From Mahard. We're Innovation, Money and Power Collie in Silicon Vallet NBN. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Ed Ludlow here in San Francisco, Caroline hides off today. This is Bloomberg Technology coming up on the program. Full coverage of the tech companies making headlines, from Virgin Galactics spaceflight to Micron's earnings, and even Coinbase calling for a dismissal of its sec suit.
We got you covered.
Plus AI video startup Runway raising an additional one hundred and forty million from Google, Nvidia and other investors. We had the exclusive interview with the CEO and you may know him from Man Versus Wild, but now Bear Grills is tackling disinformation and pushing for digital literacy using AI. He joins us later this hour to discuss his new initiative.
Let's get a check in on the Micron. Micron giving a bullish outlook suggesting that we're coming out of the trough when it comes from memory chips, but the market's not buying it. There is debate on the street about whether this recovery the micro has outlined is going to happen as they suggest, Let's get the reaction in the analysis and bring in Bloomberg's Mandeep saying of Bloomberg Intelligence man deep the recovery the trough.
Are you buying it well? So they had some mixed data points.
If you look at the guidance, clearly that was above consensus. But when you look at the inventory days going up to one sixty five from one fifty, we thought, you know, their fiscal two Q the last quarter was going to be the peak. So clearly they're writing down less inventory. Last quarter they wrote about one point four billion. This quarter, they only wrote four hundred million dollar off inventory. And they didn't give us enough data points around their Generative
AI exposure. They talked about how bandwidth high bandwidth memory, but they didn't give us like quantification of how much exposure it is, how it's gonna ram. So that's why I would say it was a mixed quarter. But look, I mean, at the end of the day, there are three players in memory, and if generative AI is a secular Tilwyn and we are in the early innings, I think you could extrapolate that there will be memory demand just because it goes hand in hand with the chip and the computer capacity.
I love nerding out on d RAM and nand I always love nerding out in DRAM and Nand the thing is, it's such a commoditized chip. And the story that Micron was trying to paint was that all of the laptop makers, PC makers, smartphone makers, they built up the inventory, and they'd work through the inventory and they were going to start ordering again. But actually that kind of contrasted with the outlook for the markets. How many PCs we think will ship this year, how many smartphones we think will
ship this year? What did you learn, Mandy through Micron's commentary in that respect.
Yeah, so they lured their PC shipment forecast for this year smartphone shipment as well. They lured it by a couple of percentage points. So, look, I think near term, given their high exposure to PCs and smartphones that makes up almost seventy percent of you know, their DRAM sales.
So you could argue that given the high exposure they have to these two pockets, which are unlikely to recover in the second half, it makes sense, you know that they still have work to do in terms of working through the inventory and the orders aren't going to come back so soon, and they're cutting back supply, which I think is a positive. When you think about the dynamics of a commoditized space, the supply demand balance is key. So they are reducing their supply. They would hope Samsung
and s k Heinis are doing the same. And what it could do down the line, you know, second half to twenty twenty four or twenty twenty five, is you could see a big pop in pricing because right now pricing declines are moderating, but no one is expecting prices to go up for memory. If the supply demand balance is restored, you could see that pricing pop up given the tail Vince we're talking about from generator to AI.
Here on Bloomberg Technology, we follow the d ram man neat seeing of Bloomberg Intelligence.
Thank you very much. So let's get out to New Mexico.
Virgin Galactic officially launching and landing in the last few minutes its first ever commercial spaceflight.
Bloomberg's Lauren Grush.
Space reporter in chief, out there in New Mexico. Lauren, what just happened?
Well, actually you just missed it. The crew just arrived back from their spaceflight here at the Spaceport America, everyone celebrating. You might be able to hear some cheers next to me. At the moment. It's all smiles as a picture perfect flight today. Unfortunately you might see the clouds behind me. They did obscure our view here from the ground, but everything went smooth during the actual flight.
Okay, So the context of this mission is it's the first commercial mission, the sixth in total that they've breached the fifty mile mark above Earth's atmosphere. It seems strange to kind of look so far ahead, but what's next? I mean, what is Virgin Galactic going to do? Because this is a company that has struggled for years, had some real tragedy, and is way behind its original schedule.
