From the heart where Innovation, money and power Collie in Silicon Valley, NBN.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Now from Lomog's world headquarters in New York.
I'm Caroline High and I'm me d Lodlow, also in New York this week, and this is Bloomberg Technology.
Coming up.
We are gotning the full earnings coverage for you. We hear from the CEO of Ribbon on the ev makers earnings and push ahead to all important Disney results after the Bell not to mention a whole host of other tech names.
Plus as we speak, we Work appears in bankruptcy court to kick off a month's long debate about how creditors should divide the remains of a once high flying company. Details ahead and shares of take too attractive.
They are surging today after the company confirm reports it's planning to release details on its hotly un This is abated Grand, theft, Auto six, all that and so much more coming up.
The story for me.
Is about Bob Eiger's turnaround. Right, all of those cuts, the cost savings, thinking about reducing the content spend, Well, that's how he's going to be judged by on the bottom line after market. I think that's where we look in a few hours time CARECT.
Yeah, return to growth, that's what people want to see, whether it be on indeed Disney's subscriber growth on Disney Plus, but also whether really you can see a turn around in the overall numbers. Let's get to it with Chris Palm Mary or Bloomberg and are we expecting a bounce back to growth?
Yeah.
I mean, at least in terms of Wall Street expectations, it's going to be a bump in sales, it's going to be a higher profit a bottom line. They're expected to show lower losses in the streaming business. So yeah, all those things that you mentioned, the cost cutting, it appears to be paying.
So I think this is going to be a really big earnings Chris pal Mary, you lead our coverage of the entertainment industry. Do you go into this thinking about Disney is a tech company streaming subscribe as content or do you wake up on earnings morning and think theme parks, merchandise and traditional TV.
I always think of Disney Board as a conservative products company. This has been a really choppy week in terms of entertainment earnings. We saw Paramount Scott jumped last week when they reported some better results. Today Warner Brothers dives and again some numbers there in the Warner Brothers supports are not bad. They show to profit in streaming in the most recent quarter, which Disney and Paramount have not are unlikely to.
So you never know what to expect.
It's been a really difficult market for advertising on the traditional TV networks. That's something Disney is very much exposed to. And the big questions always surround Disney and what is Bob Iyer going to say on the call about divestitures of ABC buying Bhulu, you know, other potential deals.
It's it's always, you know, something to.
Watch because this is actually where we get the first well sports TV part of the business stripped out actually showing us what the numbers really look like. When it comes to ESPN, how much do you think he'll actually answer questions about what he sells, what he buys.
I certainly hope you get to ask a lot.
I mean, ESPN is one of the ones they said they're looking for a strategic partner.
We've reported they've talked.
To everyone tech companies, the sports leagues, it's not really clear to a lot of people what Disney gets out of the you know, bringing in another investor to ESPN.
Hearst Corporation owns twenty percent of it. You know.
One of the takeaways from the numbers they started reporting on the sports business is that although it's profitable, you know, it's it has really high content costs those NFL rights, and that's something that's likely to come into play in this quarter, as they reported as well. So getting that picture of ESPN and where it goes from here, it's going to be.
Important, all right, bloom best Chris paum Mary, you are the editor in charge of our entertainment coverage. Is a busy day for you on the West coast. Thank you very much. Look a name that I've been watching, Caro is Rivian, as you know, has changed my desk for earnings. Shares really popped last night again in pre market because of two pieces of news. Updated guidance they'll build more evs and expected but also Amazon has freed them from
their exclusivity on vans. They can go and sell vans to others, and I'd heard from sources they were well underway with that, so I asked the CEO R J. Scarrange, have a listen.
It's not as if we woke up yesterday and we signed the exclusivity that changed the exclusivity agreement with Amazon. It was a long, long process and through that process we're able to use that time to build a pipeline of other customers and diverse customers.
We're not yet announcing any.
