Pinterest Disappoints, AMD Drops & Worldcoin CEO on Digital Identities

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Collie in Silicon Vallet Nbon This is Bloomberg Technology with Caroline Hide and Ed Ludlove.

Amed Ludlow in San Francisco. Caroline Hides off today this is Bloomberg Technology coming up full earnings coverage as we rat results from pinterest and push your head to Qualcom that's out after the bell and speaking of chipmakers, will rap results from AMD and look at soft Banks r IPO, which is eyeing evaluation of more than sixty billion dollars plus. We take a deep dive into the world of crypto. We speak to the CEO of the Eyebel Scanning Cryptocurrency

Actually when we recently upgraded that so much for the quarter, but we're looking forward to a fundamental inflection point. That fundamental inflection point requires the overall ad market to rebound and to recover, and I think the truth from earning season so far is that it really hasn't done that. Meta had phenomenally good results, particularly in terms of its September quarter outlook, but I think that's mostly very company specific factors.

Meta has a bunch of product cycles that are all.

Hitting At the same time, they also have the easiest comps because they.

Were most dramatic.

They were the most of their company most dramatically impacted by the Apple privacy changes a year ago. So they's kind of a seuey generous case, whereas the other names are seeing modest improvement. That's Google, that's Pinterest, especially these second tier platforms like Pinterest and Snap, and Snap is seeing almost no recovery. They're still declining on a negative base to begin with, or the base that was declining last year, So we.

Still need it.

It's kind of still TBD, but we still like the call because we think that eventually we're going to get this recovery in the ad market, and then we're seeing a lot of initiatives at pinterest that are starting to show go off, show up in terms of accelerating user growth,

So that's why we're long and we like Pinterest as a buy.

Sales in the court have gone rows six percent to seven hundred and eight million dollars for the period ending June thirtieth, above street expectations. But I guess to your point, if you compare with Meta, Meta delivered double digit percentage growth. One part of Meta's story mark was AI driven recommendations and that seem to boost the AD side of the equation as well. What tools does pinterest have from a technology perspective to drive growth both at the user level and at the top line.

Well, they are.

They also are applying AI to figure out better.

Which content to put in front of their users, to.

Help advertisers better target ads and then soon to create creative But you step back Meta and Google, you know, the biggest at largest AD platforms are going to have structural advantages when it comes to AI, and then particularly I think Meta has been very aggressive and rightly so and smartly so in terms of putting a lot of money on a lot of resources behind using machine learning and AI over the last couple of years and our generative AI to build up, you know, to help out

They couldn't do before.

So I think if you really want to see a winner in and that the application of generative AI to advertising models, it's probably Meta handover fist and then probably Google too. The other players will also benefit, I think, just not nearly to the extent that the large scale players will.

Mark bill Ready has been in the CEO role for a year. What is your assessment, your scorecard of his leadership so far?

Well, he's implemented a series of changes to try to get to regrow the user base and to raise engagement. It looks to me like he gets a V plus and a minus for doing that. I mean, since he's joined the company, you've started to get accelerating user growth again. They're doing about four hundred and fifty million maus. It's growing, you know, solidly seven percent.

Year over year. That's pretty good growth for a business of that base.

And you're starting to see more engagement than some of the metrics that they talk about.

Like sessions or saves per user.

Those are all growing faster than the number of users, so you're seeing rising engagement, so he gets kind of a B plus a minus for that, which still TBD. So whatever that's a B minus is. On the advertiser side, there are some numbers he's thrown out about the small percentage of pinterest advertisers who've adopted their tools and are spending a lot faster, like thirty percent growth year over year.

I just want to know whether.

That's going to expand and cover half of the pinterest advertiser base, and whether he can really get new types of advertisers onto the platform. So that's that's kind of what we're really watching for, and it'll be simple. It'll show up in the revenue growth numbers, and we won't just have revenue growth go from six percent to seven percent to eight percent year over year.

I mean, it should get chunky. It should go fifteen percent, twenty percent.

That would be the real test and the proof of whether he's succeeding in terms of getting advertisers to unlocking advertisers spend.

