From Mahard where Innovation, money and power Collie in Silicon Vallet NBN. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
I'm Ed Ludlow here in San Francisco.
Caroline hids off today. This is Bloomberg Technology. Coming up on the program. Apple hits a three trillion dollar valuation. Will we close above that historic market cat milestone remains to be seen? The co founder of DeepMind now the CEO of Inflection AI. He discusses the potential of his company after raising a whopping one point three billion dollars and more trouble for Adobe's purchase of Figma, with the UK joining the EU and US in multiple probes of
that twenty billion dollar deal. Such a big week in the world of ten technology.
But there is one.
Big story this Friday, and it is Apple, the first company ever to hit a three trillion dollar market cap.
And this chart tells the story.
Look at the nine hundred billion dollars of marketcap we've added so far in twenty twenty three.
What is the story here? We will get to it in.
Just a moment, but I remind you last time we were near that level was at the beginning of twenty twenty two.
It's taken us that long to get back.
There is one person you want to speak to on a daylight today, and it is Bloomberg's Mark German.
Mark.
You cover this company as close as any journalist on the planet. I want to start by asking you, what kind of a moment is this? What kind of a milestone in technology history is registering a three trillion dollar market cap?
Ed?
Thank you so much for having me. Obviously, this is a incredibly big milestone for Apple or any technology company really, and for Apple to do this, to get back to where it was in early twenty twenty too. You saw what happened to the broader market over the last year or so, and to really come back up that mountain and get back here is a big moment for the company. I think that you saw a slew of departures, not only at the executive level, but maybe at the mid
level or lower level of the company. And one continued theme on those departures was people felt like their RSUs or the restricted stock units would not really pay out as much money as maybe they can earn in another company. Right, and the stock coming back up right, I think that could be a key way that Apple will be able to retain people moving forward as well. It adds new excitement to the rank and file at the company. They
know what they're working towards. In terms of an ultimate payout for the consumer doesn't really have an impact, but I think internally at Apple it is a something they'll never say, but I think it is a quite a positive moment.
That deep reporting is such a good point as well. It has not yet been brought up in our coveragejumping big Television of the three trillion dollar milestone. The short term story for the consumer has been about Vision Pro, but you argue in Today's Tech Daily that actually, if you think about the three trillion dollar market cap, it's not got much to do with Vision Pro at all.
What's your point, Yeah, I think we would hit.
This three trillion dollar market cap whether or not Apple announced the vision Pro head set in June at the Developers Conference or not. I think the Vision Pro story, you know, very long term for Apple could become an Apple Watch or iPad sized opportunity, which is about twenty five billion annually to the bottom line. And that's in
the real long term. In the short term, you're not likely to see this generate more than two to four billion a year annually for Apple, which is essentially very small. It's one to two percent of their overall annual revenue. It's really the ecosystem play, right. It's the idea that the ecosystem walks you in and such, where you're going to own an iPhone, an iPad, a Mac, and then every few years or so, you're going to upgrade to
new models. On top of that, you're going to subscribe to services, you're going to use Apple Care, You're going to visit Apple retail stores. You're going to buy more accessories like air pods, the Apple Watch, and maybe one day the Vision Pro at a cheaper price as well. And so that's stickiness, the idea where consumers are willing to spend extra. They're really willing to shell out for a new iPhone, the priciest iPhone, the most storage you
can get. That's what makes this company so lucrative and so special to the shareholder. One really important aspect that we also haven't touched upon about this three trillion dollar measure is that we're heading right into iPhone season. Believe it or not, We're only about two months away from
the iPhone fifteen going on sale. The iPhone fifteen is going to be a pretty significant upgrade on both the low end models and the high end models for the first time in three years since the iPhone twelve lunch in twenty twenty.
New design, big camera.
Improvements, changes to the display on the cheaper models, You're going to see another big iPhone upgrade cycle, and so I think consumers are excited to only be eight weeks away from that, and shareholders see that excitement, and so you're likely to see a big influx of purchases in just a few months, which obviously is going to drive attention to purchasing the stock too mark quickly.
