From the heart where Innovation, money and power Collie in Silicon Valley, NBN.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.
And Caroline Heidet Bloomberg's world headquarters in New York and Iurmed Lovelow here in San Francisco.
This is Bloomberg Technology.
Coming up the tech rally ed is it exhausted? Strategists sour on the sector amid a muted reaction to Nvidia's results.
Will break down the outlook of mid Jackson.
Hall plus by now pay later company a firm beach revenue estimates in its fourth quarter results. There is an insane share reaction. We will speak to the CEO, Max Left Chin.
And China's major one falls after warning that growth in its core meal delivery business it's going to slow. Mid economic turbulence. Will have that and so much more throughout this hour. But first let's check in the Powell result.
And actually he.
Manages to stick to his usual party line, no great surprises, A hawkish tone coming from the Fed chair over in Jackson Hole. We're looking at the NASDAK just off about a tenth of a percent. As we see bond wheels just push on the higher side, particularly at the front end, we're up about four basis points, maybe a bit less on the longer end of the tenure, but notably a little bit more of a hawkish tone, but not one that up ends the market entirely. Ed, I'm looking at
bitcoin just off by about three tenths of percent. Dollar did track a little bit higher throughout that speech. But moving on to what the picture of the week has been because amid this volatility, amid these warriors of China, amid the macro sentiment turning sour, in fact, we hold onto gains through the Nasdaq one hundred.
Throughout the five days, we're up six tens of percent.
Remember the heavy heights we lifted into a head of Nvidia and posted videos results.
But some of that's been starting to fade a little bit. But still a week again, Zed you got the micro Yeah.
I would say that it's definitely pow that's impacting the technology sector.
But we still have earning stories.
Marvel Technology, a chip maker, we discuss less networking and hard disk controller maker down eight percent, biggest drop since last year, lowest level since May.
An AI relevant story.
That the profit outlook for this quarter was in line with estimates, and the street was basically like meth you know.
And they've moved on.
But it's interesting the psychological change for the market around AI.
This is unbelievable.
I don't do this often, but affirm you know has rebounded. There was a pretty normal earnings call. We'll get into the numbers with the CEO. It's up twenty eight percent. I don't normally do this, but I went on HRH on the Bloomberg terminal. It's a four standard deviations move. It's only happened once, so there is a big question of what.
Is going on there.
It is a popular name on Wall Street bets. Maybe that's a part of the story. We'll ask the CEO. Then I go back to Nvidia. The enthusiasm from Nvidia posts its earnings, which we know on this show we talked about them knocking out the park. We're now down four percent and it's caught up with the rest of the market. Maybe it's a kind of sell the news a day late kind of story, but that's pretty credible turnaround. Everyone has kind of said, you know what, let's move on from the Nvideo and AI story.
Yeah, are they ready to and really We've had plenty of names big market analysis coming out just wondering whether this market rally is exhausted. Let's get Katherin Rooney Vera's take, chief market Struateturist over at stone xt Group and Kevin we've heard from the likes, for example of Mike Wilson over at August Stanley, just talking about how this signal, the fact that in video failed to boost really the overall market is a technical signal that this rally is exhausted.
Are you, for one agreeing with that or not?
Well, when you look at the chart of videos back to its seven year forward pe multiples, so that also tells us something at Stone Exit with our treating dusk desks, we have seen an increased interest since the past three weeks since I came out recommending the protection on the triple Q option with puts, either put spreads or naked puts. That has been remarkably profitable and our clients have benefited
from that perspective. And that was because Caroline, we thought that tech was overdone with almost your date fifty basis points appreciation at that point. Now in the macro context, with the FED trying to persuade markets to believe it that it's not going to change its two percent target, that it's serious about its two percent target, that has
a strict interpretation of its dual mandate. That to me says that twenty twenty four is unlikely to be as much of a boom for this sector as we saw it in twenty twenty three.
You know, we're just a couple of hours postpoal.
So where we've left it is that it's too early to declare victory on inflation. They're going to be careful about raising rates, but I think the conclusion is higher rates, steady for longer. To your mind, Catherine, how does that relate to the technology sector, How do we price that into the tech sector in public markets?
