From Marhard where Innovation, Money and power Collie in Silicon Vallet NBN.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
I'm Caroline Heinder Blomberg's world headquarters in New York, and I met Lovelow in San Francisco.
This is Bloomberg Technology.
Coming up US inflation it tops forecast in a blow to rate cut hopes. We'll discuss the implication of high for longer rates on the tech sector.
Plus we'll dive into the names reporting tonight after the bell and get a read on the health of the gig economy.
And we'll get an outlook for crypto.
That's as bitcoin drops, having hit fifty thousand dollars for the first time in two years. All that and so much more coming up. First we check on in the macro picture today is dictated by that hotter than anticipated CPI print, which which means well, the market now anticipates rate cuts not happening until at least July, you let
alone March that we'd previously been anticipating. Look, it is not therefore to those rate cut views and the S and P five hundred falls off that all important five thousand level that we do only just hit on Friday, the NASDAC under pressure then as that one hundred in particular, one of the worst performing off by one.
Point two percent. So big tech really being squeezed at the.
Moment, and you see those boring costs absolutely leaping to the higher side, the two year yield eclipsing the high since we've seen back in December when the FED did pivot and really make the market think we were going to see some rate cuts coming in twenty twenty four, we're currently up by some thirteen basis points in ed. Before we get into the micro we want to go broader with clear Bridge Investment senior research analysts Hillary Frish, who can really give us a perspective of what's been
happening on a resasset basis, and ultimately we are seeing Hillary a perspective that well, maybe rate cuts aren't happening and what that means in terms of all the bets and the valuations ultimately they've been seen in big tech names. Do you think it's the right time to be such.
A good question, Caroline, Thank you, it's terrific being here.
It's we've had.
Such a great run in technology and a relative relatively short period of time, and going into today's print, I was thinking that we're already entering a seasonally weaker part of the year. Now the tenures CPI is looking hotter, and also the US dollars up, so we can and absolutely likely will have some sell off at some period of time. I think at a minimum, we should have some consolidation, some digestion. That said, I'm about as bullish as I can be on the intermediate to long term.
I'm not sure who was expecting rate cuts to really take place in March at this point given the Fed speak, and then finally the pain trade has really felt up not down. Today could change that. I think if we get to a four and a half percent level on the tenure, that's an important point of demarcation psychologically and also for valuations.
What was in thing is basically how all in investors seem to have been going in tech stocks, particularly at the end of last week. Bank of America, as they always do, really dictating the flows that they've been seeing, and the fact that basically everyone has gone along this particular sector.
Are we just seeing too much of a crowded trade at the moment.
We're seeing some crowding. We're seeing some signs of exuberance, but I think what we also saw was the fact that investors were really off sides for this move heading into it. There wasn't enough participation. We were seeing some chasing. Absolutely, I wouldn't call it abject crowding, but I would say that last year was a year of reset and also profitability improvements. We saw six hundred basis points of profitability improvement across software in particular, five hundred to six hundred.
That was pretty impressive in a dicceleration year, and this year should actually be a year of revenue reacceleration, although SQL if the economy doesn't absolutely fall apart, which doesn't look like it. So I think investors are willing to anticipate some of that. We're seeing some signs they're willing to look out a little bit. We'll see how they feel in the spring.
Hary.
The root of that Boa survey that Caro is talking about is just optimism about global growth, right earnings in the context of a strong global economy. This is what Aaron Brown and PIMCO told the show earlier today.
This is this you're still seeing this market where you have one sector like the tech sector, which is up forty percent, and you have another sector like healthcare, which delivered earnings down twenty percent. It's a huge bifurcation in the market right now, and I think that that really presents a lot of opportunity for equity investors.
A huge bifurcation. Who even cares about inflation? Just go with the tech sector? Is that your attitude?
Oh, I think you have to care about inflation to a degree. And again above four and a half percent, you start to see some incremental concern over technology.
For sure.
