From Marhart where Innovation of Money and Power Collie in Silicon Valley, NBN.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
I'm Caroline Heinde at Bloomberg's worldad quarters in New York, Alaned Ludlow in San Francisco.
This Bloomberg Technology coming up.
We sit down with the CEO of Lift to run through the company's results. Break down that all important clerical error that led to at one point a sixty seven percent surge in its shares.
Class.
Will be joined by Open Ai chair and former Salesforce CEO Brett Taylor as he raises one hundred and ten million dollars to bring AI agents to business.
And fighting talk from Mark Zuckerberg as he personally reviews Apple's Vision.
Pro whereas takeaways not good.
We'll discuss that and so much more throughout this hour, but first let's check in on these markets. Uber giving money back to the investor base. Remember they had a really strong quarter, they posted it last week, and then today after an investor meeting, they're giving us a share buyback. We're driving that stock up almost twelve percent on the back of that, as they managed to be bringing profitability
and therefore capital back to the investor base. Let's have a look at what's happening though with the rival Lift. I mean, what an extraordinary day we had yesterday earning's posted but an extra zero crept into the margin forecast five hundred bits. That was clerical error, they called it. We rose up to sixty seven percent in after ours trading. We then sunk back down. Now we are still trading higher on Lift for that five hundred margin becomes a
fifty margin. Overall, we've got to dig into the growth of this business and actually how they're giving back to the consumer. A key conversation that we're about to have now.
Welcome to our TV and radio audiences worldwide. Joining us now on the company's fourth quarter is Lift CEO David Risher and David a clerical error?
What happened?
Well, look, first of all, it's on me. There are a lot of eyes on this press release. But at the end of the day, my bad. But look, I don't want it to take anything away from the butt kicking performance that the business did thanks to all of our employees and thanks to millions of drivers. I mean, look, we had our financially strongest quota we've ever had, and I'm super excited about.
To be clear, this was simply a mistake, human error. The stock rose as much as six seven percent in after hours. As Caroline pointed out, it's significantly hard this morning, and we can talk about the performance in the quarter gone and the performance in the current period. This may sound bizarre to you, but I think it's a real question. Did you guys use AI to write that press release seriously? Or is this as simple as you are? Calling it a clerical error?
Now it was a clerical error.
Yeah, Now we're not at the point where press releases can be written by at least not financial pressure releases.
No way.
I hate to ask it because real people's jobs are now on the line, I'm sure, David, and I want to ask, is a cfo's role safe? Is this going to have repercussions from across your membership and employee.
Base the cfo's or is one hundred percent safe? One hundred percent safe? Look, she and the team are taking this incredibly seriously, and you have to understand. I mean, we go through hours and hours of checking and double checking before something like this goes. It's an unacceptable error. Again, Ultimately, it's on me. I'm the CEO.
Buck stops with me, but the team is taking it.
Super seriously, and I know that you want to be talking ultimately about how you're seeing growth in the business. And I'm sure that that's something that in a way, the salt in the wound is even greater because you had a great story to tell and it got marred by this particular error. But people are going back and saying that you've never seen anything like.
This in history.
David, what would you do differently in the next stannings? How can you make sure that it investors feel confident in the statements that you put out to them in the foreseeable future.
Yeah, I mean, look, I would look at our record and look at the growth, look at the fundamentals of the financials. And to be very clear, this was it was a bad error, but it was one zero in a press release and you know a lot of other pages, and of course we corrected it within seconds of finding it. So I think, you know, like with any mistake, I think it's not so much about the mistake itself, it's
also about how you correct for it. And we've corrected for it obviously in the moment putting out new materials, but also doing a really deep process type including having our own internal ardit team, a separate team look and figure out how we can make sure we never make a mistake.
Like this again.
Okay, if you're listening on Bloomberg Television and radio worldwide, we're joined by the CEO of Lift, David Risher, and I go back to the current stock performance. You are still up thirty two percent in the session, and there are so many stories within that, but I zero in on the gross booking outlook strong.
Yeah, what is the story there? For me?
