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From Mahard where Innovation of Money and Power Collie in Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.
Live from New York. This is Boomberg Technology coming up. Broadcom becomes the new Nvidia, as the latter falls further into correction territory. We'll discuss why plus TikTok CEO pays a visit to President Elect Donald Trump, what that means for the apps potential band, and a conversation with Senator Amy Cloversha on how to combat the rise of AI generated deep fake material online. But first I check in
on these markets which come down from record highs. We digest the retail sales data that shows the US economy remains resilient as we look ahead to the FED meeting tomorrow. We're just on ten to hooks. But look, we date about a five ten percent dip lower on the NAZAQ one hundred after it has been record high after record high.
Go into some of the individual movers. It has been chip stocks that have been dragging US lower somewhat again coming down from a significant run for Broadcon, for example, we're down more than five percent, but boy has it been on a big rally, up thirty eight percent in the previous two sessions in video, though off by two point two percent, we are further into correction territory. That means it's more than ten percent off of its previous high that was met in early November. And I'm looking
at arm as somewhere in Delaware. Arm takes on its biggest client and indeed partner Qualcom. Once again. We got these two key influential chip designers and makes going head to head in an IP battle that has border rammifications. We dig into it. The Bloomberg's Ian King, the chip Master is here, and we've got a lot to talk
about when it comes to chips. Let's just focus on in video to start with, because is there any real fundamental reason that we're suddenly getting in to a technical correction here?
Nothing that you've seen any headlines on or seen any reporting on. As you remember, Carolyn, they've said we're sold out. Basically, their innings are essentially a product of how much they can get from their suppliers right now. So nothing fundamentally that would give anybody any pause. But obviously, as you pointed out a huge amount of money that has been poured into that stock.
It's not more than one hundred percent, still one hundred and sixty percent over the course of the year. We then flip to maybe a wanna be in video and the making broad Coom really signaled the total addressable market here for its designs within data centers, and the crowd went wild. Can you focus in on broad Coom and maybe a bit of profit taking on the day, But what do they have to do to make this a reality?
Yeah?
I mean they have to work really hard. I mean what hot Tan gave wasn't a sales target, right, we need to be careful about that kind of As much as ninety billion that he was talking about was an addressable market for his type of chips, and that's by
twenty twenty seven. So what he was saying is that we have line of sight to a huge increase in what we do, But that pales in comparison to in video, which is going to be one hundred and twenty billion in data center sales alone this year according to analysts.
And when it comes to just enticing different kind of investors on board, I mean many were basically playing catch up to in video for the last two years. Is there a slight fomo trade here going on? Is that sort of what Hocktwan has to deal with, is that everyone's looking for the next in video.
Yeah, I mean that's absolutely part of it, and part of it might be the world if you think about it. Broadcoms making chips, it's designing chips for the Googles and the Microsoft's and companies like this who are basically designing their own chips so that they don't have to buy as much from InVideo. So there might be a kind of a switch trade here. But bear in mind that everybody who's been asked about this, mostly Hogtan most recently, has said, look, there's plenty in for everybody. This is
a massive growth opportunity. Nobody's really taking anything away from anybody.
Very briefly, qualcom arm how big is this.
It's been sort of ignored. They need to settle, according to investors, both of them need each other. This is something that is very strange that they're on this collision course. Our analysis says they should be settling.
They shouldn't be doing this. This is a jury trial, a lot at risk currently up one hundred percent for the year, at least on armshares in King breaking it all down, We thank you so much. You've are more chip news for you because Global Wafers, a Taiwanese maker of silicon wafers used in chip manufacturing, thanks a lot. It's finalized a deal to receive as much as four hundred and six million dollars in awards from the US Chips and Science Act is going to help build factories
in Texas and Missouri. Now, the US Commerce Department says it will dull out the funds based on Global Wafers reaching certain milestones. We've got to get in to the whole breadth of semiconductors, but also ai what it's contributing to the market come twenty twenty five. Callycox has US Chief market strategistic Redhult's Wealth Management. Kelly, Look, we've got a lot on the move when it comes to chips on the downside today, but on the upside for the year.
Is this a trade you want to remain in the semi conductor trade?
Seeing today, Caroline and I'll just you know, toss a shout out to your prior guest, because I think he framed the story of the sector so perfectly. But what you're seeing is, you know, a trade that's stuck and
rarefied air right now. I mean, the AI trade has been one of the big stories of twenty twenty four, and unfortunately, what that means is that when the AI story hits a bump, which to be clear, I don't think it's hitting up bump today, but there are some changes underfoot, clearly from what we saw on broadcomme earnings. You know, when the AI trade changes or hits a bump, then you could see some of these steeper pullbacks just because the sector has done so well. So right now,
this is what we're warning client's about. Right Obviously, the AI stories quite encouraging. We're excited to see where AI goes in the coming years. But at the same time, tech is the most overvalued.
