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This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.
I'm Carolin Hyde at Bloomberg's world headquarters in New York and I'm Ed Lovelow in San Francisco.
This is Bloomberg Technology.
Coming up in the next hour, unpacking those earnings.
Door Dash delivering the.
Goods, but while the stock pulls back, while DraftKings is betting big on the lottery. Conversations with both companies this hour.
Plus super Micro drops ending a sizzling rally that put the server company on a record breaking week. We have an exclusive conversation with the company CEO.
Coming up, and AIICEO Sam Altman is looking to get the green light from the US government Tori's billions for a massive venure to boost global manufacturing of those AI chips. Will bring you the story.
There's the hearing now with door Dash. I find DoorDash really interesting because it has performed really well. The technology story in the quarter was new product lines doing more stuff on the platform, but it was a high bar quarters when you look at their guidance for the full year in terms of gross bookings or orders. It seems strong, but clearly the stock is down ten percent.
So what is it that the street's not liking.
It's hard to tell, and perhaps it's that abit DAR guidance not surpassing it for once. We're staying with Doordat stick in with a CFO Ravi in Ukonda joining us for those fourth quarter numbers, and I start with, well, the tough one, Ravi. The takeaway is not quite good enough. Can you talk us through perhaps the adjusted a bit DAR number, the concerns creeping in or is it just that your stocks performed too well?
Of late?
Twenty twenty three was Tulie transformative year for us. It was an inflection here for us, both from a growth as well as a profitability perspective.
We've truly become a daily habit, more users.
Than ever before or ordering from more categories than ever before.
And at the same.
Time, the business is doing really well where ibiddies three times more in twenty three compared to twenty twenty two levels. And what we are trying to do is continue to drive innovation on the product front, Introduce more products, introduce more features where we have users ordered from more categories across thirty different countries around the goal.
You've helped that net loss particularly driven down by efficiencies, particularly on the logistics side, Ravi. But what therefore for the bottom line to meet your guidance, your own given guidance for ABITTA adjusted EBITDA going forward, what do you need to do?
Do you think.
Our goal is always to drive more users to the platform, continue.
To order more.
Profitability in our business is driven by growth. We saw that in twenty three.
Our goal is to continue to do the same in twenty twenty four.
And at the same time, if you look at our operating expenses, they've been relatively flat for the last six quarters while we continued to drive revenue growth north of thirty percent.
When I look at twenty twenty four, our goal is.
Going to be the same, which is we're going to drive users, We're going to drive order frequency, We're going to continue to drive leverage from an overall operating expense perspective as.
Well, Rabbi, there are loads of names on the street that are saying there's nothing wrong with the report, nothing bad in it. Maybe they look at the four year bookings guidance and say that it indicates maybe deceleration in the back end of the year. So let's put the numbers to one side. What does the world look like right now to door Dash, both in terms of like driver supply demand from the consumer corporate demand.
Consumer demand on the platform continues to be really strong. If you look at twenty three, in a year when people thought consumers were pulling back, our users set a record high.
Our scale at thirty seven million.
Consumers globally continues to order with us every single month, and usage levels have also increased, where our order frequency has reached a record high. And from a supply perspective, we've been really well supplied. Supply has been as good as been over the last couple of years. When you
look at the consumer demand, it's really strong. When you look at the supply side metrics, it continues to be really strong, which is allowing us to drive growth as well as the bottom line profitability that you're seeing in the business today.
Robbie, I always think about though, DASH it's like a really big software company and we don't really have a talk about that side of the business, right the creation of a marketplace, but also you're essentially offering software to third parties making their back end. How is that side of your business doing.
Our platform services business, which is the software aspect of our business, continues to do really well. Our goal is to be with where merchants want us to be. We want a power merchants with their own.
First party channel. We offer a product called Storefront, which powers.
Merchants' own websites, and at the same time we are providing our logistics engines for merchants in order to help them augment their own service as well.
