From Mahard of Where Innovation, Money and Power.
Collie in Silicon Vallet NBN. This is Bloomberg Technology with Caroline Hyde and Ed Love Love.
I'm Caroline Hyde at Bloomberg's world headquarters in New York.
And I'm Ed Lovedlow in San Francisco. This is Bloomberg Technology coming up.
Tesla asked its investors to approve Musk's fifty six billion dollar pay package. Again, we discussed the vote on moving to Texas and its criticism of the Delaware court that voided Musk's twenty eighteen award.
Chip making equipment orders dive at ASML as Europe's most valuable company faces a pullback from its Taiwanese and South Korean customers.
Are chip stockpiles back.
And meanwhile we bring you a key conversation with the CEO of debt laden Autos as the French IT company seeks to save itself. That and so much more coming up throughout this hour. But let's get your cook check on these markets. And I want to shine a light and what's happening ultimately an the equity market, which pulls
back a little bit from where it had been. We're seeing a little bit of caution, of course, as we digest a more hawkish federal reserve, as we think about where JA power is really steering us in terms of number of cuts ubs, thinking it'll be two for this year starting in maybe September.
Nevertheless, we're seeing.
Actually bob markets continuing to outperform, and not as much
as they were earlier. Red currently seeing a twenty year yield just down by about two three basis points to remember big auction coming ahead of that all important Beige Book as well, and moment we're moving on and have a look at what's happening in the world of crypto, because Bitcoin has actually been well on the downside, even as the US dollar is for once falling now after six this is the first time in six days we've actually seen the US dollar give up some of its
strength as we maybe just digest what has been, of course an apparent slightly more hawkish shift, where we're looking at a bitcoin currently off by two and a half percent riskasset's still cautious out there are but what are you watching?
On the micro Tesla continues to dominate headlines and market moves. We're down for a four straight session, that's the worst run of declines since the beginning of this year, and the stock is trading at its lowest level in almost a year. And I don't think this is to do with the two red headlines on the Bloomberg tumil. I think the proxy revealing that investors will vote on that original twenty eighteen pay package rejected by a court, and
the idea of incorporating in Texas. I don't think that's the downward pressure. There's indigestion from the events of the last four days, executive departures, layoffs, and Elon's comment about going all in on ROBOTAXI, and I think a lot of people are trying to understand what's happening, what is the big picture and when does it happen. But the stock's under a lot of pressure, while the talk from Elon Musk on his own platform X is fighting talk.
And I think we've got some pretty good guests to go through that with.
Yeah, let's talk about the fighting talk, let's talk about the reaction throughout. Let's start the Bloomberg's Crow Todell, And what's so interesting is ultimately coming out fighting to Delaware, to the court, to the judge that said initially, this twenty eighteen pay package is far too much and new
board are not doing enough to push back. But I'm interested ased why the argument goes that it would cost billions more to renegotiate a pay package rather than just try and vote through the current one.
Yeah, I do think it's interesting that the board sort of you know, portrayed this as a nuisance, really this idea that they would have to take on additional expense that you know, the company accounted for having to set up these options and set aside this this compensation for musk and essentially would have to sort of, you know,
do it over again. It does also strike me just from the language that was used in the filing that it was sort of musky in and that Robin Denholm, the chair of the company, you know, referred to this idea of essentially that the court had taken away shareholder or voice. It was kind of a freedom of speech
esque defense of this pay package. But of course, you know, share you know, corporate governance critics are not going to look on this very family, this idea of you know, this this award being slapped down and the board just going back to the world with the same plan.
Craig, you've been reading the proxy for the last four hours and thirty minutes.
I know you have been at your desk doing that.
There's some granular detail in it that Tesla explains a randy compensation program and the idea of reincorporating in Texas in parallel, and my read on it is that they basically don't want to be accused of using the Texas incorporation as leverage in this ongoing pay issue.
Yeah, they want to kind of pair these two basically get the shareholders backing again. You know, I guess make the case really that shareholders, if they didn't already know what went into this award, the Delaware court just you know, brought to light a lot of these details, made clear what was going on here and really sort of put it back in the court of the shareholders and say
are you okay with this or aren't you? And of course you know, we have you know, heard rumblings reported on this idea that retail shareholders were really sort of an uproar, you know, based on just at least the volume of complaints about the way this was handled. Also Tesla saying in the proxy that four of its ten biggest institutional investors wrote to the company or you know, somehow communicated that they were in support of this award.
