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This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
I'm Caroline Hyde and Bloomberg's weld head quarters in New York.
I'm Ed Lodlow in San Francisco. This is Bloomberg Technology.
Coming up, we have an exclusive interview with the CEO of Micron, Sanjay Mahotra, is going to be joining us as shares surge to a record high. That's after the company boosted its outlook on AI growth.
Plus, we push ahead to Reddit's long awaited IPO and sit down with reddits COO Jen Wong later this hour.
And of course we go live to the Department of Justice as they announ an antitrust lawsuit against Apple.
We're also thinking a lot about Micron. Shares of Micron at a record high, biggest jump since twenty eleven. The outlook for the fiscal third quarter a recovery and commoditized d RAM prices, but also a ramp in the next generation HBM three E that is the memory that supports the GPUs in training AI that is the conversation that we'll have. Let's dive right into microns earnings with CEO Sanjay Morotra as Sanja, good morning to you, and that's
how i'd frame it. Let's get right to the outlook for the fiscal third way up the factors for us. Was this all about the recovery in d RAM traditionally commoditized or is this more about the ramp up in HBM THREEE that is going in support of things like the h two hundred from Nvidia.
First of all, thank you Caroline and ED for having me on the show here. Our recovery is really driven by a demand related to AI with tight supply and actually demand that is strong across most of our end markets, particularly data centered driven demand. And Micron has a strong portfolio of products. Very excited about our latest offering of HV and three E that you refer to earlier. We have just begun shipments of this and we see strong growth in the several quarters that are ahead of us.
And supply is tight, leading edge nodes in particular, and and tight supply that's leading to price increases as well. So as we look ahead at twenty twenty four, our year of recovery. We see increasing prices driven by the demand supply fundamentals, and we look at twenty twenty five to be a record year for Micron's revenue with significantly improved profitability as well.
Twenty twenty five supply also mostly already allocated. You sold out on twenty twenty four. Say let's dig in on the high bandwidth memory because was it Jason Wyang over at in video calling this a technology miracle? Will it not get commoditized? Will prices remain elevated?
First of all, our sr HBM product that is sold out for calendar year twenty four, and a vast majority of the supply for our twenty twenty five is allocated as well. This is a critical product. HBM three E is in very very early stages here and it's key enabler of what AI platforms, generative AI platforms are able to do. Just think about it. I mean the latest Blackwell platform that has been announced. It has sixty four die of memory in it, so tremendous amount of silicon.
HBM is growing fast, expected to be about fifteen percent high teens, mid to high teens of the industry revenue over the course of next years compared to being just half of that last year. And as you look ahead at the new platforms being announced Nvidia earlier this week, Broadcom yesterday, they're all placing tremendous emphasis on the performance
and the power of HPM memory. As AI becomes bigger, data becomes bigger, data lives in the products that Micron makes for AI applications, lives in the kind of products such as HPM three E, but high density DIM modules as well as other products that Micron makes DDD ARE five memory and data center SSDs. So AI is really driving tremendous growth trajectory. HBM THREEE is absolutely going to
be critical. This is in very early innings and you know, even if there are any perturbations in supply, they will get absorbed over time. And what's important to understand is because HPM THREEE product is extremely silicon intensive across the industr, it is really leaving not enough supply for non HBM products and those are in tight supply, and that's what is driving tremendous strength in terms of demand supply fundamentals in pricing trajectory for memory.
And the question is, Sanjay, how do you keep up right HBM THREEE running at five point two gigabits per second. You've already mentioned blackwell, you're going to have to bring that next generation HBM nine gigabits per second faster. Just walk us through the real term ramp of your products, getting them into the real world and when they show up in your financials in the near and medium term.
Well, we talked about yesterday in our earnings call that we have begun shipments of HBM three E product. It's an industry leading product. It has the best performance in the lowest power in the industry, which you know for data center applications, power is critical. Thirty percent better power
for our HBM three E product. So we have really long legs in this HP and three E product for foreseeable future here and HPM three E has begun shipments, and we mentioned in the call yesterday that it will be a creative to our gross margins and we'll have several hundred million dollars of revenue of this HPM three E product in our fiscal year which will end in August timeframe. And of course we look at significant growth ahead for HPM three E as well. Our production has begun.
