From Marhart where Innovation, Money and power Collie in Silicon Vallet NBN.
This is Bloomberg Technology with Caroline Hide.
And Ed Ludlow. I Meed Ludlow in San Francisco. Caroline hides off today. This is Bloomberg Technology coming up on the program. Full earnings coverage ahead, Lift Falls after the ride sharing company reported its slowest revenue growth in two years plus. We sit down with GM president Mark Royce as the company unveils its first all electric escalade IQ, and Amazon is in talks to be an anchor investor in arms IPO in a deal that could raise as much as ten billion for the chip company. Those are
our top stories. First, a check on the markets. Tech is lower at the index level than as that one hundred down more than a percentage point. It is chip stocks where we're seeing the biggest declines. The Philadelphia Semiconductor Index or socks softer by one point six percent, underperforming the market. We're waiting for the CPI print here in the US Thursday. We look at that data and then we think to ourselves, what will the Federal Reserve do next?
And there is some posturing in the market from that point of view. But earnings is going to be a really big theme of this show. We have a number of earnings interviews with CEOs and actually the reaction to earnings to the downside also a factor, particularly for the NASDAK one hundred US tenure yield continues to go back
down towards four percent. Remember we've been talking about the steady trickle down from four point two percent back nearer to four percent, and Bitcoin still at that same twenty nine five hundred US dollars per token level. These are the two key names where we're starting to show. Lift first of all, is going to be one we're going to get to in just a moment with man Deep singer.
Bi Rivian is down seven and a half percent. Eve Maaker actually updated its production guidance for the year and lowered its guidance for a justed loss to four point two billion dollars. But there's something that the street doesn't like. We speak to CEO RJ. Scarrange. We asked why didn't they do more in terms of raising guidance. Then you got Lift. The story is that growth is the slowest since the pandemic era. They actually gave a pretty strong
outlook for the current quarter. There are some other concerns though there about Lift versus its peers. This is the reaction. Credit Suitee keeps an outperform rating on the shares, but it's lowered its price target to eighteen dollars from twenty three dollars following those results. What it sees is revenue offset by higher insurance costs going into twenty twenty four
and beyond. That's something we've talked about before. Let's break it all down with Bloomberg Intelligence Senior analyst Mandeep Singh. The thing is Mandy Lift's growth is below that of the rest of the ride share industry. How much is that a concern?
Well, I mean that's where when you look at all the market places, the skilled market places like booking, like erebnb, you know, it's a venotick all market and I feel it's going to pan out the same way in this case, simply because Lift doesn't have a differentiated offering when it comes to right sharing. I mean, consumers are price sensitive.
They're going to go with, you know, the company that has the lower ETAs, that has more variety in terms of the products it's offering, and over time, you know, when you look at lift strategy around lowering its prices, you have to ask yourself, what can they accomplish. It's they're not going to get an Amazon like a subscription model where they have a prime subscription and you know,
that's how you drive engagement. And that's where I feel like they're going to be short sighted in terms of using pricing as a lever and the marketplaces with the most supply growth eventually are the ones that you know end up winning. And that's where Uber has an advantage.
Which is showing a chat on the screen that active riders actually grew in the quarter. What are we learning from lyft about that business in a sense of engagement? You know, a ride is broadly coming back.
They are coming back, but when you compare it to pre pandemic levels, they're still not there. And all this is driven by subsidies. We know the biggest problem with this business model is the use of subsidies and how it affected the unit economics. It's the same thing here. Yes, you're going to bring those customers back, but how long are they going to stay and what is the repeat rate when it comes to you know, driving the transactions
on a recurring basis. And I think that's where if Lift raises prices or Uber lowers its prices, those customers are going to go back. And the retention level is fairly low at this point of time, I.
Feel Mandy David Richard, the CEO, told Bloomberg in an interview that he's trying to make Lifts healthier business, you know, move prices more in line with market. He only just joined in April. What's your assessment of the job he's done and what he can do really to change the fortunes of the company.
