From the heart where innovation, money and power. Collie in Silicon Vallet NBN. This is Bloomberg Technology with Caroline Hyde and Ed lud Love.
I'm Caroline Hyde at Bloomberg's Weld headquarters in New York and Ourmed Ludlow in San Francisco.
This is Bloomberg Technology.
Coming up and changing of the guard. Over at Twitter, Elon Musk announces he's stepping aside as CEO. We'll bring in the details on the successor Claus.
We'll talk artificial intelligence and how companies are implementing guardrails to deliver and embed AI responsibly.
And soft Bank has begun testing investor appetite for the IPO of ARM, seeking as much as ten billion dollars. Will bring you that and so much more this hour as we look at what market sentiment is like to round out this week, pretty dire, really collapsing on the ten am mark here in the United States, as we get the University of Michigan sentiment from the consumer right now that still sees inflation at about three percent for
the next five to ten years. That inflationary pressure still pushing down there for on the tech stocks on the day, we're seeing the two year yield actually rise some nine basis points. How much is a federal reserve going to have to tackle that embedded view of the consumer Aware inflation is heading, of course, we've also got anxiety about a ceiling about the banking system, plenty still to chew on as we head towards the weekend. Interesting moves in
the emerging markets as well. Keep an eye on Turkey, which looks pretty buoyant from the banking system there as they look towards a key vote. Could Ernuwan be waved goodbye to this weekend? And also look at South Africa. We've got the rand really collapsing on the day as we see concerns about the relationship between South Africa and the US, all to do with Russia supply of arms.
Let's pick it on agear, because I want to look at what's happening in terms of crypto and dollar has had a real rally this week on the back of some of these inflation concerns and the slowdown in the overall jobs data as well. We're seeing bitcoin off by nine percent on the course of the week, ed quite a sell off, in fact, the first back to back weekly loss a bitcoin since back in March. But dive into some of the micromovers and starts today.
Yeah, look, it's a kind of markets day where there's a lack of news headlines, particularly in the technology sector. I look at some of the megacaps. Actually, one mover to the upside is Alphabet, the parent of Google, up by six tenths of a percent. You see some of its megacap peers moving to the downside, dragging down the nas That one hundred is an example for the Alphabet actually on track for its best week since mid March.
I think there's a lot of momentum in this name from all the news we got from the Google io around what they're actually doing in AI. This show Bluemberg Technology today is going to have.
A big AI theme.
But we're not seeing sort of news driven moves in the markets. Apart from Tesla. Let's take a look at this stock. It's interesting had been higher at the open, markedly higher, up by a couple of percentage points. We're now softer by one point four percent. Three factors in the market, one the principal one being we do have a new CEO at Twitter, Linda Yakarino. We will get
into that momentarily. Also news elsewhere that they've raised prices incrementally on the Model Y in the US two hundred and fifty dollars and on some of the more expensive models like Model why sorry, more expensive models like the Model Let's having a one thousand dollar price bump. In China, there is a soft recall for a software fix on Regenerative breaking one point one million units or so. A lot happening. But we're down one and a half percent on Tesla. I think a lot of this has the
market's passing. What's happening at Twitter Elon Musk's other company.
Yeah, that's stick into that, of course, because he is announcing said it last night. In fact, stepping down, stepping back is Twitter CEO in the next coming weeks, and reports now name NBC ad chief Linda Yacarino as his successor for more let's bring him luez Asha Counts interestingly, comcast down a little bit on the news that they're losing this ad chief over at NBC Universal. But we do see finally what someone who gets advertising been paired with someone who gets the technology.
Yeah, it's huge, right, Twitter is advertising revenue has declined about fifty percent maybe more since must have over he's really alienated a lot of advertisers with some of his erratic decision making and things like getting into a spat with the ex employee who was disabled and making comments that were perceived by some to be sexist against women, and all these sorts of things have really driven advertisers away.
So bringing in someone like Linda, who has such deep experience in the advertising industry, has those relationships, has an amazing reputation like that could be huge for Twitter and really rebuilding trust with advertisers.
Caroline Asha Elon Musk has tweeted in the last fifteen minutes, let's bring that up and show our audience. He says, I am excited to welcome Linda Yakarino as the new CEO of Twitter. So there you have it, official confirmation. He tags Linda Yakarino and says that you'll focus primarily on business operations while he focuses on product design, new technology. Looking forward to working with Linda to transform this platform
into X the everything app. That is the kind of key key part right that this is one step to a bigger project.