We are extremely focused on continuing to ramp this product. Our target is to get our share in HBM three E equivalent to our DRAM industry share, and we're going to remain extremely disciplined key will be absolutely managing the supply and demand fundamentals overall for the DRAM industry. So we look at strong growth ahead for our HPM three E. Keep in mind that HBM is expected to have a KAGHER greater than fifty percent over the course of next a few years in terms of bit growth that HPM
will be driving. Of course, it will be all the GENAI applications that we'll be driving this And I just want to add here that of course data center is a big driver of our growth. We are shifting our business more toward data center given the demand and the profitability profile of that part of the market. We are doing that with our DTA and products as well as
with our SSDs. But just want to point out that other markets such as smartphones and PCs, they too are implementing AI enabled devices and you'll start seeing them coming out from later this year, and of course twenty twenty five will be the first full year of all these devices on the edge, such as smart AI enabled smartphones and PCs. They take much higher memory content than their
prior generation devices. You're really, we're exciting about the opportunities for that AI enables for US enables for memory, which is at the heart of AI revolution in terms of from data center all the way to the edge.
Going back though, to this high bandwidth memory and going back to that market share that you say you want to own, can you articulate exactly what that share is going to be for our audience right now when we have Heinex Samsung likely to.
Be unveiling their products at the first half of this year.
Our share in DAM today in the industry is approximately twenty three percent, and we are targeting that our HBM share would be in line with that DRAM industry share. Of course, it will be ramping gradually over time. Sometime in twenty twenty five if we expect to be getting to our shared in HBM equal in to DM share.
It's a product that has greater profitability and as we said, it really will be a driver of our revenue and profit growth along with the rest of the market that has strengthening fundamentals well for a bloom bag television right and let me just point out the most important thing is that our product has leadership specs, and that's why it's getting a strong customer pull. Leadership products. Again in terms of performance, bandwidth being about ten percent better than
other competitive products, power being thirty percent lower. Data centers today take up about three percent of the world's energy over the course of next several years, expected to continue to increase, getting to closer to high single digit percentage. That's where memory becomes extremely important in making sure that these accelerators for Jenai are running lower power, low power memory. Our thirty percent lower power solution is extremely attractive to our customers.
Sanjay, for our Bloomberg television and radio audience worldwide, you can point out a lot of things. We have a lot of questions for you to bear with us. Let's go back to on device because you clearly want to talk about that. We talk about on device a lot on this program, the smartphone and PC context. You are saying that there is a tangible benefit that you're seeing in orders for that, but.
Is that happening right now?
There is a lot of skepticism that on device processing of llms and generative AI tools is somewhere away. Are you telling us that this is material now or you're predicting that it's coming soon.
Well, earlier this year you saw Samsung S twenty four getting announced at Mobile World Congress, on it announced its Magic six Pro. And these are great examples where AI is being implemented, great examples of influencing on the edge. AI is being implemented, that's intent based, and that's really going to drive tremendous opportunity. Of course, these kind of high end next gen AI capabilities and PCs and smartphones will start getting to the marketplace later this year, twenty
twenty five will become the first full year. Over the course of next few years, next few short years, we would see that AI enabled devices will be representing let's say about a third of smartphones and PC markets, and they take much more content anywhere from forty percent two hundred percent more content in flagship AI enabled PCs and smartphones versus flagship AI in PC devices today, Sanjai, we've got flagship smartphone and PC devices.
Today, We've got a couple more key questions. We're going to keep it tight, fee, Sanjay, because we have been thinking about the CHIPSAC, We've been thinking about Intel getting that money. We've been thinking about you still building out in China and in India. Will you still be committed to putting money into Boise, into New York as well? Are you going to get the money from the government.
Well, we'll respeak to the chips ACKed and are previously announced plans for leading edge memory manufacturing in Boise and in the Syracuse area. Our application for chips ACT is underprocessing with the chips Program Office making good progress there. Of course, we will make the announcements when that process is completed. Important thing is that chips ACT enables us to bring with CHIPSACKED grants sufficient level of CHIPSACK grants,
investment tax credits, and local state government support. It helps bridge the cost gap with Asia operations. So it helps us bring leading edge memory manufacturing into semiconductors and of course that creates many jobs. It supports economic as well as national security, and memory is pivotal. We just talked about how pivotal memory is to AI applications. So think about it. Today, only two percent of world's memory total,
world's memory production is here in the US. Of course, it's all by micron at our facility in Manassas Virginia.
