From Marhart of We're Innovation, Money and Power Collie in Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
And Caroline Heinder Bloomberg's world headquarters in New York.
And I'm d Ludlow live at CS Las Vegas. This is Bloomberg Technology.
Coming up on the show.
Hackers target the SEC's X account to falsely announce approval of the Bitcoin spot. ETF will break down what happened and what we can expect regarding today's deadline. Plus Hewlett Packard Enterprises while it announces plans to buy Juniper Networks of fourteen billion dollars. We are going to discuss the deal with the hpeco, Antonio Nairing and the CS coverage it continues. We sit down in the CEO's of Zeeman's
Panasonics US Arms as a tech com. Difference is really the life and soul of technology coverage as.
It stands right now.
We go out to you Ed in Las Vegas right now and well, the wealth of discussion around autos, the wealth of discussion around AI was clear to see yesterday. What do you seem being really adopted by the press, at the moment.
Do you know, I think day two this morning, certainly the new psychle is starting to play out here because you have everybody on the ground in high concentration from across these industries. You know, we've got that EV data for the last three months of twenty twenty three. There are lots of EV companies here that are worried about the demand picture. We'll have a conversation with Panasonic later in the show about that, but also Amazon and Twitch
News about layoffs. That is a point of discussion for obvious reasons.
Yeah, the ongoing concern about whether technology valuations are right. Just think about the RBC note coming out from Lori Calvacina today just saying, look, valuations too high. They're cutting their overall recommendation.
On US tech.
Is that a bit of a downdraft that's happening in cees.
Yeah, Yeah, it's interesting. We kicked off this week with that Nvidio news right on their AI graphics chips for PC and that put the stock to a fresh record.
I know it's continued to kind of train in a narrow range since, but there are people that think that in video is still kind of cheap and what we're seeing here in the news cycle as companies say, Okay, this is how we're actually going to use AI in our business internally, and we want you to assign some more value to our companies because the AI is going
to boost our margins and increase our sales conversion. I'll dig a bit more into that later in the show, but I put a newsletter out on that point this morning, and that really genuinely is the conversation.
And it's going to be a conversation we have with the HPECO because of course a lot of that is about aligning his business for the AI focus as well. But we have to get into that news regarding the SEC's Bitcoin ETF decision and well the hack. Of course, it took place at about four pm.
Yesterday in New York time. Have an on X joining us now as blue motion early basecond just regarding the X debarcle.
Now many sort of pointing fingers. Ultimately, it seemed to be a lack of double authentication to factor authentication, do not use your phone as your second form of authentication? Off thatous indeed, what was happening. But what did you make of the market reaction? Because everyone on too, paces gotta signed off.
Yeah, it was a.
Real time test of what would happen if the SEC does approve a bitcoin ETF. You saw the price spike to almost forty eight thousand dollars, but when the news was reversed, we have seen a very sluggish movement here, even though many market participants, including many of the issuers, believe that they still will get that approval today and so you have seen the price crash back down by more than two thousand dollars per bitcoin. You have seen a crash down closer to forty five thousand.
At its low.
It's kind of forty five five hundred giver take at the moment, does it get back to that nearly forty eight thousand dollars high? And in the coming days if we do get an approval and more trading, then what does it mean for.
Price action after that?
There are a lot of investors, as you know, Caroline, that believe that maybe this is priced to perfection. We've seen the best in terms of movement, in terms of what an SEC could bring, or an SEC approval for a spot bitcoin at ETF could bring to the table for bitcoin.
The likes of those that are offering the ETFs, and we know that there seems to be a race to the bottom in terms of management fees. It's going to be incredibly cheap to be able to build this into your overall portfolio.
But are they worried by these sorts of full starts. Are they worried that further.
Dense desire to be getting into the speculative asset class.
Well, it's interesting the less of the concern was around the ETF itself and the Bitcoin ETF approval, and more concern was around the SEC and its management processes here. As you said earlier, X had said that this was not a hack. It was because of a compromise individual stealing a phone number associated with the SEC account. I think it's interesting that Gary Goinsler himself use the word
compromise rather than hack. Now, remember there are a lot of lawmakers here attacking the SEC as well as Gary Gainsler, Republican lawmakers in p particular, concerned about how the SEC is managing this process. I would also say that Coinbase as executives. I don't know if you guys have seen this, There are online saying that they could be a part of the solution.
