From Mahart where Innovation, Money and Power Collie in Silicon Vallet NBN.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.
I'm Caroline Heine bluemgg's world headquarters in New York, and I'm Ed Ludlow in San Francisco.
This is Bloomberg Technology coming up.
We'll break down what we can expect from this cyber Monday shopping. CEO of a leading data platform, Clavier, is.
With us and Elon Musk visits Israel after facing backlash for amplifying anti Semitic content on X. Will have the takeaways from his trip. After meeting with Israeli Prime Minister Benjamin and Yahoo.
Class TikTok parent bike Dance plans to cut hundreds of jobs in Gaining.
That's as it winds down.
That focus will break down when it means in terms of the border context. And here in the now, Ed, let's just talk a little bit about how far we've come in terms of the tech stock rally and well who's been suffering on the other side of it. Notably, dividend ETF flows there near a record low. Joining us to discuss all of these pushes and pulls Eminie Graffair.
It's great to have you with us. And one of the most red stories today.
Is yours about well, who's done badly on the back of the tech trade, but just focusing on the tech trade and how far the rally has gone. We know actually that there's some writing out today that given the amount of buybacks, given how much Apple just for example, it has to fly back in terms of shares, we could still see this rally continue.
Yeah, I mean a lot of.
People are saying that there's still dry powder on the sidelines, and of course the seasonality really does fode well for the rally to continue. We know that big tech has really driven most of the gain. So I think when you look at this dividend story, it's just another example of just how much the rally in the stock market this year has been basically taken over by the gains in megacap technology.
Stocks, you know, And part of the story is like about missing the boat I was crunching the numb is looking at the S and P five hundred year today, information technology or Telcom's subsect to year today, fifty percent gains in tech basically, but a lot of the strategies that you're writing about. They don't touch tech, so they kind of miss out.
Yeah, that's right, Ed.
I found the port function on the Bloomberg terminal very high school in writing this story, because if you run that on a number of these dividend ETFs. You take a look at SDY, which is from State Street, they don't really have a large waiting to information technology. They have about a quarter of their waiting to consumer staples, utility, healthcare sectors that have declined this year and really haven't benefited from that AI euphoria that has powered the top
of the S and P five hundred. Then you take a look at VIG that's Vanguard's dividend appreciation ETF, and port shows that they have about a twenty five percent weight for information technology and that's one of the best performing dividend ETFs up nine point six percent, So again underperforming the SMP and the Nasdaq, but at least that large concentration in information technology did help that ETA.
What's interesting is it coolest this week we don't just have macro things been looking out for, but they're all they do singcrastic earnings, just being salesforce. For example, all we like to still see AI be the zuberant fols for those of the companies.
I think so, Caroline.
I mean, I think these companies are going to continue to juice out that theme at least for the rest of the year.
It is interesting when we.
Look at, you know, all of these sectors, are we going to see just like how the Internet at first kind of dominated tech and then it expanded and now pretty much every company uses this technology. Are we going to see that expand to other companies. Earlier in the year, we had like companies like Kroger kind of mentioning AI
that seemed to fizzle out a little bit. But we'll have to see if these companies actually do manage to capture this technology that has been so beneficial for the megacaps, the.
Microsofts, Bloomberg's Emily of Graffeo with pretty much the top story across all Bloomberg platforms this Monday, thank you very much. Meanwhile, it is a big day to day for many big tech companies in the e commerce business with cyber Monday in full swing. Joining us to discuss is Clavier CEO Andrew Bierlecki and Klavier, a leading data platform but in retail and the e commerce space. You went public earlier
this year, and we'll get to that. There seems to be a lot of upgraded expectations for Cyber Monday based on how strong Black Friday was.
Are you seeing that in your data as well?