With chipsec support.
As we expand our leading edge memory manufacturing in Boise and Syracuse next decade, Sometime in next decade, we'll be able to get to ten percent over ten percent of world's leading edge memory production here in the US. And that's really Sunji significantly moving the needle, and Micron of course is committed to.
That, Sanjay, We're running out of time here. Bloomberg's reported that the US is considering restricting one of your Chinese rivals, CEXMT. My understanding is that Micron has been in support of that. Could you just outline Micron's position on the US restricting CXMT.
Look, the governments make their own decision and we are not going to speculate or speak on behalf of any of the actions. What we can tell you is that, of course China is an important market for US, just like China is an important market for the entire semiconductor industry, and we are veil engaged with the customer ecosystem there in terms of bringing value of our leading edge products in memory and storage, helping them drive their innovation road maps.
We want to thank you so much for your time today walking us through your numbers through the industry with which is growing at such pace. Micron CEO Sanjay Erroltra, thank you. Now turning our attention to the Department of Justice holding a key press conference as they announce their antitrust suit against Apple, which has been five years in the making. We just want to be dipping in and.
Bringing you some of those headlines. Of course, Merrit Garland.
The Attorney General, saying that Apple has monopoly power in the smartphone market. He's also been articulating that Apple has maintained power via exclusionary behavior at the moment, so to be turning our attention listening in to that press conference for a moment today.
The Department alleges that Apple, one of the world's largest tech companies, cross the line from rigorous competition to anti competitive exclusion, unlawfully maintaining a monopoly in violation of the Sherman Act. The complaint makes clear that for years Apple has tightened its grip on the smartphone market.
It has done so not through.
Product improvements, but by maintaining a chokehold on competition, locking its customers in to the iPhone while locking its competitors out of the market. As a result, and, as the complaint details, Apple has gone from revolutionizing the smartphone market to stalling its advancement. This shift has smothered an entire industry, from users to app developers to the next generation of innovator.
Apple's anti competitive conduct must stop. Sixteen other Attorneys General agree and have joined us in bringing this lawsuit against Apple.
I want to thank the women and the.
Men of the Anti Trust Division for their commitment to promoting competition and protecting consumers and workers in all of their work, and I want to thank Assistant Attorney General Canter for his leadership. Their work makes clear that no manual.
Has how fast the Deputy Attorney General LA speaking Lisa Monaco. But meanwhile, there's more breaking news, all focused in on Apple. I just want to bring you the headlines that Apple and Google are likely to be hit by the first investigations,
the first probes under the EU Digital Law. So of course there's the DMA which came into force just earlier this month, And of course there has been a keen eye on some of these labeled key gatekeepers as the EU singles out big tech, Apple and Google among them. The Digital Markets Act investigation could pay the way for fines, some big fines. Meta is also expected to be facing
some scrutiny in the EU's big tech clampdown. So much to discuss from EU, and indeed, what's happening right here with of course, the Department of Justice and sixteen attorneys general. Let's bring in bloombergs Ana Edjuton and anaag Rana for more on this. Anna, I want to begin with you, and let's start with what has been the culmination of a five year investigation. The key takeaways is to where exactly Apple has been monopolistic and shutting out others in the market.
Yeah, so we have been expecting this complaint for a long time. It started in twenty nineteen under the trub administration. And we see how Jonathan Cancer, the Assistan Attorney General for Anti trust, has really tried to tell a narrative
with this complaint. He's really tried to not just lay out the facts of what he alleges as anti competitive behavior by Apple, but tell it in a compelling way so that it's not just being decided in a court of law, but it's also compelling to normal consumers who you know, love their iPhones, love their Apple products. They can look at this complaint and see that this is behavior that's in some cases causing them higher prices that
could give them less choice. So that's really the goal of this complaint that you know, could also help its chases in the court of law.