I mean, it really was leading all to this point, right, And so what happens next is they need to start launching regularly, and then they need to up the frequency of their launches. So the plan at the moment is to do monthly launches here on out. The next one is scheduled for August. This today's flight was a research mission with the Italian Air Force, but soon they're going to be opening up to that eight hundred list of
private astronauts that they signed up many years ago. So soon we might be seeing some high earning flyers fly, potentially as soon as August.
Okay, so the dual fusilage aeroplane takes the craft to fifty thousand feet, they separate ignition seventy second, burn fifty miles. What was that experience like on the ground? Is their nervousness there at Spaceport America? How is your heart racing, Lauren?
Oh, definitely, there's a thing that I like to call launch nerves that happens with every single flight, whether it's say rocket that launches from the ground or one like Virgin Galactics that takes off from the air. Definitely, in the seconds beforehand, you can feel the energy kind of started to tighten on the ground. We were hoping to see the ignition ourselves, but we didn't see it.
However, we were able to watch.
It from the live stream. They had big cameras out here, and once that happened, you know, everyone just kind of let out that relief and cheers and claps and applause were happening. So it was a really special moment to be here among all of the employees who've worked really hard to get to this point because it has been a very long time in the making for them.
All Right, Bluemos Lauren Grush on the ground in New Mexico.
She messaged me in the moment and said, sonic boom as it was coming back down. Thank you for your live reporting. We'll stick with you throughout the day, I'm sure. Now next up Coinbase looking to get their sec lawsuit dismissed, saying it lacks merit. Earlier we spoke to the company's chief legal off Sir Paul greul.
Or an exchange a commission to now claim two years later, more than two years later, somehow we were running an unlawful enterprise when their mandate requires to consider the protection investors and their very namely requires them to apply the expertise and securities and exchanges.
It doesn't, It doesn't make any sense.
Let's bring in Broomberg, Shnali Bassack, who conducted that interview.
Shnali, what else did you then?
Yeah, a few things.
First of all, remember our coinbasis stock has been flying in the face of a lot of these crackdowns this year. It's more than one hundred percent ed this year, and at the same time you have it up today as well.
This is more than one hundred page.
Response that coinbas has filed against the SEC saying that it intends to ask to dismiss this case, saying that it goes beyond existing law. Now listen, One interesting part of this is the argument that they make about the SEC allowing for the IPO in the first place and going through the disclosure forms already.
Our own Bloomberg reporter Oli Vspiel makes this great point.
That a lot of securities experts wonder whether you know, really this is about the SEC requiring disclosure more than identifying the legalities inside of a coinbase's business, which lists more tokens now than it did at that time. It's certainly a very interesting case and a bell weather for so much of this industry. And it also comes at the same time as coinbase being listed as the custodian for black rocks ETF tied.
To spot Bitcoin.
So really, on two fronts here, one is a very tense story, another one is one of hope that that will be approved that bitcoining TF sometimes soon.
So I'm looking at shares.
We're up two point four percent in the session, right, they want the suit thrown out. So is this a real legal move or is this posturing in a bigger process.
Well, listen, not only do you have Paul Growell, who's the chief legal officer formerly worked at Facebook, seriously in tune with the innovative landscape out there, not his first rodeo. You also have them working with Sullivan and Cromwell, which is one of the biggest financial law firms in the world.
Walk tell more than Hudre and pay lawsuit.
We've had them tell us a few times now that they would take this to the Supreme Court if need be. So they're very serious about fighting this to the end, no matter how much uncertainty that creates an interim.
All right, Bloomberg Shinali Bassak bringing us that reporting and exclusive conversation.
Thank you. We will track that story now.
Coming up on Bloomberg Technology Chat GPT's open AI is being accused of stealing vast amounts of personal information for its artificial intelligence models. Will bring you the latest on that next. I'm seeing some breaking news across the Bloomberg terminal. Pokemon Go maker Neantic is closing the studio and canceling the game Neantic CEO announcing that.
Move in a blog post. We will track that stories.