Yeah, And the good thing is I feel he's been open minded about all the strategic options, even you know, the company being up for sale, and when you look at the history of marketplaces, the distance second ones, whether it was grub Hub or Postmates or Caviar, these are all the small players they got taken out. And so in Lift's case, clearly, you know that is an option. The valuation is right now at its lowest level. You know, it's trading at one time sales and probably a B
two B partnership. It could be a catalyst. So there are a number of catalysts for them to you know, think of the next steps. Clearly, I think from a standalone perspective, it's a hard job, but at least I feel he's quite open minded about the various options on the table.
All right, Bloomberg Intelligence senior around list Man deep saying, if you're a rider or even a driver for lifts, and you've got to reach out to me on social media the other stuff we want Rivian. Rivian's leader doesn't see a need to raise capital before the end of twenty twenty five, even as the company pursues some costly projects. I talked to the EV makers CEO our Jascarrange a
day after the company reported better than expected earnings. As it works through the supply chain snags and accelerates EV production, have a listen.
Ultimately when we think about the path to the positive gross margin, ultimately the path the probabilities of business. We have a very clear line of site as we now have predictability in our production ramp, and we have really tight predictability around the supply chain and the contractual cost reductions that we're going to start to see. We're already witnessing those, as evidenced by the numbers we put up yesterday.
So we're looking with a lot of excitement towards the next several quarters as we march and run, I should say as fast as we can towards profitability, and that ultimately is the long term necessity for the business is to self finance our growth. Now, with that said, we've been also very clear that our cash balance and as you loose in your question, puts us in a position to be able to focus appropriately on the long term
as well. Meaning while we're very, very focused on ramping R one and eDV and driving those to the normal facility to twenty five percent gross margin, we're also developing and proceeding with the R two program and it's making great progress. I don't think I've been as excited as I am about R two as have ever been on
a product. So we're looking forward to showing that. But the cash balance we've put ourselves with the cash that we have, is put ourselves in a position to not need capital through the end of twenty twenty five.
You have the infrastructure to service the Amazon eDV. Does that mean you can now start shipping our one to Europe because that infrastructure is in.
Place today, We're focused in the immediate term on continued to ramp sales and deliveries in North America. We have so much demand backlog, We have so many customers that very much are looking forward to their vehicles that that
is the focus. And when we think about really going heavily into Europe, the R two program and that platform contemplates really a significant market entry and we think a really nice market fin So that's something that over the next few years will become a really important market for us.
You've talked a lot about trying to get out of the exclusivity agreement with Amazon. The other big question that your Rivian followers have is what type of deal would you do next? Would you go for the big fleet operators like ups or FedEx or you try to do many different deals with smaller mum and pop shops, smaller fleet operators.
There's elements of both, and we're seeing a broad spectrum of use cases from pure last mile delivery to more of a commercial ban application, and so we're navigating that as we speak. In terms of selecting following our Amazon relationship, what are the next big customers and then how to those sequence and together, and a lot of it ties to use case and trying to minimize the amount of complexity.
We had to the business by having similar use cases with the follow on immediate follow on customers, and then over time we'll broaden the use cases of course. As a platform, and it's an architecture who we call the Rivian Commercial Band Platform. It's designed long term to cover a very broad spectrum of three use cases.
There was Rivian CEO R. J. Scarrin speaking to me earlier. You look at the shares were down more than eight percent, but off session loads. If we close at this level of decline down more than eight percent, it's the biggest drop since March. They raised guidance to fifty two thousand units this year, but that's only two thousand more than
they previously said. And there are people out there in the market saying, really, guys, come on, because the plant in normal Illinois on paper can build many more electric vehicles than that even so big focus on cost cuts and they're doing well compared to some of those other names out there in the EV space. Speaking of coming up here on the program, we sit down with GM president Mark Royce as General Motors unveils its first all electric escalaid IQ. That conversation coming out out from the
East coast here on Bloomberg Technology. Welcome to our Bloomberg television and radio audience worldwide. General Motors unveiling its first all electric twenty twenty five Escalaid IQ. Let's send it over to Bloomberg's Matt Miller, who's sitting down with General Motors president Mark Royce.
