From Mahart. We're Innovation of Money and Power Collie in Silicon Valley, NBN.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
I'm Caroline Heinder, Bluemog's World TAD quarters in New York. Ed Ludlow, who's on assignment in some valley.
This is Bloomberg Technology. Coming up.
We'll bring you the latest on microsoft sixty nine billion dollar deal for Activision as.
As companies they get a new shot at winning over the UK on the acquisition.
Plus, we'll speak to one analyst who says metas threads look at add what eight billion dollars in revenue per year in the next couple of years. We'll discuss and the big four accounting firm KPMG and partners with Microsoft for a multi billion dollar partnership to incorporate you guessed it during to of AI into its business. We sit
down with the KPMG CEO, Paul club Over. In the UK, the Antitrust Watchdog has said that a new merger investigation into Microsoft's sixty nine million Activision deal when it may be needed if the duo restructure their deal to try and reverse that previous UK veto for more. Let's bring in bloombergs Ley and Nylan, who's just been all across the competition analysis of this deal, And I mean, is this a good thing to go back to square one.
In this case? It actually is. So the UK had vetoed Microsoft and Activision before effectively blocking the deal, but after yesterday when a US court said the deal can move forward, the UK sort of agreed to give it a second look, which is pretty unheard of. But in order to do that, they said Microsoft and Activision need to restructure it a little, so they're not looking at
exactly the same thing. So Microsoft and Activision are going to make an offer to the UK and sort of restart negotiations over whether they might approve their deal.
But in many ways people have sort of said that the FTC and I'VE regulators have got a bit of a win on their hands already because they have force changes to the way in which well competitors might be able to access the games eventually owned by Microsoft, called a duty being the key one. What are the ways could they alleviate any anxiety around a lack of competition?
Yeah, so this is one of the things that the judge here in the US made a big point of is that the regulators had already won a little bit by getting Microsoft to offer these ten year deals to a lot of its rivals. So those deals they have with like Nintendo and Valve, the PC gaming company, and they've also offered them to some of the people who do streaming streaming games as well. But the thing about the UKCMA is they really hate what they call behavioral remedies.
So like when a company is just offering to do something like a ten year contract, they want something what they call structural, So they want Microsoft or Activision to actually offer to sell something off. So Microsoft and Activision are now sort of in the position of trying to decide what it is that they might be willing to sort of, you know, cleave off from their main deal in order to sort of play kate UK regulators overall.
Does this feel once again that kind of big text almost winning here in terms of getting these deals through.
That's a good question. I mean, the FTC is expected to appeal as soon as this afternoon, so it's not technically over here in the US, but yeah, I mean, the antitrust laws are definitely not really able to take on the tech stuff. You know, we already had the FTC losing earlier this year in the Meta within case. Although the difference with the UK is, you know, they have a little bit of a better law, it's a little bit harder to appeal, So you had them blocking
Meta Giffee. So Meta is now actually going to have to spin off Giffee, even though the CMA was the only place in the world that had to pose that deal.
Interesting this backward look at some of these big Dealslea and Ilan, thank you so much for bringing it to us. And interestingly we go to dig into Meta in particular. We just finished that conversation earlier on Meta. Let's dig into that company in particular, because we have been all over Threads.
Of course, more than one hundred million people signing up. I'm sure plenty more than that now and.
It is sort of for many becoming a Twitter alternative and add on and over the next couple of years, one analyst sees that Threads can reach close to two hundred million daily active users and generate well about eight billion dollars in an annual revenue. Joining us now is that analyst Mart Mahoney ever caught II Sceenior Managing Director. You've now form rating on Meta three hund and fifty dollars price target.
Interestingly, it's no longer your number.
One top pick because of the rampant, rapid rise in the share price that we have seen on the back of this year.
Really, but mark the threads.
Eight billion sounds like a lot, but it's not compared to the annual revenue in total.
Yes, well all there.
