Silicon Valley Bank Fallout, a Rally in Chip Stocks and Calls for a Pause in Artificial Intelligence

What does it mean for Silicon Valley founders and vcs and more than a thousand tech heavyweight call for a pause on the artificial intelligence boom to implement safety protocols. We'll break down what's inside the petition, plus chip stocks getting a boost as analyst upgrade and video and Micron issues. An upbeat forecast will discuss what's driving momentum. But first let's going to take on the ARC. It's technology a

big driver. We're fully in risk on mosing out performance in the NASA one hundred, but the Philadelphia Semiconductor Index in particular. Why a pretty bullish outlook for the fiscal third quarter from Micron, which we'll get into later in the show. Yields also coming back a little bit of the US ten yere at three point six percent. Bitcoin kind of caught up in this risk on rally above twenty eight thousand. It's highest level in dollar terms since June of last year. Look, it's been a good run

for tech stocks in particular. Look at the NASA one hundred, very tech heavy index. We're heading for a pretty blockbusters quarter that's just gone. Of course, we're getting towards the end of the march, a few sessions left to go. As we bring up this Bloomberg terminal, please miss the director to visualize the point that I'm trying to make. Whether we continue that momentum is all about the FED.

Remember that Thursday core PCE the Fed's main measure that they're looking to that will answer a lot of questions in terms of the direction of travel for rates. That's the macro picture. Here's the micro Kitty Greyfer, New York. What you got, hi? Add why I have a lot green behind me. Let's start with Micron, like you said, issuing an upbeat outlook for the fiscal third quarter. Sales expected about three point nine billion dollars, that is above

the average analysts estimate. You could see Micron shares up about six percent almost six percent. Other chip stocks rising as well, including a video shares are hired by about two percent. You had Piper Sandler come out and raise their price target on this stock to three hundred dollars, so giving shares of boost. Moving on outside the chip space. Carnival also cruising today. They got an upgrade from Susquehanna ahead of get this wave season. Apparently that's when the

cruise industries offers discounted rates. I didn't know that. Pretty interesting. Paychecks also rising as well, up about five point seven percent or so. But let's talk about the banks, because that was the big story today. What happened in Europe overnight. You have Sergio or Mandi coming back as UBS CEO starting in early April to oversee that acquisition of credit. See in this chart behind me shows that in the eight days since that acquisition was announced, we've seen shares

rally getting another bounce today. Ed Katie gray Fell with the Movers will track those throughout the hour. Turning from UBS to the banking crisis here in the United States, you're going to be looking at live pictures of the House Financial Services Committee hearing day two of the Regulatory consideration of the biggest banking failure since the financial crisis.

Here with the details. Bloomberg's Katanga Johnson out in dc FED supervision Chair Michael Barr basically acknowledging for a second day that there were lapses in oversight, Right, Katanga, of what happened with Silicon Valley Bank, we'll be heard today. Yes, was Bar acknowledging that there was a lack of oversight, not just from his particular office at the fair, but even from the supervisors who were on the ground, who knew months before he was made aware of the issues.

And lawmakers on both sides of the hour. Will he drill down on the timing around when Barr was first alerted and how quickly he acted even once he learned of these lapses. You consider the questions from lawmakers right, senators yesterday, congressional representatives today. A lot of them focus on individual people, the pain that was suffered by depositors. You have to remember the customer based Katana, right, Many

of these were vench capitalists and startup founders. So we actually have any answers of kind of what the next step is, either to prevent this in the future or some sort of restitutions what happened a few weeks ago. Regulators are really mulling whether there might be a need for them to drill down on existing rules and perhaps potentially pushing lawmakers to consider new rules around whether they should be able to mitigate some of the risks of

this issue in the future. Bar in particular, really emphasize the fact that he's open to in reviewing his toolkit. Have regulators sort of were collaboratively in that way, but then also he's open to really having Congress or perhaps the government kind of bil the office really dig in to the ways in which the rule book can be enhanced.

All right, bloom bes Katanga Johnson out in DC. Thank you. Look, let's talk about what the SVB bankruptcy means for those depositors, start up founders, vench capitalists, tech businesses of all sizes and bringing Gregory Jermaine, Professor of law at Syracuse University and also the director of the Bankruptcy Clinic. First of all, professor,

welcome to the program. Your assessment of what you've heard over the last twenty four hours from both panels, Well, not very interesting, right, I mean, a lot of repetition of stuff we already knew a lot of political pasturing, but really no new information coming out of this of these hearings. The only thing i'd i'd say is that you know, every time someone asks an interesting question, the answers, well, our report is going to be out on May first.