So there is some reason to think that perhaps this stands a chance of being approved, just as it was back.
In twenty eighteen, it was a load of dents texts to go through testas down a percentage point. That way of sessions in moos created ow great work, Thank you very much. Just keep a conversation going with Pierre Faragu, who's head of Tech Infrastructure research at New Street Research. Just give me one sentence, what is the story of Tesla right now? Just one sentence.
I'm not very good at doing one sentence, you know that.
So the one sentence would be Testa is a car manufacturer first and for the seable future, they need to continue to be successful at manufacturing cars, and that's a platform for them to do additional amazing things.
You have a donomous driving.
They are the most advanced player in the world on supervised autonomous driving, so your car driving by itself under your supervision. They're making exceptional progress. There is a very long term, like over the horizon goal host of being able to do Robert. It's a much more still challenging thing to get to very uncertain so and there's also the opportunity to develop human and humanoid robots on the same technology platform as FIG And these things will take us whichever way you look at it.
And we know Elon Musk is very impatient, wants to accelerate that momentum, but it's going to take us.
And in the meantime, we also need Tesla to see that Tesla is still going to be a very successful g manufacturers being able over time to stabilize pricing, to continue to gain share with the product they have in the market today, and then in the next two three years to be able to ramp a large volume, lower price platform to continue to grow sustainably, and all that should deliver revenue growth and margin expansion.
And that's really like the near term and the longer term is yes. But and robotaxes.
It was a loaded question, but you did give me one sentence just without full stops of punctuation.
That's okay.
The reason I ask it is I'm trying to understand in the moment the downward pressure on the stock, and I don't think it's got much to do with the proxy So of all the headlines of the last four days, which was of most interest to ups.
Of the last few days, the most important headlines have heard, well, you know, the most important thing of the last few days was actually to digest swear the headlines of last week.
And so we've heard, like, we've read a rota's report mode to.
Being canceled and things like that, and we've had like you know, ins and indications from Milan Musk and from this last chief designer that the modity is probably not cancered.
And so the most important breakthrough earlier this week was the understanding that probably what's happening to that Tesla is that Tesla is going to prioritize designing developing the robot taxi in Austin for now, because anyway, the model too will need to wait for Mexico to ramp in millions of units, and Mexico is still two three years away, and so in the meantime, producing only a quarter of a million Model twos in Austin doesn't really help.
It's it's like a very very little help.
And so my educated guess is that Elan understood that and thought, okay, let's go all in on robot taxi. Let's get a platform out, let's have a small flet on which we can try out tests, improve the technology, and then let's get back to the model too a bit later. So hopefully next week when the company reports, we get a bit more lightly on that. So that's really the big thing of the last forty eight.
I like the fact that you give us your reasoning, you interpretation, pr give us your reasoning on whether the stock should be down by a third so far this year.
Yes, so if you look at the potential of the company in the long run, that's a nonsense.
Tesla makes electric cards.
Electric cars remain I think the future of cards and nobody on us can make electric cars as good as Tesla and as cost efficiently. And if anything, this gap is widening. I just took delivery of my new medal three, the high Lander. Like the podcast Testa is making it doing grades and very cost efficient.
Cards is still mind blowing.
So I think it's still a very powerful company in the stock is vastly undervalued if you look at it in the long run. In terms of short term developments, I have a lot of sympathy for where the stock is going has been going in the last three months because Tesla has been hitting a wall in terms of growth, has been forced to regius pricing lots, you know, like finding themselves in a situation where they were raising increasing
productions faster than demon could could increase. So they have to reset the bar and it's not going to happen over a few weeks. We still have a lot of inventories ri seeing are still low. Demand is still not enough to comfortably absorb the production today, so we will need some time, you know, to get the start back on track, and of course the stock correcting to that is the way the market works, and yes, I have
sympathy for that. TESTA is at a low point, is between two gross trajectories, continues to work on you know, long terim moonshots like Theroid and a robotaxi, and in the meantime, like the next couple of years are going to be years of recovery.
So ahead of that, seeing the stock quickening makes sense to me, even.
