From Marhart where Innovation, Money and power Collie in Silicon Vallet NBN.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
I'm Ed Ludlow in San Francisco. Caroline hides off today. This is Bloomberg Technology coming up on the program. Qualcom and Apple extend their semiconductor agreement for three more years in a sign Apple's in house chips are taking longer than expected. Will bring you the details and Ali Baba's former chief Daniel Jang leaving the company's cloud division just months after agreeing to lead it. We'll have more on the leadership changes and uncertainty facing the company as it
navigates a complicated breakup. Plus we'll talk initial public offerings as Instacart kicks off its IPO row show and the company seeks evaluation. That's a big drop from its pandemic heyday. We'll have that and so much more throughout the hour. Let's get straight to our top story, Apple and Quawcom. This is about modems that go into the iPhone, connecting them to the high speed five G networks. You can see both shares. This is boosting Qualcomm up three point
five percent. Remember Bloomberg Is reported that Apple has been working on its own in house modem. Twenty four hours from now, Apple will unveil its iPhone fifteen. The expectation was that that would be the last generation to use Qualcomm's modem. Not the case, according to the agreement which was announced this morning. For more, let's bring in Bloomberg's Ian King on all Things Chips and Mark German, who covers Apple. Ian will start with you. This was a surprise.
What are the terms of the agreement as we understand.
It, Yeah, I mean they didn't give the precise details. What they said was, look, it's the same as the agreement that we have in place, and in terms of timing, that's out until the twenty twenty six model and basically same again, right, same deal that they signed in twenty nineteen, except it's going three years longer than it was supposed to.
Let's go to the basics. What is it that Qualcom makes for smartphones and in particular Apple.
Well, it's in particular Apple is the key here. This is the modem. This is the chip that takes that cellular radio signal, turns it into data, turns it into a voice, and it's a crucial, crucial component that determines just how well your phone works.
Gumman, let's bring you into the conversation. You have reported that Apple was developing its own modem in house. The story here seems to be that Apple's not as far along as they'd expected.
They're certainly not as far along as they expected when they set out to build a modem in twenty eighteen. They were hoping to get that chip into phones beginning around twenty twenty two. That got delayed a bit through twenty twenty three, right, And you can see that in the supply agreement they reach it qualcommon twenty nineteen is part of that royalty lawsuit settlement. But the anticipation was to begin getting that modem in flagship iPhones by the end of this year or early next year.
And my anticipation is they'll still be able.
To begin rolling out that modem, probably at the beginning of twenty twenty five, not the tail end at twenty twenty five, and they wanted to give themselves a little bit of leeway agreeing through twenty twenty six.
Now you have to.
Look at Apple and how many devices they have. They have several skews of the iPhone, they have many skews of the iPad, they have the Apple Watch as well, and they need to get their own modem to work in all of those different devices and also have them certified to work across the world on hundreds of different carriers in hundreds of different countries, and they have to deal with the biocracy of that as well, the testing
the different conditions. They have to have the chipwork on three G, four G, and five G, and that's not something they can do in one full swop. So my belief is they'll begin the transition with one or two model in twenty twenty five and gradually expand that to more models across twenty twenty six and into twenty twenty seven.
Mark I and bear with me. This is what Qualcom said this morning in their statement. This agreement reinforces Qualcom's track record of sustained leadership across five D technologies and products, and as Ian outlined the deal carries through in the twenty twenty six generation of iPhone, And as Mark, you just outlined you think that this will be phased with Apple.
Where does the modem sit within Apple's other activities in silicon Because actually I think what we expect in twenty four hours time is more proprietary silicon from Apple going into the latest handsets.