So until we get the report on May first, I don't think we're going to learn a lot more about what was going on in the regulatory environment. Yes, so that was kind of my general overview of listening to you. A few hours of the testimony, we broke the news of what was happening on Silicon Valley Bank on this program the friday it collapsed and into the Monday, the discussion among venture capitalists was that they wanted a reincarnated

form of SVB to survive what ended up happening. Of course, his first Systems came in and took some of the deposit book, but not all of it. There were lots of questions in these hearings about why an outright savior

didn't come in that first weekend. What's your assessment of that this law happens very fast these days, you know, I mean the run on the bank, you know that took place over a couple of days and and and everybody's panicked and you know, and trying to get a new institution to come in, uh and take this over is not an easy and an easy task, especially because I think the full scope of you know, what their what their loan book looks like, and what it's worth

isn't known, and so the government kind of sold it with some backstops in place, uh to protect First citizens is the buyer um. So it's it's not easy to you know, to to to figure out what's going on in a huge institution like all of these large banks are today in such a short period of time and get someone to take it over. Well, here's the main point.

They wanted it to survive and reincarnated form in some sense it is you know, many vcs point to SVB being a spiritual Paul Silicon Valley literally that you know, the first institution to write a check or bank a founder when others would in what is the risk here with First Citizens taking on some of the books, Well, I think for citizens wants the business. I mean they're they're taking over the branches, They're they're going to keep the employees that have all the relationships and so you know,

I think they want to they want to keep it. Um, So my guess is that they're going to be working very hard over the next year or so to to try to shore up trust within the community. But you know, the handover is going to take a period of time and uh, and I expect they're going to be some bumps in the road for a short while as they as they ramp up to taking over all these assets and providing better supervision than Silicon Valley Bank did of

the situation. But yeah, well I just want to jump in, Hey, you are an expert in the field of bankruptcy. You've looked closely at the situation as it unfolded its Silicon Valley Bank. How do we fix it? What happened? How do we prevent it from happening again? Well, I don't think there's other than providing a government backstop against all deposits, which could be extremely expensive to the public. You know, there's there's always going to be the possibility of bank runs,

even just rumors. Banks are subject to, you know, rumors spreading so quickly that people get scared. Even we've had bank runs of ensured deposits, which you know makes no sense they're not at risk, but people get nervous because you know, they don't trust that they're going to be able to get their money out. And so the banking system is based on confidence, and when confidence breaks down, the system, the system is starts to starts to shake apart.

And so the government's real job here is to provide as much confidence as they can that the banking systems slovent. Gregory Jermaine of Syracuse University, thank you for your insight. We'll keep on tracking the story. Now, all of the TERMO in Silicon Valley maybe having a chilling effect on deals. Goldman Sachs just lost three partners in the investment bank who exiting the Wall Street firm amid a slump in

deal making specifically focused on tech. Wall Streets saw a hit to their compensation last year as that drop in deal making took its toll. Some Goldment banking partners face pay cuts of more than fifty percent. But these are three high profile bankers that Bloomboa's reporting have left really focused on the tech sector, and we'll continue to track

where they've gone. Onto time for talking tech first, CrowdStrike investing ten million dollars in abnormal Security, a startup that helps businesses cope with compromised emails after highlighting the attack method as a fast growing threats the largest amount of cash the cybersecurity firms ever funded through its venture arm, the CrowdStrike Falcon fun. The two companies also will work

together as part of a close partnership. Let's turn to Chips and Videos, seeing its price target raised that Piper Sandler from two seven five to three hundred dollars. The analyst they're saying the company has the ability to create new and lucrative market opportunities with its software footprint, which is still in the early stages of growth and adoption,

and rounding it out. Also with Micron receiving a price target upgrade at Susquehanna Financial, boosting its target from sixty five dollars to ninety dollars, the analysts saying they think the May orter represents the worst case operating losses, but believes the near to medium term risk raw profile's attractive given the updated price target. Now, let's stick with Micron giving an upbeat forecast for the fiscal third quarter, sending shares higher. Bloomboz and King on set with me in

San Francisco. This was interesting because what they're saying is our customers have been working through inventories, but there are signs that that kind of glots or downturned that people are calling it. There might be a different trajectory on the other side. Yeah, I think the way to sort of look at this, to frame this is things aren't going to get that much worse. You've got to bear in mind this is a company that is on course to have its worst ever net loss in terms of revenue.