Yeah, Well, first off, thanks for having us. It's a super exciting week. It's the biggest week of the year for many of our customers. You know, we power smarter digital relationships, help businesses understand who their customers are and then communicate with them, build great experiences across email, SMS, and mobile. So it's a it's a great period for businesses to grow and we're seeing you know, as usual,
Claudio was powering that on Black Friday. You know, we had more than three hundred million messages sent during our peak hour. And part of the way that we make the messaging and the experiences between businesses better is using artificial intelligence. Our product Recommendation engine generate over a billion recommendations that were embedded in those emails, and most critically,
that resulted in real growth to these businesses. You know, in the peak hour on Black Friday, Clavial businesses generate over fifty million dollars in sales directly a tribunal to the message they were saying through Clavier and so interestingly, we found that the trend was a lot of people were sending messages earlier in the day, but the actual best conversion time was towards the middle. So we saw the most conversions, most customers buying between eleven and noon on Friday.
So, Andrew, what is your expectation the Clavio expectation for Monday? Then right, we go off Adobe Analytics data as a proxy. They said nine point eight billion spent online Friday. Their expectation is twelve point four billion this Monday, Cyber Monday being the bigger window. Do you see a bigger window activity for you guys too.
Yeah, Well, from the businesses that I've talked to and just you know, looking at our numbers, Black Friday was great. We're only part of the way through Cyber Monday, so we'll wait and see what happens the rest of the day. But one of the big trends that we've seen playing
out is consumers are buying from brands they love. I've talked to a number of retailers that actually sold out on Friday, exceeded their expectations by marketing back to the businesses or to the consumers that they already have relationships with. So one of the big trends that we're really focused on is a lot of businesses in the past, you know, relied on advertising and marketplaces to drive demands. What we're finding is a lot of modern digital businesses, digital brands,
they're going directs. They're building direct connections to consumers, and they're reaching them through email, through text messaging. They're using personalization, artificial intelligence, and they're measuring those results and that's driving sales. And that's a lot of what's going to power them through not just Black Friday and Souber Monday, but through this entire holiday season.
Andrew, I almost think about my own sms is and I think almost one in every three is from a business of some sort.
How many are opting.
Out, How many people and consumers are pushing back on this sort of way of marketing.
Yeah, Well, what we find is when you send really undirected, just kind of one size fits all messaging, especially in a channel like textoaging. You know, my text messages are pretty private, like I only have let a select number of brands into them. If you send one size fits all messaging, that doesn't work, folks opt out. But when you personalize those recommendations, you know, based on the products
people have bought. Or what we often find is a lot of businesses when they're launching new products, they're first they're pre releasing that to folks that are subscribed to text messages. Consumers love that because they find out right away before things sell out, and that kind of marketing works really well.
The global perspective here, I mean, I would say many might be surprised that there's such resilient consumer demand over the last weekend or so. As with the mac CEO, and he was saying, look, on Friday, it was much more about jewelry, about Kashmir, about gifting. But people aren't at the moment helping themselves. They're not particularly in a spirit of spending enthusiastically. No matter where are we seeing the sort of resilient consumer no matter where you are.
Is it certain types of brands and certain types of geographies.
Yeah, it's a great question. So we're seeing it across categories. And the other thing that we've noticed is, you know, Black Friday, Cyber Monday, there historically we're more we think of those as US canti centric holidays, we're seeing those really expand globally. You know, we saw activity pick up across the Clavial platform starting you know, really early, you know,
even in Asia. So one of the trends is I think that this is becoming more of a global holiday and less just domestically centered.
There's been a lot of activity and some of the Chinese based platform's tea machine like really heavy discounting. Is that a data set or a marketplace that you track.
So we have a lot we have businesses around the world, but specifically related to discounting. Wait and see what the numbers show us.
But again I think what.
Would because our.
Thesis is all about businesses going to consumers that already have they already have a relationship with, I think that's that helps moderate some of that discounting behavior. These are customers that have maybe bought in the past or we're browsing, you know, they have some affiliation with this business and now they're ready to pull the trigger. So that's that's I think the shift in marketing that we're really focused on is how do you how do you take existing
relationships and make more out of those. And one of the nice parts is I think that offset some of the discounting that's required.
I'm interested.
Of course, you're in this economic environment where actually, well, thus father numbers bearing pretty good over the last few days, of course, have recently gone public. You are trying to build this narrative to a new shareholder base of what it is that you do and ultimately how the pennant you are on certain companies and the macro environment. You were all about AI when it came to a listing.
How is it being a publicly traded company. How are you finding the narrative going for you when the pushes and the polls.