Of those deals, but they'll start by large with pilot deployments where we have sort of skilled the skilled number of vehicles that go out and test the systems, understand how they fit within the network. But what you'll see is it's very verse across everything from last mile to retail to of course just more general purpose commercial applications of vans.
You have an announcement but have not announced them, but there are deals, deals that are done, and you have visibility on new customers on eDV.
From this point on, what I'd say is we.
Have very high visibility on customers outside of Amazon, and we are excited to talk about those, but we're not yet talking about those other those other relationships and partnerships.
A j Rivian is still losing thirty one thousand dollars on every ev that it makes when will you start making money on them?
Yeah, this has been absolutely a core focus for us as a business, and quarter of a quarter we've shown significant progress. We certainly showed that as we went from Q two to Q three and talked about those results yesterday and these improvements that are driving us towards the long term twenty five percent corossmark that we've talked about extensively on our one.
You can almost think of it.
As a staircase. There's a whole host of changes that are happening in our material costs. That's our bill of materials, there's improvements in our plant. There's the fixed cost absorption from running at higher of arms in the plant. And then, as of course, there's the evolution of our average selling price, which continues to trend upwards as we move into newer orders and also launch things like our Max Pack, our
largest battery pack. But importantly, I do want to really be clear here this staircase of steps.
The biggest step.
Amongst those is what will be putting in place in the plant in the second quarter twenty twenty four, where there's a consolidated set of changes that go into the vehicle that dramatically reduced to bill of materials and also
allows to run the plant more efficiently. That's not to say there's not improvements that are happening leading up to that, but we had a similar shutdown that we did on our commercial van early part of this year, and coming out of that we had a thirty five percent reduction in our material costs. So that's the scale of change that we're going to be driving with the shutdown for R one in the second quarter twenty twenty four.
And these are contractual.
These are contractual changes, meaning bill in materials changes. Are not like us hoping suppliers are going to charge us lest These are hard negotiations with suppliers contractually obligated, but.
There's effectivity dates that have to be achieved.
You know, they don't all apply immediately, they come in over time.
Oh ja.
Our audience has one common question, very straightforward, when will they see in R two prototype A prototype.
We absolutely can't wait to show it.
We're going to be showing the R two program in the first quarter of this coming year, so early part of next year. This is a absolutely vital program for us as a business. It allows us to take our brand and what we built as a company and put into a smaller package, but importantly much more a priced vehicle. But I've never been this excited about a product as I am about R two. It is that exciting it and I would say it's that good. We think it's just exceptional.
But quickly, to be clear, you'll whip the canvas off on stage or something in the first quarter of twenty four on an R two prototype.
We're going to be showing it their other product next year. Yep, that's right.
That's my interview with r J Scaring Ruvian CEO. Some say doppelganger. Now coming up, I'm say, Caroline, says Steve O. Coming up on the show. We're going to talk about safeguards for artificial intelligence with the CEO of Credo AI, who's in town to kick off the Responsible AI Summit, which is in New York today. Carra, what you got?
I Meanwhile, look, there are a whole host of earnings that are coming up, some of them relatively new to publicly training life once again, arm Key among them. It's actually down on the day, as of course, most of the spectrum is in terms of tech arm off by three percent. But look for their numbers after the bell lift as well All Important after Uber managed to outperform Instacart as well Key as It's down some four percent. And of course, both of these recently listed companies have
been under pressure since going public. Or keep a close eye on all of that From New York, both of us today Listen Blue Meade Technology.
Some news in the social media space and an effort to combat misinformation, Meta will soon require advertisers to disclose when political or social issue ads have been created or altered by artificial intelligence. The rules will go intoffect in twenty twenty four and will require advertisers to disclose when AI is used in Facebook or Instagram ads on social issues, elections, or politics. This according to the company's vice president of Global Affairs, Nick Klek.
And all of that is of course surrounding safeguards ways in which you can identify artificial intelligence?
What about protection from AI?