You're not just serving merchants in the United States. You made a key acquisition, and I'm thinking of Walt in particular, the effort to go into national RAWI do you stay in the countries you're in and expand from there, even though that perhaps not as populated as others in Western Europe? Or do you look to acquire or build yourself elsewhere.
Today we are operating in about twenty eight countries outside the United States. When I look at our international business, it's going really fast, sometimes even five to six times faster than peers, which is allowing us to gain share in virtually almost all of the markets that we operate in. Even in the markets that we operate in today, we are just serving a small fraction of the users. We
have our hands full with our existing markets. We're going to contain new to innovate in those markets by offering new products. We're bringing grocery to many of the inter national markets where the penetration levels in some countries are even higher than what we're seeing in the US. As always, our goal is to drive improvements in selection, drive improvements in quality as well as affordability across all the countries that we operate in, Tonet, and let's talk.
About that affordability. Tony also echoing that then, really twenty twenty four is about making sure that the service is affordable. How do you do that, Rabi? When we've got, you know, still relatively information re environments on here in the.
US, affordability is a key strategic priority for US and top of mind today. More than half of our users do not pay any delivery fee. Almost eighteen million subscribers on our dash Pass program, and we've lounched that program just about five years ago, and we've saved consumers over ten billion dollars. And at the same time we are
innovating on the product side. We're really proud that low income families can use government subsidies to be able to order groceries on the platt and this is our way of giving back convenience, value and time to our consumers.
Robbie, let's use free cash flow as a kind of strategy conversation. You know, you did really well twenty twenty three, but you know, carolinees bringing out some really kind of big points. There's a lot of anxiety right about credit card data. And I bring that up because at some point the consumer might go away, and like your your industry peers, you might have to say we need to
do more discounts, incentivizing promotional work. And I'm assuming that that does impact free cash flow going forward.
Free cash flow is a really important metric for us.
If you look at twenty twenty three, I'm really proud that we generated over one point three billion of free cash flow, which, as you pointed out, as an important help metric for us and investors when we look at the overall health of the business. Our focus has always been on product as well as innovation on in terms of technology.
I mean just a few examples.
The way we're driving growth is today We have more than one hundred and fifty thousand stores that are outside of restaurants. Virtually, when I joined the company a few years ago, there was no stores that are grocery related on the platform. Our goal is to bring technology, bring product innovation to the thirty seven million consumers.
We have on the platform, and that's what's going to drive both.
Growth as well as profitability in the business for us, which ultimately what RABI.
What is the next technology frontie, what is the next new product for door Dash.
We are operating in three large segments, Restaurants, grocery, and international, each of which are roughly about a trillion dollars, where the penetration levels are still very very early. I'm excited about the progress we've made, but we continue to drive more in terms of adding more categories, adding more selection, which is content on the platform, while making the product more horrible.
As well as high quality. If we continue to.
Do that, we're going to drive more users, have them ordered more with us, which is ultimately going to drive.
Pro actibility for Dash.
CFO Ravian a kind of great catch up with you here on the program.
This has been Bow Technology.
Super micro stock has been on a roller coaster shares, whip sword in volatile trading today, there anything to derail what's set to be or was set to be the server maker's best week on record. I'm delighted to say super Micro's founder, president and CEO, Charles Leang, joins us now live. Charles, good morning to you, and welcome to the program.
Let's start there. Okay, let's just get it done.
The store one has been on a good morning, the stock has been on a wild ride. Is your company fairly valued.
Years?
I mean, I said, you know, we deliver the based generality AI playform in our world, especially in terms of time to market or enable new technology available. We are able to deliver new product to the market, and we deal in a system debl.
Or re scale. We call our rec program play.
When casone we see they are ready to be online, they're programing to.
Cable, the cable and the power cable, and then they are ready to be on nine.
So casone like good quality, time to market and ready to run avantage.
