AI's Impact on Hiring and Huawei Laptop Teardown | Bloomberg Technology
>> FROM THE HEART OF WHERE INNOVATION, MONEY, AND POWER COLLIDE INTO LOOK IN VALLEY AND BEYOND, THIS IS "BLOOMBERG TECHNOLOGY" WITH CAROLINE HYDE AND ED LUDLOW. CAROLINE: I AM CAROLINE HYDE AT BLOOMBERG'S WORLD HEADQUARTERS IN NEW YORK. ED: I AM ED LUDLOW IN SAN FRANCISCO. CAROLINE: A MIXED PICTURE ON U.S. JOBS.
WE WILL GET THE READ ON THE STATE OF THE LABOR MARKET AND HOW AI WILL IMPACT HIRING IN 2024. ED: THE TEARDOWN OF THE HUAWEI NEWEST LAPTOP THROWS COLD WATER ON ANOTHER TECHNOLOGICAL BREAKTHROUGH FOR THE SANCTIONED COMPANY. CAROLINE: AMAZON TAKING ON GOOGLE. WE SAT DOWN WITH PERPLEXITY AI
WHICH HAS A HALF BILLION VALUATION TWO YEARS SINCE ITS INCEPTION. LET'S CHECK ON THESE MARKETS. THE WHIPLASH. STRENGTH, RESILIENCE IN THE U.S. LABOR MARKET. THE ISM NUMBER TURNS THE
PICTURE A LITTLE SOUR. BAD NEWS BECOMES GOOD NEWS AND THE STOCK MARKET RECOVERS, UP .4% ON THE NASDAQ. THE TWO YEAR YIELD COMES DOWN AFTER WHIPPED ITSELF HIGHER.
THE TURNAROUND IN THE U.S. DOLLAR HAVING ORIGINALLY BEEN SEEING IT ON THE WEAKER SIDE, AS WE SAW WHAT WAS SOME STRONGER DATA. WE NOW ANTICIPATE -- IT IS ACTUALLY RISING ON THE DOWNSIDE BY .2%.
WE HAVE BEEN HIGHER ON THE DOLLAR AND THEN WE GO LOWER AS EVERYONE TRIES TO PRICE IN WITH THE FEDERAL RESERVE IS GOING TO DO. WHEN THE NFP NUMBER CAME IN EVERYONE THOUGHT THAT IS PUSHING BACK THE RATE CUT. THE ISM NUMBER AND JOBS DETAILS SHOWING WEAKNESS, EVERYONE WENT FORWARD TO MAY BE A RATE CUT IN MARCH. LET'S SEE WHAT IT DID TO BITCOIN. NOT THAT MUCH OF THE WHIPLASH WITH THIS CRYPTOCURRENCY. STILL ON THE DOWNSIDE NEVER POKING ITS HEAD ABOVE 0%.
WE ARE OFF BY SOME 2.7%. WE STILL ANTICIPATE NEXT WEEK'S POTENTIAL SIGN-OFF. ED: I'M ZEROING IN ON APPLE. ON FRIDAY'S SESSION, WE ARE TECHNICALLY IN THE GREEN AND THEREFORE APPLE HAS SNAPPED FOUR STRAIGHT DAYS OF DECLINES. IF YOU THINK ABOUT THIS IS THE
FIRST TRADING WEEK OF THE YEAR ON A PERCENTAGE BASIS, THIS IS THE WORST START TO A YEAR FOR APPLE SINCE 2019 ON A PERCENTAGE BASIS. ON A MARKET CAP BASIS, THE DROP IN MARKET CAP OVER FOUR OR FIVE SESSIONS HAS BEEN ABOUT 170 BILLION DOLLARS. THAT IS THE WORST START ON RECORD FROM A MARKET CAP PERSPECTIVE RAISING THE QUESTION, IF APPLE'S CROWN IS THE WORLD'S MOST VALUABLE COMPANY, IT HAS HELD THAT POSITION SINCE 2022. THE BLUE LINE IS MICROSOFT. IF WE CONTINUE ON THIS DOWNWARD TRAJECTORY ON A MARKET CAP BASIS, DOES IT DROP BELOW MICROSOFT THAT THEN BECOMES THE WORLD'S MOST VALUABLE COMPANY? THE CATALYST WAS THE DOWNGRADES CONCERNED ABOUT THE GROWTH OF THE IPHONE PARTICULARLY IN CHINA. CAROLINE: WHAT IS THE READ ON THE RESILIENCE OF THE CONSUMER, THE LABOR MARKET? STRONG PAYROLLS SUPPORT CLOSING OUT 2023 SHOWING THAT THE U.S. IS ADDING 216,000 JOBS IN
DECEMBER. THE JOBLESS RATE REMAINING UNCHANGED. THEN COMES THE U.S. SERVICE SECTOR NUMBER. THAT SHOWS STAGNATION AT THE END OF 2023 IN THE GAUGE OF EMPLOYMENT. THAT PARTICULAR SIGNAL WAS ITS BIGGEST CONTRACTION IN THREE YEARS. I'M GLAD THAT WE HAVE SOME NEW WANTS TO PUT TO IT WITH AN ECONOMIST WITH THE INDEED HIRING LAB. WADE THROUGH THESE WATERS. WHAT ARE YOU SEEING IN TERMS OF
THE U.S. LABOR MARKET? >> WHAT WE ARE SEEING RIGHT NOW AND OUR POSTINGS DATA FROM INDEED IS WHAT WE HAVE SEEN IN THE OVERALL LABOR MARKET PICTURE FROM GOVERNMENT NUMBERS. A DECLINE IN JOB POSTINGS THROUGHOUT THE YEAR, BUT STILL A MUCH STRONGER LABOR MARKET THAN PRE-PANDEMIC. THINGS HAVE SOFTENED, BUT WE ARE STILL ABOVE WHERE WE WERE IN EARLY 2020. ED: ZEROING IN ON THE TECHNOLOGY SECTOR'S PERSPECTIVE, IT IS INTERESTING TO LOOK AT WHERE THOSE GAINS WERE.
THEY WERE NOT IN THE TECHNOLOGY SECTOR. IT SEEMS LIKE A LOT OF PUBLIC SECTOR JOBS LIKE EDUCATION, HEALTH SERVICES, GOVERNMENT, AND TO SOME EXTENT LEISURE AND HOSPITALITY. CORY: I THINK THAT THE TECH STORY IS A BIG PART OF THE STORY IN THE LABOR MARKET, ESPECIALLY AS WE LOOK BACK TO THE PANDEMIC BASELINE.
WHAT WE SAW AS THE PANDEMIC HIT WAS A LOT OF JOB POSTINGS FELL TOGETHER ACROSS ALL SECTORS. THEN WE STARTED TO SEE THOUGH SECTORS COME UP TOGETHER. 2023 SHOWED US A YEAR OF DIVERGENCE WHERE WE STARTED TO SEE MORE STRENGTH IN THESE IN-PERSON TYPE OF SECTORS. HEALTH CARE HAS BEEN THE PERENNIAL POWERHOUSE IN TERMS OF ADDING JOBS.