The one phrase or word you haven't used is artificial intelligence. Why are we not talking about Apple in the context of artificial intelligence?
Because Apple has really set out this recent AI boom right over the past year or so. You've seen Microsoft, Google obviously open AI with chat GPT. You've seen Amazon all throw around the buzzword and talking about their new generative AI chatbots and such. Apple has really stood on the sidelines here and I don't anticipate any significant new AI related service from Apple to launch until the tail end of twenty twenty four calendar year twenty twenty four
at the earliest, so there's not much there. I know there's been some speculation for analysts and such that Apple is nearing some sort of generative AI ecosystem. There's nothing coming soon, and so I don't really think that could be priced into the stock as of yet. And I don't have necessarily think that Apple is planning very significant AI initiatives other than a new AI based health coaching
service for next year. But obviously the mother of all AI projects, as Jim Cookers said, is the company's self driving car. You're unlikely to see that at least for another four years or so.
Yeah, you and I have done a lot of digging on the subject of an Apple self driving car. Will stick with it. Bloombo's Mark Gum and everything Apple, Thank you so much. Happy Friday. All right, that's top story number one. Top story number two. We go to the UK, where anti trust regulators launching an in depth investigation into Adobe's twenty billion dollar purchase of Figma. Let's get the details. Bloomberg's Caffine Gemmel live for us in London. Cafriine, what do we know.
Hi, thanks very much for having me.
So what we know today is that the CMEs of the Competition of Markets Authority has said that as the Adobe FIGMADY will need an in depth investigation unless the companies offer any remedies up to solve these anti trust problems that they have found.
In the stage of this investigation. So, I mean, the main concerns from the CME are that within the design platform and the supply of screen tools as well. I know, these are two areas where Adobe and Pegma really compete, and the main concerns are that if Adobe bis stigma, then that means that they're really going to take that competition away and that could rise that could leave to arise in prices for customers and could also stifle innovation.
We're just showing the shares of Adobe at one point six percent near session highs. When you get a headline like this, sometimes the stocks react negatively because the market's thinking, wow, maybe this deal won't happen.
Is that the situation we're in now?
How serious is this development in the context of a deal actually getting done?
We look, I mean, it's too early right now to know whether it's serious or not. I mean these deals.
Will obviously always get some scrutiny. This particular deal is also getting scrutiny as Ideal and the US and as potentially pheasans go to meet in Europe. So I mean we'll need to, you know, find out what the CME finds and its potential fees to investigation, whether we know it's going to be CDs or not.
These are just the stages that these sorts of deals have to go through. And of course you know that the CME that people rely on. Consumers in the UK rely on the CME to do to make sure that consumers are getting a good deal.
The Moss Catherine Gemel in London. How often is this happening? The trifecta US, EU, UK regulators when we're talking about a tech deal. Great reporting this Friday, we'll stick with it.
Now.
Coming up, Inflection AI CEO is going to join us to discuss the company's one point three billion dollar fundraise and it came from the likes of Reid Hoffman, Bill Gates in Nvidia. Big conversation coming up this is Bloomberg Technology. Inflection AI has just announced it's raised one point three billion dollars in funding from investors like in Video and Earlier this year, Inflection Ai launched its first product, a
chatbot called Pie, a personally modeled AI chat box. Inflection Ai CEO and co founder The Stuffa Sullyman joins us from London. Interestingly, Congratulations, what is frankly a monster a round? Why did you need to raise that much money?
Thanks?
Ed, Yeah, great to be with you and appreciate the congrats. I mean, you know, we're really building the cutting edge of machine learning models today in order to create Pie, our conversational AI, and that requires vast amounts of compute. I mean, we're actually constructing the largest supercomputer in the world today, built on in videos h one hundred chips, and that's obviously very expensive, but as a startup, it actually enables us to get the best of both worlds.
Have you know, the kind of resources that you might otherwise expect in a big tech company, but also the speed, agility and super high quality talent that you get when you bring together the kinds of folks that have been involved in building all the last generation of models at deep Mind, Open Ai and at Google.
All the attention goes to Nvidia because they are participating in this roundless stuffer that you are building the underlying LM or foundation model using their H.