Asia. Yeah.
Musk has talked a lot about this idea of having an everything app, right, modeling on something like we chat in China where you can book events and tickets and pay for things. So he's talked a lot about that and sort will be interesting to see if he's actually able to execute on that idea. And then we know, right, a number of weeks ago he put Twitter underneath this holding company called X.
Right, so technically Twitter Inc.
Doesn't exist, but it's underneath this company called X and it's part of his vision to sort of make Twitter an app that can do everything.
I've got to sort of reflect on all the messiness of all of this. So a shit because if we reflect on what's just happened to comodcasts NBC Universal, they're about to go to their advertising community, they're about to have their upfronts. They're about to be pitching how you should be lining up your advertising against some of their online offerings, and particularly on Peacock, and the main women to do that has just exited stage left in quite
a sort of erratic manner. It can't be a great end to that part of her career and start on the next one.
Yeah, it has to be difficult, right.
She was really integral to NBC efforts like Peacock, which is you know, the ad supporters dreaming service, to even establishing partnerships and relationships with some of the tech companies including Twitter, Snapchat, YouTube and others, and then even huge
events like the Super Bowl in the Olympic Games. So she had a really really important role at NBCU, and so I can imagine it's going to be tough now that that she's leaving at this last moment when she had a lot of those relationships and was responsible for a lot of those relationships with advertisers. Good for Twitter, but obviously really tough for NBCU, which has had its own sort of internal praders with the past as well.
Yeah, with the departure of their leader in recent weeks. It's interesting the CV Asia. We reported in October that when Elon Musk brought in those private investors for ex Corps now EX Holdings, he stayed in writing the plan to take the company known as Twitter public again in
a three to five year horizon. But you look at Lindy Yakarino, she doesn't have CEO experience and there are still advertiser concerns, right, I mean, just give us the latest on the advertiser flight and the impact of revenue.
Yeah, so the last time we looked at the numbers here at Bloomberg, right, it was still a large majority of advertisers on Twitter had left. So advertising revenue was down amongst the top ten advertisers from like seventy million to something like seven million, So it was a huge, huge decline. And even today, advertisers that I've spoken to
are still a little bit concerned about brand safety. So some of you may have noticed on Twitter there seems to have been almost a rise in misinformation and hate speech. Advertisers are concerned about that. They're concerned about some of must own tweets himself and some of his erratic decision making, and so advertisers still have a lot of concerns about Twitter. And honestly, Twitter was not always necessarily a top advertising destination anyways, just because it's a lot smaller than its
competitors like Meta. So there's still going to be a lot of challenges in getting advertisers back and really ensuring them that when they put an advertisement on Twitter, it's not going to appear next to some misinformation or fake news, that it's going to appear next to tweets that are saved and are not going to damage their brand reputation.
All right, Bloomberg seish accounts, thank you so much, busy twenty four hours for you and I both so Carral investors poured nearly four billion dollars into tech stocks over the course of the week. But Bank of America is splashing cold water on this rally, saying this prolonged period of economic decline in the US were royal technology stocks at the time where they're attracting a way of investor money.
A team led by Michael Harnett expects a recession to crack credit and tech just as it did back in two thousand and eight. And there's so many eye to this debate, right. There's those that look at the megacaps and say balance sheet and trench market position, look at the activity in the corporate credit sector, the demand detect is there. Bank of America things differently.
Yeah. I mean, whether you see big tech as some sort of haven in downturns or whether you see it as a bet still on growth. And let's just look at the growthier part of this, because the exuberants around a lot of these tech stocks I think of in video I think has some of the chick names. It's largely on the back of artificial intelligence, isn't it? And I thought there was a great note from Sotschen today.
Key Stretchers is over there saying, look, actually all the main driving force of the equity rally this year and the SMP, it's all artificial intelligence. It's a strip away that sort of euphoria around certain AI stocks and actually the SMP would be in the red for this year. I'm loving this from Nash Cabra. It was really interesting.
He's riding over in London, but they really cite the ninety six percent increase and in video overall, but Alphabet the Microsoft's what would happen if we sort of took away some of Alxuberant said.
We saw it in the private markets.
