Bloomberg Tech is alive from coast to coast with Caroline Hide in New York and Eva Low in Sent Francisco.
This is Bloomberg Tech coming up another day, another deal. Samsung and sk Heiniz forge initial agreements to supply chips and other gear to open AI's Stargate projects.
Plus Peloton shares drop after hiking prices and announcing an overhaul of its hardware lineup and a new AI system.
And Google also introduces new Nest branded hardware, including video cameras, a doorbell, and a compact speaker, as the company advised to integrate AI throughout the smart home.
Hardware abound. But let's get to the hard fact of the day.
When it comes to the markets, we are flat on the nastat one hundred.
A lot to digest for investors.
Whether we're looking at weaker jobs data once again signaling weakness that the Federal Reserve might cut rates into.
But will we get of course, the non.
Farm payrolls on Friday, we are amid a government shut down, and we will go to that best conferences and when it starts with the leaders of the Democrats in the House.
But I'm looking at gold Spot currently get a.
Record high that anxiety fueling a bid for a haven ED But what are you looking at?
Yeah, I think we've got to get out to talk more about what's happening with this shutdown because it's impacting markets right now, including the tech sector. Bloombergs Tyler Kendall is at the White House in DC for more. Sorry, Tyler, explain the basics of where we stand in the shutdown and what we're expecting to happen next.
Right, So, ED, at this point, we haven't seen any side really budge on their main points here. So at this point, negotiations are continuing, but the government is shut down, and we did hear from Republican leadership earlier today, including House Speaker Mike Johnson and his words, more pain will be inflicted the longer this shutdown goes on. It's our understanding that House Republicans will hold a call later today with the O and B Director of US Vote about
the potential for permanent layoffs. This has been a threat that has been issued from this White House, essentially as an ego shaving tactic.
In these talks.
But we should note at this point we haven't actually seen the agency's outline plans for permanent firings. As of now, Republicans are really standing firm behind this idea that they want to see what's known as a clean continuing resolution that would fund the government until mid November with no other provisions attached. The Democrats say they want to see policy changes now, and they all have to do with healthcare.
Really at the heart of this, the chief concern is extending those expiring Obamacare premium tax subsidies that are set to end at the end of this year. I would watch out on that front because we have heard from Senate Majority Leader John Thune there could be some room for negotiation on that, but the government has to reopen first in order for those talks to start.
We were just showing some live picks of what we expect to be House Democrats in a press conference on the shutdown, and Askar said earlier, when it happens, will bring you what you need to know. Bloombers Tyler Kendall staying in DC for US, that's kind of the big picture of what's happening in tech markets, but there are stories out there that are driving specific moves as well.
I'm looking at Micron moving pretty much six percent to the upside, like it was lower in pre market on the news that it's big rivals in memory, sk Heinix and Samsung have won the Stargate deal. Do you expect it to be up six percent? Well, it is, and then there is tension between the United States and Taiwan. Taiwan pushing back on the idea. There's an agreement here that they will push more manufacturing to be on shore in the United States through TSMC. TSMC's usadrs are up
two percent. We need to get the details.
There is a through line between these two key stories, and Michael Shepherd, as always, can talk us through the nuances and what's happening when it comes to the chip industry and Washington's into play.
So talk us through first and foremost.
You've got Samsung Shynix of course, basically Asian players winning contracts with Open AI and Stargate. But this is as the leadership in Washington and really pushing for more domestic manufacturing.
Just talk us through it.
Well, when you think think about it, you have to look at it in the broader AI context, and for the Trump administration, this would certainly support their goal of propelling investment in Stargate in Open Ai, in that big data center project that the President heralded at the beginning of his term. But there were a few questions left unanswered.
One is the price tag and will this help support what is part of a trade deal with South Korea that calls for as much as three hundred and fifty billion dollars in South Korean investment in the US over the next several years. Also left unanswered is where all of this high bandwidth memory is going to be produced, Caro. We don't know whether this is going to be made in Asia or if they may try to do some of this production in the US.
And that is certainly a goal of.
The US and of the Trump administration to onshore more of that chip production. And so there may be more pressure from the administration on these two companies, on the government and SOUL to try to make some more of that happen.
Shap headline out of DC Trump's proposed changes to VISA rules assailed by the chip industry.
What's the team been reporting on here.