WE SAW SOME WEAKENING DEMAND IN TECH AND SOME OTHER AREAS. ULTIMATELY, THE TECH STORY IS THAT TECH HAS TAKEN A LITTLE MORE OF A BRUNT IN TERMS OF A DROP IN JOB POSTINGS OVER THE LAST YEAR. REALLY, THAT HAS BEEN PART OF THE LARGER CONVERGENCE. WE ARE ADDING JOBS OVER THE TOP LEVEL ONCE WE ROLL IT UP, BUT WHEN YOU LOOK UNDER THE HOOD YOU CAN SEE DIFFERENCES BEGINNING TO EMERGE BETWEEN DIFFERENT SECTORS. CAROLINE: WHAT IS INTERESTING IS THERE IS
DIVERGENCE WITHIN THE TECH SPACE TOO. I'M SURE THAT ANYTHING WITH AN AI NAME HAS BEEN HIRING PRETTY WELL, AND OTHER AREAS ARE MORE BLEAK. START THERE RATHER THAN HOW AI IS AFFECTING THE REST OF THE LABOR MARKET, SHOW HOW IT IS AFFECTING TECH JOBS. CORY: ULTIMATELY, WE HAVE SEEN A PRETTY DRAMATIC INCREASE IN THE NUMBER OF JOB POSTINGS ASKING FOR THESE TYPES OF GENERATIVE AI-TYPE SKILLS. THE CHATGPTS, THE GENERATIVE AI SKILLS. OBVIOUSLY, AI IN A BROADER SENSE OF SELF DRIVING CARS AND THOSE TECHNOLOGIES HAVE BEEN SOMETHING WE HAVE DISCUSSED FOR THE PAST COUPLE OF YEARS, BUT WHAT IS INTERESTING TO NOTE IS IN A TREND OF GENERATIVE AI IN PARTICULAR, LAST YEAR THERE WERE NO JOBS TALKING ABOUT THESE TECHNOLOGIES.
WHAT WE HAVE SEEN IN THE LAST YEAR IS A DRAMATIC INCREASE. IF YOU LOOK AT THE GRAPH FOR JOB POSTINGS WITH GENERATIVE AI SKILLS BEING ASKED FOR BY EMPLOYERS, IT IS BASICALLY A HOCKEY STICK. IT IS ZERO LAST YEAR AND THIS IS THE FIRST TIME WE ARE SHARING THE STATED WITH THE NEWEST DATA FROM DECEMBER. AT THE END OF DECEMBER, THERE WAS .085% OF JOBS MENTIONING AI. OVERALL, STILL A SMALL PORTION, BUT WHEN YOU THINK ABOUT WHAT IT MEANS TO GO FROM ZERO TO 1/10 OF A PERCENT IN A YEAR, THAT IS SHOWING MOMENTUM FOR THESE TYPES OF JOBS. ED: THE OTHER THING IN THE DOMAIN OF TECHNOLOGY THAT I HAVE BEEN THINKING ABOUT IS PARTICIPATION IN THE ECONOMY. PARTICULARLY, THE AGE OF
WORKERS. I THINK BACK TO WHEN WE TALKED ABOUT THE UNION EFFORTS WITH REGARDS TO THE AUTOMAKERS AND EV. THE CONCERN DOWN THE LINE IS THERE IS A WHOLE GENERATION OF WORKFORCE THAT WILL RETIRE IN THE COMING YEARS. AND THERE ARE PEOPLE ON THE SIDELINES, WHAT YOU WOULD CALL PRIME AGE WORKERS? CORY: THAT'S A GREAT POINT. THAT IS ONE OF THE KEY POINTS THAT WE SAW THIS MORNING IN A JOBS REPORT. YES, IT WAS A JOBS REPORT WHERE
THE NUMBER OF JOBS THAT WE ADDED SURPASSED A LOT OF EXPECTATIONS, WHICH WAS A FITFUL WRAP UP OF 2023. I THINK WHAT WAS DIFFERENT FROM WHAT WE SAW IN 2023 IS IN THE LAST COUPLE OF MONTHS WE HAVE SEEN THE LABOR FORCE PARTICIPATION RATE, ESPECIALLY AMONG PRIME AGE WORKERS, DROP OFF. YOU TALK ABOUT THE DEMOGRAPHIC HEADWINDS. AS WE HAVE FEWER WORKERS AGING IN AND MANY MORE WORKERS AGING OUT, THE U.S.
IS FACING AN UPHILL BATTLE IN TERMS OF MAKING SURE THAT THE LABOR SUPPLY IS THERE. HAVING THE JOBS AND HAVING JOB OPENINGS IS ONE THING, BUT FINDING THE PEOPLE TO FILL THE JOBS IS A VITAL PART OF ACTUALLY MAKING SURE THAT THE ECONOMY AND LABOR MARKET CONTINUES TO BE ROBUST. ED: TERRIFIC DATA ABOUT THE TECHNOLOGY SECTOR AND JOBS. LET'S KEEP THE CONVERSATION GOING.
DOES THE LABOR MARKET SHOW SOME SIGNS OF COOLING? HOW IS AI BEING IMPLEMENTED, PARTICULARLY IN THE FINANCIAL SERVICES INDUSTRY, TO HELP CONSUMERS AND WORKERS BUILD A SAFETY NET? JOINING US IS THE FOUNDER AND CEO OF FINANCIAL FINESSE WHICH OFFERS PERSONALIZED FINANCIAL COACHING LIVE AND AI-POWER TO MILLIONS OF EMPLOYEES. THE JOBS DATA GIVES US AN OPPORTUNITY TO ASK ABOUT, WHAT IS REALLY HAPPENING RIGHT NOW IN THE WAY THAT AI IS IMPACTING OUR DAILY TASKS AND HIRING? I ASKED IN THE FIRST INSTANCE TO GIVE US A READER WHERE YOU THINK THAT IS. -- GIVE US A READ OF WHERE YOU THINK THAT IS. >> IT IS INTERESTING THE HIRING NUMBERS THAT WERE ARTICULATED. WE ARE SEEING A LOT OF TALK IN THE FINANCIAL SERVICES INDUSTRY ABOUT AI AND THINGS THAT WILL BE HAPPENING IN THE FUTURE. IT'S STILL VERY EARLY AND THERE ARE A LOT OF CONCERNS ABOUT COMPLIANCE.
