From Bahard where Innovation, Money and power Collie in Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde and ed Love Love.
I met Lovelow in San Francisco. Caroline Hyde is off today. This is Bloomberg Technology coming up full coverage of the second biggest bank collapse in US history. We'll discuss the outlook for funding with Jojao a Millennia Capital. Plus another big week for tech earnings ahead with AMD, Quilcom and Apple all reporting. We'll get a preview of what's to come. And soft banks chip design firm ARM filing confidentially for
an IPO in the US over the weekend. More in the offering later this app There is just one story that we're talking about, and that is JP Morgan stepping in to acquire First Republic, taking on portions of its loan book and deposit base in a deal negotiated with regulators. You see JP Morgan high by two point seven percent. Some kind of feel good at bank, the biggest bank that's got even bigger. Let's get more details on First Republic bringing Bloomberg Shnali Bassack, who's out in Los Angeles
at the Milking Conference. And I imagine this is the topic of the day, Shinali. But bring us the details of this JP Morgan deal to acquire First Republic.
It certainly is because, as you say, we are watching the biggest US bank get bigger. As we know that there were other bidders behind the scenes. We had reported that Apollo and black Rock had supported, for example, PNC's efforts to buy the company as well. Yet the reason JP Morgan had emerged as the biggest bidder here and the most successful is because, as we know it that the cost of the deposed insurance fund for the fdiit was the least under a JP Morgan acquisition.
Now, any other.
Politics that come out beyond this is up for debate. But the question here is does this stem the banking crisis. We have seen a lot of California lenders now go through a series of struggles as we have been talking about, have failed. This one now is another major deal and it certainly gives JP Morgan and even more attract it
the base of customers high net worth individuals. Remember, when we look at First Republic, there has been a lot of bleeding already for the last couple of weeks and months but this deal and an iconic franchise is certainly a co for JP Morgan.
You go back to when SBB collapse in one of the beneficiaries was JP Morgan right snapping up some of the venture capital and startup customers or depositors.
You pose a.
Question there sheanali about whether this fixes the sort of systemic risk? Are there any answers to that on the ground yet? In milkn conference in LA.
Yeah, you can kind of put it in their two buckets. Here you have a lot of banking titans that believe that there could be some pain among a couple of more regional lenders. We just talked to Julian Salisbury, for example, the CIO over at Coleman, who believes it's almost death by a million cuts, where you see sustained pressure on
the industry but not wholesale failures or systemic wrist. On the other hand, you talk to the likes of a Mark Rowan, the CEO of Apollo, which was behind that P and C bid, and there are les there's a
second wave. Really, there's a lot of problems under the surface when you look at other asset classes like commercial real estate, so to where the pain will be felt further is a huge open question ed and the fact is is that there could still be more pain among this industry as well as other parts of the market, as we continue to see the pressure high interest rates on the systems.
All right, Bloomboagtion, Ali Bassack out at Milking, go work the corridors.
We'll see you later in the week.
Let's stick with his story and for more, let's bring in Lenny a cap to investor Joe Chow. Joe, I would frame you as an avench capitalist with a knowledge base in fintech the banking sector, but you also have your own exposure to First Republic. Can you just tell our audience what that exposure is?
Yeah, So, as a VC fund, we have profolio companies and our operations which run on both our Socing Value Bank and for Republic.
So, Joe, this outcome, what do you make of it? I mean, JP Morgan becomes much bigger, but they've stepped in and saved First Republic essentially.
Yeah, I would say this Republic incident is a little bit different than the Local Value Bank incident in a few ways. CD was largely unanticipated, but in the case of b FC, most vcs and founders have already made content continuous planted in the last few weeks. So in fact, most founders, entrepreneurs vcs now have several bank accounts with different banks and so you know, so you know, we're
not unprepared for sort of the transition here. Now our you know, accounts at efforts will roll over to a new acquirers hipping workings account, so that would ensure continuity. But I think on a broader sense, the different between First C and slolicon value bank was FIRC has also a larger non tech consumer base, and I think this outcome helping shore the continuity of that. But for businesses and tech tech business in the VCS, we've already been largely prepared for this outcome.