More broadly, Today in New York, in the City Credo AI will kick off it's Responsible AI Leadership Summit. Basically, it brings together the industry pioneers who are kind of leading the charge in the adoption of AI governance globally. Please to welcome to the show. Credo AI CEO Nvna Singh right here in New York with us. Wonderful to have.
You with us.
Thank you so much for having me so Ultimately, are.
The right people, the right voices, exerting their voices and having changed is made at the moment because everyone's wildly trying to adopt AI. Are they getting the governance and the rules in place quickly enough?
What a great question, Carolyn.
You know, the past ten days, if there are any signal of the urgency in adopting artificial intelligence. We've seen that, you know, from the executive order from President Biden all the way to the UKI summit, to a lot of discussion around how do we now actually make this real?
And this is why.
We are here in New York today because we are hosting Industries First Responsible, the premier event where we are going to be bringing in partners customers from Amazon to Microsoft to Google, Boozal and MasterCard and many others who are already operationalizing a lot of those guardrails within their organizations today. So I think we've moved beyond the talk and now it's time for action. And we are already seeing that within the enterprises.
That is a who's who list of participants. It might seem like a sort of strange question, but are there any stakeholders in the world of AI that declined your invitation that you wish hey sit down with us and talk because you're a big part of.
This Good news is no, everyone that we invited is showing up. But as you can imagine that, there are certain policymakers as well as startups and companies in Europe that are heads down right now with the EUAI Act, So they weren't able to join us in person, but they are joining us virtually.
It's the frustration that well, ultimately laws aren't being made quickly enough, because it does for everyone wants to say this time it's different visa v crypto visav social media.
And it's a regional thing, right Europe versus US. What's happening in and.
They do all seem to be coming together and talking a lot about it, but ultimately it takes time to make policy. Is self regulation, as some of our guests have say, basically marking your own homework the way that it has to be for the naytime.
You know, Carolyn, I think in the world of AI and if you just think about what really powers this entire ecosystem.
It's trust.
So certainly regulators and upcoming compliance needs are a driving force. But right now what we are seeing is the reason organizations, policy makers, different stakeholders scare about governance is because you want to engender trust in this powerful technology which is luckily shaping our lives.
Day in day out. So I think, if you step.
Back from the regulatory compliance today, how can we make that trust happen. It is through transparency, it is through oversight, and it is through actual guardrails.
On that transparency issue. You heard the story that we covered on Meta right, if it's a political or social issue add and it's been altered or created by AI, then you're you have to disclose it As an advertiser. Does that work? Is it a powerful tool to your mind?
You know?
I think it's a starting point. One of the things that is really nerve racking for me as well as a technologist is there's so much information out there and we're already entering this phase where we don't know what's made by human versus what's made by AI versus what's made by human plus AI combination. So I think we are entering this phase where need for you know, watermarking, need for provenance, need for really understanding the entire lineage is going to be critical and we are just at
the starting point. It's a very complex issue and a lot of technological innovation but also policy innovation is needed.
Can you just walk us through how you at Creto ultimately help a company get the right rails in place?
How have you thought about writing.
The war book ahead of anyone else, She's setting them from a regular shap perspective.
Yeah, so I think this is where Creto AI our mission has always been, how do you make sure AI is in service of humanity? And instead of just us creating our rules, we first what we did was build very strong partnerships in the ecosystem with the regulators, policy makers, standard setting bodies like nist IO and others. So our first step was really bringing all that knowledge in but operationalizing that through software, through technology, and as you can imagine,
most of our team is AI experts, risk experts. So now we are bringing in best practices from CREDOAI to really help transform Just a quick.
Example, today's a big day.
We are launching our trust reports and trust scorecards, because if you've been following the Open AIS dev day, they've introduced the marketplace. Now, how do you actually make sure that all these new applications that are showing up in this marketplace are actually trusted and are governed. And this is where Cretois trust layer comes in. We've learned a lot in the enterprise world that we are now bringing to startups so that they can compete but also win.
In the stage of.