It's half the size of where it was last year. So this isn't a victory parade by any stretch. But if you believe that the chip industry is on this long term growth path, then you're looking for points like this where things aren't going to get that much worse. The editors of Bloomberg Opinion wrote an editorial in the last twenty four hours about the Chips Act and the money that is being lined up from the public sector

to onshore manufacturing capacity in this country. The conclusion that they reach is that actually it's a plan that's racing towards failure. They talk about red tape, they talk about the time it actually takes to set up a manufacturing facility from scratch when it comes to chip fabrication. Ironically, when you spoke to the Micron CEO last night, he is kind of asking for the opposite to increase capacity. He's saying, we and our peers need to cut down

our production right now. Explain that one to us. Yeah, I mean there's a couple of really really important things at play here. The chip industry is as old as I am, which is pretty old. Right throughout its history, your words, economic forces have determined whether you build a plant, whether it makes sense to build a plant, whether you put capacity online. Now we've got government saying, hey, here's a check, build a plant here, that's what we want.

So the concern there is that we'll have this systemic overbuild. Micron was saying was a bit more short term, which is saying, look, we can all get back to profitability. We can all make money if we all up putting less to looking into the front of these production lines. That's a great idea, and it's certainly there some evidence

that that has happened. But really the sort of the thing that wasn't said directly was that Samsung the biggest part of the memory ship industry hasn't been doing that, so the outlook for profitability there is still a little bit dim outlook for prosability. I'm looking at the shares. We're higher by around five and a half percent, so

positive reaction. This kind of terminal chart tells the story though, if you look at this sort of deficit that Micron faces this year, this is a big hit to profit, a big loss going back to the eighties. Why has that happened? It's a memory thip industry. This is the most brutal PRAM and nand exactly the storage basically in your mobile devices, in your computers. The problem that Micron has and all of the other membership makers have is it's a commodity, right. You can buy these things in

these exchanges. You know what the price is. What happens when you have a glut is you end up making chick and then you have to go out and sell them for less than it costs you to make them. And that's where Micron is. Yeah, I mean that chart says it all really that, you know, the leg's kind of taken out from under them just very quick finally, and we've just got a few seconds. End markets basically this is about smartphones. The data center business bottomed out

in fiscal second quarter. What did the broad hopes for the smartphone market in the second half of this year. Yeah, that basically that it's not as bad as it was. And Micron gave us a picture that said, maybe smartphones aren't going to collapse as badly as we'd feared, and also maybe PCs won't be as badly as we'd feel we've had Micron. Everyone is over the moon with Nvidia. Nvidia can do no wrong as far as sell side

and this at least are concerned. Why do people think that Nvidia is going to be the main beneficiary from investment in artificial intelligence because so far they have been so far they've they've mechanically how does that work? What is it that's exciting? Well, the workloads that you need to run and system to have these recommendation engines basically reward the ability to do multitasking, to do parallel processing in Video's processors do that arguably better than anybody else.

And it's sold that story very well. All right, Bloomberg zan King not quite as old as the chip industry, but he's covered it a long time and we're grateful to have him. Now, coming up, we're watching shares Valley Barber surge for the second day after news that the company is splitting up up one point eight percent on the USADRS. Right now, we're bringing the details of that

plan next. This is Bloomberg. Ali Barber's massive overhaul plan boosted Chinese tech stocks overnight, with investors betting the sectors in for an overdue reevaluation. Is the regulatory environment improved? Shares Valley Barber surge earlier by the most since November out in Hong Kong after the news that the company will be splitting it's too hundred and fifty billion dollar

empire into six business units. Bring bags Isabel lead back twenty four hours ago is about we were talking about the kind of fresh news this is happening al in Asia. They've had time to digest what's going on. And also we're hearing about development of how they'll present that plan

right exactly. And it's interesting actually because this is the second rally in two days, and it really just means investors are liking what they see because to your point, Ali Baba, it's a two hundred twenty billion dollars empires will be split into six and analysts really like this for two reasons. In fact, overnight some analysts have upgraded

Ali Baba from AD to buy. So the first reason is it'll just allow Ali Baba to be more nimble because China has cracked down on these two big detect two big to failed tech companies, and Ali Baba was one of them. So now with the six units, there'll be a little bit more flexible in adjusting that a regulatory landscape, and a lot of analysts are really liking that.

