Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is live from coast to coast with Caroline Hide in New York and Vla Lolow in San Francisco.
This is Bloomberg Tech coming up.
President Trump says more chip tariffs are coming soon. This is the administration explores equipping chips with location tracking tech.
Will have the latest from Washington.
Plus, Booming AI demand is sending Palenties second quarter revenue soaring above a billion dollars, Chez hit a new record.
And AMD also out of earnings after market close today with the company under pressure to show benefits from the AI race, and.
We take a check on the markets amid what is yet more earnings to come from AMD and a digestion of weaker services data that seems to be putting up pressure in a macro picture is underwhelming. We're off by five ten percent on nasback one hundred, but ed get to the nitty gritty, what's moving in terms of points here?
Yeah, the earning story is palent here and we're up eight percentage points forty eight percent growth on the top line, which the company attributes to astonishing AI contribution. We're going to get deeper into that in the program. Another top story that we're tracking is what's happening with AI chips in particular. So we're going to talk about how tariffs
are coming, specifically for semiconductors. But then there's the reporting overnight that the US is thinking about putting location trackers on AI chips that are exported to certain countries. In fact, overnight we caught out with a key White House official who talks about it.
Listen to this.
There is discussion around very important research and development that needs to be done on potentially the types of software or even physical changes you could make to the chips themselves to do better location tracking. And that's something that we're exploring and we explicitly included in the plant.
We can get to order this with Boomberg's Mike Shepherd, who's joining us.
Now from Washington.
Look, I want to go into the broader picture first and foremost, we are anticipating semiconductors to be in the eye in the storm when it comes to localized tariffs. How much is that impacting the future of companies wanting to import.
Well, that's a great question, Carol, because the administration, while it has spared chips imports from the country by country tariffs. We are now expecting Donald Trump to sign an order in the next week or so putting tariffs on semiconductors as a category, no matter the point of origin, and the countries will have to negotiate individual levels perhaps after that.
But they have made clear that just like with pharmaceuticals and autos and copper and so many other categories of goods, they want to see more of them produced here in the US, and they see tariffs as a great means of doing so. Now, what this means is that industries such as automakers, even the chip plants themselves, will face
higher costs. And then when you look at the hyperscalers, Open AI and the companies that we've seen report their earnings this week and announced even further intentions of expanding their investment in artificial intelligence, they run the risk CARAF facing higher costs on those two from chips. Chips are one of the biggest inputs that these hyperscalers face in terms of cost, and adding to that, adding up to
a twenty five percent tariff would be tricky. Now we've been anticipating this since April, when the Commerce Department opened its investigation into whether tariffs were called for. It's under a so called two thirty two process. It would be on sounder legal ground than the reciprocal country by country tariffs.
We will have to see what the timing looks like and whether or not they carve out any exemptions as well, including for semiconductor manufacturing equipment, which is key to expanding here in the US as well.
Mike location track, we have the United States willing to export technology, the American tech stack around the world, but it wants to track where the chips are going. Can you explain that one to us?
Yes, Ed, And it really is central to the administration's plan to try to expand the American tech stack, especially advanced AI chips. They want to be able to sell those more broadly and more widely, including even into the Chinese market. We saw the promise to loosen restrictions on those aged twenty chips.
But it's more than just China.
It's being able to sell those semiconductors across the Middle East.
We saw all the deals that.
Were reached with the United Arab Emirates and in Saudi Arabia, But to be able to sell in those markets. The US wants to also have the capability of tracking those chips to ensure that they are not somehow diverted or smuggled or resold or somehow end up in the wrong hands. And that would include not only China, but Russia, in Iran, every series that the US does not want to see gain capability when it comes to artificial intelligence, which of course, as we know, has a dual use capability.
Mike Sheffin always on the nose. We thank you from Washington. Meanwhile, Taiwanese prosecutors, well, they've arrested six people suspected of stealing trade secrets from TSMC. Now, the chipmaker reported former and current staff to authorities on suspicion they illegally obtained core technology.
The prosecutors searching the homes of some staff.
Now authorities are now trying to find out if data had been leaked to other parties.
