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Live from London and San Francisco. This is Bloomberg Technology. Coming up, we'll have full market coverage after a wild week for techtocs.
Plus Apple losing ground in China. Will break down why.
And as the Paris Olympics kick off, they raise for an onslaught of cyber attacks. But first it's check in on these markets. An extraordinary week. In fact, we have been down for three straight weeks on the Nasdaq one hundred. This week we lose about three It is the worst week, well only since the previous week, since last week, ed, but we are training basically at the low since May, and we've wiped off a ton of market capitalization.
Yeah, and I think a big part of the story is the Magnificent seven. I think you've already shown this Bloomberg terminal chart this week, Harrow, but it's kind of the go to. You know, in the past two sessions Wednesday Thursday, almost a trillion dollars of market kap are raised, and that has a broader impact on markets at an index level, but I think largely Google, which we'll talk about later in the program specifically, and volatility in Nvidia.
It's still top of mind for so many investors, so let's talk about it. Joining us for more is Anthony Segni and Bini and Mirror Prize. Sorry for Friday, not enough Coffee Financial Chief market Strategist. The market volatility it gets you gets me anti Welcome back to the program. I mean I've framed it in a very specific way. We're still micro focused on the MAG seven. Whether it's a waiting consider whether it's just a newsflow consideration to
someone like you looking at the markets. Is that still truly the case?
Yeah, I mean I think the next few weeks are all about earnings. We're going to have a big week. If you thought this week was volatile, wait for next week. We have Microsoft, Apple, Amazon, Meta, all of these companies are reporting. They're about a third of the Nasdaq by market cap weight, and so there's going to be a lot of attention on the earnings from these MAG seven names. And when we get later in August, we're going to see Nvidia, and that's been the big story in the
first half of what's been driving the market higher. So I think there's a little bit of trepidation around earnings season. I think earnings are going to be fine for the MAG seven, but there's certainly some trepidation if they're going to meet kind of the whisper numbers and the expectations
that have been set, which are very high. Valuations are very high in these Mag seven names, and I think the market's starting to pay a little bit more attention to all the style that didn't keep pace with the Mag seven. Financial small cap cyclicals outside at tech, these are the areas that are driving the market right now.
Anthony, have you been one of those who've thought that the valuations have become silly, absurd or have you actually thought there was reason for and Video getting to its three trillion dollar market cap?
Yeah, I think it's fair to question some of the valuations of big tech right now, certainly based on AI and some of the payoffs that may take a few more quarters or years to develop, and so I think it's right for investors to question some of the valuations. But I also think the secular drivers of artificial intelligence are real, and I think they will generate profit for these companies. They're already generating profits for companies like in Nvidia,
in Microsoft, and Alphabet. It's just the question are they meeting elevated expectations right now? And it's normal to see over the course of a cycle investors kind of get ahead of where the profits really are. They take those expectations back. Provides an opportunity for investors to look at some of these stocks that have really moved higher, maybe
at a little bit cheaper price. And so if you have a balanced view of both growth and some of the cyclical opportunities that have developed, I think you can use a pullback in big tech as a means to put more dollars to work.
And the one reason that we watch Alphabet, the parent of Google, so closely is largely because it goes first right, and it gives us an indication of how cloud will do, but also advertising will do, and then that sets us up for this week next week that you use perfectly framed for us. But there is more to the market than just earnings. Are you able to apportion some waiting to how much the market is looking at the rate cycle against what the mag seven do in terms of EPs?
Growth.
Yeah. I think it's a great question.
And obviously in the first half there was a lot of questions about the economy, inflation, interest rates, and so a lot of investors piled into big tech because the profits of these companies were very visible. I think what we're seeing in the second half, or at least at the start, is that there's a little bit more clarity or certainty about a soft landing. Interest rates look like they might come down starting in September from a FED
rate cut. Inflation is moderating lower. We saw that in the PCE data this morning, and so I think there's a little bit more confidence in the other four hundred and ninety three s and p five hundred companies that their profits and their outlooks might actually improve in the
second half. And so that macro backdrop that was a little bit more uncertain in the first half is starting to get clarity in the second half, and I think that's why you're seeing some money rotate out of big tech in those magnificent seven names and into some of the areas like small caps and financials and industrials and which are performing better today. I think investors are starting to give those areas a second.
