Technology coming up on the program Stability AIS. Breakout success faces threats as the startup confronts executive departures and concerns with its CEO. Will bring you our Bloomberg reporting on the artificial intelligence startup, plus full coverage of earnings ahead from Palenteer and Lucid's results to Rivian reporting after the bell. We got you covered, and we'll have an exclusive conversation with Spotify as the music streaming company further integrates AI technology in to its products.
All right, let's get straight to our top story.
Stability AI is confronting a series of executive departures, struggles to raise funds at a target valuation, and an accusation it's not paid its bills on time or in full. After breakout success with the stable diffusion model, the startup now faces mounting risks to its edge in the booming field of generative generative AI.
The reporters who broke that story.
Rachel mets here in San Francisco, Mark Bergen out in London, Join me now, Rachel, let's start with you. What were the main takeaway that we learned in the course of our reporting.
We spent several months looking into this story and speaking to a lot of different people, including Emad Mustak himself, who is the person behind Stability AI, and we learned that we're looking at a company that seemed to come out of nowhere, has a CEO who tends to make some blue sky comments about things that may not have happened yet, and the company itself just seems kind of disorganized, I guess, I would say.
And that was just a bit of what we've noticed.
So let's remind us as what put Stability on the map. It was the stable diffusion model. What is that?
In basic terms, stable diffusion is an image generation AI model. What it does is you type in a few words and it will give you back an image or a number of images. It was actually initially developed by a group of German researchers and a reserve scientist from a startup called Runway. Emad Mustak in mid twenty two approached this group of people to say, hey, I will support financially. I will pay for the computing power needed to improve this model to further train it.
Okay, let's bring in Bloomba's Mark Bergen, who's out in London. One of the co bylines of this story. We were just showing pictures of m Ad the CEO of Stability. A lot of your reported reporting focused on him his leadership of the company.
What did you learn.
Yeah, I mean he's certainly a charismatic character. He has a history here in London. He's worked for hedge funds, He's worked as a consultant prior to Stability, He's worked with a lot of around emerging markets and finance.
He has a couple of companies.
Are in crypto and blockchain space. And then, as Rachel said, I mean a mod moustache has even said his own words on stage. We kind of came out of nowhere, certainly not a well known entity in person here in London and in the valley, raised a lot of money, over one hundred million from some pretty high established investor is what we you know.
I think that he has really.
Positioned his company and its unique benefits around open source technology, and some investors we talked to that's what got them really excited. And one of the reasons they invested is they thought there would be an open source alternative to the open.
A eyes and Googles of the world.
As we talk in the story, that's clearly been threatened by companies like Meta, a lot of other newcomers that are also introducing competing sort of open source or open source like software products, Whereas what we're seeing in Stability is a lot of this internal turmoil while they're facing increased competition.
So let's get to the specifics of that internal tour mail turmoil, Rachel. One of the things you report is that they tried to raise funds at a specific valuation. Four billion US dollars is what they were seeking. They weren't able to tell us about that, and also some of the departures that they've had at the higher levels of the company.
So the company raised over one hundred million in funding late last year, right at the height of the success, the break out success of Stable Diffusion, and since then it hasn't announced a really large funding round. At that time it was valued at a billion dollars, and our reporting at Bloomberg has indicated that it was trying to raise at four billion dollars. As far as we are aware, that hasn't yet happened.
We just showed some of the responses we got from Stability to our reporting, one stating that they've not had problems raising funds, Mark, and that actually that they said they weren't trying to raise funds. The other is that some of those departures in late July, according to stability were they were let go rather than people that resigned in their own volition. Mark, What else have you learned? What are kind of some of the key factors that you report out in this story.
Yeah, I think what makes them a really interesting company, beyond the fact that they have such a successful stable diffusion, is they're trying to build these what they're called foundational models, Like they're trying to build this ground level infrastructure for generative AI, what a lot of investors and people in business believe is sort of the future of the Internet and the next transformational economy. That is a very expensive industry, right, very expensive enterprise.