I agree with Carolina, like where you are set it up? Could they get the eight billion in revenue? One of the biggest, the easiest part of their math, if you will, is the revenue that they could get per user. On Twitter, as a documented history, they were generating about twenty dollars in ad revenue per user Meta. Facebook also has a documented history here they've been able to generate monetization levels
two to three x that of Twitter. And I don't think it's because they spam ads all over the user.
Interface a little. Maybe they do a little of that.
It's because they are much better at targeting and matching advertisers with users. They are able to find relevant audiences for advertisers and marketers can put relevant ads against and they're able to track.
The performance of those.
That's why you've got almost ten million advertisers that are on There's a lot of these are small businesses obviously.
That are on Meta.
So yeah, they'll be able to better monetize if they get the users. The question is whether they will or not be at one hundred million ramp is outstanding.
When do you think we might see that switched on?
We know Mark Zuckerberg himself and we've heard from Amasara as well saying, look, we're not going to think about putting the advertising out there until we have a line of sight on a billion users. Do you think that's really what they're going to.
Be I take him at their word on that.
Since these numbers that we're talking about, even that eight billion, I know that sounds like a big number.
That's only kind of a mid single digit percent.
Impact FREMDA, So it's not like they need the ad revenue near term. In fact, I think the absolute genius strategy here would be show no ads, you know, like, bring more and more users onto Threads and what the Threads experience has got to improve dramatically. I assume it will. I assume they'll be easier for us to use it. For the great things that we've used Twitter for in the past. When Uber cfo the news came out that
he may be resigning. If you go to Twitter, if you'd gone to Twitter, you would have found plenty of relevant news articles about it.
If you've gone the threads, you wouldn't have.
Seen anything like there's that real time news element that's really great magical about Twitter. So there's some of that that needs to be built at threads. When I just find interesting to set up here for meta is I think Twitter as an asset has been fundamentally underinvested in for a couple of years, not just since Musk took over the company, but for a couple of years, both
on the advertiser side and on the user side. That created the opportunity for Threads that can just bring in so many new users from its existing database.
It's existing user base, it one and a half billion users.
Well, the race is now on.
Therefore, and it feels as though Twitter has been making changes in terms of brand safety to a large extent, and at the same time they've got this sort of window before meta does turn on the advertising switch. To an extent, how much do you think you know Twitter is so embedded as our lifestyle and our use case. Can Threads really keep the site gest going.
Well?
I guess we should if we.
I think the sober assessment is we should assume that Twitter will be the leading real time news public town square communications platform for the next five to ten years. They probably will maintain that leading position. But it's so interesting that there's this opening created, so it is possible that Threads they can come up with a better product. It's not better than the Twitter now, but could.
They make one that's better. They certainly have the potential to do that.
They've got the engineering talent to do that, and they can certainly bring in a lot more users.
And there's a.
Couple of really simple things that they've done. I mean, you think about the challenges that Twitter has had. It's onboarding challenge for a lot of people is real, like what do I get out of Twitter? It just seems like a delusion of information? How do I find something useful?
I think Threads has made it easy for people to come in to find followers and to find people to follow, either friends, people that they know, and then and they've done it in a way that maybe seems more I don't know, user friendly, that's less caustic as an environment. That's something that still needs to be addressed on Twitter. It's been a long standing battle on Twitter how to get some of that uncivil commentary off the site.
So there's a real opportunity here for threads. That's what I'm more intrigued by.
It's all potential, But these one hundred million users in less than a week, we've never seen that before.
Mark here we have a conversation about competition being added for many, it's a worry about competition being taken away. I'm thinking of Meta is I think in a closed room tomorrow and the EU having to try and vindicate marketplace in particular, and how they haven't reduced unfairly competition there. How much is regulation aheadwind to all of the big tech names right now?
It's going to be a constant presence, constant headwind going forwards. If I simplify all this, Caroline, I think about three types of regulation. There's kind of monopoly power regulation, privacy, and then.
Third is kind of social health kind of sort of regulation.