Sector in the market.
So even there are a lot of promising science, we're urging clients to, you know, think about balance in their portfolios and reallocating into more unloved sectors.
Okay, so while before we get into going outside of tech more broadly into unloved within tech, is there a way of reorientating Many have talked about getting out of semiconductors into software. But has that trade actually already coured? Have you missed that boat?
Well, if you're an AI investor, if you're all about the AI story, I think you start having you need to start looking at the picks and shovels, and I think many people are doing that. That's why chip makers have had such an amazing year.
But I think it's even.
Time to look outside of chip makers there, you know, looking at the companies that could utilize AI in their day to day operations.
For example. You know, last year I really liked going.
Through earnings reports and seeing which companies mentioned AI and how well they did, because there were definitely a lot of hidden gems toward the end of last year.
That's an exercise I haven't done in a while, but I still think that.
There's a lot of you know, hidden value there, especially in those smaller tech companies that haven't gained as much favor.
Okay, does that remain when squarely the tech areas that become generative AI adjacent or is it looking to the healthcare implications to they? I mean, we've all looked at energy from an infrastructure play, but energy is an application to play as well, how you seeing other sectors adult AI and help their numbers.
I'd speak clear.
I don't look too far into AI usage beyond you know, those broader sector trends that I think every Mark Wall Street expert watches.
But I think you're right.
I think that there are a lot of applications that you could see, especially in healthcare, especially in energy. I think industrials are another interesting sector for the AI trade. But I think what investors need to remember right now is that this is a very long term story.
You can't judge it by one day or a few days. This is going to take years to materialize.
So if you're looking for those unlove stocks, if you're looking for those companies that might be dabbling in AI applications, you have to be thinking about holding them for years and years.
How do you find them, Kelly? How do you find the unloved smaller stock that no one's been talking about? What is it that you're going to go into from a data perspective, from a signal perspective, Well, I.
Think that there.
I mean, I think there are still a lot of opportunities out there. Interest rates are quite high. That's led to a pretty thin rally over the past year or so, and because there have been because the rally has been
so thin. To be clear, you know, I think that there are some some companies that are maybe on the cusp of you know, talking about AI more, you know, discovering applications for AI that haven't gotten that market love that other big tech, other more attention grabbing names have So I think you have to look at valuations first of all, look at valuations, you know, look at the plan for earnings.
I don't think.
Many AI companies or AI tent uh you know, AI tangential companies are you know, seeing earnings come from you know, AI AI applications.
This is still a very early story.
But I think right now, if you are a long term investor, you can look at valuations. You can look at you know, revenue signals that we've seen in Nvidio and Broadcon for example, and see if there are those early signs of uptake even management commentary. I think you can find some pretty valuable things there. But that requires having to you know, really parse through earnings reports and listening to these earnings calls.
It takes a lot of work.
It takes a lot of work. That's why you get paid the big bucks. But let's talk Kelly about the macro picture here, because while we are in this moment of valuations pretty high, run up significant, you've got a FED that we're looking to cut tomorrow. How much risk is there a macro policy.
I think there's a lot of risk at the moment. And you know, right now, I still feel quite encouraged by the economy. The economy has been incredibly resilient over the past few years.
But the risk I see, Caroline, is.
The fact that we're leaning into this tech versus everything else trade again in the month of December.
But you know, you still have a FED that isn't hasn't been quite clear.
About where they will go into twenty twenty five, and we're about to get a lot of detail around that tomorrow when the FED releases its decision, and more importantly, Jay Powell comes out and holds his forty five minute press conference. I mean, this is a FED chair that loves to talk about scenarios going into the future, and I just I think markets and Wall Street are overestimating, you know, where inflation could be, how high rates could go.
Because there still are signals of weakness in the job.
Market helicops always taking US border. We thank you, Chief market strategist Harid Hold's Wealth Management Happy holidays. The EU it's investigating TikTok, suspecting it didn't do enough to stop fake accounts and foreign powers from interfering with the Romanian
presidential election last month. Now, the probe will look at whether the app failed to prevent bad actors from manipulating recommendation system and if it correctly labeled political content under the block's Digital Services Act and stigma with TikTok here in the US, CEO show Cho met with President elect Donald Trump just weeks before The app is expected, of course, to be potentially banned if it's not divested in the
US over national security concerns. Rehomrs Alexander Levine is here and everyone is a who's who of in and out at Mari a Lago at the moment, but showed Chu is notable considering what Trump said yesterday about the little place in his heart he has for TikTok.