It seems that the markets have not priced in that reality. Market's still priced in easing next year. So that tells us that currently priced into multiples is the best case scenario. So the soft landing, which is of course two percent inflation target attainment with no economic contraction, I think is unlikely to manifest unless the Fed does, in fact, either
implicitly or explicitly change it's two percent average target. So if it's serious about that target, and it does have a strict interpretation of said target, then I think that twenty twenty four could be a difficult one for tech, and I would expect that the most intrast rate sensitive sector such as tech, such as consumer communications and consumer discretionary would have a tougher time. So I do like I think utilities is up today. Now, I think that
we have to be more defensively positioned. I like cash, I like goal, I like sectors that are defensive going into twenty twenty four because the fen's going to be in a tough spot. Either go for that two percent target and maybe even have to hype further, which has been my long health contention, or change it explicitly or implicitly.
I want to go back to this micro narrative though, because you paint a really clear macro picture. But there has been this almost ability for tech to outshine because of the productivity boost manufacturing into artificial intelligence. Now I know that that's been questioned the moment. I just want to go to what Steve Slsnak had to say on Blueberg Television a little bit earlier about well, the concern about lack of institutional buyers at this moment, just take a listen, Catherine.
You didn't get the institutional follow through that I think you got, you know, from the from the first round of buying, and without follow through and with perhaps a little profit taking, you know, you up you end up with a messy, messy, kind of blah day that you had, that you ended up with yesterday.
So I just returned back to it a little bit.
Are there any names that are still the magnificent seven, for example, going to tread water because of AI?
Or is that done?
No?
AI certainly has a long longevity and long path therein, but a lot has already been baked in in this euphoric AI. Now markets tried to price in ahead of time what's going to happen in the next five years. It's already been priced in, so AI has to deliver now. Certainly it is positive for productivity, but my concern, perhaps reverting back to that inflation story, is productivity at current levels would have to accelerate meaningfully in the near term.
That means that AI would have to really deliver in the next year to really compensate for four percent inflation. In other words, productivity is not sufficient at the current growth rate over to make up for four percent inflation, so inflation stays around. AI is not there yet, and the Fed is going to have to stay on hold for the entirety of next year. Again negative tech or potentially even hype, because inflation is very likely to reaccelerate
under the scenario of soft inflation. This is an economy based on consumption. The consumer is strong, real wagers are positive, and they're trending higher. That is not a good environment either for yes it's two percent target, or for rates coming down.
You know, Caroline, I sit here on a Friday morning asking myself what happened?
What weird week?
Twenty four hours ago, JP from Franklin Equity Group told us that the nvideo results were like The Godfather Too, where the sequel is as good as the original, but on a two day basis the stocks down four percent.
It's like it never even happened.
Yeah, or you got it in within that And remember how far we've charged high more than two hundred percent gain on this name throughout the year, the key outperformer of choice. Maybe it is just this moment to profit take but I mean to that end, Catherine, it's really fascinating that you say sort of AI has got to deliver.
Well, it kind of has been, at least in video.
I mean, we've got currently earnings expectations to twenty twenty for their fiscal twenty twenty four, one hundred and seventy one percent growth for the next quarter that we're currently in one hundred and seventy eight percent revenue, so doubling even out until their first quarter of twenty twenty five their fiscal. So it certain what more do you need to see improof in the pudding that really AI is here and is driving revenue for not just in video.
Yeah, I would have to see it flow through into the productivity numbers. So we have to get that boost in US productivity in a meaningful way. Remember, in the past six quarters, productivity was only positive three of them. So yes, the last quarter, I'm not mistaken, around three point seven percent annualized was positive. But I would like to see AI play into the real economy. Caroline, AI
everyone's talking about it. You know, you go into the corporate earnings and guidance, and corporations are well intended, but maybe not all of them are deploying it. So I think deploying takes time, and certainly we're pricing that in today, but it has to flow through to the real economy of course, at the next five years to offset inflation. And na VIDIA very interesting and I think seven reverting back to its seven year multiple is great.
I'm not saying, you.
