Microsoft's AI-Powered Bing and Arm's Revenue Increase

We've been in the latest global generative AI developments and speak to a kid executive from Microsoft on its big being announcement and honing in on the chip industry arm posting increase in revenue in its latest quarter. We speak with the CEO of the company as it prepares what parents soft Bank hopes will be the largest ever I p O for a chip maker, plus zoom slashing of its workforce while metal ones managers to get back to making things or leave all that and so much more

coming up at first. Soft Bank get posted its earnings, losing nearly six billion dollars in the most recent quarter, failed to start up bets and its Vision Fund segment. But the silver lining the conglomerate has in its arsenal, it's its ownership of ARM. The UK based company's chip

designs and its technology are present throughout consumer electronics. Just think the chips that are powering almost every single smartphone on the planet, or the designs come from ARM And just reported a twenty percent increase in revenue for the latest quarter. It's preparing, we understand, for a highly anticipated I p O this year. That's why we are so pleased to welcome the CEO. Ren A House is joy

to have you with us. Just talk to us about this twenty eight percent increase in revenue because we've seen overall the chip sector be somewhat decimated, the demand supply flip reversing, and yet you manage to be pushing higher when your clients are four. What's happening. We're very happy with the quarter that we've just had. Our revenue was up. We saw an increase of our licensing business and twelve percent and royalties. But more importantly, we've seen a significant

diversification in our business. Caroline are business around the cloud has been up double double digits. Our business and automotive probably triple digits. Uh. This diversification strategy is not new. We started a number of years ago, but we're just now starting to see the fruits of that labor as the power efficiency at which ARM is known for is stinding its way into the data center and all evs.

Can you give us some targets around the focus on data center's automotive pecs rather than just a smartphone sector. You know, these areas are places where the growth has been very significant in the last number of years, and we made a very conscious decision to focus on these new markets, particularly with new products are Neo verse flying for servers, adding functional safety to our automotive products, and as a result, we've seen a huge benefit from that.

Every major cloud provider now has ARM instances in the cloud aws forty eight out of their top fifty customers are able to use ARM and electronic vehicles. We're seeing companies such as st Renaissance, Mobile, I and Video all shifting silicon into automotive Renne, good afternoon to you. Look,

as Caroline said, you bucked the trend. I want to dig into this idea of how you continue to grow when your customers don't is this an issue of lag that what the rest of the chip sector is going through you are not yet experiencing, but will experience later on in the year. We're no different than the rest of the industry. We certainly feel the effects of the slowdown in certain markets, but we are buffered to some extent.

As I said, we've seen significant growth by gaining market share in the cloud, gaining market share in automotive, in smartphones, where it's been well documented there's been a slowdown of that industry, we've actually seen some very good results, and that's been due to kind of two main factors. One is our version nine architecture, which carries a higher royalty rate, which needs more value for us. But also, more importantly,

we're just seeing more technology inside these smartphones. More processors that find their ways into all different areas of the application space, means more CPUs inside the smartphone, which again means more royalties for us. So we've been able to be buffered to some extent in that space and seeing growth really across all our markets. Okay, how confident are you that those outliers of performance that you have just

flags can continue throughout calendar twenty three? You know who to be really competent these days in terms of predicting where the market is going to go at that we're very confident in the long term secular trends that are good for ARM and that is number one, more compute

and number two that is more power efficient compute. Again, when you look at the data center, when you look at automotive, these are areas that really need a high degree of compute, They need a high degree of power efficiency. You know, another number that really surprised folks last quarter was a record number of shipments by the ARMED partners.

Eight billion ships that were shipped by our partners, and that feeds a cycle of more and more people who are developing software on those eight billion ships, which feeds into more demand. So I think the quarter to quarter of proturbations, you're always going to see those relative to what's going on with inventory and such. But we are very confident that the long term secular trends that we're

seeing in the industry are very good for us. Someone else is confident around you on its soft bank, the confident that the I p O will be done by this year. Are you doing a jewel approaches in London? New York. Do you have a time frame for US? I can say that we are fully committed to an I p O in There has been a lot of planning underway already on this. We've been doing a lot of work regarding location, listening venue. I can't talk about that.