Let me bring in Bloomberg Intelligence senior analysts and rag Rana an Arag. I'm looking at the shares with down three point four percent the low of the session. That decline is three point eight percent, put Apple on track for its biggest decline since August of last year.
You and I have talked about this for years.
Is the markets finally starting to price in the antitrust threat that Apple is facing?
I think, as you know, products slow down antitrust risks. I mean, Apple doesn't have much going on right now, so it's going to be interesting to see what they pull out in June in terms of anything, JENNYI because other than that, I mean, it's going to be a very gloomy year for them in terms of sales growth.
And I go want to follow up on that because this isn't just the US with its anti trust concerns. It's the EU as well with that and Google being hit potentially by the Digital Markets Act which come into force. Ultimately, Apple has at the edge has already been trying to change some of its business model, trying to appease with whether or not it's reducing certain payments that you're making for the app store, but it seems to be begging
from Peter to pay Paul. How much do you think Apple can change its business model without impacting its margins too much?
Yeah, I think the services business or the app store business will see some depression at least in the near dum.
And let's get back to this DOJ situation. I think it's worth for you re explaining to audience the basics here. The DOJ has been looking at Apple for like five years. It's the third time in a decade that they filed a suit. What are the specific allegations here?
This really focuses on the iPhone and the way the iPhone business runs and acts as a kind of moat around around the business. As a long suffering Android user who's always the green bubble in the family group chat, you know, you can see how there are certain things that you benefit iPhone users and being interoperable with other
Apple devices. So that's really the behavior that this complaint lays out, and it's interesting that Biden's anti trust enforcers came in kind of pushing the balance of anti trust law and wanting to really look at the behavior of these big American especially tech companies. But when it comes down to this complaint, the harm that is really being laid out is consumer prices, which of course is classic
anti trust. So there's an interesting balance between pushing anti trust law as far as it will go and really sticking to the arguments that they think will be successful in court.
Anna, As you mentioned, this has been long anticipated and has been going on for a long time five years. It is under President Trump that this first investigation began. It's the third time, in fact, in fourteen years that Apple has been focused on in this anti trust way from the DOJ. How quickly are we likely to see any real actions taken, any real implication in response to Apples.
Well, it's interesting that they file the case in federal court in New Jersey, so we'll learn more about why that was the case, but we know they do want to move quickly on this. If the Department of Justice has been a little frustrated with how slow their case against Google has gone. So the Justice Department also has more targets to finish.
Up the rest of this year.
They're working on another case against Google, so they have high ambitions. They want to take big swings, and Biden's first term is coming to an end, so there's definitely a big ambitions and limited resources and time to check all of those off.
Anna Rag, you really see a threat of this getting to consume as a window to jump to Android from iOS?
Oh No, I don't think that's going to be the case, frankly, because those things are extremely sticky from that point. I mean, I don't think one bubble is going to make a difference for people to jump from the other. Apple's really loyal customer base. What I'm concerned about is, you know, whether they can charge for the app store in the same frame book as they were before. I think that's going to be the bigger outcome in our view, rather than anything else.
And so a just interesting from the perspective that we are seeing this share price reaction down some three percent. That's not nothing for the second most valuable company out there. So do you think more weakness has to be factored in? Even though they have a very loyal base that perhaps might not be shifting to an Android or competitor on any changes to business models.
Yeah, I mean, as I said, services business is extremely important for them, both in terms of margin and diversification. If you compress those c it is going to have an impact on their boath, their top line as well as the bottom line. So this is a new overhang on the stock that you know, tops.
Up what's happening in Europe.
So there isn't much going on for Apple this year. You know, sales are growing, sales are not growing in terms of the products, and now the service is under pressure. So you know, that's really what's happening.
Here in our view and behind every doc move and appleys down three point three percent, as I said at the session, low three point eight percent. There are some people, some human beings. Tell me about this DOJ team that was up on the stage one moment ago that are leading this anti trust initiative against Apple.
Yeah, that's a great question.
I mean, Jonathan Cancer came into the anti trust division being labeled you know, Google's foe.
We knew that. You know, he had his.