Know, sell all of your tech sectors, but what I am saying is that volatility to protect those positions is relatively historically cheap, So why not deploy it rather than go into a potentially volatile twenty twenty four. You know, for lack of a better word, Nick, if you want to be protected.
You know, I'm so glad you asked that, Caroline, because we're at the tail end of earning season and it's almost September, and we'll be back in the next one and you wonder, do we go through the same expectation from an AI driven growth cycle that we did in the last three months? Extraordinary, Cafrine ruoneybera happy Friday to you, chief market strategist. As stonext Group good Way.
A firm out with its earnings after the value yesterday and what a market reaction on the back of it.
GMV ultimate transactions.
Being made basically rising some twenty five percent. It's managing to bet on profitability as well, really guiding us and for a forward looking expectation that really many analysts felt was very solid.
Here, look at the market reaction. Yes, you're up twenty eight percent.
Now, I know, Eddie, you've been talking all about how many standard deviation moves this actually is. It is an enormous move, but actually he brings us back to where shares we're trading at back at the beginning of the month. So it just shows you the volatility that we've had
amid rising interest rates. We've got to dig into all of this with Max Levchin, who of course is the CEO of a firm, and well notable move on your stock, notable reaction from some of the analysts tell us about how sustainable this is this transaction pickup?
Does that last into the next quarter.
Book.
We did release scats for next quarter, so we're feeling thoroughly optimistic, as you can tell in the numbers. You know, as much as I'm enjoying the stock market reaction, we're very focused on the long term. So our goal here within a firm is to keep scaling. We're very excited to be able to deliver some excellent results this quarter. The fiscal year, we beat across the metrics, and so
we'll just keep on doing what we're doing. We are definitely energized by the growth and in particular the growth of the card product. We work very hard for quite some time to deliver just the really innovative product with this firm card, and it's finally showing real signs of stickiness.
And just very excited about that.
Max.
We note the guidance you know, listened in on the call. You know, respectfully, nothing out of the ordinary. Your stock's up twenty nine percent. Why do you think the stock is up so strongly?
If I knew how to predict market movements of my own stock or any other stock, I'm sure I would have a different job. I just know how to build good products and write software, and that's what I'm going to do.
Nice answer, I love that.
But talk to us a little bit about that card you let us there, and the fact that people consumers in this moment are looking for different ways to be able to pay. Of course, they're able to pay in a normal debit transaction, but also then decide after the match whether or not they're going to be.
Paying in installments.
How is that pick up growing across the United States and North America.
So there's a real generational shift.
I think the notion of just put it on your plastic think about it later something that worked for the generation that came perhaps before mine, but the ones that are coming after mine are very differently minded. They do like to know when they're done paying off the things
they borrowed for. And this idea of packaging it all into a single card where you have a very crisp choice between paying now or paying over time, having the opportunity to make the decision a priori or after the transaction, which is what our card allows you to do, and not having to learn too many new concepts.
It's just really really powerful by not pay later.
Of the last ten years we kind of started, the movement, really penetrated the younger generations, and yet still it's less than one.
Percent of total addressable market.
But no one's ever packaged it into a single elegant card that just allows you to transact the exact same way you always do, be it at a grocery store or online or where we're in between, and have full access to both buy now pay later functionality and a simple pay now functionality and that's what this card is, and the demand is great. So we can see that consumers are using a firm in store almost an order of magnitude more with.
The card than before they get it.
The transaction frequency is quality three x between the card and non card, and so it's just clearly the product market fit that we've been looking for.
Max, your CFO, Michael Limford acknowledged that actually twenty twenty three has been really hard for a firm, that clearly things have improved and got better into the second half of this calendar year. What specifically has changed either in the environment, in the consumer or in your product?
You know, I think we operate and think and act in longer increment than perhaps the impatient stock market wants us to. But we refuse to cave to the quarterly game. Instead, we think in years and ideally in decades. And we started planning for the results of today a year ago and the fact that we're able to deliver on them now is just a predictable perhaps but a huge response
and result by our team. The volatility of the interest rates all through last year, the fact that they moved up as quickly as they did when unexpectedly made it difficult for our KAPA markets to decide cap market partners to decide how to price our product. Now that things are a little bit more stable, we're able to execute that much better.