Absolutely, you know, we've seen legal blow after legal blow after legal blow for both TikTok and its parent company by Dance this month alone, just as they've been trying to fight off this law that's supposed to take effect in January. But in pulling out all the steps, we saw a show at Mari a Lago yesterday. And to your point, he's not the first tech leader. We've seen Mark zuckerbergo in recent weeks to talk to Trump and
his team. We've seen Tim Cook as well. But the stakes are so much higher right now, with the ban just over a month away January nineteenth. The stakes are so much higher for show than they have been for really any of the other tech leaders that have visited so far.
And at the moment it's being thrown at the Supreme Court store but what technically do you think of that argument the Supreme Court.
Basically TikTok has now asked the Supreme Court to take the case because the DC Court had said that they know they will not pause the law from taking effect, and they basically upheld the law. When the Supreme Court decides, that's going to be likely two days before the band
is supposed to take effect. And so you can be sure that regardless of what the Supreme Court says come January, that all these other companies that are going to be on the hook for actually enforcing it, including Apple and Google, most notably that preparations are definitely underway with getting ready for actually pulling the app off of the app stores.
And before we get into how technically difficult and logistically difficult that is, go back to what the Moon music just seems internally externally when you do see Trump signaling that he likes the platform at least and doesn't want to fund young voters absolutely.
I mean, yesterday to your point, we heard him say sweet spot for TikTok. I think we you know, you want to be able to take what he says at face value. But then you also have to take into consideration that he's stacking his team, his incoming team, with all of the most outspoken anti TikTok crusaders that have
been in Congress and across the American government. And so there's a big question about whether once he is in office, and once he is surrounded by all of these people who had the knowledge of you know, the knowledge that got the legislation and the law across the across the finish line in the first place, whether they may be able to convince him not to keep the platform.
Hard to know which line to discern from Alexandra Levine always had it putting us dissected. We thank you. Meanwhile, US Citizenship and Immigration Services finalized new H one B regulations, actually overhauling eligibility standards for the primary visa program used by most tech firms. Really, the regulations issued today codify a policy of pride deference in deciding extensions of previously approved H one B visas. The first Trump administration had
dropped that policy, significantly slowing visa extensions. Now, let's look at Mike Gallagher for a moment now as well, former Congressman turned Palenteer's head a defense and he said that the US Defense Department needs to overhaul its procurement process for a new era of modern warfare, and he's stepping up efforts to seed startups that can help restore the country's competitive edge. Remergs Lazette Chapman spoke with him and Lizette.
It really feels as though this American dynamism, this defense tech euphoria post election, is just continuing here. Yeah, you're spot on about that.
Defense tech has been on an absolute tear for the past four or five years, and it's only set to accelerate now that there are many of these companies have reached a critical mass, like Palentteer, like SpaceX, and like some of the up and comers like andrel that we get into in the story.
Yeah, let's get into the story, because ultimately you sat down with Gala. I mean, he's a famous China Hawk just thinking of what we were speaking with Alexandra, but a moment ago, and he can weigh in on TikTok. But how do you think we'll get more of a star top friendly Department of Defense in the US. What changes can be made?
Oh, there's so many different changes that cadre of people on both the dem side and also the Republican side have been pushing for for years, going back even over a decade when Palanteer and SpaceX actually sued the US
government for the right to compete to win contracts. Moving it up to date now, there are a lot of changes to the procurement process, the process of deciding what the different branches need, how it should be designed, making sure it's interoperable for the future, and then of course the process of selecting bidders and then ultimately selecting the winner.
So that whole process they want to see it really contracted from the year's long process of doing something like an F thirty five fighter jet to something much shorter timeframe that better reflects the types of warfare that change, you know, every not in terms of years, but in terms of months or even weeks. Have we seen with the drone and a drones and AI and a lot of autonomous systems. In your story, they're looking to shorten that.
Yeah, in your story, you highlight how Elomas cooled well, the builders of F thirty five warplanes idiots. I mean, he's never short on wads and descriptions, but thatte What's interesting is about the way in which Pollenteer and Mike Gallagher in particular, trying to foster the startup ecosystem. How are they doing that right?
They're reaching out to a lot of companies through something that they expanded they just recently expanded under under Mike Gallagher, who leads Global Defense now for Palenteer, and it's.
To encourage software.