It's a terrific point by Aaron. I think if we see a real broadening out of the economy, and yes
we've seen some sectors absolutely annihilated, those representrificpportunities. We think that as a firm at Clearbridge, I personally also tend to believe that as we move further through time toward the second half of this year, where I think we will see a point of inflection in technology, in part driven by AI, in part driven by initiatives around AI, you will also see tech do well ultimately, but tech will have to tread water for a period of time
to the extent that either the tenure continues to rise, or the economy the market broadens out to other sectors. So I think we're I don't know that we have to ultimately have an either or, although we might have one on an interim basis.
You go back to economics one oh one.
The idea simply is that the FED uses rates and higher rates to dampen demand, right impact consumption. In a minute, Karen and I are going to go deep on some of the gig economy companies. If you look at Uber last week, there is no evidence that consumer demand really or corporate command is slowing down. So it puts into questionable what was the point of having higher rates? Right if that is the only mechanism available to them, What do you make of that thesis?
Well, it's not the only mechanism available to them, and we're going to see liquidity coming out of the market over time. It could be a lag. It certainly was a hotter print. We're not at five percent. Five percent would be another story, but we'll see how things trend in the coming months.
What I'm interested in is some of your individual companies that you call out, where you see the opportunities perhaps in this pullback to be putting more into like Microsoft, like Salesforce, Oracle. What is this a moment to think about corporate spending rather than perhaps consumer spending, which we are worried about, particularly if we start to see more job.
Losses in the back of AI.
Absolutely well, what I do like about technology in general is that I think we went through many recessions last year. Last year companies were concerned about recession. They were laying off people, they were optimizing costs, they went on a buyer's strike. This year, there's an imperative to spend. Even if you're not spending directly in AI, you need to lay the foundation to be able to leverage AI. So that's a lot of data related investments, harmonization, getting data
in order, it's a lot of infrastructure investment. It's migration of the cloud. You're starting to see the signs of that. Interestingly, Data Dog a consumption name and consumption names tend to lead reported this morning they report in a much better number. They reported slight acceleration. They guide it extraordinarily conservatively in
my view, and rightly so. But nonetheless, the stock is actually down less than the NASDAK I think less than the SMP and I think it's because investors can see the signs of this improvement, the signs of this need to spend. So if the economy again, if we see outsized layoffs, that will be more of an issue. So far, we're seeing the opposite.
At dieta dog now down by one point two percent.
It was off more than six percent at one point, but that needs at reaction, just pushing it back off to the and traded.
Yeah.
I think one final question I've got for Hillary is, Okay, we know the AI story, we know about inflation, and we know.
About the FED.
How much of a wild card is the election this year for the technology sector?
Hm?
Well, I have to imagine it's a bit of a wildcarde it was last time Trump was on the ballot, but it frankly will get closer. But it feels like an autrinity from now when I think about how these tech stocks moved here to day. So I'll look forward to coming on and discussing that with you.
Vn Ed all right, we'll hit you up on that.
Hillary Fish of Clearbridge Investments, great analysis of the macro picture.
Thank you. Let's go from what is the macro to the micro?
There's a lot of stories that are happening in the ernies context. One of the things I wrote about at the beginning of the week in the Tech Daily news letter was the gig economy.
Uber had a blowout quarter.
Now its competitors are up next, Lift down three percent earnings today after the bell Airbnb.
As well later in the Weekdoor Dash. What do we actually know about the.
Demand side for the gig economy but also the supply side. Let's go to Bloomberg's Natalie Lung who covers this feat for Bloomberg Technology. Uber really set the bar high, right because Lift lives in their shadows. So let's start there. What are you expecting this week from Lyft for Lift?
Yes, as you mentioned, they're kind of in a tough spot in comparison to Uber, who has the scale of international markets and as well as scale in other verticals like delivery and advertising. So for Lift, their performance, based
on analyst estimates pretty conservative. Some analysts say they could deliver a beat, But then the concern is also like how much can they balance in terms of offering incentives to get more drivers get more drivers over from Uber, and how much subsidies and that sense and so, and especially because they announced like a seventy percent pay guarantee last week to sort of more drivers onto the platform and other features like a better response on deactivation account deactivations,
and so the conversation will be around how much can you do that and not like eat into the margins.