Prepared.
How are you talking about diversification of banking.
Yeah, since, like you know, a few weeks ago, most vcs and most founders that leads in our portfolio and the ones we've we've connected with and the ones we're seeing in the market have opened several new accounts at different banks, even instant banks multiple accounts. And there's also fintech players which are offering a higher deplit insurance than to fifty because they're parking their opening accounts with multiple banks, so that ensure you can actually, lets say, add four
to fifty case to give to a million. So that's been underway for you know, since the SVB fallout, and so when you know, this incident kind of occurred with FC, vcs and founders have already kind of been making continuous a plant plus even if the ones that happened, you know, I guess they're the positive for being short by the large bank in the US. So I think, you know, founders and vcs feel much safer this time and securely on.
The last time, Joe.
Even for private market participants in vcs. There are some big picture questions, one of which is what does the Fed do this Wednesday?
Yeah, you know, financial stability was always sort of a third objective by the Fed after the inflation and unemployment rate. You know, if you if you look at sort of effas of terms from Marks, you know, I think he did to say in the pressure that we expect to inflict some pains, and I think, you know, what was happening here within the broader financial system is not inconsistent
with what they would anticipate. I think the real question in my mind is to what extent will the banking crisis and followouts sort of deter the FED from from raising rates. In my view, you know, they're probably gonna raise race another twenty five pips at this meeting.
But but you know, in my own.
View, holding rates at you know, five and a half, five hun quarts five and a half is also very very restrictive and so and so financials abilities, you know, become a large concern for the FED and might actually deser the FED from raising riks further. But by keeping race at parent levels, there's still being very restrictive on financial conditions and that could really kind of temper and non inflation over time.
What what is the environment like right now, Joe? For vcs that yourself considering writing checks for startups trying to raise money, you.
Know, there's two schools of thought.
You know, my own school of thought is this is actually the best comething best because you know, because values start down and we believe this is a help you reset for valuations and companies. And but there's another school of thought, which is many found many vcs are actually uh kind of holding back from investing, and so you know,
but within the broader system. You know, there's you know, amongst kind of this period of weakness, I would I would call uh, the whole AI kind of a genet AI sort of a uh you know, innovation has been introducing some new life back into the ecosystem.
So I think broader quality speaking, most.
Vcs are slowing down not only on investing, but lpis are slowing down on investing in funds well, when bright Spot is general AI, which seems to offer a lot.
Of new blood and excitement back into this ecosystem.
Hey, Joe, there was a guest on Bluemoll television earlier saying that banks and markets don't have crystal balls, they don't have clairvoyance. But as you look into the future, does the JP Morgan intervention kind of settle things a.
Bit for now?
I think in the short term yes, because kaping Morgan and I looked at the assets. They're fifteen to twenty some larger than evarsas assets, and that should really contain sort of the spread of the of the of the bad assets.
But also I think you know, having.
And there's you know, debates on whether it's politically viable or not, but I think having the largest band to kind of step in and contain sort of this this usual kind of health restore system and not very much like an eight and nine. But you know, I guess the question is, are we are we fully through the banking.
Fallouts?
I think for large banks which have regularly, uh you know, regularly passed the first card test, the stress testing, I think, personally think they will be fun. I think mis sized banks management who haven't been on top of it would be on top of it now. My actually natural concern would be with the smaller banks, which you know, maybe I would expect to be to see a little more
stress in the bankings on the smaller side. I think from this larger banks, I think the crisis that uh in the first term content.
All right, Joe Chow, Millennia Capital Goods, catch up, Thank you for your time. Now, another busy week ahead for earnings with Apple, a m D and qualcom Or reporting numbers. Let's get a preview of what to expect from the iPhone maker with our own Mark German. Good morning to you, Mark. What's on deck for Apple?