I'm trying to make sense of the gig economy more broadly, on both the demand and supply side. But if you look at the consumer, you look at corporates spending, you guys are adding to this narrative that things are quite rosy out there.
And when does that stop? How long does it last?
Well, look, I don't know when it stops. That's the shricky thing to predict. But here's what I can tell you. We've had now four quarters of growth, increasing growth, and we had our biggest growth year last year of our company's history. And by the way, we're talking about billions of dollars, by the way, billions of dollars that end up going in drivers pockets. So you can see this is a really important part of the economy because it's a really important part of people's lives.
When people take the seven.
Hundred million trips they took last year on lift, they're going to see their parents, they're going to a tailor swift concert, they're going to work every day, they're coming home from work, they're going to see their doctor.
This is an important part of people's lives.
And then when drivers are driving, they're earning to save for a house, they're earned to save for tuition. They're earning because maybe they lost a W two job and they're three weeks away from picking up a new job and they need something to bridge them. So it doesn't surprise me that the gig economy is becoming increasingly es central part of people's lives and people's economic lives.
Your bigger competitor, Uber succeeded by adding new products to the app, diversifying even within ride hailing, and it proved that its algorithm is working in matching riders with efficient routes and drivers. Do you feel that you're going to be competitive in those domains.
I do.
I do.
Look, our focus is a huge strength. We are one hundred percent focused on ride share. You know, just yesterday we launched women plus Connect that allows a woman rider to pick a woman driver all across the United States two hundred and seventy markets. It's been a huge success over the first six months when we've been kind of trialing it. We launched a new driver standard that allows drivers to get a guarantee that they'll never earn less than seventy percent of what rider pays them after us
some fees. So, you know, this is the sort of innovation that we can do because we're focused on ride share. And look, I expect Uber to do pretty well. I think we'll do pretty well too. I think this is a really strong sector.
I'm going to go back to the drivers, David, because what's interesting on this day is there is strike action. There is on Valentine's Day, whether you're going to be flying to Miami, where they're going to be flying to Chicago, there might well be issues trying to get a new but or indeed a lift. And also in the UK as well, I'm interested as to what's happening when you are offering seventy percent guarantee, why still do they want to demand more even if you say, look, i'm giving you flexibility.
Yeah, I mean, first on the strike itself, Carolyn, It's been in the works for weeks, you know, so it predates the announcement of this new seventy percent guarantee. If you look at what the drivers are asking for, and I think these are reasonable things to bring up. They want more transparency on their pay. We've given it to them. We give them a very very clear weekly breakdown that says, this is how much riders paid you, this is how much we took, this is how much you get.
They've asked for a guarantee right so that they don't, you know, so that there's a floor to their earnings.
We've given them that too. They've asked for better visibility and deactivation. You know, if you, as a writer raise a complaint about about a driver, we.
Have a whole process we go through, and drivers, of course.
Don't want to be off the platform, particular if they think it was an unfair accusation. And now we cover something like seventy percent of those in less than twenty four hours. And there's a new one click button that allows drivers to sort of appeal the deactivation. So what we're doing is we're focused on drivers because we're obsessed over customers. That's kind of our thing, and by doing that, we think we can address a lot of their issues that they're raising.
JP Morgan actually completely in line with some of the words that you use there. The customer obsession is something they point out. The marketplace health is something they see to continuing to improve on supply tailwinds.
So really, drivers are not your.
Issue in the moment.
Compared to JP Morgan, another analyst, Opram from Nathan Nathanson, those saying ultimately are at the mercy of Uber when it comes to pricing power and take rates. Do you feel that way that you're in the mercy of Uber in some way?
No, I mean it's a competitive marketplace, so I think, you know, to a certain extent there at our mercy, like we're at theirs, right, we can't do things that are completely different and expect to have, you know, kind of reasonable results. But at the same time, you know, for example, let's again look at this driver Earn's guarantee. That's a that's a commitment we've made. It's a leadership move we've made. You know, we'll see whether Uber followers
or not. But that's an area where I would say they're going to want to look pretty closely at what we're doing and decide whether they want to follow us. But I think it should be honest. I think this is a healthy marketplace. It's got two good players in a Huber and Left, and we're both doing a good job. I like our strategy better because I think we're more focused on writers and drivers and I think that's a real strength.