Startups that want to do business with the US government to apply through Palenteer's fed Start program so that Palenteer can host their software for fee and deal with all of the accreditation issues, the different requirements all the software updates and monitoring and keeping them up to up to date and current. And that's a really big deal for a lot of startups who have different needs from different Every agency might have a different requirement to comply with.
Now, first startup with only.
Twenty people or maybe fifty people, that's very hard to set up that infrastructure that takes a long period of time they said years and you know, down to something shorter that they can handle. That's what fed Start and Palenteer are working to do. And it's in competition with other companies like second Front for example, that's also looking.
To do that. Yeah, trying to reduce the compliance headache. Is that Chatmander is a great read. Go check it out. We appreciate you on today. Let's just talk about elsewhere in the VC ecosystem. Data Bricks raising ten billion dollars in new funding, a series J which brings US Software makes valuation to a whopping sixty two billion Data Brick stating it intends to invest this capital towards new AI products, acquisitions, and significant expansion of its international go to market operations.
Now coming up some tech m and a news. Also in the startup space, Grammarly acquiring coder Grammarly's incoming CEO is going to be joining us next. This's is Bloomberg Technology Grammily. It's the maker of AI powered writing assistance software, and it's acquiring productivity startup Coda in a deal that will also bring in a new CEO, Shashi Marotra. It's currently the co founder and CEO of Coda and is lated to take over the top job at the combined
Grammarly joins us now for more on the deal. So coming together productivity tools, what do you offer as one?
Yeah, I'm really excited about this opportunity Coda joining with Germily. I've been personal user of the product for many years, really drawn to the innovative approach, passionate people. But the reason that's happened was the leaders of both companies that got together and just painted our vision for the future, what we saw with the future of AI productivity, and it just turned out that our view was near identical.
We both saw the technology evolving to what we call user centered AI and a future world where the applications we use won't feel as isolated, siloed, rigid that we're used today, instead really focused on the user adapted to each person, their teams, their roles. So we're going to be building a user centered AI platform or the future for focused on applications and agents for everybody.
It's a competitive space. I hear agents being named by startup, by large publicly traded business alike, and I hear of you know, Apple trying to integrate trying to make my email flow easier. How are you going to compete against big tech as well as startups?
Yeah, I mean, maybe just start with the term agent. I know, it's a hot term everybody is using these days. I think of Grammarly as actually the original AI agent. I mean, it's about forty million users use We use Grammarly every day, goes through about two hundred billion words a day, and one of the key things about that agent is that it works right alongside you. One of the big innovations that Garmley has worked on is that instead of forcing to go to some other place, it
follows you into every different surface. About five hundred thousand different applications that have been integrated with with Grammarly. One of the terms the Granmarley team likes to use I've really loved is the idea that they've built this AI super highway and it's the gateway to have agents actually work with you in every other tool. But one observation is right now there's sort of only one car running
on that highway that the Grammarly tool set today. It's amazing, but what it does is just help you with your with your proof reading. And one of the things we're going to do is we're going to take one of the most popular parts of the Code of Product, we call it Code of Brain, which is a network of hundreds of integrations into all your all of your back end systems, and we're going to turn them into agents
on this platform. And so what you can imagine is instead of interacting with Grammarly as just a proof reading agent, you can imagine that now the suggestion that come to you will help you draft consents, can help you structure customer conversations, can help you update your CRM systems, and we can really bring agents right to the user's that's one of the main things we'll be working on.
Shisha. You said how your goals of the two companies were basically completely in line. Is the goal and IPO in line as well. When you're looking at the changes made of Grammarly, new CTO from Instacart, new CFO coming from Hashi Corp. You with your background at YouTube and big companies as well as startups, it looks as though you're destined for an IPO.
You know.
I think I think the goal is to build an enduring company, and I think that in this sort of crazy world of AI changing everything we work on, I think it's a very smallest of companies that can have that meaningful platform to really be that that future of AI. I think the approach of Grammarly and now with CODA, I think we can really be at the forefront of that.
And yeah, we'd like to be one of those top three or four companies that people think of when they think about the AI tools for for their world to share.
Rotra, thank you for coming on incoming, CEO of Grammarly, Welcome back to the new meg Technology. Karen Hide in New York. Quick check on your markets. Look, we're all eyes on the FED tomorrow and digesting some retail data today that still shows the US economy is going strong.
Go new.