One hundred GPUs.
Yeah, I mean, we have an incredible partnership with them. They've been fantastic to us. Not only they investing in this round, but they made us their key partner to get access to H one hundreds and we've built a really powerful cluster with them. Just a couple of days ago, we announced that we have the fastest performing AI cluster in the world, and in a few months time we will have increased the size of that cluster to be the second largest supercomputer on the planet, which is just
an incredible opportunity. And so we're super grateful for their partnership, but also the partnership with Microsoft. You know, we use Azure. They have an incredible cluster there and their AI infrastructure is also second.
To none the stuff.
When I bumped into you in the corridor of Bloomberg Technology Summit last week, I reminded you of something you said on stage about AI development being a meritocracy. You mentioned that in passing, but I wondered if you could elaborate on what you meant by that.
Well, it's a meritocracy in the sense that you know, the cutting edge is also being open sourced and made available to millions of developers around the world to adapt, innovate, and experiment. And it's kind of an incredibly interesting time because on the one hand, models are getting bigger and better, and on the other they're also getting more efficient, smaller,
and cheaper to run. So both directions of progress are really being turbocharged in this new wave of AI, and that's incredibly meritocratic, and we're seeing huge innovation at both ends of the.
Spectrum supercharged in a meritocratic way. But you guys, is kind of have a big advantage in the access to the H one hundreds and the compute that the GPUs provide. Is there a way you can kind of quantify the advantage for me? I think a lot of people will say, Okay, we have Inflection AI and PI, how is it similar and or different to open AI and GPT three point five. What is the difference technologically and the goals as well?
Yeah, it's a fair question. So our most recent LLLM, which is called Inflection one, is actually better on all of the public benchmarks than googled Palm one. Deep minds Chinchilla and open AI's three point five, which is a
great achievement for a small organization like ours. In terms of the total amount of compute that we have, the twenty two thousand, h one hundreds in aggregate represents three times more computation than was required to train GPT four according to the best guesses of the rumors online these days.
So it is a seismic amount of compute and it gives us an enormous advantage because we're really concerned with building the absolute cutting edge, like we really want to build the absolute best experiences in the world, so that when you get access to your personal AI PI, it's going to be aligned with your interests and on your team and increasingly be able to do useful things for you. It will book, you know, appointments for you, it will plan holidays, it will buy things for you and be
a scheduler. And everybody has been waiting for that moment when the real personal digital assistant arrives, and we think that PI, you know PI dot ai where where you can access it online, is really going to be that assistant.
Mastafa, you use words like building and I think about your past, your career, your time, at DeepMind Google. How important is it right now that you are basically moving from research to real world introduction of a tool. You know, a lot of people are calling to hit the brakes right on development. That seems to be the point of differentiation, moving from development of future generations and models, or indeed the research arm to having a product that businesses and consumers can use.
I mean, AI is now coming of age. I mean this is going to be the meta technology of our times. It is going to be the technology that enables everything else, just like electricity or steam powered the last huge industrial revolutions. And so that's very exciting for us because it's a very practical time. You know, we're doing applied research, We're getting things to work in production and at scale with
millions of users. And that's really the fun of it is making these things very very useful and seeing how they save time, improve performance, increase quality, and increasingly enable us to actually create completely new experiences that technology has never enabled before. I kind of think of this as a new sort of design material. It's a new clay that we can use to mold and create emergent, entirely personalized,
and completely adaptive experiences. Which are going to feel very unlike the kinds of static user interfaces that we've had of the past. I mean, today, a website is a website is a website. It's just static and two D and it stays the same. Tomorrow, your conversational AI is going to enable you to experience dynamic, real time generated personalized user interface and it will feel really magical compared to what we've had in the past and.
The stuff of what scares you in all of this.
I think what's amazing about this technology is that it is the ultimate force amplifier. Right wherever there is a desire to take actions in the world to generate new content, you know, people are now going to have access to a tool that makes that easier to plan and to create. And of course, you know that's going to lower the barrier to entry to create chaos, and some people, you know, with bad intentions will choose to you know, amplify the
disruption unfortunately. But I'm pretty confident that the vast majority of people are going to use these tools for incredible good and that where there are downsides, like for example, the spread of misinformation or the growth of counterfeit people which imitate you know, real humans. I think we're going to get control of that pretty quickly.