Well, honestly, we've got a mentality of just focus on helping businesses grow. You know, one of the one of the big trends that we love talking about is it's not just this move from commerce happening, you know, from brick and mortar to now everywhere online on your phone. But there's another big macro trend, and that's business is saying, hey, I'm going to drive demand to my store, whether it's
you know, a digital store or a physical store. I'm going to drive demand not just through traditional channels through advertising through marketplaces, but I'm also going to do that by building direct relationships with consumers, and the technology to do that has gotten a lot better, and the personalization driven by artificial intelligence has gotten a lot better. So I expect over the coming years the next decade, we
think is a long term trend. More and more brands are focused on how do they build up their database of direct connections with consumers that will drive sales, that will drive engagement, and if we keep executing on that, we'll do right by our customers and our shareholders.
Thank you very much for joining us on the back of all that, Andrew Berlecki. Of course, the claviy O CEO joining us one is a pretty thick and fast cyber Monday. Meanwhile, coming up, we're going to talk about Elon Musk. He's currently in Israel. We'll have the latest on his visit with the meetings with Israeli Prime Minister Benjamin natin Yahu and other Israeli lawmakers. That's next, But before we head to the break, we just want to turn our attention. Of course, the backlash against Eenl Musk.
It is continuing following well. It seems to have been an amplification of anti Semitic content on X. Just a few weeks ago, Musk in the UK Prime Minister whis Sunak. They shared a stage at the UKAI Safety Summit, and now Sunak has just weighed in on the issue in an interview with Bloomberg last night.
Take a listen.
I condemn anti semitism in all its forms. It doesn't matter whether you're Elon Musk or you're someone on the street who's shouting abuse at someone who happens to be walking past you. That's wrong in all its forms. Anti Semitism in all it's is completely and utterly wrong.
Some pictures there, as you see a Venomsk earlier in conversation with Prime Minister avengerre in Netanyahu in Israel. He in fact also took to his own social media platform X to continue that conversation with Netanyahu. And we just want to sort of understand the context here and indeed, well whether or not it's basically helping the business of X at this moment, given the backlash about his seeming well signing on or at least amplification of some anti Semitic views across his platform.
Joining us now is Max traffickin and.
Max, this does ultimately feel like a bit of a pr exercise to go to Israel.
Is that how it's been interpreted?
Yeah? Absolutely.
I mean Elon Musk is very much you know, of a piece with other He's almost like a world leader, right, he like in the same way that like a politician might fly to a war zone in order to like,
you know, combat a crisis at home. We have X you know, the platform formerly known as Twitter, dealing with a huge advertiser pause, you know, tens of millions of dollars in potential lost revenue, and we have Elon Musk trying to combat these accusations of anti Semitism, you know, by showing up in Israel and doing an event with Prime Minister and Yahoo.
I think what's interesting about this is that Musk has been tied, whether of his own volition or not, to the israel A mass war since the outset, right, Max, because he does have a tendency to weigh in on whatever the global issue of the day is. There are parallels with the war in Ukraine, for example. What has Musk's position been in all of this to this point or at varied points.
Musk's position on the war in Israel and Gaza has been very, very squishy, and as you said, it's kind of like which is trying to put himself in the middle of it and when possible, using it to advance his own business goals. We actually had a meeting, you know, in the US, with Musk and Netnyaho amid an earlier kind of flap over anti Semitism.
Musk made a bunch of comments.
I think he said he was basically Jewish, or you know, he'd gone to a Hebrew preschool. He's tried all sorts of tactics to sort of say that he's not anti Semitic, short of actually apologizing for the comments that Caroline alluded to just now.
Max.
A technology story at the heart of this is Starlink. The Israeli Communication Ministry came out earlier and said that a understanding principle is out. We're looking at pictures of the Starlink map on its website and the darker blue shades are the coming soon. In other words, starlink not yet operational in Israel or the Gaza strip. But what do we know about those negotiations.
I mean, this is part of a larger effort by Starlink, you know, which is like the communications armor of space X to find a business. You know, they launched this thing. It costs a lot of money. It has a consumer business, but I think Musk and others have realized that it also has you know, bigger say, defense implications. This could be something that could be could be sold to governments
as a possible communications tool. So I think it's about, you know, trying to create a business here with an eye you know, to an eventual IPO in the future.
