in the world is truth and.
What is minus is Why did you sign that open letter and petition?
Well, largely it was, you know what, I'm a human being and I'm more less influenced by what I can things I can read about does this and that example, but by people. Certain people that I trusted and the people I trusted were actually going in this direction, and I wanted to be a part of it.
And I do believe just in responsibility.
Not that I'm scared of the bad sides of AI, which there are plenty to be shown, or it's going to really be helpful for us, which it is, but it's just boy in new technology you should brings responsibilities.
One of the co signatories was Elon Musk. Elon Musk then founded x ai and has been hiring in the field for his own AI startup. Following the petition, what do you make of that?
I hope great comes from it.
I hope that basically holding it back from being used by bad people or just doing bad things on its own because of the influence it gets one's training. I mean, you know, this hallucigenic and doesn't know what it's doing. I always think of dreams and a lot of the things that comes by there are dreams. They kind of make some sense, they could be partly real, But dreams, to me are schizophrenia. They talk about hallucinations coming out
of AI schizophrenia. If you had dreams and you thought it was real, you experienced those things in life in real life, you didn't know it was a dream, That's what That's one possible explanation for schizophrenia. So I'm I'm just I don't know. I'm just on the side of truth with the the fact that the bad people in the world and ones that want to spam us and get our passwords and take over our lives, they've got a new tool, and how are they going to be
able to use it? And how can you be skeptical when you don't even know if it's coming from AI?
Steve, those users a phrase hallucinating. Many say we're making it more powerful.
We're encouraging people to think that AI is going to be more terrifying because we keep making it out to be sort of human in this manner. Do we need to change our turn of phrase? Do we need to sort of understand that this, at the end of the day is still just technology.
Oh no, it's taken us a little further in what we can do as humans. If I'm fed a lot of good source information from AI, and I'm a human editor and know how to use it and pass it on, oh it's given. It's a great tool in our lives. But with a lot of good. Look at the social network and the movie of Social Dilemma, and you know, a lot of good can bring a lot of also bad and being tracked and traced and spammed and de seated.
What if we had developed the Internet with protocols in place that you could always identify anybody and that spam was almost impossible. What if we have that chance to sit back and think about AI a little before it's here. We don't really have the chance, But it's it's that sort of responsibility that I want to take the sight of.
Steve wasn'tak of course, who is the Apple co founder for our radio audience and TV audiences, Steve. People have anticipated this coming, not just since November when CHATCHIBT sort of came into all of our consumer lives. But you've seen round corners when it comes to technology yourself. Why weren't you worrying about this a year ago? Why when wasn't it on chatchbt GBT version three that that started to make it all the more powerful? Why now start
to go to the administration? Why now start to go to companies to self regulate?
It's basically based on news cycles. Now good five years ago at least. I mean the book Singularity came out, and I was going around given speeches for about three years about how this new tech technology he was going to take over the intelligence and humans and really be you know, we'd have companies running with no humans at all. And I've backed off of that. You know, I got
scared of that. For one thing comes out always negative. Okay, technology AI is going to take care of me, So I will have all my food and all my clothing and all my shelter, and my kids and my family and a lot of entertainment, and I'll just be like a family pet, totally taken care of. Sounds like a good thing. So if I'm going to be a pet someday, I thought about it, how do I want to be treated? So that's when I started feeding my dogs for lace steaks and rotor tessery chicken and stuff.
No, it's honestly true. And this was a long time ago. For five years.
It was a couple of years before I finally switched directions based on what one of my brilliant kids said to me. And you know what, all this great stuff and the world lets us do more as humans when we found it happily in those early days, one of my primary purposes was a person is only so capable. Give them the ability to use a computer and they can do more. They can be more in charge of
where their life goes and be more capable. So I'm all for that, and I'm for change, but I'm also against things that we use dishonestly like that, like the woman who got a phone call and it was you know, deep fake. It was her daughter's voice, you know, pleading for money. And we you know, some of us have already been hit up in the past with ransomware attacks and all that.
Steve I tweeted that you were coming on the show. A lot of questions from our audience. Thank you for sending those in Why do we not talk more about Apple and artificial intelligence?
You know, I don't know there's a.
I don't know what's going on side of Apple any more than anyone else. Apple may have some very deep programs going on artificial intelligence. Also, Apple is such a rich company that they kind of look around when there's something that may change the world that we're not developing, we can usually assimilate it. We can you know, acquire those those people that are doing that. And you know, I mean what Microsoft did with the open Ai.
Who do you think leads the charge in that respect? Then you know, Microsoft pretty much put us on the map at the beginning of this year because of the investment additional into open ai, then the integration of open Ai. Do you see megacap companies leading the way?
