Bloomberg Audio Studios, podcasts, radio news.
From the Heart where Innovation, money and power Collie in Silicon Valley, nbon.
This is Bloomberg Technology with Caroline Hyde and Ed lud Love.
Live from New York and San Francisco.
This is Bloomberg Technology coming up full chip coverage as TSMC.
Earnings jump, but China risks remain for the sector.
Plus Apple makes plans to license more Hollywood films for its streaming push.
And Bloomberg Intelligence breaks down the odds of a TikTok van under a Trump presidency.
Who bring you all the details?
We want to talk about the China risks with the Biden administration as he's mentioned, and really considering more trade restrictions Bloomberg Intelligence, and with a note saying this along with Donald Trump's own comments on defending Taiwan or not defending them earlier this week in a Bloomberg Business Week interview, could be quote beneficial for regional manufacturers in the US. I'm talking Intel, Global Founderies, Micron, Bloomberg Intelligence analysts cringe
and Savanni's with us. You altered the note and just dissect for us a moment how much geopolitical risks do you think there is affecting some of these names that do have exposure to China.
Yeah, at this point, it's more of a headline risk rather than a fundamental risk. Right, It's speculative at best, so we don't know how much to quantify, but for context, it's important to understand the run that socks has had. Right especially these high flying AI names. It seems like almost nothing but positivity has been priced in. So I think this sort of any sort of roadblock, even if not quantifiable, sort of seems like a good opportunity for folks to lock in their profits and sort of the
valuations to take a breeder. Beyond that, the China risks have been there for the last two years. We have seen sanctions getting increased over time, but when you look at impact in terms of fundamentals and revenues, it's mainly been one or two key large players that have seen the impact. So again, the response to this news, with the most of the sector reacting like that, seems more of a again, headline risk.
At this part.
You notice in your research that these are headwinds for fab less names. But the other name you linger on is of course Intel, and I think yesterday in the program, we were trying to understand the logic here. Intel is trying to grow its own business of being a contract manufacturer for third parties. If something happens politically or in China, in Taiwan, is Intel the only alternative, the only name that would benefit directly in that line of business.
Congen So you if to divide the manufacturing world into the leading edge, which is really where they're chips and smartphone and TC chips get manufactured, and the lagging edge. You know, in the leading edge, there's really tree names that come to top TSMC, Samsung and in Intel, and Intel's main push has been tatered around to really leverage this risk point that hey, if something were to happen in Taiwan or TSMC, we would be sort of your insourcing
champion here in the US. So definitely, you know, such news do benefit them. Again, this is not something quick. You cannot turn off TSMC tonight and turn on and
take all the capacity at Intel. But in the long term still increases you know, if in your risk models still makes you favor regional manufacturers like Intel in global foundry, and speaking of the lagging edge, I think we have a lot more options in that area because a lot of US integrated device manufacturers have their own lagging edge capacity, so there's less reliance on Taiwan in that end, But yes, in the leading edge intel in terms of US and Europe.
I asked that question because for the second time this week, intels up more than five percent in a session where some of the other names TSMC being one are under pressure. Bloomberg Intelligence analyst Kunjan Savanni, thank you. Let's bring in Amy Sellko, now principal analyst at Albright Stonebridge Group, and let's discuss the impact of potential trade cubs, expansion of trade cubs, and Trump on Chinese American relations. I mean, Amy,
the chip sector is absolutely in focus right now. Just respond to what you heard from Kunjendre on their thesis on geopolitics and who may or may not benefit in a Trump presidency.
Well, I think it is really early to say, and I think that's why we're seeing so much volatility because while we have a sense from Trump himself, from his vice president, from his top advisors how he looks at competition with China, the prescriptions that he will use really are unclear to date, based on what the Biden administration
is doing. We are seeing the potential for more curves on American and non American semiconductor products, particularly hardware, going to support China in increasing its focus on technology self reliance a key theme coming out of the Third Planum. That is what we're hearing that Shi Jinping is saying.
We need more indigenous innovation. We need technology to help us build our own semiconductor industry because we cannot rely on an uncertain geopolitical landscape, given uncertainty in the United States and in Europe to key suppliers and of course
Japan of this technology hardware to China. As a result of that, of course, American, European, Japanese hardware providers of China's semiconductor global semiconductor manufacturing are being pressured to restrict what they are going to continue to sell and service in China. That's where so much of this uncertainty is
because the question of how what are the restrictions. Will the United States be successful in negotiating with the Dutch, with the Japanese governments to really expand restrictions on what can be provided to China is the key.