AI Verrina saying Creato Aic, it's good to be here in person with you, sony conversation we've had remotely keep in touch on what actually happens in your summit. Okay, time for talking tech and use out just before the show. AI startup and Fropic will be one of the first companies to use new chips from Google, deepening their partnership after a recent three billion dollar cloud computing agreement. And Thropic will deploy the chips to help power its large
language model clause. Remember they also have a deal with AWS and Amazon speaking of is offering Prime subscribers discounted one medical memberships. The new deal will cut a one medical membership by one hundred dollars to ninety nine dollars a year. One Medical is a centerpiece of Amazon's healthcare operation, and Microsoft is offering US politicians and campaign groups at all aim to help fight the rise of deep fakes
ahead of the twenty twenty four presidential election. The new tool will allow parties to authenticate their videos and photos who are so called watermark credentials using cryptography car.
Meanwhile, ed we move away well from the future of AI to what's happening in the here and now, the downfall of we work. It's making its first bankruptcy court appearance today seeking to advance that restructuring proposal that could cut three billion dollars in debt and actually shrink the company's.
Real estate footprint.
Then once really high flying real estate business far from bankruptcy just two years after going public and springing Bloomberg's Ellen Hewitt, who was there for the highs, who were there for the crash, and ultimately we see the repercussions for those left holding what is the assets thus far, Ellen, who's really being implicated by this bankruptcy filing?
Well, the people who are really being affected, I mean, it seems like reputationally Starffink is really being hurt by this. You know, they've obviously poured billions of dollars into this company over the years, and now it's almost like a crown jewel of their bad calls. Right, it's going to be the one that people always refer to and say like, wow,
that was really not a good bet. And I think although there's a future for We Work, you know, depending on how this bankruptcy process goes, I think reputationally, it's been really hard for SoftBank and for a Masochi son.
You have chronicled every step basically of we Work. You have a peace out, look back at the ten defining moments. We don't have time for all ten. But what are the kind of top twos your mind?
Well, people forget how fun We Work was in the sort of the period between like twenty fourteen and twenty nineteen. I mean it was first this extremely energetic, raw, raw, super fun company that was really trying to make work fun. So if you can picture it, you know, going to summer camp, which was their big annual blowout both for all their employees as well as a bunch of members. They would come gather for a weekend in these like beautiful settings in nature and have basically a music festival.
There were speakers like Deepak Chopra, there were headlining musical acts, there was alcohol everywhere. And if you talk to people who used to work at Weework, they were like, yeah, that was really fun, and it's imagine going to Coachella, but it's thrown by your boss. It's like one of these weird things that I think captures the thing that we Work was trying to do, which was blur the lines between work and your personal life.
What's interesting is Masioshi's son sort of almost took on sort of some of the blame over Adam himself Newman, sort of realizing them perhaps by thrusting so much money, so much disire for him to go out build be ambitious, it pushed Adam too far. Do you think that has credence to it?
I think it does.
I mean, in some ways, one way to look at Adam is that he's someone who was very good, intentionally or not, at taking advantage of the venture capital financial ecosystem of the mid to late twenty tens. Like he realized that there were people out there like Masa who were willing to write enormous checks for people who were willing to put so much energy into growing a company
as fast as Adam was able to grow. We work so you end up with someone who you know already had the tendencies to want to go big and go crazy, and then there's someone like Masa who really came along and enabled that with enormous amounts of money. It does seem like both of them, you know, they're not certainly they'll have futures in business. Adam's future and business certainly seems quite strong. He's been able to raise hundreds of millions of dollars for his new ventures and his reputation.
Of course, this will always be part of his story, but I think he's emerged pretty unscathed.
Bloomberg, Zell, and hut all over. We work for years. Today's day one of bankruptcy court. More to come. Thank you so much.
Welcome back to Blue Meg Technology. I'm Caroline Hyde.