Noticisions have been made there yet. What needs to be cleared up? Tease crossed, eyes dotted when it comes to a relationship, for example, with Qualcom ahead of the initial public offering. Of course, there's been dispute there one of your key clients. How is that progressing? You know, I can't comment on the litigation there. Carolina had to lead it up to our legal team. You know. I can say though that we are very competent in the case

and we think the court will ultimately agree with our position. Ready, I want to talk about China a little bit. You know, ARM is all about the underlying technology, the intellectual property chip designs. How impacted are you by US and Allied efforts to cut China off to access to the latest in chip technology? Like any other company, we comply with whatever the US government comes down with visa the export controls, because we actually don't make anything physical that is what

we deliver as intellectual property. I either the license rates to build a product with our designs were now so directly impacted by some of the recent rulings which really impact more people who are actually building the chips, either chip companies or or fab equipment makers or the fabs themselves.

So we have some level of indirect impact, and we comply whenever there's something that we need to comply with these a lat of course, but given where we should in the value chain, not so directly impacted some of the other companies might be. As we discussed, your technology is present through so much that goes into consumer electronics. Your designs are sort of integral to the chips are going smartphones. But the hot topic the area in vogue

is artificial intelligence. Is ARM competitive in that field in terms of the chips that it's designing, and I know that you work closely with some big tech names that are doing more in house chips in this area. Yeah, I'd like to say we're far more than competitive. You know, there's a lot of AI that runs on ARM already. When you think about inference at the edge and any kind of artificial intelligence that's being run there that's all

being running armed. They're being running armed CPUs. Uh. There's been a lot of buzz you know, in the industry and certainly even today regarding generative AI and chat GPT and such. That's gonna mean even more demand for armed technology. You know, when you look at the trade offs between the workloads that run on the CPU and the workloads that run on accelerators, there's room for some of this

acceleration to take place in both areas. I think the area where we're going to really perform well in this space again, it's around power efficiency. These new AI algorithms are incredibly compute intensive, and in a world where we just don't have that much energy to throw with the problem, having energy efficient processors to assist and offload is going to be critically important. Rene haasom CEO. We look forward to that i p O that Jill committed to at

some point this year. The big reveal today Microsoft announcing it's utilizing open AI technology power new versions of it's being Search Engine and Edge Browser. But pleased to dig into this now use of medies with us Microsoft Corporate vice president of Modern Life and Devices Group, and has been a busy day and just how busy has it been in terms of sign ups? There's a wait list to access to start using being in this way. What's

the reaction been like use? Yeah, it's it's early days, but it's already or early hour, as I should say. There's a lot of sign up interests. I'm getting a lot of emails from people who want to get in front of the wait list. But I think we've struck a nerve. I think we actually have um kind of lit up people's imagination about what's possible with a new generation of search by infusing AI and chat and then getting to a place where you don't just get search results,

but you can actually get answers to your questions. And I think it's struck a chord so far. So we're pretty excited about it. Struck a nerve as an interesting, interesting way of saying it, because it feels like you've struck a nerve lit far underneath Google as well, because it's talking up it's barred at the moment. Just discuss why there seems to be the sudden flurry of announcements this race upon us for this generative AI within search. Well, we've been working at it for a little while and

and we've been excited about. The thing that has motivated us is today there's like ten billion queries that happened on any given day, and by our estimation, roughly half go unanswered, and that to us is a huge opportunity to sort of reinvent search. The other big dynamic is that AI in the last really in the last number of months, has seen an inflection. Both the technical capability has gotten so much better, but the user experienced this

idea of being able to chat. The combination of those two things has really come together to make for a big opportunity use of good off need to you busy days. Caroline said, My question is why now you know? How ready is it? How convinced are you that being with AI is ready? I thought the timing was was interesting. Yeah, as I mentioned, we've been working at for a while, we've been at it for for many months. We do feel like we're ready to go to the limit preview