Z okay Onto Earnings Palenteer reported a forty eight percent increase in revenue for the second quarter to more than a billion dollars. The company cited the quote astonishing impact of AI on its business. Bloomberg Intelligence senior analyst Mandy Singh joins US. Now, this is the story that everyone's
talking about this morning, Palenteer's continued momentum. At BI, you went a little bit deeper on how that's playing out, But did you just summarize where they were strong and what's happening with Palenteer right now?
Yeah.
I mean when you look at the US commercial segment, that is what everyone is excited about. It grew ninety three percent for the full year. Their guide is eighty five percent, and look for a small segment with over a one point two billion dollar run rate, it's very impressive growth. But I think the metric that we still don't understand is how much is the AI contribution to
their top line growth. I mean, when you look at a Microsoft Azure number, you know the AI contribution to growth this seventeen percent when they grew thirty nine percent. In the case of Palenteer, yes they grew forty eight percent, but we don't know how much of that is driven by AI because their business model is dependent on contract wins.
And yes, they gave us a number around the backlock growth and the remaining deal value on the commercial side, but we just don't know enough to quantify that AI contribute. And for a company that's trading at such a rich valuation multiple, you want to have a better sense of, you know, what that flow through of AAR revenue is.
Okay, So perhaps more transparency on a breakdown of numbers, Mandy, what about who they're taking market share from, who's losing out as we see Palenteer make these wins.
Yeah, their core business is data ware housing, So you have the legacy vendors like terror Data and Oracle, and you also have cloud companies like Snowflake and Data Breaks. And we know Data Breaks is also doing very well in terms of growth rates. So now that Palenteer is expanding on the commercial side, it'll be interesting to see if they can sustain this kind of growth rates, because you're right, it will come at the expense of someone
on the commercial side. Clearly, the hyperscalers are looking to get a piece of that pie as well. Because Microsoft, the way it's positioning Copilot, it's trying to solve some of the use cases that Valenteer is looking to solve by applying LLLM. So to my mind, the commercial side growth, the sustainability of growth is going to determine whether it can sustain this valuation, and so far I find the net new arr metric from the Hyperscalers far exceeds what
Talenteer has had a given. Talenteers is a much smaller company.
Great context, Blue meg Intelligence, Senior analyst, man Leeve Seeing, thank you so much. Let's dive into all of this, particularly into the valuation front. Stephanie Aliaga is with US, joining us from Global Market Strategy JP morgas Asset Management market Insights team.
Stephanie, we look at.
Something like Palenteer five hundred percent in twelve months, the most expensive stock on the s and P five hundred When you're looking at where it prices versus future sales, does it seem vindicated to you these sorts of valuations.
There's absolutely some AI enthusiasm at play here, and I think there's some and I think in this earning season we have heard from a variety of companies, not just these megacap tech companies, that they're seeing early signs of success US with AI. AI is helping them run more efficiently. It's writing more and more of their code, something like fifty percent of code, and it's also helping them hit
more shots on target, particularly in marketing. But beyond that, I think when it comes to valuations, you need to on one end, look at the stability in the core business operations of some of these companies, these megacap tech companies which remain highly profitable, and then also some of
the upside moving forward in the AI race. And when it comes to the leading megacap tech companies, at least, we actually think valuations aren't as overstretched because core earnings are so robust and they are actively reinvesting a lot of those profits that cash flow into the next paradigm shift, and we're already seeing some early signs of success these Faces and Shovels companies.
They're also digging for goals and seeing the fruits of that.
Stephanie, when you were lost with us in April, it was just after the sort of deep seat chaos and we discussed how the semiconductor industry in particular was in the crosshairs of the administration. A lot has changed since then. Actually the administration has been very supported at exporting American technology. But just on the stories we touched on tariffs on semiconductors and location tracking on chips, there's a risk premium.
There is there absolutely geopolitics remains a risk. Policy has been a headwind for the sector in recent months and particularly today, but we are seeing a shift from this administration towards a greater appreciation around what safeguarding US dominance in.
AI really looks like.
Right, And I will add, outside of these risks around tariffs, what is really promising and quite structural, is that you have seen a decline in over ninety percent around the cost of inference for AI, and that has to do with four factors. Hard hardware, the chips themselves have been getting significantly more efficient. Algorithms are getting more efficient, how much data, how many numbers they need a crunch, we're
right sizing models. We now have mini models that we can access, and we've seen this democratization in models, particularly open source. So all of that has led to this pretty remarkable decline in the costs of AI, and I think we need to put that to one side when thinking about these risks for tariffs.