Well, this is another cross current that we're seeing here in Washington, and that is, namely that for all of
the push on getting manufacturing on short here. There is a tension over the workforce, and we have heard administration officials talk about trying to develop the workforce, but the industry has outlined a major challenge, and that is simply that the country is not producing enough graduates here in the US to meet the potential demand of all of that manufacturing and data center and AI expansion that is
projected to happen over the next five years. There is an estimated sixty seven thousand job gap according to the semiconductor makers. Now, what we're seeing is pushback from chip makers against an administration plan the crackdown on the F one student visa. This is a key pipeline for talent in the tech industry. It is something that they have
relied on for years. Students currently are able to say for an indefinite period as long as they're actively in a course of study, but the administration wants to shorten that to four years, and industry is saying, look, a less friendly approach to immigration will drive away talent to other countries that are more welcoming, and it will hurt competition, one CEO wrote in An unnamed chief executive from a semiconductor company wrote in to say that they were deeply
troubled to see this and that it will harm competitiveness for the industry here in the US. And this comes as also the administration is raising the fee for H onebvs's to one hundred thousand dollars for new applications and for chip companies that could mean one hundreds of millions of dollars in additional fees. Trying to get all that talent here in the US to meet this demand that they.
Have for jobs.
Bluembogs Mike Shechpad with two critical stories out of DC and there are several that we didn't touch on. We'll try to throughout the hour. Energy Secretary Chris Wright says the US has taken an equity stake in Lithium Americas in a bid to level the competitive playing field with China. Wright said on the close that the US government will have a five percent stake in the company and a five percent stake in the actual mind all with an exit strategy.
So we did was a creative deal engaged with GM and Lithium Americas to find a way to bring more capital, equity capital into the mine. Yes, for US to take an equity stake in the mind and to do those things. So the mind's going to be viable, economically sound, it's not going to be the next Cylindra. And then we can advance the loan capital that will help that mind get finished.
And you have creative deals coming from the administration. Let's get to the broader tech readA cross therefore with Frea Sincotos, your senior market analyst at City Index. Look, we talk about anxiety in the market, we talk about a government shutdown. We worry about maybe the push and the pull of trade deals, whether it's with Taiwan, whether it's with South Korea.
And yet videos.
At a record high today, Micron's had a record high today. Fiona, do you just keep on allocating to the ai trade?
It feels like it's that way. I mean, whilst we are seeing pockets of safe haven demand. So obviously we've seen goals trading at record high, We've seen the Japanese Yenni's strengthening against the US dollar. We're seeing equities still
remaining very well supported. So I think there is very much this sense that particularly tech stocks are still attracting a lot of attention because investors want to put their money somewhere, and big tech in the US remains a solid trade, you know, and we've still got the outlooks, will be getting more information of that when we get
into earning season. But it does feel that we've had this sort of you know, gradual climb higher that's not really letting up, even though there are clearly plenty of risks out there, the shutdown of the US government, but still those you know, optimism surrounding those fed rate cuts is still helping the sector as well.
It is about the macro policy making, whether or not we get the jobs data on Friday or not. Fiona, what's happening in Europe because I'm looking at ASML is also at one point three percent. Are you getting a pull across to other regions right now?
Yes? I think there has been, And you know, it's quite interesting because I think there was a period just recently where Europe was struggling against the US. We were seeing the US climbing fresh record highs. We were seeing the nasdak Art, we were seeing the s and P five hundred up, and yet in Europe we were sort of suffering a little bit on down days. But I think there is a sense now that that is starting
to turn around again. As you said, there is that sort of pull across that we're getting from the US into tech stocks in Europe, which is helping. As far as sort of other sectors. There had been a strength in defense stocks in Europe, which I think has just sort of wound down a little bit. But yeah, as far as techook are concerned, we are seeing some encouraging signs. Again.
A story we did not get to with Bloomberg's Mike Shepherd was Taiwan's Vice Premier coming out and saying that the country rejects the United States demand for Taiwan to actively help in bringing fifty percent half of semiconductor manufacturing for the US supply base into the United States. This is a sort of part of the negotiation broadly on
trade with that nation. But it speaks to other things that Caroline outline to you, which is the impact of this administration's policy on the technology sector.
What do you make of that?
Yeah, you know, I think with this administration, policy is very much a central part of how markets are responding as to the outlook for stocks and also for sentiment. As we've talked about, you know, it does feel like the a saidministration is having a very active role, as we know, in setting out policy and involving themselves in policy, which is affecting stocks. It's affecting sentiment to a degree.
