From Mahart where Innovation, money and power Collie in Silicon Vallet NBN. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
I'm Caroline Heide Bloomberg's world headquarters in New York, and I'm Ed Ludlow in San Francisco.
This is Bloomberg Technology.
Coming up full earnings coverage ahead of shares of Spotify and Palanteer. They surge on strong results details to come.
Plus strategists from Citybank warm positioning in technology stocks is so bullish that any sell off in the sector could spark a market route will break down.
The report and Adam Newman and other investors they're exploring an offer to buy we work out of bankruptcy or bringing the latest reporting on the matter. But first that's checking on these markets, because as a macro story, it's our to the sell off. Significant sell off in the bond market. We see just a little bit of calmness as we anticipate, of course, a lot of fed speak to come. We're off by about tenth of a percent
on the Nasdaq. More broadly, Tenure yield down five basis points after having risen and risen fast in the last two training days. But I look at what's happening in China. This really is the story of a global nature today. Ed we see, of course the talk that Chijinping, at the very top hierarchy chain of China is starting to debate what to do about the route the sell off that continues to afflict some of the Chinese stocks, and therefore some of the internet names do well today. Training
of Chinese stocks up some five percent. When you're looking at the Nasdak Golden Dragon today we're up five point four percent. Moving on, let's a happening in the world of crypto. We're up more than two percent in fact, sort of outperforming the rest of the tech names. At the day, we're currently training at forty three thousand.
What if you've got on the micro This is an AI story, and this is Palenteered. The shares actually off session highs where they are up thirty percent, but on
track for their biggest jump since May. Netting come of two hundred and ten million dollars in the year, just gone their first full annual profit ahead of expectations, and what Palenteer's saying is that for four year twenty four operating income will be up to eight hundred and fifty million dollars, way above what the street thought that they could do. The story unbelievable demand for AI products. In fact, so great is the demand. Palenteer CEO doctor Addix carp
told Bloomberg last night that they can't cope. They don't know what to do about all of the incoming for their AI platform. A really big move to the upside in that stock will get deeper in that with our analysts in just a moment. Spotify is interesting before the bell. This is a global name of a lot of US investors. It is on track for its biggest jump since October. Are two hundred and thirty six million subscribers, a one million beat against what the street was expecting.
But I kind of reflect on the last.
Few weeks with shows Caro and we've been talking a lot about the difficulty in the streaming landscape, all the changes that are happening. They're still seeing growth and the streets cheering it. Let's get more on the details with Bloombo Lucas Shaw, who leads our screen time vertical, and is this just about the subscriber beat, the premium subscriber beat.
I think it's that they beat on everything.
You know, oftentimes when Spotify has earnings, they delivered consistent user growth really for years, but there was there's always something. It feels like that investors can nitpick. The margins are a little off, the revenue is a little off, the forecast is a little off. This time, they really beat across the board. You know, they're growing fast and they've ever grown, which is pretty impressive for a fifteen sixteen
year old company. They're doing it with free users, they're doing with paid users, and the margins are starting to get a little bit better. You know, it's still an unprofitable company, not great, but between raising prices, cutting costs, and cutting back on some of the expenditures, it's looking like a better business than most investors.
And those expenditures were people Lucas, an awful lot of people that went more broadly, where then, do we think that the area of focus is at the moments for Spotify because they pull back on podcasting, but then they well more than two hundred millions going for Joe Rogan to remain. How are you seeing the company continuing to innovate?
Well, when I brought up expenditures, you're right, you know, I probably should have been a little more caring when it comes to how many people they cut. I was actually thinking more about the kind of the shift in the programming strategy.
You know, you brought up Rogan.
It's important to note that that podcast will no longer be exclusive to Spotify, and that's part of a real shift and strategy where they've taken shows. You know, they went in first with podcasting and got a lot of exclusive rights to shows by a lot of companies. Did that sort of amass the audience and bring podcast listeners onto the platform. Now that they have people there, they're
more than happy to take those shows wide. And so Alex Cooper's show, Colored Daddy and Joe Rogan they can be anywhere.