First, think back weeks months ago, all the money going to AI startups, and then the last three weeks what happened earning season. And this is what I've been looking at on the Bloomberg terminal, which is a fantastic chart that to how our chart's chief and I have been
passing over. So go back all the way to twenty fifteen, and this is a basket of around twenty of the biggest technology names across the S and P five hundred and as that one hundred like nada zero mentions of the phrase artificial intelligence or AI.
Fast forward to the first quarter of.
Twenty twenty three and across the earnings cool transcript. That's what we've analyzed, more than two hundred mentions just for that basket of twenty companies. That's a massive ramp up in activity. It's been gaining. But look, first quarter of twenty twenty three, this is the here and now. AI is everything for corporate America.
It is, but with that exuberance comes for many a healthy Joseph caution, A healthy Dooseph, how do you inject artificial intelligence into your business model in this safe way? We're going to have that exact conversation right now, ed because Navrida sings with us AI found a CEO GOODEOII is actually a responsible oftificial intelligence governance platform. Basically, you are empowering organizations to what delivered to embed AI, but do it responsibly, do it proactively, monitor it, manage it.
And I'm interested in Nevrena, how many companies you think are actually holding back on interjecting generative AI because they are worried about some of the risks that are involved.
Thank you so much for having me And what a critical topic right now, Carolyn, VA are seeing across the industry. Right now, generative AI already reinventing businesses. The top of mind questions for many of our customers is, you know, how can they continue innovating responsibly or get crushed by
this generative AI wave. So right now, the top of mind question that we are hearing across our customers and partners is how can I adopt GENITIVEVII confidentally and responsibly to make sure that the risks like copyright, appy IP leakage, plagiarism, etc.
Are under check.
Your background is fascinating because you're building this way of monitoring and doing it responsibly. You used to be a director of product over at Microsoft. Thinking about the ways in which AI can be commercialized. Is corporate America at this moment being thoughtful enough? Is VC private money being thoughtful enough about the guardrails and known to go in place at the same time as the exuberance around just the innovation.
You know, Carolyn, there is some momentum, but it needs to be more. As you can imagine, Now it's not about just winning the DEI. It is also about how you win the DEI. And this is where you're going to start seeing a lot of differentiation among organizations that actually are more just leaders in.
This age of AI.
Where there is investment in the I governance, where there's investment in oversight, whether investment is not in not only understanding AI risk but managing them at scale while also keeping an eye out to future regular that's where we are going to see the wins emerging in the ecosystem. So AI governance is certainly underfunded and certainly you know, becoming top of mind, but we need to see more progress and momentum in this space.
And avery in a good morning to you government compliance doing business with the public sector. What level of government clients does CREDO have. Are you able to offer your services to the federal government as an example?
Absolutely?
Ed.
So recently we announced a very strong partnership with booths Allen that exactly that focus. As you can imagine, there's been an emerging discussion Invice House around how do you know make sure that frameworks like billa frids are implemented appropriately across US agencies so that we're always keeping you know,
US citizens right. Central to this conversation, the creator AI right now is working across United States government as well as this partners like Booze Alan so that we can bring AI governance as a mechanism for them to activate AI adoption. But due to again safely and.
Responsibly, there's a debate within the artificial intelligence community AI native or AI adjacent startup founders basically looking at regulation and saying, well, if we think about healthcare or education, those are highly regulated industries where the consumer faces high prices or there are still risks in place. What is the benefit of focusing on a commercial guard rail versus seeking comprehensive regulation.
Yeah, you know, ed, I think this is where we have to really strike a right balance between innovation and regulation that supports that innovation. And you know, there's global initiatives that I'm actually actively involved in. TRETO as involved in again to make sure that AI governance and oversights are cross the entire value chain from design, development to procurement and.
New of EI systems happen.
And so you know, this is an opportunity for us to really bring in private and public sectors together to ensure that policy goes hand in hand with innovation, so that it can become an accelerant rather than a deterrent to the THEI innovation.
Never in a sing creto AI CEO, thank you for your time. Now sticking with AI, the music industry's biggest threat now is AI generated songs that are going viral. Industry executives, most notably Spotify CEO Daniel Eck, have been quick to promise heightened vigilance on behalf of labels, artists, and copyright holders. But while the platforms are sizing up the new disruptive force, labels and managers say that fraud
is already rampant. User generated content and bogus tracks may now can account for ten percent of all streams.
