Snapchat, Amazon, and Pinterest Earnings

From Marhart where Innovation, Money and power Collie in Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.

I'm Caroline Hyde at Bloomberg's World headquarters in New York and I'm Ed Lodlow in San Francisco.

Big Friday. This is Bloomberg Technology.

It is big coming up full coverage of all those tech earnings from Snapchat to Amazon to Pinterest.

We have got you covered and sticking with earnings, I'm going to bring you my interview with Intel CEO Pat Gelsinger, the company projecting a return to free cash flow, plus.

How AI is going to impact hiring and managing in the workplace. We'll discuss the CEO of Lettice, Jack Altman. But first from those privately VC back companies to the public markets, where we're a little bit more cautious. Some of the big eco data that we got, the drops on the inflation reads ahead of the FED next week, and look, inflation is still brisk here in the United States. It's still brisk over in Europe, but maybe trading down

Yeah, I'm still really focused on earning season. Take a look at Intel. We kind of paired some of our earlier games. A tough first quarter, to be honest to trough on the top and bottom line, but the outlook for the second half of this year a bit more rosy and analyst really buying into that. We will hear from the CEO Pat Gelsinger later in the show about what the green shoots are that are giving the market confidence elsewhere. Social media a really big theme of this

Yeah, and as you say, that has been such an important growth driver. Let's talk about it even more. Now we've got pack to you, president and co founder and of course someone who used to work over at Amazon. Melissa Verdick. You were previously of Cool, spending a decade at the company. You helped launch the CpG, the health

Yeah, there's well, there's a couple of things for sall things for having me glad to be back, but you know, sixteen percent growth in AWS still not anything to sneeze about. But there's a couple of worrying things. I think One is AWS has been the leader. They had forty percent growth a year ago.

Now it's slowing.

Their competitors are catching up. So Azure and Google Cloud both grew faster. Another thing that I think there are two other things that are a little bit concerning. One is it is impacted by macroeconomics. Amazon talked about how customers of all sizes are looking to optimize their cost savings and that is where we're seeing some slowing growth.

You know, they're offering something broad right, foundational models for those that want to use third party or Titan within Bedrock. One thing that really caught my eye the impact of machine learning on advertising. To take a look at this chart that shows ad growth across the advertising based companies, and actually Amazon comes top of the pile. Milist a real bright spot. What's your read into that?

Yeah, definitely.

I mean my company pack You sits on top of the Amazon's APIs for ads, and it's been a great business for us. Advertising is highly profitable. Actually, this week we looked at earnings across Meta, Google, Snap and Amazon was way better than twenty three percent growth, whereas you did not do as well. There's an interesting new partnership that Amazon announced Whiches with Pinterest. Pinterest has been struggling

All right, Melissa Bird, I could pack for you, Thank you so much. The other name we're tracking them, course, Snap shares set for the worst day in six months after posting its first ever revenue decline. Joining us now is Jasmine Mburg Insider Intelligence Principle analysts. There was a phrase that jumped out, continued disruption in demand in advertising.

What is that?

Well, I think over all, looking at Snap's revenue decline, what we see is that it has really deep challenges within.

Its ad business.

So yes, there was a disruption and demand in the sense that it is revamping its ad platform. It is unifying its ad formats to make them easier for users, it's investing in machine learning, and all of this, of course is to provide more ROI for advertisers, and Snap is right, you know, these things take time to ramp up and really you know, impact its bottom line. But for me, you know, this issue really runs deeper, and that's that Snap is a much smaller player than say

It's been very clear about this itself.

It is a messaging app and its users primarily use it for visual messaging, and messaging apps are notoriously difficult to monetize.

Three hundred and eighty three million users daily is nothing to be sniffed out, though overalled, How do they end up trying to set themselves apart from not being well and also RAN, but a different RAN, offering something different, particularly when it comes to VRAR.

Yeah, and that's something that Snap has been trying to do from the very beginning. You know, they position themselves as the as as a gen Z platform, calling it the Snapchat generation.

And it's true.

It really does have a stronghold on gen Z. Where it has struggled is being able to attract audiences outside of gen Z, older audiences in particular, and a lot of the things that they're doing, particularly around AR, really do appeal to its audience. I would say that, you know, convincing advertisers that AR in advertising is valuable, especially in this economic environment, has been difficult. But it's also working

All about the monetization Jasmine Great hasent time with the jasmin Enberg of insider intelligence from Snap to Pinterest. Let's have a look at how those shares perform, because we know that it's under pressure. We know that it's more perhaps about the lack of cost cutting going on to that particular business right now. Tom Forte, DA Davidson's senior research analyst who has a neutral rating on the stock.