Charles, there's clearly a lot of excitement in the market that whatever is happening in AI infrastructure investment. You are a core beneficiary, but one of the questions that Caroline and I get for you consistently is what is it that super micro does. There's any different from your biggest competitors names like Dell, Hpe.
Very good question. Yeah, I've been spatial first. We have a very market company since thirty years ago. I founded a company Shivomanco. We use building Brock solution, a matriology design to build our server to build our total solutions, and the building Brock solution enabled us to design more efficientcy with better quality, better inventory leverage, and better a service efficiency. That's why we are able to deliver new technology time to market earlier than adults.
And plus our two global.
Company, we have an engineer working Samos Bay Area and also a pig team in Taiwan, so we two.
Team Asia and USA.
So we are able to design more efficiently than others basically, and.
We can see for our radio audience. We can see all the products that you make behind you and I'm interested, Charles, the scale of the market size here, the total addressable market? How big can it be? How big get chunk of the pie are you're going to get?
Oh?
Yeah, that's another advantage we have with design, protum barrier and manufacturing barrier and global as well. So I mean we open with Cosmo from design stage vedidation stage, and here we ship the Cosmo MACADM problem play. And yes, we have a huge capacity ready now in Silicon Vedia alone we are able to build a four thousand rack of months or equal to about fifteen thousand systems per months, and in Asia in Europe we also have a per thousand capability there. So basically we are able to build
a enough server for our customer. But now, as you know, the shortage, the chip shortage, so once we have a more surprise from the chip company in media, then we can shiver more to customer.
Let's talk about the chip makers being videos. But you're kind of agnostic here, right you take trips and mentally take chips and inn video.
What are your relationships like?
Okay?
Indeed, we both companies are founded in nineteen ninety three, so both companies are thirty years old company. We start to work together almost since day onide, so we're thirty years relationship, engineering partnership and then go to market, define that market, that's speak.
So we have been at working medic closely. However, we hope they have a more cheap.
Available, Charles, do you have a number, a dollar value for the total addressable market that you see for your company in the context of an AI infrastructure build out.
You know, were always facing to pick back older. So the market size is growing asid you know, aipoom. Basically they as a start. We believe the market have a big loom to grow a lot of our integry leader Hybular seven feed in so as today our Protusian capacity can support our revenue up to twenty five billion dollars for example, but we need a more chip like why he hasn't mentioned. So again, the market continued to grow and we continue to get mac jal because of a bitter product, because of red.
Scale program play.
So we are continuing growing our Patussian capacity in United State and globally as well.
For a Bloomberg television and radio audience were speaking to super Micro CEO Charles Liang. Charles, when we said that you were coming on the program, our audience had many questions. One of them is about the SEC action taken against your company in August of twenty twenty. The SEC charged super Micro and the former CFO of the company with what they call widespread accounting violations and some numbers presented
by the company. Could you update our audience in your investor base on where that process is and if you've put those concerns behind you.
Oh?
Yeah, those concerns have been behind us for many years. So first so we are study detail.
Hey, well we can.
Improve during that few years, and then we are add a more telling, more expertise like our new CFO debut Wagan.
So we have been improving.
Our seism and today our system maybe I can say perfect in concern, but have been much stronger than before ever and we are continue to improved.
Thank you.
I'm interested in Therefore, when you see the stock market move, the anticipation of growth, the fact that you're seeing, well only one current analyst on your stock is saying sell after the huge rally that you've had two and fifty percent just this year alone, what do you do as the leader in the face of that, of that bullishness? Do you start to sell your stock? Are you starting to buy more of it? Is some of your members of your boardermen doing.
I guess the most important product again, the market demand is so strong and in turned out we have the base of the product. H non jazz technology turn to market, but quality and application optimized.
We sat our operating book solution.
We are able to custumomize our system easily to specifically optimize for customer okerlow for theirs.
In the environment, that's a matter.