But I think also that there is a little bit of court and we're not seeing the same rapid, quick responses that we used to see at the beginning of Trump's administration, where he would make these announcements and we would see a big reaction in stock, big reaction in the markets. We're seeing more relaxed response, I would say to the comments that come out from Trump, although they are still there, they're just not making the same impact that perhaps they have previously.
Fiona, did technology investors start looking for opportunities in sectors and companies where a US government might take a stake.
Yeah, that does seem to feel like it could be the next one to be watching for. You know. I think they have been much more pro active in looking for stakes as we've had with the lithium deal as well, that they are keen to get a foot in and perhaps make the US potentially even more competitive than it is against peers such as China. So that could be the next one to be watching out for.
Peer and a duty signs of a bubble.
I see that we are high value. There are high valuations at the moment. I mean that was something that was noted by Federal Reserve Chair Jerome pal just a few weeks ago. But I think really what we need to see is what earnings are going to be telling us. You know, I think there's going to be a lot of focus on earning season, on forward guidance. I don't think we're in bubble territory, but I do feel that
we are quite overstretched in some areas. But that doesn't mean to say that we necessarily are going to see a big collapse here at all. I think there is potential for some consolidation. And if we do get okay readings from the earnings at the end of this month going to November, then I think that could potentially be a reasoner catalyst for another like high especially if we're seeing the Federal Reserve cutting interest.
Rates further ASML earnings on October fourteenth, how is it earning season already? Fionasencoda from City Index, thank you, We're ready coming up why some investors are rethinking their private market play. But we're going to speak with Matt with Eiler, Wellington Management late stage growth lead. This is where the conversation is right now, and as you know, I want to talk about debt.
This is momboke tech.
There's a lot happening in technology and private markets today from London to LA. Startups are raising money and in some cases, like the UK's n Scale in the former quick follow on round around the world, pension fund state back investment firms, venture catalysts are rethinking the private market's playbook. Matt with Hyler, Wellington Management's late stage growth lead joins
us now. Wellington Management has more than nine point six billion dollars in assets under management in the private investment bucket. I have so much to ask you, but we were showing a really well read story on the Bloomberg about any participant in private markets after an era of easy gains is now changing approach. Is that true of you and what you're doing in your strategy?
Well, I think for us, similar to what we've seen over the last multiple decades is companies are just staying private longer, right, and as that happens, then the historic returns and public market investors would have gotten as companies went public and then appreciating the public market those are really only available those returns in the private market as
those companies continue to grow. So for us, it's more of the same, continuing to capitalize on that trend and apply the kind of full picture of Wellington, which is seeing the public markets and applying that knowledge to the private markets.
Matt across infrastructure projects largely relating to AI and m and A debt is in the headlines on a daily basis at the moment different types of mechanisms. I'm trying to understand how worried or not private market participants are about the use of debt, Like the CLO market must be like this is great. The m and A market is claiming it's the connective tissue issuance giving life to it, but others are saying this is really worrying.
I mean, I think the amount of leverage we see being deployed as capex expense for AI and all things AI continues to increase, I think that the debt service for that will be wholly determined by the revenue streams that AI in general is creating. And so assuming AI continues to deliver on the dream and continues to deliver on the revenue forecasts, then I think that that leverage
in that debt is probably okay. But obviously if the secular shift in AI doesn't act result in the revenue that people are expecting, then that overleverage will be a challenge.
So what is your base case for whether we meet the hype.
I think we believe that AI is a once in a decade, maybe once in a generation technology shift, and that as a result, a lot of this leverage and a lot of the death that's put into the system actually will be fine.
I would say.
I think our take is really that this trend of companies staying private longer does have implications for the availability of AI businesses in the public market, which is I think a really interesting topic.
Let's delve into that topic.
If we look at your portfolio, we can see the companies that you did back from an early stage and well a late stage growth area in the private markets and have successfully gone public, most recently Klana, but Airbnb affirm. I'm also thinking about the ones that still haven't gone public. Stripe, I mean, massive company that many would have thought would have gone to IPO and it hasn't as yet. Data
Bricks just an one hundred billion dollar valuation. When is it likely that the IPO market will open for these companies? Is there just too much to be gained from remaining private. Look, we've just had EA return to the private market, so that the deal goes through.
