From the heart where innovation, money and power collie in Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
I'm Karin hide A, Bloomberg's World headquarters in New York, and I'm Tim Standinbeck and for Ed Ludlow, this is Bloomberg Technology.
Coming up.
We push ahead to the all important vote results on Elon Musk's fifty six billion dollar pay package, and as Tesla's agm it kicks off.
Plus, we'll turn to earnings as Broadcom surges, as AI demand boosts its results, and we'll.
Dig into the financial terms of Apple and open AI's partnership mid their landmark agreement. Of First, let's check in on these markets, because we've got more fuel to this far. We've got still record high after record high across benchmarks. If you look at the S and P five hundred be your fourth straight record high. On the day, we're seeing the nastack up another tenth of a percent. Look not the big gains that we saw yesterday. But we digest yet another cooling of inflation with a PPI report.
The macro picture looks good.
The tenure yield falls down another three four basis points.
Let's call it forloring costs. On the downside, not so much love.
For European stocks, though still open to trade. We're off by one point three percent. More political anxiety happening in Europe and perhaps, of course, digesting a big move that we had yesterday. Move on, see what's happening in the world of crypto tim We have been seen basically US hold in pretty steady. We're off by about a percent, just point sixty seven thousand, interestingly coming off of those highs. So that moon music about risk on not quite flowing into bitcoin today.
But what are you watching on the micro Well, speaking of records, I'm watching shares of broad Com ticker AVGO. They are just surging by close to fourteen percent right now. The company did report earnings after the bill yesterday. It beat on the top line, it beat on the bottom line. The guidance surpassed analyst expectations. The company also announced a ten for one stock split. It's going to take effect
next month. Investors are certainly cheering that news, sending shares higher widely see as sort of a barometer for what's happening in the chip space. So checking out on some other chip companies. Nvidia also at a new record right now, shares up more than two percent, and then watching what's happening in the data center hardware networking when it comes to these AI data centers. Arista Networks also right now
at a new record at more than four percent. But speaking of shares surging, let's talk Tesla, because shares are hired this morning, this after Elon Musk send a tweet early this morning again as you mentioned, Caroline, the day of that shareholder's meeting, saying that those two shareholder issues that were being voted on have passed or will pass
by a quote wide margin. We're talking, of course, about that twenty eighteen pay package that has been under so much scrutiny in addition to that the idea of the company moving its incorporation from Delaware to Texas. Shares high
right now by three point seven percent. Not much can be said permanently about what happens with that pay package, but this vote widely seen as sort of a barama or a test for how people are seeing Elon Musk's leadership at a time when the stock has been under pressure down going into today's trade, Caroline around to thirty percent.
Let's get some expertise even further on this. Tim Dana Hall joins us and Dana, Look, it's not going to have an implications on the court in the here and now.
This still is all riding on a judge in the long term.
But suddenly it holds on in a musk from walking too soon.
Yeah, And to be honest, like, I was not expecting Elon Musk to front run Tesla's AGM.
We thought we were going to get the vote results tonight.
But clearly Tesla is keeping very close track of the votes that they do have, and a lot of votes came in yesterday. The deadline two casts a vote was late last night, and they've got the votes. I mean, if you believe Elon's tweet, and I don't think there's a reason not to, they have the votes on both his pay and on the move to Texas. And what this means is that many of the very big shareholders that Tesla was worried about either abstained or voted yes.
And that's like a super fascinating dynamic because some of the large funds like Vanguard actually voted no in twenty eighteen, and they are the largest shareholder in Tesla after Musk himself.
Dan, That's what surprised me so much about this vote. You had these large asset managers such as Vanguard that you just mentioned, voting in favor of this. Do you know anything about why they switched or the sort of strange badfellows here in terms of who's voted for and real To be clear.
Vanguard has not said anything yet. We don't know for sure how they voted, but.
You should say this. Sorry the New York Times reporting early this morning. Excuse me.
We have not confirmed that ourselves.
But if you look at the vote count, just a lot of yes votes came in yesterday and they have to be the big votes from the shareholders Vanguard, black Rock, Geode, State Street. So yeah, it's interesting too because both Iss and Glass Lewis, the big proxy advisory firms, were no on the pay package. And that's why Tesla was so aggressively courting retail investors. Tesla was worried that they didn't have the votes from the big funds, and they actively courting retail.
