Broadcom-VMware Deal and Adobe's Outlook

we know so far about this Bloomberg School. Plus I'm joined exclusively by Shantan now Ryan, CEO and share of Adobe. We've got a lot to talk about, including how Adobe is handling this market sell off, plus his outlook for the company's future and plans for the metaverse. And coin bases fall from rates, how a bear market, regulatory pressure and falling crypto prices are piling up on the largest US crypto exchange, coin Base has now lost fifty one

billion dollars in market values since its IPO. More in our crypto report later this hour. Let's talk a whole lot more about that Broadcom deal for vm Ware. I want to bring in bloom brig Leanna Baker, who covers M and A for US, and I'm also joined by James Fish and analyst at Piper Sandler who focuses specifically on infrastructure and communication software. Leana, first of all, tell us what we know what we don't know at this point. Sure, so we know that Broadcom is in talks by vm

where it's a blockbuster or deal. We don't know the exact price. But before our story, you know, shares are already trading valuing vm Ware it over forty billions. So this is really going to be a large one and the deal is probably imminent. We reported it's coming later this week and it's going to be one of the biggest tech deals in years. So, Jane, if we're looking at a potential sixty billion dollar valuation for vm Ware as part of this, l who do you think, Wayne,

who loses in this tie up? Um? Look at a story for Broadcommon talking with my colleague Harshkmar where you know they've done a tremendous job on rolling up some of these software assets, whether it's c A and Semantic together. Actually an apt Meta was a small one that they did last year. Um. But at the end of the day, you know, the playbook that the CEO of Broadcom runs, you know, fits well with vm work. For the most part, we see vm Ware is fairly complimentary to the existing

software segments that they have. There is some overlap, especially as you start to think about the Carbon Black deal that vm Ware did with for example, the Semantic endpoint protection business UM. But overall, you know, vm Ware has been a drag versus some of the others in infrastructure because of the Delta vestiture overhang, because of the move

towards public cloud, and because of its ongoing transition. So you know, it can be a win win for both sides in this case, Leona, how close is this to being a done deal? I know we're reporting it could potentially happen this week. It's funny with Broadcom, you never know. Last summer they were close to a deal with something called sas Institute, a deal valued close to twenty billion, and it fell apart. And then three years ago Broadcom was close to buying all of Semantic and that also

fell apart. So you never know with Broadcom CEO Hawk ten. But this one, from what we know, it's still in talks. Uh, not in danger right now of of falling apart, but a deal isn't done until it gets the finish line, and as you know with Elon Musk and Twitter, even if you do get to the finish line, it may not be a done deal exactly. Um Qualcom. Broadcom did try to buy qual Calm back in which also would have been a massive deal that didn't happen because of

Trump administration concerns about Broadcom's headquarters in Singapore. But we did catch up with Qualcom CEO Cristiano I'm on in Davos earlier asked his thoughts on this potential tie up between Broadcom and vm ware. Take a listen to what he had to say. It's really for Broadcom to comment. By the way, I look, Broadcom has become a more of a software company and uh, you know with some of the acquisitions they made in the past, and I think vm or is a software company. We're going to

the different direction. I think we will continue to be a semiconductor company, focus in the growth that we have in this industry, especially at the edge, and uh, we'll continue to see not consolidation but conversions of all those opportunities. James Broadcom CEO Hackten as ambitious and seemingly acquisitive as effort is Broadcom even a chip company anymore, or is it more of a software company? Well, to be fair, I don't I don't cover Broadcom, but you know that

the chip part does still overwhelmed the software piece. But when you think about it, you have a roughly seven eight billion dollars running right on the software side, and when you look at what vm Ware could do, that could essentially triple the side of the software business and and kind of start to bring it more in line with the UH semiconductor side of the business. James, what do you make of the fact that this is happening when we are in the midst of a tech sell off,

and do you expect more big deals of this nature. Well, it's a good question. I actually just wanted to come on only honest point there. It probably does trigger the Chinese regulatories just because vm Ware does have a decently sized business there. Um that would kind of be over that threshold rate that that's typically assigned there. So it would expect China to be someone involved here on the

approval process needing to get done. And you know, it's very few companies that could actually swallow something the size of vm Ware in this case. Um, And let's face it.