Open AI is raised over ten billion.
We've seen startups like Rachel mentioned Runway, raising a lot of money because this is requires a lot of research, that requires a lot of compute, It requires hiring top shelf very expensive engineers. We talked Mustak in our reporting shows that their revenue he had previously sent out a tweet saying it was around ten million run rate of revenue for the year. It's below that now, in part because of their investment in research and development.
So it's a very expensive business. It's something that a lot.
Of their competitors have felt the need to be on this constant ramp of fundraising, and the fact that they have not, I think is certainly almost an outlier amongst their peers.
Invokes Rachel Max mark Bergen. Just really important reporting on a company that we talk about often and here on Bloomberg Technology, and now we find out the reality behind that name that has a lot of momentum. Thank you very much, all right here on Bloomberg Technology. I want to get quick check in of the markets broadly. This is what we're looking at, and aw's that one hundred
down one point five percent. We've seen the index level kind of treading water, but now some outside declines, particularly in chip names. You've got the socks, we're down two point six percent. Yields have come down though that's been the story the selloff in treasuries, but the US tenure yield back down towards four percent. It had been at four point two percent last week. We can see it
continue to pull back. Bitcoin, which has traded in quite a narrow range for the last two weeks or so around twenty nine five hundred US dollars per token, but pushing a little higher in the early part of this Tuesday session. The single name that we are watching is Palenteer. We are off session lows when it comes to Palenteer right now, down seven percent on an inch day basis. We've been heading for our biggest decline since November.
The story really clear.
The market is not happy with the guidance that they gave two point two to one billion dollars for revenue in full year twenty three, and this has been seeing a range of two point one nine to two point twenty four. But it's about not walking the walk while the company is certainly talking to the talk for more
impaltied results. I want to bring a man deep sing Boomberg Intelligence senior technology analysts that there's a real fighting talk from this this company in Alex carp in particular, Man deep about the momentum they have driven by their artificial intelligence offering. But do you see any of that momentum show up in the financial guidance they gave.
No, And I think it's too early for any company on the software side to really guide in terms of the revenue impact, but it comes to a generative AI.
They have called out a few use cases around healthcare and antology, which seem interesting, but it's too early, I think to say that you know it's going to drive revenue growth, as you see in the case of the lives of Nvidia, and that's where you know, with the model that Palenteer has, which is not a recurring subscription model unlike a lot of the cloud players, and when you're training at eighteen to twenty times sales, the kind of growth they are putting, it's just not enough to
you know, sustain that stock momentum. And I think that's why you're seeing that reaction to them.
This is what Alex carb the CEO of palenter Technology is told Bloomberg in an interview.
We've got a good chance.
Of becoming the most important software company in the world.
What's your response to that, Mandy.
Too early, because when you look at the partnerships that have been announce so far, Snowflake has partnered with Nvidia, what are they trying to do. They're trying to leverage, you know, Nvidia's expertise when it comes to GPUs and accelerators and overlay that with the product that they have at commercial enterprises. And that's the I think part where Talenteer will find it challenging to grow because they have, you know, the customer base when it comes to the
government side. On the commercial side, they don't have enough partnerships to drive that momentum, and most of the software sales, if you think about it, happen you know at that top level where you need salesforce, where you need to constantly add customers up sell. In fact, Talenteers net retention rate declined to one hundred and ten percent. They were around one hundred and thirty percent. That just goes to show they have some churn issues and commercial side sequentially
decelerated in the quarter. So clearly commercial side is where there'll be challenged and they need partnerships. They need the service providers to drive the nomentum.
You wrote about Talentie small customer base in your Bloomberg Intelligence Reacts. The way they described it is that they have for artificial intelligence platform aipay organizations as customers, but they're talking to three hundred What do you make of their ability to convert? But also I guess on the other side of the table the willingness of big commercial orgs to invest in AI driven data analysis.