If I would disagree with that blatantly with evaluation implied, if she will get it over like a three to five year horizon, yeah.
Giving us short term and the long term, we thank you, Head of Tech infrastructures, research of a new street research.
Some of the longest sentences in the house, but we love it.
Meanwhile, coming up tech earnings, they're upon us will dive deeper into what to expect and the current state of tech market's more broadly aired.
What are you looking at ahead of that conversation?
Philadelphia Semiconductor Index or SOCKS twenty seven names in the red, three in the green.
Biggest drop on ASML.
The story chip contract manufacturers are not ordering chip making equipment.
What does that tell us? We'll explain next. This is Bloomberg.
Technology ASML chip equipment maker, having its worst day since June twenty twenty two. Now put it into context, this is a company that's up about twenty five percent so far this year. Nevertheless, we see a pullback because it's earnings really disappoint on the quarter that we've just seen in terms of revenue. But also pointing to this quarter we're already in saying it's going to be low where
the market had anticipated. Why, Well, we're seeing TSMC Samsung pull back on perhaps some of the orders that we thought for some of their overall chip equipment.
Now, this still shows a chip sector that's.
In recovery when you're thinking of our own purchases of electronic goods, and they're like, but what of the AI revolution ed? This is what's so interesting is the fact
that actually their number one market, it's China. Basically half of their revenue is coming from China at the moment, even though we see those sanctions, those curbs on such very high EUV chip equipment going to China, they can't get their hands on that, but actually they're still relatively strong orders for the lower elements of where that chip equipment has been going.
But notably, look their own revenues that China historically is big market. The story of the anxiety is about not China, TSMC, Taiwan, Samsung in South Korea, all this CAPEX commitment, but they're not fronting up in the short term. The drop was called on quarter sixty one percent for EUV lithography. Basically, they ain't buying machines that make chips. Why let's dig deeper into these markets tech earning seasons also around the corner epek Oscar Diskay, a senior market analyst over at
Swiss quote. You know, there's the headlines governments in Europe and the United States right in big checks, saying come and build chip factories.
It's going to be great.
And Samsung and TSMC gave us better capex outlooks for this year, and then we've got ASML and things aren't going so rosy.
What was your read on that?
Well, Actually, ASML Earning is really disappointed this morning in Europe and kind of raised a couple of ibros regarding the sustainability of the demand growth from chip makers and the sustainability.
Of the AI.
Really now, it's important to note that ASML said that the second half of this year is going to see a rebound and they actually kept their full year outlook unchanged, but obviously because now we are used to have fantastic results from chip makers while the ASML's disappointment. Disappointment has been a sour taste in investors well mouth this morning.
And I'm actually we actually think that at some point reasonably the growth and growth expectations for chip makers will be leveling out, and it's just to see if this is the quarter that we will see these expectations slow down, and there is a possibility that we do see them slow down, and that's going to be able to trigger
actually a sizeable downside correction and profit taking. But more broadly regarding AI, well, ASMA also said that they expect AI to continue to contribute to their revenues, and we do also expect AI really to continue, maybe not in the same way because we expect some changes within the AI segments. So what I mean by that is we saw so far the first phase, what we call the first phase of the AI really benefit to companies, to chip makers, data centers, cloud businesses, all these companies that
do provide AI tools other companies. But we are now thinking that there will be second phase in this AI really which is expected to benefit two companies that actually invest in massively in AI technologies and tools and which should shortly start well seeing the return on their AI investments.
So I think that even though we see.
Some disappointment in terms of chip maker earnings Squart, while the AI really is not ready to end, you.
Pack brun that out to the rest of earning season for us, because well, there's a lot of optimism that AI is already going to be helping with costs for example.
Well, actually, the AI has been the major talking point and the expectations are quite high.
Mind you.
I mean looking at the magnificent seven socks expectations around learning's growth of around forty percent for the first quarter. That's huge number. That's still down from fifty five percent printed a quarter earlier. But if we single out stocks like Tesla and Apple who have been in trouble in the first quarter, will the expectation of earnings growth goes.
All the way up to eighty percent.
So now we're talking about a handful of AI sucks, namely Nvidia, Microsoft, but also Google, and we're sold by Facebook and Amazon. So I think that there is a huge optimism out there. But what we will be really interested in is who within this AI segment is going to be profiting from the AI developments, whether it's going to be the provider of AI tools or are we going to shift towards well the user of the AI tools.