and we're happy to have shipped in that state. And the reason for that is that in the evolution of the technology, there's only so much you can do in the lab, and then eventually you get to a place where you need to get that you know and user feedback. You need to have that to come and improve the product. We feel confident today that we've got a we've got a wow idea in terms of how chat and search and the brows are all come together and uh, and we've put in all of the good work to make

sure it is a stable system. And so we're looking forward now at getting feedback and then improving. You se if open ai has a closed profit model, it's been licensing access to chat, GPT and other tools to developers. Is there any element of exclusivity in this arrangement with open ai that gives you an advantage over others in utilizing the underlying technology, either for search or other applications. Um,

the open could work with money companies. The opportunity we have is that we've worked with them together so so closely. So this latest ai model on any the covers, which we announced today as a brand new one, this one is much more powerful than chat, GPT and it's tuned for search. We've worked together to make that happen. That's

pretty unique. Certainly, other companies can work with the technology, but I think we have a great collaboration there and we're making that across because we that cloud of Azure powers the back in. We've worked with them on the AI supercomputer UH and we work with them on the modernization model as well. So across the board we have a very deep partnership. Talk to us about monetization such in a data you're CEO saying the technology is going

to recipe basically pretty much every software category. What does that mean in terms of revenues, particularly when it comes to boosting search for example. Well, the way to think about this is um search is the largest software category and software that's out there. Advertising as a whole as a six D billion dollar business, and searches the predominant

part of that. We have an opportunity to reshape that, to to bring new value to people, as we talked about in terms of being able to answer questions, but also new value to advertisers who within that experience that can bring more targeted advertising and get better R o I. So the opportunity to improve that is is something that

we think is going to benefit everybody. It's interesting we went to our own audience via Twitter to ask them where they feel the winnings will be made now, not just talking about Google versus by do versus yourself at the moment, but China versus the US, and notably interesting me, they didn't think well thought that US technology companies are going to win the AI race less likely China, but the robots win is actually where they came out with you.

So that speaks to a point of the power of artificial intelligence and at that point, to recorrect itself, to improve upon itself. And to that end, I asked you about the concerns, the safety, the issues, the biases. How do you ensure that we're at the right place there to unleash this. Yeah, that's a great question, Caroline, that's top of mind for us. We um We have focused now for many years on responsible AI. We've put forth principles and a framework, and we've done a lot of

engineering in that regard. We've learned a lot from our past releases. So what we released today has a bunch of guard rails and safety in there for things like hate speech and violence and self harm. We you know, we catch the quarries when people type them in, and we can determine before it gets to the model, before it generates any content. We've trained the model specifically to catch these things and then again before answers come out.

So we've done a lot of work that said. You know, it's been clear there's definitely bad actors out there that like to hack the system, and we're gonna have to stay vigilant and on top of it. Um. We feel that today is an important part because part of how you get better and better is you have to go to market. You actually have to ship. You can't just solve these problems in the lab, and today is an important step to continue to improve on that for a

I being something that can work for everybody. Yes, if we talk about Generative AI day in day out in the show, it's great to have you thank you yourself many of microslot and and you didn't talk about it day in day out, not just from Microsoft's perspective, but some of the other competitors, right. Yeah, So by do the big name coming out overnight out of China confirming a Bloomberg scoop that as soon as March it will roll out in English. Ernie it's chat GPT competitor in

the former Generative AI, a chat bot. And it's interesting because they didn't do a big onstage splash with the press and with analysts gathered, they just made a statement and we're out on Twitter kind of flexing a little bit about the roadmap for Ernie. We've been reporting around the work they've done around this, Carol. But you know, by Do is the Google of China right dominates the search market there, and they plan to integrate that tool

into their own search capabilities. And as we've discussed, the shares absolutely surging both in Hong Kong and in the

US in response. Yeah, and and just the element here that we've talked time and time again about US versus China, and just at one point, you think of the books have been written, the focus from Kaifu Lee and many others that China really managed to get into the home so much faster, the use of you know, the basic form of generative language AI that we're all used to have, basically asking alex or or some sort of piece of equipment in our home. China led the way in that.