And the stuff that you're joining us from London, What are you doing in my old stumping ground, my hometown.
Well, this week coming up, we have a hackathon with our team. We relocate to a different city, you know, every month or so we get together and we work on a project. So you should expect some exciting new product features to be coming out in the next few week. It's just a great time to be building. So it's great to be here in London in the summer too.
Inflection Ai CEO Ma Stuffer Salum and I feel like I see you every week. But we're on a good trend. Thank you so much. All right, time for talking tech. First up, the Netherlands published new export controls that will restrict more ASML chip making machines from being sent to China.
This new Dutch regulation will force ASML to apply for shipping licenses to export DUV systems as early as September first, and one of Apple's biggest supplies, Foxconn, will invest about two hundred and forty six million dollars in two new projects in Kwang Nin, Vietnam. The plants FECV and FMMV FOXCN were awarded investment licenses and will begin operations in twenty twenty four and twenty twenty five.
Plus.
Airbnb is dismissing data in a viral that suggested revenue for property owners in some US cities was down nearly fifty percent. Airbnb spokesperson Sam Rendell said the data is not consistent with airbnbs and that the demand for short term rentals is alive and well. Joining us for more to talk about this, Bloomberg's Natalie Lung.
Natalie explain this one to me.
There was a viral tweet we're going to show it in just a moment that said basically, people that have Airbnb homes, they're not making any money.
Right.
So this viral tweet that came out around two days ago that showed had data from all the rooms which aggregates Airbnb and vrbo listings data showing in cities like Sevenville, Phoenix, Austin are seeing revenue per listing drop nearly fifty percent, And what's god people talking about this data is obviously the fixed, but also people were wondering like the accuracy and veracity of the data because there was an other data source, air DNA, which is also widely cited by
the hotel and short ton reto industry.
Their data shows for.
The same markets, the decline is more muted, so around in the single digits.
The biggest one was around nine percent.
Natalie very quickly Airbnb's response to.
This, Yes, they are saying this data is not consistent with what they're seeing. They reported a record revenue in verset Q and they're still seeing shorng demand for short tomentos.
All right, Bloomberg's Natalie Lung reporting there out of the East Coast.
Thank you so much.
Welcome back to Bloomberg Technology and lovel here in San Francisco. Let's turn to data intelligence platform Elation, recently named Data Governance Partner of the Year. But get this by both Snowflake and Data Bricks CEO Sachin Sanghani joins me here in San Francisco for more. Find this really interesting because Snowflake and Data Bricks, you could call them frenemies, you could call them rivals. They both pick you. That's an
interesting triangle. Tells me about the relationship with both companies.
And thank you for having me. It's great to be here. Both companies are quite interesting. They had their conferences this week, both at the same time, both at the same time, which may have been purposeful, may not. But both of them had twelve thousand attendees at the conference. So while they both operate in the same space, they also have quite distinct audiences that use them and leverage them and
quite indicative of the growth in data. If you think about ten years ago when Elation was founded, when data Bricks was roughly founded, with Snowflake was roughly found, did these are companies that had twenty five hundred people at the biggest data conferences and now you have almost ten times that amount. So both of them are indicative of the massive growth and data and we're excited to be a part of it and excited to rationalize all of this data in the ecosystem.
I reported recently that data Bricks is SQL producted passed one hundred million dollars in any lized revenue. That's an area they're trying to grow. Kind of puts them in an interesting territory with Snowflake. How do you work with both companies? What is the interplay between Elation and their both sort of that I mean everything from mL and AI through to cloud based enterprise is interesting.
So we describe Elation as a data intelligence platform.
What is that?