Sure, so I think I lowered my price target by a dollar.

To twenty two, and I think the good news is that pinterest has made strides and engagement. They found an interesting way to solve their monetization in e commerce by partnering with Amazon. The bad news, and what I think is weighing on the shares in addition to year of comments on cost pressure, is that their sales expectations for the June quarter suggests.

They were lower than expected.

So the digital ad market, when you look at Snapchat, when you look at pinterest, it's still challenging out there.

Hey Tom.

When we look at pinterest, when you think video and the emphasis from its pays, then you think about artificial intelligence. There seems to be a narrative in the market that pinterest is at risk of being left behind. Do you share that concern?

I do not to the extent that if you say that Pinterest's functionality is as a visual social network an excellent place to view for example, kitchens if you're thinking about doing a kitchen remodel, or a parel if you're thinking about buying new clothes. I do think that they leverage artificial intelligence to the extent that they use artificial intelligence to find more things that you might be interested in based.

On what you've looked at so far. So I'm not overly concerned about it being left behind.

No what therefore can Pinterest run home to the investor base right now? About how close it is to actual people making investment purchase decisions. How can they continue to ultimately be a need to have for many of these companies looking to advertise a little bit closer.

So here's where Amazon comes in from an advertising standpoint.

So to the extent that they're going to work.

With Amazon to improve their advertising and e commerce make it easier for consumers to find things on Pinterest, to find ads on Pinterest, to click on those ads and buy them with Amazon. I think that's going to help Pinterest over the next twelve to eighteen months. And the

It's on forte DA Davidson, thank you so much. Intel shares pushing higher after chipmaker projected a return to free cash flow in the second half of the year, with analysts saying the worst now may be over for the company. Moments ago, I sat down with Intel CEO Patal Singer.

Have listen.

You know, the second half in our industry is typically stronger than the first half, and we expect that to be the case your second You know, a lot of inventory adjustments are occurring in the first half of the year, and particularly we see those finished in the client the PC industry, but we're also seeing progress through our networking and data center and cloud business as well, so improving inventory position, and you know that's very typical of the industry.

The turning point idea is really interesting. There's a number of analysts that say Intel has hit its troth essentially when they look at margins and top line growth. Is Intel in its trough coming out of its trough?

To your mind, well, you know, we guided Q two better than Q one, and we expect second half to be stronger than that. So clearly from a top line growth perspective, but also from a margin perspective, you know, we expect that we're so margins in Q two, but improving as we go through the years. We get out of the thirties and back into comfortably into the forties as we go through the year. So an improving position on margins and an improving position then on the bottom

Intel CEO Pat Gelsinger there, Caroline.

Really fascinating conversation overall, and the focus on chips, which of course we know have been a bit of a laggot. Over the course of the week, we've got to dig in a little bit more about Intel's earnings and the chip sector more broadly, bringing Bloomberg Intelligences, man needs sing what do you make of some studying? Is the worst behind us? To that extent, I think it.

Was interesting that they said that the PC market is stabilizing and they call for two hundred and seventy million units for the year.

My sense is, you know, the inventory.

Situation is still not clear in terms of you know, the channel inventory clearing they sounded a lot more optimistic, So you have to take the word because Intel is the largest player. And look, on the client side, they have less of competitive issues than on the data center side, where we know the demand is high for high performance computing chips. We've seen expectations for Nvidia. So clearly Intel has more secular headbinds to deal with on the data

I think we.

Still have to figure that part out.

Yeah, I think he said he was confident the inventory would be corrected, it would be completed, though he didn't say when you know, relatively. Pat's trying to sell this story right, mandate that Intel can return to being a technological leader. Do you see evidence that he is managing that process well while also sort of catching up on the day to day of running a chip company.

I mean, look, turn around stories in tech are tough, and look, he has a very tough hand in this quorder. Intel actually had negative nine billion dollars in free cash flow, so that just goes to show what he is dealing with in terms of, you know, the fab aspect of it catching up to TSMC and really kind of dealing with the data center headminds that I alluded to before.

Caroline, as you can imagine, I couldn't resist the temptation, and I asked, we asked a question about artificial intelligence.

Yeah, and it seems as though that's got to be an area they focus on. I mean, Amandie your point that we're looking at Amazon developing chips to help with that sort of capacity that computer needed with generative AI. Is this something that Intel just has to be a part of and are they a significant part of it?