And the second reason is it will unlock up valuations because these six units were given the discretion into raise funds however they see so ipo is one of them, and we know that the ipo industry has been kind of lackluster these days, so that will also help revive the IPO market. If you go on tli V, go on the Bloomberg terminal, I know that we're going to be covering Ali Baba briefing on their plan to kind

of walk investors through how this would look. Remind us of what the business of Ali Baba looks like these days, you know, we think of it on the Bloomberg Technology Show. It's kind of an e commerce giant. It's much more complicated than that. It definitely is. It's so sprawling, which

makes it a bit more complex. So a lot of traders have been trading Ali Baba like a utility, when in fact it's more than that, and in fact, compared to its rivals like ten Cent, Ali Baba is way cheaper, which is why some of the analysts are saying this will help Ali Baba kind of reshape its image, break it up into six and if among those is ten cents, so this can also this breakup can be a blueprint not only for China actually, but for the broader industry

here broader world. Rather here in the US, we also have two big to fail companies that US regulators have been scrutinizing. But back to China, ten Cent is one of them. And it's hard to imagine that this happened without the permission or the blessing of the Chinese government. So a lot of people are also saying that this might be a signal that, you know, the crackdown in

the past two years, it's done and dusted. And I also will bring up that jackmar returned at least to the public knowledge on Monday, so one can just back lit. Whether that's coincidence or that's planned, who knows. We're showing a chart of Vali Barber's share performance relative to its valuation, essentially earnings per share EPs. Unsurprisingly, looking at the Bloomberg a number of analysts upbrading price targets, but also looking at the bonds trading volumes very high. A lot of

interest in Ali Baba right now. What happens next? Right? Does this happen overnight? Is the investor community bracing for an instant split in instant IPO or is this something that is going to be protracted. I think now investors are just really on a weight and ce mode. But again, this likely happened with a blessing of the Chinese government. I think more than Ali Baba, they're looking to see whether this will affect other companies. So Ali Baba isn't

the only big company out there. There's also ant There's also ten Cent JDS, so it'll be kind of Ali Baba. I don't want to call it guinea pig. It's the only thing I could think of right now, the only word, But it's the pioneer. There's the first company in China to do this at least in recent memory, so it'll really be a blueprint, and that's what investors are seeing. How this will affect the broader industry in China. All right, Bloomberg's Isabel Lee on the China Tech Beat, Thank you

so much. Welcome back to Bloomberg Technology. I'med Lovelow in San Francisco. It's going viral art fish intelligence experts, industry leaders and research is including Elon Musk and Apple co founder Steve Wozniak, calling on developers to hit the pause button on training powerful AI models. More than eleven hundred people in the industry signed a petition calling for a six month break from training AI systems that are more powerful than the latest iteration behind open aiyes Chat GPT.

The idea is to allow for the development of shared safety protocols. Joining me on set to discuss technologist Sarah Gaw, a former general partner at Greylock now founder of early stage AI focus VC firm Conviction. I'm really happy that you're here. Thanks. You know this space many signatories to this. They're basically saying we've come quite far. Stop we need to rethink the parameters around this your immediate reaction to that. Yeah, so I would start with, like, AI is just an

advanced form of computing. So it's like saying we're going to stop development on computing until we can guarantee sort of a writing code perspective from a layman's perspective, Yeah, just from it's a general technology that's a tool that can be used for like huge value creation and also buy bad actors. Right, But you draw comparison to computing or the Internet. The move is not to call a moratorium on the Internet. It's to develop like safety protocols

and be transparent about access. So you're somebody that's investing actively in AI related startups will get to that in a second. How realistic is it to ask founders like the ones that you back to just stop. How does that even work? Yeah, So there's certainly a question on enforcement here, right, because most of the research that would be related to developing a model more capable than something

like GPT four is very expensive to do. So the number of labs that are capable of it, of funding an effort like that is very few, and you know they're staffed with teams that are very focused on alignment and responsible development. But if a set of like largely these signatories do not belong to those labs, and so it's not as if you have people generally at the City of the Art calling moratorium. You have people who