How much do you believe that the threats will become reality. How much do you think that the Dutch and the Japanese will curtailed servicing technology that already exists in China.
Well, I think there's going to continue, of course, to be American industry pressure that not they alone face those restrictions, Caroline and so. While of course US industry doesn't want to see more restrictions on what they can sell to China if there is not a direct national security concern, they right now are unfairly competing against Japanese and Dutch companies that are continuing to sell to China, and so yes, I do think that there's going to be more pressure
to expand those restrictions. I do not think what we were rumored to be hearing about that there was going to be a massive expansion is going to come into place, certainly not in the Biden administration. I think there will be incremental steps to restrict certain companies in China from receiving from receiving more semiconductor hardware products in the near term. The Trump administration, which is what we are talking about here, is the big unknown amy.
It takes two to tango right, and you don't have a crystal ball. But if you take the EV industry as a parallel example, what China did was give large volume subsidy, but it had a limited shelf life. Do you recognize a sort of willingness from the Chinese government to sort of fund their response to any sort of political or geopolitical policy that either administration comes with in November?
Yeah, I think that's the key key point.
I think the Dutch and the Japanese are very concerned, not just for their companies that are providing the technology hardware to China, were they to be restricted, It's not just their profits, it's China's retaliation.
I think Shi Jinping.
Has been extremely clear that if a stranglehold on certain high tech products and services continues visa via China market, he is going to respond. He is not, as he has said, going to sit idly by and watch those restrictions continue to expand. And so the Dutch, the Japanese and the US government have to think long and hard on the kinds of retaliatory tools China has available right now. For example, sport restrictions on graphite caroline to Japan, something
Japanese industry desperately needs. My final point, though, would be China has to weigh its retaliation to make sure the retaliatory moves don't harm further and all ready very very shaky economy in China, well said at the leftfidge it had a few years ago.
You advise corporates, you advise nonprofit clients at the moment, ultimately about.
Business and policy interests.
Can you advise us in our audience about Taiwan about some of the sentiment that seemed to be displayed by an interview of being by BusinessWeek with former President Trump that maybe they wouldn't come to Taiwan's aid. What does that mean for TSMC and for Taiwan.
Well, obviously the silence coming from Taiwan is deafening.
Here.
They are not responding todent former President Trump's Bloomberg interview there. Instead, they're choosing to stand by what the platform of the Republican Party traditionally has been, which is to include Taiwan in it and to say that, of course, the United States and Taiwan have a legislatively mandated very strong relatedationship that does include US provisions to come to Taiwan's aid.
Of course, it's up to the commander in chief. So Taiwan authorities must be worried, but I will say the worry is probably not severe right now because most of the advisors around President Trump, including his selection of vice
presidential candidate with JD. Vans, are very strong supporters of Taiwan, and so within a Trump two administration were that to come to pass, there are going to be very significant conversations around how the United States continues to focus more on Asia than Europe, which is clearly a platform that we're starting to hear coming out of the Republican Convention, and what that means for US policy towards Taiwan.
So I wouldn't be.
So quick to conclude that President Trump is going to abandon Taiwan in the event of some kind of conflict that would really be going against traditional US policy, particularly among the Republicans.
Amy so important to have your expertise. We thank you, Amy Seller, co principle analyst at All bright Stonebridge Group.
We thank you, Ed.
What's so interesting is we see this volatility in the individual stocks today as we question ultimately some of the valuations where we've run to in the videos.
And the like.
Yeah, I think what's so astonishing about the conversation. We just had detail, but we didn't even discuss about another factor, which is the AI driven boom right growth driven by demand for AI accelerator manufacturing TSMC has clients everywhere, and so I just wonder how maybe we'll talk to Jensen about it in a few weeks time. But it's like geopolitics takes away one market. There are plenty waiting the wings to get some capacity, and I just thought it was weird that we're right bring that up.
But then Goldman Sachs's top research analyst today currently saying, maybe you need to question the ultimate demand of AI in the longer term. Will it really drive this productivity group story on Jim Cavolo from some of our colleagues in Bloomberg News today.
Meanwhile, coming up, Apple we know is in.