Well, I think there's two ways to answer your question. The first way is to say that over the last three years we had a historically low period of IPO activity. You all talk about it on the show all the time. Q three there were thirteen venture backed IPOs. Those companies raised thirty six billion dollars in the public market or have a combined market value of thirty.
Six billion dollars.
That's three thousand percent more than happened last year at this time. So the IPO market is absolutely coming back, and we're starting to see signs so that.
If the SEC is opened.
If the SEC reopens, that will throw a wrench in companies like NAVAN, companies like Ethos, companies like wealth Front that have filed their S one and are waiting. The SEC is not open for business, so new issuances will be down.
Matt, has your definition of a late stage growth investment changed definitely?
And it has because companies stay private longer.
So I know, to be fair, you've said that before, So I'm trying tounstand, like, what specific company fits your profile right now?
Yeah, So let's talk about data bricks, which I think is a great example. When I started a decade ago investing in late stage private companies, the idea that we'd be investing in a sixty plus billion dollar now one hundred billion dollar private company was really hard to wrap my head around. But as companies stay private longer, the larger companies are just commanding more market cap in the private market.
And that's a big, big.
Change from where things were a decade ago. There was no sixty or one hundred billion dollar private companies ten years ago. Today we sit and we can count dozen, probably of them.
What's interesting is Wellington does well in both scenarios as we said, and you've well haven't exited yet Klana because Klana goes public, you still hold, but there's a lock up situation. Eventually, maybe Wellington on the one point three trillion dollar assets on a management side, starts buying that up in.
The public markets.
But when is it that you decide to exit from the late stage growth perspective? Is it always when the lock up expires, how long do you want to ride these companies once they do go public?
For us, we think about holistically as a firm where the return characteristics for specific strategy lie and are we able to achieve those return objectives? And so oftentimes it will happen is one of our companies on the private side will go public, we will have generated sufficient return to what we underwrite two that may still leave plenty of opportunity for the public market side to be buying.
And it's that combination of again, as I said before, seeing the full picture of here's how they operate in the private markets, in how they executed, and here's what we believe can happen in the public markets mean that although we may be selling out of the private side, our one point three trillion on the public side may be potentially buying those companies.
And really quick we break the story in July SpaceX at four hundred billion dollars it was a tender secondary as a case study with your assets on the management. Can you even get into something like that at that valuation?
And at that stage the answer is yes, assuming that we think that the return potential is there, and I think One of the really interesting trends is companies stay private longer. Is really to highlight the fact that perpetually private for the vast majority of companies is not a thing because the volume of liquidity in the private markets is not sufficient to give employees, founders, and investors return
of capital that they need. The best way to illustrate that, in my mind, is to point out the fact that the entire private market transacts in a year volume that equals five business days of trading in the public market. So all the private universe transacts in just five days in the public market. So liquidity in the private markets isn't there to stay private forever.
And only for a few really big key names. Matt with Hyler a wedding to management. Always fascinating to have him on the show.
It is time now talking tech and first up.
Intel says it remains committed to its plans for building out its brawling chip manufacturing plant in Ohio. This after US Senator Bernierino pressed the company about delays in the project. In a statement released, Intel says the Ohio one initiatives quote.
Remain an important part of our long term plans.
Plus, Apple defended its decision to use open Ai over Elon.
Musk's Xai in their iPhone software.
This after Xai sued the company in August, alleging favoritism, stifling.
Innovation, and reducing consumer choice.
In a Tuesday court filing, Apple said it's quote widely known it plans to partner with other AI chatbots in the future. A Meta is said to be acquiring chip start up Rebos to strengthen its in house semiconductor effort.
That's according to sources now.
The move aims to cut Meta's reliance on Nvidia, lower AI costs, and support the company's push towards superintelligence.
Welcome back to Bloomberg Tech.
There's just so many technology news stories to get in today. Here's a couple that I'm looking at. Qualcomm allow it by about a percentage point. They said overnight that a Delaware court has dismissed Arm's legal challenge again them. You'll remember that the district court was looking at a case where ARM had accused Qualcom and its subsidiary Nuvia of breaching licensing agreements, and according to Qualcom, that case has been thrown out. Although it's not doing anything to support
the stock now. Reddit is down ten percent on social media, there is some discussion about a drop incitations that Reddit's getting on the open Ai platforms. Our analysts a Bloomberg Intelligence have also cited that data, saying that it is a concern the stock is down ten percent, though we've heard nothing official from either Reddit nor open Ai. And you know, we're going to continue to look into this one.