Yeah, it's just one leg of the stool, right Apple's Harvard Technologies organization, the modem is a high priority component there. They have offices in San Diego, Cooper Tino, multiple places in Europe, including in Munich, Germany, working on this modem. They have thousands people on the effort. The person in charge of the modem is actually a former Qualcom vice president who left about half a decade ago to come
to Apple to work on this project. Johnny Strugi, who is Apple Senior vice president of Harvard Technology who oversees all the custom silicon. There's a special place in his heart against Qualcomm, and so certainly this is a very important effort for Apple. They want to design Qualcom out of all of their products. They've been working on this extensively. They've run into battery life issues in terms of where
it sits in the overall organization. They have their Mac chips, and then tomorrow they'll announce one new chip, the A seventeen processor that's going to be the company's first three and nanimeter chip. That's a major milestone for the company. There's also going to be a new wireless component that's less significant, but certainly the A seventeen chip will be one of the core elements of the iPhone fifteen pro and Promac's announcement on Tuesday.
Shares up three and a half percent, on track for the biggest jumps since July. Earlier in the session, on track for the biggest jumps since May. And it's spare a thought for Qualcomm and what it means for them. You know, I said that this was a surprise, knowing that Apple was working on its own mode. But this is good news for Qualcomm.
Yeah.
I mean, you look at the analyst notes this morning and they're saying this is like seven billion dollars of good news for Qualcom had an analyst day last November where they said, look, just take out the Apple numbers going forward, take them out, act like we don't have that business anymore, and they still do, so clearly that's a part on the back for their abilities. This is a very difficult thing. As Mark just explained, It's not just a case of hey, design a nice piece of silicon.
You know, there's a lot of software tuning. A lot of work, a lot of insider knowledge that goes into that, and the fact that a company with the resources of Apple cannot replicate that effort in a timeline that they had set for themselves tells you that Qualcom is doing a good job, all.
Right, Bloomberg, Smart German on Apple, Ian King on Qualcom. Thank you. And speaking of those analyst notes, let's bring in Jordan Klein, managing director b Zoo's Securities. In a note out today, client wrote, the news is a best case scenario for Qualcom, as some thought maybe Apple would only do a one year supply deal and then move on to their own chips. Mark German just explain that.
So how do you see it, Jordan, the transition using Qualcom's modem to using Apple's own proprietary silicon based on the deal announced today.
Well, thanks for having me. I mean, I agree with your host as kind of what they said that Apple's been working on this for years. It's taking them longer.
You know.
We think they're going to gradually migrate over to their own custom base ban it's going to take them, you know again, probably at the earliest till twenty twenty five, you know, we think it could be their lower end SC four that could start using their own baseman, and then they would gradually shift to other models in the lineup in twenty twenty six, so you know, but it's three years some time, and in the meantime, you know, Qualcomm kind of sustains its leadership position and gets the
added revenue and earnings that they would have lost starting next year.
Jordan, I spent all of twenty twenty one and all of twenty twenty two talking about the five G supercycle. Unbelievably, my mind's already going to six G, and I just wondered if you could talk us through how you see Qualcom as positioned, if we're all going to move on to six G and the relationship with Apple in the future.
Well, it's a great question. I mean, again, like I said, Qualcomm is viewed as the best company and mobile technology, and there's a reason for that. They've been doing it longer than anyone. But if you ask the company about six G and people have on their earnings calls, I mean, they don't even really think it's going to be an impact until the end of the decade.
So you know, at the.
Earliest you're talking five six years away. It's going to take a long time for that to evolve. So I think right now their focus is broadening their revenue base, moving beyond mobile. I mean, there's a reason that that Investor day a year ago they told the Wall Street community to kind of take this Apple business out of their revenues. I think that they wanted to move beyond Apple.
They want to go into automotive, IoT, other areas of the market, even PC computing, where they can diversify beyond mobile. So look, it's going to be really big for them when the industry is finally ready to go to six G. But to be honest, I think we've got multiple years be it between then and now before it will really matter for the Stocker investors.
I've spoken to Christiano I'm on so many times about this move towards automotive. Indeed, actually the importance of on device running of LMS. You know, it's another area for Qualcom. Can they maintaintain technology leadership the smartphone modem at the same time is trying to move and throw these other areas well.