Matted, thanks very much, Mark, We really appreciate you joining us. This is a very powerful vehicle with four hundred and fifty miles range, but also a very high price tag. Who are you aiming this product at.
Well, if you look at the current Escalade, you know we sold over a million units and you know, one out of every three of these SUVs in this luxury segment is an Escalade. So we've got a very successful brand. It's been, you know, an unbelievable vehicle for Cadillac and General Motors, but this has added to business. So we know there's people that are wanting an electric three to row SUV full sized suv. We're going to be the first ones that really bring it here with an iconic brand.
So we know this is in addition to our internal combustion engine escalating and you can see it as the next step in the design language for Cadillac, both inside and out, and so this is going to be right on the cutting edge of everything. It's the Escalade standard of the world, it really is.
So you already have the Hummer though, which is definitely on the cutting edge of everything, right, and early adopters who are waiting for a big electric vehicle, I'm assuming went out and got that. Who's left it to buy the Escalade A one hundred and thirty thousand to start.
Yeah, I was going to say, the ultimand platform here that we're talking about is very flexible and it's very different than the SUV offered from Hummer, and so you'll see it in the proportions here where we really are going after efficiency. With four hundred and fifty miles of range, that's a big deal for families and people who who travel, So it's a big range vehicle, but it's also seve
hundred and fifty horsepower. The Hummers are in the thousand horsepower stand in that part of the part of the market there, so it's a little bit different customer. It's very different from a duty cycle standpoint, but it's still built on the twenty four mod pack that we use in our battery electric truck platforms.
There has been some criticism about these big battery packs. Bloomberg New Energy Finance, for example, wrote that you're using a lot of lithium that maybe should be left for the smaller electric vehicles. How do you respond to.
That, Well, Jeneral Motors is going to make both number one, So we're going to make everything from the bolt with an LTM based pack here as we bring it back online, to the equinox to the So those are right in the biggest segments in the world at price points that are you know, the most affordable, right in the wheelhouse of those big voying segments. So we're going to do
that too. But you know, technology changes, and so anybody that thinks that we're going to have the same technology even a year from now chemistry rise with our battery systems across the whole industry isn't thinking about it quite right.
I think it's been mentioned before that the telem of communications industry, there is all these people that were fearful of copper, right, that all changed, right, and so you get into silicon, and you get into chips, you get into all those things that are new technologies on a breaking transformation of the industry. I can tell you the history books will see this as just the first step.
All right, we're talking again with Mark Roy's, president of General Motors, at the introduction of their brand new Cadillacs brand new ev Escalate IQ. And you know I have driven the Escalade, the v with also about seven hundred horsepower. Right, it's got a big V eight eats up a lot of gas. That's the problem you're trying to solve with this, but there are still going to be people out there
who want the V eight. How long are you going to sell the internal combustion engine Escalade next to the Escalade IQ.
Well, you are very different vehicles again in terms of the package. You know, we've got a huge amount of storage in this vehicle because of what we have up front where the engine used to be, and then also a longer wheelbase and the second row package is quite different too. So you have those things together, they're different vehicles, even though sort of the output on a power basis are similar. We're going to do both when as long
as people want both. And so you know, if you look at this over the long term horizon, the market and the customer, we haven't sold a vehicle like this ever, the market has never seen a vehicle like this. This is the first standard of the world, and so we're going to see what people do.
You are going to bring out the Silverado with I believe a similar battery pack and range at least as an option. Are you seeing price pressure, because as we're now seeing forward capitulate and cut prices, Tesla obviously driving that, how do you expect the pricing to work out well?