Talks to license more films from major Hollywood studios.
Look, it's an effort to bolsterous Apple TV plus streaming service being reported by Bloomberg. Stick with us. This is Bloomberg Technology Media News now.
Bloomberg reporting that Apple is in talks with several major Hollywood studios about acquiring more films for their Apple Plus streaming service, which currently features almost entirely original production. There's a lot going on in Hollywood. Chris Paul Mary breaks it down for us. Let's just start on the Apple news for now. Who would they be garnering from? Is it like relief for some of those studios right now?
We didn't report the exact names, but you know, you can imagine sort of all the all the big folks in the entertainment business, whether it's you know, Universal, Warner Brothers, Comcast, Disney, all of those players, and what's going on here is is Apple TV originally had a strategy to focus really on high quality original programming. You know, it's had some, for sure hits, Ted Lasso The Morning Show, but it's not as watched as some of the other big players
in the industry, and in particular they're film Slate. You know, they made a big billion dollar commitment to make original movies and to put them at least the first in theaters as well. Hollywood applauded. But you know they've had more than their share of Dud's our Guyle big action movie two hundred million dollars. It's one I just saw this weekend, fly Me to the Moon. Nice movie, but
you know, not really burning it up. So this is a shift in strategy to try to get more library content on there and and build the audience for Apple TV.
That's probably, Chris, what Netflix has, right. You know, I was actually watching World of Warcraft the other day on Netflix, which is a twenty sixteen film. I won't give my review of it, but that's where you go to, right. Netflix has this sort of endless catalog. How much volume dollar wise is Apple going to have to put into this to like fight back?
Numbers on Apple's are scarce to come by some of the other operators, but.
We're seeing this across the industry.
We're seeing both There was originally the theory was all these streaming services going to have walled gardens in their own content and it wasn't going to be sold elsewhere, And that's completely broken down. Now we have shows on multiple streaming services TV outlets. In a way, it makes it easier for consumers to find stuff, but it just it does devalue away the exclusivity of the programming.
Yeah, what continues to hurt is legacy TV. Chris, And you're out with some of that ft reporting today that maybe Warner Brothers, Discovery and David saslav Over at the company are thinking of splitting up studios streaming from the legacy TV.
Why well, first of all, there's stock prices just in the dumps, just a real terrible performer.
Either.
They put these two companies together, Warner Brothers in Discovery with these big plans to really beef up the max streaming beef's business.
And it just hasn't worked.
And David Szaz left the CEOs sort of acknowledged that this month at Sun Valley he said that the industry's fisting to need more consolidation. Now, whether this particular split up is the way to do that getting a lot of skepticism from analysts or the problem is that the traditional TV networks, although they're declining and we're talking about you, TNT, CNN and that, are still the cash generators, and the studio and the streaming business aren't making as much money
and need the money to invest in new programming. So with forty billion or so in debt on the books, how that's going to rationalize itself is very difficult to figure out, and that that's why analysts are.
Skeptical that this is the route. But I think the stock is up.
Because people are applauding that the company recognized that it needs to do something different.
One fors us love to think about bloom Best Chris Palm, Mary, thank you very much.
Time now for talking tech.
First up, Publicis It raises its guidance. The advertising agency posted stronger growth in the first half as He's net revenue growing by five to six percent this year, up from four to five percent previously. But the company is announced earlier this year that it would attempt to strengthen its data analysis and artificial intelligence capabilities as in an effort to combat the slump in the advertising industry. Meanwhile, India's Emphasis also raising its sales forecast for the year.
Now the company expects revenue to grow three to four percent on a constant currency basis in the fiscal year through March twenty twenty five. Because a sign that clients are gradually increasing tech spend, Who's to buy a resilient global economy. The battle for potential ether ETF assets is
already on the way. Even as the funds have yet to launch issuers, including the Black Crocs, Fidelity, and Vesco, they're already coming forward with how much or how little they're going to charge their respective ether ETF said.
Okay, let's dive more into that with Bloomberg's Isabelle Lee, who's one of the bylines on our reporting about it this morning. It ranges from zero point two percent fee to two and a half percent fee on the gray scale ethereum trust, but that one has no conditions attached to it. Essentially, what does all that mean? What does that tell you, Isabelle?