Yeah, good morning, thank you for having me. So this quarter is likely to play out a bit similarly the last quarter. Right, Bloomberg consensus at this point anticipates about a five percent annual decline. Last year for the second quarter, Apple reported revenue of about ninety seven billion. For this year twenty twenty three, the second quarter will come in at around ninety two billion. That's according to a summary
of analyst estimates. Now, within that ninety two billion, it appears, according to these estimates, that all of the Apple major product categories aside from services, will see a bit of a decline. That includes the iPhone, the iPad, the Mac, as well as wearables. The iPhone decline is likely to be less significant than in the previous quarter because in the previous quarter we had the supply chain challenges that
have now been essentially fully resolved. But you'll still see the iPad and the math go down quite significantly compared to the year ago quarter.
Services, however, are.
The estimates indicate that should be up a little bit, which obviously is news and positive growth somewhere for Apple on this quarter.
All right, Bluemos, Mark Gurhman, We're all waiting for Apple later in the week. And by the way, Mark's power On column was out over the weekend. If you don't subscribe, do so. He's focused on Apple watching software. Thank you to Mark. Now sticking with earnings. Another stock we're watching is Checkpoint Software, out with earnings that frankly disappointed to the downside as revenue missed expectation. Shares at one point in the session down by the most since February of
twenty twenty one. Now, coming up, how the AI startup pine Cone managed to get a seven hundred and fifty million dollars valuation in a one hundred dollars million dollar funding round.
We'll talk to the CEO Ido Liberty. That's next.
Meantime, here's what Wing Venture partner Jake Flomenberg, who took part in that round, had to say about.
It last week.
And so, if you're building a generative AI startup or a generative AI application and you want to marry that with your own company's data, or if you want to remember things from one question to the next, you need a vector database like Han Kong.
The White House is probing how companies use AI to monitor and manage workers. The Biden administration says such practices are on the rise and can inflict significant harm. Just last week, the Minnesota Statehouse actually passed a bill to require companies like Amazon to provide warehouse workers with copies of data they collected on their pace of work. California and New York had passed similar legislation in the past couple of years. Let's keep talking about AI with pine Cone,
an AI powered platform. We've just raised one hundred million dollars in a funding round last week, valuing the company at seven hundred and fifty million dollars. Founder and CEO Eedo Liberty joins us. Now, we would describe pine Cone Edo as the long term memory for AI models, right, Explain what pine Cone.
Does provides exactly that. I mean when.
We think about AI models as being smart, they might not be very knowledgeable.
And if you see.
All the issues that people have had with what's called illucinations, basically AI models giving very smart sounding answers but with wrong information. That is solved by equipping them with long term memory, which is provided by fine.
Con interesting timing one hundred million dollar round a seven hundred and fifty million dollar valuation. You did a much smaller round a sort of a year ago. How difficult was it to raise those funds? And why did you raise the fund.
It wasn't difficult at all.
In fact, the fact that sector databases really asserted themselves as a critical piece of generative AI and the ability to do that escale correctly and pine Cone being the leader in that space and made that a no brainer to be honest, And so it was. Yeah, it was needed for us to really fuel the future research and development and future investment in the field.
You know, we're covering AI more than a daily basis here on the show, right and we're talking to those that are working on foundational models vcs that are investing in the technology. We kind of break it down to data prep, deep learning, and then inference. Where does pine Cone sit within that development cycle.
Well, it's sort of a different component altogether. This is about search and retrieval and access to your long term memories. If you are trying to build a generative AI on your own company data and you want your then you want your application to not hallucinate or make gross mistakes, then you have to equip it with that capability and that's what prime Cone provides. That could be either on training side or data cleaning, or in production at real time or customer facing.
This happens everywhere up and down the stack. It's just a whole different component.
And in some sense, doubling down on what I said before, this is the realization that this is a critical piece and that it's here to stay was exactly what catalyzed that, both the round and evaluation.
You have customers like Shopify, HubSpot, ZAPR, and Gong interesting names in Layman's terms, What is it you're doing for them?
When when large language models.