I think clearly there is an appetite and there is excitement around generative AI. The way enterprises typically go about this kind of stuff is they will do it in you know, pilot and phases, and you know you're going to wait for ROI to really allocate a huge budget for twenty twenty four for example. And as I said,
it's a very competitive space. You are competing with hyperscalers, You're competing with the likes of Snowflake data breaks that have an army of salespeople, which I think Palenteer will find it hard to compete with. And what it does to their bottom line is they have no way but
to keep hiring salespeople. So I know they focus on operatability and they're doing a buyback, but to my mind, their expenses will have to grow, especially when it comes to sales and marketing, and that will limit any operating leverage you'll see in the NEUTRA.
All Right, a big thanks to Bloemberg Intelligence senior tech analyst Mandy Singh. We've got some fresh news just out this past hour and video has announced an updated AI processor that gives a jolt frankly to the chip's capacity and speed. This is the company seeks to cement its dominance in what is a burgeoning market, and video says the super chip, which is called the GH two hundred, is going to go into production in the second quarter
of twenty twenty four. It's part of a new lineup of both hardware and software that, in videos introduce focus on artificial intelligence.
All right.
Another top story, Amazon will meet with FTC chair Li Nakhan next week in a final push to avoid an antitrust lawsuit over the e commerce giants marketplace for third party sellers that, according to Bloomberg sources, joining us now Adam Kavakovit's Chamber of Progress founder and CEO.
What do you make of this?
Either we are closer towards a show off, a showdown between Amazon and the FDC, or we're close to avoiding one.
What's your assessment?
Well, I don't think we're close to avoiding one.
And I think that's partly because Lena Kahn has made her name as an Amazon critic right her Really her claim to fame originally was her twenty seventeen law review paper which articulated her view that while Amazon probably has pro consumer justifications for its behavior, she believed that it was doing harm to rival retailers and to online sellers. And she, you know again, six years ago, called for an expansion of antitrust law to deal with what she viewed as
problematic behavior. And so I think in some ways for her, this is a long time coming, though. And I think the way to think of this meeting next week that Amazon will have with the FTC sometimes it's called the last Rights meeting. It's really a formality. I think it's it's not going to it's not likely to deter the
FTC from bringing a lawsuit. I fully expect that they will bring a lawsuit, and candidly, based on the pace of these things, that lawsuit probably won't see the inside of a courtroom for about two years, which maybe long after Lena Kahn has left the FTC.
I just want to remind our audience, Adam, that the Chamber of Progress essentially a tech industry trade group, that antitrust is an area that you research and share policy perspective on regularly. When I was at some Valley a couple of weeks ago, the Microsoft Activision deal was firm in focus and a lot of people asking the question, why does the FTC keep picking fights that to many in the market that they feel that they can't win.
It's a great question, and I think that there are things that the FTC can do that are more practical wins. But I think it's very clear that Lena Khan has come into the agency as a critic of past FTC chairs.
She feels that they've been too conciliatory.
And she wants to bring lawsuits and I sort of call it a little bit of a yolo strategy. I don't think she particularly cares if she loses those suits.
I think this particular suit, based on the reporting and some of the leaks that have come out of the FTC about the things they're looking at, all of the behavior in question Amazon, I think has pretty compelling pro consumer justifications for But she's really seen a broader goal, which is to expand the range of antitrust law to encounter harms to suppliers and harms to sellers and harms to workers, and so I think.
She is intent on bringing cases that she believes serve that mission.
And so I don't think the losing record terres Her, I think she thinks, well, you know, we should try and if we lose, then that might prompt Congress to change the laws. And I think that's pretty explicitly stated as a strategy of.
Hers, best of your knowledge, Adam, When they all go into a room, when the FTC and Amazon sit down, what happens? I mean, what is it that one side has to convince the other of.
Well, it's interesting because I think if you look at the issues that the FTC has been investigating, these are the kinds of issues that in prior administrations and even in other countries might yield a settlement with Amazon rather than being taken to court.
In fact, both the EU the EU settled.