And I Med Ludlow, and it's time for a quick check on markets in Team Technology. I've got some devastating new After eight straight days of gains on the Nasdaq one hundred, the longest streak of gains going back to November twenty twenty one. As it stands, the Nasdaq one hundred in this session is down by a few tens of one percent. The hot streak is over. But what's
so astonishing, Caroline? This week, while I've been in New York with you, we talked about how much of the heavy lifting the megacaps have done in the context of earnings. Some upside their Nvidia still to report, but some of the higher multiple software names they've been in the red. And we've seen this situation where the vast majority of names in the Nasdaq one hundred have been in the red in any given session, while few of the megacaps
keep the index overall buoyant. The focus, of course, is switching to the macrod is switching to the geopolitics and what the Fed will or won't do at the start of twenty twenty four. But watch this screen going towards the end of the session. Will we snap eight days of gains or will we get a ninth day? I'm ever the optimist you always are.
You have to be in the world attach quite often. But meanwhile, will someone's got reason to be optimistic? The IT infrastructure provider Kindrel celebrated second anniversary. If it's spin out from IBM, Better than expected financial results. Lik shares have actually been popping at one point, up as much as fifteen percent, biggest in to.
Day rise since August.
The company boosted its earnings outlook for the full year post a second quarter revenue and adjusted EBIT DAH ahead of street consensus. Kendrol CEO Martin Schroeder is with us just down in midtown Manhattan. It's good to have some time with you, Martin. And look, this is a turnaround story. You seem to be doing it quicker than expected. Revenue is still falling. You anticipate that you could get that into positive territory, maybe by what next year.
We do thank you for the opportunity. Look, we've said already for two years now that we will get this business to grow again in calendar twenty five, and now two years into the journey, we feel better about that than ever before. This year and a little bit next year as well, is going for us to be continued focus on engineering, if you will, decline around things that just don't make sense for our business, and we see the benefit of that in the profit progress that we've
made now. At the same time, we are seeing growth and strong revenue growth in areas that we want to continue and we expect to continue over the long haul. So our Kindrell consult business is growing quite well. Elements elements of our business where we are aligned with our customers, long term secular trends around investing in data in AI and hybrid cloud and et cetera, et cetera, they're all showing great, great growth.
So we're in a position as we said.
We would be, where we're engineering declines in part of our business which just didn't make sense for us, and on all the while building businesses. So we get back to long term sustainable growth in calendar twenty five.
When I think about tech infrastructure, when I think about data, AI, security, they sound pretty necessary. Ultimately, there are any macro headwinds that affect you and the growth that you're currently seeing or no, Yeah.
It's a great question.
Look that the nature of what we do is running the mission critical infrastructure of the companies that run the world, the banking systems, the airline systems, the telecom systems, the supply chains, and so in that nature of that work is that regardless of the macro environment, you need to run your infrastructure. And fortunately, as you would expect from
the world's largest infrastructure services provider. We're also helping our customers not only make sure they are infrastructure stays secure, stays resilient, but we're also helping them position themselves for those long term secular trends that they want to continue to invest in, regardless of the macro environment, so that they're ready for what comes next. So we spend a
lot of time with our customers helping them. For instance, with AI, we spend a lot of time with our customers getting the data architectures right so they can take advantage of that innovation. And obviously we spend a lot of time with our customers helping them move on to clouds to take advantage of the innovation they see there
to run their businesses. So while while the nature of the work remains sort of resilient, if you will, to the macro, because we're not really we're not really a something that you decide if you need or you don't need you have to have an infrastructure, the nature of what the work we do also helps them position themselves for the future. We're just not a discretionary item, and the nature of the work we do is not discretionary for their future.
Either the nature of the work you do and those doing it. What put Kindre on the map for me at the beginning of the year, Martin, was that you confirm to our own brody Ford you would cut a small amount of headcount, but that in tern put on the map that you had ninety thousand.
People working for you.
How has the progress of those reductions been and why do you need ninety thousand stuff? That's a lot of people.