Some of the hyper scalers would have some challenge and getting this kind of deal done, so it kind of removes them to a degree from the equation I would say it's impossible, but it does present some problems on that and um, but it is the case where um, you know, at the end of the day, broadcom makes makes a lot of sense and you know, for um, for really what needs to get done here, Um, we see pretty smooth process. It just might take some time.

And um yeah, all right, James Fish, Piper Sandler, thanks for your perspective. Leanna. We're going to continue to watch your teams reporting on this deal. Thank you both. Airbnb is closing its business in China. According to Bloomberg sources, Chinese starts traveling abroad have been a bigger opportunity for Airbnb, with its domestic business inside China accounting for just a

percent of Airbnb's revenue. AIRBNBC O Brian Chesky addressed all of this in my last interview with him on Bloomberg Television. Take a listen. You know, our China business has primarily been people in China leaving China obviously crossing a border, so it's cross border travel going to other countries. Japan was a really popular corridor. South Korea they're going to like Europe, They're going to other places. Because of the

situation of China. In COVID, there's not a huge amount of outbound business right now, and so our business in China is not super robust and it's going to be probably a while. It's really gonna track with the health crisis, all mainland Chinese listings will be taken down by this summer, according to sources. Alright, speaking of AIRBNBC Obrian Chesky also tweeting a number of times about the difficulties fighting tech and startups, in particular given the volatility we are seeing

in the markets. For more on all this and just how low things could go, I'm joined by Dan Suzuki. He's the chief investment officer at Richard Bernstein Advisory, which has about fifteen billion dollars in assets under management. Dan, thank you so much for joining us. So looked, did we just hit the bottom and are we on our way back up? Or is there a lot lower we could go? Well, Emily, I think the reality is that

that nobody really knows for sure. Um, but I would say that the you don't want to sort of jump in here simply because you know, regardless you're going to get these big moves and markets on both sides. But you know, it all comes back to us. You know, why do you Why would you buy? And I think

it's when the data tells you should buy? And right the issue that the markets content have is despite the fact that you have this, you've had this sell off, profits are still slowing, liquidity is still tightening, and you know, evaluations why it come down a little bit, there's still quite elevated certain parts of the market. So that's not a combination of factors that tells you you want to jump in feed first to markets, even if you think that they've gotten a little bit cheaper. So let's talk

about tech in particular. Just what kind of a roller coaster are you expecting tech itself to be on over the next weeks and months? Yeah, you know, to be honest, I think that we are at you know, we in the early stages of a new paradigm him and a new secular leadership in stocks, and that secular leadership is not going to be the same as the leadership over

the last ten or fifteen years. I mean, investors always invest in the rear view mirror, you know, but this is probably a time given the huge shifts, you know, the tectonic shifts we're seeing in the macro backdrop, that are screaming that, you know, the backdrop is changing. So it's it should be no, it should be obvious that the probably the leadership of markets is going to change with all this happening. Um. I I think this is

not going to be a short term thing. And this is something we've been saying that you know, tech and innovation and disruption. While we believe in the story, you know, people have got ahead of themselves in terms of their evaluations, in terms of the expectations, and it's created a bubble. Uh And and that bubble is in the process of deflating. And if you look at the history of bubbles, they don't softly and quickly correct over a six month period.

That typically takes longer, and they usually go down more than what we've seen so far, despite the fact that you have sometimes monster rallies on the way down. Um So there's nothing to say you can't get that. But I would not be jumping in here like some others are saying this is a buying opportunity of a lifetime.

I just don't think so. Now we're just getting some headlines from a new filing that just came out from snap Snaps saying that they are expecting their EBITDA and revenue in the second quarter to come in at the low end of their guidance, saying that the macro economic environment has deteriorate, deteriorated much more quickly than they thought. What do you make of this? Well, I think you

know there there there's two important takeaways here. You know, one, this is just another example of you know, companies results over the last earning season or two that have had to sort of bring down these un unattainable, unrealistic investor expectations down to earth. I think the two unrealistic expectations have been that you're going to continue to see growth at the same trajectory you have over the last feyears and all Secondarily, that you're going to see all these