The pricing though, we're starting with the Silverado with our work truck, so you know, our pricing and our ladders and our battery capacity and range capacity and duty cycle capacity on Silverado and Sierra are going to be for everybody's pocket put and price points, so you know, we know where people want it from a work truck and our fleet standpoint, and then it'll it'll go all the way up through the RST, which will you know, again be a high range, high module. But you don't have
to just do that. So we're going to offer those things as options. Cutting price though, means that we didn't see it right, and I don't think that's true. I think we're right in that wheelhouse of what people can afford and want, and so you know, I feel good about our pricing.
Are these vehicles going to be profitable when you start selling them?
Yes?
And are you going to be able to make a million of them in twenty twenty five?
Not?
Not the escalated IQ electric vehicles.
Electric vehicle, Yeah, I think so. I think we're well on our track. You know, we're well. We did fifty thousand here the first half a year. That was our our target, and we did that. You got to bring cell plants along online as we do the assembly plans to make these. Our first plant in Lawstwn, Ohio is now full capacity and running really well on the second one will be in spring Hill, Tennessee, right next to
our lyric facility there, so that's coming online next. And the third one will be in Lansing, Michigan, and we're just you know, doing the construction on that right now. So once we get past the first plant in Lordstown, Ohio, we learned how to make them, we do it at volume. We duplicate that in spring Hill, and we duplicate that in Lansing. So the first ones out here we knew we're going to be, you know, something we've never done before. And we tackled that and we're doing it with high quality,
and we're doing it rates. So those are you know, that's how you get into volume production.
I got to ask about the negotiations with the UA, w are you prepared to make an expense of investment and raising those costs because their demands are I think they said pretty audacious.
I can't come on what people say or don't say about that. We are negotiating with our represented workforce in earnest as we always do, and we're there to make a good agreement, a fair agreement, an agreement that works for everybody. And that's all I have to say.
Mark, thanks very much, true time.
Really appreciate it.
Mark West, always a pleasure.
Thank President of General Motors talking to us about Cadillacs new Escalade iq.
ED Bloomberg's Matt Miller, thank you very much. Okay, time for work shifting, where we look at the changing landscape of the labor market amid advances in technology. First Up We Work is saying there's substantial doubt that the Coworking startup will be able to stay in business. The New York based company is bleeding cash and customers of its
office rentals are canceling their memberships in droves. CLA overnight soft Bank drops as much as four point six percent, the most since May, after it reported an unexpected net loss for the latest quarter and reframed from announcing any
plans to buy back shares. The company also said, by the way, it's cautiously resuming investments to capitalize on opportunities in AI and other emerging technologies, and the US Commerce Department has received more than four hundred and sixty statements for projects seeking federal funds from last year's Chips and
Science Acts. Proposals to the Department's office will compete for some of the thirty nine billion dollars in direct funding and seventy five billion dollars in loans under the law, which is aimed at reducing US reliance on Asia's semiconductor supply chains and of course, boosting domestic manufacturing of chip technology.
All right, Sticking with commerce, Amazon in talks to join other tech companies as an anchor investor in ARMS initial public offering that could raise as much as ten billion. That's according to a Bloomberg source. ARM is the chip designer that counts the world's biggest tech firms as some of its clients has also held to cushions, as we've reported,
with Intel and Nvidia joining us. For more, Bloomberg Technology Executive editor Tom Giles, this is an interesting one, I guess the obvious question is why would Amazon be an anchor investor in ARM.
So youah, one word for you, two hundred and fifty billion chips. That's how many chips ARM has designed over the years. ARM is an incredible player, incredibly important player in the design of chips. In particular, it's a leader in designing chips that are used in the data centers that are running all the all this computing power that Amazon Web Services is behind, the data centers that run things like Azure for Microsoft, the data centers that work
for Google for example. These are the kinds of chips that that that ARM is behind, and companies like Nvidia, Intel and amaz On want a piece of that. That's why there's so much interest in the ARM IPO right now.