Look, Anthony. The reason we love your experience over the last couple of decades is because you don't just look at certain equities or asset classes, but you look globally as well. This rotation has kind of been happening in the Japanese names have sold off European chip makers too, and I'm interested as to whether or not you're seeing some global narratives build as well.
Yeah, I think it's a great question. I mean, you're certainly seeing normalization in terms of economic growth patterns, inflation, and interest rates, not only here in the US but in Europe.
In Japan.
Japan will have their FED, their BOJ meeting next week. They're talking about actually normalizing policy by hiking rates. In Europe, You've seen the ECB cut rates in June. They're on pace to cut rates again in September. That's because there's this balance between growth and inflation. And think about the narrative over the last two years, not only in the US but across the globe of really high inflation, really
high growth, and really high interest rates. And what we've seen over the last six to twelve months is more normalization in inflation, the opportunity to normalize interest rates and a pretty solid economic environment in Europe and in Japan. These areas are performing well and could continue to perform well if investors look for that cyclical trade outside of big tech, which is really dominating US indices.
Anthony, It's always great to catch up with you. Happy weekend, Anthony segment. Many of America's financial.
Apple's losing ground in the China market, with the iPhone officially falling out of the top five in the nation according to new data from IDC. Let's break it all down with Bloomberg Intelligence analysts An Ragrana. That's a very interesting table was showing and there's actually a chart within the Bloomberg news story that shows this sort of slide in position that Apple has had relatively short term mannerag right and thinking towards the end of twenty twenty three
over a six month period. What is the data tell you?
Yeah, I mean a couple of things.
I would say this.
You know, when it comes to Apple and China, we know over the last few years the growth has.
Not been there.
But the comment I will take you back to what they said in their last earnings call is they grew in China while all third party data providers were saying that, you know, China shipments are down. Now there is always a timing issue in terms of, you know, when the product is shipped out of the warehouse versus when it's activated,
when it's recognized as revenue. So I think next week's earnings is going to be extremely important to see what's really going on in China for Apple, and I think, because you know, to be fairly blunt, that is the most important thing for over the next twelve months for Apple, far more than you know, anything else.
At this point.
The way in which the IDC tracks the data, whether it's government, whether it's actually seeing what third parties are really up to. We can sort of try and dig into the nuance there, Ana Rag, But the overall narrative seems to be that Apple loses position and Huawei gains. Is that the right one to make?
Oh yeah, but that's because over the last twelve months we have seen a massive upgrade in Huaweve phones. But there's a reason for it because Wawe hadn't you know, launched a phone for several years, so the people who had the older phones were going out to go out and refresh that or buy the newer ones, Whereas as we know for Apple Life phones, we are seeing an elongation in the refresh cycle because the product's been you know, a far more reliable product as well as it's expensive,
so people are keeping it longer. So that's really has been the biggest issue for Apple for over the last I would say two and a half years or so.
The domestic Chinese handset makers are a factor here, right, Ana rag and Blimberg's reported about government policy directing government employees or state backed enterprises to leave the iPhone at home. How do you model that at Bloomberg Intelligence, that kind of policy perspective.
Yeah, and again, as I said, you know, going into the last quarter earnings, all of these things were you know at Player at that time too. Meanwhile, Apple came out and said that they grew in the Greater China region, and that's why I am more inclined to wait for
Apple's comments rather than any of the data sources. But having said that, I think Apple is going to have a bit of a tough time if you see the Republican you know, president coming in, because if the China rhetoric is going to go up over the next two
to three years. You know, Apple's going to be right in the middle of the US China issue, so I think really Apple's not as clear cut at this point compared to you know, let's say somebody like an Amazon or Microsoft in terms of the visibility over the next two to three years.
Of course, we had that reporting earlier in the week that Micron and Apple executives were visiting China of late and talking to government officials and Agrana. Great to have some time with you, Bloomberg Elligence. We thank you. Meanwhile, let's just talk about how politics is affecting China US relationships a bit more. China based Byte Dance is going all out in Washington to keep TikTok from being banned, with lawyers, lobbyists, and of course the money joining us.
Now with the details, Mike Shephard, you understand more than many the intricacies of US and China relationships, and TikTok is just fighting this hard because they have to do all They're going to be out.
This is really existential for TikTok and for byte Dance to be able to maintain this kind of access through TikTok. And it's one hundred and seventy million users to what may be the most lucrative advertising market in the world, and TikTok is not going gently into that good night in the face of this law that was passed and
signed in April. It requires the company the app to be sold by byte Dance by January nineteenth, or will face a ban on its US operations, and that would be devastating to the company and also to US users who have really grown to depend on it not only as a source of entertainment, but also as a source of income and business. There are many small businesses who are active on the app as well, and TikTok is deploying them too as part of this campaign.