For air couting, free air cooting or the cooling. So oh, those make our product really popular around the market. And I believe we are continuing to gain max jail and uh continue to grow.
So it sounds like you're long, Charles. I mean I'm interested in well, your expertise. Let's put it in geopolitics, in global supply chains and the fact that you had to pull out your manufacturing from China previously because of ultimately the Chinese intelligence services inserting malicious components into your server and motherboards. It was like the story of twenty eighteen.
How do you see that restriction on supply and the ongoing relationship between US and China now and affecting your business?
Okay, I mean we are USA company, located in the city company, so we follow the national as though country. The compliance beveryware and that's number one. And then we try to service CASMO Global as much as we could, especially customer in the USA. So today most of our production facility are in USA and Passio in Taiwan, and we are debtap in a new campus in Malaysia. So of Podus security dibility supply chain, I believe we are in a one past the position.
Just neine more of those chips, Charles m. It has been great speaking with you. An extraordinary share price move and great to have some time with you today to see the product behind you as well for our TV audience, with our radio audience, thanks you for your time. To super Micro CEO, Charles Leangler. Apple, where is it with
its AI capabilities? They've been racing, in fact, to near the completion of a critical new software tool for app developers that could potentially rival Microsoft Get Help Copilot, and according to sources, it could be available to third party software makers as early as this year. Here with more of course, the man with the scoop mark them and we're pleasure to welcome you as always.
Just talk us through.
We'd all been waiting with beta breathas to ultimately how Apple adopts AI.
Yeah, thank you so much for having me.
So twenty twenty four it's ther of AI for Apple Generative AI in large language models. To be specific, the company is working on several new artificial intelligence initiatives to run on both the iPhone and the Mac. And one of the most important things is setting your sort of infrastructure and foundation to integrate AI.
Into your products.
And the most core thing you can do is add artificial intelligence to your programmed right tools. That's x code, that's the software used by developers inside Apple and outside Apple, so they'll be adding AI to that.
I'm really interested mark on the pressure that Craig Feederigi's under because if you read the detail in your story, which is terrific by the way, you know the boards was given a demo of the latest and AI at the end of last year and they've almost real They basically said, you three key personnel, give us the product.
Yeah.
Craig Fedorigi, he's Apple Senior vice president of Software Engineering. He's really taken bold by the horn here. He's a huge proponent.
Of LM's and generative AI.
When chat GPT started to hit the market a couple of years ago, he was the one really pushing and investigating his Apple went to miss out on this technology. Does Apple need to integrate this technology? And so Federighi, along with Apple's Cloud Services organization as well as the Artificial Intelligence Organization Right run by Eddie Q and John gen Andrea. Specifically, those three groups have been working together on these Genai initiatives, with Federigi implementing it into iOS.
The Jenai the underlying technologies obviously developed by Apples AI group, but it's Federigi who's consumerizing that technology, and they plan to release Status part of iOS eighteen this year, which I expect to be one of the biggest updates, if not the most significant update in the sixteen year history of the iPhone.
Bluembo's Mark German ahead of a game, Welcome back.
To Blouebog technology. I'm Caroline Heid in New York and.
I'm ed Lovelo in San Francisco.
Go to apply materials chip equipment maker forty five percent of revenues still coming from China, but their signals were really strong, Carrow, and we're basically saying, Okay, if this is the leading US maker of chip equipment or chip making equipment and they're getting orders, what does that mean about the investment cycle in twenty twenty four and what does it mean about end markets? Is actually finally a positive sign in the chip space. Maybe we should dig into it.
Let's do that. We've got the perfect guest, Janet Roy, head of market analysis at RBC. Ruined Dolphin and Janet, great to have your real semiconductor expertise here. Where are we in this cycle?
What do you read.
Into applied materials and ultimately the forecast looking pretty rosy?
Hi, thanks for having me.