So many of you are tracking Pokemon Go some other breaking news. We are getting Savers Value Village opening price twenty four dollars seventy seven cents. It's IPO was eighteen dollars a share, So Savers Value Village opening a twenty four dollars seventy cents a share. This discount store that's listing and pricing in this morning session. We will continue to track how that performs. We've had some energy a little bit in the IPO market in recent weeks. Wow
fast hearts of the show. This is Bloomberg Technology. Let's go back to that breaking market's news. Savers Value Village opened at twenty four dollars seventy seven cents a share, having priced its IPO at eighteen dollars. That currently gives it a market cap of about three point nine billion dollars. We're trading in this moment at twenty four dollars forty cents a share, bouncing around, but it's interesting some energy in the IPO market. This is the fifth biggest side
of the year based on money raise. We talked about Carver the fast casual restaurant chain with a Mediterranean slant just a week ago, wasn't it. So we're seeing some some back, not so much the technology sector, but get on your Bloomberg terminal, and that is what Savers Value Village looks like right now. Open in twenty four dollars seventy seven cents, trading twenty four to forty one after pricing at eighteen.
All right, let's move on. It's time for talking tech.
And first up chat GPT creator open ais being accused of stealing vast amounts of personal information to train its artificial intelligence models a one hundred and fifty seven page lawsuit. Plaintiffs are alleging open ai violated privacy laws by secretly scraping three hundred billion words from the Internet, tapping books, articles, websites, and posts, including personal information that was obtained without consent. We will continue to track that and seek OpenAI's comment.
And Microsoft CEO guaranteed that Activision, Blizzard's top selling Call of Duty title will stay on rival Sony's PlayStation. This comes after Microsoft called its own CEO and Activision CEO to testify in San Francisco Federal court that the company sixty nine billion dollar tie up won't hurt competition in the markets for console and subscription based games, plus sticking with gaming. Sega dismissed speculation it may be the target.
Of acquirers like Microsoft.
The studio behind Sonic the Hedgehog stressed it intends to remain part of a bigger Japanese entertainment conglomerate. Co COO Suji Utsumi told Bloomberg News. While the game publisher maintains a close relationship with Microsoft, it is not open to acquisition talks.
While we if you honor, I mean they are the value us a lot. So you know, we we still work force louse of Microsoft. They always show you know, you know, our respect. So we've being you know, really having you know, I meanship with them, and we really appreciate that they, you know, somehow value us.
Does Sega have any intention to be acquired?
No, very simple not.
No.
Let's get to another top technology story.
Lena Khan's Federal Trade Commission has already filed three cases against Amazon.
Now she's gearing up for the big one in the coming weeks.
The FTC plans to file an antitrust lawsuit focused on Amazon's core online marketplace. Joining us to talk more about this reporting is Bloomberg News is Leah and Eiland.
Leah, We've learned a lot what a source is telling us.
Yeah, so we're expecting the big one sometime later this summer, possibly as soon as next month. This is a long running FTC investigation that actually started four years ago this month. Our story this morning actually got a look at the first information request the FTC sent to them, and it was very broad. I asked a lot of questions about their online marketplace, how they deal with third party sellers, and the relationship they have with Apple over selling Apple products on the marketplace.
Over the past two.
Years, since Lena Khan took over the FTC, they've really focused a lot on Amazon. As you mentioned, they've now sued the company three times in the past month over consumer protection violations. But this one is sort of expected to be the really big one that takes aim at Amazon's big moneymaker.
We're looking at shares of Amazon down nine ten percent in the session, but clearly a concern.
When I read the story.
On Bloomberg dot com, I thought a lot about Lena Khan, the individual, what this means for her in her role at the FTC. What have you learned about how active and how involved she is in this process.
She's been very, very involved since taking over two years ago. When she took over in June of twenty twenty one, so two years ago. This month, she sort of reorganized the entire way that the FTC has been looking at Amazon, including giving the investigators some specific lines of questioning to sort of look into. She put a new person in charge of the case, a fellow academic by the name of John Newman, and they really bulked up the number
of people who are involved in this case. The Trump administration had opened it, but they had really focused a lot of their resources in the case that the FTC brought against Meta, and con has really moved to focus the agency more on Amazon because she sort of believes that the Trump administration really didn't give it the attention that it deserved.