HOW DO YOU MAKE THE SAFE FIRKIN -- SAFE FOR CONSUMERS? WE KNOW THE AI CAN BE PROBLEMATIC. WE WORK IN THE FINANCIAL COACHING INDUSTRY, PROVIDING FINANCIAL COACHING AS AN EMPLOYEE BENEFIT, AND HAVE MANAGED TO LEVERAGE AI USING ONLY VETTED CONTENT FROM NON--STAFF CERTIFIED FINANCIAL PLANNERS SO THAT ANY QUESTIONS -- FROM ON-STAFF CERTIFIED FINANCIAL PLANNERS COME SO THAT ANY QUESTIONS ALL POINTS TO OUR CONTENT AND IT IS SAFE AND CONTAINED. I THINK THAT THAT IS REALLY ONE OF THE BIGGEST HURDLES THAT FINANCIAL SERVICES COMPANIES NEED TO GET THROUGH. HOW DO YOU LEVERAGE THIS POWERFUL TOOL BUT MAKE SURE IT'S SAFE? CAROLINE: HOW DO YOU ENSURE THAT YOU ARE BUILDING YOURSELF SECURITY, FINANCIAL INDEPENDENCE, PARTICULARLY WHEN YOU SEE THE JOBS MARKET SOFTEN A LITTLE BIT BUT YOU HAVE MANAGED TO SECURE A BIT OF A WAGE INCREASE AND YOU WANT TO MAKE SURE THAT YOU'VE GOT YOUR UNDER ALL, OVERALL SAFETY NET LINED UP? YOU USE THE ARTIFICIAL INTELLIGENCE MOTIVATING EMPLOYEES EVERYWHERE. TALK TO US ABOUT HOW AI HAS REDUCED THE AMOUNT OF FINANCIAL ADVISORS THAT ONE NEEDS TO GET THE RIGHT INFORMATION AT THE RIGHT TIME. HOW ARE EMPLOYEES ENGAGING WITH
THIS? MORE NOW THAN EVER BECAUSE THEY FEEL LESS SECURE THAN LAST YEAR? LIZ: ABSOLUTELY. THE GREAT THING ABOUT AI IS THAT IT ALLOWS WHAT WE CALL MASS PERSONALIZATION. YOU CAN REACH AN INCREDIBLY LARGE NUMBER OF PEOPLE IN AN INCREDIBLY PERSONALIZED WAY. WE SAY THAT PEOPLE'S FAVORITE FINANCIAL TOPIC IS THEMSELVES. IT IS NOT ASSET ALLOCATION,
STOCK OPTIONS, IT'S THEMSELVES, THEIR FAMILIES, AND THEIR FINANCIAL SECURITY. HAVING THE ABILITY TO HAVE A VIRTUAL FINANCIAL COACH TO WALK YOU THROUGH THESE THINGS, WHO YOU CAN ASK QUESTIONS TO, AND GET VETTED ANSWERS THAT YOU ARE FULLY CONFIDENT ARE IN YOUR BEST INTEREST, FREE OF ANY CONFLICTS OF INTEREST, IS TREMENDOUS. THE INTERESTING QUESTION IS, HOW DOES THIS WORK WITH AN ADVISOR? I WOULD SAY IN OUR MODEL, WE HAVE SEEN THAT BOTH LEVERAGE EACH OTHER. OUR FINANCIAL COACH TRAINED AI, BUT THE AI IS HELPING THEM BECOME BETTER FINANCIAL COACHES IN TERMS OF UNDERSTANDING MASS TRENDS, AGGREGATED TRENDS, BUT ALSO INDIVIDUALS' PROFILES. WE BECOME MORE EFFICIENT, ABLE TO HELP MORE PEOPLE.
AI HAS AN EXPONENTIAL POWER THAT IS TREMENDOUS. FOR CONTEXT, LAST YEAR WE HAD 1.6 MILLION INTERACTIONS. SORRY, 2022, ONE POINT 6 MILLION INTERACTIONS. 2023, 8.3 MILLION INTERACTIONS.
THERE WAS SUCH AN INCREDIBLE SNOWBALL EFFECT WHEN YOU USE THIS RIGHT ESPECIALLY IN TANDEM WITH FINANCIAL ADVISORS. CAROLINE: THE NFL PLAYERS ASSOCIATION, SOME THAT YOU SERVICE. THANK YOU. WE WANT TO TURN ATTENTION TO ANOTHER STORY THAT WE ARE FOLLOWING. TESLA WILL DEPLOY AN OVER THE
AIR SOFTWARE FIX TO 1.6 MILLION VEHICLES IN CHINA, VIRTUALLY EVERY CAR THAT IT EVER SOLD THERE, AMID RISKS WITH THE AUTOPILOT FUNCTION. IT MIRRORS THE RECALL OF 2 MILLION VEHICLES IN THE U.S. LAST MONTH. ED: STICKING WITH TESLA IN CHINA, THE ELECTRIC VEHICLE MAKER HAS BEEN OVERTAKEN BY CHINA'S BYD AS THE TOP-SELLING ELECTRIC CAR MAKER.
>> IT LIKES TO DESCRIBE ITSELF AS -- >> THE BIGGEST CAR BRAND YOU'VE NEVER HEARD OF. >> NOW CHINA'S BYD HAS OVERTAKEN TESLA AS THE LARGEST SELLER OF ELECTRIC VEHICLES. THE SUCCESS IS THE FRUIT OF LONG-TERM STRATEGIC THINKING ON THE PART OF BYD AND THE CHINESE GOVERNMENT. WE HAVE ARGUABLY NEVER SEEN ANYTHING LIKE THIS IN TERMS OF THE AMOUNT OF SUPPORT THAT CHINA HAS EXTENDED TO AUTOMAKERS SPECIFICALLY PERTAINING TO EV'S. MOST OF BYD'S CARS ARE A LOT CHEAPER THAN TESLAS.
>> THEY HAVE VERY CHEAP MODELS STARTING FROM 10,000 U.S. DOLLARS. THE MOST IMPORTANT FACTOR IS BYD IS THE ONLY AUTOMAKER THAT PRODUCES ALL OF ITS BATTERIES IN HOUSE.
>> MAKING ITS OWN BATTERIES AND OTHER COMPONENTS HELP IT REDUCE A LOT OF COST, SETTING CHINA UP TO BE THE DOMINANT GLOBAL PLAYER IN THE TRANSPORTATION OF THE FUTURE. ELECTRIC VEHICLES, A BUSINESS THAT COULD BE WORTH $8.8 TRILLION BY THE END OF THE DECADE. ED: HIGHLY RECOMMEND CHECKING OUT THE FULL DOC. EIGHT MINUTES PACKED WITH DATA.
COMING UP, THE TEARDOWN OF HUAWEI'S NEWEST LAPTOP SHOWS THAT IT'S POWERED BY A CHIP THAT'S MADE IN TAIWAN. TALKS OF ANOTHER -- SQUASHING TALKS OF ANOTHER MAINLAND CHINESE TECHNOLOGICAL BREAKTHROUGH. THIS IS BLOOMBERG. CAROLINE: IT IS A NEW TEARDOWN VIDEO BY TECH INSIGHTS WITH FINDINGS SHOWING THAT WILL ALWAYS LATEST LAPTOP IS RUN ON A CHIP MADE BY TAIWAN SEMICONDUCTOR THROWING COLD WATER ON ALL OF THE TALK THAT WAS HAPPENING ABOUT ANOTHER BIG CHINESE ADVANCE IN TECHNOLOGY AMID THE U.S.-CHINA TECH WAR. WE WILL BREAK IT DOWN WITH YOU
FOR A MOMENT. THIS WAS COMMISSIONED BY BLOOMBERG TO DO THE TEARDOWN BECAUSE THEY WERE SUDDENLY TALK THAT MAYBE EVEN A MORE ADVANCED CHIP THAN HAD BEEN THOUGHT WAS IN THE LAPTOP, BUT NOT THE CASE. ED: TECH INSIGHTS IS THE SAME FIRM THAT BLOOMBERG NEWS PARTNERED WITH ON THE TEARDOWN OF THE WALL WAY SMARTPHONE OF THE WALL WAY SMARTPHONE. IF THEY HAD FOUND THE FIVE NANOMETER PROCESSOR IN THE LAPTOP WAS MADE BY CHINA'S MAINLAND DOMESTIC CHIP FAB BECAUSE IT WOULD DEMONSTRATE TECHNOLOGICAL PROGRESS. IT WAS MADE BY TSMC, A FIVE NANOMETER NODE MADE TO MAKE THE PROCESSOR. THAT GENERATION WAS MADE IN
2020. IT'S NOT EVEN THE CUTTING EDGE AND IT WASN'T MADE IN CHINA. CAROLINE: WHAT DOES IT SHOW ABOUT WHAT HUAWEI HAS BEEN UP TO SINCE 2020. 2020 WAS WHEN TSMC WAS NO LONGER ALLOWED TO SELL. WERE THEY STOCKPILING TO GET THE CHIP? ED: THERE WAS EVIDENCE THAT THEY WERE STOCKPILING CHIPS THAT AT THE TIME OR CUTTING EDGE AND ARE NOW NOT. THE LATEST GENERATION OF NODE IS THREE NANOMETERS USED BY TSMC AND PREVALENT IN MANY CONSUMER ELECTRONICS, LIKE THOSE MADE BY APPLE.