Yeah, yeah, it just look it is a lot. But we're big. We're a big company. We're the largest infrastructure services provider, and our customers rely on us again to run their most important mission critical what I would call hearts and lungs. Now out of the ninety which is the number we were spun out with, about that number spun out of IBM, so we you know, you don't get to pack your own suitcase on this journey.
So that was what we had.
Now out of that, you know, roughly ninety about two thirds of those people are delivering every day to customers. And that's what's so important to customers that they have
the people that they trust delivering every day. And so we spend a lot of time making sure that our customers and the teams they trust have the right skills, they're in the right place, and they're delivering every day we have Earlier this year as we came out of IBM, as we hit our one year anniversary, we were able to start to simplify some of the processes we inherited, and we took a big step last weekend, which was actually the two year anniversary date, took a big step
by moving off of now all of the transition service agreements that IBM created for us, so we are now on an all cloud platforms. We've reduced the application count from what we inherited, which was over eighteen hundred to now in the dozens and that allows us now to rethink how the processes that we inherited, how can they really be changed and transformed.
To support a services business.
So for us, while we were delta hand, we've been able to use AI automate workloads so that we're not as needful to go out and build skills with external hires.
We can use the people we free up and put them into the more important, quite frankly, more valuable work that we're doing now, and we now have an opportunity as we get through as we are now through the TSA's, we have an opportunity to really think how we run the business and how do we build how do we build fit for purpose processes for the kind of services business we run as opposed to the more product orated business that we came from.
Martin Shares up eleven percent, on track for their biggest jump since August. A big part of that is the AI story. As you outlined, you know, in the cloud space, there's evidence that companies being small kind of dialed it back in some areas and reallocated spend for compute on the AI side. Does that show up in infrastructure as well?
The work that we do and we're helping our customers with is really getting their infrastructure ready to undertake first the science projects that they want to try. And I'll call it generative you know what they call generative AI now.
But we've been working with customers for quite a while on helping them implement machine learning and all the things that we use to run our business because they take advantage our customers take advantage of our AI today by helping them stay at the high end of world class based on all the technology you say of implemented and we automate all of that for them so that they have the best in class implementations of Microsoft and all
the other all the other technologies that they're using. So they've been relying on us to give them insights about their infrastructure and now that now that they see we are kind of customtomer zero if you will, for AI
and for the use of machine learning. We're also helping them now with our partners, get ready to implement their own machine learning, getting ready to implement generative AI and all the work that you need again with our workloads, all the work you need to do around data architecture and security and resiliency.
Yes, kendro Ceo Martin Schroezer in the market buying that with shares on track for the bigges jump since August, Thank you so much. Now, coming up on Boomboy technology, we'll talk more about AI, but particularly investing in AI with Sequoia a capital partner, Constantine Buer that's coming out, carc well.
I'SOK another company where shares are popping. If you're looking in the ADRs of ady And and Dutch Payments company, which is absolutely battered in August when it came with its numbers that just twenty two percent growth wasn't going to be cunning anymore.
The competition, the worry.
They needed to convince investors to buy in Today as their investor Day, they seem to be doing that. Shares rocketing some thirty one percent looks still half of where they traded back in August, but they are showing that there's going to be aiming for low twenties to high twenties percentage annual revenue growth up to twenty twenty six, improving ebidal margin to levels above fifty percent in that year too.
This is a room met technology.
Time now for our VC roundup first up, Hillhouse chairman Zanglie said that the next few years could produce quote the best vintages for private equity in Asia and that corporate management teams are maturing in the region now. Hillhouse is known for investing in traditional companies which use technology to improve business efficiency. Meanwhile, Coso Management has marked down it's stake in Opense by ninety percent. It's implying the company is now valued at one point four billion or
less on paper. According to the information that's signing a document, coach you slashed the value of its one hundred and twenty million steak in the NFT marketplace just thirteen million as of the second quarter of this year.
I mean, while Cheryl.
