From Marhart where Innovation of Money and Power Collie in Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
And Caroline Heydet Bloomberg's world headquarters in New York. Ed Ludlow is off. This is BlueBag Technology. Full market coverage ahead as a magnificent seven see momentum rally like never before last. We push your head to gamestops AGM as CEO Ryan Cohen gears up to deliver remarks, and we take a look at the summer box office as inside out to raks in over one hundred and fifty million
dollars over the weekend. First, let's check in on those markets because we are seeing some pause, shall we say, We are looking at what the federal Reserve comments are going to be this week after the policy yes last week signaled maybe are we going to get the eight cuts that the market is anticipating. More notably, is the political tension still happening over in Europe? Tenure yield just actually selling off significantly after there was this push for
Haven's last week. That calms a little. Why does it calm? Because Marie la penn Over in France right wing. Of course the person that we could see become prime minister if indeed we do see this role, this legislative vote go her direction. She's trying to calm the market, trying to calm well the broader French population to say she would be still backing institutions and she's support Macran if she did indeed become prime minister while he was president.
Cat forty sees some relief around nine ten percent move on. See what's happening on the individual movers today, because we are seeing a little bit of movement on what's happening in the chip sect. And now the socks was previously at a record high. We dive back from that as Nvidia indeed sinks. One hundred and thirty dollars is where
we currently trade. We're getting some big calls from some big investors and analysts still saying, look, we could go as high as one hundred and sixty dollars Suskahanna pointing us in that direction, but we just perhaps take profits. As we hit a new record high. Micron though up another two percent as we see analysts upgrade their price target on this particular stock. Broadcom also winning as we
look towards that stock split. They follow hot on the heels of Nvidia one hundred and ninety eight is where we trade. But look, we have seen these particular chip names do phenomenally well over the course of this year, and many are saying this is momentum strategy that's winning. Basically, what you do you buy the winners and you sell the laggards. It's always kind of a powerful force in the markets, but right now it has got a complete
tear on a scale that we've never seen before. We want to break it all down with bluebgg's Isabelle Lee, and it's a great bit of reporting coming from Bloomberg across our outlets, really talking about how much this momentum trade can stick because it's working.
Yes, it's definitely working on a scale never seen before. A de relative performance has their pass to that of the dot com bubble, which was in two thousand, so it's around twenty four years and it's really simple. You buy what's winning, you sell what's losing. But the question is will at last? And momentum has a tendency to go on and and thing until something stops.
It.
Worth noting though, that this stretch has been going on for quite a while, longer than usual. But what's concerning is how they're driving force is really most evaluations. It's not anything about great momentum, about earning. So this is why some people are worried that it might buckle any time now. But then, just with anything, this is the winning trade. There will always be losing trade, and the
losing one is value. But of course, if you're invested in momentum, and if you're tracking momentum, it's a great year so far, and the strategies that Bloomberg tracks are thirteen and top of the list momentum sixteen percent.
It's interesting that you say some of the worry is about whether it's on valuation, whether it's on earnings. Now, some would say in Vidia's earnings increases do indicate evaluation optake, but is it just the breadth. Is it some of the other names that are getting swept in on this, that are moving more on valuation the natural earnings guidance. So that's fair.
I mean, I think in Nvidia, every time I ask about in Nvidia, I do get Bolls and Bear. So it's like there's even no consensus. But the thing about this AA rallies. The big winners are getting bigger, and obviously everyone is left behind. I mean, you take a look at Apple Apple last week, so one if it's best this week in years just because of one announcement. And the thing is, it's interesting that these announcements wouldn't even roll out in the near future, so how will
we test whether they will work? But then, for the longest time, Microsoft's lead towards against Apple seem far, But now Apple is inching towards Microsoft just because of that one announcement of an Aichat GPT like integration basically to compete with Microsoft.
So that's the thing.
The players are so narrow and whether the momentum trade will last remains to be seen. Is AI really going to be a transformative technology that will drive profits and productivity or is it just going to give some companies a handful of cash for the meantime.
Well, I'm sure the companies are liking the handful as a cash for the time being. And indeed the investor is the bit on the winners as well. Lea breaking it all down, let's talk about what could be the castalyst that puts it to an end. Please to welcome Megan Horneman to the show. It's Capital Advisors CIO, and to that point, this has been a runaway trade, the momentum trade. What could stop it?
So you know, you mentioned it, it's a momentum trade.