I definitely think they can.
I think that they make so much profit and money from the basepan and the modem business. And really, when you think about it, I mean they're licensing businesses almost one hundred percent margins. It's it's basically a license to print money, and they take a lot of that and they use that to develop new areas of silicon new technologies.
And they're out there talking, you know, a big game about how generative AI is going to move from in the cloud and these large big data centers towards the end user device, and that's where they think they'll have an edge because of their advantage in mobile processing units,
where they're also a leader. So I think again, the time's going to tell if users are going to, you know, upgrade their phones to a more powerful mobile processor where they think they can get advantages doing AI on their device.
Jordan, of the universe of chick names that you're covering, who do you see as best position to take advantage? I suppose if the CAPEX and R and D commitments right now that are going into how technology companies of all sizes use AI within their core businesses, well.
I think first and foremost that conversation or that answer has to start within Nvidia. I mean, there's a reason it's almost doubled this year because they're just dominating the shift in terms of processing from CPUs traditional server chips towards global graphics processors which are much higher power, much more energy efficient. So I think you start within VIDIA, that again has a big advantage in a lead over
their competitors. But I think as we go into twenty twenty four, companies like AMD clearly are going to be in the mix. Marvel and Broadcom are also big contributors, are contributing to this AI investment thesis, and then I wouldn't count out TELL and I would also look to these memory companies like micround because you're going to need a lot of memory to run these systems.
Jordan Klein and Massoua Goods catch up and have you here on Bloomberg Technology. Thank you, Okay, So this is the market story. US majors trading in the green today the S and P five hundred near it's forty five hundred level. The story has been outperformance in the session
of Technology. We get the CPI print Wednesday. In the last seven days, a new story snuck in which is concerns about China US China tensions, but also what's happening with the technology sector in China, remember then, as that one hundred is up more than forty percent year today, why probably artificial intelligence. Let's tie this all together and
bring in Linda Dousol federated Herme's senior ecuity strategists. That's a tough thing to ask, Linda, but right now from a technology sector perspective, what is driving these markets?
Well, I think you made the important point, which is that artificial intelligency AI craze isn't really a craze. It's a revolution. And as your previous guests discussed in depth, you know whether or not we peeked out in our use of chat GPT for the moment, lots of companies out there are building for what is going to be
a great productivity and handswer So it's very exciting. It's moved the market this year to date, and of course it's had a nice little correction as well into now so steadily now we look at it again and say maybe it's time to get back in, and then we trade down semiconductors.
Linda is an equity strategist. Even if you're taking a macro view, how has artificial intelligence changed the data points that you look at. You know, we'll talk about the FED and CPI in a minute, but I just wondered if you've changed your approach the commentary you look at where you look for information to try and understand what AI is doing.
Well, Well, you know, I appreciate that question because just as a general equity strategist, may it behooves us all to learn about AI and how quickly it might come and change our lives. So I guess the bottom line for any general anybody who's looking at stocks is is the company that you're looking at grasping this or are they turning a blind eye.
To it and expecting it to go away?
Those who are investing in this even you know, looking for companies that are hiring for AI talent is one very interesting way to look for stocks out there, and the productivity enhancement that should be expected over the next ten years can come a lot quicker than many people think, and that's obviously going to show its way through earnings.
Linda, is there any specific sub sector or area where you see most potential upside from investments into whether it's accelerated computing or into large language models. The underlying technology behind generative AI you.
Know, that's a very interesting question.
Is going to probably cross through all sectors of the economy.
But when you look at really there's two areas of it.
The information part of it, those jobs that are highly information oriented that can be at first helped buy AI, and then maybe see jobs displaced by AI over years going forward.
So that'll be some of the.