When it comes to Meta, there's no monopoly regulatory risk. I mean, if there was a real if there really was a monopolistic power at Facebook, you never would have had TikTok. We obviously had TikTok, so that if there's a new social media there's nothing to stop people from creating a new social media outlet and.
For driving traffic there if they have a really good service.
TikTok prove that the other issues are more serious, the privacy issues. But I think Facebook has kind of come around, it's relatively reasonably address that.
And the social health impact of Facebook that's waxed. And when I think we had a point where we over.
Dramatized, dramatize the impact of social media on social health, there are plenty of other parts of media that have positive and negative impacts on social health. So I just sort of think we've moved away from that. Maybe we've also matured a little bit how we think about those risks, So they're going to be long standing. It comes with the territory because you've just invited everybody to make a comment, and.
Not all those comments are going to be good.
Mam Ma Hainey have a core II analyst.
We didn't even get onto your uber perspective. Your top pick interesting on the Domino's News today. We thank you so much, of course, Mart mahoney for evercre is. I meanwhile, coming up, I've got to discuss that big deal KPMG and Microsoft entering a multi year, multi billion dollar AI and cloud services agreement.
We discuss the.
Announcement next KPMGCO booknot And meanwhile, let's just look at what's happening with Shopify out more than a percent. But let's go to the nitty gritty. They fascinate story that this company is basically putting a price tag on time. Rolling out calculator embedded in your calendar if you're an employee there then estimates the cost of.
Any meeting of three or more people.
Basically, the company's new internal tool is trying to push you to be more productive take away what they project to be three hundred and twenty two thousand hours of meetings this year by basically putting a price tag on it.
It's expensive, folks. This Bloomberg.
Both for accounting firm KPMG has just announced a multimillion dollar commitment in Microsoft cloud and AI services over the next five years, and it's expected though to bring in more than twelve billion dollars in ALID revenue. Joining us now to discuss the partnership as Paul Knups KBMG CEO and so talk to us this commitment, but to bring more in I'm assuming this is all a productivity boost.
Well, you know, you think about the velocity of change right now, Caroline, and the speed of innovation and generative AI. Many of us weren't even talking about it nine months ago, and now it's all anybody wants to talk about. It's amazing that veloci of change and speed of innovation. So to co develop solutions with Microsoft for all of our businesses, AUTIT,
taxs and advisory that we can bring to market. Some of the solutions already under development and some are in nascent stages, but we're really excited about the power of that partnership or we can bring to market in the
future working together with Microsoft. So we'll spend two billion, Our invest two billion over the next five years on AI and cloud, and we expect to generate about twelve billion dollars of additional revenue over the next several years through cybersecurity solutions, through cloud migration, and also through new innovative applications that use GENERAI.
So with your own workforce, having the early access to Microso three sixty five copilot the Azuo Open AI service. Ultimately, will you have a competitive edge? Will others follow your lead? Will they also do deals with Microsoft?
So there's no doubt they will. This is not an exclusive arrangement, and we are going to be investing in generative AI across the board, so we're looking for additional opportunities.
But we think our long standing relationship with Microsoft, which dates back to two thousand and our history of working with them as a partner, even going to market with them with twenty five hundred clients as joint clients, that we have an edge in the sense that we have that long, strong history of development and we're going to idate with them the power of their technology with the power of our knowledge experience in advisory, tax auditing is
a really great combination for ensuring that we can solve our clients' most complex problems that actually also help our communities in society be better.
How are you selling this to your workforce because a lot of anxiety is out there that AI is going to take our jobs.
Right.
Well, if I look at the forty years I've been at KPMG and I think about the history of technology, I haven't seen a technology disruption. I think this is the greatest technology disruption in many decades. I haven't seen one yet that's caused a loss of workforce on a growth space. It's on a net basis. So I actually believe that workforces over time will grow with generative AI. We're going to need more people to interpret results, to
co develop solutions, to develop solutions. We need more data scientists. We're going to need a lot of quality and cyber assessments of the information that the generative AI applications produce.