IMPAC great to have your voice in the show. Thank you.
Ipek Oscar Deshka, Senior market analyst, Swiss quote giving us the context. JP Morgan, Chase c Jamie Dinan. He makes no secret of his firm than it is all in on artificial intelligence. Now the head of the world's biggest bank, when he's laying out his vision for the future money in this AI world.
He spoke with Bloomberg Original's.
Host Emily Chang about that and so much more in the premiere episode of The Circuits second season, particul Listen.
The best needs be prepared for any business.
I think when you think about really think about things that can go terribly wrong, can you survive them? You know, it could be technology, it could be government regulations, it could be it could be the literally the weather. If you're a restaurant, you know that might close you down. If you have if you lose this week's business, you're out of business. Get enough cash. So you should think all that through.
Bill Gates once said banking is necessary, banks are not to what extent could AI or fintech replace traditional banks.
So I think, first of all, I remember him saying banks of dinosaurs. I spoke to about it in nineteen ninety seven, and obviously he was dead roll. We probably agree to that, but he's not wrong. The technology changes everything. And if anyone is complacent or arrogant or think that because you have a big position to day, you get a big position tomorrow, that's a mistake. But the end of this fine what is banking. Someone's going to have
to hold the money. Someone's got to move the money, someone's got to raise the money, someone's got.
To do research, you know, around money.
Those services will still be around, and you know, hopefully we're doing it and using a lot have to do a better job at it. But I've always thought it's very possible that some tech thing, you know, distant intermediates a piece of that. And I've been writing about you know, big tech going to our business. We've got fintech. We also have big tech, and they will embed payment systems in there. Some we're going to white label banks kind of what Apple did.
Uh.
You know, they have the right to do that. I'm not against that.
I would be against unfair use of their position to dominus in a business.
Well, Apple is going deeper into financial services.
Do you worry about the bank of Apple.
Well, we'll get to compete, so they have a tough competitor. But you know they hold money, move money. Yeah, they're a form of a competitor. You know, we also partner with them, but I'm very used to partnering and competing with lots of people.
Existential threat.
I don't think it's an existential threat. But I think if we were complacent about it.
Yes, that was JP Morgan, Chase CEO, Jamie Diamond, and right here on set, this is being back in the regional so it's Emily Chang. Jamie Diamond is kind of one of the most upset about people like high flying executive in the person yep, the circuit series too.
That's kind of what's cool.
About it is you get people in a chair but being themselves. How did you do it this time around?
Oh boy?
And this was my first time meeting him. You know, it was all about London, right in London, and he was just there for a tech conference really quick. It was all about just making the most of every single minute, the handshake, the walk to the interview room, the chit chat that you know before we actually got quote unquote on camera for you know, the formal sit down interview, and you know, we talked about how many days he's on the road a year, one hundred and twenty days.
We talked about childhood, family. I asked, you know, how do you do it? He was like, what do you mean, how do you juggle it all?
And I think he kind of appreciated that question because it's you know, you normally ask that to a woman, and you don't ask that to someone like date Jamie Dimond, and he was like, look, I don't I don't socialize, I don't go on red carpets. It's it's work and family and that's what it is, and family actually comes first. And so that's kind of where we started, and we tried to open up from there.
You then, of course peel away not only about his family and keutles for continuing to ask that of both men and women, but ultimately about how AI is changing his business. You're going to be thinking about AI for the rest of the season as well.
I'm pretty sure AI is a.
Huge part of the season, as it is a huge part of your show. I mean, it's a huge part of our world. We can't avoid it. One of the interesting questions I had for him is, you know, Chat JPM, will something like that exist in the future where we could ask, you know, I've got thirty years, what should I do with my money? And he said, essentially yes, it's already doing that. We've got AI embedded and everything. It's gonna learn more and more about you. Will I
be able to say to Chat JPM. I want to get rich quick, and he was like, I hope it tells you that you're crazy, because that's just.
Not possible.
Really quickly. What can we expect this season?
Oh?