Sometimes bad news. Then as that one hundred fourth, sir, it's record high. We're off by just three tens and percent chip makers on the downside, in particular some profit taking over at Broadcom. Move on and have a look at what's happening in individual movers when it comes to the crypto space as well. Bitcoin still up at one point one hundred and eight thousand, We're one hundred and six thousand as we trade, are still holding onto those
record highs. Micro strategy though, just seeing a bit of profit taking show, we say, after a five hundred percent run up this year, of course, basically a Bitcoin proxy entering the Nasdaq one hundred on Friday, many feeling this will be the beginning of a momentum trade. But how much of this is a priced in already? Much of that, of course, is because sectors like crypto are continuing to out following the election of Trump. How is broader hiring?
How is startup optimism? Payrolls processing company Gusto has a bird's eye perspective. Hr startup has announced, in fact, a new partnership with zero. It's a leading accounting software platform for small businesses motally lad Let's ask Gusto CEO and co founder Josh Reeves, It's great to have you here.
Pleasure to be here. Thanks, Carolyn. So let's talk about the partnership and why you're focusing on small and you're already a provider to an awful lot of small and medium sized enterprises, why furrow that even more so?
We're thrilled to support and serve over four hundred thousand small businesses today. And one of the things we realized a couple of years ago is you have small businesses that are going to use Gusto directly, but there's a lot of small businesses out there served by existing platforms LEG zero and zero focuses like you mentioned on accounting.
A lot of these other platforms do not want to go build things like payroll themselves, and so we created this industry called embedded payroll, which is basically the ability for folks legs zero and that's what we're announcing today to launch their own payroll products powered by Gusta, so more analogous to that stripe type business model, and we're really excited about it because it's a way for us to reach more small businesses where they're.
At and are they ultimately underserved at the moment Because your startup space is a busy one, there are plenty of hr payroll startups trying to be the be all and end all to everyone. How are you finding that small medium sized enterprise space.
Yeah, so I always loved reminding folks there's more dentist offices in the US than tech startups. So we really do obsess over and zero does as well, and a lot of our partners. Actually, we're thrilled to partner with a number of companies, including Chase Payment Solutions, to basically bring modern, delightful payroll to where they're at in a
more accessible, intuitive way. Saves them time, saves the money, prevents mistakes, filing issues, and we've built now ten plus years of infrastructure processing over half a trillion dollars of payroll to really earn that credibility and be who these partners want to choose when they're building out their own payroll products.
Interestingly, I don't think a dentist office is going to be hiring many people abroad, but you've been trying to focus on this making it easier to hire internationally. So we're getting the news today that H one b's, for example, are going to be overhauled and streamlined made easier by the current administration. How are people's propensity to hiring abroad at this moment, so.
It really depends on industry. With Gusto, you do have the ability to hire both contractors and employees internationally. I'd say there's been more resonance on the contractors side, but again, many many products that we're expanding into International is just one. We offer a lot of functionality around time tracking for one K, business insurance, all the different pain points. It's really hard still to run and start a small business, and our job is to make that easier.
It's hard to run a startup, even as successful as yours. You haven't raised money since twenty twenty one, ultimately because looking at your profitability you don't need to. But what is the pressure on you to IPO to have an exit? Is it? Are you finding that the competitive mode when your versus a deal or a rippling is getting harder or is it fine?
We welcome the competition. We want to be the best product in the market. We believe we are. We're also just only one deck into this journey. We talk about it being a multi decade journey, so at some point in the future we will be public. Nothing to share there but really our obsession is on how do we give the best possible experience to those customers and do that through our actions, through the work we put in, and also through the partnerships we signed with folks like Zero.
And the talent you have when you're lying in bed and you've got something on your mind, does it tend to be talent acquisition? Is it about general to AI? What are you thinking most about?
Mostly thinking about team building and as we, like you said, have free cash flow, positive, a solid business model, real customer need that we're really delivering true value for We're being very aggressive reinvesting that capital, that free cash flow into building new products, building additional services for our customers to use, and so that usually means hiring. Team building and I'm doing a lot of time these days interviewing candidates.
As is the life of a CEO. Josh, it's great to have you. Thanks for something by as you're in New York is of course the CEO of Gusto joshes them. Meanwhile, coming up these spotlight upon us, we'll talk consumer investing. In twenty twenty five, Shamin Walch is with US managing director at BAM Ventures Plus a conversation with Minnesota Senator Amy clovershah all about antitrust. You don't want to miss it.
This is Blue Beg technology. We want to just take a look at consumer investing trends right now after retail sales looks so good today? Were they looking like into twenty twenty five. BAM Ventures is going to join us in VC Spotlight. The firm's portfolio boasts some of the biggest names in consumer investing like Zolar nerd Walt, Wanderley, Band Ventures managing director Shaman Walt joins us for now
for more. And it's interesting that maybe consumer bets we all know them because we use them, but perhaps they haven't got the valuations of semi conducted a software space of late. But what does consumer resiliency look like?