So this few r has been really going on for a while in this highly competitive space because theoretically, the lower your fee, the more attractive it will be to issuers. And yesterday was important because a lot of issuers filed what they call an S one and that revealed the feast and we went through all of them and the face range from nineteen basis points to twenty for contact.
That is very cheap. They're cheap, as some would call it. Yes, Grayscale is on the higher end at around two and a half percent, but that's an exception because they're trying to launch or to convert their trust into an ETF. But all that to say, these funds are really priced at such a low fee, and in fact a lot of them have conditions. For instance, black Rock will have a partial waiver in the first year. Several said that
in the first six months it'll be free. And I think issuers really learned their lesson because during the Bitcoin ETF a lot of them really just lowered and lowered as each day passed and even canceled leading up to the launch. But for now, in the first get go they were already cheap.
I mean, I don't know if they did learn the lesson because they're really cheap again the waiving fees.
They're saying you can be free for six months, but what pats are also anticipating is ultimately less inflows this time round. The problem with eth is that you could stake it if you're not putting in an ETF, and therefore that's an opportunity cost.
Right Exactly, we have City Group expecting four to five billion launch for the first six months in inflows and for Contact black Rock, so that's only one ETF called in one billion in the first four days and as a whole now it's been seven months, but then we can see sixteen billion in total for the cohorts, so it's really a weak demand. And to your point, why would you buy an ether ETF. So that's really it's kind of a harder sell because for a bitcoin, yes
it's digital gold, hedge, cans inflation, you buy it. But for Ether, the participants really want it for staking, so having it in a trust and the fund is really a little questionable for others, so the demand is less. And also those who want crypto exposure, the big Wall Street firms already got it in January, and it's a bitcoin. It's the biggest coin, it's the most stable, it's the most established, So why had your bets on something smaller?
Although as thing to think about is Ether is kind of the leader of the alt coin world, so this may pave the way for smaller alt coins. Who knows, we'll already have Solona filing.
So yeah, this was questioning around Solona, and ultimately the question around Selana is because.
What's the SEC view it as?
And I think this is the issue with the staking, right is the SEC it's just not comfortable that it ultimately isn't a security if you're able to put it aside and raise funds and yield on it.
A lot of issuers already made concessions they were removed Staking because this racisn't do a question is Ether security, So they really had to compromise on a lot of things. But then if you still ask the Ether boss, they're just happy, said there's going to be an ETF out there. It's, you know, a major milestone in the crypto industry, second milestone.
So there are pros and cons of it.
But it's definitely a landmark if you will think about it.
Slowly but surely, yes, us.
Catching up with Europe and giving access to these sorts of Canada and Canada, Well said Isabel Lee, with all the take as we look towards what could be of course that eth ETF going live as soon as well Tuesday next weekend.
Welcome back to bluemog Technology.
I'm Caroline Hyde in New York and I made Ludlow in San Francisco.
Look, what is the.
Ability now of a TikTok ban if Donald Trump wins the White House in November.
Well, some analysis have been done by Bloomberg.
Intelligence crunching those numbers in its latest report. And I'm pleased to say we're joined by Senior Technology and as Mandate seeingh who sort of went through the tea leaves of what was being written in the Bloomberg BusinessWeek story that interview with President Trump former president, and ultimately it feels as though maybe he's less against TikTok, but because of Meta and because of US companies.
Yes, And look, his views are pretty clear, even though they have changed since the time he was in the White House to where they are now. But at least he has said it clearly that he doesn't want to
ban TikTok, and because his ratings have gone up. I mean, we are in an environment where, you know, every day the poll ratings are changing, and I think right now the market is behaving as if Trump was to get elected and he is against the band, even though the law has been passed that TikTok needs to get divested within the next one year or it will be banned.
So clearly the market is saying otherwise because Meta has gone down, Snapchat has gone down, and the stocks have reacted that you know, the banter isn't going to go through. And look, he's driving the campaign through TikTok. I mean, Trump is on social media on TikTok. That's the one
thing you wouldn't have expected. So he's getting a lot of donors to his campaign from TikTok, and we know the swing voters are probably on TikTok, so he can appeal to those TikTok users by telling them, hey, you're not banning this platform anymore.
True social TikTok.
Who would it ultimately affect the most in terms of market capitalization, in terms of user figures, if indeed TikTok stays around, has it got to be matter or there others?
Yeah, So our initial analysis was TikTok has almost you know, one third of the US adults users, more than sixty percent of people under the thirty age group, and they spend almost eighty minutes a day.