Karen, amazing those statistics. I mean, well, let's shift get us a little bit ed. We've going to go to an old school in the world of technology. We're going to Squarespace with the man who built it twenty years ago. The CEO howses website still such a prominent building platform. How's it developing tools necessary to serve small businesses? And let's face it, we'll ask a question about AI or two. I'm sure that's next. As a Bloomberg.
Squarespace, known for its suite of services in website building, domains and marketing tools, is reaffirming's mission to serve small businesses and creatives after twenty years of operations. We welcome its founder and CEO, Anthony Casalina to the program. Anthony, Good afternoon to you out in New York. Good morning
here from in San Francisco. You had earnings on Tuesday and you raised four year guidance for revenue, and I want to get right to it and ask how much of that confidence is driven by the moment we're having in AI.
Yeah.
First off, thank you for having me, and you know, just a fantastic quarter for us. We were able to beat and raise, maintain our strong cash flow profile, and continue to accelerate growth, which is really fantastic. Another point on the quarter is that trial starts, a number of people trying our core product was the highest of any quarter, even including pandemic.
Quarters, which were record high for us.
You know, as you mentioned and as I you know, spent a lot of time talking about on our earnings call, AI is something that's you know, we actually know a lot about our industry is no stranger to it.
I would say two things about it.
One is sort of you know where scort space is right now and where we're going in terms of where we take things with AI. So Scortespace stopped the need for a lot of people who use our platform for programming websites about two decades ago, so that's not something we, you know, are planning on necessarily using AI for at this time. You know, once you get start up with scores, we do a lot more than just generate a website.
We hosted, deal with bandwidth, cybersecurity, DDoS protection, dns as a seal, certificates, domain registration, you know, just a myriad of things that you need after you, you know, have designed the website, and we do that for sixteen dollars a month as a starting point, so you know that stuff is as relevant as ever for our customers. I'll say two things about how we've been incorporating AI in large language models today and where we're going to be
incorporating them in the future. So one of the main reasons why people have a trouble starting with scorespace is they say their content is not ready, they don't have the images they need for their site. They don't know how to write an about page, they don't have their copyright. So actually, this past Monday, right before earnings, we introduced chat Beat GPT based large language model content generation in all of our text fields and we launch that and beta to our circle community.
So we're super excited about that.
The other place, did that moment that you announced that you were integrating with open AI, did that clearly make a lift? Did your people start to turn to say this is exciting, this is going to change dull or are they just like yes, obviously?
I think it was more of yes, obviously. You know, we've been aware of these models for months. I mean, AI has been part of setup in our industry for I believe about eight years, so we've been looking at it extensively, which kind of brings me to the second
place where we're incorporating AI. In Q one, we launched something called Scorespace Blueprint, which lets people get started building a template and bypassing our template store, that's a perfect spot for us to integrate essentially prompt engineering on top of a large language model. You can tell us more about what you want and we can generate those sections for you so that you don't have to be picking
a full template out at once. So perfect place is where we expect to see a lot of AI tailwinds.
It's interesting, isn't it, ed at the moment that poor people come on to want to talk about their general earnings and we go straight for the AI focus. But a lot of this is about how on earth ed I think people are going to be coding in the future. People are going to be burning in the future.
Anthy I have to ask you on self reflection how much you feel an existential threat. The debate that I hear daily is do we even need computer scientists anymore?
Do we need coding?
I know that you explained that you've taken that process away twenty years ago, but you look at the demos from Google on Wednesday.
I was there.
Look at what open ai demonstrates. Anyone can request code and do anything with the code generated. So what's the point in squarespace?
Oh?
I mean the point in squarespace is the list of things I rattled.
After you have the code.
After you have the code, you have to hosted, provide bandwidth storage, get a content, delivering a network on there, prevent against data as attacks, get DNS running, get your domain running. Squarespace does our ad for sixteen dollars a month.
If you were to also then pretend, not pretend, but believe that all of our you know, all the programmers in the world are suddenly going to be out of jobs, which I certainly don't believe, then it would be very interesting because then we would be modeling our company at what something like a seventy percent free cash flow after we can run it without employees or something that's nothing
we believe in. You know, we we have a fantastic creative and engineering team and we're building that team not thinking about a world where they don't exist. Further, in other areas, like you know, customer support, We've had AI based chatbots implemented for over five years. We monitored reflection relates.