With Amazon on some of these issues related to prime and what they call their Fulfillment by Amazon program last year, and the UK is actually exploring a similar settlement. If the FTC wanted to take a constructive approach here with it with Amazon, I think they could, and frankly, I think there's.
Probably room for compromise.
But I don't think that's what's going to happen, because she has, you know, pretty publicly dismissed settlements again as being overly conciliatory sort of trimming your trimming the FTC sales too much, and so I don't think I wouldn't inspect that next week's meeting will be kind of an exchange or real opportunity to have off a lawsuit. It's really much more of a formality, and I would expect that they'll the FDC will file their lawsuit pretty soon after those meetings.
Since last we spoke at him, I guess the big development in the world of technology and antitrust has been the Warren Graham Bill, basically the Brawl proposal for a new agency to regulate the technology industry. What was the Chamber of Progress's response to that?
We took a look at that.
I think one of the things that I see a lot in tech policy debates is you see policymakers doing things like that where they say, well.
We need a new agency, right, we need a new regulator.
There are people who called for that.
What I think that does it's a frankly a little bit of.
A cheat because it puts aside the harder question of what behaviors policymakers.
Want to ban.
Right.
I think this Amazon case is a really good example.
I think many people look at big tech companies and they think they've got a lot of power.
We are to regulate big big companies.
I think that's something that is broadly popular.
But then when you look at the details, right this, this case, I think largely is going to be about Amazon Prime in a route, whether that bundle is pro competitive, and so I think that you know, so I think I think there's a gap between do we want more regulation, Sure most people are for that, but then what do we what is the problem we want solved? And again, if you look at this Amazon situation, I don't think that's that's something they're clamoring for change around.
So you're a reminder our audience.
What we've reported is that Chair Lee Na Khan and the agency's three other commissioners will meet with Amazon next week. According to sources, both Amazon and the FTC declined to comment. Adam Baca, it's Chamber of Progress founder and CEO, thank you very much. Now coming up here on Bloomberg Technology, local NBA games could be coming to your streaming ads sooner than you think. We'll talk about the tech giants that want those rights and why they're for sale.
Next. This is Bloomberg Time for Talking Tech.
First up, super conductor stocks in South Korea plunge Tuesday after a US based research center rebutted claims of a breakthrough in the technology. A Condensed matter theory center at the University of Maryland challenge claims made by Quantum Energy Research Center that had synthesized material known as LK ninety nine, which we reported on the show.
Last week and elsewhere.
Walt Disney, Apple, Amazon, and YouTube have all expressed interest in streaming local NBA games. The media and tech giants are open to acquiring local rights held currently by Diamond Sports Group, but only if they can obtain a critical mass of teams that according to Bloomberg's sources, here with the latest Bloomberg's Jerry Smith, seems like a lot of names throwing their hat in the ring, Jerry, and a lot of it contingent on achieving a big package.
What do we know. Yeah, that's right.
I mean, that's something we've seen in the sports media industry. The biggest change being these big tech companies Amazon, Apple, and YouTube really aggressively getting into this space. We've saw
Amazon with the getting the NFL rights. YouTube is Sunday Ticket rights, and Apple has MLS and baseball as well, So this is an opportunity now where the local sports rights in many cases, many of these teams are broadcast by a company called Diamond Sports, groups that file for bankruptcy in March, and one thing that bankruptcy allows is for Diamond Sports to reject contracts and not pay these teams.
And when that happens, the rights go back to the leagues and then they become up for grabs, and these big tech companies as well as Disney which owns ESPN, see an opportunity to swoop in and potentially buy these rights.
Explains to US straighted distinction between so the local level and the nationwide level. There's a big audience in bluebog technology that aren't even in the US, but the NBA is available on many cable streaming platforms. What is it specifically that the local rights give you.
That's right.
So there's two different really sets of rights in the US. There's the national rights, which are owned by ESPN and Warner Brothers Discovery, and then in each team's local market, there's a broadcaster that broadcast the games just for people who live in that city. So if you're a Boston Celtics fan, for example, you would be if you're in
the Boston area, you would get that broadcaster there. So these are different teams in different cities, and in a lot of cases they have been broadcast by a cable channel owner. Diamond a Diamond with a bankruptcy in large part because its owner took on a lot of debt while there was quirt cutting happening. And now these rights are really potentially up for grabs.