We're pretty positive on the semiconductor cycle. I think right now we are seeing bottoming out. We saw that from the Applied Materials Earninge's results and aside from BET, we also have previously seen a PSMC is and they're also showing the signs of the end of the stocking cycle and also a strong demand for AI chips.
So I think this gives us.
More confidence on our conviction on Wollershviel on the semiconductor sector. So that's the cyclical side of things, and the structural side is very exciting obviously with AI in the key driver's seat. And also I think there is a lot of needs to build out the AI infrastructure with a lot of upgrades, more sophisticated chaps, etc.
So I think in terms of.
The semiconductor manufacturers, the founderies, they are going to benefit from these trends, regardless of the end Byket.
And we hold our breath for Wednesday. Video comes with its numbers, Janet, And I'm interested. We were just having a conversation with Charles Yngg. He's, of course the CEO of Supercomputer, super micro Computer, and I'm interested in his like ultimately the infrastructure and he needs the chips. He's saying that there isn't enough supply. Where do we stand on this push full of supp demand dynamics?
Yeah, so I think right now there is clearly a lot of demand out there, and if you look at Navidia, there's no shortage of demand. I think it's more about supply capacity problem. So I think that that is the reason why we are more positive of the you know, the equipment manufacturer, the semiconductor manufacturer, the pigs and shovels play because the world needs all these air chips and
the manufacturing capacity to deliver all these orders. So I would say that there is a strong demoannd that has yet to been met by a strong supply capacity.
Janet, Good morning from San Francisco. How worried are you about the stickiness of inflation. Given the week we had in economic data.
I think recently the inflatient data in the US did show a bit of stickiness and a bit of reacceleration in the headline and the producer prices today, I think it just raids a bit of a concern, although if you look ahead to the twelve month or twenty four month view, I think it's still more likely than not that inflation is going to come down in primarily if you look at the money supply growth, it is trending lower, and I think that's really a pretty good indicator of
inflation going forward. I think inflation invictation for consumers is so pretty steady there's no worry insign from there. So I would say on a twelve month view, pretty confident is still going down. But I think I think together with the economic resilience, I think that there is probably less argument for a lot of rape casts this year. So I think even a couple, you know, three four rate cuts could be at risk.
You know, Caroline, we've got to give some sympathy to the market out there. Imagine trying to be an investor and learn about the technology sector from earning season and then think about inflation, and it's not easy.
Janet's the big backs and that's why I think.
Right, you know, let's let's end the week on a positive. You know, we're coming to kind of the end of what's been a very busy one Q earning season. Janet, what did you learn about the technology sector in the last few weeks.
I think generally the earning's delivery is still pretty strong.
I think for some of these mericap.
Companies, they're still trading on relatively attractive p multiples. Obviously, some of the names that they're getting more expensive, but if you look actually versus the twenty twenty one levels, the multiples are not outrageous. And if you look at the key multiples over growth, that's even more appealing. So I think that it's still likely further room to go
for these technology madcaps. And obviously you have to distinguish between some of it, but overall speaking, our more conviction is on the semiconductor, particularly in manufacturing and equipment producers.
January, Head of Market Analysis. Obviously, Brundolphin love having you on the show. Happy Friday, Join us again soon. Like we talked about the public markets, let's talking about the private markets in today's VC spotlight and bringing Battery Ventures General partner dar Meshsaka, who's with me here on sat in San Francisco. You heard my preamble about if you're in LP and you're thinking where do I put my money?
You go and get five percent of treasuries right now, and then you've got your desk sitting there going well, hold on, I would like to take some of your capital. Is that a real factor for you right now? Where rates are? Your ability to raise more capital if you wanted to for a new fund.