Amazon uses, for example ARMS designs and the Graviton server chip. These talks about. One of the best stories in covering technology is always the big IPO. This feels like the Big IPO of twenty twenty three. We're waiting on a huge, huge and the anchor investors are notable in video intel, they're obviously chip makers as well. What's the vibe in the newsroom about this one? What are we trying to learn about?
Well, we're in this incredible lull for IPOs right now, and if ARM gets to market around the September timeframe, as we've been hearing and reporting, it's going to be a huge turning point right for the IPO market, which has been moribun for a very long time. We haven't seen much. This would be not just an important idea, but a very big IPO, the likes of which we haven't seen since Facebook many many years ago. And also
Ali Baba from China. So it's been a long time since we've seen IPOs of this size and it would be a big sharp in the arm through this market.
You know, we've been talking about Rivian on the show today. That was the last big ipo I covered in twenty twenty one in Amazon. One of the anchor investors in that. Bloomberg's Tom Giles is active editor. Thank you, Welcome back to Bloomberg Technology. Ed Ludlow here in San Francisco. Straight back to the earning story. These are the two names that we're watching, ak am I Marquetta, both moving to
the upside. Both CEOs join us on the program now, starting with Akamai Infrastructure Software Company out with second quarter results that beat expectations. The company also raising its full year forecast. Joining us now to discuss CEO and co founder Tom Layton. Let's start with the guidance right, you're going from it's a slight raise, the latest being twelve to fourteen percent. What gave you the common confidence to do that, first of all? And could you have gone even higher?
There's a lot of demand for our security solutions. We have the market leading products for web app firewall, and bought management, and we're really seeing strong demand for our market leading solutions to stop ransomware and data xfiltration that's in the micro segmentation area, and so that's led to increased confidence for how the security product group will do this year. We're also really thrilled to see we're back in double digit earnings growth now, which was.
A very nice place to be.
The number of analysts noting that you've kind of outperformed for a few quarters now, but particularly the security story is gaining momentum. What is the motivation for customers to spend to commit their investment on the security side. Yeah, good question.
You know, across the landscape there's challenging economic conditions and so spend is not easy to come by from enterprises. But they need to have security. They can't afford to have a major ransomware incident or data exfiltration problem, and Akamai has the leading solutions to protect them. So that's I think driving a lot of the business. Also, I think going forward, as you see the advances with jen Ai, that is going to give an asymmetric advantage to the attacker.
We've seen now with you know, the tools that have been developed, you know fraud, GPT worm, GPT Darkbard, all that stuff makes it a lot easier to make very malicious bots and to morph the malware. It's going to be easier to get around the traditional security defenses. And that's why being able to have that second line of defense inside an enterprise is so much more important now to know when you've been penetrated and to isolate it and to stop it from spreading before you get real damage.
You raise a point that many in your industry have going all the way. That's the RSA conference earlier in the year. Generative AI and quantum computing are just as much of a tool for the threat actors as they are as part of your defense strategy, and I wondered if you could just give us a little bit of insight into how seriously your customers take that. Do they acknowledge that there is a technological competence of the threats they face.
I think quantum computing isn't an issue yet, but genai is becoming one, and I think, you know, the realization is beginning to set in. You know, with any big technical advance and gen AI qualifies, you get a lot of good in some bad. And in this case, you know, it's an asymmetric advantage to the attacker when it comes
to trying to get past and enterprisers defenses. And so I think probably we're on the cusp of seeing a lot more attacks and a lot more effective attacks, and so, yeah, enterprises are concerned.
So it's bed a little bit about what's going on inside your company. You've cut costs, the streets, really happy with your performance, but what other changes you're making internally and what other investments might you make Yeah.