So to be able to figure out exactly what we'll stop bit it's basically impossible. But we think that there's a couple of things to keep in mind. The interest rates right now. We did get that flight to quality last week, so yields went down markets like that, but then take a look at what's happening today.
Yields are backing up. That can take some.
Of this momentum matter this rally, because what's going to
happen is people will just start looking at valuations. And with the uncertainty around where interest rates are going, we obviously know that eventually the federal cut rates, we just don't know when and when you're looking at long term yields, when you're looking at the treasury market, the dynamics in the treasury market are just for higher yields because we have so much issuance that's out there, and this is something we think could take some wind out of this
sale here. It's just so it can be a valu valuation correction.
Really interestingly, you're looking at what's happening in terms of supply side with treasuries, Well, what about the inflation picture. What have you been taking from the PPI, the CPI and whether or not we are cooling or whether actually we're still just too high for too long.
It is cool and the data we got last week was good news, but let's keep in mind it was one month's data and we still are far way away from where the FED wants to be. And when you actually dig into some of those reports, this is a goods deflation story.
This isn't a service deflation story. In fact, we're still looking.
At service prices that are quite sticky, and housing as well is another thing that's sticky. These are things that the FED is going to be taking into consideration. This is why we think and we kind of lay in the camp hire for a little bit longer. We might get something in December, but we need a lot more information before we can say that the Fed can do that.
And just add in, as you say, that flight to quality, that volatility that we see because of political risk over in France of all places. I mean, how much Megan do you have to take in the global geopolitical risks right now.
I think it's something we have to consider when you're coming into this year. We knew we had a lot of elections and political risks globally, and let's keep in mind we still gotten to November here in the US. There's a lot from a political standpoint through this summer that can keep the markets on edge. And it just tends to be when there's so much risk out there. But there's so the markets are so high, you know, what's the upside risk from here? That's what I don't see.
I see a lot more downside risks from here than I do upside catalysts.
So what to do as a chief investment officer of capital advices? I mean, where do you see? Is it protecting your downside or is it hedging or is it more sort of reallocating in some way.
So at this point, there's hold cash, keep a good amount of dry powder that you can take advantage of opportunities. That's what we've been doing. Cash isn't hurting you right now. You're getting five percent or more. Eventually that won't be the case, but for now you have the cash to be able to look for opportunities, and there will be opportunities right now if you look at the market perts the market that are really unloved, look at small and MidCap stocks.
Now the economy starts to roll over.
They're going to struggle a bit, but that's the time to take advantage because that's where you see the best upside as we get out of this, you know, an economic slowdown, and they're priced so on a relative basis versus large cab the cheapest we've ever seen.
When you're thinking of a technology show such as ours, and many want to understand the realities you need to be diversified, but they also want to understand where the opportunities are outside of mag seven in technology, like is there a play for tech or indeed AI in small or medium sized companies, So.
You know, the AI is here with us, it's been here, but it's just only going to evolve going forward. The one thing when you think about AI is it's not just technology. And I know it's a technology show, so I apologize, but let's look at other areas of the market that will benefit from AI.
So what are the companies and sectors that are going.
To benefit from implementing AI that that we can see that in their earnings. Those are some of the things that we're looking at. Industrial is an idea some consumer stocks. I think it's right now a little bit cautious because the economy is weaken and consumers are definitely stretched. But think of where the companies that are going to benefit from the use of AI going forward.
What about energy, I mean, there's a great story, very well read all about the focus of Bill Gates at the moment, perhaps on nuclear energy, and I'm wondering whether you're seeing energy and some of the infrastructure needed for this new AI paradigm shift as a place to bet.
Yeah.
Absolutely, that is an area. Look at what utilities have been doing as well because of the use for it. But the infrastructure side, we don't have yet to be able to support what this AI is going to look like in the next decade, So we do need from an infrastructure standpoint. Those are some areas that we'll look at as well as we see some broader weakness in this market.
It's great to get a take that encapsulates a lot of tech, but also how to diversify outside and around it. Megan Honomon, we really appreciate it. Verdan's capital advisors stay well. Meanwhile, coming up, there's been a meme frenzy in Game Stops. Annual meeting actually kicks off today after it's postponed due to technical issues due to that meme demand last week. For details, that's coming up ahead. Meanwhile, look keep an
eye on shares of TSMC. We look at what happens in terms of trading of ADRs, which actually there is a trade here. There is a long favored arbitrategy strategy where you buy TSMC over in Taipei and you short the usadrs American Depository of receipts listed here. But it's becoming painful because basically the premium of the US is pushing ever higher. Will we see it turn around? This
has been big technology. Let's talk evs. Ferrari will release its first fully electric model next year, but it's open to a range of technologies. That's all according to the company's CEO. Now younger buyers favorite electric. For established customers, well, they're hesitant to give up this sportscar's trademark raw for Ari aims to offer traditional, hybrid and electric options to
satisfy all of its customers. And let's talk a little bit more along the electric vehicle route, because Tesla has gotten approval to test this advanced driver assistance system over on Shanghai streets. Who most Croatrudel joins us now, and how important is this for FSD, how important it is this for the Tesla business models.