Mike, there's an issue of language here that I find just crucial that when this law was passed in April, it was a divest or ban law, and it just seems like the divest part is just not a talking point for TikTok or the US government at this stage.
I'm glad you brought that up, because when you see, for example, Vice President Harris joining TikTok as of yesterday to help boost her campaign against President Donald former President Donald Trump, what we are seeing is that there is great utility in this app. The app itself is not the issue. It really is the ownership. However, we are seeing zero movement when it comes to a sale. Bite
Dan says TikTok is not up for sale. The Chinese government has expressed objections to any idea that this crown jewel of Bite Dance would be forced to be sold by the US government.
Boombergs Mike Shepherd, who leads our coverage of tech and politics, thank you very much. A story that Mike just mentioned in the context of TikTok, Vice President Kamala Harris officially joined the app with her first personal account since she began her presidential campaign four days ago. TikTok and other social media platforms has seen a groundswell of viral memes, images, and videos, all featuring the Vice president. Worth noting, President Joe Biden did sign that law into a bill in April,
forcing Byte Dance to sell the app by January. As Michael outlined or faced the prospects being barred from operating in the United States. This is an astonishing sitch, Cuasian Caroline.
What's also astonishing is how expensive some of those power brookers and lawyers are that they're using fifteen hundred in that story an hour. Meanwhile, look, let's just talk China a little bit more. But in the context of esports. The company an Ip kicks off trading on the NASLAC co founder and chairman Mario Hoo is going to be joining us as Bluemare Technology.
It's time for talking tech and first start. The SEC is suing short seller Andrew Left and his Citron Capital. The regulators alleging that Left n Stron generated about twenty million dollars in illegal profits and is accusing him of committing fraud through stock trade, social media posts and research reports. The SEC says Left would allegedally make a recommendation and then capitalize on the resulting movements on prices far different
than what he'd recommended. Left had no immediate comment. Plus Apple agrees to AI safeguards. The tech giant is the latest company set to adopt a set of voluntary protections for AI crafted by the Biden administration. Apple will join the likes of Open Ai and Alphabet, as well as Microsoft, committing to testing its AI systems for discriminatory tendency, security flaws, and national security risks. And shares of TSMC for the
most in three months in Taiwan. This is the country's stock market reopened after two days of closures due to a typhoon. The stock decline joining a global route in tech stocks as investors rethink their AI positions. TSMC's Taiwan listing has now fallen more than fourteen percent from its peak.
Carrot and a company not fearful of that volatility is Chinese Esports Company and ip it began training today. It opened at thirty dollars eleven after pricing the IPO at No. Nine dollars per share, we're is putting back to about that nine dollars level. A please to welcome NMP co founder and chairman Mario Ho. Mario, why go public in the US?
Well, this is the biggest capital markets platform in the world for us.
We've always thought that.
In order for us to truly go global and to see partnerships all over the world, we need to be at the biggest exchange, and that for US is Nasdaq.
And so give us the thesis. You're going out to the investor base, obviously you're trying to woo them on the business model. The business model one is perhaps hard for a US consumer to understand, because for US we think China regulatory crackdown gaming, but actually esports is something very different, well loved national pride.
Absolutely, esports is well loved national pride everywhere in the world, every single government, exemplified by the recent news the fact that there is going to be an Esports Olympics at Saudi Arabia in twenty twenty five. I mean, for US, whether it is an investor from China, whether it's an investor from the US, so US the business model of running esports teams, the excitement that comes out of it, can be understood by everyone.
Our game is and esports fans in the audience will know that you're the parent company or holding company behind Ninja's in Pajamas in Sweden, ESV five in China. And you guys talk a lot about the big market opportunity, right You cite this report that esports globally is going to be a one hundred billion dollar a year market by twenty twenty seven. Your teams do well, but you've
booked about nineteen million dollars in prize money. So for all the investors watching, how do you make that number a lot bigger.
Well, prize money is only one part of our business revenue, which belongs to the part where we run esport teams.
We also do a lot other than that.
We also do talent management. We have sort of an IMG where we sign and manage a lot of esports talent. We also do offline events production, very much like the Esports Live Nation, and in the future we're going into so many different new avenues like esports, hotels, games publishing. We're definitely going to be raising the overall revenue pie of the company, not just prize money, but that is something we care about because our brands are a very, very winning brands.