Well, I hope you love it. We're traveling. We're taking you to Latin America, going on Netflix sets. That's sort of the next leg of their global expansion. After South Korea, we go to see Mary Bara and Troy. We spend a lot of time with her and really get to know her behind the scenes. Palmer Lucky, the founder of Oculus, and of course Anderild now making drones and satellites, AI and warfare.
I hope you love it, sure.
Well, Bloomberg Original's host Emily Change.
You can catch the full first episode tonight on Bloomberg six pm Eastern.
Welcome back to Bloombog Technology. I'm Caroline Hyde in New.
York and I'm as our Vote in San Francisco.
A very quick check in on the markets and when it comes to publicly traded technology names. I'm taking a look at Tesla sevent tens four percent. It's paired its decline, but we're still down for a fourth straight session. We talked about the reasons why earlier in the show with Pierre Ferugu it's a sock that's below five hundred billion dollars now in market cap, and you know, I'm looking for stories. I'm looking for clear downward direction in the market.
Tesla was one name that contributes to that. Bitcoins so really interesting. Actually during the course of this show, Carrow, you highlighted it earlier. But we're now down nearer to sixty thousand US dollars per token on bitcoin, a drop of four percent in the session of an asset that
trades twenty four to seven on the Bloomberg terminal. There's a lot of writing about the real world use case ATMs in Latin America becoming more mainstay, but also the industry bracing for the harving loads of people saying they're ready. But if you look at some of the technology related stocks linked to crypto, those are also seeing some downward pressure.
And we other pieces of news from that industry too.
We do, and let's dive in because Gray Scale Investment CEO Michael the Sonosheine. He says that the market for US spot bitcoin ETFs, still relatively new, hasn't seen.
Wide scale institutional adoption at least.
In an exclusive conversation with blouobg TV, the CEO also spoke about the SEC's approval of bitcoin ETFs and the long road to regulatory approval.
Is what we have to say.
Even though they've been in market now for three and a half months, we still do not have listed option unspot bitcoin et apps. This is a really important feature that investors want and they deserve. This can help investors to manage their positions, manage risk. Ultimately, I do believe that the SEC should be approving these so that they're once again not in a position to be treating spot bitcoin et apps disparately from you know, bitcoin futures based UTPs.
Let's stick with regulation. Moving on to stable coins now. I'm to push in the House and the Senate to pass such legislation as soon as next month. Senators Loomis and Gillibrand are proposing a measure that would ban algorithmic stable coins and say that bill would protect consumers in US dollar while enabling innovation in payments. Scout to DC with Bloombers Kaylee Lyons. I saw a headline on the terminal this morning that says the legislation has momentum from one of those senators, does it.
Yeah.
This is an effort by Gillibrand and Lummis, who have had cryptoinitiatives in the past. They've introduced in the past much wider legislation to kind of set regulatory standards for the industry as a whole. This is a much narrow effort, and perhaps the narrowness of it is what could actually get this across the finish line in the way that other efforts have not. Essentially, what we're talking about here is a framework for stable coins, as you mentioned, that
would ban algorithmic stable coins. Perhaps the example of an algorithmic stable coin that looms largest in our head is terry USD, which of course was supposed to be pegged one for once and the dollar, but instead of being backed by reserved to use smart contracts to try to keep that peg, which worked until it did not and then collapsed in fabulous fashion with forty billion dollars being wiped out. So they want to avoid that in the future.
What this regulation instead would do is not allow those and require one to one reserve requirements for stable coin issuers, so making sure there actually is a dollar for every one dollar stable coin that is out there, would set some other guidelines as well as to the authorities that federal and state regulators would have. And interestingly, it also would establish the FDIC as being able to recover lost assets these stable coins collapse. Obviously, again, that's probably a
product of what we have seen in the past. Will this initiative actually move forward is kind of a question that will be left to the Democratic Senator from Ohio and chair of the Banking Committee, Shared Brown. He is largely a cryptoskeptic, but in an interview this week he did suggest that he could see the stable coin measure attached to other measures that have gone through his committee, including safe banking for marijuana companies in the clawbacks of
compensation for executives of collapse banks. So we'll see if this initiative does move forward in the Senate. And I would note as well that in the House, the Chair of the Financial Services Committee, Patrick McHenry, along with the ranking member Maxine Waters, are working on a stable coin effort of their own.