WHAT WE FOUND IN THE TEARDOWN OF THE HUAWEI LAPTOP WAS A FIVE NANOMETER PRODUCED PROCESSOR CARRYING 906 C. TWO GENERATIONS REMOVED FROM THE LATEST BUT ONE GENERATION AHEAD OF WHAT WE THOUGHT CHINA HAD ACCESS TO, EVEN THOUGH IT IS STILL DATED. CAROLINE: THESE TEARDOWN'S ARE SO USEFUL. ED: THE THING ABOUT IT AS WELL IS THAT YOU LIFT THE LID, YOU GET THE ANALYSIS FROM THE EXPERTS, YOU ANSWER QUESTIONS ABOUT WHERE WE ARE IN THE TECH WAR SUPPLY CHAIN. CAROLINE: THE SHARE PRICES OF SOME OF THOSE TRADED IN CHINA, THE ANTICIPATION HAD PERHAPS RUN UP AND PULLED BACK A LITTLE BIT. ED: A LOT MORE TO TALK ABOUT ON THE SHOW. VC FIRM CLOSING ITS LONDON OFFICE. MORE ON THAT NEXT.
THIS IS YOUR FRIDAY TRADING ON MAJOR INDICES. WIN THE JOBS DATA HIT, THERE WAS A KNEE-JERK ON THIS IDEA THAT THE FED WILL CUT RATES TO A LOWER EXTENT IN 2024 THEN WE BELIEVED YESTERDAY. NOW THE FEDS HAVE TAKEN A FRIDAY NAP AND WE ARE STICKING WITH THE IDEA THAT MARCH IS ON THE TABLE. TO WHAT EXTENT? WHO KNOWS. THIS IS BLOOMBERG TECHNOLOGY. CAROLINE: THE TIME NOW FOR TALKING TECH.
FOXCONN WARNED OF ITS FOURTH SECOND DECLINE IN QUARTERLY SALES. NOW, SALES ARE FALLING IN THE CURRENT PERIOD AS WELL. ALL OF THAT CONCERN ABOUT SLOWING DEMAND, THE LATEST IPHONE.
AS TWITCH TRIES TO TAKE ON TIKTOK, THE NEW DISCOVERY FEED FOR SHORT VIDEOS IS RAISING CONCERNS FOR KIDS' SAFETY. ANALYSIS OF NEARLY 1100 CLIPS ON TWITCH FOUND 83 OF THE SHORT VIDEOS CONTAINED SEXUALIZED CONTENT INVOLVING CHILDREN. ONCE BLOOMBERG ALLEGED THE COMPANY, WHICH REMOVED THE CONTENT. AMERICAN TOWER, A DEAL WORTH $2.5 BILLION IN THE U.S. NETWORKING COMPANY. THE DEAL IS EXPECTED TO CLOSE IN THE SECOND HALF OF THE YEAR ACCORDING TO THE COMPANY. ED:
ANOTHER STORY WE ARE TRACKING IN THE WORLD THE VC. COATUE CLOSING ITS OFFICE IN LONDON TWO YEARS AFTER THEY OPENED AS PART OF A WIDER STRATEGY OVERALL TO ADJUST TO A DOWNTURN IN THE TECHNOLOGY MARKET. LET'S BRING IN MARK BERGEN IN LONDON. THE STATED REASON IS STREAMLINING THE INVESTMENT IN EUROPE, BUT WHAT ELSE DO WE KNOW ABOUT WHAT WAS A SHORT-LIVED STAY IN LONDON? MARK: A COUPLE OF FACTORS. ONE IS UNIQUE TO THE FUND. THEY HAVE BEEN GOING THROUGH THIS BIG ADJUSTMENT AND THEY HAVE LOST A MANAGING PARTNER LAST MONTH.
THEY HAD A RATE DOWN OF 30% THAT WE REPORTED IN NOVEMBER ON THEIR PORTFOLIO. I THINK THIS IS SOMETHING THAT A LOT OF FIRMS ARE DOING. THEY HAVE RAISED A NEW FUND WITH THIS DISCOUNT, THIS RARE, UNUSUAL MOVE THEY ARE LETTING THE INVESTORS GET INTO STARTUPS AT A DISCOUNTED RATE IN EXCHANGE FOR CUTTING SOME FEES. THERE MAKING DIFFERENT, STRATEGIC CHANGES. THERE IS A BIGGER TREND. THIS IS NOT THE FIRST VC FIRM IN THE LAST SIX MONTHS THE PULLOUT. THE CANADIAN PENSION FUND LEFT EUROPE. WE REPORTED THAT THIS SUMMER.
THERE IS NOT A LOT OF DEAL ACTIVITY IN ANYTHING BUT THE EARLY STAGE. THE LATER STAGE START OF GROWTH HAS BEEN PRETTY QUIET HERE, SO MAYBE THEY ARE READING THE TEA LEAVES GOING FORWARD. CAROLINE: WHY HAS IVP JUST SET UP SHOP IN LONDON? WHAT ARE THEY SEEING THAT PERHAPS COATUE ISN'T? MARK: GOOD QUESTION. AND REASON CAME HERE, AT LEAST
THEY ANNOUNCED IT AS, FOCUSED ON CRYPTO. WE REPORTED EARLIER THAT THEY CAME IN WITH THE FRENCH COMPANY. COATUE SAYS THE SAME THING, THAT THEY WILL CONTINUE TO INVEST IN EUROPE OUT OF CALIFORNIA AND NEW YORK. I THINK THE DIFFERENT FUNDS HAVE A DIFFERENT APPROACH ABOUT WHETHER OR NOT IT IS WORTHWHILE TO HAVE PEOPLE ON THE GROUND WHERE THEY CAN MEET THE STARTUPS IN PARIS, SCANDINAVIA, EASTERN EUROPE. THE UI PATH, WHICH WAS A COATUE INVESTMENT, PEOPLE TALK ABOUT THE VALUE OF BEING ON THE GROUND. SOME FIRMS AND MAY BE THE LPS THINK IT IS WORTHWHILE NOT TO BE.