companies be winners. I think you're seeing company after company tell you that that's not going to be the case. Underlying growth is slowing as these companies mature and it gets more competitive, and that's one thing. The second thing that I think is critical is that the market continues

to underestimate the economic sensitivity of these tech stocks. I think that when you when you think about it, you know what if the economy starts to slow, You're gonna cut their number of streaming services, you're gonna use, companies are gonna cut their advertising spending. They're gonna have less software investments, You're gonna buy less discretionary you know, high

expensive technology goods, and so technology is very cyclical. It just wasn't during the pandemic, and so as growth continues as slow, that's gonna be a headwind. And the big issue is not just that things are gonna slow, but expectations just aren't there yet. So I think that's why you get these big ratings as you re rate those expectations. So Snap shares now down in twenty two percent after hours,

We're going to continue to follow that. Dan, I'd love to get your thoughts on this pending potentially pending deal between Broadcom and vm Ware would be a massive consolidation in the tech space. Do you think we're going to see more M and A like this given the environment or not, given that what we're seeing is actually a

huge premium on where VM is, where is trading today. Yeah, I think you know, if you if you think about just overall trends, it's not it's it's not you know, out of the norm to see this type of action. I mean it, you know very much. Typically what you see with company the way companies act is very similar to the way investors act. And so that's why you

see share buybacks tend to peak at market highs. M and A activity tends to peak, you know, at peaks of markets, and then even after things start to roll over, you tend to see a lot of momentum with investor activity as well as company activity because they think, you know, they're getting big sale price on the on these assets. Uh. And I think that that's kind of what you're seeing today. That will probably dry up, and that will be the sign that you know, you're really starting to see things

roll over and that you're reaching that auto. All right, We're gonna continue to watch all of this. Dan Tazuki, Richard Bernstein Advisers, thank you for sharing your perspective with us. And coming up, we're gonna hear from Intel CEO in Davos on all things Chip and a progress update on supply chain pain, plus his thoughts on that vm Ware a deal given that he was of course previously c CEO of vm Ware. This is Bloomberg continuing our coverage of a potential acquisition of vm Ware by Broadcom. We

spoke with Intel CEO Pat gal Singer from Davos. He was, of course the former CEO of vm Where here he is with my colleague, has Linda a mean talking about all things? Also chip supply Yeah, no, we we definitely think that the applied demand balances and uh, you know, a year ago, I said twenty three. Since then, we've seen a number of equipment supply chains move out, so our equipment coming into the fabs that we're building that has moved out. So overall four until we start to

see a reasonable balancing of semiconductor supply chain. So what I get worse from here before it gets better, because when you take a look at the ports and China, for instance, we're talking about fifties sixty ships just waiting to unload, and of course, uh, that's causing a lot of headaches. Oh yeah, the supply chain issues that we've seen in China. But it comes on the back of many other supply chain issues. So we're already sort of beaten down and so we have to work through it.

And maybe the you know, softening of the economy, a little bit of consumer softness, gives us just a little bit of breath, but you know, we're still out and obviously the Shanghai ports have created a bit more turbulous that we're managing through. Near term. We talk about a slowdown, in fact, a global slowdown, although we've seen a pushback from Crystalline and Jeva saying we're not looking at a global recession, but definitely a slowdown. What do that mean,

demand destruction? What assumptions are you making? Well, we definitely see a bit of softening on the consumer side. How much softening, I mean, can you give a number to that? Um you know, as you saw on our earnings, you know, we saw, you know, there was a meaningful you know, you know, a number of percentage of points software there. We originally were expecting the PC industry to be up

a couple of points this year. Now it's sort of flatish, maybe down one point, so you know, a meaningful swing. But on the business side, the enterprise and commercial side, no change, right continuing to have real strength, and those areas of the market. You know, I think with you know, inflation concerns, tightening a monetary policy, these continuing supply chain challenges, Yeah, things are probably gonna be a little bit choppy for

a couple of quarters. You're also were looking reviewing where you produced your chips and facts. You're making Europe as well as the US a priority, and perhaps that message is resonating even more given what we're seeing in China. Um, how is that coming along? Well, we are all in on the rebuilding on what we've called the geographically balanced, resilient supply chain where you know, this industry was in US and Europe thirty years ago. Now it's manufactured in Asia.