But you know, they're going at a versification thing. We'll see if that works from them.
For our Bloomberg television and radio audience, we're speaking with LIFT CEO David Risher. And David as you know, we always go to our audience and ask what would you want to know from from David Risher? And it's the same question every time. Is LIFT and acquisition target? And many put people put forward hypotheses about the type of business you know, maybe an auto maker, maybe another convenience app. But where's your head at with that?
You call?
With your earnings performance?
But kicking yeah, but there are still free cash flow questions. There are still scale questions with lift.
Yeah, well let.
Me talk about those and then and then get to the court of the question.
Look, we were free cash flow.
Positor for the second time in our company's history this quarter, and we've committed to investors will be free cashul A positive for the year of twenty twenty four, so you know, and we have one point seven million dollars in the bank. So from a cash perspective, from a pretty good shape. From demand perspective, we're in good shape, highest demand ever.
From a supply perspective, we're in good shape, highest drivers hours since we've had since twenty nineteen, so you know, from a basic core and then again you think about it, seven hundred million rides in a year. I mean, think about a Delta air Lines that might do a couple thousand, maybe three or four thousand takeoff and landings a day, whereas we do, let's get two million a day. So our scale isn't really an issue for us. We've got
pretty good scale. Ask the acquisition thing, you know, just like people ask the same question, I always give the same answer.
I mean, our phone, you know, will pick up the.
Phone if someone calls because that's the deal, but it's not our focus.
Our focus is.
Customers, right Lifts CEO David Risher on set here in San Francisco.
Thank you so much for your time.
For sure, thanks.
I enjoyed it, Caroline, such a deep conversation. So thousands of US ride haaling workers. They're striking at major US airports today, also in the UK. In fact, what are they demanding been to pay benefits and in what organizers say is their largest strike yet. However, Uber has actually said, look, it won't have much impact on Valentine's Day operations. Joining us now to dig into the movement of Uber and Lyft and more notably, what's happening in the rest of
the ending space. Bloom Meg's Natalie Lang is here mandep Seeing of bloue Meg Intelligence. Natalie, I start with you this sort of pressure coming from ultimately the supply side and then worry about regulatory changes. Is it something that companies and investors should be worried about?
Still, It's definitely and overhang that analysts have been talking about. There's different laws that are coming up this year, such as the Supreme Court decision in California over Prop twenty two, which guarantee minimum pay for drivers. In Minnesota, people are fighting for better pay standards, and so it's definitely something
that would add costs for the company. But so far, whenever regulatory changes have been made, we see the company trying to pass that cost, either maybe from the driver side, or passing that cost to customers by adding a fee, like in New York they added a courier fee after a minimum wage was implemented, So in a way, the business has a way to sort of mitigate.
These Mandy, this has been a pretty astonishing week in the world of gig economy, in the world of convenience apps.
Call it what you will.
I guess let's go back in and zero on the Uber investor sweetener. It's an interesting one, but it's built on the back of a profitable year, and if you take that in aggregate with what David Risher of Lyft just told us, the demand side of this economy is holding up.
Yeah.
I mean, look, I've always felt these companies generate, you know, more value than the profitability that they have shown so far, and in this case, I think Uber has shown that it is working towards this vision of you know, becoming a super app where if you're thinking about transportation, you go to Uber, whether it's right sharing, delivery, or even taxis. I mean, we have come a full circle, you know, in terms of disrupting Taxis to having Taxis on Uber's platform.
And I think scale and operating efficiency is what drives a mode in this business, and I think Uber is clearly demonstrating that.
Okay, let's talk about Airbnb.
The company gives a forecast on sales to the current quarter that even at the low end, man deep is pretty good and then or sorry, Natalie, and then tells investors, actually, things aren't going to be that good, and then tells investors We're going to be different company in the future that does other things with the parties and AI summarize that story for us.