More highly paid, highly compensated areas out there. I don't know, if you're a lawyer, maybe you need to watch out here that type of a thing. And then on the lower end of the spectrum, you'll see cost cutting in terms of labor in areas that are heavily labor intensive but that are repetitive, and that goes to the robotics side of things. Your retail sales clerks, you know, are
in big, big trouble. I think if I was looking to give advice to a young student, I'd say, you know, you might want to go ahead and be a nurse instead of thinking about going to work at the mall.
For example.
I am not a lawyer. I did go to law school blenda, but I know numbers start out here in the Bay Area. They're looking to use AI for the review of legal documents. I think we better also talk about China. You know, the story about China is that is kind of the tension between the US and China's central government. But Ai is at the heart of that. And I just wondered how you see the latest headlines from China impacting this market.
Well, China in general as a place to invest is something that people are ever more afraid of for numerous reasons, and this is just one extra thing to add to that.
We want to be self.
Sufficient here and move lots of production here to the United States, and I think other countries around the world the same.
This is going to take a lot longer than many think.
Not being anew at this at all, but seems very clear that we as the United States and our leadership may want to try to tamp down those concerns. And as you know, some of the best actually have the best money being spent in capital expenditures in the manufacturing side is because of things like the chip back where money's coming from our government to help get more self sufficient here in the United States.
So we can try to.
Wean away from China in this way, but it will be longer. It'll take longer than many think and you know, just bringing everything back short and we'll probably take longer than many think.
Linda's CPI Wednesday. Where is your head out with the FED and what that means for the tech sector.
Well, we had Federated Hermes believe that you will see probably one more height this year, maybe it's November. Maybe they wait one more time, and that is something that's probably reasonably expected. You know, in the tech sector, the tech sector, that's a long duration asset and you really want to see you really don't want to see real rates going up, and they've gone up fairly quickly here as versus inflation expectations. If we're right about inflation expectations,
they're coming down, then FED please stop raising rates. It just makes it more dangerous or vulnerable for these for these stocks that are long duration like tech.
Linda Dousol's senior equity strategists over at Federated Hermes, Good to see you coming up here on bloombo Technology, Ali Barber's former chief Daniel Jang quits more in the details. Next, this is Bloombow Technology. Time for talking tech. First up, India's ed Tech Titan by Jew's made the surprise repayment proposal to lenders almost a year of conflict over its debts. Sources say the firm is now offering to pay back its entire one point two billion term loan in less
than six months. And Intel Sat, the world's biggest geostationary satellite operator, trying to get a foothold in a technology that's gained traction in recent years, low Earth orbit satellites. The company has taken stakes between five million and twenty five million dollars in four businesses focused on low Earth
orbit to off for new services. Plus, Ali Baba's former chief, Daniel Jang has decided to quit just months after agreeing to lead the company's cloud division and introducing a new layer of uncertainty to China's largest e commerce company just as it's navigating a complicated breakout. Let's bring in Bloomberg's Isabel Lee out in New York for more. What does this.
Mean, Haiyan?
Actually, this was really a surprise to many. It comes after two months after his appointment. We have Goldman Sachs saying it's a surprise, Bloombery intelligencying that this will likely mean that the new partners will have more of an influence in the strategic cloud decisions of Ali Baba and Bloomberg just last Monday reported that Ali Baba was in talks to raise funds from China state owned entities. So the departure really caused some people to raise some eyebrows.
And this comes after an eight year storied career for Zang. But not to worry, he will still be in the Ali Baba's ecosystem. He'll be running the one billion tech fund of the firm. But still the reshuffle comes as Alibaba navigates this complicated and historic breakup into meaning Baby Baba's. We've discussed a lot in your show, but now I guess the certainty is really getting to the investors. Ali baba shares fell as much as three and a half percent.
That's their biggest fall in something like three weeks.
You know. Josi is like more of a known quantity to us here in the United States, at least. He's one of the co founders of Ali Barba alongside Jack Maher. But tell us about the two new guys not necessarily new, but newer names to an international audience.