What does that exactly mean? Well, if you live inside of the standard enterprise, think about companies like Pfizer and Cisco and Virsion Australia, Nasdaq, all of whom are Elation customers. These are companies that have petabytes and petabytes of data strewn across data bricks, Snowflake, Amazon, Microsoft, Oracle, all of this legacy technology that it has existed since, you know, the last twenty years. And so what Elation does is it provides a map of your data so that any
person can find and understand and trust that data. And as a result of that, we have over five hundred customers, thirty five of Fortune one hundred use us. But the broad idea is that if you exist inside of one of these companies, you basically are existing. If you don't have Elation, you know, as somebody maybe who's trying to navigate the streets of Boston without a map, or you know, try to navigate the web without Google, it's just impossible to do, and we provide you with that capability.
The specific use case right now is generative AI and indistinction from AI more broadly, because you have to use your own data set to make a generative AI tool relevant to whatever it is you do. Where does elation come in in that process?
So you can't do trusted AI without having tru data and your own data and on your own data or even on third party data. So, if you think about all of these models, they operate on a garbage in, garbage out basis, and particularly in the realm of structured data, if you have a really highly well trained model operating off of very bad, poor data, what you're going to have is multiplicatively wrong answers. You're going to get consistently
bad outputs. And so the ability to be able to locate the right data sets, the ability to understand that the data that you're feeding this model is appropriate and well is a massive problem that every one of these companies has to deal with, and frankly that Snowflake in Data Bricks has to deal with in order to get their customers to adopt at scale.
The simple concept of the company elation is to help an organization it's users find manage trust the data that they're looking at. There's a lot of interest in your company, the transparency. You raised one hundred and twenty three million dollars in November. I think that's right, and Data Bricks is Drum did participate in that, so that's correct. You are their most trusted partner, but they also are one of your back is interesting. Valuation as well, one point
seven billion dollars. How do you grow your business from here?
We were, interestingly at that point in time in November, thirty percent up up when the rest of the market was seventy percent in.
Top line growth. Valuation got it.
So our prior around valuation was done in twenty twenty one, which was a close to the top of the market, not quite exactly the top of the market, but we were still fifty percent up when the rest of the market was seventy percent out, which is an indication to both the strength of the market but also the strength of the business in that last round. Snowflake was an
investor in our company. And why are these companies invested Because fundamentally, you can have all of the data in the world, but if you can't use it, if you can't understand it, if people aren't enabled with it, then
it's really quite valueless. And so from our perspective and I think from theirs, the real problem is enabled hundreds, if not thousands of people within the enterprise to actually leverage this stuff at scale, and the road has been up into the right in general, but there is a lot of variation in terms of the returns on these projects, and so being able to return more reliably by basically building skills within each of these companies, within many of
these companies, that's real trick, and that's what we try to help.
With Elation CEO Sachi and Sanghani here with us in San Francisco and Bloomberg Technology.
Thank you. Sum up and actually coming up, we'll talk.
To Data Breaks, investor Race Capital about AI some more, also the m and A landscape and what the VC world has to say about literally everything we've been talking about on the show, ed if Young Race Capital coming up next, Let's get a quick check on Uber shares where they're trading up one point six percent in the session.
Piece of news out overnight Parents, if you're listening, Uber is giving parents and caregivers the option to request a ride on the app with a car seat as part of a part and a shit with Nuna Baby which is a baby gear brand, but it's kind of a PSA.
If you're out.
There and you're a new A user and you got kids, well, they've been thinking about that.
This is Blomberg.
AI has been a technology and development for decades. A lot of tech actually, I think originates from gaming as a use case.
These large language models are very exciting and what they can do is they can act as an interface where you can finally talk to the computer in a way that you couldn't perform.
With John AI.
There is a new surface area, I would say in terms of both increasing productivity of workers, for example artists and gaming.
AI will move into industries that were or are underserved by SaaS.
AI is something where it can impact drug design, It can impact how we think about healthcare, how we allocate healthcare resources.
I think San Francisco inarticular with the AI boom, is really about cerebral value.
You'll walk around and literally, like how they talked about in the nineties, you'll see garage doors open and people on their computers and you'll literally see on the telephone polls flyers for AI happy hours, AI Hakathans.
The smartest people in the world are sitting in those cafes, you're having discussions not just about starting their companies, but also what is the cutting edge of what these AI models can do.