Right. A lot of this is what Brian Chesky has talked about being at an inflection point at the company that sort of the post pandemic travel trends, the post pandemic boom has sort of faded, and that's kind of
shown up in the financial performance. Growth isn't as strong as coming out of Omicron last year, and at the same time they've sort of cleaned up their apps and services a bit kind of encouraging more hosts to bring down some of the cleaning fees and encouraging more people to host, getting more users on the platform to make
it more reliable. So he feels this is they are at an inflection point to be able to expand beyond that core hosting service, going back to before the pandemic, more ambitious endeavors.
Okay, bloomberg'st Nasi lung Man Deep seeing of Bloomberg Intelligence, great analysis of a big week in the gig economy are coming up here on the program. We're going to get into Acamai's fourth quarter numbers with their CEO, Tom Layton.
Caroline more stocks to watch.
Yeah, Instacart under pressure as we were just looking at a moment ago. Now this is as it falls on its fourth.
Quarter revenue miss.
They're also cutting jobs at the company, restructuring. Heading pretty much at a pivotal moment for this particular company. We've seen the share price under pressure. As you can see over interur day it's almost down some ten percent. Mark Kelly of rit steph for example, saying it's a mixed fourth quarter results, a miss on the top line, but better gross transaction value.
And a bit dart.
But this is a company that's once again having to belt titan as they cut costs, and that means people from New York, from San Francisco. This is Blomberg Technology. Let's just take a look at Achami shares at the moment under pressure. This is after the company, the infrastructure software company reported fourth quarter results and look, it was relatively mixed is what the street is interpreting. Maybe a little bit cool and then expected an injusted and things for share.
They did indeed beat some expectations. We're going to walk through the numbers.
CEO Tom Naton is with us on piece to say, and just getting back to the mixed results. Weakness in core content delivery network that part of the business. What drove that weakness? Is there going to be some recovery, Tom.
Yeah, you know, we're the largest content delivery provider by far and very important business for us. But today most of our revenue is now security performing very well, growing in the mid teens.
And compute, which is a really.
Exciting area for US, did very well, reached half a billion dollars last year with strong growth forecasted for this year. So delivery important, great business market leader by far.
You know, pricing pressure there.
It's a business we've been in really created twenty five years ago, so there is some pricing pressure there. But the exciting I think things about Akamai would be the security business and the compute business, which is now approaching about two thirds of our revenue.
So the compute business is posting pretty solid top line growth. But what are we talking about that on the market for compute. Who are the customers you're serving and what is it that you offer?
Yeah, the compute marketplace is enormous, you know today it's well north of one hundred billion dollars and growing rapidly. And what Akamai is doing is bringing compute support for VMS, for containers, for Kubernetes to.
The edge and really the edge.
You know.
Our goal is by the end of this year to be supporting compute full stack compute in one hundred cities around the world, which nobody else does today, and that will give us a better performance, better scalability, and also because we can take advantage of our existing delivery platform, which is in four thousand locations, better economics so that our customers can get better performing compute for their applications at a lower price point, and.
Structurally, Tom, when you look about your business, where are you growing the most? Internally, we've talked about this idea that companies have had to reduce cost and then reallocate either talents or simply dollars because there are different speeds happening within their business lines. That's exactly what's happening with you, and I wondered how you've responded to that.
Yes, so we have shifted a lot of the resources an investment from the delivery side of the house into compute and also security, and so you see that reflected our numbers with the very strong growth in security and compute, very good profitability.
And we've been able to do that.
Investment because we have shifted a lot of resources from the delivery side.
Also, we're now big.
Users of our own compute platform for our own applications and that is saving us a lot of money which we then plow back into development of new capabilities to drive future growth.
It's interesting that some analysts note that the Bears are going to fixate on inline fourth quarter revenues shaping up a surprise as you mentioned with the compute beat, but ultimately the offset in the delivery and they seem to say, this is elusiveness of delivery stability. Can you guide us as to when and where we will start to see ultimately stability. You talk about the pricing pressure, but what about the traffic load tom.
Traffic growth is a little bit higher this year than it was last year, but still below historical pre pandemic norms. And of course there's you know, continued price pressure, and we're being more selective in the deals that we take. So we have been you know, not taking on some of the you know, the contracts and opportun unities there where it's less profitable.