CAROLINE: THEY WERE AN EARLY BACKER IN SPOTIFY. WE WILL SEE HOW MUCH THEY CAN GET IN ON SOME OF THESE EUROPEAN STARTUPS EVEN THOUGH IT IS A TOUGHER TIME FOR CROSSOVER FUNDS IN PARTICULAR. BRILLIANT. WE THANK YOU FOR THE LIVE COMINGS AND GOINGS OF VC IN EUROPE. INVESTORS EAGERLY AWAITING THE DECISION ON SPOT ETF. COULD IT COME BY JANUARY 10? WE WILL BE JOINED BY CATHERINE DOWLING FOR HER TAKE ON THE PROBABILITIES AND WHAT IT MEANS FOR CRYPTO IN GENERAL.
THIS IS BLOOMBERG TECHNOLOGY. CAROLINE: WELCOME BACK. I'M CAROLINE HYDE IN NEW YORK. ED: I AM ED LUDLOW IN SAN FRANCISCO. NON-FUND PAYROLLS, 216 THOUSAND, HOTTER THAN EXPECTED. THERE WAS A KNEE-JERK REACTION, PARTICULARLY IN THE BOND MARKET, THAT YIELDS EDGING LOWER.IN THE EQUITY MARKETS, WE ARE MODERATELY HIGHER IN ALL INDEXES.
THE STORY INITIALLY WAS, LET'S LOWER OUR EXPECTATIONS, EVEN BY 10 BASIS POINTS, TO THE EXTENT THAT THE FED WILL CUT RATES IN 2024. WE CARE ABOUT THAT BECAUSE HIGHER RATES DISCOUNT THE PRESENT VALUE OF FUTURE CASH FLOWS AND THAT HITS HIGH MULTIPLE TECH STOCKS. BUT TRADERS SEEM TO BE STANDING BY THE IDEA THAT MARCH IS ALIVE FOR THE FED MEETING TO CUT RATES. THE OTHER ASSET CLASS WE ARE WATCHING IS BITCOIN. I FEEL LIKE CAPTAIN'S LOG, STAR DATE, JANUARY 5, JANUARY 2024, WATCHING FOR THE SAME THING. IF YOU'RE OUT THERE, WE ARE WAITING FOR APPROVAL FOR BITCOIN SPOT ETF.
THE TRADING OF THE WEEK HAS BEEN INTERESTING, SOME DRIVEN BY RUMOR AND SPECULATION. ALL IN ALL, WE ARE OF MODERATELY HIGH 2% OF THE WEEK, SHILOH 44,000 U.S. DOLLARS PER TOKEN -- SHY OF $44,000 PER TOKEN. CAROLINE: KATHERINE DOWLING, YOU ARE GAUGING INTO THE SEC STARS AS WELL. IT IS IMPORTANT TO WHETHER OR NOT WE GET THE YAY OR NAY BY JANUARY 10. ARE YOU MORE STACKED TOWARDS A YES? KATHERINE: MY PREDICTION WAS MID-JANUARY AND I HAVEN'T CHANGED ON THAT. IF YOU LOOK AT WHAT IS
HAPPENING IN THE PUBLIC, YES, THERE IS A LOT OF FAKE NEWS AND FAKE BUMPS, BUT THE ACTUAL DOCUMENTS BEING FILED, YOU SEE THERE ARE FEWER BLANKS IN THOSE DOCUMENTS. YOU CAN LOOK AT THOSE DOCUMENTS AND SEE WHAT THE BASICS OF THE CONVERSATIONS ARE LOOKING LIKE WITH THE SEC. THE SEC IS WORKING HARD, WORKING BEHIND THE SCENES AND OVER THE HOLIDAYS TO MAKE SURE WHAT IS KNOWN AS THE S1 SIDE OF THE HOUSE, THE DISCLOSURE DOCUMENT, HAS THE INVESTOR PROTECTIONS AND DISCLOSURES. THEY HAVE BEEN PUSHING ON
ISSUERS TO MAKE SURE THAT ALL OF THE INFORMATION IS SET FORTH IN THE DOCUMENT. THAT IT'S VERY CLEAR. ON THE OTHER CITED THE HOUSE WE HAVE THE EXCHANGE DOCUMENT -- OTHER SIDE OF THE HOUSE, WE HAVE THE EXCHANGE DOCUMENT. YOU WILL SEE THE INFORMATION BEING MATCHED UP.
YOU CAN SEE THAT PROGRESSION IN THE PUBLIC RECORD AS ISSUERS WORK TO WORK ON BOTH SIDES OF THE DOCUMENT AND THE SEC WORKS TO COMMUNICATE WITH THE VARIOUS ISSUERS BEHIND THE SCENES. ALL OF THIS IS GOING TO BE A HUGE WHEN HE WENT FOR INVESTORS WHEN IT COMES OUT THE GATES. CAROLINE: WHAT IS THE UPSIDE? WHAT SORT OF FUND FLOWS DO YOU ANTICIPATE? WE HAVE A GENERAL ANTICIPATION OF ONE BILLION TO 2 BILLION ON THE FIRST WEEK IT'S ABLE TO BE TRADED. DO YOU ABIDE BY THAT LEVEL OF INCREASE AND INTEREST FROM INSTITUTIONS AND RETAIL THAT FIRST WEEK? KATHERINE: YES.
WE EXPECT A BIG UPTAKE OUT OF THE GATES. PART OF THAT IS WE LOOK AT THE HISTORY OF GOLD ETF'S, THE BITCOIN FUTURE ETF'S. WE DO HAVE HISTORIC ISSUES TO LOOK AT TO SEE WHAT WE CAN EXPECT. ALSO, WITH THIS ISSUANCE, THE EXPECTATION, IF ALL GOES AS WE BELIEVE IT SHOULD BE GOING, WILL HAVE A NUMBER OF ISSUERS COME OUT OF THE GATES AT THE SAME TIME.
SO, YOU WILL HAVE A NUMBER OF OPTIONS FOR INVESTORS. FROM A DEMAND STANDPOINT, BIT WISE HAS PUT OUT OUR RESEARCH SURVEY WITH FINANCIAL ADVISORS. A NUMBER OF ADVISORS HAVE BEEN WAITING FOR THIS MOMENT TO GET INTO BITCOIN FOR THEIR CLIENTS, BECAUSE IT IS A MUCH EASIER MORE TRANSPARENT WAY FOR THEM TO PROVIDE BITCOIN EXPOSURE TO THEIR CLIENTS. ED: AS CAROLINE POINTED OUT, BIT WISE ASSET MANAGEMENT IS AN APPLICANT. YOU APPLIED FOR AN ETF.
I AM INTERESTED IN YOUR ROLE AS GENERAL COUNSELOR AND CHIEF COMPLIANCE OFFICER IN WHAT YOU ARE DOING EVERY DAY. YOU SAY THAT YOU STUCK BY THE MID-JANUARY CALL BUT THERE IS ONLY ONE PARTY WHO KNOWS, THE SEC. KATHERINE: YES. THE SEC IS THE ZEUS IN THIS OPERATION.