Sandberg is back when she's backing women's health tech startup Circle, one of the first investments in the former Meta COO is making through her new venture capital fund. Circle is a San Francisco based startup using AI to analyze biomedical and genomics data with the goal of improving women's healthcare.
ED.
All right, let's stick in the world adventure today's VC spotlight and bring in Sequoia capital partner Constantine Buler.
And it's a good.
Time to catch up, right, Caroline. And I think of Sequoia as this juggernaut of capital deployment, venture back deals and with you we think about AI. And I know you've actually been very busy since last we spoke. What have you been writing checks for? Absolutely?
Ed?
Caroline, thanks so much for having me back on. It's wonderful to be here. So last time we caught up, you asked the question, how is Sequoia going to lean into this moment of investing? Because Sequoya has been in the AI space for decades, now, But there's this amazing inflection in the generative AI revolution, and I'm very excited to share that we've leaned in by backing excellent founders that are solving real customer problems. So this year alone,
we've made twenty investments in the AI space. That's about sixty percent of our early stage net new investment.
Well, real quick, how does that differ from what you did last ya for example? How is that a rampop inactivity in investing in AI?
It's even more than last year. We've always had a focus on AI, back to nineteen ninety three with Nvidio, which is one of these absolute cornerstones of the entire AI field. We've always had an eye on AI, but there's been this exciting inflection point with generative AI that's allowed us to lean into even more companies in twenty twenty three, and this has allowed us to actually see
users leaning into these products and using them actively. So now we're seeing lawyers leveraging AI and our product Harvey in order to generate contracts. We see teams using dust in order to make personal assistance that automate mundane tasks, and we see developers using hugging face to implement open source into hundreds thousands of projects. Overall, it feels like AI has landed and we've moved out of hype and into reality.
Well, was any of the valuations of which you were writing the checks feeling a little hype?
No doubt, valuations can be very high in the AI space. We've tried to stick with fundamentals, and one of the things that we've found really helpful is a lot of AI builders, especially the ones we work with, appreciate the fact that building an AI company is building a company.
So they look to Sequoia and they look at the track record and they realize a Sequoia backed company is four times more likely to go from seed to Series A than if it weren't backed by Sequoia, it's twice as likely to go from A to Series B.
Why do I say this?
The point is that an AI company is a company, and so the fundamentals of company building that we've learned over the past many decades with AI companies and Internet companies and cloud companies and mobile companies are translating very well. And that's led to a lot of our founders realizing the COO advantage and valuations that are much more reasonable within the ones that there's an interesting triangle here. We
started the week with open AI's developers conference. You Sequoia, we're an earlier investor in open ai, and a big part of their pitch was kind of creates your economy. In other words, they're going to start offering stuff that will help others build an AI company. Is that your assessment as well? Yes, So we've been investors in open ai for a while. We invested back in twenty twenty one,
before this amazing movement really started to inflect. And what they've done exceptionally well is leaning too the developer, per your point ed, So they understand that the creator has that power, and yes they can actually augment it with this type of staff that you're describing, but they still want to take that and put the power in the hands of the creator, which is another decades long trend. So we've always known the developer the creator has been key.
This harkens back to Stripe, which is the developer tools company for payment a decade ago, Mango dB right here in New York, developer Tools Company for databases, or even Unity, the developer tools companies for game creation. One of the things that open ai has nailed is focusing on the developer, focusing on the creator and helping that creator, including with these assistants and services.
I'm interested you mentioned us, for example, a way in which we can all suddenly be augmented basically with our own very helpful chatbot.
But how did GPTs.
That open eye is going to be suddenly making more abundant Not just eat into that mote, how do you decide which one to mac?
Yes, so GPTs are going to be I think a wonderful addition to the ecosystem. And as I see it, as we see it, the world is not going to be a zero sum game in AI. All boats are rising because of this amazing wave. You can do so much more with so much less.
But not all value is going to accrue to set to some of the ones that you've backed. I mean, not all of these ones are going to survive the competition coming from the Juggernauts.
No doubt.