Processed texts, they don't save it or represent then in the same way. And when you want to search for data, when a large language model search is for data, they don't search through it with a regular search engine like you would and I would like search on Google, but in a very different pattern. And that pattern is support
supported by pine Cone. And so if you know, if you're on Gong and you want to see what the some salesperson you know offered some discount for some customer, uh, that's much easier to do with the large language model searching through the data with with pine Cone.
Than with keyword search for example. Right.
The same goes for Shopify, who built a shopping assist app very quickly with those capabilities, surfacing the actual information about their products and so on.
Uh, the customer's products.
You know, it's it's really retrieval and search in the way that AI models expect them to happen.
And the daily power.
It's very power, very new kinds of applications, especially where hallucinations is.
Something that you really try very strong to avoid.
You know, is there a risk that the pool of data is finite that it just runs out for training foundational models?
I'm not sure what you mean by that, to be honest. There's a debate we are enable, Okay.
Well, there's debit from industry participants. Right, there are lots of data inputs that go into training generative AI tools. Right, if you take for example, Google and Bard, they clearly have an advantage in the data that they are able to draw on to train that model. Others have less access, especially those of the training models where there are far
fewer parameters and inputs. I guess my question is, you know, how are you helping and make data available and what the risk is that there is not sufficient access to data to train future models.
So, first of all, I don't think that that is that is a serious risk for training better models, because I think we have scarcely tapped the.
Single percents of what's available out there.
But what pinekone allows you to do is actually make your AI models a lot more accurate and a lot more actionable without retraining them, which is I think why it has been so successful and why we're ramped up thousands of customers even just in Q one, because you know, with the large language model, even without being retrained, if it's given the right context and the right information from which to construct the answer, then you don't have to bake into the model all the data in your company.
You just have to present it to the model at the query time say hey, you know, I want.
To see what this customers are for a discount, and here are you know, twenty snippets of texts that I think contained the answer. Can you just steal that from that and give it to me in a reasonable way. That's a much easier problem and a much more manageable sort problem to sort.
All right, pine Cone founder and Cooedo Liberty, thank you so much for joining the show. Time for Talking Tech India's most valuable startup by you look into reinsure employees and partners. After a weekend raid of the company's offices by the agency that investigates money laundering in the country.
The investigations come at a time when the education company, valued the twenty two billion dollars, is in talks with investors to raise funds to address a liquidity crunch, and Ali Barba co founder Jack Maher is joining the University of Tokyo as a visiting professor. Mar is set to assume the new position to day and will provide advice on research topics and conduct his own research. Will also
give seminars about entrepreneurship and innovation. Plus, Twitter co founder Jack Dorsey is offering sharp criticism of the social media's new owner, Elon Musk and his handling of the deal, after previously being publicly in favor of the sale. When asked if Musk has proven himself to be the best possible steward for the platform, Dorsey said, quote not no, nor do I think he acted right after realizing his timing was bad, Nor do I think the board should
enforce the sale. Welcome back to Bloomberg Technology. I'm ed Lovelow in San Francisco. We've got to talk a little bit about AI. Now here's what some of our guests have had to say about what they think of generative AI's applications and where it's best suited.
Have a listen.
This technology really takes personalization to the next level when it comes to any type of education, but specifically financial literacy, which is so complicated.
Certain categories are more exciting than others right now. Obviously, generative AI is a category that is very exciting to startup founders, customers, and venture capitalists as well.
There'll be hundreds, if not thousands of opportunities to build interesting applications powered by AI.
Technology makes it easier to create. Generative AI is accelerating that trend by decades, maybe centuries.
To me, brainstorming is actually a perfect use case for these tools.
I don't really care whether you're using AI or some other technology. I care what are you delivering to, what set are customers and how delighted are they going to be?
So I show you these two names Starbucks and Young Brands reporting earnings Tuesday Wednesday. AI Artificial intelligence is absolutely dominated earning statements and calls over the last ten days or so, particularly for the technology sector. Do we see that happen again this week when it comes to qsr's Qui restaurants and some of the more consumer facing companies. It's really big question if that carries on throughout this earning season. For more, let's bring in Presto Automation Chairman
and Interim CEO Krishna Gupta. Presto one of the largest providers of AI power tech for restaurants like McDonald Zapplebee's, Chili's and much more. Krishna, what do you think is AI going to dominate the earnings narrative for this sector this week?