Spotify just wants the.
Ability to sell ads, distribute the shows. And then to your point about you know, kind of what is next and big, they're making a big push into audiobooks.
Well that's what caught my eye.
It's a bright spot for the company, and they kind of trialed the giveaway right so in some markets they would say have a few audiobooks on us, and now they're kind of solidifying that that strategy. But it's also like a cultural moment like audiobooks are in now.
This is great for Spotify. Yeah.
Look, Audible has been the dominant player in audiobooks for basically as long as audiobooks have existed, but Spotify sees an opportunity there, much like they did in podcasting, where Apple was the dominant player, hadn't really innovated all that much, and because there are already hundreds of millions of people who use Spotify to listen to music, they figured it would be pretty easy to convert them into doing some other type of audio behavior, that being podcasting. That has worked,
at least from an audience perspective. You know, Spotify's probably the number one podcast platform in the world, maybe number two, depends how you want to classify YouTube and Apple in audiobooks, it's a tougher slog.
Audible is not quite as lazy, I would.
Say, as Apple has been in podcasting, but Spotify does have a much larger customer base that's just coming in every day to listen to stuff.
Nucas was great to catch up and check out your wallup as is some of the best Luka show. We appreciate him on All Things Spotify. I meanwhile, let's turn to another phenomenal mover, as Ed was just pointing out Palenteer absolutely thriving on the day up almost twenty one percent. They gave higher than expect a profit outlook for twenty twenty four. AI demand drive sales is off the charts.
Man Deep Sing is here from Bluemeg Intelligence. Dan Ive's making us laugh saying it's the messy of the reports when it comes to AI, and he means leo MESSI when it comes to the absolute studter of a soccer player. How are they not able to keep up with demand? Who is coming with the demand?
I mean clearly the lam wave that we have seen over the last twelve months is a nice tail wind for them. And what Talenteer has is a visualization software that helps you leverage AI and also use it. So what companies are struggling with right now is you know, they are looking to train their lambs and.
Then deployed on the field.
He quipped about you know how chatbot is not such a great interface, you know to interact with an LLM, and they do have, you know, visualization software that is being used for defense purposes, healthcare customers. So I think from a vertical AI strategy. They do have something unique and think of it as a copilot. Everyone right now is trying to deploy a copilot. I think Palenteer solution
will resonate for certain verticals. And that's what they called out yesterday with the US commercial customers because traditionally they have been heavy on the government side, but actually they are now adding new customers on the commercial side, which is what I think the market is excited about.
And this is what doctor Alex Karp told us in an interview last night that the focus essentially is building out that commercial business. Our commercial business is exploding in a way we don't know how to handle.
We don't know what to do with you onslaught of demand.
But Mandeep and Caro, I'm just just human me on this one. I'm just going to go back a few year is pre IPO, where talented didn't care about salespeople. They weren't really worried about onboarding customers any of that stuff. In fact, they ridiculed the idea of salespeople. They just wanted to do their own thing. Now, dotor cops basically saying, uh, we need some sales reps and some sales engineers and we need to be able to give this to customers.
You convince many they can actually do that make a business of it.
Yeah, Look, they have a very different selling motion, So compare them to hyperscalers. What Microsoft is doing with open ai really setting infrastructure and then open Ai providing the LM and making it easy to train your own model. Palaneer solution is more out of the box. If you have geospatial data, you can use their platform and it offers something unique. But I don't think it applies to all sources of enterprises, and that's where you know, having
a salesforce could help. But we also know the customer position costs go up when you have a direct salesforce model. So to me, the competitive dynamics are between you know, the likes of Palenteer and Snowflake or data breaks that also compete in the same space, but they leverage the public cloud more than Palenteer does, which is more on prem. So it's really about enterprises doing on prem versus leveraging the public cloud.
Here, what's interesting is is pulling employees out of Europe at the moment Germany, France. He just thinks that in the moment the demand isn't there. He thinks Europe sort of not taking part in this AI wave. Are you seeing that regionally speaking?