I think the next frontier in security is API security. We're making a lot of investments there. I think we're in a really good position to be able to help enterprises, and they are asking for help. Pretty much all the major enterprises know they've got a problem now with all the reliance on APIs and not having them having them
adequately secured. Also, we're making large investments in our infrastructure as a service business, cloud computing, and you know, with the idea that you know, we're going to be able to spin up and enterprises containers and vms in literally hundreds of places which they can't do today, and that will let them get much closer to the end user
and have better performance. And you know, by using our other capabilities that came from our delivery business, we think we can do that at lower costs than they're spending today with the hyper scalers. In many cases, you know, the hyperscalers are their competitor, and akam I will be their partner, all right.
A CAMI shares up more than nine percent on an interday basis, tracking for their biggest gain since May, highest level since May of twenty twenty two. At one point in the session, we're up thirteen percent, which would be the biggest jump going back to October of twenty eighteen. A cam I CEO Tom Layton, thank you very much. Another big name that we're tracking. Analysts quite pleased after comments.
Commerce payments platform Marquetta reported second quarter revenues that beat estimate, shares surging after the company renewed a partnership with Block to continue powering its popular cash app card product, and during the earning score there was talk of expanding its services to other markets. A lot to unpack. Who better to do it with than Marquetter CEO Simon calaff You know, analysts note that the getting the deal done with Block Simon extending removes and overhang on the stock. But what
does it actually do for your company? What kind of visibility to you now have in terms of your own growth and ability to improve the business?
First, thanks for having me and having marketa on your show. Indeed, the analysts are actually excited about multiple things. It's not just the renewal of the cash app contract. We did actually beat earnings with innewed the cash app. But actually what they're excited about is that embedded finance is not a real thing. It's no longer like a buzzword or a pivot of fintech and dislocating fintech from crypto. It's actually a real thing. It is making a big difference
in consumers' lives. And also they recognize the role MARKETA is playing an embedded finance. In fact, seven out of ten Americans are using a fintech or an embedded finance product that is built on top of MARKETA. I think that's what strive the excitement.
To this four years more with block actually give you.
It gives us the ability to continue to innovate with cash app. I think the phenomenal success that cash has achieved, and it was beyond anybody's expectation, is a combination of a phenomenal team at cash app that read the mind of the American consumer. They want a seamless banking experience or banking like experience that resembles the easy use of TikTok of YouTube or something that is not a banking product.
They want a product that that consumers love. And also it is the result of them working with players like us that obfuscate the complexity of the banking and financial system, so that relationship has led to the phenomenal growth, and now we extend that over the next four years. It gives both companies the ability to continue to innovate. We actually continue to obfuscate the complexity of the of the system and cash continues to innovate and take this to
modern more consumers. So it gets predictability for us as a company and give us a nice baseline to grow from.
Is there other things you can do with blog to diversify Markesa further?
There are so many things we can do with blog. Lots is a phenomenal company. I mean, as they've announced they have i'd say like low twenty million cards out there. They're growing so fast, but only a few percentage of those cardholders are putting the paycheck on the cash app. That could be extended. We as a company Marketa have had phenomenal success with acceleraated wage access, working with shift and gig workers for them to make their money instantly
without burdening the working capital at a company. That is something that cash app can do very very successfully. It actually speaks to the audience, it speaks to the install based So there's so many things we can do with block.
In terms of doing those things who do you phone? I mean, my real question is what's it like to do business with Jack Dorsey? Is he actually sort of engaged in active block and in your relationship with MARKETA.
We don't comment on who we work with a block. We work with many divisions of block, but I would say that we have a phenomenon relationship. It feels like it's one team and that's what it takes. These days, we no longer live in a world that you just have an API and everybody goes in their own direction.
We actually work with them, We partner with them and the nice thing and everybody has them lean So they're phenomenal at innovation, understanding the consumer, delivering to the consumer, and we're really good at obfuscating the complexities of the banking system, allowing them to move very fast on the consumer side while we actually focus on eliminating complexity of the banking system. It's been a pleasure working with that team over there.
Before we let you go as sign in two countries associated with MARKETA right now, our regions are sort of Brazil, Latin and Eastern Europe. Where are you looking to expand geographically? What are the next market opportunities for you.