Others you know, can do that.
That helps our profitability and helps us move more investment into security and compute, and so that's driving a little of what you see with you know, the revenue on the delivery side declining and the single digits. And really, you know, our focus is on where we're doing Security, which is a bigger product line growing in the mid teens, and Compute, which has enormous potential growing at over twenty percent.
So you'll see us continue to do that, and I think the focus really shouldn't be on delivery, and in fact, as a result of the continued shift into security and compute for our revenue. You know, this year, our guidance is they'll be accelerated overall top line growth for Akamai and continued strong bottom line growth.
We'll see when the ship I starts to fact to that in a little bit more on the day, But for now, we thank you so much. Tom Nathan has always for joining us the CEO of Akamai.
Let's check in on these markets.
Book at airbnbed have seen or run up in their stock.
Maybe there's a little bit of profit taking.
Maybe this is also the fact that they are still posting growth, but they're showing maybe a little bit of a downdraft or a cooling in momentum when it comes to overall room rates growth, as was pointing out by Bi. But what's notable is this as a company that's really starting to rely on AI, particularly when it comes to customer service. They're investing in particular there to improve the customer experience, and that's what we're going to be digging into a little bit more now.
That was the Brian Chesky message, transforming customer service using AI. What about transforming customer service with conversational AI. That's the promise of Sierra. It's the latest venture from former Salesforce co CEO Brett Taylor, of course, also the chair of Open Ai and former Google employee Clay Before Sierra is an AI agent which mirrors the nuances of human communication, but it's also empowered to take action to solve customers problems.
Delighted to say that Sierra's co founder is Breton Clay are here with us in San Francisco.
So Brett's start with you. I've been wondering a little while what you've been up to.
You raise some money and stealth for Sierra. You've come out as stealth, and you want to do something that's been talked about a bit in recent months, introduce an AI agent.
Yeah, we're really excited about this. You know, when you leave your job, especially jobs like we have, you want to go towards a big vision and from Clay in our perspective, conversational AI, I think is perhaps the most important consumer technology trend of a generation when you look
at it. The advent of the Internet and how it impacted company's ability to interact with their customers digitally, the birth of the smartphone, we think conversational AI is on par with those, and candidly, I think every company is going to need their own AI agent. That's going to be the way you interact with your customers, and I think it will be as important as your mobile app, as important as your website in just a few years.
Clay you raise some money, will two separate rounds, but essentially, I want to know how you guys got together. Interesting careers you've both had so far, whose idea.
Was it and why are you working together on this company.
Brett and I have actually known each other for almost twenty years. We met in our early days at Google, where we started our careers and have kept in touch ever since. And Brett and I both saw this wave of technology change and we're so excited about the potential in large language models and recent advances in AI and got together just over a year ago over lunch actually
and kind of hatched early plans there. And I think, like with most things we do, the idea came from us both, and we worked over the past almost eleven months to really discover and refine it, including with a number of what we call design partners early pilot customers who have helped us shape the platform and the idea.
Clay talk about that refining hallucinations. What are the key concern and maybe limitations in the here and the nower of generative AI more broadly and chat bolts in a generative AI form. What are you seeing Clay about improvements in that?
Well, first of.
All, I think what we've built with Sierra and conversational AI goes far beyond what I think most people will have experienced with chatbots. I think if you pulled Bloomberg readers and watchers, do they like chatbots that you use embedded on websites today? Probably zero of one hundred would say yes. But if you pulled those same hundred people and asked do you like talking with chat GPT, maybe one hundred would say yes.
And so the technology.
Underlying Sierra and our AI agents really fundamentally didn't exist much more than a year ago. And so we've built Sierra and the platform on this fundamentally new technology. As for hallucinations, it's a really important issue. And as you know, AI is fundamentally non deterministic and using a large language model on its own, you can't guarantee what it will output.
So we've taken a multi.