Those are only better with GPT models, So we anticipate. Yeah, really a lot of tailwinds from these technologies being incorporated in the Squarespace, in the content generation, in a setup process, and we think it doesn't really crack much at all from the infrastructure we provide.
Anthony, great to have you, thanks for talking us to Anthony Casselina that his CEO and founder a Square Space from New York. From San Francisco. Listen, bloomg.
Welcome back to Bloomberg Technology. I med Love in San Francisco.
I'm Caroline hid in New York. Let's get to these markets today, ed, because it's an interesting one as we just see a little bit of caution as to go into the weekend. We have the macro data looking a little ugly if you look at the inflationary pressures, the perspective of the consumer, the eumish data, we're down by seven ten percent now, so tech takes a hit when we've got inflation front and center because we think the Fed's going to have to hike two year yield up
eight basis points. In the back of that bitcoint actually having a bit of an ugly week and indeed down some two percent on the day. It's down more than ten percent nine percent over the course of the training week. That's because of the strength in the US dollar as well as warries, perhaps a little bit about the liquidity out there and some of the regulatory risk. Let's plick it on and look at how individual stocks are doing
on the day. Because Google, I have to say you were there on Wednesday, Google, I owe, this has really lit the fire beneath some Google Stock of late and we're seeing Alphabet shares that seven tenths of an percent and one of the biggest contributors to the points on the upside at leads for some of the benchmarks. Today we're seeing it up what ten percent of the course of the week, best week since the end of March.
First Solar interesting buying a company in Europe. We don't often see a company really shoot higher when it's spending some money, but it seems to be really net additive to the overall business offering. We're up twenty three percent on First Solar, and I'm looking at Comcast down by three tens percent. Of course, the owner of NBC Universal, which today we understand ed, is having to say farewell to their ad chief of MBC and we know where
they're going. Twitter. We'll talk about that in a minute.
We will.
Those are your tech markets. These are your tech headlines in talking tech. First up, vin Fast, the ev maker founded by Vietnam's richest person, going public via spack in what would be the largest ever US listing buyer company from Southeast Asia. The deal will give vin Fast and equity value of about twenty three billion dollars. Sticking with EV's Tesla facing issues in China, the TV maker will need to fix almost every car it's ever sold there
due to a breaking and acceleration defect. Is actually on the generative regenerative breaking. It could increase the crash of a risk of a crash according to the regulator there, impacting about one point one million vehicles. But it is a software over the air update that we should point out.
And back in the US, Tesla has tweaked prices of its vehicles for the third time in less than a month, adding one thousand dollars to the prices of its Model X and Model S. The base model s Now costs a little more than eighty eight thousand dollars, still about sixteen thousand less than it was at the start of the year.
Carac Yeah, and we've got to sit with sort of the Tesla theme, or at least its leader, because Tesla's shares have been battered around a little bit today because well, maybe its focus of Elon Musk is going to turn his attention back to it. Why because maybe he can take his foot off the gas a little bit when it comes to leading Twitter. Of course, let's talk about all of this when we're thinking about the leadership at Twitter.
Who's coming in with Cla diez ortis of course taking the focus on the change of leadership and the future of the so social media giant. And you're now, of course, Kwina Perkins, VC SCOUT, former Twitter executive. What are you making of the fact that, ultimately Twitter's had to realize that Elon Musk is great on the tech side of things, but they need someone who gets the advertising side of things.
I think it's so interesting.
I think, you know, Elon Musk may be a genius, but we all make mistakes, including Elon, and it's just very interesting to see sort of six months into this journey, his realization that advertising, which made up ninety percent of Twitter's business, really does matter and keeping those advertisers happy
and close is really important. And so this move is just absolutely a step in that direction, a step in hopefully a positive direction to turn around Twitter as a business and bring back advertisers to the platform.
Claire Linda Yakarino, what's your reaction to her as a CEO at Twitter.
I think it's super interesting.
I am interested to see how this goes forward. You know, she and Elon gave a presentation last month at a summit in which she seemed to really have a handle on his personality, and you know she was even encouraging him. You know, advertising is important, Elon, Why don't you get off the Twitter at three am? So I think there's hope here that she will be able to bring some hast and some leadership to the company, which it really needs. I mean, as I said, the revenues have just plummeted.