Let's talk about margins when it comes to food delivery in Siicar, we're anticipating this is one of the most shortened stocks out there at the moment. I think forty percent of the free flowt is currently being better against one of the worries here.
Right.
It's definitely again around the competition. So Uber door Dash they have they have not only just grocer delivery, they also the majority of the business is restaurant meals takeout, and so they do have that scale there which Instacart may be more limited right now. And also international ubers in a lot of international markets. DoorDash is in some parts of Europe and instacart is mostly in the US Canada. So the growth rate there in terms of orders of
grosse transaction value will be of interest. Whether that can reaccelerate will be definitely If Chris, it's.
The economy week lift kicking ourself after the bell this afternoon, Bloombgs, Natalie Lung, thank you so much.
Firefly.
It's Adobe's new flagship AI product that has been seen as perhaps a bit of a late comer to the likes of Mid Journey in Dahli, but now the company is banking one aspect that as competitors lack a commercially safe data set which provides IP guards, including legal support if anyone tries to sue them.
Let's bring in Bloombogs Brodie Ford for more on this.
And look, it's not exactly a sexy growth story to a certain extent.
It's more about, look, we've got you.
If you're a big client and you want legal protection, you got it with us.
Yeah, everyone knows the story of your big tech incumbent and then this cool startup comes and smokes you. Right, and everyone thought out what would happen with open Ai in mid Journey with the image creations. But Anooahi has been coming out saying you're going to get sued right unless you us use these other guys. What's going to happen is they sucked in images from across the Internet with no copyright. It's a legal hazard. That's the argument.
They've made, and so they've trained their system on their own Adobe stock, meaning that they have their own rights to use it. Obviously, some of the creators might not love that. There's probably still some legal dispute, but so far this pitch appears to be working with many big corporations.
You give the example in the BusinessWeek piece of them commissioning photographers like eighty Bucks to go out and photograph animals, and the animals specifically are not allowed to wear clothes, which is what fun is that. The thing that always surprises me about Adobe, right Brodie, is that it is in the top forty biggest publicly traded companies in the world.
And what it has in common with Microsoft is it's got a very good track record of selling subscriptions on software where you can get a similar tool for free pretty much anywhere will still pay for it. So let's go back to the intro. We said they want to be profitable. How do they plan to make firefly profitable?
As you said, Adobe's creative cloud is very profitable. I mean I've had people say to me it's one of the most profitable things ever, not even just software, just products. It is a complete cash cout and it is not because it's the easiest to use or the cheapest, but because it works well together. Right, if you have a creative agency of a marketing agency, they need photo, video, audio, it needs to work well together. And now they need AI.
And so Adobe's bet is that when they put AI into each one of these products, into the content supply chain as they call it, it'll work well together and people will be willing to pay extra for it, and more importantly, that they won't go to open AI or mid journey and then cancel their Photoshop subscription. I mean right now they're barely even charging for this. It's more of a plan that stay the ecosystem.
And within Adobe.
Inside Adobe, though, there are employees and staff that are worried about that ecosystem and the creatives that'll operate within it.
Well.
Yeah, there's a funny story we hear. We have it in the story about you know, there's a presentation in twenty nineteen. Someone is saying, listen, you guys, you are going to get disrupted if you don't take this stuff seriously, and the executives in the room being like, we're good, They're not going to leave us, you can know. So yeah. I mean it's a classic story a big company doesn't
invest enough in an emerging technology and gets disrupted. In one year ago, everyone expected this to be the case for Adobe. Today the picture is a little blurrier. I mean, their argument has been landing, and I talked to a lot of Wall Street types to say that the two companies who are going to see a material uplift this year from AI Microsoft first and then Adobe.
You see that coming from our own boombug intelligence team members and thinking Anna Ragrana putting out a note this morning saying it over you can see a one billion dollar mid term generative AI lift at the moment in terms of creative cloud, is there still any ramifications from the big m and a deal that fell apart the Figma, the anticipation that they've been distracted by having to go through such legal wranglings rather than focusing in on what
is for many, you know, the new electricity when it comes to data visa, the new way in which we're thinking about technology.