Well, so, I think it makes intuitive sense because Europe is probably behind when it comes to leveraging lllms or customizing lllms. So from that perspective, even though there are startups like Mistrol over there, you don't see companies being at the cutting edge of deploying these lms. So one could argue that right now the market is not ripe for deployment.
They just don't want to use a US company.
That's that's also I mean, Talenteer is controversial. We know that, and you know the fact that they've been so vocal about you know, everything they do with regards to the Middle East conflict, and that has actually helped their international business. But not every commercial company wants to engage with, you know, a company like Valenteer that clearly has very vocal views, and that could go against you, you know sometimes when you're trying to sell software.
Man deep seeing of Bloomberg Intelligence, great to have your analysis.
Let's just talk about technology's impact on the broader market right now, because City out with a really interesting note warning about positioning in tech stocks in particular right now, saying it is so bullish that any sell off could actually trigger a wider route with the anas, noting the
NASDAC shortbets, they've basically been completely cleared. Let's dig into what is a concern for the broader market after Tangler Investment CIO Nancy Tangler, who we love having on because you're micro detail about individual companies they're leaders, but also the macro impact of tech right now, are you worried about any jitters and what that might mean from the smp A broader benchmarks.
Rilyan, I don't think I'm a permable.
You know, I've been doing this for forty years, and there are plenty of times when you want to head your portfolios or get out, but I.
Don't think this is one of them.
And I think you use weakness in some of these names. If there is a selloff and there we'll get a correction and that will be healthy for the market. And I think then you want to add to names that you either don't own or you don't think you own, a not enough of you heard the Palenteer, I mean you just had a great interview on Palenteer that was an extraordinarily bullish report for the monetization of generative AI.
So the naysayers.
Have have been fleeing the tech trade for the last four years that I can remember.
It might be actually even longer.
And every time technology comes back, and we've talked about how they're the new defensive names because they generate reliable earnings growth, and we've seen that again this earning season.
What's been interesting is perhaps some of the companies that have outperformed that we finally get to understand where AI fits into the business model, and one that you haven't liked has been marks like a Berg's Meta remind us of why and why perhaps you know, are you changing your tune since the Mega rally come Friday?
No, I mean, we've owned it in the past, and we've made a lot of money on the stock, and we got out in the high three hundreds a couple of years back, and you know, I've.
Been wrong on that.
But there are other places where we've put our client's money and those have been maybe maybe not quite as good or in some cases better.
But I just don't like the two share structure. I don't like the business model, and you know, and I've been wrong. So it's an advertising company for sure.
They are going to adapt and adopt AI and that will probably continue to drive margins. But we just there's better places in our view. So that's where we've been hiding out.
Okay, so what would Meta and Zuckerberg have to do to change your mind?
Well, I think for now we've missed it ed and so I love the dividend and whether or not it was self serving, I think he keeps about seven hundred million dollars a year from the dividend. I love the notion of it, and I think Google should be paying attention Amazon, which is a free cash flow course or tank, whereever you want to characterize it.
But in terms of Meta, I just I think we've missed it.
So it would have to come down from evaluation standpoint, and we would need to see continued monetization across their platforms. But you know, listen, he's done a great job and there's no disputing it.
Nancie.
There are a few things as romantic and poetic as the Bloomberg Markets wrap headline, which reads Wall Street on hold as trade is a wait more fed speak inspiration and energy in the market. But it reminds us we forget all of the AI stuff. We're still waiting on the FED, right.
I think the market is beginning to not listen to the FED. And the reason I say that, ed is if you go back and look at Chairman Pal's comments. Historically, he has been adamant about we're not even thinking about thinking about raising rates. We won't raise seventy five basis points. We're going to stay higher for longer. And each time he made those statements, he reversed himself a short time later. So I think what the market is seeing is a we may or may not get a cut in March,
but we will get cuts this year. I think that the market is willing to coexist as we did in the nineties, and I've talked about that on your show, with higher interest rates because they're.
Not debilitating and we've seen that.
I mean, for the large tech companies, higher interest rates have actually been augured well to their balance sheet. They've grown cash because of the higher interest are receiving on cash.
So I think that the market is.