All right, Bloomberg, Jerry Smith for that Bloomberg Reporting, Thank you very much. Welcome back to Bloomberg Technology. Ed Ludlow here in San Francisco. Quick check in on the markets. We've reversed direction on the Nasdaq one hundred, down one point four percent. We're down in five of the last six sessions at the index level.
A big part of this is sort of the.
Macro concern this andit is in the banking sector, some worries about China's economy, but as we will tell you about later in the program, some weakness in software, particularly in the earning story in the outlook for the rest of this year. That's weighing on the Nasdaq one hundred. Very tech heavy and at different corners of it. Some high multiple software names they're trading lower. The other name that we're continuing to watch, of course, is Tesla, some
movement to the downside in last couple of sessions. The surprise news twenty four hours ago, which we hit hard on this show was Zach kirkcom stepping down after four years at c for as CFO, thirteen years in the company. Trying to find out the reason why. The replacement Tesla's current chief accounting officer, who's also going to keep his current post in addition to his new gig. We had arcinvest Kafie Wood on the program yesterday. Here's what she thought about that that news.
It's a tough job. It's a tough, tough job.
So I guess thirteen years was a really good run for Zach And can't say enough good things about him and what he did for Tesla, but I think he trained his successor well.
For more, let's bring in Bloomberg's Dana Hole, who leads our coverage of everything Elon Musk but particularly Tesla. Let's be honest surprised that Zach left Tesla. Webav teenager named as the CFO and chief accounting officer, and you and I sat there and thought, we don't know much about this guy.
Do we We really don't. And the announcement was weird.
I mean, we learned about this in a filing on Monday, but the change was made on Friday, and the regulatory filing from Tesla says that Tanisa is going to keep his current job as CEO and then basically adding CFO to his duties.
So the guy now has two jobs.
In your Bloomberg story, you write, Tesla's new CFO indeed has two jobs and a lot of question marks.
What are some of those question marks?
Yeah, he's just not super well known. I mean a lot of investors have never met him. He wasn't like on stage at Investor Day. He came up through Price Waterhouse Coopers, which is Tesla's outside auditing firm. For seventeen years. He was at Solar City. He joined Tesla after the acquisition of Solar City. But he's just not someone who is super well known to the shareholder base. He's only spoken on one earnings call, and that was in early twenty nineteen.
That's right.
I was going to say, I recognized the name from one earning school. He came through Sola City twenty sixteen corporate controller and now he kind of has this key job because Elon Musk is the CEO, but he's very busy, and in the last four years, Zach has really been a shining light. Just explained to our audience who are less familiar with Zach Kirkhorn the role he's played at Tesla beyond just being a pencil pushing CFO.
Sure, so, I think there's like this trend in corporate America where the CFO really has a lot of business and operational expertise, and Zach was very intimately involved in all aspects of the business.
He had a lot of director reports.
He was quite keen on improving profit margins and growing Tesla's revenue through other things like Tesla Insurance and software. And he spoke quite a lot on the earnings calls, and he was often the kind of like yin to Musk's yang or whatever you want to call it. Like, you know, Musk would make this bombastic pronouncement and then Zach would either walk it back or provide more context.
He was very.
Measured, and he spoke at great length, and those are just big shoes to phill and you know, by all accounts, I think what's interesting is that Zach is barely forty. I believe he's thirty nine, and I mean that's pretty young age to retire. He's got a lot of money and he can he can do whatever he wants. So I'm very curious to see what he does next.
Donna, you are excellent at digging deep into the regulatory filings in the documents we do have available, and you did unearth some information about Tenaja his association with Tesla's efforts in India.
Just tell us a little bit about what you learned. Yeah, I mean, there's been.