Yes, we definitely see Brazil as a phenomenal opportunity for us. We just announced our partner and customer, Fitbank. We see tremendous opportunity. It is actually one of the fastest growing fintech markets. Everybody is on a mobile device, the technologies accepted, it's a large country, regulatory environments are favorable, so we're very excited about that.
And in Europe we've.
Seen a lot of interest, in a lot of excitement, and we've closed quite a few netnew logos in you so we are expanding into You're very excited about that. I mean, look at a global world. We have a lot of customers that have global ambitions and MARKETA is going to stand behind them. If they tell us we're going to go to the moon, We're going to be in the moon before. So we're very excited to put the deep relationship we have with our customers.
All right, Simon Colascio, MARKETA coming to me from over the Bay Bridge over in Oakland, Thank you very much. Now coming up here on Bloomberg Technology, we're going to talk about the rise of generative AI and its impact on the European VC ecosystem. That's with Target Global. Coming up next, this is Bloomberg. Let's talk about generative AI and it's impact on global VC, but what does it mean in particular for Europe and tech and European VC.
Let's discussed with Schmill Chafets for today's VC Spotlight. He's the founder and executive chairman of the Pan European VC firm Target Global. We've taught us a lot here in the United States about the starting gun of last November. Everything that's been happening in new companies being founded in the field of generative AI. Is that playing out in the countries and regions of Europe that you're looking at.
Yeah, so, first of all, thank you for having me. I think it's playing out globally obviously, and I think Europe is it's hard to set the boundaries right now on this type of technology. But I think it's also very easy to overestimate the short term impact that this is going to have and grossly underestimate the long term impact. And I think that's the one thing that you have to really consider when you're thinking about generative AI and what's going on in the market today.
There's this idea that here in San Francisco where I am. A lot of new AI and software focused companies are being started because of the historic relationship with Stanford. Are there any cities in Europe where you recognize there is a conveyor belt of talent coming out?
I mean, I think Europe. One of the interesting things about European tech generally speaking, is it's much more distributed than US tech. So I think everybody always tries to find the Silicon Valley of Europe, of China, of and I think that's not the right comparison. I think the beautiful thing is that Europe has about sixty five cities that have a unicorn. There is a very the ecosystem is very spread out, and it means that things can
grow in very unusual places. So of course you see London, Berlin, Tel Aviv being major hubs, but you really see incredible companies growing everywhere, and that includes Eastern Europe, Southern Europe to place like Spain, Poland Romania. And that's the challenge about investing in Europe, but that's also a great opportunity.
You're usually based in in Tel Aviv, Israel. The recent news flow and indeed we had an interview with Benjamin ette Ya who here on Bloomberg Television at the weekend is around the judicial ruling. Have you reconsidered how you view Israeli tech and the startups in in your in your home nation.
Uh? Well, I think, uh this is obviously, ah for for us, it's not a business question. It's a it's a deeper question about the hard and soul of our country. But as and but as an investor, of course, it's hard to completely ignore it. I think Israel still has incredible talent, a depth of innovation, and I think eventually
the industry will will prevail as the country will. And I think one of the amazing things to see is how the the tech industry and the VC industry are really in the forefront of the civil society in this and you know, it's people talk a lot about ESG, but this is actual ESG in the in the streets, you know, and it's it's to me, it's amazing.
On this program, we've had founders from Israel from a really broad range of industries, from self driving, the software, fintech as well. Are there any sort of sub sect is in the nation that you think are a strong point right now?
So cybersecurity is always extraordinarily interesting in Israel. And there's a couple of companies being sold now, there's I think you saw Whiz highlighted Forbes just now. So there's a lot of great things happening in cyber and I think Israel is well positioned around AI, around not necessarily the core and not maybe not the protocols, but a lot of the applications, data security, data integrity, and identity management.
A lot of those things are things that Israeli tech knows how to do and knows how to do well. So I think it is very well positioned.