So as I think about that history of technology disruption and what it's done to workforce, it's actually generated economic activity that should allow for us to grow our workforces in the future and actually also put some of those mundane routine tasks that people don't enjoy doing and upscale people to do more interesting, creative things.
And you've been out to the executives that you work for the clients, and they seem to agree. They're also saying, look, this is actually going to add to employees, this is going to add to our productivity. That's right.
So you know, we just completed surveyed recently where eighty percent of executives said that this would be a major disruption seventy five percent. It's be their top emerging technology for the next eighteen months. And there's general agreement too
that was going to add headcount over time. So we feel pretty confident that it will also reduce stress because some of these mundane task again will no longer have to be done by people, and they can then provide more value added advice, do more creative things in the work environment.
He as to having more exciting work. I'm excited. I'm interested.
Though you've readferenced cyber and the way in which you're going to be using general to AI. There a lot of the worries, and there's been this quick adoption by companies to use open AI team with Microsoft, but they don't want their own workforce using it because they're worried about their own data and it's somehow ending up in the data tropes that are going to be in my own chat GIPT.
How have you dealt with that? The privacy angle.
So when we use a chat GPT version, we use it in our own secure environment, not the open source application that's out there, which provides a lot of protection. And we also really value the enterprise protection security that Microsoft brings to us. So we want to use AI responsibly, ethically and in a very secure environment. As we develop these solutions, we're going to ensure that companies have that same kind of security, governance and architecture built around their solutions.
That's going to be very important for the future because there are those concerns along with concerns around data accuracy too.
Well, we continue to see how that is monitored and improved on and iterated and as you say, a big disruption that we're in. Thank you so much coming on and talking about the deal. Surely is the KPMGCO.
Time.
Now I'm talking tech first. Up China based hackers. They've reached a series of email accounts link to government agencies in the US and Europe. Now the hackers accessed and exported unclassified Microsoft data number of accounts plaus Chip designer ARM is in talks within Vidia to join a group of potential investors to anchor its initial public offering. According to the Financial Times, now in Video, which is a long time partner of ARM, is seeming to invest in a valuation of thirty five to.
Forty billion dollars as being reported.
Meanwhile, in a Musk will hold an event broadcast on Twitter spaces focused on artificial intelligence, and he's invited two prominent US House warmakers, Democrat and Republican state leaders.
We'll speak with.
Musk for about forty five minutes tonight some pm Eastern time, mean while.
Let's talk about AI a little bit.
More, because today's big take how AI can make politics more dangerous, with AI holding the potential to supercharged dissemination of misinformation in political campaigns, among other things, we really want to dig into that, the highs, the lows of aiding bags emily bound for more great peace and at this moment, how we already seeing AI sort of becoming involved in campaigns already.
We absolutely are. We're seeing it from the local level, the state level, and we're definitely seeing it at the federal and international level. So there have been instances of pretty convincing deep bakes, so that is pictures and videos that aren't real but look very real circulating in campaigns, you know, up and down the board.
We're also, though, of course, going to sort of supercharge not only potential disinformation, but go supercharge the workers who are trying.
To activate campaigns as well.
How are we already see sort of productivity being top at the moment.
Yeah.
So for the big take piece I've published today, Laura Davison and I talked with congressional staffers, campaigns staffers, lobbyists, and politicians, So the people who make up to Washington and ask them, how are you using AI? And we found it's already being used in a really widespread way. So lobbyists are using it to create the first drafts of campaigns. Congressional staffers are using it just to get
the first draft on a page of speeches. The generative AI still isn't sophisticated enough to write bills, but we're not that far off.
Okay, So look, there are some positives to all of this, but Washington in and of itself is also iying AI and the regulation of AI pretty seriously. Can they tackle its own influence within their own sphere of political campaigns.
Yeah.