A lot of speculation about when Tesla will enter the India market, and Teanisia's name is on a filing that just sort of shows that they have started to try to at least get an office there.
All Right, Bloomberg's Dona Hole reporting everything we know so far about Tesla's and UCFO, But I'm sure we'll learn a lot more in the weeks and months to come. Meanwhile, another Elon Musk company, Elon Musk's Brain implant company and Euralink, has raised two hundred and eighty million dollars to develop its technology. The startup announce the funding round in a post on Musk's ex social network. The round led by founder's fund, the venture capital firm backed by billionaire Peter Teel.
Now more from our conversation with our investor Kathy Wood, who says the SEC may approve multiple spot bitcoin ETFs at the same time, reversing in earlier view that her firm would be the first in line to get potential approval for the long awaited product.
Have a listen.
I think the SEC, if it's going to approve a bitcoin etf, will approve more than one at once. So then again, because most of these essentially will be the same, and it will come down to marketing communicating the message. You know, we've been putting out our bitcoin monthly for the last year. We are now starting a bitcoin brainstorming session.
Our first one we launched last Thursday. So we're trying to get the word out there that you know, our research is deep and we've been doing it since twenty fifteen when we gained our first exposure to GBTC. We were the first public asset manager to gain exposure to bitcoin at all in twenty fifteen.
That's exactly where I want to go the Grayscale Bitcoin Trust, known by its ticker GBTC. If you look at ARCW, for example, your ARC next Generation Internet ETF. Right now, I see GBTC as the.
Third largest holding.
If we are in a situation where the SEC does give its blessing for a spot bitcoin ETF, would you plan to sell out of GBTC and buy one of these physically backfunts.
I cannot talk about what we would and would not do, and in fact, our compliance team is, you know, giving us marching orders not to talk very much about this filing and it's aftermath at all. So just the fact that we filed with our partner twenty one shares is as far as as I can go.
Fair sorry, Katie, fair enough now affecting something along those lines, I am curious to get your take on the regulatory temperature right now, because in addition to this rush of spot bitcoin ETF filings that we've seen, there's also been sort of a race that's unfolding for an ether futures ETF.
There's been a ton.
Of filings to that effect, and not specific to those funds, but do you sense that the moon music around the SEC and what their appetite to allow these products to launch has changed in the last several months.
Well, I think that.
The two other branches of government, the judicial branch and the legislative branch, are giving the SEC pause because the SEC is losing cases in court.
That was Kathy Wood of ARC Invests. Wow, as Tuesday's goes, it's a busy one. Let's get to another story. Apple began testing its next gen laptop processor, setting the stage for the release of its most powerful MacBook Pro ever, which will come next year. The new machine represents the latest advance by the company's in house chip efforts and could help entice consumers back to a Mac lineup that's
fallen in sales. All right, coming up here on Bloomberg Technology, investing in viintech and disrupting capital markets, what it means for European vcs, and the.
Outlook of course on AI. All that and more. Next we run a Yarrod.
Border in capital quickly we're looking at shares also of Snowflake. We talked about Data Dog oder in the program, giving that week outlook for the third quarter, Data Dog is down by the most on record, eighteen point eight percent, biggest percentage decliner on the Nasdaq one hundred, but it is dragging other software names where it look at Snowflake down almost seven percent.
This is Bloomberg Technology time for VC Spotlight.
Today we're going to look closely at the UK and European startup scene with a focus on fintech and what's happening in the world of AI. Borderson General partner Rannie Yard joins us from London Borders and has been investing in European tech for twenty two years, raised more than four point five billion dollars to deploy across early and growth stage startups. Good morning, Good afternoon, you are Ruana.
Welcome to Bloomberg Technology. Europe's an interesting one, you know, not just geographical but economic variants across the continent sector level. Where are you spending most of your focus right now in Europe?
First of all, thank you so much for having me on your show this morning.
It's a great pleasure to be here.