It's an incremental step, and I do think that there's some potential for what Tesla markets is full self driving, to be a more meaningful contri contributor to their business in China, which they could really use at the moment. But what we don't know is just how long it's going to take them to be able to offer this
more widely. Even this incremental step that we're reporting on today really just applies to the city of Shanghai and potentially also Hang Joe, another city, And so we're not necessarily seeing China take the same sort of hands off approach that we've seen in the US, where you know, they've been able to offer you know, FSD nationwide and it wasn't all that much trouble for them to make this available to consumers. On the other hand, in China, they're really going to have to sort of you know,
in piecemeal fashion. Uh, you know, hit hit the sort of tick the boxes that they need to with regulators in order for consumers to be able to activate this.
And it feels as though MOSC has realized that he needed these green lights coming from regulators, he made whistlestop tours to Beijing and actually therefore having to play alongside all the other Chinese ev makers.
Yeah, that's right, And this has been you know, months in the making, even before that recent trip to Beijing that you mentioned. You know, this this is a case of Tesla having you know, offered the ability to buy this if you're a customer in China, but you know, not being able to actually activate it and you know, be deployed the the sort of ability to turn this on.
And so, you know, I think there's still a lot of questions about you know, just how willing Tesla is to continue to charge as much as it has for this system, depending on you know, how much sort of capability it's able to offer, because this is all going to be up to the regulators, and again I think they're going to you know, the likelihood that they're going to be as permissive as the US has been.
You know, where.
Washington has taken this view that we don't want to stand in the way.
We want to offer you know.
Driver assistance systems, you know, plenty of leash to try and you know offer you know, the sort of safety benefits without you know, getting in the way. That that still remains very much an open question.
Creat you down, We thank you so much all things Tesla, And now Tesla has a pretty loyal shareholder following so Tuesdays game Stop, so loyal that they're going to have to reschedule their annual meeting. It kicks off today twelve thirty pm local here in New York Eastern time. It was delayed last time because of technical issues going to break down why Bailey lipsheals and because too many of you what did it log one at the same.
Time, right, too many people trying to get in computer share saying that they had to reschedule it from Thursday afternoon again to your point, to twelve thirty to day.
We had to resort to twitch streams, YouTube streams, X streams, which was interesting because there were tens of thousands of people flocking to these channels that normally get maybe a half dozen people checking in on a daily basis, so people trying to find a way to stream and so fingers crossed it goes off without an egliches station.
And why is there so much demand? May who are we going to be hearing from? What are we going to be knowing?
No one knows.
So when you look at last year's AGM when Ryan Cohen, it was the first time as chairman leading this call, he spoke for about ninety seconds the entire call.
Ninety second ninety seconds, okay.
Entire The entire call lasted about fifteen from start to finish, So no one knows what's going to happen. There's so much interest in what whether Roaring Kitty Keith Gill could appear or be mentioned in any way, shape or form. The company did raise about three billion dollars through sales of new shares over the last two months, so will they address the cash hall that they have now about four billion doll the balance sheet?
Well, they addressed the strategy. No one really knows.
And I think that's part of the reason that people have to tune in because if Ryan Cohan appears, how long does he speak? Does someone else make a guest appearance or is it strictly business from some of the lawyers.
Now having tuned into Keith Gills's own YouTube channel the other week, it doesn't seem like he knows much about the strategy of game stuff either, but he does seem to be moving around his holdings. He's changing his options into actual share share ownership. That seemed to be pushing up the stock recently.
Yeah, there was some excitement around that.
So we saw about a week and a half ago he posted a screenshot on Reddit five million share stake, one hundred and twenty thousand call options. A couple of days later turned out he exited that call positions and reported north of nine million shares. So that makes him a top four holder if we take it at face value and is on paper worth The last time you posted about two hundred and sixty two million dollars, So where did he get the cash from?
How rich is he?