And great to be on.
Well, let me start by saying I completely agree with Keith Ruboy, which is that I don't care whether it's AI or not. All that matters is are you creating something that's immediately actionable and valuable for customers today? And we believe that there are a lot of opportunities to do that using AI in the hospitality and the restaurant sectors.
So yes, I expect every QSR, frankly every corporation in the world to be thinking about what are the most immediately actionable opportunities to leverage AI today.
Press Automation Chairman and Interim CEO Christiana Guttu is with me in New York we were talking about the role of art official intelligence in the restaurant industry, the quick serve restaurant industry, and I was about to ask you why you're so focused on drive through. How is something so manual complemented by artificial intelligence.
Well, it's not necessarily complemented. I think it actually ends up being one of the most immediately actionable applications of generative AI in the enterprise. Because you have labor costs which are rising, you have a relatively confined problem set in the drive through, and I don't think in three years is going to be a single drive through having a human take your orders. I think, you know, voice spots,
whether that's ours or someone else's, will be pervasive. They will never get tired of delivering perfect service, upselling the customer, and ultimately delivering a lower cost, higher revenue experience to customers.
Like many of your industry pays, you have looked to open AI and GPT tools to complement the work you're already doing.
How does that relationship work?
Yeah, well, look, I think LM technology and generative AI broadly does enable better personalization, faster speed of service, etc. For us, we have a little bit of a unique entry into the relationship in the sense that the CEO of Open Ai, Sam Altman, is a longtime investor in our company, a longtime friend of our founders. So we are very actively in discussions with them and incorporating some of that technology into what we're doing.
What's it been like in the first four or five months of this year. Are their QSR CEO's phony every day saying get in here now and give us some AI capability? Literally, what is demand for you?
Yeah? Look, I mean I think we're at a really unique moment in time where the customer's business needs, which is low margins and rising labor costs, are met with the progress on the technology side. And yes, because of how pervasive this term AI is and everything you're reading or seeing or hearing, it no longer feels like science fiction. I would say in twenty twenty two, some of what we were doing felt like futuristic. Maybe it's a twenty
five initiative. Well, a lot of CEOs and a lot of sea level people at our customers in general are now thinking, well, maybe we can actually deploy this now, Maybe we should, Maybe we need to for the benefit of our shareholders deploy these kinds of technologies now, because if we don't do so, we're going to be left behind relative to our competitors. We're not going to be
able to have that margin benefit that others are enjoying. So, yes, the tone of conversations across the board has changed pretty dramatically over the last six months.
Does AI displace or eliminate jobs in this industry?
Krishna, I believe, well, it's hard for me to apply on this industry specifically, but I do believe that the adoption of AI overall will actually be relatively neutral on jobs.
I believe that's the case historically with any large technology revolution, is that new jobs come up, and we're already seeing that you need humans, not necessarily incredibly skilled humans, but you need humans to be able to train the AIS to help them make sure that specific edge cases are not run into and so at the end of the day, I think there's a lot of opportunity for us to help find new jobs for people in the restaurant industry specifically. However,
you have a unique challenge which is labor availability. A lot of people still haven't been able to find laborer and we are helping them do that using Automation.
Press, their automation chairman an interim CEO, christ Na Gutta bringing AI to a drive through near you, sing thank you Now coming up, bridging the gap in venture capital funding for women of color founders. We'll talk about that and more with Fearless Fun CEO arian Simone. That's next. So we had to bring a second look at shares of Ribbean under pressure again, down another two and a half percent. Well so, as investors have little faith left in the ability of the company to compete in a
crowded EV market. At least six analists have cut price targets since April, a lot of people pointing to its market cap being exactly the same as the.
Cache that's on its balance sheet. This is Bloomberg feelers.