But that's the basic logic. It's a data relating to the drop incitations that Reddit's getting on open Ai platforms, and we'll find out more current.
We will in our Let's just talk about a stock that has run up in recent days, maybe taking a breather today. It's Core Weave. It's winning over Wall Street. Nearly half of all analysts covering this stock now have a buy equivalent rating. That's after the company announced a slew of new business deals, including one.
Just yesterday with Meta.
Remember now for more meg Equity's reporter come and Renekey is here to join us. It was fourteen billion with Meta, but they'd already just done an extension with open Ai. They've been beefing up outside of Microsoft. The analysts the notes were suddenly seeing more positive read across.
Yeah, so we've seen a slew of upgrades to buy ratings for core Weave. As you said, nearly half of all analysts now have a buy equivalent rating. That's up from just twenty percent just a few months ago. Now, Corey went public in March, so you know, analyst ratings and coverage sort of trickles in as a company, you know,
goes along its lifetime. But this is really a shift in sentiment, and as you said, these deals are making Wall Street analysts feel more secure, more bullish about the future of the company and that it has a diversified revenue stream.
That's not just focused on mistering trades.
The CEO has done a couple of interviews with Bloomberg in the last two weeks, one on TV and one with Brody Ford in the print domain.
But his point's really clear.
Post IPO, he felt they were getting dinged, or at least the stock could have gone higher had they demonstrated a diverse customer base.
Now they are. That's kind of what the market's fixated on, right, Yeah.
That's really what we're seeing.
It's this idea that the long term, you know, in the future, things are going to get better for this company, and right now that's really overshadowing sort of some of the concerns that more bearish analysts have brought up around the level of debt that they have versus the amount of revenue that they're bringing in. So it seems like a lot of those fears have been quelled, at least in the near term. And the other thing that's interesting is, you know, the average price target is bumped up to
one hundred and forty one dollars. That's the highest so far and at least for now. The last time that I checked it was above the current stock price. So analysts have even been seeing some upside for shares, which they weren't for months, you know, when it had this huge run up after its IPO.
I mean, that is competition.
It's interesting that n Scale, still private in Europe, has just raised a pre Series C, having just days ago completed their Series B. All of this speaks to the furious nature or trying to get AI compute right now, and that is what's also helping the wind in call Weyse sales, right.
Yeah, exactly, it's and I think it's one of the first ones to sort of come public and be a very well known name in this space, and obviously it has these great deals, but it has great partnerships as well. You know, it's been linked with Nvidia Open AI. You knows are really the key names in this space.
Carmen Branicky always love her reporting me. Thank you.
Meanwhile, Microsoft it's just unveiled new agentic security capabilities to its Sentinel platform, hoping to offer a unified security offering in this age of AI. We spoke with Microsoft Security Corporate Vice President Basio Jakhar about the updates and to discuss how AI is actually impacting a new age of cybersecurity.
We're very excited about the superpowers that AI brings for defenders, because you're right, we need to use AI for defense and it is going to change this asymmetry in the threat landscape. This is why we're introducing the Security Store, because now anyone can build an agent through Security Copilot and they can publish it in the Security Store. It it enables organizations to quickly discover what agents are available to them right in the tools like Defender and Purview that Microsoft supports.
How much have you had to beef up talent within your know the hiring practices at the moment, because all we talk of is talent wars at the moment. Is it really faced within the cybersecurity area as well?
Yeah, it is.
Cybersecurity is a cultural transformation, and as part of Secure Future initiative, we've taken a big initiative on skilling and upskilling. We have a security Academy at Microsoft where we have we are training every single employee to learn about how to do security in this new age of AI. And we also extend that training to our partner ecosystem and our customer ecosystem, so we all can learn AI and we can learn security together.
That was Microsoft Security Corporate Vice President Vasu Jacau, Google stop executive in Europe, said the continent should simplify complex and conflicting rules on AI and technology. This is Silicon Valley's biggest companies gripe about their impacts and their ability to do business.
In the EU.
She spoke with Bloomberg's Francine Lacroix at Bloomberg's Women, Money and Power Conference earlier today.
Listen to this.
I really think it's problematic that we have so much regulation that is inconflicable with another. So I am eager to engage in my new role.