What happened? You know? And it was never as I you know, I was in Washington last week, and you know, I joked to some of the congressional leaders. We never voted to get rid of this industry, but those countries voted to get this industry, you know, and they put strong packages in place to attract this industry there. And now we see that, oh, you know, we are way too dependent on too few places in the world, you know, And has Linda what aspect of your life is not

becoming more digital? Everything is becoming digital, right. You know, my consumer my healthcare, my trade, transportation, you know how I work, how I live, and everything digital runs on semiconductors. As I say, you know where the oil reserves are defined geopolitics for the last five decades. Where the fabs are is more important for the next several decades. Let's build them where we want them and do it in a way that we have more resilience to the supply chain.

It is all great that you want to make the US and Europe a priority, but it's also about scaling and scaling quickly. How soon can you get there? Well, you know we've announced the Ohio side expansions in Arizona. In Europe, we announced our expansion and Germany, new research

in France, expansions continuing in Ireland. And what we're really now anxious to see is that the US and the EU Chips Act get completed that allows us to make those good economic investments, because part of the challenges is that, you know, we're competing now with countries that have very actively incented those investments in Asia, and these investments they have to be competitive worldwide or I can't compete for

the worldwide market. So, and that's what we're looking for the EU leaders as well as the US congressional leaders, get these things done so we can go faster. Just for our radio listeners, we're speaking to about pad galcinga Intel CEO here in Davos. I mean, we talked about how we want to ramp up that production in the US and Europe. But what kind of government support are you seeing are you getting and is it enough? Well, you know, the US Chips Act fifty two billion dollars,

the European Chips Act forty five billion euros. And as we've looked at those programs and we've helped to shape them, they make us competitive in the world. We feel very good that these are very good steps forward and it's against what I call the moon shot. And by the end of the decade, our objective is that we go from eight percent Asia, US and Europe to fifty fifty right,

thirty US tent in Europe fifty percent in Asia. That is the goal that we are driving these four and we think these these are rate steps forward and if they are being successful, we can drive towards that welcome back to Bloomberg Technology and Emily changing in San Francisco, want to get back to that breaking news out of Snap. The company shares plummeting in late trading here in the US after cutting its guidance for the current quarter. Are

at ludlow here. Snap shares last I look down more than two percent, saying the macro economic environment has deteriorated much more quickly than even the anticy. And you you'll remember in April when they reported first quarter arnings and gave guidance for the current set of quarter, they said that they started the year better than expected. Advertisers had held up a lot of young people stuck with Snap at a time where they weren't sticking with Facebook, that's

for sure. But things changed, particularly in the context of the war in Ukraine, and what we're hearing from Snap right now is that that's got even worse. And so they're saying, our revenue in the second quarter are adjusted earnings before interest tax, et cetera, will be at the lower end of the scale which they gave in revenue, they said, will the street have been looking for something more? And this has also taken down other social media's rights.

Twitter Twitter doesn't need any more bad news, right, It does not need any more complication, that's for sure. I think you remember back in April when we were digesting Metas earnings, we're thinking, oh, Snap was a bright spot. We did see movement in other stocks depending on the

fate of others. Why because they all have tied fates when it comes to advertising, and so this is worrying, especially for Facebook, where Snapp has had growth, Facebook has stagnated in its growth, and so if we're hearing this message from Snap, I think there would be a concern

to some of the other social media platforms. Now, it was interesting at the time when Snap tied the lower numbers to the war in Ukraine, when it seems like it would be more directly tied to coming out of a pandemic and people just having less disposable time to sit around and look at social media. So the thing when you cover social media stocks and companies is we

forget how they make money, which is advertising revenue. You know, we're super fixated on how many users they do or don't have on a daily or monthly active user basis, or how their growth is. But ultimately advertisers have other reasons to pull money right. If they don't have confidence in the global economy, they might hold off on spending

y because they're targeting people with those ads. They need the consumer to be strong to actually buy products, and that's certainly what we've seen in the war in Ukraine. You see Alphabet, the parent company of Google and YouTube hit by similar impact. It's the worry that those ads aren't getting any eyeballs willing to spend all right at Lovell,

thank you for that update. We're watching so many tech companies trying to navigate this sell off, and my next guest is one of software's biggest success stories, but even they haven't been immune to the recent volatility. I'm joined now by Shantonoon and Ryan. He is the CEO and chair of Adobe. Shantonoo, great to have you back with us. It's been a while and the world has changed a lot. I have to get due reaction to the later sell off.