I'm just going to ask a poker bear one and then with Jeffreys coming out saying results are driven by a combination of higher interest income and in need lower expenses, so nothing to do with technology or growth, what do you say to that.
I think people are welcome to judge our results, but they're pretty strong and so I think that that they speak for themselves. That said, I spent majority of my time worrying about our technology, staying up long hours working on the card, making sure the cards scales as well as it does, finding efficiencies in every place like customer service, to response time or our checkout. The only thing that
makes this company tick is our excellence and technology. So I fundamentally disagree with nothing to do with technology.
Firm CEO Max Levchin, just wonderful to have you on the program post earnings this Friday. Thanks for your time and we'll see you against you and I'm sure now coming up here on bloom bag technology. Remember when I took a fruit rides in way most drivers that was me there, I am well, not everyone in the well. This speaks to the story because I have to be honest. Not everyone in the bay has been a fan of
autonomous vehicles. We're gonna have more on the growing backlash against ROWA taxis coming up next, plus SpaceX hit with another lawsuit from the Department of Justice. We're going to discuss the details of the suit and how Elon Musk and his company are responding. Things that drive on their own, things that get launched into space. Everything here on Bloomberg Technology. Okay, time for talking tech. First off, Ali Barber's cloud service says it is open sourcing it's QUENVL and QUENVL chat
AI models for computer vision and conversation. The new models are intended to help interpret and extract information from visual data in both English and in Chinese. One can test out the new models on Ali Barber's model Scope or an AI platform.
Hug and Face. Just on the show yesterday, And.
India's newest unicorn is winning patrons over with its ultra fast grocery delivery service. Despite the nation's gloomy venture funding climate, Zepto has managed to raise two hundred million dollars of fresh funds at a one point four billion dollar valuation. It was founded by two twenty year old Stamford University dropouts, Classic, making them the youngest founders of any Indian Unicorn plus Cruise and Waimo are facing growing backlash here in San
Francisco over traffic concerns caused by the robotaxis. A number of mishaps have occurred where cars of block traffic gotten stuck or even crashed into other objects. Tensions over driver's taxis are part of a broader conflict over the future of autonomous transport. Big story out from our team in SF and around the country.
Carry check it out in dot com.
Yeah, let's do a little different form of transport at least maybe in the future. And some fighting that's happening therein ED. We've got to talk SpaceX, haven't we under scrutiny at the moment Justice Apartment for discrimination.
Now, this is something that's kind of resurfaces from time to time.
This time it's claims that say SpaceX routinely discouraged refugees people granted asylum from applying to work at the company. I'm really please, say er johnsonbag New's Global Business Space editor is hey with us and Eric. I say this comes up time and time because it seems to be an ongoing narrative that Elon Musk himself pushes back against. Is that actually they're unable to hire people who aren't permanent residents of the US.
Right.
That's the thrust of the lawsuit filed yesterday with an administrative judge in Washington. The Department of Justice is alleging that for years SpaceX has discriminated against refugees and people who have been granted political asylum. You know, it's the latest high profile case brought by the Department of Justice against not just you know, Elon Musk's portfolio of companies, but also companies like Walmart and others who've been alleged to have engaged in discriminatory hiring practices.
Eric, really quick, We've had some operational updates. SpaceX has had a lot going on this week, because some of it seems delayed.
What's the latest.
SpaceX has a lot going on. It's going to conduct a static fire engine test potentially later today to test its colossal starship rocket engines. You know, I'm sure you remember in April it's explosive debut. SpaceX has made a number of upgrades to the technology, in particular the launch pad,
which was decimated by the launch. So they've got a water deluge system that they're going to test, which is essentially it must described it as a towerhead pointed up at the rocket to diffuse the energy from it, and a number of other technologies that they're going to test today.
Fantastic.
We'll keep an arrest of all the things that are happening in the world of SpaceX for Eric Johnson. Really nice to have you here on the show. Thanks for running us all through it.
Welcome back to Blame It Technology. Ed Lovelow here in San Francisco.