And I wonder how much further ahead by Do will end up becoming and how many checks and balances it will have itself. Right, And what's so interesting is Ernie is so similar to chat GBT gives a conversational style response. They're just handling it slightly differently. Sorry, well, of course, continues track. Now coming up, we're going to turn back to soft Bank and take a look at maybe a Vision Fund three plus a new fund from Goldman Sachs has its eyes set on more tech. We'll bring all

of you that that next. This is Bloomberg time for talking tech. Soft Bank may consider launching a third Vision Fund after it exhausts its available capital, and the executive has told Bloomberg the Vision Fund too still has six point five billion dollars for fresh investments. But SoftBank's Marquee funds lost five billion dollars in value in the December quarter, dragged down by those slumping valuations across private startups. It was the segments fourth straight quarter of losses and more.

Of course, in the world of AI, the Apple Dabby based AI company G forty two hiring dozens of people in Singapore, Jakarta, Shanghai, and Tel Aviv to scout for opportunities for a ten billion dollar tech fund. That's, according to sources, the Fungal target technology investments across those countries, as well as markets in Saudi Arabia and in Egypt. Welcome back to Bluemo Technology. M Carraine Hide in New York, and lawmakers are targeting TikTok during a markup of three

bipartisan proposals. According to reporting from Bring the Government tech reporter Maria Curie, she enjoys us now from Capital Hill. Maria, the Senate Judiciary Committee is going to hold this hearing on protecting kids online next week. Sources tell us how much is this a long term goal for Biden. I think he's discussed this in speeches before relative to try

and put pressure on Congress to do something about it. Sure, so this is definitely an issue that can be tackled from multiple angles, not just from Congress, but from relevant federal agencies like a Federal Trade Commission. UM. And so it certainly can be a long term goal on various fronts. But the Senate Judiciary Committee next week, we'll put a focus on it early on in the eighth Congress. The witnesses have yet to be determined, but we can expect

some conversations. They're on key legislation that um did not make it across the finish lying in the last Congress, but did come close. UM. So, yeah, it was interesting when we've had guests on in particular well FCC commissioners, and then they've talked about perhaps that this should be driven, the TikTok focus should be coming from the administration rather than from Congress. When is there any update on Saphius or in general where the administration stands on TikTok and

our access to it. Well, we heard recently that the President said he's not sure if TikTok should be banned in the country. But interestingly, Congress's approach would be giving the President more authority to limit TikTok, so it would still end up being UM an executive branch effort UM. Importantly, Senator Warner is working on a bill that UM would prevent giving other countries a platform for retaliating against US companies, So that's certainly a consideration moving forward as we see

more and more bills crop up. Today's markup of the three UM TikTok bills were different in the sense that they would empower consumers to have more knowledge about their app. They would UM app distributors would be required to tell consumers that it is is UM owned by a company that is based in China, and that their data is being collected, and so this is taking on a different approach. Instead of banning or limiting the app, it would just

be empowering consumers with more information. Career Curi of Bloomberg Government now staying in Washington to u S. Senators express their concern to Meta CEO Mark Zuckerberg over the risk of developers in China and Russia having access to use a data they say metas Facebook unit new in two thousand eighteen that quote, hundreds of thousands of developers in countries characterized as high risk had access to significant amounts

of sensitive user data. The senators said their staff held meetings with company execs to determine who could get the data and what Facebook planned to do about it, particularly with regards to protecting users information. But stick with Meta, the company is asking many of its managers and directors to transition to individual contributor jobs or leave the penny as it tries to become more efficient. Joining us for

more is Bloomberg Sarah Fryer who broke this story. I mean, Sarah, since we reported the kind of mass round of layoffs at Meta, I imagine there are a number of employees who have been waiting for the acts to drop. But in this case, it's very specific roles that Mark Zuckerberg

and co. Appear to be going after. Right if you're a Meta employee, Ever since those cuts in November, this historic time for the company, You've seen a number of other rounds of layoffs at other companies and you're thinking, you know what's coming next? Are we going to have

another round? Amazon had another round? And what it turns out from our sources is there is a thinning of the ranks happening at Meta as we speak, that managers are getting told by their supervisors, Um, you need to get to a point where you're doing individual contributor work, whether that's coding, research, design, um, whatever it is that you can do. That is part of building as opposed to managing. That is what Meta values right now, that's