Where did they have time?
They apparently do, But the thing is if they were if TikTok was banned, then you know platforms like Snapchat that has a lot of video content, short videos, YouTube shorts, Instagram reels, they are the three that will benefit the most because that eighty minutes will get split into you know, wherever people can spend their time, even ruad blocks or Netflix, because at the end of the day, it's a zero some game.
But they're not just get to talk to people in real life. They can find it.
I think that's where they consume all their news and all their content, so they'll spend time on social media. Question is where do they do that?
Yeah, man, this is your research. It focuses on TikTok, But you know that the public comments by former President Trump about his kind of logic that if they ban TikTok, it kind of opens the door to Meta and it's wide range of properties being all encompassing kind of explains to us your process how the sausage is made, so to speak. But also I guess the next research coming from you is the risks to met if Trump were to end up in the White House.
Yeah, I mean, look at the anti trust risk is there for all these large platforms, and specifically in the case of Vetta given it owns, you know, three of the most popular websites where people spend most of their time, and there's always been that concern against divesting any of those platforms. So clearly Meta is the most exposed on that front. But I still think, you know, when it
comes to Trump, there's always volatility and uncertainty. You know, even the TSMC comments like the whole Silicon Valley supported him, and now you're hearing you know the comments around TSMC. So there's always that uncertainty associated with you know, President Trump, and it could change. The opinion could change, you know, a few months from after he gets reelected.
If it does.
Indeed, Mande saying of bloem Meg Intelligence, thank you so much. And look, maybe it's not just the words of Donald Trump but also his new running mate that are being passed at the moment, JD Vance and his ties Silicon Valley and venture capital drawing praise from some in the community.
Take a listen. I had a fantastic experience with JD.
I worked with him for about a year when he was just starting out in Silicon Valley. He's going to be good at PRIs Silicon Valley. He's going to be good for the country because he is pro growth, he is pro innovation, and he's also pro eliminating those regulations that strangle industry, that strangle growth.
Let's get the take of Teddy Goff, co founder and managing partner at the strategy of marketing agency Precision, which advises world leaders. But you're also the digital director for President Obama as a re election campaign, so we can garner some of a political affiliation from that, Teddy and I want to get your take on what it means to have potentially a venture capitalist in the White House.
How much do you think that there will be real changes to policy making for innovation of small companies.
Well, thanks for having me.
You know, first of all, I think the most import thing is whether there is a change in administration or not. You know, obviously, as you were just talking about in the previous segment, when it comes to former President Trump potentially future president Trump, there's always a degree of volatility, uncertainty, there's always palace intrigue. It's not exactly clear that his vice president is going to have all that much influence over him.
Certainly his first vice president did not.
But you know, I think it'll be broadly good for much of the tech industry if j Devance becomes vice president. He's a sort of of that community, or at least in the past few years in his career, and he shares some of their interests, I think, particularly with respect to deregulating AI and cryptocurrency. I do think it's worth keeping in mind that the tech industry is non monolithic.
There are deep divides within the tech industry, and you know, by definition, the Republican Party isn't in lockstep with them on all of those issues. So, you know, I think when it comes to deregulation, tax policy, AI, cryptocurrency, there is you know, some degree of consonants between what a Jdvans wants.
And what much of the tech industry wants.
But when it comes to Section two thirty, privacy, even competition, to some degree, they're going to be at odds. And so you know, I think this is going to be good for the tech industry in certain ways and you know, bad for them and others.
Teddy, Good Morning's ED in San Francisco. Let's talk a little bit about TikTok. You just heard our analysts Man deep sing outline a thesis not just as a means of political communication, but a point of policy. How much do you think the American voter cares about TikTok? What may or may not happen in either outcome. One hundred and seventy million Americans use TikTok, and we always say on this show that many of them that use it quite like it, and so I just find that interesting.
It's a world, you know, and I wonder how critical you think it will be in this presidential election cycle.