We know that they were actively.
Courting the large shareholders too, but something's turned their way and I think they've got it I mean, so tonight we'll get the final tally.
But I mean you're gonna see an ambulan.
Elon Musk take the stage at the AGM today.
All right, we'll certainly look forward to that again starting at four thirty Wall Street time today, Bloomberg's Dana Hole, thanks so much for that.
Well.
Turning now to Apple, when CEO Tim Cook announced the company's partnership with open Ai, they didn't disclose the financial.
Terms of the agreement.
For more on what we know about the deal, Let's bring in Bloomberg's Lynn Duan. She's here in our studios in New York. What do we know about the financial terms of being greading of the agreement? Just zero's all around.
Hi.
First, thank you for having me. Second, there are no financial terms.
Apparently.
It's funny because I feel like that was the biggest question on that day when they announced this partnership.
It was like, Okay, so who's paying who?
Who's making money here?
It turns out there is no money exchanging hands at least at the onset right. Actually happening is according to Apple reporter Mark German, sources is Apple believes that there is enough value, maybe even more value than monetary value to open ai and having its products on a ton of Apple devices across the board. The promotion of their product there offers them a business proposition if people want to say, go from the free version of open ai
to the paid version for twenty dollars a month. So that's the proposition to open ai and for Apple it's clearly a value add in allowing users like me and you to be able to access open ai and all of the tools the i generated content that it has on our Apple devices.
That has been some cost apart from nal Musk's aya and claim that he'll ban Apple iPhones going into any of his companies, but this integration will actually cost open ai something, right because well, they've got to pay for the compute if everyone selves using.
It, that's right, And the the idea behind it is that in the long term, this cost, this investment that they're making will pay off both for Apple and for open Ai. For Apple, I think that the long term advantage here. The reason why they are making partnerships with open ai and are trying to make partnerships with other AI developers.
By the way, this.
Is not an exclusive arrangement, is that hopefully one day they will be able to monetize it through revenue sharing agreements. So anytime one of these AI developers is able to sell a subscription through an Apple device, hopefully Apple will get a cut from it.
That's what Apple hopes.
And as far as the AI developers go, they are willing to give this investment in the hopes that it will generate more revenue. And mind you, this is a big push for open ai right now. They are under a lot of pressure to show that they can not only generate revenue, but that they can generate enough revenue to turn a profit. And that's what they really need in order to keep all this AI compute going is more and more money me into the institution to fund it.
Well, they're not out of data center capacity.
Larder data center.
Maybe they're saving a little bit by Apple not getting a cut on the chatchypt app for now, but certainly lots of way that this can be earning some bucks.
We thank you.
That was a perfect summary, Ninduan of Bloomberg. Meanwhile, coming up, we'll go break down broad COM's pretty sensational results. Actually shares surging as a timent outlined a little bit earlier. It's all on guess what AI demand. But we want to go back actually to what's been happening overseas. A BYD Chinese ev maker of course, actually traded here.
In the US for some ADRs.
We're higher on the day, and that's as we start to digest the EU tarras, which initially was a shock, but actually we think this perhaps is slightly less of a taroff than having been anticipated seventeen percent of BYD and actually they can stomach it if they're going to continue to sell into Europe.
This is a broom make technology.
Well shares a chip supplier Broadcam, surging after the company reported earnings that were boosted by demand for AI products. Joining us now for more is Kun John Sabani of Bloomberg Intelligence. Kunjohn, These results just exceeded all analysts expectations on the top line the bottom line guidance as well. Remind us of the space that broadcomplays and a huge Apple supplier of course, But tell us about the AI element here.
Yeah, So they have two core AI businesses.
One is the AC accelerators, which is alternative to merchant GPU what someone like an Nvidia provides, so mainly focused on the large cloud players and hyperscalers like Google, Meta, Microsoft, etc. And the second is the AI networking or the overall networking business, which until now was the biggest piece, which is where basically the pipeline that runs the data center runs on. So anything outside of the cpugpun memory that's basically all the networking components Qrinjin.
We have clearly some competitive inching into the space. When you think of Nvideo, it's a good strong number two.
But what's also interesting is they're taking a leaf out of Video's book. They're doing a stock split.