You mentioned the impact of having esports at the Saudi Arabia Olympics. That's a really interesting global view of this market. Could you sort of compare and contrast for us the health of esports in the USA against the health of esports in a market like China, for example.
Well, I think in terms of monetization and sponsorships, because the US has a very well functioned traditional platform for traditional sports, I think the esport teams tend.
To do very very well here.
On the other side, in China, for example, you'll see a bigger size of following, more people, bigger population, more population that follows games and esports. So for esport teams in China to rack up a huge following and then
to monetize that would also be easier. So it's a different demographic, but in terms of competitiveness, I think it is the same everywhere in the world, And like you said, Saudi Arabia, I would be very excited to see how the US teams pitch against the Chinese teams and of course teams from Europe and all the.
World as well.
Maria. What sort of companies are wanting to really get in on the esport crescendo, I mean many sort of think back to ultimately the collapse of phase over here in the US and a larger life celebrities involved, but also worrying around the commitment of sponsors. What sort of companies are wanting to cral around you and wanting to support some of the players that you represent and the talent that you're going to be managing.
Well, first off, I think it is good to have a correction in the esports market globally where we're now as esports companies are are credited when you're able to prove a path to profitability, and that's great. That's for the overall health of the esports industry worldwide. For US, we have insane sponsorship from all over the world. You see companies like Red Bull BYD, China Mobile, Fila Puma, brands that are targeted to are targeting towards young people
around the world. Will still find that very attractive to be represented by esports teams and have their logos on our shirts. Another reason for that is some companies want to really youngify or turn their brand younger in terms of audience, and for those characterist companies, we're sort of a very good partner for them.
Mario Jackson Wang is a huge star mainland China in particular, huge following, and you've kind of tied League of Legends into his following. Will you replicate that strategy with any other celebrity in Europe or in the USA.
Absolutely, we're not saying no to that. The success of Jackson on his own, but also combining with the gaming audience has been something that's taken the market by storm. So if we're able to if I'm able to form a friendship as strong as the one I have with Jackson here with somebody with the US celebrity. Absolutely, but from business perspective, yes, those are our possibilities that we're looking to seek into the US markets.
Mario Ho, co founder, chairman and co CEO of NIP Group, thank you, Welcome back to Blinbow Technology. Ed Ludlow in San.
Francisco, Caroline Hyde in London. Let's all quit check on these markets because it has been a tumultuous time this week, to say the very least. But we are up this Friday on the NASAK six tens percent, even though we have been down for three straight weeks. More broadly on the benchmarks and lost. Remember about a trillion dollars worth of market cap over in the NASDAT one hundred rotheran two thousand gains OUTPERFORMSS again, small caps outshining big tech
because we see that rotation in place. Bitcoin though a little bit of love. Remember we have well previous President Trump speaking at the Bitcoin event in Nashville this weekend. We'll see what he says for the cryptos SEMA up three point five percent as risk assets do better across the board. Move on to the individual movie because we have got some in play and when you're looking at the leaderboard, Charter Communications beats on its earnings. We're up
some fifteen percent. Extraordinary movements for this particular company. Dordash doing well. Of course, we finally get Prop twenty two being signed off by the Supreme Court over in California, that does well, and some analyst upgrading on the stock. We're at more than three percent. Dex Com what a wipeout forty one percent unexpected cut to twenty twenty four sales forecasts. This is a blood sugar monitoring device maker
for diabetics. Look, we are starting potentially to see the impact of a zepic and some of those similar weight loss drugs. The CEO wouldn't say whether really they've been impacted by perhaps fewer common type two diabetes necessities coming from people as they use that weight loss drug ed What are you looking at?
Glasses in the news and making moves essolaw Loxodica, the world's biggest eyewear maker, said Meta is planning to buy a stake in the company, confirmation. The two companies have already been working together for years and presented their first RayBan Meta smart glasses in twenty twenty one. This deal would see the US tech giant further stepping up its
pushes in too smart glasses right. Another Meta story metas facing its first EU fine over allegations it abused its dominance in the classified ad market by tying Facebook Marketplace to its social network, bringing in Bloomberg, Sam Stalton out of Brussels, Sam, A good afternoon to you. Just what'll be through the EU's perspective on this, the sort of the angst that the Commission has against what Meta did.