And therein lies basically the breadth of what you and so many colleagues are trying to do on this podcast of elong Inc. It's basically he has so many different businesses.
Ultimately a lot of what perhaps.
He's doing personally on X has ramifications on.
A lot of these businesses.
How has stalink been something that people have been nervous about? I mean and reference that this has sort of been played out a little bit with Ukraine.
Yeah, well, I mean SpaceX in general.
Elon Musk's aerospace investments have been kind of a bright spot over the last year or so, amid you know, questions about demand for for Tesla cars, amid you know, his craziness on his personal social media feed.
But of course it started to bleed over.
We had this kind of flap over Ukraine where the Ukrainians were accusing Elon Musk of like shutting off access, and of course you know, Musk is getting sucked into this like larger geopolitical issue. On the other hand, SpaceX super successful as a defense contractor. It kind of makes sense to find this as a market for starlink.
So two things. Musk has stated that he is not antisemitic right following that post that media reports that he is a bogus. But it was interesting that Prime Minister Benjaminesssenia who didn't ask him about it on the twenty minutes spaces either Bloomberg's match Chafkin breaking down what is an ongoing situation with Musk in Israel. Now, speaking of content, Merion Webster chose authentic as its word of the Year, highlighting the spread of misinformation on platforms like Elon Musk
X and the rise of AI. Merion Webster's editor at large, Peter Soukolewski said in a statement quote, the line between real and fake has become increasingly blurred as a result in social media and marketing authentic has become the gold standard for building trust.
I'm very happy to see Sam back.
He's uniquely positioned to for Stuard Chip of this very imprtant company.
It's much more than just a company.
It is benefit of AI to humanity in a much larger way over the next few decades.
And I think we've restored the patch.
That was Coastal Adventures found a Vinode Coastler there reacting to the news of Sam Altman's return to open AI. Coast Adventures was the first venture firm to back open A. Let's get into it all the open AI drama. What we know the latest blombost Rachel mets back with me
on set. So I kind of guess the big unknown is this tender off aware employees can sell shares to investor is But what you and I kind of discussed on Friday, which seems like a world ago, is that like a lot of these staff were willing to put life changing amounts of money on the line to back Sam Outman.
Yeah.
I mean that was part of what people were saying when they were signing that letter, saying, if you don't bring Sam Oltman back to the company, after he was ousted, we may leave and go to Microsoft, And part of what they were saying sort of implicitly there is we may be leaving behind a life changing amount of money as far as this tender offer is concerned.
That hasn't yet been completed.
That hasn't yet been completed, nor has an interim board to a permanent board. Does that still in negotiations? And ultimately is it going to get more diverse? Those are really good questions right now. We're still trying to figure out a little bit of that.
I have been reaching out to people, and I know other people on our team have also been doing likewise. There are still like a few questions here about how many people are going to be on the board, what is the composition ultimately going to be, Is Microsoft going to have a seat on the board. Things like that, as far as I can tell, are being flushed out right now, and I'm hoping to know very very soon.
Actually, after we had the hot emoji salute thing on X, there was another emoji salute which was a ship. So something actually happened on open Aye on the product side while we were all trying to work out what was going on behind the scenes.
What was it?
Are you you're talking about Q?
Are you talking about Q?
Okay?
I just wanted to make sure it's it's been five or six days that turned into about three weeks.
They basically I released this new Voice products. Is that with the the like we're still shipping things and they're like playing with the ship?
Yes, yes, yes, okay, Wait so you're sorry you're talking about bringing Voice on chatt to all customers. Yeah, So I asked about that and I was told that that was that was something that was intended to be shipped out in advance. So this has it had nothing to do with the ousting of sim Molmon, but the timing is certainly nice.
Wow.
We'll see how back they are now and whether the products keep on rolling. Rachel Metz, I mean, what a long few days it has been. It's great to have her all over the coverage.
Welcome back to Bloomberg Technology. Amid Ludlow in San Francisco.
And Caroline hid in New York is about what twelve thirty in New York time, nine thirty over.
There with you.