Yeah, I mean already meeting with Senate to Majority Leader Chuck Schumer about this and Kayleie more broadly, how necessary is is for the industry to have some sort of robust set of rules of god rails. We've already been speaking with the European Commissioner, for example, about how they've been trying to enforce regulation, and at least it's clarity of some sort.
Clarity is what this industry is often asking for, Caroline, and certainly this probably does not go as far as the industry would like, but it would address us a
certain part of it. We've already heard from some industry lobbying groups, like the Blockchain Associations that they are supportive of the stable coin effort, and when I've talked to people here in Washington, a lot of them have expressed much more optimism that stable coin legislation is the most likely thing to get through this Congress, versus more wide sweeping legislation that would actually perhaps delineate what, for example, the SEC would have control over versus the CFTC. That
has proven a lot more difficult to do. On Capitol Hill, we have seen an effort get through the Financial Services and Agricultural committees in the House that would delineate that regulatory land, if you will, territory for those two different agencies, but that has not moved forward further. And that really is what would be required much more sweepingly to provide
clarity for the industry. And in the meantime, of course, is you all probably know well based on your crypto conversations here on Bloomberg Technology, the industry really sees that at this point it's regulation buy horsemen, and it may stay that way. Intel Congress actually moves forward more substantially.
Katie Lyon's just so thorough with the analysis and getting us up to speed. We thank you so much over there in Washington. Meanwhile, well, let's just talk about the SEC a little bit more. It's blocked third party messaging apps and texts from employees work mobile phones. Now it's bringing its own practices closer to the standards it's enforcing for the industry, and that includes what'sapp and I Message. Now, the SEC says it will quote lower risk that their systems.
Could be compromised and enhance record keeping. Interesting one head.
Yeah, let's get to another story out of Europe.
The CEO of Atos, which has been struggling with tumbling shares and a wall of debt, is confident that the French IT company will be say CEO Paul Seller, spoke in an exclusive interview with Bloomberg's Caroline Connen in Paris.
Have listened to this.
We are actually working with our creditors, both our banks and our bondholders for a solution to our high level of debt, and the maturities are coming due in the next eighteen months and the dialogue is very very positive. We're operating under the consoliation, as you have mentioned, is like a mediator is helping through those discussions, and I do believe that everybody is aligned. In fact, we recently had secured some liquidity from those same bondholders and banks, again an indication.
That everybody is really aligned to find a solution.
So what else could be part of the proposal apart from this group of bondholders. Are we going to see, for example, some asset disposal announced before the end of next week. Is that a possibility or do you totally exclude this.
I think what we have presented is a comprehensive plan that included all the assets of ATOS. Now we're going to have to see what proposals are going to come through. Some of them will just keep the whole the whole of the company together. One of those proposal is likely to come from one point, one of our largest shareholders, and others will come in from our bondholders who seem
to also be interested in keeping the whole company. But we can't just really ago any potential proposal that may come in and may entail a different mix of ideas such as asset disposal or not.
Will this whole pen be able to save Atos?
Actually ATOS is a great company. As I mentioned to you, it's just really is going to be you know, I do believe that will come up with a plan and the company will succeed long term, So we'll be saved.
It will be saved.
Carolyn Conan speaking with the h CEO called Sally.
Now coming up, we're going to be joined my Meno Ventures partner Matt Murphy on the firm's new playbook for AI applications.
Or on that.
Next, this is Blue Big Technology.
Now it's today's VC Spotlight, and we're going to be taking a look at some of the winning strategies the formulas being used by early AI native enterprise companies, because that's the focus of Meno ventures latest AI paybook.
Here to discuss. This is Meno Ventures partner Matt Murphy, and you've put out.
Basically, there's seven Golden rules for generative AI apps. So this isn't the foundational models, but this is the applications which can be built upon these models that can be then used cross industry or across sales or marketing. What have you learned about the similarities some of these breakout successes we've already seen.
Sure, yeah, so I think basically this is the fastest innovation cycle we've seen across many like mobile, cloud, et cetera. And so what really has to happen to create the foundation for application innovators to move as quickly as they want to as you need the infrastructure side to be
built out. So you've got kind of the brain, the heart and soul and something like anthropic and then a lot of surrounding tooling to get data into the model, such as an unstructured or a clean lab or pine cone which kind of help you curate and get data
into the model. So that kind of is well underway, and we feel like we're at a kind of tipping point where the infrastructure stack is pretty well solidified and now we're really going to see a ten year innovation cycle around applications that's going to move faster and faster, and now that that tooling infrastructure is in place.