Obviously we're talking about what's happening in Snap at this very moment, but in big TEG more broadly as well. What's your outlook on all of this, given that you've been in this industry for a couple of decades. Well, Lemily First, it's great to be back on your show. As you said, it's been a couple of years, and big picture for us, certainly the move towards digital, it's

no longer would be nice. It's an absolutely critical imperative and so it's sort of a cliche, but the truth is that digital is changing everything from entertainment to work to play, and uh, I think we're at the center of all those secular trends. So some of the companies reporting I don't understand fully what their business cycles are, but from our perspective, we continue to innovate and our

addressable market opportunity just continues to grow larger and larger. Now, some folks are comparing what we're seeing right now to the dot com bust, and I'd love to hear how you are trying to put this into context. What is your assessment of the macro economic environment and the circumstances that are beyond your control, whether it is inflation or rising rates or an ongoing war. Well, a couple of

thoughts come to mind, Emily. The first is that we have been through this incredible, uh macro economic bull period for the last few years, and so to some degree a business cycle is absolutely critical, and that's happening also as a result of the backdrop of what happened both

with the pandemic and more recently with the war in Ukraine. Uh. I believe that what this will cause is a number of companies that are single product companies that may not have the depth and the breadth of the kinds of offerings that the larger tech companies like Adobe have will

be shaken out. And so I think part of what you're seeing is a normal period where when you go through such a boom, everybody believes that you know it's because of them, and then you realize, in a period like this, who are going to be the true secular winners. And I think Adobe is going to be part of it. So I think the way we think about an opportunity like this is, first, are we continuing to innovate on

behalf of our customers. Second, we have a tremendous balance sheet, We have tremendous opportunity, So don't do anything that is short term focused and continue to focus on making sure that we drive the company long term. But I think for the single product companies or the much smaller companies, it's going to be a trying period because whether it's the war in Ukraine or the potential dark clouds on the macroeconomic environment, a lot of those companies haven't learned

how to deal with that. Now, speaking of innovation at Adobe, you just launched Creative Cloud Express. Most folks know Adobe for its signature Photoshop product, which is facing some increasing competition from Canava light Ricks. How do you plan to hold off some of that? You know, potential market share gains to some of these competitors for this iconic product

in your portfolio. Emily, we created three categories, and when you create three large categories the way we did, whether it's creativity and uh, you know, our vision of enabling anybody who has a story to tell to tell their story. At the other end of the spectrum, whether it's enabling every single business that's increasingly going to be digital to engage with their customers digitally, and in the middle what

we do with document cloud and automating document productivity. Uh, these are massive markets and we're going to win because we created these markets. We have a vision for the market. But the reality is that when you create these addressable opportunities that are hundreds of billions of dollars you're going to see other companies. So the way we focus on it, specifically on the creative side, we are the largest company

in that space. We have an incredible portfolio, whether it's Creative Cloud as you mentioned, and photoshop up, what we're doing to enable the emerging metaverse, what we are doing for people who are either communicators or consumers. So I think it's the breadth of our offerings and it's the depth of our technology and understanding of these trends that will continue to make sure that Adobe is at the

forefront of all of these massive opportunities. You've got five billion dollars in cash sitting on your balance sheet, are you buying any acquisitions? We were just talking about a big potential deal between Broadcam and VM where Adobe always looks for really deep technology and great culture. I think, to your point, what's happened in the market, there will be a number of companies, so you know, we're always judicious and we're always thoughtful in terms of the acquisitions

that we made. We just made a couple of acquisitions that have actually turned out to be a phenomenal one in the collaboration space Emily, where we bought this company called frame Io, which enables anybody who's doing video collaboration to collaborate in a way. We've also bought a company called Workfront that allows anybody who's creating these marketing campaigns

to be far more efficient. So we're always looking. We're very pleased with the portfolio of products that we have in the depth, but we will continue to take a look and our criteria continues to be making sure that there's great technology, that there's a culture match, and financially it is a good deal for our shareholders. All right, Chanton Ryan, CEO of Adobe. Great to have you back with us. Hopefully we can do it again before another two years past. Thank you. Coming up once the crypto