It's I know it's been thirty six hours since Uber posted its numbers, but I want to get your take a milestone with surprise profitability operating profit on a gap basis, but the market seemed to sell the shares on sort of longer term growth concerns. How they continue growing, I guess at the you know, brider level, but also like the future of this business beyond its legacy mark.

I think you set it up right, except that I just layer in one other thing, which.

Is as we've gone, you know through earning season, it's a high bar quarter. That wasn't the case the last two quarters. Stocks had been so beaten down last year in terms of estimates, cuts and multiple d ratings, and you know this year you've had a recovery in a small recovery in fundamentals, but you certainly have had a recovery in multiples.

So I just think the bar is higher.

Even look at Meta, which I would consider the monster company report of the of the quarter. I mean, the forward guidance was materially better than even the bulls had thought was possible, and yet that stock is kind of barely holding onto the gains and it's kind of mid single digital three four percent gain, So it's.

A tough bar. This quarter, uber put up a pretty good quarter.

Expectations were high, but there was a little the revenue came in a little bit light and so, and I think that's mostly due to accounting change, but still it's like a little bit of a question mark on a stock that's had a major year to date rally. So I think you're going to I think there were some technical factors in there too, but leaving that aside, I think for some of these names, this quarter is going to be kind.

Of a It's not going to be a gap up quarter for good numbers. It's going to be a consult in terms of the stock, it's going to be.

A kind of a consolidation quarter, and companies are going to kind of be flatish or down mid single digit percent, And then we're going to wait and see whether the fundamentals continue the improvement in H two that we saw in H one.

If that happens, especially.

For ad names and online retail names like Amazon, then those stocks will go higher. But this is going to be a tough quarter for any you had quarter last quarter, you had a couple of these names traded up double digit percent, ten percent plus.

I think that's much harder to happen this quarter. I think the setup is much tougher.

Mark Thursday does bring Amazon quickly. What are you expecting from Amazon?

There's three things that matter here.

Whether the operating margins on the retail business continue to recover.

I think we'll see that.

Whether the online retail revenue growth rates kind of stable and maybe even start to accelerate based on recent positive data points.

I think we'll see that.

It's less certain to But then the most important thing is whether AWS reaccelerates. We're the way we phrased it is well the CFO used the A word i e.

Is an acceleration.

And look, if AWS growth reaccelerates, I think you'll see a lot of follow through on stock. I think the stock can go higher. I just don't know whether they will be able to see that. They didn't see it in the gym quarter. I'm pretty certain whether they're starting to see signs of that in September quarter is a big unknown to everybody. So what that's going to be the most important thing to glean from that earning scar.

All right, Hi, bar Courter, Mark Mahoney, evercre thank you so much for your time. I think we'll just stick with Amazon. Actually, Amazon launching the biggest overhaul of its grocery business since it acquired Whole Foods Markets six years ago for thirteen point seven billion dollars. For more in the details. That's bringing Bloomberg's Matt Day, who's been writing about this in Business Week. What I enjoyed about your article is you put Amazon in the context of the

It looks like trying to kind of push together all the disjointed parts of its grocery business. Right, Amazon bought Whole Foods several years ago. Amazon has its own Amazon Fresh online delivery business. They've opened a few dozen stores. They're trying to make all of that kind of sing better together. Right So, right now, if you go online, try to shop for groceries on Amazon, you might wind

What is Andy Jase's attitude towards the grocery business. So you've guys reported that he's taken a look at other units, for example, Prime Video, and said, well, let's get this under control. So what do we know about how he views the grocery opportunity.

So since Jeff Bezos first nudge Amazon toward grocery getting on fifteen twenty years ago, the rest now has been kind of the same for Amazon. Like listen, grocery shops the most frequent purchase that people make. You know, we need to be there if we're going to be a lot of you know, globe straddling retailer.

Right.