Yeah, I mean that seems to be the trend these days. You beat on good AI results into a stock split and you see what happens, double digit stock good. But I think from a combination point of view, you know, from in the near term, in terms of the use case, we don't think they're really competing with each other because the use case right now are different and both of
them there's no hurdles to growth for both companies. But I think in the long term it definitely will compete, not in the use case, but more in the wallet share because there are clouds providers and hyperscalers would have limited budget.
To spend and designing their own chips slowly but surely really interesting countries. Survanning, we thank you so much. A Boomberg intelligence running up on what is happening for broad Coom. But let's broaden ow is all the play and AI about the infrastructure space, the picks and shovels, the actual chips, So what about the applications, what about the large language models? You've got the perfect voice to really dovetail that with federal policy Reserve. Well, it is Joe Joo, his Millennia
Capital managing partner. Joe used to work over at the FED. So you're the perfect person to sort of outline whether in this environment where eventually we might get one, maybe even two cuts this year, in terms of overall policy, you should be putting yet more money into a broad coom, into an nvideo, into some other AI plays.
Yeah.
Look, you know, by taking a step back, I think that there's we're in this huge AI build out, and there's a couple of ways you can employ this market. You could you could participate in a semis etf you could pick the winners. But I think what I'm what I'm thinking my head is I think there's some naysayers who are saying, well, this AI build out is we're going to see the peak of the curve in the
next couple of years. I personally think that this hyperworld phase in the in the semis will probably go on for years, just because I think what the street is not saying is that there's going to be a lot of incremental demand from some of the tech blaggers that needs to catch up on AI. There's going to be foreign buyers from let's say Europe and emerging markets. And lastly, I think what we're also thinking is there's going to
be a lot of training and retraining of AI. AI is like software every time on your iPhone, You've got to update your software every.
Single every single week.
So in AI, as their new data becoming available, you have.
To update the AI, you have to retrain.
So I personally think that the AI at the infratrate as they had a lot.
Of room to go.
Well, Joe, I'm sticking with your experience on the Federal Reserve because look, at the end of the day, rates are pretty much everything when we're talking about this stuff. I'm wondering how you're thinking about these high flying tech companies and what exactly is priced in with regard to rate cuts. Are we going to see still moves higher even after the Fed does cut rates if it does cut rates this year, or is that already priced in.
Look as a former staffer now and a founder of my a firm, I take the view that it's important to look at the long term directions of inter treates, you know, in economic saying like, we're ninety percent confident, we're ninety five percent competent, we're probably ninety percent competent that there's going to be at least one rate cut
sometime in the next nine months. So whether it starts in July, September, December, work in January, I think it is not as important to me as an investor because you know the directions of the rates are coming down.
So what that means what you can do is to put you know, I think there's one more thing that I think the street often gets run out, and I'll say this for the record, is I think the street put puts a lot of emphasis on the back plod chart, and I think what I would do is probably put sixty percent of your weight on the BA plot chart and put forty percent of your own research analysis into
the thinking. So you come up with your own framework to what you think it's going to be the pack of interest rates, and then you put that into your financial model, your DCF model on Excel, and then you can sort of figure out, you know, what you think is fair value on the S and P, on MAST and on the stocks.
So for me, I just had to take a step back.
I'm less worried about whether the cut starts in September with December, but I know I think there's a rate coming coming so that I'll just put back into my model and then they'll be able to help me make better decisions as an investor.
You're betting on the trend and you're betting actually on private companies. I'm thankful Lanthropic you put money into some of the large language models.
Dissect for us.
Where the money then now is allocated in this space?
Is it the large language models?
At what point do we start seeing more money allocated to the applications the use of these large language models.
Yeah, So you know, there's sort of six broader themes of this AI in value chain. In my head, if you start from the very bottom, right, you have electricity, you have data centers, you have you have cooling centers, and then on top of that you'll have CHIPS's the semi use and you have the data owners like the Max seven, and then on the path you have the large language models. And then you need human talent. You need smart people to train the AI and work on it.
And the lastly you need the app. You know, we're going to build the applications. I think as an investor, you know you can have a They played this AI trade in public markets by buying public stock to QQQ, But in private.
Markets, what we're doing is sort of like we're sort.
Of an ETF in the private markets, and that we're invested in entroffic, WM, the cohere because these are the innovations companies happening in the private markets.
But there's also other ways to play this AI.
Trade, because you could also be investing in utility, you could be buying data centers.