where we want to push it forward. And if and if you can't do that, if you don't find yourself in a role like that, we'll have to ask you to leave. And here's here's here's a nice package to that point, the nice package. But Sarah, if you're being asked to pull back on managerial role but do more yourself, is that more valuable or less in terms of recompense to you. Well, it's unclear whether people are being asked

as they make those transitions to take lower salaries. I imagine that would be hard to swallow if if you're a Meta employee. But I think the important factor here is that the company is trying to become more efficient. Zuckerberg is called the Year of Efficiency. They're calling this

move the flattening um. They're trying to make sure that there are fewer steps to getting things done and trying to make sure that products are better, profits are better, all things across the board can in theory, be solved by having fewer middle managers m R. I p to all of us who who have that role. Apparently, so I think that that is that is the takeaway. Whether Meta will actually be more efficient as a result of

of this thinning, I'm I don't know. I mean, I think that there there are, you know, roles that have been created for a reason. But what I have heard in talking to employees at the company is there is some some encouraging science here. People who have noticed that there are some managers that only are in charge of one or two employees, that there are some teams that are tasked with doing jobs that are in conflict or

in competition with what other teams are doing. So certainly those things can be sorted out and fixed in this next round. And maybe the fact that they're not doing it all at once UM and more on an individual basis gives them time to be more thoughtful, since I think there was a lot of of tension following the last layoffs that people didn't hear about until the last minute. Every single person wants to be more productive, more effective

at work, have more impact. Do we know if there's bits of the business that this is going to really affect Where the bloating really got from a managerial perspective, Well, I think that the company wants to really focus on UM some of their their core initiatives. We know that they want to improve their artificial intelligence for better ad targeting, for better algorithmic sharing, on on their real products, trying

to make sure that people get the right videos. They're trying to ensure that UM you know, some of the work they're doing on Horizon World can translate to a mobile phone user. So there's some really key initiatives that they're working towards here that are focused on profits. One of them that was mentioned on the earnings call that caught my eye was this transition to making money in messaging, which is something that people have been asking that about

for years. In Zuckerberg SAIDs are now at ten billion annual run rate and revenue there. So I think that we're going in to see the company get a lot more focus, a lot less experimental throwing spaghetti at the world to see what six and more thoughtful about where they spend their time going forward to try to to bring you know, this sense of efficiency and energy in the next few months. So far, the music to some investors is at least Springberg. Sarah Fry, thank you so much.

Great reporting, even though she's of course senior editor of that team. Meanwhile, coming up, we'll talk about the future of mobility from e VS here on Earth two planes to the moon on that next with up Partners co founder Sarah Sagary. It's just published a key report for full insights on all of this, and you're keeping a keen eye on certain shares right now. Yeah, let's continue to look at Microsoft, as I said, to stop moving

in lockstep with the SMP five. A lot of this about fed chair pals comments, but there is some buoyancy around using open aiyes tech with being with the edge browser and what they can do to boost their competitor ativeness against Google and particular in the world of search.

Investors clearly liking what they see. This is Bloomberg. Later tonight, President Biden is expected to discuss his economic progress so far, including how the Inflation Reduction Act will drive manufacturing and supply chain improvements for the adoption of electric fields and by extension, cut US emissions. Speaking of which, UP Partners just published its own Moving World Report, which looks at all of the macro and micro trends across mobility and

transport in the venture firms. Report is based on hundreds of research studies, dozens of interviews and draws some critical conclusions. Firstly that funding for mobility has outpaced most tech sectors.