are not part of those state of the art adverts. Right, They've already done something in the field, And that's why I wanted to have you on the program. Correctly if I'm wrong, But your investment thesis is basically we should be funding and backing those that are working on technological breakthroughs that are not yet solved, right, and putting pause on development kind of goes against that thesis. Yeah, and well, fund basic research efforts, but I know the thesis of

the fund is much more on the applied side. And I'll give you a few examples, But to me, it's hard to argue that we don't want to give more people the superpowers that we're developing now. So if that is the ability to have any person ask questions of business data and natural language like seek, that feels like a useful thing. If it is to decrease the cost of high quality legal work like Harvey, that feels like a useful thing. I'm super excited about giving people more

creative skills. Right, So you have people who don't know how to draw using mid Journey, or people who don't know how to code using Copilot to write code. All of these are democratizing capabilities, Sarah, I just want to update the audience that we've reached out to open ai multiple times an open Ai have not responded to our requests for comment. In the letter which was written in the petition which I've got here, I mean they directly call out open Ai, so you can see why we're

trying to get them to respond. The question is this doesn't really work unless open ai engages with them, does it? It does not because they're ahead, right, And I think like this is a nuanced point. But alignment or the idea of like let's make the AI do things that humanity or users want, it's it's a very it's very intertwined with like advancing capabilities. There's not really a way to make them models more governable if we don't understand

their capabilities. Right in the petition or the letter, they basically talk about the idea that powerful AI system should not be developed until we're confident that their effects will be positive and the risks are manageable. My question to you, say you had a founder proposal deck in your desk, and how on earth would one quantify or codify those

two targets. Yeah, I think again, like computing and the Internet are really good analogies, right, I think there are absolutely real risks and once we already see today right, disinformation used by bad actors like I'm a longtime cybersecurity investor as well, like people use the Internet to do bad things. That doesn't mean like no internet, right or I don't think that's the conclusion most people would draw the other risks. You know, I really care about access

and also a reinforcement of bias. But but the thing to do is to address these concerns in like a open and transparent way, not to call for a halt development. You know many of the or know of quite well, many of the signatories to this letter, to this petition.

Were you surprised by any of the participants, I would say, I genuinely believe that you know there are signatories who care about democratis that you should of access because I think you know, a monopoly structure for advanced AI capabilities is good for no one. But I think the most cynical read of a letter like this could be that

it's a strategic competitive move so that people can catch up. Right, And some of the signatories have been on the wrong side of a technical architectural revolution in favor of transformers, which are sort of sort of a fundamental architecture that's making these AI's work so well. You and I have discussed and on this program, we've discussed where we're at. We're generative AI, and from a consumer perspective, I can go on chat GBT or Bard and I can ask

questions and get relatively detailed and informed responses. There's much more to generate to AI than that. And I wondered which areas you think we should a well in the first instance, really be focused on, for example, in the legal field, and think areas that you're interested in. Yeah, again, like i'd probably put like some of the areas we care about into sort of new skills capabilities and then

new knowledge. Right, So example, as you describe would be new skills as giving people the ability to code, to draw, to create video, to do legal work. New knowledge, I think is even more interesting. So you've seen fundamental advances in for example, the life sciences around a protein generation, protein folding. I think the idea of reducing the cost to deliver a new drug to less than two billion dollars a shot feels quite important to humanity. That's a

very specific example. How does AI help us do that? Yeah, without getting into too much of the technical detail, there are tasks within the drug discovery process that are basically approached by the industry in very expensive experimental ways today, and being able to get better understanding of biology and chemistry with these models makes the process of drug development

potentially much cheaper. You are a venture capitalist, but I know that you work deeply with and have done for a long time with the founders that you've backed in terms of the operation of their business, your research driven. I know that you read a lot from the world of academia. Who should be driving this? You know, Elon Musk is a signatory. He reportedly started his own startup right in the field of generative AI. It's very messy

right now in terms of the leadership in this field. Yeah, you know, I think like in the end we should have people from academia, from the state of the art research labs, like a more inclusive discussion including like nation states, Like, it's very hard for me to see a governance framework that matters in the end that does not include a international nation state participation. This has been a quite tense and serious conversation because there are risks that we're concerned about.