For first and foremosts Ed and Caroline, thank you for having me here. I don't think our LPs will been with us for forty years. Think about macroeconomic cycles in two or three year windows and compare us toward the risk free ratist. Then look at the innovation cycle and say, hey, in the gorse of ten twenty years, can you create one hundred or twillion dollars behemoths? Does Battery or the funds they invest and have a good chance at getting in those behemoths? And if so, it's going to well
be for itself. Most of the LPs don't necessarily compare VC returns to the risk free rate per se and they make ten year allocations. But having said that, there is certainly a lot of pressure because it feels like the winners have gotten much larger. There's mega winners, and the VC funds that are involved in those winners will see a pretty nice pay day, while there's.
Going to be a lot of losers.
And there's a lot of first time funds that got LP money which will be challenged to raise the next fund.
So it's a zero or one game.
You either get in the mega winners and you make a substantial return, or you don't, in which case you don't raise money at any cost.
The reason I find Battery Ventures interesting is you have some scale. You know, the deployable capital is up there, forty years of experience as you point it out. But also you're pretty broad you know, consumer, industrial technology, software where you focus most. Out of that that pretty broad.
Spectrum, Battery has historically made a call to go deep in software. Even if you're in industrials or healthcare, there's a software.
Element to most of these companies.
And so I would say eighty five ninety percent of what we do is business software, and within that we have a global presence, so we'll look for the best companies in US.
Europe and Israel.
We have offices all over the world and we'll find them mostly at the Series AIRB stage, but sometimes we also willing to go late stage or take control of a company in a private equity style transactions. So we're very focused on business software that that part of the economy keeps on growing, and we're very bullish in that.
We feel the software market could grow from two trillion over the last ten years to over four to five trillion on the heels of AI, and so we're very excited about that market and stay committed to it.
You've packed some real winners in the private market of artificial intelligence. I think of data bricks at the moment, and we've heard from the CEO of that particular business sort of anticipating and eventually batter the ultimate infrastructure costs saw the money that they have to put in the chip costs for example, for RAYI are going to plummet. We are going to make it more cheaply. But where do you see the opportunities to be investing in artificial intelligence?
Is it the picks and shovels is it the software lair the applicates.
Great, great question, Caroline.
So we've looked up and down the stack, and I feel like the infrastructure layer, the picks and shovels, as you say, the large language models, the core chipsets that make up the AI stack.
Those are very important businesses.
But I don't think this adventure backable in my humble opinion.
If you look at the.
Last couple of technology revolutions, look at Amazon, Google, Microsoft Cloud services. They're part of Amazon, Google, Microsoft because they need tens of billions of dollars and they need a captive customer base of ten to twenty thousand customers where you can try out these services in.
Much the same way.
Open AI and Tropic coher Mistrial the very important elements of the AI stack, but they need tens of billions of dollars multiple years before you know, there's union economics that make sense, and that's just not a venture backable business. And it totally makes sense that Microsoft has invested ten twelve billion dollars in Open AI, and Google and Amazon are investing in their competitors. However, what we're excited about is the higher layers of the sack. If you look
at the middleware stack. If you look at the cloud revolution the last ten.
Years, you have companies like data Dog and Mongo.
And Snowflake and Pile of Water networks that make up the databases and monitoring the security stack in much the same way, You're going to see a similar play out in the AI place. Where you see a vector database to store the data for AI, you see monitoring of models companies like a Rise and others that are monitoring these models. You see security for AI, and so I think that market will play to the one hundred to
two hundred billion dollars spent in the middleware stack. But the most exciting part of AI, I think is the application stack.
If you think.
About just the human labor that is inefficient that can be automated and augmented by AI, I think there's a lot of promise there.
So just to follow up on that damage, how does open AI Microsoft not just to eat all of that lunch? I mean, are we seeing really viable competitors be able to get specific? Is it about going really deep into one particular industry group, going all in, non legal, all in on healthcare Because ultimately it feels like they've got some really tough, well monetized competitor out there.
Yeah, I think it's a fair point.
I would think Microsoft is more focused on the trillion dollars spent in semiconductors and Nvidia and building their own shape than trying to go build an HR software company.