We shall borrow the acronym going forward. What I've wanted to ask you for a real long time, is there an America ink trade going on here where you just say, I bet on these companies that are most likely to succeed if this American strategy pays off.
I think it's a really interesting point, particularly in the context of this debate around US exceptionalism, because when I look at the markets right now, I don't see so much US exceptionalism, but exceptionalism from a few US companies, and that is really what is driving the markets right now. We're actually less concerned about valuations for let's say, the Magnificent seven and.
A bit more concerned about the other four.
Ninety three because without that structural tailwind when it comes to AI, it's a bit harder to see the cyclical tailwinds for the rest of the market. But when it comes to these leading tech companies, I think you do have unprecedented fundamentals and the continued dominance, particularly in tech services.
Now there's plenty for investors to consider, and we still think portfolios should be diversified, but at a time like this, you maybe don't want to be diversifying away from that epicenter of innovation.
Okay, so interesting that you got the.
Acronym hard tech is where everyone's looking at from a spot up culture but also into these big Magnificent seven. But then drip feed it down into where if you are going to diversify the sector, is that are deploying it right or indeed, is it more about the picks and shovels a little bit more, it's about the energy, It's about the infrastructure and that slide of the equation that keeps you in the AI spin.
Absolutely, the AI value is continuing to expand we think that infrastructure layer is huge, and that is a secular story that is still in its early innings. The amount of energy that we're going to need, the investment that we're going to need in a variety of different sources, and also everything that goes into those data centers themselves, the cooling equipment, the server technology, and so forth. So
we still think there's a significant investment case there. But what's also really interesting in particularly what we're seeing in private markets this year, is this explosion of AI applications, the kind of applications that businesses are going to need because it's not enough to give their worker SHATBT.
They need domain.
Specific AI applications that are actually productivity enhancing and show up in the bottom line. We're seeing more and more of those come to market this year, mostly in private markets, but I think that's a trend that is worth watching and just getting going.
And then they move from private markets into public markets and we see what happened with Figma and the bephoria around that particular listing.
Are you seeing more of.
Your clients wanting to know about what IPOs to get into or indeed how to make that move from private markets into public markets.
I think there's a lot of interest there, as there should be. I mean, there's a lot of anticipation for a pickup an Ibo activity, and I think the fundamentals and the promise and a lot of those AI startups could be the thing that really gets enthusiasm and comfort going.
In the market again.
But I also don't think that we're going to go back to that kind of post pandemic period. A lot of these companies have different goals beyond just being profitable AI companies. Right, many of the LM providers that are in private markets, they're on the race to AGI, and so there is also this appreciation that these AI companies can get a lot of the capital that they need in private markets, maybe they will more control over their companies. So if you want to access that opportunity set, don't
just wait for them to go public. I think you might want to look at your private market exposure and then also maybe some of those tactical opportunities that do arise this year.
Stephanie Aliago, JP Morgan. Great to have you back on the show. Thank you very much. Now coming up, Joe Faff, known for making early bets on comempanies like Alphabet and Amazon while at tro Price, joins us discuss his new role head of Growth for Eclipse, a VC firm.
That's next. This is Bloomberg Tech.
Investor Joepath's scale trow Price's US growth stock Fund from fifty seven billion dollars to over one hundred and fifty billion dollars in assets, and had twenty years at the investment firm, making early bets on companies like Amazon, Alphabet, and Meta.
He's now joining a Clipse, a.
VC firm focused on physical industries as the head of growth and also as a partner.
Joe's here with us in San Francisco.
I've always known you to be somebody who is higher up the cap table of big companies that then go public. Rivian is the example that I know best, late growth stage round and anchor investor in in what was huge IPO in twenty twenty one. You've been lures to bench capital in Silicon Valley.
Why good to be with you, Ed, I appreciate it. I'd say, you know, you've known me for a long time now, and I've been a builder of companies over time and investing capital, and those companies that they've scaled, I think what really attracted me eclips and opportunities. I really think we're at a seminal moment right now for
physical industries. So if you look at the companies that have been created now, both private and public, and you look at the market caps, there's been significant interest in those and there's capital formation around them.