Here.
The SEC and Coinbase have been in their own disputes for the last couple of months, and so the SEC's ability to oversee the crypto industry has certainly long been in question, and now there are more eyes on that after the SEC snafu last.
Night that did seem to rub salt into a rather gaping open wound for the SEC. We thank you Shnani basec of course, just to reiterate that my husband is
a director over at Coinbase. Meanwhile, we want to be talking about what's happening in the broader cryptosphere, what all of this means if we do indeed the sign off for a spot bitcoin etf as soon as today should like Jawuen Putrez with us, founder and managing partner of Future Perfect Ventures, it's an early stage VC firm focusing on blockchain technology, on crypto assets, on AI, on human computer interaction, all.
Of the exciting parts of the tech sphere.
Jalick, what did you alterly think of this almost test case of the price reaction to the sign off, because how much.
Is baked in?
How much of this exuberance is already sort of there and within the forty eight thousand price point, well, it's.
Great to be with you again. And I think this has been an amazing twenty four hours, very apropos for crypto, and I do say if we look at the price action, it's been.
With a pretty narrow range.
And so I think there's still a lot of pent up energy deniand for the asset, what.
Does it ultimately mean for crypto more broadly? There has been a lot of focus therefore on the og of the space bitcoin and it's been perhaps dragging away some of the liquidity and ultimately volumes from old coins. But you're busy thinking about business models within crypto, is there exuberance into.
Building into other parts? I'm thinking of Ether Solana.
Yeah, So if you look at eth, Eth has appreciated quite a bit over the last twenty four hours, specially since the hack, and I think there's an expectation or a viewpoint that the SEC will continue to approve select crypto assets at ETFs and that allows a lot more retail investors, a lot more institutions to custody feel comfortable of owning these assets.
So if we take a step back.
And these are new financial asset classes, but also it's all driven by technology and what's been enabled by the increase.
In processing power.
We've had a lot of it works in TANEM with artificial intelligence. So all of these technologies are now being enabled in real time, and it's a new financial system that will not only be built on these rails but also allow more access for people to own these these assets. I have so many people around the world that I've talked to over the last ten years since I latch Future Perfect Ventures who have asked, how do I buy bitcoin? And you know, they don't know that you don't have
to buy a whole bitcoin. They don't know how to custody bitcoin. And this is on a worldwide basis. So this ETF approval, this bitcoin ETF approval, is a first step to allow a more mass ownership of the self sovereign assets. And I think this is certainly a watershed moment in terms of not only the financial elements of this, but the technology behind these assets.
And see if it happens.
Celec jaman Putra, we want to thank you so much, founder managing partner of Future Perfect Ventures.
We thank you so much.
On Tuesday, hpe it announced it has agreed to buy Juniper Networks for fourteen billion dollars in a move to will expand its presence in networking in particular. But there is also some skepticism being raised by Wall Street, as we saw with the price action hpecu an Tonio Andry us now to talk us through the reasoning. What attracted you to Juniper Networks Why focusing data centers expansion, Yes, networking cloud networking presence expansion, Yes, any worry about overlap here?
Antonio, Well, good afternoon, Karen, Thanks for having me. Yes, there was an exciting day for HP our shareholders, our customers, and our employees. We are reshaping the entire networking industry by combining two amazing companies with amazing complementary assets to capture the inflection point we see today, particularly with the AI.
So we believe this is going to turbocharge the strategy that I have put in place five years ago and we have been executing with discipline, and then ultimately give us the relevancy in this massive inflection point. And Jenniber brings to us the complementary capabilities we didn't have across
the networking portfolio. But think about it this way, we are actually creating a new core business for Hulet packer Enterprise, which will represent more than a third of the company revenues and most importantly, almost sixty percent of the company profit. And we will address a market that's growing, which represent approximately one hundred and eighteen billion dollars. And this acquisition, this proposed acquisition, is going to be a creative post
closed day one. So it is an exciting time for everyone. I think the market needs to understand it, but they will realize that we're going to challenge the twenty years incumbency with modern architectures and drive better solutions for our customers.