A lot of questions and uncertainty around that that he never addressed on his stream, but nonetheless, again if you take it at face value, what he posted on Reddit, top four holder from a retail shareholder who back in twenty twenty was preaching game stop, the Ryan Cohen vision and short squeeze.
And that's just focused for a minute on Ron Cohen, because if you haven't been a complete GameStop fanatic of the story or in teath the stock, why do we care so much.
About this individual co founder of Chewy So a lot of people bet against that, said they would be pets dot Com two point zero very successful sale to the PetSmart ultimately went public when he was no longer associated with the company, made a pretty nice fortune from that.
He took an activist stake back in twenty twenty in Game Stop, then pushed and really helped trigger alongside Keith Gill in early twenty twenty one, getting seats on the board, pushing for changes, ultimately ousting pretty much the entire management team, and now is the chairman, CEO, and president of the company.
And really the whole belief in Game.
Stop with Keith Gill's thesis, is that Ryan Cohen will be able to turn the company from a brick and mortar company that has shown slowing sales has slowan has shown a need to close some of those stores and completely revamp the business.
The question is what does that look like? How do we get there?
No one really knows, but that's the whole kind of group mentality behind the GameStop bulls, the retail investors who really like the stock.
Is that Ryan Cohen knows.
He won't tell us, but at some point this is going to end up working out. And that's really been why we've seen such a wild ride over the last three years. And you have to kind of at some point of your hat though, because ran Cohen and RC Adventures owns about eight and a half percent of the company, so he has put his money where his mouth is, and.
He's put some money in the balance sheet of GameStop too, And that's meant Citron, for example, has just exited. It short always great to get bad upshots on all of the backstory. Google, which has long been a pioneer in new technologies like AI, but it's just what's rivals like open AI harness its research it seems to leap frog it in the world of generative artificial intelligence. So the company is reorganized. Originally, Google had two separate AI laps.
Google Brain researchers kind of pursued passion projects with some loose oversight. Of course, the acquired deep Mind, co founded by AI Lunar and Dems Hasabis, who had this to say about the future of AI development.
I think AI is overhyped in the short term and probably underestimated over the long term, like the what it's going to bring, And I think that's probably true of a lot of breakthrough technologies. So I think we're seeing, because of the popularity of AI now in the last couple of years, lots of people trying to get into this space who maybe haven't thought about this as long as people like us who've been in it for decades.
And I think we're going to see a sort of rationalization process happening.
Indeed, that rationalization process is upon us with a combination of Google's two AI labs in twenty twenty three into a super unit called Google deep Mind. Look. It was to commercialize products and keep pace some competitors, but several employees are saying this move has been undermining the company's edge in foundational research. It's a great story written by Mark Bergen. We want more on this because is there attention internally after these and one year down of an amalgamation.
Yeah, I mean to be clear, it's Google. There's always intentioned internally, it's a it's a big messy company. I think what our story does it? I think I'm kind of unfolds here. Is that like part of it is geographical, right. Deep Minds historically has been London based that Google. Google is out of its headquarters in Mountain View. You've had these sort of competing labs that in some ways operated very differently.
Deep mind has.
For the past decade basically an incredibly well funded research operation and doing some cutting edge AI, probably the world's lead most cutting edge AI is not always connected to Google services. Google profits it's commercial center. Now they're they're attempting to, i think, swing much more in a focus on products, to be Gemini being the flagship one of
competing with open AI's model. I think there's a lot of there's there's still a lot of bumps and warts and all in that that merger, and there's always a conflict between how much is sort of doing these sort of core products versus more exploratory research.
Talking of bumps and warts and all. The commercialization hasn't gone that smoothly, and that is kind of the problem of being such a big company where they can't act like a startup all the time.
Yeah, I think so, Although you know, you'd think that it.
Clearly Google is under a much more scrutiny around for the kind of mess ups that they have, right the Gemini ones, which we've talked about, And I think that that's totally understandable given just how big of their services are, right like how many people are are using Google Search on a daily basis, and how much responsibility that has not just for their their bottom line, but obviously like the regulatory scrutiny they're under, and internally, I think that those,
you know, those screw ups that they've had recently, I think there's gonna be some interesting tension about how what changes they make when they when they launched, They clearly have been scrutinized and criticized for a long time, particularly from internally, from moving too slowly, and I think open Ai and Microsoft has really push Google to move pretty fast, and you could say that some of these pretty public snapfoos they've had with Gemini might be a consequence of that.