With sort of.
I would say industry broadly, because whenever I talked to business leaders there's universal frustration. I would say about sixty percent. I think of a recent survey of business leaders say they'd like simplification of regulation in the European Union. I'd like to join arms with other fellow interested parties and really advocate for a simpler regime here.
Okay, be sure to catch more of Bloomberg's Women, Money and Power conference. Tune in on the terminal live, Go Carot. What's next coming up?
UKAI startup synth Percia is launching video agents. We'll talk to the CEO about the tools aimed it making videos easier to create and interact with Q your avatar ed this is green mag Tech. AI video startup Synthesia is introducing an updated version of its platform. It's three point zero the company known for creating AI clones for corporate videos. It counts in video Adobe among its backers, and it serves eighty percent of the top one hundred companies with
its video offerings. Cynthesia co founder CEO Victor Riverbelli joins us now. Congratulations on the launch, Victor, what am I going to get with three point zero.
It's a bit of an overhaul here.
Thank you so much, thanks for having me on to be to be back here. So three point zero is a bunch of different things. The main thing is that we're evolving video from being kind of a static broadcast format. Right you recorded once and everybody essentially watched it is the exact same version of that video into video that's conversational.
And we're launching this new product called Video Agents, where you're going to be able to create your videos like you've always created your videos, but then you can insert these agents at different points in your video and they can serve different purposes. If you're doing a training video, for example, you can have an agent that actually checks if the person watching the video has understood the content.
If you're doing recruiting.
For examples, you could have an agent that interviews it's a case stunt, a candidate that's kind of on the spot. So lose video way for being static to something that's much more dynamic and conversational. And then in the wake of that, roles and launching a whole bunch of new
features just make the core product better. So launching a new copilot making it easier for people to create video in a chat style interface, Launching new avatar technologies where you can take and prompt new avatars into exist, and you can take the avatart that you already have of yourself and you can say, hey, I want to be on a boat, I want to be in a corporate office, I want to change my outfit, And it cerentually just opens up a whole bunch of new creative possibilities.
New possibilities at a time where we're questioning the effectiveness of these AI agents and indeed adoption within enterprise.
Factor, just talk to us about how you've been talking to your customers.
We've had the MIT report saying ninety five percent of pilots aren't working.
How is it working within your clients?
We've always had this manager cold utility of a novelty. You know, We've always said technology is amazing and it's cool. That of course is what we build our company around. But Alsomate we have a solved to have to solve the problem for them customer, right. I think that the MIT reporters is pretty bang on in my own personal experience, I think that like eighty percent of AI tools so they simply just don't work. Fifteen percent of them kind
of stumble their way there. The last five percent actually work. When you look at our business and I think the kind of numbers that we're delivering, it's very clear that our product really truly works. We increased our NR to one hundred and forty two percent from up thirteen percent from from twelve months ago. We have you know, four time to spending, customers pay us small than one hundred
care that we did twelve months ago. And all these things only happen because people actually get bye out of the product. Right now, I think what we've discovered at some DSA is that as important as the models a right like of course, generating the avatars, generating these video clips for people is really important. But ultimately it's about a workflow. Why do you make a video? You make a video because you want to communicate something to someone.
But we spent the last couple of years building out as a platform that helps you with that entire process. You create the video, you edit it this PowerPoint soft style interface, you collaborate with your colleagues, You have content management, translation with a publishing platform, with our own video tare and so what we've managed to do is to take that process and make it as quickly as we can.
You quantified that the market for these tools and gave numbers and those that you feel don't work, and we as a team can go away and check that math. But for Synthesia three point zero, do you have some benchmarking data that that is evidence of its performance and capability against the large field that is text to video?
Well, I think the way you bench back these things depends very much on the use case.
Right If I'm creating a training video, that's a very different benchmark down creating a marketing for example. I think what we're seeing very clearly, like you know three point zero, a lot of these things, we're literally releasing them as we go right now, so they haven't been in the market for twelve months.
But what we see is.
That if you do training content, for example, engagement is increased by thirty percent versus.
Sharing at as normal.
Text's what benchmark is other text to video tools, but we're really good at is avatars.
That's the thing that we deeply care about.
We're now integrating other models as well, So if you want to use vio free in the product, you can use that. We're adding a bunch of other models as well. So I think for us as a company, I don't really think it makes sense to benchmarkets against text to video tools. You know, for us about the process of communicating something to someone, and that goes much deeper than just to models themselves.