Senate Majority Leader Chuck Schumer just today said that this is going to be one of the most difficult challenges that Congress has ever faced, is trying to regulate this very complicated and nascent technology. They're right now just sort of in the talking phase. They're having briefings to get lawmakers up to speed with what AI is, how it's being used by our federal agencies, and how it's being
deployed by the tech sector. So we're still very early on, but they really don't want to repeat the mistakes that they need with social media, where they were kind of asleep at the wheels. Social media grew and grew and now it's a pretty much an unregulated space.
Amni Bambaum, great, big take, go read it online for I feel like enough to have a terminal.
Thank you very much.
Indeed, welcome back to Blue Meg Technology. I'm Caroline hid in New York. We won't we want to talk a little bit more about Microsoft and Activision Blizzard. We can start with perhaps the way in which gamers are being affected. We're worried about competition. Who are playing the games. Hispanic Black Americans are actually playing video games more than other ethnic groups might have been considered, according to an annual study.
There's changes that stereotype that largely as white Americans that are the industry's most enthusiastic consumers. Joining us on this and indeed the deal more broadly for Activision and the competition out there being to Cecilia Dinestasio, We're so pleased to have you in the brit studio and first of all, debunks and myths for us who are playing these games.
Who is worried? Who is anxious about how they get access to Cool of Duty?
Yeah, that's a great question. So it is true.
The stereotype is true that most gamers are white and men. Seventy two percent of gamers are white men. However, white Americans are not the most likely people to be playing games in the US. A new study from the Entertainment Software Association showed that Americans who are Latino, who are black, who are Asian American are significantly more likely than white Americans to be playing video games like Call of Duty.
We've known that more women are playing in various whether it's on mobile or on console. Is that being reflected in the games? Is that more diversity within the characters that are being played?
About half of gamers are women, that's true, and increasingly gaming companies are realizing that it's productive to their bottom line to make games that really appeal to a wider audience than traditional and so we're seeing more protagonists in triple A games.
These blockbuster games who.
Are women who are non white, and that's something that's been really celebrated across the gaming industry and also brought a lot of new gamers into the fold.
Let's talk about whose console you might be playing and what's been so interesting as we go through the twists and in terms of the Microsoft Activision deal, is it seems as though, I say, Sony's stranglehold on consoles has in launch pop been why Microsoft's allowed to make this.
Deal, right, Yeah, it's really interesting.
Microsoft has argued for a long time that it's had a third place in the console wars, the so called console wars between Sony its PlayStation, Nintendo its Switch, and then Microsoft with its Xbox console. And Microsoft has been working very hard to diversify outside of just its console business, including through its PC gaming offering the Xbox App on PC and also cloud gaming, which allows people to play Microsoft's games across mobile devices, tablets.
Smart TVs.
And at the same time, what the FTC determined yesterday is that actually, when it comes to call of duty, Microsoft isn't really incentivized to block off the game from competitors like Sony because Microsoft actually, in a large way relies on Sony consumers PlayStation gamers to play Call of Duty with people.
On Xbox, so for now, clearly in their interest. Great to have you.
Thank you for breaking it all down, Cecilia Dinastasio, with all that great reporting. Meanwhile, let's stick on the deal, whether or not Microsoft is eventually going to be able to get its hands on Activision for sure. Britain's antitrust watchdog said that a new merger investigation into that sixty nine million dollar deal may be needed to reverse its previous veto joining US now for more about this, as Public Knowledge policy director and competition Charlotte Slayman, thank you
so much, Charlotte for joining us. And of course you have a history of working with the FDC, you understand some of the concerns around competition. When you saw that the particularly the judge in the US in San Francisco had given the clear for now in the US at least, what did you think.
It's a disappointing result for consumers. You know, once the FTC brought this case, we were really hoping that it was gonna be a win on the preliminary injunction. I do think the FTC might continue to fight the case. But this is certainly a loss.
Okay, interesting and I where's many have felt that actually, even though the FDC lost in this way, they have managed to force the hand of Microsoft to make some changes, and indeed so have UK regulators. Do you think why don't you, for example, think that that's been enough.