You know, the reality is that, you know, we're a country where you have essentially two options as to who they vote were, and you've got dozens of issues upon which to assess those options. So it's difficult for any individual issue to change people's minds. Even abortion may not be a decisive voting issue for all that many people, as you know, kind of dominant in the culture as it is. That being said, elections in this country tend
to be one on the margins. There are certainly a lot of young people who don't want to have their TikTok taken away from them. It may impact some of their votes, but again, you know, they're they're looking at all of these issues and this you know, kind of unprecedentedly deep divide between the you know, between the two parties, and you know, I think there probably aren't all that many for whom this would be the one issue that
gets them from from one side to the other. If there is, though, you know, I think it's going to benefit Trump, you know, because you know, these young people who love their TikTok don't want to take it away, and he's the one guy saying not to do it and.
Also using it.
And I'm interested as a digital director and port formal life and still advising with precision.
How much should you be leaning into.
Various parts of the social media spectrum right now?
How much also have you got.
To be thinking about artificial intelligence muddying the way in which come individuals consume that content.
Well, I think every candidate for office has got to be on social media, and I think putting to the side whether you do or don't assess TikTok as a national security risk, and obviously that's a tough thing to put to the side. It's an absolutely critical communications platform, as you were just saying, it's where almost all of America's young people spend their time, you know, a huge
amount of time. They're not necessarily their for news, but they're going to get news while they're there, and more broadly than just political news, they're going to get cultural information. It's going to shape what they think about, you know, the culture wars written large and so you know, Democrats Republicans too have to have to play there, you know. I think though the truth of the matter is that no individual account is going to be able to get
that much traction on TikTok. Let's just not how the platform works, and there's too many creators, too much content, and too many people spending too much time. So, you know, the question, I think is more broadly than just you know, one account. How can political movements generate lots and lots of voices that you know, that can accrete to lots and lots of you know, eyeballs upon their you know, upon their.
Point of view, Teddy, you advised Obama on social strat in his reelection. The weekend's events, the assassination attempt showed the risk of social media, the spread of misinformation. Does ire the campaign have a handle on how to use it safely?
Well, my opinion, of course, is that one of the two campaigns has no interest in in using it safely. And I don't want to come across as a as a hyperpartisan, but I just think there's lots of evidence to that effect. You know, I think, you know, the truth of the matter is, I think that disinformation is really really hard to counter, and there's been lots of academic research into this, lots of you know, political experiments done, lots of corporate experiments done.
You can try fact checks, you can.
Try you know, warnings, you can try, you know, all the various sort of disinformation mitigation techniques that are out there, and the fact of the matter is it's still powerful, and once it's out there, it tends to sink in people's minds, and more broadly, it tends to just make people question what is and isn't true. And I think the consequence of that is they tend to believe that things are true that they want to believe, and disbelieve
the things that they don't want to believe. And there may not be great ways to counter individual pieces of misinformation. So what you've got to do as a campaign is just try to get your story out there as best you can. You know, you keep playing whack them all with different pieces of disinformation. They're they're again, they're just
too hard to counter. You've just got to have the most forceful, effective, proactive message you possibly can, and you know, obviously hope that that is to you know, to kind of overcome the effects of the disinformation that you're going to have a very tough time countering.
Teddy, We're out of time, Teddy Goff, co founder, managing partner A Precision, Thank you now coming up on the show, we're going to be joined by Chaun Tang, founding partner of the Berkeley Skydeck Fund, to discuss the future of Silicon Valley and global startup cultures. Coming up next the
Boombog technology. For today's VC Spotlight, Let's talk about startup culture with Sean Tang, founding partner of the Berkeley Skydeck Fund, which has eighty five million dollars under management and supports entrepreneurial activity through Berkeley Skydeck, which is you see, Berkeley's largest and most prominent accelerator. We're familiar with accelerators here in the Bay Area. Here in San Francisco, Y combinator Jason Calacanis has a similar organization, and we are familiar
with Stamford Grads GSB. Going into tech, let's start with let's say we're less familiar with what Berkeley's doing, but it is massive the volume of startups that you are founding and supporting.
Yeah, Ed, I want to say, I'm extremely excited to be here and share a little bit more about what we're doing at Berkeley. What we've come to realize that we have a platform that's a little bit different from what you would expect our first look, you would think the official incubator platform for a school is meant to
bring out the talent and the technology from campus. About six years ago we had this million, this amazing insight that what we want to do is turned our entire ecosystem into a giant platform to build companies in general. So our doors are now open to founders around the world. We're not only inviting our our own students, folks from Europe and beyond.
Interesting now put into context therefore the amount of companies that are being birthed where they're going on to follow on funding because the statistics are really pronounced.