Darling coin based now crashing hard. What is behind the rise and fall of the largest US cryptocurrency in exchange and what does it mean that's next? This is Bloomberg. It's time now for our crypto report, and I want to take a quick look at coin base, which has gone from one of the stock market's biggest debuts to one of its most spectacular crashes, all in a little

over a year. Coin Base seeing a bit of a hike in Monday trading but share still down about sixty six dollars apiece, way down from that three high back in November. I want to get into this all and more with Rebecca Kaida, director of marketing xpt o, which offers global access to crypto finance through institutional trading, mining and investing. Rebecca, what do you make of coin based in particular as a microcosm of what's happening in crypto

more broadly? Well, absolutely, I mean I think that you know, we have to remember that crypto is such, it's in its pre teen phase um as a kind of financial system uh and digital asset class. So it's important to note that volatility is just a huge part of emerging technologies. So what's interesting to note with coin based in particular

is their price to earnings are quite high. Uh and as we know, as we've seen often with the stock market, you can have great earnings, are great financials, and your stock still plummets. And so what I really see here is is negative impacts of the very notorious stable coin you know, failure if you will, with Tera Luna recently

in the last couple of weeks. That's causing a lot of panic, if you will, from retail investors, and then looking at coin base as a as a kind of definition of crypto in the market, it's is seeing some of those um downturns. So how long would you say this crypto winter is going to last. We talked to a guest last week who thinks that don't expect bitcoin to start trading back up for twelve to eighteen months.

I think it's possible, Emily. I mean, if I had an oracle and I could tell you definitively, I would let you know. But what happened equally in crypto is that you know, the lows are are are getting higher and they're getting shorter. So it's kind of the same with the early stock market. Right. We go in these different financial cycles, and you know, they last a lot longer in the early stage and then they start to get a lot shorter. But I'll bet my career that

Bitcoin and etherorum are not going to zero. And what we're seeing right now is just the the impact of some news that's been happening, and even the global markets. Right. I think that as we've discussed, many guests on your show discussed kind of different you know, macro trends at work. The external events that are affecting everything. Crypto is not the only one that's being impacted. You've seen a lot

of tech stocks fall, you know, sevent as well. I think, in depending upon how you judge it, that some of the tech stocks could be more volatile than crypto right now. So how is this all impacting institutional appetite to expose you know, themselves to more crypto assets. I mean, you know, we were seeing that build up to this point, but

our institutional investors starting to get cold feet. Well you've seen Goldman just invested in in Elwood Technologies, which does actually help them, uh, you know, service their clients and institutions that are looking to diversify into crypto. But what typically happens, emily is that you have retail investors who are maybe newer investors, and so they see downturns like this and they panic sel and get frustrated, and then this becomes a huge opportunity for institutions to get at

a more palatable price point. So, um, you know, something that we've seen is some of the largest crypto wallets have been actually amassing a lot more of top tier crypto. So I would say that this is actually one of the times that you know, UM, different funds of folks that have been allocating you know, slowly kind of investing over time. UM, this is a good point for them to kind of get back in at a price that

that is a little bit more reasonable. Meantime, you have venture capitalists looking at funding the next big crypto thing, and I wonder when you look at a company like coin base, is that a matter of you know, just the market or is there also some measure of poor execution there. With coin Bree specifically, I think that, you know, uh,

they've definitely done a lot of hires UM. So when it comes to kind of business execution, I think that, you know, it's it's easy for companies to get into this this place of over hiring UM for lots of positions that they can't necessarily derive a lot of value from at the time. And we've seen that with crypto companies, we've seen that with tech companies, and oftentimes that that can be UM definitely a uh it takes the wind

out of their sales, if you will. So sometimes it can be a little bit about poor business execution UM, but that happens all the time. Unfortunately, Okay, Rebecca Kata x bt O, thank you for joining us. Thank you shaking up office WiFi. It's harder to set up than you might think, and the founders of Meter, two brothers, think it's the next big opportunity in big tech. Meter is a startup that makes all of its own hardware