The way most folks understand it is that Figma was supposed to transform Adobe, and then AI was supposed to transform Adobe. So the fact that Figma fell apart that means AI really has to work out. I mean a lot of their eggs are in this basket, and we haven't even touched on the idea that this technology might kind of disrupt their own user base, right, I mean, millions of people pay for these tools. Are they going
to be out of work? Are they just going to want a general images and not need to pay Adobe? I mean, even those who are bullish on Adobe's AI efforts see that there is some potential for this to knock out a bit of their user base. So I mean, yeah, now that Figma's gone, this needs to work, and it appears to be at this moment, but there is uncertainty remaining.
In Berg's Brady Ford with the Adobe AI deep dive. Thanks coming on the show Mate, Now coming up here on Bloomberg Technology. Elon Musk's X looks to compete with the likes of YouTube by adding new advertisers targeting features to the platform.
Will bring you all those details.
Next is the company also looking to glurin creators, Karl, what are you looking at?
I love the story that we're watching.
And this is a European company of course, ASML the most valuable.
Tech stock in Europe. A little bit of pressure.
Today at one point, some significant pressure, a so called fat finger. Basically an eriness trade, whether that's by a human or an algorithm, is what many are blaming for a seven percent plunge that we saw in the stock at the open. Now the URINEX the overall that it's on and said, look, that wasn't to blame.
Had no alerts that were triggered.
But now people are basically rather questioning the valuations that we've seen, the run up that you've seen on ASML and in SAP for example, or by two point eighther center for the last couple of trading days. There's a rumot technology time now for talking tech. First up Open AI CEO Sam Altman, but he said that the UAE could serve as the world's regulatory sandbox to test AI technologies and then lead to spearhead global rules limiting their use.
The comments calm, of course, as Altman.
Is calling investors in the Middle East for a Semiconductor initiative to advance AI. Meanwhile, X has won a dismissal of claims that it conspired to supply the Saudi government with confidential user information to identify a Sali man who was arrested, tortured and sentenced to twenty years in prison.
That's for posting remarks critical of the government. Now, the person in question had alleged that the social media company conspired with the Kingdom of Saudi Arabia to violate the rack t Influenced and Corrupt Organizations Act and the Alien Taught Statute.
Then, in a fura monex.
Spaces, of course, Elon Musk told US Republican senators that there is no way in hell that Russian President Vladimir Putin.
Could lose the war on Ukraine.
It was also in that space's opponents of a Senate bill that will provide further assistance for Ukraine to continue battling the full scale Russian invasion, and of course began two years ago.
Ed well, let's stick with X.
Elon Musk's platform is adding you advertiser targeting features to better entice video creators and compete against YouTube, joining us with the details Bloomberg's Asia councin Asia. We reported this idea back in October. Right, so, Musk and Lindy Yakarino did their first ever join all hands in the company, and they said, our competitor in the future is going
to be YouTube. And what's happened since October is all of these video focused developments, and that's what you've been writing about today exactly.
Has been pushing into video hard, as you mentioned, must have been talking about this forever and now we're starting to see some realization of it. So, just in the past number of weeks, they've signed content partnerships with people like Don Lemon, former CNN anchor, and Tulsa Gabbert, who was the US representative and a presidential candidate. They signed content deals with them to produce shows and put them
exclusively on X First. They did the same thing with the World Wrestling Entertainment so WWE, and they're continuing to push to go after creators. And now what we see is now they're giving advertisers more control to actually put their ads on the profile of a creator that they like in order to generate more revenue from them and just allow those advertisers to take advantage of the profile and the followers that these creators are going to bring to the platform.
And also I expose to a certain extent, would it provide some certainty to an advertiser that I'm just putting my brand, my name, my message via one particular content creator rather than who knows where it ends up being.
Next to it.