So Zen gave up his dual roles of CEO and chairman to Eddie Wu and to Joseph Taie, so the two are close confidence of MA. Let's go with Eddie Woo first. So Eddie Wu is lesser known, but he has been with me since the beginning, and he's a computer science major. He's credited for the development of the paper. Like Ali Pai, we have Taie. He's a well known deal maker, and he's a Yale alumnus, and he's a former lacrosse player, if that's of any significance, and he's
the owner of Brooklyn Nets. And like Wo, he was with MA since the very beginning. So that probably tells you that MA probably really values loyalty. But this means that the two of them will be responsible for steering a two hundred and thirty billion dollar company around after years of struggling since twenty two and one when China really cracked down at the tech sector. So this is
going to be an interesting space to watch. It's very much, it's new, it's unexpected, and it's in the middle of a huge historic reshuffle.
All right, bloombergs Isabelle Lee with the lowdown on Ali Baba. Welcome back to Bloomberg Technology, Ed love Loo here in San Francisco quick check on the markets. This is the picture with the nazet one hundred up seven tens of one percent outperformance in the technology sector. We get CPI data Wednesday, and as we heard from guests in this hour, a big view to forming how we feel about the FED based on that data print. But we're coming off a one point four percent drop on a weekly basis
on the NASDAC last week. There were being concerns about China. We're through the bulk of earning season. It will come around again from a points perspective. One of the big stories in the session is Tesla basically on track for its biggest jump since the end of January. Morgan Stanley out with a note raising their racing on the stock to overweight from equal weight, adding a street high price
target four hundred dollars. Adam Jonas and co. Are basically saying, look at Dojo, Tesla's supercomputer and their work in semiconductors. This is going to add five hundred billion or up to five hundred billion dollars in market cap. And they basically say this is like an AWS moment for Tesla, like Amazon was able to enter new markets like cloud
computing with AWS. They see that opportunity for Tesla. Remember go back to twenty fifteen, Adam Jonas first onto the scene with a seventy percent raise of his price target on Tesla because he saw the future being in robotaxis. Present day twenty twenty three not quite there, but it's an interesting call nonetheless, and it's having a pretty big impact on markets this Monday, right stories. Supercomputers are not
the only type of technology with growing commercial appeal. Enter quantum computing an entirely separate kind of technology with the capability to accelerate various sectors in society. I'm really excited to say that joining us now to walk through this tech wave is d Wave CEO Alan Barrats. It's one of the first commercial quantum computing companies in the world. And Alan, I would say that's a good place to start. This misconception that quantum computing is still at the theoretical stage.
It's not out there in the real world. That is a point of view that you would disagree.
With absolutely, And first of all, thank you for the opportunity to be here today. I'm really excited to be able to speak with you.
So you're absolutely right.
Most people in the industry are saying that quantum computing is years away from commercial reality. But in DWave, we took a very different approach to quantum computing. When it has allowed us to deliver for commercial quantum computers today. In fact, we've been delivering them for almost two years now. We have over sixty commercial customers that are leveraging our quantum computer to see improved performance in a broad array of business applications.
And I'm going to play Devil's advocate for a minute. You've sixty commercial customers, you've been delivering computers. I look at your revenues and they are low. If quantum computing is in the real world, why are you not booking more sales as a real commercial product.
Sure, so, first of all, commercial quantum computing is still early. In other words, even we were not commercial until a little over a year ago. So we've achieved that milestone and we are now getting started building the business. We have seen our bookings accelerate quarter over quarter for five quarters now. We have seen our average deal size grow significantly from tens of thousands of dollars to well into
the hundreds of thousands of dollars. And we are supporting applications as far ranging as employee scheduling, e commerce delivery, customer loyalty, rewards optimization, optimization of marketing campaigns, even improving the performance of shipping forts. So it is early days, but we're off to a great start and we're really excited about the prospects for the future.