Site set on big tech and that's part of this kind of neo Brandisian school of anti trust that we see also at the FTC with Lena Khan, the commissioner there, So you know, they've in some cases really worked together to reshape the understanding of anti trust law and really try to show how corporate behavior, even corporations that are well loved that produce products that people really enjoy, their
behavior results in higher prices for consumers. So you know, we see this also from the app developers like Spotify, Match Sonos who have complained for years that Apple's behavior puts them at a disadvantage competing with products like Apple Music. So that's all a part of this equation and is all going to be tried now in a court of law and we'll we'll see how it comes out.
I want to just return to you, Ana Rag for a moment and just think about ultimately where Apple has to stay from now in terms of its oval prioritizations. As you said, there's a worry about general to AI and being behind the curve there, will that stymey any relationship that it's trying to be brokering with Google. Will we still see sort of the ongoing build up of Apple and its presence in general to AI and still trying to refocus the business when it is having to be distracted in this way.
Yeah, I think that's going to be the biggest thing that we find out over the next few months. If they are able to pull off this, you know, you could say deal with Google. It's going to be symbiotic and beneficial for both the companies and that has the potential to improve iPhone sales in the second half of this year. You know, botting that there isn't much going on Apple at this point, both in terms of current status as well as you know the outlook for second half.
Anna Agrana, fantastic analysis. Thank you for being there at the moment. Rerumkexana Egerton as well with a breakdown of this anti trust move and the years that it's taken to get here.
Apple actively encourages banks, merchants, and other parties to participate in Apple Wallet, but it simultaneously exerts its monopoly power to block these same partners from developing alternative payment products and services for iPhone users.
Eric Garland, Attorney General, that is, as the DOJ in sixteen attorneys general weigh in bringing enforcement to Apple at the moment, announcing an antitrust lawsuit against Apple, and of course ed this is as we see the share price really being not by this off by more than three percent. It is the second most valuable company out there, So that knocks some twenty ninety two billion off of its market capitalization overall on the day training at the lowest
that we've seen since the start of the year. And all of this ultimately should have been expected.
It's a five year investigation, That's.
The observation I've made.
Though, So at the session low, the stock was down three point eight percent, putting Apple on track for its biggest decline since August last year. Bloomberg reported all these details last night, and yet when the press conference came and the official confirmation came, the stock continued to slide. And if you go on your Bloomberg terminal look at the street wrap.
There is an acknowledgment of.
A regulatory overhang, which every time you and I talk about anti trust over the last few years, it never shows up in the stock.
Yeah, and then you have to add in on that the other bloomberg scoop that came within this time of the fact that the EU is now weighing a full blown investigation on its part as well into Apple and Google when it comes to the digital markets app. So this is an antitrust global fixation on Apple right now.
Yeah.
The one point on that EU reporting is that I think the EU is looking at a lot of people alphabet and all, so we're reporting meta and that eventually that could lead to fine. So that is a story out of Europe that will continue to watch. There is another big story happening we may have forgotten. Let's turn to Reddit listing day. Here's some video of them ringing the bell at the NYC earlier. Have a great listener, I would say that, I say them, I don't think that's Steve Huffman in a mascot.
Suit, but I'm sure he was there.
That was Reddit ringing the ny Stock Exchange bell earlier this morning. Let's get some of the key numbers with Bloombo's Katie Ruth, and we have an indication of where Reddit might open.
Yeah, so we don't know exactly where it's going to open just yet, but last night it priced at thirty four dollars a share at the top of the range, which was, you know, a positive indication based on the road show and showing where you know, the street thinks it's going to open at you know, right now. What
they're doing is they're sorting out the book. They're figuring out precisely, you know, for the very very first trade to the public where it should trade at, because the IPO is actually just for insiders, and so a lot of ours are watching Reddit. There's been a dearth of tech IPOs in recent years. I mean, twenty twenty one is a very active year with over one hundred, and then in twenty twenty two there were nine, and then last year we only saw instacart, klaviow an arm, you
know for the big ones. And this week with Reddit in Astera, people are hoping might finally open that tech ipo window.
Just looking at this headline crossing the Bloomberg terminal that Reddit shares indicated to open between forty two and forty six dollars a share, clearly a premium on that thirty four dollar IPO pricing.
There is interest in this one, right.