Let's talk about those solutions. Let's talk about that modern focus. Because Cisco basically is the gorilla.
In the room that we're talking about, and Juniper Networks isn't a new asset, as an older one that has failed to gain that market share from some of these competitors in the switching and the networking space.
Why with you will it be different?
Yeah, well, I think.
We need to understand their business a little bit more in depth.
Right.
So, obviously, when you think about the Internet area, Jurniper today powers a lot of the Internet connectivity and so that's an enormous foundation when we think about the enterprise business. They have done a fantastic job driving what I call the AI driven disruption. Obviously have a power Floud platform with MISSED. We have an amazing platform with HP Aruba Networking.
Both are complementary because we have the scale, the rich from a technology and go to market perspective, but also they have been innovating what I call the next generation of AI driven secure networking. So we're going to bring both together and deliver a better solution for customers. On the other side, you need to understand that also bring an amazing silicon easy capabilities for high performance networking. We already in HP have been focused on AI interconnect fabric.
This will turbo charge our strategy because we have the market leader in supercomputing and when you talk about AI and talk about large language model, you talk about foundation. Whether it's weather or whether it is other type of applications, you need high performance silicon and the core foundation of that is the network. We're going to create that network solution.
We are going to add the data layer on top of that, and we're going to deliver this secure, unified experience to our amazing platform college Big grey Lake.
Sticking with the ultimate technology and the profitability of Antonio. The margin difference that we see within the networking businesses.
GUS is lower than yours. How do you bring that up?
Is that about ensuring that you're within the AI sphere, you're being able to charge more for what you're providing.
Actually, Helly, you have to look at two levels of margin. You have to look at the gross margin level and have super high gross margin level because of the entire ownership of the stack from silicon to infrastructure to software, similar to what we do in campus and branch. But we're going to bring to them the efficiency in order to drive the operative margin leverage by reducing cost the ability to go and execute. So we believe the first
step is the cost synergies. That's why the synergy costs more than payoff for the capital that we are taking to pay for this transaction. And then on top of that, you're going to have the revenue synergies, a higher gross margin. The ultimate to the scale of our reach will drive better operating margins for our shareholders and that will translate into a free cash flow because remember this transaction is a creative day one for both a non gap EPs and free cash flow.
Basis we want to remind of blingbag TV and radio audiences. We are sat down with the hpeco Antonio and Arian. You're talking about that cost discipline. Where do the cost come out?
Is it people? Is it jobs?
The cost actually is many things. To be fair, I mean, the biggest part will be in the GNA side. You know, HPE and my team had had a tremendous track record in driving operating leverage across the company. When I became CEO of HPE, our non gap earning pressure was ninety six cents. We exit twenty twenty three to more than two dollars and twelve cents, and a lot of that was gross margin expansion to Pivotal portfolio, which this transaction
turbo chargers. Right, we can talk about gross margin, higher growth areas and then reducing the cost to run the business through automation and efficiencies, so that GNA portion would
be a huge booster to the Juniper operating margin. And remember also we're going to give them access to capability they couldn't deliver themselves in terms of as a service model, cloud scale and last monel list that go to market each has a crown jewel which is a go to market reach everywhere in the world, one hundred and seventy two countries, a scale they couldn't imagine themselves.
Antonio, we've got a minute left. Fourteen billion dollars in cash is a lot of money. What about the buybacks? What about the dividends?
What about how else.
You're able to pay back when you've got a heavier debt looad.