When you woke up this morning before you knew about this initiative, how do you feel about where we stand withmentum in this field? You know, actually most of the conversations we've had been very positive in recent weeks and months. Yeah, you know, I'm just genuinely very excited, right, And it's not that I don't see the risks again long time cybersecurity investor people doing a lot of bad things in

the Internet as well. But you know, my waking up experience today was my five year old daughter saying, make me a three hunded cerberus unicorn dragon, right. And the reason she believes that's possible is, like we play with using a generative AI, using a generative AI tool. She doesn't know those words yet, she's five, But the idea that she can create these images and tell a story using her creativity with all these new skills, I think it is quite inspiring. You had a decade at Graylock.

Just tell me really quickly about Conviction. Yes, this is a new initiative for you. Yeah, so as of last year, I started a new venture, fun focused on early stage AI. I think it's the largest value creation opportunity we're going to see this generation, and it's a very immature field. So the early stage focus and being able to understand, as you said, like the translation from research is our focus.

You're busy. You're also, of course the co host of the No Priors AI focused podcasts, which you should all check out. Conviction founder former Graylock general partner Sarah Bell, Thank you so much. Now coming up, the Golden State Goes Green, how Silicon Valley is trying to tackle the climate crisis. Plus, let's take a look at shares of

Lulu Lemon, which are frankly surging. As Boombow's Katie Greifeld put it, the explanation is there is intense interest right now in athleisure, a lot of that story, the e commerce story. But those gains around thirteen and a half percent, the biggest jump on the stock since March of twenty twenty. Company giving an annual outlook really above street expectations, high demand as I said, for those leggings and active where

more of that? Next? This is Bloomberg. So last night we hit the road and towards climate tech in the heart of Silicon Valley. I hosted a panel with top names from the industry about what's really driving growth in venture backing for climate solutions at the Teconomy Climate Summit twenty twenty three. Alongside me, Sophie Purdham of Climate Tech VC, Nekakaboulet of Aligned Climate Ventures, and PMP Power of Ahead

of c Lab America's Male have a listen. The dollar value going into climate related venture plateauing between twenty twenty one and twenty twenty two, driven entirely by the decrease in the growth rounds. Right, so many of us invest quite early, but those large five hundred million dollars plus private rounds, those fell off a cliff kind of right, as this fack market also froze. Well, that goes back to the original quick fire around. Were they overvalued? The

original twenty twenty one was nuts. Right, Yes, yes, and yes second quick fire around. Does the private sector or the public sector drive investment into climate tech? I'll give you an opportunity to expand in a second private, private private. I was hoping you disagree with Mr, and it didn't really work. So that brings me to my actual question, which is the impact of the IRA, because I want to keep this focused in the news agenda as well. I think you all agree that the IRA, through a

trickle down effect, will see dollars flowed earlier stage startups. NKA. How does that kind of manifest itself to your mind? Yeah, for us, we're looking at how can we support our startups that they don't have to continuously get into that kind of hedonistic Silicon valley treadmill of raising more and more corporate equity. So for us, that means tax credits.

Those are kind of non deluted funding dollars that are going directly into my startups so that they can pause, whether between fundraising rounds, or maybe not even have to

raise another round. So that's really exciting there. I think the other piece is the IRA funding is hitting a number of parts of the infrastructure ecosystem, and the White House report just got White House budget just got released and they put aside, I think about two hundred and fifty million for interconnection and permitting environmental permitting support, so For me, it's not just direct cash that might come

into my companies. It's cash that might make it easier for them to do their jobs, and also additional cash for their customers to get basically a discounted product as well. Met A big part of what you do is data driven, research driven. How do you interpret the broader impact of the IRA. I think it's a beyond the actual dollar money,

which is huge as well. Talking about android of billions is also a very strong signal for the private sectorals Europe was very concerned that you know, maybe they actually I was they were coming out because as you must remember, it was just one of good shots I will say on the good side, but it's a very strong signal for the private sectors saying it is a good time twin verse. That was quite a lively discussion at the

Teconomy Climate Summit twenty twenty three. Diverse range of views on why we should be back in climate startups and where the money is coming from, very candid takes from those panelists. We should get him on the show very soon.