The other parts of.
This, I would say, you know, all this is coming together at once. Is US policy, which you talked about earlier in the segment, I think is very supportive of bringing industries back.
To the United States.
And the other thing is clearly an inordinate amount of innovation around artificial general intelligence and ultimately artificial superintelligence, which I think provides this unique intersection of hardware and software to transform physical industries.
So the reindustrialization piece is something that comes up in this program all the time. There's a sort of national priority, national interest, even sort of national pride elements to it. How are you going to play that in your strategy.
I think it's important you talk about policy and ultimately national security and economic sovereignty, and it's very important, I think, you know, looking at the Eclipse team and why I joined them specifically, they've been doing this for ten years and had a vision a decade ago, and it's an incredibly competent, amazing team. During my process, the time I spent with Lere and the rest of the partners, they're passionate, they're hungry.
They're true builders.
They roll up their sleeves, they get their hands dirty, and they've done a lot of you know, early stage enterprises and companies. Where I come in. I've allocated capital at scale. I've looked at companies both private and public that have grown, and I've worked alongside invested in many
of the best companies in the world. So to do that as we scale these businesses and connect the two together with that team, their technical experience, in my financial experience, I think is really like a one plus one equals three situation. They remind me I'll date myself here, ed, but it's a team of Jerry Maguire's not.
Dating at all. It's an iconic movie, Joe.
I'm interested though, in just how you go from managing.
Tens of billions to going.
To managing and writing relatively small checks. What sort of size checking you're going to be giving do you think when you see these smaller scale companies that are going to be huge?
Yeah, well, I mean initially, right at the early stage or venture side of this Caroline, you're going to see smaller check sizes. But we're going to scal all those over time, both for companies as they hit a scale velocity and they need more capital to continue to build out their strategies. And on top of that, there will be companies, as we've seen, that need bigger check sizes earlier and getting more traction. A good example that is investment.
I made it both Trow and we've made it Eclipses Androl to give you an example.
So, and Andrew, I immediately think of just the focus from the government and indeed for many an investor right now, just what was happening in point seventy two, for example, on getting in on defense tech in particular. But I'm interested in other particular areas where you think the US is leaning in more that you want to be contributing to thinking. When you think of red word, I'm thinking about the supply chain more. But when you're thinking then
about Tesla is more about robotics. Where are your sweet spot's going to be?
Do you think?
Yeah, I've heard a lot of experience in electric vehicles, material science, battery technology, but that's also extended and I think it ties in with what Eclipse has done well, supply chain solutions, semiconductors. You mentioned defense tech, autonomy, So there's a lot of crossing a paths given my experience that I've had as a private and public investor, now as I join.
Eclipse, Joe, you visited Tesla in twenty eleven. You took Rivian public basically, and then you help them after going public, just very quickly, What were the lessons you took from M two companies?
Yeah, I mean, I think this is one of the seminal moment for me on physical industries was in twenty eleven when I visited Tesla. It was not just a differentiated product ed but at the end of the day, a different way of building right. The first principle ways of thinking, and we see that permeating a lot of businesses. And as we've had successful companies like Tesla, SpaceX, mentioned Anderill, Redwood, there's people leaving those firms and they're starting new firms
as well. So the ecosystem is growing and they're taking those lessons they learned with them, things that were really important to me, and I think I can help businesses with clearly, product market fit is very important. You know, right product, right time, solving the right customer problem set or providing them something that they don't have, that's very important. I've always talked about, you know, additional acts beyond X one. You look at Tesla, They've done that, SpaceX has done that,
Amazon's done that. So a handful of those and then and then really what I've we've focused on growth for many years is driving durable growth and making sure companies are sustainable longer term. So I'll be working with most of them to scale and ultimately get them to be durable public companies.
Joe Farf on his second act, the Klip's partner and head of growth, thank you very much. Coming up, Aberdabi's MGX gets ready to raise billions for its own AI ambitions.
We have more in that story. Next, this is Bloomberg Tech.
It's the time now for talking tech.