So I think there's no different waste. But I think the fundamental.
Phasis in my head is that it's a foregun conclusion what the AI is real. In fact, I think AI is going to be you know, like software square, the Internet cube, if you will, excuse me, but I think the biggest question in my head.
Is actually AI regulation. But that aside.
I think when you take a step back and you look at some of the companies in this AI trade, we're at the very beginning where you know, you can think of it like a two year old baby. And and so the saying is, in playing words, if this baby, a two year old can do what it can do, imagine when that baby matures as an.
Adult, how much more where that person can do?
Okay, well, as a venture capitalist, you're thinking about that baby as an adult. So very briefly, paint a picture for us about what AI can do when it's nineteen years old.
Yeah, then we're talking about the six layer, which is the application layer. Right, So there's you know, I guess the industry phrase theory is called vertical software, which is you can apply AI in cybersecurity, in automation, in robotics. You know, there's a company called Figure ai that's combining robotics the AI. We're invested in a AI cybersecurity company called Deep Instinct.
But you can also apply.
AI to pharmer research to know, many other fields that we haven't even thought about. There's one thing I got to say that's really really important. When we think back at the major technological innovations of the last two hundred years, whether it was electricity, the engine, the Internet, how did we as a humanity create that. We did it with human intelligence, people working together. What happens now when you can recreate intelligence, you can recreate many many atimics edicines.
So there's many infinite pathibilities that we can create. So what I'm trying to say is it's really I think about how we nurture this technology in a way that's going to help us, help helps the community move forward and grow in a way that's responsible.
Joja Ou of Millennia Capital, thanks so much for joining us. Certainly do appreciate it.
I'm now for talking tech.
First startup al Alpha says, look, AI must grow beyond chatboots.
In order to be profitable.
Speaking to Bloomberg, the CEO Jonas Andreulis says businesses need more specialized models other than Ela lambs that power the likes to chutch ept. He went on to compare the current AI craze to the likes of the dot com bubble of the late nineties, plus Norway hits meta with a complaint over their plans to use images and posts
from Facebook and Instagram to train AI models. Now, the Norwegian Consumer Council says Meta has made it quit deliberately cumbersome to opt out of the AI scraping process, which would violate EU.
Data protection rules.
Meanwhile, Open Ai CEO Sam Altman says the company is on a pace for a three point four billion dollar annual revenue now. According to a person familiar with the matter, Sam Altman's addressing staff and in an all hands meeting Wednesday, he added that the company was on track to generate two hundred million dollars in this AI partnership through Microsoft A zero.
Well, sticking with AI, Adobe out with earnings after the bell, where investors will be focusing on the company's AI progress and if customers are spending for it.
Joining us now is.
Bloomberg's and Brody Ford Brody good to see you this morning. I'm wondering where where the context is here because shares are down more than twenty percent going into the print later today, and the company plays in an interesting space because it provides AI services, but at the same time it's software as a service, which has just been beat up this year as companies have shifted their budgets more
to hardware. What has beat up the company more going into ourn Is it competition or is it a lack of spend when it comes to software and services?
Yeah, Adobe is one of the more interesting AI debates out there because, like all software, it's been the question of are they benefiting from AI or are they getting replaced by AI? You know, Adobe is famous for their creative portfolio Photoshop video editors, and they've introduced new features
to be able to generate imagery in there. The key fear for investors is that over time with AI, if I'm able to type in you know, I don't know TV show anchors talking about tech, am I really going to need you know, Photoshop to do that?
Am I gonna need a video editor to do that?
And are small business is going to stop using these licenses so much?
Right? And so Adobe has spoken a big game.
About AI uplift for the probably over a year now, it really hasn't showed up in the numbers, and so investors are starting to feel like, hold up, maybe these numbers aren't going to really come buddy.
The numbers ain't that bad in terms of growth of still ten percent for revenue expanded and actually consistently going to be about ten eleven percent for the next few years. So where is the anxiety eventually going to show U where we're going to actually see them eroding some of that revenue game.
Yeah, it's it is for sure a long term risk.
I mean, I haven't seen a whole lot of evidence of companies, for example, ending their Adobe licenses and saying I'm just going to use Dolli to generate images. The anxiety is that there's a lot of new spending going toward these AI startups, and in theory that new spending should have been going towards the software incumbent like Adobe.