And that's the challenge, right, So the hyperscalers all want to do their own chips. I mean, Google is doing their own TPUs, Amazon the Graviton, and Microsoft has I think There'll been rumors that they're doing their own chips. So that's the challenge for somebody like Intel, which is the leading market share leader when it comes to you know, the data center chips, and now they are partnering with ARM.

AMD is doing well.

So clearly a lot of competitive pressure and there aren't enough foll points in terms of you know, uh manufacturing coming back. That's where the government supports is key and yeah, they have to start showing that in bad manufacturing.

So take us there the bait you laid in. What did he say in terms of AI?

So Mandy's flat was really interesting because he was pretty committed to competing with Nvidia those high of higher endgpus for the deep learning part. But really where Intel's looking man Deepa's inference right, they have a range of CPU and GPU products that they think can compete there. Just so what you said about the chips ACT. Pat seems confident that those dollars flow through this year. How crucial is it to then to get that public sector money to drive that vision that Pat has.

Yeah, look, I think that is key because the more these tabs are underutilized, it's going to.

Be a drag on the gross margin.

And we've seen that fifteen percentage points in gross margin compression in the last two three quarters. Guess what. The more lower utilization for these fabs, it's going to continue to pressure THATAB. So if he gets that funding and if he gets something tangible from the Chips ACT, I think that will certainly is that pressure.

And also the inference market.

Is sort of running away from them because Apple does its own chips for its PCs and max. That's where a lot of infrints will also happen. So Intel really wants to make sure that you know the x eighty six ecosystem, the Windows ecosystem stays with them on the client side.

Always great to have some time with you of Freebag Intelligence. The one and only man leaps saying, one of the busiest people in this building. Mean while coming up, we've got to talk about that bitcoin scam, a Moonland, a craft so much more, but it all coming up and talking tech that's next, and this is Blomberg.

Time for talking tech. A US jarge ordered a South African executive to pay more than three point four billion dollars in restitution and fines for a fraud scheme involving bitcoin, which impacted more than twenty three thousand people in the US. This is the highest ever civil monetary penalty in any CFTC case. Ice Faces Moonlander crash is now wiped out about six hundred million dollars, almost half of the Tokyo based startups value of shares slumping for a third straight session,

Welcome back to Bloomerg Technology. I'm Paralyine Hyde in New York.

And Amed Lovelow in San Francisco. It's the final trading day, Caroline of April, so I thought I get some scores on the doors in terms of where we're at. Now's that one hundred out performance, right, We're up four and a half percent relative to sort of other specific areas of the technology space, the Philadelphia Semiconductor Index being one

Talking of steep drops, let's get straight to it. When we're talking about the banking sector. And because US officials are reportedly in talks with government agencies to throw First republic banker lifeline, now, the San Francisco based lender has really struggled to navigate through the aftermath of failed Silicon

Latest beyond that in the center of a lurry of telephone calls as well. Remember is we describe the situation, it is a live situation and can best be described as a frenzied last minute effort to save the bank. Now whether it falls into FDIC receivership. Now there's a sense for the last couple of days that this could continue to limp along as a bank with a clear

I think the idea SNALI is that investors are struggling to understand what of the many possible scenarios is most likely to happen. This talk in the market that now a US takeover is the most likely outcome.

Listen, and that's what I was trying to convey here. This is very much a search for things to come together here. Now, getting a consortium of people together is a difficult thing to do. And remember we've reported multiple times here at as well that the government would need to be involved in such a manner and pony up a little bit here under the FDS receivership plan. The issue here is which is a more costly solution. The FDIC, as we've been saying, would take another massive hit here IFFRC,

All right, Bloombergshnili Bassi, you've earned your weekend alongside Man Deep singer bi Off. You go go and have some fun. Let's pivot a little bit Can AI replace our jobs? That is a question Caroline and I have been asking quite a lot recently the rise of generature of AI. It may not expect to impact all jobs in the same way uniformly, but there's going to be an impact on hiring and managing in the workplace at large. That's according to the CEO of People Management Software Lattice. Jack

Now.

First of all, thanks for having me. I don't get sick of it.

I think it is like the most important topic in tech right now. I think they're is still a lot to be understood, but I think we're already seeing a lot of ways in which AI is starting to impact companies, individuals productivity. So I think, finally, after many many years of people anticipating this with beta breath, we're we're here and we're seeing a lot of the impacts, and so it's super exciting.

Not sick of it.

LA's this is a really interesting example.

Jack.