I'm Karen Hired in New York.
Let's get a check on these markets as we have, of course a volume down kind of a Friday amid one is of course a summer week. But the key macro driver is one Jaypowe, who's been over at Jackson Hole discussing basically that they're still steadfast in they're focus
on inflation, but actually managed about back higher. The hawkish tone had perhaps depressed and as that one hundred a little bit earlier, but now I'm looking at it up a tenth of a percent, so managing to tread water in the face of some of this more hawkish tones focus on fighting.
Inflation with interest rates that are going to stay at these sorts of levels.
In the US, I'm looking at a ten year that does react a little bit more, up about one basis points. The shorter end had been moving up about four basis points, but that knee jerk reaction just settling.
A little bit ahead of the weekend. And I'm looking at Bitcoin, which.
Had been lower versus a higher dollar, but maybe that just soothing a little bit post power. Let's digest what's happening on the micro as well, because if we settle back in to a trading range and that profround. I'm looking at the Warner Brothers Discovery down by three point three percent. This is we know that the striking actors and of course the writers has real world consequences on whether you can see the next installment of June of Godzilla of Lord of the Rings been pushed back into
twenty twenty four, and so shares a rounder pressure. I'm looking at Work Day, they managing to outperform and back of its numbers. Some analyst seing some growth of subscriptions of up to twenty percent over the next twelve months, so managing to be a bit of a shining light on the day after its numbers, and in video though after its numbers.
The euphoria the outperformance.
We think, look, it's still up five percent on the week, when on the day we're down by almost four percent.
So clearly a.
Little bit of digesting of how far and videos run up, but also interesting what we've heard out of.
China with them as well ed.
That is the story in picture in technology markets. This is a technology story that you do not want to miss. Let's talk hacking and how an eighteen year old and a seventeen year old ended up being at the center of a seven week criminal trial in London for their role in a hacking group that's cracked the likes of Nvidia and Uber, and a group that cyber experts have called quote unique for its effectiveness, speed, creativity, and boldness.
Bloomberg's Catherine Gemel has all the details. This was a fascinating read. Grand Theft Auto the video game at the heart of it. Just give me the basics here, help us understand.
Yes, thanks for having me on So there was a seven week trial in London court this summer involving Arian Kurtash who's an eighteen year old and an unnamed seventeen year old who we can't name because he is a minor, and they were both accused of a twelve count indictment and that included hacks against a UK phone company called BT's, including hacks against Nvidia and then solely for Arion, hacks against gta's much anticipated sequel, GTA six, and Uber and UK fintech company Revolutes.
So you know, they.
Were accused of using a number of different techniques, included social engineering, pretending to be contractors in order to get into these company systems, steal data and then upload it onto the Internet, and also asked these companies for ransom.
I mean, the whole story is absolutely fasting weed and the way in which you know, ultimately we're seeing the
lawyers fight back. I really talk about how this is vulnerable individuals with severe neurodevelopment disorders, how they're treated by the police and the courts, and they're really focusing perhaps on the autism of one of the main players here, but I'm interested in more about the underlying desires of what lapses is up to the group that has been seen is just so effective efficient in the way in which they're managing to penetrate big businesses.
Why are they doing it?
Yeah, exactly, I mean, I think it's important to point out that it wasn't just added on and the unnamed seventeen year old two were involved in this lapse of hacker collective. Over the course of the trial, it was also agreed by the prosecution of the defense that there was other individuals involved in this group who who you know, authorities can't pen down. I mean some of their motivations where for money, for notoriety, you can get a lot of credit online and forums and such for these sorts
of hackings, and also just laws. I think, you know, it's important to remember these are just teenagers and to be able to get you know, important clips of GTA would would be quite fun for them.
So let's focus on a case study or an example that you reported, which is grand theft auto a rock Star Games title.
What happened in that instance?
Yes, so in the rock Star Games hack that was done solely by Curtaje and that was while he was on bail for previous hacking charges and what he did there was along with the other lapses collective. He used techniques called social engineering, which meant that they stole contractors information and used it to be able to sign onto rock Star system.