Saying, Okay, productivity is improving, there is a tight labor market, and again that's going to continue to benefit technology companies. The FED matters less and less each day that goes.
By my view.
Nancy Tangler of Laffa Tengler Investments. Great to catch up, Great to have you on the program, Thank you very much. Coming up here on Bloomberg Technology, we Work co founder Adam Newman and capital providers including Dan Lobe's Third Point, are working together to explore an offer to buy the coworking firm out of bankruptcy. According to a letter sent to wee Work's lawyers, I did just say that and we will discuss it.
Next caroc ah deja vu Adam Newman again. Meanwhile, let's have a little look at what's happening with Hertz because actually we're now trading higher on the course Juggernaut for car Rental, we're up some nine percent. We had dipped into the read earlier because they massively lot missed in terms of their overall earnings share loss adjusted. One dollar thirty six per share is what they got. Why, Because they're selling down. They're offloading those twenty thousand Tesla evs,
about one third of its overall electric fleet. But for now, investors starting to see some opportunity as to how they cut costs going forward. This is bruly meg technology.
Okay, time for talking tech and first up.
Potential investors in Elon Musk's artificial intelligence startup XAI are focusing in on two key selling points, access to Musk's array of companies, also known as the Musconomy, and the early success of a titan in the space open Ai. A slide deck that circulated among potential xi investors in December and January prominently features both Musk Strap Record and open Ai, including a slide showcasing the key attributes that
drove open AI's six more coming. Plus, the newly released Apple and vision Pro headset is presenting some customer service snags for users. If a Vision Pro owner forgets their pass code, the only way to get the device working again is by bringing it to an Apple store or mailing it to Apple Care custos. Smart Apple would then
raise and reset it. And we Work co founder Adam Newman is teaming up with capital providers, including dan Load's Third Point, to explore an offer to buy the coworking firm out of bankruptcy that according to a letter sent to Weework's lawyers, Newman and Third Point I mean trying to get the information necessary to formulate a bid which would be for the entire company or its assets back since September December.
Sorry, Cara, and we are going to dig into this more because it's not the first time that Anna Newman's wanted to ride to the rescue on there. Mart Million joins us now for more on the story, and actually, like leak twenty twenty two, who is trying to make bids to basically resuscitate this company he was so associated with.
Yes, so apparently there's been a lot happening behind the scenes that hasn't been too deeply reported on. But Newman just like can't let go of this old company that he started. So it's like we're maybe going to get we crash season two, Adam Newman coming back. It'll be fun. So yeah, as you mentioned, he apparently made a bid
in twenty twenty two. According to his letter, he most recently offer another sort of like bankruptcy financing offer, and now he's teaming up with other financiers to make a big bid, maybe to buy the whole company.
He hasn't been too.
Specific, but he says he's frustrated because the company is not taking him seriously, not giving him the information that he wants.
Mark Millian sharing his idea of fun with the millions of yous.
What is We Work?
What it is now and what they if they save it, hope to make it into.
We Work is in bankruptcy. It's deep in debt. They can't pay their bills. They're renegotiating with their landlords. We Work is in deep, deep trouble. And for a lot of people, We Work is Adam Newman, which is why in some ways this does make sense. I mean, he deserves much of the credit for driving the company into the ground, which is why he was kind of pushed
to step down in twenty nineteen. But the last few years it's been a tough It's been a tough economy for a real estate business, for a commercial real estate business in particular. So I don't know that Adam Newman would have been able to lead We Work out of the crisis that it went through in the pandemic. But what is we Work without Adam Newman? Can can most people even like name the last couple CEOs of the company, And so maybe maybe this doesn't make sense.
Maybe this is We.
Works last shot, and maybe they should take him seriously at least that's what he's arguing.
To the company.
All right, but invegs Monk Millian on the what next for we We'll keep tracking it. Another top story in Vidia and Cisco. It's teaming up to help companies build in house AI computing, an attempt to push the tech beyond the big data center provide a Cisco is going to offering Vidio based equipment popular for developing AI models, along with its own networking gear. And herein lies the
story forget h one hundred. There are other things Ethernet cables, other server design components that go into all of this, and Cisco has been saying for a little while we will get some of this.