Let's check on these markets. Halfway through the trading day in the US, and I'm looking at really managing to still hold on to two tens of percent gain on the Nasdaq one hundred. There has been caution around some wh of the macro data coming from China, for example, maybe just a bit of a cool well down in overall enthusiasm around the Magnificent seven since we've had such a run up in those stocks. Nevertheless, still a few of them managed to dominate the leadership boards.
When it comes to the nas that one hundred five year yields a Shadne line on.
Because we've got yet more auctions in the debt market today five year crucial Actually yields are coming down ahead of that sale. I'm looking at what's happening in the world of crypto. We're just off about a little bit thirty seven thousand. Those still where we're trading, even though we've got a weak US dollar. Many feeling the course of Federal Reserve is done in terms of its hiking cycle.
Move on and have a look at what's.
Happening in the individual names though, because as you pointed out a little bit earlier, it is a course. Cyber Monday, Black Friday through Cyber mona Monday seem to be better than many had anticipated. A resilient consumer that helps the course well, the likes of Shopify, which is helping some of those companies that want to access that consumer actually sell and they're having a record set of numbers and of course that increases their volumes. Were seeing up five
percent on the trading day for Shopify. Amazon of course is going to be benefiting from some of the Cyber Monday deals, but also interesting really relationship building going on between Salesforce and indeed Amazon Web Services at the moment
announcing that expansion of their partnership. The move like deepening the product integration across data and AI and for the first time we'll offer select Salesforce products on the AWS marketplace, so really making ADBs even more integral across the board. So a bit of a tie up there, and Salesforce doing well ahead of its earnings as well.
Ed.
Yeah, and it is interesting to see Black Friday Cyber Monday move the needle on space stocks. We haven't seen that in a little while. Let's turn to the shopping that is taking place over this holiday weekend. According to Adobe Analytics, US shoppers will spend up to twelve point four billion dollars online during today's Cyber Monday event that's based on stronger than expecting spending on Black Friday just gone,
and the popularity of buying now pay later features. Joining us now is Robgarth, VP and General Manager of Retail at Salesforce, and so Salesforce has its own parallel data tracking very similar to Adobe Analytics. You guys are also updating and upgrading what you expect this Cyber Monday based on the strength of Black Friday.
Yeah, that's right, and we are Salesforce aggregate signals from billions and billions to the shoppers across our platform, so it gives us a bird side view of what's happening in the industry, and we're feeling really positive. We saw great results in Black Friday of nine percent in the US, totaling sixteen point four billion dollars and that's really rivaling Cyber Monday as the two biggest digital days. So yeah, we're expecting strong to digit growth and it's really correlated
to discounts. Consumers are seeking value, they're being diligent, and with the increase of discount rates, we're seeing the digital volume sore.
That's really interesting, isn't it roll, Because I mean, you're a man with twenty five years not to date you, but about twenty five years and experience across retail in all of its guys is and many would be like, oh, yay, numbers are up, But in the last few years maybe it's felt more the inflation number has been why we've seen numbers up. But now you're saying it's actually volume two.
Yeah, that's a really good distinction. Because we saw this soaring happening in the digital surge around the pandemic, why we couldn't go in the physical store, So that created a whole new baseline. So the last eight quarters or so, much of the growth was from inflation, not increased consumer demand, and that's what we saw going into the holiday. But now we're actually seeing increase orders. We're seeing increased consumers demand. Now they are seeking discounts, but they're buying more.
Finally, and is that sustainable? We know that this is almost seasonal. Have this bulk buying that happens in this weekend, then it all calls off for about ten days and then suddenly everyone gets to act together just before.
The next round of holidays.
Is that sort of consumer resilience worldwide going to be something we see in the next bountl shopping.
Yeah.
I've been talking to hundreds of retail executives worldwide for the last couple months leading into the holiday. Nobody had an overly bullish forecast for this holiday. They're hoping to get out of it, create a nice foundation with their inventory levels, with their margin. But what we're seeing, what we're hearing is a sense of growth. Retail executives are really positive. They're feeling good about the resiliency of the consumers.
Now we'll shift by verticals. There are some stronger ones than others, but they're feeling good about They're really leaning into the data they understand about their consumers, leveraging AI to build those personal relationships with those consumers because it is about retention at this point, it's about increasing margin.