Yes, hello from Brussels, Ed and Caroline, and yes, we expect this line to be issued against Meta in the
coming months. And the European Commission has a number of concerns with how the company has tied Facebook Marketplace to the Facebook social media network, and what it is set to say, as I say, in the coming months, is that Facebook shouldn't make access to marketplace obligatory on users having a social media account, and it also shouldn't use the data from its rivals, And I'm talking about non public data belonging to classified ads rivals like eBay or Craigslist, etc.
To compete against them, because what the Commission has found is that over the years, Facebook has actually been a space for those types of companies to advertise and promote their services, but what Facebook has actually done with that data could be problematic in terms of an abuse of dominance. So the finest set to come in the coming months.
We don't exactly know how much it will be, but just a reminder, Brussels does have relatively high binding powers up to ten percent of global annual revenue, so it could be a fairly hefty bill for the Menlo Park firm to pay off.
Person saying the claims why the commission are without foundation At the moment, Sam and the organization continues to work
constructively with regulators over the issue. What's the chances that they can work constructively here because you know, as a user of Facebook marketplace, you can understand why you want it tied to the social media platform because you want to understand about the buyer that's putting in the interest and ultimately here sometimes really hard to sell things through these sorts of platforms.
Yes, Caroline, well, indeed, I mean it has been working with regulators since this case was first launched in the EU in mid twenty twenty one. Facebook did actually try to stop this investigation by offering some concessions. It made an agreement actually with the UK's Competition authority to stop using this non public data to compete against classified ad rivals, and that was enough for the UK regulator, but it wasn't enough for dgcomp Here at the European Commission in Brussels,
it wanted more. Metal wasn't prepared to offer more. And we're in a situation now where it's basically a standoff, but it looks like it's heading towards that fine and a couple of quite significant behavioral orders as well, which we expect to include an order from the European Commission for Facebook to create a separate portal that users who don't have a Facebook social media account can use to access the Facebook marketplace.
Really appreciate you breaking it all down because it's complex, Sam Stolton, go have one awful evening over in Brussels. We thank you. Meanwhile, let's talk about another key platform on Meta. It's WhatsApp, and it's hit one hundred million monthly active users in the United States, growing it's daily audience by double digits. Now, Meta CEO Mark Zuckerberg announce
the new milestone on his WhatsApp channel yesterday. The app has a mass billions of users of course worldwide, but more US users would improve Meta's effort to build out WhatsApp's business for the US market, typically being the most lucrative eventually for advertising. Now back to good old anti trust DC chat. You know Colm was in San Francisco. Well she's been meeting with members of the business and VC community. She discussed Well's on hamond and an exclusive interview.
We bring by so many chang starting with hedults around official intelligence, just take a listen.
As a general matter, historically, we've seen that openness and open source can be a critical vector of innovation, right. I mean, what happens traditionally when you render some of these ecosystems more open is that it can lower barriers to entry, It can lower costs for entrepreneurs and startups and really enable them to innovate much more freely. And so we want to make sure that that tradition continues.
We are watching very closely. I think there's still an open question around what openness really means in the AI context. Our team has been focusing on this idea of open weight models, which we think could similarly engender a lot of competition and innovation and make it easier for startups and entrepreneurs to compete on a level playing field. Of course, we need to really closely understand what are any restrictions licensing restrictions that are being included here and could those
be foreclosing competition. More generally, we also need to be aware of how there are significant incumbents that may have an outsized role to be playing because they have key control over the raw material and key inputs. And so we need to be aware of the broader potential competition issues or bottlenecks or choke points that could emerge in ways that could inhibit innovation and inhibit competition. And so that's what we're going to be talking with founders and vcs and others about today.
I do have to take a moment to talk about the presidential election. A number of prominent tech folks have endorsed President Trump for a variety of reasons, but I have heard specifically multiple tech executives and investors complain about how they can't do deals on your watch. Do you have any concerns that your agenda has that all alienated the tech community or could impact the impact of your agenda going forward.
You know, it's been such an honor to serve and then Biden Harris administration, and you know, we're just focused on doing our work. What I oftentimes hear from the business community, including small businesses, including entrepreneurs, is that they want markets to be more open and more fair and more competitive, rather than incumbents being able to squash out
nason competitive threats. I mean, our free enterprise system is one where the best ideas are supposed to win, and we've historically seen that it's the disruptors and entrepreneurs that have been a key vector of innovation. And so our job at the FTC when we enforce the antitrust laws is to make sure that our markets stay open and fair and competitive. And that's something that you know, most businesses and most entrepreneurs should really be able to get behind.