First up Abadabi based MNGX is said to be considering plans to raise billions of dollars as it ramps up investments in AI. And that's according to sources the firm. It plans to raise money through a fund structure and can raise as much as twenty five billion. Now this is his executives raising money from investors in Aberdabi, but also beyond Plus and videos assembly partner on High and actually saw sales growth slow in July, a signal that
tariff induced uncertainty is affecting electronics demand. Still, the company hopes to ride that wave of continued AI spending from its partners, even expanding its AI server assembly capacity in the United States and shares of German ship maker in Finion, where they're rising today after the company said that tariff impact it's fourth quarter fiscal results will be less than anticipated. Convenience CFOs Ben Schneider joined Blomberg TV Justselier today.
I would say from today's perspective, the indirect tariff guestimate for this fiscal quarter is probably less pronounced than we thought last quarter. On the other hand, we are faced with more and more negative currency headwinds from the weakening dollar, which offsets to a certain extent.
Coming up, eleven Labs bets on AI Music, launching a new service called eleven Music. We speak with CEO Matthew Sanazuski.
Next, this is Bloomberg Tech.
Welcome back to Bloomberg Tech.
In on those markets that just starling back from some of the record highs have been out recently, we're seeing then that one hundred and down sixt ten percent. There's more of a creeping anxiety about the macro picture in the United States that services data looking week, remember the jobs data that President Trump took issue with the end of last week also painted a less than rosy picture about the economy. We take some money off the table
as we digest also earnings. We're expecting amd after the bell, but let's look forward as also how we're seeing some companies still at record highs. Palenteered doing the work today, we're up almost seven percent, new record high after it's already climbed five hundred percent in the last twelve months.
This is their earnings managed to impress a billion dollars in terms of revenue.
We'll also see in Global Foundries, though not such a pleasing picture that they actually beat in terms of their fiscal quarter reported, but it's in anxiety around profitability looking forward that midpoint of the range not met. When it looks for their forecast, we're off by nine percent of the contract ship make red.
Okay, take a look at this chart showing the sales slump Tesla's posting in key European markets.
These numbers come as.
Chinese rival Bed picks up sales team in the region. I want to get out to Bloomberg Stefan Nikola to talk about this because it's an ongoing story. It's a trend that we've seen Tesla in some European markets dropping off and China's BYD making ground.
How would you sum the data we got most recently.
Yeah, I mean Tesla has been suffering in Europe for the past few months and suffering in the key electric vehicle markets Germany, the UK, France. Those are all markets that are rising in terms of electric vehicle demand. So you know that that's really bad for for Tesla. Of course, BYD, by contrary, is sort of making a big push into all of these markets selling electric cars but also hybrids and yeah, and just in general, it's it's a really
bad picture for Tesla. Of course, the company has a factory up and running in Germany and it needs demand.
Yeah, just try and weave the narrative for us, because Tesla wanted the narrative to be. Look, we're moving to a new production format, particularly with a model. Why that's what's slowing down perhaps some of our end results, but actually it seems to be political connotations. It seems to be competition.
Is the issue? Is that really what we're seeing here?
Yeah, there are a lot of factors at play here. The whole shifting to a new model and narratives is
way too simple to explain this drastic decline. Elon Musk's political activities are certainly contributing to this sales slump, as are better models from rivals, better prices from rivals, but also, you know, just very shifting market dynamics in Europe, but also more broadly, so you know, the overhaul of the model why as you we certainly plays a role, but it's definitely not the only reason for this really big slump.
Chefen Nicola, we thank you. For painting, but what is an intricate picture? Meanwhile, we shift gears. We look at AI voice startup eleven Laps its launching a new initiative for businesses stepping into the world of AI music. Customers can enter a prompt and generate a new tune within a matter of minutes using eleven Music.
That's the name of the service.
Joining us now is Matty Sanychewski eleven Labs CEO. So what is demand like, you're doing voices, but what was the inbound? What scale you're seeing of companies wanting to create their own music?
Carlin, thanks for having me here. So at eleven laps we are doing AA audio research and product deployment. We are on the mission to be the voice of technology, build the most comprehensive AI audio platform in the world.
And now this includes eleven Music, which we are extremely excited about because this is something that so many customers came to our platform to create a voiceover, to create a voices, to create narrations with our core models, but frequently needed that additional background sounds, soundtrack in those productions, which we will now be able to provide as part of the service from creators all the way through the enterprises.