Alan the basics of quantum computers, if one can say such a thing, is that they use quantum mechanics to carry out calculations as opposed to sort of high efficiency than supercomputers. What is it about d Wave that is proprietary? What is it that's unique about your technology?
Yeah, So, as I mentioned earlier, we've taken a different approach to quantum computing from everybody else in the industry, and in fact, we're the only company in the world that pursues quantum computing in the way we do with
the technology that we have developed. And we've developed that technology entirely ourselves, everything from the design to the manufacturing of the quantum computers, to the software for programming the systems, all the way up through the Quantum Cloud service, which is the vehicle by which our customers access our quantum computers. We've designed, we've developed, we delivered that ourselves, and we
have extensive patent coverage for all of that technology. We have over two hundred US granted patterns and over one hundred in process worldwide. That space for quantum computing is owned.
By d Waves And a few weeks ago we had a company called Phasecraft from the UK on the program talking about their work in quantum algorithms and quantum computing, and one of the observations made by that founder was that China is making progress in the field of quantum computing, but that it is a cooperative initiative globally for those
in the field. Could you speak to how you view China's progress in quantum computing because as you as you know, you know China right now and its access to technology is a mainstay of the news cycle.
Yeah, you're absolutely right, and in fact this is a real concern. China is investing over fifteen billion dollars in quantum computing. I was in Europe last week, actually I was in the UK, Switzerland, Germany. They're all investing heavily in quantum computing. The UK over four billion in quantum Unfortunately, the US is currently investing less than four billion in
quantum computing. In some sense, we're a laggard in this space, and we absolutely must get our act together because this technology is going to fundamentally transform the way businesses operate and they have a huge impact on the social and the economic environment, and the US must accelerate its investment in this area.
All right, Alan barrat CEO of d Way, thank you for joining us here on Bloomberg Technology, all things quantum computing, saying that word more and more. Now coming up, tech Starle CEO Male Gave joins us to talk about the outlook for the early stage funding ecosystem. They're changing how they do their accelerator program. Want to understand why that's coming up next? This is Bloomberg Technology, all right, it is a big week ahead for IPOs in the technology sector.
Let's kick it over to New York City where who else Bloomberg Shnali Bassek has all the latest sale.
It certainly is a big week. We're going to zoom in on Instacart because it's setting the stage for an ib that could value it at up ten nine point three billion dollars. But here's the thing that is less than a quarter of what it was worth at the height of the pandemic. Let's bring in Bloomberg's Katie Roof to break it down, because Katie, we were looking at this Instacart ipo and it is not the only one that might be facing a down round.
Sure, so, you know, Instacart was well aware that the market conditions have affected its valuation. They had lowered their own internal valuation, which is the four and nine A valuation to thirteen billion last year due to market conditions
and possibly due to their own slowed growth. But you know, some people are saying that bankers may be trying to price these things conservatively in order it to ensure a pop so that it's well received in the market and therefore opens the window for additional IPOs well.
Another example of this would be, for example, klavy out, which even with a valuation that's close search where it was last in private rounds, it is still lower. But they are bringing in some interesting massive names at the beginning, Blackrock, Alliance, Bernstein. What does this say about the model to taking companies public?
Now?
Sure?
And so I think at this point most people in the tech industry are no longer in denial the market has been in a correction for over a year now, and so companies, you know, are aware, especially if they're coming to market, that it's not going to look like twenty twenty one. And so it looks like a lot of them are accepting that. But you know, we'll see.
I mean with.
Klavo especially, they're so close to where their last valuation was from last year that you know, they may end up being a nine billion dollar company or more if they do pop on that first day.
Now, when you think about instacart, Sequoia D one are among the largest investors. Tiger Global Co Two two very well known Tiger cubs that have been investing in these ipo these hot pipo companies. How important is this instacart listening to them?