WHAT WE CAN SEE IS LOOKING AT HISTORY THAT THE SEC DOES NOT WANT HUNGER GAMES. THEY WANT WHAT IS BEST FOR THE INVESTOR, A NUMBER OF ISSUERS COMING OUT. YOU CAN SEE FROM THE PUBLIC RECORD THAT THEY ARE SPEAKING WITH ALL OF US. WHAT WE DO OR WHAT I DO IN MY ROLE IS WE ARE ANSWERING THEIR QUESTIONS. WE ARE WORKING WITH THEM. THEY HAVE BEEN VERY DEDICATED TO MAKING SURE THAT, ONE, IF YOU GO BACK IN TIME, FIRST, IT STARTED AS AN ACADEMIC CONVERSATION, IVORY TOWER, WHAT IS THIS PRODUCT AND HOW DOES IT WORK? THEN WE MOVED INTO HIGHER INTENSITY OF LET'S LOOK AT THE NUTS AND BOLTS. HOW DOES THIS REALLY WORK? WHO IS HOLDING THE BITCOIN? WHERE IS THE RISK? WHO ARE THE DIFFERENT PLAYERS? YOU ARE SEEING IN THE PUBLIC RECORD OF LET'S LIST THE APS. LET'S GET THE PARTIES THAT WILL
BE ENGAGING IN THIS PROCESS SO THAT THERE IS AN UNDERSTANDING AND WE CAN HAVE A FULSOME DISCLOSURE ABOUT HOW THIS PRODUCT WORKS. YOU SAW THAT PROGRESSION WITH THE SEC ENGAGING ON UNDERSTANDING HOW THIS PRODUCT WORKS. I THINK THEY HAVE BEEN PRETTY DEDICATED TO MAKING SURE THAT THEY UNDERSTAND, BECAUSE THEY HAVE TO FIRST UNDERSTAND TO MAKE SURE THAT THE CORRECT DISCLOSURES ARE IN THE PERSPECTIVES. THAT IS BEHIND THE SCENES, BUT YOU CAN SEE THAT REFLECTED IN THE AMENDED AS ONES THAT EVERYONE IS FOLLOWING, THE FEWER BLANKS. YOU CAN SEE THE ADDITIONAL
DISCLOSURES THAT ARE BEING ADDED AS THE PROCESS GOES FORWARD AND PROGRESSES. ED: A VERY SIMPLE QUESTION IN THE 30 SECONDS WE'VE GOT. IS THE SEC AND UNITED STATES A GOOD REGULATOR? A COMPETENT REGULATOR FOR THIS FIELD? KATHERINE: THEY ARE, ABSOLUTELY. I KNOW THAT WE'VE HAD A LOT OF DIALOGUE ABOUT OTHER COUNTRIES THAT HAVE GOTTEN THIS PRODUCT OUT IN ADVANCE.
IN OUR COUNTRY, WE HAVE A NUMBER OF REGULATORS LOOKING AT WHAT THEY SHOULD BE LOOKING AT. HAS THIS PROGRESSED MORE SLOWLY THAN MANY OF US WOULD HAVE LIKED? YES. BUT AT THE END OF THE DAY WE WILL GET A PRODUCT THAT IS BETTER FOR INVESTORS, IT WILL HAVE THE INFORMATION, AND THEY WILL HAVE A MORE FULSOME UNDERSTANDING OF HOW THE PRODUCT WORKS. THAT WILL MAKE EVERYONE ABLE TO MAKE A BETTER DECISION IF THEY WANT TO INCLUDE THIS IS ONE OF THEIR INVESTMENTS. ED: THANK YOU FOR YOUR TIME ON THE SHOW.
COMING UP, WE WILL BE JOINED BY GREG MARTIN FROM RAINMAKER SECURITIES. THE DEMAND FOR PRIVATE STOCKS IN 2024 IS NEXT. THIS IS "BLOOMBERG TECHNOLOGY." ED: OPENAI IS DUE TO COMPLETE ITS TENDER OFFER, THEY'RE TALKING ABOUT DOZENS OF PUBLISHERS TO LICENSE DEALS FOR THEIR ARTICLES TO TRAIN ITS ARTIFICIAL INTELLIGENCE MODELS. WE HAVE BEEN READING A LOT ABOUT THIS IN THE PRESS OVER WEEKS AND MONTHS, THE VALUE OF DATA, WHO THEY ARE TALKING TO AND WHO THEY ARE NOT. WHAT DO WE KNOW? >> THEY ARE SPEAKING TO DOZENS OF PUBLISHERS ABOUT SIGNIFICANT DEALS. THIS WOULD BE BOTH TO PAY FOR THE PUBLISHERS TO GET DATA THAT WILL HELP OPEN IN TRAIN ITS MODELS AS WELL AS TO MORE PROMINENTLY DISPLAY THE ARTICLES THEMSELVES AND THE OUTPUT OF WHAT CHATGPT TELLS YOU. CAROLINE: WHILE THEY ARE TRYING TO
NAVIGATE POTENTIAL, FUTURE, CASES, BEING SUED BY THE NEW YORK TIMES AND OTHER PUBLISHERS GETTING ON BOARD, THIS INDICATES THE BUSINESS MODEL IS AT A TIME WHEN WE KNOW THE COMPANY IS PERHAPS LOOKING FOR NEW FUNDING BUT COMPLETING ON A TENDER OFFICER FOR LIQUIDITY TO THE EMPLOYEE BASE. HOW IS THE TENDER OFFER LOOKING? >> AS FAR AS WE KNOW, THE TENDER OFFER IS STILL ON, SET TO CLOSE TODAY. THAT WAS BASICALLY AN OFFER THAT ALLOWS EMPLOYEES TO SELL THEIR SHARES TO INVESTORS, OFFERING EMPLOYEES A CHANCE TO LIQUIDATE THE ASSETS THEY HAVE IN OPENAI. IT WAS SET FOR $86 BILLION. IT WAS EXTENDED A LITTLE BIT IN THE CHAOS THAT ENSUED DURING THE BOARD OUSTER. THIS IS AN EXTENDED DEADLINE OF A MONTH. ED: I HAVE HEARD THE MONEY HAS BEEN
WIRED. WHAT NEEDS TO HAPPEN NOW IS OPENAI DOES A TRANSFER OF OWNERSHIP OF THE SHARES AND ISSUES NEW SHARE CERTIFICATES. IT SEEMS LIKE IT IS BUTTONED UP. AS WE REPORTED BEFORE THE HOLIDAYS, A PRIMARY STRAIGHT AWAY WITH A MORE THAN 100 BILLION DOLLAR VALUATION, COME ON. WE ALL NEED A BREAK AT SOME POINT. CAROLINE: INTERESTING AS TO IF YOU HAVE BEEN SELLING OUT. A SLIGHTLY LOWER VALUATION YOU WILL SEE ON CURRENT SHAREHOLDING.
FASCINATING, ONGOING, CONTINUING CONVERSATION YOU HAVE BEEN LEADING. THANK YOU TO TAKE US THROUGH WHAT IS HAPPENING IN THE MIDST OF A TENDER OFFER AND NEW PRIMARY RAISE. LET'S CONTINUE THE SECONDARY MARKET ACTIVITY.