That was just some of our VC guests weighing in on AI and the rise of San Francisco is the epicenter of what's happening in AI. Let's move away from the Bay and stick with AI though, and check out other headlines in the world a venture capital.
Just take a look at climate tech.
It's been an investing bright spot since twenty twenty one reikian deals as other sectors stagnated, but the first half of twenty twenty three saw a forty percent decrease in climate venture funding that according to Climate Tech VC, growth and late stage startups saw the biggest declines. Union fifty four, an African startup backed by Tiger Global, is entering the race to developed super apps as investors look to tap
the continents increasingly tech savvy market. Called Chitchat, it offers secure messaging paired with dollar based virtual cards that it developed with MasterCard. The new app could debut in September and back to AI Intel leading a Series B financing round in the German AI startup alef Alpha, whose luminous language model competes with open ais Chat GPT. That's all
according to Handle's Blat, citing sources. Nvidia and SAP also participating in the more than one hundred million euro financing round. Right back here to the US as digging some more into the bench capital landscape and AI and bring in Edith Jung, partner at Race Capital.
That's a lot to take in, Edith.
But where's your head at right now when it comes to investing in AI?
I think you know, AI literally is happening everywhere, all at once. And this week or one of our portfolio companies, Data Brick acquired Mosaic mL for one point three billions. And obviously we're also really really into any infrastructure layer that is supporting the AI ecosystem.
Let's go ahead.
No, I'm sorry to interrupt you if I think we should stick with it and jump on this Data Bricks acquiring Mosaic pretty significant acquisition.
What did you make of it?
The rationale behind it, and what it's going to do to shake things up right now here in Silicon Valley in San Francisco.
Yeah, it's really exciting time to be Like, if you look at what Data Brick. Particularly in the last sixty days, they acquire three different companies a Kia which is focused on more on the data governance, and then also Rubercon which is two weeks ago that focus on data storage. So now having will say it MLO, it basically complete the story building their own l M. I think like the world the world is heading is in some sense,
I think enterprise AI is having an iPhone moment. Everybody want a piece of AI, but not just because you want to do AI doesn't mean that you will do it well. And I think a lot of the enterprise it's a little weary about feeding data to open the AI is just like a black box, right. The world
wants open source, the world wants to keep the propriety data. Hence, you know, data bricks comes in because it's really built on a parte Spark, which is an open source framework, and now you'll be able to basically build your own enterprise l M on your own data. So that's really
what the Data break is pushing. So at the end of the day, you know, we've been always been saying, you know, data is really the key goal mine and for us, the way that we look at in terms of our investment is who actually have access to a
propriety data. And it's not just about training a general personal AI because if you think about it, right, if I asked a question to CHATGBT on, you know, who is the best doctor My mom recently have a heart problem and she would rather talk to a doctor that have seen you know, thousands of similar patients with similar dcs versus just you know, I'm not quite sure where the data come from. So essentially that's what your data brains.
Is trying to do. So there's also the transactional part of this.
We had Ali Godzi, the CEO Data Breaks, on the show two weeks ago and he said, quote, when it comes to AI right now, you have to pay up, in other words, get your check book out valuations.
This is getting a little big.
You think about Inflection, we reported with the CEO and the show today one point three billion around at four billion proportionately.
What do you make of that?
Yeah, I really enjoyed your segment with the CEO. Inflection one point three billion dollar rates is exactly the same amount how much Ali have paid for Mosaic mL and but as you mentioned earlier in the show, that Inflection actually has access to the H one hundred and their partnership with Nvidia, which to me is super fascinating and in some sense, yes, there's a lot of hype, but yet I think there is like so much room and things going on that can be improved, not let alone.
Obviously everybody is saying that we're building on LLM, but we also need to think about data privacy. We need to think about how do we correct hallucination. We don't want to just come up with some random recommendation for which doctor to go to, because there's a lot more tuning need to be done well.
Edith on the point of Inflection, H one hundreds are everything in the AI story right now, the GPU compute power. Are you phoning up Ali at Data Bricks and saying what GPUs have you guys got access to you know down the road? How much of a concern is that for you as a bench capitalist.