All Right, bloombos Lea and Iland with that exclusive reporting alongside our own an edge and check it out on Bloomberg dot com. All Right, the world's dealmakers are down roughly a trillion dollars in one of the worst years for takeovers and stock market listings in a decade.
That's the year on year.
Drop in the value of M and A and IPOs in the first half, a period in which inflationary pressures, financing constraints, geo political tensions. The list goes on mixed activity across regions and sectors that according to Bloomberg data excluding COVID impacted twenty twenty, it's the smallest first half total in a decade and blow the average for the period.
All right, let's stay global and bring in Sekinder sne Cassidy CEO of Zero, the cloud based small business platform is based in New Zealand and bringing into accounting, payroll and workforce management solutions to customers globally, which's also via some of the largest tech companies in the worldlike Google and Amazon. Good morning, warning it welcome to bin the technology. When you heard that about the first half of this year,
I go straight to thinking about what you've seen. Broadly, think about all of your customers and the platforms you offer. You must get a pretty good lens into the health of the tech sector.
We certainly do. Actually, I think we get a look into the health of this small business economy globally. Because of course Zero has over three point seven million subscribers that are predominantly small businesses call it five to fifty employees. And I think what we see is a pretty mixed picture. On the one hand, and I'm sure this is no
surprise to you. On the one hand, you have rising inflation, you know, supply chain getting more expensive with that high interest rates, but on the other hand, still low unemployment rates, new business formation is still happening, and of course you have talent shortages.
So what we hear from.
Our small businesses is this is a time of uncertainty and mixed signals, but it's also time where they really need to manage their cash pretty carefully.
I'm really interested in the company global customer base, global footprint, Australasian origins.
Yes, you're here with me in San Francisco. What's that like?
Well, I think this is about the company turning its attention globally. I mean, if you look at zero, you know, the original disruptor really in cloud based accounting started out of New Zealand from Rodgery, an X accountant himself, but really has grown the UK our second biggest market, North America obviously a big home for small businesses worldwide, and I'll sell important for zero.
We have to talk about the landscape.
I think about quick Books as an example here in the US doing some battle with them.
Yeah.
Yes, Look I think around the world, Zero and QuickBooks run into each other.
I'm not suggesting this is an Elon musk Mark zucker Bog situation.
I'm just saying, and quite frankly, that is a total distraction for us. We care about getting our business done for our customers. Yes, of course we see them in every market, but I think the most important thing to land is that for all of us in this area, the real big winner is just moving people from offline to online. Cloud adoption of small business accounting is actually for the behind things like website building, but it offers
so much efficiency for small businesses. So we're all just trying to bring those small businesses online.
I think what we learned from the collapse of Silicon Valley Bank, which was in the context of payroll and banking, but under duress small technology business as well. They have to pivot and they change. It is the tough macro environment kind of acting as a catalyst among your customers to kind of change how they do business.
Use technology of course, and it's a tale of two cities. First of all, if you are not a venture backstartup, and the majority of our customers, you're small businesses of every dimension who have never had the benefit quite frankly, venture funding. They're paranoid about cash and cash management all the time.
I think we can.
Agree that Silicon Valley Bank and i'd say companies that have been funded in tech are particularly nervous about their cash management.
Right now, you've done some headcount trims. The sector is looking at headcount reduction. How have you managed that? And let me ask you very quickly, is that in response to AI and the ability to use AI or is it just a macro issue.
Actually, for us it was very simple. The company is tremendously high growth, but we just want to get more disciplined and create more operating leverage for our own business, and so we're focused on profitable growth, but customer first.
So kinder syne Cassidy CEO zero giving us the global take what it's like to be a global player in technology. Now coming up, artificial intelligence company Seeker and acclaimed outdoorsman Bear Grills a teaming up to combat misinformation in digital spaces. He joins me next to talk about that new collaboration.
He's looking at AI and the new survival skill, and as we had to break, we're watching shares of Netflix after City raised its price target on the stock, saying the streaming service has performed well since announcing that ad supported subscription plan and the introduction of course paid sharing the password crackdown. City now expects eighty two million new subscribers and ten point six billion dollars of incremental revenue.
Based on the more bullish ad tier estimates.