and software. To that end, it is backed by Silicon Valley heavyweights from Sequoia and silver Lake to vm Ware and Stripe. Here to talk about it all. Co founder and CEO of Meter A Neil Varnasci and Neil, great to have you back with us. So what are the problems with office WiFi that we don't quite understand? Yeah, every business runs on connectivity, right, most companies no longer build their own data centers, but internet infrastructure continues to

be something that's complex, time consuming and really difficult. So well, we think it should be like is similar to a utility that when you go into a space, just like you turn on electricity or water, it just works. And what we're seeing is that every business increasingly is reliant on software and technology, and frankly, we just don't think that's going to slow down at all. So for all of this to work, we really need great internet infrastructure,

a qualit us all of the different market segments. Now you say you want internet service and infrastructure to be a utility, what do you mean by that? And isn't it already kind of a utility? So outside of spaces, it truly is. But if you go inside of a space, let's say you know you're setting up a workhouse, a life sciences lab, retail, healthcare office space, what happens inside it takes months. You have to deal with so many different vendors, and you have to take on the complexity

of maintaining these really old systems. And so what we do is make all of that kind of go away so that customers can just go on with building their own business. More broadly, is there a redistribution happening of how we use WiFi? Given the shift to remote work? More people working at home? I mean, aren't less people

working in the office today? Yeah? We we certainly service customers and offices, but we service customers in warehouses, life sciences lab else or so think about the past two years where we've all ordered stuff on e commerce that comes from a warehouse where it has robots and sensors and computers and so everything runs on the Internet, So there probably isn't a company, a product, or something that we are customers of where they don't run on Internet.

Now working in WiFi. Now, you founded this company with your brother, and I've heard some interesting comparisons to you all and the Callison brothers, who of course co founded Stripe and whose career I've enjoyed following over the last decade. Talk to us a little bit about your story and why you chose to take internet infrastructure on when it could have been just about anything. Yeah, I think fundamentally what we saw was this is a problem we wanted

to solve ourselves. But as we started working with a lot of different companies and talked to companies that are stalwart technology companies, we increasingly saw them ending a lot of time in capital. But even if we take a step back for a second, what's importantness to think about again, We've heard about software reading the world and um technology being everywhere. Internet infrastructure is kind of that underlying bed

that makes all the possible. So I'm sure your kids watch YouTube or Twitch, or you know, we order something or order a car to go somewhere. All of that needs internet infrastructure. To function. So we think it's tremendously important to get that right as technology grows over the next decade. So let's talk about dollars. We know you just raised a big new round of funding, but you know, how big is the market size here? How many billions

of dollars do you think are up for grabs? Yeah, so this is probably one of the largest markets there is in technology. You know, there's been some noteworthy companies for decades now, so you know, rather than kind of thinking about just particular market segment, what's important to look at is the billions of square fee that are all

of these segments that require internet infrastructure. So every single type of space you see as you're driving by or walking down main street, or when you think about a company you work with or a customer of those are all customers that are potential markets. Trusts. Is there a number you'd put on it? Not not really. I think it's in the tens of hundreds of billions, but I

think it just it's increasing. So what's again, you know point earlier I was saying this is where currently it's already one of the largest markets, but it is just increasing every year as all of these other technology companies become successful, and every company becomes a technology company. All right, A Neil Varnasi, co founder and CEO of Meter, We'll keep her eye on you and that big potential opportunity ahead.

Thank you. Before we go, I want to mention two of those big tech stories that broke late in US trading today, Snap shares falling after it cut its revenue and profit forecasts below the low end of its guidance, and part of that lean the company saying the macroeconomic environment has deteriorated further and faster than they anticipated. We also watched Zoom report its results, projecting sales and profit

for the current quarter of that topped estimates. And coming up tomorrow right here on Bloomberg Technology, we'll be talking about all these trends and earnings with Zoom CFO Kelly Steckelberg. I'll also be speaking with Max Peterson, AWS vice president for the Worldwide Public Sector about the future of the cloud. That does it. For Bloomberg Technology, I'm Emily Chang in San Francisco. This is Bloomberg