MIDMARKET INVESTMENT BROKERED A DEAL SPECIALIZING IN PRE-IPO INVESTING. ED TOLD US ABOUT THE STATE OF PLAY WITH THE TENDER OFFER AND OPENAI MAY RAISE NEW FUNDS. TELL US ABOUT THE EXTENT OF DEMAND TO GET INTO THE COMPANY DESPITE SOME INTERNAL TURMOIL. GREG: IT IS GREAT TO SEE YOU AND THANK YOU FOR HAVING ME. OPENAI HAS BEEN ONE OF THE HOTTEST COMPANIES IN THE LAST YEAR. THE PREVIOUS TENDER WAS $28 BILLION AND NOW IT IS THREE X THAT AND IT MAY BE GOING UP MORE IN A PRIMARY ROUND. WE HAVE SEEN ALMOST UNLIMITED
DEMAND FOR OPENAI THIS YEAR. IT IS A PRETTY NEW PHENOMENON. THE COMPANY JUST RELEASED CHATGPT IN NOVEMBER OF 2022. REVENUES HAVE GONE FROM ZERO TO 1,000,000,006 RUN RATE. THEY MAY FINISH 2024 CLOSER TO 5 BILLION. THE GROWTH IS IMMENSE AND THE DEMAND FOR STOCK IN OPENAI IS IMMENSE. WE ARE SEEING A TON OF TRADING
AND INTEREST ON OUR PLATFORM TODAY. I THINK THAT IS WHY YOU ARE SEEING THE VALUATION CONTINUE TO GO UP, EVEN A MONTH AFTER A TENDER IS SUPPOSED TO CLOSE. ED: IT IS THE TRADING THAT I AM INTERESTED IN. THE TENDER IS A TRANSACTION. MY UNDERSTANDING IS IT IS VERY HARD TO GET IN ON THAT TENDER. WHAT STRUCK ME IN THE DAYS PRIOR TO SAM ALTMAN INITIALLY BEING DISMISSED BY THE BOARD WAS HOW LIQUID THE MARKET WAS, THE SECONDARIES MARKET, FOR OPENAI SHARES. I WONDER IF YOU CAN EXPLAIN HOW
THAT WORKS? GREG: TO BE CLEAR, THE WEEK THAT SAM ALTMAN DECIDED TO LEAVE AND COME BACK AGAIN WAS DEFINITELY A NEAR-TERM WET BLANKET. ED: I DON'T KNOW THAT HE DECIDED TO LEAVE, GREG. I THINK THAT HE WAS FIRED, BUT PLEASE, KEEP GOING. GREG: IT WAS A WET BLANKET FOR A MOMENT IN TIME. THERE WERE A LOT OF WORRIED INVESTORS PRESENTING A LOT OF THAT HAS BEEN SOLIDIFIED. THERE IS A FEELING OF STABILITY THAT THE TEAM IS BACK IN PLACE. AS I SAID, ACTUALLY
CONSUMMATING A TRADE IS CHALLENGING. THERE ARE A LOT OF BIDS, PEOPLE WHO WANT TO BE OWNERS OF OPENAI. IT IS 40% OWNED BY MICROSOFT WITH A CORPORATE STRUCTURE WITH THE COMBINATION OF A NOT-FOR-PROFIT. PEOPLE ARE SETTING UP ENTITIES, SPECIAL PURPOSE VEHICLES, ETC. BY WHICH THEY HOLD SHARES AND ARE SOMETIMES SELLING UNITS IN THOSE SPECIAL PURPOSE VEHICLES VERSUS TRADING SHARES IN SOME CASES. THE TENDER OFFICER IS A DIRECT
TRADER SHARE. PEOPLE ARE TRYING TO FIND INNOVATIVE WAYS TO TRADE THE SHARES AND WE ARE FACILITATING A LOT OF THAT AT RAINMAKER. CAROLINE: IS THERE ANY COMPANY THAT CAN COMPARE? THERE ARE OTHER VERY HEADY VALUATIONS IN THE PRIVATE MARKET, BUT THEY HAVE BEEN FURTHER BETWEEN. ARE THERE OBVIOUS CULPRITS WERE EVERYONE WANTS IN AND OF THE OTHERS ARE SECOND-TIER? GREG: THE BIGGEST IS SPACEX. IT IS LITERALLY AND FIGURATIVELY DEFYING GRAVITY AND 2022. SPACEX WAS CONTINUING TO RISE.
WE SEE A TENDER ARISE IN SPACEX TO THE TUNE OF ANOTHER 750 MILLION DOLLARS. AT A $180 BILLION VALUATION. SPACEX HAS BEEN THE HOTTEST STOCK IN OUR PLATFORM FOR SEVERAL YEARS, AND CONTINUES TO BE EVEN THOUGH THE VALUATION HAS REACHED A HIGH LEVEL. I THINK IT IS 20X PROJECTED 2023 REVENUES. ANYTHING AI, FRANKLY, SINCE CHATGPT LAUNCHED. WHETHER IT IS ANTHROPIC, WE JUST SAW THEM ANNOUNCE A VALUATION THE END OF DECEMBER. WE SEE ELON MUSK HIMSELF HAS XAI WHICH I AM HEARING IS COMING OUT AT A $30 MILLION VALUATION.
AI COMPANIES ARE DEFINITELY HOT ACROSS THE BOARD, CLEARLY LED BY OPENAI. I THINK THAT IS WHERE WE SAW THE RISE OF NVIDIA IN THE PUBLIC MARKETS AND THE NUMBERS THEY ARE PUTTING UP. THERE IS CLEARLY A LOT OF DEMAND FOR AI CAPABILITIES. COMPANIES THAT HAVE REAL AI BUSINESSES ARE SEEING A LOT OF DEMAND. ED: SPECIFICALLY, WHERE'S THE DEMAND COMING FROM? WHO IS BUYING? GREG: ALL OF THE ABOVE. CLEARLY LED BY INSTITUTIONS WITH LARGER POCKETS OF CAPITAL.
STRONG DEMAND FROM INSTITUTIONAL CAPITAL GOING TO FAMILY OFFICES, HIGH NET WORTH INDIVIDUALS. I THINK THERE'S A FEAR OF MISSING OUT. I THINK THERE IS A VANITY PLAY. PEOPLE LIKE TO SAY THAT THEY
OWN NAI COMPANY. THERE IS A LITTLE TO BE DESIRED IN TERMS OF PROPERLY EVALUATING THESE BUSINESSES BECAUSE THE REVENUES ARE VERY LIGHT. A LOT OF IT IS BASED ON HOPES FOR THE FUTURE. WE WILL SEE WHAT HAPPENS IF GROWTH STARTS TO NORMALIZE AT THESE COMPANIES, BUT NOW THE DEMAND IS INSATIABLE ACROSS THE BOARD. ED: FOR WHAT IT'S WORTH THE SPACEX TENDER OF $180 BILLION, I DON'T THINK THAT THEY ANNOUNCED IT. I THINK WE REPORTED IT ON
DECEMBER 12, BUT THANK YOU. GREG: I SHOULD HAVE GIVEN YOU PROPER CREDIT FOR THAT. CAROLINE: HE WILL FORCE IT OUT OF YOU. DON'T WORRY. ED: I APPRECIATE THE ANALYSIS. THANK YOU. COMING UP, ONE AI POWERED SEARCH ENGINE TAKING ON THE LIKES OF GOOGLE AND CHATGPT. WE WILL TALK TO THE CEO OF
PERPLEXITY NEXT. THIS IS BLOOMBERG. ED: PERPLEXITY SAYS THAT IT'S AI-POWERED CONVERSATIONAL SEARCH ENGINE HAS THE CHOPS TO TAKE ON GOOGLE AND CHATGPT. BACKERS LIKE JEFF BEZOS AND NVIDIA AGREE. THE START UP RAISED TO $73.6 MILLION.