Layered approach to security, starting with very strict security protocols around whenever our AI agents are taking action and using systems, those are done completely deterministically. We also imbue our agents with knowledge invited to us by our customers, and have multiple layers of supervision and oversight, including advanced auditing and inspection tools for our customers to use.
It's interesting that Brett, we just had Clay reference chat GPT, and of course you are the chair of the board of open Ai.
I'm really interested in.
When you're building another generative AI company that might well also be seen as a competitor, how you think about that from an ethical perspective.
Well, first, I really don't think open ai and Sierra are competitive. I think I think we'll look back at this here and it would be sort of like saying
you're an Internet company today. It doesn't make sense because the Internet permeates every business and every decision we make, and I think AI will have a similar impact, and we exist at a sort of a different layer of the stack where customers of open ai, in addition to a number of other foundation models, and obviously at open I operated more of a governance role not an operational role, and certainly if there's ever an opportunity for conflict, I'd
simply recuse myself. And I can say I'm really grateful to be a part of Opening Eye. I joined that board and a story that you covered extensively, and I think the mission is more important than ever before, and I'm grateful to be a part of that mission.
Clay, one of the things I've learned in my reporting of open ai is that the cap table is complicated and important, but actually access to compute and your strategic partners are equally as important, if not more. What is Sierra done in its access to AI accelerators on that end of the spectrum, but also what are your relationships with the hyperscalers and your talent base as well well.
First of all, the technology approach that we use to building SERRA agents is what's called an autonomous AI agent architecture, and what we do is, rather than relying on a single model, any action that the agent takes might rely on five or six different models for different tasks, reasoning, decision planning, generating responses and more, and so we actually use a constellation of models. We currently work with open AIY we work with Azure, Cognitive Services and others on
our cloud infrastructure. In our model providers, we generally rely on them to provision and provide the underlying hardware that we scale through. So we're a step removed from it, but it's always on our mind, and we've taken multiple steps to ensure that we can plan for capacity and use and so on.
Brett, if you don't mind, I'd like to linger on your CV a bit, because what's happened in the last twelve months is extraordinary. You have companies like yours coming out of stealth raising vast amounts of money. You said that, Clay said you'd put this together in eleven months. But I just want to understand how this process compares to your time at Salesforce, the earlier days at Google in eleven months. How big is your team grown to? Is it just the two of you in a garage somewhere?
You know.
I think people don't really have a great sense of what building a startup that rapidly is, Like, well, I've.
Gone from eighty thousand employees to thirty and it's been delightful. And actually, let me just contextualize it in sort of the story of Silicon Valley. If you look at the previous significant technology waves, the growth of the Internet in the late nineties, the growth of the smartphone, and the twenty tens, those periods coincide with many startups that start then that become formidable companies. Our two predecessors, Salesforce and Google were born in the birth of the web browser.
Companies like Uber and Lyft that you were just speaking about came to exist because of the birth of the smartphone. So in these moments where there's a significant new technology trend that means new consumer behaviors, new technology models, often new business models, there's really an opportunity for startups to compete. Again, there's a great Steve Jobs quote that it's more fun to be a pirate than it is to be in
the Navy. And there's these moments in Silicon Valley history where you have an opportunity a smaller company where your agility and your ability to have that unique market perspective is an advantage. It doesn't mean that incumbents don't have advantages, but it's a fun time to be a startup right now, and because no one knows what the future of this technology will bring and we have an opportunity to define it, Clay.
There are other startups doing this, and I think of forethought, I think of Aida, and I think of ultimately what holds back and what you're having to do is to connect with other enterprise systems. I've been talking to Kaifu Lee, for example, yesterday, who's saying agents personal agents sound like they're going to be really easy to orchestrate, but they're not because there's going to be pushed back from incumbents.
How much pushback have you felt, how much of enterprise systems and other big companies already playing in the enterprise space been willing to allow a company agent to navigate with them.
Well, first of all, we've had the privilege of working with many leading consumer brands and actually developing the first version of our platform, brands like weight Watchers, so nos Serious, XM, and Olakai, and we've worked hand in hand with them to develop our cr platform and the agent architecture to make sure that it's trustworthy, that it can integrate seamlessly and easily, and it's easy to deploy with their systems, and that the experience it delivers for their customers is
really delightful. And so you're right. In order to have these agents able to take action on behalf of your customers, there is some work to do to integrate with systems and your knowledge bases and so on. We're really proud of how easy we've made that, and in fact, a Serra agent can be deployed in just a matter of weeks.