Fun, the Benure Capital Fund built by women of Color for women of color, has recently announced a new industry specific cohort of the Get Venture Ready program in partnership with JP Morgan Chase. The program is designed exclusively for black women business owners in fintech all the workforce development industry. To tell us more about what this program entails, that's
bring in the fun CEO Arianne Simone. Arianna actually just want to start on JP Morgan because you have announced this partnership with the EN they have acquired First Republic, both of them with significant VC relationships and startups that adventure backed. What is your reaction to the news that JP Morgan has stepped in to acquire First Republic.
I'm not surprised. JP Morgan has definitely been a leader in the space as far as venture capital is concerned with emerging fund managers as well as the startup ecosystem as a whole, So I'm not surprised when it came to even the whole SBB scare and everything.
That was going on.
They were as investors in our fund, they were one of the first LPs to reach out to see how they could be supportive in taking over any type of losses we may have incurred or anything that may have taken place. Luckily, of course, we didn't. We had very low exposure to the issue, but we saw early on that they were definitely being a leader in the space and wanting to get more into the startup ecosystem.
Let's get to your relationship with them.
I find this really interesting making CAPTO available to women of color, but specifically in fintech. Why fintech.
Well, at the Fearless Fund, we actually invest in CpG as well as technology, and CpG were heavy beauty and wellness, heavy food and beverage, and in technology were heavy fintech, SaaS marketplace and in the fintech sector. We also had have investors LPs such as JP, Morgan, Chase and a few others that are in the fintech business. For us,
this makes a very good strategic relationship. Anytime we invest in a fintech company, we know that we have potential acquirers that are invested in our fund that may acquire them later on down the line.
So it just makes.
Good for business overall, and it sets up a very good, strong pipeline.
For women of color in all of the industries that you're investing in. What has the environment been like so far in twenty twenty three are on. We've talked a lot about tighter financial conditions on this program, but also inequality frankly in how founders and startups are able to navigate that those type of financial conditions.
That is very true. Women of color are the most founded entrepreneur demographic, they are just the least funded, so in any condition, whether there's a market correction or not, they have the biggest gaps of disparity. We exist because we do hope to change what the narrative is in this landscape. As of right now, the profile of a woman of color entrepreneur is somebody who you definitely want to bet on if their cash burn rates are low. They're not used to large sums of access to capital,
so they're very good stewards over their investment. Our portfolio actually is even quite healthy at a time like this because we chose to invest in women of color who are very mindful of their investments.
You're coming to us from Atlanta, Georgia. On this program, we talk a lot about San Francisco, Silicon Valley, Miami, New York, sometimes ostin less about Atlanta, Georgia. What's the environment like for raising venture funds founding a business in that city and in that state.
One thing I can say that the whole VC tech ecosystem in Atlanta, Georgia is definitely growing. It's definitely growing. I would like to add, even just for transparency, that is it easy. No, it's not easy to raise capital in any environment, especially when you're an emerging fund manager. And especially when your thesis is for women of color. But we have been blessed by a very amazing LPs such as you saw even on screen with JP Morrigan,
Bank of America, Allibank, Casco, MasterCard, and many others. So for us, even though we are based in Atlanta, yes, we have raised capital from many other areas including San Francisco, New York, and all the other major areas that you see a lot of financial institutions based.
We had a founder on the show earlier who just closed one hundred million dollar round at seven hundred and fifty million dollar valuation, but a year ago. You know, even at their last stage there are about one hundred and twenty eight million dollar valuation. I give you that as an example because I want to know what kind of activity you're seeing. You know, there is there a desperation to go out and get rounds done. From the startups perspective, is their willingness to deploy capital.
From the VC's perspective.
You are correct.
With this current market and vitce, you're seeing a lot of tech founders raise what we call bridge rounds, which is like an in between round before you get to your next round. That's just pretty much what the market has dictated in this current space. You are also correct that a couple of years ago you could see a company that was precede with the valuation of nine figures and it was just like nothing. It was just something
that you could see. So valuations have gone down. Some investors would like to say they're probably more realistic now as far as valuations. So you have seen a drop in those, and from a standpoint of the founder, their approach to this environment is pretty much just been to raise a bridge round to stay afloat while they continue to build their technology.