We know that, you know, advertising revenue used to make up ninety percent of Twitter's business, and we know that that advertising revenue is down about sixty percent now. And what it really needs, what Twitter really needs is a leader who can come in and court those global advertisers to come back to the platform.
You were at Twitter twenty ninety twenty fourteen Corporate Social Innovation.
At one point I think somebody.
Called you the woman who got the Pope onto Twitter. What will they be calling Linda Yakarino. What kind of impact beyond just ad sales do you think she can do to help the platform?
I think the potential here is pretty incredible. The first thing she's going to have to do is get back and court all those advertisers again, people she's worked with very closely over her long career at NBC Universal, And what she's going to have to convince them is that
stability and security are back. And that's of course why advertisers left the platform, their concerns about stability and their concerns about security, the rise of hate speech, the reintroduction of a bunch of formerly banned accounts, and so that's going to be her first sort of step is to make sure advertisers feel safe and feel excited to use the platform again. And then beyond that, I think one of her biggest challenges is going to be looking at how she can accomplish all.
This with a really reduced headcount.
We know that at NBC right now she leads a team of about two thousand, which is about the size of Twitter as it is right now. But you know, Twitter is made up of a ton of engineers, and she's going to get She's going to require a media team and the need to sort of build that back up again, and that's going to be really interesting to see how she's able to do that on such limited numbers.
Staff numbers.
You point out the challenges here, and ultimately the way in which this has been announced, dare I say, is a complete mess. It is not how I would want to be taking on a new role, to have to exit like that, to have to enter like that. And many have said, and maybe I'm just seeing it more because I'm a woman, but they said, look, this is a so called sort of glass cliff. This is once again a diverse leader being handed a bit of a poison chalice here.
It's super fascinating.
So there's a study from some researchers at the University of Ethics and that's been sort of going viral on Twitter because it was republished in Harvard Business Review, And essentially it shows that in times of crisis, In times of crisis is in a business generally the markets prefer a leader who has stereotypically feminine or qualities of a woman, essentially, and yet when a business is sort of doing well, we tend to prefer the stereotypical qualities of a man.
So it's not a surprise that if an extreme moment of necessary turnaround that Twitter requires right now, that they're going out and seeking a female leader. What we can hope is that she can turn this around and it won't just be sort of a failed experiment.
Right.
And it's interesting, of course that Elon Musk is going to the CTO role, so it feels as though the delineation is clear. He's very much going to be about innovation on the platform. She's going to be about how you sell it and bring safety back. Is that the way? Do you think that's a good allign It's a good way of splitting it.
I think that's a good analysis.
But I think I would highlight here that you know, this is a huge thing for him to acknowledge, right, I mean, the CEO is, for all intentsive purposes, in a management role.
In charge of the CTO.
And this is very different than the tune he was singing six months ago when he bought the platform, right that we're going to create a super app, that we're going to have payments, that we're going to do all these really exciting things that are going to require tons of in on the side of tech. And now he's saying, hey, you know, actually we need a CEO who really knows advertising, who really knows numbers, who really knows the business side
of things. So I think it's a really fascinating turnaround and I can't wait to see what happens.
I would also point out that he's going to the executive chair role, so he's kind of giving himself that position of oversight alongside CTO.
It's interesting.
I don't think Jack Dawsey was CEO when you were there. You were there two thousand, ninety twenty fourteen, and Jack Dorsey was technically CEO from twenty fifteen. But Jack was also criticized for sort of having this non CEO persona. He was not a pencil pushing executive. How did that dynamic work at the company? You know, how important is it to have somebody that's more technologically focused driving their platform like Twitter forward.
Well, typically in Silicon Valley that's incredibly important, right from the perception of how you're hiring the most incredible staff and how you're raising venture dollars obviously not relevant right now.
To Elon, that's super, super important.
And so to be one of the largest tech companies out there and to have a CEO who is not technical is very interesting. And again I go back to why I think this is such an admission on the part of Elon that some of his experiments really didn't work and didn't work to such an extent that they've.
Got to change up dramatically here.
I think with this change, you're going to see a lot of going back to the way Twitter used to be, and that may be really challenging for Elon and he may really not like a lot of it. So, I mean, there's a lot to kind of wade through here.
I just want to go back some of the reporting we talked about earlier in the show, which is that we reported in October when Elon brought back brought on private investors to the new entity, telling them that plan is to take this entity public again in a three to five year time horizon.