Yeah, that's absolutely true. What Cisco is really offering here, more than anything else, for Invidia is a sales force. Invidia doesn't have a channel into this world of companies, of corporate data centers, of all of these small to medium all the way up to large companies that want to perhaps get in on the AI game, want to perhaps put their own hardware in place, but just to have no real way of doing that. And that's what Cisco can offer for in Vidia here, or at least.
That's the plan the Nvidia processes go into them seven. But if you look at where Nvidia sells to the cloud providers, it's kind of shifting some spend.
Basically, well, they're trying to right, I mean, not a done deal. Yeah, tremendous success with the cloud providers, and that's absolutely wonderful. You know, it's driven their sales to you unprecedented levels and it's great, but it's already forty percent of their revenue. There's a risk there. I mean, what are Microsoft, what are Amazon? What are Google doing? They're making their own chips. Clearly they know the importance of these things and want to do it themselves.
They don't want to be beholding all.
Right, Bloomberzi and King, thank you well the election. With Nevada holding its state run Democratic and Republican primaries today, the US election is on everyone's mind, including metas. The tech giant will begin labeling more posts that were created using AI tools as part of a broader effort to prevent misinformation and deception from spreading on the platform's Facebook, Instagram and threads during what is a critical election year.
Let's bring in Bloombergs, Kirt Wagner and Kurt this morning, you did an interview with Nick Clegg at Meta, and.
I guess the question.
Around Meta is always whether that one definitive policy or point of technology is going to fix all of this, which we know the issue is the spread of misinformation.
Yeah, and I think the easy answer is that no, Right, there's never going to be a single solution to a problem, especially when it's complicated as AI generated content. And while META is trying to you know, push forward into digital
water marking and metadata. Right, So, if you create an AI generated photo or video using metas tools or even some others in the industry, Google Open AI others like that, there's going to be these sort of invisible markers on that content that then META can use to sort of label it. But you know, bad actors aren't going to follow those rules, right, They're going to figure out ways to try and get around these watermarks, to try and get around miss metadata because they're out to cause chaos.
And so I think Nick Clegg, to his credit, acknowledged that this is not a one size fits all solution, but it is better than nothing for them.
Of Course, Nick Clegg so integral to these sorts of conversations, having had his own role in politics in the UK for so long before coming on to Meta. I'm interested in what he had to say, particularly around the recent audio doctrin of Biden ahead of the primaries that seems to have been a real catalyst for worrying about AI around elections. He seemed almost relatively optimistic, right.
Yeah, I was surprised. One of the questions I was most eager to ask him was, you know, how big of a deal is this going to be for the twenty twenty four US election?
Right?
We're all sort of bracing for this inevitable moment where one of the candidates has a deep fake of them that goes viral online and it harms their campaign. And Clegg was not nearly as concerned as I thought he would be. And most of that is because he's like, everyone is already looking for this stuff. Right the minute that this happens, the minute that you know Joe Biden is seen in a deep fake, his campaign is going to raise the alarm. They're going to call Meta, they're
going to call the press. And so his sort of feeling was like, there's so many people paying attention right now compared to years past that he doesn't actually anticipate this is going to be as big of an issue as I think a lot of other people worry about.
How refreshing is some optimism, Kurt, weapmon, We thank you so much, coming to us from Denver. Meanwhile, let's talk more about potential threats and indeed some of the benefits the way in which AI technologies might be a solve and play a role across the year of global election cycles. Christopher Olberg's with us. You see a threat intelligence cloud
platform recorded future. Christopher, your expertise here. Let's just just dwell on what we were hearing from Kurt, the fact that there's some optimism that everyone's focused on it, so we won't be able to have this sort of level of misinformation and deep fakes that we're worried about. Do you agree?