And they're feeling like especially with the surprising results in Black Friday and what we're expecting during Cyber Monday, coming out of the year and feeling really good looking into the next fiscal year.
The consumer electronics market is really interesting here because you guys are talking about really big numbers on the overall spend and electronics have been really popular. But electronics have also been some of the most heavily discounted. You know, just explain that the causal link between the discount and then the pocket buying of those electronic items like TVs and consoles for example.
Yeah, there is a.
Direct correlation between discounts and buying. There's been a lot of narrative about pulling the holiday earlier in the season, but the reality is it really kicked in during Cyber Week where retailers stepped up. And what happens each year at is this idea of the game of discount chicken, and consumers always win. The only year they didn't was in twenty twenty one where we had a shortage of products.
Remember that containers were stuck in the port of La couldn't get into the domestic supply chain, so retailers didn't have to discount. But they do again, and they've stepped up. We're seeing discount levels on average at thirty percent across the board. Consumer electronics are slightly higher as they normally are, but we're also seeing it in health and beauty. We're seeing it in active apparel, We're seeing it in also footwear.
Footwear seems to be a big category both for discounts and for purchases online this holiday season.
Well go VP and General manager of Retail at Salesforce, really want to thank you great conversation and we want to stick with sort of the theme of e commerce and shopping because Entropy is a verification company uses AI technology to authenticate luxury goods in particular. In fact, it's recently partner with TikTok shop to verify goods sold on
the platform. We want to be now welcoming the founder of the CEO of Entropy in is videos, Trinny Vessan and videos fascinating way in which we're seeing people now buying direct from their social media platforms and wanting to have that trust element.
You're using answerch intelligence.
Just to make sure what decades and you know of hundreds and hundreds of these goods, is that you're able to analyze.
You can then and the click of a switch, be able to analyze the product that you're buying.
Right, that's exactly right.
We've been at this for years and our goals to be a trustworthy standard and we find this to be a massive need, especially in today's era of live, live commerce and social commerce, where there's a lot of influencer based marketing and influencer based sales. And one of the key questions that both TikTok and ourselves wanted to answer is what are the right trust signals that we can send to enable shoppers to have confidence in what they buy.
And so we enable this service which is on demand, and the idea is to take a few images of different items that are in front of you, ideally if you're a seller of these products, and the verification happens on the cloud. It's all based on AI algorithms that understand the minutia between real and fake product, and the output of a really speaking is a certificate, and the key aspect of this is that certificate is verifiable. It
is backed by a financial guarantee. And to me, it feels like TikTok is ahead of the curve in understanding that this trust is absolutely necessary when you don't know who you're buying from or what exactly you find video.
If we were just showing pictures of what the experience is like from the consumer's perspective, let's go deeper explain the technology, how the underlying technology works.
Sure, so when we started this.
Certification platform, the idea was that there's got to be some differences between real and fake products, especially in an era where the genuine manufacturer of these products have vertically integrated all the way from raw material sourcing up to retail and selling that product. So the question was is there a different standard of production and manufacturing between real products and fake products?
And we manage to answer that using AI.
So we built algorithms that identified that fairly confidently identify or accurately identified these differences, and then we scale that by just gathering more and more data. So today we have tens of millions of unique items in the database, both real and fake product. We source fake product ourselves, unfortunately,
from manufacturers from all over the world. And this benefits in a sort of a community policing way, right because we collect data from the community on real and fake product and then we also disburst the benefits of that using the AI service.
But just how do you monetize that process? How do you make money through the app?
It's a software as a service platform and customers pay a plat fee for item, and we also back that with a financial guarantee. Because when we started, the question was always around why would you trust AI? Why would you trust a machine. So we wanted to basically force ourselves to be a good enough and be trustworthy enough, so we back every single item with a financial guarantee, even though we aren't part of the transaction. And I think that has led to one a large distribution of.
Customer.
Basically have customers in about eighty different countries, from big brands all the way to tiny little pawn shops anywhere in the world. This benefits consumers ultimately.
What's the hardest thing to identify? To verify?