So I find that interesting.
I also find like what Twitter is interesting in Caro Taker Carlson the most recent example, So what we're going to have news shows based on Twitter now?
Well, and that's what's so interesting. You'll hear a lot of news executives sort of always wanting to know when it's going to work in tandem with social media and clear to that point, is that still an area that you're interested in the fact that Tucker Carlson's going to go and build something almost bespoke for Twitter. It's about that seems to be more about the subscription side of things, because he's not a man that actually really managed to tantalize that many advertisers.
I don't think he is a man that tatalizes many advertisers. I think that's accurate to say, yes, and then again, we're getting back to subscription side.
So clearly Elon is.
Not giving up his dreams of, you know, charging users to use the platform and have that to be a really big business, but he is acknowledging that, hey, ninety percent of revenue came directly from advertisers, and we need to at least get back a little bit to the way things used to be in order to keep Twitter more or less on an even keel. Although I don't think anyone could ever say Twitter is on an even keel right now.
Well said kind of Perkins Lacy Scout, former Twitter executive playas is. It's great to have some time with you over there in Argentina.
Ed, Yeah, I enjoyed that one. We covered a lot of ground.
They're coming up AI's impact on customer service. We're going to scuss all that and more with nice CEO Barrack Elm.
Next, this is Bloomberg, and what we're seeing today is a lot of AI tourists pretending to be AI natives. You know, there's a lot of companies who are not selling solutions. They're ultimately just selling vaporware.
Alex talking toughly the CEO of SCALEAI when it calls AI tourists. Let's talked to more about the rise of generative AI at this moment. Some of the players that have been in the AI space more broadly for more than a hot second, like Nice Tech company that has been powering customer services for eighty five percent of the fortune one hundred companies with artificial intelligence. Nice CEO rag
Iliam Elam is with us now. But it's interesting. You have twenty five thousand organizations more than one hundred and fifty countries. This is about customer experience and the use of AI. How have you been folding generative AI into that offering?
So, you know, if you think about our space, we cater to thousands of organizations around the world that are serving consumers, and we operate in the space of customer service, and we have that platform of organization when it comes to provide service to customers. When you know what AI brings to the customer service ARAA, I feel back with the customer service domain is a true game changer because this industry has been struggling with three very important thing.
First is you know, the lack of skilled labor, the ability to take decision in a very fast velocity, and mess personalization at scale. Yes, and that's exactly what AI can do to this industry. However, there is nothing generic, if you'd like, about what those organizations needs when it comes to AI. And this is exactly where we are and our company come into the picture.
You're seeing growth of course, posting what twenty five percent in the cloud revenue part of the business growth, But are you worried about some of the competitors that are coming on the space. If everyone suddenly starts being an AI specialist, if everyone can suddenly start changing up a business. I mean, I think this week alone we've had IBM, what's the next, We've had slacked well slax owner salesforce talking about how they're having the GPT within some parts
of their business. Everyone's now offering this to their customers.
I would sell in the countrary. First of all, We reported our ERNIXT yesterday and as you said, we had an outstanding earnings with twenty five percent growth in the cloud, driven by both cloud and AI. But when it comes to AI, although you know we all experience so far, almost all of us experience the beauty of GENERATIVEI, when it comes to deploying it in customer service for organization,
there is nothing generic about it. Actually, we see for our customers that are divided into two camps, those that says I will never put it in my customer service environment because it's not secured and I cannot control it, and the other that see the value but are concern about taking something that generic and try it and doesn't work. Because what you need you actually need to treat that AI as one of your employee and as a brand. You want the AI to serve your brand, your reputation,
and meet your business goal. So it needs to be trained with a lot of information, information of tens of billions of pass interactions with customers, and it's a proprietor information that you don't want to provide to the generative AI, and that's why they come to us to our platform. We have I have done data that is extremely almost impossible to replicate given our history and the.
Breadth of our offering.
It's also both having it in a very secured environment and you have to the domain expertise, so it actually raises I would say, the bulio of entry when it comes to technology in the space of customer service.
Gosh ed. It takes me back to the conversation we had a couple of months ago with Kathy Wood talking about it all being about the power of your proprietary data. But also, I mean that isn't to say though, that still everyone's coining a term or using and referencing AI, no matter what part of the industry or what kind of company you are.