Yeah, I know, first of all, I love optimism, just to be clear, So that's good. In the second, you know, the amazing thing is that we're actually sort of able to collect all this data and we can organize it, we can analyze it. Then we can sort of look for what's anomalists the stuff that does stand out, And I think it's fair fair to say that the sort of the big things. You know, if somebody does that deep fake, whether it's Joe Biden or Trump, and you know we're going to be able to find that. You
may not even need an algorithm. I think it's the real point. I actually worry more about the subtle stuff. When somebody in a subdistrict in Ohio somewhere, that is the place which is actually going to make the difference whether an election goes left or right, where somebody may not even have to introduce fake stuff, but they just need to manipulate the actual news stream of actual events happening.
There's much more subtle manipulation that I think we need to watch for, and these big deep fakes that will be sort of I don't worry too much about that.
So let's hypothesize.
Seemed to be tefla on wise anyway, So I.
Mean, Christopher hypothesize. You know, there's a manipulated photo of the local polling station where you might go and cast your vote. These sort of more intricate, smaller scale issues that really impact certain moves within certain states and geographies. Then how do we as a nation give the average consumer confidence that they're not being manipulated so.
I think that's going to take a long time. This is not going to happen overnight. This is that you know, we heard Paul no Cassona from NSA that we just step down from NSA say the end of the day. That look, the sort of his view was that our election as we come into twenty twenty four is going to be the safest on record. So that's good to hear. Now, it's an interesting year. The US has a big election.
There's you can count twenty you can actually count forty major elections in the world around, you know, sort of here. You know, in the full year, UK, Singapore or Indonesia, India, wherever you want to go, there's big elections. So I don't think we're going to get confidence on this in the short order. There's ways we can deal with these problems, but it's gonna the cat is out of the bag, and I think it's going to take some time before
we can get back to a place of confidence. It's not going to happen overnight.
The challenge here is the same as we see in the cybersecurity context, that there is access to artificial intelligence technology for defense and the threat actors have access to the same artificial intelligence technology in the context of this election, how do you feel about who has the balance of competence of how to use it? The threat actors or companies like yours who aim to help fight back and prevent things spreading like AI generated content.
So, first of all, the good news is to the United States have the best AI technology in the world. I think we've actually done work in our own analysis here at the Record of Future where we've gotten our hands on the sort of tiptop best Russian and Chinese AI and using whatever methods we'll leave it at that, to get our hands on it and playing with it and you know, doing all kinds of interesting stuff with it. It's not as good as what we have here. So the good news is the US is ahead, and it's
important that we keep being ahead. And I think there's incredible there are incredible ways that we can apply this sort of intelligence to be able to discern malicious information, among other things. So there's great ways that we can help with that. And to your point, it's no different with sort of general cybersecurity, general intelligence and we're talking about here in this information. But we're going to have to keep investing We're going to have to be aggressive.
We have to be careful so that we don't put big regulatory stamps or stops in the way of staying ahead. Again, the US has ad of Europe because of regulatory sort of being a little bit more permissive over here. So we have a lot of good notes for us.
We've got to keep that.
Chris Fauberg, CEO of Recorded Future, we appreciate the optimism on this show.
Thank you. Now coming out, we're going to discuss all.
Things European venture capital with Hector Mason from episode one ventures Tune in for that conversation.
Caroen, what are you looking at?
Actually looking across the Japan and Nintendo's raised it's forecast for the Switch console ed sales. They think they're going to have fifteen and a half million in fact for this particular year, the fiscal year. The profit actually is therefore going to be on the higher end of expectations. It looks as though the holiday quarter was pretty good customized editions. In fact, of the Switch featuring Super Mario and animal crossing themes, it really helped lift the sales
of the Japanese market above expectations. More broadly, let's take a look at the latest in the venture capital world over in Europe. Episode one Ventures one of Europe's leading early stage funds. It's launching a seventy six million pound fund. They're third to invest in B to B software. Let's chat through all of it with Hector Mason, general partner over at Episode one Ventures. And we're interested Hector in
particularly some of your cornerstone investors. Not only do you take money from seasoned fowlers in and of themselves and some great companies that were well known, but also the UK government backed money and think of British patient capital in particular National Security Strategic Investment Fund. What is it that they want to see grown in Europe and in the UK more broadly.