HERE TO TELL US MORE IS ARAVIND SRINIVAS, THE CEO OF PERPLEXITY. INTERESTING BACKERS, INTERESTING COMPETITION. THE TECHNOLOGY, WHAT IS INTERESTING ABOUT EITHER YOUR MODEL OR THE TOOL, THE GENERATIVE AI TOOL? ARAVIND: THANK YOU FOR HAVING ME. PERPLEXITY IS AN AI-POWERED CONVERSATIONAL ANSWER ENGINE, NOT A SEARCH ENGINE.
YOU ASK A QUESTION AND IT DIRECTLY GIVES YOU THE ANSWER. THE MAIN DIFFERENCE FROM OTHER CHATBOTS IS YOU ALWAYS GET THE SOURCES. IT ONLY SAYS WHAT EXISTS ON THE WEB ALREADY AND IT CLEARLY TELLS THE USER WHERE EVERY PART OF THE ANSWER IS COMING FROM ON THE WEB. ED: ONE OF THE BACKERS IS NVIDIA. THEY ALSO SUPPORT YOU IN COMPUTE.
ARAVIND: NVIDIA IS AN INVESTOR STRATEGICALLY WHERE WE PARTNER TO WORK ON FRAMEWORKS FOR TRAINING AND INFERENCE, BUT WE HAVE OUR COMPUTE CLUSTER ON OTHER HYPER SCALARS, LIKE AWS. ED: COMPETITION. I GET THE UNIQUENESS THAT THE SOURCE IS CLEARLY LABELED, BUT YOU ARE DIRECTLY TAKING ON CHATGPT AND BARD. IS THE SOURCING ENOUGH TO DENT
HER G8 -- SOURCING ENOUGH TO DIFFERENTIATE IN THAT MARKET? ARAVIND: OUR CHATBOTS WILL BE A WIDE VARIETY. THERE WILL BE A CHATBOT TO BRAINSTORM NEW IDEAS AND INTERACT TO ASK FOR IDEAS. TO WRITE GENERATIVE ESSAYS OR POEMS. THERE WILL BE CHARACTER AI WITH CHATTING PERSONALITIES. THERE HAS TO BE ONE SINGLE CHATBOT THAT YOU RELY ON FOR ACCURATE COME ALIVE, CORRECT INFORMATION. THAT MARKET IS THEREFORE THE
TAKING. CAROLINE: 10 MILLION PEOPLE ON A MONTHLY BASIS DO. I'M INTERESTED IN YOUR DESIRE TO BUILD THIS. YOU WERE AT OPENAI AS A RESEARCHER AND HAVE BEEN WORKING WITH DEEP MIND. WHY DID YOU FEEL THAT SOMETHING NEW WAS NECESSARY TO BE CREATED? ARAVIND: I ALWAYS WANTED TO TRY AN ENTREPRENEURIAL JOURNEY.
IT WAS NOT TO CREATE A COMPANY FOR SEARCH. WE INITIALLY STARTED TO BRAINSTORM AND CREATE PRODUCTS USING THE LARGE LANGUAGE MODELS AS AN OUT COMING TECHNOLOGY. BEFORE IT WAS EVEN CALLED GENERATIVE AI.
WE JUST TUMBLED UPON AN AMAZING IDEA OF COMBINING LARGE LANGUAGE MODELS AND WEB SEARCH TOGETHER AND FOUND A NEW PRODUCT CALLED PERPLEXITY. CAROLINE: YOU RAISE THIS MONEY. IS THAT TO BE PUT TOWARDS R&D COMPUTE POWER? I AM INTERESTED IN HOW YOU GOT IT IN THE HANDS OF 10 MILLION PEOPLE. ARAVIND: WE HAVE REALLY BEEN FORTUNATE TO HAVE COMPLETELY ORGANIC GROWTH. WE HAVE NOT PAID FOR ANY OF THESE USERS.
WE OBVIOUSLY ANNOUNCE ALL OF OUR PRODUCT FEATURES ON TWITTER AND PEOPLE FOLLOW US THERE, GET TO KNOW US, AND THERE IS A LOT OF WORD-OF-MOUTH GROWTH, BUT OUR SPEND IS GOING TO BE ON SCALING, ADOPTION, AND USAGE AND MORE ON COMPUTE RESOURCES. ED: CAROLINE AND I HAVE EXPERIENCED SOME OF THE WORD-OF-MOUTH ABOUT PERPLEXITY. THE STORY ABOUT OPENAI WAS ABOUT THE PUSH TO COMMERCIALIZE. DO YOU FEEL AS A LEADER IN THAT COMPANY THAT PRESSURE? ARAVIND: HONESTLY, I THINK PEOPLE JUST WANT PROGRESS. PROGRESS CAN BE REFLECTED IN CLEAR USER GROWTH AND ADOPTION AND NOT JUST REVENUE. AS YOU GET MORE USERS THERE WILL BE PLENTY OF OPPORTUNITIES FOR YOU TO MONETIZE, EITHER THROUGH SUBSCRIPTIONS OR OTHER FORMS OF MONETIZATION.
ALL OF OUR INVESTORS ARE IN LINE THAT WE WANT TO SCALE MORE GROWING A LARGER USER BASE. ED: ARAVIND SRINIVAS, GREAT TO HAVE YOU IN THE STUDIO IN SAN FRANCISCO. CAROLINE: WE FINISH UP ON A TOPIC THAT WE LOVE TO LACE THROUGHOUT THE SHOW, 2023 OR 2024. ALL THINGS AI, THE DESIRE TO GET INTO THE SECONDARY AND PRIMARY MARKET OF THESE COMPANIES, THE VALUATIONS THAT GO ON TO THIS ONGOING NARRATIVE. THAT FEELS LIKE IT DOES IT FOR THIS EDITION OF "BLOOMBERG TECHNOLOGY." ED: MUCH OF THE SAME THEMES OF LAST YEAR CONTINUING, BUT THAT'S NOT A BAD THING. THANK YOU FOR TUNING IN
WHEREVER YOU GET YOUR PODCASTS. OF COURSE, WE ARE UPLOADING EVERYTHING TO THE BLOOMBERG PLATFORMS. NEXT WEEK I'M OFF TO VEGAS. VEGAS, BABY. WILL I SURVIVE?
TUNE IN TO FIND OUT. BASED ON PRIOR EXPERIENCE. THIS IS BLOOMBERG TECHNOLOGY.
2024-01-07 11:48