The company increased the price target and opened a quote positive catalyst watch ahead of second quarter results.
Netflix.
Yeah, look we're up four ten tove percent in the session. Some values around the corner, and I think there's a lot of conversation to be had around the competitive pressures on some of these streamers. Welcome back to bloombow Technology, ed love low here in San Francisco, thinking about the markets, and look we're treading water. Think about the Nazet one hundred very tech heavy index basically flat, up three tenths up zero point zero three.
Percent in the session.
The story is really about the Fed and traders bedding that we will get two rate hikes by year end that sent yield higher. Sometimes when you push higher, you look at those stretch valuation tech names on the nazet one hundred. We see them come down, but we are essentially flat. Some names in the green, some dames lower. I'm checking Apple up two tents one percent. One hundred and ninety dollars. Seventy cents a share would give Apple market Kappa three trillion. We are on watch for that,
but some way off it. We need a few tenths of a percent more of a gain to see that. JD dot Com a US listed shares of the Chinese company moving to the downside down two percent. Its founder has registered to sell stock that may be having an impact. And Microsoft also in seeing the big news story this Thursday is that Microsoft and open ai are going to help Moodies investor Services build a generative AI tool for
use in movie's customers. Not doing much taboost to stock up two ten to one percent, just flagging it as an example that some of the AI headline hype is not necessarily moving the needle when it comes to these equity markets. Now, I want to take a moment to quickly highlight some of the content coming from Bloomberg Originals.
On tonight's episode of the Circuit, Emily Chang meets with Hailey Beaber, who talks about founding her skincare company road the bubble of celebrity beauty brands and social media backlash.
I do feel like there was a fatigue. I felt like when I announced the brand. Of course, there was people that were like, Oh, here we go, here's another one, and I'm like, I get that, I understand. I'm also coming from the point of view where I'm like, trust me, I know, but this is my approach and it is different to other people.
To watch more of that in you with Hailey Bieber.
Watched The Circuit with Emily Chang tonight ten pm in New York on Bloomberg Television, or stream it from APM Eastern on Bloomberg Originals. Let's get back to Bloomberg, Technology and AI. One of the fears behind fully embracing artificial intelligence is the spread of dis and miss information. It's part of why digital AI company Seeker and acclaimed survivalists Bear Grills have committed themselves to giving young people the
tools necessary to make informed decisions about online content. I'm delighted to say that joining us now is Bear Grill's TV hosts and of course author of You Versus the World, the Bear Grills Guide to Never Giving Up. Let's get right to it, Bere. I know you as somebody who advocates the importance of survival skills. Why is computer literacy or even engagement with AI the next survival skill to your mind?
Because I think young people need to be in powered with modern day survival skills that are going to be relevant for their life and empowering for their life. And in terms of survival, you're not going to get more of a wild worth frontier than helping kids decipher and discern and be wise and be smart about information about
where they're sourcing information from. And you know, I think we've never had a time in history where it is so challenging for young people to be smart, to be empowered, to be digital survivors, to be digitally literate, and to have an understanding of what is real and what is you know, propaganda or misinformation. So Seeker speaks to that. I'm really proud to partner with them because we've build
this whole thing called Mission Seeker. It's all about helping young people go on their own little adventures, whether it's a humanitarian thing or whether it's an environmental thing, and build this community. But through this process, we're trying to help them learn skills they're going to be really powerful
and relevant for their life. And Seekers clever, you know, they kind of they score the reliability of all the sourcing of information and try and use AI in a positive way to help young people bear.
What are the basics from a technology standpoint If I'm a young explorer, how do I engage with Mission Seeker? What is it that I'm doing literally at the computer or on my smartphone.
Well, first of all, Seeker is a search engine, you know, that's what it is, a search age and this family friendly is for young people, and it's going to use this AI technology.
To help score the reliability.