So what we really took a look.
At in this report is what are some of the early breakout applications, what have they done differently? And so we came up with the seven Golden rules. So for example, things like having an almost infinite content loop. If you think about a lot of applications, before you basically had to have a designer, design creative for each potential campaign.
You would then test that, take it back, iterate.
The way generative AI works is it can make end different campaigns and actually kind of close the loop and have this constant feedback system. So one of the companies that does that really well is a company called Typeface, which is the former CTO of Adobe and based recreating the Adobe Creative.
Cloud with generative AI. So that's one very concrete example that's.
Obviously one of your portfolio companies start to jump in there. But what's so interesting is what sets that particular business apart from others that you're pitched. I mean you also say, look, you want to see within these AI apps target work that is high value, high volume, or facing labor shortages. So basically, where is AI going to have the biggest impact. What are some of the winning formulas there?
Yeah, sure, so what you want to do? Basically, there's two ways that an a generator model can work.
It can work as a kind of an assistant, call that a copilot, where it makes a worker smarter, better, more efficient at their job. And then sometimes it'll actually be able to replace that job and allow a work to do something else, like a higher value, higher skilled activity. Things like customer service are a great example of that, and you kind of look for these pattern based, high
volume workflows. On the other end of the spectrum, there are these high value, lower maybe amount of people workflows like let's say a paralegal who spends all this time digging through documents and matching terms and things like that, when they could really do the analytic work if a system built that for them. So that's kind of what's being reimagined here with general AI is how do you kind of take the bulk work and allow workers to do more higher value add activities.
On top of that, Matt, I'd like to discuss how backward or forward looking your report is and how crowded the field of activity is in this space, I would say that. Caroline and I talk about companies and platforms targeting developers and apps quite regularly, an example being Salesforce.
And the app Exchange.
Right, they have brought in generative AI layer to their existing products.
Just how busy is it right now in what you see happening?
Yeah, I mean it's extremely busy, right.
I mean so if you look even anecdotally at our portfolio over fifty companies early half of last year, maybe twenty percent of companies were doing something with the generative AI. Now it's pushing up against one hundred percent, and I think that's a good proxy for what's going on in the market. If you're an existing software company, it's not doing something with generative AI, you're falling behind.
So that's one wave. But frankly, the.
Wave that we're most excited about is people kind of rebuilding from the get go now with new capabilities of generative AI, like a couple that I mentioned, Because the most creative and innovative way to disrupt applications is to kind of start with a founding team that has the DNA around AI and thinks about how to build the application from the bottoms up.
That way, whenever you bolt something on later.
It's beneficial, it's additive, it's going to be great for Salesforce and other companies. But when a new company comes in and says, hey, you could just this application shouldn't even exist without generative AI.
I can give you an example if you'd like.
For example, take a company like Elios, which is doing kind of a generative AI for a therapist conversation, so you can listen to the conversation, use your own model to kind of parse that and give doctor notes as well as a potential diagnosis, and use generat AI to package that up and curate the content that comes.
Out of that.
These are kind of capabilities that a model was never able to process before, nor synthesize it down as something as precise and important as a diagnosis.
Matt, one of your bullets is build where incumbents aren't, can't, or won't. But you know, in the history of Silicon Valley often something gets built because a founder realizes there's a problem because they were at another tech company where they were frustrated by something. Do you have any sense that the end markets actually know what their use cases are yet how they're supposed to be using generative AI in whatever it is the business does well.
I think that's kind of my point is, like, I think everyone knows that generative AI is a great writer. It can take all the content you have, synthesize it down and help people get through it really quickly. If you've got a graph or a set of output, you can distill all that down and it makes it so much more effective for the user to consume the output.
Of your application. But that's kind of table stakes.
The things that again we're most interested in is how are you using that technology to the make the application completely different than what the incumbent has done and in the past.
And that's really the opportunity lies here.
Seeing a bunch of examples of that in the legal vertical that's a fast mower out of the gate and areas like that. I already mentioned customer service. So it's just different when you say let's change the entire workflow versus bolt on the capability after.