Absolutely, I mean that's been a huge topic of conversation with Exit particular. As you both know, over the past year or so, they've dealt with a lot of content safety issues. So we saw a bunch of advertisers leave when they found out that their ad was next to antisemitic content, for example, not too long ago. And so absolutely this is another control to say, hey, I want my advertisement to only be on a video by mister Beast,
for example, So you know you're reaching those followers. You know that your content is going to be right in front of their videos, so it lessens the chance that it's going to be next to some harmful content. So it is a little bit of an assurance for an advertiser, So you can imagine that might be something that's attractive to them.
As she counts all over the developments, X, we thank you so much.
I'm also taking a look at bitcoin, and I'm sorry to say that we've also changed direction on bitcoin. We're lover for the first time in around eight sessions. But over those eight sessions we posted a significant gain of fifteen percent. We're below fifty thousand US dollars per token as it stands, but when we did hit that milestone, I know that all of us were very excited because it's kind of psychological flat level of fifty thousand US dollars be tooken.
It is a focus.
The vying of the market capitalizations is one we focus on, and then we think about the vying when it comes to which crypto ecosystem is really on the win. Let's talk about all of this as to what's bringing us up to that fifty thousand dollars level and then dragging us back down. August co founder and Coca Aya Kontorovitch is joining us for more.
And yes, perhaps.
The CPI print takes the wind own of its sales a little bit like every risk I said on the day. But what has been blowing us higher when it comes to bitcoin? Is it ETF flows or is it something else more fundamental that's happening.
Sure, you know, I'm sure that folks would like to say that a part of it has to do with Jack Dorsey wearing this SOCI shirt during the Super Bowl, But it really is, to your point, us inflow is coming in around the ETF We saw April and June BTC call buyers with strekes at around seventy K to
seventy five K, which are all time high prices. We're also seeing a lot of that narrative around the April nineteenth coming up, and overall spot and option positions that are really gearing up for pricing to break all time highs. In Q two we saw BDC per futures open interest also cross eleven billion, which is the highest ever since December twenty twenty one. So a lot of US inflow momentum going on right now.
I hate to always just talk about and focus obsessively about price, but ultimately the market being dictated that we're going to eclipse this fifty thousand is I think we're going to eclipse to sixty nine thousand that we've seen previously.
Absolutely, it looks like, I mean again, from anywhere between seventy k to seventy five.
K that is very, very bullish, and we really.
Haven't seen those prices historically, So yes, it does look like we're going to eclipse those and it really does
look like that's coming from the US side. You're seeing that reflected in coinbas BDC pricing, which was trading at a premium to finance BDC pricing, which again reflects the fact that you're seeing a lot of US inflow coming in that's pushing that price higher at a premium, and as well reflected by the ETF influence, which continues to make that narrative strong US specifically focused.
Hi.
We were reflecting on the show yesterday that if you think about it in really simple terms, from kind of end of twenty two to present day, there's this kind of minimal jump on bitcoin from forty four thousand to forty eight thousand dollars per token, and in between all kinds of chaos and volatility lows of fifteen thousand, five hundred a brief peak.
But what also.
Happened in that time is that thousands of old coins and other digital tokens just cease to exist, right they or they become a liquid How much of this story is about bitcoin kind of being the only stable option if you want some exposure to a cryptocurrency.
I think it's pretty crazy that we're talking about bitcoin now as being the stable currency, but you're even seeing that reflected in some of the language that's is pushed out. I would say that's very much true. However, ethereum is still playing into that narrative. A lot of what's going on right now is with regards to the restaking narrative and Ethereum driven by an eigenlayer, and so you're seeing a lot of narratives around both.
That and in Eth ETF.
Yesterday you saw that Franklin Templeton also submitted an application for ETF, which caused a small bounce in the Eth price, and so we're likely going to see that happening with Eth as well. And you are seeing other applicants for an ETF, whether it's Solana or other all coins where that may also lead to some of that lower volatility around those tokens as well.