Well, first of all, this transaction is thirteen point six billion dollars and not people like to run things up, but you know, we are committed a number one, to maintain our credit rating, which is very important to us, and we believe that's absolutely doable. Number two, we are maintaining the share by back commitment we give the security Analyst meeting in October, and the dividends, which is our
core component of our return capital return to shareholders. And then over the next two years close closing, we're going to return to two times leverage on not ebita and pay down the death And one component that paid down the dead is obviously the proceeds from our HTREC divestors in China, which is proceeded very well, and obviously the synergies we're going to drive through the free cash flow generation on both the Juniper side and on obviously on
the HP side. So that's why when I think about the shareholders, this is a no brainer in many ways because it's the best use of cash to drive long term sustainable profit growth and expansion of owners pressure and free cush flow which will actually resolve in a better term capital pusherholder all the time.
Antonio and Narry Great has some time with you, the HPE CEO.
This is Bloomberg.
Welcome back to cs Las Vegas, where it is AI everything. But it's not just about the software component or devices. Also a lot of the infrastructure and platform providers getting in on the actor as well. We're joined by Siemens US CEO Barbara Humpton, and your company is positioning itself at lots of different layers of what is happening in artificial intelligence. The mainstay of that relationship with both AWUS and Microsoft, the two kind of cloud leaders in the space.
Just explain what you're doing.
Yeah, here's what's going on these days.
If the last decade or two was about the Internet of people, this decade for sure is about the Internet of things and Semens has deep domain knowledge. Now you think about all the classic tech companies who've worked in the fields of AI bringing this to bear, and others like in Nvidia, who are bringing high processing power into the field. We're partnering with companies who have those superpowers and focusing those technologies.
On the domains we understand.
So well, yeah, let's go seed AWS component, because what you're effectively saying is you're taking one of your technology platforms and marrying it with Bedrock, which we've covered on this program deeply for a while. Now, how does it work?
Yeah, So think about the need for people to embed AI programs into their operations with AWS components, AI components now with Siemen's Low Code mendix normal people like us.
We're democratizing technology.
We have the ability to use point and click, very intuitive interfaces to put together our own programs.
And Microsoft is a part of that as well. What is the difference in the relationships.
Yeah, they've got slightly different focus areas.
With Microsoft, we recently announced the Industrial Copilot. Now, imagine you want to reprogram the controls that you have in a manufacturing environment. You now have the ability with the Industrial Copilot to actually interface with natural language to write the programs so now I really think what we're going to be able to do is bring more and more people into the fields of engineering.
Let me tell you about one more Sony.
Sony just announced their exclusive arrangement with US, working with Siemens Software through the Accelerator platform, creating an industrial engineering VR headset. We're bringing the industrial metaverse to life. And everybody has talked about what's the true value of the metaverse?
Well, here is the proof point.
The ability for engineers to actually meet in a common area from wherever and to use the intuitive interfaces that they know from gaming in order to interact and create develop new things.
I want to bring it back to the real world. Rolandbush, the global CEO, spoke to us last year when you announced a more than five hundred million dollar infrastructure investment in the US. The idea is that you want to be a part of the supply chain for the data center providers, the semiconductor supply chain as well. What is it that you can give them? How are you helping them?
So Siemens creates the technology that combines the real and the digital world, all those things that sit right at the edge. And what does it take to bring AI into the world. We need data centers capable of handling that. How do you build data centers? It requires a ton of electricity, so the electrical switch gear that powers those data centers. Then turn it around, how do you embed what's being developed into the technology we have in the
industrial space. So that five hundred million dollar investment has actually put new switch gear manufacturing in Texas and it's put new rail manufacturing in North Carolina.
I know you've been meeting with a number of government officials while you've been here on that investment. Specifically, how big a factor was the IRA convincing Semens that this was a good project.
What Semens has seen is that customers everywhere are choosing to come to the US and invest. You've seen the data on the Chips and Science Act. Fifty two billion dollars of government investment, that's a down payment. So far, well over two hundred and fifty billion have already been committed by the private sector.
Which Semens divisions are going to benefit the most from this AI boom. And is there anything missing and I'm talking M and A that you've got to go shopping for.
Oh, this is the most exciting sector in tech today.
Think about it. You know, everyone has thought about.
Industry and infrastructure is being relatively disconnected, relatively analog.
All of that is becoming digital.
We build those common tools that today apply to industry, infrastructure, transportation, healthcare. Investors all be asking what else could this do? How do we bring value into.