Of information coming in everything from clickbait to sourcing, to transparency, all of that. And then within that we've built this Mission seeker dot Com, which is basically it's like an education adventure platform for young people to share their adventures. So it's sort of it's a motivating thing to get young people to be able to then use the Seeker technology in their life. But we've got some great young ambassadors leading the way for us who are already out there
shooting really fun humanitarian and environmental missions. And every month we're going to set a new one. And people all around the world have started to get involved with this to shoot them and film their own little adventures and
build this community. And like I say, you know, it's trying to do something good in this AI space where you obviously hear a lot of negativity and you know AI is going to be so dangerous, and of course new technology everyone's always nervous and new technology nobody likes change, do they apart from a baby with a wet diaper?
An interesting analogy. What is the catalyst?
I mean here on Bloomberg Technology, we've been talking about artificial intelligence day out, day and day out for a long time, but we recognize that November and chat GPT becoming available to the public had a global effect. What was it for you that got you thinking that you need to be involved here.
And the sort of the things that actually put some you know, parameters and boundaries and positive you know things surrounded. Technology is always the second phase to come.
You know. The first thing is the technology, isn't it? And it goes at a.
Million miles an hour, and something like chat GBT comes along and everyone's in it, and there's there's a good part of that, but there's always going to be a bad part as well. And you know, it really is you know when I say it's a tsunami of information not only coming at young people but also then being generated and put out, and we're sort of trying to then put some tools.
Is tools the right word?
I suppose it is tools around it to then help kids are smart themselves, they know it, you know, they're they're they're much smarter than we often give them credit for. But you've got to resource them with the tools to be able to be smart. And I think ultimately that's what Seeker is about, and their mission, Seeker is about trying to make a fun adventure platform to bring kids into that space.
Bear Grylls, we are familiar with you and your programs and your books going out into the wilderness and using as few tools as possible. Paradoxically, I'd like to ask you which artificial intelligence tools you do engage with yourself, how you use the technology in your day to day life.
Well, first of all, I'm not a kind of a digital dinosaur like that. I'm not like, oh, we've got to, we can't. You know, you've got to.
You've got to.
You've got to embrace technology. You've got to embrace change. You've got to use it. You know, if you think survivors of old, they were always using the latest stuff, whatever would help them. And I think as a modern day explorer, we need to be the same as a modern day survivor. We've got to be part of that. You've got to use technology. I definitely use AI in
various ways. And I think as a parent it's our responsibility to provide young people and to provide our kids with with resources that are really practical and are going to help our kids become digitally smart and literate. So for me, I use before we partner with them, and I thought, I really like this. This is actually a family friendly search engine tool that is doing a lot of the hard work for me. You know, in terms
of scoring, the reliability of information coming in. Nothing is going to be perfect, but it's you know, and that soon I was coming fast. But it's trying to do something that speaks to that problem which all of us know is an issue of young people and where they source their.
Information bear grills.
So I was in no way suggesting that you're not a technologist. And when you move into your next initiative and you engage with technology, come back onto the show, onto Bloomberg Technology and discuss it with you with us.
Thank you for your time. I love it, ed do you take care of my friend all the best? Thank you bye.
Now coming up, we'll sit with AI, but also bring in crypto and we'll be joined by NFX partner Morgan Bella.
More on that.
Next, this is Bloomberg Technology. Let's bring in Morgan Bella, general partner at NFX Capital Management, a VC firm investing in gaming, generative, AI, fintech, crypto.
The list goes on.
So also the co founder, of course of Libra, which was Facebook zone attempt at a cryptocurrency. It is today's VC spotlight. Good to see you, Thank.
You for having me. Great to see you in person.
We could talk about anything. Let's talk about AI.
NFX is moving, is acting on what's happening all around us here in San Francisco Silicon Valley. How are you doing it from an investment standpoint of course?
So one question I have and that I've been asking is what does it mean? People are like, are you investing in AI? And like, yes, like what is an AI company? In that every company kind of needs to be an AI company?
Well, people differentiate though between AI native and AI adjacent is one way of splitting it up.
Yes, so for you, what is the priority or what is the focus?
There?
So two different answers. One is it feels similar to crypto? So, as mentioned, I was spending most of my time in crypto, and when we looked at a crypto company, we always said, what is this company actually? Is it a marketplaces company? Is it a fintech company? Is it a media company for which crypto is the rails that enables it to do something that couldn't be done before? And we're viewing AI companies similarly, which is what is this actually? Is
it a legal tech company? Is it a fintech company? Is it a marketplace company for which they are using AI to do something that hasn't been done before? So that's one lens and the second lens is this leap frogging piece which I will shamelessly show that I wrote about recently, which is the concept that AI will move into industries that were were are underserved by SaaS.