But secondly, mobility has become the most important segment when it comes to looking at how we combat emissions here in North American beyond joining us to discuss Sorry Cigary, managing partner and co founder of UP Partners, and sorry's before you you joined us here in San Francisco for the show You posted on linked In about the report coming out, and hundreds of people engage with you and said I'd like to see it. But those are the

two key conclusions. More money from vcs into mobility than any other subsector, and also the mobility counts for more emissions. What is it that you've discovered or found? Yea, thanks for having us. The big takeaway is that mobility is growing rapidly thirty x increase and venture investment and mobility, and it represents about of all CEO two emissions as

a ten trillion dollar market. And so we have this convergence of perhaps one of the most important thing for society today, which is how do we reduce carbon missions with how we move things on the ground, air, see in space, people and packages. And we're see an opportunity for real economic development as a result of it. So I guess the conclusion to clear this is where the

money is going. This is what's the biggest contributors to emissions backward looking when you think about the nobility your avenge capitalists, you know you, and I've spent some time with some of your portfolio companies and areas you invest. What did the findings of the report push you to do with your own investment thesis and where you're looking to make change. But we just released it, so now we get to actually go make some decisions based off the data. And we made it open source, so other

skin as well. A couple of key takeaways. One is in the aviation industry, we are facing a major pilot shortage. Will be at sixty five thousand pilots short by you. That is a huge impact our economy if we don't fix so we're looking to invest in technologies and businesses that can solve that. Two is, as we go towards electrification of everything, a massive material shortage. We're looking at

a ten x increase in lithium ion batteries. We already saw close to increase in the lithium ion price index. That entire ecosystem for technology used to help create lithium ion batteries cleaner, faster, cheaper, more accessible is a huge area of continued investment for us. What are the charts that jumped out from me at the report was the kind of demand curve for batteries going through an area

Bloomberg U Energy finances looked at as well. When you discuss with your portfolio companies in this aero you go out is with making an investment in mind, how do you fix the problem? You know, which areas do you invest in that there are offering solutions to fight this shortage of supply. Yeah, so we've made a couple of direct investments in this space just recently, company called a on X which is using AI to help understand what materials can help solve another AI compare there you go.

So it's AI and energy put together. So it's very relevant based off what's going on. We also have investment a company called unit x which is using UM computer Vision AI in factories to help look at batteries for their faults. You know, battery fires are a big big deal. Can be up to forty five minutes put out a battery fire for an e V. So ensuring you've got high quality of product going out the door using technology do that big areasm of investment. What about the focus federally?

What about a desire for lowering emissions and seeing obviously a labor shortage alleviated coming from an administration? Is that head wind or tail wind for you at the moment? Well, the Inflation Reduction Act has created some pretty significant tail ones for this whole industry. We're looking at close to a hundred and fifty billion dollars allocated out of the Inflation Reduction Act into hydrogen, into clean energy, into transportation, which is going to create all sorts of new activity

in and around mobility. Specifically here in the United States. One big piece of news is the the upcoming Green Deal. In Europe, they're looking at close to a trillion dollars to be allocated towards going net zero. By this is a huge secular change in all things moving people in goods, on the ground, air scene, and space. And so it's having literally an Act of Congress, be it here or in Europe or elsewhere, is going to be required to see these ajor major changes and how we move about

this planet. I mean, you're a man who is so passionate about how you move out this planet, in particular flying. You've from a very young age understand how to navigate the skies. Talk to us about there are other people who navigate the skies, who run these businesses, I think the Delta CEO, and many have come on very passionately wanting to bring down their own emissions curve and and

ways in which to do that. Are you seeing the sort of focus on real innovation here coming from the big companies are having doesn't have to come from the smaller companies that you've got. I think it's really a partnership between entrepreneurs and the largest companies in the world to really affect major change and how we move people

and goods around the world. A company like zip zip Line, which is using drones to do package delivery in partnership with Walmart and bent Vial Arkansas today, where they did over five thousand delivery flights last year, we've seen two x increase in the number of drone delivery flights from last year, which doubled the previous year, which doubled the

year before. So I think to your specific question, you got to get the entrepreneurs partner with the largest companies in the world to really collectively transform the way we move things. So you're very able pilots across a number of classes of aircraft. As you know, my head is often up in space, and I was really interested to see a focus of your report and the opportunity outside

of this atmosphere. Why go there? Why look at that? Well, it's really the last frontier for us is space, and I think it's so important to recognize the consequences of what Ellen is doing with Starship. The way people should think about Starship is like the railway to space. It's effectively making almost free to get a pound of payload to orbit. And when you make it practically free to get a pound of palot to orbit, you can't begin to understand what the consequences will be a new business.