Yeah, absolutely, thanks for having me on. So we have been around for a while and we've built a really loyal following.
In our investor base.
And so for a fund like ours, we're at B to B Software fund investing in you see seed stage companies largely based over here in the UK with checks between three hundred thousand pounds and about three million pounds.
It's really important to build that diversity among your LP based So yes, we have institutional investors who backed US fund after fund, But as you mentioned, we also have this fantastic group of highly successful entrepreneurs, including the founders of many unicorn businesses, who have chosen to trust us with some of their money in this latest fund, and they come in and alongside those larger investors who are investing in US really to ensure that the UK continues
to deliver outstanding technology on a global stage.
How would you summarize then the kind of early stage environment right now in the UK particularly interesting that you are talking pre seed, right that you seem to specialize in this area where you can write a small check, but many of those portfolio companies do actually go on to raise at high levels.
Yeah.
Absolutely, we're a specialists at pre seed and seed, and so we're investing at the very earliest stages into what are initially fledgling startups and we hope and we've seen that many of those go on to become large companies
with many hundreds or even thousands of employees. And so the reason that we invest in at this stage is that there are fantastic returns available and you get in at the ground floor of these companies and you can see them progress and go on their journeys to successful outcomes. And actually we've seen a seventy five percent graduation rate in our portfolio where companies go on to raise successful Series A rounds of funding, which is about almost four times as high as the market average.
What's interesting is this comes at a time where the UK has very much been trying to put itself front the center when it comes to AI. We think of the AI Summit late last year. I'm looking at Robin Ai among your portfolio companies, a company we've spoken to the leader of that business and clearly applying artificial intelligence in the legal frame of applications. There is some interesting views out there in the UK at the moment that there should be more of an impetus to regulate and
the UK government isn't getting ahead of this. What have you made of the UK government saying look, we're just waiting and we're watching and we're talking to civil society and entrepreneurship in the country more broadly.
Yeah, Look, it's a great question, and there's a lot
happening in that space around AI regulation. And we actually have a couple of aiphds on our team here at episode one, and so we have a natural interest in the space and it's really important that people are developing these technologies with an ie on being responsible and so we love companies like robin Ai, and we have many other AI companies in the portfolio who are able to build real defensibility around their businesses, and whether that's through
proprietary data that other people would find it very hard to access so they can train models that highly affect and can outcompete other players in the market, or actually just more generally companies using AI as part of their existing SaaS tool to make their products better for their customers. We also really like companies that are using AI to
help enterprise adoption and speed up that process. But you're absolutely right, a lot of focus needs to be placed on how we can do this responsibly, and we're pleased to see that the portfolio is taking responsibility there and being cautious around and rolling out the technologies.
Hector Mason, General Partner, Episode one. Venture is great to have some of your time from the UK. We don't often talk about that UK market just in isolation. Really interesting conversation. A new AI company wants to tackle a niche problem in retail finding a home for returned inventory that would otherwise be gathering dust. The company called vended It is billionaire John Paul de Juria's latest venture and delighted to say he joins us right now on Bloomberg Technology.
This is interesting. If I return any good, it'll end up in a warehouse somewhere JP and there is a market for that. There are discounters, There are retailers that are looking for that big volume of used or returned infantry that takes a long time to get hold of it. Just explain the point behind venditte.
Oh you would love to. Okay, By the way, it's bigger than people know. One in six of most retail products are returned one and six. It's a trillion dollar business. About three years ago it was around three hundred I think fifty eighty million dollars. This year it will be a trillion dollar business. And what happens is this, people buy things, manufacturers overload things, okay, and then what do they do with it? City and warehouses which cost money,
Trucks go back and forth. So what we've put together here is a special platform that cost the manufacture or of course our clients nothing to implement as well as you But what it does is it connects the seller and the buyer or manufacturer instantaneously right there instead of sitting around in the warehouse for weeks and being shuffled around.
Now it also eliminates landfills because we have to renew logic one of our offshoots of our company where we redo everything, so it eliminates the landfills or sitting awhered. But also this it eliminates tens of thousands of trucks hauling stuff back and forth, back and forth, back and forth.