Look, can you give me an example, a tangible example.
A legal industrys Okay.
Uh we we do not uh pay CEO Josh Browder has but been on the show, and so it's about, you know, kind of a similar use case you're all fits is in Hayes Valley. We try to make this show global, but what I keep hearing is that everything
that's happening in AI is happening here. And we had Gary Tan of y Combinator on the show two days ago and he called Hayes Valley cerebral Valley because to his mind, all of the talent that are working on llms and foundation models and the VC's backing them, you can find in several isolated blocks of that neighborhood.
Do you recognize that? Do you agree with that statement?
I very much agree with that statement.
I didn't know we're going to be talking about Hayes Valley in San Francisco, but I'm very happy too.
So why is it a thing, you know, for the global audience. Why are we talking about this tiny neighborhood in San Francisco which is a tiny city, geogra tiny city.
Yeah, the tiny neighborhood in a tiny city.
So I joined the firm about three years ago, and our office was downtown, so near where we are right now, and with all due respect, we're currently on the Embarcadera,
which is a beautiful part of downtown. We were in a beautiful part of downtown, and I felt very strongly that we had to move the office into a more residential area in the heart of the city because I felt that for the first time, people that were in San Francisco were choosing to be here cause they wanted to be here, versus they had to be here.
And this is first pandemic.
This was January twenty twenty one, okay, but that you saw actually the residential areas coming to life in ways that they weren't before. So we spent a lot of time looking for commercial real estate in a residential neighborhood, which is hard to find because of infrastructural reasons in San Francisco, and we landed in Hayes Valley, which, for those who don't know, San Francisco is like a hand and Hayes Valley is right in the center of the hand.
We're currently over here like along the water and kind.
Of by Luck.
I like to think that maybe we wilded into existence in some way. Hayes Valley is now known as Thribol Valley, as you mentioned, which is a comment on all of the AI companies and all of the AI talent that you're seeing, And it really does feel alive in a way that I haven't seen in a neighborhood in San Francisco, and I've been here for ten years.
Real terms, a lot of people that watch Bloomberg Technology are founders, early stage or otherwise. They are investors in vcs. They're just people that enjoy technology. And the way that Gary tampered it is that if you go to I'm not going to name my favorite, if you go to any cafe in Hayes Valley, you tell me you're after the show that you can literally bump into a brilliant mind in the field of AI. Is it literally as granular as that?
It is literally as granular as that.
So you walk around Hayes Valley and you bump into people that are working on interesting things. Like last week, there's a little green area in the center of the center of the neighborhood and I ran into someone who I knew from the Crypto World who was speaking with.
This AI founder.
And then also like you'll walk around and literally, like how they talked about in the nineties, you'll see garage doors open and people on their computers, and you'll literally see on the telephone polls flyers for AI Happy Hours, AI Hakathans very quickly.
Are you seeing the same energy and crypt which is your background, the same entrepreneurship and energy.
The energy is still there. However, there is this.
Classification of person that my partner James Currier calls fruitflies, the people who you know fly around.
To the sweetest thing. And I think some of.
Those fruitflies have gone from crypto to AI to the Hayes Valley comment though, my partner James Currier, who moved here in the nineties, also talks about how Silk and Valley and what brought him here was the creator culture and how when you came here, anyone you would bump into at a cafe or on the street was building something and that was really exciting. And then he talks about how it transitioned into the money culture and how everyone you talked to was telling you about their Tesla.
Lamborghini or whatever.
And it feels like for the first time, he said, in the past thirty years. It we're back at that creator culture feeling in specifically Hayes Valley and that's nice to feel, all.
Right and Facts General partner Morgan Bella, good to catch up in person here in San Francisco. And now coming up runway securing in a dish or one hundred and forty million dollars in funding from some big names in the world of tech. We're going to sit down and exclusive with the CEO and Bloomboat's Rachel Metz, who leads the AI charge.
That is next. This is Bloomberg