They then downloaded videos and source.
Codes of the new GTA game, and that included ninety live gameplay videos, and then they uploaded that onto a GTA forum and asked rock Star to contact them, assumably for a ransom.
So that meant that, you know, on these forums.
All of these never before seen clips of this game, we're just out there for everyone to faint.
As it stands, we don't actually know whether any money was were given to these particular groups, but for now Katherin Gammel absolutely fascinating read. Thank you for bringing what has been quite the showdown in the courts. Meanwhile, let's turn to the showdown that is China's macro economy and some of its micro players made one. Of course, we mentioned it earlier, the firm falling on well, the turbulence
being faced by the economy. We want to dive into all of this after its numbers and the digestion of it with Isabell Lee and Bloomberg's Henry Ren great to have you both here and before we go macro, just go micro for us, Henry, what did we hear? It seemed to be the forecasts that were worrying people.
Yes, exactly. The results itself isn't bad.
So the company recorded thirty three percent of revenue grows in the second quarter, so that was the fastest pace in two years. However, it was really the outlook that has been disappointing. The company set on the earning score that it's food delivery segment, which is it's cash CAW is going to it's your growth as well as auto growth will be missing analyst's previous expectations.
And that's because of two reasons.
One is because of the extreme weather, especially in the northern part of China, or because of the flooding issues in areas surrounding Beijing, but also as well as the macro slow down as you mentioned, because the worry is really about the Chinese consumers because of these macro issues, haven't been spending so much and that has been the key concern for the stock in Hong Kong trailing.
There are loads of Isabelle competing forces in China. Right The story was we're coming out of that kind of delayed pandemic era reopening. Then the Chinese government started to pull back its regulatory crackdown on the technology sector, and the technology sectors in the early part of any season seem to suggest the Chinese consumer is strong, but they all kind of contradict each other, and those stories have moved on really fast as well.
Yes, you kind of have to really keep a close track on the Chinese narrative because it can be a bit confusing. So in the beginning, the rebound didn't happen as people wanted it to. So now people were hoping, Okay, let's hope for some weakness, so we get stimulus, but then when the government still didn't want to give that, it's sort of a classic be careful with what you wish for case. In May Twan, as with other Chinese tech peers, is the barometer of the Chinese economy, and
we're seeing that consumers are being hurt. We have prices in China falling, exports are struggling. One in five youths don't have jobs. So this is a clear sign that the consumers ahead won't be as well positioned as they are right now. Because Henry's right. This was a good report, but that was for the quarter ending in June, so ahead is a lot murkier, and we have heard from the CEO himself that it is kind of looking shaky for them.
I mean, it does feel shakier in China and certainly the different central bank policy making that has to happen over there visa vd US, but it's a global theme.
We don't know where the consumer is going.
We're concerned about how much they're going to be spending on experiences, on going out isabell. That seemed to be what propped us up in the previous culture, at least, was the fact that everyone wanted to do things rather than spend on things tangible in.
Nature exactly right. So for a while it was a monolith. The world was moving in lockstep. Everyone was recovering from the pandemic. But then we all recovered at different paces, so we looked at us closely. In America, consumers are spending way faster than people in Europe, for instance, or maybe even in China, so people are recovering at different paces.
And the thing with China is consumers are largely domestic, so it's different for them so how Chinese companies are doing, how the tech sector is performing is kind of a clear sign of how the Chinese consumers are feeling, and how they're feeling isn't really that great.
But we have news.
For instance, China today it unveiled a further easing of its mortgage policies that kind of pushed a rallies so far in equities, but then it kind of pared back. So we can see China trying a little bit to boost spending, but for now it's not looking that good.
Yeah, Henry Maytowan, Honestly, it's like one of the China technology names we discuss less often on the show. But like so many Chinese tech companies, it's multifaceted. It has many different arms growing unevenly. Was there any strength, any pocketar performance within may Ones Offering.
Yes, definitely. So it's food delivery service.