One of the big stories of the day, Schmuel is ARM constant news for about its listing here in the United States. How much of a blow is it to European tech or the UK, even that I'm elected to list here in the States and not in continental Europe or in the London markets.
I mean, it's a great question. I honestly tend to think that in the listing venue is a bit of a political question. It's a political question, it's a pr question. I don't think it's material. I think what matters is that ARM is a UK company headquartered in Cambridge. What matters is that continues to do businesses in the UK, continues to have its IP in the UK, continues to employ and train engineers in the UK, and be a British company in the forefront of global technology, and continue
to grow. Where it's listed, where the shares are traded, where the financial engineering happens. I think it's there. You cannot ignore the fact that it's easier to do it in New York. There's more deal there, and it's easier for investors that look at global tech to look at one market. And I tend to think it's not a blow at all. I think it's an amazing outcome for the British ecosystem and for Europe to have a company like ARM and hopefully will be another one hundred billion
dollar European company. There aren't There aren't.
Enough of those, all right, schmiel Chafets, founder and executive chairman of Target Global, in today's VC Spotlight. Great to get more on the European perspective, all right, this is what they're talking about. ESPN has signed a long term exclusive agreement with casino operator Penn Entertainment, licensing its brand for sports betting and deepening the media giants ties to the growing online gambling business. Pen will have the tenure right to use the ESPN bet name in the US,
the company said in a statement Tuesday. Pen will rebrand it's Barstool sports book with ESPN starting this full. Pen also said it's selling all bits Bartel Sports subsidiary to David Portnoy, which is what they're talking about on the social media's So go ahead now to Disney's earnings coming out later today with our editor Chris Palmery. So, after the drama of Eiger's contract renewal, we go back to the existential question that you and I posed around some valley.
How do you become profitable in streaming? I think that's what investors are looking for.
It is, well, you know, one way is deals like this one. I was a little surprised the market reaction to the Penn Gaming deal. One and a half billion dollars guaranteed money for Disney slash ESPN and they can still, according to Penn on their car have adds from other sports betting companies on ESPN. So nothing really kind of
an upside it seems in this deal. And that's sort of how you invigorate our legacy brand like ESPN, which is you know, is struggling with losing traditional cable subscribers. So I'm sure Eiger's going to talk a lot about that deal on the call, and like we will get some questions broader. You know, what we've seen this earning cycle is, after all the pessimism about the legacy media businesses,
a lot of these companies have surprised profit wise. Warner Brothers Paramount, you know, they're advertising business on traditional TV channels is challenged, but they've cut a lot of costs and they're saving a lot of money with the strikes, and so the numbers have tended to look better.
You know, the ESPN pen deal, I wonder how much of Igu's fingerprints on it, specifically, because the other question a lot of people are asking is when do we see the full Eiger effect? What's he going to do to restructure Disney's businesses.
Well, that's one of the things people will be looking since they did a lot of cost cutting. Is you know, earlier this year seven thousand jobs, five million plus, you know in savings they were looking for, so may get an update on that. This is definitely an Eiger deal. If you remember the history of the sports betting thing. Betting was something that Disney historically shunned. It didn't, you know, license its Marvel superheroes, the slot machines, didn't allow them
on the cruise ships. This was a turnaround a few years ago under the previous CEO of Bob Chapek. He said, no, you know, we really can use the ESPN brand in sports betting, but he never got a deal done. There were a lot of talks, and so this is one that Iiger finally did close and probably at the last minute, because the sports betting market has already pretty much consolidated around a few players.
All Right, Bloombat's Chris Palmry is going to be a busy afternoon for both you and I with Disney earning. It's interesting the stock softer half percentage point in the session, but it's basically flat year today, really underperforming the S and P five hundred. Do the earnings change that going forward? Join us in twenty four hours time, because that does
it for this edition of bloombats Anology. Recap everything on the podcast, Apple, Spotify, iHeart, wherever you get your podcasts, as well as on the Bloomberg terminal from here in San Francisco. This is Bloomberg,