It's a fraught world where you're trying to navigate IP. In particular, this is IP protective music because you've already got the training of the models is based upon agreements you have.
I'm thinking with Merlin Network.
That's for independent labels, it's a digital rights agencies.
Also got a similar deal with Cobalt Music Group. But what about the bigger ones, what about UMG?
What about some of the other key music license holders? Can you make deals with them?
It's exactly.
One of the very special things about the release of the Model is that it's both extremely high quality, one of the highest qualities in the market, while it's also fully licensed and built in collaboration with the labels, with the artists, with the publishers. Like you mentioned, we already are very happy to be working with Merlin and Cobbalt frequently referred to as the fourth both because they represent respectively thirty thousand independent labels on the Maryland side and
over twenty five thousand songwriters on the Cobbalt side. So really that gives us such a high ability to create extremely high equality music. Of course, as we look into the future, we would love to work with UMGWG Sony and help we find a path in the future to
do so. As we think about our work across eleven Music, that's one of the key elements to make sure that the work we do is both licensed but also gives you that broad commercial license to use it, which our enterprises demand from gaming all the way to media entertainment companies that we work with.
Maddie, are you talking with and negotiating with those major labels you just named?
Currently the focus was on bringing the current model and product to the market, So really we're deep with our partners with Merlin, Cobalt, Source, Audio Lander and a number of other partners that are in the mentioned in the release to bring the current iteration. As we bring the product to the market iterate, we will see whether we can expand out further.
But it does a lot of interest in eleven Labs in your business to what stage have you grown? Do you have any financial metrics ar R or anything you can tell us about how it's going for you over there.
We're doing really well as a company. A few months ago, over half a year ago now, we crossed the one hundred million ARR mark as a company and we've been growing steadily since. Across the company, we have really those two key offerings. The first one is that creative platform which music will form those in those early and initial days, and then the agendic platform where we help companies create
voice agent conversational agents. And over the last six months we've just seen an explosion in companies building with both parts of the use cases, both on the creative and the agentic side. We're now partnering over a thousand different companies in the market and over a five million creators that come through the platform on a monthly basis.
I want to go back to those creators because can you name any individual musicians, for example, that are willing to go this way? I think of how Grimes is really lent into this and she wants a fifty to fifty split with her royalties going forward. But what are the musicians you're seeing actually wanted to adopt this, Because, as I say, it is fraud.
We are seeing a number of musicians in the space that are keen to lean into the technology Iterate quicker make it a little bit easier to create music. Currently, as part of the eleven Music we are still crafting the partnerships and will hopefully announce some of those in
the coming weeks. So I cannot name any on that side just yet, but we've seen a wider set of creators working with the tools to make it easier to produce variations of the genres, make it easier to see how the tracks can be produced before heading that production stuff.
Maddy, there's a lot of intro seen you and eleven Labs kind of fits the profile of this like vertical model where it's a potential aqua higher target right. I just wonder what you make of what's happening right now, the windsurf scenario and whether you might consider doing something that joining a bigger entity to continue your work.
We are building generational company, are planning to go in the pandemic and try to create and become the voice of the technology, make computers speak, make information accessible across voices like ross sounds across languages and now music. So current default this to a create a company that can that can create something special on its own, and we
think we can. So hopefully the opposite will be true where we'll be able to acqui hire or acquire a number of companies in the space on that path too. To potential IPO in the future.
Matty Sanderschewski of eleven Labs, thank you very much. Now coming up on the program, and thirteen partner Brent Murray joins us talk about the firm's new investment in the generative AI advertising space.
That's next. This is Winberg Tech.
Venture firm M thirteen is just led a ten million dollar seed round in generative AI advertising platform Context. The startups now the largest and most well funded gen AI ADS platform to date, according to M thirteen. M thirteen partner Brent Murray's here to tell us more. This space is dynamic, right because it's highly analogous with Meta. You know, a lot of the story around Meta is how their working AI improves AD pricing, ad impact that core business.
You are looking at a very different scale and early stage. I'd just love to get a presentation of the thesis and why this is an interesting domain within AI.