You've been building for a long time, whether it's August, whether previously you're helping thing on the founding team of Falconnects, but also you're in the investing space and understanding what
was going on in Pantera Capital. What is the building like right now when we think about sort of the oxygen being sucked out the rim by the OG's a bitcoin and eighth but still salon again and look in some of the olt coins, what's been built from an infrastructure layer, from adapt level, from an actual go out there and use this in some way, shape or form.
It has never been a hotter time to build in this space than now. You are seeing folks doubling down, people who have been in the space for years, who have really clarified what are the to your point, the problems in on the infrastructure layer that need to be solved for people to actually be able to use.
This at scale.
And so the biggest thing right now is account abstraction being able for these applications to be used on a front end without having to deal with all of the interactions with the blockchain on the back end.
You know, we've been talking about that.
Narrative for years. How do you get to a point where you can just send a transaction using a front end UI And we are getting closer to that point. Again, this infrastructure takes time to build, and every single day we're getting closer to that. Like I said, it really just hasn't been a hotter time to be a builder in crypto than today.
So it's very exciting.
A real quick eye harving due in April. Do you care.
Absolutely?
I would say there's always a narrative around it, you know, it's whether it's going to be by the rum or sell the news. That's typically what we've seen to date. But again it does take a while for the flows to come into the ets, you know, especially on the RIA space. So it'll be interesting to see what happens on the retail side, what happens on the RIA side, and if that narrative is going to be reflected with
users there. And of course Asia. We haven't seen as much Asia inflow with all of this being historically led right now with the US sides, so very very interesting.
And then the eth BTC ratio.
August co founder and co CEO Iakontarovitch Greats catch up here on the program. Now, Carrie, you went out the building in the snow this morning for a pretty important conversation.
I thought the element said for a breakfast meeting, because I was lucky enough to be sitting down with the Sunivation Ventures chairman and the CEO, that's Kaifoon Lee. It was over at the Economic Club of New York and fifty four we were chatting about what else artificial intelligence. Of course, he's written many a book, forward thought on many an impact, And we start the conversation by asking if big tech companies, the ones that are still here, can actually truly pivot to be AI first.
Take a listen.
Theoretically, they're the best equipped to do AI first because they have the most AI experts in those two companies if you coun't open AI in Microsoft's camp. But what they face is a fundamental business issue of cannibalizing your own business.
So for a.
Large company, imagine if you will your Microsoft or Google, the first thing you're going to think to want to do once you invent this technology is how do you make money?
And of course Google will make the most money from putting it in search.
Microsoft will make the most money by putting it in office, so that will be.
The low hanging fruit. But low Microsoft.
Become a disruptor that says I'm going to build a new engine that's AI first, that causes more people to no longer need.
Or want to use office or pay for it.
Few companies, if any, has ever done that. Right, when Kodak invented the digital camera, they shelfed.
It because as they think it would kill the film business.
It did, but it wasn't because of them, but other companies, right, So the same thing happens with you, Intel not embracing mobile, Qualcom not embracing AI, and.
The list goes on. So it's fundamentally really hard.
For a large company not to take this technology and put it in the most best selling product to make that easy low hang through.
And it's incredibly hard for them to build a disruptive product that.
Will challenge, cannibalize, and potentially kill the revenue that is currently a cash car for them.
Now.
Of course, Kai fee Lee I worked for both Microsoft and for Google over there in China. He's been, of course an investor, he's an author.
He's actually getting back into the.
World of building businesses and he's got his own was one zero one dot Ai and this is all about sort of the Chinese models that he can build in focus is open source. And he actually said one of his great lines when we were sitting down was he thinks open AI should rebrand. We've heard that one before, but he thinks it's one of those closed shops there.
Is closed AI.
I mean, he's seen as a bridge right understanding what's happening in China's domestic efforts on AI. He knows what the Western World is doing. But as he said, he's going back to being a startup founder while being plugged into the megacaps that have basically competing business models, is what I heard. He's trying to outline here their AI work and then their call legacy business, and.