I mean, it is such a small metric investor's focused on here with one of the craziest acronyms, it's like net new annual recurring revenue for their digital media segment, and that has gone down bit by bit again because there's this sense of like, hey, maybe they are not getting new workloads that are ending up in the hands of Runway or Dolli or mid journey.
Hey Brody, I'm wondering what you see or analyst rather as the biggest competition out there right now from the upstarts that exist. Is it the lms or is it the bigger companies that are starting to adopt what the llms kind of started doing earlier.
It's definitely not the bigger companies. I mean Adobe is thecumbent here. I think the biggest anxiety point is Kanva and has been for a long time.
You know, that great Australian startup.
They're known for making the templates that you might end up seeing on Instagram or you might see your friend's wedding. You know, they've just made it a lot simpler to do quick design, it's a little cheaper, it's all on the web.
I mean that's who Adobe investors have been anxious about for a while.
Yeah.
On the upstart side.
It is more of those large language model makers who are generating images.
Brody, thank you for joining us.
All eyes you want Adobe after the bell that.
To Neumog Technology. I'm Caroline Hyde and.
I'm Tim Staneviek in for a love.
Let's go quick check on these markets ten at the moment, because we're currently seeing higher just when you're looking at technology stocks and US trade more broadly. S and P five hundred and a new record. NAZAC had a new record two year yield. Moved by the fact that PPI is showing once again inflatory pressure, is dialing back stock six hundred.
Over in Europe. Just finished trade.
I'm afraid to the one point three percent downside as we still digest political risk and maybe you know a reparthing of where Federal Reserve pushes rates and people having some anxiety over that. Move on, have a look at something individual movers because record high for broadcon thirteen percent on the nose higher. They're doing what's rather in vogue at the moment, and a stock split by ten, so we'll see perhaps a little bit more retail come into this chip damaker that is also on a tear when
it comes to AI demand. Then revenue really managing to impress, and the guidance to MicroStrategy off by six percent.
Why more supply coming?
But this term in convertible notes, why is Michael Sellers sailor selling converts because he wants to buy mob bitcoin and is currently up by three percent. Look that AGM is going to be starting later today. We seem as though shareholders are voting in favor not only of that fifty six billion dollar pay package that was held from twenty eighteen, but also the move to Texas. The question is will that judge think similarly. We want to get onto another company at the moment, and I want to
discuss what's happening over at Intuit. Intuit Mailchimp is coming out with a new revenue tool. It's a system of predictive and generative AI models. Basically, it's designed to help market is win more revenue. You're going to send the right email at the right SMS at the right time, with the right conversion into at.
CEO is going to talk us through it.
Sasam Gourdalzi joining us for more and this is about artificial intelligence really in the here, renowned Sasan you have been talking up AI. You've been reworking your business as the time you came in as CEO. I want to you know, qdos to you for talking about it before the rest of the market did. But how is it actually going to generate revenue for you?
Well, first of all, thank you so much for having me. You know, what we announced today is a really big deal. Let me first quickly start with context and then talk to what we launched, and how over time it will generate revenue for into it. You know, strategically, there are three big things really that we've declared. You know, one is shifting from building workflows where customers do the work to get to their financial outcomes to workflows where we
do the work for our customers. The second element is that embedding AI powered experts human experts within every workflow so that there's never a dead end for customers. When there's a dead end with the technology doing the work, are experts that actually sit on our data on AI platform can be the assistant for consumers and small businesses. And third, to take our game to the mid market and small enterprises and really serve our customers in ways
that they could never imagine possible. Specifically, what we announced today on into it mailchip platform is what we call revenue intelligence. You know, one of the things that small businesses care about most is revenue growth and profitability growth, and within that their cash flow matters a lot. And
so revenue intelligence does something remarkable. It leverages all of our customers data across Mailchimp and QuickBooks and an essence helps them with understanding how they can drive customer and revenue growth, So imagine swan.
I'm I'm just going to think about imagining as a consumer here though, because I can see how this might be music to marketiers is. But me as a consumer, do I want more SMSs? Do I want more emails? Do I want more marketing heading my way?
Well, if I finish the thought around this small business and the impact that we'll have to the consumer. In essence, the small business can understand which customers they have an opportunity to provide more services to where they can drive more benefits and profitability. And for a consumer, let's use couch as an example, or new chairs as an example, as a furniture or that you just came out with.