It's been a long road because we thought they might go twenty twenty one, as you said, was an excellent year for US IPOs, and they didn't.
Yeah, they announced in twenty twenty one they had filed for IPO in twenty twenty two. I broke that they had hired bankers, and they did. It just took a little while for them to actually do it. But you know, I think it's it's a matter of are people interested
at what price? You know, they priced at something that valued them above six billion, but they were last valued at ten billion in twenty twenty one, and so yes, there is interest in Reddit at this price, it looks like, especially if it's popping, But it's a matter of, you know, will it will it be able to sustain that price? Will it be able to achieve the price it had in twenty twenty one at market highs at.
My named seeing a blue bug intelligence saying, yes, a ten billion valuation is really where Reddit should be, Katie. But I'm interested in the allocation and where it went when it was priced. To course, money flowing into institutional hands, but also into the retail investor and into the redditors themselves. How much volatility might this add well, I.
Think it depends on whether these longtime Reddit users that got access at the IPO price are are willing to stay Reddit stockholders. Part of the idea behind some of these consumer facing companies giving access to their top users at the IPO price. Is the idea that these would be long term stockholders. The IPO is only given to insiders, so people that are close to the banks normally and they get there's expected to be a pop on day one, and so it's seen as a gift that they get
access to those games on day one. And so this is meant to be a good thing for Reddit shareholders, Reddit users, and also for Reddit.
Yeah, Katie Roof has been across this IPO, We thank you so much for bringing it to us and ed, I mean there's a question of course future drive growth drivers not just being advertising but AI too.
Yeah, that's the idea sell the very unique user data to the companies building large language models. And BI has this very wide range saying thirty to eight of Reddit users only use Reddit, they don't use other social media platforms.
And really it's that focus on the desire to be engaging there and what it means for some of these large language models as well for a future direction of travel when it comes to a diversification of revenue. Now, we want to welcome to our Bloomberg TV and radio audience worldwide. Reddits listing day, it's arrived.
Let's bring in.
Reddit's chief operating officer, Jen Wong for more on the big day, live from the New York Sock Exchange. Jen, it's a day to remember, and I'm interested as to really for you how much you are excited about redditors having part of the process here or worried a bit about the volatility to come.
Thanks for having me today.
It's been our dream, our dream to have our users and our communities to be able to be shareholders in Reddit.
Everything on Reddit is built.
By our users and communities, so having them be owners makes a lot of sense.
We're so excited about that.
Jane, good morning, it's ed in San Francisco. What's the main benefit of the IPO. You know, we always talk about the money raise, the doll evaluation, but I always reflect an IPO gets your name out there. Not everyone is on Reddit, not everyone is a redditor. How do you weigh up the pros and cons of listing?
Well, it's certainly a lot of press on a day like today. It is a special day, but becoming a public company has just made us a better company. We've actually been in this process longer than most almost two years actually, and that process has made us more disciplined, more operationally rigorous, and actually allowed us to get to know investors better and tell our story. And so this whole process has made us a better company, and we're
prepared to be a public company. I think it's actually been really good for us, and I think companies that you can go public it's sort of a duty. It's part of the process of maturing as a company.
And then the benefit of having.
Our sharehold our employee employees have liquidity which we promise in them, and in addition, have our communities and users be able to be shareholders makes a lot of sense for Reddit.
Jen.
The evolution of the story is for you moving away from a solely advertising based business model to one way you license your user data to the companies that are building large language models. I just asked if you could explain to our audience how that works in practice, how you're going to grow that business.
Yeah, well, just ahead of addressing that, I just wanted to provide context. One of the things that's so special about Reddit is that we play in three big addressable markets.
We have this core advertising business. Adds is a great business.
It's still early we have great traction and momentum. That's our core business. We have an emerging data licensing business that we built the foundations for last year because reddits corpus of information is incredibly important to the training of large language models and also for insights for different kinds of businesses.
And the third is a.
User economy where our communities go beyond conversation into being able.
To transact with each other.
Now you asked about the data licensing business, which we've built the foundations for last year. That has two pieces to it. It is a piece that's sort of well established, where there's social listening for marketing for companies who want to understand what's happening on reddits and for marketing campaigns. There's also financial services companies who are interested in that.