It's half of its business landscape, so it's definitely the most important one. Has been doing pretty well, but as we said, for the next quarter, it can be more difficult for them. It's a group grocery buying business, so that's a business of offering residents at their neighborhoods for them to pick up the groceries at the local or grocery shop. That business is growing very fast. However, there is a concern about competition. So the competition is from
players like PDD or pindor Door. So these players are are crashing crashing in and trying to grab more market share from may Twan as well, but also from the other side. So for example, for the restaurant, table booking and these kind of low or services segment, it's also facing competition as well from Baydance from some other players. So these are the competitions that Matewa has been facing and that just added up to the micro concerns facing may Twan at this point.
All right, fantastic team coverage Bloombergs Isabelle Lee and Bloombergs Henry Wren, thank you both. Sticking with technology in the Asia region, as we look at a tiny Japanese factory that's hand crafting eleven thousand dollars mics for some of the world's best vocalists. Sony Tayo, a subsidiary of the Sony Group, turns out some of its top audio products well giving people with disabilities a fair chance in the workplace.
Listen to this.
From Drake and Rihanna to Mariah Carey and doctor Dre The C eight hundred g studio mic used by top stars comes from one of Sony's most treasured places.
This Sony factory in southern Japan is known at the heart of its audio business, where workers craft it's top of the line headphones, earphones, and microphones all by hand.
To accommodate workers with various physical challenges, Sony created a so called cellular manufacturing system, where a single employee is responsible for a given product from start to finish. Koitikano has been making NDR headphones for the past seventeen years.
Johats got I started here when I was eighteen and tasked with making the whole headset myself, so I feel personally responsible for it.
The company says its revenues tripled after adopting this method in nineteen ninety nine. Sony Tayo serves as a rare example of hand craftsmanship winning in the age of mass manufacturing. It's also pushing forward the vision of Sony co founder in Masaru Ibuka, who wanted to give people with disabilities an equal chance to compete in the workplace.
We Guardikio percent of employees with disabilities. We are contributing every day to both son and group and diversity influence in society.
Now it's morphed into modern day proof of the enduring value of human skill.
Theres We sometimes hear feedback after the products appear on TV or in magazines and online, when customers say they're glad they bought it or they enjoy a particular feature. It's like they're really noticing my work. That's rewarding.
Well, a great story Bloomberg's career me maur there.
Meanwhile, coming up, do you want to get instant care for your child's pediatrician? In just for fifteen minutes, we're going to be speaking with the CEO of telehealth Startups Summer Next on the state of healthcare their business. Also intrigued as to how chatchy BT is perhaps tempting some to think they've got all the answers themselves. From New York, From San Francisco, there's a Blomberg Technology. Let's focus in on the startup landscape for a moment and digital health
in particular. Pediatric tell Her Health startup at Summer Health. It aims to make responses to common medical questions for children easily accessible through its platform in a matter of like fifteen minutes. The idea it seems to be resonating not only with users but investors too. We've got Sequoia, Capital, Box Group to name but a few standouts. I lend to Silver's with us right now, summer Health CEO and founder to talk about.
And then the growth trajectory and what makes you different.
I'm a mum who, of course has that panic in the middle of the night when a fever is going to a certain level and do you take your child into A and E or not. We luckily have access to telehealth through the benefits that I have here. How is what you're offering different from me getting my usual telehealth?
Yeah, Caroline, thank you and so much for having me on. Summer Health is a pediatric telehealth platform that connects patients to providers in under fifteen minutes. It's a very human feeling experience, as you described, because you have kids.
I have three kids of my own.
There is this visceral feeling of bewilderment or panic when your child gets sick and you don't know what to do. Summer Health aims to turn your phone into its own doctor's office, and so with a simple text message in under fifteen minutes, we can connect you straight to a pediatrician. We're live in all fifty states, which makes it really easy if you're traveling to get that kind of care. We're different because we have a very human centered approach.
While I understand that AI.
Has become this big wave and this big face, we use that to power a lot of the back end and administrative work of providers so that they can get front facing and do what they love, which is helping patients.
I'm still kind of questioning what exactly the differentiation is though, in that I can also get a person on a phone. Is it just that they're directly pediatricians slightly different hand, Yes.