The fact Menlovench has partner Matt Murphy. Thank you very much, Caroline.
Yeah, let's have a quick check on talking to he first up to Shiba is seeking to cut five thousand jobs, or roughly ten percent of its head count in Japan.
That's what the NIK is currently reporting now. The move could.
Initiate one hu Jupan's biggest rounds of staff reductions this year in a country that has some of the world's strictest worker protection laws. Plus, Apple is wearing a possibility of making some of its gadgets in Indonesia now, the iPhone maker has been exploring production bases beyond its longtime stronghold of China. Of course, that to minimize geopolitical risks as tensions they rise between the world's two biggest superpowers.
And business software start up Rippling.
Well, it's a reporter that's in talks to raise new funding and evaluation between thirteen and fourteen billion dollars and the company we understand is planning to raise about five hundred million in a deal. According to sources, the talks with investors are ongoing, with plans to finalize terms within a few weeks. It might be said that Rippling so
far has denied some of those reports. So the Bloomberg NEF Summit, it's in full swing here in New York, convenient leaders and energy, industry, transport, technology, finance, and government to discuss just how to shape a cleaner and more competitive future. I'm pleased to say we're speaking to a person who's doing just that. Cuna, your CEO, Spante Fresh
Office panel from the summit and Claude. What's so interesting is you are providing the technology, the filters, the ability for companies such as say manufacturing makers to carbon capture.
How well.
We kind of focus on a problem that we stated the one hundred and thirty five years ago by fellow called Venti Ernius, and we took the name Vante similar to Tesla Fuish on the EV. So we're unicorn and focusing on carbon management by providing solution to avoid SEE two going out in the atmosphere in the first place, industrial factory, cement pulp on paper plants, or even removing the SU two from the atmosphere that's sorry above the ground.
So we are working in that case with the company called clim Works and we provide the filters inside the contactor that they have to collect the C two from the atmosphere.
You built a lot of partnerships, You're working with a lot of companies and emitter is how long a timeframe is it to build such you know, to manufacture to actually get this going when you know that one of your clients wants indeed.
Action this so for a legacy is that we're sixteen years in research, in developing the technology, the product, product, proving out in the market, and raising all these partnership to get there. We've raised five hundred million dollars to get to the point where we are, and we're currently building a factory to make the filters that we'll be able to equip the equivalent of ten project of a million ton. The world needs to get to ten thousand plant of a million ton in the next thirty years.
Wow.
So this is factory number one for us, and we're almost there in terms of building up the capacity to deliver projects. So now when you look at the specific project with one a meter, normally it takes about almost two years of discussions studies to evaluate how we're going to integrate the capture project into let's say a cement factory or a pulp and paper plant, and then it
takes two years to construct. So these projects are to take a certain amount of time to deploy, and imagine, you know, we need to deploy at the rate of two capture plant every week for the next thirty.
Years clause your twenty twenty two Series E three hundred and eighty million dollars led by Chevron's venture arm I remember twenty twenty one, twenty twenty two, there was a lot of energy, pardon the expression behind your industry and financial backing. Had things slowed down in terms of corporate interest and public commitment to what you're trying to do, well, you have?
Your question is two fold one. The corporate commitment has been there and it's growing as well. I think the support we got from the audio gas industry and primarily led by Chevron, is instrumental in us being here today be able to talk about about management. But you know what's missing now to grow the business at the scale that needs to be done is we need the private equity infrastructure funds to come to play, and so far they never come to the value of debt of early
start startup companies and help them to deploy. So this is something that we're working on these days to bring the two together because it's the sum of the financial sector plus the corporate that will make this thing work. Now, from a consumer point of view or the public acceptance, I think that it's a slow process. And the analogy I can give you is we've been throwing see you two in the atmosphere freely for the last one hundred years with no consequences. In the minds of people, the
analogy is the waste management. At the same time you know you're rubbish at home. The waste management somebody collects and transport and recycle and store your rubbish. That's because it smells and you can see it. You cannot see and smell Coe two. So it's very difficult for people to associate that the common management industry needs to exist. And the price of collecting your rubbish is about one hundred and fifty dollars per per ton of SE two equivalent.
So Claude, we will share more time. Claude Latuna, your CEO. A savante that does it for this edition of BLOEMG Technology