Oh, I don't try to pick a winner a loser. The next one round that could come out next week from somebody unknown, you know, and be sort.
Of a leaser check.
GPT from open ai is really what turned us on into it as people and you know what, companies and all that. They don't move ahead because of knowledge, move ahead because of motivation and emotions. And we should do this, We should do that. This will fit in with our life and our and our competitors and all that. And AI just comes from stuff that's already been published.
They don't create.
Creation is the way forward, and they don't really create new stuff. They just apply it, speak it very well, put it all together in a way that makes sense, and a human can use it to move forward and be creative and create new things.
New products.
Like when is an AI going to sit down and say, oh, what should I create next? That makes sense for the world of people, And it's always going to be in the end for people. You know, some people like to say, oh I will be ahead of us.
Yeah.
What then you've almost admitted at the very start of this conversation that it can't be bad.
Get put back in its box.
The signing of the letter sort of hasn't done anything to slow the rerection of travel and technology.
Would you like to see regulation and is it self regulation or government regulation?
Okay, Mira mccott or whatever.
The CTO of Open AI and and Jeffrey what's the name that won the Touring Prize, the Nobel Prize and computers like both say yes, there should be regulation and we should be very cautious about what's common because you don't know how to handle such big change. I'm more worried than anything else about just like the spam and taking advantage of people points.
Of view, the evil use of it. And I hope we.
Brought attention to the fact that AI has some issues. And I would like to know everything I read did it come from AI? Then I can be skeptical. And you know, because I like sureness. I like to read something. Can I really believe this? I'm already, you know, old enough to be very skeptical.
Anyway, Steve, before we lose you, what do you make of the Apple of twenty twenty three, the company that once you founded thirty years ago. How do you assess its health?
Well, I don't assess business health. I usually look at products, and there's a product line from Apple is very good, it's well supported, it's maintained. But I also look at the people that run a company. And you know, Tim Cook especially has been a long time a favorite of mine because of his cares for diversity among clients and employees and partners.
All right, Apple co founder Steve moresneak, thank you. Now coming up, Hollywood writers are a fish forming a picket line after weeks of negotiations with studios fell through. Next word more and what the writers are demanding and the role that generative AI plays in Hollywood.
This is Bloomberg.
In today's going viral, a bit of deja vu for those of us who are perhaps consumed television regularly in the late two thousands, remembers of the Writers' Guild of America. They're officially on strike again as of this morning. It's
the first writer's strike in roughly about fifteen years. Bloomberg's Felix Jillette is joining us now for really the impact not only on the media companies, but more broadly, this is going to impact the economy of la Remind us why they're striking and why it's so much about streaming.
Yeah, it all comes down to these changes in how people have been consuming television and how television is being made as we've switched from this traditional broadcast cable world to the new streaming world, and during that transition, a lot of the ways in which writers were compensated changed, and the writers are essentially saying all of the value that was in the traditional TV market, you know, has
been stripped out and we're not being fairly compensated. And a lot of that comes down to things like how long seasons are in the streaming world. You know, typically streamers will make eight to ten episodes for a season of a show, as opposed to twenty in the broadcast world, So there's less writers working on a show, there are less seasons typically made. All of that means less money
to the writers. You know, residuals that were you know, people, if you had a successful show in the broadcast world, you could live off your residuals for the rest of your life. Streaming, all of that has been pretty much stripped out.
Felix artificial intelligence was did among the concerns and demands. They're not against using chat GPT full stop. There are just some parameters that they want to set.
What are they I think the issue is they don't want residuals going to people who created you know, generative AI to create scripts, and they want some you know, control about how that technology is being employed in the writer's room. I think a lot of that, again just comes down to how many writers are working on these shows, how much time they're getting, how the money is carved up. I think that's one of the concerns that's a little bit further out in the future, but definitely on everybody's
mind right now. I think a lot of it is more, you know, sort of prosaic concerns, like, you know, how many writers are minimum, you know, for a show that's a pre development, what's the minimum for the number of writers on the show that's in development that's been green lid. So those are the issues they're really fighting back and forth.
On Felix to let Bloomberg News, thank you so much. Now, coming up, we're going to return to the volatility in the banking system and speak to the CEO of Sofi, Anthony Noto. That's next. This is Bloomberg.
Look, we're still all thinking about the banking terminal. It continues today, in particular after the First Republic seizure as regional banks they're taking a hit in terms of stock price. We want to talk about well the ecosystem of finance, but also some micro news. The CEO of online lender Sofi Anthony noto. He's here, of course. The company just announcing it's partnering with Expedia to bring exclusive travel benefits
to its customers. You're thinking about how to set yourself apart from other online lenders, Anthony, But first and foremost, I've got to get your take. What do you make of the financial stability in the US at the moment, the worry over regional lenders.