Hey area, and the last question I want to go to is CpG fintech. Where's the most activity right now? Are there any specific areas thematically that you're looking at going WHOA, there's a lot of activity.
Here for us, as I was sitting before, we're heavies. We're fifty percent CpG FI technology and the sectors that we are in, Yes, there's definitely heavy activity. One thing I can say even on the tech space of course, right now we all know that AI is like the new hot thing. We've been investing in AI now for about I think about a couple of years. We invested in a company by the name of Clever Aria Moore is the founder on the AI space, but you'll see
a lot of activity there. One thing I can say, even back to fintech is that a lot of the febal founders that are of color, they are very hot for acquisition in the area of fintech.
Bilis fun Ceo Arion Smoan. We'll get you back on. Thank you so much for your time. Soft Banks Semiconductor Design Unit ARM filed confidentially over the weekend for an initial public offering. Joining us now is Bloomberg Semiconductor correspondent Ian King. Valuation is really interesting here. We've been covering this saga story for quite a long time. Where do we settle out on that.
Well, if you remember in video, was trying to buy them for forty billion dollars based upon where their revenue is roughly a billion a quarter. That's a massive valuation. If you were to compare that revenue level to publicly traded companies, they'd be worth sort of ten billion, probably well less than twenty So really hard to put a valuation on it. Obviously, a lot of people really like their technology and really like their prospects.
What does ARM do You say they like their technology? I mean, what is ARM?
Yeah, I mean it's a very good question. It's hard to understand the licensing of an instruction set.
I realize, yes, Niche.
The way to understand it is they produce a layer of technology that is in every smartphone, increasingly in computers and also into data centers as well, and they're moving up the food chain. They're doing more of the design, they're doing more of the kind of thing that Pollcom broad Com would do, and that's a very high margin business.
Is this going to be a really really big payday for soft Bank?
Initially No, in terms of the cash. They've said, look, we're not going to dump our entire holdings into the market. We're going to put an element of our holdings into the market. But what it will do is let people know what ARM is worth. They paid thirty two billion dollars for this in twenty sixteen. People will be looking for this as a kind of a cornerstone of soft Banks holdings to kind of restore some faith and confidence in that company's investing and try and get evaluation as well.
Above at thirty.
Two there's also a jurisdiction or territorial angle to this story, which is ARM is a UK based firm, it's a US listing soft banks in Japan.
That's quite complicated, it is.
I mean, the UK, as we've written, has really really wanted them to come back to the LS and really, as far as we understand, have failed to do that. So it's going to be a US listing a lot of ARMS operations. It's CEO here these days, headquarters is still Cambridge and obviously the ownership and Japans whole a lot of regulatory issues that needed to.
Be navigated there also give us the boiler plate.
There's a lot that we don't know, like timing, there are lots of factors that need to happen before we move forward with this listing.
Yeah, I mean the big thing is to focus on this is going to be the biggest tech IPO this year when you look at it from a valuation perspective. They've said all along sort of second half of the year typically. You know, we've got the filing now, so that's say it's probably autumn.
Right, bloomberg Z and King on all things ARM. We're rating that listing. That does it for this edition of Bloomberg Technology come back tomorrow for a jam packed show.
Guests just for example, Uber.
CEO, Dara Kostra Shahi, Apple co founder Steve Wasne act and so Fi CEO and Sinota. You don't want to miss that one. And okay, look, we're just a day into the week. We have earnings, we have a FED meeting. But there's a lot to recap. Check out the podcast wherever you get your podcasts, Apple, Spotify, iHeart and of course on all of your Bloomberg platforms. Apple comes later in the week. That is where a big portion of
our attention is. But don't forget the discussion we've had in the show, which is the QSRs are reporting, Will they talk about AI? AI has been the buzzword of this earning season, not just the technology sector, but more broadly. Go and check out that Bank of America data or we will track it here on Bloomberg Technology.
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