And then what's there on the shelf. It gives the person that has it, whether it's a manufacturer that we deal with or the retailer we deal with the highest value and highest return instantly where they go directly to the second person who buys it. So what we do is our software or AI takes on our platform, it takes it from the person that has it, whether it be the manufacturer or the wholesaler, and sends it out to through our implementation, all these various people, thousands of
them everywhere that are the actual buyers. It puts them in touch. So you take something that's worthless and you make it valuable. And so that's pretty good. Yeah, that's pretty good. You did instantly instead of in weeks.
Here's what I want to understand.
We know you as the founder of Paul Mitchell and later, if you don't mind me saying, you built a lot of your wealth on the sale of Patron to the US.
Patron excellent Patron to Kuil.
How how did you end up in an AI company.
Well being into the environment and helping out what's best I can industry with it. I got involved many years ago, seven eight years ago with Renewed Logic. It was a company that part of my family and dear friends put
together and I got involved with. And what it did was it took things out of closets, out of warehouses, things that were electronic things that for example, to start with their telephones that had to be disassembled, the important parts that could be reusable taken out and the rest destroyed ecologically instead of hiding in a landfill or destroying the earth. So I was already into it. The next step would be, now, how do we take that to
the next step? How do we make it more shall we say, valuable to some of our customers to actually move their goods instantly.
And that's what we worked on.
I spent millions of dollars putting this together in the AI with some of the greatest people. Gary for example, is one of the best in the world. He's one of the main guys that are there and one of our partners. And Gary Stevens just a genius of what he does. But anyway, so we took that in great people and put it together and I thought, it's the world needs us. The world needs to clean up the oceans,
we need to clean up the landfills. We need to save using trucks where you don't have to, and using people we don't have to repetitiously. So it makes a business shorter, quicker, and much more valuable. And I'm all about fewer moving parts.
Why do you think this hasn't been solved already? It's not niche, It's just articulated the trillion of dollars of value. Why hasn't someone done this?
Well, people have done it before, but in various segments. What we do with our AI is we put it all together. So instead of going to from the manufacturer or the wholesaler to a middleman into a warehouse and then to try and get it out to various customers they can get out to. We go directly to the customer, so we have that. No one's ever put that together before. We do have that, and it affects many many industries,
and we're here even our competitors. It helps our competitors out because it helps them move out things also a lot quicker, and we're all working with them also, so everybody wins. That's how America works, and America still works by the way, America still works, and it's still the land of opportunity.
We are an optimistic show today and we're loving it. Jp From your perspective, who do you sign on? How many kinds you already got in already on the platform, because you're coming out of stealth.
I think the best way to do it is this. We went from one person getting involved in taking orders now and we're going to be at the big show that's going on in Las Vegas as you know, this week, I'm the keynote speaker there to seventeen people from one to seventeen just to implement it. We have people standing
by for this right now. We have a few we've already implemented, but there's quite a few I want to say it'll end up once we're done with this show of probably thousands, because nobody has this and it's an answer to a big question and a big challenge that manufacturers and retailers have had. Move it out and also they get top value for their dollar. So instead of having to discount it all the way down and maybe they dn't make no money, just move it out right,
they actually get the top value out of it. The way we do it, we eliminate the middleman.
Champaul dea Juria, it's been great having some time with you, co founder men did it go, Got it, Love and Happiness and to you, thank you. Meanwhile, got peace, Love and happiness and the end of the edition of this Bloomberg Technology. And it's been a broad ranging conversation. And we're still looking at the companies that are set to have earnings after the bell today.
Yeah, and there's some optimism going to some of those earnings, and there is some lesson not optivism on others. Don't forget recap the show on the podcast wherever you're getting your podcast. We're posting on the Bloomberg platforms, but also Apple, Spotify and iHeart, and we really appreciate everyone give us a lot of feet back about the podcast carry, because they might watch the show in that form, listening in on their way to work from New York City and
San Francisco. This is me leaving you with a smile and some optimism, and this is Bloomberg Technology.