Demis of course seeing Alpha fold and medical applications real business model, but we see how Gemini continues to evolved as well as a great story, go read it. Mart Berg and a deep dive on goings on at the top when it comes to AI labs becoming one over at Google. Welcome back to Rerumot technology. I'm Caroline Hide in New York. Quick check on these markets for you, and we're currently up four tens percent on the bigger benchmarin the NASA one hundred managing to shake off some
of the anxiety over in European trading. In fact, the CAC forty rallies nine tens percent. We see Marine Lapenn, of course, the right wing contender trying to take the prime ministerial role, saying, look, she will abide and respect institutions and indeed work with President Macron. Get a little bit of a bounce back, but still the political anxiety is there. Bitcoin off by almost two percent. Look, we're only at sixty five thousand now, so we've seen some
profit taking in crypto. More broadly, move on, have a look at what some of the individual movers and shakers are because we are seeing some individual corporate moves up five percent for Autodesk. Why activist investor Starboard value is built up a stake in Autodesk, a software company more
than five hundred million dollars. They want to push for changes investors like that Dell Technologies, well, the CEO is selling out some more than three hundred million dollars worth of the stop, but that does not matter in terms of the selling pressure. We're currently up more than six point six percent. That seems to be more on analysts saying this is still a stock that you should be buying. I think it was JP Morgan that have been speaking
with executives. Indeed it was Morgan Stanley reiterating their topic after some management meetings. Meta off by some seven tenths of a percent lay, along with a number of social media companies really being forced to think about how much they look at AI chatbots, but more broadly, how much they also look at focusing on the Surgeon General calls for some warnings of addiction. Let's move on to look at what's happening with Adobe, because we've just had some
breaking news. We're off by more than three percent, having been training higher in a while, down earlier in hours, but still off by three point three. The FTC is taking action against software maker and two of its executives, that's Meninda Sweny and David Wodwani, apparently for deceiving consumers by hiding the early termination fees for its most popular subscription plan and making it basically difficult to cancel your subscription.
The FDC just releasing that action. We remain under pressure on Adobe after some stellar results last week that pushed the stock up more than ten percent. But let's turn to another corporate story right now, because we've all been thinking about how AI is affecting Microsoft. That seemed to be well ahead of Apple, but now not so much
the case. Ever since the iPhone maker unveiled its own AI in CHATCHYBT integrations at the beginning of last week for the iPhone, for the Mac, suddenly it feels like Microsoft's lead isn't so large anymore. We want to break it down when Bluemog's Austin car who's written for the Daily newsletter today, all about your own personal feelings of whether Microsoft has kind of slipped here. What's your takeaway from Apple? Why do you think they've got it right? So?
I'm an iPhone user and I'm also a Windows PC user. I've been sort of using the AI that's come with Windows for a little over a year now. Microsoft had this big lead, but then Apple launched or announced all these AI features last week, from you know, easier ways to search for your photos, to making sort of custom emojis with AI in your social interactions, interacting with Siri, and suddenly I got that same excitement I had with Microsoft about a year ago, but which I haven't really
had since then. These are all new products that are coming to the iPhone. They're going to integrate very well with my day to day use for the iPhone, iPad, MacBook, and so forth. And it's really interesting that, yeah, Apple was so far behind, seemingly just you know, a week or two ago, and suddenly a lot of consumers are really excited about these products they're launching, despite their super comparative simplicity with what Microsoft is launching by comparison.
Investors are pretty excited too, Austin. We're a new record highs. We're eclipsing and back to the most valuable company on the indices. What is it, more broadly that they're managing to integrate. Is it just that they're more consumer focused company than Microsoft?
Is?
You know?
I think one of the up sides that they have is a lot of these devices and services are already in people's hands, so they're sort of sprinkling AI on top of I message in case I want to send a custom meme. We don't have to download a new AI app. You already have series. So it just makes them a lot smarter. By comparison, Microsoft has to do a lot of the laid work. We don't have a
Windows phone. Yes you have Windows PCs or Microsoft Word and Excel, but it doesn't dominate your day to day life at least from a consumer standpoint the same way that Apple does. So that's really the upside that a company like Apple has. You were just talking earlier about Google. They run into a lot of these issues all the time because people expect it their Gemini product to be as good as Google Search, and it's just not easy.
Whereas Apple is coming in and saying, we're just going to do a lot of simple things and do them very very well and add them to the products that you're already used to. So they're not reinventing chat GPT, they're not trying to become a chat GPT competitor. In fact, they're integrating with chat GPT and anything that they can too.