Right now, you make a really interesting point, both on proprietary data and referencing the term back.
I have free time on my hands.
So I went through every single one of your earnings transcripts for the last year seventy four. Mentioned AI in the earning school twenty four hours ago. In the same quarter a year ago sixteen mentioned to AI the quarter previous, Going back to the fourth quarter fifty eight, how much pressure are you under to talk a big game around AI.
I don't think it's a matter of pressure. I think that we actually see it in our business. This is the type of discussions we have with our customers today. You know, our business up until several years ago was concentrated more on what we call the contact center, but all of a sudden, with AI, we actually covered the
entire journey of the customer. And we spend the last several years deploying and building AI capabilities that are injected and infusing our platform, and it is today one of the things, one of the two things that are driving our business A is the shift to the cloud. That is still in the early innings in the customer service part,
and even earlier than that is the AI. So actually we see it as the greatest opportunity we had for nights for our company since I remember, and I've been with the company for twenty.
Five years, ROCKI did be on the on the top and bottom line. I just give us some guidance going forward the rest of this year. What does your customer base look like is their confidence to spend right now?
So we had the.
Beat both on top line and bottom line, as you've mentioned, and we raised the guidance for the for the rest of the year. You know, we operate in a space that even in this economy, enterprises understand. They see need to differentiate and protect their brand, elevate their brand, and
of course providing out sending experiences to their customers. So we are a mission critical solution for them and they actually continue to invest and invest even significantly, and that's why we raised the guidance.
For the year.
Nice CEO name of the company, nice, nice guy to Nice CEO, Barack Eyelam, thank you, thank you very much.
Let's just talk about the founder of SoftBank Group, Masayoshi san is now personal on the hook for about five point two billion dollars on side deals he set up at the company. That's after the company's a vision fund Bench Capital. Arm ended the fiscal year with a record thirty two billion dollar loss. It's the world's largest technology investor. Was look, he's been battered by losses of unlisted startups in his portfolio. However, there is one company that he's
looking to list again. Let's think about how much SoftBank is coming. Measuring investor interest in an IPO of its chip maker arm Leanna Baker, Bloomberg News US Deal's managing editor is here with the details. Of course, the company that they took private, now they want to take public and what is the interest site for it?
So it's funny that you mentioned that they were facing losses of thirty two billion, because that's almost what they spent on ARM back in twenty sixteen, and now it's time to cash out. You might remember that ARM tried to sell to Nvidia two years ago. That deal never happened, So this is really a chance for SoftBank to recoup some losses for the rest of their portfolio. And ARM right now could be worth anywhere from thirty billion to set and debillion. Since it's still early, we don't know
where the valuation will come in. What we do know is that this IPO is likely going to be the biggest of the year, certainly the biggest in the tech space.
It's interesting, I remember when we went through the Rivian IPO process in November twenty twenty one, which seems like a lifetime ago now, but you get big institutionals buying blocks of shares, there was demand. Do we have any guide of how interested those institutionals are for this one?
So these are tests, the water meetings is what they're called. So these aren't, you know, a formal road show we're going to see those closer to after Labor Day when this IPO is looking to launch. So now these meetings are very early. They're just trying to get an indication of where we could see that valuation come in. I mentioned it's a huge range right now, so probably in the next few weeks, ARM will have some sense of where things are. But again it is early, and the
IPO process has changed in the past few years. It used to be that these meetings didn't happen, but IPOs tend to run smoother when you bring an investors early.
Many of those Brits still smarting about the fact that it's not going to be listening in London quite as soon as they hope. Lou mostly Ana Baker absolutely brilliant, Thank you so much for bringing us that. And interesting, isn't it ed As we talk about just the private valuations around AI. We talked to publicly traded companies thinking about AI, and then we think about companies that totally different but in the chip designing business that are looking
at the list. It feels a more buoyant kind of conversation we're having at the moment.
Yeah, like ARM is an AI adjacent company, the chips IT designs are at the cutting edge of technology. Will it be a player in AI? There is a thought school of thought that says yes. Look at the banks, Goldman, JP, Morgan, Barclay's. According to sources, what did Leanna say? A smooth IPOs what we're hoping for?
M h.
Well, We've got so much more to discuss. That's the end of this edition of Bloomberg Technology. But what's our next?
Ed?
Well, you can check out the podcast or join us on Twitter spaces right now on Twitter, do it.
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