Look, sexual Wise, Balderton, as you said, is twenty two years old and so we are a generalist firm. We try to spend our time across the perennial sectors, if I can call them that. So fintech, the large swaths of enterprise, tech, consumer, but also you have the ability to be very targeted to the sectors that are most prevalent and relevant in Europe at any given moment. Me personally, I still spend a lot of my time in fintech, given that that is the roots that I have over
the course of my career. Versus a partner at Goldman Sachs and now at Balderton. The firm also spends a lot of time on what one might call deep tech. So just this morning Morgan Stanley wrote a piece where they mentioned specifically that Europe was distinguishing.
Itself in deep deep tech. That is an area of continued interest for the whole firm.
If we run with fintech as an example, which cities have the highest concentration of talent and entrepreneurship right now in the fintech space across Europe In the UK.
It's exactly where you would expect it.
So London continues to be a leading light in innovation with respect to fintech, particularly fintech that's focused on capital markets and institutions, which, by the way, when you think about the wallet share, companies that serve institutional financial services are absolutely dwarfing the wallet's share of the SME and consumer of financial services together. So that's a very important
piece that's based out of London. And we've seen over the course of the last five to six years a real rise in fintech talent, not only in Germany, which everyone talks about, but also in Paris, and indeed quite a lot of financial services talent has relocated to Paris over the last five to six years. And when those individuals are thinking about the companies to start, they're actually just doing them exactly where they.
Are ran a which of the areas that you do not like that you're avoiding.
That's a great question.
So as a firm, we actually don't make any investments in life sciences or biomedical sciences, and the reason for that is because we think those are specialist fields that actually require PhDs and none of us have those PhDs, and so healthy dose of humility keeps us away from those areas.
In particular, one of.
The big names that we talk about on this program, Bloomberg Technology, coming out of London, is revolute right especially in the fintech scene. Its latest audit for twenty twenty two I think comes next month you were an early investor, the firm was an early investor. What's your assessment of Revolute right now?
And we're incredibly proud to have been an early investor in Revolute. We've been with Nikolai and the teams together since the start of the journey. Our assessment is that we're proud to be shareholders and now no longer being on the board of the firm. We like you look forward to the audit twenty twenty two numbers.
Many column inches and media articals have also covered the leadership of Revolute.
Are you confident in them?
Do you think a change is needed to continue to scale and work to grow that startup?
And we continue to have every faith in nicola I know as has been well shown from the twenty twenty one audited financials and the guidance that they provided with respect to twenty two. In those financials, the company has continued to grow at an amazing pace since the last round that they did, and so if the results are the proof of the putting, that indeed our faith is very well placed.
The other sort of bigger theme that we talk about here on b Tech is UK and Ai the Prime Minister, are the government ministers really talking up the UK is a place to do development in the field of AI. Have you had any interaction with the PM's office and any sort of understanding of what the big picture is there?
Yeah, So I personally have not had that interaction, but the firm has, and in some respect the UK government is kind of stating what is exceptionally clear to those who have been in academia in the UK for a long time. So Cambridge and Oxford are centers of excellence. Obviously deep Mind came from there. The autonomous driving car wave comes out of that center of excellence.
Oxford Innovation Endeavors.
I think formerly called OSI also has had a number of companies come out of their labs that focus on deep tech and AI, and so the academic scene has been unbelievably rich, and then commercializing that that research was only the natural next step. So it doesn't surprise us to the least that this has turned into a national initiative.
There's a company in your portfolio that really caught my eye, Van Move, the.
Dutch electric bike company.
We've written a lot about mobility in Europe at Bloomberg Technology.
What went wrong there?
Look, I think we just start with like the very obvious point, which is that venture is not a zero risk business, and certainly we don't confuse ourselves into thinking that it is. Van Move had a mission that we believed in frankly that was deeply needed in the world, which is that micro mobility is very important towards climate change.
I think unfortunately they got caught in the challenges that are associated with COVID.
The bicycles were not made in Europe, the supply chains were incredibly long. You know, they had the misfortune of having bicycles on the Panamax ship that basically got stuck in the Suez Canal. And despite all efforts from everyone to come with a different outcome, not least of which because it's people's livelihoods, the final decision from the shareholders and the board was that the supply chain issues were just too challenging to continue on.