They'll just boot you over to chat GPT and integration that I'm sure Microsoft is a little bit jealous of considering they invested about thirteen million dollars into open Ai.
True, Austin Carr has a great read. Thanks so much for coming on and giving us the feels around Apple. Meanwhile, let's stick with AI because it would seem like we vented kind of the AI startup. M and A. Season's growing number of artificial intelligence startup founders. Basically they're looking to sell their companies. Why because it's so expensive for
the compute power. CEO of Hugging Face is with us, which is just acquired a small company called a Gilla of ten million dollars forth acquisition to date, and he kind of told us that this might be occurring in the market. Cland along joins us some more. CEO of Hugging Face and what was it but a month or so ago they were sat in San Francisco and You're like, this is happening. This M and A is real, And I'm getting a lot of calls offering to sell the
startup to me. But you went out and found this on yourself.
Yes, And I think it's just just the beginning. I think we're going to start to see much many more acquisitions in the next the next few months. This acquisition is a good example. Aguila is a fantastic team based out of Spain working on a tremendously important topic, data sets and data for AI. Their name Aguila means clay in Spanish. That's a good image for what data sets and data are in AI. They're kind of like the foundation, the soil that allows machine learning and AI to grow.
So we're super excited about about this, and I feel like this is just the beginning for a man a for hurging Facebook, for the field of AI in general too.
Okay, so when you look at a ten million dollar deal, but I think the team's going to remain intact and they're almost going to continue to operate as they have been. How else would you want M and A to happen for hugging face? Will you do such sort of standalone deals? Will they get bigger?
Maybe?
I think it all depends on the talents, on the opportunities. As I was sharing with one of your other reporters, the volume of acquisition opportunities as really sky located in the past few months. Just Pacelona, I realized that we receiving over ten acquisition opportunities a week these days to its company.
Emails, how are you getting at emails?
Yeah, emails mostly or connecting with me on social social media definitely increased. So it's really interesting to see. I think there's this natural tendency of like console nutrition in AI and some companies like Hugging Face or others becoming some sort of magnets, right because of the visibility that we have, the talent that we have to compute that
we have. Uh and for all these startups that have good teams that have maybe early traction but might not attract the level of VC funding that is required for AI, Yeah, there's going to get a lot of opportunities for them to join other teams, which is which is an interesting trend.
Because you've raised hundreds of millions and there's Google, Amazon and Video all the all the whost who of corporate VC is invested in your previous round, so you've got the cash to be able to make these acquisitions. Got the compute power. Is there any theme of where these companies that are currently wanted to sell themselves are coming from? Is it geographical or is it within the statler like where is what are the problems they're trying to solve.
So I think a lot of it is a power lel to the concentration of VC bets in a way. I think right now vices are taking heavy, heavy bets on a couple of like very hot topics like for example, large language models. Right, you've seen maybe different raising of Mistrial out of France a coup a couple of days ago. And so when the startups are working on topics that are a little bit less hype for VC, like for example here it's data sets, it's kind of like a
different different picture, it's a different life. It's like a you know, I won't quote like quoting Rocky the world and all like sunshine and rainbows for AI startups that
are working on like less sexy AI topics. Yeah, and so we see a lot of opportunities in there, and it's it's super exciting because for example here for Aguilla working on data sets, on data which in my opinion now is becoming like the bottleleck or like the most important So pick for EI, right, because better data allows companies to take three base for example, and then find units and get better results for their use case than before.
So all these other two things that another that hype are super interesting.
I have to leave it there. I climbed along making the un sexy sexy for your business. We appreciate it. See you hugging face. Coming up, we're going to be talking about perhaps a little bit of M and A where they value lise VC Spotlight FPV Ventures managing partner
Wesley Chan joins us. Let's some quick look what's happening in the public markets too, though, because the FDC is taking action against Adobe and executives for hiding fees, says the Federal Trade Commission, preventing consumers from easily canceling software subscriptions down by more than three percent. They were down prior to this announcement. This will bring me technology time now for talking tech. First up, the US Surgeon General.