Our colleague Katie Ruth broke the story about your fundraises and the near evaluation of a billion dollars. What justifies those numbers? You know, you kind of tease some of the customers that you worked with in the development process. We mentioned Airbnb has an ambition to integrate agents, I suppose into their customer service offering. Who are you talking to? You know, how quickly do you come magialize this spreap?
Well, Number one, we're really focused on our customers. We're really focused on the largest consumer brands. SOHO I think would benefit the most from this conversationally, I think they'll save the most and operating expenses, not just retailers. If you think we've partnered with media companies, all subscription services, airlines,
travel companies. We think there's really broad consumer categories that can benefit from this and as Clay said, the unique requirements of these larger enterprises, I think here is uniquely able to handle. You talk about valuations. You know, it's funny you talk about the dot com bubble, and I think a lot of people think of pets, dot com
and web fits. If you could go back in time and buy an index fund of all of those dot com companies, you'd also get Amazon, You'd also get Google, you'd get eBay, you'd get PayPal, and you probably would make a ton. I think, as you're looking at investment right now, it's certainly frothy, it's certainly a bit of an AI bubble. However, I think the thesis that out of this AI wave will come many generational companies uniquely
built on this technology is probably true. So I think it's probably both true that there's a lot of hype and that this technology wave is going to fundamentally change the way we interact with consumers and fundamentally change the market of the technology economy.
And I think it's exciting.
So I think we have a lot of work to do to justify the faith that our investors have in us, and but I could not be more optimistic about the future.
Sierra co found in CEO Brett Taylor and co founder Clay Before great conversation that was I guess a Silicon Valley classic in the new era of Caroline and it.
Just while coming up, we'll talk about well, another classic in the Silicon Valley area. Why Combinator's placing its bets on perhaps some different areas at the moment. We're going to talk about it all with Delton Coldwell, Managing director over there at YC. This is Bluemo Technology on today's VC Spotlight, Why Combinator. It's going a whole new request
for startups for you. The request, well, it's a bit of a tradition at the firm, with each one laying out some big ideas, some inspirations, some spaces basically that they want well the entrepreneur to focus in on and where they want their investments to back. The new list includes twenty categories. We've got machine learning applied to robotics, we got new defense technology, got climate tech. Let's bring in y Combinator partner and Investments Managing Director Dalton Caldwell
for more on this and the inspiration. Let's take one, for example, robotics. Now, the limitations are real world data. We've got to go out there and understand how robotics really interact with the real world. We've got a lot of online data, we don't have that much real world data. But what do you want to be anticipated and built here? What are you looking to back?
Yeah, thanks much for having me. And to start off the RFS, the Request for Startups has a rich history at YS, and we put these out honestly kind of for fun. We put these out to inspire people to be aware of the kind of ideas we want to fund.
So let's talk about robotics.
Which is the one you just asked me about.
Sometimes you'll see founders trying to come up with an idea and they're not sure what investors want to fund, and sometimes they're insecure or they're worried that maybe YC doesn't want to fund a robotics startup. And so the goal of this RFS and all these RFSs is just to give a little bit of a window into our brains of the sorts of startups that we'd love to see apply that we're excited to see people apply with.
And you know, the.
Deep insights that's the founder's department about how exactly to implement it. But the goal of putting out say again this robotics one is to is to signal to people that are curious if maybe they should apply to YC with a robotics idea that yes, they definitely should.
Yeah right, Dalton does why Combinator still require Is it still mandatory if you get into the summer or winter class to be in person in San Francisco?
Yeah, yeah, we shure you.
It's an in person program.
All of our meetings with the founders are in person, so yeah, that's right.
The reason I ask is that I have a documentary coming soon called Cerebral Valley. Your friend and colleague Gary Tanner is in it, and at the time we shot it, you guys had around thirty five percent of that ben class working in AI. And it looks at why there's a really high concentration of talent coming to San Francisco.