Amazon's got a tidy business of course already. But we've heard Andy Jassey makes some of the similar comments that you know, listen, groceries are a really important category. We think we have something to say there, and we're committed to it for the long term. You know that said, they did make a pretty big tap on the brakes, you know this about this time of year ago when they stopped expanding Amazon Press stores and really taking a hard look at, you know, whether their grocery strategy was

Bloombo's Matt Day check out his piece and Business Week about the big Amazon Grocery reset. AMD reported better than expected second quarter results, which signal some an optimism about the chip maker's AI potential, the CEO saying, quote, while we're still in the very early days of the new era of AI, it's clear that it represents a multi

I think the stock reaction is due to the lack of any quantifiable matrix around the AI business. I mean, look, there's no doubt that there is definite positive customer interests, there's definite positive customer feedback. But these processes take a long time. You go from sampling to customers, they need to qualify it place the pos an Even after that

The way the AMD framed it is the customer engagements engagements with seven x in the quarter gone, But that doesn't equate to booking revenue. That's your point exactly, Yes, And talk about where AMD is in the life cycle of its AI offering. You know, on this show Bling with Technology, we always talking about in video in h one hundreds, but that is just the latest generation of a number of AI relevant GPUs from Nvidia that have

I mean, for Apple tablets comparison, the Mi three hundred x will be the specific AIGPU which is supposed to SAMP or go to a production ramp in Q four. So no, and Vidia is running right now deployed as second generation GPUs in the field already. But AMD is a TAD would relate to this game.

The story for A and D is AI accelerators. What is an AI accelerator.

I think most people are of for CPU, which is a general purpose compute designed to process a lot of different tasks and do it well. But an accelerator is a chip specifically designed to fastly process one specific type of task, hence the name accelerator because it accelerates the processing of one specific type of task. So GPU in theory is a type of accelerator. The other types of accelerators are ACIC chips like from once from Broadcom. The

Away from the excitement of AI, this earning season has been about the core legacy businesses. What did you learn about AMD's health in PC and in data center?

I mean similar to Intel, the results around PC was really good. It shows that the PC market bottom is finally turning and on its path to a recovery and the second half seasonality is going to be a tailwind there. When it comes to data center though, we have seen it again both from Indian Intel, that the enterprise market

All right, Bloomberg Intelligence is Conngensabani. Check out his earnings outlook on the Bloomberg terminal. Sticking with chip, soft Bank is also feeling optimistic about AI. The company's semiconductor unit ARM is targeting an IPO valued between sixty and seventy billion dollars. According to Bloomberg sources, the company could go

Well, it's all about usually these are brands who are contracting these influencers. When brands go to influencers an ask them to make content for them, either for their own channels or to post on social media, there's always been the inherent level of risk, right you're turning over your brand voice to these influencers, to these internet individuals, and now it seems like they're taking it a step further.

So I guess the question is is the threat of legal action real? Have we seen lawsuits against people trying to make their name online?

We have, and there have been a couple key cases mentioned by our colleague and some good report today. One is being Energy. It's an energy drink that ed If you spend any time on TikTok, you see creators big and small promoting it. There was a lawsuit that alleged that creators who are promoting the energy drink was using music on TikTok that was not sanctioned for commercial use. Not every sound or song you see on TikTok are

So some of the numbers behind these policy limits are incredible. But how does it work? Hey, insurance broker, I'm an influencer. I need you know. Do you see where are you getting this from? Is there a market for insurers who are saying, oh, we better protect these famous people.

I would call the market ed pretty budding for larger creators, famous names that you and I might not, people who are celebrities online. This has been kind of par for the course. But when you start to talk about the vast majority of creators who are smaller micro influencers who have one thousand to ten thousand followers, that's kind of a scattershot approach. The brokers that are calling talk to say that they basically do it on a case by

All right, Bloomberg's autis baring around in LA and all things influencer insurance.

Thank you very much.

Welcome back to Bloombow Technology ed Lovelo. Here in San Francisco, it's the search for crypto clarity. Investors are seeing the cryptocurrency market surge and sync as two federal New York dodges issued decidedly different rulings over one single question, is crypto a security? On July thirteenth, shares of coinbas surge twenty four percent as US District judge and Alisa Torrez found Ripple Lads issued tokens were not a security, despite

Let's take a minute to talk to about what got us here. About July twentieth, you had the New York Times publishing a story that kind of got into here. Google documents that had the priving private writings of the Caroline Ellison, who would have been slated to be a star witness in the trial. Here when you look at what had happened between Sam Bagman frieda and his workings

These two.