It's calling for warning labels on social media sites similar to those that you'll find on a cigarette card. Top health officials are calling on sites such as TikTok Instagram to include a warning to parents and it could harm the mental health of children. Legislation on the labels have
yet to be introduced. Plus, Indian fintech firm PATM is in talks to sell its movie and ticketing business to Zamato as it looks to unload long court assets, and the discussions between PATM and online food delivery firms Tomato are in a band stages, though other suitors have voiced interest, and the US Supreme Court has agreed to review a case over in Video's crypto mining revenue, and Video is seeking to stop an investor suit accusing the company being
deceptive about its crypto mining revenue before a twenty eighteen market downturn that the justices say they will hear in Videos contentions that the company lacks enough a simplicity to go forward now time for VC Spotlight. Joining us today is Wesley Chan FPV Ventures, co founder, a managing partner. And it's interesting that we talk about Nvidio just for our segment and you're kind of the anti AI voice in the room at the moment. Why what are you feeling around the hype?
I think there's too many people right. I love in contra and investing. When I invested in Canva on the Series A, there's one hundred and eleven investors that told them no, right, you're too far away. Or in Australia, we don't get how this is going to work with Adobe and Microsoft having these amazing tools in the market, we all people trained on them, and all of a sudden, Canva is now being used by everybody under thirty five
with over two billion of revenue. So I always look at it as what's the contrarian bet that we can be making. And if everybody's rushing into the fire or rushing away from the fire, what fire should we be running into.
It's kind of like going to.
Europe in the middle of the summer when everybody's off in school, you get crowd, you overpay. Every hotel room is a thousand euros a night. You want to be going in the middle of winter when it's empty and you can get the entire museum to yourself.
So that's what we look for.
We're not so much anti AI as we are conturring and we want to go bet and place the place the investment when the timing is right.
Okay, So where is the timing rightful right now? Where is the original check into Canva luring laying right now?
Well, some of the interesting bets are in areas where nobody thinks AI can can can make a difference, right. So one area that we're spending a lot of time is in drug development, in drug discovery.
So I hear a lot of people thinking AI is going to change structures.
Well, they're not making the bets yet, right, Like, if you look at companies in biotech right now, it's still kind of half dead, right, Like, there are investors investing in the lms, they're investing in the data management, some of them are investing into drug discovery, but not much. Right We just did a big investment in a company called in Data. They announced a fifty five million dollars round and they use AI to train on mass spectrometry data.
It's the same AI that they're training that you're finding on chat GVT, but they're training it on models and they're training it on data from mass spectrometries like the machines that you see on CSI, and they're trying to use that to discover new molecules that can cure cancer, that can like cure major diseases in natural compounds. And they're already found quite a few, and hence Microsoft has made a big investment into them. Again, it was not
obvious when we made the investment. It was concern. Everybody sat there and said, well, chat GPT's great for all this tech stuff and for writing essays and for helping high school students sort of create and re research, and all of a sudden, we have a company that's figured out how to discover new molecules.
Using some of the same AI tools.
That's not obvious. A lot of people thought that was crazy when we made the bet.
You're making very early bets, and I'm interested as to how long you ride with the bet, how much you can pay to play throughout the series that we get because we're kind of these corporate vcs wanting to come in on later rounds and then they wanting a cleaner capital base. Are they wanting to push people in earlier investors out.
And I'm fine with corporate vcs coming It makes me look good if they're, like, you know, coming into the
round after we made the investment. The important thing is we have to find the right timing and find the right moment when the founders have discovered a unique insight using the AI or using tools as within that AI provides to help them figure out how to make you know something major different right, whether it's drug discovery or it's helping people figure out how how to better balance their checkbooks or whatnot like that that moment in time when the founder sort of says like this will change
because of AI, or this will change and I'm using AI to help make that change.
That's where we get excited and you.
Can continue throughout all the series.
We were a venture fund, right.
One of the most amazing thing about venture funds is we have a ten year lifetime on the fund. Right, we'd like companies to exit earlier, but you know, our LPs are all long term investors, right, They're all endowments, they're all charitable institutions or university endowments.
Right.
They know that there's a ten year time horizon, and that's one of the greatest things that we have going for us in this business.
I'm not making the bet for tomorrow.
So that like some big corporate vis comes in the marks of the deal, We're placing the bet for a ten year down the road. People forget that Google took, you know, almost a decade to really realize it's a major potential, right at IPO six years after it was after its founding in two thousand and four, But it really was ten years when YouTube and when Android and when some of the bets that they placed early on in the early days of Google became to fruition.
And same with Canada. Right ten years.
It's been ten years and now everybody's sort of seeing how obvious it is. But back for the first five years, everybody sort of out there and scratched their head and said, I didn't get it.
What about getting out? Like what about sort of a company that does initially seem to do incredible work Flexport for example, and then has some tensions at the top and reorganization. Do you stick with them throughout that iteration?