What you're doing is kind of the opposite. You're the pool.
You're saying, come, you know, we want specifically people focused in this area. But answer that question for me, why is there such a high concentration of talent in these areas already in San Francisco, Like nowhere else.
Well, look, I think there's a rich history of technology
being in the Bay Area. In fact, we've even put out a video that myself and one of my colleagues, Michael Isn't in specifically about whether a founder should consider moving to the Bay Area or not and what the pros and cons are, But to quickly summarize it, there's network effects from all these things being here in the fifties and sixties, the history of computing, and those network effects still continue to pay off all these years later, where the folks that worked at a prior generation of
companies tend to stay around, just like the folks that are on the segment before me. You can see that they've benefited tremendously from being in the Bay Area and continue to do so.
And it sounds like they're choosing to.
Put their start up here too.
So you know, this isn't a new This isn't a new phenomena.
I think this is going on a long time.
Let's go back to the inspiration in the areas that you want to see things built, and space is another one that you highlight. Maybe you would say that's not dominated so much by the Bay Area. I think a Leo Labs. It's over in Europe, and there's also some other key space companies being built more broadly around the United States.
But what do you want?
Where is the opportunity do you think to build in space tech?
I think that's an excellent question.
The reason we put this RFS out was that I think founders sometimes feel that space ideas are too ambitious, or that maybe you know, they see the kind of companies that are currently raising money. You know, this is the naive algorithm A lot of founders do for what start up idea to work on.
Is they go read.
Articles or you know, see TV segments on what raises the most money, and they're like, I'll do that, but with a tiny difference, a subtle difference, and then I'll raise money.
And so we want to put out.
Things like space to inspire people that yes, we will definitely fund space companies. We've had a lot of success funding space companies such as Stoke Space and Relativity Space. And there's this Moore's law type of effect happening on how easy and cheap it is to get objects into space, and the side off factor that we think is going to be staggering similar to Moore's law affecting computing, similar thing that we think is going to happen for space.
And so again we're just trying to signal to people if you're considering doing a space startup, A, you know, seems like a good idea, and B we would love to see you apply to YC with that idea.
All right, y Combinator partner and Investments managing director, don't in call world, good to catch up. Thank you for your time sticking with Space. Actually it's some news crossing the terminal this hour. Elon Musks Starlink has won a license to operate in Israel and parts of the Gaza Strip after agreeing to a series of measures that prevent
Hermas from getting access to its satellite internet services. I think this story is important, and the use cases identified are for example, in field hospitals and by Israeli government agencies.
But will continue to track that story.
All right, guys, So I finally tried Apple's Vision Pro, and you know, I have to say that before this, I expected that Quest would be the better value for most people, since it's really good and it's like seven times less expensive, But after using it, I don't just think that quest is the better value. I think the question is the better product period?
Meta CEO Mark Zuckerberg taking aim at the Vision Pro with metas Quest three. Let's get right to Bloomberg's Mark German. Wow, what a video. Interesting analysis from their side of the the technological divide.
What was said?
Yeah, you know, Zuckerberg went right at the Vision Pro. He talked about field of view. Oh, he talked about comfort, he talked about pass through quality, he talked about the resolution of the displays. He implied that the Vision Pro, as we've discussed before, as an over engineered product where they've put these extremely high resolution panels into the product, bringing up the price. But what are the use cases for that? And so I think he made a few
salient points. I think he did something that he had to do. I think his review that he posted on Instagram is really going to drum up sales of the metaquest. I think this is going to help sell his product. But that's the positive. On the other side, I think a few years time, remember the Vision Pro is a first generation product. In a few years time, I think Apple's going to figure some stuff out. I think the price is probably going to come down a little bit.
The comfort is going to improve the use. Since they're going to improve, the app store will finally include some interesting apps. And at that point people will be going back and playing the Zuckerberg video and it won't look so great. So I think for his sake, he should have said he thinks it will improve.
In the few gentlemen, we thank you. This is Bloomberg Technology.