The real world?
Siemens usco Barbara Humpton here at CES All.
The EV names are seeing some weakness today, and this is we see some of those sales data coming out from Cox Automotive showing that we've got a third straight well sequential decline and growth area for EV sales just one point five percent, and or there are thereabouts of growth that we saw in the last three months of last year, way off the fifteen percent we saw on Q two.
Why they're slowing. Let's get over to ed with someone who'll know.
Caroline here at CES Las Vegas. EV is a segment is a big topic of conversation. But that data from Cox about demand hearing the breaks in the final three months of twenty twenty three, that is what people are talking about as well. We've got a great conversation coming out Panasonic North America CEO Meghan Young onon Lee so Caroline was referencing this Cox Automotive data. You know, low
single digit growth final three months. But basically there's a feeling that that early adopter EV demand has been and gone, and so the broader market is pulling back a little bit. Through the lens of Panasonic is a key battery supplier, what do you see?
We don't see that way at all, And it's a long commitment. We don't want to get too surprised or intimidated by the short term data. We're still very committed and our operation in Reno that's been there for about ten years, and our new factory that we're building in Kansas, we're still going bullish and we're looking forward to the production in early next year twenty twenty five.
I have many questions about Kansas City. Our audience wanted to know about that when I said on social media, you're coming. But first let me ask about Tesla specifically, because it's the market incumbent. So it hit one point eight million vehicles in twenty twenty three, it has a fifty percent annual growth rate target each year. How do you view Tesla specifically, because you probably have the best lenses.
Supply, so we have a long term partnership with Tesla, and it's still strong. But Tesla is not the only partner that we're seeking, and we want to diversify and really make the EV market in general stronger and sustainable.
Kansas City, it is a g enormous factory. You are hoping to get into production five early next year. Okay, how's that going, Oh, it's going great.
So the still work. It's about thirty percent done. We have about one hundred plus people already working there and we have about six hundred and fifty construction workers working every day. I was there a few months ago and it's massive. It's very impressive, and we will have about four thousand employees working there once it's in production.
And to be prepared for.
That, we're partnering with local community colleges to make.
Sure if you're training purpose training, and it's.
A wonderful opportunity for the community too, that the students can be prepared and have a job waiting for them and there's a long term career, and we want to partner with the workers and the employees who we can work a long term.
You said, when you go into production, what is it that Kansas City is going to be doing and how is it different from Reno.
Kansas The local government and entire business development community has been really strong a partnership since the very beginning, since we started the communication.
The location was perfect.
Kansas provides a skilled workforce already and we're very hopeful about that and it's a wonderful partnership just all around to work with.
But my question is very simple, and what will it make you know? What is the product that Panasonic will manufacture in Kansas City? Oh?
Oh, it's the EV battery and any twenty okay, sorry, actually twenty one, Yeah, twenty one EV batteries, the cylinder goal leave them.
I on EV batteries.
I want to get to AI, but the final and EV batteries. Could I only get speech to you once a year?
Right?
Forty six eighty is coming out of Japan right now? How is that going? And what is the future for forty six eighty in the United States?
So we're very bolish about the technology. There's a lot that for six can do compared to twenty one model, but there is a strong demand and we're not slowing down.
On the deficiencies.
Improving the deficiencies of twenty one either, so it's a parallel path and we strongly about both technology.
The famous CS I think you might agree is AI everything. It's interesting in Panasonic that you are more focused on the use of AI internally as a technology is part of the production process and supply chain. What does that mean for you?
AI is definitely big here.
I was overwhelmed how everyone is talking about AI.
But if we think about.
It, AI has been around and what we call smart factory is a strong part of what we do for the operation in Kansas, and we know but also in other areas too, so smart factory we're leveraging generative generative AI to make sure that we can make collective decisions, real time decision and make the work more effective but at the same time safer.
Your technology partners on this include Palenteer, which is an interesting data relationship, and AWS, which has a strong presence here. What are you doing with those two companies in particular?
And we're making sure that the smart factory and making the operation efficient and safe is the focus and we're really excited about the partnership.