Now within a day, the US prosecutors had alleged SBF of providing the press with these writings to discredit her as a witness. Now, what Sam Bagmanfried is saying, because the prosecutors had asked a judge last week to revoke that to hundred fifty million dollars bond, he is saying that revoking that bond would would violate his freesprice reach.

This is exactly his.

Response that the Sam Megman Freed's contact with the New York Times Reporter was not an attempt to intimidate Missus Elson or to chain the jewelry pool. It was a proper exercise of his rights to make fair comment on an article already in progress for which the reporter had already had alternate sources. So that is where we stand today. Significant dispute over from Sam Megman Freed. We will see how this trial plays.

Out, and we will continue to track it. Balloobotionnati Bassics stay with us because we're sticking with the broader crypto theme, but turning to a different project in the crypto verse. World Coin, the company aiming to create digital IDs by scanning people's eyeballs, has been suspended in Kenya after launching just last week. This is the country looks into security

Sorry here, I've had my orb personally scanned. It's a matter of when will the token drop, and I think maybe it goes back to Gosh it sounds like a lot of these cryptocurrencies are a lot like oranges, and so as that narrative plays out, I think you'll see the token become available here.

But yeah, it's here.

You can get your eye scanned on the ORB and again, I think it's going to deliver real utility as we go into this brave new world.

That was a key investor for more. We're joined by world Cooin CEO Alex Blani. Alex, welcome to Bloomberg Technology and thank you for your time. Optimism from one of your biggest investors about the potential of world Coin, but acknowledgment of security incidents and sort of existing controversy around the company and what's happened. What is your response to that?

Well, I mean that is contrary, is not surprising to us, right, I think there is this immediate reaction to biometrics and specifically our scanning, and that is to be expected. However, the technology is actually privacy preserving and we believe it's going to be very very important in a time in which AI will become increasingly powerful.

You know, in the twenty four hours of the launch there was a very very very significant uptake already when you look at the world coin token that had dropped, how has that uptake continued? And have you seen a taper ring at all?

It stayed surprisingly constant. Honestly, we did not see much change either up or down. It's very early, of course, this is a multi year long or even multi decade long project, so I think very like super super early in the game here. However, I'm really really happy how last week went from all parties, so I think it was a great, great start, but we have a lot of ground to cover going forward.

How many people have now signed up for the scanning, how many people have got into the token, and when do you see it coming to the United States, if at all.

I actually do not have the exact numbers as of right now, but it's a little over two million. We had a like crazy, crazy spike in demand last week. We had I think over six hundred thousand app downloads in the first couple of days, and we hadlines really all over the world, which was very kind of very encouraging and very cool to see everywhere from Tokyo to Hong Kong to Singapore to you know, kind of in Europe, Spain, Argentina, not really so it was a very very stressful week.

Spread Alex, we refer to world coin as a crypto project, but I'm interesting in the retinal scanning component, the underlying technology. Could you explain to our audience where your competence lays. Is it in that retinal scanning technology that you guys have been doing most of your work, or do you get that from a third party?

So, first of all, worldcoin is a protocol. It's an open source and eventually fully decentralized protocol that everyone can use and everyone can integrate web. So it is not a company. I think that's the first important thing to understand. I'm the CEO of Tools for Humanity, which is a kind of one of the main and of course the founding contributor to roldcin, but there will be many others

Sam Outman is one of the founders of this initiative and world ID day to day, what role does he play you and he separating your time and your duties.

Sam is very clearly focused on open AI, given he's the CEO of open I and I'm the CEO of tools Freemenity. However, he is a cool founder here so all important initiatives. He's obviously very over off. If there's work streams that really touch him he's involved with and otherwise, involvement changes a week do week depending on what we actually work on, like is it mostly product or engineering focused, he's less involved. If it's let's say a hunder as

Now, I'm kind of curious here. We talked about the Kenyan government's reaction to World Coin more recently at the start of this interview. I'm wondering if you are working with the Kenyan government to address some of the concerns that they may have, given how important the market was earlier on in the project.

Yes, we work with the government, with actually multiple government bodies to resolve all the open uncertainties or questions that there are. Certainly that the campus spike in demand that we saw last week was very, very surprising, So we really hope that we can get back to delivering the actual product in Kenya. However, of course, we will comply with the government and all the questions that might arise and work with all the regulators that are important to

Now, how do you address cod security concerns as well? Recognizing that there were worries about stolen creventionals when it came to world ID earlier on black market sales. Are these things that you are working and find a way to prevent in the future.