FTC Chair Lina Kahan and Bloomberg's Emily Chang. Coming up, we'll be joined by hillal' zidel, Managing director at Kennett Partners, on the firm's brand new fund focused on all things SaaS and all things Europe.
This is Bloomberg Technology.
Transatlantic growth equity investor Kennett Partners let's just raise two hundred ninety million dollars for its largest fund to date, called Kennet six, which brings the firm's assets under management to over one point four billion dollars. Ringing in Heillales Adel, managing director at Kennett Partners for more. Is great to have some time with you, Heillo, And look, we want to understand about the reputation the returns you've already given
some of your LPs and investors. What kind of companies have you backed, what sort of returns have you got?
Hey, thanks so much for having me in the show. Great to be here. Yeah, So we're investing ken It six right now. We have a long track record, not the twenty twenty plus years investing in the sector. Now focus is on business to business software companies and in particular those that have been bootstrapped and you know, getting.
To a great clothes on Kennet six.
In order to do that, you need to have a strong track record, and we're delighted to have that.
Kennet six is a continuation.
Of what we've been doing without fire funds, and we're really excited about what we're seeing in the market right now.
Hello, what's the backstory for wanting to focus on SaaS.
The few things. Firstly, you know scalability.
These companies can scale very rapidly, they have high gross margins, they.
Are predictable businesses and with incess.
We focus particularly on business to business companies and really those that are mission critical or essential to the underlying customers. What we really care about is is this company a real problem of their customer. One of the unique aspects of our particular strategy is on bootstrapped SALAS companies. That's businesses that have been built by the founders without relying
on external capital. These are companies that are very different to the traditional venture capital business of raising large sums of money going out spending raising more. The companies we're investing in have been built to scale by their founders with very limited resources, and that's a strategy that we think provides our investors with really compelling risk adjusted returns.
And also clean cap tables too. I'm interested in sort of trying to avoid hype cycles here. HELLU, I'm looking at some of the previous investors Cross border solutions. Six X at the moment is an AI driven tax and transfer pricing solutions. You've got financial automation software platform. I can imagine a lot of the founders you're now going to be looking to have had to in some way
describe their business as artificial intelligence at its heart. How do you get out of some of the heady high valuations when you start targeting that.
Yeah, I mean that's a super relevant question. I think.
You know, we came out of a momentum cycle of twenty twenty to twenty twenty two when prices were really high. You know, lots of investors were coming in and investing in technology. That's corrected. We're now in a more moderate environment, and then AI comes along, and you know, it is creating another level of level of hype. Our view is that, you know, we need to be investing in good businesses, good management teams, good strategies at the right pricing. We
don't have a fomo style investing. We're not trying to find the next unicorn. We're not trying to find you know, the next the next big thing. We believe that just sticking to you know, rational investing is the right way to the right way to know to be.
Successful in this category.
You know that being said AI is real, AI is in our view, you know, the next platform shift, you know, post mobile, post the Internet. But I think we're at the particular point in the market where the reality you know, needs to catch up a little bit with the hype
that's out. Then I think you're seeing that in the market in general, with you know, huge investment going into infrastructure, into LMS and limited commercial value CONMUCUALEREV at that point, and I think it's going to happen, but it's going to take time.
Hello, it's a euro denominated fund and you're in London. We've we've got a new government in London.
Just to explain all of that, please absolutely.
So we invest in Europe, in the UK and in the US, and we're really looking for the best businesses that we can support in their scalely, so you know, investing in businesses in the UK. We recently invested, as you said earlier, the company called screen Dragon, which is a business between the UK and Islands.
Our objective, you know, with this.
And many other companies is rarely around expansion, so you know, where we're investing in the UK company, we want to help build a world class management team around the founders. We want to support these companies expanding international and ultimately developed strategies that maximize the value going forward.
I think for us, the key point.
Is is the business we're investing in serving an international market.
Here.
We're not really focused on companies that only serve domestic markets. It's much more about can this business scale and serve customers multiple multiple geographies.
Hell els Adelle, managing director at Kennett Partners.
Thank you.
They're spending over a billion dollars when they're here in Paris, so we're seeing really good demand this summer. I think Q three is going to be quite strong, and I think this event, the Olympics, it's just the ultimate demonstration of the power of their ABNB.