Well, first off, Caroline, good morning, and I wanted to thank you for having me here and for those who may not be familiar with me. As Caroline said, I'm a managing director at dand Ventures. We're a pre seed and seed consumer focus fund based in Los Angeles and built by the founders of billion dollar public companies like
Legal Zoom, an Honest Company. And then as you mentioned, yeah, you know the privilege of investing early in household names like sweet Grains, snaps, cope ly nerd Wallet, et cetera. And to your question, you know, it's interesting because I think valuations are what catch headlines, but we often underestimate the inputs that it takes to get to those numbers
and also the equity breakdown. So, for example, you know, a company that exits for five billion dollars is an eye popping amount, but when you look at the cap table and you see that a founder, you know, on two percent of that business, they actually made less than a company where the founder owned twenty five percent of
a five hundred million dollar exit. So the valuations are often you know, a particular on the brand side may not be there on the text, of course they do have that potential, but you know, the equity outcomes for the investors and the founder, as you'd be surprised to see, are often much better.
Yeah, and so you're very much trying to align oneself with the founder and with their own legal background. I'm sure you're ensuring that they maintain a lot of holding and serve themselves well by having ownership of the business as it matures and takes funding. What then about finding these diamonds in the rough. How are you deciding, Okay, this is a startup, a consumer facing startup that is it a pivot point is about to go up into the right.
We have this internal mantra that we like to we say that we have to love the founder and not hate the idea at the stage that we invest it truly is about the founders, and you know we we we love what we call the silent assassins, the folks that are focused on building their business, who know their customer, who know how people actually operate. You know, there are a lot of things that we theoretically would like to
exist or like to do. You know, I'd love to be the fittest woman in the world, but you know, maybe I won't put the effort and time into an exercise regime or counting my macro nutrients. And the founders that actually understand how people, you know, live and behave and what gets them to a purchase decision is really what we're looking for.
And do they do that via EQ? Are they doing that through data? What do you want to see when one founder that you don't hate the idea of comes and pitches you.
Yeah, I think, I think it's both, and I think.
More importantly it's around understanding not only their consumer but themselves as well what their strengths and weaknesses are.
So, if there are.
Incredibly data driven, maybe they have hire a team that is very EQ and brand driven, or vice versa. If they're incredibly brand driven, then they hire a team who understands operational efficiencies and knows that, you know, they need to hit their margins. And so I think the most important thing we look for is a founder who understands their customers, as I mentioned, but also who knows how to hire around them.
Look, you've been at Angel Investing for more than seventeen years, You've been in your seat at bound benures for a number of years, and what are valuations like at this particular moment. How are you looking into twenty twenty five and thinking about whether these are the right sort of checks to be writing at the right valuation.
Yeah, I think that we.
Are.
In Valuations are very specific to the sectors right now. You know, you hear about the buzzwords of AI or crypto, and they can command a hefty evaluation. They also are very capital intensive, I think, to the point I was making it at the beginning around the inputs and the output. A lot of times funds will back into valuations based on how much they need to deploy, and it may be detached from how much a company itself.
Is actually worth.
If you're a large fund and you need to write ten million dollar checks and you love a particular category and you give them ten ten million dollars, then you need to back into evaluation from there, as opposed to investing in a company they may not need as much.
It's interesting that you said crypto is sort of the buzzword, and sure, bitcoins have been the buzzword, micro strategy been in the buzzword. But all are we seeing more and more founders coming to you with a Web three adjacent company now or consume a focus that is building in Web three once again? Are we at that stage of the cycle we are?
We see a lot of founders who have a Web three component. I do see it having come back into vogue, and like I mentioned, AI is the mode.
Jour And to that point, when you're consumer founder, is it just that you want to see AI boosting productivity internally rather than trying to back themselves into a generative AI business.
Do you mean what we look for as investors or what founders are pursuing these days.
Yeah, what a founder's pursue. What are you seeing and what are you wanting? Briefly, Yeah, well what we're wanting.
The way that we think about AI is the way we think about the Internet. You know, It's like if a founder came to us and told us they're building an Internet company. I think it's ubiquitous, it's necessary, it is the future for us. We're really looking at, you know, the other elements that will make you a successful business, what your distribution, your team, sales and marketing, the AI itself.
For us particularly and at our fund size is not the sole determinant of whether a company is attractive or not, and I think founders are catching on to that as well. I think there was a period of time we're just adding a dot aih was they thought was changing things in terms of activeness. But I think at this point founders are starting to realize we need to show some differentiation beyond that.