Yeah, thank you Ed and Caroline as well for having me. So we are excited to announce the coming out of stealth of Context this morning. They're ten million dollar seed round to really become the largest and most well funded generative AD platform out there. And so to answer your question our thesis on the space, Well, we see the advertising world at a major inflection point, and I'm glad you hit on meta. There's also industry incumbent Google that have pioneered a lot of the previous waves.
We believe the first wave came sort of.
At the early two thousands when when Google pioneered digital advertising as a space. Then shortly thereafter, a second wave came in the twenty tens where social media platforms led by Meta attracted new eyeballs, new audiences online, and ad inventory exploded online.
And we see this as a third wave.
The one trillion dollar AD market, three quarters of which is done through digital channels, is about to migrate towards generative AI apps. You already see Open ai as the fastest growing app of all time, closely getting to a billion users. And it's not just them, they're just the most well known. You have a lot of other generative AI entertainment apps that are attracting audiences where context is going to target them.
What is context's core competency? What is it that they're actually doing good at.
Yeah, there are two things.
One is real time ad creation and the second is hyper personalized contextual ads.
So I'll take those in pieces.
The first one, similar to what Mark Zuckerberg is hinted at where Meta is going, is end to end advertising creative, where AI and llms are powering much of not just the targeting of audiences online, but the actual creation of the advertisement itself, the asset knowing what copy to use, what style, what color the image, the video. So what context has done is enable an AD to be created
in real time using an LM. If you are in a chat bot, then your ad will be served up to you in real time, which means you don't have to have a lot of wasted time on the ad creative a lot of manual processes creating thousands of iterations.
So that's the first thing.
The second thing is contextual hyper personalized. So in the old world, if you're on social media, I think a great example is my family and I just had a baby. Any of your viewers know that the months leading up to a baby, the months following a baby, you are targeted ad nauseum by the social media platforms because that is when you're most likely to purchase baby goods. But what happens after you purchase the crib, After you purchase
the high chair. You're not going to purchase them again, But hundreds of dollars are wasted on you as an audience because they're targeting you as a demographic and a social behavior. Take that as what context is doing is very different. They are targeting advertisements based on your real time queries into the LM. So if you are chatting through a chatbot telling it what you're interested in, an advertisement will be created in real time based on exactly what you're asking.
I kind of want to go to the regulatory or unnerving part of this, because we're almost trusting these chatbots more than say, the social media side of things. How do I know the chatbot's not steering me during my questions? How do I ensure that basically I'm not suddenly finding the conversation being bent to certain direction because it wants me a hooked in it.
So we're worried about addiction process again.
Or indeed forcing me to then bend my will to end up buying something and perhaps I didn't need.
How are we going to regulate that?
Yeah, that's a great question, and I think the advertising industry, because we're at this inflection point, we'll have to face a lot of those questions right now, you see what happened with social media platforms in the past. Consumers are always hesitant to go on ad platforms like Meta or Instagram and just be served at ad after ad after ad.
But then they become much better and influencers started talking about things that you wanted to buy, and a lot of advertisers and online merchants rely on some of these ads to power their businesses to stay in business. I think the advertisements in AI will have to follow the same suit. You have to be able to trust that the publisher or the chat bot isn't trying to steer you in the in the right in the wrong direction. That will lead to unnecessary churn. That's the last thing
that Context wants for their publishing customers. They want to create seamless environments where you're having a regular chat.
The ad will be.
Promoted or shown in a way that you can distinguish it from an advertisement versus non advertisement, that it's not predatory or you know, going after you.
In a certain way.
But you'll you'll see a very very natural process where the chatbots are feeding you up things that you already want to see, already want to potentially purchase.
Well, Google already doing that. In the third part, chatbots, It's fascinating. Brent Marrying, We thank you so much for your time talking about context. His partner over at thirteen. Now, let's talk about how women are holding well then eighteen percent of all partner and above rolls in venture capital.
It's all according to data just released by All Rays Now.
It's a nonprofit that aims to increase gender parity in tech and VC, and it's saying that this is ahead of its projected schedule. We spoke with All Raised CEO Page Buckner about where that change can be seen.
Most twenty percent of decision making roles at VC firms with a billion plus and aom have women decision makers, which is super exciting. And so when you think about that stat what's important to us is that we're making progress at scale. But we do know that at the mega funds there are only three women holding managing partner roles, and so there's a big opportunity for us to make progress there.