He thinks they will be disrupted and eventually the winners will be AI first. I have to say, I haven't seen him quite as well worried in a long time. He's usually an optimist, but he is concerned about the scale, the pace at which we're innovating. But he did talk about China, and look he phil still thinks that China can get to an never beat us an innovation, certainly on implementation, he thinks it can get there.
We're coming up here on the program.
We will continue to talk about AI and opportunities in the investment space, innovation more broadly. That conversation with alic Ross board member Amplo, Okay, I.
Just want to focus a little bit on what's happening with IBM today because New York parents amid this snow ed have had real tech issues basically getting their kids to do remote schooling, and there are statements coming from the New York City Department of Education on exiting.
We're currently experiencing issues.
With services that require IBM authentication login. We're actively working with the IBM to resolve it and we provide an update.
And in fact they did.
Roll out some added capacity and improvements to the system. But like every stock today, it's down by one point one percent. Sorry to all those parents out there. This is BLUEBG technology.
Okay, time for the VC roundup.
First up VC firm found previously called Wingman Ventures, is raising one hundred and twenty million dollars for a new fund to target Swiss AI and tech startups. The firm says it's already raised eighty five million and aims to make up the rest. By July, an AI startup Marco raised twelve point five million dollars in a Series A round led by Lightspeed Venture Partners, gaining funds to develop its technology that helps companies search the vast amounts of
unstructured data in their systems. Blackbird Ventures and January Capital also took part in the round. Plus Bioage Labs, a clinical stage biotech company developing therapies for obesity and metabolic disease, raised one hundred and seventy million dollars in an oversubscribed series definancing round led by Sophenova Investments. We are going to have the CEO and co founder of Bioage with us later in the program, Cara.
Well, first, let's go back to sort of what Bioage is using AI to spearhead moves forward in healthcare VC Spotlight.
We want to talk about the broader opportunities but also the strains that AI presents the economy much much more with alic Rossi's tech policy analyst and board member for vcfern Amplos, also the author of the Raging twenty twenties, Companies, Countries, People and the Fight for Our Future, and of course he served as Senior Advisor for Innovation to the Secuary of State during the Obama administration and Alec, we sit
here at a time of ultimate disruption. It feels like we're thinking of companies that are all in on operational efficiency in their earnings, but also letting go of people at a rapid rate. We're thinking of investment in technology, but job's ultimately going to be disrupted by this. Where do you sit in the optimist versus personimistic side of AI application?
I'm net positive over the medium to long term. Over the short term, though, it's going to be a little bit tricky, because what we see is AI enabling automation of labor that isn't just manual and routine for cognitive.
And non routine.
Is it's wiping out a lot of jobs, the likes of which, like my father, who is a lawyer, the kind of work my father did as a lawyer ought to be ninety nine percent done by software at this point. And that's not necessarily a bad thing, but it is a bad thing for people later in their careers who aren't going to be able to pivot necessarily from.
A statistical standpoint.
From a statistical standpoint, it's not going to be as bad as one might imagine the impact of AI on labor, but over the short term we're going to see some automation of a lot of white collar jobs.
The interesting dynamic right now, Alec, if you look at the entirety of the newsflow, is layoffs and cost cuts at bigger companies are in part being carried out to free up funds to invest in AI. Ironically, is the earliest stage ecosystem of all these startups that say we're using AI to automate or make more efficient specific function feel any of that, you know, the reallocation of capital from say headcount to a new AI.
Tool, Well, yes to no.
And first of all, let's be let's have some you know, intellectual honesty around a lot of the drama around layoffs. Unemployment is really really low in the United States right now. Some of the layoffs that are getting lots of attention are getting lots of attention because they are inside platform companies that have been hiring wildly for years. But if you take take a sort of cold blooded look at
employment in the United States, unemployment is shockingly low. I live in Maryland, where the unemployment rate is like two point four percent.
That's nothing.
So I don't think we need to be sounding alarm bells yet about layoffs, in part because there's people being laid off inside these platform companies can go get work inside startups the likes of which I invest in. And what we're seeing inside these startups is they are using AI in a way that is enabling them to not have to build their headcount too fast. So this is
enabling the growth of really lean startups. So I think it's actually helping the startup ecosystem a little bit more so than some of the flabber year old platform companies that are doing some of these layoffs.