Well, said Schaman Welch, an Asian director at ban Benches. Thank you so much for your time today. Now let's just talk about Senate Judiciary Subcommittee set to here on anti trust and legal experts. Let's get to Kaylee Lines in Washington.
I'd like to welcome our global Bloomberg television and radio audiences. I'm joined in conversation by Democratic Senator Amy Klobuchar of Minnesota, live from Capitol Hill. Senator, thank you very much for being here. You are leading a subcommittee hearing today titled Continuing a Bipartisan Path Forward for Antitrust Enforcement and Reform.
And I do wonder, in what will become January a Republican controlled Congress and bill members and White House, what that bipartisan path actually looks like.
Okay, well, first of all, thanks for having me on, Kaylee.
It's great to be on.
And I think what you've seen in this area of antitrust, you've seen some broad bipartisan agreement on a number of these cases.
Right.
For instance, the Google case started under the Trump administration, the first Trump administration, as did the Facebook case that was at the FTC. Google was at the Justice Department. Then it proceeded through the Biden administration. Biden administration also brought some major cases, for instance against Ticketmaster and other companies, and so you've seen a more aggressive anti trust enforcement
over the last few years. Now you have a new appointees going in place, and at least one of them I have heard the belief is over at the Justice Department with some former Democratic anti trust enforcers that she knows what she's doing. I'm looking forward to meeting with her, Gail Slater, and I'm hoping that we will continue those cases. I love competition, Okay, I like capitalism. That's why I'm for anti trust enforcement.
Well, you've mentioned Gail Slater. What about Andrew Ferguson. Do you think he loves the issue of competition in the same way that you do. Do you trust that the FTC will be in good hands under his leadership?
You know, I am looking forward to meeting with him. Interestingly enough, we do not confirm that position because he was already on the commission. There is a new member that is being appointed on the Republican side. I'll note that he also he wrote a piece on the breakup of Ticketmaster in which he favored that. So I just think with anti trust because at its core, it is about competition, and it's been laggered for many decades, and as a result, we're seeing more and more consolidation. It
isn't that big companies are bad. It's that sometimes when you have no competition, then you start getting less innovation, more high prices, et cetera, et cetera. So I'm actually really excited about this center. Lee and I are doing this together, this hearing center. Grassing and I have passed our bill together, and I think you're going to continue
to see interest in tech. Fact Center, Cruise and I did a joint interview this morning and bill that we have gotten through the Senate on taking online porn off the Internet different than anti trust. However, You're just going to continue to see bipartisan work on tech.
Well, I'm glad that you have brought up the Take It Down Act, which you co sponsored with Senator Cruz. Is that trying to tackle symptoms of an underlying disease rather than the disease itself. And the disease I'm referring to here is unregulated artificial intelligence.
Thanks, I really would like to put in some rules of the road on AI. And this bill is actually broader than just AI pornographic is pictures. It's actually also real pictures as well as AI created ones. We're now seeing one in twelve Americans saying that they have been a victim or no, someone that's a victim of this. We've had twenty suicides in one year of young kids. Twenty suicides because someone a girlfriend, boyfriend, someone they knew
put up their photo. They were embarrassed that their friends and their family would know, and they killed themselves. These are FBI statistics. So Senator Cruse and I came together to build us two things. One make it clearly a crime to use pornographic imagery of someone else, whether it's AI created or real. And then number two, that the platforms have to take it down. That's why it's called
the Take It Down Act. They take down other violations of intellectual property and the fact that people can be abused in this way to the point of committing suicide. And in one case that I know of, Senator Cruz's case, he actually had a call Snapchat to get the image down after months of this victim from his state dealing with it.
That's just wrong.
Senator, I'd like to ask you about another one of your colleagues, your fellow Democrats, Senator Elizabeth Warren of Massachusetts, wrote a letter we understand, to President elect Donald Trump asking for firm conflict of interest rules to be put into place. Related to Elon Musk, who, of course has been tapped to co lead this new Department of Government Efficiency, have you had any conversations with Senator Warren about that, or at the very least you share in that sentiment.
Now, I haven't seen this letter, but I will say that I believe that we need conflict of interest rules in place for people who are making major decisions in the government. That is what our people have done voluntarily for years now. And you have a number of very
wealthy people going into the Trump administration. There's been wealthy people as well under Democratic administration, but you have a number of them coming in and we need the conflict rules in force, and we need to know that the decisions they are making are not for their own interest but for the interests of the American people. And I would hope that President elect Trump agrees.