And what we've learned time and again at Sequoia and these technology innovations is that it's survival of the most nimble.
Well, the big concentrative open AI is that they can stomach the mega compute costs, the talent costs, so they end up being the strongest and any game in town. Is that a fair argument. I don't think it's going to play out that way. And first of all, we love open air. We want them to succeed and continue to perform. They've actually contributed a lot to the AI ecosystem. But we're in the middle of a decade's long AI revolution.
This is a point in time. Let's think back to the three things that make up AI. Its algorithms, of course, written by people, it's compute, and its data. In the early two thousands, we saw the first sparks and that was in the form of predictive AI that powers everything from your Facebook news feed to your Netflix recommendations. Then more compute, more data. We had the perceptive AI revolution.
That's everything from computer vision to self driving cars, which are now commercially available on the streets of San Francisco and amazing. This wave, the generative AI wave, is just more data, better algorithms, more compute, and we're going to
continue to go from here. It's going to be video, it's going to be multimodal, which they're investing into as well, and it's going to be AI controlling complex systems just another point in time, and our job is to focus on the underdog so that they can actually come in and usher in the next wave of AI in what's going to be many more decades of innovation.
Many would say, actually the worker is the underdog right now, so we'll see how that has implications on the labor for will have to get you back for another conversation on that. SEQUEA Capital partner Constantine Muler always great to have him right here in New York can discuss all these things.
Okay.
After the runaway success of the animated Super Mario Bros. Film, Nintendo is planning a live action movie based on the legend of Zelda video game series. The company announces that Too Analysts is planned to release one movie every year, building on the success of Mario, which generated one point thirty six billion dollars in global ticket sales. Nintendo said it will produce the Selda picture with Arad Productions, which has also worked in some of the Marvel film's cara.
Meanwhile, sticking with video games, said shares a take two interactive surging today on news at the company look it's gearing up to announce the Resa Grand Theft Auto six age. I know that you're one interesting title exactly, completely a wild title for them. But let's get to the water behind the scoop. Bloomberg's Jason, Jason, we were anticipating. We're excited for what's going to be released in December, the teasers to come. How important is this for the world of game land?
Yeah, it's you, muongus.
I think I don't even think people fathom just how big a release this is going to be. The previous game, GRANDT five has sold one hundred eighty five million copies, which, just to put that in perspective, the entirety of the Assassin's creat series from Ubisoft, the Umungas series that has been a cornerstone of a major video game publisher, has sold two hundred million copies. GTA five is sold once again one hundred eighty five It is the second best
selling game of all time, second to only Minecraft. But Minecraft has kind of an unfair advantage because it's on phones. GTA is just on PC and consoles, so it's pretty mind boggling.
When I think about GTA, I think about the fan base, right, it's an intense global fan base. What can you tell that fan base based on your reporting to expect from GTA six.
Yeah, so we've been reporting a bloomberg on this game for a little while. Now we know it is set in a fictionalized version of Miami. We know it is going to have two protagonists, one male and one female. This is the first time in quite a long time that Rockstar has had a female protagonist, so that I think is going to be exciting. It'll offer a different perspective than your average kind of male centric Rockstar game. And yeah, it's really exciting. I mean, I'm very excited
to check it out. I'm also excited about the fact that, as we've also reported, rock Star has really done a lot of work and trying to improve their culture over
the last few years. They came under some controversy during the release of their last game, Red Dead Redemption two over their work life balance and the kind of tough hours that they put their workers through, and it sounds like from what I'm hearing inside the company, things have really been getting better there, and we'll have to see if that remains the case throughout the final year or two of development on GTA six.
Jason just terrific reporting and Carrie. Twenty twenty three has been a year about video games, video games and films.
Video games, What are you doing at the moment?
I'm playing right now Spider Man two. That's great.
Ah, we like it when he's a superhero. I meanwhile, that does it. From this edition of Bloombag Technology.
Check out the pod wherever you get yours from New York City. This is Bloomberg Technology.