You know, if I'm microsoftware at Google.
If you're a two or three trillion dollar company, a ten billion dollar business doesn't really move the needle.
You've got to get into a business that.
Is hundreds of billions, call it semiconductor systems and compete with each other, and it benefits you to go be the Switzerland and have companies go build applications on you.
Just like the Apple.
Marketplace iOS marketplace benefited by having millions of developers built apps. Apple didn't have to compete with them, each of them paid the Apple tax. In much the same way as you are an open AI, Google and anthropic, Amazon and Nthropic can build a substrate on which applications can be built.
And the ones who get the most number of.
Applications built are the ones who benefit, and that drives trillions or dollars in value for them. I don't think they need to goal compete with their customers, it probably is not the right business model for them.
Meanwhile, you back those customers. Battery Adventures General partner DAMESH. Thacker can talk for so much longer. We thank you so much for your time. I meanwhile, coming up, will take a closer look at draftings the fourth quarter results CEO Jason Robbins. A lot to dig into there, as well as the M and A that they announced as a bluebod technology.
Take a look at Draftking shares kind of up one percent. It's been a choppy session after the company reported fourth quarter results announcing that they would buy the lottery app jack Pocket for seven hundred and fifty million dollars in a cash and stock deal. Delighted to say to walk us through the numbers, CEO Jason Robbins, Actually where I
want to start, Jason, and good morning to you. There's a note out from Morgan Stanley that says the results in the quarter are gone, were impacted by unfavorable sports results, and it just goes back to the idea that there's a marketplace you operate.
What do you make of that?
Well, I think that you know, when you're taking action on sports, then sometimes they're subject to those outcomes, and sometimes they swing the better's way and sometimes they swing the books way.
This happened to be.
The worst two week stretch of I should say, the most customer friendly two week stretch of outcomes we've seen since becoming a public company. And you know that happens over the course of time. It certainly swings, you know, either way, and it evens out. But in a quarter, you know, you can get bit and in this case, we had just issued guidance and reaffirmed it in our investor day literally the week before, and so you know sometimes that happens timing wise, but if you adjust for that,
the underlying fundamentals of the business were incredibly strong. I mean, that was why we were able to raise our guidance for this year by so much. On the revenue side, we increased our adjusted even to a guidance by fifteen percent. That was really due to a record customer acquisition quarter as well as really strong engage from our existing players.
So the M and A piece was really interesting, and you know, I guess do you just see it as a new market that you wanted to move into. What was the motivation there?
Well, we did some analysis to directly compare our customer base with theirs, and there was significant overlap. So we feel good that it's an audience that really crosses over and with actual CRM and real cross sell marketing, we think we can increase that significantly. The other thing we saw was that the customers that overlapped actually spent more by about fifty percent with DraftKings on average, and the
customers who did not overlap with Jackpockets audience. So not only are is there good crossover, it's also a higher value customer that we can cross sell.
So there's a lot to like there.
And we think this really, you know, this is all about CAC and LTV.
That's the nature of the business.
How do you get the customers on the platform as efficiently as possible, and then how do you engage them and keep them and get the highest LTV over time as possible. And so anything that helps on either side of that equation, let alone both like this does, I think really will strengthen our ability to compete and win in the US online gaming industry.
And so that's really what it's about.
That's our focus, and we feel like this is a huge step forward for that.
Tell us about the equation that you have to decide on whether to.
Build or buy. Why buy in this occasion.
Jason, Well, the team that we got is incredible. Pete in his team or really sharp and understand this market and understand this customer better than anyone I've ever met.
Also, the technology they've built is hard.
You know, it's not easy to build a system that can scale to fulfill in multi state and this type of setup, so really that is tough. We looked at, you know, potentially different options, and we felt like this team was the best. And also the technology they built
is the best. So while I certainly think there's always different ways to approach things, and of course we think we got a good deal too, not always part of it, but I think there's always different ways to approach things, and in this case, we felt like the combination of the team we were getting and the technology they've built was just too good to pass up.