Finally. President Elect Trump yesterday met with the CEO of TikTok Show Too at mar A Lago, after saying in a news conference Senator that he is a warm spot in his heart for TikTok. When asked if you would like to see the band go through or will try to stop it. Given some of the issues we have already discussed around technology in particular and what is propagated on these platforms, what is your view about whether that band should be enforced come January.
Of course, this came out of Congress with strong bipartisan support, and there are two avenues here. One is that they can follow the law and divest and find a buyer for the company, and the second is that they still are appealing to the Supreme Court. So my view has been that we should have rules of the road in place,
by the way, for all platforms. I have been way out there, as I think you know, in terms of getting not just pornography off the Internet, but other very very difficult things that are on there right now, and that we should have a better policing of that, and people should have the right to protect their own intellectual properties,
and also that we should have antitrust enforcement. You just can't have, say, Google, with a ninety percent market share on the search engine and not have any competition and then allow them to self preference, as we see with Amazon and other companies their own.
Products at the top.
That's why the NFIB, which is not a liberal organization, the National Federation of Independent Businesses, is strongly supporting the bill that I have with Senator Grassley, which simply puts some rules in the road in place for a competition on the internet.
All right, Democratic Senator Amy Klobaschar of Minnesota joining us live from Capitol Hill on Bloomberg Television and Radio. Thank you so much, and I'll send it back to you in New York.
Kaylie Lyns, we thank you, Senator Amy Clobshaw on Minnesota as well. Let's just break all of this down politics intersecting with technology. We do that with Blue Meggs, Mike Shephard and just going to the bipath is in nature of anti trust focus, it does feel as though many interpret Trump administration well business friendly, but he's put some people in seats that have really critical eyes on companies such as Google.
That's certainly been our sense as we've reported out Trump's selections for these key positions, including the head of the Anti trust division at the Justice Department and the person who would succeed Lena Kahn at the Federal Trade Commission.
And now we've heard it from Amy Klobuchra herself, the Senator from Minnesota, who has really spearheaded efforts in Congress in the Senate on this area of competition enforcement, and she is signaling some optimism that the incoming Trump team will not divert too much from the playbook when it comes to cracking down on areas, especially big tech, where
we've seen a lot of concentration of market power. We saw her reference Google at the very end of her remarks to our colleague Kayley Liones, Yeah, and.
Saying that she's looking forward to meeting with Andrew Ferguson as well. Mike, I want to shift more broadly into the context of technology and the next administration, because there is a merry go round at Mara Lago at the moment of all the key names in tech, whether it be Netflix, we know, Bezos's jew we have just had show cho Is it really a key focus on technology in the future.
Well, it really has been a parade of these high profile CEOs going in to meet with President elect Donald Trump to have their cases heard and to hear a little bit from him themselves so that they understand a little bit how to relate with him. Think of it as corporate diplomacy, but a two way Street. Trump really likes to exercise that sort of function of his office to reach out to CEOs in the way that a president would also reach out to heads of state. He
likes that kind of engagement. We saw it in action so much during his first term in office, and now we're already seeing signs of it now as he prepares to return to the White House. And for these companies, it's a chance for them to be heard, especially for shout Chew. His company is facing this existential question of a band that could take effect as soon as January nineteenth.
That is an existential question for TikTok other companies maybe going in and saying, look, my key worry here is talent and access to talent. One of the most read stories on the Bloomberg today and across the web is about h one B visas, how the current administration, how the current US decision and am Immigration Services are basically making final changes to making it easier, more streamlined. Is that something that might be upended by the next administration. What's hiring going to look like?
Well, there is a risk of that happening, of course, And one of the concerns that companies, not just tech companies, but tech companies in particular in reference to the H one B program, they're only eighty five thousand visas available every year. They're really coveted. The competition is really really
stiff for them. And tech companies need that workforce of skilled workers with a dance degrees to be able to propel their development of the latest technologies, and any change to their program is a disturbance and force and at risks impeding their progress. During the last Trump administration, they had dropped a policy known as prior deference, which helped
grease the skids for some of these applications. And this policy was just codified reinstated with rules that were finalized today by the Customs and Immigration Service and the Department of Homeland Security. What we want to see, what we're looking for going ahead as a Trump team takes office, is what will they do there as they try to address the broader question of the border.
Mike Shepherd bringing it all together for us from Washington. Thank you very much. Indeed, now that does it. From this edition in Bloomberg Technology, You do not want to forget to check out our podcast. Find it on the terminal as well as online on Apple Spotify and iHeart this is blue bag technology.