Federal regulators in front of the House Financial Services Committee today to testify for a second day about recent bank failures at SVB and Signature Bank selling by with us for the latest on the hearing is RAMP CEO Eric Glenman and Eric I find RAM fascinating corporate card automated finance. We've had discussions with the CEO of Mercury, for example, talked about brex your company did it benefit from the

days and weeks that followed the SVB collapse? First, thanks for having me on ed and look, our whole mandate and commitment to customers is to help them spend less money and spend less time. You know, we're happy to announced today that last year RAMP grew by four times year over year, and it all comes down to our

unique approach. By helping customers spend less, we help them spend over four hundred million dollars less than the otherwise would have, automate five point eight million hours of work

and ultimately drive a better bottom line. And so you know, we think events like last week, earlier this months with spob's failure, obviously folks go out and look for solutions and dependable partners like RAMP, But ultimately we think it's about what we do day and day of helping customers and businesses have a better bottom line is why we

are growing. I think the root of my question is that not just diversifying banking, but many startup founders and bench captists came to quickly realize they wanted to modernize how they conduct their finances. And what I'm asking you is what lens did you have into that in the last three weeks. Certainly so a couple of sets of things. I mean, first, so our primary product is really around credit, and so when we are effectively allowing companies to continue

spending no matter where they're banking. Part of how we sprang into action is as thousands of our customers were moving banks, we were a continuous lifeline of support to make sure that as they were moving from smaller institutions to whether it's lawyer's institutions, sify as you name it, their service on RAMP was continuous and they also were evaluating tools like Ramp that can help me get more value.

In addition to that, because we work with a diverse array of financial partners, we were able to support customers in moving over a billion dollars in deposits in the first forty eight hours of the bank failure, and so we were there as a partner. We were there as a support to make sure there was more valued of every dollar of spend. And last, our product was a bridge and a lifeline where other products were less certain

or unable to provide services. There's a lot of discussion right now around US sort of de facto tightening of financial conditions, literally being able to access capital, whether it's venia, debt, venture,

traditional loans. Is that an area where you come in and try and fill If indeed there is a tightening of financial conditions when interest rates go up and the cost of capital is higher, I think what's top of mind for every whether it's started founder, small business owner, or ultimately CFO, is what am I getting out of every dollar and that hurdle for a return knee to be that much higher. I think for US, I mean obviously part of our products, whether it's in the corporate

card or in flexible finance solutions. Of course we do offer credit, but ultimately ramps advantage to customers is helping them reduce their spend by four percent. When you compare this to what most others in the industry are doing of coming up with increasingly collaborate rewards programs and trying to incentivize companies to spend more. We think something like RAMP, which does the inverse. It actually helps companies spend less

and get more of every dollar. Are not just useful in every kind of time, but frankly that much more valuable when capital does not come cheap anymore. Let's talk a little bit about RAMP. And actually, you as a found a CEO, right you're backed by some pretty big names Goldman Sachs, City found as fund Stripe to name but a few eight point one billion dollar valuation. Sales grew four x last year. Are you struggling right now?

It doesn't sound like it in this environment. Look, I think part of I think, going back to what's on top of mind for founders is can I find software that's focused on my business that helps me spend less and helps my dollars go further and so will Certainly customers are spending less and we love that, and we're here to help them. It is accelerated the interests and demand from customers for solutions like this last I mean, you talk about even the events of this month, failures

of other banks. Over a third of our customers actually come from word of mouth. And recommendations from others, and so in terms of new business growth, this has been among the fastest years of growth and certainly even over the past month month of growth that we've ever had. Eric, as a final question, and indeed a point of clarification, did the company bank with SVB or you yourself personally and by extension, what do you make about the sort of the first citizens coming in and saving what was

a really influential institution among the tech community. First, so RAMPED not bank with ask to be your have direct exposure, but ultimately we're here to support. We work with over fifteen thousand businesses and several thousand of them did and so we were there to support them through that tough period. You know. As far as for Citizens in the acquisition, we certainly wish them lucky. They are I think a

fantastic institution there to serve a lot of companies. But no matter what, our rule as a partner to these companies is to serve them no matter where they choose to bank and help them get more of every dollar an hour. All right, Thanks to RAMP CEO Eric Glyman joining us from New York. That does it for this edition of Bloomberg Technology. Make sure to tune in tomorrow Twilio CEO Jeff Lawson joining me live. You don't want to miss it, and there's also a lot to recap

from the last few days. To check out the podcast wherever you take your podcast, you can find it on the Bloomberg terminal as well as on Apple, Spotify, iHeart, and our other Bloomberg platforms. Really risk on mode in these markets with technology outperforming. We get that PC core PC data coming Thursday. That will tell us a lot about the FED, the impact of higher rates or otherwise on valuations. But for now, out here in a very soggy San Francisco, thank you for listening. This is Bloomberg