Talking of different ways to approach things, and we are indeed speaking with Jason Robbins, drafting CEO, to our TV and radio audiences, what about this new sports streaming bundle? What about Disney getting into bed with Fox with Warner Brothers, What do you make of it.
Do you think you'll get through the regulators?
Well, it'll be really interesting to see.
I mean, first of all, I'm not surprised that you're seeing deals like that. Obviously we've seen the media industry get really disrupted by streaming, and sports has sort of been that thing that everybody's kind of still waiting to see.
How does this evolve? How does this shake out?
And so you're going to continue to see more innovation, more disruptive deals, and.
You know where it all shakes out. I don't know.
If I did, i'd be you know, i'd be making more bets on those spaces than I am.
But it's not our world.
Were kind of watching and waiting to see, and I think, you know, usually in those situations, opportunities to partner with new interesting ventures can emerge.
So we'll have to see how it all shakes out.
But certainly a fascinating time in the sports media space.
Jason, what's the next step in DraftKings technology story?
Now?
What is it you want to do with the platform and what do you want to build?
Well, first, I think we still have a lot to do to just continue to create an incredible product in OSB and I gaming for our customers, Jack Pocket. Hopefully when we close that that'll be something that there's a lot of runway. They still have only launched Scratchers in one or two states, and a lot more to go there. I think, so tons to do on the product side, just to continue to build out and reach, you know, a wider audience and also provide more interesting things for
people to engage in. I think on the sports betting side, live betting and game betting continues to be a big untapped opportunity. We're seeing it naturally increase and that's what I think. A lot of the core piece of the ecosystem, like broadcast latency totally.
Figured out across sports.
So a lot of room I think still to grow in many areas of the product, and we're going to continue focusing on the customer, listening to what our customers say and try and deliver a great experience for them.
Jason Robbins always great catching up with you. Thanks so much. Busy Old week Draftking CEO. I mean it was a sensation online yesterday Open aiyes new text video generator called Sora. The company announced it's launched on X yesterday. The model currently available to only a small number of researchers and creatives who will basically stress test it before a broader
public release. Let's bring in bloom Meg's Rachel Metz, and first of all, we're all bowled over by just the beauty of what's created and ultimately what any future filmmaker is going to be doing.
Yeah, I mean, I think the equality that they are showing off with some of these videos is really phenomenal and it looks certainly better than other examples I've seen, and I've seen as many as I can of these AI generative video creation systems over the past few years. They've gotten a lot better, but this one seems to be better and to be able to generate lengthier videos that seem to work than other people have created.
Let's point out, though, that the first thing they did with it was generate content that's dog related or puppy related, which is not a shock to anyone but Cara. I think what's interesting in Bloembos Rachel mets Key with the reporting there, thank you, is safety question right that we go straight to the question about how we know what is AI generated and what is not. A story that I broke with some colleagues about Open AI and it's CEO Sam Outman. He's working to get a green light
carat from the US government. He wants approval or a blessing to move forward with that massive venture to boost the global output of AI chips and sources are telling us that there's a risk here that it raises an national security and antitrust look by lawmakers on the hill and also government agencies. You know, we've meet he has been meeting with investors, particularly in the Middle East in.
Asia over the last few weeks.
I'm hearing that in DC that is a particular concern.
I can imagine. I mean, the amount of money that they want to raise the investment is eyewatering. But most of all, I think these conversations with Gina Ramando that you've been reporting on key, I mean, he wants to work in lockstep here really with the government, doesn't he?
Yeah, he does.
And you know the final thing about it is he can get money from anywhere.
Seems so meanwhile, that does it For this edition of Bloomberg Technology.
Massive show recap on the podcast that's where we publish it. It has been an amazing week. This is Bloomberg Technology