Absolutely?
I mean I still hold every share of Flexport stock that I've invested in, right. I believe in Ryan and his team that much. It's the same with Google. When Google iPod, a lot of people have sort of said, let's dump the stock, like I don't get it. Like, you know, this company has hit its peak and at eighty five dollars a share, I think it's at sixteen or seventeen thousand dollars dollar a share. Right, that IPO investment at Google is one of the best venture investments
of all time. Right, too bad we don't do public equities, but it's one of those things where I look at it and go. Does this company have ten years of inflection points and does it have more coming? And the founders that we invest in, the mission driven founders that truly understand how the world will change when they create what they're creating, those are the ones that we care about, and they usually, you know, create a hundred year of plans.
I still remember Mal's hundred year plan in canber right like she grafted it out on a pirate ship map.
And I'm sure who perhaps had some insight to Google's a hundred year pan as well as you were over at Google Analytics and Google Voice or see. It's always great to get your controller inviews.
Thank you, thank you for having me.
Meanwhile, of course that's SPV ventures see Chang.
Oh.
It's a big weekend in the box office picks Ars Inside Out too, seeing the best film debut since Barbie. It scros one hundred and fifty five million dollars at the box office in the US and Canada. Meanwhile, social media has been a buzz with the streaming debut of season two of House of Dragon, which premiered last night.
There's a lot in terms of content, not to mention the latest film that actually will be allowed in China from Walt Disney, Let's stock it All with Githa Ranganath and of Bloomberg Intelligence focus in on Disney for a moment and the content and the fact that we've got people going back to the theaters. Do they just need the right movie at the right time with the right kind of audience.
I absolutely think so. And Disney is back in a big way, definitely. Big Star is back in a big way of Caroline, and so is the barks office. I mean, the box office has been really sleepy the whole of this year and especially this summer season, and for Disney in particular. I mean, we know they've had a whole
string of misfires, especially Pixar. We know that they released three movies direct to streaming during the pandemic era, and then after that, you know, they had light Year, they had Elemental, which kind of really struggled at the box office. But it looks like Inside Out, Too is really resonating with everybody. And I think, you know, of course, it is a movie that appeals to kids, but I think also to parents like you and me, and it's just such an emotionally charged film, and box office is all
about emotion. So they obviously got the formula right.
Every single parent of teen girls I'm talking to once they'd be able to discuss anxiety and how we come by this. And so this is one way I'm interested though about the global box office. Interestingly, we got on social media while Disney saying, look, we are going to bring Deadpool and wolverineto China. That's a big deal.
It's a huge deal. I mean, what we've seen over the past few years with China is that Western movies have kind of fallen out of favor a little bit. So if you just look at kind of how the Chinese box office has performed, Actually, China is one of the leading markets right now. If you look at year to date box office receipts, they're actually ahead of the US. So China is definitely critical to the global box office equation.
And if you kind of just look at how Hollywood movies have performed in China, about ten years ago they made up almost fifty percent of the Chinese box office.
That kind of.
Has been shrinking, so that was down to about thirty five percent and twenty nineteen and this year it's probably down to about ten percent.
So having a big movie like.
This, and especially one of the most anticipated movies of the summer, Deadpool and Wolverine go out in China. It is big news for Disney Night. Hopefully it will be big for the Chinese box office too.
What's interesting, though, is you say, the tension around whether any of us can be bothered to go to the theater right now when we can consume such great content when we sat a comfort to our own sofa, and to a large extent, House Dragon is exactly that. We are still wanting to see new content, but quite often from franchises we.
Know, oh absolutely, and you know that's exactly what some of these streaming platforms are are betting on, kind of making these investments in what they know, you know, will be appointment television and HBO and Max have obviously been the leaders, the global leaders when it comes to that, and of course House of Dragon, the Game of Thrones, all of these are you know, huge, huge titles for them, and they want to make that an event and an experience.
But you're absolutely right, you know, this past week and n has been such a big win, not just for you know, box office and movie going in general, and people are going and watching movies more in big screens. That is that is huge news. So this is they're making it like a whole big event. But then they're also coming back home and then you know, kind of relaxing on their couches and watching some great streaming content as well.
Summer line up. Eethther Rangon Anthon, We thank you bloombg Intelligence some great analysis and that does it for this edition of bloombag Technology. I forget to check out our podcast find on the terminal as well as online on Apple, Spotify, and iha, this is blombg Technology