Alik, we were just speaking with Kaifu Lee a little bit earlier, who does feel that there's going to be a limitation on these big tech juggernauts that have been so ahead of the curve in AI development thus far, But it's going to lead to cannibalization of their own business models and ultimately they're not going to be AI first. Are all of the companies that you're backing now ultimately AI first companies or are they having to re establish themselves.
We think about their headcount, We think about the way in which their business model works, for example, like a grammarly.
Yeah, so not all of them are necessarily AI first. For a lot of them, AI will be a new tool in their toolkit. The most exciting examples of an AI first company the one that leads to mind. I'm speaking to you today from Italy, and I spent today visiting with a company we're backing in Switzerland called key in Health Ayaan and they are using AI to provide mental health services into big companies and they're doing so
AI first, something like this wouldn't have been possible. Providing AI enabled enabling mental health services to tens of thousands of employees that has a human component on the back end but has an AI component on the front end.
That kind of thing wouldn't have been possible years ago.
And so this, ultimately, I think is showing what AI and can do to help the world a little bit.
Alec Ross Techic analyst and board member at AMPLO, thank you.
So much for your time.
Let's get back to Bioage Labs, which we mentioned earlier, just to announce the close of a one hundred and seventy million dollars Series D round to develop new therapies for metabolic diseases using the power of AI. Co founder and CEO Christin Forney joins us. Now, so I guess it's a d What is it that you need to invest in in the context of AI. Help us understand how AI will ultimately accelerate I guess the work that you're doing.
Sure, kirst and thanks for having me. It's really great to be here. So how we use AI at Bioage is really to understand human aging. So human biology is incredibly complicated. You have, for example, tens of thousands of proteins in your body, each with a different role to play in health and disease, and it's fundamentally a data question to figure out which proteins matter for certain processes versus others.
And at bio read.
If you really study what makes individuals, helps individuals live long and live healthy for that for a long period of time, right, because some people are very healthy well into their nineties, they're still very physically capable, still very mentally capable. So AI for us is really at the beginning of the funnel helping do target ID and now with this financing, this incredible Series D finance, but that's
really going to power as our clinical development. So phase two clinical trials of our lead drug.
For obesity and that you're doing in combination with Eli Lilly, and I'm interested as to how much you have to go hand in hand with the older god those that are already bringing these to market.
That's a really great question. So our drug, which improves muscle and metabolic function, really shines in combination with these increten drugs, these drugs that Lily and Novo are are
currently building. So for the phase true trial, we're going to be combining our drug together with one of these with Lily's drug to show if we can increase the quantity of weight loss so that get more weight loss as well as the quality of weight loss, to have it be really healthier weight loss with a better balance of muscle the fat at the end of the treatment.
Importantly too, our drug is an oral drug. It's a pill, and the future here is really to instead of having to reject yourself all the time, have a weight loss pill that achieves the weight loss that you need and in a healthy way.
Kristin what's your biggest cost? Real quick? We had thirty seconds.
In the funds that you've gained, what are you going to spend on headcount or software or compute?
For sure? So for a biotech, the largest cost is the clinical trial itself. So you're going to require hundreds of people that are taking your drug for months at a time and look at a really comprehensive battery of tests, so that more than the headcount or the software is the big cost user.
Well, so you put that money to work. Tell us how trials go come back on the show.
Bioah Labs co founder CEO Kristin Fortney on that one hundred and seventy million dollar raise.
Meanwhile, well that does it for this edition.
Of Bloomberg Technology Comraine sun or snow or bring it to air here in New York.
But so much to digest that.
Yeah, and it's a big week for the gig economy. I really think this is going to be something that we'll be talking about and learning a lot about the world we live in through those earnings. Check out the pod recap, the conversations Apple, Spotify, iHeart from a snowy, blizzardy New York City and a standard luke warm sunny San Francisco.
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