As an opportunity, he is like a base on the Moon or Mars or whatever it might be. So this is a huge area of investment and interest I think collectively. All right, sorry Cigary managing partner, co founder out Partners, Good to catch up. You know what's so interesting? Care for me as well as the opportunity as an investor. You know, we see so many of these reports, but Sara saying they're actually sustainability offers an attractive return down

the road. Sticking with sustainability from investment to reality, Amazon has started selling lettuce leaves through an investment made two years ago in the startup Hippo Harvest. The leaves are produced using less water, less fertilizer than conventionally produced crops. According to Hippo. Nike Ellis from the Amazon Climate Pledge Fund joined me here in San Francisco. That's the story. How did this investment become a real product for Amazon.

It was a collaborative effort between Amazon and Hippo Harvests over the last fifteen months. When we first diligence and sourced the deal. We sold two really compelling features about the opportunity. One was to drive down the price and the second was to increase the quality of the investment rate.

And so we've worked for fifteen months now hand in hand to bring this product in the market in our fresh doors, iterating on the timing, the packaging, the quality of the produce, the price point, and we're finally able to get it over the line and proud to announce it here today. Let's talk about the economics of it day. And I'm understanding you to have a pretty small footprint down their Santa Clara or Santa Cruz. H Is this a money maker? Is this a viable business long term

for Amazon to make these investments and convert them to product. Absolutely, From the Amazon Climate Pludge Fund point of view, we have a dual mandate of both reducing carbon emissions for Amazon and also looking to do it profitably. So for US, hip hop Harvest really represents the best of both of those cases, and I think they're already demonstrating that down there in Puscadero, and the hope is that that scales throughout the network and around the world here in the

years ahead. Can give us a sense some timing of scaling. When I get it in New York, when can you get it abroad? It's gonna take time, Caroline. We're at a crawl, walk, run experimentation phase. The first step is just to get it into the market and validate customers are interested in purchasing it. Our expectation is we will scale out throughout the Amazon and Whole Foods ecosystem, and then we're going to look to support Hippo Harvest as

they try and expand both domestically and internationally. But we would expect that's going to take a couple of years before we finally hit that stride. We've been looking at some of the pictures of how this will works. I can see your robots that are there, and I know you're a man who talks about startups about climate, but you also talk about workforce. How is this sort of focus, this efficiency going to be impacting blue collar workers an

inability to need that sort of labor. Well, we're just beginning to learn how these robots are going to change the dynamics on the farm. I think one thing we've seen early on is that Hippo Harvest is still employing local employees and bringing their farm expertise to bear to help produce this produce. And then we're also seeing new jobs emerge, obviously servicing and supporting the robots, but also doing quality assurance and control and supply chain management to

modernize these farms. And so my suspicion is the net of it's going to be we see job growth in both areas as we look to secure our food supply chain or Nick, I know you're you're an Amazon Climate Pledge Fund principle, that's your job. My question, can hipp Ho move as fast as it's done without Amazon behind it? Does it take an Amazon to bring this kind of rapid success? Certainly having Amazon behind you as a key catalyst.

I think one of the things we've looked for in our investment floor proven entrepreneurs that can reliably deliver innovations to market, certainly with hippop Harvest. We have serial entrepreneurs here and they've done it again, so our expectitioners will see more of the same and it doesn't necessarily require Amazon. Very very quickly, Have you eaten the lettuce? Is it good?

I have? It's fantastic. Highly recommend everybody give it a trial. Okay, it's quite the array from remain to all types of letters. We thank you so much for coming on and talking all about the Amazon Climate Pledge Fund principle. Nick Ellis, Meanwhile, that does it for this edition of blomg Technology. We're gonna talk about key earnings coming thinking vast on Wednesday's uber On CEO Dara Kososha he joins Bloomberg and then

thirty a m Eastern eight thirty am Pacific. Of course, don't want to miss that sort of conversation from New York from San Francisco, this is Bloombergh