You know you had a billion dollar valuation twenty twenty one raise new funds the beginning of the year three billion dollar valuation. But you're kind of a key example of where AI tools can be applied in enterprise and SaaS. Why is that such a good marriage?

So the way I've been thinking about large language models, which is sort of the thrust of what's been happening in the last couple quarters in AI, is kind of like what calculators did for Math. I believe large language models are going to do in many ways for things like reading and writing. So they're going to make people much more readily able to digest and comprehend and text

Jack. Of course, your entire business is HR tools is efficiency as culture in many ways, and I know you've personally had to navigate that in januarly having to let go of people within your team and trying to think about how you can support them. Is Ultimately this general of AI and AI going to mean more people get let go because they can be replaced in some.

Way, sort of like you mentioned at the beginning, We're definitely going to see different industries and roles be impacted in different it is. But in my view, it's most likely that AI is not going to reduce the demand for labor. I think it's going to increase the demand for labor. Generally, what we see when any asset in the economy becomes more productive is there's more demand for it.

About lenses and AI is something that you're doing a lot of your brother's doing a lot of of course, in any way, some altman who I know you've built businesses with, you live with previously, he's at the cutting edge of where we think ethically general to AI can be built. Do you are you on the optimistic side? Are you thinking in general that we can harness the productivity and we're not going to have some of the worries about regulation this, or that it's developing just too swiftly for humans.

I am optimistic about it. I do tend to believe that it is going to be wildly exciting and positive for humanity. I think it is something that is extremely potent, and so I think it is really smart to be paying a lot of attention. I do think it's something that requires quite a bit of care and attention. But that's why I think having companies with thoughtful leaders who want to really invest into AI safety and making sure that we're testing things before we release them to the world,

Jack. Founders all across the country are considering how they can become relevant or not miss the opportunity that AI presents. And that's just one fact. I know you've been tweeting about things that founders have been getting wrong. How hard is it out there right now? Is really the question? You know, you raised more money at the start of the year at a significantly high evaluation at a time where others were doing the opposite down rounds.

Yeah, I think it is a It is a challenging time for founders in some sense relative to the last couple of years, you know, separate from this whole AI acceleration, which is incredibly exciting. On a completely unrelated path, we've had this real economically challenging time for tech and specific we've seen this happen. As you know, you've covered extremely well tech stocks in the public markets have really suffered for a lot of reasons, and that's led to hard

And let's talk about the problems that Lattice is solving, and it's trying to make people more efficient, particularly in working smoother, being more productive, ensuring that your workflow becomes one that you get feedback more efficiently. About are people wanting that at the moment you had five thousand customers, is that still building in this environment?

Yeah? I mean I think what people want.

There are things that individuals want and that companies want, and I think there is a deep alignment when management has done really well. And so I think what individuals want is they want a sense of impact. They want to understand that their company and their manager cares about them. They want to be part of a team doing something important, and they want to know how they're going to be able to grow. What companies want is to build strong cultures of people who are going to be well equipped

See you have of Lattice. Thank you, Jack Altman, I appreciate the time. Meanwhile, coming up, well, we've got to talk more about AI in all sorts of manners. Wing Venture Capital has actually just been backing a new AI startup, Pine Code. It's actually New York based, valued at seven hundred and fifty million dollars. Now we're on that next. This is a Bloomberg.

We were just talking about generative AI and its impact on the workplace. We've been talking about generative AI and the arms race going on in tech all week because at the core of earnings was artificial intelligence. Speaking of some of the big players that reported numbers, we asked our audience, Caro, who's.

Won for you?

Who, to your mind, has made the most convincing case that they're leading in AI. Those answers speak for themselves.

They do. Clearly Microsoft, with their tie up being integrating open AI's chatchipt for the fact that they're managing to brag ed about a quadrupling in app downloads that they've had. Clearly sat In Adela has stall in the march on this one. I mean, what was it? Overall? Though more than two hundred times AI was mentioned in these earnings calls this week alone, so they're all trying to really still a little bit of the line. Like Meta, I think did a pretty good job on it.

Two, Yeah, I did, And I did account on the blogs of how many times AI was mentioned in each earning's press release, because that's the kind of guy I am. Amazon's going to feel agreed by those results, though we'll come back to that. So, speaking of AI, pine Cone, the startup whose platform supports AI software, just raised one hundred million dollars in a funding round that values the

Sure, well, thank you for having me on the show.

We've been involved with this company for a long time, certainly before the rapid adoption that we've seen as of late, and it fundamentally has to do with the types of things that you need for machine learning. Most relational databases, most data warehouses, they need just data that most people understand numbers, texts, things like this.