You've been coming to CES a little while. What is your read speaking to customers, government officials, people, you bump into on the showroom floor about twenty twenty four. You know what is the Megan Young wrongly kind of like, here's what I think is going to happen this year, but relevant to your world, right, which includes everything from consumer electronics, t EV, battery.
Right right, CTA. We're partnering with CTA this year.
We're fifty first year of participation nonstock and in North America we pivoted from Summer Electronics company.
We're strong still very strong.
Consumer electronics space, or we vertically integrated the technology into.
All the other B to B areas. We are very happy with the.
Evolution and partnership that we're working with CTA so that it's not just consumer electronics products and technology, but we're in other B to B solutions the area, including EV and it's wonderful to be here that the platform is expanding and there's a lot more potential in the future. And for example, we have a device car in our book that shows all the technology that we have that we're leveraging in automotive.
So I hope you come and take.
A look at it. Yeah, I think I'm right in saying you just bumped into your friend Barbara Humpton Siemens on the staircase. We talked about the inflation reduction ECTRET and the supportive regulatory environment. How do you view that The availability of funding from government and to build in the US.
So financial It makes a lot of sense.
For us, and we're very grateful for the government for making that push. We talked about We've been in Reno for ten years, so we have been committed for that long term and it's wonderful for us to talk about the US government back up to our headquarters in Japan that we feel like we have the validation from the government about the commitment and investment and if it was great and IRA has been wonderful for us to go US faster and better.
Began me young onely, Panasonic North America CEO here at ces Las Vegas. Caroline back to you.
Just such deep dive conversations that we love it. Keep it coming. Meanwhile, for you, coming up, we're going to be talking the state of artificial intelligence and whether or not we're in.
An AI bubble as a Chan, co founder and managing partner of.
FPV Ventures joins us next to discuss this is blue meg technology.
Time.
Now have Vic spotlight after a banner year for AI fundraising and pretty tough year for absolutely everyone else. What can we expect from AI the bursioning technology in twenty twenty four for fundraising for valuations?
Joining us now Wesley Chan, co.
Founder and managing partner over at FPV Ventures, and what we like contrarians And it feels as though, Wesie, perhaps you're feeling a bit contrarian on AI valuations right now.
Yeah.
It's one of those things where we're just watching it grow like crazy and we're sort of keeping out just a bit to let the valuations fall back down the earth. You know, we are huge fans of AI, have been investing in AI since you know, I started my career at Google Ventures almost fifteen years ago. But you know, it's one of those things where we're seeing a lot of similarities to where the crypto the crypto hype was
going on in the dot com boom. So you know, we want to be careful about this given you know, the charities and the children's hospital money that we work with and manage.
So the portfolio companies that you do have that stand out with heavy value euations, your Decacorns, Unicorns, Canva, guild. Have these companies have you talked to the founders about not having to feel they must bolt on AI in some sort of lexicon fashion, or indeed.
Are they already into weaving it within the business and just don't need to shout about it in quite the way that others are.
Yeah.
You know, Camber, for example, launched its magic features where you can type in an amazing sort of thing that comes out of your mind, I want to make a presentation about Bloomberg, for example, and then they use AI
to help you auto generate a lot of it. So they're using it, but they're doing it quietly and there are features that benefit users versus you know, sort of saying we're just doing AI for the sake of doing AI, which you know, a lot of companies today that are getting these hefty evaluations are getting you know, they're not hyping it up, they're not going crazy about it, but you know they're using it just to make the make the product a lot easier to use. That's the that's
really about the problems of AI. It just makes thing so much easier and so much more automated, and so much more you know, as Cheva calls it, magical. So we're seeing enterprise adopt AI a lot because of the power and the utility of the of the of the that it brings to the table. But we're not just investing in companies because they do AI for the sake of it, which is what's what we're seeing a lot in. These hefty valuations are happening in the venture market right now.
So where are you investing? What is it that makes a founder stand out for you?