As a consumer of those devices or those couches or chairs, I have an opportunity to know what's available, and I have an opportunity to know where I can modernize my house. And so from a consumer perspective, the benefit is significant and consumers actually believe it or not. Ninety five percent of consumers love to digest sms is because they're short, they're sweet and to the point, and it has an enormous impact for consumers and a big impact for small businesses.
And ultimately, to answer your question, the more we can help drive revenue and profitability growth for small businesses, the more we have the capability to monetize and be able to drive growth into it. So we're very excited about what we launched today.
So, Son, I want to talk about the TurboTax business because you've spoken recently about the idea of looking for more customers who actually use human accountants to adopt TurboTax and not use those accounts anymore. Forgive me for getting personal here, but there's a reason I'm asking this question. I would imagine you have a very very complicated tax situation. As the president and CEO of this company. Do you use turbo tax for your taxes?
Great question.
First, let me start with answering your first question. Then I'll answer your question about myself. You know, first and foremost, there's a thirty five billion dollars a total addressable market, and of that thirty five billion, thirty billion is consumers and small businesses that actually go to somebody else to
have their taxes done. And that's really where we've built out the platform, where it sits on a data and AI platform where we can do your taxes for you from a governance perspective, I do not use turbo tax because it's important from a governance perspective that somebody else does my taxes for me outside of our platform. So that's the reason why I don't. I would okay to do it because we have great experts.
What I was going to say is you, do you ever picture a time where somebody with as complicated a tax picture as the executive a publicly traded company can only use a product like TurboTax for their taxes.
Does that day common? If yes?
When well, first of all, we can do that today.
If there wasn't a governance issue, I could have one of our experts do all of my taxes today. You know, our experts can today do anybody's taxes for them. And it's all digital, it's all AI powered, and we have multiple second reviews within our platform to ensure that your taxes are done accurately and that you're either getting the largest refund or if you have a balance due, that you're paying the right amount.
But today, anybody can do their.
Taxes on our platform and have us do it for them because we have all of the expertise, all of the data and AI capabilities with the best experts in the industry on our platform.
Yeah, we were just seeing sasan how well your share price has been doing of late, and in many ways of late we've seen it pop because there's a price increase coming according to Mazooho analyst in particularly, who is outlining what that's going to do for your revenue. Sasan, how big an increase are we going to see for quick books?
Can you give us a.
Sort of level revenue indeed a natural price point?
Yeah?
Sure.
I mean, first of all, I would start by saying that we've had significant innovation on our platform in the last year across all of the elements of our platform, whether it's the ability to be able to fuel your success, drive your revenue growth or profitability, and or having our experts to help you run your business as a small business.
And we always price for value, and so this is very much sort of in line with our pricing strategy and our pricing principles, where we are raising prices all the way from those that today start out to fuel their success as a small business and follow their passion to mid market customers. And we've gotten great feedback relative to the innovations that we've delivered into last year, and we're just simply pricing for value and we're excited about the possibilities.
I just want to talk about Mint because there was a lot of sadness when you guys shut Mint down, and I'm wondering if you've seen those customers move over to credit hakrmas products.
Yeah.
Well, first of all, I'll start with what Mint actually who had served it served what we call prime customers, those that generally have credit scores above seven hundred. And when we thought about our vision as a consumer platform, we want to have a self driving platform where we can serve you early on in your life to help you build your credit all the way to how do
you build wealth over time. And so given that vision, we actually brought Mint and Credit Karma together so we can serve all of our customers, from those that need to build credit to those that have great credit scores but also have different needs, all on one platform. We actually had more than what we had assumed convert to
Credit Karma. In fact, the majority of our customers converted to Credit Karma, particularly because of all the capabilities that we have on credit Karma to be able to serve our prime customers.
There are a.
Very small court of customers that did not convert. These are customers that really their love is budgeting tools, budgeting goals, and those are some of the capabilities that over time we're building in credit Karma, but are not available today. I would tell you some court of customers were very sad that Mint went away, but actually the majority of our customers are delighted to be on credit Harma.
Now I'm going to ask him off set whether he's delighted or heartbroken, but I'm interested ss on.
Lastly, we did just get some recent news out of the IRS.
Basically, there's going to be a free tool the US government, in particular supporting Americans who want the option to file directly with the IRS as ultimately to be in charge of their own taxes.