Yeah, I'd say what's happening is on the back of the challenges at Silicon Valley Bank and First Republic, consumers are really you know, it's a movement to quality, it's a movement to trust. They want to go places that they can trust the brand, trust the company.
You know.
One of the things that we've seen at SOFAR is that our members trust us greatly, not just just with their checking in savings needs, but their needs more broadly, was their credit card or their brokerage account, or buying a home, or paying for college education or refinancing. We just posted our eighth consecutive quarter of revenue in yesterday with forty six percent year of year growth four and
sixty million dollars of revenue. Those eight consecutive quarters of record revenue performance reflect the trust and reliability that we're delivering for our members. That said, we've also continued to
increase the benefit that they have. We now provide two million dollars of FDIC insurance through a partnership, so that not only are we providing trust, but we want to continue to increase their liability and the confidence that people have, and that's what's leading to such our strong results across the board, both in revenue and EBADOD growth, as well as positive margins.
Anthony, they're worried about your forward looking guidance on EBITDA growth and is that competition in any way because you have a banking license, but a lot of the other online lenders neo banks are doing well with just banking partnerships. What do you make of the space you've made for so far when the market is worried or maybe it's just profit taking.
We raised our outlook. Actually we increased our revenue guidance for the year. We also increased our EBADAD guidance for the year and reinforced our view that will be gap profitable by the fourth quarter. Our bank, which is a subset of our overall company, is already gap profitable and We had really strong margins there of twenty percent, really
strong return on tangible equity of over twenty percent. As well, the outperformance that we had in Q one on revenue, we passed through and raised it for the full year.
We also raised ibadah. We have a lot of leverage in the business.
Our incremental margins, which is the change in revenue that drops to the bottom line, was forty plus percent for net income on a gap basis.
And it was also they.
All worried about your EBITDT.
Yeah, it's growing quite dramatically.
We had sixteen percent ebida margins in the quarter, up from six percent a year ago, and our ebadah is now greater than our stock based compensation for the first time. And we're on the track to be gap profit by the fourth quarter and generate really strong returns.
And today let's go back to the travel news. Is this you trying to win business from American Express in the Chase card business.
Yeah.
Our value proposition is that we want to be there for every one of the major fincial decisions in your life and all the decisions in between every day. So we want to help people get their money right by helping them borrow better, save better, invest better, protect, and spend better. So this is our first foray into helping people spend better outside of just finding will services products.
So we launched.
Sofi Travel with e Speed to give our members great value in their travel choices, great selection, great ease of use, and most importantly, great prices, prices that are even better when they pay with SOFAR and they use their reward points and they actually generate reward points with us, so we're providing what they could typically get someplace else at an even better price, so they're spending better with us.
We'll look to do this in other categories like entertainment and other types of things like sporting events, etc. That are high ticket purchases, to give them a better way to buy with a better currency of our reward points and our partners that are providing discounted inventory.
And Toony Bloomberg is tracking closely the litigation against the Biden administration's decision to pause the student loan program. I know that has had some financial impact to you. What's the latest there.
What's really happening is in the courts and not we can't really comment much on it, but it will go through the typical process of the course, with different filings and different motions.
We think it's the right thing to do for our country.
It obviously is something that would benefit so Far as a business as well, but I actually think it's the right thing to do for the student loan program. College is not going to be free, whether student loans are forgiven, and we're supportive of targeted forgiveness of student loans or not.
People that are going to.
College today still have to pay significant amount of tuition and they're going to need financing. SOFI is one of the companies that can provide that. But there's a number of companies in the ecosystem that haven't been able to withstand what's happened over the last three years, and they've dropped out in helping people.
Pay for their college or refinance the college.
As I mentioned, we've had eight record quarters a revenue in a row, three record quarters of EVA Dana Row our bank is profitable and driving great returns. That said, we'd be doing even better if we could provide our members with the right types of services to pay for
their college education or to refinance it. And what the administration has done is put that on hold without a necessary amount of spending about five billion dollars a month that could be better used on people that need it and that are in despair, which is where it should be as opposed to those that can.
Pay Anthony thirty seconds. No more is it worth a pr hit because people say you're just profiteering.
Doing the right thing the harder rate or the easier wrong is always the way we're going to go, even though it may be viewed and scrutinized. It's the right thing that we needed to do for our company and what we think is the right thing for our country.
So Fi CEO, Anthony Noso, thank you so much for your time.
Thank you Grey.
That does it for this edition of Bloomberg Technology.
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