This week, the big focus has been on Meta's Vibes it's a funny name, and the reporting that open ai is looking at a video tool in conjunction with being a social media platform. You've been on this program and discussed, you know, the risks of AI generated video content in social domains.
But what's your reaction to.
Those two moves by those two players.
I think it's very predictable.
I'm quoted, you know, I think four or five years ago and in a book say that I think by twenty twenty six, ninety five percent of all content and incident's going to be AI generated, And I think that's that's where we're moving toward style. It feels odd, it feels weird. I think that we're going to be watching AI generator content. But I think, you know, ultimately will care less about how something was produced, will came more
about the content itself. A lot of the content people make with AI today is what most people would call slub right. It's not very high quality. It's kind of like engagement farming, engagement baiting. But I think they'll eventually be replaced by people using these tools to create awesome content. There's so many great creators an incident, they'll pick up these tools and they'll they'll and they'll use them to create great content. As for the big platforms moving into
this space, I think again highly predictable. These companies ultimately make their money off ads, right, and to launch an AD in one of these networks, you want that to be video in twenty twenty five because that performs way better. And these platforms they want to offer you the tools who make those videos for those ads, right, which is exactly like Google owning the platform to create appwords for search engine marketing, for example.
I think it's very particularly going to move into this space.
I think also predictable that they're going to offer these tools inside their apps. You know, it feels new maybe that they're adding AI video, but really they've been doing this for six seven years, you know, like putting dog
gears on yourself with face filters. All this stuff is roughly the same technology, right, So I think it's just it's just like this of trajectory of you know, more and more AI being part of the content creation flows both in our personal lives but also very much in our in our corporate life.
And boy am I getting sore to maine videos coming my way and the standalone app has been announced just yesterday, Victim.
But I'm interested.
In your story with at the moment avatars and being liked by in video known less. We said that you're already back by in video and Adobe. Jensen's just went on stage last week in the UK. Thing is going to get into your next round? When's that next running round happening?
Time will show you know, we're very appreciative of Jenson now in video partnership, and I I think, if anything for us as a testament to the fact that we drive so much real value for our clients that we're way past the kind of demo stage. I think, you know, we're all capitalize. We've raised a bunch of funding rounds. Who knows where the next one is kind of calm, but but you know, we we've give you our word that he'll get to participate in.
A Victor ripperbelly CEO Synthesia. Great to have you back on the show. Thank you. Amazon has overhauled devices, including its Echo and Echo Studio. We spoke with the company's head of Devices and Services, Panels pan A, who says the products were built to be showcased in the home and could help customers stop glancing at their smartphones.
A lot of times we take out our phone, we get distracted. I'm at the dinner table with my kids. We have this idea that we want to keep our phones down right because we want to be present with each other. And there's so many times where you pull out your phone to answer a question, almost like you just said, but now it's just changed, it's completely different.
Just say a like, so have the conversation.
It's quite literally all the information there and it's conversational. Not only that she can then get the next thing done for you.
Bloomberg's Mart gum And has written and it's based in part on a conversation with you, that Amazon's overhauling its device is to take on Apple in this AI era.
Do you agree with that? I haven't seen it? Can I say that? Let me read that article that here's what I'd say. We build our products for our customers and for people. My whole goal is quite simple. We want AI to be useful for people, end of story. And I think we're building devices to do just that. And I do believe they're beautiful. I think they fit in the home. I think they're so well thought through that when people use these devices d They're going to
love them. They're just going to love them. I can't like this is something. I just want people to get their hands on them.
Great conversation.
Amazon's SVP of Devices and Services, Panaspan a look right off the heels that Amazon launch, Google out with its new smart devices powered by Gemini AI as being gam Bluemag's Dana Woman for more. So, there's doorbells, cameras, there's speakers what call you right.
Right, So there's two cameras in a doorbell and a smart speaker, which actually isn't coming out until spring of next year, which is going to give Amazon quite the head start with its own smart home lineup, which, as you noted, was unveiled yesterday.
So we have a little bit of competition here on our hands team Amazon, then Google. They both seem to be making a claim Dana to the home, the AI in the home. What's kind of your reflection on the last two days of announcements.