I mean the it has gotten harder across all brands because counterfeiters also seem to have a feedback loop where they actually work with.
Consumers saying, tell us what we can do better.
Yeah, it is a weird upside down world that we live in where people have also made it a little more socially acceptable to buy kind of fits. But I think that is also because of the quality of counterfeits have gotten better. But what is important to understand is they cause. Counterfeits seem like a victim's crime, but they cause many hundreds of billions of dollars worth of losses for everybody involved, from the manufacturer all the way down
to consumers. We have tested products where one hundred percent of the samples we tested had lead and cadmium paint on them.
So it's not a victim of crime. You as a consumer are the victims.
So you need to know what you're buying and make sure it's verified and authenticated and you have a certificate with it.
Video cineressan Entropy founder and CEO, thank you so much for joining us here on the show. Now, coming up on Bloomberg Technology, we're going to discuss the fate of China's gaming ecosystem as byt Dance plans to cut hundreds of jobs in its gaming division. That conversation coming up next. This is Bloomberg Technology. Okay, time for talking tech. First up, Chinese President Jijiping will visit Shanghai for the first time
since its COVID lockdown. According to local media, he'll visit the Shanghai Futures Exchange and several tech giants operating in the megacity on Tuesday to try and boost a waning private sector sentiment and sticking with China, Ali Baba has shutted its quantum computing research lab, assigned that the Chinese e commerce and cloud operator is considering more cutbacks to
bulk up the bottom line. The lab's closure will result in the loss of just thirty staff plus Ali Barba co founder Jack Mar has a new venture, hang jaw Mar's Kitchen Food, which he set up last week with an initial registered capital of ten million U one that's one point four million US dollars. The business involves the sale of package agricultural products. According to information from China's National Enterprise Credit Information Publicity System.
CARCT, let's stick on China in particular, let's talk about byte Dance because of TikTok that we know here, but it's also planned to cut hundreds of jobs in Gaining and wind down at Shope's brand Newverse in a major withdrawal from the sector, according to sources, now a closure that marks bike dancers biggest roctory from old booming gaming industry dominated a course by Tencent, and it's smaller faux
Netti's for more already. Please be welcome, Lisa cosmas Henson, PRESIDENTCU of NICO Partners and Market Research and Consulting, from covering the Asia games market in particular and its consumers. You all be perfect voice Lisa, and ultimately, was this a game of market share, were they unable to take on the giant of ten Cent.
Ultimately, it may have been that, but I don't think that the games industry has ever been Bite dance primary focus. You know, TikTok and Doen, as it's known in China are just huge forces to be reckoned with around the world, and Byte Dance entered the game space with New Verse several years ago, but it really doesn't have a strong
percentage of their global revenues in any given year. They have some flagship brands that they acquired, such as Mouton's mobile legends Bang Bang, but that's really well known throughout South Stasia hasn't even launched yet in China. This could be just at the five year mark they're looking at what their five year plan might have been and saying, maybe we need to restructure a bit.
It's good to set the scene because like Tencent is the giant, not just in China, is the gaming giant globally. And even if by Dance kind of pulls back from the content title side, TikTok is such an inn Every time I'm on TikTok, there is some video games related content in there. Do you feel like that's kind of the secret weapon that byite Dance has to make money in gaming.
Definitely, I think that TikTok reaches so many eyeballs around the world, and that a lot of those eyeballs see those ads and the user acquisition techniques that bike Dance has for game published globally, and that even if byte Dance completely shutters nuvers, which is still not even confirmed, we should.
Say clearly that they will still.
Benefit from the games industry globally because they will be part of the machine that helps acquire users for publishers everywhere.
Lisa, the big regulatory crackdown on gaming in China.
Was very much.
And a socialist mantra around what society is exposed to Does that regulatory risk remain in China if you're a video games maker.
The regulatory landscape in China has always been in the twenty years I've covered that market and will always be the number one hurdle to a known entity for game companies anywhere, even if they're domestic and if they're international, certainly to be able to launch games and then have success in that market. But I think that most of the regulatory changes are behind us now and that people have some stronger footing to move forward.
I think that as we.
Look at regulations in China, as with all markets around the world, companies need to respect the laws of that country that.