And they're the funds with more than ten billion in assets under management. Go back to the data therefore, page of what this means?
Why is it?
What is helping those that are managing in excess one bay and make those decisions have more decision makers who are diverse in thought.
Yeah.
So I think the first thing to ground ourselves in is that there's so much data and we talked about this last year that makes the case for having diversity and decision making roles at any kind of organization, and this is especially important in venture capital when they are making decisions about the kind of innovation that we're going to fund in the private markets and then eventually in the public markets as well. So it's important for us to stay grounded in the results, and we talked about
this last year. But what we know is that diversity is an advantage because diverse teams consistently outperform. They also better reflect where the market is heading. And one important data point that we've been thinking deeply about is the one hundred trillion dollars in wealth that's projected to move into the hands of women by twenty forty eight, and
that's just going to reshape everything in the economy. But as we think about venture capital in particular, we've been asking what does that look like for LPs, what does that look.
Like for venture firms?
What does that look like for the kind of innovation that these women are.
Going to be able to fund?
So is the thought process here more money lands in female coffers, They therefore want to work with more diverse LPs or allocate the LPs want to allocate to more diverse vcs, and they want to be putting money to work. How does that reflect in the portfolio companies that then these diverse bench capitalists and decision makers are putting money into.
Yeah.
Absolutely so we know according to our friends at Kaufman that women vcs are two times more likely to invest in women's CEOs at the earliest stages.
And we know that there's opportunity there.
And often these markets have been overlooked because they've been perceived as niche markets. But what's great is that when you bring in more diversity on the VC side of the equation or on the LP side of the equation, by the way, that is felt across the capital stack, and then the kinds of innovation that we can have on the start up side of the equation shift, and so what gets funded then also better reflects than part of me the marketplace, which is of course commanded by women.
When we think about the person of decisions around consumer and healthcare and education that are made by women every day for household across this country. So it is really reflecting not just where the market is today, but where the market is going to be. And we're thinking about the products that are therefore reflective of the consumer that vcs really want to be building for because they're going to be able to get outsize returns.
That was Paige Buckner, CEO of All Rays. Now coming up investors, IAMD results after the closing bell, the latest earnings expectations coming up next, and the analysis from Bloomberg Intelligence.
Stay with us. This is Bloomberg Tech.
AMD out with earnings after the bell, and investors are putting increased pressure on the chip maker, expecting the company to show benefits from the AI race. Here with more Kungensavani of Bloomberg Intelligence, you put a number on this market. In Vidia has ninety five percent of the market for GPUs is AI accelerators. AMD has five percent. What do they need to show us that they're making some ground?
Well?
This time around the non air things will be important, PC gaining share, some maybe pair of pull in embedded, coming recovery in three Q but as you said, the second half AI ramp both in server CPU and GPU will matter the most. They need to again show sustained
execution on the three fifty five ramp. There's a possibility of the China series coming back and adding about five hundred million to even more revenue in the second half, and any visibility into the Helios which is the next year server level REX solution, should be very positive.
Where have they been executing really well?
Because I feel like time and time again we're hearing about the PC side of the equation, but the consumer isn't too hot right now.
Definitely, the ND markets are struggling, but they have been really gaining share on CPU, both on the PC and the server, which has really been helping them outperform even the unit weakness in the market. Secondly, we have heard, you know news about them raising prices both on the PC, the service if you, and the GPU side. That really speaks to the strength of their adoption across the board.
Wow.
Planning to watch out for in terms of size and market application countri In Savanni on Bloomberg Intelligence some great notes coming out ahead of these earnings, and we'll analyze them after the Bell as well. That does it though for this edition of Bloomberg Tech, and so much to be digesting in terms of the market. It's the macro pressure, but we look at AMD after the Bell in terms of the micro perspective.
Yeah, another day where chips are in focused because of policy.
But like AMD, best.
Performing chip stock so far this year, right, and they have a lot of pressure on them. But it's an interesting company to follow. Good analysis from Kunjan recap it. As Cary said on the podcast, you know where to find it.
It's on the.
Bloomberg terminal as well as online on all of those great platforms Apple, Spotify, and on iHeart. From New York City in San Francisco, this is Bloomberg Tech