I think you know Ali have previously explained before, which is when you're training as much smaller subset of data set. What Reinflection is really focusing on is literally building a personal LM. Right so there could be an ad at a GPT or either GPT.
But what data.
Bricks is focusing on is training a much more success smaller data set of data, enterprise data. So in that sense you don't really need sort of the the H one hundred to train. But absolutely Nvidia is on fire, being over a trillion dollars in market now and being able to secure the chipset, especially the H one hundred Order eight one hundred is super super important for not all LOM focused companies.
Edith Young, Race Capital General partner, is so good to catch up. Thank you for joining us out of New York time now for what's going viral and it's the number one trending on Google trends right now. In a six to three ruling, this US Supreme Court has stricken President Biden's plan to forgive student loans for some borrowers.
To get more context about this ruling and who is the most impacted, Bloomberg's Ryan Tige beckwith in Washington, and of course I will Street reporter Narlie Bassek out in New York bear with me headlines crossing the Bloomberg terminal. President Biden saying in a tweet, the High Court ruling on student loans is quote unthinkable. The Supreme Court striking down student debt relief is wrong. The fight is not
over on student loan relief. That is President Biden's response ryan based on the court decision.
Where do we stand right now?
This doesn't leave President Biden with a lot of options. There's a lot of smaller, sort of more targeted things that he can do for giving student loans to certain sort of groups like veterans or people who have become disabled or something like that. But he's not going to be able to do the kind of large scale program here like he was proposing. They pretty much ruled that out.
So I think you're going to see a push for these smaller things, and then you're going to see a renewed push in twenty twenty four as a campaign issue for Congress to take some kind of action on its own.
Shanali, we need to talk about the technology side of this story, in particular fintech. The market reaction was in SOFI volatility, and I think we had a hole at one point.
What is happening that.
Yeah, remember there's not a lot of lenders that are in the student loan environment here. In fact, the government itself is one of the largest banks when you think about it, because there's so much debt on the government's own balance sheet. In terms of private lenders, it's SOFI, which is really one of the biggest out there, and SOFI has initially built so much of their business model
around it. Ed this end of the student loan pause is poised to help SOFI, but remember, as students start to look to refinance, interest rates are much much higher. There are a lot of unknowns about what this moratorium pose it mean, and what it means now that many others forty million people may not anymore face this idea of forgiveness. What does it also mean for SOFI at large?
You've had SOFI anyways over the last couple of years really start to pivot as business model away from being so reliant on student loans and looking to other areas instead. So big question marks about the through loan business moving forward, as well as what this still large part of Sofi's business model means, but also how they continue to keep diversifying away from it and who fills the student loan gaps in between.
Ryan So much of the Bloomberg technology audience might be technology sector employees founders who are trying to make their world weigh in the world with student loans, and it makes me ask you the politics of this. This was really important for Biden's presidency.
Right, I mean, this is one of those things young people helped put him in the White House, and this is a top priority among a lot of young people. So he's going to be motivated to continue to push on this. His hands are tied unless he wins back the House and the Senate. It's possible that he could do something in a second term if he had both of those through budget reconciliation, which doesn't subject to the filibuster.
So there's some potential there that this could be an issue that he runs on and one that would motivate young people, which I think benefits And politically, it's clearly on demographic lines. Republicans of all come out against, you know, in favor of this Supreme Court ruling who are running for president, So it'll probably be a dividing line in the twenty twenty four election.
Shnali target.
Also moving to the downside, the economic impact here on the consumer is a big thing.
It's a huge thing.
Remember, student loans on average are between two hundred to three one hundred dollars a month ed. That is concert tickets, that is food, that is travel, that is retail. So of course you are going to see an impact here. Remember we've been in a moratorium, which is why we have that huge unknown here in terms of what that impact will be for so many borrowers to have to not only start repaying again, but also have to contend with the idea that much of this won't be forgiven.
Bloomberg's Ryan T.
Beckwith Shnali Basseck on the story, will continue to track.
That does it for this edition of Bloomberg Technology.
But catch me on a Twitter spaces in an hour's time, Apple three trillion mark germ, and this is Bloomberg Technology,