Well, we invest in mission driven founders, folks like Larry and Sergei where I had a fifteen year career at Google and got to work you know, personally with Sergey as part of his as his chief of staff for five of those years. And you know, they have these amazing views on what the world is. We call them unique insights, and they basically say, if we do what we're getting to go do, the world is going to change. I mean, I still remember Sergi giving me a one
hundred year plan, right. And if you look at Cliff and Mill at CANBA, where I've worked with them for almost ten years, you know everybody thought Cliff and Mill in Australia were crazy. They were the founders of Canva and you know, ten years later, you know almost every person in the thirty five is using Canva's products to help design and build presentations or their homework or their
or their work. And so you know, they have one hundred year plans and they have a vision of the world that changes of how the world changes when they when they launched product and everything goes, you know, to where they want to build.
I'm sure when you're a mission driven founder often you're one that wants to remain independent, that wants to see the full legacy of your business. So ultimately IPO. What was interesting A lazy association was made between Figma and Canva, for example, but that was an interesting deal that then didn't happen, an evaluation that was skyrocketing for a company like Sigma. How does Canvas see How do you see an exit for Canva?
I think Canva is going to probably likely IPO. That's really up to Cliff and Mel. But it's one of those companies where you know, Cliff and Mel really want to go build a product that everybody wants to use in the world changes. It's not about AI, It's about how do I make my life better?
Right?
You know, kids are using it for their homework so they can collaborate. Adults are using it to create presentations or marketing materials for what they need to do from work, and it's just ubiquitous, right, And I think when you build something that useful, you know, the world changes. I mean it was the same way at Google. At the beginning. Everybody was like, oh, that's kind of cute. It's a search engine of a blank white page and with two
buttons on it. And today Google's ubiquitous for search, right, the world has changed when you build something that's better than everyone else and that makes the user experience so much better. I think that's what many of the founders we invest in truly understand.
There has been one or two kids party invitations designed Viacanva in my household.
Meanwhile, though I'm interested in Wesley and.
STA ultimately, what the rest of the market has to look like right now if you do see eventually an IPO, which of course has to be what the founders want as well.
Are any of them going to happen in twenty twenty four.
You know a lot of bankers have told me it might reopen at the end of twenty twenty four, and you know, just being on ten plus boards. We have this conversation a lot in the boardroom, and I think that it's not going to happen this year. The ipobole market for the for the most part, has shut down.
There's not a lot of people that want to go test the market or test the waters unless they really have to there's some artificial reason like their employee stock options, you know, coming to fruition or something of that sort where they have to go to IPO. And you know, we've seen the last couple of some top companies like Instacart and Klavio that unfortunately didn't perform as well. So I think most of the top companies are just waiting
for IPO in twenty twenty five or later. So that twenty twenty four it's gonna be a brutal year for IPO and that's a challenge. And because of that, the a lot of growth investors don't see returns or don't see exits for their companies and so they're not investing in they're not deploying capital, and so it's going to be a brutal year for both venture for book growth and.
For IPOs and maybe to be able to pick some winners when everyone else is in laying down checks. Wesley, What's interesting is at the start of the conversation you sort of associated the AI hype with or some of the boom and the bus that we've seen and of.
Late crypto being one of them.
Well, at the moment, everyone's kind of exuberant around crypto once again as we anticipate the SEC signing off on the spot, Bitcoin ETF What do you make of the space at the moment? Are you getting any pitches? Is there ever something that you are going to be touching?
You know, there's a really funny observation. I've had a lot of people that had crypto venture funds have become AI or JENNAI venture funds. At the moment, it's so sort of funny watching that transition. You know, I think we see highs and bitcoin and what was it, forty eight thousand US dollars at the beginning of the year, But you know, there are a lot of people just moving money into things that they think, you know, have
a have an inflationary uh an inflationary hold. Just given some of these crazy currency transitions that we're seeing in country like Argentina or maybe even China. But a lot of it's driven by speculation still, and you know, I'm just very very careful. I don't invest in the hype or invest in the speculation because at some point that bubble pops. We sawt in dot com Boom, we saw it in grocery delivery, we saw it in scooters, we saw it at crypto you know, uh, you know, a
couple a couple of years back. So we're just very very careful and picking companies that have the ability to stand the test of time and like Canada, just compound and grow and create products that people want and that people want to pay for and then grow because of that. You know, those are those are some of the companies that have done best by me. I saw it first and at Google, and then I see it first time now with Canva Leslie.