Well, they're going to make a lot of money regardless, because these are firms that invested, especially Sequoia, you know, when this was a you know, a very young company, and so depending on what share price they got in it's still going to be for most of them, it's going to be you know, a lot lower than where it's trading at. You know, some of the ones that
invested at thirty nine billion valuation or whatever. I mean, they're going to lose money on those shares unless there's a gigantic pop. But by overall, you know, I'd have to do the math. But if you're investing when when it's you know, a dollar share or less, you're going to make a lot of money.
Bloomberg's Katie Roof all over it breaking a lot of news in this market. Thank you to you for your time. Ed back to you.
Yeah, my thanks to you, Bloomberg Shnali Bassek alongside Katie Roof there as Shnali said, that's one end of the scale pre IPO with IPOs imminent, Let's go to the other. In today's VC Spotlight, tech Stars, the largest preceed investor in the world, is making some strategic changes to the way it operates its accelerator programs, starting with a move to a two term schedule. Let's get more details on that from tech Star CEO Mal Gabe, who joins us now.
We had Gary Tan on the program on Friday, Summer twenty three, class of Y Combinator came to a close and he was talking about what was different this time round. Very interested to hear from you that you are also thinking a bit differently about the accelerated program. Explain what you've done.
Yeah, absolutely, First, thank you for having me on your program as usual, that's the pleasure. So the big news for us is that we're moving to a two term model for our extra program starting in twenty twenty four. And what it means is that our extra programs will
now start together and end together twice a year. And so the first string term which we are about to which we're about to open, we'll be running twenty two programs in sixteen cities across five countries, and we will also have a remote program, and a lot of this program will be in partnership with a corporate entity like JP Morgan or Audi and few more. So that's the big change.
You and Iron stage together at startup Grind earlier in the year, and I asked you a question that elicited such a response from the audience afterwards, which is how do you find candidates? How do you go out and find the right precede stage companies.
So we're lucky to be a very well known brand and a lot of entrepreneurs around the world know that they should come to us if they are interested in getting a first check and We received thousands and thousands of applications every month, and so we go through this application.
What is very specific to tech.
Stars is that we have local teams in the different countries that I mentioned before, and so we have the opportunity to meet in person was the entrepreneurs on the ground, whether it's New York, Seattle, San Francisco, but also Paris, London, Tel Aviv.
Mail you're joining us from the Middle East. I believe you're in Saudi Arabia right now. We know all about Saudi money in growth stage companies, but you are looking at the very earliest stage of Saudi founders. What is the landscape like that.
So it's still a very early, very young ecosystem. Part of the reason why we've been active in the Middle East for a little over five years running ACTU programs and making investments in the region. We now have over sixty investments in the region. Part of the reason why we're there is because we are usually building the deal
flow that then the VC industry invest in. And when we came here, part of what we were asked to do was to go and find entrepreneur, find people who wanted to be entrepreneur, find women, who wanted to be entrepreneur and help them get there, help them BEBC backable.
There has been a debate among venture catalysts on the pros and cons of partnering with Saudi LPs or taking money from Saudi LPs. Where does TEXT does sit on that debate.
We are an a political organization. We basically we go where we believe that we can help entrepreneurs. We have deeply rooted into our culture and into our mission the idea that talent and ideas are evenly distributed around the world, but opportunities are not. And so whether it's the US, Canada, Saudi Arabia or Japan, when we see an opportunity to go and support founders on the ground, we go there.
One of the things that Gary Town reflected on on Friday was the thirty five percent of the Summer twenty three class was an AI focused startup, but by the end more than fifty percent were looking into AI in some way. Is there any number you can give us about where those sitting in your accelerator program are proportionately A focused in AI?
The number are fairly similar. The challenge is always to distinguish when AI is there the core business that you're investing in versus an enabler of the core business. When you look at our latest investments throughout twenty twenty three, the vast majority of companies have leveraged AI in one form or another, and about twenty percent of them twenty thirty percent of them have AI as the core of their business.