We've got licensed pediatricians in all fifty states who really get to know you. What we aim to do is not just urgent care, but rather whole human care. And so when you text us, it's not just that middle of the night, my child's throwing up, but it's also what should I pack my child for a nutritious lunch for school, or how can I deal with separation anxiety
at the start of the school year. We offer a lot more than just urgent care, which is where I think a lot of telehealth platforms today have sort of faltered.
Ellen, Good morning from San Francisco. You know, it's interesting you were backed by Lux Capital general partner Dinoshaki as somebody we know on this program very well, and at the time they did your seed round, they put a lot of emphasis on you a founder, like a lot of experience as a healthcare executive. My question is why did you think you needed to make this app and this company?
What gap did you spot?
Yeah, so I had the fortune of getting to build a very large telehealth platform prior to starting Summer Health. But from my own personal experience, I realized just how powerful I could feel as a parent knowing that my children were healthy if we had constant access to care that is not available in today's healthcare environment because there
is a huge shortage of pediatricians. Two years ago, there was a survey done by the American Medical Association that one in three pediatricians were planning on leaving their practice within the next two years. And looking back two years later, we've seen that about thirty three percent of the pediatric workforce has left.
And so what we're trying to do.
Is increase the supply of pediatricians and make it much more accessible. It's something that no other telehealth company has really thought about, and we've leaned very heavily into this message based care to make that a possibility.
I have lived in this country for almost six years, you know, a completely different healthcare system from the UK where I'm from, where insurance plays such a big role. What is your business model? Do you charge the consumer directly? Are you dependent on insurance coverage for your users?
Yeah?
Thankfully, Because we offer entirely message based care, we've been able to keep the cost rather low for our patients. Right now, Summer Health only costs twenty dollars per month, and that's for unlimited usage of the service. So we really aim to be accessible to a very broad swath of the population.
I'm looking at your prior experience care with Hymns and Hers as one of the companies that stand out as your experience. You're also over at Twitter for four years at one point. Rip now X, I'm interested in when we are you talked about AI artificial intelligence and that pervades all of the companies that I just mentioned. How are you fighting parents desire to just get all their answers from chatchapt, from.
Bard and make the feeling as though they've got it all their fingertips.
Anyway.
Yeah, we think about this a lot at Summer Health because I think there is a temptation to go to a service like chatchapt and just ask your questions, but chat SPT doesn't have a lot of the backstory that we get from those frequent touch points.
We tend to know a lot more.
About your child than even your own pediatrician because our parents come to us multiple times per month asking those small, in the crack style questions, and therefore we're able to give you extremely personalized care. But we're not doing a we're not shying away from AI, and we're not doing without it.
We believe that there's a lot.
Of power in powering the administrative work that our providers are doing. So a lot of the back end of Summer Health is still powered by artificial intelligence, but that you can get a very human touch the I can help you, and we have a lot of pediatricians who are parents on the platform and can give a lot of personal recommendation from their own experience as parents.
Great to have some time with.
You you've probably seen the Mugshop. There is a tweet an X that has come back from Donald Trump on that platform and is hitting one particular company hard Digital World acquisition.
It's the SPAC that of course is looking to take Donald Trump's truth.
Social public ed is a higher now by three point three percent.
It was a lower because, of course.
Many were questioning how much he was going to be using this platform in the run up to presidential elections that dive into all of this. Of course, we want to look at the significance of this Trump X with Ron tig Beckworth run what do you make of the importance?
Well, I think for politically for Trump, there's a lot of downside risk to being back on Twitter. He's been posting a lot of things on true Social that are very similar to the things that he used to post on X formerly Twitter, But on X they're also being seen by people who don't like him, and they remind those people why they don't like him. So there's a
lot bigger audience there. There's a lot more ability to drive the news cycle as he previously did when he was on there, but it's a lot less friendly audience than he's getting on truth.
I think it's important to point out, Caro, the shares are higher. I think President former President Trump did post on truth social saying true social is my home, so maybe some confidence of that. Bloomberg's Ryan Teague Beckwick on the social media beat since Trump's time in twenty sixteen.
Meanwhile, well that does it for this edition of Bloomberg Technology.
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