Yes, and there's also a settlement in the European Union where they're going to be giving some licenses for other cloud gaming services to be able to use Call of Duty. So that's great, that's progress, But we would still be concerned about the competitive impacts of the merger. You know, it's not just about Call of Duty. It's also about
the next big game. And I'm concerned about independent gamers, independent games studios having the same opportunities to reach customers and for those gamers to have access to those games. So there are to be broader anti competitive impacts that we're concerned about, and I think Call of Duty isn't the only thing that needs to be fixed.
And of course, as you mentioned, deal hasn't yet done. FTC could appeal. We also know that the UK they might have to stop from basically scratch once again, coming with different ways in which they can alleviate the previous veto to the deal. What could they do do you think, Charlotte, to alleviate some of those concerns that you have.
Well, I think it would be very difficult to address this merger with behavioral remedies. With a settlement. I think that's still on the table. But you know, those settlements are often time limited. The settlement in the European Union is for ten years. Now, a lot can happen in ten years. There could be innovation and new competitors coming up.
But I think about past mergers where we've seen a ten year settlement agreement and that ten years actually ends up going by really fast, and then consumers are left with a more consolidated market. So I think enforcers need to be really careful in making sure that they're only agreeing to a settlement that is really going to solve the problem.
And sort of here in lies if you look at history, what the FDC is trying to do. They're almost trying to unwind the shift of this particular regulatory authority and the way in which it views deals and the way in which it views the adverse effects of polygopolies or monopolies or size and scale, because it isn't just all
about consumer and prices. It's about more than that. It feels like for the current guys of the FTC, are they going about this is Lena Khan, to put it blunly, going about this the right way to take on these big deals. Try and take big hits and then be losing them.
Well, of course it would be better to win, but when you take on those big hard cases, you're going to have some losses. And I think you know, we all know that that is part of it may end up being a long process. I've been really frustrated that Congress hasn't gotten more involved, because that is what we really need. These cases are showing that the law isn't where it needs to be, and so we really need
Congress to be able to act. There was so much attention and excitement about antitrust in Congress last year, and it didn't come to fruition. They didn't pass any new anti trust legislation except to give more funding to the agencies. We really need stronger anti trust laws in the US to be able to have competitive markets.
Some would say, but that's on Congress. Potentially in the UK. What model do you want to see what changes from a legal perspective.
Yes, So, in particular with this case, it seemed like the court got tripped up on the idea of a vertical merger. So it's not a traditional horizontal merger where maybe a game studio is buying a game studio. This was a provider of consoles, subscription service and cloud gaming buying a game studio. So the court saw it as a vertical merger and talked a lot about how vertical mergers may have pro competitive benefits and are rarely stopped, But that is not the same as having a presumption
in the law in favor of vertical mergers. Vertical mergers can be illegal under antitrust law, but it's clear from this judge and others that that needs to be more clear. The FTC is working right now on new merger guidelines, and I think that will be an opportunity for them to educate judges and make this more clear that vertical mergers can be really harmful. But that's also an area that Congress could help with.
Could that not just be politicized though, because many would see this as a relatively Democrat heavy FTC.
Well certainly there are no Republican commissioners at the FTC right now, but I think again that's on the Republicans in Congress who need to move forward with that has been a lot of bipartisan interest, especially last Congress there were multiple bipartisan bills that passed through the Judiciary Committee with bipartisan votes. So I think Republicans are also interested in antitrust enforcement. They're recognizing that that's actually how we get a free market functioning correctly.
Charlotte, it's great to get your tak Thank you so much, of course your previous expertise while working there to see and now with Public Knowledge and Policy director there Charlotte Slim, thank you. Coming up, thank you, Let's discuss how American Express let's try to take on the world with the helplesome FinTechs. We're on that next with Amex's Raymond Shova.
This is Blomberg. So it's been four years since an American Express claimed its cards are now accepted at just as many places as rivals Visa MasterCard right here in the US. But it's now looking to do something very similar overseas and to that, and it's been partnering with some of the world's biggest fintech companies, the latest being world Pay, which will help it sign and manage new
merchants to accept American Express. More broadly, in the United Kingdom, I can Express, Group President of Global Merchant and Network Services.