Those are well established markets. And then there's the new emerging market of AI where large language models need data to train on. And when you look at Reddit's corpus nineteen years of human experience organized by topic with well moderation and relevance, that's incredibly important to building both a chat capability and the freshness of information. So that's an
area where you know we see opportunity. I think what that signals, you know, whether it shows up honestly in our revenue or what it shows up in the value of Reddit is how valuable.
Reddit is, you know, the more that we move.
Toward this AI world, that corpus and that knowledge and refreshment of human experience becomes more valuable.
To our TV and radio audience. We are speaking with Reddit Chief operating Officer Gen Wong and to that ongoing value of your data to AI and to the large language models being developed. I mean those llms, the models are being.
Built in new and different ways.
This actual technology also develops. I'm interested as to really whether this goes on in perpetuity. Do you see this sort of licensing being steady and secure for ten years from now?
What I'd say is this is so early in this emergence of this technology, it's hard to see far out. The way I think about it, the way we think about it, is this the read its corpus of data is incredibly valuable, and it gets more valuable because as there's more more content that's generated maybe by AI or computers, original human thoughts and ideas increase in value. Right if you think about it, a new car comes out who's going to review it.
A real life family of six.
Can actually tell you what it's like to drive that car. That's always going to be valuable, and so you know, whether that shows up in data licensing or in the products that Reddit builds, it is valuable.
Let's talk about a community that has been very valuable at times and extraordinary at others.
To wool Street more broadly.
Has been the reditors who are very active on wool Street. We go back to woll Street bets. We just think about what happened to GameStop for example. There is a double edged sword here for you involving your.
Editors as investors.
How secure are you that you won't become a meme frenzy yourself to the up and to the dam.
Look, I love the ethos of that community in all of our investing communities, and who knows, I mean, it's it's Reddit, right, I mean, who knows what's going to happen, So we'll see.
I mean it's hard to say, but in the end, I.
Think having our users and communities be shareholders is a good thing and I think ultimately will be judged on our performance, and that'll take time for people to know but ultimately I think that's what investors Judge Judge.
Us on.
Jen we're awaiting the opening trade Bloomberg reporting. The indication is the stock will open somewhere between forty two or forty six dollars a share. It's quite a premium on the IPO price. You're one of the biggest shareholders as well. Just give me your personal feeling in this moment.
You know, it's kind of like a wedding day.
I guess lots of different emotions, joy, relief, jitters, all of it in one I haven't even processed it, frankly, but it is a special moment. It is one milestone in a history of a nineteen year company that I think has a lot of runway. You know, we're nineteen years old, but we're really young as a company, and this is sort of the start of the next chapter.
Read it.
Chief operating Officer Gem Wong, live from the NYC. We're grateful for your time on listing Day.
Thank you.
Okay, time for VC Spotlight and.
Sequoia has just wrapped up its AI Ascent event right here in San Francisco, which brought together some of the best and biggest minds in artificial intelligence. Let's bring it SCOA Capital partner Constantine Butler to explain who was there? There were big names in the building. Why did you do that?
Well, first, ad Caroline, thank you so much for having me again.
You're right.
Yesterday we had one hundred of the leading minds in AI. We brought them together because we want to discuss the state of.
The AI industry, just portfolio companies or the community, the whole community, right, not just portfolio companies.
We're talking the leading minds in AI. We wanted to talk about the state of the industry today, but also where we're going, what's next, and.
What was the conclusion.
Well, one thing I think will surprise your audience is that everybody knew that we had to be patient in this process. It feels like we started the AI process as a sprint, but everyone knows this is a marathon. So what's ahead of us is the long haul, and every everyone's getting ready for that long haul.
Custinton, I'm sure a topic of conversation must have been inflection, basically going in house to Microsoft and yes, licensing some of its technology. At the same time you're speaking with the likes of the co CEO of Anthropic, which has a deal with Amazon. You're also talking with Mistrale, which is of course got a deal with Microsoft. How is that whole ecosystem ultimately building itself? There seems to be it'll be some very interesting partnerships that end up looking
like MNA. How do you feel as someone who's putting money into these businesses.
Caroline, You're exactly right. There was a lot of talk about that.