They're trying to enter.
And then you know, there's still huge amounts of money to be made in the Chinese games market any given year. Leaven this year, it's almost fifty billion dollars in revenue in China alone, and so I think that that's a big part of the global market and there will be benefit there for all companies.
And that's why we saw some pretty high profile acquisitions.
I mean, notably by Dance made One itself.
Well back in twenty twenty one, I think it was it spledged four billion dollars in buying up Shanghai mont On Technology. Bloomberg's reported that they're likely to spin off sell that at least. Is there a market to be selling into this environment at the moment? Are gaming studios very valuable or less so than prior to the regulatory crackdown?
Well, I think that there's a lot of internationalization of Chinese companies to the rest of the world in terms of murders, acquisition or selloffs or more and if Byte Dance were to sell off Moontan, then that game, their game Mobile Lank Legends Bang Bang is very popular throughout the world, and I think that they would have a buyer waiting for it. There are rumors that they would sell off Moontan.
Again, I don't.
Think that's by Dance's mainstay business. And there has been a ripe appetite for acquisitions, particularly out of the Middle East, such as in Saudi Arabia, with the Public Investment Fund or Savvy Games purchasing recently scopely and already dedicating thirty eight billion dollars to investments of any kind of company or studio to be able to build Saudi Arabia's games industry, you know, probably with an eye on becoming what China
has become. So it's not surprising that there would be acquisition around the world and that Mouton would be one of the brands that might be something.
That people will be interested in.
I was a bit surprised that Bite Dance might want to sell it off because it is a well known brand in that game Mobile Legends Bang Bang is one of the biggest mobile esports titles around and they're about to launch in China. So why they would sell that off, I'm not sure, and I'm not sure that they will. It really depends what the extent of the restructuring of New Verse really is.
Lisa Costmas Hansen, President and CEO of Nico Partners, thank you so much for joining us wearables powered by artificial intelligence and generating some buzz this holiday shopping season and one startups. Aipin is at the heart of the conversations. I want to bring in bloombergs Ustin car who's writing about it in the Tech Daily. We had the Humane CEO, bethni Bon on the show the other day. They're not the only game in town. Everyone is now all about hand motion talk us through it.
Yeah, So I think everyone's trying to figure out in this sort of new era of digital interact what's the next step beyond a keyboard, beyond a mouse, be on a touch screen. And with Humane their AI can they're using sort of a laser beam from an AI lapel pin beams up onto your hand and you sort of interact with it by motioning, clicking with your fingers and thumb and Apple meta. Everyone's following suit with trying to figure out what gestures, what interactions are going to work
more quickly than actually touching buttons in person? And I think, you know, it remains to be seen whether this technology will be taking off. But for decades people have been really thinking about, Yeah, what's this new interaction model, what's this future of design.
When it comes to virtual.
Reality, And it's not always work these sorts of gestures.
Just take Google's Nest Hub for example.
Yeah, I mean, if you have a Google Nestthub, the sort of tabletop tablet right now, you can go interact with it using your hands to stop an alarm or press play on something. You can sort of push torn to screen. It's sort of like shoving a ghost. It's a little weird, a little unnatural. You might find using your voice is easier. A lot of different companies, Yeah, a lot of different companies are using different gestures to you know, clenching your fists to quit something. They're using
computer vision to read how your hands are interacting. Or the Apple Watch even you can turn it on an accessibility mode in order to play a song or skip an alarm. Stop things have sort of an action button just with the click of your index finger and thumb so, you know, I think it depends on whether this technology is actually going to be useful again. Right now, it's faster, sometimes.
You just click. We're so used to it.
But the technology is coming in a lot of big name tech brands or really experiment to get Microsoft has been doing it since the twenty tens with their Microsoft Connect playing sort of video games. But it's been difficult to interact with some of these systems, but they're getting.
A lot better.
Shoving a ghost.
That's a beautiful analogy to be visualizing with. Thank you, Bluemeg's Austin car appreciate it. Meanwhile, that does it for this edition of Blue Meg Technology.
Yeah, a big thank you to all of you listening to the podcast, Apple, Spotify, and the Bloomberg platforms from SF in New York. This is Inbog Technology
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