That's Raymond Jobar joins us now for more.
Raymond, you are the man who basically goes around getting merchants to take AMEX and look, this must be a big deal to get world pay. Has this been the theme to ensure that the likes of Stripe and the likes of Square are enabling my ability to use ames in the UK not only in.
The UK Caroline, but around the globe.
Partnerships with third party processors and FinTechs like Square, Stripe and Addie and world Pay, they really have been helping to fuel our growth. They represent eighty percent of the merchants that we have on our network and represent twenty percent of the overall volume. But it's growing really, really rapidly and gives card members far more confidence to pull out their card at the point of sale and feel comfortable that it'll be accepted.
FinTechs have really therefore managed sort of accelerate this, but there's also been on the ground getting salespeople in front of certain types of merchants to bring them round to using AMEX.
How has that role gone?
What kind of companies, what kind of sellers are coming to your platform?
Well, what we started on this journey a number of years ago in response to our car members. Our origins are primarily around travel and entertainment, and what we recognize as our car members wanted to use their cars far more places we provide rich incentives for them to use it, and in response to that, we needed to move into everyday spend categories, a lot of smaller shops in retail.
And as we started down that journey, we deployed what we call a hybrid acquiring model that means our proprietary teams signed and manage the largest merchants, let's say the twenty five percent of the merchants that represent eighty percent about eighty percent of our volume, and then we deployed partners, both traditional third party processors as well as FinTechs to go out and sign and manage that long tail. And
it's been a terrific growth story. Since twenty eighteen, we've more than tripled the number of locations that are accepting American Express, and that gives card members far more confidence to pull.
Out their card.
And we have the desire to eliminate the question do you accept American Express.
And not just well on the way to not just in luxury places which often sometimes you think of a more well lucrative, higher earner, higher spender using AMEX, but you're going to discount stores, You're going to cobblers in the UK key cutters to get them to accept Amex. And to that en, how much has data been driving us? How much has technology almost been the driver of where you go, where you put your your resources to work well.
Data is one of the things that makes American Express unique. We both issue the cards, many of the cards that our card members carry, as well as we have direct relationships with merchants, and that creates a tremendous amount of data. And one of the universal truths that all businesses care about is they want to find new car, new customers. And we can use that information than the data that we have to allow merchants to market into our premium,
high spending card members. And to your point, whether it's Tescos or Timson's here in the UK or many smaller merchants everyday spend categories. We want to make sure that we have coverage everywhere where our card members want to spend. But also we can help them grow by allowing us to be a very very efficient marketing channel so that they can market into our premium card member base and
find new customers. And it's something we call annex offers, and it's powered by the unique and rich data that we have by being both the issuer of the cards and having those direct relationships with merchants.
Why do this now, Raymond, when we're thinking about an economy that's a little bit tougher, when we're thinking about people spending in a more and different manner, How why make this drive?
Why make this commitment to be more overseas in your manner?
Well, two things. First, in response to our card members, our card members wanted to be able to use their card in far more places. So we started down this journey in the US, as you mentioned, to reach parity. That meant in the US ninety ninety percent of the merchants that accept credit cards now accept americanspress and internationally.
We wanted to make sure we were in the places where our card members live, work and travel too, so we focus the teams on some very important international cities and we've made material progress. As I mentioned, we've more than tripled the number of locations that accept American Express since twenty eighteen, and we continue to have upside above that. And now's a great time to do it. And American Express has been around for one hundred and seventy three years.
We've been through all types of cycles. We were operating in a cyclical environment and good economies of bad economies. We know we need more coverage and give our car members greater confidence to pull out their card at the point of sale.
Raymond Jobell, great to have some time with you. Thank you. You get back to work in the UK.
American Express Group, President of Global Merchant and Network Services.
We appreciate the time