It's always great catching out with you. Thank you, No what a pleasure.
Thank Yousi Chan of FPV Ventures.
I think it's still early days in terms of what are the applications that are going to be really kill or of the smartphones. The hardware is enabled now, so you have capability now inside the smartphone that can run these AI algorithms. But for example, two areas that people really care about are latency and privacy.
I'm CEO Rene Haas there on the implementation the use of AI with their products, of course, is speaking to us from the CEES event in Las Vegas.
Time now for.
More talking tech.
First up global chips. They rose for the first time more than a year. Data from Semiconductor Industry Association sought. Worldwide revenue grew to forty eight billion dollars in November, a five point three percent increase from the year earlier. Now, the strong sales strength is the latest indication of a possible rebound in emerging tech I. Meanwhile, data analysis firm pallenteer It says they see huge demand in their new AI products from Israel ever since the start of their
war with Hummas on October seventh. Now, Israel as acknowledged they've used AI based systems in an effort to aid operations in identifying targets and airstrikes. Plenteer is set to hold a board meeting in Tel Aviv for the first time.
As a gesture of solidarity with Israel.
Meanwhile, Israel's Competition Authority says it reached an agreement with Meta after the company failed to report to acquisitions and the social and media John is set to pay six post six five million dollars in fines relating to the purchases of Redkick in twenty eighteen and Service Front in twenty nineteen.
And Amazon they're seeing some.
Layoffs once again, this time the company slashing hundreds from its Prime Video and Studios unit, continuing the trend that well began in late twenty twenty two. And it's not just their twitch in particular, seeing hundreds of jobs on the line. Matt Day now joins us for more. And I mean, are we to be surprised by this that we're curtailing the area of production in particular.
No, I don't think so, especially as you look around entertainment. Just a ton of pain right now in the streaming services, and folks kind of reassessing, you know, how many bodies are going to need for the demand for just the ton of streaming content out there. Amazon's studio's boss, Mike Hopkins mentioned they've planned discontinue you some things over the
course these layoffs. They didn't specify what exactly those were, but really just the latest in what looks like cuts, you know, all over the place at Amazon that they petered out, not you know, tens of thousands of people the way it was a year ago.
But it seems to be.
Ongoing, and to be fair, I mean it's ongoing across production elsewhere. I mean, we've seen John Cops at Disney, We've seen people couldtail on their spending. Netflix is held, They're spending steady in terms of new content production. But what's interesting is that it comes at the same time as Amazon seems to be trying to right size Twitch as well. What does that say about Twitch's future?
Twitch has always been a bit of a weird one for Amazon. Just a huge audience of people who you know, largely are watching video game streaming. But that's really hard to monetize, right They're very expensively beaming video content around the world, but it's not a not a great user base for ads. They tend to balk when suddenly see a role for Coke in the middle of a video
game stream. So definitely the acknowledgment that Amazon, you know, just about ten years after buying Twitch, is still struggling to make the thing profitable.
Do you think we are done? Is this just the future? Like some smaller rolling job cuts.
It's really hard to say.
I think one thing if you talk to Amazon employees, they'll point out is the company never said all clear, so to speak, after their big job cuts of two falls ago and last spring, and then they just they just keep stacking up in a notion of the two. This week, you know, they shut down AMP the music service podcast service rather of their live audio I suppose is the correct term. And more cuts on the devices group in Alexa last year as well, So they just
kind of kind of keep coming. It sure looks like a drum beat for a company that for more than a decade didn't do that at all, and that's.
Tough for morale.
Matt Day, thank you so much for joining us on the latest out of Amazon. Meanwhile, look that does it for this edition of Bloomberg Technology. Do not forget to check out our podcast find on the terminal, Apple Sportify, iHeart wherever you get your content when it comes to audio, more on cs ACoM.
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