The news for our audience was that in Amsterdam court declared Van Move's Dutch legal entities bankrupt on Monday, which is why I asked about it. But as you say, venture not a zero risk business. Borders in capital general partner RANI are really good to get the perspective of what's happening in European tech Thank you. Spotify's AI powered DJ's going global just six months after debuting in North America.
Spotify listeners in countries like Sweden, Australia, and Singapore will be able to access the personalized DJ that comes up with curated music selection selections that include spoken word commentary by artificial intelligence. The Ad Sultan, Spotify's VP of Personalization, joins us now from our New York studios. The thing about the AIDJ is it's multifaceted. Let's start with the recommendations aspect. The technology is taking your listening history, the
data from your profile to another level. Explain how so, thank you for having me.
We are very excited about this product because what we are doing with the AIDJ is.
Really transforming the way people listen to music.
What we have created is a personalized AI guide for you, for every single user that knows you and your music taste better than anything before and can therefore create this lineup that is really special, with commentary that explains to you why you are listening to this particular song or track or artist and also tells you why you should
care right so you're more open to discovery. And by doing so, with the stunning realistic voice and this form factor of an AIDGIT just for you, it is able to also.
Learn from you better than ever before.
And so it takes this metaphor we've always had with Spotify of creating. You know, we've had this metaphor of what if you had your own personalized DJ, what would they do for discovery? They would create Discover weekly, they would curate your homepage, your daily mix. But this metaphor is now a reality. So that's why we're so excited to have built this product, and it actually recommends better and learns better than anything we've done before.
Of Spotify around the world will be used to sing lyrics or even video now when you have your favorite tracks playing in playlist form. But the technology level, this is a partnership with open AI that provides a lot more information about the artist or the song explain how it works.
So this is taking generative AI on two levels. One is in the commentary itself, the fact about the track or the artist. Why should you care about the song? What's important about it? So that is one aspect of generative AI we're using, and the other one is, of course, this incredibly realistic voice that brings a lot of passion and a lot of charisma and a lot of warmth
to the recommendations of the DJ. So we are taking those two aspects of generative AI and we are putting them in the hands of music experts inside Spotify, which are our music editors. They are some of the most knowledgeable and passionate people about music in the world. So we take this generative AI technology, including in house and some of the work we've done with external partners such as open AI, but we're taking that technology and in
the hands of our music experts. It actually brings something new to both listeners and to creators. For listeners it expands their horizon, and for creators it introduces them to new audiences.
Ziad.
When you announced last summer that you were acquiring Sonantic, many were like, you know, what's going on here? How does this end up in the platform? That's the final part right of the AIDJ A voice component.
Why did you do that? Well?
Very much, so we did that because when you think about our mission, it is really to connect to listeners and artists, and very much what we do is audio, right, So when you are doing that, you're listening to this new song. The best possible way to introduce you to a new song is to give you the audio commentary, the reason why you are listening to that song, why you should care, and also it gives you a chance
to try it out. And we have found in the data since we have started rolling out our data that users who hear commentary from that stunning realistic voice from Sonantic technology that we acquired, when you hear that commentary, you are much more likely to try something new. And when you are more likely to try something new, your lives get better as a user. The artist benefits because
they grow their audience. And this is happening in a way that has never happened before because in great part of that voice technology that you mentioned, you.
Know, I pit point one thing out is yead that this is still in beta phase in many countries the early rollout. It's global, but there are many countries that don't have it. Come back when the full rollout happens. He had Sultan's, Spotify's VP of Personalization.
Thank you now.
That does it for this edition of Bloomberg Technology. We're only two days into the week, and my goodness, what a week. It's been so don't forget check out the podcast, where we will recap everything from the program on Apple, Spotify, iHeart, and of course, on the Bloomberg platforms. The earning season continues. There are big interviews coming up here on the show this week from San Francisco. This is Bloomberg Technology