So both companies have the challenge of making exciting devices that really are designed to blend into the home. I don't think people tend to get as excited about a smart video camera or smart doorbell as they would let's say a new iPhone. And so both companies have overhauled their lineups and both are really staking the future or at least the near term future of their ranges on artificial intelligence and weaving an AI in a way that
is useful for consumers. Google, for instance, is saying that you can ask if there's a new feature called Ask Home where you can literally ask your products. Let's say, what happened with the vase, and it will sort of dial back the footage and tell you why an item is misplaced or broken. Let's say, in a really extreme example.
It is about an ecosystem, though, and keeping old uses engaged. That seems to me why they're saying they speak is delayed right, because it is quite a delay until Spring twenty twenty six.
That is the way Google has positioned it. They are saying that they are prioritizing current users of the ecosystem, many of whom have devices that go back, if not a decade, close to a decade, So trying to roll out those AI features to as wide of a population of devices as possible. And then they say eventually unveiling this new and shiny smart speaker that's coming.
Bloomberg's Daniel Wilman with the reporting across devices, thank you very much. Sticking on the devices front, Peloton is raising prices both hardware and membership fees as part of a product overhaul. The news sending shares down significantly, although they paid some of that decline in the last few minutes or so. Our consumer tech reporter Samantha Kelly joins us, what do we need to understand here? Kara and I are both hardware users of Peloton, we both as subscribers.
What's new in our use of this text?
Yeah, so it's a revamp across its entire line. So five new products. That's a traditional base level bike, a bike plus premium model. There's the tread treadmill, the tread plus premium again, and the Row plus. So the big differences here are the premium line. All of them really get a new swivel screen, which might not sound so exciting, but the idea here is you can turn it around and it opens you up to doing you know, yoga classes,
strength classes. The premium line has had this before, and now it comes to the base level the premium line. What's really kind of special here is the new camera system. It tracks you, checks your movements, its AI to give you personalized custom workouts, really gets to know your your movements, gives you PEP talks and counts your reps. And this is sort of what the company is banking here on AI.
It is interesting, you know, just following up on Amazon and Google infused AI, even Peloton, you wouldn't necessarily think there would be an integration here is also embracing AI as.
Well plotan IQ, and it's kind of meant to be like a cross trainer in many ways. The thing is, I think you get new people drawn in or is it just getting at an eye to upgrade all the time.
Yeah, it's a great question.
So all the models, even existing ones, can upgrade to have this AI system now. But again the premium models can have the camera movements, but it's not necessarily something you know, you're going to drop thousands of dollars to get a new camera system if you have equipment that maybe you're not even using right now.
So it's it's.
Definitely to drum up excitement and that is pretty fun.
I got to try it yesterday.
It is kind of the Yeah, it's pretty neat. The way it works is basically there's like almost like a selfie camera and they put you next to a pre recorded instructor and you know, I was lifting weights and it was caping track of it and it was giving me some suggestions and so pretty useful depending on what you're looking for.
It's so interesting though, I'm using Hinge Health when it comes to physical therapy, you can just use.
Your own phone. Yeah, as a camera medicine.
And so there is going to be this sales pitch they're going to have to do, is why build it into the product?
Why can't I?
Now you and I are stuck right so I have bike in tread. I think you have bike right in tread, So like, okay, we face a choice, but I go back to the stock reaction very quickly. Sam Imi Mark was on the show earlier this week. It's the latest turnaround and investors are selling that.
Yeah, yeah, I mean it's also it's like, are people going to actually do this? It's like fifty dollars a month they're in. They're increasing the subscriptions also, so five extra dollars to even keep you in these classes, and that that really adds up. Although Peloton says, you know, you can drop forty dollars on a standalone class, so maybe it really depends sort.
Of what you're looking for.
So true, forty dollars if you want to go to the latest bar class in New York, or you do a Peloton Blug's Sam Kelly, I'm glad that you were trying it out for us. Meanwhile, that does it for this edition a Bloomberg Tech right here from New York and coming up in fact in the next hour. You don't want to miss our talk with Peloton CEO Peter Stern's joining and these new devices.
Don't want to miss it.
Edge that pace, that power, that focus. That's a big interview.
The show had pace, power and focus. Check out the pod. You know where to find it. It's on the Bloomberg terminal, It's online on Apple, Spotify, and iHeart It's Wednesday. I've got a couple more days here in New York. We've got a lot more to come in the week. Stay with us. This is Bloomberg Tech