And one of the major trends that I think will surprise your audience is that the leaders we're talking about how ais are gonna actually work together. So we're talking about this concept of networks of ais, not just so you're gonna have one AI, but you're gonna have multiple ais that are good at different tasks, and they're gonna work together, cooperate and compete. I'll give you a very tangible example. I use a product called dust. It also
happens to be a wonderful Sequoia portfolio company. It allows me to call both GPT four and mistraw large, and also Claude three from Anthropic in parallel. I can have the models compete against each other, I can have them collaborate, and this yields an even better outcome.
That's the future of AI.
It's gonna be many models working together in a network.
Another portfolio company being hugging face, which are cool. So allays bring together the entire ecosystem in that manner. And there must be an awful lot of debate ultimately about well open versus closed. You've got open AI, and many would argue that open AI ain't that open anymore, and some would say for good reason, how are you seeing the overall AI community divide itself on how open large language models should be.
I'll tell you what we heard yesterday.
We heard a lot of enthusiasm about open source. And frankly, it wasn't just from the builders. So a lot of the builders, of course want open source so that they can run these models in their own clouds, but it was also.
From the application layer.
We had CJ the COO and president of service Now, and he talked about how service now is using AI internally to deflect twenty percent of tickets that's for it stuff like ordering a laptop, that's for HR, stuff like leave and he made it very clear, we need the open source because that's going to help us drive costs down. That's going to help us preserve margin. So customers want this. We've heard it from customers. We've also heard it from the founders and the builders.
Just a headline on the Bloomberg to make our audience where reddit share is now indicated to open at forty four to forty eight dollars to share a premium on the thirty four dollars that they price the IPO at. We were just talking to gen want at redit the idea that they are in an available data set for training large language models.
The difference in the.
Data is the focus of reddits. They only use Reddit, right, was that something you've discussed about the availability of data and Reddit?
I mean, what are people saying about that? Absolutely? First of all, we're so happy for Reddit.
This is an amazing milestone and Junge just seve it and IPO is an important milestone in the journey.
And this is an.
Example of how the fact that they created an online community, a true community where they were actually working together, is going to pay off, not just for advertising that's the obvious business, but for data.
We know they have a.
Big partnership with Google and we're going to see a lot more businesses like this that have accumulated that data advantage being partners for.
Great AI products that need to train on that data.
It's core capital partner Constemula. Great to have you back in the studio, San Francisco. What a day it's been carried. This for now is been big technology. Thanks ed, Thanks Jian.
We oglage that Apple has employed a strategy that relies on exclusionary anti competitive conduct that hurts both consumers and developers. For consumers, that has meant fewer choices, higher prices and fees, lower quality smartphones, apps and accessories, and less innovation from Apple and its competitors.
Attorney General Garland there of the Department of Justice, speaking earlier today, Apple facing global anti trust allegations, of course not known from the US, but also the EU. We understand they're going to do a full probe Google and Apple. You commissioned a EVP, Margravestdaya told us this earlier in the month.
We see an illegal abuse that has been ongoing for a number of years, which has made it, you know, virtually impossible for customers to choose if they want the payment service in app by Apple paying the fee, or they would want to go, for instance, to a website and have a cheaper subscription price.
Bags margam and for more What's apples take.
Yeah, Apple certainly disagrees across the board on this lawsuit, implying that the lawsuit is not legal, saying the iPhone is not a monopoly, and pushing back heavily on the bevy of claims The Department of Justice is going after Apple from everything from green Bubbles to car play to how iCloud storage integrated, blaming Apple for hurting consumers, hurting choice, hurting developers. Certainly, Apple has squashed developers and made it difficult for developers to.
Compete in some instances.
On the other hand, a lot of this comes down to user interface and philosophical decisions Apple made many years ago about its integrated experience. So we'll have to see where Apple is willing to meet the DOJ how they can work together to create some solutions here to keep the iPhone still a secure, integrated platform, but certainly it needs to get a bit more open and a bit more competitive for third party developers and accessory makers.
The man who can explain the Apple philosophy, Mark German. We thank you so much for jumping in on the.
News and boy that does it for
This extremely busy edition of Blue meg Technology