Yes, they actually are not surprising. So essentially, first of all, let's explain what we're actually talking about here and what was reported on. What was reported on is that users in countries where let's say Worldquin is not available China, by accounts from users where world quin is available let's say Portocoal or a robi And what that actually means is not you do not sell you biometric data or anything like that. That I think that was one of

All right, Alex Blaniir of world Coin, Bloomberg Shnali Bassek, thanks to you both. Coming up on Bloomberg Technology. We're going to speak to the CEO of Portage about the

This is Bloomberg.

A story in private markets we're tracking. Charles Lee, the former head of Hong Kong's Stock Exchange, has raised four hundred and fifty eight million in a Series C funding round for his new company, Microconnect. The company is a platform to link international capital to small businesses in China. The firm announce the funding with participation from new and existing investors in Europe, North America, the Middle East and

Good to be back on. Thanks.

So there's this idea we've been talking about VC Spotlight that if you look at the backward looking data in twenty twenty three, activity broadly for venture backed startups has dropped off. But if I go on Bloomberg dot com, go on replays of this show and I look at the headlines lots of people closing funds and lots of companies raising money, what is your on the ground take of what's happening right now from an activity perspective.

So, for certainly, we had a false down in Q one where we felt things were coming back and then we got slammed by SVV and all the consequences.

Related to it. I think Q two will prove to be the low. I think anecdotically you're right.

What we're seeing ourselves and with my colleagues across the venture and growth markets is things are really picking up. I don't think we've been busier in twelve to eighteen months from terms of perspective term sheets that we've gotten, market deals that we're closing.

So it does feel a lot better.

I think will be much more comfortable if we have better visibility on where the FED lies in the fall.

But absolutely the sentiment in the market is much stronger.

Firm is focused largely in fintech and financial services, and you reference the volatility around Silicon Valley Banks collapsed. His interest in fintech disruption of traditional banking carried on into the second half of this year based on what happened with Silicon Valley Bank.

Yeah, I think that the fintech market as a segment within tech definitely has been hit the most, and understandably, I think there was new business models that people underwrote that haven't panned out, So, you know, I think rightfully fintech was hit the most.

But the strongest companies in the market are doing really well.

If we look at our own portfolio, well Simple or Albert, which are directed consumer businesses, they've never been stronger.

They're continuing to.

Have great growth.

More importantly, they're profitable and their customer acquisition costs are really contracting us.

There's just less competition in the market.

So question for an investment you focused on fintech and financial services, what is your attitude towards AI and how that fits in with your existing portfolio companies.

So first and foremost, you know, across our portfolio, we're focused on how do we take costs out of our business businesses. There's huge opportunities within your engineering stack. There's huge opportunity in terms of customer service and you know, operating leverage growth is you know, going to be significant because of successful implementation of AI, and that's where we're going to be focused, you know, in the early stages. I think ultimately there's the opportunities to invest in the

When a potential portfolio company of founders sits in front of you, do you want to hear them pay that they're going after the big banks and their business or do you want to have them have something more focused, more niche that isn't yet in the marketplace.

We want to hear about.

It is that a specific segment is really going to love their product and they're addressing a specific issue that that segment's facing. So it's not necessarily where are we taking customers from, it's where they underserved and why are you going to serve them better quickly?

Adam, final question, where's the talent right now in fintech? Geographically speaking?

That is a great question. I think it's everywhere.

It's a wonderful part about this distributed workforce. You know, we have portfolio companies that have employees all the way from Dubai to India to New York to your regional places in the United States, and Canada is becoming a.

Greater hubb as well.

So I think it's a great time to be building companies because talent is everywhere, and in a distributed world, they're excited to work for him.

You know.

The Canada Talent conversation is definitely one for another show, Adam Fleski. The portage thank you so much a viral story we continue to watch. Yesterday, we reported that YouTube style mister bast sued his ghost kitchen business partner Virtual Dining, saying the company's sacrifice quality in its bid for rapid