Is this going to be a competitive threat? Are you going to lose people to this free tool?
I mean, the short answer is no, because free is already available to all Americans today and so with what the IRS has launched, it's just yet another free tool. So it is not a threat to us because freeze are already available across all private companies. We also don't believe that it's the best use of government money to come out with another tool that's free where free is already available.
It's not the best use of money.
We'd love to see more money go towards the service that the IRS provides to take very good care of the citizens. But nevertheless, as far as the threat for us, it really.
Is not into its CEO Sosan Ga Darzi Sossan, thanks so much for joining us.
Appreciate it.
Thank you for having me.
Well, coming up, we're going to be joined by Amber Atherton from Patron to talk all things gaming and VC.
That's next.
This is Bloomberg.
Now in today's VC Spotlight.
Let's talk about the health of the video game industry, of social networks, of groupings, and whether we might see actually an optic in investment in the second half of the year into these sorts of processes. Amburatherton's with us partner at the early stage at benufirm Patron, and you're all in on sort of networks of people, of thinking and of gaming interaction online.
Having been a founder now a VC.
What is artificial intelligence doing to the conversations you're having at the moment?
Yeah, I mean we're good to be back. Thanks for having me. I think after selling my startup to Discord, I saw firsthand that this younger generation really see gaming not just as entertainment, but as a social networks where
they hang out with their friends. And I think you're seeing us move towards a more community driven multiplayer internet, and so I think when you see AI as part of that story, I mean if you look at Nvidio, you look at Microsoft, all of these are companies that started out serving the gaming market, and it's not a
surprise that they now have an edge on AI. Because they start out serving gamers who are very early adopters to new platforms, they have huge demands in terms of graphics and infrastructure.
So I think we're very excited about startups that.
Are using gaming as a wedge to further improve AI.
Wally and Brot, I want to talk about one of your most recent investments. Caroline and I were talking about it a little earlier. The company Aria just announced yesterday. It's interesting because AI sort of goes into the background
there with sort of this AI powered concierge. Talk a little bit about what exactly this investment is because it's not completely in the world of gaming, as in your playing games against somebody else in a virtual world, but it actually takes a real world approach right exactly.
And I think part of Patron's thesis is that gaming can be a source of good and better goodness for
the world. And so I think when we're looking at gaming, it's from a broader lens of yes, we have mets and studios, but we also look at how gaming is influencing border consumer technology and Aria is a good example of this where AI doesn't have to completely replace human interaction, and in fact, what Aria is doing is helping couples increase their relationship strength be better partners to each other through this wonderful hybrid of an AI concierge, physical boxes,
and a lot of content. So we look at it a much border lens, and I think companies like Aria have a really great shot at using AI in a way that doesn't isolate human connection.
Digital human beings is the the to surround Alterra a different portfolio company of yours, and you're investing alongside the likes of Eric Schmid in this one particular, it's about lab building agents and how does that fit into a gaming context. Are you're going to be gaming alongside agents. Are they going to be within your in the world's ones creating.
Yeah, I think it's very rare as an investor to witness a paradigm shift in terms of how humans interact with computers. So when we met the founders of al Terra, we were very excited about what they were building. You know, in the initial phases, it's very much you're able to game with an AI agent instead of a friend or with a friend, But where that's ultimately going is toward.
Digital human beings.
So I don't think it's inconceivable to think that in the future we will have AI agents and AI friends that provide more than utility book companionship, friendship, and you're able to play play games with them. They're able to assist you in your life. And so I think al Terra is a very interesting example of using gaming as a wedge to ultimately the much much border consumer market.
But you wrote a book about online communities. They're real people having real relationships via internet. Now we're thinking about how we're going to be playing against totally false agents who are not actually real humans, and we're thinking about building our own intimacy via bets that you're making through the power of AI. Are you feeling comfortable with the direction of travel of artificial intelligence and humanity at the moment?
Do you think it's ultimately helping or hindering in some way?
I'm, you know, in the business of optimism, So for me, it's that AI is not replacing humans. AI is augmenting humans. AI is bringing a new dimension of fun and personalization into so many different consumer interactions. And I think for us as patron, you know, we invest across this spectrum of play, and I think it's very difficult to see where consumer technology and AI is going if you don't
understand gaming. So for us, we are excited about founders that are operating at the earlier stages, you know, seed stage, and are using AI to really be a force of good in the world.