Machine learning algorithms operate on vectors, embeddings.

This is a different type of data that needs a different type of database. And so if you're building a generative AI startup or a generative AI application and you want to marry that with your own company's data, or if you want to remember things from one one question to the next, you need a vector database like incomb And so with the rise of all these generative AI applications, we're seeing more and more people adopt Mincombe. Pine Cone

This is a valuation that's based off of the potential.

If this is the database for AI, that's a tremendous opportunity going for.

New York based company. Jake. What's really interesting about your background and the fact that you've been investing these sorts of companies for a while now, including pine Cone, is you're trying to have an expertise about how you operationalize AI. And this is kind of at the core of all of our conversations. Everyone's trying to work out where and sort of the stack is the most value to be had. You about infrastructure, Are you about big companies applying AI?

Yeah, I mean, well, we invest in early stage companies and so we're certainly believers that they're going to have an outsized portion of the returns.

But we invest up and down the stack.

We've made investments in semiconductor companies, and certainly the first group of companies are the core infrastructure.

Then you see the cloud vendors.

That are making money hosting some of these foundation in large language models and in the limit. A lot of these things are going to be new pieces of infrastructure, and just the way we turn to the cloud vendors you mentioned, we're going to turn to these AI foundation model vendors for some of that technology, and some of

Jake, I'm hearing a lot of companies as similar size to pine Cone are trying to get rounds done. You know, early through growth stage. How wary are you all of open ai because open ai also has a small fund that it's investing across startups in AI and those that's deploying its own technology.

Yeah, I would say we're not worried at all about open ai as a source of venture capital. There's lots and lots of dollars and certainly open ai has a bunch of things that can bring to bear. But we were with companies at the really early stages on that journey from zero to partner market fit, which is a really hands on endeavor that takes a lot of time and energy, and I think there's a role for people that have.

Been doing that for a long time.

In terms of open Ai as a competitor, absolutely, you know, as a competitor it's something to watch. But it's just like the cloud vendor landscape. We don't think it's going to be a winner take all. We do think it's going to settle into a small number of larger foundation model players and we're going to use them as infrastructure.

So they're a building block, they're an enabler.

Well, you're someone who's had leadership roles that it's cloud era, so got a lot of experience from software to the AI journey. We thank you so much. We venture capital partner Jake Flumenberg, great to have you. From Cochella live stream to having influences belled out the hottest viral song on a short YouTube. It seems to always be looking for new innovative ways to bring music to the masses,

We're a global platform and we're focused on Our mission is give everybody a voice and show them the world.

And boy of we've done that. We have gone from.

Three stages where we live stream to six stages.

We've introduced shorts.

As a really fun way for the kids to suggest their favorite artists to do some of their songs that they want, and so they're influencing the sets they are able to be and create lightweight short form video to explain to the rest of the world that they were there, they were enjoyed the experience, whether they were at Coachella or experiencing from their living room.

We introduced for this.

It's actually the second year where shopping has been an integral part of the experience where kids are able to buy merchandise and you know, rock their t shirts that they were there, that they experienced it. And of course the production has gotten so much better, and we introduced live chats and and so there's a lot of work that goes into it, but it's been incredibly fun and enjoyable.

Tell us about the international focus, but this was interesting about the lineup of Coachella this year was, Yes, there were the big American artists, but I'm also thinking Black Pink, I'm thinking Bad Bunny, these truly international stars. So how much was the viewership coming internationally?

Well over sixty five percent of viewership came from outside of America. And when the fans are able to experience Nigerian Burner Boy, Korean Black Pink, and I don't know if you saw, but Rosalia shut the place down. She's from Spain and was one of the most moving performances. And we had the first Punjabi artist perform and they're celebrating in India the fact that they have an Indian Pujabi artist on Coachella, and it's just fabulous to see.

Leo Cohen there, global head of Music at YouTube now ed but He's sort of like the man almost that helped drive the birth of hip hop. He was there and unsigned Rumdiancy. He can see around corners. What's interesting is pretty optimist about AI's impact on music.

Yeah, you and I grew up in the MTV era, right, video and music? How do you push it forward? It is so fascinating.

Yeah, his artists don't seem to be worried about official intelligency in their lunch for now. That does it for this edition of Bloomberg Technology.

Yet, such a huge week, so much recap, So don't forget the podcast, Apple, Spotify, iHeart Bloomberg. Join us on Twitter spaces right now on Twitter, This is Bloomberg