Yeah, I think that's exactly right.
So early stage investment is an extremely challenging thing to do. We have four thousand plus companies that are choosing to apply to us every single year. We're an extremely exclusive program. Only one percent of the four thousand that apply are being picked. Of the forty that we then invest in, only twenty will raise from institutional investors. Of those, only
ten will go out and raise a and beyond. We have a giant portfolio though, of two hundred plus companies that we've invested in, and on the screen what you see are some of our huge wins.
Last summer, Gary Tan came on the show and talked about the y Combinator S twenty three batch, and it was interesting because they made it mandatory to be in person in San Francisco for that class onward, do you have any similar rules? You know, you talked about attracting talent from outside of the Bay to the Bay. What is the point of attraction?
Absolutely, let's talk about why a founder wants to come to us as opposed to YC or to one of the other.
Brands that you have talked about.
Berkeley is all about giving them introductions to the ecosystem here through our grads, our students, our lums, our faculty. So when they're in person here, the exposure that they get to the top corporates, to the top investors is unheard of. So what we ask is that they are here in person for most of the six months, they live here, and they work here. In a lot of cases, they even move their families here.
Let's just talk about the wins and what industries they're shaking up. I mean, I'm going to take a wild guess that artificial intelligence is pretty prominent in some of the current intake.
You're completely right, Caroline.
What we've seen from venture as a category, so AI is changing all of our lives in an amazing way.
It's a disruption a VC. That's what you want to see.
You want to invest in the industries and the products that will change all of our lives over the next ten years. So we are extremely excited about all the products that will come out in that category. About two years ago, we were very early to that game. About ten percent or so of our portfolio back in twenty twenty two fell into that category. Now in twenty twenty four, ninety percent or in AI.
John, it's great having some time with you, John Tang Panning, partner of the Berkeley Skydeck Fund.
Keep an eye out for some of those.
Today.
Another announcement from open ai the debut of GPT four O Mini. Now it's the newest model, it's smaller, it's cheaper variation of the GPT four O and the.
Company's most powerful model yet.
Basically it's for prelacing the older one GPT three point five turbo model. Let's bring in Bloomberg Seth Fehman for more and look Seth Yay. Cheaper, smaller, I mean, is it all about a race to like being the most accessible.
At the moment.
Yeah, I mean, I know it's super exciting, and this is not GBT five. This is not some breakthrough model. It almost feels a kit to smartphone manufacturers releasing a wider range of pricing tiers. This is designed to appeal to a broader mix of developers and business customers who may I need the most expensive, the most robust, the largest, large language models.
But it's not.
Gonna, you know, change the world at the moment with the breakthrough seth.
When I hear GPT four O Mini, my brain just goes straight to like iPod Mini, I'm never going to be able to get over that. Open Ai always introduces these kind of latest models in interesting ways. I think people get some early access to it, right, sometimes journalists, sometimes developers. Have we got any feedback on how it's working and what it can do?
Yeah, I mean I think a couple of companies got access to this and we heard that it's being used to kind of go through received and pull out you know, interesting actionable information or help to respond to emails. But again, this is just going to feel like a bit irrigant from what we know that's already out there. We have not personally used it yet, and I think it's really important to also note that this is a smaller version
of a model that largely is not released yet. The most high profile features from four to zero, you know, the ability to process audio and visual information in real time, are really not out there yet because Opening I is working through safety issues. So it's a smaller version of a largely unreleased prior model.
And of course there was a fair amount of backlash praft the previous announcement Sky for example, where are we on.
All of this?
Yeah, I mean we're still waiting for them to start through it. I think they've changed the voice in a particular one that you're referring to, but right now they're still doing a Red Team safety review of the larger four O model. We are understanding what the smaller one is. It will eventually have many of the same features, but as it stands today, it's still a work in progress.
Seth, we love it. Thank you very much for joining all things four Mini. Numbers and names keep evolving. Meanwhile, we're just going to take a check in on the market, aren't were, Because look, we are.
Taking another hit today yeah, end of the show, but the Nazaq one hundreds down almost percent on a two day basis, its biggest two day drop going back to October of last year. Recurring themes former President Trump's comments to BusinessWeek concerned about the chip sector competition US and China. I think it's a story that will stay with US. Caro from New York City and San Francisco. With a pretty ugly looking stock chart on the screen, this is Bloomberg Technology.