Or we're talking Olympics and just hours ahead of the Olympics opening ceremony, trains going to and from Paris were hit by an arson attack. Fires set three critical rail line nodes, causing delays for eight hundred thousand pus. The identity of the attackers is not yet known. Meanwhile, train delays are not the only concern. Like the Olympics, cyber team is bracing for attacks at this year's games, after France was already the target of hacks that shut down
a film festival last month. In further Olympic news, get this, Canadian women's soccer head coach Bev Priestman was removed from the team after flying a drone over an opponent's training session. There had been prior instances of this by the head coach, according to the statement from Canada's soccer CEO confirming Prieseman's suspension.
Ad A lot of news, A lot of news, and back to CrowdStrike. Ninety seven percent of crowdstrikes sensors are now back online after last week's outage, Bloomberg's reported, But there are growing concerns that incident like this are.
Part of a new normal.
It's something I wrote about last week in Tech Daily. Pager Duty is a cloud computing company that plays an important role as an early warning system for incidents like this. Pager Duty CEO Jen Jennifer de Harder joins us now for more. What was that like for you that twenty four hour, four day period when the outage happened.
We just explained what page of Judy does.
So you must have been at your desk thinking, okay, we've got something to do here.
Look, I mean, these are the moments that were designed
and built and prepared for. I'm especially proud of our technology and software and operations team because despite our platform coming under significant surges in traffic incidents, we saw at the peak, we saw nearly two hundred percent spike in the number of incidents that are normally processing on the platform, over two point six million events, which is, you know, significantly higher than what we see in any typical hour, and of four hundred and twenty five percent increase in
the number of incident workflows that our customers were running on the platform. So just seeing our technology stand up, you know, in a very realile and resilient way under that kind of pressure makes me very proud of our team, but also is just a good reminder that the effort that we undertake to build operational resilience to prepare for these unexpected but really challenging moments, you have to anticipate them.
You have to invest in the infrastructure, the redundancy, and the resilience to deliver when the time.
Comes, Jennifer, is that's going to happen more?
It is happening more absolutely. I mean, our customers saw nearly a forty five percent increase in customer facing incidents just a year on year, we are seeing the number
of major incidents on the platform increase. These are incidents that have material or reasonable business impact, and that's because most of consumer engagement with brands financial transactions today are taking place on digital apps that are supported by complex infrastructure technology infrastructure, some of which is a and some of which is increasing in its complexity because we're able to ship new products and services all the time, every
day into this ecosystem, and that complexity is going to continue to grow with the advent of generative ai.
Jen I just want to point out to our audience We've made every effort to get George Kurtz, the CrowdStrike CEO, on this program on a daily basis, and he's yet to do certain. The reason I flagged that is so many IT managers, CSOs, CIO cybersecurity managers watch the program.
They have very specific questions.
The chief among them question is you know, is this a preventable event or is this the sort of state of doing business now in the world that we live in.
Well, I think this is a good reminder that anybody who is responsible for technology and a business, and every business now is a technology business, is responsible for making sure they have good practices in place and good controls in place around technology change and around the ability to respond or roll back when a change does work ineffectively.
But the reality is human error, technology fread, fragility and tech debt, in our aging technology infrastructure, cybersecurity threat etc. All of these things create a more dynamic and volatile environment for the technology ecosystems we've grown to rely on, and that means that we have to make the investments in our infrastructure, in modernizing not only our technology but the way we operate so when these things do happen, and they will, that we can handle them more effectively.
And one of the reasons that pagere duty is architected the way it is is because these events in particular are unstructured, they're unpredictable, and yet they're high impact and high value. So getting back to recovery of these systems is really important. But also this is a tremendous opportunity for everybody in industry, not just folks who were.
Affected by the outage last week, of folks that.
Weren't to double down on investing in infrastructure, on preparing, on improving their resilience, on practicing things like chaos engineering, tabletop exercises, and also communicating to customers the importance of redundancy, having multiple systems, failover practices, documentation, even how we onboard people, and you know that is one thing I wanted to underscore. One of the things we haven't been talking about a lot is the people who have been working twenty four
by seven set systems back online. We talk a lot about automation generative AI right now, but the human needs to be in the loop.
Well said the people behind this technology, Jeneva Tahata. We thank you so much, CEO page a GT. How wonderful weekend that does it for this edition of Bluebog Technology ED.
Incredible week incredible show. Check out the pod