My colleagues Shnali and Katie Ruth were talking about everything that's to come this week in the IPO market. I know that you're investing at the other end of the scale, but you've been through so many markets. I just wondered if you give us your perspective on how much of a starting gun this week is for tech IPOs in twenty twenty three.
This is an important week if anything, because the entire techn ecosystem has been waiting for that week for a very long time. There hasn't been really any significant IPO in the last twelve months, and so everybody's watching what's
going to happen. Is there going to be a successful instacart IPO which will give increased confidence to venture capitalists and to venture backed firms to go and get ready, or is it going to be very very tuned down and in that case, the companies are probably going to wait a little longer to go public, So Big week and.
Find them out. You have access to just an astonishing body of data, real time data about the health of very small companies around the globe. Know how has the preceed market held up? You know, over the volatility of the last eighteen months or so, the.
Early stage founding ecosystem has pulled quite substantially, with obviously the exception of artificial intelligence and climate tech. Having said that, if you look at Precede, the valuation have remained fairly stable. They continues to be a really great deal flow for
Preceed investors. Lots of innovation driven not just by AI but also blockchain and nanotechnology and so all in all, compared to growth stage company that really took the biggest hits so far, the early stage Preceed type of type of companies have been fairly protected.
Tech starle CoML gave investing in thousands of early stage companies across the world. Thank you for joining us. All right, today's going viral. You know what we're talking about. The US Open, Novak Djokovic and Coco goth taking home the champion titles over the weekend, but about fifteen million customers of Spectrum cable TV were not able to watch as ESPN, ABC and their sibling TV channels showed blank screens amid
a dispute a business dispute with Charter Communications. However, breaking news this morning, a deal has been reached, ending the blackout for millions of PayTV customers, hours before the first broadcast of Monday Night football, making Bloomboat Technology producer Jackie Lopez a very happy Jets fan. Let's get the important details. As Disney shares on the move, Bloombo's Chris pal Mary, who leads our media coverage, joins us from LA, what do we know?
Well, you can see the market reaction. Disney's up a little, Charter's up a lot. It looks like Charter regard much of would have wanted two big takeaways here, wanted to include Disney streaming services in their basic cable packages and no additional charge to customers. It looks like that's happening. So for sixty dollars the sixty dollars a month package of cable channels, you get Disney Plus with ads thrown in. Their similar deal for the people who pay more for
ESPN Plus. Also, when they launch an online version of the ESPN the Papa Channel if you will, which Iger Bob Iger, CEO of Disney has said they would, that will be included in the cable bundle as well, So big win there. Other big surprise here is that a lot of these lesser channels are off the Charter system, and some of them are pretty well known. FXX a spin off of FX Disney Junior Disney XD free Form, which used to be an AM ABC Family channel. Those won't be available to Charter subscribers.
So you have to share. Reaction charts are up more markedly, Disney up a percentage point. You get a knee jet reaction in the Bloomberg Jackie Lopez index because she's excited. But here's the bit in the story, I don't understand. There's a more narrow lineup on Spectrum. So it's not all good for Charter, right, No, what that means is they traded.
Yes, subscribers to Charter won't get those channels anymore, but they used to have to pay for those and the game in cable TV for a long time. So let's create these spinoff channels and you get more money from the subscribers, you know, but you just don't have Disney Channel.
You have Disney XD, Disney Junior.
And those marginal channels are going away because of the cable bundle costs so much, and that strategy isn't working anymore. And to see all of those channels dropped by the second largest cable provider is big news. It really signals that those channels will probably see a lot more of them fading away.
Yep, yep, they're still getting that GEO. That's important. Blooms Chris, Tom Mary, thank you very much. That does it for this edition of Bloomberg Technology. You can recap the show on our podcast where you get it if you get your pod costs, Apple, Spotify, iHeart, and of course on all of your Bloomberg platforms. From San Francisco. This is Bloomberg Technology.