Amber who's the platform winner in the world that you envision in the coming years? Is it iOS? Is it Android? Is it Nintendo? Is it Microsoft? Is it Sony?
Or is it somebody we're not even talking about.
I think you've mentioned a lot of very interesting names there who are all experimenting at the forefront of you know,
different technological edges. Whether it is ARVR, which we talked a lot about last time, Caroline, or whether it is AI and so I think that looking at the gaming stocks particularly, you know a discord if you look at Reddit, one of the most oversubscribed IPOs, and actually even a company like web Tunes that is adjacent to gaming, those types of platforms are very very interesting in terms of where the next generation is spending their time.
You know, they're growing up on games.
Half of us eight to ten year olds playing Roadblox every single day. So I think looking at those stocks and those gaming companies is where you'll see the platform breakouts.
And we're going to have to leave it there.
That's patron partner Amber Atherton joining us from California, Thanks so much.
Now.
On Wednesday, fired SpaceX engineers filed a lawsuit against Eno Musk for sexual harassment and retaliation. That was over in a California state court. Now this escalates their multi front legal battle with the billionaire chief executive and his aerospace company. Now, the Calllifornia suit claims the Musk posted sexual photographs, demeaning commentary,
and chose to fire employees for speaking up. Josh Idelson joins us now for more to discuss eight employees here, and this isn't the first time we've heard.
From them, that's right.
This is a case from twenty twenty two in which, as you said, workers engineers say that because they worked on an open letter raising concerns about the company's culture and Musk's behavior, or asking whether the company's policies were being applied equally to the chief executive, asking whether this was the kind of culture they wanted to bring to
mars that as a result, they were fired. They brought a case to the US Labor Board, which issued a complaint saying they were illegally retaliated against in violation of federal labor law. Now that case at the Labor Board is essentially frozen by a federal court injunction because SpaceX responded by accusing the US Labor Board of having an unconstitutional structure. So now this is a different front where these workers are saying that the company also violated California's
state law. And in this case they are able to name Elon Musk personally as a defendant. They're also able to seek damages that the Labor Board can't.
Now we want to get to the response from SpaceX and eal mask. They've not immediately responded to request to comment on the lawsuit. They previously denied though rom doing as you said and said the fired employees violated policies and that Musk was actually not involved in their termination.
But ultimately, have we seen responses coming from the business more coordinated fashion to try and tackle at least some of the issues that are now being circulated amongst citizens as well as those within the company.
Well, we've seen in the Wall Street Journal, for example, Gwen Shotwell, the company's president, saying that allegations that have been made don't reflect the culture at the company. The lawsuit that these fired engineers filed seeks to get a court to force the company to change its policies to address what they say is the company and the CEO knowingly creating a hostile work environment and retaliating against people
for bringing it up. They note that Musk has publicly marked misconduct allegations against him in the past.
What could the implications be for Space if these engineers are successful in their lawsuit and the implications for Elon Musk as well.
Well. They're seeking damages.
They're seeking in an injunction that would force the company to change its behavior. One question here is how much the entities that SpaceX contracts with care about this, including the US government. Elon Musk has shown a lot of tolerance for controversy and for legal battle and for appeals, as we've seen in a number of cases. We will see if the company chooses to change anything in response to this escalating controverty.
Does it have any implications for Tesla or any of Elon Musk's other companies.
Well.
People who've come forward with allegations have said that they see patterns at each of these places in terms of the company's behavior and in terms of the CEO's willingness to continue taking the approach that he's taken, even in the face of public embarrassment and allegations that the company again is denied wrongdoing.
Bloomberg Josh Idolson here in New York. Josh, good to see you. Thanks for joining us on this to appreciate it.
Thank you.
Great to have him in the studio meanwhile, But that does it for this edition of Bloomberg Technology. You don't want to forget to check out our podcast. You can find it on the terminal as well as online on Apple, on Spotify, and I heart Tim. It's great have you sat next to me. And there's so much more to digestoing for in the rest of the day.
Should we do this again tomorrow?
Yeah?
Baby, night?
Okay, cool, good stop by here.
I'll be here to make your day a little bit longer.
I'll see what will be.
Watching the all important Tesla AGM a little bit later.
Stay tuned for it.
This is Blomberg Technology.